Pineapple, Inc 10-K for FY2020

Pineapple, Inc. (PNPL)

10-K 2021-10-04 For: 2020-12-31

Added on April 06, 2026

About this 10-K

Pineapple, Inc filed this 10-K on October 4, 2021, covering the fiscal year ended December 31, 2020 (FY2020).

Headline figures

Fiscal year ended December 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $1.15M; compared with a net loss of $1.17M 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	☒
		Emerging growth company	☒

PART I

Item 1.	Description of Business	3
Item 1A.	Risk Factors	13
Item 1B.	Unresolved Staff Comments	28
Item 2.	Description of Property	28
Item 3.	Legal Proceedings	28
Item 4.	Mine Safety Disclosures	30

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities	31
Item 6.	Selected Financial Data	32
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	38
Item 8.	Financial Statements	39
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	40
Item 9A.	Controls and Procedures	40
Item 9B.	Other Information	41

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	42
Item 11.	Executive Compensation	45
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	47
Item 13.	Certain Relationships and Related Transactions, and Director Independence	48
Item 14.	Principal Accountant Fees and Services	51

PART IV

Item 15.	Exhibits, Financial Statement Schedules	52
	Signatures	55

	●	30% of a state-licensed cannabis delivery service in Los Angeles, CA, along with full operational management duties entitling PVI to 10% of gross revenue on all retail transactions.
	●	30% of a state-licensed retail dispensary and cannabis delivery service in Palm Springs, which construction should be completed in September 2021, along with full operational management duties entitling PVI to 10% of gross revenue on all retail transactions.
	●	30% equity stake of two (2) separate state-licensed manufacturing entities (not operational yet).
	●	30% of one (1) state-licensed cultivation entity (not operational yet);
	●	15% of two (2) separate state-licensed cultivation and manufacturing entities and 15% of one (1) state-licensed distribution entity. In June 2020, the three entities sold their cannabis licenses for aggregate $2.87 million, of which approximately $431k was recognized by PVI.

	●	100% of PineappleWellness.com, a nationwide Hemp Cannabidiol (“CBD”) retail website;
	●	10% equity plus management fee of 10% of sales of a state-licensed retail dispensary and cannabis delivery service (anticipating finishing construction in Hollywood, CA in October 2021).

	■	9,859 sq ft of leased space in Los Angeles, CA
	■	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 re-listing of our common stock on OTCQB;
	●	continued distraction of our senior management team and our board of directors as we work to complete our remaining filings and seek to re-list our common stock;
	●	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.

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

2020	High		Low
Quarter ended December 31	$	1.00	$	0.11
Quarter ended September 30	$	0.80	$	0.05
Quarter ended June 30	$	0.70	$	0.08
Quarter ended March 31	$	0.70	$	0.05

As of and for the Years Ended December 31, 2020, and 2019

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		F-5

Consolidated Statements of Cash Flows		F-6

Notes to Consolidated Financial Statements		F-8

	2020			2019
Assets
Current Assets:
Stock subscription receivable	$	-		$	1,000,000
Total Current Assets		-			1,000,000

Property and equipment (net of depreciation)		14,917			21,778
Operating lease right-of-use asset		-			40,775

Other Assets:
Equity method investment		9,488,616			10,938,715
Deposits		-			7,944
Total Other Assets		9,488,616			10,946,659
Total Assets	$	9,503,533		$	12,009,212

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable and accrued liabilities	$	869,911		$	871,528
Settlement payable related party		615,000			-
Accrued interest payable related party		45,637			305,411
Accrued interest payable other		6,771			6,771
Stock subscriptions payable		-			5,940,720
Operating lease liability		-			41,142
Due to affiliates		90,556			39,048
Notes payable, related party		857,175			2,139,753
Notes payable		19,838			19,838
Advances on agreements		169,000			784,000
Put option payable		-			1,000,000
Contingent liabilities		100,048			140,048
Total Current Liabilities		2,773,936			11,288,259
Total Liabilities		2,773,936			11,288,259

Commitments and contingencies (note 13)

Stockholders’ Equity:
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, 88,461,200 and 76,890,925 shares issued and outstanding, respectively		8			7
Additional paid-in-capital		21,297,078			14,139,607
Accumulated deficit		(14,567,489	)		(13,418,661	)
Total Stockholders’ Equity		6,729,597			720,953
Total Liabilities and Stockholders’ Equity	$	9,503,533		$	12,009,212

	2020			2019
Revenue	$	-		$	15,000

Operating Expenses
General and administrative		661,557			1,622,545
Depreciation		6,861			8,629
Total Operating Expenses		668,418			1,631,174

Operating loss		(668,418	)		(1,616,174	)

Other (Income) Expense
Interest expense		53,821			17,588
Loss (gain) on settlement of debt		(25,000	)		104,775
Other expense (income)		63,490			(631,360	)
Loss from equity method investment		388,099			61,285
Total Other (Income) Expense		480,410			(447,712	)

Loss from operations before taxes		(1,148,828	)		(1,168,462	)

Provision for income taxes		-			-

Net Loss	$	(1,148,828	)	$	(1,168,462	)

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

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

	Common Stock				Additional Paid-in-			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Deficit			Equity
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	)		(1,168,452	)
Balance as of December 31, 2019		76,890,925	$	7	$	14,139,607		$	(13,418,661	)	$	720,953

Balance as of January 1, 2020		76,890,925	$	7	$	14,139,607		$	(13,418,661	)	$	720,953
Common stock issued for service		490,000		-		80,800			-			80,800
Common stock issued for settlement of debt and payables		1,080,275		-		1,546,223			-			1,546,223
Issuance of common shares for equity method investment		10,000,000		1		5,499,999			-			5,500,000
Settlement of debt with related party		-		-		30,449			-			30,449
Net loss		-		-		-			(1,148,828	)		(1,148,828	)
Balance as of December 31, 2020		88,461,200	$	8	$	21,297,078		$	(14,567,489	)	$	6,729,597

	2020			2019
Cash Flows from Operating Activities
Net loss	$	(1,148,828	)	$	(1,168,462	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		6,861			8,629
Non-cash settlement penalties		5,851			-
Amortization right-of-use asset		40,775			101,973
Repayment of lease obligations		(41,142	)		(101,606	)
Income from Mutual Release Agreement		-			(631,360	)
Loss from equity method investment		388,099			61,285
Loss on settlement of debt		-			104,775
Interest expense - debt settlements		-			4,125
Stock-based compensation		66,303			293,900
Changes in operating assets and liabilities:
Accounts receivable		-			5,000
Security deposit		7,944			-
Accounts payable and accrued liabilities		25,888			398,526
Accrued interest payable		53,117			13,463
Stock subscriptions payable		-			447,320
Due to affiliates		51,508			39,048
Contingent liabilities		-			69,517
Net cash used in operating activities		(543,624	)		(353,867	)

Cash Flows from Financing Activities
Proceeds from related party notes payable		551,824			387,367
Repayments of related party notes payable		(8,200	)		(1,000	)
Repayments of advances on agreements		-			(30,000	)
Refund of additional paid-in-capital		-			(2,500	)
Net cash provided by financing activities		543,624			353,867

Net change in cash		-			-

Cash, beginning of year		-

Cash, end of year	$	-		$	-

	2020		2019
Supplemental Disclosures of Cash Flow Information

Cash paid for interest:	$	-	$	-
Cash paid for taxes:	$	-	$	-

Supplemental Disclosures of Non-Cash Investing and Financing Activities

Stock issued in exchange for equity method investment	$	-	$	11,000,000
Common stock issued for settlements	$	-	$	88,000
Accounts payable and accrued liabilities adjusted to related party notes payable	$	-	$	381,282
Gain on settlements of related party payables	$	-	$	156,251
Deferred revenue adjusted to related party note payable	$	-	$	150,000
Gain on settlement of related party note payable	$	2,944	$	14,871
Common stock issued for prior year subscriptions	$	-	$	57,500
Settlement of debt for intangible property	$	1,000,000		-
Equity method investment exchanged for forgiveness of related party note payable	$	1,062,000	$	-
Common stock issued from prior year settlements	$	440,200	$	-
Common stock issued for prior year equity method investment	$	5,500,000	$	-
Common stock issued for debt extinguishment	$	120,000	$	-
Right-of-use asset and lease liability from the adoption of ASU 2016-02	$	-	$	122,985

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 Park, LLC	California	6/27/2017		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.

	2020		2019
Unearned revenue, beginning of year	$	-	$	310,680
Customer deposits received		-		-
Customer deposits returned		-		150,000
Other income recognized		-		160,680
Unearned revenue, end of year	$	-	$	-

	2020			2019
Furniture and fixtures	$	43,152		$	43,152
Office equipment		12,321			12,231
Subtotal		55,473			55,473
Less accumulated depreciation		(40,556	)		(33,695	)
Property and equipment, net	$	14,917		$	21,778

	2020			2019
Income statement
Revenue	$	620,337		$	42,326
Cost of goods sold		2,565			1,618
Gross margin		617,772			40,708
Operating expenses		(1,471,271	)		(323,979	)
Net loss	$	(853,499	)		(283,271	)

Balance sheet
Current assets	$	77,402		$	69,905
Non-current assets	$	163,109		$	119,957
Current liabilities	$	1,280,251		$	483,418
Non-current liabilities	$	-		$	-

Noteholder	Due		Interest Rate			Secured		2020		2019
Sky Island, Inc.		Demand		0	%		No	$	8,015	$	1,757,124
Matt Feinstein		Demand		0	%		No		-		2,249
Eric Kennedy		Demand		0	%		No		30,000		30,000
Rob Novinger		Demand		0	%		No		30,851		25,000
Neu-Ventures, Inc.		Demand		0	%		No		788,309		325,280
Total								$	857,175	$	2,139,753

(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

	2020			2019
U.S. federal statutory tax rate		21.0	%		21.0	%
State tax, net of federal tax benefit		6.6	%		6.9	%
Related party interest		(1.0	)%		(0.3	)%
Change in valuation allowance		(26.6	)%		(27.6	)%
Other		0.0	%		0.0	%
Total deferred tax assets		0.0	%		0.0	%

	2020			2019
Net operating loss carryforwards	$	1,654,858		$	1,381,962
Stock-based compensation		705,408			682,937
Accruals and reserves		1,494,837			1,501,833
Other		17,867			-
Fixed assets		2,185			2,185
Total deferred tax assets		3,875,155			3,568,918
Valuation allowance		(3,875,155	)		(3,568,918	)
Net deferred tax assets	$	-		$	-

	●	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	40	Chief Executive Officer
Joshua Eisenberg	34	Chief Operating Officer
Gianmarco Rullo*	44	Chief Strategy Officer
Matthew Feinstein	52	Interim Chief Financial Officer, Director
Dr. Randy Hurwitz	70	Director
Eric Kennedy**	47	Director
Katherine Hill***	34	Director

	■	Matthew Feinstein, Interim Chief Financial Officer, Chairman, Secretary and Director.
	■	Shawn Credle, Chief Executive Officer.
	■	Joshua Eisenberg, Chief Operating Officer.

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, Chief Financial Officer, Secretary, Chairman of the Board and Director		2020	$	108,000		-		-		-		-		-		-	$	108,000

Shawn Credle, Chief Executive Officer		2020	$	48,000		-		-		-		-		-		-	$	48,000

Joshua Eisenberg, Chief Operating Officer		2020	$	48,000		-		-		-		-		-		-	$	48,000

Shawn Credle, Chief Executive Officer		2019	$	36,000		-	$	275,000		-		-		-		-	$	311,000

Joshua Eisenberg, Chief Operating Officer		2019	$	43,500		-		-		-		-		-		-	$	43,500

Matthew Feinstein, Interim Chief Financial Officer, Secretary, Chairman of the Board and Director		2019	$	117,000		-		-		-		-		-		-	$	117,000

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 (3)	$	18,000		10,824		-		-		-		-	$	28,824
Shawn Credle (1)		-		-		-		-		-		-		-
Eric Kennedy (2)	$	22,500	$	44,000		-		-		-		-	$	66,500
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		43,914,000	(1)		48.92	%
Anna Mikhaylova		7,273,000			8.10	%

Directors and Executive Officers

Shawn Credle		500,000			*
Joshua Eisenberg		5,000,000			5.57	%
Matthew Feinstein		7,100,000			7.91	%
Dr. Randy Hurwitz		595,000			*
Gianmarco Rullo		500,000			*
Katherine Hill		40,000
All current directors and executive officers as a group (6 persons)		13,735,000			15.30	%

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 2020	Since January 1, 2020, to December 31, 2020, the Company decreased the Sky Island promissory notes from a beginning balance of $1,757,124 to a closing balance of $8,015. The Company entered into an Asset Purchase and Sale Agreement on September 4, 2019 (the “APA”) followed by a Letter Agreement on March 2, 2020, and closing on April 20, 2020, where the Company sold the domain “THC.com”, the trademarks bearing the “THC” name, and the URL “pineappleexpress.com” to Mr. Ortega in exchange for the cancellation of $1,000,000 of Sky Island notes payable. Subsequently, on December 17, 2020, the parties entered into a Recission Agreement pursuant to which the parties cancelled and rescinded the APA and all ancillary agreements. Accordingly, the intellectual property subject to the APA was returned to the Company and $1,000,000 of debt owed to Sky Island was returned to the books and records of the Company. In January 2020, the Company entered into an agreement to reduce the outstanding loan by $1,062,000, first applied to accrued interest of $312,891, in exchange for ownership in the Company’s equity method investment.

Neu-Ventures, Inc.	Common ownership; wholly owned entity by majority shareholder Jaime Ortega	See Note 7	2019 and 2020	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 for the years ended December 31, 2020, and 2019, totaled $552,028 and $325,380, respectively. The Company issued 525,000 common shares for extinguishment with a value of $120,000. The Company made a $9,000 cash payment during the year ended December 31, 2020. Neu Ventures Inc. paid $40,000 litigation settlement on behalf of the Company. These advances are due on demand and do not incur interest. $788,308 and $325,380 outstanding as of December 31, 2020, and 2019, respectively.

Pineapple Ventures Inc.	Common ownership	See Note 2 and Note 5	Since 2018 through 2020	Consulting Income for Marketing, Website Development, etc. ($0 in 2020; $15,000 in 2019). 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 2020 and 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% (subsequently reduced to 45.17%) Equity Investment Loss ($388,099 in 2020; $61,285 in 2019) In April 2019, the Company acquired a 50% investment in PVI in exchange for 20,000,000 shares of common stock. During the year ended December 31, 2020, Jaime Ortega purchased back approximately 4.53% of the PVI shares for $1,000,000 in settlement of his existing note, bringing down the Company’s investment in PVI at 45.47% 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, and were recorded as a stock subscription payable at December 31, 2019. Based on its 45.17% equity investment, the Company has recorded a loss from equity investment of $388,099 and $61,285 for the year ended December 31, 2020, and 2019, respectively, which has reduced the carrying value of the investment as of December 31, 2020, and December 31, 2019, to $9,488,616 and $10,938,715, respectively. Advances for Monthly Rent Payments ($22,470 in 2020; $42,856 in 2019). 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. Total advances through December 31, 2020, were $22,470.

Matthew Feinstein	Owner; Interim Chief Financial Officer, Director	See Note 7	Since 2016 through 2020	Cash compensation for services provided ($108,000 in 2020; $117,000 in 2019) 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, 2020, and 2018 of $696 and $3,416, 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. During 2020, Mr. Feinstein agreed to cancel the remaining balance of $2,944, which was recorded in additional paid-in capital. During 2020, Mr. Feinstein agreed to cancel the remaining balance of accounts payable of $27,505, which was recorded in additional paid-in capital. $0 and $2,249 are outstanding as of December 31, 2020, and 2019, 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 through 2020	Cash compensation for services provided ($22,500 in 2020; $30,000 in 2019). Stock-based compensation for services provided ($30,000 in 2020; $18,900 in 2019). In May 2019, the Company agreed to a settlement with Eric Kennedy, a Company’s 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. 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, 2020. No activity during the fiscal year ended December 31, 2020.