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EX-32.1 - CERTIFICATION - SinglePoint Inc.sing_ex321.htm
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EX-31.1 - CERTIFICATION - SinglePoint Inc.sing_ex311.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-K

 

Mark One

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 2020

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File No. 000-53425

 

 

 

Singlepoint Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

 

26-1240905

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

2999 North 44th Street Suite 530

Phoenix, AZ 85018

(Address of principal executive offices)

 

(888) 682-7464

(Registrant’s telephone number)

 

Securities registered pursuant to Section 12(g) of the Act:

 

COMMON STOCK, $0.0001

(Title of Class)

 

Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files. Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

  

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of the common equity, as of the last business day of the registrants most recently completed second fiscal quarter was $8,606,146.87

  

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of April 12, 2021, the Company had 36,953,388 outstanding shares of its common stock, par value $0.0001.

 

  

 

 

 

This Annual Report on Form 10-K contains forward-looking statements, within the meaning of the Securities Exchange Act of 1934 and the Securities Act of 1933 that involve risks and uncertainties. Forward-looking statements convey our current expectations or forecasts of future events. All statements contained in this Annual Report other than statements of historical fact are forward-looking statements. Forward-looking statements include statements regarding our future financial position, business strategy, budgets, projected costs, plans and objectives of management for future operations. The words "may," "continue," "estimate," "intend," "plan," "will," "believe," "project," "expect," "seek," "anticipate," "should," "could," "would," "potential," or the negative of those terms and similar expressions may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. All of these forward-looking statements are based on information available to us at this time, and we assume no obligation to update any of these statements. Actual results could differ from those projected in these forward-looking statements as a result of many factors, including those identified in "Business," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere. We urge you to review and consider the various disclosures made by us in this report, and those detailed from time to time in our filings with the Securities and Exchange Commission, that attempt to advise you of the risks and factors that may affect our future results. Factors that could cause actual results to differ materially include, among others, our ability to make good decisions about the deployment of capital, our substantial capital requirements and absence of liquidity, competition, our inability to obtain maximum value for our holdings, our ability to attract and retain qualified employees, our ability to execute our strategy, market valuations in sectors in which we operate, our need to manage our assets, and risks associated with our assets and their performance, including the fact that most have a limited history and a history of operating losses, face intense competition and may never be profitable, the effect of economic conditions in the business sectors in which our partner companies operate, compliance with government regulation and legal liabilities, all of which are discussed in Item 1A. Risk Factors.” Many of these factors are beyond our ability to predict or control. In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. All forward-looking statements attributable to us, or to persons acting on our behalf, are expressly qualified in their entirety by this cautionary statement. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this report might not occur.

 

JOBS Act

 

We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups (JOBS) Act of 2012 (the JOBS Act). As an emerging growth company, we may take advantage of certain reduced disclosure and other requirements that are otherwise applicable generally to public companies. Pursuant to these provisions:

 

 

 

we are not required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act);

 

 

 

we have (i) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (ii) exemptions from the requirements of holding a non-binding advisory vote on executive compensation, including golden parachute compensation.

 

We may take advantage of these provisions for up to five years or until such earlier time that we are no longer an emerging growth company.

 

We would cease to be an emerging growth company upon the earliest to occur of (1) the last day of the fiscal year in which we have more than $1.07 billion in annual revenue; (2) the date we qualify as a “large accelerated filer,” with at least $700 million of public float (3) the issuance, in any three-year period, by us of more than $1.0 billion in non-convertible debt securities held by non-affiliates; and (4) the last day of the fiscal year ending after the fifth anniversary of our initial public offering.

 

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This permits an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the exemptions discussed above. Accordingly, the information contained herein may be different than the information you receive from other public companies.

 

 
2

 

 

TABLE OF CONTENTS

 

PART I

 

Item 1.

Business

 

4

 

Item 1A.

Risk Factors.

 

5

 

Item 1B.

Unresolved Staff Comments.

11

 

Item 2.

Properties.

11

 

Item 3.

Legal Proceedings.

11

 

Item 4.

Mine Safety Disclosures.

11

 

 

 

 

 

PART II

 

 

 

 

 

 

 

 

 

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

12

 

Item 6.

Selected Financial Data.

13

 

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

13

 

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk.

17

 

Item 8.

Financial Statements and Supplementary Data.

17

 

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.

18

 

Item 9A.

Controls and Procedures.

18

 

Item 9B.

Other Information.

18

 

 

 

 

 

PART III

 

 

 

 

 

 

 

 

 

Item 10.

Directors, Executive Officers and Corporate Governance.

19

 

Item 11.

Executive Compensation.

21

 

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

24

 

Item 13.

Certain Relationships and Related Transactions, and Director Independence.

28

 

Item 14.

Principal Accounting Fees and Services.

28

 

 

 

 

 

PART IV

 

 

 

 

 

 

 

 

 

Item 15.

Exhibits, Financial Statement Schedules.

29

Item 16.

Form 10–K Summary.

29

 

Signatures

30

 

 

 
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Item 1. Business 

 

We are a company focused on providing renewable energy solutions and energy-efficient applications to drive better health and living. We currently have core subsidiaries including solar and air purification. We built our portfolio through synergistic acquisitions, products, and partnerships to provide a rich, diversified holding base. The Company’s initial focus is on solar energy and we are committed to building a foundation for future expansion opportunities and building brands based on technology solutions we believe will increase efficiencies across various markets. We strive to create long-term value for our shareholders by helping our partner companies to increase their market penetration, grow revenue and improve cash flow. We currently have three subsidiaries, Singlepoint Direct Solar LLC (“Direct Solar America”, 51% interest), Discount Indoor Garden Supply, Inc. (“DIGS”, 90% interest), and ShieldSaver, LLC (“ShieldSaver”, 51% interest). Our principal offices are located at 2999 North 44th Street Suite 530, Phoenix, AZ 85018, telephone: (888) 682-7464. We may decide to due future spin-offs of additional assets or subsidiaries.

 

Direct Solar America was formed as a solar brokerage company headquartered in Phoenix, Arizona that currently works with homeowners to define the best solar installation provider and financer for their particular need in multiple cities around the United States. ShieldSaver is a technology focused automotive company working to efficiently track records of vehicle repairs. DIGS is a California-based supplier of cultivation equipment and fulfills orders nationwide.

 

Our Core Businesses

 

As of December 31, 2020 our core businesses consisted of the following:

 

Singlepoint Direct Solar, LLC (“Direct Solar America”)

  

In May 2019 the Company formed Direct Solar America, and owns fifty one percent of the membership interests. Direct Solar America is a solar brokerage company headquartered in Phoenix, Arizona that currently works with homeowners to define the best solar installation provider and financer for their particular need in multiple cities around the United States. We believe the unique brokerage model is scalable nationally and in its first 10 months of operation has expanded into multiple states and is expected to continue expanding into additional markets. In addition to the multistate expansion of the residential solar brokerage model. In October 2020 Direct Solar America entered into a first-of-its-kind collaboration agreement with Soligent the allows approved and licensed EPC’s, Contractor’s, or Installer’s that are within and operate under the Direct Solar of America network additional procurement and financial flexibility. Direct Solar America acts as the principal and is the guarantor under this collaboration agreement and a majority of the residential solar projects in 2021 will operate within the framework of this agreement in which Direct Solar America will benefit from additional incremental margins and as the principal will benefit from recognizing the entire project revenue versus a portion under the historical DSA Residential Brokerage Model. Direct Solar America has identified market opportunities related to small and medium commercial solar projects and has committed staff and resources, adding to its core business competencies to pursue these types of underserved commercial solar opportunities. The majority of the targeted projects are comprised of commercial buildings, schools, parking lot structures looking for solar based solutions that offset and reduce traditional energy consumption through a green solution that saves them money while reducing their impact on the planet.

 

ShieldSaver, LLC (“ShieldSaver”)

 

The Company owns fifty one percent (51%) of the outstanding interests of ShieldSaver. ShieldSaver is a technology focused automotive company working to efficiently track records of vehicle repairs. They pair shops with potential customer via proprietary technology. The ShieldSaver technology solution drives B2B leads and conversion to sales of windshield repair and replacement. The ShieldSaver technology is designed to increase efficiency by quickly delivering a vehicle specific quote for windshield replacement and delivering those leads to local installers looking to expand and grow their business. ShieldSaver has relationships with large parking lot management companies at airports and other locations around the United States to obtain the data needed to operate.

 

 
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SingleSeed

 

SingleSeed is an online business providing domestically grown health, wealth and lifestyle products to direct to consumers typically through an ecommerce transaction. Our online storefront provides and purchasing point and an additional place for vendors to sell their product which is shipped directly from the manufacturer eliminating the need to purchase or store inventory. Additionally, the company has historically marketed, represented and resold services such as internet marketing, website design and payment processing.

  

Discount Indoor Garden Supplies, Inc. (“DIGS”)

 

DIGS is a California-based supplier of cultivation equipment and fulfills orders nationwide. They provide hydroponic supplies and nutrients to commercial and individual farmers. DIGS has an online store, and sells nutrients, lights, HVAC systems, among other products to individuals that are interested in horticulture. They also fulfill and distribute products to business and stores in the southern California market.

 

Item 1A. Risk Factors.

  

Risks Related to Our Business

 

Our businesses may be materially adversely affected by the recent coronavirus (COVID-19) outbreak or the related market decline and volatility.

 

On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic”. The significant outbreak of COVID-19 has resulted in a widespread health crisis that is adversely affecting the economies and financial markets worldwide, including the businesses which we operate and own a percentage of. The recent market decline and volatility in connection with the COVID-19 pandemic could also materially and adversely affect any future potential acquisitions. Furthermore, with restrictions on travel, the limited ability to have meetings with personnel, vendors and services providers are expected to have an adverse effect on our businesses. While the Company expects the effects of the pandemic to negatively impact its results from operations, cash flows and financial position, the current level of uncertainty over the economic and operational impacts of COVID-19 means the related financial impact cannot be reasonably estimated at this time. The Company has experienced customer delays and extensions for projects, supply chain delays, furloughs of personnel, increased utilization of telework, increased safety protocols to address COVID-19 risks, decreased installations and other impacts from the COVID-19 pandemic. The Company is proactively working to adjust its operations to properly reflect the market environment during the immediate pandemic while maintaining sufficient resources for the expected rebound later this year. The extent to which COVID-19 impacts our businesses will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our operations may be materially adversely affected.

  

The Solar Market is very competitive, and it is difficult to determine if demand will continue to rise

 

If sufficient additional demand for residential solar energy systems does not develop or takes longer to develop than we anticipate, our ability to originate solar service agreements may decrease. A material reduction in the retail price of electricity charged by electric utilities or other retail electricity providers would harm our business, financial condition and results of operations. Our growth is dependent on our dealer network and our failure to retain or replace existing dealers or to grow our dealer network could adversely impact our business. We are exposed to the credit risk of our customers. Rising interest rates may adversely impact our business. Our business has benefited from the declining cost of solar energy system components and our business may be harmed to the extent the cost of such components stabilize or increase in the future. We do not directly control certain costs related to our business, which could put us at a disadvantage relative to companies who have a vertically integrated business model. We may be unsuccessful in introducing new service and product offerings, including our distributed energy storage services and energy storage management systems. We face competition from centralized electric utilities, retail electric providers, independent power producers and renewable energy companies. Developments in technology or improvements in distributed solar energy generation and related technologies or components may materially adversely affect demand for our offerings. We and our dealers depend on a limited number of suppliers of solar energy system components and technologies to adequately meet demand for our solar energy systems. Due to the limited number of suppliers in our industry, the acquisition of any of these suppliers by a competitor or any shortage, delay, price change, imposition of tariffs or duties or other limitation in our or our dealers' ability to obtain components or technologies we use could result in sales and installation delays, cancelations and loss of customers. Increases in the cost of our solar energy systems due to tariffs imposed by the U.S. government could have a material adverse effect on our business, financial condition and results of operations. Our operating results and our ability to grow may fluctuate from quarter to quarter and year to year, which could make our future performance difficult to predict and could cause our operating results for a particular period to fall below expectations. If we are unable to make acquisitions on economically acceptable terms, our future growth would be limited, and any acquisitions we may make may reduce, rather than increase, our cash flows. Our business is concentrated in certain markets, putting us at risk of region-specific disruptions.

  

 
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We may not be able to achieve our strategic initiatives and grow our business as anticipated.

 

Beginning in fiscal year 2018, we made a strategic decision to transition from a technology-based solutions provider to a solar and renewable energy focused business. We continue to refine our strategic focus to center on providing renewable energy, environmentally friendly and healthy living solutions that are focused on sustainability. Our strategic initiatives have required us to devote financial and operational assets to these activities. Our success depends on our ability to appropriately manage our expenses as we invest in these initiatives. If we are not able to execute on this strategy successfully or if our investments in these activities do not yield significant returns, our business may not grow as we anticipated, which could adversely affect our operating results.

 

Any disruption of service at our facilities or our third-party providers could interrupt or delay our customers’ access to solutions, which could harm our operating results.

 

Any damage to, or failure of, our systems generally could result in interruptions in our services. Interruptions in our services may reduce our revenue, cause customers to terminate their subscriptions and adversely affect our attrition rates and our ability to attract new customers, all of which would reduce our revenue. Our business would also be harmed if our customers and potential customers believe our services are unreliable.

 

The solar industry faces imports from many different regions of the world and relies on incentives

 

Although there is the ability to import from all over the world, solar is mainly imported from China and similar areas. With ongoing political climate and ever-changing tariffs these issues could lead to increased prices or slower production. In addition, the government could decide to decrease federal rebates which would price consumers out of the solar market unless tariffs on PV (photovoltaics) were removed to offset the cost of solar. Sales in the solar industry also has traditionally relied on in home consultations. Given the current COVID-19 pandemic people are social distancing following the guidelines outlined by health agencies which has led to a decrease in sales and a shift to a new virtual selling model that we are uncertain of its long-term effectiveness.

 

We rely on third parties for certain financial and operational services essential to our ability to manage our business. A failure or disruption in these services could materially and adversely affect our ability to manage our business effectively.

 

We rely on third parties for certain essential financial and operational services. Traditionally, the vast majority of these services are provided by large enterprise software vendors who license their software to customers. Moreover, these vendors provide their services to us via a cloud-based model instead of software that is installed on our premises. As a result, we depend upon these vendors providing us with services that are always available and are free of errors or defects that could cause disruptions in our business processes, which could adversely affect our ability to operate and manage our operations.

 

Many of our customers are small- and medium-sized businesses, which may result in increased costs as we attempt to reach, acquire and retain customers.

 

We market and sell our services to small- and medium-sized businesses. In order for us to improve our operating results and continue to grow our business, it is important that we continually attract new customers, sell additional services to existing customers and encourage existing customers to renew their subscriptions. However, selling to and retaining small- and medium- sized businesses can be more difficult than selling to and retaining large enterprises because small- and medium-sized business customers:

 

 

are more price sensitive;

 

 

 

 

are more difficult to reach with broad marketing campaigns;

 

 

 

 

have high churn rates in part because of the nature of their businesses;

 

 

 

 

often lack the staffing to benefit fully from our application suite’s rich feature set; and

 

 

 

 

often require higher sales, marketing and support expenditures by vendors that sell to them per revenue dollar generated for those vendors.

 

 
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If we are unable to cost-effectively market and sell our service to our target customers, our ability to grow our revenue and become profitable will be harmed.

 

We may choose to raise additional capital. Such capital may not be available, or may be available on unfavorable terms, which would adversely affect our ability to operate our business.

 

We expect that our existing cash balances will be sufficient to meet our working capital and capital expenditure needs for the next twelve months. If we choose to raise additional funds, due to unforeseen circumstances or material expenditures, we cannot be certain that we will be able to obtain additional financing on favorable terms, if at all, and any additional financings could result in additional dilution to our existing stockholders.

 

Our market is subject to changing preferences; failure to keep up with these changes would result in our losing market share, thus seriously harming our business, financial condition and results of operations.

 

Our customers and end users expect frequent product introductions and have changing requirements for new products and features. In order to be competitive, we need to develop and market new products and product enhancements that respond to these changing requirements on a timely and cost-effective basis. Our failure to do so promptly and cost effectively would seriously harm our business, financial condition and results of operations.

  

We could become involved in claims or litigations that may result in adverse outcomes.

 

Due to the nature of our business from time to time we may be involved in a variety of claims or litigations.

 

We have had a history of losses and may incur future losses, which may prevent us from attaining profitability.

 

We have a history of operating losses since our inception. We may incur operating losses in the future, and these losses could be substantial and impact our ability to attain profitability. We expect to increase expenditures for product development, general and administrative expenses, and sales and marketing expenses; however, if we cannot increase revenue growth, we will not achieve or sustain profitability or positive operating cash flows. Even if we achieve profitability and positive operating cash flows, we may not be able to sustain or increase profitability or positive operating cash flows on a quarterly or annual basis.

 

We cannot predict every event and circumstance that may impact our business and, therefore, the risks discussed herein may not be the only ones you should consider.

 

As we continue to grow our business, we may encounter other risks of which we are not aware as of the date of this report. Certain of our key operational metrics, including estimated gross contracted customer value, are based on various assumptions and estimates we make that cover an extended period of time. Actual experience may vary materially from these estimates and assumptions and therefore undue reliance should not be placed on these metrics. These additional risks may cause serious damage to our business in the future, the impact of which we cannot estimate at this time.

 

We will need additional funding if we intend on growing and making future acquisitions. If we are unable to raise capital when needed, we would be forced to delay, reduce or eliminate our planned development.

 

We expect our expenses to increase in connection with our ongoing activities. We need to obtain substantial additional financing arrangements to provide working capital and growth capital and if financing is not available to us on acceptable terms when needed, our ability to continue to grow our business would be materially adversely impacted and or we would be forced to delay, reduce or eliminate some or all of our research and development programs or commercialization efforts. Servicing our existing debt requires a significant amount of cash. We may not have sufficient cash flow from our business to timely pay our interest and principal obligations and may be forced to take other actions to satisfy our payment obligations.

 

 
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Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.

 

Until the time, if ever, that we can generate substantial product revenues, we plan to finance our cash needs through some combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. We do not have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our existing stockholders will be diluted, and the terms of these new securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

 

There is substantial doubt about our ability to continue as a going concern

 

We have not generated any profit from combined operations since our inception. We expect that our operating expenses will increase over the next twelve months to continue our development activities. Based on our average monthly expenses and current burn rate, we estimate that our cash on hand as of December 31, 2020 will not sufficiently support our operation for the next twelve months. We do not expect to raise capital through debt financing from traditional lending sources since we are not currently generating a profit from operations. Therefore, we only expect to raise money through equity financing via the sale of our common stock or equity-linked securities such as convertible debt. If we cannot raise the money that we need in order to continue to operate our business, we will be forced to delay, scale back or eliminate some or all of our proposed operations. If any of these were to occur, there is a substantial risk that our business would fail. If we are unsuccessful in raising additional financing, we may need to curtail, discontinue or cease operations.

 

Risks Related to Employee Matters and Managing Growth

 

Our future success depends on our ability to retain our key executives and to attract, retain and motivate qualified personnel.

 

We have been highly dependent on Gregory Lambrecht, our Chief Executive Officer, William Ralston, our President, as well as the other principal members of our management team. Although we have entered into employment agreements with Mr. Lambrecht and Mr. Ralston providing for certain benefits, including severance in the event of a termination without cause, these agreements do not prevent them from terminating their employment with us at any time. We do not maintain "key person" insurance for any of our executives or other employees. The loss of the services of any of these persons could impede the achievement of our research, development and commercialization objectives. The unexpected loss of the services of one or more of our directors or executive officers and/or advisors including due to disease (such as COVID-19), disability or death, could have a detrimental effect on us.

 

In addition, we rely on consultants and advisors to assist us in formulating our development and commercialization strategy. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us.

 

Risks Associated with Our Capital Stock

 

Because we became a reporting company under the Exchange Act by means other than a traditional underwritten initial public offering, we may not be able to attract the attention of research analysts at major brokerage firms.

 

Because we became a reporting company by conducting an underwritten initial public offering, or IPO, of our common stock, and because we are not listed on a national securities exchange, security analysts of brokerage firms may not provide coverage of our company. In addition, investment banks may be less likely to agree to underwrite secondary offerings on our behalf than they might if we were to become a public reporting company by means of an IPO because they may be less familiar with our company as a result of more limited coverage by analysts and the media, and because we became public at an early stage in our development.

 

 
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Our common stock may become subject to the SEC's penny stock rules, which may make it difficult for broker-dealers to complete customer transactions and could adversely affect trading activity in our securities.

 

The SEC has adopted regulations which generally define "penny stock" to be an equity security that has a market price of less than $5.00 per share, subject to specific exemptions. The market price of our common stock may be less than $5.00 per share for some period of time and therefore would be a "penny stock" according to SEC rules, unless we are listed on a national securities exchange. Under these rules, broker-dealers who recommend such securities to persons other than institutional accredited investors must:

 

 

·

make a special written suitability determination for the purchaser;

 

 

 

 

·

receive the purchaser's prior written agreement to the transaction;

 

 

 

 

·

provide the purchaser with risk disclosure documents which identify certain risks associated with investing in "penny stocks" and which describe the market for these "penny stocks" as well as a purchaser's legal remedies; and

 

 

 

 

·

obtain a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk disclosure document before a transaction in a "penny stock" can be completed.

  

If required to comply with these rules, broker-dealers may find it difficult to effectuate customer transactions and trading activity in our securities may be adversely affected.

 

The market price of our common stock may be volatile and may fluctuate in a way that is disproportionate to our operating performance.

 

Our stock price may experience substantial volatility as a result of a number of factors, including:

 

 

·

sales or potential sales of substantial amounts of our common stock;

 

 

 

 

·

the success of competitive products or technologies;

 

 

 

 

·

announcements about us or about our competitors, including new product introductions and commercial results;

 

 

 

 

·

the recruitment or departure of key personnel;

 

 

 

 

·

developments concerning our licensors or manufacturers;

 

 

 

 

·

litigation and other developments;

 

 

 

 

·

actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;

 

 

 

 

·

variations in our financial results or those of companies that are perceived to be similar to us; and

 

 

 

 

·

general economic, industry and market conditions.

  

 
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Many of these factors are beyond our control. The stock markets in general, and the market for FinTech (financial technology) and blockchain companies in particular, have historically experienced extreme price and volume fluctuations. These fluctuations often have been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors could reduce the market price of our common stock, regardless of our actual operating performance.

 

We currently have outstanding shares of preferred stock that have special rights that could limit our ability to undertake corporate transactions, inhibit potential changes of control and reduce the proceeds available to our common stockholders in the event of a change in control. Additionally, even after our preferred stock converts to common stock, certain of our stockholders will have rights that could limit our ability to undertake corporation transactions and inhibit changes of control.

 

As of December 31, 2020 we have outstanding two classes of stock, common stock and preferred stock, and there are two series of preferred stock, Class A Class B, Convertible Preferred Stock. The holders of Class A Convertible Preferred Stock are entitled to super voting and super converting rights. As a result of the rights our Class A Convertible Preferred Stock holders have, we may not be able to undertake certain corporate transactions, including equity or debt offerings necessary to raise sufficient capital to run our business, change of control transactions or other transactions that may otherwise be beneficial to our businesses. These provisions may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which our common stockholders might otherwise receive a premium price for their shares. The market price of our common stock could be adversely affected by the rights of our preferred stockholders.

 

We have never paid and do not intend to pay cash dividends.

 

We have never paid cash dividends on any of our common stock and we currently intend to retain future earnings, if any, to fund the development and growth of our business. As a result, capital appreciation, if any, of our common stock will be our common stockholders' sole source of gain for the foreseeable future. Under the terms of our existing Articles of Incorporation, we cannot declare, pay or set aside any dividends on shares of any class or series of our capital stock, other than dividends on shares of common stock payable in shares of common stock, unless we pay dividends to the holders of our preferred stock. Additionally, without special stockholder and board approvals, we cannot currently pay or declare dividends and will be limited in our ability to do so until such time, if ever, that we are listed on a stock exchange.

 

Our executive officers and directors have the ability to control all matters submitted to stockholders for approval.

 

Our executive officers and directors hold approximately 56,000,000 shares of our Class A Convertible Preferred Stock (each share votes as the equivalent of 50 shares of common stock on all matters submitted for a vote by the common stockholders), and as such, they would be able to control all matters submitted to our stockholders for approval, as well as our management and affairs. For example, these persons, if they choose to act collectively, would control the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of voting power could delay or prevent an acquisition of our company on terms that other stockholders may desire.

 

Provisions in our articles of incorporation and by-laws and under Nevada law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

 

Provisions in our articles of incorporation and by-laws, respectively, may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which our common stockholders might otherwise receive a premium price for their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors.

 

 
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We will incur increased costs as a result of operating as a public reporting company, and our management will be required to devote substantial time to new compliance initiatives.

 

As a public reporting company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act of 2002 and rules subsequently implemented by the SEC, have imposed various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance.

 

We currently have outstanding, and we may, in the future issue instruments which are convertible into shares of common stock, which will result in additional dilution.

 

We currently have an outstanding instrument which is convertible into shares of common stock, and we may need to issue similar instruments in the future. In the event that these convertible instruments are converted into shares of common stock, or that we make additional issuances of other convertible or exchangeable securities, you could experience additional dilution. Furthermore, we cannot assure you that we will be able to issue shares or other securities in any other offering at a price per share that is equal to or greater than the price per share paid by investors or the then current market price. 

 

Item 1B. Unresolved Staff Comments.

 

The Company is neither an accelerated filer nor a large accelerated filer, as defined in Rule 12b-2 of the Exchange Act (§240.12b-2 of this chapter), nor is it a well-known seasoned issuer as defined in Rule 405 of the Securities Act (§230.405 of this chapter), and as such is not required to provide the information required by this item.

 

Item 2. Properties.

 

Currently the Company leases approximately 1,400 square feet of office space at 2999 North 44th Street, Phoenix Arizona 85018 at a monthly rent of $3,375.97 through January 31, 2023 at a monthly base rent of $3,618, increasing to $3,688 and $3,758 per month during the second and third year of the lease, respectively.

 

On July 2, 2019, the Company executed a lease agreement for an industrial building space in California for 24 months at base rent of $2,400 per month through June 30, 2021 upon which the lease expires.

 

Item 3. Legal Proceedings.

 

Neither the Company nor its property is a party to any pending material legal proceeding.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

 
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PART II

 

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

Market Information

 

The Common Stock of the Company is currently trading on the Pink Sheets under the symbol “SING.” The following table sets forth the high and low bid prices relating to our common stock on a quarterly basis for the periods indicated. These quotations reflect inter-dealer prices without retail mark-up, mark-down, or commissions, and may not reflect actual transactions.

 

Quarterly period

 

High

 

 

Low 

 

Fiscal year ended December 31, 2020:

 

 

 

 

First Quarter

 

$ 0.0130

 

 

$ 0.0040

 

Second Quarter

 

$ 0.0074

 

 

$ 0.0042

 

Third Quarter

 

$ 0.0054

 

 

$ 0.0025

 

Fourth Quarter

 

$ 0.0057

 

 

$ 0.0023

 

 

 

 

 

 

 

 

 

 

Fiscal year ended December 31, 2019:

 

 

 

 

 

 

 

 

First Quarter

 

$ 0.0208

 

 

$ 0.0195

 

Second Quarter

 

$ 0.0220

 

 

$ 0.0187

 

Third Quarter

 

$ 0.0117

 

 

$ 0.0112

 

Fourth Quarter

 

$ 0.0079

 

 

$ 0.0072

 

 

Holders

 

As of December 31, 2020, there were 2,479,976,812 shares of common stock outstanding, which were held by approximately 190 record holders. In addition, there were 60,000,000 shares of our Class A Convertible Preferred Stock outstanding, which were held by eight record holders, 408 shares of our Class B Convertible Preferred Stock outstanding, which were held by one record holders.

 

Dividends

 

Through December 31, 2020, except for dividends due on our Series B Preferred Stock, we have never paid cash dividends on any of our capital stock and we currently intend to retain our future earnings, if any, to fund the development and growth of our business. We do not intend to pay cash dividends to holders of our common stock in the foreseeable future.

 

Recent Sales of Unregistered Securities

 

During the year ended December 31, 2020, there were no sales by the Company (which have not been included in a Quarterly Report on Form 10Q or in a Current Report on Form 8-K) that were not registered under the Securities Act:

 

 
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Securities authorized for issuance under equity compensation plans

 

Information about our equity compensation plans is incorporated herein by reference to Item 11 of Part III of this Annual Report on Form 10-K.

 

Item 6. Selected Financial Data.

 

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

 

The following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this Annual Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include,but are not limited to those discussed below and elsewhere in this Annual Report. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

Plan of Operation

 

We are focused on providing renewable energy solutions and energy-efficient applications to drive better health and living. We currently have core subsidiaries including solar and air purification. We built our portfolio through synergistic acquisitions, products, and partnerships to provide a rich, diversified holding base. The Company’s initial focus is on solar energy and we are committed to building a foundation for future expansion opportunities and building brands based on technology solutions we believe will increase efficiencies across various markets. We strive to create long-term value for our shareholders by helping our partner companies to increase their market penetration, grow revenue and improve cash flow and that complement our desire to build a comprehensive national renewable energy network. The Company is actively looking for and executing on strategic initiatives to sell, partner with or spin-off other non renewable energy related assets.

 

Results from Operations – For the year ended December 31, 2020 as compared to December 31, 2019.

 

Net Revenue

 

For the years ended December 31, 2020 and 2019, the Company had total sales of $2,878,161 and $3,343,833, respectively. The decrease of $465,672 in revenues was due primarily to the pandemic which shut down the traditional door to door sales model of Singlepoint Direct Solar, LLC. Additionally, the Company experienced delays in permitting, and site visits which continued throughout the year and into 2021. Social distancing guidelines, stay-at-home orders and similar government measures associated with the COVID-19 pandemic, as well as actions by individuals to reduce their potential exposure to the virus, contributed to a decline in origination, with new contract origination. This decline reflected an inability by our dealers to perform in-person sales calls based on the stay-at-home orders in some locations. In the third quarter 2020 the Company also took a one-time adjustment for the proportional sales related to residential solar revenue derived from Direct Solar America of $276,382.68 for cancelled projects.

 

Cost of Revenue

 

Cost of revenue decreased from $2,353,056 for the year ending December 31, 2019 to $2,204,391 for the year ended December 31, 2020, a decrease of $148,665. This decrease was due primarily to the decreased revenues from our subsidiary Direct Solar America.

 

 
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Gross Profit

 

As a result of the foregoing, our gross profit was $673,770 for the year ended December 31, 2020, compared with $990,777, for the year ended December 31, 2019. The decrease in our overall gross profit was primarily a result of the subsidiary Direct Solar America.

 

Operating Expenses

 

Total operating expenses decreased from $6,455,236 in 2019 to $3,972,882 in 2020, a decrease of $2,482,354. The decrease was primarily due to a decrease in general and administrative expense of $3,111,304 as a result of additional costs related to our newly acquired subsidiaries, our new office, marketing, insurance and travel. We had a decrease in consulting fees of $219,649 in the year ended December 31, 2020 from the year ending December 31, 2019. Professional and legal fees increased $22,970 for the year ending December 31, 2020, as compared to year ending December 31, 2019, primarily due to increased audit and legal expenses as a result of the Company complying with  1934 Act reporting obligations of the SEC. Investor relations expense increased from $168,117 for the year ending December 31, 2019, as compared to $181,637 for the year ending December 31, 2020, an increase of $13,460.

 

Other Expense

 

Other expense decreased from $2,604,274 in 2019 to $1,145,393 in 2020 due primarily to the decrease in interest expense and amortization of debt discounts as a result of our decrease in convertible notes payable during the year ended December 31, 2020.

 

Net Loss

 

For the year ended December 31, 2019 the Company had a net loss of approximately $8,068,733 compared to a net loss of approximately $4,444,505 for the year ended December 31, 2020, a decrease in net loss of $3,624,228. The decrease in net loss is primarily a result of the change in fair value of derivative liabilities as well as a decrease in overall operating expenses during the year ended December 31, 2020.

 

Liquidity and Capital Resources

 

As of December 31, 2020 the Company had $2,915,680 in total assets, including $198,473 in cash, $3,368 of accounts receivable, $4,834 in prepaid expenses, $63,456 in inventory, and non-current assets of $2,645,549 related to property, investments and goodwill. The Company had negative working capital of $5,646,208 as of December 31, 2020.

 

As of December 31, 2020, the Company has yet to achieve profitable operations, and while the Company hopes to achieve profitable operations in the future, if not it may need to raise capital from stockholders or other sources to sustain operations and to ultimately achieve viable operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company’s principal sources of liquidity have been cash provided by operating activities, as well as its ability to raise capital. The Company’s operating results for future periods are subject to numerous uncertainties and it is uncertain if the Company will be able to become profitable and continue growth for the foreseeable future. If management is not able to increase revenue and/or manage operating expenses, the Company may not be able to achieve profitability. The Company’s ability to continue in existence is dependent on the Company’s ability to achieve profitable operations.

 

 
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To continue operations for the next 12 months we will have a cash need of approximately $2.0 million. Should we not be able to fulfill our cash needs through the increase of revenue we will need to raise money through outside investors through convertible notes, debt or similar instrument(s). The Company plans to pay off current liabilities through sales and increasing revenue through sales of Company services and or products, or through financing activities as mentioned above, although there is no guarantee that the Company will ultimately do so.

 

Advances from Officer

 

The Company’s CEO advanced the Company funds during 2020 and 2019, with a balance due of $911,826 and $735,000 respectfully, plus accrued interest of $216,807 and $96,273 as of December 31, 2020 and 2019, respectively. These balances accrue interest at 12% beginning October 1, 2018, are unsecured and due on demand.

 

In November 2020 the Company effectuated the sale of 1,075,527 shares of Common Stock of Jacksam Corporation in exchange for the extinguishment of $218,874 of bona fide debt owed by the Company to its CEO.

 

Our cash flows for the year ended December 31, 2020 and 2019 are summarized below:

 

 

 

Year Ending December 31,

2020

 

 

Year Ending December 31,

2019

 

Net cash used in operating activities

 

$

(1,955,379

)

 

$ (1,787,690 )

Net cash used in investing activities

 

$ 25,000

 

 

$ -

 

Net cash provided by financing activities

 

$

2,018,724

 

 

$ 1,829,037

 

Net Change in Cash

 

$

88,345

 

 

$ 41,347

 

Cash at beginning of year

 

$ 110,128

 

 

$ 68,781

 

Cash at end of year

 

$ 198,473

 

 

$ 110,128

 

 

Net Cash Used in Operating Activities

 

For the year ended December 31, 2020, $1,955,379 net cash was used in operating activities due primarily from our net loss of $4,033,717 partially offset by non-cash charges, including preferred stock issued for services, common stock issued for services and amortization of loan costs.  

 

Net Cash Provided in Investing Activities

 

We had $25,000 net cash provided in investing activities from a return of investment in the year ended December 31, 2020 as compared to $0 for the year ended December 31, 2019.

 

Net Cash Provided by Financing Activities

 

For the year ended December 31, 2020, net cash provided by financing activities was $2,018,724 as compared to $1,829,037 for the year ended December 31, 2019.

 

 
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Critical Accounting Policies

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Notes to the Consolidated Financial Statements describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. Estimates are used for, but not limited to, contingencies and taxes. Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the preparation of the Consolidated Financial Statements.

 

Loss Contingencies

 

The Company is subject to various loss contingencies arising in the ordinary course of business. The Company considers the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as its ability to reasonably estimate the amount of loss in determining loss contingencies. An estimated loss contingency is accrued when management concludes that it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. The Company regularly evaluates current information available to us to determine whether such accruals should be adjusted.

 

Income Taxes

 

The Company recognizes deferred tax assets (future tax benefits) and liabilities for the expected future tax consequences of temporary differences between the book carrying amounts and the tax basis of assets and liabilities. The deferred tax assets and liabilities represent the expected future tax return benefits or consequences of those differences, which are expected to be either deductible or taxable when the assets and liabilities are recovered or settled.

 

Recent Accounting Pronouncements

 

See Note 2 of the consolidated financial statements for discussion of Recent Accounting Pronouncements.

 

Off-Balance Sheet Arrangements

 

We are not currently a party to, or otherwise involved with, any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

 

Recently Adopted Accounting Standards

 

In May 2014, the FASB issued 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. It is effective for annual and interim reporting periods beginning after December 15, 2017. We adopted this standard on January 1, 2018 and it did not have a material impact on our financial position or results of operations.

 

Purchase of Significant Equipment

 

We have not previously, nor do we intend to purchase any significant equipment during the next twelve months.

 

 
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

 

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

 

Item 8. Financial Statements and Supplementary Data.

 

Index to Financial Statements

Report of the Independent Registered Public Accounting Firm

F-1

Consolidated Balance Sheets as of December 31, 2020 and 2019

F-2

Consolidated Statements of Operations for the Years Ended December 31, 2020 and 2019

F-3

Consolidated Statements of Stockholders’ Deficit for the Years Ended December 31, 2020 and 2019

F-4

Consolidated Statements of Cash Flows for the Years Ended December 31, 2020 and 2019

F-5

Notes to Consolidated Financial Statements

F-6

  

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of Singlepoint Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Singlepoint Inc. and its subsidiaries (the “Company”) as of December 31, 2020 and 2019 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 “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2020 and 2019, and the results of its consolidated operations and its consolidated 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 financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations since inception and expects to continue to generate operating losses and negative cash flows for the foreseeable future. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our 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 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 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 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 financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ Turner, Stone & Company, L.L.P.

 

Dallas, Texas

April 15, 2021

 

We have served as the Company’s auditor since 2017.

 

F-1

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SINGLEPOINT INC. AND SUBSIDIARIES

 CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

December 31, 2019

 

 

 

 

 

 

 

 

 ASSETS

 

 

 

 

 

 

 CURRENT ASSETS:

 

 

 

 

 

 

 Cash

 

$ 198,473

 

 

$ 110,128

 

 Accounts receivable

 

 

3,368

 

 

 

49,228

 

 Prepaid expenses

 

 

4,834

 

 

 

24,427

 

 Inventory

 

 

63,456

 

 

 

74,663

 

 

 

 

 

 

 

 

 

 

 Total Current Assets

 

 

270,131

 

 

 

258,446

 

 

 

 

 

 

 

 

 

 

 NON-CURRENT ASSETS:

 

 

 

 

 

 

 

 

 Property, net (Note 5)

 

 

79,167

 

 

 

136,931

 

 Investment, at fair value (Note 3)

 

 

623,637

 

 

 

60,000

 

 Intangible assets, net (Note 3)

 

 

49,005

 

 

 

-

 

 Goodwill (Note 3)

 

 

1,893,740

 

 

 

1,966,340

 

 

 

 

 

 

 

 

 

 

 Total Assets

 

$ 2,915,680

 

 

$ 2,421,717

 

 

 

 

 

 

 

 

 

 

 LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 LIABILITIES 

 

 

 

 

 

 

 

 

 CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

 Accounts payable, including related party (Note 8)

 

$ 245,362

 

 

$ 167,939

 

 Accrued expenses, including accrued officer salaries (Note 8)

 

 

1,661,208

 

 

 

843,136

 

 Current portion of convertible notes payable, net of debt discount (Note 4)

 

 

2,434,226

 

 

 

2,070,898

 

 Capital lease obligations, current portion (Note 5)

 

 

51,365

 

 

 

58,738

 

 Advances from related party (Note 8)

 

 

1,151,946

 

 

 

878,515

 

 Short-term notes payable

 

 

372,232

 

 

 

-

 

 Derivative liability

 

 

-

 

 

 

2,813,150

 

 

 

 

 

 

 

 

 

 

 Total Current Liabilities

 

 

5,916,339

 

 

 

6,832,376

 

 

 

 

 

 

 

 

 

 

 LONG-TERM LIABILITIES:

 

 

 

 

 

 

 

 

 Convertible notes payable, net of current portion (Note 4)

 

 

-

 

 

 

-

 

 Capital lease obligations, net of current portion (Note 5)

 

 

47,517

 

 

 

98,881

 

 Long-term note payable

 

 

150,000

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 Total Liabilities

 

 

6,113,856

 

 

 

6,931,257

 

 

 

 

 

 

 

 

 

 

 COMMITMENTS AND CONTINGENCIES (Note 9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

Undesignated preferred stock, par value $0.0001; 39,998,500 and 40,000,000

 

 

 

 

 

 

 

 

shares authorized as of December 31, 2020 and 2019, respectively; no shares issued and outstanding

 

 

-

 

 

 

-

 

 Class A convertible preferred stock, par value $0.0001; 60,000,000 shares

 

 

 

 

 

 

 

 

 authorized; 60,000,000 and 54,200,000 shares issued and outstanding

 

 

 

 

 

 

 

 

 as of December 31, 2020 and 2019, respectively

 

 

6,000

 

 

 

5,420

 

Class B convertible preferred stock, par value $0.0001; 1,500 and no shares

 

 

 

 

 

 

 

 

authorized as of December 31, 2020 and 2019, respectively;

 

 

 

 

 

 

408 and no shares issued and outstanding as of December 31, 2020 and 2019, respectively

 

 

 -

 

 

 

 -

 

 Common stock, par value $0.0001; 5,000,000,000  shares authorized;

 

 

 

 

 

 

 

 

 2,479,976,812 and 1,698,279,820 shares issued and outstanding

 

 

 

 

 

 

 

 

 as of December 31, 2020 and 2019, respectively

 

 

247,997

 

 

 

169,828

 

 Additional paid-in capital

 

 

77,887,513

 

 

 

72,210,393

 

 Accumulated deficit

 

 

(80,785,887 )

 

 

(76,752,170 )

 Total Singlepoint Inc. stockholders' deficit

 

 

(2,644,377 )

 

 

(4,366,529 )

 Non-controlling interest

 

 

(553,799 )

 

 

(143,011 )

 Total Stockholders' Deficit

 

 

(3,198,176 )

 

 

(4,509,540 )

 

 

 

 

 

 

 

 

 

 Total Liabilities and Stockholders' Deficit

 

$ 2,915,680

 

 

$ 2,421,717

 

 

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

 

F-2

Table of Contents

  

SINGLEPOINT INC. AND SUBSIDIARIES

 CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

For the Years Ended

 

 

 

December 31, 2020

 

 

December 31, 2019

 

 

 

 

 

 

 

 

 REVENUE

 

$ 2,878,161

 

 

$ 3,343,833

 

 

 

 

 

 

 

 

 

 

 Cost of Revenue

 

 

2,204,391

 

 

 

2,353,056

 

 

 

 

 

 

 

 

 

 

 Gross profit

 

 

673,770

 

 

 

990,777

 

 

 

 

 

 

 

 

 

 

 OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 Consulting fees

 

 

363,701

 

 

 

583,350

 

 Professional and legal fees

 

 

316,239

 

 

 

293,269

 

 Investor relations

 

 

181,637

 

 

 

168,177

 

 General and administrative

 

 

3,111,305

 

 

 

5,410,440

 

 

 

 

 

 

 

 

 

 

 Operating expenses

 

 

3,972,882

 

 

 

6,455,236

 

 

 

 

 

 

 

 

 

 

 LOSS FROM OPERATIONS

 

 

(3,299,112 )

 

 

(5,464,459 )

 

 

 

 

 

 

 

 

 

 OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

 Interest expense

 

 

(482,107 )

 

 

(393,611 )

 Amortization of debt discounts

 

 

(2,174,273 )

 

 

(1,662,068 )

 Loss on settlement of debt

 

 

(41,262 )

 

 

-

 

 Gain (loss) on change in fair value of derivative liability and equity securities

 

 

1,552,249

 

 

 

(604,289 )

 Loss on disposal of subsidiary

 

 

-

 

 

 

55,694

 

 

 

 

 

 

 

 

 

 

 Other income (expense)

 

 

(1,145,393 )

 

 

(2,604,274 )

 

 

 

 

 

 

 

 

 

 INCOME (LOSS) BEFORE INCOME TAXES

 

 

(4,444,505 )

 

 

(8,068,733 )

 

 

 

 

 

 

 

 

 

 Income taxes

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 NET INCOME (LOSS)

 

 

(4,444,505 )

 

 

(8,068,733 )

 

 

 

 

 

 

 

 

 

 Loss (income) attributable to non-controlling interests

 

 

410,788

 

 

 

163,001

 

 

 

 

 

 

 

 

 

 

 NET INCOME (LOSS) ATTRIBUTABLE TO SINGLEPOINT INC. STOCKHOLDERS

 

$ (4,033,717 )

 

$ (7,905,732 )

 

 

 

 

 

 

 

 

 

 Net income (loss) per share - basic 

 

$ (0.00 )

 

$ (0.01 )

 

 

 

 

 

 

 

 

 

 Weighted average number of common shares 

 

 

 

 

 

 

 

 

    outstanding - basic

 

 

2,209,230,173

 

 

 

1,504,104,112

 

 

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

 

F-3

Table of Contents

 

SINGLEPOINT INC. AND SUBSIDIARIES 

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

 

 

 

 Preferred Stock  Class A Par Value $0.0001 

 

 

 Preferred Stock  Class B Par Value $0.0001 

 

 

 Common Stock Par Value $0.0001  

 

 

 Additional 

 

 

 

 

 

 Non-

 

 

 Total  

 

 

 

 Number of Shares

 

 

 Amount

 

 

 Number of Shares

 

 

 Amount

 

 

 Number of Shares

 

 

 Amount

 

 

  paid-in

Capital

 

 

Accumulated

Deficit

 

 

 controlling

Interest

 

 

 Stockholders'

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2018

 

 

50,950,000

 

 

$ 5,095

 

 

 

-

 

 

$ -

 

 

 

1,236,319,023

 

 

$ 123,632

 

 

$ 63,940,510

 

 

$ (68,846,438 )

 

$ (89,163 )

 

$ (4,866,364 )

Issuance of common shares for services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26,983,333

 

 

 

2,698

 

 

 

371,352

 

 

 

 

 

 

 

 

 

 

 

374,050

 

Issuance of common shares for services previously accrued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,000,000

 

 

 

800

 

 

 

799,200

 

 

 

 

 

 

 

 

 

 

 

800,000

 

Issuance of common shares for acquisition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

156,058,751

 

 

 

15,606

 

 

 

1,950,735

 

 

 

 

 

 

 

 

 

 

 

1,966,341

 

Issuance of common shares for principal and accrued interest on convertible notes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

135,418,713

 

 

 

13,542

 

 

 

555,958

 

 

 

 

 

 

 

 

 

 

 

569,500

 

Issuance of preferred shares for services

 

 

10,000,000

 

 

 

1,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,099,000

 

 

 

 

 

 

 

 

 

 

 

3,100,000

 

Conversion of preferred shares

 

 

(6,750,000 )

 

 

(675 )

 

 

-

 

 

 

-

 

 

 

135,500,000

 

 

 

13,550

 

 

 

(12,875 )

 

 

 

 

 

 

 

 

 

 

-

 

Warrants issued with convertible notes payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

Settlement of derivative liability due to debt conversion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,506,513

 

 

 

 

 

 

 

 

 

 

 

1,506,513

 

Disposal of subsidiary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

109,153

 

 

 

109,153

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,905,732 )

 

 

(163,001 )

 

 

(8,068,733 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2019

 

 

54,200,000

 

 

$ 5,420

 

 

 

-

 

 

$ -

 

 

 

1,698,279,820

 

 

$ 169,828

 

 

$ 72,210,393

 

 

$ (76,752,170 )

 

$ (143,011 )

 

$ (4,509,540 )

Issuance of common shares for services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30,000,000

 

 

 

3,000

 

 

 

146,200

 

 

 

 

 

 

 

 

 

149,200

 

Issuance of common shares pursuant to investment agreement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

320,000,000

 

 

 

32,000

 

 

 

780,576

 

 

 

 

 

 

 

 

 

812,576

 

Issuance of common shares for acquisition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

Issuance of common shares for principal and accrued interest on convertible notes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

391,696,992

 

 

 

39,169

 

 

 

739,487

 

 

 

 

 

 

 

 

 

778,657

 

Issuance of preferred shares for services

 

 

7,400,000

 

 

 

740

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

554,260

 

 

 

 

 

 

 

 

 

555,000

 

Issuance of preferred shares for cash

 

 

 

 

 

 

 

 

 

 

408

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

408,000

 

 

 

 

 

 

 

 

 

408,000

 

Conversion of preferred shares

 

 

(1,600,000 )

 

 

(160 )

 

 

 

 

 

 

 

 

 

 

40,000,000

 

 

 

4,000

 

 

 

(3,840 )

 

 

 

 

 

 

 

 

-

 

Warrants issued with convertible notes payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Settlement of derivative liability due to debt conversion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,052,437

 

 

 

 

 

 

 

 

 

3,052,437

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,033,717 )

 

 

(410,788 )

 

 

(4,444,505 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2020

 

 

60,000,000

 

 

$ 6,000

 

 

 

408

 

 

$ -

 

 

 

2,479,976,812

 

 

$ 247,997

 

 

$ 77,887,513

 

 

$ (80,785,887 )

 

$ (553,799 )

 

$ (3,198,176 )

 

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

 

F-4

Table of Contents

 

SINGLEPOINT INC. AND SUBSIDIARIES  

CONSOLIDATED STATEMENTS OF CASH FLOWS 

 

 

 

For the Years Ended

 

 

 

December 31, 2020

 

 

December 31, 2019

 

 

 

 

 

 

 

 

 CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 Net loss attributable to Singlepoint Inc. stockholders

 

$ (4,033,717 )

 

$ (7,905,732 )

 

 

 

 

 

 

 

 

 

 Adjustments to reconcile net loss to net cash used in operating activities

 

 

 

 

 

 

 

 

 Loss attributable to non-controlling interests

 

 

(410,788 )

 

 

(163,001 )

 Gain on disposal of subsidiary

 

 

-

 

 

 

(55,694 )

 Common stock issued for services

 

 

149,200

 

 

 

1,174,050

 

 Depreciation

 

 

57,764

 

 

 

44,762

 

 Amortization of intangibles

 

 

23,595

 

 

 

-

 

 Amortization of debt discounts

 

 

2,174,273

 

 

 

1,662,068

 

 (Gain) loss on change in fair value of derivatives

 

 

(1,552,249 )

 

 

604,289

 

 Loss on debt settlement

 

 

41,264

 

 

 

-

 

 Preferred stock issued for services

 

 

555,000

 

 

 

3,100,000

 

 Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 Accounts receivable

 

 

45,860

 

 

 

(43,249 )

 Prepaid expenses

 

 

19,593

 

 

 

(15,489 )

 Inventory

 

 

11,207

 

 

 

(74,506 )

 Accounts payable

 

 

77,423

 

 

 

21,304

 

 Accrued expenses

 

 

886,196

 

 

 

(136,492 )

 

 

 

 

 

 

 

 

 

 NET CASH USED IN OPERATING ACTIVITIES

 

 

(1,955,379 )

 

 

(1,787,690 )

 

 

 

 

 

 

 

 

 

 CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 Cash received for return of investment

 

 

25,000

 

 

 

-

 

 

 

 

 

 

 

 

 

 

NET CASH PROVIDED BY INVESTING ACTIVITIES

 

 

25,000

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 Proceeds from sale of common stock

 

 

812,576

 

 

 

-

 

 Proceeds from advances from related party

 

 

403,791

 

 

 

168,445

 

 Proceeds from short-term notes payable

 

 

372,232

 

 

 

-

 

 Proceeds from long-term notes payable

 

 

150,000

 

 

 

 

 

 Payments on advances to related party

 

 

-

 

 

 

(13,961 )

 Payments on convertible notes payable 

 

 

(389,638 )

 

 

(37,352 )

 Payments on capital lease obligations

 

 

(58,737 )

 

 

(38,095 )

 Proceeds from issuance of convertible notes

 

 

320,500

 

 

 

1,750,000

 

 Proceeds from sale of preferred stock - Class B

 

 

408,000

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 NET CASH PROVIDED BY FINANCING ACTIVITIES

 

 

2,018,724

 

 

 

1,829,037

 

 

 

 

 

 

 

 

 

 

 NET CHANGE IN CASH

 

 

88,345

 

 

 

41,347

 

 

 

 

 

 

 

 

 

 

 Cash at beginning of period

 

 

110,128

 

 

 

68,781

 

 

 

 

 

 

 

 

 

 

 Cash at end of period

 

$ 198,473

 

 

$ 110,128

 

 

 

 

 

 

 

 

 

 

 SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:

 

 

 

 

 

 

 

 

 Interest paid

 

$ -

 

 

$ 52,648

 

 Income tax paid

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

 NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 Common stock issued for accrued interest

 

$ 15,420

 

 

$ 108,828

 

 Common stock issued to acquire subsidiary

 

$ -

 

 

$ 1,966,341

 

 Original issue discount from issuance of notes payable

 

$ 39,500

 

 

$ 175,000

 

 Common stock issued for conversion of debt and accrued interest

 

$ 778,657

 

 

$ 569,500

 

 Recognition of debt discount attributable to derivative liability

 

$ 984,801

 

 

$ 1,500,000

 

 Derivative liability settlements

 

$ 3,052,437

 

 

$ 1,506,513

 

 Conversion of preferred stock to common stock

 

$ 4,000

 

 

$ 13,550

 

 Issuance of common stock previously accrued

 

$ -

 

 

$ 800,000

 

 Derivative liability recognized from convertible debt

 

$ 1,133,238

 

 

$ 1,954,759

 

 Day one recognition of ROU asset and lease liability

 

$ -

 

 

$ 181,692

 

 Investment in Jacksam for reduction of advances from related party

 

$ 218,874

 

 

$ -

 

 Derivative liability in excess of face value

 

$

 149,213

 

 

$

 -

 

 

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

 

F-5

Table of Contents

 

SINGLEPOINT INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS

 

Corporate History

 

Carbon Credits International Inc. (“CCII”), which was formed on October 15, 2007 as a Nevada corporation, was the result of a spin off from Carbon Credits Industries, Inc. (“CCI”), its former parent issuer, on October 17, 2007. On December 23, 2011, CCII entered into a merger agreement with Lifestyle Wireless, Inc. (“LWI”), a Washington Corporation, with CCII remaining as the surviving company. The effective date of the merger was January 10, 2012. On July 1, 2013, CCII changed its name to Singlepoint Inc. (“Singlepoint” or “the Company”). On May 14, 2019, the Company established a subsidiary, Singlepoint Direct Solar LLC (“Direct Solar America”), completing the acquisition of certain assets of Direct Solar America and AI Live Transfers LLC (See Note 3). The Company owns Fifty One Percent (51%) of the membership interests of Direct Solar America.

 

Business

 

We are a company focused on providing renewable energy solutions and energy-efficient applications to drive better health and living. We currently have core subsidiaries including solar and air purification. We built our portfolio through synergistic acquisitions, products, and partnerships to provide a rich, diversified holding base. The Company’s initial focus is on solar energy and we are committed to building a foundation for future expansion opportunities and building brands based on technology solutions we believe will increase efficiencies across various markets. We strive to create long-term value for our shareholders by helping our partner companies to increase their market penetration, grow revenue and improve cash flow. As of December 31, 2020 we currently have three subsidiaries, Direct Solar America, 51% interest, Discount Indoor Garden Supply, Inc. (“DIGS”, 90% interest), and ShieldSaver, LLC (“ShieldSaver”, 51% interest). Our principal offices are located at 2999 North 44th Street Suite 530, Phoenix, AZ 85018, telephone: (888) 682-7464. We have formalized, announced and are in the process of spinning out our 1606 Corp. We may decide to due future spin-off additional assets or subsidiaries 

 

Going Concern

 

The financial statements have been prepared assuming that the Company will continue as a going concern. As of December 31, 2020, the Company has yet to achieve profitable operations and is dependent on its ability to raise capital from stockholders or other sources to sustain operations and to ultimately achieve viable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

The Company’s ability to continue in existence is dependent on the Company’s ability to develop the Company’s businesses and to achieve profitable operations. Since the Company does not anticipate achieving profitable operations and/or adequate cash flows in the near term, management will continue to pursue additional equity financing through private placements of the Company’s common stock.

 

NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of Singlepoint, DIGS, Direct Solar America and ShieldSaver as of December 31, 2020 and December 31, 2019, (with the accounts of Jiffy Auto Glass (“JAG”), a former subsidiary dissolved July 26, 2019). All significant intercompany transactions have been eliminated in consolidation.

 

F-6

Table of Contents

 

Revenues

 

The Company records revenue under the adoption of ASC 606 by analyzing exchanges with its customers using a five-step analysis:

 

 

(1)

identifies the contract(s) with a customer;

 

 

 

 

(2)

identifies the performance obligations in the contract(s);

 

 

 

 

(3)

determines the transaction price;

 

 

 

 

(4)

allocates the transaction price to the performance obligations in the contract(s); and

 

 

 

 

(5)

recognizes revenue when (or as) the entity satisfies a performance obligation.

 

The Company incurs costs associated with product distribution, such as freight and handling costs. The Company has elected to treat these costs as fulfillment activities and recognizes these costs at the same time that it recognizes the underlying product revenue. In accordance with ASC 606, the Company recognizes revenue at an amount that reflects the consideration that the Company expects to be entitled to receive in exchange for transferring goods or services to its customers. The Company’s policy is to record revenue when control of the goods transfers to the customer.

 

The Company uses three categories for disaggregated revenue classification:

 

 

(1)

Retail Sales (DIGS, Singleseed),

 

 

 

 

(2)

Distribution (1606 and related products) and,

 

 

 

 

(3)

Services Revenue (Direct Solar, Mobile Web Credit Card Gateway, Shieldsaver).

 

Additionally, the Company also disaggregates revenue by subsidiary:

 

 

(1)

Singlepoint (parent company)

 

 

 

 

(2)

Direct Solar America

 

 

 

 

(3)

DIGS

 

There were no revenues from Shield Saver or JAG (dissolved in 2019) during the year ended December 31, 2020.

 

Retail Sales. Our retail sales include our products sold directly to consumers, with sales recognized upon delivery of the product to the customer, with the customer taking risk of ownership and assuming risk of loss. Payment is due upon delivery. DIGS operates an online store and sells nutrients, lights, HVAC systems and other products to consumers. Singleseed provides products through its online portal.

 

F-7

Table of Contents

 

Distribution Revenue. Our distribution revenue includes Singlepoint’s 1606 and related product sales to third-party resellers with revenue recognized upon delivery of the product to the reseller, with the reseller taking risk of ownership and assuming risk of loss. Payment is due upon delivery or within 30 days of invoicing. Except for when sold direct to consumer upon which payment is due immediately.

 

Services Revenue. Our services revenue includes services provided by Direct Solar America, which earns commission revenue for solar services placed with third-party contractors and recognizes revenue upon date of completion of installation. Cash received in advance of contract completion is recognized as deferred revenue until contracts are complete. Singlepoint’s merchant services provides payment services to businesses with revenue recognized upon the close and remittance of commissions each month. ShieldSaver offers business-to business services related to windshield repair and replacement for consumers. Service revenue is recognized as the performance obligations are fulfilled, with the customer taking risk of ownership and assuming risk of loss. Payment for service revenue is generally due upon completion.

 

Returns and other adjustments

 

The Company records an estimate for provisions of discounts, returns, allowances, customer rebates and other adjustments for each shipment, and are netted with gross sales. The Company’s discounts and customer rebates are known at the time of sale and the Company appropriately debits net product revenues for these transactions based on the known discount and customer rebates. The Company estimates for customer returns and allowances based on estimates of historical transactions and accounts for such provisions during the same period in which the related revenues are earned. Customer discounts, returns and rebates on product revenues during the year ended December 31, 2020 and 2019 are not material.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with the original maturities of ninety days or less at the time of purchase to be cash equivalents. The Company maintains deposits in financial institutions which are insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company had no deposits in excess of amounts insured by the FDIC as of December 31, 2020.

 

Convertible Instruments

 

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with the Accounting Standards Committee (“ASC”) 815 “Derivatives and Hedging”. It provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative financial instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or other expense. Upon conversion or exercise of a derivative financial instrument, the instrument is marked to fair value at the conversion date and is reclassified to equity. The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of notes redemption

 

F-8

Table of Contents

 

Income Taxes

 

The Company accounts for its income taxes in accordance with ASC 740 “Income Taxes”, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company has a net operating loss carryforward, however, due to the uncertainty of realization, the Company has provided a full valuation allowance for deferred tax assets resulting from this net operating loss carryforward.

 

Earnings (loss) Per Common Share

 

Basic loss per common share has been calculated based upon the weighted average number of common shares outstanding during the period in accordance with the ASC 260-10, “Earnings per Share”. Common stock equivalents are not used in the computation of loss per share, as their effect would be antidilutive. Diluted EPS includes the effect from potential issuance of common stock, including stock issuable pursuant to the assumed exercise of warrants and conversion of convertible notes and Class A Preferred Stock. Dilutive EPS is computed by dividing net income (loss) by the sum of the weighted average number of common stock outstanding, and the dilutive shares.

 

The following table summarizes the number of shares of common stock issuable pursuant to our convertible securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive even though the exercise price could be less than the average market price of the common shares:

 

 

 

Year

Ended

 

 

Year

Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

Series A Preferred Stock

 

 

1,500,000,000

 

 

 

1,355,000,000

 

Series B Preferred Stock

 

 

200,655,733

 

 

 

-

 

Convertible notes

 

 

1,500,000

 

 

 

603,436,155

 

Warrants

 

 

10,000,000

 

 

 

10,000,000

 

Potentially dilutive securities

 

 

1,712,155,733

 

 

 

1,968,436,155

 

 

Use of Estimates in the Preparation of Financial Statements

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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 and assumptions.

 

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Table of Contents

 

Fair Value Measurements

 

On January 1, 2011, the Company adopted guidance which defines fair value, establishes a framework for using fair value to measure financial assets and liabilities on a recurring basis, and expands disclosures about fair value measurements. Beginning on January 1, 2011, the Company also applied the guidance to non-financial assets and liabilities measured at fair value on a non-recurring basis, which includes goodwill and intangible assets. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

 

Level 1 - Valuation is based upon unadjusted quoted market prices for identical assets or liabilities in accessible active markets.

 

Level 2 - Valuation is based upon quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable in the market.

 

Level 3 - Valuation is based on models where significant inputs are not observable. The unobservable inputs reflect a company’s own assumptions about the inputs that market participants would use.

 

The Company’s financial instruments consist of cash, accounts receivable, investments, accounts payable, convertible notes payable, advances from related parties, and derivative liabilities. The estimated fair value of cash, accounts receivable, accounts payable, convertible notes payable and advances from related parties approximate their carrying amounts due to the short-term nature of these instruments.

 

Certain non-financial assets are measured at fair value on a nonrecurring basis. Accordingly, these assets are not measured and adjusted to fair value on an ongoing basis but are subject to periodic impairment tests.

 

The Company’s derivative liabilities have been valued as Level 3 instruments.

 

As of December 31, 2019, the Company had an investment in equity securities that did not have a readily determinable fair value, or “RDFV”. This investment was assessed and measured at fair value that was determined to be zero. As of December 31, 2020, this investment in equity securities did meet the standards for a RDFV and has been valued as Level 1 instruments. For the year ended December 31, 2020, a net gain of $807,511 was recognized related to the fair value measurement of these equity securities.

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair value of convertible notes derivative liability and equity securities – December 31, 2020

 

$ 588,637

 

 

$

 

 

$

 

 

$

588,637

 

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair value of convertible notes derivative liability and equity securities – December 31, 2019

 

$

 

 

$

 

 

$ 2,813,150

 

 

$ 2,813,150

 

 

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Table of Contents

 

The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of December 31, 2019 and December 31, 2020:

 

 

 

Derivative

Liability

 

 

 

 

 

 

Balance, December 31, 2019

 

 

2,813,150

 

Additions recognized as debt discount

 

 

984,801

 

Derivative liability settlements

 

 

(3,053,213 )

Mark-to-market at December 31, 2020

 

 

(744,738 )

Balance, December 31, 2020

 

$ -

 

 

 

 

 

 

Net income for the year included in earnings relating to the liabilities held at December 31, 2020

 

$ 744,738

 

 

Recently Issued Accounting Pronouncements

 

Leases

 

In February 2016, the FASB issued 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 are 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 are 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 was effective for our interim and annual periods beginning January 1, 2019 and was 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. We adopted this standard on January 1, 2019. The adoption of this standard resulted in a charge of approximately $14,000 to general and administrative expense for the year ended December 31, 2019.

 

There were various other accounting standards and interpretations issued recently, none of which are expected to have a material impact on the Company’s financial position, operations or cash flows. Management has evaluated these new pronouncements through December 31, 2020.

 

Subsequent Events

 

Other than the events described in Note 12, there were no subsequent events that required recognition or disclosure. The Company evaluated subsequent events through the date the financial statements were issued and filed with the Securities and Exchange Commission. 

 

NOTE 3 – INVESTMENTS, ACQUISITIONS, GOODWILL AND INTANGIBLE ASSETS

 

Investments

 

The Company records certain investments using the cost method. If cost exceeds fair value, an impairment loss is recognized unless the impairment is considered temporary. The Company records investments in equity securities using the fair value method. In certain cases, the equity securities may not meet the criteria for RDFV, then the Company determines the fair value using the market price of the equity securities on the given remeasurement date less the applicable discount calculated using a put option pricing model with the applicable assumptions and inputs.

 

F-11

Table of Contents

 

The Company had investments recorded using the cash method of $35,000 and $60,000 as of December 31, 2020 and 2019, respectively.

 

The Company had investments in equity securities using the fair value method of $588,637 and $0 as of December 31, 2020 and 2019, respectively.

 

2019 Asset Acquisition – Direct Solar LLC and AI Live Transfers LLC

 

On May 14, 2019, the Company, via the formation of Direct Solar America, completed the acquisition of certain assets of Direct Solar LLC and AI Live Transfers LLC (the “Acquired Assets”). The Company owns 51% of the membership interests of Direct Solar America. In connection with the acquisition of these assets the Company issued an aggregate of 156,058,751 shares of common stock. The Company agreed that it shall reinvest into Direct Solar America its portion of distributions of Net Cash Flow (as defined in the Operating Agreement of Direct Solar America), if any, up to $250,000 per quarter, up to a total of $750,000. Direct Solar America has not made any distributions and no amounts have been reinvested as of December 31, 2020.

  

The total value of common stock issued for the purchase of the Acquired Assets was $1,966,340 on the issuance date and was allocated to goodwill based on the workforce acquired and to intangible assets based on trademarks and tradenames acquired. The total purchase price for the Acquired Assets was allocated as follows:

 

Intangible assets

 

$ 72,600

 

Goodwill

 

 

1,893,740

 

Current assets

 

 

-

 

Current liabilities

 

 

-

 

Total net assets acquired

 

$ 1,966,340

 

The purchase price consists of the following:

 

 

 

 

Cash

 

 

-

 

Common Stock

 

 

1,966,340

 

Total purchase price

 

$ 1,966,340

 

 

Total revenue of $2,653,924, net loss of $848,351, and contributed net loss of $410,788 after non-controlling interest related to Direct Solar America for the year ended December 31 , 2020 are included in the Company’s accompanying consolidated statement of operations. 

 

Goodwill and Intangible Assets

 

The following table presents details of the Company’s goodwill as of December 31, 2020 and December 31, 2019:

 

 

 

 Direct Solar America

 

Balances at December 31, 2019:

 

 

1,966,340

 

Aggregate goodwill acquired

 

 

-

 

Impairment losses

 

 

-

 

Goodwill adjustment

 

 

(72,600 )

Balances at December 31, 2020:

 

$ 1,893,740

 

 

F-12

Table of Contents

 

The Company periodically reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist. Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. Specifically, a goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses level 3 inputs and a discounted cash flow methodology. A discounted cash flow analysis requires one to make various judgmental assumptions including assumptions about future cash flows, growth rates, and discount rates. The assumptions about future cash flows and growth rates are based on the Company’s budget and long-term plans. Discount rate assumptions are based on an assessment of the risk inherent in the respective reporting units.

 

The Company used the discounted cash flow method for the impairment testing as of December 31, 2020. The Company performed discounted cash flow analysis projected over four years to estimate the fair value of the reporting unit, using management’s best judgement as to revenue growth rates and expense projections. This analysis indicated cash flows (and discounted cash flows) greater than the book value of goodwill. The Company determined there were no indicators of impairment in goodwill during the year ended December 31, 2020.

 

During the year ended December 31, 2020, the Company adjusted its goodwill to reflect its final valuation of its goodwill and intangible assets. The adjustment decreased goodwill and increased intangible assets by $72,600, with no effect on total purchase price. The gross intangible assets of $72,600 have an estimated useful life of three years, a net book value of $49,005 as of December 31, 2020, and amortization expense of $23,595 for the year ended December 31, 2020.

 

Proforma Information (unaudited)

 

Singlepoint Direct Solar LLC

 

The following unaudited pro forma information presents the consolidated results of the Company’s operations and the results of the acquisition of the Acquired Assets as if the May 14, 2019 acquisition had been consummated on January 1, 2019. Such unaudited pro forma information is based on historical unaudited financial information with respect to the Acquired Assets acquisition and does not include operational or other charges which might have been affected by the Company. The unaudited pro forma information for the year ended December 31, 2019 presented below is for illustrative purposes only and is not necessarily indicative of the results which would have been achieved or results which may be achieved in the future:

 

 

 

Year

Ended

December 31,

 

 

 

2019

 

Net revenue

 

$ 4,098,382

 

Net loss

 

$ (8,125,411 )

 

F-13

Table of Contents

 

NOTE 4 - CONVERTIBLE NOTES PAYABLE AND NOTES PAYABLE

 

Convertible notes payable consisted of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

2020

 

 

December 31,

2019

 

 

 

 

 

 

 

 

Convertible note payable to investor (the “CVP Note”) dated October 10, 2017, with interest at 10%, an Original Issue Discount (“OID”) of $70,000, due October 6, 2019, convertible into shares of the Company’s common stock at a discount of 60% of the average of the three lowest closing bid prices of the Company’s common stock during the 20 trading days prior to conversion. The CVP Note provides for additional tranches of a maximum of $3,970,000, which includes OID of 10%. The note includes a warrant to purchase 5,000,000 shares of the Company’s common stock at a price of $0.10 per share. The CVP Note is secured by substantially all assets of the Company. The investor converted a total of $444,500 of principal and accrued interest of this note into 105,875,646 shares of the Company’s common stock and was repaid $40,000 by the Company during the year ended December 31, 2019. Additionally, the investor converted a total of $78,420 of principal and accrued interest of this note into 32,034,513 shares of the Company’s common stock and was repaid $25,000 by the Company in 2020, resulting in repayment in full in March 2020.

 

 

-

 

 

 

100,235

 

 

 

 

 

 

 

 

 

 

Convertible note payable to investor (the “UAHC Note”) dated October 10, 2017, with interest at 10%, an OID of $70,000, due October 6, 2019, convertible into shares of the Company’s common stock at a discount of 60% of the average of the three lowest closing bid prices of the Company’s common stock during the 20 trading days prior to conversion. The UAHC Note includes a warrant to purchase 5,000,000 shares of the Company’s common stock at a price of $0.10 per share. The UAHC Note is secured by substantially all assets of the Company. The investor converted a total of $37,767 of principal and accrued interest of this note into 37,767,405 shares of the Company’s common stock. This note was amended on October 12, 2020 whereby the maturity due date was extended to December 31, 2022 with monthly payments required commencing October 1, 2020. A final note settlement agreement was executed on January 27, 2021 (see Note 12).

 

 

581,723

 

 

 

619,490

 

 

 

 

 

 

 

 

 

 

Convertible note payable to investor (the “Iliad Note”) dated November 5, 2018 totaling $500,000, plus OID of $225,000 and legal fees of $20,000. The Iliad Note bears interest at 10% and matures on November 5, 2020. Total available under note is $5,520,000, including $500,000 OID (and $20,000 in legal fees applied to the first $500,000 tranche). The Iliad Note is convertible into shares of the Company’s common stock after 180 days at a discount of 35% of the average of the three lowest closing bid prices of the Company’s common stock during the 20 trading days prior to conversion. The Company borrowed $1,925,000 (including OID of $175,000) under this note during the year ended December 31, 2019. The investor converted a total of $458,360 of principal and accrued interest of this note into 214,880,617 shares of the Company’s common stock and was repaid $194,637 by the Company during the year ended December 31, 2020. The Iliad Note is secured by substantially all assets of the Company. This note was amended on October 12, 2020 whereby the maturity due date was extended to December 31, 2022 with monthly payments required commencing October 1, 2020. A final note settlement agreement was executed on January 27, 2021 (see Note 12).

 

 

1,842,003

 

 

 

2,495,000

 

 

 

 

 

 

 

 

 

 

Convertible note payable to investor (the “GSC Note”) dated March 11, 2020 totaling $320,500, plus OID of $30,000 and legal fees of $9,500. The GSC Note bears interest at 10% and matures on March 6, 2021. Total available under note is $1,440,000, including $120,000 OID (and $9,500 in legal fees taken on first $320,500 tranche). The GSC Note is convertible into shares of the Company’s common stock at any time at a discount of 25% of the lowest closing bid price of the Company’s common stock during the 10 trading days prior to conversion. The investor converted a total of $201,959 of principal and accrued interest of this note into 107,014,457 shares of the Company’s common stock and the full outstanding balance of $170,000 was repaid during the year ended December 31, 2020. 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Convertible note payable with an accredited investor dated October 31, 2016, with interest at 0%, due October 31, 2017, convertible at $0.007 per share. This note is currently in default.

 

$ 10,500

 

 

$ 10,500

 

 

 

 

 

 

 

 

 

 

Total convertible notes payable

 

 

2,434,226

 

 

 

3,225,225

 

Less debt discounts

 

 

 

 

 

 

(1,154,327 )

Convertible notes payable, net

 

 

2,434,226

 

 

 

2,070,898

 

Less current portion of convertible notes, net

 

 

(2,434,226 )

 

 

(2,070,898 )

Long-term convertible notes payable, net

 

$ -

 

 

$ -

 

  

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Table of Contents

 

Accrued interest on the above notes payable totaled $518,366 and $227,352 as of December 31, 2020 and 2019, respectively. Interest expense for the above notes payable for the years ended December 31, 2020 and 2019 was $306,158 and $300,168, respectively. Total amortization of debt discounts was $2,174,273 and $1,662,068 for the years ended December 31, 2020 and 2019, respectively.

 

Short-term Notes Payable

 

In May 2020, the Company received total loan proceeds of $332,737 under the SBA’s Paycheck Protection Program (“PPP”) and is included in short-term notes payable as of December 31, 2020. The two PPP loans include a promissory note with Direct Solar America with principal of $312,300, due May 7, 2022, and a promissory note with Singlepoint with principal of $20,437, due in 18 monthly installments beginning December 12, 2020. Both PPP loans bear interest at 1%. Under the PPP loan terms, the Company may apply (and plans to apply) for forgiveness of the PPP loans. 

 

Long-term Note Payable

 

In May 2020, the Company received loan proceeds of $150,000 under the SBA’s Economic Injury Disaster Loan program (“EIDL”). The EIDL dated May 22, 2020, bears interest at 3.75%, has a 30-year term, is secured by substantially all assets of the Company, and is due in monthly installments of $731 beginning May 1, 2021.

 

NOTE 5 – OBLIGATIONS UNDER CAPITAL LEASE

 

The Company leases approximately 1,400 square feet of office space at 2999 North 44th Street, Phoenix, Arizona 85018 through January 31, 2023 at a monthly base rent of $3,270 through January 2020, increasing to $3,618, $3,688 and to $3,758 per month beginning February 2020, February 2021 and February 2022, respectively.

 

On July 2, 2019, the Company executed a lease agreement for an industrial building space in California for 24 months at base rent of $2,400 per month through June 30, 2021, upon which the lease expires.

    

The above leases are classified as capital leases under ASC 842 which the Company adopted in 2019. The following is a summary of property held under these capital leases at December 31, 2020 and 2019:

 

 

 

December 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

Office and warehouse facilities

 

$ 224,037

 

 

$ 224,037

 

Accumulated amortization

 

 

(144,870 )

 

 

(87,106 )

 

 

 

 

 

 

 

 

 

Total

 

$ 79,167

 

 

$ 136,931

 

  

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Table of Contents

 

Future maturities of obligations under capital leases are as follows:

 

Twelve months ending December 31,

 

 

 

2021

 

$ 58,585

 

2022

 

 

45,020

 

2023

 

 

3,758

 

 

 

 

 

 

Total minimum lease payments

 

 

107,363

 

Amounts representing interest

 

 

(8,481 )

 

 

$ 98,882

 

 

NOTE 6 - DERIVATIVE LIABILITY

 

Derivative Liability- Debt

 

The fair value of the described embedded derivative on all convertible debt was valued at $0 due to the note amendment executed on October 12, 2020, and $2,813,150 at December 31, 2020 and December 31, 2019, respectively, which was determined using the Black Scholes Pricing Model with the following assumptions:

 

 

 

December 31, 2020

 

 

December 31, 2019

 

Dividend yields

 

 

0 %

 

 

0 %
Term

 

0-1.0 year

 

 

0-2.0 year

 

Volatility

 

79.54% - 107.2

%

 

107.0% - 133.0

%

Risk free rate

 

0.10 - 1.59

%

 

1.54 - 2.60

%

 

The Company adjusted the recorded fair value of the derivative liability on debt to market resulting in non-cash, non-operating gain of $744,738 and $604,289 for the years ended December 31, 2020 and 2019, respectively.

 

Note 2 contains a summary of changes in fair value of the Company’s Level 3 financial liabilities as of December 31, 2020. 

 

NOTE 7 - STOCKHOLDERS’ DEFICIT

 

On January 30, 2020, the Company amended its Articles of Incorporation and authorized 5,000,000,000 shares of common stock (previously 2,000,000,000 shares) and 100,000,000 shares of preferred stock (previously 60,000,000 shares), of which 60,000,000 shares are designated as Class A Convertible Preferred Stock. The Company has retroactively reflected this amendment as of December 31, 2019.

 

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Table of Contents

 

On December 18, 2020, the Company amended its Articles of Incorporation to designate 1,500 shares of undesignated preferred stock as Class B Preferred Stock.

 

Class A Convertible Preferred Shares

 

As of December 31, 2020 and, 2019, the Company had authorized 100,000,000 shares of preferred stock, $0.0001 par value per share, of which 60,000,000 shares are designated as Series A Convertible Preferred Stock (“Class A Stock”) with $0.0001 par value per share, of which 60,000,000 and 54,200,000 shares were issued and outstanding as of December 31, 2020 and 2019, respectively.

 

Each share of Class A Stock is convertible at any time into 25 shares of common stock, totaling 1,500,000,000 and 1,355,000,000 shares of common stock assuming full conversion of all outstanding shares as of December 31, 2020 and 2019, respectively. No dividends are payable unless declared by the Board of Directors. Each share of Class A Stock votes with the shares of Common Stock and is entitled to 50 votes per share and ranks senior to all other classes of stock in liquidation in the amount of $1 per share.

 

Class B Convertible Preferred Shares

 

As of December 31, 2020, the Company authorized 1,500 shares of preferred stock, $.0001 par value per share, of which 408 shares were issued and outstanding.

 

As of December 31, 2020 and 2019, a total of 39,998,500 and 40,000,000 shares of preferred stock remain undesignated and unissued, respectively.

 

Common Stock

 

As of December 31, 2020 and 2019, the Company’s authorized common stock was 5,000,000,000 shares, at $0.0001 par value per share, with 2,479,976,812 and 1,698,279,820 shares issued and outstanding as of December 31, 2020 and 2019, respectively.

 

Equity Financing Agreement

 

On April 21, 2020, the Company entered an Equity Financing Agreement (the “Equity Financing Agreement”) and Registration Rights Agreement (the “Registration Rights Agreement”) with GHS Investments LLC (“GHS”). Pursuant to the Equity Financing Agreement GHS agreed to purchase up to $7,000,000 in shares of the Company’s common stock, from time to time over the course of twenty-four (24) months after effectiveness of a registration statement on Form S-1 (the “Registration Statement”) of the underlying shares of Common Stock (the “Contract Period”). The Registration Statement was declared effective on July 29, 2020 at which time the Company was authorized to direct GHS to purchase shares of Common Stock of the Company.

 

The Equity Financing Agreement grants the Company the right, from time to time at its sole discretion (subject to certain conditions) during the Contract Period, to direct GHS to purchase shares of Common Stock on any business day (a Put”), provided that at least ten trading days has passed since the most recent Put. The purchase price of the shares of Common Stock contained in a Put shall be 80% percent of the lowest volume weighted average price (VWAP) of the Company’s Common Stock for ten (10) consecutive trading days preceding the Put. No Put will be made in an amount less than $25,000 or greater than $500,000. In no event is the Company entitled to make a Put or is Investor be entitled to purchase that number of shares of Common Stock of the Company, which when added to the sum of the number of shares of Common Stock beneficially owned, by GHS, would exceed 4.99% of the number of shares of Common Stock outstanding on such date.

 

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Table of Contents

 

The Equity Financing Agreement terminates upon any of the following events: when GHS has purchased an aggregate of $7,000,000 in the Common Stock of the Company pursuant to the Equity Financing Agreement; on the Date that is twenty-four (24) calendar months from the date the Registration Statement is declared "Effective"; at such time that the Registration Statement is no longer in effect; by the Company at any time, after ninety (90) calendar days notice following the closing of any Put; or upon thirty (30) calendar days after written notice by the Company if no Put Notices have been delivered. Actual sales of shares of Common Stock to the Investor under the Equity Financing Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Common Stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations. The net proceeds under the Equity Financing Agreement to the Company will depend on the frequency and prices at which the Company sells shares of its stock to GHS.

 

Shares issued during the year ended December 31, 2020

 

During the year ended December 31, 2020, the Company issued a total of 320,000,000 shares of common stock to GHS at an aggregate price of $812,576 (or $0.0025 per share) under the Put notices issued by the Company under the Equity Financing Agreement.

 

During the year ended December 31, 2020, the Company issued an aggregate of 391,696,992 shares of common stock to investors for the conversion of a total of $778,657 of convertible debt and accrued interest.

 

On February 11, 2020, the Company issued 10,000,000 shares of common stock to a consultant for services with a fair value of $87,000, or $0.0087 per share.

 

On March 12, 2020, the Company issued 5,000,000 shares of common stock to a consultant for services with a fair value of $30,000, or $0.0060 per share.

 

On October 9, 2020, the Company issued 7,400,000 shares of Class A Preferred Stock to five of the Company’s directors at an aggregate value of $555,000.

 

On December 8, 2020 the Company issued 15,000,000 shares of common stock to two consultants for services with a fair value of $42,000, or $0.0021 per share.

 

NOTE 8 - RELATED PARTY TRANSACTIONS

 

Accrued Officer Compensation

 

As of December 31, 2020 and December 31, 2019, a total of $1,005,230 and $588,611, respectively, was accrued for unpaid officer wages due the Company’s CEO, CFO and President under their respective employment agreements.

 

Other

 

The Company’s CEO has advanced the Company funds since 2017, with a balance due of $911,826 and $735,000, respectively, plus accrued interest of $216,807 and $96,273 as of December 31, 2020 and 2019, respectively. These balances accrue interest at 12% beginning on October 1, 2018, are unsecured and due on demand. Total interest expense on the advances totaled $216,807 and $78,243, for the years ended December 31, 2020 and 2019, respectively. In November 2020, the Company sold the CEO 1,075,527 common shares of equity securities of Jacksam with a fair value measured at $218,874 and was recorded as a reduction of debt related to advances from the related party.

 

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Table of Contents

 

As of December 31, 2020 and December 31, 2019, a total of $13,039 and $15,222, respectively, was due to the founder of DIGS for advances to DIGS.

 

As of December 31, 2020 and December 31, 2019, a total of $0 and $2,892, respectively, was due the founder of DIGS and is included in accounts payable.

 

In March 2020, the board of directors authorized the conversion of amounts payable to the Company’s officers to the Company’s common stock. The amounts are convertible at the option of the officer at a conversion price of $0.01 per share. As of the date of this report, no officer has converted any monies owed into shares of the Company’s common stock.

 

NOTE 9 – COMMITMENTS AND CONTINGENCIES

 

Employment Agreements

 

In May 2018 the Company entered into an employment agreement with Mr. Greg Lambrecht. The agreement provided that Mr. Lambrecht would serve as CEO and CFO of the Company for a term of three years at an annual salary of $220,000, and an incentive bonus as determined by the board of directors. The agreement shall automatically be renewed for additional three-year periods unless either party has provided written termination of this Agreement at least 90 days prior to the expiration of such term. Greg Lambrecht resigned as CFO of the Company in January 2020. If employment is terminated as a result of his death or Disability (as defined in the agreement), the Company shall pay, his Base Salary (as defined in the agreement) and any accrued but unpaid Bonus (as defined in the agreement) and expense reimbursement amounts through the date of his Death or Disability and a lump sum payment equal to two years of Base Salary (at the time his Death or Disability occurs) within 30 days of his Death or Disability. In the event the Company does not have the cash flow to pay such amount within 30 days as set forth above, the Company may make such payments over 12 equal monthly installments. If employment is terminated by the Board of Directors of the Company for Cause (as defined in the agreement), then the Company shall pay his Base Salary through the date of his termination and there shall be no further entitlement to any other compensation or benefits from the Company. If employment is terminated by the Company (or its successor) upon the occurrence of a Change of Control (as defined in the agreement) or within six (6) months thereafter, the Company (or its successor, as applicable) shall (i) continue to pay to his Base Salary for a period of thirty six (36) months following such termination, (ii) pay any accrued and any earned but unpaid Bonus, (iv) pay the Executive the Bonus he would have earned had he remained with the Company for six (6) months from the date which such termination occurs, (iv) pay expense reimbursement amounts through the date of termination. While the Company does not currently have a stock option plan, if one is created in the future and options are granted to Mr. Lambrecht, all such Stock Options that have not vested as of the date of such termination shall be accelerated and deemed to have vested as of such termination date and shall remain exercisable for a period as outlined in the Company’s Stock Option program, and (v) Mr. Lambrecht shall be entitled to receive equivalent share issuances as any executive officer, management or director of the Company receives for a period of 36 months thereafter. If employment is terminated by Mr. Lambrecht for Good Reason (as defined in the agreement), or if this Agreement is not renewed, then the Company shall (i) pay a single lump sum cash payment within five business days of such termination equal to 18 times the then monthly Base Salary in effect regardless of when such termination occurs (provided, that in the event the Company does not have the cash flow to pay such amount within five business days as set forth above, the Company may make such payments over 12 equal monthly installments), and (ii) pay Executive the Bonus he would have earned had he remained with the Company for six (6) months from the date which such termination occurs, and (iii) pay Executive any expense reimbursement amounts owed, and payment for any unused vacation days, through the date of termination. All Stock Options that are scheduled to vest in the contract year of the date of such termination shall be accelerated and deemed to have vested as of the termination date. All Stock Options that have not vested (or deemed to have vested pursuant to the preceding sentence) shall be deemed expired, null and void. Any Stock Options that have vested as of the date of termination shall remain exercisable for a period as outlined in the Company’s Stock Option program.

 

In May 2018 the Company entered into an employment agreement with Mr. Ralston. The agreement provided that Mr. Ralston would serve as President of the Company for a term of three years at an annual salary of $100,000, and an incentive bonus as determined by the board of directors. The agreement shall automatically be renewed for additional three-year periods unless either party has provided written termination of this Agreement at least 90 days prior to the expiration of such term. If employment is terminated as a result of his death or Disability (as defined in the agreement), the Company shall pay, his Base Salary (as defined in the agreement) and any accrued but unpaid Bonus (as defined in the agreement) and expense reimbursement amounts through the date of his Death or Disability and a lump sum payment equal to two years of Base Salary (at the time his Death or Disability occurs) within 30 days of his Death or Disability. In the event the Company does not have the cash flow to pay such amount within 30 days as set forth above, the Company may make such payments over 12 equal monthly installments. If employment is terminated by the Board of Directors of the Company for Cause (as defined in the agreement), then the Company shall pay his Base Salary through the date of his termination and there shall be no further entitlement to any other compensation or benefits from the Company. If employment is terminated by the Company (or its successor) upon the occurrence of a Change of Control (as defined in the agreement) or within six (6) months thereafter, the Company (or its successor, as applicable) shall (i) continue to pay to his Base Salary for a period of thirty six (36) months following such termination, (ii) pay any accrued and any earned but unpaid Bonus, (iv) pay the Executive the Bonus he would have earned had he remained with the Company for six (6) months from the date which such termination occurs, (iv) pay expense reimbursement amounts through the date of termination. While the Company does not currently have a stock option plan, if one is created in the future and granted to Mr. Ralston, all such Stock Options that have not vested as of the date of such termination shall be accelerated and deemed to have vested as of such termination date and shall remain exercisable for a period as outlined in the Company’s Stock Option program, and (v) Mr. Ralston shall be entitled to receive equivalent share issuances as any executive officer, management or director of the Company receives for a period of 36 months thereafter. If employment is terminated by Mr. Ralston for Good Reason (as defined in the agreement), or if this Agreement is not renewed, then the Company shall (i) pay a single lump sum cash payment within five business days of such termination equal to 18 times the then monthly Base Salary in effect regardless of when such termination occurs (provided, that in the event the Company does not have the cash flow to pay such amount within five business days as set forth above, the Company may make such payments over 12 equal monthly installments), and (ii) pay Executive the Bonus he would have earned had he remained with the Company for six (6) months from the date which such termination occurs, and (iii) pay Executive any expense reimbursement amounts owed, and payment for any unused vacation days, through the date of termination. All Stock Options that are scheduled to vest in the contract year of the date of such termination shall be accelerated and deemed to have vested as of the termination date. All Stock Options that have not vested (or deemed to have vested pursuant to the preceding sentence) shall be deemed expired, null and void. Any Stock Options that have vested as of the date of termination shall remain exercisable for a period as outlined in the Company’s Stock Option program.

 

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In January 2020, the Company entered into an employment agreement with Corey Lambrecht to serve as the Chief Financial Officer of the Company effective January 1, 2020. The following is a summary of the material terms of the employment agreement (all capitalized terms not otherwise defined herein are defined in the employment agreement): term is for a period of one year; salary is $80,000 per year; if employment is terminated as a result of his death or Disability, the Company shall pay the Base Salary and any accrued but unpaid Bonus and expense reimbursement amounts through the date of his Death or Disability and a lump sum payment equal to $40,000 (at the time his Death or Disability occurs) within 30 days of his Death or Disability; If employment is terminated by the Board for Cause, then the Company shall pay the Base Salary and Bonus earned through the date of his termination; If employment is terminated upon the occurrence of a Change of Control or within six (6) months thereafter, the Company (or its successor, as applicable) shall (i) continue to pay to the Base Salary for a period of six (6) months following such termination, (ii) pay any accrued and any earned but unpaid Bonus, (iii) pay the Bonus he would have earned had he remained with the Company for six (6) months from the date which such termination occurs, and (iv) pay expense reimbursement amounts through the date of termination.

 

Equity Incentive Plan

 

On January 30, 2020, the Company adopted the 2019 Equity Incentive Plan (the “Plan”) to provide additional means through the grant of awards to attract, motivate, retain and reward selected employees and other eligible persons. As of the date of this report the Company has not issued any awards under the Plan.

 

Standard Eco LLC (“Standard Eco”) 

 

On October 8, 2020 Direct Solar America and the principals of Standard Eco agreed to the following terms and conditions:

 

 

(i)

Direct Solar America and principles of Standard Eco agreed to form new joint venture entities, to assist with the build out of a national solar installation network; ownership of the new joint ventures will be 51% Direct Solar America and 49% Standard Eco; if it is required by a state and/or territory that a certain percentage of ownership of an entity is required to be held by a qualifying third-party, both parties shall agree to proportionally dilute by the respective amount of ownership necessary to fulfill that requirement with the understanding that in no case shall Direct Solar America’s ownership interest be dilutable to less than fifty one (51%) percent. Any ownership granted as a requirement for a Qualifying Party shall not have any profit distribution rights and shall be deemed “non voting” with the voting right proportionally distributed based upon the existing memberships ownership interests. Standard Eco shall be allowed to continue operations in all states and territories and shall not be bound to any non-compete language and/or restriction of services.

 

 

 

 

(ii)

All business initiated through the efforts of Direct Solar America shall be designated to run through the new solar installation entity.

 

As of December 31, 2020, no new additional joint ventures entities were established pursuant to the agreement and there were no financial obligations owed to Standard Eco based on certain threshold criteria.

  

NOTE 10 - REVENUE CLASSES AND CONCENTRATIONS

 

Selected financial information for the Company’s operating revenue for disaggregated revenue purposes are as follows:

 

 

 

Year

Ended

December 31,

 

 

Year

Ended

December 31,

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

Revenue by product/service lines:

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

$ 85,428

 

 

$ 158,903

 

Distribution

 

 

138,809

 

 

 

521,013

 

Services

 

 

2,653,924

 

 

 

2,663,917

 

Total

 

$ 2,878,161

 

 

$ 3,343,833

 

 

 

 

 

 

 

 

 

 

Revenue by subsidiary:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Singlepoint (parent company)

 

$ 184,561

 

 

$ 576,499

 

Direct Solar America

 

 

2,653,924

 

 

 

2,031,743

 

DIGS

 

 

39,676

 

 

 

151,381

 

Shield Saver

 

 

-

 

 

 

19,339

 

JAG

 

 

-

 

 

 

564,870

 

Total

 

$ 2,878,161

 

 

$ 3,343,833

 

  

One customer comprised approximately 13% of the Company’s revenue for year ended December 31, 2019. Two customers comprised approximately 35% and 26%, respectively, of the Company's revenue for the year ended December 31, 2020.

 

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NOTE 11 – INCOME TAXES

 

The components of income tax expense for the years ended December 31, 2020 and 2019 consist of the following:

 

 

 

2020

 

 

2019

 

Federal tax statutory rate

 

 

21.0 %

 

 

21.0 %

Permanent differences

 

 

(0.0 )%

 

 

(11.6 )%

Valuation allowance

 

 

21.0 %

 

 

(9.4 )%

Effective rate

 

 

0 %

 

 

0 %

 

Significant components of the Company’s estimated deferred tax assets and liabilities as of December 31, 2020 and 2019 are as follows:

 

 

 

2020

 

 

2019

 

Deferred tax assets:

 

 

 

 

 

 

Net operating loss carryforwards

 

$ 2,024,000

 

 

$ 1,238,000

 

Temporary differences

 

 

457,000

 

 

 

1,334,000

 

 

 

 

 

 

 

 

 

 

Total deferred tax asset

 

 

2,481,000

 

 

 

2,572,000

 

 

 

 

 

 

 

 

 

 

Valuation allowance

 

 

(2,481,000 )

 

 

(2,572,000 )

 

 

 

-

 

 

 

-

 

 

The Company has net operating losses (“NOLs”) as of December 31, 2020 of approximately $9,700,000 for federal tax purposes, which will expire in varying amounts through 2039. The Company may be able to utilize its NOLs to reduce future federal and state income tax liabilities. However, these NOLs are subject to various limitations under Internal Revenue Code ("IRC") Section 382. IRC Section 382 limits the use of NOLs to the extent there has been an ownership change of more than 50 percentage points. In addition, the NOL carry-forwards are subject to examination by the taxing authority and could be adjusted or disallowed due to such exams. Although the Company has not undergone an IRC Section 382 analysis, it is possible that the utilization of the NOLs could be substantially limited. The Company has no tax provision for the years ended December 31,2020 and 2019 due to the net losses and full valuation allowances against net deferred tax assets.

  

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NOTE 12 - SUBSEQUENT EVENTS

 

On January 26, 2021 the Company entered into a purchase agreement to acquire 100% ownership of EnergyWyze, LLC, a limited liability company. The purchase price consideration consists of the following:

 

$75,000.00 with $25,000.00 paid at closing and the remaining balance of $50,000.00 to be in the form of a 180 day Seller Note to be retired in conjunction with any capital raise associated with the intended up listing to a national exchange. The Seller Note would be extendable for a period of 90 days at the Buyer’s option, furthermore the note can be converted at any time by the sellers into Common Stock during the initial 180-day period based on the 10 Day Volume Weighted Average Price (VWAP).

 

$450,000.00 USD in Restricted Common Stock based on the 10 Day VWAP immediately preceding the closing date and each vesting period. Stock awarded will be allocated equally, $150,000.00 USD each, between the principals named in the LOI , and will vest over a three-year period. Each principal member must be employed by the Company on the vesting date to be awarded the equity award. The vesting schedule shall be as follows: $50,000.00 USD shall vest on July 1, 2021. $100,000.00 USD, representing the remaining individual balance, shall be divided into ten equal amounts and will vest on quarterly basis over the next 10 quarters post the initial vesting period of July 1, 2021.

 

On January 27, 2021, the Company entered into a Note Settlement Agreement (“Settlement Agreement”) related to the UAHC and Iliad Notes. Pursuant to the terms of the Settlement Agreement, the Company issued 100,000,000 and 30,000,000 shares of common stock to repay the Iliad Note and the UAHC Note, respectively.As of January 27, 2021, the outstanding balances of Iliad Note and the UAHC Note plus accrued interest were $2,253,666.82 and $681,170, respectively. The Company recorded losses on the debt settlement of $136,333 and $35,830, for the Iliad Note and the UAHC Note, respectively.

 

On January 28, 2021, the Company amended its Articles of Incorporation to designate 1,500 shares of undesignated preferred stock as Class C preferred stock.

 

On January 28, 2021, the Company entered into a purchase agreement with GHS whereby GHS agreed to purchase, in tranches, up to $1,000,000 of Class C preferred stock in exchange for 1,010 shares of Class C preferred stock. GHS purchased the first tranche of 500 shares for $500,000.

  

On February 12, 2021, the Company entered into an agreement to purchase 51% ownership of Box Pure Air, LLC, a Delaware limited liability company. The consideration consisted of an aggregate number of common stock shares equal to $500,000.

 

On February 22, 2021, GHS purchased a second tranche of 250 shares of Class C preferred stock for $250,000.

 

On March 11, 2021, the Company amended its Articles of Incorporation to designate 2,000 shares of undesignated preferred stock as Class D preferred stock.

 

On March 11, 2021, the Company entered into a purchase agreement with GHS whereby GHS agreed to purchase, in tranches, up to $2,000,000 of Class D preferred stock in exchange for 2,000 shares of Class D preferred stock. GHS purchased the first tranche of 500 shares for $500,000. On March 19, 2021, GHS purchased the second tranche of 500 shares of Class D preferred stock for $500,000. On March 26, 2021 GHS purchased the third tranche of 500 shares of Class D preferred stock for $500,000. On April 1, 2021, GHS purchased the fourth tranche of 500 shares of Class D preferred stock for $500,000.

   

On March 22, 2021, we filed a Certificate of Amendment (the “Certificate of Amendment”) with the Secretary of State of the State of Nevada to effect a 1 for 75 reverse stock split. At the effective time of the reverse stock split, every 75 shares of issued and outstanding common stock will be converted into one (1) share of issued and outstanding common stock. The number of authorized shares and the par value per share of the common stock and the number of authorized or issued and outstanding shares of the Company’s preferred stock will remain unchanged.

 

On April 7, 2021 we completed the spin-off of 1606 Corp. whereby each holder of common stock and Class A Preferred Stock of the Company received one share of unregistered and restricted common stock and Class A Preferred Stock of 1606 Corp. for each such share owned of the Company.

 

 
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 

None.

 

Item 9A. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

We have performed an evaluation under the supervision and with the participation of our management, including our President, and our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of our disclosure controls and procedures, (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2020. Based on that evaluation, our management, including our President, and CEO and CFO, concluded that our disclosure controls and procedures were not effective as of December 31, 2020 to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer, as appropriate to allow timely decisions regarding required disclosure due to the material weaknesses described below.

 

Based on our evaluation under the framework described above, our management concluded that we had “material weaknesses” (as such term is defined below) in our control environment and financial reporting process consisting of the following as of the Evaluation Date:

 

 

1)

lack of a functioning audit committee for the entire fiscal year resulting in ineffective oversight in the establishment and monitoring of required internal control and procedures; and

 

2)

inadequate segregation of duties consistent with control objectives

 

A “material weakness” is defined under SEC rules as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.

 

A system of controls, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

 

Management’s Annual Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (b) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of the our management and directors; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

 

Changes in Internal Control over Financial Reporting

  

We have added additional accounting staff and have performed an extensive revenue review and reconciliation at the conclusion of the third quarter for the revenue associated with our primary subsidiary in 2020.  We introduced additional accounting services to the parent company and our subsidiary to augment and improve its revenue recognition procedures and controls.

 

Item 9B. Other Information.

 

None.

 

 
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PART III

 

Item 10. Directors, Executive Officers and Corporate Governance.

 

The names, ages, and positions of the Company’s present executive officers and directors are set forth in the following table (1):

 

Name

 

Age

 

Positions

Gregory P. Lambrecht

 

58

 

Chairman of the Board/Chief Executive Officer (2)

William Ralston

 

31

 

Director/President

Corey Lambrecht

 

51

 

Chief Financial Officer (2)

Eric Lofdahl

 

58

 

Director

_____________

(1) All directors hold office until the next annual meeting of stockholders and until their successors have been duly elected and qualified. On October 29, 2020 Jeffrey Nomura resigned as a member of the Board of Directors and on September 30, 2020 Venugopal Aravamudan resigned as a member of the Board of Directors. Eric Lofdahl served as CTO until December 22, 2020.

(2) Gregory Lambrecht resigned as Chief Financial Officer of the Company on January 16, 2020. Corey Lambrecht was named Chief Financial Officer of the Company on January 16, 2020.

  

There are no agreements with respect to electing directors. Except as set forth below, none of the directors held any directorships during the past five years in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of such act, or of any company registered as an investment company under the Investment Company Act of 1940. The Board of Directors has not adopted a Code of Ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

 

Director and Officer Biographical Information

 

Gregory P. Lambrecht – Chairman of the Board/Chief Executive Officer

 

As CEO and founder of the Company in 2006, Greg leads the Company in its mission. He oversees all company operations including investor relations, the leadership of the Board of Directors, and daily business activities. Greg has a successful track record of founding and leading start-up companies. Greg is a graduate of Western Washington University with a degree in Marketing and Communications.

 

William (‘Wil’) Ralston – Director/President

 

Wil Ralston became President of the Company in August 2017. Prior to this he was a vice president of sales for the Company from 2013 to 2015. From 2015 to 2017 he was a market developer for Porch.com. Wil graduated cum laude from the WP Carey School of Business at Arizona State University with a degree in Global Agribusiness.

 

Corey Lambrecht – Chief Financial Officer

 

Corey Lambrecht became Chief Financial Officer of the Company on January 17, 2020. Corey Lambrecht is the nephew of Gregory P. Lambrecht (the Company’s Chief Executive Officer and a member of the Company’s Board of Directors). Corey Lambrecht is a 20+ year public company executive with broad experience in strategic acquisitions, corporate turnarounds, new business development, pioneering consumer products, corporate licensing, interactive technology services in addition to holding public company executive roles with responsibilities including day-to-day business operations, management, raising capital, board communication and investor relations. He is a Certified Director from the UCLA Anderson Graduate School of Management accredited Directors program. Since 2007 he has been a Director of CUI Global, Inc. (NASDAQ: CUI) and has served multiple terms on the Audit Committee and currently serves as the Compensation Committee Chairman. Corey Lambrecht served on the Board of ORHub, Inc. (OTC: ORHB) from July 2016 through December 2019. He previously served as a Board Member for Lifestyle Wireless, Inc. which, in 2012 merged into the Company. In December 2011 he joined the Board of Guardian 8 Holdings, a leading non-lethal security product company, serving until early 2016. He most recently served as the President and Chief Operating Officer at Earth911 Inc., a subsidiary of Infinity Resources Holdings Company (OTC: IRHC) from January 2010 to July 2013.

 

 
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Eric Lofdahl – Director

 

Eric Lofdahl joined the Company in 2013. He has over 30 years’ experience in the technology sector, including positions in software development, program management, complex system integration, and engineering process definition. Eric began his career at the Boeing Company, where he led a team that successfully developed advanced wireless and satellite data products based on commercial technology for the U.S. Air Force. Since 2007, Eric has been the owner of the Lofdahl Group (technology consulting company) and the owner of Text2Bid (mobile auction platform). Eric holds a Bachelor of Science degree in electrical engineering from Iowa State University.

 

Involvement in Certain Legal Proceedings

 

To the best of our knowledge, none of our directors or executive officers has, during the past ten years:

 

(1) had a petition under the Federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

 

(2) has been convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

(3) has been the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:

 

(i) Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

 

(ii) Engaging in any type of business practice; or

 

(iii) Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

 

(4) has been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in (3)(i) above, or to be associated with persons engaged in any such activity;

 

(5) has been found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

 

(6) has been found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

 

 
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(7) has been the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

 

(i) Any Federal or State securities or commodities law or regulation; or

 

(ii) Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

 

(iii) Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

 

(8) has been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Section 16(a) of the Exchange Act requires our directors and officers, and the persons who beneficially own more than ten percent of our common stock, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Copies of all filed reports are required to be furnished to us pursuant to Rule 16a-3 promulgated under the Exchange Act. Based solely on the reports received by us and on the representations of the reporting persons, we believe that these persons have complied with all applicable filing requirements during the fiscal year ended December 31, 2020, with the exception of the following reports.

 

Reporting Person

 

Form Type

 

Gregory P. Lambrecht

 

 

3

 

William Ralston

 

 

4

 

Eric Lofdahl

 

 

3

 

 

ITEM 11. EXECUTIVE COMPENSATION.

 

The following table sets forth the compensation paid to our Chief Executive Officer, Chief Financial Officer and those executive officers that earned in excess of $120,000 during the last two fiscal years ended December 31, 2020 and 2019 (collectively, the “Named Executive Officers”):

 

 
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Table of Contents

 

Summary Compensation Table

 

Name and Principal Position

 

Year

 

Salary ($)

 

 

Bonus ($)

 

 

Stock

Awards ($)

 

 

Option

Awards ($)

 

 

Non-Equity Incentive Plan Compensation ($)

 

 

Non-Qualified Deferred Compensation Earnings ($)

 

 

All Other Compensation ($)

 

 

Total ($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gregory P. Lambrecht,

 

2020

 

$ 220,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

$ 220,000

 

CEO, Director

 

2019

 

 

220,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

William Ralston,

President, Director

 

2020

 

$ 100,000

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$ 100,000

 

 

 

2019

 

 

100,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eric Lofdahl,

Director

 

2020

2019

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corey Lambrecht CFO

 

2020

 

$ 80,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$ 80,000

 

 

The table does not include an aggregate of 7,400,000 shares of Class A Convertible Preferred Stock issued in 2020 for serving the Company.

 

Employment Agreements

 

Except for the following agreements, the Company does not have any written agreements with any of its executive officers. The following discussion is a summary of the material terms of the employment agreements and is subject to the full copy of the respective employment agreement (all capitalized terms not otherwise defined herein are defined in the respective employment agreement):

 

In May 2018 the Company entered into an employment agreement with Mr. Lambrecht. The agreement provided that Mr. Lambrecht would serve as CEO and CFO of the Company for a term of three years at an annual salary of Two Hundred Twenty Thousand Dollars ($220,000), and an incentive bonus as determined by the board of directors. In addition, during the term the Company shall provide: an automobile allowance of Five Hundred Dollars ($500) Dollars per month, and health care reimbursement of One Thousand Dollars ($1,000) per month. The agreement shall automatically be renewed for additional three-year periods unless either party has provided written termination of this Agreement at least 90 days prior to the expiration of such Term (as defined in the agreement. If employment is terminated as a result of his death or Disability (as defined in the agreement), the Company shall pay, his Base Salary (as defined in the agreement) and any accrued but unpaid Bonus (as defined in the agreement) and expense reimbursement amounts through the date of his Death or Disability and a lump sum payment equal to two years of Base Salary (at the time his Death or Disability occurs) within 30 days of his Death or Disability. In the event the Company does not have the cash flow to pay such amount within 30 days as set forth above, the Company may make such payments over 12 equal monthly installments. If employment is terminated by the Board of Directors of the Company for Cause (as defined in the agreement), then the Company shall pay his Base Salary through the date of his termination and there shall be no further entitlement to any other compensation or benefits from the Company. If employment is terminated by the Company (or its successor) upon the occurrence of a Change of Control (as defined in the agreement) or within six (6) months thereafter, the Company (or its successor, as applicable) shall (i) continue to pay to his Base Salary for a period of thirty six (36) months following such termination, (ii) pay any accrued and any earned but unpaid Bonus, (iv) pay the Executive the Bonus he would have earned had he remained with the Company for six (6) months from the date which such termination occurs, (iv) pay expense reimbursement amounts through the date of termination. While the Company does not currently have a stock option plan, if one is created in the future and options are granted to Mr. Lambrecht, all such Stock Options that have not vested as of the date of such termination shall be accelerated and deemed to have vested as of such termination date and shall remain exercisable for a period as outlined in the Company’s Stock Option program, and (v) Mr. Lambrecht shall be entitled to receive equivalent share issuances as any executive officer, management or director of the Company receives for a period of 36 months thereafter. If employment is terminated by Mr. Lambrecht for Good Reason (as defined in the agreement), or if this Agreement is not renewed, then the Company shall (i) pay a single lump sum cash payment within five business days of such termination equal to 18 times the then monthly Base Salary in effect regardless of when such termination occurs (provided, that in the event the Company does not have the cash flow to pay such amount within five business days as set forth above, the Company may make such payments over 12 equal monthly installments), and (ii) pay Executive the Bonus he would have earned had he remained with the Company for six (6) months from the date which such termination occurs, and (iii) pay Executive any expense reimbursement amounts owed, and payment for any unused vacation days, through the date of termination. All Stock Options that are scheduled to vest in the contract year of the date of such termination shall be accelerated and deemed to have vested as of the termination date. All Stock Options that have not vested (or deemed to have vested pursuant to the preceding sentence) shall be deemed expired, null and void. Any Stock Options that have vested as of the date of termination shall remain exercisable for a period as outlined in the Company’s Stock Option program.

 

 
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In May 2018 the Company entered into an employment agreement with Mr. Ralston. The agreement provided that Mr. Ralston would serve as President of the Company for a term of three years at an annual salary of One Hundred Thousand Dollars ($100,000), and an incentive bonus as determined by the board of directors. In addition, during the term the Company shall provide: an automobile allowance of Five Hundred Dollars ($500) Dollars per month, and health care reimbursement of One Thousand Dollars ($1,000) per month. The agreement shall automatically be renewed for additional three-year periods unless either party has provided written termination of this Agreement at least 90 days prior to the expiration of such Term (as defined in the agreement. If employment is terminated as a result of his death or Disability (as defined in the agreement), the Company shall pay, his Base Salary (as defined in the agreement) and any accrued but unpaid Bonus (as defined in the agreement) and expense reimbursement amounts through the date of his Death or Disability and a lump sum payment equal to two years of Base Salary (at the time his Death or Disability occurs) within 30 days of his Death or Disability. In the event the Company does not have the cash flow to pay such amount within 30 days as set forth above, the Company may make such payments over 12 equal monthly installments. If employment is terminated by the Board of Directors of the Company for Cause (as defined in the agreement), then the Company shall pay his Base Salary through the date of his termination and there shall be no further entitlement to any other compensation or benefits from the Company. If employment is terminated by the Company (or its successor) upon the occurrence of a Change of Control (as defined in the agreement) or within six (6) months thereafter, the Company (or its successor, as applicable) shall (i) continue to pay to his Base Salary for a period of thirty six (36) months following such termination, (ii) pay any accrued and any earned but unpaid Bonus, (iv) pay the Executive the Bonus he would have earned had he remained with the Company for six (6) months from the date which such termination occurs, (iv) pay expense reimbursement amounts through the date of termination. While the Company does not currently have a stock option plan, if one is created in the future and granted to Mr. Ralston, all such Stock Options that have not vested as of the date of such termination shall be accelerated and deemed to have vested as of such termination date and shall remain exercisable for a period as outlined in the Company’s Stock Option program, and (v) Mr. Ralston shall be entitled to receive equivalent share issuances as any executive officer, management or director of the Company receives for a period of 36 months thereafter. If employment is terminated by Mr. Ralston for Good Reason (as defined in the agreement), or if this Agreement is not renewed, then the Company shall (i) pay a single lump sum cash payment within five business days of such termination equal to 18 times the then monthly Base Salary in effect regardless of when such termination occurs (provided, that in the event the Company does not have the cash flow to pay such amount within five business days as set forth above, the Company may make such payments over 12 equal monthly installments), and (ii) pay Executive the Bonus he would have earned had he remained with the Company for six (6) months from the date which such termination occurs, and (iii) pay Executive any expense reimbursement amounts owed, and payment for any unused vacation days, through the date of termination. All Stock Options that are scheduled to vest in the contract year of the date of such termination shall be accelerated and deemed to have vested as of the termination date. All Stock Options that have not vested (or deemed to have vested pursuant to the preceding sentence) shall be deemed expired, null and void. Any Stock Options that have vested as of the date of termination shall remain exercisable for a period as outlined in the Company’s Stock Option program.

 

On May 14, 2019 Singlepoint Direct Solar, entered into an employment agreement with Pablo Diaz, to serve as Chief Executive Officer of Singlepoint Direct Solar. The agreement provided for a two year term at an annual salary of One Hundred Twenty-Five Thousand Dollars ($125,000) per year (the “Base Salary”). If Mr. Diaz’s employment is terminated as a result of his death or Disability, Singlepoint Direct Solar shall pay, the Base Salary and any accrued but unpaid Bonus and expense reimbursement amounts through the date of his Death or Disability and a lump sum payment equal to $75,000 (at the time his Death or Disability occurs) within 30 days of his Death or Disability. In the event Singlepoint Direct Solar does not have the cash flow to pay such amount within 30 days as set forth above, Singlepoint Direct Solar may make such payments over 12 equal monthly installments. If employment is terminated for Cause, then Singlepoint Direct Solar shall pay the Base Salary through the date of termination. If employment is terminated by Singlepoint Direct Solar upon the occurrence of a Change of Control or within six (6) months thereafter, Singlepoint Direct Solar shall (i) continue to pay the Base Salary for a period of six (6) months following such termination, (ii) pay any accrued and any earned but unpaid Bonus, (iv) pay the Bonus he would have earned had he remained with Singlepoint Direct Solar for six (6) months from the date which such termination occurs, and (iv) pay expense reimbursement amounts through the date of termination. In the event this agreement is terminated for Cause by Singlepoint Direct Solar, or Mr. Diaz resigns for no reason, Mr. Diaz waives all rights to distributions as a Member of Singlepoint Direct Solar (as set forth in the Operating Agreement of Singlepoint Direct Solar) for the sooner of two (2) years or until the Company receives two million dollars ($2,000,000) in distributions from Singlepoint Direct Solar. After the sooner of two (2) years or until the Company receives two million dollars ($2,000,000) in distributions from Singlepoint Direct Solar Mr. Diaz shall be entitled to his proportion of the Company’s distributions.

 

 
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On January 17, 2020 the Company entered into an employment agreement with Corey Lambrecht to serve as the Chief Financial Officer. The term is for a period of one year; salary is Eighty Thousand Dollars ($80,000.00) per year; if employment is terminated as a result of his death or Disability, the Company shall pay the Base Salary and any accrued but unpaid Bonus and expense reimbursement amounts through the date of his Death or Disability and a lump sum payment equal to $40,000 (at the time his Death or Disability occurs) within 30 days of his Death or Disability; If employment is terminated by the Board for Cause, then the Company shall pay the Base Salary and Bonus earned through the date of his termination; If employment is terminated by the upon the occurrence of a Change of Control or within six (6) months thereafter, the Company (or its successor, as applicable) shall (i) continue to pay to the Base Salary for a period of six (6) months following such termination, (ii) pay any accrued and any earned but unpaid Bonus, (iii) pay the Bonus he would have earned had he remained with the Company for six (6) months from the date which such termination occurs, and (iv) pay expense reimbursement amounts through the date of termination.

 

Overview of Compensation Program

 

We currently do not maintain a Compensation Committee of the Board of Directors. Until a formal committee is established, our entire Board of Directors has responsibility for establishing, implementing and continually monitoring adherence with the Company’s compensation philosophy. The Board of Directors ensures that the total compensation paid to the executives is fair, reasonable, and competitive.

 

Compensation Philosophy and Objectives

 

The Board of Directors believes that the most effective executive compensation program is one that is designed to reward the achievement of specific annual, long-term and strategic goals by the Company and that aligns executives’ interests with those of the stockholders by rewarding performance above established goals, with the ultimate objective of improving stockholder value. As a result of the size of the Company, the Board evaluates both performance and compensation on an informal basis. Upon hiring additional executives, the Board intends to establish a Compensation Committee to evaluate both performance and compensation to ensure that the Company maintains its ability to attract and retain superior employees in key positions and that compensation provided to key employees remains competitive.

 

Role of Executive Officers in Compensation Decisions

 

The Board of Directors makes all compensation decisions for, and approves recommendations regarding equity awards to, the executive officers and directors of the Company.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

The following tables set forth, as of December 31, 2020, certain information concerning the beneficial ownership of our capital stock, including our common stock, and Class A Convertible Preferred Stock, by:

 

 

each stockholder known by us to own beneficially 5% or more of any class of our outstanding stock;

 

each director;

 

each named executive officer;

 

all of our executive officers and directors as a group; and

 

each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of any class of our outstanding stock.

 

 
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We currently have authorized 5,000,000,000 shares of common stock and 100,000,000 shares of preferred stock, of which 60,000,000 shares are designated as Class A Convertible Preferred Stock, 1,500 shares are designated as Class B Convertible Preferred Stock, 1,500 shares are designated as Class C Convertible Preferred Stock, 2,000 shares are designated as Class D Convertible Preferred Stock, and 39,995,000 shares of preferred stock remain undesignated. There were 2,479,976,812 shares of common stock, 60,000,000 shares of Class A Convertible Preferred Stock and 408 shares of Class B Convertible Preferred Stock outstanding as of December 31, 2020. Each share of Class A Convertible Preferred Stock is convertible at any time into 25 shares of common stock, totaling 1,500,000,000 shares of common stock assuming full conversion of all outstanding shares. Each share of Class A Convertible Preferred Stock votes with the shares of Common Stock and is entitled to 50 votes per share. Each share of Class B Convertible Preferred Stock is convertible at any time into shares of common stock by dividing the Stated Value ($1,200) by $0.00244, totaling 200,655,733 shares of common stock assuming full conversion of all outstanding shares.  The Class C and Class D Convertible Preferred Stock are not included in the table as they were created after December 31, 2020.

 

Beneficial ownership is determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to our common stock. Shares of our common stock subject to options that are currently exercisable or exercisable within 60 days of December 31, 2020 are considered outstanding and beneficially owned by the person holding the options for the purpose of calculating the percentage ownership of that person but not for the purpose of calculating the percentage ownership of any other person. Except as otherwise noted, we believe the persons and entities in this table have sole voting and investing power with respect to all of the shares of our common stock beneficially owned by them, subject to community property laws, where applicable.

 

Security Ownership of Certain Beneficial Owners

 

Title of Class

 

Name and Address of Beneficial Owner

 

Amount and nature of beneficial ownership

 

 

Percent of

Class

 

Class A Convertible Preferred Stock

 

Govindan Gowrishankar (1)

 

 

3,000,000

 

 

 

5 %

___________

(1) Mr. Gowrishankar served on the Board of Directors of the Company from December 2011 until May 2017.

 

Security Ownership of Management**

 

Title of Class

 

Name and Address of Beneficial Owner (1)

 

Amount and nature of beneficial ownership

 

 

Percent of

Class

 

Common Stock

 

Gregory P. Lambrecht

 

 

7,565,864

 

 

 

0.3 %

 

 

Eric Lofdahl

 

 

15,286,498

 

 

 

0.616 %

 

 

Wil Ralston

 

 

21,969,300

 

 

 

0.886 %

 

 

Corey Lambrecht

 

 

25,050,000

 

 

 

1.01 %

 

 

 

 

 

 

 

 

 

 

 

 

 

Executive Officers and Directors as a Group

 

 

69,871,662

 

 

 

.028 %

 

 

 

 

 

 

 

 

 

 

 

Class A Convertible Preferred Stock

 

Gregory P. Lambrecht

 

 

31,230,000

 

 

 

52.9 %

 

 

Eric Lofdahl (2)

 

 

10,785,000

 

 

 

18.2 %

 

 

Corey Lambrecht

 

 

2,175,000

 

 

 

3.6 %

 

 

Wil Ralston

 

 

9,375,000

 

 

 

15.9 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Executive Officers and Directors as a Group

 

 

53,565,000

 

 

 

89 %

________

* Less than 1%.

** Does not include the holdings of former directors Venugopal Aravamudan and Jeffrey Nomura. All figures have been calculated pre reverse split.

 

(1) The address for the above individuals is c/o Singlepoint Inc. 2999 N. 44th St. Suite 530 Phoenix, Arizona 85018.

(2) Includes 10,350,000 shares of Class A Preferred Stock held in an entity controlled by Mr. Lofdahl.

 

 
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Stock Option Plan and other Employee Benefits Plans

 

On December 5, 2019, the Board of Directors approved the creation of the Singlepoint Inc. 2019 Equity Incentive Plan (the “Plan”), which the holders of a majority of the outstanding shares of common stock approved on December 18, 2019. No awards have been made under the Plan.

 

Summary Description

 

The following description is intended to be a summary of the material provisions of the Plan. It does not purport to be a complete description of all the provisions of the Plan and is qualified in its entirety by reference to the complete text of the Plan. Capitalized terms used in the following summary and not otherwise defined in this Information Statement have the meanings set forth in the Plan.

 

Purpose and Eligible Participants. The purpose of the Plan is to promote the success of the Company and to increase stockholder value by providing an additional means through the grant of awards to attract, motivate, retain and reward selected employees and other eligible persons. The Administrator may grant awards under the Plan only to those persons that the Administrator determines to be Eligible Persons An “Eligible Person” is any person who is either: (a) an officer (whether or not a director) or employee of the Company or one of its Subsidiaries; (b) a director of the Company or one of its Subsidiaries; or (c) an individual consultant who renders bona fide services (other than services in connection with the offering or sale of securities of the Company or one of its Subsidiaries in a capital-raising transaction or as a market maker or promoter of securities of the Company or one of its Subsidiaries) to the Company or one of its Subsidiaries and who is selected to participate in this Plan by the Administrator; provided, however, that a person who is otherwise an Eligible Person under clause (c) above may participate in this Plan only if such participation would not adversely affect either the Company’s eligibility to use Form S-8 to register under the Securities Act of 1933, as amended (the “Securities Act”), the offering and sale of shares issuable under this Plan by the Company, or the Company’s compliance with any other applicable laws.

 

Types of Awards. The Administrator shall determine the type or types of award(s) to be made to each selected Eligible Person. Awards may be granted singly, in combination or in tandem. Awards also may be made in combination or in tandem with, in replacement of, as alternatives to, or as the payment form for grants or rights under any other employee or compensation plan of the Company or one of its Subsidiaries. The types of awards that may be granted under this Plan are:

 

Stock Options. A stock option is the grant of a right to purchase a specified number of shares of Common Stock during a specified period as determined by the Administrator. An option may be intended as an incentive stock option within the meaning of Section 422 of the Code (an “ISO”) or a nonqualified stock option (an option not intended to be an ISO). The award agreement for an option will indicate if the option is intended as an ISO; otherwise it will be deemed to be a nonqualified stock option. The maximum term of each option (ISO or nonqualified) shall be ten (10) years. The per share exercise price for each option shall be not less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of the option. When an option is exercised, the exercise price for the shares to be purchased shall be paid in full in cash or such other method permitted by the Administrator

 

Stock Appreciation Rights. A stock appreciation right or “SAR” is a right to receive a payment, in cash and/or Common Stock, equal to the number of shares of Common Stock being exercised multiplied by the excess of (i) the Fair Market Value of a share of Common Stock on the date the SAR is exercised, over (ii) the Fair Market Value of a share of Common Stock on the date the SAR was granted as specified in the applicable award agreement. The maximum term of a SAR shall be ten (10) years.

 

Restricted Shares. Restricted shares are shares of Common Stock subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Administrator may impose, which restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of performance goals and/or future service requirements), in such installments or otherwise, as the Administrator may determine at the date of grant or thereafter. Except to the extent restricted under the terms of this Plan and the applicable award agreement relating to the restricted stock, a participant granted restricted stock shall have all of the rights of a stockholder, including the right to vote the restricted stock and the right to receive dividends thereon (subject to any mandatory reinvestment or other requirement imposed by the Administrator).

 

 
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Restricted Share Units.

 

(a) Grant of Restricted Share Units. A restricted share unit, or “RSU”, represents the right to receive from the Corporation on the respective scheduled vesting or payment date for such RSU, one share of Common Stock. An award of RSUs may be subject to the attainment of specified performance goals or targets, forfeitability provisions and such other terms and conditions as the Administrator may determine, subject to the provisions of this Plan. At the time an award of RSUs is made, the Administrator shall establish a period of time during which the restricted share units shall vest and the timing for settlement of the RSU.

 

(b) Dividend Equivalent Accounts. Subject to the terms and conditions of the Plan and the applicable award agreement, as well as any procedures established by the Administrator, prior to the expiration of the applicable vesting period of an RSU, the Administrator may determine to pay dividend equivalent rights with respect to RSUs, in which case, the Corporation shall establish an account for the participant and reflect in that account any securities, cash or other property comprising any dividend or property distribution with respect to the shares of Common Stock underlying each RSU. Each amount or other property credited to any such account shall be subject to the same vesting conditions as the RSU to which it relates. The participant shall have the right to be paid the amounts or other property credited to such account upon vesting of the subject RSU.

 

(c) Rights as a Stockholder. Subject to the restrictions imposed under the terms and conditions of this Plan and the applicable award agreement, each participant receiving RSUs shall have no rights as a stockholder with respect to such RSUs until such time as shares of Common Stock are issued to the participant. No shares of Common Stock shall be issued at the time a RSU is granted, and the Company will not be required to set aside a fund for the payment of any such award. Except as otherwise provided in the applicable award agreement, shares of Common Stock issuable under an RSU shall be treated as issued on the first date that the holder of the RSU is no longer subject to a substantial risk of forfeiture as determined for purposes of Section 409A of the Code, and the holder shall be the owner of such shares of Common Stock on such date. An award agreement may provide that issuance of shares of Common Stock under an RSU may be deferred beyond the first date that the RSU is no longer subject to a substantial risk of forfeiture, provided that such deferral is structured in a manner that is intended to comply with the requirements of Section 409A of the Code.

 

Section 162(m) Performance-Based Awards. Without limiting the generality of the foregoing, any of the types of awards listed in Sections 5.1.4 through 5.1.7 above may be, and options and SARs granted with an exercise or base price not less than the Fair Market Value of a share of Common Stock at the date of grant (“Qualifying Options” and “Qualifying SARs,” respectively) typically will be, granted as awards intended to satisfy the requirements for “performance-based compensation” within the meaning of Section 162(m) of the Code. The grant, vesting, exercisability or payment of Performance-Based Awards may depend (or, in the case of Qualifying Options or Qualifying SARs, may also depend) on the degree of achievement of one or more performance goals relative to a pre-established targeted level or levels using the Business Criteria provided for below for the Corporation on a consolidated basis or for one or more of the Corporation’s Subsidiaries, segments, divisions or business units, or any combination of the foregoing. Such criteria may be evaluated on an absolute basis or relative to prior periods, industry peers or stock market indices.

 

Number of Shares. Subject to adjustment as provided in the Plan, 100,000,000 shares of Common Stock are available for issuance in connection with awards granted under the Plan.

 

AdministrationThis Plan shall be administered by and all awards under this Plan shall be authorized by the Administrator. The “Administrator” means the Board or one or more committees appointed by the Board or another committee or individual (within its delegated authority) to administer all or certain aspects of this Plan. Any such committee shall be comprised solely of one or more directors or such number of directors as may be required under applicable law.

 

Effective Date and Termination. This Plan was approved by the Board and became effective on December 5, 2019. Unless earlier terminated by the Board, this Plan shall terminate at the close of business on December 5, 2029. After the termination of this Plan either upon such stated expiration date or its earlier termination by the Board, no additional awards may be granted under this Plan, but previously granted awards (and the authority of the Administrator with respect thereto, including the authority to amend such awards) shall remain outstanding in accordance with their applicable terms and conditions and the terms and conditions of this Plan.

 

 
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Item 13. Certain Relationships and Related Transactions, and Director Independence.

 

Transactions with Related Persons

 

During the year ended December 31, 2020, the Board of Directors reviews and approves transactions with related persons, if the related person is a member of the Board of Directors, such person abstains from the voting on the approval of such transaction.

 

Advances from Officer

 

Mr. Lambrecht advanced the Company funds during 2020 and 2019, with a balance due of $911,826 and $735,000 respectfully, plus accrued interest of $216,807 and $96,273 as of December 31, 2020 and 2019, respectively. These balances accrue interest at 12% beginning October 1, 2018, are unsecured and due on demand. 

 

Stock Issuances to Officers and Directors

 

On October 9, 2020 the Company issued the following shares of Class A Convertible Preferred Stock to ifs officers and directors:

 

Greg Lambrecht

 

 

2,180,000

 

Wil Ralston

 

 

2,175,000

 

Corey Lambrecht

 

 

2,175,000

 

Eric Lofdahl

 

 

435,000

 

Jeff Nomura

 

 

435,000

 

 

 

 

 

 

 

 

 

7,400,000

 

  

Promoters and Certain Control Persons

 

None.

  

Item 14. Principal Accounting Fees and Services.

 

Principal Accounting Fees & Services

 

2020

 

 

2019

 

Audit Fees

 

$ 47,780

 

 

$ 65,667

 

Audit Related Fees

 

 

 -

 

 

 

-

 

Tax Fees

 

 

 -

 

 

 

-

 

All Other Fees

 

 

 -

 

 

 

-

 

Total Fees

 

$ 47,780

 

 

$ 65,667

 

 

 
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Audit Fees

 

These amounts consisted of the aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the Company’s annual financial statements and review of financial statements included in the Company’s Form 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.

 

Audit-Related Fees

 

These amounts consisted of the aggregate fees billed for each of the last two fiscal years for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees.” These fees were for professional services incurred in connection with accounting consultations and consultation regarding financial accounting and reporting standards.

 

Tax Fees

 

These amounts consisted of the aggregate fees billed for each of the last two fiscal years for tax services including tax compliance and the preparation of tax returns and tax consultation services. There were no such services by our principal accountant in 2020 or 2019.

 

All Other Fees

 

These amounts consisted of the aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported above. There were no such services by our principal accountant in 2020 or 2019.

 

PART IV

 

Item 15. Exhibits and Financial Schedules

 

(a)(1) Index to Consolidated Financial Statements

 

The Financial Statements listed in the Index to Consolidated Financial Statements are filed as part of this Annual Report on Form 10-K. See Part II, Item 8, “Financial Statement and Supplementary Data.”

 

(a)(2) Financial Statement Schedules

 

Other financial statement schedules for the years ended December 31, 2020 and 2018 have been omitted since they are either not required, not applicable, or the information is otherwise included in the consolidated financial statements or the notes to consolidated financial statements.

 

(a)(3) Exhibits

 

The Exhibits listed in the accompanying Exhibit Index are attached and incorporated herein by reference and filed as part of this report.

 

Item 16. Form 10–K Summary

 

                None.

 

 
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SIGNATURES

 

Pursuant to the requirements of Securities 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

SINGLEPOINT INC.

 

Dated: April 15, 2021

By:

/s/ Gregory P. Lambrecht

Gregory P. Lambrecht

CEO/Director

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Signature

Title

Date

 

/s/ Gregory P. Lambrecht

Chief Executive Officer, and Chairman of the Board (Principal Executive Officer)

April 15, 2021

Gregory P. Lambrecht

 

/s/ William Ralston

 

President, Director

 

April 15, 2021

William Ralston

 

/s/ Corey Lambrecht

 

Chief Financial Officer

 

April 15, 2021

Corey Lambrecht

 

 

 

 

 

/s/ Eric Lofdahl

 

Director

April 15, 2021

Eric Lofdahl

 

 

30

Table of Contents

  

EXHIBIT INDEX

 

EXHIBIT NO.

DOCUMENT

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act.

 

31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act.

 

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

101.INS

XBRL Instance Document.

 

101.SCH

XBRL Taxonomy Extension Scheme Document.

 

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document.

 

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.

 

101.LAB

XBRL Taxonomy Extension Label Linkbase Document.

 

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document.

 

 
31