UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒
[X] QUARTERLY REPORT UNDERPURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2016Quarterly Period Ended March 31, 2021
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 0-53259File No. 001-38523
POWERDYNE INTERNATIONAL, INC.
(Exact name of registrantthe small business issuer as specified in its charter)
| Delaware | 20-5572576 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer | |
Identification No.) |
Jefferson Place
100 Jefferson Boulevard, Suite 20045 North Main Street
Warwick, Rhode Island 02888-3849North Reading, Massachusetts 01864
(Address of principal executive offices) (zip code)
401/(401) 739-3300
(Registrant'sRegistrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
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 [X]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company.filer. See the definitionsdefinition of "large“accelerated filer” and “large accelerated filer", "accelerated filer", "non-accelerated filer", and "smaller reporting company"filer” in Rule 12b-2 of the Exchange Act. (Check one):
| Large | Accelerated filer | ||
| Non-accelerated filer | Smaller reporting company | ||
| Emerging growth company | [X] |
(do
If an emerging growth company, indicate by check mark if the registrant has elected not check if smaller reporting company)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. [ ]
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒[X] No [ ]
Indicate the numberThere were 1,914,930,584 shares of sharesissuer’s Common Stock outstanding of each of the registrant's classes of common stock as of the latest practicable date.May 12, 2021.
POWERDYNE INTERNATIONAL, INC.
TABLE OF CONTENTS
POWERDYNE INTERNATIONAL, INC.
| September 30, 2016 | December 31, 2015 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 133 | $ | 1,922 | ||||
| Accounts receivable | 224 | - | ||||||
| Advances to stockholder | - | 11,321 | ||||||
| Total current assets | 357 | 13,243 | ||||||
| Property and Equipment | ||||||||
| Property and equipment, net | 69,089 | 79,031 | ||||||
| Total Assets | $ | 69,446 | $ | 92,274 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 132,182 | $ | 68,877 | ||||
| Due to related parties | 25,000 | 25,000 | ||||||
| Notes payable-related parties | 263,147 | 371,605 | ||||||
| Income tax payable | 500 | 500 | ||||||
| Total Current Liabilities | 420,829 | 465,982 | ||||||
| Long Term Liabilities | ||||||||
| Notes payable-related parties | 137,663 | - | ||||||
| Total Long Term Liabilities | 137,663 | - | ||||||
| Total Liabilities | 558,492 | 465,982 | ||||||
| Stockholders' Deficit: | ||||||||
| Common stock; $0.0001 par value; 2,000,000,000 shares authorized, 1,527,930,584 shares issued and outstanding as of September 30, 2016 and 1,379,430,584 shares issued and outstanding as of December 31, 2015 | 152,793 | 137,943 | ||||||
| Additional paid-in capital | 2,693,266 | 2,678,066 | ||||||
| Accumulated deficit | (3,335,105 | ) | (3,189,717 | ) | ||||
| Total Stockholders' Deficit | (489,045 | ) | (373,708 | ) | ||||
| Total Liabilities and Stockholders' Deficit | $ | 69,446 | $ | 92,274 | ||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)CONDENSED BALANCE SHEETS
| For the three | For the three | For the nine | For the nine | |||||||||||||
| months ended | months ended | months ended | months ended | |||||||||||||
| September 30, 2016 | September 30, 2015 | September 30, 2016 | September 30, 2015 | |||||||||||||
| Revenues | $ | 224 | $ | 470 | $ | 488 | $ | 470 | ||||||||
| Cost of revenues | - | - | - | - | ||||||||||||
| Gross profit | 224 | 470 | 488 | 470 | ||||||||||||
| Operating expenses | 21,127 | 201,735 | 145,876 | 350,773 | ||||||||||||
| Loss from operations | (20,903 | ) | (201,265 | ) | (145,388 | ) | (350,303 | ) | ||||||||
| Other (Income) Expense | ||||||||||||||||
| Derivative expense | - | - | - | 43,877 | ||||||||||||
| Change in fair value of derivative | - | (2,518 | ) | - | (50,345 | ) | ||||||||||
| Amortization of debt discount | - | 5,000 | - | 138,260 | ||||||||||||
| Total Other (Income) Expense | - | 2,482 | - | 131,792 | ||||||||||||
| Income (loss) before income tax expense | (20,903 | ) | (203,747 | ) | (145,388 | ) | (482,095 | ) | ||||||||
| Income tax (income) expense | - | 875 | - | 419 | ||||||||||||
| Net income (loss) | $ | (20,903 | ) | $ | (204,622 | ) | $ | (145,388 | ) | $ | (482,514 | ) | ||||
| Basic and diluted loss per common share | (0 | ) | (0 | ) | (0 | ) | (0 | ) | ||||||||
| Basic and diluted weighted average common shares outstanding | 1,513,928,759 | 1,287,787,652 | 1,527,930,584 | 822,683,837 | ||||||||||||
| March 31, 2021 | December 31, 2020 | |||||||
| (audited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 3,693 | $ | 768 | ||||
| Total current assets | 3,693 | 768 | ||||||
| Property and Equipment | ||||||||
| Cryptocurrency miners | $ | 15,000 | $ | 15,000 | ||||
| Less: accumulated depreciation | (6,750 | ) | (6,000 | ) | ||||
| Total property and equipment | 8,250 | 9,000 | ||||||
| Intangible asset - Cryptocurrency | $ | 41,365 | $ | 4,787 | ||||
| Total Assets | $ | 53,308 | $ | 14,555 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 20,682 | $ | 18,737 | ||||
| Due to related parties | 118,150 | 93,900 | ||||||
| Note payable-stockholder | 13,677 | 13,080 | ||||||
| Income tax payable | 2,550 | 2,550 | ||||||
| Total Current Liabilities | 155,059 | 128,267 | ||||||
| Total Liabilities | 155,059 | 128,267 | ||||||
| Stockholders’ Deficit: | ||||||||
| Preferred stock, $0.0001 par value, 20,000,000 shares authorized, -0- shares issued and outstanding as of March 31, 2021 and December 31, 2020 | - | - | ||||||
| Common stock, $0.0001 par value, 2,000,000,000 shares authorized, 1,914,930,584 shares issued and outstanding as of March 31, 2021 and 1,914,930,584 shares issued and outstanding as of December 31, 2020 | 191,493 | 191,493 | ||||||
| Additional paid-in capital | 3,302,851 | 3,302,851 | ||||||
| Accumulated deficit | (3,596,095 | ) | (3,608,056 | ) | ||||
| Total Stockholders’ Deficit | (101,751 | ) | (113,712 | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | 53,308 | $ | 14,555 | ||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 1 |
CONDENSED STATEMENTS OF CASH FLOWSOPERATIONS
(Unaudited)
| For the nine | For the nine | |||||||
| months ended | months ended | |||||||
| September 30, 2016 | September 30, 2015 | |||||||
| (unaudited) | (unaudited) | |||||||
| Operating Activities: | ||||||||
| Net income (loss) | $ | (145,388 | ) | $ | (482,514 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 9,942 | 7,604 | ||||||
| Bad Debt expense | 11,321 | - | ||||||
| Common stock issued for service and stock compensation | 30,050 | 139,800 | ||||||
| Derivative and interest expense | - | 56,764 | ||||||
| Change in FV of derivatives | - | (50,345 | ) | |||||
| Amortization of debt discounts | - | 138,260 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (224 | ) | (470 | ) | ||||
| Other receivable | - | (673 | ) | |||||
| Accrued expenses | 63,305 | (3,297 | ) | |||||
| Due to related party | - | (8,425 | ) | |||||
| Taxes payable | - | (956 | ) | |||||
| Net cash used in operating activities | (30,994 | ) | (204,252 | ) | ||||
| Investing Activities: | ||||||||
| Purchase of property and equipment | - | (39,544 | ) | |||||
| Net cash used in investing activities | - | (39,544 | ) | |||||
| Financing Activities: | ||||||||
| Principal paid on Notes payable related parties | - | (1,899 | ) | |||||
| Proceeds from Notes payable | - | 26,500 | ||||||
| Proceeds from Notes payable related parties | 29,205 | 228,000 | ||||||
| Net cash provided by financing activities | 29,205 | 252,601 | ||||||
| Net increase (decrease) in cash | (1,789 | ) | 8,805 | |||||
| Cash, beginning of period | 1,922 | 2,265 | ||||||
| Cash, end of period | $ | 133 | $ | 11,070 | ||||
| Non-cash investing and financing activities: | ||||||||
| Common stock issued in settlement for debt | $ | 14,850 | $ | 199,761 | ||||
| Settlement of derivative liability through conversion of notes payable. | $ | - | $ | 454,267 | ||||
| Supplemental disclosure if cash flow information | ||||||||
| Cash paid for interest | $ | - | $ | - | ||||
| Cash paid for taxes | $ | - | $ | 1,375 | ||||
| For the three | For the three | |||||||
| ` | months ended | months ended | ||||||
| March 31, 2021 | March 31, 2020 | |||||||
| Revenues | $ | 36,577 | $ | 300 | ||||
| Cost of revenues | 750 | 750 | ||||||
| Gross profit | 35,827 | (450 | ) | |||||
| Operating expenses | 23,269 | 4,751 | ||||||
| Income (loss) from operations | 12,558 | (5,201 | ) | |||||
| Other Expense | ||||||||
| Other Expense-Interest | 597 | 500 | ||||||
| Total Other Expense | 597 | 500 | ||||||
| Income (loss) before income tax expense | 11,961 | (5,701 | ) | |||||
| Income tax expense | - | - | ||||||
| Net income (loss) | $ | 11,961 | $ | (5,701 | ) | |||
| Basic and diluted loss per common share | $ | 0.00 | $ | 0.00 | ||||
| Basic and diluted weighted average common shares outstanding | 1,914,930,584 | 1,914,930,584 | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 2 |
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the three | For the three | |||||||
| months ended | months ended | |||||||
| March 31, 2021 | March 31, 2020 | |||||||
| Operating Activities: | ||||||||
| Net income (loss) | $ | 11,961 | $ | (5,701 | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 750 | 750 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accrued expenses | 1,944 | (68 | ) | |||||
| Net cash provided by (used in) operating activities | 14,655 | (5,019 | ) | |||||
| Investing Activities: | ||||||||
| Increase in intangible asset - Cryptocurrency | (36,577 | ) | (300 | ) | ||||
| Net cash used in investing activities | (36,577 | ) | (300 | ) | ||||
| Financing Activities: | ||||||||
| Due to related party | 24,250 | |||||||
| Proceeds from Notes payable-stockholder | 597 | - | ||||||
| Proceeds from Notes payable-related parties | - | 1,300 | ||||||
| Net cash provided by financing activities | 24,847 | 1,300 | ||||||
| Net increase (decrease) in cash | 2,925 | (4,019 | ) | |||||
| Cash, beginning of period | 768 | 8,855 | ||||||
| Cash, end of period | $ | 3,693 | $ | 4,836 | ||||
| Non-cash investing and financing activities: | ||||||||
| Common stock issued for service | $ | - | ||||||
| Common stock issued for debt reduction of notes payable. | $ | - | ||||||
| Supplemental disclosure if cash flow information | ||||||||
| Cash paid for interest | $ | - | ||||||
| Cash paid for taxes | $ | - | $ | - | ||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 3 |
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
March 31, 2021 and 2020
1. ORGANIZATION
Powerdyne, Inc., was incorporated on February 2, 2010 in Nevada, and is registered to do business in Rhode Island and Massachusetts. On February 7, 2011, Powerdyne, Inc. merged with Powerdyne International, Inc., formerly Greenmark Acquisition Corporation, a publicly held Delaware corporation.
On December 13, 2010, Powerdyne International, Inc., formerly Greenmark Acquisition Corporation, filed an Amended and Restated Articles of Incorporation in order to, among other things, increase the authorized capital stock to 300,000,000 common shares, par value $0.0001 per share. Unless the context specifies otherwise, as discussed in Note 2, references to the “Company” refers to Powerdyne International, Inc. and Powerdyne, Inc. after the merger.
At the closing of the merger, each share of Powerdyne, Inc.’s common stock issued and outstanding immediately prior to the closing of the Merger was exchanged for the right to receive 7,520 shares of common stock of Powerdyne International, Inc. Accordingly, an aggregate of 188,000,000 shares of common stock of Powerdyne International, Inc. were issued to the holders of Powerdyne, Inc.’s common stock.
In 2014, Powerdyne International, Inc. filed an amendment to its Articles of Incorporation which increased the authorized capital stock to 550,000,000 common shares, par value $0.0001 per share.
In March 2014, the Company began distribution of completely packaged independent electrical generator units that run on environmentally friendly fuel sources, such as natural gas and propane.
On January 26, 2015, Powerdyne International, Inc. filed an amendment to its Articles of Incorporation which increased the authorized capital stock to 2,020,000,000 shares consisting of 2,000,000,000 common shares, par value $0.0001 per share and 20,000,000 shares which may be designated as common or preferred stock, par value $0.0001 per share.
In March 2014 Company began production and distribution of completely packaged independent electrical generator units that run on environmentally-friendly fuel sources, such as natural gas and propane.
2. REVERSE MERGER ACCOUNTING
On February 7, 2011, Greenmark Acquisition Corporation, which was a publicly held Delaware corporation, merged with Powerdyne, Inc. Upon closing of the transaction, Greenmark Acquisition Corporation, the surviving corporation in the merger, changed its name to Powerdyne International, Inc.
The merger was accounted for as a reverse-merger, and recapitalization in accordance with generally accepted accounting principles in the United States (“GAAP”). Powerdyne, Inc. was the acquirer for financial reporting purposes and the Company was the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the merger are those of Powerdyne, Inc. and have been recorded at the historical cost basis of Powerdyne, Inc., and the financial statements after completion of the merger include the assets and liabilities of the Company and Powerdyne, Inc., historical operations of Powerdyne, Inc. and operations of the Company from the closing date of the merger. Common stock and the corresponding capital amounts of the Company pre-merger were retroactively restated as capital stock shares reflecting the exchange ratio in the merger. In conjunction with the merger, the Company received no cash and assumed no liabilities from Greenmark Acquisition Corporation.
| 4 |
POWERDYNE INTERNATIONAL, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
March 31, 2021 and 2020
3. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include all the notes required by generally accepted accounting principles for complete financial statements. Accordingly, certain information and footnote disclosures, normally included in the financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted pursuant to such rules and regulations. The statements presented as of September 30, 2016March 31, 2021 and for the three and nine months ended September 30, 2016 and 2015March 31, 2020, are unaudited. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation of the financial statements have been included.
POWERDYNE INTERNATIONAL, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Certain information and footnote disclosure normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the United States Securities and Exchange Commission (“SEC”). These unaudited financial statements should be read in conjunction with our audited financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 filed on April 14, 2016.2020.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The summary of significant accounting policies presented below is designed to assist in understanding the Company’s financial statements. Such financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects and have been consistently applied in preparing the accompanying financial statements.
Going Concern
Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, acquiring operating assets and raising capital. The Company has not generated significant revenues from its principal operations, and there is no assurance of future revenues. As of September 30, 2016,March 31, 2021, the Company had an accumulated deficit of $3,335,105.$3,596,095. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its members or other sources, as may be required.
The Company’s activities will necessitate significant uses of working capital beyond September 30, 2016.March 31, 2021. Additionally, the Company’s capital requirements will depend on many factors, including the success of the Company’s continued research and development effortssales and the status of competitive products. The Company plans to continue financing its operations with cash received from financing activities.activities, revenue from operations and or affiliate funding.
While the Company strongly believes that its capital resources will be sufficient in the near term, there is no assurance that the Company’s activities will generate sufficient revenues to sustain its operations without additional capital or, if additional capital is needed, that such funds if available, will be obtainable on terms satisfactory to the Company.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.
| 5 |
POWERDYNE INTERNATIONAL, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
March 31, 2021 and 2020
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Use of Estimates
In preparing these auditedunaudited condensed financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Fair Value of Financial Instruments
The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the financial statements on a nonrecurring basis. The guidance 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 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability.
POWERDYNE INTERNATIONAL, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Company monitors the market conditions and evaluates the fair value hierarchy levels at least quarterly. For any transfers in and out of the levels of the fair value hierarchy, the Company elects to disclose the fair value measurement at the beginning of the reporting period during which the transfer occurred.
The Company'sCompany’s financial instruments consisted of cash, accounts payable and accrued liabilities, advancesdue to stockholders, notes payablerelated parties, note payable-stockholder, and convertible debt.income tax payable. The estimated fair value of cash, accounts payable and accrued liabilities, advances to stockholders, and notes payablethese financial instruments approximates its carrying amount due to the short maturity of these instruments. The recognition of the derivative values of convertible debt are based on the weighted-average Black-Scholes option pricing model.
Revenue recognition
The Company recognizes its revenue in accordance with ASC Topic 605, “Revenue Recognition”, upon the delivery of its products when: (1) delivery has occurred or services rendered; (2) persuasive evidence of an arrangement exists; (3) there are no continuing obligations to the customer; and (4) the collection of related accounts receivable is probable.
Cash
The Company considers all highly-liquidhighly liquid investments with maturities of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2016March 31, 2021 and December 31, 2015,2020, respectively.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company places its cash with high quality banking institutions. From time to time, the Company may maintain cash balances at certain institutions in excess of the Federal Deposit Insurance Corporation limit. The Company has not incurred any loss from this risk.
| 6 |
POWERDYNE INTERNATIONAL, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
March 31, 2021 and 2020
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Property and Equipment
Property and equipment is stated at cost. Capital expenditures for improvements and upgrades to existing equipment are also capitalized. Maintenance and repairs are expensed as incurred. The computer equipment is depreciated over 105 years on a straight-line basis. Depreciation expense for the nine monthsperiods ended September 30, 2016March 31, 2021 and 20152020 was $9,942$750 and $7,604,$750, respectively.
Intangible Asset
The Company considers intangible asset - cryptocurrency to be revenue that has been earned, but for which no cash has been received. Intangible asset consists of crypto mined coins that are held in a digital wallet and have not been cashed out. The basis of the valuation is the market price of the Sia coins on March 31, 2021. The Company considers this to be an intangible asset under GAAP guidelines. The Company had $41,365 of intangible asset as of March 31, 2021 and $4,787 as of December 31, 2020. Revenue is recognized on the last date of the quarter based on the transaction price of the Sia coin at that date times the number of coins in the wallet. Unrealized gains and losses are recognized quarterly based on the fluctuation in the market value of the coin versus the value booked when obtained.
Derivatives and Hedging
In April 2008, the FASB issued a pronouncement that provides guidance on determining what types of instruments or embedded features in an instrument held by a reporting entity can be considered indexed to its own stock for the purpose of evaluating the first criteria of the scope exception in the pronouncement on accounting for derivatives.
This pronouncement was effective for financial statements issued for fiscal years beginning after December 15, 2008. The adoption of these requirements can affect the accounting for many convertible instruments with provisions that protect holders from a decline in the stock price. Each reporting period, the Company evaluates whether convertible debt to acquire stock of the Company contain provisions that protect holders from declines in the stock price or otherwise could result in modification of the exercise price under the respective convertible debt agreements. The Company determined that the conversion features in the convertible notes issued during the second, third, and fourth quarters of 2014, contained such provisions and recorded such instruments as derivative liabilities.
Long-Lived Assets
In accordance with ASC 350-30 (formerly SFAS No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets), the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their then carrying values may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. The Company’s management currently believes there is no impairment of its long-lived assets. There can be no assurance however, that market conditions will not change or demand for the Company’s products under development will continue. Either of these could result in future impairment of long-lived assets.
| 7 |
POWERDYNE INTERNATIONAL, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
March 31, 2021 and 2020
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Taxes
As a result of the implementation of certain provisions of ASC 740,Income Taxes, (formerly FIN 48,Accounting for Uncertainty in Income Taxes – An Interpretation of FASB Statement No. 109),(“ASC 740”), which clarifies the accounting and disclosure for uncertainty in tax positions, as defined. ASC 740 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes.
In 2010, the Company adopted Accounting for Uncertain Income Taxes under the provisions of ASC 740. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. It also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company did not recognize any additional liability for unrecognized tax benefits as a result of the adoption of ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized.
The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. In addition, wethe Company did not record a cumulative effect adjustment related to the adoption of ASC 740. The Company’s policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes.
The Company’s tax provision is determined using an estimate of its annual effective tax rate using enacted tax rates expected to apply to taxable income in the years in which they are earned, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter the Company updates its estimate of the annual effective tax rate, and if its estimated tax rate changes, we makethe Company makes a cumulative adjustment. Income taxes payable as of September 30, 2016March 31, 2021 and December 31, 20152020 were $500$2,550 and $500,$2,550, respectively.
LossIncome (Loss) per Common Share
Basic lossincome (loss) per common share excludes dilutive securities and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted earnings per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Since the Company has only incurred losses, basic and diluted loss per share is the same. As of September 30, 2016March 31, 2021, and December 31, 2015,2020, there were no outstanding dilutive securities.
The following table represents the computation of basic and diluted lossesincome (losses) per share:
| Nine months ended September 30, 2016 | Nine months ended September 30, 2015 | Three months ended September 30, 2016 | Three months ended September 30, 2015 | |||||||||||||
| (Income) Loss available for common shareholder | $ | (145,388 | ) | $ | (482,514 | ) | $ | (20,904 | ) | $ | (204,622 | ) | ||||
| Basic and fully diluted loss per share | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
| Weighted average common shares outstanding - basic and diluted | 1,527,930,584 | 822,683,837 | 1,513,928,759 | 1,287,787,652 | ||||||||||||
| Three months ended March 31, 2021 | Three months ended March 31, 2020 | |||||||
| Income (loss) available for common shareholder | $ | 11,961 | $ | (5,701 | ) | |||
| Basic and fully diluted loss per share | $ | 0.00 | $ | 0.00 | ||||
| Weighted average common shares outstanding - basic and diluted | 1,914,930,584 | 1,914,930,584 | ||||||
Net lossincome (loss) per share is based upon the weighted average shares of common stock outstanding.
Recent Accounting Pronouncements
There are no recently issued accounting pronouncements that the Company has yet to adopt that are expected to have a material effect on its financial position results of operations, or cash flows.
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POWERDYNE INTERNATIONAL, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
March 31, 2021 and 2020
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Recent Accounting Pronouncements
In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805) to clarify the definition of a business, which is fundamental in the determination of whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses combinations. The updated guidance requires that in order to be considered a business the integrated set of assets and activities acquired must include, at a minimum, an input and process that contribute to the ability to create output. If substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset or group of similar assets, it is not considered a business, and therefore would not be considered a business combination. The update is effective for fiscal years beginning after December 15, 2018, and interim periods with fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of adopting this guidance on our consolidated financial statements.
In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). Under ASU 2016-09, the tax effects of stock compensation will be recognized as income tax expense or benefit to the Company’s income statement and the tax effects of exercised or vested awards will be treated as discrete items in the reporting period in which they occur. Along with other income tax cash flows, excess tax benefits will be classified as operating activities, and cash paid by the Company when directly withholding shares for tax withholding purposes will be classified as financing activities. At this time, this does not apply to the Company and therefore does not have an impact on its current financial statements. The Company decided to account for forfeitures when they occur which, did not have a material impact to the Company’s financial statements.
Revenue Recognition
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), requiring lessees to recognize for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (2) a right-of-use (“ROU”) 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. The update is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Company currently anticipates that upon adoption of the new standard, ROU assets and lease liabilities will be recognized in amounts that will be immaterial to the consolidated balance sheets.
In May 2014, the FASB issued an accounting standard update that amends the accounting guidance on revenue recognition. The amendment in this accounting standard update are intended to provide a more robust framework for addressing revenue issues, improve comparability of revenue standard update will be applied using either of the following transition methods: 1) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or 2) a modified retrospective approach with the cumulative effect of initially adopting the standard recognized at the date of adoption (which requires additional footnote disclosures). This accounting update is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted only as of reporting periods beginning after December 31, 2016.
Sia coin is the only crypto coin that Powerdyne is mining. The coins are held in the Company’s Sia coin digital wallet. When coins are going to be exchanged for USD, they are then transferred to the company’s exchange wallet held at a US based crypto exchange which provides support for two-factor authentication. We also have wallet password management, and offsite backups. The coins are held in anticipation of future price appreciation as crypto currencies become more widely accepted, but some coins may be exchanged for USD on a as needed basis. The company also realizes there is no guarantee the coins will apricate in value. Revenue is recognized on the last date of the quarter based on the market price of the Sia coin at that date times the number of coins in the wallet.
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POWERDYNE INTERNATIONAL, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
March 31, 2021 and 2020
5. PROPERTY AND EQUIPMENT - NET
Equipment consists of the following as of September 30, 2016March 31, 2021 and December 31, 2015:2020:
| September 30, | December 31, | March 31, | December 31, | |||||||||||||
| 2016 | 2015 | 2021 | 2020 | |||||||||||||
| Machinery and equipment | $ | 171,043 | $ | 171,043 | ||||||||||||
| Less impairment of equipment | (38,484 | ) | (38,484 | ) | ||||||||||||
| 132,559 | 132,559 | (unaudited) | (audited) | |||||||||||||
| Cryptocurrency miners | $ | 15,000 | $ | 15,000 | ||||||||||||
| Less accumulated depreciation | (63,470 | ) | (53,528 | ) | (6,750 | ) | (6,000 | ) | ||||||||
| Total Property and Equipment | $ | 69,089 | $ | 79,031 | $ | 8,250 | $ | 9,000 | ||||||||
Equipment is stated at cost and depreciated on a straight-line basis over the assets’ estimated useful lives: machinery andcomputer equipment 105 years. Total depreciation expense for the periodsthree months ended September 30, 2016March 31, 2021 and 20152020 was $9,942$750 and $7,604,$750, respectively.
6. LEASE
On March 11, 2015 the CompanyPowerdyne International, Inc. (the “Company”) finalized its negotiations with Farmacia Brisas del Mar, a corporation organized under the laws of Puerto Rico (the “Lessee”), and the Company and the Lessee have entered into a five-year contract to lease power generating equipment to Lessee based upon power consumption. In addition, the custom designed system will also provide cogeneration capabilities with the addition of chillers to support the air conditioning demands. The agreement provides for a payment to the Company of a monthly fee equal to the greater of a set monthly base rate or a monthly base rate plus an additional amount based on kilowatt wattage. The agreement provides for termination by the Company only in the event of nonperformance by the Lessee unless Lessee pays all payments due for the remainder of the term. The agreement contains representation and warranties, default provisions and indemnification provisions typical for agreements of this type.
7. COMMON STOCK
Stock issued for services
On January 19, In 2016 the Company issued 3,000,000 sharesterms on the Farmacia Del Mar lease was modified to a consultant as compensation for services rendered.monthly payment, based on actual power consumption. The Company valued the stock at $0.0003, for a total of $900.revenue-to date derived from this lease is $1,240.
On January 19, 2016 the Company issued 500,000 sharesMarch 28, 2017, Powerdyne International Inc. entered into a fifteen-year contract with a third party to a consultant as compensation for services rendered.lease power generating equipment. The Company valued the stock at $0.0003, for a total of $150.lease is subject to financing and is currently under negotiations with lenders.
On January 25, 2016During the Company issued 30,000,000 sharesyear ended December 31, 2017, Powerdyne International, Inc. (the Company) determined that all the machinery and equipment was impaired due to stockholder as compensation for services rendered. The Company valuedHurricane Maria, which occurred in September 2017, resulting in the stock at $0.0002, for a totaldisappearance of 6,000.the genset in Puerto Rico. Due to the logistics of transportation after Hurricane Maria the company decided to terminate the lease with the Farmacia Del Mar.
On January 25, 2016During the Company issued 75,000,000 sharesyear ended December 31, 2018, Powerdyne International, Inc. terminated the 15-year contract to stockholder as compensation for services rendered. The Company valuedlease power generating equipment, due to the stock at $0.0002, for a total of $15,000.third-party lessee’s inability to obtain financing.
On January 25, 2016During the Company issued 40,000,000 sharesquarter ended March 31, 2019 Powerdyne International, Inc. purchased several crypto currency miners and began mining certain crypto coins. This was done in an effort to a consultant as compensationenter into the crypto markets and explore other potential revenue producing opportunities for services rendered. The Company valued the stock at $0.0002, for a total of $8,000.Powerdyne International, Inc.
8. RELATED PARTY – Promissory Note
The Company obtained short-term financing from five different related parties from 2012 through September 30, 2016. As of September 30, 2016, 82.61% of the short-term financing is from one related party. The accrued interest payable to such related party is $39,109. The following are breakdowns for the promissory notes issued to these five different related parties.
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POWERDYNE INTERNATIONAL, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Company obtained short-term cash flow from a related party in the form of three demand notes in the aggregate principal amount of $10,000 which have been outstanding since the year ended December 31, 2012. Two notes were amended and extended during 2014, and one note was amended and extended during the quarter ended September 30, 2015, changing the maturity date to one year later than what was on original notes. Note 1 was amended and extended during the quarter ended September 30, 2016, changing the maturity date to two years later than what was on original note. The notes bear an interest rate of 7% per annum and are unsecured.
| Note | Principal | Rate | Accrued interest | Maturity | ||||||||||||||
| 9/30/16 | 12/31/15 | |||||||||||||||||
| Promissory note 1 | $ | 6,000 | 7 | % | $ | 1,710 | $ | 1,395 | 9/4/2018 | |||||||||
| Promissory note 2 | $ | 2,000 | 7 | % | $ | 559 | $ | 454 | 10/1/2017 | |||||||||
| Promissory note 3 | $ | 2,000 | 7 | % | $ | 535 | $ | 430 | 12/3/2017 | |||||||||
| Total | $ | 10,000 | $ | 2,804 | $ | 2,279 | ||||||||||||
The Company obtained short-term cash flow from a related party in the form of nine demand notes in the aggregate principal amount of $70,953 during the period from 2012 through December 31, 2014. During the quarters ended September 30, 2015, June 30, 2015 and March 31, 2015 the Company borrowed $53,000, $115,0002021 and $60,000, respectively, in the form of eight demand notes. The Company repaid the principal amount of $453 during the year ended December 31, 2014, and $1,199 during the quarter ended March 31, 2015, and $700 during the quarter ended June 30, 2015. Notes 1 through 6 were amended and extended during 2014, changing the maturity date to one year later than what was on original notes. Notes 1 and 6 were amended again during the quarter ended September 30, 2015, changing the maturity date to one year later than what was on original notes. Note 7 was amended during the quarter ended June 30, 2016, changing the maturity date to one year later than what was on original note. Notes 1 and 6 were amended during the quarter ended September 30, 2016, changing the maturity dates to two years later than what was on original notes. The notes bear an interest rate of 7% per annum and are unsecured.
| Note | Principal | Rate | Accrued interest | Maturity | ||||||||||||||
| 9/30/16 | 12/31/15 | |||||||||||||||||
| Promissory note 1 | $ | 5,000 | 7 | % | $ | 1,434 | $ | 1,171 | 7/25/2018 | |||||||||
| Promissory note 2 | $ | 11,000 | 7 | % | $ | 3,034 | $ | 2,456 | 10/22/2017 | |||||||||
| Promissory note 3 | $ | 15,000 | 7 | % | $ | 4,042 | $ | 3,254 | 11/24/2017 | |||||||||
| Promissory note 4 | $ | 102 | 7 | % | $ | 28 | $ | 23 | 10/22/2017 | |||||||||
| Promissory note 5 | $ | 879 | 7 | % | $ | 237 | $ | 191 | 11/24/2017 | |||||||||
| Promissory note 6 | $ | 973 | 7 | % | $ | 279 | $ | 228 | 7/25/2018 | |||||||||
| Promissory note 7 | $ | 22,147 | 7 | % | $ | 3,914 | $ | 2,750 | 5/4/2017 | |||||||||
| Promissory note 8 | $ | 7,000 | 7 | % | $ | 886 | $ | 518 | 12/11/2016 | |||||||||
| Promissory note 9 | $ | 6,000 | 7 | % | $ | 747 | $ | 432 | 12/22/2016 | |||||||||
| Promissory note 10 | $ | 25,000 | 7 | % | $ | 3,030 | $ | 1,716 | 1/8/2017 | |||||||||
| Promissory note 11 | $ | 35,000 | 7 | % | $ | 4,054 | $ | 2,215 | 2/5/2017 | |||||||||
| Promissory note 12 | $ | 40,000 | 7 | % | $ | 4,158 | $ | 2,056 | 4/8/2017 | |||||||||
| Promissory note 13 | $ | 30,000 | 7 | % | $ | 2,963 | $ | 1,387 | 5/5/2017 | |||||||||
| Promissory note 14 | $ | 45,000 | 7 | % | $ | 4,013 | $ | 1,648 | 6/24/2017 | |||||||||
| Promissory note 15 | $ | 25,000 | 7 | % | $ | 2,066 | $ | 753 | 7/28/2017 | |||||||||
| Promissory note 16 | $ | 15,000 | 7 | % | $ | 1,174 | $ | 385 | 8/20/2017 | |||||||||
| Promissory note 17 | $ | 13,000 | 7 | % | $ | 937 | $ | 254 | 9/21/2017 | |||||||||
| Promissory note 18 | $ | 5,000 | 7 | % | $ | 351 | $ | 88 | 10/13/2017 | |||||||||
| Promissory note 19 | $ | 10,000 | 7 | % | $ | 646 | $ | 121 | 10/30/2017 | |||||||||
| Promissory note 20 | $ | 3,000 | 7 | % | $ | 167 | $ | 10 | 12/15/2017 | |||||||||
| Promissory note 21 | $ | 17,000 | 7 | % | $ | 949 | $ | 55 | 12/15/2017 | |||||||||
| Total | $ | 331,101 | $ | 39,109 | $ | 21,711 | ||||||||||||
POWERDYNE INTERNATIONAL, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS2020
The Company obtained short-term cash flow from a related party in the form of four demand notes in the aggregate principal amount of $6,504 during the period from 2012 through March 31, 2013, one demand note in the principal amount of $1,780 during the quarter ended March 31, 2016, and one demand note in the amount of $1,125 during the quarter ended June 30, 2016. Notes 1 and 2 were amended and extended during 2014, changing the maturity date to one year later than what was on original notes. Notes 3 and 4 were amended and extended during the quarter ended March 31, 2015, changing the maturity date to one year later than what was on original notes, and then amended and extended during the quarter ended March 31, 2016 changing the maturity date to two years later than what was on amended notes. The notes bear an interest rate of 7% per annum and are unsecured.
| Note | Principal | Rate | Accrued interest | Maturity | ||||||||||||||
| 9/30/16 | 12/31/15 | |||||||||||||||||
| Promissory note 1 | $ | 234 | 7 | % | $ | 62 | $ | 50 | 12/5/2017 | |||||||||
| Promissory note 2 | $ | 170 | 7 | % | $ | 46 | $ | 37 | 11/18/2017 | |||||||||
| Promissory note 3 | $ | 4,100 | 7 | % | $ | 1,048 | $ | 833 | 2/5/2018 | |||||||||
| Promissory note 4 | $ | 2,000 | 7 | % | $ | 511 | $ | 405 | 2/7/2018 | |||||||||
| Promissory note 5 | $ | 1,780 | 7 | % | $ | 63 | $ | - | 3/29/2018 | |||||||||
| Promissory note 6 | $ | 1,125 | 7 | % | $ | 20 | $ | - | 6/30/2018 | |||||||||
| Total | $ | 9,409 | $ | 1,750 | $ | 1,325 | ||||||||||||
The Company obtained short-term cash flow from a related party in the form of two demand notes in the aggregate principal amount of $18,000 during the year of 2013. Both notes were amended and extended during the quarter ended March 31, 2015, changing the maturity date to one year later than what was on original notes, and amended and extended during the quarter ended March 31, 2016 changing the maturity date to two years later than what was on amended notes. The notes bear an interest rate of 7% per annum and are unsecured.
| Note | Principal | Rate | Accrued interest | Maturity | ||||||||||||||
| 9/30/16 | 12/31/15 | |||||||||||||||||
| Promissory note 1 | $ | 10,000 | 7 | % | $ | 2,526 | $ | 2,000 | 2/21/2018 | |||||||||
| Promissory note 2 | $ | 8,000 | 7 | % | $ | 1,982 | $ | 1,562 | 3/18/2018 | |||||||||
| Total | $ | 18,000 | $ | 4,508 | $ | 3,562 | ||||||||||||
The Company obtained short-term cash flow from a related party in the form of one demand note in the principal amount of $6,000 during the year of 2014, three demand notes in the aggregate principal amount of $9,700 during the quarter ended March 31, 2016, one demand note in the principal amount of $11,500 during the quarter ended June 30, 2016, and one demand note in the principal amount of $5,100 during the quarter ended September 30, 2016. The notes bears an interest rate of 7% per annum and is unsecured.
| Note | Principal | Rate | Accrued interest | Maturity | ||||||||||||||
| 9/30/16 | 12/31/15 | |||||||||||||||||
| Promissory note 1 | $ | 6,000 | 7 | % | $ | 906 | $ | 590 | 8/6/2018 | |||||||||
| Promissory note 2 | $ | 2,500 | 7 | % | $ | 130 | $ | - | 1/4/2018 | |||||||||
| Promissory note 3 | $ | 4,200 | 7 | % | $ | 168 | $ | - | 2/5/2018 | |||||||||
| Promissory note 4 | $ | 3,000 | 7 | % | $ | 112 | $ | - | 3/20/2018 | |||||||||
| Promissory note 5 | $ | 11,500 | 7 | % | $ | 203 | $ | - | 6/30/2018 | |||||||||
| Promissory note 6 | $ | 5,100 | 7 | % | $ | 53 | $ | - | 8/8/2018 | |||||||||
| Total | $ | 32,300 | $ | 1,571 | $ | 590 | ||||||||||||
During the nine months ended September 30, 2016 the total amount of related party loan proceeds was $29,205. The total interest accrued on related party loans at September 30, 2016 and December 31, 2015 was $49,742 and $29,467, respectively.7. RELATED PARTY
From time to time, the Company advances amounts to stockholders, as well as receiveswe receive payments from stockholders in the form of cash and/or out-of-pocket expenditures for the benefit of the Company, which are business in nature. On December 11, 2018 we received a loan from a stockholder in the amount of $13,500, to be repaid in monthly installments of principal and interest beginning March 25, 2019. The balance of advances to stockholderthis loan as of September 30, 2016 and DecemberMarch 31, 20152021 was $-0- and $11,321, respectively.$13,677. The interest expense on this loan for the three months ended of March 31, 2021 was $597.
During the three months ended March 31, 2021 a related party advanced the Company $24,250. Amounts accrued, but not yet paid as due to related party at September 30, 2016on March 31, 2021 and December 31, 20152020 was $25,000$118,150 and $25,000,$93,000, respectively.
10.8. COMMITMENTS AND CONTINGENCIES
Litigation
There are no pending, threatened or actual legal proceedings in which the Company or any subsidiary is a party.
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ITEM 2. MANAGEMENT'SMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONINFORMATION AND RESULTS OF OPERATIONS.OPERATIONS
The following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our consolidated financial statements and the notes presented herein and the financial statements and the other information set forth in our Annual Report on Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange Commission on April 14, 2016. In addition to historical information, the following Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the Securities and Exchange Commission.
We haveare an operational company which has experienced losses since our inception. Our independent auditors have issuedinception, with the exception of the current quarter ended March 31, 2021 in which we had a report raising a substantial doubt about our ability to continue as a going concern. We have only entered into one agreement for the leasingnet income of our equipment to date and have derived minimal revenue from such agreement.$11,961. Our sources of cash to date have been capital invested by shareholders and venture capital investors/lenders. Our onlycumulative revenue $1,240,of $49,716 has come from two sources: 1) $1,240 from our one equipment lease agreement.agreement, which was terminated in September 2017 due to a natural disaster; and 2) $48,476 from crypto-mining revenue, of which $3,521 was received during the year ended December 31, 2020 and $36,577 was received during the three months ended March 31, 2021.
The basis of our overall business is founded on our ability to produce electrical power using state-of-the-art technology to power electrical generation equipment to produce electricity at a lower cost than the existing means of producing or providing primary electric power in its target markets. We expect that the difference between our cost to produce electrical power and the current billing rate of existing local utility providers will present savings for our customers and revenue opportunity for us.
Our business is to install and maintain, own, and operate electrical power generation equipment (“gensets”) at client locations. We will own and maintain the equipment to be installed with the customer who will use it to produce its own electrical power. Our products are intended to be portable, easy-to-use units that can be conveniently deployed in various locations around the world. The units can also be assembled and combined to produce power centers providing up to 50100 megawatts of power.
PlanDuring the 1st quarter of 2019 Powerdyne International, Inc. purchased several crypto currency miners and began mining certain crypto coins. This was done to conservatively enter into the crypto markets and explore other potential revenue producing opportunities for Powerdyne International, Inc.
During the quarter ended December 31, 2019 Powerdyne International accepted forgiveness of debt letters from the related party debt holders forgiving all unpaid debt and accrued interest owed to them individually, by the Corporation.
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During this same period Powerdyne International as part a corporate reorganization, accepted the resignation of the Director of the Corporation and as Chairman of the Board. The remaining directors unanimously resolved to elect James O’Rourke as Chairman of the Board. The Company then accepted the resignation of the remaining Board of Directors.
The following discussion contains forward-looking statements, as discussed above. Please see the sections entitled “Forward-Looking Condensed Statements” and “Risk Factors” for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.
Operations
The Company'sCompany’s strategy is to pursue selected opportunities in markets where inexpensive and environmentally friendly power sources are needed and/or required.
Results of Operations - The ninethree months ended September 30, 2016March 31, 2021 compared to the ninethree months ended September 30, 2015:March 31, 2020:
Revenues
Powerdyne International, Inc. did generate minimal revenues of $488 during the nine months ended September 30, 2016, and did generate revenues of $470 during the nine months ended September 30, 2015.
Total Operating Expenses
During the three months ended September 30, 2016,March 31, 2021 we generated $36,577 in revenue, and during the three months ended March 31, 2020 we generated $300 in revenue.
Operating expenses
During the three months ended March 31, 2021 total operating expenses decreased 89.98%increased 389.80% to $21,127$23,269 from $210,265$4,751 for the three months ended September 30, 2015. DuringMarch 31, 2020. The increase from the ninethree months ended September 30, 2016, total operating expenses decreased 58.41%March 31, 2020 to $145,876 from $350,773 for the ninethree months ended September 30, 2015. The decrease from the nine months ended September 30, 2015 to the nine months ended September 30, 2016March 31, 2021 is related primarily decreasesmainly due increases of $17,484 in salaries and wages, $14,367 in outside sales consultant, $3,722 in payroll tax expense, $4,506 in freight and delivery, $5,560$6,665 in filing fees, $4,220$11,953 in legal and accounting expense, $337 in other taxes expense, and $48 in telephone expense. These increases were offset by a decrease of $410 in stock registration fees $2,500and minor decreases in venture capital finders’bank service charges, payroll processing fees $20,428 in legal and accounting, $3,950 in permit fees, $4,400 in PR and promotion, $12,875 in materials andoffice supplies and $3,360 in travel expenses, $122,500 in non-employee stock compensation, $43,877 in derivative expense, and $138,260 in amortization of debt discounts, offset by increases of $1,760 in consulting fees, $7,388 in interest expense, $11,321 in bad debt expense, $2,338 in depreciation expense, and $50,345 in change in FV of derivatives.expense.
Net loss
DuringThe net income (loss) for the ninethree months ended September 30, 2016, the net loss decreased 69.87% toMarch 31, 2021 and 2020 was $11,961 and ($145,876) from ($482,984) for the nine months ended September 30, 2015. The decrease in net loss was a result of a decrease in other expenses which included amortization of debt expense, and derivative expense from the notes issued to investors and change in fair value of derivatives related to the note issuances.5,701), respectively.
Liquidity and Capital Resources
As of September 30, 2016March 31, 2021, and December 31, 2015,2020, we had working capital deficits of ($420,472)$151,366 and ($452,739), respectively and an accumulated deficit of $3,335,105. Our continuation as a going concern is dependent on our ability to generate sufficient cash flows from operations to meet our obligations and/or obtaining additional financing as may be required. To date, we have generated minimal revenue from operations. We have experienced losses since our inception. Our independent auditors have issued a report raising a substantial doubt about our ability to continue as a going concern. Our sources of cash to date have primarily been capital invested by shareholders and venture capital investors/lenders. Our only revenue, $488, has come from our one equipment lease agreement.$127,499, respectively. For the ninethree months ended September 30, 2016,March 31, 2021 we had a $1,789 decrease$2,925 increase in cash compared to the year end. The total net cash. The cash used inprovided by operations of ($30,994)$14,655 was primarily due to net lossincome from operations of $145,388$11,961 plus non-cash expensesincreases in depreciation expense of $9,942 of depreciation, $11,321 of bad debt expense, $30,050 of common stock issued for services$750 and stock compensation, $224 increase in accounts receivable, and a $63,305 increase$1,944 in accrued expenses. The total net cash used in investing activities of $36,577 was due to an increase in intangible asset – Cryptocurrency. The total net cash provided by financing activities of $29,205$24,847 was due to of proceeds of notes payable to related parties.
We currently owe $400,810 (exclusive of interest) under notes due to related parties,party of which $13,000 is due December 2016, $25,000 is due January 2017, $35,000 is due February 2017, $40,000 is due April 2017, $52,147 is due May 2017, $45,000 is due June 2017, $25,000 is due July 2017, $15,000 is due August 2017, $13,000 is due September 2017, $28,102 is due October 2017, $16,049 is due November 2017, $22,234 is due December 2017, $2,500 is due January 2018, $20,300 is due February 2018, $12,780 is due March 2018, $12,625 is due June 2018, $5,973 is due July 2018, $11,100 is due August 2018,$24,250 and $6,000 is due September 2018. Unless the note holdersproceeds from notes payable stockholder of currently due notes, convert their notes to stock, we will need to raise additional funds to repay our notes that are currently due. There can be no assurance that we will have the requisite funding to repay these loans when due.$597.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is deemed by our management to be material to investors.
Critical Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in Powerdyne International, Inc.’sour financial statements relate to estimate of loss contingencies and accrued other liabilities.
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Fair Value of Financial Instruments
ASC 820-10 (formerly SFAS No. 157,Fair Value Measurements) requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. ASC 820-10 defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of September 30, 2016March 31, 2021, and December 31, 2015,2020, the carrying value of certain financial instruments such as accounts receivable, accounts payable, notes payable-related parties, accrued expenses, and amounts due to/from related party approximates fair value due to the short-term nature of such instruments.
Impairment of Long-Lived Assets
In accordance with ASC 350-30 (formerly SFAS No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets), the Company evaluateswe evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that their then carrying values may not be recoverable. When such factors and circumstances exist, the Company compareswe compare the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. The Company’sOur management currently believes there is no impairment of its long-lived assets. There can be no assurance however, that market conditions will not change or demand for the Company’sour products under development will continue. Either of these could result in future impairment of long-lived assets.
ITEMItem 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Quantitative and Qualitative Disclosures About Market Risk
Not applicableAs a “small reporting company” we are not required to smaller reporting companies.provide this information under this item pursuant to Regulation S-K.
ITEM 4. CONTROLS AND PROCEDURES.PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2016.March 31, 2021. The term "disclosure“disclosure controls and procedures,"” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC'sSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company'scompany’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. disclosure
Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2016,March 31, 2021, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective at the reasonable assurance level due to the insufficient controls over timely financial statement preparation and review as well as over the preparation and review around accounting for certain complex transactions.
The design of monitoring controls used to assess the design and operating effectiveness of our internal controls is inadequate. We also do not have an adequate internal process to report deficiencies in internal control to management on a timely basis.
Changes in Internal Control over Financial Reporting
We continue to make progress towards remediating the material weaknesses in our internal control over financial reporting. The actions taken include, amongst others, (i) installing a new accounting system which allows us to implement appropriate procedures and processes necessary for adequate controls (ii) implementing month end and period end closing procedures and review processes for key aspects of our financial reporting process, (iii) designing, documenting, and implementing policies and procedures; and (iv) instituting formal procedures for accounting for options.
No other changes in our internal control over financial reporting occurred during the quarter ended September 30, 20162020 that have materially affected, or are reasonably likely to materially affect, the Company'sCompany’s internal control over financial reporting.
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ITEM 1. LEGAL PROCEEDINGS.PROCEEDINGS
There areis no pending, threatened or actual legal proceedings in which the Company or any subsidiary is a party.
As a “smaller reporting company”, we are not required to provide this information under this item pursuant to Regulation S-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES.DISCLOSURES
Not applicable.applicable
ITEM 5. OTHER INFORMATION.INFORMATION
None.None
ITEMItem 6. EXHIBITS.Exhibits.
(a) Exhibits.
| Item |
| 31.1* | Certification of | |
| Certification of | ||
| Certification of | ||
| 101.INS | XBRL Instance Document | |
| 101.SCH | XBRL Taxonomy Extension Schema Document | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
* Filed herewith.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| POWERDYNE INTERNATIONAL, INC. | ||
| Dated: | By: | /s/ James F. O’Rourke |
Chief Executive Officer (Principal Executive Officer) | ||
| ||
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