UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-Q
☒ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the quarterly period ended March 31, 2021 | |
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☐ | Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the transition period from ________ to ________ |
Commission File No. 000-52828
Digital Development Partners, Inc. |
(Exact name of registrant as specified in its charter) |
Nevada |
| 98-0521119 |
(State or Other Jurisdiction of Incorporation or Organization) |
| (IRS Employer Identification No.) |
3505 Yucca Drive, Suite 104, Flower Mound, Texas 75028
(Address of Principal Executive Offices, Including Zip Code)
(833) 223-4204
(Registrant’s telephone number, including area code)
______________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
Securities Registered under Section 12(b) of the Exchange Act: None
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. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares outstanding of the registrant’s Common Stock, $.001 par value (being the only class of its common stock), is 172,400,000 as of May 21, 2021.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
2 |
DIGITAL DEVELOPMENT PARTNERS, INC.
Consolidated Balance Sheets
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| 3/31/2021 |
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| 12/31/2020 |
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| (unaudited) |
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ASSETS | ||||||||
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CURRENT ASSETS |
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Cash and cash equivalents |
| $ | 75,788 |
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| $ | 52,974 |
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Other current assets |
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Inventory |
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| 49,663 |
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| 39,676 |
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Pre-paid expenses |
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| 9,000 |
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|
| 13,500 |
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Total current assets |
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| 134,451 |
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|
| 106,150 |
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OTHER ASSETS |
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Deposit - asset purchase |
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| --- |
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| 20,000 |
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Fixtures and equipment |
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| 14,957 |
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|
| --- |
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Intangible asset |
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| 179,444 |
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|
| --- |
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Total other assets |
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| 194,401 |
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|
| 20,000 |
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TOTAL ASSETS |
| $ | 328,852 |
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| $ | 126,150 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
LIABILITIES |
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Current liabilities |
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Other current liabilities |
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Accounts payable and accrued liabilities |
| $ | 48,354 |
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| $ | 46,253 |
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Accrued interest payable |
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| 2,265 |
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| 2,201 |
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Due to related party |
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| 5,243 |
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| 4,470 |
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Third-party notes payable, net of loan fees of $15,722 and debt discount of $74,589 |
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| 213,289 |
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| 45,617 |
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Total current liabilities |
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| 269,151 |
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|
| 98,541 |
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TOTAL LIABILITIES |
| $ | 269,151 |
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| $ | 98,541 |
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STOCKHOLDERS’ EQUITY |
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Common stock, $0.001 par value, 325,000,000 shares authorized, 171,950,000 and 164,925,000 shares issued and outstanding at March 31, 2021, and December 31, 2020, respectively |
| $ | 171,950 |
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| $ | 164,925 |
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Stockholder receivable |
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| (1,000 | ) |
|
| (1,000 | ) |
Additional paid-in capital |
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| 906,865 |
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| 703,353 |
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Retained earnings (accumulated deficit) |
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| (1,018,114 | ) |
|
| (839,669 | ) |
Total stockholders’ equity |
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| 59,701 |
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|
| 27,609 |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
| $ | 328,852 |
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| $ | 126,150 |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
3 |
Table of Contents |
DIGITAL DEVELOPMENT PARTNERS, INC.
Consolidated Statements of Operations
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| For the Three Months |
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| Ended March 31, |
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| 2021 |
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| 2020 |
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Sales |
| $ | 2,207 |
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| $ | 5,903 |
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Cost of goods sold |
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| 1,521 |
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| 3,932 |
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Gross profit (loss) |
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| 686 |
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| 1,971 |
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Expense |
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Consulting services |
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| 39,347 |
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| 35,000 |
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Website expense |
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| 3,014 |
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| 878 |
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Legal and professional services |
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| 38,673 |
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| 23,325 |
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Advertising and marketing |
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| 1,366 |
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| --- |
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License fee |
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| 1,334 |
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| --- |
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Rent |
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| 4,800 |
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| --- |
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General and administrative |
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| 94,902 |
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| 11,311 |
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Total expenses |
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| 183,436 |
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|
| 70,514 |
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Net operating loss |
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| (182,750 | ) |
|
| (68,543 | ) |
Other expense |
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Amortization |
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| (15,973 | ) |
|
| --- |
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Interest expense |
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| (8,764 | ) |
|
| (11 | ) |
Depreciation expense |
|
| (746 | ) |
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| --- |
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Total other income (expense) |
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| (25,483 | ) |
|
| (11 | ) |
Profit (loss) before taxes |
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| (208,233 | ) |
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| (68,554 | ) |
Income tax expense |
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| --- |
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| --- |
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Net profit (loss) |
| $ | (208,233 | ) |
| $ | (68,554 | ) |
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Net profit (loss) per common share |
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Basic |
| $ | 0.00 |
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| $ | 0.00 |
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Diluted |
| $ | 0.00 |
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| $ | 0.00 |
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Weighted average number of common shares outstanding: |
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Basic |
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| 168,305,277 |
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| 150,013,186 |
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Diluted |
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| 184,632,802 |
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| 150,013,186 |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
4 |
Table of Contents |
DIGITAL DEVELOPMENT PARTNERS, INC.
Consolidated Statement of Changes in Stockholders’ Equity (Deficit)
For the Three Months Ended March 31, 2021 and 2020 (unaudited)
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| Common Stock |
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| Stockholder |
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| Additional Paid-in |
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| Retained Earnings (Accumulated |
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| Shares |
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| Amount |
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| Receivable |
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| Capital |
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| Deficit) |
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| Total |
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Balance, December 31, 2020 |
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| 164,925,000 |
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| 164,925 |
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|
| (1,000 | ) |
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| 703,353 |
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| (839,669 | ) |
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| 27,609 |
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Effect of adoption of ASU 2020-06 |
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| --- |
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| --- |
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|
| --- |
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| (56,343 | ) |
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| 29,788 |
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| (26,555 | ) |
Stock issued for cash |
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| 4,875,000 |
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| 4,875 |
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| --- |
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| 190,125 |
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| --- |
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| 195,000 |
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Stock issued for services |
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| 150,000 |
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| 150 |
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| --- |
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| 6,730 |
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| --- |
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| 6,880 |
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Stock issued for commitment fee |
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| 2,000,000 |
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| 2,000 |
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| --- |
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|
| 63,000 |
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| --- |
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|
| 65,000 |
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Net loss |
|
| --- |
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|
| --- |
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|
| --- |
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|
| --- |
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| (208,233 | ) |
|
| (208,233 | ) |
Balance, March 31, 2021 |
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| 171,950,000 |
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| $ | 171,950 |
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| $ | (1,000 | ) |
| $ | 906,865 |
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| $ | (1,018,114 | ) |
| $ | 59,701 |
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Balance, December 31, 2019 |
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| 85,970,665 |
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| $ | 85,971 |
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| $ | --- |
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| $ | 7,488,946 |
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| $ | (8,715,712 | ) |
| $ | (1,140,795 | ) |
Cancellation of stock |
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| (79,265,000 | ) |
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| (79,265 | ) |
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| --- |
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| 79,265 |
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| --- |
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| --- |
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Stock issued for debt cancellation |
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| 23,294,335 |
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| 23,294 |
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| --- |
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| 1,109,803 |
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| --- |
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| 1,133,097 |
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Effect of issuance related to acquisition of Black Bird Potentials Inc. |
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| 120,000,000 |
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| 120,000 |
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|
| (1,000 | ) |
|
| (4,055 | ) |
|
| --- |
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|
| 114,945 |
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Inventory contributed to additional paid-in capital by related party |
|
| --- |
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|
| --- |
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|
| --- |
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|
| 399 |
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| --- |
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| 399 |
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Stock issued for services |
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| 100,000 |
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| 100 |
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| --- |
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| 7,900 |
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|
| --- |
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|
| 8,000 |
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Net loss |
|
| --- |
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|
| --- |
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|
| --- |
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|
| --- |
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| (68,554 | ) |
|
| (68,554 | ) |
Balance, March 31, 2020 |
|
| 150,100,000 |
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| $ | 150,100 |
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| $ | (1,000 | ) |
| $ | 8,682,258 |
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| $ | (8,784,266 | ) |
| $ | 47,092 |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
5 |
Table of Contents |
DIGITAL DEVELOPMENT PARTNERS, INC.
Consolidated Statements of Cash Flows
(unaudited)
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| For the Three Months |
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| Ended March 31, |
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| 2021 |
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| 2020 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net loss |
| $ | (208,233 | ) |
| $ | (68,554 | ) |
Adjustments to reconcile net loss to net cash used for operating activities: |
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Stock issued for services |
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| 6,880 |
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|
| 8,000 |
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Amortization |
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| 15,973 |
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|
| --- |
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Accumulated depreciation |
|
| 746 |
|
|
| --- |
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Debt amortization |
|
| 8,700 |
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|
| --- |
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Prepaid consulting fees |
|
| 4,500 |
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|
| --- |
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Accrued interest |
|
| 64 |
|
|
| 11 |
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Inventory |
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| (9,987 | ) |
|
| (8,671 | ) |
Accrued expenses |
|
| 2,101 |
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|
| 2,986 |
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Net cash used for operating activities |
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| (179,256 | ) |
|
| (66,228 | ) |
CASH FLOWS FROM INVESTING ACTIVITIES |
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Asset purchase |
|
| (180,000 | ) |
|
| --- |
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Purchase of furniture and equipment |
|
| (5,703 | ) |
|
| --- |
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Net cash used for investing activities |
|
| (185,703 | ) |
|
| --- |
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CASH FLOWS FROM FINANCING ACTIVITIES |
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|
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Loans payable - related party |
|
| --- |
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|
| 3,000 |
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Financing fees paid |
|
| (13,000 | ) |
|
| --- |
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Loans payable - third parties |
|
| 205,000 |
|
|
| --- |
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Proceeds from issuance of common stock |
|
| 195,000 |
|
|
| --- |
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Net advances from related party |
|
| 773 |
|
|
| --- |
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Net cash provided by financing activities |
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| 387,773 |
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|
| 3,000 |
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Net increase (decrease) in cash and cash equivalents |
|
| 22,814 |
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|
| (63,228 | ) |
Cash and cash equivalents at beginning of period |
|
| 52,974 |
|
|
| 85,969 |
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Cash and cash equivalents at end of period |
| $ | 75,788 |
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| $ | 22,741 |
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NON-CASH INVESTING AND FINANCING ACTIVITIES: |
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Common stock issued to repay related party debt |
| $ | --- |
|
| $ | 1,133,067 |
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Common stock issued for commitment fee |
| $ | 65,000 |
|
| $ | --- |
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
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|
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Income taxes paid |
| $ | --- |
|
| $ | --- |
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Interest paid |
| $ | --- |
|
| $ | 3,000 |
|
The accompanying notes are an integral part of these unaudited consolidated financial statements.
6 |
Table of Contents |
DIGITAL DEVELOPMENT PARTNERS, INC.
Notes to Unaudited Consolidated Financial Statements
March 31, 2021
1. BASIS OF PRESENTATION AND NATURE OF OPERATIONS
Basis of Presentation
The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information required by GAAP for complete annual financial statement presentation.
These unaudited interim consolidated financial statements, as of March 31, 2021, and for the three months ended March 31, 2021 and 2020, reflect all adjustments consisting of normal recurring adjustments, which, in the opinion of management, are necessary to fairly present the Company’s financial position and the results of its operations for the periods presented, in accordance with the accounting principles generally accepted in the United States of America. Operating results for the three months ended March 31, 2021, are not necessarily indicative of the results to be expected for other interim periods or for the full year ending December 31, 2021. These unaudited interim financial statements should be read in conjunction with the financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the Securities Exchange Commission.
Nature of Operations
Digital Development Partners, Inc. (the “Company”) was incorporated in the State of Nevada in 2006 under the name “Cyprium Resources Inc.”, which was changed to its current name in August 2009. Through 2014, the Company was involved, first, in the mining industry and, then, in the communications industry.
From 2015 until the January 1, 2020 acquisition of Black Bird Potentials Inc., a Wyoming corporation (“Black Bird”), the Company was a “shell company,” as defined in Rule 12b-2 of the Securities Exchange Act of 1934. The Company’s Board of Directors has adopted the business plan of Black Bird and the Company’s ongoing operations now include those of Black Bird. References to “the Company” include Black Bird, as well as its other wholly-owned subsidiaries: Big Sky American Dist., LLC, a Montana limited liability company, and Black Bird Hemp Manager, LLC, a Montana limited liability company.
The Company is the exclusive worldwide manufacturer and distributor for MiteXstreamTM, an EPA-certified plant-based biopesticide effective in the eradication of spider mites, a pest that destroys crops, especially cannabis, hops, coffee and house plants, as well as molds and mildew.
The Company also manufactures and sells, under its Grizzly Creek NaturalsTM brand name, CBD products, including CBD Oils, gummies and pet treats, and CBD-infused personal care products, as well as hand sanitizer gel and spray products. In addition, Black Bird is a licensed grower of industrial hemp under the Montana Hemp Pilot Program.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN
Going Concern
The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The Company also has a working capital deficit as of March 31, 2021. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The Company’s activities will necessitate significant uses of working capital beyond 2021. Additionally, the Company’s capital requirements will depend on many factors, including the success of the Company’s researching for new markets. The Company plans to continue financing its operations with cash received from financing activities, more specifically from related party loans.
7 |
Table of Contents |
While the Company strongly believes that its capital resources will be sufficient in the near term, there is no assurance that the Company’s activities will generate sufficient revenues to sustain its operations without additional capital or if additional capital is needed, that such funds, if available, will be obtainable on terms satisfactory to the Company. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.
Cash and Cash Equivalents and Restricted Cash
Cash and equivalents include investments with initial maturities of three months or less. The Company had no cash equivalents as of March 31, 2021, and December 31, 2020.
Income Taxes
The Company accounts for income taxes utilizing ASC 740, “Income Taxes”. ASC 740 requires the measurement of deferred tax assets for deductible temporary differences and operating loss carry forwards, and of deferred tax liabilities for taxable temporary differences. Measurement of current and deferred tax liabilities and assets is based on provisions of enacted tax law. The effects of future changes in tax laws or rates are not included in the measurement. The Company recognizes the amount of taxes payable or refundable for the current year and recognizes deferred tax liabilities and assets for the expected future tax consequences of events and transactions that have been recognized in the Company’s financial statements or tax returns. The Company currently has substantial net operating loss carry forwards. The Company has recorded a 100% valuation allowance against net deferred tax assets due to uncertainty of their ultimate realization. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
Basic and Diluted Net Loss Per Share
Net loss per share is calculated in accordance with ASC 260, Earnings per Share, for the period presented. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There are potential dilutive securities as of March 31, 2021; there were no potential dilutive securities as of March 31, 2020.
Related Parties
A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.
8 |
Table of Contents |
Recent Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06-Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40)-Accounting For Convertible Instruments and Contracts in an Entity's Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020. The Company has early adopted ASU 2020-06 for the year beginning January 1, 2021.
Change in Accounting Principle
In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06-Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40)-Accounting For Convertible Instruments and Contracts in an Entity's Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020. The Company has early adopted ASU 2020-06 for the year beginning January 1, 2021.
The Company will adopt the if-converted method for calculating EPS and the modified retrospective method as the transition method. The if-converted method assumes that the conversion of convertible securities occurs at the beginning of the reporting period and the modified retrospective recognizes the cumulative effect of the change as an adjustment to the beginning balance of retained earnings as of the date of adoption. Under the modified-retrospective method, no adjustment should be made to the comparative-period information including EPS.
During the quarter ended March 31, 2021 the cumulative effect of the change on retained earnings is $29,788, additional paid-in-capital of $56,343 and notes payable of $26,555 as reflected in the accompanying financial statements. During the quarter ended March 31, 2021 the effect on EPS would be unchanged after the adoption of ASU 2020-06.
3. ACQUISITION OF BLACK BIRD POTENTIALS INC.
Effective January 1, 2020, the Company consummated a plan and agreement of merger (the “Merger Agreement”) with Black Bird Potentials Inc., a Wyoming corporation (Black Bird), pursuant to which Black Bird became a wholly-owned subsidiary of the Company. Pursuant to the Merger Agreement, the Company issued 120,000,000 shares of its common stock to the shareholders of Black Bird and four persons were added to the Company’s Board of Directors. Pursuant to the Merger Agreement, the Company’s four new directors were issued a total of 100,178,661 shares of Company common stock. Thus, a change in control of the Company occurred in connection with the Merger Agreement.
Due to the effects of the “reverse merger” acquisition of Black Bird occurring effective January 1, 2020, in accordance with ASC 805 Business Combinations, the presentation of the financial statements represents the continuation of Black Bird, the accounting acquirer, except for the legal capital structure. Historical shareholders’ equity of the Company, the accounting acquiree, has been adjusted to reflect the recapitalization. Retained earnings (deficit) of the Black Bird, the accounting acquirer have been carried forward after the acquisition and operations prior to the merger are those of Black Bird, the accounting acquirer. Earnings per share for periods prior to the merger have been adjusted to reflect the recapitalization.
4. COMMON STOCK
Common Stock Issued for Cash
During the three months ended March 31, 2021, the Company sold a total of 4,875,000 shares of its common stock for a total of $195,000, or $.04 per share, in cash, under its ongoing Regulation A Offering.
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Common Stock Issued for Services
In February 2021, the Company issued 2,000,000 shares of its common stock to a third party as a commitment fee, which shares were valued at $0.065 with a 50% discount per share, or $65,000, in the aggregate.
Pursuant to a consulting agreement, in January, February and March 2021, the Company issued a total of 150,000 shares (50,000 shares each month) of its common stock to a third-party consultant, which shares were valued at $0.0406 per share ($2,030, in the aggregate), $0.0534 per share ($2,670, in the aggregate) and $0.0436 per share ($2,180), respectively.
In March 2020, the Company issued 100,000 shares of common stock to two third-party consultants pursuant to a consulting agreement, which shares were valued at $.08 per share, or $8,000, in the aggregate. The term of the consulting agreement expired in September 2020.
Acquisition of Black Bird
Effective January 1, 2020, the Company consummated the Merger Agreement with Black Bird. Pursuant to the Merger Agreement, the Company issued 120,000,000 shares of its common stock to the shareholders of Black Bird and four persons were added to the Company’s Board of Directors. Pursuant to the Merger Agreement, the Company’s four new directors were issued a total of 100,178,661 shares of Company common stock. Thus, a change in control of the Company occurred in connection with the Merger Agreement.
Stock Cancellation Agreement
In conjunction with the Merger Agreement, the Company entered into a cancellation of stock agreement with its former majority shareholder, EFT Holdings, Inc., whereby it cancelled all 79,265,000 shares of common stock then owned by EFT Holdings, Inc.
Debt Forgiveness Agreements
In conjunction with the Merger Agreement, the Company entered into debt forgiveness agreements with related parties, as follows:
• EFT Holdings, Inc.: the Company issued 18,221,906 shares of common stock to its former majority shareholder, EFT Holdings, Inc., in payment of $886,108 of indebtedness, principal and accrued interest.
• EF2T, Inc.: the Company issued 2,240,768 shares of common stock to a related party, EF2T, Inc., in payment of $109,992 of indebtedness, principal and accrued interest.
• Astonia LLC: the Company issued 2,831,661 shares of common stock to a related party, Astonia LLC, in payment of $136,997 of indebtedness, principal and accrued interest.
NOTE 5. NEW MITEXSTREAM AGREEMENT
In February 2021, Black Bird entered into a Manufacturing, Sales and Distribution License Agreement (the “New MiteXstream Agreement”) with a related party, Touchstone Enviro Solutions, Inc., which replaced a prior similar agreement (the “Original MiteXstream Agreement”) and served to expand Black Bird’s rights with respect to MiteXstream, an EPA-registered biopesticide. The New MiteXstream Agreement contains the following important provisions as compared to the Original MiteXstream Agreement:
| New MiteXstream Agreement | Original MiteXstream Agreement | |
Term | December 31, 2080 | Initial terms of 10 years, with one 10-year renewal term | |
Territory | Worldwide Exclusive (1) | United States and Canada | |
Royalty | $10.00 per gallon manufactured | Effective royalty of an estimated $50 per gallon | |
Minimums | 2,500 gallons of concentrate manufactured per year (2) | $20,000 of product per year | |
Sublicensing | Right to sublicense granted | No right to sublicense | |
Trademarks | For no extra consideration, rights granted to use “MiteXstream” and “Harnessing the Power of Water” | For no extra consideration, rights granted to use “MiteXstream” |
(1) (2) | Exclusivity ends and becomes non-exclusive, if the minimum of 2,500 gallons per year is not met. The minimum (2,500 gallons per year) is deemed to have been satisfied through December 31, 2022. |
The disinterested Directors of the Company approved the New MiteXstream Agreement.
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6. ASSET PURCHASE AGREEMENT
In December 2020, a newly-formed subsidiary of the Company, Big Sky American Dist., LLC, a Montana limited liability company (“Big Sky American”), which distributes the Company’s Grizzly Creek Naturals CBD and other products, entered into an asset purchase agreement (the “Big Sky APA”), whereby it purchased certain distribution-related assets associated with approximately 200 retail locations in Western Montana for $200,000 in cash, in February 2021. The purchased assets consisted of $10,000 of furniture and equipment and $190,000 of an intangible asset, a customer list, which is being amortized over 18 months.
7. INTANGIBLE ASSET
The Company has an intangible asset related to the purchase of product distribution assets in the amount of $190,000, which is for a customer list and is being amortized over 18 months. The Company recorded amortization expense in the amount of $10,556 for the period ended March 31, 2021. As of March 31, 2021, the intangible asset net of accumulated amortization is $179,444. Amortization expense for 2021 is estimated to be $105,556.
8. CONVERTIBLE PROMISSORY NOTES
In January 2021, the Company obtained a loan from a third party which netted the Company $52,000 in proceeds. In consideration of such loan, the Company issued a $55,500 face amount convertible promissory note that bears interest at 12% per annum, with principal and interest due in January 2022. The Company has the right to repay such convertible promissory note at a premium ranging from 125% to 145% of the face amount. Such convertible promissory note may be converted into shares of the Company’s common stock at a conversion price equal to the lower of 61% of the market price of the Company’s common stock on the date of issuance of such convertible promissory note and the date of conversion, any time after July 14, 2021.
In February 2021, the Company obtained a loan from a third party which netted us $106,000 in proceeds. In consideration of such loan, the Company issued a $121,000 face amount promissory note, with OID of $15,000, that bears interest at 9% per annum, with principal and interest payable in eight equal monthly payments of $15,125 beginning in August 2021. The Company has the right to repay such promissory note at any time. Should the Company default on such promissory note, it becomes convertible into shares of the Company’s common stock at a conversion price equal to the lesser of the lowest closing bid price of the Company’s commons stock for the trading day immediately preceding either (a) the delivery of a notice of default, (b) the delivery of a notice of conversion resulting from such default or (c) the issue date of such promissory note. In addition, we issued 2,000,000 shares of our common stock to this lender as a commitment fee, which shares were valued at $0.065 with a 50% discount per share, or $65,000, in the aggregate.
In February 2021, the Company obtained a loan from a third party which netted the Company $43,500 in proceeds. In consideration of such loan, the Company issued a $43,500 face amount convertible promissory note that bears interest at 12% per annum, with principal and interest due in January 2022. The Company has the right to repay such convertible promissory note at a premium ranging from 125% to 145% of the face amount. Such convertible promissory note may be converted into shares of the Company’s common stock at a conversion price equal to the lower of 61% of the market price of the Company’s common stock on the date of issuance of such convertible promissory note and the date of conversion, any time after August 17, 2021.
9. STOCKHOLDER RECEIVABLE
At March 31, 2021 and 2020, cash relating to a stockholder receivable of Black Bird for $1,000, which stockholder receivable became a part of the Company’s outstanding common stock history, upon its acquisition of Black Bird. The stockholder receivable relates to 42,885 shares of Company common stock.
10. AMENDMENTS OF ARTICLES OF INCORPORATION
In January 2020, the Company filed a Certificate of Amendment to its Articles of Incorporation to change its corporate name to “Black Bird Potentials Inc.” and submitted such filing to FINRA for approval thereof. FINRA did not approve such filing, due to an extended passage of time from the Company’s initial filing and its being late in filing certain periodic reports.
In February 2021, the Company amended its Articles of Incorporation to increase the number of authorized shares of its common stock to 325,000,000. The Company also amended its Articles of Incorporation subsequent to March 31, 2021. See Note 14. Subsequent Events—Amendment of Articles of Incorporation.
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11. RELATED PARTY TRANSACTIONS
Acquisition of Black Bird
Effective January 1, 2020, the Company consummated the Merger Agreement with Black Bird. Pursuant to the Merger Agreement, the Company issued 120,000,000 shares of its common stock to the shareholders of Black Bird and four persons were added to the Company’s Board of Directors. Pursuant to the Merger Agreement, the Company’s four new directors were issued a total of 100,178,661 shares of Company common stock. Thus, a change in control of the Company occurred in connection with the Merger Agreement.
Stock Cancellation Agreement
In conjunction with the Merger Agreement, the Company entered into a cancellation of stock agreement with its former majority shareholder, EFT Holdings, Inc., whereby it cancelled all 79,265,000 shares of common stock then owned by EFT Holdings, Inc.
Debt Forgiveness Agreements
In conjunction with the Merger Agreement, the Company entered into debt forgiveness agreements with related parties, as follows:
EFT Holdings, Inc.: the Company issued 18,221,906 shares of common stock to its former majority shareholder, EFT Holdings, Inc., in payment of $886,108 of indebtedness, principal and accrued interest.
EF2T, Inc.: the Company issued 2,240,768 shares of common stock to a related party, EF2T, Inc., in payment of $109,992 of indebtedness, principal and accrued interest.
Astonia LLC: the Company issued 2,831,661 shares of common stock to a related party, Astonia LLC, in payment of $136,997 of indebtedness, principal and accrued interest
Advances from Related Parties
Three Months Ended March 31, 2021
During the three months ended March 31, 2021, the Company obtained no advances from related parties.
Three Months Ended March 31, 2020
During the three months ended March 31, 2020, advances of $3,000 were received from Astonia LLC. The amounts due Astonia LLC bear interest at 5% per year and have a maturity of one year. As of March 31, 2021 and 2020, the Company owed Astonia LLC $4,470 and $3,000 in principal, respectively, and $226 and $11 in accrued and unpaid interest, respectively.
12. LOANS PAYABLE - RELATED PARTIES
Three Months Ended March 31, 2021
During the three months ended March 31, 2021, the Company obtained a loan from a related party, EF2T, Inc. As of March 31, 2021, the Company owed EF2T, Inc. $773 in principal and $9 in accrued and unpaid interest.
Three Months Ended March 31, 2020
During the three months ended March 31, 2020, the Company entered into three separate debt forgiveness agreements with related parties:
EFT Holdings, Inc.: the Company issued 18,221,906 shares of common stock to its former majority shareholder, EFT Holdings, Inc., in payment of $886,108 of indebtedness, principal and accrued interest.
EF2T, Inc.: the Company issued 2,240,768 shares of common stock to a related party, EF2T, Inc., in payment of $109,992 of indebtedness, principal and accrued interest.
Astonia LLC: the Company issued 2,831,661 shares of common stock to a related party, Astonia LLC, in payment of $136,997 of indebtedness, principal and accrued interest.
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During the three months ended March 31, 2020, advances of $3,000 were received from Astonia LLC. The amounts due Astonia LLC bear interest at 5% per year and have a maturity of one year. As of March 31, 2020, the Company owed Astonia LLC $11 in accrued and unpaid interest.
13. REGIONAL DEVELOPMENT AND DISTRIBUTION AGREEMENT
In March 2020, Black Bird entered into a regional development and distribution agreement with Northland Partners, LLC (the “Tri-State Distributor”), who will focus on distribution of Black Bird’s products in North Dakota, South Dakota and Minnesota. Tri-State Distributor has the right to distribute Black Bird’s products anywhere in the United States.
14. SUBSEQUENT EVENTS
Convertible Promissory Note
In April 2021, the Company obtained a loan from a third party which netted the Company $68,750 in proceeds. In consideration of such loan, the Company issued a $68,750 face amount convertible promissory note that bears interest at 12% per annum, with principal and interest due in April 2022. The Company has the right to repay such convertible promissory note at a premium ranging from 125% to 145% of the face amount. Such convertible promissory note may be converted into shares of the Company’s common stock at a conversion price equal to the lower of 61% of the market price of the Company’s common stock on the date of issuance of such convertible promissory note and the date of conversion, any time after October 22, 2021.
Amendment of Articles of Incorporation
In April 2021, the Company amended its Articles of Incorporation to change its corporate name to “Black Bird Biotech, Inc.” and submitted such filing to FINRA for approval thereof.
Common Stock Issued for Services
In April 2021, the Company issued 450,000 shares of its common stock to a third party consultant, which shares were valued at $0.038 per share, or $17,100, in the aggregate.
Other
Management has evaluated subsequent events through May 24, 2020.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Effects of COVID-19
As of the date of this Quarterly Report, there remain significant uncertainties regarding the current novel Coronavirus (COVID-19) pandemic, including the scope of health issues, the possible duration of the pandemic and the extent of local and worldwide social, political and economic disruption it may cause in the future.
To date, the COVID-19 pandemic has had a discernable short-term negative impact on the ability of our company to obtain capital needed to accelerate the development of our business.
With respect to our business operations, while our product sales have increased moderately since the initial impact of the COVID-19 pandemic due primarily to our recently introducing hand sanitizer gel and spray products, we believe the COVID-19 pandemic has had a discernable short-term negative impact on our product sales, inasmuch as we and our distributors have been limited in face-to-face sales meetings with respect to our products. We are unable to predict when such limitations will ease.
Overall, our company is not of a size that has required us to implement “company-wide” policies in response to the COVID-19 pandemic. Further, our product manufacturing operations have experienced no negative consequences attributable to the COVID-19 pandemic, inasmuch as these operations involve a limited number of persons. However, as the states continue to re-open, re-close, then re-open their economies, the scope and nature of the impacts of COVID-19 on our company will evolve day-by-day, week-by-week.
The COVID-19 pandemic can be expect to continue to result in regional and local quarantines, labor stoppages and shortages, changes in consumer purchasing patterns, mandatory or elective shut-downs of retail locations, disruptions to supply chains, including the inability of our suppliers to deliver materials on a timely basis, or at all, severe market volatility, liquidity disruptions and overall economic instability. It can be further expected that the COVID-19 pandemic will continue to have unpredictably adverse impacts on our business, financial condition and results of operations. This situation is changing rapidly and additional impacts may arise of which we are not currently aware.
We intend to continue to assess the evolving impact of the COVID-19 pandemic, not only on our company, but on the operations of our customers, consumers and supply chains, and intend to make adjustments accordingly. However, the extent to which the COVID-19 pandemic may impact our business, financial condition and results of operations will depend on how the COVID-19 pandemic and its impact continues to impact the United States and, to a lesser extent, the rest of the world, all of which remains highly uncertain and cannot be predicted at this time.
In light of these uncertainties, for purposes of the discussion below, except where otherwise indicated, the descriptions of our business, our strategies, our risk factors and any other forward-looking statements, including regarding us, our business and the market generally, do not reflect the potential impact of the COVID-19 pandemic or our responses thereto.
Basis of Presentation
Our company was a “shell company” from 2014 through all of 2019. Effective January 1, 2020, we acquired Black Bird Potentials Inc. (“Black Bird”), in a transaction accounted for as a “reverse merger”. This Management’s Discussion and Analysis of Financial Condition and Results of Operations section includes financial results of Digital Development Partners, Inc., including its subsidiaries, Black Bird, Big Sky American Dist., LLC and Black Bird Hemp Manager, LLC.
Cautionary Statement
The following discussion and analysis should be read in conjunction with our financial statements and related notes, beginning on page F-1 of this Quarterly Report.
Our actual results may differ materially from those anticipated in the following discussion, as a result of a variety of risks and uncertainties. We assume no obligation to update any of the forward-looking statements included herein.
Implications of Being an Emerging Growth Company
As a company with less than $1.07 billion in revenue during our last fiscal year, we qualify as an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:
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· | Only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure. |
· | Reduced disclosure about our executive compensation arrangements. |
· | Not having to obtain non-binding advisory votes on executive compensation or golden parachute arrangements. |
· | Exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting. |
We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.07 billion in annual revenue, we have more than $700 million in market value of our stock held by non-affiliates, or we issue more than $1 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all of these reduced burdens. We have taken advantage of these reduced reporting burdens herein, and the information that we provide may be different than what you might get from other public companies in which you hold stock.
Critical Accounting Policies
In General. Our accounting policies are discussed in detail in the footnotes to our financial statements beginning on page F-1. We consider our critical accounting policies related to revenue recognition, inventory and fair value of financial instruments.
Change in Accounting Principle. In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06-Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40)-Accounting For Convertible Instruments and Contracts in an Entity's Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020. The Company has early adopted ASU 2020-06 for the year beginning January 1, 2021.
Overview and Outlook
With the acquisition of Black Bird effective January 1, 2020, Black Bird’s operations became the operations of our company.
Black Bird is the exclusive worldwide manufacturer and distributor of MiteXstream, an EPA-registered plant-based biopesticide (EPA Reg. No. 95366-1) effective in the eradication of spider mites, a pest that destroys crops, especially cannabis, hops, coffee, and house plants, as well as molds and mildew. Through Black Bird, we manufacture and sell CBD products, including CBD Oils, gummies and pet treats, and CBD-infused personal care products, as well as hand sanitizer gel and spray products, under the Grizzly Creek Naturals brand name. In addition, Black Bird is a licensed grower of industrial hemp under the Montana Hemp Pilot Program and has established “Black Bird American Hemp” as the brand name under which these efforts will be conducted.
Principal Factors Affecting Our Financial Performance
Following our acquisition of Black Bird, our future operating results can be expected to be primarily affected by the following factors:
| · | our ability to maintain the value proposition of MiteXstream, once certified as a biopesticide, vis-a-vis other available pest control products; and |
| · | our ability to attract and retain customers for our Grizzly Creek Naturals, and other, products; |
| · | our ability to produce and sell hemp products; |
| · | our ability to contain our operating costs. |
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Results of Operations
Three Months Ended March 31, 2021 (“Interim 2021”) and 2020 (“Interim 2020”). During Interim 2021, our business operations generated $2,207 (unaudited) in revenues from sales of our Grizzly Creek Naturals products with a cost of goods sold of $1,521 (unaudited), resulting in a gross profit of $686 (unaudited). During Interim 2020, our business operations generated $5,903 (unaudited) in revenues from sales of our Grizzly Creek Naturals products with a cost of goods sold of $3,932 (unaudited), resulting in a gross profit of $1,971 (unaudited).
During Interim 2021, we incurred operating expenses of $183,463 (unaudited), which were comprised of $39,347 (unaudited) in consulting services ($6,880 (unaudited) of which was paid by the issuance of common stock), $3,014 (unaudited) in website expenses, $38,673 (unaudited) in legal and professional services, $1,334 (unaudited) for product license, $4,800 (unaudited) in rent, $1,366 (unaudited) in advertising and marketing expense and $94,902 (unaudited) in general and administrative expense, resulting in a net loss of $(208,233) (unaudited).
During Interim 2020, we incurred operating expenses of $70,514 (unaudited), which were comprised of $35,000 (unaudited) in consulting services ($8,000 (unaudited) of which was paid by the issuance of common stock), $878 (unaudited) in website expenses, $23,325 (unaudited) in legal and professional services and $11,311 (unaudited) in general and administrative expense, resulting in a net loss of $(68,554) (unaudited).
We expect that our revenues will increase from quarter to quarter, beginning with the second quarter of 2021.This expected increase in revenues is based on the commencement of sales of MiteXstream during the second quarter of 2021, as well as the expected continued growth of sales of Grizzly Creek Naturals CBD and other products by Big Sky American. Nevertheless, we expect to incur operating losses through at least September 30, 2021.
Further, because of our current lack of capital and the current lack of brand name awareness of MiteXstream, Grizzly Creek Naturals and Black Bird American Hemp, we cannot predict the levels of our future revenues. However, based on informal testing done by, and discussions with, cannabis (marijuana and industrial hemp) cultivation industry participants, our management believes that MiteXstream will become the most dynamic, fastest growing part of our business.
Plan of Operation
MiteXstream. Pursuant to our agreement with Touchstone Enviro Solutions, Inc. (“Touchstone”), a company owned by three of our directors, Fabian G. Deneault, Eric Newlan and L. A. Newlan, Jr., Black Bird possesses the exclusive rights, even as to Touchstone, to manufacture, sell and distribute MiteXstream. The exclusivity granted would be reduced to a status of non-exclusivity, should be fail to manufacture at least 2,500 gallons of concentrate in any year during the term of the MiteXstream Agreement; provided, however, that such minimum required is deemed to have been satisfied through December 31, 2022. We are required to pay Touchstone a royalty of $10 per gallon of MiteXstream manufactured by us or by any sublicensee of ours. For no further consideration, we were granted the rights to use the “MiteXstream” trademark and the “Harnessing the Power of Water” trademark.
Based on informal testing done by, and discussions with, cannabis cultivation industry participants, our management believes that MiteXstream will become the most dynamic, fastest growing part of our business. However, no prediction can be made in this regard.
Effective December 16, 2020, MiteXstream was approved as a biopesticide by the U.S. Environmental Protection Agency (EPA Reg. No. 95366-1). We have begun to seek approval for use of MiteXstream in the various states; the state approval process takes between one and eight months, variously. To date, MiteXstream is approved for sale in Nevada, Colorado and Montatna. Until we obtain the required pesticide certification in a state, we will not sell any MiteXstream. In addition, we intend to seek approval of MiteXstream in countries around the world, although no specific time for such actions has been set.
We have begun to market MiteXstream through channels known to our management. However, it is our intention to secure a small number of established distributors through which to sell MiteXstream in the United States. There is no assurance we will be successful in these efforts.
In March 2021, we entered into a distribution agreement with IFC Fulfillment Company (“IFC”), a Los Angeles-based export firm, whereby IFC was appointed the exclusive distributor for MiteXstream in China, Hong Kong and Taiwan. Our Director, Jack Jie Qin, a Company director, facilitated the signing of the IFC Agreement. As of the date of this Quarterly Report, IFC has not made a sales of MiteXstream.
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CBD Products. We have created “Grizzly Creek Naturals” as the brand name for our CBD-related products, which are manufactured by our company using CBD purchased from third parties. Once we begin producing commercial quantities of industrial hemp and extracting the CBD therefrom, we will begin to use all of our own CBD and supplement it with CBD from third parties, as necessary.
We currently manufacture and sell have expanded our line of Grizzly Creek Naturals CBD products, including CBD Oils and Gummies, CBD Topicals and CBD dog treats. We also manufacture and sell hand sanitizer gel and spray products (without CBD) under our Grizzly Creek Naturals brand to distributors, directly to retail customers and directly to consumers through our website.
Distribution.
In-House Distribution. Since it began to manufacture and sell its CBD products in mid-2019, Black Bird as self-distributed its products. In December 2020, these distribution efforts we formalized with the formation of Big Sky American. Big Sky American currently distributes the Grizzly Creek Naturals products to approximately 50 retail locations in Western Montana. In February 2021, Big Sky American purchased certain distribution-related assets associated with approximately 200 retail locations in Western Montana for $200,000 in cash.
Website. We sell our products to consumers through our website: www.grizzlycreeknaturals.com.
Third-Party Distributors. Since the third quarter of 2019, Black Bird has entered into separate distribution agreements with four distributors. The only one of these distributors who has significantly impacted our sales is Raghorn Wholesale (Raghorn). Raghorn has become our largest customer. Raghorn does not distribute our Grizzly Creek Naturals CBD products.
Hemp-Related Activities. We have formed a division of our company that focuses on hemp-related business opportunities under the “Black Bird American Hemp” brand name. Black Bird American Hemp currently seeks to develop industrial hemp processing operations in the State of Montana. In this regard, while Black Bird is a licensed hemp grower in Montana under the Montana Hemp Pilot Program, it is not contemplated that Black Bird will, itself, become a significant grower of hemp.
Proposed Hemp Processing Facility. Should we obtain a maximum offering hereunder, we intend to establish a small hemp processing facility in Montana capable of processing approximately 1,000 acres of hemp on an annual basis. There is no assurance that we will ever possess sufficient funds with which to establish the proposed hemp processing facility.
Products. Should the proposed hemp processing facility commence operations, Black Bird American Hemp intends to sell, for its own account or for processing customers’ accounts, the products derived from the proposed hemp processing facility’s operations, including, without limitation, bast, hurd, hemp oil, hemp seeds and hemp hearts. The potential applications and, thus, target markets for Black Bird American Hemp’s products include bast, hurd and hemp flower.
Sales and Distribution. Black Bird American Hemp will market hemp products directly to end-users of such products and will seek distributors who are able to demonstrate an ability to develop robust sales of Black Bird American Hemp’s products.
Financial Condition, Liquidity and Capital Resources
Capital Sources.
Third-Party Loans. In April 2020, our company obtained a total of $50,000 in loans from two third parties ($25,000 from each). In consideration of each loan, we issued a $25,000 face amount convertible promissory note that bears interest at 10% per annum, with principal and interest due in January 2021. Each such convertible promissory note may be converted into shares of our common stock at the rate of one share for each $.001 of debt converted anytime after August 30, 2020. In November 2020, one of such $25,000 face amount convertible promissory notes, including $3,000 in accrued interest, was paid in full. The remaining $25,000 loan is past due, as of the date of this Quarterly Report.
In December 2020, our company obtained a loan from a third party which netted us $50,000 in proceeds. In consideration of such loan, we issued a $58,600 face amount convertible promissory note, with OID of $4,100, that bears interest at 10% per annum, with principal and interest due in September 2021. We have the right to repay such convertible promissory note at a premium ranging from 120% to 145% of the face amount. Such convertible promissory note may be converted into shares of our common stock at a conversion price equal to the lower of 60% of the market price of our common stock on the date of issuance of such convertible promissory note and the date of conversion, any time after June 15, 2021.
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In January 2021, our company obtained a loan from a third party which netted us $52,000 in proceeds. In consideration of such loan, we issued a $55,500 face amount convertible promissory note that bears interest at 12% per annum, with principal and interest due in January 2022. We have the right to repay such convertible promissory note at a premium ranging from 125% to 145% of the face amount. Such convertible promissory note may be converted into shares of our common stock at a conversion price equal to the lower of 61% of the market price of our common stock on the date of issuance of such convertible promissory note and the date of conversion, any time after July 14, 2021.
In February 2021, our company obtained a loan from a third party which netted us $106,000 in proceeds. In consideration of such loan, we issued a $121,000.00 face amount promissory note, with OID of $15,000, that bears interest at 9% per annum, with principal and interest payable in eight equal monthly payments of $15,125 beginning in August 2021. We have the right to repay such promissory note at any time. Should we default on such promissory note, it becomes convertible into shares of our common stock at a conversion price equal to the lesser of the lowest closing bid price of our commons stock for the trading day immediately preceding either (a) the delivery of a notice of default, (b) the delivery of a notice of conversion resulting from such default or (c) the issue date of such promissory note.
In February 2021, our company obtained a loan from a third party which netted us $43,500 in proceeds. In consideration of such loan, we issued a $43,500 face amount convertible promissory note that bears interest at 12% per annum, with principal and interest due in February 2022. We have the right to repay such convertible promissory note at a premium ranging from 125% to 145% of the face amount. Such convertible promissory note may be converted into shares of our common stock at a conversion price equal to the lower of 61% of the market price of our common stock on the date of issuance of such convertible promissory note and the date of conversion, any time after August 17, 2021.
In April 2021, our company obtained a loan from a third party which netted us $68,750 in proceeds. In consideration of such loan, we issued a $68,750 face amount convertible promissory note that bears interest at 12% per annum, with principal and interest due in April 2022. We have the right to repay such convertible promissory note at a premium ranging from 125% to 145% of the face amount. Such convertible promissory note may be converted into shares of our common stock at a conversion price equal to the lower of 61% of the market price of our common stock on the date of issuance of such convertible promissory note and the date of conversion, any time after October 22, 2021.
Regulation A Offering. In May 2020, our company filed an Offering Statement on Form 1-A (File No. 254-11215) (the “Regulation A Offering”) with SEC with respect to 70,000,000 shares of common stock, as amended, which was qualified by the SEC on August 4, 2020. For the three months ended March 31, 2021, we sold a total of 4,875,000 shares of common stock for a total of $195,000 in cash, under the Regulation A Offering.There is no assurance that we will further derive any funds pursuant to the Regulation A Offering.
March 31, 2021. At March 31, 2021, our company had $75,788 (unaudited) in cash and a working capital deficit of $134,700 (unaudited), compared to $52,974 in cash and a working capital deficit of $7,609 at December 31, 2020. The change in our working capital position from December 31, 2020, to March 31, 2021, is attributable primarily to our applying $200,000 in available cash to the purchase of distribution assets in February 2021.
Our company’s current cash position of approximately $50,000 is adequate for our company to maintain its present level of operations through the remainder 2021. However, we must obtain additional capital from third parties to implement our full business plans. There is no assurance that we will be successful in obtaining such additional capital.
Inflation
We do not expect that inflation will significantly affect our results of operations.
Seasonality
As sales of MiteXstream begin during the second quarter of 2021, we expect that our operating results will be impacted by the seasonality of farming operations. However, we are currently unable to predict the level to which such seasonality will impact our business.
Off Balance Sheet Arrangements
As of March 31, 2021, and December 31, 2020, there were no off-balance sheet arrangements. We have entered into operating leases for two facilities, as follows:
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Table of Contents |
Address |
| Description |
| Use |
| Yearly Rent |
|
| Expiration Date | ||
3505 Yucca Drive Suite 115 Flower Mound, TX 75028 |
| Corporate Office (160 sq. ft.) |
| Administrative |
| $ | 7,200 |
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| March 2022 | |
60600 US Highway 93 Ronan, Montana 59864 |
| Warehouse (1,000 sq. ft.) |
| Manufacturing |
| $ | 18,000 |
|
| December 2025 |
Contractual Obligations
To date, we have entered into a single long-term lease obligation that require us to make monthly payments of $1,500 through 2025.
Capital Expenditures
We made capital expenditures of $206,000 during the three months ended March 31, 2021, which included the purchase of distribution assets ($200,000) used by Big Sky American and the purchase of other distribution-related assets. Without obtaining additional capital, we will not be able to make any capital expenditures.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. Management is responsible for establishing and maintaining adequate disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in its reports filed pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely and reliable financial reporting and the preparation of financial statements in accordance with accounting principles generally accepted in the United States of America.
As of the quarter ended March 31, 2021, our principal executive officer and principal financial officer completed an assessment of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e), to determine the existence of any material weaknesses or significant deficiencies under the Exchange Act. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the Company's financial reporting.
Based on that evaluation, we concluded that our disclosure controls and procedures over financial reporting were not effective as of March 31, 2021.
Changes in Internal Control Over Financial Reporting. There have been no changes in our internal control over financial reporting during the quarter ended March 31, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Table of Contents |
PART II—OTHER INFORMATION
Item 1. Legal Proceedings
We have no pending legal or administrative proceedings.
Item 1A. Risk Factors
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended March 31, 2021, we issued a total of 4,875,000 shares of common stock under our ongoing Regulation A offering for a total of $195,000 in cash. These funds were used to purchase distribution assets.
Also during the three months ended March 31, 2021: (a) we issued a total of 150,000 shares of our common stock, 50,000 shares in each of January, February and March, to a third-party consultant, Leonard Tucker, LLC, which shares were valued at $0.0406 per share ($2,030, in the aggregate), $0.0534 per share ($2,670, in the aggregate) and $0.0436 per share ($2,180), respectively; and (b) we issued 2,000,000 shares of our common stock to a third party, SE Holdings, LLC, as a commitment fee, which shares were valued at $0.065 with a 50% discount per share, or $65,000, in the aggregate.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
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Item 6. Exhibits
Exhibit | Description | |
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101.INS |
| XBRL Instance Document |
101.SCH XBRL | Taxonomy Extension Schema Document | |
101.CAL XBRL | Taxonomy Extension Calculation Linkbase Document | |
101.DEF XBRL | Taxonomy Extension Definitions Linkbase Document | |
101.LAB XBRL | Taxonomy Extension Label Linkbase Document | |
101.PRE XBRL | Taxonomy Extension Presentation Linkbase Document |
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Table of Contents |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DIGITAL DEVELOPMENT PARTNERS, INC. | |||
Dated: May 24, 2021 | By: | /s/ FABIAN G. DENEAULT | |
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| Fabian G. Deneault | |
President (Principal Executive Officer) |
22 |
EXHIBIT 31.1
CERTIFICATION
I, Fabian G. Deneault, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of Digital Development Partners, Inc. for the fiscal period ended March 31, 2021. |
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2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
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4. | The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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| (c) | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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| (d) | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
5. | The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize, and report financial information; and |
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| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
Date: May 24, 2021.
By: | /s/ FABIAN G. DENEAULT | |
| Fabian G. Deneault | |
President |
EXHIBIT 31.2
I, William E. Sluss, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of Digital Development Partners, Inc. for the fiscal period ended March 31, 2021. |
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2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
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4. | The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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| (c) | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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| (d) | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
5. | The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize, and report financial information; and |
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| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
Date: May 24, 2021.
By: | /s/ WILLIAM E. SLUSS | |
| William E. Sluss | |
Chief Financial Officer |
EXHIBIT 32.1
CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Fabian G. Deneault, certify, as of the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Digital Development Partners, Inc. on Form 10-Q for the period ended March 31, 2021, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Digital Development Partners, Inc. at the dates and for the periods indicated.
Date: May 24, 2021.
By: | /s/ FABIAN G. DENEAULT | |
| Fabian G. Deneault | |
President |
I, William E. Sluss, certify, as of the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Digital Development Partners, Inc. on Form 10-Q for the period ended March 31, 2021, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Digital Development Partners, Inc. at the dates and for the periods indicated.
Date: May 24, 2021.
By: | /s/ WILLIAM E. SLUSS | |
| William E. Sluss | |
Chief Financial Officer | ||
A signed original of this written statement required by Section 906 has been provided to Digital Development Partners, Inc. and will be retained by Digital Development Partners, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Cover - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
May 21, 2021 |
|
Cover [Abstract] | ||
Entity Registrant Name | Digital Development Partners, Inc. | |
Entity Central Index Key | 0001409999 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Mar. 31, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 | |
Entity Ex Transition Period | false | |
Entity Common Stock Shares Outstanding | 172,400,000 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets (Parenthetical) - USD ($) |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Current liabilities | ||
Third-party notes payable, net of loan fees | $ 15,722 | |
Third-party notes payable, debt discount | $ 74,589 | |
STOCKHOLDERS' EQUITY | ||
Common Stock, Shares Par Value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 325,000,000 | 325,000,000 |
Common Stock, Shares, Issued | 171,950,000 | 164,925,000 |
Common Stock, Shares, Outstanding | 171,950,000 | 164,925,000 |
Consolidated Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | |
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Mar. 31, 2021 |
Mar. 31, 2020 |
|
Consolidated Statements of Operations (Unaudited) | ||
Sales | $ 2,207 | $ 5,903 |
Cost of goods sold | 1,521 | 3,932 |
Gross profit (loss) | 686 | 1,971 |
Expense | ||
Consulting services | 39,347 | 35,000 |
Website expense | 3,014 | 878 |
Legal and professional services | 38,673 | 23,325 |
Advertising and marketing | 1,366 | 0 |
License fee | 1,334 | 0 |
Rent | 4,800 | 0 |
General and administrative | 94,902 | 11,311 |
Total expenses | 183,436 | 70,514 |
Net operating loss | (182,750) | (68,543) |
Other expense | ||
Amortization | (15,973) | 0 |
Interest expense | (8,764) | (11) |
Depreciation expense | (746) | 0 |
Total other income (expense) | (25,483) | (11) |
Profit (loss) before taxes | (208,233) | (68,554) |
Income tax expense | 0 | 0 |
Net profit (loss) | $ (208,233) | $ (68,554) |
Net profit (loss) per common share | ||
Basic | $ 0.00 | $ 0.00 |
Diluted | $ 0.00 | $ 0.00 |
Weighted average number of common shares outstanding: | ||
Basic | 168,305,277 | 150,013,186 |
Diluted | 184,632,802 | 150,013,186 |
BASIS OF PRESENTATION AND NATURE OF OPERATIONS |
3 Months Ended |
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Mar. 31, 2021 | |
BASIS OF PRESENTATION AND NATURE OF OPERATIONS | |
1. BASIS OF PRESENTATION AND NATURE OF OPERATIONS | Basis of Presentation
The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information required by GAAP for complete annual financial statement presentation.
These unaudited interim consolidated financial statements, as of March 31, 2021, and for the three months ended March 31, 2021 and 2020, reflect all adjustments consisting of normal recurring adjustments, which, in the opinion of management, are necessary to fairly present the Company’s financial position and the results of its operations for the periods presented, in accordance with the accounting principles generally accepted in the United States of America. Operating results for the three months ended March 31, 2021, are not necessarily indicative of the results to be expected for other interim periods or for the full year ending December 31, 2021. These unaudited interim financial statements should be read in conjunction with the financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the Securities Exchange Commission.
Nature of Operations
Digital Development Partners, Inc. (the “Company”) was incorporated in the State of Nevada in 2006 under the name “Cyprium Resources Inc.”, which was changed to its current name in August 2009. Through 2014, the Company was involved, first, in the mining industry and, then, in the communications industry.
From 2015 until the January 1, 2020 acquisition of Black Bird Potentials Inc., a Wyoming corporation (“Black Bird”), the Company was a “shell company,” as defined in Rule 12b-2 of the Securities Exchange Act of 1934. The Company’s Board of Directors has adopted the business plan of Black Bird and the Company’s ongoing operations now include those of Black Bird. References to “the Company” include Black Bird, as well as its other wholly-owned subsidiaries: Big Sky American Dist., LLC, a Montana limited liability company, and Black Bird Hemp Manager, LLC, a Montana limited liability company.
The Company is the exclusive worldwide manufacturer and distributor for MiteXstreamTM, an EPA-certified plant-based biopesticide effective in the eradication of spider mites, a pest that destroys crops, especially cannabis, hops, coffee and house plants, as well as molds and mildew.
The Company also manufactures and sells, under its Grizzly Creek NaturalsTM brand name, CBD products, including CBD Oils, gummies and pet treats, and CBD-infused personal care products, as well as hand sanitizer gel and spray products. In addition, Black Bird is a licensed grower of industrial hemp under the Montana Hemp Pilot Program. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN |
3 Months Ended |
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Mar. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN | |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN | Going Concern
The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The Company also has a working capital deficit as of March 31, 2021. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The Company’s activities will necessitate significant uses of working capital beyond 2021. Additionally, the Company’s capital requirements will depend on many factors, including the success of the Company’s researching for new markets. The Company plans to continue financing its operations with cash received from financing activities, more specifically from related party loans.
While the Company strongly believes that its capital resources will be sufficient in the near term, there is no assurance that the Company’s activities will generate sufficient revenues to sustain its operations without additional capital or if additional capital is needed, that such funds, if available, will be obtainable on terms satisfactory to the Company. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.
Cash and Cash Equivalents and Restricted Cash
Cash and equivalents include investments with initial maturities of three months or less. The Company had no cash equivalents as of March 31, 2021, and December 31, 2020.
Income Taxes
The Company accounts for income taxes utilizing ASC 740, “Income Taxes”. ASC 740 requires the measurement of deferred tax assets for deductible temporary differences and operating loss carry forwards, and of deferred tax liabilities for taxable temporary differences. Measurement of current and deferred tax liabilities and assets is based on provisions of enacted tax law. The effects of future changes in tax laws or rates are not included in the measurement. The Company recognizes the amount of taxes payable or refundable for the current year and recognizes deferred tax liabilities and assets for the expected future tax consequences of events and transactions that have been recognized in the Company’s financial statements or tax returns. The Company currently has substantial net operating loss carry forwards. The Company has recorded a 100% valuation allowance against net deferred tax assets due to uncertainty of their ultimate realization. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
Basic and Diluted Net Loss Per Share
Net loss per share is calculated in accordance with ASC 260, Earnings per Share, for the period presented. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There are potential dilutive securities as of March 31, 2021; there were no potential dilutive securities as of March 31, 2020.
Related Parties
A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.
Recent Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06-Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40)-Accounting For Convertible Instruments and Contracts in an Entity's Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020. The Company has early adopted ASU 2020-06 for the year beginning January 1, 2021.
Change in Accounting Principle
In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06-Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40)-Accounting For Convertible Instruments and Contracts in an Entity's Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020. The Company has early adopted ASU 2020-06 for the year beginning January 1, 2021.
The Company will adopt the if-converted method for calculating EPS and the modified retrospective method as the transition method. The if-converted method assumes that the conversion of convertible securities occurs at the beginning of the reporting period and the modified retrospective recognizes the cumulative effect of the change as an adjustment to the beginning balance of retained earnings as of the date of adoption. Under the modified-retrospective method, no adjustment should be made to the comparative-period information including EPS.
During the quarter ended March 31, 2021 the cumulative effect of the change on retained earnings is $29,788, additional paid-in-capital of $56,343 and notes payable of $26,555 as reflected in the accompanying financial statements. During the quarter ended March 31, 2021 the effect on EPS would be unchanged after the adoption of ASU 2020-06. |
ACQUISITION OF BLACK BIRD POTENTIALS INC |
3 Months Ended |
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Mar. 31, 2021 | |
ACQUISITION OF BLACK BIRD POTENTIALS INC | |
3. ACQUISITION OF BLACK BIRD POTENTIALS INC. | Effective January 1, 2020, the Company consummated a plan and agreement of merger (the “Merger Agreement”) with Black Bird Potentials Inc., a Wyoming corporation (Black Bird), pursuant to which Black Bird became a wholly-owned subsidiary of the Company. Pursuant to the Merger Agreement, the Company issued 120,000,000 shares of its common stock to the shareholders of Black Bird and four persons were added to the Company’s Board of Directors. Pursuant to the Merger Agreement, the Company’s four new directors were issued a total of 100,178,661 shares of Company common stock. Thus, a change in control of the Company occurred in connection with the Merger Agreement.
Due to the effects of the “reverse merger” acquisition of Black Bird occurring effective January 1, 2020, in accordance with ASC 805 Business Combinations, the presentation of the financial statements represents the continuation of Black Bird, the accounting acquirer, except for the legal capital structure. Historical shareholders’ equity of the Company, the accounting acquiree, has been adjusted to reflect the recapitalization. Retained earnings (deficit) of the Black Bird, the accounting acquirer have been carried forward after the acquisition and operations prior to the merger are those of Black Bird, the accounting acquirer. Earnings per share for periods prior to the merger have been adjusted to reflect the recapitalization. |
COMMON STOCK |
3 Months Ended |
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Mar. 31, 2021 | |
COMMON STOCK | |
4. COMMON STOCK | Common Stock Issued for Cash
During the three months ended March 31, 2021, the Company sold a total of 4,875,000 shares of its common stock for a total of $195,000, or $.04 per share, in cash, under its ongoing Regulation A Offering.
Common Stock Issued for Services
In February 2021, the Company issued 2,000,000 shares of its common stock to a third party as a commitment fee, which shares were valued at $0.065 with a 50% discount per share, or $65,000, in the aggregate.
Pursuant to a consulting agreement, in January, February and March 2021, the Company issued a total of 150,000 shares (50,000 shares each month) of its common stock to a third-party consultant, which shares were valued at $0.0406 per share ($2,030, in the aggregate), $0.0534 per share ($2,670, in the aggregate) and $0.0436 per share ($2,180), respectively.
In March 2020, the Company issued 100,000 shares of common stock to two third-party consultants pursuant to a consulting agreement, which shares were valued at $.08 per share, or $8,000, in the aggregate. The term of the consulting agreement expired in September 2020.
Acquisition of Black Bird
Effective January 1, 2020, the Company consummated the Merger Agreement with Black Bird. Pursuant to the Merger Agreement, the Company issued 120,000,000 shares of its common stock to the shareholders of Black Bird and four persons were added to the Company’s Board of Directors. Pursuant to the Merger Agreement, the Company’s four new directors were issued a total of 100,178,661 shares of Company common stock. Thus, a change in control of the Company occurred in connection with the Merger Agreement.
Stock Cancellation Agreement
In conjunction with the Merger Agreement, the Company entered into a cancellation of stock agreement with its former majority shareholder, EFT Holdings, Inc., whereby it cancelled all 79,265,000 shares of common stock then owned by EFT Holdings, Inc.
Debt Forgiveness Agreements
In conjunction with the Merger Agreement, the Company entered into debt forgiveness agreements with related parties, as follows:
• EFT Holdings, Inc.: the Company issued 18,221,906 shares of common stock to its former majority shareholder, EFT Holdings, Inc., in payment of $886,108 of indebtedness, principal and accrued interest.
• EF2T, Inc.: the Company issued 2,240,768 shares of common stock to a related party, EF2T, Inc., in payment of $109,992 of indebtedness, principal and accrued interest.
• Astonia LLC: the Company issued 2,831,661 shares of common stock to a related party, Astonia LLC, in payment of $136,997 of indebtedness, principal and accrued interest. |
NEW MITEXSTREAM AGREEMENT |
3 Months Ended | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||
NEW MITEXSTREAM AGREEMENT | |||||||||||||||||||||||||||||||||
5. NEW MITEXSTREAM AGREEMENT | In February 2021, Black Bird entered into a Manufacturing, Sales and Distribution License Agreement (the “New MiteXstream Agreement”) with a related party, Touchstone Enviro Solutions, Inc., which replaced a prior similar agreement (the “Original MiteXstream Agreement”) and served to expand Black Bird’s rights with respect to MiteXstream, an EPA-registered biopesticide. The New MiteXstream Agreement contains the following important provisions as compared to the Original MiteXstream Agreement:
The disinterested Directors of the Company approved the New MiteXstream Agreement. |
ASSET PURCHASE AGREEMENT |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
ASSET PURCHASE AGREEMENT | |
6. ASSET PURCHASE AGREEMENT | In December 2020, a newly-formed subsidiary of the Company, Big Sky American Dist., LLC, a Montana limited liability company (“Big Sky American”), which distributes the Company’s Grizzly Creek Naturals CBD and other products, entered into an asset purchase agreement (the “Big Sky APA”), whereby it purchased certain distribution-related assets associated with approximately 200 retail locations in Western Montana for $200,000 in cash, in February 2021. The purchased assets consisted of $10,000 of furniture and equipment and $190,000 of an intangible asset, a customer list, which is being amortized over 18 months. |
INTANGIBLE ASSET |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
INTANGIBLE ASSET | |
7. INTANGIBLE ASSET | The Company has an intangible asset related to the purchase of product distribution assets in the amount of $190,000, which is for a customer list and is being amortized over 18 months. The Company recorded amortization expense in the amount of $10,556 for the period ended March 31, 2021. As of March 31, 2021, the intangible asset net of accumulated amortization is $179,444. Amortization expense for 2021 is estimated to be $105,556. |
CONVERTIBLE PROMISSORY NOTES |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
CONVERTIBLE PROMISSORY NOTES | |
8. CONVERTIBLE PROMISSORY NOTES | In January 2021, the Company obtained a loan from a third party which netted the Company $52,000 in proceeds. In consideration of such loan, the Company issued a $55,500 face amount convertible promissory note that bears interest at 12% per annum, with principal and interest due in January 2022. The Company has the right to repay such convertible promissory note at a premium ranging from 125% to 145% of the face amount. Such convertible promissory note may be converted into shares of the Company’s common stock at a conversion price equal to the lower of 61% of the market price of the Company’s common stock on the date of issuance of such convertible promissory note and the date of conversion, any time after July 14, 2021.
In February 2021, the Company obtained a loan from a third party which netted us $106,000 in proceeds. In consideration of such loan, the Company issued a $121,000 face amount promissory note, with OID of $15,000, that bears interest at 9% per annum, with principal and interest payable in eight equal monthly payments of $15,125 beginning in August 2021. The Company has the right to repay such promissory note at any time. Should the Company default on such promissory note, it becomes convertible into shares of the Company’s common stock at a conversion price equal to the lesser of the lowest closing bid price of the Company’s commons stock for the trading day immediately preceding either (a) the delivery of a notice of default, (b) the delivery of a notice of conversion resulting from such default or (c) the issue date of such promissory note. In addition, we issued 2,000,000 shares of our common stock to this lender as a commitment fee, which shares were valued at $0.065 with a 50% discount per share, or $65,000, in the aggregate.
In February 2021, the Company obtained a loan from a third party which netted the Company $43,500 in proceeds. In consideration of such loan, the Company issued a $43,500 face amount convertible promissory note that bears interest at 12% per annum, with principal and interest due in January 2022. The Company has the right to repay such convertible promissory note at a premium ranging from 125% to 145% of the face amount. Such convertible promissory note may be converted into shares of the Company’s common stock at a conversion price equal to the lower of 61% of the market price of the Company’s common stock on the date of issuance of such convertible promissory note and the date of conversion, any time after August 17, 2021. |
STOCKHOLDER RECEIVABLE |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
STOCKHOLDER RECEIVABLE | |
9. STOCKHOLDER RECEIVABLE | At March 31, 2021 and 2020, cash relating to a stockholder receivable of Black Bird for $1,000, which stockholder receivable became a part of the Company’s outstanding common stock history, upon its acquisition of Black Bird. The stockholder receivable relates to 42,885 shares of Company common stock. |
AMENDMENT OF ARTICLES OF INCORPORATION |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
10. AMENDMENT OF ARTICLES OF INCORPORATION | In January 2020, the Company filed a Certificate of Amendment to its Articles of Incorporation to change its corporate name to “Black Bird Potentials Inc.” and submitted such filing to FINRA for approval thereof. FINRA did not approve such filing, due to an extended passage of time from the Company’s initial filing and its being late in filing certain periodic reports.
In February 2021, the Company amended its Articles of Incorporation to increase the number of authorized shares of its common stock to 325,000,000. The Company also amended its Articles of Incorporation subsequent to March 31, 2021. See Note 14. Subsequent Events—Amendment of Articles of Incorporation. |
RELATED PARTY TRANSACTIONS |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
RELATED PARTY TRANSACTIONS | |
11. RELATED PARTY TRANSACTIONS | Acquisition of Black Bird
Effective January 1, 2020, the Company consummated the Merger Agreement with Black Bird. Pursuant to the Merger Agreement, the Company issued 120,000,000 shares of its common stock to the shareholders of Black Bird and four persons were added to the Company’s Board of Directors. Pursuant to the Merger Agreement, the Company’s four new directors were issued a total of 100,178,661 shares of Company common stock. Thus, a change in control of the Company occurred in connection with the Merger Agreement.
Stock Cancellation Agreement
In conjunction with the Merger Agreement, the Company entered into a cancellation of stock agreement with its former majority shareholder, EFT Holdings, Inc., whereby it cancelled all 79,265,000 shares of common stock then owned by EFT Holdings, Inc.
Debt Forgiveness Agreements
In conjunction with the Merger Agreement, the Company entered into debt forgiveness agreements with related parties, as follows:
EFT Holdings, Inc.: the Company issued 18,221,906 shares of common stock to its former majority shareholder, EFT Holdings, Inc., in payment of $886,108 of indebtedness, principal and accrued interest.
EF2T, Inc.: the Company issued 2,240,768 shares of common stock to a related party, EF2T, Inc., in payment of $109,992 of indebtedness, principal and accrued interest.
Astonia LLC: the Company issued 2,831,661 shares of common stock to a related party, Astonia LLC, in payment of $136,997 of indebtedness, principal and accrued interest
Advances from Related Parties
Three Months Ended March 31, 2021
During the three months ended March 31, 2021, the Company obtained no advances from related parties.
Three Months Ended March 31, 2020
During the three months ended March 31, 2020, advances of $3,000 were received from Astonia LLC. The amounts due Astonia LLC bear interest at 5% per year and have a maturity of one year. As of March 31, 2021 and 2020, the Company owed Astonia LLC $4,470 and $3,000 in principal, respectively, and $226 and $11 in accrued and unpaid interest, respectively. |
LOANS PAYABLE - RELATED PARTIES |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
LOANS PAYABLE - RELATED PARTIES | |
12. LOANS PAYABLE - RELATED PARTIES | Three Months Ended March 31, 2021
During the three months ended March 31, 2021, the Company obtained a loan from a related party, EF2T, Inc. As of March 31, 2021, the Company owed EF2T, Inc. $773 in principal and $9 in accrued and unpaid interest.
Three Months Ended March 31, 2020
During the three months ended March 31, 2020, the Company entered into three separate debt forgiveness agreements with related parties:
EFT Holdings, Inc.: the Company issued 18,221,906 shares of common stock to its former majority shareholder, EFT Holdings, Inc., in payment of $886,108 of indebtedness, principal and accrued interest.
EF2T, Inc.: the Company issued 2,240,768 shares of common stock to a related party, EF2T, Inc., in payment of $109,992 of indebtedness, principal and accrued interest.
Astonia LLC: the Company issued 2,831,661 shares of common stock to a related party, Astonia LLC, in payment of $136,997 of indebtedness, principal and accrued interest.
During the three months ended March 31, 2020, advances of $3,000 were received from Astonia LLC. The amounts due Astonia LLC bear interest at 5% per year and have a maturity of one year. As of March 31, 2020, the Company owed Astonia LLC $11 in accrued and unpaid interest. |
REGIONAL DEVELOPMENT AND DISTRIBUTION AGREEMENT |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
REGIONAL DEVELOPMENT AND DISTRIBUTION AGREEMENT | |
13. REGIONAL DEVELOPMENT AND DISTRIBUTION AGREEMENT | In March 2020, Black Bird entered into a regional development and distribution agreement with Northland Partners, LLC (the “Tri-State Distributor”), who will focus on distribution of Black Bird’s products in North Dakota, South Dakota and Minnesota. Tri-State Distributor has the right to distribute Black Bird’s products anywhere in the United States. |
SUBSEQUENT EVENTS |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
SUBSEQUENT EVENTS | |
14. SUBSEQUENT EVENTS | Convertible Promissory Note
In April 2021, the Company obtained a loan from a third party which netted the Company $68,750 in proceeds. In consideration of such loan, the Company issued a $68,750 face amount convertible promissory note that bears interest at 12% per annum, with principal and interest due in April 2022. The Company has the right to repay such convertible promissory note at a premium ranging from 125% to 145% of the face amount. Such convertible promissory note may be converted into shares of the Company’s common stock at a conversion price equal to the lower of 61% of the market price of the Company’s common stock on the date of issuance of such convertible promissory note and the date of conversion, any time after October 22, 2021.
Amendment of Articles of Incorporation
In April 2021, the Company amended its Articles of Incorporation to change its corporate name to “Black Bird Biotech, Inc.” and submitted such filing to FINRA for approval thereof.
Common Stock Issued for Services
In April 2021, the Company issued 450,000 shares of its common stock to a third party consultant, which shares were valued at $0.038 per share, or $17,100, in the aggregate.
Other
Management has evaluated subsequent events through May 24, 2020. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN (Policies) |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN | |
Going Concern | The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The Company also has a working capital deficit as of March 31, 2021. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The Company’s activities will necessitate significant uses of working capital beyond 2021. Additionally, the Company’s capital requirements will depend on many factors, including the success of the Company’s researching for new markets. The Company plans to continue financing its operations with cash received from financing activities, more specifically from related party loans.
While the Company strongly believes that its capital resources will be sufficient in the near term, there is no assurance that the Company’s activities will generate sufficient revenues to sustain its operations without additional capital or if additional capital is needed, that such funds, if available, will be obtainable on terms satisfactory to the Company. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern. |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. |
Cash and Cash Equivalents and Restricted Cash | Cash and equivalents include investments with initial maturities of three months or less. The Company had no cash equivalents as of March 31, 2021, and December 31, 2020. |
Income Taxes | The Company accounts for income taxes utilizing ASC 740, “Income Taxes”. ASC 740 requires the measurement of deferred tax assets for deductible temporary differences and operating loss carry forwards, and of deferred tax liabilities for taxable temporary differences. Measurement of current and deferred tax liabilities and assets is based on provisions of enacted tax law. The effects of future changes in tax laws or rates are not included in the measurement. The Company recognizes the amount of taxes payable or refundable for the current year and recognizes deferred tax liabilities and assets for the expected future tax consequences of events and transactions that have been recognized in the Company’s financial statements or tax returns. The Company currently has substantial net operating loss carry forwards. The Company has recorded a 100% valuation allowance against net deferred tax assets due to uncertainty of their ultimate realization. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. |
Basic and Diluted Net Loss Per Share | Net loss per share is calculated in accordance with ASC 260, Earnings per Share, for the period presented. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There are potential dilutive securities as of March 31, 2021; there were no potential dilutive securities as of March 31, 2020. |
Related Parties | A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party. |
Recent Accounting Pronouncements | In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06-Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40)-Accounting For Convertible Instruments and Contracts in an Entity's Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020. The Company has early adopted ASU 2020-06 for the year beginning January 1, 2021. |
Change in Accounting Principle | In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06-Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40)-Accounting For Convertible Instruments and Contracts in an Entity's Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020. The Company has early adopted ASU 2020-06 for the year beginning January 1, 2021.
The Company will adopt the if-converted method for calculating EPS and the modified retrospective method as the transition method. The if-converted method assumes that the conversion of convertible securities occurs at the beginning of the reporting period and the modified retrospective recognizes the cumulative effect of the change as an adjustment to the beginning balance of retained earnings as of the date of adoption. Under the modified-retrospective method, no adjustment should be made to the comparative-period information including EPS.
During the quarter ended March 31, 2021 the cumulative effect of the change on retained earnings is $29,788, additional paid-in-capital of $56,343 and notes payable of $26,555 as reflected in the accompanying financial statements. During the quarter ended March 31, 2021 the effect on EPS would be unchanged after the adoption of ASU 2020-06. |
NEW MITEXSTREAM AGREEMENT (Tables) |
3 Months Ended | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | ||||||||||||||||||||||
NEW MITEXSTREAM AGREEMENT | ||||||||||||||||||||||
Schedule of new MiteXstream agreement |
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN (Details Narrative) |
3 Months Ended |
---|---|
Mar. 31, 2021
USD ($)
| |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN | |
Valuation allowance against net deferred tax assets | 100.00% |
Retained earnings | $ (29,788) |
Additional paid-in-capital | 56,343 |
Notes payable | $ 26,555 |
ACQUISITION OF BLACK BIRD POTENTIALS INC (Details Narrative) - Black Bird Potentials Inc. [Member] - January 1, 2020 [Member] |
3 Months Ended |
---|---|
Mar. 31, 2021
integer
shares
| |
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 120,000,000 |
Number of directors | integer | 4 |
Shares issued to directors as part of acquisition | 100,178,661 |
NEW MITEXSTREAM AGREEMENT (Details) |
1 Months Ended | |||||
---|---|---|---|---|---|---|
Feb. 28, 2021 | ||||||
New MiteXstream Agreement [Member] | ||||||
Term | December 31, 2080 | |||||
Territory | Worldwide Exclusive | [1] | ||||
Royalty | $10.00 per gallon manufactured | |||||
Minimums | 2,500 gallons of concentrate manufactured per year | [2] | ||||
Sublicensing | Right to sublicense granted | |||||
Trademarks | For no extra consideration, rights granted to use “MiteXstream” and “Harnessing the Power of Water” | |||||
Original MiteXstream Agreement [Member] | ||||||
Term | Initial terms of 10 years, with one 10-year renewal term | |||||
Territory | United States and Canada | |||||
Royalty | Effective royalty of an estimated $50 per gallon | |||||
Minimums | $20,000 of product per year | |||||
Sublicensing | No right to sublicense | |||||
Trademarks | For no extra consideration, rights granted to use “MiteXstream” | |||||
|
ASSET PURCHASE AGREEMENT (Details Narrative) |
3 Months Ended |
---|---|
Mar. 31, 2021
USD ($)
| |
Intangible asset | $ 190,000 |
Amortized period | 18 months |
December 2020 [Member] | |
Furniture and equipment | $ 10,000 |
Intangible asset | $ 190,000 |
Amortized period | 18 months |
February 2021 [Member] | |
Assets distributed in cash | $ 200,000 |
Asset purchase agreement description | It purchased certain distribution-related assets associated with approximately 200 retail locations in Western Montana. |
INTANGIBLE ASSET (Details Narrative) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Dec. 31, 2020 |
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN | ||
Intangible asset related to the purchase of product distribution assets | $ 190,000 | |
Intangible asset | 179,444 | $ 0 |
Amortization expense net | $ 105,556 | |
Amortized period | 18 months | |
Amortization expense | $ 10,556 |
CONVERTIBLE PROMISSORY NOTES (Details Narrative) - USD ($) |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Feb. 28, 2021 |
Jan. 31, 2021 |
Mar. 31, 2021 |
|
Price per share | $ .04 | ||
Common stock, shares issued for cash, shares | 150,000 | ||
Third Party [Member] | |||
Price per share | $ 0.065 | ||
Discount rate | 50.00% | ||
Interest due date | Jan. 31, 2022 | ||
Conversion price, description | Such convertible promissory note may be converted into shares of the Company’s common stock at a conversion price equal to the lower of 61% of the market price of the Company’s common stock on the date of issuance of such convertible promissory note and the date of conversion, any time after July 14, 2021. | ||
Common stock, shares issued for cash, shares | 2,000,000 | ||
Interest rate | 9.00% | 12.00% | |
Debt description | OID of $15,000, that bears interest at 9% per annum, with principal and interest payable in eight equal monthly payments of $15,125 beginning in August 2021. | ||
Convertible notes payable | $ 121,000 | $ 55,500 | |
Loans payable - related party | 106,000 | $ 52,000 | |
Aggregate value | $ 65,000 | ||
Third Party [Member] | Minimum [Member] | |||
Convertible promissory note premium | 125.00% | 125.00% | |
Third Party [Member] | Maximum [Member] | |||
Convertible promissory note premium | 145.00% | 145.00% | |
Third Party 1 [Member] | |||
Interest due date | Jan. 31, 2022 | ||
Interest rate | 12.00% | ||
Convertible notes payable | $ 43,500 | ||
Loans payable - related party | $ 43,500 |
STOCKHOLDER RECEIVABLE (Details Narrative) - Black Bird Potentials Inc. [Member] - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Stockholder receivable, shares | 42,885 | 42,885 |
Stockholder receivable, value | $ 1,000 | $ 1,000 |
AMENDMENT OF ARTICLES OF INCORPORATION (Details Narrative) - shares |
Mar. 31, 2021 |
Feb. 28, 2021 |
Dec. 31, 2020 |
---|---|---|---|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN | |||
Common Stock, Shares Authorized | 325,000,000 | 325,000,000 | 325,000,000 |