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, 20172019

OR

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

For the transition period from _______ to ________

Commission file number: 033-25126-D

HASH LABSCORO GLOBAL INC.

Formerly Tech Town Holdings, Inc. and Medefile International, Inc.

(Exact name of registrant as specified in its charter)

Registrant'sRegistrant’s telephone number, including area code: (561) 295-1990888-879-8896

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:
None

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

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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit 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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 Act). Yes ☐  No ☒

As of June 30, 2017,2019, the aggregate market value of the voting and non-voting common equity held by non-affiliates was approximately $473,685$21.7 million. 

As of May 10, 2018,April 9, 2020, there were 18,451,27724,355,746 shares of common stock, par value $0.0001 per share, issued and outstanding.

HASH LABSCORO GLOBAL INC.

TABLE OF CONTENTS 

PART I

This report may contain forward-looking statements. Investors are cautioned that such forward-looking state to all comments are based on our management'smanagement’s beliefs and assumptions and on information currently available to our management and involve risks and uncertainties. Forward-looking statements include statements regarding our plans, strategies, objectives, expectations and intentions, which are subject to change at any time at our discretion. Forward-looking statements include our assessment, from time to time of our competitive position, the industry environment, potential growth opportunities and the effects of regulation. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “hopes,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss many of these risks in greater detail in “Risk Factors.” Given these uncertainties, youundue reliance should not place undue reliancebe placed on these forward-looking statements. Also, forward-looking statements represent our management'smanagement’s beliefs and assumptions only as of the date of this report. You should read this report and the documents that we reference in this report and have filed as exhibits to the report completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

As used in this Annual Report on Form 10-K and unless otherwise indicated, the terms “we,” “us,” “our,” “Hash Labs,“Coro,” or the “Company” refer to Hash LabsCoro Global Inc. and its subsidiary. Unless otherwise specified, all dollar amounts are expressed in United States dollars

ITEMItem 1. BUSINESSBusiness.

Our Corporate History Overview

The CompanyCoro Global Inc. is a Nevada corporation that was originally formed on November 1, 2005 when Bio-Solutions International, Inc. (“Bio-Solutions”) entered into an Agreement and Plan of Merger with OmniMed Acquisition Corp., a Nevada corporation and a wholly-owned subsidiary of Bio-Solutions, OmniMed International, Inc. (“OmniMed”) and the shareholders of OmniMed. Pursuant to the agreement, Bio-Solutions acquired all of the outstanding equity stock from the OmniMed shareholders. As a result, the OmniMed shareholders assumed control of Bio-Solutions and changed the name of the Company to OmniMed International, Inc., effective November 21, 2006. On January 17, 2006, OmniMed changed its name to MedeFile International, Inc. The Company’s business following the closing of this acquisitionagreement was the sale of an Internet-enabled Personal Health Record (iPHR) system for gathering, digitizing, maintaining, accessing and sharing an individual’s medical records, and in connection therewith, providing a professional service specializing in HIPAA compliant retrieval, reproduction and release of information. Under this service, Company personnel gowent onsite to physicians’ officeoffices weekly to reproduce the records requested by third parties.

OnIn October 25, 2017, the Companyname of the Company was changed its name to Tech Town Holdings, Inc, effective November 2, 2017.

The name change to Tech Town Holdings, Inc. was intended to reflect a new business strategy centered on identifying and fostering new or early stage business opportunities being aggressively fueled by digital reinvention and innovation. To that end, our business-building platform was segmented into six focused categories, for which we planned to advance numerous technology development projects:

However, following closerFollowing close scrutiny of the newemerging business opportunities, we were exploring in late 2017, coupled with our evaluation of market trends, and growth dynamics in their respective categories, wethe Company determined that a more prudent strategy was to narrow ourits focus working instead on capitalizing on global growth opportunities in a single industry category. At this time, we continue to evaluate prevailing opportunities for our Company and anticipate determining a focused course of action in mid-2018. In Januaryfinancial technology, also known as Fintech. Effective March 2, 2018, the Company’sCompany changed its name was changed to Hash Labs Inc Inc. and effective January 9, 2020, the Company changed its name to Coro Global Inc.

Products and Services

The Company is developing financial technology products and solutions that use distributed ledger technologies for improved security, speed, and reliability.

We also continuehave not yet commenced sales of any current products. We have developed or are developing the following planned products:

1. Coro is a global money transmitter that will allow customers to provide a professional service specializing in HIPAA compliant retrieval, reproductionsend, receive, and release of informationexchange currencies faster, cheaper and more securely. We believe Coro will be the world’s first global payment application that includes gold, which is the primary sourceoldest and most trusted currency. We will offer Coro through Coro Corp., a subsidiary of revenueCoro Global Inc., which will operate pursuant to both Federal and State money transmission regulations. Coro Corp has already registered as a money service business with the US Treasury department and is in the process of filing for multiple state money transmission licenses throughout the Company.US. Coro Corp. is already pursuing licensure in all U.S. States. Following licensure and launch in the US, the Company will pursue money transmission licenses in foreign countries such as Mexico and Canada. Coro’s technology facilitates money transmission and exchange with faster speeds, better security, and lower costs than existing options in the marketplace. At launch Coro will provide the ability to send, receive and exchange U.S. dollars and gold. The exchange rate between U.S. dollars and gold is transparent and set by the London Bullion Market Association and the global banks that are market makers in foreign currency exchange. Coro Corp. will operate as a money transmitter under 31 CFR § 1010.100(ff)(5)(i)(A) and will not market or sell investments in gold. The initial development of Coro’s money transmission technology and mobile application functionality is now complete. Coro is now undergoing an intensive phase of integrations and testing. We anticipate commercial launch of Coro in the second quarter of 2020.

Plan2. Financial Crime Risk Management (FCRM) platform – We believe there are currently two problems with anti-money laundering/know your customer (or AML/KYC) solutions. The first problem is that the laws and compliance regulations have increased faster than compliance officers have been able to respond. The result is a bottle-neck, slowing global financial transactions. Onboarding new clients of Operationsfinancial institutions is both complex and difficult. Once onboarded the ongoing monitoring of transactions for suspicious activity has become an even greater challenge. The technology industry has been rushing to provide solutions to meet compliance requirements. Unfortunately, most of the compliance solutions offered are fragmented and inefficient. Even the best solutions only excel at one element of the AML/KYC process. With this need in mind we are developing our FCRM platform, an integrated AML/KYC onboarding and transaction monitoring solution that provides an affordable and fully integrated compliance solution for compliance departments that meet the rigorous demands of government regulators, while supporting customers. We anticipate launching FCRM as a stand-alone product during late 2020.

AsCoro Money Transmitter Business

Coro is a mobile application that will allow customers to send and receive U.S. dollars (USD) or gold (XAU). Coro will operate on a private permissioned network which insures the highest level of security and compliance.

In order to use Coro customers will be required to pass an identity verification and stringent anti-money laundering/know-your customer (or AML/KYC) check, to prevent bad actors from joining and assist in ensuring regulatory compliance. Our FCRM platform will manage onboarding, screening and monitoring of Coro’s customers.

Coro will provide its customers with the datebenefits of this annual report, ourspeed, security, transparency, and ease of use, as well as the opportunity to transact in dollars or gold on the fastest DLT on the market.

The Company has not entered into any definitive agreement with any party regarding any specific business opportunities for our Company. In our efforts to analyze business opportunities, webelieves Coro will considersolve the following factors:two important problems:

Coro will maintain two custody accounts to facilitate the flow of funds. One custody account will be maintained by the independent vaulting custodian for storage of users’ physical gold. The Coro users’ gold will be fully insured at all times. The balance of the users’ custody account will be represented in XAU, the International Organization of Standardization’s currency code for gold. The second custody account will be a U.S. dollar account held at a FDIC insured US Bank. The balance of the U.S. dollar account will be represented in USD, the International Organization of Standardization’s currency code for U.S. dollars.

Customers who download the Coro app and pass the verification process will be able to:

Coro operates as a licensed money transmitter company by allowing users of its mobile app to send and receive monetary value in two formats: U.S. dollars (USD) and physical gold.

Coro Process

The Coro platform will operate as follows:

Both sender and receiver must enroll and complete an AML/KYC process to become users of the Coro app. A sender must first fund their USD account by transferring funds from their personal bank account to Coro’s custodial bank account via ACH.

Legal rights

Coro users will have direct ownership of their allocated gold as follows. Such gold ownership will be effected contractually through bailment with the vault custodian. Bailment is the act of placing property in the custody and control of another, by an agreement in which the holder (bailee) is responsible for the safekeeping and return of the property. In bailment law, ownership and possession of the gold are split and they merge at the moment of delivery. Coro’s users have a bailor/bailee relationship with the custodian for the storage of their physical gold. Coro users (bailors) have ownership of the gold and the gold vault custodian (bailee) has authorized possession of the gold.

Coro users will only buy allocated gold with direct ownership. Gold bars are allocated and identifiable for Coro users inside independent custody vault. The gold belongs to the users and is their absolute property. This is evidenced by:

Coro Gold Ownership

When a Coro customer purchases gold through the Coro mobile payment application, the Coro user becomes the legal owner of the gold. Coro instantly routes gold purchase transactions through a gold dealer. Within the Coro app, customers’ dollars are exchanged for an equivalent amount of gold at the prevailing spot rate. Coro’s spot rate is derived from the CME and the LBMA, plus Coro’s fee. Gold purchased by the customer is identified and evidenced by a serial number, or otherwise identified and evidenced with a specific identifier in accordance with the methods used by the auditors of the independent gold vaulting custodian, such as with SKUs/bar codes, and then allocated within Coro’s custody account with the independent gold vaulting custodian. The independent vaulting custodian maintains a bailment arrangement with Coro’s customers, so that the customers have direct ownership of their gold at all times. The Coro customers gold is fully insured by the vaulting custodian. The vaulting custodian will have a daily record of each customer’s gold holdings. Allocated gold is, by definition, unencumbered. In the event of Coro’s dissolution or failure, Coro’s customers would not risk becoming creditors of the company since their ownership of their gold is direct. Coro and the independent vaulting custodian maintain an inventory list of the allocated customer gold which is updated in real time and reconciled daily. The Coro user’s gold inventory will be physically counted weekly and audited by an independent auditor on a quarterly basis. The customer’s gold ownership is also recorded, confirmed and evidenced on Coro’s accounting ledger and shared with the independent vaulting custodian. Coro and the gold vaulting custodian have the right of substitution within the allocated gold. Right of substitution means that when a customer withdraws their gold, Coro and the gold vaulting custodian may choose which gold to provide the customer, thus the serial number at purchase may be different than the serial number at withdrawal. Right of substitution makes the logistics of gold storage, deposit and withdrawal more pragmatic and is the primary method used for the independent safe custody of all commodities.

Government Regulation

In the US, Money Transmission activities are strictly regulated both at federal level by FinCEN and at the state level by financial institution regulators. Registration with FinCEN is mandatory for all money transmitters and state regulators impose strict requirements to obtain and maintain a license to operate in their jurisdiction. In addition, state regulations covering money transmission provide enhanced protections for the consumers in case of fraud or bankruptcy and require regular examination and review of licensees’ activities.

Coro Corp. is registered with and regulated by FinCEN, a bureau of the U.S. Department of the Treasury. FinCEN regulates Coro Corp. as both a Money Services Business (MSB) and a Dealer in Precious Metal. As a regulated financial institution, Coro Corp. must assess the money laundering risk involved in its transactions, and implement an anti-money laundering program to mitigate such risk. In addition, the company must comply with recordkeeping, reporting, and transaction monitoring requirements under FinCEN regulations 

As a registered Money Services Business, Coro Corp. is required to be licensed in the states where it operates. Coro Corp is in the process of obtaining individual money transmission licenses state-by-state in the jurisdictions where it plans to provide its service. In addition to an application process that includes providing a detailed business plan and criminal and financial background check on all officers and controlling parties of the applying company, licensed money transmitters are subjected to strict requirements such as providing annual audited financial statements, filing quarterly reports, and maintaining at all times a minimum net worth and a surety bond approved by the Commissioner. Due to its main office being located in the State of Florida, Coro filed an initial application for Money Transmitter license (FT2) with the Florida Office of Financial Regulations on October 4, 2019 and obtained its license on March 18, 2020. Coro filed license applications for two additional states on March 12, 2020 which are currently under review by the respective state banking departments. We are also in the process of completing license applications for eight additional states.

The CFTC does not regulate Coro Corp. because Coro Corp. only transacts with physical gold in the spot market when buying or selling gold for its customers. The Commodity Exchange Act (CEA), grants the CFTC exclusive jurisdiction over the regulation of futures contracts, option contracts and leverage contracts, but this authority specifically does not extend to “deferred” or “forward” delivery contracts which are essentially “cash transactions providing for later delivery of the underlying commodity.”

To prevent fraud and illegal activities at Coro’s money transmission business, the Company plans to:

The Company has hired a chief compliance officer to develop and manage the Company’s compliance program.

Coro Revenue Model

We anticipate that Coro customers will be charged (i) a 0.5% annual custody and storage fee on their XAU balances, (ii) a 0.5% fee to exchange USD for XAU or exchange XAU for USD, (iii) a 0.5% fee for sending XAU to other Coro customers and (iv) a 0.5% (plus shipping and insurance) fee to exchange XAU for delivery of physical gold. We will needcollect and charge such fees from Coro customers.

Coro Business Milestones

The Company began development of Coro’s mobile application, database, infrastructure and the associated distributed private permissioned network, in September of 2018. The Coro technology and DLT network development process included 28 design and development stages, knowns as “sprints.” To date, all 28 Coro development sprints have been accomplished. The Coro mobile application is now undergoing an aggressive quality assurance testing phase. This testing phase includes both robust functionality and security testing with third party testing experts. Coro’s distributed ledger network has already been activated with an initial 12 nodes. Testing and quality assurance are underway on the Coro mobile application and private permissioned node network. To date, the Company has paid more than $1,500,000 for the development of its private permissioned distributed ledger network and the Coro money transmission business. The Company anticipates during the second quarter of 2020, the Company will finalize testing and quality assurance in prelude to raise fundslaunching the Coro money transmission business. The Company anticipates that it will incur another approximately $150,000 in testing and development costs associated with preparation for commercial launch of Coro mobile application, which the Company will pay from its working capital. Following the commercial launch of Coro in late Q2 of 2020, we anticipate incurring approximately $100,000 additional costs to complete and launch the FCRM as a stand-alone product. The Company anticipates paying such expenses from its working capital.

The Company continues to rely upon both employees and contractors to develop and launch Coro. Coordination of the design and development has been led by the Company’s Chief Executive Officer, who has coordinated the Company’s technology development resources and team of consultants. The Company intends to increase its technology development team during 2020, as it continues to improve the functionality and performance of Coro, post launch.

Hashgraph License

Coro is built on a new generation of distributed ledger technology (DLT) utilizing the Hashgraph consensus algorithm, (“Hashgraph”). We believe Hashgraph is superior to the current generation of DLT. Hashgraph is owned by Swirlds, Inc., (“Swirlds”). In December 2018, we entered into a software license agreement with Swirlds to license Hashgraph.

DLT is disrupting and transforming existing markets in multiple industries. However, we believe there are five fundamental obstacles to be overcome before distributed ledger technologies can be widely accepted and adopted across every industry and geography. These obstacles are:

Performance: The technology is built on Hashgraph, which provides near-perfect efficiency in bandwidth usage and consequently can process upwards of 500,000 transactions per second. To put the speed of our operatingnetwork in perspective its estimated that Visa’s network handles approximately 35,000 transactions per second.

Security: Hashgraph achieves the highest standard for security in the field of distributed consensus: asynchronous Byzantine Fault Tolerance (aBFT). Other networks that use coordinators, leaders, or communication timeouts tend to be vulnerable to Distributed Denial of Service (DDoS) attacks against those vulnerable areas. Hashgraph is resilient to these types of attacks and investing cash needs. We have no committed sourcesachieves the theoretical limits of capitalsecurity. Achieving this level of security at scale is a fundamental advance in the field of distributed systems as it is the gold standard for security in this category.

Stability: Hashgraph relies on both technical and therelegal controls to ensure the stability of the networks. This system prevents forking and illegal modifications of the algorithm.

Regulatory Compliance: The Hashgraph technical framework includes an Opt-In Escrow Identity mechanism that gives customers a choice to bind verified identities to otherwise anonymous accounts, which is no assurance wedesigned to provide governments with the oversight necessary to ensure regulatory compliance. This is optional, and each user will be able decide what kinds of credentials, if any, to raise capitalreveal. Hashgraph intends to work with governments to provide the same level of protection in distributed public ledgers as is currently present in the financial system.

Hashgraph accomplishes being fair, fast, efficient, inexpensive, timestamped, and DoS resistant.

Our Hashgraph private-permissioned network provides the strongest foundation for Coro. We believe it will enable Coro to achieve unprecedented speed with fractional cost per transaction, all while maintaining bank-grade security.

Marketing and Sales Strategy

The Company’s target market for Coro consists of three groups: individuals, institutions and governments.

Initially, our marketing efforts will focus on terms acceptable to us,individuals in U.S. states including Florida, Nevada and Texas, as well as states such as Utah, Wyoming, and Oklahoma where state laws recognize gold as money. Customers will have the choice of sending or at all. Duringreceiving gold (XAU) or U.S. dollars (USD) or exchanging between the next 12 months we anticipate incurring costs related to developing our new business, filing of Exchange Act reports and other costs associated with being a public company. Although we believetwo currencies.

Eventually we will be ableexpand such marketing efforts to meet these costs through funds to be loaned by or invested in us by our stockholders or other investors, we can provide no assurance such fundsinclude institutional and governmental markets. Currently, the Company is analyzing key trends and related secondary information that will be available to us.compliment and aid defining its market opportunities and customer needs.

Using a combination of qualitative and quantitative methods, the Company conducted an extensive research and discovery to set success metrics, recognize future growth initiatives, develop audience profiles, and assess the competition landscape and market conditions.

Under the Company’s marketing and sales strategy, the Company has taken the following steps:

The Company’s integrated marketing and sales strategy is divided in 2 phases:

Launch Strategy: Our launch strategy includes the following:

Our goal is to create a “surround sound” marketing campaign to reach and engage the target audience, build the contact list, as well as generate excitement and brand awareness before the launch. We plan to utilize:

Growth Strategy: Our growth strategy in the development phase. Under our growth strategy, we will aim to secure sustainable growth of Coro1’s customer base through viral methods, paid, earned, shared and owned media, effective customer service management, and seamless application onboarding.

Employees

As of May 10, 2018,April 9, 2020, we have two2 full-time employees. We consider our relationship with our employees to be good.

Corporate Information

Our principal executive offices are located at 78 SW 7^th Street, Miami, FL 33130, and our telephone number is 888-879-8896. Our website address is https://coro.global. Information on our website is not part of this report.

ITEMItem 1A. RISK FACTORSRisk Factors.

An investment in the Company’s common stock involves a high degree of risk. In determining whether to purchaseOur business, operating results and financial condition could be harmed and the Company’s commonvalue of our stock an investor should carefully consider allcould go down as a result of the material risksrisk factors described below, together with the other information contained in this report before makingbelow. This means shareholders could lose all or a decision to purchase the Company’s securities. An investor should only purchase the Company’s securities if he or she can afford to suffer the losspart of his or her entiretheir investment.

RISKS RELATED TO OUR BUSINESSRisks Related to Our Business

We have a limited operating history under our current business focus, and we may not succeed.

We have a limited operating history, of operating losses,in particular under our current business focus, and we may not succeed. We are subject to all risks inherent in a developing business enterprise. You should consider, among other factors, our prospects for success in light of the risks and uncertainties encountered by companies that, like us, are in their early stages. For example, unanticipated expenses, problems, and technical difficulties may occur and they may result in material challenges to our business. We may not be able to successfully address these risks and uncertainties or successfully implement our operating strategies. If we fail to do so, such failure could materially aversively affect our business, financial conditions and results of operation. We may never generate significant revenues or achieve profitability.

We may not succeed in developing or maintain profitability in the future.generating sales of our products.

We incurredhave not yet generated revenues from any current products. The development of the Company’s products is a netcostly, complex, and time-consuming process, and investments in product development often involve a long period of time until completed and a return, if any, can be achieved on such an investment. We may face difficulties or delays in the development and commercialization of our products, which could result in our inability to timely offer products or services that satisfy the market. We have been making and anticipate making significant investments in developing our products, but such an investment is inherently speculative and requires substantial capital expenditures. Any unforeseen technical obstacles and challenges that we encounter in the development process could result in delays in, or the abandonment of, the development and launch of, or ability to generate revenue. Further, once we complete development of a product, there is no assurance we will succeed in generating sales from such product. We may not succeed in launching or generating sales of Coro products.

The Company may encounter significant competition and may not be able to successfully compete.

There are many financial technology companies developing money transmission products, and more competitors are likely to arrive. Some of our competitors have considerably more financial resources than us, and the backing of traditional large financial institutions. As a result, we may not be able to successfully compete in our market, which could result in our failure to launch Coro, or otherwise fail to successfully compete. There can be no assurances that we will be able to compete successfully in this environment.

The distributive ledger technology on which the Company’s products may rely may be the target of malicious cyberattacks or may contain exploitable flaws in its underlying code, which could result in security breaches and the loss or theft of funds. If such attacks occur or security is compromised, this could expose us to liability and reputational harm and could seriously curtail the utilization of Coro, resulting in customers reducing their use of Coro, or stopping their use of Coro altogether.

The structural foundation, the software applications and other interfaces or applications upon which Coro may rely or that they will be built upon are unproven, and there can be no assurances that such planned products and the creating, transfer or storage of data and funds will be uninterrupted or fully secure, which could result in impermissible transfers, and a complete loss of $1,316,356, fora customer’s data and funds. Coro may be subject to a cyberattack, software error, or other intentional or negligent act or omission that results in the year ended December 31, 2017. Astheft of December 31, 2017, wefunds, funds being lost, destroyed or otherwise compromised. Further, Coro (and any technology, on which they rely) may also be the target of malicious attacks from hackers or malware distributors seeking to identify and exploit weaknesses in the software, Coro which could result in the loss or theft of data and funds.  If such attacks occur or security is compromised, this could expose us to liability and reputational harm and could seriously curtail the utilization of Coro, resulting in customers reducing their use of Coro or stopping using Coro altogether, which could have an accumulated deficita material adverse effect on our business, financial condition and results of $30,251,465 and a stockholders’ deficit of $923,385. operations.

We may never achieve profitabilitynot be able to raise capital as needed to develop our products or generate significant revenues.maintain our operations.

We expect that we will need to raise additional capital.funds to execute our business plan and expand our operations. Additional financing may not be available to us on favorable terms, or at all. If we cannot raise needed funds on acceptable terms, the Company’s business and prospects may be materially adversely affected.

We may face risks of Internet disruptions, which could have an adverse effect on the use of our products.

A disruption of the Internet may affect the use of our products. Generally, our products are dependent upon the Internet. A significant disruption in Internet connectivity could disrupt network operations until the disruption is resolved.

Exchange rates are continuously changing and can be volatile. Coro customers will be exposed to this risk.

The price of gold is continuously changing and has exhibited periods of volatility throughout history. Customers that choose to maintain gold balances in XAU but have personal liabilities in USD will be exposed to this potential volatility and could incur significant gains or losses when converting from XAU back to USD. This may make Coro less appealing to prospective customers.

Coro will not be a market maker and thus will not guarantee a fixed bid/ask spread or guarantee that a bid or an ask will be available to customers. Coro will be reliant on the financial institutions with whom it interacts to facilitate its services.

Coro will be dependent upon the bid/ask spread as provided by large gold dealers and LBMA members. In times of market turbulence, it is possible that the bid/ask spread could widen significantly thus increasing the cost of transacting between XAU and USD. This may make Coro less appealing to prospective customers.

Changes in general economic and business conditions, internationally, nationally and in the markets in which we operate, could have an adverse effect on our business, financial condition, or results of operations.

Our operating results may be subject to factors which are outside of our control, including changes in general economic and business conditions, internationally, nationally and in the markets in which we operate. Such factors could have a material adverse effect on our business, financial condition, or results of operations.

In addition, disruptions in the credit and financial markets, declines in consumer confidence, increases in unemployment, declines in economic growth and uncertainty about earnings could have a significant negative impact on the U.S. and global financial and credit markets and the overall economy. Such events could have an adverse impact on financial institutions resulting in limited access to capital and credit for many companies. Furthermore, economic uncertainties make it very difficult to accurately forecast and plan future business activities. Changes in economic conditions, changes in financial markets, deterioration in the capital markets or other factors could have an adverse effect on the financial position, revenues, results of operations and cash flows of the Company and could materially adversely affect our business, financial condition and results of operations.

Our results of operations will significantly rely on our team of managers, advisors, and technical staff.

The successful operation and development of our business will be dependent primarily upon the operating and management skills of our managers, advisors, and technical staff. The loss of the services of any one of our key personnel, in particular our chief executive officer, J. Mark Goode, could have a material adverse impact on our ability to realize our objectives, including our ability to complete development of, launch and commercialize our planned products, which could have a material adverse effect on our business, financial condition and results of operations.

If we fail to protect our intellectual property and proprietary rights, we could lose our ability to compete.

Our intellectual property and proprietary rights are essential to our ability to remain competitive and successful in the development of our products and our business. We expect to rely on a combination of patent, trademark, copyright, and trade secret laws as well as confidentiality agreements and procedures, non-competition agreements, and other contractual provisions to protect our intellectual property, other proprietary rights, and our brand. Our intellectual property rights may be challenged, invalidated or circumvented by third parties. We may not be able to prevent the unauthorized disclosure or use of our technical knowledge or other trade secrets by employees or competitors. If we do not adequately protect our intellectual property or proprietary rights, our competitors could use it to enhance their products, compete against us, and take our market share. Our inability to adequately protect our intellectual property could adversely affect the Company’s business, financial condition and results of operations.

Other companies may claim that we infringe their intellectual property.

We have a working capital deficit of $925,364 as of December 31, 2017. We will need to raise additional capital to maintain and expand operations. In recent years we have been funded primarily through advances by our largest stockholder. We do not havebelieve that our technologies infringe, or will infringe, on the proprietary rights of any committed sourcesthird party, but claims of capitalinfringement are becoming increasingly common and there is no assurance additional capital willthird parties may assert infringement claims against us in the future. It may be availabledifficult or impossible to identify, prior to receipt of notice from a third party, the trade secrets, patent position or other intellectual property rights of a third party. If any of our products or services, such as Coro, if developed and launched, were found to infringe on terms acceptable to us, or at all. Any equity financings could result in dilution to our then-existing stockholders. Sources of debt financing may result in higher interest expense. Ifother parties’ proprietary rights and we are unable to raise sufficient additional capital,come to terms regarding a license with such parties, we will need to curtail or cease operations.

Our independent registered auditors have expressed substantial doubt about our ability to continue as a going concern.

The financial statements included in this report have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses from operations and has a net capital deficiency. These conditions raise operating and liquidity concerns and substantial doubt about the Company's ability to continue as a going concern.

We may engage in future acquisitions, which may be expensive and time consuming and from which we may not realize anticipated benefits.

We may acquire additional businesses, technologies andforced to modify our products if we determine that these additional businesses, technologies andto make them non-infringing or to cease to offer such products complement our existing business or otherwise serve our strategic goals. If we do undertake transactions of this sort, the process of integrating an acquired business, technology or product may result in operating difficulties and expenditures and may absorb significant management attention which would otherwise be available for ongoing development of our business. Moreover, we may never realize the anticipated benefits of any acquisition. Future acquisitions could result in potentially dilutive issuances of our securities, the incurrence of debt and contingent liabilities and amortization expenses related to intangible assets,altogether, which could adversely affect ourthe Company’s business, financial condition and results of operations and financial condition.operations.

RISKS RELATED TO OUR COMMON STOCKWe have an evolving business model.

As financial technologies become more widely available, we expect the services and products associated with them to evolve. In order to stay current with the industry, our business model may need to evolve as well. From time to time, we may modify aspects of our business model relating to our product mix and service offerings. Any such modifications we may make may not be successful and may result in harm to our business. We may not be able to manage growth effectively, which could damage our reputation, limit our growth and negatively affect our operating results.

An occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations.

The occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations. A pandemic typically results in social distancing, travel bans and quarantine, and this may limit access to our facilities, customers, management, support staff and professional advisors. These factors, in turn, may not only impact our operations, financial condition and development of our products but our overall ability to react timely to mitigate the impact of this event. Also, it may hamper our efforts to comply with our filing obligations with the Securities and Exchange Commission, and our ability to raise capital on favorable terms, or at all.

Risks Related to Our Common Stock

There is a minimalnot an active, liquid market for our common stock, whichand investors may makefind it difficult to buy and sell our shares.

Our common stock is not listed on any national securities exchange. Accordingly, investors may find it more difficult for shareholders to dispose of their shares.

Ourbuy and sell our shares than if our common stock was traded on an exchange. Although our common stock is quoted on the OTC Pink, under the symbol “HLAB”. However, thisit is an unorganized, inter-dealer, over-the-counter market which provides significantly less liquidity than the NASDAQ Capital Market or other national securities exchange, andexchange. Further, there is minimal reported trading in our common stock. These factors may have an adverse impact on the trading and price of our common stock.

BecauseThe market price of our common stock is not registered underlikely to be highly volatile and subject to wide fluctuations.

In the Exchange Act,event a more active market for common stock develops, we anticipate that the market price of our common stock will notbe highly volatile and could be subject to wide fluctuations in response to a number of factors that are beyond our control, including:

Our common stock has in the federal proxy rulespast been, and our directors, executive officesmay in the future be considered a “penny stock” and 10% beneficial holders will notthus be subject to Section 16 of the Exchange Act. In addition, our reporting obligations under Section 15(d) of the Exchange Actadditional sale and trading regulations that may be suspended automatically if we have fewer than 300 shareholders of record on the first day of our fiscal year.make it more difficult to buy or sell.

Our common stock, which is not registeredtraded on the OTC Pink has in the past been, and may in the future be considered a “penny stock.” Securities broker-dealers participating in sales of “penny stock” are subject to the “penny stock” regulations set forth in Rules 15g-2 through 15g-9 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we do not intend to register our common stock under the Exchange Act for the foreseeable future (provided that, we will register our common stock under the Exchange Act if we have, after the last day of our fiscal year, more than 500 shareholders of record who are not accredited investors (or more than 2,000 persons in total) and $10 million in assets, in accordance with Section 12(g) of the Exchange Act). As a result, although we are required to file annual, quarterly, and current reports pursuant to Section 15(d) of the Exchange Act, as long as our common stock is not registered under the Exchange Act, we are not subject to Section 14 of the Exchange Act, which, among other things, prohibits companies that have securities registered under the Exchange Act from soliciting proxies or consents from shareholders without furnishing to shareholders and filing with the Securities and Exchange Commission (“SEC”) a proxy statement and form of proxy complying with the proxy rules. In addition, so long as our common stock is not registered under the Exchange Act, our directors and executive officers and beneficial holders of 10% or more of our outstanding common stock will not be subject to Section 16 of the Exchange Act. Section 16(a) of the Exchange Act requires executive officers and directors, and persons who beneficially own more than 10% of a registered class of equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of common shares and other equity securities, on Forms 3, 4 and 5 respectively. Such information about our directors, executive officers, and beneficial holders will only be available through periodic reports we file under the Exchange Act or registration statements we file under the Securities Act.  Furthermore, so long as our common stock is not registered under the Exchange Act, our obligation to file reports under Section 15(d) of the Exchange Act will be automatically suspended if, on the first day of any fiscal year (other than a fiscal year in which a registration statement under the Securities Act has gone effective), we have fewer than 300 shareholders of record. This suspension is automatic and does not require any filing with the SEC. In such an event, we may cease providing periodic reports and current or periodic information, including operational and financial information, may not be available with respect to our results of operations. 

Our common stock is subject to the "Penny Stock" rules of the SEC and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

In order to approve a person's account for transactions in penny stocks, the broker or dealer must:

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:

Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock"“penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

We do not expectintend to pay dividends.

We have not paid cash dividends on our common stock and do not expect to do so for the foreseeable future. As a result, any return

We have paid no dividends on our sharescommon stock to date and we do not anticipate paying any dividends to holders of our common stock in the foreseeable future. While our future dividend policy will be dependbased on an increasethe operating results and capital needs of the business, we currently anticipate that we will retain any earnings to finance our future expansion and for the implementation of our business plan. Investors should take note of the fact that a lack of a dividend can further affect the market value of our common stock, and could significantly affect the value of any investment in the market price of our shares, which may not occur.Company.

TheOur articles of incorporation allow for our board to create new series of preferred stock without further approval by our stockholders, which could adversely affect the rights of the holders of our common stock may be impaired by the potential issuance of preferred stock.

Our boardBoard of directorsDirectors has the right, without stockholder approval,authority to fix and determine the relative rights and preferences of preferred stock. Our Board of Directors has the authority to issue up to 10,000,000 shares of our preferred stock with voting,without further stockholder approval. As a result, our Board of Directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend conversion, liquidation or other rights which could adversely affect the voting power and equity interest ofpayments before dividends are distributed to the holders of common stock which could be issued withand the right to more than one vote per share, and could be utilized asthe withdrawal of the shares, together with a method of discouraging, delaying or preventing a change of control. The possible negative impact on takeover attempts could adversely affectpremium, prior to the pricewithdrawal of our common stock. In addition, our Board of Directors could authorize the issuance of a series of preferred stock that has greater voting power than our common stock or that is convertible into our common stock, which could decrease the relative voting power of our common stock or result in dilution to our existing stockholders. Although we have no present intention to issue any shares of preferred stock or to create any series of preferred stock, we may create such series and issue such shares in the future.

Additional stock offerings in the future may dilute then-existing shareholders’ percentage ownership of the Company.

Given our plans and expectations that we will need additional capital and personnel, we anticipate that we will need to issue additional shares of common stock or securities convertible or exercisable for shares of common stock, including convertible preferred stock, convertible notes, stock options or warrants. The issuance of additional securities in the future will dilute the percentage ownership of then current stockholders.

Ownership of our common stock is highly concentrated.

Our executive officers, directors, and principal stockholders beneficially own an aggregate of approximately 88% of our outstanding common stock (see “Security Ownership of Certain Beneficial Owners and Management”). As a result, such principal stockholders will be able to exert significant control over the election of the members of our board of directors, our management, and our affairs, and other corporate transactions (such as mergers, consolidations, or the sale of all or substantially all of our assets) that are submitted to shareholders for approval, and their interests may differ from the interests of other stockholders.

ITEMItem 1B. UNRESOLVED STAFF COMMENTSUnresolved Staff Comments.

Not applicable.required for smaller reporting companies.

ITEMItem 2. PROPERTIESProperties.

We maintain our principalsub-lease, on a month-to-month basis under an arrangement with WeWork, office space located at 301 Yamato Road, Suite 1240, Boca Raton, Florida 33431.78 SW 7th Street, Miami, FL 33130. Our current monthly rent is approximately $1,200. We believe that our existingthese facilities are suitable and adequate to meet our current business requirements. Our monthly rent is $59.

ITEMItem 3. LEGAL PROCEEDINGSLegal Proceedings.

We are not currently party to any material legal proceedings, and our property is not the subject of any material legal proceedings.

ITEMItem 4. MINE SAFETY DISCLOSURESMine Safety Disclosures.

Not applicable.

PART II

ITEMItem 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock is quoted under the symbol “HLAB”“CGLO” on the OTC Pink tier of the OTC Markets. There is minimal trading activity in our common stock.

The following table sets forth, for the period indicated, the quarterly high and low per share bid prices per share of our common stock for each quarter during our last two fiscal years as reported on Nasdaq.com.

Because these are over-the-counter market quotations, these quotations reflect inter-dealer prices, without retail mark-up, markdown or commissions and may not represent actual transactions. There is currently no public trading market for our preferred stock.

As of May 10, 2018, we hadApril 9, 2020, there were approximately 1,0761,126 holders of record of our common stock.

Dividend Policy

The Company has never declared or paid any cash dividends on its common stock and does not expect to pay and any cash dividends for the foreseeable future.

Securities Authorized for Issuance Under Equity Compensation Plans

Recent Sales of Unregistered Securities

NoneNone.

Purchases by Issuer and Its Affiliates

None.

ITEMItem 6. SELECTED FINANCIAL DATASelected Financial Data.

This item is notNot required for smaller reporting companies.

ITEMItem 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSManagement’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described. This discussion should be read in conjunction with our Consolidated Financial Statements and the related notes included in Item 8 of this Form 10-K. This discussion contains forward-looking statements. Please see the explanatory note concerning “Forward-Looking Statements” in Part I of this Annual Report on Form 10-K and Item 1A. Risk Factors for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.

Results of Operations for the years ended December 31, 2019 and 2018

YEAR ENDED DECEMBER 31, 2017 COMPARED TO YEAR ENDED DECEMBER 31, 2016 

Revenues

Revenues for the year ended December 31, 20172019 totaled $42,030$0 compared to revenues of $33,125$6,485 during the year ended December 31, 2016.2018. The decrease of $6,485 is related to the Company’s shift in business. We generatepreviously generated revenues from professional service specializing in HIPAA compliant retrieval, reproduction and release of information. Under this service, Company personnel go onsite to physicians’ office weekly to reproduce the records requested by third parties.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the year ended December 31, 20172019 totaled $479,019,$3,835,548, an increase of $30,107$1,379,744 or approximately 6.7%56% compared to selling, general and administrative expenses of $448,912$2,455,774 for the year ended December 31, 2016. The increase was due mainly to2018. During the year ended December 31, 2019 consulting fees increased payroll, legalsignificantly. During the year ended December 31, 2019 the Company incurred stock compensation expense and consulting fees.

Impairmentsettlement of Asset

Impairmentderivative liability of Dino Might program$2,617,291 and $0, respectively, compared to $1,550,995 and $6,088, respectively for the year ended December 31, 20172018 which was $818,472.included in selling general and administrative expenses.

Amortization ExpensesDevelopment Expense

Amortization expenseDevelopment expenses for the year ended December 31, 20172019 totaled $5,614$997,620 compared to $0$962,063 for the year ended December 31, 2016. During2018. The Company began to incur significant development expense for its planned Coro product in the firstthird quarter of 2017,2018, which continued during the Company purchased website and domain names for a total of $17,845. Atyear ended December 31, 2017, the Domains Names were written off in the amount of $12,231.2019.

Interest Expense

Interest expense on convertible debentures for the years ended December 31, 2017 and 2016 was $1,768 and $11,606 respectively. The Company entered into two secured convertible debentures during the third quarter of 2013. The notes have a 10% annual interest rate.

Interest expense on promissory notes for the years ended December 31, 2017 and 2016, was $34,443 and $12,817 respectively. During the year ended December 31, 2017,2019 and 2018, was $17,211 and $606,527, respectively. Interest expense during the Company entered into several promissory notes with an annual interest rateyear ended December 31, 2018 included the amortization of 7%, with terms varying from four months to one year.$586,921 of beneficial conversion of convertible loans.

Other Expense

Loss on change in fair value of derivatederivative liabilities for the year ended December 31, 20172019 and 2018 was $6,839 compared to a gain of $6,500 for the year ended December 31, 2016.$0 and $6,088 respectively.

Net Loss

For the reasons stated above, our net loss for the year ended December 31, 20172019 was $1,316,356,($4,850,379) or $8.70($0.21) per share, an increase of $892,646,$826,412 or 21%, compared to net loss of $423,710,($4,023,967), or $2.95($0.26) per share, during the year ended December 31, 2016.2018.

FINANCIAL CONDITION

Liquidity and Capital Resources

As of December 31, 2017,2019, we had cash of $730,$470,800, which compared to cash of $13,118$223,576 as of December 31, 2016.2018. Net cash used in operating activities for the year ended December 31, 20172019 was $275,488.$2,194,996. Our current liabilities as of December 31, 2017 totaled $929,032; and2019 of $333,933 consisted of $235,589of: $153,551 for accounts payable and accrued liabilities, convertible debenture of $19,055, overdraft of $1,577,and note payable – related party of $653,405, and derivative liability of $19,406. We have negative working capital of $925,364 as of$180,382.

During the year ended December 31, 2017.2019 the Company entered into and closed subscription agreements with accredited investors pursuant to which the Company sold to the investors an aggregate of 482,000 shares of common stock, for a purchase price of $5.00 per share, and aggregate gross proceeds of $2,410,000. A related party advanced the Company $3,000 and was repaid $3,000. In February 2019, the Company issued a promissory note to Lyle Hauser (an adviser to the Company and its then-largest stockholder) in the principal amount of $110,000 with an original issue discount of $10,000. The note has a 0% interest rate and had an original maturity date of March 31, 2019, which has been extended to June 30, 2020. Following the maturity date, the note bears a 9% annual interest rate until paid in full. In April 2019, the Company repaid $50,000 of a convertible loan to a related party and exchanged the remaining $50,000 into 10,000 shares of common stock valued at $50,000.

The accompanying financial statements have been prepared contemplating a continuation of the Company as a going concern. The Company reported a net loss of $1,316,356Net cash used in operating activities for the year ended December 31, 2017 and had an accumulated deficit of $30,251,4652018 was $1,653,420. Our current liabilities as of December 31, 2017. We may not succeed in generating any cash flows in2018 of $709,891 consisted of: $223,067 for accounts payable and accrued liabilities, net convertible debenture – related party of $85,829, deferred compensation of $300,395, note payable – related party of $100,000, and derivative liability of $0.

From June 2018 to July 2018 the future from anticipated new business activities.Company entered into and closed subscription agreements with accredited investors pursuant to which the Company sold to the investors an aggregate of 3,030,303 shares of common stock, for a purchase price of $0.33 per share, and aggregate gross proceeds of $1,000,000. From August 2018 to September 2018, the Company entered into and closed subscription agreements with accredited investors pursuant to which the Company sold to the investors an aggregate of 866,666 shares of common stock for a purchase price of $1.00 per share, and aggregate gross proceeds of $866,666. The investors included JMG Horseshoe, LLC, which purchased 333,333 shares of common stock for a purchase price of $333,333. The managing member of JMG Horseshoe, LLC is J. Mark Goode, who is the Company’s chief executive officer. A related party converted $484,651 of convertible notes, accrued interest and preferred stock into common stock. The Company repaid two related parties a total of $101,935

We have no committed sources of capital. We have funded our operations in recent years primarily through loans from our principal stockholder. Weanticipate that we will need to raise additional capital to continue and expandexecute our operations. Webusiness plan, which may not be able to obtain additional capitalavailable on acceptable terms, or at all. If we raise funds through the sale of common stock or securities convertible into common stock, it may result in substantial dilution to our then-existing stockholders.

Off Balance Sheet Arrangements

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

Critical Accounting Policies and Estimates

Revenue Recognition

In May 2014,

Effective January 1, 2018, the FASB issued ASUCompany recognizes revenue in accordance with Accounting Standards Codification 2014-09, Revenue from Contracts with Customers (Topic 606), which amendedsupersedes the existing accounting standards for revenue recognition. ASU 2014-09 establishes principles for recognizingrecognition requirements in Topic 605, Revenue Recognition, and most industry-specific revenue uponrecognition guidance throughout the Industry Topics of the Accounting Standards Codification. The updated guidance states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the expected consideration receivedto which the entity expects to be entitled in exchange for those goods or services. In July 2015,The guidance also provides for additional disclosures with respect to revenues and cash flows arising from contracts with customers. The standard will be effective for the FASB deferred the effective date forfirst interim period within annual reporting periods beginning after December 15, 2017, (including interim reporting periods within those periods). The amendments may be applied retrospectively to each prior period (full retrospective) or retrospectively with the cumulative effect recognized as of the date of initial application (full retrospective). The Company will adopt ASU 2014-09 in the first quarter of 2018 and apply the full retrospective approach. Because the Company's primary source of revenues is from providing a professional service specializing in HIPAA compliant retrieval, reproduction and release of information, the Company doesadopted the standard using the modified retrospective approach effective January 1, 2018. The adoption of this guidance did not expect thehave a material impact on its consolidatedour financial statements to be material.

statements.

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities.

We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. While there are a number of significant accounting policies affecting our consolidated financial statements, we believe the following critical accounting policies involve the most complex, difficult and subjective estimates and judgments:

Revenue Recognition

Historically, the Company has generated revenue from licensing the right to utilize its proprietary software for the storage and distribution of healthcare information to individuals and affinity groups. For revenue from product sales, the Company recognizes revenue on four basic criteria which must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

Stock-Based Compensation

The Company accounts for all compensation related to stock, options or warrants using a fair value-based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company uses the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued using the market price of the stock on the date of the related agreement.

Impairment of long-lived assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, “Impairment or Disposal of Long-Lived Assets.” ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flow analysis or appraisals.

InflationRecently Issued Accounting Pronouncements

Our opinion is that inflation has not had,There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and isare not expected to have a material effectimpact on the Company’s financial position, results of operations or cash flows.

In February 2016, the FASB issued ASU 2016-02, Leases, which amended current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard was effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of this ASU did not have a material impact on our operations.balance sheet. 

Climate Change

Our opinion isManagement does not believe that neither climate change, nor governmental regulations related to climate change,any other recently issued but not yet effective accounting pronouncements, if adopted, would have had, or are expected to have, anya material effect on our operations.the accompanying financial statements.

Off-BalanceOff Balance Sheet Arrangements

At December 31, 2017, we did notWe currently have anyno off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenuerevenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

New Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) which amended the existing accounting standards for revenue recognition. ASU 2014-09 establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. In July 2015, the FASB deferred the effective date for annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods). The amendments may be applied retrospectively to each prior period (full retrospective) or retrospectively with the cumulative effect recognized as of the date of initial application (full retrospective). The Company will adopt ASU 2014-09 in the first quarter of 2018 and apply the full retrospective approach. Because the Company's primary source of revenues is from providing a professional service specializing in HIPAA compliant retrieval, reproduction and release of information, the Company does not expect the impact on its consolidated financial statements to be material.

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

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “Smaller Reporting Company,” we are notNot required to provide the information required by this Item.for smaller reporting companies.

Item 8. Financial Statements.

CORO GLOBAL INC.

CONTENTS

ITEM 8. FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

Hash Labs, Inc. (formerly Tech Town Holdings, Inc. and Medefile International,Stockholders of Coro Global Inc.)

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Hash Labs,Coro Global Inc. and its subsidiary (formerly Tech Town Holdings, Inc. and Medefile International, Inc.) (collectively, the “Company”)(the Company) as of December 31, 20172019 and 2016,2018, and the related consolidated statements of operations, changes in stockholders’ deficit,equity (deficit), and cash flows for the years then ended and the related notes (collectively referred to as the “financial statements”)financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20172019 and 2016,2018, and the results of theirits operations and theirits cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern Matter

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 toin the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raisesloss of $4,850,379 and an accumulated deficit of $39,125,811. These factors raise substantial doubt about itsthe Company's ability to continue as a going concern. Management’sManagement's plans in regard toconcerning these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the 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 audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

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

/s/ MaloneBailey, LLPLiggett & Webb, P.A.

www.malonebailey.com

Liggett & Webb, P.A.

Certified Public Accountants

We have served as the Company’s auditor since 2016.2019.

Houston, Texas

May 10, 2018Boynton Beach, Florida

April 13, 2020

Coro Global Inc.

(Formerly known as Hash Labs Inc.)

(formerly Tech Town Holdings, Inc.)

(formerly Medefile International, Inc.)

Consolidated Balance Sheets

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

Coro Global Inc.

(Formerly known as Hash Labs Inc.)

Consolidated Statements of Operations

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

Coro Global Inc.

(Formerly known as Hash Labs Inc.)

Consolidated Statements of Changes in Stockholders' Equity (Deficit)

For the Years Ended December 31, 2019 and 2018

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

Coro Global Inc.

(Formerly known as Hash Labs Inc.)

(formerly Tech Town Holdings, Inc.)

(formerly Medefile International, Inc.)

Consolidated Statements of OperationsCash Flows

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

Coro Global Inc.

(Formerly known as Hash Labs Inc.)

(formerly Tech Town Holdings, Inc.)Notes to the Audited Consolidated Financial Statements

(formerly Medefile International, Inc.)

Consolidated Statements of Changes in Stockholder’s Deficit

For theThe Years Ended December 31, 20172019 and 2016

The accompanying notes are an integral part of these consolidated financial statements.2018

Hash Labs, Inc.

(formerly Tech Town Holdings, Inc.)

(formerly Medefile International, Inc.)

Consolidated Statements of Cash Flows

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

Hash Labs, Inc.

(formerly Tech Town Holdings, Inc.)

(formerly Medefile International, Inc.)

Notes to the Consolidated Financial Statements

NOTE 1 — BUSINESS, GOING CONCERN AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements present the balance sheets, statements of operations, changes in stockholder’s deficit and cash flows of the Company. The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America.

Principle of Consolidation

The accompanying financial statements present on a consolidated basis the accounts of the Company and its wholly owned subsidiary. subsidiary, Coro Corp., which was organized in the State of Nevada on September 14, 2018.

All significant intercompany accounts and transactions have been eliminated in consolidation.

Nature of Business Operations

Our CompanyCoro Global Inc. (formerly known as Hash Labs Inc.) (the “Company”) is a Nevada corporation that was originally formed on November 1, 2005 when Bio-Solutions International, Inc. (“Bio-Solutions”) entered into an Agreement and Plan of Merger (withwith OmniMed Acquisition Corp., a Nevada corporation and a wholly-owned subsidiary of Bio-Solutions, OmniMed International, Inc. (“OmniMed”) and the shareholders of OmniMed. Pursuant to the Agreement, Bio-Solutions acquired all of the outstanding equity stock from the OmniMed shareholders. As a result, the OmniMed shareholders assumed control of Bio-Solutions and changed the name of the Company to OmniMed International, Inc., effective November 21, 2006. On January 17, 2006, OmniMed changed its name to MedeFile International, Inc. The Company’s business following the closing of this acquisition was the sale of an Internet-enabled Personal Health Record (iPHR) system for gathering, digitizing, maintaining, accessing and sharing an individual’s medical records, and in connection therewith, providing a professional service specializing in HIPAA compliant retrieval, reproduction and release of information. Under this service, Company personnel go onsite to physicians’ office weekly to reproduce the records requested by third parties.

In October 2017, the name ofOn September 14, 2018 the Company was changed to Tech Town Holdings, Inc. to reflectformed a new business strategy centeredwholly owned subsidiary Coro Corp. The Company is focused on identifying and fostering new or early stage business opportunities being aggressively fueled by digital reinvention and innovation. To that end, our business-building platform was segmented into six focused categories, for which we planned to advance numerous technology development projects:

However, following closer scrutiny of the new business opportunities we were exploring in late 2017, coupled with our evaluation of market trends and growth dynamics in their respective categories, we determined that a more prudent strategy was to narrow our focus, working instead on capitalizing ondynamic global growth opportunities in a single industry category. At this time, we continuethe financial technology, or Fintech industry. The Company is developing products and technology solutions for global payments and the financial industry. Effective January 9, 2020, the Company changed its name to evaluate prevailing opportunities for our Company and anticipate determining a focused course of action in mid-2018. In January 2018, the Company’s name was changed to Hash LabsCoro Global Inc. We also continue to provide a professional service specializing in HIPAA compliant retrieval, reproduction and release of information

Going Concern

The accompanying financial statements have been prepared contemplating a continuation of the Company as a going concern. However, the Company has reported a net loss of for the year ended December 31, 2017 and has negative working capital as of December 31, 2017.

The accompanyingconsolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company reported a net loss of $4,850,379 for the year ended December 31, 2019. The operating losses and working capital deficit raise substantial doubt about the Company’s ability to continue as a going concern.

We will need to raise additional capital in order to continue operations. The Company’s ability to obtain additional financing depends onmay be affected by the success of its growth strategy and its future performance, each of which is subject to general economic, financial, competitive, legislative, regulatory and other factors beyond the Company’s control.

We will need additional investments in order to continue operations. Additional investments are being sought, but we cannot guarantee that we willcapital may not be able to obtain such investments.available on acceptable terms, or at all. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms.

Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail or cease our operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. These financial statements do not include any adjustments that might arise from this uncertainty.

Cash and Cash Equivalents

For purposes of these financial statements, cash and cash equivalents includes highly liquid debt instruments with maturity of less than three months.

Concentrations of Credit Risk

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments with high credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit. Currently our operating account is notaccounts are approximately $8,000 above the FDIC limit.

Advertising

The Company follows the policy of charging the costs of advertising to expense as incurred. The Company incurred no$8,994 and $0, respectively for advertising costs for the years ended December 31, 20172019 and 2016.2018.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Property and Equipment

Property and equipment are stated at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives being 3 years up to 105 years.

Revenue Recognition

Computer and equipment costs consisted of the following:

Depreciation expense was $1,993 and $249, respectively for the years ended December 31, 2019 and 2018, respectively.

The Company generates revenue from licensing the right to utilize its proprietary software for the storage and distribution of healthcare information to individuals and affinity groups. For revenue from product sales,Revenue Recognition

Effective January 1, 2018, the Company recognizes revenue on four basic criteriain accordance with Accounting Standards Codification 2014-09, Revenue from Contracts with Customers (Topic 606), which must be met beforesupersedes the revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3)recognition requirements in Topic 605, Revenue Recognition, and most industry-specific revenue recognition guidance throughout the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed natureIndustry Topics of the selling pricesAccounting Standards Codification. The updated guidance states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the products deliveredconsideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also provides for additional disclosures with respect to revenues and cash flows arising from contracts with customers. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2017, and the collectabilityCompany adopted the standard using the modified retrospective approach effective January 1, 2018. The adoption of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.this guidance did not have a material impact on our financial statements.

Fair Value of Financial Instruments

Cash and Equivalents, Deposits In-Transit, Receivables, Prepaid and Other Current Assets, Accounts Payable, Accrued Salaries and Wages and Other Current LiabilitiesLiabilities.

The carrying amounts of these items approximated fair value.

Fair value is defined 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. To increase the comparability of fair value measures, Financial Accounting Standards Board (“FASB”) ASC Topic 820-10-35 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements).

Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

The application of the three levels of the fair value hierarchy under Topic 820-10-35 to our assets and liabilities as of December 31, 2017 and December 31, 2016 are described below:  

Derivative liability as of December 31, 20178 was $19,406, compared to $12,567 as of December 31, 2016.

Impairment of Long Lived Assets

In accordance with Accounting Standards Codification (“ASC”) 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets, long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. ASC 360-10 relates to assets that can be amortized and the life can be determinable. The Company reviews property and equipment and other long-lived assets for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the asset’s carrying amount to future undiscounted net cash flows the assets are expected to generate. Cash flow forecasts are based on trends of historical performance and management’s estimate of future performance, giving consideration to existing and anticipated competitive and economic conditions. 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 projected discounted future cash flows arising from the assets or their fair values, whichever is more determinable. At December 31, 2017,

Leases

In February 2016, the Company determined there wasFASB issued ASU 2016-02,Leases, which amended current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an impairment onasset that represents the Domain Name assets. Aslessee’s right to use, or control the use of, a result an impairment was recorded in the amount of $12,231. Additionally, an impairment was recognizedspecified asset for the Dino Might program inlease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the amountlessee accounting model. This standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of $818,422. The impairmentthis ASU did not have a material impact on both assets was due to limited to no cash flow expected to be generated.

our balance sheet.

Net Loss per Share

Basic and diluted loss per share amounts are computed based on net loss divided by the weighted average number of common shares outstanding.Convertible shares, if converted, totaling 4,5630 and 145,712,968 common shares, respectively were not included in the computation of diluted loss per share because the assumed conversion and exercise would be anti-dilutive for the year endingended December 31, 2017.2019 and 2018.

Management Estimates

The presentation of financial statements in conformity with generally accepted accounting principles 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 reported period. Actual results could differ from those estimates.

Stock Based Compensation

The Company accounts for employee compensation related to stock, options or warrants using a fair value-based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company accounts for nonemployee compensation related to stock, options or warrants using a fair value-based method whereby compensation cost is measured at the earlier of a commitment date or completion of services based on the value of the award and is recognized over the service period. The Company uses the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued using the market price of the stock on the measurement date.

Reclassifications

Certain 2018 balances have been reclassified in the 2019 financial statement presentation. The reclassification of accrued interest did not have any effect on the financial statements.

Recent Accounting Pronouncements

All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.

2. DEFERRED STOCK-BASED COMPENSATION - RELATED PARTY

Effective May 18, 2018, the Company appointed J. Mark Goode as the President and Chief Executive Officer of the Company. He was also appointed a member and Chairman of the Board of Directors of the Company.

The Company entered into an employment agreement on May 18, 2018 with Mr. Goode, which provides for an annual salary and certain other benefits. Pursuant to the employment agreement, Mr. Goode’s annual base salary is $96,000, which may increase to up to $216,000 upon Mr. Goode meeting certain milestones set forth in the employment agreement related to the Company’s performance and is subject to increases as set from time to time by the Board. Upon the execution of the employment agreement, Mr. Goode received 500,000 shares of common stock of the Company valued at $1,250,000 ($2.50 per share). Pursuant to the initial terms of the employment agreement, after one year of employment by the Company as the Chief Executive Officer, the Company agreed to issue to Mr. Goode additional shares of common stock of the Company equal to 1% of the outstanding shares of the Company at the time of such issuance; after two years of employment by the Company as the Chief Executive Officer, the Company agreed to issue to Mr. Goode additional shares of common stock of the Company equal to 1% of the outstanding shares of the Company at the time of such issuance; and after three years of employment by the Company as the Chief Executive Officer, the Company agreed to issue to Mr. Goode additional shares of common stock of the Company equal to 1% of the outstanding shares of the Company at the time of such issuance. As of December 31, 2018 the Company accrued $300,995 in accordance with ASC 718-10-55-65 for the portion earned as the terms of such an award do not establish an ownership relationship because the extent to which (or whether) the employee benefits from the award depends on something other than changes in the entity’s share price. Therefore, the awards should be accounted for as a liability award. ASC 718 requires that public companies measure share-based awards classified as liabilities at fair value at each reporting date. In accordance with 718-30-35-3, a public entity shall measure a liability award under a share-based payment arrangement based on the award’s fair value re-measured at each reporting date until the date of settlement. Compensation cost for each period until settlement shall be based on the change (or a portion of the change, depending on the percentage of the requisite service that has been rendered at the reporting date) in the fair value of the instrument for each reporting period.

On May 31, 2019, the Company entered into amendment no. 1 to the Company’s employment agreement with Mr. Goode. Pursuant to the amendment, the Company’s obligation to issue additional shares of common stock as compensation to Mr. Goode was amended, such that, the Company issued to Mr. Goode and his designee 750,000 shares of common stock upon execution of the amendment, and the Company will have no further obligation to issue to Mr. Goode shares under the employment agreement. The shares will be expensed over the term of the employment agreement. Mr. Goode will be required to return such 750,000 shares to the Company as follows:

InOn May 2014,31, 2019 the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) which amendedCompany recorded the existing accounting standards for revenue recognition. ASU 2014-09 establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. In July 2015, the FASB deferred the effective date for annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods). The amendments may be applied retrospectively to each prior period (full retrospective) or retrospectively with the cumulative effect recognized asreclassification of the datederivative liability of initial application (full retrospective).$2,162,408 for the issuance of these share to additional paid in capital and common stock. The Company will adopt ASU 2014-09 inrecorded $687,003 for the first quarteradditional value of 2018 and apply the full retrospective approach. Becausecommon stock for the Company’s primary sourcevesting of revenues is from providing a professional service specializing in HIPAA compliant retrieval, reproduction and releasethe award during the year ended December 31, 2019. As of information,December 31, 2019 the Company does not expectunvested amount of the impact on its consolidated financial statements to be material.awards was $900,598.

2.3. NOTES PAYABLE – RELATED PARTY

On July 15, 2016, the Company issued a 7% promissory note to a significant shareholder in the principal amount of $100,000. The note had an initial one-year term. On April 9, 2019, the maturity date of the note was extended to June 30, 2019.  On April 12, 2019, the Company entered into an exchange agreement with The Vantage Group Ltd. (“Vantage”), which held the note, pursuant to which Vantage exchanged a portion of this note, in the amount of $50,000, for 10,000 newly issued shares of common stock of the Company. The Company repaid the remaining balance of $50,000. Vantage is owned by Lyle Hauser, an adviser to the Company and its then-largest stockholder.

The changes in this note payable to related party are reflected in the following at December 31, 2019 and 2018:

On January 14, 2019, the Company entered into an exchange agreement with Lyle Hauser. Pursuant to the exchange agreement, Mr. Hauser exchanged an outstanding convertible promissory note of the Company in the aggregate amount of $70,382 (including accrued interest) held by Mr. Hauser for a new non-convertible promissory note of the Company in the principal amount of $70,382. The new note had an original maturity date of March 31, 2019, which has been extended to June 30, 2020 (see Note 10), and bears interest at the rate of 7% per year, due upon maturity. As of December 31, 2019, the note had a balance of $70,382 and accrued interest of $5,438.

On January 14, 2019 the Company entered into an exchange agreement with Vantage. Pursuant to the exchange agreement, Vantage exchanged the remaining amount due on a convertible promissory note of the Company, equal to $17,780 (including accrued interest) held by Vantage for a new non-convertible promissory note of the Company in the principal amount of $17,780. The new note had an original maturity date of March 31, 2019, which has been extended to December 31, 2019, and bears interest at the rate of 7% per year, due upon maturity. Accrued interest at December 31, 2019 amounted to $1,245. The Company repaid note in full on November 19, 2019.

On February 28, 2019, the Company issued a promissory note in the principal amount of $110,000 to Lyle Hauser with an original issue discount of $10,000, for a purchase price of $100,000. The note has a 0% interest rate until maturity and had an original maturity date of March 31, 2019, which has been extended to June 30, 2020. Following the maturity date, the note bears a 9% annual interest rate until paid in full. As of December 31, 2019, the note had a balance of $110,000.

During the year ended December 31, 2016,2018, the Company entered into eight unsecured 7% Promissory Notes with a significant shareholder totaling $222,000.repaid $3,220 to the then-CEO, and borrowed an additional $75. During the year ended December 31, 2018 the remaining amount of $3,145 was repaid. The advances carried a 0% interest rate and were to be repaid when funds were available.

 The Company evaluated the modification under ASC 470-50 and concluded the deletion of the conversion qualifies for debt modification which triggered debt extinguishment; however, there was no impact to the income statement as there was no unamortized discounts or other fees paid on the under the prior debt terms.

4. INTELLECTUAL PROPERTY

In September 2017, the Company entered into seventeen additional unsecured 7% Promissory Notes totaling $215,500. The notes mature fourand closed an asset purchase agreement with Vantage. Pursuant to twelve monthsthe asset purchase agreement, the Company purchased from issuanceVantage a software application referred to as Dino Might and total $437,500.related intellectual property. As consideration for the purchase, the Company issued to Vantage 7,000 shares of newly created Series C Preferred Stock, valued at $820,451, and granted to Vantage a revenue sharing interest in the Dino Might asset pursuant to which the Company agreed to pay to Vantage, for the Company’s 2017 fiscal year and the following nine years, 30% of the revenue generated by the Dino Might asset. In 2017 the Company recognized an impairment loss of $818,472, on the transaction based on the future discounted cash flows over the next three years. As of December 31, 2017, $300,000 of2019, the notes wereDino Might asset balance was $1,979.

Intellectual property is stated at cost. When retired or otherwise disposed, the related carrying value and accumulated amortization are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in default.earnings. Minor additions and renewals are expensed in the year incurred.

The changes in these notes payable to related party consisted of the following during the years ended December 31, 2017 and 2016:5. EQUITY

On July 15, 2016,September 29, 2017, the Company filed a Certificate of Designation of Series C Preferred Stock with the Secretary of State of Nevada (the “Series C Certificate of Designation”). The Company authorized 7,000 shares of preferred stock as Series C Preferred Stock. The Company issued 7,000 shares of Series C Preferred Stock on September 29, 2017. All outstanding shares of Series C Preferred Stock were converted to common stock in April 2018. No shares of Series C Preferred Stock are outstanding as of December 31, 2019 and December 31, 2018, and no such shares may be re-issued.

On May 18, 2018, the Company appointed J. Mark Goode as the new President and Chief Executive Officer of the Company, effective May 18. 2018. He was also appointed a member and Chairman of the Board of Directors of the Company. The Company entered into an employment agreement on May 18, 2018 with Mr. Goode, which provides for an annual salary and certain other benefits. Pursuant to the employment agreement, Mr. Goode’s annual base salary is $96,000, which may increase to up to $216,000 upon Mr. Goode meeting certain milestones set forth in the employment agreement related to the Company’s performance and is subject to increases as set from time to time by the Board. Upon the execution of the employment agreement, Mr. Goode was issued 500,000 shares of common stock of the Company valued at $1,250,000 ($2.50 per share).

On April 3, 2018, the Company entered into an unsecuredexchange agreement with Vantage. Pursuant to the exchange agreement, Vantage exchanged outstanding promissory notes of the Company in the aggregate principal amount of $518,225 (including accrued interest) held by Vantage for a new convertible promissory note of the Company in the principal amount of $518,225. The convertible note bore interest at the rate of 7% Promissory Notesper year and was convertible into shares of common stock of the Company at a conversion price of $0.027.  The Company recorded a debt discount of $518,225 for the fair value of the beneficial conversion feature.

On April 3, 2018, the Company entered into an exchange agreement with Lyle Hauser. Pursuant to the exchange agreement, Mr. Hauser exchanged outstanding promissory notes of the Company in the aggregate principal amount of $68,969 (including accrued interest) held by Mr. Hauser for a new convertible promissory note of the Company in the principal amount of $68,969. The convertible note bore interest at the rate of 7% per year and was convertible into shares of common stock of the Company at a conversion price of $0.0005. The Company recorded a debt discount of $68,696 for the fair value of the beneficial conversion feature.

On April 3, 2018, the Company issued an aggregate of 9,300,000 shares of common stock to Vantage upon the conversion of (i) $241,650 of Vantage’s convertible note and (ii) 7,000 shares of Series C Preferred Stock. In connection with the conversion, Vantage waived any dividends owed to Vantage as the holder of the Series C Preferred Stock.

On April 6, 2018, the Company issued an aggregate of 9,000,000 shares of common stock upon the conversion of a convertible note in the principal amount (including accrued interest) of $243,000.

On June 29, 2018 a significant shareholder inforgave the amountamounts owed under a debenture. The Company recorded a capital contribution of $100,000.$19,999. The note hasCompany recorded a one-year term and was in default ascapital contribution of December 31, 2017.

The changes in these notes payable to related party consisted of the following$35,294 during the yearsyear ended December 31, 2017 and 2016:2018 for the extinguishment of the derivative. See Note 6.

On June 29, 2018, two related parties forgave a total of $239,000 of accrued compensation. The amounts have been recorded as a capital contribution.

During the year ended December 31, 2017,2018, the Company entered into five unsecured 7% Promissory Notessubscription agreements with investors pursuant to which the Company sold an aggregate of 3,896,969 shares of the Company’s common stock, for an aggregate purchase price equal to $1,866,667. The closing of these subscription agreements has occurred. Of the 3,896,969 common share issued, JMG Horseshoe, LLC, purchased 333,333 shares of common stock for a significant shareholder totaling $65,500. Aspurchase price of December 31, 2017, $65,500 was in default.$333,333. The managing member of JMG Horseshoe, LLC is J. Mark Goode, who is the Company’s chief executive officer

The changes in these notes payableOn April 12, 2019, the Company entered into an exchange agreement with Vantage pursuant to related party consistedwhich Vantage exchanged a portion of an outstanding promissory note of the following duringCompany held by Vantage, in the year ended December 31, 2017:amount of $50,000, for 10,000 newly issued shares of common stock of the Company.

During the year ended December 31, 2017,2019 the Company borrowedsold a total of $4,275 from482,000 shares of common stock in private placements for $2,410,000 ($5.00 per share).

On May 3, 2019, the CEOCompany issued 20,000 shares of common stock valued at $100,000 ($5.00 per share) fair market value, pursuant to an investor relations agreement, and agreed to pay $2,500 per months for a variety of services, including investor and public relations assessment, marketing surveys, investor support, and strategic business planning. The agreement had an initial term of six months, and renewed automatically for one additional six month term. In August 2019 the agreement was amended such that no additional compensation will be owed for the renewal term.

On May 31, 2019, the Company entered into amendment no. 1 to the Company’s employment agreement with J. Mark Goode, the Company’s chief executive officer and director. Pursuant to the amendment, the Company’s obligation to issue additional shares of common stock as compensation to Mr. Goode was amended, such that, the Company issued to Mr. Goode and his designee 750,000 shares of common stock upon execution of the Company; total expenses paid directly byamendment, and the CEOCompany will have no further obligation to issue to Mr. Goode shares under the employment agreement. Mr. Goode will be required to return such 750,000 shares to the Company as follows:

On May 31, 2019 the Company recorded the reclassification of the derivative liability of $2,162,408 for the issuance of these share to additional paid in capital and common stock. The Company was $3,200. Duringrecorded $687,003 for the additional value of the common stock for the vesting of the award during the year ended December 31, 2017, the Company repaid $4,330 to the CEO, and the amount due to the CEO was $3,145 as2019. As of December 31, 2017. The advance carries 0% interest rate and is to be paid when funds become available.
2019 the unvested amount of the awards was $900,598.

Other Related Party Transaction

Michael Delin, a director ofOn October 23, 2019, the Company provides accounting services to the Company through an entity he owns. During the years ended December 31, 2017 and December 31, 2016, the Company paid Mr. Delin $9,500 and $22,500 for such services.

3. CONVERTIBLE DEBENTURE – RELATED PARTY

The Company entered into two 10% Secured Convertible Debentures with a significant shareholder in the amount of $50,000 on November 4, 2013 and $60,000 on December 17, 2013. The debentures carry a one-year term and are convertible into common stock at conversion price equal to the lower of $400.00 or 80% of the previous day’s closing price. $40,000 of the note was converted and $70,000 was repaid as of December 31, 2015. Convertible accrued interest remained outstanding under this note of $19,055 and $17,287 as of December 31, 2017 and 2016, respectively.

The changes in these outstanding convertible notes payable to related party consisted of the following during the years ended December 31, 2017 and 2016:

4. DERIVATIVE LIABILITIES

In connection with certain securities purchase agreements entered into during the third quarter of 2011 and the second quarter of 2012, the Company granted warrants with ratchet provisions. The warrants expired four years from the date of grant. During the first two years of grant, if the Company were to issue any additionalissued 12,500 shares of common stock valued at $68,875 ($5.51 per share) fair market value, pursuant to a price per share less than the exercise price in effect, the exercise price would be adjusted to equal the average price per share received by the Company for the additional shares issued. After the first two years following the issuance date, if the Company were to issue any additional shares of common stock at a price per share less than the exercise price in effect, the exercise price would be adjusted using a formula based on the existing exercise price, the outstanding shares before and after the issuance of such shares, and the average price during the issuance of such shares. In addition to the exercise price adjustment, the number of shares upon exercise of the warrants was also subject to adjustment.

Upon grant, the Company assesses the fair value of the warrants using the Black Scholes pricing model and records a warrant liability for the value. The Company then assesses the fair value of the warrants quarterly based on the Black Scholes Model and increases or decreases the warrant liability to the new value, and records a corresponding gain or loss (see below for variables used in assessing the fair value).

Due to the ratchet provisions, the Company treats the warrants as a derivative liability in accordance with the provisions of ASC 815 “Derivatives and Hedging” (ASC 815). ASC 815 applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative and to any freestanding financial instruments that potentially settle in an entity’s own common stock.

These warrants expired during 2016 resulting in a derivative gain of $1,271. The fair value of the derivative liability associated with these warrants was $1,271 as of December 31, 2015.

As noted above, the Company entered into two 10% Secured Convertible Debentures with a significant shareholder, one in the amount of $50,000 on November 4, 2013 and the other in the amount of $60,000 on December 17, 2013. The debentures carry a one-year term and are convertible into common stock at a conversion price equal to the lower of $400.00 or 80% of the previous day’s closing price.consulting agreement.

The Company assesses the fair value of the convertible debenture using the Black Scholes pricing model and records a derivative liability for the value. The Company then assesses the fair value of the warrants quarterly based on the Black Scholes Model and increases or decreases the liability to the new value and records a corresponding gain or loss (see below for variables used in assessing the fair value).

Due to the variable conversion rates, the Company treats the convertible debenture as a derivative liability in accordance with the provisions of ASC 815 “Derivatives and Hedging” (ASC 815). ASC 815 applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative and to any freestanding financial instruments that potentially settle in an entity’s own common stock. The fair value of the conversion options was determined using the Black-Scholes Option Pricing Model and the following significant assumptions during the yearsyear ended December 31, 2017 and 2016: 2018.

The change in fair value of the conversion option derivative liability consisted of the following during the yearsyear ended December 31, 2017 and 2016:2018:

Change in fair market value of conversion option liability resulted in a loss of $6,839$6,088 for the year ended December 31, 2017 and a gain of $5,229 for the year ended December 31, 2016.2018.

5. INTELLECTUAL PROPERTY7. COMMITMENTS AND CONTINGENCIES

In January 2017, the Company purchased a website and two domain names including the intellectual property. In March 2017, the Company purchased two additional domain names. The Company has purchased a website and domain names for a total purchase price of $17,845. Amortization expense for the year ended December 31, 2017 totaled $5,614 compared to $0 for the year ended December 31, 2016. As of December 31, 2017, the domain names were written off in the amount of $12,231.

In September 2017,On August 3, 2018 the Company entered into a master services agreement with REQ a Washington, DC-based creative and closed an asset purchase agreement (the “Asset Purchase Agreement”) with The Vantage Group Ltd., a significant shareholder (“Vantage”). Pursuant to the Asset Purchase Agreement, the Company purchased from Vantage a software application referred to as Dino Might and related intellectual property. As consideration for the purchase, the Company issued to Vantage 7,000 shares of newly created Series C Preferred Stock, valued at $820,451, and granted to Vantage a revenue sharing interest in the Dino Might assetdigital marketing agency, pursuant to which the Company agreedengaged REQ to pay to Vantage, for the Company’s 2017 fiscal yeardevelop a branding and the following nine years, 30% of the revenue generated by the Dino Might asset. The Company has recognized an impairment loss of $818,472, on the transaction based on the future discounted cash flows over the next three years.

Intellectual property is stated at cost. When retired or otherwise disposed, the related carrying value and accumulated amortization are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. Minor additions and renewals are expensed in the year incurred. The properties will be depreciated over their estimated useful lives being 3 years.

6. EQUITY

On September 29, 2017, the Company filed a Certificate of Designation of Series C Preferred Stock with the Secretary of State of Nevada (the “Series C Certificate of Designation”). The Company authorized 7,000 shares of preferred stock as Series C Preferred Stock. The Company issued 7,000 shares of Series C Preferred Stock. The Series C Preferred Stock is convertible into common stock at a conversion ratio determined by dividing the Series C Original Issue Price of $100 per share by the conversion price of $2.00 (such that each share of Series C Preferred Stock is convertible into 50 shares of common stock). The Series C Preferred Stock will vote on an as-converted basis with the common stock, and in the event any dividends are paid on the common stock, the Series C Preferred Stock will be entitled to dividends on an as-converted basis. If a Distribution Event (as defined in the Series C Certificate of Designation) occurs, the Company will pay to the holders of Series C Preferred Stock $30,000 for every $120,000 received from such Distribution Event, and the number of outstanding shares of Series C Preferred Stock will be reduced by an amount determined by dividing the amount of such payment by the Series C Original Issue Price. A Distribution Event is defined as the receipt by the Company of $120,000 in proceeds from a financing not involving any holder of Series C Preferred Stock, or any fiscal period in which the Company generated gross profits of $120,000 or more.

On September 29, 2017, the Company issued 7,000 shares of Series C Preferred Stock in connection with the Asset Purchase Agreement for the Dino Might asset. The value of the shares issued amount to $820,451. The valuation of the shares of Series C Preferred Stock was determined by an independent financial analyst.

On October 25, 2017, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada, pursuant to which a one-for-200 reverse split of its common stock was effected and the Company changed its name to Tech Town Holdings Inc, effective November 2, 2017. All share and per share amounts herein retroactively reflect the split.

7. INCOME TAXES

Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. On December 22, 2017, H.R. 1, formally known as the Tax Cut and Jobs Act (the “Act”) was enacted into law. The Act provides for significant tax law changes and modifications with varying effective dates. The major change that affects the Company is reducing the corporate income tax rate from 35% to 21%.

The Company is subject to US taxes. Historically, the Company has had no net taxable income, and therefore has paid no income tax. All years since inception are open to IRS inspection.

digital marketing strategy. As of December 31, 2017 and 2016, respectively,2019, REQ has completed its engagement with the Company had a net operating loss (NOL) carryforward of approximately $17,977,860 and $17,535,257. The NOL carryforward begins to expire in various years beginning 2017. Because management is unable to determine that it is more likely than not that the Company will realize the tax benefit relatedowed $17,500 to the NOL carryforward, by having future taxable income, a full valuation allowanceREQ, which has since been established at December 31, 2017 and 2016 to reduce the tax benefit asset value to zero.paid.

The valuation allowance for deferred tax assets as of December 31, 2017 and 2016 was $3,775,351 and $6,137,340, respectively. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of December 31, 2017 and 2016 and recorded a full valuation allowance.

In December 2018, we entered into a software license agreement with Swirlds to license Hashgraph for the Coro platform. The Company is obligated to pay a first year licensing fee of $225,000 which will be due to prior to launch of the Coro product and a fee for additional nodes at $15,000 per node. In addition the Company is required to pay a 10% transaction fee for account holders on the Swirlds Customer Network. The agreement automatically renews for an additional one year and the fees may not increase more than 1%.

On March 9, 2020, the Company entered into an engagement agreement with Aegis Capital Corp. (“Aegis”). See Note 10.

8. SUBSEQUENT EVENTSRELATED PARTY

On January 9, 2018, shareholders ofJuly 15, 2016, the Company owningissued an aggregate of 7,000 shares of Series C Preferred Stock and 35,164 shares of Common Stock, representingunsecured 7% promissory note to a significant shareholder in the aggregate 77%amount of $100,000. The note had an initial one-year term. On April 9, 2019, the total voting power of the Company’s shareholders, approved by written consent an amendment to the Company’s Articles of Incorporation, to change the name of the Company to Hash Labs Inc. Effective March 2, 2018, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada, to change the name of the Company from Tech Town Holdings Inc. to Hash Labs Inc. The market effectivematurity date of the name changenote was March 6, 2018.

extended to June 30, 2019. On April 3, 2018,12, 2019, the Company entered into an exchange agreement with Vantage. PursuantVantage, which held the note, pursuant to the exchange agreement,which Vantage exchanged outstanding promissory notesa portion of the Companythis note, in the aggregate principal amount of $518,225 (including accrued interest) held by Vantage$50,000, for a new convertible promissory note of the Company in the principal amount of $518,225. The convertible note bears interest at the rate of 7% per year and is convertible into10,000 newly issued shares of common stock of the Company. The Company at a conversion pricerepaid the remaining balance of $0.027. Vantage is the Company’s largest stockholder and is owned by Lyle Hauser.$50,000.

On April 3, 2018,January 14, 2019, the Company entered into an exchange agreement with Lyle Hauser. Pursuant to the exchange agreement, Mr. Hauser exchanged an outstanding convertible promissory notesnote of the Company in the aggregate principal amount of $68,969$70,382 (including accrued interest) held by Mr. Hauser for a new convertiblenon-convertible promissory note of the Company in the principal amount of $68,969.$70,382. The convertiblenew note had an original maturity date of March 31, 2019, which has been extended to June 30, 2020 (see Note 10), and bears interest at the rate of 7% per year, and isdue upon maturity. Accrued interest at December 31, 2019 amounted to $4,927.

On January 14, 2019 the Company entered into an exchange agreement with Vantage. Pursuant to the exchange agreement, Vantage exchanged the remaining amount due on a convertible into shares of Common Stockpromissory note of the Company, equal to $17,780 (including accrued interest) held by Vantage for a new non-convertible promissory note of the Company in the principal amount of $17,780. The new note had an original maturity date of March 31, 2019, which has been extended to December 31, 2019, and bears interest at a conversion pricethe rate of $0.0005.7% per year, due upon maturity. Accrued interest at December 31, 2019 amounted to $1,245. . The Company repaid note in full on November 19, 2019.

On April 3, 2018,February 28, 2019, the Company issued an aggregate of 9,300,000 shares of common stock to Vantage upon the conversion of (i) $241,650 of Vantage’s convertible note and (ii) 7,000 shares of Series C Preferred Stock. In connection with the conversion, Vantage waived any dividends owed to Vantage as the holder of the Series C Preferred Stock.

On April 6, 2018, the Company issued an aggregate of 9,000,000 shares of common stock upon the conversion of a convertiblepromissory note in the principal amount (including accrued interest) of $243,000$110,000 to Lyle Hauser with an original issue discount of $10,000, for a purchase price of $100,000. The note has a 0% interest rate until maturity and had an original maturity date of March 31, 2019, which was soldhas been extended to June 30, 2020 (see Note 10). Following the maturity date, the note bears a third party by Vantage.9% annual interest rate until paid in full. Accrued interest at December 31, 2019 amounted to $4,927.

During the first quarteryear ended December 31, 2019 the Company paid Dorr Asset Management consulting fees and expenses of $107,306. Dorr Asset Management is controlled by Brian and David Dorr, related parties to the Company.

9. INCOME TAXES

A reconciliation of the Company’s income taxes to amounts calculated at the federal statutory rate of 21% is as follows for the years ended December 31:

The significant components of the Company’s net deferred tax assets are as follows for the years ended December 31:

FASB ASC 740,Income Taxes,requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of all the evidence, both positive and negative, management has determined that a full valuation allowance of $5,514,632 and $4,966,666 against its net deferred taxes is necessary as of December 31, 2018 and December 31, 2017, respectively. The change in valuation allowance for the years ended December 31, 2019 and 2018 is $547,966 and $1,191,315, respectively.

At December 31, 2019 and December 31, 2018, respectively, the Company had approximately $21,758,000 and $19,956,000, respectively, of U.S. net operating loss carryforwards remaining.

As a result of certain ownership changes, the Company may be subject to an annual limitation on the utilization of its U.S. net operating loss carryforwards pursuant to Section 382 of the Internal Revenue Code. A study to determine the effect, if any, of this change, has not been undertaken.

Tax returns for the years ended December 31, 2019, 2018, 2017, 2016, and 2015 are subject to examination by the Internal Revenue Service.

10. SUBSEQUENT EVENTS

On March 9, 2020, the Company entered into five Promissory Notesan engagement agreement with Vantage GroupAegis Capital Corp. (“Aegis”), pursuant to which we engaged Aegis to act as lead underwriter in connection with a proposed public offering of common stock by the Company. In the event the contemplated offering is completed, the agreement contemplates, that (subject to execution of an underwriting agreement for the offering) Aegis will be entitled to a 8% underwriting discount, a 1% non-accountable expense allowance, reimbursement of certain expenses, and warrants to purchase 8% of the number of shares of common stock sold in the amount of $41,000 at an interest rate of 7% andoffering. The agreement has a term that ends six months from the date thereof or upon completion of one year.the proposed offering.

On

From January 1, 2020 to March 21, 2019,31, 2020, the Company entered into and closed securities purchase agreements with accredited investors pursuant to which the Company issued and sold an aggregate of 200,000 shares of common stock for an aggregate purchase price of $1,000,000.  

Between January 3, 2020 to March 17, 2020, the Company repaid $100,000 of loans due to Vantage.

On April 7, 2020, the maturity date of outstanding notes held by Lyle Hauser, consisting of (i) a 7% Promissory Note (Vantage Note 2) with a term of one yearpromissory note, dated on or about January 14, 2019, in the original principal amount of $15,000.$70,384.32,as amended by amendment No. 1 thereto, dated April 9, 2019, amendment No. 2 thereto, dated July 3, 2019, amendment No. 3 thereto, dated October 1, 2019, and amendment no. 4 thereto, dated January 17, 2020; and (ii) an original issue discount promissory note, dated on or about February 28, 2019, in the original principal amount of $110,000 (of which $100,000 has been repaid, leaving an outstanding balance of $10,000), as amended by amendment No. 1 thereto, dated April 9, 2019, amendment No. 2 thereto, dated July 3, 2019, amendment No. 3 thereto, dated October 1, 2019, and amendment No. 4 thereto, dated January 17, 2020, was extended to June 30, 2020. In consideration for the extension of the maturity date of the notes, the Company issued to the designee of Lyle Hauser 33,000 shares of common stock.

On April 8, 2020, the Company issued and sold to an accredited investor 5,000 shares of common stock for a purchase price of $25,000.

The Company’s operation has been materially and adversely impacted by the Covid-19 pandemic. The Company is located in Dade County, Florida which is subject to a “stay at home” order effective March 26, 2020, until the expiration of the existing State of Emergency. The Company is not considered an “essential” business and has closed its office. Until this stay at home order is lifted and the Company can resume its normal operations, the impact of the Covid-19 pandemic on the Company is unknown.

ITEMItem 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREChanges in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

ITEMItem 9A. CONTROLS AND PROCEDURESControls and Procedures.

Evaluation of Disclosure and Control Procedures

Management of the Company conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) under the 1934 Act) pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, Actas amended (the “Exchange Act”) as of the end of the period covered by this report. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the 1934Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Based on this evaluation, management concluded that the design and operation of our disclosure controls and procedures are not effective due to the following material weaknesses:

To the extent reasonably possible given our limited resources, we intend to take measures to cure the aforementioned weaknesses, including, but not limited to increasing the following:capacity of our qualified financial personnel to ensure that accounting policies and procedures are consistent across the organization and that we have adequate control over financial statement disclosures.

Management'sManagement’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 20172019 based on the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013).

A material weakness is defined within the Public Company Accounting Oversight Board’s Auditing Standard No. 5 as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In conducting his evaluation, our principal executive officer and principal financial officer noted the following material weaknesses in our internal controls over financial reporting:

As a result of these deficiencies in our internal controls, our officer concluded that our internal control over financial reporting was not effective. 

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

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(t) and 15d-15(f) under the Exchange Act, during the fourth quarter of the fiscal year ended December 31, 20172019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEMItem 9B. OTHER INFORMATIONOther Information.

None.

PART III

ITEMItem 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEDirectors, Executive Officers and Corporate Governance.

Directors and Executive Officers

The following table and biographical summaries set forth information, including principal occupation and business experience about our directors and executive officers:

Niquana Noel –J. Mark Goode has served as the Company’s the president, chief executive officer, and chairman of the board of directors, since May 18. 2018. Mr. Goode, a decorated former Captain in the United States Marine Corps, joined the Company from The Peninsula Group, LLC (“Peninsula”), an investment origination and management company focused on the life insurance settlement market, where he was the founder and Chief Executive Officer. During his 15-year tenure as Peninsula’s CEO, Mr. Goode’s team completed approximately 500 individual insurance investment transactions, representing more than $1 billion in life policy benefit value. Mr. Goode is also the founder and managing member of JMG Strategies, LLC, a Miami-based alternative investment management firm, and the founder of Life Premium Solutions, an independent insurance advisory firm that specializes in customized, innovative premium finance solutions for the advanced life insurance market. Mr. Goode has served as an elected member of the Board of Directors of the Life Insurance Settlement Association and previously served as the Association’s Vice President CEO and Chairwomanas Chairman of its Political Action Committee. Mr. Goode was recognized in 2010 by Life Settlement Review as one of the “10 Most Influential Leaders” in the life settlement industry and previously, after eight years of military service, he was awarded the Navy Commendation Medal. Mr. Goode holds a Master of Arts Degree from The George Washington University. Mr. Goode’s business executive experience qualifies him to serve as a director of the Company.

Ms.Niquana Noel has served as ourthe Company’s Chairwoman, Presidentchief operating officer since May 18, 2018 and CEO since January 2014. She originally joined the Company as operations manager in 2008 and was appointed as Chief Operating Officer anda director of the Company insince August 2013. Previously,Ms. Noel served as the Company’s chief executive officer and president from January 2014 to May 2018. Prior to serving in that capacity, Ms. Noel served as operations manager of the Company from 2008. Prior to joining the Company, Ms. Noel was the Executive Assistant to a Florida-based serial entrepreneur who had successful business interests ranging from the ownership and operation of cemeteries in Maryland, Virginia and Florida;Florida to the ownership and operation of exotic, high performance car dealerships and auto accessory businesses. She studied Business Management at Florida International University. Ms. Noel’s executive operational experience qualifies her to serve on ourthe Company’s board of directors. Ms. Noel also serves as chief executive officer and director of Bespoke Extracts, Inc.

Michael S. Delin – DirectorCorporate Governance

After providing finance and accounting consulting services to the management team, Michael joined our Company’s Board of Directors in December 2008.   As the sole proprietor and operator of an accounting and tax preparation service that he founded in 1998, Mr. Delin continues to provide outsourced CFO services for several public and private companies operating in a range of industries, including construction, technology and healthcare, among others. Michael is a graduate of the University of South Florida where he earned a Bachelor’s degree in Accounting. Mr. Delin’s accounting and financial experience qualifies him to serve on the board of directors.

Corporate Governance

Board of Directors'Directors’ Term of Office

Directors are elected at our annual meeting of shareholders and serve for one year until the next annual meeting of shareholders or until their successors are elected and qualified.

Committees of our Board of Directors

We have not established any committees, including an Audit Committee, a Compensation Committee or a Nominating Committee, or any committees performing similar functions. The functions of those committees are currently undertaken by Board of Directors as a whole. Because we have only two directors, neither of which is independent, we believe that the creation of these committees, at this time, would be cumbersome and constitute more form over substance, particularly under circumstances where a substantial majority of our outstanding shares are controlled by one individual (who has approved the appointment of our directors) and at a time when our resources do not permit us to obtain officers’ and directors’ liability insurance. We do not have an audit committee financial expert because we do not have the resources to retain one.

Board Leadership Structure and Role in Risk Oversight

Although we have not adopted a formal policy on whether the Chairwoman and Chief Executive Officer positions should be separate or combined, we have traditionally determined that it is in the best interests of the Company and its shareholders to combine these roles.  Ms. Niquana Noel has served as our Chairwoman and Chief Executive Officer since January 2014. We believe it is in the best interest of the Company to have the Chairwoman and Chief Executive Officer roles combined due to our small size and limited resources.

Our Board of Directors is primarily responsible for overseeing our risk management processes.  The Board of Directors receives and reviews periodic reports from management, auditors, legal counsel, and others, as considered appropriate regarding our company’s assessment of risks. The Board of Directors focuses on the most significant risks facing our company and our company’s general risk management strategy, and also ensures that risks undertaken by our company are consistent with the Board’s appetite for risk. While the Board oversees our company, our company’s management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective approach for addressing the risks facing our company and that our Board leadership structure supports this approach.

Stockholder Nominees for Directors

We do not have a policy regarding the consideration of any director candidates which may be recommended by our stockholders, including the minimum qualifications for director candidates, nor has our Board of Directors established a process for identifying and evaluating director nominees. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our stockholders, including the procedures to be followed. Our Board has not considered nor has it adopted any of these policies as we have never received a recommendation from any stockholder for any candidate to serve on our Board of Directors. Given our relative size, early stage of development and lack of officers’ and directors’ insurance coverage, we do not anticipate that any of our stockholders will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a proposal is made, all members of our Board will participate in the consideration of director nominees. In considering a director nominee, it is likely that our Board will consider the professional and/or educational background of any nominee with a view towards how such candidate might bring a different viewpoint or experience to our Board.

No Family Relationships

There areis no family relationships among the officers and directors, nor are there any arrangements or understandingrelationship between any of the Directors or Officers of our Company or any other person pursuant to which any Officer or Director was or is to be selected as andirector and executive officer or director.among any directors or executive officers.

Involvement in Certain Legal Proceedings

During the last ten years, none ofTo our knowledge, our directors and executive officers directors, promoters or control persons have not been involved in any legal proceedings as described in Item 401(f) of Regulation S-K.the following events during the past ten years: