What changed in this filing

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Item 1. Financial Statements

2021-08-16 compared with 2021-05-14 · 528 added, 668 removed, 193 unchanged (86% of the section changed)

ITEM 1 Financial Statements

HEALTHY EXTRACTS INC.

CONSOLIDATED BALANCE SHEETS

EXTRACTS, INC.

BALANCE SHEETS

CURRENT ASSETS

16 unchanged sentences

STOCKHOLDERS EQUITY (DEFICIT)

Preferred stock, $0.001 par value, 75,000,000 shares authorized,

none and none shares issued and outstanding, respectively

Common stock, $0.001 par value, 2,500,000,000 shares authorized,

317,302,410 and 121,610,085 shares issued and outstanding, respectively

Preferred stock, $ 0.001 par value,

75,000,000 shares authorized, none and none shares issued and outstanding, respectively

Common stock, $ 0.001 par value,

2,500,000,000 shares authorized, 318,302,410 and 121,610,085 shares issued and outstanding, respectively

Additional paid-in capital

4 unchanged sentences

TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)

The accompanying notes are an integral part

of these unaudited consolidated financial statements.

HEALTHY EXTRACTS INC.

CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDING MARCH 31, 2021

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

EXTRACTS, INC.

STATEMENT OF OPERATIONS

FOR THE MONTH ENDING JUNE 30, 2021

FOR THE 3 MONTHS ENDED

FOR THE 6 MONTHS ENDED

COST OF REVENUE

1 unchanged sentence

General and administrative

Impairment of Assets

Total operating expenses

4 unchanged sentences

SBA Loan Forgiveness

Impairment of Assets

Gain on sale of asset

Total other income (expense)

( 1,009,581 )

Net gain/(loss) before income tax provision

( 3,385,173 )

( 1,851,387 )

( 2,760,363 )

NET GAIN/(LOSS)

$ ( 557,751 )

$ ( 3,385,173 )

$ ( 1,851,387 )

$ ( 2,760,363 )

Loss per share - basic and diluted

Weighted average number of shares outstanding - basic and diluted

The accompanying notes are an integral part

of these unaudited consolidated financial statements.

HEALTHY EXTRACTS INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

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

EXTRACTS, INC.

STATEMENT OF CASH FLOWS

FOR THE MONTHS

2 unchanged sentences

$ ( 1,851,387 )

Adjustments to reconcile net loss to net cash

used in operating activities:

$ ( 2,760,363 )

Adjustments to reconcile net loss to net cash used in

operating activities:

Depreciation and amortization

12 unchanged sentences

Net Cash used in Operating Activities

( 1,844,956 )

Cash Flows from Investing Activities:

Purchase of fixed assets

Purchase of BergaMet

Purchase of UBN

Payments of note receivable

1 unchanged sentence

Cash Flows from Financing Activities:

Purchase of BergaMet

Purchase of UBN

Proceeds from issuance of common stock

Proceeds from issuance of convertible debt,

( 1,341,876 )

Payments for repayment of convertible debt

6 unchanged sentences

Cash at end of period

The accompanying notes are an integral part

of these unaudited consolidated financial statements.

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

HEALTHY EXTRACTS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'

EQUITY (DEFICIT)

FOR THE YEAR ENDING DECEMBER 2021 AND 2020

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT)

FOR THE MONTHS ENDING JUNE 2021 AND 2020

Preferred Stock

1 unchanged sentence

$ ( 10,380,123 )

$ ( 865,610 )

Issuance of shares acquisition of UBN

7 unchanged sentences

Net (loss) gain for the period

( 2,576,375 )

Balance - December 31, 2020

7 unchanged sentences

Issuance of common stock for services

Net (loss) gain for the period

Balance - December 31, 2021

( 1,851,387 )

The accompanying notes are an integral part

of these unaudited consolidated financial statements.

HEALTHY EXTRACTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 and 2020

NOTE 1 –

( 1,851,387 )

Balance - June 30, 2021

$ ( 14,807,885 )

accompanying notes are an integral part of these financial statements.

EXTRACTS INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

30, 2021 and 2020

1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Grey Cloak Tech Inc.

(the “Company”)

was incorporated in the State of Nevada on December 19, 2014.

The Company has additionally acquired BergaMet NA, LLC and Ultimate

Brian Nutrients, LLC which markets and sells heath supplemental products.

On October 23, 2020, we changed our name from Grey Cloak

Extracts Inc.

(the Company) was incorporated in the State of Nevada on December 19, 2014 as Grey Cloak Tech Inc.

23, 2020 , we changed our name from Grey Cloak Tech Inc.

to Healthy Extracts Inc.

to more accurately reflect our business.

We are currently waiting for The Financial Industry

Regulatory Authority (FINRA) to issue our Company a new ticker symbol before we file our 8-K for this change.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING

Basis of Presentation

The accompanying unaudited consolidated

financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America

for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities

and Exchange Commission (“SEC”).

Accordingly, they do not contain all information and footnotes required by accounting

principles generally accepted in the United States of America for annual financial statements.

In the opinion of the Company’s

management, the accompanying unaudited consolidated financial statements contain all the adjustments necessary (consisting only

of normal recurring accruals) to present the financial position of the Company as of March 31, 2021 and the results of operations

and cash flows for the periods presented.

The results of operations for the year ended March 31, 2021 are not necessarily indicative

of the operating results for the full fiscal year or any future period.

These unaudited consolidated financial statements should

be read in conjunction with the financial statements and related notes thereto included in the Company’s form 10-K for the year ended December 31, 2020 filed with the SEC on February

Use of Estimates

The preparation of financial statements

in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities

and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues

and expenses during the reporting period.

has acquired BergaMet NA, LLC and Ultimate Brian Nutrients, LLC which market and sell heath supplemental products.

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted

in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X

of the United States Securities and Exchange Commission (SEC).

Accordingly, they do not contain all information and footnotes

required by accounting principles generally accepted in the United States of America for annual financial statements.

In the opinion

of the Companys management, the accompanying unaudited consolidated financial statements contain all the adjustments necessary

(consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2021 and the results of

operations and cash flows for the periods presented.

The results of operations for the six months ended June 30, 2021 are not necessarily

indicative of the operating results for the full fiscal year or any future period.

These unaudited consolidated financial statements

should be read in conjunction with the financial statements and related notes thereto included in the Companys form 10-K for the

year ended December 31, 2019 filed with the SEC on August 10, 2020.

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

amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the

reported amount of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Cash includes cash in banks, money market

funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible

to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.

HEALTHY EXTRACTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 and 2020

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Accounts Receivables

Accounts receivables are recorded at the

invoice amount and do not bear interest.

Inventories consist of health supplements

held for sale in the ordinary course of business.

The Company uses the weighted average cost method to value its inventories at

the lower of cost or market.

An allowance for inventory was established in 2018 and is evaluated each quarter to determine if all

items are still sellable due to expiration dates.

As of March 31, 2021 and 2020, the total of inventory which was written off as

an inventory allowance was $1,808,904 and $748,972.

Property and Equipment

The Company’s property and equipment

are recorded at cost and depreciated using the straight-line method over the useful lives of the assets, generally from three to

Upon sale or disposal of property and equipment, the related asset cost and accumulated depreciation or amortization

are removed from the respective accounts and any gain or loss is reflected in current operations.

Indefinite-Lived Intangible Assets

Indefinite-lived intangible assets established

in connection with business combinations consist of patents, trademarks, and trade names.

The impairment test for identifiable

indefinite-lived intangible assets consists of a comparison of the estimated fair value of the intangible asset with its carrying

includes cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception,

which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk

of loss in value.

receivables are recorded at the invoice amount and do not bear interest.

consist of health supplements held for sale in the ordinary course of business.

The Company uses the weighted average cost method to

value its inventories at the lower of cost or market.

An allowance for inventory was established in 2018 and is evaluated each quarter

to determine if all items are still sellable due to expiration dates.

As of June 30, 2021 and 2020, the total of inventory which was

written off as an inventory allowance was $ 1,8543,758 and $ 748,972 .

and Equipment

Companys property and equipment are recorded at cost and depreciated using the straight-line method over the useful lives of the

assets, generally from three to seven years.

Upon sale or disposal of property and equipment, the related asset cost and accumulated

depreciation or amortization are removed from the respective accounts and any gain or loss is reflected in current operations.

Indefinite-Lived

Intangible Assets

Indefinite-lived

intangible assets established in connection with business combinations consist of patents, trademarks, and trade names.

The impairment

test for identifiable indefinite-lived intangible assets consists of a comparison of the estimated fair value of the intangible asset

with its carrying value.

If the carrying value exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

As of March 31, 2021, the Company believes

that based upon qualitative factors, no impairment of indefinite-lived intangible assets is necessary.

In accordance with Goodwill and Other

Intangible Assets, goodwill is defined as the excess of the purchase price over the fair value assigned to individual assets acquired

and liabilities assumed and is tested for impairment at the reporting unit level on an annual basis in the Company's fourth fiscal

quarter or more frequently if indicators of impairment exist.

The performance of the test involves a two-step process.

step of the impairment test involves comparing the fair value of the Company's reporting units with each respective reporting unit's

carrying amount, including goodwill.

With the combination of Ultimate Brain Nutrients on April 3, 2020 the Company added a purchasing value of $ 315,604 in patents to its

balance sheet.

of June 30, 2021, the Company believes that based upon qualitative factors, no impairment of indefinite-lived intangible assets is necessary.

accordance with Goodwill and Other Intangible Assets, goodwill is defined as the excess of the purchase price over the fair value assigned

to individual assets acquired and liabilities assumed and is tested for impairment at the reporting unit level on an annual basis in

the Companys fourth fiscal quarter or more frequently if indicators of impairment exist.

The performance of the test involves a two-step

The first step of the impairment test involves comparing the fair value of the Companys reporting units with each respective

reporting units carrying amount, including goodwill.

The fair value of reporting units is generally determined using the income approach.

carrying amount of a reporting unit exceeds the reporting unit's fair value, the second step of the goodwill impairment test is

If the carrying amount of a reporting unit exceeds the reporting units fair value, the second step of the goodwill impairment test is

performed to determine the amount of any impairment loss.

The second step of the goodwill impairment test involves comparing the

implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill.

The Company sees the goodwill to

have a ten-year useful life.

No goodwill impairment indicators were present, for the goodwill listed on the books as of March 31,

2021, after working through our analysis of goodwill during the year ending March 31, 2021.

HEALTHY EXTRACTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 and 2020

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Company has determined that the method

applied represents the fair value of the asset group principally because the valuation of the intangibles with the asset group

is based on the anticipated cash flows related to the revenue stream from its customers.

The asset group excludes goodwill, long

term non-operational assets and liabilities and cash.

As such, the principal value from the asset group relates to the cash inflows

from its customers and the cash outflows required to service these customers.

The fair value for the asset group consists of the

· Fair value of net revenues:

The second step of the goodwill impairment test involves comparing the implied

fair value of the reporting units goodwill with the carrying amount of that goodwill.

The Company sees the goodwill to have a ten-year

No goodwill impairment indicators were present, for the goodwill listed on the books as of June 30, 2021, after working

through our analysis of goodwill during the year ending June 30, 2021.

Company has determined that the method applied represents the fair value of the asset group principally because the valuation of the

intangibles with the asset group is based on the anticipated cash flows related to the revenue stream from its customers.

The asset group

excludes goodwill, long term non-operational assets and liabilities and cash.

As such, the principal value from the asset group relates

to the cash inflows from its customers and the cash outflows required to service these customers.

The fair value for the asset group

consists of the following:

value of net revenues:

computed using the income approach.

The key input to these computations is the anticipated cash inflows from customers.

These valuations

include 100% of the cash inflows related to the customer base, and taking cash outflows into consideration.

· Fair value of working

capital (including accounts receivable, inventory, accrued expenses, and accounts payables).

Due to the short-term nature of the

working capital, book value has been determined to be fair value.

These valuations include 100% of the cash inflows related to the customer base, and taking cash outflows into consideration.

value of working capital (including accounts receivable, inventory, accrued expenses, and accounts payables).

Due to the short-term nature

of the working capital, book value has been determined to be fair value.

These accounts represent either avoided future outflows (inventory,

prepaids) or future cash flows (accrued expense, AP and AR) related to customer sales.

· Fair value of five years

of revenue (2020 to 2024):

value of five years of revenue (2021 to 2025):

we discounted our cash flows to the anticipated cash projected to be received.

We also projected the

anticipated cash outflows required to service these customers.

If the asset group was to be valued as a whole, we would expect

an income approach based on the revenues being generated from the customers and expenses required to service those customers, appropriately

adjusted for the working capital position.

projected the anticipated cash outflows required to service these customers.

If the asset group was to be valued as a whole, we would

expect an income approach based on the revenues being generated from the customers and expenses required to service those customers,

appropriately adjusted for the working capital position.

The sum of these values reasonably approximates this approach.

The Company’s revenue streams align

directly with the intangibles, which were recorded as a result of the BergaMet acquisition in fiscal 2019.

For purposes of the

Step 2 recoverability test under ASC 360 subsection 2.3., the net revenues from BergaMet customers base were used.

stream fairly reflects anticipated future cash flows;

accordingly, the intangibles associated with these revenue streams have been

tested with the expected cash flows.

Due to the purchase of Ultimate Brian

Nutrients, LLC being a related party transaction and the new division recording no revenue as of June 30, 2020, the Company found

the goodwill to be impaired.

Due to the impairment the Company expensed the goodwill related to the purchase as of June 30, 2020.

Revenue Recognition

Beginning January 1, 2019, the Company

implemented ASC 606, Revenue from Contracts with Customers.

Although the new revenue standard is expected to have an

immaterial impact, if any, on our ongoing net income, we did implement changes to our processes related to revenue recognition

and the control activities within them.

These included the development of new policies based on the five-step model provided

in the new revenue standard, ongoing contract review requirements, and gathering of information provided for disclosures

The Company recognizes revenue and cost

of goods sold from product sales or services rendered when control of the promised goods are transferred to our clients in an amount

that reflects the consideration to which we expect to be entitled in exchange for those goods and services.

To achieve this

core principle, we apply the following five steps:

identify the contract with the client, identify the performance obligations

in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and

recognize revenues when or as the Company satisfies a performance obligation.

The Company records revenue upon shipment

of the products to the customers.

HEALTHY EXTRACTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 and 2020

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Companys revenue streams align directly with the intangibles, which were recorded as a result of the BergaMet acquisition in fiscal

For purposes of the Step 2 recoverability test under ASC 360 subsection 2.3., the net revenues from BergaMet customers base were

The revenue stream fairly reflects anticipated future cash flows;

accordingly, the intangibles associated with these revenue streams

have been tested with the expected cash flows.

to the purchase of Ultimate Brian Nutrients, LLC being a related party transaction and the new division recording no revenue as of June

30, 2020, the Company found the goodwill to be impaired.

Due to the impairment the Company expensed the goodwill related to the purchase

as of June 30, 2020.

January 1, 2019, the Company implemented ASC 606, Revenue from Contracts with Customers.

Although the new revenue standard

is expected to have an immaterial impact, if any, on our ongoing net income, we did implement changes to our processes related to revenue

recognition and the control activities within them.

These included the development of new policies based on the five-step model

provided in the new revenue standard, ongoing contract review requirements, and gathering of information provided for disclosures

Company recognizes revenue and cost of goods sold from product sales or services rendered when control of the promised goods are transferred

to our clients in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services.

Our recognizes revenue policy includes all sales channels which include the Company website channel or any other selling channel

like Amazon, doctors offices, and walk-in sales.

To achieve this core principle, we apply the following five steps:

the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction

price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation.

Company recognizes revenue and cost of goods sold from each sale upon shipment of the promised goods to the customers.

Concentration

There is no concentration

of revenue for the months ended March 31, 2020 and the months ended March 31, 2021 because the revenue was earned from multiple

The Company accounts for income taxes

using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes”.

The asset and liability

method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences

between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards.

tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences

are expected to reverse.

The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed

more likely than not to be realized.

For the period ending March 31, 2020 and March 31, 2021, the Company did not have any amounts

recorded pertaining to uncertain tax positions.

Fair Value Measurements

The Company adopted the provisions of

ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting

pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

The estimated fair value of certain financial

instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because

of the short-term nature of these instruments.

ASC 820 defines fair value as the exchange

price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous

market for the asset or liability in an orderly transaction between market participants on the measurement date.

ASC 820 also establishes

a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable

inputs when measuring fair value.

is no concentration of revenue for the months ended June 30, 2020 and the months ended June 30, 2021 because the revenue was earned from

multiple customers.

Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Accounting for Income Taxes.

The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences

of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit

carry forwards.

Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect

when the differences are expected to reverse.

The Company records a valuation allowance to reduce deferred tax assets to the amount that

is believed more likely than not to be realized.

For the period ending June 30, 2020 and June 30, 2021, the Company did not have any

amounts recorded pertaining to uncertain tax positions.

Value Measurements

Company adopted the provisions of ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value

as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value

measurements.

estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which

approximates their fair values because of the short-term nature of these instruments.

820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the

principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement

ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize

the use of unobservable inputs when measuring fair value.

ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 —

1 — quoted prices in active markets for identical assets or liabilities

Level 2 —

2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 —

3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

The derivative liability in connection

with the conversion feature of the convertible debt, classified as a Level 3 liability, is the only financial liability measure

at fair value on a recurring basis.

The change in Level 3 financial instrument

is as follows:

derivative liability in connection with the conversion feature of the convertible debt, classified as a Level 3 liability, is the only

financial liability measure at fair value on a recurring basis.

change in Level 3 financial instrument is as follows:

Schedule of Fair Value of Financial Liability on Recurring Basis

Balance, January 1, 2021

Issued during the year ended March 31, 2021

Issued during the year ended June 30, 2021

Change in fair value recognized in operations

Converted during the year ended March 31, 2021

Balance, March 31, 2021

HEALTHY EXTRACTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 and 2020

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Pronouncements

In May 2014, the Financial Accounting

Standards Board (“FASB”) issued ASU No.

2014-09, Revenue from Contracts with Customers (Topic 606).

ASU 2014-09 amends

the guidance for revenue recognition to replace numerous, industry specific requirements and converges areas under this topic with

those of the International Financial Reporting Standards.

The ASU implements of five–step process for customer contract revenue

recognition that focuses on transfer of control, as opposed to transfer of risk and rewards.

The amendment also requires enhanced

disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers.

major provisions include the capitalization and amortization of certain contract cost, ensuring the time value of money is considered

in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in

certain circumstances.

Converted during the year ended June 30, 2021

Balance, June 30, 2021

Accounting Pronouncements

May 2014, the Financial Accounting Standards Board (FASB) issued ASU No.

2014-09, Revenue from Contracts with Customers

ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry specific requirements and converges

areas under this topic with those of the International Financial Reporting Standards.

The ASU implements of five–step process for

customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards.

The amendment

also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with

Other major provisions include the capitalization and amortization of certain contract cost, ensuring the time value of money

is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved

in certain circumstances.

The amendments in this ASU are effective for reporting period beginning after December 15, 2016, and early

adoption is prohibited.

Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as

of the date of adoption.

The Company’s revenues are recognized

when control of the promised goods or services is transferred to our clients (upon shipment of goods) in an amount that reflects

the consideration to which we expect to be entitled in exchange for those goods and services.

To achieve this core principle, we

apply the following five steps:

Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the

date of adoption.

Companys revenues are recognized when control of the promised goods or services is transferred to our clients (upon shipment of

goods) in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services.

this core principle, we apply the following five steps:

(1) Identify the contract with a client;

(2) Identify the performance obligations in the contract;

(2) Identify the performance obligations

in the contract;

(3) Determine the transaction price;

(4) Allocate the transaction price to performance obligations in the contract;

and (5) Recognize

revenues when or as the Company satisfies a performance obligation.

We adopted ASC 2014-09 on January 1, 2019.

Although the new revenue standard is expected to have an immaterial impact, if any, on our ongoing net income, we did implement

changes to our processes related to revenue recognition and the control activities with them.

Convertible Instruments

The Company evaluates and account for

conversion options embedded in convertible instruments in accordance with ASC 815 “

Derivatives and Hedging Activities ”.

Applicable GAAP requires companies to

bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments

according to certain criteria.

The criteria include circumstances in which (a) the economic characteristics and risks of the embedded

derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the

hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value

under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms

as the embedded derivative instrument would be considered a derivative instrument.

The Company accounts for convertible instruments

(when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows:

The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt

instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note

transaction and the effective conversion price embedded in the note.

Debt discounts under these arrangements are amortized over

the term of the related debt to their stated date of redemption.

The Company accounts for the conversion

of convertible debt when a conversion option has been bifurcated using the general extinguishment standards.

The debt and equity

linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with

any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities.

During the months ended

March 31, 2021, the Company issued $340,000 of convertible debt with a bifurcated conversion option.

HEALTHY EXTRACTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 and 2020

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Common Stock Purchase Warrants

The Company classifies as equity any contracts

that require physical settlement or net-share settlement or provide a choice of net-cash settlement or settlement in the Company’s

own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in

ASC 815-40 ("Contracts in Entity's Own Equity").

The Company classifies as assets or liabilities any contracts that require

net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our

control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).

The Company assesses classification of common stock purchase warrants and other free-standing derivatives at each reporting date

to determine whether a change in classification is required.

Gain on Extinguishment of debt

Note Satisfaction Agreements

Prior to the Exchange, the Company entered

into a Note Satisfaction Agreement with each of Auctus Fund, Crown Bridge Partners, LLC, Power Up Lending Group Ltd., GS Capital

Partners LLC, Oakmore Opportunity Fund I LP, and Adar Bays, LLC.

All of these entities were holders of the Company’s convertible

debt, and these Note Satisfaction Agreements terminate their convertible notes unless the Company fails to perform its payment

and (5) Recognize revenues when or as the Company satisfies a performance obligation.

adopted ASC 2014-09 on January 1, 2019.

Although the new revenue standard is expected to have an immaterial impact, if any, on our ongoing

net income, we did implement changes to our processes related to revenue recognition and the control activities with them.

Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 Derivatives

and Hedging Activities .

GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative

financial instruments according to certain criteria.

The criteria include circumstances in which (a) the economic characteristics and

risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host

contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at

fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same

terms as the embedded derivative instrument would be considered a derivative instrument.

Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated

from their host instruments) as follows:

The Company records when necessary, discounts to convertible notes for the intrinsic value of

conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the

commitment date of the note transaction and the effective conversion price embedded in the note.

Debt discounts under these arrangements

are amortized over the term of the related debt to their stated date of redemption.

Company accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment

The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current

fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities.

During the months

ended June 30, 2021, the Company issued $745,000 of convertible debt with a bifurcated conversion option.

Stock Purchase Warrants

Company classifies as equity any contracts that require physical settlement or net-share settlement or provide a choice of net-cash settlement

or settlement in the Companys own shares (physical settlement or net-share settlement) provided that such contracts are indexed

to our own stock as defined in ASC 815-40 (Contracts in Entitys Own Equity).

The Company classifies as assets or liabilities

any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that

event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or

net-share settlement).

The Company assesses classification of common stock purchase warrants and other free-standing derivatives at each

reporting date to determine whether a change in classification is required.

on Extinguishment of debt

Satisfaction Agreements

Company entered into a Note Satisfaction Agreement with each of Auctus Fund, Crown Bridge Partners, LLC, Power Up Lending Group Ltd.,

GS Capital Partners LLC, Oakmore Opportunity Fund I LP, and Adar Bays, LLC.

All of these entities were holders of the Companys

convertible debt, and these Note Satisfaction Agreements terminate their convertible notes unless the Company fails to perform its payment

The Company agreed to pay these note holders an aggregate of $520,658 plus interest.

The Company paid an aggregate

of $353,908 on or before February 15, 2019.

The balance owed and outstanding of $160,000 plus interest was agreed to be purchased

by some third-party individuals.

During the third quarter 2020, these third-party individuals decided to convert the outstanding

notes into 2,400,000 shares of the Company’s common stock.

Various other holders of Convertible Promissory

Notes agreed to convert their notes for an aggregate of 806,015 shares of common stock prior to the Exchange.

As a result of these

transactions, no convertible promissory notes remain outstanding, except for those convertible notes subject to revival if the

Company fails to make payments pursuant to the Note Satisfaction Agreements.

NOTE 3 –

The Company paid an aggregate of $353,908

on or before February 15, 2019.

The balance owed and outstanding of $160,000 plus interest was agreed to be purchased by some third-party

During the third quarter 2020, these third-party individuals decided to convert the outstanding notes into 2,400,000 shares

of the Companys common stock.

other holders of Convertible Promissory Notes agreed to convert their notes for an aggregate of 806,015 shares of common stock.

As a result of these transactions, no convertible promissory notes remain outstanding, except for those convertible

notes subject to revival if the Company fails to make payments pursuant to the Note Satisfaction Agreements.

3 – GOING CONCERN

The accompanying financial statements have

been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the

satisfaction of liabilities in the normal course of business.

The Company has generated minimal revenues from operations.

its inception, the Company has been engaged substantially in financing activities and developing its business plan and incurring

startup costs and expenses.

As a result, the Company incurred accumulated net losses from Inception (December 19, 2014) through

the period ended March 31, 2021 of $14,250,134.

Due to our negative cash flow, the Company has substantial doubt about the entity’s

ability to continue as a going concern within one year after the date that the financial statements are issued.

In addition, the

Company’s development activities since inception have been financially sustained through equity financing.

accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the

realization of assets and the satisfaction of liabilities in the normal course of business.

The Company has generated minimal revenues

from operations.

Since its inception, the Company has been engaged substantially in financing activities and developing its business

plan and incurring startup costs and expenses.

As a result, the Company incurred accumulated net losses from Inception (December 19,

2014) through the period ended June 30, 2021 of $14,747,885.

Due to our negative cash flow, the Company has substantial doubt about the

entitys ability to continue as a going concern within one year after the date that the financial statements are issued.

the Companys development activities since inception have been financially sustained through equity financing.

Management plans

to keep seeking funding through debt and equity financing which are intended to mitigate the conditions that have raise substantial

doubt about the entity’s ability to continue as a going concern.

HEALTHY EXTRACTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 and 2020

NOTE 4 –

RELATED PARTY

For the months ended March 31, 2021 and

2020, the Company had expenses totaling $18,000 and $0 respectively, to an officer and director for salaries, which is included

in general and administrative expenses on the accompanying statement of operations As of March 31, 2021, there was a total of convertible

debt of $0.00 and accrued interest payable of $0.00 due to an officer and director, employees, and shareholders.

NOTE 5 –

CONVERTIBLE DEBT –

to keep seeking funding through debt and equity financing which are intended to mitigate the conditions that have raise substantial doubt

about the entitys ability to continue as a going concern.

4 – RELATED PARTY

In 2020, the Company converted the outstanding

convertible debt which was due to a related party.

NOTE 6 –

the months ended June 30, 2021 and 2020, the Company had expenses totaling $ 18,000 and $ 0 respectively, to an officer and director for

salaries, which is included in general and administrative expenses on the accompanying statement of operations.

As of June 30, 2021,

there was a total of convertible debt of $0.00 and accrued interest payable of $0.00 due to an officer and director, employees, and shareholders.

5 – CONVERTIBLE DEBT – RELATED PARTY

2020, the Company converted the outstanding convertible debt which was due to a related party.

6 – NOTES PAYABLE

As of March 31, 2021, the Company had the following:

of June 30, 2021, the Company had the following:

Schedule of Notes Payable

Unsecured debt with shareholders of the Company, no due date, 0 % interest,

Unsecured debt with shareholders of the Company, no due date, 8 % interest,

As of March 31, 2021, the Company has an outstanding total

of $3,917.78 in interest accrued for the above note.

NOTE 7 –

of June 30, 2021, the Company has an outstanding total of $ 6,184 in interest accrued for the above note.

7 – CONVERTIBLE DEBT

As of March 31, 2021, the Company had the following:

of June 30, 2021, the Company had the following:

Unsecured convertible debt, due 01/19/17 , 8 % interest, default interest at 18 % , converts at a 54% discount to market price based on the lowest trading prices in the last 20 days trading price

Unsecured convertible debt, due 03/17/22 , 10 % interest, default interest at 16 % , converts at $0.05/share.

Below represent the Black-Scholes Option Pricing Model calculations

for the above convertible note payables:

13 unsecured convertible debt were issued during the 2 nd quarter 2021, due 03/31/23 , 6 % interest, converts at $0.05/share.

represent the Black-Scholes Option Pricing Model calculations for the above convertible note payables:

Number of options valued

2 unchanged sentences

Unsecured Convertible debt #2

HEALTHY EXTRACTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 and 2020

NOTE 7 –

CONVERTIBLE DEBT (CONTINUED)

As of March 31, 2021, the Company has

an outstanding total of $3,742 in accrued interest for the above convertible notes.

The convertible promissory notes #1 is

in default but management has not been able to make contact with this party, due to them living out of the country.

We have calculated

the derivative liability as if it is in default (but the note’s default interest rate stays the same at 8%) and will still

accrue appropriate interest until the note is fully satisfied or converted into the Company’s common stock.

The Company has determined that the conversion

feature embedded in the notes referred to above that contain a potential variable conversion amount constitutes a derivative which

has been bifurcated from the note and recorded as a derivative liability, with a corresponding discount recorded to the associated

NOTE 8 –

STOCKHOLDERS’

Authorized Stock

The Company has authorized 75,000,000

common shares with a par value of $0.001 per share.

Each common share entitles the holder to one vote on any matter on which

action of the stockholders of the corporation is sought.

During February 2017, the Company increased the authorized number of shares

to 500,000,000.

Also, the Company increased the authorized preferred stock to 75,000,000 shares and designated 25,000,000 shares

of preferred stock to Series A Convertible Preferred Stock.

During January 2018, the Company increased its authorized number of

common shares to 1,000,000,000.

Unsecured Convertible debt #3

Unsecured Convertible debt #4

Unsecured Convertible debt #5

Unsecured Convertible debt #6

Unsecured Convertible debt #7

Unsecured Convertible debt #8

Unsecured Convertible debt #9

Unsecured Convertible debt #10

Unsecured Convertible debt #11

Unsecured Convertible debt #12

Unsecured Convertible debt #13

Unsecured Convertible debt #14

Unsecured Convertible debt #15

of June 30, 2021, the Company has an outstanding total of $ 13,981 in accrued interest for the above convertible notes.

convertible promissory notes #1 is in default but management has not been able to make contact with this party, due to them living out

of the country.

We have calculated the derivative liability as if it is in default (but the notes default interest rate stays

the same at 8%) and will still accrue appropriate interest until the note is fully satisfied or converted into the Companys common

Company has determined that the conversion feature embedded in the notes referred to above that contain a potential variable conversion

amount constitutes a derivative which has been bifurcated from the note and recorded as a derivative liability, with a corresponding

discount recorded to the associated debt.

8 – STOCKHOLDERS EQUITY

Company has authorized 75,000,000 common shares with a par value of $0.001 per share.

Each common share entitles the holder to

one vote on any matter on which action of the stockholders of the corporation is sought.

During February 2017, the Company increased

the authorized number of shares to 500,000,000 .

Also, the Company increased the authorized preferred stock to 75,000,000 shares and designated

25,000,000 shares of preferred stock to Series A Convertible Preferred Stock .

During January 2018, the Company increased its authorized

number of common shares to 1,000,000,000 .

During April 2018, the Company increased its authorized number of common shares to 2,500,000,000 .

The Board of Directors, in the future, has the authority to increase the authorized capital up to 4,000,000,000 shares based on

shareholder approval.

The shareholders of the Company approved

a reverse stock split at a ratio of between 1-for-100 and 1-for 250.

The Company received approval from FINRA for a reverse stock

split of 1-for-250, which was effective as of July 23, 2018.

On October 16, 2017, the Company filed

an Amended and Restated Certificate of Designation of the Rights, Preferences, Privileges and Restrictions of the Series A Convertible

Preferred Stock (the “Amended Certificate”) with the Secretary of State of the State of Nevada.

The Amended Certificate

reduces the number of preferred shares designated as Series A Preferred Stock from 25,000,000 shares to 1,333,334 shares.

Certificate also changes the conversion and voting rights of the Series A Preferred Stock.

The Series A Preferred Stock is now

convertible into the number of shares of our common stock equal to 0.00006% of our outstanding common stock upon conversion.

voting rights of the Series A Preferred Stock are now equal to the number of shares of common stock into which the Series A Preferred

The Board of Directors, in the future, has the authority to increase the authorized capital up to 4,000,000,000 shares based on shareholder

shareholders of the Company approved a reverse stock split at a ratio of between 1-for-100 and 1-for 250.

The Company received approval

from FINRA for a reverse stock split of 1-for-250, which was effective as of July 23, 2018.

October 16, 2017, the Company filed an Amended and Restated Certificate of Designation of the Rights, Preferences, Privileges and Restrictions

of the Series A Convertible Preferred Stock (the Amended Certificate) with the Secretary of State of the State of Nevada.

The Amended Certificate reduces the number of preferred shares designated as Series A Preferred Stock from 25,000,000 shares to 1,333,334

The Amended Certificate also changes the conversion and voting rights of the Series A Preferred Stock.

The Series A Preferred

Stock is now convertible into the number of shares of our common stock equal to 0.00006% of our outstanding common stock upon conversion.

The voting rights of the Series A Preferred Stock are now equal to the number of shares of common stock into which the Series A Preferred

Stock may convert.

As of March 31, 2021, there are no outstanding

shares of preferred stock.

of June 30, 2021, there are no outstanding shares of preferred stock.

All the preferred stock was converted in common stock on February

See recent developments for

HEALTHY EXTRACTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 and 2020

NOTE 8 –

STOCKHOLDERS’

EQUITY (CONTINUED)

Common Share Issuances

During the year ended March 31, 2021,

the Company issued 3,915,000 shares of common stock.

On March 18, 2021, the Company raised $340,000 note payable agreement which

1,200,000 shares of the Company’s common stock were issued to the note holder.

Additionally, 2,000,000 shares of common stock

were issued to a company helping secure the note.

Finally, 715,000 shares of common stock were issued for marketing services.

During the year ended December 31, 2020,

the Company issued 41,727,651 shares of common stock.

On several dates in September 2020, the Company raised $295,000 in direct

security purchase agreement which equal to 5,900,000 shares of the Company’s common stock.

During the fourth quarter of 2020,

the Company raised $155,000 in direct security purchase agreement which equal to 3,100,000 shares of the Company’s common

Warrant Issuances

In December 2020, the Company issued 7,500,000

warrants to three individuals at $0.05 per share.

These warrants will need to be exercised between the date of issue and three

years thereafter.

As of March 31, 2021, there were 7,512,000 warrants outstanding, of which 4,000 warrants are fully vested.

Stock Issued for Services

On January 28, 2019, the Company entered

into a marketing and sales consulting agreement with an individual for a period of six months.

The Company issued 350,000 shares

of common stock as the compensation for this agreement.

On March 18, 2021, the Company entered into a marketing consulting agreement

with an individual.

See recent developments for details.

Share Issuances

the year ended June 30, 2021, the Company issued 4,915,000 shares of common stock.

On April 22, 2021, the Company issued 1,000,000 shares

of common stock for consulting and development advertising and promotional items.

On March 18, 2021, the Company raised $340,000 note

payable agreement which 1,200,000 shares of the Companys common stock were issued to the note holder.

Additionally, 2,000,000

shares of common stock were issued to a company helping secure the note.

Finally, 715,000 shares of common stock were issued for marketing

the year ended December 31, 2020, the Company issued 41,727,651 shares of common stock.

On several dates in September 2020, the Company

raised $295,000 in direct security purchase agreement which equal to 5,900,000 shares of the Companys common stock.

fourth quarter of 2020, the Company raised $155,000 in direct security purchase agreement which equal to 3,100,000 shares of the Companys

common stock.

December 2020, the Company issued 7,500,000 warrants to three individuals at $0.05 per share.

These warrants will need to be exercised

between the date of issue and three years thereafter.

As of June 30, 2021, there were 7,512,000 warrants outstanding, of which 4,000

warrants are fully vested.

Issued for Services

January 28, 2019, the Company entered into a marketing and sales consulting agreement with an individual for a period of six months.

The Company issued 350,000 shares of common stock as the compensation for this agreement.

Share Conversion Agreements

All of the holders of the Company’s

Series A Convertible Preferred Stock (the “

Preferred Holders ”) entered into a Preferred Stock Conversion Agreement.

Pursuant to the Conversion Agreements, the Preferred Holders converted their shares of preferred stock into common stock, effective

as of the Exchange.

As a result, no shares of the Company’s Series A Convertible Preferred Stock are outstanding.

of 15,592,986 shares of common stock were issued to the Preferred Holders.

The Preferred Holders agreed to convert each share of

Series A Convertible Preferred Stock into eighteen (18) shares of common stock and agreed to retire a total of 467,057 shares of

Series A Convertible Preferred Stock.

On March 18, 2021, the Company entered into

a marketing consulting agreement with an individual.

The Company issued 715,000 shares of common stock as the compensation for this agreement.

Conversion Agreements

of the holders of the Companys Series A Convertible Preferred Stock (the Preferred Holders ) entered into

a Preferred Stock Conversion Agreement.

Pursuant to the Conversion Agreements, the Preferred Holders converted their shares of preferred

stock into common stock, effective as of the Exchange.

As a result, no shares of the Companys Series A Convertible Preferred Stock

are outstanding.

An aggregate of 15,592,986 shares of common stock were issued to the Preferred Holders.

The Preferred Holders agreed

to convert each share of Series A Convertible Preferred Stock into eighteen (18) shares of common stock and agreed to retire a total

of 467,057 shares of Series A Convertible Preferred Stock.

The Company cancelled the retired shares.

Omnibus Stock Grant and Option Plan

On May 30, 2020, the Company proposed

a stock options agreement in the amount of 10,550,000 shares with a strike price of $0.05 to sixteen individuals.

This plan was

approved by the Company by the end of the third quarter 2020.

Stock Grant and Option Plan

May 30, 2020, the Company proposed a stock options agreement in the amount of 10,550,000 shares with a strike price of $0.05 to sixteen

This plan was approved by the Company by the end of the third quarter 2020.

Purchase price under the plan is defined as:

unless otherwise permitted

by applicable law, the purchase price of Shares to be offered under the Plan shall not be less than eighty-five percent (85%) of

the Fair Market Value of a Share on the date of grant (100% for 10% shareholders).

HEALTHY EXTRACTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 and 2020

NOTE 9 –

Acquisition of Ultimate Brain Nutrients,

On April 3, 2020, the Company entered

into a Share Exchange Agreement by and among Grey Cloak Tech Inc., Ultimate Brain Nutrients, LLC, a Delaware limited liability

company (“

UBN ”), and the members of UBN, whereby we issued and exchanged 90,000,960 shares of our common stock

for all of the outstanding equity securities of UBN.

unless otherwise permitted by applicable law, the purchase price of Shares to be offered under the Plan shall not be less than eighty-five

percent (85%) of the Fair Market Value of a Share on the date of grant (100% for 10% shareholders).

9 – ACQUISITIONS

of Ultimate Brain Nutrients, LLC

April 3, 2020, the Company entered into a Share Exchange Agreement by and among Grey Cloak Tech Inc., Ultimate Brain Nutrients, LLC,

a Delaware limited liability company ( UBN ), and the members of UBN, whereby we issued and exchanged 90,000,960 shares

of our common stock for all of the outstanding equity securities of UBN.

UBN is now our wholly-owned subsidiary.

The shares of common stock issued

in the Exchange are equal to approximately 42.5% of our outstanding common stock immediately following the exchange.

The assets acquired and

liabilities assumed as part of our acquisition were recognized at their fair values as of the effective acquisition date, April

The shares of common

stock issued in the Exchange are equal to approximately 42.5% of our outstanding common stock immediately following the exchange.

assets acquired and liabilities assumed as part of our acquisition were recognized at their fair values as of the effective acquisition

date, April 3, 2020.

The following table summarizes the fair values assigned to the assets acquired and liabilities assumed.

Schedule of fair value of Assets Acquired and Fair value Assumed

Current assets

1 unchanged sentence

Net assets acquired

The purchase price method

was used when calculating the fair market value of the UBN purchase.

On April 3, 2020 the closing stock price for GRCK was $0.021.

purchase price method was used when calculating the fair market value of the UBN purchase.

On April 3, 2020 the closing stock price for

GRCK was $ 0.021 .

The total number of shares exchanged multiplied by the closing stock price equaled a purchase value of $ 1,890,020 .

The difference

between the net assets acquired and the purchase value was recorded as $1,579,883 of goodwill for the purchase.

Due to the goodwill

impairment, the Company fully expensed the goodwill recorded in this transaction.

The Company viewed UBN’s balance sheet

difference between the net assets acquired and the purchase value was recorded as $ 1,579,883 of goodwill for the purchase.

goodwill impairment, the Company fully expensed the goodwill recorded in this transaction.

The Company viewed UBNs balance sheet

as being fairly valued as of April 3, 2020 so no adjustment was needed under the purchase price method of valuation.

NOTE 10 –

10 – BUSINESS SEGMENT INFORMATION

March 31, 2021, the Company operated in two reportable segments (Corporate and Health Supplements) supported by a corporate group

which conducts activities that are non-segment specific.

The following table presents selected financial information about the

Company’s reportable segments for the Months ended March 31, 2021.

of June 30, 2021, the Company operated in two reportable segments (Corporate and Health Supplements) supported by a corporate group which

conducts activities that are non-segment specific.

The following table presents selected financial information about the Companys

reportable segments for the Months ended June 30, 2021.

Schedule of Reportable segments

HEALTH SUPPLEMENTS

2 unchanged sentences

Gain (Loss) Before Income Tax

( 1,851,387 )

( 1,497,904 )

Identifiable Assets

Depreciation and Amortization

HEALTHY EXTRACTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021 and 2020

NOTE 11 –

11 – SUBSEQUENT EVENTS

Offering Circular

During the first part of the 2021, the

Company is in the process of filing a Regulation A with the U.S.

the first part of the 2021, the Company is in the process of filing a Regulation A with the U.S.

Securities and Exchange Commission.

We see this filing going through

final approval in the month of May 2021.

On March 11, 2020, the World Health Organization

declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide.

The Company is monitoring this closely, and although operations have not been materially affected by the coronavirus outbreak to

date, the ultimate severity of the outbreak is uncertain.

Further the uncertain nature of its spread globally may impact our business

operations resulting from quarantines of employees, customers, and third-party service providers.

At this time, the Company is

unable to estimate the impact of this event on its operations.

The Company evaluated its March 31, 2021

financial statements for subsequent events through May 3, 2021, the date the financial statements were available to be issued.

ITEM 2 M a nagement’s Discussion and Analysis

of Financial Condition and Results of Operations

Our Management’s

Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking (within

the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934).

We see this filing going through final approval in the month of August 2021.

March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment

and mitigation measures worldwide.

The Company is monitoring this closely, and although operations have not been materially affected

by the coronavirus outbreak to date, the ultimate severity of the outbreak is uncertain.

Further the uncertain nature of its spread globally

may impact our business operations resulting from quarantines of employees, customers, and third-party service providers.

At this time,

the Company is unable to estimate the impact of this event on its operations.

the first half of 2021, the Company engaged with HP Securities Inc.

to help raise funding.

In exchange for their help, the Company has

agreed to issue them 1,000,000 shares of common stock.

The Company estimates those shares will be issued in the 3 rd or 4 th

quarter of 2021.

Company evaluated its June 30, 2021 financial statements for subsequent events through August 4, 2021, the date the financial statements

were available to be issued.

2 Managements

Discussion and Analysis of Financial Condition and Results of Operations

Managements Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking

(within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934).

Forward-looking

statements are, by their very nature, uncertain and risky.

These risks and uncertainties include international, national and local

general economic and market conditions;

These risks and uncertainties include international, national and local general

economic and market conditions;

demographic changes;

our ability to sustain, manage, or forecast growth;

our ability to

successfully make and integrate acquisitions;

our ability to successfully

make and integrate acquisitions;

raw material costs and availability;

new product development and introduction;

government regulations and changes in, or the failure to comply with, government regulations;

existing government regulations

and changes in, or the failure to comply with, government regulations;

adverse publicity;

loss of significant customers or suppliers;

the loss of significant customers

or suppliers;

fluctuations and difficulty in forecasting operating results;

changes in business strategy

or development plans;

business disruptions;

changes in business strategy or development plans;

the ability to attract and retain qualified personnel;

the ability to protect technology;

and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

Although the forward-looking

statements in this Quarterly Statement reflect the good faith judgment of our management, such statements can only be based on

facts and factors currently known by them.

Consequently, and because forward-looking statements are inherently subject to risks

and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking

and other risks that might be

detailed from time to time in our filings with the Securities and Exchange Commission.

the forward-looking statements in this Quarterly Statement reflect the good faith judgment of our management, such statements can only

be based on facts and factors currently known by them.

Consequently, and because forward-looking statements are inherently subject to

risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking

You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports

as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results

of operations and prospects.

The following discussion

and analysis of financial condition and results of operations of the Company is based upon, and should be read in conjunction with,

its unaudited financial statements and related notes elsewhere in this Form 10-Q, which have been prepared in accordance with accounting

principles generally accepted in the United States.

Summary Overview

We were formed in December

as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of

operations and prospects.

following discussion and analysis of financial condition and results of operations of the Company is based upon, and should be read in

conjunction with, its unaudited financial statements and related notes elsewhere in this Form 10-Q, which have been prepared in accordance

with accounting principles generally accepted in the United States.

were formed in December 2014.

We had revenues of $1,276,559 in the year ended December 31, 2020 and $748,377 in the year ended December

Eqova Life Sciences

On October 17, 2017, we

acquired Eqova Life Sciences, a Nevada corporation, through an exchange of shares of our Series A Convertible Preferred Stock for

all of the outstanding equity interest of Eqova.

As part of the Exchange, we brought on Eqova’s President and Director, Patrick

Stiles, to serve as our President and Chief Executive Officer and as a Director on our Board of Directors.

Stiles resigned

in September 2018.

Eqova is a medically-focused

CBD company that develops clinical grade full spectrum hemp oil products, sold exclusively via partnerships with licensed medical

practitioners to use with their patients.

We believed that Eqova provided us with a prime growth opportunity with an established

Revenues of our hemp oil products from the acquisition of Eqova for the year ended December 31, 2018 were $64,384, but

were $0 in 2019.

We closed this business in the second quarter of 2019.

BergaMet NA, LLC

On February 4, 2019, we

issued and exchanged shares of our common stock for all of the outstanding equity securities of BergaMet.

The shares of common

stock issued in the Exchange were equal to approximately 80.1% of our outstanding common stock immediately following the exchange.

Through the exchange, we

were able to secure funds in BergaMet to pay off some debt and provide capital for operations.

We paid an aggregate of $353,908

and were obligated to pay another $164,578 approximately one (1) year later to retire convertible debt.

In the third quarter of

2020, we facilitated the sale of the then-outstanding debt to a third-party who converted it into an aggregate of 3,400,000 shares

of our common stock.

Prior to the exchange, we also entered into agreements with other holders of convertible debt to convert their

notes for an aggregate of 806,015 shares of common stock.

We also entered into conversion agreements with the holders of our Series

A Convertible Preferred Stock whereby all of the outstanding preferred stock was converted for an aggregate of 15,592,986 shares

of common stock.

The conversion and repayment of the preferred stock and convertible debt have greatly improved our capitalization

structure, as we now have no outstanding variable-price convertible debt.

The acquisition of BergaMet

has been extremely beneficial to us.

In addition to paying off our convertible debt, we are now able to better position ourselves

in the market.

BergaMet is an established company that was already generating revenues when we acquired it.

BergaMet also has unique

products that will fit nicely with our existing business.

We now plan on expanding our product line to other nutraceuticals.

BergaMet generated all

of our revenue in 2020.

Ultimate Brain Nutrients, LLC

On April 3, 2020, we entered

into a Share Exchange Agreement with Ultimate Brain Nutrients, LLC, a Delaware limited liability company (“UBN”), and

the members of UBN, whereby we issued and exchanged 90,000,960 shares of our common stock for all of the outstanding equity securities

As of June 30, 2021, we had revenues of $414,318 for the first six months of 2021.

February 4, 2019, we issued and exchanged shares of our common stock for all of the outstanding equity securities of BergaMet.

is now our wholly-owned subsidiary.

The shares of common stock issued in the Exchange were equal to approximately 80.1% of our outstanding

common stock immediately following the exchange.

acquisition of BergaMet has been extremely beneficial to us.

BergaMet was an established company that was already generating revenues

when we acquired it.

BergaMet also has unique products that fit nicely with our existing business.

We plan on expanding our product line

to other nutraceuticals.

generated all of our revenue in 2020.

Brain Nutrients, LLC

April 3, 2020, we entered into a Share Exchange Agreement with Ultimate Brain Nutrients, LLC, a Delaware limited liability company (UBN),

and the members of UBN.

UBN is now our wholly-owned subsidiary.

1 unchanged sentence

42.5% of our outstanding common stock immediately following the exchange.

UBN is a science-based

company that develops unique, plant-based superior health technology neuro-products that provide natural brain solutions.

numerous proprietary products, with four unique patent-pending formulations and one patent issued.

Financial results for UBN

are included in this Management’s Discussion and Analysis.

Going Concern

As a result of our financial

condition, we have received a report from our independent registered public accounting firm for our financial statements for the

years ended December 31, 2020 and 2019 that includes an explanatory paragraph describing the uncertainty as to our ability to continue

as a going concern.

From inception (December 19, 2014) through the end of December 31, 2020, we have incurred accumulated net losses

of $12,956,498.

In order to continue as a going concern we must effectively balance many factors and generate more revenue so that

we can fund our operations from our sales and revenues.

is a science-based company that develops unique, plant-based superior health technology neuro-products that provide natural brain solutions.

UBN has numerous proprietary products, with four unique patent-pending formulations and one patent issued.

results for UBN are included in this Managements Discussion and Analysis.

a result of our financial condition, we have received a report from our independent registered public accounting firm for our financial

statements for the years ended December 31, 2020 and 2019 that includes an explanatory paragraph describing the uncertainty as to our

ability to continue as a going concern.

From inception (December 19, 2014) through the end of December 31, 2020, we have incurred accumulated

net losses of $12,956,498.

In order to continue as a going concern we must effectively balance many factors and generate more revenue

so that we can fund our operations from our sales and revenues.

If we are not able to do this we may not be able to continue as an operating

At our current revenue and burn rate, we have an immediate cash need, and thus we must raise capital by issuing debt or

through the sale of our stock.

However, there is no assurance that our existing cash flow will be adequate to satisfy our existing

operating expenses and capital requirements.

Results of Operations for the Three Months Ended March 31, 2021

We had revenues of $170,433

for the three months ended March 31, 2021, compared to $455,839 for the three months ended March 31, 2020.

Revenues for the three

months ended December 31, 2020 were $135,902.

Our cost of revenue for the three months ended March 31, 2021 were $41,442, compared

to $196,057 for the three months ended March 31, 2020.

Our operating expenses

were $716,087 for the three months ended March 31, 2021, compared to $207,632 for the three months ended March 31, 2020, an increase

of $508,455, or 245%.

Our operating expenses consisted entirely of general and administrative expenses.

Revenues and Net Operating Loss

Our revenue, operating

expenses, net operating loss, and net gain (loss) for the three months ended March 31, 2021 and 2020 were as follows:

At our current revenue and burn rate, we have an immediate cash need, and thus we must raise capital by issuing debt or through

the sale of our stock.

However, there is no assurance that our existing cash flow will be adequate to satisfy our existing operating

expenses and capital requirements.

of Operations for the Three and Six Months Ended June 30, 2021 and 2020

had revenues of $243,886 and $414,318 for the three and six months ended June 30, 2021, compared to $151,719 and $607,558 for the three

and six months ended June 30, 2020.

Revenues for the three months ended March 31, 2021 were $170,452.

Our revenues for the three months

ended June 30, 2021 were 43% higher than the immediately preceding quarter.

operating expenses were $404,831 and $1,120,918 for the three and six months ended June 30, 2021, compared to $2,024,201 and $2,231,833

for the three and six months ended June 30, 2020.

Our operating expenses for the three months ended June 30, 2021 were 43% lower than

the immediately preceding quarter.

and Net Operating Loss

revenue, operating expenses, net operating loss, and net gain (loss) for the three and six months ended June 30, 2021 and 2020 were as

Cost of Revenue

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General and administrative

Impairment of Assets

Total operating expenses

4 unchanged sentences

SBA Loan Forgiveness

Impairment of Assets

Gain on sale of asset

2 unchanged sentences

$ (3,385,173 )

We had revenues of $170,433

for the three months ended March 31, 2021, compared to $455,839 for the three months ended March 31, 2020, a reduction of $285,406,

Revenues for the three months ended December 31, 2020 were $135,902.

Our cost of revenue for the three months ended March

31, 2021 were $41,442, or 24% of revenue, compared to $196,057 for the three months ended March 31, 2020, or 43% of revenue.

Cost of Revenue

Cost of revenue was $41,442

for the three months ended March 31, 2021, compared to $196,057 for the three months ended March 31, 2020, a decrease of $154,615,

Gross profit was $128,991 for the three months ended March 31, 2021, compared to $259,782 for the three months ended March

31, 2020, a decrease of $130,792, or 50%.

Cost of revenue as a percentage

of revenues was 24% for the three months ended March 31, 2021, compared to 343% for the three months ended March 31, 2020.

General and Administrative

General and administrative

expenses were $716,087 for the three months ended March 31, 2021, compared to $207,632 for the three months ended March 31, 2020.

In the three months ended March 31, 2021, general and administrative expenses consisted mainly of consulting fees $172,500, professional

fees $368,960, salary and wages $30,446, advertising $82,729, and postage $7,625.

In the three months ended March 31, 2020, general

and administrative expenses consisted mainly of professional fees $15,122, consulting fees $73,754, salary and wages $39,727, postage

$7,501, advertising $19,551, and transfer agent and filing fees of $1,470.

Other Income (Expense)

Other income (expense)

was $(706,540) for the three months ended March 31, 2021, compared to $572,660 for the three months ended March 31, 2020, a decrease

of $1,279,200, or 223%.

In the three months ended March 31, 2021, other income (expense) consisted of interest expense, net of

interest income of $(15,759) and change in fair value on derivative of $(690,780).

Change in fair value of derivative was related

to the conversion of convertible debts into common stock shares .

In the three months ended

March 31, 2020, other income (expense) consisted of interest expense, net of interest income of $(42,476) and change in fair value

on derivative of $615,136.

Net Income (Loss)

Net income (loss) was $(1,293,636)

and $624,811, or $0.00 and $0.01 per share, for the three months ended March 31, 2021 and 2020.

Our net income (loss) various

from period to period primarily because of the change in fair value on derivative.

Liquidity and Capital Resources

During the three months

ended March 31, 2021, we were unable to generate sufficient revenues and had negative operating cash flows.

Our cash on hand as

of December 31, 2020 was $59,201, and as of March 31, 2021 was $232,932.

The increase in cash on hand was primarily from our net

cash used in operating activities of $(635,261), offset by net cash provided by financing activities of $846,880.

Our monthly cash

flow burn rate for 2020 (not

including inventory purchases) was approximately

$192,000, and for the three months ended March 31, 2021

it was approximately $212,000.

$ (1,791,387 )

$ (2,760,363 )

had revenues of $243,886 and $414,318 for the three and six months ended June 30, 2021, compared to $151,719 and $607,558 for the three

and six months ended June 30, 2020, an increase of $92,167, or 60%, for the three month period and a decrease of $193,240, or 32%, for

the six month period.

Revenues for the three months ended March 31, 2021 were $170,452.

cost of revenue for the three and six months ended June 30, 2021 were $33,764 and $75,206, or 14% and 18% of revenue, respectively, compared

to $20,589 and $216,646, or 14% and 36% of revenue, respectively, for the three and six months ended June 30, 2020.

and Administrative

and administrative expenses were $404,831 and $1,120,918 for the three and six months ended June 30, 2021, compared to $444,318 and $651,950

for the three and six months ended June 30, 2020.

In the three months ended June 30, 2021, general and administrative expenses consisted

mainly of consulting fees $172,500, professional fees $23,301, salary and wages $42,573, advertising $169,994, and postage $7,448.

the six months ended June 30, 2021, general and administrative expenses consisted mainly of professional fees $392,260, consulting fees

$345,250, salary and wages $73,019, postage $13,934, advertising $252,723, and transfer agent and filing fees of $18,912.

the three and six months ended June 30, 2020, we recorded impairment of assets of $1,579,883.

This is a result of our purchase of Ultimate

Brain Nutrients, LLC being a related party transaction and the new division recording no revenue as of June 30, 2020.

Income (Expense)

income (expense) was $(303,041) and (1,009,581) for the three and six months ended June 30, 2021, compared to $1,492,102 and $919,442

for the three and six months ended June 30, 2020, a decrease of $1,795,143, or 120%, for the three month period and $1,929,023, or 210%,

for the six month period.

In the three months ended June 30, 2021, other income (expense) consisted of interest expense, net of interest

income of $(13,597) and change in fair value on derivative of $(289,445).

Change in fair value of derivative was related to the conversion

of convertible debts into common stock shares .

In the six months ended June 30, 2020, other income

(expense) consisted of interest expense, net of interest income of $(29,356) and change in fair value on derivative of $(980,225).

Income (Loss)

income (loss) was $(497,751) and $(1,791,387), or $0.00 and $0.01 per share, for the three months ended June 30, 2021 and 2020.

net income (loss) various from period to period primarily because of the change in fair value on derivative.

and Capital Resources

the three months ended March 31, 2021, we were unable to generate sufficient revenues and had negative operating cash flows.

on hand as of December 31, 2020 was $59,201, as of March 31, 2021 was $232,932, and as of June 30, 2021 was $286,939.

The increase in

cash on hand from December 31, 2020 to June 30, 2021 was primarily from our net cash used in operating activities of $(668,875), offset

by net cash provided by financing activities of $970,000.

Our monthly cash flow burn rate for 2021 (not including inventory purchases)

was approximately $84,000.

We have strong short and medium term cash needs.

We anticipate that these needs will be satisfied

through increased revenues and the issuance of debt or the sale of our securities until such time as our cash flows from operations

will satisfy our cash flow needs.

Our cash, current assets,

total assets, current liabilities, and total liabilities as of March 31, 2021 and December 31, 2020, respectively, are as follows:

We anticipate that these needs will be satisfied through

increased revenues and the issuance of debt or the sale of our securities until such time as our cash flows from operations will satisfy

our cash flow needs.

cash, current assets, total assets, current liabilities, and total liabilities as of June 30, 2021 and December 31, 2020, respectively,

are as follows:

Total Current Assets

Total Current and Total Liabilities

Our total current assets

and total assets increased during the three months ended March 31, 2021 primarily as a result of our increase in cash of $173,731

and inventory of $61,961.

Our total current and total liabilities increased by $1,070,436 during the three months ended March 31,

total current assets and total assets increased during the six months ended June 30, 2021 primarily as a result of our increase in cash

of $227,738 and inventory of $164,018.

Our total current and total liabilities increased by $1,774,140 during the six months ended June

30, 2021 primarily because of an increase in convertible debt of $745,000, derivative liabilities of $980,225, and accrued liabilities

Our accumulated deficit increased during the three months ended March 31, 2021 by $1,293,636 to $14,250,134.

In order to repay our obligations

in full or in part when due, we will be required to raise significant capital from other sources.

There is no assurance, however,

that we will be successful in these efforts.

Cash Requirements

Our cash on hand as of

March 31, 2021 was $232,932.

Based on our current level of revenues and monthly burn rate of approximately $212,000 per month,

we will need to continue to fund operations by raising capital from the sale of our stock and debt financings.

Sources and Uses of Cash

Operating Activities

We had net cash used in

operating activities of $(635,261) for the three months ended March 31, 2021, compared to $(175,395) for the three months ended

March 31, 2020.

Our accumulated deficit increased during the six months ended June 30, 2021 by $1,791,387 to $14,747,885.

order to repay our obligations in full or in part when due, we will be required to raise significant capital from other sources.

is no assurance, however, that we will be successful in these efforts.

cash on hand as of June 30, 2021 was $286,939.

Based on our current level of revenues and monthly burn rate of approximately $84,000

per month, we will need to continue to fund operations by raising capital from the sale of our stock and debt financings.

and Uses of Cash

had net cash used in operating activities of $(668,875) for the six months ended June 30, 2021, compared to $(1,844,956) for the six

months ended June 30, 2020.

We use our cash for normal business operations.

Our net cash used in operating activities for the three months

ended March 31, 2021 consisted of our net loss of $1,293,636, plus a decrease in inventory of $61,961, offset by a change in fair

value on derivative liability of $690,780 and accrued interest payable of $50,298.

Investing Activities

We had $(37,888) in cash

flows provided by investing activities for the three months ended March 31, 2021, compared to $zero for the three months ended

March 31, 2020.

Financing Activities

Our net cash provided by

financing activities for the three months ended March 31, 2021 was $846,880, compared to $109,607 for the three months ended March

Our net cash provided by financing activities

consisted of proceeds from the issuance of

common stock of $506,880 and proceeds from the issuance of convertible debt of $340,000.

ITEM 3 Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, we are not required

to provide the information required by this Item.

Our net cash used in operating activities for the six months

ended June 30, 2021 consisted of our net loss of $1,791,387, plus a decrease in inventory of $164,018, offset by a change in fair value

on derivative liability of $980,225 and warrants issued for services of $281,880.

had $(73,388) in cash flows provided by investing activities for the six months ended June 30, 2021, compared to $(26,754) for the six

months ended June 30, 2020.

In both cases, these were related to our trademarks.

net cash provided by financing activities for the six months ended June 30, 2021 was $970,000, compared to $2,402,415 for the six months

ended June 30, 2020.

Our net cash provided by financing activities consisted of proceeds from the issuance of common stock of $225,000

and proceeds from the issuance of convertible debt of $745,000.

3 Quantitative

and Qualitative Disclosures About Market Risk

a smaller reporting company, we are not required to provide the information required by this Item.

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-Q

Item 1. Financial Statements