What changed in this filing

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Item 9A. Controls and Procedures

2022-03-29 compared with 2013-04-16 · 525 added, 1278 removed, 24 unchanged (99% of the section changed)

Controls And Procedures.

of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer of our disclosure controls and procedures (as defined in Rule

13a-15(e) and Rule 15d-15(e) of the Exchange Act of 1934, as amended (the Exchange Act)).

Based upon this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are

effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is:

(i) recorded, processed, summarized and reported, within the time periods specified in the SEC rules and forms,

and (ii) accumulated and communicated to our management, including our chief executive officer and chief financial officer, or persons performing similar functions as appropriate to allow timely decisions regarding required disclosure.

Managements Annual Report on Internal Control over Financial Reporting .

Our management is responsible for establishing and

maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act).

Our internal control over financial reporting (ICFR) is a process designed to provide reasonable assurance

regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Therefore, even those systems determined to be effective can provide only reasonable

assurance of achieving their control objectives.

Our management, with the participation of our chief executive officer and chief financial

officer, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2012.

In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the

Treadway Commission (COSO) in Internal Control Integrated Framework.

Based on this evaluation, our management, with the participation of our chief executive officer and chief financial officer, concluded that, as of December 31,

2012, our ICFR were ineffective due to a material weakness existing in our internal controls as of December 31, 2012.

weakness is a deficiency, or a combination of deficiencies in ICFR such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

weaknesses would permit information required to be disclosed by us in the reports that we file or submit to not be recorded, processed, summarized and reported, within the time period specified in the Securities Exchange Commissions rules and

As a result of our assessment and based on the criteria in the COSO framework, management has concluded that, as of December 31,

2012, our ICFR was not effective due to the existence of the following material weakness:

Inadequate Reviews to Ensure

Complex Accounting Transactions and Foreign Subsidiary Balances are Accurately Recorded in Accordance with U.S.

Generally Accepted Accounting Principles (GAAP):

Due to our liquidity situation, we did not have adequate staffing of

trained accounting personnel with appropriate expertise in U.S.

GAAP to ensure that certain complex material and non-routine transactions are properly reflected in our financial statements.

Consequently, we may not anticipate and identify accounting

issues, or other risks critical to financial reporting, that could materially impact the consolidated financial statements.

We will begin to implement remediation steps outlined below to eliminate the material weakness identified.

Inadequate Reviews to Ensure Complex Accounting Transactions and Foreign Subsidiary Balances are Accurately Recorded in Accordance

We have engaged a consulting firm to provide review and analysis for complex transactions and technical accounting research to ensure transactions are properly recorded in compliance with U.S.

In addition, we are

seeking to hire additional staff with greater knowledge of U.S.

GAAP both in the U.S.

and our foreign operations as well as engaging selected third parties to improve the accuracy of our financial reporting.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial

Managements report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permits us to provide only managements report in this annual report.

Changes in Internal Control over Financial Reporting

During 2012, we initiated the steps outlined above under Remediation Activities to improve the quality of our ICFR.

Other Information

Directors, Executive Officer and Corporate Governance

Our directors and executive officers are as follows:

Frederic Scheer

CEO, Founder and Chairman of the Board of Directors

Michael Okada

Senior Vice President and CFO

Senior Vice President, Operations

Kelvin Okamoto

Senior Vice President and CTO

Jacques Vincent

Franklin Hunt

FREDERIC SCHEER , our CEO, Founder and Chairman of the Board of Directors, since Cereplasts inception, became

involved in the biodegradable plastics industry in 1994 through Montedison SpA, a large chemical conglomerate operating Novamont SpA, an Italian resin manufacturer and research company.

Foreseeing that the demand for biodegradable products in North

America would expand rapidly by the end of the decade, Mr.

Scheer created the Biodegradable Products Institute (BPI), and this non-profit organization has quickly become the largest biodegradable association in the world, with more than 40

members, including BASF, DuPont, Georgia Pacific, NatureWorks, Dow and Eastman.

Prior to his involvement in the biodegradable industry, Mr.

Scheer was a merchant banker in Europe.

He holds a Doctor of Laws from the University of Paris, a

Masters Degree in Finance and Political Science from Institut dEtudes Politiques, Paris, France.

Scheer, a U.S.

citizen, is fluent in French, Spanish, Italian and English.

Due to his knowledge of the bioplastic industry and the fact that Mr.

Scheer is the founder of the Company, the Board of Director concluded that Mr.

Scheer had all qualifications to be a member

of the Board.

MICHAEL OKADA , our Senior Vice President and Chief Financial Officer since February, 2013, joined Cereplast as Vice

President and Corporate Controller in April 2011.

From June, 2009 through February, 2011, Mr.

Okada served as Vice President, Finance and Corporate Controller of Mindspeed Technologies, Inc.

(MSPD NasdaqGS), a fabless semiconductor

company based in Newport Beach, CA.

Okada served as Interim Vice President of Financial Reporting from September, 2008 through April, 2009 of American Apparel, Inc.

(APP Amex), a publicly traded vertically integrated apparel company.

Okada also served as Chief Financial Officer and Treasurer of ExtruMed, LLC, a medical device component manufacturer, from May, 2007 through August, 2008.

Okada holds a Bachelor of Science degree in Accounting from Santa Clara

University and is a Certified Public Accountant licensed in the state of California.

MARK BARTON, joined Cereplast as Senior Vice

President Manufacturing in July 2008.

Barton leads overall manufacturing operations.

With over 25 years of successful plastic compounding industry experience, most recently as Vice President of Toray Resin Company, Mr.

Barton has held

a succession of resin manufacturing leadership positions.

Bartons leadership, Toray Resins engineering resin compounding operations became an industry leader, achieving registrations of ISO 9001/TS16949 for quality

systems, ISO 14001 for environmental systems and receiving the Toray Industries, Presidents Award in 2006 for overall performance and achievement.

Bartons experience includes championing successful lean manufacturing and continuous

improvement systems in resin compounding operations.

Barton holds a Bachelor of Science degree in Management Science/Business Administration from Franklin University in Columbus, Ohio.

KELVIN OKAMOTO , our Senior Vice President and Chief Technology Officer since April, 2011, joined Cereplast as Senior Vice President

Research & Development in December, 2010.

Okamoto brings 20 plus years of research and development experience in the plastics and packaging industries to his role as Chief Technology Officer.

Prior to joining Cereplast, he served

as Manager of Materials Engineering and Manager of Materials Engineering for Solo Cup Operating Corp.

Okamotos career has included positions as an Intellectual Property Consultant, Chief Engineer at Taylor-Made-Adidas, Director of

Intellectual Property at Trexel, Inc., Materials Development Manager at Pactiv, Group Leader-Structural Plastics Product Development and Research Chemist at Himont USA (presently Lyondell Basell) and Staff Chemist at GE Corporate Research and

Okamoto has been affiliated with the American Chemical Society, ASTM, National Association of Patent Practitioners and the Society of Plastic Engineers, where he has held a number of elected positions.

Okamoto holds a

in Chemistry from Cornell University and a Bachelor of Science degree in Chemistry from Stanford University.

INDEPENDENT DIRECTORS

JACQUES VINCENT , Director.

Vincent has served as a Director of the Company since January 2008.

Vincent was recently named vice chairman and advisor to the chairman and

previously served as the vice chairman and chief operating officer at Groupe Danone.

Vincent began his career with Danone in 1970 and has since held various financial and overall management positions within the company.

a graduate engineer of the Ecole Centrale, Paris, holds a bachelors degree in economics from Paris University and a Masters of Science from Stanford University.

In addition to Mr.

Vincents position at Groupe Danone, he is the

Chairman of Daniel Carasso Research Center and Ecole Normale Superieure de Lyon, and board member of Syngenta in Switzerland and Yakult Honsha in Japan.

Due to his knowledge of the Trade and marketing of food service items and dairy products around the world, the Board concluded that Mr.

Vincent is qualified to serve as a Director.

CRAIG PEUS, Director and Chair of the Compensation Committee.

Peus was appointed as one of our directors effective September 29,

Peus currently serves as the Chairman and Founder of One Simple Move Inc., a web-based relocation software company, a position he has held since June 2006.

Peus also currently serves as an advisor to three operating companies

providing general business advice.

Peus has served as a Managing Director of Waveland Capital Group, Inc.

a multi-service investment bank.

From June 2003 through December 2009, Mr.

Peus was the Managing Partner and Co-Founder

of Blossom Street Capital Advisors, LLC, an investment banking firm and licensed broker/dealer.

Peus has held executive level positions at Astera Care, LLC, MTS Health Partners, LP, KRS Kapital, LLC and was a financial analyst at Salomon

Brothers, Inc.

Peus received a Bachelor of Sciences Degree in Biological Sciences from Stanford University.

Due to his knowledge of

the financial industry, the Board concluded that Mr.

Peus is qualified to serve as a Director.

Peus is also Chairman of the Compensation Committee.

FRANKLIN HUNT, Director and Chair of the Audit Committee.

Hunt was appointed as one of our directors effective September 29, 2010.

Hunt is the owner of Hunt Business

Consulting, a company that provides consultation to companies regarding current requirements under GAAP and IFRS.

Hunt served as a member of HJ &Associates, LLC from 1995 through May 2010.

Hunt received a Bachelor of

Science degree from Brigham Young University.

He is a member of AICPA and UACPA and is a Certified Public Accountant licensed in the state of Utah.

Due to his experience in public accounting, the Board concluded that Mr.

Hunt is qualified to serve as a Director.

Hunt is also Chairman of the Audit Committee.

PAUL PELOSI, JR., Director.

Pelosi was appointed as one of our directors effective February 24, 2012.

Pelosi has 16 years

of experience in advising emerging and Fortune 500 companies in the areas of finance, infrastructure, sustainability and public policy.

Since October 2011, Mr.

Pelosi has served as Director of Corporate Development at Petrus Capital Partners,

Pelosi also served as Director of Investment Banking and M&A at WR Hambrecht from March 2009 through September 2011.

Pelosi served as Senior Vice President of Business Development at InfoUSA, from February 2007 through

From January 2003 through January 2007, Mr.

Pelosi was Manager and Originator in the New Construction Division at Bank of America Countrywide.

Pelosi received a BA in History in 1991, and a JD/MBA with a specialization in

International Business in 1995 from Georgetown University.

Due to his knowledge of the environmental issues in public policy, the Board

concluded that Mr.

Pelosi is qualified to serve as a Director.

Family Relationships

There are no family relationships among our directors or executive officers.

BOARD COMMITTEES

AUDIT COMMITTEE

The audit committee of the board of directors reviews the internal accounting procedures of our company and consults with and reviews the services

provided by our independent accountants.

The audit committee is currently comprised with Franklin Hunt as our Chairman, Jacques Vincent and Craig Peus.

The Board of directors has determined that Franklin Hunt is the audit committee financial expert.

COMPENSATION COMMITTEE

compensation committee of the board of directors:

Reviews and recommends to the board the compensation and benefits of our executive officers;

Administers our stock option plans;

Establishes and reviews general policies relating to compensation and employee benefits.

Our compensation committee is currently comprised with Mr.

Craig Peus as our Chairman and Mr.

Jacques Vincent.

No interlocking relationships exist between the board of directors or compensation committee and the board of directors or compensation committee of any

other company.

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

The Nominating Committee identifies individuals qualified to become members of the Board.

The Committees duties also includes the development and recommendation to the Board of Directors of

corporate governance principles that are applicable to the Company, and is responsible for leading an annual review of the Boards performance.

Our nominating and corporate governance committee is currently comprised with Mr.

Vincent as our Chairman and Mr.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires that our officers and directors, and persons who own more than ten percent

of a registered class of our equity securities, file reports of ownership and changes in ownership with the Securities and Exchange Commission and with any exchange on which the Companys securities are traded.

Officers, directors and persons

owning more than ten percent of such securities are required by Commission regulation to file with the Commission and furnish the Company with copies of all reports required under Section 16(a) of the Exchange Act.

To our knowledge, based

solely upon our review of the copies of such reports furnished to us, during the fiscal year ended December 31, 2012, all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners were

complied with, except that:

certain employees who received stock in exchange for services did not timely file Form 4s.

The transactions have since been reported on Form 5s filed by each of the foregoing.

Changes in Nominating Procedures

CODE OF ETHICS

adopted a Code of Ethics and Business Conduct for Officers, Directors and Employees that applies to all of our officers, directors and employees.

A copy of the Code of Ethics may be obtained, free of charge, by submitting written request to the

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

To our knowledge, during the past ten years, none of our directors, executive officers, promoters, control persons, or nominees has been:

convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or any Federal or

State authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;

found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal

or state securities or commodities law.

the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed,

suspended or vacated, relating to an alleged violation of (a) any Federal or State securities or commodities law or regulation;

(b) any law or regulation respecting financial institutions or insurance companies including, but not limited

to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order;

or (c) any law or regulation prohibiting mail or wire fraud or

fraud in connection with any business entity;

the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined

in Section 3(a)(26) of the Exchange Act (15 U.S.C.

78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C.

1(a)(29))), or any equivalent exchange, association, entity or organization that

has disciplinary authority over its members or persons associated with a member.

Controls and Procedures

upon an evaluation of the effectiveness of our disclosure controls and procedures performed by our Chief Executive Officer as of the

end of the period covered by this report, our Chief Executive Officer concluded that our disclosure controls and procedures have not

been effective as a result of a weakness in the design of internal control over financial reporting identified below.

used herein, “disclosure controls and procedures” mean controls and other procedures of our company that are designed to

ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded,

processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.

Disclosure controls

and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us

in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to our management, including

our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions

regarding required disclosure.

Annual Report on Internal Control over Financial Reporting

is responsible for establishing and maintaining adequate internal control over financial reporting (“ICFR”), as such term

is defined in Exchange Act Rule 13a-15(f) under the Securities Exchange Act of 1934.

Our Chief Executive Officer/Chief Accounting Officer

conducted an evaluation of the effectiveness of our ICFR based on the framework in Internal Control-Integrated Framework issued by the

Committee of Sponsoring Organizations of the Treadway Commission (“COSO 2013”).

Based on management’s evaluation under

the framework, management has concluded that our ICFR was not effective as of December 31, 2021.

identified material weaknesses in our ICFR primarily attributable to (i) lack of segregation of incompatible duties;

and (ii) insufficient

Board of Directors representation.

These weaknesses are due to our inadequate staffing during the period covered by this report and our

lack of working capital to hire additional staff.

Management has retained an outside, independent financial consultant to record and

review all financial data, as well as prepare our financial reports, in order to mitigate this weakness.

Although management will periodically

re-evaluate this situation, at this point it considers that the risk associated with such lack of segregation of duties and the potential

benefits of adding employees to segregate such duties are not cost justified.

We intend to hire additional accounting personnel to assist

with financial reporting as soon as our finances will allow.

annual report does not include an attestation report of our registered public accounting firm regarding ICFR.

Management’s report

was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission

that permit us to provide only management’s report in this annual report.

Directors And Executive Officers And Corporate Governance.

following table sets forth the names and ages of all directors and executive officers as of the end of the last fiscal year and on the

date of this report:

President, CFO, Secretary and Director

Zhang Haosong

Li, has served as a director, President and Chief Executive Officer of the Company since November 2020.

Xudong is a highly active

business consultant in China.

From 2017 to 2019, he served as the General Consultant at Sichuan Commodities Exchange.

He also served

as the consultant at Tianjin Commodities Exchange the same period of time.

From 2014 to 2016, he served as the General Consultant at

Shaanxi Jeer Health Industry Group.

The company, located in Shaanxi, Ankang City, also known as Chinese Selenium Valley, focused on the

R&D, production and sales from Selenium.

Haosong, Zhang Haosong has been a director of the Company since November 2020.

He previously worked at China Life Insurance, as a

special assistant to the chairman and general manager of one of its large company group.

He has over 6 years of domestic and foreign

listing counseling experience.

He also has expertise in corporate management consulting, equity investments and financing, VIE structure

processing, listed company acquisitions, mergers and acquisitions and restructuring.

Over the past five years he has served as a consultant

for many private and listed companies, and Sino-foreign joint ventures.

Zhang attended the France Brest Business School where he

received an MBA.

of our director’s primary qualification to serve as such involves his or her extensive experience with different aspects of counseling

and reviewing opportunities for acquiring businesses for their clients.

Company does not presently have an Audit Committee and the entire Board acts in such capacity for the immediate future due to the limited

size of the Board.

The Company intends to increase the size of its Board in the future, at which time it may appoint an Audit Committee.

lieu of an Audit Committee the Board is empowered to make such examinations as are necessary to monitor the corporate financial reporting

and the external audits of The Company, to provide to the Board of Directors (the “Board”) the results of its examinations

and recommendations derived there from, to outline to the Board improvements made, or to be made, in internal control, to nominate independent

auditors, and to provide to the Board such additional information and materials as it may deem necessary to make the Board aware of significant

financial matters that require Board attention.

Company does not presently have a Nominating Committee and the Board acts in such capacity for the immediate future due to the limited

size of the Board.

The Company intends to increase the size of its Board in the future, at which time it may appoint a Compensation Committee.

Compensation Committee will be authorized to review and make recommendations to the Board regarding all forms of compensation to be provided

to the executive officers and directors of The Company, including stock compensation, and bonus compensation to all employees.

Company does not have a Nominating Committee and the Board acts in such capacity.

of Conduct and Ethics

date, we have not adopted a Code of Ethics applicable to our principal executive officer and principal financial officer because the

Company has no meaningful operations.

The Company does not believe that a formal written code of ethics is necessary at this time.

expect that the Company will adopt a code of ethics if and when the Company successfully completes a business combination that results

in the acquisition of an on-going business and thereby commences operations.

Executive Compensation.

The following table sets forth the cash compensation (including cash bonuses) paid and equity awards granted by us for years ended December 31, 2012 and 2011 to our Chief Executive Officer and our

most highly compensated officers other than the Chief Executive Officer at December 31, 2012 whose total compensation exceeded $100,000.

Name & Principal Position

Pension Value

Frederic Scheer,

Chief Executive Officer

Michael Okada (3)

SVP, Chief Financial Officer

Heather Sheehan (4)

Former Chief Financial Officer

SVP, Operations

Kelvin Okamoto

SVP, Chief Technology Officer

Bonus paid in 2011 was approved by our Board of Directors, as recommended by the Compensation Committee for growth initiatives and accomplishments

achieved throughout the duration of the 5 year term of Mr.

Scheers expiring Employment Agreement.

Other compensation comprises payments made of salary amounts voluntarily deferred from a prior year in 2010 and 2011, as well as auto allowances in

Okada was appointed as our Interim Chief Financial Officer effective on February 10, 2012.

Okada was subsequently appointed as Senior

Vice President, Chief Financial Officer on February 5, 2013.

joined the Company on August 16, 2010 and resigned as our Chief Financial Officer effective on February 29, 2012.

DIRECTOR COMPENSATION

The following

table sets forth with respect to the named director, compensation information inclusive of equity awards and payments made in the year end December 31, 2012.

Incentive Plan

Change in Pension

Value and Nonqualified

Deferred Compensation

Jacques Vincent

During the year ended December 31, 2012, our independent directors did not receive any shares of restricted

Cereplast stock.

EMPLOYMENT AND OTHER AGREEMENTS

Effective August 1, 2011, we entered into an Amended and Restated Employment Agreement with Frederic Scheer (the Agreement) pursuant to which Mr.

Scheer will continue to serve as our

Chief Executive Officer for a period of four (4) years, unless earlier terminated, as provided in the Agreement.

Six months prior to the expiration of the Term, the Company and Mr.

Scheer agree in good faith to enter into discussions on a

new employment term and related employment agreement.

The Agreement provides for annual compensation of $565,000 and can be terminated for Cause, as defined in

the agreement, or without cause;

provided however, if Mr.

Scheer is terminated without cause or resigns for Good Reason, as defined in the Agreement, he is entitled to receive in a severance package:

(i) an amount equal to one and one half

times (1.5x) the annual base salary in effect at the date of the termination;

(ii) the average of the previous two annual bonus payments or the previous years annual bonus if less than two years of bonuses that have been paid;

(iii) all required COBRA premiums to the Companys health plan insurer in order to continue Mr.

Scheers health care coverage.

Scheers employment shall terminate automatically upon Mr.

Scheers death.

If a Change of Control occurs, Mr.

Scheer may elect to terminate this Agreement within 120 days after such Change of Control by giving

written notice of such election to the Company.

Scheer elects to terminate as a result of a Change of Control, the Company shall pay to Mr.

Scheer the total of 2.99 times his Annual Base Salary and the average of the previous two

Annual Bonus payments or the previous years Annual Bonus if less than two years of bonuses have been paid.

Scheers unvested stock options, if any, shall immediately vest and Mr.

Scheer will also be entitled to continued

health benefits.

The Scheer Agreement provides for the payment of a performance based annual bonus which shall not exceed 50% of

Scheers base salary and a discretionary bonus to be determined by the Board and the Compensation Committee of the Company.

Scheers employment is terminated by the Company for cause, by Mr.

Scheer for good reason, or due to Mr.

Scheers death, then effective on the date of termination all unvested rights held by Mr.

Scheer to any

equity, quasi-equity, or similar interests, including but not limited to options, stock units, or stock appreciation rights, shall become fully vested.

The Agreement also contains standard assignment of inventions, non-disclosure, non-solicitation, and conflict of interest clauses.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters.

The following table sets forth information regarding the beneficial ownership of our common stock as of April 15, 2013.

The information in this table

provides the ownership information for:

each person known by us to be the beneficial owner of more than 5% of our Common Stock;

each of our directors;

each of our executive officers;

our executive officers and directors as a group.

Beneficial ownership has been determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to the shares.

Unless otherwise indicated, the persons

named in the table below have sole voting and investment power with respect to the number of shares indicated as beneficially owned by them.

Common stock beneficially owned and percentage ownership is based on 332,681,674 shares outstanding on

April 5, 2013, and assuming the exercise of any options or warrants or conversion of any convertible securities held by such person, who are presently exercisable or will become exercisable within 60 days after April 5, 2013

Name of Beneficial Owner

Number of Shares Beneficially Owned

following tables set forth certain information about compensation paid, earned or accrued for services by the Company’s Chief Executive

Officer in the years ended December 31, 2021 and 2020:

Compensation Table

Name and Principal Position

Stock Awards ($)

Option Awards ($)

Non-Equity Incentive Plan Compensation ($)

Change in Pensions Value and Nonqualified Deferred Compensation Earnings ($)

All Other Compensation ($)

On November 3, 2020 Ms.

Xudong was appointed as CEO, CFO and Secretary.

On November 3, 2020, Mr.

Lazar resigned as CEO, CFO and Secretary.

do not have any employment agreements with our officers.

present we do not pay our directors for attending meetings of our Board of Directors.

Security Ownership of Certain Beneficial Owners and

Management and Related Stockholder Matters.

following table sets forth as of December 31, 2021 the number and percentage of the outstanding shares of common stock, which, according

to the information available to us, were beneficially owned by:

person who is currently a director,

executive officer,

current directors and executive officers as a group, and

person who is known by us to own beneficially more than 5% of our outstanding common stock.

as otherwise indicated, the persons named in the table have sole voting and dispositive power with respect to all shares beneficially

owned, subject to community property laws where applicable.

Name and Address of Beneficial Owner (1)

Number of Common Shares

Percent of Class

Frederic Scheer (1)

Kelvin Okamoto

Michael Okada

Jacques Vincent

Franklin Hunt

Paul Pelosi, Jr.

All officers and directors as a group

Less than one percent

Scheer beneficially owns such shares jointly with his wife, Jocelyne Scheer and through their private foundation The Frederic &

Jocelyne Scheer Foundation.

Certain Relationships and Related Transactions and Director Independence

There were no transactions since the beginning of the registrants last fiscal year, or any currently proposed transaction, in which the registrant was or is to be a participant and the amount

involved exceeds $ 120,000, and in which any related person had or will have a direct or indirect material interest.

Board Determination

of Independence

Our board of directors has determined that Messrs.

Hunt, Peus and Pelosi, comprising a majority of the board of directors

are currently independent as that term is defined under current listing standards of NASDAQ.

Principal Accountant Fees and Services

The following table sets forth all fees we incurred in connection with professional services rendered by HJ Associates & Consultants, LLP during the years ended December 31, 2012, and 2011:

Xudong Li, President, CFO, Secretary and Director

Zhang Haosong, Director

All executive officers, beneficial owners, and directors as a group (2)

Room 2707, Global Mansion, Zhengbian Road, Jishui District, Zhengzhou City, Henan Provence 450000 China

following table sets forth information as of the date of this report regarding the beneficial ownership of the Company’s Series

A-1 Preferred Stock by each of its executive officers and directors, individually and as a group and by each person who beneficially

owns in excess of five percent of the class of stock after giving effect to any exercise of warrants or options held by that person.

Name and Position

Percentage (3)

Xudong Li, President, Chief Executive Officer, Director (2)

Zhang Haosong, Director

All Officers and directors as a Group (2 persons)

on 5,000,000 shares of Series A-1 Preferred Stock (“Preferred Stock”) outstanding, which, voting together as a class,

have the right to vote 100 shares for each share of Preferred Stock owned of the Company’s voting shares on any and all shareholder

matters (the “Majority Voting Rights”).

Additionally, as long as at least an aggregate of 1,000,000 shares of Preferred

Stock are outstanding, the Company shall not, without the approval of the holders of at least a majority of the then outstanding

shares of Preferred Stock, alter or change the provisions of the Certificate of Incorporation so as to adversely affect the voting

powers, preferences or special rights of the Preferred Stock.

However, the Company may, by any means authorized by law and without

any vote of the holders of shares of Series A Preferred Stock, make technical, corrective, administrative or similar changes to such

Certificate of Designations that do not, individually or in the aggregate, adversely affect the rights or preferences of the holders

of shares of Preferred Stock.

Other than the Majority Voting Rights.

address of the officers and director of the Company is set forth above under the first table of this section

on aggregate voting shares, including Common Stock shares and Series A-1 Preferred Stock shares, presently issued and outstanding.

Relationships And Related Transactions, And Director Independence.

October 04, 2019, the Company issued 50,000,000 shares of common stock to Custodian Ventures, LLC at par for shares valued at $50,000

in exchange for settlement of a portion of a related party loan for amounts advanced to the Company in the amount of $20,100, and a note

receivable due to the Company in the amount of $29,900.

The note bears an interest of 3% and matures in 180 days following written demand

by the holder.

At December 31, 2020, the note receivable with a balance of $31,383 was written off because the collectability of the

note is unlikely after the change of control, the written off balance of the note consisted of the principal in the amount of $29,900

and interest receivable of $1,483.

May 4, 2020, the Company issued 5,000,00 shares of the Series A-1 Preferred stock valued at $5,000 to Custodian Ventures LLC as repayment

of funds loaned to the Company.

the year ended December 31, 2021, the Company’s current majority shareholder advanced $46,876 to the Company as working capital.

As of December 31, 2021 and 2020, the Company owed its current majority shareholders of $53,176, and $6,300, respectively.

are non-interest bearing and are due on demand.

Board currently consists of two members, of which Zhang Haosong meets the independence requirements of the Nasdaq Stock Market as currently

Accountant Fees And Services.

following is a summary of the fees billed to us for professional services rendered by our registered independent public accountants for

the fiscal years ended December 31, 2021 and December 31, 2020:

Fiscal year ended December 31,

Audit Related Fees

All Other Fees

The Audit Committee has adopted procedures for the pre-approval of audit and non-audit services rendered by our

independent registered public accountants, HJ Associates & Consultants, LLP, up to specified amounts.

Pre-approval may also be given as part of the audit committees approval of the scope of the engagement of the independent registered

public accountants or on an individual explicit case-by-case basis before the independent registered public accountants are engaged to provide each service.

The Audit Committee has determined that the provision of non-audit services is compatible with maintaining the principal accountants independence.

Exhibits Financial Statement Schedules

Financial Statements and Financial Statement Schedule

See Index to Consolidated Financial Statements

Articles of Incorporation.

(Incorporated by reference to the Form SB-2 Registration Statement filed with the Securities and Exchange Commission dated July 5, 2005.)

Certificate of Amendment to the Articles of Incorporation dated February 26, 2003 (Incorporated by reference to the Form SB-2 Registration Statement filed with the Securities and

Exchange Commission dated July 5, 2005.)

Certificate of Amendment to the Articles of Incorporation dated July 19, 2004 (Incorporated by reference to the Form SB-2 Registration Statement filed with the Securities and

Exchange Commission dated July 5, 2005.)

Certificate of Amendment to the Articles of Incorporation dated March 18, 2005 (Incorporated by reference to the Form SB-2 Registration Statement filed with the Securities and

Exchange Commission dated July 5, 2005.)

Certificate of Amendment to the Articles of Incorporation filed January 6, 2010 ((Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on

January 8, 2010)

Bylaws (Incorporated by reference to the Form SB-2 Registration Statement filed with the Securities and Exchange Commission dated July 5, 2005.)

Amendment to Bylaws (Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on December 28, 2009)

Form of Subscription Agreement used in connection with private offering dated April 2005 (Incorporated by reference to the Form SB-2 Registration Statement filed with the Securities

and Exchange Commission dated August 26, 2005)

Stock Option Plan (Incorporated by reference to the Form SB-2 Registration Statement filed with the Securities and Exchange Commission dated August 26, 2005)

Form of Placement Agent Warrant issued to Ladenburg Thalmann & Co.

(Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on June

Form of Warrant pursuant to the Securities Purchase Agreement dated June 9, 2010.

(Incorporated by reference to the registrants current report on Form 8-K filed with the SEC

on June 15, 2010)

Form of Warrant issued pursuant to the Venture Loan and Security Agreement by and between Compass Horizon Funding Company, LLC and Cereplast, Inc.

dated as December 21, 2010.

(Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on December 22, 2010)

Indenture dated as of May 24, 2011 (Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on May 24, 2011)

Global Note issued pursuant to the Indenture dated as of May 24, 2011.

(Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on May 24,

Form of Warrant issued to the subscribers (Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on November 15, 2011)

Sale and Purchase Agreement entered between the Company and Cargill Dow LLC (Incorporated by reference to the Form SB-2 Registration Statement filed with the Securities and Exchange

Commission dated August 26, 2005)

Termination of Periodic Equity Investment Agreement dated December 8, 2008 (Incorporated by reference to the registrants current report on Form 8-K filed with

the SEC on February 19, 2010)

Lease between Continental Grand I, L.P.

and Cereplast, Inc.

dated December 31, 2009 (Incorporated by reference to the registrants current report on Form 8-K filed with

the SEC on January 6, 2010)

Form of Securities Purchase Agreement entered into between Cereplast, Inc.

and certain investors in March 2010 (Incorporated by reference to the registrants current report on

Form 8-K filed with the SEC on March 26, 2010)

Form of Securities Purchase Agreement dated June 9, 2010, entered into between Cereplast, Inc.

and each investor in the Offering (Incorporated by reference to the

registrants current report on Form 8-K filed with the SEC on June 15, 2010)

Placement Agent Agreement between Cereplast, Inc.

and Ladenburg Thalmann & Co.

(Incorporated by reference to the registrants current report on Form 8-K filed

with the SEC on June 15, 2010)

Venture Loan and Security Agreement by and between Compass Horizon Funding Company, LLC and Cereplast, Inc.

dated as December 21, 2010.

(Incorporated by reference to the

registrants current report on Form 8-K filed with the SEC on December 22, 2010)

Securities Purchase Agreement dated as of January 26, 2011 by and among Cereplast, Inc.

and the investors party thereto.

(Incorporated by reference to the registrants

current report on Form 8-K filed with the SEC on February 1, 2011)

Securities Purchase Agreement dated as of May 18, 2011 by and among Cereplast, Inc.

and the investors party thereto.

(Incorporated by reference to the registrants current

report on Form 8-K filed with the SEC on May 19, 2011)

Waiver to Venture Loan and Security Agreement dated May 18, 2011.

(Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on

May 24, 2011)

Amended and Restated Agreement by and between Cereplast, Inc.

and Frederic Scheer effective as of August 1, 2011.

(Incorporated by reference to the registrants quarterly

report on Form 10-Q filed with the SEC on August 15, 2011)

Placement Agent Agreement, dated November 10, 2011, among the Company, Lazard Capital Markets LLC and Ardour Capital Investments, LLC (Incorporated by reference to the

registrants current report on Form 8-K filed with the SEC on November 15, 2011)

Form of Subscription Agreement between the Company and each of the investors signatories thereto.

(Incorporated by reference to the registrants current report on Form 8-K

filed with the SEC on November 15, 2011)

Indemnification Agreement between Cereplast, Inc.

and Michael Okada dated as of February 13, 2012 (Incorporated by reference to the registrants annual report on Form 10-K filed

with the SEC on April 16, 2012).

Form of Subscription Agreement between the Company and each of the investor signatory thereto (Incorporated by reference to the registrants annual report on Form 10-K filed

with the SEC on May 1, 2012).

First Amendment of Venture Loan and Security Agreement dated as May 1, 2012 (Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on June

Amended and Restated Secured Promissory Note (Loan A) (Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on July 5,

Amended and Restated Secured Promissory Note (Loan B) (Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on July 5,

Amended and Restated Common Stock Purchase Warrant (Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on July 5,

Common Stock Purchase Warrant (Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on July 5, 2012)

Form of Exchange Agreement (Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on August 9, 2012)

Stock Purchase Agreement (Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on August 30, 2012)

Registration Rights Agreement dated August 24, 2012 (Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on August 30,

Note Purchase Agreement dated October 15, 2012 (Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on October 19,

Form of Hanover Note (Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on October 19, 2012).

Exchange Agreement dated October 15, 2012.

(Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on October 19, 2012).

Form of Magna Note (Incorporated by reference to the registrants current report on Form 8-K filed with the SEC on October 19, 2012).

First Amendment to Note Purchase Agreement dated November 8, 2012 by and between Cereplast, Inc.

and Hanover Holdings I, LLC.

(Incorporated by reference to the registrants

current report on Form 8-K filed with the SEC on November 15, 2012).

First Amendment to Exchange Agreement dated November 8, 2012 by and between Cereplast, Inc.

and Magna Group, LLC.

(Incorporated by reference to the registrants current

report on Form 8-K filed with the SEC on November 15, 2012).

Amendment to Stock Purchase Agreement, dated January 2, 2013, between the Company and Ironridge (Incorporated by reference to the registrants current report on Form 8-K filed

with the SEC on January 8, 2013).

Amendment to Registration Rights Agreement, dated January 2, 2013, between the Company and Ironridge.

(Incorporated by reference to the registrants current report on Form 8-K

filed with the SEC on January 8, 2013).

Waiver Agreement, dated September 28, 2012, between the Company and Ironridge (Incorporated by reference to the registrants registration statement on Form S-1/A filed with the

SEC on January 25, 2013).

Waiver Agreement, dated October 8, 2012, between the Company and Ironridge (Incorporated by reference to the registrants registration statement on Form S-1/A filed with the

SEC on January 25, 2013).

Purchase Agreement dated as of January 25, 2013 between the Holders of the Companys 7% Convertible Senior subordinated Notes due 2016 and IBC Funds LLC (Filed

Employment agreement between Michael Okada and Cereplast, Inc.

dated February 5, 2013 (Filed herewith).

Code of Ethics (Incorporated by reference to the Form SB-2 Registration Statement filed with the Securities and Exchange Commission dated July 5, 2005.)

Subsidiaries (Incorporated by reference to the registrants report on Form 10-K filed with the SEC on April 16, 2012)

Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (Filed herewith)

Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (Filed herewith)

Certification of the Principal Executive Officer pursuant to 18 U.S.C.

Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed

Certification of the Principal Financial Officer pursuant to 18 U.S.C.

Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed

XBRL Instance Document

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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned on April 16, 2012,

thereunto duly authorized.

CEREPLAST, INC.

April 16, 2013

/s/ Frederic Scheer

Frederic Scheer

Chairman and Chief Executive Officer

(Principal Executive Officer)

April 16, 2013

/s/ Michael Okada

Michael Okada

Senior Vice President and Chief Financial Officer

(Principal Financial Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on

Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

April 16, 2013

/s/ Frederic Scheer

Frederic Scheer,

(Principal Executive Officer)

April 16, 2013

/s/ Craig Peus

Craig Peus, Director

April 16, 2013

/s/ Frank Hunt

Franklin Hunt, Director

April 16, 2013

/s/ Jacques Vincent

Jacques Vincent, Director

April 16, 2013

/s/ Paul Pelosi

Paul Pelosi, Director

Report of Independent Registered Public Accounting Firm

To the Board of Directors

Cereplast, Inc.

El Segundo, California

audited the accompanying consolidated balance sheets of Cereplast, Inc.

and subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of operations and other comprehensive income, stockholders equity (deficit)

and comprehensive income, and cash flows for the years then ended.

These consolidated financial statements are the responsibility of the Companys management.

Our responsibility is to express an opinion on these consolidated financial

statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board

(United States).

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial reporting.

Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but

not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting.

Consists of fees billed for professional services rendered for the audit of our financial statements and review of interim financial

statements included in quarterly reports and services that are normally provided in connection with statutory and regulatory filings

or engagements.

Related Fees.

Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit

or review of our financial statements and are not reported under “Audit Fees”.

Consists of fees billed for professional services for tax compliance, tax advice and tax planning.

These services include preparation

of federal and state income tax returns.

Consists of fees for product and services other than the services reported above.

of Directors’ Pre-Approval Policies

do not have a standing audit committee currently serving and as a result our BOD performs the duties of an audit committee.

Our BOD evaluates

and approves, in advance, the scope and cost of the engagement of an accounting firm before the accounting firm renders audit and non-audit

We do not rely on pre-approval policies and procedures.

AND FINANCIAL STATEMENT SCHEDULES.

following documents have been filed as a part of this Annual Report on Form 10-K.

Ended December 31, 2021 and 2020

of Independent Registered Public Accounting Firm (PCAOB ID:

Balance Sheets as of December 31, 2021 and 2020

Statements of Operations for the Years Ended December 31, 2021 and 2020

Statements of Shareholders’ Deficit for the Years Ended December 31, 2021 and 2020

Statements of Cash Flows for the Years Ended December 31, 2021 and 2020

Notes to Financial Statements

Statement Schedules.

schedules are omitted because they are not applicable or not required or because the required information is included in the Financial

Statements or the Notes thereto.

The following exhibits are filed as part of, or incorporated by reference into, this Annual Report:

Articles of Incorporation and Amendment thereto.

Securities Purchase Agreement between Custodian ventures, LLC and Xudong Li dated October 22, 2020

Consent of Independent Registered Public Accounting Firm

Certification of Chief Executive Officer pursuant to Rule 13a-14 or Rule 15d-14 of Securities Exchange Act of 1934.

Certification of Chief Executive Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (18 U.S.C.

Section 1350).

Instance Document

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to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized.

March 28, 2022

Executive Officer

accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities

indicated on March 28, 2022.

Executive Officer and a Director

Executive Officer)

Zhang Haosong

of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of

Hong Yuan Holding Group

Opinion on the Financial Statements

We have audited the accompanying consolidated balance

sheets of Hong Yuan Holding Group as of December 31, 2021 and 2020, the related statements of operations, stockholders’ equity (deficit),

and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”).

our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31,

2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles

generally accepted in the United States.

Substantial Doubt about the Company’s Ability

to Continue as a Going Concern

The accompanying financial statements have been prepared

assuming that the Company will continue as a going concern.

As discussed in Note 3 to the financial statements, the Company’s significant

operating losses raise substantial doubt about its ability to continue as a going concern.

The financial statements do not include any

adjustments that might result from the outcome of this uncertainty.

Basis 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

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 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.

An audit also includes examining, on a test basis, evidence supporting the

amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation.

We believe that

our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present

fairly, in all material respects, the financial position of Cereplast Inc.

and subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for the years then ended, in conformity with U.S.

accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue

as a going concern.

As discussed in Note 2 to the consolidated financial statements, the Company has suffered significant recurring losses, has a significant accumulated deficit, and has insufficient working capital to fund planned operations.

factors raise substantial doubt about the Companys ability to continue as a going concern.

Managements plans in regard to these matters are also described in Note 2.

The consolidated financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

/s/ HJ Associates & Consultants, LLP

HJ Associates & Consultants, LLP

Lake City, Utah

April 16, 2013

CEREPLAST, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except shares data)

December 31, 2012

December 31, 2011

Our audit included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

Critical audit matters are

matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the

audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially

challenging, subjective, or complex judgments.

We determined that there

are no critical audit matters.

BF Borgers CPA PC

have served as the Company’s auditor since 2021

YUAN HOLDING GROUP

Current assets

Accounts Receivable, Net

Inventory, Net

Prepaid Expenses and Other Current Assets

Total Current Assets

Property and Equipment

Accumulated Depreciation and Amortization

Property and Equipment, Net

Restricted Cash

Deferred Loan Costs

Intangible Assets, Net

Total Other Assets

LIABILITIES AND SHAREHOLDERS EQUITY

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities

Accounts Payable

Accrued Expenses

Capital Leases, Current Portion

Loan Payable, Current Portion (net of discount of $148)

Convertible Subordinated Notes, Current Portion (net of discount of $451)

Derivative Liability

Preferred Stock, $0.001 par value;

5,000,000 shares authorized;

92 and 0 shares issued and Outstanding at December 31,

2012 and December 31, 2011, respectively

Accounts payable and accrued liabilities

Due to related parties

Total Current Liabilities

Long-Term Liabilities

Loan Payable, (net of discount of $50)

Convertible Subordinated Notes

Capital Leases, Long-Term

Total Long-Term Liabilities

TOTAL LIABILITIES

Shareholders Equity

Common Stock, $0.001 par value;

Stockholders’ Deficit

Preferred Stock:

5,000,000 shares authorized;

63,463,659 and 18,933,139 shares issued and outstanding at

December 31, 2012 and December 31, 2011, respectively

Additional Paid in Capital

Accumulated Deficit

Accumulated Other Comprehensive Income

Total Shareholders Equity

Noncontrolling Interests

Total Shareholders Equity

Total Liabilities and Shareholders Equity

See accompanying notes to consolidated financial statements.

CEREPLAST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME

(In thousands, except per share data)

December 31, 2012

December 31, 2011

Sales Discounts, Returns and Allowances

COST OF SALES

Research and Development

Selling, General and Administrative

LOSS FROM OPERATIONS BEFORE OTHER EXPENSES

OTHER EXPENSES

Loss on Debt Extinguishment

Loss on Derivative Liability

Interest and Other Income

Interest Expense, Net

TOTAL OTHER EXPENSE, NET

NET LOSS BEFORE PROVISION FOR INCOME TAXES

Provision for Income Taxes

OTHER COMPREHENSIVE INCOME

Gain on Foreign Currency Translation

TOTAL COMPREHENSIVE LOSS

BASIC AND DILUTED LOSS PER SHARE

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, BASIC AND DILUTED

See accompanying notes to consolidated financial statements.

CEREPLAST, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME

(in thousands, except share data)

$ 0.001 par value 5,000,000 issued and

outstanding at December 31, 2021 and 2020

Common stock:

250,000,000 shares authorized;

$ 0.001 par value 74,640,766 shares

issued and outstanding at December 31, 2021 and 2020

Paid-in capital

Accumulated deficit during development stage

( 97,318,853 )

( 97,272,577 )

Total Stockholders’ Deficit

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

accompanying notes are an integral part of these consolidated financial statements.

YUAN HOLDING GROUP

OF OPERATIONS

Operating Expenses

General and administrative

Professional fees

Total Operating Expenses

Operating loss

Other Income and Expense

Interest income

Total other income (expense)

Provision for income taxes

Basic and dilutive net loss per common share

Weighted average number of common shares outstanding - basic and diluted

accompanying notes are an integral part of these consolidated financial statements.

YUAN HOLDING GROUP

OF STOCKHOLDERS’ EQUITY

Comprehensive

Balance – December 31.

Issuance of common stock under a private placement

Issuance of common stock for employee compensation

Issuance of common stock for Board member services

Issuance of common stock for settlement agreements

Issuance of common stock for vendor services

Issuance of common stock from warrant exercise

Compensation expense related to stock option plan

Net loss for the year ended December 31, 2011

Gain on foreign currency translation

$ ( 97,272,577 )

Cancellation of common stock

Balance – December 31, 2021

Issuance of common stock under a private placement

Issuance of common stock for employee compensation

Issuance of common stock for vendor services

Issuance of common stock pursuant to settlement agreements

Issuance of common stock pursuant to exchange agreements

Forbearance of coupon interest on Convertible Notes

Warrant issued in connection with debt modification

Compensation expense related to stock option plan

Issuance costs for Registration Statement on Form S-1

Net loss for the year ended December 31, 2012

Gain on foreign currency translation

$ ( 97,318,835 )

Comprehensive

Balance – December 31, 2019

See accompanying notes to consolidated financial statements.

CEREPLAST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, except shares data)

December 31, 2012

December 31, 2011

$ ( 97,254,935 )

Beginning balance

$ ( 97,254,935 )

Conversion of preferred stock into common stock

Issuance of preferred stock to related party

Due to related party written off upon change of control

Notes receivable from related party written off upon change of control

Balance – December 31, 2020

$ ( 97,272,577 )

Ending balance

$ ( 97,272,577 )

accompanying notes are an integral part of these consolidated financial statements.

YUAN HOLDING GROUP

OF CASH FLOWS

CASH FLOWS FROM OPERATING ACTIVITIES

Adjustment to Reconcile Net Loss to Net Cash Used in Operating Activities

Depreciation and Amortization

Reserve for Inventory Obsolescence

Allowance for Doubtful Accounts

Common Stock Issued for Services, Salaries and Wages

Amortization of Loan Discount

Impairment of Intangible Assets

Extinguishment of Convertible Debt

Loss on Derivative Liability

Adjustments to reconcile net loss to net cash used in operating activities:

Interest income

Changes in operating assets and liabilities:

Accounts Receivable

Deferred Loan Costs

Prepaid Expenses and Other Current Assets

Restricted Cash

Accounts Payable

Accrued Expenses

Accounts payable and accrued liabilities

Loan payable - related party

Net Cash Used in Operating Activities

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of Property, Equipment and Intangibles

Proceeds from Sale of Equipment

NET CASH USED IN INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

Payments on Capital Leases

Proceeds from Capital Leases

Noncontrolling Interest Activities

Payments on Notes and Loan Payable

Proceeds from Loan Payable, Net of Loan Costs

Proceeds from Convertible Subordinated Notes, Net of Issuance Costs

Proceeds from Issuance of Common Stock and Subscriptions, Net of Issuance Costs

Proceeds from Issuance of Preferred Stock, Net of Issuance Costs

NET CASH PROVIDED BY FINANCING ACTIVITIES

FOREIGN CURRENCY TRANSLATION

NET (DECREASE) INCREASE IN CASH

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

CASH AND CASH EQUIVALENTS, END OF PERIOD

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash Paid During the Year For:

During the year ended December 31, 2012, the Company issued 1,000,000 shares of common stock in exchange for net proceeds of $488

under a private placement.

During the year ended December 31, 2011, the Company issued 5,721,500 shares of common stock in exchange for

net proceeds of $15,860 under a private placement.

SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS

During the year ended December 31, 2012, the Company issued 84,478 shares valued at $88 for services to employees, issued 111,644 shares

valued at $20 for prepaid services, issued 27,234,587 shares valued at $1,260 for a settlement agreement and issued 16,099,811 shares valued at $4,028 for an exchange agreement.

The Company also recognized $66 of expense related to vesting of

employee stock options for the same period.

During the year ended December 31, 2011, the Company issued 168,382 shares valued at

$673 for services to directors and employees, issued 35,000 shares valued at $155 for exercise of common stock warrants, issued 12,000 shares valued at $59 for prepaid services and issued 4,062 shares valued at $20 for a settlement

The Company also recognized $180 of expense related to vesting of employee stock options for the same period.

accompanying notes to consolidated financial statements.

CEREPLAST, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010

ORGANIZATION AND LINE OF BUSINESS

incorporated on September 29, 2001 in the State of Nevada under the name of Biocorp North America Inc.

On March 18, 2005, we filed an amendment to our certificate of incorporation to change our name to Cereplast, Inc.

Line of Business

We have developed and are commercializing proprietary bio-based resins through two complementary product families:

Compostables ®

resins which are compostable, renewable, ecologically sound substitutes for petroleum-based

plastics, and Cereplast Sustainables resins (including the Cereplast Hybrid Resins product line), which replaces up to 90% of the petroleum-based content of traditional plastics with materials from renewable resources.

Our resins can be

converted into finished products using conventional manufacturing equipment without significant additional capital investment by downstream converters.

The demand for non-petroleum based, clean and renewable sources for materials, such as bioplastics, and the demand for compostable/biodegradable products are being driven globally by a variety of factors,

including fossil fuel price volatility, energy security and environmental concerns.

These factors have led to increased spending on clean and renewable products by corporations and individuals as well as legislative initiatives at national, state

and local level.

We are a full-service resin solution provider uniquely positioned to capitalize on the rapidly increasing demand for

sustainable and environmentally friendly alternatives to traditional plastic products.

We primarily conduct our operations through two

product families:

Compostables ®

resins are compostable and bio-based, ecologically sound substitutes for petroleum-based plastics

targeting primarily compostable bags, single-use food service products and packaging applications.

We offer 17 commercial grades of Compostable resins in this product line.

These resins are compatible with existing manufacturing processes and

equipment making them a ready substitute for traditional petroleum-based resins.

We commercially introduced our Compostable line in November 2006.

Cereplast Sustainables resins are partially or fully bio-based, ecologically sound substitutes for fully petroleum-based plastics targeting

primarily durable goods, packaging applications.

We offer four commercial grades of Sustainable resins in this product line.

These resins are compatible with existing manufacturing processes and equipment, making them a ready substitute for

traditional petroleum-based resins.

We commercially introduced our Sustainable line in late 2007 under the name Cereplast Hybrid Resins ®

Cereplast Hybrid

products replace up to 55% of the petroleum content in conventional plastics with bio-based materials

such as industrial starches sourced from plants.

The Hybrid resins line is designed to offer similar properties to traditional polyolefins such as impact strength and heat deflection temperature, and is compatible with existing converter processes

and equipment.

The Cereplast Hybrid Resins ®

line provides a viable alternative for brand owners and converters

looking to partially replace petroleum-based resins in durable goods applications.

Hybrid resins address this need in a wide range of markets, including automotive, consumer goods, consumer electronics, medical, packaging, and construction.

commercially introduced our first grade of Hybrid resin, Hybrid 150, at the end of 2007.

We currently offer eight commercial grades in this product line.

Cereplast Algae

Plastic ®

In October of 2009 we announced that we have been developing a new technology to transform

algae into bioplastics and intend to launch a new resin family containing algae-based materials that will complement our existing line of resins.

The first commercial product with Cereplast Algae Plastic ®

resin is now being produced and sold as part of our Sustainables resin family.

We believe that it is important to

enhance research on non-food crops as we expect a surge in demand in bioplastics in future years, thus potentially creating pressure on food crops.

Algae are the first non-food crop project that we have introduced and our R&D department is

contemplating the development of additional non-food crop based materials in future years.

Our patent portfolio is currently comprised of five patents in the United States (U.S.), one

Mexican patent, and seven pending patent applications in the U.S.

Our trademark portfolio is currently comprised of 47 registered marks, 4 allowed marks and 12 pending applications in the U.S.

Net change in cash and cash equivalents for the year

Cash and cash equivalents at beginning of the year

Cash and cash equivalents at end of the year

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for income taxes

Cash paid for interest

NON-CASH INVESTING AND FINANCING ACTIVITIES

Written off notes receivable, related party

Written off due to related party

Due to related party converted to preferred stock

accompanying notes are an integral part of these consolidated financial statements.

YUAN HOLDING GROUP

TO FINANCIAL STATEMENTS

1 – Organization and basis of accounting

of Presentation and Organization

summary of significant accounting policies of Hong Yuan Holding Group.

(a development stage company) (“the Company”) is presented

to assist in understanding the Company’s financial statements.

These accounting policies conform to accounting principles generally

accepted in the United States of America and have been consistently applied in the preparation of the accompanying financial statements.

The Company has realized minimal revenues from its planned principal business purpose and, accordingly, is considered to be in its development

stage in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)

915 (SFAS No.

The Company has elected a fiscal year end of December 31.

were incorporated on September 29, 2001 in the State of Nevada under the name of Biocorp North America Inc.

On March 18, 2005, we filed

an amendment to our certificate of incorporation to change our name to Cereplast, Inc.

We developed and tried to commercialize proprietary

bio-based resins through two complementary product families:

Cereplast Compostables ® resins which are compostable, renewable,

ecologically sound substitutes for petroleum-based plastics, and Cereplast Sustainables™ resins (including the Cereplast Hybrid

Resins product line), which replaces up to 90 % of the petroleum-based content of traditional plastics with materials from renewable resources.

February 10, 2014, the Company, filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Bankruptcy Code

in the United States Bankruptcy Court for the Southern District of Indiana (the “Bankruptcy Court “).

On February 14, 2014,

the Company filed a motion in the Bankruptcy Court seeking to convert the Company’s Chapter 11 Case to a Chapter 7 bankruptcy case.

On March 27, 2014, the court granted the Company’s motion and on that date the Company’s Chapter 11 Case was converted to

a Chapter 7 case.

As a result, the Company adopted liquidation basis of accounting on the discontinued operations according to ASC 205-30

“Presentation of Financial Statements – Liquidation Basis of Accounting”, accordingly the accumulated deficit generated

prior to bankruptcy proceedings remained unadjusted.

January 31, 2014 the Board of Directors of Cereplast, Inc.

(the “Company”) approved a 1-for-50 reverse split (the “Reverse

Split) which was previously approved by the shareholders on April 5, 2013 and previously disclosed on Current Report Form 8-K filed on

April 5, 2013 .

February 3, 2014, Cereplast, Inc.

(the “Company”) filed a Certificate of Amendment to its Articles of Incorporation to effect

the reverse split (the “Reverse Split”), effective as of February 21, 2014.

March 22, 2019, the eight judicial District Court of Nevada appointed Custodian Ventures, LLC as custodian for Cereplast, Inc., proper

notice having been given to the officers and directors of Cereplast, Inc.

There was no opposition.

June 04, 2019, the Company filed a certificate of revival with the state of Nevada, appointing David Lazar as, President, Secretary,

Treasurer and Director.

October 4, 2019, the Company issued 50,000,000 shares of common stock to Custodian Ventures, LLC at par for shares valued at $ 50,000

in exchange for settlement of a portion of a related party loan for amounts advanced to the Company in the amount of $ 20,100 , and a note

receivable due to the Company in the amount of $ 29,900 .

The note bears an interest of 3 % and matures in 180 days following written demand

by the holder.

April 14, 2020, Custodian Ventures elected to convert the total amount of the 510 shares of Series A preferred stock into 510 shares

of common stock.

April 15, 2020, the Board of directors of the Company approved the withdrawal of the certificate of designation of 5,000,000 shares of

Series A Preferred stock filed with the Nevada Secretary of State on August 24, 2012, as amended by the Amendment to Certificate of Designation

after issuance of Class or Series filed with the Nevada Secretary of State on April 13, 2020.

May 1, 2020, the Company created 5,000,000 shares of series A-1 preferred stock with par value $ 0.001 .

On May 4, 2020, the Company issued

5,000,00 shares of the Series A-1 Preferred stock valued at $ 5,000 to Custodian Ventures LLC as repayment funds loaned to the Company.

change of control of the Company was completed on November 3, 2020, control was obtained by the sale of 50,000,000 common shares and

$ 5,000,000 Series A-1 Preferred Shares from Custodian Ventures, LLC to Xudong Li.

After November 3, 2020, the Company’s operations

are determined and structured by the new major shareholder.

November 18, 2020, the Company filed an amendment to its certificate of incorporation to change its name to Hong Yuan Holding Group.

accompanying financial statements are prepared on the basis of accounting principles generally accepted in the United States of America

The Company is a development stage enterprise devoting substantial efforts to establishing a new business, financial

planning, raising capital, and research into products which may become part of the Company’s product portfolio.

The Company has

not realized significant sales since inception.

A development stage company is defined as one in which all efforts are devoted substantially

to establishing a new business and, even if planned principal operations have commenced, revenues are insignificant.

accompanying financial statements have been prepared assuming the continuation of the Company as a going concern.

The Company has not

yet established an ongoing source of revenues sufficient to cover its operating costs and is dependent on debt and equity financing to

fund its operations.

Management of the Company is making efforts to raise additional funding until a registration statement relating

to an equity funding facility is in effect.

While management of the Company believes that it will be successful in its capital formation

and planned operating activities, there can be no assurance that the Company will be able to raise additional equity capital, or be successful

in the development and commercialization of the products it develops or initiates collaboration agreements thereon.

The accompanying

financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of

assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going

2 – Summary of significant accounting policies

Basis of Presentation and Consolidation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP).

The audited consolidated

financial statements include the financial condition and results of operations of our wholly-owned subsidiary, Cereplast International, S.A., a Luxembourg company organized during the year ended December 31, 2008, for the purpose of conducting

sales operations in Europe.

Intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in

the accompanying financial statements.

Significant estimates made in preparing these financial statements include the estimate of useful lives of property and equipment, the deferred tax valuation allowance and the fair value of stock options.

Actual results could differ from those estimates.

We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents.

At various times throughout the year, we may have exceeded federally insured limits.

December 31, 2012 and December 31, 2011, balances in our cash accounts exceeded federally insured limits of $0.25 million by approximately $0 and $3.4 million, respectively.

We have not experienced any losses in such accounts and we do not

believe we are exposed to any significant credit risk on cash and cash equivalents.

Concentration of Credit Risk

We had unrestricted cash totaling $0.2 million and $3.9 million at December 31, 2012 and December 31, 2011, respectively.

The unrestricted cash

and cash equivalents are held for working capital purposes.

We do not enter into investments for trading or speculative purposes.

Some of the securities in which we invest, however, may be subject to market risk.

This means that a change in

prevailing interest rates may cause the principal amount of the investment to fluctuate.

To minimize this risk, we intend to maintain our portfolio of cash equivalents and short-term investments in a variety of securities, including commercial

paper, money market funds, debt securities and certificates of deposit.

Due to the short-term nature of these investments, we believe that we do not have any material exposure to changes in the fair value of our investment portfolio as a result of

changes in interest rates.

We actively monitor changes in interest rates.

and Cash Equivalents

purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal

restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash

Stock-Based Compensation

Company accounts for stock-based compensation in accordance with ASC 718 Compensation - Stock Compensation (“ASC 718”).

718 addresses all forms of share-based payment (“SBP”) awards including shares issued under employee stock purchase plans

and stock incentive shares.

Under ASC 718 awards result in a cost that is measured at fair value on the awards’ grant date, based

on the estimated number of awards that are expected to vest and will result in a charge to operations.

earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares

Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased

to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and

if the additional common shares were dilutive.

The Company’s diluted loss per share is the same as the basic loss per share for

the years ended December 31, 2021 and 2020, as there are no potential shares outstanding that would have a dilutive effect.

tax expense is based on pretax financial accounting income.

Deferred tax assets and liabilities are recognized for the expected tax consequences

of temporary differences between the tax bases of assets and liabilities and their reported amounts.

Valuation allowances are recorded

to reduce deferred tax assets to the amount that will more likely than not be realized.

The Company recorded a valuation allowance against

its deferred tax assets as of December 31, 2021 and 2020.

Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions.

first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more

likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any.

The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement.

Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt)

of cash within one year.

Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes.

Accounting Pronouncements

December 2019, the FASB issued ASU No.

2019-12, Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity

in accounting standards.

The amendments in the ASU are effective for fiscal years beginning after December 15, 2020, including interim

periods therein.

Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements

have not yet been issued.

The Company is currently evaluating the effect, if any, that the ASU will have on its consolidated financial

3- Going Concern

We have incurred a net loss of $30.2 million for the year ended December 31, 2012, and $14.0 million for the year ended December 31, 2011, and

have an accumulated deficit of $87.1 million as of December 31, 2012.

Based on our operating plan, our existing working capital will not be sufficient to meet the cash requirements to fund our planned operating expenses, capital expenditures

and working capital requirements through December 31, 2013 without additional sources of cash.

This raises substantial doubt about our ability to continue as a going concern.

Our plan to address the shortfall of working capital is to generate additional financing through a combination of refinancing existing credit facilities, incremental product sales and raising additional

debt and equity financing.

We are confident that we will be able to deliver on our plans, however, there are no assurances that we will be able to obtain any sources of financing on acceptable terms, or at all.

If we cannot obtain sufficient additional financing in the short-term, we may be forced to curtail or cease operations or file for bankruptcy.

consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be forced to take such

Restricted Cash

had restricted cash in the amount of approximately $43,000 on December 31, 2012 and 2011.

The restricted cash amount consists of a Certificate of Deposit which supports a Letter of Credit for a leased facility.

Fair Value of Financial Instruments

The carrying amounts of our financial instruments as of December 31, 2012 and 2011, which include cash, accounts receivable, unbilled receivable, accounts payable, accrued expenses, loans payable and

convertible subordinated notes approximate their fair values due to the short-term nature of these instruments.

Accounts Receivable

We maintain an allowance for doubtful accounts for estimated losses that may arise if any of our customers are unable to make required

Management performs a quantitative and qualitative review of the receivables past due from customers on a monthly basis.

Quantitative factors include customers past due balance, prior payment history, recent sales activity and days

sales outstanding.

Qualitative factors include macroeconomic environment, current product demand, estimated inventory levels and customers financial position.

In certain cases, we may have access to repossess unsold products held at customer

locations as recourse for payment defaults.

The fair market value of these products are considered as potential recovery in estimating net losses from uncollectible accounts.

We record an allowance against uncollectible items for each customer after

all reasonable means of collection have been exhausted, and the potential for recovery is considered remote.

The allowance for doubtful accounts was approximately $15.0 million and $5.4 million as of December 31, 2012 and 2011, respectively.

Inventories are

stated at the lower of cost (first-in, first-out basis) or market and consist primarily of raw materials used in the manufacturing of bioplastic resins, finished bioplastic resins and finished goods.

Inventories are reviewed for excess and

obsolescence and a reserve is established accordingly.

For the years ended December 31, 2012, and 2011, inventories consisted of the following (in thousands):

Raw Materials

Bioplastic Resins

Finished Goods

Packaging Materials

Work In Process

Obsolescence Reserve

Inventories, Net

Property and Equipment

Property and equipment are stated at cost, and depreciation is computed on the straight-line method over the estimated useful lives of the assets.

The estimated useful lives of the assets are between five

and seven years.

Repairs and maintenance expenditures are charged to expense as incurred.

Property and equipment consist of the following (in thousands):

Construction In Progress

Furniture and Fixtures

Leasehold Improvements

Accumulated Depreciation

Property and Equipment, Net

Intangible Assets

Intangible assets are stated at cost and consist primarily of patents and trademarks.

Amortization is computed on the straight-line method over the estimated life of these assets, estimated to be between

five and fifteen years.

Intangible assets consist of the following (in thousands):

Intangible Assets

Accumulated Amortization

Intangible Assets, Net

Deferred Income Taxes

Deferred income taxes are provided using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred

tax liabilities are recognized for taxable temporary differences.

Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.

Deferred tax assets are reduced by a valuation allowance when, in

the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of

The benefit of a tax position is recognized in the financial statements in the period during which, based on all available

evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any.

Tax positions taken are not offset or aggregated with other

Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority.

portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and

penalties that would be payable to the taxing authorities upon examination.

Interest and penalties associated with unrecognized tax benefits

are classified as additional income taxes in the statement of income.

Revenue Recognition

We recognize revenue at the time of shipment of products, when the following fundamental criteria are met:

(i) persuasive evidence of an arrangement

(ii) delivery has occurred;

(iii) the price to the customer is fixed or determinable;

and (iv) collection of the sales price is probable.

Certain of our product sales are made to distributors under agreements with generally the same terms of sale and credit as all other customer agreements.

Revenue from product sales to our customers,

including our customers who are distributors, is recognized upon shipment provided the above noted fundamental criteria of revenue recognition are met.

The sale of products to our customers who are distributors is not contingent upon the distributor

selling the product to the end-user, and our current agreements with distributors do not have any rights of return.

Impairment of

Long-Lived Assets.

We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value

may not be recoverable.

Factors we consider include:

Significant changes in the operational performance or manner of use of acquired assets or the strategy for our overall business,

Significant negative market conditions or economic trends, and

Significant technological changes or legal factors which may render the asset obsolete.

We evaluate long-lived assets based upon an estimate of future undiscounted cash flows.

Recoverability of these assets is measured by comparing the

carrying value to the future net undiscounted cash flows expected to be generated by the asset.

An impairment loss is recognized when the carrying value exceeds the undiscounted future cash flows estimated to result from the use and eventual

disposition of the asset.

Future net undiscounted cash flows include estimates of future revenues and expenses which are based on projected growth rates.

We continually use judgment when applying these impairment rules to determine the timing of the

impairment tests, the undiscounted cash flows used to assess impairments and the fair value of a potentially impaired asset.

The reasonableness of our judgment could significantly affect the carrying value of our long-lived assets.

During fiscal year 2012, we experienced a significant decline in sales volume due to liquidity and sales resource constraints, which we believe to be

Our reduced production volume has not changed the manner in which we use our property and equipment, nor its physical condition.

Our current estimate of future net undiscounted cash flows indicates that the carrying value of our

long-lived assets is recoverable and therefore no impairment is indicated.

Comparative Figures

Certain of the prior year figures have been reclassified to conform to the presentation adopted in the current year.

CAPITAL STOCK

Capital Stock Issued

During the year ended December 31, 2012, we issued shares of common stock as follows:

In a private placement transactions made in reliance upon an exemption from registration under rule 506 of Regulation D promulgated under

Section 4(2) of the Securities Act, we issued 1,000,000 shares of common stock for net cash proceeds of $0.5 million.

We issued 196,122 shares of restricted common stock valued at $0.1 million to various employees and third parties for services rendered during the

We issued 27,234,587 shares of common stock valued at $1.2 million pursuant to settlement agreements.

We issued 16,099,811 shares of common stock valued at $4.0 million pursuant to exchange agreements.

During the year ended December 31, 2011, we issued shares of common stock as follows:

We issued 2,596,500 shares of common stock and 649,128 warrants with an exercise price of $6.35 for net proceeds of $12.3 million pursuant to a

securities purchase agreement dated January 26, 2011 under a private placement.

We issued 180,382 shares of restricted common stock valued at $0.7 million to various employees, directors, and third parties for services rendered

during the period.

We issued 4,062 shares of common stock valued at $20,000 pursuant to a settlement agreement.

We issued 35,000 shares of common stock valued at $155,400 pursuant to a warrant exercise.

In a private placement transactions made in reliance upon an exemption from registration under rule 506 of Regulation D promulgated under

Section 4(2) of the Securities Act, we issued 3,125,000 shares of common stock for net cash proceeds of $4.5 million.

Valuation Assumptions for Stock Options

During the year ended December 31, 2011, we

granted options to our employees to purchase an aggregate of 300,000 shares of our common stock, with estimated total grant-date fair values of $0.7 million.

We estimate that stock-based compensation for awards not expected to be exercised is $0.2

During the years ended December 31, 2012 and 2011, we recorded stock-based compensation related to stock options of $66,000 and $0.2 million, respectively.

The grant date fair value was estimated at the date of grant using the

Black-Scholes option pricing model, assuming no dividends and the following assumptions:

Average risk-free interest rate

Average expected life (in years)

Expected Volatility:

The fair values of stock based payments were valued using a volatility factor based on our historical stock prices.

Expected Term:

We elected to use the simplified method as discussed in SAB No.

107 to develop the estimate of the expected

Expected Dividend:

We have not paid any dividends and do not anticipate paying dividends in the foreseeable future.

Risk-Free Interest Rate:

We base the risk-free interest rate used on the implied yield currently available on U.S.

Treasury zero-coupon issues

with remaining term equivalent to the expected term of the options.

Stock Option Activity

Under the 2004 Employee Stock Option Plan adopted by our board of directors (the Plan), our board of directors may issue incentive and non-qualified stock options to our employees.

granted under the Plan generally expire at the end of five or ten years and vest in accordance with a vesting schedule determined by our board of directors, usually over three years from the grant date.

As of December 31, 2012, we have 34,375

shares available for future grants under the Plan.

We settle stock option exercises with newly issued shares of our common stock ( in thousands except, per share data):

Exercise Price

Outstandingbeginning of year

Granted at fair value

Cancelled/forfeited

Outstandingend of year

Options exercisable at year-end

The following table summarizes information about stock options as of December 31, 2012 ( in thousands, except per

share data ):

Options Outstanding

Options Exercisable

Range of Exercise Prices

$0.00 - $5.31

$5.32 - $22.40

The aggregate intrinsic value in the table above represents the total pretax intrinsic value, based on our closing stock

price of $0.02 at December 31, 2012 which would have been received by the option holders had all option holders exercised their options as of that date.

Preferred Stock

On August 24, 2012, we entered into a Stock Purchase Agreement

(SPA) with Ironridge Technology Co., a division of Ironridge Global IV, Ltd, for the sale of up to $5 million in shares of convertible redeemable Series A Preferred Stock (Series A Preferred Stock) at a price of $10,000 per

share of Series A Preferred Stock.

The closing of the transactions contemplates the fulfillment of certain closing conditions.

The initial closing with respect to the sale of 30 shares of Series A Preferred Stock occurred on August 24, 2012.

On August 24, 2012, we filed a Certificate of Designation of Preferences, Rights and Limitations of Series A Preferred Stock

(Certificate of Designation) with the Secretary of State of Nevada.

The Certificate of Designation provides that the Series A Preferred Stock ranks senior with respect to dividend and rights upon liquidation to the Companys common

stock and junior to all existing and future indebtedness.

Except as otherwise required by law, the Series A Preferred Stock shall have no voting rights.

The Certificate of Designation provides for the payment of cumulative dividends at a rate of

2.5% per annum when and if declared by the Board of Directors in its sole discretion.

Dividends and any Embedded Derivative Liability (as defined in the Certificate of Designation) may be paid in cash or free trading shares of the Company as

provided in the Certificate of Designation.

Unless we have received the approval of the holders of a majority of the Series A Preferred Stock

then outstanding, we shall not (i) alter or change adversely the powers, preferences or rights of the holders of the Series A Preferred Stock or alter or amend the Certificate of Designation;

(ii) authorize or create any class of stock

ranking senior as to distribution of dividends senior to the Series A Preferred Stock;

(iii) amend its certificate of incorporation in breach of any provisions of the Certificate of Designation;

increase the authorized number of Series A

accompanying financial statements have been prepared assuming the continuation of the Company as a going concern.

The Company has not

yet established an ongoing source of revenues sufficient to cover its operating costs and is dependent on debt and equity financing to

fund its operations.

Management of the Company is making efforts to raise additional funding until a registration statement relating

to an equity funding facility is in effect.

While management of the Company believes that it will be successful in its capital formation

and planned operating activities, there can be no assurance that the Company will be able to raise additional equity capital or be successful

in the development and commercialization of the products it develops or initiates collaboration agreements thereon.

The accompanying

financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of

assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going

4 – Related Party Transaction

October 04, 2019, the Company issued 50,000,000 shares of common stock to Custodian Ventures, LLC at par for shares valued at $ 50,000

in exchange for settlement of a portion of a related party loan for amounts advanced to the Company in the amount of $ 20,100 , and a note

receivable due to the Company in the amount of $ 29,900 .

The note bears an interest of 3 % and matures in 180 days following written demand

by the holder.

At December 31, 2020, the note receivable with a balance of $31,383 was written off because the collectability of the

note is unlikely after the change of control, the written off balance of the note consisted of the principal in the amount of $29,900

and interest receivable of $1,483.

May 4, 2020, the Company issued 5,000,00 shares of the Series A-1 Preferred stock valued at $ 5,000 to Custodian Ventures LLC as repayment

of funds loaned to the Company.

the year ended December 31, 2021, the Company’s current majority shareholder advanced $ 46,876 to the Company as working capital.

As of December 31, 2021 and 2020, the Company owed its current majority shareholders of $ 53,176 , and $ 6,300 , respectively.

are non-interest bearing and are due on demand.

5 – Common Stock

October 4, 2019, the Company issued 50,000,000

shares of common stock to Custodian Ventures,

LLC at par for shares valued at $ 50,000

in exchange for settlement of a portion of a

related party loan for amounts advanced to the Company in the amount of $ 20,100 ,

and a note receivable due to the Company in the amount of $ 29,900 .

The note bears an interest of 3 %

and matures in 180

days following written demand by the holder.

December 31, 2020, the note receivable with a balance of $ 31,383 was written off because the collectability of the note is unlikely after

the change of control.

April 14, 2020, Custodian Ventures elected to convert the total amount of the 510 shares of Series A preferred stock into 510 shares

of common stock.

May 27, 2021, the 510 shares of common stock issued to Custodian Ventures were cancelled.

of December 31, 2021, a total of 74,640,766 shares of common stock with par value $ 0.001 remain outstanding.

6 – Preferred Stock

(iv) liquidate, or wind-up the business and affaires of the Corporation or effect any Deemed Liquidation Event, as defined in the Certificate of Designation.

Upon any liquidation, dissolution or winding up of the Company, after payment or provision for payment of debts and other liabilities of the Company, the holders of Series A Preferred Stock shall be

entitled to receive, pari pasu with any distribution to the holders of Common Stock of the Company, an amount equal to $10,000 per share of Series A Preferred Stock plus any accrued and unpaid dividends.

Upon or after 18 years after the Issuance Date, the Corporation will have the right to redeem 100% of the

Series A Preferred Stock at a price of $10,000 per share plus any accrued and unpaid dividends (the Corporation Redemption Price).

We are also permitted to redeem the Series A Preferred Stock at any time after issuance as provided in the

Certificate of Designation.

The Certificate of Designation also provides for mandatory redemption if the Company determines to liquidate, dissolve or wind-up its business and affects or effect any Deemed Liquidation Event as such term is defined in

the Certificate of Designation.

The Series A Preferred Stock may be converted into share of common stock of the Company at the option of the

Company or the holder.

In the event of a conversion by the Holder at a price per share equal to the sum of (a) the Corporation Redemption Price plus the Embedded Derivative Liability (as defined in the Certificate of Designation) less any

dividends paid, multiplied by (b) the number of shares being converted, divided by (c) the conversion price of $0.25.

LOANS PAYABLE AND CONVERTIBLE SUBORDINATED NOTES

Venture Loan Payable

On December 21, 2010, we entered into a Venture Loan and Security Agreement (the Loan Agreement) with Compass Horizon Funding Company,

LLC (the Lender or Horizon).

The Loan Agreement provides for a total loan commitment of $5.0 million (the Loan) comprising of Loan A and Loan B, each in the amount of $2.5 million.

Loan A was funded at closing on

December 21, 2010 and matures 39 months after the date of advance.

Loan B was funded on February 17, 2011 and also matures 39 months after the date of advance.

We are obligated to pay interest per annum equal to the greater of (a) 12%

or (b) 12% plus the difference between (i) the one month LIBOR Rate in effect on the date preceding the funding of such loan by five business days and (ii) .30%.

We are required to make interest only payments for the first nine months

of each loan and equal payments of principal over the final thirty months of each loan.

We granted a security interest in all of our assets to the Lender.

In connection with Loan Agreements, we issued a seven year warrant to the Lender to purchase 140,000 shares of our common stock at an exercise price of $4.40.

The relative fair value of the warrants was

$0.2 million and is being recorded as interest expense over the term of the Loan.

We estimated the fair value of the warrants using the Black-Scholes option pricing model using the following assumptions:

December 22, 2010

Expected Life

Expected volatility

Risk-free interest rate

Also in connection with the Loan Agreement, we incurred $0.4 million of debt issue costs which were deferred and are

being amortized to interest expense over the term of the loan.

On June 29, 2012, we amended the Loan Agreement (the

Amendment) to change the Maturity Date to the earlier to occur of (i) August 1, 2014, or (ii) the date of acceleration of a Loan following an event of default or the date of prepayment of the Loan.

In addition, the

definition of Scheduled Payments was amended.

The definition of Events of Default was expanded to include the failure to pay certain late fees and amendment fees, which were agreed upon among the parties.

In connection with the Amendment, we issued a warrant to Horizon representing the right to purchase 225,000 shares of our common stock at an exercise

price of $0.01 per share (the new Warrant).

In addition, we issued a restated and amended warrant to purchase 140,000 shares of the Companys common stock at an exercise price of $0.26 (the amended Warrant).

fair value of the new Warrant was $117,000.

The difference between the fair value of the amended Warrant immediately before and after the modification was $32,000.

These amounts were recorded as a debt discount and are being recorded as interest

expense over the remaining term of the loan.

We estimated the fair value of the new and amended Warrants using the Black-Scholes option pricing model using the following assumptions:

Expected life

Expected volatility

Risk-free interest rate

Promissory Note

We signed a promissory note in the amount of $20,359 related to the purchase of an automobile in fiscal year 2010.

The note bears interest at 7.7% per annum and is to be repaid over a period of 60

This note was paid in full in January 2012.

Convertible Subordinated Notes

On May 24, 2011, we issued $12.5 million in aggregate principal amount of 7% Senior Subordinated Convertible Notes due June 1, 2016 (the Notes).

The Notes were issued pursuant to an

indenture (the Indenture), entered into between us and Wells Fargo Bank, National Association, as trustee, on May 24, 2011.

In connection with the issuance of the Notes, we entered into a Waiver to our Venture Loan and Security

Agreement with Horizon, dated May 18, 2011 pursuant to which Horizon provided its consent to the offering of the Notes and waived any restrictions in the Loan Agreement.

The Notes are senior subordinated unsecured obligations which will rank subordinate in right to payment to all of our existing and future senior secured indebtedness and bear interest at a rate of

7% per annum payable semi-annually in arrears on June 1 and December 1 of each year, commencing on December 1, 2011.

The Notes mature on June 1, 2016, with an early repurchase date of June 15, 2014 at the option of the

The Notes are convertible into shares of our common stock in accordance with the terms of the Notes and the Indenture, at the initial conversion rate of 172.4138 shares of our common stock per $1,000 principal amount of Notes, equivalent

to a conversion price of approximately $5.80 per share, subject to adjustment.

If the Notes are converted into shares of our common stock prior to June 2, 2014, an interest make-whole payment will be due based on the conversion date up until

June 2, 2014.

Upon a non-stock change in control, additional shares of our common stock may need to be issued upon conversion, with a maximum additional shares of 25.606 per $1,000 in principal amount of Notes being issuable thereunder,

for a total maximum of 198.0198 shares per $1,000 Note.

Certain customary anti-dilution provisions included in the Indenture and/or the Notes could adjust the conversion rate.

The conversion feature within the Notes is not considered to be a beneficial conversion feature within the meaning of Accounting Standards Codification (ASC) 470, Debt, and therefore all of

the gross proceeds from the Notes have been classified as long term debt.

In connection with the issue of the Notes, we incurred approximately $1.3 million of debt issue costs which were deferred and are being amortized to interest expense over the

term to the early repurchase date of June 15, 2014.

Also in connection with the issuance of the Notes, we entered into a Securities

Purchase Agreement dated May 18, 2011 pursuant to which we agreed to prepare and file a registration statement with the Securities and Exchange Commission (the SEC) registering the resale of the Notes and the shares of common stock

underlying the Notes.

The registration statement was declared effective on August 10, 2011.

On June 1, 2012, we entered into an

Exchange Agreement and a Forbearance Agreement with certain of the holders of our Notes.

Pursuant to the terms of the Exchange Agreement, certain of the holders agreed to exchange the Notes for shares at an exchange rate of one share of our common

stock for each $1.00 amount of the Notes exchanged.

Pursuant to the terms of the Forbearance Agreement, certain of the holders agreed to

forbear from exercising their rights to require us to pay accrued interest on June 1, 2012 until the earlier of December 1, 2012 or our failure to meet certain milestones.

In addition, pursuant to the terms of the Forbearance Agreement, we

agreed to amend the conversion rate of the Notes as set forth in the Indenture to provide for an effective conversion rate of $1.00.

At December 31, 2012 the Notes were convertible into 10,000,000 shares of our common stock.

Short-Term Convertible Notes

amount of Short-Term Convertible Notes Payable as of December 31, 2012 was $1,341,500, offset by discounts totalling $450,932.

These Notes are comprised of the following:

From June 1, 2012 through December 11, 2012, we issued Convertible Promissory Notes to Asher Enterprises, Inc.

(the Asher Notes)

with a remaining principal amount of $271,500 and bears 8% annual interest.

The Asher Notes have maturity dates between March 5, 2013 and September 13, 2013 with repayment options from 100% to 135% of the principal amount beginning 90 days

from each issuance date.

The holder has the option to convert the principal and accrued interest into shares of our Company stock at a conversion price calculated as 70% of the average of the five lowest trading prices for our common stock during

the 90 days prior to the conversion date.

Proceeds from the Asher Notes were used to fund Company operations.

On June 26, 2012, we issued a Promissory Note to JMJ Financial (the JMJ Note) of up to $1.1 million which bears 0% interest if repaid

The JMJ Note has a maturity date of 180 days from the effective date of each funding.

The principal amount due to JMJ Financial (JMJ) was prorated based on the consideration actually paid by JMJ, plus an approximate 10%

Original Issue Discount (OID) that is prorated based on the consideration actually paid by JMJ as well as any other interest or fees.

In addition, we will issue 100% warrant coverage for each amount funded under the JMJ Note.

addition, JMJ has the right, at any time at its election, to convert all or part of the outstanding and unpaid principal and any other fees, into shares of fully paid and non-assessable shares of our common stock.

The conversion price is a variable

calculation of 80% of the average of the three lowest closing prices for our common stock during the 20 days prior to the conversion date.

We are only required to repay the amount funded and we are not required to repay any unfunded portion of the

The consideration received as of December 31, 2012 is $400,000, in exchange for a principal amount of $440,000 and issuance of 1,886,792 warrants

(the JMJ Warrants) with an exercise price of $0.21, which may be reset if securities are issued for less than $0.21.

For financial accounting purposes, the JMJ Warrants and conversion feature embedded in the JMJ Note were considered

The fair values of the JMJ Warrants and JMJ Note conversion features were estimated at inception and recorded as a debt discount and is being recorded to interest expense over the life of the JMJ Note.

The derivatives will be valued at

each reporting date and the change in estimated fair value will result in a gain or loss recorded in the statement of operations.

The estimated grant date fair value of the JMJ Warrants and JMJ Note conversion were $198,113 and $187,195,

respectively.

We estimated the fair value of the JMJ Warrants and JMJ Note conversion features using the Black-Scholes option pricing model using the following assumptions:

June 26, 2012

August 9, 2012

Expected life

Expected volatility

Risk-free interest rate

The estimated fair value of the JMJ Warrants and JMJ Note conversion features was $615,300 and $156,470 at December 31, 2012.

We estimated the

fair value of the JMJ Warrants and JMJ Note conversion feature at December 31, 2012 using the Black-Scholes option pricing model using the following assumptions:

December 31, 2012

Expected life

Expected volatility

Risk-free interest rate

On October 15, 2012, we entered into an Exchange Agreement (the Exchange Agreement) with Magna Group LLC (Magna), pursuant

to which we agreed to issue to Magna convertible notes (the Magna Notes), in the aggregate principal amount of up to $4.6 million, in exchange for an equal amount of participation interests in certain secured promissory notes (the

Secured Notes) issued by us to Horizon to be acquired by Magna.

Pursuant to a participation purchase agreement dated as of October 15, 2012 (the Magna Purchase Agreement), Magna agreed to acquire, in tranches through on

or around February 15, 2013, participation interests in the Secured Notes from Horizon up to the maximum amount of the principal outstanding, together with accrued interest and fees.

The total issuances in 2012 were $1.0 million under the

Exchange Agreement, pursuant to which we issued a Magna Note in exchange for a participation interest in a Secured Note.

The Magna Notes bear interest at the rate of 6% per annum and mature 12 months after the date of issuance.

The Magna Notes

are convertible at the option of the holder at a conversion price equal to 75% of the average of the three lowest volume weighted average prices during the ten consecutive trading day period immediately prior to the date of conversion.

Notes contain standard default provisions and provisions for adjustment of the conversion price in the event of subsequent equity sales.

For financial accounting purposes, the conversion feature embedded in the Magna Notes were considered

The fair values of the Magna Notes conversion features were estimated at inception and recorded as a debt discount and is being recorded to interest expense over the life of the Magna Notes.

The derivatives will be valued at each

reporting date and the change in estimated fair value will result in a gain or loss recorded in the statement of operations.

The estimated fair value of the Magna Notes conversion were $198,113.

We estimated the fair value of the Magna Notes

conversion feature using the Black-Scholes option pricing model using the following assumptions:

October 15, 2012

November 8, 2012

Expected life

Expected volatility

Risk-free interest rate

The estimated fair value of the Magna Notes conversion features was $178,200 at December 31, 2012.

We estimated the fair value of the Magna Notes

conversion feature at December 31, 2012 using the Black-Scholes option pricing model using the following assumptions:

December 31, 2012

Expected life

Expected volatility

Risk-free interest rate

On October 15, 2012, we entered into a Note Purchase Agreement (the Hanover Purchase Agreement) with Hanover Holding I, LLC

(Hanover), pursuant to which Hanover agreed to purchase from us, and we agreed to sell to Hanover (subject to the terms and conditions set forth therein), an aggregate of $0.8 million of convertible promissory notes (the Hanover

Subject to the terms and conditions set forth in the Hanover Purchase Agreement, the Hanover Notes will be sold in tranches of $100,000 through on or around February 15, 2013.

The total issuances in 2012 were $0.3 million under

the Hanover Purchase Agreement.

The Hanover Notes bear interest at the rate of 12% per annum and mature eight months after issuance.

The Hanover Notes are convertible at the option of the holder at a price equal to 75% of the average of the

three lowest volume weighted average prices during the ten consecutive trading day period immediately prior to the date of conversion.

The Hanover Notes contain standard default provisions and provisions for adjustment for the conversion price in

the event of subsequent equity sales.

For financial accounting purposes, the conversion feature embedded in the Hanover Notes were considered derivatives.

The fair values of the Hanover Notes conversion features were estimated at inception and

recorded as a debt discount and is being recorded to interest expense over the life of the Hanover Notes.

The derivatives will be valued at each reporting date and the change in estimated fair value will result in a gain or loss recorded in the

statement of operations.

The estimated fair value of the Hanover Notes conversion were $204,498.

We estimated the fair value of the Hanover Notes conversion feature using the Black-Scholes option pricing model using the following assumptions:

October 15, 2012

November 8, 2012

December 19, 2012

Expected life

Expected volatility

Risk-free interest rate

The estimated fair value of the Hanover Notes conversion features was $143,000 at December 31, 2012.

We estimated the fair value of the Hanover

Notes conversion feature at December 31, 2012 using the Black-Scholes option pricing model using the following assumptions:

December 31, 2012

Expected life

Expected volatility

Risk-free interest rate

Mortgage Payable

Effective October 24, 2011, Cereplast Italia S.p.A (Cereplast Italia), our wholly owned subsidiary, completed its acquisition of an industrial plant and the real estate on which the

industrial plant is located in Cannara, Italy.

The Deed of Sale between Cereplast Italia and Societa Regionale Per Lo Sviluppo Economico DellUmbria Sviluppumbria S.p.A, provided for an aggregate purchase price of approximately $6.5

The acquisition had previously been secured by a mortgage loan with Banca Monte Dei Paschi Di Sienna S.p.A for the principal of $4.5 million.

Effective October 25, 2012, Cereplast Italia renegotiated the terms of the acquisition of the industrial plant located in Cannara, Italy with Societa Regionale Per Lo Sviluppo Economico

DellUmbria Sviluppumbria S.p.A In connection with our renegotiation, the sale of the land was rescinded and Cereplast Italia retained the existing building, reducing the value of the purchase price to approximately $4.2 million.

exchange, Cereplast Italia rescinded the Mortgage loan with Banca Monte Dei Paschi Di Sienna S.p.A for the principal of $4.5 million in paying a limited rescission fee and cancelled all credit facility.

Sviluppumbria S.p.A accepted to carry over a

Note secured by the building, in amount of $3.2 million with an annual interest rate of 5.5%, until a new lender is secured.

During that period of time Cereplast Italia agreed to negotiate the refurbishment of the building by a third party at no

Svilluppumprbia requested Cereplast Italia to represent a plan of development to occur within a longer period of time.

We currently operate out of El Segundo, California, Seymour, Indiana and Bönen, Germany.

The leases underlying these three

facilities are summarized below:

California Facility The El Segundo facility consists of approximately 5,475 square feet of

corporate office space.

The lease commenced on March 1, 2010 and has a term of five years.

The lease was subsequently amended on April 1, 2011 to add additional office space.

The lease term relating to the additional office space expires

on May 31, 2013.

Our current monthly rent is $13,124, with 3% annual escalation.

Indiana Facility The Seymour facility

consists of approximately 105,000 square feet used as a manufacturing and distribution facility for our products.

The lease commenced in January 2008, with a ten year term expiring in January 2018.

Our current monthly rent is $25,000.

Bönen Facility The Bönen facility consists of approximately 1,000 square feet of corporate office space.

The facility is subject

to a lease with monthly rents of approximately $2,000 expiring in December 2018.

MAJOR CUSTOMERS AND FOREIGN SALES

The following customers accounted for 10% or more of net revenue in the periods presented:

Year Ended December 31,

Our net sales were made up of sales to customers in the following geographic regions ( in thousands ):

October 4, 2019, the Company issued 510 shares of Series A Preferred stock to Custodian Ventures, LLC at par for shares valued at $ 510

in exchange for settlement of a portion of a related party loan for amounts advanced to the Company in the amount of $ 510 .

April 14, 2020, Custodian Ventures elected to convert the total amount of the 510 shares of Series A preferred stock into 510 shares

of common stock.

April 15, 2020, the Board of directors of the Company approved the withdrawal of the certificate of designation of 5,000,000 shares of

Series A Preferred stock filed with the Nevada Secretary of State on August 24, 2012, as amended by the Amendment to Certificate of Designation

after issuance of Class or Series filed with the Nevada Secretary of State on April 13, 2020.

May 1, 2020, the Company created 5,000,000 shares of series A-1 preferred stock with par value $ 0.001 .

On May 4, 2020, the Company issued

5,000,000 shares of the Series A-1 Preferred stock valued at $ 5,000 to Custodian Ventures LLC as repayment funds loaned to the Company .

of December 31, 2021, a total of 5,000,000 shares of Series A-1 preferred stock with par value $ 0.001 remain outstanding.

taxes represent the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial

reporting purposes.

Temporary differences result primarily from the recording of tax benefits of net operating loss carry forwards.

of December 31, 2021, the Company has an insufficient history to support the likelihood of ultimate realization of the benefit associated

with the deferred tax asset.

Accordingly, a valuation allowance has been established for the full amount of the net deferred tax asset.

Company’s effective income tax rate differs from the amount computed by applying the federal statutory income tax rate to loss

before income taxes for the years ended December 31, 2021 and 2020 as follows:

OF PRETAX INCOME FROM CONTINUING OPERATIONS

Year Ended December 31,

North America

International

We are subject to U.S.

and California income tax.

Subject to limited statutory exceptions, we are no longer subject to federal, state

and local or non-U.S.

income tax examinations by tax authorities for years before 2009.

We are not presently liable for any income taxes nor are we undergoing any tax examinations by the Internal Revenue Service.

No Deferred Tax Assets or Deferred

Tax Liabilities are included in our balance sheets at December 31, 2012 or December 31, 2011.

Our policy is to recognize interest

accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.

DEFERRED TAX BENEFIT

At December 31, 2012, we have available federal and state cumulative net operating loss carry forwards of ($49.4 million), which

expire at various dates from 2013 through 2032.

The differences between our effective income tax rate and the statutory federal rate for the

years ended December 31, 2012 and 2011 relate primarily to losses incurred for which no tax benefit was recognized, due to the uncertainty of realization.

The valuation allowance was $27.0 million and $16.3 million at December 31, 2012 and

2011, respectively.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to significant annual limitations.

Should a change in ownership

occur, net operating loss carryforwards may be limited as to use in future years.

A reconciliation of income tax expense that would result

from applying the U.S.

Federal and State rate of 39% to pre-tax income from continuing operations for the years ended December 31, 2012 and 2011, with federal income tax expense presented in the financial statements is as follows (in

Income tax benefit computed at U.S.

Federal statutory rate (34%)

State income taxes, net of benefit federal taxes

Stock for Services

Allowance for Doubtful Accounts

Inventory Reserve

Deferred Loan Costs

Research & Development Credit

Loss on Extinguishment of Debt

Loss on Derivative Valuation

Amortization of Debt Discount

Less Valuation Allowance

Income Tax Expense

The deferred income tax benefit at December 31, 2012 and 2011 reflects the impact of temporary differences between

the amounts of assets and liabilities recorded for financial reporting purposes and such amounts as measured in accordance with tax laws.

The items, which comprise a significant portion of deferred tax assets and liabilities, are approximately as

follows (in thousands):

Deferred Tax Assets:

NOL Carryover

R&D Carryover

Capital Loss Carryover

Contribution Carryover

Allowance for Doubtful Accounts

Inventory Reserve

Deferred Tax Liabilities:

Deferred Loan Costs

Less Valuation Allowance

Income Tax Expense

COMMON STOCK WARRANTS

In connection with the registered direct offering of 3,125,000 Units effective November 2011, we issued warrants to purchase 2,343,750

of our common stock.

The per share exercise price of the warrants is $2.20.

The warrants are exercisable at any time on or after the date that is 180 days after the initial issuance on the date of closing and will expire on a date that is five years

from the date of closing.

In connection with the issue of 2,596,500 shares of common stock to accredited investors pursuant to the Securities

Purchase Agreement entered into on January 26, 2011, we issued warrants to purchase 649,128 shares of the our common stock.

The warrants have an exercise price of $6.35 per share and are exercisable for a period of five years commencing

August 1, 2011.

In connection with the issue of 1,000,000 shares of common stock pursuant to a Subscription Agreement entered into

on April 30, 2012, we issued a warrant to purchase 100,000 shares of our common stock for offering costs.

The warrants have an exercise price of $0.50 per share and are exercisable for a period of seven years.

In connection with the Amendment with Compass Horizon Funding Company, LLC, we issued a warrant representing the right to purchase 225,000 shares of our

common stock at an exercise price of $0.01 per share.

In addition, we issued a restated and amended warrant to purchase 140,000 shares of the Companys common stock at an exercise price of $0.26.

In connection with our JMJ Note, we issued a warrant to purchase 1,886,792 shares of our common stock.

The warrants had an initial exercise price of

$0.21 per share and are exercisable for a period of four years.

The warrants also contained a reset provision that was triggered upon conversion of debts during the fourth quarter of 2012.

As a result, there were a total of 30,769,231 warrants with

an exercise price of $0.013 outstanding in connection with the JMJ Note as of December 31, 2012.

A summary of warrant activity for the

period ending December 31 is as follows (in thousands except per share data):

Exercise Price

OutstandingJanuary 1,

OutstandingDecember 31,

Warrants exercisable at end of period

RELATED PARTY TRANSACTIONS

During the years ended December 31, 2012 and 2011, we had no related party transactions.

CAPITAL LEASE OBLIGATIONS

Future payments on capital lease obligations are as follows (in thousands):

Twelve months ending December 31:

Total future minimum lease payments

SUBSEQUENT EVENTS

We have issued 147 shares of Series A Preferred Shares to Ironridge since December 31, 2012, in accordance with the SPA in

exchange for $0.8 million.

As of April 5, 2013, we have issued the 269.2 million shares of common stock since December 31,

2012, as follows:

63.2 million shares in connection with the settlement of our outstanding accounts payable balances.

120.7 million shares pursuant to our exchange agreements.

50.2 million shares pursuant to conversion of our Series A Preferred Stock.

35.1 million shares pursuant to our short term convertible notes.

On April 5, 2013, Cereplast, Inc.

(the Company) held a Special Meeting of Shareholders (the Special Meeting).

A total of 257,168,109 shares of common stock, representing

91.05 % of the shares outstanding and eligible to vote and constituting a quorum, were represented in person or by valid proxies at the Special Meeting.

The final results for each of the matters submitted to a vote of shareholders at the

Special Meeting as set forth in the Proxy Statement are as follows:

The amendment to the

Articles of Incorporation of the Company to effect a reverse stock split of the Companys common stock, at a ratio of not less than one-for-two and not greater than one-for-fifty, with the exact ratio to be set within such range in the

discretion of the Board of Directors without further approval or authorization of the Companys shareholders, provided that the Board of Directors determines to effect the reverse stock split and such amendment is filed with the Secretary of

State of Nevada no later than one year from the date of the Special Meeting was approved by the shareholders and received the votes set forth in the table below:

The amendment to the Articles of Incorporation of the Company to

increase the Companys authorized shares of common stock from 495,000,000 to 2,000,000,000 was approved by the shareholders and received the votes set forth in the table below:

EXHIBIT INDEX

Purchase Agreement dated as of January 25, 2013 between the Holders of the Companys 7% Convertible Senior subordinated Notes due 2016 and IBC Funds LLC

Employment agreement between Michael Okada and Cereplast, Inc.

dated February 5, 2013.

Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of the Principal Executive Officer pursuant to 18 U.S.C.

Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Certification of the Principal Financial Officer pursuant to 18 U.S.C.

Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

XBRL Instance Document

XBRL Taxonomy Extension Schema

XBRL Taxonomy Extension Calculation Linkbase

XBRL Taxonomy Extension Definition Linkbase

XBRL Taxonomy Extension Label Linkbase

XBRL Taxonomy Extension Presentation Linkbase

Income tax benefit at federal statutory rate

Change in valuation allowance

Income tax expenses benefit

components of deferred taxes consist of the following at December 31, 2021 and 2020:

OF DEFERRED TAX ASSETS AND LIABILITIES

Net operating loss carryforwards

valuation allowance

( 20,436,959 )

( 20,427,241 )

Net deferred tax assets

Tax Positions

associated with unrecognized tax benefits are classified as income tax, and penalties are classified in selling, general and administrative

expenses in the statements of operations.

For December 31, 2021 and 2020, the Company had no unrecognized tax benefits and related interest

and penalties expenses.

Currently, the Company is not subject to examination by major tax jurisdictions.

8 – Subsequent Event

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 it does not have any material subsequent events to disclose in these

financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures