Sun Pacific Holding Corp. 10-K

Item 9A. Controls and Procedures As of the end of the period covered by this Annual Report, our Chief Executive Officer and Chief Financial Officer performed an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on the evaluation and the identification of the material weaknesses in internal control over financial reporting described below, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2018, the Company’s disclosure controls and procedures were not effective. 20 Management’s Report on Internal Control over Financial Reporting Evaluation of Disclosure Controls and Procedures Pursuant to Rules 13a-15(b) and 15-d-15(b) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer of the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. The term “disclosure controls and procedures”, as defined under Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods 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 by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based upon the evaluation of the disclosure controls and procedures at the end of the period covered by this report, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as a result of continuing weaknesses in its internal control over financial reporting principally due to the following: - The Company has not established adequate financial reporting monitoring activities to mitigate the risk of management override, specifically because there are few employees and only one officers with management functions and therefore there is lack of segregation of duties. - An outside consultant assists in the preparation of the annual and quarterly financial statements and partners with the Company to ensure compliance with US GAAP and SEC disclosure requirements. - Outside counsel assists the Company in the external attorneys to review and editing of the annual and quarterly filings and to ensure compliance with SEC disclosure requirements. At such time as the Company raises additional working capital it plans to add staff, initiate training, add additional subject matter expertise in its finance area so that it may improve it processes, policies, procedures, and documentation of its internal control processes. Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information None. 21 PART III Item 10. Directors, Executive Officers, and Corporate Governance; The current Directors and Officers of the Company are as follows: Executive Age Position Nicholas Campanella 54 Chairman of the Board, Chief Executive Officer and Director William Singer * 47 (Former) President and Director Vincent Randanzzo 57 Director Sumair Mitroo** 52 (Former) Director *William Singer resigned from the Board on May 30, 2018, as evidenced by Form 8-K filed on June 6, 2018 ** Sumair Mitroo was removed from the Board on January 31, 2019 pursuant to the Bylaws of the Company as evidenced by Form 8-K filed on February 6, 2019. Nicholas Campanella, Director, CEO, and President is the founder of Sun Pacific Power Corp. and has been its President and a director since its inception in 2009. Mr. Campanella has been a serial entrepreneur. He has managed, owned, and led a number of companies in the development, contracting, insurance and manufacturing industries. From 1996 until 2015 he was the President of CGA Associates, an insurance brokerage company. From 2005 until 2009 he was the President of Northwoods Manufacturing and from 2004 to the present he is the President of Triplet Square, a real estate development company. Prior to 2004 he held positions of Vice President and Account Executive in the insurance industry. He has also served in many roles in community service including as an environmental commissioner and as the chairman of the economic development committee, along with serving as the Grand Knight for the Knights of Columbus. Mr. Campanella attended New York Institute of Technology in 1984, where he majored in Business Management. Vincent Randazzo, Director was recently appointed to the Board of Directors of Sun Pacific Holding Corp. because of his management experience with manufacturing operations and financial reporting. Mr. Randazzo received his Bachelor of Science in Business Administration from Saint Francis College. Mr. Randazzo started his career as an accounting clerk for Agip, USA. Thereafter, he quickly became a Manager of General Accounting for Time Warner Corporation rising to Plant Manager within 10 years with the company. In 1998, Mr. Randazzo joined I.L Walker, Inc., a folding carton manufacturing operation, as Vice President/General Manager. I.L. Walker, Inc. at the time had annual sales of $23,000,000. Mr. Randazzo was responsible for 155 employees, initiated new manufacturing and quality standards. Based on his experience with I.L. Walker, Inc., in 2001, Mr. Randazzo started his own firm, Zapp Packaging, Inc. driving sales from $1,500,000 the first year of operations to $15,000,000 in 2005 when he sold the company. In 2006, Mr. Randazzo joined MyPrint a division of e-Tools Corporation as V.P. of Operations until he was appointed C.E.O. in 2007, where he remains today. Mr. Randazzo’s experience brings expertise in building and growing businesses. William Singer, (Former) President and Director was appointed to the Board of Directors in April 2017. In 1991, Mr. Singer started Bill’s Bus, LLC, a bus transportation service providing routes between Isla Vista, California and Santa Barbara, California. Mr. Singer sold the business in 2007. After selling Bill’s Bus, LLC, Mr. Singer joined Navellier Select, LLC a Fund of Funds operation. Navellier was sold in 2009 to Genesis. In 2010, Mr. Singer joined TruConnect, LLC, a prepaid mobile broadband business as President, which was sold to a private equity firm. Since 2013, Mr. Singer has created Pride Wireless, Inc., a phone service for the LGBTQ community in conjunction with T-Mobile. He currently sits as President for Montecito Investments, LLC, a private investment and sales consulting firm and Summerland Advisors, LLC a wealth management firm. Mr. Singer also sits as Vice President of Life Clips, Inc. (LCLP:OTCQB), a publicly traded company selling Mobeego, a onetime use emergency battery for cell phones. Sumair Mitroo, (Former) Director was appointed to the Board of Directors in April 2017. Mr. Mitroo brings an impressive range of education, research, and proven business experience to the Company. He graduated with a degree in Chemistry from Case Western Reserve University (CWRU). From 1993 to 1995, Mr. Mitroo started in sales in the medical supplies industry with International Medical Supply, Inc. and rose to the rank of V.P. Between 1993 and 1997, Mr. Mitroo spearheaded several joint venture and international license technology collaborations between companies in USA and India as V.P. of Macro International, Inc. From 1998 to 2002, he worked for Geac Computer Corporation (NASDAQ: GEAC; TSE: GAC), and WorldCom/MCI. In 2003, Mr. Mitroo started Mitroo Networks and Communications, Inc., a telecom sales agency involved in providing voice and data solutions for companies worldwide, and in 2004, he started Ashoretree Services, Inc., to help organizations with outsourcing, subcontracting, or in-sourcing their marketing and BPO (Business Process Outsourcing). After starting as in investor in Larasan Pharmaceutical Corp. in 2003, Mr. Mitroo became CEO of Larasan in 2012. He is still currently involved in this role. Mr. Mitroo has been a consultant for business development for several firms. 22 The term of the sitting Board of Directors was effective August 24, 2017 and expires on August 23, 2018. The shareholders shall be duly notified in accordance with the Bylaws of the Company and the laws of the state of Nevada for the appropriate shareholder meeting and request for shareholder voting per a formal proxy statement. Committees As of the date of this Annual Report, the Company’s board of directors does not have any committees. The Board of Directors does not currently have a formal nominating committee as we are deemed a “controlled company” in that our CEO and Chairman, Nicholas Campanella holds greater than 50% voting control. As such, nominations of additional board members or nominees for shareholder election are set forth by Mr. Campanella. Mr. Campanella will consider shareholder nomination. However, there are currently no formal standards for accepting or rejecting such nominations. The Board of Directors does not currently have a formal auditing committee nor a member of the board that is a “audit committee financial expert” as defined by Item 507(d)(5). Legal Proceedings There are currently no legal proceedings, and during the past 10 years there have been no legal proceedings, that are material to the evaluation of the ability or integrity of any of our directors. Family Relationships Nicholas Campanella and Vincent Randazzo are brothers in law. There are no other family relationships among the directors and executive officers of the Company. There is no arrangement or understanding between or among the directors or executive officers of the Company to which a director or executive officer of the Company was or is to be selected as a director. Involvement in Certain Legal Proceedings To our knowledge, during the last ten years, none of our directors and executive officers has: ● Had a 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. ● Been convicted in a criminal proceeding or been subject to a pending criminal proceeding, excluding traffic violations and other minor offenses. ● Been 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. ● Been found by a court of competent jurisdiction (in a civil action), the SEC, or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated. ● Been the subject to, or a party to, any sanction or order, not subsequently reverse, suspended or vacated, of any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. 23 Code of Ethics We do not currently have a code of ethic that applies to any member of the Board of Directors or our executive officers. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers and persons who own more than 10% of the issued and outstanding shares of our common stock to file reports of initial ownership of common stock and other equity securities and subsequent changes in that ownership with the SEC. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the fiscal year ended December 31, 2018 all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners were complied with. Item 11. Executive Compensation None of our officers have received compensation in the last two fiscal years. Compensation of Directors Executive Employment Agreement On December 20, 2014, the Company entered into a five-year employment agreement with Nicholas Campanella, Chief Executive Officer. Under the terms of the agreement, the Company is required to pay a base compensation of $180,000 annually, subject to increases in cost of living and performance bonuses as awarded by the Board of Directors. After 5 years, the agreement is automatically renewed for an additional two years unless terminated by either party. As part of the agreement Mr. Campanella opted to defer, with no interest, the receipt of compensation under the agreement until the Company has the funds to pay its obligation. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The following table sets forth, as of April 4, 2019, each person known by the Company to be the officer or director of the Company or a beneficial owner of five percent or more of the Company’s common stock. Except as noted, the holder thereof has sole voting and investment power with respect to the shares shown. Except as otherwise indicated, the address of each beneficial owner is c/o Sun Pacific Power Corporation, 215 Gordons Corner Road, Manalapan, New Jersey 07726. Name Position Number of Shares of Common Stock Percentage of Common Stock (1) Officers & Directors Nicholas Campanella Chairman of the Board. CEO, & Director 33,897,166 (2) 28.29 % Vincent Randanzzo Director 44,150 * Total Owned by all Officers and Directors 33,941,316 28.33 % (1) Applicable percentage ownership is based on 119,816,697 shares of common stock outstanding as of April 3, 2019. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock that are currently exercisable or exercisable within 60 days of are deemed to be beneficially owned by the person holding such securities for computing the percentage of ownership of such person but are not treated as outstanding for computing the percentage ownership of any other person. Nicholas Campanella, our Chairman and Chief Executive Officer holds 12,000,000 shares of Series A Preferred Stock as of April 3, 2019. The Series A Preferred Stock has voting rights equal to 125 votes on all matters submitted to a vote to the stockholders of the Company, does not have conversion, dividend or distribution upon liquidation rights. As a result, Mr. Campanella has the equivalent to 1,500,000,000 votes. Therefore, although the officers, directors and beneficial holders of shares greater than 5% of the common stock have voting rights equal to 36.75% of the voting rights of the common stock, this amounts to only 3.67% of the total voting rights available. Mr. Campanella thus has a total of 96.33% of the total voting rights. 24 Item 13. Certain Relationships and Related Transactions and Director Independence On August 24, 2017, the Company closed a share exchange agreement with the shareholder of Sun Pacific Power Corporation, a New Jersey corporation whereby the shareholders of Sun Pacific Power Corporation received 284,248,605 shares of common stock (pre-reverse stock split of 50:1) on a pro rata basis. Pursuant to the share exchange agreement, Nicholas Campanella was issued 976,351 shares of Series B Preferred Shares, which automatically converted into 30,126,775 shares of post reverse stock split common shares. Vincent Randazzo, our Director, is the brother-in-law of Nicholas Campanella, our Chairman and Chief Executive Office. On February 7, 2019, MedRecycler-RI, Inc., of which the wholly owned subsidiary of the Company, MedRecycler, LLC, holds fifty one percent (51%), entered into an Indenture of Trust for a Promissory Note in the amount of $6,025,000. Pursuant to the Indenture of Trust, Nicholas Campanella, our CEO and Chairman, provided pledged of personal assets to the note holder, including, real property and all equity ownership in the Company. Mr. Campanella received thirty nine percent (39%) or thirty-nine thousand shares of MedRecycler-RI, Inc. as consideration for his efforts and services in 2019 as well as his agreement to pledge substantial personal assets. Please refer to Note 7 of the financial statements for details related to related party transactions. Item 14. Principal Accounting Fees and Services. The aggregate fees incurred for each of the last two years for professional services rendered by Turner, Stone & Company, LLC, the independent registered public accounting firm for the audit of the Company’s annual financial statements included in the Company’s Form 10-K and review of financial statements for its quarterly report (Form 10-QT) are reported below. The total fees charged by Turner, Stone & Company, LLC in 2018 and 2017 aggregated $29,230 and $4,912, respectively, which includes fees for the 2018 and 2017 audited financial statements and review of the quarterly financial statements for 2018. Audit Taxes Filings Oher Total 2018 $ 29,230 $ - $ - $ - $ 29,230 2017 $ - $ - $ 4,500 $ 412 $ 4,912 25 PART IV Item 15. Exhibits, Financial Statement Schedules Exhibit Number Description of Exhibit Filed 3.1 Amended and Restated Articles of Incorporation filed May 29, 2015 Form 10 October 13, 2015 3.2 Bylaws dated April 5, 2005 Form 10 October 13, 2015 3.3 Designation of Series B and Series C Preferred Stock filed with the state of Nevada on August 11, 2017 Form 8-K August 18, 2017 3.4 Certificate of Amendment filed with the state of Nevada on October 3, 2017 Form 8-K October 13, 2017 3.5 Certificate of Change (Reverse Stock Split) filed with the state of Nevada on October 3, 2017 Form 8-K October 13, 2017 10.1 The Acquisition Agreement between the Company and Sun Pacific Power Corp., dated August 16, 2017 Form 8-K August 29, 2017 10.2 The Spinoff Agreement with the Company, Randy Romano, and Vaughan Dugan, dated August 24, 2017 Form 8-K August 18, 2017 10.3 The Forbearance Agreement between the Company and Nicholas Campanella, dated January 11, 2019. Form 8-K January 14, 2019 10.4 Guarantee of Payment and Performance between the Company and UMB Bank, N.A., date February 7, 2019 Form 8-K February 11, 2019 10.5 Extension of Forbearance Agreement between the Company and Nicholas Campanella, dated April 3, 2019 Herein 31.1 Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Herein 31.2 Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Herein 32.1 Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Herein 32.2 Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Herein 101.INS XBRL Instance 101.SCH XBRL Taxonomy Extension Schema 101.CAL XBRL Taxonomy Extension Calculation 101.DEF XBRL Taxonomy Extension Definition 101.LAB XBRL Taxonomy Extension Labels 101.PRE XBRL Taxonomy Extension Presentation 26 SIGNATURES Pursuant to the requirements 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. Sun Pacific Power Corp. Date: April 4, 2019 By: /s/ Nicholas Campanella Name: Nicholas Campanella Title: Chairman of the Board of Directors, & Chief Executive Officer (Principal Executive Officer) Date: April 4, 2019 By: /s/ Nicholas Campanella Name: Nicholas Campanella Title: Chief Financial Officer (Principal Financial and Accounting Officer) In accordance with the Exchange Act, this report has been signed below by the following persons on April 1, 2019 on behalf of the registrant and in the capacities indicated. Signature Title /s/ Nicholas Campanella Chairman of the Board of Directors, Chief Nicholas Campanella Executive Officer, & Chief Financial Officer (Principal Executive Officer) (Principal Financial and Accounting Officer) /s/ Vincent Randanzzo Director Vincent Randanzzo 27 FINANCIAL STATEMENTS Report of Independent Registered Accounting Firm F-2 Consolidated Balance Sheets as of December 31, 2018 and 2017 F-3 Consolidated Statements of Operations for the Years Ended December 31, 2018 and 2017 F-4 Consolidated Statement of Stockholders’ Deficit for the Years Ended December 31, 2018 and 2017 F-5 Consolidated Statements of Cash Flows for the Years Ended December 31, 2018 and 2017 F-6 Notes to Consolidated Financial Statements F-7 F- 1 R eport of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders Sun Pacific Power Corporation and Subsidiaries Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Sun Pacific Power Corporation and its subsidiaries (the “Company”) as of December 31, 2018 and 2017, and the related consolidated statements of operations, stockholders’ deficit and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2018 and 2017, and the results of its consolidated operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Explanatory Paragraph – Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered recurring losses from operations since inception and has a significant working capital deficiency, both of which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Turner, Stone & Company, L.L.P. Dallas, Texas April 4, 2019 We have served as the Company’s auditor since 2017. F- 2 SUN PACIFIC HOLDING CORP. CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017 December 31, 2018 December 31, 2017 ASSETS Current Assets: Cash and cash equivalents $ 4,851 $ 55,740 Accounts receivable, net of allowance for uncollectable accounts of $145,155 and $118,221, respectively 77,137 76,729 Other current assets 7,234 7,112 Total current assets 89,222 139,581 Property and Equipment, Net 204,951 293,730 Total assets $ 294,173 $ 433,311 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current Liabilities: Accounts payable $ 245,125 $ 188,467 Accounts payable, related party 91,512 85,012 Accrued compensation to officer 631,166 451,166 Accrued expenses 203,670 100,612 Accrued expenses, related party 31,745 27,162 Dividends payable, related party 18,913 12,663 Advances from related parties 612,023 588,517 Project financing obligation 260,000 - Vehicle installment notes payable, current portion 28,943 28,943 Convertible notes payable, net of discounts 423,454 187,184 Convertible notes payable, related party, net of discounts 408,974 403,474 Total current liabilities 2,955,525 2,073,200 Long Term Liabilities: Vehicle installment notes payable, net of current portion 31,724 57,709 Total liabilities 2,987,249 2,130,909 Commitments and contingencies (see Note 7) Stockholders’ Deficit: Preferred stock $0.0001 par value, 20,000,000 million shares authorized: Series A preferred stock: 12,000,000 shares designated; 12,000,000 shares issued and outstanding 1,200 1,200 Series B preferred stock: 1,000,000 shares designated; -0- shares issued and outstanding, respectively - - Series C preferred stock: 500,000 shares designated; -0- and 275,000 shares issued and outstanding, respectively - 28 Common stock $0.0001 par value, 500,000,000 shares authorized; 66,901,354 and 60,833,030 shares issued and outstanding, respectively 6,690 6,083 Additional paid in capital 3,948,051 3,168,626 Accumulated deficit (6,649,017 ) (4,873,535 ) Total stockholders’ deficit (2,693,076 ) (1,697,598 ) Total liabilities and stockholders’ deficit $ 294,173 $ 433,311 The accompanying footnotes are an integral part of these consolidated financial statements. F- 3 SUN PACIFIC HOLDING CORP. CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 2018 AND 2017 2018 2017 Revenues $ 584,650 $ 1,252,675 Cost of Revenues 311,492 750,802 Gross profit 273,158 501,873 Operating expenses: Wages and compensation 517,627 569,609 Professional fees 530,634 332,142 Insurance 2,658 69,090 Rent 39,297 88,865 General and administrative 479,580 373,077 Total operating expenses 1,569,796 1,432,784 Loss from operations (1,296,638 ) (930,911 ) Other Income (Expenses): Loss on settlement of accrued officer salaries - (1,155,767 ) Loss on settlement of debt - (12,650 ) Dividend expense - preferred stock (22,917 ) (34,375 ) Gain on sale of property and equipment - 4,401 Interest expense (455,926 ) (85,065 ) Total other expense, net (478,843 ) (1,283,456 ) Net loss $ (1,775,481 ) $ (2,214,367 ) Net Loss Per Common Share - Basic and Diluted $ (0.03 ) $ (0.13 ) Weighted Average Shares Outstanding - Basic and Diluted 62,471,599 17,269,048 The accompanying footnotes are an integral part of these consolidated financial statements. F- 4 SUN PACIFIC HOLDING CORP CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT YEARS ENDED DECEMBER 31, 2018 AND 2017 Series A Preferred Stock Series B Preferred Stock Series C Preferred Stock Common Stock Additional Paid In Accumulated Total Stockholders’ Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Deficit Balances at December 31, 2016 2,000,000 $ 200 - $ - - $ - $ 97,415,411 $ 9,742 $ 782,930 $ (2,659,169 ) $ (1,866,297 ) Pre Merger Share Issuances: Issuance of common stock in settlement of convertible debt and promissory notes - - - - - - 65,049,488 6,505 (6,505 ) - - Issuance of common stock for services - - - - - - 450,000 45 (45 ) - - Issuance of predecessor common stock in settlement of debt - - - - - - - - 450,000 - 450,000 Effect on reverse merger on August 24, 2017 (2,000,000 ) (200 ) 1,000,000 100 275,000 28 289,835,550 28,984 (862,734 ) - (833,823 ) Effect of 1-for-50 revers split on October 3, 2017 - - - - - - (443,695,440 ) (44,370 ) 44,370 - - Conversion of preferred stock issued for reverse merger - - (1,000,000 ) (100 ) - - 30,856,500 3,086 (2,986 ) - - Settlement of debt assumed in reverse merger - - - - - - 17,052,925 1,705 832,082 - 833,787 Settlement of accrued officer’s salaries 12,000,000 1,200 - - - - 1,250,000 125 1,261,749 - 1,263,074 Issuance of common stock for cash - - - - - - 2,433,665 243 500,990 - 501,233 Issuance of common stock for services - - - - - - 121,683 12 24,324 - 24,337 Issuance of common stock in settlement of debt - - - - - - 63,248 6 12,643 - 12,650 Issuance of common stock warrants for services - - - - - - - - 131,808 - 131,808 Net loss - - - - - - - - - (2,214,367 ) (2,214,367 ) Balances at December 31, 2017 12,000,000 1,200 - - 275,000 28 60,833,030 6,083 3,168,626 (4,873,536 ) (1,697,599 ) Issuance of common stock for cash - - - - - - 1,230,000 123 172,877 - 173,000 Issuance of common stock for services - - - - - - 668,324 67 84,142 - 84,209 Issuance of common stock warrants for services - - - - - - - - 130,641 - 130,641 Issuance of common stock warrants with convertible debt - - - - - - - - 350,000 - 350,000 Issuance of common stock warrants for extension of maturity of debt - - - - - - - - 16,401 - 16,401 Issuance of common stock upon conversion of convertible debt - - - - - - 4,170,000 417 25,335 - 25,752 Redemption of preferred stock - - - - (275,000 ) (28 ) - - 28 - - Net loss - - - - - - - - - (1,775,481 ) (1,775,481 ) Balances at December 31, 2018 12,000,000 $ 1,200 - $ - - $ - 66,901,354 $ 6,690 $ 3,948,051 $ (6,649,017 ) $ (2,693,077 ) The accompanying footnotes are an integral part of these consolidated financial statements. F- 5 SUN PACIFIC HOLDING CORP CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2018 AND 2017 2018 2017 Cash flows from Operating Activities: Net loss $ (1,775,481 ) $ (2,214,366 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 88,779 79,428 Amortization of debt discount - interest expense 348,446 22,000 Allowance for uncollectable accounts 26,934 (160,806 ) Gain on sale of property and equipment - 1,385 Loss on settlement of officer compensation - 1,155,767 Loss on conversion of convertible debt - 12,650 Stock issued for services 84,209 Warrants issued for services 130,641 156,145 Changes in operating assets and liabilities: Accounts receivable (27,342 ) 227,500 Deposits (122 ) (7,112 ) Accounts payable 56,659 (299,213 ) Accounts payable, related party 6,500 (75,000 ) Accrued compensation to officer 180,000 179,998 Accrued expenses 111,875 62,086 Accrued expenses, related party 4,583 27,162 Dividends payable, related party 6,250 9,375 Net cash used in operating activities (758,069 ) (823,002 ) Cash flows from Investing Activities: Advance to related party - - Proceeds from sale of property and equipment - 2,500 Net cash provided by (used in) investing activities - 2,500 Cash flows from Financing Activities: Proceeds from advances from related parties 23,506 321,127 Repayments of advances from related parties - - Proceeds from issuance of common stock 173,000 501,233 Proceeds from the issuance of convertible debt 281,660 - Repayment of convertible debt (5,000 ) Proceeds from project financing obligation 260,000 - Repayment of vehicle installment notes payable (25,985 ) (36,195 ) Net cash provided by financing activities 707,181 786,165 Net decrease in cash (50,888 ) (34,337 ) Cash at beginning of year 55,740 90,077 Cash at end of year $ 4,852 $ 55,740 Supplemental Disclosure of Cash Flow Information: Interest paid $ 24,928 $ - Taxes paid $ - $ - Supplemental Disclosure of Non-Cash Investing and Financing Activities: Original issue discount on convertible notes $ 68,340 $ - Increase in convertible notes and discounts from extension $ 50,000 $ - Issuance of common stock upon conversion of convertible debt $ 25,752 $ - Debt discounts on convertible notes payable $ 366,401 $ - Automatic redemption of preferred shares $ 28 $ - Settlement of amounts due to related party with issuance of common stock $ - $ 450,000 Assumption of convertible debt from reverse merger $ - $ 833,787 The accompanying footnotes are an integral part of these consolidated financial statements. F- 6 SUN PACIFIC HOLDING CORP NOTES TO CONSOLIDATED FINACNIAL STATEMENTS YEARS ENDED DECEMBER 31, 2018 AND 2017 NOTE 1 - DESCRIPTION OF THE BUSINESS Organization The Company was incorporated under the laws of the State of New Jersey on July 28, 2009, as Sun Pacific Power Corporation and together with its subsidiaries, are referred to as the “Company”. On August 24, 2017, the Company entered into an Acquisition Agreement with EXOlifestyle, Inc. whereby the Company became a wholly owned subsidiary of EXOlifestyle, Inc. The acquisition was accounted for as a reverse merger, resulting in the Company being considered the accounting acquirer. Accordingly, the accompanying condensed consolidated financial statements included the accounts of EXOlifestyle, Inc. since August 24, 2017. On October 3, 2017, pursuant to the written consent of the majority of the shareholders in lieu of a meeting, Sun Pacific Holding Corp., f/k/a EXOlifestyle, Inc. (the “Company”) filed a Certificate of Amendment with the state of Nevada to change the name of the Company from EXOlifestyle, Inc. to Sun Pacific Holding Corp. On October 3, 2017, the Company’s board of directors declared a 1 for 50 reverse stock split. All share amounts for all periods presented have been restated to reflect the reverse stock split. Currently, the Company has six (6) subsidiary holdings. Sun Pacific Power Corp which was the initial company that specialized in solar, electrical and general construction, Bella Electric, LLC that in conjunction with the Company operates our electrical contracting work. Bella Electric, LLC is a Pennsylvania limited liability company. The Company also formed Sun Pacific Security Corp., a New Jersey corporation. Currently the Company has not begun operations in the security sector but is reviewing plans to provide residential and commercial security solutions, including installation and monitoring. The Company also formed National Mechanical Group Corp, a New Jersey corporation focused on plumbing operations in the New Jersey and Pennsylvania areas. The Company also formed Street Smart Outdoor Corp, a Wyoming corporation that acts as a holding company for the Company’s state specific operations in unique advertising through solar bus stops, solar trashcans and “street kiosks.” MedRecycler, LLC, is a wholly owned subsidiary duly formed in the state of Nevada. MedRecycler, LLC was created in 2018 to act as a holding company for potential waste to energy projects. MedRecycler, LLC, currently owns 51% of MedRecycler RI, Inc. a Rhode Island Corporation. MedRecycler RI, Inc. was created for the Medical Waste to Energy facility that the Company is attempting to finance and operate in West Warrick, Rhode Island. Description of business Utilizing managements history and contacts in general contracting, coupled with our subject matter expertise and intellectual property (“IP”) knowledge of solar panels and other environmentally friendly technologies, Sun Pacific Holding (“the Company”) is focused on building a “Next Generation” green energy company. The Company offers competitively priced “Next Generation” solar panel and lighting products by working closely with design, engineering, integration and installation firms in order to deliver turnkey solar and other energy efficient solutions. The Company provides solar bus stops, solar trashcans and “street kiosks” that utilize our unique advertising offerings that provide State and local municipalities with costs efficient solutions. The Company provides general, electrical, and plumbing contracting services to a range of both public and commercials customers in support of our goals of expanding our green energy market reach. In conjunction with these general contracting services and as part of our effort to expand our green energy marketplace, we have recently started the process to develop and build out a Waste to Energy plant in the state of Rhode Island. Since August 24, 2017, Nicholas Campanella has put forth all his efforts in trying to revitalize the Company and getting it solvent. Unfortunately, Mr. Campanella has had limited success in raising capital sufficient to kick start expansion of its businesses. Any financing that has been received has been very limited and merely sufficient to cover basic costs of being a public company. As of the date of this filing, revenues are heavily concentrated in operations of the subsidiary Street Smart Outdoor Corp., which operates in the outdoor advertising space. These cashflows, however, have not been sufficient to provide working capital for the parent or to expand operations. Although there are prospective contracting and construction contracts for Sun Pacific Power Corp., a wholly owned subsidiary, in 2018, revenues generated by Sun Pacific Power Corp. have been limited. Despite its best efforts, Sun Pacific Power Corp. and the Company have been unable to secure financing to complete UL testing for the glassless solar panel. As a result, contracts have lapsed, and we are unable to assess the marketability of the glassless solar panel product at this time. F- 7 The Company has been unable to produce positive cashflows since inception resulting in the Company relying heavily upon toxic convertible promissory notes and equity financing. As a result, the Company’s shareholders have suffered from highly dilutive financing. Currently, management is focused on 2 main areas of operations. 1) Expanding the outdoor advertising operated under Street Smart Outdoor Corp. through the engagement of a third-party management service. 2) erecting a waste to energy facility in the state of Rhode Island. Regarding the outdoor advertising, the Company has yet to secure a relationship with a third-party operator that could alleviate some of the cashflow constraints of Street Smart Outdoor. As for the Rhode Island waste to energy project, we currently require additional financing to complete the installation and build out of the facility. Currently, MedRecycler-RI, Inc. is indebted $6,025,000 through a promissory note held by UMB Bank, N.A. as trustee (See Note 10). In order to secure the financing, all interest in MedRecycler-RI, Inc., including minority interests have been pledged. All repayment under the promissory note has been guaranteed by the Company and Street Smart Outdoor Corp. Additionally, in order to secure the financing, Nicholas Campanella, our CEO, has pledged substantial personal assets, including all controlling interest in the Company. Although Mr. Campanella was issued thirty nine percent (39%) interest in MedRecycler-RI, Inc. for his personal contribution, all said interest has been pledged to the Trustee (See Note 10). The success of the waste to energy project we estimate will require no less than $8,500,000 in additional financing and may still not be successful. Even with timely and fully functioning operations, profits derived from the facility will be dedicated to servicing the debt for the foreseeable future. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of estimates in the preparation of financial statements Preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates. Significant estimates include the allowance for doubtful accounts and impairment assessments related to long-lived assets. Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. Cash and cash equivalents For purposes of the consolidated statements of cash flows, cash includes demand deposits and short-term liquid investments with original maturities of three months or less when purchased. As of December 31, 2018, the Federal Deposit Insurance Corporation (FDIC) provided insurance coverage of up to $250,000, per depositor, per institution. At December 31, 2018, none of the Company’s cash balances were in excess of federally insured limits. Accounts Receivable In the normal course of business, we decide to extend credit to certain customers without requiring collateral or other security interests. Management reviews its accounts receivable at each reporting period to provide for an allowance against accounts receivable for an amount that could become uncollectible. This review process may involve the identification of payment problems with specific customers. Periodically we estimate this allowance based on the aging of the accounts receivable, historical collection experience, and other relevant factors, such as changes in the economy and the imposition of regulatory requirements that can have an impact on the industry. These factors continuously change and can have an impact on collections and our estimation process. The Company’s allowance for doubtful accounts totaled $145,155and $118,221 as of December 31, 2018 and 2017, respectively. F- 8 Contingencies Certain conditions may exist as of the date financial statements are issued, which may result in a loss, but which will only be resolved when one or more future events occur or do not occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to pending legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a liability has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable would be disclosed. Fair value of financial instruments The carrying amounts of the Company’s accounts payable, accrued expenses, and shareholder advances approximate fair value due to their short-term nature. The Company’s long-term debt approximates fair value based on prevailing market rates. Property and equipment Property and equipment are stated at cost. Additions and improvements that significantly add to the productive capacity or extend the life of an asset are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over three to five years for vehicles and five to ten years for equipment. Leasehold improvements are amortized over the lesser of the estimated remaining useful life of the asset or the remaining lease term. Impairment of long-lived assets The Company periodically reviews for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be realizable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. At December 31, 2018 and 2017, the Company has not identified any such impairment losses. Income taxes Under ASC Topic 740, “Income Taxes”, the Company is required to account for its income taxes through the establishment of a deferred tax asset or liability for the recognition of future deductible or taxable amounts and operating loss and tax credit carry forwards. Deferred tax expense or benefit is recognized as a result of timing differences between the recognition of assets and liabilities for book and tax purposes during the year. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are recognized for deductible temporary differences and operating losses, and tax credit carry forwards. A valuation allowance is established to reduce that deferred tax asset if it is “more likely than not” that the related tax benefits will not be realized. F- 9 Revenue recognition 100% of the Company’s revenue for the years ended December 31, 2018 and 2017, is recognized based on the Company’s satisfaction of distinct performance obligations identified in each agreement, generally at a point in time as defined by Topic 606, as amended. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. This standard replaced most existing revenue recognition guidance and is codified in FASB ASC Topic 606. Effective January 1, 2018, the Company adopted ASU No. 2014-09 using the modified retrospective method. Under the new guidance, the Company recognizes revenue from contracts based on the Company’s satisfaction of distinct performance obligations identified in each agreement. The adoption of the guidance under ASU No. 2014-09 did not result in a material impact on the Company’s consolidated revenues, results of operations, or financial position. As part of the implementation of ASC 606 the Company must present disaggregation of revenues from contracts with customers into categories that depict how the nature, timing, and uncertainty of revenue and cash flows are affected by economic factors. Quantitative disclosures on the disaggregation of revenue are as follows: 2018 2017 Outdoor Advertising Shelter Revenues 276,591 85,157 Contracting Service Revenues 308,059 1,167,518 584,650 1,252,675 Earnings Per Share Under ASC 260, “Earnings Per Share” (“EPS”), the Company provides for the calculation of basic and diluted earnings per share. Basic EPS includes no dilution and is computed by dividing income or loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution of securities that could share in the earnings or losses of the entity. For the years ended December 31, 2018 and 2017, basic and diluted loss per share are the same as the calculation of diluted per share amounts would result in an anti-dilutive calculation. For the years ended December 31, 2018 and 2017, the following potential shares have been excluded from the calculation of diluted loss per share because their impact was anti-dilutive: 2018 2017 Convertible Debt 201,542,064 18,596,912 Warrants 8,324,757 1,020,000 209,866,791 19,616,912 Recent Accounting Pronouncements ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) - This standard provides a single set of guidelines for revenue recognition to be used across all industries and requires additional disclosures. The Company adopted this standard effective January 1, 2018, with no impact on its results of operations and financial condition. ASU No. 2016-02, Leases (Topic 842) - This standard requires all leases that have a term of over 12 months to be recognized on the balance sheet with the liability for lease payments and the corresponding right-of-use asset initially measured at the present value of amounts expected to be paid over the term. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the lease term. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard will be effective for our interim and annual periods beginning January 1, 2019 and must be applied on a modified retrospective basis to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the potential impact of this standard on its financial position, but we do not expect a material impact on its results of operations and financial condition. There were other new accounting pronouncements issued by the FASB. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s financial statements. F- 10 NOTE 3 - GOING CONCERN The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the years ended December 31, 2018 and 2017, the Company incurred losses from operations of $1,296,638 and $930,911, respectively. The Company had a working capital deficit of $2,866,303 as of December 31, 2018. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on its ability to raise the additional capital to meet short and long-term operating requirements. Management is continuing to pursue external financing alternatives to improve the Company’s working capital position however additional financing may not be available upon acceptable terms, or at all. If the Company is unable to obtain the necessary capital, the Company may have to cease operations. NOTE 4 – PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following as of December 31, 2018 and 2017: 2018 2017 Furniture and equipment $ 271,817 $ 271,817 Vehicles 189,012 189,012 Leasehold Improvements 66,077 66,077 Less: Accumulated Depreciation (321,955 ) (233,176 ) Property and equipment, net $ 204,951 $ 293,730 Depreciation expenses totaled $88,779 and $79,428 for the years ended December 31, 2018 and 2017, respectively. NOTE 5 - BORROWINGS Vehicle installment notes payable The Company’s vehicle installment notes payable consist of several installment notes for various vehicles used in the Company’s operations. At December 31, 2018 and 2017, the notes have annual interest rates between 3.49% and 4.07% and require monthly minimum payments of principal and interest ranging from $370 to $434. The Company’s installment notes are collateralized by the vehicles purchased with the respective installment notes. The notes mature from November 2020 to August 2021. During the year ended December 31, 2017, the Company sold one of the vehicles securing a note with a principal balance of $16,904, which was settled as a result of the sale. As of December 31, 2018 and 2017, the balance of the notes totaled $60,667 and $86,652, respectively. Convertible notes payable On August 24, 2016, the Company issued two two-year unsecured convertible notes payable totaling $200,000 pursuant to a private placement memorandum. The notes matured on August 24, 2018 and have an annual interest rate of 12.5%. At the election of the holder, upon the occurrence of certain events, the notes can be converted into common stock of the Company at a conversion price per share equal to 50% of the average bid price for the 30 consecutive business days prior to conversion. The conversion feature is contingent upon i) the successful filing of a registration statement to become publicly traded, and ii) the company stock has become publicly quoted on the OTC Markets and iii) the conversion price is above $0.10. In August 2018, the holders of the notes agreed to extend the maturity date of the notes to December 31, 2018, in exchange for warrants to acquire 600,000 shares of common stock for an exercise price of $0.31 per share, exercisable over three years. The Company estimated the fair value of the warrants, totaling $16,401, using the Black Scholes Method and recorded an additional discount against the note to be amortized over the extended term of the notes. The notes are carried at $182,184, net of unamortized discounts of $10,666 as of December 31, 2017. The notes are carried at $196,850, with no remaining unamortized discount as of December 31, 2018. The notes are currently past due and have not been converted. F- 11 On August 24, 2017, in connection with the reverse merger, the Company assumed convertible notes with an aggregate principal balance of $833,787. The notes automatically converted into 17,052,925 shares of common stock on October 3, 2017 upon the effective date of the Company’s reverse split in accordance with the convertible note agreements. The notes had a maturity date of October 23, 2017. In April 2018, the Company issued convertible notes with an aggregate principal balance of $350,000, for net proceeds after issuance costs which were recorded as a discount against the debt to be amortized into interest expense through the maturity of the notes, of $281,660. The notes mature in April 2019, accrue interest at an annual rate of 10% and are convertible into common stock at a conversion rate equal to the lesser of $0.05 and 60% times the lowest trading price of the Company’s common stock during the 18 trading days prior to conversion. Because the conversion feature is indexed to the Company’s stock, and there is an explicit cap to the total number of shares issuable upon conversion, the Company determine that the embedded conversion option did not require bifurcation and liability presentation. The investors in the notes also received warrants to acquire an aggregate of 6,349,457 shares of common stock for an exercise price of $0.11 per share, exercisable for 2 years. The Company estimated the fair value of the warrants using the Black Scholes model and the following assumptions: volatility – 261.8% to 268.7%; expected term – 2.0 years; dividend rate – 0.0%; risk free rate – 2.49%, and allocated $173,355 of the proceeds to the warrants, which was recorded as a discount against the debt to be amortized into interest expense through the maturity of the notes. Based on the allocation of proceeds to the debt, the Company determined there was a beneficial conversion feature totaling $176,645, which was recorded as a discount against the debt to be amortized into interest expense through the maturity of the notes. On November 13, 2018, the Company entered into agreements with the holders of the notes to extend the “Prepayment Termination Date” to December 23, 2018, as defined in the respective Promissory Notes in exchange for the addition of $25,000 to the principal of the principal of each note, which was recorded as an additional discount against the note and amortized into interest expense through the extended “Prepayment Termination Date”. During the year ended December 31, 2018, the Company amortized $311,879 of the discounts. As of December 31, 2018, the notes are carried at $226,604, net of unamortized discounts of $156,461. Convertible notes payable, related party On October 23, 2015, a total of $332,474 in advances from a related party was converted into two one-year unsecured convertible notes payable to Nicholas Campanella, Chief Executive Officer of the Company. The notes have an annual interest rate of 6% and are currently past due. At the election of the holder, the notes can be converted into common stock of the Company at a conversion price per share equal to 20% of the average bid price for the three consecutive business days prior to conversion. As of December 31, 2018 and 2017, the balances of the notes totaled $332,474. On August 24, 2016, a total of $75,000 in advances from a related party was converted into a two-year unsecured convertible note payable to Nicholas Campanella, Chief Executive Officer of the Company, pursuant to a private placement memorandum. The note matured on August 24, 2018, has an annual interest rate of 12.5% and is due at maturity. At the election of the holder, upon the occurrence of certain events, the note can be converted into common stock of the Company at a conversion price per share equal to 50% of the average bid price for the 30 consecutive business days prior to conversion. The conversion feature is contingent upon i) the successful filing of a registration statement to become publicly traded, and ii) the company stock has become publicly quoted on the OTC Markets and iii) the conversion price is above $0.10. In connection with this note, the Company issued 75,000 shares of Series B preferred stock, as further described in Note 6. As of December 31, 2018 and 2017, the balance of the notes was $75,000. The notes are carried at $76,500 and $71,000, net of unamortized discounts of $0 and $4,000 as of December 31, 2018 and 2017, respectively. F- 12 Project Financing Obligation In June 2018, the Company received proceeds of $260,000 pursuant to a partnership agreement and related partnership contribution agreements with third party investors, pursuant which investors have agreed to provide financing for no less than (10) ten new bus shelters being installed annually. Each investment in the partnership grants the investor the right to preferential distributions of profits related to the Company’s contract with Rhode Island. The investors receive 100% of the profits from the Rhode Island contract to install 20 bus shelters until 100% of the initial investments are returned. Thereafter, the investors receive 20% of the remaining profits from Rhode Island contract. As of December 31, 2018, no profits have been earned on the Rhode Island contract, no repayments have ocurred and the total amount of investments received totaling $260,00 is reflected on the accompanying consolidated balance sheet as a Project Financing Obligation. Line of credit, related party On October 23, 2015, the Company entered into a line of credit agreement with Nicholas Campanella, Chief Executive Office of the Company, for a total value of $250,000. The line of credit does not bear an interest rate and is payable on demand. As of December 31, 2018 and 2017, the balance of the debt to related party was $161,630 and $138,124, respectively. The Company’s estimated future maturities of the Company’s debt, as of December 31, 2018, are as follows: Year ending December 31, Amount 2019 $ 1,148,991 2020 23,894 2021 13,300 Thereafter - $ 1,186,185 NOTE 6 - PREFERRED STOCK AND COMMON STOCK Preferred stock The Company is authorized to issue 20,000,000 shares of $0.0001 par value preferred stock. As of December 31, 2018 and 2017, the Company has designated 12,000,000 shares of Series A Preferred Stock, 1,000,000 shares of Series B Convertible Preferred Stock, and 500,000 shares of Series C Convertible Stock. Series A Preferred Stock - Each share of Series A Preferred Stock is entitled to 125 votes on all matters submitted to a vote to the stockholders of the Company, and does not have conversion, dividend or distribution upon liquidation rights. In connection with the reverse merger, all of the outstanding shares of Series A Preferred Stock, totaling 2,000,000 shares were cancelled. In October 2017, the Company issued 12,000,000 shares of Series A preferred stock and 1,250,000 shares of common stock to its chief executive officer in settlement of $107,307 of accrued salary. The Company estimated the fair value of the Series A Preferred stock based on control premiums reported in empirical studies for transactions involving similar entities and estimated the fair value of the common stock based on the publicly quoted trading price on the date of settlement. The fair value of the preferred stock was estimated to be approximately $963,000 and the fair value of the common stock was estimated to be approximately $300,000, resulting in a loss on settlement of accrued salary of $1,155,767. Series B Preferred Stock - In connection with the reverse merger, the Company issued 2,000,000 shares of Series B Preferred Stock. Each share of Series B Preferred Stock automatically converted into 30.8565 shares of common stock after giving effect to the reverse stock split that occurred on October 3, 2017. Holders of Series B Preferred Stock is entitled to vote and receive distributions upon liquidation with common stockholders on an as-if converted basis. F- 13 Series C Preferred Stock - In connection with the reverse merger, the Company issued 275,000 shares of Series C Preferred Stock. Holders of Series C Preferred Stock are not entitled to voting rights or preferential rights upon liquidation. Each share of Series C Preferred Stock shall pay an annual dividend in the amount of $0.125 per year, for a total of $0.25, over an eighteen (18) month term, from the date of issuance (the “Commencement Date”). Dividend payments shall be payable as follows: (i) dividend in the amount of $0.0625 per share of Series C Preferred Stock at the end of each of the third quarter and fourth quarter of the first twelve (12) months of the twenty-four (24) month period after the Commencement Date; and (ii) dividend in the amount of $0.03125 per share of Series C Preferred Stock at the end of each of the four quarters of the second twelve (12) months of the twenty-four (24) month period after the Commencement Date. The source of payment of the dividends will be derived from up to thirty-five percent (35%) of net revenues (“Net Revenues”) from the Street Furniture Division of the Corporation following the seventh (7th) month after the Commencement Date. To the extent the amount derived from the Net Revenues of the Street Furniture Division is insufficient to pay dividends of Series C Preferred Stock, if a sufficient amount is available, the next quarterly payment date the funds will first pay dividends of Series C Preferred Stock past due. At the conclusion of twenty-four months after the Commencement Date, and upon the payment of all dividends due and owing on said Series C Preferred Stock, the Series C Preferred Stock shall automatically be redeemed by the Corporation and returned to the Corporation for cancellation, as unissued, non-designated, preferred shares. During the years ended December 31, 2018 and 2017, the Company recorded dividend expense of $22,917 and $34,375, respectively, of which $18,913 is reflected as dividends payable, related party on the accompanying consolidated balance sheet as of December 31, 2018. The series C preferred stock were redeemed during the year ended December 31, 2018. Common stock In January 2017, the Company issued 4,500,000 shares of common stock in settlement of $450,000 due to an affiliate, which was reclassified into additional paid in capital. In January 2017, the Company issued 160,000 shares of the Company’s common stock as compensation for services rendered related to a private placement memorandum dated August 26, 2016. On August 24, 2017, in connection with the reverse merger, the Company issued 289,835,550 shares of common stock to the previous stockholders of the Company. During the year ended December 31, 2017, the Company sold 2,433,665 shares of common stock for net proceeds of $501,233. On August 24, 2017, in connection with the reverse merger, the Company assumed convertible notes with an aggregate principal balance of $833,787. The notes automatically converted into 17,052,925 shares of common stock on October 3, 2017 upon the effective date of the Company’s reverse split in accordance with the convertible note agreements. In connection with the reverse merger, the Company issued 2,000,000 shares of Series B Preferred Stock. The Series B Preferred Stock automatically converted into 30,856,553 shares of common stock after giving effect to the reverse stock split that occurred on October 3, 2017. In October 2017, the Company issued 12,000,000 shares of Series A preferred stock and 1,250,000 shares of common stock to its chief executive officer in settlement of $107,307 of accrued salary. The Company estimated the fair value of the Series A Preferred stock based on control premium reported in empirical studies for transactions involving similar entities and estimated the fair value of the common stock based on the publicly quoted trading price on the date of settlement. The fair value of the preferred stock was estimated to be approximately $963,000 and the fair value of the common stock was estimated to be approximately $300,000, resulting in a loss on settlement of accrued salary of $1,155,767. During the year end December 31, 2017, the Company issued 121,683 shares of common stock for services. The shares had a grant date fair value of $24,337 based on prices obtained in recent sales in private placements. During the year end December 31, 2017, the Company issued 63,248 shares of common stock in settlement of debt in the amount of $3,092 and recognized a loss on settlement of debt of $12,650. During the year end December 31, 2018, the Company sold 1,230,00 shares of common stock for cash of $173,000. During the year end December 31, 2018, the Company issued 668,324 shares of common stock for services rendered with a fair value of $84,209, based on the trading price of the common stock on the date of grant. During the year end December 31, 2018, the Company issued 4,170,000 shares of common stock, upon the conversion of principal and interest on convertible notes totaling $16,935, pursuant to the terms of the convertible note. F- 14 Warrants In September 2017, the Company agreed to issue a warrant to purchase 20,000 shares of common stock for an aggregate exercise price of $10.00 as consideration for consulting services to be provided from October 2017 through March 2018. The Company estimated the fair value of the warrants, $7,000 and recognized $1,167 of expense during the year ended December 31, 2017 based on the portion of the contract period that had expired and the remaining $5,833 during the year end December 31, 2018. In October 2017, the Company issued warrants to acquire 100,000 shares of common stock at an exercise price of $0.10 per share and 900,000 shares of common stock at an exercise price of $45.00 per share, exercisable over 10 years, for services to be rendered over a six-month period. The Company re-measured the warrants as of December 31, 2017, and estimated the fair value of $261,282, of which $130,641 was expensed during each of the years ended December 31, 2018 and 2017. The fair value of the warrants was estimated using the Black Scholes Method and the following assumptions: volatility – 150% - 245%; risk free rate 1.00% to 1.98%; expected term – 2.8 years to 10 years. NOTE 7 - COMMITMENTS AND CONTINGENCIES Employment agreement On December 20, 2014, the Company entered into a five-year employment agreement with Nicholas Campanella, Chief Executive Officer. Under the terms of the agreement, the Company is required to pay a base compensation of $180,000 annually, subject to increases in cost of living and performance bonuses as awarded by the Board of Directors. After 5 years, the agreement is automatically renewed for an additional two years unless terminated by either party. As part of the agreement Mr. Campanella opted to defer, with no interest, the receipt of compensation under the agreement until the Company has the funds to pay its obligation. In October 2017, the Company issued 12,000,000 shares of series A preferred stock and 1,250,000 shares of common stock to its chief executive officer in settlement of $107,307 of accrued salary. At December 31, 2018 and December 31, 2017, the Company had accrued compensation of $631,166 and $451,166, respectively, and recorded the related expenses in ‘general and administrative’ on the accompanying condensed consolidated statements of operations. Lease agreement During March 2017, the Company entered into a five-year lease agreement. Under the terms of the agreement, the Company is obligated to pay monthly rent payments starting at $3,556 and escalating over the life of the lease. Rent expense for the years ended December 31, 2018 and 2017 was $39,297 and $88,865, respectively. Future minimum rental payments under this agreement are as follows: Year ending December 31, Amount 2019 $ 44,648 2020 45,764 2021 46,908 2022 7,850 $ 145,170 F- 15 Significant customers For the years ended December 31, 2018 and 2017, the Company had the following customer concentrations: Percentage of Revenues Accounts Receivable as of 2018 2017 December 31, 2018 Customer A * 32 % - Customer B 42 % 29 % $ 12,698 Customer C * 13 % - Customer D * * $ 49,000 * Less than 10% Legal Matters From time to time, claims are made against the Company in the ordinary course of business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting the Company from selling one or more products or engaging in other activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on the Company’s results of operations for that period or future periods. The Company is not presently a party to any pending or threatened legal proceedings. NOTE 8 - RELATED PARTY TRANSACTIONS Shareholder advances For purposes of these consolidated financial statements, Summit Trading Limited, Zimmerman LLC, the Campanella family, Jody Samuels, Frank Capria, and Triplet Square LLC are considered related parties due to their beneficial ownership (shareholdings or voting rights) in excess of 5%, or their affiliate status, during the years ended December 31, 2018 and 2017. During the years ended December 31, 2018 and 2017, the affiliates made non-interest bearing advances of $23,506 and $321,127, respectively. The balance of these advances, which are due on demand and include the Line of Credit (See Note 5), totaled $612,023 and $588,517 as of December 31, 2018 and 2017, respectively. Included in accounts payable related parties as of December 31, 2018 and 2017, are expenses incurred with these affiliates totaling $91,512 and $85,012, respectively. Management fees paid with common stock During the year ended December 31, 2016, the Company incurred expenses with management and affiliates totaling $450,000 for services provided to the Company. On January 5, 2017, the Company issued 4,500,000 shares of the Company’s common stock to settle the liability. NOTE 9 – INCOME TAXES The Company accounts for income taxes in accordance with ASC 740 which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim period, disclosure and transition. There were no unrecognized tax benefits as of December 31, 2018 and 2017. The following table summarizes the significant differences between the U.S. Federal statutory tax rate and the Company’s effective tax rate for financial statement purposes for the years ended December 31, 2018 and 2017: 2018 2017 U.S. Federal Statutory Tax Rate 21.00 % 34.00 % State taxes 5.53 % 4.62 % Permanent items - % (47.22 )% Chane in future tax rates - % (6.58 )% Change in valuation allowance (26.53 )% 15.17 % Totals 0.00 % 0.00 % F- 16 The tax effects of temporary differences that give rise to deferred tax assets and liabilities as of December 31, 2018 and 2017 are summarized as follows: 2018 2017 Deferred Tax Assets: Net operating loss carry-forwards $ 1,368,000 $ 695,000 Accrued expenses 168,000 120,000 Total deferred tax assets 1,536,000 815,000 Less: Valuation allowance (1,536,000 ) (815,000 ) Total deferred tax assets and liabilities, net $ — $ — As of December 31, 2018, the Company has available net operating loss carry forwards of approximately $5.2 million which begin to expire in 2036. The Company assesses the recoverability of its net operating loss carry forwards and other deferred tax assets and records a valuation allowance to the extent recoverability does not satisfy the “more likely than not” recognition criteria. The Company continues to maintain the valuation allowance until sufficient positive evidence exists to support full or partial reversal. As of December 31, 2018 the Company had a valuation allowance totaling $1,536,000 against its deferred tax assets due to insufficient positive evidence, primarily consisting of losses within the taxing jurisdictions that have tax attributes and deferred tax assets. On December 22, 2017, Tax Cuts and Jobs Act (the “Act”) was signed into law. The Act decreases the U.S. corporate federal income tax rate from a maximum of 35% to a flat 21% effective January 1, 2018. The impact of the re-measurement on the Corporation’s net deferred tax asset, as of December 31, 2017, was an approximately $31,000 decrease in deferred tax assets, with a corresponding decrease in the Company’s valuation allowance, and no impact on income tax expense. The Act also includes a number of other provisions including, among others, the elimination of net operating loss carrybacks and limitations on the use of future losses, the repeal of the Alternative Minimum Tax regime and the repeal of the domestic production activities deduction. These provisions are not expected to have a material effect on the Corporation. Given the significant complexity of the Act and anticipated additional implementation guidance from the Internal Revenue Service, further implications of the Act may be identified in future periods. NOTE 10 – SUBSEQUENT EVENTS In January 11, 2019, the Company entered into that certain Forbearance Agreement between the Company and Nicholas Campanella. Mr. Campanella is owed approximately $648,400 in principal and interest on loans and lines of credit issued by the Company. Those debt obligations are currently in default. As consideration for the forbearance of those debts, the Company has agreed to provide a pledge of 100% membership interest in MedRecycler, LLC, and wholly owned subsidiary of the Company organized in the state of Nevada which holds 51,000 shares of MedRecycler-RI, Inc. as security against the moneys owed. The amounts owed to Mr. Campanella date back nearly five years and represent cash payments made by Mr. Campanella to Sun Pacific Power Corp. On April 3, 2019, Mr. Campanella agreed to extend the forbearance until December 31, 2020. In order to secure financing for the MedRecycler-RI, Inc. West Warrick, Rhode Island waste to energy facility, Mr. Campanella agreed that upon initial financing of the project, he shall pledge substantially all of his holdings in the Company, assign his pledges in MedRecycler, LLC, and certain properties held by Mr. Campanella, personally, in order to collateralize the debt obligations. As consideration for his inducement, the Board of Directors has deemed it fair consideration to issue Mr. Campanella 39,000 shares of MedRecycler-RI, Inc. In addition, MedRecycler-RI, Inc. has engaged the services of Marmac Capital Advisors, LLC and Eilers Law Group, P.A. to oversee, negotiate and to facility the financing and capital structure MedRecycler-RI, Inc. As neither party has received compensation for their services for the Company or MedRecycler-RI, Inc. since August of 2018, the Board of Directors has deemed it fair consideration to issue Marmac Capital Advisors, LLC and Eilers Law Group, P.A. 8,000 and 2,000 shares of MedRecycler-RI, Inc., respectively. As a result, the Company shall maintain 51% of the ownership of MedRecycler-RI, Inc. through its MedRcycler, LLC holdings. F- 17 On February 7, 2019, pursuant to an Indenture of Trust entered into by our subsidiary, MedRecycler-RI, Inc., a Rhode Island corporation and UMB Bank, N.A., a national banking association (“UMB”) (the “Indenture”), Sun Pacific Holding Corp. (the “Company”) entered into that certain Guarantee of Payment and Performance with UMB acting as Trustee, whereby the Company agreed to guarantee any and all payments and/or other obligations owed by MedRecycler-RI, Inc. pursuant to the Indenture. In order to secure the financing described herein, Mr. Campanella, Marmac Capital Advisors, LLC and Eilers Law Group, P.A. have further agreed to pledge, upon funding, 100% of their ownership in MedRecycler-RI, Inc. as well as Mr. Campanella’s assignment of his pledge from the Company of 100% of the membership interests of MedRecycler, LLC. As a result, 100% of MedRecycler-RI, Inc. will be pledged, upon funding, to the lending party as security for the note and/or bond. Under the terms of the Indenture, MedRecycler-RI, Inc. issued a promissory note in the amount of $6,025,000.00 as bridge financing for the initial buildout and payment for the purchase of certain equipment and other costs related to a waste to energy facility in the state of Rhode Island (the “Note”). The Note is generally secured by all assets of MedRecycler-RI, Inc. as well as certain pledges, guarantees, and other collateral made by MedRecycler-RI, Inc. and affiliates of the Company, including the Guarantee of Payment and Performance disclosed herein. The Note matures on January 29, 2020. Interest payments are generally prepaid in a segregated account coming due July 29, 2019 and January 29, 2020. The intent is to have the Note paid down with larger long-term financing through a separate indenture of trust for approximately $14,500,000. We assume that any replacement long-term financing shall also require, at a minimum, the same pledges, guarantees, and other collateral. In the event that additional financing is not secured, the Trustee will likely foreclose upon the pledges and other interests and assume control of the Company. As of today, the transaction described above only exacerbates the insolvency of the Company. We cannot ensure that we will avoid bankruptcy even with the success of the Rhode Island Project as we do not foresee any cashflows that can be allocated for maintain operations of the Company. 53,140,000 shares issued for principal & interest on conv. notes totaling $94,696 F- 18