Golden Developing Solutions, Inc. - FORM 10-K

Attached files

file	filename
EX-32.2 - CERTIFICATION - Golden Developing Solutions, Inc.	golden_ex3202.htm
EX-32.1 - CERTIFICATION - Golden Developing Solutions, Inc.	golden_ex3201.htm
EX-31.2 - CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER - Golden Developing Solutions, Inc.	golden_ex3102.htm
EX-31.1 - CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER - Golden Developing Solutions, Inc.	golden_ex3101.htm
EX-10.1 - ASSET PURCHASE AGREEMENT - Golden Developing Solutions, Inc.	golden_ex1001.htm

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2020

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

For the transition period from ____________ to____________

Commission File Number: 000-56051

GOLDEN DEVELOPING SOLUTIONS, INC

(Exact name of registrant as specified in its charter)

Nevada		82-2911016
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer identification No.)

PO Box 460573, Fort Lauderdale, FL		33346
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (623) 826-5206

Securities registered under Section 12(b) of the Exchange Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
N/A		N/A		N/A

Securities registered pursuant to section 12(g) of the Act:

Common Stock, par value $0.0001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☐ Yes ☒ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☐ Yes ☒ No

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

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒		Smaller reporting company ☒
		Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transaction period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

The aggregate market value of the voting and non-voting common equity held by non-affiliates was $284,031 computed by reference to the closing price of the registrant’s common stock as quoted on the OTC Pink Sheets on June 30, 2020 (which was $0.002 per share). For purposes of the above statement only, all directors, executive officers and 10% shareholders are assumed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for any other purpose.

As of September 7, 2021, there were 571,507,751 shares of common stock, par value $0.0001 issued and outstanding.

TABLE OF CONTENTS

		Page
		Number
	PART I

Item 1.	Business.	1
Item 1A	Risk Factors.	3
Item 1B	Unresolved Staff Comments.	3
Item 2.	Properties.	3
Item 3.	Legal Proceedings.	3
Item 4.	Mine Safety Disclosures.	3

	PART II

Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	4
Item 6.	Selected Financial Data.	4
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	5
Item 7A	Quantitative and Qualitative Disclosure about Market Risk.	11
Item 8.	Financial Statements and Supplementary Data.	11
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	12
Item 9A	Controls and Procedures.	12
Item 9B	Other Information.	13

	PART III

Item 10.	Directors, Executive Officers and Corporate Governance.	14
Item 11.	Executive Compensation.	17
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	17
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	18
Item 14.	Principal Accounting Fees and Services.	19

	PART IV

Item 15.	Exhibits, Financial Statement Schedules.	20

FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-K (including the section regarding Management’s Discussion and Analysis of Financial Condition and Results of Operations) contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this Annual Report on Form 10-K. Additionally, statements concerning future matters are forward-looking statements.

Although forward-looking statements in this Annual Report on Form 10-K reflect the good faith judgment of our Management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. We file reports with the Securities and Exchange Commission (“SEC”). You can read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Annual Report on Form 10-K. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this annual Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

In this Annual Report on Form 10-K, the terms “we”, “our”, and “us” refer to Golden Developing Solutions, Inc. (“Golden Developing”).

PART I

Item 1. Business

Corporate History

Golden Developing Solutions, Inc. (the “Company,” “we,” “our,” or “us”) was originally incorporated on December 17, 1998 in the State of Nevada under the name American Associates Group. In 2007 the name was changed to Clean Hydrogen Producers, Ltd before being changed in April of 2017 to Golden Developing Solutions, Inc. The Company has structured itself in 2017 as a cannabis holding company and intends to make additional acquisitions in the industry in the near future.

On April 27, 2018, the Company incorporated Pura Vida Vitamins, LLC as a wholly owned subsidiary. Pura Vida Vitamins, LLC entered into two consulting agreements with individuals that paid each consultant $6,000 per month in cash, additional bonuses depending on certain sales-related milestones, and 20,500,000 shares each for the completion of certain sales-related milestones, of which none were earned by either consultant. On July 1, 2018, the Company reorganized the entity to be a joint venture in which it owns 50%, in exchange for the cancelation of these consulting agreements. The Company continues to consolidate the operations of Pura Vida Vitamins, LLC due to its ownership interest combined with a controlling vote of the board of directors which make the Company the primary beneficiary of the joint venture with the ability to significant influence and control the activities of the business. As of August 8, 2019, the Company entered into a separation agreement (the “Separation Agreement”) with Pura Vida Health LLC whereby pursuant to the Separation Agreement, the Company sold its remaining 50% ownership interests in Pura Vida to Pura Vida Health LLC, leaving Pura Vida Health LLC as Pura Vida’s sole owner and only member in exchange for $160,000 (the “PV Purchase Price”). The PV Purchase Price shall be paid as follows: (i) $20,000 cash to be paid to an escrow agent whereby upon the satisfaction of the occurrence of certain events, the $20,000 is to be released to the Company and credited against the promissory note; (ii) the issuance of a promissory note in the principal amount of $95,100 whereby the note will accrue interest at a rate of 10% per annum, but only on the $75,100 portion of the note; and (iii) $65,000 cash payment no later than 12 months from the date of the Separation Agreement. The principal and interested on the promissory note shall be paid on a monthly basis starting on August 15, 2019 and for the next 11 months thereafter. The Separation Agreement marked the conclusion of the Joint Venture between the parties. None of these payments have been made as of the date of this filing, and there have been no operations of the joint venture in fiscal year 2020 or 2019. The joint venture is considered to be dissolved.

On September 26, 2018, the Company incorporated Tasos Media LLC as a wholly owned subsidiary.

On March 9, 2019, the Company incorporated CBD Infusionz, LLC as a wholly owned subsidiary.

Current Operations

Golden Developing Solutions, Inc. (the “Company”) is developing an online retail business for CBD, hemp oil and health/wellness related products. Through our online retail business, we will offer a broad range of price-competitive products, including traditional vitamins, supplements, and CBD based tinctures, vapes, softgels, among other products.

We will sell our products and services through our Internet website (the "Website"). The Company is developing an online store whose merchandise includes hemp related products, CBD (Cannabidiol) related products and additional products focusing on health and lifestyle.

Initially, we intend to carry in excess of 10 products from two suppliers. We intend to place directed advertising throughout the online store. Advertising will originate through internet or direct-advertising sales by the Company. The company may also use social media outlets such as Facebook, Twitter and Instagram in an effort to attract customers with product specific advertisements or posts.

As an online retail store operating with distribution hub, we will be able to rapidly scale our products and services with minimal marginal costs. Each additional brand, category or product that we add to our platform adds negligible server hosting costs. It also allows us to have a virtual presence and exposure to every regulated cannabis market without establishing a costly physical presence in each state. This minimizes the costs of scaling and required capital while, at the same time, offering a direct role in the cannabis industry without ever touching the plant itself.

We are a startup company in the cannabis industry. Our focus is to create online sales and marketing initiatives to build a dominate brand. Our oil and extracts division will focus on online sales of formulated CBD / hemp oil tinctures, softgels, capsules. We have our Website under development and anticipate to be online in the next few months. We are in the process of acquiring trademarks relative to our products. Agreements with raw material suppliers and related products have been obtained. All supply will come domestically with white label agreements when needed. Online Marketing program in place to drive fast paced growth plan in line with industry. Orders will be handled online and shipped via appropriate carriers from our inventory in leased warehouse. Drop shipping may be used during initial launch phases. Customers for CBD/hemp products expect the highest of quality and consistency and pricing is based on those levels. We expect to be price and quality competitive on the higher end of that scale. All product quality is 100% customer satisfaction guaranteed and products not deemed to be of quality can be returned for a refund. Quality and consistency of quality are needed to avoid returned product issues which could result in financial liability. Online payment gateway being established with backup vendor for online payment gateway in place as well.

Divestitures

On October 4, 2019 the Company entered into a Termination Agreement (the “Termination Agreement”) with Infusionz, LLC, a Colorado limited liability company (“Infusionz”) on October 4, 2019 (the “Closing Date”), whereby the Company and Infusionz elected to terminate the March 8, 2019 Asset Purchase Agreement (the “Asset Purchase Agreement”). The Asset Purchase Agreement resulted in the Company’s acquisition of Infusionz’s assets. Infusionz and the Company agreed to unwind the Company’s acquisition of Infusionz’s assets pursuant to the terms of the Asset Purchase Agreement.

The Termination Agreement provides that Infusionz and all associated members will return the stock consideration granted to them pursuant to the Asset Purchase Agreement. The fair value of the stock consideration to be returned to the Company is approximately $2,600,000. The Termination Agreement provides that Infusionz will release the Company from the promissory note issued as payment for the assets pursuant to the Asset Purchase Agreement (the “Original Note”) and any and all obligations therein. The Termination Agreement provides that the Company will issue two unsecured promissory notes to Infusionz each in the principal amount of $25,000 with neither of these notes being convertible (the “Notes”). The Termination Agreement further provides that the Company will assign, and Infusionz will assume, certain assets and contracts as defined therein.

The Notes became effective as of the Closing Date, and both Notes were due and payable on December 31, 2020 and remain outstanding as of September 7, 2021 in the amount of $50,000.

On September 18, 2018 the Company completed the purchase of all of the assets of Layer Six Media, Inc. (DBA Where’s Weed), an online and mobile cannabis services hub that focuses on fast, secure and efficient discovery and purchasing of cannabis in both recreational and medical markets in the United States and Canada. The transaction was accounted for as a business combination under ASC 805.

On January 27, 2020 the Company entered into an Asset Purchase Agreement (the “APA”) with Viath, LLC, a Colorado limited liability company (“Viath”) controlled by the original sellers of Layer Six, whereby the Company agree to sell the assets and liabilities associated with the Layer Six business.

The APA provides that the Company will sell all of the Layer Six assets to Viath, along with release from all claims and certain litigation . The Termination Agreement also provides for the termination of the Employment Agreements between the Company and each of David Lindaur and Tyler Batholomew and Bill Anders.

The APA also provided that the associated members of Layer Six will return the 170,454,545 shares of common stock consideration granted to them pursuant to the Asset Purchase Agreement. The fair value of the stock consideration to be returned to the Company is approximately $477,273 at the time of the Sale Agreement. These shares were returned to the Company and cancelled in February 2020.

Item 1A. Risk Factors.

Smaller reporting companies are not required to provide the information required by this item.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

We maintain our current principal office at PO Box 460573, Fort Lauderdale, FL, 33346. Our telephone number at this office is (623) 826-5206.

Item 3. Legal Proceedings.

The Company is not involved in any disputes and does not have any litigation matters pending. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company, threatened against or affecting our Company or our common stock, in which an adverse decision could have a material adverse effect.

Item 4. Mine Safety Disclosures.

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Our Common Stock is quoted for trading on OTC Pink marketplace operated by OTC Markets Inc. under the symbol “DVLP”.

As of September 7, 2021, 571,507,751 shares of our common stock were issued and outstanding.

Holders

As of September 7, 2021, there were approximately 550 holders of record of our common stock. This number does not include shares held by brokerage clearing houses, depositories or others in unregistered form.

Dividend Policy

To date, we have not paid any dividends on our common stock and do not anticipate paying any dividends in the foreseeable future. The declaration and payment of dividends on the common stock is at the discretion of our Board and will depend on, among other things, our operating results, financial condition, capital requirements, contractual restrictions or such other factors as our Board may deem relevant. We currently expect to use all available funds to finance the future development and expansion of our business and do not anticipate paying dividends on our common stock in the foreseeable future.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Securities Transfer Corporation with an address at 2901 N. Dallas Parkway, Plano, Texas 75093. Their phone number is 469-633-0101.

Rule 10B-18 Transactions

During the fiscal year ended December 31, 2020, there were no repurchases of the Company’s common stock by the Company.

Recent Sales of Unregistered Securities

During the year ended December 31, 2020, we issued securities that were not registered under the Securities Act. Except where noted, all of the securities discussed in this Item 5 were issued in reliance on the exemption under Section 4(a)(2) of the Securities Act.

During the three months ended March 31, 2020, the Company issued to two firms 44,786,395 shares of common stock for compensation related to investor relation services with a fair value of $99,094.

Item 6. Selected Financial Data.

Not applicable.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This section of this report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

Business

Results of Operations

Below is a summary of the results of operations for the years ended December 31, 2020 and 2019:

	For the Year ended December 31,
	2020			2019			$ Change			% Change
Revenue	$	–		$	–		$	–			-%
Cost of revenue		–			–			–			-%
Gross loss		–			–			–			-%

Operating expenses
Professional fees		134,843			268,378			(133,535	)		(49.8)%
General & administrative		410,627			1,287,932			(877,305	)		(68.1)%
Total operating expenses		545,470			1,556,310			(1,010,840	)		(65.0)%

Loss on lease settlement		(179,684	)		–			(179,684	)		(100.0)%
Derivative gain (loss)		18,022			–			18,022			100.0%
Interest expense, net		(411,312	)		(122,273	)		(289,039	)		236.4%
Net gain (loss) from discontinued operations, net of tax		52,459			(7,350,786	)		(7,403,245	)		(100.7)%

Net income (loss)	$	(1,065,985	)	$	(9,029,369	)	$	(7,963,384	)		(88.2)%

Operating expenses

Operating expenses decreased by $1,010,840 for the year ended December 31, 2020, compared to the same period in 2019, listed below are the major changes to operating expenses:

Professional fees decreased by $133,535 for the year ended December 31, 2020, compared to the same period in 2019, primarily was due to reducing operations in the current period associated with disposing of the Company’s two previous businesses.

General and administrative expenses decreased by $877,305 for the year ended December 31, 2020, compared to the same period in 2019, primarily was due to reducing operations in the current period associated with disposing of the Company’s two previous businesses.

Other income (expense)

Other income (expense) increased by $450,701 for the year ended December 31, 2020, compared to the same period in 2019, primarily as a result of interest expense on the notes payable issued to finance the asset purchase agreements related to the two acquisitions during the year and other convertible notes payable and the Company’s line of credit, and due to a loss on lease settlement.

Liquidity and Capital Resources

The following is a summary of the cash and cash equivalents as of the years ended December 31, 2020 and 2019.

	As of
	December 31, 2020		December 31, 2019		$ Change
Cash and cash equivalents	$	–	$	104,070	$	104,070

Summary of Cash Flows

Below is a summary of the Company’s cash flows for the years ended December 31, 2020 and 2019.

	December 31,			December 31,
	2020			2019
Net cash used in operating activities from continuing operations	$	(143,981	)	$	(1,399,397	)
Net cash provided by (used in) operating activities from discontinued operations		1,959			537,158
Net cash used in investing activities from continuing operations		–			(75,000	)
Net cash used in investing activities from discontinued operations		–			(29,755	)
Net cash provided by financing activities from continuing operations		37,952			1,438,184
Net cash used in financing activities from discontinued operations		–			(371,000	)
Net increase in cash and cash equivalents	$	(104,070	)	$	100,190

Operating activities

Net cash used in operating activities was $142,022 for the year ended December 31, 2020, as compared to net cash used in operating activities of $862,239 during the same period in 2019. The current period cash outflows relate to the decrease in operations of the Company during 2020. The Company’s net loss of $1,118,444 included a total of $814,182 of non-cash items.

Investing activities

Net cash used in investing activities was $0 for the year ended December 31, 2020, as compared to net cash used in investing activities of $104,755 during the same period in 2019. The prior year cash used in investing activities related to $75,000 for purchase of equipment, and $29,755 related to discontinued operations of the two businesses disposed of.

Financing activities

Net cash provided by financing activities was $37,952 for the year ended December 31, 2020, as compared to net cash provided by financing activities of $1,067,184 during the same period in 2019. The current period amounts consist of $20,792 in net proceeds from lines of credit and notes payable and $37,000 from a convertible note payable. The Company paid a total of $19,840 against its various debt instruments during the year ended December 31, 2020.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company had incurred substantial losses during the year ended December 31, 2019 and as of December 31, 2019, the Company had a working capital deficit. These factors gave rise to substantial doubt that the Company would continue as a going concern. During the year ended December 31, 2020, the Company had $0 cash and no revenue to meets its ongoing operating expenses, and liabilities of $1,143,158 all of which are due within 12 months, and as of December 31, 2020, the Company still had a working capital deficit; accordingly, the substantial doubt of the Company’s ability to continue as a going concern that existed at December 31, 2019 was not alleviated and is still outstanding at December 31, 2020 and up through the date of this report.

The financial statements for the years ended December 31, 2020 and 2019 have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company anticipates future losses in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and, or, obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with loans or contributions from related parties and, or, the sale of common stock. There is no assurance that this series of events will be satisfactorily completed.

Financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that may be necessary if the Company is unable to continue as a going concern.

Off-Balance Sheet Arrangements

As of December 31, 2020 and December 31, 2019, the Company had no off-balance sheet arrangements.

Unrecognized Tax Benefits

The Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes. The Company has incurred net losses in past years and, therefore, has no tax liability.

The Company reported no uncertain tax liability as of December 31, 2020 and 2019 and expects no significant change to the uncertain tax liability over the next twelve months.

Stock Based Compensation

The Company applies Topic 718 “Share-Based Payments” (“Topic 718”) to share-based compensation, which requires the measurement of the cost of services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Compensation cost is recognized when the event occurs. The Black-Scholes option-pricing model is used to estimate the fair value of options granted.

The Company accounts for equity-based transactions with non-employees under the provisions of ASC Topic No. 505-50, “Equity-Based Payments to Non-Employees” (“Topic No. 505-50”). Topic No. 505-50 establishes that equity-based payment transactions with non-employees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. Prior to the disposal of the Layer Six business, the Company primarily earned revenue from subscription services for its online and mobile cannabis services hub, www.wheresweed.com. This online and mobile service hub allows marijuana business to advertise their location and services offered and allows users of the Company’s website to locate nearby cannabis businesses. As discussed in Note 3, the Company disposed of the Layer Six business in January 2020, and therefore the results of operations, including all revenue, are included in net loss from discontinued operations. With the acquisition of the Infusionz LLC assets in 2019, the Company also recognized revenue from the sales of cannabinoid-based products. The Infusionz business was disposed of in October 2019, and all revenue from the period of ownership of the business is included in net loss from discontinued operations. The Company has also developed an online retail business for CBD, hemp oil and health/wellness related products through the Pura Vida joint venture. The Company has not yet begun to sell inventory products through this online retail business as of December 31, 2020.

Revenue is recognized when control of the services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for the services.

Revenue is recognized based on the following five step model:

- Identification of the contract 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, the Company satisfies a performance obligation

Performance Obligations

The Company generates revenue from sales of cannabinoid products. For contracts with multiple performance obligations, the Company allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. The Company uses an observable price to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach when one is not available. Historically the Company’s contracts have not had multiple performance obligations. Revenue related to the sales of products are recognized at the point in time at which control transfers to the buyer.

Sales, value add, and other taxes collected concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. Payment terms between invoicing and when payment is due is less than one year. As of December 31, 2020, none of the Company’s contracts contained a significant financing component.

The Company elected the practical expedient to not adjust the amount of revenue to be recognized under a contract with an end user for the effects of time value of money when the timing difference between receipt of payment and recognition of revenue is less than one year.

Transaction Price Allocated to the Remaining Performance Obligations

From time to time, the Company may receive payment for sales of its products from a customer before the goods have shipped. This amount is considered a contract liability and is recorded as deferred revenue. At December 31, 2020 and December 31, 2019, the Company had no revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period.

Contract Costs

Costs incurred to obtain a customer contract are not material to the Company. The Company elected to apply the practical expedient to not capitalize contract costs to obtain contracts with a duration of one year or less, which are expensed and included within cost of goods and services.

Critical Accounting Estimates

Estimates are used to determine the amount of variable consideration in contracts, the standalone selling price among separate performance obligations and the measure of progress for contracts where revenue is recognized over time. The Company reviews and updates these estimates regularly.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value of Financial Instruments

As defined in ASC 820” Fair Value Measurements,” fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the use of inputs used in valuation methodologies into the following three levels:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs which reflect a reporting entity’s own assumptions about the assumptions that market participants would use for pricing an asset or liability. For example, level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method.

The following table summarizes fair value measurements by level at December 31, 2020 and December 31, 2019, measured at fair value on a recurring basis:

December 31, 2020	Level 1		Level 2		Level 3		Total
Assets
None	$	–	$	–	$	–	$	–

Liabilities
Derivative liabilities	$	–	$	–	$	301,467	$	301,467

December 31, 2019

Level 1

Level 2

Level 3

Total

Assets

None

–

Liabilities

None

–

The recorded amounts of financial instruments, including cash equivalents, investments, accounts payable, accrued expenses, note payable and loan from related parties approximate their market values as of December 31, 2020 and 2019 due to the intended short-term maturities of these financial instruments.

New Accounting Pronouncements

In preparing the financial statements, management considered all new pronouncements through the date of the report.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02). Under ASU No. 2016-2, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU No. 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. For public companies, The Company adopted this standard on January 1, 2019 using the modified retrospective method. The new standard provides a number of optional practical expedients in transition. The Company elected the ‘package of practical expedients’, which permitted the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs; and all of the new standard’s available transition practical expedients.

On adoption, the Company recognized additional operating liabilities of $102,878, with corresponding Right of Use assets of the same amount based on the present value of the remaining minimum rental payments under current leasing standards for its existing operating leases. Company does not have any leases classified as a finance lease under ASC 842. See Note 7 for additional information on leases.

The new standard also provides practical expedients for a company’s ongoing accounting. The Company elected the short-term lease recognition exemption for its leases. For those leases with a lease term of 12 months or less, the Company will not recognize ROU assets or lease liabilities. The Company also made an accounting policy election to combine lease and non-lease components of operating leases for all asset classes.

In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting, which aligns the accounting for share-based payment awards issued to employees and nonemployees. Under ASU No. 2018-07, the existing employee guidance will apply to nonemployee share-based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attribution of compensation cost. The cost of nonemployee awards will continue to be recorded as if the grantor had paid cash for the goods or services. In addition, the contractual term will be able to be used in lieu of an expected term in the option-pricing model for nonemployee awards. The Company adopted the provisions of the guidance on January 1, 2019 with no material impact on the Company’s consolidated financial statements and disclosures.

The Company does not believe that any other recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 8. Financial Statements and Supplementary Data.

Our financial statements are contained in pages F-1 through F-21, which appear at the end of this Form 10-K Annual Report.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

In connection with the preparation of this Annual Report on Form 10-K for the year ended December 31, 2020, our sole executive officer (who serves as both principal executive officer and principal financial officer) has concluded that our disclosure controls and procedures (as defined in Rules 13a-15(c) and 15d-15(e) under the Exchange Act) are not effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control Over Financial Reporting

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (“ICFR”) for the Company. Our internal control system was designed to, in general, provide reasonable assurance to the Company’s management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020. The framework used by management in making that assessment was the criteria set forth in the document entitled “2013 Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, management concluded that, during the period covered by this report, such internal controls and procedures were not effective as of December 31, 2020 and that material weaknesses in ICFR existed as more fully described below.

A material weakness is a deficiency, or a combination of deficiencies, within the meaning of Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard AS 2201, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the material weaknesses described below which have caused management to conclude that as of December 31, 2020 our internal controls over financial reporting were not effective at the reasonable assurance level.

Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions are being performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties in all of our financially significant processes and have concluded that this control deficiency represented a material weakness.

Notwithstanding the assessment that our ICFR was not effective and that there are material weaknesses as identified herein, we believe that our consolidated financial statements contained in this Annual Report fairly present our financial position, results of operations and cash flows for the years covered thereby in all material respects.

This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm as we are a smaller reporting company and are not required to provide the report.

Changes in Internal Controls

During the fiscal year ended December 31, 2020, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting

Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The names of our executive officers and directors and their age, title, and biography as of September 7, 2021 are set forth below. Our officers and directors serve until their respective successors are elected and qualified.

Name	Age	Position(s)
Stavros A. Triant	45	President, Secretary/ Treasurer, Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer)
John Sosville	47	Director

Background of Officers and Directors

Stavros A. Triant

Mr. Triant has substantial experience in finance, construction, manufacturing, and operations. Prior to joining the Company on January 2017, Mr. Triant served as vice president operations at Granite Financial Group from 1999 to 2004 overseeing options trading, proprietary market making, execution and transactions for small to medium corporations. From 2004 to 2009, Mr. Triant served as president of Pame, LLC, bringing a franchise service company from $300,000 per year to $6 million per year and from one location to five. From 2007 to 2015, Mr. Triant was a founding member and partner in Xarex, LLC, a window manufacturing/fabrication company with three locations and heavy logistical operations. From 2010 to 2012, Mr. Triant served as COO of Isaac Org, a family owned private equity company, tasked with operations and management of investments and negotiating private equity deals up to 50 million dollars. From 2011 to 2012, Mr. Triant served as Director of Operations of Live Ventures Incorporated, a Nasdaq company.

John Sosville

Mr. Sosville has been a member of the Board since September 21, 2018. He is an active Colorado business owner and operator, his current business which he has been Co-Owner and President of since 2016, LawCFO provides outsourced CFO and Managed Accounting Services to Law Firms. Mr. Sosville is also on the board of the Colorado Judicial Institute. John has also operated an M&A Advisory firm Platform Brokerage and his Consulting firm, Consultant Strategies since 2016. Mr. Sosville’s additional experience includes nearly twenty years of strategic and business development work for technology companies. Mr. Sosville is a Colorado licensed real estate broker. He was Executive Vice President of Envision IT Partners, an IT technology consulting firm. He earned his undergraduate degree from Ft. Lewis College. He also attended internationally at the Ecole Supérieure de Commerce International du Pas de Calais (ESCIP) in Longuenesse, France.

Family Relationships

There are no family relationships between any of our directors or executive officers.

Section 16(a) Beneficial Owner Reporting Compliance

Under Section 16(a) of the Exchange Act, all executive officers, directors, and each person who is the beneficial owner of more than 10% of the common stock of a company that files reports pursuant to Section 12 of the Exchange Act, are required to report the ownership of such common stock, options, and stock appreciation rights (other than certain cash-only rights) and any changes in that ownership with the Commission. Specific due dates for these reports have been established, and the Company is required to report, in this Annual Report, any failure to comply therewith during the fiscal year ended December 31, 2019. The Company believes that all of these filing requirements were satisfied by its executive officers, directors and by the beneficial owners of more than 10% of the Company’s common stock except that the following members of the Board of Directors never filed a Form 3 – Nick Kazerouni, Cyrus Raofpur, Vince Trapasso, and John Sosville. Messrs. Kazerouni, Raoufpur, and Trapasso are no longer members of the Board.

Disclosure of Commission Position on Indemnification of Securities Act Liabilities

Our directors and officers are indemnified as provided by the Nevada corporate law and our bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

We have been advised that in the opinion of the SEC indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court’s decision.

Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers has, during the past ten years:

	●	been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

	●	had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

	●	been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;

	●	been found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

	●	been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

	●	been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Except as set forth in our discussion below in “Certain Relationships and Related Transactions,” none of our directors or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

Item 11. Executive Compensation.

The following table summarizes information concerning the compensation awarded to, earned by, or paid to, our Chief Executive Officer (Principal Executive Officer or PEO) and our two most highly compensated executive officers other than the Principal Executive Officer during fiscal years 2020 and 2019 (collectively, the “Named Executive Officers”) who served in such capacities.

Name and Principal Position

Year

Salary ($)

Bonus ($)

Stock Awards ($)

Option Awards ($)

Non-Equity Incentive Plan Compensation ($)

Non-Qualified Deferred Compensation Earnings
($)

All Other Compensation ($)

Total
($)

Stavros Triant

2020

124,849

–

124,849

CEO and CFO

2019

105,518

–

105,518

David Lindauer

2020

–

Former CTO (1)

2019

154,784

–

80,000

–

234,784

Tyler Bartholomew

2020

–

Former CMO (2)

2019

143,364

–

143,364

	1.	Mr. Lindauer resigned as Chief Technology Officer on October 31, 2019 and was removed as a Director of the Company on November 18, 2019.
	2.	Mr. Bartholomew resigned as Chief Marketing Officer on October 31, 2019 and was removed as a Director of the Company on November 18, 2019.

Directors’ Compensation

None of our directors were paid any compensation for their service as directors during the year ended December 31, 2020. Mr. Trapasso resigned as a member of the Board in August 2019 and Messrs. Kazerouni and Raoufpur resigned as members of the Board in February 2020.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table set forth certain information regarding our voting shares beneficially owned as of September 7, 2021 and is based on 571,507,751 shares issued and outstanding, for (i) each stockholder known to be the beneficial owner of 5% or more of our outstanding shares of Common Stock, (ii) each named executive officer and director, and (iii) all executive officers and directors as a group. A person is considered to beneficially own any shares: (i) over which such person, directly or indirectly, exercises sole or shared voting or investment power, or (ii) of which such person has the right to acquire beneficial ownership at any time within 60 days through an exercise of stock options or warrants. Unless otherwise indicated, voting and investment power relating to the shares shown in the tables for our directors and executive officers is exercised solely by the beneficial owner or shared by the owner and the owner’s spouse or children.

For purposes of these tables, a person or group of persons is deemed to have “beneficial ownership” of any shares of Common Stock that such person has the right to acquire within 60 days of January 26, 2021. For purposes of computing the percentage of outstanding shares of our Common Stock held by each person or group of persons, any shares that such person or persons has the right to acquire within 60 days of January 26, 2021 is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership. Unless otherwise indicated, each of the shareholders named in the table below, or his or her family members, has sole voting and investment power with respect to such shares of our Common Stock. Except as otherwise indicated, the address of each of the shareholders listed below is: PO Box 460573, Fort Lauderdale, FL, 33346

The following shows the stock ownership of our officers, directors and any person known to us who owns more than 5% of our common stock as of September 7, 2021.

Name and Address of Beneficial Owner	Common stock Owned Beneficially		Percent of Class		Series A Preferred Stock Owned Beneficially		Percent of Class
Named Executive Officers and Directors
Stavros Triant (1)		320,000,000		56.0%		1		100%
John Sosville		0
All directors and officers as a group (two persons)		320,000,000		56.0%		1		100%

(1)	Shares owned by Filakos Capital Investments, LLC, an entity over which Mr. Stavros has voting and investment control.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Related Party Transactions

The following is a description of each transaction since June 30, 2017 and each currently proposed transaction in which:

	●	we have been or are to be a participant;

	●	the amount involved exceeded the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years; and

	●	any of our directors, executive officers or holders of more than 5% of our outstanding capital stock, or any immediate family member of, or person sharing the household with, any of these individuals or entities, had or will have a direct or indirect material interest.

In May 2018, the Company issued a $70,025 Note payable to Stavros Triant, the Company’s CEO and Chairman. Additionally, $2,000 of expense was paid by the CEO on behalf of the Company. The note was unsecured, with no stated interest rate and is due on demand. During the year ended December 31, 2019, $63,671 was repaid resulting in a balance as of December 31, 2020 and 2019, of $6,117.

At closing of the Layer Six transaction on September 18, 2018, the Company, in connection with the WW Asset Purchase Agreements with WW: (i) issued Mr. Bartholomew 72,443,182 shares of our common stock with a fair value of $3,803,267.06

A company controlled by Mr. Sosville will receive total payments of $500,000 for his representation of the WW Owners in the Layer Six transaction. The Company will pay a total of $100,000 of this amount directly, with $20,000 having been paid at closing, and an additional $10,000 having been paid through December 31, 2018. The remaining $400,000 will be paid by the WW Owners which includes Messrs. Lindauer and Bartholomew. Subsequent to December 31, 2018, the Company paid an additional $19,500 to a company controlled by Mr. Sosville. The remaining $50,500 was forgiven during the fiscal year ended December 31, 2020.

As part of the asset purchase transaction with Infusionz, a company controlled by Mr. Sosville will be paid a fee of $150,000 for his representation of the sellers of Infusionz.

Item 14. Principal Accounting Fees and Services.

Audit Fees. The aggregate fees billed by our independent registered public accounting firm, for professional services rendered for the audit of our annual financial statements for the years ended December 31, 2020 and 2019, including review of our interim financial statements were $20,500 and $53,300, respectively.

Audit Related Fees. We incurred fees to our independent registered public accounting firm of $0 and $0 for audit related fees during the fiscal years ended December 31, 2020 and 2019, respectively, which related to filings with the SEC.

Tax and Other Fees. We incurred fees to our independent registered public accounting firm of $0 for tax and fees during the fiscal years ended December 31, 2020 and 2019.

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a)

The following documents are filed as part of this Annual Report on Form 10-K:

Financial Statements:

Our financial statements and the Report of Independent Registered Public Accounting Firm are included herein on page F-1

Financial Statement Schedules:

The financial statement schedules are omitted as they are either not applicable or the information required is presented in the financial statements and notes thereto on page F-1.

Exhibits:

INDEX TO EXHIBITS

		Incorporated by
Exhibit		Reference		Filed or Furnished
Number	Exhibit Description	Form	Exhibit	Filing Date	Herewith
3.1	Articles of Incorporation, as amended	10-12(g)	3.1	05/01/2019
3.2	Series A Certificate of Designation	10-12(g)	3.2	05/01/2019
3.3	By-laws	10-12(g)	3.3	05/01/2019
3.4	Certificate of Amendment to Amended and Restated Articles of Incorporation, dated September 13, 2018	10-12(g)/A	3.4	07/02/2019
3.5	Certificate of Amendment to Amended and Restated Articles of Incorporation, dated March 6, 2019	10-12(g)/A	3.5	07/02/2019
4.1	Form of 3% Promissory Note issued September 18, 2018, to Tyler Bartholomew, David Lindauer, Bill Anders and Brad Billman	10-12(g)	4.1	05/01/2019
4.2	Form of 3% Promissory Note issued March 8, 2019, to the Owners of Infusionz LLC	10-12(g)	4.2	05/01/2019
4.3	Promissory Note, issued to Infusionz, LLC on October 4, 2019 and effective as of October 4, 2019	8-K	4.1	10/15/2019
4.4	Promissory Note, issued to Infusionz, LLC on October 4, 2019 and effective as of October 4, 2019	8-K	4.2	10/15/2019
10.1	Asset Purchase Agreement by and between the Company and Viath, LLC, dated January 27, 2020				X
21.1	List of Subsidiaries	10-12(g)	21.1	05/01/2019
31.1	Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a))				X
31.2	Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a))				X
32.1	Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X
32.2	Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X
101.INS	XBRL Instance Document				X
101.SCH	XBRL Taxonomy Extension Schema				X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase				X
101.DEF	XBRL Taxonomy Extension Definition Linkbase				X
101.LAB	XBRL Taxonomy Extension Label Linkbase				X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase				X

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Golden Developing Solutions, Inc.

Date: September 9, 2021	By:	/s/ Stavros Triant
		Stavros Triant
		Chief Executive Officer, Chief Financial Officer Secretary, and Treasurer (Principal Executive Officer, Principal Accounting Officer and Principal Financial Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date

/s/ Stavros Triant	Chief Executive Officer, Chief Financial Officer,	September 9, 2021
Stavros Triant	Secretary, Treasurer, and Director

/s/ John Sosville	Director	September 9, 2021
John Sosville

INDEX TO FINANCIAL STATEMENTS

	Page
Reports of Independent Registered Public Accounting Firm	F-2
Consolidated Financial Statements:
Consolidated Balance Sheets at December 31, 2020 and 2019	F-3
Consolidated Statements of Operations for years ended December 31, 2020 and 2019	F-4
Consolidated Statements of Stockholders’ Equity (Deficit) for years ended December 31, 2020 and 2019	F-5
Consolidated Statements of Cash Flows for years ended December 31, 2020 and 2019	F-6
Notes to Consolidated Financial Statements	F-7 - F-21

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To:	The Board of Directors and Stockholders of
	Golden Developing Solutions, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Golden Developing Solutions, Inc., and its subsidiaries (collectively the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for each of the years in two-year period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Emphasis of Matter

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company had incurred substantial losses during the year ended December 31, 2019 and as of December 31, 2019, the Company had a working capital deficit. These factors gave rise to substantial doubt that the Company would continue as a going concern. During the year ended December 31, 2020, the Company continued to incur substantial losses, and as of December 31, 2020, the Company still had a working capital deficit; accordingly, the substantial doubt of the Company’s ability to continue as a going concern that existed at December 31, 2019 was not alleviated and is still out standing at December 31, 2020 and up through the date of this report. Management’s plans to address this substantial doubt is set forth in Note 2. These financial statements do not include any adjustments that might result from the outcome of this uncertainly.

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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ WWC, P.C.

WWC, P.C.

Certified Public Accountants

We have served as the Company’s auditor since 2019.

San Mateo, California

September 8, 2021

F-2

GOLDEN DEVELOPING SOLUTIONS, INC.

CONSOLIDATED BALANCE SHEETS

	December 31			December 31,
	2020			2019
ASSETS
Current assets:
Cash and cash equivalents	$	–		$	104,070

Total current assets		–			104,070

Property and equipment, net		–			75,000
Right of use asset - operating leases		–			866,251
Other assets		–			58,877
Assets held for sale - non current		–			4,520,928

Total assets	$	–		$	5,625,126

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	202,507		$	103,601
Right of use liabilities - operating leases short-term		242,001			262,964
Line of credit		68,829			48,037
Derivative liability		301,467			–
Notes payable - related party		6,117			6,117
Acquisition notes payable - short-term		50,000			100,500
Note payable, net of discount and deferred financing costs		90,214			16,469
Convertible notes payable, net		182,023			113,904
Liabilities held for sale - current		–			3,993,655

Total current liabilities		1,143,158			4,645,247

Right of use liabilities - operating leases, net of current portion		–			667,236

Total liabilities		1,143,158			5,312,483

Commitments and Contingencies		–			–

Stockholders' equity:
Preferred stock, 35,000,000 shares authorized, $0.0001 par value, Series A Preferred stock, 1 share authorized, 1 share issued and outstanding		–			–
Common stock, 4,000,000,000 shares authorized, $0.0001 par value, 541,507,751 and 667,175,901 shares issued and outstanding, respectively		54,150			66,717
Additional paid-in capital		10,579,303			10,956,552
Accumulated deficit		(11,722,355	)		(10,656,370	)

Total stockholders' equity attributable to Golden
Developing Solutions, Inc. stockholders		(1,088,902	)		366,899
Noncontrolling interest		(54,256	)		(54,256	)
Total stockholders' equity		(1,143,158	)		312,643

Total liabilities and stockholders' equity	$	–		$	5,625,126

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

F-3

GOLDEN DEVELOPING SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the years ended December 31, 2020 and 2019

	Year Ended
	December 31, 2020			December 31, 2019
Revenue	$	–		$	–
Cost of revenue		–			–
Gross profit		–			–
Operating Expenses:
Professional fees		134,843			268,378
General and administrative		410,627			1,287,932
Total operating expenses		545,470			1,556,310
Loss From Continuing Operations		(545,470	)		(1,556,310	)
Other Income (Expense)
Loss on lease settlement		(179,684	)		–
Derivative gain (loss)		18,022			–
Interest expense, net		(411,312	)		(122,273	)
Net Loss From Continuing Operations before tax		(1,118,444	)		(1,678,583	)
Income Tax Expense		–			–
Net Loss From Continuing Operations		(1,118,444	)		(1,678,583	)
Net loss from discontinued operations, net of tax		52,459			(7,350,786	)
Net Loss		(1,065,985	)		(9,029,369	)
Net loss attributed to noncontrolling interest		–			51,090
Net Loss Attributed to Golden Developing Solutions, Inc.	$	(1,065,985	)	$	(8,978,279	)
Net loss from continuing operations per share - basic and dilutive	$	(0.00	)	$	(0.00	)
Net loss from discontinued operations per share - basic and dilutive	$	0.00		$	(0.01	)
Weighted average shares outstanding - basic and dilutive		554,779,890			747,880,625

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

F-4

GOLDEN DEVELOPING SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)


	Series A Preferred Stock				Common Stock						Additional Paid-in			Accumulated			Golden Developing Solutions Share of Equity			NonControlling			Total Stockholders' Equity
	Shares		Amount		Shares			Amount			Capital			Deficit			(Deficit)			Interest			(Deficit)


Balance December 31, 2018		1	$	–		544,842,571		$	54,484		$	6,582,320		$	(1,678,091	)	$	4,958,713		$	(3,166	)	$	4,955,547

Common shares issued for cash		–		–		122,333,330			12,233			1,506,867			–			1,519,100			–			1,519,100

Common shares issued for acquisition		–		–		147,250,382			14,725			2,621,057			–			2,635,782			–			2,635,782

Common shares returned and cancelled for business disposal		–		–		(147,250,382	)		(14,725	)		(799,664	)		–			(814,389	)		–			(814,389	)

Stock-based compensation		–		–		–			–			1,045,972			–			1,045,972			–			1,045,972

Net loss		–		–		–			–			–			(8,978,279	)		(8,978,279	)		(51,090	)		(9,029,369	)

Balance December 31, 2019		1		–		667,175,901			66,717			10,956,552			(10,656,370	)		366,899			(54,256	)		312,643

Common shares cancelled for disposition of business		–		–		(170,454,545	)		(17,046	)		(510,227	)		–			(527,273	)		–			(527,273	)

Stock-based compensation		–		–		44,786,395			4,479			132,978			–			137,457			–			137,457

Net loss		–		–		–			–			–			(1,065,985	)		(1,065,985	)		–			(1,065,985	)

Balance December 31, 2020		1	$	–		541,507,751		$	54,150		$	10,579,303		$	(11,722,355	)	$	(1,088,902	)	$	(54,256	)	$	(1,143,158	)

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

F-5

GOLDEN DEVELOPING SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended
	December 31, 2020			December 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss from continuing operations		(1,118,444	)	$	(1,678,583	)
Adjustments to reconcile net loss from continuing operations to net
cash used in operating activities:
Depreciation and amortization expense		–			10,460
Stock-based compensation		137,457			–
Interest expense from increase in convertible notes payable principal		20,000
Derivative (gain) loss		(18,022	)
Amortization of right of use assets - operating leases		72,459			164,999
Amortization of debt discount and deferred financing costs		174,767			92,677
Interest expense from derivative liability in excess of principal		159,212			–
Loss on equipment disposal		75,000			–
Inventory impairment		–			91,931
Loss on lease settlement		193,309			–
Net Changes in:
Other assets		–			(58,877	)
Accounts payable and accrued expenses		160,281			79,046
Right of use liabilities - operating leases		–			(101,050	)
Net cash used in operating activities from continuing operations		(143,981	)		(1,399,397	)
Net cash used in operating activities from discontinued operations		1,959			537,158
Net cash used in operating activities		(142,022	)		(862,239	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		–			(75,000	)
Net cash used in investing activities from continuing operations		–			(75,000	)
Net cash used in investing activities from discontinued operations		–			(29,755	)
Net cash used in investing activities		–			(104,755	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on related party loans		–			(101,171	)
Net proceeds from line of credit		20,792			48,037
Proceeds from notes payable		–			150,000
Payments on notes payable		(19,840	)		(259,200	)
Proceeds from convertible notes payable		37,000			125,000
Payment of deferred financing costs		–			(24,082	)
Payments on acquisition notes payable		–			(19,500	)
Net proceeds from the sale of common shares		–			1,519,100
Net cash used in financing activities from continuing operations		37,952			1,438,184
Net cash used in financing activities from discontinued operations		–			(371,000	)
Net cash provided by financing activities		37,952			1,067,184

NET CHANGE IN CASH AND CASH EQUIVALENTS		(104,070	)		100,190

CASH AND CASH EQUIVALENTS, beginning of period		104,070			3,880

CASH AND CASH EQUIVALENTS, end of period		–		$	104,070

Supplemental disclosures:
Cash paid for income taxes	$	–		$	–
Cash paid for interest	$	–		$	10,900
Noncash activities
Expenses paid by shareholder	$	–		$	37,500
Note payable issued for acquisition	$	–		$	2,400,000
Notes payable issued for disposition of Infusionz business	$	–		$	50,000
Common stock issued for acquisition	$	–		$	2,635,782
Note payable issued for accounts payable	$	75,000		$	–
Right of use assets and operating lease obligations recognized	$	–		$	1,031,250

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

F-6

GOLDEN DEVELOPING SOLUTIONS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business. Golden Developing Solutions, Inc. (the “Company” or “GDS”) was organized as a corporation in Nevada in 1998 as American Associates Group. In 2007 the name was changed to Clean Hydrogen Producers, Ltd before being changed in April of 2017 to Golden Developing Solutions, Inc. The Company has structured itself in 2017 as a cannabis holding company and intends to make additional acquisitions in the industry in the near future.

Use of Estimates in Financial Statement Preparation. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation. The Company prepares its consolidated financial statements on the accrual basis of accounting. The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, all of which have a fiscal year end of December 31. All intercompany accounts, balances and transactions have been eliminated in the consolidation. The Company also consolidates any variable interest entities for which the Company is the primary beneficiary based on whether the Company has the ability to direct the activities that most significantly impact the entities economic performance.

On September 26, 2018, the Company incorporated Tasos Media LLC as a wholly owned subsidiary.

On March 9, 2019, the Company incorporated CBD Infusionz, LLC as a wholly owned subsidiary.

On October 4, 2019, the Company entered into a termination agreement related to its CBD Infusionz business to dispose of the operations of that business. See Note 3 for additional information.

On January 27, 2020, the Company entered into a termination agreement related to its Layer Six acquisition to dispose of the operations of that business. See Note 3 for additional information.

Reclassifications. Certain prior period amounts have been reclassified to conform to the current period financial statement presentation, including the discontinued operations presentation resulting from the sale of the Company’s Infusionz operations in October 2019 and from the sale of the Layer Six business in January 2020. See Note 3.

Inventories. Inventories are stated at the lower of cost or net realizable value, using the first-in, first-out method. The Company reviews its inventory for obsolescence and any inventory identified as obsolete is reserved or written off. The Company’s determination of obsolescence is based on assumptions about the demand for its products, product expiration dates, estimated future sales, and management’s future plans.

F-7

As of December 31, 2020, and December 31, 2019, inventory consists of the following components:

	December 31, 2020		December 31, 2019
Raw materials and supplies	$	–	$	–
Finished products		–		–
Total inventory	$	–	$	–

The Company fully impaired its inventory held by Pura Vida as of December 31, 2019

Goodwill, Intangible Assets, and Long-Lived Assets. Goodwill is carried at cost and is not amortized. The Company tests goodwill for impairment on an annual basis, relying on a number of factors including operating results, business plans, economic projections, anticipated future cash flows and marketplace data. Company management uses its judgment in assessing whether goodwill has become impaired between annual impairment tests according to specifications set forth in ASC 350.

The fair value of the Company’s reporting unit is dependent upon the Company’s estimate of future cash flows and other factors. The Company’s estimates of future cash flows include assumptions concerning future operating performance and economic conditions and may differ from actual future cash flows. Estimated future cash flows are adjusted by an appropriate discount rate derived from the Company’s market capitalization plus a suitable control premium at date of the evaluation.

The financial and credit market volatility directly impacts the Company’s fair value measurement through the Company’s weighted average cost of capital that the Company uses to determine its discount rate and through the Company’s stock price that the Company uses to determine its market capitalization. Therefore, changes in the stock price may also affect the amount of impairment recorded.

The Company recognizes an acquired intangible asset apart from goodwill whenever the intangible asset arises from contractual or other legal rights, or when it can be separated or divided from the acquired entity and sold, transferred, licensed, rented or exchanged, either individually or in combination with a related contract, asset or liability. Such intangibles are amortized over their useful lives. Impairment losses are recognized if the carrying amount of an intangible asset subject to amortization is not recoverable from expected future cash flows and its carrying amount exceeds its fair value.

The Company’s long-lived assets, including intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to its carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset. During the year ended December 31, 2019, the Company recognized an impairment loss of $2,204,160 related to the disposal of its CBD Infusionz business in October 2019, recognized an impairment loss of $3,456,170 related to the Layer Six Divestiture classified as held for sale as of December 31, 2019. See Note 3.

During the year ended December 31, 2019, the Company paid $75,000 towards the purchase of new equipment. The purchase was abandoned as of December 31, 2020; therefore, the deposit of equipment was written off as expense.

Fair Value of Financial Instruments

F-8

The following table summarizes fair value measurements by level at December 31, 2020 and December 31, 2019, measured at fair value on a recurring basis:

December 31, 2020	Level 1		Level 2		Level 3		Total
Assets
None	$	–	$	–	$	–	$	–

Liabilities
Derivative liabilities	$	–	$	–	$	301,467	$	301,467

December 31, 2019

Level 1

Level 2

Level 3

Total

Assets

None

–

Liabilities

None

–

Derivative Financial Instruments

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815. The Company applies the guidance in ASC 815-40-35-12 to determine the order in which each convertible instrument would be evaluated for derivative classification. The Company’s policy is to evaluate for reclassification contracts with the earliest maturity date first.

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.

Revenue Recognition. The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. Prior to the disposal of the Layer Six business, the Company primarily earned revenue from subscription services for its online and mobile cannabis services hub, www.wheresweed.com. This online and mobile service hub allows marijuana business to advertise their location and services offered and allows users of the Company’s website to locate nearby cannabis businesses. As discussed in Note 3, the Company disposed of the Layer Six business in January 2020, and therefore the results of operations, including all revenue, are included in net loss from discontinued operations. With the acquisition of the Infusionz LLC assets in 2019, the Company also recognized revenue from the sales of cannabinoid-based products. The Infusionz business was disposed of in October 2019, and all revenue from the period of ownership of the business is included in net loss from discontinued operations. The Company has also developed an online retail business for CBD, hemp oil and health/wellness related products through the Pura Vida joint venture. The Company has not yet begun to sell inventory products through this online retail business as of December 31, 2020.

F-9

Revenue is recognized when control of the services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for the services.

Revenue is recognized based on the following five step model:

	-	Identification of the contract 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, the Company satisfies a performance obligation

Performance Obligations

Through the Layer Six business, the Company generates revenue from subscriptions to the Company’s online services and sales of cannabinoid products. Subscription revenue is recognized on a ratable basis over the contract term beginning on the date that the service is made available to the customer. For contracts with multiple performance obligations, the Company allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. The Company uses an observable price to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach when one is not available. Historically the Company’s contracts have not had multiple performance obligations. For subscription revenue, the Company’s performance obligations are recognized over a time period equal to the length of the subscription period, which is generally 30 days. Revenue related to the sales of products are recognized at the point in time at which control transfers to the buyer.

Transaction Price Allocated to the Remaining Performance Obligations

The subscription revenue for its website services is collected up front for a 30 day period. At the end of each reporting period, the Company performs a calculation to determine the portion of that period for which services have not yet been provided. From time to time, the Company may receive payment for sales of its products from a customer before the goods have shipped. This amount is considered a contract liability and is recorded as deferred revenue. At December 31, 2020 and December 31, 2019, the Company had no revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period.

Contract Costs

Critical Accounting Estimates

F-10

Cost of Revenue. Cost of revenue includes costs of managed hosting providers and amortization of acquired software-related intangible assets, and personnel related costs associated with hosting our subscription services, maintenance and testing of the platform and providing technical support to customers. Additionally, cost of revenue includes all costs to purchase and assemble the cannabinoid-based products previously sold by the Company prior to the disposition of the Infusionz business.

Selling, General and Administrative Expenses. Selling, general and administrative expenses include advertising and promotional costs and research and development costs. Also included in Selling, general and administrative expenses are share-based compensation, certain warehousing fees, non-manufacturing overhead, personnel and related expenses, rent on operating leases, and professional fees. Advertising and promotional costs are expensed as incurred and totaled $639 and $26,844 in the years ended December 31, 2020 and 2019, respectively.

Stock-Based Compensation. The Company applies Topic 718 “Share-Based Payments” (“Topic 718”) to share-based compensation, which requires the measurement of the cost of services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Compensation cost is recognized when the event occurs. The Black-Scholes option-pricing model is used to estimate the fair value of options granted.

Income Taxes. The Company uses the asset and liability method of accounting for income taxes in accordance with ASC 740-10, “Accounting for 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 available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. ASC 740-10 prescribes a recognition threshold and measurement attribute for the financial statement recognition of a tax position taken or expected to be taken on a tax return. Under ASC 740-10, a tax benefit from an uncertain tax position taken or expected to be taken may be recognized only if it is “more likely than not” that the position is sustainable upon examination, based on its technical merits. The tax benefit of a qualifying position under ASC 740-10 would equal the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all the relevant information. A liability (including interest and penalties, if applicable) is established to the extent a current benefit has been recognized on a tax return for matters that are considered contingent upon the outcome of an uncertain tax position. Related interest and penalties, if any, are included as components of income tax expense and income taxes payable.

Basic Earnings (Loss) Per Share. The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share.” ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Given the net losses of the Company during the years ended December 31, 2020 and 2019, the effects of outstanding stock options were anti-dilutive resulting in basic and diluted loss per weighted average common shares outstanding equal. See Note 6.

Related Parties. The registrant follows ASC 850-10 for the identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20 the Related parties include (a) affiliates of the registrant; (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825 10 15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the registrant; © management of the registrant; (f) other parties with which the registrant may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

F-11

(a)

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include:a) the nature of the relationship(s) involved; (b) description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

During the year ended December 31, 2019, the Company paid $100,288 and $36,000 of consulting fees to a company controlled by a Director of the Company.

Recently Issued Accounting Standards.

In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 71–) - Improvements to Nonemployee Share-Based Payment Accounting, which aligns the accounting for share-based payment awards issued to employees and nonemployees. Under ASU No. 2018-07, the existing employee guidance will apply to nonemployee share-based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attribution of compensation cost. The cost of nonemployee awards will continue to be recorded as if the grantor had paid cash for the goods or services. In addition, the contractual term will be able to be used in lieu of an expected term in the option-pricing model for nonemployee awards. The Company adopted the provisions of the guidance on January 1, 2019 with no material impact on the Company’s consolidated financial statements and disclosures.

NOTE–2 - GOING CONCERN AND LIQUIDITY

F-12

NOTE 3 – ACQUISITIONS AND DIVESTITURES

Layer Six Divestiture

On January 27, 2020 (the “Closing Date”) the Company entered into an Asset Purchase Agreement (the “Layer Six Sale Agreement”) with Viath, LLC, a Colorado limited liability company (“Viath”) controlled by the original sellers of Layer Six, whereby the Company agree to sell the assets and liabilities associated with the Layer Six business.

The Termination Agreement provides that the Company will sell all of the Layer Six assets to Viath, along with release from all claims and certain litigation. The Termination Agreement also provides for the termination of the Employment Agreements between the Company and each of David Lindaur and Tyler Batholomew and Bill Anders.

The Layer Six Sale Agreement also provides that the associated members of Layer Six will return the 170,454,545 shares of common stock consideration granted to them pursuant to the Asset Purchase Agreement. The fair value of the stock consideration to be returned to the Company is approximately $477,273 at the time of the Sale Agreement. These shares were returned to the Company and cancelled in February 2020.

As a result of this Termination Agreement, the assets and liabilities of the Layer Six operations have been reflected as assets and liabilities held for sale in the Company’s consolidated balance sheets as follows:

	As of December 31, 2019
Property and Equipment, net	$	5,191
Intangible assets, net		2,985,271
Goodwill		1,530,466
Assets held for sale		4,520,928

Accounts Payable and accrued expenses		560,666
Acquisition notes payable		3,432,989
Liabilities related to assets held for sale	$	3,993,655

The Layer Six Termination Agreement qualifies as a discontinued operation in accordance with U.S. GAAP. As a result, operating results and cash flows related to the Infusionz operations have been reflected as discontinued operations in the Company’s condensed consolidated statements of operations, condensed consolidated statements of cash flows and condensed consolidated statements of other comprehensive income/loss for the periods presented.

During the year ended December 31, 2019, the Company recorded an impairment loss on its goodwill balance related to the Layer Six Acquisition of $3,456,170, based on an analysis of the consideration received in January 2020 related to the Sale agreement.

Infusionz Acquisition

In March 2019, the Company purchased the assets of CBD Infusionz, LLC, a Colorado based company. The transaction was accounted for as a business combination.

The aggregate consideration for the Infusionz Acquisition was as follows:

	Amount
147,250,382 shares of common stock	$	2,635,782
Note payable		2,400,000
Total consideration transferred	$	5,035,782

F-13

The note payable was unsecured, bears interest at 3% per year and is due in 24 equal monthly installments beginning in June 2019. The Company paid $100,000 on this note during the year ended December 31, 2019, and the Company was in default of this obligation as of December 31, 2019. Interest accrues at 15% per year in the event of default.

In conjunction with the Infusions Acquisition, the Company agreed to fund the new subsidiary with $300,000 of cash, with $150,000 provided during the year ended December 31, 2019. These transactions were recorded as intercompany transactions and eliminate upon consolidation. The Company entered into an employment with two employees of CBD Infusionz. The employees were to receive a combined total salary of $270,000 per year over the two-year term of the agreement, with automatic one-year renewals thereafter. The Company issued a total 112,994,350 stock options with exercise prices of $0.018 to two employees of Infusionz LLC, with half vested immediately upon execution of the agreement, and the remainder vesting monthly over a two-year term. The options had a 10-year exercise period, and an exercise price based on the closing price of the Company’s stock at the execution of the agreement. See Note 6.

The employment agreements also provide for combined earn out payments of up to $2,000,000 over a period of four years depending on sales targets being met, with $500,000 in each of the four years. The Company determined that these payments qualified as compensation for future services of the sellers.

As part of the acquisition, a company controlled by a Director of the Company will be paid a fee of $150,000 by the sellers of Infusionz, LLC for representation of the sellers of Infusionz, LLC. The $150,000 fee is related to an agreement between the sellers of Infusionz, LLC and the director for brokering the sale of their business. The entire fee of $150,000 is included as part of the purchase price and not recorded as an expense. The Company did not incur any portion of this broker fee and did not receive any benefit from the services provided by this individual to earn the fee.

The following information summarizes the allocation of the fair values assigned to the assets at the purchase date:

	Amount			Useful Life (years)
Equipment, computers and furniture	$	29,429			3
Inventory		90,733			n/a
Right of use assets – operating leases		23,315			n/a
Goodwill		4,915,620			n/a
Right of use liabilities – operating leases		(23,315	)		n/a
Net assets acquired	$	5,035,782

Infusionz Divestiture

The Termination Agreement provides that the Company will return all of Infusionz’s assets to Infusionz and will transfer and assign leases for three properties in Colorado (two in Denver and one in Lakewood) to Infusionz. The Termination Agreement also provides for the termination of the Employment Agreements between the Company and each of Nathan Weinberg and Joe Reid.

The Termination Agreement provides that Infusionz and all associated members returned the 147,250,382 shares of common stock consideration granted to them pursuant to the Asset Purchase Agreement., which were cancelled. Additionally, the stock options previously awarded to certain employees of CBD Infusionz described above were cancelled. The fair value of the stock and option consideration returned to the Company was $814,389. The Termination Agreement provides that Infusionz will release the Company from the promissory note issued as payment for the assets pursuant to the Asset Purchase Agreement (the “Original Note”) and any and all obligations therein. The Termination Agreement provides that the Company will issue two unsecured promissory notes to Infusionz each in the principal amount of $25,000 with neither of these notes being convertible (the “Notes”). The Termination Agreement further provides that the Company will assign, and Infusionz will assume, certain assets and contracts as defined therein.

F-14

The Notes became effective as of the Closing Date, and both Notes are due and payable on December 31, 2019 (the “Maturity Dates”). The Notes entitles Infusionz to 3% interest per annum. Upon an Event of Default (as defined in the Notes), the Notes entitle Infusionz to interest at the rate of 15% per annum. The Company may prepay the principal outstanding together with accrued and unpaid interest in whole or in part at anytime without penalty or premium pursuant to the terms of the Notes. In the event of a default, without demand, presentment or notice, the Note shall become immediately due and payable. The Company is currently in default of these agreements.

As a result of this Termination Agreement, the assets and liabilities of the Infusionz operations that were transferred to the sellers of CBD Infusionz were as follows:

Accounts Receivable	$	67,485
Inventory		221,284
Due from Sellers of CBD Infusionz, LLC		143,791
Property and Equipment, net		50,185
Goodwill		2,711,460
Accounts Payable and accrued expenses		(73,983	)
Acquisition notes payable		(2,300,000	)
Other Liabilities		(15,000	)
Net assets disposed	$	805,222

The Infusionz Termination Agreement qualified as a discontinued operation in accordance with U.S. GAAP. As a result, operating results and cash flows related to the Infusionz operations have been reflected as discontinued operations in the Company’s consolidated statements of operations, consolidated statements of cash flows and consolidated statements of other comprehensive income/loss for the periods presented.

During the year ended December 31, 2019, the Company recorded an impairment loss on its goodwill balance related to the Infusionz Acquisition of $2,204,160, based on an analysis of the consideration received in October 2019 related to the Termination agreement.

Components of amounts reflected in the Company’s consolidated statements of operations related to discontinued operations discussed above are presented in the following table for the years ended December 31, 2020 and 2019:

	Year Ended		Year Ended
	December 31, 2020		December 31, 2019
Revenue	$	28,970	$	3,083,027
Cost of Revenue		-		(1,537,235	)
Gross Profit		28,970		1,545,792
Selling, general and administrative		27,011		2,404,861
Impairment loss		-		2,204,160
Operating gain(loss)	$	1,959	$	(3,063,229	)
Gain on extinguishment of liabilities		50,500		-
Interest expense		-		(38,753	)
Net income (loss) from discontinued operations	$	52,459	$	(3,101,982	)

NOTE 4 – DEBT

Notes Payable

During the year ended December 31, 2018, the Company entered into a future revenue financing arrangement. The Company received $50,000 in cash proceeds and must repay $70,000. Payments are withdrawn from the Company’s bank account on a daily basis in the amount of $292 per day and are secured by the future revenue of the Company. The Company recorded a debt discount of $20,000 and paid deferred financing costs of $3,499 during the year ended December 31, 2018. The loan was paid in full during the year ended December 31, 2019, and the Company amortized remaining debt discount of $19,167 and deferred financing fees of $3,395 through the repayment date.

F-15

On January 29, 2019, the Company entered into a future revenue financing arrangement. The Company received $50,000 in cash proceeds and must repay $71,500. Payments are withdrawn from the Company’s bank account on a daily basis in the amount of $550 per day and are secured by the future revenue of the Company. The Company recorded a debt discount of $21,500 and paid deferred financing costs of $3,544. The loan was paid in full during the year ended December 31, 2019, and the Company amortized remaining debt discount of $21,500 and deferred financing fees of $3,544 through the repayment date.

On July 3, 2019, the Company entered into a future revenue financing arrangement. The Company received $100,000 in cash proceeds and must repay $139,000. Payments are withdrawn from the Company’s bank account on a daily basis in the amount of $993 per day and are secured by the future revenue of the Company. The Company recorded a debt discount of $39,000 and paid deferred financing costs of $5,038. The Company made repayments of $19,840 and $57,594 during the year ended December 31, 2020 and 2019 respectively. The company has amortized $2,985 and $17,709 of debt discount and $386 and $2,388 of deferred financing costs for the years ended December 31, 2020 and 2019 respectively. As of December 31, 2020, outstanding principal on this note was $0, unamortized debt discount was $0 and unamortized deferred financing costs were $0.

During 2020, the Company entered into a note payable agreement with a vendor related to $75,000 of accounts payable. The note bears interest at 10% per annum and is due on demand.

Notes Payable related party

In May of 2018, the Company issued a $70,025 Note payable to a related party for cash proceeds received. The related party also paid $2,000 of expense on behalf of the Company. The note was unsecured, with no stated interest rate and is due on demand. During the year ended December 31, 2019, $63,671 was repaid resulting in a balance of $6,117 as of December 31, 2020 and 2019.

Line of Credit

In September 2019, the Company entered into a line of credit with an available amount of $96,300. The line of credit matures in September 2020, and the Company may pay interest of up to $12,000. The Company has net borrowings of $82,454 outstanding as of December 31, 2020. In April 2020, the line of credit was terminated, and in February 2021, the CEO of the Company paid $25,200 on behalf of the Company to settle the current balance, including accrued interest, of $83,817 in full on behalf of the Company.

Convertible Debt

On September 18, 2019, the Company entered into an unsecured convertible promissory note, with a principal amount of $125,000. The Company received net cash proceeds of $109,500 after payment fees of $15,500. The convertible note bears interest at 10% and matures on September 18, 2020, with interest accruing at a rate of 18% if the Company is in default. Beginning six months after the issuance of the note, the holder may convert the note at any time through the maturity date into shares of common stock, to the extent and provided that no holder of these notes was or will be permitted to convert such notes to the extent that the holder or any of its affiliates would beneficially own in excess of 4.99% of the Company’s common stock after such conversion. The conversion price is determined based on 65% of the three lowest trading prices during the 20 trading days prior to the conversion date. Accrued interest may be converted into shares of common stock using the same conversion price. Unamortized deferred financing costs were $0 as of December 31, 2020 related to this convertible note, with $11,096 of amortization of debt discount during the year ended December 31, 2019.

The Company evaluated the embedded conversion feature within the above convertible promissory note under ASC 815-15 and ASC 815 -40 and determined embedded conversion feature does meets the definition of a liability on the date the note became convertible. The Company accounted for the intrinsic value of Conversion Feature inherent to the convertible promissory note utilizing Black-Scholes model with volatility, measurement date Treasury yield curve rate of one-year or six-month bond, closing stock price, convertible period, and conversion price as inputs. A total debt discount of $117,758 was recorded along with a day one derivative loss of $141,042. Unamortized debt discount costs were $0 as of December 31, 2020 related to this convertible note.

On January 14, 2020, the Company entered into an unsecured convertible promissory note, with a principal amount of $40,000. The Company received net cash proceeds of $37,000 after payment of fees of $3,000. The convertible note bears interest at 10% and matures on January 14, 2021, with interest accruing at a rate of 22% if the Company is in default. Beginning six months after the issuance of the note, the holder may convert the note at any time through the maturity date into shares of common stock, to the extent and provided that no holder of these notes was or will be permitted to convert such notes to the extent that the holder or any of its affiliates would beneficially own in excess of 4.99% of the Company’s common stock after such conversion. The conversion price is determined based on 61% of the lowest trading price during the 20 trading days prior to the conversion date. Unamortized discount was $0 as of December 31, 2020. During the year ended December 31, 2020, the Company was in default of the agreement and incurred an additional $20,000 of principal, which was recorded as interest expense.

F-16

The Company evaluated the embedded conversion feature within the above convertible promissory note under ASC 815-15 and ASC 815 -40 and determined embedded conversion feature does meets the definition of a liability on the date the note became convertible. The Company accounted for the intrinsic value of Conversion Feature inherent to the convertible promissory note and a total debt discount of $39,131 was recorded along with a day one derivative loss of $21,558. Unamortized debt discount costs were $2,977 as of December 31, 2020 related to this convertible note.

NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS

As defined in ASC 820” Fair Value Measurements,” fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

The following table summarizes fair value measurements by level at December 31, 2020 and December 31, 2019, measured at fair value on a recurring basis:

December 31, 2020	Level 1		Level 2		Level 3		Total
Assets
None	$	–	$	–	$	–	$	–

Liabilities
Derivative liabilities	$	–	$	–	$	301,467	$	301,467

December 31, 2019

Level 1

Level 2

Level 3

Total

Assets

None

–

Liabilities

None

–

Short-term instruments, including cash, accounts payable and accrued expenses, line of credit, and short-term notes are measured at amortized cost which is approximate fair value due to the relatively short period to maturity for these instruments.

NOTE 6 - DERIVATIVE LIABILITIES

As discussed in Note 4 – Convertible Notes Payable, the Company analyzed the conversion features of the agreements for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to a variable conversion rate. The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the notes and recorded a derivative liability.

The embedded derivatives for the notes are carried on the Company’s balance sheet at fair value. The derivative liability is marked- to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change.

F-17

The fair value of the embedded derivatives for the notes were determined using the Black-Scholes option pricing model based on the following assumptions during the fiscal year ending December 31, 2020: (1) dividend yield of 0%, (2) expected volatility ranging from 203% - 242%, (3) risk- free interest rate ranging from 0.09% – 0.16%, (4) expected life 0.5 - 1 year, and (5) estimated fair value of the Company’s common stock ranging from $0.0015 - $0.0018 per share. The instrument was fair valued on the date it became convertible and the period end date of December 31, 2020.

The table below presents the change in the fair value of the derivative liability:

Fair value as of December 31, 2019	$	–
Fair value on the date of issuance recorded as debt discounts		156,889
Day 1 loss		162,600
Gain on change in fair value of derivatives		(18,022	)
Fair value as of Current period end	$	301,467

NOTE 5 – STOCKHOLDERS’ EQUITY

In March 2019, the Board of Directors of the Company amended the Company’s articles of incorporation to increase the authorized common shares to 975,000,000. On July 17, 2019, the Board of Directors approved the below Corporate Actions and recommended to the stockholders of the Company that they approve the Corporate Actions. On July 17, 2019, a majority of the Company’s stockholders, approved the following actions:

The granting of discretionary authority to the Board, at any time or times for a period of 12 months after the date of the Written Consent, to adopt an amendment to the Certificate, to effect a reverse stock split at a ratio of a minimum of 1 to 5 and a maximum of 1 to 500, such ratio to be determined by the Board, or to determine not to proceed with the reverse stock split (the “Reverse Stock Split”); and

The approval of an amendment to the Certificate increasing the number of shares of Common Stock the Company is authorized to issue from 975,000,000 to 4,000,000,000 as provided for herein (the “Increase in Authorized Shares”, and together with the Reverse Stock Split, the “Corporate Actions”).

The Reverse Stock Split has not been executed to date.

During the year ended December 31, 2019, the Company issued 122,333,330 shares of common stock in exchange for cash proceeds of $1,519,100. The Company also issued 147,250,382 shares of common stock to the sellers of the CBD Infusionz, with a fair value of $2,635,782. As part of the Termination Agreement signed in October 2019, 147,250,382 of these shares were returned to the Company and cancelled.

The Company was also due to issue 4,210,526 shares to a seller of the Layer Six business, which were not issued during the year ended December 31, 2019. The Company recognized $80,000 of expense during the year ended December 31, 2018 related to these shares which vested on January 1, 2019. The Company recognized an additional $80,000 of stock-based compensation expense during the year ended December 31, 2019 for shares to be issued to this employee that will vest on January 1, 2020. The shares were not issued, and the employee no longer has a right to the shares as a result of the Layer Six Divestiture.

In February 2020, the Company entered into a financial advisory and placement services, whereby the service provider will receive $15,000 per month of cash for a period of 18 months and an award of 20,000,000 shares of common stock, which were issued on February 28, 2020, with a fair value of $52,000. The service provider will also earn a placement fee from any fundraising efforts closed through any financing source it introduces to the Company, equal to 10% of the gross amount of investment, payable in cash.

On February 28, 2020, the Company issued a total of 44,786,395 shares of common stock to a consulting firm for investor relations services rendered, with a fair value of $99,094.

During the year ended December 31, 2020, the Company agreed to issue 42,626,221 shares with a fair value of $38,364 to a former employee for past due compensation. The shares have not yet been issued.

F-18

Stock Options

As discussed in Note 3, the Company committed to awarding a total of 112,994,350 stock options to two employees of Infusionz LLC as part of their employment agreements with the Company. The options have an exercise price based on the closing price at the vesting date, a term of 10 years, with half awarded and vesting at issuance and the remainder vesting in equal monthly installments over a two-year period from the acquisition date. During the year ended December 31, 2019, a total of 74,341,809 options vested, with a fair value of $965,972 estimated using the Black-Scholes option pricing model and the following assumptions: volatility of between 69.1% and 70.25% based on a comparable company peer group, expected term of 10 years, risk-free rate of between 1.5% and 2.6%, and a dividend yield of 0%.

As part of the Termination Agreement discussed in Note 3, these options were cancelled entirely, and no further options can be earned by the two former employees.

The following summarizes stock option activity during the year ended December 31, 2019:

Stock Options

Weighted
Average
Exercise
Price

Weighted
Average
Grant Date
Fair Value

Outstanding at December 31, 2018

–

Granted

74,341,809

0.017

0.013

Cancelled

(74,341,809

)

(0.017

)

(0.013

)

Expired

–

Exercised

–

Outstanding at December 31, 2019

–

Exercisable at December 31, 2019

–

During the year ended December 31, 2020 the company did not award any stock options.

Series A Preferred Stock

During the year ended December 31, 2018 the Company sold 1 share of Series A Preferred Stock in exchange for $232,500. Each share of Series A Preferred Stock has the voting rights of 350,000,000 shares. The Series A Preferred stock has no liquidation preference, and is not entitled to any dividends paid to common stockholders.

NOTE 6 – INCOME TAXES

The Company reported no uncertain tax liability as of December 31, 2020 and expects no significant change to the uncertain tax liability over the next twelve months.

The cumulative net operating loss carryforward is approximately $2,919,000 at December 31, 2020 and will expire beginning in the year 2037.

	December 31, 2020			December 31, 2019

Deferred tax asset	$	613,000		$	490,000
Valuation allowance		(613,000	)		(490,000	)

Net deferred tax asset	$	–		$	–

F-19

NOTE 7 - LEASES

The Company has operating leases for its administrative offices. For purposes of calculating operating lease liabilities, lease terms may be deemed to include options to extend the lease when it is reasonably certain that the Company will exercise those options. Some leasing arrangements require variable payments that are dependent on usage, output, or may vary for other reasons, such as insurance and tax payments. The variable lease payments are not presented as part of the initial ROU asset or lease liability. The Company’s lease agreements do not contain any material restrictive covenants.

At adoption of ASC 842, the Company recognized right of use assets and liabilities for operating leases of $102,878 related to its office space lease, which has a monthly payment of $4,134 and expires in March 2021. As part of the Infusionz Acquisition, the Company assumed the business’ operating lease for warehouse space. The Company recognized preliminary estimates of the right of use assets and liabilities related of this operating lease of $23,315. The lease has a monthly payment of $4,000 through August 31, 2019. The Infusionz business also has two rental agreements with total payments of $3,800 per month with month to month terms. In April 2018, Pura Vida Vitamins LLC entered into a month to month rental agreement for office space for $1,000 per month.

During the year ended December 31, 2019, the Company entered into a real estate lease for office and warehouse space in Colorado. The lease has monthly payments ranging from approximately $19,500 to $23,700 over the lease term of 54 months. The Company has an option to acquire the leased premises at the conclusion of the lease for a purchase price of $3,500,000. Under ASC 842, this lease was determined to be an operating lease, and a right of use asset and lease liability of $928,372 was recognized at commencement of the lease. The Company did not consider the purchase option to be reasonably certain of exercise in its analysis of the lease. The Company paid a security deposit of $58,749 at commencement, along with first and last month’s rent, for a total of $102,000. During the year ended December 31, 2020, the Company was notified by its landlord to vacate the premises and lost the use of the asset. The landlord subleased the property and agreed to accept one year of payments as final settlement of the lease. The Company recognized a loss on settlement of $172,740 related to this lease.

During the year ended December 31, 2020, the Company agreed to settle an existing lease in exchange for a note payable of $15,214, which bears interest at 10% or 22% in the event of default. As of the date of this report, the Company is in default of this note. The Company recognized a loss on settlement of $6,944 related to this agreement.

The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheet at December 31, 2020 and 2019:

Lease Position	December 31, 2020		December 31, 2019

Operating lease right-of-use assets	$	–	$	866,251
Right of use liability operating lease short term	$	242,001	$	262,964
Right of use liability operating lease long term		–	$	667,236
Total operating lease liabilities	$	242,001	$	1,796,451

The Company recognized operating lease cost of $72,459 and $113,807 for the years ended December 31, 2020 and 2019, respectively. The Company utilizes the incremental borrowing rate in determining the present value of lease payments unless the implicit rate is readily determinable.

The following table provides the maturities of lease liabilities at December 31, 2020:

Maturity of Lease Liabilities at December 31, 2020	Operating Leases
2021	$	242,001
2022		–
2023		–
2024		–
2025		–
2026 and thereafter		–
Total future undiscounted lease payments	$	242,001
Less: Interest		–
Present value of lease liabilities	$	242,001

F-20

At December 31, 2020, the Company had no additional leases which had not yet commenced.

NOTE 8 - CONTINGENCIES

Certain disputes have arisen including former affiliates of the Company. In summary: on or about September 2018, the Company acquired (the “Sale”) certain assets, promises and representations from Layer Six Media and its four individual owners, at least two of whom, Messrs. Bartholomew and Lindauer became directors and employees of the Company (collectively, for this summary, the “Sellers”). It is the Company belief that the individuals departed from their positions and efforts with the Company some time past only realizing recently the legal effect of their activities and actions including not completing obligations as Sellers and obtaining and utilizing assets of the Company in contravention of agreements, instruments and laws. The objectionable activities included an attorney that had done work for the Company, but also for the others noted. The Company is taking a series of civil legal actions and seeking non-civil assistance in relation to the authorities and this includes, among other actions either underway or to be undertaken shortly, late October, early November, a case filed by the Company against certain of the Sellers and the lawyer in Washington D.C. Superior Court, alleging, among other things, fraud, breach of contract, and conversion. Layer Six Media and certain related parties, the “Sellers” noted above, filed a Colorado, Denver District Court, legal action against the Company, early November 2019, which the Company just recently became aware of, claiming breach of contract, and other allegations, seeking monetary damages allegedly owed in relation to payments allegedly due as to the original Sale. The Company has engaged and consulted lawyers and advisors and provides this disclosure though it does not believe, in the totality of the Company growth plans, solid legal grounds it will prevail, and other aspects, that it will not experience any adverse legal effect from such litigation and litigation related events.

The litigation involving Layer Six Media was dismissed following the Company entering into a sales agreement with Viath LLC. See Note 3.

NOTE 9 - SUBSEQUENT EVENTS

The Company evaluates subsequent events that have occurred after the balance sheet date of December 31, 2020 and up through September 7, 2021, which is the date that these financial statements are available to be issued. 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.

In March 2021, the Company entered into a Senior Secured convertible promissory note for an aggregate principal amount of $588,235. The note had an original issue discount of $88,235, bears interest at the greater of Prime plus 8% or 14%. The cash proceeds are to be distributed in tranches, with the first tranche of $65,000 being advanced in March 2021, with $15,000 of the amount paying legal fees related to the note payable. Each tranche has a maturity date of 9 months from the date of funding of that tranche. The principal and accrued interest are convertible into shares of the Company’s common stock at a fixed price of $0.002. In the event of default, the conversion price will be 60% of the lowest intraday rice during the previous 21 days from conversion. If the Company issues or sells common stock or any instrument that is convertible or exercisable into common stock at a price less than the fixed conversion price, the fixed conversion price shall be reset to such lower price. The holder of these notes is not permitted to convert such notes to the extent that the holder or any of its affiliates would beneficially own in excess of 4.99% of the Company’s common stock after such conversion.

The Company issued 30,000,000 shares of stock to the lender as a deferred finance cost and granted a warrant to purchase 25,000,000 shares of common stock at a fixed price of $0.006 for a period of 10 years. If the Company issues or sells common stock or any instrument that is convertible or exercisable into common stock at a price less than the fixed conversion price, the fixed conversion price shall be reset to such lower price. The lender will receive an additional 25,000,000 warrants upon fully funding the convertible note payable.

In April 2020, the Company’s line of credit was terminated by the lender. In February 2021, the Company’s CEO paid $25,200 to settle the current balance, including accrued interest, of $83,817 in full on behalf of the Company.

As of September 7, there were 571,507,751 shares of common stock outstanding.

F-21

Golden Developing Solutions, Inc. - FORM 10-K - September 9, 2021

Attached files

Golden Developing Solutions, Inc. Reports