EDGAR 10-K Filing

Company CIK: 1385329
Filing Year: 2021
Filename: 1385329_10-K_2021_0001477932-21-004545.json

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ITEM 1. BUSINESS
ITEM 1. DESCRIPTION OF BUSINESS
Overview
The address of our principal executive office is located at 1440 NW 1st Court, Boca Raton, FL 33432. Our telephone number is (561) 757-3585. Our company was incorporated in the State of Nevada on December 5, 2003 under the name Computer Maid, Inc. Our company was inactive until February 2006, when we changed our name to Rose Explorations Inc. and became engaged in the exploration of mining properties.
On March 4, 2008, our company completed a merger with our wholly-owned subsidiary, Silverstar Mining, Inc. and simultaneously changed its name to Silverstar Mining, Inc.
On March 4, 2008, we affected a 3 for 1 forward stock split of our authorized, issued and outstanding common stock. As a result, our authorized capital increased from 75,000,000 shares of common stock with a par value of $0.001 to 225,000,000 shares of common stock with a par value of $0.001.
On April 13, 2011, we incorporated a wholly owned subsidiary, Silverstar Mining (Canada) Inc., under the federal laws of Canada. The subsidiary’s main purpose is to hold title to mineral property rights situated in Canada as the laws of that country require that only local entities can hold title to mineral property rights situated within its borders.
Effective September 26, 2011, we affected a reverse split our common stock on a 1,000 for 1 basis. As a result of the foregoing, we reduced the number of authorized shares of our common stock from 225,000,000 to 225,000.
On February 29, 2012, we filed a Certificate of Amendment to our company’s Articles of Incorporation with the Nevada Secretary of State increasing the number of authorized shares from 225,000 to 225,000,000 shares of common stock $0.001 par value.
On July 22, 2013 we entered into settlement agreements with four debt holders of our company pursuant to which we restructured outstanding demand loans payable in the aggregate amount of $175,028 (inclusive of accrued interest) as convertible debentures.
On February 15, 2013, we closed a Share Exchange Agreement pursuant to which we intended to acquire a wholly owned subsidiary, Arriba Resources Inc. However, effective November 13, 2013 our Board of Directors approved the cancellation and reversal of the Share Exchange Agreement due to a failure of consideration on the part of the seller. As a result of the cancellation and reversal of the Share Exchange Agreement, 2,139,926 shares of our common stock and warrants to acquire 2,078,477 shares of our common stock which were previously authorized (but not issued from treasury) have been cancelled with immediate effect. Consequently, the change of control announced in our report on Form 8-K filed on May 21, 2013 has been reversed.
On January 23, 2015 the board of directors with the consent of a majority of its shareholders approved amended articles of incorporation to include a change of name to Silverstar Resources, Inc. and a reverse split of its common stock resulting in shareholders receiving one share for every five shares (5 to 1) they hold as of record of that date. In addition, the amendment set the authorized shares of common stock at 220,000,000 and preferred stock at 5,000,000 shares both at a par value of $0.001.
On March 10, 2015 the Company formed 1030029 Ltd, an Alberta numbered company as a wholly owned subsidiary to meet the requirements of holding working interest of Alberta producing oil and gas properties
On June 23, 2016, the Company’s Board of Directors approved of a change of name from Silverstar Resources, Inc. to Creative Waste Solutions, Inc.
Current Operational Activities
Waste Management
The Company through its subsidiaries provides waste management environmental services to residential, commercial, industrial, and municipal customers in the geographical region of the South East.
The company’s subsidiaries are involved in the brokerage business and operate a waste transfer station. The company’s expansion has taken place by the following membership and asset purchases:
On April 7, 2016, the Company entered into a membership purchase agreement with Creative Waste Solutions, LLC, a Florida limited liability corporation (“Creative”) whereby the Company purchased 100% of the membership interest for $25,000.
On May 22, 2016, the Company entered into a stock purchase agreement with Florida based, Integrated Waste Transportation Services, Inc. (“Integrated”). Pursuant to the agreement, the Company acquired 100% of the outstanding equity of Integrated in exchange for $300,000 and 50,000 Shares of common stock of the Company (see Note 11).
On August 26, 2016, the Company purchased certain assets of Florida based Easy Disposal, Inc., for an aggregate amount of $380,000 which includes 50,000 shares of common stock of the Company, valued at $2.00 per share and the remainder in cash. The Company paid for this acquisition by issuing unsecured notes payable in the aggregate amount of $300,000 that bear interest at 10% per annum and are payable upon demand.
Brokerage Division:
Our brokerage divisions consist of Creative Waste Solutions, LLC and Integrated Waste Transportation Services. Both entities own nominal assets and their accounting has only been consolidated since their respective dates of acquisitions of April 7, 2016 and May 22, 2016. Creative Waste Solutions, LLC does not maintain any long term contracts and all revenues are generated through “phone in” orders. Fees are charged based on availability of subcontractors, dumpsters, volume and frequency of pick up. The Company maintains a long term contract with a large local Waste Management company and acts as subcontractor for small local waste Management needs.
In connection with the acquisitions of Creative and Integrated on April 7, 2016 and May 22, 2016, respectively, the Company acquired customer lists valued at $25,000 and $350,000, respectively. The customer lists are being amortized over 24 months. Amortization expense for the twelve months ended September 30, 2018 was $122,917 . As of September 30, 2018 the customer lists have been fully amortized.
Waste Stations:
We accept various waste at our Hollywood Florida location. Waste is delivered by small local haulers consolidated and compacted to reduce the volume and increase the density of the waste and transported by transfer trucks disposal sites.
Access to transfer stations is critical to haulers who collect waste in areas not in close proximity to disposal facilities. Fees charged to third parties at transfer stations are usually based on the type and volume or weight of the waste deposited at the transfer station, the distance to the disposal site, market rates for disposal costs and other general market factors.
We do not own the physical site, but we operate under a long term lease on the property. We do own the permits and necessary documentation and responsible for any regulatory requirements relating to the operation and closure of the transfer station.
Land Fill Operations.
Currently, we do not own or operate any land fill operations. All waste accepted by our Waste Station and through our brokerage house is transported to legal entities that operate disposal sites.
Mineral Exploration
On April 14, 2015 the Company acquired the working interest of two producing oil and gas properties in Alberta Canada for US $80,000.
The Company has determined that the asset does not fit the future plans of the Company. Under the guidelines of Financial Accounting Standards Board (FASB), ASC (Accounting Standards Codification) 360 Newly Acquired Asset Classified as Held for Sale, the Company is actively seeking to dispose of the asset through a sale. During the year ended September 30, 2015, the Company determined that this asset had become impaired and took a charge to earnings of $80,000 which was reflected in discontinued operations.
Concurrently with the disposition of our two producing oil and gas properties, the Company is not involved in the oil and natural gas development arenas.
For the balance or our discussion, the Company will focus on its current waste management business.
Competition
Within our Waste Management subsidiaries, we encounter intense competition from governmental, quasi-governmental and private sources in all aspects of our operations. In our geographical region, the industry consists primarily of two national waste management companies and regional and local companies of varying sizes and financial resources, including companies that specialize in certain discrete areas of waste management, operators of alternative disposal facilities and companies that seek to use parts of the waste stream as feedstock for renewable energy and other by-products. Some of our regional competitors can be significant competitors in local markets and are pursuing aggressive regional growth strategies. We compete with these companies as well as with counties and municipalities that maintain their own waste collection and disposal operations.
Operating costs, disposal costs and collection fees vary widely throughout the areas in which we operate. The prices that we charge are determined locally, and typically vary by volume and weight, type of waste collected, treatment requirements, risk of handling or disposal, frequency of collections, distance to final disposal sites, labor costs and amount and type of equipment furnished to the customer. We face intense competition in our brokerage business based on pricing and quality of service. We have also begun competing for business based on breadth of service offerings. As companies, individuals and communities look for ways to be more sustainable, we are promoting our comprehensive services that go beyond our core business of collecting and disposing of waste.
Seasonal Trends
Our operating revenues tend to be somewhat higher in summer months, primarily due to the higher volume of construction and demolition waste. The volumes of industrial and residential waste in certain regions where we operate also tend to increase during the summer months. Our second and third quarter revenues and results of operations typically reflect these seasonal trends.
Service disruptions caused by severe storms, extended periods of inclement weather or climate extremes can significantly affect the operating results of the affected Areas. On the other hand, certain destructive weather conditions that tend to occur during the second half of the year, such as the hurricanes that most often impact our operations in the Southern and Eastern U.S., can actually increase our revenues in the areas affected. While weather-related and other “one-time” occurrences can boost revenues through additional work for a limited time, as a result of significant start-up costs and other factors, such revenue can generate earnings at comparatively lower margins.
Employees
As of September 30, 2019, we had no full-time employees, and approximately 2-part time independent contractors who are employed primarily within accounting, bookkeeping and administration.
Financial Assurance and Insurance Obligations
Municipal and governmental waste service contracts generally require contracting parties to demonstrate financial responsibility for their obligations under the contract. Financial assurance is also a requirement for obtaining or retaining disposal site or transfer station operating permits;
We establish financial assurance using surety bonds. The type of assurance used is based on several factors, most importantly: the jurisdiction, contractual requirements, market factors and availability of credit capacity.
Surety bonds and insurance policies are supported by (i) a diverse group of third-party surety and insurance companies; (ii) an entity in which we have a noncontrolling financial interest or (iii) wholly-owned insurance subsidiary.
Insurance
We carry minimal insurance coverages, including general liability, automobile liability, real and personal property, workers’ compensation, directors’ and officers’ liability, pollution legal liability, and business interruption. However, all our subcontractors are required to carry such insurances.
We do not carry any Directors’ and Officers’ Liability Insurance policy.
Regulations
Our business is subject to extensive and evolving federal, state or provincial and local environmental, health, safety and transportation laws and regulations. These laws and regulations are administered by the U.S. Environmental Protection Agency (“EPA”), and various other federal, state, provincial and local environmental, zoning, transportation, land use, health and safety agencies. Local agencies regularly examine our operations to monitor compliance with these laws and regulations and have the power to enforce compliance, obtain injunctions or impose civil or criminal penalties in case of violations. In recent years, we have perceived an increase in both the amount of government regulation and the number of enforcement actions being brought by regulatory entities against operations in the waste services industry. We expect this heightened governmental focus on regulation and enforcement to continue.
Because the primary mission of our business is to collect and manage solid waste in an environmentally sound manner, a significant amount of our capital expenditures are related, either directly or indirectly, to environmental protection measures, including compliance with federal, state or provincial and local rules. There are costs associated with siting, design, permitting, operations, monitoring, site maintenance, corrective actions, financial assurance, and facility closure and post-closure obligations. In connection with our acquisition, development or expansion of a waste management or disposal facility or transfer station, we must often spend considerable time, effort and money to obtain or maintain required permits and approvals. There are no assurances that we will be able to obtain or maintain required governmental approvals. Once obtained, operating permits are subject to renewal, modification, suspension or revocation by the issuing agency. Compliance with current regulations and future requirements could require us to make significant capital and operating expenditures. However, most of these expenditures are made in the normal course of business and do not place us at any competitive disadvantage.
Financial Assurance and Insurance Obligations
Financial Assurance
Municipal and governmental waste service contracts generally require contracting parties to demonstrate financial responsibility for their obligations under the contract. Financial assurance is also a requirement for (i) obtaining or retaining disposal site or transfer station operating permits; (ii) supporting variable-rate tax-exempt debt and (iii) estimated final capping, closure, post-closure and environmental remedial obligations at many of our landfills. We establish financial assurance using surety bonds, letters of credit, insurance policies, trust and escrow agreements and financial guarantees. The type of assurance used is based on several factors, most importantly: the jurisdiction, contractual requirements, market factors and availability of credit capacity.
Insurance
We carry a broad range of insurance coverages, including general liability, automobile liability, real and personal property, workers’ compensation, directors’ and officers’ liability, pollution legal liability, business interruption and other coverages we believe are customary to the industry. Our exposure to loss for insurance
Intellectual Property
We currently do not hold any intellectual property and our website is www.usacws.com

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ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS
There are numerous and varied risks, known and unknown, that may prevent us from achieving our goals. If any of these risks actually occur, our business, financial condition or results of operations may be materially adversely affected. In such case, the trading price of our common stock could decline and shareholders could lose all or part of their investment.
Risks Related to our Business Operations
We have not generated sufficient revenues from operations to cover our operating expenses. We have a history of losses and losses are likely to continue in the future.
We have incurred significant losses in the past and we will likely continue to incur losses in the future unless our Waste Management assets prove successful. Even if our brokerage and transfer station businesses are successful, there can be no assurance that we will be able to commercially exploit these resources, generate further revenues or generate sufficient revenues to operate profitably.
The waste industry is highly competitive, and if we cannot successfully compete in the marketplace, our business, financial condition and operating results may be materially adversely affected.
We encounter intense competition from governmental, quasi-governmental and private sources in all aspects of our operations. In North America, the industry consists primarily of two national waste management companies and regional and local companies of varying sizes and financial resources, including companies that specialize in certain discrete areas of waste management, operators of alternative disposal facilities and companies that seek to use parts of the waste stream as feedstock for renewable energy and other by-products. We compete with these companies as well as with counties and municipalities that maintain their own waste collection and disposal operations. These counties and municipalities may have financial competitive advantages because tax revenues are available to them and tax-exempt financing is more readily available to them. Also, such governmental units may attempt to impose flow control or other restrictions that would give them a competitive advantage. In addition, some of our competitors may have lower financial expectations, allowing them to reduce their prices to expand sales volume or to win competitively-bid contracts, including large national accounts and exclusive franchise arrangements with municipalities. When this happens, we may lose customers and be unable to execute our pricing strategy, resulting in a negative impact to our revenue growth from yield on base business.
Compliance with existing or future regulations and/or enforcement of such regulations may restrict or change our operations, increase our operating costs or require us to make additional capital expenditures.
Stringent government regulations at the federal, state, provincial, and local level in the United States and Canada have a substantial impact on our business, and compliance with such regulations is costly. A large number of complex laws, rules, orders and interpretations govern environmental protection, health, safety, land use, zoning, transportation and related matters. In recent years, we have perceived an increase in both the amount of government regulation and the number of enforcement actions being brought by regulatory entities against operations in the waste services industry. We expect this heightened governmental focus on regulation and enforcement to continue. Among other things, governmental regulations and enforcement actions may restrict our operations and adversely affect our financial condition, results of operations and cash flows by imposing conditions such as:
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limitations, regulations or levies on collection and disposal prices, rates and volumes;
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limitations or bans on disposal or transportation of out-of-state waste or certain categories of waste;
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mandates regarding the management of solid waste, including requirements to recycle, divert or otherwise process certain waste, recycling and other streams; or
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limitations or restrictions on the recycling, processing or transformation of waste, recycling and other streams.
Regulations affecting the siting, design and closure of landfills could require us to undertake investigatory or remedial activities, curtail operations or close landfills temporarily or permanently. Future changes in these regulations may require us to modify, supplement or replace equipment or facilities. The costs of complying with these regulations could be substantial.
We also have significant financial obligations relating to final capping, closure, post-closure and environmental remediation at our existing landfills. We establish accruals for these estimated costs as necessary, but we could underestimate such accruals. Environmental regulatory changes could accelerate or increase capping, closure, post-closure and remediation costs, requiring our expenditures to materially exceed our current accruals and new regulations increase our operating costs in the future, and we are not able to recapture those costs from our customers, such regulations could have a material adverse effect on our results of operations.
Our business depends on our reputation and the value of our brand.
We believe we are developing a reputation for high-quality service, reliability and social and environmental responsibility, and we believe our brand symbolizes these attributes. Adverse publicity, whether or not justified, relating to activities by our operations, employees or agents could tarnish our reputation and reduce the value of our brand. Damage to our reputation and loss of brand equity could reduce demand for our services. This reduction in demand, together with the dedication of time and expense necessary to defend our reputation, could have an adverse effect on our financial condition, liquidity and results of operations, as well as require additional resources to rebuild our reputation and restore the value of our brand.
General economic conditions can directly and adversely affect our revenues and our income from operations margins.
Our business is directly affected by changes in national and general economic factors that are outside of our control, including consumer confidence, interest rates and access to capital markets. A weak economy generally results in decreased consumer spending and decreases in volumes of waste generated, which decreases our revenues. A weak market for consumer goods can significantly decrease demand by paper mills for recycled corrugated cardboard used in packaging; such decrease in demand can negatively impact commodity prices and our operating income and cash flows. In addition, we have a relatively high fixed-cost structure, which is difficult to quickly adjust to match shifting volume levels. Consumer uncertainty and the loss of consumer confidence may limit the number or amount of services requested by customers. Economic conditions may also limit our ability to implement our pricing strategy. For example, many of our contracts have price adjustment provisions that are tied to an index such as the Consumer Price Index, and our costs may increase in excess of the increase, if any, in the Consumer Price Index.
Our business is subject to operational and safety risks, including the risk of personal injury to employees and others.
Providing environmental and waste management services, including constructing and operating transfer stations, involves risks such as accidents, equipment defects, malfunctions and failures. Any of these risks could potentially result in injury or death of employees and others, a need to shut down or reduce operation of facilities, increased operating expense and exposure to liability for pollution and other environmental damage, and property damage or destruction.
While we seek to minimize our exposure to such risks through comprehensive training, compliance and response, if we were to incur substantial liabilities in excess of any applicable insurance, our business, results of operations and financial condition could be adversely affected. Any such incidents could also tarnish our reputation and reduce the value of our brand. Additionally, a major operational failure, even if suffered by a competitor, may bring enhanced scrutiny and regulation of our industry, with a corresponding increase in operating expense.
We have substantial financial assurance and insurance requirements, and increases in the costs of obtaining adequate financial assurance, or the inadequacy of our insurance coverages, could negatively impact our liquidity and increase our liabilities.
The amount of insurance we are required to maintain for environmental liability is governed by statutory requirements. We believe that the cost for such insurance is high relative to the coverage it would provide and, therefore, our coverages are generally maintained at the minimum statutorily-required levels. We face the risk of incurring additional costs for environmental damage if our insurance coverage is ultimately inadequate to cover those damages. The inability of our insurers to meet their commitments in a timely manner and the effect of significant claims or litigation against insurance companies may subject us to additional risks. To the extent our insurers are unable to meet their obligations, or our own obligations for claims are more than we estimated, there could be a material adverse effect to our financial results.
We may record material charges against our earnings due to impairments to our assets.
In accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), we capitalize certain expenditures and advances relating to disposal site development, expansion projects, acquisitions, software development costs and other projects. Events that could, in some circumstances, lead to an impairment include, but are not limited to, shutting down a facility or operation or abandoning a development project or the denial of an expansion permit. Additionally, declining waste volumes and development of, and customer preference for, alternatives to traditional waste disposal could warrant asset impairments. If we determine an asset or expansion project is impaired, we will charge against earnings any unamortized capitalized expenditures and advances relating to such asset or project reduced by any portion of the capitalized costs that we estimate will be recoverable, through sale or otherwise. We also carry a significant amount of goodwill on our Consolidated Balance Sheet, which is required to be assessed for impairment annually, and more frequently in the case of certain triggering events. We may be required to incur charges against earnings if such impairment tests indicate that the fair value of a reporting unit is below its carrying value. Any such charges could have a material adverse effect on our results of operations.
Our capital requirements and our business strategy could increase our expenses, cause us to change our growth and development plans, or result in an inability to maintain our desired credit profile.
If economic conditions or other risks and uncertainties cause a significant reduction in our cash flows from operations, we may reduce or suspend capital expenditures, growth and acquisition activity, implementation of our business strategy, dividend declarations or share repurchases. We may choose to incur indebtedness to pay for these activities, although our access to capital markets is not assured and we may not be able to incur indebtedness at a cost that is consistent with current borrowing rates. Further, our ability to execute our financial strategy and our ability to incur indebtedness is somewhat dependent upon our ability to maintain investment grade ratings on our senior debt. The credit rating process is contingent upon our credit profile, as well as a number of other factors, many of which are beyond our control, including methodologies established and interpreted by third party rating agencies. If we were unable to maintain our investment grade credit ratings in the future, our interest expense would increase and our ability to obtain financing on favorable terms could be adversely affected.
The adoption of climate change legislation or regulations restricting emissions of “greenhouse gases” could increase our costs to operate.
Our landfill operations emit methane, identified as a GHG. There are a number of legislative and regulatory efforts at the state, regional and federal levels to curtail the emission of GHGs to ameliorate the effect of climate change. Should comprehensive federal climate change legislation be enacted, we expect it could impose costs on our operations that might not be offset by the revenue increases associated with our lower-carbon service options, the materiality of which we cannot predict. In 2010, the EPA published a Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule, which expanded the EPA’s federal air permitting authority to include the six GHGs. The rule sets new thresholds for GHG emissions that define when Clean Air Act permits are required. The current requirements of these rules have not significantly affected our operations or cash flows, due to the tailored thresholds and exclusions of certain emissions from regulation. However, if certain changes to these regulations were enacted, such as lowering the thresholds or the inclusion of biogenic emissions, then the amendments could have an adverse effect on our operating costs.
The seasonal nature of our business, severe weather events and “one-time” special projects cause our results to fluctuate, and prior performance is not necessarily indicative of our future results.
Our operating revenues tend to be somewhat higher in summer months, primarily due to the higher volume of construction and demolition waste. The volumes of industrial and residential waste in certain regions where we operate also tend to increase during the summer months. Our second and third quarter revenues and results of operations typically reflect these seasonal trends.
Service disruptions caused by severe storms, extended periods of inclement weather or climate extremes resulting from climate change can significantly affect the operating results of the affected Areas. On the other hand, certain destructive weather conditions that tend to occur during the second half of the year, such as the hurricanes that most often impact our operations in the Southern and Eastern U.S., can actually increase our revenues in the areas affected. While weather-related and other “one-time” occurrences can boost revenues through additional work for a limited time, as a result of significant start-up costs and other factors, such revenue can generate earnings at comparatively lower margins.
For these and other reasons, operating results in any interim period are not necessarily indicative of operating results for an entire year, and operating results for any historical period are not necessarily indicative of operating results for a future period. Our stock price may be negatively impacted by interim variations in our results.
We may experience adverse impacts on our reported results of operations as a result of adopting new accounting standards or interpretations.
Our implementation of and compliance with changes in accounting rules, including new accounting rules and interpretations, could adversely affect our reported financial position or operating results or cause unanticipated fluctuations in our reported operating results in future periods.
Our officers do not have employment agreements with us and could cease working for us at any time, causing us to cease our operations.
Our officers do not have employment agreements (written or verbal) with us. In the absence of such employment agreements with restrictive covenants on the part of our officers, our officers could leave us at any time or commence working for a competitive business. Furthermore, applicable law under which we operate may cast substantial doubt on the enforceability of any restrictive covenants that we may obtain from our officers in the future. Accordingly, the continued services of our officers cannot be assured. If our officers were to cease working for us, we may have to cease operations.
Risks Related to Our Common Stock
Trading on the OTC Bulletin Board may be volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares.
Our common stock was quoted on the OTC Bulletin Board service of the Financial Industry Regulatory Authority prior to its delisting on June 8, 2021 due to our delinquency in the filing of periodic reports with the SEC. Trading in stock quoted on the OTC Bulletin Board is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the OTC Bulletin Board is not a stock exchange, and trading of securities on the OTC Bulletin Board is often more sporadic than the trading of securities listed on a quotation system like NASDAQ or a stock exchange like Amex.
The Financial Industry Regulatory Authority sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.
In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority, which we refer to as FINRA, has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for shares of our common stock.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNSOLVED STAFF COMMENTS
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Additional Information
We are a public company and are required to file annual, quarterly and special reports and other information with
the SEC. We currently are delinquent in our required filings. We are not required to, and do not intend to, deliver an annual report to security holders. You may read and copy any document we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of these documents by writing to the SEC and paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the public reference room. Our filings are also available, at no charge, to the public at http://www.sec.gov.

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ITEM 2. PROPERTIES
ITEM 2. DESCRIPTION OF PROPERTY
Our executive offices are located at 1440 NW 1st Court, Boca Raton FL 33432 and are rented for $2,330 per month on a month-to-month basis. Our transfer station is located at 5691 Plunket Street, Hollywood Florida. The site was rented for $4,650 per month plus sales tax through January 31, 2017 and for $4,850 per month plus sales tax for the one-year period ending January 31, 2018. On that site, we have a lease that is valid until January 31, 2018 and then have a (5) Five-year option to renew with a base rent of $6,000, plus sales tax, which was exercised. Base rent shall increase 4% each year of option period.

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS
We are not a party to any material legal proceedings nor are we aware of any circumstance that may reasonably lead any third party to initiate material legal proceedings against us.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURES
None
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES
Our shares of common stock were trading on the Over the Counter (OTC) Market under the Symbol “CWSS”, however, due to the delinquency of financial reports required to be filed with the SEC, our common shares no longer trade on the OTC Market.
Trading History
Our common stock is no longer quoted on the OTC Market due to the delinquency referred to in the previous paragraph. Our common stock is traded on The Expert Market which is a private market to serve broker-dealer pricing and best execution needs in securities that are restricted from public quoting or trading, as ours is.
Bid Information*
Financial Quarter Ended
High Bid
Low Bid
30-Sep-19
$ 0.14
0.03
30-Jun-19
$ 0.05
0.02
31-Mar-19
$ 0.05
0.01
31-Dec-18
$ 0.10
0.01
30-Sep-18
$ 0.14
0.05
30-Jun-18
$ 0.18
0.07
31-Mar-18
$ 0.84
0.10
31-Dec-17
$ 3.00
0.85
30-Sep-17
$ 3.25
3.00
* The quotations do not reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
Holders
As of June 8, 2021, there were approximately 174 holders of record of our common stock. As of such date, 6,025,974 common shares were issued and outstanding.
Our transfer agent is Transfer On Line, Inc. Their mailing address is 512 SE Salmon Street, Portland, OR, 97214 and their telephone number is (503)-227-2950.
Equity Compensation Plans
We do not have in effect any compensation plans under which our equity securities are authorized for issuance and we do not have any outstanding stock options.
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 September 30, 2019.
Dividends
We have never declared or paid any cash dividends on our common stock. For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock. Any future determination to pay dividends will be at the discretion of the Board of Directors and will be dependent upon then existing conditions, including our financial condition and results of operations, capital requirements, contractual restrictions, business prospects and other factors that the Board of Directors considers relevant.
There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:
·
we would not be able to pay our debts as they become due in the usual course of business; or
·
our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution, unless otherwise permitted under our articles of incorporation.
Securities Authorized for Issuance under Equity Compensation Plans
None

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
Not required.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and other financial information included in this Form 10-K.
Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange rate; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.
Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.
Overview
The address of our principal executive office is located at 1440 NW 1st Court, Boca Raton FL 33432. Our telephone number is (561)-943-5970. Our company was incorporated in the State of Nevada on December 5, 2003 under the name Computer Maid, Inc. Our company was inactive until February 2006, when we changed our name to Rose Explorations Inc. and became engaged in the exploration of mining properties.
On March 4, 2008, our company completed a merger with our wholly-owned subsidiary, SilverStar Resources, Inc., which was incorporated solely to effect the name change of our company to Silverstar Resources, Inc.
On March 4, 2008, we affected a 3 for 1 forward stock split of our authorized, issued and outstanding common stock. As a result, our authorized capital increased from 75,000,000 shares of common stock with a par value of $0.001 to 225,000,000 shares of common stock with a par value of $0.001.
On April 13, 2011, we incorporated a wholly owned subsidiary, Silverstar Mining (Canada) Inc., under the federal laws of Canada. The subsidiary’s main purpose is to hold title to mineral property rights situated in Canada as the laws of that country require that only local entities can hold title to mineral property rights situated within its borders.
Effective September 26, 2011, we affected a reverse split our common stock on a 1,000 for 1 basis. As a result of the foregoing, we reduced the number of authorized shares of our common stock from 225,000,000 to 225,000.
On February 29, 2012, we filed a Certificate of Amendment to our company’s Articles of Incorporation with the Nevada Secretary of State increasing the number of authorized shares from 225,000 to 225,000,000 shares of common stock $0.001 par value.
On July 22, 2013 we entered into settlement agreements with four debt holders of our company pursuant to which we restructured outstanding demand loans payable in the aggregate amount of $175,028 (inclusive of accrued interest) as convertible debentures.
On February 15, 2013, we closed a Share Exchange Agreement pursuant to which we intended to acquire a wholly owned subsidiary, Arriba Resources Inc. However, effective November 13, 2013 our Board of Directors approved the cancellation and reversal of the Share Exchange Agreement due to a failure of consideration on the part of the seller. As a result of the cancellation and reversal of the Share Exchange Agreement, 2,139,926 shares of our common stock and warrants to acquire 2,078,477 shares of our common stock which were previously authorized (but not issued from treasury) have been cancelled with immediate effect. Consequently, the change of control announced in our current report on Form 8-K filed on May 21, 2013 has been reversed.
As a result of the cancellation and reversal of the Share Exchange Agreement with Arriba, the consolidated financial statements of our Company for the quarterly periods ended March 31, 2013 (filed with the SEC on August 14, 2013) and June 30, 2013 (filed with the SEC on May 20, 2013) may no longer be relied upon owing to their inclusion of the financial information of Arriba. We informed our independent accountants of the cancellation and reversal of the Share Exchange Agreement and intend to file amendments to our Quarterly Reports on Form 10-Q for the periods ended March 31 and June 30, 2013 to reflect our financial condition without consolidation of the financial information of Arriba. The financial statements contained in this current report accurately reflect the deconsolidation of the financial information of Arriba.
On January 23, 2015 the board of directors with the consent of a majority of its shareholders approved amended articles of incorporation to include a change of name to Silverstar Resources, Inc. and a reverse split of its common stock resulting in shareholders receiving one share for every five shares (5 to 1) they hold as of record of that date. In addition, the amendment set the authorized shares of common stock at 220,000,000 and preferred stock at 5,000,000 shares both at a par value of $0.001.
On March 10, 2015 the Company formed 1030029 Ltd, an Alberta numbered company as a wholly owned subsidiary to meet the requirements of holding working interest of Alberta producing oil and gas properties
On June 23, 2016 the company’s board changed its name to Creative Waste Solutions, Inc., to address its business focus.
Results of Operations
OVERVIEW
The following discussion should be read in conjunction with our audited consolidated financial statements and the related notes for the years ended September 30, 2019 and 2018 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 include, but are not limited to those discussed below and elsewhere in this annual report, particularly in the section entitled “Risk Factors” beginning on page 8 of this annual report.
Our consolidated financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Results of Operations
The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the year ended September 30, 2019, which are included herein.
Expenses
Operating expenses for the year ended September 30, 2019 were $223,909, representing a decrease of $166,660 from the $390,569 in expenses incurred during fiscal 2018. The decrease was primarily a result of a decrease in our business operations due to the phase-out of services to our largest customer.
Revenue, Net Income and Loss
We had $271,355 in revenues for the year ended September 30, 2019 and $598,348 in revenues for the year ended September 30, 2018. The decrease of $326,993 in revenues was primarily due to the phased-out of the services we provided to our largest customer. Our gross profit in fiscal 2019 was $62,781 versus $241,092 in fiscal 2018, the decrease of $178,311 is primarily attributable to the fact that we phased-out providing services to our largest volume customer.
For the year ended September 30, 2019 we had a net loss of $190,310 compared to a net income of $2,408,986 during the year ended September 30, 2018. The $2,599,296 decrease in net income was primarily due to a derivative gain in fiscal 2018 of $2,612,064 whereas in fiscal 2019 we had a derivative income of $18,972. The large increase in the derivative liability gain in fiscal 2018 was primarily due to a significant decrease in our stock price.
Our loss from operations was $161,128 in fiscal 2019 versus $149,477 in fiscal 2018. The increase of $11,651 was primarily due to the decrease in gross profit of $178,311 and the decrease in operating expenses of $166,660 as explained in the previous paragraphs.
Our operations to date have been financed by the sale of our common stock and third party loans. Our largest operating expenses that affect cash are rent, professional fees, and independent contractor services. The majority of our professional fees consist of auditing expenses incurred in connection with our regulatory filings with the SEC.
We are attempting to generate additional revenues and improve our gross profit, however, revenues that we generate may not be sufficient to cover our operating expenses. If we do not succeed in raising additional capital, we may have to cease operations and you may lose your entire investment.
Liquidity and Capital Resources
At September 30, 2019 we had cash of $393 and no accounts receivable as compared to $3,132 in cash and accounts receivable of $8,914 at September 30, 2018. The decrease in cash of $2,739 is due to cash used in operating activities of $161,314 and cash used in investing activities of $50,000 offset by cash provided by financing activities of $208,575. The decrease in accounts receivable of $8,914 is due to the Company not providing terms to in customers in fiscal 2019 due to lack of cash flow. Our accounts payable and accrued expenses at September 30, 2019 were $176,564 and $196,566 as of September 30, 2018, the decrease of $20,002 is due to a decrease in accounts payable of $46,512 due to a reduction in operations activity as a result of the loss of a major customer and the facilities plant being closed the last three weeks in September 2019 offset by an increase in accrued interest payable of $7,099 due to more convertible debt outstanding and an increase in accrued liabilities of $17,611 primarily due to delinquent rent. On September 30, 2019 and 2018 we had $554,396 and $241,896 of convertible debentures and notes payable to related parties, respectively, and advances from related parties of $97,621 and $80,046, respectively. The increase in related party notes payable of $312,500 is due to the acquisition of notes payable by two of the Company’s shareholders from note holders that were not related parties. The increase in advances from related parties of $17,575 is primarily due to an advance of $15,100 from one shareholder. As of September 30, 2019 and 2018 we had a derivative liability of $210,336 and $72,082, respectively. The increase in derivative liability of $138,254 is attributable to the issuance of four convertible debentures in fiscal 2019 that contained embedded derivatives. We had notes payable and convertible debentures to unrelated parties of $158,830 at September 30, 2019 and $396,500 at September 30, 2018. The decrease in notes payable and convertible debentures to unrelated parties of $237,670 is due to $312,500 of notes payable that were acquired by shareholders from unrelated parties offset by an increase in convertible debentures, net of debt discount, of $74,830. Our total liabilities were $1,198,747 on September 30, 2019 as compared to $987,090 as at September 30, 2018. The details of the decrease in total liabilities of $211,657 is disclosed in the preceding sentences. We had a working capital deficit of $1,197,354 as of September 30, 2019 as compared to our working capital deficit of $975,044 as of September 30, 2018. The increase in working capital deficit of $222,310 is primarily due to a loss from operations of $162,129, accrued interest expense of $48,154, $50,000 of funds used on a real estate deposit, offset by $59,056 of depreciation and amortization expense which is included in the loss from operations. However, excluding the non-cash derivative liability, our September 30, 2019 and 2018 working capital deficits were $987,018 and $902,962, respectively.
Working Capital
Our total current assets as of September 30, 2019 consisted of cash of $393 as compared to total current assets of $12,046 as of September 30, 2018. The decrease in current assets was primarily due to accounts receivable decreasing due to the phase-out of the services we provided to our largest customer in fiscal 2019.
Our total current liabilities as of September 30, 2019 were $1,197,747 as compared to total current liabilities of $987,090 as of September 30, 2018. The increase in current liabilities was primarily attributed to an increase in convertible debentures of $74,830 and an increase in derivative liability of $138,254 resulting from the issuance of new convertible debt in fiscal 2019.
Cash Flows
Operating Activities
Cash used by operating activities was $161,314 for the fiscal year ended September 30, 2019 compared to cash provided by operating activities of $352 for the fiscal year ended September 30, 2018. The decrease of $161,666 in cash provided by operating activities was primarily due to an increase in loss from operations of $14,300, a decrease in depreciation and amortization expense of $81,861 and in the comparative changes in operating assets and liabilities as follows: accounts receivable and deposit decrease of $75,802, and accounts payable and accrued expenses decrease of $2,201.
Investing Activities
Cash used in investing activities was $50,000 for the fiscal year ended September 30, 2019 compared to cash used in investing activities of $2,200 for the fiscal year ended September 30, 2018, an increase of $47,800. The increase was due to a $50,000 property deposit made in fiscal 2019 while in fiscal 2018 our only investing activity was the purchase of $2,200 of fixed assets.
Financing Activities
Net cash provided by financing activities for the fiscal year ended September 30, 2019 was $208,575 compared to $3,500 in the year ended September 30, 2018. The increase of $205,075 was primarily due to notes payable proceeds in fiscal 2019 of $196,000 less a $5,000 note payment, whereas there were no issuances of notes payable in fiscal 2018, and advances from related parties of $15,575 versus $3,500 of a related party advance in fiscal 2018.
Income & Operation Taxes
We are subject to income taxes in the U.S.
We paid no income taxes in USA for the fiscal year end ended September 30, 2019 due to the net operating loss carryforwards that are available to us in the USA.
Cash Requirements
For the twelve months ended September 30, 2020 we required additional funds of approximately $176,000 to fund our budgeted expenses as follows: Rent $110,000, office administration and other $27,000, contract labor $12,000, accounting and bookkeeping $10,000, management fees $6,000, auditor and professional fees $6,000, and repairs and maintenance $5,000. These funds were primarily raised from advances received from a shareholder and an entity owned by said shareholder. There is still no assurance that we will be able to maintain operations at a level sufficient for investors to obtain returns on their investments in our common stock. Further, we may continue to be unprofitable.
Off-Balance Sheet Arrangements
We currently have no off-balance sheet arrangements.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. FINANCIAL STATEMENTS
CREATIVE WASTE SOLUTIONS, INC. & SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2019 AND 2018
Contents
Page
Financial Statements:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of September 30, 2019 and 2018
Consolidated Statements of Operations for the years ended September 30, 2019 and 2018
Consolidated Statement of Stockholders’ Deficit for the years ended September 30, 2019 and 2018
Consolidated Statements of Cash Flows for the years ended September 30, 2019 and 2018
Notes to Consolidated Financial Statements
27-36
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Creative Waste Solutions, Inc. and Subsidiaries
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheet of Creative Waste Solutions Inc. (the Company) as of September 30, 2019, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year ended September 30, 2019, and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2019, and the results of its operations and its cash flows for the year ended September 30, 2019, in conformity with accounting principles generally accepted in the United States of America.
The financial statements of the Company as of September 30, 2018, and for the year then ended were audited by other auditors who have ceased operations. Those auditors expressed an unqualified opinion on those financial statements in their report dated July 10, 2019.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our 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 consolidated 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 consolidated 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 consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
Fiorello & Partners, Inc.
We have served as the Company’s auditor since 2020.
Coral Springs, Florida
July 9, 2021
THIS REPORT IS A COPY OF THE PREVIOUSLY ISSUED REPORT. THE PREDECESSOR AUDITOR HAS NOT REISSUED THE REPORT.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Creative Waste Solutions, Inc. and Subsidiaries
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Creative Waste Solutions, Inc. and Subsidiaries (the “Company”) as of September 30, 2018 and 2017 and the related statements of operations, shareholders’ equity and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2018 and 2017, and the results of its operations and its cash flows for each of the two years in the period ended September 30, 2018 in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in the Note 3 to the financial statements, the Company’s ability to raise additional capital through debt and/or equity financing to fund its operating costs is unknown, which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
DE LEON & COMPANY, P.A.
We have served as the Company’s auditor since 2016.
Pembroke Pines, Florida
July 10, 2019
CREATIVE WASTE SOLUTIONS, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30,
September 30,
ASSETS
Current assets -
Cash
$ 393
$ 3,132
Accounts receivable, net
-
8,914
Total current assets
12,046
Deposits
57,000
7,000
Equipment, net
36,700
54,700
Intangible assets, net
150,000
150,000
Goodwill
149,500
149,500
Total assets
$ 393,593
$ 373,246
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities -
Accounts payable and accrued liabilities
$ 176,564
$ 196,566
Convertible debentures and notes payable, related parties
554,396
241,896
Convertible debentures and notes payable, net of discount
158,830
396,500
Advances-related parties
97,621
80,046
Derivative liability
210,336
72,082
Total current liabilities
1,197,747
987,090
Total liabilities
1,197,747
987,090
Stockholders’ deficit:
Preferred Stock;$.001 par value 5,000,000 shares authorized, none issued and outstanding
-
-
Common Stock; $.001 par value, 225,000,000 shares authorized and 6,015,974 shares issued and outstanding in 2019 and 2018
6,016
6,016
Additional-paid in capital
3,011,608
3,011,608
Accumulated deficit
(3,821,778 )
(3,631,468 )
Total stockholders’ deficit
(804,154 )
(613,844 )
Total liabilities and stockholders’ deficit
$ 393,593
$ 373,246
The accompanying notes are an integral part of these consolidated financial statements.
CREATIVE WASTE SOLUTIONS, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended September 30,
Sales
$ 271,355
$ 598,348
Cost of goods sold
208,574
357,256
Gross profit
62,781
241,092
Operating expenses:
General and administrative
223,909
390,569
Loss from operations
(162,128 )
(149,477 )
Other income (expenses):
Gain on derivative liability
18,972
2,612,064
Interest expense
(48,154 )
(53,601 )
Total other income (expenses)
(29,182 )
2,558,463
Net income (loss)
$ (190,310 )
$ 2,408,986
Basic earnings (loss) per common share
Net income (loss)
$ (0.03 )
$ 0.40
Diluted earnings (loss) per common share
Net income (loss)
$ (0.03 )
$ 0.30
Basic weighted average shares outstanding
6,015,974
6,015,974
Diluted weighted average shares outstanding
6,015,974
7,974,616
The accompanying notes are an integral part of these consolidated financial statements.
CREATIVE WASTE SOLUTIONS, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
YEARS ENDED SEPTEMBER 30, 2019 AND 2018
Common Stock
Additional
Paid-In
Accumulated
Total
Stockholders’
Shares
Amount
Capital
Deficit
Deficit
Balance at September 30, 2017-as restated
6,015,974
$ 6,016
$ 3,011,608
$ (6,040,454 )
$ (3,022,830 )
Net Income
-
-
-
2,408,986
2,408,986
Balance at September 30, 2018-as restated
6,015,974
6,016
3,011,608
(3,631,468 )
(613,844 )
Net Loss
-
-
-
(190,310 )
(190,310 )
Balance at September 30, 2019
6,015,974
$ 6,016
$ 3,011,608
$ (3,821,778 )
$ (804,154 )
The accompanying notes are an integral part of these consolidated financial statements.
CREATIVE WASTE SOLUTIONS, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended September 30,
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss)
$ (190,310 )
$ 2,408,986
Adjustments to reconcile net income (loss) to net cash
Provided by (used in) operating activities:
(Gain) loss in fair value of derivative liability
(18,972 )
(2,612,064 )
Depreciation and amortization
59,056
140,917
Changes in operating assets and liabilities
Accounts receivable and Deposit
8,914
84,716
Accounts payable and accrued liabilities
(20,002 )
(22,203 )
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
(161,314 )
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of fixed assets
-
(2,200 )
Investment
(50,000 )
-
NET CASH (USED IN) INVESTING ACTIVITIES
(50,000 )
(2,200 )
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from convertible notes payable
196,000
-
Proceeds from advances-related parties
17,575
3,500
Payment on note payable
(5,000 )
NET CASH PROVIDED BY FINANCING ACTIVITIES
208,575
3,500
Net increase (decrease) in cash
(2,739 )
1,652
Cash, beginning of period
3,132
1,480
Cash, end of period
$ 393
$ 3,132
SUPPLEMENTAL CASH FLOWS INFORMATION
Interest paid
$ -
$ -
Income taxes paid
$ -
$ -
The accompanying notes are an integral part of these consolidated financial statements.
CREATIVE WASTE SOLUTIONS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2019 AND 2018
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
Creative Waste Solutions, Inc. (formally Silverstar Resources, Inc.) (the “Company”) was incorporated under the laws of the State of Nevada on December 5, 2003. On June 23, 2016, the Company’s Board of Directors approved of a change of name from Silverstar Resources, Inc. to Creative Waste Solutions Inc. The Company operates in the waste management industry.
On March 10, 2015, the Company formed 1030029 Ltd, an Alberta numbered company as a wholly owned subsidiary to meet the requirements of holding working interest of Alberta producing oil and gas properties.
On April 7, 2016, the Company entered into a membership purchase agreement with Creative Waste Solutions, LLC, a Florida limited liability corporation (“Creative”) whereby the Company purchased 100% of the membership interest for $25,000 .
On May 22, 2016, the Company entered into a stock purchase agreement with Florida based, Integrated Waste Transportation Services, Inc. (“Integrated”). Pursuant to the agreement, the Company acquired 100% of the outstanding equity of Integrated in exchange for $300,000 and 50,000 shares valued at $1 per share of common stock of the Company .
On August 26, 2016, the Company purchased certain assets of Easy Disposal, Inc. (“Easy”), for an aggregate amount of $396,500 which includes 50,000 shares of common stock of the Company, valued at $2.19 per share and the remainder in cash .
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 at the date of the balance sheet. Actual results could differ from those estimates.
Presentation
The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (SEC).
Principles of Consolidation
The consolidated financial statements of the Company include the Company and its wholly-owned subsidiaries, 1030029 Ltd., Creative and Integrated. All material intracompany balances and transactions have been eliminated. 1030029 Ltd. has been dormant for years and has no assets or liabilities.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Accounts Receivable
The Company grants credit to customers under credit terms that it believes are customary in the industry and does not require collateral to support customer receivables. The Company evaluates its provision for an allowance for doubtful collections, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer. At September 30, 2019 and September 30, 2018, the Company’s allowance for doubtful accounts was $0.
Revenue Recognition
The Company recognizes revenue from waste removal services it provides to its customers. The Company’s revenue recognition policies comply with FASB ASC Topic 606 “Revenues From Contracts With Customers”. Revenue is recognized at the time the waste removal services are completed, when a formal arrangement exists, the price is fixed or determinable, and no other significant obligations of the Company exist and collectability is reasonably assured.
For revenue from product sales, the Company recognizes revenue in accordance with FASB ASC 606. A five-step analysis must be met as outlined in Topic 606: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) performance obligations are satisfied. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required. Adoption of ASC 606 had no material effect on the Company’s financial statements.
Equipment
Equipment are carried at the cost of acquisition and depreciated over the estimated useful lives of the assets. Costs associated with repair and maintenance is expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related asset. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method.
Stock-Based Compensation
The Company records stock-based compensation in accordance with FASB ASC Topic 718, “Compensation - Stock Compensation.” FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees. There were no options outstanding during the periods presented.
Related Parties
The Company follows FASB ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.
Long-lived Assets
The Company assesses long-lived assets, including intangible assets, for impairment in accordance with the provisions of FASB ASC 360 Property, Plant and Equipment. A long-lived asset (or group of assets) shall be tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The carrying amount of a long lived asset is not recoverable if it exceeds the sum of the undiscounted net cash flows expected to result from the use and eventual disposition of the asset. The amount of impairment loss, if any, is measured as the difference between the net book value of the asset and its estimated fair value. For purposes of these tests, long-lived assets must be grouped with other assets and liabilities for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Company follows ASC Topic 350 “Intangibles-Goodwill and Other” in accounting for intangible assets, which requires impairment losses to be recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by the assets are less than the assets’ carrying amounts. During the years ended September 30, 2019 and 2018, the Company did not sustain any impairment loss.
Goodwill
Goodwill represents the excess of purchase price over the underlying net assets of businesses acquired. Under accounting requirements, goodwill is not amortized but is subject to annual impairment tests. The Company recorded goodwill of $149,500 related to its August 2016 acquisition of Easy. As of September 30, 2019 and September 30, 2018, the Company performed the required impairment review and concluded that the goodwill was not impaired.
Basic and Diluted Earnings Per Share
Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share. Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive convertible instruments were converted. The Company had outstanding convertible notes during the years ended September 30, 2019 and 2018, however, the Company had an operating loss during the year ended September 30, 2019 and, accordingly, the potential convertible shares were not considered in the EPS calculation for the September 30, 2019 year-end period due to the anti-dilutive effect of the convertible notes. For the year ended September 30, 2018 the Company had net income, accordingly, 1,958,642 of convertible shares are included in diluted weighted average shares outstanding.
Income Taxes
Income taxes are provided in accordance with ASC Topic 740 Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.
Reclassifications
Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. These reclassifications had no effect on the previously reported net income or stockholders’ deficit.
New Accounting Pronouncements
In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, current U.S. GAAP requires the performance of procedures to determine the fair value at the impairment testing date of assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, the amendments under this ASU require the goodwill impairment test to be performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The ASU becomes effective for the Company on January 1, 2020. The amendments in this ASU should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing a right-of-use asset and a lease liability on the balance sheet for leases with terms longer than 12 months and disclosing key information about leasing transactions. Leases are classified as either operating or financing, with such classification affecting the pattern of expense recognition in the income statement. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) - Targeted Improvements, which provides an optional transition method to apply the new lease requirements through a cumulative-effect adjustment in the period of adoption. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures.
On November 15, 2019, the FASB issued ASU 2019-10 which amended the effective dates for certain major accounting standards, including ASC 842, to give implementation relief to certain types of entities. Under the FASB’s new framework, two “buckets” were defined. Bucket 1 includes public companies that are SEC filers but excludes “Small Reporting Companies” (SRC’s). Bucket 2 includes all other entities, including SRC’s. Bucket 2 entities have to apply ASC 842 for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The Company plans to adopt ASU 2016-02, Leases (Topic 842), in our fiscal year ending September 30, 2022.
No other new accounting pronouncements were issued during the year ended September 30, 2019 that we expect will have a material effect on the Company’s fiscal year 2019 consolidated financial statements.
NOTE 3 - EQUIPMENT
Equipment at September 30, 2019 and 2018 consisted of the following:
Equipment
$ 92,200
$ 92,200
Less accumulated depreciation
(55,500 )
(37,500 )
Equipment, net
$ 36,700
$ 54,700
Depreciation expense for the year ended September 30, 2019 and 2018 was $18,000 and $18,000, respectively.
NOTE 4 - INTANGIBLE ASSETS
Intangible assets at September 30, 2019 consisted of the following:
Customer lists
$ 375,000
$ 375,000
Licenses
150,000
150,000
525,000
525,000
Less accumulated amortization
(375,000 )
(375,000 )
Intangible assets, net
$ 150,000
$ 150,000
The customer lists were amortized over 24 months and fully amortized as of June 30, 2018. The licenses are not being amortized.
Amortization expense of intangible assets for the years ended September 30, 2019 and 2018 was $0 and $122,917, respectively.
NOTE 5 - ASSET HELD FOR SALE
On April 14, 2015, the Company acquired the working interest of two producing oil and gas properties in Alberta Canada for US $80,000. The Company has determined that the asset does not fit the future plans of the Company. Under the guidelines of ASC 360 Newly Acquired Asset Classified as Held for Sale, the Company is actively seeking to dispose of the asset through a sale. During the year ended September 30, 2015, the Company determined that this asset had become impaired and took a charge to earnings of $80,000 (see Note 15).
NOTE 6 - CONVERTIBLE DEBENTURES - RELATED PARTY
On January 15, 2015, the Company amended the convertible debenture with the principal of $75,754 of a related party so that the debenture became anti-dilutive with a conversion price set at $0.35 regardless of any forward or reverse splits in the Company’s common stock.
On February 23, 2015, a shareholder holding a debenture with a principal balance of $75,754 and other advances to the Company of $149,142 made demand for payment of the total amounts owed including interest. The Company was not able to pay the outstanding balances. The Company and shareholder came to an agreement that the shareholder could convert his $75,754 convertible note payable and interest at $0.15 and the advances of $149,142 plus further advances up to $150,000 at a 15% discount to the closing price as of date of the agreement or $0.15 per share. The shareholder agreed to advance an additional $50,000 to the Company to acquire assets for the Company. The $50,000 is not convertible and is accounted for as advances due to related party see Note 10.
The change in terms of the $75,754 convertible note created a derivative liability and required the Company to record fair value at the inception of the derivative and for each subsequent reporting period. The fair value of the embedded derivatives at September 30, 2019 was determined using the Black Scholes model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 375.28%, (3) weighted average risk-free interest rate of 1.75%, (4) expected life of 1.0 years, and (5) estimated fair value of the Company’s common stock is $0.05. The fair value of the derivative liability as of September 30, 2019 was $42,787. During the year ended September 30, 2019 the decrease in fair value of $29,295 resulted in a gain reflected in the statement of operations. During the year ended September 30, 2018 the decrease in fair value of $2,612,064 resulted in a gain reflected in the statement of operations.
The addition of a conversion feature for the advances of $149,142 created a beneficial conversion feature as of September 30, 2015 of $149,142. Due to the advances having no terms and being due on demand, this amount was expensed as interest expense for the year ended September 30, 2015.
As of September 30, 2019 and September 30, 2018, the amount due under the convertible debentures to a related party was $241,896 and $241,896, respectively.
NOTE 7 - NOTES PAYABLE
On June 2, 2014, the Company issued a long term note payable for $81,989 to an entity for advances on work completed on the Company’s Ahbau Lake mining property in British Columbia, Canada. The note is unsecured, and bears interest at 10% per year and matures in one year at which time all principal and interest is due and payable. On April 6, 2017 the outstanding balance of $81,989 plus accrued interest of $23,242 was converted to 152,509 shares of the Company’s common stock.
On April 2, 2015, the Company issued a $60,000 one-year note bearing interest of 9% as part of the acquisition of the working interest in the Alberta oil and gas property. On April 6, 2017 the outstanding balance of $60,000 plus accrued interest of $8,107 was converted to 98,705 shares of the Company’s common stock.
On December 29, 2015, the Company issued a $17,500 note payable bearing interest of 6% to an unrelated party. The proceeds of the note were used for working capital.
On April 4, 2016, the Company issued a $29,000 note payable bearing interest of 10% to an unrelated party. The proceeds of the note were used for working capital.
On August 16, 2016, the Company issued a $17,000, 10% annual interest, demand note payable to a related party.
On August 26, 2016, the Company issued two notes payable to unrelated parties for $300,000 that bear annual interest at 10%. The proceeds of the note were used to purchase Easy. In fiscal year 2019 a $5,000 principal payment was made and a shareholder of the Company purchased the remaining $295,000 balance from the unrelated parties.
On July 30, 2017, the Company issued a note payable on demand to an unrelated party for $50,000 that bears annual interest at 10%. The proceeds of the note were used to make a deposit for the planned purchase of a Florida Limited Liability Company as disclosed in Note 16.
On November 8, 2018, the Company issued a convertible debenture of $25,000 bearing interest of 10% per annum with an August 8, 2019 maturity date that was extended to September 30, 2021 on its original maturity date. The accrued interest and principal amount are payable in one lump-sum payment on the maturity date unless the holder of the note converts the debt to common stock at $0.10 per share. As of the date of these financial statements the note has not been converted. The fair value of the embedded derivative at September 30, 2019 was determined using the Black Scholes based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 319.9%, (3) weighted average risk-free interest rate of 1.56%, (4) expected life of two years, (5) estimated fair value of the Company’s common stock is $0.05. The fair value of the derivative liability as of September 30, 2019 was $13,177 which is included in other expenses on the statement of operations.
On April 4, 2019, the Company issued a convertible debenture of $45,000 bearing interest of 10% per annum with a December 15, 2019 maturity date that was extended to September 30, 2021 on its original maturity date. The accrued interest and principal amount are payable in one lump-sum payment on the maturity date unless the holder of the note converts the debt to common stock at $0.15 per share. As of the date of these financial statements the note has not been converted. The fair value of the embedded derivative at September 30, 2019 was determined using the Black Scholes based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 308.6%, (3) weighted average risk-free interest rate of 1.83%, (4) expected life of two and one-half months, (5) estimated fair value of the Company’s common stock is $0.05. The fair value of the derivative liability as of September 30, 2019 was $3,960 which is included in other expenses on the statement of operations.
On August 29, 2019, the Company issued a convertible debenture of $75,000 bearing interest of 10% per annum with a May 29, 2020 maturity date that was extended to September 30, 2021 on its original maturity date. The accrued interest and principal amount are payable in one lump-sum payment on the maturity date unless the holder of the note converts the debt to common stock. Conversion is based on the lowest of (a) the lowest closing share price during the 20 preceding days ending on the note date or (b) 60% of the lowest closing share price during the 20 preceding days prior to conversion. As of the date of these financial statements the note has not been converted. The fair value of the embedded derivative at September 30, 2019 was determined using the Black Scholes based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 299.43%, (3) weighted average risk-free interest rate of 1.83%, (4) expected life of five and one-half months, (5) estimated fair value of the Company’s common stock is $0.05. The fair value of the derivative liability as of September 30, 2019 was $52,005 which is included in other expenses on the statement of operations.
On August 29, 2019, the Company issued a convertible debenture of $75,000 bearing interest of 10% per annum with a May 29, 2020 maturity date. The accrued interest and principal amount are payable in one lump-sum payment on the maturity date unless the holder of the note converts the debt to common stock. Conversion is based on the lowest of (a) the lowest closing share price during the 20 preceding days ending on the note date or (b) 60% of the lowest closing share price during the 20 preceding days prior to conversion. As of the date of these financial statements the note has not been converted. On March 6, 2020 the Company paid the note off with a payment of $95,000 which included principal, accrued interest, and a prepayment penalty. The fair value of the embedded derivative at September 30, 2019 was determined using the Black Scholes based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 299.43%, (3) weighted average risk-free interest rate of 1.83%, (4) expected life of six months, (5) estimated fair value of the Company’s common stock is $0.05. The fair value of the derivative liability as of September 30, 2019 was $98,407 which is included in other expenses on the statement of operations.
NOTE 8 - ADVANCES - RELATED PARTIES
The Company received advances from related parties totaling $97,621 and $80,046 as of September 30, 2019 and September 30, 2018, respectively. The advances are unsecured, do not have a maturity term and carry no interest rate.
NOTE 9 - DERIVATIVE INSTRUMENTS
During the year ended September 30, 2016, the Company changed the conversion features on a convertible instrument that require liability classification under ASC 815. The Company subsequently issued additional convertible instruments. These instruments are measured at fair value at the end of each reporting period. (See Note 7).
As defined in FASB ASC 820, fair value is 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 (exit price). The Company utilized the market data of similar entities in its industry or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. FASB ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).
The three levels of the fair value hierarchy are as follows:
·
Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities
·
Level 2 - Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date and includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.
·
Level 3 - Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.
The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as of September 30, 2019 and 2018:
Recurring Fair Value Measures
Level 1
Level 2
Level 3
Total
Derivative liabilities-Sept. 30, 2019
$ -
$ -
$ 210,336
$ 210,336
Derivative liabilities-Sept. 30, 2018
$ -
$ -
$ 72,082
$ 72,082
The following table represents the change in the fair value of the derivative liabilities during the year ended September 30, 2019 and 2018:
Fair value of derivatives, September 30, 2017
$ 2,684,146
Change in fair value of derivative liability - (gain)
(2,612,064 )
Fair value of derivatives, September 30, 2018
72,082
Fair value of derivatives, September 30, 2018
72,082
Derivative value charged to note payable discount
157,226
Change in fair value of derivative liability - (gain)
(18,972 )
Fair value of derivatives, September 30, 2019
$ 210,336
NOTE 10 - EARNINGS (LOSS) PER SHARE
Earnings (loss) per share is calculated using the weighted average number of shares of common stock outstanding during the applicable period. Basic weighted average common shares outstanding is computed using the weighted average shares outstanding during the period. Diluted earnings (loss) per share is computed using the weighted average number of common shares outstanding and if dilutive, potential common shares outstanding during the period. Potential common shares consist of the additional common shares issuable upon the conversion of convertible debentures. The effect on the number of common shares outstanding assuming conversion of the convertible debentures as of September 30, 2019 would result in an increase of approximately 5,553,130 shares. The Company incurred a net loss for the year ended September 30, 2019, accordingly, the convertible shares were not used to calculate EPS for that period due to their anti-dilutive effect. The Company realized net income in fiscal 2018 and used 1,958,642 of convertible shares to calculate EPS.
NOTE 11 - ACQUISITIONS
On April 7, 2016, the Company entered into a membership purchase agreement with Creative whereby the Company purchased 100% of the membership interest for $25,000.
On May 22, 2016, the “Company entered into a stock purchase agreement with Integrated. Pursuant to the agreement, the Company acquired 100% of the outstanding equity of Integrated in exchange for $300,000 and 50,000 shares of common stock of the Company. The common stock was valued at $1.00 per shares which was the closing price of the Company’s common stock on May 22, 2016.
On August 26, 2016, the Company purchased certain assets of Easy for an aggregate amount of $396,500 which includes 50,000 shares of common stock of the Company and $287,000 in cash. The common stock was valued at $2.19 per shares, which was the closing price of the Company’s common stock on August 26, 2016.
The Company purchased Creative, Integrated and Easy to integrate itself in the waste management business in southeastern region of the United States.
The transactions are accounted for as business combinations in accordance with ASC 805. A summary of the purchase price allocations at fair value is below.
Creative
Integrated
Easy
Furniture and equipment
$ -
$ -
$ 90,000
Deposit
-
-
7,000
Customer list
25,000
350,000
-
License
-
-
150,000
Goodwill
-
-
149,500
Purchase price
$ 25,000
$ 350,000
$ 396,500
The customer lists were amortized over 24 months and were fully amortized as of June 30, 2018. The licenses are not being amortized.
NOTE 12 - EQUITY
During the years ended September 30, 2019 and 2018 the Company did not issue any shares of common or preferred stock. The financial statements have been restated to show 5,038 common shares that were issued and outstanding in fiscal year 2016 but not shown on the Consolidated Statements of Stockholders Deficit. The 5,038 common shares balance is comprised of 5,000 shares issued for cash and all the proceeds were credited to additional paid-in capital and the other 38 shares resulted from the rounding up of fractional shares. The effect of the restatement was to increase common stock by $5 and decrease additional paid in capital by $5.
NOTE 13- INCOME TAXES
The Company has losses carried forward for income tax purposes through September 30, 2019. There are no current or deferred tax expenses for the years ended September 30, 2019 and 2018 due to the Company’s tax loss position. The Company has fully reserved for any benefits of these losses utilizing a statutory federal income tax rate of 21%. The deferred tax consequences of temporary differences in reporting items for financial statement and income tax purposes are recognized, as appropriate. Realization of the future tax benefits related to the deferred tax assets is dependent on many factors, including the Company’s ability to generate taxable income within the net operating loss carry-forward period. Management has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes.
The deferred income tax asset for the years ended September 30, 2019 and 2018 consists of the following:
Deferred income tax asset attributed to:
Current operations
$ 43,368
$ 42,143
Less: Change in valuation allowance
(43,368 )
(42,143 )
Net refundable amount
$ -
$ -
The composition of the Company’s deferred tax assets as at September 30, 2019 and September 30, 2018 are as follows:
September 30,
Sept. 30,
Income tax operating loss carryforward
$ 3,282,991
$ 3,076,475
Statutory federal income tax rate
21 %
21 %
Effective income rate
0 %
0 %
Deferred tax assets:
Net operating loss carryforward
$ 615,928
$ 572,560
Amortization of intangible assets
73,500
73,500
Total deferred tax assets
689,428
646,060
Less: valuation allowance
(689,428 )
(646,060 )
Net deferred tax asset
-
-
The potential income tax benefit of these losses has been offset by a full valuation allowance.
As of September 30, 2019, the Company has an unused net operating loss carry-forward balance of approximately $3,283,000 that is available to offset future taxable income. Of the approximate unused net operating loss carry-forward balance, $3,076,000 expires between 2026 and 2039 and $207,000 can be carried forward indefinitely but can only offset 80% of taxable income, if any, without regard to the Internal Revenue Code Section 199A deduction.
The issuance of 2,532,054 shares of common stock during the year ended September 30, 2014 affected a change in control of the Company. Due to the change in control, the tax loss carryforward may only be used on a formula basis under IRS section 382 which will affect the benefit the Company can gain from the tax loss.
The Company has not filed federal income tax returns for more than five years. Management believes that due to the large net operating loss carryforward and the lack of any net taxable income during the Company’s history it is not liable for any income tax.
NOTE 14 - DISCONTINUED OPERATIONS
Prior to the business acquisitions referred to in Note 12, the Company operated in the oil and gas industry. The Company discontinued operating in the oil and gas industry and operates in the waste management industry. Accordingly, the financial statements for the year ended September 30, 2015 reflect a loss from discontinued operations from the oil and gas operations. The Company wrote-off an asset consisting of two oil and gas properties located in Alberta Canada in the September 30, 2015 fiscal year as disclosed in Note 6. The Company is actively seeking to dispose of the asset through a sale and will account for the disposition of this property as a discontinued operation.
NOTE 15 - COMMITMENTS AND CONTINGENCIES
Lease
The Company leases operations facility located in Hollywood, FL under a long-term operating lease expiring in January 2018, with the option to renew for an additional five years, such option has been exercised. For the twelve months ended January 31, 2017 the base monthly rent was $4,650 plus sales tax. For the twelve months ended January 31, 2018 the base monthly rent is $4,850 plus sales tax. The lease was acquired with the acquisition of Easy. Upon the exercise of the five-year renewal option the monthly rent increased to $6,348. Rent expense was $110,661 and $102,543 for the years ended September 30, 2019 and 2018, respectively, which includes approximately $2,420 monthly rent for administrative offices which are leased on a month to month basis.
As of September 30, 2019, future minimum annual payments, including sales tax, under operating lease agreements for fiscal year ending September 30 are as follows:
2020 through 2022 - three years - $76,176 annually
$ 228,528
19,044
$ 247,572
Membership Purchase Agreement:
On August 2, 2017, the Company entered into a “Membership Purchase Agreement” with a Florida based Limited Liability Company (LLC). Pursuant to the agreement, the Company would acquire 100% of the membership interests of the LLC for a $2,600,000 purchase price. The acquisition was contingent on the Company’s raising of the funds needed to consummate the transaction. The Company made a non-refundable deposit of $50,000, an additional $943,371 is required at closing (net of closing credits) and the seller will provide $1,600,000 of financing. The closing was extended to March 8, 2018. The Company was not able to raise the funds necessary for the acquisition and therefore forfeited the $50,000 deposited which was charged to operations and included in general and administrative expenses in the quarter ended March 31, 2018.
On September 16, 2019 the Company entered into an agreement to purchase real estate at a price of $300,000. The agreement stated that if the full purchase price was not paid by December 31, 2019 any deposit made by the Company would be forfeited. The company paid a $50,000 deposit and was not able to obtain the necessary financing to pay the full purchase price, accordingly, on January 1, 2020 the Company received written notice from the seller that the $50,000 deposit was forfeited.
NOTE 16 - SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that there are no material subsequent events that would require an adjustment to the financial statements. The subsequent events disclosures are shown below.
On January 1, 2020, the Company forfeited a $50,000 real estate deposit (see Note 16).
On March 3, 2020 through March 6, 2020, without any formal repayment terms, $183,000 was advanced to the Company by one of its director’s. The funds were used to pay-off the $95,000 convertible debt obligation referred to in the subsequent paragraph and the remaining proceeds were used for working capital purposes.
On March 6, 2020, the Company, pursuant to a debt settlement agreement, paid $95,000, which included a prepayment penalty, to liquate a $75,000 convertible debenture plus accrued interest that was to mature on May 29, 2020 and agreed to issue to the note holder 10,000 shares of the Company’s common stock. The shares were issued on April 16, 2020.
From October 1, 2019 through February 28, 2020, the Company conducted limited operations primarily due to a lack of capital that precluded the completion of structural repairs, mandated by its landlord, to the interior of its operations facility. Also, from March 2020 through the middle of June 2020, the Company experienced a decline in revenues of approximately $74,000 compared to the average revenues generated during the prior fiscal year for a three and one-half month period. The principal reason for the aforementioned revenue decrease is the outbreak of the coronavirus (COVID-19) which resulted in mandates from federal, state, and local authorities resulting in an overall decline in economic activity. Due to the reasons referred to in this paragraph, the Company’s revenues for the fiscal year ended September 30, 2020 declined by approximately 36% as compared to the September 30, 2019 fiscal year revenues.
On May 20, 2021, the SEC issued an order instituting administrative proceedings and notice of hearing pursuant to Section 12(j) of the 1934 Act due to the Company being delinquent in its periodic filings.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
Due to the death of its auditor, the Company engaged a new auditor.

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company’s Chief Executive Officer/ Chief Financial Officer has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2019. Based upon such evaluation, the Chief Executive Officer/Chief Financial Officer has concluded that, as of September 30, 2019, the Company’s disclosure controls and procedures were not effective. This conclusion by the Company’s Chief Executive Officer/Chief Financial Officer does not relate to reporting periods after September 30, 2019.
Management’s Report on Internal Control over Financial Reporting
Under the supervision and with the participation of our management, including our Chief Executive Officer/Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 30, 2019 based on the framework stated by the Committee of Sponsoring Organizations of the Treadway Commission. Furthermore, due to our financial situation, we intend to implement further internal controls when we become profitable so as to fully comply with the standards set by the Committee of Sponsoring Organizations of the Treadway Commission.
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) of the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles. Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Based on its evaluation as of September 30, 2019, our management concluded that our internal controls over financial reporting were not effective as of September 30, 2019 due to the material weaknesses set forth below. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
The material weaknesses are as follows:
1. Accounting and Finance Personnel Weaknesses - Our current accounting staff is relatively small and we do not have the required infrastructure of meeting the higher demands of being a U.S. public company, accordingly, we do not have the segregation of duties consistent with a strong system of internal control. Additionally, our CEO and CFO are the same person, therefore, we do not have the checks and balances present when a company has multiple executives.
2. Lack of Internal Audit Function - We lack sufficient resources to have an internal audit function.
In order to mitigate these material weaknesses to the fullest extent possible, all work of the CFO is reviewed by a Director of the Company. All unexpected results are investigated. At any time, if it appears that any control can be implemented to continue to mitigate such weaknesses, it will be immediately implemented. The Company continues to study the implementation of additional internal controls over accounting and financial reporting.
This Form 10-K does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting because the attestation report requirement has been removed for “smaller reporting companies” under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Changes in Internal Control Over Financial Reporting
We have not made any changes in our internal controls over financial reporting that occurred during the period covered by this Form 10-K that has materially affected, or is 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, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Directors and Officers
The following individuals serve as the directors and executive officers of our company as of the date of this annual report. All directors of our company hold office until the next annual meeting of our shareholders or until their successors have been elected and qualified. The executive officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office.
Name
Position Held with Our Company
Age
Date First Elected or Appointed
Jared Robinson
Chief Executive Officer, and Director
March 3, 2013
Joseph Graham
Secretary and Director
August, 11, 2013
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.
Jared Robinson - President and Director
Jared Robinson has acted as a director of our company’s board of Directors since March 3, 2013 and as Chairman since August 11, 2013. Mr. Robinson has more than 15 years of management experience and substantial financial experience gained from creating and operating two successful start-ups from conception through sale. In September of 2010 Mr. Robinson sold Navicus, a company that he founded in 2001 to Pinkerton C and I. Mr. Robinson served as President and was integral in all aspects of the company’s success, from securing key accounts, overseeing all the financials, vendor relationships, and managing the 30 plus employees. Prior to Navicus, Mr. Robinson served as COO of Greene’s Pharmacy. Greene’s was founded in 1996 and sold in 2000. Greene’s was an institutional pharmacy that sold pre-packaged prescriptions to the Assisted Living Facility community in South Florida. Mr. Robinson secured key accounts, managed the operations, and oversaw all of the financials. Most recently, Mr. Robinson served as COO of Clean Beach Technologies. Clean Beach Technologies was a company formed with technology approved by British Petroleum to remediate oil from the beach sand following the Deep Water Horizon Oil spill in the Gulf Coast. After running the company for a year and securing contracts with the municipalities in the Gulf Coast, the company eventually sold its technology. Mr. Robinson is currently an active member of MSHA (Mine Safety and Health Administration).
Joseph Graham - Secretary and Director
Joseph Graham was appointed as secretary and director of our company on August 11, 2013. Joseph Graham is an attorney at law admitted to the Bar in the States of New York and New Jersey. Mr. Graham has a diverse skill set through his various jobs in the legal field. In 2008 Mr. Graham worked in the U.S. EPA Office of Enforcement and Compliance Assurance, Air Enforcement Division. In 2009 he worked with the Community Health Law Project, a project that prosecuted civil rights cases on behalf of the handicapped and indigent. In 2010 Mr. Graham worked for the Honorable Michael J. Yavinsky in the New York Criminal Court System where he reviewed party motion submissions, researched legal issues for pending motion hearings and decisions, and helped create a sentencing chart as a reference for all New York City Criminal Court Judges. In 2011 to 2012, Mr. Graham worked with Fred Alger Management where he received his training on SEC law and worked with general counsel of the mutual fund complex and was responsible for various regulatory filings with the SEC, reviewed all agreements, acted as a liaison with sales and marketing departments regarding their responsibilities under securities law, and provided guidance to portfolio managers and analysts regarding investment restrictions. Mr. Graham currently practices with the Community Health Law Project, advising and representing clients on a range of family, consumer, and housing law matters. Mr. Graham graduated from Pace University School of Law in 2010 and received his Bachelor of Arts from Montclair State University and was magna cum laude in 2007.
Family Relationships
There are no family relationships among any of our directors, executive officers and proposed directors or executive officers.
Committees of the Board
All proceedings of our 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 corporate laws of the state of Nevada and the bylaws of our company, as valid and effective as if they had been passed at a meeting of the directors duly called and held.
Our audit committee consists of our entire board of directors.
Our company currently does not have nominating, compensation committees or committees performing similar functions nor does our company have a written nominating, compensation or audit committee charter. Our board of directors does not believe that it is necessary to have such committees because it believes that the functions of such committees can be adequately performed by our directors.
Our company does not have any defined policy or procedure requirements for shareholders to submit recommendations or nominations for directors. The directors believe that, given the early stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our company does not currently have any specific or minimum criteria for the election of nominees to the board of directors and we do not have any specific process or procedure for evaluating such nominees. Our directors assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.
Audit Committee and Audit Committee Financial Expert
Our board of directors has determined that none of the members of our audit committee qualifies as an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K, and is “independent” as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.
We believe that the members of our board of directors are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. We believe that retaining an independent director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that we have not generated any material revenues to date. In addition, we currently do not have nominating, compensation or audit committees or committees performing similar functions nor do we have a written nominating, compensation or audit committee charter. Our board of directors does not believe that it is necessary to have such committees because it believes the functions of such committees can be adequately performed by our board of directors.
Code of Ethics
We adopted a Code of Ethics applicable to all of our directors, officers, employees and consultants, which is a “code of ethics” as defined by applicable rules of the SEC. Our Code of Ethics is attached as an exhibit to our annual report on Form 10-KSB filed on December 29, 2008. If we make any amendments to our Code of Ethics other than technical, administrative, or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of our Code of Ethics to our chief executive officer, chief financial officer, or certain other finance executives, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies in a Current Report on Form 8-K filed with the SEC.
We will provide a copy of the Code of Business Conduct and Ethics to any person without charge, upon request. Requests may be sent in writing to: Creative Waste Solutions, Inc., 1440 NW 1st Court, Boca Raton, Florida 33432.

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. EXECUTIVE COMPENSATION.
The following tables sets for the compensation for all officers and directors during the past three years:
DIRECTORS and OFFICERS - COMPENSATION
SUMMARY COMPENSATION TABLE
Name and Principal Position
Year
Salary
($)
Bonus
($)
Stock
Awards
($)
Option Awards
($)
Non- Equity Incentive Plan Compensa- tion
($)
Change in Pension Value and Nonqualified Deferred Compensation Earnings
($)
All Other Compensa-
tion
($)
Total
($)
Joseph Graham(1)
--
---
--
--
--
--
--
--
Secretary and
--
--
--
--
--
--
--
--
Director
--
--
--
--
--
--
--
--
Jared Robinson(2)
--
--
--
--
--
--
--
--
Chairman, Director,
--
--
--
--
--
--
--
--
Former Chief Financial Officer
--
--
--
--
--
--
--
--
Abraham Mishal(3)
--
Director
--
________________
(1)
Joseph Graham has been our secretary and director since August 11, 2013.
(2)
Jared Robinson was appointed as our Chief Financial Officer and Director on March 3, 2013. Mr. Robinson resigned as Chief Financial Officer and was appointed Chairman of our Board of Directors on August 13, 2013
(3)
Mr. Abraham Mishal was elected to our Board of Directors on July 15, 2016
Narrative Disclosure to Summary Compensation Table
There are no employment contracts, compensatory plans or arrangements, including payments to be received from our company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with our company, or its subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of our company.
Stock Option Plan
Currently, we do not have a stock option plan in favor of any director, officer, consultant or employee of our company.
Stock Options/SAR Grants
During our fiscal year ended September 30, 2019 there were no options granted to our named officers or directors.
Outstanding Equity Awards at Fiscal Year End
No equity awards were outstanding as of the year ended September 30, 2019.
Compensation of Directors
We reimburse our directors for expenses incurred in connection with attending board meetings. We did not pay any director’s fees or other cash compensation for services rendered as a director since our inception to September 30, 2017. In the fiscal year ended September 30, 2018, one of our director’s received $8,000 for administrative services rendered in our day-to-day operations. The payments to said director were not a director’s fee.
We have no formal plan for compensating our directors for their service in their capacity as directors, although such directors are expected in the future to receive stock options to purchase common shares as awarded by our board of directors. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. No director received and/or accrued any compensation for their services as a director, including committee participation and/or special assignments.
We have determined that none of our directors are independent directors, as that term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(15) of the NASDAQ Marketplace Rules.
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.

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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 September 30, 2020 certain information concerning the beneficial ownership of our common stock, by (i) each person known by us to own beneficially five per cent (5%) or more of the outstanding shares of each class, (ii) each of our directors and executive officers, and (iii) all of our executive officers and directors as a group.
The number of shares beneficially owned by each 5% stockholder, director or executive officer is determined under the rules of the Securities and Exchange Commission, or SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under those rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment power and also any shares that the individual or entity has the right to acquire within 60 days after September 30, 2020 through the exercise of any stock option, warrant or other right, or the conversion of any security. Unless otherwise indicated, each person or entity has sole voting and investment power (or shares such power with his or her spouse) with respect to the shares set forth in the following table. The inclusion in the table below of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of those shares.
Address of Beneficial Owner
Amount and Nature of Beneficial Ownership (1)
Percentage of Class
Joseph Graham
1489 West Warm Springs Road
Suite 110
Henderson, NV 89014
30,000
.50 %
Jared Robinson
1489 West Warm Springs Road
Suite 110
Henderson, NV 89014
50,000
.83 %
Petra Corporation
1489 West Warm Springs Road
Suite 110
Henderson, NV 89014
1,470,000
24.43 %
Lilia Mishal
1489 West Warm Springs Road
Suite 110
Henderson, NV 89014
581,316
9.66 %
Jaime Mayo
1489 West Warm Springs Road
Suite 110
Henderson, NV 89014
501,000
8.33 %
Directors and Executive officers as a Group
80,000
1.33 %
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 described below, none of the following persons has any direct or indirect material interest in any transaction to which we are a party during the past two years, or in any proposed transaction to which our company is proposed to be a party:
A.
any director or officer;
B.
any proposed nominee for election as a director;
C.
any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our common stock; or
D.
any relative or spouse of any of the foregoing persons, or any relative of such spouse, who has the same house as such person or who is a director or officer of any parent or subsidiary.
Director Independence
We currently act with three directors, consisting Joseph Graham, Jared Robinson and Abraham Mishal. We do not have a standing audit, compensation or nominating committee, but our entire board of director’s acts in such capacities. We believe that our members of our board of directors are capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. The board of directors of our company does not believe that it is necessary to have an audit committee because we believe that the functions of an audit committee can be adequately performed by the board of directors. In addition, we believe that retaining an independent director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
De Leon & Company, PA was our independent auditors for the fiscal years ended September 30, 2018 and September 30, 2017.
The following table shows the fees paid or accrued by us for the audit and other services provided by our auditor during fiscal 2019 and 2018.
Audit Fees
$ 34,600
$ 23,900
Audit-Related Fees
Tax Fees
All Other Fees
Total
$ 34,600
$ 23,900
As defined by the SEC, (i) “audit fees” are fees for professional services rendered by our principal accountant for the audit of our annual financial statements and review of financial statements included in our Form 10-K, or for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years; (ii) “audit-related fees” are fees for assurance and related services by our principal accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “audit fees;” (iii) “tax fees” are fees for professional services rendered by our principal accountant for tax compliance, tax advice, and tax planning; and (iv) “all other fees” are fees for products and services provided by our principal accountant, other than the services reported under “audit fees,” “audit-related fees,” and “tax fees.”
Under applicable SEC rules, the Audit Committee is required to pre-approve the audit and non-audit services performed by the independent auditors in order to ensure that they do not impair the auditors’ independence. The SEC’s rules specify the types of non-audit services that an independent auditor may not provide to its audit client and establish the Audit Committee’s responsibility for administration of the engagement of the independent auditors. Until such time as we have an Audit Committee in place, the Board of Directors will pre-approve the audit and non-audit services performed by the independent auditors.
Consistent with the SEC’s rules, the Audit Committee Charter requires that the Audit Committee review and pre-approve all audit services and permitted non-audit services provided by the independent auditors to us or any of our subsidiaries. The Audit Committee may delegate pre-approval authority to a member of the Audit Committee and if it does, the decisions of that member must be presented to the full Audit Committee at its next scheduled meeting.

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. EXHIBITS
Exhibit No.
Document Description
31.1
CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
32.1 *
CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002
XBRL Interactive Data Files
_____________
* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.