High Sierra Technologies, Inc 10-Q for FY2020 Q2
High Sierra Technologies, Inc. (HSTI)
About this 10-Q
High Sierra Technologies, Inc filed this 10-Q on August 14, 2020, covering the quarter ended June 30, 2020 (FY2020 Q2).
Headline figures
Quarter ended June 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $0
- compared with $0 a year earlier
- Net loss
- $32.07K
- compared with a net loss of $276.8K a year earlier
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 10-Q
____________________
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to____________
Commission File No. 000-52036
HIGH SIERRA TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
| Colorado | 84-1344320 |
| (State or Other Jurisdiction of | (I.R.S. Employer Identification No.) |
| incorporation or organization) |
|
1495 Ridgeview Drive, Suite 230A
Reno, Nevada 89519
(Address of Principal Executive Offices)
(775) 224-4700
(Registrant’s telephone number, including area code)
_______________________________________________
(Former name, former address and former fiscal year,
if changed since last report)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, no par value
Indicate by check mark whether the Registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes [X] No [ ].
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer [ ] | Accelerated filer [ ] |
| Non-accelerated filer [X] | Smaller reporting company [X] |
|
| Emerging Growth company [X] |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date: August 14, 2020 – 20,189,642 shares of common stock.
2
FORWARD-LOOKING STATEMENTS
In this Quarterly Report on Form 10-Q, references to the “Company,” “we,” “us,” “our” and words of similar import refer to High Sierra Technologies, Inc., unless the context requires otherwise.
This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this report. These factors include, among others:
·
our ability to raise capital;
·
declines in general economic conditions in the markets where we may compete;
·
unknown environmental liabilities associated with any companies or properties we may acquire; and
·
significant competition in the markets where we may operate.
You should read any other cautionary statements made in this Quarterly Report as being applicable to all related forward-looking statements wherever they appear in this Quarterly Report. We cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements. You should read this Quarterly Report completely. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.
3
JUMPSTART OUR BUSINESS STARTUPS ACT DISCLOSURE
We qualify as an “emerging growth company,” as defined in Section 2(a)(19) of the Securities Act of 1933, as amended (the “Securities Act”), as amended by the Jumpstart Our Business Startups Act (the “JOBS Act”). An issuer qualifies as an “emerging growth company” if it has total annual gross revenues of less than $1.0 billion during its most recently completed fiscal year, and will continue to be deemed an emerging growth company until the earliest of:
|
| • | the last day of the fiscal year of the issuer during which it had total annual gross revenues of $1.0 billion or more; |
|
| • | the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement; |
|
| • | the date on which the issuer has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or |
|
| • | the date on which the issuer is deemed to be a “large accelerated filer,” as defined in Section 240.12b-2 of the Securities Exchange Act of 1934 (the “Exchange Act”). |
As an emerging growth company, we are exempt from various reporting requirements. Specifically, we are exempt from the following provisions:
|
| • | Section 404(b) of the Sarbanes-Oxley Act of 2002, which requires evaluations and reporting related to an issuer’s internal controls; |
|
| • | Section 14A(a) of the Exchange Act, which requires an issuer to seek shareholder approval of the compensation of its executives not less frequently than once every three years; and |
|
| • | Section 14A(b) of the Exchange Act, which requires an issuer to seek shareholder approval of its so-called “golden parachute” compensation, or compensation upon termination of an employee’s employment. |
Under the JOBS Act, emerging growth companies may delay adopting new or revised accounting standards that have different effective dates for public and private companies until such time as those standards apply to private companies. We have elected to use the extended transition period for complying with these new or revised accounting standards. Since we will not be required to comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies, our financial statements may not be comparable to the financial statements of companies that comply with public company effective dates. If we were to elect to comply with these public company effective dates, such election would be irrevocable pursuant to Section 107 of the JOBS Act.
4
PART I
Item 1. Financial Statements
The Financial Statements of the Registrant required to be filed with this 10-Q Quarterly Report were prepared by management together with related notes. In the opinion of management, the Financial Statements fairly present the financial condition of the Registrant and include all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Registrant’s Financial Statements. The results from operations for the three months ended June 30, 2020, are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The unaudited consolidated Financial Statements should be read in conjunction with the December 31, 2019 financial statements and footnotes thereto included in the Registrant’s Form 10-K Annual Report for the year ended December 31, 2019, filed with the Securities and Exchange Commission on June 3, 2020.
5
HIGH SIERRA TECHNOLOGIES, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
TABLE OF CONTENTS
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| PAGE |
|
|
|
|
|
|
| CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | 7 |
|
|
|
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | 8 |
|
|
|
| CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) (UNAUDITED) | 9 |
|
|
|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | 10 |
|
|
|
| NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | 11 |
6
HIGH SIERRA TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
June 30, 2020 and December 31, 2019
(Unaudited)
|
|
|
|
| June 30, |
| December 31, |
|
|
|
|
| 2020 |
| 2019 |
|
|
|
|
|
|
|
|
| ASSETS | ||||||
|
| Current Assets |
|
|
|
| |
|
|
| Cash |
| $ 197 |
| $ 5,207 |
|
|
|
|
|
|
|
|
|
|
| Total Current Assets |
| 197 |
| 5,207 |
|
|
|
|
|
|
|
|
|
| Property, Plant and Equipment, net |
| 143,467 |
| 161,045 | |
|
|
|
|
|
|
|
|
|
|
| Total Assets |
| $ 143,664 |
| $ 166,252 |
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS' (DEFICIT) | ||||||
|
| Current Liabilities |
|
|
|
| |
|
|
| Notes payable |
| $ 350,000 |
| $ 350,000 |
|
|
| Notes payable-Related party |
| 42,557 |
| 34,557 |
|
|
| Accounts payable and accrued expenses |
| 90,027 |
| 62,544 |
|
|
| Accounts payable and accrued expenses-Related party |
| 2,777 |
| 569 |
|
|
|
|
|
|
|
|
|
|
| Total Current Liabilities |
| 485,361 |
| 447,670 |
|
|
|
|
|
|
|
|
|
|
| Total Liabilities |
| 485,361 |
| 447,670 |
|
|
|
|
|
|
|
|
|
| Commitments and contingencies |
| - |
| - | |
|
|
|
|
|
|
|
|
|
| Stockholders (Deficit) |
|
|
|
| |
|
|
| Preferred stock, no par value, non-voting, 5,000,000 shares authorized, 0 shares issued and outstanding |
| - |
| - |
|
|
| Common stock, no par value, 50,000,000 shares authorized; 20,189,642 issued and outstanding |
| 237,348 |
| 237,348 |
|
|
| Accumulated (Deficit) |
| (579,045) |
| (518,766) |
|
|
| Total Stockholders' (Deficit) |
| (341,697) |
| (281,418) |
|
|
|
|
|
|
|
|
|
|
| Total Liabilities and Stockholders' (Deficit) |
| $ 143,664 |
| $ 166,252 |
The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
7
HIGH SIERRA TECHNOLOGIES, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
|
|
|
| Three Months Ended |
| Six Months Ended | ||||
|
|
|
| June 30, |
| June 30, | ||||
|
|
|
| 2020 |
| 2019 |
| 2020 |
| 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues | $ - |
| $ - |
| $ - |
| $ - | |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Expenses |
|
|
|
|
|
|
| |
|
|
| Depreciation | 8,789 |
| 1,500 |
| 17,578 |
| 1,500 |
|
|
| General and administrative | 10,657 |
| 274,999 |
| 19,259 |
| 331,828 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total operating expenses | 19,446 |
| 276,499 |
| 36,837 |
| 333,328 |
|
|
|
|
|
|
|
|
|
|
|
|
| (Loss) from operations | (19,446) |
| (276,499) |
| (36,837) |
| (333,328) | |
|
|
|
|
|
|
|
|
|
|
|
|
| Other (expense) |
|
|
|
|
|
|
| |
|
|
| Interest (expense) | (11,470) |
| (296) |
| (21,234) |
| (296) |
|
|
| Interest (expense)-Related party | (1,150) |
| - |
| (2,208) |
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total other (expense) | (12,620) |
| (296) |
| (23,442) |
| (296) |
|
|
|
|
|
|
|
|
|
|
|
|
| (Loss) before income taxes | (32,066) |
| (276,795) |
| (60,279) |
| (333,624) | |
|
|
| Income taxes | - |
| - |
| - |
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| Net (loss) | $ (32,066) |
| $ (276,795) |
| $ (60,279) |
| $ (333,624) | |
|
|
|
|
|
|
|
|
|
|
|
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| (Loss) per share-Basic and diluted | $ (0.00) |
| $ (0.01) |
| $ (0.00) |
| $ (0.02) | |
|
|
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|
|
|
|
|
|
|
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| Weighted average shares outstanding |
|
|
|
|
|
|
| |
|
|
| Basic and diluted | 20,189,642 |
| 20,266,565 |
| 20,189,642 |
| 20,228,316 |
The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
8
HIGH SIERRA TECHNOLOGIES, INC.
Condensed Consolidated Statements of Stockholders' (Deficit)
For the Three and Six Months ended June 30, 2020 and 2019
(Unaudited)
|
|
| Preferred Stock |
| Common Stock |
|
|
| |||||
|
|
| Shares |
| Amount |
| Shares |
| Amount |
| Accumulated (Deficit) |
| Stockholders' (Deficit) |
| Balance-January 1, 2019 |
| - |
| $ - |
| 20,189,642 |
| $ 237,348 |
| $ (42,519) |
| $ 194,829 |
| Net(loss) for the three months ended March 31, 2019 |
| - |
| - |
| - |
| - |
| (56,829) |
| (56,829) |
| Balance-March 31, 2019 |
| - |
| - |
| 20,189,642 |
| 237,348 |
| (99,348) |
| 138,000 |
| Common stock issued for services |
| - |
| - |
| 100,000 |
| 100,000 |
| - |
| 100,000 |
| Common stock issued for product |
| - |
| - |
| 100,000 |
| 100,000 |
| - |
| 100,000 |
| Net (loss) for the three months ended June 30, 2019 |
| - |
| - |
| - |
| - |
| (276,795) |
| (276,795) |
| Balance-June 30, 2019 |
| - |
| $ - |
| 20,389,642 |
| $ 437,348 |
| $ (376,143) |
| $ 61,205 |
| Balance-December 31, 2019 |
| - |
| $ - |
| 20,189,642 |
| $ 237,348 |
| $ (518,766) |
| $ (281,418) |
| Net (loss) for the three months ended March 31, 2020 |
| - |
| - |
| - |
| - |
| (28,213) |
| (28,213) |
| Balance-March 31, 2020 |
| - |
| - |
| 20,189,642 |
| 237,348 |
| (546,979) |
| (309,631) |
| Net (loss) for the three months ended June 30, 2020 |
| - |
| - |
| - |
| - |
| (32,066) |
| (32,066) |
| Balance-June 30, 2020 |
| - |
| $ - |
| 20,189,642 |
| $ 237,348 |
| $ (579,045) |
| $ (341,697) |
The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
9
HIGH SIERRA TECHNOLOGIES, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
| Six Months | ||
|
| Ended | ||
|
| June 30, | ||
|
| 2020 |
| 2019 |
|
|
|
|
|
| CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
| Net (loss) | $ (60,279) |
| $ (333,624) |
| Adjustments to reconcile net loss to net cash used |
|
|
|
| in operating activities: |
|
|
|
| Depreciation | 17,578 |
| 1,500 |
| Common stock issued for services | - |
| 100,000 |
| Common stock issued for product | - |
| 100,000 |
| Changes in assets and liabilities: |
|
|
|
| Investment in growing crops | - |
| (230,000) |
| Increase in accounts payable and accrued expenses | 27,483 |
| 142,803 |
| Increase in accounts payable and accrued expenses-Related party | 2,208 |
| - |
|
|
|
|
|
| Net cash (used) in operating activities | (13,010) |
| (219,321) |
|
|
|
|
|
| CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
| Purchase of property, plant and equipment | - |
| (42,500) |
|
|
|
|
|
| Net cash (used in) investing activities | - |
| (42,500) |
|
|
|
|
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| CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
| Proceeds from notes payable | 8,000 |
| 50,000 |
|
|
|
|
|
| Net cash provided by financing activities | 8,000 |
| 50,000 |
|
|
|
|
|
| Net (decrease) in cash | (5,010) |
| (211,821) |
|
|
|
|
|
| CASH AT BEGINNING PERIOD | 5,207 |
| 220,253 |
|
|
|
|
|
| CASH AT END OF PERIOD | $ 197 |
| $ 8,432 |
|
|
|
|
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| SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
| Cash paid for interest | $ 7,500 |
| $ - |
| Cash paid for income taxes | $ - |
| $ - |
The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
10
HIGH SIERRA TECHNOLOGIES, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020
NOTE 1- Summary of History and Significant Accounting Policies
Nature of Operations
Gulf & Orient Steamship Company, LTD. (“Gulf” or the “Company”) was incorporated in the State of Colorado on May 9, 1996. Gulf originally intended to engage in the business of marine transportation.
On December 31, 2018, Gulf entered into a Share Exchange Agreement with High Sierra Technologies, Inc, a Nevada corporation ("High Sierra"), and all of its shareholders. The shareholders of High Sierra were issued shares of the Gulf’s common stock on a one for one share basis in exchange for their shares of High Sierra’s common stock. High Sierra became a wholly-owned subsidiary of Gulf in the business combination. The Share Exchange was treated as a reverse merger and recapitalization, and as a result, the consolidated financial statements are presented under successor entity reporting, with an inception date of August 6, 2018. Subsequently Gulf’s name was changed to High Sierra Technologies, Inc.
High Sierra Technologies, Inc., the wholly-owned subsidiary, was incorporated in the State of Nevada on August 6, 2018. It was formed with the intention that it would become the assignee, owner and licensor of certain Intellectual Property that was, prior to assignment, the property of Vincent C. Lombardi, Ph.D. (the “Intellectual Property”) who is an officer, director and co-founder of the subsidiary. The subsidiary was further formed with the goal that it would continue to develop and expand its intellectual property portfolio with an emphasis on the recreational cannabis industry as well as the industrial hemp industry.
Through its subsidiary, the Company is a start-up that develops patents and other products used in the processing of cannabis, including industrial hemp, and will license these technologies to companies in the industry. The Company will likely incur research and development expenses in the future, and intends to develop a policy regarding the same. The Company was growing industrial hemp on a 200 acre property it leased in McDermitt, Nevada and incurred expenses in relation to this project and the failure of the crop during 2019 (see Note 8).
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC, including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements for the year ended December 31, 2019, included in our Annual Report on Form 10-K for the year ended December 31, 2019. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein.
The Company consolidates its subsidiaries (High Sierra Technologies, Inc., a Nevada corporation, and Gulf Acquisition, Inc., a Utah corporation) in accordance with ASC 810. All inter-company transactions have been eliminated during consolidation.
Concentration of Risk
The Company places its cash and temporary cash investments with established financial institutions. At times, such cash and investments may be in excess of the FDIC insurance limit.
11
HIGH SIERRA TECHNOLOGIES, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.
Stock-based Compensation
The Company records stock-based compensation in accordance with ASC 718, Compensation - Stock Based Compensation which requires the measurement and recognition of compensation expense based on grant date fair values for all share-based awards made to third parties, employees and directors, including stock options. Effective January 1, 2019, the Company adopted ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.
ASC 718 requires companies to estimate the fair value of share-based awards to employees and directors on the date of grant using an option-pricing model. The Company uses the Black-Scholes option-pricing model as its method of determining fair value. This model is affected by the Company's stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the Company's expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the statement of operations over the requisite service period.
Upon the adoption of ASU 2018-07, the Company measures the fair value of equity instruments for non-employee payment awards on the grant date.
Investment in Growing Crops
The Company’s Investment in Growing Crops represented the total cost of the crop inputs in the ground. These were recorded at cost and were to be expensed to cost of goods sold once the crops were harvested and sold.
The crop harvest failed and the Company incurred a $246,914 loss from the preparation, planting and harvesting of the crop during 2019.
Long-lived Assets
Long-lived assets are stated at cost. Maintenance and repairs are expensed as incurred. Depreciation is determined using the straight-line method over the estimated useful lives of the assets, which is five years.
Where an impairment of a property’s value is determined to be other than temporary, impairment for the estimated potential loss is recorded to adjust the property to its net realizable value.
When items of building or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in the results of operations. The Company does not have any long-lived tangible assets, which are considered to be impaired as of June 30, 2020 and December 31, 2019.
The Company applies the provisions of ASC 360-10, Property, Plant and Equipment, where applicable to all long-lived assets. ASC 360-10 addresses accounting and reporting for impairment and disposal of long-lived assets. The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with ASC 360-10. ASC 360-10 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal.
12
HIGH SIERRA TECHNOLOGIES, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020
Intangible Assets
Goodwill and intangible assets are reviewed for potential impairment in accordance with ASC 350, Intangibles - Goodwill and Other, whenever events or circumstances indicate that their carrying amounts may not be recoverable. The Company had no such intangibles at June 30, 2020 or December 31, 2019, and recorded no impairment losses during the six months ended June 30, 2020 or 2019.
Revenue Recognition
The Company applies ASC 606, Revenue from Contracts with Customers. Under ASC 606, the Company will recognize revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue as each performance obligation is satisfied.
Advertising
Advertising costs are expensed as incurred. Advertising expenses for the six months ended June 30, 2020 and 2019 were $0.
Fair Value of Financial Instruments
The Company adopted ASC 820, Fair Value Measurements and Disclosures, which provides a framework for measuring fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standard also expands disclosures about instruments measured at fair value and establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
Level 1 — Quoted prices for identical assets and liabilities in active markets;
Level 2 — Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and
Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates.
13
HIGH SIERRA TECHNOLOGIES, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020
Emerging Growth Company Critical Accounting Policy Disclosure
The Company qualifies as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging grown company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has chosen to “opt out” of such extended transition period, and as a result, the Company will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.
Income Taxes
The Company accounts for income taxes under ASC 740-10-30, Income Taxes. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. 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 statements of operations in the period that includes the enactment date.
The Company adopted ASC 740-10-25, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. ASC 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of ASC 740-10-25.
Loss Per Share
Net loss per common share is computed pursuant to ASC 260-10-45, Earnings Per Share. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period, unless their effect is anti-dilutive due to continuing losses. There were no potentially dilutive shares outstanding as of June 30, 2020 and December 31, 2019.
Recent Accounting Pronouncements
We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations or financial position.
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HIGH SIERRA TECHNOLOGIES, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020
NOTE 2 – Financial Condition and Going Concern
The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has sustained operating losses during the current year-to-date and may not achieve the level of profitable operations to sustain its activities. These factors raise substantial doubt as to its ability to obtain debt and/or equity financing and achieve profitable operations.
Management intends to raise additional operating funds through equity and/or debt offerings. However, there can be no assurance management will be successful in its endeavors. Ultimately, the Company will need to achieve profitable operations in order to continue as a going concern.
There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support its working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available to the Company it may be required to curtail its operations.
NOTE 3 – Investment in Growing Crops
Investment in growing crops consisted of the cost of the crop inputs in the ground at December 31, 2019 and were recorded at cost and were expensed to Crop Loss on the statement of operations during the fourth quarter of 2019 since the crop harvest and related farming activities failed. The Company incurred a loss from the crop activities in the amount of $246,914 during 2019. The Company is continuing to pursue opportunities in the recreational and industrial cannabis industries.
NOTE 4 – Property and Equipment
At June 30, 2020 and December 31, 2019, property and equipment consisted of the following:
|
| Useful Lives | June 30, 2020 |
| December 31, 2019 |
|
|
|
|
|
|
| Equipment | 5 | $ 176,750 |
| $ 176,750 |
| Less: accumulated depreciation |
| (33,283) |
| (15,705) |
|
|
| $ 143,467 |
| $ 161,045 |
Depreciation expense was $17,578 and $1,500 for the six months ended June 30, 2020 and 2019, respectively.
15
HIGH SIERRA TECHNOLOGIES, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020
NOTE 5 – Notes Payable
The Company’s debt consists of the following:
|
| June 30, 2020 | December 31, 2019 |
| Notes payable, 12-14% interest, interest and principal due October 10, 2020 through November 11, 2020, unsecured(1) | $350,000 | $350,000 |
|
|
|
|
| Total due | 350,000 | 350,000 |
| Current Portion | 350,000 | 350,000 |
| Long-term portion | $ - | $ - |
(1)
One note for $50,000 includes as an additional return on the debt a 3% interest in the Gross Crop Yield from the Company’s hemp crop in McDermitt, NV. No accrual has been made for this interest due to failure of crop and no proceeds received from a Gross Crop Yield.
(2)
All notes that have become due to the date of this report have been extended to a future due date, as per above date ranges.
The Company has incurred an interest expense of $21,234 and $296 during the six months ended June 30, 2020 and 2019. The Company has interest accrued on the above notes in the amount of $24,514 and $10,779 at June 30, 2020 and December 31, 2019.
NOTE 6 – Notes Payable-Related Party
The Company’s related party debt consists of the following:
|
| June 30, 2020 | December 31, 2019 |
| Notes payable, 12% interest, interest and principal due November 16, 2020 through November 30, 2020, unsecured | $ 42,557 | $ 34,557 |
|
|
|
|
| Total due | 42,557 | 34,557 |
| Current Portion | 42,557 | 34,557 |
| Long-term portion | $ - | $ - |
(1)
All notes that have become due to the date of this report have been extended to a future due date as per the date range listed above.
During the six months ended June 30, 2020 and 2019, the Company borrowed $8,000 and $0, respectively, from our current President and director, Vincent C. Lombardi, in order to cover expenses being incurred in connection with the Company’s commercial hemp farming activities and general and administrative expenses as detailed below. No repayments on these related party notes were made during the six months ended June 30, 2020 or 2019.
The Company has incurred an interest expense of $2,208 and $0 during the six months ended June 30, 2020 and 2019. The Company has interest accrued on the above notes in the amount of $2,777 and $569 at June 30, 2020 and December 31, 2019.
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HIGH SIERRA TECHNOLOGIES, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020
NOTE 7 – Capital Changes
Offering of Securities
We are offering a maximum of 2,000,000 Shares of common stock (“Shares”) exclusively to “accredited investors.” There is no minimum number of Shares to be sold pursuant to this offering other than the minimum purchase requirement. The offering price is $1.50 per Share ($3,000,000). This offering became effective February 4, 2020.
These securities have not been registered with the United States Securities and Exchange Commission or with any state securities agency. These securities are being offered pursuant to exemptions from the registration requirements of the Securities Act of 1933, as amended pursuant to Rule 506 of Regulation D, and from the registration requirements of the securities laws of the states in which the securities will be offered. The securities are subject to certain restrictions on resale and may be resold only as permitted under applicable federal and state securities laws.
NOTE 8 – Contingencies and Commitments and Legal Matters Agreement
Management of the Company has conducted a diligent search and concluded that there were no commitments, contingencies, or legal matters pending at the balance sheet dates, other than what has been disclosed below.
On May 13, 2019, the Company entered into an Agricultural Lease for approximately 200 acres in Northern Nevada to plant its Hemp Grow for 2019.
The term of the lease is for five years commencing May 18, 2019 through May 17, 2024.
There are no minimum fixed monthly payments due on this lease, but an annual participation bonus in an amount equal to fifteen percent of the gross crop yield from the leasehold properties. The Gross Crop Yield is defined by the actual amount received from the crop harvest less all expenses derived from the growing, processing and sale of the crop harvested from the Property.
The Company is solely responsible for all crop care, labor, irrigation, insurance, taxes, repairs and maintenance of the crop, equipment and other costs of planting, raising and harvesting of crops. The Company is responsible for all other miscellaneous cost to grow and take it to market.
Due to the lease payments being variable, the Company has not recorded a right of use asset or lease liability on the balance sheet and will recognize the variable lease payments in the period when the obligation for those payments has occurred in accordance with ASC 842, Leases.
No gross crop yields have been achieved by the Company to date, and therefore no lease payments have been made or required under the lease terms. The Hemp Grow farming activities were ceased at the end of 2019 and the leased property is not currently being used by the Company.
17
HIGH SIERRA TECHNOLOGIES, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2020
NOTE 9 – Subsequent Events
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to June 30, 2020 through the date these financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financial statement other than the events described immediately below.
On July 30, 2020, the Company borrowed $2,949 from our current President and director, Vincent C. Lombardi and entered into two unsecured promissory notes that bear interest at 9.0% per annum and are due on November 30, 2020.
On August 12, 2020, the Company borrowed $20,000 from an independent third party and entered into an unsecured promissory note that bears interest at 16.0% per annum and is due on August 12, 2021.
On August 10, 2020, the Company borrowed $5,000 from our current President and director, Vincent C. Lombardi and entered into an unsecured promissory note that bears interest at 12.0% per annum and is due on November 10, 2020.
Subsequent to June 30, 2020, the Company entered into amendments with various noteholders that extended the due dates of its notes payable (see Notes 5 and 6), so that the notes are due October 10, 2020 or on later dates. Most become due in November 2020.
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Item 2. Management’s Discussions and Analysis of Financial Condition and Results of Operations.
Forward-looking Statements
Statements made in this Quarterly Report which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and our business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words “may,” “would,” “could,” “should,” “expects,” “projects,” “anticipates,” “believes,” “estimates,” “plans,” “intends,” “targets” or similar expressions.
Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, general economic or industry conditions, nationally and/or in the communities in which we may conduct business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our current or potential business and related matters.
Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.
Company Business - Intellectual Property
The Company’s business is now focused on the business of its wholly-owned subsidiary, High Sierra Technologies, Inc. (“High Sierra”). High Sierra was incorporated in the State of Nevada in August of 2018. It was formed with the intention that it would become the assignee, owner and licensor of certain Intellectual Property that was, prior to assignment, the property of Vincent C. Lombardi, Ph.D. (the “Intellectual Property”) who is an officer, director and co-founder of High Sierra. High Sierra was further formed with the goal that it would continue to develop and expand its intellectual property portfolio with an emphasis on the recreational cannabis industry as well as the industrial hemp industry.
The current Intellectual Property portfolio consists of all of the rights, title and interest that Dr. Lombardi had in certain two Provisional Patent Applications (collectively, the “Applications”). Assignments of both of these applications, which assign their ownership to High Sierra, have been filed with the United States Patent & Trademark Office. The Applications have since been incorporated into and converted into a single all-encompassing Utility Patent Application which has been filed with numerous governmental agencies in the United States, Canada and multiple other countries as is discussed below (collectively the “Utility Patent Applications”). For important information concerning the Company’s Intellectual Property, please refer to the Company’s most recent Annual Report on Form 10-K.
On March 25, 2020, the Company received an International Preliminary Report of Patentability for its Patent Cooperation Treaty Application Number PCT/US2019/014778, CANNABIS PRODUCTS MODIFIED BY REMOVING VOLATILE ORGANIC COMPOUNDS AND ADDING VOLATILE UNSATURATED HYDROCARBONS, in which Claims Numbered 1-84 were characterized as novel and Claims Numbered 1-17, 63-70, 83 and 84 were characterized as inventive steps.
On June 5, 2020, the United States Patent and Trademark Office, by way of an Office Action dated May 29, 2020, notified the Company that Claims Numbered 1-17, 63-70 and 83-84 of Patent Application Number 16/255,157, CANNABIS PRODUCTS MODIFIED BY REMOVING VOLATILE ORGANIC COMPOUNDS AND ADDING VOLATILE UNSATURATED HYDROCARBONS, were now allowed. These are four of the seven main claims in Patent Application Number 16/255,157. In response to this, the Company’s outside Patent Counsel, Oliff PLC, has filed an Amendment to Patent Application Number 16/255,157 so that these Claims can be issued a formal Notice of Allowance which would then lead to the issuance of a Utility Patent for these Claims. As a result of this action by our attorneys at Oliff PLC, on June 19, 2020, the United States Patent and Trademark Office issued a formal Notice of Allowance and Fee(s) Due which will allow the Utility Patent to be issued once the fees are paid. The Company’s attorneys at Oliff PLC also are in the process of preparing a Continuation Application for Claims Numbered 18-62 and 71-82 so that the Company can continue to prosecute these Claims separately.
On July 23, 2020, the Company received an Issue Notification from the United States Patent and Trademark Office stating that, on August 11, 2020, the United States Patent and Trademark Office will issue United States Patent Number
19
10,737,198 to the Company as assignee of Application Number 16/255.157, CANNABIS PRODUCTS MODIFIED BY REMOVING VOLATILE ORGANIC COMPOUNDS AND ADDING VOLATILE UNSATURATED HYDROCARBONS, filed by Vincent Lombardi, one of the founders of the Company and its current President and Chief Executive Officer.
Once United States Patent Number 10,737,198 has been formally issued, the Company intends to begin actively marketing and licensing its patented technologies in both the cannabis and hemp market spaces as well as pursuing its own uses of its patented technologies in relation to various end user products that can benefit from its patented technologies. In regards to the imminent issuance of United States Patent Number 10,737,198, Vincent C. Lombardi, President and Chief Executive Officer of the Company, has stated that “we believe the effect of the issuance of this Patent is that it will cause the Company to be able to effectively control the marketplace for low, or no, odor cannabis and hemp products in the United States which will allow the Company to start generating licensing revenue from the technology disclosed in United States Patent Number 10,737,198.”
The Company has received a First Office Action on its Canadian Patent Application Number 3,031,123, CANNABIS PRODUCTS MODIFIED BY REMOVING VOLATILE ORGANIC COMPOUNDS AND ADDING VOLATILE UNSATURATED HYDROCARBONS, and that its attorneys at Oliff PLC and Aird & McBurney LP in Canada are in the process of responding to it.
The Company’s outside Patent Counsel, Oliff PLC are currently completing the Application to the European Patent Organization (“EPO”) based on Patent Cooperation Treaty Application Number PCT/US2019/014778, CANNABIS PRODUCTS MODIFIED BY REMOVING VOLATILE ORGANIC COMPOUNDS AND ADDING VOLATILE UNSATURATED HYDROCARBONS. This EPO Application will allow the Company to simultaneously prosecute its PCT Application in 38 different countries in Europe and the surrounding areas.
High Sierra is now marketing the licensing of its technology in states in the U.S. where cannabis and/or hemp has been legalized both for medicinal and/or recreational use. It also plans to use a similar marketing strategy in all provinces in Canada which has legalized both the medicinal and recreational uses of cannabis as of October 17, 2018. Hemp has long been legal in Canada. High Sierra is targeting entities that are licensed to produce, process and/or manufacture cannabis and/or hemp related products. High Sierra also believes that its technology will be of interest to tobacco companies in the United States, Canada and other places if those companies choose to enter the cannabis and/or hemp marketplaces as the legalization of cannabis and/or hemp progresses.
Plan of Operation
Our plan of operation for the next 12 months is to: (i) market the licensing of the Company’s technology in states in the U.S. where cannabis and/or hemp has been legalized for medicinal and/or recreational use, and in the Canadian provinces; and (ii) seek to raise additional equity funding so that the Company may pursue the construction and operation of a state of the art / pharmaceutical grade processing facility for the processing of Hemp biomass to be located in Northern Nevada. During the next 12 months, our cash requirements include expenses to market our technology; expenses to construct and operate a state of the art / pharmaceutical grade processing facility for the processing of Hemp biomass to be located in Northern Nevada; the payment of our SEC reporting filing expenses, including associated legal and accounting fees; and costs incident to maintaining our good standing as a corporation in our state of organization. We anticipate that we will need to raise additional equity funds to successfully commence and operate a state of the art / pharmaceutical grade processing facility for the processing of Hemp biomass. We have no commitments to raise any additional funds at the present time, and we can offer to assurances that we will be able to raise additional funds on terms acceptable to the Company.
Results of Operations – Three Months Ended June 30, 2020 and Three Months Ended June 30, 2019
We have generated no revenues since inception. We hope to start earning revenues during the present fiscal year ending December 31, 2020.
General and administrative expenses were $10,657 for the three month period ended June 30, 2020, a decrease of $264,342 from the $274,999 of general and administrative expenses incurred during the three months ended June 30, 2019. Most of the general and administrative expenses in the earlier period were for consulting services and casual labor related to the Company’s former farming operations, agronomics, rent, and legal and accounting expenses related to the acquisition of the Company’s High Sierra Technologies, Inc. subsidiary and for the prosecution of its patent applications. Most of the general and administrative expenses in the current period were for legal and accounting related to the preparation and filing
20
of the Company’s reports with the U.S. Securities and Exchange Commission. We incurred depreciation of $8,789 in the three months ended June 30, 2020, an increase of $7,289 from the $1,500 of depreciation in the three month period ended June 30, 2019. This is due to the fact that most of the Company’s depreciable equipment was purchased just prior to, or after June 30, 2019. We incurred interest expense of $11,470 in the three months ended June 30, 2020 compared to $296 of interest expense incurred in the three months ended June 30, 2019. We incurred interest expense-related party of $1,150 in the three months ended June 30, 2020 and we incurred no interest expense–related party in the three months ended June 30, 2019. This is due to the fact that the Company incurred some of its present notes payable during the three months ended June 30, 2019 and the balance were incurred after June 30, 2019.
We incurred a net loss of $32,066 during the three months ended June 30, 2020, a decrease of $244,729 from the $276,795 net loss incurred during the three months ended June 30. 2019. The Company’s decrease in net loss in the current period is largely due to the reduction of administrative expenses, partially offset by the increases in depreciation and interest expenses.
Results of Operations – Six Months Ended June 30, 2020 and Six Months Ended June 30, 2019
We have generated no revenues since inception. We hope to start earning revenues during the present fiscal year ending December 31, 2020.
General and administrative expenses were $19,259 for the six month period ended June 30, 2020, a decrease of $312,569 from the $331,828 of general and administrative expenses incurred during the six months ended June 30, 2019. Most of the general and administrative expenses in the earlier period were for consulting services and casual labor related to the Company’s former farming operations, agronomics, rent, and legal and accounting expenses related to the acquisition of the Company’s High Sierra Technologies, Inc. subsidiary and for the prosecution of its patent applications. Most of the general and administrative expenses in the current period were for legal and accounting related to the preparation and filing of the Company’s reports with the U.S. Securities and Exchange Commission. We incurred depreciation of $17,578 in the six months ended June 30, 2020, an increase of $16,078 from the $1,500 of depreciation in the six month period ended June 30, 2019. This is due to the fact that most of the Company’s depreciable equipment was purchased just prior to, or after, June 30, 2020. We incurred interest expense of $21,234 in the six months ended June 30, 2020 compared to $296 of interest expense incurred in the six months ended June 30, 2019. We incurred interest expense-related party of $2,208 in the six months ended June 30, 2020 and we incurred no interest expense–related party in the six months ended June 30, 2019. This is due to the fact that the Company incurred some of its present notes payable during the six months ended June 30, 2019 and the balance were incurred after June 30, 2019.
We incurred a net loss of $60,279 during the six months ended June 30, 2020, a decrease of $273,345 from the $333,624 net loss incurred during the six months ended June 30. 2019. The Company’s decrease in net loss in the current period is largely due to the reduction of administrative expenses, partially offset by the increases in depreciation and interest expenses.
Liquidity and Capital Resources
We had total current assets of $197 consisting entirely of cash, and $485,361 in total current liabilities as of June 30, 2020. Our total current liabilities consisted of notes payable $350,000, notes payable-related party of $42,557, accounts payable and accrued expenses of $90,027 and accounts payable and accrued expenses-related party of $2,777. We had property, plant and equipment, net of $143,467 as of June 30, 2020. See our Plan of Operation above for information about our cash requirements for the next 12 months.
The cash flows from operating activities consisted of the following: During the six months ended June 30, 2020, we had an increase in accounts payable and accrued expenses of $27,483, an increase in accounts payable and accrued expenses-related party of $2,208 and depreciation expense of $17,578. When this is subtracted from our net loss of $60,279 for the six months ended June 30, 2020, it results in net cash used in operating activities of $13,010.
During the six months ended June 30, 2019, we had an increase in accounts payable and accrued expenses of $142,803, we invested $230,000 in growing crops, we issued common stock for services of $100,000 and we issued common stock for product (hemp seed) of $100,000. We also had depreciation of $1,500. When this is subtracted from our net loss of $333,624 for the six months ended June 30, 2019, it results in net cash used in operating activities of $219,321.
21
We received proceeds from notes payable of $8,000 in the six months ended June 30, 2020 which represented the net cash provided by financing activities in the same six month period. When combined with the $13,010 net cash used in operating activities, it results in a net decrease in cash of $5,010 in the six months ended June 30, 2020.
We received proceeds from notes payable of $50,000 during the six months ended June 30, 2019 (financing activities), and we spent $42,500 on the purchase of property, plant and equipment (investing activities) in the six months ended June 30, 2019. When combined with the $219,321 net cash used in operating activities during the six months ended June 30, 2019, it results in a net decrease in cash during the six months ended June 30, 2019 of $211,821.
Going Concern
The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has sustained operating losses during the current year-to-date and may not achieve the level of profitable operations to sustain its activities. These factors raise substantial doubt as to its ability to obtain debt and/or equity financing and achieve profitable operations.
Management intends to raise additional operating funds to fund operations for the next 12 months through proceeds to be received from the planned sale of our hemp farming equipment, and through raising funds through equity and/or debt offerings. However, there can be no assurance management will be successful in its endeavors. Ultimately, the Company will need to achieve profitable operations in order to continue as a going concern.
There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support its working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available to the Company it may be required to curtail its operations.
Emerging Growth Company Critical Accounting Policy Disclosure
The Company qualifies as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging grown company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company may elect to take advantage of the benefits of this extended transition period in the future.
Off-Balance Sheet Arrangements
We had no off-balance sheet arrangements of any kind for the six month period ended June 30, 2020.
Potential Impact of COVID-19
The Company is concerned that the COVID-19 virus may impact the Company’s ability to raise additional equity capital due to the uncertainty of the virus’ effects on the economy and capital markets, which may make potential investors less likely to invest during the pandemic. This may affect the Company’s ability to raise equity capital to meet its financial obligations, implement its business plan and continue as a going concern.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not required.
22
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2020. Based on the evaluation of these disclosure controls and procedures, our Chief Executive Officer concluded that our disclosure controls and procedures were not effective.
Changes in internal control over financial reporting
Our management, with the participation of the Chief Executive Officer and the Chief Financial Officer, has concluded there were no significant changes in our internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None; not applicable.
Item 1A. Risk Factors.
Not required.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
There were no sales of unregistered equity securities during the period ended June 30, 2020. For information concerning sales of unregistered equity securities in the three year period prior to the period covered by this report, see the Company’s Annual and Quarterly Reports on Form 10-K and Form 10-Q filed for the periods ended since the Company’s inception on August 6, 2018.
Item 3. Defaults Upon Senior Securities.
None; not applicable.
Item 4. Mine Safety Disclosures.
None; not applicable.
Item 5. Other Information.
None; not applicable.
23
Item 6. Exhibits.
Exhibit No.
Identification of Exhibit
| 3.1* | Articles of Incorporation filed May 9, 1996 |
| 3.2* | Amended and Restated Articles of Incorporation |
| 3.3* | By-Laws |
| 10.1* | Promissory Note with Larry Mamey dated June 6, 2019 |
| 10.2* | Promissory Note with Or Crown Auto dated July 10, 2019 |
| 10.3* | Promissory Note with Vincent C. Lombardi dated July 17, 2019 |
| 10.4* | Promissory Note with Leland A. or Terri L. Martineau dated July 31, 2019 |
| 10.5* | Promissory Note with Biored N.V., a Belgian corporation, dated July 30, 2019 |
| 10.6** | Promissory Note with Michael Vardakis dated August 8, 2019 |
| 10.7** | Promissory Note with Michael Vardakis dated August 24, 2019 |
| 10.8** | Promissory Note with Vincent C. Lombardi dated August 30, 2019 and First Amendment Thereto |
| 10.9** | Promissory Note with Vincent C. Lombardi dated September 5, 2019 and First Amendment Thereto |
| 10.10** | Promissory Note with Michael Vardakis dated September 11, 2019 |
| 10.11** | Promissory Note with Vincent C. Lombardi dated October 18, 2019 |
| 10.12** | Promissory Note with Michael Vardakis dated November 1, 2019 |
| 10.13*** | Promissory Note with Vincent C. Lombardi dated February 14, 2020 |
| 10.14*** | Promissory Note with Vincent C. Lombardi dated March 16, 2020 |
| 10.15*** | Promissory Note with Vincent C. Lombardi dated April 16, 2020 |
| 10.16*** | Promissory Note with Vincent C. Lombardi dated May 6, 2020 |
| Promissory Note with Vincent C. Lombardi dated June 30, 2020 – Filed Herein | |
| Promissory Note with Vincent C. Lombardi dated July 30, 2020 – Filed Herein | |
| Promissory Note with Vincent C. Lombardi dated July 30, 2020 – Filed Herein | |
| Promissory Note with Vincent C. Lombardi dated August 10, 2020 – Filed Herein | |
| Promissory Note with Kenny L. DeMeirleir dated August 12, 2020 – Filed Herein | |
| 14* | Code of Ethics |
| Certification Pursuant to Section 302 of the Sarbanes-Oxley Act provided by Vincent C. Lombardi, Chief Executive Officer, President and Director. | |
| Certification Pursuant to Section 302 of the Sarbanes-Oxley Act provided by Gregg W. Koechlein, Chief Financial Officer, Chief Operating Officer, Secretary, Treasurer and Director. | |
| Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 provided by Vincent C. Lombardi, Chief Executive Officer, President and Director; and Gregg W. Koechlein, Chief Financial Officer, Chief Operating Officer, Secretary, Treasurer and Director. | |
| 101.INS | XBRL Instance Document |
| 101.PRE. | XBRL Taxonomy Extension Presentation Linkbase |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase |
| 101.SCH | XBRL Taxonomy Extension Schema |
* Incorporated by reference from the Company’s Amendment No. 2 to its Registration Statement on Form S-1 filed with the Securities and Exchange Commission on August 7, 2019.
** Incorporated by reference from the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2019 filed with the Securities and Exchange Commission on November 19, 2019.
*** Incorporated by reference from the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on June 3, 2020.
24
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized
High Sierra Technologies, Inc.
| Date: | August 14, 2020 |
| By: | /s/ Vincent C. Lombardi |
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| Vincent C. Lombardi, Chief Executive Officer, President and Director |
| Date: | August 14, 2020 |
| By: | /s/ Gregg W. Koechlein |
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| Gregg W. Koechlein, Chief Financial Officer, Chief Operating Officer, Secretary, Treasurer and Director |
25
Exhibit 31-1
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Vincent C. Lombardi, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of High Sierra Technologies, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the Registrant and have:
a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions);
a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
Date: | August 14, 2020 |
| By: | /s/ Vincent C. Lombardi |
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|
|
| Vincent C. Lombardi, Chief Executive Officer, President and Director |
Exhibit 31-2
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Gregg W. Koechlein, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of High Sierra Technologies, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the Registrant and have:
a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions);
a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
Date: | August 14, 2020 |
| By: | /s/ Gregg W. Koechlein |
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| Gregg W. Koechlein, Chief Financial Officer, Chief Operating Officer, Secretary, Treasurer and Director |
Exhibit 32
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of High Sierra Technologies, Inc. (the “Registrant”) on Form 10-Q for the period ending June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), we, Vincent C. Lombardi, Chief Executive Officer, President and Director; and Gregg W. Koechlein, Chief Financial Officer, Chief Operating Officer, Secretary, Treasurer and Director of the Registrant, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Quarterly Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
| Date: | August 14, 2020 |
| By: | /s/ Vincent C. Lombardi |
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|
|
|
| Vincent C. Lombardi, Chief Executive Officer, President and Director |
| Date: | August 14, 2020 |
| By: | /s/ Gregg W. Koechlein |
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|
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| Gregg W. Koechlein, Chief Financial Officer, Chief Operating Officer, Secretary, Treasurer and Director |
PROMISSORY NOTE
City of Reno
State of Nevada
June 30, 2020
For value received, High Sierra Technologies, Inc., a Nevada Corporation (the “Maker”), of 1495 Ridgeview Drive, Suite 230A, in the City of Reno, State of Nevada 89519 promises to pay to the order of Vincent C. Lombardi or his successors and assigns, at his principal office located at 979 Westcliff Lane, in the City of Reno, State of Nevada 89523, (the “Payee”), the sum of One Thousand Four Hundred Dollars and No Cents ($1,400.00) together with any interest accrued on the unpaid principal balance as, and to the extent, provided for in this Note. Interest shall accrue on the principal balance only.
This Note shall accrue interest at an annual rate of nine percent (9.0%). No payments of principal or interest shall be required hereunder until the Maturity Date, as defined herein. The then unpaid principal balance of this Note, together with any unpaid interest accrued thereon, shall be all due and payable on November 30, 2020 (the “Maturity Date”) unless the Maturity Date is extended by mutual agreement of the parties hereto.
At any time during the term of this Note, the Maker may, without penalty, prepay the unpaid principal balance of this Note, or any portion thereof, along with all interest accrued on the principal balance through and including the date of repayment in the event of a complete repayment of the principal balance. In the event of a partial repayment of the principal balance, interest shall then accrue based on the new principal balance. Maker may also make interest only payments at any time during the term of this Note.
Payee shall have the right, which may be exercised at any time in accordance herewith, to pledge or transfer this Note, and any pledgee or transferee shall have all the rights of Payee and Payee shall be thereafter relieved from any liability with respect to any such pledge or transfer.
On the happening of any of the following events, each of which will constitute an event of default under this Note, all indebtedness, obligations and liabilities of Maker to Payee shall become immediately due and payable at the option of Payee: (1) failure of Maker to pay any payment when due after the expiration of the applicable cure period of ten (10 business days; (2) failure of Maker to perform any agreement or obligation under this Note; (3) filing of any petition in bankruptcy by or against Maker; or (4) application for appointment of a receiver for, making of a general assignment for the benefit of creditors by, or insolvency of Maker. On occurrence of any such event of default and the expiration of any applicable cure period, or at any time thereafter, Payee shall have the remedies of an unsecured party under the laws of the State of Nevada.
Upon the occurrence of any event of default, and the expiration of the cure period of ten (10) business days, that has not been expressly waived by Payee, all principal amounts then due shall bear interest at the default rate of interest, that being fifteen percent (15%) until such time as the obligations hereunder have been satisfied. Payee may waive any event of default before or after the event of default
1
has been declared without impairing its right to declare a subsequent event of default under this Note, this right being a continuing one.
Maker hereby expressly waives presentment, demand of payment, notice of nonpayment, protest and notice of protest of this Note, and all exemptions. If this Note is not paid when due, Maker hereby expressly agrees to pay all costs and expenses of collection, including reasonable attorney’s fees. Payee shall in no event be liable to any party for failure to collect this Note, in whole or in part.
It is the intention of Payee and Maker to comply strictly with any applicable usury laws; and, accordingly, in no event and upon no contingency shall the holder of this Note ever be entitled to receive, collect, or apply as interest any interest, fees, charges or other payments equivalent to interest, in excess of the maximum effective contract rate which Payee may lawfully charge under applicable statutes and laws from time to time in effect; and in the event that the holder hereof ever receives, collects, or applies as interest any such excess, such amount which, but for this provision, would be excessive interest, shall be applied to the reduction of the principal amount of the indebtedness evidenced by this Note; and if the principal amount of the indebtedness evidenced by this Note, all lawful interest thereon and all lawful fees and charges in connection therewith, are paid in full, any remaining excess shall forthwith be paid to Maker, or other party lawfully entitled thereto. All interest paid or agreed to be paid by Maker shall, to the maximum extent permitted under applicable law, be amortized, prorated, allocated and spread throughout the full period until payment in full of the principal so that the interest hereon for such full period shall not exceed the maximum amount permitted by applicable law. Any provision hereof, or of any other agreement between the holder hereof and Maker, that operates to bind, obligate, or compel Maker to pay interest in excess of such maximum effective contract rate shall be construed to require the payment of the maximum rate only. The provisions of this paragraph shall be given precedence over any other provision contained in this Note or in any other agreement between the holder of this Note and Maker that is in conflict with the provisions of this paragraph.
This Note applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Payee shall mean the owner and holder, including pledgees, of this Note, whether or not named as Payee herein. In this Note whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural.
Should a dispute arise between any of the parties hereto regarding the meaning of this Note, the enforcement of this Note or any claim or dispute related to this Note, then the prevailing party, in addition to whatever other relief such party may be entitled to, shall also recover its reasonable attorneys’ fees and costs incurred in connection with such dispute whether such dispute was resolved judicially, by mediation, by arbitration or by any other means, formal or informal.
This Note shall be construed and enforced in accordance with the laws of the State of Nevada without regard to its conflicts of laws principles. The exclusive jurisdiction and venue to hear and determine any claim, dispute or other controversy, of any nature whatsoever, related to this Note, shall be any state or federal court in the County of Washoe, State of Nevada having subject matter jurisdiction over the matters at issue.
2
This Note represents the entire agreement between the parties hereto related to the matters set forth herein and expressly replaces and supersedes any and all previous agreements, oral, or in writing, between the parties hereto related to the matters set forth herein. This Note may not be modified or amended except by an amendment, in writing, executed by all parties hereto.
Time is of the essence in this Note and each and every provision hereof.
If any term, condition or provision of this Note shall be deemed invalid or unenforceable by a court of competent jurisdiction, that term, condition or provision shall be deemed severed from this Note and the remainder of the terms, conditions and provisions of this Note shall remain valid, enforceable and in full force and effect to the fullest extent permitted by law.
MAKER HEREBY, AND PAYEE BY ITS ACCEPTANCE OF THIS NOTE, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS NOTE AND ANY OTHER AGREEMENTS EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY, WHETHER IN CONNECTION WITH THE MAKING OF THIS NOTE, COLLECTION OF THIS NOTE OR OTHERWISE. THIS PROVISION IS A MATERIAL INDUCEMENT FOR PAYEE AGREEING TO ACCEPT THIS NOTE.
IN WITNESS WHEREOF, Maker has executed this Note to be effective as of the date set forth above.
High Sierra Technologies, Inc., a Nevada Corporation
By: /s/ Gregg W. Koechlein
Gregg W. Koechlein, its Chief Operating Officer
3
PROMISSORY NOTE
City of Reno
State of Nevada
July 30, 2020
For value received, High Sierra Technologies, Inc., a Nevada Corporation (the “Maker”), of 1495 Ridgeview Drive, Suite 230A, in the City of Reno, State of Nevada 89519 promises to pay to the order of Vincent C. Lombardi or his successors and assigns, at his principal office located at 979 Westcliff Lane, in the City of Reno, State of Nevada 89523, (the “Payee”), the sum of One Thousand One Hundred One Hundred Ninety Nine Dollars and Thirty Cents ($1,199.30) together with any interest accrued on the unpaid principal balance as, and to the extent, provided for in this Note. Interest shall accrue on the principal balance only.
This Note shall accrue interest at an annual rate of nine percent (9.0%). No payments of principal or interest shall be required hereunder until the Maturity Date, as defined herein. The then unpaid principal balance of this Note, together with any unpaid interest accrued thereon, shall be all due and payable on November 30, 2020 (the “Maturity Date”) unless the Maturity Date is extended by mutual agreement of the parties hereto.
At any time during the term of this Note, the Maker may, without penalty, prepay the unpaid principal balance of this Note, or any portion thereof, along with all interest accrued on the principal balance through and including the date of repayment in the event of a complete repayment of the principal balance. In the event of a partial repayment of the principal balance, interest shall then accrue based on the new principal balance. Maker may also make interest only payments at any time during the term of this Note.
Payee shall have the right, which may be exercised at any time in accordance herewith, to pledge or transfer this Note, and any pledgee or transferee shall have all the rights of Payee and Payee shall be thereafter relieved from any liability with respect to any such pledge or transfer.
On the happening of any of the following events, each of which will constitute an event of default under this Note, all indebtedness, obligations and liabilities of Maker to Payee shall become immediately due and payable at the option of Payee: (1) failure of Maker to pay any payment when due after the expiration of the applicable cure period of ten (10 business days; (2) failure of Maker to perform any agreement or obligation under this Note; (3) filing of any petition in bankruptcy by or against Maker; or (4) application for appointment of a receiver for, making of a general assignment for the benefit of creditors by, or insolvency of Maker. On occurrence of any such event of default and the expiration of any applicable cure period, or at any time thereafter, Payee shall have the remedies of an unsecured party under the laws of the State of Nevada.
Upon the occurrence of any event of default, and the expiration of the cure period of ten (10) business days, that has not been expressly waived by Payee, all principal amounts then due shall bear interest at the default rate of interest, that being fifteen percent (15%) until such time as the obligations hereunder have been satisfied. Payee may waive any event of default before or after the event of default
1
has been declared without impairing its right to declare a subsequent event of default under this Note, this right being a continuing one.
Maker hereby expressly waives presentment, demand of payment, notice of nonpayment, protest and notice of protest of this Note, and all exemptions. If this Note is not paid when due, Maker hereby expressly agrees to pay all costs and expenses of collection, including reasonable attorney’s fees. Payee shall in no event be liable to any party for failure to collect this Note, in whole or in part.
It is the intention of Payee and Maker to comply strictly with any applicable usury laws; and, accordingly, in no event and upon no contingency shall the holder of this Note ever be entitled to receive, collect, or apply as interest any interest, fees, charges or other payments equivalent to interest, in excess of the maximum effective contract rate which Payee may lawfully charge under applicable statutes and laws from time to time in effect; and in the event that the holder hereof ever receives, collects, or applies as interest any such excess, such amount which, but for this provision, would be excessive interest, shall be applied to the reduction of the principal amount of the indebtedness evidenced by this Note; and if the principal amount of the indebtedness evidenced by this Note, all lawful interest thereon and all lawful fees and charges in connection therewith, are paid in full, any remaining excess shall forthwith be paid to Maker, or other party lawfully entitled thereto. All interest paid or agreed to be paid by Maker shall, to the maximum extent permitted under applicable law, be amortized, prorated, allocated and spread throughout the full period until payment in full of the principal so that the interest hereon for such full period shall not exceed the maximum amount permitted by applicable law. Any provision hereof, or of any other agreement between the holder hereof and Maker, that operates to bind, obligate, or compel Maker to pay interest in excess of such maximum effective contract rate shall be construed to require the payment of the maximum rate only. The provisions of this paragraph shall be given precedence over any other provision contained in this Note or in any other agreement between the holder of this Note and Maker that is in conflict with the provisions of this paragraph.
This Note applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Payee shall mean the owner and holder, including pledgees, of this Note, whether or not named as Payee herein. In this Note whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural.
Should a dispute arise between any of the parties hereto regarding the meaning of this Note, the enforcement of this Note or any claim or dispute related to this Note, then the prevailing party, in addition to whatever other relief such party may be entitled to, shall also recover its reasonable attorneys’ fees and costs incurred in connection with such dispute whether such dispute was resolved judicially, by mediation, by arbitration or by any other means, formal or informal.
This Note shall be construed and enforced in accordance with the laws of the State of Nevada without regard to its conflicts of laws principles. The exclusive jurisdiction and venue to hear and determine any claim, dispute or other controversy, of any nature whatsoever, related to this Note, shall be any state or federal court in the County of Washoe, State of Nevada having subject matter jurisdiction over the matters at issue.
2
This Note represents the entire agreement between the parties hereto related to the matters set forth herein and expressly replaces and supersedes any and all previous agreements, oral, or in writing, between the parties hereto related to the matters set forth herein. This Note may not be modified or amended except by an amendment, in writing, executed by all parties hereto.
Time is of the essence in this Note and each and every provision hereof.
If any term, condition or provision of this Note shall be deemed invalid or unenforceable by a court of competent jurisdiction, that term, condition or provision shall be deemed severed from this Note and the remainder of the terms, conditions and provisions of this Note shall remain valid, enforceable and in full force and effect to the fullest extent permitted by law.
MAKER HEREBY, AND PAYEE BY ITS ACCEPTANCE OF THIS NOTE, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS NOTE AND ANY OTHER AGREEMENTS EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY, WHETHER IN CONNECTION WITH THE MAKING OF THIS NOTE, COLLECTION OF THIS NOTE OR OTHERWISE. THIS PROVISION IS A MATERIAL INDUCEMENT FOR PAYEE AGREEING TO ACCEPT THIS NOTE.
IN WITNESS WHEREOF, Maker has executed this Note to be effective as of the date set forth above.
High Sierra Technologies, Inc., a Nevada Corporation
By: /s/ Gregg W. Koechlein
Gregg W. Koechlein, its Chief Operating Officer
3
PROMISSORY NOTE
City of Reno
State of Nevada
July 30, 2020
For value received, High Sierra Technologies, Inc., a Nevada Corporation (the “Maker”), of 1495 Ridgeview Drive, Suite 230A, in the City of Reno, State of Nevada 89519 promises to pay to the order of Vincent C. Lombardi or his successors and assigns, at his principal office located at 979 Westcliff Lane, in the City of Reno, State of Nevada 89523, (the “Payee”), the sum of One Thousand Seven Hundred Hundred Fifty Dollars and No Cents ($1,750.00) together with any interest accrued on the unpaid principal balance as, and to the extent, provided for in this Note. Interest shall accrue on the principal balance only.
This Note shall accrue interest at an annual rate of nine percent (9.0%). No payments of principal or interest shall be required hereunder until the Maturity Date, as defined herein. The then unpaid principal balance of this Note, together with any unpaid interest accrued thereon, shall be all due and payable on November 30, 2020 (the “Maturity Date”) unless the Maturity Date is extended by mutual agreement of the parties hereto.
At any time during the term of this Note, the Maker may, without penalty, prepay the unpaid principal balance of this Note, or any portion thereof, along with all interest accrued on the principal balance through and including the date of repayment in the event of a complete repayment of the principal balance. In the event of a partial repayment of the principal balance, interest shall then accrue based on the new principal balance. Maker may also make interest only payments at any time during the term of this Note.
Payee shall have the right, which may be exercised at any time in accordance herewith, to pledge or transfer this Note, and any pledgee or transferee shall have all the rights of Payee and Payee shall be thereafter relieved from any liability with respect to any such pledge or transfer.
On the happening of any of the following events, each of which will constitute an event of default under this Note, all indebtedness, obligations and liabilities of Maker to Payee shall become immediately due and payable at the option of Payee: (1) failure of Maker to pay any payment when due after the expiration of the applicable cure period of ten (10 business days; (2) failure of Maker to perform any agreement or obligation under this Note; (3) filing of any petition in bankruptcy by or against Maker; or (4) application for appointment of a receiver for, making of a general assignment for the benefit of creditors by, or insolvency of Maker. On occurrence of any such event of default and the expiration of any applicable cure period, or at any time thereafter, Payee shall have the remedies of an unsecured party under the laws of the State of Nevada.
Upon the occurrence of any event of default, and the expiration of the cure period of ten (10) business days, that has not been expressly waived by Payee, all principal amounts then due shall bear interest at the default rate of interest, that being fifteen percent (15%) until such time as the obligations hereunder have been satisfied. Payee may waive any event of default before or after the event of default
1
has been declared without impairing its right to declare a subsequent event of default under this Note, this right being a continuing one.
Maker hereby expressly waives presentment, demand of payment, notice of nonpayment, protest and notice of protest of this Note, and all exemptions. If this Note is not paid when due, Maker hereby expressly agrees to pay all costs and expenses of collection, including reasonable attorney’s fees. Payee shall in no event be liable to any party for failure to collect this Note, in whole or in part.
It is the intention of Payee and Maker to comply strictly with any applicable usury laws; and, accordingly, in no event and upon no contingency shall the holder of this Note ever be entitled to receive, collect, or apply as interest any interest, fees, charges or other payments equivalent to interest, in excess of the maximum effective contract rate which Payee may lawfully charge under applicable statutes and laws from time to time in effect; and in the event that the holder hereof ever receives, collects, or applies as interest any such excess, such amount which, but for this provision, would be excessive interest, shall be applied to the reduction of the principal amount of the indebtedness evidenced by this Note; and if the principal amount of the indebtedness evidenced by this Note, all lawful interest thereon and all lawful fees and charges in connection therewith, are paid in full, any remaining excess shall forthwith be paid to Maker, or other party lawfully entitled thereto. All interest paid or agreed to be paid by Maker shall, to the maximum extent permitted under applicable law, be amortized, prorated, allocated and spread throughout the full period until payment in full of the principal so that the interest hereon for such full period shall not exceed the maximum amount permitted by applicable law. Any provision hereof, or of any other agreement between the holder hereof and Maker, that operates to bind, obligate, or compel Maker to pay interest in excess of such maximum effective contract rate shall be construed to require the payment of the maximum rate only. The provisions of this paragraph shall be given precedence over any other provision contained in this Note or in any other agreement between the holder of this Note and Maker that is in conflict with the provisions of this paragraph.
This Note applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Payee shall mean the owner and holder, including pledgees, of this Note, whether or not named as Payee herein. In this Note whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural.
Should a dispute arise between any of the parties hereto regarding the meaning of this Note, the enforcement of this Note or any claim or dispute related to this Note, then the prevailing party, in addition to whatever other relief such party may be entitled to, shall also recover its reasonable attorneys’ fees and costs incurred in connection with such dispute whether such dispute was resolved judicially, by mediation, by arbitration or by any other means, formal or informal.
This Note shall be construed and enforced in accordance with the laws of the State of Nevada without regard to its conflicts of laws principles. The exclusive jurisdiction and venue to hear and determine any claim, dispute or other controversy, of any nature whatsoever, related to this Note, shall be any state or federal court in the County of Washoe, State of Nevada having subject matter jurisdiction over the matters at issue.
2
This Note represents the entire agreement between the parties hereto related to the matters set forth herein and expressly replaces and supersedes any and all previous agreements, oral, or in writing, between the parties hereto related to the matters set forth herein. This Note may not be modified or amended except by an amendment, in writing, executed by all parties hereto.
Time is of the essence in this Note and each and every provision hereof.
If any term, condition or provision of this Note shall be deemed invalid or unenforceable by a court of competent jurisdiction, that term, condition or provision shall be deemed severed from this Note and the remainder of the terms, conditions and provisions of this Note shall remain valid, enforceable and in full force and effect to the fullest extent permitted by law.
MAKER HEREBY, AND PAYEE BY ITS ACCEPTANCE OF THIS NOTE, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS NOTE AND ANY OTHER AGREEMENTS EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY, WHETHER IN CONNECTION WITH THE MAKING OF THIS NOTE, COLLECTION OF THIS NOTE OR OTHERWISE. THIS PROVISION IS A MATERIAL INDUCEMENT FOR PAYEE AGREEING TO ACCEPT THIS NOTE.
IN WITNESS WHEREOF, Maker has executed this Note to be effective as of the date set forth above.
High Sierra Technologies, Inc., a Nevada Corporation
By: /s/ Gregg W. Koechlein
Gregg W. Koechlein, its Chief Operating Officer
3
PROMISSORY NOTE
City of Reno
State of Nevada
August 10, 2020
For value received, High Sierra Technologies, Inc., a Nevada Corporation (the “Maker”), of 1495 Ridgeview Drive, Suite 230A, in the City of Reno, State of Nevada 89519 promises to pay to the order of Vincent C. Lombardi or his successors and assigns, at his principal office located at 979 Westcliff Lane, in the City of Reno, State of Nevada 89523, (the “Payee”), the sum of Five Thousand Dollars and No Cents ($5,000.00) together with any interest accrued on the unpaid principal balance as, and to the extent, provided for in this Note. Interest shall accrue on the principal balance only.
This Note shall accrue interest at an annual rate of twelve percent (12.0%). No payments of principal or interest shall be required hereunder until the Maturity Date, as defined herein. The then unpaid principal balance of this Note, together with any unpaid interest accrued thereon, shall be all due and payable on November 10, 2020 (the “Maturity Date”) unless the Maturity Date is extended by mutual agreement of the parties hereto.
At any time during the term of this Note, the Maker may, without penalty, prepay the unpaid principal balance of this Note, or any portion thereof, along with all interest accrued on the principal balance through and including the date of repayment in the event of a complete repayment of the principal balance. In the event of a partial repayment of the principal balance, interest shall then accrue based on the new principal balance. Maker may also make interest only payments at any time during the term of this Note.
Payee shall have the right, which may be exercised at any time in accordance herewith, to pledge or transfer this Note, and any pledgee or transferee shall have all the rights of Payee and Payee shall be thereafter relieved from any liability with respect to any such pledge or transfer.
On the happening of any of the following events, each of which will constitute an event of default under this Note, all indebtedness, obligations and liabilities of Maker to Payee shall become immediately due and payable at the option of Payee: (1) failure of Maker to pay any payment when due after the expiration of the applicable cure period of ten (10 business days; (2) failure of Maker to perform any agreement or obligation under this Note; (3) filing of any petition in bankruptcy by or against Maker; or (4) application for appointment of a receiver for, making of a general assignment for the benefit of creditors by, or insolvency of Maker. On occurrence of any such event of default and the expiration of any applicable cure period, or at any time thereafter, Payee shall have the remedies of an unsecured party under the laws of the State of Nevada.
Upon the occurrence of any event of default, and the expiration of the cure period of ten (10) business days, that has not been expressly waived by Payee, all principal amounts then due shall bear interest at the default rate of interest, that being fifteen percent (15%) until such time as the obligations hereunder have been satisfied. Payee may waive any event of default before or after the event of default
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has been declared without impairing its right to declare a subsequent event of default under this Note, this right being a continuing one.
Maker hereby expressly waives presentment, demand of payment, notice of nonpayment, protest and notice of protest of this Note, and all exemptions. If this Note is not paid when due, Maker hereby expressly agrees to pay all costs and expenses of collection, including reasonable attorney’s fees. Payee shall in no event be liable to any party for failure to collect this Note, in whole or in part.
It is the intention of Payee and Maker to comply strictly with any applicable usury laws; and, accordingly, in no event and upon no contingency shall the holder of this Note ever be entitled to receive, collect, or apply as interest any interest, fees, charges or other payments equivalent to interest, in excess of the maximum effective contract rate which Payee may lawfully charge under applicable statutes and laws from time to time in effect; and in the event that the holder hereof ever receives, collects, or applies as interest any such excess, such amount which, but for this provision, would be excessive interest, shall be applied to the reduction of the principal amount of the indebtedness evidenced by this Note; and if the principal amount of the indebtedness evidenced by this Note, all lawful interest thereon and all lawful fees and charges in connection therewith, are paid in full, any remaining excess shall forthwith be paid to Maker, or other party lawfully entitled thereto. All interest paid or agreed to be paid by Maker shall, to the maximum extent permitted under applicable law, be amortized, prorated, allocated and spread throughout the full period until payment in full of the principal so that the interest hereon for such full period shall not exceed the maximum amount permitted by applicable law. Any provision hereof, or of any other agreement between the holder hereof and Maker, that operates to bind, obligate, or compel Maker to pay interest in excess of such maximum effective contract rate shall be construed to require the payment of the maximum rate only. The provisions of this paragraph shall be given precedence over any other provision contained in this Note or in any other agreement between the holder of this Note and Maker that is in conflict with the provisions of this paragraph.
This Note applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Payee shall mean the owner and holder, including pledgees, of this Note, whether or not named as Payee herein. In this Note whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural.
Should a dispute arise between any of the parties hereto regarding the meaning of this Note, the enforcement of this Note or any claim or dispute related to this Note, then the prevailing party, in addition to whatever other relief such party may be entitled to, shall also recover its reasonable attorneys’ fees and costs incurred in connection with such dispute whether such dispute was resolved judicially, by mediation, by arbitration or by any other means, formal or informal.
This Note shall be construed and enforced in accordance with the laws of the State of Nevada without regard to its conflicts of laws principles. The exclusive jurisdiction and venue to hear and determine any claim, dispute or other controversy, of any nature whatsoever, related to this Note, shall be any state or federal court in the County of Washoe, State of Nevada having subject matter jurisdiction over the matters at issue.
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This Note represents the entire agreement between the parties hereto related to the matters set forth herein and expressly replaces and supersedes any and all previous agreements, oral, or in writing, between the parties hereto related to the matters set forth herein. This Note may not be modified or amended except by an amendment, in writing, executed by all parties hereto.
Time is of the essence in this Note and each and every provision hereof.
If any term, condition or provision of this Note shall be deemed invalid or unenforceable by a court of competent jurisdiction, that term, condition or provision shall be deemed severed from this Note and the remainder of the terms, conditions and provisions of this Note shall remain valid, enforceable and in full force and effect to the fullest extent permitted by law.
MAKER HEREBY, AND PAYEE BY ITS ACCEPTANCE OF THIS NOTE, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS NOTE AND ANY OTHER AGREEMENTS EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY, WHETHER IN CONNECTION WITH THE MAKING OF THIS NOTE, COLLECTION OF THIS NOTE OR OTHERWISE. THIS PROVISION IS A MATERIAL INDUCEMENT FOR PAYEE AGREEING TO ACCEPT THIS NOTE.
IN WITNESS WHEREOF, Maker has executed this Note to be effective as of the date set forth above.
High Sierra Technologies, Inc., a Nevada Corporation
By: /s/ Gregg W. Koechlein
Gregg W. Koechlein, its Chief Operating Officer
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PROMISSORY NOTE
City of Reno
State of Nevada
August 12, 2020
For value received, High Sierra Technologies, Inc., a Nevada Corporation (the “Maker”), of 1495 Ridgeview Drive, Suite 230A, in the City of Reno, State of Nevada 89519 promises to pay to the order of Kenny L. DeMeirleir or his successors and assigns, at his principal office located at Stuivenbergbaan 89, 2800 Mechelen, Belgium, (the “Payee”), the sum of Twenty Thousand Dollars and No Cents ($20,000.00) together with any interest accrued on the unpaid principal balance as, and to the extent, provided for in this Note. Interest shall accrue on the principal balance only. This Note shall expressly supersede and replace that certain Note in like amount and terms dated July 31, 2020.
This Note shall accrue interest at an annual rate of sixteen percent (16%). No payments of principal or interest shall be required hereunder until the Maturity Date, as defined herein. The then unpaid principal balance of this Note, together with any unpaid interest accrued thereon, shall be all due and payable on July 31, 2021 (the “Maturity Date”).
At any time during the term of this Note, the Maker may, without penalty, prepay the unpaid principal balance of this Note, or any portion thereof, along with all interest accrued on the principal balance through and including the date of repayment in the event of a complete repayment of the principal balance. In the event of a partial repayment of the principal balance, interest shall then accrue based on the new principal balance. Maker may also make interest only payments at any time during the term of this Note.
Payee shall have the right, which may be exercised at any time in accordance herewith, to pledge or transfer this Note, and any pledgee or transferee shall have all the rights of Payee and Payee shall be thereafter relieved from any liability with respect to any such pledge or transfer.
On the happening of any of the following events, each of which will constitute an event of default under this Note, all indebtedness, obligations and liabilities of Maker to Payee shall become immediately due and payable at the option of Payee: (1) failure of Maker to pay any payment when due after the expiration of the applicable cure period of ten (10) business days; (2) failure of Maker to perform any agreement or obligation under this Note; (3) filing of any petition in bankruptcy by or against Maker; or (4) application for appointment of a receiver for, making of a general assignment for the benefit of creditors by, or insolvency of Maker. On occurrence of any such event of default and the expiration of any applicable cure period, or at any time thereafter, Payee shall have the remedies of an unsecured party under the laws of the State of Nevada.
Upon the occurrence of any event of default, and the expiration of the cure period of ten (10) business days, that has not been expressly waived by Payee, all principal amounts then due shall bear interest at the default rate of interest, that being fifteen percent (15%) until such time as the obligations hereunder have been satisfied. Payee may waive any event of default before or after the event of default has been declared without impairing its right to declare a subsequent event of default under this Note, this right being a continuing one.
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Maker hereby expressly waives presentment, demand of payment, notice of nonpayment, protest and notice of protest of this Note, and all exemptions. If this Note is not paid when due, Maker hereby expressly agrees to pay all costs and expenses of collection, including reasonable attorney’s fees. Payee shall in no event be liable to any party for failure to collect this Note, in whole or in part.
It is the intention of Payee and Maker to comply strictly with any applicable usury laws; and, accordingly, in no event and upon no contingency shall the holder of this Note ever be entitled to receive, collect, or apply as interest any interest, fees, charges or other payments equivalent to interest, in excess of the maximum effective contract rate which Payee may lawfully charge under applicable statutes and laws from time to time in effect; and in the event that the holder hereof ever receives, collects, or applies as interest any such excess, such amount which, but for this provision, would be excessive interest, shall be applied to the reduction of the principal amount of the indebtedness evidenced by this Note; and if the principal amount of the indebtedness evidenced by this Note, all lawful interest thereon and all lawful fees and charges in connection therewith, are paid in full, any remaining excess shall forthwith be paid to Maker, or other party lawfully entitled thereto. All interest paid or agreed to be paid by Maker shall, to the maximum extent permitted under applicable law, be amortized, prorated, allocated and spread throughout the full period until payment in full of the principal so that the interest hereon for such full period shall not exceed the maximum amount permitted by applicable law. Any provision hereof, or of any other agreement between the holder hereof and Maker, that operates to bind, obligate, or compel Maker to pay interest in excess of such maximum effective contract rate shall be construed to require the payment of the maximum rate only. The provisions of this paragraph shall be given precedence over any other provision contained in this Note or in any other agreement between the holder of this Note and Maker that is in conflict with the provisions of this paragraph.
This Note applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Payee shall mean the owner and holder, including pledgees, of this Note, whether or not named as Payee herein. In this Note whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural.
Should a dispute arise between any of the parties hereto regarding the meaning of this Note, the enforcement of this Note or any claim or dispute related to this Note, then the prevailing party, in addition to whatever other relief such party may be entitled to, shall also recover its reasonable attorneys’ fees and costs incurred in connection with such dispute whether such dispute was resolved judicially, by mediation, by arbitration or by any other means, formal or informal.
This Note shall be construed and enforced in accordance with the laws of the State of Nevada without regard to its conflicts of laws principles. The exclusive jurisdiction and venue to hear and determine any claim, dispute or other controversy, of any nature whatsoever, related to this Note, shall be any state or federal court in the County of Washoe, State of Nevada having subject matter jurisdiction over the matters at issue.
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This Note represents the entire agreement between the parties hereto related to the matters set forth herein and expressly replaces and supersedes any and all previous agreements, oral, or in writing, between the parties hereto related to the matters set forth herein. This Note may not be modified or amended except by an amendment, in writing, executed by all parties hereto.
Time is of the essence in this Note and each and every provision hereof.
If any term, condition or provision of this Note shall be deemed invalid or unenforceable by a court of competent jurisdiction, that term, condition or provision shall be deemed severed from this Note and the remainder of the terms, conditions and provisions of this Note shall remain valid, enforceable and in full force and effect to the fullest extent permitted by law.
MAKER HEREBY, AND PAYEE BY ITS ACCEPTANCE OF THIS NOTE, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS NOTE AND ANY OTHER AGREEMENTS EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY, WHETHER IN CONNECTION WITH THE MAKING OF THIS NOTE, COLLECTION OF THIS NOTE OR OTHERWISE. THIS PROVISION IS A MATERIAL INDUCEMENT FOR PAYEE AGREEING TO ACCEPT THIS NOTE.
IN WITNESS WHEREOF, Maker has executed this Note to be effective as of the date set forth above.
High Sierra Technologies, Inc., a Nevada Corporation
By: /s/ Gregg W. Koechlein
Gregg W. Koechlein, its Chief Operating Officer
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