PWDY 10-K
Powerdyne International, Inc. (PWDY)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the fiscal year ended
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to ____________
Commission
file number
(Exact name of registrant as specified in its charter)
State or other jurisdiction of incorporation or organization |
I.R.S. Employer Identification No. |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act: None
Securities
registered pursuant to Section 12(g) of the Act:
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller
reporting company | |
| Emerging
growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended 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 has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐
As
of December 31, 2021, the aggregate market value of the registrant’s voting common stock held by non-affiliates of the registrant
was $
As of, February 14 the registrant had shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
TABLE OF CONTENTS
| i |
CAUTIONARY NOTE FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K Annual Report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this Annual Report on Form 10-K, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important cautionary statements in this Annual Report on Form 10-K, particularly in the “Risk Factors” section, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
You should read this Annual Report on Form 10-K and the documents that we have filed as exhibits to this Annual Report on Form 10-K with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Annual Report on Form 10-K are made as of the date of this Annual Report on Form 10-K, and we do not assume any obligation to update any forward-looking statements except as required by applicable law.
References to “Powerdyne”, “the Company”, “the company”, “we,” “our” and “us” refer to Powerdyne International Inc., unless the context otherwise requires.
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
When this Annual Report on Form 10-K becomes effective, we will begin to file reports, proxy statements, information statements and other information with the United States Securities and Exchange Commission, or SEC. You may read and copy this information, for a copying fee, at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information on its Public Reference Room. Our SEC filings will also be available to the public from commercial document retrieval services, and at the website maintained by the SEC at http://www.sec.gov.
Our Internet website address is http://www.powerdyneinternational.com. Information contained on the website does not constitute part of this Annual Report on Form 10-K. We have included our website address in this Annual Report on Form 10-K solely as an inactive textual reference. When this Annual Report on Form 10-K is effective, we will make available, through a link to the SEC’s website, electronic copies of the materials we file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, the Section 16 reports filed by our executive officers, directors and 10% stockholders and amendments to those reports.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-K contains forward-looking statements that may be affected by matters outside our control that could cause materially different results.
There are statements in this Annual Report on Form 10-K that are not historical facts. These “forward-looking statements” can be identified by use of terminology such as “believe,” “hope,” “may,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy” and similar expressions. You should be aware that these forward-looking statements are subject to risks and uncertainties that are beyond our control. For a discussion of these risks, you should read this entire Annual Report on Form 10-K carefully, especially the risks discussed under the section entitled “Risk Factors.” Although management believes that the assumptions underlying the forward-looking statements included in this Annual Report on Form 10-K are reasonable, they do not guarantee our future performance, and actual results could differ from those contemplated by these forward-looking statements. The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. In light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking statements contained in this Annual Report on Form 10-K will in fact transpire. You are cautioned to not place undue reliance on these forward-looking statements, which speak only as of their dates. We do not undertake any obligation to update or revise any forward-looking statements.
| ii |
ITEM 1: BUSINESS
Our History
Our company was incorporated in the State of Delaware in September 2006 and was formerly known as Greenmark Acquisition Corporation (“Greenmark”). On February 7, 2011, Greenmark Acquisition Corporation and Powerdyne, Inc., a Nevada corporation (“Powerdyne Nevada”), merged with Greenmark as the surviving company. Powerdyne Nevada was formed in February 2010 in the State of Nevada and had limited operations until the time of its combination with Greenmark. As part of the merger, Greenmark Acquisition Corporation, the surviving entity, changed its name to Powerdyne International, Inc. prior to the merger, Greenmark did not have any ongoing business or operations and was established for the purpose of completing mergers and acquisitions with a target company, such as Powerdyne Nevada.
Overview
We are a company which intends to provide independent, cost-effective, green electrical power through the leasing of electrical generation equipment under the trade name “PDI Power Solutions”. Our PDI Power Solution is a customized green power solution which allows a client to operate either independent of the grid (forming his own micro-grid) with the option for cogeneration (CHPC) or to operate while allowing the grid to act as a UPS System (uninterruptable power supply) if he chooses. Each PDI Power Solution will be customized to meet our individual client’s unique power requirements. This is accomplished by using a modular design approach for the integration of all the components which make up each system. A typical PDI Power Solution is made up of a generator (gaseous), system controller (which allows for remote diagnostics, monitoring and control of a parallel generator system), a modified cooling system, an optional heat exchanger or chiller all packaged in a weatherproof/sound attenuated enclosure. Cogeneration capability CHPC (combination heat/power/cooling) is achieved by adding a closed loop cooling system to the generators with the addition of a heat exchanger and/or chiller. The heat exchanger produces hot water which can be used for heating and/or for preheating water. The chillers provide cooling to support air conditioning or refrigeration needs. PDI Power Solutions are intended to be either stationary or portable power systems ready for rapid global deployment taking only a few hours for installation. These systems can be packaged into modules which will provide as much as 100 megawatts of power.
We intend to acquire all the components needed to make a PDI Power Solution and either have them installed at the generator manufacturer’s facility to our specifications or integrated at the client’s site.
Our potential customers include a variety of small to medium size manufacturing companies, hotels and commercial enterprises worldwide. In addition, our power solutions are ideal for large end users such as seaports, commercial laundries, airports, and the like. However, we initially intend to focus our marketing and sales efforts in the Caribbean and California markets, where we believe there is a great need for independent cost-effective reliable power. Once established in the Caribbean and California, we intend to expand our marketing throughout North America and as we move into other regions in North America, we plan to increase the power ratings of the PDI Power Solutions to include multi-megawatt power generating systems.
During the quarter ended March 31, 2019, Powerdyne International, Inc. purchased several crypto currency miners and began mining certain crypto coins. This was completed to enter into the crypto markets and explore other potential revenue opportunities for Powerdyne International, Inc.
We have not installed and activated any of our power equipment to date. Our primary activities have been in perfecting our concept and in marketing and sales of our products. As shown in our consolidated financial statements, we have incurred an accumulated deficit of $3,651,212 from inception thru December 31, 2021.
| 1 |
Products
Our product (PDI Power Solution) is a self-contained generator powered by a gaseous fueled engine which drives an electrical generator. The unit runs on natural gas, propane, or other gaseous fuels; it is compact, lightweight, and clean burning. As a result, the units produce low emissions and are energy efficient.
The basis of our overall business is founded on the ability to produce electrical power using state-of-the-art technology to produce electricity at a lower cost than the existing means of producing or providing primary electric power (Spark Price: the difference between the cost of electricity provided by the utility company and the cost of electricity produced by a PDI Power Solution), in its target markets. We expect that the difference between our cost to produce electrical power and the current billing rate of existing local utility providers will present savings for our customers and a continual revenue stream for us.
The basic PDI Power Solution consists of three active components; a generator, system controller, and paralleling switch gear all mounted onto a common skid. The controller, switch gear and skid are all commercially available from multiple manufacturers built to our specifications. They are custom built to meet both our specifications as well as the customer’s specific power requirements. The PDI Power Solution can also have the option of having cogeneration capabilities of producing a combined heat power and cooling by adding custom integrated chillers and heat exchangers. These components once assembled onto the skid, can be put inside a weather and sound attenuated enclosure for stationary application or slid into a container and then mounted on a set of wheels for mobile and rapid deployment. The modular design approach allows for interchangeable components which allows for any component to be switched out as newer more cost-effective technology becomes available. We believe this gives us the competitive advantage of upgrading a PDI Power Solution with new technology at the customer’s facility without replacing the entire system.
Business Model
We plan to develop our business, producing and distributing primary electrical power and cogeneration CHCP capabilities through the PDI Power Solution product offerings, under long term master lease agreements, similar to the one we signed with Farmacia Brisas del Mar, at fixed capacity charge plus a usage charge based on actual power used at a fixed dollars per kilowatt hour ($/kWh). Installation, service, and maintenance of the PDI Power Solution will initially be provided through independent contractors, at no cost to the customer.
We intend to provide a viable alternative for local utilities to reduce the demand on the primary grid by using our equipment and power, thereby increasing the limits and capabilities of the primary grid. By using our equipment, we expect that the customer will be able to solve several problems at once. First, expensive, and polluting diesel units are replaced with cost-efficient, greener gensets. Second, the customer’s cost to produce the electrical power is reduced. Third, savings go directly to the bottom line on a monthly basis, no need to apply for energy credit annually. Fourth, maintenance is provided exclusively by us, thereby allowing the customer to reduce its workforce. Fifth, any tank farms and all other diesel support equipment or infrastructure can be dismantled and removed from the customer’s site.
Some generators are readily available, and some would be made to the customer’s specific needs, using the latest technology such as remote monitoring, remote auto shut down. Typical generator manufactures such as Cummings, Caterpillar, or GE for example will package their power solutions to meet the customer’s specifications using only their own equipment in standard packages. Powerdyne will review both the customer’s power requirements in addition to their budget, schedule, and expectations. Once this has been completed Powerdyne will select the best equipment from all global equipment manufactures available and custom packaging this equipment into a power solution that offers a high efficiency green power solution that meets the customer’s budget, schedule, power specifications and expectations.
| 2 |
The Market
Our market is global, and our primary focus is on placing PDI Power Solutions in manufacturing and commercial operations, as well as any other existing independent power generation application that requires high quality, steady electrical power generation. We intend to lease our units based on usage to allow customers to generate electricity on a 24/7 basis. The PDI Power Solution is ideal for any medium to large commercial user wherein electricity can be delivered to the user’s location on a cost effective, reliable basis.
Entry into the Market
We plan to enter selected target markets (i.e., the Caribbean and California) based upon the Sparks Spread. These markets were selected because we believe they have the greatest potential for immediate acceptability of the PDI Power Solution due to cost and reliability as well as offering the greatest profit potential. Once established, we plan to expand further into the Caribbean and North American markets using the same criteria: Spark Spread and profitability.
Pricing
The Fuel cost for a natural gas generator, based on the manufacture’s speck is .03 a kilowatt hour based on Natural gas’s current pricing. The financing cost are .025 to .035 a kilowatt hour based on 10% financing costs for 5 years. .01 a kilowatt hour for routine maintenance. .05 for a maintenance reserve. The total estimated costs are about .075 a kilowatt hour. The average price for electricity on the Caribbean has a range from .30 to .40 a kilowatt hour and some areas in the United States can be up to .20 to .30 a kilowatt hour.
Competition
We believe we are an insignificant participant among the firms, which engage in the acquisition of business opportunities. There are many established venture capital and financial concerns that have significantly greater financial and personnel resources and technical expertise than we have. In view of our limited financial resources and limited management availability, we will continue to be at a significant competitive disadvantage compared to our competitors
Employees
We have one executive officer. The executive officer will not receive any compensation until, and if, we raise or procure adequate capital (through operations, financings or otherwise) to pay such compensation. We expect that we will hire additional personnel as we expand our operations.
ITEM 1A. RISK FACTORS
The Company qualifies as a smaller reporting company, as defined by § 229.10(f)(1) and is not required to provide the information required by this Item.
| 3 |
ITEM 1B. UNRESOLVED STAFF COMMENTS
None
ITEM 2: PROPERTIES
Our corporate headquarters are in a full-service office suite located in a building in North Reading, Massachusetts, consisting of approximately 500 square feet of office space. We believe that our existing facilities are suitable and adequate and that we have sufficient capacity to meet our anticipated needs.
ITEM 3: LEGAL PROCEEDINGS
In the ordinary course of business, we may become involved in legal proceedings from time to time. As of the date of this report, we are not aware of any material pending legal proceedings.
ITEM 4: MINE SAFTY DISCLOSURES
None
ITEM 5: MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
Market Information
On November 13, 2012, our common stock was approved for quotation on the OTC Markets under the symbol “PWDY”.
The following table sets forth the range of the high and low sales prices of our common stock up until September 30, 2019, when the SEC, pursuant to Section 12(j), revoked the Company registration under Section 12 of the Securities Act of 1933, as amended. Accordingly, the Company’s common stock has not traded since that date. The company is currently working with a broker/dealer and FINRA to have its common stock commence trading. The last price of our common stock as quoted on the OTC Bulletin Board on September 30, 2019, was $0 .0004
| OTC Bulletin Board | High | Low | ||||||
| Year Ended December 31, 2018 | ||||||||
| 1st Quarter | $ | 0.0005 | $ | 0.0002 | ||||
| 2nd Quarter | $ | 0.0005 | $ | 0.0003 | ||||
| 3rd Quarter | $ | 0.0007 | $ | 0.0002 | ||||
| 4th Quarter | $ | 0.0006 | $ | 0.0003 | ||||
| Year Ended December 31, 2019 | ||||||||
| 1st Quarter | $ | 0.0002 | $ | 0.0001 | ||||
| 2nd Quarter | $ | 0.0011 | $ | 0.0002 | ||||
| 3rd Quarter thru September 30 | $ | 0.0038 | $ | 0.0001 | ||||
On December 6, 2021, Glendale Securities filed a Form 211 with FINRA on behalf of Powerdyne international Inc. for quotation on the OTC markets.
Dividends and Dividend Policy
We have never paid nor declared any cash dividends on our common stock to date, and do not anticipate paying such cash dividends in the foreseeable future. Whether we declare and pay dividends is determined by our Board of Directors at their discretion, subject to certain limitations imposed under Delaware corporate law. The timing, amount, and form of dividends, if any, will depend on, among other things, our results of operations, financial condition, cash requirements and other factors deemed relevant by our Board of Directors.
| 4 |
Equity Compensation Plan Information
Our board of directors adopted the 2014 Stock Option Plan (the “Plan”) in 2014 to promote our long-term growth and profitability by (i) providing our key directors, officers, and employees with incentives to improve stockholder value and contribute to our growth and financial success and (ii) enable us to attract, retain and reward the best available persons for positions of substantial responsibility. A total of 100,000,000 shares of our common stock have been reserved for issuance upon exercise of options granted pursuant to the Plan. The Plan allows us to grant options to our employees, officers, and directors and those of our subsidiaries, provided that only our employees and those of our subsidiaries may receive incentive stock options under the Plan. We have granted a total of 0 shares of stock as of December 31, 2021, under the Plan.
Holders
There are approximately 40 active holders of the Company’s Common Stock. This figure does not include holders of shares registered in “street name” or persons, partnerships, associates, corporations, or other entities identified in security position listings maintained by depositories.
Recent Sales of Unregistered Sales of Equity Securities.
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
None.
ITEM 6. SELECTED FINANCIAL DATA –
Not Applicable
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
This discussion contains forward-looking statements that involve risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by such forward-looking statements as a result of many important factors, including those set forth in Part I of this Annual Report on Form 10-K under the caption “Risk Factors.” Please see “Cautionary Note Regarding Forward-Looking Statements” in Part I above. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Annual Report. The following discussion should be read in conjunction with the consolidated financial statements, including the related notes, appearing in Item 8 of this Annual Report on Form 10-K.
Critical Accounting Policies and Estimates
Use of Estimates – We have made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K in accordance with generally accepted accounting principles in the United States.
Overview
We are an operating company which has experienced losses since our inception. Our sources of cash to date have been capital invested by shareholders and venture capital investors/lenders. Our cumulative revenue of $61,741 has come from two sources: 1) $1,240 from our one equipment lease agreement, which was terminated in September 2017 due to a natural disaster; and 2) $60,501 from crypto-mining revenue, of which $48,602 was received during the year ended December 31, 2021, and $3,521 was received during the year ended December 31, 2020.
The basis of our overall business is founded on our ability to produce electrical power using state-of-the-art technology to power electrical generation equipment to produce electricity at a lower cost than the existing means of producing or providing primary electric power in its target markets. We expect that the difference between our cost to produce electrical power and the current billing rate of existing local utility providers will present savings for our customers and revenue opportunity for us.
| 5 |
Our business is to install and maintain, own, and operate electrical power generation equipment (“gensets”) at client locations. We will own and maintain the equipment to be installed with the customer who will use it to produce its own electrical power. Our products are intended to be portable, easy-to-use units that can be conveniently deployed in various locations around the world. The units can also be assembled and combined to produce power centers providing up to 100 megawatts of power.
During the 1st quarter of 2019 Powerdyne International, Inc. purchased several crypto currency miners and began mining certain crypto coins. This was done in an effort to conservatively enter into the crypto markets and explore other potential revenue producing opportunities for Powerdyne International, Inc.
The coins are stored in our Sia coin digital wallet which is housed in Sia coins cloud storage.
Powerdyne has a bill of sale that shows ownership via serial #s and, has possession of the miners and the Sia coin digital wallet codes. The biggest cyber security threat is an exchanged being hacked which the exchanges have insurance for the client’s funds and coins. For security Powerdyne stores all its Sia coins in it’s our digital wallet and are only transferred to the exchange when they are to be converted to USD. For security purposes Powerdyne has its digital wallet address and pass codes stored offline, and backups are also stored offline in separate locations. Powerdyne believes the cyber threat is very low do to the very small size and value of our mining operation and the complexity required to break into a crypto wallet.
Governmental Regulations Regarding Crypto Currency
Government regulation of block chain and crypto is being actively considered by the United States federal government via a number of agencies (including the U.S. Securities and Exchange Commission (the “SEC”), the U.S. Commodities Future Trading Commission (“CFTC”), Federal Trade Commission (“FTC”), and the Financial Crimes Enforcement Network (“FinCEN”) of the U.S. Department of the Treasury) and in other countries. Other regulatory bodies are governmental or semi-governmental and have shown an interest in regulating or investigating companies engaged in the block chain business (NASDAQ, NYSE, FINRA, state securities commissions).
Block chain and crypto currency regulations are in a nascent state with agencies investigating businesses and their practices, gathering information, and generally trying to understand the risks and uncertainties in order to protect investors in these businesses. Regulations will certainly increase, in many cases, although it is presently not possible to know how they will increase, how regulations will apply to the Company’s businesses, or when they will be effective. Various bills have also been proposed in congress for adoption related to the Company’s business which may be adopted and have an impact on it. As the regulatory and legal environment evolves, the Company may become subject to new laws and further regulation by the SEC and other agencies, although the Company is not currently trading in digital assets and has no intention to trade in digital assets.
During the 4th quarter of 2019 Powerdyne accepted forgiveness of debt letters from the related party debt holders forgiving all unpaid debt and accrued interest owed to them individually, by the Corporation. During this same period Powerdyne International as part a corporate reorganization, accepted the resignation of the Director of the Corporation and as Chairman of the Board. The remaining directors unanimously resolved to elect James O’Rourke as Chairman of the Board. The Company then accepted the resignation of the remaining Board of Directors.
The following discussion contains forward-looking statements, as discussed above. Please see the sections entitled “Forward-Looking Condensed Statements” and “Risk Factors” for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.
| 6 |
Investment Company Act 1940
Although we will be subject to regulation under the Securities Act of 1933, as amended, and the 1934 Act, we believe we will not be subject to regulation under the Investment Company Act of 1940 (the “1940 Act”) insofar as we will not be engaged in the business of investing or trading in securities. We have no intent to continue to engage in the business of buying and selling digital assets. In the event we engage in such business that results in us holding passive investment interests in digital assets, we could be subject to regulation under the 1940 Act. In such event, we would be required to register as an investment company and incur significant registration and compliance costs. We have obtained no formal determination from the SEC as to our status under the 1940 Act and, consequently, any violation of the 1940 Act would subject us to material adverse consequences. We believe that, currently, we are exempt under Regulation 3a-2 of the 1940 Act.
The value of the Cryptocurrency held by the Company is determined by the price of the Cryptocurrency as set forth by Bittrex, Inc., a U.S. cryptocurrency platform, as of the last day of each of the Company’s financial quarters. In the event that the value of the Company’s Cryptocurrency holdings exceeds forty percent (40%) of the Company’s total assets, the Company intends to sell that amount of its Cryptocurrencies that will allow the Company to remain exempt under Regulation 3a-2 of the 1940 Act.”
Operations
The Company’s strategy is to pursue selected opportunities in markets where inexpensive and environmentally friendly power sources are needed and/or required.
Results of Operations
The Year Ended December 31, 2021, compared to the Year Ended December 31, 2020
We generated revenues of $48,602 during the year ended December 31, 2021, and $3,521 during the year ended December 31, 2020.
During the year ended December 31, 2021, total operating expenses increased 157.75% to $87,136 from $55,237 for the year ended December 31, 2020. The increase is mainly due to increases of $5,586 in consulting, $2,660 in filing fees, $19,761 in stock registration fees, $3,754 in legal and accounting expense, $738 in office supplies expense, $313 in miscellaneous expense, and a minor increase in telephone expense. These increases were offset by decreases of $1,141 in other taxes expense, and a minor decrease in payroll processing fees.
The net loss for the year ended December 31, 2021, was $43,156. The net loss for the year ended December 31, 2020, was $57,256.
Liquidity and Capital Resources
As of December 31, 2021, and 2020, we had working capital deficits of $176,258 and $127,499, respectively. The cash used in operations of $38,631 was primarily due to net loss from operations of $43,156, less cash used in operations of $8,602 of intangible asset–Cryptocurrency, plus $10,127 of accrued expenses, plus $3,000 of depreciation expense. The total net cash used in investing activities was $-0-. The total net cash provided by financing activities of $46,920 was due to proceeds from due to related party of $60,000 less principal paid on note-payable-stockholder of $13,080. We have no known demands or commitments and are not aware of any events or uncertainties as of December 31, 2021, that will result in or that are reasonably likely to materially increase or decrease our current liquidity.
We believe that anticipated cash flows from operations will be insufficient to satisfy our ongoing capital requirements. We have and continue to receive financing in the form of loans from Executive Management in order to provide the necessary working capital. Our ability to meet our obligations and continue to operate as a going concern is highly dependent on our ability to obtain additional financing. We cannot predict weather this additional financing will be in the form of equity or debt. The financing for these goals could come from further equity financing or could come from sales of securities and /or loans. If we are not successful in generating sufficient liquidity from operations or in raising sufficient capital resources, on terms acceptable to us, this could have a material adverse effect on our business, results of operations liquidity and financial condition.
Inflation
In the opinion of management, inflation has not and will not have a material effect on our operations in the immediate future.
Management will continue to monitor inflation and evaluate the possible future effects of inflation on our business and operations.
Off-Balance Sheet Arrangements
We had no material off-balance sheet arrangements that have, or are likely to have, a current or future material effect on our operations.
Recent Accounting Pronouncements
Refer to Note 1 of our consolidated financial statements for recent accounting pronouncements.
ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
| 7 |
POWERDYNE INTERNATIONAL, INC.
FINANCIAL STATEMENTS
TABLE OF CONTENTS
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021, AND 2020
| F-1 |
Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors of Powerdyne International, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Powerdyne International, Inc. as of December 31, 2021 and 2020, the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 4. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/S/ BF Borgers CPA PC
We have served as the Company’s auditor since 2020
March 1, 2022
| F-2 |
POWERDYNE INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(Audited)
| December 31, 2021 | December 31, 2020 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Advances to stockholder | - | - | ||||||
| Total current assets | ||||||||
| Property and Equipment | ||||||||
| Cryptocurrency miners | $ | $ | ||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment | ||||||||
| Intangible asset - Cryptocurrency | $ | $ | ||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Due to related parties | ||||||||
| Note payable-stockholder | - | |||||||
| Income tax payable | ||||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders’ Deficit: | ||||||||
| Preferred stock, $ par value, shares authorized, -- shares issued and outstanding as of December 31, 2021 and December 31, 2020 | - | - | ||||||
Common stock, $ par value, shares authorized, shares issued and outstanding as of December 31, 2021 and shares issued and outstanding as of December 31, 2020 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Deficit | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements
| F-3 |
POWERDYNE INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Audited)
| For the year | For the year | |||||||
| ended | ended | |||||||
| December 31, 2021 | December 31, 2020 | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Income (loss) from operations | ( | ) | ( | ) | ||||
| Other Expense | ||||||||
| Other Expense-Interest | ||||||||
| Total Other Expense | ||||||||
| Loss before income tax expense | ( | ) | ( | ) | ||||
| Income tax expense | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted loss per common share | $ | ( | ) | $ | ||||
| Basic and diluted weighted average common | - | |||||||
| shares outstanding | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-4 |
POWERDYNE INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER’S DEFICIT
(Audited)
| Additional | Total | |||||||||||||||||||
| Common Stock | Paid-In | Accumulated | Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity (Deficit) | ||||||||||||||||
| Balance, December 31, 2019 | ( | ) | ( | ) | ||||||||||||||||
| Net income for the period | ( | ) | ( | ) | ||||||||||||||||
| Balance, December 31, 2020 | ( | ) | ( | ) | ||||||||||||||||
| Common stock cancelled | ( | ) | ( | ) | - | - | ||||||||||||||
| Net loss for the period | ( | ) | ( | ) | ||||||||||||||||
| Balance, December 31, 2021 | ( | ) | ( | ) | ||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
POWERDYNE INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Audited)
| For the year | For the year | |||||||
| ended | ended | |||||||
| December 31, 2021 | December 31, 2020 | |||||||
| Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Intangible Asset | ( | ) | ( | ) | ||||
| Accrued expenses | ( | ) | ||||||
| Taxes payable | - | |||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Investing Activities: | ||||||||
| Increase in intangible asset - Cryptocurrency | - | - | ||||||
| Net cash used in investing activities | - | - | ||||||
| Financing Activities: | ||||||||
| Proceeds from Due to related party | ||||||||
| Proceeds from Notes payable-stockholder | - | |||||||
| Principal paid on Note payable stockholder | ( | ) | - | |||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Common stock cancellation | $ | ( | ) | |||||
| Common stock issued for debt reduction of notes payable. | $ | |||||||
| Supplemental disclosure if cash flow information | ||||||||
| Cash paid for interest | $ | |||||||
| Cash paid for taxes | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-6 |
POWERDYNE INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021, and 2020
1. ORGANIZATION
Powerdyne, Inc., was incorporated on February 2, 2010, in Nevada, and is registered to do business in Rhode Island and Massachusetts. On February 7, 2011, Powerdyne, Inc. merged with Powerdyne International, Inc., formerly Greenmark Acquisition Corporation, a publicly held Delaware corporation.
On December 13, 2010, Powerdyne International, Inc., formerly Greenmark Acquisition Corporation, filed an Amended and Restated Articles of Incorporation in order to, among other things, increase the authorized capital stock to common shares, par value $ per share. Unless the context specifies otherwise, as discussed in Note 2, references to the “Company” refers to Powerdyne International Inc. and Powerdyne Inc. after the merger.
At the closing of the merger, each share of Powerdyne, Inc.’s common stock issued and outstanding immediately prior to the closing of the Merger was exchanged for the right to receive shares of common stock of Powerdyne International, Inc. Accordingly, an aggregate of shares of common stock of Powerdyne International Inc. were issued to the holders of Powerdyne Inc.’s common stock.
In March 2014, the Company began distribution of completely packaged independent electrical generator units that run on environmentally friendly fuel sources, such as natural gas and propane.
In 2014, Powerdyne International, Inc. filed an amendment to its Articles of Incorporation which increased the authorized capital stock to common shares, par value $ per share.
On
January 26, 2015, Powerdyne International, Inc. filed an amendment to its Articles of Incorporation which increased the authorized capital
stock to
2. REVERSE MERGER ACCOUNTING
On February 7, 2011, Greenmark Acquisition Corporation, which was a publicly held Delaware corporation, merged with Powerdyne, Inc. Upon closing of the transaction, Greenmark Acquisition Corporation, the surviving corporation in the merger, changed its name to Powerdyne International, Inc.
The merger was accounted for as a reverse-merger, and recapitalization in accordance with generally accepted accounting principles in the United States (“GAAP”). Powerdyne Inc. was the acquirer for financial reporting purpose and the Company was the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the merger are those of Powerdyne, Inc. and have been recorded at the historical cost basis of Powerdyne, Inc., and the financial statements after completion of the merger include the assets and liabilities of the Company and Powerdyne, Inc., historical operations of Powerdyne, Inc. and operations of the Company from the closing date of the merger. Common stock and the corresponding capital amounts of the Company pre-merger were retroactively restated as capital stock shares reflecting the exchange ratio in the merger. In conjunction with the merger, the Company received no cash and assumed no liabilities from Greenmark Acquisition Corporation.
3. BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America.
| F-7 |
POWERDYNE INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021, and 2020
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The summary of significant accounting policies presented below is designed to assist in understanding the Company’s consolidated financial statements.
Such consolidated financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects and have been consistently applied in preparing the accompanying consolidated financial statements.
Going Concern
Since
its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management
and technical staff, acquiring operating assets and raising capital. The Company has not generated significant revenues from its principal
operations, and there is no assurance of future revenues. As of December 31, 2021, the Company had an accumulated deficit of $
The Company’s activities will necessitate significant uses of working capital beyond December 31, 2021. Additionally, the Company’s capital requirements will depend on many factors, including the success of the Company’s sales and the status of competitive products. The Company plans to continue financing its operations with cash received from financing activities, revenue from operations and or affiliate funding.
While the Company strongly believes that its capital resources will be sufficient in the near term, there is no assurance that the Company’s activities will generate sufficient revenues to sustain its operations without additional capital or, if additional capital is needed, that such funds if available, will be obtainable on terms satisfactory to the Company.
The accompanying audited consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern
Use of Estimates
Our management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates.
Fair Value of Financial Instruments
When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. We use the following three levels of inputs in determining the fair value of our assets and liabilities, focusing on the most observable inputs when available:
● Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
● Level 2 - Quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
● Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.
To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement.
| F-8 |
POWERDYNE
INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021, and 2020
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The Company monitors the market conditions and evaluates the fair value hierarchy levels at least quarterly. For any transfers in and out of the levels of the fair value hierarchy, the Company elects to disclose the fair value measurement at the beginning of the reporting period during which the transfer occurred.
The Company’s financial instruments consisted of cash, intangible asset-Cryptocurrency, accounts payable and accrued liabilities, due to related parties and notes payable-stockholder. The estimated fair value of cash, intangible asset-Cryptocurrency, accounts payable and accrued liabilities, due to related parties and notes payable-stockholder approximates its carrying amount due to the short maturity of these instruments.
Cash
The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2021, and 2020, respectively.
.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company places its cash with high quality banking institutions. From time to time, the Company may maintain cash balances at certain institutions in excess of the Federal Deposit Insurance Corporation limit. The Company has not incurred any loss from this risk.
Intangible asset - Cryptocurrency
The
Company considers intangible asset-Cryptocurrency to be revenue that has been earned, but for which no cash has been received. Intangible
asset-Cryptocurrency consists of crypto mined coins that are held in a digital wallet and have not been cashed out. The basis of the
valuation is the market price of the Sia coins on December 31, 2021. The Company considers this to be a current asset since the crypto
mined coins can be redeemed for cash at any time. The Company had $
Equipment
Equipment
is stated at cost. Capital expenditures for improvements and upgrades to existing equipment are also capitalized. Maintenance and repairs
are expensed as incurred. The equipment is depreciated over
Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of
In accordance with ASC 360, we evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, we compare the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. We currently believe there is no impairment of our long-lived assets. There can be no assurance, however, that market conditions will not change or demand for our products under development will continue. Either of these could result in future impairment of long-lived assets.
| F-9 |
POWERDYNE INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021, and 2020
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Taxes
As a result of the implementation of certain provisions of ASC 740, Income Taxes, (formerly FIN 48, Accounting for Uncertainty in Income Taxes An Interpretation of FASB Statement No. 109), (“ASC 740”), which clarifies the accounting and disclosure for uncertainty in tax positions, as defined. ASC 740 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes.
In 2010, the Company adopted Accounting for Uncertain Income Taxes under the provisions of ASC 740. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. It also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company did not recognize any additional liability for unrecognized tax benefits as a result of the adoption of ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized.
The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. In addition, the Company did not record a cumulative effect adjustment related to the adoption of ASC 740. The Company’s policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes.
The
Company’s tax provision is determined using an estimate of its annual effective tax rate using enacted tax rates expected to apply
to taxable income in the years in which they are earned, adjusted for discrete items, if any, that are taken into account in the relevant
period. Each quarter the Company updates its estimate of the annual effective tax rate, and if its estimated tax rate changes, the Company
makes a cumulative adjustment. Income taxes payable as of December 31, 2021, and December 31, 2020, were $
Basic loss per common share excludes dilutive securities and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted earnings per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. As of December 31, 2021, and December 31, 2020, there were no outstanding dilutive securities.
| Year ended December 31, 2021 | Year ended December 31, 2020 | |||||||
| Loss available for common shareholder | $ | ( | ) | $ | ( | ) | ||
| Basic and fully diluted loss per share | $ | ( | ) | $ | ||||
| Weighted average common shares outstanding - basic and diluted | ||||||||
Net loss per share is based upon the weighted average shares of common stock outstanding.
| F-10 |
POWERDYNE INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021, and 2020
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Recent Accounting Pronouncements
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which, among other things, requires lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. The new standard also requires new disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The amendments in this update should be applied under a modified retrospective approach. The new standard is effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. Management does not plan to early adopt this guidance. The Company’s only lease as at August 1, 2019 is a month-to-month rent agreement for office space. The month-to-month rent agreement is considered a lease with a term of 12 months or less. As the leases standard does not require lessees to apply the guidance to arrangements with a lease term of 12 months or less, the Company expects the new standard to have no material impact on its consolidated financial statements.
Recent Accounting Guidance Not Yet Adopted
Accounting for Income Taxes
In December 2019, the FASB issued a new standard to simplify the accounting for income taxes. The guidance eliminates certain exceptions related to the approach for intra period tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries. The guidance also simplifies aspects of accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard will be effective for us beginning August 1, 2021. Management will continue to analyze whether the adoption of this new standard will have a material impact on our consolidated financial statements.
In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, “Simplifying the Accounting for Income Taxes”. The pronouncement simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, “Income Taxes”. The pronouncement also improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 will be effective for us beginning in the first quarter of fiscal 2022, with early adoption permitted. We are still evaluating the impact this guidance will have on our consolidated financial statements.
In October 2020, the FASB issued ASU No. 2020-10 Codification Improvements, to make incremental improvements to U.S. GAAP and address stakeholder suggestions, including, among other things, clarifying that the requirement to provide comparative information in the financial statements extends to the corresponding disclosures section. The amendments in this update will be effective for us beginning with fiscal year 2021, with early adoption permitted. The amendments in this update should be applied retrospectively and at the beginning of the period that includes the adoption date. The adoption of the amendments in this update is not expected to have a material impact on our consolidated financial position and results of operations.
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Revenue Recognition
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), requiring lessees to recognize for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (2) a right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The update is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Company currently anticipates that upon adoption of the new standard, ROU assets and lease liabilities will be recognized in amounts that will be immaterial to the balance sheets.
In May 2014, the FASB issued an accounting standard update that amends the accounting guidance on revenue recognition. The amendment in this accounting standard update are intended to provide a more robust framework for addressing revenue issues, improve comparability of revenue standard update will be applied using either of the following transition methods: 1) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or 2) a modified retrospective approach with the cumulative effect of initially adopting the standard recognized at the date of adoption (which requires additional footnote disclosures). This accounting update is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted only as of reporting periods beginning after December 31, 2016.
Sia coin is the only crypto coin that Powerdyne is mining. The coins are held in the Company’s Sia coin digital wallet. When coins are going to be exchanged for USD, they are then transferred to the company’s exchange wallet held at a US based crypto exchange which provides support for two-factor authentication. We also have wallet password management, and offsite backups. The coins are held in anticipation of future price appreciation as crypto currencies become more widely accepted, but some coins may be exchanged for USD on an as needed basis. The company also realizes there is no guarantee the coins will appreciate in value. Revenue is recognized on the last date of the quarter based on the market price of the Sia coin at that date times the number of coins in the wallet.
| F-11 |
POWERDYNE INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021, and 2020
5. EQUIPMENT - NET
Equipment consists of the following as of December 31, 2021, and 2020:
| December 31, | December 31, | |||||||
| 2021 | 2020 | |||||||
| (unaudited) | (audited) | |||||||
| Cryptocurrency miners | $ | $ | ||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||
| Total Property and Equipment | $ | $ | ||||||
Equipment
is stated at cost and depreciated on a straight- line basis over the assets’ estimated useful lives: computer equipment
6. LEASE
On
March 11, 2015, Powerdyne International, Inc. (the “Company”) finalized its negotiations with Farmacia Brisas del Mar, a
corporation organized under the laws of Puerto Rico (the “Lessee”), and the Company and the Lessee have entered into a five-year
contract to lease power generating equipment to Lessee based upon power consumption. In addition, the custom designed system will also
provide cogeneration capabilities with the addition of chillers to support the air conditioning demands. The agreement provides for a
payment to the Company of a monthly fee equal to the greater of a set monthly base rate or a monthly base rate plus an additional amount
based on kilowatt wattage. The agreement provides for termination by the Company only in the event of nonperformance by the Lessee unless
Lessee pays all payments due for the remainder of the term. The agreement contains representation and warranties, default provisions
and indemnification provisions typical for agreements of this type. In 2016 the terms on the Farmacia Del Mar lease was modified to a
monthly payment, based on actual power consumption. The total revenue-to date derived from this lease is $
During the year ended December 31, 2017, Powerdyne International, Inc. (the Company) determined that all of the machinery and equipment was impaired due to Hurricane Maria, which occurred in September 2017, resulting in the disappearance of the genset in Puerto Rico. Due to the logistics of transportation after Hurricane Maria the company decided to terminate the lease with the Farmacia Del Mar.
During the quarter ended March 31, 2019, Powerdyne International, Inc. purchased several crypto currency miners and began mining certain crypto coins. This was done in an effort to enter into the crypto markets and explore other potential revenue opportunities for Powerdyne International, Inc.
During the year ended December 31, 2019, Powerdyne International, Inc.’s board of directors agreed to acquire all the assets of Creative Motion Technology a company which is wholly owned by James O’Rourke. James O’Rourke will be merging the assets of Creative Motion Technology, to Powerdyne without consideration. Due to the Covid 19 pandemic, the parties agreed to postpone the merger until approximately the first quarter of 2022.
During this same period Powerdyne International accepted forgiveness of debt letters from the related party debt holders forgiving all unpaid debt and accrued interest owed to them individually, by the Corporation.
During this same period Powerdyne International as part a corporate reorganization, accepted the resignation of the Director of the Corporation and as Chairman of the Board. The remaining directors unanimously resolved to elect James O’Rourke as Chairman of the Board. The Company then accepted the resignation of the remaining Board of Directors.
7. COMMON STOCK
No Common stock was issued by the Company for year ended December 31, 2021.
Common stock surrendered
On October 1, 2021, a stockholder surrendered shares to the Company.
On October 12, 2021, a stockholder surrendered shares to the Company.
| F-12 |
POWERDYNE INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021, and 2020
8. RELATED PARTY
From
time to time, we receive payments from stockholders in the form of cash and/or out-of-pocket expenditures for the benefit of the Company,
which are business in nature. On December 11, 2018, we received a loan from a stockholder in the amount of $
During
the year ended December 31, 2021, a related party advanced the Company $
9. COMMITMENTS AND CONTINGENCIES
Litigation
There is no pending, threatened or actual legal proceedings in which the Company or any subsidiary is a party.
| F-13 |
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON ACCOUNTING AND FINANCIAL DISCLOSURE
On August 6, 2020, we appointed B F Borgers, CPA PC as our new independent auditors.
There have never been any disagreements with any independent registered public accounting firm that has worked for the Company regarding accounting and financial disclosure.
ITEM 9 A: CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management conducted an evaluation, with the participation of our Chief Executive Officer, who is our principal executive officer and our principal financial and accounting officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Annual Report on Form 10-K. Based on that evaluation, we concluded that because of the material weakness and significant deficiencies in our internal control over financial reporting described below, our disclosure controls and procedures were not sufficient as of December 31, 2021 or December 31, 2020.
This Annual Report on Form 10-K does not include an attestation report from our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Commission that permit us to provide only management’s report in this Annual Report on Form 10-K on Form 10-K.
Pursuant to Rules adopted by the Securities and Exchange Commission. The Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rules. This evaluation was done as of the end of the fiscal year under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer. There have been no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of the evaluation. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer believe that the Company’s disclosure controls and procedures are not effective in gathering, analyzing and disclosing information needed to ensure that the information required to be disclosed by the Company in its periodic reports is recorded, summarized and processed due to material weaknesses identified.
Management’s Report of Internal Control over Financial Reporting
The Company is responsible for establishing and maintaining adequate internal control over financial reporting in accordance with the Rule 13a-15 of the Securities Exchange Act of 1934. The Company’s chief financial officer conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021, based on the criteria establish in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013). Based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2021, based on those criteria. The Company’s management has identified material weaknesses in its internal control over financial reporting related to the following matters:
| - | A lack of sufficient segregation of duties within members of its accounting staff dedicated to financial reporting functions so that all journal entries and account reconciliations are reviewed by someone other than the preparer, heightening the risk of error or fraud. |
| - | A lack of sufficient personnel in the accounting function due to the Company’s limited resources with appropriate skills, training, and experience to perform certain tasks as it relates to financial reporting. |
| 8 |
The Company’s plan to remediate those material weaknesses remaining is as follows:
Improve the effectiveness of the accounting group by continuing to augment existing resources with additional consultants or employees to improve segregation procedures and to assist in the analysis and recording of complex accounting transactions. The Company plans to mitigate the segregation of duties issues by hiring additional personnel in the accounting department once it generates significantly more revenue or raises significant additional working capital.
Improve segregation procedures by strengthening cross approval of various functions including quarterly internal audit procedures where appropriate.
The Company is not currently required to have an attestation report on the effectiveness of the internal control over financial reporting issued by the independent registered public accounting firm.
Changes in Internal Controls over Financial Reporting
There have been no significant changes to the Company’s internal controls over financial reporting that occurred during our last fiscal quarter of the year ended December 31, 2021, that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9 B: OTHER INFORMATION
None.
ITEM 10: DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
The following table sets forth the names, ages, and positions with us for each of our directors and officers as of December 31, 2021:
| Name | Age | Position | Since | |||
| James F. ‘Rourke | 66 | President, Secretary, CFO and Director | May 6, 2016 |
James F. O’Rourke serves as Chief Executive Officer and Director of the Company. He attended Lowell Technological Institute. With over thirty-five years’ experience in manufacturing from design conception to production as well as in acquisitions, mergers and managing the operational side of startup businesses, Mr. O’Rourke (the Vice Present and General Manager of SatCon Technology Corporation, the Manager of Drive Systems for its Applied Technology business unit and the Manager of its Magmotor business unit) was responsible for SatCon’s day-to-day operation and subsequently was instrumental in the formation of SatCon’s successor: SatCon Power Systems. Mr. O’Rourke then founded CM Technology (which designs and manufactures custom motors for the automotive, industrial, and robotic markets as well as high power rotary uninterruptable power supplies (RUPS) for the distributed generation, industrial, telecommunication, cloud data center and power quality markets). Mr. O’Rourke, who is still actively involved in CM, joined Powerdyne as a consultant in 2013 and was elected its CEO and a Director in 2014. Due to Mr. O’Rourke’s knowledge of our industry and his manufacturing experience we selected him to serve as a director.
Audit Committee
Powerdyne does not presently have an Audit Committee and the entire Board acts in such capacity for the immediate future due to the limited size of the Board. Powerdyne intends to increase the size of its Board in the future, at which time it may appoint an Audit Committee.
In lieu of an Audit Committee the Board is empowered to make such examinations as are necessary to monitor the corporate financial reporting and the external audits of Powerdyne, to provide to the Board of Directors (the “Board”) the results of its examinations and recommendations derived there from, to outline to the Board improvements made, or to be made, in internal control, to nominate independent auditors, and to provide to the Board such additional information and materials as it may deem necessary to make the Board aware of significant financial matters that require Board attention.
| 9 |
Compensation Committee
Powerdyne does not presently have a Nominating Committee and the Board acts in such capacity for the immediate future due to the limited size of the Board. Powerdyne intends to increase the size of its Board in the future, at which time it may appoint a Compensation Committee.
The Compensation Committee will be authorized to review and make recommendations to the Board regarding all forms of compensation to be provided to the executive officers and directors of Powerdyne, including stock compensation, and bonus compensation to all employees.
Nominating Committee
Powerdyne does not have a Nominating Committee and the Board acts in such capacity.
Code of Conduct and Ethics
To date, we have not adopted a Code of Ethics applicable to our principal executive officer and principal financial officer because the Company has no meaningful operations. The Company does not believe that a formal written code of ethics is necessary at this time. We expect that the Company will adopt a code of ethics if and when the Company successfully completes a business combination that results in the acquisition of an on-going business and thereby commences operations.
Indemnification of Executive Officers and Directors
Our articles provide to the fullest extent permitted by Delaware Law, wherein our directors or officers shall not be personally liable to the Company or our stockholders for damages for breach of such directors or officers fiduciary duty. The effect of this provision of our articles is to eliminate our rights and the rights of our stockholders (through stockholders’ derivative suits on behalf of the Company) to recover damages against a director or officer for breach of the fiduciary duty of care as a director or officer (including breaches resulting from negligent or grossly negligent behavior), except under certain situations defined by statute. We believe that the indemnification provisions in our articles are necessary to attract and retain qualified persons as directors and officers.
Delaware corporate law provides that a corporation may indemnify a director, officer, employee or agent made a party to an action by reason of that fact that he was a director, officer employee or agent of the corporation or was serving at the request of the corporation against expenses actually and reasonably incurred by him in connection with such action if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation and with respect to any criminal action, had no reasonable cause to believe his conduct was unlawful.
CONFLICTS OF INTEREST - GENERAL
Our sole director and officer is, or may become, in his individual capacities, an officer, director, controlling shareholder and/or partner of other entities engaged in a variety of businesses. Thus, there exist potential conflicts of interest including, among other things, time, efforts, and corporation opportunity, involved in participation with such other business entities. While our sole officer and director of our business is engaged in business activities outside of our business, he devotes to our business such time as he believes to be necessary.
CONFLICTS OF INTEREST - CORPORATE OPPORTUNITIES
Presently no requirement contained in our Articles of Incorporation, Bylaws, or minutes which requires officers and directors of our business to disclose to us business opportunities which come to their attention. Our officers and directors do, however, have a fiduciary duty of loyalty to us to disclose to us any business opportunities which come to their attention, in their capacity as an officer and/or director or otherwise. Excluded from this duty would be opportunities which the person learns about through his involvement as an officer and director of another company. We have no intention of merging with or acquiring an affiliate, associate person or business opportunity from any affiliate or any client of any such person.
| 10 |
ITEM 11: EXECUTIVE COMPENSATION
During the three years ended December 31, 2021, 2020 and 2019, no salaries were paid to any officers or directors.
Executive compensation during the years ended December 31, 2021, 2020, and 2019 was as follows:
| Annual | Annual | Stock | All | Annual | ||||||||||||||||||||||||
| Payments | Payments | And | Compensation | Other | Compensation | |||||||||||||||||||||||
| Name/Position | Year | Salary | Made | Options(1) | Plans | Compensation | Total | |||||||||||||||||||||
| James F. O’Rourke | 2021 | $ | 0 | $ | 0 | 0 | 0 | 0 | $ | 0 | ||||||||||||||||||
| Chief Executive Officer | 2020 | $ | 0 | $ | 0 | $ | 11,700 | 0 | 0 | $ | 0 | |||||||||||||||||
| 2019 | $ | 0 | $ | 0 | 0 | 0 | 0 | $ | 0 | |||||||||||||||||||
Employment Agreement
We do not have any employment agreements with our officers.
Stock Option Plan
Under the Company’s 2014 Stock Option Plan, no options have been granted
Outstanding Equity Awards at Fiscal Year-End
There were no Equity Awards during the fiscal year ended December 31, 2021,
Employee Pension, Profit Sharing, or other Retirement Plans
We do not have a defined benefit, pension plan, profit sharing or other retirement plan, although we may adopt one or more of such plans in the future.
Director’s Compensation
At present we do not pay our directors for attending meetings of our Board of Directors, although we expect to adopt a director compensation policy by the end of the current year.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of December 31, 2021, the number and percentage of the outstanding shares of common stock, which, according to the information available to us, were beneficially owned by:
| (i) | each person who is currently a director, |
| (ii) | each executive officer, |
| (iii) | all current directors and executive officers as a group, and |
| (iv) | each person who is known by us to own beneficially more than 5% of our outstanding common stock. |
Except as otherwise indicated, the persons named in the tables below have sole voting and dispositive power with respect to all shares beneficially owned, subject to community property laws where applicable.
| 11 |
| COMMON STOCK | Number of Shares of | Percent of | ||||||||
| Name | Position | Common Stock | Class (1) | |||||||
| James F. O’Rourke | Chief Executive Officer | 215,825,000 | 11 | % | ||||||
| Arthur M. Read, II, Esq. | Shareholder | 276,446,194 | 15.4 | % | ||||||
| Eric Foster | Shareholder | 135,000,000 | 7.2 | % | ||||||
| Linda H. Madison | Shareholder | 114,000,000 | 6.1 | % | ||||||
| Total owned by officers and directors (1) | 215,825,000 | 10.8 | % | |||||||
(1) Based upon 1,862,430,584 shares outstanding.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related Party Loans
During the year ended December 31, 2021, the total amount of loan proceeds was $-0- from the Company’s President. The total interest accrued on President’s loans on December 31, 2021, and December 31, 2020, was $-0- and $-0-, respectively.
From time to time, we receive payments from stockholders in the form of cash and/or out-of-pocket expenditures for the benefit of the Company, which are business in nature. On December 11, 2018, we received a loan from a stockholder in the amount of $13,500, to be repaid in monthly installments of principal and interest beginning March 25, 2019. The balance of this loan as of December 31, 2021, was $-0-. The interest expense on this loan as of December 31, 2021, - was $1,222.
The balance of advances to related parties as of December 31, 2021, and December 31, 2020, was $-0- and $-0-, respectively. During the year ended December 31, 2021, a related party advanced the Company $60,000. Amounts accrued, but not yet paid as due to related party on December 31, 2021, and December 31, 2020, was $153,900 and $93,000, respectively.
Employee Benefit Plans
We have no employee benefit plans or stock option plans.
ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
The aggregate fees incurred for each of the last two years for professional services rendered by the independent registered public accounting firm of BF Borgers CPA PC for the December 31, 2021, and 2020 audit of the Company’s annual financial statements and review of financial statements included in the Company’s Form 10-K and Form 10-Q reports and services normally provided in connection with statutory and regulatory filings or engagements were as follows:
| Year Ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| BF Borgers CPA PC | $ | 21,060 | $ | 20,660 | ||||
BF Borgers CPA PC does not complete the Company’s tax filings. The Company incurred $0 for tax related services in 2021 and $2,662.50 for the year ended 2020.
All Other Fees
The Company incurred $0 for other fees by the principal accountant for the years ended December 31, 2021, and 2020.
The audit committee will evaluate and approve in advance, the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services. The Company does not rely on pre-approval policies and procedures. BF Borgers CPA PC has been the Company’s auditor since 2020.
| 12 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| POWERDYNE INTERNATIONAL, INC. | ||
| Date: March 1, 2022 | By: | /s/ James F. O’Rourke |
| James F. O’Rourke, CEO | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacity and on the dates indicated.
| Signature | Title | Date | ||
| /s/ James F. O’Rourke | Principal Executive Officer & Principal | |||
| James F. O’Rourke | Accounting Officer & Director | March 1, 2022 |
| 13 |
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
a) The following documents are filed as a part of this Annual Report:
(1) Financial Statements
The list of consolidated financial statements and notes required by this Item 15(a)(1) is set forth in the “Index to Financial Statements” within this Annual Report.
(2) Financial Statement Schedules
All schedules have been omitted because the required information is included in the financial statements or notes thereto.
(b) Exhibits
Copies of the following documents are included as exhibits to this Annual Report on Form 10-K.
| 101.INS | Inline XBRL Instance Document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
** Filed herewith
| 14 |