Pineapple, Inc 10-K/A for FY2019

Pineapple, Inc. (PNPL)

10-K/A 2021-08-17 For: 2019-12-31

Added on April 06, 2026

About this 10-K/A

Pineapple, Inc filed this 10-K/A on August 17, 2021, covering the fiscal year ended December 31, 2019 (FY2019).

Headline figures

Fiscal year ended December 31, 2019, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $15K; up 50.0% from $10K a year earlier
Net loss: $1.17M; compared with a net loss of $1.37M a year earlier

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Title of each class		Trading Symbol(s)		Name of principal U.S. market on which traded
n/a		n/a		n/a

Large accelerated filer	[ ]	Accelerated filer	[ ]
Non-accelerated filer	[ ]	Smaller reporting company	[X]
		Emerging growth company	[ ]

PART I

Item 1.	Description of Business	3
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	22
Item 2.	Description of Property	22
Item 3.	Legal Proceedings	22
Item 4.	Mine Safety Disclosures	23

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities	24
Item 6.	Selected Financial Data	25
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	30
Item 8.	Financial Statements	31
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	32
Item 9A.	Controls and Procedures	32
Item 9B.	Other Information	33

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	34
Item 11.	Executive Compensation	37
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	39
Item 13.	Certain Relationships and Related Transactions, and Director Independence	40
Item 14.	Principal Accountant Fees and Services	43

PART IV

Item 15.	Exhibits, Financial Statement Schedules	43
	Signatures	46

	●	30% of a state licensed retail dispensary and cannabis delivery service anticipated to complete construction in Palm Springs in March 2021, along with full operational management duties entitling PVI to 10% of gross revenue on all retail transactions;
	●	30% equity stake of 2 separate state licensed manufacturing entities (not operational yet);
	●	30% of 1 state licensed cultivation entity (not operational yet);
	●	15% of 2 separate state licensed cultivation and manufacturing entities (not operational yet);
	●	15% of 1 state licensed distribution entity (not operational yet);
	●	100% of PineappleWellness.com, a nationwide Hemp CBD retail website;
	●	10% equity plus management fee of 10% of sales of a state licensed retail dispensary and cannabis delivery service (finishing construction in Hollywood, CA in April 2021.

	●	6,000 sq ft of leased space in Palm Springs, CA

	●	3,600 sq ft of leased space in Hollywood, CA

	●	to continued concern on the part of customers, partners, investors, and employees about our financial condition and extended filing delay status;
	●	additional significant time and expense required to complete our remaining filings and the process of seeking the resumption of quotation of our common stock on OTC Markets;
	●	continued distraction of our senior management team and our board of directors as we work to complete our remaining filings and seek to for our common stock to resume being quoted on the OTC Markets;
	●	limitations on our ability to raise capital and make acquisitions; and
	●	general reputational harm as a result of the foregoing.

	●	Our ability to raise sufficient capital to take advantage of opportunities and generate sufficient revenues to cover expenses.

	●	Our ability to source strong opportunities with sufficient risk adjusted returns.

	●	Our ability to manage our capital and liquidity requirements based on changing market conditions generally and changes in the developing legal medical marijuana and recreational marijuana industries.

	●	The acceptance of the terms and conditions of our services.

	●	The amount and timing of operating and other costs and expenses.

	●	The nature and extent of competition from other companies that may reduce market share and create pressure on pricing and investment return expectations.

	●	Adverse changes in the national and regional economies in which we will participate, including, but not limited to, changes in our performance, capital availability, and market demand.

	●	Adverse changes in the projects in which we plan to invest which result from factors beyond our control, including, but not limited to, a change in circumstances, capacity and economic impacts.

	●	Adverse developments in the efforts to legalize marijuana or increased federal enforcement.

	●	Changes in laws, regulations, accounting, taxation, and other requirements affecting our operations and business.

	●	Our operating results may fluctuate from year to year due to the factors listed above and others not listed. At times, these fluctuations may be significant.

	●	implementation of these plans may be delayed or may not be successful;

	●	if PVI’s expanded product offerings and sales channels fail to maintain and enhance our distinctive brand identity, our brand image may be diminished and our sales may decrease; and

	●	implementation of these plans may divert management’s attention from other aspects of our business and place a strain on our management, operational and financial resources, as well as our information systems.

	●	Poor customer service;

	●	Poor execution of operations;

	●	changes in consumer preferences and buying trends relating to internet usage;

	●	changes in required technology interfaces;

	●	website downtime; and

	●	risks related to the failure of the systems that operate the web sites and their related support systems, including computer viruses, theft of customer information, telecommunication failures and electronic break-ins and similar disruptions.

	●	maintain and evaluate a system of internal controls over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC and the Public Company Accounting Oversight Board;

	●	maintain policies relating to disclosure controls and procedures;

	●	prepare and distribute periodic reports in compliance with our obligations under federal securities laws;

	●	institute a more comprehensive compliance function, including corporate governance; and

	●	involve, to a greater degree, our outside legal counsel and accountants in the above activities.

2018	High		Low
Quarter ended December 31	$	1.45	$	0.60
Quarter ended September 30	$	1.37	$	0.25
Quarter ended June 30	$	1.25	$	0.80
Quarter ended March 31	$	1.65	$	0.70

2019	High		Low
Quarter ended December 31	$	1.96	$	0.11
Quarter ended September 30	$	0.55	$	0.26
Quarter ended June 30	$	1.00	$	0.50
Quarter ended March 31	$	1.50	$	0.40

	Sep. 30,			Jun. 30,			Mar. 31,			Sep. 30,			Jun. 30,			Mar. 31,
(In thousands, except per share data)	2019			2019			2019			2018			2018			2018

Revenue	$	-		$	-		$	15,000		$	2,500		$	-		$	-
Cost of revenue		-			-			-			-			-			-

Gross profit		-			-			15,000			2,500			-			-

Operating expenses:
General and administrative		230,038			553,822			124,627			406,073			175,873			186,762
Depreciation		2,157			2,157			2,157			2,157			2,157			2,157

Total operating expenses		232,195			555,979			126,784			408,230			178,030			188,919

Operating loss		(232,195	)		(555,979	)		(111,784	)		(405,730	)		(178,030	)		(188,919	)

Other (income) expense:
Interest expense		35,543			35,543			35,543			53,173			52,493			51,498
Loss on settlement of debt		-			92,400			12,375			-			97,800			-
Change in fair value of derivative liabilities		-			-			-			(336,456	)		(511,475	)		176,626
Other income		-			(631,360	)		-			-			-			-
Loss from equity method investment		61,128			20,733			2,592			-			-			-
Total other (income) expense		96,671			(482,684	)		50,510			(283,283	)		(361,182	)		228,124

Income (loss) from operations before taxes		(328,866	)		(73,295	)		(162,294	)		(122,447	)		183,152			(417,043	)

Provision for income taxes		-			-			-			-			-			-

Net income (loss)	$	(328,866	)	$	(73,295	)	$	(162,294	)	$	(122,447	)	$	183,152		$	(417,043	)

Net loss per share

Basic	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	0.00		$	(0.01	)

Diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	0.00		$	(0.01	)

As of and for the Years Ended December 31, 2019 and 2018

Report of Independent Registered Public Accounting Firm		F-1

Report of Independent Registered Public Accounting Firm		F-2

Consolidated Balance Sheets		F-3

Consolidated Statements of Operations		F-4

Consolidated Statements of Stockholders’ Equity (Deficit)		F-5

Consolidated Statements of Cash Flows		F-6

Notes to Consolidated Financial Statements		F-8

	2019			2018
Assets
Current Assets:
Cash	$	-		$	-
Accounts receivable		-			5,000
Stock subscription receivable		1,000,000			1,000,000
Total Current Assets		1,000,000			1,005,000

Property and equipment (net of depreciation)		21,778			30,407
Operating lease right-of-use asset		40,775			-

Other Assets:
Equity method investment		10,938,715			-
Deposits		7,944			7,944
Total Other Assets		10,946,659			7,944
Total Assets	$	12,009,212		$	1,043,351

Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities:
Accounts payable and accrued liabilities	$	871,528		$	1,093,535
Accrued interest payable		312,182			298,719
Stock subscriptions payable		5,940,720			37,500
Operating lease liability		41,142			-
Unearned revenue		-			310,680
Security deposits		-			470,680
Due to affiliates		39,048			-
Notes payable, related party		2,139,753			1,236,975
Notes payable		19,838			19,838
Advances on agreements		784,000			802,500
Put option payable		1,000,000			1,000,000
Contingent liabilities		140,048			70,531
Total Current Liabilities		11,288,259			5,340,958
Total Liabilities		11,288,259			5,340,958

Commitments and contingencies

Stockholders’ Equity (Deficit):
Preferred stock, $0.0000001 par value, 20,000,000 shares authorized, no shares issued and outstanding		-			-
Series A Convertible Preferred stock, $0.0000001 par value, 5,000,000 shares authorized, no shares issued and outstanding		-			-
Common stock, $0.0000001 par value, 500,000,000 shares authorized, 76,890,925 and 65,862,925 shares issued and outstanding, respectively		7			6
Additional paid-in-capital		14,139,607			7,952,586
Accumulated deficit		(13,418,661	)		(12,250,199	)
Total Stockholders’ Equity (Deficit)		720,953			(4,297,607	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	12,009,212		$	1,043,351

	For the Year Ended			For the Year Ended
	December 31, 2019			December 31, 2018
Revenue	$	15,000		$	10,000

Operating Expenses
General and administrative		1,622,545			984,776
Depreciation		8,629			8,628
Total Operating Expenses		1,631,174			993,404

Operating loss		(1,616,174	)		(983,404	)

Other (Income) Expense
Interest expense		17,588			129,364
Change in fair value of derivative liabilities		-			(323,459	)
Loss on settlement of debt		104,775			75,832
Loss on abandoned projects		-			500,000
Other income		(631,360	)		-
Loss from equity method investment		61,285			-
Total Other (Income) Expense		(447,712	)		381,737

Loss from operations before taxes		(1,168,462	)		(1,365,141	)

Provision for income taxes		-			-

Net Loss	$	(1,168,462	)	$	(1,365,141	)

Net Loss Per Share – Basic and Diluted	$	(0.02	)	$	(0.02	)

Weighted Average Common Shares – Basic and Diluted		73,948,733			64,731,914

	Common Stock				Additional Paid-in-			Accumulated			Total Stockholders’ Equity
	Shares		Amount		Capital			Deficit			(Deficit)
Balance as of January 1, 2018		64,220,425	$	6	$	7,223,211		$	(10,885,058	)	$	(3,661,841	)
Sale of common stock		510,000		-		165,000			-			165,000
Stock-based compensation		922,500		-		459,375			-			459,375
Shares issued for delayed lease obligations		200,000		-		100,000			-			100,000
Charitable donations		10,000		-		5,000			-			5,000
Net loss		-		-		-			(1,365,141	)		(1,365,141	)
Balance as of December 31, 2018		65,862,925	$	6	$	7,952,586		$	(12,250,199	)	$	(4,297,607	)

Balance as of January 1, 2019		65,862,925	$	6	$	7,952,586		$	(12,250,199	)	$	(4,297,607	)
Common stock issued for prior year subscriptions		5,000		-		2,500			-			2,500
Common stock issued for compensation		535,000		-		295,500			-			295,500
Common stock issued for settlements of debt and payables		488,000		-		220,400			-			220,400
Gain on settlements of related party payables		-		-		156,251			-			156,251
Gain on settlement of related party note payable		-		-		14,871			-			14,871
Refund of additional paid-in-capital		-		-		(2,500	)		-			(2,500	)
Issuance of common shares for equity method investment		10,000,000		1		5,499,999			-			5,500,000
Net loss		-		-		-			(1,168,462	)		(1,168,462	)
Balance as of December 31, 2019		76,890,925	$	7	$	14,139,607		$	(13,418,661	)	$	720,953

Name of Consolidated Subsidiary or Entity	State or Other Jurisdiction of Incorporation or Organization	Date of Incorporation or Formation (Date of Acquisition, if Applicable)	Attributable Interest
THC Industries, LLC	California	12/23/2015 (formed) 2/16/2016 (acquired by us)		100	%

Pineapple Express Consulting, Inc.	California	3/16/2017		100	%

	Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

	Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

	Level 3	Pricing inputs that are generally observable inputs and not corroborated by market data.

	2019		2018
Unearned revenue, beginning of year	$	310,680	$	160,680
Customer deposits received		-		150,000
Customer deposits returned		150,000
Other income recognized		160,680		-
Unearned revenue, end of year	$	-	$	310,680

	2019			2018
Furniture and fixtures	$	43,152		$	43,152
Office equipment		12,321			12,231
Subtotal		55,473			55,473
Less accumulated depreciation		(33,695	)		(25,066	)
Property and equipment, net	$	21,778		$	30,407

Revenue	$	42,326
Cost of goods sold		1,618
Gross margin		40,708
Operating expenses		323,979
Net loss	$	(283,271	)

Noteholder	Due	Interest Rate			Secured	December 31, 2019		December 31, 2018
Sky Island, Inc.	Demand		0	%	No	$	1,757,124	$	1,203,271
Matt Feinstein	Demand		0	%	No		2,249		13,704
Eric Kennedy	Demand		0	%	No		30,000		-
Rob Novinger	Demand		0	%	No		25,000		20,000
Neu-Ventures, Inc.	Demand		0	%	No		325,280		-
Total						$	2,139,753	$	1,236,975

(1) dividend yield of		0	%
(2) expected volatility of		150.00	%
(3) risk-free interest rate of		1.53	%
(4) expected life of		0.61 years
(5) fair value of the Company’s common stock of	$	0.50

	2019			2018
U.S. federal statutory tax rate		21.0	%		21.0	%
State tax, net of federal tax benefit		6.9	%		6.1	%
Related party interest		(0.3	)%		(2.8	)%
Change in valuation allowance		(27.6	)%		(24.3	)%
Other		0.0	%		(0.0	)%
Total deferred tax assets		0.0	%		0.0	%

	2019			2018
Net operating loss carryforwards	$	1,381,962		$	995,849
Stock-based compensation		682,937			600,245
Accruals and reserves		1,501,833			1,648,684
Fixed assets		2,185			2,185
Total deferred tax assets		3,568,918			3,246,964
Valuation allowance		(3,568,918	)		(3,246,964	)
Net deferred tax assets	$	-		$	-

(In thousands, except per share data)	(Unaudited) Sep. 30, 2019			(Unaudited) Jun. 30, 2019			(Unaudited) Mar. 31, 2019			(Unaudited) Sep. 30, 2018			(Unaudited) Jun. 30 2018,			((Unaudited) Mar. 31, 2018

Revenue	$	-		$	-		$	15,000		$	2,500		$	-		$	-
Cost of revenue		-			-			-			-			-			-

Gross profit		-			-			15,000			2,500			-			-

Operating expenses:
General and administrative		230,038			553,822			124,627			406,073			175,873			186,762
Depreciation		2,157			2,157			2,157			2,157			2,157			2,157

Total operating expenses		232,195			555,979			126,784			408,230			178,030			188,919

Operating loss		(232,195	)		(555,979	)		(111,784	)		(405,730	)		(178,030	)		(188,919	)

Other (income) expense:
Interest expense		35,543			35,543			35,543			53,173			52,493			51,498
Loss on settlement of debt		-			92,400			12,375			-			97,800			-
Change in fair value of derivative liabilities		-			-			-			(336,456	)		(511,475	)		176,626
Other income		-			(631,360	)		-			-			-			-
Loss from equity method investment		61,128			20,733			2,592			-			-			-
Total other (income) expense		96,671			(482,684	)		50,510			(283,283	)		(361,182	)		228,124

Income (loss) from operations before taxes		(328,866	)		(73,295	)		(162,294	)		(122,447	)		183,152			(417,043	)

Provision for income taxes		-			-			-			-			-			-

Net income (loss)	$	(328,866	)	$	(73,295	)	$	(162,294	)	$	(122,447	)	$	183,152		$	(417,043	)

Net loss per share

Basic	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	0.00		$	(0.01	)

Diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	0.00		$	(0.01	)

	●	the Company does not have written documentation of its internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”);

	●	the Company does not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to the Company’s limited size and early stage nature of operations, segregation of all conflicting duties may not always be possible and may not be economically feasible; however, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals;

	●	the Company does not have an audit committee of its board of directors; and

	●	insufficient monitoring and review controls over the financial reporting closing process, including the lack of individuals with current knowledge of U.S. GAAP.

Name	Age	Position
Shawn Credle	39	Chief Executive Officer
Joshua Eisenberg	32	Chief Operating Officer
Gianmarco Rullo*	43	Chief Strategy Officer
Matthew Feinstein	50	Interim Chief Financial Officer, Director
Dr. Randy Hurwitz	69	Director
Eric Kennedy**	45	Director

Name and Principal Position	Fiscal Year ended December 31		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Matthew Feinstein,
Interim Chief Financial Officer, Secretary, Chairman of the Board and Director		2019	$	117,000		-		-		-		-		-		-	$	117,000

Joshua Eisenberg, COO		2019	$	43,500		-		-		-		-		-			$	43,500
Matthew Feinstein,
Interim Chief Financial Officer, Secretary, Chairman of the Board and Director		2018	$	180,000		-		-				-		-		-	$	180,000

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)			Option Awards ($)		Non-equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Dr. Randy Hurwitz	$	10,500		—			—		—		—		—		—
Shawn Credle (1)		—		—			—		—		—		—		—
Eric Kennedy	$	30,000	$	18,900	(2)		—		—		—		—	$	48,900
Matthew Feinstein (1)		—		—			—		—		—		—		—

Name of Beneficial Owner	Amount of Common Stock Beneficially Owned and Nature of Beneficial Ownership			Percentage of Class
5% or Greater Stockholders

Jaime Ortega		45,790,000	(1)		51.76	%
Anna Mikhaylova		7,273,000			8.22	%

Directors and Executive Officers

Shawn Credle		500,000			*
Joshua Eisenberg		5,000,000			5.65	%
Matthew Feinstein		7,100,000			8.02	%
Dr. Randy Hurwitz		545,000			*
Gianmarco Rullo		240,000			*
All current directors and executive officers as a group (5 persons)		13,385,000			16.08	%

Related Party	Relationship	Note	Date	Description
Sky Island, Inc.	Common ownership; wholly-owned entity by majority shareholder Jaime Ortega	See Note 7	Since 2015 through 2019	Since January 1, 2018 to December 31, 2019, the Company increased the Sky Island promissory notes from a beginning balance of $1,158,000 to a closing balance of $1,757,124 from additional advances and payments on behalf of the Company. $1,757,124 and $1,203,271 outstanding as of December 31, 2019 and 2018, respectively.

Neu-Ventures, Inc.	Common ownership; wholly-owned entity by majority shareholder Jaime Ortega	See Note 7	2019	Beginning in April 2019, the Company also began receiving advances from Neu-Ventures, Inc., another entity owned by our majority shareholder, Mr. Ortega. Advances from Neu-Ventures between April and December 2019 totaled $325,380. These advances are due on demand and do not incur interest. $325,380 and $0 outstanding as of December 31, 2019 and 2018, respectively.

Pineapple Ventures Inc.	Common ownership	See Note 2 and Note 5	2018 and 2019	Consulting Income for Marketing, Website Development, etc. ($15,000 in 2019; $10,000 in 2018). In November 2018, the Company entered into a Consulting Services Agreement with Pineapple Ventures Inc. (“PVI”) to create a marketing campaign, create influencer relationships, and consult on website and app design and 3rd party vendors in exchange for $5,000 per month beginning in November 2018. The agreement term is for 1 year, reverting to a month-to-month term thereafter. A total of $10,000 was billed and recognized as revenue in 2018 for November and December consulting income. PEC billed and recognized an additional $15,000 for consulting in January – March 2019. In April 2019, the Company entered into an agreement to invest in PVI, at which point the Consulting Services Agreement with PEC was terminated. No further revenue from this agreement was recognized in 2019. Licensing Agreement In September 2018, the Company entered into a Website Licensing Agreement with PVI to license its www.pineappleexpress.com website, including the proprietary Uniform Resource Locator, to be developed and actively utilized in distributing content, selling products/services, and hosting social media predominantly in the cannabis space. The agreement includes an initial licensing fee upon execution of the agreement of $150,000 payable from the licensee to the licensor. The agreement also includes a revenue share equal to the greater of 10% of net income or 5% of gross revenue. Monthly statements shall be tendered to licensor along with checks for revenue share at 5% of gross revenue. An additional payment shall be tendered to Licensor within 45 days of year end should 10% of net income calculations result in an additional amount owed. The agreement also includes annual minimum revenue share payments of $300,000 during the first 2 years, $350,000 during the third year, and $400,000 for all years thereafter. The $150,000 initial payment under the agreement was not paid in cash; however, the Company credited the amount against the principal of the outstanding Sky Island note. As of December 31, 2018, the Company has not appropriately fulfilled its obligation to provide access and administration for the website. Thus, the Company has determined it is appropriate to still not recognize this revenue during 2018. No other payments have been received since the initial licensee fee. In April 2019, as a result of the Company’s investment in PVI, the licensing contract entered into with PVI in 2018 was terminated and the $150,000 customer deposit received in 2018 from PVI was returned.

				50% Equity Investment Loss ($61,285 in 2019; $0 in 2018) In April 2019, the Company acquired a 50% investment in PVI in exchange for 20,000,000 shares of common stock. The investment has been accounted for under the equity method. In addition to having a direct investment, the Company also noted that common ownership with PVI represents an additional variable interest. However, it was determined that the Company does not have the power to direct the activities that most significantly impact PVI’s economic performance, and therefore, the Company is not the primary beneficiary of PVI and PVI has not been consolidated under the variable interest model. The investment was recorded at cost, which was determined to be $11,000,000 based on a value of $0.55 per share. A total of 10,000,000 shares of common stock were issued as of December 31, 2019. The remaining 10,000,000 shares were issued in January 2020, subsequent to year-end, and are recorded as a stock subscription payable at December 31, 2019. Based on its 50% equity investment, the Company has recorded a loss from equity investment of $61,285 for the year ended December 31, 2019, which has reduced the carrying value of the investment as of December 31, 2019 to $10,938,715. Advances for Monthly Rent Payments ($42,856 in 2019; $0 in 2018). In August 2019, PVI began advancing funds for payment of the Company’s monthly office rent. Total advances through December 31, 2019 were $42,856.

Matthew Feinstein	Owner; Interim Chief Financial Officer, Director	See Note 5 and Note 8	Since 2016 through 2019	Cash compensation for services provided ($117,000 in 2019; $180,000 in 2018) In September 2016, the Company received a $50,000 loan from Matthew Feinstein, Director. This loan and any subsequent advances are due on demand and do not incur interest. The Company received additional advances from Mr. Feinstein during the years ended December 31, 2019 and 2018 of $3,416 and $2,096, respectively. During 2019, Mr. Feinstein agreed to reduce the note balance by $14,871, which has been recorded as a gain on settlement of related party debt in the consolidated statements of stockholders’ equity (deficit). $2,249 and $13,704 outstanding as of December 31, 2019 and 2018, respectively.

				Matthew Feinstein is also a guarantor of the Company’s note payable with Kabbage, Inc.

Eric Kennedy	Owner; Director	See Note 7 and Note 11	2018 and 2019	Cash compensation for services provided ($30,000 in 2019; $0 in 2018). Stock-based compensation for services provided ($18,900 in 2019; $270,625 in 2018). In May 2019, the Company agreed to a settlement with Eric Kennedy, a Director, related to deferred cash compensation that had been accrued for in the Company’s accounts payable and accrued liabilities to reduce the amount to $35,000, resulting in a gain on settlement of related party payables of $36,000, which has been recorded in the consolidated statements of stockholders’ equity (deficit). Therefore, the $35,000 was reclassified to related party notes payable. The note does not incur interest and was originally to be repaid through an initial $10,000 payment with monthly payments of $5,000 thereafter, but the Company was only able to make one $5,000 payment, reducing the balance to $30,000 as of December 31, 2019.

Shawn Credle	Owner; Chief Executive Officer	See Note 11	2019	Cash compensation for services provided ($36,000 in 2019; $0 in 2018) Stock-based compensation for services provided ($275,000 in 2019; $0 in 2018).

Jamie Ortega	Owner	See Note 11	2019	$8,250,000 in Company’s shares granted for the equity investment in PVI during 2019; $2,750,000 of equity issued during 2019; $5,500,000 remains as stock subscription payable as of December 31, 2019.

Joshua Eisenberg	Owner; Chief Operating Officer	See Note 11	2019	Cash compensation for services provided ($43,500 in 2019; $0 in 2018). $2,750,000 in Company’s shares granted for the equity investment in PVI during 2019; $2,750,000 of equity issued during 2019.

Joy DiPalma	Owner	See Note 9	Since 2016 through 2019	Advanced $187,500 to PP in 2016, entered into a settlement agreement in February 2019. $169,000 and $187,500 outstanding as of December 31, 2019 and 2018, respectively.

Hawkeye	Owner	See Note 9	Since 2015 through 2019	Initial advance of $750,000 in 2015, net of revenue share payments and penalties the balance at December 31, 2017 was $717,200. In 2018, land was transferred to Hawkeye to reduce the liability by $200,000 and a settlement amount of $615,000 was agreed upon, resulting in a loss from debt settlement of $98,700. $615,000 and $615,000 outstanding as of December 31, 2019 and 2018, respectively.

Rob Novinger	Owner	See Note 7	Since 2016 through 2019	Original loan balance of $30,000, $10,000 repaid in 2017 and $5,000 more loaned in 2019. $25,000 and $20,000 outstanding as of December 31, 2019 and 2018, respectively.

Randall Webb	Owner		Since 2017	On June 19, 2017, the Company entered into a Revenue Sharing Agreement with Randall Webb to sell a 10% share in all royalty income generated from the licensing of the www.THC.com website in perpetuity in exchange for $150,000. The payment of $150,000 was received on June 21, 2017 and was recognized as income for 2017 as there is no fixed term for the agreement and it continues into perpetuity. No revenue recognized during 2019 and 2018.