UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended September 30, 20212022

 

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: 000-52942

 

BLUE LINE PROTECTION GROUP, INC.

(Exact name of registrant as specified in its charter)

 

Nevada 20-5543728

(State or other jurisdiction of

of incorporation or organization)

 

(IRS Employer

Identification No.)

   

5765 Logan St.

Denver, CO

 

 

80216

(Address of principal executive offices) (Zip Code)

 

(800) 844-5576

(Registrant’s telephone number, including area code)

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

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

 

Title of each classTrading Symbol(s)Name of each exchange on which registered
None N/A N/A

 

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

 

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

 

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

 

 Large accelerated filer☐Accelerated filer☐
 Non-accelerated filer☒Smaller reporting company☒
   Emerging growth company☐

 

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

 

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

 

As of October 28, 2021,November 10, 2022, the registrant had 8,485,144 8,225,144outstanding shares of common stock.

 

 

 

 

 

FORWARD-LOOKING STATEMENTS

 

The information in this report contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, (“the Exchange Act”), which are subject to the “safe harbor” created by those sections. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “should,” “could,” “predicts,” “potential,” “continue,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements. All forward-looking statements in this Form 10-Q are made based on our current expectations, forecasts, estimates and assumptions, and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. In evaluating these statements, you should specifically consider various factors, uncertainties and risks that could affect our future results or operations. These factors, uncertainties and risks may cause our actual results to differ materially from any forward-looking statement set forth in this Form 10-Q. You should carefully consider these risk and uncertainties described and other information contained in the reports we file with or furnish to the SEC before making any investment decision with respect to our securities. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.

 

2

 

TABLE OF CONTENTS

 

  Page No.
 PART I. FINANCIAL INFORMATION 
   
ITEM 1.FINANCIAL STATEMENTS. 
   
 Consolidated Balance Sheets – As of September 30, 20212022 (unaudited) and December 31, 20202021F-1
 Consolidated Statements of Operations – Three and Nine months ended September 30, 2022 and 2021 and 2020 (unaudited)F-2
 Consolidated Statements of Cash Flows – Nine months ended September 30, 2022 and 2021 and 2020 (unaudited)F-3
 Consolidated Statements of Stockholders’ Deficit – Nine months ended September 30, 2022 and 2021 and 2020 (unaudited)F-4
 Notes to Financial Statements (Unaudited)F-5
   
ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.4
   
ITEM 4.CONTROLS AND PROCEDURES.7
   
 PART II. OTHER INFORMATION 
   
ITEM 6.EXHIBITS.78

3

BLUE LINE PROTECTION GROUP, INC.

CONSOLIDATED BALANCE SHEETS

 

         September 30, December 31, 
 September 30, 2021 December 31, 2020  2022 2021 
  (unaudited)   (audited)  (unaudited) (audited) 
Assets                
Current assets:                
Cash and equivalents $453,483  $244,750  $374,273  $662,177 
Accounts receivable  359,389   322,598   277,161   328,042 
Prepaid expenses and deposits  31,997   32,216   31,208   34,378 
Total current assets  844,869   599,564   682,642   1,024,597 
                
Fixed assets:                
Right to use assets  557,738   636,968   440,306   529,711 
Machinery and equipment, net et, net of accumulated depreciation of $549,648 and $451,760, respectively  321,256   296,410 
Machinery and equipment, net et, net of accumulated depreciation of $682,164 and $586,130, respectively  276,496   284,776 
Security Deposit  28,958   32,158   31,920   28,958 
Fixed assets of discontinued operations  2,782   2,782   2,782   2,782 
Total fixed assets  910,734   968,318   751,504   846,227 
                
Total assets  1,755,603   1,567,882   1,434,146   1,870,824 
                
Liabilities and Stockholders’ Deficit                
Current liabilities:                
        
Accounts payable and accrued liabilities $1,217,651  $1,160,962  $562,858  $738,221 
Financed lease liabilities  26,218   65,985   55,915   29,301 
Notes payable  50,000   85,000 
Notes payable - related parties  614,272   696,272   152,771   541,272 
Convertible notes payable, net of unamortized discount  -   169,218 
Convertible notes payable - related parties, net of unamortized discount  1,805,217   1,830,217   624,930   575,000 
Current portion of operating lease obligation  120,547   107,242   121,510   125,266 
Derivative liabilities  1,943,709   2,247,645   499,128   712,784 
Total current liabilities  5,777,614   6,362,541   2,017,112   2,721,844 
                
Long-term liabilities:                
Financed lease liabilities - long term  31,624   1,820   28,176   16,402 
Notes payable - related parties  1,055,384   1,313,817 
Operating lease liability-long term  473,759   565,632   352,249   440,366 
Total current liabilities  505,383   567,452 
Total long-term liabilities  1,435,809   1,770,585 
                
Total liabilities  6,282,997   6,929,993   3,452,921   4,492,429 
                
Stockholders’ deficit:                
Preferred Stock, $0.001 par value, 100,000,000 shares authorized, 20,000,000 shares issued and outstanding as of September 30, 2021 and December 31, 2019, respectively  20,000   20,000 
Common Stock, $0.001 par value, 14,000,000 shares authorized, 8,485,144 and 8,223,574 issued and outstanding as of September 30, 2021 and December 31, 2020, respectively  8,484   8,224 
Common Stock, owed but not issued, 129 shares and 129 shares as of September 30, 2021 and December 31, 2020, respectively  13   13 
Preferred Stock, $0.001 par value, 100,000,000 shares authorized,20,000,000 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively  20,000   20,000 
Common Stock, $0.001 par value, 14,000,000 shares authorized, 8,225,144 and 8,485,144 issued and outstanding as of September 30, 2022, and December 31, 2021, respectively  8,226   8,486 
Common Stock, owed but not issued, 129 shares and 129 shares as of September 30, 2022, and December 31, 2021, respectively  13   13 
Additional paid-in capital  8,444,504   8,031,471   9,688,404   9,021,126 
Accumulated deficit  (13,000,395)  (13,421,819)  (11,735,418)  (11,671,230)
Total stockholders’ deficit  (4,527,394)  (5,362,111)  (2,018,775)  (2,621,605)
                
Total liabilities and stockholders’ deficit $1,755,603  $1,567,882  $1,434,146  $1,870,824 

 

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

F-1

 

BLUE LINE PROTECTION GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

                 
  For the three months ended  For the nine months ended 
  September 30,  September 30, 
  2021  2020  2021  2020 
             
Revenue $1,161,430  $1,087,997  $3,580,432  $3,087,004 
Cost of revenue  (316,940)  (286,120)  (958,650)  (908,918)
Gross profit  844,490   801,877   2,621,782   2,178,086 
                 
Operating expenses:                
General and administrative expenses  510,744   524,671   1,583,273   1,613,748 
Total expenses  510,744   524,671   1,583,273   1,613,748 
                 
Operating Income  333,746   277,206   1,038,509   564,338 
                 
Other income (expenses):                
                 
Gain on settlement of accounts payable  -   -   -   4,500 
Interest expense  (92,009)  (110,722)  (517,738)  (326,386)
Income / (Loss) on derivative  (683,432)  (135,389)  (99,347)  (400,159)
Total other expenses  (775,441)  (246,111)  (617,085)  (722,045)
                 
Net Income / (loss) $(441,695) $31,095  $421,424  $(157,707)
                 
Net Income / (loss) per common share: Basic $(0.05) $0.00  $0.05  $(0.02)
Net Income / (loss) per common share: Diluted $(0.05) $0.00  $0.03  $(0.02)
                 
Weighted average number of                
common shares outstanding- Basic  8,485,145   7,957,548   8,446,995   7,941,624 
Weighted average number of common shares outstanding- Basic  8,485,145   7,957,548   8,446,995   7,941,624 
common shares outstanding- Diluted  8,485,145   47,461,137   12,296,538   7,941,624 
Weighted average number of common shares outstanding- Diluted  8,485,145   47,461,137   12,296,538   7,941,624 

             
  For the three months ended  For the nine months ended 
  September 30,  September 30, 
  2022  2021  2022  2021 
             
Revenue $912,453   1,161,430  $2,897,520  $3,580,432 
Cost of revenue  (345,485)  (316,940)  (939,182)  (958,650)
Gross profit  566,968   844,490   1,958,338   2,621,782 
                 
Operating expenses:                
General and administrative expenses  611,613   510,744   1,667,229   1,583,273 
Total expenses  611,613   510,744   1,667,229   1,583,273 
                 
Operating Income  (44,645)  333,746   291,109   1,038,509 
                 
Other income (expenses):                
Interest expense  (11,197)  (92,009)  (151,935)  (517,738)
Loss on derivative  (44,086)  (683,432)  (203,362)  (99,347)
Total other income / (expenses)  (55,283)  (775,441)  (355,297)  (617,085)
                 
Net income $(99,928) $(441,695) $(64,188) $421,424 
                 
Net income per common share: Basic and Diluted $(0.01) $(0.05) $(0.01) $0.05 
Net Income / (loss) per common share: Diluted $(0.01) $(0.05) $(0.01) $0.03 
                 
Weighted average number of                
common shares outstanding- Basic  8,448,001   8,485,145   8,374,927   8,446,995 
common shares outstanding- Diluted  8,448,001   8,485,145   8,374,927   12,296,538 

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

F-2

BLUE LINE PROTECTION GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

(UNAUDITED)

  2022  2021 
  For the nine months ended 
  September 30, 
  2022  2021 
Operating activities        
Net income $(64,188) $421,424 
Adjustments to reconcile net loss to        
net cash used in operating activities:        
Depreciation  96,034   97,889 
Amortization of right to use  89,405   79,230 
Noncash operating lease expense        
Change in fair value of derivative liabilities  203,362   99,347 
Changes in operating assets and liabilities:        
(Increase) in accounts receivable  50,881   (36,791)
(Increase) / decrease in deposits and prepaid expenses  208   3,419 
Increase (decrease) in accounts payable and accrued liabilities  74,637   57,189 
Increase (decrease) in lease obligations  (91,873)  (78,568)
Net cash provided by operating activities  358,466   643,139 
         
Cash flows from investing activities        
Purchase of fixed assets  (18,882)  (66,000)
Net cash provided by/(used in) investing activities  (18,882)  (66,000)
         
Financing activities        
Repayments on convertible notes payable - related party  -   (122,000)
Repayments on convertible notes payable  (338,570)  (159,708)
Repayments from notes payable - related party  (258,434)  (20,000)
Payments on notes payable  (30,484)  (66,698)
Net cash used in financing activities  (627,488)  (368,406)
         
Net increase in cash  (287,904)  208,733 
Cash - beginning  662,177   244,750 
Cash - ending $374,273  $453,483 
         
Supplemental disclosures of cash flow information:        
Interest paid $28,400  $400,256 
Income taxes paid $-  $- 
         
Non-cash investing and financing activities:        
Capitalized leased fixed assets $68,872  $56,735 
Common stock issued for conversion of debt and interest $-  $10,010 
Derivative resolution $417,018  $403,283 
Cancellation of common stock $260  $- 
Gain on the forgiveness of accrued interest - related party $250,000  $- 

 

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

 

F-2F-3

 

 

BLUE LINE PROTECTION GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

         
  For the nine months ended 
  September 30, 
  2021  2020 
Operating activities        
Net income (loss) $421,424  $(157,707)
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation  97,889   92,899 
Amortization of discounts on notes payable  -   8,710 
Amortization of right to use  79,230   85,451 
Loan fees  -   10,665 
Gain on settlement of accounts payable  -   (4,500)
Noncash operating lease expense  -   - 
Change in fair value of derivative liabilities  99,347   400,159 
Changes in operating assets and liabilities:        
(Increase) in accounts receivable  (36,791)  (4,160)
(Increase) / decrease in deposits and prepaid expenses  3,419   - 
Increase (decrease) in accounts payable and accrued liabilities  57,189   32,711 
Increase (decrease) in lease obligations  (78,568)  (82,076)
Net cash provided by operating activities  643,139   382,152 
         
Cash flows from investing activities        
Purchase of fixed assets  (66,000)  (24,970)
Net cash provided by/(used in) investing activities  (66,000)  (24,970)
         
Financing activities        
Proceeds from notes payable  -   24,000 
Repayments on convertible notes payable - related party  (122,000)  - 
Repayments on convertible notes payable  (159,708)  - 
Repayments from notes payable - related party  (20,000)  (90,239)
Payments on notes payable  (66,698)  (27,798)
Net cash used in financing activities  (368,406)  (94,037)
         
Net increase in cash  208,733   263,145 
Cash - beginning  244,750   45,113 
Cash - ending $453,483  $308,258 
         
Supplemental disclosures of cash flow information:        
Interest paid $400,256  $- 
Income taxes paid $-  $- 
         
Non-cash investing and financing activities:        
Capitalized leased fixed assets $56,735  $

-

 
Common stock issued for conversion of debt and interest $10,010  $3,480 
Derivative resolution $403,283  $14,327 
Accounts payable converted to notes payable - related party $-  $62,000 

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

F-3

BLUE LINE PROTECTION GROUP, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 20212022 AND 20202021

(UNAUDITED)

  Shares  Amount  Shares  Amount  Capital  Payable  Deficit  Deficit 
  Preferred Stock  Common Stock  Paid-in  Stock  Accumulated  Stockholders’ 
  Shares  Amount  Shares  Amount  Capital  Payable  Deficit  Deficit 
                         
Balance, June 30, 2021  20,000,000  $20,000   8,483,574  $8,484   $8,242,740   13  $(12,558,700) $(4,287,463)
                                 
Rounding shares issued from reverse stock split  -   -   1,570   -   -   -   -   - 
                                 
Derivative resolution  -   -   -   -   201,764   -   -   201,764 
                                 
Net income for the three months ended September 30, 2021  -   -   -   -   -   -   (441,695)  (441,695)
Balance, September 30, 2021  20,000,000  $20,000   8,485,144  $8,484   $8,444,504   13  $(13,000,395) $(4,527,394)
                                 
Balance, June 30, 2022  20,000,000  $20,000   8,485,144  $8,486   $9,252,938   13  $(11,635,490) $(2,354,053)
                                 
Cancellation of common stock  -   -   (260,000)  (260)  260   -   -   - 
                                 
Forgiveness of interest - related party  -   -   -   -   250,000   -   -   250,000 
                                 
Derivative resolution  -   -   -   -   185,206   -   -   185,206 
                                 
Net income for the three months ended September 30, 2022  -   -   -   -   -   -   (99,928)  (99,928)
Balance, September 30, 2022  20,000,000  $20,000   8,225,144  $8,226   $9,688,404   13  $(11,735,418) $(2,018,775)

 

                         
           Additional          
  Preferred Stock  Common Stock  Paid-in  Stock  Accumulated  Stockholders’ 
  Shares  Amount  Shares  Amount  Capital  Payable  Deficit  Deficit 
                         
Balance, December 31, 2019  20,000,000  $20,000   7,933,574  $7,934  $8,013,954  $13  $(12,487,242) $    (4,445,341)
Common stock issued for conversion of debt and fees                                
Common stock issued for conversion of debt and fees, shares                                
                                 
Common stock issued for conversion of debt and accrued interest  -   -   290,000   290   3,190   -   -   3,480 
 Rounding from reverse stock split                                
 Rounding from reverse stock split, shares                                
                                 
Derivative resolution  -   -   -   -   14,327   -   -   14,327 
                                 
Net loss  -   -   -   -   -   -   (157,707)  (157,707)
Balance, September 30, 2020  20,000,000  $20,000   8,223,574  $8,224  $8,031,471  $13  $(12,644,949) $(4,585,241)
                                 
Balance, December 31, 2020  20,000,000  $20,000   8,223,574  $8,224  $8,031,471  $13  $(13,421,819) $(5,362,111)
                                 
Common stock issued for conversion of debt and fees  -   -   260,000   260   9,750   -   -   10,010 
                                 
Rounding shares issued from reverse stock split  -   -   1,570   -   -   -   -   - 
                                 
Derivative resolution  -   -   -   -   403,283   -   -   403,283 
                                 
Net income  -   -   -   -   -   -   421,424   421,424 
Net income (loss)  -   -   -   -   -   -   421,424   421,424 
Balance, September 30, 2021  20,000,000  $20,000   8,485,144  $8,484  $8,444,504  $13  $(13,000,395) $(4,527,394)
  Preferred Stock  Common Stock  

Additional

Paid-in		  Stock  Accumulated  Stockholders’ 
  Shares  Amount  Shares  Amount  Capital  Payable  Deficit  Deficit 
                         
                         
Balance, December 31, 2020  20,000,000  $20,000   8,223,574  $8,224   $8,031,471   13  $(13,421,819) $(5,362,111)
                                 
Common stock issued for conversion of debt and accrued interest  -   -   260,000   260   9,750   -   -   10,010 
                                 
Rounding shares issued from reverse stock split  -   -   1,570   -   -   -   -   - 
                                 
Derivative resolution  -   -   -   -   403,283   -   -   403,283 
                                 
Net income for the Nine months ended September 30, 2021  -   -   -   -   -   -   421,424   421,424 
Balance, September 30, 2021  20,000,000  $20,000   8,485,144  $8,484   $8,444,504   13  $(13,000,395) $(4,527,394)
                                 
Balance, December 31 , 2021  20,000,000  $20,000   8,485,144  $8,486   $9,021,126   13  $(11,671,230) $(2,621,605)
                                 
Cancellation of common stock  -   -   (260,000)  (260)  260   -   -   - 
                                 
Forgiveness of interest - related party  -   -   -   -   250,000   -   -   250,000 
                                 
Derivative resolution  -   -   -   -   417,018   -   -   417,018 
                                 
Net Income for the nine months ended September 30, 2022  -   -   -   -   -   -   (64,188)  (64,188)
Balance, September 30, 2022  20,000,000  $20,000   8,225,144  $8,226   $9,688,404   13  $(11,735,418) $(2,018,775)

 

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

 

F-4

 

 

Blue Line Protection Group, Inc.

Notes to Consolidated Financial Statements

 

Note 1 – History and organization of the company

 

The Company was originally organized on September 11, 2006 (Date of Inception) under the laws of the State of Nevada, as The Engraving Masters, Inc. The Company was authorized to issue up to 100,000,000 shares of its common stock and 100,000,000 shares of preferred stock, each with a par value of $0.001 per share.

 

On March 14, 2014, the Company acquired Blue Line Protection Group, Inc., a Colorado corporation formed in February 2014 (“Blue Line Colorado”), as a wholly-owned subsidiary of the Company. Blue Line Colorado provides protection, compliance, and financial services to the lawful cannabis industry.

 

On May 2, 2014, the Company changed its name from The Engraving Masters, Inc. to Blue Line Protection Group, Inc. (“BLPG”)

 

On May 6, 2014, the Company effected a forward stock split and a pro-rata increase in its authorized common stock on a basis of 14-to-1, whereby each shareholder received 14 newly issued shares of common stock for each 1 share held.held. Additionally, the authorized capital of the Company concurrently increased to 1,400,000,000 shares of common stock. All references to share and per share amounts in the consolidated financial statements and accompanying notes thereto have been retroactively restated to reflect the forward stock split.

 

On July 6, 2021, the Company effected a reverse stock split and a pro-rata decrease in its authorized common stock on a basis of 1-for-100, the authorized capital of the Company concurrently decreased to 14,000,000 shares of common stock. All references to share and per share amounts in the consolidated financial statements and accompanying notes thereto have been retroactively restated to reflect the forward stock split.

 

The Company provides logistics, and compliance services for businesses engaged in the legal cannabis industry. The Company offers asset logistic services, such as armoredarmed transportation service; including shipment protection, money escorts, asset vaulting, financial services, such as handling transportation and storage of currency; training; and compliance services.

Note 2 – Accounting policies and procedures

 

Interim financial statements

 

The unaudited interim consolidated financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

 

In the opinion of management, these statements reflect all adjustments, all of which are of a normal recurring nature, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 20202021 and notes thereto included in the Company’s annual report on Form 10-K. The Company follows the same accounting policies in the preparation of interim reports.

 

Results of operations for the interim periods are not indicative of annual results.

 

F-5

 

Note 2 – Accounting policies and procedures

Principles of consolidation

 

For the three and nine monthsyears ended September 30,December 31, 2021 and 2020, the consolidated financial statements include the accounts of Blue Line Protection Group, Inc. (formerly The Engraving Masters, Inc.), Blue Line Advisory Services, Inc. (a Nevada corporation; “BLAS”), Blue Line Capital, Inc. (a Colorado corporation; “Blue Line Capital”), Blue Line Protection Group (California), Inc. (a California corporation; “Blue Line California”), Blue Line Colorado, Blue Line Protection Group Illinois, Inc. (an Illinois corporation; “Blue Line Illinois”), BLPG, Inc. (a Nevada corporation; “Blue Line Nevada”), Blue Line Protection Group (Washington), Inc. (a Washington corporation; “Blue Line Washington”). All significant intercompany balances and transactions have been eliminated. BLPG and its subsidiaries are collectively referred herein to as the “Company.”

 

Basis of presentation

 

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

 

The Company has adopted December 31 as its fiscal year end.

 

Use of estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash and cash equivalents

 

The Company maintains a cash balance in a non-interest-bearing account that currently does not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. As of September 30, 2022 the Company has cash in excess of FDIC insured limits of $124,273. There were 0no cash equivalents as of September 30, 2021 and2022 or December 31, 2020.2021.

 

Accounts receivable

 

Accounts receivable are stated at the amount the Company expects to collect from outstanding balances and do not bear interest. The Company provides for probable uncollectible amounts through an allowance for doubtful accounts, if an allowance is deemed necessary. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable; however, changes in circumstances relating to accounts receivable may result in a requirement for additional allowances in the future. On a periodic basis, management evaluates its accounts receivable and determines the requirement for an allowance for doubtful accounts based on its assessment of the current and collectible status of individual accounts with past due balances over 90 days. Account balances are charged against the allowance after all collection efforts have been exhausted and the potential for recovery is considered remote.

 

Allowance for uncollectible accounts

 

The Company estimates losses on receivables based on known troubled accounts, if any, and historical experience of losses incurred. There was 0no allowance for doubtful customer receivables at September 30, 20212022 and December 31, 2020.2021.

 

F-6

 

Property and equipment

 

Property and equipment is recorded at cost and capitalized from the initial date of service. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated useful lives for significant property and equipment categories are as follows:

Schedule of Estimated Usefuluseful Lives of Property and Equipment

Automotive Vehicles5 years
Furniture and Equipment75 years
Buildings and Improvements15 yearsthe lesser of the life of the lease or the estimated useful life of the lease

 

The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. Based on this assessment there was 0no impairment as September 30, 20212022 and December 31, 2020.2021. Depreciation expense for the three and nine months ended September 30, 20212022 and, September 30, 20202021 were $37,82838,767, $97,88996,034, $32,35937,828 and $92,89997,889 respectively.

 

Impairment of long-lived assets

 

The Company accounts for its long-lived assets in accordance with ASC Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” ASC Topic 360-10-05 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost or carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and its fair value or disposable value. As of September 30, 20212022 and December 31, 2020,2021, the Company determined that none of its long-lived assets were impaired.

 

Concentration of business and credit risk

 

The Company has no significant off-balance sheet risks such as foreign exchange contracts, option contracts or other hedging arrangements. The Company’s financial instruments that are exposed to concentration of credit risks consist primarily of cash. The Company maintains its cash in bank accounts, which may at times, exceed federally insured limits.

 

The Company had one major customer which generated 21%21% of total revenue for the nine months ended September 30, 2022 and one customer comprised 10% of the account receivable balance at September 30, 2022.

The Company had one major customer which generated 21%, of total revenue in the nine months ended September 30, 2021.

 

The Company had two major customers which generated 31%, (17% and 14%) of total revenue in the nine months ended September 30, 2020.

Related party transactions

 

FASB ASC 850, “Related Party Disclosures” requires companies to include in their financial statements disclosures of material related party transactions. The Company discloses all material related party transactions. Related parties are defined to include any principal owner, director or executive officer of the Company and any immediate family members of a principal owner, director or executive officer.

 

F-7

Fair value of financial instruments

 

The carrying amounts reflected in the balance sheets for cash, accounts payable and related party payables approximate the respective fair values due to the short maturities of these items. The Company does not hold any investments that are available-for-sale.

F-7

 

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

The three levels of the fair value hierarchy are described below:

 

Level 1:Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
  
Level 2:Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;
 
Level 3:Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

 

The following table presents the derivative financial instruments, the Company’s only financial liabilities, measured and recorded at fair value on the Company’s consolidated balance sheet on a recurring basis, and their level within the fair value hierarchy as of September 30, 20212022 and December 31, 2020:2021:

 

September 30, 20212022

Schedule of Fair Value of Liabilities Measured on Recurring Basis 

 Amount Level 1 Level 2 Level 3  Amount Level 1 Level 2 Level 3 
Embedded conversion derivative liability $1,943,709  $-  $-  $1,943,709  $499,128  $-  $-  $499,128 
Warrant derivative liabilities $-  $-  $-  $-  $-  $-  $-  $- 
Total $1,943,709  $-  $-  $1,943,709  $499,128  $-  $-  $499,128 

 

December 31, 20202021

 

 Amount Level 1 Level 2 Level 3  Amount Level 1 Level 2 Level 3 
Embedded conversion derivative liability $2,246,080  $-  $-  $2,246,080  $712,784  $-  $-  $712,784 
Warrant derivative liabilities $1,565  $-  $-  $1,565  $-  $-  $-  $- 
Total $2,247,645  $-  $-  $2,247,645  $712,784  $-  $-  $712,784 

 

The embedded conversion feature in the convertible debt instruments that the Company issued that became convertible qualified them as derivative instruments since the number of shares issuable under the notes are indeterminate based on guidance in FASB ASC 815, Derivatives and Hedging. These convertible notes tainted all other equity linked instruments including outstanding warrants and fixed rate convertible debt on the date that the instrument became convertible. The valuation of the derivative liability of the warrants was determined through the use of Black Scholes option-pricing model (See Note 8).

 

Revenue Recognition

 

The Company recognizes revenue when delivery of the promised goods or services is transferred to its customers in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services. We determine revenue recognition through the following five steps:

 

 ●Identify the contract with the customer;
   
 ●Identify the performance obligations in the contract;

F-8

 ●Determine the transaction price;
   
 ●Allocate the transaction price to the performance obligations in the contract; and
   
 ●Recognize revenue when, or as, the performance obligations are satisfied.

F-8

 

We generate substantially all our revenue from providing services to customers. The Company records revenue when the 5 steps above have been completed.

 

Effective January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific revenue recognition guidance throughout the Industry Topics of the Accounting Standards Codification. The updated guidance states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also provides for additional disclosures with respect to revenues and cash flows arising from contracts with customers. The Company adopted the standard using the modified retrospective approach effective January 1, 2018. The adoption of these standards did not have an impact on the Company’s Statements of Operations for the year ended December 31, 2018.

 

In general, the Company’s business segmentation is aligned according to the nature and economic characteristics. Revenue is characterized by several lines of services and typically the pricing is fixed.

Schedule of Revenue by Major Customers by Reporting Segments 

Revenue Breakdown by Streams 2022 2021 
Three months ended September 30,Three months ended September 30,Three months ended September 30,
Revenue Breakdown by Streams 2021 2020  2022 2021 
Service: Transportation $452,155  $430,357  $386,339  $452,155 
Service: Currency Processing  690,512   624,373   509,327   690,512 
Service: Compliance  18,763   33,261   16,787   18,763 
Total $1,161,430  $1,087,997  $912,453  $1,161,430 

 

Nine months ended September 30,
Revenue Breakdown by Streams 2022 2021 
Nine months ended September,Nine months ended September,
Revenue Breakdown by Streams 2021 2020  2022 2021 
Service: Transportation $1,381,231  $1,381,449  $1,175,417  $1,381,231 
Service: Currency Processing  2,162,424   1,657,344   1,696,898   2,162,424 
Service: Compliance  36,777   48,211   25,205   36,777 
Total $3,580,432  $3,087,004  $2,897,520  $3,580,432 

 

Gain on settlement of accounts payable

Represents a $4,500 gain on settlement of payables with vendors.

Advertising costs

 

The Company expenses all costs of advertising expenses as incurred. For the three and nine months ended September 30, 2022 and 2021 the Company expensed $0.

 

General and administrative expenses

 

The significant components of general and administrative expenses consist mainly of rent and compensation.

 

Share-Based Compensation

 

Share-based compensation expense is recorded as a result of stock options granted in return for services rendered. Previously, the share-based payment arrangements with employees were accounted for under ASC 718, while nonemployee share-based payments issued for goods and services are accounted for under ASC 505-50. ASC 505-50 differs significantly from ASC 718. On June 20, 2018, the FASB issued ASU 2018-07, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The Company has adopted the new standard and has made some adjustment with regard to the share-based compensation costs. Under the ASU 2018-07, the measurement of equity-classified nonemployee share-based payments is generally fixed on the grant date and the options are no longer revalued on each reporting date. The expenses related to the share-based compensation are recognized on each reporting date. The amount is calculated as the difference between total expenses incurred and the total expenses already recognized.

F-9

 

Cost of Revenue

 

The Company’s cost of revenue primarily consists of labor, fuel costs and items purchased by the Company specifically for the benefit of the Company’s clients.

Basic and Diluted Earnings per share

 

Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic loss per share is computed by dividing losses available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. For the periods presented for the three and nine months ended September 30,  2022 and the three months ended September 30, 2021 all common stock equivalents of 3,572,255 and 3,849,543, respectively were excluded from the calculation of diluted loss per share as their effect would be anti-dilutive.

 

The following is a reconciliation of the numerator and denominator used in the basic and diluted earnings per share (“EPS”) calculations for the three and nine months September 30, 20212022 and 2020.2021.

Basic and Diluted Earnings per share

Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic loss per share is computed by dividing losses available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. For the periods presented all common stock equivalents were excluded from the calculation of diluted loss per share as their effect would be anti-dilutive.

The following is a reconciliation of the numerator and denominator used in the basic and diluted earnings per share (“EPS”) calculations for the three and nine months September 30, 2021 and 2020.

Schedule of Basic and Diluted Earnings Per Share (“EPS”)

  Three months ended
September 30, 2021		  Three months ended
September 30, 2020		  Six Months ended
June 30, 2021		  Nine Months ended
September 30, 2020		 
             
Numerator:                
Net income (loss) $(441,695) $31,095  $421,424  $

(157,707

)
                 
Denominator:                
Weighted-average shares of common stock  8,485,145   7,957,548   8,446,995   7,941,624 
Dilutive effect of warrants  -   100,000   -   - 
Dilutive effect of convertible instruments  -   39,403,589   3,489,543   - 
Diluted weighted-average of common stock  8,485,145   47,461,137   12,296,538   7,941,624 
                 
Net loss per common share from:                
Basic $(0.05) $0.00  $0.05  $(0.02)
Diluted $(0.05) $0.00  $0.03  $(0.02)

 

F-10

  

Three months ended

September 30, 2022

  

Three months ended

September 30, 2021

  

Nine Months ended

September 30, 2022

  

Nine Months ended

September 30, 2021

 
             
Numerator:                
Net income (loss) $(99,928) $(441,695) $(64,188) $421,424 
                 
Denominator:                
Weighted-average shares of common stock  8,448,001   8,485,145   8,374,927   8,446,995 
Dilutive effect of warrants  -   -   -   - 
Dilutive effect of convertible instruments  -   -   -   3,849,543 
Diluted weighted-average of common stock  8,448,001   8,485,145   8,374,927   12,296,538 
                 
Net loss per common share from:                
Basic $(0.01) $(0.05) $(0.01) $0.05 
Diluted $(0.01) $(0.05) $(0.01) $0.03 

 

Dividends

Dividends

 

The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid or declared since inception.

 

Income Taxes

 

The Company follows FASB Codification Topic 740-10-25 (ASC 740-10-25) for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

 

F-10

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

 

Recent Pronouncements

 

In February 2016, the FASB issued ASU 2016-02, Leases, which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard was effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company elected the practical expedient under ASU 2018-11 “Leases: Targeted Improvements” which allows the Company to apply the transition provision for Topic 842 at the Company’s adoption date instead of at the earliest comparative period presented in the financial statements. Therefore, the Company recognized and measured leases existing at January 1, 2019 but without retrospective application. Therefore, there was no impact recorded to beginning retained earnings or the statement of operations

 

The Company evaluated all other recent accounting pronouncements issued and determined that the adoption of these pronouncements would not have a material effect on the financial position, results of operations or cash flows of the Company.

 

Note 3 – Going concern

 

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has a net loss, accumulated deficit and had a working capital deficit as of September 30, 2021.2022. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is significantly dependent upon its ability, and will continue to attempt, to secure additional equity and/or debt financing. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern.

 

The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. These financial statements do not include any adjustments that might arise from this uncertainty.

 

F-11

Note 4 – Commitments and contingencies

 

Contingencies

 

On November 6, 2015, Daniel Sullivan sent a wage claim demand to the Company. Mr. Sullivan purports to have had an Independent Contractor Agreement with the Company which provides he is entitled to certain compensation and to be reimbursed for Company expenses. The demand claims unpaid compensation in the amount of $8,055 and unreimbursed expenses in the amount of $154,409. The Company denies the agreement was ever signed. If litigation is commenced the Company will defend any claims by Mr. Sullivan.

F-11

 

Mile High Real Estate Group, an entity owned by Mr. Sullivan, sent correspondence to the Company stating the Mr. Sullivan and/or Mile High Real Estate loaned the Company either directly or directly to contractors, material suppliers or utilities for operating and building remodeling in the amount of $98,150. Counsel for Mr. Sullivan stated that he was still compiling information. The Company is investigating whether Mr. Sullivan and/or Mile High Real Estate Group ever made the alleged loans. The Company will defend any claims of Mile High Real Estate Group.

 

On April 14, 2016, the Company entered into an agreement with an unrelated third party to provide the Company with investor relations services. Upon signing the agreement, the Company paid the investor relations consultant $75,000 and agreed to issue the consultant 1,500,000 shares of its restricted common stock. The agreement required the Company to pay the consultant an additional $75,000 prior to June 14, 2016. The Company cancelled the agreement and is of the opinion that the shares are not owed to the consultant. As of September 30, 20212022 and December 31, 20202021 there was 0no payable recorded.

 

During the nine months ended September 30, 2021 the Company recorded a gain of $4,500 for settlement of a vendor payable.

Finance leases

On July 25, 2017, the Company recorded a finance lease obligation for a leased a vehicle for $29,390. The Company agreed to make 48 monthly payment of $621.23 including sales tax. The Company recognized this arrangement as a finance lease based on the determination that the lease exceeded 75% of the economic life of the underlying asset. As of September 30, 2021 the lease had been fully paid.

On April 25, 2018, the Company recorded a finance lease obligation for a leased a vehicle for $38,388. The Company made a down payment of $7,500 and agreed to make 36 monthly payment of $976.71 including sales tax. The Company recognized this arrangement as a finance lease based on the determination that the lease exceeded 75% of the economic life of the underlying asset. As of September 30, 2021 the lease had been fully paid.

On August 16, 2018, the Company recorded a finance lease obligation for a leased a vehicle for $58,476. The Company made a down payment of $20,000 and an additional $10,000 for delivery fees, taxes and its first month payment and agreed to make 36 monthly payments of $1,165.10, including sales tax. The Company recognized this arrangement as a finance lease based on the determination that the lease exceeded 75% of the economic life of the underlying asset. As of September 30, 2021 the lease had been fully paid.

On August 16, 2018, the Company recorded a finance lease obligation for a leased a vehicle for $58,476. The Company made a down payment of $20,000 and an additional $10,000 for delivery fees, taxes and its first month payment and agreed to make 36 monthly payments of $1,165.10, including sales tax. The Company recognized this arrangement as a finance lease based on the determination that the lease exceeded 75% of the economic life of the underlying asset. As of September 30, 2021 the lease had been fully paid.

 

On March 1, 2019, the Company recorded finance lease obligation for a leased a vehicle for $64,354. The Company made a down payment of $30,000 which included delivery fees, taxes and its first month payment and agreed to make 36 monthly payments of $1,1291,129.76.76,, including sales tax. The Company recognized this arrangement as a finance lease based on the determination that the lease exceeded 75% of the economic life of the underlying assets.

 

F-12

On June 2, 2021, the Company recorded finance lease obligation for a leased a vehicle for $56,733. The Company made a down payment of $3,510which included delivery fees, taxes and its first month payment and agreed to make 24monthly payments of $2,765.19$2,765.19,, including sales tax. The Company recognized this arrangement as a finance lease based on the determination that the lease exceeded 75% of the economic life of the underlying assets

On June 17, 2022, the Company recorded finance lease obligation for a leased a vehicle for $69,255. The Company made a down payment of $2,882 which included delivery fees, taxes and its first month payment and agreed to make 36 monthly payments of $2,338, including sales tax. The Company recognized this arrangement as a finance lease based on the determination that the lease exceeded 75% of the economic life of the underlying assets

Schedule of Future Minimum Leases Paymentsfuture minimum lease payments

��

Future minimum lease payments as of September 30, 2021:   
    
2021 $29,667 
2022 and thereafter  28,165 
Total minimum lease payments $57,842 
Future minimum lease payments as September 30, 2022   
    
2022 $16,765 
2023  41,196 
2024  26,130 
Total minimum lease payments $84,091 

 

Operating Leases

 

On October 27, 2016 the Company sold its building located at 5765 Logan Street Denver, Colorado to an unrelated third party for $1,400,000. The Company repaid the mortgage on the building in the amount of $677,681. After the sale, the Company leased the building from the purchaser of the property. The lease is for an initial term of ten years, with the Company having the option to extend the term of the lease for two additional five-year periods. The lease requires rental payments of $10,000per month which will increase 2% 2% annually. The Company paid a $30,000deposit at the inception of the lease

 

On May 29, 2018 the Company leased a building located at 4328 E. Magnolia Street, Phoenix, Arizona. The lease is for an initial term of one year,, with the Company having the option to extend the term of the lease for additional four year periods. The lease requires rental payments of $3,880 per month which will increase 2%2% annually. The Company paid a $4,369 deposit at the inception of the lease.

 

On January 22, 2019 the Company leased a building located at 7490 Bridgewater Road, Huber Heights, Ohio. The lease is for an initial term of 63 months. The lease requires rental payments of $3,200 per month and will increase to $3,400 between months 28 through 63. The Company paid a $3,200 deposit at the inception of the lease. During the year ended December 31, 2020 the Company terminated the lease agreement. The Company paid a $35,760 cancellation fee included in rent expense and recorded a gain of $8,800 on the termination of the lease.

 

F-12

The Company adopted ASC 842 and recorded right of use asset and operating lease liability of $1,082,241 The Company used 12%12% as incremental borrowing rate as is the average interest rate of the Company’s outstanding third party note. The lease agreement gives the Company the option to renew it for two additional 5 year terms but the Company did not consider it likely to exercise that option. Therefore, the Company did not include such amounts in its computations of the present value of remaining lease payment on the adoption date.

 

Supplemental balance sheet information related to leases is as follows:

Schedule of Operating Leases

September 30, 20212022

 

Operating Leases Classification September 30, 2021  Classification September 30, 2022 
Right-of-use assets Operating right of use assets $557,738  Operating right of use assets $440,306 
Total $557,738  $440,306 
Current lease liabilities Current operating lease liabilities  120,547  Current operating lease liabilities $121,510 
Non-current lease liabilities Long-term operating lease liabilities  473,759  Long-term operating lease liabilities $352,249 
Total $594,306  $473,759 

 

F-13

Lease term and discount rate were as follows:

Summary of Operating Lease Liabilities 

September 30, 20212022
Weighted average remaining lease term (years)3.752.75
Weighted average discount rate12%

 

The following summarizes lease expenses for the nine months ended September 30, 2021:

Summary of Lease Expenses2022:

Finance lease expenses:

Summary of Lease Expenses 

    
Depreciation/amortization expense $90,092  $34,459 
Interest on lease liabilities  57,481   5,005 
Finance lease expense $147,573  $39,461 

 

Supplemental disclosures of cash flow information related to leases were as follows:

Schedule of Cash Flow Information Related to Lease

 September 30, 2021  September 30, 2022 
Cash paid for operating lease liabilities $79,230  $143,676 
Operating right of use assets obtained in exchange for operating lease liabilities $0  $- 

 

Maturities of lease liabilities were as follows as of September 30, 2021:2022:

Schedule of Maturities of Lease Liabilities

 Operating Leases  

Operating

Leases

 
      
2021 $28,401 
2022  131,284  $46,614 
2023  105,593  $158,298 
2024  98,931  $138,532 
2025  141,302  $141,302 
2026  107,558  $107,558 
Total  613,069  $592,304 
Less: Imputed interest  (18,763) $(118,545)
Present value of lease liabilities $594,306  $473,759 

 

December 31, 2020

Operating Leases Classification December 31, 2020 
Right-of-use assets Operating right of use assets $636,968 
Total   $636,968 
Current lease liabilities Current operating lease liabilities  107,242 
Non-current lease liabilities Long-term operating lease liabilities  565,632 
Total   $672,874 

F-14F-13

 

 

December 31, 2021

Operating Leases Classification December 31, 2021 
Right-of-use assets Operating right of use assets $529,711 
Total   $529,711 
Current lease liabilities Current operating lease liabilities $125,266 
Non-current lease liabilities Long-term operating lease liabilities $440,366 
Total   $565,632 

Lease term and discount rate were as follows:

 

December 31, 20202021
Weighted average remaining lease term (years)4.503.50
Weighted average discount rate12%

 

The following summarizes lease expenses for the year ended December 31, 2020:2021:

 

Finance lease expenses:

 

    
Depreciation/amortization expense $118,291  $107,257 
Interest on lease liabilities  101,934   77,121 
Finance lease expense $220,225  $184,378 

 

Supplemental disclosures of cash flow information related to leases were as follows:

 

 December 31, 2020  December 31, 2021 
Cash paid for operating lease liabilities $216,587  $107,242 
Operating right of use assets obtained in exchange for operating lease liabilities $0  $- 

 

Maturities of lease liabilities were as follows as of December 31, 2020:2021:

 

 Operating Leases  

Operating

Leases

 
      
2021 $113,320 
2022  131,284  $186,453 
2023  105,593  $158,298 
2024  98,931  $138,532 
2025  141,302  $141,302 
2026  107,558  $107,558 
Total  697,988  $732,143 
Less: Imputed interest  (25,114) $(166,511)
Present value of lease liabilities $672,874  $565,632 

 

F-14

Note 5 – Fixed assets

Machinery and equipment consisted of the following at:

Schedule of Machinery and Equipment

 September 30, 2021 December 31, 2020  September 30, 2022 December 31, 2021 
          
Automotive vehicles $485,701  $398,614  $565,695  $485,701 
Furniture and equipment  108,265   85,435  $108,265  $108,265 
Machinery and Equipment  135,706   135,706  $135,706  $135,706 
Leasehold improvements  141,232   128,414  $148,994  $141,234 
Fixed assets, total  870,904   748,169  $958,660  $870,906 
Total : accumulated depreciation  (549,648)  (451,759)
Total: accumulated depreciation $(682,164) $(586,130)
Fixed assets, net $321,256  $296,410  $276,496  $284,776 

 

Depreciation expense for the three and nine months ended September 30, 20212022 and, September 30, 20202021 were $37,82838,767, $97,88996,034, $32,35937,828 and $92,899 97,889respectively.

 

Note 6 – Notes payable

Notes payable to non-related parties

During February 2015, the Company borrowed $50,000 from a non-related party. The loan was due and payable on April 6, 2015 and is now payable on demand with interest at 10% per annum. As of September 30, 2021 and December 31, 2020, the principal balance owed on this loan was $50,000 and $50,000, respectively. The due date was extended to January 1, 2022.

F-15

During April 2015, the Company borrowed $25,000 from a non-related party. The loan is due and payable May 1, 2015 with interest at 6% per year and has a 5% per month penalty upon default. As of September 30, 2021 and December 31, 2020, the principal balance owed on this loan was $25,000 and $25,000, respectively. The due date was extended to January 1, 2022.

On January 5, 2016, the Company borrowed $10,000 from a non-related party. The loan was due and payable on January 5, 2017 and bore interest at 5% per annum and has a 5% per month penalty upon default. During the nine months ended September 30, 2021 the Company repaid $10,000. The principal balance owed on this loan at September 30, 2021 and December 31, 2020 was $0 and $10,000, respectively. The due date was extended to January 1, 2022.

On May 15, 2019 the Company entered in a 12% promissory loan with Helix Funding, LLC for the principle amount of $100,000. The note matures on November 1, 2019. During the year ended December 31, 2020 the Company repaid $100,000 of principle. As of December 31, 2020 the remaining balance on the note is $0.

 

Convertible notes payable to non-related parties

 

On October 18, 2017, the Company borrowed $150,000from an unrelated third party. The Company paid $15,250of fees associated with the loan, which was recorded as discount and to be amortized over the term of the debt and was fully amortized as of December 31, 2018. The loan bears interest at a rate of 10%10% (default interest 24%24%) and has a maturity date of July 16, 2018. The Holder has the option to convert the outstanding principal and accrued interest into common stock of the Company. The conversion price is the lesser of (1) lowest trading price during the previous 25 days prior to the note agreement or (2) 50% lowest trading price during the 25 days prior to conversion. Covenants: The Borrower shall not, without the Holder’s consent, sell, lease or dispose of any significant portion of its assets outside the ordinary course of business.During the year ended December 31, 2018 the Company paid $150,000to extend the maturity date until May 11, 2019. During the year ended December 31, 2019, the Company paid $75,000in extension fees. The note was discounted for a derivative (see note 8 for details) and the discount of $134,750is being amortized over the life of the note using the effective interest method which was fully amortized as of December 31, 2018. During the year ended December 31, 2019 the holder converted $39,478of accrued interest into 2,178,825shares of common stock resulting in a loss of $61,624. As of September 30,December 31, 2021 and December 31, 2020 the balance outstanding on the loan is $0and $150,000, respectively. On May 28, 2021 the Company entered into a settlement and release agreement with the borrower and agreed to pay them discuss additional amount bounded to interest expense for the settlement $400,000. The Firstfirst payment of $200,000was due upon signing and Company agreed to make additional $100,000payments on the 30th and 60th day after signing. The additional $250,000settlement was record as interest during the nine monthsyear ended September 30,December 31, 2021. As of September 30, 2022 and December 31, 2021 accrued interest and the note balance had been repaid.

 

On March 21, 2018, the Company borrowed $45,000 from an unrelated third party. The Company paid $4,500 of fees associated with the loan and had amortized $3,514 of the costs as of December 31, 2018. The note bears an interest rate: 12%12% (default interest lesser of 15%15% or maximum permitted by law) and matures on March 21, 2019. The conversion Feature Convertible immediately after the issuance, the Holder has the option to convert the outstanding principal and accrued interest into common stock of the Company. The Conversion price is 55% of the lowest trading price during the 25 Trading Day periods prior to the Conversion. Covenants: The Borrower shall not, without the Holder’s consent, sell, lease or dispose of any significant portion of its assets outside the ordinary course of business. The note was discounted for a derivative (see note 8 for details) and the discount of $40,500 is beinghas been fully amortized over the life of the note using the effective interest method resulting in $31,623method. As of interest expense for the year ended December 31, 2018. During the year ended December 31, 2019 $23,223 of principle and interest were converted into 841,602 shares of common stock resulting in a loss of $32,858. During the year ended December 31, 2019 the Company recorded amortization expense of $9,863. On September 18, 2020 Crown Bridge Partners, LLC converted notes payable in the principal amount of $2,980 and $500 of fees into 29,000,000 shares of common stock. No gain or loss was recorded and conversions were made per the terms of agreement. On February 28, 2021 Crown Bridge Partners, LLC converted notes payable in the principal amount of $9,510 and $500 of fees into 26,000,000 shares of common stock. During the nine months ended September 30, 2021 the Company repaid the remaining principle balance of $9,708.amount had been fully amortized. As of September 30, 20212022 and December 31, 2020 there was a2021 accrued interest and the note balance remaining on the loan of $0 and $19,218, respectively.

F-16

During the nine months ended September 30, 2021 and 2020, the Company recognized amortization expense of $0 and $8,710 of discount from derivative liabilities.had been repaid.

 

Note 7 – Notes payable – related parties

Long-term liabilities: Notes payable - related parties

As of December 31, 2021 the Company owed MKM Capital Advisors and two related entities $128,600 plus accrued interest of $70,088. The amount owed to the MKM entities was represented by three Promissory Notes dated between February 6, 2015 and July 7, 2016. In March 2022 the MKM entities agreed to (i) consolidate the Promissory Notes into a new note in the principal amount of $128,600 and (ii) forgive the accrued interest of $70,088. The new Promissory Note is due and payable on December 27, 2026 and bears an interest (from December 27, 2021 to the date of payment) of 5% per year. During the nine months ended September 30, 2022, the Company repaid $25,301 of principle and accrued interest as of September 30, 2022, amounted to $0. As of September 30, 2022 the balance owed on the loan is $103,298.

F-15

As of December 31, 2021 the Company owed CGDK, LLC $1,185,217, plus accrued interest of $452,246. The amount owed to CGDK was represented by seven Promissory Notes dated between July 9, 2015 and August 6, 2018. In March 2022, CGDK agreed to (i) consolidate the Promissory Notes into a new note in the principal amount of $1,185,217 and (ii) forgive the accrued interest of $452,246. The new Promissory Note is due and payable on December 31, 2026 and bears an interest (from January 1, 2022 to the date of payment) of 5% per year. During the nine months ended September 30, 2022, the loan was assumed by Doyle Knudson a related party and the Company repaid $233,131 of   principal and accrued interest as of September 30, 2022. As of September 30, 2022, the balance on the loan is $952,086.  

Current liabilities: Notes payable - related parties

 

On July 31, 2014, the Company borrowed $98,150 from an entity controlled by ana former officer and shareholder of the Company. The loan is due and payable on demand and bears no interest. As of September 30, 20212022 and December 31, 2020,2021, the principal balance owed on this loan is $98,150 and $98,150, respectively.

As of December 31, 2014, a related party loaned the Company $10,000, in the form of cash and expenses paid on behalf of the Company. The loan is due January 1, 2022 and bears no interest. During the year ended December 31, 2015 the Company borrowed an additional $20,000. During the nine months ended September 30, 2021 the Company repaid $10,000 of principle. As of September 30, 2021 and December 31, 2020, the principal balance owed on this loan was $20,000 and $30,000, respectively.

 

As of December 31, 2014, a related party loaned the Company $180,121, in the form of cash and expenses paid on behalf of the Company. The loan is due and payable on demand and bears no interest. The Company repaid $125,500 towards this note during 2015 and as of September 30, 20212022 and December 31, 2020;2021 the principal balance owed on this loan was $54,621 and $54,621, respectively.

Current Liabilities: Convertible notes payable to related parties

 

On July 7, 2016,As of December 31, 2021 the Company borrowedowed Hypur Inc. $73,000688,500 from a related party.plus accrued interest. The loan was dueamounts owed to Hypur were represented by eight Promissory Notes dated between September 20, 2016 and payable on July 7, 2017September 3, 2019. By an agreement effective January 31, 2022 the Company and bore interest at 5% per annum. The holder of the note hasHypur agreed to extend the default date of the note to January 1, 2022.following:

 

●On March 3, 2022 the Company paid Hypur $137,500, which was applied to principal of the notes.
●On or before each date shown below, the Company paid Hypur $12,500, which applied to principal of the notes.

On August 8, 2016, the Company entered into a promissory note with Hypur Inc., a Nevada Corporation, a related party, pursuant to which the Company borrowed $52,000. If an EventSchedule of Default remains uncured after 30 days Holder has the option to convert the outstanding principal balance and any accrued but unpaid interest, into unrestricted $Related Parties Debt Maturity0.001 par value common stock of the Borrower The loan was due and payable on

Date Amount 
    
March 31, 2022 $12,500 
     
April 30, 2022 $12,500 
     
May 31, 2022 $12,500 
     
June 30, 2022 $12,500 

August 10, 2017 and bore

●On or before July 31, 2022 the Company will pay Hypur $137,500, which will apply to principal of the notes.
●All principal amounts owed to Hypur under the Promissory Notes will bear interest at 7.5% per year between January 31, 2022 and July 31, 2022 as long as the Company is not in default under the terms of its agreement with Hypur.
●If by July 31, 2022 all payments required by the Company’s agreement with Hypur have been made in a timely fashion, Hypur will forgive $250,000 of accrued interest owed by the Company under the Promissory Notes.

18% per annum.

F-16

●After July 31, 2022 future payment plans will be negotiated, provided however that any principal amounts owed to Hypur under the Promissory Notes after July 31, 2022 will not bear interest in excess of 7.5% per year with a default rate of 12% per year.
●Hypur will waive any default rights between January 31, 2022 and August 31, 2022 on a month-to-month basis so long as all payments required by the Company’s agreement with Hypur have been made.

During the nine months ended September 30, 20212022 the Company repaid a total of $52,000338,570,. The principle balance owed on this loan at June 30, 2021 and December 31, 2020 was $0 and $52,000, respectively. The Note is currently in default at bears a default rate of interest of 24% per annum as part of the default terms of this note. Upon default, if the default has not been remedied within 30 days, the redemption price would be 150% of the principal amount.

On September 20, 2016, the Company borrowed $47,500 from Hypur Inc., which is a related party. The loan isamount due and payable on December 20, 2016 and bears interest at 18% per annum. If an Event of Default remains uncured after 30 days Holder has the option to convert the outstanding principal balance and any accrued but unpaid interest, into unrestricted $0.001 par value common stock of the Borrower. The principal balance owed on this loan at September 30, 2021 and December 31, 2020 was $47,500 and $47,500, respectively. The loan is currently past due and in default. The Note is currently in default at bears a default rate of interest of 24% per annum as part of the default terms of this note. Upon default, and if the default has not been remedied within 30 days, the redemption price would be 150% of the principal amount. The notes are in default as of September 30, 2021 and December 31, 2020, but the holder has agreed to waive the 150% redemption price default term.

On October 29, 2018, the Company borrowed2022 is $100,000349,930 from. Hypur Inc., which is a related party. The loan is due and payable on January 28, 2019 and bears interest at 18% per annum. If an Event of Default remains uncured after 30 days Holder has the option to convert the outstanding principal balance and any accrued but unpaid interest, into unrestrictedforgave $0.001 par value common stock of the Borrower. Upon default the note bears a default rate of interest of 24% per annum as part of the default terms of this note. The principal balance owed on this loan at September 30, 2021 and December 31, 2020 was $100,000 and $100,000, respectively. The note was discounted for a derivative (see note 8 for details) and the discount of $89,350 is being amortized over the life of the note using the effective interest method resulting in $89,350 of interest expense for the year ended December 31, 2019. As of September 30, 2021 and December 31, 2020 the note is currently in default.

F-17

On November 21, 2018, the Company borrowed $70,000 from Hypur Inc., which is a related party. The loan is due and payable on February 19, 2019 and bears interest at 18% per annum. If an Event of Default remains uncured after 30 days Holder has the option to convert the outstanding principal balance and any accrued but unpaid interest, into unrestricted $0.001 par value common stock of the Borrower. Upon default the note bears a default rate of interest of 24% per annum as part of the default terms of this note. The principal balance owed on this loan at September 30, 2021 and December 31, 2020 was $70,000 and $70,000, respectively. The note was discounted for a derivative (see note 8 for details) and the discount of $55,830 is being amortized over the life of the note using the effective interest method resulting in $55,830 of interest expense for the year ended December 31, 2019. As of September 30, 2021 and December 31, 2020 the note is currently in default.

On November 26, 2018, the Company borrowed $75,000 from Hypur Inc., which is a related party. The loan is due and payable on February 24, 2019 and bears interest at 18% per annum. If an Event of Default remains uncured after 30 days Holder has the option to convert the outstanding principal balance and any accrued but unpaid interest, into unrestricted $0.001 par value common stock of the Borrower. Upon default the note bears a default rate of interest of 24% per annum as part of the default terms of this note. The principal balance owed on this loan at September 30, 2021 and December 31, 2020 was $75,000 and $75.000, respectively. The note was discounted for a derivative (see note 8 for details) and the discount of $58,913 is being amortized over the life of the note using the effective interest method resulting in $58,913 of interest expense for the year ended December 31, 2019. As of September 30, 2021 and December 31, 2020 the Note is currently in default.

On May 10, 2019, the Company borrowed $75,000 from Hypur Inc., which is a related party. The loan is due and payable on May 12, 2020 and bears interest at 18% per annum. If an Event of Default remains uncured after 30 days Holder has the option to convert the outstanding principal balance and any accrued but unpaid interest, into unrestricted $0.001 par value common stock of the Borrower. Upon default the note bears a default rate of interest of 24% per annum as part of the default terms of this note. The principal balance owed on this loan at September 30, 2021 and December 31, 2020 was $75,000. As of September 30, 2021 and December 31, 2020 the Note is currently in default.

On September 3, 2019, the Company borrowed $21,000 from Hypur Inc., which is a related party. The loan is due and payable on December 3, 2019 and bears interest at 18% per annum. If an Event of Default remains uncured after 30 days Holder has the option to convert the outstanding principal balance and any accrued but unpaid interest, into unrestricted $0.001 par value common stock of the Borrower. Upon default the note bears a default rate of interest of 24% per annum as part of the default terms of this note. The principal balance owed on this loan at September 30, 2021 and December 31, 2020 was $21,000. As of September 30, 2021 and December 31, 2020 the Note is currently in default.

During the year ended December 31, 2020, the Company repaid Patrick Deparini $575.

Convertible notes payable to related parties

On November 13, 2015, the Company borrowed $25,000 from Hypur Inc., which is a related party. The loan is due and payable on November 12, 2015 and bears interest at 18% per annum. If an Event of Default remains uncured after 30 days Holder has the option to convert the outstanding principal balance and any accrued but unpaid interest, into unrestricted $0.001 par value common stock of the Borrower. Upon default the note bears a default rate of interest of 24% per annum as part of the default terms of this note. During the nine months ended September 30, 2021 the Company repaid $25,000. The principal balance owed on this loan at September 30, 2021 and December 31, 2020 was $0 and $25,000, respectively.

In November 2015, the Company entered into an arrangement with a related party, whereby the Company borrowed $25,000 in Convertible Notes. The Convertible Note bears interest at a rate of 5% per annum and payable quarterly in arrears and matures twelve months from the date of issuance, and is convertible into shares of the Company’s common stock at a per share conversion price equal $25K repayment is for OMB to $0.025. The note was due on November 4, 2016. In December 2015 the lender loaned the Company an additional $20,000 with same terms except that it is payable upon demand. During the nine months ended September 30, 2021 the Company repaid $45,000 of principal and $6,767250,000 of accrued interest. As of September 30, 2021 and December 31, 2020,interest owed by the Company owed a total of $0 and $45,000, respectively. The holder ofunder the note has agreed to extend the default date of the note to January 1, 2022.Promissory Notes, which was recognized as additional paid in capital.

F-18

In July 2015, the Company entered into an arrangement with a related party, whereby the Company could borrow up to $500,000 in Convertible Notes. The Convertible Note bears interest at a rate of 5% per annum and payable quarterly in arrears and matures twelve months from the date of issuance, and is convertible into shares of the Company’s common stock at a per share conversion price equal to $0.025. Upon the occurrence and during the continuation of an event of default, the holder may require the Company to redeem all or any portion of this Note in cash at a price equal to 150% of the principal amount. During the year ended December 31, 2017, the Company borrowed an additional $110,000. As of September 30, 2021 and December 31, 2020, the Company owed a total of $475,000 and $475,000, respectively. Since the debt holder has not elect the right to require the Company to redeem the note at a price equal to 150% of the principal amount, the terms stated prior to maturity are still in effect. The holder has waived the default term and the note is not considered to be in default as of September 30, 2021 and December 31, 2020.

 

On September 1, 2016, the Company entered into, ana convertible promissory note with Hypur Ventures, L.P., a Delaware limited partnership (the “Hypur Ventures”) which is a related party pursuant to which the Company to borrow $75,000. The loan was due 180 days from the date of issuance and bears interest at 10%10% per annum. The note is convertible into common stock at a price of $.05 per share. The note is mandatory redeemable into common stock if the price per share is over $.50 per share during a 10 day period. The principal balance owed on this loan at September 30, 20212022, and December 31, 20202021 was $75,000 and $75,000, respectively. Upon default, the note bears a default rate of interest of 15%15% per annum, and if the default has not been remedied within 30 days, the redemption price would be 150%150% of the principal amount. As of September 30, 20212022 and December 31, 2020,2021, Hyper has waived the default provision until January 1, 2022.further notice.

 

On October 14, 2016, the Company entered into a convertible promissory note with Hypur Ventures, L.P., a Delaware limited partnership (the “Hypur Ventures”) and a related party, pursuant to which the Company borrowed $100,000. The loan was due 180 days from the date of issuance and bears interest at 10%10% per annum. The note is convertible into common stock at a price of $.05 per share. The note is mandatory redeemable into common stock if the price per share is over $.50 per share during a 10 day period. The principal balance owed on this loan at September 30, 20212022 and December 31, 20202021 was $100,000 and $100,000, respectively. Upon default, the note bears a default rate of interest of 15%15% per annum, and if the default has not been remedied within 30 days, the redemption price would be 150%150% of the principal amount. As of September 30, 20212022 and December 31, 2020,2021, Hyper has waived the default provision until January 1, 2022.further notice.

 

On March 7, 2017, the Company borrowed $100,000 from Hypur Ventures, L.P., a related party. The loan is due 180 days from March 7, 2017 and bears interest at 10% per annum. The loan is convertible into shares of the Company’s common stock at a price of $.05 per share. The loan will automatically convert into shares of the Company’s common stock if the price of the Company’s common stock is over $.50 per share during any ten-day period. The principal balance owed on this loan September 30, 20212022 and December 31, 20202021 was $100,000 and $100,000 respectively. Upon default, the note bears a default rate of interest of 15%15% per annum, and if the default has not been remedied within 30 days, the redemption price would be 150%150% of the principal amount. As of September 30, 20212022, and December 31, 2020,2021, Hyper has waived the default provision until January 1, 2022.further notice.

 

On May 26, 2017, the Company borrowed $100,000 from CGDK, a related party. The loan is due 360 days from May 26, 2017 and bears interest at 5% per annum. The loan is convertible into shares of the Company’s common stock at a price of $.025 per share. The loan will automatically convert into shares of the Company’s common stock if the price of the Company’s common stock is over $.25 per share during any ten-day period. The principal balance owed on this loan at September 30, 2021 and December 31, 2020 was $100,000 and $100,000, respectively. As of September 30, 2021 and December 31, 2020 the note was currently in default.

On July 13, 2017, the Company borrowed $150,000 from CGDK, a related party. The loan is due 360 days from July 13, 2017, and bears interest at 5% per annum. The loan is convertible into shares of the Company’s common stock at a price of $.05 per share. The loan will automatically convert into shares of the Company’s common stock if the price of the Company’s common stock is over $.25 per share during any ten-day period. The principal balance owed on this loan at September 30, 2021 and December 31, 2020 was $150,000. The conversion feature has been waved through October 15, 2019. As of September 30, 2021 and December 31, 2020, the note is currently in default.

F-19

On April 13, 2018, the Company borrowed $130,000 from CGDK, a related party. The loan is due 360 days from April 13, 2018, bears interest at 12% per annum. The loan is convertible into shares of the Company’s common stock at a price of $.05 per share. The loan will automatically convert into shares of the Company’s common stock if the price of the Company’s common stock is over $.25 per share during any ten-day period. The Company recorded a discount of $101,272 due to derivative. The Company amortized $72,694 in debt discounts during the year ended December 31, 2018. The Company amortized $27,560 in debt discounts during the year ended December 31, 2019. The principal balance owed on this loan at September 30, 2021 and December 31, 2020 is $130,000 and $130,000, respectively. On November 5, 2019 CGDK waived the default provision until January 1, 2022.

On June 14, 2018, the Company issued a note payable in the amount of $30,217 to CGDK, a related party, for previous expenses paid on behalf of the Company. The loan is due 360 days from June 18, 2018, bears interest at 12% per annum. The loan is convertible into shares of the Company’s common stock at a price of $.05 per share. The loan will automatically convert into shares of the Company’s common stock if the price of the Company’s common stock is over $.25 per share during any ten-day period. The Company recorded a debt discount of $10,292 due to derivative. During the year ended December 31, 2018 the Company amortized $5,639 of the discount. The Company amortized $3,697 in debt discounts during the year ended December 31, 2019. The principal balance owed on this loan at September 30, 2021 and December 31, 2020 is $30,217 and $30,217, respectively. On November 5, 2019 CGDK waived the default provision until June 14, 2020. On December 22, 2020 the Company received a waiver from CGDL, LLC extending the maturity of the note to June 14, 2021.

On July 2, 2018, the Company borrowed $150,000 from CGDK, a related party. The loan is due July 2, 2019 and bears interest at 12% per annum. The loan is convertible into shares of the Company’s common stock at a price of $.05 per share. The loan will automatically convert into shares of the Company’s common stock if the price of the Company’s common stock is over $.10 per share during any ten-day period or the trading volume of the Company’s common stock during these ten trading days was at least 2,500,000 shares. The Company recorded a debt discount of $19,779 due to derivative. During the year ended December 31, 2018 the Company amortized $9,862 of the discount. The Company amortized $7,390 in debt discounts during the year ended December 31, 2019. The principal balance owed on this loan at September 30, 2021 and December 31, 2019 is $150,000 and $150,000, respectively. On November 5, 2019 CGDK waived the default provision until July 2, 2020. On December 22, 2020 the Company received a waiver from CGDL, LLC extending the maturity of the loan to June 14, 2021.

On August 6, 2018, the Company borrowed $150,000 from CGDK, a related party. The loan is due July 2, 2019 and bears interest at 12% per annum. The loan is convertible into shares of the Company’s common stock at a price of $.05 per share. The loan will automatically convert into shares of the Company’s common stock if the price of the Company’s common stock is over $.10 per share during any ten-day period or the trading volume of the Company’s common stock during these ten trading days was at least 2,500,000 shares. The Company recorded a debt discount of $20,095 due to derivative. During the year ended December 31, 2018 the Company amortized $8,093 of the discount. The Company amortized $7,793 in debt discounts during the year ended December 31, 2019. The principal balance owed on this loan at September 30, 2021 and December 31, 2020 is $150,000 and $150,000, respectively. On November 5, 2019 CGDK waived the default provision until August 6, 2020. On December 22, 2020 the Company received a waiver from CGDL, LLC extending the maturity of the loan to June 14, 2021.

On January 18, 2019, the Company entered into, a convertible promissory note with Hypur Ventures, L.P., a Delaware limited partnership (the “Hypur Ventures”) which is a related party pursuant to which the Company to borrow $250,000. The loan was due 10 days from the date of issuance and bears interest at 18% per annum. The note is convertible into common stock at a price at the lower of $.02 per share or 60% of the closing price of the common stock prior to conversion. Upon default, the note bears a default rate of interest of 24% per annum. The note was discounted for a derivative (see note 8 for details) and the discount of $167,079 is being amortized over the life of the note using the effective interest method resulting in $167,079 of interest expense for the year ended December 31, 2019. As of September 30, 2021 and December 31, 2020 the note is currently in default.

F-20

On March 5, 2019, the Company entered into, an convertible promissory note with Hypur Ventures, L.P., a Delaware limited partnership (the “Hypur Ventures”) which is a related party pursuant to which the Company to borrow $50,000. The loan was due 10 days from the date of issuance and bears interest at 18% per annum. The note is convertible into common stock at a price at the lower of $.02 per share or 60% of the closing price of the common stock prior to conversion. Upon default, the note bears a default rate of interest of 24% per annum. As of September 30, 2021 and December 31, 2020 the note is currently in default.

On October 1, 2017, these notes were tainted by the variable conversion price notes and remained tainted as of December 31, 2019. The Company re-measured the fair value of derivative liabilities on September 30, 20212022 and December 31, 2020.2021. See Note 8.

 

Note 8 – Derivative Liability

 

The Company analyzed the conversion options for derivative accounting consideration under ASC 815, Derivatives and Hedging, and determined that an instrument should be classified as a liability when a conversion option becomes effective.

 

The derivative liability in connection with the conversion feature of the convertible debt is measured using level 3 inputs.

 

F-17

The change in the fair value of derivative liabilities is as follows:

Schedule of Derivative Liabilities at Fair Value

     
Balance - December 31, 2019 $1,170,060 
Addition of new derivative as a derivative loss  -  
Settlement of derivatives upon conversion  (14,327)
Debt discount from derivative liability  176,858 
Loss on change in fair value of the derivative  915,054 
Balance - December 31, 2020 $2,247,645 
Settlement of derivatives upon conversion  (403,283)
Loss on change in fair value of the derivative  99,347 
Balance – September 30, 2021 $1,943,709 
Balance - December 31, 2020 $2,247,645 
Settlement of derivatives upon conversion $(457,572)
Gain on change in fair value of the derivative $(1,077,289 
Balance – December 31, 2021 $712,784 
Settlement of derivatives upon conversion $(417,018)
Gain on change in fair value of the derivative $203,362 
Balance – September 30, 2022 $499,128 

 

The table below shows the Black-Scholes option-pricing model inputs used by the Company to value the derivative liability at each measurement date:

Schedule of Derivative Instruments, Black-Scholes Option-pricing Model Inputs Used

  Nine Months ended
September 30, 2021		  Year ended
December 31, 2020		 
Expected term  0.25 – 1.09 years   0.08 – 1.01 years 
Expected average volatility  177.76% – 307.33%  291.56% – 378.27%
Expected dividend yield  0   0 
Risk-free interest rate  0.40% – 0.90%  0.08% – 0.15%
Year ended September 30, 2022Year ended December 31, 2021
Expected term0.25 – 1.09 years0.25 – 1.09 years
Expected average volatility142.75 – 284.09%138.34% – 162.05%
Expected dividend yield--
Risk-free interest rate2.79 % – 4.05%0.06 % – 0.39%

 

Note 9 – Stockholders’ equitydeficit

 

The Company was originally authorized to issue 100,000,000shares of common stock and 100,000,000shares of preferred stock. On May 6, 2014, the Company effected a forward stock split and a pro-rata increase in its authorized common stock on a basis of 14-to-1, whereby each shareholder received 14 newly issued shares of common stock for each 1 share held.Additionally, the number of authorized shares increased to 1,400,000,000shares of common stock. All references to share and per share amounts in the consolidated financial statements and these notes thereto have been retroactively restated to reflect the forward stock split.

 

On July 6, 2021, the Company effected a reverse stock split and a pro-rata decrease in its authorized common stock on a basis of 1-for-100, the authorized capital of the Company concurrently decreased to 14,000,000 shares of common stock. All references to share and per share amounts in the consolidated financial statements and accompanying notes thereto have been retroactively restated to reflect the forward stock split. The Company issued a total of 1,570 shares of common stock due to rounding on the reverse stock split.

 

F-21

Common stock

 

On February 28, 2021 Crown Bridge Partners, LLC converted notes payable inDuring the principal amount of $nine months ended September 30, 9,5102022, and $500 of fees into 260,000 shares of common stock.stock were returned to the treasury.

 

Preferred stock

 

On May 3, 2016, the Company entered into, an agreement with Hypur Ventures, L.P., a Delaware limited partnership (the “Hypur Ventures”) which is a related party pursuant to which the Company sold to Hypur Ventures, in a private placement, 10,000,000 shares of the Company’s preferred stock and 5,000,000 common stock warrants with a five year term and an exercise price of $0.10, at a purchase price of $0.05 per share for gross proceeds of $500,000. The shares of preferred stock are convertible into shares of the Company’s common stock. The preferred stock shall have such other rights, preferences and privileges to be set forth in a certificate of designation to be filed with the Nevada Secretary of State. The Company evaluated the convertible preferred stock under FASB ASC 470-20-30 and determined it contained a beneficial conversion feature. The intrinsic value of the beneficial conversion feature was determined to be $114,229. The beneficial conversion feature was fully amortized and recorded as a deemed dividend.

 

F-18

Between July and August of 2016 Hypur Ventures purchased an additional 10,000,000 shares of the Company’s preferred stock and 5,000,000 common stock warrants with a five year term and an exercise price of $0.10, at a purchase price of $0.05 per share for net proceeds of $445,000, net of legal fees of $55,000. The shares of preferred stock are convertible into shares of the Company’s common stock. The preferred stock shall have such other rights, preferences and privileges to be set forth in a certificate of designation to be filed with the Nevada Secretary of State. The Company evaluated the convertible preferred stock under FASB ASC 470-20-30 and determined it does not contain a beneficial conversion feature. The intrinsic value of the beneficial conversion feature was determined to be $0. The preferred stock is convertible at any time at the election of Hypur Ventures. The preferred stock shall automatically convert to common stock if the closing price of the Company’s common stock equals or exceeds $.500.50 per share over any consecutive twenty day trading period. The preferred stock terms include a one-time purchase price preference. No preferential dividends apply to the preferred stock. The preferred stock attributes include weighted average anti-dilution protection, rights to appoint one director, pre-emptive rights to purchase future offerings of securities by the Company, demand and piggy-back registration rights.

 

The preferred stock is convertible at any time at the election of Hypur Ventures. The preferred stock shall automatically convert to common stock if the closing price of the Company’s common stock equals or exceeds $.500.50 per share over any consecutive twenty day trading period. The preferred stock terms include a one-time purchase price preference. No preferential dividends apply to the preferred stock. The preferred stock attributes include weighted average anti-dilution protection, rights to appoint one director, pre-emptive rights to purchase future offerings of securities by the Company, demand and piggy-back registration rights.

 

The Company has reserved thirty million shares of common stock that may be issued upon the conversion and/or exercise of the preferred stock and the warrants. The preferred stock sold to Hypur Ventures will be subject to the terms and conditions of the Certificate of Designation, as well as further documentation to be drafted in accordance with the terms and conditions agreed upon between the Company and Hypur Ventures.

 

Note 10 – Options and warrants

 

Options

 

All stock options have an exercise price equal to the fair market value of the common stock on the date of grant. The fair value of each option award is estimated using a Black-Scholes-Merton option valuation model. The Company has not paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. Consequently, the Company uses an expected dividend yield of zero in the Black-Scholes-Merton option valuation model. Volatility is an estimate based on the calculated historical volatility of similar entities in industry, in size and in financial leverage, whose share prices are publicly available. The expected life of awards granted represents the period of time that they are expected to be outstanding. The Company has no historical experience with which to establish a basis for determining an expected life of these awards. Therefore, the Company only gave consideration to the contractual terms and did not consider the vesting schedules, exercise patterns and pre-vesting and post-vesting forfeitures significant to the expected life of the option award. The Company bases the risk-free interest rate used in the Black-Scholes-Merton option valuation model on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term equal to the expected life of the award.

 

F-22

All of the options granted by the Company expired as of December 31, 2020.

The following is a summary of the Company’s stock option activity for the year ended December 31, 2020:

Summary of Stock Option Activity

  Number Of
Options		  

Weighted-Average

Exercise Price

 
       
Outstanding at December 31, 2019  240,117  $1.10 
Granted  -  $- 
Expired  (240,117) $1.10 
Cancelled  -  $- 
Outstanding at December 31, 2020  -  $- 
Options exercisable at December 31, 2020  -  $- 

NaN stock options were granted during the nine months ended September 30, 2021.

The following tables summarize information about stock options outstanding and exercisable at September 30, 2021 and December 31, 2020:

Schedule of Stock Options Outstanding and Exercisable Exercise Price Range

OPTIONS OUTSTANDING AND EXERCISABLE AT DECEMBER 31, 2020
Range of
Exercise Prices		Number of
Options
Outstanding		Weighted-
Average
Remaining
Contractual
Life in Years		Weighted-
Average
Exercise Price		Number
Exercisable		Weighted-
Average
Exercise Price
$---$--$-

Total stock-based compensation expense in connection with options and modified awards recognized in the consolidated statement of operations for nine months ended September 30, 2021 and 2020 was $0 and $0 respectively.

Warrants

The following is a summary of the Company’s warrant activity for the nine months ended September 30, 2021:

Summary of Warrants Activity

  Number Of
Warrants		  

Weighted-Average

Exercise Price

 
Outstanding at December 31, 2020  100,000  $1.00 
Granted  -  $- 
Expired  (100,000) $1.00 
Cancelled  -  $- 
Outstanding at September 30, 2021  -  $1.00 
Warrants exercisable at December 31, 2020  100,000  $1.00 
Warrants exercisable at September 30, 2021  -  $- 

The following tables summarize information about warrants outstanding and exercisable at December 31, 2020:

Schedule of Warrants Outstanding and Exercisable Exercise Price Range

WARRANTS OUTSTANDING AND EXERCISABLE AT DECEMBER 31, 2020 
Range of
Exercise
Prices		  

Number of

Warrants

Outstanding

  

Weighted-

Average

Remaining

Contractual Life

in Years

  

Weighted-

Average

Exercise Price

  

Number

Exercisable

  

Weighted-

Average

Exercise Price

 
$1.00  100,000  .52  $1.00  100,000  $1.00 

Note 11 – Subsequent events

 

The Company has evaluated all other subsequent events from the balance sheet date through the date the financial statements were issued and has determined there are no additional events required to be disclosed.

 

F-23F-19

 

 

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

 

You should read the following discussion and analysis of financial condition and results of operations in conjunction with the consolidated financial statements and related notes appearing elsewhere in this Report.

 

We were originally incorporated in Nevada on September 11, 2006, under the name The Engraving Masters, Inc. (the “Company”).

 

On May 2, 2014, we changed our name to Blue Line Protection Group, Inc.

 

We provide armed protection and transportation, banking, compliance and training services for businesses engaged in the legal cannabis industry. During the nine months ended September 30, 20212022 substantially all of our revenue was derived from transportation and currency processing services.

 

It is estimated that the total market for marijuana, legal or otherwise, will exceed the economic value of corn and wheat combined. Marijuana is widely considered the largest cash crop in the United States. Businesses have been positioning themselves for years, each trying to establish a leadership position in the legal marijuana industry.

 

Cultivation facilities are the producers of legal cannabis that eventually make its way to consumers. Growers’ operations typically span a large geographic footprint, making them susceptible to theft, as are shipments from the growers to testing laboratories or to retail dispensaries. Additionally, due to current federal marijuana legislation and banking environment, growers are finding it increasingly difficult to secure their cash, purchase equipment and obtain financing for expansion.

 

Dispensaries are the retail face of the legal cannabis industry. All legal sales of cannabis products are transacted through dispensaries that are state-licensed. To maintain their licenses, dispensaries must comply with a variety of state-mandated reporting requirements, including reporting every gram of cannabis passing in and out of the store. Dispensaries also face financing and banking challenges similar to those that growers encounter.

 

We do not grow, test, transport or sell marijuana.

 

Armed Protection and Transportation

 

Fundamental to the legal cannabis industry is the protection of product and cash throughout the distribution channel. Growers ship product from their cultivation facilities to independent laboratories where it is tested for compliance with state-mandated parameters. From the labs, the product is then delivered to the retail dispensaries, where it is sold to the public.

 

Due to the current banking and regulatory environments, payments between each step in the distribution network are made in cash: from the customer back to the grower. Therefore, these businesses are forced into having to transport bags of money between growers and dispensaries and their own vaults or storage facilities.

 

The risk of theft of cash and product is present at every stage, even when they are not in transit. Accordingly, all cannabis businesses require security measures to prevent theft, mitigate risk to employees and maintain regulatory compliance.

 

We began our security and protection operations in Colorado in February 2014. Since then, we have become the largest legal cannabis protection services company in the state. We offer a fully integrated approach to managing the movement of cannabis and cash from growers through dispensaries via armed and armored transport, money processing, vaulting and related credit. Money processing services generally include counting, sorting and wrapping currency.

 

As of December 31, 2019 we discontinued our Service-Guards segment.

We also offer security monitoring, asset vaulting, and VIP and dignitary protection.

4

 

Results of Operations

 

Material changes in line items in our Statement of Operations for the three months ended September 30, 20212022 as compared to the same period last year, are discussed below:

 

  Increase (I) or  
Item Decrease (D) Reason
Revenue I(D) IncreaseAccrual of revenue and decrease in customer services
Interest expense (D)D ReductionDecrease in debtborrowings
LossGain (loss) on change in fair value of derivative securities (D)I ReductionDecrease in debt and change inCompany’s stock price

Material changes in line items in our Statement of Operations for the nine months ended September 30, 20212022 as compared to the same period last year, are discussed below:

 

  Increase (I) or  
Item Decrease (D) Reason
Revenue (D)I IncreaseAccrual of revenue and decrease in customer services
Interest expense (D)I Settlement interest on debtDecrease in borrowings
LossGain (loss) on change in fair value of derivative securities D

(D)

 Decrease in theCompany’s stock price of our common stock and reduction of debt

 

Capital Resources and Liquidity

 

Our material sources and <uses> of cash during the nine months ended September 30, 20212022 and 20202021 were:

 

 2021 2020  2022 2021 
          
Cash provided (used) by operations $643,139  $382,152  $358,466  $643,139 
Purchase of equipment  <66,000>  <24,970>  (18,882)  (66,000)
Loan proceeds  -   24,000  -   - 
Loan payments  <368,406>  <118,037>  (627,488)  (368,406)

 

As of September 30, 20212022 we did not have any material capital commitments other than loan payments.

 

Other than as disclosed in this Item 2,above, we do not anticipate any material capital requirements for the twelve monthsyear ending September 30, 2022.2023.

 

Other than as disclosed above, we do not know of any:

 

 ●trends, demands, commitments, events or uncertainties that will result in, or that are reasonable likely to result in, our liquidity increasing or decreasing in any material way; or
   
 ●any significant changes in our expected sources and uses of cash.

 

We do not have any commitments or arrangements from any person to provide us with any equity capital.

 

During the next twelve months, we anticipate that we will incur approximately $1,200,000 of general and administrative expenses in order to execute our current business plan. We also plan to incur significant sales, marketing, research and development expenses during the next 12 months. We must obtain additional financing to continue our operations. We may not be able to obtain additional funding on terms that are favorable to us or at all. We may not be able to obtain sufficient funding to continue our operations, or if we do receive funding, to generate adequate revenues in the future or to operate profitably in the future. These conditions raise substantial doubt about our ability to continue as a going concern.

5

Off-Balance Sheet Arrangements

 

We have not entered into any off-balance sheet arrangements.

Critical Accounting Policies

 

Management considers the following policies critical because they are both important to the portrayal of our financial condition and operating results, and they require management to make judgments and estimates about inherently uncertain matters.

 

Accounts receivable. Accounts receivable are stated at the amount we expect to collect from outstanding balances and do not bear interest. We provide for probable uncollectible amounts through an allowance for doubtful accounts, if an allowance is deemed necessary. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in our existing accounts receivable; however, changes in circumstances relating to accounts receivable may result in a requirement for additional allowances in the future. On a periodic basis, management evaluates our accounts receivable and determines the requirement for an allowance for doubtful accounts based on its assessment of the current and collectible status of individual accounts with past due balances over 90 days. Account balances are charged against the allowance after all collection efforts have been exhausted and the potential for recovery is considered remote.

 

Revenue recognition. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes the revenue recognition requirements in Accounting Standards Codification 605, “Revenue Recognition.” This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASC 606-10-50-5 requires that entities disclose disaggregated revenue information in categories (such as type of good or service, geography, market, type of contract, etc.) that depict how the nature, amount, timing, and uncertainty of revenue and cash flow are affected by economic factors. ASC 606-10-55-89 explains that the extent to which an entity’s revenue is disaggregated depends on the facts and circumstances that pertain to the entity’s contracts with customers and that some entities may need to use more than one type of category to meet the objective for disaggregating revenue. In August 2015, the FASB issued ASU No. 2015-14, which deferred the effective date of the new revenue standard by one year, and allowed entities the option to early adopt the new revenue standard as of the original effective date. There have been multiple standards updates amending this guidance or providing corrections or improvements on issues in the guidance. The requirements for these standards relating to Topic 606 are effective for interim and annual periods beginning after December 15, 2017. This standard permitted adoption using one of two transition methods, either the retrospective or modified retrospective transition method.

 

We adopted these standards at the beginning of the first quarter of fiscal 2018 using the modified retrospective method. The adoption of these standards did not have an impact on our Statements of Operations for the nine months ended September 30, 2021.2022.

 

Stock-based compensation. We record stock based compensation in accordance with the guidance in ASC Topic 505 and 718, which requires us to recognize expenses related to the fair value of our employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. We recognize the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

 

Equity Instruments. We account for equity instruments issued in exchange for the receipt of goods or services from non-employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measureable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.718-10.

 

6

 

ITEM 4.CONTROLS AND PROCEDURES

ITEM 4.CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

An evaluation was carried out under the supervision and with the participation of our management, including our Principal Financial Officer and Principal Executive Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report on Form 10-Q. Disclosure controls and procedures are procedures designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Form 10-Q, is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and is communicated to our management, including our Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, our management concluded that, as of September 30, 20212022 our disclosure controls and procedures were not effective due to the material weaknesses identified during the audit of our financial statements for the year ended December 31, 2020.2021.

 

Change in Internal Control over Financial Reporting

 

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

 

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter covered by this report that materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

 

7

PART II

 

ITEM 6. EXHIBITS

 

Exhibit No. Description of Exhibit
   
31.1 Rule 13a-14(a) Certifications
31.2 Rule 13a-14(a) Certifications
32 Section 1350 Certifications
101.INSInline XBRL Instance Document
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

78

 

SIGNATURES

 

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

 

 BLUE LINE PROTECTION GROUP, INC.
   
October 28, 2021November 14, 2022By:/s/ Evan DeVoeDaniel Allen
  Evan DeVoe,
Daniel Allen, Principal Executive, Financial and
Accounting Officer

 

89