EDGAR 10-K Filing

Company CIK: 1084551
Filing Year: 2023
Filename: 1084551_10-K_2023_0001683168-23-004574.json

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ITEM 1. BUSINESS
ITEM 1. BUSINESS
Overview
Community Redevelopment, Inc. was incorporated in the State of Oklahoma on August 16th, 2010, under the name Crosswind Renewable Energy Corp. At the time of its creation, the Company had been engaged in marketing renewable energy, sales, and marketing of turbines, lighting, and solar energy sources. On July 6th, 2020, the company completed a transaction whereby the core business of the Company is now that of the newly merged business. Community Redevelopment, Inc. operates as a community-oriented real estate redeveloper targeting economic growth and opportunity zones in secondary and tertiary value-added markets. The Company’s name was formally changed to Community Redevelopment Inc. (CRDV) on June 24th, 2020, as part of the overall transaction and to reflect the new mission of the company.
We were established to build upon community assets through thoughtful acquisition and development of undervalued real estate. Our experienced team has dedicated their careers to constructing high-quality mixed-use, multifamily residential, and commercial properties in one of the top metropolitan regions as well as have deep roots in the real estate acquisition and development. Our vision is to integrate our real estate development proprietary business model across multiple verticals in finance, technology, and real estate. This will provide long-term value to investors while staying true to our mission of enhancing communities.

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ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS
As a smaller reporting company this is not required.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.

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ITEM 2. PROPERTIES
ITEM 2. PROPERTIES
We currently maintain our executive offices in Bethesda, Maryland. This office belongs to our CEO Richard Balles and there is no charge for use to the Company.

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS
On May 20th, 2023, our CEO was made aware of a lawsuit by an ex-employee of the Company. The Company resolutely rejects the monetary claim for monies owed and while willing to negotiate in good faith, shall defend itself against said lawsuit and is now seeking dismissal of the same.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock trades on the OTC Market Group under the symbol “CRDV”. The OTC Market is a network of security dealers who buy and sell stock. The dealers are connected by a computer network that provides information on current “bids” and “asks,” as well as volume information. The trading of securities on the OTC Pink is often sporadic and investors may have difficulty buying and selling our shares or obtaining market quotations for them, which may have a negative effect on the market price of our common stock.
Shareholders
Our shares of common stock are issued in registered form. The registrar and transfer agent for our shares of common stock is Signature Stock Transfer, 14673 Midway Rd #220, Addison, Texas 75001. On December 31st, 2022, the shareholders' list of our shares of common stock showed 148 registered holders of our shares of common stock and 73,390,321 shares of common stock issued and outstanding.
Securities Authorized for Issuance Under Equity Compensation Plans
None.
Recent Sales of Unregistered Securities
None.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. SELECTED FINANCIAL DATA
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Special Note Regarding Forward-Looking Statements
THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT REFLECT OUR PLANS, ESTIMATES AND BELIEFS. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE THOSE DISCUSSED BELOW AND ELSEWHERE IN THIS ANNUAL REPORT.
FORWARD-LOOKING STATEMENTS
This annual report on Form 10-K contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws and is subject to the safe-harbor created by such Act and laws. Forward-looking statements may include statements regarding our goals, beliefs, strategies, objectives, plans, including product and technology developments, future financial conditions, results or projections or current expectations These forward-looking statements involve known or unknown risks, uncertainties and other factors that may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “potential,” “continue,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” and similar expressions. These statements are based on our current beliefs, expectations, and assumptions and are subject to a number of risks and uncertainties. Although we believe that the expectations reflected-in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our actual results may differ materially from those anticipated in these forward-looking statements. These forward-looking statements are made as of the date of this report, and we assume no obligation to update these forward-looking statements whether as a result of new information, future events, or otherwise, other than as required by law. In light of these assumptions, risks, and uncertainties, the forward-looking events discussed in this report might not occur and actual results and events may vary significantly from those discussed in the forward-looking statements.
Implications of Being an Emerging Growth Company
We are an Emerging Growth Company as defined in Section 2(a)(19) of the Securities Act of 1933, as amended, or the Securities Act. We will continue to be an emerging growth company until: (i) the last day of our fiscal year during which we had total annual gross revenues of at least $1.07 billion; (ii) the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act; (iii) the date on which we have, during the previous 3-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which we are deemed to be a large accelerated filer, as defined in Section 12b-2 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30.
As an emerging growth company, we are exempt from:
· Sections 14A(a) and (b) of the Exchange Act, which require companies to hold stockholder advisory votes on executive compensation and golden parachute compensation.
· The requirement to provide, in any registration statement, periodic report or other reports to be filed with the Securities and Exchange Commission, or the “Commission” or “SEC”, certain modified executive compensation disclosure under Item 402 of Regulation S-K or selected financial data under Item 301 of Regulation S-K for any period before the earliest audited period presented in our initial registration statement.
· Compliance with new or revised accounting standards until those standards are applicable to private companies;
· The requirement under Section 404(b) of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, to provide auditor attestation of our internal controls and procedures; and
· Any Public Company Accounting Oversight Board, or “PCAOB”, rules regarding mandatory audit firm rotation or an expanded auditor report, and any other PCAOB rules subsequently adopted unless the Commission determines the new rules are necessary for protecting the public.
We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the Jumpstart Our Business Startups Act.
We are also a smaller reporting company as defined in Rule 12b-2 of the Exchange Act. As a smaller reporting company, we are not required to provide selected financial data pursuant to Item 301 of Regulation S-K, nor are we required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. We are also permitted to provide certain modified executive compensation disclosure under Item 402 of Regulation S-K.
Company Overview
Community Redevelopment, Inc. was formed on August 16, 2010, as Crosswind Renewable Energy Corp. an Oklahoma corporation and was formally renamed as Community Redevelopment Inc. on June 24, 2020. We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). We were established to build upon community assets through real estate, financial services and technology. Our experienced team has dedicated their careers to constructing high-quality mixed-use, multifamily residential, and commercial properties in top metropolitan regions as well as have deep roots in technology and finance industries. Our vision is to integrate our real estate development proprietary business model across multiple verticals in finance, technology, and real estate. This will provide long-term value to investors while staying true to our mission of enhancing communities.
Our focus is to invest primarily in real estate, utilizing modern technology and finance opportunities for our respective properties. Our board of directors will at all times have oversight and policy-making authority over us, including responsibility for governance, financial controls, compliance and disclosure.
On September 20, 2021, the Company executed a Merger Agreement with Red Hills Capital Advisors, LLC, by which the Company has now acquired a portfolio of membership interests in six commercial, retail, multifamily and mixed-use properties, in revitalized areas in the Washington, DC Metro area. All the properties were both partially occupied and under continued development.
On June 28th, 2022, as part of restructuring plan in an effort to reorient the company assets, the Company came to the conclusion that the Company’s expectations regarding infusion of available financing had not materialized, to the harm of Community Redevelopment Inc., and that further attempted continuation of said Agreement with Red Hills Capital Advisors LLC was of no value and in fact detrimental to the overall financial condition of the Company. As such, management made the decision to Rescind the September 21st, 2021 Agreement with Red Hills placing these interests into our Company.
As such, by the Rescission Agreement removing Red Hills as part of the Company, the above-listed assets were removed from the company as part of this first phase of restructuring during this third Quarter of 2022. As it was a Rescission, all 18.5 million shares issued to Red Hills as consideration for these removed assets were returned to the Treasury of the Company, placing each side exactly as they were just prior to said Agreement.
On September 30th, 2022, the Company, through one of its subsidiaries, acquired 100% interest in “1000 18th St, NE 2020, LLC.”, the titled holder of the real property 1000 18th St NE, Washington, DC. The purchase price for this acquisition was $379,691, which was exchanged for 6,328,181 common shares of the Company. The property held within the acquired LLC is a 10-unit multifamily residence currently under development. We accounted for the acquisition as an asset acquisition. We measured the value of the acquired physical assets (restricted cash, prepaid insurance, land, and building) and the liabilities assumed (Mortgages, net) by allocating the total cost of the acquisition on a relative fair value basis.
On September 30th, 2022, the Company, through one of its subsidiaries, acquired 100% interest in “1320 8th St Fund LLC.”, the titled holder of the real property 1320 8th St NW, Washington, DC. The purchase price for this acquisition was $583,128, which was exchanged for 9,718,808 shares. The property held within the acquired LLC is a 10-unit multifamily residence currently under development. We accounted for the acquisition as an asset acquisition. We measured the value of the acquired physical assets (restricted cash, prepaid insurance, land, and building) and the liabilities assumed (Mortgages, net) by allocating the total cost of the acquisition on a relative fair value basis.
Community Redevelopment can help impact economic mobility by focusing on partnerships between the public and private sector to generate both business interest and business activity in low-income neighborhoods that have gone unnoticed by the development community at large while repairing and mending relationships in these underserved communities. Our Company intends to work with other real estate developers, as well as local and state government agencies to implement the community’s vision for our projects. We are confident in our ability to deliver community-centric projects because we have built a team that understands the challenges facing underserved communities from living and working in them.
Our Company is graciously endowed with an expert management team that has extensive experience in acquiring, developing, constructing, and managing high-quality multifamily, and retail properties in attractive markets throughout the Mid-Atlantic United States. The Company is focused on all aspects of the real estate development cycle including land development, design-build, property operations, and site redevelopment. In addition to the ownership of our operating property portfolio, Community Redevelopment plans to develop and build desirable properties for its own account and through ventures with affiliated and unaffiliated partners.
Community Redevelopment, Inc. is focused on community development in urban and suburban markets and our mission is to integrate our proprietary business model by providing sustainable, long-term value to investors as we strive to provide opportunities to improve neighborhoods with residential, commercial, and industrial development projects while designing architecturally pleasing, clean, energy-efficient communities and commercial structures.
Properties Acquired by the Red Hills Capital Advisors LLC.
As of September 20, 2021, we acquired membership interests in advance in real estate. The Consideration for this transaction on the part of the Company was the issuance of 17,750,000 common shares and 1,000,000 Preferred shares with 1:1 conversion, and 30:1 voting ratio. The stock value of the investment is described below:
Ownership The Company’s Investment
Venture Interest December 31, 2022 December 31, 2021
Red Hills Capital Advisors:
Fort Washington Livingston Pace, LLC (1) 24.50% $ 5,066,359 $ -
Suitland Holdings Pace A and Pace B, LLC 24.50% 2,236,430 -
Velocity Ventures, LLC 49.00% 302,482 -
Marlow Heights Branch Pace, LLC 24.50% 671,576 -
Capheights Hill Pace, LLC 24.50% 134,750 -
Capheights Central Dev, LLC (2) 24.50% 5,320,331 -
Capheights Velocity Services, LLC 24.50% 465,872 -
COZ Manager, LLC (2) 12.25% 4,273,439 -
Total
$ 18,471,239 $ -
On June 28th, 2022, as part of restructuring plan in an effort to reorient the company assets, the Company came to the conclusion that the Company’s expectations regarding infusion of available financing had not materialized, to the harm of Community Redevelopment Inc., and that further attempted continuation of said Agreement was of no value and in fact detrimental to the overall financial condition of the Company. As such, management made the decision to Rescind the September 21st, 2021 Agreement with Red Hills placing these interests into our Company.
As such, by the Rescission Agreement removing Red Hills as part of the Company, the above-listed assets were removed from the company as part of this first phase of restructuring during this third Quarter of 2022. As it was a Rescission, all 18.5 million shares issued to Red Hills as consideration for these removed assets are to be returned to the Treasury of the Company, placing each side in a state of equipoise exactly as they were just prior to said Agreement.
Community Redevelopment owns membership interests in multiple properties in the Washington DC metropolitan region, which are comprised of retail, multifamily, and mixed-use development projects. Our acquisition strategy is based on acquiring quality, well-positioned real estate in markets with robust growth and demographics, anchored by strong tenants. The Washington D.C. metropolitan area remains strong as a result of increased government spending. These properties are located in a market that is thriving and generating robust job growth with significant demand for housing.
Community Redevelopment Inc. is currently seeking additional opportunities in the Washington DC real estate market. Community Redevelopment's acquisition strategy is based on acquiring quality, well-positioned real estate in markets with robust growth and demographics, anchored by strong tenants. Our aim is to approach acquisition and development thoughtfully by developing and acquiring high-quality, well-located projects at cost, for its stabilized portfolio or to sell with full market value-added for a profit. The Company may also partner with other developers to build or acquire fractional or membership interests in economically viable projects. Community Redevelopment’s business model creates a tremendous advantage in the marketplace while providing long-term value. Our ability to acquire and develop single and multi-family rental properties that can either be held by us or sold to regional and national companies, further strengthens our market standing. We believe our strategy of working with federal, state, and local governments, as well as community leaders and other developers in our principal geographic areas and our targeted areas for expansion, will provide us with a diverse product portfolio and an opportunity to increase our overall market share and value.
Community Redevelopment, Inc. is not an opportunity zone fund or a real estate investment trust. Community Redevelopment, Inc. is a real estate developer offering potential investors an opportunity to participate in the process of investing in real estate projects that could improve the quality of life for residents of low-income neighborhoods, via a publicly traded company. The Company intends to work with other real estate developers, as well as local and state government agencies to complete its projects in these communities.
Community Redevelopment, Inc. operates as a community-oriented real estate redeveloper targeting economic growth and opportunity zones in secondary and tertiary value-added markets. The Company is primarily focused on opportunity zones in an effort to bring commerce and affordable housing to underserved areas. Community Redevelopment plans to provide numerous opportunities to improve low-income neighborhoods for residential, commercial, and industrial opportunities through government incentives, long-term partnerships, and agreements. Our mission is to rebuild depressed, underserved communities, improve the quality of life in those markets, and provide our investors with an opportunity to profit. We intend to accomplish this by focusing on partnerships between the public and private sector to generate both business interest and business activity in low-income neighborhoods that have gone unnoticed by the development community at large while repairing and mending relationships in these underserved communities.
The Company is not a “shell company,” since its filing of its Form 10 with the SEC on January 19, 2021, and has formal operations, emplaced Board, an Audit Committee and actively pursuing several current projects, despite having no significant cash on hand since the change in control of July 6th, 2020. As of December 31, 2022, the Company had $150,841 in cash. The Company intends to comply with the periodic reporting requirements of the Exchange Act for so long as it is subject to those requirements.
The Company’s current management believes the advantages of being a publicly held corporation will enable it to project further and faster growth during this market downturn. The Company’s principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through community-private partnerships within different US jurisdictions.
During the remainder of the fiscal year and beyond such time, we anticipate incurring costs related to the filing of Exchange Act reports, and investigating, analyzing, and consummating further local partnerships. We believe we will be able to meet these costs through the use of funds to be loaned by or invested in us by our stockholders, management or other investors. Our management and stockholders have indicated their intent to advance funds on behalf of the Company as needed in order to accomplish its business plan and comply with its Exchange Act reporting requirements; however, there are no agreements in effect between the Company and our management and stockholders specifically requiring that they provide any funds to the Company. As a result, there are no assurances that such funds will be advanced or that the Company will be able to secure any additional funding as needed.
While the Company has limited assets and no revenues to date, the Company has an exceptionally experienced management in finance, politics, and business and has unrestricted flexibility in seeking, analyzing and participating in potential urban renewal opportunities in the area of community redevelopment. In its efforts to analyze potential ventures, the Company will consider the following kinds of factors:
(a) potential for growth, indicated by local need and assigned local, state or federal funding and incentives towards urban renewal in that given locale.
(b) competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole.
(c) strength and diversity of current management.
(d) capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through ventures or similar arrangements, sales of securities, or from other sources.
(e) the extent to which the business opportunity can be advanced; and
In applying the foregoing criteria, not one of which will be definitive, management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available data. Potentially available urban renewal opportunities may occur in many different locales, and at various stages of development, all of which will make the task of comparative investigation and analysis of such urban renewal opportunities extremely difficult and complex. Due to the Registrant’s limited capital available for investigation, the Registrant may not discover or adequately evaluate adverse facts about the opportunity to be engaged. In addition, we will be competing against other entities that possess greater financial, technical, and managerial capabilities for identifying and completing new projects.
In evaluating a prospective new project, we will conduct as extensive a due diligence review of potential targets as possible given our dependence upon the ever-changing city, state, and federal funding initiatives for urban redevelopment and our limited financial resources. We expect that our due diligence will encompass, among other things, meetings with the local government officials and inspection of its neighborhoods and infrastructure, as necessary, as well as a review of financial, government statistical data and other information which is made available to us. This due diligence review will be conducted primarily by our management or by unaffiliated third parties we may engage, including but not limited to attorneys, accountants, consultants or other such professionals. The costs associated with hiring third parties as required to complete a new project may be significant and are difficult to determine as such costs may vary depending on a variety of factors, including the locale, amount of time it takes to complete a new project, the location of the project, and the size and complexity of the business of the project. As of the date of this filing, the Company has identified several potential business opportunities.
The time and costs required to select and evaluate a target project and to structure and complete a new project cannot presently be ascertained with any degree of certainty. The amount of time it takes to complete a new project, the location of the project, the size and complexity of the project neighborhood, the scope of city, state, and federal regulations, and whether funds may be raised contemporaneously with the transaction are all factors that determine the costs associated with completing a new project transaction. The time and costs required to complete a new project can be estimated once a new project target has been identified. Any costs incurred with respect to the evaluation of a prospective new project that is not ultimately completed will result in a loss to us.
Through information obtained from industry professionals including attorneys, architects, developers, appraisers, accountants, commercial and residential real estate brokers, builders, engineers as well as other consultants with experience in the urban redevelopment sphere, there are literally thousands of new potential projects, and the aim of the management is to filter through these for the most reasonably achievable urban renewal projects.
We are and will continue for the foreseeable future to be, an insignificant participant on the national level of public-private urban renewal.
Nearly all similar companies have significantly greater financial resources; consequently, we will be at a competitive disadvantage in identifying possible urban renewal opportunities and successfully completing a new project. These competitive factors may reduce the likelihood of our identifying and consummating a successful new project.
Basis of Presentation
The accompanying audited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for annual financial statement presentation and in accordance with Form 10-K. Accordingly, they include all of the information and footnotes required in annual financial statements. In the opinion of management, the audited financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position and results of operations and cash flows. The results of operations presented are not necessarily indicative of the results to be expected for any other interim period or for the entire year. These audited financial statements should be read in conjunction with our December 31st, 2021 audited financial statements.
Going Concern
Due to the uncertainty of our ability to meet our current operating and capital expenses, our independent auditors included an explanatory paragraph in their report on the audited financial statements for the year ended December 31, 2022, regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.
Our audited condensed financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they become due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that we will be able to continue as a going concern. Our audited financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern. There is no assurance that our operations will be profitable. Our continued existence and plans for future growth depend on our ability to obtain the additional capital necessary to operate either through the generation of revenue or the issuance of additional debt or equity.
Our future growth is dependent upon achieving further development projects and execution of development projects, engaging other company related opportunities, management of operating expenses, and the ability of the Company to obtain the necessary financing to fund future obligations, and upon profitable operations.
Stockholders’ Equity
Since its inception on August 16, 2010, the Company has accumulated deficit of $60,097,918 as of twelve months ended December 31, 2022.
The aggregated loss is related to the capital invested in advances real estate membership interest, which has future positive cash flow after completion and stabilization. See note 5.
Authorized Shares
Common Stock
The Company is authorized to issue up to 500,000,000 shares of common stock, par value $0.001 par value. Each outstanding share of common stock entitles the holder to one vote per share on all matters submitted to a stockholder vote. All shares of common stock are non-assessable and non-cumulative, with no pre-emptive rights.
Preferred shares
The Company has 5,000,000 (Five Million) shares of preferred stock, with conversion rights of 1:1 (one to one), but with 30:1 voting rights. As of December 31, 2022, 0 shares of preferred stock were issued and outstanding.
Commitments and Contingencies
On April 8th, 2021, the Company executed a Senior Secured Convertible Promissory Note, Securities Purchase Agreement, and ancillary agreements (collectively, the “Agreements”) with Leonite Capital, LLC Per the terms of the Agreements with Leonite Capital, LLC, the Company may borrow up to $500,000; of which $500,000 was tendered, which is open with right of redemption for one year. On March 24th, 2023, the Company and Leonite Capital LLC executed an Amendment by which the outstanding balance was increased by $7,500.00, the fixed Conversion Price was reset to $0.03.
On November 30th, 2021, the Company executed a short-term loan of $1,000,000 Secured Note, by 1,500,000 million shares of CRDV stock (reserved in bank’s name, subject to loan and stock pledge agreement with NextBank International, Inc,) and secured by the president of the company, as a personal guarantor. Per the terms of the Agreements with NextBank International, Inc, the Company may borrow up to $1,000,000; which is open with the right of redemption for one year against the collateral of 1,500,000 shares of CRDV stock and the President of the company as guarantor. As of December 31, 2022, the company has withdrawn the full amount net of the loan less the loan fees. On January 23rd, 2023, NextBank International Inc. elected to convert $49,416 of their debt into 2,320,000 common shares.
We will require additional financing to implement our business plan, which may include joint venture projects and debt or equity financings. The nature of this enterprise and constraint of positive cash flow places debt financing beyond the creditworthiness required by most banks or typical investors of corporate debt until such time as economically viable profits and losses can be demonstrated. Therefore, any debt financing of our activities may be costly and result in substantial dilution to our stockholders.
Future financing through equity investments is likely to be dilutive to existing stockholders. Also, the terms of securities we may issue in future capital transactions may be more favorable for our new investors. Newly issued securities may include preferences, superior voting rights, and the issuance of warrants or other derivative securities, which may have additional dilutive effects. Further, we may incur substantial costs in pursuing future capital and financing, including investment banking fees, legal fees, accounting fees, and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which will adversely impact our financial condition.
Our ability to obtain needed financing may be impaired by such factors as the capital markets, which could impact the availability or cost of future financings. If the amount of capital we are able to raise from financing activities, together with our revenue from operations, is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations accordingly, we may be required to cease operations.
There is no assurance that we will be able to obtain financing on terms satisfactory to us, or at all. We do not have any arrangements in place for any future financing. If we are unable to secure additional funding, we may cease or suspend operations. We have no plans, arrangements, or contingencies in place in the event that we cease operations.
Results of Operations
For the Twelve Months Ended December 31, 2022, and 2021
Revenues
The Company has earned $93,750 in revenue from real estate brokerage services for the twelve months ended December 31, 2022.
Operating Expenses
For the twelve months ended December 31, 2022, our total operating expenses were $2,281,261 compared to $9,899,333 for the twelve months ended December 31, 2021, resulting in a decrease of $7,618,072. The decrease is attributable to a total decrease of $7,618,072 in general administration expenses.
For the twelve months ended December 31, 2022, we had $0 unrealized loss on investments compared to $37,778,761 for the year ended December 31, 2021.
Net Operating loss
Net Operating loss was $2,275,019 compared to net Operating loss of $9,899,333 for the twelve months ended December 31, 2022, and December 31, 2021, for the reasons explained above.
Net loss from Continuing Operations
Net loss was $2,662,498 compared to a net loss of $ 10,593,864 for the twelve months ended December 31, 2022, and December 31, 2021. The decrease is attributable to a total decrease of $7,618,072 in general administration expenses, and decrease in other expense of $307052 and an increase in gross profit of $6,242.
Other Income (Expense)
Total Other Expense decreased to $387,479 for the year ended December 31, 2022, from $694,531 for the year ended December 31, 2021. The increase was directly related to the swings in derivative fair values from $387,161 and decrease in interest expense of $693,159.
Total Loss
Total loss was $10,821,237 compared to a total loss of $ 48,372,625 for the twelve months ended December 31, 2022, and December 31, 2021. The decrease is attributable to a total decrease of $37,778,761 in unrealized loss on investments, which is the dollar value of the common shares issued for the acquisition of Red Hills Capital LLC.
Liquidity and Capital Resources
Overview
The Company’s cash and cash equivalents balance was $101,728 as of December 31, 2022.
Net cash provided in the Company’s operating activities during the twelve months ended December 31, 2022, was $1,226,775 as compared to net cash used in the operating activities of $385,991 during the corresponding period ended December 31, 2021. This represents a variance of $1,612,766 in net cash provided in operating activities between the two periods. The underlying reasons for the variance were primarily due to loss from discontinued operations of $8,158,739, shares issued for services of $1,223,225, shares issued for membership interest in real estate of $2,059,701, shares issued for conversion of loan $73,015, change in the fair value of derivative liabilities $257,756, accrued expenses of $63,602 and an increase in accounts payable of $15,581 and an increase in note payable of $180,000 and an increase of $30,403 in the interest on convertible note payable between the two periods.
Net cash used in investing activities for the years ended December 31, 2022, and 2021 was $7,468,581 and $0, respectively. The variance is primarily due to funds utilized in long-term and short-term investments.
Cash provided by financing activities was $5,259,047 for the twelve months ended December 31, 2022, as compared to cash provided by financing activities of the amount of $1,461,959 for the same period ended December 31, 2021. This represents a variance of $3,797,088 in net cash used in financing activities between the two periods. The primary underlying reason is due to a decrease on a short-term loan of $71,035, an increase in mortgage loan of $5,320,082 and a decrease in shareholder’s loan of $38,041 and proceeds from shares committed $10,000 between the two periods.
Since its inception on August 16, 2010, the Company had a cumulative deficit of $60,097,918 and we have a working capital deficit of $4,846,835 as of December 31, 2022. Our future growth is dependent upon achieving further purchase orders and execution, management of operating expenses and the ability of the Company to obtain the necessary financing to fund future obligations, and upon profitable operations.
Historically, we have financed our cash flow and operations from contributions of our majority shareholder and by raising equity and convertible loans.
As of December 30, 2022, our cash balance was $101,728 we believe we will require a minimum of $5,000,000 in working capital over the next 12 months to grow the company as currently planned, covering our operating costs and maintaining our regulatory reporting and filings. Should our revenues not materialize as expected, or if our costs and expenses prove to be greater than we currently anticipate, or should we change our current business plan in a manner that will increase or accelerate our anticipated costs and expenses; we may need funds in excess of that currently planned.
It is our current policy that all transactions between the Company and our officers, directors and their affiliates will be entered into only if such transactions are approved by a majority of the existing directors, are approved by vote of the stockholders, or are fair to us as a corporation as approved or ratified by our Board of Directors or authorized officer. We will conduct an appropriate review of all related party transactions on an ongoing basis, and, where appropriate, we will review the potential conflicts of interest.
Off-Balance Sheet Arrangements
We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Policies and Estimates
Use of Estimates
In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”), management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by management include, but are not limited to, revenue recognition, the allowance for bad debt, useful life of fixed assets, income taxes and unrecognized tax benefits, valuation allowance for deferred tax assets, and assumptions used in assessing impairment of long-lived assets. Actual results could differ from those estimates.
Lease
On January 2, 2020, the Company adopted FASB ASC Topic 842, Leases, or ASC 842, using the modified retrospective transition method with a cumulative effect adjustment to accumulated deficit as of January 1, 2019, and accordingly, modified its policy on accounting for leases as stated below. As described under “Recently Adopted Accounting Pronouncements,” below, the primary impact of adopting ASC 842 for the Company was the recognition in the consolidated balance sheet of certain lease-related assets and liabilities for operating leases with terms longer than 12 months. The Company elected to use the short-term exception and does not records assets/liabilities for short term leases as of December 31, 2022.
Revenue Recognition
In May 2014 the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes all existing revenue recognition requirements, including most industry-specific guidance. This new standard requires a company to recognize revenues when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The FASB subsequently issued the following amendments to ASU No. 2014-09 that have the same effective date and transition date: ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations; ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing; ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients; and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The Company adopted these amendments with ASU 2014-09 (collectively, the new revenue standards).
Under the new revenue standards, the Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five-step model prescribed under ASU No. 2014-09: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. The Company recognized revenue from providing temporary and permanent staffing solutions and the sale of consumer products. Service revenues are recognized as the services are performed in proportion to the transfer of control to the customer and real estate revenues are recognized at the time of sale when consideration has been exchanged and title has been conveyed to the buyer. At this time, we have not identified specific planned revenue streams. During the period from August 16, 2010 (Inception) to December 31, 2022, we did not recognize any revenue.
Income Taxes
The Company accounts for income taxes using the asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than enactments of changes in the tax law. For deferred tax assets, management evaluates the probability of realizing the future benefits of such assets. The Company establishes valuation allowances for its deferred tax assets when evidence suggests it is unlikely that the assets will be fully realized.
The Company recognizes the tax effects of an uncertain tax position only if it is more likely than not to be sustained based solely on its technical merits as of the reporting date and then only in an amount more likely than not to be sustained upon review by the tax authorities. Income tax positions that previously failed to meet the more likely than not threshold is recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more likely than not threshold is derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company classifies potential accrued interest and penalties related to unrecognized tax benefits within the accompanying consolidated statements of operations and comprehensive income (loss) as the income tax expense.
Stock-based Compensation
Stock-based compensation cost to employees is measured at the date of grant, based on the calculated fair value of the stock-based award, and will be recognized as expense over the employee’s requisite service period (generally the vesting period of the award). Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The company has no stock-based compensation plan established as December 31, 2022.
Derivative instruments
The fair value of derivative instruments is recorded and shown separately under liabilities. Changes in the fair value of derivatives liability are recorded in the consolidated statement of operations under other (income) expenses.
Our Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, the Company uses the binomial option-pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.
Related Parties
The Company follows subtopic 850-10 of the FASB ASC for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 related parties include:
a. affiliates of the Company;
b. entities for which investments in their equity securities would be required, absent the election of the FV option under the FV Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity;
c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management;
d. principal owners of the Company;
e. management of the Company;
f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and
g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of financial statements is not required in those statements.
The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
New Accounting Pronouncements
In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including those interim periods within those fiscal years. We did not expect the adoption of this guidance have a material impact on its consolidated financial statements.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index:
Audit Report
(1) Financial Statements Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 6662)
Consolidated Balance Sheets
Consolidated Statements of Operations and Comprehensive Loss
Consolidated Statements of Stockholders' Equity (Deficit) for the Years Ended December 31, 2022 and 2021
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2021
Notes to Consolidated Financial Statements
M.S. Madhava Rao
316, 1st Cross, Gururaja Layout, 7th Block, 4th Phase, BSK 3rd Stage, Bangalore 560085
Tel No: 91-8861838006 email : mankalr@yahoo.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To The Board of Directors and Shareholders
Community Redevelopment, Inc.
1910 Towne Centre Blvd., #250
Annapolis, MD 21401
Opinion on the financial statements
We audited the accompanying balance sheets of Community Redevelopment, Inc., (“the Company”) as of December 31, 2022 and 2021, and the related statements of operations, stockholders’ equity and cash flows for years then ended and the related notes (collectively referred to as “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operation, stockholder’s equity and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The Company’s financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of the liabilities in the normal course of business. The Company has an accumulated deficit of $60,097,918 for the year ended December 31, 2022. These factors as discussed in Note 2 of the financial statements raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis of 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 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 not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our 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.
Critical Audit Matters
Critical audit matters arising from the current period of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosure that are material to the financial statements and (2) involve especially challenging, subjective, or complex judgements. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit below, providing separate opinions on the critical audit matters or the accounts or disclosures to which they relate.
Related party transactions.
Company acquired two properties from CEO of the Company in exchange for Shares of the Company.
We have served as the Company’s auditor since 2020.
/s/ M. S. Madhava Rao
M. S. Madhava Rao, Chartered Accountant
Bangalore, India
June 29, 2023
Community Redevelopment Inc.
Consolidated Balance Sheet
Audited
As of
12/31/2022 As of
12/31/2021
Assets
Current Assets:
Cash $ 101,728 $ 1,084,486
Restricted Cash 160,504 -
Other Current Assets 73,509 -
Total current assets 335,742 1,084,486
Investments in Real Estate Membership Interests 7,248,577 18,471,239
Total assets $ 7,584,318 $ 19,555,725
Liabilities and shareholders' equity
Current liabilities
Accounts payable $ 85,848 $ 74,098
Credit card payable 3,831 -
Accrued expenses 68,602 5,000
Interest Payable 60,496 30,092
Notes Payable 180,000 -
Convertible Notes Payable, net of discount 555,556 102,412
Derivatives on Convertible Note 747,070 942,458
Short Term Loan 928,965 1,000,000
Mortgages on property, current 2,552,209 -
Total current liabilities 5,182,577 2,154,060
Long Term Liabilities
Mortgage on property 2,767,873 -
Total Long term liabilities 2,767,873 -
Total liabilities 7,950,450 2,154,060
Stockholders' Equity
Preferred stock: $0.001 par value, 5,000,000 shares authorized, 0 shares and 1,000,000 shares issued and outstanding at December 31, 2022 and December 31, 2021 respectively. - 1,000
Common stock: $0.001 par value; 500,000,000 shares authorized and 73,390,321 shares and 44,077,038 shares issued and outstanding at December 31, 2022 and December 31, 2021 respectively. 73,390 44,077
Additional paid in capital 59,648,395 66,633,268
Shares Committed to be issued 10,000 -
Accumulated deficit (60,097,918 ) (49,276,680 )
Total shareholders' equity (Deficit) (366,132 ) 17,401,665
Total liabilities and Stockholders' Equity (Deficit) $ 7,584,318 $ 19,555,725
See Accompanying Notes to Consolidated Financial Statements.
Community Redevelopment Inc.
Income Statement
Audited
For the Fiscal Year Ended
December, 31,
Revenue $ 93,750 $ -
Cost of Services (87,508 ) -
Gross Profit 6,242 -
Operating expenses:
General and Administrative 2,281,261 9,899,333
Total Operating Expenses 2,281,261 9,899,333
Loss from Operations (2,275,019 ) (9,899,333 )
Other income (expense):
Interest expense (583,921 ) (1,277,080 )
Other income 1,053 -
Change in the fair value of derivative 195,388 582,549
Total other income (Expense) (387,479 ) (694,531 )
Loss from Continuing Operations (2,662,498 ) (10,593,864 )
Loss from Discontinued Operations (8,158,739 ) -
Net Loss $ (10,821,237 ) $ (10,593,864 )
Other comprehensive income:
Unrealized gain (loss) on investments - (37,778,761 )
Total loss $ (10,821,237 ) $ (48,372,625 )
Net (loss) per share attributable to common stockholders, basic and diluted $ (0.22 ) $ (1.87 )
Weighted average shares outstanding, basic and diluted 49,368,370 25,935,749
See Accompanying Notes to Consolidated Financial Statements.
Community Redevelopment Inc.
Consolidated Statement of Stockholders' Equity (Deficit)
Audited
Preferred Stock Common Stock Common Stock Shares to be Additional
Accumulated Other Total
Shares Amount Shares Amount Shares Committed Amount cancelled
Amount
Paid-in Capital Accumulated Deficit Comprehensive Income Stockholders' Deficit
Balance, December 31, 2020 - $ - 1,250,488 $ 1,250 1,000,000 $ 1,000 $ 123,798 $ (904,056 ) $ - $ (778,008 )
Issuance of Common Stock for Services - - 23,827,039 23,827 (1,000,000 ) (1,000 ) - 9,534,290 - - 9,557,117
Issuance of Common Stock for Debt - - 1,249,511 1,250 - - - 743,930 - - 745,180
Issuance of Common Stock - Under the Merger Agreement - - 17,750,000 17,750 - - - 53,232,250 - - 53,250,000
Issuance of Preferred Stock - Under the Merger Agreement 1,000,000 1,000 - - - - - 2,999,000 - - 3,000,000
Net Loss - - - - - - - - (48,372,625 ) - (48,372,625 )
Balance, December 31, 2021 1,000,000 1,000 44,077,038 44,077 - - - 66,633,268 (49,276,680 ) - 17,401,665
Shares issued for services - - 11,314,262 11,314 - - - 1,211,911 - - 1,223,225
Shares issued for conversion of Loan - - 1,420,700 1,421 - - - 71,594 - - 73,015
Shares issued for membership interest in real estate - - 34,328,321 34,328 - - - 2,025,372 - - 2,059,701
Shares Cancelled (1,000,000 ) (1,000 ) (17,750,000 ) (17,750 ) - - - (10,293,750 ) - - (10,312,500 )
Shares Committed to issue - - - - 250,000 10,000 - - - - 10,000
Net Loss - - - - - - - - (10,821,237 ) - (10,821,237 )
Balance, December 31, 2022 - $ - 73,390,321 $ 73,390 250,000 $ 10,000 $ - $ 59,648,395 $ (60,097,917 ) $ - $ (366,132 )
See Accompanying Notes to Consolidated Financial Statements.
Community Redevelopment Inc.
Consolidated Statements of Cash Flows
Audited
For the Twelve
Months Ended
12/31/2022
For the Twelve
Months Ended
12/31/2021
Cash flow from Operating Activities
Net loss $ (10,821,237 ) $ (48,372,625 )
Adjustments to reconcile net loss to net cash used in operating activities:
Loss from discontinued Operations 8,158,739 -
Shares Issued for services 1,223,225 9,557,117
Shares Issued for conversion of Loan 73,015 -
Shares issued for membership interest in real estate 2,059,701 37,778,761
Gain (Loss) on derivative liabilities 257,756 544,870
Change In:
Increase in Prepaid Expenses (14,008 ) -
Increase in Accounts payable 15,581 74,098
Increase in Interest payable 30,403 30,093
Increase in Note payable 180,000 -
Increase in Accrued expenses 63,602 1,695
Net cash provided (used) in operating activities 1,226,775 (385,991 )
Cash flow from Investing Activities
Increase in short Term Investments (220,004 ) -
Increase in long Term Investments (7,248,577 ) -
Net cash used in investing activities (7,468,581 ) -
Cash flow from Financing Activities
Increase/(Decrease) in Shareholder's loan - (38,041 )
Proceeds from shares committed 10,000 -
Proceeds from Loan 5,320,082 500,000
Decrease/Increase in short-term loan (71,035 ) 1,000,000
Net cash provided in financing activities 5,259,047 1,461,959
Net increase (decrease) in cash and cash equivalents (982,757 ) 1,075,968
Cash and Cash Equivalents at beginning of period 1,084,486 8,518
Cash and Cash Equivalents at end of period $ 101,728 $ 1,084,486
Supplemental disclosure of cash flow information:
Supplemental disclosure of cash and non-cash financing activities
Share cancelled in the reversal of Investments in Real Estate Membership Interest in exchange of Stock $ 10,312,500 $ -
Share issued towards Investments in Real Estate Membership Interest in exchange of Stock $ 2,059,701 $ -
Shares issued for Services $ 1,223,225 $ -
Shares issued to settle notes payable $ 73,015 $ 745,180
Cash paid for interest $ 127,638 $ 70,556
See Accompanying Notes to Consolidated Financial Statements.
Community Redevelopment Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
Note 1-Nature of Business
Organization
Community Redevelopment, Inc. was formed on August 16, 2010 as Crosswind Renewable Energy Corp. an Oklahoma corporation and was formally renamed on June 24th, 2020. We are an emerging growth company. We were established to build upon community assets through real estate, financial services and technology. Our experienced team has dedicated their careers to constructing high-quality mixed-use, multifamily residential, and commercial properties in a top metropolitan region as well our unique usage of the technology and finance industries. Our vision is to integrate our real estate development proprietary business model across multiple verticals in finance, technology, and real estate. This will provide long-term value to investors while staying true to our mission of enhancing communities.
Emerging Growth Company
The Company is an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of section 404(b) of the Sarbanes-Oxley Act, and exemptions from the requirements of Sections 14A(a) and (b) of the Securities Exchange Act of 1934 to hold a nonbinding advisory vote of stockholders on executive compensation and any golden parachute payments not previously approved.
The Company has elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. This election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.
We will remain an “emerging growth company” for up to five years, although we will lose that status sooner if our revenues exceed $1.07 billion, if we issue more than $1 billion in non-convertible debt in a three-year period, or if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the end of the second quarter of any fiscal year following the anniversary of the initial reporting.
To the extent that we continue to qualify as a “smaller reporting company”, as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an emerging growth company may continue to be available to us as a smaller reporting company, including: (1) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act; (2) scaled executive compensation disclosures; and (3) the requirement to provide only two years of audited financial statements, instead of three years.
Note 2- Going Concern
The accompanying audited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has accumulated loss of $60,097,918 as of December 31, 2022. These conditions raise substantial doubt about the ability of the Company to continue as a going concern.
The ability of the Company to continue as a going concern is dependent upon its abilities to generate revenues, to continue to raise investment capital, and develop and implement its business plan. No assurance can be given that the Company will be successful in these efforts.
Note 3- Significant Accounting Policies
Basis of Presentation
The accompanying audited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for annual financial statement presentation and in accordance with Form 10-K.
Use of Estimates
In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by management include, but are not limited to, revenue recognition, the allowance for bad debt, useful life of fixed assets, income taxes and unrecognized tax benefits, valuation allowance for deferred tax assets, and assumptions used in assessing impairment of long-lived assets. Actual results could differ from those estimates.
The COVID-19 pandemic has caused uncertainty and disruption in the global economy and financial markets. As a result, management’s estimates and assumptions may be subject to a higher degree of variability and volatility that may result in material differences from the current period.
Cash and Cash Equivalents
Cash equivalents consist of highly liquid investments with maturities of three months or less when purchased. Cash and cash equivalents are on deposit with financial institutions without any restrictions.
Concentrations of Credit Risk and Off-Balance Sheet Arrangements
Cash is a financial instrument that potentially subjects the Company to concentrations of credit risk. For all periods presented, substantially all of the Company’s cash was deposited in an account at a single financial institution that management believes is creditworthy. The Company is exposed to credit risk in the event of default by these financial institutions for amounts in excess of the Federal Deposit Insurance Corporation insured limits. The Company maintains its cash at a high-quality financial institution and has not incurred any losses to date.
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Fair Value of Financial Instruments
The carrying value of cash, accounts receivable, other receivable, note receivable, other current assets, accounts payable, and accrued expenses, if applicable, approximate their fair values based on the short-term maturity of these instruments. The carrying amounts of debt were also estimated to approximate fair value.
The Company utilizes the methods of fair value (“FV”) measurement as described in ASC 820 to value its financial assets and liabilities. As defined in ASC 820, FV is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in FV measurements, ASC 820 establishes a FV hierarchy that prioritizes observable and unobservable inputs used to measure FV into three broad levels, which are described below:
Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange.
Level 2 - Pricing inputs are other than quoted prices in active markets but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.
Level 3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.
Our financial instruments consist of our accounts payable, accrued expenses - related party and loan payable - related party. The carrying amount of our prepaid accounts payable, accrued expenses- related parties and loan payable - related party approximates their fair values because of the short-term maturities of these instruments.
Investments
A non-controlling, unconsolidated ownership interest in an entity may be accounted for using one of: (i) equity method where applicable; (ii) fair value option if elected; (iii) fair value through earnings if fair value is readily determinable, including election of net asset value (“NAV”) practical expedient where applicable; or (iv) for equity investments without readily determinable fair values, the measurement alternative to measuring at cost adjusted for any impairment and observable price changes, as applicable.
Changes in fair value of equity method investments are recorded in realized and unrealized gains (losses) in the condensed combined and consolidated statements of operations.
Derivative liabilities
The Company identified the conversion feature of convertible notes payable as derivatives.
We estimate the fair value of the derivatives using multinomial lattice models that value the derivative liabilities based on a probability-weighted cash flow model using projections of the various potential outcomes. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility and management’s estimates of various potential equity financing transactions. These inputs are subject to significant changes from period to period and to management's judgment; therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material.
Fair value of financial instruments
Under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, and ASC 825, Financial Instruments, the FASB establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company's consolidated financial statements as reflected herein. The carrying amounts of cash, prepaid expense and other current assets, accounts payable, accrued expenses and notes payable reported on the accompanying consolidated balance sheets are estimated by management to approximate fair value primarily due to the short-term nature of the instruments.
An entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value using a hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy prioritized the inputs into three levels that may be used to measure fair value:
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in markets that are not active.
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
Our derivative liabilities are measured at fair value on a recurring basis and estimated as follows:
Schedule of derivative liabilities
December 31, 2022 Total Level 1 Level 2 Level 3
Derivative liabilities $ 747,070 $ - $ - $ 747,070
December 31, 2021 Total Level 1 Level 2 Level 3
Derivative liabilities $ 942,458 $ - $ - 942,458
Non-controlling Interests
Non-controlling interests represent the share of consolidated entities owned by third parties. Community Redevelopment recognizes each non-controlling ownership at the estimated fair value of the net assets at the date of formation or acquisition.
Related Parties
The Company follows subtopic 850-10 of the FASB ASC for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 related parties include:
a. affiliates of the Company;
b. entities for which investments in their equity securities would be required, absent the election of the FV option under the FV Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity;
c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management;
d. principal owners of the Company;
e. management of the Company;
f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and
g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
The financial statements shall include disclosures of material-related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of financial statements is not required in those statements.
The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
Revenue Recognition
In May 2014 the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes all existing revenue recognition requirements, including most industry specific guidance. This new standard requires a company to recognize revenues when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The FASB subsequently issued the following amendments to ASU No. 2014-09 that have the same effective date and transition date: ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations; ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing; ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients; and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The Company adopted these amendments with ASU 2014-09 (collectively, the new revenue standards).
Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:
Step 1: Identify the contract(s) with customers
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to performance obligations
Step 5: Recognize revenue when the entity satisfies a performance obligation
Service revenues are recognized as the services are performed in proportion to the transfer of control to the customer and real estate revenues are recognized at the time of sale when consideration has been exchanged and the title has been conveyed to the buyer. At this time, we have not identified specific planned revenue streams.
Basic Income (Loss) Per Share
Under the provisions of ASC 260, “Earnings per Share,” basic loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the income of the Company, subject to anti-dilution limitations.
Schedule of earnings per share
December 31, 2022 December 31, 2021
Numerator:
Net loss $ (10,821,237 ) $ (48,372,625 )
Denominator:
Weighted average common shares outstanding-basic 49,368,370 25,935,749
Dilutive common stock equivalents
Weighted average common shares outstanding-diluted 49,368,370 25,935,749
Net loss per share:
Basic $ (0.22 ) $ (1.87 )
Diluted $ (0.22 ) $ (1.87 )
Realized and Unrealized Gains (Losses)
Realized gains (losses) occur when the Company redeems all or a portion of its investment or when the Company receives cash income, such as dividends or distributions. Unrealized appreciation (depreciation) results from changes in the fair value of the underlying investment as well as from the reversal of previously recognized unrealized appreciation (depreciation) at the time an investment is realized. Realized and unrealized gains (losses) are presented together as realized and unrealized gains (losses) in the condensed combined and consolidated statements of operations.
Income Taxes
The Company accounts for income taxes using the asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than enactments of changes in the tax law. For deferred tax assets, management evaluates the probability of realizing the future benefits of such assets. The Company establishes valuation allowances for its deferred tax assets when evidence suggests it is unlikely that the assets will be fully realized.
The Company recognizes the tax effects of an uncertain tax position only if it is more likely than not to be sustained based solely on its technical merits as of the reporting date and then only in an amount more likely than not to be sustained upon review by the tax authorities. Income tax positions that previously failed to meet the more likely than not threshold is recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more likely than not threshold is derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company classifies potential accrued interest and penalties related to unrecognized tax benefits within the accompanying consolidated statements of operations and comprehensive income (loss) as income tax expense.
Comprehensive Income
Other comprehensive income consists of net income and other appreciation (depreciation) affecting the Company that, under GAAP, are excluded from net income.
New Accounting Pronouncements
In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including those interim periods within those fiscal years. We did not expect the adoption of this guidance have a material impact on its consolidated financial statements.
Note 4 - Authorized Shares
The Company is authorized to issue up to 500,000,000 shares of common stock, par value $0.001 per share. Each outstanding share of common stock entitles the holder to one vote per share on all matters submitted to a stockholder vote. All shares of common stock are non-assessable and non-cumulative, with no pre-emptive rights.
Additionally, The Company has 5,000,000 (Five Million) shares of preferred stock, with conversion rights of 1:1 (one to one), but with 30:1 voting rights.
As part of the corporate restructuring in specific preparation for this merger, on September 15th, 2021, the Company Reduced its Authorized shares from 3 billion to five hundred million and created the above-referenced Preferred Class with 1:1 conversion and 30:1 voting rights.
During the Twelve months ending December 31, 2022, 73,390,321 shares of common and 0 shares of preferred were issued and outstanding.
Note 5 - Investments in Real Estate Joint Ventures
On September 20th, 2021, the Company entered into a Merger Agreement with Red Hills Capital Advisors, LLC, by which the Community Redevelopment Inc (the Company) acquired a portfolio of membership interests in development of six commercial retail, multifamily and mixed-use properties, in the Washington, DC Metro area. The Equity interest of RedHills Capital Advisors, in these properties amounted to $18,471,239. The Consideration for this transaction on the part of the Company was the issuance of 17,750,000 common shares and 1 million Preferred shares with 1:1 conversion, and 30:1 voting rights.
On June 28th, 2022, as part of restructuring plan in an effort to reorient the company assets, the Company came to the conclusion that the Company’s expectations regarding infusion of available financing had not materialized, to the harm of Community Redevelopment Inc., and that further attempted continuation of said Agreement was of no value and in fact detrimental to the overall financial condition of the Company. As such, management made the decision to Rescind the September 21st, 2021 Agreement with Red Hills placing these interests into our Company.
As such, by the Rescission Agreement removing Red Hills as part of the Company, the above-listed assets were removed from the company as part of this first phase of restructuring during this third Quarter of 2022. As it was a Rescission, all 18.5 million shares issued to Red Hills as consideration for these removed assets are to be returned to the Treasury of the Company, placing each side exactly as they were just prior to said Agreement.
On September 30th, 2022, the Company, through one of its subsidiaries, acquired 100% interest in “1000 18th St, NE 2020, LLC.” The purchase price for this acquisition was $379,691, which was exchanged for 6,328,181 shares. The property held within the acquired LLC is a 10-unit multifamily residence currently under development. We accounted for the acquisition as an asset acquisition. We measured the value of the acquired physical assets (restricted cash, prepaid insurance, land, and building) and the liabilities assumed (Mortgages, net) by allocating the total cost of the acquisition on a relative fair value basis.
On September 30th, 2022, the Company, through one of its subsidiaries, acquired 100% interest in “1320 8th St Fund LLC., the titled holder to 1320 8th St NW, Washington, DC.” The purchase price for this acquisition was $583,128, which was exchanged for 9,718,808 common shares of the Company. The property held within the acquired LLC is a 10-unit multifamily residence currently under development. We accounted for the acquisition as an asset acquisition. We measured the value of the acquired physical assets (restricted cash, prepaid insurance, land, and building) and the liabilities assumed (Mortgages, net) by allocating the total cost of the acquisition on a relative fair value basis.
We have recorded the 2022 acquisitions as follows:
Schedule of acquisitions December 31, 2022
Restricted Cash $ 160,503
Prepaids 6,000
Land 4,514,000
Building 1,611,000
Deferred financing costs, net 278,168
Total acquisition cost 6,569,671
Accrued expenses (8,602 )
Outstanding balance on assumed mortgages (5,598,250 )
Total carrying amounts recorded $ 962,819
The company continues to review and may adjust the purchase price allocations during the one-year window.
Note 6 - Notes Payable
On April 8th, 2021, the Company executed a Senior Secured Convertible Promissory Note, Securities Purchase Agreement, and ancillary agreements (collectively, the “Agreements”) with Leonite Capital, LLC Per the terms of the Agreements with Leonite Capital, LLC, the Company borrowed the maximum of $555,556, which was tendered. On March 24th, 2023, the Company and Leonite Capital LLC executed an Amendment by which the outstanding balance was increased by $7,500.00, the fixed Conversion Price was reset to $0.03.
Convertible notes payable, consist of the following at December 31, 2022:
Schedule of Convertible Debt
Note payable to an unrelated party, matured April 08, 2022, with interest at 10%, convertible into common shares of the Company $ 277,778 $ 277,778
Note payable to an unrelated party, matured September 20, 2022, with interest at 10%, convertible into common shares of the Company 277,778 277,778
Less discount - (451,144 )
Total $ 555,556 $ 102,412
Note 7: Short Term Loan
On November 30th, 2021, the Company executed a short-term loan of $1,000,000 Secured Note, by 1,500,000 shares of CRDV stock (reserved in bank’s name, subject to loan and stock pledge agreement with NextBank International, Inc, and secured by the then president of the company Mr. Garfield Antonio, as a personal guarantor.
Per the terms of the Agreements with NextBank International, Inc, the Company may borrow up to $1,000,000; which is open with the right of redemption for one year against the collateral of 1,500,000 shares of CRDV stock.
The Private Note has a 7.5% fixed rate that matures on November 30, 2022. As of September 30, 2022, the company has withdrawn the full amount net of the loan less the loan fees.
On September 30th, 2022 NextBank International, Inc, has entered into an agreement whereby it will convert the outstanding balance for shares at a strike price of $0.05, not to exceed 4.9% of the then issued and outstanding shares of the Company. As of September 30, 2022, 1,420,700 shares have been committed to be converted in exchange for $71,035 of the outstanding balance and these shares were issued to Next Bank on October 4th, 2022.
Note 8: Derivative Financial Instruments
The Company is exposed to certain risks arising from both business operations and economic conditions, including interest rate risk. To mitigate the impact of interest rate, the Company enters into derivative financial instruments. The Company maintains the majority of its overall interest rate exposure on floating rate borrowings to a fixed-rate basis.
Derivative Instruments
The fair value of interest rate swaps is included within Other non-current liabilities in the Consolidated Balance Sheets. The Company does not net derivatives in the Consolidated Balance Sheets.
Note 9 - Commitments & Contingencies
On April 8th, 2021, the Company executed a Senior Secured Convertible Promissory Note, Securities Purchase Agreement, and ancillary agreements (collectively, the “Agreements”) with Leonite Capital, LLC Per the terms of the Agreements with Leonite Capital, LLC, the Company may borrow up to $555,556; of which $555,556 was tendered, which is open with right of redemption for one year. Prior to the maturity date of the Note, the Company at its option, has the right to redeem in cash in part or in whole, the amounts outstanding. Should the Fund wish to convert this debt into equity, the conversion price shall be sixty-five percent of the lowest Intraday price during the previous 21 days. Pursuant to the Agreements, the Company has earmarked the net proceeds for immediate cash infusion for normative working capital purposes and capital expenditures. Leonite Capital. has agreed that neither it nor any of its affiliates shall engage in any short-selling or hedging of our Common Stock during any time. The foregoing is a summary description of certain terms of the Agreements. For a full description of all terms, please refer to the 8k filed with the SEC and accompanying exhibits thereto. As of September 13th, 2022, the Company has been deemed to be in default of said Note, and the parties are actively negotiating a work-out. On March 24th, 2023, the Company and Leonite Capital LLC executed an Amendment by which the outstanding balance was increased by $7,500.00, the fixed Conversion Price was reset to $0.03.
We will require additional financing to implement our business plan, which may include joint venture projects and debt or equity financings. The nature of this enterprise and constraint of positive cash flow places debt financing beyond the credit-worthiness required by most banks or typical investors of corporate debt until such time as an economically viable profits and losses can be demonstrated. Therefore, any debt financing of our activities may be costly and result in substantial dilution to our stockholders.
Future financing through equity investments is likely to be dilutive to existing stockholders. Also, the terms of securities we may issue in future capital transactions may be more favorable for our new investors. Newly issued securities may include preferences, superior voting rights, and the issuance of warrants or other derivative securities, which may have additional dilutive effects. Further, we may incur substantial costs in pursuing future capital and financing, including investment banking fees, legal fees, accounting fees, and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which will adversely impact our financial condition.
Our ability to obtain needed financing may be impaired by such factors as the capital markets, which could impact the availability or cost of future financings. If the amount of capital we are able to raise from financing activities, together with our revenue from operations, is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations accordingly, we may be required to cease operations.
There is no assurance that we will be able to obtain financing on terms satisfactory to us, or at all. We do not have any arrangements in place for any future financing. If we are unable to secure additional funding, we may cease or suspend operations. We have no plans, arrangements or contingencies in place in the event that we cease operations.
The Company’s guarantees primarily relate to requirements under certain financial obligations and some contracts and have arisen through the normal course of business. These guarantees, with certain financial institutions, have both open and closed-ended terms; with remaining closed-ended terms up to 1.0 years and maximum potential future payments of approximately $1 million in the aggregate.
Note 10 - Related Party
Mr. Garfield Antonio is the owner of Red Hills Capital Advisors LLC, a party to the September 20th, 2021, merger agreement, which was Rescinded on June 28th, 2022.
The company’s short-term loan with NextBank International of $1,000,000 listed on Note 7 is secured by the then CEO of the company, Mr. Garfield Antonio as a personal guarantor and the company has borrowed the full amount.
Mr. Richard Balles Director of the company is also holding a position as the Vice President in NextBank International.
Note 11 - Subsequent Events
On January 3rd, 2023, the Company acquired 1618 21st Place NE Washington, DC. The property is located at 1618 21st Place with a designed total of 15 units and includes: three 3-bedroom, eight 2-bedroom, four 1-bedroom units. The property is nearing the end of the construction process with an anticipated completion by the end of third quarter 2023. The property was valued under the Fair Value methodology assigning a current market value of $1,274,744, which at $0.06, equates to 21,245,740 shares.
On January 31st, 2022, Joseph Gibbons resigned from his position as Chair and Director, his resignation was not the result of any disagreements with management.
On February 13th, 2023, Lara Frits resigned from her position as Director and CEO; on the same date Garfield Antonio resigned his position as Director, and Michael Zink resigned from his position as CFO. Also on February 13th, 2023, Robert Fiallo was appointed as a Director and Board member.
On May 20th, 2023, our CEO was made aware of a lawsuit by an ex-employee of the Company. The Company resolutely rejects the monetary claim for monies owed and while willing to negotiate in good faith, shall defend itself against said lawsuit and is now seeking dismissal of the same.
The Company has evaluated subsequent events through June 30, 2023, the date on which these financial statements were issued.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this annual report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our current chief executive officer and chief financial officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of December 31, 2022, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of December 31, 2022, our disclosure controls and procedures were not effective. The ineffectiveness of our disclosure controls and procedures was due to the existence of material weaknesses identified below.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 14d-14(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
All internal control systems, no matter how well designed, have inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial reporting reliability and financial statement preparation and presentation. In addition, projections of any evaluation of effectiveness to future periods are subject to risk that controls become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022. In making the assessment, management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO - 2013) in Internal Control-Integrated Framework. Based on its assessment, management concluded that, as of December 31, 2022, our Company’s internal control over financial reporting was not effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER INFORMATION
None.
PART III

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Officers and Directors
Name Age Position
Richard Balles Director, President, Chief Executive Officer
Robert Fiallo Director (Appointed February 13th, 2023)
Stalin A. Cruz Director, CFO (resigned July 7th, 2022)
Ronald Silver Director, Chairman (resigned July 7th, 2022)
Kevin Humes Director (resigned July 7th, 2022)
Joseph Gibbons Director (removed July 7th, 2022)
Randy Avon Director (resigned July 7th, 2022)
Charles Arnold Director (resigned July 7th, 2022)
Lara Fritts Director (resigned February 13th, 2023)
Michael Zink Director (resigned February 13th, 2023)
On February 13th, 2023, Lara Frits resigned from her position as Director and CEO; on the same date Garfield Antonio resigned his position as Director, and Michael Zink resigned from his position as CFO. Also on February 13th, 2023, Robert Fiallo was appointed as a Director and Board member.
Robert Fiallo, 56, brings over 25 years of executive leadership and experience in finance, having in management positions at F&M Bank, BB&T and as founder, Chair and Executive Officer of Fidelity & Trust Bank. Mr. Fiallo earned his BA in business at University of Maryland in 1989.
(b) Significant Employees.
If we lose the services of our key executive officers, our business would likely be materially and adversely affected. At this time, we do not currently have “key man” life insurance for any of our executive officers.
(c) Family Relationships.
None.
(d) Involvement in Certain Legal Proceedings.
There have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of the Registrant during the past ten years.
Number and Terms of Office of Officers and Directors
Each member of our Board of Directors serves for a term ending on the date of the annual meeting of stockholders following the annual meeting of the stockholders at which such director was elected. Notwithstanding the foregoing, each director shall serve until his or her successor is elected and qualified or until his or her death, resignation or removal. Our officers are appointed by our Board to a term of one year and serve until their successors are duly appointed and qualified, or until the officer is removed from office.
Committees of the Board of Directors
We do not have a standing nominating, audit or compensation committee. Rather, our full Board of Directors performs the functions of these committees. While the company is reviewing several qualified people for such committees, none have been formed yet. Additionally, because our common stock is not listed for trading or quotation on a national securities exchange, we are not required to have such committees.
Director Nominations
Our full Board of Directors recommends candidates for nomination for election at the annual meeting of the stockholders. We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the Board of Directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.
Code of Ethics
We have not yet adopted a code of ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. We expect that we will adopt a code of ethics in the near future.
Indemnification
Under our Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner, he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney's fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Oklahoma.
Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Oklahoma law, we have been advised that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.
Family Relationships
None.
Involvement in Certain Legal Proceedings
No executive officer, member of the Board of Directors or control person of our Company has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years.

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. EXECUTIVE COMPENSATION
In order to attract, retain and motivate executive talent necessary to support the Company’s long-term business strategy, in the future, we may award our executives and any future executives with long-term, stock award, at the sole discretion of our Board.
Director Compensation
Name and Principal Position
Year
Salary ($)
Stock Awards ($)
Total ($)
Garfield T. Antonio - President
$ -
$ -
$ -
Charles Arnold - Chief Executive Officer
-
-
-
Richard Balles - Director, Chief Executive Officer
-
200,050
200,050
Lara Fritts - Chief Executive Officer
$ 180,000
200,050
380,050
We believe that the primary goal of executive compensation is to align the interests of our executive officers with those of our shareholders in a way that allows us to attract and retain the best executive talent. Additionally, in order to ensure our executive officers are compensated within the current industry ranges for their respective duties.
The compensation incentives designed to further these goals take the form of annual cash compensation and equity awards, as well as long-term cash and/or equity incentives measured by Company and/or individual performance targets to be established by our Compensation Committee. In addition, our Compensation Committee may determine to make equity-based awards to new executive officers in order to attract talented professionals to serve us.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth information regarding the beneficial ownership of our common stock as of December 31st, 2022:
· each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;
· each of our executive officers and directors that beneficially owns shares of our common stock; and
· all our executive officers and directors as a group.
In the table below, percentage ownership is based on 73,390,321 shares of our common stock issued and outstanding as of December 31, 2022
Name and Title
Amount and Nature of
Beneficial Ownership
Percentage of
Class - Common
Garfield T Antonio, past Dir. (1)
0%
Stalin A Cruz. past Dir.
5,000,000
11.34%
Kevin Humes, past Dir.
4,500,000
10.21%
Ronald Silver, past Dir.
4,500,000
10.21%
Charles Arnold, past Dir. (2)
2,666,667
6.05%
Randy Avon, past Dir.
1,000,000
2.27%
David E Price, Corporate Counsel
1,000,000
2.27%
Richard Balles, Dir., CEO
34,818,333
46%
All Directors and Officers as a Group
54,083,334
71.4%
As of October, 2022, Antonio Garfield had returned all the shares which he was issued to Treasury and is no longer a shareholder.
The shares listed under Mr. Charles Arnold include 1,666,667 shares in Crest Ventures LLC, of which Mr. Arnold is the beneficial owner.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
None.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Audit Fees. Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by our independent registered public accounting firm in connection with regulatory filings. The aggregate fees billed by M.S. Madhava Rao, Chartered Accountant for professional services rendered for the audit of our annual financial statements included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2022, were $21,500.
Audit-Related Fees. Audit-related services consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards.
Tax Fees. Tax fees consist of fees billed for tax planning services and tax advice. The board of directors must specifically approve all other tax services.
All Other Fees. Other services are services provided by the independent registered public accounting firm that do not fall within the established audit, audit-related, and tax services categories. The board of directors preapproves specified other services that do not fall within any of the specified prohibited categories of services.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this annual report:
(1) Financial Statements
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Operations and Comprehensive Loss
Consolidated Statements of Stockholders’ Deficit
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
(2) Financial Statements Schedules
All financial statements schedules are omitted because they are not applicable or the amounts are immaterial and not required, or the required information is presented in the financial statements and notes thereto beginning on page of this annual report.
(3) Exhibits
We hereby file as part of this annual report the exhibits listed in the attached Exhibit Index. Exhibits which are incorporated herein by reference can be inspected and copied at the public reference facilities maintained by the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Copies of such material can also be obtained from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates or on the SEC website at www.sec.gov.
31.1*
Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**
Certification by the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**
Certification by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH*
Inline XBRL Taxonomy Extension Schema Document
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*
Cover Page Interactive Data File (formatted in inline XBRL, and included in exhibit 101).
* Filed herewith.
** Furnished herewith.
+ Management contract, compensation plan or arrangement.