UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period 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)
| 7349 | ||||
(State or other Jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 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 the 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐
Yes ☒
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| OTC Markets “PINK” |
As of November 10, 2023, there were shares of the registrant’s common stock outstanding.
DEEP GREEN WASTE & RECYCLING, INC.
TABLE OF CONTENTS
| 2 |
USE OF MARKET AND INDUSTRY DATA
This Quarterly Report on Form 10-Q includes market and industry data that we have obtained from third-party sources, including industry publications, as well as industry data prepared by our management on the basis of its knowledge of and experience in the industries in which we operate (including our management’s estimates and assumptions relating to such industries based on that knowledge). Management has developed its knowledge of such industries through its experience and participation in these industries. While our management believes the third-party sources referred to in this Quarterly Report on Form 10-Q are reliable, neither we nor our management have independently verified any of the data from such sources referred to in this Quarterly Report on Form 10-Q or ascertained the underlying economic assumptions relied upon by such sources. Furthermore, internally prepared and third-party market prospective information, in particular, are estimates only and there will usually be differences between the prospective and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material. Also, references in this Quarterly Report on Form 10-Q to any publications, reports, surveys or articles prepared by third parties should not be construed as depicting the complete findings of the entire publication, report, survey or article. The information in any such publication, report, survey or article is not incorporated by reference in this Quarterly Report on Form 10-Q.
Solely for convenience, we refer to trademarks in this Quarterly Report on Form 10-Q without the ® or the ™ or symbols, but such references are not intended to indicate that we will not assert, to the fullest extent under applicable law, our rights to our own trademarks. Other service marks, trademarks and trade names referred to in this Quarterly Report on Form 10-Q, if any, are the property of their respective owners, although for presentational convenience we may not use the ® or the ™ symbols to identify such trademarks.
OTHER PERTINENT INFORMATION
Unless the context otherwise indicates, when used in this Quarterly Report on Form 10-Q, the terms “Deep Green” “we,” “us,” “our,” the “Company” and similar terms refer to Deep Green Waste & Recycling, Inc., a Wyoming corporation formerly known as Critic Clothing, Inc., and affiliates.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q for the period ended September 30, 2023 (the “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements relate to future events (including, without limitation, the terms, timing and closing of our proposed acquisitions or our future financial performance). We have attempted to identify forward-looking statements by using terminology such as “anticipates,” “believes,” “expects,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predict,” “should” or “will” or the negative of these terms or other comparable terminology. These statements are only predictions; uncertainties and other factors may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels or activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our expectations are as of the date this Quarterly Report is filed, and we do not intend to update any of the forward-looking statements after the date this Quarterly Report is filed to confirm these statements to actual results, unless required by law.
You should not place undue reliance on forward looking statements. The cautionary statements set forth in this Quarterly Report identify important factors which you should consider in evaluating our forward-looking statements. These factors include, among other things:
| ● | Our ability to effectively execute our business plan; | |
| ● | Our ability to manage our expansion, growth and operating expenses; | |
| ● | Our ability to protect our brands and reputation; |
| 3 |
| ● | Our ability to repay our debts; | |
| ● | Our ability to evaluate and measure our business, prospects and performance metrics; | |
| ● | Our ability to compete and succeed in a highly competitive and evolving industry; | |
| ● | Our ability to respond and adapt to changes in technology and customer behavior; | |
| ● | Risks in connection with completed or potential acquisitions, dispositions and other strategic growth opportunities and initiatives; | |
| ● | Risks related to the anticipated timing of the closing of any potential acquisitions; | |
| ● | Risks related to the integration with regards to potential or completed acquisitions; | |
| ● | Various risks related to health epidemics, pandemics and similar outbreaks, such as the coronavirus disease 2019 (“COVID-19”) pandemic, which may have material adverse effects on our business, financial position, results of operations and/or cash flows. |
This Quarterly Report on Form 10-Q also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other industry data. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified the statistical and other industry data generated by independent parties and contained in this Quarterly Report and, accordingly, we cannot guarantee their accuracy or completeness, though we do generally believe the data to be reliable. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including, but not limited to, the possibility that we may fail to preserve our expertise in consumer product development; that existing and potential distribution partners may opt to work with, or favor the products of, competitors if our competitors offer more favorable products or pricing terms; that we may be unable to maintain or grow sources of revenue; that we may be unable maintain profitability; that we may be unable to attract and retain key personnel; or that we may not be able to effectively manage, or to increase, our relationships with customers; that we may have unexpected increases in costs and expenses. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.
| 4 |
PART I
INDEX TO FINANCIAL STATEMENTS
| 5 |
DEEP GREEN WASTE & RECYCLING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2023 | December 31, 2022 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $ | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Goodwill and Intangible assets, net | ||||||||
| Deposits | ||||||||
| Total other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES | ||||||||
| Current liabilities: | ||||||||
| Current portion of debt | $ | $ | ||||||
| Secured notes and convertible notes payable, net of debt discounts of $ | ||||||||
| Accounts payable | ||||||||
| Accrued expenses | ||||||||
| Deferred compensation | ||||||||
| Accrued interest | ||||||||
| Customer deposits payable | ||||||||
| Derivative liability | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities: | ||||||||
| Long-term portion of debt | ||||||||
| Total long-term liabilities | ||||||||
| Total liabilities | ||||||||
| STOCKHOLDERS’ DEFICIT | ||||||||
| Common stock, $ and $ par value; and and shares authorized; and shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | $ | $ | ||||||
| Preferred Stock, $ and $ par value, $ and $ per share stated value, and shares authorized; and shares of Series B Convertible Preferred Stock issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 6 |
DEEP GREEN WASTE & RECYCLING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Total revenues | ||||||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross margin | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative, including stock based compensation of $, $, $ and $, respectively. | ||||||||||||||||
| Officers and directors’ compensation (including stock-based compensation of $, $, $ and $ respectively) | ||||||||||||||||
| Professional and consulting (including stock-based compensation of $, $, $ and $ respectively) | ||||||||||||||||
| Provision for doubtful accounts | ||||||||||||||||
| Depreciation and Amortization | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Other (expense) income: | ||||||||||||||||
| Derivative liability income (expense) | ( | ) | ( | ) | ||||||||||||
| Loss on conversions of debt | ( | ) | ( | ) | ( | ) | ||||||||||
| Gain on asset disposal | ||||||||||||||||
| Interest expense (including amortization of debt discounts of | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other | ( | ) | ( | ) | ||||||||||||
| Total other (expense) income | ( | ) | ( | ) | ( | ) | ||||||||||
| Net income (loss) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Net income (loss) per common share: | ||||||||||||||||
| Basic and diluted net income (loss) per common share | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Weighted average number of common shares outstanding – basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 7 |
DEEP GREEN WASTE & RECYCLING, INC.
CONDENSED
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ (DEFICIENCY)
(Unaudited)
For the three and nine months ended September 30, 2023:
| Series B | Additional | |||||||||||||||||||||||||||
| Preferred stock | Common Stock | Paid in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balances at December 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Issuance of common stock in satisfaction of notes payable and accrued interest | ||||||||||||||||||||||||||||
| Net loss for the three months ended March 31, 2023 | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balances at March 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Issuance of common stock incentives for officers and directors | - | |||||||||||||||||||||||||||
| Issuance of common stock incentives for employees | - | |||||||||||||||||||||||||||
| Issuance of common stock in satisfaction of consulting services | - | |||||||||||||||||||||||||||
| Net loss for the three months ended June 30, 2023 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balances at June 30, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Issuance of common stock incentives for officers and directors | - | - | ||||||||||||||||||||||||||
| Issuance of common stock incentives for employees | - | - | ||||||||||||||||||||||||||
| Issuance of common stock in satisfaction of consulting services | - | - | ||||||||||||||||||||||||||
| Net loss for the three months ended September 30, 2023 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balances at September 30, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
For the three and nine months ended September 30, 2022:
| Series B | Additional | |||||||||||||||||||||||||||
| Preferred stock | Common Stock | Paid in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balances at January 1, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Issuance of common stock relating to officer employment agreement | - | |||||||||||||||||||||||||||
| Issuance of common stock for consulting services | - | |||||||||||||||||||||||||||
| Issuance of common stock incentives for officers and directors | - | |||||||||||||||||||||||||||
| Issuance of common stock in satisfaction of notes payable and accrued interest | - | |||||||||||||||||||||||||||
| Net loss for the three months ended March 31, 2022 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balances at March 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Issuance of common stock in satisfaction of notes payable and accrued interest | - | |||||||||||||||||||||||||||
| Issuance of common stock for consulting services | - | |||||||||||||||||||||||||||
| Net loss for the three months ended June 30, 2022 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balances at June 30, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Issuance of common stock in satisfaction of notes payable and accrued interest | - | |||||||||||||||||||||||||||
| Net loss for the three months ended September 30, 2022 | - | - | ||||||||||||||||||||||||||
| Balances at September 30, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 8 |
DEEP GREEN WASTE & RECYCLING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 2023 and 2022
(Unaudited)
| September 30, 2023 | September 30, 2022 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net income (loss) for the period | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Gain on asset disposition | ( | ) | ||||||
| Provision for doubtful accounts | ||||||||
| Amortization of debt discounts | ||||||||
| Derivative liability (income) expense | ( | ) | ||||||
| Loss on conversions of debt | ||||||||
| Stock-based compensation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Prepaid expenses and other current assets | ||||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Accrued expenses | ||||||||
| Deferred compensation | ||||||||
| Accrued interest | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| INVESTING ACTIVITIES: | ||||||||
| Proceeds from disposition of asset | ||||||||
| Net cash provided in investing activities | ||||||||
| FINANCING ACTIVITIES: | ||||||||
| Proceeds from secured notes and convertible notes payable | ||||||||
| Increase (decrease) in other debt | ||||||||
| Repayment of note issued in Lyell Acquisition | ( | ) | ||||||
| Net cash provided by (used in) financing activities | ||||||||
| NET INCREASE (DECREASE) IN CASH | ( | ) | ||||||
| CASH, BEGINNING OF PERIOD | ||||||||
| CASH, END OF PERIOD | $ | $ | ||||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Non-Cash investing and financing activities: | ||||||||
| Initial derivative liability charged to debt discounts | ||||||||
| Issuance of common stock to directors for accrued compensation | $ | $ | ||||||
| Issuance of common stock in satisfaction of debt: | ||||||||
| Fair Value of Common Stock Issued | $ | $ | ||||||
| Notes Payable Satisfied | ( | ) | ( | ) | ||||
| Accrued Interest Satisfied | ( | ) | ||||||
| Loss on conversions of notes payable | $ | $ | ||||||
| Issuance of common stock in satisfaction of consulting services accounts payable: | ||||||||
| Fair Value of Common Stock Issued | $ | $ | ||||||
| Accounts Payable Satisfied | ( | ) | ||||||
| Loss on satisfaction of accounts payable | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 9 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE A – ORGANIZATION
Deep Green Waste & Recycling, Inc. (“Deep Green”, the “Company”, “we”, “us”, or “our”) is a publicly quoted company seeking to create value for its shareholders by seeking to acquire other operating entities for growth in return for shares of our common stock.
The Company was organized as a Nevada Corporation on August 24, 1995 under the name of Evader, Inc. On May 25, 2012, the Company filed its Foreign Profit Corporation Articles of Domestication to change the domicile of the Company from Nevada to Wyoming. On November 4, 2015, the Company filed an Amendment to its Articles of Incorporation to change the name of the Company to Critical Clothing, Inc. and on August 28, 2017 an Amendment was filed to change the Company name to Deep Green Waste & Recycling, Inc.
On
August 24, 2017, the Company entered into an Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations
(the “Agreement”) with St. James Capital Management, LLC. Under the terms of the Agreement, the Company transferred and assigned
all of the assets of the Company related to its extreme sports apparel design and manufacturing business in exchange for the assumption
of certain liabilities and cancellation of shares (as adjusted for the September 27, 2017
On
August 24, 2017, the Company acquired all the membership units of Deep Green Waste and Recycling, LLC (“DGWR LLC”), a Georgia
limited liability company engaged in the waste recycling business since 2011, in exchange for shares (as adjusted for the September
27, 2017
Effective
October 1, 2017, Deep Green acquired Compaction and Recycling Equipment, Inc. (CARE), a Portland, Oregon based company that sells and
services waste and recycling equipment. Deep Green purchased
Effective
October 1, 2017, Deep Green acquired Columbia Financial Services, Inc, (CFSI), a Portland, Oregon based company that finances the purchases
of waste and recycling equipment. Deep Green purchased
On
August 7, 2018, the Company entered into an Agreement of Conveyance, Transfer and Assignment of Subsidiaries and Assumption of Obligations
(the “Agreement”) with Mirabile Corporate Holdings, Inc. Under the terms of the Agreement, the Company transferred all capital
stock of its two wholly owned subsidiaries, Compaction and Recycling Equipment, Inc. and Columbia Financial Services, Inc., to Mirabile
Corporate Holdings, Inc. in exchange for the assumption and cancellation of certain liabilities. Deep Green’s then Chief Executive
Officer owned a
In the quarterly period ended March 31, 2021, the Company re-launched its waste and recycling services operation and has begun to re-engage with customers, waste haulers and recycling centers, which are critical elements of its historically successful business model: designing and managing waste programs for commercial and institutional properties for cost savings, ease of operation, and minimal administrative stress for its clients.
| 10 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE A – ORGANIZATION (continued)
Asset Purchase Agreement
On
February 8, 2021, the Company, through its wholly owned subsidiary DG Research, Inc. (the “Buyer”), entered into an Asset
Purchase Agreement (the “Agreement”) with Amwaste, Inc. (the “Seller”). Under the terms of the Agreement, the
Buyer agreed to purchase from the Seller certain assets (the “Assets”) utilized in the Seller’s waste management business
located in Glynn County, Georgia. In consideration for the purchase of the Assets, the Buyer paid the seller $
Securities Purchase Agreement
On
August 11, 2021, the Company entered into a Securities Purchase Agreement (the “Agreement”) with Jeremy Lyell (the
“Shareholder”) and Lyell Environmental Services, Inc. (hereinafter “LES”). On October 19, 2021, the Company
closed on the Securities Purchase Agreement (the “Agreement”) with Jeremy Lyell (the “Shareholder”). In
consideration for the purchase of all Lyell Environmental Services, Inc. shares from the Shareholder, the Company was to pay the
Shareholder (i) $
In order to further grow its business, the Company plans to:
| ● | expand its service offerings to provide additional sustainable waste management solutions that further minimize costs based on volume and content of waste streams, and methods of disposal, including landfills, transfer stations and recycling centers; | |
| ● | Acquire profitable waste and recycling services companies with similar or compatible and synergistic business models, that can help the Company achieve these objectives; | |
| ● | Offer innovative recycling services that significantly reduce the disposal of plastics, electronic wastes, food wastes, and hazardous wastes in the commercial property universe; | |
| ● | Establish partnerships with innovative universities, municipalities and companies; and | |
| ● | Attract investment funds who will actively work with the Company to achieve these goals and help the Company grow into a leading waste and recycling services supplier in North America. |
Some potential merger/acquisition candidates have been identified and discussions initiated. These candidates are within the Company’s core business model, serving commercial properties, accretive to cash flow, and geographically favorable. While seeking to identify acquisition candidates, the Company seeks to identify target entities with a similar core business model or a model which naturally integrates with its own, and which are situated in opportunistic geographic locations.
We have unrestricted discretion in seeking and participating in a business opportunity, subject to the availability of such opportunities, economic conditions, and other factors.
| 11 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE A – ORGANIZATION (continued)
The selection of a business opportunity in which to participate is complex and risky. Additionally, we have only limited resources and may find it difficult to locate good opportunities. There can be no assurance that we will be able to identify and acquire any business opportunity which will ultimately prove to be beneficial to us and our shareholders. We will select any potential business opportunity based on our management’s best business judgment.
Our activities are subject to several significant risks, which arise primarily as a result of the fact that we have limited current business and may acquire or participate in a business opportunity based on the decision of management, which potentially could act without the consent, vote, or approval of our shareholders. The risks faced by us are further increased as a result of our lack of resources and our inability to provide a prospective business opportunity with significant capital.
Reverse Stock Split
On
June 20, 2023, the Company effectuated a
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Summary of Significant Accounting Policies
This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States and have been consistently applied in the preparation of the financial statements.
Interim Financial Statements
The unaudited condensed financial statements of the Company for the three and nine month periods ended September 30, 2023 and 2022 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2022 was derived from the audited financial statements included in the Company’s financial statements as of and for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on May 15, 2023. These financial statements should be read in conjunction with that report.
Principles of Consolidation
The consolidated financial statements include the accounts of Deep Green Waste & Recycling, Inc. (“Deep Green”) and Deep Green’s wholly owned subsidiaries, DG Research, Inc., DG Treasury, Inc. and Lyell Environmental Services Inc. All inter-company balances and transactions have been eliminated in consolidation.
Cash Equivalents
Investments having an original maturity of 90 days or less that are readily convertible into cash are considered to be cash equivalents. For the periods presented, the Company had no cash equivalents.
| 12 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Taxes
In accordance with Accounting Standards Codification (ASC) 740 - Income Taxes, the provision for income taxes is computed using the asset and liability method. The asset and liability method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements. The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is not more likely than not that a deferred tax asset will be realized.
We expect to recognize the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a “more-likely-than-not” threshold, the amount to be recognized in the financial statements will be the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of September 30, 2023 and December 31, 2022, we had no uncertain tax positions. We recognize interest and penalties, if any, related to uncertain tax positions as general and administrative expenses. We currently have no federal or state tax examinations nor have we had any federal or state examinations since our inception. To date, we have not incurred any interest or tax penalties.
Financial Instruments and Fair Value of Financial Instruments
We adopted ASC Topic 820, Fair Value Measurements and Disclosures, for assets and liabilities measured at fair value on a recurring basis. ASC Topic 820 establishes a common definition for fair value to be applied to existing US GAAP that requires the use of fair value measurements that establishes a framework for measuring fair value and expands disclosure about such fair value measurements.
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC Topic 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
| Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or liabilities. | |
| Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data. | |
| Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. |
The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. Except for the derivative liability (see NOTE H), where Level 2 inputs were used, we had no financial assets or liabilities carried and measured at fair value on a recurring or nonrecurring basis during the periods presented.
For nonrecurring fair value measurements of issuances of common stock for services and in satisfaction of convertible notes payable and accrued interest (see NOTE I), we used Level 2 inputs.
Derivative Liabilities
We evaluate convertible notes payable, stock options, stock warrants and other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, Derivative Instruments and Hedging: Contracts in Entity’s Own Equity.
| 13 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date.
Impairment of Long-Lived Assets
The Company’s long-lived assets (consisting primarily of property, equipment and intangible assets) are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future net cash flows expected to be generated by that asset. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Through September 30, 2023, the Company has not experienced impairment losses on its long-lived assets.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation and amortization. Routine maintenance and repairs and minor replacement costs are charged to expense as incurred, while expenditures that extend the life of these assets are capitalized. Depreciation and amortization are provided for in amounts sufficient to write off the cost of depreciable assets to operations over their estimated service lives. The Company uses the straight-line method of depreciation for both financial reporting and tax purposes. Upon the sale or retirement of property and equipment, the cost and related accumulated depreciation and amortization will be removed from the accounts and the resulting profit or loss will be reflected in the statement of operations. The estimated lives used to determine depreciation and amortization are:
| Trucks | ||
| Containers | ||
| Software | ||
| Office Equipment | ||
| Furniture and Fixtures | ||
| Waste and Recycling Equipment | ||
| Leasehold Improvements |
Goodwill
Goodwill relates to the acquisition of Lyell Environmental Services, Inc. on October 19, 2021.
We test indefinite-lived intangibles and goodwill for impairment on an annual basis in the fourth quarter of our fiscal year, or more frequently if events or changes in circumstances indicate that the carrying value might be impaired. We have the option to first assess qualitative factors in order to determine if it is more likely than not that the fair value of our intangible assets or reporting units are greater than their carrying value. If the qualitative assessment leads to a determination that the intangible asset/ reporting unit’s fair value may be less than its carrying value, or if we elect to bypass the qualitative assessment altogether, we are required to perform a quantitative impairment test by calculating the fair value of the intangible asset/reporting unit and comparing the fair value with its associated carrying value. The estimated fair value of our reporting units is determined based upon the income approach using discounted future cash flows. In situations where the fair value is less than the carrying value, an impairment charge would be recorded for the shortfall.
| 14 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Amortizable Intangible Assets
Amortizable intangible assets consist of the customer lists and covenants not to compete acquired in connection with the Amwaste Asset Purchase Agreement on February 11, 2021 and the Lyell Environmental Services, Inc. acquisition on October 19, 2021.
We
test amortizable intangible assets for impairment if events or changes in circumstances indicate that the assets might be impaired. These
intangible assets are amortized on a straight-line basis over their estimated useful lives of
Equity Instruments Issued to Non-Employees for Acquiring Goods or Services
Issuances of our common stock or warrants for acquiring goods or services are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn the equity instruments is reached (a “performance commitment” which would include a penalty considered to be of a magnitude that is a sufficiently large disincentive for nonperformance) or (ii) the date at which performance is complete.
Although situations may arise in which counter performance may be required over a period of time, the equity award granted to the party performing the service may be fully vested and non-forfeitable on the date of the agreement. As a result, in this situation in which vesting periods do not exist if the instruments are fully vested on the date of agreement, we determine such date to be the measurement date and will record the estimated fair market value of the instruments granted as a prepaid expense and amortize such amount to expense over the contract period. When it is appropriate for us to recognize the cost of a transaction during financial reporting periods prior to the measurement date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values.
Stock-Based Compensation
We account for share-based awards to employees in accordance with ASC 718 “Stock Compensation”. Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method. Share-based awards to non-employees are accounted for in accordance with ASC 505-50 “Equity”, wherein such awards are expensed over the period in which the related services are rendered.
Related Parties
A party is considered to be related to us if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with us. Related parties also include our principal owners, our management, members of the immediate families of our principal owners and our management and other parties with which we may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties, or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests, is also a related party.
| 15 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue Recognition
Revenue is recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) the price is fixed or determinable, (3) collectability is reasonably assured, and (4) delivery has occurred.
Advertising Costs
Advertising costs, which were not significant for the periods presented, are expensed as incurred.
We compute net loss per share in accordance with FASB ASC 260. The ASC specifies the computation, presentation and disclosure requirements for loss per share for entities with publicly held common stock.
Basic loss per share amounts are computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed on the basis of the weighted average number of common shares and dilutive securities (such as stock options, warrants and convertible securities) outstanding. Dilutive securities having an anti-dilutive effect on diluted net loss per share are excluded from the calculation.
For the periods presented, we have excluded the shares issuable from the convertible notes payable (see NOTE G) and the warrants (see NOTE I) from our diluted net loss per share calculation as the effect of their inclusion would be anti-dilutive.
Recently Enacted Accounting Standards
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which has superseded nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than was required under prior U.S. GAAP. We adopted ASU 2014-09 effective January 1, 2018. ASU 2014-09 has not had any significant effect on our financial statements for the periods presented.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), to provide guidance on recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements, specifically differentiating between different types of leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from all leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous GAAP. There continues to be a differentiation between finance leases and operating leases. However, the principal difference from previous guidance is that the lease assets and lease liabilities arising from operating leases should be recognized in the balance sheet. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. We adopted ASU 2016-02 effective January 1, 2019. ASU No. 2016-02 has not had any significant effect on our financial statements for the periods presented.
| 16 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
On July 13, 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) 2017-11. Among other things, ASU 2017-11 provides guidance that eliminates the requirement to consider “down round” features when determining whether certain financial instruments or embedded features are indexed to an entity’s stock and need to be classified as liabilities. ASU 2017-11 provides for entities to recognize the effect of a down round feature only when it is triggered and then as a dividend and a reduction to income available to common stockholders in basic earnings per share. The guidance was effective for annual periods beginning after December 15, 2018; early adoption was permitted.
The Company early adopted ASU 2017-11. As a result, we have not recognized the fair value of the warrants containing down round features as liabilities. Please see NOTE I - CAPITAL STOCK for further information.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.
NOTE C - PROPERTY AND EQUIPMENT
Property and Equipment consist of the following at:
| September 30, 2023 (Unaudited) | December 31, 2022 | |||||||
| Office equipment | $ | $ | ||||||
| Waste and Recycling Equipment | ||||||||
| Total | ||||||||
| Accumulated depreciation and amortization | ( | ) | ( | ) | ||||
| Net | $ | $ | ||||||
For
the nine months ended September 30, 2023 and 2022, depreciation of property and equipment was $
NOTE D – GOODWILL AND INTANGIBLE ASSETS
Goodwill and Intangible assets consist of the following at:
September
30, (Unaudited) | December 31, 2022 | |||||||
| Customer list and convenant not to compete acquired in connection with the Stock Purchase Agreement with Lyell Environmental Service, Inc. closed on October 19,2021 | $ | $ | ||||||
| Goodwill acquired in connection with the Stock Purchase Agreement with Lyell Environmental Services, Inc. closed on October 19, 2021 | ||||||||
| Customer list and covenant not to compete acquired in connection with the Asset Purchase Agreement with Amwaste, Inc. closed on February 11, 2021 | ||||||||
| Total | ||||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Net | $ | $ | ||||||
| 17 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE D – GOODWILL AND INTANGIBLE ASSETS (continued)
The
customer lists and covenants not to compete are being amortized using the straight-line method over their estimated useful lives of
At September 30, 2023, the expected future amortization of intangible assets expense is:
| Amount | ||||
| Fiscal year ending December 31: | ||||
| 2023 (excluding the nine months ended September 30, 2023) | $ | |||
| 2024 | ||||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| Thereafter | ||||
| Total | $ | |||
NOTE E – ACCOUNTS PAYABLE
Accounts payable consist of the following at:
September
30, | December 31, 2022 | |||||||
| August 1, 2018 Default Judgment payable to Ohio vendor | $ | $ | ||||||
| January 14, 2019 Default Judgment payable to Tennessee customer | ||||||||
| January 24, 2019 Default judgment payable to Florida vendor | ||||||||
| Other vendors of materials and services | ||||||||
| Credit card obligations | ||||||||
| Total | $ | $ | ||||||
Most of the accounts payable relate to services performed by subcontractors prior to the cessation of our waste recycling business on August 7, 2018. In many cases, these subcontractors have subsequently reached agreements with our former customers to continue the provision of services to such customers.
NOTE F – DEBT
Debt consists of the following at:
September
30, |
December
31, |
|||||||
| Claimed amount due to Factor (AEC Yield Capital, LLC) pursuant to Factor’s Notice of Default dated July 31, 2018 | $ | $ | ||||||
| Short-term capital lease | ||||||||
| Note issued in Lyell acquisition | ||||||||
| Loans
payable to officers, interest at |
||||||||
| Sales Tax Payable and payroll tax withholdings and liabilities | ||||||||
| Due to seller of Lyell | ||||||||
| Note payable to short term funding company | ||||||||
| Note
payable to officer, interest at |
||||||||
| Total | ||||||||
| Current portion of debt | ( |
) | ( |
) | ||||
| Long-term portion of debt | $ | $ | ||||||
| 18 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE G – SECURED NOTES AND CONVERTIBLE NOTES PAYABLE
Secured Notes and Convertible Notes Payable consist of:
September
30, (Unaudited) | December
31, | |||||||
| Unsecured Convertible Promissory Note payable to Quick Capital, LLC: Issue date October 14, 2021. (i) | $ | $ | ||||||
| Unsecured Convertible Promissory Note payable to BHP Capital NY Inc.: Issue date October 14, 2021. (ii) | ||||||||
| Unsecured Convertible Promissory Note payable to BHP Capital NY Inc.: Issue date February
28, 2022 - net of unamortized debt discount of $ | ||||||||
| Unsecured Convertible Promissory Note payable to Quick Capital,
LLC: Issue date February 28, 2022 - net of unamortized debt discount of $ | ||||||||
| Secure Promissory Note payable to Quick Capital, LLC: issue date
July 25, 2023 – net of unamortized debt discount of $ | ||||||||
| Secure Promissory Note payable to BHP Capital NY Inc.: issue date
July 25, 2023 – net of unamortized debt discount of $ | ||||||||
| Total | $ | $ | ||||||
| (i) | ||
| (ii) |
| 19 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE G – CONVERTIBLE NOTES PAYABLE (continued)
| (iii) |
| (iv) |
| 20 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE H - DERIVATIVE LIABILITY
The derivative liability at September 30, 2023 and December 31, 2022 consisted of:
September 30, | December 31, 2022 | |||||||
| Convertible Promissory Note payable to Quick Capital, LLC. Please see NOTE G – SECURED NOTES AND CONVERTIBLE NOTES PAYABLE for further information. | $ | $ | ||||||
| Convertible Promissory Note payable to BHP Capital NY Inc. Please see NOTE G – SECURED NOTES AND CONVERTIBLE NOTES PAYABLE for further information. | ||||||||
| Total | $ | $ | ||||||
The above Convertible Promissory Notes (the “Notes”) contain a variable conversion feature based on the future trading price of the Company’s common stock. Therefore, the number of shares of common stock issuable upon conversion of the Notes is indeterminate. Accordingly, we have recorded the fair value of the embedded conversion feature as a derivative liability at the respective issuance dates of the Notes and charged the applicable amounts to debt discount and the remainder to other expense. The increase (decrease) in the fair value of the derivative liability from the respective issuance date of the Notes to the measurement date is charged (credited) to other expense (income).
On June 16, 2023, as part of an agreement reached with the SEC, BHP Capital agreed to surrender all conversion rights in its currently held convertible notes, surrender for cancellation all unexercised warrants that it acquired in connection with convertible notes, and surrender for cancellation any shares it holds that were acquired by converting notes or exercising related warrants.
The
fair value of the derivative liability was measured at the respective issuance date and at September 30, 2023 and December 31, 2022 using
the Black Scholes option pricing model. Assumptions used for the calculation of the derivative liability of the Notes at September 30,
2023 were (1) stock price of $ per share, (2) conversion price of $
NOTE I - CAPITAL STOCK
Preferred Stock
On
July 18, 2010, the Board of Directors unanimously approved the designation of a series of preferred stock to be known as
“Series A Convertible Preferred Stock” (hereinafter “Series A”) with a stated par value of $ per
share. The designations, powers, preferences and rights, and the qualifications, limitations or restrictions hereof, in respect of
the Series A shall be as hereinafter described. The holders of Series A shall not be entitled to receive dividends, nor shall
dividends be paid on common stock or any other Series of Preferred Stock while Series A shares are outstanding. The holders of
Series A shall be entitled to vote on all matters submitted to a vote of the Shareholders of the Company.
| 21 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE I - CAPITAL STOCK (continued)
At September 30, 2023 and December 31, 2022, there were and shares of Series A issued and outstanding, respectively.
On January 22, 2020, the Board of Directors unanimously approved the designation of a series of preferred stock to be known as “Series B Convertible Preferred Stock” (hereinafter “Series B”) with a par value of $ per share and authorization of shares. The designations, powers, preferences and rights, and the qualifications, limitations or restrictions hereof, in respect of the Series B shall be as hereinafter described.
The
holders of the Series B, shall not be entitled to receive dividends, nor shall dividends be paid on common stock or any other Series
of Preferred Stock while Series B shares are outstanding. The holders of Series B shall be entitled to vote on all matters submitted
to a vote of the Shareholders of the Company.
If the Corporation shall commence a voluntary case under the U.S. Federal bankruptcy laws or any other applicable bankruptcy, insolvency or similar law, or consent to the entry of an order for relief in an involuntary case under any law or to the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Corporation or of any substantial part of its property, or make an assignment for the benefit of its creditors, or admit in writing its inability to pay its debts generally as they become due, or if a decree or order for relief in respect of the Corporation shall be entered by a court having jurisdiction in the premises in an involuntary case under the U.S. Federal bankruptcy laws or any other applicable bankruptcy, insolvency or similar law resulting in the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Corporation or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and any such decree or order shall be unstayed and in effect for a period of sixty (60) consecutive days and, on account of any such event, the Corporation shall liquidate, dissolve or wind up, or if the Corporation shall otherwise liquidate, dissolve or wind up, including, but not limited to, the sale or transfer of all or substantially all of the Corporation’s assets in one transaction or in a series of related transactions (a “Liquidation Event”), no distribution shall be made to the holders of any shares of capital stock of the Corporation (other than Senior Securities and Pari Passu Securities) upon liquidation, dissolution or winding up unless prior thereto the Holders of shares of Series B Preferred Stock shall have received the Liquidation Preference (equal to the stated value or $ per share) with respect to each share. If, upon the occurrence of a Liquidation Event, the assets and funds available for distribution among the Holders of the Series B Preferred Stock and Holders of Pari Passu Securities shall be insufficient to permit the payment to such holders of the preferential amounts payable thereon, then the entire assets and funds of the Corporation legally available for distribution to the Series B Preferred Stock and the Pari Passu Securities shall be distributed ratably among such shares in proportion to the ratio that the Liquidation Preference payable on each such share bears to the aggregate Liquidation Preference payable on all such shares.
On
January 22, 2020, the Company issued shares of Series B Preferred Stock to Bill Edmonds in satisfaction of $
On
June 3, 2020, the Company issued shares of its Series B Convertible Preferred Stock to Bill Edmonds in satisfaction of $
On November 30, 2022, the Company issued
shares of its Series B Convertible Preferred Stock to Bill Edmonds in satisfaction of $
At September 30, 2023 and December 31, 2022, there were and shares of Series B Preferred Stock issued and outstanding, respectively.
Common Stock
| 22 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE I - CAPITAL STOCK (continued)
Holders of the Company’s common stock are entitled to share in all dividends that the board of directors, in its discretion, declares from legally available funds. In the event of a liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock. The Company’s common stock has no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to the Company’s common stock.
On July 11, 2021, the Company’s Board unanimously approved an Amendment to our Articles of Incorporation (the “Authorized Share Amendment”) to increase the number of authorized shares of Common Stock of the Company from to and to increase the number of authorized shares of Preferred Stock of the Company from to with the Board maintaining the discretion of whether or not to implement the increase in authorized shares of Common and Preferred Stock. On July 11, 2021, the Majority Stockholders delivered an executed written consent in lieu of a special meeting (the “Stockholder Consent”) authorizing and approving the Authorized Share Amendment and the increase in authorized shares of Common and Preferred Stock.
On February 10, 2022, the Company’s Board unanimously approved an Amendment to our Articles of Incorporation (the “Authorized Share Amendment”) to increase the number of authorized shares of Common Stock of the Company from to with the Board maintaining the discretion of whether or not to implement the increase in authorized shares of Common Stock. On February 10, 2022, the Majority Stockholders delivered an executed written consent in lieu of a special meeting (the “Stockholder Consent”) authorizing and approving the Authorized Share Amendment and the increase in authorized shares of Common Stock.
On September 17, 2022, the Company’s Board unanimously approved an Amendment to our Articles of Incorporation (the “Authorized Share Amendment”) to increase the number of authorized shares of Common Stock of the Company from to with the Board maintaining the discretion of whether or not to implement the increase in authorized shares of Common Stock. On September 17, 2022, the Majority Stockholders delivered an executed written consent in lieu of a special meeting (the “Stockholder Consent”) authorizing and approving the Authorized Share Amendment and the increase in authorized shares of Common Stock.
Common Stock and Preferred Stock Issuances
For the nine months ended September 30, 2023 and fiscal year ended December 31, 2022, the Company issued and/or sold the following securities:
Common Stock
For the nine months ended September 30, 2023
On
January 4, 2023, the Company issued a noteholder shares of common stock in satisfaction of $
On
January 23, 2023, the Company issued a noteholder shares of common stock in satisfaction of $
On
June 20, 2023, the Company effectuated a
| 23 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE I - CAPITAL STOCK (continued)
On
June 20, 2023, the Company issued a total of shares of common stock ( were issued to the three officers of the Company,
to five key employees of the Company) for services rendered. The $
On
June 20, 2023, shares of common stock were issued to a consultant for work previously performed. The $
2022
On
January 3, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
January 6, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
January 10, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
January 11, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On January 19, 2022, the Company issued shares of common stock under the Company’s 2021 Stock Option Incentive Plan to Bill Edmonds for services rendered on behalf of the Company.
On January 19, 2022, the Company issued shares of common stock under the Company’s 2021 Stock Option Incentive Plan to David Bradford for services rendered on behalf of the Company.
On January 19, 2022, the Company issued shares of common stock under the Company’s 2021 Stock Option Incentive Plan to Lloyd Spencer for services rendered on behalf of the Company.
On January 19, 2022, the Company issued shares of common stock under the Company’s 2021 Stock Option Incentive Plan to an employee as per the terms of his employment agreement.
On January 20, 2022, the Company issued shares of common stock under the Company’s 2021 Stock Option Incentive Plan to Lloyd Spencer as per the terms of his employment agreement.
On January 20, 2022, the Company issued shares of common stock as compensation to a Consultant.
On
January 20, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
January 31, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
| 24 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE I - CAPITAL STOCK (continued)
On
February 1, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
February 2, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
February 2, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
February 4, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
February 10, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
February 23, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
March 18, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
March 21, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
March 24, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
March 24, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
April 18, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
April 19, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
April 25, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
| 25 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE I - CAPITAL STOCK (continued)
On
April 27, 2022, the Company issued a consultant shares of common stock for services rendered. The $
On
April 28, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
April 29, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
May 19, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
August 24, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
August 24, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
August 30, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
August 31, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
September 1, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
September 16, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
September 16, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
October 10, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
October 11, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
| 26 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE I - CAPITAL STOCK (continued)
On
October 13, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
October 18, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
October 19, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On October 28, 2022, the Company issued Bill Edmonds shares of common stock in satisfaction of $ of personal loans and other compensation.
On October 28, 2022, the Company issued David Bradford shares of common stock in satisfaction of $ of personal loans and other compensation.
On October 28, 2022, the Company issued Lloyd Spencer shares of common stock in satisfaction of $ of personal loans and other compensation.
On
November 21, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
November 21, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
November 28, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
December 6, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
December 6, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
On
December 19, 2022, the Company issued a noteholder shares of common stock in satisfaction of $
| 27 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE I - CAPITAL STOCK (continued)
Preferred Stock
For the nine months ended September 30, 2023
None
For the year ended December 31, 2022
On
November 30, 2022, the Company issued shares of its Series B Convertible Preferred Stock to Bill Edmonds in satisfaction of $
The number of preferred shares authorized with a par value of $ per share at September 30, 2023 and December 31, 2022 was and , respectively. At September 30, 2023 and December 31, 2022, there were and shares of preferred stock issued and outstanding, respectively.
Warrants and options
A summary of warrants and options activity follows:
| Shares Equivalent | ||||||||||||
| Options | Warrants | Total | ||||||||||
| Balance, December 31, 2020 | ||||||||||||
| Warrants expired on February 19, 2021 | ( | ) | ( | ) | ||||||||
| Warrants expired on March 16, 2021 | ( | ) | ( | ) | ||||||||
| Warrant issued on July 2, 2021 (i) | ||||||||||||
| Cashless exercise of warrant on September 21, 2021(i) | ( | ) | ( | ) | ||||||||
| Two warrants issued on October 14, 2021 (ii) | ||||||||||||
| Balance, December 31, 2021 | ||||||||||||
| 2022 Option/Warrant Activity | ||||||||||||
| Balance, December 31, 2022 | ||||||||||||
| 2023 Option/Warrant Activity | ||||||||||||
| Balance, March 31, 2023 | ||||||||||||
| 2023 Option/Warrant Activity(iii) | ( | ) | ( | ) | ||||||||
| Balance, June 30, 2023 | ||||||||||||
| 2023 Option/Warrant Activity | ||||||||||||
| Balance, September 30, 2023 | ||||||||||||
| (i) | |
| (ii) |
|
| (iii) |
| 28 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE I - CAPITAL STOCK (continued)
The following table summarizes information about warrants outstanding as of September 30, 2023:
| Description | Number Outstanding At September 30, 2023 | Exercise Price | Expiration Date | |||||||||
| Warrants issued October 14, 2021 | ||||||||||||
| Total | ||||||||||||
NOTE J - INCOME TAXES
The
provision for (benefit from) income taxes differs from the amount computed by applying the statutory United States federal income tax
rate for the periods presented to income (loss) before income taxes. The income tax rate was
| Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2023 (Unaudited) | September 30, 2022 (Unaudited) | September 30, 2023 (Unaudited) | September 30, 2022 (Unaudited) | |||||||||||||
| Expected tax at | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Non-deductible stock-based compensation | ||||||||||||||||
| Non-deductible (non-taxable) derivative liability expense (income) | ( | ) | ( | ) | ||||||||||||
| Non-deductible amortization of debt discounts | ||||||||||||||||
| Non-deductible loss on conversions of notes payable and accrued interest | ||||||||||||||||
| Increase (decrease) in Valuation allowance | ( | ) | ||||||||||||||
| Provision for (benefit from) income taxes | $ | $ | $ | $ | ||||||||||||
All tax years subsequent to 2019 remain subject to examination by the Internal Revenue Service.
Based
on management’s present assessment, the Company has not yet determined it to be more likely than not that a deferred tax asset
attributable to the future utilization of the net operating loss carryforward as of September 30, 2023 and December 31, 2022 will be
realized. Accordingly, the Company has provided a
Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited.
| 29 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE K - COMMITMENTS AND CONTINGENCIES
Occupancy
Corporate Office
Our current office space is located at 260 Edwards Plz Suite 21266, Saint Simons Island, Georgia 31522 pursuant to a month-to-month lease.
Amwaste Operations
In
conjunction with the Amwaste Acquisition, the Company acquired two storage yards under month-to-month leases. The first storage yard
is located at 4150 Whitlock St., GA 31520 and the monthly rent is $
Lyell Operations
In
conjunction with the Lyell Acquisition, the Company acquired an office under a month-to-month lease that is located at 211 Shady Grove
Rd, 1ashville, TN 37214 and the monthly rent is $
Employment Agreements
On
January 1, 2016, Deep Green Waste & Recycling, LLC (the “LLC”) entered into an Employment Agreement (the “Agreement”)
with David A. Bradford as Chief Operating Officer. In connection with his appointment, the LLC and Mr. Bradford entered into a written
Agreement for an initial
| 30 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE K - COMMITMENTS AND CONTINGENCIES (continued)
On
January 1, 2016, Deep Green Waste & Recycling, LLC (the “LLC”) entered into an Employment Agreement (the
“Agreement”) with Bill Edmonds as Managing Member, President and Chief Financial Officer. Mr. Edmonds became Chief
Executive Officer of the Company in 2011. In connection with his appointment, the LLC and Mr. Edmonds entered into a written
Agreement for an initial
On
December 4, 2019, the Company entered into an agreement with Lloyd Spencer as President and Chief Executive Officer. In connection
with his appointment, the Company and Mr. Spencer entered into a written employment agreement (the “Employment
Agreement”) for an initial three-year term, which provided for the following compensation terms for Mr. Spencer. Pursuant to
the Employment Agreement, Mr. Spencer was to receive a base salary of $
| 31 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE K - COMMITMENTS AND CONTINGENCIES (continued)
On March 14, 2022, Lloyd T. Spencer, the Company’s Chief Executive Officer, Secretary and Director, resigned in his position as Chief Executive Officer. Mr. Spencer retained his roles as Secretary and Director. On March 14, 2022, upon the resignation of Mr. Spencer as the Company’s Chief Executive Officer, the Board of Directors appointed Bill Edmonds as its new Chief Executive Officer. Mr. Edmonds retained his prior roles as interim Chief Financial Officer and Chairman of the Board of Directors. On March 14, 2022, the Board of Directors appointed David Bradford to President. Mr. Bradford retained his prior role as Chief Operating Officer.
Director Agreements
On
January 9, 2020, the Company and Lloyd Spencer (the “Director”) entered into a Board of Directors Services Agreement whereby
the Director shall receive compensation for serving on the Company’s Board of Directors equivalent to Five Thousand and no/100
dollars ($
On
January 9, 2020, the Company and Bill Edmonds (the “Director”) entered into a Board of Directors Services Agreement whereby
the Director shall receive compensation for serving on the Company’s Board of Directors equivalent to Five Thousand and no/100
dollars ($
Major Customer
For
the nine month period ended September 30, 2023, and full year ended December 31, 2022, one customer accounted for
Legal
As
indicated in NOTE E – ACCOUNTS PAYABLE, one customer and two vendors have received Default Judgments against Deep Green
aggregating $
On
January 1, 2023, the Company received notification of a complaint filed in the Supreme Court of the State of New York by Owen May and
MD Global. The complaint alleges “breach of contract, conversion, fraud, and securities fraud related to misconduct, failure to
perform, theft, and deceit and intentional misrepresentations done with scienter about securities by Deep Green Waste & Recycling
and Lloyd T Spencer”. The complaint seeks $
On June 1, 2023 the Company received notification that the Supreme Court of the State of New York dismissed the fraud and conversion claims brought by MD Global, LLC and further ruled that former CEO Lloyd Spencer should not be a party to the case.
| 32 |
DEEP GREEN WASTE & RECYCLING, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
NOTE L - GOING CONCERN UNCERTAINTY
Under ASC 205-40, we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet our future financial obligations as they become due within one year after the date that the financial statements are issued. As required by this standard, our evaluation shall initially not take into consideration the potential mitigating effects of our plans that have not been fully implemented as of the date the financial statements are issued.
In
performing the first step of this assessment, we concluded that the following conditions raise substantial doubt about our ability to
meet our financial obligations as they become due. We have a history of net losses: As of September 30, 2023, we had cash of $
In performing the second step of this assessment, we are required to evaluate whether our plans to mitigate the conditions above alleviate the substantial doubt about our ability to meet our obligations as they become due within one year after the date that the financial statements are issued. Our future plans include securing additional funding sources that may include establishing corporate partnerships, establishing licensing revenue agreements, issuing additional convertible debentures and issuing public or private equity securities, including selling common stock through an at-the-market facility (ATM).
There is no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available through external sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material effect on the business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or they will not have a significant dilutive effect on the Company’s existing shareholders. We have therefore concluded there is substantial doubt about our ability to continue as a going concern through November 2024.
The accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying 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 classification of liabilities that may result from our failure to continue as a going concern.
| 33 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Overview
Deep Green Waste & Recycling, Inc. (f/k/a Critic Clothing, Inc.) (“Deep Green”, the “Company”, “we”, “us”, or “our”) is a publicly quoted company seeking to create value for its shareholders by seeking to acquire other operating entities for growth in return for shares of our common stock.
The Company was organized as a Nevada Corporation on August 24, 1995 under the name of Evader, Inc. On May 25, 2012, the Company filed its Foreign Profit Corporation Articles of Domestication to change the domicile of the Company from Nevada to Wyoming. On November 4, 2015, the Company filed an Amendment to its Articles of Incorporation to change the name of the Company to Critical Clothing, Inc. and on August 28, 2017 an Amendment was filed to change the Company name to Deep Green Waste & Recycling, Inc.
On August 24, 2017, the Company entered into an Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations (the “Agreement”) with St. James Capital Management, LLC. Under the terms of the Agreement, St. James Capital Management, LLC transferred and assigned all of the assets of the Company related to its extreme sports apparel design and manufacturing business in exchange for the assumption of certain liabilities and cancellation of 3,000,000 shares (as adjusted for the September 27, 2017 reverse stock split of 1 share for 1000 shares) of common stock of the Company.
On August 24, 2017, the Company acquired all the membership units of Deep Green Waste and Recycling, LLC (“DGWR LLC”), a Georgia limited liability company engaged in the waste recycling business since 2011, in exchange for 85,000,000 shares (as adjusted for the September 27, 2017 reverse stock split of 1 share for 1000 shares) of the Company’s common stock. The transaction was accounted for as a “reverse merger” where DGWR LLC was considered the accounting acquiror and the Company was considered the accounting acquiree.
Effective October 1, 2017, Deep Green acquired Compaction and Recycling Equipment, Inc. (CARE), a Portland, Oregon based company that sells and services waste and recycling equipment. Deep Green purchased 100% of the common stock for $902,700. $586,890 was paid in cash at closing and a promissory note was executed in the amount of $315,810.
Effective October 1, 2017, Deep Green acquired Columbia Financial Services, Inc, (CFSI), a Portland, Oregon based company that finances the purchases of waste and recycling equipment. Deep Green purchased 100% of the common stock for $597,300. $418,110 was paid in cash at closing and a promissory note was executed in the amount of $179,190.
On August 7, 2018, the Company entered into an Agreement of Conveyance, Transfer and Assignment of Subsidiaries and Assumption of Obligations (the “Agreement”) with Mirabile Corporate Holdings, Inc. Under the terms of the Agreement, the Company transferred all capital stock of its two wholly owned subsidiaries, Compaction and Recycling Equipment, Inc. and Columbia Financial Services, Inc., to Mirabile Corporate Holdings, Inc. in exchange for the assumption and cancellation of certain liabilities. Deep Green’s then Chief Executive Officer owned a 7.5% equity interest in Mirabile Corporate Holdings, Inc.
On August 7, 2018, the Company ceased its waste recycling business.
The Company re-launched its waste and recycling services operation and has begun to re-engage with customers, waste haulers and recycling centers, which are critical elements of its historically successful business model: designing and managing waste programs for commercial and institutional properties for cost savings, ease of operation, and minimal administrative stress for its clients.
| 34 |
Asset Purchase Agreement
On February 8, 2021, the Company, through its wholly owned subsidiary DG Research, Inc. (the “Buyer”), entered into an Asset Purchase Agreement (the “Agreement”) with Amwaste, Inc. (the “Seller”). Under the terms of the Agreement, the Buyer agreed to purchase from the Seller certain assets (the “Assets”) utilized in the Seller’s waste management business located in Glynn County, Georgia. In consideration for the purchase of the Assets, the Buyer paid the seller $160,000 and issued the Seller 2,000,000 shares of the Company’s restricted common stock. The Buyer remitted $50,000 at Closing and issued the Seller a Promissory Note (the “Note”) in the amount of $110,000, which was paid April 9, 2021. The Note was secured by the Assets purchased through the Agreement. The transaction closed on February 11, 2021.
In order to further grow its business, the Company plans to:
| ● | expand its service offerings to provide additional sustainable waste management solutions that further minimize costs based on volume and content of waste streams, and methods of disposal, including landfills, transfer stations and recycling centers; | |
| ● | Acquire profitable waste and recycling services companies with similar or compatible and synergistic business models, that can help the Company achieve these objectives; | |
| ● | Offer innovative recycling services that significantly reduce the disposal of plastics, electronic wastes, food wastes, and hazardous wastes in the commercial property universe; | |
| ● | Establish partnerships with innovative universities, municipalities and companies; and | |
| ● | Attract investment funds who will actively work with the Company to achieve these goals and help the Company grow into a leading waste and recycling services supplier in North America. |
Some potential merger/acquisition candidates have been identified and discussions initiated. These candidates are within the Company’s core business model, serving commercial properties, accretive to cash flow, and geographically favorable. While seeking to identify acquisition candidates, the Company seeks to identify target entities with a similar core business model or a model which naturally integrates with its own, and which are situated in opportunistic geographic locations.
We have unrestricted discretion in seeking and participating in a business opportunity, subject to the availability of such opportunities, economic conditions, and other factors.
The selection of a business opportunity in which to participate is complex and risky. Additionally, we have only limited resources and may find it difficult to locate good opportunities. There can be no assurance that we will be able to identify and acquire any business opportunity which will ultimately prove to be beneficial to us and our shareholders. We will select any potential business opportunity based on our management’s best business judgment.
Our activities are subject to several significant risks, which arise primarily as a result of the fact that we have no specific business and may acquire or participate in a business opportunity based on the decision of management, which potentially could act without the consent, vote, or approval of our shareholders. The risks faced by us are further increased as a result of its lack of resources and our inability to provide a prospective business opportunity with significant capital.
Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements as well as the reported expenses during the reporting periods. The accounting estimates that require our most significant, difficult and subjective judgments have an impact on revenue recognition, the determination of share-based compensation and financial instruments. We evaluate our estimates and judgments on an ongoing basis. Actual results may differ materially from these estimates under different assumptions or conditions.
Our significant accounting policies are more fully described in NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES to our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
| 35 |
Discussion for the three months ended September 30, 2023 and September 30, 2022 (Unaudited):
Results of Operations:
September 30, 2023 | September 30, 2022 | $ Change | ||||||||||
| Gross revenue | $ | 902,987 | $ | 368,512 | $ | 534,475 | ||||||
| Cost of Sales | 157,659 | 130,809 | 26,850 | |||||||||
| Gross Profit | 745,328 | 237,703 | 507,625 | |||||||||
| Operating expenses | 417,577 | 312,209 | 105,368 | |||||||||
| Operating (Loss) | 327,751 | (74,506 | ) | 402,257 | ||||||||
| Other Income (Expense) | (553,841 | ) | 205,453 | (759,294 | ) | |||||||
| Net Income (Loss) | (226,090 | ) | 130,947 | (357,037 | ) | |||||||
| Net loss per share - basic and diluted | $ | (0.026 | ) | $ | 0.000 | $ | (0.026 | ) | ||||
Revenues
For the three months ended September 30, 2023 and 2022, we generated $902,987 and $368,512 revenue, respectively. In August 2023 Lyell began work on a large project located on the Vanderbilt University Medical Campus (VUMC). The $534,475 year-over-year increase is substantially due to this project
Cost of Sales
Our cost of sales were $157,659 and $ 130,809 for the three months ended September 30, 2023 and 2022, respectively. The increase of $26,850 reflects the increase use contracted labor and to some extent an increase of supplies and materials as we started the VUMC project.
Gross Profit
Our gross profit was $745,328 and $ 237,703 for the three months ended September 30, 2023 and 2022, respectively.
Operating expenses
Our operating expenses were $417,577 and $312,209 for the three months ended September 30, 2023 and 2022, respectively. The increase is due to a 2023 $21K non-cash bad debt reserve adjustment and accrued officer salaries.
Operating Loss
Our operating income (loss) was $327,751 and operating loss ($74,506) for the three months ended September 30, 2023 and 2022, respectively
We anticipate that our cost of revenues will increase in 2023 and for the foreseeable future as we continue to build out our waste management services and identify acquisition opportunities in the waste and recycling sector.
Other Income (Expense)
Other expense increased to $553,841 for the three months ended September 30, 2023. This was largely driven by a non-cash derivative valuation adjustment. Other income was $205,453 for the three months ended September 30, 2022 and included interest expense of $213,615 and derivative liability gain of $482,191.
Net Income (Loss) from Operations
The Company’s loss from operations was $226,090 for the three months ended September 30, 2023 compared to an income of $130,947 in for the same period in 2022.
| 36 |
Discussion for the nine months ended September 30, 2023 and September 30, 2022 (Unaudited):
Results of Operations:
September 30, 2023 | September 30, 2022 | $ Change | ||||||||||
| Gross revenue | $ | 1,315,097 | $ | 796,127 | $ | 518,970 | ||||||
| Cost of Sales | 288,930 | 300,512 | (11,582 | ) | ||||||||
| Gross Profit | 1,026,167 | 495,615 | 530,552 | |||||||||
| Operating expenses | 1,887,444 | 1,171,740 | 715,704 | |||||||||
| Operating (Loss) | (861,277 | ) | (676,125 | ) | (185,152 | ) | ||||||
| Other Income (Expense) | (638,402 | ) | (363,915 | ) | -274,487 | |||||||
| Net Income (Loss) | (1,499,679 | ) | (1,040,040 | ) | (459,639 | ) | ||||||
| Net loss per share - basic and diluted | $ | (0.394 | ) | $ | (3.634 | ) | $ | 3.240 | ||||
Revenues
For the nine months ended September 30, 2023 and 2022, we generated $1,315,097 and $796,127 revenue, respectively. The increase is the result of our 3rd quarter start of the Oxford House project on the Vanderbilt University Medical campus.
Cost of Sales
Our cost of sales were $288,930 and $300,512 for the nine months ended September 30, 2023 and 2022, respectively. Cost of sales are lower than projected due to our ability to leverage assets from our other business AMWASTE. Using these assets mean we are less dependent on outside vendors for waste disposal.
Gross Profit
Our gross profit was $1,026,167 and $495,615 for the nine months ended September 30, 2023 and 2022, respectively.
Operating expenses
Our operating expenses were $1,887,444 and $1,171,740 for the nine months ended September 30, 2023 and 2022, respectively. The year-over-year increase is driven by $705,000 of non-cash stock-based compensation.
We anticipate that our cost of revenues will increase in 2023 and for the foreseeable future as we continue to build out our waste management services and identify acquisition opportunities in the waste and recycling sector.
Loss from Operations
The Company’s loss from operations increased to $846,293 for the nine months ended September 30, 2023 from $676,125 in 2022, an increase of $170,168.
Other Income (Expense)
Other income (expense) declined to ($638,402) for the nine months ended September 30, 2023. Other income (expense) was ($363,915) for the nine months ended September 30, 2022. The decline reflects non-cash derivative adjustments that are required by GAAP to properly value the conversion features of certain notes.
Net Loss
For the nine months ended September 30, 2023, our net loss decreased to $1,499,679 from $1,040,040 in 2022, resulting in an decline of $459,639.
| 37 |
Liquidity and Capital Resources
At September 30, 2023, we had current assets of $1,067,679 and current liabilities of $6,166,167 resulting in negative working capital of $5,098,488, of which $3,051,558 was accounts payable and $169,487 was included in accrued interest. At September 30, 2023, we had total assets of $2,056,578 and total liabilities of $6,166,167 resulting in stockholders’ deficit of $4,109,589.
At December 31, 2022, we had current assets of $229,837 and current liabilities of $4,998,447 resulting in negative working capital of $4,768,610, of which $3,090,211 was accounts payable and $95,429 was included in deferred compensation. At December 31, 2022, we had total assets of $1,440,479 and total liabilities of $4,998,447 resulting in stockholders’ deficit of $3,557,968.
Accounts Payable
At September 30, 2023, the Company had accounts payable of $3,051,558 that consisted of $487,615 in default judgments due to prior vendors, $2,338,423 due to vendors for materials and services and $225,301 due for credit card obligations.
At December 31, 2022, the Company had accounts payable of $3,079,480 that consisted of $487,615 in default judgments due to prior vendors, $2,390,290 due to vendors for materials and services and $212,306 due for credit card obligations.
Debt
At September 30, 2023, the Company had outstanding secured notes and convertible notes payable of $1,378,038 as well as secured notes and other loans from officers of $84,082. Please see NOTE G – DEBT for further information.
At December 31, 2022, the Company had outstanding debt of $1,399,069 that consisted of $800,818 of convertible debt, $598,2551 in a short term notes, short-term capital lease and loans payable to officers and directors. Please see NOTE G – DEBT for further information.
Capital Raising
For the three months ended September 30, 2023 and the twelve months ended December 31, 2022, the Company raised $500,000 and $164,498 through the issuance of Convertible Promissory Notes or loans from officers, respectively.
Cash on Hand
Our cash on hand as of September 30, 2023 and December 31, 2022 was $206,679 and $36,619, respectively.
Satisfaction of Outstanding Liabilities
As of September 30, 2023, the Company has a liability of $487,615 as a result of three (3) default judgments. The Company intends to negotiate settlements and establish payment plans with each creditor that will satisfy these judgements. Nonetheless, some or all of the creditors may elect to bring further litigation to protect their claims or perfect their judgments.
The Company accrued customer deposits in the form of advance payments for waste management services that could not be delivered when the Company suspended operations in August 2018. The Company intends to either resume waste management services with those customers or refund the advance payments through a repayment plan.
There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available from external sources such as debt or equity financings or other potential sources to satisfy these outstanding liabilities. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business.
| 38 |
We currently have no external sources of liquidity such as arrangements with credit institutions or off-balance sheet arrangements that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital.
We are dependent on the sale of our securities to fund our operations and will remain so until we generate sufficient revenues to pay for our operating costs. Our officers and directors have made no written commitments with respect to providing a source of liquidity in the form of cash advances, loans and/or financial guarantees.
If we are unable to raise the funds, we will seek alternative financing through means such as borrowings from institutions or private individuals. There can be no assurance that we will be able to raise the capital we need for our operations from the sale of our securities. We have not located any sources for these funds and may not be able to do so in the future. We expect that we will seek additional financing in the future. However, we may not be able to obtain additional capital or generate sufficient revenues to fund our operations. If we are unsuccessful at raising sufficient funds, for whatever reason, to fund our operations, we may be forced to cease operations. If we fail to raise funds, we expect that we will be required to seek protection from creditors under applicable bankruptcy laws.
Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern and believes that our ability is dependent on our ability to implement our business plan, raise capital and generate revenues. Please see NOTE M - GOING CONCERN UNCERTAINTY for further information.
Debt
Our Debt was $631,032 and $598,251 at September 30, 2023 and December 31, 2022, respectively. Included within the Debt was the following at September 30, 2023 In addition, (i) $387,535due under Factor agreement with AEC Yield Capital, LLC and Notice of Default; and (ii) $5,574 due under a short-term capital lease; and (iii) $84,082 as loans payable to officers; and $42,104 due to former owner and (iv) $6,032 in other debt. Please see NOTE G – DEBT for further information.
Convertible Notes
On October 14, 2021, the Company (the “Borrower”) entered into a Note Purchase Agreement (“NPA”) with each of BHP Capital NY Inc. and Quick Capital, LLC (together, the “Investors”) and issued each of the Investors a Secured Convertible Promissory Note (the “Note”) in the amount of Six Hundred Sixty-Six Thousand Six Hundred Sixty-Seven and NO/100 Dollars ($666,667). The Note is convertible, in whole or in part, at any time and from time to time before maturity (October 14, 2022) at the option of the holder at the Fixed Conversion Price that shall be the lesser of: (a) $0.01 or (b) 70% multiplied by the Market Price (as defined herein) (representing a discount rate of 30%) (the “Fixed Conversion Price”). “Market Price” means the average of the two lowest Closing Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTCBB, OTCQB or on the principal securities exchange or other securities market on which the Common Stock is then being quoted or traded. To the extent the Conversion Price of the Borrower’s Common Stock closes below the par value per share, the Borrower will take all steps necessary to solicit the consent of the stockholders to reduce the par value of the Common Stock to the lowest value possible under law. The Borrower agrees to honor all conversions submitted pending this adjustment. If the shares of the Borrower’s Common Stock have not been delivered within three (3) business days to the Holder, the Notice of Conversion may be rescinded by the Holder. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the Holder for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. If at any time the Conversion Price as determined hereunder for any conversion would be less than the par value of the Common Stock, then at the sole discretion of the Holder, the Conversion Price hereunder may equal such par value for such conversion and the Conversion Amount for such conversion may be increased to include Additional Principal, where “Additional Principal” means such additional amount to be added to the Conversion Amount to the extent necessary to cause the number of conversion shares issuable upon such conversion to equal the same number of conversion shares as would have been issued had the Conversion Price not been adjusted by the Holder to the par value price. The Note has a term of one (1) year and bears interest at 10% annually. As part and parcel of the foregoing transaction, each of the Investors was issued 1,533 shares of common stock as Commitment shares and a warrant (the “Warrant”) granting the holder the right to purchase up to 44,444 shares of the Company’s common stock at an exercise price of $22.50 for a term of 5-years. The transaction closed on October 19, 2021 As of December 31, 2022, $592,004 principal plus $0 interest were due on the Quick Capital Note.
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On June 4, 2021, the Company issued Quick Capital, LLC (“Quick”) a Convertible Promissory Note (the “Note”) in the amount of One Hundred Fifty Thousand and NO/100 Dollars ($150,000). The Note is convertible, in whole or in part, at any time and from time to time before maturity (June 4, 2022) at the option of the holder at the Conversion Price that shall equal the lesser of: a) $0.01 or b) Sixty Percent (60%) of the lowest Trading Price (defined below) during the Valuation Period (defined below), and the Conversion Amount shall be the amount of principal or interest electively converted in the Conversion Notice. The total number of shares due under any conversion notice (“Notice Shares”) will be equal to the Conversion Amount divided by the Conversion Price. “Trading Price” means, for any security as of any date, any trading price on the OTC Markets, or other applicable trading market (the “OTCBB”) as reported by a reliable reporting service (“Reporting Service”) mutually acceptable to Maker and Holder (i.e. Bloomberg) or, if the OTCBB is not the principal trading market for such security, the price of such security on the principal securities exchange or trading market where such security is listed or traded. The “Valuation Period” shall mean twenty (20) Trading Days, commencing on the first Trading Day following delivery and clearing of the Notice Shares in Holder’s brokerage account, as reported by Holder (“Valuation Start Date”). The Note has a term of one (1) year and bears interest at 10% annually. The Company and Quick also entered into a Registration Rights Agreement (“RRA”) that provided for the Company to file a Registration Statement with the SEC covering the resale of up to 20,000,000 shares underlying the Note and to have filed such Registration Statement within 30 days of the RRA. In the event that the Company doesn’t maintain the registration requirements provided for in the RRA, the Company is obligated to pay Quick certain payments for such failures. The transaction closed on June 8, 2021. Please see NOTE H – CONVERTIBLE NOTES PAYABLE for further information.
On June 4, 2021, the Company issued GPL Ventures, LLC (“GPL”) a Convertible Promissory Note (the “Note”) in the amount of One Hundred Fifty Thousand and NO/100 Dollars ($150,000). The Note is convertible, in whole or in part, at any time and from time to time before maturity (June 4, 2022) at the option of the holder at the Conversion Price that shall equal the lesser of: a) $0.01 or b) Sixty Percent (60%) of the lowest Trading Price (defined below) during the Valuation Period (defined below), and the Conversion Amount shall be the amount of principal or interest electively converted in the Conversion Notice. The total number of shares due under any conversion notice (“Notice Shares”) will be equal to the Conversion Amount divided by the Conversion Price. “Trading Price” means, for any security as of any date, any trading price on the OTC Markets, or other applicable trading market (the “OTCBB”) as reported by a reliable reporting service (“Reporting Service”) mutually acceptable to Maker and Holder (i.e. Bloomberg) or, if the OTCBB is not the principal trading market for such security, the price of such security on the principal securities exchange or trading market where such security is listed or traded. The “Valuation Period” shall mean twenty (20) Trading Days, commencing on the first Trading Day following delivery and clearing of the Notice Shares in Holder’s brokerage account, as reported by Holder (“Valuation Start Date”). The Note has a term of one (1) year and bears interest at 10% annually. The Company and GPL also entered into a Registration Rights Agreement (“RRA”) that provided for the Company to file a Registration Statement with the SEC covering the resale of up to 20,000,000 shares underlying the Note and to have filed such Registration Statement within 30 days of the RRA. In the event that the Company doesn’t maintain the registration requirements provided for in the RRA, the Company is obligated to pay GPL certain payments for such failures. The transaction closed on June 8, 2021. Please see NOTE H – CONVERTIBLE NOTES PAYABLE for further information.
On March 2, 2021, the Company issued GPL Ventures, LLC (“GPL”) a Convertible Promissory Note (the “Note”) in the amount of Fifty Thousand and NO/100 Dollars ($50,000). The Note is convertible, in whole or in part, at any time and from time to time before maturity (March 2, 2022) at the option of the holder at the Conversion Price that shall equal the lesser of: a) $0.01 or b) Sixty Percent (60%) of the lowest Trading Price (defined below) during the Valuation Period (defined below), and the Conversion Amount shall be the amount of principal or interest electively converted in the Conversion Notice. The total number of shares due under any conversion notice (“Notice Shares”) will be equal to the Conversion Amount divided by the Conversion Price. “Trading Price” means, for any security as of any date, any trading price on the OTC Markets, or other applicable trading market (the “OTCBB”) as reported by a reliable reporting service (“Reporting Service”) mutually acceptable to Maker and Holder (i.e. Bloomberg) or, if the OTCBB is not the principal trading market for such security, the price of such security on the principal securities exchange or trading market where such security is listed or traded. The “Valuation Period” shall mean twenty (20) Trading Days, commencing on the first Trading Day following delivery and clearing of the Notice Shares in Holder’s brokerage account, as reported by Holder (“Valuation Start Date”). The Note has a term of one (1) year and bears interest at 10% annually. The Company and GPL also entered into a Registration Rights Agreement (“RRA”) that provided for the Company to file a Registration Statement with the SEC covering the resale of up to 10,000,000 shares underlying the Note and to have filed such Registration Statement within 30 days of the RRA. In the event that the Company doesn’t maintain the registration requirements provided for in the RRA, the Company is obligated to pay GPL certain payments for such failures. The transaction closed on March 9, 2021. Please see NOTE H – CONVERTIBLE NOTES PAYABLE for further information.
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On February 5, 2021, the Company issued GPL Ventures, LLC (“GPL”) a Convertible Promissory Note (the “Note”) in the amount of Seventy-Five Thousand and NO/100 Dollars ($75,000). The Note is convertible, in whole or in part, at any time and from time to time before maturity (February 5, 2022) at the option of the holder at the Conversion Price that shall equal the lesser of: a) $0.01 or b) Sixty Percent (60%) of the lowest Trading Price (defined below) during the Valuation Period (defined below), and the Conversion Amount shall be the amount of principal or interest electively converted in the Conversion Notice. The total number of shares due under any conversion notice (“Notice Shares”) will be equal to the Conversion Amount divided by the Conversion Price. “Trading Price” means, for any security as of any date, any trading price on the OTC Markets, or other applicable trading market (the “OTCBB”) as reported by a reliable reporting service (“Reporting Service”) mutually acceptable to Maker and Holder (i.e. Bloomberg) or, if the OTCBB is not the principal trading market for such security, the price of such security on the principal securities exchange or trading market where such security is listed or traded. The “Valuation Period” shall mean twenty (20) Trading Days, commencing on the first Trading Day following delivery and clearing of the Notice Shares in Holder’s brokerage account, as reported by Holder (“Valuation Start Date”). The Note has a term of one (1) year and bears interest at 10% annually. The Company and GPL also entered into a Registration Rights Agreement (“RRA”) that provided for the Company to file a Registration Statement with the SEC covering the resale of up to 10,000,000 shares underlying the Note and to have filed such Registration Statement within 30 days of the RRA. In the event that the Company doesn’t maintain the registration requirements provided for in the RRA, the Company is obligated to pay GPL certain payments for such failures. Please see NOTE H – CONVERTIBLE NOTES PAYABLE for further information.
Cash Flows
We had net cash used in operating activities for the nine months ended September 30, 2023 and 2022 of $423,503 and $ 216,317, respectively.
We had net cash provided in investing activities for the nine months ended September 30, 2023 and 2022 of $0 and $0, respectively.
We had net cash provided by financing activities for the nine months ended September 30, 2023 and 2022 of $593,576 and $180,664, respectively.
Required Capital Over the Next Twelve Months
We expect to incur losses from operations for the near future. We believe we will have to raise an additional $1,000,000 to expand our operations over the next twelve months, including roughly $50,000 to remain current in our filings with the SEC. The additional funds will be utilized for hiring ancillary staff and key personnel, corporate website and SEO development, acquisition(s) in the waste and recycling management sector and day-to-day operations.
Future financing may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, existing holders of our securities may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our securities.
If additional financing is not available or is not available on acceptable terms, we may be required to delay or alter our business plan based on available financing.
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Critical Accounting Policies and Estimates
The SEC issued Financial Reporting Release No. 60, “Cautionary Advice Regarding Disclosure About Critical Accounting Policies” suggesting that companies provide additional disclosure and commentary on their most critical accounting policies. In Financial Reporting Release No. 60, the SEC has defined the most critical accounting policies as the ones that are most important to the portrayal of a company’s financial condition and operating results and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, we have identified the following significant policies as critical to the understanding of our financial statements. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make a variety of estimates and assumptions that affect (i) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and (ii) the reported amounts of revenues and expenses during the reporting periods covered by the financial statements. Our management expects to make judgments and estimates about the effect of matters that are inherently uncertain. As the number of variables and assumptions affecting the future resolution of the uncertainties increase, these judgments become even more subjective and complex. Although we believe that our estimates and assumptions are reasonable, actual results may differ significantly from these estimates. Changes in estimates and assumptions based upon actual results may have a material impact on our results.
Off-Balance Sheet Arrangements
We did not have, during the periods presented, and we do not currently have, any relationships with any organizations or financial partnerships, such as structured finance or special purpose entities, that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company has adopted and maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the reports filed under the Exchange Act, such as this Form 10-Q, is collected, recorded, processed, summarized and reported within the time periods specified in the rules of the Securities and Exchange Commission. The Company’s disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management to allow timely decisions regarding required disclosure. As required under Exchange Act Rule 13a-15, the Company’s management, including the Principal Executive Officer and Principal Financial Officer, has conducted an evaluation of the effectiveness of disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Company’s President concluded that the Company’s disclosure controls and procedures are not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s President, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
During the quarter ended September 30, 2023, there was no change in internal control over financial reporting that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.
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PART II
ITEM 1. LEGAL PROCEEDINGS
We know of no pending proceedings to which any director, member of senior management, or affiliate is either a party adverse to us or has a material interest adverse to us.
| ● | None of our executive officers or directors have (i) been involved in any bankruptcy proceedings within the last five years, (ii) been convicted in or has pending any criminal proceedings (other than traffic violations and other minor offenses), (iii) been subject to any order, judgment or decree enjoining, barring, suspending or otherwise limiting involvement in any type of business, securities or banking activity or (iv) been found to have violated any Federal, state or provincial securities or commodities law and such finding has not been reversed, suspended or vacated. |
ITEM 1A. RISK FACTORS
Not applicable to smaller reporting companies.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Recent Sales of Unregistered Securities; Uses of Proceeds from Registered Securities
In connection with the foregoing, the Company relied upon the exemptions from registration provided by Rule 701 and Section 4(a)(2) under the Securities Exchange Act of 1933, as amended:
For the nine months ended September 30, 2023 and fiscal year ended December 31, 2022, the Company issued and/or sold the following unregistered securities:
Common Stock
For the nine months ended September 30, 2023
On January 4, 2023, the Company issued a noteholder 57,270 shares of common stock in satisfaction of $13,530 principal. The $20,832 excess of the $34,362 fair value of the 57,270 shares over the $13,530 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2023.
On January 23, 2023, the Company issued a noteholder 59,048 shares of common stock in satisfaction of $15,500 principal. The $11,071 excess of the $26,571 fair value of the 59,048 shares over the $15,500 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2023.
On June 20, 2023, the Company effectuated a 1 for 1,500 shares reverse split which reduced the issued and outstanding shares of common stock from 1,896,216,952 shares to 1,264,165 shares. The accompanying financial statements have been retroactively restated to reflect this reverse split stock.
On June 20, 2023, the Company issued a total of 7,270,000 shares of common stock (6,000,000 were issued to the three officers of the Company, 1,270,000 to five key employees of the Company) for services rendered. The $854,225 fair value of the 7,270,000 common shares was charged to operating expenses in the three months ended June 30, 2023.
On June 20, 2023, 280,000 shares of common stock were issued to a consultant for work previously performed. The $22,900 excess of the $32,900 fair value of the 280,000 shares over the $10,000 liability reduction was charged to loss on conversion of debt in the three months ended June 30, 2023.
Preferred Stock
For the nine months ended September 30, 2023
None
For the year ended December 31, 2022
None.
Use of Proceeds
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
None.
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ITEM 6. EXHIBITS
| 44 |
| 45 |
| 46 |
+ Filed hereby with this Registration Statement.
++ To be filed by subsequent amendment.
XBRL Exhibits will be filed by subsequent amendment.
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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.
Date: November 22, 2023
| DEEP GREEN WASTE & RECYCLING, INC. | ||
| By: | /s/ Lloyd Spencer | |
| Lloyd Spencer | ||
| President | ||
| (Principal Executive Officer) | ||
| 48 |
EXHIBIT 31.1
DEEP GREEN WASTE & RECYCLING, INC.
CERTIFICATION PURSUANT TO RULE 13a-14 OR 15d-14 OF
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Bill Edmonds, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Deep Green Waste & Recycling, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: November 22, 2023 | /s/ Bill Edmonds |
| Bill Edmonds | |
| Chief Executive Officer | |
| (Principal Executive Officer) |
EXHIBIT 31.2
DEEP GREEN WASTE & RECYCLING, INC.
CERTIFICATION PURSUANT TO RULE 13a-14 OR 15d-14 OF
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Bill Edmonds, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Deep Green Waste & Recycling, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: November 22, 2023 | /s/ Bill Edmonds |
| Bill Edmonds | |
| Chief Financial Officer | |
| (Principal Financial Officer) |
EXHIBIT 32.1
DEEP GREEN WASTE & RECYCLING, INC.
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED
PURSUANT TO
SECTION 906 OF THE
SARBANES-OXLEY
ACT OF 2002
In connection with the quarterly report on Form 10-Q for the quarter ended September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), of Deep Green Waste & Recycling, Inc. (the “Company”), each of the undersigned officers of the Company hereby certify, in their capacity as an executive officer of the Company, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of their knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: November 22, 2023 | /s/ Bill Edmonds |
| Bill Edmonds | |
| Chief Executive Officer | |
| (Principal Executive Officer) |
| Date: November 22, 2023 | /s/ Bill Edmonds |
| Bill Edmonds | |
| Chief Financial Officer | |
| (Principal Financial Officer) |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Allowance for doubtful account | $ 26,357 | $ 13,453 |
| Common stock par value | $ 0.0001 | $ 0.0001 |
| Common stock, shares authorized | 3,000,000,000 | 3,000,000,000 |
| Commom stock, shares issued | 8,814,613 | 1,147,827 |
| Commom stock, shares outstanding | 8,814,613 | 1,147,827 |
| Preferred stock, par value | $ 0.0001 | $ 0.0001 |
| Preferred stock, stated value per share | $ 1 | $ 1 |
| Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
| Series B Preferred Stock [Member] | ||
| Preferred stock, shares issued | 52,000 | 52,000 |
| Preferred stock, shares outstanding | 52,000 | 52,000 |
| Convertible Notes Payable [Member] | ||
| Debt discounts | $ 156,250 | $ 12,500 |
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Stock-based compensation | $ 854,225 | $ 175,431 | ||
| Amortization of debt discounts | $ 93,750 | $ 208,344 | 106,250 | 1,060,598 |
| Professional and Consulting Fee [Member] | ||||
| Stock-based compensation | 0 | 0 | 0 | 28,098 |
| Officer and Director [Member] | ||||
| Stock-based compensation | 0 | 748 | 705,000 | 147,333 |
| Selling, General and Administrative Expenses [Member] | ||||
| Stock-based compensation | $ 0 | $ 0 | $ 149,225 | $ 0 |
ORGANIZATION |
9 Months Ended | |||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||
| ORGANIZATION | NOTE A – ORGANIZATION
Deep Green Waste & Recycling, Inc. (“Deep Green”, the “Company”, “we”, “us”, or “our”) is a publicly quoted company seeking to create value for its shareholders by seeking to acquire other operating entities for growth in return for shares of our common stock.
The Company was organized as a Nevada Corporation on August 24, 1995 under the name of Evader, Inc. On May 25, 2012, the Company filed its Foreign Profit Corporation Articles of Domestication to change the domicile of the Company from Nevada to Wyoming. On November 4, 2015, the Company filed an Amendment to its Articles of Incorporation to change the name of the Company to Critical Clothing, Inc. and on August 28, 2017 an Amendment was filed to change the Company name to Deep Green Waste & Recycling, Inc.
On August 24, 2017, the Company entered into an Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations (the “Agreement”) with St. James Capital Management, LLC. Under the terms of the Agreement, the Company transferred and assigned all of the assets of the Company related to its extreme sports apparel design and manufacturing business in exchange for the assumption of certain liabilities and cancellation of shares (as adjusted for the September 27, 2017 reverse stock split of 1 share for 1000 shares and the June 20, 2023 reverse stock split of 1 share for 1,500 shares) of common stock of the Company.
On August 24, 2017, the Company acquired all the membership units of Deep Green Waste and Recycling, LLC (“DGWR LLC”), a Georgia limited liability company engaged in the waste recycling business since 2011, in exchange for shares (as adjusted for the September 27, 2017 reverse stock split of 1 share for 1000 shares and the June 20, 2023 reverse stock split of 1 share for 1,500 shares) of the Company’s common stock. The transaction was accounted for as a “reverse merger” where DGWR LLC was considered the accounting acquiror and the Company was considered the accounting acquiree.
Effective October 1, 2017, Deep Green acquired Compaction and Recycling Equipment, Inc. (CARE), a Portland, Oregon based company that sells and services waste and recycling equipment. Deep Green purchased 100% of the common stock for $902,700. $586,890 was paid in cash at closing and a promissory note was executed in the amount of $315,810.
Effective October 1, 2017, Deep Green acquired Columbia Financial Services, Inc, (CFSI), a Portland, Oregon based company that finances the purchases of waste and recycling equipment. Deep Green purchased 100% of the common stock for $597,300. $418,110 was paid in cash at closing and a promissory note was executed in the amount of $179,190.
On August 7, 2018, the Company entered into an Agreement of Conveyance, Transfer and Assignment of Subsidiaries and Assumption of Obligations (the “Agreement”) with Mirabile Corporate Holdings, Inc. Under the terms of the Agreement, the Company transferred all capital stock of its two wholly owned subsidiaries, Compaction and Recycling Equipment, Inc. and Columbia Financial Services, Inc., to Mirabile Corporate Holdings, Inc. in exchange for the assumption and cancellation of certain liabilities. Deep Green’s then Chief Executive Officer owned a 7.5% equity interest in Mirabile Corporate Holdings, Inc.
In the quarterly period ended March 31, 2021, the Company re-launched its waste and recycling services operation and has begun to re-engage with customers, waste haulers and recycling centers, which are critical elements of its historically successful business model: designing and managing waste programs for commercial and institutional properties for cost savings, ease of operation, and minimal administrative stress for its clients.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE A – ORGANIZATION (continued)
Asset Purchase Agreement
On February 8, 2021, the Company, through its wholly owned subsidiary DG Research, Inc. (the “Buyer”), entered into an Asset Purchase Agreement (the “Agreement”) with Amwaste, Inc. (the “Seller”). Under the terms of the Agreement, the Buyer agreed to purchase from the Seller certain assets (the “Assets”) utilized in the Seller’s waste management business located in Glynn County, Georgia. In consideration for the purchase of the Assets, the Buyer paid the seller $160,000 and issued the Seller shares of the Company’s restricted common stock. The Buyer remitted $50,000 at Closing and issued the Seller a Promissory Note (the “Note”) in the amount of $110,000, which was paid April 9, 2021. The Note was secured by the Assets purchased through the Agreement. The transaction closed on February 11, 2021.
Securities Purchase Agreement
On August 11, 2021, the Company entered into a Securities Purchase Agreement (the “Agreement”) with Jeremy Lyell (the “Shareholder”) and Lyell Environmental Services, Inc. (hereinafter “LES”). On October 19, 2021, the Company closed on the Securities Purchase Agreement (the “Agreement”) with Jeremy Lyell (the “Shareholder”). In consideration for the purchase of all Lyell Environmental Services, Inc. shares from the Shareholder, the Company was to pay the Shareholder (i) $50,000 upon execution of the Agreement that was held in escrow, (ii) $1,300,000 at Closing, and (iii) shares of the Company’s common stock. Under the amended Agreement (the “Amended Agreement”), the Company paid to the Shareholder (i) the $50,000 paid upon execution of the Agreement and that was held in escrow, (ii) $1,000,000 at Closing, and (iii) shares of the Company’s common stock. The Company also issued the Shareholder a Promissory Note (the “Promissory Note”) in the amount of $186,537.92. The Promissory Note has a balance of $49,179 at September 30, 2023, bears interest at 7% per annum and was due on December 18, 2021. The transaction closed on October 19, 2021. LES provides asbestos removal and other remediation services to customers.
In order to further grow its business, the Company plans to:
Some potential merger/acquisition candidates have been identified and discussions initiated. These candidates are within the Company’s core business model, serving commercial properties, accretive to cash flow, and geographically favorable. While seeking to identify acquisition candidates, the Company seeks to identify target entities with a similar core business model or a model which naturally integrates with its own, and which are situated in opportunistic geographic locations.
We have unrestricted discretion in seeking and participating in a business opportunity, subject to the availability of such opportunities, economic conditions, and other factors.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE A – ORGANIZATION (continued)
The selection of a business opportunity in which to participate is complex and risky. Additionally, we have only limited resources and may find it difficult to locate good opportunities. There can be no assurance that we will be able to identify and acquire any business opportunity which will ultimately prove to be beneficial to us and our shareholders. We will select any potential business opportunity based on our management’s best business judgment.
Our activities are subject to several significant risks, which arise primarily as a result of the fact that we have limited current business and may acquire or participate in a business opportunity based on the decision of management, which potentially could act without the consent, vote, or approval of our shareholders. The risks faced by us are further increased as a result of our lack of resources and our inability to provide a prospective business opportunity with significant capital.
Reverse Stock Split
On June 20, 2023, the Company effectuated a 1 for 1,500 shares reverse stock split which reduced the issued and outstanding shares of common stock from shares to shares. The accompanying financial statements have been retroactively restated to reflect this reverse split stock.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Summary of Significant Accounting Policies
This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States and have been consistently applied in the preparation of the financial statements.
Interim Financial Statements
The unaudited condensed financial statements of the Company for the three and nine month periods ended September 30, 2023 and 2022 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2022 was derived from the audited financial statements included in the Company’s financial statements as of and for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on May 15, 2023. These financial statements should be read in conjunction with that report.
Principles of Consolidation
The consolidated financial statements include the accounts of Deep Green Waste & Recycling, Inc. (“Deep Green”) and Deep Green’s wholly owned subsidiaries, DG Research, Inc., DG Treasury, Inc. and Lyell Environmental Services Inc. All inter-company balances and transactions have been eliminated in consolidation.
Cash Equivalents
Investments having an original maturity of 90 days or less that are readily convertible into cash are considered to be cash equivalents. For the periods presented, the Company had no cash equivalents.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Taxes
In accordance with Accounting Standards Codification (ASC) 740 - Income Taxes, the provision for income taxes is computed using the asset and liability method. The asset and liability method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements. The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is not more likely than not that a deferred tax asset will be realized.
We expect to recognize the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a “more-likely-than-not” threshold, the amount to be recognized in the financial statements will be the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of September 30, 2023 and December 31, 2022, we had no uncertain tax positions. We recognize interest and penalties, if any, related to uncertain tax positions as general and administrative expenses. We currently have no federal or state tax examinations nor have we had any federal or state examinations since our inception. To date, we have not incurred any interest or tax penalties.
Financial Instruments and Fair Value of Financial Instruments
We adopted ASC Topic 820, Fair Value Measurements and Disclosures, for assets and liabilities measured at fair value on a recurring basis. ASC Topic 820 establishes a common definition for fair value to be applied to existing US GAAP that requires the use of fair value measurements that establishes a framework for measuring fair value and expands disclosure about such fair value measurements.
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC Topic 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. Except for the derivative liability (see NOTE H), where Level 2 inputs were used, we had no financial assets or liabilities carried and measured at fair value on a recurring or nonrecurring basis during the periods presented.
For nonrecurring fair value measurements of issuances of common stock for services and in satisfaction of convertible notes payable and accrued interest (see NOTE I), we used Level 2 inputs.
Derivative Liabilities
We evaluate convertible notes payable, stock options, stock warrants and other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, Derivative Instruments and Hedging: Contracts in Entity’s Own Equity.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date.
Impairment of Long-Lived Assets
The Company’s long-lived assets (consisting primarily of property, equipment and intangible assets) are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future net cash flows expected to be generated by that asset. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Through September 30, 2023, the Company has not experienced impairment losses on its long-lived assets.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation and amortization. Routine maintenance and repairs and minor replacement costs are charged to expense as incurred, while expenditures that extend the life of these assets are capitalized. Depreciation and amortization are provided for in amounts sufficient to write off the cost of depreciable assets to operations over their estimated service lives. The Company uses the straight-line method of depreciation for both financial reporting and tax purposes. Upon the sale or retirement of property and equipment, the cost and related accumulated depreciation and amortization will be removed from the accounts and the resulting profit or loss will be reflected in the statement of operations. The estimated lives used to determine depreciation and amortization are:
Goodwill
Goodwill relates to the acquisition of Lyell Environmental Services, Inc. on October 19, 2021.
We test indefinite-lived intangibles and goodwill for impairment on an annual basis in the fourth quarter of our fiscal year, or more frequently if events or changes in circumstances indicate that the carrying value might be impaired. We have the option to first assess qualitative factors in order to determine if it is more likely than not that the fair value of our intangible assets or reporting units are greater than their carrying value. If the qualitative assessment leads to a determination that the intangible asset/ reporting unit’s fair value may be less than its carrying value, or if we elect to bypass the qualitative assessment altogether, we are required to perform a quantitative impairment test by calculating the fair value of the intangible asset/reporting unit and comparing the fair value with its associated carrying value. The estimated fair value of our reporting units is determined based upon the income approach using discounted future cash flows. In situations where the fair value is less than the carrying value, an impairment charge would be recorded for the shortfall.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Amortizable Intangible Assets
Amortizable intangible assets consist of the customer lists and covenants not to compete acquired in connection with the Amwaste Asset Purchase Agreement on February 11, 2021 and the Lyell Environmental Services, Inc. acquisition on October 19, 2021.
We test amortizable intangible assets for impairment if events or changes in circumstances indicate that the assets might be impaired. These intangible assets are amortized on a straight-line basis over their estimated useful lives of 5 years. We established the fair value of these amortizable intangible assets based on the income approach using discounted future cash flows.
Equity Instruments Issued to Non-Employees for Acquiring Goods or Services
Issuances of our common stock or warrants for acquiring goods or services are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn the equity instruments is reached (a “performance commitment” which would include a penalty considered to be of a magnitude that is a sufficiently large disincentive for nonperformance) or (ii) the date at which performance is complete.
Although situations may arise in which counter performance may be required over a period of time, the equity award granted to the party performing the service may be fully vested and non-forfeitable on the date of the agreement. As a result, in this situation in which vesting periods do not exist if the instruments are fully vested on the date of agreement, we determine such date to be the measurement date and will record the estimated fair market value of the instruments granted as a prepaid expense and amortize such amount to expense over the contract period. When it is appropriate for us to recognize the cost of a transaction during financial reporting periods prior to the measurement date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values.
Stock-Based Compensation
We account for share-based awards to employees in accordance with ASC 718 “Stock Compensation”. Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method. Share-based awards to non-employees are accounted for in accordance with ASC 505-50 “Equity”, wherein such awards are expensed over the period in which the related services are rendered.
Related Parties
A party is considered to be related to us if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with us. Related parties also include our principal owners, our management, members of the immediate families of our principal owners and our management and other parties with which we may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties, or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests, is also a related party.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue Recognition
Revenue is recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) the price is fixed or determinable, (3) collectability is reasonably assured, and (4) delivery has occurred.
Advertising Costs
Advertising costs, which were not significant for the periods presented, are expensed as incurred.
We compute net loss per share in accordance with FASB ASC 260. The ASC specifies the computation, presentation and disclosure requirements for loss per share for entities with publicly held common stock.
Basic loss per share amounts are computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed on the basis of the weighted average number of common shares and dilutive securities (such as stock options, warrants and convertible securities) outstanding. Dilutive securities having an anti-dilutive effect on diluted net loss per share are excluded from the calculation.
For the periods presented, we have excluded the shares issuable from the convertible notes payable (see NOTE G) and the warrants (see NOTE I) from our diluted net loss per share calculation as the effect of their inclusion would be anti-dilutive.
Recently Enacted Accounting Standards
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which has superseded nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than was required under prior U.S. GAAP. We adopted ASU 2014-09 effective January 1, 2018. ASU 2014-09 has not had any significant effect on our financial statements for the periods presented.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), to provide guidance on recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements, specifically differentiating between different types of leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from all leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous GAAP. There continues to be a differentiation between finance leases and operating leases. However, the principal difference from previous guidance is that the lease assets and lease liabilities arising from operating leases should be recognized in the balance sheet. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. We adopted ASU 2016-02 effective January 1, 2019. ASU No. 2016-02 has not had any significant effect on our financial statements for the periods presented.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
On July 13, 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) 2017-11. Among other things, ASU 2017-11 provides guidance that eliminates the requirement to consider “down round” features when determining whether certain financial instruments or embedded features are indexed to an entity’s stock and need to be classified as liabilities. ASU 2017-11 provides for entities to recognize the effect of a down round feature only when it is triggered and then as a dividend and a reduction to income available to common stockholders in basic earnings per share. The guidance was effective for annual periods beginning after December 15, 2018; early adoption was permitted.
The Company early adopted ASU 2017-11. As a result, we have not recognized the fair value of the warrants containing down round features as liabilities. Please see NOTE I - CAPITAL STOCK for further information.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.
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PROPERTY AND EQUIPMENT |
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| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PROPERTY AND EQUIPMENT | NOTE C - PROPERTY AND EQUIPMENT
Property and Equipment consist of the following at:
For the nine months ended September 30, 2023 and 2022, depreciation of property and equipment was $31,686 and $34,085, respectively.
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GOODWILL AND INTANGIBLE ASSETS |
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| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GOODWILL AND INTANGIBLE ASSETS | NOTE D – GOODWILL AND INTANGIBLE ASSETS
Goodwill and Intangible assets consist of the following at:
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE D – GOODWILL AND INTANGIBLE ASSETS (continued)
The customer lists and covenants not to compete are being amortized using the straight-line method over their estimated useful lives of five years. For the nine months ended September 30, 2023 and 2022, amortization of intangible assets expense was $188,476 and $184,560, respectively.
At September 30, 2023, the expected future amortization of intangible assets expense is:
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ACCOUNTS PAYABLE |
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| Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ACCOUNTS PAYABLE | NOTE E – ACCOUNTS PAYABLE
Accounts payable consist of the following at:
Most of the accounts payable relate to services performed by subcontractors prior to the cessation of our waste recycling business on August 7, 2018. In many cases, these subcontractors have subsequently reached agreements with our former customers to continue the provision of services to such customers.
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DEBT |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DEBT | NOTE F – DEBT
Debt consists of the following at:
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
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SECURED NOTES AND CONVERTIBLE NOTES PAYABLE |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SECURED NOTES AND CONVERTIBLE NOTES PAYABLE | NOTE G – SECURED NOTES AND CONVERTIBLE NOTES PAYABLE
Secured Notes and Convertible Notes Payable consist of:
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE G – CONVERTIBLE NOTES PAYABLE (continued)
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
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DERIVATIVE LIABILITY |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| DERIVATIVE LIABILITY | NOTE H - DERIVATIVE LIABILITY
The derivative liability at September 30, 2023 and December 31, 2022 consisted of:
The above Convertible Promissory Notes (the “Notes”) contain a variable conversion feature based on the future trading price of the Company’s common stock. Therefore, the number of shares of common stock issuable upon conversion of the Notes is indeterminate. Accordingly, we have recorded the fair value of the embedded conversion feature as a derivative liability at the respective issuance dates of the Notes and charged the applicable amounts to debt discount and the remainder to other expense. The increase (decrease) in the fair value of the derivative liability from the respective issuance date of the Notes to the measurement date is charged (credited) to other expense (income).
On June 16, 2023, as part of an agreement reached with the SEC, BHP Capital agreed to surrender all conversion rights in its currently held convertible notes, surrender for cancellation all unexercised warrants that it acquired in connection with convertible notes, and surrender for cancellation any shares it holds that were acquired by converting notes or exercising related warrants.
The fair value of the derivative liability was measured at the respective issuance date and at September 30, 2023 and December 31, 2022 using the Black Scholes option pricing model. Assumptions used for the calculation of the derivative liability of the Notes at September 30, 2023 were (1) stock price of $ per share, (2) conversion price of $0.01547 per share, (3) term of 30 days, (4) expected volatility of 143% and (5) risk free interest rate of 5.55%. Assumptions used for the calculation of the derivative liability of the Notes at December 31, 2022 were (1) stock price of $ per share, (2) conversion price of $0.2625 per share, (3) term of 30 days, (4) expected volatility of 143% and (5) risk free interest rate of 4.12%.
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CAPITAL STOCK |
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| CAPITAL STOCK | NOTE I - CAPITAL STOCK
Preferred Stock
On July 18, 2010, the Board of Directors unanimously approved the designation of a series of preferred stock to be known as “Series A Convertible Preferred Stock” (hereinafter “Series A”) with a stated par value of $ per share. The designations, powers, preferences and rights, and the qualifications, limitations or restrictions hereof, in respect of the Series A shall be as hereinafter described. The holders of Series A shall not be entitled to receive dividends, nor shall dividends be paid on common stock or any other Series of Preferred Stock while Series A shares are outstanding. The holders of Series A shall be entitled to vote on all matters submitted to a vote of the Shareholders of the Company. The holders of the Series A shall be entitled to one thousand (1,000) votes per one share of Series A held. Upon the availability of a sufficient number of authorized but unissued and unreserved shares of common stock, the holders of any Series A Preferred Stock shall be entitled to convert such shares in to fully paid and non-assessable shares of common stock at the rate of 1000 shares of common stock for each share of Series A. In the event of any liquidation, dissolution or winding up of the Corporation, either voluntarily or involuntarily, after setting apart or paying in full the preferential amounts due the Holders of senior capital stock, if any, the Holders of Series A and parity capital stock, if any, shall be entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Corporation to the Holders of junior capital stock, including Common Stock, an amount equal to $0.125 per share.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE I - CAPITAL STOCK (continued)
At September 30, 2023 and December 31, 2022, there were and shares of Series A issued and outstanding, respectively.
On January 22, 2020, the Board of Directors unanimously approved the designation of a series of preferred stock to be known as “Series B Convertible Preferred Stock” (hereinafter “Series B”) with a par value of $ per share and authorization of shares. The designations, powers, preferences and rights, and the qualifications, limitations or restrictions hereof, in respect of the Series B shall be as hereinafter described.
The holders of the Series B, shall not be entitled to receive dividends, nor shall dividends be paid on common stock or any other Series of Preferred Stock while Series B shares are outstanding. The holders of Series B shall be entitled to vote on all matters submitted to a vote of the Shareholders of the Company. The holders of the Series B shall be entitled to twenty thousand (20,000) votes per one share of Series B held. Upon the availability of a sufficient number of authorized but unissued and unreserved shares of common stock, the holders of any Series B Preferred Stock shall be entitled to convert such shares in to fully paid and non-assessable shares of common stock at the following conversion feature: the Conversion Price for each share of Series B Preferred Stock in effect on any Conversion Date shall be (i) eighty five percent (85%) of the average closing bid price of the Common Stock over the twenty (20) trading days immediately preceding the date of conversion, (ii) but no less than Par Value of the Common Stock. For purposes of determining the closing bid price on any day, reference shall be to the closing bid price for a share of Common Stock on such date on the NASD OTC Bulletin Board, as reported on Bloomberg, L.P. Any conversion shall be for a minimum Stated Value of $500.00 of Series B shares.
If the Corporation shall commence a voluntary case under the U.S. Federal bankruptcy laws or any other applicable bankruptcy, insolvency or similar law, or consent to the entry of an order for relief in an involuntary case under any law or to the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Corporation or of any substantial part of its property, or make an assignment for the benefit of its creditors, or admit in writing its inability to pay its debts generally as they become due, or if a decree or order for relief in respect of the Corporation shall be entered by a court having jurisdiction in the premises in an involuntary case under the U.S. Federal bankruptcy laws or any other applicable bankruptcy, insolvency or similar law resulting in the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Corporation or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and any such decree or order shall be unstayed and in effect for a period of sixty (60) consecutive days and, on account of any such event, the Corporation shall liquidate, dissolve or wind up, or if the Corporation shall otherwise liquidate, dissolve or wind up, including, but not limited to, the sale or transfer of all or substantially all of the Corporation’s assets in one transaction or in a series of related transactions (a “Liquidation Event”), no distribution shall be made to the holders of any shares of capital stock of the Corporation (other than Senior Securities and Pari Passu Securities) upon liquidation, dissolution or winding up unless prior thereto the Holders of shares of Series B Preferred Stock shall have received the Liquidation Preference (equal to the stated value or $ per share) with respect to each share. If, upon the occurrence of a Liquidation Event, the assets and funds available for distribution among the Holders of the Series B Preferred Stock and Holders of Pari Passu Securities shall be insufficient to permit the payment to such holders of the preferential amounts payable thereon, then the entire assets and funds of the Corporation legally available for distribution to the Series B Preferred Stock and the Pari Passu Securities shall be distributed ratably among such shares in proportion to the ratio that the Liquidation Preference payable on each such share bears to the aggregate Liquidation Preference payable on all such shares.
On January 22, 2020, the Company issued shares of Series B Preferred Stock to Bill Edmonds in satisfaction of $25,000 of the Company’s deferred compensation liability to Mr. Edmonds.
On June 3, 2020, the Company issued shares of its Series B Convertible Preferred Stock to Bill Edmonds in satisfaction of $6,000 loans payable to Mr. Edmonds.
On November 30, 2022, the Company issued shares of its Series B Convertible Preferred Stock to Bill Edmonds in satisfaction of $21,000 of a note payable to Bill Edmonds
At September 30, 2023 and December 31, 2022, there were and shares of Series B Preferred Stock issued and outstanding, respectively.
Common Stock
Holders of the Company’s common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Holders of common stock do not have cumulative voting rights. A vote by the holders of a majority of the Company’s outstanding voting shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to the Company’s articles of incorporation.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE I - CAPITAL STOCK (continued)
Holders of the Company’s common stock are entitled to share in all dividends that the board of directors, in its discretion, declares from legally available funds. In the event of a liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock. The Company’s common stock has no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to the Company’s common stock.
On July 11, 2021, the Company’s Board unanimously approved an Amendment to our Articles of Incorporation (the “Authorized Share Amendment”) to increase the number of authorized shares of Common Stock of the Company from to and to increase the number of authorized shares of Preferred Stock of the Company from to with the Board maintaining the discretion of whether or not to implement the increase in authorized shares of Common and Preferred Stock. On July 11, 2021, the Majority Stockholders delivered an executed written consent in lieu of a special meeting (the “Stockholder Consent”) authorizing and approving the Authorized Share Amendment and the increase in authorized shares of Common and Preferred Stock.
On February 10, 2022, the Company’s Board unanimously approved an Amendment to our Articles of Incorporation (the “Authorized Share Amendment”) to increase the number of authorized shares of Common Stock of the Company from to with the Board maintaining the discretion of whether or not to implement the increase in authorized shares of Common Stock. On February 10, 2022, the Majority Stockholders delivered an executed written consent in lieu of a special meeting (the “Stockholder Consent”) authorizing and approving the Authorized Share Amendment and the increase in authorized shares of Common Stock.
On September 17, 2022, the Company’s Board unanimously approved an Amendment to our Articles of Incorporation (the “Authorized Share Amendment”) to increase the number of authorized shares of Common Stock of the Company from to with the Board maintaining the discretion of whether or not to implement the increase in authorized shares of Common Stock. On September 17, 2022, the Majority Stockholders delivered an executed written consent in lieu of a special meeting (the “Stockholder Consent”) authorizing and approving the Authorized Share Amendment and the increase in authorized shares of Common Stock.
Common Stock and Preferred Stock Issuances
For the nine months ended September 30, 2023 and fiscal year ended December 31, 2022, the Company issued and/or sold the following securities:
Common Stock
For the nine months ended September 30, 2023
On January 4, 2023, the Company issued a noteholder shares of common stock in satisfaction of $13,530 principal. The $20,832 excess of the $34,362 fair value of the shares over the $13,530 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2023.
On January 23, 2023, the Company issued a noteholder shares of common stock in satisfaction of $15,500 principal. The $11,071 excess of the $26,571 fair value of the shares over the $15,500 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2023.
On June 20, 2023, the Company effectuated a 1 for 1,500 shares reverse split which reduced the issued and outstanding shares of common stock from shares to shares. The accompanying financial statements have been retroactively restated to reflect this reverse split stock.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE I - CAPITAL STOCK (continued)
On June 20, 2023, the Company issued a total of shares of common stock ( were issued to the three officers of the Company, to five key employees of the Company) for services rendered. The $854,225 fair value of the common shares was charged to operating expenses in the three months ended June 30, 2023.
On June 20, 2023, shares of common stock were issued to a consultant for work previously performed. The $22,900 excess of the $32,900 fair value of the shares over the $10,000 liability reduction was charged to loss on conversion of debt in the three months ended June 30, 2023. 2022
On January 3, 2022, the Company issued a noteholder shares of common stock in satisfaction of $20,000 principal and $12,667 interest. The $24,071 excess of the $56,738 fair value of the shares over the $32,667 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2022
On January 6, 2022, the Company issued a noteholder shares of common stock in satisfaction of $50,794 principal. The $19,048 excess of the $69,841 fair value of the shares over the $50,794 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2022.
On January 10, 2022, the Company issued a noteholder shares of common stock in satisfaction of $30,000 principal. The $14,571 excess of the $44,571 fair value of the shares over the $30,000 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2022.
On January 11, 2022, the Company issued a noteholder shares of common stock in satisfaction of $30,000 principal. The $14,571 excess of the $44,571 fair value of the shares over the $30,000 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2022.
On January 19, 2022, the Company issued shares of common stock under the Company’s 2021 Stock Option Incentive Plan to Bill Edmonds for services rendered on behalf of the Company.
On January 19, 2022, the Company issued shares of common stock under the Company’s 2021 Stock Option Incentive Plan to David Bradford for services rendered on behalf of the Company.
On January 19, 2022, the Company issued shares of common stock under the Company’s 2021 Stock Option Incentive Plan to Lloyd Spencer for services rendered on behalf of the Company.
On January 19, 2022, the Company issued shares of common stock under the Company’s 2021 Stock Option Incentive Plan to an employee as per the terms of his employment agreement.
On January 20, 2022, the Company issued shares of common stock under the Company’s 2021 Stock Option Incentive Plan to Lloyd Spencer as per the terms of his employment agreement.
On January 20, 2022, the Company issued shares of common stock as compensation to a Consultant.
On January 20, 2022, the Company issued a noteholder shares of common stock in satisfaction of $25,571 principal and $12,000 interest. The $15,229 excess of the $52,800 fair value of the shares over the $37,571 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2022.
On January 31, 2022, the Company issued a noteholder shares of common stock in satisfaction of $25,000 principal. The $9,461 excess of the $34,461 fair value of the shares over the $25,000 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2022.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE I - CAPITAL STOCK (continued)
On February 1, 2022, the Company issued a noteholder shares of common stock in satisfaction of $30,000 principal. The $14,788 excess of the $44,788 fair value of the shares over the $30,000 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2022.
On February 2, 2022, the Company issued a noteholder shares of common stock in satisfaction of $30,000 principal. The $10,816 excess of the $40,816 fair value of the shares over the $30,000 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2022.
On February 2, 2022, the Company issued a noteholder shares of common stock in satisfaction of $25,000 principal. The $9,014 excess of the $34,014 fair value of the shares over the $25,000 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2022.
On February 4, 2022, the Company issued a noteholder shares of common stock in satisfaction of $74,429 principal. The $30,404 difference of the $44,025 fair value of the shares over the $74,429 liability reduction was credited to loss on conversion of debt in the three months ended March 31, 2022.
On February 10, 2022, the Company issued a noteholder shares of common stock in satisfaction of $20,000 principal. The $8,406 excess of the $28,406 fair value of the shares over the $20,000 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2022.
On February 23, 2022, the Company issued a noteholder shares of common stock in satisfaction of $30,000 principal. The $17,395 excess of the $47,395 fair value of the shares over the $30,000 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2022. On March 18, 2022, the Company issued a noteholder shares of common stock in satisfaction of $30,000 principal. The $16,639 excess of the $46,639 fair value of the shares over the $30,000 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2022.
On March 21, 2022, the Company issued a noteholder shares of common stock in satisfaction of $20,000 principal. The $11,933 excess of the $31,933 fair value of the shares over the $20,000 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2022.
On March 24, 2022, the Company issued a noteholder shares of common stock in satisfaction of $34,000 principal. The $14,571 excess of the $48,571 fair value of the shares over the $34,000 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2022.
On March 24, 2022, the Company issued a noteholder shares of common stock in satisfaction of $20,000 principal. The $11,086 excess of the $31,086 fair value of the shares over the $20,000 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2022.
On April 18, 2022, the Company issued a noteholder shares of common stock in satisfaction of $20,000 principal. The $19,024 excess of the $39,024 fair value of the shares over the $20,000 liability reduction was charged to loss on conversion of debt in the three months ended June 30, 2022.
On April 19, 2022, the Company issued a noteholder shares of common stock in satisfaction of $34,000 principal. The $30,762 excess of the $64,762 fair value of the shares over the $34,000 liability reduction was charged to loss on conversion of debt in the three months ended June 30, 2022.
On April 25, 2022, the Company issued a noteholder shares of common stock in satisfaction of $20,000 principal. The $10,839 excess of the $30,839 fair value of the shares over the $20,000 liability reduction was charged to loss on conversion of debt in the three months ended June 30, 2022.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE I - CAPITAL STOCK (continued)
On April 27, 2022, the Company issued a consultant shares of common stock for services rendered. The $13,446 fair value of the shares was charged to professional and consulting fees in the three months ended June 30, 2022.
On April 28, 2022, the Company issued a noteholder shares of common stock in satisfaction of $24,400 principal. The $9,904 excess of the $34,304 fair value of the shares over the $24,400 liability reduction was charged to loss on conversion of debt in the three months ended June 30, 2022.
On April 29, 2022, the Company issued a noteholder shares of common stock in satisfaction of $13,020 principal. The $6,180 excess of the $19,200 fair value of the shares over the $13,020 liability reduction was charged to loss on conversion of debt in the three months ended June 30, 2022.
On May 19, 2022, the Company issued a noteholder shares of common stock in satisfaction of $11,101 principal. The $6,445 excess of the $17,546 fair value of the shares over the $11,101 liability reduction was charged to loss on conversion of debt in the three months ended June 30, 2022.
On August 24, 2022, the Company issued a noteholder shares of common stock in satisfaction of $14,000 principal. The $7,714 excess of the $21,714 fair value of the shares over the $14,000 liability reduction was charged to loss on conversion of debt in the three months ended September 30, 2022.
On August 24, 2022, the Company issued a noteholder shares of common stock in satisfaction of $10,000 principal. The $4,286 excess of the $14,286 fair value of the shares over the $10,000 liability reduction was charged to loss on conversion of debt in the three months ended September 30, 2022.
On August 30, 2022, the Company issued a noteholder shares of common stock in satisfaction of $15,000 principal. The $5,737 excess of the $20,737 fair value of the shares over the $15,000 liability reduction was charged to loss on conversion of debt in the three months ended September 30, 2022.
On August 31, 2022, the Company issued a noteholder shares of common stock in satisfaction of $23,000 principal. The $8,797 excess of the $31,797 fair value of the shares over the $23,000 liability reduction was charged to loss on conversion of debt in the three months ended September 30, 2022.
On September 1, 2022, the Company issued a noteholder shares of common stock in satisfaction of $15,000 principal. The $6,429 excess of the $21,429 fair value of the shares over the $15,000 liability reduction was charged to loss on conversion of debt in the three months ended September 30, 2022.
On September 16, 2022, the Company issued a noteholder shares of common stock in satisfaction of $20,000 principal. The $12,000 excess of the $32,000 fair value of the shares over the $20,000 liability reduction was charged to loss on conversion of debt in the three months ended September 30, 2022.
On September 16, 2022, the Company issued a noteholder shares of common stock in satisfaction of $23,000 principal. The $13,800 excess of the $36,800 fair value of the shares over the $23,000 liability reduction was charged to loss on conversion of debt in the three months ended September 30, 2022.
On October 10, 2022, the Company issued a noteholder shares of common stock in satisfaction of $14,000 principal. The $17,429 excess of the $31,429 fair value of the shares over the $14,000 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2022.
On October 11, 2022, the Company issued a noteholder shares of common stock in satisfaction of $15,000 principal. The $10,714 excess of the $25,714 fair value of the shares over the $15,000 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2022.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE I - CAPITAL STOCK (continued)
On October 13, 2022, the Company issued a noteholder shares of common stock in satisfaction of $15,700 principal. The $13,137 excess of the $28,837 fair value of the shares over the $15,700 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2022.
On October 18, 2022, the Company issued a noteholder shares of common stock in satisfaction of $16,267 principal. The $10,291 excess of the $26,558 fair value of the shares over the $16,267 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2022.
On October 19, 2022, the Company issued a noteholder shares of common stock in satisfaction of $17,300 principal. The $7,414 excess of the $24,714 fair value of the shares over the $17,300 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2022.
On October 28, 2022, the Company issued Bill Edmonds shares of common stock in satisfaction of $ of personal loans and other compensation.
On October 28, 2022, the Company issued David Bradford shares of common stock in satisfaction of $ of personal loans and other compensation.
On October 28, 2022, the Company issued Lloyd Spencer shares of common stock in satisfaction of $ of personal loans and other compensation.
On November 21, 2022, the Company issued a noteholder shares of common stock in satisfaction of $22,200 principal. The $37,890 excess of the $60,090 fair value of the shares over the $22,200 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2022.
On November 21, 2022, the Company issued a noteholder shares of common stock in satisfaction of $22,000 principal. The $34,571 excess of the $56,571 fair value of the shares over the $22,000 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2022.
On November 28, 2022, the Company issued a noteholder shares of common stock in satisfaction of $9,081.05 principal. The $2,450 excess of the $11,531 fair value of the shares over the $9,081 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2022.
On December 6, 2022, the Company issued a noteholder shares of common stock in satisfaction of $15,710 principal. The $14,214 excess of the $29,924 fair value of the shares over the $15,710 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2022.
On December 6, 2022, the Company issued a noteholder shares of common stock in satisfaction of $18,600 principal. The $7,971 excess of the $26,571 fair value of the shares over the $18,600 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2022.
On December 19, 2022, the Company issued a noteholder shares of common stock in satisfaction of $17,000 principal. The $7,286 excess of the $24,286 fair value of the shares over the $17,000 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2022.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE I - CAPITAL STOCK (continued)
Preferred Stock
For the nine months ended September 30, 2023
None
For the year ended December 31, 2022
On November 30, 2022, the Company issued shares of its Series B Convertible Preferred Stock to Bill Edmonds in satisfaction of $21,000 loans payable to Mr. Edmonds.
The number of preferred shares authorized with a par value of $ per share at September 30, 2023 and December 31, 2022 was and , respectively. At September 30, 2023 and December 31, 2022, there were and shares of preferred stock issued and outstanding, respectively.
Warrants and options
A summary of warrants and options activity follows:
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE I - CAPITAL STOCK (continued)
The following table summarizes information about warrants outstanding as of September 30, 2023:
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INCOME TAXES |
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| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INCOME TAXES | NOTE J - INCOME TAXES
The provision for (benefit from) income taxes differs from the amount computed by applying the statutory United States federal income tax rate for the periods presented to income (loss) before income taxes. The income tax rate was 21% for the periods presented. The sources of the differences are as follows:
All tax years subsequent to 2019 remain subject to examination by the Internal Revenue Service.
Based on management’s present assessment, the Company has not yet determined it to be more likely than not that a deferred tax asset attributable to the future utilization of the net operating loss carryforward as of September 30, 2023 and December 31, 2022 will be realized. Accordingly, the Company has provided a 100% allowance against the deferred tax asset in the financial statements at September 30, 2023 and December 31, 2022. The Company will continue to review this valuation allowance and make adjustments as appropriate.
The net operating loss carryforward at September 30, 2023 for the years 2003 to 2017 expires in varying amounts from year 2023 to year 2037.
Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
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COMMITMENTS AND CONTINGENCIES |
9 Months Ended |
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Sep. 30, 2023 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| COMMITMENTS AND CONTINGENCIES | NOTE K - COMMITMENTS AND CONTINGENCIES
Occupancy
Corporate Office
Our current office space is located at 260 Edwards Plz Suite 21266, Saint Simons Island, Georgia 31522 pursuant to a month-to-month lease.
Amwaste Operations
In conjunction with the Amwaste Acquisition, the Company acquired two storage yards under month-to-month leases. The first storage yard is located at 4150 Whitlock St., GA 31520 and the monthly rent is $500. The second storage yard is located at 288 North Harrington Street, St. Simons Island, GA 31522 and the monthly rent is $ 100.
Lyell Operations
In conjunction with the Lyell Acquisition, the Company acquired an office under a month-to-month lease that is located at 211 Shady Grove Rd, 1ashville, TN 37214 and the monthly rent is $2,000.
Employment Agreements
On January 1, 2016, Deep Green Waste & Recycling, LLC (the “LLC”) entered into an Employment Agreement (the “Agreement”) with David A. Bradford as Chief Operating Officer. In connection with his appointment, the LLC and Mr. Bradford entered into a written Agreement for an initial five-year term, which provided for the following compensation terms for Mr. Bradford. Pursuant to the Agreement, Mr. Bradford was to receive a base salary of $108,000 per year, subject to increase of not less than 10% per year. The LLC (i) was to remit payment of Eighty-Four Thousand Dollars ($84,000) of the Base Salary; and (ii) was to defer payment of Twenty-Four Thousand Dollars ($24,000) of the Base Salary, in a proportionate basis and allocated over each payment of the Base Salary so remitted (the “Deferred Base Salary”). The Deferred Base Salary shall earn seven percent (7%) simple interest per annum until paid in full. The Executive, in his sole and absolute discretion, shall determine when and how the Deferred Base Salary shall be paid, without limitation; and may also elect to acquire additional ownership interest in the LLC in exchange for all or any portion of the Deferred Base Salary then outstanding, at the lesser of (i) the then-current value of the ownership interest in the Company; or (ii) the price at which ownership interest in the LLC was most recently purchased by any party, including the LLC. Mr. Bradford was eligible for a cash bonus equal to 1.5% of Adjusted EBITDA over $2,000,000 at the end of each respective annual period. As an inducement to the Executive to enter into this Agreement, the LLC granted the Executive an initial three and one-half percent (3.5%) ownership interest in the LLC. In addition, the executive had the right to purchase equity at the most recently traded rate. In 2016, the executive converted $19,947 of deferred compensation to 4.76% members’ equity. On July 17, 2017, Mr. Bradford and the LLC agreed to amend the terms of the Agreement, as follows: (i) upon initiation of its Incentive Stock Plan (ISP), the LLC was to grant the Executive an additional one and one half percent (1.5%) ownership interest in the LLC, with 0.375% granted upon the date of initiation and 0.375% granted on the anniversary date of the ISP for each of the following three years, and (ii) for each year of the Agreement in which the Company’s after-tax profits exceed $2,000,000, the LLC was to pay the Executive a Discretionary Incentive Bonus of no less than one and one-half percent (1.5%) of the LLC’s after-tax profits, as determined by the LLC’s independent certified public accountant(s) in accordance with generally accepted accounting principles. On August 24, 2017, simultaneous with the entry into the Merger Agreement between Deep Green Waste & Recycling, LLC, Critic Clothing, Inc. and Deep Green Acquisition, LLC dated August 24, 2017, Deep Green Waste & Recycling, Inc. (the “Company”) (f/k/a Critic Clothing, Inc.) entered into an Assignment and Assumption Agreement of Mr. Bradford’s Agreement. Effective May 1, 2018, Mr. Bradford agreed to forgo payment of his salary until circumstances allow a resumption. On December 3, 2019, Mr. Bradford submitted his resignation as President, Chief Executive Officer, Secretary and as a member of the Board of Directors of the Company, effectively immediately. Mr. Bradford retained his role as Chief Operating Officer of the Company. Commencing in July of 2020, the Company and Mr. Bradford agreed that the Company will pay Mr. Bradford $3,500 per month until such time as Company finances improve. On December 31, 2020, the Company extended Mr. Bradford’s employment agreement for an additional two-year period. On December 31, 2022, the Company once again extended Mr. Bradford’s employment agreement, this time for a period of three years. For the nine months ended September 30, 2023 and 2022, compensation to Mr. Bradford expensed under the above employment agreement was $31,500 and $31,500, respectively. As of September 30, 2023 and December 31, 2022, accrued compensation due Mr. Bradford was $58,750 and $27,250, respectively. As of September 30, 2023 and December 31, 2022, the deferred compensation balance due Mr. Bradford was $0 and $0, respectively.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE K - COMMITMENTS AND CONTINGENCIES (continued)
On January 1, 2016, Deep Green Waste & Recycling, LLC (the “LLC”) entered into an Employment Agreement (the “Agreement”) with Bill Edmonds as Managing Member, President and Chief Financial Officer. Mr. Edmonds became Chief Executive Officer of the Company in 2011. In connection with his appointment, the LLC and Mr. Edmonds entered into a written Agreement for an initial five-year term, which provided for the following compensation terms for Mr. Edmonds. Pursuant to the Agreement, Mr. Edmonds was to receive a base salary of $200,000 per year, subject to increase of not less than 10% per year. The Company (i) was to remit payment of One Hundred Sixty Thousand Dollars ($160,000) of the Base Salary; and (ii) was to defer payment of Forty Thousand Dollars ($40,000) of the Base Salary, in a proportionate basis and allocated over each payment of the Base Salary so remitted (the “Deferred Base Salary”). The Deferred Base Salary shall earn seven percent (7%) simple interest per annum until paid in full. The Executive, in his sole and absolute discretion, shall determine when and how Deferred Base Salary shall be paid, without limitation; and may also elect to acquire additional ownership interest in the LLC in exchange for all or any portion of the Deferred Base Salary then outstanding, at the lesser of (i) the then-current value of the ownership interest in the LLC; or (ii) the price at which ownership interest in the LLC was most recently purchased by any party, including the LLC. Mr. Edmonds was eligible for a cash bonus equal to 2.5% of Adjusted EBITDA over $2,000,000 at the end of each respective annual period. On July 17, 2017, Mr. Edmonds and the LLC agreed to amend the terms of the Agreement, as follows: (i) upon initiation of its Incentive Stock Plan, the LLC was to grant the Executive an additional two and one-fourth percent (2.25%) ownership interest in the LLC, with 0.5625% granted upon the date of initiation and 0.5625% granted on the anniversary date of the ISP for each of the following three years, and (ii) for each year of the Agreement in which the LLC’s after-tax profits exceed $2,000,000, the LLC was to pay the Executive a Discretionary Incentive Bonus of no less than two and one half percent (2.5%) of the LLC’s after-tax profits, as determined by the LLC’s independent certified public accountant(s) in accordance with generally accepted accounting principles. On August 24, 2017, simultaneous with the entry into the Merger Agreement between Deep Green Waste & Recycling, LLC, Critic Clothing, Inc. and Deep Green Acquisition, LLC dated August 24, 2017, Deep Green Waste & Recycling, Inc. (the “Company”) (f/k/a Critic Clothing, Inc.) entered into an Assignment and Assumption Agreement of Mr. Edmonds’ Agreement. Effective May 1, 2018, Mr. Edmonds agreed to forgo payment of his salary until circumstances allow a resumption. On December 31, 2020, the Company extended Mr. Edmonds’ employment agreement for an additional two-year period. On December 31, 2022, the Company once again extended Mr. Edmonds’ employment agreement, this time for a period of three years. As of September 30, 2023 and December 31, 2022, the deferred compensation balance due Mr. Edmonds was $100,519 and $95,429, respectively. As of September 30, 2023 and December 31, 2022 the accrued board salary balance due Mr. Edmonds was $20,000 and $5,000, respectively. As of September 30, 2023 and December 31, 2022 the accrued officer salary balance due Mr. Edmonds was $31,500 and $0, respectively.
On December 4, 2019, the Company entered into an agreement with Lloyd Spencer as President and Chief Executive Officer. In connection with his appointment, the Company and Mr. Spencer entered into a written employment agreement (the “Employment Agreement”) for an initial three-year term, which provided for the following compensation terms for Mr. Spencer. Pursuant to the Employment Agreement, Mr. Spencer was to receive a base salary of $10,000 per month starting when the corporation receives its first round of equity or debt financing. Mr. Spencer received restricted shares of the Company’s common stock on or before January 31, 2020 as a sign-on bonus. In addition, the Company is to issue to Mr. Spencer restricted shares in the form of stock grants equivalent to shares of the Corporation’s Common Stock over a -year period. Stock Grant shares vested shares each month after the Stock Grant date, December 4, 2019, over a three-year period. The number of shares vested shall be adjusted in the event of subsequent stock splits. Commencing in July of 2020, the Company and Mr. Spencer agreed that the Company will pay Mr. Spencer $3,500 per month until such time as Company finances improve. For the nine months ended September 30, 2023 and 2022, compensation to Mr. Spencer expensed under the employment agreement was $31,500 and $31,500, respectively. As of September 30, 2023 and December 31, 2022, the accrued cash compensation due Mr. Spencer was $42,000 and $10,500, respectively. As of September 30, 2023 and December 31, 2022, the accrued board salary balance due Mr. Spencer was $20,000 and $5,000, respectively. On December 31, 2022 the Company extended Mr. Spencer’s employment agreement for a three-year period.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE K - COMMITMENTS AND CONTINGENCIES (continued)
On March 14, 2022, Lloyd T. Spencer, the Company’s Chief Executive Officer, Secretary and Director, resigned in his position as Chief Executive Officer. Mr. Spencer retained his roles as Secretary and Director. On March 14, 2022, upon the resignation of Mr. Spencer as the Company’s Chief Executive Officer, the Board of Directors appointed Bill Edmonds as its new Chief Executive Officer. Mr. Edmonds retained his prior roles as interim Chief Financial Officer and Chairman of the Board of Directors. On March 14, 2022, the Board of Directors appointed David Bradford to President. Mr. Bradford retained his prior role as Chief Operating Officer.
Director Agreements
On January 9, 2020, the Company and Lloyd Spencer (the “Director”) entered into a Board of Directors Services Agreement whereby the Director shall receive compensation for serving on the Company’s Board of Directors equivalent to Five Thousand and no/100 dollars ($5,000.00) of the Company’s common stock, paid to the Director on the last calendar day of each fiscal quarter as long as Director continues to fulfill his duties and provide the services set forth above. The pricing of the stock to be delivered shall be calculated as: $/(Closing stock price on the last calendar day of the fiscal quarter x 0.8). The Director began receiving compensation for services rendered under this Agreement beginning during the first calendar quarter of 2020. At September 30, 2023, the accrued compensation due Mr. Spencer under this agreement was $20,000.
On January 9, 2020, the Company and Bill Edmonds (the “Director”) entered into a Board of Directors Services Agreement whereby the Director shall receive compensation for serving on the Company’s Board of Directors equivalent to Five Thousand and no/100 dollars ($5,000.00) of the Company’s common stock, paid to the Director on the last calendar day of each fiscal quarter as long as Director continues to fulfill his duties and provide the services set forth above. The pricing of the stock to be delivered shall be calculated as: $/(Closing stock price on the last calendar day of the fiscal quarter x 0.8). The Director began receiving compensation for services rendered under this Agreement beginning during the first calendar quarter of 2020. At September 30, 2023, the accrued compensation due Mr. Edmonds under this agreement was $20,000.
Major Customer
For the nine month period ended September 30, 2023, and full year ended December 31, 2022, one customer accounted for 64% and 19% respectively of the Company’s revenues.
Legal
As indicated in NOTE E – ACCOUNTS PAYABLE, one customer and two vendors have received Default Judgments against Deep Green aggregating $487,615 that remain unpaid by Deep Green. Also, Deep Green has accounts payable to other vendors of materials and services and credit card companies aggregating $2,563,943, which are mostly past due and remain unpaid by Deep Green. Also, Deep Green has not paid any amounts to satisfy the $387,535 claimed by the factor pursuant to the Factor’s Notice of Default dated July 31, 2018.
On January 1, 2023, the Company received notification of a complaint filed in the Supreme Court of the State of New York by Owen May and MD Global. The complaint alleges “breach of contract, conversion, fraud, and securities fraud related to misconduct, failure to perform, theft, and deceit and intentional misrepresentations done with scienter about securities by Deep Green Waste & Recycling and Lloyd T Spencer”. The complaint seeks $350,000.00 in compensatory damages, and $3,500,000.00 in punitive damages. The Company believes the complaint to be wholly without merit and has filed to dismiss the case.
On June 1, 2023 the Company received notification that the Supreme Court of the State of New York dismissed the fraud and conversion claims brought by MD Global, LLC and further ruled that former CEO Lloyd Spencer should not be a party to the case.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
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GOING CONCERN UNCERTAINTY |
9 Months Ended |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| GOING CONCERN UNCERTAINTY | NOTE L - GOING CONCERN UNCERTAINTY
Under ASC 205-40, we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet our future financial obligations as they become due within one year after the date that the financial statements are issued. As required by this standard, our evaluation shall initially not take into consideration the potential mitigating effects of our plans that have not been fully implemented as of the date the financial statements are issued.
In performing the first step of this assessment, we concluded that the following conditions raise substantial doubt about our ability to meet our financial obligations as they become due. We have a history of net losses: As of September 30, 2023, we had cash of $206,679, current assets of $1,067,679, current liabilities of $6,166,167 and an accumulated deficit of $13,871,116. For the nine months ended September 30, 2023 and 2022, we used cash from operating activities of $414,293 and $216,317, respectively. We expect to continue to incur negative cash flows until such time as our operating segments generate sufficient cash inflows to finance our operations and debt service requirements.
In performing the second step of this assessment, we are required to evaluate whether our plans to mitigate the conditions above alleviate the substantial doubt about our ability to meet our obligations as they become due within one year after the date that the financial statements are issued. Our future plans include securing additional funding sources that may include establishing corporate partnerships, establishing licensing revenue agreements, issuing additional convertible debentures and issuing public or private equity securities, including selling common stock through an at-the-market facility (ATM).
There is no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available through external sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material effect on the business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or they will not have a significant dilutive effect on the Company’s existing shareholders. We have therefore concluded there is substantial doubt about our ability to continue as a going concern through November 2024.
The accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying 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 classification of liabilities that may result from our failure to continue as a going concern.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||
| Summary of Significant Accounting Policies | Summary of Significant Accounting Policies
This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States and have been consistently applied in the preparation of the financial statements.
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| Interim Financial Statements | Interim Financial Statements
The unaudited condensed financial statements of the Company for the three and nine month periods ended September 30, 2023 and 2022 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2022 was derived from the audited financial statements included in the Company’s financial statements as of and for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on May 15, 2023. These financial statements should be read in conjunction with that report.
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| Principles of Consolidation | Principles of Consolidation
The consolidated financial statements include the accounts of Deep Green Waste & Recycling, Inc. (“Deep Green”) and Deep Green’s wholly owned subsidiaries, DG Research, Inc., DG Treasury, Inc. and Lyell Environmental Services Inc. All inter-company balances and transactions have been eliminated in consolidation.
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| Cash Equivalents | Cash Equivalents
Investments having an original maturity of 90 days or less that are readily convertible into cash are considered to be cash equivalents. For the periods presented, the Company had no cash equivalents.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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| Income Taxes | Income Taxes
In accordance with Accounting Standards Codification (ASC) 740 - Income Taxes, the provision for income taxes is computed using the asset and liability method. The asset and liability method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements. The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is not more likely than not that a deferred tax asset will be realized.
We expect to recognize the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a “more-likely-than-not” threshold, the amount to be recognized in the financial statements will be the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of September 30, 2023 and December 31, 2022, we had no uncertain tax positions. We recognize interest and penalties, if any, related to uncertain tax positions as general and administrative expenses. We currently have no federal or state tax examinations nor have we had any federal or state examinations since our inception. To date, we have not incurred any interest or tax penalties.
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| Financial Instruments and Fair Value of Financial Instruments | Financial Instruments and Fair Value of Financial Instruments
We adopted ASC Topic 820, Fair Value Measurements and Disclosures, for assets and liabilities measured at fair value on a recurring basis. ASC Topic 820 establishes a common definition for fair value to be applied to existing US GAAP that requires the use of fair value measurements that establishes a framework for measuring fair value and expands disclosure about such fair value measurements.
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC Topic 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. Except for the derivative liability (see NOTE H), where Level 2 inputs were used, we had no financial assets or liabilities carried and measured at fair value on a recurring or nonrecurring basis during the periods presented.
For nonrecurring fair value measurements of issuances of common stock for services and in satisfaction of convertible notes payable and accrued interest (see NOTE I), we used Level 2 inputs.
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| Derivative Liabilities | Derivative Liabilities
We evaluate convertible notes payable, stock options, stock warrants and other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, Derivative Instruments and Hedging: Contracts in Entity’s Own Equity.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date.
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| Impairment of Long-Lived Assets | Impairment of Long-Lived Assets
The Company’s long-lived assets (consisting primarily of property, equipment and intangible assets) are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future net cash flows expected to be generated by that asset. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Through September 30, 2023, the Company has not experienced impairment losses on its long-lived assets.
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| Property and Equipment | Property and Equipment
Property and equipment are stated at cost less accumulated depreciation and amortization. Routine maintenance and repairs and minor replacement costs are charged to expense as incurred, while expenditures that extend the life of these assets are capitalized. Depreciation and amortization are provided for in amounts sufficient to write off the cost of depreciable assets to operations over their estimated service lives. The Company uses the straight-line method of depreciation for both financial reporting and tax purposes. Upon the sale or retirement of property and equipment, the cost and related accumulated depreciation and amortization will be removed from the accounts and the resulting profit or loss will be reflected in the statement of operations. The estimated lives used to determine depreciation and amortization are:
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| Goodwill | Goodwill
Goodwill relates to the acquisition of Lyell Environmental Services, Inc. on October 19, 2021.
We test indefinite-lived intangibles and goodwill for impairment on an annual basis in the fourth quarter of our fiscal year, or more frequently if events or changes in circumstances indicate that the carrying value might be impaired. We have the option to first assess qualitative factors in order to determine if it is more likely than not that the fair value of our intangible assets or reporting units are greater than their carrying value. If the qualitative assessment leads to a determination that the intangible asset/ reporting unit’s fair value may be less than its carrying value, or if we elect to bypass the qualitative assessment altogether, we are required to perform a quantitative impairment test by calculating the fair value of the intangible asset/reporting unit and comparing the fair value with its associated carrying value. The estimated fair value of our reporting units is determined based upon the income approach using discounted future cash flows. In situations where the fair value is less than the carrying value, an impairment charge would be recorded for the shortfall.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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| Amortizable Intangible Assets | Amortizable Intangible Assets
Amortizable intangible assets consist of the customer lists and covenants not to compete acquired in connection with the Amwaste Asset Purchase Agreement on February 11, 2021 and the Lyell Environmental Services, Inc. acquisition on October 19, 2021.
We test amortizable intangible assets for impairment if events or changes in circumstances indicate that the assets might be impaired. These intangible assets are amortized on a straight-line basis over their estimated useful lives of 5 years. We established the fair value of these amortizable intangible assets based on the income approach using discounted future cash flows.
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| Equity Instruments Issued to Non-Employees for Acquiring Goods or Services | Equity Instruments Issued to Non-Employees for Acquiring Goods or Services
Issuances of our common stock or warrants for acquiring goods or services are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn the equity instruments is reached (a “performance commitment” which would include a penalty considered to be of a magnitude that is a sufficiently large disincentive for nonperformance) or (ii) the date at which performance is complete.
Although situations may arise in which counter performance may be required over a period of time, the equity award granted to the party performing the service may be fully vested and non-forfeitable on the date of the agreement. As a result, in this situation in which vesting periods do not exist if the instruments are fully vested on the date of agreement, we determine such date to be the measurement date and will record the estimated fair market value of the instruments granted as a prepaid expense and amortize such amount to expense over the contract period. When it is appropriate for us to recognize the cost of a transaction during financial reporting periods prior to the measurement date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values.
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| Stock-Based Compensation | Stock-Based Compensation
We account for share-based awards to employees in accordance with ASC 718 “Stock Compensation”. Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method. Share-based awards to non-employees are accounted for in accordance with ASC 505-50 “Equity”, wherein such awards are expensed over the period in which the related services are rendered.
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| Related Parties | Related Parties
A party is considered to be related to us if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with us. Related parties also include our principal owners, our management, members of the immediate families of our principal owners and our management and other parties with which we may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties, or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests, is also a related party.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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| Revenue Recognition | Revenue Recognition
Revenue is recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) the price is fixed or determinable, (3) collectability is reasonably assured, and (4) delivery has occurred.
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| Advertising Costs | Advertising Costs
Advertising costs, which were not significant for the periods presented, are expensed as incurred.
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| Loss per Share |
We compute net loss per share in accordance with FASB ASC 260. The ASC specifies the computation, presentation and disclosure requirements for loss per share for entities with publicly held common stock.
Basic loss per share amounts are computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed on the basis of the weighted average number of common shares and dilutive securities (such as stock options, warrants and convertible securities) outstanding. Dilutive securities having an anti-dilutive effect on diluted net loss per share are excluded from the calculation.
For the periods presented, we have excluded the shares issuable from the convertible notes payable (see NOTE G) and the warrants (see NOTE I) from our diluted net loss per share calculation as the effect of their inclusion would be anti-dilutive.
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| Recently Enacted Accounting Standards | Recently Enacted Accounting Standards
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which has superseded nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than was required under prior U.S. GAAP. We adopted ASU 2014-09 effective January 1, 2018. ASU 2014-09 has not had any significant effect on our financial statements for the periods presented.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), to provide guidance on recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements, specifically differentiating between different types of leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from all leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous GAAP. There continues to be a differentiation between finance leases and operating leases. However, the principal difference from previous guidance is that the lease assets and lease liabilities arising from operating leases should be recognized in the balance sheet. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. We adopted ASU 2016-02 effective January 1, 2019. ASU No. 2016-02 has not had any significant effect on our financial statements for the periods presented.
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
On July 13, 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) 2017-11. Among other things, ASU 2017-11 provides guidance that eliminates the requirement to consider “down round” features when determining whether certain financial instruments or embedded features are indexed to an entity’s stock and need to be classified as liabilities. ASU 2017-11 provides for entities to recognize the effect of a down round feature only when it is triggered and then as a dividend and a reduction to income available to common stockholders in basic earnings per share. The guidance was effective for annual periods beginning after December 15, 2018; early adoption was permitted.
The Company early adopted ASU 2017-11. As a result, we have not recognized the fair value of the warrants containing down round features as liabilities. Please see NOTE I - CAPITAL STOCK for further information.
|
|||||||||||||||||||||
| Use of Estimates | Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
9 Months Ended | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||||||||
| SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT |
|
PROPERTY AND EQUIPMENT (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF PROPERTY AND EQUIPMENT | Property and Equipment consist of the following at:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF GOODWILL AND INTANGIBLE ASSETS | Goodwill and Intangible assets consist of the following at:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF FUTURE AMORTIZATION OF INTANGIBLE ASSETS | At September 30, 2023, the expected future amortization of intangible assets expense is:
|
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ACCOUNTS PAYABLE (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF ACCOUNTS PAYABLE | Accounts payable consist of the following at:
|
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DEBT (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF DEBT | Debt consists of the following at:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SECURED NOTES AND CONVERTIBLE NOTES PAYABLE (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF CONVERTIBLE NOTE PAYABLE | Secured Notes and Convertible Notes Payable consist of:
DEEP GREEN WASTE & RECYCLING, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2023 and 2022 (Unaudited)
NOTE G – CONVERTIBLE NOTES PAYABLE (continued)
|
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DERIVATIVE LIABILITY (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF DERIVATIVE LIABILITY | The derivative liability at September 30, 2023 and December 31, 2022 consisted of:
|
|||||||||||||||||||||||||||||||||||||||||||||
CAPITAL STOCK (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMARY OF WARRANTS AND OPTIONS ACTIVITY | A summary of warrants and options activity follows:
|
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| SUMMARY OF WARRANTS AND OUTSTANDING | The following table summarizes information about warrants outstanding as of September 30, 2023:
|
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INCOME TAXES (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF PROVISION FOR (BENEFIT FROM) INCOME TAXES | The provision for (benefit from) income taxes differs from the amount computed by applying the statutory United States federal income tax rate for the periods presented to income (loss) before income taxes. The income tax rate was 21% for the periods presented. The sources of the differences are as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) |
Sep. 30, 2023 |
|---|---|
| Accounting Policies [Abstract] | |
| Intangible assets useful lives | 5 years |
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment, gross | $ 357,445 | $ 370,254 |
| Accumulated depreciation and amortization | (211,598) | (191,141) |
| Property and equipment, net | 145,847 | 179,113 |
| Office Equipment [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment, gross | 54,286 | 47,845 |
| Waste and Recycling Equipment [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment, gross | $ 303,159 | $ 322,409 |
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) |
9 Months Ended | |
|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Property, Plant and Equipment [Abstract] | ||
| Depreciation expenses | $ 31,686 | $ 34,085 |
SCHEDULE OF GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Finite-Lived Intangible Assets [Line Items] | ||
| Goodwill and Intangible assets, gross | $ 1,327,258 | $ 1,327,258 |
| Accumulated amortization | (491,206) | (302,730) |
| Goodwill and Intangible assets, net | 836,052 | 1,024,529 |
| Stock Purchase Agreement [Member] | Lyell Environmental Services Inc [Member] | Goodwill [Member] | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Goodwill and Intangible assets, gross | 134,925 | 134,925 |
| Customer Lists [Member] | Stock Purchase Agreement [Member] | Lyell Environmental Services Inc [Member] | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Goodwill and Intangible assets, gross | 1,083,333 | 1,083,333 |
| Customer Lists [Member] | Asset Purchase Agreement [Member] | Amwaste, Inc. [Member] | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Goodwill and Intangible assets, gross | $ 109,000 | $ 109,000 |
SCHEDULE OF FUTURE AMORTIZATION OF INTANGIBLE ASSETS (Details) |
Sep. 30, 2023
USD ($)
|
|---|---|
| Goodwill and Intangible Assets Disclosure [Abstract] | |
| 2023 (excluding the nine months ended September 30, 2023) | $ 59,617 |
| 2024 | 238,467 |
| 2025 | 238,467 |
| 2026 | 164,576 |
| 2027 | |
| Thereafter | |
| Total | $ 701,127 |
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - USD ($) |
9 Months Ended | |
|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Finite-Lived Intangible Assets [Line Items] | ||
| Intangible assets useful lives | 5 years | |
| Customer Lists [Member] | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Amortization of intangible assets | $ 188,476 | $ 184,560 |
SCHEDULE OF ACCOUNTS PAYABLE (Details) - USD ($) |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Total | $ 3,051,558 | $ 3,090,211 |
| Accounts payable | 3,051,039 | 3,090,211 |
| August 1, 2018 Default Judgment payable to Ohio vendor [Member] | ||
| Total | 32,832 | 32,832 |
| January 14, 2019 Default Judgment payable to Tennessee customer [Member] | ||
| Total | 423,152 | 423,152 |
| January 24, 2019 Default judgment payable to Florida vendor [Member] | ||
| Total | 31,631 | 31,631 |
| Other vendors of materials and services [Member] | ||
| Total | 2,338,642 | 2,390,290 |
| Credit card obligations [Member] | ||
| Total | $ 225,301 | $ 212,306 |
SCHEDULE OF DEBT (Details) - USD ($) |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Short-Term Debt [Line Items] | ||
| Debt | $ 631,032 | $ 598,251 |
| Current portion of debt | (631,032) | (598,251) |
| Long-term portion of debt | ||
| Factor [Member] | ||
| Short-Term Debt [Line Items] | ||
| Debt | 387,535 | 387,535 |
| Short Term Capital Lease [Member] | ||
| Short-Term Debt [Line Items] | ||
| Debt | 5,574 | 5,574 |
| Note Issued [Member] | ||
| Short-Term Debt [Line Items] | ||
| Debt | 49,179 | 49,179 |
| Loans Payable [Member] | ||
| Short-Term Debt [Line Items] | ||
| Debt | 37,548 | 37,547 |
| Sales Tax Payable [Member] | ||
| Short-Term Debt [Line Items] | ||
| Debt | 21,490 | 22,526 |
| Due to Seller of Leyell [Member] | ||
| Short-Term Debt [Line Items] | ||
| Debt | 42,104 | 42,104 |
| Note Payable to Short Term Funding [Member] | ||
| Short-Term Debt [Line Items] | ||
| Debt | 41,067 | 36,725 |
| Note Payable to Officer [Member] | ||
| Short-Term Debt [Line Items] | ||
| Debt | $ 46,535 | $ 17,061 |
SCHEDULE OF DEBT (Parenthetical) (Details) |
Sep. 30, 2023 |
|---|---|
| Loans Payable [Member] | |
| Short-Term Debt [Line Items] | |
| Debt interest rate | 8.00% |
| Note Payable to Officer [Member] | |
| Short-Term Debt [Line Items] | |
| Debt interest rate | 15.00% |
SCHEDULE OF CONVERTIBLE NOTE PAYABLE (Details) - USD ($) |
Jan. 08, 2024 |
Dec. 04, 2023 |
Nov. 06, 2023 |
Oct. 09, 2023 |
Sep. 06, 2023 |
Aug. 14, 2023 |
Jul. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Short-Term Debt [Line Items] | |||||||||||||||||
| Convertible notes payable | $ 784,288 | $ 800,818 | |||||||||||||||
| Total | 1,378,038 | 800,818 | |||||||||||||||
| Lyell Environmental Services Inc [Member] | Note Purchase Agreement [Member] | |||||||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||
| Convertible notes payable | $ 750,000 | ||||||||||||||||
| Debt Instrument, Face Amount | 500,000 | ||||||||||||||||
| Proceeds from Notes Payable | $ 100,000 | $ 150,000 | 250,000 | ||||||||||||||
| Repayments of Notes Payable | $ 750,000 | ||||||||||||||||
| Lyell Environmental Services Inc [Member] | Note Purchase Agreement [Member] | Subsequent Event [Member] | |||||||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||
| Repayments of Notes Payable | $ 250,000 | $ 200,000 | $ 200,000 | $ 100,000 | |||||||||||||
| Unsecured Convertible Promissory Note One [Member] | Quick Capital LLC [Member] | |||||||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||
| Convertible notes payable | [1] | 189,388 | 202,918 | ||||||||||||||
| Unsecured Convertible Promissory Note Two [Member] | BHP Capital NY [Member] | |||||||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||
| Convertible notes payable | [2] | 219,900 | 235,400 | ||||||||||||||
| Unsecured Convertible Promissory Note Three [Member] | BHP Capital NY [Member] | |||||||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||
| Convertible notes payable | [3] | 187,500 | 181,250 | ||||||||||||||
| Unsecured Convertible Promissory Note Four [Member] | Quick Capital LLC [Member] | |||||||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||
| Convertible notes payable | [3] | 187,500 | 181,250 | ||||||||||||||
| Secured Convertible Promissory Note Three [Member] | Quick Capital LLC [Member] | |||||||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||
| Convertible notes payable | [4] | 296,875 | |||||||||||||||
| Secured Convertible Promissory Note Three [Member] | BHP Capital NY [Member] | |||||||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||
| Convertible notes payable | [4] | $ 296,875 | |||||||||||||||
| |||||||||||||||||
SCHEDULE OF DERIVATIVE LIABILITY (Details) - USD ($) |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Short-Term Debt [Line Items] | ||
| Total | $ 548,478 | $ 112,710 |
| Derivative liability | 93,250 | 112,710 |
| Convertible Promissory Note Payable One [Member] | Quick Capital LLC [Member] | ||
| Short-Term Debt [Line Items] | ||
| Total | 548,478 | 52,179 |
| Convertible Promissory Note Payable One [Member] | BHP Capital NY [Member] | ||
| Short-Term Debt [Line Items] | ||
| Total | $ 60,531 |
DERIVATIVE LIABILITY (Details Narrative) |
9 Months Ended | 12 Months Ended |
|---|---|---|
|
Sep. 30, 2023
$ / shares
|
Dec. 31, 2022
$ / shares
|
|
| Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
| Stock price | $ 0.0602 | |
| Conversion price | $ 0.01547 | $ 0.2625 |
| Derivative instrument term | 30 days | 30 days |
| Stock price | $ 0.30 | |
| Measurement Input, Price Volatility [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
| Derivative liability, measurement input | 143 | 143 |
| Measurement Input, Risk Free Interest Rate [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
| Derivative liability, measurement input | 5.55 | 4.12 |
SUMMARY OF WARRANTS AND OPTIONS ACTIVITY (Details) - shares |
3 Months Ended | 12 Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|||||||||
| Equity [Abstract] | |||||||||||||
| Shares Equivalent Options, Balance | |||||||||||||
| Shares Equivalent Warrants, Balance | 44,445 | 88,889 | 88,889 | 88,889 | 53 | ||||||||
| Shares Equivalent Total, Balance | 44,445 | 88,889 | 88,889 | 88,889 | 53 | ||||||||
| Shares Equivalent Warrants expired, Options | |||||||||||||
| Shares Equivalent Warrants expired, Warrants | (20) | ||||||||||||
| Shares Equivalent Warrants expired,Total | (20) | ||||||||||||
| Shares Equivalent Warrants expired, Options | |||||||||||||
| Shares Equivalent Warrants expired, Warrants | (33) | ||||||||||||
| Shares Equivalent Warrants expired,Total | (33) | ||||||||||||
| Shares Equivalent Warrants issued, Options | [1] | [2] | |||||||||||
| Shares Equivalent Warrants issued, Warrants | 44,444 | [1] | 3,333 | [2] | |||||||||
| Shares Equivalent Warrants issued,Total | 44,444 | [1] | 3,333 | [2] | |||||||||
| Shares Equivalent Cashless exercise of warrants, Options | [2] | ||||||||||||
| Shares Equivalent Cashless exercise of warrants, Warrants | [2] | (3,333) | |||||||||||
| Shares Equivalent Cashless exercise of warrants,Total | [2] | (3,333) | |||||||||||
| Shares Equivalent Two warrants issued on October 14, 2021, Options | [3] | ||||||||||||
| Shares Equivalent Two warrants issued on October 14, 2021, Warrants | [3] | 88,889 | |||||||||||
| Shares Equivalent Two warrants issued on October 14, 2021,Total | [3] | 88,889 | |||||||||||
| Shares Equivalent Warrants issued, Options | [1] | [2] | |||||||||||
| Shares Equivalent Warrants issued, Warrants | (44,444) | [1] | (3,333) | [2] | |||||||||
| Shares Equivalent Warrants issued,Total | (44,444) | [1] | (3,333) | [2] | |||||||||
| Shares Equivalent Options, Balance | |||||||||||||
| Shares Equivalent Warrants, Balance | 44,445 | 44,445 | 88,889 | 88,889 | 88,889 | ||||||||
| Shares Equivalent Total, Balance | 44,445 | 44,445 | 88,889 | 88,889 | 88,889 | ||||||||
| |||||||||||||
SUMMARY OF WARRANTS AND OPTIONS ACTIVITY (Details) (Parenthetical) - $ / shares |
3 Months Ended | ||||
|---|---|---|---|---|---|
Jun. 20, 2023 |
Oct. 14, 2021 |
Sep. 21, 2021 |
Jun. 30, 2023 |
Jul. 02, 2021 |
|
| Number of shares issued | 7,270,000 | 7,270,000 | |||
| Labrys Fund LP [Member] | |||||
| Number of right to purchase of shares | 3,333 | ||||
| Exercise price | $ 30.00 | ||||
| Warrant terms | 5 years | ||||
| Number of shares issued | 3,008 | ||||
| BHP Capital NY Inc and Quick Capital LLC [Member] | |||||
| Number of right to purchase of shares | 44,444 | ||||
| Exercise price | $ 22.50 | ||||
| Warrant terms | 5 years | ||||
| Number of shares issued | 1,533 |
SUMMARY OF WARRANTS AND OUTSTANDING (Details) |
Sep. 30, 2023
$ / shares
shares
|
|---|---|
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |
| Number of warrants outstanding | 44,445 |
| Warrant [Member] | |
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |
| Number of warrants outstanding | 44,445 |
| Warrants exercise price | $ / shares | $ 22.50 |
| Expiration date | Oct. 14, 2026 |
CAPITAL STOCK (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 20, 2023 |
Jan. 23, 2023 |
Jan. 04, 2023 |
Dec. 19, 2022 |
Dec. 06, 2022 |
Nov. 28, 2022 |
Nov. 21, 2022 |
Oct. 28, 2022 |
Oct. 19, 2022 |
Oct. 18, 2022 |
Oct. 13, 2022 |
Oct. 11, 2022 |
Oct. 10, 2022 |
Sep. 16, 2022 |
Sep. 01, 2022 |
Aug. 31, 2022 |
Aug. 30, 2022 |
Aug. 24, 2022 |
May 19, 2022 |
Apr. 29, 2022 |
Apr. 28, 2022 |
Apr. 27, 2022 |
Apr. 25, 2022 |
Apr. 19, 2022 |
Apr. 18, 2022 |
Mar. 24, 2022 |
Mar. 21, 2022 |
Mar. 18, 2022 |
Feb. 23, 2022 |
Feb. 10, 2022 |
Feb. 04, 2022 |
Feb. 02, 2022 |
Feb. 01, 2022 |
Jan. 31, 2022 |
Jan. 20, 2022 |
Jan. 19, 2022 |
Jan. 11, 2022 |
Jan. 10, 2022 |
Jan. 06, 2022 |
Jan. 03, 2022 |
Jan. 22, 2020 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2023 |
Dec. 31, 2022 |
Nov. 30, 2022 |
Sep. 17, 2022 |
Feb. 09, 2022 |
Jul. 11, 2021 |
Jul. 10, 2021 |
Jun. 03, 2020 |
Jul. 18, 2010 |
|
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share price | $ 0.30 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred compensation liability | $ 100,519 | $ 95,429 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock authorizied | 3,000,000,000 | 3,000,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued during the period, shares | 7,270,000 | 7,270,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued during period value new issues | $ 854,225 | $ 60,933 | $ 178,763 | $ 205,675 | $ 701,571 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Reverse stock split | 1 for 1,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued | 8,814,613 | 1,147,827 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Professional and Consulting Fee [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued during the period, shares | 2,892 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued during period value new issues | $ 13,446 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued during period shares new issues | 2,892 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Consultant [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued | 1,480 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Maximum [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reverse stock splits common stock shares outstanding | 1,896,216,952 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Minimum [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reverse stock splits common stock shares outstanding | 1,264,165 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock voting rights description | Holders of the Company’s common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock authorizied | 1,000,000,000 | 1,000,000,000 | 3,000,000,000 | 500,000,000 | 500,000,000 | 250,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued during the period, shares | 116,318 | 78,263 | 38,397 | 88,706 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued during period value new issues | $ 11 | $ 8 | $ 4 | $ 9 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued during period shares new issues | 280,000 | 2,892 | 1,480 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock, shares outstanding | 52,000 | 52,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | 2,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Bill Edmonds [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued during the period, shares | 7,333 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued as compensation, shares | 133,333 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued as compensation, value | $ 100,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noteholder [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued during the period, shares | 59,048 | 57,270 | 53,968 | 49,873 | 41,905 | 44,286 | 23,537 | 22,132 | 21,361 | 19,048 | 19,048 | 15,250 | 9,524 | 14,132 | 9,217 | 7,619 | 4.4998 | 4,000 | 7,377 | 6,047 | 10,280 | 6,194 | 9,524 | 5,602 | 8,403 | 6,723 | 4,404 | 5,870 | 5,442 | 5,148 | 4,177 | 5,333 | 3,810 | 3,810 | 6,047 | 3,783 | |||||||||||||||||||
| Debt face amount | $ 15,500 | $ 13,530 | $ 15,710 | $ 9,081.05 | $ 22,200 | $ 17,300 | $ 16,267 | $ 15,700 | $ 15,000 | $ 14,000 | $ 20,000 | $ 15,000 | $ 23,000 | $ 15,000 | $ 14,000 | $ 11,101 | $ 13,020 | $ 24,400 | $ 20,000 | $ 34,000 | $ 20,000 | $ 34,000 | $ 20,000 | $ 30,000 | $ 30,000 | $ 20,000 | $ 74,429 | $ 30,000 | $ 30,000 | $ 25,000 | $ 25,571 | $ 30,000 | $ 30,000 | $ 50,794 | $ 20,000 | ||||||||||||||||||||
| Gain loss on conversion of debt instrument | 11,071 | 20,832 | $ 7,286 | 14,214 | 2,450 | 37,890 | 7,414 | 10,291 | 13,137 | 10,714 | 17,429 | 12,000 | 6,429 | 8,797 | 5,737 | 7,714 | 6,445 | 6,180 | 9,904 | 10,839 | 30,762 | 19,024 | 14,571 | 11,933 | 16,639 | 17,395 | 8,406 | 10,816 | 14,788 | 9,461 | 15,229 | 14,571 | 14,571 | 19,048 | 24,071 | ||||||||||||||||||||
| Stock issued during period value new issues | 26,571 | 34,362 | 24,286 | 29,924 | 11,531 | 60,090 | 24,714 | 26,558 | 28,837 | 25,714 | 31,429 | 32,000 | 21,429 | 31,797 | 20,737 | 21,714 | 17,546 | 19,200 | 34,304 | 30,839 | 64,762 | 39,024 | 48,571 | 31,933 | 46,639 | 47,395 | 28,406 | 44,025 | 40,816 | 44,788 | 34,461 | 52,800 | 44,571 | 44,571 | 69,841 | 56,738 | |||||||||||||||||||
| Liability reduction | $ 15,500 | $ 13,530 | 17,000 | $ 15,710 | $ 9,081 | $ 22,200 | $ 17,300 | $ 16,267 | $ 15,700 | $ 15,000 | $ 14,000 | $ 20,000 | $ 15,000 | $ 23,000 | $ 15,000 | $ 14,000 | $ 11,101 | $ 13,020 | $ 24,400 | $ 20,000 | $ 34,000 | $ 20,000 | $ 34,000 | $ 20,000 | $ 30,000 | $ 30,000 | $ 20,000 | 74,429 | $ 30,000 | $ 30,000 | $ 25,000 | 37,571 | $ 30,000 | $ 30,000 | $ 50,794 | 32,667 | |||||||||||||||||||
| Debt instrument, face amount | $ 17,000 | $ 30,404 | $ 12,667 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest | $ 12,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Officer [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued during the period, shares | 6,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Employees [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued during the period, shares | 1,270,000 | 667 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Consultant [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued during the period, shares | 280,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain loss on conversion of debt instrument | $ 22,900 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued during period value new issues | 32,900 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Liability reduction | $ 10,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| David Bradford [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued during the period, shares | 3,333 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued as compensation, shares | 133,333 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued as compensation, value | $ 100,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lloyd Spencer [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued during the period, shares | 1,360 | 3,333 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued as compensation, shares | 131,829 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued as compensation, value | $ 98,872 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noteholder One [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued during the period, shares | 44,286 | 41,905 | 17,524 | 5,013 | 6,095 | 4,535 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Debt face amount | $ 18,600 | $ 22,000 | $ 23,000 | $ 10,000 | $ 20,000 | $ 25,000 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Gain loss on conversion of debt instrument | 7,971 | 34,571 | 13,800 | 4,286 | 11,086 | 9,014 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued during period value new issues | 26,571 | 56,571 | 36,800 | 14,286 | 31,086 | 34,014 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Liability reduction | $ 18,600 | $ 22,000 | $ 23,000 | $ 10,000 | $ 20,000 | $ 25,000 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Series A Convertible Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock, par value | $ 0.0001 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock voting rights description | The holders of the Series A shall be entitled to one thousand (1,000) votes per one share of Series A held. Upon the availability of a sufficient number of authorized but unissued and unreserved shares of common stock, the holders of any Series A Preferred Stock shall be entitled to convert such shares in to fully paid and non-assessable shares of common stock at the rate of 1000 shares of common stock for each share of Series A. In the event of any liquidation, dissolution or winding up of the Corporation, either voluntarily or involuntarily, after setting apart or paying in full the preferential amounts due the Holders of senior capital stock, if any, the Holders of Series A and parity capital stock, if any, shall be entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Corporation to the Holders of junior capital stock, including Common Stock, an amount equal to $0.125 per share. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series A Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock shares issued | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock, shares outstanding | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series B Convertible Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock, par value | $ 0.0001 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock voting rights description | The holders of the Series B shall be entitled to twenty thousand (20,000) votes per one share of Series B held. Upon the availability of a sufficient number of authorized but unissued and unreserved shares of common stock, the holders of any Series B Preferred Stock shall be entitled to convert such shares in to fully paid and non-assessable shares of common stock at the following conversion feature: the Conversion Price for each share of Series B Preferred Stock in effect on any Conversion Date shall be (i) eighty five percent (85%) of the average closing bid price of the Common Stock over the twenty (20) trading days immediately preceding the date of conversion, (ii) but no less than Par Value of the Common Stock. For purposes of determining the closing bid price on any day, reference shall be to the closing bid price for a share of Common Stock on such date on the NASD OTC Bulletin Board, as reported on Bloomberg, L.P. Any conversion shall be for a minimum Stated Value of $500.00 of Series B shares. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock shares issued | 52,000 | 52,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock, shares outstanding | 52,000 | 52,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock, shares authorized | 100,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share price | $ 1.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series B Convertible Preferred Stock [Member] | Bill Edmonds [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock shares issued | 25,000 | 21,000 | 6,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred compensation liability | $ 25,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans payable | $ 21,000 | $ 6,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE OF PROVISION FOR (BENEFIT FROM) INCOME TAXES (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Income Tax Disclosure [Abstract] | ||||
| Expected tax at 21% | $ (47,479) | $ 27,499 | $ (314,933) | $ (218,408) |
| Non-deductible stock-based compensation | 157 | 179,387 | 36,841 | |
| Non-deductible (non-taxable) derivative liability expense (income) | 95,178 | (101,260) | 91,511 | (230,339) |
| Non-deductible amortization of debt discounts | 43,752 | 2,625 | 222,726 | |
| Non-deductible loss on conversions of notes payable and accrued interest | 12,340 | 11,509 | 60,863 | |
| Increase (decrease) in Valuation allowance | (47,699) | 17,512 | 29,901 | 128,317 |
| Provision for (benefit from) income taxes | ||||
SCHEDULE OF PROVISION FOR (BENEFIT FROM) INCOME TAXES (Details) (Parenthetical) |
9 Months Ended |
|---|---|
Sep. 30, 2023 | |
| Income Tax Disclosure [Abstract] | |
| Expected tax rate | 21.00% |
INCOME TAXES (Details Narrative) |
9 Months Ended | 12 Months Ended |
|---|---|---|
Sep. 30, 2023 |
Dec. 31, 2022 |
|
| Income Tax Disclosure [Abstract] | ||
| Effective income tax perentage | 21.00% | |
| Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | 100.00% | |
| Income tax expiration description | The net operating loss carryforward at September 30, 2023 for the years 2003 to 2017 expires in varying amounts from year 2023 to year 2037. |
GOING CONCERN UNCERTAINTY (Details Narrative) - USD ($) |
9 Months Ended | ||
|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
| Cash | $ 206,679 | $ 36,616 | |
| Current assets | 1,067,679 | 229,837 | |
| Liabilities, current | 6,166,167 | 4,998,447 | |
| Accumulated deficit | 13,871,116 | $ 12,371,437 | |
| Net cash used in operating activities | $ 414,293 | $ 216,317 | |