UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________
FORM
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
OF THE SECURUTIES EXCHANGE ACT OF 1934
For the transition period from _____to ______
Commission File No.
(Exact name of registrant as specified in its charter)
(State of Incorporation) | (I.R.S. Employment Identification No.) |
| |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (
__________________
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, Par Value $0.001 per share
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
¨ YES x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
¨ YES x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
x
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting 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 Ex-change Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
The aggregate market value of the voting stock and non-voting common equity held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter ended June 30, 2021 was $
At May 31, 2022
TABLE OF CONTENTS
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PART I |
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Item 1. | 1 | |
Item 1A. | 3 | |
Item 1B. | 7 | |
Item 2. | 7 | |
Item 3. | 7 | |
Item 4. | 7 | |
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PART II |
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Item 5. | 8 | |
Item 6. | 8 | |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operation | 9 |
Item 7A. | 12 | |
Item 8. | 12 | |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 12 |
Item 9A(T) | 12 | |
Item 9B. | 13 | |
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PART III |
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Item 10. | 14 | |
Item 11. | 15 | |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 16 |
Item 13. | Certain Relationships and Related Transactions, and Director Independence | 16 |
Item 14. | 17 | |
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PART IV |
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Item 15. | 17 | |
| 18 | |
| Certifications |
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ITEM 1. DESCRIPTION OF BUSINESS
Some of the statements contained in this annual report on Form 10-K of Cordia Corporation. (hereinafter the “Company”, “we” or the “Company”) discuss future expectations, contain projections of our plan of operation or financial condition, or state other forward-looking information. In this annual report, forward-looking statements are generally identified by the words such as “anticipate,” “plan,” “believe,” “expect,” “estimate,” and the like. Forward-looking statements involve future risks and uncertainties; some factors could cause actual results or plans to differ materially from those expressed or implied. These statements are subject to known and unknown risks, uncertainties, and other factors that could cause the actual results to differ materially from those contemplated by the statements. The forward-looking information is based on various factors and is derived using numerous assumptions. Whether investing in the Company’s securities or not, a reader should not place undue reliance on these forward-looking statements, which apply only as of the date of this annual report. Important factors that may cause actual results to differ from projections include, for example the success or failure of Management’s efforts to implement the Company’s plan of operation; the ability of the Company to fund its operating expenses; the ability of the Company to compete with other companies that have a similar plan of operation; the effect of changing economic conditions impacting our plan of operation; the ability of the Company to meet the other risks as may be described in future filings with the SEC.
History of Our Company
Cordia Corporation ("Cordia" or the “Company”), formerly CyberOpticLabs, Inc., was organized on June 22, 1988. Between 2001 and late 2010, Cordia Corporation operated as a long-distance provider, VoIP provider, and value-added service provider domestically and internationally. The company ceased operations in 2010.
On July 22, 2019, Churchill Schwartz, LLC, a Wyoming corporation, was appointed the Company’s custodian by the Nevada Eight Judicial District Court, Case No. A-19-794507-B. Peter Klamka is the managing member of Churchill Schwartz, LLC.
On September 26, 2019, the Company filed a certificate of reinstatement with the state of Nevada.
On November 11, 2019, at a shareholder’s meeting, the Company appointed Peter Klamka as its Chief Executive Officer and Chief Financial Officer after a meeting of shareholders.
On February 28, 2020, the Nevada Eight District Judicial Court issued an order discharging the custodian.
The Company has fully impaired all assets since the shutdown of its operations in 2010. and recorded the effects of this impairment as part of its discontinued operations.
Since the custodial proceedings, the Company has entered the hospitality and restaurant industry. It operated a restaurant in Las Vegas, Nevada, from May 2020 until September 30, 2020. Full-service restaurant operations were discontinued due to pandemic-related decline in business.
On July 7, 2021, the Company entered into a Securities Purchase Agreement with Leonite Fund 1 LLC. (“Leonite”), whereby Leonite would advance to the Company a total of $500,000. The Company will issue a convertible note for a total consideration of $568,181.82 with a discount of $68,181.82 given back to Leonite. The convertible note bears interest at the greater of bank prime plus 6% or 12% per annum.
As part of the consideration for the advancing of funds, the Company will issue to Leonite, 50,000 shares of restricted common stock and the issuance of stock warrants for a total of 200,000 shares of restricted common shares at $1.00 per share. These warrants expire on July 7, 2026.
To date the Company has received $250,000 from Leonite which is due July 2022. No common stock has been issued to date.
The company has developed a subscription-based virtual restaurant business since the termination of custodianship. The company will attempt to build out its virtual restaurant business.
1
The company has entered into licensing agreements with Denise Richards, Carmen Electra, and Holly Sonders to use their name, image, likeness, and endorsement of menus.
A virtual restaurant is a food service business that serves customers exclusively by delivery based on phone orders or online food ordering. It is a separate food vendor entity that operates out of an existing restaurant's kitchen. Virtual restaurants can economize by not having a full-service restaurant premise with a storefront and dining room by occupying cheaper real estate.
The company is developing concepts and menus to license to existing restaurants and expects to collect revenues from subscriptions to its menus and concepts and ingredient sales.
The Company intends to generate revenue by selling subscriptions to menus it has developed or are presently developing. Restaurants will pay a monthly subscription fee to carry our celebrity-branded menus. Furthermore, the Company will be entitled to an additional 5% of the gross sales of the Company’s menu items from restaurants that carry the Company’s brands.
Example: Restaurant X pays a monthly fee of $500 per menu to the Company. The Company will also be entitled to 5% of gross sales of that menu. The Company has three separate licensing agreements for each celebrity.
License Agreement #1- Carmen Electra
For the licensing agreement with Carmen Electra, the Company retains 80% of the aggregate of all sales of licensed products sold by or on behalf of Virtual Dining (Gross Receipts) and will pay the remaining 20% of gross receipts to Carmen Electra.
License Agreement #2- Denise Richards
For the licensing agreement with Denise Richards, the Company retains 80% of the aggregate of all sales of licensed products sold by or on behalf of Virtual Dining (Gross Receipts). It will pay the remaining 20% of gross receipts to Denise Richards.
License Agreement #3- Holly Sonders Niederkohr
For the licensing agreement with Holly Sonders Niederkohr, the Company retains 60% of the aggregate of all sales of licensed products sold by or on behalf of Virtual Dining (Gross Receipts) and will pay the remaining 40% of gross receipts to Holly Sonders Niederkohr.
In the aggregate, the Company will retain 80% of gross receipts from their licensing agreement with Carmen Electra, the Company will retain 80% of gross receipts from their licensing agreement with Denise Richards, and the Company will retain 60% of gross receipts from their licensing agreement with Holly Sonders Niederkohr for a period of 36 months from signing.
The company has also developed a nonfungible token called the “Crypto Food Hall.” The company intends to use the tokens to generate interest in its virtual restaurant business and develop new menu themes. The tokens can be purchased on the company-owned site www.cryptofoodhall.com.
Competition
The restaurant industry is highly competitive. We compete with other restaurants on the taste, quality, and price of our food offerings. Additionally, we compete with other restaurants in service, ambiance, location, and overall customer experience. We believe that we compete primarily with local and regional sports bars and quick casual establishments, and to a lesser extent, with quick-service restaurants in general. Many of our competitors are well-established national, regional, or local chains, and many have more significant financial and marketing resources than we do.
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Government Regulation
We are subject to various federal, state, and local laws, rules, and regulations that affect our business. Since March 2020, the COVID-19 pandemic has resulted in frequently revised state and local government regulations affecting our business, which have significantly impacted our restaurant operations and continue to do so. Regulations relating to opening and closing of restaurant dining rooms or outdoor patios, business hours, sanitation practices, to-go alcohol sales, guest spacing within dining rooms and other social distancing practices, and employment and safety-related laws involving contact tracing, exclusions, and paid sick leave have materially affected the way we operate our business have adversely impacted our cost structure and resulting profitability of our restaurants.
Employees
As of December 31, 2021, we had one part-time employee.
Available Information
We maintain a website at the following address: www.cordiakitchens.com. The information on our website is not incorporated by reference in this report. Our financial reports are available on www.sec.gov.
ITEM 1A. RISK FACTORS
This annual report contains forward-looking statements that are based on current expectations, estimates, forecasts and projections about us, our future performance, the market in which we operate, our beliefs and our management’s assumptions. In addition, other written or oral statements that constitute forward-looking statements may be made by us or on our behalf. Words such as “expects”, “anticipates”, “targets”, “goals”, “projects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict or assess. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements.
Any investment in our shares of common stock involves a high degree of risk. You should carefully consider the following information about these risks and the other information in this annual report before you decide to invest in our common stock. Each of the following risks may materially and adversely affect our business objective, plan of operation, and financial condition. These risks may cause the market price of our common stock to decline, which may cause you to lose all or a part of the money you invested in our common stock. We provide the following cautionary discussion of risks, uncertainties, and possibly inaccurate assumptions relevant to our business plan. In addition to other information included in this annual report, the following factors should be considered in evaluating the Company’s business and future prospects.
The Company has a limited operating history and minimal resources.
Since being acquired through custodial proceedings, the Company’s operations have been limited. The Company has had modest experience in the restaurant industry, and management has minimal experience developing virtual restaurants. We generate minimal revenue and cannot be certain we will ever generate sufficient revenue to sustain operations.
There is substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain new financing.
Our financial statements as of December 31, 2021 have been prepared under the assumption that we will continue as a going concern for the next twelve months. Our independent registered public accounting firm included in its opinion for the year ended December 31, 2021 an explanatory paragraph referring to our recurring losses from operations and expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available. Our ability to continue as a going concern is dependent upon our ability to obtain additional equity or debt financing, reduce expenditures and to generate significant revenue. Our financial statements as of December 31, 2021 did not include any adjustments that might result from the outcome of this uncertainty. The reaction of investors to the inclusion of a going concern statement by our auditors, and our potential inability to continue as a going concern,
3
in future years could materially adversely affect our share price and our ability to raise new capital or enter into strategic alliances. Furthermore, we also could be required to seek funds through arrangements with collaborative partners or otherwise that may require us to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us.
Risks related to our celebrity contracts
We are presently in default in our contracts with Carmen Electra and Denise Richards. Should we be unable to cure those defaults, we will be unable to commence sales of their virtual menus and be subject to termination. We may owe additional sums under those contracts that we will not be able to pay. Termination of those contracts would have a materially adverse impact on our operations.
Unspecified and unascertainable risks
There is no basis for shareholders to evaluate the possible merits or risks of the Company’s business. To the extent that the Company develops and markets virtual restaurants, the Company will become subject to numerous risks. Although Management will endeavor to evaluate the risks inherent in the virtual restaurant business, there can be no assurance that Management will properly ascertain or assess all such risks.
Dependence on key personnel
The Company is dependent upon the continued services of Management. To the extent that his services become unavailable, the Company will be required to obtain other qualified personnel, and there can be no assurance that it will be able to recruit qualified persons upon acceptable terms.
The Company’s sole officer and director does allocate his time to other businesses activities, thereby causing conflicts of interest as to how much time to devote to the Company’s affairs. This could have a negative impact on the Company’s ability to consummate a business combination in a timely manner, if at all.
The Company’s officer and director is not required to commit his full time to the Company’s affairs, which may result in a conflict of interest in allocating his time between the Company’s business and other businesses. Management of the Company is engaged in other business endeavors and is not obligated to contribute any specific number of hours per week to the Company’s affairs.
If Management’s other business affairs require him to devote more time to such affairs, it could limit his ability to devote time to the Company’s affairs and could have a negative impact on the Company’s ability to succeed. Furthermore, we do not have an employment agreement with Mr. Klamka.
The Company may be unable to obtain additional financing, which could compel the Company to restructure or cease operations entirely.
Financing requirements to fund operations associated with reporting obligations under the Exchange Act.
The Company has no revenues and is dependent upon the willingness of the Company’s Management to fund the costs associated with the reporting obligations under the Exchange Act, other administrative costs associated with the Company’s corporate existence, and expenses related to the Company’s business objectives. The Company believes that it will have available sufficient financial resources available from its Management to continue to pay accounting and other professional fees and other miscellaneous expenses that may be required until the Company generate sufficient revenue.
We are dependent upon interim funding provided by Management or an affiliated party to pay professional fees and expenses. Our Management has provided funding, without formal agreement, as has been required to pay for accounting fees and other administrative expenses of the Company.
Our operations have been funded through advances from our management and we expect those advances to continue. We have no formal agreement with our management to provide additional funding. The failure of the company to receive additional funds will significantly impair the company’s abilities to operate and meet its reporting obligations.
4
Based on Mr. Klamka’s commitment to fund our operations, we believe that we will be able to continue as a going concern until such time as we secure outside financing or generate sufficient revenues from operations.
The Company has no “Independent Director”, so actions taken and expenses incurred by our officer and director on behalf of the Company will generally not be subject to “Independent Review”.
Our director owns shares of our common stock and does not receive compensation for services rendered prior to or in connection with our business, he may receive reimbursement for out-of-pocket expenses incurred by him in connection with activities on the Company’s behalf. There is no limit on the amount of these out-of-pocket expenses and there will be no review of the reasonableness of the expenses by anyone other than our board of director, which consist of one director who may seek reimbursement. If our director will not be deemed “independent,” he will generally not have the benefit of independent director examining the propriety of expenses incurred on our behalf and subject to reimbursement. Although the Company believes that all actions taken by our director on the Company’s behalf will be in the Company’s best interests, the Company cannot assure the investor that this will actually be the case. If actions are taken, or expenses are incurred that are actually not in the Company’s best interests, it could have a material adverse effect on our business and plan of operation and the price of our stock held by the public stockholders.
General Economic Risks.
The Company’s current and future business objectives and plan of operation are likely dependent, in large part, on the state of the general economy. Adverse changes in economic conditions may adversely affect the Company’s business objective and plan of operation. These conditions and other factors beyond the Company’s control include also, but are not limited to regulatory changes.
Risks Related to Our Common Stock
The Company’s shares of common stock are traded from time to time on the OTC Pink Sheet Market.
Our common stock is traded on the OTC Pink Sheet Market from time to time. There can be no assurance that there will be a liquid trading market for the Company’s common stock following a business combination. In the event that a liquid trading market commences, there can be no assurance as to the market price of the Company’s shares of common stock, whether any trading market will provide liquidity to investors, or whether any trading market will be sustained.
Our common stock is subject to the Penny Stock Rules of the SEC and the trading market in our common stock is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our common stock.
The Securities and Exchange Commission has adopted Rule 3a51-1 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, Rule 15g-9 require:
that a broker or dealer approve a person’s account for transactions in penny stocks; and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
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In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: obtain financial information and investment experience objectives of the person; and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form: sets forth the basis on which the broker or dealer made the suitability determination; and that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities, and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
State blue sky registration; potential limitations on resale of the Company’s common stock
The holders of the Company’s shares of common stock registered under the Exchange Act and those persons who desire to purchase them in any trading market that may develop in the future should be aware that there may be state blue-sky law restrictions upon the ability of investors to resell the Company’s securities. Accordingly, investors should consider the secondary market for the Company’s securities to be a limited one.
The Company’s Management intends to seek coverage and publication of information regarding the Company in an accepted publication manual that permits a manual exemption. The manual exemption permits a security to be distributed in a particular state without being registered if the Company issuing the security has a listing for that security in a securities manual recognized by the state. However, it is not enough for the security to be listed in a recognized manual. The listing entry must contain (1) the names of issuers, officers, and directors, (2) an issuer’s balance sheet, and (3) a profit and loss statement for either the fiscal year preceding the balance sheet or for the most recent fiscal year of operations. Furthermore, the manual exemption is a non-issuer exemption restricted to secondary trading transactions, making it unavailable for issuers selling newly issued securities.
Rule 144 Related Risks
The SEC adopted amendments to Rule 144, which became effective on February 15, 2008. These Rule 144 amendments apply to securities acquired both before and after that date. Generally, under the Rule 144 amendments, a person who has beneficially owned restricted shares for at least six months would be entitled to sell their securities provided that: (i) such person is not deemed to have been an affiliate at the time of, or at any time during the three months preceding, a sale; (ii) we are subject to and are current in the Exchange Act periodic reporting requirements for at least 90 days before the sale; and (iii) if the sale occurs prior to satisfaction of a one-year holding period, provided current information is available at the time of sale.
Persons who have beneficially owned restricted shares for at least six months but who are affiliates at the time of, or at any time during the three months preceding a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of either of the following: (i) 1% of the total number of securities of the same class then outstanding; or (ii) the average weekly trading volume of such securities during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale; provided, in each case, that we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale. Such sales by affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144.
These Rule 144 related risks are subject to further restrictions in the event that the Exchange Act reporting company was previously deemed to be a Shell Company, such as the Company.
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Restrictions on the Reliance of Rule 144 by Shell Companies or Former Shell Companies
Historically, the SEC staff has taken the position that Rule 144 is not available for the resale of securities initially issued by companies that are, or previously were, blank check companies like us. The SEC has codified and expanded this position in the amendments discussed above by prohibiting the use of Rule 144 for the resale of securities issued by any shell companies (other than business combination related shell companies) or any issuer that has been at any time previously a shell company. The SEC has provided an important exception to this prohibition, however, if the following conditions are met:
Possible Issuance of Additional Securities.
Our Articles of Incorporation authorize the issuance of 105,000,000 shares of common stock, par value $0.001. As of December 31, 2021, we had 13,611,574 shares issued and outstanding. We expect to issue additional shares in connection with the development of our business plan. To the extent that additional shares of common stock are issued, our shareholders would experience dilution of their respective ownership interests. The issuance of additional shares of common stock may adversely affect the market price of our common stock, in the event that an active trading market commences.
Dividends unlikely
The Company does not expect to pay dividends for the foreseeable future because it has no revenues or cash resources. The payment of dividends will be contingent upon the Company’s future revenues and earnings, if any, capital requirements and overall financial conditions. The payment of any future dividends will be within the discretion of the Company’s board of directors as then constituted. It is the Company’s expectation that Management will retain any earnings for use in its business operations and accordingly, the Company does not anticipate declaring any dividends in the foreseeable future.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2. PROPERTIES
We operate virtually and do not own or lease any real estate as of December 31, 2021.
ITEM 3. LEGAL PROCEEDINGS
Cordia is not aware of changes to claims previously reported or other claims that it deems as claims outside the ordinary course of business or otherwise, at this time, material.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is currently quoted on the OTC Markets under the symbol CORG. As of December 31, 2021 our shares of common stock were held by approximately 164 stockholders of record. The transfer agent of our common stock is Colonial Stock Transfer with the telephone number of (801) 355-5740.
We currently have no expectation to pay cash dividends to holders of our common stock in the foreseeable future.
Period | High | Low |
Year Ended December 31, 2020 |
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January 1, 2020 – March 31, 2020 | $0.16 | $0.01 |
April 1, 2020 – June 30, 2020 | 0.135 | 0.029 |
July 1, 2020 – September 30, 2021 | 0.39 | 0.1105 |
September 30, 2021 – December 31, 2021 | 0.34 | 0.1 |
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Year Ended December 31, 2021 |
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January 1, 2021 – March 31, 2021 | 0.32 | 0.1 |
April 1, 2021 – June 30, 2021 | 0.62 | 0.44 |
July 1, 2021 – September 30, 2021 | 0.39 | 0.18 |
September 30, 2021 – December 31, 2021 | 0.3 | 0.18 |
UNREGISTERED SALES OF EQUITY SECURITIES
None.
EQUITY COMPENSATION PLANS
None.
ITEM 6.
As a smaller reporting company, we are not required to provide this information.
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s Plan of Operation
The following discussion contains forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use of words such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “believe”, and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. From time to time, we also may provide forward-looking statements in other materials we release to the public.
Overview
Cordia Corporation. (the Company) was incorporated in the State of Nevada on April 28, 2000 under the name CyberOpticLabs Inc. On May 25, 2001, the Company filed Articles of Amendment to change the name to Cordia Corporation. The Company is headquartered in Las Vegas, Nevada. The Company's focus starting in 2020, is on the emerging field of ghost kitchens and virtual restaurants. The Company seeks to build its business based on meeting customer demand for unique on-premises dining and premises convenience. The Company's plan is to create a portfolio of virtual restaurants appealing to a broad customer base. The Company is actively seeking to acquire locations for ghost kitchens to meet the growth in app-based ordering. Virtual Dining Brands, LLC, a wholly owned subsidiary is organizing a network of social media influencers to support each launch. All of its celebrity and brand partners will be contractually required to regularly post on their social channels. Additionally, the company is working with a variety of influencers ranging from micro influencers in specific cities to recognized food accounts with significant followings to promote the company's menus.
Additionally, the company developed and markets the Crypto Food Hall which is a collection of non fungible tokens (NFTs) designed to promote its virtual menus and serve as a community for Cordia’s menu partners, brands, and end users.
Results of Operations for the Years Ended December 31, 2020 and 2019
We had sales of $207.00 and $74,207.00 for the years ended December 31, 2021 and 2020, respectively. Our cost of sales were $0.00 and $30,819 for the years ended December 31, 2021 and 2020, respectively. Our operating expenses were $482,443 and $14,430, for the years ended December 31, 2021 and 2020, respectively. Our operating expenses consisted mostly of professional fees, license fees and consulting expenses
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Revenues and Net Operating Loss
Our revenues, operating expenses, and net operating loss for the years ended December 31, 2020 and 2019 were as follows:
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| December 31, | December 31, |
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| 2021 | 2020 |
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SALES |
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| $207 | $74,207 | ||||
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COST OF SALES |
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| - | 30,819 | ||||
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GROSS PROFIT |
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| 207 | 43,388 | ||||
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OPERATING EXPENSES |
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Professional fees |
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| 16,180 | 5,000 | ||||
Consulting fees |
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| 92,500 | - | ||||
License fees |
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| 294,000 | - | ||||
Rent |
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| - | 6,500 | ||||
General and administrative |
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| 79,763 | 2,930 | ||||
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Total Operating Expenses |
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| 482,443 | 14,430 | ||||
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Operating Income(Loss) |
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| (482,236) | 28,958 | ||||
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Interest expense |
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| (55,851) | (30,422) | ||||
Interest expense - warrants |
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| (32,124) | - | ||||
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Net Income (Loss) |
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| $(570,211) | $(1,464) | ||||
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Weighted average number of common shares outstanding |
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| 13,611,574 | 13,611,574 | |||||
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|
|
Net Income(Loss) per common share |
|
|
|
| |||||
- Basic and fully diluted |
|
| $(0.04) | $(0.00) | |||||
Sales
We had no revenue from sales of restaurant services in 2021. Sales were $207 for the year ended December 31, 2020 compared to $74,207 for the year ended December 31, 2020 a decrease of $74,000. The $74,000 decrease in sales in 2021 over 2020 was primarily due to discontinuing dine in restaurant services.
10
Cost of Sales
Cost of sales for the year ended December 31, 2021 were $0.00 compared to $30,819 during the year ended December 31, 2020, a decrease of $30,819. Cost of sales includes the cost of the products purchased from our food and beverage suppliers for our restaurant sales. The cost of sales as a percentage of sales for the year ended December 31, 2021 was 0% as compared to 41.5% for the year ended December 31, 2020. The decrease in cost of sales as a percentage of sales was due discontinued full service restaurant operations.
License fees
We recorded license fees payable of $294,000 for certain obligations to celebrities and brands for our virtual restaurants during the year ended December 31, 2021 compared to $0.00 during the year ended December 31, 2020. This was an increase of $294,000 due to the entry into certain license contracts.
Professional and Consulting Fees
Professional and consulting fees expenses was $108,860 for the year ended December 31, 2021compared to $5,000 for the year ended December 31, 2020 which was an increase of 103,680. Professional and consulting fees consist of legal, accounting, and services related to SEC reporting requirements.
Rent
Rent expense was zero for the year ended December 31, 2021 compared to $6,500 for the year ended December 31, 2020. This was due to the discontinuation of full service restaurant operations.
General and Administrative Expense
General and administrative expense was $79,763 for the year ended December 31, 2021 compared to $2,930 for the year ended December 31, 2020. This was an increase of $76,833 due to operating costs related to developing products and services.
Net Operating Loss
Net operating loss for the year ended December 31, 2021 was $570,211 compared to net operating loss of $1,464 for the year ended December 31, 2020, an increase of $568,647. Net operating (loss) increased , as set forth above, primarily because licensing and consulting fees.
Liquidity and Capital Resources
Introduction
During the year ended December 31, 2021, because we did not generate sufficient revenue, we had negative operating cash flows. Our cash on hand as of December 31, 2021 was $24,673. We have high cash needs in the short term, and as our operating expenses increase, we will face strong to medium long term cash needs. We do not anticipate that our cash flows from operations will satisfy our cash flow needs for the next year, and if revenues do not keep up with our expenses, it will be necessary to seek other methods to finance our operations and any growth opportunities
Cash Requirements
Our cash on hand as of December 31, 2020 was $24,673. We anticipate that the funding from financing activities and product sales will not be enough to sustain us for the next 12 months.
Critical Accounting Policies
Our significant accounting policies are described in the notes to our financial statements for the twelve months ended December 31, 2021.
11
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company we are not required to provide the information required by this Item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item begins on page F-1 of this Annual Report on Form 10-K and is incorporated herein by reference.
ITEM 9. CHANGES AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
ITEM 9A. CONTROLS AND PROCEDURES
The term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act (15 U.S.C. 78a, et seq. ) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s Chief Executive Officer (principal executive officer and principal financial officer), or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
The term internal control over financial reporting is defined as a process designed by, or under the supervision of, the issuer’s Chief Executive Officer, or persons performing similar functions, and effected by the issuer’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes by generally accepted accounting principles and includes those policies and procedures that:
●Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;
●Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and
●Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements.
Our Chief Executive Officer does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of inherent limitations in all control systems, internal control over financial reporting may not prevent or detect misstatements, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the registrant have been detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
12
Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. We carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our chief executive officer concluded that our disclosure controls and procedures were not effective at December 31, 2021 due to the lack of full-time accounting and management personnel. We will consider hiring additional employees when we obtain sufficient capital.
Management’s Annual Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting has been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.
Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures are being made only in accordance with authorization of our management and directors; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting at December 31, 2021. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on that assessment under those criteria, our management has determined that, at December 31, 2021, our internal control over financial reporting was not effective due to a lack of resources.
Independent Registered Accountant’s Internal Control Attestation
This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the exemption provided to issuers that are not “large accelerated filers” nor “accelerated filers” under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Changes in Internal Controls over Financial Reporting.
There were no changes in the internal controls over our financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
13
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Our officers and directors are as follows: Peter Klamka, CEO, CFO and sole director.
Name |
| Age |
| Position |
Peter Klamka |
| 51 |
| CEO, CFO, Director |
Peter Klamka, 51, has been CEO and Chairman of the Company since November 11, 2019. Mr. Klamka is a private investor who brings twenty-five (25) years of business experience. Peter has a diverse knowledge of financial, legal and operations management, public company management, accounting, audit preparation, due diligence reviews and corporate fundraising.
Other expertise includes early-stage company capital restructuring, product licensing, cryptocurrency development, marketing, debt financing, and mergers and acquisitions.
Since 2016, Mr. Klamka has served as the managing member of Rideshare Las Vegas, LLC, a hospitality and transportation company. He continues in this role presently. Since 2018, Mr. Klamka has also served as the managing member of More Management, LLC a company that provides hospitality services and live events. He continues in this role presently. Both of these companies are privately held. Mr. Klamka does not serve as an officer or director for any other companies and not only publicly traded companies.
Term and Family Relationships
Our director currently has a term which will end at our next annual meeting of the stockholders or until successors are elected and qualify, subject to their prior death, resignation or removal. Officers serve at the discretion of the Board of Directors.
No family relationships exist among our officers, directors and consultants.
Legal Proceedings
To the best of our knowledge, no officer, director, or persons nominated for these positions, and no promoter or significant employee of our corporation has been involved in legal proceedings that would be material to an evaluation of our management.
Committees of Our Board of Directors
Our board of directors does not maintain a separate audit, nominating and corporate governance or compensation committee. Functions customarily performed by such committees are performed by our board of directors as a whole. We do not currently have an “audit committee financial expert” since we currently do not have an audit committee.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. To our knowledge, based solely upon a review of Forms 3, 4, and 5 filed with the SEC during the fiscal year ended December 31, 2020, we believe that, our directors, executive officers, and greater than 10% beneficial owners have complied with all applicable filing requirements during the fiscal year ended December 31, 2020.
14
Code of Ethics
We have not adopted a written code of ethics, primarily because we believe and understand that our officers and directors adhere to and follow ethical standards without the necessity of a written policy. Our business operations are not complex and are very limited. Our Company seeks advice and counsel from outside experts such as our lawyers and accountants on matters relating to corporate governance and financial reporting.
Director Independence
Our sole director is not independent.
ITEM 11: Executive Compensation
Name and Position |
| Year |
| Salary |
| Total |
|
|
|
|
|
|
|
Peter Klamka |
| 2021 |
| 0 |
| 0 |
Outstanding Equity Awards
No grants of stock options or stock awards were made during the fiscal year ended December 31, 2021 to our named executive officers. We have no stock options outstanding.
Long Term Incentive Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers.
Director Compensation
We did not pay or accrue any compensation to our directors as such during the fiscal year ended December 31, 2021.
Employment/Consulting Agreements
None
Limits on Liability and Indemnification
We provide directors and officers insurance for our current directors and officers.
Our by-laws provide that our company shall indemnify its officers and directors to the fullest extent allowed by law for any liability including reasonable costs of defense arising out of any act or omission of any officer or director on behalf of the company to the full extent allowed by the laws of the State of Nevada and any amendment to Nevada law, whether effected by the Nevada Revised Statutes or judicial decision or otherwise, which allows for further indemnification of officers or directors after the date of our by-laws automatically adopted by our company without further act. Insofar as indemnification for liabilities under the Securities Act may be permitted to our directors, officers, and controlling persons under the foregoing provisions or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is therefore unenforceable.
15
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information regarding beneficial ownership of the Company’s Common Stock and Preferred Stock as of August 2, 2021 by (i) each person who is known by us to beneficially own more than 5% of the Company’s Common Stock; (ii) each of the Company’s officers and directors; and (iii) all of the Company’s officers and directors as a group as of December 31, 2021.
Beneficial ownership has been determined in accordance with the rules and regulations of the Securities and Exchange Commission (the “Commission”) and includes voting or investment power with respect to the shares. Unless otherwise indicated, the persons named in the table below have sole voting and investment power with respect to the number of shares indicated as beneficially owned by them. Common Stock beneficially owned, and percentage ownership is based on 13,611,574 shares outstanding on the Record Date and assuming the exercise of any options or warrants or conversion of any convertible securities held by such person, which are presently exercisable or will become exercisable within 60 days of the Record Date.
|
| Common Stock Beneficially Owned (1) |
| Percentage of Common Stock Owned (1) |
Peter Klamka 401 Ryland St. 200-A Reno, Nevada 89502 Director and Officer (1 person) |
| 61,000 |
| 0.00% |
Geils & Co LLC 1866 * Leithsville Rd Hellertown, PA 18055 |
| 2,295,000 |
| 16.86% |
Geils Ventures LLC * 1866 Leithsville Rd #301 Hellertown, PA 18015 |
| 2,000,000 |
| 14.69% |
Melanie Minella 19 Jennie Lane Westport, CT 19 Jennie Lane Westport, CT |
| 850,000 |
| 6.24% |
Applicable percentage ownership is based on 13,611,574 shares of common stock outstanding as of August 2, 2021. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock that are currently exercisable or exercisable within 60 days of August 2, 2021 are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
*The control person of Geils & Co LLC and Geils Ventures, LLC is Alexander Minella who has dispositive power over all the shares
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
None
16
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Audit Fees
The aggregate fees billed for the fiscal years ended December 31, 2021 and 2020 for professional services rendered by the principal accountant for the audit of our annual financial statements and quarterly review of the financial statements included in our Form 10-K or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were $20,520 and $5,000 respectively.
Tax Fees
None
All Other Fees
None.
Pre-Approval Policies and Procedures
Our board of directors does not have an audit committee and has not adopted a policy on pre-approval of audit and permissible non-audit services.
ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements
Our financial statements as set forth in the Index to Consolidated Financial Statements attached hereto commencing on page F-1 are hereby incorporated by reference.
(b) Exhibits
The following exhibits, which are numbered in accordance with Item 601 of Regulation S-K, are filed herewith or, as noted, incorporated by reference herein.
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.
| CORDIA CORPORATION |
|
|
|
|
Date: June 2, 2022 | /s/Peter Klamka |
| Peter Klamka |
| President, Principal Executive Officer, |
| Principal Accounting Officer & |
| Director |
18
Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors of Cordia Corporation
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Cordia Corporation as of December 31, 2021 and 2020, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matter
Critical audit matters are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
We determined that there are no critical audit matters.
/S/
We have served as the Company's auditor since 2020
June 29, 2022
CORDIA CORPORATION
CONSOLIDATED BALANCE SHEETS
|
| December 31, | December 31, |
| 2021 | 2020 | |
ASSETS | |||
|
|
|
|
CURRENT |
|
|
|
Cash |
| $ | $ |
Prepaid expenses |
| ||
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|
|
TOTAL ASSETS |
| $ | $ |
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT | |||
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|
|
|
LIABILITIES |
|
|
|
|
|
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|
Accounts payable and accrued liabilities |
| $ | $ |
Note payable - Peter Klamka |
| ||
Note payables - other |
| ||
Stock payable |
| ||
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|
| |||
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|
STOCKHOLDERS' DEFICIT |
|
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|
|
Common stock, $ | |||
Treasury shares - |
| ( | |
Additional paid in capital |
| ||
Deficit |
| ( | ( |
|
|
|
|
Total Stockholders Deficit |
| ( | ( |
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT |
| $ | $ |
F-1
CORDIA CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
| For the year ended | For the year ended |
|
| December 31, | December 31, |
| 2021 | 2020 | |
|
|
|
|
SALES |
| $ | $ |
|
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|
COST OF SALES |
| ||
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GROSS PROFIT |
| ||
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|
OPERATING EXPENSES |
|
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|
Professional fees |
| ||
Consulting fees |
| ||
License fees |
| ||
Rent |
| ||
General and administrative |
| ||
|
|
|
|
Total Operating Expenses |
| ||
|
|
|
|
Operating Income(Loss) |
| ( | |
|
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|
|
Interest expense |
| ( | ( |
Interest expense - warrants |
| ( | |
|
|
|
|
Net Income (Loss) |
| $( | $( |
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding |
| ||
|
|
|
|
Net Income(Loss) per common share |
| $( | $( |
F-2
CORDIA CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
FROM JANUARY 1, 2021 TO DECEMBER 31, 2021
|
| Common Stock | Treasury Shares | Paid In | Accumulated |
| ||
| # of Shares | Amount | # of Shares | Amount | Capital | Deficit | TOTALS | |
|
|
|
|
|
|
|
|
|
Balance - January 1, 2021 |
| $ | ( | $( | $ | $( | $( | |
Retirement for treasury shares |
| |||||||
Issuance of warrants |
| |||||||
Issuance of options |
| |||||||
Net income (loss) |
| ( | ( | |||||
|
|
|
|
|
|
|
|
|
Balance - December 31, 2021 |
| $ | $ | $ | $( | $( | ||
F-3
CORDIA CORPORATION
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
|
| For the year ended | For the year ended |
|
| December 31, | December 31, |
| 2021 | 2020 | |
|
|
|
|
Cash Flows from Operating Activities |
|
|
|
Net income (loss) |
| $( | $( |
|
|
|
|
Adjustments to reconcile net loss to net cash used in operating activities |
|
|
|
Interest expense - debt issuance costs |
| ||
Interest expense - warrants |
| ||
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Changes in operating assets and liabilities |
|
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|
Accounts payable and accrued liabilities |
| ||
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Net Cash Used in Operating Activities |
| ( | ( |
|
|
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|
Cash Flows from Financing Activities |
|
|
|
Notes payable - net changes |
| ||
|
|
|
|
Net Cash Provided by Financing Activities |
| ||
|
|
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|
Net Change in Cash |
| ||
|
|
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|
Cash and Cash Equivalents - Beginning of period |
| ||
|
|
|
|
Cash and Cash Equivalents - End of period |
| $ | $ |
F-4
CORDIA CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2021 AND DECEMBER 32, 2020
1.NATURE OF THE BUSINESS AND BASIS OF PRESENTATION
Description of Business
Cordia Corporation (the “Company”) was incorporated in the State of Nevada on April 28, 2000 under the name CyberOpticLabs Inc. On May 25, 2001, the Company filed Articles of Amendment to change the name to Cordia Corporation. The Company is headquartered in Las Vegas, Nevada.
The Company’s focus starting in 2020 is on the emerging field of ghost kitchens and virtual restaurants. The Company seeks to build its business based on meeting customer demand for unique on-premises dining and premises convenience. The Company’s plan is to create a portfolio of virtual restaurants appealing to a broad customer base. The Company is actively seeking to acquire locations for ghost kitchens to meet the growth in app-based ordering.
Virtual Dining Brands, LLC, a wholly owned subsidiary, is organizing a network of social media influencers to support each launch. All of its celebrity and brand partners will be contractually required to regularly post on their social channels. Additionally, the Company is working with a variety of influencers ranging from micro influencers in specific cities to recognized food accounts with significant followings to promote the Company’s menus.
The Company is also developing a TikTok inspired kitchen in Los Angeles which will allow its chefs, influencers and brands to develop short form promotional content for the Company’s branded restaurants.
Basis of Presentation
The financial statements of the Company have been prepared in conformity with U.S. generally accepted accounting principles (GAAP).
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany balances and transactions have been eliminated.
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company has an accumulated deficit of $
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include valuation of intangible assets.
F-5
Recent Accounting Pronouncements
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, available for-sale debt securities, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of an allowance for losses. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for a fiscal year beginning after December 15, 2018, including interim periods within that fiscal year. Entities apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. As of December 31, 2019, this new standard has no impact on the current financial reporting.
On January 26, 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The new standard eliminates Step 2 from the goodwill impairment test. An entity should recognize a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. This standard is effective for public business entities in fiscal years beginning after December 15, 2019, and the standard was adopted and applied prospectively by the Company as of December 31, 2019, this new standard has no impact on the current financial reporting.
New Accounting Pronouncement
In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, ("ASU 2019-12") which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. The new standard is effective for fiscal years beginning after December 15, 2020. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. We do not expect adoption of this standard to have a material effect on our financial statements.
Cash Equivalents and Short-Term Investments
For purposes of the statement of cash flows, cash equivalents include demand deposits, money market funds, and all highly liquid debt instructions with original maturities of three months or less.
Financial Instruments
The FASB issued ASC 820-10, Fair Value Measurements and Disclosures, for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:
- | Level 1: Quoted prices in active markets for identical assets or liabilities |
- | Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. |
- | Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Concentrations and Credit Risk
The Company’s financial instruments that are exposed to concentrations and credit risk primarily consist of its cash, and accounts payable.
F-6
Cash - The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.
Foreign Currency Translation
The accounts of the Company are accounted for in accordance with the Statement of Financial Accounting Statements No. 52 (“SFAS 52”), “Foreign Currency Translation”. The financial statements of the Company are translated into US dollars as follows: assets and liabilities at year-end exchange rates; income, expenses and cash flows at average exchange rates; and shareholders’ equity at historical exchange rate.
Monetary assets and liabilities, and the related revenue, expense, gain and loss accounts, of the Company are re-measured at year-end exchange rates. Non-monetary assets and liabilities, and the related revenue, expense, gain and loss accounts are re-measured at historical rates. Adjustments which result from the re-measurement of the assets and liabilities of the Company are included in net income.
Share-Based Compensation
ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized in the period of grant.
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.
As of December 31, 2021 and 2020, respectively, there was $Nil of unrecognized expense related to non-vested stock-based compensation arrangements granted. There have been nil and 900,000 options granted during the year ended December 31, 2021 and 2020, respectively.
Income Taxes
The Company accounts for income taxes under ASC 740, Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. Deferred tax assets or liabilities were off-set by a 100% valuation allowance, therefore there has been no recognized benefit as of June 30, 2021 and 2020 respectively. Further it is unlikely with the change of control that the Company will have the ability to realize any future tax benefits that may exist.
Commitments and Contingencies
The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
F-7
Earnings Per Share
Net income (loss) per share is calculated in accordance with ASC 260, Earnings Per Share. The weighted-average number of common shares outstanding during each period is used to compute basic earnings or loss per share. Diluted earnings or loss per share is computed using the weighted average number of shares and diluted potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised.
Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding at December 31, 2021 and December 31, 2020 respectively. Due to net operating losses, there is no presentation of dilutive earnings per share, as it would be anti-dilutive.
As of December 31, 2021,
Forgiveness of Indebtedness
The Company follows the guidance of AS 470.10 related to debt forgiveness and extinguishment. Debts of the Company are considered extinguished when the statute of limitations in the applicable jurisdiction expire, or when terminated by judicial authority such as the granting of a declaratory judgment. Debts to related parties or shareholders are treated as capital transactions when forgiven or extinguished and credited to additional paid in capital. Debts to non-related parties are treated as other income when forgiven or extinguished.
Debt Issued with Warrants
The Company considers guidance within ASC 470-20, Debt (ASC 470), ASC 480, and ASC 815 when accounting for the issuance of convertible debt with detachable warrants. The Company classifies stock warrants as either equity instruments, derivative liabilities, or liabilities depending on the specific terms of the warrant agreement. In circumstances in which debt is issued with liability-classified warrants, the proceeds from the issuance of convertible debt are first allocated to the warrants at their full estimated fair value and established as both a liability and a debt discount. The remaining proceeds, as further reduced by discounts created by the bifurcation of embedded derivatives and a beneficial conversion feature, is allocated to the debt. The Company accounts for debt as liabilities measured at amortized cost and amortizes the resulting debt discount from the allocation of proceeds, to interest expense using the effective interest method over the expected term of the debt instrument pursuant to ASC 835, Interest (ASC 835).
3.NOTE PAYABLE
Amounts due to Lyons Capital Inc. are unsecured, and bear interest at the annual rate of 6%. The loan due date has been extended to December 31, 2021.
On July 7, 2021, the Company entered into a Securities Purchase Agreement with Leonite Fund 1 LLC. (“Leonite”), whereby Leonite would advance to the Company a total of $500,000. The Company will issue a convertible note for a total consideration of $568,181.82 with a discount of $68,181.82 given back to Leonite. The convertible note bears interest at the greater of bank prime plus 6% or 12% per annum.
As part of the consideration for the advancing of funds, the Company will issue to Leonite, 50,000 shares of restricted common stock and the issuance of stock warrants for a total of 200,000 shares of restricted common shares at $1.00 per share. These warrants expire on July 7, 2026.
To date the Company has received $
F-8
4.SHARE-BASED PAYMENT ARRANGEMENTS
A.Stock Warrants
As stated above, on July 7, 2021, the Company issued stock warrants for a total of 200,000 shares of restricted common shares at $1.00 per share. These warrants expire on July 7, 2026.
The Company measures the fair value of the vested portion of the issued warrants based on a Black-Sholes formula using certain assumptions discussed in the following paragraph, and the closing market price of the Company's common stock on the date of the fair value determination.
The assumptions used in the valuation of warrants were as follows:
Risk-free interest rate | |
Life of warrant | |
Expected stock price volatility | |
Expected dividend yield | $ |
The risk-free interest rate is based on the yield of Daily U.S. Treasury Yield Curve Rates with terms equal to the life of the warrants as of the grant date. The expected stock price volatility is based on the Companies’ historical stock price volatility.
B.Stock Options
As stated in Note 6, in December 2021, the Company issued stock options for a total of 900,000 shares of restricted common shares with exercise price of $1.00 per share.
The Company measures the fair value of the vested portion of the issued warrants based on a Black-Sholes formula using certain assumptions discussed in the following paragraph, and the closing market price of the Company's common stock on the date of the fair value determination.
The assumptions used in the valuation of options were as follows:
Risk-free interest rate | |
Life of warrant | |
Expected stock price volatility | |
Expected dividend yield | $ |
The risk-free interest rate is based on the yield of Daily U.S. Treasury Yield Curve Rates with terms equal to the life of the warrants as of the grant date. The expected stock price volatility is based on the Companies’ historical stock price volatility.
5.INCOME TAXES
Income taxes are provided based upon the liability method. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard imposed by accounting standards to allow recognition of such an asset.
F-9
Deferred tax assets/liabilities were as follows as of December 31, 2021 and 2020:
Description | 2021 | 2020 |
|
|
|
Net operating loss carry forward | $ | $ |
Valuation allowance | ( | ( |
Total | $ | $ |
As of December 31, 2021, the Company expected no net deferred tax assets to be recognized, resulting from net operating loss carry forwards. Deferred tax assets were offset by a corresponding allowance of 100%.
6.LICENSE AGREEMENTS
In December 2020, the Company entered into 3 separate and identical license agreements for the use of the names of Holly Niederkohr, Denise Richards and Carmen Electra as endorsers of proposed advertisements, promotions and sale of Company products for a term of 36 months.
Compensation for each of the participants in the license agreements is as follows:
Holly Niederkohr
Denise Richards
A royalty compensation of 20% of the gross receipts of the Licensed Products sold calculated on a monthly basis. The minimum annual guarantee of compensation will be $50,000. Upon execution of this agreement, the Company paid an advance amount of $5,000. An additional $5,000 shall be paid upon approval by Richards and the Company of the menu.
Carmen Electra
F-10
7.SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date of filing the financial statements with OTC Markets, the date the consolidated financial statements were available to be issued. Management is not aware of any significant events that occurred subsequent to the balance sheet date that would have a material effect on the consolidated financial statements thereby requiring adjustment or disclosure.
F-11
CONSOLIDATED BALANCE SHEETS - USD ($) |
Dec. 31, 2021 |
Dec. 31, 2020 |
|---|---|---|
| CURRENT | ||
| Cash | $ 24,637 | $ 3,035 |
| Prepaid Expense, Current | 0 | 0 |
| TOTAL ASSETS | 24,637 | 3,035 |
| LIABILITIES | ||
| Accounts payable and accrued liabilities | 141,339 | 3,717 |
| Note payable - Peter Klamka | 0 | 12,010 |
| Note payables - other | 249,753 | 20,000 |
| Stock payable | 21,500 | 0 |
| Liabilities | 412,592 | 35,727 |
| STOCKHOLDERS' DEFICIT | ||
| Common stock, $.001 par value, 105,000,000 shares authorized - issued and outstanding - 13,611,574, December 31, 2020 - 13,611,574 | 13,612 | 13,612 |
| Treasury shares - nil, December 31, 2020 - 347,544 | 0 | (348) |
| Additional paid in capital | 8,450,384 | 8,235,784 |
| Retained Earnings (Accumulated Deficit) | (8,851,951) | (8,281,740) |
| Total Stockholders Deficit | (387,955) | (32,692) |
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 24,637 | $ 3,035 |
CONSOLIDATED BALANCE SHEETS - Parenthetical - $ / shares |
Dec. 31, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Details | ||
| Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
| Common Stock, Shares Authorized | 105,000,000 | 105,000,000 |
| Common Stock, Shares, Outstanding | 13,611,574 | 13,611,574 |
| Common Stock, Shares, Issued | 13,611,574 | 13,611,574 |
| Treasury Stock, Shares | 0 | 347,544 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Details | ||
| SALES | $ 207 | $ 74,207 |
| COST OF SALES | 0 | 30,819 |
| GROSS PROFIT | 207 | 43,388 |
| OPERATING EXPENSES | ||
| Professional fees | 16,180 | 5,000 |
| Consulting fees | 92,500 | 0 |
| License fees | 294,000 | 0 |
| Rent | 0 | 6,500 |
| General and administrative | 79,763 | 2,930 |
| Total Operating Expenses | 482,443 | 14,430 |
| Operating Income(Loss) | (482,236) | 28,958 |
| Interest expense | (55,851) | (30,422) |
| Interest expense - warrants | (32,124) | 0 |
| Net Income (Loss) | $ (570,211) | $ (1,464) |
| Weighted average number of common shares outstanding | 13,611,574 | 13,611,574 |
| Net Income(Loss) per common share - Basic and fully diluted | $ (0.04) | $ (0.00) |
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT - 12 months ended Dec. 31, 2021 - USD ($) |
Common Stock |
Treasury Stock, Common |
Additional Paid-in Capital |
Retained Earnings |
Total |
|---|---|---|---|---|---|
| Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2020 | $ 13,612 | $ (348) | $ 8,235,784 | $ (8,281,740) | $ (32,692) |
| Shares, Outstanding, Beginning Balance at Dec. 31, 2020 | 13,611,574 | (347,544) | |||
| Retirement for treasury shares | $ 0 | $ 348 | 0 | 0 | 348 |
| Retirement for treasury shares | 347,544 | ||||
| Stock and Warrants Issued During Period, Value, Preferred Stock and Warrants | 0 | $ 0 | 70,600 | 0 | 70,600 |
| Issuance of options | 0 | 0 | 144,000 | 0 | 144,000 |
| Net Income (Loss) | 0 | 0 | 0 | (570,211) | (570,211) |
| Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2021 | $ 13,612 | $ 0 | $ 8,450,384 | $ (8,851,951) | $ (387,955) |
| Shares, Outstanding, Ending Balance at Dec. 31, 2021 | 13,611,574 |
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS - USD ($) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Cash Flows from Operating Activities | ||
| Net income (loss) | $ (570,211) | $ (1,464) |
| Adjustments to reconcile net loss to net cash used in operating activities | ||
| Interest expense - debt issuance costs | 55,851 | 0 |
| Interest expense - warrants | 32,124 | 0 |
| Changes in operating assets and liabilities | ||
| Accounts payable and accrued liabilities | 137,970 | 217 |
| Net Cash Used in Operating Activities | (344,266) | (1,247) |
| Cash Flows from Financing Activities | ||
| Notes payable - net changes | 365,868 | 4,282 |
| Net Cash Provided by Financing Activities | 365,868 | 4,282 |
| Net Change in Cash | 21,602 | 3,035 |
| Cash and Cash Equivalents - Beginning of period | 3,035 | 0 |
| Cash and Cash Equivalents - End of period | $ 24,637 | $ 3,035 |
1. NATURE OF THE BUSINESS AND BASIS OF PRESENTATION |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Notes | |
| 1. NATURE OF THE BUSINESS AND BASIS OF PRESENTATION | 1.NATURE OF THE BUSINESS AND BASIS OF PRESENTATION
Description of Business
Cordia Corporation (the “Company”) was incorporated in the State of Nevada on April 28, 2000 under the name CyberOpticLabs Inc. On May 25, 2001, the Company filed Articles of Amendment to change the name to Cordia Corporation. The Company is headquartered in Las Vegas, Nevada.
The Company’s focus starting in 2020 is on the emerging field of ghost kitchens and virtual restaurants. The Company seeks to build its business based on meeting customer demand for unique on-premises dining and premises convenience. The Company’s plan is to create a portfolio of virtual restaurants appealing to a broad customer base. The Company is actively seeking to acquire locations for ghost kitchens to meet the growth in app-based ordering. Virtual Dining Brands, LLC, a wholly owned subsidiary, is organizing a network of social media influencers to support each launch. All of its celebrity and brand partners will be contractually required to regularly post on their social channels. Additionally, the Company is working with a variety of influencers ranging from micro influencers in specific cities to recognized food accounts with significant followings to promote the Company’s menus. The Company is also developing a TikTok inspired kitchen in Los Angeles which will allow its chefs, influencers and brands to develop short form promotional content for the Company’s branded restaurants.
Basis of Presentation
The financial statements of the Company have been prepared in conformity with U.S. generally accepted accounting principles (GAAP).
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany balances and transactions have been eliminated.
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company has an accumulated deficit of $8,851,951 as of December 31, 2021. The Company commenced operations in 2020. The Company cannot be certain that it will be successful in these strategies or whether it will require additional funding, nor is it certain that the required funding will be obtained. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||
| Notes | |||||||
| 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include valuation of intangible assets.
Recent Accounting Pronouncements
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, available for-sale debt securities, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of an allowance for losses. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for a fiscal year beginning after December 15, 2018, including interim periods within that fiscal year. Entities apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. As of December 31, 2019, this new standard has no impact on the current financial reporting. On January 26, 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The new standard eliminates Step 2 from the goodwill impairment test. An entity should recognize a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. This standard is effective for public business entities in fiscal years beginning after December 15, 2019, and the standard was adopted and applied prospectively by the Company as of December 31, 2019, this new standard has no impact on the current financial reporting.
New Accounting Pronouncement In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, ("ASU 2019-12") which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. The new standard is effective for fiscal years beginning after December 15, 2020. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. We do not expect adoption of this standard to have a material effect on our financial statements.
Cash Equivalents and Short-Term Investments
For purposes of the statement of cash flows, cash equivalents include demand deposits, money market funds, and all highly liquid debt instructions with original maturities of three months or less.
Financial Instruments
The FASB issued ASC 820-10, Fair Value Measurements and Disclosures, for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:
Concentrations and Credit Risk
The Company’s financial instruments that are exposed to concentrations and credit risk primarily consist of its cash, and accounts payable.
Cash - The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.
Foreign Currency Translation
The accounts of the Company are accounted for in accordance with the Statement of Financial Accounting Statements No. 52 (“SFAS 52”), “Foreign Currency Translation”. The financial statements of the Company are translated into US dollars as follows: assets and liabilities at year-end exchange rates; income, expenses and cash flows at average exchange rates; and shareholders’ equity at historical exchange rate.
Monetary assets and liabilities, and the related revenue, expense, gain and loss accounts, of the Company are re-measured at year-end exchange rates. Non-monetary assets and liabilities, and the related revenue, expense, gain and loss accounts are re-measured at historical rates. Adjustments which result from the re-measurement of the assets and liabilities of the Company are included in net income.
Share-Based Compensation
ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized in the period of grant.
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.
As of December 31, 2021 and 2020, respectively, there was $Nil of unrecognized expense related to non-vested stock-based compensation arrangements granted. There have been nil and 900,000 options granted during the year ended December 31, 2021 and 2020, respectively.
Income Taxes
The Company accounts for income taxes under ASC 740, Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. Deferred tax assets or liabilities were off-set by a 100% valuation allowance, therefore there has been no recognized benefit as of June 30, 2021 and 2020 respectively. Further it is unlikely with the change of control that the Company will have the ability to realize any future tax benefits that may exist.
Commitments and Contingencies
The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
Earnings Per Share
Net income (loss) per share is calculated in accordance with ASC 260, Earnings Per Share. The weighted-average number of common shares outstanding during each period is used to compute basic earnings or loss per share. Diluted earnings or loss per share is computed using the weighted average number of shares and diluted potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised.
Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding at December 31, 2021 and December 31, 2020 respectively. Due to net operating losses, there is no presentation of dilutive earnings per share, as it would be anti-dilutive.
As of December 31, 2021, 900,000 options (2020: 900,000) were excluded from the diluted weighted-average number of ordinary shares calculation because their effect would have been anti-dilutive.
Forgiveness of Indebtedness
The Company follows the guidance of AS 470.10 related to debt forgiveness and extinguishment. Debts of the Company are considered extinguished when the statute of limitations in the applicable jurisdiction expire, or when terminated by judicial authority such as the granting of a declaratory judgment. Debts to related parties or shareholders are treated as capital transactions when forgiven or extinguished and credited to additional paid in capital. Debts to non-related parties are treated as other income when forgiven or extinguished.
Debt Issued with Warrants
The Company considers guidance within ASC 470-20, Debt (ASC 470), ASC 480, and ASC 815 when accounting for the issuance of convertible debt with detachable warrants. The Company classifies stock warrants as either equity instruments, derivative liabilities, or liabilities depending on the specific terms of the warrant agreement. In circumstances in which debt is issued with liability-classified warrants, the proceeds from the issuance of convertible debt are first allocated to the warrants at their full estimated fair value and established as both a liability and a debt discount. The remaining proceeds, as further reduced by discounts created by the bifurcation of embedded derivatives and a beneficial conversion feature, is allocated to the debt. The Company accounts for debt as liabilities measured at amortized cost and amortizes the resulting debt discount from the allocation of proceeds, to interest expense using the effective interest method over the expected term of the debt instrument pursuant to ASC 835, Interest (ASC 835). |
3. NOTE PAYABLE |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Notes | |
| 3. NOTE PAYABLE | 3.NOTE PAYABLE
Amounts due to Lyons Capital Inc. are unsecured, and bear interest at the annual rate of 6%. The loan due date has been extended to December 31, 2021.
On July 7, 2021, the Company entered into a Securities Purchase Agreement with Leonite Fund 1 LLC. (“Leonite”), whereby Leonite would advance to the Company a total of $500,000. The Company will issue a convertible note for a total consideration of $568,181.82 with a discount of $68,181.82 given back to Leonite. The convertible note bears interest at the greater of bank prime plus 6% or 12% per annum.
As part of the consideration for the advancing of funds, the Company will issue to Leonite, 50,000 shares of restricted common stock and the issuance of stock warrants for a total of 200,000 shares of restricted common shares at $1.00 per share. These warrants expire on July 7, 2026.
To date the Company has received $250,000 from Leonite which is due July 2022. No common stock has been issued to date. |
4. SHARE-BASED PAYMENT ARRANGEMENTS |
12 Months Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||
| Notes | |||||||||||||||||
| 4. SHARE-BASED PAYMENT ARRANGEMENTS | 4.SHARE-BASED PAYMENT ARRANGEMENTS
A.Stock Warrants
As stated above, on July 7, 2021, the Company issued stock warrants for a total of 200,000 shares of restricted common shares at $1.00 per share. These warrants expire on July 7, 2026.
The Company measures the fair value of the vested portion of the issued warrants based on a Black-Sholes formula using certain assumptions discussed in the following paragraph, and the closing market price of the Company's common stock on the date of the fair value determination.
The assumptions used in the valuation of warrants were as follows:
The risk-free interest rate is based on the yield of Daily U.S. Treasury Yield Curve Rates with terms equal to the life of the warrants as of the grant date. The expected stock price volatility is based on the Companies’ historical stock price volatility.
B.Stock Options
As stated in Note 6, in December 2021, the Company issued stock options for a total of 900,000 shares of restricted common shares with exercise price of $1.00 per share.
The Company measures the fair value of the vested portion of the issued warrants based on a Black-Sholes formula using certain assumptions discussed in the following paragraph, and the closing market price of the Company's common stock on the date of the fair value determination.
The assumptions used in the valuation of options were as follows:
The risk-free interest rate is based on the yield of Daily U.S. Treasury Yield Curve Rates with terms equal to the life of the warrants as of the grant date. The expected stock price volatility is based on the Companies’ historical stock price volatility. |
5. INCOME TAXES |
12 Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | ||||||||||||||||
| Notes | ||||||||||||||||
| 5. INCOME TAXES | 5.INCOME TAXES
Income taxes are provided based upon the liability method. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard imposed by accounting standards to allow recognition of such an asset.
Deferred tax assets/liabilities were as follows as of December 31, 2021 and 2020:
As of December 31, 2021, the Company expected no net deferred tax assets to be recognized, resulting from net operating loss carry forwards. Deferred tax assets were offset by a corresponding allowance of 100%. |
6. LICENSE AGREEMENTS |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Notes | |
| 6. LICENSE AGREEMENTS | 6.LICENSE AGREEMENTS
In December 2020, the Company entered into 3 separate and identical license agreements for the use of the names of Holly Niederkohr, Denise Richards and Carmen Electra as endorsers of proposed advertisements, promotions and sale of Company products for a term of 36 months.
Compensation for each of the participants in the license agreements is as follows:
Holly Niederkohr
A royalty compensation of 40% of the gross receipts of the Licensed Products sold calculated on a monthly basis. Holly Niederkohr is also entitled to purchase 200,000 shares of restricted common stock of the Company, for a price of $1.00 per share.
Denise Richards A royalty compensation of 20% of the gross receipts of the Licensed Products sold calculated on a monthly basis. The minimum annual guarantee of compensation will be $50,000. Upon execution of this agreement, the Company paid an advance amount of $5,000. An additional $5,000 shall be paid upon approval by Richards and the Company of the menu.
Additionally, Denise Richards is entitled to purchase 500,000 shares of restricted common stock of the Company, for a price of $1.00 per share.
Denise Richards is also entitled to an additional cash payment of $50,000 upon the closing of any equity financing for the Company in excess of $2,000,000.
In the event that the control of the Company is sold to a third party or the Company commences trading on the New York or Nasdaq Stock Exchange, Richards is entitled to receive an additional $250,000 at closing or on the first day of trading.
Carmen Electra
A royalty compensation of 20% of the gross receipts of the Licensed Products sold calculated on a monthly basis. The minimum annual guarantee of compensation will be $50,000. Upon execution of this agreement, the Company paid an advance amount of $5,000. An additional $5,000 shall be paid upon approval by Electra and the Company of the menu.
Carmen Electra is entitled to purchase 200,000 shares of restricted common stock of the Company, for a price of $1.00 per share. |
7. SUBSEQUENT EVENTS |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Notes | |
| 7. SUBSEQUENT EVENTS | 7.SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date of filing the financial statements with OTC Markets, the date the consolidated financial statements were available to be issued. Management is not aware of any significant events that occurred subsequent to the balance sheet date that would have a material effect on the consolidated financial statements thereby requiring adjustment or disclosure. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Use of Estimates (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Policies | |
| Use of Estimates | Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include valuation of intangible assets. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Recent Accounting Pronouncements (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Policies | |
| Recent Accounting Pronouncements | Recent Accounting Pronouncements
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, available for-sale debt securities, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of an allowance for losses. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for a fiscal year beginning after December 15, 2018, including interim periods within that fiscal year. Entities apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. As of December 31, 2019, this new standard has no impact on the current financial reporting. On January 26, 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The new standard eliminates Step 2 from the goodwill impairment test. An entity should recognize a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. This standard is effective for public business entities in fiscal years beginning after December 15, 2019, and the standard was adopted and applied prospectively by the Company as of December 31, 2019, this new standard has no impact on the current financial reporting. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: New Accounting Pronouncement (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Policies | |
| New Accounting Pronouncement | New Accounting Pronouncement In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, ("ASU 2019-12") which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. The new standard is effective for fiscal years beginning after December 15, 2020. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. We do not expect adoption of this standard to have a material effect on our financial statements. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Cash Equivalents and Short-Term Investments (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Policies | |
| Cash Equivalents and Short-Term Investments | Cash Equivalents and Short-Term Investments
For purposes of the statement of cash flows, cash equivalents include demand deposits, money market funds, and all highly liquid debt instructions with original maturities of three months or less. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Financial Instruments (Policies) |
12 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||
| Policies | |||||||
| Financial Instruments | Financial Instruments
The FASB issued ASC 820-10, Fair Value Measurements and Disclosures, for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:
|
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Concentrations and Credit Risk (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Policies | |
| Concentrations and Credit Risk | Concentrations and Credit Risk
The Company’s financial instruments that are exposed to concentrations and credit risk primarily consist of its cash, and accounts payable.
Cash - The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Foreign Currency Translation (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Policies | |
| Foreign Currency Translation | Foreign Currency Translation
The accounts of the Company are accounted for in accordance with the Statement of Financial Accounting Statements No. 52 (“SFAS 52”), “Foreign Currency Translation”. The financial statements of the Company are translated into US dollars as follows: assets and liabilities at year-end exchange rates; income, expenses and cash flows at average exchange rates; and shareholders’ equity at historical exchange rate.
Monetary assets and liabilities, and the related revenue, expense, gain and loss accounts, of the Company are re-measured at year-end exchange rates. Non-monetary assets and liabilities, and the related revenue, expense, gain and loss accounts are re-measured at historical rates. Adjustments which result from the re-measurement of the assets and liabilities of the Company are included in net income. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Share-Based Compensation (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Policies | |
| Share-Based Compensation | Share-Based Compensation
ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized in the period of grant.
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.
As of December 31, 2021 and 2020, respectively, there was $Nil of unrecognized expense related to non-vested stock-based compensation arrangements granted. There have been nil and 900,000 options granted during the year ended December 31, 2021 and 2020, respectively. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Income Taxes (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Policies | |
| Income Taxes | Income Taxes
The Company accounts for income taxes under ASC 740, Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. Deferred tax assets or liabilities were off-set by a 100% valuation allowance, therefore there has been no recognized benefit as of June 30, 2021 and 2020 respectively. Further it is unlikely with the change of control that the Company will have the ability to realize any future tax benefits that may exist. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Commitments and Contingencies (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Policies | |
| Commitments and Contingencies | Commitments and Contingencies
The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Earnings Per Share (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Policies | |
| Earnings Per Share | Earnings Per Share
Net income (loss) per share is calculated in accordance with ASC 260, Earnings Per Share. The weighted-average number of common shares outstanding during each period is used to compute basic earnings or loss per share. Diluted earnings or loss per share is computed using the weighted average number of shares and diluted potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised.
Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding at December 31, 2021 and December 31, 2020 respectively. Due to net operating losses, there is no presentation of dilutive earnings per share, as it would be anti-dilutive.
As of December 31, 2021, 900,000 options (2020: 900,000) were excluded from the diluted weighted-average number of ordinary shares calculation because their effect would have been anti-dilutive. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Forgiveness of Indebtedness (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Policies | |
| Forgiveness of Indebtedness | Forgiveness of Indebtedness
The Company follows the guidance of AS 470.10 related to debt forgiveness and extinguishment. Debts of the Company are considered extinguished when the statute of limitations in the applicable jurisdiction expire, or when terminated by judicial authority such as the granting of a declaratory judgment. Debts to related parties or shareholders are treated as capital transactions when forgiven or extinguished and credited to additional paid in capital. Debts to non-related parties are treated as other income when forgiven or extinguished. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Debt Issued with Warrants (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Policies | |
| Debt Issued with Warrants | Debt Issued with Warrants
The Company considers guidance within ASC 470-20, Debt (ASC 470), ASC 480, and ASC 815 when accounting for the issuance of convertible debt with detachable warrants. The Company classifies stock warrants as either equity instruments, derivative liabilities, or liabilities depending on the specific terms of the warrant agreement. In circumstances in which debt is issued with liability-classified warrants, the proceeds from the issuance of convertible debt are first allocated to the warrants at their full estimated fair value and established as both a liability and a debt discount. The remaining proceeds, as further reduced by discounts created by the bifurcation of embedded derivatives and a beneficial conversion feature, is allocated to the debt. The Company accounts for debt as liabilities measured at amortized cost and amortizes the resulting debt discount from the allocation of proceeds, to interest expense using the effective interest method over the expected term of the debt instrument pursuant to ASC 835, Interest (ASC 835). |
4. SHARE-BASED PAYMENT ARRANGEMENTS: Schedule of Assumptions Used in the Valuation of Shares (Tables) |
12 Months Ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||
| Warrant | |||||||||
| Schedule of Assumptions Used in the Valuation of Shares |
|
||||||||
| Stock Options | |||||||||
| Schedule of Assumptions Used in the Valuation of Shares |
|
5. INCOME TAXES: Deferred tax assets/liabilities were as follows as of June 30, 2021 and 2020 (Tables) |
12 Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | ||||||||||||||||
| Tables/Schedules | ||||||||||||||||
| Deferred tax assets/liabilities were as follows as of June 30, 2021 and 2020: |
|
1. NATURE OF THE BUSINESS AND BASIS OF PRESENTATION (Details) - USD ($) |
Dec. 31, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Details | ||
| Retained Earnings (Accumulated Deficit) | $ 8,851,951 | $ 8,281,740 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Earnings Per Share (Details) - shares |
12 Months Ended | |
|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Details | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 900,000 | 900,000 |
3. NOTE PAYABLE (Details) |
Dec. 31, 2021
USD ($)
|
|---|---|
| Details | |
| Notes Payable | $ 250,000 |
5. INCOME TAXES: Deferred tax assets/liabilities were as follows as of June 30, 2021 and 2020 (Details) - USD ($) |
Dec. 31, 2021 |
Jun. 30, 2020 |
|---|---|---|
| Details | ||
| Deferred Tax Assets, Operating Loss Carryforwards | $ 8,582,651 | $ 8,281,740 |
| Deferred Tax Assets, Valuation Allowance | (8,582,651) | (8,281,740) |
| Deferred Tax Assets, Net of Valuation Allowance | $ 0 | $ 0 |
6. LICENSE AGREEMENTS (Details) |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Holly Niederkohr - Licensing Agreement | |
| Description of Licensing Agreement Compensation | A royalty compensation of 40% of the gross receipts of the Licensed Products sold calculated on a monthly basis. Holly Niederkohr is also entitled to purchase 200,000 shares of restricted common stock of the Company, for a price of $1.00 per share. |
| Denise Richards - Licensing Agreement | |
| Description of Licensing Agreement Compensation, Cont. | Additionally, Denise Richards is entitled to purchase 500,000 shares of restricted common stock of the Company, for a price of $1.00 per share. |
| Description of Licensing Agreement Compensation, Cont. 2 | Denise Richards is also entitled to an additional cash payment of $50,000 upon the closing of any equity financing for the Company in excess of $2,000,000. |
| Description of Licensing Agreement Compensation, Cont. 3 | In the event that the control of the Company is sold to a third party or the Company commences trading on the New York or Nasdaq Stock Exchange, Richards is entitled to receive an additional $250,000 at closing or on the first day of trading. |
| Carmen Electra - Licensing Agreement | |
| Description of Licensing Agreement Compensation | A royalty compensation of 20% of the gross receipts of the Licensed Products sold calculated on a monthly basis. The minimum annual guarantee of compensation will be $50,000. Upon execution of this agreement, the Company paid an advance amount of $5,000. An additional $5,000 shall be paid upon approval by Electra and the Company of the menu. |
| Description of Licensing Agreement Compensation, Cont. | Carmen Electra is entitled to purchase 200,000 shares of restricted common stock of the Company, for a price of $1.00 per share. |