Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x (Mark One)

☒QUARTERLY REPORT UNDER SECTION 13 OR 15(d)15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended SeptemberJune 30, 20172021

or

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

For the transition period from __________ to ______________________to _____________

Commission file number 000-54464

THUNDER ENERGIES CORPORATION

(Exact Name of Registrant as specified in its charter)

Florida		45-1967797
(State or jurisdiction of Incorporation or organization)organization		(I.R.S Employer Identification No.)

1444 Rainville Road, Tarpon Springs, Florida 3017 Greene St., Hollywood, FL		34689 33020
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area codecode: 727-940-3944786686 0231

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

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. x☒ Yes¨ ☐ No

Indicate by check markcheckmark 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 Rulerule 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). x☒ Yes¨ ☐ No

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

Large accelerated filer Filer	¨ ☐		Accelerated filer Filer	¨ ☐
Non-accelerated filer Filer	¨ ☐		Smaller Reporting Company reporting company	x ☒
		Emerging growth company	x ☒

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

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ¨ ☒ Nox.

The number of shares outstanding of the issuer’s common stock,Common Stock, $0.001 par value, $.001 per share, outstanding as of November 10, 2017August 16, 2021 was 17,078,743.76,340,735 shares.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This quarterly report on Form 10-Q contains certain forward-looking statements. Forward-looking statements may include our statements regarding our goals, beliefs, strategies, objectives, plans, including product and service developments, future financial conditions, results or projections or current expectations. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms, or other comparable terminology. For example, when we discuss our pursuit of strategic transactions including acquisitions, dispositions, capital raising and debt restructuring, that our revenues will increase in 2021, and that we intend to invest in sales, marketing, product development and innovation, we are using forward-looking statements. These statements are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results to be materially different from those contemplated by the forward-looking statements. These factors include, but are not limited to, our ability to implement our strategic initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. The business and operations of Thunder Energies Corporation are subject to substantial risks, which increase the uncertainty inherent in the forward-looking statements contained in this report. Except as required by law, we undertake no obligation to release publicly the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Further information on potential factors that could affect our business is described under “Item 1A. Risk Factors” in our restated annual report on Form 10-K as filed with the Securities and Exchange Commission, or the SEC, on August 2, 2021 and in this quarterly report on Form 10-Q. Readers are also urged to carefully review and consider the various disclosures we have made in this report and in our annual report on Form 10-K.”

THUNDER ENERGIES CORPORATION

Quarterly Period Ended June 30, 2021

TABLE OF CONTENTS

TABLE OF CONTENTS

				Page
PART I – FINANCIAL INFORMATION
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Financial Statements (unaudited)			4
Item 1.	Condensed Financial Statements.			3
	Condensed Balance Sheets as of September– June 30, 20172021 (unaudited) and December 31, 2016 (audited).2020			3 4
	Condensed Statements of Operations – Three and six months ended June 30, 2021 and 2020 (unaudited)			5
	Condensed Statements of Changes in Stockholders’ Deficit for the threeThree and ninesix months ended SeptemberJune 30, 20172021 and September 30, 20162020 (unaudited).			4 6
	Condensed Statements of Cash Flows for the nine– Six months ended SeptemberJune 30, 20172021 and 20162020 (unaudited)			5 7
	Notes to the Condensed Financial Statements (unaudited).			6 8
Item 2.	Management’sManagement's Discussion and Analysis of Financial Condition and Results of Operations.Operations			16 29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk			22 51
Item 4.	Controls and Procedures.Procedures			23 51
PART II.II – OTHER INFORMATION.INFORMATION
Item 1.	Legal Proceedings.Proceedings			23 54
Item 1A.		Risk Factors			23
Item1A.	Risk Factors			54
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.Proceeds			24
Item 3.	Defaults Upon Senior Securities.			25
Item 4.	Mine Safety Disclosures.			25
Item 5.	Other Information.			25
Item 6.	Exhibits.			25
Signatures

2
54
Item 3.	Defaults Upon Senior Securities			54
Item 4.	Mine Safety Disclosure			54
Item 5.	Other Information			54
Item 6.	Exhibits			55
	Signatures			57

Part I. Financial InformationPART I – FINANCIAL INFORMATION

Item 1. Condensed Financial Statements.

THUNDER ENERGIES CORPORATION

THUNDER ENERGIES CORPORATION Condensed Balance Sheets
		September 30,				December 31,
		2017				2016
ASSETS
Current Assets
Cash		$	36,540			$	961
Total Current Assets			36,540				961
Non-current assets
Intangible assets, net of accumulated amortization and impairment of $15,070 and $14,920, respectively			250				400
Total non-current assets			250				400
TOTAL ASSETS		$	36,790			$	1,361
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable		$	450			$	---
Deposits			170,012				---
Accrued interest			29,728				20,905
Accrued compensation, related parties			63,000				865,846
Note payable, related parties			522,000				532,500
Total Current Liabilities			785,190				1,419,251
TOTAL LIABILITIES			785,190				1,419,251
COMMITMENTS AND CONTINGENCIES
Stockholders' Deficit
Preferred stock: $0.001 par value, 750,000,000 authorized;
50,000,000 and 50,000,000 shares issued and outstanding, respectively			50,000				50,000
Common stock: $0.001 par value 900,000,000 authorized;
42,519,708 and 17,136,743 shares issued and outstanding, respectively			42,520				17,137
Additional paid in capital			2,043,885				877,908
Accumulated deficit			(2,884,805	)			(2,362,935	)
Total Stockholders' Deficit			(748,400	)			(1,417,890	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	36,790			$	1,361

Condensed Balance Sheets

See notes to condensed financial statements

THUNDER ENERGIES CORPORATION

Condensed Statements of Operations

(Unaudited)

See notes to financial statements

THUNDER ENERGIES CORPORATION Condensed Statements of Operations (Unaudited)
		For the Three Months Ended								For the Nine Months Ended
		September 30,								September 30,
		2017				2016				2017				2016
REVENUE		$	---			$	---			$	---			$	12,610
OPERATING EXPENSES
Research and development			45,229				6,507				70,810				31,845
Professional fees			55,775				42,389				238,172				141,643
Selling, general and administrative expenses			51,881				57,610				181,040				171,521
Total operating expenses			152,885				106,506				490,022				345,009
Net loss from operations			(152,885	)			(106,506	)			(490,022	)			(332,399	)
Other income (expense)
Interest expense			(24,654	)			(2,764	)			(31,848	)			(7,752	)
Interest expense related to derivative liability			31,000				---				---				---
Change in derivative			118,698				---				---				---
Net loss before income taxes			(27,041	)			(109,270	)			(521,870	)			(340,151	)
Income taxes			---				---				---				---
Net loss		$	(27,041	)		$	(109,270	)		$	(521,870	)		$	(340,151	)
Basic and diluted loss per share		$	(0.00	)		$	(0.01	)		$	(0.02	)		$	(0.02	)
Weighted average number of
shares outstanding			36,487,737				17,020,019				25,218,938				16,889,251

THUNDER ENERGIES CORPORATION

Condensed Statements of Changes in Stockholders’ Equity (Deficit)

(Unaudited)

See notes to condensed financial statements

THUNDER ENERGIES CORPORATION

Condensed Statements of Cash Flows

(Unaudited)

THUNDER ENERGIES CORPORATION Condensed Statements of Cash Flows
		For the Nine Months Ended September 30,
		2017				2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(521,870	)		$	(340,151	)
Adjustment to reconcile net loss to net cash used in in operations:
Amortization			150				150
Stock based compensation			1,111,360				62,356
Changes in assets and liabilities:
Increase (decrease) in operating liabilities:
Accounts payable			450				(2,101	)
Deposits			170,012				---
Accrued interest			8,823				7,752
Accrued expenses, related parties			(802,846	)			189,000
Net Cash used in operating activities			(33,921	)			(82,994	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment made for patent			---				(3,665	)
Net Cash used in investing activities			---				(3,665	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from shareholder loans			29,500				81,500
Principal payments on shareholder loans			(40,000	)			---
Proceeds from sale of stock			80,000				---
Net Cash provided by financing activates			69,500				81,500
Net increase in cash			35,579				(5,159	)
Cash
Beginning of period			961				12,822
End of period		$	36,540			$	7,663
Supplemental cash flow information
Cash paid for interest		$	---			$	---
Cash paid for taxes		$	---			$	---

See notes to condensed financial statements.statements 

THUNDER ENERGIES CORPORATION

Notes to Condensed Financial Statements

(Unaudited)

For the period ending SeptemberThree and Six Months Ended June 30, 20172021 and 2020

(Unaudited)

NOTE 1 – NATURE OF BUSINESS

Corporate History and Background

Thunder Energies Corporation (“we”, “us”, “our”, “TEC” or the “Company”) was incorporated in the State of Florida on April 21, 2011.

On July 29, 2013, the Company filed with the Florida Secretary of State, Articles of Amendment to its Articles of Incorporation (the “Amendment”) which changed the name of the Company from CCJ Acquisition Corp. to Thunder Fusion Corporation. The Amendment also changed the principal office address of the Company to 150 Rainville Road, Tarpon Springs, Florida 34689. On May 1, 2014, the Company filed with the Florida Secretary of State, Articles of Amendment to its Articles of Incorporation (the “Amendment”) which changed the name of the Company from Thunder Fusion Corporation to Thunder Energies Corporation. The Amendment alsoCompany subsequently changed theits principal office address to 3017 Greene St., Hollywood, Florida 33020.

Acquisition of TNRG Preferred Stock

On July 1, 2020, Yogev Shvo, a third party individual and principal shareholder of Nature Consulting LLC (“Nature” or “Purchaser”) personally acquired 100% of the Company to 1444 Rainville Road, Tarpon Springs,issued and outstanding shares of preferred stock (the “Preferred Stock”) of TNRG from Saveene Corporation, a Florida 34689.corporation (the “Seller”) (The “Purchase”). The purchase price of $250,000 for the Preferred Stock was paid in cash and was provided from the individual private funds of Purchaser.

The business of Thunder Energies Corporation ("TEC") is focused, depending on funding, on the manufacturing, sale and service of three new cutting edge technologies (patents and trademarks pending): the new Santilli telescopes with concave lenses; the new hadronic reactors for the synthesis of the neutron from the hydrogen gas, and the new HyperFurnaces for the full combustion of fossil fuels. As we are a development stage company, we have not yet generated any revenue from the assets that were recently assigned to andPreferred Stock acquired by the Company, including the Hadronic reactors.Purchaser consisted of:

Acquisition of Assets of Nature

On August 14, 2020 (the “Closing Date”), TNRG and the members of Nature entered into an Interest Purchase Agreement (the “Interest Purchase Agreement”), which closed on the same date.  Pursuant to the terms of the Interest Purchase Agreement, the members of Nature sold all of their membership interests in Nature to TNRG in exchange for sixty million (60,000,000) shares of TNRG’s Common Stock. As a result of this transaction, Nature became a wholly-owned subsidiary of TNRG.

The Interest Purchase Agreement contained customary representations and warranties and pre- and post-closing covenants of each party and customary closing conditions.  Breaches of the representations and warranties will be subject to customary indemnification provisions, subject to specified aggregate limits of liability.

The membership Interest Purchase Agreement will be treated as a reverse acquisition by the Company for financial accounting purposes.  Nature will be considered the acquirer for accounting purposes, and the historical financial statements of Nature, before the membership exchange will replace the historical financial statements of TNRG before the membership exchange and in all future filings with the SEC.

Immediately following the Interest Purchase Agreement, the business of Nature became TNRG’s main operation.  Nature is the premier source of turnkey CBD and Hemp extract solutions. The Company was formed on January 19, 2019.

Description of Business, Principal Products, Services

Nature Consulting LLC’s Mission

Our mission is to be the leading seed-to-sale manufacturer and supplier of high-quality CBD and hemp products in the industry. We have identified the following issues as our critical drivers:

Nature Consulting LLC’s Product Portfolio

On August 14, 2020, we announced the closing of the acquisition of Nature. Nature manufactures, markets and distributes U.S. hemp-derived supplements and cosmetic products through e-commerce and wholesale distribution in the U.S. under the brand The Hemp Plug. Nature is an innovative leader in quality extraction and sourcing, expert brand building, and targeted marketing for retailers and wholesalers throughout the world. From customization to order fulfillment to brand development and label design, THP provides guided support every step of the way through tailored business strategy. It features the largest collection of customizable CBD and hemp products on the market.

The Company is committed to building a portfolio of iconic brands that responsibly elevate the consumer experience.

In the U.S., the Company markets and distributes solely U.S. hemp-derived supplements and cosmetics products through e-commerce and wholesale distribution under the brands The Hemp Plug.

The Company sells a variety of CBD and hemp products, including hemp flower, pre-rolls and hemp extracts (in the form of tinctures and vaporizers), U.S. hemp-derived supplements, and cosmetics through wholesale and direct-to-client channels.

NOTE 2 – GOING CONCERNBasis of Presentation

The accompanying interim unaudited condensed financial statements (“Interim Financial Statements”) of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and are presented in accordance with the requirements of Rule 10-01 of Regulation S-X. Accordingly, these Interim Financial Statements do not include all of the information and notes required by GAAP for complete financial statements. These Interim Financial Statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2020 included in the Form 10-K filed with the SEC on August 2, 2021. In the opinion of management, the Interim Financial Statements included herein contain all adjustments, including normal recurring adjustments, considered necessary to present fairly the Company’s financial position, the results of operations and cash flows for the periods presented. The operating results and cash flows of the interim periods presented herein are not necessarily indicative of the results to be expected for any other interim period or the full year.

The Company currently operates in one business segment. The Company is not organized by market and is managed and operated as one business. A single management team reports to the chief operating decision maker, the Chief Executive Officer, who comprehensively manages the entire business. The Company does not currently operate any separate lines of businesses or separate business entities.

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented.

Going Concern

The Company had an accumulated deficit of approximately $972,000 at June 30, 2021, had a working capital deficit of approximately $1,511,000 at June 30, 2021, had net loss of approximately $109,000 and $324,000 for the three and six months ended June 30, 2021, respectively, and a net profit of approximately $644,000 and $823,000 for the three and six months ended June 30, 2020, respectively, and net cash provided by operating activities of approximately $85,000 and $665,000 for the six months ended June 30, 2021 and 2020, respectively, with limited revenue earned since inception, and a lack of operational history. These matters raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating cost and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company include, obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The condensed financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 - – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

UNAUDITED INTERIM FINANICAL STATEMENTSThis summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to GAAP and have been consistently applied in the preparation of the financial statements.

Use of Estimates

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United Statespreparation of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The interim financial statements should be read in conjunction with the annual financial statements included in the Form 10K/A as of December 31, 2016 and filed with the Securities and Exchange Commission on April 14, 2017.

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year.

BASIS OF PRESENTATION AND USE OF ESTIMATES

The Company prepares itsthese financial statements in conformityaccordance with accounting principles generally accepted in the United States of America ("GAAP"), which requirerequires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosuredisclosures of contingent assets and liabilities at the datedates of the financial statements and the reported amounts of revenuesnet sales and expenses during the reporting period.reported periods. Actual results couldmay differ from those estimates.estimates and such differences may be material to the financial statements. The more significant estimates and assumptions by management include among others: inventory valuation, amortization of intangible assets, depreciation of property and equipment, allowance for doubtful accounts, the recoverability of intangibles, derivative valuation, and lease asset amortization. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.

THUNDER ENERGIES CORPORATION

Notes to Condensed Financial Statements

For the period ending September 30, 2017

(Unaudited)

CASH AND CASH EQUIVALENTSCash

The Company’s cash is held in bank accounts in the United States and is insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The Company considers all highly liquid investments with an original maturityhas not experienced any cash losses.

Accounts Receivable

Accounts receivable are non-interest-bearing obligations due under normal course of three months or less atbusiness. Management reviews accounts receivable on a monthly basis to determine if any receivables will be potentially uncollectible. Historical bad debts and current economic trends are used in evaluating the date of acquisitionallowance for doubtful accounts. The Company includes any accounts receivable balances that are determined to be cash equivalents. Cashuncollectible in its overall allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available, the Company has an allowance for doubtful accounts of $100,000 and cash equivalents totaled $36,540 at September$14,350 as of June 30, 20172021 and $961 at December 31, 2016. During the period ending June 30, 2017 the Company experienced fraudulent checks written against the corporation bank account totaling $14,200. The bank investigated the fraudulent activity and reimbursed the Company $14,200 during the period2020, respectively.

CASH FLOWS REPORTINGCash Flows Reporting

The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, andcategory. The Company uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.

RELATED PARTIESRelated Parties

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company.

Income Taxes

As a result of the Company’s Interest Purchase Agreement, the Company converted to a corporation (“Conversion”). Beginning on August 14, 2020, the Company’s results of operations are taxed as a C Corporation. Prior to the Conversion, the Company’s operations were taxed as a limited liability company, whereby the Company elected to be taxed as a partnership and the income or loss was required to be reported by each respective member on their separate income tax returns. Therefore, no provision for income taxes has been provided in the accompanying consolidated financial statements for periods prior to August 14, 2020.

Income taxes are accounted for under an asset and liability approach. This process involves calculating the temporary and permanent differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The temporary differences result in deferred tax assets and liabilities, which would be recorded on the Balance Sheets in accordance with ASC 740, which established financial accounting and reporting standards for the effect of income taxes. The likelihood that its deferred tax assets will be recovered from future taxable income must be assessed and, to the extent that recovery is not likely, a valuation allowance is established. Changes in the valuation allowance in a period are recorded through the income tax provision in the consolidated Statements of Operations.

ASC 740-10-30 was adopted from the date of its inception. ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s consolidated financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740-10, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740-10 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a result of the implementation of ASC 740-10 and currently, the Company does not have a liability for unrecognized income tax benefits.

Advertising and Marketing Expenses

Advertising and marketing expenses are recorded as marketing expenses when they are incurred. Advertising and marketing expense was $201,382 and $351,967, and $54,902 and $173,645 for the three and six months ended June 30, 2021 and 2020, respectively.

Revenue Recognition

On January 19, 2019 (date of formation), the Company adopted Accounting Standards Codification ASC 606 (“ASC 606”), FINANCIAL INSTRUMENTSRevenue from Contracts with Customers. Results for the reporting periods beginning on January 19, 2019 (date of formation) are presented under ASC 606.

The Company’sCompany generates all of its revenue from contracts with customers. The Company recognizes revenue when we satisfy a performance obligation by transferring control of the promised services to a customer in an amount that reflects the consideration that we expect to receive in exchange for those services. The Company determines revenue recognition through the following steps:

At contract inception, the Company assesses the services promised in our contracts with customers and identifies a performance obligation for each promise to transfer to the customer a service (or bundle of services) that is distinct. To identify the performance obligations, the Company considers all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. The Company allocates the entire transaction price to a single performance obligation.

A description of our principal revenue generating activities are as follows:

Sales – The Company offers consumer CBD and hemp products through its online websites. During the three and six months ended June 30, 2021 and 2020, the Company recorded sales of $1,852,431 and $3,443,682, and $1,510,068 and $2,226,539, respectively.

Mask sales – As a result of the COVID 19 pandemic, in 2020, the Company entered into the sale of KN95 masks but had to dispose of them at a loss. During the three and six months ended June 30, 2021 and 2020, the Company recorded mask sales of $0 and $0, and $2,806,700 and $3,054,200, respectively.

The Company evaluates whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. Generally, when the Company is primarily obligated in a transaction, are subject to inventory risk, have latitude in establishing prices and selecting suppliers, or have several but not all of these indicators, revenue is recorded at the gross sale price. The Company generally records the net amounts as commissions earned if we are not primarily obligated and do not have latitude in establishing prices.

Revenue is recognized when the product is shipped to the customer, provided that collection of the resulting receivable is reasonably assured. The Company primarily provides for no credit terms as it collects a deposit of 50% upon order and requires the remaining 50% be paid before the order is shipped. When credit terms are granted, terms of up to 120 days are provided, based on credit evaluations. Allowances, though not material, has been provided for uncollectible accounts. Management has evaluated the receivables and believes they are collectible based on the nature of the receivables, historical experience of credit losses, and all other currently available evidence. Discounts are recorded as a reduction of the transaction price. Revenue excludes any amounts collected on behalf of third parties, including sales taxes.

Customer Advance Payments

Customer advance payments consists of customer orders paid in advance of the delivery of the order. Customer advance payments are classified as short-term as the typical order ships within approximately three weeks of placing the order. Customer advance payments are recognized as revenue when the product is shipped to the customer and all other revenue recognition criteria have been met. Customer advance payments were $67,098 and $522,258, as of June 30, 2021 and December 31, 2020, respectively, which were recognized as revenue during the subsequent period. Customer advance payments are included in current liabilities in the accompanying condensed consolidated Balance Sheets.

Inventories

The Company manufactures its own products made to order and when completed are shipped to the customer. The Company's inventories are valued by the first-in, first-out ("FIFO") cost method and are stated at the lower of cost or net realizable value. The Company had inventory of $100,800 and $168,470, mostly consisting of raw materials, as of June 30, 2021 and December 31, 2020, respectively.

Property and Equipment

Property and equipment are carried at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets, generally five years. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Fixed assets are examined for the possibility of decreases in value when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.

Intangible Assets

Intangible assets consist primarily of developed technology – website applications. Our intangible assets are being amortized on a straight-line basis over a period of five years.

Impairment of Long-lived Assets

We periodically evaluate whether the carrying value of property, equipment and intangible assets has been impaired when circumstances indicate the carrying value of those assets may not be recoverable. The carrying amount is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying value is not recoverable, the impairment loss is measured as the excess of the asset’s carrying value over its fair value. There are 0 impairments as of June 30, 2021 and December 31, 2020.

Our impairment analysis requires management to apply judgment in estimating future cash flows as well as asset fair values, including forecasting useful lives of the assets, assessing the probability of different outcomes, and selecting the discount rate that reflects the risk inherent in future cash flows. If the carrying value is not recoverable, we assess the fair value of long-lived assets using commonly accepted techniques, and may use more than one method, including, but not limited to, recent third-party comparable sales and discounted cash flow models.  If actual results are not consistent with our assumptions and estimates, or our assumptions and estimates change due to new information, we may be exposed to an impairment charge in the future.

Leases

In accordance with ASC 842, Leases, the Company determines whether an arrangement contains a lease at inception. A lease is a contract that provides the right to control an identified asset for a period of time in exchange for consideration. For identified leases, the Company determines whether it should be classified as an operating or finance lease. Operating leases are recorded in the balance sheet as: right-of-use asset (“ROU asset”) and operating lease liability. ROU asset represents the Company’s right to use an underlying asset for the lease term and lease liability represents the Company’s obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at the commencement date of the lease and measured based on the present value of lease payments over the lease term. The ROU asset also includes deferred rent liabilities. The Company’s lease arrangement generally do not provide an implicit interest rate. As a result, in such situations the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option in the measurement of its ROU asset and liability. Lease expense for the operating lease is recognized on a straight-line basis over the lease term. The Company has a lease agreement with lease and non-lease components, which are accounted for as a single lease component.

Fair Value of Financial Instruments

The provisions of accounting guidance, FASB Topic ASC 825 requires all entities to disclose the fair value of financial instruments, including cash,both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines 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 June 30, 2021, the fair value of accounts receivable, accounts payable, accrued expenses, derivative liability, and notes payable. Thepayable approximated carrying amounts of current assets and current liabilities approximate their fair value becausedue to the short maturity of the relatively short period of time between the origination of these instruments, and their expected realization.quoted market prices or interest rates which fluctuate with market rates.

ASC 820, Fair Value Measurements and Disclosures, defines fair

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. ASC 820 also establishes aValuation techniques used to measure fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs)must maximize the use of observable inputs and (2) an entity’s own assumptions about market participant assumptions developed based onminimize the best information available in the circumstances (unobservable inputs).use of unobservable inputs. The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Theis based on three levels of inputs, of which the fair value hierarchyfirst two are described below:considered observable and the last unobservable, as follows:

	•	Level 1		Unadjusted quoted – Quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities.
	•	Level 2		– Inputs other than quoted prices included within Level 1 that are observable, for the asset or liability, either directly or indirectly, includingsuch as quoted prices for similar assets or liabilities in active markets;liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; inputsor other than quoted pricesinputs that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from orcan be corroborated by observable market data by correlationfor substantially the full term of the assets or other means. liabilities.
	•	Level 3		Inputs – Unobservable inputs that are bothsupported by little or no market activity and that are significant to the measurement of the fair value measurement and unobservable. of the assets or liabilities

THUNDER ENERGIES CORPORATION

Notes to Condensed Financial Statements

For the period ending September 30, 2017

(Unaudited)

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2017. The respective carrying value of certain on-balance-sheetfinancial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. There were no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. There have been no transfers between levels.

The derivatives are evaluated under the hierarchy of ASC 480-10, ASC Paragraph 815-25-1 and ASC Subparagraph 815-10-15-74 addressing embedded derivatives. The fair value of the Level 3 financial instruments approximated their fair values due towas performed internally by the short-term nature of these instruments.Company using Black-Scholes valuation method.

The following table summarize the Company’s fair value measurements by level at June 30, 2021 for the assets measured at fair value on a recurring basis:

INTANGIBLE ASSETS

The Company has appliedfollowing table summarize the provisions of ASC topic 350 – Intangible – goodwill and other, in accountingCompany’s fair value measurements by level at December 31, 2020 for its intangible assets. Intangiblethe assets are being amortizedmeasured at fair value on a straight-line methodrecurring basis:

Debt

The Company issues debt that may have separate warrants, conversion features, or no equity-linked attributes.

Debt with warrants – When the Company issues debt with warrants, the Company treats the warrants as a debt discount, record as a contra-liability against the debt, and amortize the balance over the life of the underlying debt as amortization of debt discount expense in the statements of operations.  When the warrants require equity treatment under ASC 815, the offset to the contra-liability is recorded as additional paid in capital in our balance sheet.  When the Company issues debt with warrants that require liability treatment under ASC 815, such as a clause requiring repricing, the warrants are considered to be a derivative that is recorded as a liability at fair value. If the initial value of the warrant derivative liability is higher than the fair value of the associated debt, the excess is recognized immediately as interest expense. The warrant derivative liability is adjusted to its fair value at the end of each reporting period, with the change being recorded as expense or gain to Other (income)/ expense in the Statements of Operations.  If the debt is retired early, the associated debt discount is then recognized immediately as amortization of debt discount expense in the statement of operations.  The debt is treated as conventional debt.

Convertible debt – derivative treatment – When the Company issues debt with a conversion feature, we must first assess whether the conversion feature meets the requirements to be treated as a derivative, as follows: a) one or more underlyings, typically the price of our common stock; b) one or more notional amounts or payment provisions or both, generally the number of shares upon conversion; c) no initial net investment, which typically excludes the amount borrowed; and d) net settlement provisions, which in the case of convertible debt generally means the stock received upon conversion can be readily sold for cash. An embedded equity-linked component that meets the definition of a derivative does not have to be separated from the host instrument if the component qualifies for the scope exception for certain contracts involving an issuer’s own equity. The scope exception applies if the contract is both a) indexed to its own stock; and b) classified in shareholders’ equity in its statement of financial position.

If the conversion feature within convertible debt meets the requirements to be treated as a derivative, we estimate the fair value of the convertible debt derivative using Monte Carlo Method upon the date of issuance. If the fair value of the convertible debt derivative is higher than the face value of the convertible debt, the excess is immediately recognized as interest expense. Otherwise, the fair value of the convertible debt derivative is recorded as a liability with an offsetting amount recorded as a debt discount, which offsets the carrying amount of the debt. The convertible debt derivative is revalued at the end of each reporting period and any change in fair value is recorded as a gain or loss in the statement of operations. The debt discount is amortized through interest expense over the life of the debt.

Convertible debt – beneficial conversion feature – If the conversion feature is not treated as a derivative, we assess whether it is a beneficial conversion feature (“BCF”). A BCF exists if the conversion price of the convertible debt instrument is less than the stock price on the commitment date. This typically occurs when the conversion price is less than the fair value of the stock on the date the instrument was issued. The value of a BCF is equal to the intrinsic value of the feature, the difference between the conversion price and the common stock into which it is convertible, and is recorded as additional paid in capital and as a debt discount in the balance sheet. The Company amortizes the balance over the life of the underlying debt as amortization of debt discount expense in the statement of operations. If the debt is retired early, the associated debt discount is then recognized immediately as amortization of debt discount expense in the Statement of Operations.

If the conversion feature does not qualify for either the derivative treatment or as a BCF, the convertible debt is treated as traditional debt.

Earnings (Loss) per Share

The unaudited computation of net profit (loss) per share included in the Statements of Operations, represents the net profit (loss) per share that would have been reported had the Company been subject to ASC 260, “Earnings Per Share as a corporation for all periods presented.

Diluted earnings (loss) per share are computed on the basis of a useful life of 5 to 17 years. The balance at September 30, 2017 and December 31, 2016 was $250 and $400, respectively.

September 30, 2017		Gross Carrying Value				Accumulated Amortization
Intellectual property		$	1,000			$	750
Patents			14,320				14,320

December 31, 2016		Gross Carrying Value				Accumulated Amortization
Intellectual property		$	1,000			$	600
Patents			14,320				14,320

IMPAIRMENT OF LONG- LIVED ASSETS

The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The assets are subject to impairment consideration under FASB ASC 360-10-35-17 if events or circumstances indicate that their carrying amount might not be recoverable. When the Company determines that an impairment analysis should be done, the analysis will be performed using the rules of FASB ASC 930-360-35, Asset Impairment, and 360-0 through 15-5, Impairment or Disposal of Long- Lived Assets.

NON-MONETARY TRANSACTION

According to ASC 845-10-S99, transfers of non-monetary assets to a company by its promoters or shareholders in exchange for stock prior to or at the time of the entity’s initial public offering should be recorded at the transferors’ historical cost basis determined under Generally Accepted Accounting Principles. As such, the cost basis carried on Hyfuel’s books and records was nominal. Therefore, the accounting principles in ASC 845-10-S99 were followed and the Company recorded the intellectual and physical properties at its historical cost basis, which was at the historical cost basis of a nominal amount. In the transfer agreement 1,000,000 shares of common stock was transferred in exchange for the properties.

REVENUE RECOGNITION

The Company recognizes revenue when it is realized or realizable and earned.

The Company considers revenue realized or realizable and earned when all of the following criteria are met:

	o	persuasive evidence of an arrangement exists
	o	the product has been shipped or the services have been rendered to the customer
	o	the sales price is fixed or determinable
	o	collectability is reasonably assured.

The Company generates revenue through their optical division which produces for sale its Galileo and Santilli telescopes and its Division of Nuclear Instruments which produces for sale its Directional Neutron Source.

The Company had zero revenues for the three and nine months ended September 30, 2017. For the three and nine months ended September 30, 2016 the Company recognized revenues of $0 and $12,610; respectively. The Galileo and Santilli telescopes made up 100% of the sales for the three and nine months ended September 30, 2016.

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THUNDER ENERGIES CORPORATION

Notes to Condensed Financial Statements

For the period ending September 30, 2017

(Unaudited)

RESEARCH AND DEVELOPMENT

The Company expenses research and development costs when incurred. Research and development costs include engineering and testing of product and outputs. Indirect costs related to research and developments are allocated based on percentage usage to the research and development. We spent $45,229 and $6,507 for the three months ended September 30, 2017 and 2016; respectively. We spent $70,810 and $31,845 for the nine months ended September 30, 2017 and 2016, respectively.

DEFERRED INCOME TAXES AND VALUATION ALLOWANCE

The Company accounts for income taxes under ASC 740, Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized as of September 30, 2017 or December 31, 2016.

NET LOSS PER COMMON SHARE

Net loss per share is calculated in accordance with ASC 260, “Earnings Per Share.” The weighted-average number of common shares outstanding during each period is used to compute basic earning or loss per share. Diluted earnings or loss per share is computed using the weighted average number of common shares and diluted(including common stock subject to redemption) plus dilutive potential common shares outstanding. Dilutive potential common sharesoutstanding for the reporting period. In periods where losses are additional common shares assumed to be exercised.

Basic net loss per common share is based onreported, the weighted averageweighted-average number of shares of common stock outstanding at September 30, 2017. As of September 30, 2017, theexcludes common stock equivalents, have not been included as they arebecause their inclusion would be anti-dilutive.

The following potentially dilutive securities were excluded from the calculation of diluted net loss per share because the effects were anti-dilutive based on the application of the treasury stock method and because the Company incurred net losses during the period:

		Nine months ended September 30,
		2017				2016
Options to purchase shares of common stock*			7,530				4,959
Series A convertible preferred stock**			50,000,000				50,000,000
Total potentially dilutive shares			50,007,530				50,004,959

________

* Options to purchase shares are calculated in accordance with employment agreements.Commitments and Contingencies

**-Total potentially dilutive shares reflects a 10 for 1 conversion into common shares per its designation.

SHARE-BASED EXPENSE

ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

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THUNDER ENERGIES CORPORATION

Notes to Condensed Financial Statements

For the period ending September 30, 2017

(Unaudited)

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable:(a) the goods or services received; or (b) the equity instruments issued.

Share-based expense for the nine months ended September 30, 2017 and 2016 was $1,111,360 and $62,356 respectively.

COMMITMENTS AND CONTINGENCIES

The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no known commitments or contingencies as of SeptemberJune 30, 20172021 and December 31, 2016.2020.

Concentrations, Risks, and Uncertainties

RECENT ACCOUNTING PRONOUNCEMENTS

Business Risk

Substantial business risks and uncertainties are inherent to an entity, including the potential risk of business failure.

From time to time, new accounting pronouncements are issued that we adopt as of

The Company is headquartered and operates in the specified effective date. We believeUnited States. To date, the Company has generated limited revenues from operations. There can be no assurance that the impact of recently issued standards that are not yet effective mayCompany will be able to successfully continue to produce its products and failure to do so would have an impacta material adverse effect on ourthe Company’s financial position, results of operations and financial statements.cash flows. Also, the success of the Company’s operations is subject to numerous contingencies, some of which are beyond management’s control. These contingencies include general economic conditions, price of raw material, competition, and governmental and political conditions.

ASU Update 2014-09 Revenue from Contracts with Customers (Topic 606) issued May 28, 2014 by FASB and IASB converged guidance on recognizing revenue in contracts with customers on an effective date after December 31, 2017 will be evaluated as to impact and implemented accordingly.

ASU Update 2014-15 Presentation of Financial Statements – Going Concern (Sub Topic 205-40) issued August 27, 2014 by FASB defines management’s responsibility to evaluate whether there is a substantial doubt about an organization’s ability to continue as a going concern. The additional disclosure required is effective after December 31, 2016 and will be evaluated as to impact and implemented accordingly.Interest rate risk

NOTE 4 – INTANGIBLE PROPERTYFinancial assets and liabilities do not have material interest rate risk.

On August 10, 2013, the Company entered into an Asset Assignment Agreement (the “IBR Assignment Agreement”) with Institute For Basic Research, Inc., a Florida corporation (“IBR”) that also is beneficially controlled by our Chief Executive Officer, Dr. Ruggero M. Santilli. Pursuant to the IBR Assignment Agreement, IBR irrevocably assigned to the Company all rights, title, ownership and interests in all of IBR’s internet website domain name assets, owned and hereinafter acquired by IBR including, but not limited to, all physical and intangible assets and intellectual property related to the assets.

On August 11, 2013, Thunder Energies Corporation (f/k/a Thunder Fusion Corporation) entered into an Asset Assignment Agreement (the “Assignment Agreement”) with HyFuels, Inc., a Florida corporation (“HyFuels”) beneficially controlled by our Chief Executive Officer, Dr. Ruggero M. Santilli. Pursuant to the Assignment Agreement, HyFuels irrevocably assigned to the Company all physical assets, intangible assets, accounts receivable, intellectual property, accounting software, billing software, client lists, client prospects, trade secrets, proprietary property, the intellectual and physical property known as intermediate nuclear fusion without radiation, the physical property consisting of seven (7) Hadronic reactors, all copyrights, patents, patent applications, patent assignments, trademarks and anything having commercial or exchange value and the like.

Consideration for the assignment agreements consisted of one million (1,000,000) shares of our common stock that were issued to Dr. Ruggero M. Santilli, as designee for IBR and HyFuels. Company management determined the amount of consideration based upon ASC 845-10-S99 pertaining to transfer of non-monetary assets. According to ASC 845-10-S99, transfers of non-monetary assets to a company by its promoters or shareholders in exchange for stock prior to or at the time of the entity’s initial public offering should be recorded at the transferors’ historical cost basis determined under Generally Accepted Accounting Principles. As such, the cost basis carried on the books and records of HyFuels and IBR was minimal or essentially zero. Therefore, the accounting principles in ASC 845-10-S99 were followed and the Company recorded the intellectual and physical properties at its historical cost basis, which was at the historical cost basis of a nominal amount. In connection with the aforementioned assignment agreements, 1,000,000 shares of our common stock were transferred in exchange for the assets. The transfer was valued at one thousand dollars ($1,000.00), the value of the shares issued at par ($0.001) in exchange for the assets. This amount was determined by the Company to approximate the basis of those assets.

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THUNDER ENERGIES CORPORATION

Notes to Condensed Financial Statements

For the period ending September 30, 2017

(Unaudited)Credit risk

The Company recordedis exposed to credit risk from its cash in banks and accounts receivable. The credit risk on cash in banks is limited because the propertycounterparties are recognized financial institutions.

There was one customer that accounted for 10% or more of total revenues, comprising of 36.0% and intangibles (7 reactors, intellectual property rights23.8%, for the three and six months ended June 30, 2021, respectively, and three and two customers that accounted for 49.4% and 35.4% of total revenue for the three and six months ended June 30, 2020, respectively. There were four customers that accounted for 10% or more of accounts receivable, aggregating 60.7% of accounts receivable at June 30, 2021 and three customers that accounted for 78% of accounts receivable at December 31, 2020.

Seasonality

The business is not subject to develop the technology, and website)seasonal fluctuations. However, as an intangible asset. The valuationa result of the properties wasCOVID 19 pandemic, in 2020, the par valueCompany entered into the sale of KN95 masks but had to dispose of them at a loss.

Major Suppliers

In producing our supplement products, we source our ingredients from our suppliers on an ongoing as-needed basis. We have not entered into any contracts that obligate us to purchase a minimum quantity or exclusively from any food service distributor. Our supplements are manufactured at our facilities in Hollywood, Florida.

We rely on a variety of suppliers. Should the relationship with an industry vendor be interrupted or discontinued, it is believed that alternate component suppliers could be identified to support the continued advancement of the stock received in exchangeCompany.

There were no suppliers that accounted for 10% or more of total expenditures for the rightsthree and assets.six months ended June 30, 2021 and 2020. There were three suppliers that accounted for 63.8% and 60.0% of accounts payable at June 30, 2021 and December 31, 2020, respectively.

Recent Accounting Pronouncements

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. This standard removes, modifies, and adds certain disclosure requirements for fair value measurements. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company adopted ASU No. 2018-13 in the first quarter of fiscal 2020, coinciding with the standard’s effective date, and the impact from this standard was immaterial.

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes. This standard simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740, Income Taxes, while also clarifying and amending existing guidance, including interim-period accounting for enacted changes in tax law. This standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company adopted ASU No. 2019-12 in the first quarter of fiscal 2021, coinciding with the standard’s effective date, and the impact from this standard was immaterial.

At the beginning of the first quarter of 2021, the Company adopted the Financial Accounting Standards Board’s Accounting Standards Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which modifies the measurement of expected credit losses on certain financial instruments. The Company adopted ASU 2016-13 utilizing the modified retrospective transition method. The adoption of ASU 2016-13 did not have a material impact on the Company’s condensed consolidated financial statements.

Other recently issued accounting updates are not expected to have a material impact on the Company’s consolidated financial statements.

NOTE 4 – PROPERTY AND EQUIPMENT

Property and Equipment consisted of the following as of: 

Depreciation expense was $44,959 and $3,190 for the six months ended June 30, 2021 and 2020, respectively, and $22,801 and $1,802 for the three months ended June 30, 2021 and 2020, respectively, and is classified in general and administrative expenses in the Statements of Operations.

NOTE 5 – INTANGIBLE ASSETS

Intangible assets consisted of the following as of: