MDWerks, Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is accumulated and communicated to management including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure. In connection with this annual report, as required by Rule 13a -15d and 15d-15e under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of the design and operation of our company’s disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our company’s management, including our company’s principal executive officer and principal financial officer. Based upon that evaluation, our company’s principal executive officer and principal financial officer concluded that as of December 31, 2021 our disclosure controls and procedures were not effective due to the existence of material weaknesses in our internal controls over financial reporting. Management’s Annual Report on Internal Control Over Financial Reporting Management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in SEC guidance on conducting such assessments as of the end of the period covered by this report. Management conducted the assessment based on certain criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. As of December 31, 2021, our controls over our financial reporting were not effective due to the existence of material weaknesses in our internal controls over financial reporting. The matters involving internal controls and procedures that the Company’s management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee and lack of a majority of outside directors on the Company’s board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by the Company’s Chief Financial Officer in connection with the audit of our financial statements as of December 31, 2021 and communicated the matters to our management. Management believes that the material weaknesses set forth in items (2), (3) and (4) above did not have an effect on the Company’s financial results. However, management believes that the lack of a functioning audit committee and lack of a majority of outside directors on the Company’s board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures can result in the Company’s determination to its financial statements for the future years. We are committed to improving our financial organization. As part of this commitment, we will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to the Company: i) Appointing one or more outside directors to our board of directors who shall be appointed to the audit committee of the Company resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; and ii) Preparing and implementing sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements. 13 Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on the Company’s Board. In addition, management believes that preparing and implementing sufficient written policies and checklists will remedy the following material weaknesses (i) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management believes that the hiring of additional personnel who have the technical expertise and knowledge will result proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support the Company if personnel turn over issues within the department occur. This coupled with the appointment of additional outside directors will greatly decrease any control and procedure issues the company may encounter in the future. We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. This annual report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report. We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. Changes in Internal Control over Financial Reporting There were no changes that have affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the year ended December 31, 2021. ITEM 9B. OTHER INFORMATION None 14 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Our executive officers and director are as follows: Name Age Position Michael Gelmon 57 President, Chief Executive Officer, Treasurer, Secretary, Chief Financial Officer and Chairman of the Board of Directors Business Experience PROFESSIONAL ASSOCIATIONS ▪ Member of Law Society of Alberta, Canada Work Experience 2001– Present CEO various public and privately held companies, specializing in workouts/turnarounds; consulting to investment groups 1989 – Present Partner, Britannia Law, Calgary, Canada 1999 – 2003 Proteus Currency Fund Development 1997 – 2001 Gelmon Brothers Real Estate Development and Consulting 1993 – 1997 Vice-President of Acquisitions and Development, Domino’s Pizza of Canada Ltd. 1988 –1989 Student at Law, Bennett Jones, Calgary, Canada Education 1988 Bachelor of Laws (Hons), University of London, England 1985 Bachelor of Arts, University of Calgary, Canada (b) Significant Employees. None. (c) Family Relationships. None. (d) Involvement in Certain Legal Proceedings. 15 No officer, director, or persons nominated for such positions, promoter or significant employee has been involved in the last ten years in any of the following: • Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; • Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); • Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and • Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated. (e) The Board of Directors acts as the Audit Committee and the Board has no separate committees. The Company has no qualified financial expert at this time because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such an expert. The Company intends to continue to search for a qualified individual for hire. (f) Code of Ethics. We do not currently have a code of ethics. Director Independence Our board of directors is currently composed of one member, Michael Gelmon, who does not qualify as an independent director in accordance with the published listing requirements of the NASDAQ Global Market. The NASDAQ independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director, nor any of his family members has engaged in various types of business dealings with us. In addition, our board of directors has not made a subjective determination as to each director that no relationships exist which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, though such subjective determination is required by the NASDAQ rules. Had our board of directors made these determinations, our board of directors would have reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management. Involvement in Legal Proceedings To our knowledge, there have been no material legal proceedings during the last ten years that would require disclosure under the federal securities laws that are material to an evaluation of the ability or integrity of any of our directors or executive officers. Potential Conflicts of Interest We are not aware of any current or potential conflicts of interest with Mr. Michael Gelmon or other business interests and his involvement with MDwerks, Inc. 16 ITEM 11. EXECUTIVE COMPENSATION Summary Compensation Table MDwerks, Inc. has made no provisions for paying cash or non-cash compensation to its sole officer and director. No salaries are being paid at the present time, and none will be paid unless and until our operations generate sufficient cash flows. The table below summarizes all compensation awarded to, earned by, or paid to our named executive officer for all services rendered in all capacities to us for the period from inception through December 31, 2021. Summary Compensation of Named Executive Officers Name and Principal Position Fiscal Year Salary ($) Bonus ($) Stock Awards ($) Option Awards ($) All Other Compensation ($) Total ($) Michael Gelmon 2021 - - - - - 0 Present, Chief Executive Officer, Secretary, Treasurer - - - - - 0 Michael Gelmon 2020 - - - - - 0 President, Chief Executive Officer, Secretary, Treasurer - - - - - 0 Outstanding Equity Awards at Fiscal Year End We did not pay any salaries in 2021 and 2020. None of our executive officer(s) received any equity awards, including, options, restricted stock, performance awards or other equity incentives during the years ended December 31, 2021 and 2020 for MDwerks, Inc. Employment Contracts At this time, MDwerks, Inc. has not entered into any employment agreements with its sole officer and director. If there is sufficient cash flow available from our future operations, the company may enter into employment agreements with our sole officer and director or future key staff members. Stock Awards Plan The company has not adopted a Stock Awards Plan but may do so in the future. The terms of any such plan have not been determined. Director Compensation The Board of Directors of the Company has not adopted a stock option plan. The company has no plans to adopt it but may choose to do so in the future. If such a plan is adopted, this may be administered by the board or a committee appointed by the board (the “Committee”). The committee would have the power to modify, extend or renew outstanding options and to authorize the grant of new options in substitution therefore, provided that any such action may not impair any rights under any option previously granted. MDwerks, Inc. may develop an incentive-based stock option plan for its officers and directors and may reserve up to 10% of its outstanding shares of common stock for that purpose. 17 The table below summarizes all compensation awarded to, earned by, or paid to our directors for all services rendered in all capacities to us for the period inception (April 20, 2015) through December 31, 2021. DIRECTOR COMPENSATION Name Fees Earned or Paid in Cash ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Non-Qualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Michael Gelmon 0 0 0 0 0 0 0 Board Committees We have not formed an Audit Committee, Compensation Committee or Nominating and Corporate Governance Committee as of the filing of this Annual Report. Our Board of Directors performs the principal functions of an Audit Committee. We currently do not have an audit committee financial expert on our Board of Directors. We believe that an audit committee financial expert is not required because the cost of hiring an audit committee financial expert to act as one of our directors and to be a member of an Audit Committee outweighs the benefits of having an audit committee financial expert at this time. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth certain information with respect to the beneficial ownership of our voting securities by (i) each director and named executive officer, (ii) all executive officers and directors as a group; and (iii) each shareholder known to be the beneficial owner of 5% or more of the outstanding common stock of the Company as of December 31, 2021. Beneficial ownership is determined in accordance with the rules of the SEC. Generally, a person is considered to beneficially own securities: (i) over which such person, directly or indirectly, exercises sole or shared voting or investment power, and (ii) of which such person has the right to acquire beneficial ownership at any time within 60 days (such as through exercise of stock options or warrants). For purposes of computing the percentage of outstanding shares held by each person or group of persons, any shares that such person or persons has the right to acquire within 60 days of December 31, 2021 are deemed to be outstanding but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership. The following table sets forth information regarding the number of shares of Common Stock beneficially owned on December 31, 2020, by each person who is known by the Company to beneficially own 5% or more of the Company’s Common Stock, each of the Company’s directors and executive officers, and all of the Company’s directors and executive officers, as a group: On December 21, 2020 we had 18,010,208 shares of common stock issued and outstanding and 10,000,000 shares of Series A Preferred Stock issued and outstanding. Name of Beneficial Owner Common Shares Beneficially Owned Common Ownership Percentage (3) Total Voting Percentage Michael Gelmon (1) – 0% 0% All officers and Directors as a group (1 person) – 0% Davis M. Barnes 1,200,000 6.6% 6.6% Denise Katz as Trustee (2) 1,300,000 7.2% 7.2% Howard Katz & Denise Katz 928,001 5.1% 5.1% Medworks Com Corp 2,139,316 11.8% 11.8% Greater than 5% Common Shareholders 5,567,317 30.7% 30.7% 18 Name of Beneficial Owner Series A Preferred Stock Beneficially Owned (5) Series A Preferred Stock Percentage Total Voting Percentage (6) Ronin Equity Partners, Inc. (4) 10,000,000 100% 99.8% Total Preferred Stockholders 10,000,000 100% 99.8% (1) Michael Gelmon is Chief Executive Officer, Chief Financial Officer, Secretary and Sole Director of the Company. (2) Denise Katz is the Trustee of Louis Gabriel Katz REV TRUST 5 2007 and the Louis Gabriel IRREV Trust 5/24/07 (3) Based on 18,010,208 shares outstanding as of the date of this Form 10-K. (4) Jacob Cohen is the President and CEO of Ronin Equity Partners, Inc. (5) Each share of Series A Preferred Stock is convertible into 100 shares of Common Stock (6) Based on 1,018,010,208 total voting shares, including 18,010,208 shares voted by our common stockholders and 1,000,000,000 voting shares voted by our Series A Preferred Stock holder This table is based upon information derived from our stock records. We believe that each of the shareholders named in this table has sole or shared voting and investment power with respect to the shares indicated as beneficially owned; except as set forth above, applicable percentages are based upon 18,010,208 shares of common stock outstanding. ITEM 13. CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. Our president and sole director provides office space at no charge to the Company in Calgary, Alberta. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Fees paid to Auditors Audit Fees The Company recorded audit fees of $9,500 and $0 for the years ended December 31, 2021 and December 31, 2020, respectively. The SEC requires that before our independent registered public accounting firm is engaged by us to render any auditing or permitted non-audit related service, the engagement be either: (i) approved by our Audit Committee or (ii) entered into pursuant to pre-approval policies and procedures established by the Audit Committee, provided that the policies and procedures are detailed as to the particular service, the Audit Committee is informed of each service, and such policies and procedures do not include delegation of the Audit Committee’s responsibilities to management. We do not have an Audit Committee. Our Board pre-approves all services provided by our independent registered public accounting firm. All of the above services and fees paid during 2021 and 2020 were pre-approved by our Board. PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES Please see the “Exhibit Index,” which is incorporated herein by reference, following the signature page for a list of our exhibits. 19 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MDwerks, Inc. Dated: April 15, 2022 By: /s/ Michael Gelmon Michael Gelmon President and Director Principal Executive Officer Principal Financial Officer Principal Accounting Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Date /s/ Michael Gelmon April 15, 2022 Michael Gelmon President and Director Principal Executive Officer Principal Financial Officer Principal Accounting Officer 20 Exhibit No. Document Description 3.1 Articles of Incorporation (1) 3.2 By-laws (1) 31.1 Certification of Chief Executive Officer pursuant to Rule 13(a)-14(a)/15(d)-14(a) of the Securities Act of 1934 31.2 Certification of Chief Financial Officer pursuant to Rule 13(a)-14(a)/15(d)-14(a) of the Securities Act of 1934 * 32.1 Certification of Principal Executive Officer and Principal Accounting Officer under Section 1350 as Adopted pursuant Section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification of Chief Financial Officer under Section 1350 as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ** 101.INS Inline XBRL Instance Document ( the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) (1) Filed with the SEC on Form SB-2 filed with the SEC on August 12, 2004. * Included in Exhibit 31.1 ** Included in Exhibit 32.1 21