UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, ~~2021~~2022

☐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 000-54830

SUNSTOCK, INC.

(Exact Name of Registrant as Specified in its Charter)

SANDGATE ACQUISITION CORPORATION

(Former Name of Registrant as Specified in its Charter)

Delaware

46-1856372

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer

Identification No.)

111 Vista Creek Circle

Sacramento, California 95835

(Address of principal executive offices) (zip code)

916-860-9622

(Registrant’s telephone number, including area code)

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
None		None		None

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common ~~Stock~~Stock.		~~SSOK~~SSOK.		None

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

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

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ~~☐ (Do not check if smaller reporting company)~~☒	Smaller reporting company ☒

	Emerging growth company ☐

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

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 the number of shares outstanding of each of the issuer’s classes of stock, as of the latest practicable date.

Class	Outstanding at November ~~22, 2021~~14, 2022
Common Stock, par value $0.0001		4,126,387

Preferred Stock, par value $0.0001		-

Documents incorporated by reference: None

TABLE OF CONTENTS

Part I Financial Information		3

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1817

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2120

Item 4.	Controls and Procedures	2120

Part II Other Information		2422

Item 1.	Legal Proceedings	2422

Item 1A	Risk Factors	2422

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2422

Item 3.	Defaults Upon Senior Securities	2422

Item 4.	Mine Safety Disclosures	2422

Item 5.	Other Information	2422

Item 6.	Exhibits	2523

	Signatures	2624

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Condensed and Consolidated Balance Sheets as of September 30, ~~2021~~2022 (unaudited) and December 31, ~~2020~~2021 (audited)	4

Unaudited Condensed and Consolidated Statements of Operations for the Three and Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021	5

Unaudited Condensed and Consolidated Statements of Convertible Preferred Stock and Changes in Stockholders’ Equity for the Three and Nine Months Ended as of September 30, ~~2021~~2022 and ~~2020~~2021	6

Unaudited Condensed and Consolidated Statements of Cash Flows for the Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021	7

Notes to Unaudited Condensed and Consolidated Financial Statements	8 - 1716

SUNSTOCK, INC.

CONDENSED AND CONSOLIDATED BALANCE SHEETS


	September 30, 2021			December 31, 2020			September 30, 2022			December 31, 2021
		(unaudited)			(audited)			(unaudited)			(audited)
ASSETS
Current assets
Cash	$	37,469		$	47,055		$	33,146		$	30,168
Accounts receivable		-			219
Inventory – coins		526,311			333,088			829,960			669,798
Inventory – precious metals		607,142			682,511			609,093			722,867
Prepaid expenses		4,493			13,456			5,236			5,655

Total current assets		1,175,415			1,076,329			1,477,435			1,428,488

Property and equipment, net		1,497			3,723			479			1,285
Right of use lease asset		29,252			38,480			15,063			25,862

Total assets	$	1,206,164		$	1,118,532		$	1,492,977		$	1,455,635

LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	617,278		$	316,125		$	503,280		$	581,512
Operating lease liability – current portion		14,188			12,617			15,063			14,748
SBA loan – current								3,172			1,845
Loans payable – related parties		71,000			98,500			360,787			153,100

Total current liabilities		702,466			427,242			882,302			751,205

PPP loan		30,250			-			-			30,250
SBA loan. Net of current portion		150,000			150,000			146,828			148,155
Operating lease liability, net of current portion		15,064			25,863
Operating lease liability, non-current								-			11,114

Total liabilities		897,780			603,105			1,029,130			940,724

Commitments and contingencies		-						-			-

Series A convertible preferred stock, $0.0001 par value, 1,100,000,000 shares authorized, 0 and 400,000,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively; aggregate liquidation preference of $0 and $5,200,000 as of September 30, 2021 and December 31, 2020, respectively		-			200,000
Series A convertible preferred stock, $0.0001 par value, 1,100,000,000 shares authorized, 0 and 0 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively -								-			-
Stockholders’ equity
Preferred stock; $0.0001 par value, 400,000,000 shares authorized; 0 and 0 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		-			-
Common stock, $0.0001 par value, 5,000,000,000 shares authorized; 4,126,387 and 2,941,817 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		412			294
Preferred stock; $0.0001 par value, 400,000,000 shares authorized; 0 and 0 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively								-			-
Common stock, $0.0001 par value, 5,000,000,000 shares authorized; 4,126,387 and 4,126,387 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively								412			412
Additional paid – in capital		62,778,644			60,567,724			62,778,644			62,778,644
Receivable from shareholders		-			(45,100	)
Accumulated deficit		(62,470,672	)		(60,207,491	)		(62,315,209	)		(62,264,145	)

Total stockholders’ equity		308,384			315,427			463,847			514,911
Total liabilities, convertible preferred stock, and stockholders’ equity	$	1,206,164		$	1,118,532		$	1,492,977		$	1,455,635

The accompanying notes are an integral part of the unaudited condensed and consolidated financial statements

SUNSTOCK, INC.

CONDENSED AND CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	2021			2020			2021			2020
	For the three months ended September 30,						For the nine months ended September 30,						For the three months ended September 30,						For the nine months ended September 30,
	2021			2020			2021			2020			2022			2021			2022			2021

Revenues	$	4,135,437		$	2,533,963		$	10,198,419		$	7,741,850		$	3,287,179		$	4,135,437		$	9,807,089		$	10,198,419
Cost of revenue		4,069,093			2,485,634			10,061,684			7,591,124			3,256,768			4,069,093			9,633,215			10,061,684
Gross profit		66,344			48,329			136,735			150,726			30,411			66,344			173,874			136,735

Operating expenses
Professional fees		63,196			23,299			214,813			751,728			12,793			63,196			98,806			214,813
Compensation		14,051			3,423			28,404			710,896			182			14,051			738			28,404
Lawsuit judgment		260,308			-			260,308			-			-			260,308			-			260,308
Other operating expenses		9,247			19,730			37,568			87,412			7,979			9,247			26,319			37,568
Total operating expenses		346,802			46,452			541,093			1,549,586			20,954			346,802			125,863			541,093

Loss from operations		(280,458	)		1,877			(404,358	)		(1,398,860	)
Profit (loss) from operations														9,457			(280,458	)		48,011			(404,358	)

Other income (expense)
Unrealized gain (loss) on investments in precious metals		(48,586	)		95,964			(75,370	)		119,874
Unrealized loss on investments in precious metals														(62,779	)		(48,586	)		(113,775	)		(75,370	)
Interest expense		(1,443	)		(1,443	)		(4,335	)		(26,785	)		(1,443	)		(1,443	)		(4,329	)		(4,335	)
Interest expense related party		(472	)		(1,520	)		(2,650	)		(3,345	)		(4,637	)		(472	)		(11,221	)		(2,650	)
Gain on debt extinguishment														-			-			30,250			-
Loss on settlement of related party debt		-			-			(1,775,668	)		(182,032	)		-			-			-			(1,775,668	)
Gain from settlement of convertible notes payable		-			-			-			776,315
Other income		-			-			-			1,000
Changes in fair value of derivative liability		-			-			-			3,240,220
Total other income (expense), net		(50,501	)		93,001			(1,858,023	)		3,925,247			(68,859	)		(50,501	)		(99,075	)		(1,858,023	)

Income (loss) before provision for income taxes		(330,959	)		94,878			(2,262,381	)		2,526,387
Loss before provision for income taxes														(59,402	)		(330,959	)		(51,064	)		(2,262,181	)

Provision for income taxes		-			-			800			800			-			-			-			800

Net income (loss)	$	(330,959	)	$	94,878		$	(2,263,181	)	$	2,525,587
Net loss													$	(59,402	)	$	(330,959	)	$	(51,064	)	$	(2,263,181	)

Income (loss) per share - basic	$	(0.08	)	$	0.04		$	(0.59	)	$	1.14
Loss per share – basic and diluted													$	(0.01	)	$	(0.08	)	$	(0.01	)	$	(0.59	)

Income (loss) per share - diluted	$	(0.08	)	$	0.03		$	(0.59	)	$	0.80

Weighted average number of common shares outstanding - basic		4,126,387			2,616,960			3,813,568			2,217,073

Weighted average number of common shares outstanding – diluted		4,126,387			3,429,678			3,813,568			3,156,671
Weighted average number of common shares outstanding – basic and diluted														4,126,387			4,126,387			4,126,387			3,813,568

The accompanying notes are an integral part of the unaudited condensed and consolidated financial statements

SUNSTOCK, INC.

~~CONDENSED AND~~ CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND CHANGES IN STOCKHOLDERS’ ~~EQUITY (DEFICIT)~~

Shares Amount Shares Amount Capital Receivable Deficit Total
Convertible Preferred Stock Common Stock
Additional
Paid-In
Shareholders Accumulated
Shares Amount Shares Amount Capital Receivable Deficit Total
Balance at December 31. 2019 - $ - 1,292,136 $ 129 $ 58,721,451 $ (25,100 ) $ (62,885,335 ) $ (4,188,855 )
Issuance of common stock for cash and receivables - - 206,000 21 40,079 (25,100 ) - 15,000
Estimated difference in fair value of common stock issued for cash - - - - 421,200 - - 421,200
Issuance of common stock for services - - 314,000 31 345,369 - - 345,400
Issuance of common stock for services related party - - 80,000 8 207,992 - - 208,000
Issuance of common stock for convertible notes - - 24,590 2 14,998 - - 15,000
Issuance of common stock for related party notes payable - - 229,738 23 232,183 - - 232,206
Estimated difference in fair value of common stock issued for related party note payable - - - - 182,032 - - 182,032
Issuance of comm stock for exercise of warrants (noncash transaction) - - 98,214 10 (10 ) - - -
Beneficial conversion feature of convertible note payable - - - - 25,000 - - 25,000
Issuance of common stock for cash
Issuance of common stock for cash,shares
Issuance of common stock for conversion of preferred stock
Issuance of common stock for conversion of preferred stock,shares
Payment of shareholders receivable
Issuance of common stock for related party notes payable and accrued interest
Issuance of common stock for related party notes payable and accrued interest,shares
Issuance of common stock for conversion of preferred stock
Issuance of common stock for conversion of preferred stock,shares
Receipts on receivables from shareholders
Net income - - - - - - 2,793,206 2,793,206
Balance at March 31, 2020 (unaudited) - $ - 2,244,678 $ 224 $ 60,190,294 $ (50,200 ) $ (60,092,129 ) $ 48,189
Issuance of common stock for cash - - 75,000 8 7,492 - - 7,500
Net loss - - - - - - (362,497 ) (362,497 )
Balance at June 30, 2020 (unaudited) - $ - 2,319,678 $ 232 $ 60,197,786 $ (50,200 ) $ (60,454,626 ) $ (306,808 )
Issuance of common stock for conversion of preferred stock - - 395,000 39 234,961 - - 235,000
Payment of shareholders receivable - - - - - 5,100 - 5,100
Net income - - - - - - 94,878 94,878
Balance at September 30, 2020 (unaudited) - $ - 2,714,678 $ 271 $ 60,432,747 $ (45,100 ) $ (60,359,748 ) $ 28,170

Balance at December 31, 2020 400,000 20,000 2,941,817 $ 294 $ 60,567,724 $ (45,100 ) $ (60,207,491 ) $ 315,427
Issuance of common stock for related party notes payable and accrued interest - - 640,670 64 1,537,544 - - 1,537,608
Issuance of common stock for conversion of preferred stock (400,000 ) (20,000 ) 400,000 40 199,960 - - 200,000
Net loss - - - - - - (1,465,000 ) (1,465,000 )
Balance at March 31, 2021 (unaudited) - $ - 3,982,487 $ 398 $ 62,305,228 $ (45,100 ) $ (61,672,491 ) $ 588,035
Issuance of common stock for related party notes payable and accrued interest - - 143,900 14 473,416 - - 473,430
Receipts on receivables from shareholders - - - - - 37,600 - 37,600
Net loss - - - - - - (467,222 ) (467,222 )
Balance at June 30, 2021 (unaudited) - $ - 4,126,387 $ 412 $ 62,778,644 $ (7,500 ) $ (62,139,713 ) $ 631,843
Receipts on receivables from shareholders 7,500 7,500
Net loss (330,959 ) (330,959 )
Net income (loss) - - - - - - (330,959 ) (330,959 )
Balance at September 30, 2021 (unaudited) 0 $ - 4,126,387 $ 412 $ 62,778,644 $ - $ (62,470,672 ) $ 308,384
EQUITY

Convertible Preferred Stock Common Stock Additional Paid-In Shareholders Accumulated
Shares Amount Shares Amount Capital Receivable Deficit Total
Balance at December 31. 2020 (audited) 400,000 $ 200,000 2,941,817 $ 294 $ 60,567,724 $ (45,100 ) $ (60,207,491 ) $ 515,427
Issuance of common stock for related party notes payable and accrued interest - - 640,670 64 1,537,544 - - 1,537,608
Issuance of preferred stock for convertible preferred stock payable (400,000 ) (200,000 ) 400,000 40 199,960 - - -
Net loss - - - - - - (1,465,000 ) (1,465,000 )
Balance at March 31, 2021 (unaudited) - $ - 3,982,487 $ 398 $ 62,305,228 $ (45,100 ) $ (61,672,491 ) $ 588,035
Issuance of common stock for related party notes payable and accrued interest - - 143,900 14 473,416 - - 473,430
Receipts on receivables from shareholders - - - - - 37,600 - 37,600
Net loss - - - - - - (467,222 ) (467,222 )
Balance at June 30, 2021 (unaudited) - $ - 4,126,387 $ 412 $ 62,778,644 $ (7,500 ) $ (62,139,713 ) $ 631,843
Receipts on receivables from shareholders - - - - - 7,500 - 7,500
Net loss - - - - - - (330,959 ) (330,959 )
Balance at September 30, 2021 (unaudited) - $ - 4,126,387 $ 412 $ 62,778,644 $ - $ (62,470,672 ) $ 308,384

Balance at December 31, 2021 (audited) - $ - 4,126,387 $ 412 $ 62,778,644 $ - $ (62,264,145 ) $ 514,911
Net income - - - - - - 102,893 102,893
Balance at March 31, 2022 (unaudited) - $ - 4,126,387 $ 412 $ 62,778,644 $ - $ (62,161,252 ) $ 617,804
Net loss - - - - - - (94,555 ) (94,555 )
Balance at June 30, 2022 (unaudited) - $ - 4,126,387 $ 412 $ 62,778,644 $ - $ (62,255,807 ) $ 523,249
Net loss - - - - - - (59,402 ) (59,402 )
Net income (loss) - - - - - - (59,402) (59,402)
Balance at September 30, 2022 (unaudited) - $ - 4,126,387 $ 412 $ 62,778,644 $ - $ (62,315,209 ) $ 463,847
The accompanying notes are an integral part of the unaudited condensed and consolidated financial statements
6

SUNSTOCK, INC.
CONDENSED AND CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

2021 2020
For the nine months ended September 30, For the nine months ended September 30,
2021 2020 2022 2021
OPERATING ACTIVITIES
Net income (loss) $ (2,263,181 ) $ 2,525,587
Net loss $ (51,064 ) $ (2,263,181 )
Adjustments to reconcile net income (loss) to net cash used in operating activities
Change in fair value of derivative liability - (3,240,220 )
Unrealized (gain) loss on investment in precious metals 75,370 (119,874 )
Unrealized loss on investment in precious metals 113,775 75,370
Depreciation 2,226 4,912 806 2,226
Common stock issued for services including amortization of prepaid consulting - 553,400
Excess of fair value of common stock issued for cash - 421,200
Gain on extinguishment of debt (30,250 ) -
Loss on settlement of related party debt 1,775,668 182,032 - 1,775,668
Amortization of beneficial conversion feature - 25,000
Gain on settlement of convertible notes payable - (766,315 )
Changes in operating assets and liabilities
Accounts receivable 219 26,061 - 219
Inventories – coins (193,223 ) (158,700 ) (160,162 ) (193,223 )
Prepaid expenses 8,963 107,599 419 8,963
Accounts payable and accrued expenses 306,022 89,758 (78,233 ) 306,022
Net cash used in operating activities (287,936 ) (359,560 ) (204,709 ) (287,936 )
INVESTING ACTIVITIES
Net cash used in investing activities - - - -

FINANCING ACTIVITIES
Proceeds from issuance of common stock - 22,500
Proceeds from convertible notes payable - 25,000
Payments on convertible notes payable - (564,738 )
Stock payable - 400,000
Proceeds from receivables from shareholders 45,100 -
Proceeds from SBA loan - 150,000
Proceeds from PPP loans 30,250 - - 30,250
Proceeds from loan – related parties 203,000 303,838 207,687 203,000
Payments on loan - related parties - (110,000 )
Proceeds from receivable from shareholders - 45,100
Net cash provided by financing activities 278,350 226,600 207,687 278,350

Net change in cash (9,586 ) (132,960 ) 2,978 (9,586 )
Cash and restricted cash, beginning of period 47,055 153,635
Cash, beginning of period 30,168 47,055
Cash, end of period $ 37,469 $ 20,675 $ 33,146 $ 37,469

SUPPLEMENTAL DISCLOSURE OF CASH FLOW ACTIVITIES:
Interest $ - $ 150,335 $ - $ -
Income taxes $ - $ - $ - $ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Common stock issued for services $ - $ 553,400
Common stock issued in exchange for convertible notes $ - $ 15,000
Common stock issued in exchange for related party debt $ 2,011,038 $ - $ - $ 2,011,038
Common stock issued for conversion of preferred stock $ 200,000 $ - $ - $ 200,000

The accompanying notes are an integral part of the unaudited condensed and consolidated financial statements
7

SUNSTOCK, INC.
NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

Sunstock, Inc. (“Sunstock” or “the Company”) was incorporated on July 23, 2012, as Sandgate Acquisition Corporation, under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. In July 2013, the Company implemented a change of control by issuing shares to new shareholders, redeeming shares of existing shareholders, electing new officers and directors and accepting the resignations of its then existing officers and directors. In connection with the change of control, the shareholders of the Company and its board of directors unanimously approved the change of the Company’s name from Sandgate Acquisition Corporation to Sunstock, Inc. On July 18, 2013, Jason Chang and Dr. Ramnik S Clair were named as directors of the Company.

On October 22, 2018, Sunstock, Inc. acquired all assets and liabilities of Mom’s Silver Shop, Inc. (the “Retail Store”) located in Sacramento, California.

The Company’s business plan includes the buying, selling and distribution of precious metals, primarily gold. The Company pursues a “ground to coin” strategy, whereby it seeks to acquire mining assets as well as rights to purchase mining production and to sell these metals primarily through retail channels including their own branded coins. The Company emphasizes investment in enduring assets that we believe may provide ‘resource to retail’ conversion upside. Our goal is to provide our shareholders with an exceptional opportunity to capture value in the precious metals sector without incurring many of the costs and risks associated with actual mining operations.

BASIS OF PRESENTATION

The accompanying unaudited condensed and consolidated financial statements of Sunstock, Inc. were prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all disclosures required for financial statements prepared in conformity with U.S. GAAP.

The accompanying condensed and consolidated balance sheet at December 31, ~~2020,~~2021, has been derived from audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying unaudited condensed and consolidated financial statements as of September 30, ~~2021~~2022 and for the three and nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements, and should be read in conjunction with the audited consolidated financial statements and related notes to the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 as filed with the U.S. Securities and Exchange Commission (SEC). In the opinion of management, all material adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been made to the unaudited condensed and consolidated financial statements. The unaudited condensed and consolidated financial statements include all material adjustments (consisting of all normal accruals) necessary to make the condensed and consolidated financial statements not misleading as required by Regulation S-X Rule 10-01. Operating results for the nine months ended September 30, ~~2021~~2022 are not ~~necessary~~necessarily indicative of the results that may be expected for the year ended December 31, ~~2021~~2022 or any future periods.

8

USE OF ESTIMATES

The preparation of the unaudited condensed and consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made by the Company’s management include realizability and valuation of inventories and value of stock-based transactions.
CONCENTRATION OF RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places its cash with high quality banking institutions. The Company did 0tnot have cash balances in excess of the Federal Deposit Insurance Corporation limit as of September 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.
INVENTORIES

INVENTORY - COINS
The Company acquires collectible coins from both companies and individuals and then marks them up for resale. The inventory is recorded at lower of cost or market or net realizable value. Inventory can fluctuate in relation to when it is purchased and when it is sold. Collectible coins inventory was $~~526,311~~829,960 at September 30, ~~2021~~2022 compared to $~~333,088~~669,798 at December 31, ~~2020.~~2021.

At each balance sheet date, the Company evaluates its ending inventory quantities on hand and on order and records a provision for excess quantities and obsolescence. Among other factors, the Company considers historical demand and forecasted demand in relation to the inventory on hand, competitiveness of product offerings, market conditions and product life cycles when determining obsolescence and net realizable value. In addition, the Company considers changes in the market value of components in determining the net realizable value of its inventory. Provisions are made to reduce excess or obsolete inventories to their estimated net realizable values. Once established, write-downs are considered permanent adjustments to the cost basis of the excess or obsolete inventories.

INVENTORY – PRECIOUS METALS
Inventories of precious metals and coins held for investment at September 30, ~~2021~~2022 include $~~607,142~~609,093 of gold and silver bullion and bullion coins and $~~682,511~~722,867 at December 31, ~~2020~~2021 and are acquired and initially recorded at fair market value. The fair market value of the bullion and bullion coins is comprised of two components: 1) published market values attributable to the costs of the raw precious metal, and 2) a published premium paid at acquisition of the metal. The premium is attributable to the additional value of the product in its finished goods form and the market value attributable solely to the premium may be readily determined, as it is published by multiple reputable sources such as Kitco and Apmex. The Company’s inventory is subsequently recorded at fair market values on a quarterly basis. The fair value of the inventory is determined using pricing and data derived from the markets on which the underlying commodities are traded. Precious metals commodities inventories are classified in Level 1 of the valuation hierarchy as defined later in this section. The Company has continuously experienced a shortage of cash and has had significantly past due obligations. While the Company’s preference is to hold the silver and gold bullion to achieve long-term gains, the bullion is available to pay current obligations should the Company not be able to raise cash through issuance of stock or notes payable. Thus, the Company believes that including the gold and silver bullion in current assets under inventory is appropriate.

The change in fair value of the precious metals was included in the financial statements herein as recorded on the Company’s Statements of Operations as an unrealized loss in precious metal of $62,779 for the three months ended September 30, 2022, an unrealized loss in precious metals of $48,586 for the three months ended September 30, 2021, an unrealized ~~gain~~loss of $~~95,964~~113,775 for the ~~three~~nine months ended September 30, ~~2020,~~2022, and an unrealized loss of $75,370 for the nine months ended September 30, ~~2021 and an unrealized gain of $119,874~~ ~~for the nine months ended September 30, 2020.~~2021.

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PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of 3 to 5years. Any leasehold improvements are amortized at the lesser of the useful life of the asset or the lease term.
LONG-LIVED ASSETS
~~LONG-LIVED ASSETS~~
The Company reviews the carrying values of its long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the expected future cash flow from the use of the asset and its eventual disposition is less than the carrying amount of the asset, an impairment loss is recognized and measured using the fair value of the related asset. ~~NaN~~No impairment charges were incurred during the nine months ended September 30, ~~2021~~2022 and ~~2020.~~2021. There can be no assurance, however, that market conditions will not change or demand for the Company’s services will continue, which could result in impairment of long-lived assets in the future.
REVENUE RECOGNITION
~~REVENUE RECOGNITION~~
The Company’s principal activities from which it generates revenue are product sales. Revenue is measured based on considerations specified in a contract with a customer. A contract exists when it becomes a legally enforceable agreement with a customer. These contracts define each party’s rights, payment terms and other contractual terms and conditions of the sale. Consideration is typically paid at time of sale via credit card, check, or cash when products are sold direct to consumers.

A performance obligation is a promise in a contract to transfer a distinct product to the customer, which for the Company is transfer of a product to customers. Performance obligations promised in a contract are identified based on the goods that will be transferred to the customer that are both capable of being distinct and are distinct in the context of the contract, whereby the transfer of the goods is separately identifiable from other promises in the contract. The Company has concluded the sale of product and related shipping and handling are accounted for as the single performance obligation.

The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. The transaction price is determined based on the consideration to which the Company will be entitled to receive in exchange for transferring goods to the customer. We do not issue refunds.
The Company recognizes revenue when it satisfies a performance obligation in a contract by transferring control over a product to a customer when product is shipped based on fulfillment by the Company or when a point of sale transaction is completed. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of product sales. The Company does not accept returns.

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INCOME TAXES

The Company accounts for income taxes and the related accounts under the liability method. Deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the income tax bases of assets and liabilities. A valuation allowance is applied against any net deferred tax asset if, based on available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Therefore, the Company has recorded a full valuation allowance against the net deferred tax assets. The Company’s income tax provision consists of state minimum taxes.

The Company recognizes any uncertain income tax positions on income tax returns at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.

There are no unrecognized tax benefits included in the balance sheet that would, if recognized, affect the effective tax rate.

The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had $0 accrued for interest and penalties on each of the Company’s balance sheets at September 30, ~~2021~~2022 and December 31, ~~2020.~~2021.
INCOME (LOSS) PER COMMON SHARE

Basic income (loss) per share ~~represent~~represents income (loss) available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted income (loss) per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income (loss) that would result from the assumed issuance. The Company had no potential common shares ~~that may be issued by the Company relate to outstanding stock warrants and have been excluded from the computation~~as of ~~diluted income (loss) per share for the three and nine months ended~~ September 30, ~~2021.~~
~~For the three and nine months ended September 30, 2020 there were each~~ ~~110,000~~ ~~potentially dilutive shares that were included in the diluted income (loss) per share.~~2022.

Effective July 21, 2021, the Company effected a 1,000 for 1reverse split of its common shares (see Note 9). The weighted number of shares outstanding as of the three and nine months ended September 30, ~~2020~~2021 on the statements of operations have been adjusted to reflect the reverse split.
FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company measures the fair value of certain of its financial assets on a recurring basis. A fair value hierarchy is used to rank the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, such as derivative liabilities in relation to the conversion feature of notes payable.

At September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company’s financial instruments include cash, ~~accounts receivable,~~ precious metals inventory, coins inventory, PPP loan, SBA loan, and accounts payable and accrued expenses. The carrying amount of cash, ~~accounts receivable,~~ precious metals inventory, coins inventory, PPP loan, SBA loan, and accounts payable and accrued expenses approximates fair value due to the short-term maturities of these instruments.

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PRINCIPLES OF CONSOLIDATION
We consolidate entities that we control due to ownership of a majority voting interest. All intercompany balances and transactions have been eliminated in consolidation.
NOTE 2 - GOING CONCERN

The Company has not posted annual operating income since inception. It has an accumulated deficit of $~~62,470,672~~62,315,209 as of September 30, ~~2021.~~2022. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and /or obtain additional financing from its stockholders and/or other third parties. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern.

These unaudited condensed and consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue is dependent upon financial support from its stockholders, the ability of the Company to obtain necessary equity financing to continue operations, successfully locating and negotiate with a business entity for the combination of that target company with the Company.

There is no assurance that the Company will ever be profitable. The unaudited condensed and consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

In the first quarter of 2020, outstanding convertible notes payable balances as of December 31, 2019, were either converted to common stock or paid off. In relation to that, the Company had discussions with a third party in regards to raising funds through a private placement of equity. Those discussions with that third party have since been terminated. The Company intends to initiate discussions with an undetermined third party in regards to raising funds through a private placement of equity which, if it occurs, will provide the Company with funds to expand its operations and likely eliminate the going concern issue.

NOTE 3 – PROPERTY AND EQUIPMENT
SCHEDULE OF PROPERTY AND EQUIPMENT
September 30, 2022 December 31, 2021
Furniture and equipment $ 58,460 $ 58,460
Less – accumulated depreciation (57,981 ) (57,175 )
Total $ 479 $ 1,285

September 30, 2021 December 31, 2020
Furniture and equipment $ 58,460 $ 58,460
Less – accumulated depreciation (56,963 ) (54,737 )
Property and equipment, net $ 1,497 $ 3,723
Depreciation expense for the three months ended September 30, ~~2021~~2022 and ~~2020~~2021 was $~~733~~211 and $~~813~~733, respectively, and for the nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 was $~~2,226~~805 and $~~4,912~~2,226, respectively.
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NOTE 4 –ACCOUNTS PAYABLE AND ACCRUED EXPENSES
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES
September 30, 2021 December 31, 2020
Accounts payable $ 1,866 $ -
Accrued court decision 260,308 -
Accrued consultant fees 138,774 140,967
Accrued audit fees 59,483 71,575
Accrued payroll 52,006 30,000
Accrued dividends – preferred stock 36,326 32,381
Accrued legal fees 26,689 -
Expenses owed consultant 22,668 22,669
Accrued interest payable 7,221 2,886
Accrued interest payable related party 632 2,853
Other accrued expenses 11,305 12,794
Accounts payable and accrued expenses $ 617,278 $ 316,125
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September 30, 2022 December 31, 2021
Accrued court decision $ 260,308 $ 260,308
Accrued consultant fees 133,000 135,336
Accrued audit fees 10,580 44,548
Accrued payroll 30,000 52,006
Accrued dividends – preferred stock 36,326 36,326
Expenses owed consultant - 22,669
Accrued interest payable 12,993 8,664
Accrued interest payable related party 13,292 2,071
Other accrued expenses 6,781 19,584
Total $ 503,280 $ 581,512

NOTE 5 - RELATED PARTY ACTIVITY

During the nine months ended September 30, ~~2021,~~2022, the Company was provided loans totaling $~~203,000~~ 207,687by the Company’s chief executive officer. The loans bear interest at 6% per annum. There was $~~632~~13,292 in accrued interest at September 30, ~~2021.~~2022.
As of September 30, 2022, the Company has $36,326 in accrued dividends on preferred stock, of which $19,141 is due to the Company’s chief executive officer.
During the nine months ended September 30, 2021, the Company was provided loans totaling $203,000 by the Company’s chief executive officer. The loans bear interest at 6% per annum.

During the nine months ended September 30, 2021, $230,500 in notes payable and $4,870accrued interest to the Company’s chief executive officer were converted to 784,570 shares of the Company’s common stock valued at $2,011,038based on the closing price on the grant date. $1,775,668was recorded as loss on settlement of related party debt on the accompanying statement of operations as of September 30, 2021.

During the nine months ended September 30, 2021, the Company issued to the chief executive officer 400,000 shares of the Company’s common stock in exchange for 400,000 shares of the Company’s Series A convertible Preferred Stock.

~~As of September 30, 2021, the Company has $36,326~~ ~~in accrued dividends on preferred stock, of which $19,141~~ ~~are due to the Company’s chief executive officer.~~
~~During the nine months ended September 30, 2020, the Company’s chief executive officer purchased~~ ~~400,000~~ ~~shares of Series A Preferred Stock for $200,000. The funds were used as part of the payments of convertible notes payable in January 2020. This was classified as stock payable on the September 30, 2020 balance sheet.~~
~~During the nine months ended September 30, 2020, the Company’s chief executive officer was granted~~ ~~80,000~~ ~~shares of the Company’s common stock for services for the period January 1, 2020 through June 30, 2020. The shares were valued at $208,000~~ ~~based on the closing price on the grant date. $208,000~~ ~~was recorded as employee compensation expense in the nine months ended September 30, 2021.~~
~~During the nine months ended September 30, 2020, Ramnik Clair, the Company’s senior VP and a director, purchased~~ ~~36,000~~ ~~shares of the Company’s common stock valued at $424,800~~ ~~based on the closing price on the grant date. $421,200~~ ~~was recorded as employee compensation expense and $3,600~~ ~~was recorded as other receivables.~~
~~During the nine months ended September 30, 2020, the Company was provided loans totaling $193,838~~ ~~by the Company’s chief executive officer. The loans bear interest at~~ 6~~% per annum. During the nine months ended September 30, 2020, $232,206~~ ~~in notes payable and accrued interest to the Company’s chief executive officer were converted to~~ ~~229,738~~ ~~shares of the Company’s common stock valued at $414,238~~ ~~based on the closing price on the grant dates. $182,032~~ ~~was recorded as loss on settlement of related party debt.~~
The following table is a summary of the activity for Loans payable- related parties principal for the nine months ended September 30, ~~2021:~~2022:
~~SCHEDULE~~SUMMARY OF THE ACTIVITY FOR LOANS ~~PAYABLE -~~PAYABLE- RELATED PARTIES
Balance at 12/31/2020 $ 98,500
Loan advances 203,000
Loan principal converted to common stock (230,500 )
Balance at 09/30/2021 $ 71,000
Balance at 12/31/2021 $ 153,100
Loan advances 207,687
Balance at 09/30/22 $ 360,787
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NOTE 6 – COMMITMENTS AND CONTINGENCIES

The Company leases space for the Retail Store. The lease is for five years ~~years~~ and runs through September 2023. The lease calls for payments of $1,305.60 per month for the first year, with a 3% increase per year for years two through five.

As of September 30, ~~2021,~~2022, the future payments of our operating lease were as follows for the periods ended December 31:
SCHEDULE OF FUTURE PAYMENTS OF OPERATING LEASE PAYMENTS
Remaining Lease Payments Remaining Lease Payments
2021 $ 4,278
2022 17,240 $ 4,406
2023 13,221 13,221
Total remaining lease payments 34,739 17,627
Less: imputed interest (5,487 ) (2,564 )
Total operating lease liabilities 29,252 15,063
Less: current portion (14,188 ) (15,063 )
Long term operating lease liabilities $ 15,064 $ -

Weighted average remaining lease term 24 months 12 months
Weighted average discount rate 12 % 12 %

LITIGATION

On August 21, 2020, Boustead Securities, LLC (“Boustead”) filed suit against Sunstock, Inc. (“Sunstock”) in the County of Orange, California. Boustead is an investment banking firm engaged by Sunstock on September 19, 2019 to raise equity. Boustead maintained that Sunstock owed it ~~87,179,487~~ 87,179shares of Preferred Stock Warrants and ~~9,230,769~~ 9,231shares of Common Stock Warrants. Boustead also sought general damages, interest, and costs of the suit. Sunstock believed that Boustead had not fulfilled its obligations in raising equity and vigorously contested the suit. Sunstock hired an arbitrator but there was no resolution between Sunstock and Boustead. The matter went to trial in September 2021 and on November 2, 2021 the Court determined that Sunstock owed Boustead $260,308for warrants issued that Sunstock did not honor. $260,308was accrued and is shown ~~in operating~~as part of accounts payable and accrued expenses in the ~~unaudited condensed and consolidated statement of operations.~~balance sheet. See detail in Note 4 above. The warrants are no longer outstanding (see Note 9). All other monetary claims by Boustead were dismissed by the Court. The $260,308is to be paid in cash. The Company filed an appeal of the judgment on December 9, 2021. There has been no change as of the date of this report.

In December 2020, a former employee of Sunstock filed a claim with the California Labor Commission regarding claimed back pay owed. A preliminary hearing was held on January 4, 2021 and the Company is currently awaiting the next step.

INDEMNITIES AND GUARANTEES

The Company has made certain indemnities and guarantees, under which it may be required to make payments to a guaranteed or indemnified party, in relation to certain actions or transactions. The Company indemnifies its directors, officers, employees and agents, as permitted under the laws of the State of Delaware. In connection with its facility leases, the Company has agreed to indemnify its lessors for certain claims arising from the use of the facilities. The duration of the guarantees and indemnities varies, and is generally tied to the life of the agreement. These guarantees and indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated nor incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities and guarantees in the accompanying balance sheets.
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CONTINGENCIES
The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. Management is actively monitoring the global situation on its financial condition, liquidity operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition or liquidity for the fiscal year 2022. However, to date there has not been a decrease in sales. The Company believes that in this time of uncertainty, individuals are buying collectible coins as a safe haven. The Company is unable to predict if such buying will continue during this time of uncertainty or if the buying will decrease as events change and evolve.

NOTE 7 – SBA LOAN

In June 2020, the Company received a $150,000loan (less $100 expense) from the Small Business Administration (“SBA”). The loan is for thirty years ~~years,~~, interest is 3.75% per annum, and payments of $731 are monthly beginning ~~twelve~~twenty-four months after closing. ~~The SBA extended first payments from twelve months after closing to twenty-four months after closing due to the Covid-19 pandemic.~~
SCHEDULE OF FUTURE PAYMENTS OF DEBT
Remaining Loan Payments
2022 $ 5,215
2023 8,940
2024 8,940
2025 8,940
2026 8,940
thereafter 209,345
Total remaining loan payments 250,320
Less: imputed interest (100,320 )
Total loan liability 150,000
Less: current portion (3,172 )
Long term loan liability $ 146,828

Weighted average remaining lease term 27.7 years
NOTE 8 – PPP LOAN

In February and May 2021, the Company received a $15,125loan and a $15,125loan from the federal Paycheck Protection Program (“PPP”), respectively. The loans are for five years~~years,~~, interest is 1.0% per annum, and no payments are due until maturity. The ~~Company may apply for forgiveness of the loan in the future and no more than 40% of the loan may be used for non-payroll costs.~~loans have been forgiven.
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NOTE 9- ~~STOCKHOLDER’S~~STOCKHOLDERS’ EQUITY

COMMON STOCK

The Company is authorized to issue 5,000,000,000 shares of common stock and 1,500,000,000 of preferred stock.

Effective July 21, 2021, the Company effected a 1,000 for 1reverse split of its common shares. The number of shares listed under common stock, and the dollar amounts for common stock and additional paid-in capital for December 31, 2020 on the balance sheet have been adjusted to reflect the reverse split. The weighted number of shares outstanding as of the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 on the unaudited condensed and consolidated statements of operations have been adjusted to reflect the reverse split. The number of common shares and the dollar amounts of common shares and additional paid-in capital for all periods on the unaudited condensed and consolidated statements of stockholders’ equity (deficit) for all periods have been adjusted to reflect the reverse split.

During the nine months ended September 30, 2022, the Company issued no shares of its common stock.
During the nine months ended September 30, 2021, the Company issued 784,570 shares of its common stock to its chief executive officer for the conversion of $230,500 of related party notes payable and $~~4,870~~4,871 accrued interest payable.
PREFERRED STOCK

During the nine months ended September 30, 2021, the Company issued 400,000 shares of its common stock to its chief executive officer for the conversion of 400,000 shares of Series A convertible Preferred Stock.
~~During the nine months ended September 30, 2020, the Company issued~~ ~~395,000~~ ~~shares of its common stock for the conversion of $235,000~~ ~~of stock payable preferred stock. $39,500~~ ~~was recorded to common stock and $195,500~~ ~~was recorded to additional paid-in capital.~~
~~During the nine months ended September 30, 2020, the Company recorded stock receivable in the aggregate of $25,100~~ ~~from the issuance of~~ ~~206,000~~ ~~shares of its common stock. $20,600~~ ~~was recorded to common stock and $19,500~~ ~~to additional paid-in capital. $15,000~~ ~~cash was received.~~
~~During the nine months ended September 30, 2020, the Company issued~~ ~~75,000~~ ~~shares of its common stock for $7,500~~ ~~in cash at a price of $0.0001~~ ~~per share.~~
~~During the nine months ended September 30, 2020, the Company issued~~ ~~314,000~~ ~~shares of its common stock for services with a fair market value of $345,400~~.
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~~COMMON STOCK (CONTINUED)~~
~~During the nine months ended September 30, 2020, the Company issued~~ ~~80,000~~ ~~shares of its common stock to its chief executive officer for services with a fair market value of $208,000. $104,000~~ ~~and $208,000~~ ~~were recorded to employee comp expense for the three and six months ended June 30, 2020, respectively.~~
~~During the nine months ended September 30, 2020, the Company issued~~ ~~24,590~~ ~~shares of its common stock for the conversion of $15,000~~ ~~of convertible note payable.~~
~~During the nine months ended September 30, 2020, the Company issued~~ ~~229,738~~ ~~shares of its common stock for the conversion of $212,080~~ ~~of related party notes payable and $20,126~~ ~~accrued interest payable.~~
~~During the nine months ended September 30, 2020, the Company issued~~ ~~98,214~~ ~~shares of its common stock for the cashless conversion of warrants exercised.~~
~~During the nine months ended September 30, 2020, the Company recorded $25,000~~ ~~in beneficial conversion feature for a convertible note issued in February 2020. $25,000~~ ~~was expensed to interest expense.~~
~~WARRANTS~~
~~The following table is a summary of the activity for warrants for the nine months ended September 30, 2021:~~
~~SCHEDULE OF ACTIVITY FOR WARRANTS~~

preferred stock
warrants

common stock
warrants

Balance at 12/31/20 100,000 10,000

Warrants added - -

Warrants exercised - -

Warrants voided through court decision (Note 6) (100,000 ) (10,000 )

Balance at 09/30/21 - -
~~NOTE 10 –~~ ~~TEMPORARY EQUITY~~
Shares of Series A convertible preferred stock hold conversion features providing that, at the holder’s election, the holder may convert the preferred stock into common stock. Upon conversion, the Company may be required to deliver a variable number of equity shares that is determined by using a formula based on the market price of the Company’s common stock. The right of the preferred shareholder to convert into common shares shall commence as of the date the shares are issued to the shareholder. In the event the preferred shareholder elects to convert, the preferred shareholder shall have 60 days from the date of such notice in which to render his shares of preferred stock to the Company. The conversion rate shall be the greater of (i) one fully paid and nonassessable share of common stock if the market value of the common stock is at or above $1.00 per share, or (ii) if the market value of the common stock is below $1.00, a number of fully paid and nonassessable shares of common stock equal to an amount of No preferred shares multiplied by the conversion ratio of $1.00 divided by the market value, at the discretion of the preferred shareholder. Market value shall mean the closing bid price for the common stock on such previous day’s close of the common stock. The conversion rate and conversion price may be adjusted upon subdivision (by any share split, share dividend, recapitalization, for example), combination (by combination, reverse share split, for example), or any recapitalization, reorganization, reclassification, consolidation, merger, or other similar transaction. There is no contractual cap on the number of common shares that the Company could be required to deliver on preferred shareholders’ conversions to common stock. Accordingly, Series A preferred stock has been classified as temporary equity.
16
~~NOTE 10 – TEMPORARY EQUITY (CONTINUED)~~
~~400,000~~ ~~shares of Series A convertible preferred stock~~ were ~~converted to~~ ~~400,000~~ ~~shares of common stock during the nine months ended September 30, 2021. As of September 30, 2021, there were~~ 0 ~~convertible Series A Preferred Shares outstanding.~~
~~There is,~~outstanding as of September 30, ~~2021, $36,326~~ ~~in accrued dividends on the preferred stock.~~2022.
~~The liquidation preference was $~~0 ~~and $5,200,000~~ ~~as of September 30, 2021 and December 31, 2020, respectively.~~
NOTE 1110 – SUBSEQUENT EVENTS
The Company follows the guidance in FASB ASC Topic 855, Subsequent Events (“ASC 855”), which provides guidance to establish general standards of accounting for and disclosures of events that occur after the balance sheet date but before the consolidated financial statements are issued or are available to be issued. ASC 855 sets forth (i) the period after the balance sheet date during which management of a reporting entity evaluates events or transactions that may occur for potential recognition or disclosure in the unaudited condensed and consolidated financial statements, (ii) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its condensed and consolidated financial statements, and (iii) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date.

The ~~full impact of the COVID-19 outbreak continues to evolve~~Company has no subsequent events as of the date of this report. Management is actively monitoring the global situation on its financial condition, liquidity operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition or liquidity for the fiscal year 2021. However, to date there has not been a decrease in sales. The Company believes that in this time of uncertainty, individuals are buying collectible coins as a safe haven. The Company is unable to predict if such buying will continue during this time of uncertainty or if the buying will decrease as events change and evolve.

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

The following information should be read in conjunction with the unaudited condensed and consolidated financial statements and notes thereto appearing elsewhere in this report. For additional context with which to understand our financial condition and results of operations, see the discussion and analysis included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, filed with the Securities and Exchange Commission (“SEC”) on April ~~15, 2021,~~18, 2022, as well as the unaudited condensed and consolidated financial statements and related notes contained therein.

Forward Looking Statements

Certain statements in this report, including information incorporated by reference, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements reflect current views about future events and financial performance based on certain assumptions. They include opinions, forecasts, intentions, plans, goals, projections, guidance, expectations, beliefs or other statements that are not statements of historical fact. Words such as “may,” “should,” “could,” “would,” “expects,” “plans,” “believes,” “anticipates,” “intends,” “estimates,” “approximates,” “predicts,” or “projects,” or the negative or other variation of such words, and similar expressions may identify a statement as a forward-looking statement. Any statements that refer to projections of our future financial performance, our anticipated growth and trends in our business, our goals, strategies, focus and plans, and other characterizations of future events or circumstances, including statements expressing general optimism about future operating results and the development of our products, are forward-looking statements.

Although forward-looking statements in this Quarterly Report on Form 10-Q reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those discussed elsewhere in this Quarterly Report on Form 10-Q. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We file reports with the SEC. You can read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.

Overview

Sunstock, Inc. (“Sunstock” or “the Company”) was incorporated on July 23, 2012, as Sandgate Acquisition Corporation, under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions.

On July 18, 2013, the Company changed its’ name from Sandgate Acquisition Corporation to Sunstock, Inc. On the same date, Jason Chang and Dr. Ramnik S Clair were named as directors of the Company.

On October 22, 2018, the Company acquired all assets and liabilities of the Retail Store of Sacramento, California. The Retail Store specializes in buying and selling gold, silver, and rare coins, and is one of the leading precious metals retailers in the greater Sacramento metropolitan area.

17
Going Concern

The Company has not posted operating income and has not generated cash from operations since inception. It has an accumulated deficit of ~~$62,470,672~~$62,315,209 as of September 30, ~~2021.~~2022. The Company did not generate cash flow from operations for the nine months ended September 30, ~~2021~~2022 and the year ended December 31, ~~2020.~~2021. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and /or obtain additional financing from its stockholders and/or other third parties.
18

These unaudited condensed and consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial support from its stockholders, the ability of the Company to obtain necessary equity financing to continue operations, successfully locating and negotiate with a business entity for the combination of that target company with the Company.

There is no assurance that the Company will ever be profitable. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

In the first quarter of 2020, outstanding convertible notes payable balances as of December 31, 2019, were either converted to common stock or paid off. In relation to that, the Company had discussions with a third party in regards to raising funds through a private placement of equity. Those discussions with that third party have since been terminated. The Company intends to initiate discussions with an undetermined third party in regards to raising funds through a private placement of equity which, if it occurs, will provide the Company with funds to expand its operations and likely eliminate the going concern issue.

Critical Accounting Policies

There have been no material changes from the critical accounting policies as previously discussed in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Results of Operations

Discussion of the Three Months ended September 30, ~~2021~~2022 and ~~2020~~2021

The Company generated revenues during the three months ended September 30, ~~2021~~2022 of ~~$4,135,437~~$3,287,179 as compared to ~~$2,533,963~~$4,135,437 in revenues posted for the three months ended September 30, ~~2020.~~2021. The ~~increase~~decrease in revenues is due to ~~more aggressive pricing by Sunstock~~lower than expected sales in ~~order to increase revenues and more customers seeking a safe haven in uncertain times.~~September 2022.

For the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, cost of sales were ~~$4,069,093~~$3,256,768 and ~~$2,485,634,~~$4,069,093, respectively, which ~~increase~~decrease was driven by the ~~increase~~decrease in revenues as disclosed above. Professional fees decreased to $12,793 from $63,196 for the three months ended September 30, 2022 and 2021, respectively, primarily due to lower consultant fees, legal fees, and audit fees. Compensation decreased to $182 from $14,051 for the three months ended September 30, 2022 and 2021, respectively. Other operating expenses decreased to $7,979 from $9,247 for the three months ended September 30, 2022 and 2021, respectively.
Interest expense was $1,443 and $1,443 for the three months ended September 30, 2022 and 2021, respectively. Interest expense related party increased to ~~$63,196~~$4,637 for the three months ended September 30, 2022 from ~~$23,299~~$472 for the three months ended September 30, 2021.
Unrealized loss on investments in precious metals was $62,779 for the three months ended September 30, 2022 compared to an unrealized loss of $48,586 for the three months ended September 30, 2021 ~~and 2020, respectively, primarily~~ due to ~~legal fees for~~ the ~~Boustead trial. Compensation increased~~decrease in price of bullion.
18
During the three months ended September 30, 2022, the Company posted a net loss of $59,402 as compared to ~~$14,051 from $3,423~~a net loss of $330,959 for the three months ended September 30, 2021. Such change is primarily related to lower gross profit and less professional fees and compensation expenses in 2022 and a lawsuit judgment in 2021, offset by a greater loss on investment in precious metals in 2022 compared to 2021 and ~~2020,~~higher interest expense in 2022.
Discussion of the Nine Months ended September 30, 2022 and 2021
The Company generated revenues during the nine months ended September 30, 2022 of $9,807,089 as compared to $10,198,419 in revenues posted for the nine months ended September 30, 2021. The decrease in revenues is due to lower than expected sales in September 2002.
For the nine months ended September 30, 2022 and 2021, cost of sales were $9,633,215 and $10,061,684, respectively, which decrease was driven by the decrease in revenues as disclosed above. Professional fees decreased to $98,806 from $214,813 for the nine months ended September 30, 2022 and 2021, respectively, primarily due to lower consultant fees, legal fees, and audit fees. Compensation decreased to $738 from $28,404 for the nine months ended September 30, 2022 and 2021, respectively. Lawsuit judgment ofwas $0 for the nine months ended September 30, 2022 compared to $260,308 for the nine months ended September 30, 2021, which was in regards to the loss in the court decision in the Boustead trial. Other operating expenses decreased to ~~$9,247~~$26,319 from ~~$19,730~~$37,568 for the ~~three~~nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

Interest expense was ~~$1,443~~$4,329 and $4,335 for the ~~three~~nine months ended September 30, 2022 and 2021, ~~and also~~respectively. Interest expense related party increased to $11,221 for the ~~three~~nine months ended September 30, ~~2020. Interest expense related party decreased to $472~~2022 from $2,650 for the ~~three~~nine months ended September 30, ~~2021 from $1,520 for the three months ended September 30, 2020.~~2021.

Unrealized loss on investments in precious metals was ~~$48,586 for the three months ended September 30, 2021 compared to an unrealized gain of $95,964 for the three months ended September 30, 2020 due to the drop in price of bullion.~~
During the three months ended September 30, 2021, the Company posted a net loss of $330,959 as compared to net income of $94,878 for the three months ended September 30, 2020. Such change is primarily related to legal fees, unrealized loss on investment in precious metals, and judgement in the Boustead lawsuit.
19
~~Discussion of the Nine Months ended September 30, 2021 and 2020~~
~~The Company generated revenues during the nine months ended September 30, 2021 of $10,198,419 as compared to $7,741,850 in revenues posted~~$113,775 for the nine months ended September 30, ~~2020. The increase in revenues is due~~2022 compared to ~~more aggressive by Sunstock in order to increase revenues and more customers seeking a safe haven in uncertain times.~~
~~For the nine months ended September 30, 2021 and 2020, cost~~an unrealized loss of ~~sales were $10,061,684 and $7,591,124, respectively, which increase was driven by the increase in revenues as disclosed above. Professional fees decreased to $214,813 from $751,278~~$75,370 for the nine months ended September 30, 2021 ~~and 2020, respectively, of which $445,400 in the nine months ended September 30, 2020 was~~ due to ~~stock for services performed and $61,605~~the decrease in price of bullion.
Loss on settlement of related party debt was ~~for payments to Boustead Securities to raise additional funds. Compensation decreased to $28,404 from $710,896~~$0 for the nine months ended September 30, 2021 and 2020, respectively, of which $629,200 in the nine months ended September 30, 2020 were for shares issued to the chief executive officer and Ramnik Clair, board member, below market price for cash. No such shares were issued in the nine months ended September 30, 2021. Lawsuit judgment of $260,308 was in regards to the loss in the court decision in the Boustead trial. Other operating expenses decreased to $37,568 from $87,412 for the nine months ended September 30, 2021 and 2020, respectively.
Interest expense decreased to $4,335 for the nine months ended September 30, 2021 from $26,785 for the nine months ended September 30, 2020. Interest expense related party decreased to $2,650 for the nine months ended September 30, 2021 from $3,345 for the nine months ended September 30, 2020. Loss on settlement of related party debt increased2022 compared to $1,775,668 for the nine months ended September 30, ~~2021 from $182,032 for the nine months ended September 30, 2020 due to more common shares issued and at a greater discount to market value~~2021.
$30,250 in gain on debt extinguishment in the nine months ended September 30, ~~2021. Gain from settlement decreased to $0 for the nine months ended September 30, 2021 from $776,315 for the nine months ended September 30, 2020 due to settlement of convertible notes payable~~2022 was in the nine months ended September 30, 2020. Change in fair value of derivative liability was $0 for the nine months ended September 30, 2021 compared to a decrease of $3,240,220 for the nine months ended September 30, 2020. All derivative liability was reversed in the nine months ended September 30, 2020 due to all related convertible debt converted to common stock or settled in January 2020.
~~Unrealized loss on investments in precious metals increased to $75,370 for the nine months ended September 30, 2021 from an unrealized gain of $119,874 for the nine months ended September 30, 2020 due~~regards to the ~~drop in price~~forgiveness of ~~bullion. Other income decreased to $0 for the nine months ended September 30, 2021 from $1,000 for the nine months ended September 30, 2020.~~
PPP loans.

During the nine months ended September 30, ~~2021,~~2022, the Company posted a net loss of ~~$2,263,181~~$51,064 as compared to a net ~~income~~loss of ~~$2,525,587~~$2,263,181 for the nine months ended September 30, ~~2020.~~2021. Such change is primarily related to ~~$3,240,220 decrease~~greater gross profit and less operating expenses in ~~the fair value of derivative liabilities in 2020 compared to $0 in 2021,~~2022, a ~~gain from settlement of notes payable of $776,315 in 2020 compared to $0 in 2021,~~ loss on settlement of related party debt ~~of $1,775,668~~ in 2021, ~~compared to $182,032~~and a gain on debt extinguishment in ~~2020, and $260,308 of losses incurred in the court judgment in the Boustead trail in 2021, offset by stock for services of $1,074,600 in 2020 compared to $0 in 2021.~~2022.

Liquidity and Capital Resources

As of September ~~30, 2021,~~30,2022, the Company had ~~$37,469~~$33,146 in cash and ~~$1,133,453~~$1,439,053 in inventory of precious metals and coins compared to ~~$47,055~~$30,168 in cash ~~$219 in accounts receivable,~~ and ~~$1,015,599~~$1,392,665 in inventory of precious metals and coins at December 31, ~~2020.~~2021.

Net cash used in operating activities totaled ~~$287,936~~$204,709 during the nine months ended ~~September 30, 2021~~September30, 2022 as compared to net cash used in operating activities of ~~$359,560~~$287,936 during the nine months ended September 30, ~~2020.~~2021. Consolidated net loss was $51,064 for the nine months ended September 30, 2022 as compared to consolidated net loss of $2,263,181 for the nine months ended September 30, ~~2021 as compared to consolidated net income of $2,525,587 for the nine months ended September 30, 2020.~~2021. Explanation of the difference between these nine months of ~~2021~~2022 and ~~2020~~2021 are explained above in the results of operations of the Company.

Changes in the adjustments to reconcile net ~~income/(net~~income (net loss) for the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively, consist ~~primarily~~ of ~~change in fair value of derivative liability,~~ unrealized gain or loss on investment in precious metals, depreciation, gain on extinguishment of debt, and loss on settlement of related party ~~debt, estimated fair value of common stock issued for cash, and gain on settlements of convertible notes payable.~~debt.

20
~~Change~~Unrealized loss on investment in ~~fair value of derivative liability were $0 and ($3,240,220), respectively,~~precious metals was $113,775 for the nine months ended September 30, ~~2021~~2022 and ~~2020. Unrealized~~unrealized loss on investment in precious metals was $75,370 for the nine months ended September 30, ~~2021 and unrealized gain on investment in precious metals was $119,874 for the nine months ended September 30, 2020.~~2021. Deprecation was ~~$2,226~~$806 and ~~$4,912,~~$2,226, respectively, for the nine months ended September 30, ~~2021~~2022 and ~~2020. Common stock issued for services including amortization~~2021. Gain on extinguishment of ~~prepaid consulting~~debt was $0$30,250 and ~~$553,400,~~$0, respectively, for the nine months ended September 30, ~~2021~~2022 and ~~2020. Excess~~2021. Loss on settlement of ~~fair value of common stock issued for cash~~related party debt was $0 and ~~$421,200,~~$1,775,668, respectively, for the nine months ended September 30, ~~2021~~2022 and 2020. Excess of fair value of common stock issued to related party upon conversion of note payable was $1,775,668 and $182,032, respectively, for the nine months ended September 30, 2021 and 2020. Amortization of beneficial conversion feature was $0 and $25,000, respectively, for the nine months ended September 30, 2021 and 2020. Gain on settlement of convertible notes payable was $0 and $776,315, respectively, for the nine months ended September 30, 2021 and 2020.2021.
19

Changes in assets and liabilities for ~~accounts receivable,~~ inventories, prepaid expenses, and accounts payable and accrued expenses totaled a decrease of $237,976 for the nine months ended September 30, 2022 and an increase of $121,981 for the nine months ended September 30, ~~2021 and an increase of $64,718 for the nine months ended September 30, 2020.~~2021.

No cash was used in investing activities for the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

Net cash provided by financing activities was $207,687 for the nine months ended September 30, 2022 and net cash provided by financing activities was $278,350 for the nine months ended September 30, ~~2021~~2021. $207,687 and net cash provided by financing activities was $226,600 for the nine months ended September 30, 2020. Proceeds of $0 and $25,000 were received from the issuance of convertible notes payable for the nine months ended September 30, 2021 and 2020, respectively. Payments on convertible notes payable were $0 and $564,738, respectively, for the nine months ended September 30, 2021 and 2020. Proceeds of $0 and $400,000 were received from stock payable, respectively, for the nine months ended September 30, 2021 and 2020. Proceeds of $0 and $22,500 were received from the issuance of common stock, respectively, for the nine months ended September 30, 2021 and 2020. $203,000, ~~and $303,838,~~ respectively were received from notes payable related party for the nine months ended September 30, ~~2021~~2022 and ~~2020. Payments on notes payable related party were~~2021. Proceeds of $0 and ~~$110,000, respectively, for the nine months ended September 30, 2021 and 2020. Proceeds of~~ $30,250, ~~and $0,~~ respectively, were received from a PPP loan for the nine months ended September 30, ~~2021~~2022 and ~~2020. Proceeds of~~2021. $0 and ~~$150,000,~~$45,100, respectively, were received from ~~an SBA loan~~receivables from shareholders for the nine months ended September 30, ~~2021~~2022 and ~~2020. Proceeds of $45,100 and $0, respectively, were received from shareholders for receivables for the nine months ended September 30, 2021 and 2020.~~2021.

Off-Balance Sheet Arrangements

The Company has not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that would be considered material to investors.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information not required to be filed by Smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. Management must evaluate its internal controls over financial reporting, as required by Sarbanes-Oxley Act, Section 404 (a). The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles or GAAP.

As of September 30, ~~2021,~~2022, management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in the 2013 Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of the Company’s internal controls over financial reporting that adversely affected its internal controls and that may be considered to be material weaknesses.

21
Material Weaknesses:

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.
20
ITEM 4. CONTROLS AND PROCEDURES (CONTINUED)
The material weaknesses identified are:

1. the Company does not have accounting personnel that have adequate technical accounting skills to identify terms in agreements that would have material accounting implications on the Company’s consolidated financial statements in accordance with US GAAP, such as permanent vs. temporary equity treatment of the Company’s preferred stock in accordance with ASC 480.

2.the Company does not obtain and retain supporting documentation over the precious metal trade dates and quantities traded and does not properly record the realized gain/loss on the trade according to the fair market value of the items traded on a given date.

3.the Company has an inadequate number of personnel that could accurately and timely record and report the Company’s consolidated financial statements in accordance with US GAAP.

4. the Company does not perform formal risk assessments over financial reporting and does not evaluate its internal control processes.

Notwithstanding the existence of these material weaknesses in internal control over financial reporting, we believe that the financial statements in this ~~Annual Report~~Quarterly on Form ~~10-K~~10-Q fairly present, in all material respects, our financial condition in conformity with U.S. generally accepted accounting principles (GAAP). Further, we do not believe the material weaknesses identified had an impact on prior financial statements.

22
~~ITEM 4. CONTROLS AND PROCEDURES (CONTINUED)~~
Material Weaknesses:
.
Remediation:

As part of our ongoing remedial efforts, we have and will continue to, among other things:

1. Expand our accounting policy and controls organization by hiring qualified accounting and finance personnel;

2. Increase our efforts to educate both our existing and expanded accounting policy and control organization on the application of the internal control structure;

3. Emphasize with management the importance of our internal control structure;

4. Seek outside consulting services where our existing accounting policy and control organization believes the complexity of the existing exceeds our internal capabilities.

5. Plan to implement improved accounting systems.

We believe that the foregoing actions will improve our internal control over financial reporting, as well as our disclosure controls and procedures. When funds permit, we intend to perform such procedures and commit such resources as necessary to continue to allow us to overcome or mitigate these material weaknesses such that we can make timely and accurate quarterly and annual financial filings until such time as those material weaknesses are fully addressed and remediated.
Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal controls over financial reporting during its current fiscal quarter that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

2321

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On August 21, 2020, Boustead Securities, LLC (“Boustead”) filed suit against Sunstock, Inc. (“Sunstock”) in the County of Orange, California. Boustead is an investment banking firm engaged by Sunstock on September 19, 2019 to raise equity. Boustead maintained that Sunstock ~~owes~~owed it ~~87,179,487~~87,179 shares of Preferred Stock Warrants and ~~9,230,769~~9,231 shares of Common Stock Warrants. Boustead also sought seeking general damages, interest, and costs of the suit. Sunstock believed that Boustead ~~has~~had not fulfilled its obligations in raising equity and vigorously contested the suit. Sunstock hired an arbitrator but there was no resolution between Sunstock and Boustead. The matter went to trial in September 2021 and on November 2, 2021 the Court determined that Sunstock owed Boustead $260,308 for warrants issued that Sunstock did not honor. $260,308 was accrued and is shown ~~in operating~~as part of accounts payable and accrued expenses in the ~~unaudited condensed and consolidated statement of operations.~~balance sheet. See detail in Note 4 above. The warrants are no longer outstanding. All other monetary claims by Boustead were dismissed by the Court. The $260,308 is to be paid in cash. The Company filed an appeal of the judgment on December 9, 2021. There has been no change as of the date of this report.

In December 2020, a former employee of Sunstock filed a claim with the California Labor Commission regarding claimed back pay owed. A preliminary hearing was held on January 4, 2021 and the Company is currently awaiting the next step.

ITEM 1A. RISK FACTORS

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

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the nine months ended September 30, ~~2021, we~~2022, the Company issued ~~the following~~no unregistered ~~securities:~~securities.
~~We issued 784,570 shares of its common stock to its chief executive officer for the conversion of $230,500 of related party notes payable and $4,871 accrued interest payable.~~
~~We issued 400,000 shares of its common stock to its chief executive officer for the conversion of 400,000 shares of Series A convertible Preferred Stock.~~

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

(a) Not applicable.

(b) Item 407(c)(3) of Regulation S-K:

During the ~~quarter~~nine months covered by this Report, there have not been any material changes to the procedures by which security holders may recommend nominees to the Board of Directors.

2422

ITEM 6. EXHIBITS

(a) Exhibits

31.1 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

99 ~~Court Judgment~~
101.INS Inline XBRL Instance Document

101.SCH Inline XBRL Taxonomy Extension Schema

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB Inline XBRL Taxonomy Extension Label Linkbase

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
2523

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SUNSTOCK, INC.

~~Dated:~~Dated November ~~22, 2021~~14, 2022 By: /s/ Jason C. Chang
Jason C. Chang
President, Chief Executive Officer, Chief Financial Officer

~~Dated:~~Dated November ~~22, 2021~~14, 2022 By: /s/ Ramnik Clair
Ramnik Clair
Vice President, Board Member

2624

	Shares			Amount			Shares		Amount		Capital			Receivable			Deficit			Total
	Convertible Preferred Stock						Common Stock				Additional Paid-In			Shareholders			Accumulated
	Shares			Amount			Shares		Amount		Capital			Receivable			Deficit			Total
Balance at December 31. 2019		-		$	-			1,292,136	$	129	$	58,721,451		$	(25,100	)	$	(62,885,335	)	$	(4,188,855	)
Issuance of common stock for cash and receivables		-			-			206,000		21		40,079			(25,100	)		-			15,000
Estimated difference in fair value of common stock issued for cash		-			-			-		-		421,200			-			-			421,200
Issuance of common stock for services		-			-			314,000		31		345,369			-			-			345,400
Issuance of common stock for services related party		-			-			80,000		8		207,992			-			-			208,000
Issuance of common stock for convertible notes		-			-			24,590		2		14,998			-			-			15,000
Issuance of common stock for related party notes payable		-			-			229,738		23		232,183			-			-			232,206
Estimated difference in fair value of common stock issued for related party note payable		-			-			-		-		182,032			-			-			182,032
Issuance of comm stock for exercise of warrants (noncash transaction)		-			-			98,214		10		(10	)		-			-			-
Beneficial conversion feature of convertible note payable		-			-			-		-		25,000			-			-			25,000
Issuance of common stock for cash
Issuance of common stock for cash,shares
Issuance of common stock for conversion of preferred stock
Issuance of common stock for conversion of preferred stock,shares
Payment of shareholders receivable
Issuance of common stock for related party notes payable and accrued interest
Issuance of common stock for related party notes payable and accrued interest,shares
Issuance of common stock for conversion of preferred stock
Issuance of common stock for conversion of preferred stock,shares
Receipts on receivables from shareholders
Net income		-			-			-		-		-			-			2,793,206			2,793,206
Balance at March 31, 2020 (unaudited)		-		$	-			2,244,678	$	224	$	60,190,294		$	(50,200	)	$	(60,092,129	)	$	48,189
Issuance of common stock for cash		-			-			75,000		8		7,492			-			-			7,500
Net loss		-			-			-		-		-			-			(362,497	)		(362,497	)
Balance at June 30, 2020 (unaudited)		-		$	-			2,319,678	$	232	$	60,197,786		$	(50,200	)	$	(60,454,626	)	$	(306,808	)
Issuance of common stock for conversion of preferred stock		-			-			395,000		39		234,961			-			-			235,000
Payment of shareholders receivable		-			-			-		-		-			5,100			-			5,100
Net income		-			-			-		-		-			-			94,878			94,878
Balance at September 30, 2020 (unaudited)		-		$	-			2,714,678	$	271	$	60,432,747		$	(45,100	)	$	(60,359,748	)	$	28,170

Balance at December 31, 2020		400,000			20,000			2,941,817	$	294	$	60,567,724		$	(45,100	)	$	(60,207,491	)	$	315,427
Issuance of common stock for related party notes payable and accrued interest		-			-			640,670		64		1,537,544			-			-			1,537,608
Issuance of common stock for conversion of preferred stock		(400,000	)		(20,000	)		400,000		40		199,960			-			-			200,000
Net loss		-			-			-		-		-			-			(1,465,000	)		(1,465,000	)
Balance at March 31, 2021 (unaudited)		-		$	-			3,982,487	$	398	$	62,305,228		$	(45,100	)	$	(61,672,491	)	$	588,035
Issuance of common stock for related party notes payable and accrued interest		-			-			143,900		14		473,416			-			-			473,430
Receipts on receivables from shareholders		-			-			-		-		-			37,600			-			37,600
Net loss		-			-			-		-		-			-			(467,222	)		(467,222	)
Balance at June 30, 2021 (unaudited)		-		$	-			4,126,387	$	412	$	62,778,644		$	(7,500	)	$	(62,139,713	)	$	631,843
Receipts on receivables from shareholders															7,500						7,500
Net loss																		(330,959	)		(330,959	)
Net income (loss)		-			-			-		-		-			-			(330,959	)		(330,959	)
Balance at September 30, 2021 (unaudited)		0		$	-			4,126,387	$	412	$	62,778,644		$	-		$	(62,470,672	)	$	308,384


	Convertible Preferred Stock						Common Stock				Additional Paid-In		Shareholders			Accumulated
	Shares			Amount			Shares		Amount		Capital		Receivable			Deficit			Total
Balance at December 31. 2020 (audited)		400,000		$	200,000			2,941,817	$	294	$	60,567,724	$	(45,100	)	$	(60,207,491	)	$	515,427
Issuance of common stock for related party notes payable and accrued interest		-			-			640,670		64		1,537,544		-			-			1,537,608
Issuance of preferred stock for convertible preferred stock payable		(400,000	)		(200,000	)		400,000		40		199,960		-			-			-
Net loss		-			-			-		-		-		-			(1,465,000	)		(1,465,000	)
Balance at March 31, 2021 (unaudited)		-		$	-			3,982,487	$	398	$	62,305,228	$	(45,100	)	$	(61,672,491	)	$	588,035
Issuance of common stock for related party notes payable and accrued interest		-			-			143,900		14		473,416		-			-			473,430
Receipts on receivables from shareholders		-			-			-		-		-		37,600			-			37,600
Net loss		-			-			-		-		-		-			(467,222	)		(467,222	)
Balance at June 30, 2021 (unaudited)		-		$	-			4,126,387	$	412	$	62,778,644	$	(7,500	)	$	(62,139,713	)	$	631,843
Receipts on receivables from shareholders		-			-			-		-		-		7,500			-			7,500
Net loss		-			-			-		-		-		-			(330,959	)		(330,959	)
Balance at September 30, 2021 (unaudited)		-		$	-			4,126,387	$	412	$	62,778,644	$	-		$	(62,470,672	)	$	308,384

Balance at December 31, 2021 (audited)		-		$	-			4,126,387	$	412	$	62,778,644	$	-		$	(62,264,145	)	$	514,911
Net income		-			-			-		-		-		-			102,893			102,893
Balance at March 31, 2022 (unaudited)		-		$	-			4,126,387	$	412	$	62,778,644	$	-		$	(62,161,252	)	$	617,804
Net loss		-			-			-		-		-		-			(94,555	)		(94,555	)
Balance at June 30, 2022 (unaudited)		-		$	-			4,126,387	$	412	$	62,778,644	$	-		$	(62,255,807	)	$	523,249
Net loss		-			-			-		-		-		-			(59,402	)		(59,402	)
Net income (loss)		-			-			-		-		-		-			(59,402)			(59,402)
Balance at September 30, 2022 (unaudited)		-		$	-			4,126,387	$	412	$	62,778,644	$	-		$	(62,315,209	)	$	463,847

	September 30, 2022			December 31, 2021
Furniture and equipment	$	58,460		$	58,460
Less – accumulated depreciation		(57,981	)		(57,175	)
Total	$	479		$	1,285

	September 30, 2021		December 31, 2020
Accounts payable	$	1,866	$	-
Accrued court decision		260,308		-
Accrued consultant fees		138,774		140,967
Accrued audit fees		59,483		71,575
Accrued payroll		52,006		30,000
Accrued dividends – preferred stock		36,326		32,381
Accrued legal fees		26,689		-
Expenses owed consultant		22,668		22,669
Accrued interest payable		7,221		2,886
Accrued interest payable related party		632		2,853
Other accrued expenses		11,305		12,794
Accounts payable and accrued expenses	$	617,278	$	316,125

Balance at 12/31/2020	$	98,500
Loan advances		203,000
Loan principal converted to common stock		(230,500	)
Balance at 09/30/2021	$	71,000

Balance at 12/31/2021	$	153,100
Loan advances		207,687
Balance at 09/30/22	$	360,787

	Remaining Lease Payments			Remaining Lease Payments
2021	$	4,278
2022		17,240		$	4,406
2023		13,221			13,221
Total remaining lease payments		34,739			17,627
Less: imputed interest		(5,487	)		(2,564	)
Total operating lease liabilities		29,252			15,063
Less: current portion		(14,188	)		(15,063	)
Long term operating lease liabilities	$	15,064		$	-

Weighted average remaining lease term		24 months			12 months
Weighted average discount rate		12	%		12	%

	Remaining Loan Payments
2022	$	5,215
2023		8,940
2024		8,940
2025		8,940
2026		8,940
thereafter		209,345
Total remaining loan payments		250,320
Less: imputed interest		(100,320	)
Total loan liability		150,000
Less: current portion		(3,172	)
Long term loan liability	$	146,828

Weighted average remaining lease term		27.7 years

	preferred stock warrants			common stock warrants
Balance at 12/31/20		100,000			10,000

Warrants added		-			-

Warrants exercised		-			-

Warrants voided through court decision (Note 6)		(100,000	)		(10,000	)

Balance at 09/30/21		-			-


31.1		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

99		~~Court Judgment~~

101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

	SUNSTOCK, INC.

~~Dated:~~Dated November ~~22, 2021~~14, 2022	By:	/s/ Jason C. Chang
		Jason C. Chang
		President, Chief Executive Officer, Chief Financial Officer

~~Dated:~~Dated November ~~22, 2021~~14, 2022	By:	/s/ Ramnik Clair
		Ramnik Clair
		Vice President, Board Member