UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549










FORM
10-K/A










(Mark
One)



[X]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For
the fiscal year ended December 31, 2018



[  ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For
the transition period from to _______________ to ____________



Commission
file number 000-54830



SUNSTOCK,
INC.

(Exact
name of registrant as specified in its charter)





|Delaware                                                               |  | 46-1856372                                  
|---------------------------------------------------------------------- |  | --------------------------------------------
|(State
    or other jurisdiction of
    incorporation or organization) |  | (I.R.S.
    Employer
    Identification No.)



111
Vista Creek Circle

Sacramento,
California 95835

(Address
of principal executive offices) (zip code)



Registrant’s
telephone number, including area code: 916-860-9622



Securities
registered pursuant to Section 12(b) of the Act: None



Securities
registered pursuant to Section 12(g) of the Exchange Act:



Common
Stock, $0.0001 par value per share

(Title
of class)



Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act [  ] Yes
[X] No



Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. [  ]
Yes [X] No



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 [X] No



Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X] Yes [  ]
No



Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] Yes [  ] No



Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, “non-accelerated
filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



|Large
    Accelerated filer [  ] | Accelerated
    filer [  ] | Non-accelerated
    filer [  ]                  | Smaller
    reporting company [X]
|-------------------------------- | -------------------------- | ----------------------------------------------- | ---------------------------------
|                                 |                            | (do
    not check if smaller reporting company)



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [  ] Yes [X]
No



State
the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price
at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day
of the registrant’s most recently completed second fiscal quarter: $712,503 as of June 30, 2018



Indicate
the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.



|Class                               |  | Outstanding
    at June 19, 2019
|----------------------------------- |  | --------------------------------
|Common
    Stock, par value $0.0001 |  | 577,117,449                     



Documents
incorporated by reference: This Amendment No. 1 on Form 10-K/A to Form 10-K for the fiscal year ended December 31, 2018 is
being filed to provide the signature of the other board member of Sunstock, Inc.






















Table
of Contents



|PART
    I   |                                                                                                                  |   
|------------ | ---------------------------------------------------------------------------------------------------------------- | --
|Item
    1.  | Business                                                                                                         | 3 
|Item
    1A. | Risk
    Factors                                                                                                 | 7 
|Item
    1B. | Unresolved
    Staff Comments                                                                                    | 7 
|Item
    2.  | Properties                                                                                                       | 8 
|Item
    3.  | Legal
    Proceedings                                                                                            | 8 
|Item
    4.  | Mine
    Safety Disclosures                                                                                      | 8 
|             |                                                                                                                  |   
|PART
    II  |                                                                                                                  |   
|Item
    5.  | Market
    for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 9 
|Item
    6.  | Selected
    Financial Data                                                                                      | 9 
|Item
    7.  | Management’s
    Discussion and Analysis of Financial Condition and Results of Operations                        | 10
|Item
    8.  | Financial
    Statements and Supplementary Data                                                                  | 12
|Item
    9.  | Changes
    in and Disagreements With Accountants on Accounting and Financial Disclosure                         | 12
|Item
    9A  | Controls
    and Procedures                                                                                      | 12
|Item
    9B. | Other
    Information                                                                                            | 13
|             |                                                                                                                  |   
|PART
    III |                                                                                                                  |   
|Item
    10. | Directors,
    Executive Officers and Corporate Governance                                                       | 14
|Item
    11. | Executive
    Compensation                                                                                       | 15
|Item
    12. | Security
    Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               | 16
|Item
    13. | Certain
    Relationships and Related Transactions, and Director Independence                                    | 16
|Item
    14. | Principal
    Accounting Fees and Services                                                                       | 18
|             |                                                                                                                  |   
|PART
    IV  |                                                                                                                  |   
|Item
    15. | Exhibits,
    Financial Statement Schedules                                                                      | 19



2







PART
I



CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS



This
report on Form 10-K, including the section entitled “Management’s Discussion and Analysis of Financial Condition and
Results of Operations,” contains statements relating to our future plans and developments, financial goals and operating
performance that are based on our current beliefs and assumptions. These statements constitute “forward-looking statements”
within the meaning of federal securities laws. Words such as “expects,” “anticipates,” “intends,”
“plans,” “believes,” “seeks,” “estimates,” “could,” “may,”
“should,” and similar expressions or variations of such words are intended to identify forward-looking statements,
but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this report. Additionally,
statements concerning future matters are forward-looking statements.



Although
forward-looking statements in this report reflect the good faith judgment of our management, such statements are only based on
facts and factors known by us as of the date of this report. Consequently, forward-looking statements are inherently subject to
risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated
by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include,
without limitation, those specifically addressed under the section below entitled “Risk Factors,” as well as those
discussed elsewhere in this report and in our other filings with the Securities and Exchange Commission (“SEC”). Readers
are urged not to place undue reliance on these forward-looking statements.



We
undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that
may arise after the date of this report, whether as a result of new information, future events or otherwise, except as required
by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this report,
as well as our other SEC filings, which attempt to advise interested parties of the risks and factors that may affect our business,
financial condition, results of operations, and prospects.



Item
1. Business



Background



The
Company has only recently emerged from its status as a development-stage company, and it has limited operating history and is
expected to experience losses in the near term. The Company’s independent registered public accounting firm has issued a
report stating there is substantial doubt about the Company’s ability to continue as a going concern.



Summary



The
Company operated a deep discount variety retail store under the name “Dollar Green Stores” (“dollar stores”)
in Sacramento. The store was closed in September 2018.



In
September 2013, the Company’s management developed plans to open and operate two retail stores in Sacramento, California,
under the named “Dollar Green Stores.” In February 2014,the Company
opened its first dollar store in Sacramento, which consists of more than 2,200 square feet of retail store space. The Company
opened its second dollar store in May 2014. In August 2014, the Company was forced to close its original store due to its landlord’s
failure to comply with city building codes. The Company relocated the second store in December 2015 and settled the existing lease
at that time. The Company currently operates no variety retail stores.



Additionally,
the Company began limited trading of precious metals in December 2014 with the purchase 100 ounces of silver. The Company has
since purchased gold and is evaluating potentially expanding its ownership of additional precious metals. Though management has
limited experience in the precious metals field they have solicited outside experts contribute to the Company’s investment
strategies.



The
Company also has plans to acquire and operate hotels and residential properties in the high demand areas of California such as
Southern California and the Bay Area.



On
April 18, 2017 the Company entered into a Letter of Intent to purchase a central California hotel for approximately $7,000,000
and entering escrow October 2017 however with the escrow expired in December 2017 and the purchase did not close.



On
October 22, 2018, Sunstock, Inc. acquired all assets and liabilities of Mom’s Silver Shop, Inc. of Sacramento, California.
Included in the assets acquired was approximately $60,000 in precious metals inventory and approximately $13,000 in net fixtures.
Also included were any licenses and permits, customer lists, logo, trade names, signs, and websites. Financing of the purchase
was by $20,056 cash, $33,000 unsecured note payable with principle payments of $1,000 per week for 33 weeks starting January 1,
2019 with 4.5% annual interest accrued on the unpaid balance (total accrued interest due August 27, 2019), and the assumption
of liabilities and lease obligations. Mom’s Silver Shop had unaudited net revenues of approximately $4,800,000 for the year
ended December 31, 2015, $4,000,000 for the year ended December 31, 2016, $3,800,000 for the year ended December 31, 2017, and
$2,500,000 in 2018 to the date of acquisition. Mom’s Silver Shop specializes in buying and selling gold, silver, and rare
coins, and is one of the leading precious metals retailers in the greater Sacramento metropolitan area.



3







The
Business: Hotel and Residential Properties



The
Company believes the hotel industry accounts for a significant part of the overall economy. The industry is highly segmented with
many different brands targeting a vast range of customer needs at various price points. Businesses in the hotel industry generally
operate under one or more business models, including hotel management, brand franchising and hotel ownership. Hotels are categorized
into three groups: full-service, select-service and limited-service. Full-service hotels typically offer a full range of amenities
and facilities, including food and beverage facilities and meeting facilities. Select-service hotels furnish some of the amenities
offered at full-service hotels but on a smaller scale and generally do not to have meeting facilities. Limited-service hotels
usually offer only lodging, however some provide modest food and beverage facilities such as breakfast buffets or small meeting
rooms.



Lodging
demand growth is generally related to the strength of the overall economy. Additionally, local demand factors may stimulate business
and leisure travel to specific locations. In particular, macroeconomic trends relating to GDP growth, corporate profits, capital
investments and employment growth are some of the primary drivers of lodging demand. As the economy continues to improve, the
ongoing trend of strong transient demand and growing group business will continue to drive demand for hotels and lodging and allow
the industry to achieve increased growth.



4







The
Business: Precious Metals



Silver
and other precious metals, may be used as an investment. A traditional way of investing in silver is by buying actual bullion
bars. In some countries, like Switzerland and Liechtenstein, bullion bars can be bought or sold over the counter at major banks.
Another means of buying and trading silver is through silver coins. Silver coins include the one ounce 99.99% pure Canadian Silver
Maple Leaf and the one ounce 99.93% pure American Silver Eagle. Likewise, an increasing popular method of trading in silver and
precious metals is through exchange-traded products, such as exchange-traded funds, exchange-traded notes and closed-end funds
that aim to track the price of silver. Silver exchange-traded products are traded on the major stock exchanges including the London
and New York Stock Exchanges.



The
Company believes that stimulative monetary policies adopted by the United States, the European Union, China and Japan may cause
an increase in inflation. Gold and silver have traditionally served as a hedge against economic uncertainty and high inflation.



At
the present time, the Company does not anticipate or foresee a material effect on this line of its business from existing or probable
governmental regulations.



The
Company’s Presence in the Market



The
Company has a presence in the trade of precious metals and a presence in the trade of rare coins with the acquisition of Mom’s
Silver Shop.



The
Company currently has no presence in the hotel or residential property marketplace. It intends to acquire such properties in the
near future, thereby establishing a footprint in the market.



The
Company currently has no presence in the variety retail stores.



Services
and Products



The
Company has established positions in precious metals and intends to hold as a long term investment. Currently, the Company has
acquired 22,003 ounces of silver and a small amount of gold. The Company increased its position in precious metals and added a
position in rare coins with the acquisition of Mom’s Silver Shop.



5







Competition



If
the Company does enter the hotel and or residential property industry, it will encounter significant competition from other hotel,
residential and resort owners and operators. Primary competitors would include branded and independent hotel operating companies,
national and international hotel brands and ownership companies. The Company’s acquisition, Mom’s Silver Shop,
has a number of small coin shop competitors in the Sacramento, California area.



Strategic
Partners and Suppliers



The
Company believes that strategic partnerships will be a major component of the Company’s operating strategy and path to success.
The Company hopes to work with several strategic partners in important areas of its business and operations. However, currently,
the Company has no such strategic partners.



Marketing
Strategy



The
Company has conducted limited advertising and marketing to date through updating its website for Mom’s Silver Shop.
The Company has not yet given substantial attention to its marketing strategy.



Operations



The
Company believes that having adequate supplies of coins and bullion on hand is important and thus works to ensure that there is
adequate supplies, especially during year-end holidays.



Sales
Strategy



The
Company’s sales strategy is to have an adequate supply of bullion and coins for sale at competitive prices.



6







Revenues
and Losses



Since
its inception, the Company has focused its efforts on conducting market research and development, and has devoted little attention
or resources to sales and marketing or generating near-term revenues and profits. The Company has limited revenues to date and
has not realized any operating profits as of yet. In order to succeed, the Company needs to develop a viable strategy to market
its hotels and residential properties once they have been acquired and developed. The Company closed its only Dollar Store in
September 2018. The Company began to focus on near-term revenues and profitability with the acquisition of Mom’s Silver
Shop.



The
Company has posted limited revenues from operations based on customer sales at its discount retail stores. The Company posted
revenues of approximately $415,000 (including approximately $402,000 from Mom’s Silver Shop) and $10,000 during the years
ended December 31, 2018 and 2017, respectively.



The
Company has not generated profits and has posted net losses since inception. The Company posted net losses of ($9,437,465)
for the year ended December 31, 2018 and ($36,276,542) for the year ended December 31, 2017.



Equipment
Financing



The
Company has a three year lease on equipment for Mom’s Silver Shop.



THE
COMPANY



Employees



Currently,
the Company has five employees and one consultant. Three employees are at Mom’s Silver Shop. Our employees are not represented
by a labor union or by a collective bargaining agreement.



Item
1A. Risk Factors



Not
Applicable



Item
1B. Unresolved Staff Comments



None



7







Item
2. Properties



The
Company currently uses the residence of Jason C. Chang for its corporate office at $1,200 per month based on a 19-month lease
entered into in June 30, 2017 running through December 31, 2018. This lease was not extended. The Company has no other properties
and at this time and has no agreements to acquire any properties.



The
Company entered into a lease agreement in December 2015 for 2,700 square feet of retail shop space to replace its previous location
below. The lease required combined monthly payments of base rent of $1,950 for six months beginning January 2016 with a
one year option which ran through June 2017. The Company operated at that location on a month to month arrangement for $2,100
per month through September 2018.



The
Company entered into a lease agreement in October 2018 for 1,088 square feet of retail shop space for Mom’s Silver Shop.
The lease requires combined monthly payments of base rent and triple net of $1,866 per month for sixty months.



Item
3. Legal Proceedings



On
June 18, 2018, Power Up Lending Group, LTD. (“Power Up”), filed in the Supreme Court of the State of New York that
Sunstock and Jason Chang (president and CFO of Sunstock and board member) and Rammk Clair (board member of Sunstock) materially
breached the October 24, 2017, December 19, 2017, and April 16, 2018 notes payable to Power Up by, in June 2018, changing Sunstock’s
transfer agent in violation of the Notes and Agreements, and existing letter of instructions and authorizations, refusing to provide
a replacement irrevocable letter of instruction from the newly appointed transfer agent and also failing to maintain sufficient
reserves of stock so as to permit and accommodate the conversion requests of Power Up to go forward. Power Up has requested judgment
against Sunstock for $160,180 with default interest, judgment against Sunstock for reasonable legal fees and costs of litigation,
three judgments against Jason Chang and Rammk Clair for $160,180 and interest for each judgment, and a temporary restraining order
and a preliminary and permanent injunction directing Sunstock, Jason Chang, and Rammk Clair to take all steps necessary and proper
to permit the conversion of debt into stock and to deliver the stock to Power Up.



On
June 22, 2018, EMA Financial, LLC (“EMA”) sent a letter to Sunstock stating that Sunstock was in default on the June
5, 2017 note payable and the October 11, 2017 note payable to EMA. Among other defaults, the letter stated that Sunstock was in
default due to refusing to provide a replacement irrevocable letter of instruction from the newly appointed transfer agent and
also failing to maintain sufficient reserves of stock. The letter asks for at least $332,884.



On
December 26, 2018, EMA filed a lawsuit in Federal Court for breach of contract.



On
July 9, 2018, the attorney for Auctus Fund, LLC (“Auctus”) sent a letter to Sunstock stating that Sunstock was in
default on the May 24, 2017 note payable and the October 11, 2017 note payable to Auctus. Among other defaults, the letter stated
that Sunstock was in default due to changing Sunstock’s transfer agent in violation of the note, and existing letter of
instructions and authorizations, refusing to provide a replacement irrevocable letter of instruction from the newly appointed
transfer agent and also failing to maintain sufficient reserves of stock so as to permit and accommodate the conversion requests
of Auctus to go forward. The letters ask for at least $277,397 regarding the May 24, 2017 note payable and at least $299,247 regarding
the October 11, 2017 note payable. On December 26, 2018, AUCTUS filed a lawsuit in Federal Court for breach of contract.



On
July 10, 2018, the attorney for Crown Bridge Partners, LLC (“Crown Bridge”), sent a letter to Sunstock stating that
Sunstock was in default on the December 8, 2017 note payable to Crown Bridge. The letter stated that Sunstock was in default due
to changing Sunstock’s transfer agent in violation of the note, and existing letter of instructions and authorizations,
refusing to provide a replacement irrevocable letter of instruction from the newly appointed transfer agent and also failing to
maintain sufficient reserves of stock so as to permit and accommodate the conversion requests of Crown Bridge to go forward. The
letter requested that Sunstock immediately contact Crown Bridge to demonstrate compliance with the note. On August 15, 2018, the
attorney for Crown Bridge sent another letter to Sunstock stating that Sunstock owed Crown Bridge $221,470, and that if Sunstock
did not respond by August 21, 2018 in regards to payment, then a lawsuit would be filed. No lawsuit has been filed as of August
24, 2018 to the Company’s knowledge.



On
March 7, 2019, the United States Court of Massachusetts issued electronic order 38 stating that the Court granted on the merits
summary judgement on violation of contract claims for the plaintiffs (Auctus Fund, LLC and EMA Financial, LLC) and found Sunstock
in default.



On
May 6, 2019, the United States District Court of the District of Massachusetts issued an Order to Show Cause in the case of Auctus
Fund, LLC and EMA Financial, LLC vs. Sunstock, Inc. The Court ordered Auctus to show cause within 21 days why the Court
had jurisdiction at the outset of the case and why the Court ought not to vacate its entry of summary judgement for Auctus, EDF
No. 38. The Court said that it had taken no action with regard to EMA’s claim. The Company is currently awaiting a further
issuance by the Court.



On May 30, 2019, the United States District Court of Massachusetts issued an order
in the case of Auctus Fund, LLC vs. Sunstock, Inc. that the Court was satisfied that Auctus compliant raised colorable securities
law claims and, accordingly, the Court ruled that it had subject matter jurisdiction to enter summary judgment on Auctus’
contract claims.



Item
4. Mine Safety Disclosures.



Not
applicable.



8







PART
II



Item
5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities



On
December 9, 2015 the Company began light trading on the NASDAQ bulletin board under the symbol “SSOK”.



Our
common stock trades under the symbol “SSOK” on the OCTQB. The following table sets forth, for the quarters indicated,
the high and low last sale price information for our common stock as reported by OTC Markets Inc., a research service that complies
quote information reported on the National Association of Securities Dealers composite feed or other qualified inter-dealer quotation
medium. These quotations reflect inter-dealer prices, without retail markup, markdown or commissions, and may not necessarily
represent actual transactions.



|                                  |  | High |        |  | Low |  
|--------------------------------- |  | ---- | ------ |  | --- | -
|                                  |  |      |        |  |     |  
|Year ended
    December 31, 2018: |  |      |        |  |     |  
|First
    Quarter                 |  | $    | 0.30   |  |     | $
|Second
    Quarter                |  |      | 0.1499 |  |     |  
|Third
    Quarter                 |  |      | 0.44   |  |     |  
|Fourth
    Quarter                |  |      | 0.035  |  |     |  
|Year ended
    December 31, 2017: |  |      |        |  |     |  
|First
    Quarter                 |  | $    | 1.30   |  |     | $
|Second
    Quarter                |  |      | 1.40   |  |     |  
|Third
    Quarter                 |  |      | 1.40   |  |     |  
|Fourth
    Quarter                |  |      | 1.05   |  |     |  



The
OTC Bulletin Board is a dealer-driven quotation service. Unlike the Nasdaq Stock Market, companies cannot directly apply to be
quoted on the OTC Bulletin Board, only market makers can initiate quotes, and quoted companies do not have to meet any quantitative
financial requirements. Any equity security of a reporting company not listed on the Nasdaq Stock Market or on a national securities
exchange is eligible.



At
such time as it qualifies, the Company may choose to apply for quotation of its securities on the Nasdaq Capital Market.



In
general, there is greater liquidity for traded securities on the Nasdaq Capital Market and less on the OTC Bulletin Board.



As
of December 31, 2018, there are 382,117,449 shares of common stock outstanding of which 239,616,911 shares are owned by officers
and directors of the Company. There are approximately 52 holders of our common stock.



The
shares of common stock held by current shareholders are considered “restricted securities” subject to the limitations
of Rule 144 under the Securities Act. In general, securities may be sold pursuant to Rule 144 after being fully-paid and held
for more than 12 months. While affiliates of the Company are subject to certain limits in the amount of restricted securities
they can sell under Rule 144, there are no such limitations on sales by persons who are not affiliates of the Company. In the
event non-affiliated holders elect to sell such shares in the public market, there is likely to be a negative effect on the market
price of the Company’s securities. There is no dividend policy currently in place.



Item
6. Selected Financial Data.



There
is no selected financial data required to be filed for a smaller reporting company.



9







Item
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations



Overview



You
should read the following discussion and analysis in conjunction with our Consolidated Financial Statements and related Notes
thereto included in Part II, Item 8 of this Report before deciding to purchase, hold or sell our common stock.



Sunstock,
Inc., (“Sunstock”) was incorporated on July 23, 2012 under the laws of the State of Delaware to engage in any lawful
corporate undertaking, including, but not limited to, selected mergers and acquisitions.



Management
intends to develop the Company for the acquisition and operation of hotels and residential properties in the high demand areas
of California, particularly Southern California and the San Francisco Bay Area. In December 2015, the Company entered into the
investment in precious metals as listed on their Balance sheet of December 31, 2017 of $384,981. In September 2013, management
developed plans to open and operate two retail stores in Sacramento, California. On October 30, 2013, the Company entered into
a Purchase Agreement with Dollar Store Services, Inc. to develop, design and build out a retail store which the Company began
operating in February 2014. Additionally, the Company entered into a lease agreement on October 30, 2013 for 2,239 square feet
of retail shop space for this store in Sacramento, California. The lease required monthly payments for rent and maintenance of
$3,733 for thirty six months beginning February 2014. The store was closed in September 2018.



Management
opened an additional retail store in Sacramento, California in May of 2014 and entered into a retail shop lease for sixty-seven
months beginning May 2014 for approximately 4,756 square feet. The monthly base rent for this location was $4,756, with seven
months of free rent throughout the first eleven months. The base rent gradually increased until the term was to expire in 2019.
This lease terminated in December 2015.



The
Company currently operates no retail variety stores.



Business
opportunities may be available in many different industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities difficult and complex.



In
analyzing prospective business opportunities, Sunstock may consider such matters as the available technical, financial and managerial
resources; working capital and other financial requirements; history of operations, if any; prospects for the future; nature of
present and expected competition; the quality and experience of management services which may be available and the depth of that
management; the potential for further research, development, or exploration; specific risk factors not now foreseeable but which
may be anticipated; the potential for growth or expansion; the potential for profit; the perceived public recognition or acceptance
of products, services, or trades; name identification; and other relevant factors. This discussion of the proposed criteria is
not meant to be restrictive of the virtually unlimited discretion of Sunstock to search for and enter into potential business
opportunities.



As
of December 31, 2018, The Company has not posted operating income since inception. It has an accumulated deficit of approximately
($52,800,000) since inception. These matters raise substantial doubt about the Company’s ability to continue
as a going concern. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash
flows from operations to meet its obligations, which it has not been able to accomplish to date, and /or obtain additional financing
from its stockholders and/or other third parties.



On
October 22, 2018, Sunstock, Inc. acquired all issued and outstanding shares of common stock of Mom’s Silver Shop, Inc. of
Sacramento, California. Included in the assets acquired was approximately $60,000 in precious metals inventory and approximately
$13,000 in net fixtures. Also included were any licenses and permits, customer lists, logo, trade names, signs, and websites.
Financing of the purchase was by $20,056 cash, $33,000 unsecured note payable with principle payments of $1,000 per week for 33
weeks starting January 1, 2019 with 4.5% annual interest accrued on the unpaid balance (total accrued interest due August 27,
2019), and the assumption of liabilities and lease obligations. Mom’s Silver Shop had unaudited net revenues of approximately
$4,800,000 for the year ended December 31, 2015, $4,000,000 for the year ended December 31, 2016, $3,800,000 for the year ended
December 31, 2017, and $2,500,000 in 2018 to the date of acquisition. Mom’s Silver Shop specializes in buying and selling
gold, silver, and rare coins, and is one of the leading precious metals retailers in the greater Sacramento metropolitan area.



10







Critical
Accounting Policies



The
financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United
States. The preparation of these financial statements requires making estimates and judgments that affect the reported amounts
of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimates are
based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under different assumptions or conditions.



Revenue
Recognition



On
January 1, 2018, the Company adopted FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts
with Customers(“ASC 606”).The new guidance sets forth a new five-step revenue recognition model which
replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces
of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that
a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an
amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed
disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance.



The
Company’s principal activities from which it generates revenue are product sales. Revenue is measured based on considerations
specified in a contract with a customer. A contract exists when it becomes a legally enforceable agreement with a customer. These
contracts define each party’s rights, payment terms and other contractual terms and conditions of the sale. Consideration
is typically paid at time of sale via credit card, check, or cash when products are sold direct to consumers



A
performance obligation is a promise in a contract to transfer a distinct product to the customer, which for the Company is transfer
of a product to customers. Performance obligations promised in a contract are identified based on the goods that will be transferred
to the customer that are both capable of being distinct and are distinct in the context of the contract, whereby the transfer
of the goods is separately identifiable from other promises in the contract. The Company has concluded the sale of product and
related shipping and handling are accounted for as the single performance obligation.



The
transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the
customer receives the benefit of the performance obligation. The transaction price is determined based on the consideration to
which the Company will be entitled to receive in exchange for transferring goods to the customer. We do not issue refunds.



The
Company recognizes revenue when it satisfies a performance obligation in a contract by transferring control over a product to
a customer when product is shipped based on fulfillment by the Company. Taxes assessed by a governmental authority that are both
imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are
excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred
to a customer are accounted for as a fulfillment cost and are included in cost of product sales.



Derivative
Liability



The
Company applies the provisions of ASC Topic 815-40, Contracts in Entity’s Own Equity (“ASC Topic 815-40”), under
which convertible instruments, which contain terms that protect holders from declines in the stock price, may not be exempt from
derivative accounting treatment. As a result, embedded conversion options (whose exercise price is not fixed and determinable)
in convertible debt (which is not conventionally convertible due to the exercise price not being fixed and determinable) are initially
recorded as a liability and are revalued at fair value at each reporting date using a binomial option pricing model The change
in valuation is accounted for as a gain or loss in derivative liability.



Stock-Based
Compensation:



All
share-based payments are recognized in the consolidated financial statements based upon their fair values.



The
Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services
follows ASC Topic 505. The measurement date for the fair value of the equity instruments issued is determined at the earlier of
(i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant
or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity
instrument is primarily recognized over the term of the consulting agreement. In accordance with FASB guidance, an asset acquired
in exchange for the issuance of fully vested, non-forfeitable equity instruments should not be presented or classified as an offset
to equity on the grantor’s balance sheet once the equity instrument is granted for accounting purposes.



2018
Year-End Analysis Results of Operations



Comparison
of the Years Ended December 31, 2018 and 2017



Mom’s
Silver Shop was acquired in October 2018, which resulted in material changes in revenues, cost of goods sold, and gross profit
in 2018 as compared to 2017.



For
the year ended December 31, 2018, revenues were $414,565, an increase of $404,068 from $10,497 for 2017, primarily due to $401,679
revenue from Mom’s Silver Shop.



For
the year ended December 31, 2018, cost of goods sold were $375,961, an increase of $358,528 from $17,433 for 2017,primarily due
to $355,249 cost of goods sold from Mom’s Silver Shop.



For
the year ended December 31, 2018, gross profit was $38,604, an increase of $45,540 from a gross loss of ($6,936) for 2017, primarily
due to $46,430 from Mom’s Silver Shop.



For
the year ended December 31, 2018, operating expenses were $5,343,841, a decrease of $30,238,831 from $35,582,672 for 2017. Stock
based compensation was approximately $5,300,000 in 2018, an approximately $30,500,000 decrease from approximately $35,200,000
in 2017.



For
the year ended December 31, 2018, the net loss was $9,437,465, a decrease of $26,839,077 from a loss of $36,276,542
for 2017. The accumulated deficit at December 31, 2018 was $52,166,526.



Liquidity
and Capital Resources



As
of December 31, 2018, the Company had $84,439 in cash, $788 in accounts receivable, $379,781 in inventories. and $575,750 in prepaid
expenses. During the year ended December 31, 2018, the Company raised $127,938 in cash from stock sales, $219,000 from
notes payable from related parties, and $53,000 from convertible notes payable.



11







Item
8. Financial Statements and Supplementary Data



The
financial statements for the years ended December 31, 2018 and 2017 are attached hereto.



Item
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure



None.



Item
9A. Controls and Procedures



Pursuant
to Rules adopted by the Securities and Exchange Commission. The Company carried out an evaluation of the effectiveness of the
design and operation of its disclosure controls and procedures, as that term is defined in Rule 13a-15(e) of the Securities
Exchange act of 1934, as amended (Exchange Act), as of December 31, 2018. This evaluation
was done as of the end of the fiscal year under the supervision and with the participation of the Company’s principal executive
officer (who is also the principal financial officer). There have been no significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date of the evaluation. Based upon that evaluation,
he believes that the Company’s disclosure controls and procedures are not effective in gathering, analyzing and disclosing
information needed to ensure that the information required to be disclosed by the Company in its periodic reports is recorded,
summarized and processed timely. The principal executive officer is directly involved in the day-to-day operations of the Company.



Management’s
Report of Internal Control over Financial Reporting



The
Company is responsible for establishing and maintaining adequate internal control over financial reporting in accordance with
the Rule 13a-15(e) of the Securities Exchange Act of 1934. The Company’s officer, its president, conducted an evaluation
of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2018. Based on this evaluation,
management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2018,
based on those criteria. A control system can provide only reasonably, not absolute, assurance that the objectives of the control
system are met and no evaluation of controls can provide absolute assurance that all control issues have been detected.



Material
Weaknesses:



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.



The
material weaknesses identified are:



1.
Inadequate number of personnel that could accurately and timely record and report the Company’s financial statements in
accordance with GAAP;



2.
We did not employ an adequate number of people to ensure a control environment that would allow for the accurate and timely reporting
of the financial statements.



3.
Ineffective controls to ensure that the accounting for transactions are recorded in accordance with GAAP financial statements.



4.
We have not performed a risk assessment and mapped our processes to control objectives.



Notwithstanding
the existence of these material weaknesses in internal control over financial reporting, we believe that the financial statements
in this Annual Report on Form 10-K fairly present, in all material respects, our financial condition in conformity with U.S. generally
accepted accounting principles (GAAP). Further, we do not believe the material weaknesses identified had an impact on prior financial
statements.



12







Remediation:



As
part of our ongoing remedial efforts, we have and will continue to, among other things:



1.
Expanded our accounting policy and controls organization by recently hiring qualified accounting and finance personnel;



2.
Increase our efforts to educate both our existing and expanded accounting policy and control organization on the application of
the internal control structure;



3.
Emphasize with management the importance of our internal control structure;



4.
Seek outside consulting services where our existing accounting policy and control organization believes the complexity of the
existing exceeds our internal capabilities.



5.
Plan to implement improved accounting systems.



We
believe that the foregoing actions will improve our internal control over financial reporting, as well as our disclosure controls
and procedures. We intend to perform such procedures and commit such resources as necessary to continue to allow us to overcome
or mitigate these material weaknesses such that we can make timely and accurate quarterly and annual financial filings until such
time as those material weaknesses are fully addressed and remediated.



Changes
in Internal Control Over Financial Reporting



There
have been no changes in the Company’s internal controls over financial reporting during its fourth fiscal quarter that have
materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.



Item
9B. Other information



Not
applicable.



13







PART
III



Item
10. Directors, Executive Officers, and Corporate Governance



The
Directors and Officers of the Company are as follows:



|Name                    |  | Age |  | Positions
    and Offices Held    
|----------------------- |  | --- |  | ----------------------------------
|                        |  |     |  |                                   
|Jason
    C. Chang      |  | 45  |  | President,
    Secretary, Director
|Dr.
    Ramnik S. Clair |  | 67  |  | Vice
    President, Director      



Management
of Sunstock



Sunstock
has two employees and one consultant. Jason C. Chang and Dr. Ramnik S. Clair are the officers and directors of Sunstock and shareholders.
Mr. Chang, as president of Sunstock, and Mr. Clair as vice president, have allocated time to the activities of Sunstock with minimal
cash compensation.



There
are no agreements or understandings for the officer or director to resign at the request of another person and the above- named
officer and director is not acting on behalf of nor will act at the direction of any other person.



Set
forth below are the names of the directors and officers of the Company, all positions and offices with the Company held, the period
during which they have served as such, and the business experience during at least the last five years:



Jason
C. Chang, serves as a director, Chief Executive Officer and President of Sunstock. Mr. Chang began his career in the hospitality
industry as a child and continuing as an adult working in the family business operating several hotels throughout California.
Mr. Chang has now had over 20 years of hospitality management experience. In addition, as an entrepreneur, Mr. Chang has helped
fund numerous startup companies, primarily related to the technology sector.



Dr.
Ramnik Clair serves as a director and Senior Vice President of Sunstock. Dr. Clair received his medical degree in India and immigrated
to the United States in 1983. He completed his medical residency in New York and has subsequently served in his medical practice
as a solo practitioner. Dr. Clair intends to assist the Company in building long term relationships with its client base.



Conflicts
of Interest



Messrs.
Chang and Clair are not directors of, or sole beneficial shareholders of any other companies which have filed registration statements
on Form 10 for the registration of their common stock pursuant to the Securities Exchange Act.



There
are no binding guidelines or procedures for resolving potential conflicts of interest. Failure by management to resolve conflicts
of interest in favor of the Company could result in liability of management to the Company. However, any attempt by shareholders
to enforce a liability of management to the Company would most likely be prohibitively expensive and time consuming.



14









Code
of Ethics. The Company has not at this time adopted a Code of Ethics pursuant to rules described in Regulation S-K. The Company
has two persons who are the only shareholders and who serve as the directors and officers. The Company has limited operations
and business actually does not receive any revenues or investment capital. The adoption of an Ethical Code at this time would
not serve the primary purpose of such a code to provide a manner of conduct as the development, execution and enforcement of such
a code would be by the same persons and only persons to whom such code applied. Furthermore, because the Company does not have
any activities, there are activities or transactions which would be subject to this code. At the time the Company enters into
a business combination or other corporate transaction, the current officers and directors will recommend to any new management
that such a code be adopted. The Company does not maintain an Internet website on which to post a code of ethics.



Corporate
Governance.



For
reasons similar to those described above, the Company does not have a nominating compensation nor audit committee of the board
of directors. At this time, the Company consists of two shareholders who serve as the corporate directors and officers. The Company
has no activities, and receives no revenues. At such time that the Company enters into a business combination and/or has additional
shareholders and a larger board of directors and commences activities, the Company will propose creating committees of its board
of directors, including both a nominating and an audit committee. Because there are only two shareholders of the Company, there
is no established process by which shareholders to the Company can nominate members to the Company’s board of directors.
Similarly, however, at such time as the Company has more shareholders and an expanded board of directors, the new management of
the Company may review and implement, as necessary, procedures for shareholder nomination of members to the Company’s board
of directors.



To
the Company’s review that no other reports were required, during the fiscal year ended December 31, 2018 all Section 16(a)
filing requirements applicable to its officers, directors and greater than 10 percent beneficial owners were complied with.



Item
11. Executive Compensation



The
Company’s officers and directors receive minimal cash compensation for services rendered to the Company. The officers and
directors are not accruing any compensation pursuant to any agreement with the Company. For the years ended December 31, 2018
and 2017 the Company recorded the following:



| | ● | During
    the year ended December 31, 2018, the Company’s chief executive officer purchased 164,310,000 shares of common stock
    below market price. $3,426,875 in stock based compensation expense was recorded.                                                                                                                                                                                                                                                             
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ● | During
    the year ended December 31, 2018, the Company’s vice president purchased 10,500,000 shares of common stock below market
    price. $260,400 in stock based compensation expense was recorded.                                                                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ● | During
    the year ended December 31, 2017, the Company’s chief executive officer was awarded 18.05 million of the Company’s
    common stock for services valued at an aggregate of approximately $19,500,000 (based on the closing price on the grant date),
    in exchange for $9,050 in cash and the remaining amount was recorded as stock based compensation expense
    in the accompanying statement of operations as the amounts was earned through December 31, 2017.



No
retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by the Company
for the benefit of its employees.



The
Company currently does not compensate its directors.



15







Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters



The
following table sets forth, as of December 31, 2018, each person known by the Company to be the beneficial owner of five percent
or more of the Company’s common stock and the director and officer of the Company. The Company does not have any compensation
plans and has not authorized any securities for future issuance. Except as noted, the holder thereof has sole voting and investment
power with respect to the shares shown.



|                                      |  | Amount
    of |             |  | Percent
    of | 
|------------------------------------- |  | ------------- | ----------- |  | -------------- | 
|Name
    and Address                  |  | Beneficial    |             |  | Outstanding    | 
|of
    Beneficial Owner               |  | Ownership     |             |  | Stock
    (1)  | 
|                                      |  |               |             |  |                | 
|Jason
    C. Chang                    |  |               |             |  |                | 
|111
    Vista Creek Circle            |  |               |             |  |                | 
|Sacramento,
    CA 92835              |  |               | 226,036,411 |  |                | 
|                                      |  |               |             |  |                | 
|Dr.
    Ramnik C. Clair               |  |               |             |  |                | 
|111
    Vista Creek Circle            |  |               |             |  |                | 
|Sacramento,
    CA 92835              |  |               | 12,371,500  |  |                | 
|                                      |  |               |             |  |                | 
|All
    Executive officers and        |  |               |             |  |                | 
|Directors
    as a Group ( 2 Persons) |  |               | 238,407,911 |  |                | 



| | (1) | Based
    upon 382,117,449 Shares outstanding as of the date of December 31, 2018.
| | --- | ----------------------------------------------------------------------------------



Item
13. Certain Relationships and Related Transactions and Director Independence



The
mother of Jason C. Chang, the Company’s Chief Executive Officer and a director, received 10,500,000 shares of the Company’s
common stock for work for the period October 2018 through March 2019, which were valued at $189,000 based upon the closing stock
price on the date of grant.



The
combined parents to Jason C. Chang, the Company’s Chief Executive Officer and a director, worked for a combined total of
5,900,000 shares of the Company’s common stock for the year ended December 31, 2017, which were valued at approximately
$7,500,000 upon grant.



The
wife of Dr. Clair, a director of the Company, was issued 1,000,000 shares of the Company’s common stock for the year ended
December 31, 2017 as compensation for services as assistant general manager, which were valued at approximately $1,200,000 upon
grant.



16







During
the year ended December 31, 2017, the Company entered a 19-month lease with the parents of Jason Chang for Corporate office space
at $1,200 per month running through December 2018.



During
the year ended December 31, 2017, the Company recorded compensation to its CEO for the following.



| | ● | During
    the year ended December 31, 2017, the Company’s chief executive officer was awarded 18.05 million of the Company’s
    common stock for services valued at an aggregate of approximately $19,500,000 (based on the closing price on the grant date),
    of which $9,050 was received in cash and the remaining amount was recorded as stock based compensation expense in the accompanying
    statement of operations as the amounts are earned through December 31, 2017.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



During
the year ended December 31, 2018, the Company recorded compensation to its CEO for the following.



| | ● | During
    the year ended December 31, 2018, the Company’s chief executive officer purchased 164.31 million of the Company’s
    common stock below market price for $166,188. $3,426,875 was recorded as stock based compensation expense in the accompanying
    statement of operations.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Sunstock
is not currently required to maintain an independent director as defined by Rule 4200 of the Nasdaq Capital Market nor does it
anticipate that it will be applying for listing of its securities on an exchange in which an independent directorship is required.
It is likely that neither Mr. Chang nor Dr. Clair would not be considered independent directors if it were to do so.



17







Item
14. Principal Accounting Fees and Services



Audit
Fees



The
aggregate fees billed or expected to be billed for each of the last two years for professional services rendered by the independent
registered public accounting firm for the audits of the Company’s annual financial statements review of financial statements
included in the Company’s Form 10-K and Form 10-Q reports, consents and services normally provided in connection with statutory
and regulatory filings or engagements were as follows:



|                   |  | Fiscal
    Year Ended |        |  | Fiscal
    Year Ended |  
|------------------ |  | --------------------- | ------ |  | --------------------- | -
|                   |  | December
    31, 2018 |        |  | December
    31, 2017 |  
|                   |  |                       |        |  |                       |  
|Audit
    Fees     |  |                       |        |  |                       |  
|Hall
    & Company |  | $                     | 65,000 |  |                       | $
|                   |  | $                     | 65,000 |  |                       | $



AUDIT-RELATED
FEES



None.



TAX
FEES



None.



ALL
OTHER FEES



None.



AUDIT
COMMITTEE POLICIES AND PROCEDURES



The
Company does not currently have an audit committee serving and as a result its board of directors performs the duties of an audit
committee. The board of directors will evaluate and approve in advance, the scope and cost of the engagement of an auditor before
the auditor renders audit and non-audit services. The Company does not rely on pre- approval policies and procedures.



18







PART
IV



Item
15. Exhibits, Financial Statement Schedules



(a)
Exhibits



|31      | Certification
    of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|------- | --------------------------------------------------------------------------------------------------------------------------------------
|32      | Certification
    of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|        |                                                                                                                                       
|101.INS | XBRL
    Instance Document                                                                                                            
|101.SCH | XBRL
    Taxonomy Extension Schema                                                                                                    
|101.CAL | XBRL
    Taxonomy Extension Calculation Linkbase                                                                                      
|101.DEF | XBRL
    Taxonomy Extension Definition Linkbase                                                                                       
|101.LAB | XBRL
    Taxonomy Extension Label Linkbase                                                                                            
|101.PRE | XBRL
    Taxonomy Extension Presentation Linkbase                                                                                     



23.1
Consent of Hall & Company – Independent Registered Public Accounting Firm



19







SIGNATURES



Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly authorized.



|                           | SUNSTOCK,
    INC.
|-------------------------- | ------------------
|                           |                   
|Dated:
    October 8, 2019 | By:               
|                           |                   
|                           |                   





|Dated:
    October 8, 2019 | By: | /s/
    Ramnik Clair              
|-------------------------- | --- | ----------------------------------
|                           |     | Ramnik
    Clair                  
|                           |     | Vice
    President, Board MemberDD



Pursuant
to the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.



20







FINANCIAL
STATEMENTS



|Report
    of Independent Registered Public Accounting Firm                                                | F-1
|---------------------------------------------------------------------------------------------------------- | ---
|                                                                                                           |    
|Balance
    Sheets as of December 31, 2018 and 2017                                                        | F-2
|                                                                                                           |    
|Statements
    of Operations for the Years Ended December 31, 2018 and 2017                                | F-3
|                                                                                                           |    
|Statements
    of Changes in Stockholders’ Equity (Deficit) for the Years Ended December 31, 2018 and 2017 | F-4
|                                                                                                           |    
|Statements
    of Cash Flows for the Years Ended December 31, 2018 and 2017                                | F-5
|                                                                                                           |    
|Notes to Financial Statements                                                                              | F-6



21







Report
of Independent Registered Public Accounting Firm



To
the shareholders and the board of directors of Sunstock, Inc.



Opinion
on The Financial Statements



We
have audited the accompanying consolidated balance sheets of Sunstock, Inc. and subsidiaries (the “Company”) as of
December 31, 2018 and 2017, the related consolidated statements of operations, stockholders’ equity(deficit) and cash flows
for each of the two years in the period ended December 31, 2018, and the related notes (collectively referred to as the “financial
statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position
of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the two years
in the period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.



Emphasis
of Matter Regarding Going Concern



The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has an accumulated
deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these
matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty.



Basis
for Opinion



These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.



We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not
for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no opinion.



Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.



/s/
Hall & Company

We
have served as the Company’s auditor since 2014

Irvine,
CA

June
19, 2019



F-1







SUNSTOCK,
INC.

CONSOLIDATED
BALANCE SHEETS



|                                                                                                                                                                                               |  | December
    31, 2018 |             |   | December
    31, 2017 |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | ----------- | - | --------------------- | -
|                                                                                                                                                                                               |  |                       |             |   |                       |  
|ASSETS                                                                                                                                                                                         |  |                       |             |   |                       |  
|Current
    assets                                                                                                                                                                             |  |                       |             |   |                       |  
|Cash                                                                                                                                                                                           |  | $                     | 84,439      |   |                       | $
|Accounts
    receivable                                                                                                                                                                        |  |                       | 788         |   |                       |  
|Inventory
    - products                                                                                                                                                                       |  |                       | -           |   |                       |  
|Inventory
    – metals and coins                                                                                                                                                               |  |                       | 379,781     |   |                       |  
|Prepaid
    expenses                                                                                                                                                                           |  |                       | 575,750     |   |                       |  
|Total
    Current Assets                                                                                                                                                                       |  |                       | 1,040,758   |   |                       |  
|                                                                                                                                                                                               |  |                       |             |   |                       |  
|Property
    and equipment-net                                                                                                                                                                 |  |                       | 15,919      |   |                       |  
|                                                                                                                                                                                               |  |                       |             |   |                       |  
|Total
    assets                                                                                                                                                                               |  | $                     | 1,056,677   |   |                       | $
|                                                                                                                                                                                               |  |                       |             |   |                       |  
|LIABILITIES
    AND STOCKHOLDERS’ DEFICIT                                                                                                                                                      |  |                       |             |   |                       |  
|Current
    liabilities                                                                                                                                                                        |  |                       |             |   |                       |  
|Accounts
    payable and accrued expenses                                                                                                                                                      |  | $                     | 365,905     |   |                       | $
|Loan
    payable - related parties                                                                                                                                                             |  |                       | 201,976     |   |                       |  
|Convertible
    notes payable, net of discount                                                                                                                                                 |  |                       | 1,037,316   |   |                       |  
|Derivative
    liability - conversion feature                                                                                                                                                  |  |                       | 2,356,887   |   |                       |  
|Total
    Current Liabilities                                                                                                                                                                  |  |                       | 3,962,084   |   |                       |  
|                                                                                                                                                                                               |  |                       |             |   |                       |  
|Total
    liabilities                                                                                                                                                                          |  |                       | 3,962,084   |   |                       |  
|                                                                                                                                                                                               |  |                       |             |   |                       |  
|Stockholders’
    deficit                                                                                                                                                                      |  |                       |             |   |                       |  
|Preferred
    stock; $0.0001 par value, 20,000,000 shares authorized; zero shares issued and outstanding                                                                                       |  |                       | -           |   |                       |  
|Common
    stock, $0.0001 par value, 8,000,000,000 shares authorized; 382,117,449 and 47,853,638 shares issued and outstanding as of
    December 31, 2018 and December 31, 2017, respectively |  |                       | 38,212      |   |                       |  
|Additional
    paid - in capital                                                                                                                                                               |  |                       | 49,816,650  |   |                       |  
|Accumulated
    deficit                                                                                                                                                                        |  |                       | (52,760,269 | ) |                       |  
|                                                                                                                                                                                               |  |                       |             |   |                       |  
|Total
    stockholders’ deficit                                                                                                                                                                |  |                       | (2,905,407  | ) |                       |  
|Total
    liabilities and stockholders’ deficit                                                                                                                                                |  | $                     | 1,056,677   |   |                       | $



The
accompanying notes are an integral part of the financial statements



F-2







SUNSTOCK,
INC.

CONSOLIDATED
STATEMENTS OF OPERATIONS



|                                                                             |  | For
    the Years ended December 31, |            
|---------------------------------------------------------------------------- |  | ------------------------------------ | -----------
|                                                                             |  | 2018                                 |            
|                                                                             |  |                                      |            
|Revenues                                                                     |  | $                                    | 414,565    
|Cost
    of revenue                                                          |  |                                      | 375,961    
|Gross
    profit (loss)                                                      |  |                                      | 38,604     
|                                                                             |  |                                      |            
|Operating
    expenses                                                       |  |                                      |            
|Professional
    fees                                                        |  |                                      | 2,070,059  
|Compensation                                                                 |  |                                      | 3,185,349  
|Other
    operating expenses                                                 |  |                                      | 88,433     
|                                                                             |  |                                      |            
|Operating
    loss                                                           |  |                                      | (5,305,237 
|Other
    income (expense):                                                  |  |                                      |            
|Unrealized
    gain (loss) on investments in precious metals                 |  |                                      | (26,147    
|Gain
    from bargain purchase price                                         |  |                                      | 34,175     
|Interest
    expense                                                         |  |                                      | (1,091,813 
|Loss
    from settlement of debt                                             |  |                                      | (840,058   
|Changes
    in fair value of derivative liability                            |  |                                      | (2,207,585 
|                                                                             |  |                                      |            
|Loss
    before income tax                                                   |  |                                      | (9,436,665 
|Income
    tax                                                               |  |                                      | 800        
|                                                                             |  |                                      |            
|Net
    loss                                                                 |  | $                                    | (9,437,465 
|                                                                             |  |                                      |            
|Loss
    per share - basic and diluted                                       |  | $                                    | (0.09      
|                                                                             |  |                                      |            
|Weighted
    average number of common shares outstanding - basic and diluted |  |                                      | 101,889,507



The
accompanying notes are an integral part of the financial statements



F-3









SUNSTOCK,
INC.

CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLERS’ EQUITY (DEFICIT)

For
the Years Ended December 31, 2018 and 2017



|                                                                                                    |  |        |             |  | Common |   |        | Additional
    Paid- |  |   | Accumulated |  |  |       |            
|--------------------------------------------------------------------------------------------------- |  | ------ | ----------- |  | ------ | - | ------ | -------------------- |  | - | ----------- |  |  | ----- | -----------
|                                                                                                    |  | Shares |             |  | Stock  |   |        | In
    Capital       |  |   | Deficit     |  |  | Total |            
|Balance
    at December 31, 2016                                                                    |  |        | 18,927,638  |  |        | $ | 1,892  |                      |  | $ | 7,324,630   |  |  | $     | (7,046,262 
|Issuance
    of common stock for cash                                                               |  |        | 17,859      |  |        |   | 2      |                      |  |   | 19,568      |  |  |       | -          
|Issuance
    of common stock for convertible notes                                                  |  |        | 200,000     |  |        |   | 20     |                      |  |   | 18,500      |  |  |       | -          
|Estimated
    fair value of common stock issued for services, including shares issued in prior year |  |        | 28,708,141  |  |        |   | 2,871  |                      |  |   | 35,181,147  |  |  |       | -          
|Net
    loss                                                                                        |  |        | -           |  |        |   | -      |                      |  |   | -           |  |  |       | (36,276,542
|Balance
    at December 31, 2017                                                                    |  |        | 47,853,638  |  |        |   | 4,785  |                      |  |   | 42,543,835  |  |  |       | (43,322,804
|Issuance
    of common stock for cash                                                               |  |        | 7,341,755   |  |        |   | 734    |                      |  |   | 127,204     |  |  |       | -          
|Issuance
    of common stock for related party note payable (including expense of $729,220)         |  |        | 33,300,000  |  |        |   | 3,330  |                      |  |   | 775,890     |  |  |       | -          
|Issuance
    of common stock for convertible notes                                                  |  |        | 35,403,811  |  |        |   | 3,541  |                      |  |   | 1,101,216   |  |  |       | *          
|Estimated
    fair value of common stock issued for services                                        |  |        | 258,218,245 |  |        |   | 25,822 |                      |  |   | 5,268,505   |  |  |       | -          
|Net
    loss                                                                                        |  |        |             |  |        |   |        |                      |  |   |             |  |  |       | (9,437,465 
|Balance
    at December 31, 2018                                                                    |  |        | 382,117,449 |  |        | $ | 38,212 |                      |  | $ | 49,816,650  |  |  | $     | (52,760,269



The
accompanying notes are an integral part of the financial statements



F-4









SUNSTOCK,
INC.

CONSOLIDATED
STATEMENTS OF CASH FLOWS



|                                                                                                  |  | For
    the Years ended |           
|------------------------------------------------------------------------------------------------- |  | ----------------------- | ----------
|                                                                                                  |  | December
    31, 2018   |           
|OPERATING
    ACTIVITIES                                                                          |  |                         |           
|Net
    loss                                                                                      |  | $                       | (9,437,465
|Adjustments
    to reconcile net loss to net cash used in operating activities                    |  |                         |           
|Loss
    on subscription receivable                                                               |  |                         | -         
|Change
    in fair value of derivative liability                                                  |  |                         | 2,207,585 
|Unrealized
    (gain) loss on investment in precious metals                                       |  |                         | 26,147    
|Depreciation                                                                                      |  |                         | 32,462    
|Excess
    of fair value of common stock issued to related party upon conversion of notes payable |  |                         | 729,220   
|Amortization
    of debt discount and issuance costs                                              |  |                         | 434,451   
|Common
    stock issued for services including amortization of prepaid consulting                 |  |                         | 5,294,327 
|Excess
    fair value of derivative                                                               |  |                         | -         
|Increase
    in notes payable due to default penalties                                            |  |                         | 563,486   
|Bargain purchase gain                                                                             |  |                         | (34,175   
|Changes
    in operating assets and liabilities                                                   |  |                         |           
|Accounts
    receivable                                                                           |  |                         | (788      
|Other
    receivables                                                                             |  |                         | -         
|Inventories
    - products                                                                        |  |                         | 69,340    
|Prepaid
    expenses                                                                              |  |                         | (528,397  
|Accrued
    litigation                                                                            |  |                         | -         
|Accounts
    payable and accrued expenses                                                         |  |                         | 333,845   
|Net
    cash used in operating activities                                                         |  |                         | (309,962  
|INVESTING
    ACTIVITIES                                                                          |  |                         |           
|Inventories
    – metals and coins                                                                |  |                         | (20,947   
|Purchase
    of property and equipment                                                            |  |                         | (27,165   
|Cash
    paid in acquisition                                                                      |  |                         | (16,592   
|Cash
    provided by (used in) investing activities                                               |  |                         | (64,704   
|                                                                                                  |  |                         |           
|FINANCING
    ACTIVITIES                                                                          |  |                         |           
|Proceeds
    from convertible notes payable                                                       |  |                         | 53,000    
|Proceeds
    from note payable from related parties                                               |  |                         | 219,000   
|Proceeds
    from issuance of common stock                                                        |  |                         | 127,938   
|Net
    cash used in financing activities                                                         |  |                         | 399,938   
|                                                                                                  |  |                         |           
|Net
    change in cash                                                                            |  |                         | 25,272    
|Cash,
    beginning of period                                                                     |  |                         | 59,167    
|Cash,
    end of period                                                                           |  | $                       | 84,439    
|                                                                                                  |  |                         |           
|SUPPLEMENTAL
    DISCLOSURE OF CASH FLOW ACTIVITIES:                                              |  |                         |           
|Interest                                                                                          |  | $                       | -         
|Income
    taxes                                                                                  |  | $                       | -         
|                                                                                                  |  |                         |           
|SUPPLEMENTAL
    DISCLOSURE OF NON-CASH                                                           |  |                         |           
|Common
    stock issued as prepaid consulting                                                     |  | $                       | 931,500   
|Shares
    issued in exchange for debt                                                            |  | $                       | 241,163   
|Settlement
                                         of derivative with common stock               |  | $                       | 913,594   
|Fair
    value of derivatives recorded as debt discount                                           |  | $                       | 53,000    



The
accompanying notes are an integral part of the financial statements



F-5













SUNSTOCK,
INC.

NOTES
TO FINANCIAL STATEMENTS



NOTE
1 NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



NATURE
OF OPERATIONS



Sunstock,
Inc. (“Sunstock” or “the Company”) was incorporated on July 23, 2012 under the laws of the State of Delaware
to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. Sunstock may
attempt to locate and negotiate with a business entity for the combination of that target company with Sunstock. The combination
will normally take the form of a merger, stock-for-stock exchange or stock-for-assets exchange. In most instances the target company
will wish to structure the business combination to be within the definition of a tax-free reorganization under Section 351 or
Section 368 of the Internal Revenue Code of 1986, as amended. No assurances can be given that Sunstock will be successful in locating
or negotiating with any target company. Sunstock has been formed to provide a method for a foreign or domestic private company
to become a reporting company with a class of securities registered under the Securities Exchange Act of 1934.



On
July 18, 2013, the Company has changed its name from Sandgate Acquisition Corporation to Sunstock, Inc.



On
July 18, 2013, Jason Chang and Dr. Ramnik S. Clair were named as the directors of the Company.



On
October 30, 2013, the Company entered into a Purchase Agreement with Dollar Store Services, Inc. to develop, design and build
out a retail store which the Company opened in February 2014. The Company opened its second retail store in May 2014. On August
21, 2014 the first store was forced to close due to below code electrical wiring the landlord had provided. Perishable inventory
at this store was relocated to the second store as nonperishables were moved into storage along with fixed assets. The Company’s
second store was relocated in December of 2015 under lease running through June 2017 and operated on a month to month lease from
then until the store was closed in September 2018. The Company currently operates no variety retail stores. The Company plans
to continue purchasing more precious metals in silver and currently searching for a hotel in the Central California are as their
previous selection in escrow during the 4th quarter of 2017 did not close.



On
October 22, 2018, Sunstock, Inc. acquired all assets and liabilities of Mom’s Silver Shop (see NOTE 11), Inc. of
Sacramento, California. Included in the assets acquired was approximately $60,000 in precious metals inventory and approximately
$13,000 in net fixtures. Also included were any licenses and permits, customer lists, logo, trade names, signs, and websites.
Financing of the purchase was by $20,056 cash, $33,000 unsecured note payable with principle payments of $1,000 per week for 33
weeks starting January 1, 2019 with 4.5% annual interest accrued on the unpaid balance (total accrued interest due August 27,
2019), and the assumption of liabilities and lease obligations. Mom’s Silver Shop had unaudited net revenues of approximately
$4,800,000 for the year ended December 31, 2015, $4,000,000 for the year ended December 31, 2016, $3,800,000 for the year ended
December 31, 2017, and $2,500,000 in 2018 to the date of acquisition. Mom’s Silver Shop specializes in buying and selling
gold, silver, and rare coins, and is one of the leading precious metals retailers in the greater Sacramento metropolitan area.



BASIS
OF PRESENTATION



The
summary of significant accounting policies presented below is designed to assist in understanding the Company’s financial
statements. Such financial statements and accompanying notes are the representations of the Company’s management, who are
responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted
in the United States of America (“GAAP”) in all material respects, and have been consistently applied in preparing
the accompanying financial statements.





F-6







USE
OF ESTIMATES



The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements,
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant estimates made by the Company’s management include realizability and valuation of inventories and value of stock-based
transactions.



CONCENTRATION
OF RISK



Financial
instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places
its cash with high quality banking institutions. The Company did not have cash balances in excess of the Federal Deposit Insurance
Corporation limit as of December 31, 2018 and 2017.



INVENTORIES



Inventories
– metals and coins consist primarily of silver and small amounts of gold held for sale and stated at fair value and coins
stated at lower of cost or market. Currently, the Company anticipates holding its precious metals as a long-term investment. Depending
on market conditions, the Company anticipates holding its silver holdings until the market price exceeds $50 per ounce. Likewise,
the Company does not plan to sell its gold holdings unless the market price exceeds $2,500 per ounce. The Company acquired collectible
coins in the purchase of Mom’s Silver Shop. Collectible coins are purchased and then sold at a markup.



At
each balance sheet date, the Company evaluates its ending inventory quantities on hand and on order and records a provision for
excess quantities and obsolescence. Among other factors, the Company considers historical demand and forecasted demand in relation
to the inventory on hand, competitiveness of product offerings, market conditions and product life cycles when determining obsolescence
and net realizable value. In addition, the Company considers changes in the market value of components in determining the net
realizable value of its inventory. Provisions are made to reduce excess or obsolete inventories to their estimated net realizable
values. Once established, write-downs are considered permanent adjustments to the cost basis of the excess or obsolete inventories.



PRECIOUS
METALS AND COINS



Inventories
– silver principally include bullion and bullion coins and are acquired and initially recorded at fair market value. The
fair market value of the bullion and bullion coins is comprised of two components: 1) published market values attributable to
the costs of the raw precious metal, and 2) a published premium paid at acquisition of the metal. The premium is attributable
to the additional value of the product in its finished goods form and the market value attributable solely to the premium may
be readily determined, as it is published by multiple reputable sources. The Company’s inventory - silver are subsequently
recorded at their fair market values on a quarterly basis. The fair value of the inventory is determined using pricing and data
derived from the markets on which the underlying commodities are traded. Precious metals commodities inventory are classified
in Level 1 of the valuation hierarchy.



The
change in fair value of the precious metals was included in the financial statements herein as recorded on the Company’s
Statements of Operations as an Unrealized gain (loss) on investments on precious metals of ($26,147) and $23,327 for the years
ended December 31, 2018 and 2017, respectively.



The
Company acquired Mom’s Silver Shop in October 2018 to enter the market for collectible coins. The Company acquires collectible
coins from both companies and individuals and then marks them up for resale. The inventory is recorded at lower of cost or
market. Inventory can fluctuate in relation to when it is purchased and when it is sold. Inventory was $20,647
at December 31, 2018, which was low due to sales during the holidays.







F-7







PROPERTY
AND EQUIPMENT



Property
and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of 3
to 5 years. Any leasehold improvements are amortized at the lesser of the useful life of the asset or the lease term.



LONG-LIVED
ASSETS



The
Company reviews the carrying values of its long-lived assets for possible impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. If the expected future cash flow from the use of the asset and its eventual
disposition is less than the carrying amount of the asset, an impairment loss is recognized and measured using the fair value
of the related asset. No impairment charges were incurred during the years ended December 31, 2018 and 2017. There can be no assurance,
however, that market conditions will not change or demand for the Company’s services will continue, which could result in
impairment of long-lived assets in the future.



REVENUE
RECOGNITION



On
January 1, 2018, the Company adopted FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts
with Customers(“ASC 606”).The new guidance sets forth a new five-step revenue recognition model which
replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces
of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that
a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an
amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed
disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance.



The
Company’s principal activities from which it generates revenue are product sales. Revenue is measured based on considerations
specified in a contract with a customer. A contract exists when it becomes a legally enforceable agreement with a customer. These
contracts define each party’s rights, payment terms and other contractual terms and conditions of the sale. Consideration
is typically paid at time of sale via credit card, check, or cash when products are sold direct to consumers



A
performance obligation is a promise in a contract to transfer a distinct product to the customer, which for the Company is transfer
of a product to customers. Performance obligations promised in a contract are identified based on the goods that will be transferred
to the customer that are both capable of being distinct and are distinct in the context of the contract, whereby the transfer
of the goods is separately identifiable from other promises in the contract. The Company has concluded the sale of product and
related shipping and handling are accounted for as the single performance obligation.



The
transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the
customer receives the benefit of the performance obligation. The transaction price is determined based on the consideration to
which the Company will be entitled to receive in exchange for transferring goods to the customer. We do not issue refunds.



The
Company recognizes revenue when it satisfies a performance obligation in a contract by transferring control over a product to
a customer when product is shipped based on fulfillment by the Company. Taxes assessed by a governmental authority that are both
imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are
excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred
to a customer are accounted for as a fulfillment cost and are included in cost of product sales. The Company does not accept
returns.



INCOME
TAXES



The
Company accounts for income taxes and the related accounts under the liability method. Deferred tax assets and liabilities are
determined based on the differences between the financial statement carrying amounts and the income tax bases of assets and liabilities.
A valuation allowance is applied against any net deferred tax asset if, based on available evidence, it is more likely than not
that some or all of the deferred tax assets will not be realized. Therefore, the Company has recorded a full valuation allowance
against the net deferred tax assets. The Company’s income tax provision consists of state minimum taxes.



The
Company recognizes any uncertain income tax positions on income tax returns at the largest amount that is more-likely-than-not
to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has
less than a 50% likelihood of being sustained.



The
total unrecognized tax benefit resulting in an increase in deferred tax assets and corresponding increase in the valuation allowance
at December 31, 2018 is $12,501,833. There are no unrecognized tax benefits included in the balance sheet that would, if recognized,
affect the effective tax rate.



The
Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company
had $0 accrued for interest and penalties on each of the Company’s balance sheets at December 31, 2018 and 2017.





F-8









EARNINGS
(LOSS) PER COMMON SHARE



Basic
earnings (loss) per share represent income (loss) available to common stockholders divided by the weighted-average number of common
shares outstanding during the period. Diluted earnings (loss) per share reflects additional common shares that would have been
outstanding if dilutive potential common shares had been issued, as well as any adjustment to income (loss) that would result
from the assumed issuance. The potential common shares that may be issued by the Company relate to outstanding stock options and
have been excluded from the computation of diluted earnings (loss) per share because they would reduce the reported loss per share
and therefore have an anti-dilutive effect.



For
the year ended December 31, 2018 and 2017 there were no potentially dilutive shares that were included in the diluted earnings
(loss) per share as their effect would have been antidilutive for the years then ended.



FAIR
VALUE OF FINANCIAL INSTRUMENTS



The
Company measures the fair value of certain of its financial assets on a recurring basis. A fair value hierarchy is used to rank
the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair
value will be classified and disclosed in one of the following three categories:



Level
1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;



Level
2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar
assets and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can
be corroborated by observable market data for substantially the full term of the assets or liabilities; and



Level
3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of
the assets or liabilities.



At
December 31, 2018 and 2017, the Company’s financial instruments include cash, accounts receivable and accounts payable.
The carrying amount of cash and accounts payable approximates fair value due to the short-term maturities of these instruments.



NOTE
2 - GOING CONCERN



The
Company has not posted operating income since inception. It has an accumulated deficit of approximately $52,800,000 as
of December 31, 2018. These matters raise substantial doubt about the Company’s ability to continue as a going concern.
The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations
to meet its obligations, which it has not been able to accomplish to date, and /or obtain additional financing from its stockholders
and/or other third parties.



These
financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations
and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial
support from its stockholders, the ability of the Company to obtain necessary equity financing to continue operations, successfully
locating and negotiate with a business entity for the combination of that target company with the Company.



There
is no assurance that the Company will ever be profitable. The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that
may result should the Company be unable to continue as a going concern.









F-9







NOTE
3 - RECENT ACCOUNTING PRONOUNCEMENTS



In
June 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-07, Improvements
to Nonemployee Share-Based Payment Accounting (Topic 718). The amendments in the update expand the scope of Topic 718 to include
share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of
Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost
(that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period).
The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services
to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify
that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer, or (2) awards granted
in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts
with Customers. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim
periods within that fiscal year. The Company believes that this will not have a material effect on its financial statements.





In
July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share; Distinguishing Liabilities from Equity; Derivatives and Hedging;
Accounting for Certain Financial Instruments with Down Round Features; Replacement of the Indefinite Deferral for Mandatorily
Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with
a Scope Exception. An entity will no longer have to consider “down round” features (i.e., a provision in an equity-linked
financial instrument or an embedded feature that reduces the exercise price if the entity sells stock for a lower price or issues
an equity-linked instrument with a lower exercise price) when determining whether certain equity-linked financial instruments
or embedded features are indexed to its own stock. An entity that presents earnings per share (EPS) under ASC 260 will recognize
the effect of a down round feature in a freestanding equity-classified financial instrument only when it is triggered. The effect
of triggering such a feature will be recognized as a dividend and a reduction to income available to common shareholders in basic
EPS. The new guidance will require new disclosures for financial instruments with down round features and other terms that change
conversion or exercise prices. The ASU also replaces today’s indefinite deferral of the guidance in ASC 480-10 for certain
mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests
with a scope exception. The amendments in Part I of ASU 2017-11 are effective for fiscal years, and interim periods within those
fiscal years, beginning after December 15, 2018, the amendments in Part II do not require any transition guidance because
those amendments do not have an accounting effect. The Company believes that this will not have a material effect on its financial
statements.





F-10







NOTE
3 - RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)



In
August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows; Classification of Certain Cash Receipts and Cash Payments.The new standard addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice.
The eight issues are: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments
with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration
payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of
corporate-owned life insurance policies, including bank-owned insurance policies; distribution received from equity method investees;
beneficial interests in securitization transactions; separately identifiable cash flows and application of the predominance principle.
The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within fiscal periods
beginning after December 15, 2019. The Company believes that this will not have a material effect on its financial statements.



In
March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers. The new standard clarifies the implementation
guidance on principal versus agent considerations in Topic 606, Revenue from Contracts with Customers. Topic 606 addresses
that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled in exchange for those goods or services. When an entity is a principal
(that is, if it controls the specific good or service before that good or service is transferred to a customer) and satisfies
a performance obligation, the entity recognizes revenue in the gross amount of consideration to which it expects to be entitled
in exchange for the specific good or service transferred to the customer. When an entity is an agent and satisfies a performance
obligation, the entity recognizes revenue in the amount of any fee or commission to which it expects to be entitled in exchange
for arranging for the specific good or service to be provided by the other party. The new standard is effective for annual reporting
periods beginning after December 15, 2017, including interim periods within that reporting period. This standard did not
have a material effect on the Company’s financial statements.



In
February 2016, the FASB issued its new lease accounting guidance in ASU No. 2016-02, Leases (Topic 842). Under the new guidance,
lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement
date: A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted
basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified
asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made
to align, where necessary, lessor accounting with the lessee accounting model and ASC 606, Revenue from Contracts with Customers.
The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize
lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. Public business
entities should apply the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods
within those fiscal years. Early application is permitted. Lessees (for capital and operating leases) must apply a modified retrospective
transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented
in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired
before the earliest comparative period presented. Lessees may not apply a full retrospective transition approach. While we are
currently assessing the impact ASU 2016-02 will have on the financial statements, we expect the primary impact to the financial
position upon adoption will be the recognition, on a discounted basis, of the minimum commitments on the balance sheet under our
noncancelable operating lease resulting in the recording of a right of use asset and lease obligation.





F-11











NOTE
4 – PROPERTY AND EQUIPMENT



|                                    |  | December
    31, 2018 |         |   | December
    31, 2017 |  
|----------------------------------- |  | --------------------- | ------- | - | --------------------- | -
|Furniture
    and equipment         |  | $                     | 58,610  |   |                       | $
|Less
    – accumulated depreciation |  |                       | (42,691 | ) |                       |  
|                                    |  | $                     | 15,919  |   |                       | $



Depreciation
expense for the years ended December 31, 2018 and 2017 was $32,462 and $5,528, respectively.





NOTE
5 - RELATED PARTY BALANCES





The combined parents of Jason Chang, the
Company’s Chief Executive Officer and a director, worked for a combined total of 24,000,000 shares of the Company’s
common stock for the year ended December 31, 2018, which were valued at approximately $539,920 upon grant.



During the year ended December 31, 2018,
Jason Chang, the Company’s Chief Executive Officer and director, was awarded 197,610,000 shares of the Company’s common
stock for services valued at an aggregate of approximately $3,935,647 based on the closing price on the grant date.



During the year ended December 31, 2018,
Ramnik Clair, the Company’s senior VP and a director, was awarded 10,500,000 shares of the Company’s common stock
for services valued at an aggregate of approximately $156,450 based on the closing price on the grant date.



During the year ended December 31, 2018,
the Company was provided loans totaling $219,000 by the Company’s CEO. The loans bear interest at 6% per annum. During the
year ended December 31, 2018, $49,750 of the loans were converted into 33,300,000 shares of the Company’s common stock,
which resulted in a loss from settlement of debt of $840,058. In connection with the acquisition of Mom’s Silver Shop, the
Company incurred a $33,000 note payable to the former owner of Mom’s Silver Shop.



During
the year ended December 31, 2017, the Company’s chief executive officer was awarded 18.05 million of the Company’s
common stock for services valued at an aggregate of approximately $19,500,000 (based on the closing price on the grant date),
in exchange for $9,050 in cash and the remaining amount was recorded as stock based compensation expense
in the accompanying statement of operations as the amount was earned through December 31, 2017.



The
combined parents to Jason C. Chang, the Company’s Chief Executive Officer and a director, worked for a combined total of
5,900,000 shares of the Company’s common stock for the year ended December 31, 2017, which were valued at approximately
$7,500,000 upon grant.



During
the year ended December 31, 2017, the Company entered a 19-month lease with the parents of Jason Chang for Corporate office space
at $1,200 per month running through December 2018.



The
wife of Dr. Clair, a director of the Company, was issued 1,000,000 shares of the Company’s common stock for the year ended
December 31, 2017 as compensation for services as assistant general manager, which were valued at approximately $1,200,000
upon grant.



F-12







NOTE
6 – COMMITMENTS AND CONTINGENCIES



The
Company entered into a lease agreement in December 2015 for 2,700 square feet of retail shop space to replace their previous location.
The lease required combined monthly payments of base rent of $1,950 for six months beginning January 2015 with an option for an
additional one year running through June of 2017. The Company continued to operate at this location on a month to month agreement
for $2,100 per month through September 2018.



During
the quarter ended June 30, 2017, the Company entered a 19-month lease with the parents of Jason Chang for Corporate office space
at $1,200 per month running through December 2018.



The
Company entered into a lease agreement in October 2018 for 1,088 square feet of retail shop space for Mom’s Silver Shop.
The lease requires combined monthly payments of base rent and triple net of $1,866 per month for sixty months.



The
Company entered into a lease agreement in October 2018 for the lease of equipment for Mom’s Silver Shop. The lease is for
three years at $60.93 per month.



Future
minimum lease payments are as follows:



|Year
    Ended December 31, |       
|--------------------------- | ------
|2019                        |       
|$                           | 16,469



LITIGATION



In
December 2013, the Company issued 75,000 shares of common stock to a third party (the “Shareholder”) for consideration
of $16,000. Such consideration was received directly by Jason Chang, CEO, and was not deposited into the Company’s bank
account. As the funds had not been received by the Company, such amounts have been recorded as compensation to Mr. Chang as of
December 31, 2014 (see Note 5). In April 2014, the Company received notice from the Shareholder that he had filed a lawsuit against
the Company and its CEO relating to the delay in the complainants’ stock reaching public listing services. The Company had
made efforts to settle this issue, without an agreement being reached. As such, the Company has recorded a loss contingency based
on its best estimate of all costs to be incurred for the ultimate settlement of this matter. The Company had settled on the amount
$82,660. Repayment was made in December 2017 for $90,000.



On
June 18, 2018, Power Up Lending Group, LTD. (“Power Up”), filed in the Supreme Court of the State of New York that
Sunstock and Jason Chang (president and CFO of Sunstock and board member) and Rammk Clair (board member of Sunstock) materially
breached the October 24, 2017, December 19, 2017, and April 16, 2018 notes payable to Power Up by, in June 2018, changing Sunstock’s
transfer agent in violation of the Notes and Agreements, and existing letter of instructions and authorizations, refusing to provide
a replacement irrevocable letter of instruction from the newly appointed transfer agent and also failing to maintain sufficient
reserves of stock so as to permit and accommodate the conversion requests of Power Up to go forward. Power Up has requested judgment
against Sunstock for $160,180 with default interest, judgment against Sunstock for reasonable legal fees and costs of litigation,
three judgments against Jason Chang and Rammk Clair for $160,180 and interest for each judgment, and a temporary restraining order
and a preliminary and permanent injunction directing Sunstock, Jason Chang, and Rammk Clair to take all steps necessary and proper
to permit the conversion of debt into stock and to deliver the stock to Power Up.



On
June 22, 2018, EMA Financial, LLC (“EMA”) sent a letter to Sunstock stating that Sunstock was in default on the June
5, 2017 note payable and the October 11, 2017 note payable to EMA. Among other defaults, the letter stated that Sunstock was in
default due to refusing to provide a replacement irrevocable letter of instruction from the newly appointed transfer agent and
also failing to maintain sufficient reserves of stock. The letter asks for at least $332,884.



On
December 26, 2018, EMA filed a lawsuit in Federal Court for breach of contract.



On
July 9, 2018, the attorney for Auctus Fund, LLC (“Auctus”) sent a letter to Sunstock stating that Sunstock was in
default on the May 24, 2017 note payable and the October 11, 2017 note payable to Auctus. Among other defaults, the letter stated
that Sunstock was in default due to changing Sunstock’s transfer agent in violation of the note, and existing letter of
instructions and authorizations, refusing to provide a replacement irrevocable letter of instruction from the newly appointed
transfer agent and also failing to maintain sufficient reserves of stock so as to permit and accommodate the conversion requests
of Auctus to go forward. The letters ask for at least $277,397 regarding the May 24, 2017 note payable and at least $299,247 regarding
the October 11, 2017 note payable. On December 26, 2018, AUCTUS filed a lawsuit in Federal Court for breach of contract.



On
July 10, 2018, the attorney for Crown Bridge Partners, LLC (“Crown Bridge”), sent a letter to Sunstock stating that
Sunstock was in default on the December 8, 2017 note payable to Crown Bridge. The letter stated that Sunstock was in default due
to changing Sunstock’s transfer agent in violation of the note, and existing letter of instructions and authorizations,
refusing to provide a replacement irrevocable letter of instruction from the newly appointed transfer agent and also failing to
maintain sufficient reserves of stock so as to permit and accommodate the conversion requests of Crown Bridge to go forward. The
letter requested that Sunstock immediately contact Crown Bridge to demonstrate compliance with the note. On August 15, 2018, the
attorney for Crown Bridge sent another letter to Sunstock stating that Sunstock owed Crown Bridge $221,470, and that if Sunstock
did not respond by August 21, 2018 in regards to payment, then a lawsuit would be filed. No lawsuit has been filed as of June
18, 2019 to the Company’s knowledge.



On
March 7, 2019, the United States Court of Massachusetts issued electronic order 38 stating that the Court granted on the merits
summary judgement on violation of contract claims for the plaintiffs (Auctus Fund, LLC and EMA Financial, LLC) and found Sunstock
in default.



On
May 6, 2019, the United States District Court of the District of Massachusetts issued an Order to Show Cause in the case of Auctus
Fund, LLC and EMA Financial, LLC Vs. Sunstock, Inc. The Court ordered Auctus to show cause within 21 days why the Court had jurisdiction
at the outset of the case and why the Court ought not to vacate its entry of summary judgement for Auctus, EDF No. 38. The Court
said that it had taken no action with regard to EMA’s claim. The Company is currently awaiting a further issuance by the
Court.



On May 30, 2019, the United States District
Court of Massachusetts issued an order in the case of Auctus Fund, LLC vs. Sunstock, Inc. that the Court was satisfied that Auctus
compliant raised colorable securities law claims and, accordingly, the Court ruled that it had subject matter jurisdiction to
enter summary judgment on Auctus’ contract claims.



INDEMNITIES
AND GUARANTEES



The
Company has made certain indemnities and guarantees, under which it may be required to make payments to a guaranteed or indemnified
party, in relation to certain actions or transactions. The Company indemnifies its directors, officers, employees and agents,
as permitted under the laws of the State of Delaware. In connection with its facility leases, the Company has agreed to indemnify
its lessors for certain claims arising from the use of the facilities. The duration of the guarantees and indemnities varies,
and is generally tied to the life of the agreement. These guarantees and indemnities do not provide for any limitation of the
maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated nor
incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities and guarantees
in the accompanying balance sheets.



F-13









NOTE
7 – OUTSTANDING DEBT



Convertible
notes are as follows as of December 31, 2018:



|                                  |  | Outstanding as of December 31, 2018
                                                                                (1)
                                         (2) |           |  | Debt
    Discount |   |        | Net
    Amount |  |   | Interest
    rate |  |  | Accrued
    Interest |    |   | Maturity
    (2) |  
|--------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------- |  | ----------------- | - | ------ | -------------- |  | - | ----------------- |  |  | -------------------- | -- | - | ---------------- | -
|Auctus
    May 24, 2017           |  | $                                                                                                                                                                    | 239,551   |  |                   | $ | -      |                |  | $ | 239,551           |  |  |                      | 12 | % |                  | $
|EMA
    June 5, 2017              |  |                                                                                                                                                                      | 166,442   |  |                   |   | -      |                |  |   | 166,442           |  |  |                      | 10 | % |                  |  
|Auctus
    October 11, 2017       |  |                                                                                                                                                                      | 212,500   |  |                   |   | (982   | )              |  |   | 211,518           |  |  |                      | 12 | % |                  |  
|EMA
    October 11, 2017          |  |                                                                                                                                                                      | 166,442   |  |                   |   | (982   | )              |  |   | 165,460           |  |  |                      | 12 | % |                  |  
|Power
    Up October 21, 2017     |  |                                                                                                                                                                      | 1,770     |  |                   |   | (981   | )              |  |   | 789               |  |  |                      | 12 | % |                  |  
|Crown
    Bridge December 8, 2017 |  |                                                                                                                                                                      | 97,500    |  |                   |   | (982   | )              |  |   | 96,518            |  |  |                      | 8  | % |                  |  
|Power
    Up December 21, 2017    |  |                                                                                                                                                                      | 79,500    |  |                   |   | (981   | )              |  |   | 78,519            |  |  |                      | 12 | % |                  |  
|Power
    Up April 16, 2018       |  |                                                                                                                                                                      | 79,500    |  |                   |   | (981   | )              |  |   | 78,519            |  |  |                      | 12 | % |                  |  
|                                  |  | $                                                                                                                                                                    | 1,043,205 |  |                   | $ | (5,889 | )              |  | $ | 1,037,316         |  |  |                      | -  |   |                  | $
|Derivative
    liability          |  | $                                                                                                                                                                    | 2,356,887 |  |                   |   |        |                |  |   |                   |  |  |                      |    |   |                  |  





(1)
Included in this amount are estimated aggregate penalties of approximately $563,486 resulting from various events of default.
The related penalties are estimates and the actual amounts to be paid could be significantly different. See discussions in NOTE
6.



(2)
All notes are currently in default and due on demand and the Company is currently in litigation with all noteholders.



During
the year ended December 31, 2018, the Company recorded an aggregate of approximately $173,000 of debt discount to interest expense.



During
the year ended December 31, 2017, the Company recorded an aggregate of approximately $560,000 of debt discount and $550,000 of
excess derivative fair value to interest expense upon issuance of the convertible notes.



On
May 24, 2017, the Company entered a Convertible Promissory Note with Auctus Fund, LLC., (“Auctus”) in the principle
amount of $112,250 (the “Auctus Note”) The Auctus Note bears interest at the rate of 12% per annum (24% upon an event
of default) and was due and payable on February 24, 2018. The note is currently in default. The principle amount of the Auctus
Note and all accrued interest is convertible at the option of the holder at the lower of (a) 55% multiplied by the average of
the two lowest trading prices during the 25 trading days prior to the date of the note and (b) 55%, (a 45% discount) multiplied
by the average market price (the trading period preceding 25 days of the conversion date). The variable conversion term was a
derivative liability and the Company recorded approximately $100,000 of debt discount upon issuance. The prepayment amount ranges
from 135% to 140% of the outstanding principle plus accrued interest of the note, depending on when such prepayment is made. In
addition, the Company recognized issuance costs of $12,750 on the funding date and amortized such costs as interest expense over
the term of the note. The Company recorded approximately $159,000 in default penalty that was added to the note as of December
31, 2018.



F-14









NOTE
7 – OUTSTANDING DEBT (CONTINUED)



On
June 5, 2017, the Company entered a Convertible Promissory Note with EMA Financial, LLC., (“EMA”) in the principle
amount of $115,000 (the “EMA Note”). The EMA Note bears interest at the rate of 10% per annum (24% upon an event of
default) and is due and payable on June 5, 2018. The principle amount of the EMA Note and all accrued interest is convertible
at the option of the holder at the lower of (a) the closing sales price 50% and (b) (a 50% discount) multiplied by the average
market price (the trading period preceding 25 days of the conversion date) or the closing bid price. The variable conversion term
was a derivative liability, see Note 7, and the Company recorded approximately $115,000 of debt discount upon issuance and is
amortizing such costs to interest expense over the term of the note. The prepayment amount ranges from 135% to 150% of the outstanding
principle plus accrued interest of the note, depending on when such prepayment is made. In addition, the Company recognized issuance
costs of $6,900 on the funding date and is amortizing such costs as interest expense over the term of the note. The Company recorded
approximately $109,000 in default penalty that was added to the note as of December 31, 2018.



On
October 11, 2017, the Company entered into a securities purchase agreement (“SPA AUC”) with Auctus Fund, LLC, upon
the terms and subject to the conditions of SPA3, we issued a convertible promissory note in the principal amount of $85,000.00
(the “Note”) to Auctus. The Company received proceeds of $77,000.00 in cash from Auctus. Interest accrues on the outstanding
principal amount of the Note at the rate of subject 12% per annum (24% upon an event of default). The Note is due and payable
on July 11, 2018. The Note is convertible into common stock, subject to Rule 144, at any time after the issue date, at the lower
of (i) the closing sale price of the common stock on the on the trading day immediately preceding the closing date, and (ii) 50%
of the lowest sale price for the common stock during the two (2) lowest trading days during the twenty-five (25) Trading Day period
ending on the last complete Trading Day prior to the Conversion Date. The variable conversion term was a derivative liability
and the Company recorded approximately $74,000 of debt discount upon issuance, which is being amortized to interest expense over
the life of the note Regarding the Note, the Company paid Auctus $10,750 for its expenses and legal fees. The Company recorded
approximately $127,000 in default penalty that was added to the note as of December 31, 2018.



On
October 11, 2017, the Company entered into a securities purchase agreement (“SPA4”) with EMA Financial, LLC (“EMA2”),
upon the terms and subject to the conditions of SPA4, we issued a convertible promissory note in the principal amount of $85,000.00
(the “Note4”) to EMA. The Company received proceeds of $79,395.00 in cash from EMA2. Interest accrues on the outstanding
principal amount of the Note4 at the rate of 10% per annum (24% upon an event of default). The Note4 is due and payable on October
11, 2018. The Note4 is convertible into common stock, subject to Rule 144, at any time after the issue date, at the lower of (i)
the closing sale price of the common stock on the on the trading day immediately preceding the closing date, and (ii) 50% of the
lowest sale price for the common stock during the twenty (25) consecutive trading days immediately preceding the conversion date.
The variable conversion term was a derivative liability and the Company recorded approximately $85,000 of debt discount upon issuance,
which is being amortized to interest expense over the life of the note. If the closing sale price at any time fall below $0.17
or less. (as appropriately and equitably adjusted for stock splits, stock dividends, stock contributions and similar events),
then such 50% figure mentioned above shall be reduced to 35%. In connection with the EMA Note, the Company paid EMA2 $5,100 for
its expenses and legal fees. The Company recorded approximately $81,000 in default penalty that was added to the note as of December
31, 2018.





F-15









NOTE
7 – OUTSTANDING DEBT (CONTINUED)



On
October 24, 2017, the Company entered into a securities purchase agreement (“SPA5”) with Powerup Lending Group, LTD
(“POWER”), upon the terms and subject to the conditions of SPA5, we issued a convertible promissory note in the principal
amount of $108,000.00 (the “Note5”) to POWER. The Company received proceeds of $108,000 in cash from POWER. Interest
accrues on the outstanding principal amount of the Note5 at the rate of 12% per annum (22% upon an event of default). The Note5
is due and payable on July 30, 2018. The Note5 is convertible into common stock, subject to Rule 144, at any time after the issue
date, at the lower of (i) the closing sale price of the common stock on the on the trading day immediately preceding the closing
date, and (ii) 61% of the lowest three sale prices for the common stock during the fifteen (15) consecutive trading days immediately
preceding the conversion date. The variable conversion term was a derivative liability and the Company recorded approximately
$108,000 of debt discount upon issuance, which is being amortized to interest expense over the life of the note. If the closing
sale price at any time fall below $0.17 or less. (as appropriately and equitably adjusted for stock splits, stock dividends, stock
contributions and similar events), then such 61% figure mentioned above shall be reduced to 39%. In connection with the Note5,
the Company paid POWER $3,000 for its expenses and legal fees. The Company recorded approximately $590 in default penalty that
was added to the note as of December 31, 2018.



On
December 8, 2017, the Company entered into a securities purchase agreement (“SPA3”) with Crown Bridge Partners, LLC
(“CROWN”), upon the terms and subject to the conditions of SPA6, we issued a convertible promissory note in the principal
amount of $65,000.00 (the “Note6”) to CROWN. The Company received proceeds of $56,000 in cash from CROWN. Interest
accrues on the outstanding principal amount of the Note6 at the rate of 8% per annum (15% upon an event of default). The Note6
is due and payable on December 8, 2018. The Note6 is convertible into common stock, subject to Rule 144, at any time after the
issue date, at the lower of (i) the closing sale price of the common stock on the on the trading day immediately preceding the
closing date, and (ii) 55% of the lowest sale price for the common stock during the twenty (25) consecutive trading days immediately
preceding the conversion date. If the closing sale price at any time fall below $0.10 or less. (as appropriately and equitably
adjusted for stock splits, stock dividends, stock contributions and similar events), then such 55% figure mentioned above shall
be reduced to 45%. The variable conversion term was a derivative liability and the Company recorded approximately $65,000 of debt
discount upon issuance, which is being amortized to interest expense over the life of the note. In connection with the Note6,
the Company paid CROWN $2,500 for its expenses and legal fees. The Company recorded approximately $32,000 in default penalty that
was added to the note as of December 31, 2018.





On
December 21, 2017, the Company entered into a securities purchase agreement (“SPA7”) with Powerup Lending Group, LTD
(“POWER2”), upon the terms and subject to the conditions of SPA7 we issued a convertible promissory note in the principal
amount of $53,000 (the “Note7”) to POWER2. The Company received proceeds of $50,000 in cash from POWER2. Interest
accrues on the outstanding principal amount of the Note7 at the rate of 12% per annum (22% upon an event of default). The Note7
is due and payable on September 30, 2018. The Note7 is convertible into common stock, subject to Rule 144, at any time after the
issue date, at the lower of (i) the closing sale price of the common stock on the on the trading day immediately preceding the
closing date, and (ii) 61% of the lowest three sale prices for the common stock during the fifteen (15) consecutive trading days
immediately preceding the conversion date. If the closing sale price at any time fall below $0.10 or less. (as appropriately and
equitably adjusted for stock splits, stock dividends, stock contributions and similar events), then such 61% figure mentioned
above shall be reduced to 39%. In connection with the Note7, the Company paid POWER2 $3,000 for its expenses and legal fees. The
Company recorded approximately $26,000 in default penalty that was added to the note as of December 31, 2018.





F-16









NOTE
7 – OUTSTANDING DEBT (CONTINUED)



On
April 16, 2018, the Company entered into a securities purchase agreement (“SPA8”) with Powerup Lending Group, LTD
(“POWER3”), upon the terms and subject to the conditions of SPA8 we issued a convertible promissory note in the principal
amount of $53,000.00 (the “Note8”) to POWER3. The Company received proceeds of $50,000 in cash from POWER3. Interest
accrues on the outstanding principal amount of the Note8 at the rate of 12% per annum (22% upon an event of default. The Note8
is due and payable on January 30, 2019. The Note8 is convertible into common stock, subject to Rule 144, at any time after the
issue date, at the lower of (i) the closing sale price of the common stock on the on the trading day immediately preceding the
closing date, and (ii) 61% of the lowest sale price for the common stock during the fifteen (15) consecutive trading days immediately
preceding the conversion date. In connection with the Note8, the Company paid POWER3 $3,000 for its expenses and legal fees. The
Company recorded approximately $26,000 in default penalty that was added to the note as of December 31, 2018.



NOTE
8 – DERIVATIVE LIABILITIES



The
Company evaluates its debt instruments, or other contracts to determine if those contracts or embedded components of those contracts
qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, Derivative Instruments
and Hedging: Contracts in Entity’s Own Equity. The result of this accounting treatment could be that the fair value
of a financial instrument is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded
as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement
of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked
to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially
classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified to a liability account at
the fair value of the instrument on the reclassification date.





The
Company applies the accounting standard that provides guidance for determining whether an equity-linked financial instrument,
or embedded feature, is indexed to an entity’s own stock. The standard applies to any freestanding financial instrument
or embedded features that have the characteristics of a derivative, and to any freestanding financial instruments that are potentially
settled in an entity’s own common stock.



From
time to time, the Company has issued notes with embedded conversion features. Certain of the embedded conversion features contain
price protection or anti-dilution features that result in these instruments being treated as derivatives for accounting purposes.
Accordingly, the Company has classified all conversion features as derivative liabilities as of December 31, 2018, and has estimated
the fair value of these embedded conversion features using a binomial options pricing model with the following assumptions:





|                            |  | For
    the Year endedDecember 31,
    2018 |                                                      
|--------------------------- |  | ------------------------------------------- | -----------------------------------------------------
|                            |  |                                             |                                                      
|Annual
    Dividend yield   |  |                                             | 0                                                    
|Expected
    life (years)   |  |                                             | 0.75                                                 
|Risk-free
    interest rate |  |                                             | 2.09%
                                         - 2.63
|Expected
    volatility     |  |                                             | 207%
                                         - 408  





F-17







NOTE
8 – DERIVATIVE LIABILITIES (CONTINUED)



The
following table presents the changes in fair value of our embedded conversion features measured at fair value on a recurring basis
for the year ended December 31, 2018:



|Balance
    December 31, 2017                      |  | $ | 1,009,896 |  
|-------------------------------------------------- |  | - | --------- | -
|Allocation of derivative recorded as debt discount |  |   | 53,000    |  
|Settlement
    due to conversions                  |  |   | (913,594  | )
|Change
    in fair value                           |  |   | 2,207,585 |  
|Balance
    as of December 31, 2018                |  | $ | 2,356,887 |  



NOTE
9 - STOCKHOLDER’S EQUITY (DEFICIT)



The
Company is authorized to issue 8,000,000,000 shares of common stock and 20,000,000 of preferred stock.



During
the year ended December 31, 2018, the Company received an aggregate of $127,938 from the issuance of 7,341,755 shares of its common
stock.



During
the year ended December 31, 2018, the Company converted $184,949 of notes payable and $6,214 of accrued interest
into 35,403,811 shares of its common stock. The fair value of the shares, derivative liability and accelerated discount
resulted in a loss of approximately $110,000.



During the year ended December 31, 2018, the
Company converted $50,000 of notes payable to officer into 33,300,000 shares of its common stock, which resulted in a loss
from settlement of debt of $729,220.



During
the year ended December 31, 2018, the Company issued 258,218,245 shares of its common stock for services with a fair market value
of $5,294,327, of which $357,750 was expensed in the year ended December 31, 2018 and $573,750 was prepaid expense at December
31, 2018



During
the year ended December 31, 2017, the Company received an aggregate of $13,570 (net of approximately $6,000 subscription receivable
forgiven) from the issuance of 17,589 shares of its common stock. In addition, the Company issued upon conversion of issued notes
payable and accrued interest of approximately $18,500 for convertible notes in relation to 200,000 shares of common stock.



During
the year ended December 31, 2017, the Company issued 28,708,141 shares of fully vested non-forfeitable shares of common stock
to certain employees and consultants for future services. The fair value of the shares issued was determined to be approximately
$32,660,000, and the remaining amount was recorded as prepaid consulting. During the year ended December 31, 2017, the Company
amortized approximately $32,642,000 to stock based compensation expense related to these issuances. In addition, the Company recorded
approximately $2,520,000 of compensation expense in 2017 related to the vesting of shares issued in 2016.





During
the year ended December 31, 2017, the Company’s chief executive officer was awarded 18.05 shares million of the Company’s
common stock for services valued at an aggregate of approximately $19,500,000 (based on the closing price on the grant
date), in exchange for $9,050 in cash and the remaining amount was recorded as stock based compensation
expense in the accompanying statement of operations as the amount was earned through December 31, 2017.



F-18









NOTE
9 - STOCKHOLDER’S EQUITY (DEFICIT) (CONTINUED)



During
2016, the Company issued an aggregate of 330,000 shares of fully vested non-forfeitable shares of common stock to certain consultants
of the Company to be earned over a one-year period. The Company also received proceeds of $720. The shares were valued at $403,500
(based on the closing market price on the measurement date) and have been recorded as prepaid consulting in the accompanying condensed
balance sheet. The Company has amortized $376,330 of such expense during the year ended December 31, 2016 and $27,170 during the
year ended December 31, 2017.



NOTE
10 - INCOME TAXES



The
Company is subject to taxation in the United States of America and the state of California. The provision for income taxes for
the years ended December 31, 2018 and 2017 is summarized below:



|                                  |  | December
    31, 2018 |             |   | December
    31, 2017 |  
|--------------------------------- |  | --------------------- | ----------- | - | --------------------- | -
|Current:                          |  |                       |             |   |                       |  
|Federal                           |  | $                     | -           |   |                       | $
|State                             |  |                       | 800         |   |                       |  
|Total
    current                 |  |                       | 800         |   |                       |  
|Deferred:                         |  |                       |             |   |                       |  
|Federal                           |  |                       | 9,810,841   |   |                       |  
|State                             |  |                       | 2,690,992   |   |                       |  
|Change
    in valuation allowance |  |                       | (12,501,833 | ) |                       |  
|Total
    deferred                |  |                       | -           |   |                       |  
|Income
    tax provision(benefit) |  | $                     | 800         |   |                       | $



A
reconciliation of income taxes computed by applying the statutory U.S. income tax rate to the Company’s loss before income
taxes to the income provision is as follows:



|                                    |  | December
    31, 2018 |          |    | December
    31, 2017 | 
|----------------------------------- |  | --------------------- | -------- | -- | --------------------- | 
|U.S.
    federal statutory tax rate |  |                       | 21.00    | %  |                       | 
|State
    tax benefit, net          |  |                       | (0.0085  | )% |                       | 
|Stock
    based compensation        |  |                       | (11.1472 | )% |                       | 
|Other                               |  |                       | 0.00     | %  |                       | 
|Valuation
    allowance             |  |                       | (9.8494  | )% |                       | 
|Effective
    income tax rate       |  |                       | (0.0085  | )% |                       | 



F-19











NOTE
10 INCOME TAXES (CONTINUED)



Deferred
tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred
tax assets are as follows:



|                                  |  | December
    31, 2018 |             |   | December
    31, 2017 |  
|--------------------------------- |  | --------------------- | ----------- | - | --------------------- | -
|Deferred
    tax assets:          |  |                       |             |   |                       |  
|NOL’s                             |  | $                     | 1,621,187   |   |                       | $
|State
    taxes                   |  |                       | -           |   |                       |  
|Inventory
    and other reserves  |  |                       | -           |   |                       |  
|Depreciation
    and amortization |  |                       | -           |   |                       |  
|NQ
    stock option expense       |  |                       | 10,880,646  |   |                       |  
|Total
    deferred tax assets     |  |                       | 12,501,833  |   |                       |  
|Valuation
    allowance           |  |                       | (12,501,833 | ) |                       |  
|Net
    deferred tax assets       |  | $                     | -           |   |                       | $





Realization
of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Accordingly, the
net deferred tax assets have been fully offset by a valuation allowance. The valuation allowance decreased by approximately $2,300,000
for the year ended December 31, 2018.



As
of December 31, 2018, the Company had net operating loss carryforwards for federal income tax purposes of approximately $1,300,000
which expire beginning in the year 2032. As of December 31, 2018, the Company had net operating loss carryforwards for state income
tax purposes of approximately $325,000 which expire beginning in the year 2032.



Utilization
of the net operating losses may be subject to substantial annual limitation due to federal and state ownership change limitations
provided by the Internal Revenue Code and similar state provisions. Such annual limitations could result in the expiration of
the net operating losses ad credits before their utilization. The Company has not performed an analysis to determine the limitation
of the net operating loss carryforwards.



NOTE
                                         11. PURCHASE OF MOM’S SILVER SHOP



On October 22, 2018, Sunstock, Inc. acquired all assets and liabilities of Mom’s Silver Shop, Inc. of
Sacramento, California. Included in the assets acquired was approximately $60,000 in precious metals inventory and approximately
$13,000 in net fixtures. Also included were any licenses and permits, customer lists, logo, trade names, signs, and websites. Financing
of the purchase was by $16,592 cash, $33,000 unsecured note payable with principle payments of $1,000 per week for 33 weeks starting
January 1, 2019 with 4.5% annual interest accrued on the unpaid balance (total accrued interest due August 27, 2019), and the assumption
of liabilities and lease obligations. Mom’s Silver Shop had unaudited net revenues of approximately $3,800,000 for the year
ended December 31, 2017, and $2,500,000 in 2018 to the date of acquisition. Mom’s Silver Shop specializes in buying and selling
gold, silver, and rare coins, and is one of the leading precious metals retailers in the greater Sacramento metropolitan area,
which compliments our precious metals business.



The
following summarizes the transaction with Mom’s Silver Shop at closing on October 22, 2018:



|Prepaid expenses                    |  | $ | 10,449 |  
|----------------------------------- |  | - | ------ | -
|Inventory – coins                   |  |   | 60,549 |  
|Property & equipment, net           |  |   | 13.279 |  
|Total Assets                        |  | $ | 84,277 |  
|                                    |  |   |        |  
|Accounts payable & accrued expenses |  |   | (558   | )
|Net Purchase                        |  | $ | 83,719 |  



The Company paid $16,592 cash and issued a note payable in the amount of $32,976 to the owners of Mom’s
Silver Shop.



The
following unaudited supplemental pro forma information for the year ended December 31, 2018.7 and the year ended December 31,
2017 assumes the acquisition of Mom’s Silver Shop had occurred as of January 1, 2018 and 2017, giving effect to purchase
accounting adjustments such as amortization of intangible assets. The pro forma data is for informational purposes only and may
not necessarily reflect the actual results of operations had the assets of Mom’s Silver Shop been operating as part of the
Company since January 1, 2018 and 2017.



|         |  | December 31, 2018 |            |   | December 31, 2017 |  
|-------- |  | ----------------- | ---------- | - | ----------------- | -
|Revenues |  | $                 | 2,944,852  |   |                   | $
|Expenses |  |                   | 12,399,836 |   |                   |  
|Net Loss |  | $                 | (9,454,984 | ) |                   | $



NOTE
12 – SUBSEQUENT EVENTS



In
January, February, and March 2019, the Chief Executive Officer of the Company purchased an aggregate of 195,000,000 shares for
a total of $79,350.



On
March 7, 2019, the United States Court of the District of Massachusetts issued electronic order 38 stating that the Court granted
on the merits summary judgement on violation of contract claims for the plaintiffs (Auctus Fund, LLC and EMA Financial, LLC) and
found Sunstock in default.



On
May 6, 2019, the United States District Court of the District of Massachusetts issued an Order to Show Cause in the case of Auctus
Fund, LLC and EMA Financial, LLC vs. Sunstock, Inc. The Court ordered Auctus to show cause within 21 days why the Court had jurisdiction
at the outset of the case and why the Court ought not to vacate its entry of summary judgement for Auctus, EDF No. 38. The Court
said that it had taken no action with regards to EMA’s claims. The Company is currently awaiting a further issuance by the
Court.



On
May 30, 2019, the United States District Court of Massachusetts issued an order in the case of Auctus Fund, LLC vs. Sunstock,
Inc. that the Court was satisfied that Auctus compliant raised colorable securities law claims and, accordingly, the Court ruled
that it had subject matter jurisdiction to enter summary judgment on Auctus’ contract claims.



F-20