UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.

 

Picture 4 

 

FORM 10

 

GENERAL FORM FOR REGISTRATION OF SECURITIES

Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934

 

Santo Mining Corp

(Exact name of registrant as specified in its charter)

 

Wyoming

 

65-0945967

(State of incorporation

or organization)

 

(IRS Employer

Identification No.)

 

848 Biscayne Blvd, PH5

Miami, FL

33133

(Address of Principal Executive Offices) (Zip Code)

 

1-954-787-1770

(Registrant’s telephone number, including area code)

 

Email: info@groovy.click

 

Communication Copies to

Jeff Turner

JDT Legal

897 W Baxter Dr.

South Jordan, Utah 84095

Phone: 801.810.4465

Fax: 888.920.1297

jeff@jdt-legal.com

 

Securities to be Registered Under Section 12(g) of the Act:

 

Common Stock, Par Value $0.00001

(Title of Class)

 

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

 

Large, accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  


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INDEX TO FORM 10

 

Description

Page

 

 

 

Item 1.

Business

1

Item 1A.

Risk Factors

3

Item 2.

Financial Information

9

Item 3.

Properties

17

Item 4.

Security Ownership of Certain Beneficial Owners and Management

17

Item 5.

Directors and Executive Officers

18

Item 6.

Executive Compensation

19

Item 7.

Certain Relationship and Related Transactions, and Director Independence

20

Item 8.

Legal Proceedings

20

Item 9.

Market Price and Dividends on the Registrants Common Stock and Related Stockholder Matters

20

Item 10.

Recent Sale of Unregistered Securities

22

Item 11.

Description of Registrants Securities to be Registered

22

Item 12.

Indemnification of Directors and Officers

23

Item 13.

Financial Statements and Supplementary Data

23

Item 14.

Changes in and Disagreements with Accountants and Accounting and Financial Disclosure

24

Item 15.

Exhibits

24

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Registration Statement contains certain forward-looking statements. When used in this Registration Statement, statements which are not historical in nature, including words such as “believe,” “expect,” “may,” “will,” “should,” “expect,” “project,” “intend”, “plan”, “estimate”, “anticipate” or similar expressions are intended to identify forward-looking statements. They also include statements containing a projection of revenues, earnings or losses, capital expenditures, dividends, capital structure or other financial terms. All statements we make relating to estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results are forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments.

 

The forward-looking statements in this Registration Statement are based upon our management’s beliefs, assumptions and expectations of our future operations and economic performance, considering the information currently available to them.

 

These statements are not statements of historical fact, and are subject to risks and uncertainties, some of which are not currently known to us, which may change over time, and which may cause our actual results, performance, or financial condition to differ materially from the expectations of future results, performance, or financial condition we express or imply in any forward-looking statements. We derive most of our forward-looking statements from our current plans, expectations, and forecasts, which are based upon certain assumptions and are subject to a number of risks and uncertainties that could significantly affect our future financial condition and results. While we believe that our assumptions are reasonable, we caution that it is difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. There may be other factors not presently known to us or which we currently consider to be immaterial that may cause our actual results to differ materially from the expectations expressed or implied in our forward-looking statements.

 

All forward-looking statements and projections attributable to us or persons acting on our behalf apply only as of the date of this Registration Statement and are expressly qualified in their entirety by the cautionary statements included in this Registration Statement. We undertake No obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to unduly rely on such forward-looking statements when evaluating information presented herein.

 


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ITEM 1.BUSINESS. 

 

Corporate History

 

The Company was incorporated in the State of Nevada on July 8, 2009 as Santa Pita Corp to operate an internet portal for dentists and patients to access dental information, as well as a teeth-whitening business.

 

On July 30, 2012, the Company redirected its focus toward precious metal exploration and mining. Mineral exploration began with a mineral claim acquisition agreement (the “Acquisition Agreement”), with GEXPLO, SRL (the “Vendor”) and the Company, whereby the Company agreed to acquire from the Vendor a one hundred percent (100%) interest in a claim (“the Claim”) located in the Dominican Republic.

 

The owner of the Vendor, Alain French, became President, Chief Executive Officer, Secretary, Treasurer and Director on the acquisition closing date. The Company was renamed Santo Mining Corp.

 

The Company also has three subsidiaries: (1) Cathay International LLC, a Florida corporation specializing in administration, logistics, and an Asian to USA interoperability; (2) Santo Blockchain Labs Corp. a Wyoming corporation leveraging the blockchain and crypto-asset states laws of the State of Wyoming; and (3) Santo Blockchain Labs of Colombia S.A.S., El Poblado, Medellin, Antioquia, Republic of Colombia.

 

Santo Mining Corp. was re-domiciled to Florida in July 2015.  In July 2021, the Company re-redomiciled to Wyoming where we maintain an active business registration in good standing.

 

Our Current Business

 

Santo Mining Corp, is a forward-thinking and innovative software development company that specializes in the creation of cutting-edge solutions for the global cannabis industry. Our primary focus revolves around the development of advanced software applications harnessing technologies such as Blockchain as a Service (BaaS), Non-Fungible Tokens (NFTs), Decentralized Autonomous Organizations (DAOs), Internet of Things (IoT), and Artificial Intelligence (AI). SANTO is dedicated to revolutionizing and enhancing the operational efficiency, compliance, and sustainability of businesses within the rapidly expanding global cannabis sector.

 

Core Competencies

Our core competencies serve as the bedrock of our distinctive value proposition:

 

Blockchain as a Service (BaaS):

 

·SANTO boasts deep expertise in BaaS, allowing us to create and deploy customized blockchain solutions. These solutions enhance trust, transparency, and traceability within the global cannabis supply chain while ensuring robust security measures are in place. 

 

·NFT Development: We excel in designing and developing NFT solutions specifically tailored for cannabis applications. These solutions encompass product authentication, digital collectibles, and intellectual property protection. Our NFT platforms are engineered to elevate engagement and bolster brand recognition for cannabis enterprises on a global scale. 

 

·Decentralized Autonomous Organizations (DAOs): SANTO specializes in the conception and implementation of DAOs that empower cannabis communities and stakeholders to collectively participate in governance and decision-making. Our DAOs are engineered to foster transparency, inclusivity, and decentralized management across borders. 

 

·Internet of Things (IoT): We provide advanced IoT solutions that enable real-time monitoring and control of environmental conditions within cannabis cultivation facilities. These solutions contribute to optimized growing conditions, increased crop yields, and the responsible utilization of resources. 

 

·Artificial Intelligence (AI): Leveraging AI capabilities, SANTO offers data-driven insights and analytics to empower cannabis businesses in optimizing operations, facilitating informed decision-making, and  


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enhancing overall operational efficiency.

 

Product and Service Offering

Our extensive portfolio of software solutions and services encompasses:

 

·Blockchain-Based Solutions: We specialize in developing bespoke blockchain applications that enhance transparency, traceability, and security within the global cannabis supply chain. Our blockchain solutions facilitate compliance with evolving regulatory standards and mitigate fraudulent activities. 

 

·NFT Platforms: SANTO provides NFT platforms that empower global cannabis businesses to create, manage, and trade digital assets. Whether utilized for unique product labeling, digital collectibles, or intellectual property protection, our NFT solutions drive engagement and enhance brand recognition on a global scale. 

 

·DAO Development: We are at the forefront of designing and implementing DAOs that facilitate community-driven governance and decision-making within the international cannabis ecosystem. Our DAOs are meticulously crafted to promote transparency, inclusivity, and decentralized governance across borders. 

 

·IoT Applications: Our IoT solutions enable real-time monitoring and control of environmental conditions within cannabis cultivation facilities on a global scale. This results in optimized growing conditions, increased crop yields, and responsible resource management. 

 

·AI-Powered Analytics: SANTO’s AI-driven analytics tools empower global cannabis companies to extract actionable insights from their data. These insights facilitate informed decision-making, streamline operations, and drive sustainable growth across international boundaries. 

 

Competition

 

The Company faces competition from companies of varying sizes, some of which have greater access to financial resources, research and development, and other resources.

 

In many cases, the Company’s competitors have longer operating histories, established ties to the market and consumers, greater brand awareness, and greater financial, technical, and marketing resources. The Company’s ability to compete depends, in part, upon a number of factors outside the Company’s control, including the ability of the Company’s competitors to develop alternatives that are superior. If the Company fails to successfully compete in its markets, or if the Company incurs significant expenses in order to compete, it will have a material adverse effect on the Company’s results of operations.

 

Compliance with Government Regulation

 

If regulatory changes or interpretations of our activities require our registration as a money services business (“MSB”) under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act, or otherwise under state laws, we may incur significant compliance costs, which could be substantial or cost prohibitive. If we become subject to these regulations our costs in complying with them may have a material negative effect on our business and the results of our operations.

 

To the extent that the activities of the Company cause it to be deemed an MSB under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act, we may be required to comply with FinCEN regulations, including those that would mandate us to implement anti-money laundering programs, make certain reports to FinCEN and maintain certain records.

 

To the extent that the activities of the Company cause it to be deemed a “money transmitter” (“MT”) or equivalent designation, under state law in any state in which the Company operates, we may be required to seek a license or otherwise register with a state regulator and comply with state regulations that may include the implementation of anti-money laundering programs, maintenance of certain records and other operational requirements. Currently, the NYSDFS has finalized its “BitLicense” framework for businesses that conduct “virtual currency business. The Company will continue to monitor developments in such legislation, guidance or regulations.


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Such additional federal or state regulatory obligations may cause us to incur extraordinary expenses, possibly affecting an investment in the Shares in a material and adverse manner. Furthermore, the Company and its service providers may not be capable of complying with certain federal or state regulatory obligations applicable to MSBs and MTs. If the Company is deemed to be subject to and determines not to comply with such additional regulatory and registration requirements, we may act to dissolve and liquidate the Company. Any such action may adversely affect an investment in the Company.

 

Industry

 

Our success will depend on our ability to obtain and maintain meaningful intellectual property protection for any such intellectual property. The names and/or logos of Company brands (whether owned by the Company or licensed to us) may be challenged by holders of trademarks who file opposition notices, or otherwise contest trademark applications by the Company for its brands. Similarly, domains owned and used by the Company may be challenged by others who contest the ability of the Company to use the domain name or URL. Such challenges could have a material adverse effect on the Company’s financial results as well as your investment.

 

Subsidiaries

 

Cathay International, LLC

Santo Blockchain Labs Corporation

Santo Blockchain Labs of Colombia S.A.S.

8000 Avalon Blvd., Suite 100

1309 Coffeen Avenue Suite 2902

Cl. 7#37-50, Torre1 Unit 1016

Alpharetta, Georgia 30009

Sheridan, Wyoming 82801

El Poblado, Medellin, Antioquia

 

 

Republic of Colombia

 

Employees

 

As of the date of this Form-10, the Company has 6 full-time, 3 full-time directors & part-time employees. There is no collective agreement between the Company and its employees. The employment relationship between employees and the Company is standard for the industry.

 

Corporate Information

 

Our corporate offices are located at Cl. 7 #37-50, El Poblado, Torre 1 Unit 1016, Medellín 050021, Republic of Colombia. Our telephone number is +57-304-312-0273.

 

ITEM 1A.RISK FACTORS. 

 

You should carefully consider the risks described below together with all of the other information included in this registration statement before making an investment decision with regard to our securities. The statements contained in or incorporated herein that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following risks occurs, our business, financial condition or results of operations could be harmed. In that case, you may lose all or part of your investment. In addition to other information in this registration statement and in other filings we make with the Securities and Exchange Commission, the following risk factors should be carefully considered in evaluating our business as they may have a significant impact on our business, operating results and financial condition. If any of the following risks occurs, our business, financial condition, results of operations and future prospects could be materially and adversely affected. Because of the following factors, as well as other variables affecting our operating results, past financial performance should not be considered as a reliable indicator of future performance and investors should not use historical trends to anticipate results or trends in future periods.

 

Risks Related to the Company and Its Business

 

The Company has a limited operating history.

 

The Company has a limited operating history. There can be no assurance that the Company’s proposed plan of business can be realized in the manner contemplated and, if it cannot be, shareholders may lose all or a substantial part of their investment. There is no guarantee that it will ever realize any significant operating revenues or that its operations will ever be profitable.


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We are dependent upon management, key personnel, and consultants to execute our business plan.

 

Our success is heavily dependent upon the continued active participation of our current management team, especially our current executive officer. Loss of this individual could have a material adverse effect upon our business, financial condition, or results of operations. Further, our success and the achievement of our growth plans depends on our ability to recruit, hire, train, and retain other highly qualified technical and managerial personnel. Competition for qualified employees among companies in our industry, and the loss of any of such persons, or an inability to attract, retain, and motivate any additional highly skilled employees required for the expansion of our activities, could have a materially adverse effect on our business. If we are unable to attract and retain the necessary personnel, consultants, and advisors, it could have a material adverse effect on our business, financial condition, or operations.

 

Although we are dependent upon certain key personnel, we do not have any key man life insurance policies on any such people.

 

We are dependent upon management in order to conduct our operations and execute our business plan; however, we have not purchased any insurance policies with respect to those individuals in the event of their death or disability. Therefore, should any of those key personnel, management, or founders die or become disabled, we will not receive any compensation that would assist with any such person’s absence. The loss of any such person could negatively affect our business and operations.

 

Changes in employment laws or regulations could harm our performance.

 

Various federal and state labor laws govern the Company’s relationship with our employees and affect operating costs, including labor laws of non-USA jurisdictions. These laws may include minimum wage requirements, overtime pay, healthcare reform and the implementation of various federal and state healthcare laws, unemployment tax rates, workers’ compensation rates, citizenship requirements, union membership and sales taxes. A number of factors could adversely affect our operating results, including additional government-imposed increases in minimum wages, overtime pay, paid leaves of absence and mandated health benefits, mandated training for employees, changing regulations from the National Labor Relations Board and increased employee litigation including claims relating to the Fair Labor Standards Act.

 

The Company is subject to income taxes as well as non-income-based taxes such as payroll, sales, use, value-added, net worth, property, and goods and services taxes.

 

Significant judgment is required in determining our provision for income taxes and other tax liabilities. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. Although the Company believes that our tax estimates will be reasonable: (i) there is no assurance that the final determination of tax audits or tax disputes will not be different from what is reflected in our income tax provisions, expense amounts for non-income-based taxes and accruals and (ii) any material differences could have an adverse effect on our financial position and results of operations in the period or periods for which a determination is made.

 

Our ability to adopt technology in response to changing security needs or trends poses a challenge to the safekeeping of our digital assets.

 

The history of digital asset exchanges has shown that exchanges and large holders of digital assets must adapt to technological change in order to secure and safeguard their digital assets. We rely on third party storage solutions and “cold storage” of our digital wallets to safeguard our digital assets from theft, loss, destruction, or other issues relating to hackers and technological attack; however, malicious actors may be able to intercept our digital assets in the process of selling them. Further, we may move our digital assets to various exchanges to exchange them for fiat currency, which will require us to rely on the security protocols of these exchanges to safeguard our digital assets. While these exchanges purport to be secure, and while we believe them to be so, no security system is perfect and malicious actors may be able to intercept our digital assets while we are in the process of selling them via such exchanges. Given the growth in their size and their relatively unregulated nature, we believe these exchanges will become a more appealing target for malicious actors. To the extent we are unable to identify and mitigate or stop new security threats, our digital assets may be subject to theft, loss, destruction, or other attack, which could adversely affect an investment in us.


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The limited rights of legal recourse against us, and our lack of insurance protection expose us and our shareholders to the risk of loss of our digital assets for which no person is liable.

 

The digital assets held by us are not insured. Further, banking institutions will not accept our digital assets; they are therefore not insured by the Federal Deposit Insurance Corporation (“FDIC”) or the Securities Investor Protection Corporation (“SIPC”). Therefore, a loss may be suffered with respect to our digital assets which is not covered by insurance, and we may not be able to recover any of our carried value in these digital assets if they are lost or stolen or suffer significant and sustained reduction in conversion spot price. If we are not otherwise able to recover damages from a malicious actor in connection with these losses, our business and results of operations may suffer, which may have a material negative impact on our stock price.

 

We are not subject to Sarbanes-Oxley regulations and lack the financial controls and safeguards required of public companies.

 

We have not been subject to Sarbanes-Oxley throughout our operating history and therefore have not previously developed the internal infrastructure necessary to complete an attestation of our financial controls pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. We expect to incur substantial expenses and diversion of management’s time if and when it becomes necessary to perform the system and process evaluation, testing and remediation required in order to comply with the management certification and auditor attestation requirements.

 

There is no guarantee that we will have sufficient cash flow from our business to pay our indebtedness or that we will not incur additional debt.

 

Holders of convertible notes issued by us may convert such notes at their option prior to the scheduled maturities of the respective convertible notes under certain circumstances pursuant to the terms of such notes. Upon conversion of the applicable convertible notes, we will be obligated to deliver cash and/or shares pursuant to the terms of such notes. Moreover, holders of such convertible notes may have the right to require us to repurchase their notes upon the occurrence of a fundamental change pursuant to the terms of such notes.

 

Our ability to make scheduled payments of the principal and interest on our indebtedness when due, to make payments upon conversion or repurchase demands with respect to our convertible notes, or to refinance our indebtedness as we may need or desire, depends on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control. Our business may not generate cash flow from future operations sufficient to satisfy our obligations under our existing indebtedness and any future indebtedness we may incur, and to make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as reducing or delaying investments or capital expenditures, selling assets, refinancing, or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance existing or future indebtedness will depend on the capital markets and our financial condition at such time. In addition, our ability to make payments may be limited by law, by regulatory authority, or by agreements governing our future indebtedness. We may not be able to engage in these activities on desirable terms or at all, which may result in a default on our existing or future indebtedness and harm our business, financial condition, and operating results.

 

Our operating plan relies in large part on assumptions and analysis developed by the Company. If these assumptions prove to be incorrect, the Company’s actual operating results may be materially different from our forecasted results.

 

Whether actual operating results and business developments will be consistent with the Company’s expectations and assumptions as reflected in its forecast depends on a number of factors, many of which are outside the Company’s control, including, but not limited to:

·whether the Company can obtain sufficient capital to sustain and grow its business 

·our ability to manage the Company’s growth 

·demand for the Company’s products and services 

·the timing and costs of new and existing marketing and promotional efforts 

·competition 

·the Company’s ability to retain existing key management, to integrate recent hires and to attract, retain and motivate qualified personnel 

·the overall strength and stability of domestic and international economies 


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·consumer spending habits 

 

Unfavorable changes in any of these or other factors, most of which are beyond the Company’s control, could materially and adversely affect its business, results of operations and financial condition.

 

Our indebtedness could adversely affect our financial condition or operations, and our ability to raise additional capital financing on favorable terms.

 

As of September 30, 2023, we had total outstanding liabilities of $5,199,374. Our indebtedness and the terms of the instruments governing such indebtedness could have significant consequences such as:

 

·Increasing our vulnerability to general adverse economic and industry conditions; 

·Limiting our ability to fund future working capital, capital expenditures costs and other general corporate requirements; 

·Requiring us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes; 

·Limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; 

·Placing us at a competitive disadvantage compared to our competitors that have less debt; and 

·Limiting, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds or engage in various transactions that might otherwise be beneficial to us. 

 

We will likely need to raise additional capital through debt and/or equity financing. There can be no assurance that adequate debt and equity financing will be available on satisfactory terms. Any such failure to service our debt or an inability to obtain further financing could have a negative effect on our business and operations.

 

Additional financing may not be available to us when we need or want it, nor may it be available on satisfactory terms.

 

We have limited capital and there is no assurance that our current capital is sufficient to implement our business plan. We will likely require additional debt and/or equity financing to pursue our growth and business strategy, including enhancements to our operations infrastructure and improving our ability to respond to competitive pressures. There can be no assurance that adequate debt and/or equity financing will be available or offered on satisfactory terms. Any failure to obtain further financing could have a materially adverse effect on our business, financial condition, and operating results.

 

Other Risks

 

We may not realize the anticipated benefits of past or future acquisitions, and integration of these acquisitions may disrupt our business and management.

 

In the future, we may acquire additional companies, project pipelines, products, or technologies or enter into join ventures or other strategic initiatives. We may not realize the anticipated benefits of an acquisition and each acquisition has numerous risks. These risks include the following:

 

·high volatility in the value of cryptocurrencies generally and in the value of Bitcoin and Ethereum particularly, and the effect of such volatility on our ability to operate profitably; 

·changes in the regulatory and legal environments in Latin America and the Caribbean Region in which we operate may lead to future challenges to operating our business or may subject our business to added costs with the result that some or all of our operating facilities become less profitable or unprofitable altogether; 

·changes in United States tax laws may impose burdensome reporting or regulation on our operations; 

·risks related to our failure to continue to obtain financing on a timely basis and on acceptable terms; 

·our ability to keep pace with technology changes and competitive conditions; 

·other risks and uncertainties related to our business plan and business strategy; and 

·the impact on the world economy of coronavirus (“COVID-19”). 


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Risks Related to the Ownership of Our Common Stock

 

If we are subject to Securities and Exchange Commission regulations relating to low-priced stocks, the market for our common stock could be adversely affected.

 

The SEC has adopted regulations concerning low-priced or “penny” stocks. The regulations generally define “penny stock” to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. If our shares are offered at a market price less than $5.00 per share, and do not qualify for any exemption from the penny stock regulations, our shares may become subject to these additional regulations relating to low-priced stocks.

 

The penny stock regulations require that broker-dealer who recommend penny stocks to persons other than institutional accredited investors make a special suitability determination for the purchase, receive the purchaser’s written agreement to the transaction prior to the sale and provide the purchaser with risk disclosure documents that identify risks associated with investing in penny stocks. Furthermore, the broker-dealer must obtain a signed and dated acknowledgment form the purchaser demonstrating that the purchaser has actually received the required risk disclosure document before effecting a transaction in penny stock. These requirements have historically resulted in reducing the level of trading activity in securities that become subject to the penny stock rules.

 

The additional burdens imposed upon broker-dealers by these penny stock requirements may discourage broker-dealers from effecting transactions in the common stock, which could severely limit the market liquidity of our common stock and our shareholders’ ability to sell our common stock in the secondary market.

 

The trading price of our common stock is likely to continue to be volatile.

 

The trading price of our common stock has been highly volatile and could continue to be subject to wide fluctuations in response to various factors, some of which are beyond our control. The stock market in general has experienced, and likely will continue to experience, substantial price and volume fluctuations that are often unrelated or disproportionate to the operating performances of companies. Our common stock may be traded by short sellers which may put pressure on the supply and demand for our company stock, further influencing volatility in its market price. Public perception and other factors outside of our control may additionally impact our stock price and volatility. The market price of our common stock will likely fluctuate significantly in response to the following or other factors, again some of which are beyond are control:

 

·Significant delays in our supply channel; 

·Inability to raise additional capital or do so on favorable terms, if necessary, to maintain or grow our operations; 

·Additions or departures of key personnel; 

·Future sales of our common stock; 

·Stock market price and volume fluctuations attributable to inconsistent trading volume levels of our stock; 

·Commencement of or involvement in litigation; and 

·Our inability to effectively manage our current and future operations. 

 

Our largest stockholders have significant control over us, and their interests may conflict with or differ from interests of other stockholders.

 

Our largest stockholders are Franjose Yglesias, Marc Williams, and Kevin Jodrey (collectively, the “Significant Stockholders”). The Significant Stockholders have substantial influence over all matters requiring stockholder approval, including the election of our directors and the approval of significant corporate transactions such as mergers, tender offers, and the sale of all or substantially all of our assets. The interests of the Significant Stockholders could conflict with or differ from interests of other stockholders. For example, the concentration of ownership held by the Significant Stockholders could delay, defer, or prevent a change of control of our company or impede a merger, takeover, or other business combination which a majority of stockholders may view favorably.


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We may fail to meet our publicly announced guidance or other expectations about our business, which could cause our stock price to decline.

 

From time-to-time we may provide guidance regarding our expected financial and business performance. Correctly identifying key factors affecting business conditions and predicting future events is inherently an uncertain process, and our guidance may not ultimately be accurate. Our guidance is based on certain assumptions such as those relating to sales volumes (which generally are not linear throughout a given period), average sales prices, supplier and commodity costs, and planned cost reductions. If our guidance varies from actual results due to our assumptions not being met or the impact on our financial performance that could occur as a result of various risks and uncertainties, the market value of our common stock could decline significantly.

 

Transactions relating to our convertible notes may dilute the ownership interest of existing stockholders or may otherwise depress the price of our common stock.

 

The conversion of some or all of the convertible notes issued by us, or our subsidiaries would dilute the ownership interests of existing stockholders to the extent we deliver shares upon conversion of any of such notes by their holders, and we may be required to deliver a significant number of shares. Any sales in the public market of the common stock issuable upon such conversion could adversely affect their prevailing market prices. In addition, the existence of the convertible senior notes may encourage short selling by market participants because the conversion of such notes could be used to satisfy short positions, or the anticipated conversion of such notes into shares of our common stock could depress the price of our common stock.

 

We do not anticipate paying any dividends on our common stock.

 

We do not anticipate paying any dividends on our common stock for the foreseeable future. Rather, we intend to retain any future earnings for use in the operation and expansion of our business.

 

General Risk Factors

 

Unanticipated changes in our tax provisions, the adoption of a new U.S. tax legislation, or exposure to additional income tax liabilities could affect our profitability.

 

We are subject to income taxes, and are therefore subject to potential tax examinations, in the United States. Tax authorities may disagree with our tax positions and assess additional taxes. We regularly assess the likely outcome of these examinations in order to determine the appropriateness of our tax provision. However, there can be no assurance that we will accurately predict the outcomes of these potential examinations, and the amounts ultimately paid upon resolution of examinations could be materially different from the amount previously included in our income tax expense and therefore, could have a material impact on our tax provision, net income, and cash flows. In addition, our future effective tax rate could be adversely affected by changes to our operating structure, changes in the valuation of deferred tax assets and liabilities, changes in tax laws, and the discovery of new information in the course of our tax return preparation process. In addition, recently announced proposals for new U.S. tax legislation could have a material effect on the results of our operations, if enacted.

 

We are susceptible to changes in employment laws and regulations or to changes in employment classifications by government agencies.

 

As we expand our operations, we may become subject to additional federal and state employment laws. Therefore, we may be required to allocate resources, including management’s time, to establishing a policy pursuant to which we evaluate any changes in federal and state laws to ensure our compliance with these requirements. In addition, other factors beyond our control, including increases in minimum wage requirements, overtime pay, healthcare reform, and other laws and regulations affecting employees, independent contractors, and other third-party service providers, could have a material adverse effect on our business, financial condition, and results of operation.

 

We depend on third-party providers for internet, other communication infrastructures and data management systems upon which our operations critically rely.

 

We rely on third-party service providers for substantially all of our communication and information technology systems, including for product data management, procurement, inventory management, operations planning and


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execution, sales, service, and logistics, financial, tax and regulatory compliance systems. We rely on our third-party service providers to protect our systems and databases against intellectual property theft, data breaches, sabotage and other external or internal cyber-attacks or misappropriation. No assurances can be made that third-party service providers will protect against those and other risks. Any disruption, either temporary or permanent, to our communication and technology systems would likely have a significant adverse material effect on our business, financial condition, and operating results.

 

Our operations could be adversely affected by events outside of our control, such as natural disasters, wars, or health epidemics.

 

We may be impacted by natural disasters, wars, health epidemics, or other events outside of our control. If major disasters such as earthquakes, floods, fires, or other events occur, or our information system or communications breaks down or operates improperly, our headquarters and/or exploration operations on our various mining properties may be seriously damaged, or we may have to stop or delay our operations. In addition, the global COVID-19 pandemic has impacted economic markets, manufacturing operations, supply chains, employment and consumer behavior in nearly every geographic region and industry across the world, and we have been, and may in the future be, adversely affected as a result. We may incur expenses or delays relating to such events outside of our control, which could have a material adverse impact on our business, operating results, and financial condition.

 

ITEM 2.FINANCIAL INFORMATION. 

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Fiscal Year End

 

We have included with this offering circular audited financial statements for the fiscal years ended December 31, 2022, and December 31, 2021, and unaudited financial statements for the nine months ended September 30, 2023.

 

Forward-Looking Statements

 

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are forward-looking statements. These forward-looking statements generally are identified by the words believes, project, expects, anticipates, estimates, intends, strategy, plan, may, will, would, will be, will continue, will likely result, and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include but are not limited to changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

 

Business Development Plan

 

Santo Mining Corp, operating under the trade name “SANTO,” is uniquely positioned to capitalize on a myriad of opportunities within the global cannabis industry. As a specialized software development company, our core competencies in Blockchain as a Service (BaaS), Non-Fungible Tokens (NFTs), Decentralized Autonomous Organizations (DAOs), Internet of Things (IoT), and Artificial Intelligence (AI) open the doors to a wealth of prospects in this dynamic sector. Here are key opportunities that stand before us:

 

Cannabis Industry Growth:

The global cannabis industry is experiencing exponential growth, driven by increasing legalization efforts, changing consumer preferences, and a growing acceptance of the plant’s medicinal and recreational uses. SANTO can continue to ride this wave by providing essential technological infrastructure.

 

·Compliance and Regulatory Solutions: Evolving regulations are a constant challenge for the cannabis industry. SANTO’s expertise in BaaS and blockchain technology positions us to provide robust compliance  


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solutions, ensuring cannabis businesses meet the ever-changing regulatory landscape on a global scale.

 

·Supply Chain Optimization: Our BaaS and blockchain solutions enable end-to-end supply chain traceability. This capability offers cannabis companies the opportunity to enhance transparency, reduce fraud, and ensure product integrity from cultivation to point of sale. 

 

·NFT Applications: NFTs offer numerous opportunities, from verifying product authenticity to creating digital collectibles for cannabis brands. SANTO can lead the way in leveraging NFTs to enhance engagement and brand recognition within the cannabis industry. 

 

·Decentralized Governance: DAOs are gaining traction as a means of decentralized decision-making. SANTO’s proficiency in DAO development positions us to empower cannabis communities and businesses to govern themselves in a transparent and inclusive manner. 

 

·IoT for Sustainable Cultivation: As sustainability becomes a focal point in agriculture, SANTO’s IoT solutions can help cannabis cultivators optimize resource usage, reduce waste, and increase crop yields in environmentally responsible ways. 

 

·Data-Driven Insights: Our AI-driven analytics tools provide a significant opportunity for cannabis businesses to extract valuable insights from their data. This can lead to informed decision-making, process optimization, and enhanced profitability on a global scale. 

 

·International Expansion: The cannabis industry is rapidly expanding beyond borders. SANTO can seize opportunities in emerging cannabis markets by tailoring our solutions to meet region-specific needs and compliance requirements. 

 

·Strategic Partnerships: Collaborations with key players in the cannabis industry can amplify our reach and impact. Partnering with growers, dispensaries, and regulatory bodies can lead to mutually beneficial opportunities for growth and innovation. 

 

·Research and Development: Continued investment in research and development allows SANTO to stay at the forefront of technology in the cannabis sector. New technologies and innovations can open doors to novel opportunities. 

 

In summary, Santo Mining Corp, DBA SANTO, is a pioneering software development company specializing in BaaS, NFTs, DAOs, IoT, and AI solutions for the global cannabis industry. Our unyielding dedication to innovation, industry expertise, and ethical practices underscores our commitment to driving positive change within the international cannabis sector through the transformative power of technology. We are poised to lead the digital transformation of the global cannabis industry, fostering operational efficiency, compliance, and sustainability on a global scale.

 

Summary of Our Opportunity

 

Blockchain technology is renowned for its security, transparency, and decentralization, making it an attractive solution for various industries. BaaS solutions would allow organizations to take advantage of these benefits without having to invest time and resources into developing a blockchain solution from scratch.

 

Utilizing BaaS, organizations can leverage the blockchain technology to improve their existing business processes, such as supply chain management, asset tracking, identity verification, and more. The technology can also be used to develop decentralized applications that can be customized to meet specific business requirements.

 

One of the key benefits of BaaS is that it enables organizations to reduce the costs associated with developing and maintaining a blockchain solution. BaaS providers handle the infrastructure and technical support, so companies can focus on developing and deploying their solutions quickly.

 

BaaS solutions are also highly scalable, allowing organizations to expand their blockchain solutions as their needs change. This is particularly useful for companies that are looking to implement blockchain solutions but are unsure of their future growth.


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Santo Blockchain Labs can provide Blockchain as a Service (BaaS) for your organizations with a secure, flexible, and scalable solution for utilizing blockchain technology. With BaaS, companies can take advantage of the benefits of blockchain technology without the need for extensive in-house expertise or infrastructure, allowing them to focus on their core business processes.

 

Staking pools allow coin holders to combine their computational resources as a way to earn rewards. Each pool operator charges a fee for the coin holders to stake in the selected pool. The staking pool model idea is quite similar to the traditional mining pool.

 

Real Estate Tokenization offers investors access to fractional ownership and a frictionless form of investment. Real Estate Tokenization is the process of converting the value of a real estate property into digital tokens that you can sell to investors to raise funds. NFT unlocks the doors of Real-Estate by enabling it to digitize your lands and the infrastructures virtually.

 

Results of Operations

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included elsewhere in this prospectus. Material changes in our Statement of Operations for the nine months ended September 30, 2023, and 2022, and the years ended December 31, 2022 and 2021 are discussed below.

 

Three Months Ended September 30, 2023, compared to Three Months Ended September 30, 2022

 

The Company did not generate any revenues for the three months ended September 30, 2023 and 2022.

Total operating expenses for the three months ended September 30, 2023 and September 30, 2022 were $118,630 and $70,350, respectively.  Total operating expenses consisted of professional fees of $5,140 and $0, respectively, selling, general and administrative expenses of $58,001 and $62,326, respectively; rent expense of $44,005 and $8,024, respectively and depreciation and amortization of $11,484 and $0, respectively.

 

Professional fees increased by approximately 100% due to preparing the Company to be full reporting with the Securities and Exchange Commission.

 

General and administrative expenses decreased by approximately 7% due to the Company implementing cost savings in its general operations.

 

Rent expenses increased by approximately 448% due to the Company executing new leases.

 

Depreciation and amortization expenses increased by approximately 100% due to the addition of new depreciable property, plant and equipment.

 

Other income (expense) for the three months ended September 30, 2023 and 2022 was ($258,549) and ($44,291), respectively. The change in other income (expense) can be attributed to the Company’s increase in interest expense and the ratable changes in derivative liabilities. Other income (expense) consisted of interest expense of ($52,022) and ($44,291), respectively; interest expense related to derivatives of ($71,585) and $0, respectively and change in derivatives of ($134,989) and $0, respectively.

 

Net loss from operations for the three months ended September 30, 2023 was $377,179 compared to $114,641 for the three months ended September 30, 2022, a change of $262,538 or approximately 229%. The increase in the net loss can primarily be attributed to the Company’s ratable changes in derivatives.

 

Othe comprehensive income (loss) for the three months ended September 30, 2023 and 2022 was $424 and $0, respectively.  The change in other comprehensive income (loss) can be attributed to the Company’s unrealized foreign currency translation income.

 

Nine Months Ended September 30, 2023, compared to Nine Months Ended September 30, 2022

 

The Company did not generate any revenues for the nine months ended September 30, 2023 and 2022.


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Total operating expenses for the nine months ended September 30, 2023 and September 30, 2022 were $321,904 and $435,836, respectively.  Total operating expenses consisted of professional fees of $8,352 and $3,739, respectively, selling, general and administrative expenses of $217,588 and $411,878, respectively; rent expense of $61,512 and $20,219, respectively and depreciation and amortization of $34,452 and $0, respectively.

 

Professional fees increased by approximately 123% due to preparing the Company to be full reporting with the Securities and Exchange Commission.

 

General and administrative expenses decreased by approximately 47% due to the Company implementing cost savings in its general operations.

 

Rent expenses increased by approximately 204% due to the Company executing new leases.

 

Depreciation and amortization expenses increased by approximately 100% due to the addition of new depreciable property, plant and equipment.

 

Other income (expense) for the nine months ended September 30, 2023 and 2022 was ($643,521) and $644,710, respectively. The change in other income (expense) can be attributed to the Company’s increase in interest expense, extinguishment of debt, disposal of assets and the ratable changes in derivative liabilities. Other income (expense) consisted of interest expense of ($147,982) and ($128,012), respectively; interest expense related to derivatives of ($226,896) and ($281,194), respectively; loss on disposal of assets of $0 and $(70,000), respectively; gain on extinguishment of debt of $0 and $76,547, respectively and change in derivatives of ($268,716) and $1,047,369, respectively.

 

Net income (loss) from operations for the nine months ended September 30, 2023 was ($965,425) compared to $208,874 for the nine months ended September 30, 2022, a change of $1,174,299 or approximately 562%. The increase in the net loss can primarily be attributed to the Company’s ratable changes in derivatives.

 

Othe comprehensive income (loss) for the nine months ended September 30, 2023 and 2022 was $2,341 and $0, respectively.  The change in other comprehensive income (loss) can be attributed to the Company’s unrealized foreign currency translation income.

 

Liquidity and Capital Resources

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business.

 

As of September 30, 2023, the Company had $44,004 in cash and cash equivalents. The Company did not generate revenues for the nine months ended September 30, 2023 and has relied primarily upon capital generated from public and private offerings of its securities.

 

The Company sustained a loss of $965,425 for the nine months ended September 30, 2023 and net income of $208,874 for the nine months ended September 30, 2022. The Company has accumulated losses totaling $7,297,254 at September 30, 2023.  Because of the absence of positive cash flows from operations, the Company will require additional funding for continuing the development and marketing of products. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

We are presently able to meet our obligations as they come due through our borrowing and the support of our shareholders. At September 30, 2023, we had a working capital deficit of $5,155,370.  Our working capital deficit is due to the results of operations.

 

Cash flows

 

The following table sets forth the primary sources and uses of cash and cash equivalents for the nine months ended September 30, 2023 and 2022 as presented below:


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SANTO MINING CORP.

d/b/a SANTO BLOCKCHAIN LABS CORP.

Consolidated Condensed Statements of Cash Flows

(Unaudited)

 

 

 

For the Nine Months Ended

 

 

 

September 30,

 

 

 

2023

 

2022

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

Net income (loss)

$

(965,425)

$

208,874

 

Adjustment to reconcile net loss to net cash provided in operations:

 

 

 

 

 

Inventory

 

----

 

(49,422)

 

Change in fair market value of derivatives

 

268,716

 

(1,047,369)

 

Amortization of debt discount

 

226,896

 

302,241

 

Depreciation and amortization

 

34,452

 

----

 

Gain on extinguishment of debt

 

----

 

(76,547)

 

Change in assets and liabilities:

 

 

 

 

 

Accounts payable and accrued expenses

 

----

 

75,000

 

Accrued compensation

 

92,355

 

57,661

 

Accrued interest

 

147,982

 

99,278

 

Net Cash (used in) provided by operating activities

 

(195,024)

 

(430,284)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

Loss on extinguishment of intangible asset

 

----

 

70,000

 

Sale (purchase) of digital assets

 

----

 

229,766

 

Net Cash Used in investing activates

 

----

 

299,766

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

Proceeds (payments) notes payable, related party

 

4,845

 

(30,340)

 

Proceeds (payments) convertible notes payable

 

205,000

 

150,000

 

Stock issued to reduce debt

 

----

 

7,687

 

Net Cash provided by financing activates

 

209,845

 

127,347

 

 

 

 

 

 

Foreign currency translation

 

2,341

 

----

 

 

 

 

 

 

Net change in cash and cash equivalents

 

17,162

 

(3,171)

 

Cash and cash equivalents Beginning of period

 

26,842

 

10,150

 

Cash and cash equivalents End of period

$

44,004

$

6,979

Supplemental cash flow information

 

 

 

 

 

Cash paid for interest

$

----

$

----

 

Cash paid for taxes

$

----

$

----

Non-cash transactions

 

 

 

 

 

Original discount recorded on the recognition of notes with derivative liability

$

205,000

$

----

 

Net cash used in operating activities for the nine months ended September 30, 2023 and 2022 were ($195,024) and ($430,284), respectively. The primary difference was due to the derivatives associated with convertible notes payable.

 

Net cash used in investing activities for the nine months ended September 30, 2023, and September 30, 2022, were $0 and $299,766, respectively.

 

Net cash provided by financing activities for the nine months ended September 30, 2023, and September 30, 2022, were $209,845 and $127,347, respectively.

 

We anticipate that our future liquidity requirements will arise from the need to fund our growth from operations, pay current obligations and future capital expenditures. The primary sources of funding for such requirements are expected to be cash generated from operations and raising additional funds from the private sources and/or debt financing.  However, we can provide no assurances that we will be able to generate sufficient cash flow from operations and/or obtain additional financing on terms satisfactory to us, if at all, to remain a going concern. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis and ultimately to attain profitability. Our Plan of Operation for the next twelve months is to raise capital to implement our strategy. We do not have the necessary cash and revenue to satisfy our cash requirements for the next twelve months. We cannot guarantee that additional funding will be available on favorable terms, if at all. If adequate funds are not available, then we may not be able to expand our operations.  If adequate funds are not available, we believe that our


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officers and directors will contribute funds to pay for some of our expenses. However, we have not made any arrangements or agreements with our officers and directors regarding such advancement of funds. We do not know whether we will issue stock for the loans or whether we will merely prepare and sign promissory notes. If we are forced to seek funds from our officers or directors, we will negotiate the specific terms and conditions of such loan when made, if ever. Although we are not presently engaged in any capital raising activities, we anticipate that we may engage in one or more private offering of our company’s securities. We would most likely rely upon the transaction exemptions from registration provided by Regulation A, or conduct another private offering under Section 4(2) of the Securities Act of 1933.  See “Note 2 - Going Concern” in our financial statements for additional information as to the possibility that we may not be able to continue as a “going concern.”

 

We are not aware of any trends or known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in material increases or decreases in liquidity.

 

Capital Resources

 

We had no material commitments for capital expenditures as of September 30, 2023.

 

Off Balance Sheet Arrangements

 

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

 

Critical Accounting Policies & Use of Estimates

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. In consultation with the Company’s Board of Directors, management has identified in the accompanying financial statements the accounting policies that it believes are key to an understanding of its financial statements. These are important accounting policies that require management’s most difficult, subjective judgments.  See “Note 2 - Summary of Significant Accounting Policies” in our financial statements for additional information.

 

Year Ended December 31, 2022, compared to Year Ended December 31, 2021

 

Total revenues for the years ended December 31, 2022 and 2021 were $0 and $127,725, respectively.  Revenues decreased by approximately 100% due to the Company change in operations.

 

Total operating expenses for the years ended December 31, 2022 and December 31, 2021 were $569,496 and $908,212, respectively.  Total operating expenses consisted of professional fees of $4,664 and $195,032, respectively, selling, general and administrative expenses of $496,347 and $557,556, respectively; rent expense of $28,292 and $34,500, respectively and depreciation and amortization of $40,193 and $121,124.

 

Professional fees decreased by approximately 98% due to the process and the reduced cost associated with reporting on the OTC Markets.

 

General and administrative expenses decreased by approximately 11% due to the Company implementing cost savings in its general operations.

 

Rent expense decreased by approximately 18% due to the Company negotiating more favorable terms.

 

Depreciation and amortization expenses decreased by approximately 67% due to the Company fully depreciating and disposing of certain assets during the year ending December 31, 2021.

 

Other income (expense) for the years ended December 31, 2022 and 2021 was $550,002 and $336,068, respectively. The change in other income (expense) can be attributed to the Company’s increase in interest expense and the ratable changes in derivative liabilities. Other income (expense) consisted of interest expense of ($173,575) and ($189,271), respectively; interest expense related to derivatives of ($385,799) and ($969,028), respectively; loss on disposal of


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assets of $0 and ($14,063), respectively; realized gain on sale of crypto of $3,936 and $130,777, respectively; gain on extinguishment of debt of $76,547 and $911,660, respectively; loss on disposal of intangible asset of ($70,000) and $0, respectively and change in derivatives of $1,098,893 and $465,993, respectively.

 

Net loss from operations for the year ended December 31, 2022 was $19,494 compared to $444,419 for the year ended December 31, 2021, a change of $424,925 or approximately 96%. The decrease in the net loss can primarily be attributed to the Company’s ratable changes in derivatives.

 

Liquidity and Capital Resources

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business.

 

As of December 31, 2022, the Company had $26,842 in cash and cash equivalents. The Company did not generate revenues for the year ended December 31, 2022 and has relied primarily upon capital generated from public and private offerings of its securities.

 

The Company sustained a loss of $19,494 for the year ended December 31, 2022 and $444,419 for the year ended December 31, 2021. The Company has accumulated losses totaling $6,331,829 at December 31, 2022.  Because of the absence of positive cash flows from operations, the Company will require additional funding for continuing the development and marketing of products. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

We are presently able to meet our obligations as they come due through our borrowing and the support of our shareholders. At December 31, 2022, we had a working capital deficit of $4,155,861.  Our working capital deficit is due to the results of operations.

 

Cash flows

 

The following table sets forth the primary sources and uses of cash and cash equivalents for the years ended December 31, 2022 and 2021 as presented below:

 

SANTO MINING CORP.

d/b/a SANTO BLOCKCHAIN LABS CORP.

Consolidated Statements of Cash Flows

 

 

 

 

For the Years Ended

 

 

 

December 31,

 

 

 

2022

 

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

Net income (loss)

$

(19,494)

$

(444,419)

 

Adjustment to reconcile net loss to net cash provided in operations:

 

 

 

 

 

Change in fair market value of derivatives

 

(1,098,893)

 

(465,993)

 

Amortization of debt discount

 

385,799

 

969,028

 

Depreciation and amortization

 

40,193

 

32,923

 

Gain on extinguishment of debt

 

(76,547)

 

(911,660)

 

Digital asset impairment losses

 

70,000

 

88,201

 

Stock issued for services

 

----

 

350,000

 

Change in assets and liabilities:

 

 

 

 

 

Accounts payable and accrued expenses

 

75,002

 

----

 

Accrued compensation

 

90,281

 

(585,236)

 

Accrued interest

 

118,908

 

(160,404)

 

Deposits

 

----

 

4,200

 

Net Cash (used in) provided by operating activities

 

(414,751)

 

(1,123,360)


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SANTO MINING CORP.

d/b/a SANTO BLOCKCHAIN LABS CORP.

Consolidated Statements of Cash Flows

(continued)

 

 

 

 

For the Years Ended

 

 

 

December 31,

 

 

 

2022

 

2021

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

Sale (purchase) of digital assets

 

242,576

 

(330,777)

 

Property, plant and equipment, net

 

(46,163)

 

(119,342)

 

Net Cash Used in investing activates

 

196,413

 

(450,119)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

Proceeds (payments) notes payable, related party

 

(21,687)

 

64,600

 

Proceeds (payments) convertible notes payable

 

283,299

 

696,370

 

Stock issued to reduce debt

 

(66,496)

 

293,503

 

Paid-in capital adjusted for derivative liability

 

39,914

 

528,801

 

Net Cash provided by financing activates

 

235,030

 

1,583,274

Net change in cash and cash equivalents

 

16,692

 

9,795

 

Cash and cash equivalents Beginning of period

 

10,150

 

355

 

Cash and cash equivalents End of period

$

26,842

$

10,150

 

Net cash used in operating activities for the years ended December 31, 2022 and 2021 were ($414,751) and ($1,123,360), respectively. The primary difference was due to the derivatives associated with convertible notes payable.

 

Net cash used in investing activities for the years ended December 31, 2022, and December 31, 2021, were $196,413 and ($450,119), respectively.

 

Net cash provided by financing activities for the years ended December 31, 2022, and December 31, 2021, were $235,030 and $1,583,274, respectively.

 

We anticipate that our future liquidity requirements will arise from the need to fund our growth from operations, pay current obligations and future capital expenditures. The primary sources of funding for such requirements are expected to be cash generated from operations and raising additional funds from the private sources and/or debt financing.  However, we can provide no assurances that we will be able to generate sufficient cash flow from operations and/or obtain additional financing on terms satisfactory to us, if at all, to remain a going concern. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis and ultimately to attain profitability. Our Plan of Operation for the next twelve months is to raise capital to implement our strategy. We do not have the necessary cash and revenue to satisfy our cash requirements for the next twelve months. We cannot guarantee that additional funding will be available on favorable terms, if at all. If adequate funds are not available, then we may not be able to expand our operations.  If adequate funds are not available, we believe that our officers and directors will contribute funds to pay for some of our expenses. However, we have not made any arrangements or agreements with our officers and directors regarding such advancement of funds. We do not know whether we will issue stock for the loans or whether we will merely prepare and sign promissory notes. If we are forced to seek funds from our officers or directors, we will negotiate the specific terms and conditions of such loan when made, if ever. Although we are not presently engaged in any capital raising activities, we anticipate that we may engage in one or more private offering of our company’s securities. We would most likely rely upon the transaction exemptions from registration provided by Regulation A, or conduct another private offering under Section 4(2) of the Securities Act of 1933.  See “Note 2 - Going Concern” in our financial statements for additional information as to the possibility that we may not be able to continue as a “going concern.”

 

We are not aware of any trends or known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in material increases or decreases in liquidity.

 

Capital Resources

 

We had no material commitments for capital expenditures as of December 31, 2022.


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Off Balance Sheet Arrangements

 

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

 

Critical Accounting Policies & Use of Estimates

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. In consultation with the Company’s Board of Directors, management has identified in the accompanying financial statements the accounting policies that it believes are key to an understanding of its financial statements. These are important accounting policies that require management’s most difficult, subjective judgments.  See “Note 2 - Summary of Significant Accounting Policies” in our financial statements for additional information.

 

Additional Company Matters

 

The Company has not filed for bankruptcy protection.

 

We may from time to time be involved in various claims and legal proceedings of a nature we believe are normal and incidental to our business. Should such litigation ever ensue, it may have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.

 

We are not presently a party to any legal proceedings.

 

Subsequent Material Events

 

The Company evaluated subsequent events that have occurred after the balance sheet date of September 30, 2023, and up through the date of this Registration Statement. There are two types of subsequent events: (i) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, and (ii) non-recognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date. The Company has determined that there are no additional events that would require adjustment to or disclosure in the attached financial statements.

 

ITEM 3.PROPERTIES. 

 

Principal Executive Office

 

Our principal executive office is located at Cl. 7 #37-50, El Poblado Torre1 Unit 1016 Medellin 050021 Colombia. This property is leased by management and to the Company. We believe these facilities are adequate for our current needs, and that alternate facilities on similar terms would be readily available, if needed. The principal executive offices lease is due on March 31, 2024.

 

Operating Subsidiary Properties

 

NONE

 

ITEM 4.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. 

 

The following table sets forth information regarding beneficial ownership of our Stock as of the date of this filing.

 

Beneficial ownership and percentage ownership are determined in accordance with the rules of the Securities and Exchange Commission and include voting or investment power with respect to Shares of stock. This information does not necessarily indicate beneficial ownership for any other purpose.


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Unless otherwise indicated and subject to applicable community property laws, to our knowledge, each Shareholder named in the following table possesses sole voting and investment power over their Shares of Stock. Percentage of beneficial ownership before the offering is based on 18,436,585,961 Shares of Common Stock outstanding and 500,000,000 shares of Series A Preferred Stock as of the date of this filing.

 

Name & Address

Position

Number of

Shares

Share

Type

Percent

Name of

Control Person

Franjose Yglesias CEO/Secretary

Controlling Shareholder

150,000,000

Preferred A

30%

Frank Yglesias

Marc Williams

COO/Chairman

Controlling Shareholder

150,000,000

Preferred A

30%

Marc Williams

Kevin Jodrey

CCO/Board Member

Controlling Shareholder

50,000,000

Preferred A

10%

Kevin Jodrey

 

* The mailing address for these individuals/entities is: c/o Cl. 7 #37-50, El Poblado, Torre 1 Unit 1016, Medellín 050021, Colombia.

 

ITEM 5.DIRECTORS AND EXECUTIVE OFFICERS. 

 

The following table sets forth information regarding our executive officers, directors and significant employees, including their ages as of the date of this Offering Circular:

 

Name

 

Position

 

Age

 

Director or Officer Since

Frank Yglesias

 

CEO, Secretary

 

60

 

April 10, 2015

Marc Williams

 

COO/Chairman

 

55

 

Oct 1, 2023

Kevin Jodrey

 

CCO/Board Member

 

58

 

Oct 1, 2023

 

Franjose “Frank” Yglesias, CEO, Secretary.

Mr. Yglesias (60) has been the CEO and director of three publicly traded companies in the OTC Markets in America over the last 18 years. Mr. Yglesias currently lives in Medellin Colombia spending the last 5 years in Saigon, Vietnam and has lived in China for over ten years.

 

Mr. Yglesias during 2005-2014 with his Chines Wholly Foreign Owned Enterprise “WFOE” Beijing Jin Long Fei Co., has played as a mayor engineering and business consulting development services in China for the Embassy of Costa Rica, Panama, Chile, Spain, Mexico, Grenada, Bahamas and has worked closely with the United States Department of Agriculture, in various Chinese projects. He has also consulted for many years and helped various Chinese companies enter the US public offering.

 

Mr. Yglesias was formally an Electronic Engineer working for Eastman Kodak for ten years in the 1990’s. His responsibilities were the unification and the development of the telecommunications of Latin America for Kodak, which consisted of over sixteen offices in Latin America and the Caribbean. During his tenure, he earned the position of Director of Telecommunications of Latin America for Eastman Kodak.

 

Mr. Marc Williams, COO, Chairman

Serial entrepreneur with 30+ years of experience in project developments in Canada, the USA and Colombia, with 12+ years of involvement in social capital projects. Living a dream with the combining cannabis medicine production focused in rural/remote community, blockchain, transparency, business and bringing social benefits to hard-hit rural areas.

 

Engaged as one of the founding participants in the JANE DAO he is experiencing firsthand the transition to the world of problem solving supported in the block chain and the move to AI driven DAPPS.

 

Also Marc and his family has commenced a new Affordable Seniors independent community project in Nova Scotia of 400+ units. Rural seniors are becoming displaced in Canada due to lack of appropriate housing in rural areas and marginalized through rapid changing technology. The project partners with all levels of government, educational intuitions and local nonprofits with the goal of building health community while helping the seniors maintain a rural lifestyle the only life they know. Project launch January 2023.


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Kevin Jodrey, CCO, Board Member

Mr. Jodrey is one of the most well-known growers in Humboldt County and is an internationally respected cannabis expert, known for improving and forwarding the modern cannabis movement. As a world-renowned hunter of ganja genetics, Kev is fascinated by the search for rare, desirable, and marketable traits.

 

Kevin is the creator of Port Royal, owner of Wonderland Nursery, and co-founder of The Ganjier. He’s been a cannabis cultivator for decades, running these own operations and offering consulting services to the broader community. He’s spoken at universities, judged at the Emerald Cup, and consulted on cannabis related educational shows for National Geographic and A&E.

 

Featured in the New York Times, a pulitzer prize winning Washing Post article, countless other articles, books, and radio and tv shows, he is at the epicenter of the Green Rush (and graces the walls of the Oakland Museum to prove it) and is guiding the industry as it transitions to the Clean Rush - the sustainable movement of regenerating the land naturally through cannabis cultivation.

 

ITEM 6.EXECUTIVE COMPENSATION. 

 

Compensation of Directors and Executive Officers

 

Name & Position

Year

Salary

($)

Bonus

($)

Stock

Awards

($)

Option

Awards

($)

Non-Equity

Incentive Plan

Compensation

($)

All Other

Compensation ($)

Total

($)

Frank Yglesias

CEO/Director

2023

150,000

 

 

 

 

 

150,000

2022

150,000

 

 

 

 

 

150,000

2021

0

 

 

 

 

 

0

2020

0

 

 

 

 

 

0

 

Outstanding Equity Awards at the End of the Fiscal Year

 

We do not have any equity compensation plans and therefore no equity awards are outstanding as of December 31, 2022, or September 30, 2023.

 

Bonuses and Deferred Compensation

 

We do not have a deferred compensation or retirement plan. All decisions regarding compensation, including the payment of bonuses, are determined by our Board of Directors.

 

Options and Stock Appreciation Rights

 

As of December 31, 2022, and September 30, 2023, no options have been issued.

 

Payment of Post-Termination Compensation

 

We do not have change-in-control agreements with our directors or executive officers.

 

Employment Agreements

 

On October 1, 2023, the Company entered into employment contracts with each of Franjose Yglesias (CEO), Marc Williams (COO), and Kevin Jodrey (CCO). Each of the employment contracts contain an employment term of up to 10 years and contemplate an annual salary of $150,000 per year.

 

Director Agreements

 

On October 1, 2023, the Company entered into a Board of Directors Services Agreement with each of Franjose Yglesias, Marc Williams, and Kevin Jodrey. Each agreement contemplates compensation of $150,000 in stock options, payable every 90 days.


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Board of Directors

 

Our directors hold office until the next annual meeting of shareholders and until their successors have been duly elected and qualified. Our officers are elected by and serve at the discretion of the Board of Directors.

 

ITEM 7.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. 

 

None of the directors or executive officers of the Company, nor any person who owned of record or was known to own beneficially more than 10% of the Company’s outstanding shares of its Common Stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the nine months ended September 30, 2023, or the year ended December 31, 2022 or in any proposed transaction, which has materially affected or will affect the Company.

 

However, Franjose Yglesias (CEO), Marc Williams (COO, Director), and Kevin Jodrey (CCO, Director) each own, respectively, 150,000,000 shares, 150,000,000 shares, and 50,000,000 shares of our Series A Preferred Stock.

 

ITEM 8.LEGAL PROCEEDINGS. 

 

On May 14, 2021, a former officer of the Company filed a complaint against the Company in the Miami-Dade County Court for alleged breaches of contract related said individual’s employment with the Company. (See Local Case No. 2021-011579-CA-01). On July 18, 2023, the Court entered a default judgement in favor the Plaintiff, awarding $521,256 plus attorneys fees and costs.

 

ITEM 9.MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. 

 

Market Information

 

Our common stock is qualified for quotation on the OTC Markets-OTC Pink under the symbol “SANP”. The following table sets forth the range of the high and low bid prices per share of our common stock for each quarter of our fiscal year as reported in the over-the-counter markets. These quotations represent interdealer prices, without retail markup, markdown, or commission, and may not represent actual transactions. There currently is a minimal liquid trading market for our common stock. There can be no assurance that a significant active trading market in our common stock will develop, or if such a market develops, that it will be sustained.

 

 

 

2023

 

 

 

High

 

 

Low

 

First Quarter (through March 31)

 

$

0.0003

 

 

$

0.0001

 

Second Quarter (through June 30)

 

 

0.0002

 

 

 

0.0001

 

Third Quarter (through September 30)

 

 

0.0002

 

 

 

0.0001

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

 

 

High

 

 

Low

 

First Quarter (through March 31)

 

$

0.0024

 

 

$

0.0006

 

Second Quarter (through June 30)

 

 

0.0012

 

 

 

0.0004

 

Third Quarter (through September 30)

 

 

0.0009

 

 

 

0.0004

 

Fourth Quarter (through December 31)

 

 

0.0005

 

 

 

0.0002

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

 

 

High

 

 

Low

 

First Quarter (through March 31)

 

$

0.0348

 

 

$

0.0007

 

Second Quarter (through June 30)

 

 

0.0084

 

 

 

0.0021

 

Third Quarter (through September 30)

 

 

0.0040

 

 

 

0.0015

 

Fourth Quarter (through December 31)

 

 

0.0045

 

 

 

0.0006

 


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The ability of individual stockholders to trade their shares in a particular state may be subject to various rules and regulations of that state. A number of states require that an issuer’s securities be registered in their state or appropriately exempted from registration before the securities are permitted to trade in that state. At present, we have no plans to register our securities in any particular state. Further, our shares may be subject to the provisions of Section 15(g) and Rule 15g-9 of the Exchange Act, commonly referred to as the “penny stock” rule. Section 15(g) sets forth certain requirements for transactions in penny stocks and Rule 15g-9(d)(1) incorporates the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.

 

The SEC generally defines penny stock to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. Rule 3a51-1 provides that any equity security is considered to be a penny stock unless that security is: registered and traded on a national securities exchange meeting specified criteria set by the SEC; authorized for quotation on The NASDAQ Stock Market; issued by a registered investment company; excluded from the definition on the basis of price (at least $5.00 per share) or the issuer’s net tangible assets; or exempted from the definition by the SEC. Broker-dealers who sell penny stocks to persons other than established customers and accredited investors (generally persons with assets in excess of $1,000,000 or annual income exceeding $200,000 by an individual, or $300,000 together with his or her spouse), are subject to additional sales practice requirements.

 

For transactions covered by these rules, broker-dealers must make a special suitability determination for the purchase of such securities and must have received the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the first transaction of a risk disclosure document relating to the penny stock market. A broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, and current quotations for the securities. Finally, monthly statements must be sent to clients disclosing recent price information for the penny stocks held in the account and information on the limited market in penny stocks. Consequently, these rules may restrict the ability of broker-dealers to trade and/or maintain a market in our common stock and may affect the ability of stockholders to sell their shares.

 

As of November 30, 2023, out of a total of 20,000,000,000 shares of Common Stock authorized, 150,792,300 shares are issued as restricted securities and can only be sold or otherwise transferred pursuant to a registration statement under the Securities Act or pursuant to an available exemption from registration, all of which are held by non-affiliates.

 

In general, under Rule 144 as currently in effect, a person (or persons whose shares are aggregated) who has beneficially owned restricted shares of a reporting company for at least six months, including any person who may be deemed to be an “affiliate” of the company (as the term “affiliate” is defined under the Securities Act), is entitled to sell, within any three-month period, an amount of shares that does not exceed the greater of (i) the average weekly trading volume in the company’s common stock, as reported through the automated quotation system of a registered securities association, during the four calendar weeks preceding such sale or (ii) 1% of the shares then outstanding. In order for a stockholder to rely on Rule 144, adequate current public information with respect to the company must be available. A person who is not deemed to be an affiliate of the company and has not been an affiliate for the most recent three months, and who has held restricted shares for at least one year is entitled to sell such shares without regard to the various resale limitations under Rule 144. Under Rule 144, the requirements of paragraphs (c), (e), (f), and (h) of such Rule do not apply to restricted securities sold for the account of a person who is not an affiliate of an issuer at the time of the sale and has not been an affiliate during the preceding three months, provided the securities have been beneficially owned by the seller for a period of at least one year prior to their sale. For purposes of this registration statement, a controlling stockholder is considered to be a person who owns 10% or more of the company’s total outstanding shares or is otherwise an affiliate of the Company. No individual person owning shares that are considered to be not restricted owns more than 10% of the Company’s total outstanding shares.

 

Holders

 

As of September 30, 2023, we had 86 shareholders of common stock per transfer agent’s shareholder list.

 

Dividends

 

The Company has not paid any cash dividends to date and does not anticipate or contemplate paying any dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the growth of the Registrant’s business.


21


Table of Contents


Equity Compensation Plan Information

 

The Company has not yet adopted an equity compensation plan as of September 30, 2023, or subsequently through the filing of this registration statement.

 

ITEM 10.RECENT SALES OF UNREGISTERED SECURITIES. 

 

All of the securities discussed below were issued in reliance on the exemption under Section 4(a)(2) of the Securities Act. All issuances are for common stock unless stated otherwise.

 

ITEM 11.DESCRIPTION OF REGISTRANT’S SECURITIES TO BE REGISTERED. 

 

The following is a summary of the rights of our Common Stock. This summary does not purport to be complete and is qualified in its entirety by the provisions of our articles of incorporation, bylaws, and the Certificates of Designation (as defined below) of our preferred stock, copies of which are filed as exhibits to the registration statement, and to the applicable provisions of Wyoming law. The Company is authorized by its Certificate of Incorporation to issue an aggregate of 20,000,000,000 shares of common stock, $0.00001 par value per share (the “Common Stock”), and 500,000,000 shares of Series A Preferred Stock. As of November 30, 2023, the Company had 18,436,585,961 shares of Common Stock issued and outstanding.

 

Common Stock

 

Dividend Rights

 

Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of our Common Stock may receive dividends out of funds legally available if our Board, at its discretion, determines to issue dividends and then only at the times and in the amounts that our Board may determine. We have not paid any dividends on our Common Stock and do not contemplate doing so in the foreseeable future.

 

Voting Rights

 

Each stockholder is entitled to one vote for each share of common stock held by such stockholders.

 

Preferred Stock in General

 

The preferred stock of the Company may be issued from time to time by the Board of Directors in one or more series. The description of shares of each series of preferred stock will be set forth in resolutions adopted by the Board of Directors and a Certificate of Designation to be filed as required by Wyoming law prior to issuance of any shares of the series. The Certificate of Designation will set the number of shares to be included in each series of preferred stock and set the designations, preferences, conversion, or other rights, voting powers, restrictions, limitations as to distribution, qualifications, or terms and conditions of redemption relating to the shares of each series. However, the Board of Directors is not authorized to change the right of the common stock to vote one vote per share on all matters submitted for shareholder action. The authority of the Board of Directors with respect to each series of preferred stock includes, but is not limited to, setting, or changing the following:

 

·The number of shares constituting such series and the distinctive designation of such series; 

·The dividend rate on the shares of such series, whether dividends shall be cumulative, and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of such series; 

·Whether such series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights; 

·Whether such series shall have conversion privileges, and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the Board of Directors shall determine; 

·Whether or not the shares of such series shall be redeemable, and, if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates; 


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·Whether such series shall have a sinking fund for the redemption or purchase of shares of such series, and, if so, the terms and amount of such sinking fund; 

·The rights of the shares of such series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of such series; 

·Any other relative rights, preferences, and limitations of such series. 

 

The Company is authorized to issue up to 500,000,000 shares of Class A preferred stock, par value $0.01. As of the date of this filing, there are 500,000,000 shares of Class A preferred stock issued and outstanding. The rights and preferences of the Series A Preferred Stock are described below.

 

Class A Preferred Stock:

·Each share of Class A Preferred Stock has voting rights equal to 100 votes on all matters requiring a shareholder vote. 

·Each share of Class A Preferred Stock is convertible into 100 shares of Common Stock. 

·Holders are not entitled to receive dividends. 

 

Transfer Agent and Registrar

 

The transfer agent and registrar for our Common Stock is Pacific Stock Transfer Co. (a Securitize Company) with an address at 6725 Via Austi Parkway Suite 300 Las Vegas, NV 89119. Their phone number is (702) 361-3033.

 

ITEM 12.INDEMNIFICATION OF DIRECTORS AND OFFICERS. 

 

Our articles provide to the fullest extent permitted by Wyoming Law that our directors or officers shall not be personally liable to the Company or our stockholders for damages for breach of such directors’ or officers’ fiduciary duty. The effect of this provision of our articles is to eliminate our rights and the rights of our stockholders (through stockholders’ derivative suits on behalf of the Company) to recover damages against a director or officer for breach of the fiduciary duty of care as a director or officer (including breaches resulting from negligent or grossly negligent behavior), except under certain situations defined by statute. We believe that the indemnification provisions in our articles are necessary to attract and retain qualified persons as directors and officers.

 

Wyoming corporate law provides that a corporation may indemnify a director, officer, employee or agent made a party to an action by reason of that fact that he was a director, officer employee or agent of the corporation or was serving at the request of the corporation against expenses actually and reasonably incurred by him in connection with such action if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation and with respect to any criminal action, had no reasonable cause to believe his conduct was unlawful.

 

ITEM 13.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. 

 

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 

Consolidated Financial Statements (unaudited) for the Nine Months Ended September 30, 2023

 

Page

Consolidated Balance Sheets as of September 30, 2023

 

F-1

Consolidated Statements of Operations as of September 30, 2023 and 2022

 

F-2

Consolidated Statements of Changes in ShareholdersEquity as of September 30, 2023 and 2022

 

F-3

Consolidated Statements of Cash Flows as of September 30, 2023 and 2022

 

F-4

Notes to the Consolidated Financial Statements

 

F-5

 

 

 

Consolidated Financial Statements (audited) for the 12-Months Ended December 31, 2022 and 2021

 

Page

Report of Independent Registered Public Accounting Firm

 

F-16

Balance Sheets as of December 31, 2022 and 2021

 

F-17

Statements of Operations as of December 31, 2022 and 2021

 

F-18

Statements of Changes in ShareholdersEquity as of December 31, 2022 and 2021

 

F-19

Statements of Cash Flows as of December 31, 2022 and 2021

 

F-20

Notes to the Consolidated Financial Statements

 

F-21


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Table of Contents


SANTO MINING CORP.

d/b/a SANTO BLOCKCHAIN LABS CORP.

Consolidated Condensed Balance Sheets

 

 

 

 

 

 

 

 

 

 

September 30,

2023

 

December 31,

2022

 

 

 

(Unaudited)

 

(Audited)

ASSETS

 

 

 

 

Current Assets

 

 

 

 

 

Cash and cash equivalents

$

44,004

$

26,842

Total Current Assets

 

44,004

 

26,842

 

 

 

 

 

Digital assets, net

 

-

 

 

Property, plant and equipment, net

 

103,791

 

138,243

 

Intangible assets, net

 

190,000

 

190,000

 

TOTAL ASSETS

$

337,795

$

355,085

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

Current Liabilities

 

 

 

 

 

Accounts payable and accrued expenses

 

115,444

 

115,445

 

Accrued compensation

 

480,800

 

388,445

 

Accrued interest

 

421,940

 

273,957

 

Convertible note payable, net of discount of ($80,777) and ($102,673)

 

1,685,773

 

1,458,877

 

Note payable, related party

 

63,731

 

63,886

 

Derivative liability

 

2,426,686

 

1,882,093

Total Current Liabilities

 

5,199,374

 

4,182,703

 

TOTAL LIABILITIES

 

5,199,374

 

4,182,703

Stockholders’ Deficit

 

 

 

 

Preferred stock Series A: 500,000,000 shares authorized; $0.001 par value.

500,000,000 and 500,000,000 shares issued and outstanding, respectively

 

500,000

 

500,000

Common stock: 20,000,000,000 authorized; $0.00001 par value

11,762,403,124 and 11,762,403,124 shares issued and outstanding, respectively

 

117,624

 

117,624

Additional paid-in capital

 

1,815,710

 

1,886,587

Accumulated deficit

 

(7,297,254)

 

(6,331,829)

Accumulated other comprehensive income

 

2,341

 

----

Total Stockholders’ Deficit

 

(4,861,579)

 

(3,827,618)

 

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

$

337,795

$

355,085

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated audited financial statements.


F-1


Table of Contents


SANTO MINING CORP.

d/b/a SANTO BLOCKCHAIN LABS CORP.

Consolidated Condensed Statements of Operations

 

 

 

 

 

 

 

 

For the Three Months Ended

September 30,

 

For the Nine Months Ended

September 30,

 

 

2023

 

2022

 

2023

 

2022

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

Revenues

$

---

$

---

$

---

$

---

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

Professional fees

 

5,140

 

---

 

8,352

 

3,739

 

Selling, general and administrative expense

 

58,001

 

62,326

 

217,588

 

411,878

 

Rent expense

 

44,005

 

8,024

 

61,512

 

20,219

 

Depreciation and amortization

 

11,484

 

---

 

34,452

 

---

 

Total operating expenses

 

118,630

 

70,350

 

312,904

 

435,836

 

 

 

 

 

 

 

 

 

 

Net loss from operations

 

(118,630)

 

(70,350)

 

(321,904)

 

(435,836)

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

Interest income

 

47

 

---

 

73

 

---

 

Interest expense

 

(52,022)

 

(44,291)

 

(147,982)

 

(128,012)

 

Interest expense related to derivative liability

 

(71,585)

 

---

 

(226,896)

 

(281,194)

 

Loss on disposal of assets

 

---

 

---

 

---

 

(70,000)

 

Gain on extinguishment of debt

 

---

 

---

 

---

 

76,547

 

Change in derivative

 

(134,989)

 

---

 

(268,716)

 

1,047,369

 

Income taxes

 

---

 

---

 

---

 

---

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

(377,179)

$

(114,641)

$

(965,425)

$

208,874

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

424

 

---

 

2,341

 

---

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

(376,755)

$

(114,641)

$

(963,084)

$

208,874

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per share

$

(0.00)

$

(0.00)

$

(0.00)

$

0.00

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding

 

11,762,403,124

 

11,145,028,209

 

11,762,403,124

 

11,090,212,807

 

The accompanying notes are an integral part of these consolidated audited financial statements.


F-2


Table of Contents


ANTO MINING CORP.

d/b/a SANTO BLOCKCHAIN LABS CORP.

Consolidated Condensed Statement of Stockholders’ Deficit

For the Period Ended September 30, 2023

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock

Common Stock

 

Additional

Paid in

 

Accumulated

 

Other

Comprehensive

 

 

 

 

Shares

 

Amount

Shares

 

Amount

 

Capital

 

Deficit

 

Income

 

Total

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2021

500,000,000

$

500,000

11,042,530,916

$

110,425

$

2,036,829

$

(6,312,335)

$

---

$

(3,665,081)

 

Paid-in capital derivative liability

---

 

---

---

 

---

 

(98,361)

 

---

 

---

 

(98,361)

 

Net income for the three months

 ended March 31, 2022

 

 

 

 

 

 

 

 

 

657,589

 

---

 

657,589

Balance, March 31, 2022

500,000,000

$

500,000

11,042,530,916

$

110,425

$

1,938,468

$

(5,654,746)

$

---

$

(3,105,853)

 

Shares issued for debt conversion

---

 

---

102,497,293

 

1,025

 

6,662

 

---

 

---

 

7,687

 

Paid-in capital derivative liability

---

 

---

---

 

---

 

(49,181)

 

---

 

---

 

(49,181)

 

Net loss for the three months

 ended June 30, 2022

 

 

 

 

 

 

 

 

 

(334,074)

 

---

 

(334,074)

Balance, June 30, 2022

500,000,000

$

500,000

11,145,028,209

$

111,450

$

1,895,949

$

(5,988,820)

$

---

$

(3,481,421)

 

Net loss for the three months

 ended September 30, 2022

 

 

 

 

 

 

 

 

 

(114,641)

 

---

 

(114,641)

Balance, September 30, 2022

500,000,000

$

500,000

11,145,028,209

$

111,450

$

1,895,949

$

(6,103,461)

$

---

$

(3,596,062)

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2022

500,000,000

$

500,000

11,762,403,124

$

117,624

$

1,886,587

$

(6,331,829)

$

---

$

(3,827,618)

 

Paid-in capital derivative liability

---

 

---

---

 

---

 

(13,286)

 

---

 

---

 

(13,286)

 

Net loss for the three months

 ended March 31, 2023

 

 

 

 

 

 

 

 

 

(275,739)

 

734

 

(275,005)

Balance, March 31, 2023

500,000,000

$

500,000

11,762,403,124

$

117,624

$

1,873,301

$

(6,607,568)

$

734

$

(4,115,909)

 

Paid-in capital derivative liability

---

 

---

---

 

---

 

(26,800)

 

---

 

---

 

(26,800)

 

Net loss for the three months

 ended June 30, 2023

 

 

 

 

 

 

 

 

 

(312,507)

 

---

 

(312,507)

 

Foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

1,183

 

1.183

Balance, June 30, 2023

500,000,000

$

500,000

11,762,403,124

$

117,624

$

1,846,501

$

(6,920,075)

$

1,917

$

(4,454,033)

 

Paid-in capital derivative liability

---

 

---

---

 

---

 

(30,791)

 

---

 

---

 

(30,791)

 

Net loss for the three months

 ended September 30, 2023

 

 

 

 

 

 

 

 

 

(377,179)

 

---

 

(377,179)

 

Foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

424

 

424

Balance, September 30, 2023

500,000,000

$

500,000

11,762,403,124

$

117,624

$

1,815,710

$

(7,297,254)

$

2,341

$

(4,861,579)

 

The accompanying notes are an integral part of these consolidated audited financial statements.


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SANTO MINING CORP.

d/b/a SANTO BLOCKCHAIN LABS CORP.

Consolidated Condensed Statements of Cash Flows

(Unaudited)

 

 

 

 

 

 

 

 

For the Nine Months

Ended

September 30,

 

 

 

2023

 

2022

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

Net income (loss)

$

(965,425)

$

208,874

 

Adjustment to reconcile net loss to net cash provided in operations:

 

 

 

 

 

Inventory

 

----

 

(49,422)

 

Change in fair market value of derivatives

 

268,716

 

(1,047,369)

 

Amortization of debt discount

 

226,896

 

302,241

 

Depreciation and amortization

 

34,452

 

----

 

Gain on extinguishment of debt

 

----

 

(76,547)

 

Change in assets and liabilities:

 

 

 

 

 

Accounts payable and accrued expenses

 

----

 

75,000

 

Accrued compensation

 

92,355

 

57,661

 

Accrued interest

 

147,982

 

99,278

 

Net Cash (used in) provided by operating activities

 

(195,024)

 

(430,284)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

Loss on extinguishment of intangible asset

 

----

 

70,000

 

Sale (purchase) of digital assets

 

----

 

229,766

 

Net Cash Used in investing activates

 

----

 

299,766

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

Proceeds (payments) notes payable, related party

 

4,845

 

(30,340)

 

Proceeds (payments) convertible notes payable

 

205,000

 

150,000

 

Stock issued to reduce debt

 

----

 

7,687

 

Net Cash provided by financing activates

 

209,845

 

127,347

 

 

 

 

 

 

Foreign currency translation

 

2,341

 

----

 

 

 

 

 

 

Net change in cash and cash equivalents

 

17,162

 

(3,171)

 

Cash and cash equivalents Beginning of period

 

26,842

 

10,150

 

Cash and cash equivalents End of period

$

44,004

$

6,979

Supplemental cash flow information

 

 

 

 

 

Cash paid for interest

$

----

$

----

 

Cash paid for taxes

$

----

$

----

Non-cash transactions

 

 

 

 

 

Original discount recorded on the recognition of notes with derivative liability

$

205,000

$

----

 

 

 

The accompanying notes are an integral part of these consolidated audited financial statements.


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SANTO MINING CORP.

d/b/a SANTO BLOCKCHAIN LABS CORP.

Notes to the Consolidated Financial Statements

 

NOTE 1- NATURE OF OPERATIONS

 

Corporate History

The Company was incorporated in the State of Nevada on July 8, 2009 as Santa Pita Corp to operate an internet portal for dentists and patients to access dental information, as well as a teeth-whitening business.

 

On July 30, 2012 the Company redirected its focus toward precious metal exploration and mining. Mineral exploration began with a mineral claim acquisition agreement (the “Acquisition Agreement”), with GEXPLO, SRL (the “Vendor”) and the Company, whereby the Company agreed to acquire from the Vendor a one hundred percent (100%) interest in a claim (“the Claim”) located in the Dominican Republic. The owner of the Vendor, Alain French, became President, Chief Executive Officer, Secretary, Treasurer and Director on the acquisition closing date. The Company was renamed Santo Mining Corp.

 

The Company also has three subsidiaries: (1) Cathay International LLC, a Florida corporation specializing in administration, logistics, and an Asian to USA interoperability; (2) Santo Blockchain Labs Corp. a Wyoming corporation leveraging the blockchain and crypto-asset states laws of the State of Wyoming; and (3) Santo Blockchain Labs of Colombia S.A.S., El Poblado, Medellin, Antioquia, Republic of Colombia.

 

Nature of Business

Santo Blockchain Labs is a leading “BaaS” Blockchain as a service software development company delivering tailor-made digital solutions to businesses worldwide. Our team of full-stack developers, designers and innovators based in Medellin Colombia, has designed, and developed multiple digital solutions. As a close-knit team of blockchain full-stack developers, we undertake collaborative research and development to create next-gen applications and solutions perfectly suited to the evolving blockchain space.

 

As a technology pioneer with deep knowledge and expertise in blockchain and related technologies, Santo Blockchain Labs, believes in helping companies overcome their most complex tech challenges and drive business growth.

 

Our motto, “blockchain for everyday life” reflects our business philosophy.

 

Our Products

Blockchain as a service involves the third-party installation and maintenance of blockchain networks for a company’s technologies. Given that any company can tap into blockchain networks, BaaS companies essentially serve as blockchain services companies or blockchain infrastructure providers.

 

Based on the software-as-a-service model, BaaS software helps businesses develop and host blockchain apps and smart contracts in cloud-based blockchain ecosystems. In other words, BaaS makes blockchain capabilities more accessible and usable in a business.

 

For many companies, pairing cloud services with blockchain as a service could be enormously valuable. The personalized flexibility of BaaS technology allows businesses to combat pain points by tailoring integrations. Whether it’s acting as a smart contracts platform for a real estate company or a payment processing service for a retailer, blockchain as a service is making waves across a variety of industries.

 

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

GOING CONCERN

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has not yet established an ongoing source of revenue sufficient to cover its operating cost and allow it to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to obtain adequate capital, it could be forced to cease operations.


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In order to continue as a going concern, the Company will need, among other things, additional capital resources.  Management’s plan to obtain such resources for the Company includes obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses.  However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

 

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company.  In addition, profitability will ultimately depend upon the level of revenues received from business operations.  However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and its subsidiary. All intercompany accounts and transactions have been eliminated.

 

BASIS OF PRESENTATION AND USE OF ESTIMATES

The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which require 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 reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

RECLASSIFICATION OF PRIOR PERIOD PRESENTATION

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

 

FISCAL YEAR END

The Company elected December 31, as its fiscal year ending date.

 

USE OF ESTIMATES

The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which require 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 reported amounts of revenues and expenses during the reporting year. Actual results could differ from those estimates.

 

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with an original maturity of Nine months or less at the date of acquisition to be cash equivalents.  Cash and cash equivalents at September 30, 2023 and December 31, 2022 were $44,004 and $26,842, respectively.

 

CASH FLOWS REPORTING

The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.

 

FOREIGN CURRENCY TRANSLATION

The functional currency of our wholly owned subsidiaries is the currency of the primary economic environment in which the Company operates. Assets and liabilities denominated in currencies other than the functional currency are remeasured using the current exchange rate for monetary accounts and historical exchange rates for nonmonetary accounts, with exchange differences on remeasurement included in comprehensive income in our condensed


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consolidated statements of operations and comprehensive income. Our foreign subsidiaries that utilize foreign currency as their functional currency translate such currency into U.S. dollars using (i) the exchange rate on the balance sheet dates for assets and liabilities, (ii) the average exchange rates prevailing during the period for revenues and expenses, and (iii) historical exchange rates for equity. Any translation adjustments resulting from this process are shown separately as a component of accumulated other comprehensive loss within shareholders’ deficit in the condensed consolidated balance sheets.

 

RELATED PARTIES

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.

 

REVENUE RECOGNITION

In May 2014, the Financial Accounting Standards Board (FASB) issued Topic 606, which supersedes the prior revenue recognition standard (Topic 605). Under Topic 606, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to be entitled to in exchange for those goods or services. In addition, this standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Topic 606 also includes Subtopic 340-40, Other Assets and Deferred Costs—Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer. The Company adopted Topic 606 effective January 1, 2019.

 

The Company derives its revenues primarily from two sources: (i) point of sale transactions of crypto assets at ATMs and (ii) customized investor trading services for the sale or purchase of crypto assets. Revenues are recognized at the point of sale of these services to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company determines revenue recognition through the following steps:

 

·Identification of the contract, or contracts, with a customer 

·Identification of the performance obligations in the contract 

·Determination of the transaction price 

·Allocation of the transaction price to the performance obligations in the contract 

·Recognition of revenue when, or as, we satisfy a performance obligation. 

 

Judgment is required in determining whether the Company is the principal or the agent in transactions between customers. The Company evaluates the presentation of revenue on a gross or net basis based on whether it controls the crypto asset provided before it is transferred to the customer (gross) or whether it acts as an agent by arranging for other customers on the platform to provide the crypto asset to the customer (net). As the Company controls the crypto asset being provided before it is transferred to the customer and establishes the price for the crypto assets, whether selling through ATMs or over the telephone, the Company is the principal in these transactions; the Company records these transactions on a gross basis.

 

The Company recognizes revenue when performance obligations identified under the terms of contracts with its customers are satisfied. The Company considers its performance obligation satisfied, and recognizes revenue, at the point in time the transaction is processed. Contracts with customers are usually open-ended and can be terminated by either party without a termination penalty. Therefore, contracts are defined at the transaction level and do not extend beyond the service already provided. The Company’s revenue associated with ATM and over the counter services are recognized at a point in time when the crypto asset is delivered to the customer. The Company controls the service as it is primarily responsible for fulfilling the service and has discretion in establishing pricing with its customers.

 

COST OF REVENUES

Cost of revenues consists primarily of expenses related to the acquisition of crypto assets (including the costs to purchase crypto assets). The Company assigns the costs of crypto assets sold in its revenue transactions on a first-in, first-out basis.

 

Additionally, cost of revenues includes the costs of operating the ATMs from which some of the crypto assets are sold (including the associated rent expense, related incentives, ATM cash losses, software licensing fees for the ATMs, depreciation, insurance, and utilities) and fees paid to service the ATM machines and transport cash to the banks.


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CONCENTRATIONS OF CREDIT RISK AND SIGNIFICANT CUSTOMERS

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, accounts receivable and restricted cash. The Company limits its exposure to credit loss by placing its cash and cash equivalents with high credit-quality financial institutions in bank deposits, money market funds, U.S. government securities and other investment grade debt securities that have strong credit ratings. The Company has established guidelines relative to diversification of its cash and marketable securities and their maturities that are intended to secure safety and liquidity. These guidelines are periodically reviewed and modified to take advantage of trends in yields and interest rates and changes in the Company’s operations and financial position. Although the Company may deposit its cash and cash equivalents with multiple financial institutions, its deposits, at times, may exceed federally insured limits.

 

The Company’s revenues are generated primarily from franchising and operating Crypto ATM services to customers located Latin America and the Caribbean. No single customer of the ATM network is responsible for over 1% of revenue. Also, as the Company collects all amounts from these customers and holds $0 in accounts receivable from its ATM or over the counter customers, there is no credit risk associated with customer concentration for these customers.

 

FINANCIAL INSTRUMENTS

The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

 

ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

·Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities 

·Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. 

·Level 3 - Inputs that are both significant to the fair value measurement and unobservable. 

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2023. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

 

PROPERTY, PLANT AND EQUIPMENT

Furniture and equipment are stated at cost.  Depreciation is computed by the straight-line method over estimated useful lives.  Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment at least Annual or whenever facts and circumstances indicate that the carrying value may not be recoverable.  When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset.  The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required.  If the carrying amount of the long-lived asset is not recoverable, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset.  The Company recognized depreciation expense of $34,452 and $0 for the nine months ending September 30, 2023 and September 30, 2022, respectively.


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INTANGIBLE ASSETS

The Company has applied the provisions of ASC topic 350 - Intangible - goodwill and other, in accounting for its intangible assets.  Intangible assets are being amortized on a straight-line method on the basis of a useful life of 5 to 17 years.  The balance at September 30, 2023 and December 31, 2022 was $190,000 and $190,000, respectively.

 

 

 

September 30, 2023

 

December 31, 2022

Intellectual property

$

260,000

$

260,000

Less: Accumulated amortization and impairment

 

70,000

 

70,000

Totals

$

190,000

$

190,000

 

IMPAIRMENT OF LONG- LIVED ASSETS

The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable.  The assets are subject to impairment consideration under FASB ASC 360-10-35-17 if events or circumstances indicate that their carrying amount might not be recoverable.  When the Company determines that an impairment analysis should be done, the analysis will be performed using the rules of FASB ASC 930-360-35, Asset Impairment, and 360-0 through 15-5, Impairment or Disposal of Long- Lived Assets.

 

DERIVATIVE LIABILITIES

Derivative liabilities include the fair value of instruments such as common stock warrants, preferred stock warrants and convertible features of notes, that are initially recorded at fair value and are required to be re-measured to fair value at each reporting period under provisions of ASC 480, Distinguishing Liabilities from Equity, or ASC 815, Derivatives and Hedging. The change in fair value of the instruments is recognized as a component of other income (expense) in the Company’s statements of operations until the instruments settle, expire or are no longer classified as derivative liabilities. The Company estimates the fair value of these instruments using the Black-Scholes pricing model. The significant assumptions used in estimating the fair value include the exercise price, volatility of the stock underlying the instrument, risk-free interest rate, estimated fair value of the stock underlying the instrument and the estimated life of the instrument.  At September 30, 2023 and December 31, 2022, the Company had $2,426,686 and $1,882,093 derivative liability, respectively.

 

INCOME TAXES

We use the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. 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 the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

 

ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented.

 

NET INCOME (LOSS) PER COMMON SHARE

Net income (loss) per share is calculated in accordance with FASB ASC 260, “Earnings Per Share.”  The weighted-average number of common shares outstanding during each year is used to compute basic earning or loss per share.  Diluted earnings or loss per share is computed using the weighted average number of shares and diluted potential common shares outstanding.  Dilutive potential common shares are additional common shares assumed to be exercised.

 

Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding at September 30, 2023 and at December 31, 2022.  At September 30, 2023 and December 31, 2022, the Company had no dilutive potential common shares.


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SHARE-BASED EXPENSE

ASC 718, Compensation - Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the consolidated financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

 

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity - Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

 

Share-based expense was $0 and $0 for the nine months ending September 30, 2023 and 2022, respectively.

 

COMMITMENTS 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. There were no known commitments or contingencies as of September 30, 2023 and December 31, 2022.

 

RECENT ACCOUNTING PRONOUNCEMENTS

The Company has reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

 

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact this new guidance will have on its financial statements.

 

NOTE 3 - DIGITAL ASSETS

 

The Company accounts for its digital assets as indefinite-lived intangible assets in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles-Goodwill and Other.  The Company’s digital assets are initially recorded at cost. Subsequently, they are measured at cost, net of any impairment losses incurred since acquisition.

 

CRYPTO ACCOUNTING

There is currently no specific definitive guidance under US GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations.

 

CRYPTO ASSETS HELD

Crypto assets are considered indefinite-lived intangible assets under applicable accounting rules and are initially measured at cost and are not amortized. Accordingly, any decrease in their fair values below our carrying values for such assets at any time subsequent to their acquisition will require us to recognize impairment charges, whereas we may make no upward revisions for any market price increases until a sale. As the Company utilizes crypto assets within its Proof-of-Stake Pools and or ATMs, the balances turnover frequently, and the Company anticipates


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converting it to cash within a year, the Company has classified crypto assets held as current assets in the condensed consolidated balance sheets. The Company assigns costs to transactions on a first-in, first-out basis.

 

CRYPTO ASSET BORROWINGS

The Company borrows crypto assets. Such crypto assets borrowed by the Company are reported in crypto assets held on the Company’s condensed consolidated balance sheets as well as liability measured at the fair value on the date of the borrowing. The borrowings are accounted for as hybrid instruments, with a liability host contract that contains an embedded derivative based on the changes in the fair value of the underlying crypto asset. The host contract is not accounted for as a debt instrument because it is not a financial liability and is carried at the fair value of the assets acquired and reported in crypto asset borrowings in the condensed consolidated balance sheets. The embedded derivative is accounted for at fair value, with changes in fair value recognized in other non-operating expenses in the condensed consolidated statements of operations and comprehensive income. The embedded derivatives are included in crypto asset borrowings in the condensed consolidated balance sheets. The term of these borrowings can either be for a fixed term of less than one year or can be open-ended and repayable at the option of the Company or the lender. These borrowings bear a fee payable by the Company to the lender, which is based on a percentage of the amount borrowed and is denominated in the related crypto asset borrowed. The borrowing fee is recognized on an accrual basis and is included in other non-operating expenses in the condensed consolidated statements of operations and comprehensive income.

 

We determine the fair value of our digital assets on a nonrecurring basis in accordance with ASC 820, Fair Value Measurement, based on quoted prices on the active exchange(s) that we have determined is the principal market for such assets (Level 1 inputs). We perform an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted prices on active exchanges, indicate that it is more likely than not that our digital assets are impaired. In determining if an impairment has occurred, we consider the lowest market price of one unit of digital asset quoted on the active exchange since acquiring the digital asset. If the then current carrying value of a digital asset exceeds the fair value so determined, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the price determined.

As of December 31, 2022, the Company sold all of it’s Bitcoin holdings.

 

NOTE 4 - PROPERTY, PLANT AND EQUIPMENT

 

The Company has capitalized costs for equipment as follows:

 

 

 

September 30, 2023

 

December 31, 2022

Property, plant and equipment

 

$

222,681

 

$

222,681

Accumulated depreciation

 

 

118,890

 

 

84,438

Property, plant and equipment, net accumulated depreciation

 

$

103,791

 

$

138,243

 

Depreciation expense for the nine months ended September 30, 2023 and 2022 was $34,452, and $0, respectively.  An accounting adjustment was made for the consolidation of property, plant and equipment.

 

NOTE 5 - INTANGIBLE PROPERTY

 

In March of 2019, the Company purchased the rights in the amount of $260,000 to and further developed the Intellectual Property below:

 

·SKULLYS® 

·DNATags® 

 

The Company recorded the property and intangibles as an intangible asset.  The valuation of the properties was booked at Fair Market Value.

 

In January of 2022 the Company determined DNATags carried no value and fully impaired the intangible asset.


F-11


Table of Contents


NOTE 6 - CONVERTIBLE NOTES PAYABLE

 

The following table represents the convertible notes payable at September 30, 2023 and December 31, 2022.

 

 

 

 

 

 

 

Date of Note

Issuance

September 30,

2023

December 31,

2022

Maturity

Date

Conversion

Terms

Name of Noteholder

2/14/17

2,800

2,800

8/14/17

See Footnote 1

Joseph Canouse

8/21/18

5,000

5,000

8/21/19

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

10/11/18

5,000

5,000

10/11/19

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

11/16/18

5,000

5,000

11/15/19

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

12/11/18

5,000

5,000

12/10/19

See Footnote 1

Carpathia, LLC, Manager Joseph Canouse

1/10/19

5,000

5,000

1/10/20

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

2/6/19

5,000

5,000

2/6/20

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

2/11/19

5,000

5,000

2/11/20

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

4/17/19

5,000

5,000

4/17/20

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

5/8/19

5,000

5,000

5/8/20

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

7/31/19

5,000

5,000

7/31/20

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

10/21/19

5,000

5,000

10/21/20

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

11/13/19

6,250

6,250

11/13/20

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

12/16/19

30,000

30,000

11/10/20

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

1/13/21

5,000

5,000

1/13/22

See Footnote 1

Carpathia, LLC, Manager Joseph Canouse

2/10/21

27,000

27,000

2/10/22

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

2/12/21

15,000

15,000

2/12/22

See Footnote 1

World Market Ventures, Chad Curtis, Manager

2/19/21

27,000

27,000

2/19/22

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

3/5/21

104,000

104,000

3/5/22

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

3/12/21

104,000

104,000

3/12/22

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

3/19/21

104,000

104,000

3/19/22

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

4/9/21

37,000

37,000

4/9/22

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

4/21/21

52,000

52,000

4/21/22

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

5/10/21

104,000

104,000

5/10/22

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

5/27/21

156,000

156,000

5/27/22

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

6/18/21

104,000

104,000

6/18/22

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

8/3/21

104,000

104,000

8/3/22

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager


F-12


Table of Contents


 

 

 

 

 

 

Date of Note

Issuance

September 30,

2023

December 31,

2022

Maturity

Date

Conversion

Terms

Name of Noteholder

10/5/21

15,000

15,000

10/5/22

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

10/20/21

100,000

100,000

10/20/22

See Footnote 1

Carpathia, LLC, Manager Joseph Canouse

12/17/21

75,000

75,000

12/17/22

See Footnote 1

Carpathia, LLC, Manager Joseph Canouse

12/30/21

50,000

50,000

12/30/22

See Footnote 1

Carpathia, LLC, Manager Joseph Canouse

3/7/22

100,000

100,000

3/7/23

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

5/13/22

50,000

50,000

5/13/23

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

10/06/22

38,500

38,500

10/06/23

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

10/27/22

16,500

16,500

10/27/23

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

12/1/22

30,000

30,000

12/1/23

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

12/22/22

49,500

49,500

12/22/23

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

2/9/23

25,000

25,000

2/9/24

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

3/10/23

20,000

20,000

3/10/24

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

4/3/23

25,000

25,000

4/3/24

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

5/8/23

20,000

20,000

5/8/24

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

6/9/23

20,000

20,000

6/9/24

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

6/28/23

15,000

15,000

6/28/24

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

7/19/23

30,000

30,000

7/19/24

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

8/23/23

25,000

25,000

8/23/24

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

9/28/23

25,000

25,000

9/28/24

See Footnote 1

JP Carey Enterprises, Inc. Joseph Canouse, Manager

Sub-totals

$     1,766,550

$          1,561,550

 

 

 

Less: Debt Discount

(80,777)

(102,673)

 

 

 

Total Convertible Notes

$    1,658,773

$      1,458,877

 

 

 

 

Footnote 1 - Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

 

 

 

 


F-13


Table of Contents


NOTE 7 - ACCRUED INTEREST

 

The Company’s accrued interest consisted of the following:

 

 

 

September 30,

2023

 

December 31,

2022

Carpathia, LLC

$

41,344

$

22,945

Joseph Canouse

 

5,093

 

4,509

JP Carey, LLC

 

362,514

 

237,553

Machiavelli LTD, LLC

 

8,255

 

5,562

World Market Ventures

 

4,734

 

3,388

Total Accrued Interest

$

421,940

$

273,957

 

NOTE 8 - EXTINGUISHMENT OF DEBT

 

During January 2022, the Company entered into a settlement agreement with Oscaleta Partners LLC for the cancellation of Seventy-Six Thousand Five Hundred Seventy-Four dollars ($76,574) in certain convertible notes payable and accrued interest.  The cancellation included $26,074 in accrued interest and the associated derivative liability of $39,911.

 

The Company evaluated the cancellation under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the cancellation resulted in significant changes to the economic substance of the debt and thus resulted in an extinguishment of the debt of $76,547 for the period ending December 31, 2022.

 

NOTE 9 - RELATED PARTY TRANSACTIONS

 

EMPLOYMENT and BOARD OF DIRECTOR AGREEMENTS

The Company has employment and board of director agreements with its key employees, the controlling shareholders, who are its officers and directors of the Company.

 

·Mr. Franjose Yglesias 

Employment Agreement: Five (5) year contract, annual salary of $150,000.

Directors Agreement: Five (5) year contract, annual salary of $150,000.

 

·Mr. Marc Williams 

Employment Agreement: Five (5) year contract, annual salary of $150,000.

Directors Agreement: Five (5) year contract, annual salary of $150,000.

 

·Mr. Kevin Jodrey 

Employment Agreement: Five (5) year contract, annual salary of $150,000.

Directors Agreement: Five (5) year contract, annual salary of $150,000.

 

Amounts included in accruals represent amounts due to the officers and directors for corporate obligations under the abovementioned agreements.  Payments on behalf of the Company and accruals made under contractual obligation are accrued.  As of September 30, 2023, and December 31, 2022 accrued expenses were $480,800 and $388,445, respectively.

 

NOTE PAYABLE

In support of the Company’s efforts and cash requirements, it has relied on advances from the Chief Executive Officer s until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support.  All advances made in support of the Company are formalized by demand notes, at a 0.00% annual interest rate.

 

For the period ended September 30, 2023 and the year ended December 31, 2022 the balance of notes payable-related party was $68,731 and $63,886, respectively.


F-14


Table of Contents


NOTE 10 - STOCKHOLDERS’ DEFICIENCY

 

At September 30, 2023 and December 31, 2022, there are 11,762,403,124 and 11,762,403,124 shares of Common stock par value $0.00001, outstanding, respectively.

 

On December 31, 2021 the Company issue Mr. Franjosé Yglesias 500,000,000 of Preferred A stock for compensation.

 

Preferred “A” Stock has Voting Right Conversion Rate 1 X 1,000.

 

At September 30, 2023 and December 31, 2022 there are 500,000,000 shares authorized of Preferred “A” Stock, par or stated value: $0.001.  Total Shares Issued & Outstanding:500,000,000, respectively.

 

As of the date of this filing, there are 500,000,000 shares authorized of Preferred “A” Stock, par or stated value $0.001, with 350,000,000 shares issued and outstanding.

 

NOTE 11 - COMMITMENTS AND CONTINGENCIES

 

From time to time the Company may be a party to litigation matters involving claims against the Company.  Management believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations.

 

NOTE 12 - SUBSEQUENT EVENTS

 

In accordance with ASC 855-10, the company has analyzed its operations subsequent to December 31, 2022, through the date these financial statements were issued (date of filing with the OTC Markets) and has determined that it does not have any material subsequent events to disclose in these financial statements other than the events discussed below.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


F-15


Table of Contents


Picture 1 

 

Report of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of

Santo Mining Corp.

 

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Santo Mining Corp (the “Company”) as of December 31, 2022, and 2021, and the related statements of operations, changes in shareholders’ equity and cash flows, for the year ended December 31, 2022, and the related notes collectively referred to as the “financial statements.

 

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and 2021, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

 

Going Concern

The accompanying financial statements have been prepared assuming the company will continue as a going concern as disclosed in Note 2 to the financial statement, the Company has continuously incurred a net loss of $(19,494) for the year ended December 31, 2022, a working capital deficit of ($4,155,861) and an accumulated deficit of $(6,331,829) at December 31, 2022. The continuation of the Company as a going concern through December 31, 2022, is dependent upon improving profitability and the continuing financial support from its stockholders. Management believes the existing shareholders or external financing will provide additional cash to meet the Company’s obligations as they become due.

 

These factors raise substantial doubt about the company ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of the uncertainty.

 

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole and we are not, by communicating the critical audit matters, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate. As of December 31, 2022, there are no critical audit matters to be communicated.

 

/s/ OLAYINKA OYEBOLA & CO.

OLAYINKA OYEBOLA & CO.

(Chartered Accountants)

We have served as the Company’s auditor since March 2022.

August 12th, 2023.

Lagos Nigeria


F-16


Table of Contents


SANTO MINING CORP.

d/b/a SANTO BLOCKCHAIN LABS CORP.

Consolidated Balance Sheets

 

 

 

 

 

 

 

 

 

 

December 31,

2022

 

December 31,

2021

ASSETS

 

 

 

 

Current Assets

 

 

 

 

 

Cash and cash equivalents

$

26,842

$

10,150

Total Current Assets

 

26,842

 

10,150

 

 

 

 

 

Digital assets, net

 

-

 

242,576

Property, plant and equipment, net

 

138,243

 

92,080

 

Intangible assets, net

 

190,000

 

260,000

 

TOTAL ASSETS

$

355,085

$

604,806

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

Current Liabilities

 

 

 

 

 

Accounts payable and accrued expenses

 

115,445

 

40,443

 

Accrued compensation

 

388,445

 

298,164

 

Accrued interest

 

273,957

 

155,049

 

Convertible note payable

 

1,458,877

 

1,175,578

 

Note payable, related party

 

63,886

 

85,573

 

Derivative liability

 

1,882,093

 

2,515,080

Total Current Liabilities

 

4,182,703

 

4,269,887

 

TOTAL LIABILITIES

 

4,182,703

 

4,269,887

Stockholders’ Deficit

 

 

 

 

Preferred stock Series A: 500,000,000 shares authorized; $0.001 par value.

500,000,000 and 500,000,000 shares issued and outstanding, respectively

 

500,000

 

500,000

Common stock: 20,000,000,000 authorized; $0.00001 par value

11,762,403,124 and 11,042,530,916 shares issued and outstanding, respectively

 

117,624

 

110,425

Additional paid-in capital

 

1,886,587

 

2,036,829

Accumulated deficit

 

(6,331,829)

 

(6,312,335)

Total Stockholders’ Deficit

 

(3,827,618)

 

(3,665,081)

 

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

$

355,085

$

604,806

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated audited financial statements.


F-17


Table of Contents


SANTO MINING CORP.

d/b/a SANTO BLOCKCHAIN LABS CORP.

Consolidated Statements of Operations

 

 

 

 

 

 

For the Years Ended

December 31,

 

 

2022

 

2021

 

 

 

 

 

Revenues

$

-

$

127,725

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

Professional fees

 

4,664

 

195,032

 

Selling, general and administrative expense

 

496,347

 

557,556

 

Rent expense

 

28,292

 

34,500

 

Depreciation and amortization

 

40,193

 

121,124

 

Total operating expenses

 

569,496

 

908,212

 

 

 

 

 

 

Net loss from operations

 

(569,496)

 

(780,487)

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

Interest expense

 

(173,575)

 

(189,271)

 

Interest expense related to derivative liability

 

(385,799)

 

(969,028)

 

Loss on deposit

 

---

 

(14,063)

 

Realized gain (loss) on sale of crypto

 

3,936

 

130,777

 

Gain on extinguishment of debt

 

76,547

 

911,660

 

Loss on disposal of intangible asset

 

(70,000)

 

-

 

Change in derivative

 

1,098,893

 

465,993

 

Income taxes

 

---

 

---

 

 

 

 

 

 

Net income (loss)

$

(19,494)

$

(444,419)

 

 

 

 

 

 

Basic and diluted loss per share

$

0.00

$

0.00

 

 

 

 

 

 

Weighted average number of shares outstanding

 

11,230,693,440

 

10,358,941,029

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated audited financial statements.


F-18


Table of Contents


SANTO MINING CORP.

d/b/a SANTO BLOCKCHAIN LABS CORP.

Consolidated Statement of Stockholders’ Deficit

For the Period Ended December 31, 2022

(Audited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock

Common Stock

 

Additional

Paid in

 

Accumulated

 

 

 

 

Shares

 

Amount

Shares

 

Amount

 

Capital

 

Deficit

 

Total

Balance, December 31, 2020

150,000,000

$

150,000

9,326,965,016

$

93,270

$

2,672,477

$

(5,909,241)

$

(2,993,495)

 

Shares issued for debt conversion

---

 

---

1,715,565,900

 

17,156

 

276,347

 

---

 

293,503

 

Paid-in Capital derivative liability

---

 

---

---

 

---

 

(911,995)

 

---

 

(911,995)

 

Issued preferred A stock for services

350,000,000

 

350,000

---

 

---

 

---

 

---

 

350,000

 

Net loss

 

 

 

 

 

 

 

 

 

(403,094)

 

(403,094)

Balance, December 31, 2021

500,000,000

$

500,000

11,042,530,916

$

110,425

$

2,036,829

$

(6,312,335)

$

(3,665,081)

 

Shares issued for debt conversion

---

 

---

719,872,208

 

7,199

 

65,664

 

---

 

72,863

 

Paid-in capital derivative liability

---

 

---

---

 

---

 

(215,906)

 

---

 

(215,906)

 

Net income

 

 

 

 

 

 

 

 

 

(19,494)

 

(19,494)

Balance, December 31, 2022

500,000,000

$

500,000

11,762,403,124

$

117,624

$

1,886,587

$

(6,331,829)

$

(3,827,618)

 

 

 

 

 

The accompanying notes are an integral part of these consolidated audited financial statements.


F-19


Table of Contents


SANTO MINING CORP.

d/b/a SANTO BLOCKCHAIN LABS CORP.

Consolidated Statements of Cash Flows

 

 

 

 

 

 

 

 

For the Years Ended

December 31,

 

 

 

2022

 

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

Net income (loss)

$

(19,494)

$

(444,419)

 

Adjustment to reconcile net loss to net cash provided in operations:

 

 

 

 

 

Change in fair market value of derivatives

 

(1,098,893)

 

(465,993)

 

Amortization of debt discount

 

385,799

 

969,028

 

Depreciation and amortization

 

40,193

 

32,923

 

Gain on extinguishment of debt

 

(76,547)

 

(911,660)

 

Digital asset impairment losses

 

70,000

 

88,201

 

Stock issued for services

 

----

 

350,000

 

Change in assets and liabilities:

 

 

 

 

 

Accounts payable and accrued expenses

 

75,002

 

----

 

Accrued compensation

 

90,281

 

(585,236)

 

Accrued interest

 

118,908

 

(160,404)

 

Deposits

 

----

 

4,200

 

Net Cash (used in) provided by operating activities

 

(414,751)

 

(1,123,360)

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

Sale (purchase) of digital assets

 

242,576

 

(330,777)

 

Property, plant and equipment, net

 

(46,163)

 

(119,342)

 

Net Cash Used in investing activates

 

196,413

 

(450,119)

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

Proceeds (payments) notes payable, related party

 

(21,687)

 

64,600

 

Proceeds (payments) convertible notes payable

 

283,299

 

696,370

 

Stock issued to reduce debt

 

(66,496)

 

293,503

 

Paid-in capital adjusted for derivative liability

 

39,914

 

528,801

 

Net Cash provided by financing activates

 

235,030

 

1,583,274

 

 

 

 

 

Net change in cash and cash equivalents

 

16,692

 

9,795

 

Cash and cash equivalents Beginning of period

 

10,150

 

355

 

Cash and cash equivalents End of period

$

26,842

$

10,150

 

 

 

 

 

Supplemental cash flow information

 

 

 

 

 

Cash paid for interest

$

----

$

----

 

Cash paid for taxes

$

----

$

----

 

 

 

 

 

The accompanying notes are an integral part of these consolidated audited financial statements.


F-20


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SANTO MINING CORP.

d/b/a SANTO BLOCKCHAIN LABS CORP.

Notes to the Consolidated Financial Statements

 

NOTE 1 - NATURE OF OPERATIONS

 

Corporate History

The Company was incorporated in the State of Nevada on July 8, 2009 as Santa Pita Corp to operate an internet portal for dentists and patients to access dental information, as well as a teeth-whitening business.

 

On July 30, 2012 the Company redirected its focus toward precious metal exploration and mining. Mineral exploration began with a mineral claim acquisition agreement (the “Acquisition Agreement”), with GEXPLO, SRL (the “Vendor”) and the Company, whereby the Company agreed to acquire from the Vendor a one hundred percent (100%) interest in a claim (“the Claim”) located in the Dominican Republic. The owner of the Vendor, Alain French, became President, Chief Executive Officer, Secretary, Treasurer and Director on the acquisition closing date. The Company was renamed Santo Mining Corp.

 

The Company also has three subsidiaries: (1) Cathay International LLC, a Florida corporation specializing in administration, logistics, and an Asian to USA interoperability; (2) Santo Blockchain Labs Corp. a Wyoming corporation leveraging the blockchain and crypto-asset states laws of the State of Wyoming; and (3) Santo Blockchain Labs of Colombia S.A.S., El Poblado, Medellin, Antioquia, Republic of Colombia.

 

Nature of Business

Santo Blockchain Labs is a leading “BaaS” Blockchain as a service software development company delivering tailor-made digital solutions to businesses worldwide. Our team of full-stack developers, designers and innovators based in Medellin Colombia, has designed, and developed multiple digital solutions. As a close-knit team of blockchain full-stack developers, we undertake collaborative research and development to create next-gen applications and solutions perfectly suited to the evolving blockchain space.

 

As a technology pioneer with deep knowledge and expertise in blockchain and related technologies, Santo Blockchain Labs, believes in helping companies overcome their most complex tech challenges and drive business growth.

 

Our motto, “blockchain for everyday life” reflects our business philosophy.

 

Our Products

Blockchain as a service involves the third-party installation and maintenance of blockchain networks for a company’s technologies. Given that any company can tap into blockchain networks, BaaS companies essentially serve as blockchain services companies or blockchain infrastructure providers.

 

Based on the software-as-a-service model, BaaS software helps businesses develop and host blockchain apps and smart contracts in cloud-based blockchain ecosystems. In other words, BaaS makes blockchain capabilities more accessible and usable in a business.

 

For many companies, pairing cloud services with blockchain as a service could be enormously valuable. The personalized flexibility of BaaS technology allows businesses to combat pain points by tailoring integrations. Whether it’s acting as a smart contracts platform for a real estate company or a payment processing service for a retailer, blockchain as a service is making waves across a variety of industries.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

GOING CONCERN

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has not yet established an ongoing source of revenue sufficient to cover its operating cost and allow it to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to obtain adequate capital, it could be forced to cease operations.


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In order to continue as a going concern, the Company will need, among other things, additional capital resources.  Management’s plan to obtain such resources for the Company includes obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses.  However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

 

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company.  In addition, profitability will ultimately depend upon the level of revenues received from business operations.  However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and its subsidiary. All intercompany accounts and transactions have been eliminated.

 

BASIS OF PRESENTATION AND USE OF ESTIMATES

The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which require 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 reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

RECLASSIFICATION OF PRIOR PERIOD PRESENTATION

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

 

FISCAL YEAR END

The Company elected December 31, as its fiscal year ending date.

 

USE OF ESTIMATES

The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which require 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 reported amounts of revenues and expenses during the reporting year. Actual results could differ from those estimates.

 

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with an original maturity of Nine months or less at the date of acquisition to be cash equivalents.  Cash and cash equivalents at December 31, 2022 and December 31, 2021 were $26,842 and $10,150, respectively.

 

CASH FLOWS REPORTING

The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.

 

FOREIGN CURRENCY TRANSLATION

The functional currency of our wholly owned subsidiaries is the currency of the primary economic environment in which the Company operates. Assets and liabilities denominated in currencies other than the functional currency are remeasured using the current exchange rate for monetary accounts and historical exchange rates for nonmonetary accounts, with exchange differences on remeasurement included in comprehensive income in our condensed


F-22


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consolidated statements of operations and comprehensive income. Our foreign subsidiaries that utilize foreign currency as their functional currency translate such currency into U.S. dollars using (i) the exchange rate on the balance sheet dates for assets and liabilities, (ii) the average exchange rates prevailing during the period for revenues and expenses, and (iii) historical exchange rates for equity. Any translation adjustments resulting from this process are shown separately as a component of accumulated other comprehensive loss within shareholders’ deficit in the condensed consolidated balance sheets.

 

RELATED PARTIES

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.

 

REVENUE RECOGNITION

In May 2014, the Financial Accounting Standards Board (FASB) issued Topic 606, which supersedes the prior revenue recognition standard (Topic 605). Under Topic 606, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to be entitled to in exchange for those goods or services. In addition, this standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Topic 606 also includes Subtopic 340-40, Other Assets and Deferred Costs-Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer. The Company adopted Topic 606 effective January 1, 2019.

 

The Company derives its revenues primarily from two sources: (i) point of sale transactions of crypto assets at ATMs and (ii) customized investor trading services for the sale or purchase of crypto assets. Revenues are recognized at the point of sale of these services to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company determines revenue recognition through the following steps:

 

·Identification of the contract, or contracts, with a customer 

·Identification of the performance obligations in the contract 

·Determination of the transaction price 

·Allocation of the transaction price to the performance obligations in the contract 

·Recognition of revenue when, or as, we satisfy a performance obligation. 

 

Judgment is required in determining whether the Company is the principal or the agent in transactions between customers. The Company evaluates the presentation of revenue on a gross or net basis based on whether it controls the crypto asset provided before it is transferred to the customer (gross) or whether it acts as an agent by arranging for other customers on the platform to provide the crypto asset to the customer (net). As the Company controls the crypto asset being provided before it is transferred to the customer and establishes the price for the crypto assets, whether selling through ATMs or over the telephone, the Company is the principal in these transactions; the Company records these transactions on a gross basis.

 

The Company recognizes revenue when performance obligations identified under the terms of contracts with its customers are satisfied. The Company considers its performance obligation satisfied, and recognizes revenue, at the point in time the transaction is processed. Contracts with customers are usually open-ended and can be terminated by either party without a termination penalty. Therefore, contracts are defined at the transaction level and do not extend beyond the service already provided. The Company’s revenue associated with ATM and over the counter services are recognized at a point in time when the crypto asset is delivered to the customer. The Company controls the service as it is primarily responsible for fulfilling the service and has discretion in establishing pricing with its customers.

 

The Company also generates revenue from operating Crypto ATM Franchises in Latin America. The Company’s service is comprised of maintaining ATMs and POS terminals to facilitate the exchange of crypto assets and cash, and vice-versa in some cases, by our franchises, customers with their counter parties. The Company does not control the service in this case as it is not responsible for fulfilling the exchange contract and does not establish pricing at these ATMs and POS terminals. This revenue is recognized on a net basis.

 

COST OF REVENUES

Cost of revenues consists primarily of expenses related to the acquisition of crypto assets (including the costs to purchase crypto assets). The Company assigns the costs of crypto assets sold in its revenue transactions on a first-in, first-out basis.


F-23


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Additionally, cost of revenues includes the costs of operating the ATMs from which some of the crypto assets are sold (including the associated rent expense, related incentives, ATM cash losses, software licensing fees for the ATMs, depreciation, insurance, and utilities) and fees paid to service the ATM machines and transport cash to the banks.

 

CONCENTRATIONS OF CREDIT RISK AND SIGNIFICANT CUSTOMERS

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, accounts receivable and restricted cash. The Company limits its exposure to credit loss by placing its cash and cash equivalents with high credit-quality financial institutions in bank deposits, money market funds, U.S. government securities and other investment grade debt securities that have strong credit ratings. The Company has established guidelines relative to diversification of its cash and marketable securities and their maturities that are intended to secure safety and liquidity. These guidelines are periodically reviewed and modified to take advantage of trends in yields and interest rates and changes in the Company’s operations and financial position. Although the Company may deposit its cash and cash equivalents with multiple financial institutions, its deposits, at times, may exceed federally insured limits.

 

The Company’s revenues are generated primarily from franchising and operating Crypto ATM services to customers located Latin America and the Caribbean. No single customer of the ATM network is responsible for over 1% of revenue. Also, as the Company collects all amounts from these customers and holds $0 in accounts receivable from its ATM or over the counter customers, there is no credit risk associated with customer concentration for these customers.

 

FINANCIAL INSTRUMENTS

The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

 

ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

·Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities 

·Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. 

·Level 3 - Inputs that are both significant to the fair value measurement and unobservable. 

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2022. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

 

PROPERTY, PLANT AND EQUIPMENT

Furniture and equipment are stated at cost.  Depreciation is computed by the straight-line method over estimated useful lives.  Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment at least Annual or whenever facts and circumstances indicate that the carrying value may not be recoverable.  When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset.  The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required.  If the carrying amount of the long-lived asset is not recoverable, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset.  The Company recognized depreciation expense of $40,193 and $121,124 for the periods ending December 31, 2022 and December 31, 2021, respectively.


F-24


Table of Contents


INTANGIBLE ASSETS

The Company has applied the provisions of ASC topic 350 - Intangible - goodwill and other, in accounting for its intangible assets.  Intangible assets are being amortized on a straight-line method on the basis of a useful life of 5 to 17 years.  The balance at December 31, 2022 and December 31, 2021 was $190,000 and $260,000, respectively.

 

 

 

December 31, 2022

 

December 31, 2021

Intellectual property

$

260,000

$

260,000

Less: Accumulated amortization and impairment

 

70,000

 

----

Totals

$

190,000

$

190,000

 

IMPAIRMENT OF LONG- LIVED ASSETS

The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable.  The assets are subject to impairment consideration under FASB ASC 360-10-35-17 if events or circumstances indicate that their carrying amount might not be recoverable.  When the Company determines that an impairment analysis should be done, the analysis will be performed using the rules of FASB ASC 930-360-35, Asset Impairment, and 360-0 through 15-5, Impairment or Disposal of Long- Lived Assets.

 

DERIVATIVE LIABILITIES

Derivative liabilities include the fair value of instruments such as common stock warrants, preferred stock warrants and convertible features of notes, that are initially recorded at fair value and are required to be re-measured to fair value at each reporting period under provisions of ASC 480, Distinguishing Liabilities from Equity, or ASC 815, Derivatives and Hedging. The change in fair value of the instruments is recognized as a component of other income (expense) in the Company’s statements of operations until the instruments settle, expire or are no longer classified as derivative liabilities. The Company estimates the fair value of these instruments using the Black-Scholes pricing model. The significant assumptions used in estimating the fair value include the exercise price, volatility of the stock underlying the instrument, risk-free interest rate, estimated fair value of the stock underlying the instrument and the estimated life of the instrument.  At December 31, 2022 and December 31, 2021, the Company had $1,882,093 and $2,515,080 derivative liability, respectively.

 

INCOME TAXES

We use the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. 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 the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

 

ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented.

 

NET INCOME (LOSS) PER COMMON SHARE

Net income (loss) per share is calculated in accordance with FASB ASC 260, “Earnings Per Share.”  The weighted-average number of common shares outstanding during each year is used to compute basic earning or loss per share.  Diluted earnings or loss per share is computed using the weighted average number of shares and diluted potential common shares outstanding.  Dilutive potential common shares are additional common shares assumed to be exercised.

 

Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding at December 31, 2022 and at December 31, 2021.  At December 31, 2022 and December 31, 2021, the Company had no dilutive potential common shares.


F-25


Table of Contents


SHARE-BASED EXPENSE

ASC 718, Compensation - Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the consolidated financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

 

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity - Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

 

Share-based expense was $350,000 for the period ending December 31, 2022, and $0 for the period ending December 31, 2021.

 

COMMITMENTS 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. There were no known commitments or contingencies as of December 31, 2022 and December 31, 2021.

 

RECENT ACCOUNTING PRONOUNCEMENTS

The Company has reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

 

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact this new guidance will have on its financial statements.

 

NOTE 3 - DIGITAL ASSETS

 

The Company accounts for its digital assets as indefinite-lived intangible assets in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles-Goodwill and Other.  The Company’s digital assets are initially recorded at cost. Subsequently, they are measured at cost, net of any impairment losses incurred since acquisition.

 

CRYPTO ACCOUNTING

There is currently no specific definitive guidance under US GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations.

 

CRYPTO ASSETS HELD

Crypto assets are considered indefinite-lived intangible assets under applicable accounting rules and are initially measured at cost and are not amortized. Accordingly, any decrease in their fair values below our carrying values for such assets at any time subsequent to their acquisition will require us to recognize impairment charges, whereas we may make no upward revisions for any market price increases until a sale. As the Company utilizes crypto assets


F-26


Table of Contents


within its Proof-of-Stake Pools and or ATMs, the balances turnover frequently, and the Company anticipates converting it to cash within a year, the Company has classified crypto assets held as current assets in the condensed consolidated balance sheets. The Company assigns costs to transactions on a first-in, first-out basis.

 

CRYPTO ASSET BORROWINGS

The Company borrows crypto assets. Such crypto assets borrowed by the Company are reported in crypto assets held on the Company’s condensed consolidated balance sheets as well as liability measured at the fair value on the date of the borrowing. The borrowings are accounted for as hybrid instruments, with a liability host contract that contains an embedded derivative based on the changes in the fair value of the underlying crypto asset. The host contract is not accounted for as a debt instrument because it is not a financial liability and is carried at the fair value of the assets acquired and reported in crypto asset borrowings in the condensed consolidated balance sheets. The embedded derivative is accounted for at fair value, with changes in fair value recognized in other non-operating expenses in the condensed consolidated statements of operations and comprehensive income. The embedded derivatives are included in crypto asset borrowings in the condensed consolidated balance sheets. The term of these borrowings can either be for a fixed term of less than one year or can be open-ended and repayable at the option of the Company or the lender. These borrowings bear a fee payable by the Company to the lender, which is based on a percentage of the amount borrowed and is denominated in the related crypto asset borrowed. The borrowing fee is recognized on an accrual basis and is included in other non-operating expenses in the condensed consolidated statements of operations and comprehensive income.

 

We determine the fair value of our digital assets on a nonrecurring basis in accordance with ASC 820, Fair Value Measurement, based on quoted prices on the active exchange(s) that we have determined is the principal market for such assets (Level 1 inputs). We perform an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted prices on active exchanges, indicate that it is more likely than not that our digital assets are impaired. In determining if an impairment has occurred, we consider the lowest market price of one unit of digital asset quoted on the active exchange since acquiring the digital asset. If the then current carrying value of a digital asset exceeds the fair value so determined, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the price determined.

 

On Mach 1, 2021, the Company purchased approximately 153,850 Cardano ADA with $200,000 in cash.  On October 26, 2021 the Company converted 153,850 Cardano ADA to $USD in the amount of $330,777. The Company simultaneously purchased 5.24777097 Bitcoin at $$63,032 per coin. As of December 31, 2022, the Company sold all of it’s Bitcoin holdings. As of December 31, 2021, the carrying value of the Company’s approximately 5.24777097 Bitcoin was $242,576, which reflects cumulative impairments of $88,201. The fair market value of such digital assets held as of December 31, 2022, was $0.

 

NOTE 4 - PROPERTY, PLANT AND EQUIPMENT

 

The Company has capitalized costs for equipment as follows:

 

 

 

December 31, 2022

 

December 31, 2021

Property, plant and equipment

 

$

222,681

 

$

136,080

Accumulated depreciation

 

 

84,438

 

 

44,245

Property, plant and equipment, net accumulated depreciation

 

$

138,243

 

$

92,080

 

Depreciation expense for the periods ended December 31, 2022 and 2021 was $40,193, and $32,923, respectively.  An accounting adjustment was made for the consolidation of property, plant and equipment.

 

NOTE 5 - INTANGIBLE PROPERTY

 

In March of 2019, the Company purchased the rights in the amount of $260,000 to and further developed the Intellectual Property below:

 

·SKULLYS® 

·DNATags® 

 

The Company recorded the property and intangibles as an intangible asset.  The valuation of the properties was booked at Fair Market Value.


F-27


Table of Contents


In January of 2022 the Company determined DNATags carried no value and fully impaired the intangible asset.

 

NOTE 6 - CONVERTIBLE NOTES PAYABLE

 

The following table represents the convertible notes payable at December 31, 2022:

 

 

 

 

 

 

 

Date of Note

Issuance

December 31,

2022

December 31,

2021

Maturity

Date

Conversion Terms

Name of Noteholder

1/20/2017

0

4,300

7/20/2017

Lowest of 75% of issuance day price or 60% lowest bid price in 30 days prior to conversion

Joseph Canouse

2/14/17

2,800

3,500

8/14/17

Lowest of 75% of issuance day price or 60% lowest bid price in 30 days prior to conversion

Joseph Canouse

3/20/17

0

10,000

9/14/17

Lowest of 75% of issuance day price or 60% lowest bid price in 30 days prior to conversion

Machiavelli LTD, LLC, Joseph Canouse, Manager

6/2/17

0

10,000

12/2/17

Lowest of 75% of issuance day price or 60% lowest bid price in 30 days prior to conversion

Machiavelli LTD, LLC, Joseph Canouse, Manager

8/22/17

0

10,000

2/22/18

Lowest of 75% of issuance day price or 60% lowest bid price in 30 days prior to conversion

Machiavelli LTD, LLC, Joseph Canouse, Manager

1/22/18

0

22,000

7/22/18

Lowest of 75% of issuance day price or 60% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

8/17/18

0

15,000

8/17/19

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

8/20/18

0

5,500

8/20/19

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

Oscaleta Partners, LLC, Narine Persaud, Manager

8/21/18

5,000

5,000

8/21/19

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

10/11/18

5,000

5,000

10/11/19

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

10/12/18

0

5,000

10/12/19

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

Oscaleta Partners, LLC, Narine Persaud, Manager

11/16/18

5,000

5,000

11/15/19

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

11/20/18

0

5,000

11/19/19

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

Oscaleta Partners, LLC, Narine Persaud, Manager

12/11/18

5,000

5,000

12/10/19

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

Carpathia, LLC, Manager Joseph Canouse

12/12/18

0

5,000

12/11/19

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

Oscaleta Partners, LLC, Narine Persaud, Manager

1/10/19

5,000

5,000

1/10/20

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

2/6/19

5,000

5,000

2/6/20

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

2/11/19

5,000

5,000

2/11/20

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

4/9/19

0

5,000

4/9/20

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager


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Date of Note

Issuance

December 31,

2022

December 31,

2021

Maturity

Date

Conversion Terms

Name of Noteholder

4/17/19

5,000

5,000

4/17/20

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

5/1/19

0

5,000

5/1/20

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

5/8/19

5,000

5,000

5/8/20

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

7/31/19

5,000

5,000

7/31/20

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

10/21/19

5,000

5,000

10/21/20

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

11/13/19

6,250

6,250

11/13/20

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

12/16/19

30,000

30,000

11/10/20

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

1/13/21

5,000

5,000

1/13/22

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

Carpathia, LLC, Manager Joseph Canouse

2/10/21

27,000

27,000

2/10/22

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

2/12/21

15,000

15,000

2/12/22

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

World Market Ventures, Chad Curtis, Manager

2/19/21

27,000

27,000

2/19/22

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

3/5/21

104,000

104,000

3/5/22

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

3/12/21

104,000

104,000

3/12/22

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

3/19/21

104,000

104,000

3/19/22

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

4/9/21

37,000

37,000

4/9/22

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

4/21/21

52,000

52,000

4/21/22

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

5/10/21

104,000

104,000

5/10/22

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

5/27/21

156,000

156,000

5/27/22

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

6/18/21

104,000

104,000

6/18/22

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

8/3/21

104,000

104,000

8/3/22

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

10/5/21

15,000

15,000

10/5/22

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager


F-29


Table of Contents


 

 

 

 

 

 

Date of Note

Issuance

December 31,

2022

December 31,

2021

Maturity

Date

Conversion Terms

Name of Noteholder

10/20/21

100,000

100,000

10/20/22

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

Carpathia, LLC, Manager Joseph Canouse

12/17/21

75,000

75,000

12/17/22

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

Carpathia, LLC, Manager Joseph Canouse

12/30/21

50,000

50,000

12/30/22

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

Carpathia, LLC, Manager Joseph Canouse

3/7/22

100,000

0

3/7/23

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

5/13/22

50,000

0

5/13/23

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

10/06/22

38,500

0

10/06/23

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

10/27/22

16,500

0

10/27/23

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

12/1/22

30,000

0

12/1/23

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

12/22/22

49,500

0

12/22/23

Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion

JP Carey Enterprises, Inc. Joseph Canouse, Manager

Sub-totals

$     1,561,550

$     1,379,550

 

 

 

Less: Debt Discount

(102,673)

(203,972)

 

 

 

Total Convertible Notes

$    1,458,877

$      1,175,578

 

 

 

 

NOTE 7 - ACCRUED INTEREST

 

The Company’s accrued interest consisted of the following:

 

 

 

December 31,

2022

 

December 31,

2021

Carpathia, LLC

$

22,945

$

23,105

Joseph Canouse

 

4,509

 

3,729

JP Carey, LLC

 

237,553

 

96,611

Machiavelli LTD, LLC

 

5,562

 

1,963

Oscaleta Partners, LLC

 

-

 

26,047

Trillium Partners LP

 

-

 

2,006

World Market Ventures

 

3,388

 

1,588

Total Accrued Interest

$

273,661

$

155,049

 

NOTE 8 - EXTINGUISHMENT OF DEBT

 

On December 31, 2021, the Company entered into a settlement agreement with Oscaleta Partners LLC for the cancellation of Two Hundred Eighty Thousand dollars ($280,000) in certain convertible notes payable. The cancellation also included $83,194 in accrued interest and the associated derivative liability of $548,466.

 

During January 2022, the Company entered into a settlement agreement with Oscaleta Partners LLC for the cancellation of Seventy-Six Thousand Five Hundred Seventy-Four dollars ($76,574) in certain convertible notes payable and accrued interest.  The cancellation included $26,074 in accrued interest and the associated derivative liability of $39,911.

 

The Company evaluated the cancellation under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the cancellation resulted in significant changes to the economic substance of the debt and thus resulted in an extinguishment of the debt of $76,547 for the period ending December 31, 2022 and $911,660 for the period ending December 31, 2021.


F-30


Table of Contents


NOTE 9 - RELATED PARTY TRANSACTIONS

 

EMPLOYMENT AND BOARD OF DIRECTOR AGREEMENTS

The Company has employment and board of director agreements with its key employees, the controlling shareholders, who are its officers and directors of the Company.

 

·Mr. Franjose Yglesias 

Employment Agreement: Five (5) year contract, annual salary of $150,000.

 

Amounts included in accruals represent amounts due to the officers and directors for corporate obligations under the abovementioned agreements.  Payments on behalf of the Company and accruals made under contractual obligation are accrued. As of December 31, 2022, and December 31, 2021 accrued expenses were $388,445 and $298,164, respectively.

 

NOTE PAYABLE

In support of the Company’s efforts and cash requirements, it has relied on advances from the Chief Executive Officer s until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support.  All advances made in support of the Company are formalized by demand notes, at a 0.00% annual interest rate.

 

For the period ended December 31, 2022 and the year ended December 31, 2021 the balance of notes payable-related party was $63,886 and $85,573, respectively.

 

NOTE 10 - STOCKHOLDERS’ DEFICIENCY

 

At December 31, 2022 and December 31, 2021, there are 11,762,403,124 and 11,042,530,916 shares of Common stock par value $0.00001, outstanding, respectively.

 

On December 31, 2021 the Company issue Mr. Franjosé Yglesias 500,000,000 of Preferred A stock for compensation.

Preferred “A” Stock has Voting Right Conversion Rate 1 X 1,000.

 

At December 31, 2022 and December 31, 2021 there are 500,000,000 shares authorized of Preferred “A” Stock, par or stated value: $0.001. Total Shares Issued & Outstanding:500,000,000, respectively.

 

Please refer to Item 3. Issuance history, Changes to the Number of Outstanding Shares for issuances of all shares over the prior two-year period.

 

NOTE 11 - COMMITMENTS AND CONTINGENCIES

 

From time to time the Company may be a party to litigation matters involving claims against the Company.  Management believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations.

 

NOTE 12 - SUBSEQUENT EVENTS

 

In accordance with ASC 855-10, the company has analyzed its operations subsequent to December 31, 2022, through the date these financial statements were issued (date of filing with the OTC Markets) and has determined that it does not have any material subsequent events to disclose in these financial statements other than the events discussed below.

 

On January 25, 2023, the Company executed the amended and restated convertible promissory note originally executed on December 16, 2019 from J.P. Carey Enterprises Inc. assigned to World Market Ventures LLC in the amount of $23,169.625. The Note was aggregated, restated and reissued to the Holder (World Market Ventures LLC) pursuant to an assignment agreement by and among the Holder, the Borrower (Company) and J.P. Carey Enterprises, Inc. (Assignor) dated January 25, 2023 whereby the Holder purchased from the Assignor half (50%) all rights, title and ownership of one (1) convertible promissory note (the “Original Note”) in favor of the Assignor: (i) note dated December 16, 2019 in the principal amount of $30,000 and accrued unpaid interes of $16,339.25; for a total due of $46,339.25.


F-31


Table of Contents


ITEM 14.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. 

 

There has never been any disagreement with any independent registered public accounting firm that has worked for the Company regarding accounting and financial disclosure.

 

ITEM 15.FINANCIAL STATEMENTS AND EXHIBITS. 

 

(a) Financial Statements appearing in Item 13 above:

 

·Unaudited financial statements for the nine months ended September 30, 2023 

·Audited financial statements for the years ended December 31, 2022, and 2021 

 

(b) Exhibits

 

 

 

 

Incorporated by

Reference

Exhibit

No.

Description

Filed

Herewith (*)

Filing

Type

Date

Filed

3.1

Articles of Incorporation

 

Form 1-A

10/20/2021

3.2

Bylaws

 

S-1

09/21/2010

4.1

Series A Certificate of Designation

*

 

 

10.1

Employment Contract for Franjose Yglesisas

*

 

 

10.2

Employment Contract for Marc Williams

*

 

 

10.3

Employment Contract for Kevin Jodrey

*

 

 

10.4

Director Agreement for Franjose Yglesisas

*

 

 

10.5

Director Agreement for Marc Williams

*

 

 

10.6

Director Agreement for Kevin Jodrey

*

 

 

10.7

Form of Convertible Note

 

Form 1-A

10/20/2021

21

Subsidiaries of Registrant

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


24


Table of Contents


SIGNATURES

 

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Santo Mining Corp

 

By: /s/ Franjose Yglesias

Name: Franjose Yglesias

Title: Chief Executive Officer

Date: December 5, 2023

 

 

 

 

Signature

 

Title

 

Date

 

 

 

 

 

/s/ Franjose Yglesias

 

Chief Executive Officer

 

December 5, 2023

Franjose Yglesias

 

(Principal Executive Officer

 

 

 

 

 

 

 

/s/ Franjose Yglesias

 

Chief Financial Officer

 

December 5, 2023

Franjose Yglesias

 

(Principal Accounting/Financial Officer)

 

 

 

 

 

 

 

/s/ Franjose Yglesias

 

Chairman of the Board

 

December 5, 2023

Franjose Yglesias

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


25

Picture 1 


CERTIFICATE OF DESIGNATIONS

OF

SERIES A PREFERRED STOCK

OF

SANTO MINING CORP.

 

Pursuant to Section 17-16-602 of the

Wyoming Business Corporation Act

 

The undersigned DOES HEREBY CERTIFY that the following resolution was duly adopted by the Board of Directors (the “Board”) of SANTO MINING CORP., a Wyoming corporation (hereinafter called the “Corporation”), with the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, having been fixed by the Board pursuant to authority granted to it under Article IV of the Corporation’s Restated Articles of Incorporation and in accordance with the provisions of Section 17-16-602 of the Wyoming Business Corporation Act:

 

RESOLVED: That, pursuant to authority conferred upon the Board by the Corporation’s Restated Articles of Incorporation, the Board hereby authorizes 50,000,000 shares of Series A Convertible Preferred Stock, par value $0.001 per share, of the Corporation and hereby fixes the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such shares, in addition to those set forth in the Restated Articles of Incorporation of the Corporation, as follows:

 

Section 1.     Designation . The shares of such Series shall be designated “Series A Convertible Preferred Stock,” and the number of shares constituting such Series shall be 50,000,000 (the “Series A Preferred Stock”). The number of shares of Series A Preferred Stock may be increased or decreased by resolution of the Board and approval by the holders of a majority of the outstanding shares of the Series A Preferred Stock, voting as a separate voting group; provided that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of shares of such Series then outstanding.

 

Section 2.     Currency . All Series A Preferred Stock shall be denominated in United States currency, and all payments and distributions thereon or with respect thereto shall be made in United States currency. All references herein to “$” or “dollars” refer to United States currency.

 

Section 3.     Ranking . The Series A Preferred Stock shall, with respect to dividend rights and rights upon liquidation, winding up or dissolution, rank senior to each other class or series of shares of the Corporation that is issued at the time of issuance of the Series A Preferred Stock and that the Corporation may issue thereafter, including, without limitation, the common stock of the Corporation, par value $0.00001 per share (the “Common Stock”).

 


Picture 2 


Picture 1 


Section 4.     Preferred “A” Stock.  Authorized Shares: The total number of Preferred “A” Stock which the Corporation shall have authority to issue is Five Hundred Million (500,000,000) shares with a par value of $0.01.  

Section 5. Issuance of Preferred Stock: The Board of Directors is hereby authorized from time to time, without stockholder action, to provide for the issuance of Preferred Stock in one or more series not exceeding in the aggregate the number of Preferred Stock authorized by these Articles of Incorporation, as amended from time to time; and to determine with respect to each such series the voting powers, if any (which voting powers, if granted, may be full or limited), designations, preferences, and relative, participating, option, or other special rights, and the qualifications, limitations, or restrictions relating thereto, including without limiting the generality of the foregoing, the voting rights relating to Preferred Stock of any series (which may be one or more votes per share or a fraction of a vote per share, which may vary over time, and which may be applicable generally or only upon the happening and continuance of stated events or conditions), the rate of dividend to which holders of Preferred Stock of any series may be entitled (which may be cumulative or noncumulative), the rights of holders of Preferred Stock of any series in the event of liquidation, dissolution, or winding up of the affairs of the Corporation, the rights, if any, of holders of Preferred Stock of any series to convert or exchange such Preferred Stock of such series for shares of any other class or series of capital stock or for any other securities, property, or assets of the Corporation or any subsidiary (including the determination of the price or prices or the rate or rates applicable to such rights to convert or exchange and the adjustment thereof, the time or times during which the right to convert or exchange shall be applicable, and the time or times during which a particular price or rate shall be applicable), whether or not the shares of that series shall be redeemable, and if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates, and whether any shares of that series shall be redeemed pursuant to a retirement or sinking fund or otherwise and the terms and conditions of such obligation.

Section 6. Conversion.  Each share of Series “A” Preferred Stock can be converted into the 1,000 shares of common stock of the Company at any time at the option of the holders of the Series “A” Preferred Stock. On or before the date of conversion, the converting holder of Series “A” Preferred Stock shall surrender his or its certificate or certificates for all such shares to the Company at the place designated in such notice and shall thereafter receive certificates for the number of Common Stock to which such holder is entitled pursuant to this Section. On the date of conversion, all rights with respect to the Series “A” Preferred Stock so converted will terminate, except only the rights of the holders thereof, upon surrender of their certificate or certificates therefore, to receive certificates for the number of Common Stock into which such Series “A” Preferred Stock has been converted. If so required by the Company, certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form satisfactory to the Company, duly executed by the registered holder or by his attorneys duly authorized in writing. All certificates evidencing Series “A” Preferred Stock which are required to be surrendered for conversion in accordance with the provisions hereof shall, from and after the date such certificates are so required to be surrendered, be deemed to have been retired and cancelled and the Series “A” Preferred Stock represented thereby converted into Common Stock for all purposes, notwithstanding the failure of the holder or holders thereof to surrender such certificates on or prior to such date. As soon as practicable after the date of such conversion and the surrender of the certificate or certificates for Series “A” Preferred Stock as aforesaid, the Company shall cause to be issued and delivered to such holder, or on his or its written order, a certificate or certificates for the number of full Common Stock issuable on such conversion in accordance with the provisions hereof.”


Picture 2 


Picture 1 


SANTO MINING CORP.

By:/s/ Franjose Yglesias 

Name:Franjose Yglesias 

Title:Chief Executive Officer 


Picture 2 

Picture 1502855627 


October 1st, 2023

 

EMPLOYMENT CONTRACT

 

Employment contract SANTO MINING CORP. dba SANTO BLOCKCHAIN LABS, INC> also known as SANTO (“employer”) and FRANJOSE YGLESIAS (“employee”).

 

Whereas

The employer desires to contract the services of the employee in various facets of the business for a period of 10 years commencing on October 1st, 2023, situated in Wyoming, United States, in the particular role of Chief Executive Officer “C.E.O.”.

 

Now Therefore it is agreed as follows:

TERMS, REMUNERATION, BENEFITS, LEAVE AND OTHER CONDITIONS

1.The employer agrees to pay the employee a base salary of $150,000 per annum payable by equal. 

2.The employer may from time to time introduce and operate various incentive or bonus schemes to promote the best interests of the business. At the sole discretion of the board of Directors, the employee may be entitled to participate in such schemes. 

3.The employee shall be entitled to all normal staff benefits including statutory holidays, 15 days annual leave (timing by mutual agreement), after six (6) months service and concessions from time to time granted by the employer. Such concessions may include agreed study/education time to complete tertiary qualifications. 

4.Should the employee’s employment continue beyond six (6) months, the employee shall be entitled in each ensuing period of twelve (12) months up to five (5) days paid “special leave” which may be applied for when: 

a.sick, (if more than two days a doctor’s certificate is necessary) 

b.the spouse, partner or a dependent is sick 

c.a family bereavement which requires leave 

5.After twelve (12) months continuous employment with the employer, the employee is entitled to “parental leave”. 

6.The employer will reimburse the employee all business-related expenses, such as travel, accommodation, telephone tolls call charges and other expenses on presentation of a receipt and monthly expenses statement from the employee. Within this, the employee will be entitled to claim reimbursement of the following additional expenses: 

a.A mobile phone allowance of $225.00 per month 

b.An Internet allowance of $75.00 per month 

c.International per diem of $125.00USD per day 

d.National per diem of $75.00USD per day 

7.The provision of a motor vehicle does not form part of this agreement and will be discussed as a separate arrangement. A separate Motor Vehicle Lease Agreement is attached. 

 

DUTIES AND RESPONSIBILITIES

1.The employee shall carry out the duties of C.E.O., initially directly responsible for: 

a.Develop and implement operational policies, strategic plans, and Annual Operating Plans to guide the SANTO within the limits prescribed, delegated authority, and the framework of the strategic directions approved by the Board. 

b.Operate the SANTO within established policies, maintain a regular policy review process, and revise or develop policies for presentation to the Board. 

c.Ensure the SANTO operates within all regulatory requirements. 

d.Ensure the SANTO operates within approved budgets and operating plans. 

e.Keep abreast of issues which may significantly impact the SANTO. 

f.Ensure the SANTO meets audit requirements. 

g.Create and maintain an organizational environment that promotes positive staff morale and performance. 


1095 Sugar View Dr Ste 500, Sheridan, WY 82801 USA


Picture 1502855627 


h.Ensure effective human resources programs are developed and maintained to support the strategic goals of the SANTO (includes recruiting, performance management, training, succession planning, employee relations, and compensation). 

i.Direct, motivate and maintain a competent, well-trained, flexible and responsive staff capable of meeting current and future needs. 

j.Develop and recommend the overall SANTO organizational structure and staffing to the Board. 

k.Develop and maintain an annual Board-approved plan for the development and succession of management. 

l.Responsible for the financial accounting of the company. 

m.The employee's performance against agreed target will be reviewed at least every twelve (12) months with the Board of Director 

2.In performing the duties, the employee shall diligently and faithfully serve the employer and use his/her best efforts to promote and protect the employer’s interests. The employee shall devote the time and effort exclusively during normal business hours to discharge the duties. The employee may be asked to work outside these hours from time to time by a supervisor. 

 

CONFIDENTIALITY, SECURITY, AND RESPECT FOR INDIVIDUAL RIGHTS

1.The employee and the employer acknowledge that the terms and conditions of this agreement are to remain confidential. 

2.No raw materials, stock, finished goods, or other property of the employer, its customers or suppliers, shall be removed from the premises without the specific approval of the employee’s supervisor or another Manager. 

3.The employee acknowledges that he/she has read, understood and agree to the company information, policies and health and safety guidelines in the “Employee Manual”. 

4.The employee shall respect and understand the individual rights of other staff at the employer. 

 

INTELLECTUAL PROPERTY AND OTHER BUSINESS INTERESTS

1.Except under proper performance of the employee’s duties, the employee shall not divulge intellectual property information obtained, generated or acquired through employment regarding the business affairs, property, customers, clients, staff or principals of the employer. 

2.The employee shall assign and disclose promptly to the employer any and all ideas, designs, inventions, developments or like when made in whole or part by the employee in the course of his/her employment, and to make and maintain adequate and current records thereof. 

3.The employee shall not during the continuance of employment be employed, engaged, concerned or interested in any other business or any business which may compete in a material respect with the employer without the prior written consent of the employer. 

 

TERMINATION

1.It is agreed that either party may terminate this employment contract by eight (8) weeks prior written notice or the employer may elect to make payment in lieu of such notice. 

2.The employer may terminate the employee’s employment without notice or payment (except as require by law) upon the occurrence of any of the following events: 

a.The employer considers that the employee is guilty of serious misconduct which in the opinion of the employer justified summary dismissal. 

b.The employee be guilty of any willful breach or continued neglect of duties or terms expressed or implied by this agreement or any duties which may from time to time be properly assigned to the employee. 

c.In the opinion of the Board of Directors the employee has conducted himself/herself (whether or not in the course of his/her employment) in a manner likely to bring the employee or the employer into disrepute. 

d.If in the opinion of the board of directors, the job position filled by the employee becomes redundant and the employer does not consider the employee suitable for any other position that is available, or  


1095 Sugar View Dr Ste 500, Sheridan, WY 82801 USA


Picture 1502855627 


there is no other position available, the employee will be entitled to eight (8) weeks prior written notice or the employer may elect to make payment in lieu of such notice.

3.Upon termination of the employee 's employment under this agreement for any reason whatsoever the employee must immediately return to the employer all types of documents and copies thereof within the employee's possession or control that relate to the intellectual property, affairs and business of the employer. 

4.All physical property of the employer or property under the contractual control of the employer must immediately be returned to the employer. 

5.Upon the termination of employment, the employee shall be entitled to be paid in respect of the annual holiday earned by the employee that have not already been enjoyed and shall refund to the company, the wages in respect of holiday enjoyed by the employee that have not already been earned. 

6.From the time of termination of employment the employee shall not for a period of twelve (12) months directly or indirectly solicit competition for the custom of the employer clients’ who were clients within twelve (12) months prior to termination of the employee’s employment, use the intellectual property of the employer or in any way be involved in a similar competitive business. The employee shall not directly or indirectly offer employment to any person who is or had recently been an employee of the employer. 

7.This clause is intended to apply for the period specified after the date of the employee’s termination of employment and whilst the employer continues trading in its present business activities. 

 

Illegality

1.If for any reason a provision of this agreement be declared invalid or unenforceable the remaining provisions shall not be affected or impaired.  

 

Signatures and Endorsements

 

Made this the 1st day of October, 2023

 

/s/ Marc Williams

Marc Williams


1095 Sugar View Dr Ste 500, Sheridan, WY 82801 USA

Picture 1502855627 


October 1, 2023

 

EMPLOYMENT CONTRACT

 

Employment contract SANTO MINING CORP. dba SANTO BLOCKCHAIN LABS, INC> also known as SANTO (“employer”) and MARC WILLIAMS (“employee”).

 

Whereas

The employer desires to contract the services of the employee in various facets of the business for a period of 10 years commencing on October 1st, 2023, situated in Wyoming, United States, in the particular role of Chief Operations Officer “C.O.O.”.

 

Now Therefore it is agreed as follows:

TERMS, REMUNERATION, BENEFITS, LEAVE AND OTHER CONDITIONS

1.The employer agrees to pay the employee a base salary of $150,000 usd per annum payable by 12 equal payments. 

2.The employer may from time to time introduce and operate various incentive or bonus schemes to promote the best interests of the business. At the sole discretion of the board of Directors, the employee may be entitled to participate in such schemes. 

3.The employee shall be entitled to all normal staff benefits including statutory holidays, 15 days annual leave (timing by mutual agreement), after six (6) months service and concessions from time to time granted by the employer. Such concessions may include agreed study/education time to complete tertiary qualifications. 

4.Should the employee’s employment continue beyond six (6) months, the employee shall be entitled in each ensuing period of twelve (12) months up to five (5) days paid “special leave” which may be applied for when: 

a.sick, (if more than two days a doctor’s certificate is necessary) 

b.the spouse, partner or a dependent is sick 

c.a family bereavement which requires leave 

5.After twelve (12) months continuous employment with the employer, the employee is entitled to “parental leave”. 

6.The employer will reimburse the employee all business-related expenses, such as travel, accommodation, telephone tolls call charges and other expenses on presentation of a receipt and monthly expenses statement from the employee. Within this, the employee will be entitled to claim reimbursement of the following additional expenses: 

a.A mobile phone allowance of $225.00 per month 

b.An Internet allowance of $75.00 per month 

c.International per diem of $125.00USD per day 

d.National per diem of $75.00USD per day 

7.The provision of a motor vehicle does not form part of this agreement and will be discussed as a separate arrangement. A separate Motor Vehicle Lease Agreement is attached. 

 

DUTIES AND RESPONSIBILITIES

1.The employee shall carry out the duties of C.O.O., initially directly responsible range of responsibilities that involve overseeing the company’s day-to-day operations, ensuring efficiency and contributing to the company's strategic goals: 

a.Operational Leadership: Provide overall leadership for the company's operational activities, ensuring the efficient and effective functioning of the organization. 

b.Strategy Implementation: Work with the CEO and executive team to translate the company's strategic vision into actionable plans and initiatives. 

c.Resource Allocation: Manage and allocate resources, including budget, personnel, and technology, to support company objectives. 

d.Business Development: Identify and pursue growth opportunities, partnerships, and alliances that can expand the company's presence in the cannabis and blockchain sectors. 


1095 Sugar View Dr Ste 500, Sheridan, WY 82801 USA


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e.Operational Efficiency: Implement processes and systems to optimize operational efficiency and reduce costs where possible. 

f.Risk Management: Identify and mitigate operational risks associated with the cannabis and blockchain industries, including cybersecurity and regulatory compliance. 

g.Team Leadership: Provide leadership and guidance to various teams within the company, including technology, sales, marketing, and compliance teams. 

h.Customer Experience: Focus on improving the customer experience by enhancing service quality and ensuring that cannabis coupon solutions meet customer needs. 

i.Financial Management: Collaborate with the CFO to manage financial performance, control costs, and ensure profitability. 

j.Market Research: Stay informed about industry trends, consumer preferences, and emerging technologies, and apply this knowledge to improve operations and offerings. 

k.Internal Communication: Foster clear and effective communication within the company, ensuring that all teams are aligned with the company's goals and initiatives. 

2.In performing the duties, the employee shall diligently and faithfully serve the employer and use his/her best efforts to promote and protect the employer’s interests. The employee shall devote the time and effort exclusively during normal business hours to discharge the duties. The employee may be asked to work outside these hours from time to time. 

 

CONFIDENTIALITY, SECURITY, AND RESPECT FOR INDIVIDUAL RIGHTS

1.The employee and the employer acknowledge that the terms and conditions of this agreement are to remain confidential. 

2.No raw materials, stock, finished goods, or other property of the employer, its customers or suppliers, shall be removed from the premises without the specific approval of the employee’s supervisor or another Manager. 

3.The employee acknowledges that he/she has read, understood and agree to the company information, policies and health and safety guidelines in the “Employee Manual”. 

4.The employee shall respect and understand the individual rights of other staff at the employer. 

 

INTELLECTUAL PROPERTY AND OTHER BUSINESS INTERESTS

1.Except under proper performance of the employee’s duties, the employee shall not divulge intellectual property information obtained, generated or acquired through employment regarding the business affairs, property, customers, clients, staff or principals of the employer. 

2.The employee shall assign and disclose promptly to the employer any and all ideas, designs, inventions, developments or like when made in whole or part by the employee in the course of his/her employment, and to make and maintain adequate and current records thereof. 

3.The employee shall not during the continuance of employment be employed, engaged, concerned or interested in any other business or any business which may compete in a material respect with the employer without the prior written consent of the employer. 

 

TERMINATION

1.It is agreed that either party may terminate this employment contract by eight (8) weeks prior written notice or the employer may elect to make payment in lieu of such notice. 

2.The employer may terminate the employee’s employment without notice or payment (except as require by law) upon the occurrence of any of the following events: 

a.The employer considers that the employee is guilty of serious misconduct which in the opinion of the employer justified summary dismissal. 

b.The employee be guilty of any willful breach or continued neglect of duties or terms expressed or implied by this agreement or any duties which may from time to time be properly assigned to the employee. 

c.In the opinion of the Board of Directors the employee has conducted himself/herself (whether or not in the course of his/her employment) in a manner likely to bring the employee or the employer into disrepute. 


1095 Sugar View Dr Ste 500, Sheridan, WY 82801 USA


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d.If in the opinion of the board of directors, the job position filled by the employee becomes redundant and the employer does not consider the employee suitable for any other position that is available, or there is no other position available, the employee will be entitled to eight (8) weeks prior written notice or the employer may elect to make payment in lieu of such notice. 

3.Upon termination of the employee 's employment under this agreement for any reason whatsoever the employee must immediately return to the employer all types of documents and copies thereof within the employee's possession or control that relate to the intellectual property, affairs and business of the employer. 

4.All physical property of the employer or property under the contractual control of the employer must immediately be returned to the employer. 

5.Upon the termination of employment, the employee shall be entitled to be paid in respect of the annual holiday earned by the employee that have not already been enjoyed and shall refund to the company, the wages in respect of holiday enjoyed by the employee that have not already been earned. 

6.From the time of termination of employment the employee shall not for a period of twelve (12) months directly or indirectly solicit competition for the custom of the employer clients’ who were clients within twelve (12) months prior to termination of the employee’s employment, use the intellectual property of the employer or in any way be involved in a similar competitive business. The employee shall not directly or indirectly offer employment to any person who is or had recently been an employee of the employer. 

7.This clause is intended to apply for the period specified after the date of the employee’s termination of employment and whilst the employer continues trading in its present business activities. 

 

ILLEGALITY

1.If for any reason a provision of this agreement be declared invalid or unenforceable the remaining provisions shall not be affected or impaired.  

 

Signatures and Endorsements

 

Made this the 1st day of October 2023

 

/s/ Franjose Yglesias

Franjose Yglesias

in the presence of the undersigned witness

 

 

 

 

 

 

 


1095 Sugar View Dr Ste 500, Sheridan, WY 82801 USA

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October 1, 2023

 

EMPLOYMENT CONTRACT

 

Employment contract SANTO MINING CORP. dba SANTO BLOCKCHAIN LABS, INC> also known as SANTO (“employer”) and Kevin Jodrey (“employee”).

 

Whereas

The employer desires to contract the services of the employee in various facets of the business for a period of 10 years commencing on October 1st, 2023, situated in Wyoming, United States, in the particular role of Chief Cannabis Officer “C.C.O.”.

 

Now Therefore it is agreed as follows:

TERMS, REMUNERATION, BENEFITS, LEAVE AND OTHER CONDITIONS

1.The employer agrees to pay the employee a base salary of $150,000 usd per annum payable by 12 equal payments. 

2.The employer may from time to time introduce and operate various incentive or bonus schemes to promote the best interests of the business. At the sole discretion of the board of Directors, the employee may be entitled to participate in such schemes. 

3.The employee shall be entitled to all normal staff benefits including statutory holidays, 15 days annual leave (timing by mutual agreement), after six (6) months service and concessions from time to time granted by the employer. Such concessions may include agreed study/education time to complete tertiary qualifications. 

4.Should the employee’s employment continue beyond six (6) months, the employee shall be entitled in each ensuing period of twelve (12) months up to five (5) days paid “special leave” which may be applied for when: 

a.sick, (if more than two days a doctor’s certificate is necessary) 

b.the spouse, partner or a dependent is sick 

c.a family bereavement which requires leave 

5.After twelve (12) months continuous employment with the employer, the employee is entitled to “parental leave”. 

6.The employer will reimburse the employee all business-related expenses, such as travel, accommodation, telephone tolls call charges and other expenses on presentation of a receipt and monthly expenses statement from the employee. Within this, the employee will be entitled to claim reimbursement of the following additional expenses: 

a.A mobile phone allowance of $225.00 per month 

b.An Internet allowance of $75.00 per month 

c.International per diem of $125.00USD per day 

d.National per diem of $75.00USD per day 

7.The provision of a motor vehicle does not form part of this agreement and will be discussed as a separate arrangement. A separate Motor Vehicle Lease Agreement is attached. 

 

DUTIES AND RESPONSIBILITIES

1.The employee shall carry out the duties of C.C.O., initially directly responsible range of responsibilities that involve overseeing the company’s day-to-day operations, ensuring efficiency and contributing to the company's strategic goals: 

a.**Compliance and Regulatory Oversight**: