RIII Renavotio Inc (CE)

Renavotio, Inc. (the “Company”) was incorporated under the laws of State of Nevada on January 30, 2013 under the corporate name, Altimo Group Corp. On August 22, 2014, the Company changed its name to Success Entertainment Group International, Inc. On July 29, 2020, the Company changed its name to Renavotio, Inc.

On April 3, 2020, the Company entered into an acquisition agreement to acquire Renavotio Infratech, Inc. (“Infratech”), a Delaware corporation, pursuant to which the Company adopted a new business plan consisting of Infratech, an underground infrastructure installation including fiber optic, 5G, and Medical Infrastructure, including personal protection equipment sales and production. Prior to the acquisition, Infratech had no operations, assets or liabilities.

On April 3, 2020, Steve Chen resigned as the Company’s Chairman, Chris (Chi Jui) Hong resigned as the Company’s Chief Executive Officer/Director, and Brian Kistler resigned as President. Also, on April 3, 2020, William Robinson was appointed as the Company’s Chairman, Chief Executive Officer, and President. Following this appointment, the Company’s Board of Directors consisted of William Robinson, Steve Andrew Chen, and Brian Kistler.

On July 15, 2020, the Company completed the purchase of Utility Management Corp. (“UMC”) and its two wholly owned subsidiaries, Utility Management & Construction, LLC (“UMCCO”) and Cross-Bo Construction, LLC (“Cross-Bo). UMCCO, an Oklahoma Limited Liability Company formed on November 29, 2006, provides consulting, operational management and maintenance services to small towns or county CO-OPS that operate their own water and sewer systems. Cross-Bo, an Oklahoma Limited Liability Company formed on December 22, 2004, provides services on infrastructure projects, specializing in utility system installation. During 2020, the Company issued 18,571,428 shares of common stock valued at $1,300,000 and assumed the assets and liabilities of UMC.

On August 29, 2020 the Company sold its 3 overseas non-core operating subsidiaries, Taiwan Limited, Success Events (Hong Kong) Limited and Double Growth, pursuant to an agreement with Success Holding Group Corp. (“SHGR”). SHGR agreed to assume all of the liabilities associated with the overseas operations, complete its original acquisition of RIII, and the Company agreed to issue to SHGR 6,000,000 common stock restricted shares of the Company’s stock.

On July 29, 2020, the Company filed an application with FINRA for a name change to Renavotio, Inc. (“RI”) to better illustrate its current business operations, and also filed with FINRA for a new trading symbol, RIII. On October 11, 2020, FINRA approved the name change and the new trading symbol.

On October 21, 2020, the Company entered into an agreement to purchase Tritanium Labs USA, Inc., an Oklahoma company and its subsidiaries, Tritanium Labs, LLC, an Illinois Limited Liability Company, TruCleanz Distribution, Inc., an Oklahoma Corporation, and Pro N95 USA, LLC, a New Jersey Limited Liability Company. The purchase price of $6,000,000 provides for: (i) an initial payment of $250,000) and (ii) such number of shares of the Parent’s common stock, par value $0.0001 per share (“Parent Stock”), as shall be equal to (x)$5,750,000 divided by (y) (1) [$.12] (the “Share Consideration”). 75% of the number of shares constituting the Share Consideration is required to be delivered to the Seller as part of the Closing Consideration and 25% of such shares designated as Holdback Shares will be held back by Buyer to secure Seller’s indemnity obligations and will be released to Seller upon the expiration of 1 year from the Closing Date. The agreement has not closed as of the date these financial statements were issued.

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries:

During the years ended December 31, 2020 and 2019, the Company had a net loss of approximately $1,753,000 and $1,450,000, respectively. For the six months ended June 30, 2021, the Company had a net loss of approximately $462,000. These factors raise substantial doubt about the Company’s ability to continue to operate as a going concern for the next twelve months from the issuance of these financial statements. The Company’s ability to continue in existence is dependent on its ability to develop additional sources of capital, and/or achieve profitable operations and positive cash flows. Management’s plans with respect to operations include raising additional capital through sales of equity or debt securities as may be necessary to pursue its business plans and sustain operations until such time as the Company can achieve profitability. However, there can be no assurance that management will be successful in obtaining additional funding or in attaining profitable operations. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Interim Financial Statements

The accompanying unaudited financial statements have been prepared in accordance with the instructions from Regulation S-X and do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim period(s), and to make the financial statements not misleading, have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim period(s) are not necessarily indicative of operations for a full year.

Basis of Presentation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries which require consolidation. Inter-company transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

For purposes of reporting cash flows, the Company has defined cash and cash equivalents as all cash in banks and highly-liquid investments available for current use with an initial maturity of three months or less to be cash equivalents. The Company had no cash equivalents at June 30, 2021 or December 31, 2020.

The Company maintains its cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). The FDIC provides coverage of up to $250,000 per depositor, per financial institution, for the aggregate total of depositors’ interest and non-interest bearing accounts. At June 30, 2021, none of the Company’s cash balances were in excess of FDIC limits. The Company has not experienced any losses on these accounts and management does not believe that the Company is exposed to any significant risks.

Accounts Receivable

UMCCO’s accounts receivable are the result of contracts which require monthly billings for services, installations, and maintenance provided by the Company up to the respective monthly billing date. Cross-Bo’s accounts receivable are the result of construction activity, consisting of utility system installation, provided by the Company up to the respective billing date. Accounts receivable is recorded at the invoiced amount and do not bear interest.

Some billed balances are not paid by customers pursuant to retainage provisions within their respective contracts. The balances billed but not paid by customer pursuant to retainage provisions in these contracts are generally due and paid upon completion of the contracts and acceptance by the customer. Based on contract terms and historical collections, the Company expects the retainage balances to be collected within 12 months of the balance sheet date.

The allowance for doubtful accounts is the Company’s best estimate of the probable amount of credit losses in the Company’s existing accounts receivable. A considerable amount of judgment is required in assessing the realization of receivables. Relevant assessment factors include the creditworthiness of the customer and prior collection history. Balances over 90 days past due are reviewed individually for collectability. Account balances are charged off against the allowance after all reasonable means of collection are exhausted and the potential for recovery is considered remote. The allowance requirements are based on the most current facts available and are re-evaluated and adjusted on a regular basis and as additional information is received. During the six months ended June 30, 2021, the Company recorded no bad debt expense. The $328,118 included in the allowance at June 30, 2021, include billed and earned balances which remain unpaid by customers.

Inventory

Inventory is composed of finished goods inventory, specifically personal protective equipment, valued using weighted average cost, and includes acquisition cost, product freight in, and packaging costs. Slow moving and obsolete inventories are written down based on a comparison of on-hand quantities to historical and projected usages. The Company utilizes a third-party service to manage and secure the Company’s inventory.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Maintenance and repairs are charged to operations as incurred. Depreciation is based on the straight-line method over the estimated useful lives of the related assets. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in operations in the period realized.

Depreciation is computed on the straight-line method with useful lives as follows:

Recoverability of Long-Lived Assets

The Company reviews its long-lived assets on a periodic basis, whenever events and changes in circumstances have occurred which may indicate a possible impairment. The assessment for potential impairment will be based primarily on the Company’s ability to recover the carrying value of its long-lived assets from expected future cash flows from its operations on an undiscounted basis. If such assets are determined to be impaired, the impairment recognized is the amount by which the carrying value of the assets exceeds the fair value of the assets. Fixed assets to be disposed of by sale will be carried at the lower of the then current carrying value or fair value less estimated costs to sell.

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when management assesses that it is probably that a liability has been incurred and the amount can be reasonable estimated.

Income Taxes

The Company accounts for income taxes utilizing the liability method of accounting. Under the liability method, deferred taxes are determined based on differences between financial statement and tax bases of assets and liabilities at enacted tax rates in effect in years in which differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to amounts that are expected to be realized.

The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740-10, “Accounting for Uncertainty in Income Taxes.” This interpretation requires recognition and measurement of uncertain income tax positions using a “more-likely-than-not” approach. The Company evaluates its tax positions on an annual basis, and as of December 31, 2020, no additional accrual for income taxes is necessary. The Company’s policy is to recognize both interest and penalties related to unrecognized tax benefits expected to result in payment of cash within one year are classified as accrued liabilities, while those expected beyond one year are classified as other liabilities. The Company has not recorded any interest or penalties since its inception. The Company is required to file income tax returns in the U.S. federal tax jurisdiction and in various state tax jurisdictions and the prior three fiscal years remain open for examination by federal and/or state tax jurisdictions. The Company is currently not under examination by any other tax jurisdictions for any tax year.

Revenue Recognition

UMCCO recognizes consulting and operational management service revenues on a  monthly basis and recognizes maintenance and repair revenues as services are performed.

Infratech recognizes revenues from the sale of personal protective equipment when performance obligations are satisfied, which occurs when materials are shipped to the customer.

Renavotio recognizes revenues from training seminars upon completion of the training seminar when services have been provided.

Certain of the Company’s contracts require monthly billings consisting of services performed and materials used through the billing date. Accordingly, the Company does not incur expenses which are not billed or bill customers for unearned amounts. Performance obligations are satisfied as services are performed and materials used for which control has been transferred to the customer upon installation. At June 30, 2021 and December 31, 2020, the Company had no unsatisfied performance obligations. See Note 9 for disaggregated revenues and customer concentrations.

Advertising Costs

The costs of advertising are expensed as incurred. Advertising expenses are included in the Company’s operating expenses. During the six months ended June 30, 2021, and 2020, the Company had no advertising expenses.

Share Based Compensation

The Company accounts for share-based compensation in accordance with the fair value recognition provisions of the FASB ASC No. 718 and No. 505. The Company issues restricted stock to employees for their services. Cost for these transactions are measured at the fair value of the equity instruments issued at the date of grant. These shares are considered fully vested and the fair market value is recognized as expense in the period granted. The Company also issues restricted stock to consultants for various services. Costs for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment only if there is sufficient disincentive to ensure performance or (ii) the date at which the counterparty’s performance is complete. The Company recognizes consulting expenses and a corresponding increase to additional paid-in-capital related to stock issued for services. For agreements requiring future services, the consulting expense is to be recognized ratably over the requisite service period.

Basic and Diluted Loss Per Share

Basic net loss/income per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share (EPS) include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options, warrants and convertible notes. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive for periods presented.

Recently Issued Accounting Standards

During the six months ended June 30, 2021, and subsequently, there were several 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 consolidated financial statements.

Subsequent Events

The Company has evaluated all transactions through the date the consolidated financial statements were issued for subsequent event disclosure consideration.

Depreciation expense was $183,733 and $-0- for the six months ended June 30, 2021, and 2020, respectively.

Convertible Notes Payable

On October 22, 2019, the Company completed a Securities Purchase Agreement, dated as of September 5, 2019 under which the Company issued a 5% Convertible Note in the aggregate principal amount of $75,000 for purchase price of $67,500. The Note will mature on September 5, 2020. The Note is convertible into shares of common stock at any time on or after the 180th calendar day after the issue date and the conversion price is equal to the lower of (i) the lowest closing price of the Common Stock during the twenty (20) consecutive day trading period immediately preceding the issuance date, or (ii) 50% multiplied by the lowest traded price of the Common Stock during the twenty (20) consecutive day trading period immediately preceding the date of the conversion. During the year ended December 31, 2020, this note was fully converted into 8,600,000 shares of the Company’s common stock.

On November 15, 2019, the Company completed a Securities Purchase Agreement, under which the Company issued a 5% Convertible Note in the aggregate principal amount of $75,000 for purchase price of $67,500. The Note will mature on July 31, 2020. The Note is convertible into shares of common stock at any time after the issuance date and the conversion price is equal to the lower of (i) the lowest closing price of the Common Stock during the twenty (20) consecutive day trading period immediately preceding the issuance date or (ii) 50% multiplied by the lowest traded price of the Common Stock during the twenty (20) consecutive day trading period immediately preceding the date of the conversion. During the year ended December 31, 2020, this note was fully converted into 7,750,000 shares of the Company’s common stock.

On November 22, 2019, the Company completed a Securities Purchase Agreement, under which the Company issued a 5% Convertible Note in the aggregate principal amount of $40,500 for purchase price of $36,500. The Note will mature on November 22, 2020. The Note is convertible into shares of common stock at any time after the issuance date and the conversion price is equal to the lower of (i) 50% multiplied by the lowest “Trading Price” (defined below) (representing a discount rate of 50% during the prior date of the Note) or (ii) the Variable Conversion Price (defined below) (subject to equitable adjustment as further described herein). The “Variable Conversion Price” meaning, 50% multiplied by the Market Price (representing a discount rate of 50%). “Market Price” means, for any security as of any date, the lowest traded price on the Over-the-Counter Pink Marketplace, OTCQB, or applicable trading market (the “Principal Market”) as reported by a reliable reporting service (“Reporting Service”) designated by Crown Bridge Partners (i.e. Bloomberg) or, if the Principal Market is not the principal trading market for such security, on the principal securities exchange or trading market where such security is listed or traded or, if the lowest intraday trading price of such security is not available in any of the foreign manners, the lowest intraday price of any market makers for such security that are quoted on the OTC Markets. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Company and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such notes. During the year ended December 31, 2020, this note was fully converted into 10,181,813 shares of the Company’s common stock.

On May 4, 2020, the Company completed a Securities Purchase Agreement, under which the Company issued a 12% Convertible Note in the aggregate principal amount of $103,000 maturing on May 4, 2021. The Company entered into a settlement agreement and on November 3, 2020, the $103,000 note, plus $48,971 in penalties, was paid in full.

On June 8, 2020, the Company completed a Securities Purchase Agreement, under which the Company issued a 12% Convertible Note in the aggregate principal amount of $63,000 maturing on June 8, 2021. On December 3, 2020, the Company entered into a settlement agreement at which time the $63,000 note, plus $29,878 in penalties, was paid in full.

On July 7, 2020, the Company completed a Securities Purchase Agreement, under which the Company issued a 6% Convertible Note in the aggregate principal amount of $112,000 maturing on July 7, 2021. The note has a fixed conversion price of $0.07 per share of common stock. During the quarter ended December 31, 2020, the Company repaid $13,070 of the principal. During the quarter ended March 31, 2021, the Company repaid $39,572 of the principal. During the quarter ended June 30, 2021, the Company repaid the remaining principal of $59,358. At June 30, 2021 and December 31, 2020, the remaining principal balance of the note totaled $-0- and $98,930, respectively.

On July 20, 2020, the Company completed a Securities Purchase Agreement, under which the Company issued a 6% Convertible Note in the aggregate principal amount of $112,000 maturing on July 20, 2021. The note has a fixed conversion price of $0.07 per share of common stock. During the quarter ended December 31, 2020, the Company repaid $13,440 of the principal. During the quarter ended March 31, 2021, the Company repaid $49,280 of the principal. During the quarter ended June 30, 2021, the Company repaid $44,640 of the principal. At June 30, 2021 and December 31, 2020, the remaining principal balance of the note totaled $4,640 and $98,560, respectively.

On September 18, 2020, the Company completed a Securities Purchase Agreement, under which the Company issued a 10% Convertible Note in the aggregate principal amount of $112,500 maturing on June 18, 2021. The note has a fixed conversion price of $0.12 per share of common stock. At June 30, 2021 and December 31, 2020, the remaining principal balance of the note totaled $112,500, respectively. On March 17, 2021, the Company issued 500,000 to the noteholder in exchange for the noteholder agreeing not to convert the Convertible Note prior to May 20, 2021.

On October 28, 2020, the Company completed a Securities Purchase Agreement, under which the Company issued a 10% Convertible Note in the aggregate principal amount of $112,500 maturing on July 28, 2021. The note has a fixed conversion price of $0.12 per share of common stock at maturity. During the quarter ended June 30, 2021, the Company repaid $47,250 of the principal. At June 30, 2021 and December 31, 2020, the remaining principal balance of the note totaled $65,250 and $112,500, respectively.

On December 7, 2020, the Company completed a Securities Purchase Agreement, under which the Company issued a 10% Convertible Note in the aggregate principal amount of $112,500 maturing on September 7, 2021. The note has a fixed conversion price of $0.12 per share of common stock. During the quarter ended June 30, 2021, $20,777 of the note was converted in 700,000 shares of common stock and the Company repaid the principal balance. At June 30, 2021 and December 31, 2020, the remaining principal balance of the note totaled $-0- and $112,500, respectively.

The debt discounts for these convertible notes are amortized over the term of the notes. For the six months ended June 30, 2021, amortization of debt discounts on these convertible notes totaled $34,012. At June 30, 2021 and December 31, 2020, the unamortized discounts on the convertible notes totaled $789 and $34,801, respectively.

Notes Payable

On March 27, 2018, UMCCO entered a SBA Note Payable agreement for cash proceeds totaling $1,021,000. The note, which is secured by all UMCCO’s assets, requires monthly principal and interest payments of $10,125 until maturity on March 27, 2031 with interest at prime plus 2.75%. During the year ended December 31, 2020, UMCCO repaid $26,532 of the principal and received principal and interest relief from the SBA under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) totaling $27,457 and $21,979, respectively. At June 30, 2021 and December 31, 2020, the unpaid principal balance of the note totaled $876,609 and $891,062, respectively.

On March 27, 2018, UMCCO entered into a SBA note payable agreement for cash proceeds totaling $50,000 which was funded in August 2019. The note required monthly interest only payments at prime plus 3.25% with unpaid principal due at maturity on March 21, 2020. Due to the ongoing COVID-19 pandemic, the lender has not held UMCCO in default. On November 12, 2020, the maturity date of the note was extended to May 12, 2021. On June 17, 2021, the note was renewed through June 17, 2023. Under the renewal, the interest rate was amended to 6.00% and UMCCO is required to make monthly principal and interest payments totaling $2,216 until maturity. At June 30, 2021 and December 31, 2020, the unpaid principal balance of the note totaled $50,000 and $49,523, respectively.

On April 14, 2020, pursuant to the Paycheck Protection Program under the CARES Act, UMCCO received a two-year loan for $211,518. Interest is deferred for six months, then is at 1% until maturity in April 2022. At December 31, 2020, the unpaid principal balance of the note totaled $211,518. The loan and related interest of $1,569 were forgiven on January 6, 2021.

On March 1, 2021, pursuant to the Paycheck Protection Program, UMCCO received a five-year loan for $340,412. Interest is deferred until the loan forgiveness amount is determined, then is at 1% until maturity in March 2026. At June 30, 2021, the unpaid principal balance of the note totaled $340,412. UMCCO used the loan proceeds for payroll.

On November 1, 2018, Cross-Bo entered a SBA Note payable agreement for $1,569,800. The note, which is secured by all Cross-Bo’s assets, requires monthly principal and interest payments of $19,049 until maturity on November 1, 2028 with interest at prime plus 2.75%. During the year ended December 31, 2020, Cross-Bo repaid $38,268 of the principal and received principal and interest relief from the SBA under the CARES Act totaling $57,617 and $51,992, respectively. During the six months ended June 30, 2021, Cross-Bo repaid $61,856 of the principal. At June 30, 2021 and December 31, 2020, the unpaid principal balance of the note totaled $1,298,105 and $1,359,961, respectively.

On November 16, 2018, Cross-Bo entered a zero interest $84,200 Note Payable agreement. The note, which is unsecured, requires monthly principal payments of $1,403 beginning on December 15, 2028 until maturity on November 14, 2033. At June 30, 2021 and December 31, 2020, the unpaid principal balance of the note totaled $84,200, respectively.

On December 7, 2018, Cross-Bo entered into a SBA note payable agreement for cash proceeds totaling $50,000 which was funded in January 2019. The note requires monthly interest only payments at prime plus 3.25% with unpaid principal due at maturity on December 7, 2028. During the year ended December 31, 2020, Cross-Bo repaid $1,000 of the principal. On June 17, 2021, the note was renewed through June 17, 2023. Under the renewal, the interest rate was amended to 6.00% and Cross-Bo is required to make monthly principal and interest payments totaling $2,172 until maturity. At both June 30, 2021 and December 31, 2020, the unpaid principal balance of the note totaled $49,000.

On January 16, 2019, Cross-Bo entered into a note payable agreement with a financial institution to purchase equipment totaling $14,988. The note, which is secured by the purchased equipment, requires monthly principal and interest payments of $664 until maturity on January 16, 2021 with interest at 5.99%. During the year ended December 31, 2020, Cross-Bo repaid $7,021 of the principal. At both June 30, 2021 and December 31, 2020, the unpaid principal balance of the note totaled $1,322.

On September 26, 2019, Cross-Bo entered into a note payable agreement with a financial institution for cash proceeds totaling $75,000. The note required monthly interest only payments at 8.50% with unpaid principal due at maturity on December 25, 2019. The maturity of the note was subsequently extended to August 19, 2020. During the year ended December 31, 2020, Cross-Bo repaid $7,415 of the principal. Due to the ongoing COVID-19 pandemic, the lender has not held UMCCO in default. On November 12, 2020, the maturity date of the note was extended to May 12, 2021. On June 17, 2021, the note was renewed through June 17, 2023. Under the renewal, the interest rate was amended to 6.00% and Cross-Bo is required to make monthly principal and interest payments totaling $2,996 until maturity. At both June 30, 2021 and December 31, 2020, the unpaid principal balance of the note totaled $67,585.

On April 14, 2020, pursuant to the Paycheck Protection Program under the CARES Act, Cross-Bo received a two-year loan for $139,677. Interest is deferred for six months, then is at 1% until maturity in April 2022. At December 31, 2020, the unpaid principal balance of the note totaled $139,677. The loan and related interest of $1,203 were forgiven on February 18, 2021.

On May 6, 2020, Cross-Bo entered into a note payable agreement with a former owner for $355,484. The note, which is unsecured, requires monthly principal and interest payments of $6,873 until maturity on May 6, 2025 with interest at 6.00%. During the year ended December 31, 2020, Cross-Bo repaid $30,955 of the principal. During the three months ended March 31, 2021, Cross-Bo repaid $15,828 of the principal. During the three months ended June 30, 2021, Cross-Bo repaid $20,618 of the principal. At June 30, 2021 and December 31, 2020, the unpaid principal balance of the note totaled $288,083 and $324,529, respectively.

On March 1, 2021, pursuant to the Paycheck Protection Program, Cross-Bo received a five-year loan for $136,025. Interest is deferred until the loan forgiveness amount is determined, then is at 1% until maturity in March 2026. At June 30, 2021, the unpaid principal balance of the note totaled $136,025. Cross-Bo used the loan proceeds for payroll.

On June 18, 2020, the Company entered into a note payable agreement for $150,000. The note, which is unsecured, requires monthly interest payments at 6.00% until maturity, with the principal due at maturity on June 18, 2050. At June 30, 2021 and December 31, 2020, the unpaid principal balance of the note totaled $150,000, respectively.

On January 27, 2021, the Company entered into a note payable agreement for $287,500, including a discount of $37,500 and fees of $12,500. The note, which is unsecured, requires a lump interest payment of $78,343.75 at maturity on August 27, 2021. The principal is to be repaid in four equal monthly installments beginning on May 27, 2021. At June 30, 2021, the unpaid principal balance of the note totaled $170,250.

The debt discounts for these notes are amortized over the term of the notes. For the six months ended June 30, 2021, amortization of debt discounts on these notes totaled $26,786. At June 30, 2021 and December 31, 2020, the unamortized discounts on the notes totaled $10,714 and $-0-, respectively.

During the six months ended June 30, 2021, the Company incurred interest expenses related to debt totaling $204,430.

As of June 30, 2021 and December 31, 2020, the Company has $337,272 and $147,553, respectively, of other receivables from companies under the control of William Robinson, the Company’s Chairman and CEO.

From time to time, the Company may be involved in litigation in the ordinary course of business. The Company is not currently involved in any litigation that we believe could have a material adverse effect on its financial condition or results of operations.

Common Stock

The Company has 500,000,000 common shares authorized, $0.001 par value. At June 30, 2021 and December 31, 2020, there were 140,470,804 and 120,200,005 common shares issued and outstanding, respectively.

During the six months ended June 30, 2021, the Company issued 14,720,799 shares of common stock for cash proceeds totaling $764,301.

On February 1, 2021, the Company issued 4,000,000 shares of common stock valued at $200,000 for prepaid consulting. The prepaid expense is being amortized over the twelve months of consulting services to be provided beginning February 2021.

During the six months ended June 30, 2021, the Company issued 850,000 shares of common stock valued at $57,590 for financing costs.

During the six months ended June 30, 2021, the Company issued 700,000 shares of common stock for the conversion of $20,777 in convertible debt.

Preferred Stock

The Company has 20,000,000 Series A Preferred shares authorized, $0.00001 par value. At June 30, 2021 and December 31, 2020, there were 20,000,000 Series A Preferred shares issued and outstanding, respectively.

The Company has 1,000,000 Series B Preferred shares authorized, $0.00001 par value. At June 30, 2021 and December 31, 2020, there were 458,480 and -0- Series B Preferred shares issued and outstanding, respectively.

During the six months ended June 30, 2021, the Company issued 415,000 shares of Series B Preferred stock for cash proceeds totaling $415,000. Additionally, during the six months ended June 30, 2021, the Company issued 43,480 shares of Series B Preferred stock valued at $43,480 for service.

The Company has 11,442,857 Series C Preferred shares authorized, $0.00001 par value. At June 30, 2021 and December 31, 2020, there were 11,442,857 Series C Preferred shares issued and outstanding, respectively.

The Company has 5,000,000 Series D Preferred shares authorized, $0.00001 par value. At June 30, 2021 and December 31, 2020, there were -0- Series D Preferred shares issued and outstanding, respectively.

Substantially all of the Company’s revenues are generated in the state of Oklahoma. The Company has a concentration of customers in the water and utilities industries which expose the Company to a concentration of credit risk within a single industry. The customers in these industries are usually owned by local government authorities, reducing the Company’s credit risk. Revenue by type for the six months ended June 30, 2021 and 2020 were as follows: