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

The Teardroppers, Inc.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED) (Unaudited)

* denotes a loss of less than $(.01) per share. 

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

The Teardroppers, Inc.

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)STOCKHOLDERS' EQUITY (Unaudited)

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

The Teardroppers, Inc.

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

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

TEARDROPPERS, INC.

CONDENSED NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)

For the Three and Nine Months Ended September 30, 2017March 31, 2020 and 20162019

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

On June 3, 2013, Teardroppers, Inc. (the “Company”), was incorporated under the laws of the state of Nevada.

We intend to enterare in the business of mobile billboard advertising, by offering to provideproviding billboard advertising space on custom designed "Teardrop Trailers". and various sizes of cargo type trailers. Teardrop Trailers, are usually designed for short-period accommodations for vacationers and travelers. Teardrop Trailers are designed to be towed behind small economy sizednew and vintage vehicles and pickup trucks.

In addition, we own cargo trailers with flat non rivet panel siding that can be used for hauling and transportation. These trailers range in size from 15 feet to 53 feet. We lease these trailers for transportation of goods and for advertising of their respective business or the businesses of lessee clients.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Interim Financial Statements

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Qform 10Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In our opinion the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the ninethree months ended September 30, 2017March 31, 2020 are not necessarily indicative of the final results that may be expected for the year ended December 31, 2017.2020. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 20162019 filed with the SEC.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Such estimates include management’s assessments of the carrying value of certain assets, useful lives of assets, and related depreciation and amortization methods applied.

Cash equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Fair value of financial instruments

The Company adopted the provisions of FASB Accounting Standards Codification (“ASC”) 820 (the “Fair Value Topic”) which defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and expands disclosures about fair value measurements.

The Fair Value Topic defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. It also establishes a fair value hierarchy, which prioritizes the valuation inputs into three broad levels.

The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts payable, accrued expenses, and deferred revenue approximate their fair value because of the short-term maturity of those instruments. The Company’s note payable approximates the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at September 30, 2017March 31, 2020 and December 31, 2016.2019.

The Company had no assets or liabilities measured at fair value on a recurring basis for as of September 30, 2017March 31, 2020 and December 31, 2016,2019, respectively, using the market and income approaches.

Property and equipment

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method over the assets estimated useful life of three (3) years for equipment, five (5) years for automobile, and seven (7) years for furniture and fixtures. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.

Revenue recognition

On January 1, 2018, the Company adopted the provisions of ASC 606 Revenue from Contracts with Customers, and related Accounting Standards Updates.  This new revenue recognition standard has a five step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; and e) Recognize revenue when (or as) performance obligations are satisfied. The Company follows paragraph 605-10-S99-1impact of the FASBCompany’s initial application of ASC for revenue recognition. The Company will recognize revenue when it is realized or realizable606 did not have a material impact on its financial statements and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable and (iv) collectability is reasonably assured. In addition, the Company records allowances for accounts receivable that are estimated to not be collected.disclosures.

The primary source of revenue is from the rental of advertising space on custom designed Teardrop Trailers. The length of the rental agreements varies from one to thirty days. Customers pay in advance and revenue is recognized based on the number of days of each contract that have expired. TheFor the three months ended March 31, 2020 and 2019 the Company recognized $6,010 ofno income from the rental of the trailers duringtrailers.

In March 2018, the nineCompany entered into a four-year agreement to lease equipment to a related party. As of March 31, 2020, and 2019, recognized related party lease income was $12,000 and $12,000, respectively.

In January 2019, the Company entered into a two-year agreement to lease a vehicle to an unrelated third party. The lease is classified as an operating lease. The term of the lease is 24 months ended September 30, 2016.at $425 per month. The vehicle being leased is reported on the balance sheet in property and equipment at a cost of $30,089. Lease income is reported each month as the payments are due. As of March 31, 2020, recognized lease income was $1,275 on the Statement of Operations. The payments received are reported as an operating activity on the Statement of Cash Flows.

On February 1, 2020, the Company leased a truck and trailer purchased November 2019 for $190,000 to a related party. The lease is classified as a direct financing lease. The cost of the vehicle and related accumulated depreciation has been reclassified to a lease receivable and is reflected on the condensed balance sheet as lease receivable – related party. Interest revenue is reflected on the condensed statement of revenue. See Note 5 for details.

Net income (loss) per share

The Company computes basic and diluted earnings per share amounts pursuant to ASC 260-10-45. Basic earnings per share is computed by dividing net income (loss) available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted earnings per share is computed by dividing net income (loss) available to common shareholders by the diluted weighted average number of shares of common stock during the periodperiod.

The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially diluted debt or equity.

There were no potentially dilutive shares outstanding as of September 30, 2017March 31, 2020 and December 31, 2016,2019, respectively.

Subsequent events

The Company follows the guidance in ASC 855-10-50 for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued.  

Recently issued accounting pronouncements

The Company has implemented all new accounting pronouncements that are in effect.effect and applicable to the Company.  These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

NOTE 3 – GOING CONCERN

The Company's consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company has a minimum cash balance available for payment of ongoing operating expenses. As of March 31, 2020, the Company has an accumulated deficit of $2,214,529 and has a net cash outflow from operating activities of $108,250. These matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issue date of this report. Its continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available or will be available on terms acceptable to the Company.

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment consists of the following at March 31, 2020 and December 31, 2019:

Depreciation expense for the three months ended March 31, 2020 and 2019 was $17,321 and $14,404 respectively.

On February 1, 2020, the Company leased a truck and trailer purchased November 2019 for $190,000 to a related party. The lease is classified as a financing lease. The cost of the vehicle and related accumulated depreciation has been reclassified to a lease receivable and is reflected on the condensed balance sheet as lease receivable – related party. See Note 5 for details.

NOTE 5 – LEASE RECEIVABLE – RELATED PARTY

On November 12, 2019, the company purchased a truck and trailer from a related party for $190,000. On February 1, 2020, the Company leased the asset back to the same related party. The term of the lease is for 48 months with payments of $5,003 per month. At the end of the lease, the related party the right to purchase the asset for $22,800. The lease is classified as a direct financing lease under ASC 842. The present value of the lease payments, excluding the end of lease provisions, discounted at an interest rate of 10%, is $197,442, with an estimated residual value of approximately $15,000. The Company is using the net book value of $180,500 of the asset as the initial value of the lease in accordance with ASC 842-30-55-17A.

The undiscounted cash flow principal payments for the remaining term of the lease will be as follows:

Income from the lease is reflected on the statement of operations as interest income – related parties. For the three months ended March 31, 2020 interest income of $4,410 was reported.

NOTE 6 – LOAN PAYABLE

During 2014, the Company entered into a loan agreement with Gemini Southern, LLC whereby the monies paid to the Company by Gemini Southern, LLC pursuant to the consulting agreement dated September 20, 2013. The balance will be paid back with interest commencing on January 1, 2015 at a rate of 10% per annum with a maturity date of December 12, 2018. On April 1, 2018, the balance of the debt, $525,000, was converted into 4,375,000 of common stock. As of March 31, 2020, and December 31, 2019, the loan amount was $0. The Company recorded accrued interest on this loan of $145,632 as of March 31, 2020 and December 31, 2019, respectively. The accrued interest was not part of the conversion agreement and continues to be reflected as a liability included in accrued interest payable – related parties on the balance sheet. Effective April 1, 2018, the line of credit is considered related party debt. See Note 7 for details of the transactions.

NOTE 47 – LINE OF CREDIT FROM RELATED PARTY

On February 25, 2014, the Company entered into a line of credit with DEVCAP Partners, LLC, a California limited liability company, for an amount up to $450,000 with a maturity date of June 1, 2018, bearing interest of 10% per annum. DEVCAP Partners, LLC is a related party to the Company as it is the majority shareholder of the Company. On July 5, 2017, $142,000 of the balance due was converted into 2,840,000 shares of stock valued at $.05 per share. As of September 30, 2017,March 31, 2020, and December 31, 2016,2019, the balance of the line of credit was $2,385$135,365 and $100,560,$695, respectively. The Company recorded accrued interest of $8,494$13,044 and $4,972$9,820 on the line of credit at June 30, 2017March 31, 2020 and December 31, 2016,2019, respectively.

On August 13, 2015, the Company entered into a line of credit with General Pacific Partners, LLC, a California limited liability company, for an amount up to $450,000. The line of credit is a demand loan bearing interest of 10% per annum. General Pacific Partners, LLC is a related party to the Company as it is owned by a majority shareholder of the Company. On July 5, 2017, the entire balance of $25,000 was converted into 500,000 shares of stock valued at $.05 per share. As of September 30, 2017,March 31, 2020, and December 31, 20162019 the balance of the line of credit was $0$0. The Company recorded accrued interest of $4,732 at March 31, 2020 and $25,000,December 31, 2019.

During 2014, the Company entered into a line of credit agreement with Gemini Southern, LLC. On April 1, 2018, the Company converted $525,000 of debt owed to Gemini Southern, LLC into 4,375,000 shares of stock. Gemini Southern, LLC will be treated as a related party for all activity from the date of the conversion forward. The line of credit is a demand loan with a maximum of $650,000 bearing interest at 10%, maturing December 2023. The line of credit was increased to $625,000 per an agreement by the parties. At March 31, 2020, and December 31, 2019, the balance due on the line was $624,991 and $490,000 respectively. The Company recorded accrued interest of $4,732$48,624 and $3,459 at September 30, 2017$34,287 as of March 31, 2020 and December 31, 2016,2019, respectively.

NOTE 8 – LONG-TERM LIABILITIES – RELATED PARTY

On October 1, 2017, the Company acquired from Gemini Southern, LLC a 2006 Ultra-Comp 53” NASCAR type vehicle transport hauler (the “Hauler”) to be used for promotional / advertising services. The purchase price of the Hauler was $165,000. The Company paid for the Hauler with a promissory note (the “Hauler Note”). The Hauler Note bears interest at 12% per annum and is payable as follows: (i) interest only from October 1, 2017 through February 28, 2018; (ii) $ $3,670 per month from March 1, 2018 through February 28, 2022; and $45,000 on February 1, 2022. The trailer is collateral for the promissory note. The balance of the loan was $107,949 and $115,567 as of March 31, 2020 and December 31, 2019, respectively. Accrued interest was $340 at March 31, 2020 and December 31, 2019.

Future principal payments will be as follows:

On December 22, 2018, the Company leased a vehicle from the majority shareholder. The term of the lease is 84 months with payments of $423 per month. At the end of the lease the Company can purchase the vehicle for $2,500. As of March 31, 2020, it is reasonably expected that the Company will exercise the purchase option. The value of the asset and corresponding liability at the date of inception was $30,089, the net present value of the lease payments, including the purchase option, using an interest rate of 6.649% in accordance with the provisions of ASC 842. The balance of the lease liability at March 31, 2020 and December 31, 2019 was $25,630 and $26,463, respectively.

Future lease payments will be as follows:

NOTE 59 – OTHER RELATED PARTY TRANSACTIONS

Line of credit from related party

The Company has two line of credit agreements with related parties. The sole owner of DEVCAP Partners, LLC is also the majority shareholder in the Company. General Pacific Partners is owned by the party that owns DEVCAP Partners, LLC. See Note 4 for further disclosure.

Consulting expense to related party (DEVCAP Partners, LLC)

On January 1, 2014, the Company executed a three-year consulting agreement with DEVCAP Partners, LLC, (“DEVCAP”), whereby the Company agreed to pay $7,500 a month for consulting services to be provided to the Company such as marketing, architectural development, accounting, finance, corporate structure and tax planning. For the three months ended September 30, 2017March 31, 2020 and 2016,March 31, 2019, the Company recorded consulting fee expense to DEVCAP of $22,500. For the nine months ended September 30, 2017 and 2016, the Company recorded consulting fee expense to DEVCAP of $67,500. The amount due but unpaid is $210,000$224,485 and $142,500$246,985 at September 30, 2017March 31, 2020 and December 31, 2016,2019, respectively, and is included in accounts payable-payable related parties on the balance sheet.

Consulting expense to related party (Ray Gerrity)(Cody Ware)

On January 1, 2014,2019, the Company entered into a verbal consulting agreement with its Chief Executive Officer, Ray Gerrity,Cody Ware, whereby the Company agreed to pay $2,500$1,500 per quartermonth in fees for consulting services related to his duties as Chief Executive Officer. For the three months ended September 30, 2017March 31, 2020 and 2016,2019 the Company recorded consulting fee expense of $2,500. For the nine months ended September 30, 2017 and 2016, the Company recorded consulting fee expense of $7,500.$4,500. The amount due but unpaid was $27,500is $4,500 and $20,000$1,500 at June 30, 2017March 31, 2020 and December 31, 2016,2019, respectively and wasis included in accounts payable related parties on the balance sheet as accounts payable - related parties.

Consulting expense to related party (Robert Wilson)

On January 1, 2014, the Company entered into a verbal consulting agreement with its former Chief Financial Officer, Robert Wilson, whereby the Company agreed to pay $2,500 per quarter for consulting services related to his duties as Chief Financial Officer. He resigned effective April 1, 2017. For the three and nine months ended September 30, 2016, the Company recorded consulting fee expense of $0 and $2,500, respectively. The amount due but unpaid was $17,500 and $15,000 at September 30, 2017 and December 31, 2016, respectively, and was included on the balance sheet as accounts payable - related parties.

Related party purchase of asset

On February 4, 2017, the Company purchased a 1971 Chevrolet Corvette for use in the business operations. The vehicle was acquired from the majority shareholder in exchange for 160,000 shares of stock valued at $.15 per share, for a total of $24,000.

On April 15, 2017, the Company purchased a 1995 Featherlite trailer for use in the business operations. The trailer was purchased from a shareholder in exchange for 300,000 shares valued at $.20 per share, for a total of $60,000.sheet.

NOTE 610 – STOCKHOLDERS’ EQUITY (DEFICIT)DEFICIT

At the time of incorporation, the Company was authorized to issue 10,000 shares of common stock and 1,000 shares of preferred stock with a par value of $0.001.

The Company amended its articles of incorporation to increase its authorized shares to 100,000,000200,000,000 shares of common stock and 20,000,000 shares of preferred stock, both $0.001 par value.

NOTE 711 – SUBSEQUENT EVENTS

Management has evaluated subsequent events pursuantconcluded that the COVID-19 outbreak in 2020 may have a significant impact on business in general, but the potential impact on the Company is not currently measurable. Due to the requirementslevel of ASC Topic 855risk this virus may have on the global economy, it is at least reasonably possible that it could have an impact on the operations of the Company in the near term that could materially impact the Company’s financials. Management has not been able to measure the potential financial impact on the Company but will review commercial and has determined that no material subsequent events exist.federal financing options should the need arise.

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

Safe Harbor for Forward-Looking Statements

When used in this report, the words “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,” “project,” “intend,” and similar expressions are intended to identify forward-looking statements within the meaning of Section 27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act of 1934 regarding events, conditions, and financial trends that may affect the Company’s future plans of operations, business strategy, operating results, and financial position. Persons reviewing this report are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and that actual result may differ materially from those included within the forward-looking statements as a result of various factors.  Such factors are discussed under the “Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operations,” and also include general economic factors and conditions that may directly or indirectly impact the Company’s financial condition or results of operations.

Business of The Company

The Teardroppers, Inc., (the “Company”), is a Nevada corporation which was formed in September of 2013.

Mobile Billboard Advertising

We are engaged in the business of mobile billboard advertising by offering to provide billboard advertising space on custom designed "Teardrop Trailers". Teardrop Trailers, are usually designed for short-period accommodations for vacationers and travelers. Teardrop Trailers are designed to be towed behind small economy sized vehicles and pickup trucks. A Teardrop Trailer, also known as a "Teardrop Camper Trailer", is a streamlined, compact, lightweight travel trailer, which gets its name from its teardrop profile. We received and assembled one Teardrop Trailer from an independent partnership (the "Partnership"), based upon Teardrop Trailer designs provided by the Partnership and approved by us. This Teardrop Trailer was delivered on January 15, 2015. In addition, we ordered a "Kit" from the Partnership, along with a custom chassis from an independent supplier recommended by the Partnership, which enables us to assemble our first Teardrop Trailer. The Teardrop Trailer assembled from this Kit was assembled by an independent contractor and was delivered to us on December 31, 2014. Due to manufacturing limitations of the Partnership, we determined that it would be faster and more efficient to assemble a completed Teardrop Trailer from a Kit then to wait for delivery of a completed Teardrop Trailer from the Partnership. In the future, we intend to obtain additional Teardrop Trailers by using a Kit and independent contractors to assemble the Kit.

The Teardrop Trailer

Teardrop Trailers are designed to be towed behind small economy sized vehicles, pickup trucks and any qualified tow vehicles. A Teardrop Trailer, also known as a "Teardrop Camper Trailer", is a streamlined, compact, lightweight travel trailer, which gets its name from its teardrop profile. We have ordered the assembly of one Teardrop Mobile Trailer from the Partnership at a contract price of $5,000. The cost to assemble the Teardrop Trailer from the Kit is a total of $4,995 ($3,000 for the Kit, $495 for the chassis, and $1,500 for the services of the independent contractor to assemble the Kit on the chassis.)

Our Teardrop Trailers will be approximately 4 feet (1.2 m) in width and 10 feet (3.0 m) in length and 5 feet (1.5 m) in height Wheels and tires are outside the body and are covered by fenders. Our Teardrop Trailers will be covered with thin sheets of aluminum. Since Teardrop Trailers are relatively light, most vehicles can tow a Teardrop Trailer and have little effect on the vehicle's fuel consumption. We do not intend to lease our Teardrop Trailers for camping or recreational use. However, our first trailer will be configured in a camping trailer configuration so as to enhance the residual value of the trailer. We believe that some of our future rental customers, who will rent our trailers for longer periods, may use the interior space for their personnel's comfort or for storage.

Our trailers are assembled upon a chassis that has tail lights, wiring, fenders, wheels and a trailer hitch that is compliant with Federal and State regulations. We have no formal relationship with any trailer chassis manufacturer, but we believe that many manufacturers will continue to offer a chassis that we will utilize in our trailers. In the event that chassis become unavailable, our business would be adversely affected as we would then have to adjust our designs to fit chassis available from other sources.

In June of 2016, we acquired an enclosed twenty-six (26) foot tandem axle cargo trailer that will be used in our mobile advertising business along with our Teardrop Trailers. In December of 2016 we sold our 2016 twenty-six foot cargo trailer with the intention of acquiring a 2017 model with certain new model improvements.

In April of 2017, we acquired a 1995 Featherlite enclosed fifty-three (53) foot spread axle trailer that we intend to use in our mobile advertising business.

Marketing

We are currently marketing our advertising and design services through our website www.tdropmobile.com. We have hired an independent web-site developer to develop our website, which was completed on December 14, 2014. In addition, we offer our mobile billboard advertising services through traditional marketing channels, such as trade journals, trade catalogues, yellow pages advertising, and through the personal contacts of our Management. Marketing of our mobile billboard advertising has already commenced as we have made several proposals to motor sports events and advertisers to use our services. We also market our consulting services through personal contacts of our officers and majority shareholder.

We have chosen the unique shape and look of a Teardrop Trailer as our advertising platform as we believe its "eye appeal" will be attractive to a target audience's view and retention of the adverting images which will appear on the Teardrop Trailer.

In May of 2014, we acquired two fully restored "Classic" vehicles with the intention that these vehicles be used to tow our Teardrop trailers and to be used as marketing vehicles for our business. We acquired a 1959 Chevrolet Apache Fleetside pick-up truck (the "Apache") and a 1979 Ford Ranchero. On September 1, 2014, we returned the Apache to the seller and the consideration (333,333 of our shares valued at $50,000) was returned to us. The Ranchero vehicle will be available to be leased as a tow vehicle with our Teardrop trailers or it can be leased independently from the trailers. We believe that the use of this vehicle in conjunction with a Teardrop Trailer, will enhance the attractiveness of our advertising offerings to potential lessees.

In October of 2015, we acquired a 1966 Ford Mustang from DEVCAP Partners a related party for 250,000 shares of our restricted stock valued at the historical cost of $36,785 to DEVCAP. In June of 2016, the asset was sold back to DEVCAP Partners, LLC for the same valuation and the 250,000 shares were cancelled and returned to our treasury.

In February of 2017, we issued 160,000 shares of our restricted stock at a value of $24,000 to DEVCAP Partners, LLC a related party for the acquisition of a 1971 LS5 Corvette for use in our business and a promotional and tow vehicle.

In April of 2017, we issued 300,000 common shares valued at $60,000, to Rick Ware Racing, LLC for the acquisition of a 1995 Featherlite trailer for use in our business and a promotional trailer.

We currently offer advertising space on our trailers. Advertisement can be installed by applying decals, large vinyl sheets as decals or by fastening one large sheet of vinyl to the sides and top of the trailer. In addition, we will offer to provide our tow vehicle and a driver.

We believe that the mobile billboard outdoor advertising will offer to advertisers:

We believe that mobile billboard outdoor advertising offers certain advantages to advertisers, among which include:

We also offer to work closely with our clients to fully understand the client's marketing objectives. We use our best efforts to identify the highest profile locations in our client's target market in order to provide the most efficient, high exposure, high impact and cost-effective mobile billboard advertising campaign.

At every stage of the process, our services can include design, branding and selection of graphics, to achieve maximum results. Audio, illumination, promotional sampling and other sensory elements can be added to further enhance an advertising message.

Our rates are negotiated at time of agreement with our client. Our rates are based upon the range of services, length of the advertising contract, number of vehicles used, miles traveled, length of campaign, ancillary costs and other variables. Generally, we anticipate our rates to be $995 for the design and application, and removal of graphics to a trailer; $295 per day for the use of the trailer; $175 per day for a tow vehicle and driver, based upon a 6 hour day. There will be a 3 day minimum for each trailer rental.

Three Months Ended September 30, 2017March 31, 2020 Compared to Three Months Ended September 30, 2016March 31, 2019

Revenues

The Company had no$13,275 in revenue during the three months ended September 30, 2017March 31, 2020 compared to no$13,275 in revenue forduring the same periodthree months ended September 30, 2016.March 31, 2019.

Operating Expenses

For the three months ended September 30, 2017March 31, 2020 operating expenses were $55,548$167,948 compared to $65,634$81,780 for the same period in 20162019 for a decreasean increase of $10,086.$86,168. The decreaseincrease was due primarily a result of the decrease in professionalto additional audit, accounting and legal fees to $3,675 from $27,039 for the same period2019 annual report and March 2020 interim report billed in 2016.March 2020..The Company also incurred additional administrative costs of related to market branding and design concepts being explored by management.

Interest and Financing Costs

Interest expense was $11,519$20,211 for the three months ended September 30, 2017March 31, 2020 compared to $13,489 in$10,300 for the three months ended September 30, 2016.March 31, 2019. The increase in interest expenses was due to an increase in the amount of indebtedness of the company.

Net Income (Loss)

The Company incurred losses of $67,067 in the three months ended September 30, 2017 compared to $79,123 during the three months ended September 30, 2016 due to the factors discussed above.

Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016

Revenues

The Company realized no revenue during the nine months ended September 30, 2017 compared to $6,010 in revenue for the nine months ended September 30, 2016. The revenue decreased due to our inability to attract customers for our mobile advertising business.

Operating Expenses

For the nine months ended September 30, 2017 operating expenses were $164,875 compared to $165,399 for the same period in 2016 for a decrease of $524.  The decrease was a result of a decrease in consulting to related parties, which decreased to $77,500 from $83,000 for a decrease of $5,500, and professional fees, which decreased to $21,279 from $47,767 for a decrease of $26,488. Sales, general and administrative expenses for the nine months ended September 30, 2017 were $66,096 as compared to $34,632, for the nine months ended September 30, 2016, an increase of $31,464.  The increase was due to an increase in travel and fuel expenses.

Interest and Financing Costs

Interest expense was $38,545 for the nine months ended September 30, 2017 compared to $38,069 in the nine months ended September 30, 2016.

Net Income (Loss)

The Company incurred losses of $203,420 in$170,474 for the ninethree months ended September 30, 2017March 31, 2020 compared to $197,458$78,805 during the ninethree months ended September 30, 2016March 31, 2019. The increased loss was due primarily to the factorsadditional audit, accounting and legal fees as well as additional administrative cost as discussed above.

LIQUIDITY AND CAPITAL RESOURCES

The Company'sCompany’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company has a minimum cash balance available for payment of ongoing operating expenses and has incurred losses since inception and anticipates future losses in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. Its continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company.

The Company had $47,649$40,901 in cash at September 30, 2017. On July 5, 2017, $142,000 of the balance dueMarch 31, 2020 with availability on our related party linelines of credit with DEVCAP Partners, LLC, was converted into 2,840,000 sharesGeneral Pacific Partners, LLC, and Gemini Southern, LLC of stock valued$792.055. As at $.05 per share. As of September 30, 2017, the balance of the line of credit was $2,385. The Company recorded accrued interest of $4,732 at September 30, 2017. WeMarch 31, 2020 we had a working capital deficit of $947,187.$1,526,499.

Operating activities

During the ninethree months ended September 30, 2017,March 31, 2020, we had cash used $44,812 in operating activities of $108,250 as compared to $35,743$69,907 during the ninethree months ended September 30, 2016,March 31, 2019, an increase in cash outflows of $9,069.$38,343. The increase between the periods was largely due to a $5,962 increasehigher payments for consulting fees and audit fees in net (loss).

the three months ended March 31, 2020.

Investing activities

We neither generated nor used cash flow in investing activities during the ninethree months ended September 30, 2017March 31, 2020 and the same for the period in 2016.2019.

Financing activities

During the ninethree months ended September 30, 2017,March 31, 2020, we generated $43,825$99,116 from financing activities compared to $43,834$48,308 for the same period ended September 30, 2016,March 31, 2019. The increase was primarily due to an increase in the amount received from a decreaserelated party line of $9.credit.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk.

As a “smaller reporting company,” we are not required to provide the information under this Item 3.

ITEM 4. Controls and Procedures

Evaluation of disclosure controls and procedures

Based upon an evaluation of the effectiveness of our disclosure controls and procedures performed by our Chief Executive Officer as of the end of the period covered by this report, our Chief Executive Officer concluded that our disclosure controls and procedures have not been effective as a result of a weakness in the design of internal control over financial reporting identified below.

As used herein, “disclosure controls and procedures” mean controls and other procedures of our company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

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

This quarterly report does not include an attestation report of our registered independent public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered independent public accounting firm.

Changes in Internal Control Over Financial Reporting

No changes in our internal control over financial reporting occurred during the yearquarter ended DecemberMarch 31, 20162020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. Legal Proceedings

We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or material pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our company.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the ninethree months ended June 30, 2017,March 31, 2020, the Company issued 160,000no shares of common stock to purchase a vehicle for use in operations.stock.

During the nine months ended June 30, 2017, we acquired a 1995 Featherlite enclosed fifty-three (53) foot spread axle trailer that we intend to use with our mobile advertising business. The company issued 300,000 shares of its common stock to purchase the trailer. The cost basis of the shares issued was $.20 twenty cents per share.

ITEM 3. Default Upon Senior Securities

During the ninethree months ended June 30, 2017,March 31, 2020, the Company had no senior securities issued and outstanding.

ITEM 4. Mine Safety Disclosures

Not applicable to our Company.

ITEM 5. Other Information

None.During the three months ended March 31, 2020, the Company reported no other information.

ITEM 6. Exhibits

Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-KS-K.

SIGNATURES

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

Date: May 15, 2020

THE TEARDROPPERS, INC.

November 14, 2017

By:/s/ Raymond Gerrity                                   

Raymond Gerrity

Chief Executive Officer