Global Fiber Technologies, Inc. - FORM 10-K

Attached files

file	filename
EX-32.2 - CERTIFICATION - Global Fiber Technologies, Inc.	gftx_ex322.htm
EX-32.1 - CERTIFICATION - Global Fiber Technologies, Inc.	gftx_ex321.htm
EX-31.2 - CERTIFICATION - Global Fiber Technologies, Inc.	gftx_ex312.htm
EX-31.1 - CERTIFICATION - Global Fiber Technologies, Inc.	gftx_ex311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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, 2019

☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from [ ] to [ ]

Commission file number 000-52047

GLOBAL FIBER TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Nevada

11-3746201

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

50 Division Street Somerset NJ		08873
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (732) 695-4389

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

Title of Each Class		Name of Each Exchange On Which Registered
N/A		N/A

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

Common Stock, $0.001 par value

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 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 last 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-K (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐ No ☒

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

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

The aggregate market value of Common Stock held by non-affiliates of the Registrant on June 30, 2019, was $3,604,533 based on a $0.20 average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter (there was no bid or ask price of our common shares during this quarter).

Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.

1,251,239,584 common shares as of April 8, 2021

DOCUMENTS INCORPORATED BY REFERENCE

None.

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Item 1.	Business	3
Item 1B.	Unresolved Staff Comments	6
Item 2.	Properties	6
Item 3.	Legal Proceedings	6
Item 4.	Mine Safety Disclosures	6
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	6
Item 6.	Selected Financial Data	7
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	12
Item 8.	Financial Statements and Supplementary Data	13
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	38
Item 9A.	Controls and Procedures	38
Item 9B.	Other Information	39
Item 10.	Directors, Executive Officers and Corporate Governance	40
Item 11.	Executive Compensation	44
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	45
Item 13.	Certain Relationships and Related Transactions, and Director Independence	46
Item 14.	Principal Accounting Fees and Services	46
Item 15.	Exhibits, Financial Statement Schedules	47

PART I

Item 1. Business

Forward Looking Statements

This annual report on Form 10-K and the documents incorporated by reference herein contain forward-looking statements that are not statements of historical fact and may involve a number of risks and uncertainties. These statements related to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future prospects, developments and business strategies.

We have used the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “will,” “plan,” “predict,” “project” and similar terms and phrases, including references to assumptions, in this annual report on Form 10-K and our incorporated documents to identify forward-looking statements. These forward-looking statement are made based on expectations and beliefs concerning future events affecting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed in or implied by these forward-looking statements. The following factors are among those that may cause actual results to differ materially from our forward-looking statements:

	·	General economic and industry conditions;
	·	Out history of losses, deficits and negative operating cash flows;
	·	Our limited operating history;
	·	Industry competition;
	·	Environmental and governmental regulation;
	·	Protection and defense of our intellectual property rights;
	·	Reliance on, and the ability to attract, key personnel;
	·	Other factors including those discussed in “Risk Factors” in this annual report on Form 10-K and our incorporated documents.

You should keep in mind that any forward-looking statement made by us in this annual report or elsewhere speaks only as of the date on which we make it. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this annual report after the date of filing, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this annual report or elsewhere might not occur.

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In this annual report on Form 10-K, the terms “ECTX,” “Company,” “we,” “us” and “our” refer to Eco Tek 360, Inc. and its subsidiaries.

General Overview

Global Fiber Technologies, Inc. was incorporated in Nevada on March 25, 2005 as “Premier Publishing Group, Inc.”. Originally formed as a publishing company, the Company ceased its publishing operations in or around 2007.

After ceasing the publishing operations, the Company’s operations consisted solely of utilizing the expertise of our Board Members and outside agents to further the efforts our advisory services business plan through a wholly-owned subsidiary known as Trident Merchant Group, Inc.

In addition, during the fourth quarter of 2013, the Company became involved in the manufacturing and global distribution of ladies’ apparel. During the second quarter, 2014 the Company formed Leading Edge Fashions, LLC of which it controlled 51% of the membership interest. Effective December 31, 2014 the Company's Board of Directors determined it was in the best interest of the Company to discontinue the operations of Leading Edge Fashions, LLC, and in 2014 the Company stopped developing a footprint in the apparel business due to cash restraints and logistics and ceased agreements with all third-parties to distribute their products into SE Asia and China.

Trident has also ceased operations to concentrate on the opportunities related to rejuvenating fibers and re-purposing them into finished products.

The Company created a new limited liability company, Pure361, LLC ("Pure361") in May 2015 for the purpose of operating the portion of the Company's business that is involved with the collection, rejuvenation and manufacturing of garments and other accessories for the uniform marketplace that serves the hospitality, food service, medical, manufacturing, education, military, transportation and other commercial uniform industries. The Company owns 51% of Pure361. Pure361 entered into a license agreement with Pure System International Ltd. ("Pure"), the minority owner of Pure 361, related to potential future operations in which Pure361 was granted the exclusive license to use certain licensed intellectual property related to the manufacturing of uniforms from recyclable waste. Pure361 has had no operations to date, nor did it have any assets or liabilities as of December 31, 2019 and 2018 respectively.

The Company created a new subsidiary, ECO CHAIN 360, Inc. in November 2018 for the purpose of operating as an intermediary providing an expedited trading platform for buyers and sellers to efficiently consummate fiber transactions. The Company owns 51% of ECO CHAIN 360, Inc. ECO CHAIN 360, Inc. has had no operations to date nor did it have assets or liabilities as of December 31, 2019 and 2018, respectively.

On June 18, 2019, the Company completed its acquisition of assets from AH Originals, Inc. (“AHO”), a corporation controlled by the same owner group of Global Fiber Technologies, Inc., for the consideration of 6,400,000 shares of common stock of the Company to be issued and the issuance of a promissory note of $447,150 that bears 3% interest per annum and have a one year term with eight options to extend the maturity date for three-month periods. In addition, the Company issued to AHO 200,000 common shares of Authentic Heroes, Inc. (“AHI”), a subsidiary created by the Company, to hold the purchased assets. AHI has commenced minimal operations as of December 31, 2019.

Our address is 50 Division Street Suite 500, Somerset NJ 08873. Our corporate website is http://globalfibertechnologies.com/.

We have never declared bankruptcy or been in receivership. We have earned minimal revenues and have limited cash on hand. We have sustained losses since inception and have primarily relied upon the sale of our securities and loans from related parties for funding.

Our Current Business

Global Fiber Technologies, Inc. comprised of three separate operating subsidiaries which are driving fiber industry innovation through technologies related to fiber rejuvenation, authentication and distribution. The Company’s business plan is to operate a fiber rejuvenation technology company. It plans on offering branded fabrics, apparel and uniforms to the corporate, hotel, hospital and military markets. We will achieve this by utilizing a patented and proprietary process for rejuvenating textile waste into high quality fabrics and apparel.

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The Rejuvenated Uniform Segment

In April 2015, we entered into a joint venture and license agreement with Pure Systems International, Ltd. to produce and market garments and other accessories for the commercial uniform marketplace and other market verticals by utilizing Pure Systems International, Ltd.’s patented processes to up-cycle pre-consumer textile waste into reusable fiber of equal or better quality than the original fabric. (the “Rejuvenated Fiber”)

In May of 2015, the Company created a new limited liability company, Pure361, LLC (“Pure361”) of which the Company owns 51% and Pure Systems International, Ltd. owns 49%. Pure361 has the exclusive licensee to use Pure System International Ltd.’s patented Rejuvenated Fiber in conjunction with the commercial uniform marketplace and other market verticals.

Ms Joy Nunn, the company’s former CTO and Board member resigned as of February 14, 2017, but the company still maintains a license with Pure System International, Ltd.

To further strengthen its capabilities in the Rejuvenated Uniform segment the Company has identified alternative technologies to those under license from Pure Systems. The company will be developing customers using this alternative technology by working with equipment vendors and toll manufacturers to produce sales samples.

The Rejuvenated Cardboard Segment

In conjunction with its focus on rejuvenated technologies, the Company is exploring the possibility of also manufacturing a rejuvenated cardboard product, and is in the early stages of exploring this potential opportunity.

Competition

In the uniform and related products segment, we will compete with many firms, including corporations with large divisions, many of these companies have great financial, technical or marketing resources, longer operating histories, greater brand recognition or larger customer bases than we do and may be able to respond more effectively to changing business and economic conditions than we can. The nature and degree of competition varies with the customer and the market. Industry statistics are not available.

Competitive pricing may require us to reduce our future prices, which would impact future profitability or result in lost sales. Our competitors, many of whom have greater resources than we do, may be better able to withstand these price reductions and lost sales.

Seasonality

We do not have a seasonal business cycle.

Employees

We have no employees. Our officers and directors furnish their time to the development of the Company at no cost and intend to do whatever work is necessary in order to generate revenues. We do not foresee hiring any employees in the near future.

Research and Development

We have not incurred any research and development expenditures over the last two fiscal years.

Intellectual Property

We do not currently own any intellectual property.

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WHERE YOU CAN FIND MORE INFORMATION

You are advised to read this Form 10-K in conjunction with other reports and documents that we file from time to time with the SEC. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available from the SEC website at www.sec.gov.

Item 1A. Risk Factors

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 1B. Unresolved Staff Comments

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 2. Properties

Our principal business and corporate address is 142 Belmont Unit#1 Somerset NJ 08873; our telephone number is (973) 390-0072. Our facilities are leased on a month-to-month basis at a price of $5,280 per month.

Item 3. Legal Proceedings

From time to time, we may become involved in litigation relating to claims arising out of our operations in the normal course of business. As of the date of the filing of this Annual Report, our company is party to three pending litigation matters.

One matter is entitled Randazzo LLC v. Avani Holdings LLC & Global Fashion Technologies, Inc. This litigation was initiated by the plaintiff in order to evict Avani Holdings LLC from its rented premises in California and to recover unpaid rent. Our company does not operate out of the premises in question and has never signed any leases or other documents with the plaintiff. A judgment of eviction was entered, but our company does not operate out of the premises in question and therefore did not appear in the matter to oppose the judgment of eviction. The plaintiff is also seeking unpaid rent in the amount of $26,595.

The second matter is entitled Patricia Witthuhn v. Global Fashion Technologies, Inc. This litigation was initiated by the plaintiff in order to collect wages allegedly due pursuant to her employment with Avani Holdings LLC. Our company never hired Ms. Witthuhn and never acquired Avani Holdings, LLC. Consequently, there is no legitimate cause of action against our company. However, due to cash flow constraints, our company is unable to hire outside counsel for this litigation. The amount being sought by the plaintiff is approximately $15,000.

Item 4. Mine Safety Disclosures

Not applicable.

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

Our common shares are listed for quotation on the OTC Markets under the symbol “GFTX”.

Our shares are issued in registered form. Signature Stock Transfer, Inc., 114673 Midway Road, Suite 220, Addison TX 75001 (Telephone: (972) 612-4120) is the registrar and transfer agent for our common shares.

On April 13, 2021, the shareholders’ list showed 172 registered shareholders with 1,251,239,584 common stock outstanding.

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Dividend Policy

We have not paid any cash dividends on our common stock and have no present intention of paying any dividends on the shares of our common stock. Our current policy is to retain earnings, if any, for use in our operations and in the development of our business. Our future dividend policy will be determined from time to time by our board of directors.

Equity Compensation Plan Information

We do not have any equity compensation plans.

Recent Sales of Unregistered Securities

	·	On January 8, 2019, the Company issued 70,588 common shares valued at $0.08 per share for a total of $5,647 to repay the outstanding amount of a convertible note of $17,688.

	·	On May 10, 2019, the Company issued 50,000 common shares valued at $0.25 for $12,500 to repay the loan from the President and Director of the Company.

	·	On June 18, 2019, the Company issued 6,400,000 common shares valued at $0.001 par value for total of $6,400 as partial consideration for the acquisition of assets from AH Original, Inc. (“AOH”), a common controlled corporation owned by the same owner group of the Company.

	·	During the year ended December 31, 2019, the Company issued 6,072,221 shares of common shares to convert the principal amount of $152,887 and accrued interest of $15,895 of convertible notes. These issuances were exempt under Section 4(a)(2) of the Securities Act.

Purchase of Equity Securities by the Issuer and Affiliated Purchasers

We did not purchase any of our shares of common stock or other securities during our fourth quarter of our fiscal year ended December 31, 2019.

Item 6. Selected Financial Data

As a “smaller reporting company”, we are not required to provide the information required by this Item.

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

The following discussion should be read in conjunction with our consolidated 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 consolidated audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

Our Current Business

Eco Tek 360, Inc. is currently in the development stage. The Company’s business plan is to operate a fiber rejuvenation technology company. It plans on offering branded fabrics, apparel and uniforms to the corporate, hotel, hospital and military markets. We will achieve this by utilizing a patented and proprietary process for rejuvenating textile waste into high quality fabrics and apparel.

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Plan of Operations and Cash Requirements

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

The following summary of our results of operations should be read in conjunction with our financial statements for the year ended December 31, 2019, which are included herein.

	December 31, 2019			December 31, 2018			Change			%
Cash and cash equivalents	$	4,794		$	29,310		$	(24,516	)		(84	)%
Prepaid interest and deposits	$	96,214		$	21,311		$	74,903			351	%
Inventories	$	60,815		$	-		$	60,815			-
Operating lease right-of-use assets	$	46,971		$	-		$	46,971			-
Property and equipment	$	213,037		$	1,113		$	211,924			19,041	%
Intangible assets	$	69,284		$	-		$	69,284			-
Total Assets	$	491,115		$	51,734		$	439,381			849	%
Total Liabilities	$	3,360,421		$	1,718,520		$	1,641,901			96	%
Stockholders’ Deficit	$	(2,869,306	)	$	(1,666,786	)	$	(1,202,520	)		72	%

The following summary of our results of operations, for the year ended December 31, 2019, should be read in conjunction with our financial statements, as included in this Form 10-K.

	Year ended
	December 31,
	2019			2018			Change			%
Revenue	$	3,758		$	-		$	3,758			-

Operating Expenses
General and administrative expenses		(463,064	)		(242,858	)		(220,206	)		91	%
Consulting fees share expense		(133,200	)		(60,493	)		(72,707	)		120	%
Officer salaries and compensation		-			(25,000	)		25,000			(100	)%
Stock based compensation		(83,574	)		(11,700	)		(71,874	)		614	%
Gain from extinguishment of debt		12,041			5,394			6,647			123	%
Other expense		(998,084	)		(110,597	)		(887,487	)		802	%
Net loss	$	(1,662,123	)	$	(445,254	)	$	(1,216,869	)		273	%

For the year ended December 31, 2019 and December 31, 2018, we recognized revenue of $3,758 and $0, respectively.

For the year ended December 31, 2019, we incurred $463,064 in general and administrative expenses, $133,200 in consulting fees share expense, $83,574 in stock-based compensation, $998,084 in other expense and recognized $12,041 in gain from extinguishment of debt, resulting in a net loss of $1,662,123.

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For the year ended December 31, 2018, we incurred $242,858 in general and administrative expenses, $60,493 in consulting fees share expense, $25,000 in officer salaries and compensation, $11,700 in stock-based compensation, $110,597 in other expense and recognized $5,394 in gain from extinguishment of debt, resulting in a net loss of $445,254.

The increase in net loss during the year ended December 31, 2019 compared to the year ended December 31, 2018 was mainly attributed to the increase in consulting fees, marketing cost, professional fees, stock based compensation from stock options, loss on change in fair value of derivative liabilities, amortization of debt discount from convertible notes and interest expenses incurred from the convertible notes during the year ended December 31, 2019.

Liquidity and Capital Resources

The following table provides selected financial data about our company as of December 31, 2019 and December 31, 2018, respectively.

Working Capital

	December 31, 2019			December 31, 2018			Change			%
Current Assets	$	161,823		$	50,621		$	111,202			220	%
Current Liabilities	$	3,360,421		$	1,718,520		$	1,641,901			96	%
Working Capital (deficit)	$	(3,198,598	)	$	(1,667,899	)	$	(1,530,699	)		92	%

Cash Flows

	Year ended
	December 31,
	2019			2018			Change
Cash Flows used in Operating Activities	$	(585,959	)	$	(3,246	)	$	(582,713	)
Cash Flows used in Investing Activities	$	(75,223	)	$	-			(75,223	)
Cash Flows provided by Financing Activities	$	636,666		$	32,556			604,110
Net Change in Cash During Period	$	(24,516	)	$	29,310		$	(53,826	)

Our working capital deficit increased as of December 31, 2019, as compared to December 31, 2018 due to the increase in our total current liabilities attributed to the increase in derivative liabilities, convertible notes and promissory notes.

Cash Flow from Operating Activities

During the year ended December 31, 2019, net cash used in operating activities was $585,959 compared to $3,246 during the year ended December 31, 2018.

The net cash used in operating activities for the year ended December 31, 2019 was attributed to a net loss of $1,662,123, increased by gain from extinguishment of debt of $12,041 and net changes in operating assets and liabilities of $91,456, offset by loss on change in fair value of derivative liabilities of $358,173, depreciation on property, plant and equipment of $24,174, amortization on intangible assets of $639, expenses paid by related party of $26,297, amortization od debt discount of $553,604, stock based compensation of$83,574 and stock issued for services of $133,200.

The net cash provided by operating activities for the year ended December 31, 2018 was attributed to a net loss of $445,254, increased by gain on settlement of debt of $5,394 and decreased by depreciation on property, plant and equipment of $30, expenses paid by related parties of $250,802, amortization of debt discount of $62,305, amortization of debt discount of $62,305, amortization of commitment fee of $5,500, stock based compensation of $11,700, stock issued for services of$37,500, non-cash interest of $4,250, non-cash expenses of $2,500 and net changes in operating assets and liabilities of $72,465.

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Cash Flow from Investing Activities

During the year ended December 31, 2019, net cash used in investing activities was $75,223 from the acquisition of property, plant and equipment of $21,500 and acquisition of intangible assets of $53,723.

The Company did not use any funds for investing activities during the year ended December 31, 2018.

Cash Flow from Financing Activities

During the year ended December 31, 2019, net cash provided by financing activities was $636,666 compared to $32,556 during the year ended December 31, 2018.

Net cash from financing activities was $636,666 for the year ended December 31, 2019 attributed to proceeds from issuance of convertible promissory notes of $817,950, proceeds from issuance of common stock of $43,500, proceeds from subscription payable of $80,000, proceeds from unsecured loans of $50,000, offset by repayment on a convertible note of $170,000, repayment of promissory note to a related party of $249, repayment of related party advances of $144,535 and repayment of unsecured loans of $40,000.

Net cash from financing activities was $32,556 for the year ended December 31, 2018 attributed to proceeds from issuance of convertible promissory note of $100,000 and $20,000 in proceeds from a subscription payable offset by repayment of related party advances of $87,444.

Contractual Obligations

As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.

Going Concern

The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles, which contemplates continuation of the Company as a going concern. The Company has an accumulated deficit of $32,685,425 and $31,023,302 as of December 31, 2019 and December 31, 2018, respectively, which include net losses of $1,662,123 and $445,254 for the years ended December 31, 2019, and 2018, respectively. In addition as of December 31, 2019 and 2018, the Company had a working capital deficit of $3,198,598 and $1667,899 respectively, with limited cash resources available. Consequently, the aforementioned items raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management plans to raise additional debt or equity and continue to settle obligations by issuing stock. Management plans to continue to raise additional debt and equity until the Company has positive cash flows from an operating company.

The Company’s ability to continue as a going concern is dependent upon its ability to repay or settle its current indebtedness, generate positive cash flow from an operating company, and/or raise capital through equity and debt financing or other means on desirable terms. If the Company is unable to obtain additional funds when they are required or if the funds cannot be obtained on favorable terms, management may be required to restructure the Company or cease operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

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Critical Accounting Policies

We prepare our consolidated financial statements in conformity with GAAP, which requires management to make certain estimates and assumptions and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared and actual results could differ from our estimates and such differences could be material. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation our financial statements. Please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as included in this Annual Report, for disclosures regarding the Company’s critical accounting policies and estimates.

Use of Estimates

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 disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the valuation of common stock and options issued as stock based compensation.

Revenue Recognition

The Company recognizes revenue from its contracts with customers in accordance with ASC 606 – Revenue from Contracts with Customers. The Company recognizes revenues when satisfying the performance obligation of the associated contract that reflects the consideration expected to be received based on the terms of the contract.

Revenue related to contracts with customers is evaluated utilizing the following steps: (i) Identify the contract, or contracts, with a customer; (ii) Identify the performance obligations in the contract; (iii) Determine the transaction price; (iv) Allocate the transaction price to the performance obligations in the contract; (v) Recognize revenue when the Company satisfies a performance obligation.

Leases

Effective October 1, 2019, the Company adopted the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), and additional ASUs issued to clarify and update the guidance in ASU 2016-02 (collectively, the “new leases standard”), which modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing key information about leasing arrangements. The Company adopted the new leases standard utilizing the modified retrospective transition method, under which amounts in prior periods presented were not restated. For contracts existing at the time of adoption, the Company elected to not reassess (i) whether any are or contain leases, (ii) lease classification, and (iii) initial direct costs. Upon adoption, the Company recorded $62,356 of right-of-use (“ROU”) assets and $62,356 of lease liabilities on its Consolidated Balance Sheet.

Stock-based Compensation

We account for stock-based awards at fair value on the date of grant, and recognize compensation over the service-period that they are expected to vest. We estimate the fair value of stock options and stock purchase warrants using the Black-Scholes option pricing model. The estimated value of the portion of a stock-based award that is ultimately expected to vest, taking into consideration estimated forfeitures, is recognized as expense over the requisite service periods. The model includes subjective input assumptions that can materially affect the fair value estimates. The expected volatility is estimated based on the most recent historical period of time, of other comparative securities, equal to the weighted average life of the options. The estimate of stock awards that will ultimately vest requires judgment, and to the extent that actual forfeitures differ from estimated forfeitures, such differences are accounted for as a cumulative adjustment to compensation expenses and recorded in the period that estimates are revised. For the year ended December 31, 2019 and 2018, the Company incurred $83,574 and $11,700 for stock based compensation, respectively.

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Fair Value

FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:

Level 1—Quoted market prices for identical assets or liabilities in active markets or observable inputs;

Level 2—Significant other observable inputs that can be corroborated by observable market data; and

Level 3—Significant unobservable inputs that cannot be corroborated by observable market data.

The Company analyzed the conversion option for derivative accounting consideration under ASC 815, “Derivatives and Hedging,” and determined that the convertible notes should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The Company accounts for convertible notes and warrants as a derivative liabilities due to there being no explicit limit to the number of shares to be delivered upon settlement of all conversion options.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt—Debt with Conversion and Other Options”. The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently assessing the impact of the adoption of this standard on its financial statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company”, we are not required to provide the information required by this Item.

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Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors

of Eco Tek 360, Inc.

OPINION ON THE FINANCIAL STATEMENTS

We have audited the accompanying consolidated balance sheet of Eco Tek 360, Inc. and its subsidiaries (the “Company”) as of December 31, 2018, the related consolidated statements of operations, stockholders’ deficit and cash flows for the year ended December 31, 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018, and the results of its operations and its cash flows for the year 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 more fully explained in Note 1, the Company has incurred losses since inception, has an accumulated deficit of $31,023,302 and a cash balance of approximately $29,000 as of December 31, 2018 and needs to raise substantial amounts of additional funds to meet its obligations and commence its operations. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

BASIS FOR OPINION

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ L J Soldinger Associates, LLC

Deer Park, Illinois

April 16, 2019

We have served as the Company’s auditor since 2016.

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Boyle CPA, LLC

Certified Public Accountants & Consultants

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

Global Fiber Technologies, Inc. (formerly ECO TEK 360, INC.)

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Global Fiber Technologies, Inc. (formerly ECO TEK 360, INC.) and subsidiaries (the “Company”) as of December 31, 2019, and the related statements of operations, changes in stockholders’ deficit, and cash flows for the year ended December 31, 2019, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019, and the results of its operations and its cash flows for the year ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt About the Company’s Ability to Continue as a Going Concern

As discussed in Note 1 to the financial statements, the Company’s accumulated deficit, net loss and working capital deficiency raise substantial doubt about its ability to continue as a going concern for a period of one year from the issuance of the financial statements. Management’s plans are also described in Note 1. The financial statements do not include adjustments that might result from the outcome of this uncertainty.

Basis of Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit.We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, 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.

/s/ Boyle CPA, LLC

We have served as the Company’s auditor since 2020.

Bayville, NJ

April 21, 2021

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Global Fiber Technologies, Inc.

(formerly ECO TEK 360, INC. and Subsidiaries)

Consolidated Balance Sheets

	December 31, 2019			December 31, 2018
ASSETS
Current Assets
Cash and cash equivalents	$	4,794		$	29,310
Prepaid interest and deposits		96,214			21,311
Inventories		60,815			-
Total Current Assets		161,823			50,621

Operating lease right-of-use assets		46,971			-
Property and equipment, net		213,037			1,113
Intangible assets		69,284			-
TOTAL ASSETS	$	491,115		$	51,734

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued liabilities		211,243			263,869
Accrued compensation		501,250			501,250
Unsecured notes and accrued interest payable		223,091			196,083
Convertible notes and accrued interest - net of debt discount of $245,191 and $52,720, respectively		488,865			99,968
Convertible notes and accrued interest - related party		67,500			63,500
Promissory note and accrued interest - related party		278,168			-
Derivative Liabilities		989,813			-
Advances from related parties		124,558			255,296
Related party loans and accrued interest		244,681			234,273
Subscription payable		100,000			20,000
Operating lease liabilities		46,971			-
Current liabilities from discontinued operations		84,281			84,281
Total Current Liabilities		3,360,421			1,718,520

Commitments and Contingencies (Note 11)		-			-

Stockholders’ Deficit
Preferred stock, Class B, $0.001 par value, 1,000,000 shares authorized, 200,000 shares issued and outstanding		200			200
Common stock $0.001 par value, 1,000,000,000 shares authorized, 28,338,736 and 19,975,927 shares issued
and outstanding, 6,688,666 and 1,168,666 issuable as of December 31, 2019 and December 31, 2018, respectively		35,028			21,145
Additional paid-in capital		29,780,891			29,335,171
Accumulated deficit		(32,685,425	)		(31,023,302	)
Stockholders' deficit		(2,869,306	)		(1,666,786	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	491,115		$	51,734

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

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Global Fiber Technologies, Inc.

(formerly ECO TEK 360, INC. and Subsidiaries)

Consolidated Statements of Operations

	Year ended
	December 31,
	2019			2018

REVENUE	$	3,758		$	-

OPERATING EXPENSES
General and administrative	$	463,064		$	242,858
Consulting fees share expense		133,200			60,493
Officer salaries and compensation		-			25,000
Stock based compensation		83,574			11,700
Gain from extinguishment of debt		(12,041	)		(5,394	)
Total Operating Expenses		667,797			334,657

LOSS FROM OPERATIONS		(664,039	)		(334,657	)

OTHER EXPENSE
Loss on change in fair value of derivative liabilities		358,173			-
Interest expense and financing costs		618,300			96,205
Interest expense - related parties		21,611			14,392
Total other expense		998,084			110,597

Loss from continuing operations		(1,662,123	)		(445,254	)
Provision for income taxes		-			-

NET LOSS	$	(1,662,123	)	$	(445,254	)

Net loss per share	$	(0.06	)	$	(0.02	)

Weighted average common shares outstanding		29,797,322			20,795,800

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

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Global Fiber Technologies, Inc.

(formerly ECO TEK 360, INC. and Subsidiaries)

Consolidated Statements of Stockholders’ Deficit

For the Year Ended December 31, 2019 and 2018

	Class B Preferred Stock				Common Stock				Additional					Total
	Number of Shares		Amount		Number of Shares		Amount		Paid-in Capital		Accumulated Deficit			Stockholders' Deficiency

Balance - December 31, 2017		200,000	$	200		20,500,093		20,500	$	29,175,692	$	(30,578,048	)	$	(1,381,656	)
Common stock issued for consulting services		-		-		300,000		300		42,700		-			43,000
Stock based compensation		-		-		97,500		98		11,602		-			11,700
Common stock issued for repayment of related party loan		-		-		222,000		222		33,078		-			33,300
Common stock issued for extension of note		-		-		25,000		25		4,225		-			4,250
Debt discount - Convertible promissory note and warrants		-		-		-		-		67,874		-			67,874
Net loss		-		-		-		-		-		(445,254	)		(445,254	)
Balance - December 31, 2018		200,000	$	200		21,144,593	$	21,145	$	29,335,171	$	(31,023,302	)	$	(1,666,786	)
Common stock issued for cash		-		-		190,000		190		43,310		-			43,500
Options issued for consulting services		-		-		-		-		83,574		-			83,574
Common stock issued for consulting services		-		-		1,100,000		1,100		132,100		-			133,200
Common stock issued for settlement of a convertible note		-		-		70,588		71		5,576		-			5,647
Common stock issued for repayment of related party loan		-		-		50,000		50		12,450		-			12,500
Common stock issued for conversion of convertible notes		-		-		6,072,221		6,072		168,710		-			174,782
Acquisition of assets from related party		-		-		6,400,000		6,400		-		-			6,400
Net loss		-		-		-		-		-		(1,662,123	)		(1,662,123	)
Balance - December 31, 2019		200,000	$	200		35,027,402	$	35,028	$	29,780,891	$	(32,685,425	)	$	(2,869,306	)

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

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Global Fiber Technologies, Inc.

(formerly ECO TEK 360, INC. and Subsidiaries)

Consolidated Statements of Cash Flows

	Year ended
	December 31,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,662,123	)	$	(445,254	)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Loss on change in fair value of derivatives liabilities		358,173			-
Gain from extinguishment of debt		(12,041	)		(5,394	)
Depreciation - Property and equipment		24,174			380
Amortization - Intangible assets		639			-
Expenses paid for directly by related party		26,297			250,802
Amortization of debt discount		553,604			62,305
Amortization of commitment fee		-			5,500
Stock based compensation expense		83,574			11,700
Stock issued for services		133,200			37,500
Non-cash interest		-			4,250
Non-cash expenses		-			2,500
Changes in operating assets and liabilities:
Expense paid for subsidiary		(16,336	)		-
Prepaid interest and deposits		(107,753	)		14,022
Accounts payable and accrued expenses		(52,626	)		(13,557	)
Accrued compensation		-			25,000
Accrued interest		85,259			41,463
Allowance of loans and interest receivable - related party		-			5,537
Net cash used in operating activities		(585,959	)		(3,246	)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment		(21,500	)		-
Acquisition of intangible assets		(53,723	)		-
Net cash used in investing activities		(75,223	)		-

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible promissory note, net		817,950			100,000
Proceeds from issuance of common stock		43,500			-
Proceeds from subscriptions payable		80,000			20,000
Proceeds from unsecured loans		50,000			-
Repayment of convertible notes		(170,000	)		-
Repayment of promissory note- related party		(249	)		-
Repayment of related party advance		(144,535	)		(87,444	)
Repayment of unsecured loans		(40,000	)		-
Net cash provided by financing activities		636,666			32,556

Net change in cash and cash equivalents		(24,516	)		29,310
Cash and cash equivalents - beginning of period		29,310			-
Cash and cash equivalents - end of period	$	4,794		$	29,310

Supplemental Cash Flow Disclosures
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

Non-Cash Investing and Financing Activity:
Shares issued for related party loan	$	12,500		$	33,300
Acquisition of assets from related party through the issuance of common stock and a note	$	275,277		$	-
Common stock issued for conversion of convertible notes	$	174,782		$	-
Common stock issued for settlement of a convertible note	$	5,647		$	-
Debt discount from derivative liabilities	$	772,463		$	-
Initial recognition of operating lease right-of-use assets	$	62,356		$	-
Beneficial conversion feature	$	-		$	56,650
Warrant granted in conjunction with convertible notes recognized as debt discount	$	-		$	11,224

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

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GLOBAL FIBER TECHNOLOGIES, INC.

(FORMERLY ECO TEK 360, INC.)

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019

NOTE 1 – DESCRIPTION OF BUSINESS AND GOING CONCERN

Global Fiber Technologies, Inc. (“the Company”) was incorporated in Nevada on March 25, 2005. As of December 31, 2019 and December 31, 2018, the Company had 400,000,000 shares of authorized common stock.

During the second quarter, 2014 the Company formed Leading Edge Fashions, LLC of which it controls 51%. Effective December 31, 2014 the Company’s Board of Directors determined it was in the best interest of the Company to discontinue the operations of Leading Edge Fashions, LLC.

The Company created a new limited liability company, Pure361, LLC (“Pure361”) in May 2015 for the purpose of operating the portion of the Company’s business that is involved with the collection, rejuvenation and manufacturing of garments and other accessories for the uniform marketplace that serves the hospitality, food service, medical, manufacturing, education, military, transportation and other commercial uniform industries. The Company owns 51% of Pure361. Pure361 entered into a license agreement with Pure System International Ltd. (“Pure”), the minority owner of Pure 361, related to potential future operations in which Pure361 was granted the exclusive license to use certain licensed intellectual property related to the manufacturing of uniforms from recyclable waste. Pure361 has had no operations to date nor did it have assets or liabilities as of December 31, 2019 and 2018, respectively.

The Company created a new wholly owned subsidiary, Progressive Fashions Inc. (“PFI”) in February 2016 for the purpose of designing, producing and marketing the EMME® Activewear Collection. On June 5, 2017 the Company and True Beauty, LLC (the company that controls the EMME® trademark) terminated the license agreement. PFI has had no operations to date nor did it have assets or liabilities as of December 31, 2019 and 2018, respectively.

Going Concern

The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles, which contemplates continuation of the Company as a going concern. The Company has an accumulated deficit of $32,685,425 and $31,023,302 as of December 31, 2019 and December 31, 2018, respectively, which include net losses of $1,662,123 and $445,254 for the year ended December 31, 2019 and 2018, respectively. In addition, as of December 31, 2019 and December 31, 2018, the Company had a working capital deficit of $3,198,598 and $1,667,899 respectively, with limited cash resources available. Consequently, the aforementioned items raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management plans to raise additional debt or equity and continue to settle obligations by issuing stock. Management plans to continue to raise additional debt and equity until the Company has positive cash flows from an operating company.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company uses the accrual basis of accounting and has adopted a December 31 fiscal year end.

Principles of Consolidation

The accompanying consolidated financial statements include all of the accounts of the Company and its wholly owned subsidiaries, Trident Merchant Group, Inc. and Progressive Fashions Inc., and its majority owned subsidiaries, Leading Edge Fashion, LLC, Pure361, LLC and ECO CHAIN 360, Inc. which are 51% owned. All significant intercompany accounts and transactions have been eliminated. As noted above in Note 1, our 51% owned subsidiaries, Pure361, Leading Edge Fashions, LLC and ECO CHAIN 360, Inc., had no operations, assets or liabilities as of December 31, 2019 and 2018. Because of this, a non-controlling interest is not reflected in these financial statements. In addition, the Company has consolidated Authentic Heroes, Inc., Inc. of which the Company owns 80%.

Reclassifications

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported consolidated net loss.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and investments in money market funds. The Company considers all highly-liquid instruments with an original maturity of 90 days or less at the time of purchase to be cash equivalents.

Inventories

Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value.

On June 18, 2019, the Company acquired inventories from AH Originals, Inc. for an aggregate amount of $60,815.

	December 31, 2019		December 31, 2018
Raw Material	$	13,631	$	-
Finished Goods		47,184		-
	$	60,815	$	-

Equipment

Property and equipment are stated at cost. Costs of replacements and major improvements are capitalized, and maintenance and repairs are charged to operations as incurred. Depreciation expense is provided primarily by the straight-line method over the estimated useful lives of the assets as follows:

Equipment		5 Years
Furniture and Fixtures		7 Years
Forklift		3 Years

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	December 31,			December 31,
	2019			2018
Furniture and Equipment	$	218,315		$	2,650
Forklift		20,433			-
		238,748			2,650
Less accumulated depreciation		(25,711	)		(1,537	)
	$	213,037		$	1,113

Depreciation expense amounted to $24,174 and $380 for the year ended December 31, 2019 and 2018, respectively.

On June 18, 2019, the Company acquired equipment from AH Originals, Inc. for an aggregate amount of $214,598.

The long-lived assets of the Company are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment” (“ASC 360”), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the year ended December 31, 2019 and 2018, no impairment losses have been identified.

Intangible Assets

The Company accounts for intangible assets (including trademarks and website) in accordance with ASC 350 “Intangibles-Goodwill and Other” (“ASC 350”). ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. In addition, ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units; assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates.

The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed, either on a straight-line or accelerated basis over the estimated periods benefited. Patents, technology and other intangibles with contractual terms are generally amortized over their respective legal or contractual lives. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted.

On June 18, 2019, the Company acquired intangible assets from AH Originals, Inc. for an aggregate amount of $16,200, which includes website of $10,690 and patent of $5,510.

We amortize the cost of our intangible assets over the 15-year estimated useful life on a straight-line basis.

The following table sets forth the amortization for the intangible assets at December 31, 2019 and 2018:

	December 31,			December 31,
	2019			2018
Patent	$	9,233		$	-
Websites		10,690			-
Royalties		50,000			-
		69,923			-
Less accumulated amortization		(639	)		-
	$	69,284		$	-

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Amortization expense amounted to $639 and $0 for the year ended December 31, 2019 and 2018, respectively.

Prepaid interest and deposits

Prepaid interest and deposits consist of prepaid consulting fees, OTC market annual fees and license agreement. Prepaid interest is amortized over the life of the related liability.

Revenue Recognition

Accounts Receivable

Accounts receivable are recorded in accordance with ASC 310, ”Receivables.” Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company does not currently have any amount recorded as an allowance for doubtful accounts. Based on management’s estimate and based on all accounts being current, the Company has not deemed it necessary to reserve for doubtful accounts at this time.

Leases

Income Taxes

Income taxes are accounted for under the asset and liability method as stipulated by ASC 740 “Income Taxes.” Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss 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. Under ASC 740, the effect on deferred tax assets and liabilities or a change in tax rate is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced to estimated amounts to be realized by the use of a valuation allowance. A valuation allowance is applied when in management’s view it is more likely than not that such deferred tax asset will be unable to be utilized.

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The Company adopted certain provisions under ASC Topic 740, which provide interpretative guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Effective with the Company’s adoption of these provisions, interest related to the unrecognized tax benefits is recognized in the financial statements as a component of income taxes.

In the unlikely event that an uncertain tax position exists in which the Company could incur income taxes, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities. Reserves for uncertain tax positions would be recorded if the Company determined it is probable that a position would not be sustained upon examination or if payment would have to be made to a taxing authority and the amount is reasonably estimated. As of December 31, 2019 and 2018, the Company does not believe it has any uncertain tax positions that would result in the Company having a liability to the taxing authorities. The Company’s tax returns are subject to examination by the federal and state tax authorities for the years ended 2006 through 2019.

Stock-based Compensation

Beneficial Conversion Feature

For conventional convertible debt where the rate of conversion is below market value, the Company records any “beneficial conversion feature” (“BCF”) intrinsic value as additional paid in capital and related debt discount.

When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The discount is amortized over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

Debt Issue Costs

The Company may pay debt issue costs in connection with raising funds through the issuance of debt whether convertible or not or with other consideration. These costs are recorded as debt discounts and are amortized over the life of the debt to the statement of operations as amortization of debt discount.

Original Issue Discount

If debt is issued with an original issue discount, the original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized over the life of the debt to the statement of operations as amortization of debt discount. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

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Use of Accounting Estimates

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 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. Significant items subject to such estimates and assumptions include the valuation of stock based awards issued and derivatives embedded in financial instruments. Estimates are used in the determination of depreciation, the valuation of non-cash issuances of common stock, stock options and warrants, valuing convertible notes for beneficial conversion features, among others.

Fair Value

ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:

Level 1—Quoted market prices for identical assets or liabilities in active markets or observable inputs;

Level 2—Significant other observable inputs that can be corroborated by observable market data; and

Level 3—Significant unobservable inputs that cannot be corroborated by observable market data.

The following table summarizes fair value measurements by level at December 31, 2019, and 2018, measured at fair value on a recurring basis:

December 31, 2019	Level 1		Level 2		Level 3		Total
Liabilities
Derivative Liabilities	$	-	$	-	$	989,813	$	989,813

December 31, 2018	Level 1		Level 2		Level 3		Total
Liabilities
Derivative Liabilities	$	-	$	-	$	-	$	-

Concentration of Credit Risk

The carrying value of short-term financial instruments, including cash, restricted cash, trade accounts receivable, accounts payable, accrued expenses and short-term debt, approximates the fair value of these instruments. These financial instruments generally expose the Company to limited credit risk and have no stated maturities or have short-term maturities and carry interest rates that approximate market. The Company maintains cash balances at financial institutions that are insured by the FDIC. At December 31, 2019 and December 31, 2018, the Company had no amounts in excess of the FDIC limit.

COVID-19

The Company’s operations and business have experienced disruption due to the unprecedented conditions surrounding the COVID-19 pandemic spreading throughout the United States and the world and thus the Company’s business operations have been disrupted and it is unable to timely review and prepare the Company’s financial statements for the 2019 fiscal year.

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (“COVID-19”) a “Public Health Emergency of International Concern,” and on March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic”. Our operations are in Somerset, NJ which NJ as a whole is characterized as an area that has a “ high concentration of risk” as it relates to COVID-19.

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The Company has been following the recommendations of local health authorities to minimize exposure risk for its employees for the past several weeks, including the temporary closures of its offices and having employees work remotely to the extent possible, which has to an extent adversely affected their efficiency. As a result, the Company’s books and records were not easily accessible, resulting in delays in preparation and completion of its financial statements. Further, the various governmental mandatory closures of businesses in these locations have precluded the Company’s personnel, particularly its senior accounting staff, from obtaining access to its subsidiaries’ books and records necessary to prepare the Company’s financial statements that, once audited, comprise the essence of the Annual Report.

New Accounting Pronouncements

NOTE 3 – CAPITAL STOCK

Preferred Stock

The Company has designated a “Class B Convertible Preferred Stock” (the “Class B Preferred”). The number of authorized shares totals 1,000,000 and the par value is $.001 per share. The Class B Preferred shareholders vote together with the common stock as a single class. The holders of Class B Preferred are entitled to receive all notices relating to voting as are required to be given to the holders of the Common Stock. The holders of shares of Class B Preferred shall be entitled to 10,000 votes per share. The Class B Preferred Stock will have the rights to liquidation as all classes of the Common Stock of the Company. The Class B Preferred stockholders are entitled to receive non-cumulative dividends at the rate of 8% per annum, and are accrued daily. The Class B Preferred Stock shall be redeemed by the Corporation for 100% of the original purchase price plus the amount of cash dividends accrued on the earlier of 6 months from the date of issuance, or the date that the Corporation received its funding from any outside source in conjunction with a merger, reverse merger or any change of control. In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the holders of the Class B Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any assets of the Corporation to the holders of the Common Stock, the amount of $.035 per share plus any and all accrued but unpaid dividends.

During the fourth quarter of 2011, 200,000 shares of the Series B Preferred Stock were issued to a related party for reimbursement of $7,500 of legal and accounting fees paid on behalf of the Company.

Common Stock

As of December 31, 2019 and 2018, the Company had 28,338,736 and 19,975,927 shares of its $0.001 par value common stock issued and outstanding, respectively. In addition, as of December 31, 2019 and 2018, the Company had 6,688,666 and 1,168,666 shares of common stock issuable, respectively.

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During the year ended December 31, 2019, the Company issued common shares as follows,

	·	On January 8, 2019, the Company issued 70,588 common shares valued at $0.08 per share for a total of $5,647 to repay the outstanding amount of a convertible note of $17,688, resulting in a gain from debt extinguishment of $12,041.

	·	On May 10, 2019, the Company issued 50,000 common shares valued at $0.25 for $12,500 to repay the loan from the President and Director of the Company.

	·	In May 2019, the Company issued 190,000 common shares for cash proceeds of $43,500.

	·	On June 18, 2019, the Company issued 6,400,000 common shares valued at $0.001 par value for total of $6,400 as partial consideration for the acquisition of assets from AH Original, Inc. (“AOH”), a common controlled corporation owned by the same owner group of the Company.

	·	On July 1, 2019, the Company issued 400,000 shares of common stock valued at $80,000, based on market price on the issuance dates, as partial consideration to a corporation for investor relations services.

	·	On October 16, 2019, the Company issued 700,000 shares of common stock valued at $53,200, based on market price on the issuance dates, as partial consideration to a corporation for consulting services.

	·	During the year ended December 31, 2019, the Company issued 6,072,221 shares of common shares to convert the principal amount of $152,887 and accrued interest of $15,895 of convertible notes.

During the year ended December 31, 2018, the Company issued common shares as follows,

	·	On June 15, 2018, 50,000 common shares were issued at a fair value of $5,500 as a commitment fee for the issuance of a $112,238 convertible note. In addition, the Company granted warrants to purchase 112,238 shares of common stock at $0.35 per share exercisable for a period of two years. The fair value of these warrants at the time they were granted was approximately $11,224 and was calculated using the Black-Scholes-Merton model (see Note 4).

	·	On August 15, 2018, the Company issued 25,000 common shares valued at $0.17 per share for a total of $4,250 to extend the loans’ maturity date.

	·	On August 20, 2018, the Company issued 97,500 common shares valued at $0.12 per share for a total of $11,700 as compensation to the president and CEO of the Company.

	·	In October 2018, the Company issued 222,000 common shares valued at $0.15 for $33,300 to repay the loan from the President and Director of the Company.

	·	In April 2018, the Company issued 250,000 common shares valued at $0.15 for $37,500 for consulting services which is being amortized over the one year service period. As of December 31, 2018, prepaid consulting expense related to this agreement was $11,507.

Warrants Exercisable to Common Shares

The below table summarizes the activity of warrants exercisable for common shares during the year ended December 31, 2019 and the year ended December 31, 2018:

	Number of		Weighted Average
	Shares		Exercise Price
Balance as of December 31, 2017		-	$	-
Granted		112,238		0.35
Exercised		-		-
Forfeited		-		-
Balance as of December 31, 2018		112,238	$	0.35
Granted		1,038,125		0.29
Exercised		-		-
Forfeited		-		-
Balance as of December 31, 2019		1,150,363	$	0.30

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The following table summarizes information relating to outstanding and exercisable stock warrants as of December 31, 2019:

Warrants Outstanding
		Weighted Average
		Remaining Contractual		Weighted Average
Number of Shares		life (in years)		Exercise Price
	1,150,363		3.68	$	0.30

As of December 31, 2019 and December 31, 2018, the intrinsic value warrants outstanding was $0 and $0 based on the closing market price of $0.012 on December 31, 2019 and $0.17 on December 31, 2018, respectively.

Stock Options

During the year ended December 31, 2017, the Company granted 2,650,000 options to consultants, employees and management. One hundred thousand of those options had an exercise price of $.0001, and 250,000 options at an exercise price of $0.01 vested immediately and were valued at the fair value of the Company’s stock at the measurement date less the exercise price. The value of the options was $151,490 and recorded as stock based compensation. The other 2,300,000 of options vested immediately and the fair value of these options were calculated using the Black-Scholes-Merton model. The stock compensation expense related to these options for the year ended December 31, 2017 was $433,870. During the year ended December 31, 2019, the expiry terms of 875,000 options granted during year ended December 31, 2017 were extended for two years, resulting in fair value adjustment of $46,513 recorded under stock based compensation expense.

During the year ended December 31, 2019, the Company granted 50,000 options to consultants with an exercise price of $0.50 vested immediately and the fair value of these options were calculated using the Black-Scholes-Merton model. The stock compensation expense related to these options was $37,061.

The following assumptions were used to determine the fair value for the options granted using a Black-Scholes-Merton pricing model during the year ended December 31, 2019:

	For the Year ended December 31, 2019
Fair values	$	0.30
Exercise price	$	0.50
Expected term at issuance	3 years
Expected average volatility		94.62	%
Expected dividend yield		—
Risk-free interest rate		2.34	%

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A summary of the change in stock purchase options outstanding for the year ended December 31, 2019 and the year ended December 31, 2018 is as follows:

							Average
			Weighted		Weighted		Remaining
			Average		Average		Contractual
	Options		Exercise		Grant Date		Life
	Outstanding		Price		Fair Value		(Years)
Balance - December 31, 2017		2,650,000	$	0.33	$	0.33		6.92
Options issued		-		-		-		-
Options expired		-		-		-		-
Options exercised		-		-		-		-
Balance - December 31, 2018		2,650,000	$	0.33	$	0.30		5.92
Options issued		50,000	$	0.50	$	0.30		2.22
Options expired (See note above)		-		-		-		-
Options exercised		-		-		-		-
Balance – December 31, 2019		2,700,000	$	0.34	$	0.30		4.87

The following table shows information on our vested and unvested options outstanding during the year ended December 31, 2019 and the year ended December 31, 2018:

							Average
			Weighted		Weighted		Remaining
			Average		Average		Contractual
	Options		Exercise		Grant Date		Life
	Outstanding		Price		Fair Value		(Years)
Balance - December 31, 2017, unvested		-	$	-	$	-		-

Balance - December 31, 2018, unvested		-	$	-	$	-		-

Options issued		50,000	$	0.50	$	0.30		2.22
Options vested		50,000	$	0.50	$	0.30		2.22
Options expired (See note above)		-		-		-		-
Options exercised		-		-		-		-
Balance – December 31, 2019, unvested		-	$	-	$	-		-

As of December 31, 2019 and December 31, 2018, the intrinsic value of 350,000 options and 350,000 options was $1,690 and $56,990 based on the closing market price of $0.012 on December 31, 2019 and $0.17 on December 31, 2018, respectively.

NOTE 4 – NOTES PAYABLE

Unsecured Notes Payable

On November 25, 2014, the Company issued an unsecured promissory note to an individual in the amount of $100,000 at 10% interest and due on April 1, 2015. On April 1, 2016 the Company entered into a forbearance agreement. The Company was granted an extension of the note through September 30, 2016 in consideration of 150,000 shares of common stock valued at $150,000 with interest accruing after March 29, 2016 at 12%. The lender was issued an additional 50,000 shares valued at $50,000 to extend the note to August 31, 2017. During the year ended December 31, 2019, the Company made $15,000 repayment. The note and accrued interest was $159,303 and $157,855 as of December 31, 2019 and December 31, 2018. The initial extension fee was amortized ratably over the extension period of 180 days. The note remains unpaid as of December 31, 2019 and is currently in default.

During the year ended December 31, 2016, the Company received two separate payments of $12,500, totaling $25,000, as secured notes. The notes are non-interest bearing and have no terms of repayment. The balance of the notes was $25,000 as of December 31, 2019 and December 31, 2018.

On December 12, 2016, the Company issued an unsecured promissory note to an investor. The note bears interest at 5% and matured on June 30, 2017. As of December 31, 2016, payments from the investor are $2,200. On January 11, 2017, the investor loaned an additional $5,000 related to the promissory note. The balance of this note plus accrued interest totals $8,269 and $7,909 as of December 31, 2019 and December 31, 2018, respectively. The notes are currently unpaid and in default.

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On March 14, 2017, the Company issued an unsecured promissory note to an investor in the amount of $5,000. The note bears interest at 4% and matures on March 14, 2018. The balance of this note plus interest totals $5,519 and $5,319 as of December 31, 2019 and December 31, 2018, respectively and is currently in default.

During the year ended December 31, 2019, the Company received four separate payments of $12,500, totaling $50,000, as secured notes. The notes are non-interest bearing and have no terms of repayment. During the year ended December 31, 2019, the Company made $15,000 repayment. The balance of the notes was $25,000 as of December 31, 2019.

Convertible Notes Payable – related party

In August 2015, the Company issued an unsecured promissory note to an investor in the amount of $50,000, convertible to common stock at $1.00 per share. The note bears an interest rate of 8% per annum and matured on August 8, 2016. The note is currently unpaid and in default. The note does not contain a beneficial conversion feature. The balance of this note plus accrued interest totals were $67,500 and $63,500 at December 31, 2019 and December 31, 2018, respectively.

Promissory Notes Payable – related party

On June 18, 2019, the Company issued a promissory note at a principal amount of $447,150 as part of the consideration for the acquisition of assets from AH Originals, Inc., a corporation controlled by the same owner group of Global Fiber Technologies, Inc. The promissory note bears 3% interest per annum and have a one year term with eight options to extend the maturity date for three-month periods. During the year ended December 31, 2019, debt discount of $35,187 has been amortized. The balance of this note, net of note discount of $175,935 plus accrued interest totals were $278,168 at December 31, 2019.

Convertible Notes Payable

The convertible notes payable and accrued interest payable as of December 31, 2019 is as follows:

			Outstanding		Note			Accrued
Noteholder	Issue Date	Maturity Date	Principal		Discount			Interest		Total
Auctus Fund LLC	01/03/19	10/03/19	$	68,949	$	-		$	319	$	69,269
JSJ Investments Inc.	01/15/19	01/15/20		-		-			-		-
GS Capital Partners LLC	01/23/19	01/23/20		16,996		(3,536	)		4,184		17,643
Crown Bridge Partners, LLC	02/07/19	10/25/19		18,418		0			4,136		22,553
Jefferson Street Capital LLC	04/08/19	01/08/20		23,500		(961	)		2,094		24,633
Armada Investment Fund LLC	04/08/19	01/08/20		17,000		(893	)		165		16,272
BHP Capital NY Inc.	04/08/19	01/08/20		32,500		(1,057	)		0		31,443
Power Up Lending Group LLC	07/22/19	07/22/20		63,000		(31,328	)		2,796		34,468
Power Up Lending Group LLC#2	08/01/19	08/01/20		43,000		(21,383	)		1,791		23,408
EMA Financial LLC	08/19/19	05/19/20		60,000		(19,708	)		2,203		42,495
Jefferson Street Capital LLC#2	08/27/19	05/27/20		52,500		(17,245	)		1,450		36,705
Armada Investment Fund LLC#2	08/27/19	05/27/20		52,500		(17,245	)		1,450		36,705
BHP Capital NY Inc.#2	08/27/19	05/27/20		52,500		(17,245	)		1,450		36,705
William J. Bergeron	08/05/19	05/05/20		12,500		(4,106	)		405		8,799
GS Capital Partners LLC#2	10/08/19	10/08/20		58,000		(43,421	)		1,335		15,914
Power Up Lending Group LLC#3	10/31/19	10/31/20		38,000		(28,448	)		635		10,187
David Nichols	11/26/19	05/26/20		50,000		(202	)		252		50,050
David Nichols#2	12/27/19	01/27/21		50,000		(38,413	)		29		11,616
			$	709,363	$	(245,191	)	$	24,693	$	488,865

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FirstFire Global Opportunities Fund

On June 15, 2018, The Company issued a convertible promissory note to an investor in the amount of $112,238, with an original issue discount of $9,738, convertible into common stock at the lower of $0.35 per share or a fixed conversion price of 75% multiplied by the lowest traded price of the common stock during the ten consecutive trading day period immediately preceding the notice of conversion. The Company recorded an additional liability for the value transferred to the note holder by the ability of the note holder to obtain a conversion price at a fixed discount to the trading price of the Company’s common stock in the amount of $37,413 and has treated that amount as a discount to the note and is amortizing this discount over the life of the note to interest expense. Under U.S. GAAP, this type of note is known as Stock-Settled Debt. The note bears interest at 5% per annum and matures on June 15, 2019. In connection with issuance of the note, the Company issued warrants to purchase 112,238 shares of common stock at $0.35 per share exercisable for a period of two years. The fair value of these warrants at the time they were granted was $17,796 calculated using Monte Carlo model. The market value of the stock and the historical volatility of the Company’s stock on the day the warrant was granted was $0.11 and 273%, respectively. The total beneficial conversion feature discount recognized was $56,650. The total discount of $115,024 is being amortized over the term of the note. On January 8, 2019, the note holder converted the remaining balance of debt and accrued interest outstanding of $17,688 into a total of 70,588 shares, resulting in a gain from extinguishment of debt of $12,041. The Company made payments totaling $135,000 to repay the balance due on the convertible note in January 2019.

Auctus Fund LLC

On January 3, 2019, the Company issued a convertible promissory note in the amount of $86,250, convertible into common stock at the lower of the lowest trading price within the prior twenty-five days of the execution of the note or a fixed conversion price of 50% multiplied by the lowest traded price of the common stock during the twenty-five consecutive trading day period immediately preceding the conversion date. The note bears interest at 12% per annum and matures on October 3, 2019. In connection with issuance of the note, the Company issued warrants to purchase 215,625 shares of common stock at $0.20 per share exercisable for a period of five years. The fair value of these warrants at the time they were granted was $92,143 calculated using Monte Carlo model. The debt discount recognized on date of note issuance of $86,250is being amortized over the term of the note. During the year ended December 31, 2019, the Company issued 900,000 shares of common shares to convert the principal amount of $17,301 and accrued interest of $9,199 of the convertible note. The balance of the liability, note and accrued interest was $69,269 as of December 31, 2019.

JSJ Investment Inc.

On January 15, 2019, the Company issued a convertible promissory note in the amount of $60,000, with an original issue discount of $3,000, convertible into common stock at the lower of $0.21 per share or a fixed conversion price of 65% multiplied by the lowest traded price of the common stock during the ten consecutive trading day period immediately preceding the notice of conversion. The note bears interest at 5% per annum and matures on January 15, 2020. The note bears interest at 5% per annum and matures on January 16, 2020. In connection with issuance of the note, the Company issued warrants to purchase 50,000 shares of common stock at $0.21 per share exercisable for a period of two years. The fair value of these warrants at the time they were granted was $7,327 calculated using Monte Carlo model. The debt discount recognized on date of note issuance of $60,000 of $42,224is being amortized over the term of the note. During the year ended December 31, 2019, the Company issued 1,101,346 shares of common shares to fully convert the principal amount of $60,000 and accrued interest of $1,981 of the convertible note.

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GS Capital Partners LLC

On January 23, 2019, the Company issued a convertible promissory note in the amount of $58,000, with an original issue discount of $5,000, convertible into common stock at a fixed conversion price of 60% of the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the notice of conversion. The note bears interest at 10% per annum and matures on January 23, 2020. The debt discount recognized on date of note issuance of $58,000 of $50,000 is being amortized over the term of the note. During the year ended December 31, 2019, the Company issued 182,699 shares of common shares to convert the principal amount of $6,004 and accrued interest of $436 of the convertible note. The Company made partial payments of $35,000 to repay the balance due on the convertible note in October 2019. The balance of the liability, note and accrued interest was $21,179 and the related unamortized discount was $3,536 as of December 31, 2019.

Crown Bridge Partners, LLC

On February 7, 2019, the Company issued a convertible promissory note in the amount of $45,500, with an original issue discount of $4,000, convertible into common stock at the lower of the lowest trading price within the prior twenty-five days of the note or a fixed conversion price of 50% multiplied by the lowest traded price of the common stock during the twenty-five consecutive trading day period immediately preceding the conversion date. The note bears interest at 12% per annum and matures on October 25, 2019. In connection with issuance of the note, the Company issued warrants to purchase 97,500 shares of common stock at $0.35 per share exercisable for a period of three years. The fair value of these warrants at the time they were granted was $59,069 calculated using Monte Carlo model. The debt discount recognized on date of note issuance of $45,500 is being amortized over the term of the note. During the year ended December 31, 2019, the Company issued 1,274,000 shares of common shares to convert the principal amount of $27,083 of the convertible note. The balance of the liability, note and accrued interest was $22,553 as of December 31, 2019.

Jefferson Street Capital LLC, Armada Investment Fund, BHP Capital NY #1

On April 8, 2019, the Company issued three convertible promissory notes in the amount of $38,500 for an aggregate amount of $115,500, convertible into common stock at the lower of the lowest trading price within the prior twenty days of the note or 60% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the conversion date. The notes bear interest at 8% per annum and mature on January 8, 2020. In connection with the issuance of the convertible notes, the Company granted warrants to purchase 225,000 shares of common stock at $0.35 exercisable for a period of five years. The fair value of these warrants at the time they were granted was $50,103 calculated using Monte Carlo model. The debt discount recognized on the date of notes issuance of $115,500 000 is being amortized over the term of the notes. During the year ended December 31, 2019, the Company issued 2,614,176 shares of common shares to convert the principal amount of $42,500 and accrued interest of $4,279 of the convertible notes. The balance of the liabilities, notes and accrued interest were $75,259 and the related unamortized discount was $2,911 as of December 31, 2019.

Power Up Lending Group#1

On July 19, 2019, the Company issued a convertible promissory note in the amount of $63,000, convertible into common stock at 61% multiplied by the lowest traded price of the common stock during the ten consecutive trading day period immediately preceding the conversion date. The note bears interest at 10% per annum and matures on July 19, 2020. The debt discount recognized on date of note issuance of $63,000 is being amortized over the term of the note. The balance of the liability, note and accrued interest was $65,796 and the related unamortized discount was $31,328 as of December 31, 2019.

Power Up Lending Group#2

On July 30, 2019, the Company issued a convertible promissory note in the amount of $43,000, convertible into common stock at 61% multiplied by the lowest traded price of the common stock during the ten consecutive trading day period immediately preceding the conversion date. The note bears interest at 10% per annum and matures on July 30, 2020. The debt discount recognized on the date of note issuance of $43,000 is being amortized over the term of the note. The balance of the liability, note and accrued interest was $44,791 and the related unamortized discount was $21,383 as of December 31, 2019.

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EMA Financial, LLC

On August 13, 2019, the Company issued a convertible promissory note in the amount of $60,000, with an original issue discount of $2,500, convertible into common stock at the lower of the lowest trading price within the prior ten days of the note or a fixed conversion price of 61% multiplied by the lowest traded price of the common stock during the ten consecutive trading day period immediately preceding the conversion date. The note bears interest at 10% per annum and matures on May 13, 2020. The debt discount recognized on date of note issuance of $60,000 is being amortized over the term of the note. The balance of the liability, note and accrued interest was $62,203 and the related unamortized discount was $19,708 as of December 31, 2019.

Jefferson Street Capital LLC, Armada Investment Fund, BHP Capital NY #2

On August 25, 2019, the Company issued three convertible promissory notes in the amount of $52,500 for an aggregate amount of $157,500, with an original issue discount of $2,500 for an aggregate amount of $7,500, convertible into common stock at the lower of the fixed price at $0.45 per share or 60% multiplied by the lowest traded price of the common stock during the fifteen consecutive trading day period immediately preceding the conversion date. The notes bear interest at 8% per annum and mature on May 25, 2020. In connection with the issuance of the convertible notes, the Company granted warrants to purchase 450,000 shares of common stock at $0.30 exercisable for a period of five years. The fair value of these warrants at the time they were granted was $96,858 calculated using Monte Carlo model. The debt discount recognized on date of notes issuance of $157,500 is being amortized over the term of the notes. The balance of the liabilities, notes and accrued interest were $161,850 and the related unamortized discount was $51,735 as of December 31, 2019.

William J. Bergeron

On August 5, 2019, the Company issued a convertible promissory note in the amount of $12,500, convertible into common stock at the fixed effective conversion price at $0.25 per share. The note bear interest at 8% per annum and mature on February 5, 2020. The note is not a derivative but is tainted due to the variable rate convertible debt outstanding. The debt discount recognized on date of note issuance of $12,500 is being amortized over the term of the note. The balance of note and accrued interest was $12,905 and the related unamortized discount was $4,106 as of December 31, 2019.

GS Capital Partners LLC #2

On October 8, 2019, the Company issued a convertible promissory note in the amount of $58,000, with an original issue discount of $5,000, convertible into common stock at a fixed conversion price of 60% of the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the notice of conversion. The note bears interest at 10% per annum and matures on October 8, 2020. The debt discount of $58,000 recognized on the date of note issuance is being amortized over the term of the note. The balance of the liability, note and accrued interest was $59,335 and the related unamortized discount was $43,421 as of December 31, 2019.

Power Up Lending Group Ltd#3

On October 31, 2019, the Company issued a convertible promissory note in the amount of $38,000, convertible into common stock at 61% multiplied by the lowest traded price of the common stock during the ten consecutive trading day period immediately preceding the conversion date. The note bears interest at 10% per annum and matures on October 31, 2020. The debt discount recognized on the date of note issuance of $38,000is being amortized over the term of the note. The balance of the liability, note and accrued interest was $38,635 and the related unamortized discount was $28,448 as of December 31, 2019.

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David Nicholas

On November 26, 2019, the Company issued a convertible promissory note in the amount of $50,000, convertible into common stock at the fixed price at $0.25 per share at maturity date of the note on May 26, 2020. The note is not a derivative but is tainted due to the variable rate convertible debt outstanding. The debt discount recognized on date of note issuance of $409 is being amortized over the term of the note. The note bears interest at 5% per annum and mature on May 26, 2020. The debt discount of $409 recognized on the date of note issuance is being amortized over the term of the note. The balance of note and accrued interest was $50,252 and the related unamortized discount was $202 as of December 31, 2019.

David Nicholas#2

On December 27, 2019, the Company issued a convertible promissory note in the amount of $50,000, convertible into common stock at the lower of $0.01 per share or 51% of the ten-day average closing price from the date of conversion. The notes bears interest at 4% per annum and mature on January 27, 2021. The debt discount of $50,000 recognized on the date of note issuance is being amortized over the term of the note. The balance of note and accrued interest was $50,029 and the related unamortized discount was $38,413 as of December 31, 2019.

The Company has amortized $553,604 of the debt discount during the year ended December 31, 2019.

As of December 31, 2019 and December 31, 2018, the total balance of convertible notes plus accrued interest was $488,865 and $99,968, net of debt discount of $245,191 and $52,720, respectively.

Subscription Payable

During the year ended December 31, 2019 and the year ended December 31, 2018, the Company received $80,000 and $20,000 prepayment related to a future private placement offering. As of December 31, 2019 and December 31, 2018, the subscription payable was $100,000 and $20,000, respectively.

NOTE 5 – DERIVATIVE LIABILITIES

The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Monte Carlo model to calculate the fair value as of December 31, 2019.

The following table summarizes the derivative liabilities included in the balance sheet at December 31, 2019:

Fair Value Measurements Using Significant Observable Inputs (Level 3)

Balance - December 31, 2018	$	-
Addition of derivative liabilities upon issuance of convertible note and warrants as debt discount		772,463
Addition of new derivatives liabilities recognized as day one loss		930,369
Reduction of derivative liabilities from convertible notes to shares of common stock		(140,823	)
Loss (gain) on change in fair value of the derivative		(572,196	)
Balance - December 31, 2019	$	989,813

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The following table summarizes the loss on derivative liability included in the income statement for the year ended December 31, 2019 and 2018, respectively.

	Year Ended
	December 31,
	2019			2018
Day one loss due to derivative on convertible notes and warrants	$	(930,369	)	$	-
Gain on change in fair value of derivative liabilities on convertible notes and warrants		572,196			-
Loss on change in fair value of derivative liabilities	$	(358,173	)	$	-

NOTE 6 – ACQUISITIONS OF ASSETS

On June 18, 2019, the Company completed its acquisition of assets from AH Originals, Inc., a corporation controlled by the same owner group of Global Fiber Technologies, Inc., for the consideration of 6,400,000 shares of common stock to be issued, cash advances of $32,850 and the issuance of a promissory note of $447,150 bears 3% interest per annum and has a one-year term with eight options to extend the maturity date for three-month periods. Management did not consider the transaction to be a business combination due to the common control of AHO and the Company. The assets were recorded at the carrying value. The stock was recorded at is par value and the debt as its fair value. Management considered the 3% interest per the note to be below market and recorded a discount of $211,123.

The acquired assets and assumed liabilities from AH Originals, Inc. summarized as follows:

Assets Acquisition
Equipment	$	214,598
Inventory		60,815
Web Site		10,690
Patent		5,510
	$	291,613
Less Assumed Liabilities		16,336
	$	275,277

NOTE 7 – DISCONTINUED OPERATIONS

During 2014, the Company’s Leading Edge Fashions, LLC retail businesses, of which it owned 51%, was classified as discontinued operations. Based on the Company’s strategy to allocate resources to its businesses relative to their growth potential and those with the greater right to win in the marketplace, the Company determined that this business did not align with the Company’s long-term growth plans.

As of December 31, 2019 and December 31, 2018, current liabilities from discontinued operations includes $84,281 accounts payable.

During the year ended December 31, 2019 and December 31, 2018, the Company had no income or loss from discontinued operations.

NOTE 8 – RELATED PARTY TRANSACTIONS

During the year ended December 31, 2019, the Company’s President paid on behalf of the Company $16,175 of expenses and was repaid $110,036 through cash and $12,500 through the issuance of 50,000 shares of common stock valued at $0.25. During the year ended December 31, 2018, the Company settled $33,300 of advances by issuing to the president of the Company 222,000 shares of common stock valued at $0.15 per share. The President of the Company was owed $125,347 and $231,708 at December 31, 2019 and December 31, 2018, respectively.

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During the year ended December 31, 2019, the CEO and Director of the Company paid on behalf of the Company $10,122 of expenses and was repaid $34,999. The CEO and Director of the Company owed $789 and was owed and $23,588 at December 31, 2019 and December 31, 2018, respectively.

During 2016, the Company received loans from the CEO and a member of the board of directors totaling $284,900. In the year ended December 31, 2017, the Company received additional loans from these individuals in the amount of $160,650. The loans bear interest at 5% per annum and matured on June 30, 2017 and September 30, 2017. During the year ended December 31, 2017, $241,059 of the notes and interest was converted at approximately $0.19 for 580,000 common shares. The conversion of debt resulted in a gain on extinguishment of debt in the amount of $130,859 in the year ended December 31, 2017. The balance of these notes and accrued interest were $242,079 and $244,680 as of December 31, 2019 and December 31, 2018, respectively.

In March 2017, the Company loaned a related party $20,000. The loan bears interest at the rate of 5% per annum and has a term of six months. During the year ended December 31, 2017, $14,463 was repaid. During the year ended December 31, 2018, the loan balance of $5,936 was determined to be uncollectible and an allowance for doubtful accounts was set up for the full amount of the receivable.

NOTE 9- LEASES

As of December 31, 2019, the Company owns right-of-use assets under operating lease for an office premise of $46,971 and operating lease liabilities of $46,971.

	December 31, 2019
Operating lease ROU assets	$	46,971
Current portion of operating lease liabilities		46,971
Noncurrent portion of operating lease liabilities		-
Total operating lease liabilities	$	46,971

Information associated with the measurement of our remaining operating lease obligations as of December 31, 2019 is as follows:

Weight-average remaining lease term 0.75 years

Weighted-average discount rate 3.5%

Future minimum lease payments under operating leases that have initial non-cancelable lease terms in excess of one year at December 31, 2019 were as follows:

Year Ended December 31, 2020	$	47,520
Thereafter		-
Total operating lease payments	$	47,520
Less: Imputed interest		(549	)
Total operating lease liabilities	$	46,971

We had operating lease costs of $15,385 for the year ended December 31, 2019.

Our lease has remaining lease term of nine months.

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NOTE 10 – INCOME TAXES

The Company provides for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the statutory rate to the income tax amount recorded as of December 31, 2019 and 2018, are as follows:

	December 31,			December 31,
	2019			2018
Net operating loss carryforward	$	15,352,176		$	14,265,000
Effective tax rate		21	%		21	%
Deferred tax asset		3,223,957			2,995,650
Less: Valuation allowance		(3,223,957	)		(2,995,650	)
Net deferred asset	$	-		$	-

As of December 31, 2019, the Company had approximately $15.4 million in net operating losses (“NOLs”) that may be available to offset future taxable income, which begin to expire between 2029 and 2039. NOLs generated in tax years prior to December 31, 2017, can be carryforward for twenty years, whereas NOLs generated after December 31, 2017 can be carryforward indefinitely. In accordance with Section 382 of the U.S. Internal Revenue Code, the usage of the Company’s net operating loss carry forwards is subject to annual limitations following greater than 50% ownership changes. Tax returns for the years ended 2009 through 2019 are subject to review by the tax authorities.

NOTE 11 – COMMITMENTS AND CONTINGENCIES

On March 15, 2015 the Company entered into a trademark license agreement with True Beauty, LLC which controls the trademark EMME. EMME is a market pioneer and trusted voice of the “Full-Figured” market. Under this licensing agreement the Company has the right to design, produce and market the EMME® Activewear Collection. On April 13, 2016, the agreement was amended regarding the term and minimum royalties. The royalty expense was $0 for the year ended December 31, 2019. On June 5, 2017, the Company and True Beauty, LLC, entered into an agreement to terminate the agreement. The Company is required to make twelve repayments totaling $37,500 to resolve all amounts outstanding. For the year ended December 31, 2018, the Company entered into a settlement agreement with True Beauty, LLC which controls the trademark EMME. The Company paid $5,000 to settle all outstanding balances with True Beauty, LLC. As a result, the Company recorded gain on settlement of debt of $5,394.

As of the date of this filing, the Company is a party to three pending litigation matters. The Company does not believe it has any liability nor has it accrued any liability as of December 31, 2019 and December 31, 2018 for the following:

One matter is entitled Randazzo LLC v. Avani Holdings LLC & Global Fashion Technologies, Inc. This litigation was initiated by the plaintiff in order to evict Avani Holdings LLC from its rented premises in California and to recover unpaid rent. ECTX does not operate out of the premises in question and has never signed any leases or other documents with the plaintiff. A judgment of eviction was entered, but ECTX does not operate out of the premises in question and therefore did not appear in the matter to oppose the judgment of eviction. The plaintiff is also seeking unpaid rent in the amount of $26,595.

The second matter is entitled Patricia Witthuhn v. Global Fashion Technologies, Inc. This litigation was initiated by the plaintiff in order to collect wages allegedly due pursuant to her employment with Avani Holdings LLC. The Company never hired Ms. Witthuhn and never acquired Avani Holdings, LLC. Consequently, there is no legitimate cause of action against the Company. However, due to cash flow constraints, the Company is unable to hire outside counsel for this litigation. The amount being sought by the plaintiff is approximately $15,000.

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The third matter is entitled William Corso v. Global Fashion Technologies, Inc. This litigation was initiated by the plaintiff in order to collect wages allegedly due pursuant to his employment with Avani Holdings LLC. The Company never hired Mr. Corso and never acquired Avani Holdings, LLC. Consequently, there is no legitimate cause of action against the Company. However, due to cash flow constraints, the Company is unable to hire outside counsel for this litigation. The amount being sought by the plaintiff is approximately $40,000.

NOTE 12 – NET LOSS PER SHARE

Potentially dilutive securities are excluded from the calculation of net loss per share when their effect would be anti-dilutive. For all periods presented in the consolidated financial statements, all potentially dilutive securities have been excluded from the diluted share calculations as they were anti-dilutive as a result of the net losses incurred for the respective periods. Accordingly, basic shares equal diluted shares for all periods presented.

Potentially dilutive securities were comprised of the following:

	December 31		December 31,
	2019		2018
Warrants		1,150,363		112,238
Options		2,700,000		2,650,000
Convertible notes payable, including accrued interest		154,496,946		943,794
		158,347,309		3,706,032

NOTE 13 – SUBSEQUENT EVENTS

Subsequent to December 31, 2019 and through the date that these financials were made available, the Company had the following subsequent events:

The Company issued 1,225,093,348 shares of common stock to repay the principal amount and accrued interest of convertible notes.

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

There were no disagreements related to accounting principles or practices, financial statement disclosure, internal controls or auditing scope or procedure during the two fiscal years and interim periods.

Item 9A. Controls and Procedures

Evaluation Of Disclosure Controls And Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer (our chief executive officer), we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective such that the material information required to be included in our Securities and Exchange Commission reports is accumulated and communicated to our management, including our principal executive and financial officer, recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms relating to our company, particularly during the period when this report was being prepared.

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 Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for our company.

Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

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Under the supervision and with the participation of our president and our chief executive officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of December 31, 2019, based on the framework set forth in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our evaluation under this framework, management concluded that our internal control over financial reporting was not effective as of the evaluation date due to the factors stated below.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of evaluation date and identified the following material weaknesses:

Insufficient Resources: We have an inadequate number of personnel with requisite expertise in the key functional areas of finance and accounting.

Inadequate Segregation Of Duties: We have an inadequate number of personnel to properly implement control procedures.

Lack Of Audit Committee: We do not have a functioning audit committee resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.

Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel and (3) may consider appointing an audit committee members in the future.

Management, including our president and our chief executive officer, have discussed the material weakness noted above with our independent registered public accounting firm. Due to the nature of this material weakness, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.

Changes In Internal Controls Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the last fiscal quarter for our fiscal year ended December 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

All directors of our company hold office until the next annual meeting of the security holders or until their successors have been elected and qualified. The officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office. Our directors and executive officers, their ages, positions held, and duration as such, are as follows:

Name	Position Held with the Company	Age	Date First Elected or Appointed
Christopher H. Giordano	President and Director	65	August 4, 2010
Paul Serbiak	CEO, Treasurer and Director	63	February 26, 2015
Scott Todd	Director	63	January 23, 2017

Business Experience

The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee of our company, indicating the person’s principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.

Christopher A. Giordano – President and Director

Mr. Giordano is the owner of Birchwood Capital Advisors, LLC., which provides financial and business consulting services to small and medium size businesses primarily in the bankruptcy and work-out arenas. Birchwood was the manager of the Distressed Opportunities Fund, LP from the period of 1990 through 2001. The fund was a principal investor and or advisor to 37 Bankruptcies and Out of Court Restructurings. From 1980 through 1990, Mr. Giordano served as a Senior VP in the Asset Management division Paine Webber. Mr. Giordano formed and owned Manchester Rhone Securities, an NASD member firm which underwrote several IPO’s, until its sale in 1993.

Our company believes that Mr. Giordano’s professional background experience gives him the qualifications and skills necessary to serve as a director and officer of our company.

Paul Serbiak – CEO, Treasurer, Director and Secretary

Mr. Serbiak is currently a Managing Partner of Pure Systems Sustainable Product Technologies as well as CEO and founder of Ideas To Market First, LLC, an innovation practice that specializes in open innovation strategy and developing unused IP for corporate clients. Paul career includes serving as a Global Vice President at Johnson and Johnson as well as senior strategic roles at Procter & Gamble and Kimberly Clark.

Our company believes that Mr. Serbiak’s professional background experience gives him the qualifications and skills necessary to serve as a director and officer of our company.

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Scott Todd – Director

Mr. Todd has over 5 years as a senior licensing brand strategist with expertise in licensing, business development, retail development, sales and sales management with a track record of building successful brands and sustainable programs. A visionary with proficiency in creating strategic partnerships in diverse industries and across multiple categories. Able to convey ideas clearly yet forcefully, negotiate win-win business deals and maintain strong long-term relationships. A team builder focused on the bottom line. Can negotiate complex contracts and motivate a team of diverse talents and skill sets. He has 3 children living in New Jersey.

Our company believes that Mr. Todd’s professional background experience gives him the qualifications and skills necessary to serve as a director of our company.

Term of Office

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.

All officers and directors listed above will remain in office until the next annual meeting of our stockholders, and until their successors have been duly elected and qualified. There are no agreements with respect to the election of Directors. We have not compensated our Directors for service on our Board of Directors, any committee thereof, or reimbursed for expenses incurred for attendance at meetings of our Board of Directors and/or any committee of our Board of Directors. Officers are appointed annually by our Board of Directors and each Executive Officer serves at the discretion of our Board of Directors. We do not have any standing committees. Our Board of Directors may in the future determine to pay Directors’ fees and reimburse Directors for expenses related to their activities.

Employment Agreements

Other than as set forth below, we have no formal employment agreements with any of our directors or officers.

On December 30, 2016 we entered into an employment agreement with Paul Serbiak, our CEO and Treasurer, wherein Mr. Serbiak will begin to earn a salary upon our company receiving funding from a potential private placement, while also being granted both vested and incentive-based stock options. Specifically, the base salary for Mr. Serbiak shall initially be set at $90,000 per year, but has the potential to incrementally increase up to $200,000 per year based on the Company achieving certain revenue goals. Moreover, Mr. Serbiak’s contract provides for a minimum annual bonus of thirty-percent(30%) of his base salary, but gives the Company the discretion to award an annual bonus of up to three-hundred-percent(300%) of his base salary. As a signing bonus, Mr. Serbiak received 1,500,000 options to purchase shares of the Company’s common stock that are exercisable for a period of ten years at the market close price on December 31, 2016. In addition, Mr. Serbiak’s contract provides for up to ten incentive stock option awards of 1% of the shares of common stock outstanding $1,000,000 in net income received by the Company over the next ten years. Such options would be exercisable at the closing bid price for the ten days preceding the Company’s achievement of each award milestone.

On February 14, 2017, we entered into an employment agreement with Christopher Giordano, our President, wherein Mr. Giordano will begin to earn a salary upon our company receiving funding from a potential private placement, while also being granted both vested and incentive-based stock options. Specifically, his salary shall not be earned or payable until such time that the Company raises at least $2,000,000 in a private placement. The base salary for Mr. Giordano shall initially be set at $90,000 per year, but has the potential to incrementally increase up to $200,000 per year based on the Company achieving certain revenue goals. Moreover, Mr. Giordano’s contract provides for a minimum annual bonus of thirty-percent(30%) of his base salary, but gives the Company the discretion to award an annual bonus of up to two-hundred-percent(200%) of his base salary. As a signing bonus, Mr. Giordano received 250,000 options to purchase shares of the Company’s common stock that are exercisable for a period of five years at a strike price of $0.50 per share. In addition, Mr. Giordano’s contract provides for up to ten incentive stock option awards of 0.75% of the shares of common stock outstanding per $1,000,000 in net income received by the Company over the next ten years. Such options would be exercisable at the closing bid price for the ten days preceding the Company’s achievement of each award milestone.

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On December 5, 2018, we entered into an employment agree with Deep Shah, the Chief Technology Officer of one of our subsidiaries, EcoChain360, Inc, wherein Mr. Shah will begin to earn a salary upon our company receiving funding from a potential private placement, while also being granted both vested and incentive-based stock options. Specifically, his salary shall not be earned or payable until such time that the Company raises at least $1,000,000 in its upcoming private placement. In addition, Mr. Shah shall be issued 500,000 Fibre Tokens of EcoChain 360, Inc. as a signing bonus. There is no current market for Fibre Tokens, however, Mr. Shah and the Company agreed the value of the signing bonus was $25,000, which was accrued as of December 31, 2018.

Family Relationships

There are no family relationships between any of our directors, executive officers and proposed directors or executive officers.

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.	been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences);

	2.	had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

	3.	been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;

	4.	been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

	5.	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 (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, 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 any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

	6.	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.

Compliance with Section 16(A) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our shares of common stock and other equity securities, on Forms 3, 4 and 5, respectively. Executive officers, directors and greater than 10% shareholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports they file.

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Based solely on our review of the copies of such forms received by our company, or written representations from certain reporting persons that no Form 5s were required for those persons, we believe that, during the fiscal year ended December 31, 2019, all filing requirements applicable to our officers, directors and greater than 10% beneficial owners as well as our officers, directors and greater than 10% beneficial owners of our subsidiaries were complied with, with the exception of the following:

Name	Number of Late Reports		Number of Transactions Not Reported on a Timely Basis		Failure to File Requested Forms

Christopher Giordano⁽²⁾		1		1		1
Scott Todd⁽¹⁾		1		1		1

_________

(1)	The insider has yet to file a Form 3, Initial Statement of Beneficial Ownership.

(2)	The insider has yet to file a Form 4, Statement of Changes in Statement of Beneficial Ownership.

Code of Ethics

We have adopted a Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions. Our Code of Ethics is designed to deter wrongdoing and promote: (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (ii) full, fair, accurate, timely and understandable disclosure in reports and documents that we file with, or submit to, the SEC and in our other public communications; (iii) compliance with applicable governmental laws, rules and regulations; (iv) the prompt internal reporting of violations of our Code of Ethics to an appropriate person or persons identified in the code; and (v) accountability for adherence to our Code of Ethics. We will provide any person without charge a copy of our code of ethics upon receiving a written request which may be mailed to our office at 50 Division Street, Suite 501, Somerville, New Jersey 08876.

Board and Committee Meetings

Our board of directors held no formal meetings during the year ended December 31, 2019. All proceedings of the board of directors were conducted by resolutions consented to in writing by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the Nevada General Corporate Law and our Bylaws, as valid and effective as if they had been passed at a meeting of the directors duly called and held.

Nomination Process

As of December 31, 2019, we did not effect any material changes to the procedures by which our shareholders may recommend nominees to our board of directors. Our board of directors does not have a policy with regards to the consideration of any director candidates recommended by our shareholders. Our board of directors has determined that it is in the best position to evaluate our company’s requirements as well as the qualifications of each candidate when the board considers a nominee for a position on our board of directors. If shareholders wish to recommend candidates directly to our board, they may do so by sending communications to the president of our company at the address on the cover of this annual report.

Audit Committee

Currently our audit committee consists of our entire board of directors. We do not have a standing audit committee as we currently have limited working capital and minimal revenues. Should we be able to raise sufficient funding to execute our business plan, we will form an audit, compensation committee and other applicable committees utilizing our directors’ expertise.

Audit Committee Financial Expert

Currently our audit committee consists of our entire board of directors. We do not currently have a director who is qualified to act as the head of the audit committee.

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Item 11. Executive Compensation

The particulars of the compensation paid to the following persons:

	(a)	our principal executive officer;

	(b)	each of our two most highly compensated executive officers who were serving as executive officers at the end of the years ended December 31, 2019 and 2018; and

	(c)	up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the years ended December 31, 2019 and 2018, who we will collectively refer to as the named executive officers of our company, are set out in the following summary compensation table, except that no disclosure is provided for any named executive officer, other than our principal executive officers, whose total compensation did not exceed $100,000 for the respective fiscal year:

SUMMARY COMPENSATION TABLE

Name and Principal Position

Year

Salary ($)

Bonus ($)

Stock Awards ($)

Option Awards ($)

Non-Equity Incentive Plan Compensa-tion ($)

Change in Pension

Value and Nonqualified Deferred Compensa-tion Earnings

($)

All

Other Compensa-tion

($)

Total ($)

Christopher Giordano

2019

Nil

President, Treasurer and Director

2018

Nil

11,700

Nil

11,700

Paul Serbiak

2019

Nil

CEO and Secretary

2018

Nil

Scott Todd

2019

Nil

Director

2018

Nil

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive share options at the discretion of our board of directors in the future. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that share options may be granted at the discretion of our board of directors.

Grants of Plan-Based Awards

The Company has yet to formally adopt an equity compensation plan. However, stock options were granted during the fiscal year ended December 31, 2019.

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Option Exercises and Stock Vested

During our fiscal year ended December 31, 2019, there were no options exercised by our named officers.

Compensation of Directors

The Company has not compensated any Board members for their participation on the Board and does not have any standard or other arrangements for compensating them for such services. The Company may issue shares of common stock or options to acquire shares of the Company’s common stock to members of the Board in consideration for their services as members of the Board. The Company does expect to reimburse Directors for expenses incurred in connection with their attendance at meetings of the Board.

Pension, Retirement or Similar Benefit Plans

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.

Indebtedness of Directors, Senior Officers, Executive Officers and Other Management

None of our directors or executive officers or any associate or affiliate of our company during the last two fiscal years, is or has been indebted to our company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.

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

The following table sets forth, as of April 13, 2021, certain information with respect to the beneficial ownership of our common and preferred shares by each shareholder known by us to be the beneficial owner of more than 5% of our common and preferred shares, as well as by each of our current directors and executive officers as a group. Each person has sole voting and investment power with respect to the shares of common and preferred stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common and preferred stock, except as otherwise indicated.

Name	Number of Common Shares Beneficially Owned			Percentage of Common Class	Number of Preferred Shares Beneficially Owned		Percentage of Preferred Class

Christopher Giordano		5,152,859	(1)(2)	*		200,000		100	%

Paul Serbiak		550,000		*		0	*

Scott Todd		0		*		0	*

Officers & Directors as a group (3 persons)		5,702,859		*		200,000		100	%

Michael Rosenbaum		2,335,990	(3)	*		0	*

____________

* Represents less than 1%

(1) Christopher Giordano beneficially owns 200,000 shares of Class B Preferred Stock, which is 100% percent of the outstanding shares in the class. The Class B Preferred shareholders vote together with the common stock as a single class and the holders of Class B Preferred are entitled to 10,000 votes per share.

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(2) Includes: (a) 3,005,715 shares of Common Stock held by Birchwood Capital Advisors, LLC, of which Christopher H. Giordano has voting and dispositive control, (b) 13,072 shares of Common Stock held by Bella Capital Holdings, (c) 16,572 shares of Common Stock held by Isabella Giordano, and (d) 67,500 shares on the Company’s books as due and issuable to Christopher H. Giordano as of December 31, 2016.

(3) Includes shares of Common Stock held by Maj-Britt Rosenbaum.

Changes in Control

We are unaware of any contract or other arrangement or provisions of our Articles or Bylaws the operation of which may at a subsequent date result in a change of control of our company. There are not any provisions in our Articles or Bylaws, the operation of which would delay, defer, or prevent a change in control of our company.

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

Except as disclosed herein, no director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since the year ended December 31, 2019, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year-end for the last three completed fiscal years.

Director Independence

We currently act with six directors, Frederick Andrieni, Michael A. Breen, Christopher H. Giordano, Simon Graj, Paul Serbiak and Scott Todd.

We have determined that Frederick Andrieni, Michael A. Breen, Simon Graj and Scott Todd are independent directors, as that term is used in Rule 4200(a)(15) of the Rules of National Association of Securities Dealers.

Currently our audit committee consists of our entire board of directors. We currently do not have nominating, compensation committees or committees performing similar functions. There has not been any defined policy or procedure requirements for shareholders to submit recommendations or nomination for directors.

From inception to present date, we believe that the members of our audit committee and the board of directors have been and are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting.

Item 14. Principal Accounting Fees and Services

LJ Soldinger Associates LLC has served as the Company’s independent registered public accounting firm for years ended December 31, 2018 and December 31, 2017. Boyle CPA in New Jersey now serves as the Company’s independent registered public accounting firm for December 31, 2019. The aggregate fees billed for the most recently completed fiscal year ended December 31, 2019 and for fiscal year ended December 31, 2018 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:

	Year Ended
	December 31, 2019		December 31, 2018
Audit Fees	$	87,000	$	70,000
Audit Related Fees	Nil		Nil
Tax Fees	Nil		Nil
All Other Fees	Nil		Nil
Total	$	87,000	$	70,000

Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.

Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.

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PART IV

Item 15. Exhibits, Financial Statement Schedules

(a)	Financial Statements

		(1)	Financial statements for our company are listed in the index under Item 8 of this document.

		(2)	All financial statement schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements or notes thereto.

(b)	Exhibits

Exhibit Number	Description	Incorporated by Reference
		Form	Exhibit	Filing Date
(3)	(i) Articles of Incorporation (ii) Bylaws
3.1	Articles of Incorporation, as filed with the Nevada Secretary of State	SB-2	3.1	November 29, 2005
3.2	By-laws	SB-2	3.2	November 29, 2005
3.3	First Amended and Restated By-Laws of Premiere Publishing Group, Inc. dated December 14, 2007	8-K	3.1	December 12, 2007
3.4	By-Laws of Eco Tek 360, Inc. adopted February 14, 2017	8-K		February 22, 2017
(14)	Code of Ethics
14.1	Code of Ethics	10-KSB	14.1	April 14, 2008
(21)	Subsidiaries of Registrant
21.1	Trident Merchant Group, Inc., a Nevada corporation (wholly owned)
21.2	Progressive Fashions Inc., a Nevada corporation (wholly owned)
21.3	Leading Edge Fashion, LLC (majority owned)
21.4	Pure361, LLC (majority owned)
21.5	Eco Chain 360, Inc. (majority owned)
(31)	Rule 13a-14 (d)/15d-14d) Certifications
31.1*	Section 302 Certification by the Principal Executive Officer
31.2*	Section 302 Certification by the Principal Financial Officer and Principal Accounting Officer
(32)	Section 1350 Certifications
32.1**	Section 906 Certification by the Principal Executive Officer
32.2**	Section 906 Certification by the Principal Financial Officer and Principal Accounting Officer
101**	Interactive Data File
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema 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

______

* Filed herewith.

** Furnished herewith

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

		GLOBAL FIBER TECHNOLOGIES, INC.
		(Registrant)

Dated: April 21, 2021		/s/ Christopher Giordano
		Christopher Giordano
		President, and Director
		(Principal Executive Officer)

Dated: April 21, 2021		/s/ Paul Serbiak
		Paul Serbiak
		CEO, Treasurer, Director and Secretary
		(Principal Financial Officer and Principal Accounting Officer)

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

Dated: April 21, 2021		/s/ Christopher Giordano
		Christopher Giordano
		President, and Director
		(Principal Executive Officer)

Dated: April 21, 2021		/s/ Paul Serbiak
		Paul Serbiak
		CEO, Treasurer, Director and Secretary
		(Principal Financial Officer and Principal Accounting Officer)

Dated: April 21, 2021		/s/ Scott Todd
		Scott Todd
		Director

Global Fiber Technologies, Inc. - FORM 10-K - April 21, 2021

Attached files

Global Fiber Technologies, Inc. Reports