EDGAR 10-K Filing

Company CIK: 1338929
Filing Year: 2022
Filename: 1338929_10-K_2022_0001477932-22-002432.json

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ITEM 1. BUSINESS
Item 1.
Business
Item 1B.
Unresolved Staff Comments
Item 2.
Properties
Item 3.
Legal Proceedings
Item 4.
Mine Safety Disclosures
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6.
Selected Financial Data
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
Item 8.
Financial Statements and Supplementary Data
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Item 9A.
Controls and Procedures
Item 9B.
Other Information
Item 10.
Directors, Executive Officers and Corporate Governance
Item 11.
Executive Compensation
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13.
Certain Relationships and Related Transactions, and Director Independence
Item 14.
Principal Accounting Fees and Services
Item 15.
Exhibits, Financial Statement Schedules
PART I
Item 1. Business
Forward Looking Statements
This annual report on Form 10-K and the documents incorporated by reference herein contain forward-looking statements that are not statements of historical fact and may involve a number of risks and uncertainties. These statements related to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future prospects, developments and business strategies.
We have used the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “will,” “plan,” “predict,” “project” and similar terms and phrases, including references to assumptions, in this annual report on Form 10-K and our incorporated documents to identify forward-looking statements. These forward-looking statement are made based on expectations and beliefs concerning future events affecting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed in or implied by these forward-looking statements. The following factors are among those that may cause actual results to differ materially from our forward-looking statements:
∙
General economic and industry conditions;
∙
Out history of losses, deficits and negative operating cash flows;
∙
Our limited operating history;
∙
Industry competition;
∙
Environmental and governmental regulation;
∙
Protection and defense of our intellectual property rights;
∙
Reliance on, and the ability to attract, key personnel;
∙
Other factors including those discussed in “Risk Factors” in this annual report on Form 10-K and our incorporated documents.
You should keep in mind that any forward-looking statement made by us in this annual report or elsewhere speaks only as of the date on which we make it. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this annual report after the date of filing, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this annual report or elsewhere might not occur.
In this annual report on Form 10-K, the terms “Global Fiber Technologies, Inc.” “Company,” “we,” “us” and “our” refer to Global Fiber Technologies, Inc. and its subsidiaries.
General Overview
Global Fiber Technologies, Inc. was incorporated in Nevada on March 25, 2005 as “Premier Publishing Group, Inc.”. Originally formed as a publishing company, the Company ceased its publishing operations in or around 2007.
The Company created a new subsidiary, Fiber Chain, Inc. in November 2018 for the purpose of operating as an intermediary providing an expedited trading platform for buyers and sellers to efficiently consummate fiber transactions. The Company owns 51% of Fiber Chain, Inc. Fiber Chain, Inc. has had no operations to date nor did it have assets or liabilities as of December 31, 2020 and 2019, respectively.
On June 18, 2019, the Company completed its acquisition of assets from AH Originals, Inc. (“AHO”), a corporation controlled by the same owner group of Global Fiber Technologies, Inc., for the consideration of 6,400,000 shares of common stock of the Company to be issued and the issuance of a promissory note of $447,150 that bears 3% interest per annum and has a one-year term with eight options to extend the maturity date for three-month periods. In addition, the Company issued to AHO 200,000 common shares of Authentic Heroes, Inc. (“AHI”), a subsidiary created by the Company, to hold the purchased assets. AHI has commenced minimal operations as of December 31, 2019.
Our address is 50 Division Street Suite 500, Somerset NJ 08873. Our corporate website is http://globalfibertechnologies.com/.
We have never declared bankruptcy or been in receivership. We have earned minimal revenues and have limited cash on hand. We have sustained losses since inception and have primarily relied upon the sale of our securities and loans from related parties for funding.
Our Current Business
Global Fiber Technologies, Inc. comprises three separate operating subsidiaries which are driving fiber industry innovation through technologies related to fiber rejuvenation, authentication and distribution. The Company’s business plan is to operate a fiber rejuvenation technology company. It plans on offering branded fabrics, apparel and uniforms to the corporate, hotel, hospital and military markets. We will achieve this by utilizing a patented and proprietary process for rejuvenating textile waste into high quality fabrics and apparel.
Competition
In the uniform and related products segment, we will compete with many firms, including corporations with large divisions, many of these companies have great financial, technical or marketing resources, longer operating histories, greater brand recognition or larger customer bases than we do and may be able to respond more effectively to changing business and economic conditions than we can. The nature and degree of competition varies with the customer and the market. Industry statistics are not available.
Competitive pricing may require us to reduce our future prices, which would impact future profitability or result in lost sales. Our competitors, many of whom have greater resources than we do, may be better able to withstand these price reductions and lost sales.
Seasonality
We do not have a seasonal business cycle.
Employees
We have no employees. Our officers and directors furnish their time to the development of the Company at no cost and intend to do whatever work is necessary in order to generate revenues. We do not foresee hiring any employees in the near future.
Research and Development
We have not incurred any research and development expenditures over the last two fiscal years.
Intellectual Property
We do not currently own any intellectual property.
WHERE YOU CAN FIND MORE INFORMATION
You are advised to read this Form 10-K in conjunction with other reports and documents that we file from time to time with the SEC. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available from the SEC website at www.sec.gov.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors
As a “smaller reporting company”, we are not required to provide the information required by this Item.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments
As a “smaller reporting company”, we are not required to provide the information required by this Item.

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ITEM 2. PROPERTIES
Item 2. Properties
Our principal business and corporate address is 50 Division Street Suite 501Somerset NJ 08876; our telephone number is (973) 390-0072. Our facilities are leased on a month-to-month basis at a price of $5,280 per month.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings
From time to time, we may become involved in litigation relating to claims arising out of our operations in the normal course of business. As of the date of the filing of this Annual Report, our company is party to three pending litigation matters.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures
Not applicable.

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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
Our common shares are listed for quotation on the OTC Markets under the symbol “GFTX”.
Our shares are issued in registered form. Signature Stock Transfer, Inc., 114673 Midway Road, Suite 220, Addison TX 75001 (Telephone: (972) 612-4120) is the registrar and transfer agent for our common shares.
On March 15, 2022 , the shareholders’ list showed 165 registered shareholders with 1,454,435,322 common stock outstanding.
Dividend Policy
We have not paid any cash dividends on our common stock and have no present intention of paying any dividends on the shares of our common stock. Our current policy is to retain earnings, if any, for use in our operations and in the development of our business. Our future dividend policy will be determined from time to time by our board of directors.
Equity Compensation Plan Information
We do not have any equity compensation plans.
Recent Sales of Unregistered Securities
During the year ended December 31, 2021, the Company issued 1,000,000 shares of common shares for payment of services and 195,970,738 shares to convert the principal amount of $ 205,777 of convertible notes principal and interest. These issuances were exempt under Section 4(a)(2) of the Securities Act.
During the year ended December 31, 2020, the Company issued 700,000 shares of common shares for payment of services valued at $4,550 and 1,217,812 shares to convert a total of $139,643 convertible notes principal and interest. These issuances were exempt under Section 4(a)(2) of the Securities Act.
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
We did not purchase any of our shares of common stock or other securities during our fourth quarter of our fiscal year ended December 31, 2021 and 2020

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. Selected Financial Data
As a “smaller reporting company”, we are not required to provide the information required by 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
The following discussion should be read in conjunction with our consolidated audited financial statements and the related notes that appear elsewhere in this annual report. 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 4include but are not limited to those discussed below and elsewhere in this annual report.
Our consolidated audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Our Current Business
The Company’s business plan is to operate three separate subsidiaries. Authentic Heroes is a company with proprietary know how and patented technology that is currently operating in the memorabilia industry. It has licenses with Universal Music Group artists RUN DMC, YUNGBLUD and is in discussions with several other music artists. Ecotek360 is a fiber rejuvenation technology company. It plans on offering branded fabrics, apparel and uniforms to the corporate, hotel, hospital and military markets and is still in the development stage but running testing in the joint venture with Fiber Conversion Inc a joint development partner in Broadalbin NY. Fiber Chain, Inc is still in the development stage and its business plan is to operate as an intermediary providing an expedited trading platform for buyers and sellers to efficiently consummate fiber transactions. All three subsidiaries will rely substantially on our patents, proprietary know how and trade secrets to compete within the industries they exist in.
Plan of Operations and Cash Requirements
Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
The following summary of our results of operations should be read in conjunction with our financial statements for the year ended December 31, 2021, which are included herein.
December 31,
December 31,
Change
%
Cash and cash equivalents
$ -
$ 8,548
$ (8,548 )
-100.00 %
Prepaid interest and deposits
$ -
$ -
$ -
-
%
Inventories
$ -
$ 60,815
$ 60,815
(100 )%
Operating lease right-of-use assets
$ -
$ -
$ -
-
%
Property and equipment
$ 112,416
$ 163,093
$ (50,677 )
(31.07 )%
Intangible assets
$ 61,466
$ 129,462
$ (67,996 )
(52.52 )%
Total Assets
$ 173,882
$ 361,918
$ (188,036 )
(51.96 )%
Total Liabilities
$ 3,853,272
$ 3,139,998
$ 713,274
22.72 %
Stockholders’ Deficit
$ (3,679,390 )
$ (2,778,080 )
$ (901,310 )
32.44 %
The following summary of our results of operations, for the year ended December 31, 2021, should be read in conjunction with our financial statements, as included in this Form 10-K.
Year ended
December 31,
Change
%
Revenue
$ 5,854
$ 3,994
$ 1,860
46.57 %
Cost of Revenue
(63,814 )
(26,858 )
(36,956 )
137.60 %
Operating Expenses
General and administrative expenses
(154,737 )
(223,826 )
69,139
-32.05 %
Depreciation and amortization
(118,673 )
(114,910 )
(3,763 )
3.27 %
Consulting fees share expense
(10,000 )
-
(10,000 )
100 %
Officer salaries and compensation
-
Stock based compensation
(700 )
(100%)
Other expense
(1,059,867 )
(769,868 )
(289,999 )
(37.67%)
Net loss
$ (1,401,237 )
$ (1,132,218 )
$ (269,019 )
(23.76%)
For the year ended December 31, 2021, and December 31, 2020, we recognized revenue of $5,854 and $3,994, respectively.
Our cost of revenue for the year ended December 31, 2021, are the cost of the entire inventory, which were sold on a fire sale during the year.
For the year ended December 31, 2021, we incurred $154,737 in general and administrative expenses, $118,673 Depreciation and Amortization, $10,000 in consulting fees, resulted in in a net operating loss of $341,370 from operations. Other expenses include $841,322 derivative valuation loss, $195,687 financing cost and $22,858 interest expense on related parties notes payable.
For the year ended December 31, 2020, we incurred $223,876 in general and administrative expenses, $114,910 depreciation and amortization , $4,550 in consulting fees, resulted in net operating loss of $366,200. Other expenses include $588,839 derivative valuation loss, $90,546 financing cost, $90,283 interest on the related parties notes payable resulting in a net loss of $1,135,868.
The increase in net loss during the year ended December 31, 2021, compared to the year ended December 31, 2020 was mainly attributed to increase of loss on change in fair value of derivative liabilities by $252,483 and increase in financing cost by $105,141.
Liquidity and Capital Resources
The following table provides selected financial data about our company as of December 31, 2021 and December 31, 2020, respectively.
Working Capital
December 31,
December 31,
Change
%
Current Assets
$ -
$ 69,363
$ (69,363 )
-100.00 %
Current Liabilities
$ 3,853,272
$ 3,139,998
$ 713,274
22.72 %
Working Capital (deficit)
$ (3,183,915 )
$ (3,070,635 )
$ (782,637 )
25.49 %
Cash Flows
Year ended
December 31,
Change
Cash Flows used in Operating Activities
$ (174,309 )
$ (12,102 )
$ (162,207 )
Cash Flows used in Investing Activities
$ -
$ (78,173 )
78,173
Cash Flows provided by Financing Activities
$ 165,761
$ 94,029
71,732
Net Change in Cash During Period
$ (8,548 )
$ 3,754
$ (12,302 )
Our working capital deficit increased as of December 31, 2021, as compared to December 31, 2020, due to the decrease in our total assets, mainly Inventories $60,815 and cash $8,548.
Cash Flow from Operating Activities
During the year ended December 31, 2021, net cash used in operating activities was $174,309 compared to $12,102 during the year ended December 31, 2020.
The net cash used in operating activities for the year ended December 31, 2021, was mainly attributed to a net loss of $1,401,237, decrease by gain in valuation of derivative liabilities $186,508, gain from extinguishment of convertible notes $251,871 and net changes in operating assets and liabilities of $89,755.
The net cash used in operating activities for the year ended December 31, 2020, was mainly attributed to a net loss of $1,135,868 increased by loss in valuation of derivative liabilities 588,839, gain from extinguishment of derivative liabilities due to conversion $125,845 and net changes in operating assets and liabilities of $194,172.
Cash Flow from Investing Activities
During the year ended December 31, 2021, the company had no cash used or provided in investing activities.
During the year ended December 31, 2020, net cash used in investing activities was $78,173 from the acquisition of license for right of use of $75,000 and acquisition of intangible assets of $3,173.
Cash Flow from Financing Activities
During the year ended December 31, 2021, net cash provided by financing activities was $165,761 compared to $94,029 during the year ended December 31, 2020.
Net cash from financing activities attributed to proceeds from advances from related parties of $165,76 for the year ended December 31, 2021
Net cash from financing activities was $141,000 for the year ended December 31, 2020, attributed to proceeds from issuance of self-liquidating promissory notes of $150,000, offset by repayment of related party notes payable $9,000, and payment of operating lease liabilities of $46.971.
Contractual Obligations
As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.
Going Concern
The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles, which contemplates continuation of the Company as a going concern. The Company has an accumulated deficit of $35,222,530 and $33,821,293 as of December 31, 2021, and December 31, 2020, respectively, which include net losses of 1,401,237 and $1,135,868 for the years ended December 31, 2021, and 2020, respectively. In addition, as of December 31, 2021, and 2020, the Company had a working capital deficit of $3,853,272 and $3,139,998 respectively, with limited cash resources available. Consequently, the aforementioned items raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management plans to raise additional debt or equity and continue to settle obligations by issuing stock. Management plans to continue to raise additional debt and equity until the Company has positive cash flows from an operating company.
The Company’s ability to continue as a going concern is dependent upon its ability to repay or settle its current indebtedness, generate positive cash flow from an operating company, and/or raise capital through equity and debt financing or other means on desirable terms. If the Company is unable to obtain additional funds when they are required or if the funds cannot be obtained on favorable terms, management may be required to restructure the Company or cease operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
Off-Balance Sheet Arrangements
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 are material to stockholders.
Critical Accounting Policies
We prepare our consolidated financial statements in conformity with GAAP, which requires management to make certain estimates and assumptions and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared, and actual results could differ from our estimates and such differences could be material. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation of our financial statements. Please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as included in this Annual Report, for disclosures regarding the Company’s critical accounting policies and estimates.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the valuation of common stock and options issued as stock-based compensation.
Revenue Recognition
The Company recognizes revenue from its contracts with customers in accordance with ASC 606 - Revenue from Contracts with Customers. The Company recognizes revenues when satisfying the performance obligation of the associated contract that reflects the consideration expected to be received based on the terms of the contract.
Revenue related to contracts with customers is evaluated utilizing the following steps: (i) Identify the contract, or contracts, 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; (v) Recognize revenue when the Company satisfies a performance obligation.
Leases
Effective October 1, 2019, the Company adopted the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), and additional ASUs issued to clarify and update the guidance in ASU 2016-02 (collectively, the “new leases standard”), which modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing key information about leasing arrangements. The Company adopted the new leases standard utilizing the modified retrospective transition method, under which amounts in prior periods presented were not restated.
There were no long-term operating lease contracts for the year ended December 31, 2021, and 2020 that require to access (i) whether any are or contain leases, (ii) lease classification, and (iii) initial direct costs.
Stock-based Compensation
We account for stock-based awards at fair value on the date of grant and recognize compensation over the service-period that they are expected to vest. We estimate the fair value of stock options and stock purchase warrants using the Black-Scholes option pricing model. The estimated value of the portion of a stock-based award that is ultimately expected to vest, taking into consideration estimated forfeitures, is recognized as expense over the requisite service periods. The model includes subjective input assumptions that can materially affect the fair value estimates. The expected volatility is estimated based on the most recent historical period of time, of other comparative securities, equal to the weighted average life of the options. The estimate of stock awards that will ultimately vest requires judgment, and to the extent that actual forfeitures differ from estimated forfeitures, such differences are accounted for as a cumulative adjustment to compensation expenses and recorded in the period that estimates are revised. For the year ended December 31, 2021, and 2020, the Company incurred $ 10,000 and $4,550 for stock based compensation, respectively.
Fair Value
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:
Level 1-Quoted market prices for identical assets or liabilities in active markets or observable inputs;
Level 2-Significant other observable inputs that can be corroborated by observable market data; and
Level 3-Significant unobservable inputs that cannot be corroborated by observable market data.
The Company analyzed the conversion option for derivative accounting consideration under ASC 815, “Derivatives and Hedging,” and determined that the convertible notes should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The Company accounts for convertible notes and warrants as a derivative liabilities due to there being no explicit limit to the number of shares to be delivered upon settlement of all conversion options.
Recent Accounting Pronouncements
In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt-Debt with Conversion and Other Options”. The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently assessing the impact of the adoption of this standard on its financial statements.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company”, we are not required to provide the information required by this Item.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and
Board of Directors of Global Fiber Technologies, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Global Fiber Technologies, Inc. (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the two-years in the period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt About the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s accumulated deficit, net loss and working capital deficiency raise substantial doubt about its ability to continue as a going concern for a period of one year from the issuance of the financial statements. Management’s plans are also described in Note 1. The financial statements do not include 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 audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to fraud or error. 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 audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. 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 matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Accounting for Embedded Derivative Liabilities Related to Convertible Debentures
As described in Notes 4 and 5 to the financial statements, the Company had convertible debentures that required accounting considerations and significant estimates.
The Company determined that variable conversion features issued in connection with certain convertible debentures required derivative liability classification. These variable conversion features were initially measured at fair value and subsequently have been remeasured to fair value at each reporting period. The Company determined the fair value of the embedded derivatives using the Black-Scholes-Merton option pricing model.
We identified the accounting considerations and related valuations, including the related fair value determinations of the embedded derivative liabilities of such as a critical audit matter. The principal considerations for our determination were: (1) the accounting consideration in determining the nature of the various features (2) the evaluation of the potential derivatives and potential bifurcation in the instruments, and (3) considerations related to the determination of the fair value of the various debt and equity instruments and the conversion features that include valuation models and assumptions utilized by management. Auditing these elements is especially challenging and requires auditor judgement due to the nature and extent of audit effort required to address these matters, including the extent of specialized skill or knowledge needed.
Our audit procedures related to management’s conclusion on the evaluation and related valuation of embedded derivatives, included the following, among others: (1) evaluating the relevant terms and conditions of the various financings, (2) assessing the appropriateness of conclusions reached by the Company with respect to the accounting for the convertible debt, and the assessment and accounting for potential derivatives and (3) independently recomputing the valuations determined by Management.
/s/ Boyle CPA, LLC
We have served as the Company’s auditor since 2020
Red Bank, NJ
April 15, 2022
(PCAOB ID:6285)
331 Newman Springs Road
P (732) 784-1582
Building 1, 4th Floor, Suite 143
F (732) 510-0665
Red Bank, NJ 07701
Global Fiber Technologies, Inc.
(formerly ECO TEK 360, INC. and Subsidiaries)
Consolidated Balance Sheets
For the Year Ended December 31, 2021 and 2020
December 31, 2021
December 31, 2020
ASSETS
Current Assets
Cash and cash equivalents
$ -
$ 8,548
Prepaid interest and deposits
-
-
Inventories
-
60,815
Total Current Assets
69,363
Property and equipment, net
112,416
163,093
Intangible assets
61,466
129,462
TOTAL ASSETS
$ 173,882
$ 361,918
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Bank overdraft
2,455
Accounts payable and accrued liabilities
274,851
299,732
Accrued compensation
501,250
501,250
Unsecured notes and accrued interest payable
250,464
232,808
Convertible notes and accrued interest - net of debt discount of $0 and $52,720, respectively
429,416
349,222
Convertible notes and accrued interest - related party
78,568
71,534
Promissory note and accrued interest - related party
376,014
362,440
Derivative liabilities
1,058,528
620,149
Advances from related parties
280,416
114,655
Related party loans and accrued interest
259,529
253,927
Self Liquidating Promissory Notes
157,500
150,000
Subscription payable
100,000
100,000
Current liabilities from discontinued operations
84,281
84,281
Total Current Liabilities
3,853,272
3,139,998
Stockholders’ Deficit
Preferred stock, Class B, $0.001 par value, 1,000,000 shares authorized, 200,000 shares issued and outstanding
Common stock $0.001 par value, 2,500,000,000 shares authorized, 1,450,210,322 and 1,253,239,584 shares issued and outstanding, 147,819,000 and 147,819,000 issuable as of December 31, 2021 and 2020, respectively
1,450,210
1,253,239
Additional paid-in capital
30,092,730
29,789,774
Accumulated deficit
(35,222,530 )
(33,821,293 )
Stockholders' deficit
(3,679,390 )
(2,778,080 )
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
$ 173,882
$ 361,918
The accompanying notes are an integral part of these consolidated financial statements.
Global Fiber Technologies, Inc.
(formerly ECO TEK 360, INC. and Subsidiaries)
Consolidated Statements of Operations
For the Year Ended December 31, 2021 and 2020
REVENUE
$ 5,854
$ 3,994
COST OF REVENUES
63,814
26,858
GROSS PROFIT (LOSS)
(57,960 )
(22,864 )
OPERATING EXPENSES
General and administrative
154,737
223,876
Depreciation and Amortization
118,673
114,910
Consulting fees share expense
10,000
4,550
Total Operating Expenses
283,410
343,336
LOSS FROM OPERATIONS
(341,370 )
(366,200 )
OTHER EXPENSE
Loss on change in fair value of derivative liabilities
841,322
588,839
Interest expense and financing costs
195,687
90,546
Interest expense - related parties
22,858
90,283
Total other expense
1,059,867
769,668
NET LOSS
(1,401,237 )
(1,135,868 )
Net loss per share
$ (0.0011 )
$ (0.0020 )
Weighted average common shares outstanding
1,300,075,808
561,901,598
The accompanying notes are an integral part of these consolidated financial statements.
Global Fiber Technologies, Inc.
(formerly ECO TEK 360, INC. and Subsidiaries)
Consolidated Statements of Stockholders’ Deficit
For the Year Ended December 31, 2021 and 2020
Additional
Total
Class B Preferred Stock
Common Stock
Paid-in
Accumulated
Stockholders'
Shares
Amount
Shares
Amount
Capital
Deficit
Deficiency
Balance December 31, 2019
200,000
$ 200
35,027,402
$ 35,028
$ 29,780,891
$ (32,685,425 )
$ (2,869,306 )
Conversion of notes payable
1,217,812,182
1,217,811
4,733
1,222,544
Isssuance of common for services
700,000
3,850
4,550
Cancellation of shares
(300,000 )
(300 )
-
Net Loss
(1,135,868 )
(1,135,868 )
Balance December 31, 2020
200,000
$ 200
1,253,239,584
$ 1,253,239
$ 29,789,774
$ (33,821,293 )
(2,778,080 )
Conversion of notes payable
195,970,738
195,971
293,956
489,927
Isssuance of common for services
1,000,000
1,000
9,000
10,000
Net loss
(1,401,237 )
(1,401,237 )
Balance December 31, 2021
200,000
$ 200
1,450,210,322
$ 1,450,210
$ 30,092,730
$ (35,222,530 )
$ (3,679,390 )
The accompanying notes are an integral part of these consolidated financial statements.
Global Fiber Technologies, Inc.
(formerly ECO TEK 360, INC. and Subsidiaries)
Consolidated Statements of Cash Flows
For the Year Ended December 31, 2021 and 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss
$ (1,401,237 )
$ (1,135,868 )
Adjustments to reconcile net income (loss) to net cash from operating activities:
Loss (Gain) on change in fair value of derivative liabilities
186,508
588,839
Extinguishment of derivative liabilities due to conversion
251,871
125,845
Depreciation - Property and equipment
50,677
49,944
Depreciation - Operating lease right-of-use assets
-
63,638
Amortization - Intangible assets
67,996
1,778
Stock issued for services
9,000
4,550
Stock issues for conversion of notes payables
571,121
Amortization of debt discount
70,374
Changes in operating assets and liabilities:
Bank Indebtedness
2,455
Expense paid for subsidiary
-
(9,903 )
Inventory
60,815
Prepaid interest and deposits
-
96,214
Accounts payable and accrued expenses
(24,881 )
83,489
Accrued interest
51,366
48,998
Net cash used in operating activities
(174,309 )
(12,102 )
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of license for right to use
-
(75,000 )
Acquisition of intangible assets
-
(3,173 )
Net cash used in investing activities
-
(78,173 )
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from related parties
165,761
Proceeds from Self liquidating Promissory Notes
-
150,000
Repayment of promissory note- related party
(9,000 )
Payment of operating lease liabilities
-
(46,971 )
Net cash provided by financing activities
165,761
94,029
Net change in cash and cash equivalents
(8,548 )
3,754
Cash and cash equivalents - beginning of period
8,548
4,794
Cash and cash equivalents - end of period
$ -
$ 8,548
Non-Cash Investing and Financing Activity:
Debt discount from Derviative libilities
-
$ 369,664
Shares issued for convetible notes settlement
$ 490,927
$ 1,222,544
The accompanying notes are an integral part of these consolidated financial statements.
GLOBAL FIBER TECHNOLOGIES, INC.
(FORMERLY ECO TEK 360, INC.)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
NOTE 1 - DESCRIPTION OF BUSINESS AND GOING CONCERN
Global Fiber Technologies, Inc. (“the Company”) was incorporated in Nevada on March 25, 2005. As of December 31, 2021, and December 31, 2020, the Company had 2,500,000,000 shares of authorized common stock.
On June 18, 2019, the Company completed its acquisition of assets from AH Originals, Inc. (“AHO”), a corporation controlled by the same owner group of Global Fiber Technologies, Inc., for the consideration of 6,400,000 shares of common stock of the Company to be issued and the issuance of a promissory note of $447,150 that bears 3% interest per annum and have a one year term with eight options to extend the maturity date for three-month periods. In addition, the Company issued to AHO 200,000 common shares of Authentic Heroes, Inc. (“AHI”), a subsidiary created by the Company, to hold the purchased assets. AHI has commenced minimal operations as of December 31, 2019.
Going Concern
The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles, which contemplates continuation of the Company as a going concern. The Company has an accumulated deficit of $35,222,530 and $33,821,293 as of December 31, 2021, and December 31, 2020, respectively, which include net losses of $1,401,237 and $1,135,868 for the years ended December 31, 2021, and 2020, respectively. In addition, as of December 31, 2021, and December 31, 2020, the Company had a working capital deficit of $3,853,272 and $3,070,635 respectively, with limited cash resources available. Consequently, the aforementioned items raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management plans to raise additional debt or equity and continue to settle obligations by issuing stock. Management plans to continue to raise additional debt and equity until the Company has positive cash flows from an operating company.
The Company’s ability to continue as a going concern is dependent upon its ability to repay or settle its current indebtedness, generate positive cash flow from an operating company, and/or raise capital through equity and debt financing or other means on desirable terms. If the Company is unable to obtain additional funds when they are required or if the funds cannot be obtained on favorable terms, management may be required to restructure the Company or cease operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company uses the accrual basis of accounting and has adopted a December 31 fiscal year end.
Principles of Consolidation
The accompanying consolidated financial statements include all the accounts of the Company and its wholly owned subsidiaries, Trident Merchant Group, Inc. and Progressive Fashions Inc., and its majority owned subsidiaries, Leading Edge Fashion, LLC, Pure361, LLC and Fiber Chain, Inc. which are 51% owned. All significant intercompany accounts and transactions have been eliminated. As noted above in Note 1, our 51% owned subsidiaries, Pure361, Leading Edge Fashions, LLC and Fiber Chain, Inc., had no operations, assets or liabilities as of December 31, 2021, and 2020. Because of this, a non-controlling interest is not reflected in these financial statements. In addition, the Company has consolidated Authentic Heroes, Inc., Inc. of which the Company owns 80%.
Reclassifications
Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported consolidated net loss.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and investments in money market funds. The Company considers all highly liquid instruments with an original maturity of 90 days or less at the time of purchase to be cash equivalents.
Inventories
Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value.
On December 31, 2021, the Company had no acquired inventories.
December 31,
December 31,
Raw Material
$ -
$ 13,631
Finished Goods
-
47,184
$ -
$ 60,815
Equipment
Property and equipment are stated at cost. Costs of replacements and major improvements are capitalized, and maintenance and repairs are charged to operations as incurred. Depreciation expense is provided primarily by the straight-line method over the estimated useful lives of the assets as follows:
Equipment
5 Years
Furniture and Fixtures
7 Years
Forklift
3 Years
December 31,
December 31,
Furniture and Equipment
$ 216,398
$ 216,398
Forklift
20,433
20,433
236,831
236,681
Less accumulated depreciation
(124,415 )
(73,738 )
$ 112,416
$ 163,093
Depreciation expense amounted to $50,677 and $49,944 for the year ended December 31, 2021, and 2020, respectively.
The long-lived assets of the Company are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment” (“ASC 360”), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the year ended December 31, 2021, and 2020, no impairment losses have been identified.
Intangible Assets
The Company accounts for intangible assets (including trademarks and website) in accordance with ASC 350 “Intangibles-Goodwill and Other” (“ASC 350”). ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. In addition, ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates.
The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed, either on a straight-line or accelerated basis over the estimated periods benefited. Patents, technology, and other intangibles with contractual terms are generally amortized over their respective legal or contractual lives. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted.
We amortize the cost of our intangible assets over the 15-year estimated useful life on a straight-line basis.
The following table sets forth the amortization for the intangible assets at December 31, 2021 and 2020:
December 31,
December 31,
Patent
$ 12,406
$ 12,406
Websites
10,690
10,690
Royalties
125,000
125,000
148,096
148,096
Less accumulated amortization
(86,630 )
(18,634 )
$ 61,466
$ 129,462
Amortization expense amounted to $67,996 and $64,966 for the year ended December 31, 2021, and 2020, respectively.
Prepaid interest and deposits
Prepaid interest and deposits consist of prepaid consulting fees, OTC market annual fees and license agreement. Prepaid interest is amortized over the life of the related liability.
Revenue Recognition
The Company recognizes revenue from its contracts with customers in accordance with ASC 606 - Revenue from Contracts with Customers. The Company recognizes revenues when satisfying the performance obligation of the associated contract that reflects the consideration expected to be received based on the terms of the contract.
Revenue related to contracts with customers is evaluated utilizing the following steps: (i) Identify the contract, or contracts, 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; (v) Recognize revenue when the Company satisfies a performance obligation.
Accounts Receivable
Accounts receivable are recorded in accordance with ASC 310, “Receivables.” Accounts receivables are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company does not currently have any amount recorded as an allowance for doubtful accounts. Based on management’s estimate and based on all accounts being current, the Company has not deemed it necessary to reserve for doubtful accounts at this time.
Leases
Effective October 1, 2019, the Company adopted the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), and additional ASUs issued to clarify and update the guidance in ASU 2016-02 (collectively, the “new leases standard”), which modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing key information about leasing arrangements. The Company adopted the new leases standard utilizing the modified retrospective transition method, under which amounts in prior periods presented were not restated. For contracts existing at the time of adoption,. The Company currently do not have any operating lease over 1 year term the to require accessing (i) whether any are or contain leases, (ii) lease classification, and (iii) initial direct costs
Income Taxes
Income taxes are accounted for under the asset and liability method as stipulated by ASC 740 “Income Taxes.” Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities or a change in tax rate is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced to estimated amounts to be realized using a valuation allowance. A valuation allowance is applied when in management’s view it is more likely than not that such deferred tax asset will be unable to be utilized.
The Company adopted certain provisions under ASC Topic 740, which provide interpretative guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Effective with the Company’s adoption of these provisions, interest related to the unrecognized tax benefits is recognized in the financial statements as a component of income taxes.
In the unlikely event that an uncertain tax position exists in which the Company could incur income taxes, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities. Reserves for uncertain tax positions would be recorded if the Company determined it is probable that a position would not be sustained upon examination or if payment would have to be made to a taxing authority and the amount is reasonably estimated. As of December 31, 2020, and 2019, the Company does not believe it has any uncertain tax positions that would result in the Company having a liability to the taxing authorities. The Company’s tax returns are subject to examination by the federal and state tax authorities for the years ended 2017 through 2021.
Stock-based Compensation
We account for stock-based awards at fair value on the date of grant and recognize compensation over the service-period that they are expected to vest. We estimate the fair value of stock options and stock purchase warrants using the Black-Scholes option pricing model. The estimated value of the portion of a stock-based award that is ultimately expected to vest, taking into consideration estimated forfeitures, is recognized as expense over the requisite service periods. The model includes subjective input assumptions that can materially affect the fair value estimates. The expected volatility is estimated based on the most recent historical period, of other comparative securities, equal to the weighted average life of the options. The estimate of stock awards that will ultimately vest requires judgment, and to the extent that actual forfeitures differ from estimated forfeitures, such differences are accounted for as a cumulative adjustment to compensation expenses and recorded in the period that estimates are revised. For the year ended December 31, 2021, and 2020, the Company incurred $10,000 and $76,268 for stock-based compensation, respectively.
Beneficial Conversion Feature
For conventional convertible debt where the rate of conversion is below market value, the Company records any “beneficial conversion feature” (“BCF”) intrinsic value as additional paid in capital and related debt discount.
When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The discount is amortized over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.
Debt Issue Costs
The Company may pay debt issue costs in connection with raising funds through the issuance of debt whether convertible or not or with other consideration. These costs are recorded as debt discounts and are amortized over the life of the debt to the statement of operations as amortization of debt discount.
Original Issue Discount
If debt is issued with an original issue discount, the original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized over the life of the debt to the statement of operations as amortization of debt discount. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.
Use of Accounting Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the valuation of stock-based awards issued and derivatives embedded in financial instruments. Estimates are used in the determination of depreciation, the valuation of non-cash issuances of common stock, stock options and warrants, valuing convertible notes for beneficial conversion features, among others.
Fair Value
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:
Level 1-Quoted market prices for identical assets or liabilities in active markets or observable inputs.
Level 2-Significant other observable inputs that can be corroborated by observable market data; and
Level 3-Significant unobservable inputs that cannot be corroborated by observable market data.
The following table summarizes fair value measurements by level at December 31, 2021, and 2020, measured at fair value on a recurring basis:
December 31, 2021
Level 1
Level 2
Level 3
Total
Liabilities
Derivative Liabilities
$ -
$ -
$ 1,667,700
$ 1,667,700
December 31, 2020
Level 1
Level 2
Level 3
Total
Liabilities
Derivative Liabilities
$ -
$ -
$ 620,149
$ 620,149
Concentration of Credit Risk
The carrying value of short-term financial instruments, including cash, restricted cash, trade accounts receivable, accounts payable, accrued expenses and short-term debt, approximates the fair value of these instruments. These financial instruments generally expose the Company to limited credit risk and have no stated maturities or have short-term maturities and carry interest rates that approximate the market. The Company maintains cash balances at financial institutions that are insured by the FDIC. At December 31, 2021 and December 31, 2020, the Company had no amounts in excess of the FDIC limit.
COVID-19
In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (“COVID-19”) a “Public Health Emergency of International Concern,” and on March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic”. Our operations are in Somerset, NJ which NJ as a whole is characterized as an area that has a “ high concentration of risk” as it relates to COVID-19.
The Company has been following the recommendations of local health authorities to minimize exposure risk for its employees for the past several weeks, including the temporary closures of its offices and having employees work remotely to the extent possible, which has to an extent adversely affected their efficiency. As a result, the Company’s books and records were not easily accessible, resulting in delays in preparation and completion of its financial statements. Further, the various governmental mandatory closures of businesses in these locations have precluded the Company’s personnel, particularly its senior accounting staff, from obtaining access to its subsidiaries’ books and records necessary to prepare the Company’s financial statements that, once audited, comprise the essence of the Annual Report.
New Accounting Pronouncements
In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt-Debt with Conversion and Other Options”. The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company had adopted this standard and determine there is no material impact on its financial statements.
NOTE 3 - CAPITAL STOCK
Preferred Stock
The Company has designated a “Class B Convertible Preferred Stock” (the “Class B Preferred”). The number of authorized shares totals 1,000,000 and the par value is $0.001 per share. The Class B Preferred shareholders vote together with the common stock as a single class. The holders of Class B Preferred are entitled to receive all notices relating to voting as are required to be given to the holders of the Common Stock. The holders of shares of Class B Preferred shall be entitled to 10,000 votes per share. The Class B Preferred Stock will have the rights to liquidation as all classes of the Common Stock of the Company. The Class B Preferred stockholders are entitled to receive non-cumulative dividends at the rate of 8% per annum and are accrued daily. The Class B Preferred Stock shall be redeemed by the Corporation for 100% of the original purchase price plus the amount of cash dividends accrued on the earlier of 6 months from the date of issuance, or the date that the Corporation received its funding from any outside source in conjunction with a merger, reverse merger or any change of control. In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the holders of the Class B Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any assets of the Corporation to the holders of the Common Stock, the amount of $0.035 per share plus any and all accrued but unpaid dividends.
Common Stock
As of December 31, 2021, and 2020, the Company had 1,450,210,322 and 1,253,239,584 shares of its $0.001 par value common stock issued and outstanding, respectively.
During the year ended December 31, 2021, the Company issued common shares as follows,
·
During the year ended December 31, 2021, the company issued 1,000,000 shares to consultant for services rendered for value of $10,000.
During the year ended December 31, 2021, the company issued a total of 195,970,738 shares for settlement of convertible notes and accrued interest of $205,777.
During the year ended December 31, 2020, the Company issued common shares as follows,
·
The company convertible promissory notes Principal balance $596,863 and accrued interest of $37,336 was converted to equity and issued a total of 431,729,278 shares of common stock.
·
The company issued a total of 794,664,070 shares of common stock to settle convertible promissory notes with Principal balance $173,500 and accrued interest of $16,142 was converted to equity. As a result of this conversion a total of $649,742 derivative liabilities was settled.
Warrants Exercisable to Common Shares
The below table summarizes the activity of warrants exercisable for common shares during the year ended December 31, 2021 and the year ended December 31, 2020:
Number of
Weighted Average
Shares
Exercise Price
Balance as of December 31, 2019
1,150,363
$ 0.30
Granted
Exercised
(102,689 )
-
Forfeited
-
-
Balance as of December 31, 2020
935,436
$ 0.30
Granted
-
Exercised
-
-
Forfeited
-
-
Balance as of December 31, 2021
935,436
$ 0.30
The following table summarizes information relating to outstanding and exercisable stock warrants as of December 31, 2021:
Warrants Outstanding
Weighted Average
Remaining Contractual
Weighted Average
Number of Shares
life (in years)
Exercise Price
935,436
3.68
$ 0.30
As of December 31, 2021 and December 31, 2020, the intrinsic value warrants outstanding was $0 and $0 based on the closing market price of $0.002 on December 31, 2021 and $0.002 on December 31, 2020, respectively.
Stock Options
During the year ended December 31, 2017, the Company granted 2,650,000 options to consultants, employees and management. One hundred thousand of those options had an exercise price of $.0001, and 250,000 options at an exercise price of $0.01 vested immediately and were valued at the fair value of the Company’s stock at the measurement date less the exercise price. The value of the options was $151,490 and recorded as stock-based compensation. The other 2,300,000 of options vested immediately and the fair value of these options were calculated using the Black-Scholes-Merton model. The stock compensation expense related to these options for the year ended December 31, 2017 was $433,870. During the year ended December 31, 2019, the expiry terms of 875,000 options granted during the year ended December 31, 2017 were extended for two years, resulting in fair value adjustment of $46,513 recorded under stock based compensation expense.
During the year ended December 31, 2019, the Company granted 50,000 options to consultants with an exercise price of $0.50 vested immediately and the fair value of these options were calculated using the Black-Scholes-Merton model. The stock compensation expense related to these options was $37,061.
There were no stock options issuance during the years ended December 31, 2021 and 2020.
NOTE 4 - NOTES PAYABLE
Unsecured Notes Payable
On November 25, 2014, the Company issued an unsecured promissory note to an individual in the amount of $100,000 at 10% interest and due on April 1, 2015. On April 1, 2016 the Company entered into a forbearance agreement. The Company was granted an extension of the note through September 30, 2016 in consideration of 150,000 shares of common stock valued at $150,000 with interest accruing after March 29, 2016 at 12%. The lender was issued an additional 50,000 shares valued at $50,000 to extend the note to August 31, 2017. During the year ended December 31, 2019, the Company made $15,000 repayment. The initial extension fee was amortized ratably over the extension period of 180 days. The note and accrued interest were $221,503 and $28,961 as of December 31, 2021 and December 31, 2020. The note is currently in default.
Convertible Notes Payable
As of December 31, 2021 and 2020 convertible notes outstanding $ 501,856 and $ 349,922 respectively.
December 31
Principal balances
$ 334,500
$ 308,460
Discount
-
Accrued Interest
94,916
41,462
$ 429,416
$ 349,922
NOTE 5 - DERIVATIVE LIABILITIES
The Company analyzed the conversion option for derivative accounting consideration under ASC 815, “Derivatives and Hedging,” and determined that the convertible notes should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The Company accounts for convertible notes and warrants as a derivative liability due to there being no explicit limit to the number of shares to be delivered upon settlement of all conversion options.
The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Monte Carlo model to calculate the fair value as of December 31, 2020.
The following table summarizes the derivative liabilities included in the balance sheet at December 31, 2021:
Fair Value Measurements Using Significant Observable Inputs (Level 3)
Balance - December 31, 2020
$ 620,149
Reduction of derivative liabilities from convertible notes to shares of common stock
(284,150 )
Net Loss (gain) on change in fair value of the derivative
719,529
Balance - December 31, 2021
$ 1,058,528
NOTE 6 - ACQUISITIONS OF ASSETS
On June 18, 2019, the Company completed its acquisition of assets from AH Originals, Inc., a corporation controlled by the same owner group of Global Fiber Technologies, Inc., for the consideration of 6,400,000 shares of common stock to be issued, cash advances of $32,850 and the issuance of a promissory note of $447,150 bears 3% interest per annum and has a one-year term with eight options to extend the maturity date for three-month periods. Management did not consider the transaction to be a business combination due to the common control of AHO and the Company. The assets were recorded at the carrying value. The stock was recorded at is par value and the debt as its fair value. Management considered the 3% interest per the note to be below market and recorded a discount of $211,123.
The acquired assets and assumed liabilities from AH Originals, Inc. summarized as follows:
Assets Acquisition
Equipment
$
214,598
Inventory
60,815
Web Site
10,690
Patent
5,510
$
291,613
Less Assumed Liabilities
16,336
$
275,277
NOTE 7 - RELATED PARTY TRANSACTIONS
During the year ended December 31, 2021, net cash proceeds of $165,761 were received from related parties for operating expenses. There were no advances from related party in the year ended December 31, 2020.
Promissory Notes Payable - related party
On June 18, 2019, the Company issued a promissory note at a principal amount of $447,150 as part of the consideration for the acquisition of assets from AH Originals, Inc., a corporation controlled by the same owner group of Global Fiber Technologies, Inc. The promissory note bears 3% interest per annum and have a one-year term with eight options to extend the maturity date for three-month periods. During the year ended December 31, 2019, debt discount of $35,187 has been amortized.
Convertible Notes Payable - related party
In August 2015, the Company issued an unsecured promissory note to an investor in the amount of $50,000, convertible to common stock at $1.00 per share. The note bears an interest rate of 8% per annum and matured on August 8, 2016. The note is currently unpaid and in default. The note does not contain a beneficial conversion feature.
Related Party Loans
During 2016, the Company received loans from the CEO and a member of the board of directors totaling $284,900. In the year ended December 31, 2017, the Company received additional loans from these individuals in the amount of $160,650. The loans bear interest at 5% per annum and matured on June 30, 2017, and September 30, 2017. During the year ended December 31, 2017, $241,059 of the notes and interest was converted at approximately $0.19 for 580,000 common shares. The conversion of debt resulted in a gain on extinguishment of debt in the amount of $130,859 in the year ended December 31, 2017.
Balances of all loans due to related parties as of December 31, 2021:
Principal
Accrued Interest
Total
Promissory note - related party (net of $175,936 discount)
$ 271,214
$ 104,800
$ 376,014
Convertible notes - Related party
50,000
28,568
78,568
Related Party Loans
208,150
51,379
259,529
Total Related Parties Loans
529,364
184,747
$ 714,111
Balances of all loans due to related parties as of December 31, 2020:
Principal
Accrued Interest
Total
Promissory note - related party (net of $175,936 discount)
$ 271,214
$ 91,226
$ 362,440
Convertible notes
50,000
21,534
71,534
Related Party Loans
208,150
45,777
253,927
Total Related Parties Loans
529,364
158,537
$ 687,901
NOTE 8- LEASES
The Company’s right-of-use assets under operating lease for an office premise had expired on October 1 and the lease was not renewed. There are no lease liabilities balances as of December 31, 2021.
The company currently do not have any long-term operating lease. Our operating lease expenses of $506 and $15,385 for the year ended December 31, 2021 and 2020 respectively.
NOTE 9 - INCOME TAXES
The Company provides for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.
The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the statutory rate to the income tax amount recorded as of December 31, 2021, and 2020, are as follows:
December 31,
December 31,
Net operating loss carryforward
$ 30,514,150
$ 29,845,293
Effective tax rate
21 %
21 %
Deferred tax asset
6,386,972
6,267,512
Less: Valuation allowance
(6,386,972 )
(6,267,512 )
Net deferred asset
$ -
$ -
As of December 31, 2021, the Company had approximately $30.5 million in net operating losses (“NOLs”) that may be available to offset future taxable income, which begin to expire between 2029 and 2039. NOLs generated in tax years prior to December 31, 2017, can be carryforward for twenty years, whereas NOLs generated after December 31, 2017, can be carryforward indefinitely. In accordance with Section 382 of the U.S. Internal Revenue Code, the usage of the Company’s net operating loss carry forwards is subject to annual limitations following greater than 50% ownership changes. Tax returns for the years ended 2013 through 2020 are subject to review by the tax authorities.
NOTE 10 - COMMITMENTS AND CONTINGENCIES
As of the date of this filing, the Company is a party to three pending litigation matters. The Company does not believe it has any liability nor has it accrued any liability as of December 31, 2021 and 2020 for the following:
One matter is entitled Randazzo LLC v. Avani Holdings LLC & Global Fashion Technologies, Inc. This litigation was initiated by the plaintiff in order to evict Avani Holdings LLC from its rented premises in California and to recover unpaid rent. GFTX does not operate out of the premises in question and has never signed any leases or other documents with the plaintiff. A judgment of eviction was entered, but GFTX does not operate out of the premises in question and therefore did not appear in the matter to oppose the judgment of eviction. The plaintiff is also seeking unpaid rent in the amount of $26,595.
The second matter is entitled Patricia Witthuhn v. Global Fashion Technologies, Inc. This litigation was initiated by the plaintiff in order to collect wages allegedly due pursuant to her employment with Avani Holdings LLC. The Company never hired Ms. Witthuhn and never acquired Avani Holdings, LLC. Consequently, there is no legitimate cause of action against the Company. However, due to cash flow constraints, the Company is unable to hire outside counsel for this litigation. The amount being sought by the plaintiff is approximately $15,000.
The third matter is entitled William Corso v. Global Fashion Technologies, Inc. This litigation was initiated by the plaintiff in order to collect wages allegedly due pursuant to his employment with Avani Holdings LLC. The Company never hired Mr. Corso and never acquired Avani Holdings, LLC. Consequently, there is no legitimate cause of action against the Company. However, due to cash flow constraints, the Company is unable to hire outside counsel for this litigation. The amount being sought by the plaintiff is approximately $40,000.
NOTE 11- NET LOSS PER SHARE
Potentially dilutive securities are excluded from the calculation of net loss per share when their effect would be anti-dilutive. For all periods presented in the consolidated financial statements, all potentially dilutive securities have been excluded from the diluted share calculations as they were anti-dilutive as a result of the net losses incurred for the respective periods. Accordingly, basic shares equal diluted shares for all periods presented.
Potentially dilutive securities were comprised of the following:
December 31
December 31,
Warrants
1,150,363
935,436
Options
2,700,000
2,700,000
Convertible notes payable, including accrued interest
106,911,847
590,374,884
110,762,210
594,010,320
NOTE 12 - SUBSEQUENT EVENTS
Subsequent to December 31, 2021, and through the date that these financials were made available, the Company had the following subsequent events:
On February 2022 the company issued 4,225,000 common stock shares valued at $15,221 at current market price to settle some of its convertible notes.

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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
There were no disagreements related to accounting principles or practices, financial statement disclosure, internal controls or auditing scope or procedure during the two fiscal years and interim periods.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures
Evaluation Of Disclosure Controls And Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer (our chief executive officer), we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective such that the material information required to be included in our Securities and Exchange Commission reports is accumulated and communicated to our management, including our principal executive and financial officer, recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms relating to our company, particularly during the period when this report was being prepared.
Management’s Annual Report On Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for our company.
Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.
Under the supervision and with the participation of our president and our chief executive officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of December 31, 2021, based on the framework set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our evaluation under this framework, management concluded that our internal control over financial reporting was not effective as of the evaluation date due to the factors stated below.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of evaluation date and identified the following material weaknesses:
Insufficient Resources: We have an inadequate number of personnel with requisite expertise in the key functional areas of finance and accounting.
Inadequate Segregation Of Duties: We have an inadequate number of personnel to properly implement control procedures.
Lack Of Audit Committee: We do not have a functioning audit committee resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.
Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel and (3) may consider appointing an audit committee member in the future.
Management, including our president and our chief executive officer, have discussed the material weakness noted above with our independent registered public accounting firm. Due to the nature of this material weakness, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.
Changes In Internal Controls Over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the last fiscal quarter for our fiscal year ended December 31, 2021 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
All directors of our company hold office until the next annual meeting of the security holders or until their successors have been elected and qualified. The officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office. Our directors and executive officers, their ages, positions held, and duration as such, are as follows:
Name
Position Held
with the Company
Age
Date First Elected
or Appointed
Christopher H. Giordano
President and Director
August 4, 2010
Paul Serbiak
CEO, Treasurer and Director
February 26, 2015
Scott Todd
Director
January 23, 2017
Business Experience
The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee of our company, indicating the person’s principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.
Christopher A. Giordano - President and Director
Mr. Giordano is the owner of Birchwood Capital Advisors, LLC., which provides financial and business consulting services to small and medium size businesses primarily in the bankruptcy and work-out arenas. Birchwood was the manager of the Distressed Opportunities Fund, LP from the period of 1990 through 2001. The fund was a principal investor and or advisor to 37 Bankruptcies and Out of Court Restructurings. From 1980 through 1990, Mr. Giordano served as a Senior VP in the Asset Management division Paine Webber. Mr. Giordano formed and owned Manchester Rhone Securities, an NASD member firm which underwrote several IPO’s, until its sale in 1993.
Our company believes that Mr. Giordano’s professional background experience gives him the qualifications and skills necessary to serve as a director and officer of our company.
Paul Serbiak - CEO, Treasurer, Director and Secretary
Mr. Serbiak is currently a Managing Partner of Pure Systems Sustainable Product Technologies as well as CEO and founder of Ideas To Market First, LLC, an innovation practice that specializes in open innovation strategy and developing unused IP for corporate clients. Paul career includes serving as a Global Vice President at Johnson and Johnson as well as senior strategic roles at Procter & Gamble and Kimberly Clark.
Our company believes that Mr. Serbiak’s professional background experience gives him the qualifications and skills necessary to serve as a director and officer of our company.
Scott Todd - Director
Mr. Todd has over 5 years as a senior licensing brand strategist with expertise in licensing, business development, retail development, sales and sales management with a track record of building successful brands and sustainable programs. A visionary with proficiency in creating strategic partnerships in diverse industries and across multiple categories. Able to convey ideas clearly yet forcefully, negotiate win-win business deals and maintain strong long-term relationships. A team builder focused on the bottom line. Can negotiate complex contracts and motivate a team of diverse talents and skill sets. He has 3 children living in New Jersey.
Our company believes that Mr. Todd’s professional background experience gives him the qualifications and skills necessary to serve as a director of our company.
Term of Office
Our directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
All officers and directors listed above will remain in office until the next annual meeting of our stockholders, and until their successors have been duly elected and qualified. There are no agreements with respect to the election of Directors. We have not compensated our Directors for service on our Board of Directors, any committee thereof, or reimbursed for expenses incurred for attendance at meetings of our Board of Directors and/or any committee of our Board of Directors. Officers are appointed annually by our Board of Directors and each Executive Officer serves at the discretion of our Board of Directors. We do not have any standing committees. Our Board of Directors may in the future determine to pay Directors’ fees and reimburse Directors for expenses related to their activities.
Employment Agreements
Other than as set forth below, we have no formal employment agreements with any of our directors or officers.
On December 30, 2016 we entered into an employment agreement with Paul Serbiak, our CEO and Treasurer, wherein Mr. Serbiak will begin to earn a salary upon our company receiving funding from a potential private placement, while also being granted both vested and incentive-based stock options. Specifically, the base salary for Mr. Serbiak shall initially be set at $90,000 per year but has the potential to incrementally increase up to $200,000 per year based on the Company achieving certain revenue goals. Moreover, Mr. Serbiak’s contract provides for a minimum annual bonus of thirty-percent (30%) of his base salary, but gives the Company the discretion to award an annual bonus of up to three-hundred-percent (300%) of his base salary. As a signing bonus, Mr. Serbiak received 1,500,000 options to purchase shares of the Company’s common stock that are exercisable for a period of ten years at the market close price on December 31, 2016. In addition, Mr. Serbiak’s contract provides for up to ten incentive stock option awards of 1% of the shares of common stock outstanding $1,000,000 in net income received by the Company over the next ten years. Such options would be exercisable at the closing bid price for the ten days preceding the Company’s achievement of each award milestone.
On February 14, 2017, we entered into an employment agreement with Christopher Giordano, our President, wherein Mr. Giordano will begin to earn a salary upon our company receiving funding from a potential private placement, while also being granted both vested and incentive-based stock options. Specifically, his salary shall not be earned or payable until such time that the Company raises at least $2,000,000 in a private placement. The base salary for Mr. Giordano shall initially be set at $90,000 per year but has the potential to incrementally increase up to $200,000 per year based on the Company achieving certain revenue goals. Moreover, Mr. Giordano’s contract provides for a minimum annual bonus of thirty-percent (30%) of his base salary, but gives the Company the discretion to award an annual bonus of up to two-hundred-percent(200%) of his base salary. As a signing bonus, Mr. Giordano received 250,000 options to purchase shares of the Company’s common stock that are exercisable for a period of five years at a strike price of $0.50 per share. In addition, Mr. Giordano’s contract provides for up to ten incentive stock option awards of 0.75% of the shares of common stock outstanding per $1,000,000 in net income received by the Company over the next ten years. Such options would be exercisable at the closing bid price for the ten days preceding the Company’s achievement of each award milestone.
Family Relationships
There are no family relationships between any of our directors, executive officers and proposed directors or executive officers.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or executive officers has, during the past ten years:
1.
been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences);
2.
had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;
3.
been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
4.
been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
5.
been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
6.
been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26)), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29)), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Compliance with Section 16(A) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our shares of common stock and other equity securities, on Forms 3, 4 and 5, respectively. Executive officers, directors and greater than 10% shareholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports they file.
Based solely on our review of the copies of such forms received by our company, or written representations from certain reporting persons that no Form 5s were required for those persons, we believe that, during the fiscal year ended December 31, 2019, all filing requirements applicable to our officers, directors and greater than 10% beneficial owners as well as our officers, directors and greater than 10% beneficial owners of our subsidiaries were complied with, with the exception of the following:
Name
Number of
Late
Reports
Number of
Transactions
Not
Reported on
a
Timely Basis
Failure to
File
Requested
Forms
Christopher Giordano(2)
Scott Todd(1)
_________
(1)
The insider has yet to file a Form 3, Initial Statement of Beneficial Ownership.
(2)
The insider has yet to file a Form 4, Statement of Changes in Statement of Beneficial Ownership.
Code of Ethics
We have adopted a Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions. Our Code of Ethics is designed to deter wrongdoing and promote: (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (ii) full, fair, accurate, timely and understandable disclosure in reports and documents that we file with, or submit to, the SEC and in our other public communications; (iii) compliance with applicable governmental laws, rules and regulations; (iv) the prompt internal reporting of violations of our Code of Ethics to an appropriate person or persons identified in the code; and (v) accountability for adherence to our Code of Ethics. We will provide any person without charge a copy of our code of ethics upon receiving a written request which may be mailed to our office at 50 Division Street, Suite 501, Somerville, New Jersey 08876.
Board and Committee Meetings
Our board of directors held no formal meetings during the year ended December 31, 2019. All proceedings of the board of directors were conducted by resolutions consented to in writing by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the Nevada General Corporate Law and our Bylaws, as valid and effective as if they had been passed at a meeting of the directors duly called and held.
Nomination Process
As of December 31, 2020, we did not effect any material changes to the procedures by which our shareholders may recommend nominees to our board of directors. Our board of directors does not have a policy with regards to the consideration of any director candidates recommended by our shareholders. Our board of directors has determined that it is in the best position to evaluate our company’s requirements as well as the qualifications of each candidate when the board considers a nominee for a position on our board of directors. If shareholders wish to recommend candidates directly to our board, they may do so by sending communications to the president of our company at the address on the cover of this annual report.
Audit Committee
Currently our audit committee consists of our entire board of directors. We do not have a standing audit committee as we currently have limited working capital and minimal revenues. Should we be able to raise sufficient funding to execute our business plan, we will form an audit, compensation committee and other applicable committees utilizing our directors’ expertise.
Audit Committee Financial Expert
Currently our audit committee consists of our entire board of directors. We do not currently have a director who is qualified to act as the head of the audit committee.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation
The particulars of the compensation paid to the following persons:
(a)
our principal executive officer;
(b)
each of our two most highly compensated executive officers who were serving as executive officers at the end of the years ended December 31, 2021 and 2020; and
(c)
up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the years ended December 31, 2021 and 2020, who we will collectively refer to as the named executive officers of our company, are set out in the following summary compensation table, except that no disclosure is provided for any named executive officer, other than our principal executive officers, whose total compensation did not exceed $100,000 for the respective fiscal year:
SUMMARY COMPENSATION TABLE
Name and Principal Position
Year
Salary ($)
Bonus ($)
Stock Awards ($)
Option Awards ($)
Non-Equity Incentive Plan Compensa-tion ($)
Change in Pension
Value and Nonqualified Deferred Compensa-tion Earnings
($)
All
Other Compensa-tion
($)
Total ($)
Christopher Giordano
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
President, Treasurer and Director
Nil
Nil
NIL
Nil
Nil
Nil
Nil
Nil
Paul Serbiak
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
CEO and Secretary
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Scott Todd
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Director
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive share options at the discretion of our board of directors in the future. We do not have any material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that share options may be granted at the discretion of our board of directors.
Grants of Plan-Based Awards
The Company has yet to formally adopt an equity compensation plan. However, stock options were granted during the fiscal year ended December 31, 2021.
Option Exercises and Stock Vested
During our fiscal year ended December 31, 2021, there were no options exercised by our named officers.
Compensation of Directors
The Company has not compensated any Board members for their participation on the Board and does not have any standard or other arrangements for compensating them for such services. The Company may issue shares of common stock or options to acquire shares of the Company’s common stock to members of the Board in consideration for their services as members of the Board. The Company does expect to reimburse Directors for expenses incurred in connection with their attendance at meetings of the Board.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.
Indebtedness of Directors, Senior Officers, Executive Officers and Other Management
None of our directors or executive officers or any associate or affiliate of our company during the last two fiscal years, is or has been indebted to our company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.

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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, as of April 13, 2021, certain information with respect to the beneficial ownership of our common and preferred shares by each shareholder known by us to be the beneficial owner of more than 5% of our common and preferred shares, as well as by each of our current directors and executive officers as a group. Each person has sole voting and investment power with respect to the shares of common and preferred stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common and preferred stock, except as otherwise indicated.
Name
Number of
Common
Shares
Beneficially
Owned
Percentage
of Common
Class
Number of
Preferred
Shares
Beneficially
Owned
Percentage of
Preferred
Class
Christopher Giordano
5,152,859
(1)(2)
*
200,000
%
Paul Serbiak
550,000
*
*
Scott Todd
*
*
Officers & Directors as a group (3 persons)
5,702,859
*
200,000
%
Michael Rosenbaum
2,335,990
(3)
*
*
____________
* Represents less than 1%
(1) Christopher Giordano beneficially owns 200,000 shares of Class B Preferred Stock, which is 100% percent of the outstanding shares in the class. The Class B Preferred shareholders vote together with the common stock as a single class and the holders of Class B Preferred are entitled to 10,000 votes per share.
(2) Includes: (a) 3,005,715 shares of Common Stock held by Birchwood Capital Advisors, LLC, of which Christopher H. Giordano has voting and dispositive control, (b) 13,072 shares of Common Stock held by Bella Capital Holdings, (c) 16,572 shares of Common Stock held by Isabella Giordano, and (d) 67,500 shares on the Company’s books as due and issuable to Christopher H. Giordano as of December 31, 2016.
(3) Includes shares of Common Stock held by Maj-Britt Rosenbaum.
Changes in Control
We are unaware of any contract or other arrangement or provisions of our Articles or Bylaws the operation of which may at a subsequent date result in a change of control of our company. There are not any provisions in our Articles or Bylaws, the operation of which would delay, defer, or prevent a change in control of our company.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence
Except as disclosed herein, no director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since the year ended December 31, 2021, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year-end for the last three completed fiscal years.
Director Independence
We currently act with three directors, Christopher H. Giordano, Paul Serbiak and Scott Todd.
Currently our audit committee consists of our entire board of directors. We currently do not have nominating, compensation committees or committees performing similar functions. There has not been any defined policy or procedure requirements for shareholders to submit recommendations or nomination for directors.
From inception to present date, we believe that the members of our audit committee and the board of directors have been and are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accounting Fees and Services
The aggregate fees billed for the most recently completed fiscal year ended December 31, 2021 and for fiscal year ended December 31, 2020 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
Year Ended
December 31,
December 31,
Audit Fees
$ 35,000
$ 40,000
Audit Related Fees
Nil
Nil
Tax Fees
Nil
Nil
All Other Fees
Nil
Nil
Total
$ 35,000
$ 40,000
Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.
Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits, Financial Statement Schedules
(a)
Financial Statements
(1)
Financial statements for our company are listed in the index under Item 8 of this document.
(2)
All financial statement schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements or notes thereto.
(b)
Exhibits
Exhibit Number
Description
Incorporated by Reference
Form
Exhibit
Filing Date
(3)
(i) Articles of Incorporation (ii) Bylaws
3.1
Articles of Incorporation, as filed with the Nevada Secretary of State
SB-2
3.1
November 29, 2005
3.2
By-laws
SB-2
3.2
November 29, 2005
3.3
First Amended and Restated By-Laws of Premiere Publishing Group, Inc. dated December 14, 2007
8-K
3.1
December 12, 2007
3.4
By-Laws of Eco Tek 360, Inc. adopted February 14, 2017
8-K
February 22, 2017
(14)
Code of Ethics
14.1
Code of Ethics
10-KSB
14.1
April 14, 2008
(21)
Subsidiaries of Registrant
21.1
Trident Merchant Group, Inc., a Nevada corporation (wholly owned)
21.2
Progressive Fashions Inc., a Nevada corporation (wholly owned)
21.3
Leading Edge Fashion, LLC (majority owned)
21.4
Pure361, LLC (majority owned)
21.5
EcoTek 360, Inc. (majority owned)
(31)
Rule 13a-14 (d)/15d-14d) Certifications
31.1*
Section 302 Certification by the Principal Executive Officer
31.2*
Section 302 Certification by the Principal Financial Officer and Principal Accounting Officer
(32)
Section 1350 Certifications
32.1**
Section 906 Certification by the Principal Executive Officer
32.2**
Section 906 Certification by the Principal Financial Officer and Principal Accounting Officer
101**
Interactive Data File
101.INS
XBRL Instance Document
101.SCH
XBRL Taxonomy Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
______
* Filed herewith.
** Furnished herewith