GZ6G Technologies Corp 10-K for FY2022

GZ6G Technologies Corp. (GZIC)

10-K 2023-04-17 For: 2022-12-31

Added on April 06, 2026

About this 10-K

GZ6G Technologies Corp filed this 10-K on April 17, 2023, covering the fiscal year ended December 31, 2022 (FY2022).

Headline figures

Fiscal year ended December 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $221.95K; up 184.5% from $78K a year earlier
Net loss: $6.87M; compared with a net loss of $10.03M a year earlier

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Nevada		20-0452700
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1 Technology Drive, Bldg B, Suite no. B123 Irvine, CA		92618
(Address of principal executive offices)		(Zip Code)

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

GZ6G Technologies Corp. TABLE OF CONTENTS
		Page
	PART I

Item 1.	Business	2
Item 1A	Risk Factors	16
Item 1B	Unresolved Staff Comments	16
Item 2	Properties	17
Item 3	Legal Proceedings	17
Item 4	Mine Safety Disclosures	17

	PART II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	18
Item 6.	[Reserved]	18
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	23
Item 8.	Financial Statements and Supplemental Data	F-1
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	24
Item 9A	Controls and Procedures	24
Item 9B	Other Information	25
Item 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	25

	PART III
Item 10	Directors, Executive Officers and Corporate Governance	26
Item 11	Executive Compensation	29
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	31
Item 13	Certain Relationships and Related Transactions and Director Independence	33
Item 14	Principal Accountant Fees and Services	38

	PART IV
Item 15	Exhibits and Financial Statement Schedules	39
Item 16	Form 10-K Summary

	SIGNATURES	42

Damages	$	61,890
Prejudgment interest at the annual rate of 10%		9,835
Attorney fees		1,200
Other costs		505
	$	73,430

	Year Ended December 31,
	2022			2021

NET REVENUES	$	221,946		$	78,000

OPERATING EXPENSES
Cost of revenue		18,276			43,121
Depreciation		125,424			20,429
General and administrative		2,957,041			963,068
General and administrative, related parties		480,000			330,000
Professional fees		95,509			99,099
Total operating expenses		3,676,250			1,455,717

(Loss) from operations		(3,454,304	)		(1,377,717	)

Other income (expense)
Interest expense		(7,094,839	)		(8,051,277	)
Gain (loss)		3,575,831			(714,973	)
PPP loan forgiveness		46,091			-
Total other income (expense)		(3,472,917	)		(8,766,250	)

Net income (loss)	$	(6,927,221	)	$	(10,143,967	)

Less: net income (loss) attributable to Non-controlling interest		(56,201	)		(112,359	)
Net income (loss) attributable to GZ6G Technologies Corp.	$	(6,871,020	)	$	(10,031,608	)

	December 31, 2022			December 31, 2021
Net cash used in operating activities	$	(2,514,937	)	$	(1,369,844	)
Net cash used in investing activities		(77,909	)		(251,993	)
Net cash provided by financing activities		2,340,207			2,201,084
Increase (decrease) in cash		(252,639	)		579,247
Cash end of year	$	507,152		$	759,791

	Page
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 6117)	F-2 - F-3

Consolidated Balance Sheets	F-4

Consolidated Statements of Operations	F-5

Consolidated Statement of Changes in Stockholders’ Deficit	F-6

Consolidated Statements of Cash Flows	F-7

Notes to Consolidated Financial Statements	F-8 to F-26

	December 31, 2022			December 31, 2021
ASSETS
Current assets
Cash	$	507,152		$	759,791
Accounts receivable, net		59,845			2,000
Prepaid expenses		49,174			18,586
Other current assets		15,949			15,949
Total current assets		632,120			796,326

Property and equipment, net		187,661			235,176
Right of use assets		552,951			98,093
TOTAL ASSETS	$	1,372,732		$	1,129,595

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued expenses	$	565,857		$	335,037
Related party payables		417,151			179,769
Deferred revenue		172,000			209,000
Debt, current portion		3,767			44,156
Debt, related parties		1,440,825			1,065,725
Convertible notes, net of debt discount		6,847,121			5,075,840
Lease liability, current portion		91,604			99,003
Total current liabilities		9,538,325			7,008,530

Debt, net of current portion		44,000			44,000
Lease liability, net of current portion		482,290			-
Total liabilities		10,064,615			7,052,530

Stockholders’ deficit
Series A Preferred stock, $0.004 par, 10,000,000 shares authorized, 5,000,000 shares issued and outstanding		20,000			20,000
Series B Preferred stock, $0.001 par, 1 share authorized, 1 share issued and outstanding		-			-
Common stock, $0.001 par, 1,000,000,000 shares authorized, 70,837,511 and 25,177,973 shares issued and outstanding at December 31, 2022 and 2021, respectively		70,837			25,178
Additional paid in capital		14,896,922			10,784,308
Accumulated deficit		(22,963,551	)		(16,092,531	)
Total GZ6G Technologies Corp stockholders’ deficit		(7,975,792	)		(5,263,045	)
Non-controlling interest		(716,091	)		(659,890	)
Total stockholders’ deficit		(8,691,883	)		(5,922,935	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	1,372,732		$	1,129,595


	Series A Preferred Stock				Series B Preferred Stock				Common Stock				Additional Paid-in			Accumulated			Non- controlling			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Interest			Deficit
Balance, December 31, 2020		5,000,000	$	20,000		1	$	-		12,793,357	$	12,793	$	5,180,816		$	(6,060,923	)	$	(680,180	)	$	(1,527,494	)

Shares issued to acquire additional interest in subsidiary		-		-		-				10,000,000		10,000		(142,649	)		-			132,649			-
Discount on debt, convertible notes issued		-		-		-		-		-		-		504,027			-			-			504,027
Convertible note proceeds allocated to warrants		-		-		-		-		-		-		503,973			-			-			503,973
Warrants issued as financing cost		-		-		-		-		-		-		25,141			-			-			25,141
Issuance of common stock for debt conversion		-		-		-		-		2,051,282		2,052		4,613,333			-			-			4,615,385
Issuance of common stock for private placement		-		-		-		-		333,334		333		99,667			-			-			100,000
Loss during the period		-		-		-		-		-		-		-			(10,031,608	)		(112,359	)		(10,143,967	)
Balance, December 31, 2021		5,000,000	$	20,000		1	$	-		25,177,973	$	25,178	$	10,784,308		$	(16,092,531	)	$	(659,890	)	$	(5,922,935	)

Discount on debt, convertible notes issued				-										792,824									792,824
Convertible note proceeds allocated to warrants				-										606,142									606,142
Warrants issued as financing cost				-										707,985									707,985
Shares issued as financing cost										10,769		11		22,388									22,399
Shares issued under consulting agreements				-						4,952,463		4,952		789,118									794,070
Issuance of common stock for debt conversion				-						31,981,397		31,981		937,767									969,748
Issuance of common stock for debt, related party				-						2,500,000		2,500		57,750									60,250
Sale of common stock under equity agreement										4,747,662		4,748		146,356									151,104
Issuance of common stock for exercise of warrants				-						560,000		560		53,191									53,751
Issuance of common stock for cashless exercise of warrants				-						907,247		907		(907	)								-
Loss during the period				-													(6,871,020	)		(56,201	)		(6,927,221	)
Balance, December 31, 2022		5,000,000	$	20,000		1	$	-		70,837,511	$	70,837	$	14,896,922		$	(22,963,551	)	$	(716,091	)	$	(8,691,883	)

	December 31, 2022		December 31, 2021
Convertible Notes		143,234,067		4,966,154
Stock purchase warrants		90,429,360		1,130,487
Series A Preferred shares (convertible to common at a ratio of 10 common for each 1 preferred)		50,000,000		50,000,000
Total		283,663,427		56,256,410

	December 31, 2022			December 31, 2021
Office equipment	$	192,647		$	166,372
Leasehold improvements		12,813			31,919
Software		143,070			72,330
Total		348,530			270,621
Less: accumulated depreciation and amortization		(160,869	)		(35,445	)
Total property and equipment, net	$	187,661		$	235,176

	December 31, 2022		December 31, 2021
Reseller agreement (1)	$	-	$	3,467
Other expenses (2)		49,174		15,119
Total	$	49,174	$	18,586

	December 31, 2022		December 31, 2021
Security deposits	$	14,691	$	14,691
Other deposits and receivables		1,258		1,258
Total	$	15,949	$	15,949

	December 31, 2022			December 31, 2021
Principal	$	500,000		$	750,000
Stock-settled liability		5,171,803			8,320,525
Total		5,671,803			9,070,525
Unamortized debt discount		(20,726	)		(4,067,059	)
Debt carrying value	$	5,651,077		$	5,003,466


	Year Ended
	December 31,
	2022		2021
Interest expense on notes	$	53,907	$	50,915
Amortization of debt discount		4,406,591		7,751,138
Total:	$	4,460,498	$	7,802,052


Balance, December 31, 2020	$	66
Interest expense on the convertible notes		50,915
Balance, December 31, 2021		50,981
Interest expense on the convertible notes		53,907
Balance, December 31, 2022	$	104,888

	2022			2021
Debt principal	$	300,000		$	400,000
Stock-settled liability		3,508,980			3,500,412
Total		3,808,980			3,900,412
Issuance of 1,538,462 and 2,051 282 shares of common stock, respectively		(142,308	)		(4,615,385	)
Gain (loss) on extinguishment of debt upon conversion	$	3,666,672		$	(714,973	)

Balance, December 31, 2020	$	-
Interest expense on the convertible notes		13,440
Balance, December 31, 2021		13,440
Interest expense on the convertible notes		178,374
Shares issued under conversion		(124,742	)
Repaid in cash		(31,781	)
Balance, December 31, 2022	$	35,291


Debt principal	$	410,851
Accrued interest payable		124,742
Transfer agent fee		32,408
Total		568,001
Issuance of 21,990,255 shares of common stock		(657,858	)
(Loss) on extinguishment of debt upon conversion	$	(89,857	)


Balance, December 31, 2021	$	-
Interest expense on the convertible note		16,077
Balance, December 31, 2022	$	16,077

Balance, December 31, 2020	$	1,022
Addition: Interest expense		1,650
Balance, December 31, 2021		2,672
Addition: Interest expense		1,650
Balance, December 31, 2022	$	4,322

●	An interest rate of 1% per annum;

●	Loans issued prior to June 5, 2020, have a maturity of 2 years, with loans issued thereafter having a maturity of 5 years;

●	Loan payments are deferred for six months;

●	No collateral or personal guarantees are required; and

●	Neither the government nor lenders will charge small businesses any fees.

	December 31, 2022		December 31, 2021
Customer receivables ⁽¹⁾	$	-	$	-
Contract liabilities (Customer deposits) ^{(1), (2), (a), (b), (c)}	$	172,000	$	209,000

Balance at December 31, 2020, Debt, related party	$	1,217,579
Payments on loan		(151,854	)
Balance at December 31, 2021, Debt, related party.		1,065,725
Shares issued to settle debt		(75,000	)
Promissory Notes for funding provided		450,100
Balance at December 31, 2022, Debt, related party.	$	1,440,825

	December 31, 2022		December 31, 2021
Coleman Smith, President	$	67,256	$	3,946
Interest payable		109,785		55,713
ELOC Holdings Corp.		240,000		120,000
Terrence Flowers		110		110
	$	417,151	$	179,769


2023		127,556
2024		133,014
2025		138,472
2026		143,931
2027		136,527
Total future minimum lease payments		679,500
Less: imputed interest		(105,601	)
Total		573,894
Current portion of operating lease		91,604
Long term portion of operating lease	$	482,290

	Measurement date
Dividend yield		0	%
Expected volatility		265~297%
Risk-free interest rate		0.83~4.36%
Expected life (years)		3.00~5.00
Stock Price		$0.017~$2.80
Exercise Price		$0.10 ~ $1.00

Exercise Price		December 31, 2021		Issued		Repricing		Exercised			December 31, 2022		Expiration Date
$	1.00		560,000						(560,000	)		-
$	1.00		560,000				0.095985		(560,000	)		-
$	1.00		10,487				0.020025					10,487	November 2026
$	1.00				925,000		0.020025		(560,000	)		365,000	April 2027
$	1.20				16,417		0.020025					16,417	April 2027
$	0.30				1,466,667		0.020025					1,466,667	May 2025
$	0.36				66,000		0.020025					66,000	May 2027
$	0.10				3,520,000		0.020025					3,520,000	September 2027
$	0.12				79,200							79,200	September 2027
$	0.10				8,260,000		0.020025					8,260,000	November 2027
$	0.12				203,850		0.020025					203,850	November 2027
$	0.10				5,860,000		0.020025					5,860,000	December 2027
$	0.12				131,850		0.020025					131,850	December 31, 2022
			1,130,487		20,528,984				(1,680,000	)		19,979,471

				Weighted- Average Exercise		Weighted- Average Remaining Contractual		Aggregate Intrinsic
	Shares			Price		Term		Value
Outstanding at December 31, 2021		1,130,487		$	1.00		2.93	$	-
Grants		20,528,984			0.395		4.80		-
Exercised		(1,680,000	)		-		-		-
Expired		-			-		-		-
Outstanding at December 31, 2022		19,979,471		$	0.020025		4.68	$	-

Exercisable at December 31, 2022		19,979,471		$	0.020025		4.68	$	-

NAME	AGE	POSITION
William Coleman Smith	61	Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director
Brian Scott Hale	56	Director
William Ray Procanik	51	Director

	i)	Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

	ii)	Engaging in any type of business practice; or

	iii)	Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

5.	Was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

6.	Was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

7.	Was 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, relating to an alleged violation of:

	i)	Any Federal or State securities or commodities law or regulation; or

	ii)	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

	iii)	Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

8.	Was 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 (15 U.S.C. 78c(a)(26)), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29)), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Name and Title	Year		Salary ($)			Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan ($)		Non-qualified Deferred ($)		All other Compensation ($)		Total ($)
William C. Smith CEO, CFO, Treasurer, Secretary		2022	$	480,000	⁽¹⁾		-0-		-0-		-0-		-0-		-0-		-0-	$	480,000	⁽¹⁾

William C. Smith CEO, CFO, Treasurer, Secretary		2021		330,000	⁽²⁾		-0-		-0-		-0-		-0-		-0-		-0-		330,000

(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)
					Change in
					Pension Value
	Fees Earned or			Non-Equity Incentive	and Nonqualified Deferred
	Paid in Cash	Stock Awards	Option Awards	Plan Compensation	Compensation Earnings	All Other Compensation	Total
Name	($)	($)	($)	($)	($)	($)	($)
William C. Smith (1)	0	60,250	0	0	0	0	60,250
William Ray Procanik (2)	0	2,410	0	0	0	0	2,410
Brian Scott Hale (3)	0	2,410	0	0	0	0	2,410