HEALTHY EXTRACTS INC. 10-K

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Report of Independent Registered Public Accounting Firm F-1 Consolidated Balance Sheets as of December 31, 2021 and 2020 F-2 Consolidated Statement of Operations for the year ended December 31, 2021 and 2020 F-3 Consolidated Statement of Stockholders’ Deficit for the year ended December 31, 2021 and 2020 F-4 Consolidated Statement of Cash Flows for the year ended December 31, 2021 and 2020 F-5 Notes to Consolidated Financial Statements F-6 to F-15 - 26 - Table of Contents Report of Independent Registered Public Accounting Firm To the shareholders and the board of directors of Healthy Extracts Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Healthy Extracts Inc. (the “Company”) 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”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for 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 minimal activities 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 audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our 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. /s/ BF Borgers CPA PC BF Borgers CPA PC PCAOB ID 5041 We have served as the Company’s auditor since 2020 Lakewood, CO March 31, 2022 F- 1 Table of Contents HEALTHY EXTRACTS, INC. CONSOLIDATED BALANCE SHEETS (Audited) DECEMBER 31, DECEMBER 31, 2021 2020 ASSETS CURRENT ASSETS Cash $ 222,098 $ 59,201 Accounts receivable 133,340 13,274 Inventory 1,957,966 2,417,683 Total current assets 2,313,404 2,490,158 Fixed assets, net of accumulated depreciation of $ 45,944 and $ 36,895 , respectively 1,035 6,135 Patents/Trademarks 521,881 425,877 Goodwill 193,260 193,260 Total other assets 716,175 625,272 TOTAL ASSETS $ 3,029,579 $ 3,115,430 LIABILITIES AND STOCKHOLDERS’ DEFICIT LIABILITIES Accounts payable $ 37,267 $ 64,836 Accrued liabilities 59,264 9,054 Notes payable — — Notes payable - related party 170,866 170,866 Convertible debt, net of discount of $0.00 and $0.00, respectively 171,750 6,750 Convertible debt - related party, net of discount of $0.00 and $0.00, respectively — — Accrued interest payable 13,050 2,379 Accrued interest payable - related party 14,118 518 Derivative liabilities 92,527 7,202 Total current and total liabilities 558,841 261,604 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, 338,384,171 and 308,887,410 shares issued and outstanding, respectively 338,384 308,887 Additional paid-in capital 17,075,974 15,501,436 Accumulated deficit ( 14,943,620 ) ( 12,956,498 ) Total stockholders’ equity (deficit) 2,470,738 2,853,826 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) $ 3,029,579 $ 3,115,430 The accompanying notes are an integral part of these unaudited consolidated financial statements. F- 2 Table of Contents HEALTHY EXTRACTS, INC. CONSOLIDATED STATEMENT OF OPERATIONS FOR THE 12 MONTHS ENDING DECEMBER 31, 2021 AND 2020 (Audited) FOR THE 12 MONTHS ENDED DECEMBER 31, 2021 2020 REVENUE Gross revenue $ 1,676,598 $ 1,299,398 Less selling fees ( 210,816 ) ( 22,839 ) Net revenue 1,465,782 1,276,559 COST OF REVENUE Cost of goods sold 346,156 465,010 Written off inventory 424,548 1,389,991 Total cost of revenue 770,704 1,855,001 GROSS PROFIT 695,078 ( 578,442 ) OPERATING EXPENSES General and administrative 2,584,256 1,474,891 Impairment of assets — 1,579,883 Total operating expenses 2,584,256 3,054,774 OTHER INCOME (EXPENSE) Interest expense, net of interest income ( 52,453 ) ( 72,882 ) Change in fair value on derivative ( 85,325 ) 1,053,186 Loss on extinguishment of debt — 46,836 SBA loan forgiveness 39,833 29,700 Gain on sale of asset — — Total other income (expense) ( 97,945 ) 1,056,841 Net gain/(loss) before income tax provision ( 1,987,122 ) ( 2,576,375 ) NET GAIN/(LOSS) $ ( 1,987,122 ) $ ( 2,576,375 ) Loss per share - basic and diluted $ ( 0.01 ) $ ( 0.01 ) Weighted average number of shares outstanding - basic and diluted 319,209,932 237,300,091 The accompanying notes are an integral part of these unaudited consolidated financial statements. F- 3 Table of Contents HEALTHY EXTRACTS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Audited) FOR THE 12 MONTHS ENDING DECEMBER 31, 2021 2020 Cash Flows from Operating Activities: Net Gain/(Loss) $ ( 1,987,122 ) $ ( 2,576,375 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 5,100 9,048 Warrants issued for services 608,836 — Non-cash compensation — — Change in fair value on derivative liability 85,325 ( 1,053,186 ) Loss on extinguishment of debt — ( 46,836 ) Gain on sale of asset — — Impairment of goodwill — 1,579,883 Changes in operating assets and liabilities: Accounts receivable ( 120,066 ) 13,199 Inventory 459,717 663,476 Accrued interest receivable — — Accounts payable ( 27,569 ) 43,711 Accounts payable - related party — — Accrued liabilities 50,210 ( 44,287 ) Accrued interest payable 10,671 ( 47,524 ) Accrued interest payable - related party 13,600 ( 490,703 ) Net Cash used in Operating Activities ( 901,298 ) ( 1,902,758 ) Cash Flows from Investing Activities: Purchase of fixed assets — — Cash received from sale of asset — — Purchase of note receivable — — Trademarks ( 96,004 ) ( 115,740 ) Payments of note receivable — — Cash flows provided by (used in) Investing Activities: ( 96,004 ) ( 115,740 ) Cash Flows from Financing Activities: Purchase of BergaMet — — Purchase of UBN — — Proceeds from issuance of common stock 995,199 4,405,791 Proceeds from issuance of convertible debt, 165,000 ( 1,501,876 ) Payments for repayment of convertible debt — — Proceeds from issuance of noted payable — ( 79,667 ) Proceeds from issuance of noted payable - related party — ( 880,000 ) Payments for repayment of notes payable - related party — — Net Cash provided by Financing Activities 1,160,199 1,944,248 Increase (decrease) in cash 162,897 ( 74,250 ) Cash at beginning of period 59,201 133,451 Cash at end of period $ 222,098 $ 59,201 The accompanying notes are an integral part of these unaudited consolidated financial statements. F- 4 Table of Contents HEALTHY EXTRACTS, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE 12 MONTHS ENDING DECEMBER 2021 AND 2020 (Audited) Additional Preferred Stock Common Stock Paid-In Accumulated Shares Amount Shares Amount Capital Deficit Total Balance - December 31, 2019 — $ — 121,610,085 $ 121,610 9,392,903 $ ( 10,380,123 ) $ ( 865,610 ) Issuance of shares acquisition of UBN — — 90,000,960 90,001 1,800,019 — 1,890,020 Issuance of common stock for debt conversion — — 39,248,714 39,249 1,465,159 — 1,504,408 Issuance of common stock for debt conversion — — 13,200,000 13,200 646,800 — 660,000 Issuance of common stock for debt conversion — — 35,827,651 35,828 1,755,555 — 1,791,383 Issuance of common stock for cash — — 5,900,000 5,900 289,100 — 295,000 Issuance of common stock for cash — — 800,000 800 39,200 — 40,000 Issuance of common stock for cash — — 300,000 300 14,700 — 15,000 Issuance of common stock for cash — — 2,000,000 2,000 98,000 — 100,000 Net (loss) gain for the period — — — — — ( 2,576,375 ) ( 2,576,375 ) Balance - December 31, 2020 — $ — 308,887,410 $ 308,887 15,501,436 $ ( 12,956,498 ) $ 2,853,826 Issuance of common stock for cash — — 900,000 900 44,100 — 45,000 Issuance of common stock for cash — — 300,000 300 14,700 — 15,000 Issuance of common stock for cash — — 3,300,000 3,300 161,700 — 165,000 Issuance of common stock for cash — — — — — — — Issuance of common stock for debt — — 1,200,000 1,200 85,200 — 86,400 Issuance of common stock for services — — 715,000 715 50,765 — 51,480 Issuance of common stock for services — — 2,000,000 2,000 142,000 — 144,000 Issuance of common stock for services — — 1,000,000 1,000 59,000 — 60,000 Issuance of common stock for services — — 1,177,778 1,178 90,778 — 91,956 Issuance of common stock for debt — — 1,200,000 1,200 58,800 — 60,000 Issuance of common stock for services — — 5,500,000 5,500 269,500 — 275,000 Issuance of common stock for debt — — 12,203,983 12,204 597,995 — 610,198 Net (loss) gain for the period — — — — — ( 1,987,122 ) ( 1,987,122 ) Balance - December 31, 2021 — $ — 338,384,171 $ 338,384 17,075,974 $ ( 14,943,621 ) $ 2,470,738 The accompanying notes are an integral part of these financial statements. F- 5 Table of Contents HEALTHY EXTRACTS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Healthy Extracts, Inc. (the “Company”) was incorporated in the State of Nevada on December 19, 2014 as Grey Cloak Tech Inc. On October 23, 2020 , we changed our name from Grey Cloak Tech Inc. to Healthy Extracts Inc. to more accurately reflect our business. The Company has acquired BergaMet NA, LLC and ultimate Brain Nutrients, LLC which market and sell health supplemental products. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 December 31, 2021 and the results of operations and cash flows for the periods presented. The results of operations for the year ending December 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 19, 2021. 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. Actual results could differ from those estimates. Cash 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. Accounts Receivables Accounts receivables are recorded at the invoice amount and do not bear interest. F- 6 Table of Contents Inventory 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 December 31, 2021 and 2020, the total of inventory which was written off as an inventory allowance was $ 1,914,891 and $ 1,892,008 . 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 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. With the acquisition of Ultimate Brain Nutrients on April 3, 2020 the Company added a purchasing value of $ 315,604 in patents to its balance sheet. As of December 31, 2021, the Company believes that based upon qualitative factors, no impairment of indefinite-lived intangible assets is necessary. Goodwill 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. The first 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. The fair value of reporting units is generally determined using the income approach. If the carrying amount of a reporting unit exceeds the reporting unit’s 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 December 31, 2021, after working through our analysis of goodwill during the year ending December 31, 2021. 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 following: ● Fair 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 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 (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. The sum of these values reasonably approximates this approach. F- 7 Table of Contents 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. 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. 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. Our 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: 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 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 December 31, 2020 and for the months ended December 31, 2021 because the revenue was earned from multiple customers. Income Taxes 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. 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 December 31, 2020 and December 31, 2021, the Company did not have any amounts recorded pertaining to uncertain tax positions. F- 8 Table of Contents 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. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 — quoted prices in active markets for identical assets or liabilities Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 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: Schedule of Fair Value of Financial Liability on Recurring Basis Balance, January 1, 2021 $ 7,202 Issued during the year ended December 31, 2021 1,446,469 Change in fair value recognized in operations ( 556,465 ) Converted during the year ended December 31, 2021 ( 804,679 ) Balance, December 31, 2021 $ 92,527 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. 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: (1) Identify the contract with a client; (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. F- 9 Table of Contents 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 year ended December 31, 2021, the Company issued $9550,000 of convertible debt with a bifurcated conversion option. 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 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 obligations. 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. F- 10 Table of Contents 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 – 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. 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 December 31, 2021 of $ 14,943,620 . 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. 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. NOTE 4 – RELATED PARTY For the months ended December 31, 2021 and 2020, the Company had expenses totaling $ 65,000 and $ 51,000 respectively, to an officer and director for salaries, which is included in general and administrative expenses on the accompanying statement of operations. As of December 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 – RELATED PARTY In 2020, the Company converted the outstanding convertible debt which was due to a related party. NOTE 6 – NOTES PAYABLE As of December 31, 2021, the Company had the following: Schedule of Notes Payable Unsecured debt with shareholders of the Company, no due date, 0 % interest, 866 Unsecured debt with shareholders of the Company, no due date, 8 % interest, 170,000 TOTAL $ 170,866 As of December 31, 2021, the Company has an outstanding total of $ 14,118 in interest accrued for the above note. F- 11 Table of Contents NOTE 7 – CONVERTIBLE DEBT As of December 31, 2021, the Company had the following: Schedule of Convertible Debt 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 6,750 Unsecured convertible debt, due 03/17/22 , 10 % interest, default interest at 16 % , converts at $0.05/share. Original note value $340,000 150,000 1 unsecured convertible debt were issued during the third quarter 2021, due 03/31/23 , 6 % interest, converts at $0.05/share. 15,000 SUBTOTAL 171,750 Less: Discount — TOTAL $ 171,750 Below represent the Black-Scholes Option Pricing Model calculations for the above convertible note payables: Payee Number of options valued Value of Convertible Option Unsecured Convertible debt #1 421,432 $ 8,026 Unsecured Convertible debt #2 5,010,000 $ 68,443 Unsecured Convertible debt #3 507,917 $ 16,058 As of December 31, 2021, the Company has an outstanding total of $ 92,527 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 debt. NOTE 8 – STOCKHOLDERS’ EQUITY 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 . 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. F- 12 Table of Contents The Company effectuated a reverse stock split of 1-for-250 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. 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 December 31, 2021, there are no outstanding shares of preferred stock. All the preferred stock was converted in common stock on February 4, 2019. See recent developments for details. Common Share Issuances During the year ended December 31, 2021, the Company issued 29,496,761 shares of common stock. During the fourth quarter 2021, the Company issued 3,500,000 shares of common stock for consulting fees. Additionally, the Company raised during the year over $900,000 in direct security purchase agreements which were converted into 15,403,983 shares of the Company’s common stock. During the third quarter 2021, the Company issued 1,177,778 shares of common stock for advertising and broker fees. 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. Furthermore, 715,000 shares of common stock were issued for marketing services while 1,000,000 shares of common stock were issued for advertising services. During January 2021 the company converted 4,500,000 of securities purchase agreement into common stock shares. 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 stock. Warrant Issuances During the third quarter 2021, the Company issued 6,500,000 warrants to 20 parties at $0.075 per share. 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 December 31, 2021, there were 14,012,000 warrants outstanding, of which 14,004,000 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. On March 18, 2021, the Company issued 715,000 shares of common stock as the compensation for this agreement. Additionally on March 18, 2021, the Company issued 2,000,000 shares of common stock to a company helping secure the note. During the second and third quarters of 2021, the Company entered into several broker agreements to help raise capital for the Company. 1,177,778 shares of common stock were issued in the third quarter as broker fees. And additional 1,000,000 shares of common stock were issued in the second quarter as advertising fees. F- 13 Table of Contents 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. 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 December 31, 2021, the Company approved stock option agreements in the amount of 7,500,000 shares with a strike price of $0.05 to twenty-one individuals. On May 30, 2020, the Company approved stock option agreements in the amount of 12,000,000 shares with a strike price of $0.05 to nineteen individuals. Offering Circular During the first part of the 2021, the Company filed a Regulation A Offering Circular with the U.S. Securities and Exchange Commission. The Offering Circular was qualified during August 2021. NOTE 9 – ACQUISITIONS Acquisition of Ultimate Brain Nutrients, LLC 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. 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 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 Cash $ ( 5,466 ) Current assets 315,604 Current liabilities 0 Net assets acquired $ 310,137 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 . 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 as being fairly valued as of April 3, 2020 so no adjustment was needed under the purchase price method of valuation. F- 14 Table of Contents NOTE 10 – BUSINESS SEGMENT INFORMATION As of December 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 Year ended December 31, 2021. Schedule of Reportable segments CONSOLIDATED HEALTH SUPPLEMENTS CORPORATE BergaMet UBN Revenue 1,676,598 1,676,598 — — Less Selling Fees ( 210,816 ) ( 210,816 ) Cost of Revenue 770,704 770,704 — — Long-lived Assets 715,140 212,413 502,727 — Gain (Loss) Before Income Tax ( 1,975,971 ) ( 701,833 ) ( 136,308 ) ( 1,137,830 ) Identifiable Assets 2,092,341 2,092,341 — — Depreciation and Amortization 5,100 5,100 — — As of December 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 Quarter ended December 31, 2021. CONSOLIDATED HEALTH SUPPLEMENTS CORPORATE BergaMet UBN Revenue 766,372 766,372 — — Less Selling Fees ( 94,783 ) ( 94,783 ) Cost of Revenue 623,248 623,248 — — Long-lived Assets 715,140 212,413 502,727 — Gain (Loss) Before Income Tax ( 1,975,971 ) ( 701,833 ) ( 136,308 ) ( 1,137,830 ) Identifiable Assets 2,092,341 2,092,341 — — Depreciation and Amortization 1,275 1,275 — — NOTE 11 – SUBSEQUENT EVENTS COVID-19 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. On February 22, 2022, the Company entered into a Common Stock Purchase Warrant and a Promissory Note. The warrants are to acquire two million (2,000,000) shares of our common stock, are exercisable for three (3) years at an exercise price of $0.05 per share, and contain a cashless exercise option for the holder. The note is in the principal amount of Two Hundred Thousand Dollars ($200,000), bears interest at a rate of ten percent (10%) per annum, and has a maturity date of February 15, 2023. On March 1, 2022, the Company paid the remaining balance on the One Hundred Fifty Thousand Dollars ($150,000) promissory note that was due on March 17, 2022. The Company evaluated its December 31, 2021 financial statements for subsequent events through March 4, 2022, the date the financial statements were available to be issued. F- 15 Table of Contents ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There are no events required to be disclosed under this Item.