As filed with the Securities and Exchange Commission on March 6, 2015April 11, 2023

Registration No. 333-________333-269676

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

_____________________

FORM S-1

 

FORM S-1/A

(Amendment No. 1)

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

GREY CLOAK TECH INC.

Healthy Extracts Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

2833

4700

47-2594704

(State or other jurisdiction
of

incorporation or organization)organization

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)No.)

 

10300 W. Charleston

7375 Commercial Way, Suite 125

Henderson, NV 89011

(702) 463-1004

(Address, including zip code, of registrant’s principal executive offices)

(Telephone number, including area code)

Las Vegas,

Kevin “Duke” Pitts

President

Healthy Extracts Inc.

7375 Commercial Way, Suite 125

Henderson, NV 8913589011

702-201-6450(702) 463-1004

E-mail: corp@greycloaktech.com

 (Address, including zip code, and telephone number,

including area code, of registrant's principal executive offices)

William Bossung

10300 W. Charleston

Las Vegas, NV 89135

702-201-6450

 (Name,(Name, address, including zip code, and telephone number,

Includingnumber, including area code, of agent for service)



Copies to:

Brian A. Lebrecht, Esq.

Clyde Snow & Sessions, PC

201 S. Main Street, Suite 2200

Salt Lake City, UT  84111

Telephone: (801) 322-2516

Richard I. Anslow, Esq.

Lawrence A. Rosenbloom, Esq.

Ellenoff Grossman & Schole LLP

1345 Avenue of the Americas

New York, NY 10105
Telephone: (212) 370-1300

As soon as practicable after this Registration Statement is declared effective.

(Approximate date of commencement of proposed sale to the public)public:

From time to time after this registration statement becomes effective.

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  [ X ] 

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  [   ] 

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  [   ] 

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  [   ] 

 

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,”filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): 

 

Large accelerated filer

 ☐

Accelerated filer

Non-accelerated filer

 ☐

Smaller reporting company

(Do not check if a smaller reporting company)

Smaller reporting

Emerging growth company

 ☒

 

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CALCULATION OF REGISTRATION FEEIf 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 to Section 7(a)(2)(B) of the Securities Act.  [   ]

 

Title of each Class of Securities to be RegisteredAmount to be
Registered
Proposed Maximum
Offering Price Per Unit
Proposed Maximum Aggregate Offering PriceAmount of
Registration Fee
     (2) (3) (1)
Common Stock $0.001 par value to be sold by selling shareholders 6,600,000 $.10 $660,000  81.34 

(1)Registration Fee has been paid via Fedwire.
(2)This is the initial offering and no current trading market exists for our common stock. The price paid for the currently issued and outstanding common stock was $0.10 for 3,300,000 shares and 3,300,000 common stock purchase warrants to unaffiliated investors.
(3)Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) of the Securities Act.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.


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The information in this Prospectus

The information in this prospectus is not complete and may be changed. We may be changed.  We will not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Preliminary Prospectus

Subject to Completion, dated April 11, 2023

HEALTHY EXTRACTS INC.

Picture 

[·] shares

common stock

This is an initial public offering of the common stock, par value $0.001 per share (the “Common Stock”), of Healthy Extracts Inc., a Nevada corporation. 

We are hereby registering on the registration statement of which this prospectus forms a part a total of [Ÿ] shares of our Common Stock for sale by us. This offering is being made on a firm commitment basis at an assumed offering price of $[Ÿ] per share, assuming a 1-for-100 reverse stock split of our outstanding shares of Common Stock. The number of shares of Common Stock offered pursuant to this prospectus and all other applicable information, other than in the historical and pro-forma financial statements and related notes included elsewhere in this prospectus, has been determined based on such assumed offering price. The actual offering price of the shares offered hereby will be determined between the underwriters and us at the time of pricing, considering our historical performance and capital structure, prevailing market conditions, and overall assessment of our business. Therefore, the assumed offering price per share of the shares used throughout this prospectus may not be indicative of the actual offering price for the shares (see “Underwriting – Determination of Public Offering Price” for additional information).

On September 23, 2022, our majority shareholder approved by written consent, declared it advisable and in our best interest, to amend our Articles of Incorporation to effect a reverse split of our outstanding Common Stock within a range of 1-for-25 to 1-for-150, the exact ratio and timing to be determined by our board of directors (“Board”) no later than June 30, 2023. On September 23, 2022, our Board of Directors approved the same stock split range. We intend for the Board to determine the exact amount of and effect such reverse stock split in connection with the Offering and our intended listing of our Common Stock on the Nasdaq Capital Market (“Nasdaq”), however we cannot guarantee that The Nasdaq Stock Market LLC will approve our initial listing application for our Common Stock upon such reverse stock split. Unless specifically provided otherwise herein, such numbers and prices above and used elsewhere in this prospectus assume the effectiveness of a 1-for-100 reverse stock split of our Common Stock, an assumed offering price of $[Ÿ] per share, and the listing of our Common Stock on Nasdaq to occur as of the effective date of the registration statement of which this prospectus forms a part but prior to the closing of this offering.

Currently, our common stock is quoted on the OTCQB Marketplace maintained by OTC Markets, Inc. under the symbol “HYEX.”  The closing price of our common stock (not adjusted for the anticipated stock split) as reported on the OTCQB on April 6, 2023 was $0.0475. We have applied to list our Common Stock on the Nasdaq Capital Market (“Nasdaq”) under the same symbol. We believe that upon the completion of the offering, we will meet the standards for listing



on Nasdaq. We cannot guarantee that we will be successful in listing our common stock on Nasdaq; however, we will not complete this offering unless we are so listed.

We are a “controlled company” as defined in Rule 5615(c)(1) of the Nasdaq listing rules. However, we do not intend to rely on any exemptions from the corporate governance requirements of being a controlled company. We are relying on the phase-in provisions of Rule 5615(b) as a company transferring from another market related to our audit committee composition.

Investing in the common stock is speculative and involves a high degree of risk. You should not invest unless you can afford to lose your entire investment. See “Risk Factors” beginning on page 12.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Per Share

Total (1)

Price to the public

$[·]

$[·]

Underwriting discounts (2)

$[·]

$[·]

Proceeds, before expenses, to us

$[·]

$[·]

(1)Assumes no exercise of the over-allotment options by the underwriters. 

(2)We have agreed to pay the underwriters a cash fee of 8% of the aggregate gross proceeds raised in the Offering of the shares (including proceeds received from shares of Common Stock sold to cover over-allotments, if any). We have also agreed to issue warrants to purchase up to [·] shares of our Common Stock to the underwriters exercisable at a per share price equal to 110% of the offering price of the shares (the “Underwriters’ Warrants”), which number of shares will be equal to 5% of the aggregate number of shares sold in the Offering (including the over-allotment), and to reimburse the underwriters for certain expenses. See “Underwriting” for additional information regarding underwriting compensation. 

We have granted to the representative of the underwriters a 45-day option to purchase up to an additional [·] shares of Common Stock to cover over-allotments, if any.

The underwriters expect to deliver the securities against payment to the investors in this offering made on or about [·], 2023.

Picture 

The date of this prospectus is [·], 2023



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TABLE OF CONTENTS

Page

Prospectus Summary

1

The Offering

10

Summary Financial Information

13

Risk Factors

16

Cautionary Note Regarding Forward-Looking Statements

38

Use of Proceeds

40

Dividend Policy

40

Capitalization

41

Dilution

42

Management’s Discussion and Analysis of Financial Condition and Results of Operations

43

Business

50

Management

67

Executive Compensation

72

Security Ownership of Certain Beneficial Owners and Management

74

Certain Relationships and Related Party Transactions

76

Description of Securities

79

Material U.S. Federal Income Tax Consequences to Non-U.S. Holders of Our Common Stock

80

Underwriting

85

Legal Matters

88

Experts

88

Where You Can Find More Information

88

Index to Financial Statements

F-1




ABOUT THIS PROSPECTUS

The registration statement of which this prospectus forms a part that we have filed with the U.S. Securities and Exchange Commission (the “SEC”) includes exhibits that provide more detail of the matters discussed in this prospectus. You should read this prospectus and the related exhibits filed with the SEC, together with the additional information described under the heading “Where You Can Find More Information,” before making your investment decision.

You should rely only on the information provided in this prospectus or in any prospectus supplement or any free writing prospectuses or amendments thereto, or to which we have referred you, before making your investment decision. Neither we nor the underwriters have authorized anyone to provide you with information different from, or in addition to, that contained in this prospectus or any related free writing prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus, any prospectus supplement, or any free writing prospectuses or amendments thereto do not constitute an offer to sell, or a solicitation of an offer to purchase, the shares of Common Stock offered by this prospectus, any prospectus supplement or any free writing prospectuses or amendments thereto in any jurisdiction to or from any person to whom or from whom it is unlawful to make such offer or solicitation of an offer in such jurisdiction. You should not assume that the information contained in this prospectus, any prospectus supplement or any free writing prospectuses or amendments thereto, as well as information we have previously filed with the SEC, is effective.  This Prospectusaccurate as of any date other than the date on the front cover of the applicable document.

To the extent there is not an offera conflict between the information contained in this prospectus and any prospectus supplement, you should rely on the information in such prospectus supplement, provided that if any statement in one of these documents is inconsistent with a statement in another document having a later date — for example, a document incorporated by reference in this prospectus or any prospectus supplement — the statement in the document having the later date modifies or supersedes the earlier statement.

Neither the delivery of this prospectus nor any distribution of any shares of Common Stock pursuant to this prospectus shall, under any circumstances, create any implication that there has been no change in the information set forth or incorporated by reference into this prospectus or in our affairs since the date of this prospectus. Our business, financial condition, results of operations and prospects may have changed since such date.

Neither we nor the underwriters are offering to sell these securities and it is not soliciting an offeror seeking offers to buy these securitiespurchase such shares of Common Stock offered hereby in any state or jurisdiction where the offer or sale is not permitted. Neither we nor the underwriters have done anything that would permit this Offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the Offering as to distribution of the prospectus outside of the United States.

 

PROSPECTUSSolely for convenience, our trademarks and tradenames referred to in this prospectus and the registration statement of which it forms a part may appear without the ® or ™ symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and tradenames.

GREY CLOAK TECH INC.

6,600,000 Information contained in, and that can be accessed through our websites, www.healthyextractsinc.com, www.bergamentna.com, and www.tryubn.com does not constitute part of this prospectus or the registration statement of which it forms a part.

For investors outside the United States: neither we nor the underwriters have done anything that would permit this Offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than the United States. You are required to inform yourselves about and to observe any restrictions relating to this Offering and the distribution of this prospectus.




PROSPECTUS SUMMARY

This summary highlights selected information contained in greater detail elsewhere in this prospectus. This summary does not contain all the information you should consider before investing in our common stock. You should read the entire prospectus, including our financial statements and related notes and the information set forth under the heading “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” before investing in our common stock. In this prospectus, the “Company,” “we,” “us,” and “our” refer to Healthy Extracts Inc.

Our Business

We are a platform for acquiring, developing, researching, patenting, marketing, and distributing plant-based nutraceuticals. Our proprietary and patented products target select high-growth categories within the multibillion-dollar nutraceuticals market, such as heart, brain and immune health.

Nutraceuticals are generally considered to be substances that beyond their nutritional value can be used to achieve a benefit for an existing physiological condition or provide protection against potential aliments. Our current principal markets are nutraceutical products targeting customers focused on their own heart and brain health and immune support. Our products have not been evaluated by the U.S. Food and Drug Administration (“FDA”) or any similar regulatory body for safety and efficacy.

The primary philosophy behind nutraceuticals is the focus on prevention and the body’s ability to use natural rather than artificially derived substances to treat disease or dysfunction—or as the Greek physician and father of modern medicine, Hippocrates, famously espoused, “Let food be your Medicine.”

Today, the role of nutraceuticals in human health and wellbeing has become one of the most active and important areas of scientific investigation, with the latest findings presenting wide-ranging implications for consumers, health care providers, regulators, nutritional supplement producers and distributors. Our mission is to lead and support this investigation and use our findings to acquire or create products with health and performance benefits that have mass consumer appeal.

Guided by this mission, our first two acquisitions (in 2019 and 2020, respectively) formed our current operating subsidiaries, Bergamet NA, LLC (“Bergamet”), which offers nutraceutical heart and immune health products, and Ultimate Brain Nutrients, LLC (“UBN”), which offers nutraceutical products for brain health.

Through published research, our Bergamet products have been shown to support heart health, support immune response, and address metabolic syndrome. Our UBN brain health formulations have been in development for more than 20 years, over which time it has gained research support.

On January 13, 2023, we entered into a definitive agreement to acquire nutraceutical manufacturer, Hyperion, L.L.C. (“Hyperion”), and its digital marketing affiliate, Online Publishing & Marketing, LLC (“OPM”), both based in Lexington, Virginia. We intend to use a portion of the proceeds from this Offering to fund this acquisition. See “Use of Proceeds.”

Hyperion products have been formulated to support brain, memory, vision, sinus and digestive health, as well as healthy sleep and aging. OPM provides online advertising and marketing for Hyperion as well as other companies in the health and wellness space. The closing of these two acquisitions is expected to occur following the completion of and using the proceeds from this Offering.


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We anticipate the acquisition of Hyperion and OPM to be transformative to our business, significantly strengthening our manufacturing, marketing and distribution capabilities, expanding our nutraceutical product portfolio, adding positive cash flow, and significantly increasing our annualized gross revenues.

We also expect that the greater financial and operational strength afforded by these two acquisitions to better enable us to make future strategic complementary acquisitions, including some of which we have identified and are currently evaluating.

Our Markets

The overall nutraceutical market is growing at a 7.8% compounded annual growth rate (“CAGR”) and is expected to reach $441 billion by 2026, according to ReportLinker. Driving this growth are multiple factors, including changing lifestyles, growing consumer desire to move away from expensive prescription medicine and undesirable side effects, aging population and increased life expectancy. Our current principal markets are nutraceutical products targeting customers focused on their own heart and brain health and immune support.

A growing self-care trend is also driving strong demand for nutraceuticals. Given increasingly hectic lifestyles, and the lack of time for preparing and consuming the required nutrients through a regular diet, the desire to replenish or augment essential nutrients with nutraceuticals is also increasing.

Our BergaMet all-natural Citrus Bergamot SuperFruit formulations address an expanding global heart health ingredients market that is projected to grow at a 4.6% CAGR to reach $55.3 billion by 2027, according to ResearchAndMarkets. This growth is largely being driven by concerns about cardiovascular disease, which remains the leading cause of premature death globally according to the World Health Organization.

Our UBN products tap the fast-growing market for brain health, which is growing at a 9.4% CAGR to reach $15.7 billion by 2030, according to Grandview Research. This market is being driven in part by the rise in the aging adult population in North America and Europe, with consumers increasingly using brain health supplements to prevent or treat mental conditions such as memory loss or dementia, or to improve mental cognition, energy and focus.

Our UBN RELIEF product for migraine suffers also address a huge market opportunity, with an estimated 39 million people suffering from migraine headaches in the U.S. and 1 billion worldwide, according to the American Migraine Foundation.

Our Competitive Strengths

We compete with other manufacturers, distributors and marketers of vitamins, minerals, herbs, and other nutritional supplements both within and outside the U.S. The nutritional supplement industry is highly competitive, and we expect the level of competition to remain high over the near term.

We believe the following are our competitive strengths:

High Gross Margins. We have high gross margin categories, with our gross margin ranging from 60% to 80%, depending on product and market channel.


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Nutraceutical Delivery System. Through our exclusive U.S. and Canada licensing and manufacturing agreement with Gelteq Pty Ltd. (“Gelteq”), a third party global leader in ingestible gel technology, we believe we are able to offer a gel-pack delivery system that our competition in North America cannot provide. Gelteq provides a customizable platform for supplement delivery, in that each gel formulation is tailored to solve a particular problem and deliver a specific outcome.

Higher BPF Content. As the exclusive North American provider of the world’s highest strength Citrus Bergamot SuperFruit, our heart and immune products have specific advantages. For example, our BergaMet PRO+ product has 47% Bergamot Polyphenolic Fraction Gold (“BPF Gold”) potency as compared to our closest competitor at only 38% BPF. BPF is comprised of five key polyphenols (Naringin, Neohesperidin, Brutieridin, Melitidin, and Neoeriocitrin). These five polyphenols are known to increase the product’s effectiveness, and thus its existence is viewed as a positive factor in its efficacy.

Backed by published research, our citrus bergamot has been shown to support heart health, support immune response, and address metabolic syndrome.

In January 2022, the World Journal of Advanced Research and Reviews published the results of a clinical study which showed that taking a daily serving of UBN RELIEF for 60 days can naturally reduce or alleviate neurological discomfort. It was also shown to improve cognitive function, sleep satisfaction and overall quality of life.

Our Competitive Challenges

We compete with other manufacturers, distributors and marketers of vitamins, minerals, herbs, and other nutritional supplements both within and outside the U.S. The nutritional supplement industry is highly competitive, and we expect the level of competition to remain high.  Our ability to scale our business and grow our revenue depends on our ability to maintain the value and reputation of our brands in the face of this competition.

The nutritional supplement industry is highly fragmented and competition for the sale of nutritional supplements comes from many sources. Such products are sold primarily through retailers (drug store chains, supermarkets, and mass market discount retailers), health and natural food stores, and direct sales channels (network marketing and internet sales).

The nutritional supplement industry is highly competitive, and we expect the level of competition to remain high over the near term. We do not believe it is possible to accurately estimate the total number or size of our competitors. The nutritional supplement industry has undergone some consolidation in the recent past and we expect that trend may continue in the near term.

We have a limited operating history in our current business, we are not profitable, and we do not expect to be profitable in the near future. There is no assurance our future operations will result in revenues sufficient to obtain or sustain profitability.

We face intense competition from competitors that are larger, more established and that possess greater resources than we do, and if we are unable to compete effectively, we may be unable to gain sufficient market share to sustain profitability. If our competitors market nutritional supplement products that are less expensive, safer or otherwise more appealing than our current and potential products, or that reach the market before our current and potential products, we may not achieve operational or financial success. The market may choose to continue utilizing existing products for any number of reasons, including familiarity with or pricing of these existing products. The failure of any of our products to compete with products marketed by our competitors would impair our ability to generate revenue, which would have a material adverse effect on our future business, financial condition, results of operations, and cash flows. Our competitors may:


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·develop and market products that are less expensive, safer, or otherwise more appealing than our products; 

·commercialize competing products before we or our partners can launch our products; and 

·initiate or withstand substantial price competition more successfully than we can. 

Our Financial Condition and Ability to Continue as a Going Concern

Our net loss from inception to December 31, 2022 was $15,926,742, and we had only very limited cash resources at December 31, 2022 of $65,651. Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Our auditor’s report reflects that our ability to continue as a going concern is dependent upon our ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. If we are unable to continue as a going concern, our business will fail and stockholders will lose their investment in our company. Even after competition of this offering, we will be required to seek additional capital to fund future growth and expansion. No assurance can be given that such financing will be available or, if available, that it will be on commercially favorable terms. Moreover, financing will likely be dilutive to our stockholders.

Future Anticipated Growth Drivers

New Sales Channels and Product Launches

In order to drive continued sales growth and leverage our growing customer base, we are planning to expand our product portfolio to include supplements that support gut health (the balance between helpful and harmful bacteria and yeast in the digestive system) as well as introduce more products in gel-pack format. Our gut health products are in the early stages of design and development and we have not begun development of any gut health products yet, nor do we have any data that supports that our anticipated formulations will improve gut health.

We plan to further expand our sales channels as well as our portfolio of natural formulations for heart and brain health and other indications.

Strategic Acquisitions

The market for nutraceutical products is highly fragmented, which create many acquisition opportunities. As part of our primary mission, we will continue to evaluate potential acquisition opportunities that could expand our product portfolio and benefit from our marketing strength and multi-channel distribution.

We anticipate that the greater financial and operational strength afforded by our planned acquisitions of Hyperion and OPM will better enable us to make future strategic complementary acquisitions.

Employees

On the Healthy Extracts holding company level, are employees are comprised of our company’s officers. Our BergaMet subsidiary has two employees. Our UBN subsidiary currently does not have its own employees since it uses outside contract help on an as-needed basis, with management provided by our officers.


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We anticipate all of our employees will continue to work for us for the foreseeable future. We plan to hire appropriate personnel on an as-needed basis and utilize the services of independent contractors as needed.

We anticipate that our planned acquisition of Hyperion and OPM will add approximately 14 employees, which will continue to work out of their existing facilities in Lexington, Virginia.

Corporate History

We were incorporated on December 19, 2014 in the State of Nevada.

On February 4, 2019, we acquired BergaMet NA, LLC, a Delaware limited liability company (“BergaMet”). BergaMet is a wholly-owned subsidiary through which we conduct our nutraceuticals business. As a result of the acquisition, Jay Decker became our majority shareholder. The shares of common stock issued in the acquisition were equal to approximately 80.1% of our outstanding common stock immediately following the closing.

On April 3, 2020, we acquired Ultimate Brain Nutrients, LLC, a Delaware limited liability company (“UBN”). UBN is a wholly-owned subsidiary through which we conduct our plant-based neuro-products business. As a result of the acquisition, Jay Decker became a significantly larger shareholder. The shares of common stock issued in the acquisition were equal to approximately 42.5% of our outstanding common stock immediately following the closing.

On January 13, 2023, we entered into an Acquisition Agreement for the acquisition of Hyperion, L.L.C. and Online Publishing & Marketing, LLC, both Virginia limited liabilities companies, by merging them into our newly-formed wholly-owned subsidiaries, Green Valley Natural Solutions, LLC (“Green Valley”) and Online Publishing & Marketing, LLC (“OPM”), both Nevada limited liability companies. The closing of the acquisition will take place following the completion of and using the proceeds from this Offering.

Corporate Information

Our corporate headquarters are located at 7375 Commercial Way, Suite 125, Henderson, NV 89011, and our telephone number is (702) 463-1004. Our websites are www.healthyextractsinc.com, www.bergametna.com, and www.tryubn.com. Information contained on our websites is not incorporated into, and does not constitute any part of, this prospectus.

Recent Developments

Reverse Stock Split

On September 23, 2022, our majority shareholder approved by written consent, declared it advisable and in our best interest, to amend our Articles of Incorporation to effect a reverse split of our outstanding Common Stock within a range of 1-for-25 to 1-for-150, the exact ratio and timing to be determined by our board of directors (“Board”) no later than June 30, 2023. On September 23, 2022, our Board of Directors approved the same stock split range. We intend for the Board to determine the exact amount of and effect such reverse stock split in connection with the Offering and our intended listing of our Common Stock on the Nasdaq Capital Market (“Nasdaq”), however we cannot guarantee that The Nasdaq Stock Market LLC will approve our initial listing application for our Common Stock upon such reverse stock split. Unless specifically provided otherwise herein, such numbers and prices above and used elsewhere in this prospectus assume the effectiveness of a 1-for-100 reverse stock split of our Common Stock, an assumed offering price of $[·] per share, and the listing of our Common Stock on


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Nasdaq to occur as of the effective date of the registration statement of which this prospectus forms a part but prior to the closing of the Offering of the shares.

We have applied to list our Common Stock on Nasdaq in connection with this offering. We intend for the Board to effect such reverse stock in connection with this Offering and our intended listing of our Common Stock on Nasdaq, however we cannot guarantee that we will receive approval of our initial listing application for our Common Stock on Nasdaq upon such reverse stock split.

The number of shares of Common Stock offered pursuant to this prospectus and all other applicable information, other than in the historical financial statements and related notes included elsewhere in this prospectus, assumes the effectiveness of a 1-for-100 reverse stock split of our Common stock.

2023 Pending Acquisitions

On January 13, 2023, we entered into an Acquisition Agreement for the acquisition of Hyperion, L.L.C. and Online Publishing & Marketing, LLC, both Virginia limited liabilities companies, by merging them into our newly-formed wholly-owned subsidiaries, Green Valley Natural Solutions, LLC (“Green Valley”) and Online Publishing & Marketing, LLC (“OPM”), both Nevada limited liability companies. The closing of the acquisition will take place following the satisfaction of material closing conditions set forth below, including a capital raise of at least $4,000,000 and the commencement of trading, or approval for the commencement of trading, of our common stock on the Nasdaq Capital Market. The total purchase price for the acquisitions will be $1,750,000 in cash, $1,300,000 in the form of secured promissory notes, and $1,250,000 worth of our common stock (based on a 30% premium to the price paid per share of common stock in the above-referenced capital raise, but in no event more than ninety percent (90%) of the volume weighted average price for our common stock for the ninety (90) trading days up to and including the trading day immediately before the day the price is finally determined for securities sold in the capital raise).

The combination of the businesses is expected to significantly increase our current annualized gross revenues. Revenues for Hyperion and OPM were over $10 million for the year ended December 31, 2022. Hyperion is also expected to strengthen our manufacturing and distribution capabilities, as well as expand our product portfolio with 15 proprietary nutraceutical formulations sold under the brand, Green Valley Natural Solutions. These products are formulated to support brain, memory, vision, sinus and digestive health, as well as healthy sleep and aging.

Green Valley Natural Solutions products are manufactured and shipped direct-to-consumer from specially temperature-controlled warehouses leased in Shenandoah Valley, Virginia. These facilities would add an East Coast presence to our existing warehouse and shipping facilities in Nevada, with this expected to lower customer shipping costs and order delivery times.

Hyperion’s relationships with high-quality contract manufacturers are also expected to lower our manufacturing costs, as well as improve supply chain efficiencies and economies of scale.

OPM specializes in creating digital and affiliate marketing content for Hyperion and will enhance our overall marketing strategy and audience reach. They also bring a large email distribution list of hundreds of thousands of potential customers with a new affiliate marketing channel. OPM also produces engaging digital content such as educational videos and newsletters.

OPM creates and promotes original content in the health and wellness space. Rather than relying on pharmaceutical and specialized medicine, OPM's content is produced by certified health and wellness professionals who focus on holistic and traditional approaches. The content is a combination of online and offline books, videos, podcasts, DVDs and newsletters that are distributed through email, public


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websites, secure websites and physical mail delivery. The primary marketing method is to advertise the content to a house file of consumers that OPM has developed over the years through opt-in marketing and newsletter subscriptions. The house file is actively managed to ensure online customers who positively opt-in and engage with OPM emails are receiving marketing materials. The secondary method of marketing OPM content is through affiliate partnerships with other online content producers who share OPM content with their positively managed opt-in only house files. This reciprocal email marketing approach eliminates any actual or perceived unwanted emails.

The planned acquisition of Hyperion and OPM is expected to add approximately 14 employees, who would continue to work out of the existing facilities in Lexington, Virginia.

We expect these two synergistic and accretive acquisitions to accelerate and support our growth and expand our market reach. Our natural heart and brain health formulations are perfect for cross selling or private labeling with Green Valley products, such as their stem cell restore formulation that are sold across various marketing channels. Likewise, Green Valley sales would benefit from our established marketing channels, which includes subscription-based direct-to-consumer, national grocery stores, and a strong presence on Amazon.

On a pro forma basis upon the closing of the acquisitions, we would generate over $12 million in annualized gross revenue, including significant recurring revenue being generated by subscriptions. The anticipated positive cash flow would fund future revenue growth from new product introductions and market expansion, as well as other potential strategic acquisitions.

The completion of the acquisitions is subject to the following material closing conditions, and there can be no assurance that the transactions will be completed as described:

·we will have entered into a new lease agreement for at least a twelve-month period at the current Hyperion and OPM locations; 

·a key employee of Hyperion and OPM will have entered into a consulting agreement with us; 

·our independent auditor will have completed an audit of the financial statements of Hyperion and OPM; 

·we will have closed on one or more rounds of financing for an aggregate amount of no less than $4,000,000, of which at least $250,000 will be from selling parties to the transaction; and 

·we will have commenced trading, or been approved to commence trading, on either the Nasdaq or the NYSE American Exchange. 

Summary of Risk Factors

There are a number of risks related to our business, this offering and our common stock that you should consider before you decide to participate in this offering. You should carefully consider all the information presented in the section titled “Risk Factors” in this prospectus. Some of the principal risks related to our business include the following:


7



·We rely on a single supplier relationship for licensing and manufacturing, and the termination of that agreement could have material effect on the cost of our products and the manufacturing of our finished goods. 

·We have a limited operating history in our current business, we are not profitable, and we do not expect to be profitable in the near future. There is no assurance our future operations will result in revenues sufficient to obtain or sustain profitability. If we cannot generate sufficient revenues to operate profitably, we may suspend or cease operations. 

·We received a warning letter from the FDA in November 2022 regarding one of our products. 

·Our success is linked to the size and growth rate of the vitamins, minerals and supplements market and an adverse change in the size or growth rate of that market could have a material adverse effect on us; 

·We expect to incur substantial costs and devote substantial time to the integration of Hyperion and OPM, which could have a negative impact on our operating results; 

·Our success depends on our ability to maintain the value and reputation of our brands; 

·We may fail to attract, acquire or retain customers at our current or anticipated future growth rate, or may fail to do so in a cost-effective manner, which would adversely affect our business, financial condition and results of operations; 

·If we are unable to anticipate customer preferences and successfully develop new and innovative products in a timely manner or effectively manage the introduction of new or enhanced products, then our business may be adversely affected; 

·We are highly dependent upon consumers’ perception of the safety, quality, and efficacy of our products as well as similar products distributed by other companies in our industry, and adverse publicity and negative public perception regarding particular ingredients or products or our industry in general could limit our ability to increase revenue and grow our business; 

·We face intense competition from competitors that are larger, more established and that possess greater resources than we do, and if we are unable to compete effectively, we may be unable to gain sufficient market share to sustain profitability; 

·Because we depend on outside suppliers with whom we do not have long-term agreements for raw materials, we may be unable to obtain adequate supplies of raw materials for our products at favorable prices or at all, which could result in product shortages and back orders for our products, with a resulting loss of sales and profitability; 

·A disruption in the service, a significant increase in the cost of our primary delivery and shipping services for our products or a significant disruption at shipping ports could adversely affect our business; 

·We will require additional financing in the future, and we can provide no assurance that such funding will be available on terms that are acceptable to us, or at all. 


8



·We are dependent upon our lenders for financing to execute our business strategy and meet our liquidity needs, and the lack of adequate financing could negatively impact our business; 

·We and our suppliers are subject to numerous laws and regulations that apply to the manufacturing and sale of nutritional supplements, and compliance with these laws and regulations, as they currently exist or as modified in the future, may increase our costs, limit or eliminate our ability to sell certain products, subject us or our suppliers to the risk of enforcement action, or otherwise adversely affect our business, results of operations and financial condition; and 

·Our success is dependent on the accuracy, reliability, and proper use of sophisticated and dependable information processing systems and management information technology and any interruption in these systems could have a material adverse effect on our business, financial condition and results of operations. 

These and other risks are more fully described in the section titled “Risk Factors” in this prospectus. If any of these risks actually occurs, our business, financial condition, results of operations, cash flows and prospects could be materially and adversely affected. As a result, you could lose all or part of your investment in our common stock.

As used in this prospectus, the term “success” generally means (unless the specific context requires otherwise) our ability to establish and grow our brand, scale our manufacturing, marketing and sales activities, integrate acquired products or internally develop new products, grow our revenues and, ultimately, establish cash flow positive and profitable operations.


9



The Offering

Shares of Common Stock to be offered by us:

[·] shares ([·] shares if the underwriters exercise their over-allotment option in full to purchase shares of Common Stock at the offering price), based on an assumed offering price of $[·] per share.

Shares of Common Stock outstanding immediately before this Offering:

3,451,724 shares.

Shares of Common Stock outstanding immediately after this Offering:

[·] shares ([·] shares if the underwriters exercise their over-allotment options in full to purchase [·] shares of Common Stock at the offering price), based on an assumed offering price of $[·] per share, and assuming no exercise of any Underwriters’ Warrants.

Assumed public offering price:

$[·] per share. The actual public offering price may be at, above or below such assumed public offering price and will be determined at pricing based on, among other factors, the closing bid price of the Common Stock on the effective date of this registration statement. See “Underwriting — Determination of Public Offering Price” for additional information.

Option to purchase additional shares of Common Stock:

We have granted to the underwriters the option, exercisable for 45 days from the date of this prospectus, to purchase up to [·] additional shares of Common Stock to cover over-allotments, if any.

Underwriters’ Warrants:

The registration statement of which this prospectus forms a part also registers for sale up to an aggregate of [·] shares of Common Stock (based on an assumed public offering price of $[·] per share) underlying the Underwriter’s Warrants as a portion of the underwriting compensation payable to the underwriters in connection with this offering. The Underwriters’ Warrants will be exercisable at any time, and from time to time, in whole or in part, after the closing of this Offering until the fifth anniversary of the date of the commencement of sales of the Shares issued in connection with this Offering at an exercise price of $[·] per share (110% of the public offering price per share of Common Stock). See “Underwriting —Underwriters’ Warrants” for a more detailed description of the Underwriters’ Warrants.

Use of Proceeds:

We estimate that the net proceeds from the sale of our Common Stock in this Offering will be approximately $[·] million, based on an assumed public offering price of $[·] per share, and assuming the underwriters do not exercise their option to purchase additional shares of Common Stock and no exercise of Underwriters’ Warrants.

We intend to use $3.1 million of the net proceeds from this Offering to complete the acquisition of Hyperion, L.L.C. and Online Publishing & Marketing, LLC. The remainder of the proceeds will be used for working capital and general corporate purposes. See the section entitled “Use of Proceeds.”


10



Reverse Stock Split:

We anticipate that we will effect a reverse stock split of the outstanding shares of Common Stock at a ratio between 1-for-25 and 1-for-150 on or after the date on which the registration statement of which this prospectus forms a part is declared effective by the SEC, but in no event later than the pricing of this Offering. Unless otherwise noted, the share and per share information in this prospectus, other than in the historical financial statements and related notes included elsewhere in this prospectus, assumes the effectiveness of a 1-for-100 reverse stock split of our outstanding shares of Common Stock.

Risk Factors:

An investment in our shares of Common Stock offered hereby is speculative and involves a high degree of risk. You should read the section entitled “Risk Factors” beginning on page 12 of this prospectus for a discussion of factors you should consider carefully before deciding to purchase our shares of Common Stock offered hereby.

Proposed Nasdaq symbol and trading:

Our Common Stock is presently quoted on the OTCQB Market. We have applied to list our Common Stock on Nasdaq. We cannot guarantee that we will be successful in listing our Common Stock on Nasdaq. We will not consummate this Offering unless our Common Stock is approved for listing on Nasdaq.

The number of shares of our Common Stock to be outstanding before this Offering is based on 3,451,724 shares of our Common Stock outstanding as of April 11, 2023, giving effect to the anticipated reverse stock split of our outstanding Common Stock on a 1-for-100 basis, and assuming no exercise of the underwriters’ over-allotment option and no exercise of any Underwriters’ Warrants, and includes or excludes the following, as applicable:

·excludes [·] shares of Common Stock

$0.10 issuable upon the closing of the acquisition of Hyperion, L.L.C. and Online Publishing & Marketing, LLC. The number of shares of Common stock will be equal to $1,250,000 based on a 30% premium to the price paid per share of Common Stock in this Offering, but in no event more than ninety percent (90%) of the volume weighted average price for our common stock for the ninety (90) trading days up to and including the trading day immediately before the day the price is finally determined for securities sold in this Offering; 

·excludes 168 shares of Common Stock issuable upon the exercise of outstanding warrants with an exercise price of $6,250.00 per share; 

·excludes 75,000 shares of Common Stock issuable upon the exercise of outstanding warrants with an exercise price of $5.00 per share; 

·excludes 65,000 shares of Common Stock issuable upon the exercise of outstanding warrants with an exercise price of $7.50 per share; 

·excludes 104,500 shares of Common Stock issuable upon the exercise of outstanding options with an exercise price of $5.00 per share; and 

·excludes 157,750 shares of Common Stock represented by Restricted Stock Units and 360,000 shares of Common Stock represented by Restricted Stock Awards. 

 

DateThe actual number of Prospectus: Subjectshares of our Common Stock to Completionbe outstanding before this Offering will be determined based on the actual public offering price and the final reverse stock split ratio, as determined by the Board.


11



SUMMARY FINANCIAL INFORMATION

 

 

As of and for the Year Ended December 31,

 

As of and for the Year Ended December 31,

Healthy Extracts Inc.

 

2022

(audited)

 

2021

(audited)

 

 

 

 

 

Statement of Operations Data:

 

 

 

 

 

 

 

 

 

Revenue

$

2,251,469

$

1,676,598

Net operating income (loss)

$

(911,589)

$

(1,889,178)

Net income (loss)

$

(983,121)

$

(1,987,122)

 

 

 

 

 

 

 

 

 

 

Balance Sheet Data:

 

 

 

 

 

 

 

 

 

Cash

$

65,651

$

222,098

Current assets

$

1,990,572

$

2,313,404

Total assets

$

2,781,118

$

3,029,579

 

 

 

 

 

Current liabilities

$

902,788

$

558,841

Total liabilities

$

902,788

$

558,841

Accumulated deficit

$

(15,926,742)

$

(14,943,620)

 

 

 

 

 

Net loss per common share – basic and diluted

$

 

[·]

$

[·]


12



SUMMARY PRO-FORMA FINANCIAL INFORMATION

 

 

 

Healthy Extracts Inc.

 

As of and for the Year

Ended December 31,

 

As of and for the Year Ended December 31,

 

As of and for the Year Ended December 31,

Hyperion, L.L.C.

OP&M

 

2022

(audited)

 

2021

(audited)

 

2020

(audited)

 

 

 

 

 

 

 

Statement of Operations Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

13,058,749

$

12,837,096

$

13,025,222

Net operating income (loss)

$

(813,781)

$

10,089,485

$

9,161,648

Net income (loss)

$

(861,178)

$

(1,328,145)

$

(1,130,008)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

$

2,515,651

$

2,459,584

$

2,603,992

Current assets

$

5,388,677

$

5,609,481

$

5,897,871

Total assets

$

9,709,709

$

6,484,902

$

6,720,442

 

 

 

 

 

 

 

Current liabilities

$

2,581,379

$

1,050,058

$

749,488

Total liabilities

$

2,581,379

$

1,050,058

$

749,488

Accumulated equity (deficit)

$

(15,926,742)

$

(11,979,514)

$

(9,839,370)

Total stockholders’ equity

 

7,128,330

 

5,434,844

 

5,970,954

 

 

 

 

 

 

 

Net loss per common share – basic and diluted

$

 

0.003

$

0.004

$

0.005

On January 13, 2023, we entered into the Acquisition Agreement to acquire Hyperion and OPM in exchange for $3,050,000 in cash and the issuance of $1,250,000 in shares of our common stock (approximately 25,000,000 shares valued at $0.05), to the former owner of Hyperion and OPM, resulting in Hyperion and OPM becoming a wholly-owned subsidiaries of our company.

For financial accounting purposes, the acquisition of Hyperion and OPM by us (referred to as the “Merger”) will be valued under the purchase price method. Accordingly, financial statements presented following the Merger will be viewed as being fairly valued as of January 13, 2023 or the date the acquisition is closed, and represent the operations of our company prior to the Merger. We expect to continue to operating Hyperion and OPM under the names Green Valley Natural Solutions and Online Publishing and Marketing.

 

Prior to this Offering, no public marketthe Merger, all the companies involved in the Merger had fiscal year ends of December 31, respectively. The accompanying audited pro forma condensed combined financial statements are prepared based on a December 31 year end, while the period ending of September 30, 2022 has existedbeen prepared as unaudited pro forma condensed combined financial statements. The audited and unaudited pro forma condensed combined balance sheet at September 30, 2022, December 31, 2021, and December 31, 2020 combines the historical consolidated balance sheets of Hyperion, OPM and our company, giving effect to the Merger as if it had been consummated on December 31, 2022. The audited pro forma condensed combined statement of operations for the common stockperiod ended December 31, 2022 combines the historical consolidated statements of GREY CLOAK TECH INC. (GCT)  Upon completionincome of Hyperion, OMP, and our company, giving effect to the Merger as if it had occurred on January 1, 2022. The audited pro forma combined financial data should be read in


13



connection with the notes to our audited pro forma condensed combined financial statements and our historical audited consolidated financial statements and the related notes year ended December 31, 2022 and 2021. 

The audited and unaudited pro forma condensed combined financial statements have been prepared for informational purposes only. The historical financial information has been adjusted to give effect to pro forma events that are: (1) directly attributable to the Merger and (2) factually supportable and reasonable under the circumstances.

The audited pro forma adjustments represent management’s estimates based on information available at this Offering, we will attempttime. The audited pro forma combined financial statements are not necessarily indicative of what the financial position or results of operations actually would have been had the acquisition been completed at the dates indicated. In addition, the audited pro forma combined financial statements do not purport to haveproject the shares quoted onfuture financial position or operating results of the Overconsolidated company. The audited pro forma combined financial statements do not give consideration to the Counter-Bulletin Board ("OTCBB"), operated by FINRA (Financial Industry Regulatory Authority).  There is no assuranceimpact of possible revenue enhancements, expense efficiencies, future underwriting decisions or changes in the book of business that may result from the Shares will ever be quoted on the OTCBB.  To be quoted on the OTCBB, a market maker must apply to make a marketacquisition. 


14



RISK FACTORS

Any investment in our common stock.  As of the date of this Prospectus, we have not made any arrangement with any market makers to quote our shares.

This prospectus covers the resale from time to time by the selling stockholders of up to an aggregate of 6,600,000 common shares. The companystock is registering in this prospectus 3,300,000 common sharesspeculative and 3,300,000 common shares underlying the warrants to purchase common stock. The company issued 3,300,000 common shares and, 3,300,000 common stock purchase warrants to investors that invested in the Company’s Regulation D Rule 506(b) Private Placement Memorandum, dated January 15 2015. The company issued the common stock purchase warrants to the investors who purchased the 3,300,000 common shares on a “one for one” basis. For each share of common stock purchased the investor received one warrant, each warrant entitles the holder to purchase one share of common stock. There are a total of 3,300,000 warrants issued.

The selling shareholders will sell their shares at a fixed price per share of $0.10 for the duration of this Offering, or until our shares are quoted on the OTCBB, and thereafter at prevailing market prices or in privately negotiated transactions. We will not receive any proceeds from the sale of the 3,300,000 shares sold by the selling shareholders.  The company will receive $1,650,000 if all the 3,300,000 warrants are exercised at .50 cents per share. This offering will terminate upon the earliest of (i) such time as all of the common stock has been sold pursuant to the registration statement or (ii) 365 days from the effective date of this Prospectus.

GREY CLOAK TECH INC. is a development stage company and currently has limited business operations.  Any investment in the Shares offered herein involves a high degree of risk.risk. You should only purchase Shares if you can afford a complete loss of your investment. 

We are an "emerging growth company" as defined inconsider carefully the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") and, as such, may electrisk factors related to comply with certain reduced public company reporting requirements for future filings.

THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK.  BEFORE INVESTING, YOU SHOULD CAREFULLY READ THIS PROSPECTUS AND, PARTICULARLY, THE RISK FACTORS SECTION, BEGINNING ON PAGE 8.

Neither the U.S. Securities and Exchange Commission ("SEC") nor any state securities division has approved or disapproved these securities, or determined if this Prospectus is current, complete, truthful or accurate.  Any representation to the contrary is a criminal offense.

3
(table of contents)

TABLE OF CONTENTS

Page
Summary of Prospectus5
General information about our Company5
The Offering7
Risk Factors8
Risks associated with GREY CLOAK TECH INC.8
Risks associated with this Offering9
Risks associated with Our Business and Industry15
Use of Proceeds21
Determination of Offering Price21
Dilution21
Selling Security Holders21
Plan of Distribution25
Shares offered by the selling shareholders25
Terms of the Offering26
Offering proceeds27
Description of Securities to be Registered27
Interest of Named Experts and Counsel27
Information with Respect to the Registrant27
Description of business32
Description of property32
Legal proceedings32
Market price of and dividends of the  registrant's common equity and related stockholder matters32
Financial statements and selected financial data33
Management's discussion and analysis of financial condition and results of operations35
Changes in and disagreements with accountants on accounting and financial disclosure35
Quantitative and qualitative disclosures about market risk35
Directors and executive officers35
Executive compensation38
Security ownership of certain beneficial owners and management39
Certain relationships and related transactions39
Material Changes40
Incorporation of Certain Information by Reference40
Disclosure of Commission Position on Indemnification for Securities Act Liabilities40
Financial Statements41

Until _____, 2015, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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(table of contents)

SUMMARY OF PROSPECTUS

You should read the following summaryour business described below, together with the more detailed businessother information and financial statements and related notes that appear elsewherecontained in this Prospectus.  In this Prospectus, unless the context otherwise denotes, referencesprospectus, before you decide to "we," "us," "our", “GCT"buy our common stock. There are numerous and "Company" are to GREY CLOAK TECH INC.

A Cautionary Note on Forward-Looking Statements

This Prospectus contains forward-looking statements, which relate to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these terms or other comparable terminology.  These statements are only predictions and involvevaried risks, known and unknown, risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors," that may causeprevent us from achieving our industry's actual results, levelsgoals. If one or more of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction ofrisks actually occurs, our business actualwill suffer, and as a result our financial condition or results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

General Information about Our Company

GREY CLOAK TECH INC. was incorporated in the State of Nevada on December 19, 2014 and our fiscal year end is December 31. The Company was formed to engage in the business of cloud based software to detect advertising fraud on the internet.

The Company's website is currently under development.


We are a development stage company, and have not generated any revenues since inception, we have $322,924 in cash as of January 31, 2015

Where you can find us:

10300 W. Charleston

Las Vegas, NV 89135

702-201-6450

During the software development stage, the company will not be paying any salaries and there are no employment agreements. Mr. Covely the Company’s Director, President and Chief Technology Officeroperations will be devoting between 20 and 25 hours per week on software development. Mr. Bossung,adversely affected. In this case, the Company’s Director, Secretary and CFO will be spending between 20 and 25 hours per week on company operations and will be receiving $4500 dollars per month as a consulting payment. Upon completion of the software the Company will enter into a formal employment agreement with Mr. Covely for his full time employment. The intended date for Mr. Covely’s full time employment is April 1 2015 and his employment contract will be for 2 years at $9,000 per month. Upon completion of the software the Company will enter into a formal employment agreement with Mr. Bossung for his full time employment. The intended date for Mr. Bossung full time employment is April 1 2015 his employment will be for 2 years at $8000 per month. Upon completion of the software the Company intends to enter into a formal employment agreement with Mr. Silver, the company’s Chief Marketing Officer, for his full time employment. The intended date for Mr. Silver’s full employment is April 1 2015 his employment will be for 2 years at $7000 per month. During the period from inception

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(table of contents)

(December 19, 2014) to January 31, 2015 the Company paid $9,000 to a company owned by William Bossung an officer and director for consulting fees, which is included in general and administrative expenses on the accompanying statement of operations.  We feel that the time provided by management is sufficient to develop the business.  We do not currently have any contracts or agreements in place with any outside sales or development contractors.

We believe it is advantageous to go public at this time, due to the potential to raise additional funds in the capital markets. 

As a public company we would have access to more financing options, as investors generally have greater liquidity to exit their investment.  However, there are significant disadvantages to going public, including the possibility that liquidity in our market will not occur, there is no guarantee that we will be able to secure financing at rates favorable to us, and increased costs to be a public company.  We anticipate this offering will cost $25,000 and we will incur $10,000 in professional fees to remain public in the next 12-months.

As of January 31 2015, we had $322,924 cash on hand.

At present, we have enough cash on hand to fund the completion of our software development, initial marketing efforts general operating expenses, legal expenses and accounting fees. In order to proceed with our business plan, we will have to find alternative sources of funds, like a second public offering, a private placement of securities or loans from our officer or third parties (such as banks or other institutional lenders).  Equity financing could result in additional dilution to then existing shareholders. If we are unable to meet our needs for cash from either money that we raise from our equity, or other alternative sources such as debt financing, we may be unable to continue to maintain, develop or expand our operations. 

This is our initial public offering.  We are registering a total of 6,600,000 sharesprice of our common stock for sale by the selling shareholders. The company is registeringcould decline, and you could lose all or part of your investment in this prospectus 3,300,000our common shares and 3,300,000 common shares underlying the warrants to purchase common stock. The company issued 3,300,000 common shares and, 3,300,000 common stock purchase warrants to investors that invested in the Company’s Regulation D Rule 506(b) Private Placement Memorandum, dated January 15 2015. The company issued the common stock purchase warrants to investors on a “one for one” basis. For each share of common stock purchased the investor received one warrant to purchase one share of common stock. Each warrant entitles the holder to purchase one share of common stock. There are a total of 3,300,000 warrants issued. The selling shareholders will sell their shares at a fixed price per share of $0.10 until the securities are quoted for trading on the OTC Bulletin Board, or on a recognizable market or exchange, and thereafter at prevailing market prices or privately negotiated prices.The Company will not receive any proceeds from the sale of the 3,300,000 common shares that are being registered.

 

The company will receive $1,650,000 if all the 3,300,000 warrants are exercised at .50 cents per share.

We will not receive any proceeds from the sale of any of the 3,300,000 shares offered by the selling shareholders.  This offering will terminate upon the earliest of (i) such time as all of the common stock has been sold pursuantRisk Factors Related to the registration statement or (ii) 365 days from the effective date of this Prospectus.

Implications of Being an Emerging Growth Company

We are an "emerging growth company," as defined in Section 2(a) of the Securities Act of 1933, or the Securities Act, as modified by the Jumpstart Ourour Business Startups Act of 2012, or the JOBS Act.  As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

We could remain an "emerging growth company" for up to five years, or until the earliest of (a) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (b) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (c) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.

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(table of contents)

We are also considered a "smaller reporting company,"  If we are still considered a "smaller reporting company" at such time as we cease to be an "emerging growth company," we will be subject to increased disclosure requirements.  However, the disclosure requirements will still be less than they would be if we were not considered either an "emerging growth company" or a "smaller reporting company."

For more information, please see our Risk Factor entitled "As an "emerging growth company" under the jumpstart our business startups act (JOBS), we are permitted to rely on exemptions from certain disclosure requirements."

The Offering

Following is a brief summary of this Offering.  Please see thePlan of Distribution andTerms of the Offering sections for a more detailed description of the terms of the Offering.

Offering

Securities being OfferedAn aggregate of 6,600,000 shares of common stock: 3,300,000 common shares and 3,300,000 common shares underlying the warrants to purchase common stock, which are being offered by the selling shareholders. The selling shareholders offering will terminate upon the earliest of (i) such time as all of the common stock has been sold pursuant to the registration statement or (ii) 365 days from the effective date of this prospectus.
Price per shareThe selling shareholders will sell their shares at a fixed price per share of $0.10 for the duration of this Offering, or until the securities are quoted for trading on the OTC Bulletin Board or on a recognizable market or exchange, and thereafter at prevailing market prices or privately negotiated prices.

Securities Issued Outstanding

14,306,666 shares of common stock are issued and outstanding.
Offering Proceeds

The Company will not receive any proceeds from the sale of the 3,300,000 common shares that are being registered. The company will receive $1,650,000 if all the 3,300,000 warrants are exercised at .50 cents per share.

Registration costsWe estimate our total offering registration costs to be $25,000.  This includes pay for legal expenses, accounting fees, transfer agent costs, filing fees, printing, and correspondence with our shareholders.

Our officers and directors, control persons and/or affiliates do not intend to purchase any Shares in this Offering.  Our executive officers and directors will own 69.9% of our common stock.

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(table of contents)

RISK FACTORS

An investment in these securities involves a high degree of risk and is speculative in nature.  In addition to the other information regarding the Company contained in this Prospectus, you should consider many important factors in determining whether to purchase Shares.  Following are what we believe are material risks related to the Company and an investment in the Company.

Risks Associated With GREY CLOAK TECH INC.:

 

We lackrely on a single supplier relationship for licensing and manufacturing, and the termination of that agreement could have material effect on the cost of our products and the manufacturing of our finished goods.

In August 2021, we signed an exclusive U.S. and Canada licensing and manufacturing agreement with Gelteq, a developer of ingestible gel technology, under which we agreed to develop and manufacture an advanced oral delivery system for our plant-based heart, immune and brain health formulations. Through this agreement we secured the exclusive rights to use Gelteq’s gelification process in the U.S. and Canada for the development and marketing of natural ingestible gels that contain our Citrus Bergamot or UBN ingredients. In the event either party terminates that agreement, our ability to obtain and manufacture our products will be interrupted, and we may not be able to find a replacement at the same cost.

We have a limited operating history in our current business, we are not profitable, and have no profits which we do not expect to continue intobe profitable in the near future. There is no assurance our future operations will result in continued profitable revenues.revenues sufficient to obtain or sustain profitability. If we cannot generate sufficient revenues to operate profitably, we may suspend or cease operations.


We were incorporated on December 19, 2014, but we have changed our business focus with the acquisition of BergaMet in 2019 and weUBN in 2020.  We have not fully developed our proposedcurrent business operations and have not generated any revenuesyet to date.  Wegenerate significant revenue from such operations. Our ability to continue as a going concern is dependent upon our ability to further establish and then grow our business and to obtain adequate financing in order to reach profitable levels of operations. In that regard we have no operatingproven history upon which an evaluation of our future successperformance, earnings or failure can be made.  success. 

Our net loss sincefrom inception to JanuaryDecember 31, 2014,2022, was $26,309($15,926,742). Based on our cash position of $65,651 as of December 31, 2022, we have a pressing need to raise additional capital from the sale of our stock or debt (including but also following this offering). Such funding may not be available, or may be available only on terms which most is for professional fees in connection with this Offering.  are not beneficial and/or acceptable to us. 

Our ability to maintainachieve profitability and positive cash flow in the future is dependent upon:upon our ability to attract new customers who will buy our nutritional supplement products and services, and our ability to generate sufficient revenue through the sale of those products and services.

 

·Our ability to attract new customers who will buy our services,
·Our ability to generate sufficient revenue through the sale of our services.

Based upon current plans, we expect to incur minimal operating profits or losses in future periods because we will be incurring expenses that may exceed revenues. We cannot guarantee that we will be successful in generating sufficient revenues in the future. In the event the Company is unable to generate sufficient revenues, it may be required to seek additional funding.  Such funding may not be available, or may not be available on terms which are beneficial and/or acceptable to the Company.  In the event the Companywe cannot generate sufficient revenues and/or secure additional financing, the Companywe may be forced to cease operationsoperations.


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Our success is linked to the size and investors will likely lose some or allgrowth rate of their investmentthe vitamin, mineral and supplement market and an adverse change in the Company.

We have no clientssize or customers at this time and even when we do, there is no assurancegrowth rate of that we will make a profit.

We have no clients or customers at this time.  If we are unable to attract enough customers/clients to purchase services it will have a negative effect on our ability to continue to generate sufficient revenue from which we can operate or expand our business.  The lack of sufficient revenues will have a negative effect on the ability of the Company to continue operations and it could force the Company to cease operations.

General domestic and international economic conditionsmarket could have a material adverse effect on our operating results and common stock price and our ability to obtain additional financing.us.

 

As a resultAn adverse change in size or growth rate of the current economic downturnvitamin, mineral and macro-economic challenges currently affecting the economy of the United States and other parts of the world, some of the consulting services that we may desire to offer to clients could suffer delays or postponement until the economy strengthens, which could in turn effect our ability to obtain additional financing. We anticipate our revenues to be derived from the sale of our services, which could be suffer if customers are suffering from the economic downturn. During weak economic conditions, we may not experience any growth if we are unable to obtain financing to enable us tosupplement market and offer our services. If the domestic and/or international economy were to weaken, the demand for any consulting services we may desire to offer could decline, which could have a material adverse effect on us. Underlying market conditions are subject to change based on economic conditions, consumer preferences and other factors that are beyond our control, including media attention and scientific research, which may be positive or negative. In addition, the vitamin, mineral and supplement market is heavily saturated, and the demand for and market acceptance of new products and services in the market is uncertain. While we predict that the overall vitamin, mineral and supplement market will continue to grow, it is difficult to predict the future growth rates, if any, to the size of our market. We cannot assure you that our market will continue to develop, that the public’s interest in personalized health and wellness will continue, or that our products and services will become widely adopted. If our market does not further develop, develops more slowly than expected, or becomes saturated with competitors, or if our products and services do not achieve market acceptance, our business, financial condition, and operating results and stock price.could be adversely affected.

 

We are highly dependent upon consumers’ perception of the safety and quality of our products and if we fail to maintain adequate quality standards for our products and services, or if our products become subject to regulatory investigations, our business may be adversely affected and our reputation harmed.

Our products, including nutritional supplements, may contain defects or may not perform as intended. These defects could result in a product recall, market withdrawal, negative publicity or other events that would result in harm to our reputation, loss of customers or revenue, health and safety issues for our customers, product liability claims, refunds, order cancellations, or lack of market acceptance of our products and services. Any such defects, errors, or vulnerabilities would require us to take remedial action, which could require us to allocate significant research and development and customer support resources to address any such problems. Further, if we make acquisitions, we may encounter difficulties in integrating acquired technologies into our services and in augmenting those technologies to meet the quality standards that are consistent with our brand and reputation.

Our agreements with customers, distribution partners, and other third parties may include indemnification provisions under which we agree to indemnify or otherwise be liable to them for losses suffered or incurred in connection with any such defects or errors of our products or services, or other liabilities relating to or arising from our products or services. Some of these indemnity agreements provide for uncapped liability for which we would be responsible, and some indemnity provisions survive termination or expiration of the applicable agreement. Large indemnity payments could harm our business, financial condition, and results of operations. Although we attempt to contractually limit our liability with respect to such indemnity obligations, we are not always successful and may still incur substantial liability related to such claims. In addition, although we carry general liability insurance, our insurance against this liability may not be adequate to cover a potential claim, and such coverage may not be available to us on acceptable terms, or at all. Any dispute with a customer or other third party with respect to such obligations could have adverse effects on our relationship with such customer or other third party, our reputation, or demand for our platform. Any of the foregoing could adversely affect our business, financial condition, and results of operations.

Negative public perception may also arise from regulatory actions or investigations, regardless of whether those investigations involve us. We are highly dependent upon consumers’ perception of the safety and quality of our products as well as similar products distributed by other companies. Thus, the mere publication of reports asserting that such products may be harmful or adverse public reports or other media


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attention regarding the safety, efficacy and quality of nutritional supplements in general, or our products specifically, or associating the consumption of nutritional supplements with illness, questioning the benefits of nutritional supplements in general, or our products specifically, or claiming that such products do not perform as marketed, labeled and advertised, could have a material adverse effect on us, regardless of whether these reports are scientifically supported. Any such adverse public reports or other media attention could arise even if the adverse effects associated with such products resulted from consumers’ failure to consume such products as directed and the content of such public reports and other media attention may be beyond our control. Publicity related to nutritional supplements may also result in increased regulatory scrutiny of our industry. Adverse publicity may have a material adverse effect on our business, financial condition, results of operations and cash flows. There can be no assurance of future favorable scientific results and media attention or of the absence of unfavorable or inconsistent findings.

Our success depends on our ability to maintain the value and reputation of our brands.

We believe that our customers associate our name with quality products and services and that the strength of our brands is important to attracting and retaining customers. We rely on our trusted brands to differentiate our products and services from those of our competitors have significantly greaterin a crowded and saturated market for nutritional supplements. Maintaining, protecting, and enhancing our brands depends largely on the success of our marketing efforts, ability to provide consistent, high-quality products, services, features, content and support. We believe that the importance of our brands will increase as competition further intensifies. Accordingly, brand promotion activities aimed at bolstering our brands may require substantial expenditures. Our brands could be harmed if we fail to achieve these objectives or if our public image were to be tarnished by negative publicity. Our brands could be harmed if we fail to achieve these objectives or if our public image were to be tarnished by negative publicity. Our brands could also be harmed if any of our influencers receive negative publicity, or if our products and services do not perform as intended.

We may fail to attract, acquire or retain customers at our current or anticipated future growth rate, or may fail to do so in a cost-effective manner, which would adversely affect our business, financial condition and results of operations.

Our continued growth depends, in part, on our ability to attract, acquire and retain customers in a cost-effective manner. Numerous factors, however, may impede our ability to attract, acquire or retain customers, including our failure to attract, effectively train, retain, and motivate sales and marketing personnel, our failure to educate customers and health professionals about the benefits of our products, our failure to develop or expand relationships with our suppliers, our inability to convert initial adoption into ongoing recurring revenue and our failure to provide customer support once products are delivered.

We rely on internet search engines, lead generators, and social networking sites to help drive traffic to our website and the sale of our products, and if we fail to appear prominently in the search results or fail to drive traffic through paid advertising, our traffic and product sales would decline and our business would be adversely affected.

We depend in part on internet search engines (such as Google), lead generators, and social networking sites (such as Facebook) to drive traffic to our website and the sale of our products. Our ability to maintain and increase the number of visitors directed to our website is not entirely within our control. Our competitors may increase their search engine optimization efforts and outbid us for placement on various sites or search terms on various search engines, resulting in their websites receiving a higher search result page ranking than ours. Additionally, internet search engines could revise their methodologies in a way that would adversely affect our search result rankings. If internet search engines modify their search algorithms in ways that are detrimental to us, if sites refuse to display any or all of our products in certain geographic markets, or if our competitors’ efforts are more successful than ours, overall growth in our


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customer base could slow or our customer base could decline. Our website has experienced fluctuations in search result rankings in the past, and we anticipate similar fluctuations in the future. Any reduction in the number of users directed to our website through internet search engines, lead generators, or social networking sites could harm our business and operating results.

Our success depends, in part, on our existing customers continuing to purchase our products. Our customers have no obligation to purchase our products, and in the normal course of business, some customers may decide to purchase less or none of our products. If we acquire fewer customers than expected, or fewer customers purchase our existing products or try our new products, then our business, financial condition and results of operations may be adversely affected. Our business depends on the effectiveness of our advertising and marketing programs, including the strength of our social media presence, to attract and retain customers.

Our business success depends on our ability to attract and retain customers. Our ability to attract and retain customers depends significantly on the effectiveness of our advertising and marketing practices. From time-to-time, we use the success stories of our customers, and utilize brand ambassadors, spokespersons and social media influencers, including in some cases celebrities, in our advertising and marketing programs to communicate on a personal level with consumers. Any actions taken by these individuals that harm their personal reputation or image, or their decision to stop using our services and products, could have an adverse impact on the advertising and marketing campaigns in which they are featured. We and our brand ambassadors, spokespersons and social media influencers also use social media channels as a means of communicating with customers. Unauthorized or inappropriate use of these channels could result in harmful publicity or negative consumer experiences, which could have an adverse impact on the effectiveness of our marketing in these channels. In addition, substantial negative commentary by others on social media platforms could have an adverse impact on our reputation and ability to attract and retain customers. If our advertising and marketing campaigns do not generate a sufficient number of customers, our business, financial condition and results of operations will be adversely affected.

If we are unable to anticipate customer preferences and successfully develop new and innovative products in a timely manner or effectively manage the introduction of new or enhanced products, then our business may be adversely affected.

Part of our success is our ability to innovate and introduce new products focused on our consumer demands. To maintain our success and increase our customer base, we must continue to develop products with differentiated benefits and anticipate and react to changing health professional and consumer demands in a timely manner. Our products and services are subject to changing consumer preferences that cannot be predicted with certainty. If we are unable to introduce new or enhanced products in a timely manner, or our new or enhanced products are not accepted by our customers, then our competitors may introduce competitive products faster than us, which could negatively affect our rate of growth. Moreover, our new products may not receive customer acceptance because preferences could shift rapidly to alternative nutritional supplements, and our future success depends in part on our ability to anticipate and respond to these changes. Failure to anticipate and respond in a timely manner to changing customer preferences could lead to, among other things, lower sales, pricing pressure, lower gross margins, and excess inventory levels. Even if we are successful in anticipating consumer preferences, our ability to adequately react to and address them will partially depend upon our continued ability to develop and introduce innovative, high-quality product offerings. Development of new or enhanced products and services may require significant time and financial investment, which could result in increased costs and a reduction in our profit margins.


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If we are unable to sustain pricing levels for our products, our business could be adversely affected.

The prices for our nutritional supplement products reflect their high quality, safety and benefits. If we are unable to sustain pricing levels for our products, whether due to competitive pressure or otherwise, then our gross profits could be reduced. Further, our decisions regarding the development of new products are based on assumptions about future pricing. If there is price compression in the market after these decisions are made, then it could lower our gross profits and have a negative effect on our results of operations.

We face intense competition from competitors that are larger, more established and that possess greater resources than we do.do, and if we are unable to compete effectively, we may be unable to gain sufficient market share to sustain profitability.

 

SomeNumerous manufacturers and distributors compete actively for consumers. There can be no assurance that we will be able to compete in this intensely competitive environment. In addition, nutritional supplements can be purchased in a wide variety of channels of distribution. These channels include mass market retail stores and the Internet. Because these markets generally have low barriers to entry, additional competitors could enter the market at any time. Private label products of our customers also provide competition to our products. Additional national or international companies may seek in the future to enter or to increase their presence in our distribution channels or the vitamin, mineral supplement market. Increased competition in either or both could have a material adverse effect on us.

Adverse economic conditions may harm our business.

Our business depends on global economic conditions. Unstable market conditions make it difficult for our clients and us to accurately forecast and plan future business activities, and could cause our customers to reduce or delay their spending with us. Economic downturns or unstable market conditions may cause customers to decrease their budgets, which could reduce spend on our products and adversely affect our business, financial condition and results of operations. As we explore new countries to expand our business, economic downturns or unstable market conditions in any of those countries could result in our investments not yielding the returns we anticipate.

Generally, the United States and other key international economies have been affected from time to time by falling demand for a variety of goods and services, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity and foreign exchange markets, bankruptcies, and overall uncertainty with respect to the economy, including with respect to tariff and trade issues. In particular, the economies of countries in Europe have been experiencing weakness associated with high sovereign debt levels, weakness in the banking sector, uncertainty over the future of the Eurozone and volatility in the value of the pound sterling and the Euro, including instability surrounding Brexit. We have operations, as well as current and potential new customers, throughout the United Kingdom and most of Europe. If economic conditions in the United Kingdom and Europe and other key markets for our platform continue to remain uncertain or deteriorate further, it could adversely affect our customers’ ability or willingness to subscribe to our platform, delay prospective customers’ purchasing decisions, reduce the value or duration of their subscriptions or affect renewal rates, all of which could harm our operating results.

Inflation or other changes in economic conditions that affect demand for nutritional supplements could adversely affect our revenue. Uncertainty about current global economic conditions poses a risk as consumers and businesses may postpone spending in response to tighter credit markets, negative financial news and/or declines in income or asset values, each of which could have a material negative effect on the demand for our products. Other factors that could influence demand include conditions in the residential


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real estate and mortgage markets, labor and healthcare costs, access to credit, consumer confidence and other macroeconomic factors affecting consumer spending behavior. These and other economic factors could have a material adverse effect on demand for our products and on our financial condition and operating results.

Overall tightening of the labor market, increases in labor costs or any possible labor unrest may adversely affect our business and results of operations.

Our business, particularly the manufacturing of our products, requires a substantial number of personnel. Any failure to retain stable and dedicated labor by us may lead to disruption to our business operations, including the manufacturing of our products. Although we have not experienced any material labor shortage to date, we have observed an overall tightening and increasingly competitive labor market. We have experienced, and expect to continue to experience, increases in labor costs due to increases in salary, social benefits and employee headcount. We compete with other companies in our industry and other labor-intensive industries for labor, and we may not be able to offer competitive remuneration and benefits compared to them. If we are unable to manage and control our labor costs, our business, financial condition and results of operations may be materially and adversely affected.

Our operating results could be adversely affected if we are unable to accurately forecast customer demand for our products and services and adequately manage our inventory.

To ensure adequate inventory supply, we must forecast inventory needs and expenses and place orders sufficiently in advance with our suppliers, based on our estimates of future demand for particular products and services. Failure to accurately forecast our needs may result in manufacturing delays or increased costs. Our ability to accurately forecast demand could be affected by many factors, including changes in customer demand for our products and services, changes in demand for the products and services of our competitors, have significantly greater financialwidespread acceptance of personalized health recommendations and marketing resourcesnutritional supplements, unanticipated changes in general market conditions, and the weakening of economic conditions or consumer confidence in future economic conditions. This risk may be exacerbated by the fact that we may not carry a significant amount of inventory and may not be able to satisfy short-term demand increases. If we fail to accurately forecast customer demand, we may experience excess inventory levels or a shortage of products available for sale. Inventory levels in excess of customer demand may result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices, which would cause our gross margins to suffer and could impair the strength and our brand. Further, lower than do we. There are no assurances thatforecasted demand could also result in excess manufacturing capacity or reduced manufacturing efficiencies, which could result in lower margins. Conversely, if we underestimate customer demand, our effortssuppliers and manufacturers may not be able to competedeliver products to meet our requirements or we may be subject to higher costs in order to secure the necessary production capacity. An inability to meet customer demand and delays in the marketplace will be successful.

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Because mostdelivery of our competitors are not publicly reporting companies, theirproducts to our customers could result in reputational harm and damaged customer relationships and have an adverse effect on our business, financial condition, and operating expenses are considerably lower.

Most of the companies with which we will be competing are not public companies.  GCT's responsibility to file reports with the SEC upon effectiveness of this registration statement means our basic operating expenses are much higher than those of our competitors.  The added expense of being a public reporting company will make it more difficult for us to compete.results.

 

BecauseWe acquire ingredients for our officersproducts from foreign suppliers and directorsmay be negatively affected by the risks associated with international trade and importation issues.

We acquire ingredients for a number of our products from suppliers outside of the United States. Accordingly, the acquisition of these ingredients is subject to the risks generally associated with importing raw materials, including, among other factors, delays in shipments, changes in economic and political conditions, quality assurance, health epidemics affecting the region of such suppliers (including the COVID-19 pandemic), nonconformity to specifications or laws and regulations, tariffs, trade disputes and foreign currency fluctuations (particularly as it relates to the tariffs currently imposed on certain products originating from China). While we inspect 100% of the lots received from third party suppliers,


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we cannot assure you that raw materials received from suppliers or finished products from manufacturers outside of the United States will conform to all specifications, laws and regulations or our internal standards. There have in the past been quality and safety issues in our industry with certain items imported from overseas. We may incur additional expenses and experience shipment delays due to preventative measures adopted by the U.S. governments, our suppliers and our company.

Ingredient and packaging costs are volatile and may rise significantly, which may negatively impact the profitability of our business.

Costs of ingredients and packaging are volatile and can fluctuate due to conditions that are difficult to predict, including global competition for resources, fluctuations in currency and exchange rates, weather conditions, natural or man-made disasters, consumer demand and changes in governmental trade and agricultural programs. Continued volatility in the prices of the core ingredients and other outside business activitiessupplies we purchase could increase our cost of goods sold and reduce our profitability.

We do not use hedges or forward pricing for availability of any core ingredients. As such, any material upward movement in core ingredient pricing could negatively impact our margins if we are not able to pass these costs on to our consumers, or our sales if we are forced to increase its prices. If we are not successful in managing our ingredient and packaging costs, if we are unable to increase our prices to cover increased costs or if such price increases reduce our sales volumes, then such increases in costs will have limited time to spend onadversely affect our business, financial condition and results of operations.

Certain of our operationscore ingredient contracts have minimum volume commitments that could require purchases without matching revenues during weaker sales periods. Future core ingredient prices may be sporadic, which may resultimpacted by new laws or regulations, suppliers’ allocations to other purchasers, interruptions in periodic interruptions or suspensionsproduction by suppliers, natural disasters, volatility in the price of operations.crude oil and related petrochemical products and changes in exchange rates.

 

BecauseA disruption in the service, a significant increase in the cost of our officersprimary delivery and directorsshipping services for our products or a significant disruption at shipping ports could adversely affect our business.

We use a variety of shipping services for delivery of our products to users and brick-and-mortar and online retail partners, including air carriers and ocean shipping services. We have other outside business activitiesexperienced and will only be devoting between 20-75% of their time,could continue to experience increased congestion and new import and export restrictions implemented at ports on which we rely for our business. In many cases, we have had to secure alternative transportation, such as air freight, or 8-30 hours per week eachuse alternative routes, at increased costs, to run our operations, our operations may be sporadic and occur at times which are convenient. However, these outside interests may deter from the development of GREY CLOAK TECH INC. supply chain.

In the event theyof any significant interruption in service by shipping providers or at airports or shipping ports, we may be unable to engage alternative suppliers or to receive or ship goods through alternate sites in order to deliver our products in a timely and cost-efficient manner. As a result, we could experience delays, increased shipping costs and lost sales as a result of missed delivery deadlines and product demand cycles. For example, at times during the COVID-19 pandemic, shipping of our products has been delayed, which has inconvenienced our users and brick-and-mortar and online retail partners. Furthermore, if the cost of delivery or shipping services were to increase significantly and the additional costs could not be covered by product pricing, our results of operations could be adversely affected.

In particular, we are dependent upon major shipping companies, including FedEx, for the shipment of our products to and from our third-party logistics partner facilities. Changes in shipping terms, or the inability of these third-party shippers to perform effectively, could affect our responsiveness to our users and brick-and-mortar and online retail partners. Increases in our shipping costs may adversely affect our


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financial results if we are unable to fulfillpass on these higher costs to our users or brick-and-mortar and online retail partners.

We will require additional financing in the future, and we can provide no assurance that such funding will be available on terms that are acceptable to us, or at all.

We will require additional financing in the future in order to grow our business, and are faced with the risk that funding will be unavailable in sufficient amounts or on terms acceptable to us, if at all, when needed. Moreover, the terms of any aspectfinancing may adversely affect the holdings or the rights of their dutiesour stockholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our shares to decline. To the Company,extent that we raise additional capital through the sale of common stock or securities convertible or exchangeable into common stock, your ownership interest will be diluted, and the terms of those securities may include liquidation or other preferences that materially adversely affect your rights as a stockholder. The incurrence of indebtedness would result in increased fixed payment obligations and we may experiencebe required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to make capital expenditures, declare dividends, or otherwise conduct our business. If we are unable to obtain any funding we need on a shortfalltimely basis, we may be required to significantly curtail, delay or complete lackdiscontinue research or development of sales resultingnew products, the commercialization of our products or expansion into new geographies, which could materially affect our business, financial condition, and results of operations.

Our competitors may develop nutritional supplement products that are less expensive, safer or otherwise more appealing, which may diminish or eliminate the commercial success of any potential product that we may commercialize.

If our competitors (most of whom are larger and have more resources than we do) develop and bring to market nutritional supplement products that are less expensive, safer or otherwise more appealing than our current and potential products, or that reach the market before our current and potential products, we may not achieve commercial success. The market may choose to continue utilizing existing products for any number of reasons, including familiarity with or pricing of these existing products. The failure of any of our products to compete with products marketed by our competitors would impair our ability to generate revenue, which would have a material adverse effect on our future business, financial condition, results of operations, and cash flows. Our competitors may:

·develop and market products that are less expensive, safer, or otherwise more appealing than our products; 

·commercialize competing products before we or our partners can launch our products; and 

·initiate or withstand substantial price competition more successfully than we can. 


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Our auditors have substantial doubt about our ability to continue as a going concern.

Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in littlethe normal course of business. Our auditor’s report reflects that our ability to continue as a going concern is dependent upon our ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. If we are unable to continue as a going concern, our stockholders will lose their investment. We will be required to seek additional capital to fund future growth and expansion. No assurance can be given that such financing will be available or, no profits and eventual closure of the business.if available, that it will be on commercially favorable terms. Moreover, favorable financing may be dilutive to our stockholders.

 

Our controlling stockholders have significant influence over the Company.us.

 

As of January 31, 2015, the Company'sOur officers and directors currently own 69.9%stock representing approximately 10% of our outstanding Common Stock. However, when combined with the shares held by our controlling shareholder, Jay Decker, such persons collectively hold approximately 63% of our outstanding common stock.Common Stock. In addition, Mr. Decker’s two adult sons collectively own an additional 14% of our outstanding Common Stock.  As a result, theysuch individuals will (even after this offering) possess a significant influence over our affairs and may have the effect of delaying or preventing a future change in control, impeding a merger, consolidation, takeover or other business combination or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company,company, which in turn could materially and adversely affect the market price of our common stock. MinorityOur minority shareholders of the Company will be unable to affect the outcome of stockholder voting as long as our sole officerofficers and directordirectors retain a controlling interest.

After this offering, one of our shareholders will continue to own a significant percentage of our Common Stock and will maintain the ability to substantially influence all matters submitted to stockholders for approval.

After this offering, Jay Decker will own approximately [Ÿ]% of our outstanding shares of Common Stock (approximately [Ÿ]% if the underwriters exercise their over-allotment option in full). As of February 1, 2023, Decker owns approximately 51% of our outstanding shares of Common Stock. For as long as Decker retains a controlling interest.significant ownership of our shares of Common Stock, he will be able to substantially influence all matters submitted to our stockholders for approval, as well as our management and affairs. For example, he will substantially influence the election of directors and approval of any merger, consolidation or sale of all or substantially all our assets. This concentration of voting power could delay or prevent an acquisition of us on terms that other stockholders may desire or result in management that our stockholders disagree with. We are a “controlled company” as defined in Rule 5615(c)(1) of the Nasdaq listing rules. However, we do not intend to rely on any exemptions from the corporate governance requirements of being a controlled company. We are relying on the phase-in provisions of Rule 5615(b) as a company transferring from another market related to our audit committee composition.

 

Our current officers and directors may set salaries and perquisites in the future which the Company iswe are unable to support with itsour current assets.

 

During the software development stage, the company will not be paying any salaries and there are no employment agreements. Mr. Covely the Company’s Director, President and Chief Technology Officer will be devoting between 20 and 25 hours per week on software development. Mr. Bossung, the Company’s Director, Secretary and CFO will be spending between 20 and 25 hours per week on company operations and will be receiving $4500 dollars per month as a consulting payment. Upon completion of the software the Company will enter into a formal employment agreement with Mr. Covely for his full time employment. The intended date for Mr. Covely’s full time employment is April 1 2015 and his employment contract will be for 2 years at $9,000 per month. Upon completion of the software the Company will enter into a formal employment agreement with Mr. Bossung for his full time employment. The intended date for Mr. Bossung full employment is April 1 2015 his employment will be for 2 years at $8000 per month. Upon completion of the software the Company intends to enter into a formal employment agreement with Mr. Silver, the company’s Chief Marketing Officer for his full time employment. The intended date for Mr. Silver’s

While they are reimbursed for out-of-pocket expenses,Although our current officers and directors are not taking a salary. They has verbally indicated their willingness to perform their duties without additional compensation, during the development stage.  However, there is nohave written agreement, andemployment or services agreements, our officers and directors may decide to award themselves a salaryhigher salaries and other benefits.  The Company doesbenefits but all changes to these agreements will need to be approved by the Board of Directors. We do not currently generatehave significant revenues, and there is no guarantee that itwe will do sohave significant revenue in the near future. WeIf we do not have sufficient funds available to fully implementincrease our current plan of operations andrevenues, we will be unable to support any higher salaries or other benefits for management, which willmay cause us to cease operations.

 


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If we do not file a Registration Statement on Form 8-AWe may engage in strategic transactions that fail to become a mandatory reporting company under Section 12(g) of the Securities Exchange Act of 1934 ("Exchange Act"), we will continue as a reporting company and will not be subject to the proxy statement requirements, and our officers, directors and 10% stockholders will not be required to submit reports to the SEC on their stock ownership and stock trading activity, all of which could reduce the value of your investment and the amount of publicly available information about us.enhance stockholder value.

 

As a resultFrom time to time, we may consider possible strategic transactions, including the potential acquisitions or licensing of products or technologies or acquisition of companies, and other alternatives with the goal of maximizing stockholder value. Our pending acquisitions of Hyperion and OPM are examples of this offering as required under Section 15(d)strategy.  We may never complete a strategic transaction, and in the event that we do complete a strategic transaction, implementation of the Securities Exchange Act of 1934, we will file periodic reports with the Securities and Exchange Commission through December 31, 2015, including a Form 10-K for the year ended December 31, 2015, assuming this registration statement is declared effective before that date. Atsuch transactions may impair stockholder value or prior to December 31, 2015, we intend to voluntarily file a registration statement on Form 8-A which will subject us to all of the reporting requirements of the Exchange Act. This willotherwise adversely affect our business. Any such transaction may require us to file quarterlyincur non-recurring or other charges and annual reports with the SECmay pose significant integration challenges and/or management and will also subject us to the proxy rulesbusiness disruptions, any of the SEC. In addition,which could harm our officers, directorsresults of operation and 10% stockholders will be required to submit reports to the SEC on their stock ownership and stock trading activity. We are not required under Section 12(g) or otherwise to become a mandatory Exchange Act filer unless we have more than 2,000 shareholders (of which 500 may be unaccredited) and total assets of more than $10 million on December 31, 2015. If we do not file a registration statement on Form 8-A at or prior to December 31, we will continue as a reporting company and will not be subject to the proxy statement requirements of the Exchange Act, and our officers, directors and 10% stockholders will not be required to submit reports to the SEC on their stock ownership and stock trading activity.business prospects.

 

The shares being offered are defined as "penny stock", the rules imposed on the sale of the sharesWe may affect your abilitynot be able to resell any shares you may purchase, if at all.gain or sustain market acceptance for our products and services.

 

The shares being offered are defined asFailure to establish a "penny stock" under the Securitiesbrand and Exchange Act of 1934, and rules of the Commission.  The Exchange Act and such penny stock rules generally impose additional sales practice and disclosure requirements on broker-dealers who sell our securities to persons other than certain accredited investors who are, generally, institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $3,300,000 or annual income exceeding $200,000, or $300,000 jointly with spouse, or in transactions not recommended by the broker-dealer.  For transactions covered by the penny stock rules, a broker-dealer must make a suitability determination for each purchaser and receive the purchaser's written agreement prior to the sale.  In addition, the broker-dealer must make certain mandated disclosures in penny stock transactions, including the actual sale or purchase price and actual bid and offer quotations, the compensation to be received by the broker-dealer and certain associated persons, and deliver certain disclosures required by the Commission.  Consequently, the penny stock rules may affect the ability of broker-dealers to make a market in or trade our common stock and may also affect your ability to resell any shares you may purchase in this offeringpresence in the public markets.

Market for penny stock has suffered in recent years from patterns of fraud and abuse

Stockholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse.  Such patterns include:

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Our management is aware of the abuses that have occurred historically in the penny stock market.  Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities.  The occurrence of these patterns or practicestimely basis could increase the volatility of our share price.

Due to the lack of a trading market for our securities, you may have difficulty selling any shares you purchase in this Offering.

There currently is no public trading market for our common stock.  Therefore there is no central place, such as a stock exchange or electronic trading system, to resell your shares.  If you do want to resell your shares, you will have to locate a buyer and negotiate your own sale.  We plan to contact a market maker to file an application on our behalf to have our common stock listed for quotation on the Over-the-Counter Bulletin Board (OTCBB) immediately following the effectiveness of this Registration Statement.  The OTCBB is a regulated quotation service that displays real-time quotes, last sale prices and volume information in over-the-counter (OTC) securities.  The OTCBB is not an issuer listing service, market or exchange.  Although the OTCBB does not have any listing requirements per se, to be eligible for quotation on the OTCBB, issuers must remain current in their filings with the SEC or applicable regulatory authority.  Market Makers are not permitted to begin quotation of a security whose issuer does not meet this filing requirement.  Securities already quoted on the OTCBB that become delinquent in their required filings will be removed following a 30 or 60 day grace period if they do not make their required filing during that time.  We cannot guarantee that our application will be accepted or approved and our stock listed and quoted for sale.  As of the date of this filing, there have been no discussions or understandings between the Company or anyone acting on our behalf with any market maker regarding participation in a future trading market for our securities.

The lack of a public trading market for our shares may have a negative effect on your ability to sell your shares in the future and it also may have a negative effect on the price, if any, for which you may be able to sell your shares.  As a result an investment in the Shares may be illiquid in nature and investors could lose some or all of their investment in the Company.

Our financial statements may not be comparable to those of companies that comply with new or revised accounting standards.

We have elected to take advantage of the benefits of the extended transition period that Section 107 of the JOBS Act provides an emerging growth company, as provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Our financial statements may, therefore, not be comparable to those of companies that comply with such new or revised accounting standards. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

Our status as an "emerging growth company" under the JOBS Act OF 2012 may make it more difficult to raise capital when we need to do it.

Because of the exemptions from various reporting requirements provided to us as an "emerging growth company" and because we will have an extended transition period for complying with new or revised financial accounting standards, we may be less attractive to investors and it may be difficult for us to raise additional capital as and when we need it. Investors may be unable to compare our business with other companies in our industry if they believe that our financial accounting is not as transparent as other companies in our industry. If we are unable to raise additional capital as and when we need it,adversely affect our financial condition and results of operations may be materially and adversely affected.

We will not be required to comply with certain provisions of the Sarbanes-Oxley Act for as long as we remain an "emerging growth company."

We are not currently required to comply with the SEC rules that implement Sections 302 and 404 of the Sarbanes-Oxley Act, and are therefore not required to make a formal assessment of the effectiveness of our internal controls

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over financial reporting for that purpose. Upon becoming a public company, we will be required to comply with certain of these rules, which will require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of our internal control over financial reporting. Though we will be required to disclose changes made in our internal control procedures on a quarterly basis, we will not be required to make our first annual assessment of our internal control over financial reporting pursuant to Section 404 until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an "emerging growth company" as defined in the JOBS Act.

Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an "emerging growth company." At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.

Reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.

As an "emerging growth company," we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies," including not being required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result,operations. Moreover, there may be a less active trading market for our common stock and our stock price may be more volatile.

As an "emerging growth company" under the jumpstart our business startups act (JOBS), we are permitted to rely on exemptions from certain disclosure requirements.

We qualify as an "emerging growth company" under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

*have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
*comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);
*submit certain executive compensation matters to shareholder advisory votes, such as "say-on-pay" and "say-on-frequency;" and
*disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We will remain an emerging growth company for up to five full fiscal years, although if the market value of our common stock that is held by non-affiliates exceeds $700 million as of any January 31 before that time, we would cease to be an emerging growth company as of the following December 31, or if our annual revenues exceed $1 billion, we would cease to be an emerging growth  company the following fiscal year, or if we issue more than $1 billion in  non-convertible debt in a three-year period, we would cease to be an emerging growth company immediately.

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Notwithstanding the above, we are also currently a "smaller reporting company," meaning that we are not an investment company, an asset-backed issuer, nor a majority-owned subsidiary of a parent company that is not a smaller reporting company, and has a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year.  If we are still considered a "smaller reporting company" at such time as we cease to be an "emerging growth company," we will be subject to increased disclosure requirements.  However, the disclosure requirements will still be less than they would be if we were not considered either an "emerging growth company" or a "smaller reporting company."  Specifically, similar to "emerging growth companies", "smaller reporting companies" are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; are not required to conduct say-on-pay and frequency votes until annual meetings on or after January 21, 2015; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports. Decreased disclosures in its SEC filings due to its status as an "emerging growth company" or "smaller reporting company" may make it harder for investors to analyze the Company's results of operations and financial prospects.

We will incur ongoing costs and expenses for SEC reporting and compliance, without increased revenue we may not be able to remain in compliance, making it difficult for investors to sell their shares, if at all.

Going forward, the Company will have ongoing SEC compliance and reporting obligations, estimated as approximately $10,000 annually.  Such ongoing obligations will require the Company to expend additional amounts on compliance, legal and auditing costs.  In order for us to remain in compliance, we will require increased revenues to cover the cost of these filings, which could comprise a substantial portion of our available cash resources.  If we are unable to generate sufficient revenues to remain in compliance, it may be difficult for you to resell any shares you may purchase, if at all.

Our Officers and Directors Currently Own 69.9% Of The Company's Issued and Outstanding Stock.

Presently, the Company's Officers and Directors beneficially own 10,000,000 (69.9%) shares of the outstanding common stock of the Company.  Because of such ownership, investors in this Offering will have limited control over matters requiring approval by the Company shareholders, including the election of directors.  In addition, certain provisions of Nevada State law could have the effect of making it more difficult or more expensive for a third party to acquire, or from discouraging a third party from attempting to acquire, control of the Company.  For example, Nevada law provides that approval of a majority of the stockholders is required to remove a director, which may make it more difficult for a third party to gain control of the Company.  This concentration of ownership limits the power to exercise control by the minority shareholders.

Our directors and officers will control and make corporate decisions that may differ from those that might be made by the other shareholders.

Due to the controlling amount of their share ownership in our Company, our officers and directors will have a significant influence in determining the outcome of all corporate transactions, including the power to prevent or cause a change in control.  Their interests may differ from the interests of other stockholders, and thus result in corporate decisions that are disadvantageous to other shareholders.

We Are Unlikely To Pay Dividends

To date, we have not paid dividends on our common stock, nor do we intend to pay dividends in the foreseeable future, even if we become profitable.  Earnings, if any, are expected to be used to advance our activities and for general corporate purposes, rather than to make distributions to stockholders.  Prospective investors will likely need to rely on an increase in the price of Company stock to profit from his or her investment.  There are no guarantees that any market for our common stock will ever develop or that the price of our stock will ever increase.  If prospective investors purchase Shares pursuant to this Offering, they must be prepared to be unable to liquidate their investment and/or lose their entire investment.

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Since we are not in a financial position to pay dividends on our common stock, and future dividends are not presently being contemplated, investors are advised that return on investment in our common stock is restricted to an appreciation in the share price.  The potential or likelihood of an increase in share price is questionable at best.

Our shares may not become eligible to be traded electronically which would result in brokerage firms being unwilling to trade them.

If we become able to have our shares of common stock listed on the OTCBB, we will then try, through a broker-dealer and its clearing firm, to become eligible with the Depository Trust Company ("DTC") to permit our shares to trade electronically. If an issuer is not "DTC-eligible," then its shares cannot be electronically transferred between brokerage accounts, which, based on the realities of the marketplace as it exists today, means that shares of a company will not likely be traded.

United States state securities laws may limit secondary trading, which may restrict the states in which and conditions under which you can sell the shares offered by this prospectus.

There is no public market for our securities, and there can be no assurance that any public market will develop in the foreseeable future. Secondary trading in securities sold in this offering will not be possible in any state in the U.S. unless and until the common shares are qualified for sale under the applicable securities laws of the state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in such state. There can be no assurance that we will be successful in registering or qualifyingsuccessfully complete our securities for secondary trading, or identifying an available exemption for secondary trading in our securities in every state.  If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, the securities in any particular state, the securities could not be offered or sold to, or purchased by, a resident of that state.  In the event that a significant number of states refuse to permit secondary trading in our securities, the market for our securities could be adversely affected.

If we have less than 300 record shareholders at the beginning of any fiscal year, other than the fiscal year within which this registration statement becomes effective, our reporting obligations under section 15(d) of the Exchange Act will be suspended.

There is a significant risk that we will have less than 300 record shareholders at our next fiscal year enddevelopment and at the conclusion of this offering. If we have less than 300 record shareholders, and have not filed a registration pursuant to 8A of the Exchange Act, our reporting obligations under Section 15(d) of the Exchange Act will be suspended, and we would no longer be obligated to provide periodic reports following the Form 10-K for the fiscal year end immediately following this offering. Furthermore, if, at the beginning of any fiscal year, we have fewer than 300 record shareholders for the class of securities being registered under this registration statement, our reporting obligations under Section 15(d) of the Exchange Act will be automatically suspended for that fiscal year. If we were to cease reporting, you will not have access to updated information regarding the Company's business, financial condition and results of operation.

The market price of our shares would decline if the selling stockholders sell a large number of shares all at once or in blocks.

The selling stockholders are offering 6,600,000 shares of common stock through this Prospectus.  They must sell these shares at a fixed price of $0.10 until such time as they are quoted on the OTC Bulletin Board or other quotation system or stock exchange.  Our common stock is presently not traded on any market or securities exchange, but should a market develop, shares sold at a price below the current market price at which the common stock is trading will cause that market price to decline.  Moreover, the offer or sale of large numbers of shares at any price may have a depressive effect on the price of our common stock in any market that may develop.

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Risks Related to Our Business and Industry

The Company has no operating history which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.

The Company will be operating in an industry that is characterized by rapid technological innovation, competition, changing customer needs and frequent introductionsintroduction of new products technologies and services. The Companyservices or that any such products and services will encountered, and will continue to encounter, risks and uncertainties frequently experienced by startup technology companies in evolving industries. If our assumptions regarding these risks and uncertainties, which we use to plan our business, are incorrect or change in reaction to changesachieve acceptance in the market, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations and our business could suffer.

The Companies success will depend in large part on our ability to, among other things:

compete with other companies, custom development efforts and open source initiatives that are currently in, or may in the future enter, the market for our software;

develop sales and a customer base,

complete the development of the click-fraud detection software

improve the performance and capabilities of our click-fraud detection software;

hire, train and retain skilled talent, including direct sales personal, and software engineers;

develop customer satisfaction, quality and ensure timely releases of our product enhancements;

develop a strategic sales network;

maintain the quality of our website and minimize downloading time

If wemarketplace. We may also fail to address the risksdevelop and difficulties that we face, including those associated with the challenges listed above as well as those described elsewhere in this “Risk Factors” section, our business will be adversely affecteddeploy new products and our results of operations will suffer

If the company cannot adequately train new employees, including a direct sales force, sales may not occur or potential customers may lose confidence in the knowledge and capability of our employees.

Our ability to effectively manage the business will dependservices on a number of factors, including our ability to do the following:

☐ effectively recruit, integrate, train and motivate  new employees, including direct sales people,
☐ attract and satisfy new customers;
successfully introduce the companys software product;
☐ establish, financial and management controls;
☐ protect our strategic assets, including our intellectual property rights; and
make sound business decisions in light of the scrutiny associated with operating as a public company.

These activities will require capital expenditures and will place demands on our limited management team.

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Our future financial performance and our ability to execute on our business plan will depend, in part, on our ability to finish developing the software and develop sales. There are no guarantees we will be able to do so in an efficient or timely manner, or at all. In particular, any failure to complete and implement the design of the Fraudlytic cloud based software will likely negatively impact our ability to succeed. Moreover, if we do complete the software and fail to manage the launch of the product and do not generate sales our business and operations, will suffer, which could negatively affect our brand, results of operations and overall business.basis.

 

We face intense competition,have a significant amount of unsold inventory, which could affect our assets and our profitability.

As of December 31, 2021, we had over $1.9 million in inventory, after writing off over $400,000 in citrus bergamot bulk extract inventory for the year. We believe this is the only product in our inventory that has a material risk of spoilage. The amount of our inventory exceeds our revenues for the year ended December 31, 2021. As of December 31, 2022, we had over $1.8 million in inventory, and we may notwrote off approximately $97,000 in inventory in 2022. Our inventory could spoil or be damaged, or we could never sell it, affecting the assets on our balance sheet as well as our future profitability. Our build-up in inventory peaked at the end of 2020 and we have been able to compete effectively, which couldcontinue to reduce demand for our productinventory through increased sales. We do not anticipate any further inventory write-offs. This pattern will continue and adversely affect our business and potential market share.will require us to start to purchase more of the BPF raw material in the next 2 to 3 years. 

The market for our software is intensely and increasingly competitive andWe are subject to rapidly changing technology and evolving standards. affected by extensive governmental regulations.

We are subject to and affected by extensive governmental regulations, including, among other things, regulations pertaining to (i) the formulation, manufacturing, packaging, labeling, distribution, importation, sale and storage of our products, and (ii) product claims and advertising (including direct claims and advertising by us, as well as claims and advertising by distributors for which we may be held responsible) 

We could be found not to be in compliance with existing regulations as a result, among other things, of the ambiguous nature of certain of the regulations, the considerable interpretive and enforcement discretion given to regulators or misconduct by distributors, who are generally independent contractors over whom we have limited control. Enforcement actions that could be undertaken by state and federal regulators include product seizures, injunctions against further product distribution, requests for product recall, and possible criminal prosecution. Any assertion or determination that we or our distributors are not in compliance with existing regulations could have a material adverse effect on our revenues. 

In addition, many companiesthe adoption of new regulations, or changes in our target market are offering, or may soon offer, productsthe interpretation of existing regulations, could have a material adverse effect on us. For example, in September 1997 the FDA issued regulations governing the labeling and services that may compete with our soon to be released product. Our current primary competitors generally fall into two categories: large software companies, including suppliersmarketing of traditional business intelligence products that provide one or more capabilities that are competitive with our software and new and emerging click-fraud analytic software companies, that the company may or may not know about We expect competition to increase as other established and emerging companies enter the click-fraud detection analytic software market, as customer requirements evolve and as new products and technologies are introduced. We expect this to be particularly truedietary supplement products.  


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In addition, claims made with respect to weight management, dietary supplement, personal care or other products of ours may change the regulatory status of the products. For example, it is possible that the FDA could take the position that claims made in connection with certain of our cloud-based software. This is a relatively newproducts place those products within the scope of an FDA “over-the counter” (OTC) drug monograph. OTC monographs prescribe permissible ingredients and evolving areaappropriate labeling language, and require the marketer or supplier of software,the products to register and we anticipate competition to increase based on customer demand for this type of product.file annual drug listing information with the FDA.  

 

ManyThe U.S. Federal Trade Commission (“FTC”), which exercises jurisdiction over the advertising of all our competitors, particularly large softwareproducts, has in the past instituted enforcement actions against dietary supplement companies for false and misleading advertising of certain products. These enforcement actions have longer operating histories, significantly greater financial, technical, marketing, distribution, professional services or other resourcesresulted in consent decrees and greater name recognition than we do.monetary payments by the companies involved. In addition, many of our competitors have strong relationships with our potential customers and extensive knowledgethe FTC has increased its scrutiny of the industry. As a result, they may be able to respond more quickly to new or emerging technologies and changes in customer requirements. Moreover, manyuse of these competitors are bundling their click-fraud detection software into larger software sales, often at significant discounts. Increased competition may lead to price cuts, alternative pricing structures or the introduction of products available for free or a nominal price. We may not be able to compete successfully against current and future competitors, and our business, results of operations and financial condition will be harmed if we fail to meet these competitive pressures.

Our ability to compete successfully in our market depends on a number of factors, both within and outside of our control. Some of these factors include ease and speed of product deployment and use, analytical and statistical capabilities, performance and scalability, the quality and reliability of our customer service and support, total cost of ownership, return on investment for the customer. Any failure by us to compete successfully in any one of these or other areas will adversely affect our business, results of operations and financial condition.

Moreover, current and future competitors may also make strategic acquisitions or establish cooperative relationships among themselves or with others. By doing so, these competitors may increase their ability to meet the needs of our potential customers. In addition, our prospective indirect sales channel partners may establish cooperative relationships with our competitors. These relationships may limit our ability to sell our product through specific distributors, technology providers, database companies and distribution channels and allow our competitors to rapidly gain significant market share. These developments could limit our ability to obtain sales from potential customers. If we are unable to compete successfully against current and future competitors, our business, results of operations and financial condition would be harmed.

Our success is highly dependent on our ability to penetrate the market for click-fraud analytic software as well as the growth and expansion of that market.

The market for click-fraud analytics software like ours is relatively new, rapidly evolving and unproven. Our success will depend in large part on our ability to penetrate the existing market for click-fraud detection and analytics software, as well as the continued growth and expansion of what we believe to be an emerging market for click-fraud analytics solutions. It is difficult to predict customer adoption and renewal rates, customer demand for our products, the size, growth rate and expansion of these markets, the entry of competitive products or the success of existing competitive

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products. Our ability to penetrate the existing market and any expansion of the emerging market depends on a number of factors, including the cost, performance and perceived value associated with our product, as well as customers’ willingness to adopt a different approach to click-fraud data analysis. Furthermore, many potential customers have made significant investments in other software systems and may be unwilling to invest in new software. If we are unable to complete and sell our click-fraud cloud based, our business, results of operations and financial condition would be adversely affected.testimonials. 

 

We will derive allreceived a warning letter from the FDA in November 2022 regarding one of our revenue from one software product.products.

 

We currently expectOn November 14, 2022, BergaMet NA, LLC, our subsidiary, received a warning letter from the FDA regarding claims we allegedly make about our Cholesterol Command product. Specifically, the warning letter related to derive substantially allclaims on our website, Facebook page, and the webpage of a retailer claim that the products are intended for use in the cure, mitigation, treatment, or prevention of disease because they reduce cholesterol or are an anti-inflammatory. On December 1, 2022, we responded to the warning letter notifying the FDA that we had hired a third-party to review our advertising and revise portions of our revenuewebsite, Facebook page, and online product listings. This was the only warning letter we received from our cloud based click-fraud detection software product. As such, the developmentFDA to date, and sale of this software product is critical to our success. The Sales for our software is affected by a number of factors, including market acceptance, the timing of development and release of the product still in development, new products by our competitors, price changes by us or by our competitors, technological change, growth or contraction in the traditional and expanding click-fraud analytics market, and general economic conditions and trends. If we are unable to complete development of the product and sell the software or get market acceptance of our software, our business, results of operations, financial condition and growth prospects will be materially and adversely affected.awaiting their response.

 

We are dependent on senior management and other key personnel, the loss of any of whom could adversely affect our business.

Our success depends in large part on the continued contributions of our senior management and other key personnel. In particular, the leadership of key management personnel is critical to the successful management of our company, the development of our products, and our strategic direction. We do not maintain “key person” insurance for any member of our senior management team. The loss of Mr. Covely, the software developer and co-founder of the company, would significantly delay or prevent the development of the software and strategic objectives and adversely affect our business.

If we are unable to attract, integrate and retain additional qualified personnel, including top technical talent, our business could be adversely affected.

Our success depends in part on our ability to identify, attract, integrate and retain software engineers, sales and other personnel, including technical talent from the industry. We face intense competition for qualified individuals from numerous other companies, including other software and technology companies, many of whom have greater financial and other resources than we do. These companies also may provide more diverse opportunities and better chances for career advancement. We may incur significant costs to attract and retain qualified personnel, including significant expenditures related to salaries and benefits. If we are unable to attract, integrate and retain suitably qualified individuals who are capable of meeting our technical, operational and managerial requirements, on a timely basis or at all, our business will be adversely affected.

Real or perceived errors, failures or bugs in our software could adversely affect our results of operations and growth prospects.

Because our software is new, not completed, not tested, undetected errors, failures or bugs may occur. Our click-fraud detection software may or will be installed and used in computing environments with different operating systems, and equipment and networking configurations, which may cause errors or failures of our software or other aspects of the computing environment into which it is deployed. In addition, deployment of our software into computing environments may expose undetected errors, compatibility issues, failures or bugs in our software. Despite testing by us, errors, failures or bugs may not be found in our software until it is released to our customers. Moreover, our customers could incorrectly implement or inadvertently misuse our software, which could result in customer dissatisfaction and adversely impact the perceived utility of our product as well as our brand. Any of these real or perceived errors, compatibility issues, failures or bugs in our software could result in negative publicity, reputational harm, loss of or delay of our software, loss of competitive position or claims by customers for losses sustained by

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them. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct the problem. Alleviating any of these problems could require significant expenditures of our capital and other resources and could cause interruptions, which could cause us to lose potential customers and could adversely affect our results of operations.

Our success depends on our ability to sell our product and establish an indirect sales channel.

We need to establish indirect sales and sales channel partners, such as original equipment manufacturers, technology partners, systems integrators and resellers. Indirect sales channel partners are becoming an increasingly important aspect of software sales. We cannot be certain that we will be able to identify suitable indirect sales channel partners. To the extent we do identify such partners, we will need to negotiate the terms of a commercial agreement with them under which the partner would distribute our software. We cannot be certain that we will be able to negotiate commercially-attractive terms with any channel partner, if at all. In addition, all channel partners must be trained to distribute our products. There can be no assurance that the FDA will not pursue this action further. If the FDA were to pursue this action, we may have to cease selling our channel partners will comply withCholesterol Command product. Any action brought by the termsFDA (or any ramifications of such action, including, without limitation, a required withdrawal of Cholesterol Command from the market) would have a material adverse effect on our commercial agreements with them or will continue to work with us when our commercial agreements with them expire or are up for renewal. If we are unable to maintain our relationships with these channel partners, or these channel partners fail to live up to their contractual obligations, our business,reputation, sales efforts and results of operations and financial condition could be harmed.operations.

 

Economic uncertainties or downturns could materially adversely affect our business.

 

Current or future economic uncertainties or downturns could adversely affect our business and results of operations. Negative conditions in the general economy including conditions resulting from changes in gross domestic product growth, the continued sovereign debt crisis, financial and credit market fluctuations, political deadlock, natural catastrophes, warfare and terrorist attacks on the United States, Europe, the Asia Pacific region or elsewhere, could cause a decrease in business investments, including corporate spending on click-fraud analytic software.investments.

 

General worldwide economic conditions have experienced a significant downturn and continue to remain unstable. These conditions make it extremely difficult for us to forecast and plan future business activities accurately, and they could cause our potential customers to reevaluate their decisions to purchase our product, which could delay and lengthen our sales cycles or result in cancellations of planned purchases. Furthermore, during challenging economic times our potential customers may tighten their advertising budgets which reduce the need for click-fraud detection software.may impact their spend on local inventory based digital marketing products. To the extent purchases of our softwareproducts are perceived by potential customers to be discretionary, sales of our productproducts may never occur. Also, customers may choose to develop in-house software as an alternativeseek other methods to usingachieve the benefits our product.products provide.

 

We cannot predict the timing, strength or duration of any economic slowdown, instability or recovery, generally or within any particular industry. If the economic conditions of the general economy or


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industries in which we operate do not improve, or worsen from present levels, our business, results of operations, financial condition and cash flows could be adversely affected.

Failure to protect our intellectual property rights could adversely affect our business.

Our success depends, in part, on our ability to protect proprietary methods and technologies that we develop under patent and other intellectual property laws of the United States, so that we can prevent others from using our inventions and proprietary information. If we fail to protect ourintellectual property rights adequately, our competitors might gain access to our technology, and our business might be adversely affected. However, defending our intellectual property rights might entail significant expenses. Any of our patent rights, copyrights, trademarks or other intellectual property rights may be challenged by others, weakened or invalidated through administrative process or litigation. The company has not filed for any intellectual property rights.

 

We may be subjectare dependent on the services of key personnel and failure to intellectual property rights claims by third parties, which are extremely costly to defend, could require us to pay significant damages andattract qualified management could limit our ability to use certain technologies.

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Companies in the software and technology industries, own large numbers of patents, copyrights, trademarks and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. In addition, many of these companies have the capability to dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them. The litigation may involve patent holding companies or other adverse patent owners that have no relevant product revenues and against which our patents may therefore provide little or no deterrence. We may in the future receive, notices that claim we have misappropriated, misused, or infringed other parties’ intellectual property rights, including issued or pending patents that cover significant aspects of our technologies or business methods. Any intellectual property claims, with or without merit, could be very time-consuming, could be expensive to settle or litigate and could divert our management’s attention and other resources. These claims could also subject us to significant liability for damages, potentially including treble damages if we are found to have willfully infringed patents or copyrights. These claims could also result in our having to stop using technology found to be in violation of a third party’s rights. We might be required to seek a license for the intellectual property, which may not be available on reasonable terms or at all. Even if a license were available, we could be required to pay significant royalties, which would increase our operating expenses. As a result, we may be required to develop alternative non-infringing technology, which could require significant effort and expense. If we cannot license or develop technology for any infringing aspect of our business, we would be forced to limit or stop sales of our software and may be unable to compete effectively. Any of these results would adversely affect our business, results of operations, financial condition and cash flows

Natural or man-made disasters and other similar events may significantly disrupt our business,growth and negatively impact our results of operations and financial condition.operations.

 

AnyWe are highly dependent on the principal members of our facilitiesmanagement team, including our President, Kevin “Duke” Pitts, and our Chief Financial Officer, Robert Madden. At this time, we do not know of the availability of such experienced management personnel or how much it may be harmedcost to attract and retain such personnel. The loss of the services of any member of senior management or rendered inoperable by naturalthe inability to hire experienced technical or man-made disasters, including earthquakes, tornadoes, hurricanes, wildfires, floods, nuclear disasters, acts of terrorism or other criminal activities, infectious disease outbreaks, and power outages, which may render it difficult or impossible for us to operate our business for some period of time. For example, we may host our click-fraud detection software at a data center located in the San Francisco Bay Area, a region known for seismic activity. Any disruptions in operations could negatively impact our business and results of operations, and harm our reputation. In addition, we may not carry business insurance or may not carry sufficient business insurance to compensate for losses that may occur. Any such losses or damagesprograming personnel could have a material adverse effect on our business,financial condition and results of operations and financial condition.operations.

 

There has been no prior market forOther companies may claim that we have infringed upon their intellectual property or proprietary rights.

We do not believe that our common stock. An active marketproducts and services violate third-party intellectual property rights; however, we have not had an independent party conduct a study of possible patent infringements. Nevertheless, we cannot guarantee that claims relating to violation of such rights will not be asserted by third parties. If any of our products or services are found to violate third-party intellectual property rights, we may not developbe required to expend significant funds to re-engineer or cause to be sustainablere-engineered one or more of those products or services to avoid infringement, or seek to obtain licenses from third parties to continue offering our products and investorsservices without substantial re-engineering, and such efforts may not be successful.

In addition, future patents may be issued to third parties upon which our products and services may infringe. We may incur substantial costs in defending against claims under any such patents. Furthermore, parties making such claims may be able to resell their sharesobtain injunctive or other equitable relief, which effectively could block our ability to further develop or commercialize some or all of our products or services in the United States or abroad, and could result in the award of substantial damages against us. In the event of a claim of infringement, we may be required to obtain one or more licenses from third parties. There can be no assurance that we will be able to obtain such licenses at a reasonable cost, if at all. Defense of any lawsuit or above the initial public offering price.failure to obtain any such license could be costly and have a material adverse effect on our business.

As a part of our business strategy, we have made and expect to continue to make acquisitions. These acquisitions could disrupt our operations and harm our operating results.

 

There has been no public market for our common stock prior to this offering. The initial public offering price for our common stock will be determined. If you purchase sharesAn element of our commonstrategy includes expanding our product offerings and gaining access to new skills and other resources through strategic acquisitions when attractive opportunities arise. Acquiring additional businesses and the implementation of other elements of our business strategy are subject to various risks and uncertainties. Some of these factors are within our control and some are outside our control. These risks and uncertainties include, but are not limited to, the following:

·any acquisition may result in significant expenditures of cash, stock youand/or management resources, 

·acquired businesses may not be able to resell those shares. An active or liquid marketperform in our common stock may not develop upon completion of this offering or, if it does develop, it may not be sustainable.accordance with expectations, 

 

Future sales·we may encounter difficulties and issuances of our capital stock or rights to purchase capital stock could result in additional dilutioncosts with the integration of the percentage ownership of our stockholders and could cause our stock price to decline.acquired businesses, 

 

We may issue additional securities following the completion of this offering. Future sales and issuances of our capital stock or rights to purchase our capital stock could result in substantial dilution to our existing stockholders. We may sell common stock, convertible securities and other equity securities in one or more transactions at prices and in a manner as we may determine from time to time. If we sell any such securities in subsequent transactions, investors may be materially diluted. New investors in such subsequent transactions could gain rights, preferences and privileges senior to those of holders of our common stock.

The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain additional executive management and qualified board members.

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As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the New York Stock Exchange and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging growth company.” The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and results of operations. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, ·management’s attention may be diverted from other business concerns, which could adversely affectaspects of our business, 


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·we may face unexpected problems entering geographic and results of operations. Althoughproduct markets in which we have already hired additional employees to comply with these requirements, we may need to hire more employees in the futurelimited or engage outside consultants, which will increase our costs and expenses.no direct prior experience, 

 

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack·we may lose key employees of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatoryacquired or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely affected.existing businesses, 

 

We also expect that being a public company·we may incur liabilities and these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and claims arising out of acquired businesses, 

·we may be required to accept reduced coverage or incur substantially higher costsunable to obtain coverage. These factors could also make it more difficult for us to attractfinancing, and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

 

As a result of disclosure of information in this prospectus and in filings required of a public company, our business and financial condition will become more visible,·we may incur indebtedness or issue additional capital stock, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and results of operations could be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessarydilutive to resolve them, could divert the resources of our management and adversely affect our business and results of operations.

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USE OF PROCEEDS

We are registering a total of 6,600,000 sharesholders of our common stock for sale by selling shareholders.. The company issued 3,300,000 common shares and, 3,300,000 common stock purchase warrants to investors that invested in the Company’s Regulation D Rule 506(b) Private Placement Memorandum, dated January 15 2015. The Company will not receive any proceeds from the sale of the 3,300,000 common shares that are being registered. The company will receive $1,650,000 if all the 3,300,000 warrants are exercised at .50 cents per share.stock. 

 

DETERMINATION OF OFFERING PRICE

Since our common stock is not listed or quoted on any exchange or quotation system, the offering price of the shares of common stock was determined arbitrarily by us.  The offering price of the shares of our common stock does not necessarily bear any relationship to our book value, assets, past operating results, financial condition or any other established criteria of value.  The facts considered in determining the offering price were our financial condition and prospects, our limited operating history and the general condition of the securities market. In determining the offering price, we took into consideration our capital structure.

Although our common stock is not listed on a public exchange, we will be filing to obtain a quotation on the OTCBB concurrently with the filing of this Prospectus.  In order to be quoted on the OTCBB, a market maker must file an application on our behalf in order to make a market for our common stock.  There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTC Bulletin Board, nor can there be any assurance that such an application for quotationattractive acquisition opportunities will be approved.

In addition, there isavailable to us, that we will be able to obtain financing for or otherwise consummate any acquisitions or that any acquisitions which are consummated will prove to be successful. There can be no assurance that we can successfully execute all aspects of our common stock will trade at market prices in excess of the initial offering price as prices for the common stock in any public market which may develop will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity.business strategy.

 

DILUTIONOur success depends on our ability to protect our proprietary technology.

 

Not applicable.

SELLING SECURITY HOLDERS

This prospectus coversOur success depends, to a significant degree, upon the resale from time to time by the selling shareholders of up to an aggregate of 6,600,000 common shares. The company is registering in this prospectus 3,300,000 common shares and 3,300,000 common shares underlying the warrants to purchase common stock. The company issued 3,300,000 common shares and, 3,300,000 common stock purchase warrants to investors that invested in the Company’s Regulation D Rule 506(b) Private Placement Memorandum, dated January 15 2015. The company issued the common stock purchase warrants to the investors on a “one for one” basis. For each share of common stock purchased the investor received one warrant, each warrant entitles the holder to purchase one share of common stock at $.50. There are a total of 3,300,000 warrants issued. The Company will not receive any proceeds from the sale of the 3,300,000 common shares that are being registered. The company will receive $1,650,000 if all the 3,300,000 warrants are exercised at .50 cents per share.

·None of these issuances involved underwriters, underwriting discounts or commissions;
·We placed Regulation 144 required restrictive legends on all certificates issued;

In connection with the above transactions, although some of the investors may have also been accredited, we provided the following to all investors:

·Access to all our books and records.
·Access to all material contracts and documents relating to our operations.
·The opportunity to obtain any additional information, to the extent we possessed such information, necessary to verify the accuracy of the information to which the investors were given access.
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Prospective investors were invited to review at our offices at any reasonable hour, after reasonable advance notice, any materials available to us concerning our business. Prospective Investors were also invited to visit our offices.

The company issued to thirty seven (37) unaffiliated investors, 3,300,000 common shares and, 3,300,000 common stock purchase warrants that invested in the Company’s Regulation D Rule 506(b) Private Placement Memorandum, dated January 15 2015. The following table provides as of February 9, 2015, information regarding the beneficial ownershipprotection of our common stock held by each of the selling shareholders.

SELLING STOCKHOLDERS

This prospectus covers the resale from time to time by the selling stockholders identified in the table below of up to an aggregate of 6,600,000 common shares. The company is registering in this prospectus 3,300,000 common shares and 3,300,000 common shares underlying the warrants to purchase common stock. The company issued 3,300,000 common shares and, 3,300,000 common stock purchase warrants to investors that invested in the Company’s Regulation D Rule 506(b) Private Placement Memorandum, dated January 15 2015. The company issued the common stock purchase warrants to the investors listed in the table below on a “one for one” basis. For each share of common stock purchased the investor received one warrant to purchase one share of common stock. Each warrant entitles the holder to purchase one share of common stock at $50. There are a total of 3,300,000 warrants issued. The Company will not receive any proceeds from the sale of the 3,300,000 common shares that are being registered. The company will receive $1,650,000 if all the 3,300,000 warrants are exercised at .50 cents per share.

Each Warrant, entitles the holder thereof to purchase from Grey Cloak Tech Inc., a corporation incorporated under the laws of the State of Nevada (the “Company’), subject to the terms and conditions set forth in the Warrant Agreement, at any time on or after the “Original Issue Date” and before the close of business on December 31, 2016 (“Expiration Date”), one fully paid and non-assessable share of Common Stock of the Company(“Common Stock”) upon presentation and surrender of the Warrant Certificate. Each Warrant initially entitles the holder to purchase one share of Common Stock for $.50. Upon any reclassification, exchange, substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise or conversion of the Warrant, Holder shall be entitled to receive, upon exercise or conversion of the Warrant, the number and kind of securities and property that Holder would have received for the Warrant Shares if this Warrant had been exercised immediately before such reclassification, exchange, substitution, or other event. The Company reserves the right to “Call” the warrant. The Company can call the Warrant when and if the Company files a registration statement with the Securities and Exchange Commission and the registration statement becomes effective and remains current and the common shares underlying the warrant are registered. The Company can only “call” the warrant if the Company’s common stock is traded on a recognizable market and if the Company’s common stock price trades at 150% of the warrant exercise price for a period of 20 consecutive trading days. In the event the Company “Calls” the warrant the warrant holder shall have 20 days to exercise the warrant certificate in whole or in part after the Company officially notifies the warrant holder. The Company will notify the warrant holder by written notification to the warrant holders last known address that is on file with the Company’s Warrant Agent. The Company reserves the right to cancel, without any redemption price, any outstanding warrants that are not exercised 20 days after the warrants have been called.

The selling stockholders identified in the table below may from time to time offer and sell under this prospectus any or all of the shares of common stock described under the column “Number of Common Shares Offered” in the table below. The table below has been prepared based upon information furnished to us by the selling stockholders as of the dates represented in the footnotes accompanying the table. The selling stockholders identified below may have sold, transferred or otherwise disposed of some or all of their shares since the date on which the information in the following table is presented in transactions exempt from or not subject to the registration requirements of the Securities Act. Information concerning the selling stockholders may change from time to time and, if necessary, we will amend or supplement this prospectus accordingly and as required.

The selling stockholders have informed us that they bought our securities in the ordinary course of business,proprietary technology, and that none of the selling stockholders had, at the time of their purchaseany licensors. Legal fees and other expenses necessary to obtain and maintain appropriate patent protection could be material. Currently, no material aspect of our securities, any agreementsbusiness is protected by registered patents, copyrights or understandings, directlytrademarks. Insufficient funding may inhibit our ability to obtain and maintain such protection. Additionally, if we must resort to legal proceedings to enforce our intellectual property rights, the proceedings could be burdensome and expensive, and could involve a high degree of risk to our proprietary rights if we are unsuccessful in, or indirectly, with any personcannot afford to distributepursue, such securities.

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The following table and footnote disclosure following the table sets forth the name of each selling stockholder, the nature of any position, office or other material relationship, if any, that the selling stockholder has had within the past three years with us or with any of our predecessors or affiliates, and the number of shares of our common stock beneficially owned by the selling stockholder before this offering. The number of shares reflected are those beneficially owned, as determined under applicable rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under applicable SEC rules, beneficial ownership includes any shares of common stock as to which a person has sole or shared voting power or investment power and any shares of common stock which the person has the right to acquire within 60 days after January 15 2015 through the exercise of any option, warrant or right or through the conversion of any convertible security. Unless otherwise indicated in the footnotes to the table below and subject to community property laws where applicable, we believe, based on information furnished to us that each of the selling stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned.proceedings.

 

We have assumedmay also rely on trademarks, trade secrets and contract law to protect certain of our proprietary technology. There can be no assurance that all shares of common stock reflected in the table as being offered in the offering covered by this prospectusany trademarks will be sold from time to time in this offering. We cannot provide an estimate as to the numberapproved, that such contract will not be breached, or that if breached, we will have adequate remedies. Furthermore, there can be no assurance that any of shares of common stock thatour trade secrets will not become known or independently discovered by third parties.

Our future growth may be heldinhibited by the selling stockholders upon termination of the offering covered by this prospectus because the selling stockholders may offer some, all or none of their shares of common stock being offered in the offering.

The following table provides as of February 9, 2015, information regarding the beneficial ownership of our common stock held by each of the selling shareholders, including,

1.Name of Selling Stockholder

2.Number of Common Shares Beneficially Owned Before Offering

3.Number Of Common Shares Offered

4.Number of Common Shares Beneficially Owned if all Shares are Sold in the Offering

5.Percent Beneficially Owned After Offering

Name of Selling StockholderNumber of Common Shares Beneficially Owned Before OfferingNumber of Common Shares OfferedNumber of Common Shares Beneficially Owned If All Shares Are Sold In the OfferingPercent Beneficially Owned After Offering
Natalie Gregarek150,000150,0000 
William Corbett25,00025,0000 
Joseph F. Bruno10,00010,0000 
Kyle Israel10,00010,0000 
John G. Glotfelty75,00075,0000 
David Bromberg (1)660,000500,000160,000.011%
KBK Ventures Inc. (4)50,00050,0000 
Brian A. Bromberg100,000100,0000 
David Crowley10,00010,0000 
Howard Burns50,00050,0000 
Joseph May50,00050,0000 
Burdick Baker50,00050,0000 
Victory Fund LLC (5)50,00050,0000 

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Daniel Rudden (2)466,666300,000166,666.011%
Colton Russell Brasel50,00050,0000 
Michael B. & Rosemary Owens10,00010,0000 
Mary Jane Brasel250,000250,0000 
Paulette Dragul12,50012,5000 
Paul Dragul12,50012,5000 
Scott A. Owen10,00010,0000 
Kevin Pitts30,00030,0000 
J.J. Peirce50,00050,0000 
Justin Thomas Brasel50,00050,0000 
Janet Michele Brasel50,00050,0000 
Glaxious Group,LLC (6)50,00050,0000 
First Capital Properties LLC (7)100,000100,0000 
Sylvia DeSalme20,00020,0000 
Village Partners LLC (8)175,000175,0000 
Susan A. Brasel115,000115,0000 
Chad Krull100,000100,0000 
Matthew Gregarek300,000300,0000 
Michael Delaney100,000100,0000 
David J Gregarek (3)540,000200,000340,000.024%
Rebecca Gregarek100,000100,0000 
Sabrina Kadets50,00050,0000 
Shawn P. McChesney25,00025,0000 
John C Spencer10,00010,0000 

1.David Bromburg purchased 160,000 of the company’s common shares by subscription at .02 cents per share on December 23 2014. The 160,000 common shares are not being registered.
2.Daniel Rudden purchased 166,666 of the company’s common shares by subscription at .02 cents per share on December 23 2014. The 166,666 common shares are not being registered
3.David Gregreck purchased 340,000 of the company’s common shares by subscription at .02 cents per share on December 23 2014. The 340,000 common shares are not being registered
4.KBK Ventures Inc is Managed by David Bromburg
5.Victory Fund LLC is Managed by Daniel Rudden
6.Glaxious Group LLC is Managed by Tyler Brasel
7.First Capital Properities is Managed by Timothy Brasel
8.Village Partners LLC is Managed by George Lee

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PLAN OF DISTRIBUTIONfailure to implement new technologies.

 

We are registering the resaleOur future growth is partially tied to our ability to improve our knowledge and implementation of certain shares ofmobile, AI, machine learning, and other advanced technologies in a retail environment, which is a rapidly changing market. The inability to successfully implement commercially technologies in response to market conditions in a manner that is responsive to our customers’ requirements could have a material adverse effect on our business.

Our common stock is governed under The Securities Enforcement and the common stock underlying the warrants to purchase common stock, offered by this prospectus on behalfPenny Stock Reform Act of the selling stockholders. As used in this prospectus, the term “selling stockholders” include donees, pledges, transferees and other successors in interest selling shares received from the selling stockholders after the date of this prospectus, whether as a gift, pledge, partnership distribution or other form of transfer.  All costs, expenses and fees in connection with the registration of the shares of common stock offered hereby will be borne by us.  Brokerage commissions and similar selling expenses, if any, attributable to the sale of shares of common stock will be borne by the selling stockholders.

To our knowledge, none of the selling shareholders:

1.Has had a material relationship with the Company or any of its predecessors or affiliates, other than as a shareholder as noted above, at any time within the past three years; or
2.Has ever been an officer or director of GREY CLOAK TECH INC

Shares Offered by the Selling Shareholders1990.

 

The selling shareholders have not informed usSecurities Enforcement and Penny Stock Reform Act of how they plan to sell their shares.  However, they may sell some or all of their common stock in one or more transactions:

1.on such public markets or exchanges as the common stock may from time to time be trading;
2.in privately negotiated transactions; or
3.in any combination of these methods of distribution.

The sales price1990 requires additional disclosure relating to the public, of $0.10 per share, has been determined by the Company based on the price the shares were sold to the selling shareholders.  The price of $0.10 per share is a fixed pricemarket for the duration of the offering or until the securities are quoted for trading on the OTC Bulletin Board, and thereafter at prevailing market prices or privately negotiated prices. The selling shareholders offering will terminate upon the earliest of (i) such time as all of the common stock has been sold pursuant to the registration statement or (ii) 365 days from the effective date of this prospectus.

The selling shareholders may also sell their shares directly through market makers acting in their capacity as broker-dealers.  The Company will apply to have its shares of common stock listed on the OTC Bulletin Board immediately after the date of this Prospectus.  We anticipate once the shares are quoted on the OTC Bulletin Board, the selling shareholders will sell their shares directly into any market created.  Selling shareholders will offer their shares at a fixed price of $0.10 per share for the duration of this Offering or until the securities are listed for trading on the OTC Bulletin Board, and thereafter at prevailing market prices or privately negotiated prices.  We cannot predict the price at which shares may be sold or whether the common stock will ever trade on any market.  The shares may be sold by the selling shareholders, as the case may be, from time to time, in one or more transactions.

Commissions and discounts paidpenny stocks in connection with the sale of the shares by the selling shareholders will be determined through negotiations between the shareholders and the broker-dealers through or to which the securities aretrades in any stock defined as a penny stock. The Commission has adopted regulations that generally define a penny stock to be sold, and may vary, depending on the broker-dealer's fee schedule, the size of the transaction and other factors.  The separate costs of the selling shareholders will be borne by the shareholder.  Any broker, broker-dealer or agent that participates with the selling shareholders in the sale of the shares by them will be deemed an "underwriter" within the meaning of the Securities Act, and any commissions or discounts received by them and any profits on the resale of shares purchased by them will be deemed to be underwriting commissions under the Securities Act.  In the event any selling shareholder engages a broker-dealer to distribute their shares, and the broker-dealer is acting as underwriter, we will be required to file a post-effective amendment containing the name of the underwriter.

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The selling shareholders must comply with the requirements of the Securities Act of 1933 and the Securities Exchange Act of 1934 in the offer and sale of their common stock.  In particular, during times that the selling shareholders may be deemed to be engaged in a distribution of the common stock, and therefore be considered to be an underwriter, they must comply with applicable law.

Regulation M prohibits certain market activities by persons selling securities in a distribution.  To demonstrate their understanding of those restrictions and others, selling shareholders will be required, prior to the release of unrestricted shares to themselves or any transferee, to represent as follows: that they have delivered a copy of this Prospectus, and if they are effecting sales on the Electronic Bulletin Board or inter-dealer quotation system or any electronic network, that neither they nor any affiliates or person acting on their behalf, directly or indirectly, has engaged in any short sale of our common stock; and for a period commencing at least 5 business days before his first sale and ending with the date of his last sale, bid for, purchase, or attempt to induce any person to bid for or purchase our common stock.

If the Company's common shares are quoted for trading on the OTC Electronic Bulletin Board the trading in our shares will be regulated by Securities and Exchange Commission Rule 15g-9 which established the definition of a "penny stock".  For the purposes relevant to the Company, it is defined as any equity security that has a market price of less than $5.00 per share, or with an exercise price of less than $5.00 per share, subject to certain exceptions. ForSuch exceptions include any equity security listed on NASDAQ and any equity security issued by an issuer that has (i) net tangible assets of at least $2,000,000, if such issuer has been in continuous operation for three years; (ii) net tangible assets of at least $5,000,000, if such issuer has been in continuous operation for less than three years; or (iii) average


27



annual revenue of at least $6,000,000, if such issuer has been in continuous operation for less than three years. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person's account for transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.  In order to approve a person's account for transactions in penny stocks, the broker or dealer must (a) obtain financial information and investment experience objectives of the person; and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.  The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the broker/dealer relating toexplaining the penny stock market which,and the risks associated therewith.

Risks Related to our Acquisition and Integration of Hyperion, L.L.C. and

Online Publishing & Marketing, LLC

We have incurred and expect to incur substantial costs related to the acquisition of Hyperion and OPM and subsequent integration efforts.

We have incurred and expect to incur a number of non-recurring costs associated with our acquisition of Hyperion and OPM. These costs include legal, accounting, consulting and other advisory fees, closing, integration and other related costs.

In addition, upon closing of the acquisitions, we will pay to the selling parties $1.75 million in highlight form, (a) sets forthcash and execute promissory notes in the basisaggregate principal amount of $1.3 million. These obligations may have a negative impact on whichour operating results.

After the brokeracquisition of Hyperion and OPM, integration may be more difficult, costly, or dealer madetime-consuming than expected, and we may not realize the suitability determination;anticipated benefits of the underlying acquisition.

The anticipated benefits of our pending acquisition of Hyperion and (b) thatOPM, including product candidate diversification and revenue growth, may not be realized fully or at all or may take longer to commercialize than expected and integration may result in additional and unforeseen expenses. An inability to realize the broker or dealer received a signed, written agreement fromfull extent of the investoranticipated benefits, as well as any delays encountered in the integration process, could have an adverse effect upon our operating results.

In addition, we and Hyperion and OPM will have operated independently prior to the transaction.  Before you tradecompletion of the acquisition. It is possible that the now-active integration process could result in the loss of one or more key employees, including employees of Hyperion and OPM, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures, and policies that adversely affect each company’s ability to maintain relationships with clients, customers, depositors, and employees or to achieve the anticipated benefits of the acquisition. Integration efforts between the companies may also divert management attention and resources. These integration matters could have an adverse effect on our business and operations during this transition period and for an undetermined period.

We may not have discovered certain liabilities or other matters related to Hyperion and OPM, which may adversely affect the future financial performance of the combined company.

In the course of the due diligence review that we conducted prior to the execution of the Acquisition Agreement, we may not have discovered, or may have been unable to properly quantify, certain liabilities of Hyperion and OPM or other factors that may have an adverse effect on the business, results of operations, financial condition, and cash flows of the combined company.

Our estimates and judgments related to the acquisition accounting methods used to record the purchase price allocation related to the merger may be inaccurate.

With respect to our proposed acquisition of Hyperion and OPM (and other acquisitions we may undertake in the future), our management will make significant accounting judgments and estimates related to the application of acquisition accounting of the acquisition under GAAP, as well as the underlying


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valuation models. Our business, operating results, and financial condition could be materially adversely impacted in future periods if the accounting judgments and estimates prove to be inaccurate.

We may not satisfy all of the closing conditions to complete the acquisition of Hyperion and OPM.

The completion of the acquisitions is subject to the following material closing conditions, and there can be no assurance that the transactions will be completed as described:

·we will have entered into a pennynew lease agreement for at least a twelve-month period at the current Hyperion and OPM locations; 

·a key employee of Hyperion and OPM will have entered into a consulting agreement with us; 

·our independent auditor will have completed an audit of the financial statements of Hyperion and OPM; 

·we will have closed on one or more rounds of financing for an aggregate amount of no less than $4,000,000, of which at least $250,000 will be from selling parties to the transaction; and 

·we will have commenced trading, or been approved to commence trading, on either the Nasdaq or the NYSE American Exchange.  

In the event we do not complete the transactions, we will have incurred a substantial amount of fees and expenses without adding any value or benefit.

Existing stockholders will experience additional dilution from the issuance of our Common Stock to complete the Hyperion and OPM acquisitions.

If we close on the acquisitions of Hyperion and OPM, we will issue $1,250,000 worth of our common stock your brokerto the selling parties. The number of shares will be determined at the time of the closing, based on a 30% premium to the price paid per share of common stock in this offering, but in no event more than ninety percent (90%) of the volume weighted average price for our common stock for the ninety (90) trading days up to and including the trading day immediately before the day the price is requiredfinally determined for securities sold in this offering. The issuance of our Common Stock to tell youclose the offeracquisitions will have a dilutive impact on our shareholders. As a result, our net income per share could decrease in future periods and the bidmarket price of our common stock could decline.

Risk Factors Related to the Offering and Our Securities Generally

Existing stockholders will experience significant dilution from the sale of our Common Stock.

The sale of our Common Stock pursuant to this Offering will have a dilutive impact on the stock,our shareholders. As a result, our net income per share could decrease in future periods and the compensationmarket price of our common stock could decline.

The perceived risk of dilution may cause our stockholders to sell their shares, which may cause a decline in the salespersonprice of our common stock. Moreover, the perceived risk of dilution and the firm receiveresulting downward pressure on our stock price could encourage investors to engage in short sales of our common stock.


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The market prices and trading volume of our shares of Common Stock may experience rapid and substantial price volatility, which could cause purchasers of our Common Stock to incur substantial losses.

The market prices and trading volume of shares of Common Stock of other small publicly traded companies with a limited number of shares available to purchasers, have experienced rapid and substantial price volatility unrelated to the financial performance of those companies. Similarly, subsequent to this Offering, shares of our Common Stock may experience similar rapid and substantial price volatility unrelated to our financial performance, which could cause purchasers of our Common Stock in this Offering to incur substantial losses, which may be unpredictable and not bear any relationship to our business and financial performance. Extreme fluctuations in the market price of our Common Stock may occur in response to strong and atypical retail investor interest, including on social media and online forums, the direct access by retail investors to broadly available trading platforms, the amount and status of short interest in our Common Stock and our other securities, access to margin debt, trading in options and other derivatives on our shares of Common Stock and any related hedging and other trading factors:

If there is extreme market volatility and trading patterns in our Common Stock, it may create several risks for investors in this Offering, including the following:

·the market price of our Common Stock may experience rapid and substantial increases or decreases unrelated to our operating performance or prospects, or macro or industry fundamentals; 

·if our future market capitalization reflects trading dynamics unrelated to our financial performance or prospects, purchasers of our Common Stock could incur substantial losses as prices decline once the level of market volatility has abated; 

·if the future market price of our Common Stock declines, purchasers of shares of Common Stock in this Offering may be unable to resell such shares at or above the price at which they acquired them. We cannot assure such purchasers that the market of our Common Stock will not fluctuate or decline significantly in the future, in which case investors in this Offering could incur substantial losses. 

Further, we may incur rapid and substantial increases or decreases in our Common Stock price in the foreseeable future that may not coincide in timing with the disclosure of news or developments by or affecting us. Accordingly, the market price of our Common Stock may fluctuate dramatically, and may decline rapidly, regardless of any developments in our business. Overall, there are various factors, many of which are beyond our control, that could negatively affect the market price of our Common Stock or result in fluctuations in the price or trading volume of our Common Stock, including:

·actual or anticipated variations in our annual or quarterly results of operations, including our earnings estimates and whether we meet market expectations with regard to our earnings; 

·our current inability to pay dividends or other distributions; 

·publication of research reports by analysts or others about us or the industry in which we operate, including the nutraceutical industry which may be unfavorable, inaccurate, inconsistent or not disseminated on a regular basis; 

·changes in market valuations of similar companies; 

·market reaction to any additional equity, debt or other securities that we may issue in the future, and which may or may not dilute the holdings of our existing stockholders; 

·additions or departures of key personnel; 

·actions by institutional or significant stockholders; 


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·short interest in our Common Stock or our other securities and the market response to such short interest; 

·the dramatic increase in the number of individual holders of our Common Stock and their participation in social media platforms targeted at speculative investing; 

·speculation in the press or investment community about our company or industries in which we operate; 

·strategic actions by us or our competitors, such as acquisitions or other investments; 

·legislative, administrative, regulatory or other actions affecting our business, our industry, including positions taken by the FDA; 

·investigations, proceedings, or litigation that involve or affect us; 

·the occurrence of any of the other risk factors included in this registration statement of which this prospectus forms a part; and 

·general market and economic conditions. 

If our initial listing application for our Common Stock is not approved by Nasdaq, we will not be able to consummate the Offering and will terminate this Offering.

Approval of our initial listing application for our Common Stock by Nasdaq will be subject to, among other things, our fulfillment of the following conditions: (i) the Offering of the Shares is completed and closed; and (ii) we have raised a sufficient amount of equity necessary to qualify for the trade.  The firm must also mail a monthly statement showingminimum equity requirements necessary to list our Common Stock on Nasdaq. Currently we are endeavoring to satisfy the standard for admission on Nasdaq requiring $5 million in stockholders’ equity and $15 million market value of each penny stockpublicly held shares of Common Stock. If we fail to meet the minimum requirements for initial listing on Nasdaq, we will not be able to consummate the Offering and will terminate this Offering. There is no assurance that our Common Stock will ever be listed on Nasdaq or that we will be able to comply with such applicable initial listing standards. Failure to have our Common Stock listed on Nasdaq would make it more difficult for our stockholders to dispose of our Common Stock and more difficult to obtain accurate price quotations on our Common Stock. Our ability to issue additional securities for financing or other purposes, or otherwise to arrange for any financing we may need in your account.the future, may also be materially and adversely affected if our Common Stock is not traded on a national securities exchange.

 

The Nasdaq Stock Market LLC may delist our Common Stock from trading on Nasdaq, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

In the event that our Nasdaq initial listing application for our Common Stock is approved, should we fail to satisfy the continued listing requirements for remaining listed on Nasdaq, such as the corporate governance requirements or the minimum closing bid price requirement, The Nasdaq Stock Market LLC may take steps to delist our Common Stock. Such a delisting would likely have a negative effect on the price of our Common Stock and would impair your ability to sell or purchase our Common Stock when you wish to do so. In the event of a delisting, we would take actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken by us would allow our Common Stock to become listed again, stabilize the market price or improve the liquidity of our Common Stock, prevent our Common Stock from dropping below Nasdaq’s minimum bid price requirement or prevent future non-compliance with such listing requirements.

If we cannot maintain the listing of our Common Stock for trading on Nasdaq, we could face significant material adverse consequences, including:

·a limited availability of market quotations for our Common Stock; 

·reduced liquidity for our Common Stock; 


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·a determination that our Common Stock is a “penny stock” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Common Stock; 

·a limited amount of news and analyst coverage; and 

·a decreased ability to issue additional Common Stock or obtain additional financing in the future. 

Even if the reverse stock split of our outstanding shares of Common Stock currently achieves the requisite increase in the market price of our Common Stock for listing of our Common Stock on Nasdaq, we cannot assure you that the market price of our Common Stock will remain high enough for such reverse split to have the intended effect of complying with Nasdaq’s minimum bid price requirement.

In connection with this Offering and the initial listing of our Common Stock on Nasdaq, we expect to effect a reverse stock split of our Common Stock at the ratio we believe necessary to allow us to obtain Nasdaq approval of our initial listing application to list our Common Stock on Nasdaq. Even if such reverse stock split achieves the requisite increase in the market price of our Common Stock for listing of our common stock on Nasdaq, there can be no assurance that the market price of our Common Stock following such reverse stock split will remain at the level required for continuing compliance with such requirements. It is not uncommon for the market price of a company’s Common Stock to decline in the period following a reverse stock split. If the market price of our Common Stock declines following the effectuation of such reverse stock split, the percentage decline may be greater than would occur in the absence of a reverse stock split. In any event, other factors unrelated to the number of shares of our Common Stock outstanding, such as negative financial or operational results, could adversely affect the market price of our Common Stock and thus jeopardize our ability to meet or maintain Nasdaq’s minimum bid price requirement.

If we are unable to satisfy these requirements or standards, we would not be able to meet Nasdaq’s initial listing application, which could cause us to terminate the Offering. We can provide no assurance that all or any of the common stock offered will be soldsuch action taken by the selling shareholders.

The selling shareholders and any broker-dealers or agents that are involved in selling the shares may be deemedus would allow our Common Stock to be "underwriters" withinlisted on Nasdaq, stabilize the meaning ofmarket price or improve the Securities Act in connection with such sales.  In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.  The selling shareholders have informed us that they do not have any agreement or understanding, directly or indirectly, with any person to distribute the common stock.

Because the selling shareholders may be deemed to be "underwriters" within the meaning of the Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act.  Federal securities laws, including Regulation M, may restrict the timing of purchases and salesliquidity of our common stock, prevent the price of our Common Stock from dropping below Nasdaq’s minimum bid price requirement, or prevent future non-compliance with Nasdaq’s listing requirements.

The anticipated reverse stock split to be effected by us in connection with this Offering may decrease the selling shareholders and any other persons who are involved in the distributionliquidity of the shares of our Common Stock.

The liquidity of the shares of our Common Stock may be affected adversely by a reverse stock split to be effected by us in connection with this Offering given the reduced number of shares of our Common Stock that will be outstanding following such reverse stock split, especially if the market price of our Common Stock does not increase as a result of such reverse stock split. In addition, such reverse stock split may increase the number of stockholders who own odd lots (less than 100 shares) of our Common Stock, creating the potential for such stockholders to experience an increase in the cost of selling their shares of Common Stock and greater difficulty effecting such sales.

Following such anticipated reverse stock split, the resulting market price of our Common Stock may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our common stock may not improve.

Although we believe that a higher market price of our Common Stock may help generate greater or broader investor interest, there can be no assurance that the reverse stock split will result in a share price


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that will attract new investors, including institutional investors. In addition, there can be no assurance that the market price of our Common Stock will satisfy the investing requirements of those investors. As a result, the trading liquidity of our Common Stock may not necessarily improve.

As a result of when the post-reverse split price of our Common Stock will be made available upon the anticipated listing of our Common Stock on Nasdaq, potential investors in this Offering will not have an opportunity to check the actual post-reverse split market price of our Common Stock before confirming their purchases of shares of Common Stock in this Offering.

The post-split price of our Common Stock will only be available following the SEC declaring the registration statement of which this prospectus forms a part effective and upon the anticipated initial listing of the Common Stock on Nasdaq, which will occur prior to the closing of the Offering of the Shares. Because such post-reverse split price will not be available until the SEC declares such registration statement effective and in connection with the pricing of this Offering of the Shares and such initial listing, potential investors may not be able to check the actual post-reverse split market price of our Common Stock on Nasdaq before confirming purchases of shares of Common Stock in the Offering.

A significant portion of our total outstanding shares of Common Stock are restricted from immediate resale but may be sold into the market in the near future, which could cause the market price of our Common Stock to drop significantly, even if our business is performing well.

As a result of this Offering and the initial listing of our Common Stock on Nasdaq sales of a substantial number of shares of our Common Stock in the public market could occur at any time, subject to certain restrictions described below. All of the Shares will be freely tradable without restrictions or further registration under the Securities Act, except for any shares held by our affiliates as defined in Rule 144 under the Securities Act (“Rule 144”). These sales, or the perception in the market that holders of a large number of shares of our Common Stock intend to sell shares, could reduce the market price of our Common Stock. After this Offering, assuming no exercise of the Underwriters’ over-allotment option and no exercise of any Underwriters’ Warrants, we will have outstanding 3,451,724 shares of Common Stock based on the number of our shares of Common Stock outstanding as of April 11, 2023, 1,651,919 of which may be resold in the public market immediately without restriction, and the rest of which may be sold pursuant to Rule 144. Also, we intend to register all shares of Common Stock that we may issue under our equity compensation plan on a registration statement on Form S-8. Upon such registration, such shares can be freely sold in the public market upon issuance, subject to the terms of applicable award agreements, volume limitations applicable to affiliates and the lock-up agreements described in the “Shares Eligible for Future Sale” section of this Prospectus.prospectus.

If you purchase our shares of Common Stock in this Offering at the public offering price, you will suffer immediate dilution of your investment.

The public offering price of the Shares will be substantially higher than the net tangible book value per share of our Common Stock. Therefore, if you purchase shares of Common Stock in this Offering at such price, you will pay an public offering price per share of Common Stock that substantially exceeds our net tangible book value per share after such Offering. Based on the assumed public offering price of $[·] per share, you will experience immediate dilution of $[·] per share, representing the difference between the assumed public offering price per share of our Common Stock and our as adjusted pro forma net tangible book value per share of $[·] after giving effect to this Offering of the Shares. See “Dilution.” In addition, to the extent any Underwriters’ Warrants, or any of our outstanding options or other warrants are exercised, you will incur further dilution.


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If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our Common Stock, the price of our Common Stock could decline.

The trading market for our Common Stock may rely, in part, on the research and reports that industry or financial analysts publish about us or our business. If securities analysts do not commence coverage of us, the trading price of our Common Stock could decrease. Additionally, if one or more of the analysts covering our business downgrade their evaluations of our Common Stock, the price of our Common Stock could decline. If one or more of these analysts cease to cover our Common Stock, we could lose visibility in the market for our Common Stock, which in turn could cause our Common Stock price to decline.

The price of our Common Stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our Common Stock in this Offering.

The public offering price for the shares of our Common Stock sold in this Offering will be determined by negotiation between the representatives of the underwriters and us. This price may not reflect the market price of our Common Stock following this Offering. In addition, the market price of our Common Stock is likely to be highly volatile due to many factors, including:

·the success of competitive products or technologies; 

·commencement or termination of collaborations; 

·regulatory or legal developments in the United States and other countries; 

·developments or disputes concerning patent applications, issued patents or other proprietary rights; 

·the recruitment or departure of key personnel; 

·the level of expenses related to any of our product candidates or clinical development programs; 

·the results of our efforts to discover, develop, acquire or in-license additional product candidates; 

·actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; 

·our inability to obtain or delays in obtaining adequate product supply for any approved product or inability at acceptable prices; 

·disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; 

·significant lawsuits, including patent or stockholder litigation; 

·variations in our financial results or those of companies that are perceived to be similar to us; 

·market conditions in the nutraceutical sector; 

·general economic, industry and market conditions; and 

·the other factors described in this “Risk Factors” section. 

An active trading market for our Common Stock may not develop and you may not be able to resell your shares at or above the public offering price.

Prior to this Offering, there has been a limited public market for shares of our Common Stock. Although we have applied to list our Common Stock on Nasdaq, an active trading market for our Common Stock may never develop or be sustained following this Offering. The public offering price of our Common Stock will be determined through negotiations between us and the underwriters. This public offering price may not be indicative of the market price of our Common Stock after this Offering. In the absence of an active trading market for our Common Stock, investors may not be able to sell their Common Stock at or


34



above the public offering price or at the time that they would like to sell. An inactive market may also impair our ability to raise capital by selling shares of our Common Stock and may impair our ability to acquire other companies, products or technologies by using shares of our Common Stock as consideration.

We have broad discretion in the use of our cash, including the net proceeds from the Shares sold in this Offering, and may not use them effectively.

Our management will have broad discretion in the application of our cash, including the net proceeds from this Offering of the Shares, and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our Common Stock. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business or cause the price of our Common Stock to decline. Pending their use, we may invest our cash, including the net proceeds from this Offering of the Shares, in a manner that does not produce income or that loses value.

Raising additional capital may cause dilution to our existing stockholders and restrict our operations.

 

We are bearing all costs relatingwill likely seek to raise additional capital following this offering through a combination of public and private equity offerings, debt financings. To the registrationextent that we raise additional capital through the sale of equity or debt securities, your ownership interest will be diluted and the common stock.    Any commissionsterms may include liquidation or other fees payablepreferences that adversely affect your rights as a stockholder. The incurrence of indebtedness would result in increased fixed payment obligations and could involve restrictive covenants, such as limitations on our ability to brokersincur additional debt, limitations on our ability to acquire or dealers in connectionlicense intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or any sale of the common stock, however, will be borne by the selling shareholdersour product candidates, or other party selling the common stock.grant licenses on terms unfavorable to us.

 

TermsWe will incur increased costs as a result of operating as a smaller reporting public company, and our management will be required to devote substantial time to new compliance initiatives.

As a smaller reporting public company, we will incur significant legal, accounting and other expenses. In addition, the Sarbanes-Oxley Act and rules subsequently implemented by the SEC and Nasdaq have imposed various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance.

Pursuant to Section 404 of the OfferingSarbanes-Oxley Act (“Section 404”), we will be required to furnish a report by our management on our internal control over financial reporting, including an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that neither we nor our independent

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registered public accounting firm will be able to conclude within the prescribed timeframe that our internal control over financial reporting is effective as required by Section 404. This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

 

This Offering commencedBecause we do not anticipate paying any cash dividends on our capital stock in the dateforeseeable future, capital appreciation, if any, will be your sole source of gain.

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the registration statement was declared effective (which also servesgrowth and development of our business. In addition, the terms of any future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our Common Stock will be your sole source of gain for the foreseeable future.


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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

We have made forward-looking statements in this prospectus, including the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include the information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation, and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. These statements are only predictions and involve known and unknown risks and uncertainties, including the risks outlined under “Risk Factors” and elsewhere in this prospectus.

Forward-looking statements contained in this prospectus include, but are not limited to, statements about the following:

·our estimates regarding the potential market opportunity for our products; 

·our ability to identify and develop new product candidates; 

·the anticipated benefits of our pending acquisition of Hyperion and OPM; 

·our ability to identify, recruit and retain key personnel; 

·our commercialization and marketing capabilities and strategy; 

·the implementation of our business model, strategic plans for our business, product candidates and technology; 

·the rate and degree of market acceptance and clinical utility of our products and products in development; 

·our competitive position; 

·our intellectual property position and our ability to protect and enforce our intellectual property; 

·our financial performance; 

·developments and projections relating to our competitors and our industry; 

·our ability to obtain additional funding; 

·our expectations related to the use of proceeds from this Offering; 

·our estimates regarding expenses, future revenue, capital requirements and needs for or ability to obtain additional financing; 

·the impact of laws and regulations; and 

·the impact that general economic conditions and the uncertainty of the U.S. and global economy, particularly the continuing COVID-19 pandemic, inflation in the U.S., globally  


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supply chain disruptions and the sanctions imposed on Russia as a result of its invasion of Ukraine has had and will have on our industry, market, business and product candidates.

Forward-looking statements are subject to a number of significant risks, uncertainties and assumptions, including those described in “Risk Factors” and elsewhere in this prospectus. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this prospectus)prospectus. You should read this prospectus and continues forthe documents that we have filed as exhibits to the registration statement, of which this prospectus is a period of 365 days.part, completely and with the understanding that our actual future results may be materially different from what we expect.

 

Offering Proceeds

Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results, events, levels of activity, performance or achievement. We willare not receiveunder any proceeds from the saleduty to update any of the 3,300,000 shares soldforward-looking statements after the date of this annual report to conform these statements to actual results, unless required by the selling shareholders.  The company will receive $1,650,000 if all the 3,300,000 warrants are exercised at .50 cents per share.law.


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USE OF PROCEEDS

 

DESCRIPTION OF SECURITIES TO BE REGISTEREDWe estimate that the net proceeds from our issuance and sale in this Offering of [·] Shares will be approximately $[·] million (or $[·] million if the underwriters exercise in full their option to purchase additional shares of Common Stock), assuming no exercise of any Underwriters’ Warrants and an assumed public offering price of $[·] per share, and after deducting estimated underwriting discounts and estimated offering expenses payable by us.

Each $0.25 increase (decrease) in the assumed public offering price of $[·] per share and, would increase (decrease) the net proceeds to us from this Offering by approximately $[·] million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and assuming no exercise of any Underwriters’ Warrants, and after deducting the underwriting discounts and estimated offering expenses payable by us. Similarly, each 500,000 increase (decrease) in the number of shares offered by us, as set forth on the cover of this prospectus, would increase (decrease) the net proceeds to us by $[·] million, assuming the assumed public offering price per share remains the same and assuming no exercise of any Underwriters’ Warrants, and after deducting the underwriting discounts and estimated offering expenses payable by us.

As of December 31, 2022, we had cash and short-term investments of approximately $65,000. We intend to use the net proceeds from this Offering, together with our existing cash, as follows:

·approximately $3.1 million to complete the acquisition of Hyperion, L.L.C. and Online Publishing & Marketing, LLC; and 

·any remaining balance for general corporate purposes, including general and administrative expenses and working capital. 

We believe that our current cash, along with the net proceeds from this Offering, will be sufficient for us to fund our operating expenses and capital expenditure requirements into 2024.

The amounts and timing of our actual expenditures will depend on numerous factors, including the amount of cash used in our operations. Although we have no present intention or commitment to do so, we may use a portion of the net proceeds for the acquisition of, or investment in, technologies, intellectual property or businesses that complement our business.

 

Our authorized capital stock consistsexpected use of 75,000,000 shares of common stock, par value $0.001 per share.

Common Stock

The holders ofnet proceeds from this Offering represents our common stock (i) have equal ratable rights to dividends from funds legally available, therefore, when, ascurrent intentions based upon our present plans and if declared by our Board; (ii) are entitled to share in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs; (iii) do not have preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights; and (iv) are entitled to one non-cumulative vote per share on all matters on which stockholders may vote. Reference is made to the Company's Articles of Incorporation, By-laws and the applicable statutes of the State of Nevada for a more complete description of the rights and liabilities of holders of the Company's securities.

Non-cumulative Voting

Holders of shares of our common stock do not have cumulative voting rights; meaning that the holders of 50.1% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, and, in such event, the holders of the remaining shares will not be able to elect any of our directors.

Cash Dividends

business condition. As of the date of this Prospectus,prospectus, we cannot predict with complete certainty all of the particular uses for the net proceeds to be received upon the completion of the Offering or the actual amounts that we will spend on the uses set forth above. We may find it necessary or advisable to use the net proceeds for other purposes, and our management will retain broad discretion over the allocation of the net proceeds of this Offering. Pending the uses described above, we may invest the net proceeds from this Offering in short- and intermediate-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government.

DIVIDEND POLICY

We have not declared or paid anya cash dividend on our capital stock in our last two fiscal years and we do not expect to pay cash dividends on our common stock in the foreseeable future. We currently intend to stockholders.  The declaration ofretain our earnings, if any, for use in our business. Any dividends declared in the future cash dividend will be at the discretion of our Board of Directors and will depend uponsubject to any restrictions that may be imposed by our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions.  It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.lenders.


39



INTEREST OF NAMED EXPERTS AND COUNSEL

None of the below described experts or counsel have been hired on a contingent basis and none of them will receive a direct or indirect interest in the Company.CAPITALIZATION

 

The following table sets forth our cash and cash equivalents and capitalization as of December 31, 2022:

·on an actual basis; and  

·on a pro forma basis, after giving effect to the sale of [·] shares of our Common Stock in this Offering at an offering price of $[·] per share, after deducting the underwriting discounts and estimated offering expenses payable by us, and the issuance of shares of our common stock in the acquisition of Hyperion and OPM. 

The information in this table is illustrative only and our capitalization following the closing of the offering will be adjusted based upon the actual public offering price and other terms of this offering determined at pricing.

Actual

Pro forma as adjusted

Cash and cash equivalents

$

[·]

$

[·]

Capitalization

Current liabilities:

  Accounts payable

[·]

[·]

  Accrued expenses

[·]

[·]

  Short term debt

[·]

[·]

     Total current liabilities

[·]

[·]

Long term debt

[·]

[·]

  Total liabilities

[·]

[·]

Stockholders’ Equity

Common stock, $0.001 par value, 2,500,000,000 shares authorized, 345,172,442 shares issued and outstanding ([·] pro-forma)

[·]

[·]

Additional paid in capital

[·]

[·]

Accumulated deficit

[·]

[·]

  Total stockholders equity (deficit)

$

[·]

$

[·]


40



DILUTION

We are registering for sale to new investors up to [Ÿ] shares at $[Ÿ] per share. Our existing shareholders paid approximately $5.16 per share for their shares. The shares for other existing shareholders may have been paid for in cash, or were issued for assets contributed to us or services provided to us. The following table sets forth on a pro forma basis at December 31, 2022, the differences between existing stockholders and new investors with respect to the number of shares of common stock purchased from us, the total consideration paid to us, and the average price paid per share (assuming a proposed public offering price of $[Ÿ] per share).

 

 

Shares Purchased

 

Total Consideration

 

Average Price
Per Share

 

 

Amount

 

Percent

 

Amount

 

Percent

 

 

 

 

 

 

 

 

 

 

 

 

 

Existing

Stockholders

 

3,451,724

 

63%

$

17,805,071

 

 

[·]%

$

5.16

 

 

 

 

 

 

 

 

 

 

 

New Investors

 

[·]

 

[·]%

$

[·]

 

[·]%

$

[·]

 

 

 

 

 

 

 

 

 

 

 

Total

 

[·]

 

100%

$

[·]

 

100%

$

[·]

The difference between the public offering price per share of common stock and the net tangible book value per share of common stock after this Offering constitutes the dilution to investors in this offering. Net tangible book value per share is determined by dividing the net tangible book value (total assets less intangible assets and total liabilities) by the number of outstanding shares of common stock. The dilution calculations we have set forth in this section reflect an offering price of $[·] per share. 

As of December 31, 2022, we had a net tangible book value of $1,119,772 or $0.32 per share of issued and outstanding common stock. After giving effect to the sale of the shares proposed to be offered in the Offering of [Ÿ] shares, the net tangible book value at that date would have been $[Ÿ]or $[Ÿ] per share. This represents an immediate increase in net tangible book value of $[Ÿ]per share to existing shareholders and an immediate dilution of $[Ÿ] per share to new investors. 

The following table illustrates such per share dilution: 

Proposed public offering price (per share)

 

 

$

[·]

 

Net tangible book value per share at December 31, 2022

$

0.32

 

 

 

Increase in net tangible book value per share attributable to the proceeds of the maximum offering

$

[·]

 

 

Pro forma net tangible book value per share after the offering

 

 

$

[·]

 

 

 

 

 

Dilution to new investors

$

[·]

 

 


41



MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion and analysis should be read in conjunction with and is qualified in its entirety by and should be read together with our financial statements and the related notes thereto appearing elsewhere in this Prospectusprospectus. This discussion contains certain forward-looking statements that involve risks and registration statement on Form S-1uncertainties, as described under the heading “Cautionary Note Regarding Forward-Looking Statements.” Actual results could differ materially from those projected in the forward-looking statements.

Overview

We are a platform for acquiring, developing, researching, patenting, marketing, and distributing plant-based nutraceuticals. Our products have not been evaluated by the FDA or any similar regulatory body for safety and efficacy. Our proprietary and patented products target select high-growth categories within the multibillion-dollar nutraceuticals market, such as heart, brain and immune health.

Guided by this mission, our first two acquisitions formed our current operating subsidiaries, Bergamet, which offers nutraceutical heart and immune health products, and UBN, which offers nutraceutical products for brain health. Through published research, our Bergamet products have been auditedshown to support heart health, support immune response, and address metabolic syndrome.

On January 13, 2023, we entered into a definitive agreement to acquire nutraceutical manufacturer, Hyperion, and its digital marketing affiliate OPM. We intend to use a portion of the proceeds from this offering to fund this acquisition.  Hyperion products have been formulated to support brain, memory, vision, sinus and digestive health, as well as healthy sleep and aging. OPM provides online advertising and marketing for Hyperion as well as other companies in the health and wellness space. The closing of these two acquisitions is expected to occur following the completion of and using the proceeds from this Offering. We anticipate the acquisition of Hyperion and OPM to be transformative to our business, significantly strengthening our manufacturing, marketing and distribution capabilities, expanding our nutraceutical product portfolio, adding positive cash flow, and significantly increasing our annualized gross revenues. Revenues for Hyperion and OPM were over $10 million for the year ended December 31, 2022.

We expect the combination of these synergistic and accretive acquisitions to help accelerate our growth and expand our market reach. Our existing natural heart and brain health formulations are perfect for cross selling with Hyperion’s Green Valley Natural Solutions branded product line. Likewise, we see Green Valley sales benefiting from our established broad marketing channels, which includes subscription-based direct-to-consumer sales, national grocery stores, wholesale distribution, and a strong presence on Amazon.  We also anticipate that the greater financial and operational strength afforded by Paritz & Company, P.A., anthese two acquisitions to better enable us to make future strategic complementary acquisitions, including some of which we have identified and are currently evaluating.

Our Financial Condition and Going Concern Issues

As a result of our financial condition, we have received a report from our independent registered public accounting firm as set forth in their report thereon appearing in this Prospectus and such report is included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing.

INFORMATION WITH RESPECT TO THE REGISTRANT

DESCRIPTION OF BUSINESS

Grey Cloak Tech, Inc., a Nevada corporation (“Grey Cloak” or “the Company”) was established on December 19, 2014. The Company’s business is to developing cloud based software to detect advertising fraud on the internet. According to advertising media executives, click fraud, and fraudulent “bot” traffic will cost the global

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display advertising industry 11.6 Billion in 2014. The Company believes that there is a market for an easy to use fraud protection and quality of traffic system. The Company is located at 10300 W. Charleston Blvd Suite 13-378 Las Vegas, Nevada 89135.

GREY CLOAK TECH INC was incorporated in the State of Nevada on December 19, 2014.  Our fiscal year end is December 31.  The company's administrative address is:

Where you can find us:

The Company is located at 10300 W. Charleston Blvd Suite 13-378 Las Vegas, Nevada 89135.

GREY CLOAK TECH INC has no revenues and had a net loss of $26,309our financial statements for the period sinceyears ended December 31, 2022 and 2021 that includes an explanatory paragraph describing the uncertainty as to our ability to continue as a going concern. From inception (December 19, 2014) through the end of December 31, 2022, we have incurred accumulated net losses of $15,926,742. In order to Januarycontinue as a going concern we must effectively balance many factors and generate more revenue so that we can fund our operations from our sales and revenues. If we are not able to do this, we may not be able to continue as an operating company. At our current revenue and burn rate, we have an immediate cash need, and thus we must raise capital by issuing debt or through


42



the sale of our stock. However, there is no assurance that our existing cash flow will be adequate to satisfy our existing operating expenses and capital requirements.

Results of Operations for the Years Ended December 31, 2015,2022 and 2021

Introduction

We had $322,924revenues of $2,251,469 for the year ended December 31, 2022, as compared to $1,676,598 for the year ended December 31, 2021, an increase of $574,871, or 34%. Our cost of revenue was $879,951 for the year ended December 31, 2022, as compared to $981,520 for the year ended December 31, 2021, a decrease of $101,568, or 10%.

Revenues and Net Operating Loss

Our revenues, operating expenses, and net operating loss for the years ended December 31, 2022 and 2021 were as follows:

 

 

Year Ended

December 31, 2022

 

Year Ended

December 31, 2021

 

Increase/

(Decrease)

 

 

 

 

 

 

 

Revenue

 

$

2,251,469

 

 

$

1,676,598

 

 

$

574,871

 

Cost of Revenue

 

 

879,951

 

 

 

981,520

 

 

 

(101,568)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

2,283,107

 

 

 

2,584,256

 

 

 

(301,148)

 

Total operating expenses

 

 

2,283,107

 

 

 

2,584,256

 

 

 

(301,148)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating loss

 

 

 

 

 

 

 

 

 

 

 

 

Other income/(expense)

 

 

(71,531)

 

 

 

(97,945)

 

 

 

(26,414)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain/(loss)

 

$

(983,121)

 

 

$

(1,987,122)

 

 

$

(1,004,000)

 

Revenues

We had revenues of $2,251,469 and $1,676,598 for the years ended December 31, 2022 and 2021, respectively, an increase of $574,871, or 34%. The increase in revenues was mainly due to our increased focus on the Amazon marketplace. With the additional focus on Amazon marketplace along with adding their fulfillment program, we were able to increase sales through this channel by over $1 million from 2021 to 2022.

Cost of Revenue

Cost of revenue was $879,951 and $981,520 for the years ended December 31, 2022 and 2021, respectively, a decrease of $101,568, or 10%, and consisted of wholesale product costs and packaging. Additionally, most of the variance was due to the increase in the cost of product merchandise sold during the year.  In 2022, most of our items sold had a higher cost due to manufacturing and shipping increases, an increase of $226,169.  But we also recognized a difference in inventory adjustment for the two years.  In 2022 our inventory adjustment was $96,811 compared to $424,548, a decrease of $327,737.  During 2021, we had some raw product that expired, and we wrote off those goods, while in 2022 we did not have any product expire.


43



General and Administrative

General and administrative expense was $2,283,107 and $2,584,256 for the years ended December 31, 2022 and 2021, a decrease of $301,148, or 12%. The decrease was related to the reduction in consulting and professional fees during 2022. In the year ended December 31, 2022, general and administrative expenses consisted mainly of consulting fees of $608,819, broker fees of $383,938, selling expenses of $595,318, accounting and legal fees of $145,062, and salaries and wages of $145,589. In the year ended December 31, 2021, general and administrative expenses consisted mainly of consulting of $1,010,902, selling expenses of $560,883, accounting and legal fees of $323,658, salary and wages of $147,938, and transfer agent and filing fees of $46,778.

Net Operating Gain/Loss

As a result of the items discussed above, our net operating loss was $911,590 and $1,889,177 for the years ended December 31, 2022 and 2021, respectively, a reduction of $977,587, or 52%.

Other Income and Expense

Other income (expense) was $(71,531) and $(97,945) for the years ended December 31, 2022 and 2021, respectively, a decrease of $26,414, or 27%. For the year ended December 31, 2022, our other income (expense) consisted of interest expenses, net of interest income of $(64,690) and change in fair value on derivative of $(9,484), offset by a gain on the sale of asset of $2,643. For the year ended December 31, 2021, our other income (expense) consisted of interest expenses, net of interest income of $(52,453) and change in fair value on derivative of $(85,325), offset by SBA loan forgiveness of $39,833.

Net Gain/(Loss)

Our net gain (loss) for the year ended December 31, 2022 was $(983,121), or $0.00 per share, and our net gain (loss) for the ended December 31, 2021 was $(1,987,122), or $(0.01) per share, a decrease of $1,004,000, or 51%.

Liquidity and Capital Resources

Introduction

During the years ended December 31, 2022 and 2021, we had negative operating cash flows. Our cash on hand at Januaryas of December 31, 2015.  Since2022 was $65,651. Our monthly cash flow burn rate in 2022 (not including inventory purchases) was approximately $28,000. Although we have no revenues,strong short term cash needs, as our operating expenses increase, we have relied uponwill face strong medium to long term cash needs. We anticipate that these needs will be satisfied through the issuance of debt or the sale of our securities to investors and corporate officers and directors for funding.until such time as our cash flows from operations will satisfy our cash flow needs.

 


The company has never declared bankruptcy, been in receivership, or involved in any kind44



Our cash, current assets, total assets, current liabilities, and total liabilities as of legal proceeding.  The company, its officersDecember 31, 2022 and directors, affiliates and promoters, have not and do not intend to enter into negotiations or discussions with representatives or owners of any other businesses or companies regarding the possibility of an acquisition or merger.2021 were as follows:

 

Status of Publicly Announced New Products or Services

 

 

December 31, 2022

 

December 31, 2021

 

Change

 

 

 

 

 

 

 

Cash

$

65,651

 

 

 

$

222,098

 

 

$

(156,447)

Total Current Assets

 

1,990,572

 

 

 

 

2,313,404

 

 

 

(322,832)

Total Assets

 

2,781,118

 

 

 

 

3,029,579

 

 

 

(248,461)

Total Current Liabilities

 

902,788

 

 

 

 

558,841

 

 

 

343,947

Total Liabilities

$

902,788

 

 

 

$

$558,841

 

 

$

343,947

 

None at this time

Competitive Business ConditionsOur cash decreased by $156,447 as of December 31, 2022 as compared to December 31, 2021. Our total current assets decreased by $322,832 because of our decrease in cash, as well as accounts receivable and inventory. Our total assets decreased by $74,371, despite our decrease in current assets, as a result of our increase in prepaid acquisition costs, deposits, and fixed assets (net of accumulated depreciation).

 

Our Mission Statementcurrent and total liabilities increased by $343,947, from $558,841 as of December 31, 2021 to $902,788 as of December 31, 2022. Our total liabilities as of the year ended December 31, 2022 consisted primarily of convertible det of $317,284 and notes payable of $275,370.

 

Mission Statement: The Company’s mission is to provide meaningful ad targeting data to potential business customers that gives the business the best possible chance of providing a profitable interaction with the consumer. The Company’s intended software product, will be on a cloud based platform, and should help reduce the current estimated 30% industry wide fraudulent click rate thus saving marketing dollars for real customers.

Products:The software platform will provide businesses with the ability to seamlessly track who is viewing their customer’s ads and interacting with the businesses digital properties. Grey Cloak Tech owns and is developing the cloud based software, the entire software design is being done internally. Grey Cloak Tech Inc will own all the intellectual property of the software. The software will provide reporting and/or filtering of fraudulent traffic, in addition the software will provide a rating of each connection based on the businesses needs and the likely fit of specific consumer’s and households. Businesses will be able to filter or report on each click or tap using these major categories of data:

1.GEO Location. Is the consumer in my locale?
2.Social Rating. Is the consumer connected others and likely to broadcast my services?
3.Temporal. Is the click coming through at a time that is meaningful for my business?
4.Interested. Does the consumer have an interest in my products and services?

The intended Product offerings that will be available within the Grey Cloak Tech platform will include:

1.Basic Subscription ($1500/mo). This offers reporting on traffic quality and fraud.
2.Pro Subscription ($5000/mo). This offers reporting and blocking on traffic quality and fraud.
3.Campaign Certification ($250/campaign). For our ad agency customers this product can be purchased per/campaign and certifies that the traffic garnered by the campaign was fraud free
4.Reporting ($250/report). This can be purchased on a per HTTP request basis and analyses the amount of fraud and quality of traffic coming to a web site.
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Additional future software products include the release of:

1.Enterprise ($10,000/mo). This product will offer Fortune 1000 and high traffic internet customer’s enterprise level protection and reporting.
2.MCA (Multi Channel Attribution…$8000/mo). The product will correlate digital traffic across enterprise platforms.

Technology: The software application will use a back end system running within the Amazon cloud. The overall system runs over redundant MySql instances using the Amazon SAN for storage of the data. MySql is a relational database management system (RDBMS). MySql is the most widely used open-source (RDBMS) enabling the delivery of reliable, high performance and scalable wed based applications. Amazon SAN (Storage Area Network) is a provider of data storage that offers back-up, durability and availability.

DifferentiationThe Company technical team is familiar with Bot and click fraud detection. The team has developed bots for legitimate purposes and in the past, Mr. Covely has a detailed understanding of the various strategies used by bot programmers to try to make their bots ‘look like’ a human, and knows how to counter their actions.

Grey Cloak’s biggest differentiator is that the proprietary software can determine the overall quality of the traffic, not just the fact that it may or may not be fraudulent. The cloud based software will use various techniques, to form a database that will tell the client about their consumers, their interest and likelihood of having interest in a particular ad or web site, their social influence, and their technology profile (use PC, smartphone, and tablet, or just smartphone, etc.). Using that data the client will not only tell if the traffic is fraudulent, but also if it has real business value.

The Company’s long term vision is to be able to improve the technology to the point that business can use the cloud based software to quickly differentiate high value consumers from low value consumers and then tailor the user experience to their actual business value.

Base Services: The propriety software platform will have the following major components:

·Database services based on MySql
·Web services based on Microsoft.Net
·Membership and authentication services
·Network services for ad serving and click tracking
·GEO services
·Bootstrap Based modern web applications and dashboards

Infrastructure: All Grey Cloak hosted services will use the Amazon EC2 cloud infrastructure. Amazon has data centers in the US, Ireland, Brazil, Singapore, and Tokyo. All of the Grey Cloak services can run in any of the data centers at any time based upon demand. The hosted platform technology will feature load balancing over multiple instances of MySQL and additional load balancing at the web/application service layers of the architecture. Essentially this allows for scalability to very large numbers of concurrent users and clicks.

Intellectual Property Protection and Barrier to Entry:The Company has not filed for any intellectual property protection however the companyintends to file a provisional patent for the connection rating and filtering algorithms. Another patent filing is being considered for our data collection technology. Fred Covely, founder and CEO has extensive patent experience in software applications.

The Market

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Digital Marketing Pay-per-click is one of the fastest-growing segment of all advertising, reports the Interactive Advertising Bureau. The market that Grey Cloak is targeting is benefiting from a multi-decade switch from analog marketing to digital. The US spend on digital marketing is currently at about 50 Billion USD, and growing at roughly 15% annually. Worldwide about 40% of the entire population uses the Internet. About 90% of these users have or use a PC or laptop with another 80% using a smartphone or tablets in addition to or instead of a PC. The growth in digital consumer electronic devices along with the need by businesses to connect with those consumers is driving the digital marketing spend. Furthermore the digital marketing industry is facing a huge and growing problem, and a lack of technical talent.

Click Fraud and Meaningful Digital Interactions:Click Fraud is a type of fraud that occurs on the internet in pay per click online advertising when a person, automated script or computer program imitates a legitimate user of a web browser clicking on an ad, for the purpose of generating a charge per click without having actual interest in the target of the ad's link. There are two primary incentives for committing click fraud. AdWords advertisers may try to attack competitors by raising their costs or exhausting their ad budget. And AdSense publishers that click ads appearing on their own websites inIn order to inflate revenue. Click fraud can be as simple as one person starting a small Web site, becoming a publisher of ads, and clicking on those ads to generate revenue. Often the number of clicks and their value is so small that the fraud goes undetected. Publishers may claim that small amounts of such clicking is an accident, which is often the case. Large-scale fraud will often run scripts which simulate a human clicking on adsrepay our obligations in web pages. Sophisticated scripts can mimic human behavior and use Trojan code to turn the average person's machines into zombie computers and use sporadic redirects to turn the oblivious user's actions into actions generating revenue for the scammer. The five most common methods for carrying out click fraud attacks are: manual clicking, click farms (hiring individuals to click ads), Pay-to-Click sites (pyramid schemes created by publishers), Click bots (large scale software to automate clicking), and Botnets (hijacked computers utilized by click bots). The Fraudlytic software platform will focus on both small and large-scale fraud.

A recent Wall Street Journal (April 2014) article highlighted one of the industries dirty little secrets. About 36% of all website traffic (page views and ad clicks) are fraudulent, and performed by computer programs, (a computer Robot or “Bot”)full or in some cases humans employed solely for the purpose of clicking on ads, with no intention whatsoever to actually buying. The amount of click fraud is difficult to quantify; estimates of the proportion of fake clicks run from as low as 1 in 10 to, as high as 1 in 2. In a widely cited recent study, MarketingExperiments.com, an online marketing research outfit, reported that "as much as 29.5% percent" of the clicks in three experimental PPC (pay per click) campaigns on Google were fraudulent. This is significantly up from an advertising industry claim that in 2009 the click fraud rate was 12.7%. Microsoft in 2011 claimed that click fraud is “rampant” and has evidence of dubious behavior for around half of the search ad clicks and a third of the mobile ad clicks. Whatever the exact figure, click fraud has become pervasive, and Google, Yahoo!, and the other major PPC firms have found themselves caught in a game of cat and mouse with its perpetrators. For now, the search companies, their clients, and industry observers maintain and believe that click fraud is "a billion-dollar mess". According to advertising media executives, fraudulent click fraud, and “bot” traffic will cost the global display advertising industry 11.6 Billion in 2014.

The Company’s software platform is intended to reduce (Standard Version) or eliminates (Pro Version) fraudulent traffic. In addition enterprises have now been confronted with the fact that they really have no idea how their digital marketing spend affects non-digital channels. The software will give them increasing capability in this area. Customers, using Grey Cloak will be able to understand and determine more efficient use of marketing dollars, as well as a better understanding of the real impact of those dollars.

Sales and Marketing:The Company has no sales to date and plans on starting to market the software to customers around April 1 2015.The Company aspires to be the provider of “quality of visitor” information to businesses who use the internet world wide. Our first year efforts will be focused on deploying the software platform to small and medium business.

The initial proprietary Grey Cloak cloud based software will be available to businesses by April 1 2015. The cloud based software will be marketed to small, medium and large businesses using a combination of traditional enterprise software sales techniques, digital marketing, and ad agencies who need better accountability for their customers.

Areas of Sales and Marketing effort include:

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1.Online sales. Grey Cloaks approach here is to use web search, pay per click advertising, and social media advertising to business sales directly to the Company’s website.
2.Affiliate/Dealer sales. The Company believes there is an opportunity to offer its product through an affiliate channel on the web. Affiliates will receive a commission in order to place the product with their customers.
3.OEM/ Original Equipment Manufacturers. There is an opportunity to use existing OEM’s in the computer and software industry to sell the software alongside their current line of products. The Company intends on partnering with others in this area, white labelling, distributing, and bundling the various companys product.

Pricing and Cost Model

Product Pricing: The intended pricing for the products is as follows (all products have caps on usage):

1.Basic Subscription $1500/mo
2.Pro Subscription $5000/mo
3.Campaign Certification $250/campaign
4.Reporting $250/report
3.Enterprise $10,000/mo
4.MCA (Multi Channel Attribution) 8000/mo

The company intends on building a base of revenue that recurs on a monthly basis with some “one time product sales.

One Time Products:To help speed exposure of the product, the Company intends to offer one time products which ad agencies and business can benefit from and the Company can use to gain exposure. The Grey Cloak Tech Campaign Certification program is intended to allow ad agencies to certify for their customers that the campaign traffic they generate is bot and fraud free. The same approach will be used for Reporting, which uses a web sites web server logs to generate a report about traffic quality.

Costs:The software product line will be completely cloud based. We have considerable enterprise expertise on the various components of the Amazon cloud and will be able to very efficiently serve our markets. Estimated hosting cost should never exceed 8% the company’s intended revenue. The remainder of our cost of sales are, marketing, commissions and employee costs.

Dependence on one or a few major customers

We have no clients

Patents, Trademarks, Licenses, Agreements or Contracts

Intellectual Property Protection and Barrier to Entry:The Company has not filed for any intellectual property protection however the companyintends to file a provisional patent for the connection rating and filtering algorithms. Another patent filing is being considered for our data collection technology. Fred Covely, founder and CEO has extensive patent experience in software applications.

Governmental Controls, Approval and Licensing Requirements

We are not currently subject to direct federal, state or local regulation other than the requirement to have a business license for the areas in which we conduct business.

Number of Employees

-31-

During the software development stage, the company will not be paying any salaries and there are no employment agreements. Mr. Covely the Company’s Director, President and Chief Technology Officer will be devoting between 20 and 25 hours per week on software development. Mr. Bossung, the Company’s Director, Secretary and CFO will be spending between 20 and 25 hours per week on company operations and will be receiving $4500 dollars per month as a consulting payment. Upon completion of the software the Company will enter into a formal employment agreement with Mr. Covely for his full time employment. The intended date for Mr. Covely’s full time employment is April 1 2015 and his employment contract will be for 2 years at $9,000 per month. Upon completion of the software the Company will enter into a formal employment agreement with Mr. Bossung for his full time employment. The intended date for Mr. Bossung full employment is April 1 2015 his employment will be for 2 years at $8000 per month. Upon completion of the software the Company intends to enter into a formal employment agreement with Mr. Silver, the company’s Chief Marketing Officer for his full time employment. The intended date for Mr. Silver’s full employment is April 1 2015 his employment will be for 2 years at $7000 per month. The company has no employees at this time. The officers and directors and management are largely donating their time to the development of the company, and intend to do whatever work is necessary to bring us to viability. Fred Covely is currently developing the company’s software. We have no other employees, but do foresee employing Mr. Covely, Mr. Bossung and Mr. Silver upon completion of the company’s software.

Reports to Security Holders

Once this Offering is declared effective, Grey Cloak Tech Inc will voluntarily make available an annual report including audited financials on Form 10-K to security holders.  The Company will file the necessary reports with the SEC pursuant to the Exchange Act, including but not limited to, the report on Form 8-K, annual reports on Form 10-K, and quarterly reports on Form 10-Q.

The public may read and copy any materials filed with the SEC at the SEC's Public Reference Room at 100 F Street NE, Washington, DC 20549.  The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports and other electronic information regarding Rose Rock Inc and filed with the SEC at http://www.sec.gov.

DESCRIPTION OF PROPERTY

The space is being provided by management on a rent free basis.  We have no intention of finding, in the near future, another office space to rent during the development stage of the company.

The company does not currently have any investments or interests in any real estate, nor do we have investments or an interest in any real estate mortgages or securities of persons engaged in real estate activities. Upon completion of the software the Company intends to rent office space. The company will require a small office of approximately 2000 square feet. The estimated cost per month for office space is $2000 and the intended Date is April 1 2015.

LEGAL PROCEEDINGS

We are not involved in any pending legal proceeding nor are we aware of any pending or threatened litigation against us.

MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

No public market currently exists for shares of our common stock.  Following completion of this Offering, we intend to contact a market maker to file an application on our behalf to have our common stock listed for quotation on the Over-the-Counter Bulletin Board.

Of the 14,306,666 shares of common stock currently outstanding as of February 12, 2015, 10,000,000 are owned by our officers and directors and may only be resold in compliance with Rule 144 of the Securities Act of 1933.

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Holders of Our Common Stock

As of the date of this Prospectus statement, we have Forty One (41) stockholders, including management and officers and directors.

Registration Rights

We have no outstanding shares of common stock or any other securities to which we have granted registration rights.

Dividends

The Company does not anticipate paying dividends on the Common Stock at any time in the foreseeable future.  The Company's Board of Directors currently plans to retain earnings for the development and expansion of the Company's business.  Any future determination as to the payment of dividends will be at the discretion of the Board of Directors of the Company and will depend on a number of factors including future earnings, capital requirements, financial conditions and such other factors as the Board of Directors may deem relevant.

Rule 144 Shares

After the date this Prospectus is declared effective, 10,000,000 of our outstanding shares of common stock will be "restricted securities" as defined under Rule 144 promulgated under the Securities Act and may only be sold pursuant to an effective registration statement or an exemption from registration, if available.   Rule 144, as amended, is an exemption that generally provides that a person who has continuously owned shares for a six month holding period may sell the shares, provided the Company is current in its reporting obligations under the Exchange Act. The shares owned by our sole officer and director are considered control securities for the purpose of Rule 144.  As such, officers, directors and affiliates are subject to certain manner of resale provisions, including an amount of restricted securities which does not exceed the greater of 1% of a company's outstanding common stock.  Our officers and directors own 10,000,000 restricted shares, or 69.9% of the outstanding common stock. When these shares become available for resale, the sale of these shares by these individuals, whether pursuant to Rule 144 or otherwise, may have an immediate negative effect upon the price of the Company's common stock in any market that might develop.

Reports

Following the effective date of this Registration Statement,part when due, we will be subjectrequired to certain reporting requirements and will furnish annual financial reports to our stockholders, certified by our independent accountants, and will furnish un-audited quarterly financial reports in our quarterly reports filed electronically with the SEC.  All reports and information filed by us can be found at the SEC website, www.sec.gov.

Transfer Agent

The Company is using Quick Silver Stock Transfer LLC located in Las Vegas NV. Quick Silver is a professional Transfer Agency registered with the U.S. Securities and Exchange Commission.

FINANCIAL STATEMENTS AND SELECTED FINANCIAL DATA

The following financial information summarizes the more complete historical financial information at the end of this prospectus.

-33-

GREY CLOAK TECH INC.

BALANCE SHEET

January 31, 2015

 
ASSETS  
   
CURRENT ASSETS    
   Cash $322,924 
Total current assets  322,924 
     
     
TOTAL ASSETS $322,924 
     
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
LIABILITIES    
  $—   
Total liabilities  —   
     
     
STOCKHOLDERS' EQUITY    
   Common stock, $0.001 par value, 75,000,000 shares authorized,    
      14,296,666 shares issued and outstanding  14,297 
   Additional paid-in capital  334,936 
   Accumulated Deficit  (26,309)
Total stockholders' equity  322,924 
     
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $322,924 
     

GREY CLOAK TECH INC.

STATEMENT OF OPERATIONS

FOR THE PERIOD FROM INCEPTION (DECEMBER 19, 2014) TO JANUARY 31, 2015

 
   
     
REVENUE $—   
     
OPERATING EXPENSES    
    General and administrative  26,309 
     
Total operating expenses  26,309 
     
Net loss before income taxes  (26,309)
     
Income tax provision  —   
     
NET LOSS $(26,309)
     
     
Loss per share - basic and diluted $(0.00)
     
Weighted average number of shares outstanding - basic and diluted  10,966,123 
     
     
-34-

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section of the Prospectus includes a number of forward-looking statements that reflect our current views regarding the future events and financial performance of GREY CLOAK TECH INC.

Results of Operations

We have generated no revenues since inception and have incurred $26,309 in startup expenses through January 31, 2015.

Limited Operating History; Need for Additional Capital

raise significant capital from other sources. There is limited historical financial information about us on which to base an evaluation of our performance.  We are a development stage company and generated no revenues from operations.  We cannot guaranteeassurance, however, that we will be successful in our business operations.  Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in our rebranding efforts, and possible cost overruns due to the price and cost increases in supplies and services.these efforts.

 

At present, we have enoughCash Requirements

Our cash on hand as of December 31, 2022 was $65,651. Our monthly cash flow burn rate in 2022 (not including inventory purchases) was approximately $28,000. Although we have strong short term cash needs, as our operating expenses increase, we will face strong medium to coverlong term cash needs. We anticipate that these needs will be satisfied through the developmentsale of the software, the completion of the web site, legal and accounting expenses and start initial marketing of the company’s product.

While our officers and directors have generally indicated a willingness to provide services and financial contributions if necessary, there are presently no agreements, arrangements, commitments, or specific understandings, either verbally or in writing, between the officers and directors and GREY CLOAK TECH.securities until such time as our cash flows from operations will satisfy our cash flow needs.

 

If weSources and Uses of Cash

Operations

Our net cash used in operating activities for the years ended December 31, 2022 and 2021 $334,964 and $901,298, respectively, a decrease of $566,334, or 63%. Our net cash used in operating activities for the year ended December 31, 2022 consisted of a net loss of $983,121 offset by an adjustment for warrants issued for services of $402,100, an increase in inventory of $138,838, and an increase in accounts payable of $54,048. Our net cash used in operating activities for the year ended December 31, 2021 consisted primary of a net loss of $1,987,122, plus a decrease in accounts receivable of $120,066, offset by an adjustment for warrants issued for services of $608,836 and changes in inventory of $459,717.

Investments

Our cash flow provided by (used in) investing activities for the years ended December 31, 2022 and 2021 was $7,987) and $(96,004), respectively, a decrease of $88,017. All of our investing activities in 2021 was as a result of a reduction in the value of our trademarks.


45



Financing

Our net cash provided by financing activities for the years ended December 31, 2022 and 2021 was $186,504 and $1,160,199, respectively, a decrease of $973,695, or 84%. The decrease in 2022 was due to proceeds from the issuance of convertible debt of $463,630 and from the issuance of notes payable of $275,370, offset primarily by the repayment of convertible debt of $318,095 and repayment of notes payable of $170,000.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in our consolidated financial statements and related notes. Our significant accounting policies are unabledescribed in Note 2 to meet our needsconsolidated financial statements included in our Annual Report on Form 10-K for cashthe year ended December 31, 2022. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from either our potential revenues or possible alternative sources, then wethese estimates and such differences may be unablematerial.

Management considers the following policies critical because they are both important to continue, develop, or expandthe portrayal of our operations.


Critical Accounting Policiesfinancial condition and operating results, and they require management to make judgments and estimates about inherently uncertain matters.

 

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

 

Recent Accounting Pronouncements

 

ManagementOur management has considered all recent accounting pronouncements issued since the last audit of the Company'sour financial statements. The Company'sOur management believes that these recent pronouncements will not have a material effect on the Company'sour financial statements.

 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREInventory

 

NoneInventories consist of health supplements held for sale in the ordinary course of business. The Company uses the weighted average cost method to value its inventories at the lower of cost and net realizable value. The components of inventory cost include raw materials, labor, and overhead.  Net realizable value is determined using various assumptions with regard to excess or slow-moving inventories, expiration dates, current and future product demand, production planning, and market conditions.  A change in any of these variables could result in an adjustment to inventory.

An allowance for inventory was established in 2018 and is evaluated each quarter to determine if all items are still sellable due to expiration dates. As of December 31, 2022 and 2021, the total of inventory which was written off as an inventory allowance was $1,914,891 and $1,914,891.


46



 

 

December 31,

 

 

December 31,

 

 

2022

 

 

2021

Inventory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventory Classes:

 

 

 

 

 

 

 

 Raw Materials

 

$

1,483,764

 

 

$

1,757,808

 Finished Goods

 

 

310,600

 

 

 

194,490

 Work in process

 

 

24,764

 

 

 

5,668

Total inventory

 

 

1,819,128

 

 

 

1,957,966

Revenue Recognition

We apply Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) topic 606, Revenue from Contracts with Customers (ASC 606).  ASC 606 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes all of the existing revenue recognition guidance.  This standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  ASC 606 requires us to identify distinct performance obligations.  A performance obligation is a promise in a contract to transfer a distinct good or service to the customer.  When distinct performance obligations exist, we allocate the contract transaction price to each distinct performance obligation.  The standalone selling price is used to allocate the transaction price to the separate performance obligations.  We recognize revenue when, or as, the performance obligation is satisfied.

Generally, revenues are recognized at the time of shipment to the customer with the price being fixed and determinable and collectability assured, provided title and risk of loss is transferred to the customer.  Most of our shipping and handling costs are built into the transaction price, but if the customer asks for express shipping, the costs charged to customers are classified as sales, and the shipping and handling costs incurred are included in cost of sales.

Our subsidiary, BergaMet N.A., LLC, recognizes revenue from our main source – e-commerce revenue.  Our sales channels include Bergmet’s website channel or any other selling channel like Amazon, doctors’ offices, and walk-in sales.  All of our customer sales for Healthy Extracts Inc. and Ultimate Brain Nutrients, LLC are recognized as revenue under the subsidiary of BergaMet N.A., LLC.  All three divisions of the Company sell plant-based nutraceuticals to our end using customers.

We evaluate the criteria outlined in ASC 606-10-55, Principal versus Agent Considerations, currently we are the principal and have not engaged any agents at this time.  Currently, we have not recognized any revenues under the agent considerations.

Revenue is recognized when, or as, control of a promised merchandise or service is shipped to the customer, in an amount that reflects the consideration to which we expect to be entitled in exchange for transferring title of those products or services and are recorded net of and discounts or allowances.  Shipping costs paid by the customer are included in revenue.  Merchandise sales are fulfilled with inventory held in our warehouse in Henderson, NV.  Therefore, our contracts have a single performance obligation (shipment of product).

If we receive a request for refund on a customer obligation, we will refund the full cost of the obligation due to our money back guarantee.


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Revenue recognition is evaluated through the following five-step process:

1.identification of the contract with a customer; 

2.identification off the performance obligations in the contract; 

3.determination of the transaction price; 

4.allocation of the transaction price to the performance obligations in the contract; and 

5.recognition of revenue when or as a performance obligation is satisfied. 

These steps are met when an order is received, a price agreed and the product shipped or delivered to that customer.


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BUSINESS

Overview

We are a platform for acquiring, developing, researching, patenting, marketing, and distributing plant-based nutraceuticals. Our proprietary and patented products target select high-growth categories within the multibillion-dollar nutraceuticals market, such as heart, brain and immune health.

Our current principal markets are nutraceutical products targeting customers focused on their own heart and brain health and immune support. Our products have not been evaluated by the FDA or any similar regulatory body for safety and efficacy.

The term “nutraceutical” is derived from the combination of the words “nutrient,” which means a nourishing food component, and “pharmaceutical,” meaning a medical drug. The term was coined in 1989 by Stephen DeFelice, founder and chairman of the Foundation for Innovation in Medicine.

Nutraceuticals are generally considered to be substances that beyond their nutritional value can be used as medicine to achieve a benefit for an existing physiological condition or provide protection against potential aliments. Nutraceuticals may be used to improve health, delay the aging process, help prevent chronic disease, increase life expectancy, or support the structure or function of the body.

In the U.S., nutraceutical products are regulated as drugs, food ingredients and dietary supplements. The term is not defined the same in all countries but is usually defined as a product isolated from foods and generally sold in medicinal forms not usually associated with food.

The primary philosophy behind nutraceuticals is the focus on prevention and the body’s ability use natural rather artificially derived substances to treat disease or dysfunction—or as the Greek physician and father of modern medicine, Hippocrates, famously espoused, “Let food be your Medicine.”  

Today, the role of nutraceuticals in human health and wellbeing has become one of the most active and important areas of scientific investigation, with the latest findings presenting wide-raging implications for consumers, health care providers, regulators, nutritional supplement producers and distributors. Our mission is to lead and support this investigation and use our findings to acquire or create products with health and performance benefits that have mass consumer appeal.

Guided by this mission, our first two acquisitions (in 2019 and 2020, respectively) formed our current operating subsidiaries, Bergamet, which offers nutraceutical heart and immune health products, and UBN, which offers nutraceutical products for brain health.

Through published research, our Bergamet products have been shown to support heart health, support immune response, and address metabolic syndrome. Our UBN brain health formulations have been in development for more than 20 years, over which time it has gained support by research studies.

On January 13, 2023, we entered into a definitive agreement to acquire nutraceutical manufacturer, Hyperion and its digital marketing affiliate OPM, both based in Lexington, Virginia. We intend to use a portion of the proceeds from this offering to fund this acquisition.  See “Use of Proceeds.”

Hyperion products have been formulated to support brain, memory, vision, sinus and digestive health, as well as healthy sleep and aging. OPM provides online advertising and marketing for Hyperion as well as other companies in the health and wellness space. The closing of these two acquisitions is expected


49



to occur following the completion of and using the proceeds from this Offering. See “Recent Developments – Acquisitions.”

We anticipate the acquisition of Hyperion and OPM to be transformative to our business, significantly strengthening our manufacturing, marketing and distribution capabilities, expanding our nutraceutical product portfolio, adding positive cash flow, and significantly increasing our annualized gross revenues. Revenues for Hyperion and OPM were over $10 million for the year ended December 31, 2022.

We expect the combination of these synergistic and accretive acquisitions to help accelerate our growth and expand our market reach. Our existing natural heart and brain health formulations are perfect for cross selling with Hyperion’s Green Valley Natural Solutions branded product line. Likewise, we see Green Valley sales benefiting from our established broad marketing channels, which includes subscription-based direct-to-consumer sales, national grocery stores, wholesale distribution, and a strong presence on Amazon.

We also anticipate that the greater financial and operational strength afforded by these two acquisitions to better enable us to make future strategic complementary acquisitions, including some of which we have identified and are currently evaluating.

Our Products

Heart & Immune Health

Our products which are designed to promote heart and immune health have been developed by our BergaMet subsidiary. Bergamot Polyphenolic Fraction Gold (“BPF”) is the active ingredient in these products, and our  47% BPF Bergamet products are currently the only heart health supplements distributed in North America that contain Citrus Bergamot SuperFruit. This exclusive superfruit is of the bergamot orange family, a fragrant citrus fruit about the size of a common orange but with a yellow or green color similar to a lime, depending on its ripeness.

Our Citrus Bergamot SuperFruit varietal is considered a superfruit since it has been shown to have the highest quality and concentration of polyphenols and flavonoids of the citrus bergamia or bergamot orange fruit species. BPF is comprised of five key polyphenols (Naringin, Neohesperidin, Brutieridin, Melitidin, and Neoeriocitrin). These five polyphenols are known to increase the product’s effectiveness, and thus its existence is viewed as a positive factor in its efficacy, and our product has a polyphenolic rate of 47%.

BergaMet currently holds the exclusive rights to distribute Citrus Bergamot SuperFruit 47% BPF products in the online and direct to consumer channels in the U.S. and Canada pursuant to a supply agreement with H&AD S.r.L., an Italian limited company, which we entered into on January 1, 2019 and amended on November 1, 2021. The supply agreement has a term of five years and is renewable for up to four additional and successive three-year terms. We have minimum purchase obligations under the agreement, which require us to purchase at least 4,000 kilograms of BPF in 2023. The agreement is mutually exclusive in that (i) we cannot purchase BPF from any third-party, sell or distribute any similar product in the territory, sell the product outside the territory, or produce the product ourselves, and (ii) H&AD will not supply or sell the product to any third-party in the territory. Each party may terminate the agreement upon a breach by the other party. 

Bergamot is a rare citrus fruit native to the Calabrian region of Southern Italy. Due to the fruit’s sensitivity to certain weather and soil conditions, this region accounts for 80 percent of the worldwide production of bergamot. Bergamot has been used for decades in the Calabrian regions for its beneficial


50



effects in promoting overall health, particularly in support of cholesterol, cardiovascular, and metabolic health.

Our Citrus Bergamot SuperFruit formulations contain citrus bergamot extracts approved by the prestigious Academia Del Bergamotto in Reggio Calabria, Italy.

Citrus bergamot contains five antioxidant polyphenols in unusually concentrated amounts, which are believed to help protect the human body’s trillions of cells from free radical damage. The juice and albedo of bergamot has a profile of flavanoid and glycosides, such as neoeriocitrin, neohesperidin, naringin, rutin, neodesmin, rhoifolin, and poncirin.

Naringin has been shown to be beneficial in animal models of atherosclerosis, while neoeriocitrin and rutin have been found to exhibit a strong capacity to prevent low-density lipoprotein (“LDL”) from oxidation. Importantly, bergamot juice is rich in brutieridine and melitidine with an ability to inhibit HMG-CoA reductase, which inhibits the liver’s ability to produce LDL, resulting in reduced cholesterol levels in liver cells.

Bergamot Products

We develop, manufacture and distribute bergamot-based products in tablet and capsule form under the following brands:

·BergaMet Pro+ 

·BergaMet Mega+O 

·BergaMet HERHEART 

·BergaMet Cholesterol Command 

·BergaMet SPORTSHEART 

·BergaMet CLINICAL IMMUNE 

Picture 

All of our BergaMet products are certified organic, vegan friendly, non-GMO and gluten-free, and produced and tested by certified U.S. facilities.

In published research, our Citrus Bergamot has been shown to support heart health, support immune response and address metabolic syndrome. Our Citrus Bergamot has also been shown to naturally reduce cholesterol by lowering LDL and increasing high-density lipoprotein (“HDL”).

According to the CDC, nearly 94 million U.S. adults aged 20 years or older have high cholesterol levels that puts them at risk of heart disease. Every year an estimated 35 million people are prescribed


51



statins to lower cholesterol, according to drugs.com, but these drugs can cause numerous negative side effects.

A peer-reviewed study demonstrated that the naturally-derived, bergamot polyphenolic fraction (BPF) contained in our Citrus Bergamot can significantly enhance the beneficial effects of rosuvastatin, one of the most prescribed drugs for reducing cardiometabolic risk.

Brain Health

Our UBN subsidiary develops plant-based health technology neuro-products that have been shown to improve brain health, including memory, cognition, focus and neuro-energy. UBN's mission is to naturally create better lifestyles with superior health technology and products.

UBN’s KETONOMICS® proprietary formulations, which have been designed to enhance brain activity, focus, headache and cognitive behavior, provide many sales and intellectual property licensing opportunities.

UBN’s all-natural, sugar-free and caffeine-free proprietary formulations are the result of 20 years of scientific research and are positioned to provide consumer neuro-products that are natural brain solutions.

UBN’s KETONOMICS® supplementation has also been studied in sports physiology, with specific regard to its potential benefits for competitive performance and endurance.

UBN offers several proprietary products, with four patent-pending formulations and two patents issued covering brain activity, focus, headache and cognitive behavior.

UBN Products

We have launched four brain health products based upon our proprietary Fuel4Thought® (F4T®) formulations. These brain health products are sold under the following product labels:

·UBN ACTIVATE: a proprietary natural formulation that has been demonstrated to increase key brain activity by as much as 46%. This product is sold direct-to-consumer via our UBN website, either as a singular sale or monthly subscription. 

·UBN RELIEF: designed for migraine sufferers, this proprietary, patent-pending natural formulation has been shown to provide relief from symptoms often associated with migraine headaches, while also increasing brain and cognitive activation. This product is sold direct-to consumer on our website as singular sale or monthly subscription, as well as sold in the retail marketplace. 

·Brain Activate - Gel, a proprietary gel pack formulation which was launched in collaboration with and under the brand name of our top brand influencer, Whitney Johns. The concentrated natural gel formulation provides the perfect “brain food” for sustained mental energy and attention without added sugars. It is sold direct-to-consumer on whitneyjohns.com as a singular sale or by subscription. The gel packs are based on patented gel science developed by Gelteq, a global leader in ingestible gel technology. Gelteq gels offer a super-convenient way to consume substances that have a positive impact on mental skills (sometimes referred to as “nootropics”) and other nutrients.  

·Brain Activate - ENERGY Gel: a proprietary gel pack nootropic formulation with caffeine. It is specially formulated to support focus, memory, cognition, mood and brain health, as well as reduce brain fog and support natural sleep patterns. The product was  


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developed and launched in collaboration with Whitney Johns, and is sold direct-to-consumer on whitneyjohns.com as a singular sale or monthly subscription.

Our F4T® formulation includes C8 MCT (derived from coconut extract), Nuementix (spearmint), FloraGLO, and highly concentrated medium chain triglycerides, F4T® MCT, which are derived from our patented extraction process. F4T® C8 MCTs have been shown to elevate the level of ketones in the brain—a major alternative energy source. “C8” refers to the eight-carbon chain that characterizes this specific fatty acid. As a result, manufacturers have taken to purifying MCT oil derived from coconuts so it contains only caprylic acid. That's because caprylic acid (C8) seems to be the most metabolically active medium-chain fatty acid.

The F4T® formulation also includes a proprietary blend of other key ingredients, including a naturally sourced nootropic spearmint extract that is demonstrated to support mental focus during the day without disrupting sleep at night and a protective antioxidant found naturally in the body that helps the brain function optimally and promotes better mood and sleep habits. It also includes a natural marigold extract that is scientifically shown to block blue light and replenish lutein, which is critical for optimum eye health. The formulation has been in development for more than 20 years, over which time it has gained support by research studies

Picture 

The above EEG brain scan images are from a study that showed a 46% increase in brain activation after a subject consumed our active ingredients. The concentrated formulation provides the perfect “brain food” for sustained mental energy and attention. There can be no assurance that our formulations will produce the same results as this study using just our active ingredients.

The brain activation described above is measured by electroencephalographic (EEG) electrodes placed on the surface of the skull overlying the major anatomic lobes of the brain (frontal, parietal, temporal, occipital). The activation is measured in microvolts of energy and reflects brain physiological function; the higher the voltage, the higher the functional activity. Functional magnetic resonance imaging (fMRI) of the brain has documented correlation between performance and health tasks and the “lighting up” of the relevant brain cortex areas. Activation of the following areas correlate with the related desirable brain function: frontal lobe - cognition, integration; parietal lobe - sensory, awareness, spatial orientation; temporal lobe - motor, language, memory; occipital lobe - visual function. The subjects in our intervention groups consumed the active supplement containing our formulation of C8 MCT, Neumentix, and Floragio. In the acute study, the assessments were made 90 minutes after consumption and in the long-term study, the assessments were made 30 days after consumption. Study one (acute) had 11 subjects (8 intervention and 3 control) and study two (long term) had 18 subjects (13 intervention and 5 control). Subjects underwent EEG voltage measurement with auditory reaction time (WaviMed System) and vision and trail making testing (Senaptec Sensory Station). Brain activation improved in 20 of the 21 intervention group subjects with voltage increases ranging from no change to 200%,, average 46% increase. This activation level


53



correlated positively with improvements in reaction time, vision and trail making tests. Parameter changes were statistically significant with a strong improvement trend for the auditory reaction time measures. The tests were conducted by Dr Neil Wolkodoff in a strict prospective, randomized manner. The results were double blinded with regard to intervention versus placebo group results and all data was deposited into a blind pool until completion of the trials when the results were unblinded and statistically analyzed. An independent third party transposed the EEG voltage readings into a computer generated “brain image” for peer reviewed publication purposes. No caffeine, steroids or other stimulants were consumed by any study subjects.

In January 2022, the World Journal of Advanced Research and Reviews published the results of a clinical study which showed that taking a daily serving of UBN RELIEF for 60 days can naturally reduce or alleviate neurological discomfort. It was also shown to improves cognitive function, sleep satisfaction and overall quality of life.

We are in the research and development phase for new products focused on Alzheimer’s disease and dementia. We are finalizing research on additional non-FDA approved, brain health products which focus on dementia and Alzheimer’s disease. We expect to have research completed in 2024.

Gel-Pack Exclusive Licensing and Manufacturing Agreement

In August 2021, we signed an exclusive U.S. and Canada licensing and manufacturing agreement with Gelteq, a third party developer of ingestible gel technology, under which we agreed to develop and manufacture an advanced oral delivery system for our plant-based heart, immune and brain health formulations. The agreement has a three-year term and can be terminated by either party in the event of a breach, and contains a minimum order amount of 500,000 units of product (of which 250,000 units must have been purchased during the first 12 months). The agreement is mutually exclusive in that Gelteq is to be the exclusive manufacturer of all gel products that contain bergamot by us in the territory, and that they will not manufacture gels containing bergamot for any other company in the territory. Finally, we paid Gelteq a license fee of $150,000 and 5% of the total price of products purchased by us.

Picture 

Through this agreement we secured the exclusive rights to use Gelteq’s gelification process in the U.S. and Canada for the development and marketing of natural ingestible gels that contain our Citrus Bergamot or UBN ingredients. Among the many benefits, we believe our new exclusive gel pack format will make our products easier and more convenient to consume.

Citrus Bergamot has been traditionally taken in tablet form which presents several drawbacks. Tablets require a liquid to facilitate swallowing or prevent choking (which still may occur), and proper digestion and absorption can sometimes be challenging. The liquid extract form of Bergamot is typically not preferred due to its unpleasant bitter taste.

The proprietary ingredients used in in our UBN product line are typically available in powder form, with this requiring it be mixed with a liquid in a separate container. This can be messy and inconvenient for today’s on-the-go lifestyles. In contrast, a single-serving, gel pack containing our health-promoting formulations can be easily consumed anytime, anywhere with no liquid or mixing required.

We also believe this gel-based oral delivery technology can be superior to pills, tablets, powders and other delivery methods in terms of greater bioavailability, targeted release times and pleasant taste, while reducing the risk of choking.


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Picture

We have launched two gel pack products using our patent-protected Fuel4Thought® (F4T®) formulation with Whitney Johns, including Brain Activate - Gel (without caffeine) and Brain Activate - ENERGY Gel. We plan to next introduce heart and immune health gel packs that exclusively feature Citrus Bergamot SuperFruit in 2024.

Our Markets

The overall nutraceutical market is growing at a 7.8% CAGR and is expected to reach $441 billion by 2026, according to ReportLinker. Driving this growth are multiple factors, including changing lifestyles, growing consumer desire to move away from expensive prescription medicine and undesirable side effects, aging population and increased life expectancy. Our current principal markets are nutraceutical products targeting customers focused on their own heart and brain health and immune support.

A growing self-care trend is also driving strong demand for nutraceuticals. Given increasingly hectic lifestyles, and the lack of time for preparing and consuming the required nutrients through a regular diet, the desire to replenish or augment essential nutrients with nutraceuticals is also increasing.

Our BergaMet all-natural Citrus Bergamot SuperFruit formulations address an expanding global heart health ingredients market that is projected to grow at a 4.6% CAGR to reach $55.3 billion by 2027, according to ResearchAndMarkets. This growth is largely being driven by concerns about cardiovascular disease, which remains the leading cause of premature death globally according to the World Health Organization.

Our UBN products tap the fast-growing market for brain health, which is growing at a 9.4% CAGR to reach $15.7 billion by 2030, according to Grandview Research. This market is being driven in part by the rise in the aging adult population in North America and Europe, with consumers increasingly using brain health supplements to prevent or treat mental conditions such as memory loss or dementia, or to improve mental cognition, energy and focus.

Americans consume unhealthy energy shots and drinks every day, with this alone generating over $12.5 billion per year in industry sales. Within this growing market, UBN is advancing its position to meet rising consumer demand for healthy options backed by research studies. Our KETONOMICS® proprietary


55



formulations have been proven to naturally elevate brain energy and function, including memory, cognition and focus.

Our UBN RELIEF product for migraine suffers also address a huge market opportunity, with an estimated 39 million people suffering from migraine headaches in the U.S. and 1 billion worldwide, according to the American Migraine Foundation.

We anticipate launching a gut health gel pack. The new gut health product will allow us to address a large and expanding global gut health market that is growing at a 7.9% CAGR to reach nearly $72 billion by 2027, according to Fortune Business Insights. Our gut health (the balance between helpful and harmful bacteria and yeast in the digestive system) products are in the early stages of design and development and we have not begun development of any gut health products yet, nor do we have any data that supports that our anticipated formulations will improve gut health.

Picture 

Go-to-Market Strategy

Our approach to the market has been to implement a multi-channel marketing strategy that includes major eCommerce websites, distributors, white and private label, direct-to-consumer, influencer and affiliate programs, and traditional retail marketplaces.

As a key part of our multi-channel strategy, Amazon.com has been generating strong sales, particularly with its popular ‘Subscribe & Save’ option helping to further expand our recurring revenue stream. Amazon complements our director-to-consumer channel on our BergaMet and UBN websites that offer a subscription-based option. Last year our Citrus Bergamot SuperFruit formulations also became available for purchased on Walmart.com.

In the third quarter of 2022, we launched our premium Citrus Bergamot SuperFruit heart health supplement, BergaMet PRO+, on Fullscript.com, the nation’s leading care delivery platform for integrative medicine. This made BergaMet PRO+ available to the more than 70,000 healthcare professionals and their more than 5 million patients on the Fullscript care platform.

The Fullscript launch followed the entry of our natural formulations for brain health into the retail marketplace through Natural Grocers stores nationwide. Natural Grocers is the nation's largest family-operated organic and natural grocery retailer. The retailer also provides extensive free nutrition education programs that help consumers make informed nutritional health choices. The initial two products sold by Natural Grocers where our Ultimate Brain Nutrients (UBN) ACTIVATE and UBN RELIEF.

Influencer Program


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We introduced our influencer program in the Fall of 2021 as a cost-effective and efficient way to expand our sales, brand awareness and market share. According to the social commerce platform Poshmark, about 41% of consumers discover new brands from influencers and 33% through social media marketing.

We believe our influencer program is ideally suited for influencers who have more than 500,000 followers in the health and wellness, sports and healthcare markets, and particularly those who would like to enhance their personal brand with unlimited revenue potential. Through this program, qualified influencers can easily introduce their own personally branded nutraceutical products, with Healthy Extracts providing the backend of product development, manufacturing, distribution, order fulfillment and customer service.

As our first major influencer under this program, we teamed with popular fitness coach and entrepreneur, Whitney Johns.Whitney is an accomplished fitness athlete, model, personal trainer and nutrition advocate who has garnerd more than a million followers across Instagram, Facebook, TikTok, Twitter, and YouTube. Some of her popularity is due to her personalized diet and fitness program, Find Your Fit with Whit, which helps individuals from all walks of life achieve their personal nutritional and fitness goals. We entered into a Private Label Agreement with her on October 11, 2021, pursuant to which we granted her the exclusive right to private label our products in the field of female fitness. The agreement is for three years and was subsequently verbally amended for us to pay her a flat monthly fee of $4,000 instead of the sales and volume-based compensation model in the original agreement. The verbal amendment will be in place until otherwise agreed between the parties.

Whitney Johns’ new product line of brain, physical performance and women’s hormone health products are based upon our proven all-natural Citrus Bergamot SuperFruit and Ultimate Brain Nutrients formulations. This means they are also vegan-friendly, non-GMO, gluten-free and organic, and made in a certified U.S. facility. Moreover, they are supported by our extensive catalog of published clinical research, which helps influencers like Whitney to provide their full-throated endorsement of our proprietary formulations.

The first Whitney products have included Whitney Johns Nutrition BRAIN ACTIVATE (in powder and gel format), ACTIVE for enhanced physical performance, and WOMEN’S HORMONE SUPPORT.These products are available from whitneyjohns.com as well as on Whitney’s Amazon.com store, with both channels offering subscription options.


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Picture 

Future Growth Drivers

New Sales Channels and Product Launches

In order to drive continued sales growth and leverage our growing customer base, we are planning to expand our product portfolio to include supplements that support gut health as well as introduce more products in gel-pack format. We anticipate this to include a new Whitney Johns gut health gel-pack as well as a new gel pack option for our Ultimate Brain Nutrients RELIEF.

We plan to further expand our sales channels as well as our portfolio of natural formulations for heart and brain health and other indications.

Strategic Acquisitions

The market for nutraceutical products is highly fragmented, which create many acquisition opportunities. As part of our primary mission, we will continue to evaluate potential acquisition opportunities that could expand our product portfolio and benefit from our marketing strength and multi-channel distribution.

We anticipate that the greater financial and operational strength afforded by the aforementioned planned acquisitions of Hyperion and OPM will better enable us to make future strategic complementary acquisitions.

Intellectual Property

Patents

We have filed formulation patent applications related to general brain health as well as patents particularly focused on migraine headaches. The platform includes general utility patents with additional disclosure of methods of manufacture as indicated below. Categories of ingredients are listed in both the independent (standalone) and the dependent (successor claims with specifics, variations and limitations) claims. “Comprising” language is utilized wherever it is allowed by the U.S. Patent and Trademark Office (PTO) whereby the patented formulation includes but is not limited to the elements listed in the claim.


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Markush groups and claims are used so that categories can include alternative ingredients from a selected group that share structural similarities or common functions. Expiration dates for issued patents are listed and expiration for pending patents will be 17 years after the date of issuance.

 

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKProphylaxis and Mitigation of Migraine Headaches Using Medium Chain Triglycerides, Ketone Ester, and Other Ketogenic Sources.

Not applicable Filed January 10, 2018 (PTO Application No. 15/743,448); pending approval. “Parent Patent” related to smaller reporting companiesmigraine headaches and covers the methods of reducing frequency of migraine onset and symptoms as well as augmenting the effects of pharmaceutical and non-pharmaceutical inventions. Includes techniques of providing adequate levels of dietary ketogenic MCT. The invention provides a mixture of caprylic and capric acids; these triglycerides may either be enriched or purified with coconut oil. Relates to Activate product line.

 

DIRECTORS AND EXECUTIVE OFFICERSProphylaxis and Mitigation of Migraine Headaches Using Medium Chain Triglycerides, Ketone Ester, and Other Ketogenic Sources. Filed April 22, 2019 (PTO Application No. 16/501,502); pending approval. “Divisional” filing from the “Parent” to address restriction requirements and identifies additional distinct claims. Relates to preventing, arresting or reducing the frequency and severity of a migraine headache. Additional filing September 30, 2020 (PTO Application No. 17/011/650); pending approval. This composition is comprised of a dietary ketone wherein this unique ingredient is designed to address migraines with disclosure of a related method of manufacture. The supplement manufacturing method also contains ketogenic MCT in combination with a pharmaceutical agent. Relates to the Activate product line.

Compositions of Medium Chain Triglycerides and Plant-Based Nutrients for Brain Health. Filed December 19, 2018 (PTO Application No. 16/350,663); response to PTO comments September 9, 2019; written amendment acknowledged; pending approval. Relates to enhancement of metabolic energy pathways to improve attention, cognition, memory, analytical and executive functions. Formulation categories include medium chain triglycerides (MCT), polyphenol-rich phytonutrients, brain carotenoid antioxidants, dietary vitamins and minerals and miscellaneous nutrients. Relates to Activate and BergaMet product lines.

Compositions of Ketogenic Sources, Micronutrients and Phytochemicals for Prophylaxis and Mitigation of Migraine Headache. Patent issued December 10, 2019 (Patent No. 10,500,182). Expiration December 10, 2036. This “Continuation-in-Part” filing from the “Parent” repeats a portion of the original specifications but adds subject matter not previously disclosed. Relates to preventing, arresting or reducing the frequency and severity of a migraine with disclosure of the method of manufacture. The comprehensive composition of categories includes ketogenic sources, phytonutrients, vitamins, mineral co-factors, antioxidants and miscellaneous nutrients. Relates to the Activate product line.   

Compositions of Ketogenic Agents, Cannabinoids, Plant-Derived Substances and Micronutrients. Patent issued February 9, 2021 (U.S. Patent No. 10,912,758). Expiration February 9, 2038. Relates to modulation of metabolic pathways to benefit human performance, endurance and cardiometabolic health as well as improving cognition, executive function and women’s health. Formulation categories include ketogenic agents, cannabinoids, polyphenols, dietary nutrients, antioxidants and mineral co-factors. Relates to Activate and BergaMet product lines. Contains ability to include hemp-derived cannabinoids in unique product formulations whenever allowable under federal law.

Qualified Health Claim (QHC)

We filed a QHC petition for Fuel for migraine health with the Center for Food Safety and Nutrition of the FDA in July 2019. The preponderance of third-party scientific evidence to support the claim has been submitted. The FDA acknowledged that our petition met the requirements under 21 CFR 101.70 and was


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submitted in the proper legal format. In light of increased administrative burdens from the COVID-19 pandemic, the FDA has requested extended decision delays to which we agreed. A final decision is now expected before the end of 2023.

Trademark

A trademark owned by us that supports the entire brain health product platform is: KETONOMICS. The trademark received registration approval April 29, 2014 (Registration Number 4523135) and will not expire while it is in commercial use. This Service Mark has broad application in the “Goods and Services” category and covers: “Medical and scientific research in the field of brain metabolism and physiological metabolism; Product development in the field of brain metabolism and physiological metabolism; Research and development and consultation related thereto in the field of brain metabolism and physiological metabolism; Research and development of new products; Scientific research consulting in the field of brain metabolism and physiological metabolism.”  

Competition

We compete with other manufacturers, distributors and marketers of vitamins, minerals, herbs, and other nutritional supplements both within and outside the U.S.

The competitive landscape is similar to other supplements. Our higher percentage of BPF Gold 47% distinguishes us as a high-quality competitor. We promote our products consistently with online marketing.

Our key competitor is Ortho Molecular, who distributors through medical offices. We are priced similarly to their product.  They sell a 38% BPF product.

Our key competitors on digital marketing and Amazon are Doublewood, Secrets, Naomi, and Jarrow. Doublewood, Jarrow, and Naomi are priced higher or similar. Secrets uses a lower quality citrus bergamot and are considered a price and low-quality competitor. We intend to distinguish ourselves from these competitors through better digital marketing and brand loyalty.

The nutritional supplement industry is highly fragmented and competition for the sale of nutritional supplements comes from many sources. Such products are sold primarily through retailers (drug store chains, supermarkets, and mass market discount retailers), health and natural food stores, and direct sales channels (network marketing and internet sales).

The nutritional supplement industry is highly competitive, and we expect the level of competition to remain high over the near term. We do not believe it is possible to accurately estimate the total number or size of our competitors. The nutritional supplement industry has undergone some consolidation in the recent past and we expect that trend may continue in the near term.

We have high gross margin categories, with our gross margin ranging from 60% to 80%, depending on product and market channel.

Based upon our exclusive U.S. and Canadian licensing and manufacturing agreement with Gelteq, we believe we are able to offer a gel-pack delivery system that our competition in North America cannot provide. Gelteq is a customizable platform for supplement delivery, in that each gel formulation is tailored to solve a particular problem and deliver a specific outcome.


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As the exclusive North American provider of H&AD’s Citrus Bergamot SuperFruit, our heart and immune products have several advantages. For example, our BergaMet PRO+ product has 47% BPF Gold potency as compared to the closest competitor at only 38% BPF. BPF is comprised of five key polyphenols (Naringin, Neohesperidin, Brutieridin, Melitidin, and Neoeriocitrin). These five polyphenols are known to increase the product’s effectiveness, and thus its existence is viewed as a positive factor in its efficacy.

Backed by published research, our citrus bergamot has been shown to support heart health, support immune response, and address metabolic syndrome.

In January 2022, the World Journal of Advanced Research and Reviews published the results of a clinical study which showed that taking a daily serving of UBN RELIEF for 60 days can naturally reduce or alleviate neurological discomfort. It was also shown to improve cognitive function, sleep satisfaction and overall quality of life.

Employees

On the Healthy Extracts holding company level, are employees are comprised of our officers. Our BergaMet subsidiary has two employees. Our UBN subsidiary currently does not have its own employees since it uses outside contract help on an as-needed basis, with management provided by our officers.

We anticipate all of our employees will continue to work for us for the foreseeable future. We plan to hire appropriate personnel on an as-needed basis and utilize the services of independent contractors as needed.

We anticipate that our planned acquisition of Hyperion and OPM will add approximately 14 employees, which will continue to work out of their existing facilities in Lexington, Virginia.

Recent Developments

Pending Acquisitions

On January 13, 2023, we entered into an Acquisition Agreement for the acquisition of Hyperion, L.L.C. and Online Publishing & Marketing, LLC, both Virginia limited liabilities companies, by merging them into our newly-formed wholly-owned subsidiaries, Green Valley Natural Solutions, LLC (“Green Valley”) and Online Publishing & Marketing, LLC (“OPM”), both Nevada limited liability companies. The closing of the acquisition will take place following the satisfaction of certain closing conditions, including a capital raise of at least $4,000,000 and the commencement of trading, or approval for the commencement of trading, of our common stock on the Nasdaq Capital Market. The total purchase price for the acquisitions will be $1,750,000 in cash, $1,300,000 in the form of secured promissory notes, and $1,250,000 worth of our common stock (based on a 30% premium to the price paid per share of common stock in the above-referenced capital raise, but in no event more than ninety percent (90%) of the volume weighted average price for our common stock for the ninety (90) trading days up to and including the trading day immediately before the day the price is finally determined for securities sold in the capital raise).

The combination of the businesses is expected to significantly increase our current annualized gross revenues. Hyperion is also expected to strengthen our manufacturing and distribution capabilities, as well as expand our product portfolio with 15 proprietary nutraceutical formulations sold under the brand, Green Valley Natural Solutions. These products are formulated to support brain, memory, vision, sinus and digestive health, as well as healthy sleep and aging.


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Green Valley Natural Solutions products are manufactured and shipped direct-to-consumer from specially temperature-controlled warehouses leased in Shenandoah Valley, Virginia. These facilities would add an East Coast presence to our existing warehouse and shipping facilities in Nevada, with this expected to lower customer shipping costs and order delivery times.

Hyperion’s relationships with high-quality contract manufacturers is also expected to lower our manufacturing costs, as well as improve supply chain efficiencies and economies of scale.

OPM specializes in creating digital and affiliate marketing content for Hyperion and will enhance our overall marketing strategy and audience reach. They also bring a large email distribution list of hundreds of thousands of potential customers with a new affiliate marketing channel. OPM also produces engaging digital content such as educational videos and newsletters.

The planned acquisition of Hyperion and OPM is expected to add approximately 14 employees, who would continue to work out of the existing facilities in Lexington, Virginia.

We expect these two synergistic and accretive acquisitions to accelerate and support our growth and expand our market reach. Our natural heart and brain health formulations are perfect for cross selling or private labeling with Green Valley products, such as their stem cell restore formulation that are sold across various marketing channels. Likewise, Green Valley sales would benefit from our established marketing channels, which includes subscription-based direct-to-consumer, national grocery stores, and a strong presence on Amazon.

On a pro forma basis upon the closing of the acquisitions, we would generate over $12 million in annualized gross revenue, including significant recurring revenue being generated by subscriptions. The anticipated positive cash flow would fund future revenue growth from new product introductions and market expansion, as well as other potential strategic acquisitions.

The completion of the acquisitions is subject to the following material closing conditions, and there can be no assurance that the transactions will be completed as described:

·we will have entered into a new lease agreement for at least a twelve month period at the current Hyperion and OPM location; 

·a key employee of Hyperion and OPM will have entered into a consulting agreement with our affiliate; 

·our independent auditor will have completed an audit of the financial statements of Hyperion and OPM; 

·we will have closed on one or more rounds of financing for an aggregate amount of no less than $4,000,000, of which at least $250,000 will be from selling parties to the transaction; and 

·we will have commenced trading, or been approved to commence trading, on either the Nasdaq or the NYSE American Exchange 

Governmental Controls, Approval and Licensing Requirements

Our products have not been evaluated by the FDA or any similar regulatory body for safety and efficacy.

Federal laws related to the advertising, distribution and sale of health supplements.

We expect that the formulation, manufacturing, packaging, labeling, advertising, distribution and sale (hereafter, “sale” or “sold” may be used to signify all of these activities) of our vitamin and nutritional


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supplement products will be subject to regulation by one or more federal agencies, primarily the FDA and the Federal Trade Commission (“FTC”), and to a lesser extent the Consumer Product Safety Commission (“CPSC”), the United States Department of Agriculture, and the Environmental Protection Agency. Our activities are also regulated by various governmental agencies for the states and localities in which our products are sold, as well as by governmental agencies in certain countries outside the United States in which our products are sold. Among other matters, regulation by the FDA and the FTC is concerned with product safety and claims made with respect to a product’s ability to provide health-related benefits. Specifically, the FDA, under the Federal Food, Drug, and Cosmetic Act (“FDCA”), regulates the formulation, manufacturing, packaging, labeling, distribution, and sale of food, including dietary supplements and over-the-counter (“OTC”) drugs. The FTC regulates the advertising of these products. The National Advertising Division (“NAD”) of the Council of Better Business Bureaus oversees an industry-sponsored, self-regulatory system that permits competitors to resolve disputes over advertising claims. The NAD has no enforcement authority of its own, but may refer matters that appear to violate the FTC Act or the FDCA to the FTC or the FDA for further action, as appropriate.

 

All of the nutritional supplement products that we plan to sell are classified as dietary supplements. The FDA’s revision of nutrition labeling requirements also affects the nutrition labeling of certain dietary supplements. Our affected manufacturers may have revised labels on some of their dietary supplements to comply with the new requirements. Our manufacturers review our directorslabels prior to each product run to assure compliance. Moreover, these manufacturers may need to reformulate their products to maintain eligibility for certain marketing claims.

The Dietary Supplement Health and Education Act (“DSHEA”) was enacted in 1994, amending the FDCA. Among other things, DSHEA prevents the FDA from regulating dietary ingredients in dietary supplements as “food additives” and allows the use of statements of nutritional support on product labels and in labeling. DSHEA establishes a statutory class of “dietary supplements,” which includes vitamins, minerals, herbs, amino acids and other dietary ingredients for human use to supplement the diet. Dietary ingredients marketed in the United States before October 15, 1994 may be marketed without the submission of a “new dietary ingredient” (“NDI”) premarket notification to the FDA. Dietary ingredients not marketed in the United States before October 15, 1994 may require the submission, at least 75 days before marketing, of an NDI notification containing information establishing that the ingredient is reasonably expected to be safe for its intended use. The FDA has issued final regulations under DSHEA.

As required by Section 113(b) of the Food Safety Modernization Act, the FDA published in July 2011 a draft guidance document clarifying when the FDA believes a dietary ingredient is an NDI, when a manufacturer or distributor must submit an NDI premarket notification to the FDA, the evidence necessary to document the safety of an NDI and the methods for establishing the identity of an NDI. Industry strongly objected to several aspects of the draft guidance. In 2016, the FDA issued revised draft guidance on what constitutes an NDI and NDI notification requirements. Regardless of whether the FDA finalizes this draft guidance, the FDA has recently acted more aggressively to remove ingredients from the market that the FDA views as unlawful dietary ingredients. This trend, if it continues, may limit the dietary supplement market. Several bills to amend DSHEA in ways that would make this law less favorable to consumers and industry have been proposed in Congress. We are very careful to assure all of the ingredients we utilized are not a “new NDI” and meets the FDA draft guidance.

The FDA issued a Final Rule on GMPs for dietary supplements on June 22, 2007. The GMPs cover manufacturers and holders of finished dietary supplement products, including dietary supplement products manufactured outside the United States that are imported for sale into the United States. Among other things, the new GMPs: (a) require identity testing on all incoming dietary ingredients, (b) call for a “scientifically valid system” for ensuring finished products meet all specifications, (c) include requirements related to process controls, including statistical sampling of finished batches for testing and requirements


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for written procedures and (d) require extensive recordkeeping. We have reviewed the GMPs and have taken steps to ensure compliance. While we believe we are in compliance, there can be no assurance that our operations or those of our suppliers will be electedin compliance in all respects at all times. Additionally, there is a potential risk of increased audits as the FDA and other regulators seek to ensure compliance with the GMPs.

On December 22, 2006, Congress passed the Dietary Supplement and Nonprescription Drug Consumer Protection Act, which went into effect on December 22, 2007. The law requires, among other things, that companies that manufacture or distribute nonprescription drugs or dietary supplements report serious adverse events allegedly associated with their products to the FDA and institute recordkeeping requirements for all adverse events (serious and non-serious). There is a risk that consumers, the press and government regulators could misinterpret reported serious adverse events as evidence of causation by the stockholdersingredient or product complained of, which could lead to additional regulations, banned ingredients or products, increased insurance costs and a termpotential increase in product liability litigation, among other things.

All states regulate foods and drugs under laws that generally parallel federal statutes. We are also subject to state consumer health and safety regulations, such as the California Safe Drinking Water and Toxic Enforcement Act of 1986 (“Proposition 65”). Violation of Proposition 65 may result in substantial monetary penalties and compliance with Proposition 65 is a major focus. Contemplated changes in the Proposition 65 labeling requirements could potentially lead to substantial costs. Current legislation in Massachusetts regarding restrictions on weight loss and sports nutrition products could also impact the marketing of dietary supplements generally. Further, state attorneys general have pressured industry to adopt DNA testing for herbal-based products to assure plant identity, and have taken other actions relating to dietary ingredient status. It is uncertain whether these efforts will have a material impact on the dietary supplement market.

On November 14, 2022, BergaMet NA, LLC, our subsidiary, received a warning letter from the FDA regarding claims we allegedly make about our Cholesterol Command product. Specifically, the warning letter related to claims on our website, Facebook page, and the webpage of a retailer claim that the products are intended for use in the cure, mitigation, treatment, or prevention of disease because they reduce cholesterol or are an anti-inflammatory. On December 1, 2022, we responded to the warning letter notifying the FDA that we had hired a third-party to review our advertising and revise portions of our website, Facebook page, and online product listings. This was the only warning letter we received from the FDA to date, and we are awaiting their response. There can be no assurance that the FDA will not pursue this action further. If the FDA were to pursue this action, we may have to cease selling our Cholesterol Command product. Any action brought by the FDA (or any ramifications of such action, including, without limitation, a required withdrawal of Cholesterol Command from the market) would have a material adverse effect on our reputation, sales efforts and results of operations.

Currently, our products are only distributed in the United States. If we distribute products in Canada or elsewhere in the future, we will go through the appropriate approval process. 

Description of Property

We do not currently own, lease or use any office space as we operate on a virtual basis. However, we lease warehouse facilities under an operating lease that expires in 2025. Prior to February 4, 2022, we leased a warehouse facility on a month-to-month basis. Our rent obligations for 2023 through 2025 are as follows: 2023 - $68,042, 2024 - $70,883, and 2025 - $5,926. Total rent for the year ended December 31, 2022 was $63,745. 


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MANAGEMENT

Directors and Executive Officers

The following table sets forth the names, ages, and biographical information of each of our current directors and executive officers, and the positions held by each person, and the date such person became a director or executive officer. Our executive officers are elected annually by the Board of Directors. The directors serve one-year terms until their successors are elected. The executive officers serve terms of one year and servesor until histheir death, resignation or her successor is elected and qualified.  Each of our officers is appointedremoval by the boardBoard of Directors. Family relationships among any of the directors (the "Board") to a term of one year and serves until his or her successor is duly elected and qualified, or until he or she is removed from office.  The Board has no nominating, audit or compensation committees.

The name, address, age and position of our officers and directors is set forth below:

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are described below.

 

Name and Address

Age

Age

Position(s)

Fred Covely

57

President, Chief Executive Officer (CEO), Director

Josh Silver                                       

Kevin “Duke” Pitts

34

63

President, Director (2018)

Robert Madden

51

Secretary, Chief Financial Officer (2022)

William Bossung

57

Secretary,

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Director (2014)

Bill Croyle

71

Director (2019)

 

No executive officer or directorKevin “Duke” Pitts, age 63, was appointed to our Board of the corporationDirectors on September 28, 2018, and as our President on September 24, 2019. Mr. Pitts is a proven leader who has 30 years of senior management experience within a technology-driven industry. Mr. Pitts has been the subjectPresident and Owner of any order, judgment, or decreeEnvision Enterprises, a consumer electronic integration business, where he has worked since 2007. Earlier in his career, Mr. Pitts served as the Director of any courtDirect Marketing at Dish Network, the well-known satellite television provider. His deep experience in senior management and marketing will be of competent jurisdiction, or any regulatory agency permanently or temporarily enjoining, suspending or otherwise limiting him or her from acting as an investment advisor, underwriter, broker or dealer in the securities industry, or as an affiliated person, director or employee of an investment company, bank, savings and loan association, or insurance company or from engaging in or continuing any conduct or practice in connection with any such activity or in connection with the purchase or sale of any securities.

No executive officer or director of the corporation has been convicted in any criminal proceeding (excluding traffic violations) or is the subject of a criminal proceeding which is currently pending.

No executive officer or director of the corporation is the subject of any pending legal proceedings.great value to us.

 

Background Information about OurRobert Madden, age 51, was appointed as our Secretary and Chief Financial Officer on June 2, 2022. Mr. Madden has been working in the accounting industry for over 30 years. From 1990 to 2012 he worked for several companies starting as a staff accountant, then assistant controller position, finally the company controller position. During that time, he worked in the wholesale apparel, advertising, television, and Directorspecial event industries. From 2012 to 2015, he took a sabbatical and lived overseas volunteering for different NGO’s and non-profit organizations. During the sabbatical, he volunteered for a British NGO, worked as their CFO, and was the driving force in getting the organization registered with 2 foreign nations. In 2016, he moved back to the United States and started an accounting consulting business. From 2016 to the present, he was hired to fill either a Controller or CFO position for several private and public companies, including United Concerts from 2016 through 2018, Bakken Water Transportation Services, Inc. from 2019 to the present, Geopulse Exploration, Inc. from 2016 through 2019, and Humatech, Inc. from 2021 to the present. He graduated from the University of Utah with a bachelor’s degree in accounting and from Westminster College with an MBA with a certificate of accounting.

 

Fred Covely, 57, President CEO William Bossung, Director, Co-FounderMr. Covelyage 64, has bothserved as a technical and business background in software. Fred has been involved in all aspectsmember of the software industry over the past 30 years including technical, sales, legal, and management. Most recently Fred was a founder at BCF Technology an insurance software company ultimately sold to Vertafore (a TPG Capital company). TPG is a leading global private investment firm with $66 billionBoard of Capital under management. Upon acquisition Fred remained as the CTO for 2 yearsDirectors since our inception, and was responsible for a software division of Vertafore that generated 450 million in revenue.   Products produced at BCF were used by approximately 200 major propertyour Secretary and casualty insurance carriers in the US, including Travelers, Hartford, Liberty Mutual and Progressive to name a few.  Fred was awarded a USPTO Patent for technology he developed at BCF.  Prior to BCF, Fred founded Combio, a Hewlett Packard (HP) financially back banking Software Company.  In the 1990's Fred was the chief architect for the Peregrine Network Management System at Peregrine Systems subsequently purchased by HP.  Prior to that Chief Financial Officer from our inception until June 2, 2022.Mr. Covely worked on various medical products for Beckman Instruments as well as a novel radiation treatment planning system while still in school.  

.

William Bossung 57, Secretary, Director, Co-Founder:Mr. Bossunghashas a diverse background in Corporate Finance, Insurance and accounting. From 2003 to August 2006 Mr. Bossung is currently a Board member andwas co-founder of BCF Technology, an insurance software company that was ultimately sold to Vertafore in August of 2006. During January 2012 Mr. Bossung co-founded Splash Beverage Group, (SBEV) a beverage distribution company that distributes both alcohol and non-alcohol products, including Bruce Lee Tea, Kona Red and Salt Tequila.products. The company’s products are sold in over 25,000 retail locations. Mr. Bossung was instrumental in the company’s initial capital financings of 8 million dollars.locations Mr. Bossung is the managing partner of Bishop Equity Partners LLC, a small boutique private equity firm that invests in both private and public companies, in addition the firm purchases and restructures debt from companies. Mr. Bossung was a founder of BCF Technology with Mr. Covely, an insurance software company that was ultimately sold


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From 1997 to Vertafore.2002 Mr. Bossung was the Director of Corporate Finance of Chadmoore Wireless Group, the company was engaged in the business of wireless communications utilizing 800 MHZ SMR frequencies. Chadmoore aggregated over 5500 channelsSpecialized Mobile Radio licenses from the FCC, Federal Communications Commission, subsequently the licenses were acquired by Nextel, for 162 million dollars, then ultimately merged into the Sprint PCS wireless network. Mr. Bossung currently holds an Insurance License and earned a bachelor’s degree in accounting and finance from Bloomsburg State University

University. Our founders believed that Mr. Bossung’s broad experience in corporate financing and accounting, dating back to 2003, made him an attractive candidate to serve on our board of directors.

Josh Silver, 34, DirectorBill Croyle, age 71, was appointed to our Board of Marketing:OverDirectors on September 24, 2019. Mr. Croyle is a private investor and an accomplished Senior Executive with more than 40 years of success across the pastten years Mr. SilverIT, energy, manufacturing, telecommunications, venture capital, and finance industries. His broad areas of expertise include mergers and acquisitions, negotiations, service contracts and delivery, executive development and mentoring, and managing complexities. Since 2009 Bill has workedbeen a founder, owner or executive of EnTX Group, Impact Legacy Partners, FB Oilfield Special Tools and Western Energy Advisors. He is Chairman of the Colorado Chapter of the Marine Corps Scholarship Foundation, and he has served on the boards of Hill City Silica LLC, the University of Colorado Advocates program, the Association for Corporate Growth/Denver, and the Denver Consulting Alliance. Bill served in the direct-marketing industry for oneMarine Corps 1972-1974. Mr. Croyle holds Certificates in Energy Finance and Management from the University of the Industry leaders, Take 5. Josh overseesDenver and guides the production team to generate the highest quality of work for Take 5's clients. His key responsibilities lie in implementing and overseeing large scale email programs, all social media/SEO platforms, direct mail, email, mobile and database projects including: refining HTML coding, testing mailing software, and innovative SEO/SEM strategies.International Trade from World Trade Center Denver. He constantly evaluates and cleanses Take 5's in- house data, and manages its marketing budgets. Josh motivates the sales team to meet and exceed the clients' needs while at the same time ensuring all operations remain 100% compliant with CAN-SPAM regulations. Mr. Silver has been responsible for multi-million dollar campaign’s and long term strategy for digital marketing and agency clients to include but not limited to, automotive, retail, and financial. Mr. Silver graduated from the University of Nevada, Las VegasCalifornia, Santa Barbara, with a degreeBA in economicsHistory and minor in French. Our directors believed that Mr. Croyle’s experience as a business founder and finance in additioncertifications made him an attractive candidate to having further education and certifications in Direct Marketing from Villanova University.serve on our board of directors.

Family Relationships

 

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(table of contents)

There are no family relationships between any of our officers or directors.

Other Directorships; Director Independence

Other than as set forth above, none of our officers and directors is a director of any company with a class of securities registered pursuant to section 12 of the Exchange Act or subject to the requirements of section 15(d) of such Act or any company registered as an investment company under the Investment Company Act of 1940.

For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2). The OTCQB on which shares of our common stock are quoted does not have any director independence requirements. The NASDAQ definition of “independent director” means a person other than an executive officer or employee of the company or any other individual having a relationship which, in the opinion of the company’s Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determined that Mr. Bossung and Mr. Croyle are independent directors within the meaning of the NASDAQ rules.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and persons who own more than ten percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. Officers, directors and greater than ten percent shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.


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Except as set forth below, to our knowledge, none of our officers, directors, or beneficial owners of more than ten percent of our common stock failed to file on a timely basis reports required by section 16(a) of the Exchange Act during the most recent fiscal or prior fiscal year.

Board Committees

Our Board of Directors maintains separate audit, nominating and compensation committees. The members of all three committees are only our two independent directors, William Bossung and Bill Croyle.

Audit Committee. Our audit committee consists of two independent directors. The members of the audit committee are William Bossung and Bill Croyle. The audit committee will consist exclusively of directors who are financially literate. In addition, Mr. Bossung is considered an “audit committee financial expert” as defined by the SEC’s rules and regulations. The audit committee responsibilities include:

·Review and reassess the adequacy of the Audit Committee Charter annually and submit the Charter to the Board for approval. 

·Review our annual audited financial statements and any reports or other financial information as the Committee may request, including, without limitation, any material submitted to any governmental body, or the public, including any certification, report, opinion or review rendered by the registered public accountants. Discuss major issues and significant changes regarding accounting and auditing principles and practices as well as the adequacy of internal controls that could significantly affect our financial statements.  

·Review any reports to management prepared by the internal auditing department, together with management’s response. Review with management and the registered public accountants significant financial reporting issues and judgments made in connection with the preparation of our financial statements.  

·Review with management and the registered public accountants our annual report on Form 10-K and our quarterly report on Form 10-Q prior to its filing or prior to the release of earnings. The chair of the Committee may represent the entire Committee for purposes of these reviews.  

·Review our major financial risk exposures and the steps management has taken to monitor and control such exposures. 

·Establish procedures for the receipt, retention, and treatment of complaints received by us regarding accounting, internal accounting controls, or auditing matters; and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters. 

·The Committee shall be directly responsible for the appointment, compensation, and oversight of the work of our registered public accounting firm. The Committee shall monitor the independence and effectiveness and approve the fees and other compensation to be paid to the registered public accountants. On an annual basis, the Committee should review and discuss with the accountants all significant relationships the accountants have with us to confirm the accountants’ independence.  

·Meet with the registered public accountants to review the scope, accuracy, completeness and overall quality of the annual financial statements. 

·Receive from the registered public accountants the information they are required to communicate to the Committee under generally accepted auditing standards, including, without limitation a formal written statement delineating all relationships between the registered public accountants and us, consistent with Independence Standards Board Standard No. 1, engage in a dialogue with the registered public accountants with respect to any disclosed relationships or services that may impact the objectivity and independence of the registered public accountants, and recommend that the Board take appropriate action to enhance the independence of the  


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registered public accountants, and reapprove all auditing services (which may entail providing comfort letters in connection with securities underwritings) and all non-audit services as provided for under Section 202 of Sarbanes-Oxley Act of 2002.

·In consultation with the registered public accountants, review the integrity of our financial reporting processes, both internal and external. 

·Meet with management and the registered public accountants to review the planning and staffing of the audit. 

·Discuss with the registered public accountants the matters required to be discussed by Statement on Auditing Standards No. 61, as modified or amended, relating to the conduct of the audit. 

·Review with the registered public accountants any problems or difficulties the accountants may have encountered and any management letter provided by the accountants and our response to that letter. Such review should include any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to required information, and any changes required in the planned scope of the audit. 

·make regular reports to the Board of Directors. The Committee shall also prepare the report required by the rules of the Securities and Exchange Commission to be included our annual proxy statement.

Compensation Committee. Our compensation committee consists of two independent directors. The members of the audit committee are William Bossung and Bill Croyle. The compensation committee responsibilities include:

·Review the competitiveness of our executive compensation programs to ensure (a) the attraction and retention of executives, (b) the motivation of executives to achieve our business objectives, and (c) the alignment of the interests of key leadership with the long-term interests of our shareholders. Assist the Board in establishing CEO annual goals and objectives. 

·Review trends in executive compensation, oversee the development of new compensation plans, and, when necessary, approve the revision of existing plans. 

·Review and approve the compensation structure for executives. 

·Oversee an evaluation of the performance of our executive officers and approve the annual compensation, including salary, bonus, incentive and equity compensation, for the executive officers. Review and approve compensation packages for new executive officers and termination packages for executive officers. 

·Review and make recommendations concerning long-term incentive compensation plans, including the use of equity-based plans. 

·Periodically review the compensation paid to non-employee directors and make recommendations to the Board for any adjustments. No member of the Committee will act to fix his or her own compensation except for uniform compensation to directors for their services as a director. 

·Review periodic reports from management on matters relating to our compensation practices. 

·Produce an annual report of the Compensation Committee on executive compensation for our annual proxy statement in compliance with and to the extent required by applicable Securities and Exchange Commission rules and regulations and any relevant listing authority. 

·Obtain or perform an annual evaluation of the Committee’s performance and make applicable recommendations about, among other things, changes to the charter of the Committee. 

Nominating Committee. Our nominating committee consists of two independent directors. The members of the nominating committee are William Bossung and Bill Croyle. The nominating committee responsibilities include screening and recommending to the full Board director candidates for nomination.


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The Nominating and Governance Committee will consider stockholder recommendations for candidates for the board of directors, although we do not currently have a process for security holders to send communications to the Board.

During the fiscal years ended December 31, 2021 and 2020, the Board of Directors met as necessary.

Involvement in Certain Legal Proceedings

 

ToNone of our knowledge, duringofficers or directors has, in the past ten years, no present or former directors or executive officer of our company: (1) filed a petition under the federal bankruptcy, laws or any state insolvency law, nor had a receiver, fiscal agent or similar officer appointed by a court for the business or present of such a person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer within two years before the time of such filing; (2) wasbeen convicted in a criminal proceeding or named subject ofin a pending criminal proceeding, (excluding traffic violations and other minor offenses); (3) wasbeen the subject of any order, judgment, or decree not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him or her from any securities activities, or any other disclosable event required by Item 401(f) of Regulation S-K.

On November 14, 2022, BergaMet NA, LLC, our subsidiary, received a warning letter from the FDA regarding claims we allegedly make about our Cholesterol Command product. Specifically, the warning letter related to claims on our website, Facebook page, and the webpage of a retailer claim that the products are intended for use in the cure, mitigation, treatment, or prevention of disease because they reduce cholesterol or are an anti-inflammatory. On December 1, 2022, we responded to the warning letter notifying the FDA that we had hired a third-party to review our advertising and revise portions of our website, Facebook page, and online product listings. This was the only warning letter we received from the FDA to date, and we are awaiting their response.

Other than as set forth above, we are not a party to or otherwise limitinginvolved in any legal proceedings.

In the following activities: (i) actingordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, other than as set forth herein, matters currently pending or threatened against us are not expected to have a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, associated personmaterial adverse effect on our financial position or results of anyoperations.

Code of the foregoing,Ethics

We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing similar functions. The full text of our code of business conduct and ethics will be posted on our corporate website and is filed as an investment advisor, underwriter, broker or dealer in securities, or as an affiliated person, directorsexhibit to this registration statement. We intend to disclose future amendments to certain provisions of any investment company, or engaging in or continuing any conduct or practice in connection with such activity; (ii) engaging in any typeour code of business practice; (iii) engaging in any activity in connection with the purchaseconduct and ethics, or salewaivers of any security or commoditythese provisions, on our corporate website or in connection with any violation of federal or state securities laws or federal commodity laws; (4) wasfilings under the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described above under this Item, or to be associated with persons engaged in any such activity; (5) was found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any federal or state securities law and the judgment in subsequently reversed, suspended or vacate; (6) was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated.Act.


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EXECUTIVE COMPENSATION

 

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EXECUTIVE COMPENSATIONNarrative Disclosure of Executive Compensation

 

During the period from inception (December 19, 2014)Pitts Independent Contractor Agreement

On October 1, 2019, we entered into an Independent Contractor Agreement with Kevin “Duke” Pitts. Pursuant to period ended Januarythis agreement, Mr. Pitts has agreed to serve as our President and Chief Executive Officer in exchange for $120,000 per year. The agreement had an expiration date of December 31, 2015, During the period from inception (December 19, 2014) to January 31, 2015 the Company paid $9,000 to a company owned by William Bossung an officer and director for consulting fees, which is included in general and administrative expenses on the accompanying statement of operations no other compensation2021, but has been accrued by or paid toextended indefinitely since then.  

 

(i)any individual serving as an officer or director' principal executive officer or acting in a similar capacity during the period regardless of compensation level;

Madden Consulting Agreement

Effective June 1, 2022, we entered into a Consulting Agreement with Robert Madden. Pursuant to the agreement, Madden has agreed to serve as our Chief Financial Officer and Secretary in exchange for $42,000 per year. The agreement is effective for one year, and will automatically renew for successive one-year terms. 

Summary Compensation Table

 

The following table sets forth for the period ended January 31, 2015, theinformation with respect to compensation awarded to, paid to, or earned by our officersPresident and directors.our Secretary and Chief Financial Officer for the years ended December 31, 2022 and 2021.

Name and

Principal Position

Year

Salary

($)

Bonus

($)

Stock

Awards

($)

Option Awards

($)

Non-Equity Incentive Plan Compensation ($)

Nonqualified Deferred Compensation ($)

All Other

($)

 

 

Total

($)

 

 

 

 

 

 

 

 

 

 

Kevin “Duke” Pitts

2022

110,000

     -0-

       -0-

         -0-

                   -0-

                   -0-

         -0-

110,000

President

2021

110,000

     -0-

       -0-

         -0-

                   -0-

                   -0-

         -0-

110,000

 

2020

110,000

     -0-

       -0-

         -0-

                   -0-

                   -0-

         -0-

110,000

 

 

 

 

 

 

 

 

 

 

William Bossung (1)

2022

-0-

     -0-

       -0-

         -0-

                   -0-

                   -0-

         -0-

-0-

Secretary and CFO

2021

65,000

     -0-

       -0-

         -0-

                   -0-

                   -0-

         -0-

65,000

 

2020

66,000

     -0-

       -0-

         -0-

                   -0-

                   -0-

         -0-

66,000

 

 

 

 

 

 

 

 

 

 

Robert Madden (1)

2022

38,500

-0-

-0-

17,500

-0-

-0-

-0-

56,000

Secretary and CFO

 

 

 

 

 

 

 

 

 

(1)Mr. Bossung resigned as our Secretary and Chief Financial Officer effective June 2, 2022, and was replaced by Robert Madden. 


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Director Compensation

 

Name and principal position Year Salary ($) Bonus ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Nonqualified Deferred Compensation Earnings ($) All Other Compensation Total ($)
                                     
Fred Covely, President, CEO, Director  2014   0   0   0   0   0   0   0   0 
                                     
Josh Silver, Director  2014   0   0   0   0   0   0   0   0 
                                     
William Bossung, Secretary, Director  2014   0   0   0   0   0   0  $9,000  $9,000 

Currently, our officers and/or directors are not being compensated for their services duringFor the development stageyears ended December 31, 2022 and 2021, none of the members of our business operations, and is not considered to be employees of the Company.

We have not paid any salaries in 2014. The company does anticipate paying salaries once the software is complete and marketing and sales activities commence during the fiscal year ending December 31, 2015.  We will not begin paying salaries until we have adequate funds to do so.

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(table of contents)

We do not currently have any benefits, such as health insurance, life insurance or any other benefits available to our employees.

We have not issued any stock options or maintained any stock option or other incentive plans since our inception.  We have no plans in place and have never maintained any plans that provide for the payment of retirement benefits or benefits that will be paid primarily following retirement including, but not limited to, tax qualified deferred benefit plans, supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans.  Similarly, we have no contracts, agreements, plans or arrangements, whether written or unwritten, that provide for payments to the named executive officers or any other persons following, or in connection with the resignation, retirement or other termination of a named executive officer, or a change in control of us or a change in a named executive officer's responsibilities following a change in control.

As of the date hereof, we have not entered into employment contracts with any of our officers and do not intend to enter into any employment contracts until such time as it profitable to do so.  The officers are not considered to be employees.

Compensation of Directors

Our directors have not received any compensation for serving as such, for serving on committees of the Board of Directors received compensation for his service as a director.

Outstanding Equity Awards at Fiscal Year-End

On June 10, 2020, our Board of Directors approved the Grey Cloak Tech, Inc. 2020 Omnibus Stock Grant and Option Plan and set aside 250,000 shares of our common stock for issuance thereunder. Pursuant to the plan, officers, directors, key employees and certain consultants may be granted stock options (including incentive stock options and non-qualified stock options), restricted stock awards, unrestricted stock awards, or performance stock awards. As of December 31, 2021, we have awarded an aggregate of 195,000 options to twenty-five (25) individuals at an exercise price of $5.00 per share.

On December 26, 2022, we canceled 121,500 of the options and, on that same date, we approved the Healthy Extracts Inc. 2022 Equity Incentive Plan and set aside 520,000 shares of our common stock for special assignments.  During the period ended January, 31, 2015, there were no other arrangements between usissuance thereunder. On December 26, 2022, we approved a total of 159,750 Restricted Stock Units at $1.00 per share and our directors that resulted in our making payments360,000 Restricted Stock Awards with a strike price of $0.00 to our directors for any services provided to us by them as directors. During the period from inception (December 19, 2014) to January 31, 2015 the Company paid $9,000$1.00 to a company owned by William Bossung an officer and director for consulting fees, which is included in general and administrative expenses on the accompanying statementtotal of operationssixteen (16) individuals.


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SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth, as of the dateApril 11, 2023, certain information with respect to our equity securities owned of this Prospectus, the total number of shares ownedrecord or beneficially by (i) each of our directors, officersOfficers and key employees, individuallyDirectors; (ii) each person who owns beneficially more than 10% of each class of our outstanding equity securities; and (iii) all Directors and Executive Officers as a group, and the present ownersgroup.

 

 

Name and Address (1)

 

 

Common Stock Beneficial Ownership

 

Percentage of Common Stock Beneficial Ownership (2)

 

 

 

 

 

Kevin “Duke” Pitts (3)(5)

 

262,301

 

7.11%

 

 

 

 

 

William Bossung (3)(6)

 

64,143

 

1.85%

 

 

 

 

 

Bill Croyle (3)(4)(7)

 

14,637

 

<1%

 

 

 

 

 

Robert Madden (3)(8)

 

60,000

 

1.71%

 

 

 

 

 

Jay Decker (9)

 

 1,776,475

 

50.80%

 

 

 

 

 

Shelton Decker (10)

 

251,337

 

7.25%

 

 

 

 

 

Logan Decker (11)

 

262,837

 

7.56%

 

 

 

 

 

All Officers and Directors as a Group (4 Persons)

 

401,080

 

10.41%

(1)

Unless otherwise indicated, the address of the shareholder is c/o Healthy Extracts Inc.

(2)

Unless otherwise indicated, based on 3,451,724 shares of common stock issued and outstanding. Shares of common stock subject to convertible preferred stock and options or warrants currently exercisable, or exercisable or convertible within 60 days, are deemed outstanding for purposes of computing the percentage of the person holding such options or warrants, but are not deemed outstanding for purposes of computing the percentage of any other person.

(3)

Indicates one of our officers or directors.

(4)

Includes 6,637 shares of common stock held by BMJ Estate Matters, LLC, of which Mr. Croyle is the controlling party.

(5)

Includes 160,000 Restricted Stock Awards that have vested, and 80,000 that have not vested.

(6)

Includes 24,750 Restricted Stock Units that have vested.

(7)

Includes 8,000 Restricted Stock Units that have vested.

(8)

Includes 30,000 Restricted Stock Awards that have vested, and 30,000 that have not vested.


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(9)

Includes warrants to acquire 45,000 shares of common stock at $5.00 per share. Jay Decker disclaims any ownership of securities held by his adult sons.

(10)

Shelton Decker is the adult son of Jay Decker. Includes warrants to acquire 15,000 shares of common stock at $5.00 per share.

(11)

Logan Decker is the adult son of Jay Decker. Includes warrants to acquire 15,000 shares of common stock at $5.00 per share, 1,000 Restricted Stock Units that have vested, and 10,500 Restricted Stock Units that have not vested.

The issuer is not aware of 5%any person who owns of record, or is known to own beneficially, five percent or more of our totalthe outstanding shares.  The stockholders listed below have direct ownershipsecurities of their shares and possess sole voting and dispositive power with respect toany class of the shares.issuer, other than as set forth above. There are no classes of stock other than common stock issued or outstanding.

 

There are no current arrangements which will result in a change in control.

Title of  ClassName of Beneficial Owner(1)Amount and Nature of Beneficial Ownership(2)Percent of Class(3)
    
CommonFred Covely4,000,00028%
CommonWilliam Bossung4,000,00028%
CommonJosh Silver2,000,00014%

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1.The person named above may be deemed to be a "parent" and "promoter" of the Company, within the meaning of such terms under the Securities Act of 1933, as amended, by virtue of his direct holdings in the Company.
2.Each shareholder owns his or her shares directly.
3.Based on 14,306,666 shares issued and outstanding as of February 12, 2015.


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

Security Ownership of Certain Beneficial Owners and ManagementPitts Independent Contractor Agreement

 

Authorized Stock

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(table of contents)

On October 1, 2019, we entered into an Independent Contractor Agreement with Kevin “Duke” Pitts. Pursuant to this agreement, Mr. Pitts has agreed to serve as our President and Chief Executive Officer in exchange for $120,000 per year. The Companyagreement had an expiration date of December 31, 2021, but has authorized 75,000,000 common shares with a par value of $0.001 per share.  Each common share entitles the holder to one vote on any matter on which action of the stockholders of the corporation is sought.been extended indefinitely since then. 

 

Common Share IssuancesMadden Consulting Agreement

Effective June 1, 2022, we entered into a Consulting Agreement with Robert Madden. Pursuant to the agreement, Madden has agreed to serve as our Chief Financial Officer and Secretary in exchange for $42,000 per year. The agreement is effective for one year, and will automatically renew for successive one-year terms. 

Jay Decker Transactions

We have entered into numerous transactions with Jay Decker, our majority shareholder, as follows: 

BergaMet Acquisition

 

On December 19, 2014,February 4, 2019, we acquired BergaMet NA, LLC, a Delaware limited liability company (“BergaMet”). BergaMet is a wholly-owned subsidiary through which we conduct our nutraceuticals business. As a result of the Company issued a totalacquisition, Jay Decker became our majority shareholder upon our issuance to him of 10,000,00085,345,862 shares of our common stock. The shares of common stock issued in the acquisition were equal to its three founders for a cash contributionapproximately 80.1% of $100.our outstanding common stock immediately following the closing.

Ultimate Brain Nutrients, LLC Acquisition

 

On December 24, 2014April 3, 2020, we acquired Ultimate Brain Nutrients, LLC, a Delaware limited liability company (“UBN”). UBN is a wholly-owned subsidiary through which we conduct our plant-based neuro-products business. As a result of the Company issued 1,006,666acquisition, Jay Decker became a significantly larger shareholder upon our issuance to him of 44,907,968 shares of our common stock. The shares of common stock issued in the acquisition were equal to approximately 42.5% of our outstanding common stock immediately following the closing.


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Note Conversion Agreements and Advance Conversion Agreements

Effective April 13, 2020, we entered into a total of eighteen (18) agreements (16 Note Conversion Agreements and 2 Advance Conversion Agreements) whereby an aggregate of $1,508,407.84 in outstanding principal and accrued interest was converted into an aggregate of 392,488 shares of our common stock. The conversion price was either $3.00 per share or $5.00 per share, depending on the individual agreement. The conversions included notes and advances held by our officers and directors and our largest shareholder, as follows:

 

Name

Aggregate Principal
and Interest

 

Aggregate Shares

Jay W. Decker

$1,282,231.11

334,180

William Bossung

$65,677.84

21,892

First Capital Properties LLC

$16,180.00

5,393

Shelton S. Decker

$33,717.78

7,822

Logan B. Decker

$33,717.78

7,822

Kevin Pitts

$51,255.56

10,251

Innovation Group Holdings, LLC

$25,627.78

5,125

Note Conversion Agreements

Effective September 2, 2020, we entered into five (5) Note Conversion Agreements whereby an aggregate of $1,791,382.56 in outstanding principal and accrued interest was converted into an aggregate of 358,276 shares of our common stock. The conversion price was $5.00 per share. The conversions included a note held by our largest shareholder, as follows:

Name:

No. of Shares

Jay W. Decker

307,350

Genuine Partners

16,926

Dan Bishop

22,000

James Knox

10,000

Matthew Dee Grabau

2,000

Total

358,276

Securities Purchase Agreements

Effective October 15, 2020, we entered into four unaffiliated investors(4) Securities Purchase Agreements whereby we sold and issued 59,000 shares of our common stock at $5.00 per share for proceedsaggregate consideration of $20,133.$295,000. The purchasers included our officers and directors and our largest shareholder, as follows:

 

Name

Aggregate Principal
and Interest

 

Aggregate Shares

Jay W. Decker

$100,000

20,000

Shelton S. Decker

$50,000

10,000

Logan B. Decker

$50,000

10,000

Dr. Gerald Haase

$95,000

19,000

   Total

$295,000

59,000


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Securities Purchase Agreements

 

On February 9, 201510, 2021, and effective December 29, 2020, we entered into Securities Purchase Agreements with Shelton Decker and Logan Decker for the Company issued 10,000purchase and sale of an aggregate of 20,000 shares of our common stock for proceeds of $1,000at $5.00 per share, as follows:

Name:

No. of Shares

Logan Decker

10,000

Jay Decker

10,000

Total

20,000

Promissory Notes

On February 10, 2021, we issued promissory notes to an unaffiliated investorJay Decker dated December 14, 2020 and December 21, 2020 in the private placement referredprincipal amount of $100,000 and $70,000 respectively.

On January 20, 2022, we issued a promissory note to .On January 30, 2015Jay Decker in the Companyprincipal amount of $185,000. In conjunction therewith and on the same date, we issued 3,290,000 units to unaffiliated investors in a private placement for proceeds of $329,000. Each unit consists of one share of common stock and one common stock purchase warrant. Each common stock purchase warrant entitles the holderJay Decker warrants to purchase one share20,000 shares of our common stock for each warrant at an exercise price of $0.50$5.00 per share. 

On June 24, 2022, we entered into a Note Conversion Agreement with Jay Decker whereby Decker converted $17,000 in principal and expire$31.07 in interest on an outstanding convertible note into 3,406 shares of our common stock at a conversion price of $5.00 per share.

Warrants

On February 10, 2021, but effective December 31, 2016.21, 2020, we issued warrants to purchase an aggregate of 75,000 shares of our common stock, at an exercise price of $5.00 per share, as follows (the “Warrants”), for consulting services rendered:

Name:

No. of Warrants

Jay Decker

45,000

Logan Decker

15,000

Shelton Decker

15,000

Total

75,000

On January 20, 2022, we issued a promissory note to Jay Decker in the principal amount of $185,000. In conjunction therewith and on the same date, we issued to Jay Decker warrants to purchase 20,000 shares of our common stock at an exercise price of $5.00 per share.

Director Independence

For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2). The OTCQB on which shares of common stock are quoted does not have any director independence requirements. The NASDAQ definition of “Independent Officer” means a person other than an Executive Officer or employee of the company or any other individual having a relationship which, in the opinion of the company’s Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. According to the NASDAQ definition, Mr. Bossung and Mr. Croyle are independent directors.


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DESCRIPTION OF SECURITIES

Our authorized capital stock consists of 25,000,000 shares of common stock, par value $0.001, and 750,000 shares of preferred stock, par value $0.001. As of January 31, 2015April 11, 2023, there were 3,290,000 warrants3,451,724 shares of our common stock issued and outstanding, and no shares of preferred stock issued or outstanding.

 

Directors Independence

OurCommon Stock. Each shareholder of our common stock is entitled to a pro rata share of cash distributions made to shareholders, including dividend payments. The holders of our common stock are entitled to one vote for each share of record on all matters to be voted on by shareholders. There is no cumulative voting with respect to the election of our directors or any other matter. Therefore, the holders of more than 50% of the shares voted for the election of those directors can elect all of the directors. The holders of our common stock are entitled to receive dividends when and if declared by our Board of Directors from funds legally available therefore. Cash dividends are at the sole discretion of our Board of Directors. In the event of our liquidation, dissolution or winding up, the holders of common stock are entitled to share ratably in all assets remaining available for distribution to them after payment of our liabilities and after provision has been made for each class of stock, if any, having any preference in relation to our common shareholders of shares of our common stock have no conversion, preemptive or other subscription rights, and there are no redemption provisions applicable to our common stock.

Preferred Stock. We are authorized to issue 750,000 shares of preferred stock, par value $0.001 per share. No shares of preferred stock are issued or outstanding, and no series of preferred stock has been created.

Options and Warrants.

There are currently outstanding options to acquire 104,500 shares of Common Stock at $5.00 per share, warrants to acquire 140,000 shares of Common Stock at either $5.00 or $7.50 per share, warrants to acquire 168 shares of Common Stock at $6,250 per share, Restricted Stock Units to acquire 159,750 shares of Common Stock at $1.00 per share, and 360,000 unvested Restricted Stock Awards.

On a fully diluted basis, the number of shares of common stock that could be issued and outstanding prior to this Offering is 4,408,450 shares. 


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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS OF OUR COMMON STOCK

The following discussion is a summary of the material United States federal income tax consequences to Non-U.S. Holders (as defined below) of the ownership and disposition of our common stock issued pursuant to this offering, but does not purport to be a complete analysis of all potential tax effects. The effects of other United States federal tax laws, such as estate and gift tax laws, and any applicable state, local or non-United States tax laws are not discussed. This discussion is based on the United States Internal Revenue Code of 1986, as amended, or the Code, Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the United States Internal Revenue Service, or the IRS, in each case in effect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a Non-U.S. Holder of our common stock. We have not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS will not take, or that a court will not sustain, a contrary position to that discussed below regarding the tax consequences of the ownership and disposition of our common stock.

This discussion is limited to Non-U.S. Holders that hold our common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all United States federal income tax consequences relevant to a Non-U.S. Holder’s particular circumstances, including the impact of the Medicare contribution tax on net investment income or the alternative minimum tax. In addition, it does not address consequences relevant to Non-U.S. Holders subject to special rules, including, without limitation:

·certain United States expatriates and former citizens or long-term residents of the United States;  

·persons holding our common stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment;  

·banks, insurance companies, and other financial institutions;  

·brokers, dealers or certain traders in securities;  

·“controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid United States federal income tax;  

·partnerships or other entities or arrangements treated as partnerships for United States federal income tax purposes (and investors therein);  

·tax-exempt organizations or governmental organizations;  

·persons deemed to sell our common stock under the constructive sale provisions of the Code;  

·persons who hold or receive our common stock pursuant to the exercise of any employee stock option or otherwise as compensation;  

·tax-qualified retirement plans;  

·“qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds;  


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·persons who own, or are deemed to own, more than 5% of our capital stock (except to the extent specifically set forth below); and  

·persons subject to special tax accounting rules as a result of any item of gross income with respect to the stock being taken into account in an applicable financial statement.  

If an entity treated as a partnership for United States federal income tax purposes holds our common stock, the tax treatment of a partner in the partnership generally will depend on the status of the partner, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships (or other entities treated as partnerships for United States federal income tax purposes) holding our common stock and the partners in such partnerships (or other entities treated as partnerships for United States federal income tax purposes) should consult their tax advisors regarding the United States federal income tax consequences to them.

THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK ARISING UNDER THE UNITED STATES FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL OR NON-UNITED STATES TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.

Definition of a Non-U.S. Holder

For purposes of this discussion, a “Non-U.S. Holder” is any beneficial owner of our common stock that is neither a “U.S. person” nor an entity treated as a partnership for United States federal income tax purposes.

A U.S. person is any person that, for United States federal income tax purposes, is or is treated as any of the following:

·an individual who is a citizen or resident of the United States;  

·a corporation, or an entity treated as a corporation, created or organized in the United States or under the laws of the United States, any state thereof, or the District of Columbia, or other entity treated as such for United States federal income tax purposes;  

·an estate, the income of which is subject to United States federal income tax regardless of its source; or  

·a trust that (1) is subject to the primary supervision of a United States court and all substantial decisions of which are subject to the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for United States federal income tax purposes.  


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Distributions

As described in the section titled “Dividend Policy,” we do not anticipate declaring or paying dividends to holders of our common stock in the foreseeable future. However, if we do make distributions of cash or property on our common stock, such distributions will constitute dividends for United States federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under United States federal income tax principles. To the extent those distributions exceed our current and accumulated earnings and profits, amounts not treated as dividends for United States federal income tax purposes will constitute a return of capital and will first be applied against and reduce a Non-U.S. Holder’s adjusted tax basis in our common stock owned by such Non-U.S. Holder, but not below zero. Any excess will be treated as capital gain and will be treated as described below under “-Sales or Other Taxable Dispositions of Common Stock.”

Subject to the discussion below on effectively connected income, backup withholding and foreign accounts, dividends paid to a Non-U.S. Holder of our common stock will be subject to United States federal withholding tax at a rate of 30% of the gross amount of the dividends (or such lower rate specified by an applicable income tax treaty, provided the Non-U.S. Holder timely furnishes a valid IRS Form W-8BEN or IRS Form W-8BEN-E (or other applicable documentation) certifying qualification for the lower treaty rate). A Non-U.S. Holder that does not timely furnish the required documentation, but that qualifies for a reduced treaty rate of United States withholding tax, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their tax advisors regarding their entitlement to benefits under any applicable income tax treaty.

If dividends paid to a Non-U.S. Holder are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such dividends are attributable), the Non-U.S. Holder will be exempt from the United States federal withholding tax described above. To claim the exemption, the Non-U.S. Holder must timely furnish to the applicable withholding agent a valid IRS Form W-8ECI (or applicable successor form), certifying that the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States.

Any such effectively connected dividends will be subject to United States federal income tax on a net income basis at regular rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected dividends, as adjusted for certain items. Non-U.S. Holders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules.

Sales or Other Taxable Dispositions of Common Stock

Subject to the discussion below regarding backup withholding and foreign accounts, a Non-U.S. Holder generally will not be subject to United States federal income tax on any gain realized upon the sale or other taxable disposition of our common stock unless:

·the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such gain is attributable);  

·the Non-U.S. Holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition and certain other requirements are met; or  


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·our common stock constitutes a United States real property interest, or USRPI, by reason of our status as a United States real property holding corporation, or USRPHC, for United States federal income tax purposes.  

Gain described in the first bullet point above generally will be subject to United States federal income tax on a net income basis at regular rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items.

Gain described in the second bullet point above will be subject to United States federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty), which may be offset by certain United States source capital losses of the Non-U.S. Holder (even though the individual is not considered a resident of the United States), provided the Non-U.S. Holder has timely filed United States federal income tax returns with respect to such losses.

With respect to the third bullet point above, we believe we currently are not, and do not anticipate becoming, a USRPHC. Generally, a corporation is a USRPHC if the fair market value of its United States real property interests equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business. Because the determination of whether we are a USRPHC depends, however, on the fair market value of our USRPIs relative to the fair market value of our non-United States real property interests and our other business assets, there can be no assurance that we currently are not a USRPHC or will not become a USRPHC in the future. Even if we are or were to become a USRPHC, gain arising from the sale or other taxable disposition by a Non-U.S. Holder of our common stock will not be subject to United States federal income tax if our common stock is “regularly traded,” as defined by applicable Treasury Regulations, on an established securities market, and such Non-U.S. Holder owned, actually and constructively, 5% or less of our common stock throughout the shorter of the five-year period ending on the date of the sale or other taxable disposition thereof or the Non-U.S. Holder’s holding period.

NON-U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING ANY POTENTIALLY APPLICABLE INCOME TAX TREATIES THAT MAY PROVIDE FOR DIFFERENT RULES.

Information Reporting and Backup Withholding

Payments of distributions on our common stock will not be subject to backup withholding, provided the applicable withholding agent does not have actual knowledge or reason to know the Non-U.S. Holder is a United States person and the Non-U.S. Holder either certifies its non-United States status, such as by furnishing a valid IRS Form W-8BEN, IRS Form W-8BEN-E or IRS Form W-8ECI, or otherwise establishes an exemption. However, information returns are required to be filed with the IRS in connection with any distributions on our common stock paid to the Non-U.S. Holder, regardless of whether any tax was actually withheld.

In addition, proceeds of the sale or other taxable disposition of our common stock within the United States, or conducted through certain United States-related brokers, generally will not be subject to backup withholding or information reporting if the applicable withholding agent receives the certification described above and does not have actual knowledge or reason to know that such Non-U.S. Holder is a United States person, or the Non-U.S. Holder otherwise establishes an exemption. Proceeds of a disposition of our common stock conducted through a non-United States office of a non-United States broker that does not have certain enumerated relationships with the United States generally will not be subject to backup


81



withholding or information reporting. Non-U.S. Holders should consult their tax advisors regarding the application of the information reporting and backup withholding rules to them.

Copies of information returns that are filed with the IRS may also be made available under the provisions of an applicable treaty or agreement to the tax authorities of the country in which the Non-U.S. Holder resides or is established.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a Non-U.S. Holder’s United States federal income tax liability, provided the required information is timely furnished to the IRS.

Additional Withholding Tax on Payments Made to Foreign Accounts

Withholding taxes may be imposed under Sections 1471 to 1474 of the Code (such Sections commonly referred to as the Foreign Account Tax Compliance Act, or FATCA) on certain types of payments made to non-United States financial institutions and certain other non-United States entities. Specifically, a 30% withholding tax may be imposed on distributions on our common stock paid to a “foreign financial institution” or a “non-financial foreign entity” (each as defined in the Code), unless (1) the foreign financial institution undertakes certain diligence and reporting obligations, (2) the non-financial foreign entity either certifies it does not have any “substantial United States owners” (as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (3) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a memberforeign financial institution and is subject to the diligence and reporting requirements in (1) above, it must enter into an agreement with the United States Department of the Treasury requiring, among other things, that is "independent"it undertake to identify accounts held by certain “specified United States persons” or “United States-owned foreign entities” (each as defined in the Code), annually report certain information about such accounts, and withhold 30% on certain payments to non-compliant foreign financial institutions and certain other account holders. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules.

Under the applicable Treasury Regulations and administrative guidance, withholding under FATCA generally applies to payments of distributions on our common stock. While withholding under FATCA also would have applied to payments of gross proceeds from the sale or other disposition of such stock on or after January 1, 2019, proposed Treasury Regulations eliminate FATCA withholding on payments of such gross proceeds. In its preamble to these proposed Treasury Regulations, the U.S. Treasury Department stated that taxpayers generally may rely on these proposed Treasury Regulations until final Treasury Regulations are issued.

PROSPECTIVE INVESTORS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE POTENTIAL APPLICATION OF WITHHOLDING UNDER FATCA TO THEIR INVESTMENT IN OUR COMMON STOCK.


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UNDERWRITING

We intend to enter into an underwriting agreement with Spartan Capital Securities, LLC, as the termrepresentative of the underwriters and the lead book-running manager of this Offering. Subject to the terms and conditions of the underwriting agreement, each underwriter will agree to purchase from us the number of Shares set forth opposite its name below.

Underwriter

Number of Shares

Spartan Capital Securities, LLC

[·]

[·]

[·]

Total

[·]

We have been advised by the underwriters that they propose to offer the Shares directly to the public at the public offering price set forth on the cover page of this prospectus. Any Shares sold by the underwriters to securities dealers will be sold at the public offering price less a selling concession not in excess of $[·] per share. The underwriters may allow, and these selected dealers may re-allow, a concession of not more than $[·] per share to other brokers and dealers.

We intend for the underwriting agreement to provide that the underwriters’ obligation to purchase the Shares that we are offering will be subject to the terms and conditions described therein.

Over-Allotment Option

We intend to grant to the underwriters an option, exercisable for 45 days from the date of this prospectus, to purchase up to [·] additional shares of Common Stock from us at the initial offering price set forth on the cover page of this prospectus, less the underwriting discount. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with the Offering of the Shares offered by this prospectus.

Underwriting Discount and Expenses

The following table shows the public offering price, underwriting discount of 8%, and proceeds before expenses to us. The information assumes either no exercise or full exercise of the option we granted to the underwriters to purchase additional shares of Common Stock.

Total

Per share of Common Stock

No exercise of Over-Allotment Option

Full exercise of Over-Allotment Option

Initial public offering price

$[·]

$[·]

$[·]

Underwriting discounts

$[·]

$[·]

$[·]

Proceeds, before expenses, to us

$[·]

$[·]

$[·]

We estimate expenses payable by us in connection with this Offering, other than the underwriting discounts referred to above, will be approximately $280,000. We have agreed to reimburse the underwriters for all reasonable travel and other out-of-pocket expenses, including fees and disbursements related to its legal counsel, in an amount not to exceed $200,000 in the aggregate.


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Determination of Public Offering Price

The public offering price of the Shares will be determined by negotiations between us and the underwriters. Among the factors considered in determining the public offering price of the shares of Common Stock will be our historical stock price, the history and prospects of other companies in the industry in which we compete; our financial information; an assessment of our management and their experience; an assessment of our business potential and earning prospects; the prevailing securities markets at the time of this Offering; the recent market prices of, and the demand for, publicly traded shares of generally comparable companies; and other factors deemed relevant. Neither we nor the underwriters can assure that the shares of Common Stock will trade in the public market at or above the public offering price for such shares.

Underwriters’ Warrants

In addition, we intend to agree to issue to the underwriters the Underwriters’ Warrants, exercisable for up to [·] shares of Common Stock, which is usedequal to 5% of the total number of Shares sold in Item 7(d) (3) (iv)this Offering (including any such shares of Schedule 14ACommon Stock sold to cover over-allotments, if any) at an exercise price equal to $[·] per share (110% of the public offering price of $[·] per share of Common Stock). The Underwriters’ Warrants may be purchased in cash or via cashless exercise and will be exercisable at any time after the closing of this Offering of the Shares until the fifth anniversary of the date of commencement of sales of such shares of Common Stock. The Underwriters’ Warrants and the shares of Common Stock underlying the Underwriters’ Warrants will be deemed compensation by FINRA, and therefore will be subject to FINRA Rule 5110. In accordance with FINRA Rule 5110, neither the Underwriters’ Warrants nor any of our shares of Common Stock issued upon exercise of the Underwriters’ Warrants may be sold, transferred, assigned, pledged or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of such securities by any person, for a period of 180 days beginning on the date of commencement of sales of the Shares, subject to certain exceptions set forth in FINRA Rule 5110(e)(2).

Stabilization

In connection with this Offering of the Shares, the underwriters may engage in stabilizing transactions and syndicate covering transactions and purchases to cover positions created by short sales.

Stabilizing transactions permit bids to purchase shares of Common Stock so long as the stabilizing bids do not exceed a specified maximum, and are engaged in for the purpose of preventing or retarding a decline in the market price of the Common Stock while the Offering of the Shares is in progress.

Syndicate covering transactions involve purchases of Common Stock in the open market after the distribution has been completed in order to cover syndicate short positions. Since there is no over-allotment option, if the underwriters would have a naked short position, it can be closed out only by buying shares of Common Stock in the open market. A naked short position is more likely to be created if the underwriters are concerned that after pricing there could be downward pressure on the price of the shares of Common Stock in the open market that could adversely affect investors who purchase shares of Common Stock in this Offering.

Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the security originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions. These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our Common


84



Stock or preventing or retarding a decline in the market price of our Common Stock. As a result, the price of our Common Stock in the open market may be higher than it would otherwise be in the absence of these transactions. Neither we nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the price of our Common Stock. These transactions may be effected on Nasdaq, in the over-the-counter market or otherwise and, if commenced, may be discontinued at any time.

Indemnification

We intend to agree, pursuant to the underwriting agreement, to indemnify the underwriters and selected dealers against certain liabilities, including certain liabilities arising under the Securities Act, or to contribute to payments that the underwriters or selected dealers may be required to make for these liabilities.

Listing on the Nasdaq Capital Market

We have applied to list our Common Stock on Nasdaq.

Electronic Distribution

A prospectus in electronic format may be made available on websites maintained by the underwriters, or selling group members, if any, participating in this Offering. The underwriters may agree to allocate a number of shares of our Common Stock for sale to its online brokerage account holders.

Other Relationships

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing, and brokerage activities. The underwriters and their respective affiliates may in the future perform various financial advisory, investment banking, and other services for us, for which they may receive customary fees and commissions. In addition, in the ordinary course of their various business activities, the underwriters and their respective affiliates may effect transactions for their own account or the accounts of customers, and hold on behalf of themselves or their customers long or short positions in our debt or equity securities or loans, and may do so in the future. The underwriters and their respective affiliates may also make investment recommendations or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to their customers that they acquire, long or short positions in such securities and instruments.

Selling Restrictions

No action has been taken by us or the underwriters that would permit a public offering of the shares of Common Stock in any jurisdiction where action for that purpose is required. None of our shares of Common Stock included in this Offering may be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sales of any of the shares of Common Stock offered hereby be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons who receive this prospectus are advised to inform themselves about and to observe any restrictions relating to this Offering of shares of Common Stock and the distribution of this prospectus. This prospectus is neither an offer to sell nor a solicitation of any offer to buy the shares of Common Stock in any jurisdiction where that would not be permitted or legal.


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LEGAL MATTERS

The validity of the securities offered by this prospectus have been passed upon for us by Clyde Snow & Sessions, PC, Salt Lake City, Utah. The underwriters of this offering are being represented by Ellenoff Grossman & Schole LLP, New York, New York.

EXPERTS

The audited financial statements of Healthy Extracts Inc. as of December 31, 2021 and 2020 appearing in this prospectus which is part of a registration statement have been so included in reliance on the report of BF Borgers CPA PC, given on the authority of such firm as experts in accounting and auditing.

INTEREST OF NAMED EXPERTS AND COUNSEL

Clyde Snow & Sessions, PC serves as our legal counsel in connection with this offering. Brian A. Lebrecht, a shareholder at Clyde Snow & Sessions, owns Restricted Stock Units to acquire 10,000 shares of Common Stock at $1.00 per share.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a registration statement on Form S-1, together with all amendments and exhibits thereto, under the Securities Act of 1933 with respect to the common stock offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement and the exhibits and schedules thereto. You should refer to the registration statement and its exhibits and schedules for further information. Statements contained in this prospectus as to the contents of any contract or other document referred to are not necessarily complete and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the registration statement, each such statement being qualified in all respects by such reference.

Copies of documents we file with the Commission, including this prospectus, the registration of which it is a part and the related exhibits, may be read and copies at the Commission’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our filings with the Commission are also available through the Commission’s website at the following address: http://www.sec.gov.

We are subject to the information and periodic reporting requirements of the Securities Exchange Act of 1934, and, in accordance therewith, file periodic reports, proxy statements and other information with the Commission. Such periodic reports, proxy statements and other information are available for inspection and copying at the Public Reference Room and website of the SEC referred to above. We also furnish our shareholders with annual reports containing our financial statements audited by an independent registered public accounting firm and quarterly reports containing our unaudited financial information. We maintain a website at www.healthyextractsinc. You may access our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, filed or furnished pursuant to section 13(a) or 15(d) of the Exchange Act with the Commission free of charge at our website as amended.soon as reasonably practicable after this material is electronically filed with, or furnished to, the Commission. The reference to our website or web address does not constitute incorporation by reference of the information contained at that site.


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INCORPORATION BY REFERENCE

 

MATERIAL CHANGES

None

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

None

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

PursuantWe “incorporate by reference” information from other documents that we file with the SEC into this prospectus, which means that we disclose important information to the Company's Articles of Incorporation and bylaws, we may indemnify an officer or director whoyou by referring you to those documents. The information incorporated by reference is made a party to any proceeding, including a lawsuit, because of his position, if he acted in good faith and in a manner he reasonably believeddeemed to be part of this prospectus except for any information that is superseded by information included directly in our best interest.  In certain cases,this prospectus, and the information that we may advance expenses incurredfile later with the SEC will automatically supersede this information. Any statement contained in defendingthis prospectus or any such proceeding.  Toprospectus supplement or a document incorporated by reference in this prospectus or in any prospectus supplement will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or in any other subsequently filed document that is incorporated by reference in this prospectus modifies or superseded the officerstatement. Any statement so modified or directorssuperseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus. You should not assume that the information in this prospectus is successfulcurrent as of the date other than the date on the merits incover page of this prospectus.

We are incorporating by reference into this prospectus any such proceeding asadditional documents that we may file with the SEC pursuant to which such person is to be indemnified, we must indemnify him against all expenses incurred, including attorney's fees.  With respect to a derivative action, indemnity may be made only for expenses actuallySections 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the effective date of the registration statement and reasonably incurred in defending the proceeding, and if the officer or directors is judged liable, only by a court order.  The indemnification is intended to beprior to the fullest extent permitted by the lawstermination of the State of Nevada.offering.

 

-40-
(table of contents)

FINANCIAL STATEMENTSYou may request a copy of any document incorporated by reference in this prospectus and any exhibit specifically incorporated by reference in those documents, at no cost, by writing or telephoning us at the following address or phone number:

 

TABLE OF CONTENTSHealthy Extracts Inc.

7375 Commercial Way, Suite 125

Henderson, NV 89011

(702) 463-1004

Attn: Kevin “Duke” Pitts


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INDEX TO FINANCIAL STATEMENTS

 

Healthy Extracts Inc.:

For the Years ended December 31, 2022 and 2021

 

Page

Report of Independent Registered Public Accounting Firm

42

F-3

Balance SheetSheets as of December 31, 2022 and 2021 (Audited)

43

F-4

Statements of Operations for the years ended December 31, 2022 and 2021 (Audited)

F-5

Statement of OperationsStockholders’ Equity (Deficit) for the years ended December 31, 2022 and 2021 (Audited)

44

F-6

StatementStatements of Cash Flows for the years ended December 31, 2022 and 2021 (Audited)

45

F-7

Notes to the Condensed Interim Consolidated Financial Statements

46

F-8

 

Hyperion, L.L.C.:

For the Years ended December 31, 2022 and 2021

Report of Independent Registered Public Accounting Firm

F-20

Balance Sheets as of December 31, 2022 and 2021 (Audited)

F-21

Statements of Operations for the years ended December 31, 2022 and 2021 (Audited)

F-22

Statement of Stockholders’ Equity (Deficit) for the years ended December 31, 2022 and 2021 (Audited)

Statements of Cash Flows for the years ended December 31, 2022 and 2021 (Audited)

F-23

Notes to Financial Statements

F-24




Online Publishing & Marketing, LLC:

For the Years ended December 31, 2022 and 2021

Report of Independent Registered Public Accounting Firm

F-29

Balance Sheets as of December 31, 2022 and 2021 (Audited)

F-30

Statements of Operations for the years ended December 31, 2022 and 2021 (Audited)

F-31

Statements of Cash Flows for the years ended December 31, 2022 and 2021 (Audited)

F-32

Notes to Financial Statements

F-33

 

 

Pro Forma:

 

-41-

Balance Sheet as of December 31, 2022

F-39

Statements of Operations for the year ended December 31, 2022

F-40

Footnotes to Audited Pro Forma Condensed Combined Financial Statements

F-41




 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Report of Independent Registered Public Accounting Firm

 

 

To the Boardshareholders and the board of Directorsdirectors of Healthy Extracts Inc.

Grey Cloak Tech Inc.

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheetsheets of Grey Cloak TechHealthy Extracts Inc. as of JanuaryDecember 31, 20152022 and 2021, the related statements of operations, stockholders’stockholders' equity (deficit), and cash flows for the periodyears then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 19, 2014 (Inception)31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

Substantial Doubt about the Company’s Ability to January 31, 2015. Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on thesethe Company's financial statements based on our audits.audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our auditsaudit in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the auditsaudit to obtain reasonable assurance about whether the financial statements are free of material misstatement.misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included considerationAs part of our audits we are required to obtain an understanding of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An

Our audit also includesincluded performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements, assessingstatements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audit provides a reasonable basis for our opinion.

 

In our opinion,Critical Audit Matter

Critical audit matters are matters arising from the current-period audit of the financial statements referredthat were communicated or required to above present fairly, in allbe communicated to the audit committee and that (1) relate to accounts or disclosures that are material respects,to the financial position of Grey Cloak Tech Inc. as of January 31, 2015,statements and the results of its operations and cash flows for the period December 19, 2014 (Inception) to January 31, 2015 in conformity with accounting principles generally accepted in the United States of America.(2) involved our especially challenging, subjective, or complex judgments.

 

We determined that there are no critical audit matters.

 

/S/Paritz & Company, P.A. BF Borgers CPA PC (PCOAB ID 5041)

We have served as the Company's auditor since 2020

Lakewood, CO

March 31, 2023




HEALTHY EXTRACTS, INC.

CONSOLIDATED BALANCE SHEETS

(Audited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DECEMBER 31,

 

DECEMBER 31,

 

 

 

 

 

 

 

2022

 

2021

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

  Cash

 

 

 

 

 

$65,651 

 

$222,098 

  Accounts receivable

 

 

 

 

105,794 

 

133,340 

  Inventory

 

 

 

 

 

1,819,128 

 

1,957,966 

 

Total current assets

 

 

 

1,990,572 

 

2,313,404 

 

 

 

 

 

 

 

 

 

 

  Fixed assets, net of accumulated depreciation of $44,709 and $45,474, respectively

 

 

5,501 

 

1,035 

  Patents/Trademarks

 

 

 

 

521,881 

 

521,881 

  Deposit

 

 

 

 

 

16,890 

 

- 

  Prepaid Acquisition Costs

 

 

 

 

53,015 

 

- 

  Goodwill

 

 

 

 

 

193,260 

 

193,260 

 

Total other assets

 

 

 

 

790,546 

 

716,175 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

 

 

 

 

$2,781,118 

 

$3,029,579 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

Accounts payable

 

 

 

 

$91,316  

 

$37,267  

Accrued liabilities

 

 

 

 

 

94,554  

 

59,264  

Notes payable

 

 

 

 

 

275,370  

 

 

Notes payable - related party

 

 

 

866  

 

170,866  

Convertible debt, net of discount of $0.00 and $0.00, respectively

 

 

317,284  

 

171,750  

Convertible debt - related party, net of discount of $0.00 and $0.00, respectively

 

 

 

 

 

Accrued interest payable

 

 

 

 

21,387  

 

13,050  

Accrued interest payable - related party

 

 

 

 

14,118  

Derivative liabilities

 

 

 

 

102,011  

 

92,527  

 

Total current and total liabilities

 

 

902,788  

 

558,841  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

  Preferred stock, $0.001 par value, 75,000,000 shares authorized, none and none shares issued and outstanding, respectively

 

 

 

 

 

  Common stock, $0.001 par value, 2,500,000,000 shares authorized, 345,172,442 and 338,384,171 shares issued and outstanding, respectively

 

 

345,172  

 

338,384  

  Additional paid-in capital

 

 

 

 

17,459,899  

 

17,075,974  

  Accumulated deficit

 

 

 

 

(15,926,742) 

 

(14,943,620) 

 

Total stockholders' equity (deficit)

 

 

1,878,330  

 

2,470,738  

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

$2,781,118  

 

$3,029,579  

 

 

 

 

 

 

 

 

 

 

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




HEALTHY EXTRACTS, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDING DECEMBER 31,

(Audited)

 

 

 

 

 

 

 

 

 

 

 

FOR THE YEAR ENDING

 

 

 

 

 

DECEMBER 31

 

 

 

2022

 

2021

 

 

 

 

 

 

 

 

REVENUE

 

 

 

 

 

 

   Gross revenue

 

 

 

$2,251,469  

 

$1,676,598  

 

Net revenue

 

 

 

2,251,469  

 

1,676,598  

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

 

 

 

 

   Cost of goods sold

 

 

 

783,141  

 

556,972  

   Written off inventory

 

 

 

96,811  

 

424,548  

 

Total cost of revenue

 

 

 

879,951  

 

981,520  

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

 

1,371,517  

 

695,078  

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

   General and administrative

 

 

 

2,283,107  

 

2,584,256  

 

Total operating expenses

 

 

 

2,283,107  

 

2,584,256  

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

   Interest expense, net of interest income

 

 

 

(64,690) 

 

(52,453) 

   Change in fair value on derivative

 

 

 

(9,484) 

 

(85,325) 

   Loss on extinguishment of debt

 

 

 

 

 

 

   SBA loan forgiveness

 

 

 

 

 

39,833  

   Gain on sale of asset

 

 

 

2,643  

 

 

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

 

 

(71,531) 

 

(97,945) 

 

 

 

 

 

 

 

 

Net gain/(loss) before income tax provision

 

 

 

(983,121) 

 

(1,987,122) 

 

 

 

 

 

 

 

 

NET GAIN/(LOSS)

 

 

 

$(983,121) 

 

$(1,987,122) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share - basic and diluted

 

 

 

$(0.00) 

 

$(0.01) 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding - basic and diluted

342,514,810  

 

319,209,932  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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




HEALTHY EXTRACTS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

FOR THE YEARS ENDING DECEMBER 31, 2022 AND 2021

(Audited)

Additional

Preferred Stock

Common Stock

Paid-In

Accumulated

Shares

Amount

Shares

Amount

Capital

Deficit

Total

Balance - December 31, 2020

-

$-

308,887,410 

$308,887 

15,501,436 

$(12,956,498)

$2,853,826 

Issuance of common stock for cash

-

-

900,000 

900 

44,100 

45,000 

Issuance of common stock for cash

-

-

300,000 

300 

14,700 

15,000 

Issuance of common stock for cash

-

-

3,300,000 

3,300 

161,700 

165,000 

Issuance of common stock for cash

-

-

 - 

Issuance of common stock for debt

-

-

1,200,000 

1,200 

85,200 

86,400 

Issuance of common stock for services

-

-

715,000 

715 

50,765 

51,480 

Issuance of common stock for services

-

-

2,000,000 

2,000 

142,000 

144,000 

Issuance of common stock for services

-

-

1,000,000 

1,000 

59,000 

60,000 

Issuance of common stock for services

-

-

1,177,778 

1,178 

90,778 

91,956 

Issuance of common stock for debt

-

-

1,200,000 

1,200 

58,800 

60,000 

Issuance of common stock for services

-

-

3,500,000 

3,500 

171,500 

175,000 

Issuance of common stock for cash

-

-

2,000,000 

2,000 

98,000 

100,000 

Issuance of common stock for debt

-

-

12,203,983 

12,204 

597,995 

610,199 

Net (loss) gain for the period

-

-

 - 

(1,987,122)

(1,987,122)

Balance - December 31, 2021

-

$-

338,384,171 

$338,384 

17,075,974 

$(14,943,620)

$2,470,738 

Cancelation of common stock for debt

-

-

(200,267)

(200)

(9,813)

(10,013)

Issuance of common stock for cash

-

-

507,917 

508 

24,888 

25,396 

Cancelation of common stock for debt

-

-

(600,000)

(600)

(43,200)

(43,800)

Issuance of common stock for services

-

-

1,000,000 

1,000 

63,000 

64,000 

Issuance of common stock for services

-

-

1,000,000 

1,000 

56,100 

57,100 

Issuance of common stock for services

-

-

4,400,000 

4,400 

259,600 

264,000 

Issuance of common stock-Note Conversion

-

-

340,621 

341 

16,690 

17,031 

Issuance of common stock for services

-

-

340,000 

340 

16,660 

17,000 

Net (loss) gain for the period

-

-

 - 

(983,121)

(983,121)

Balance - December 31, 2022

-

$-

345,172,442 

$345,172 

17,459,899 

$(15,926,742)

$1,878,330 

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




HEALTHY EXTRACTS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(Audited)

 

 

 

 

 

 

 

FOR THE YEAR

 

 

ENDING

 

 

DECEMBER 31,

 

2022

 

2021

Cash Flows from Operating Activities:

 

 

 

 

Net Gain/(Loss)

 

$(983,121) 

 

$(1,987,122) 

 

 

 

 

 

Adjustments to reconcile net loss to net cash

 

 

 

 

used in operating activities:

 

 

 

 

Depreciation and amortization

 

878  

 

5,100  

Warrants issued for services

 

402,100  

 

608,836  

Non-cash compensation

 

 

 

 

Change in fair value on derivative liability

 

9,484  

 

85,325  

Loss on extinguishment of debt

 

 

 

 

Gain on sale of asset

 

2,643  

 

 

Impairment of goodwill

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

27,547  

 

(120,066) 

Inventory

 

138,838  

 

459,717  

Accrued interest receivable

 

 

 

 

Deposits

 

(16,890) 

 

 

Accounts payable

 

54,048  

 

(27,569) 

Accounts payable - related party

 

 

 

 

Accrued liabilities

 

35,291  

 

50,210  

Accrued interest payable

 

8,337  

 

10,671  

Accrued interest payable - related party

 

(14,118) 

 

13,600  

Net Cash used in Operating Activities

 

(334,964) 

 

(901,298) 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

 

Purchase of fixed assets

 

(7,987) 

 

 

Cash received from sale of asset

 

 

 

 

Purchase of note receivable

 

 

 

 

Trademarks

 

 

 

(96,004) 

Payments of note receivable

 

 

 

 

Cash flows provided by (used in) Investing Activities:

 

(7,987) 

 

(96,004) 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

 

Purchase of BergaMet

 

 

 

 

Purchase of Hyperion/OP&M

 

(53,015) 

 

 

Proceeds from issuance of common stock

 

(11,386) 

 

995,199  

Proceeds from issuance of convertible debt

 

463,630  

 

165,000  

Payments for repayment of convertible debt

 

(318,095) 

 

 

Proceeds from issuance of noted payable

 

275,370  

 

 

Proceeds from issuance of noted payable - related party

 

 

 

 

Payments for repayment of notes payable - related party

 

(170,000) 

 

 

Net Cash provided by Financing Activities

 

186,504  

 

1,160,199  

 

 

 

 

 

Increase (decrease) in cash

 

(156,447) 

 

162,897  

Cash at beginning of period

 

222,098  

 

59,201  

Cash at end of period

 

$65,651  

 

$222,098  

 

 

 

 

 

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


F-7



HEALTHY EXTRACTS, INC.

 

Hackensack, New JerseyNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

February 10, 2015December 31, 2022 and 2021

 

-42-

(table of contents)

GREY CLOAK TECH INC.

BALANCE SHEET

JANUARY 31, 2015

 
ASSETS  
   
CURRENT ASSETS    
   Cash $322,924 
Total current assets  322,924 
     
     
TOTAL ASSETS $322,924 
     
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
LIABILITIES    
  $—   
Total liabilities  —   
     
     
STOCKHOLDERS' EQUITY    
   Common stock, $0.001 par value, 75,000,000 shares authorized,    
      14,296,666 shares issued and outstanding  14,297 
   Additional paid-in capital  334,936 
   Accumulated Deficit  (26,309)
Total stockholders' equity  322,924 
     
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $322,924 

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

-43-

GREY CLOAK TECH INC.

STATEMENT OF OPERATIONS

FOR THE PERIOD FROM INCEPTION (DECEMBER 19, 2014) TO JANUARY 31, 2015

REVENUE $—   
     
OPERATING EXPENSES    
    General and administrative  26,309 
     
Total operating expenses  26,309 
     
Net loss before income taxes  (26,309)
     
Income tax provision  —   
     
NET LOSS $(26,309)
     
     
Loss per share - basic and diluted $(0.00)
     
Weighted average number of shares outstanding - basic and diluted  10,966,123 

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

-44-

GREY CLOAK TECH INC.

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD FROM INCEPTION (DECEMBER 19, 2014) TO JANUARY 31, 2015

    Additional    
  Common Stock Paid-In Accumulated  
  Shares Amount Capital Deficit Total
           
           
Balance at Inception December 19, 2014  —    $—    $—    $—    $—   
                     
Issuance of common stock to founders  10,000,000   10,000   (9,900)  —     100 
                     
Issuance of common stock at $.02 per share  1,006,666   1,007   19,126       20,133 
                     
Issuance of common stock and warrants in private placement at $.10 per unit  3,290,000   3,290   325,710       329,000 
                     
Net loss for the period  —     —     —     (26,309)  (26,309)
                     
Balance - January 31, 2015  14,296,666  $14,297  $334,936  $(26,309) $322,924 

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

-45-

GREY CLOAK TECH INC.

STATEMENT OF CASH FLOWS

FOR THE PERIOD FROM INCEPTION (DECEMBER 19, 2014) TO JANUARY 31, 2015

Cash Flows from Operating Activities:    
     
Net Loss $(26,309)
     
Adjustments to reconcile net loss to net cash    
used in operating activities:    
     
Net Cash used in Operating Activities  (26,309)
     
     
Cash flows from Financing Activities:    
     
Proceeds from issuance of common stock  349,233 
Net Cash provided by Financing Activities  349,233 
     
Increase in cash  322,924 
Cash at beginning of period  —   
Cash  at end of period $322,924 

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

-46-

GREY CLOAK TECH INC.

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 2015

 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Grey Cloak TechHealthy Extracts Inc. (the “Company”) was incorporated in the State of Nevada on December 19, 2014.2014 as Grey Cloak Tech Inc. On October 23, 2020, we changed our name from Grey Cloak Tech Inc. to Healthy Extracts Inc. to more accurately reflect our business. The Companywas formed to engage in the business of cloud based software to detect advertising fraud on the internet. has acquired BergaMet NA, LLC and Ultimate Brain Nutrients, LLC which market and sell health supplemental products.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accounting and reporting policies of the Company conform toaccompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).

The Company is consideredfor interim financial statements and with the instructions to beForm 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the development stageUnited States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as definedof December 31, 2022 and the results of operations and cash flows for the periods presented. The results of operations for the months ending December 31, 2022 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in ASC 915 “Development Stage Entities.” The Company is devoting substantially all of its efforts toconjunction with the development of its business plans. The Company has elected to adopt early application of Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements;financial statements and does not present or disclose inception-to-date information and other remaining disclosure requirements of Topic 915.related notes thereto included in the Company’s form 10-K for the year ended December 31, 2021 filed with the SEC on April 1, 2022.

 

Use of estimatesEstimates

 

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

 

Start-Up Costs

In accordance with ASC 720, “Start-up Costs”, the Company expenses all costs incurred in connection with the start-up and organization of the Company.

Cash

 

Cash includes cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.

 

Accounts Receivables

Accounts receivables are recorded at the invoice amount and do not bear interest.


F-8



Inventory

Inventories consist of health supplements held for sale in the ordinary course of business. The Company uses the weighted average cost method to value its inventories at the lower of cost and net realizable value. The components of inventory cost include raw materials, labor, and overhead.  Net realizable value is determined using various assumptions with regard to excess or slow-moving inventories, expiration dates, current and future product demand, production planning, and market conditions.  A change in any of these variables could result in an adjustment to inventory.

An allowance for inventory was established in 2018 and is evaluated each quarter to determine if all items are still sellable due to expiration dates. As of December 31, 2022 and 2021, the total of inventory which was written off as an inventory allowance was $1,914,891 and $1,914,891.

 

 

DECEMBER 31,

 

 

DECEMBER 31,

 

 

2022

 

 

2021

Inventory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventory Classes:

 

 

 

 

 

 

 

 Raw Materials

 

$

1,483,764

 

 

$

1,757,808

 Finished Goods

 

 

310,600

 

 

 

194,490

 Work in process

 

 

24,764

 

 

 

5,668

Total inventory

 

 

1,819,128

 

 

 

1,957,966

Property and Equipment

The Company’s property and equipment are recorded at cost and depreciated using the straight-line method over the useful lives of the assets, generally from three to seven years. Upon sale or disposal of property and equipment, the related asset cost and accumulated depreciation or amortization are removed from the respective accounts and any gain or loss is reflected in current operations.

Indefinite-Lived Intangible Assets

Indefinite-lived intangible assets established in connection with business combinations consist of patents, trademarks, and trade names. The impairment test for identifiable indefinite-lived intangible assets consists of a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. With the acquisition of Ultimate Brain Nutrients on April 3, 2020 the Company added a purchasing value of $315,604 in patents to its balance sheet.

As of December 31, 2022, the Company believes that based upon qualitative factors, no impairment of indefinite-lived intangible assets is necessary.

Goodwill

In accordance with Goodwill and Other Intangible Assets, goodwill is defined as the excess of the purchase price over the fair value assigned to individual assets acquired and liabilities assumed and is tested for impairment at the reporting unit level on an annual basis in the Company's fourth fiscal quarter or more frequently if indicators of impairment exist. The performance of the test involves a two-step process. The first step of the impairment test involves comparing the fair value of the Company's reporting units with each respective reporting unit's carrying amount, including goodwill. The fair value of reporting units is generally determined using the income approach. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, the second step of the goodwill impairment test is performed to determine the


F-9



amount of any impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. The Company sees the goodwill to have a ten-year useful life. No goodwill impairment indicators were present, for the goodwill listed on the books as of December 31, 2022, after working through our analysis of goodwill during the months ending December 31, 2022.

The Company has determined that the method applied represents the fair value of the asset group principally because the valuation of the intangibles with the asset group is based on the anticipated cash flows related to the revenue stream from its customers. The asset group excludes goodwill, long term non-operational assets and liabilities and cash. As such, the principal value from the asset group relates to the cash inflows from its customers and the cash outflows required to service these customers. The fair value for the asset group consists of the following:

·Fair value of net revenues: computed using the income approach. The key input to these computations is the anticipated cash inflows from customers. These valuations include 100% of the cash inflows related to the customer base, and taking cash outflows into consideration. 

·Fair value of working capital (including accounts receivable, inventory, accrued expenses, and accounts payables). Due to the short-term nature of the working capital, book value has been determined to be fair value. These accounts represent either avoided future outflows (inventory, prepaids) or future cash flows (accrued expense, AP and AR) related to customer sales. 

·Fair value of five years of revenue (2022 to 2026):  we discounted our cash flows to the anticipated cash projected to be received. We also projected the anticipated cash outflows required to service these customers. If the asset group was to be valued as a whole, we would expect an income approach based on the revenues being generated from the customers and expenses required to service those customers, appropriately adjusted for the working capital position. The sum of these values reasonably approximates this approach. 

The Company’s revenue streams align directly with the intangibles, which were recorded as a result of the BergaMet acquisition in fiscal 2019. For purposes of the Step 2 recoverability test under ASC 360 subsection 2.3., the net revenues from BergaMet customers base were used. The revenue stream fairly reflects anticipated future cash flows; accordingly, the intangibles associated with these revenue streams have been tested with the expected cash flows.

Due to the purchase of Ultimate Brian Nutrients, LLC being a related party transaction and the new division recording no revenue as of June 30, 2020, the Company found the goodwill to be impaired. Due to the impairment the Company expensed the goodwill related to the purchase as of June 30, 2020.

Revenue Recognition

The Company applies Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) topic 606, Revenue from Contracts with Customers (ASC 606).  ASC 606 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes all of the existing revenue recognition guidance.  This standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 requires us to identify distinct performance obligations.  A performance obligation is a promise in a contract to transfer a distinct good or service to the customer.  When distinct performance obligations exist, the Company allocates the contract transaction price to each distinct performance obligation.  The


F-10



standalone selling price is used to allocate the transaction price to the separate performance obligations. The Company recognizes revenue when, or as, the performance obligation is satisfied.

Generally, revenues are recognized at the time of shipment to the customer with the price being fixed and determinable and collectability assured, provided title and risk of loss is transferred to the customer.  Most of our shipping and handling costs are built into the transaction price, but if the customer asks for express shipping, the costs charged to customers are classified as sales, and the shipping and handling costs incurred are included in cost of sales.

The Company’s subsidiary, BergaMet N.A., LLC, recognizes revenue from our main source – e-commerce revenue.  Here is a list of all the sales channels which include the Company’s subsidiary website channel or any other selling channel like Amazon, doctors’ offices, and walk-in sales.  All of our customer sales for Healthy Extracts, Inc. and Ultimate Brain Nutrients, LLC are recognized as revenue under the subsidiary of BergaMet N.A., LLC.  All three divisions of the Company sell plant-based nutraceuticals to our end using customers.

The Company evaluates the criteria outlined in ASC 606-10-55, Principal versus Agent Considerations, currently we are the principal and have not engaged any agents at this time.  Currently, we have not recognized any revenues under the agent considerations.

Revenue is recognized when, or as, control of a promised merchandise or service is shipped to the customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring title of those products or services and are recorded net of and discounts or allowances.  Shipping costs paid by the customer are included in revenue.  Merchandise sales are fulfilled with inventory held in our warehouse in Henderson, NV.  Therefore, the Company’s contracts have a single performance obligation (shipment of product).

If the Company receives a request for refund on a customer obligation, the Company will refund the full cost of the obligation due to our money back guarantee.  

Revenue recognition is evaluated through the following five-step process:

1.identification of the contract with a customer; 

2.identification off the performance obligations in the contract; 

3.determination of the transaction price; 

4.allocation of the transaction price to the performance obligations in the contract; and 

5.recognition of revenue when or as a performance obligation is satisfied. 

These steps are met when an order is received, a price agreed and the product shipped or delivered to that customer.

Concentration

There is no concentration of revenue for the months ended December 31, 2021 and for the months ended December 31, 2022 because the revenue was earned from multiple customers.

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the


F-11



financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. As of JanuaryFor the period ending December 31, 2015,2021 and December 31, 2022, the Company did not have any amounts recorded pertaining to uncertain tax positions.

The following is accounting our operating loss carry-forward since our inception:

NOL Carryforward:

 

 

Year Total

 

 

 

Balance

 2014

 

$

(19,500)

 

 

$

(19,500)

 2015

 

 

(730,872)

 

 

 

(750,372)

 2016

 

 

(3,370,935)

 

 

 

(4,121,307)

 2017

 

 

(3,562,075)

 

 

 

(7,683,382)

 2018

 

 

(3,329,517)

 

 

 

(11,012,899)

 2019

 

 

632,776

 

 

 

(10,380,123)

 2020

 

 

(2,576,375)

 

 

 

(12,956,498)

 2021

 

 

(1,987,122)

 

 

 

(14,943,620)

 2022

 

 

(983,122)

 

 

 

(15,926,742)

Total of NOL Carryforward

 

 

 

 

 

 

(15,926,742)

 

Fair Value Measurements

-47-

 

The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

 

The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

 

ASC 820 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. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

 

Level 1 — quoted prices in active markets for identical assets or liabilities

 

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

 

Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

 

The Company has no assets or liabilities valuedderivative liability in connection with the conversion feature of the convertible debt, classified as a Level 3 liability, is the only financial liability measure at fair value on a recurring basis.

 


F-12



The change in Level 3 financial instrument is as follows:

Balance, January 1, 2022

$          92,527

Issued during the months ended December 31, 2022

297,807

Change in fair value recognized in operations

(203,822)

Converted during the months ended December 31, 2022

(84,501)

Balance, December 31, 2022

$        102,011

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements of five–step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract cost, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments in this ASU are effective for reporting period beginning after December 15, 2016, and early adoption is prohibited. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.

The Company’s revenues are recognized when control of the promised goods or services is transferred to our clients (upon shipment of goods) in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: (1) Identify the contract with a client; (2) Identify the performance obligations in the contract; (3) Determine the transaction price; (4) Allocate the transaction price to performance obligations in the contract; and (5) Recognize revenues when or as the Company satisfies a performance obligation.

We adopted ASC 2014-09 on January 1, 2019. Although the new revenue standard is expected to have an immaterial impact, if any, on our ongoing net income, we did implement changes to our processes related to revenue recognition and the control activities with them.

Convertible Instruments

The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.  Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt


F-13



discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.

The Company accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities. During the months ended December 31, 2022, the Company issued $354,000 of convertible debt with a bifurcated conversion option.

Common Stock Purchase Warrants

The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC 815-40 ("(“Contracts in Entity's Own Equity"Equity”). The Company classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of common stock purchase warrants and other free standingfree-standing derivatives at each reporting date to determine whether a change in classification is required.

NOTE 3 – GOING CONCERN

The warrants issued toaccompanying financial statements have been prepared assuming that the participantsCompany will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the private placement referrednormal course of business. The Company has generated minimal revenues from operations. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and incurring startup costs and expenses. As a result, the Company incurred accumulated net losses from Inception (December 19, 2014) through the period ended December 31, 2022 of $15,926,742. Due to in Note 5,our negative cash flow, the Company has substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. In addition, the Company’s development activities since inception have been financially sustained through equity financing. Management plans to keep seeking funding through debt and equity financing which are intended to mitigate the conditions that have fixed settlement provisions and do not feature any characteristics permitting net cash settlement atraise substantial doubt about the option of the holders, are classified in stockholders’ equity.entity’s ability to continue as a going concern.

 

NOTE 34 – RELATED PARTY

 

DuringFor the period from inception (December 19, 2014) to Januarymonths ended December 31, 20152022 and 2021, the Company paid $9,000had expenses totaling $1,000 and $65,000 respectively, to a company owned by an officer and director for consulting fees,salaries, which is included in general and administrative expenses on the accompanying statement of operations. As of December 31, 2022, there was a total of convertible debt of $0.00 and accrued interest payable of $0.00 due to an officer and director, employees, and shareholders.


F-14



NOTE 5 – LEASES

The company leases warehouse facilities under an operating lease that expires in 2025.  Prior to February 4, 2022 the company was leasing a warehouse facility on a month-to-month lease.  The aggregate minimum future non-cancelable lease commitments at December 31, 2022 are as follows:

2023

$   68,042

2024

$   70,883

2025

$     5,926

Total

$ 144,851

Total rent expense for the months ended December 31, 2022 and 2021 was $63,745 and $55,440.

 

NOTE 4 - INCOME TAXES6 – NOTES PAYABLE

As of December 31, 2022, the Company had the following:

Unsecured debt with shareholders of the Company, no due date, 0% interest,

866

Unsecured debt, due 2/15/23, 10% interest, default interest at 16%.

75,370

Secured debt, due 10/7/23, 12.99% interest, default interest at 14.99%.

200,000

TOTAL

  $    276,236

As of December 31, 2022, the Company has an outstanding total of $2,713 in interest accrued for the above notes.

NOTE 7 – CONVERTIBLE DEBT

As of December 31, 2022, the Company had the following:

Unsecured convertible debt, due 01/19/17, 8% interest, default interest at 18%, converts at a 54% discount to market price based on the lowest trading prices in the last 20 days trading price

6,750

Unsecured convertible debt, due 08/05/23, 10% interest, converts at a market price of $0.05 per share. The proceeds from the sale of the Note were used to satisfy all but $17,000 of our obligations to Jay Decker pursuant to a previously issued promissory note to benefit from terms that our management believes are more favorable to the Company. 

110,535

Unsecured convertible debt, due 05/01/23, 12% interest, converts at a market price of $0.05 per share.

200,000

SUBTOTAL

317,285

Less: Discount

-

TOTAL

$317,285


F-15



Below represent the Black-Scholes Option Pricing Model calculations for the above convertible note payables:

Payee

Number of options valued

Value of Convertible Option

Unsecured Convertible debt #1

      456,410

      $    8,037

Unsecured Convertible debt #2

   2,210,691

      $  38,172

Unsecured Convertible debt #3

4,304,000

      $  55,802

As of December 31, 2022, the Company has an outstanding total of $18,674 in accrued interest for the above convertible note.

 

The reconciliationconvertible promissory notes #1 is in default but management has not been able to make contact with this party, due to them living out of income tax provision (benefit)the country. We have calculated the derivative liability as if it is in default (but the note’s default interest rate stays the same at 8%) and will still accrue appropriate interest until the U.S. statutory rate of 34% for the period from inception (December 19, 2014) to January 31, 2015 tonote is fully satisfied or converted into the Company’s effective tax rate is as follows:common stock.

Income tax benefit at statutory rate $(8,950)
Change in valuation allowance $8,950 
Income tax provision $                    -) 

-48-

The tax effects of temporary differences that give rise to the Company’s net deferred tax assets as of January 31, 2015 are as follows:

     
Net Operating Loss $8,950 
Valuation allowance $(8,950)
Net deferred tax asset $                   -) 

 

The Company has approximately $26,300 of net operating losses (“NOL”) carried forwarddetermined that the conversion feature embedded in the notes referred to offset taxable income, if any, in future yearsabove that contain a potential variable conversion amount constitutes a derivative which expire commencing in fiscal 2035. In assessinghas been bifurcated from the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all ofnote and recorded as a derivative liability, with a corresponding discount recorded to the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax asset relating to NOLs for every period because it is more likely than not that all of the deferred tax asset will not be realized.associated debt.

 

NOTE 58 – STOCKHOLDERS’ EQUITY

Authorized Stock

 

The Company has authorized 75,000,000 common shares with a par value of $0.001 per share. Each common share entitles the holder to one vote on any matter on which action of the stockholders of the corporation is sought. During February 2017, the Company increased the authorized number of shares to 500,000,000. Also, the Company increased the authorized preferred stock to 75,000,000 shares and designated 25,000,000 shares of preferred stock to Series A Convertible Preferred Stock. During January 2018, the Company increased its authorized number of common shares to 1,000,000,000. During April 2018, the Company increased its authorized number of common shares to 2,500,000,000. The Board of Directors, in the future, has the authority to increase the authorized capital up to 4,000,000,000 shares based on shareholder approval.

The Company effectuated a reverse stock split of 1-for-250 as of July 23, 2018.

On October 16, 2017, the Company filed an Amended and Restated Certificate of Designation of the Rights, Preferences, Privileges and Restrictions of the Series A Convertible Preferred Stock (the “Amended Certificate”) with the Secretary of State of the State of Nevada. The Amended Certificate reduces the number of preferred shares designated as Series A Preferred Stock from 25,000,000 shares to 1,333,334 shares. The Amended Certificate also changes the conversion and voting rights of the Series A Preferred Stock. The Series A Preferred Stock is now convertible into the number of shares of our common stock equal to 0.00006% of our outstanding common stock upon conversion. The voting rights of the Series A Preferred Stock are now equal to the number of shares of common stock into which the Series A Preferred Stock may convert.

As of December 31, 2022, there are no outstanding shares of preferred stock. All the preferred stock was converted in common stock on February 4, 2019.


F-16



 

Common Share Issuances

 

OnDuring the months ended December 19, 2014,31, 2022, the Company issued 7,588,538 shares of common stock while cancelling a total of 10,000,000800,267 shares of common stock.

There were no shares issued during the fourth quarter 2022.  During the third quarter 2022, the Company issued 340,000 shares of common stock for consulting fees along with issuing 340,621 shares of common stock to its three foundersconvert an outstanding note payable to a shareholder.  On May 19, 2022, the Company issued 4,400,000 shares of common stock for broker and consulting fees.  On April 22 and 25, 2022, the Company issued 2,000,000 shares of common stock for broker and funding fees.  On February 4, 2022, the Company issued 507,917 shares of common stock in a cash contributiondirect security purchase agreement.  On January 10, 2022, the Company cancelled 200,267 shares of $100.common stock.  Further, on March 4, 2022, the Company cancelled 600,000 shares of common stock.

During the fourth quarter 2021, the Company issued 3,500,000 shares of common stock for consulting fees. Additionally, the Company raised during the year over $900,000 in direct security purchase agreements which were converted into 15,403,983 shares of the Company’s common stock.  During the third quarter 2021, the Company issued 1,177,778 shares of common stock for advertising and broker fees. On March 18, 2021, the Company raised $340,000 note payable agreement which 1,200,000 shares of the Company’s common stock were issued to the note holder. Additionally, 2,000,000 shares of common stock were issued to a company helping secure the note. Furthermore, 715,000 shares of common stock were issued for marketing services while 1,000,000 shares of common stock were issued for advertising services. During January 2021 the company converted 4,500,000 of securities purchase agreement into common stock shares.

Warrant Issuances

During the year ending December 31, 2021, the Company issued 14,000,000 warrants to 25 parties at a per share price between $0.05 and $0.075.  On February 2, 2022, the Company issued 2,000,000 warrants to an individual.  As of December 31, 2022, there were 16,000,000 warrants outstanding, of which 16,000,000 warrants are fully vested.

Stock Issued for Services

 

On December 24, 2014March 18, 2021, the Company issued 1,006,666715,000 shares of common stock as the compensation for this agreement. Additionally on March 18, 2021, the Company issued 2,000,000 shares of common stock to four unaffiliated investorsa company helping secure the note. During the second and third quarters of 2021, the Company entered into several broker agreements to help raise capital for proceedsthe Company. 1,177,778 shares of $20,133.common stock were issued in the third quarter as broker fees. And additional 1,000,000 shares of common stock were issued in the second quarter as advertising fees.

On September 13, 2022, the Company issued 340,000 shares of common stock for consulting fees.  During the period ending June 30, 2022, the Company issued 6,400,000 shares of common stock for broker, consulting, and funding fees.


F-17



Share Conversion Agreements

All of the holders of the Company’s Series A Convertible Preferred Stock (the “Preferred Holders”) entered into a Preferred Stock Conversion Agreement. Pursuant to the Conversion Agreements, the Preferred Holders converted their shares of preferred stock into common stock, effective as of the Exchange. As a result, no shares of the Company’s Series A Convertible Preferred Stock are outstanding. An aggregate of 15,592,986 shares of common stock were issued to the Preferred Holders. The Preferred Holders agreed to convert each share of Series A Convertible Preferred Stock into eighteen (18) shares of common stock and agreed to retire a total of 467,057 shares of Series A Convertible Preferred Stock. The Company cancelled the retired shares.

Omnibus Stock Grant and Option Plan

On December 31, 2021, the Company approved stock option agreements in the amount of 7,500,000 shares with a strike price of $0.05 to twenty-one individuals.

On December 26, 2022, the Company canceled 12,150,000 stock options with a strike price of $0.05.  On the same date, the Company approved an equity incentive plan.  Under this plan the company approved a total of 15,975,000 of restricted stock units and 36,000,000 of restricted stock awards with a strike price of $0.00 to $0.01 to sixteen individuals.

Offering Circular

During the first part of the 2021, the Company filed a Regulation A Offering Circular with the U.S. Securities and Exchange Commission. The Offering Circular was qualified during August 2021.

NOTE 9 – BUSINESS SEGMENT INFORMATION

As of December 31, 2022, the Company operated in two reportable segments (Corporate and Health Supplements) supported by a corporate group which conducts activities that are non-segment specific. The following table presents selected financial information about the Company’s reportable segments for the year ended December 31, 2022.

 

CONSOLIDATED

HEALTH SUPPLEMENTS

CORPORATE

BergaMet

UBN

Revenue

2,251,469

2,251,472

(3)   

-   

Cost of Revenue

783,141

783,141

-   

-   

Long-lived Assets

732,030

193,260

538,771

 -    

Gain (Loss) Before Income Tax

(983,121)

(164,625)

(358)

(818,138)

Identifiable Assets

1,819,128

1,819,128

-   

-   

Depreciation and Amortization

878

878

-   

-


F-18



As of December 31, 2021, the Company operated in two reportable segments (Corporate and Health Supplements) supported by a corporate group which conducts activities that are non-segment specific. The following table presents selected financial information about the Company’s reportable segments for the year ended December 31, 2021.

 

CONSOLIDATED

HEALTH SUPPLEMENTS

CORPORATE

BergaMet

UBN

Revenue

1,676,598

1,676,598

-   

-   

Less Selling Fees

(210,816)

(210,816)

 

 

Cost of Revenue

770,704

770,704

-   

-   

Long-lived Assets

715,140

212,413

502,727

 -    

Gain (Loss) Before Income Tax

(1,975,971)

(701,833)

(136,308)

(1,137,830)

Identifiable Assets

2,092,341

2,092,341

-   

-   

Depreciation and Amortization

5,100

5,100

-   

-

Currently, all of our customers are located in the United States of American and Canada.  Our revenues to our customers are not material to our overall total sales.  Our largest customers, Natural Grocers and Emerson Ecologics, LLC, account for less than 1% of our total sales in the years ending 2022 and 2021.  

NOTE 10 – SUBSEQUENT EVENTS

COVID-19

On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. The Company is monitoring this closely, and although operations have not been materially affected by the coronavirus outbreak to date, the ultimate severity of the outbreak is uncertain. Further the uncertain nature of its spread globally may impact our business operations resulting from quarantines of employees, customers, and third-party service providers. At this time, the Company is unable to estimate the impact of this event on its operations.

 

On January 30, 201513, 2023 the Company issued 3,290,000 unitsentered into definitive agreement to unaffiliated investorsacquire nutraceutical manufacturer, Hyperion, and its digital marketing affiliate, Online Publishing and Marketing.  The total purchase price for the acquisitions will be $1,750,000 in cash, $1,300,000 in the form of secured promissory notes, and $1,250,000 worth of our common stock.

On January 24, 2023, we entered into a private placementSecurities Purchase Agreement for proceedsthe sale of $329,000. Each unit consistsconvertible notes in the aggregate principal amount of one share$388,888, and warrants to acquire 7,421,544 shares of our common stock and one common stock purchase warrant. Each common stock purchase warrant entitles the holder to purchase one share of common stock for each warrant at an exercise price of $0.50$0.04716 per share, to two investors. The Notes contained an original issue discount of 10%, and expirethus the proceeds to us were $350,000. The Notes do not bear interest unless we are in default, have a maturity date of October 24, 2023, and all amounts are payable on the maturity date. The Notes are convertible into our common stock at the election of the holder at means ninety percent (90%) of the lowest VWAP of our common stock for the five (5) consecutive Trading Days immediately preceding the date of the issuance of a Conversion Election.

The Company evaluated its December 31, 2016.2022 financial statements for subsequent events through March 7, 2023, the date the financial statements were available to be issued.


F-19



Report of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of Hyperion LLC

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Hyperion LLC as of December 31, 2022 and 2021, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of Januaryour audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/S/ BF Borgers CPA PC

BF Borgers CPA PC (PCAOB ID 5041)

We have served as the Company's auditor since 2022

Lakewood, CO

April 11, 2023


F-20



HYPERION LLC

BALANCE SHEETS

(Audited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DECEMBER 31,

 

DECEMBER 31,

 

 

 

 

 

 

 

2022

 

2021

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

  Cash

 

 

 

 

$1,686,245 

 

$1,659,500 

  Accounts receivable

 

 

 

 

14,501 

 

17,522 

  Inventory

 

 

 

 

552,801 

 

550,437 

  Prepaid expenses

 

 

 

 

91,282 

 

139,039 

  Note receivable - Due from related party

 

 

14,068 

 

65,595 

 

Total current assets

 

 

 

2,358,897 

 

2,432,093 

 

 

 

 

 

 

 

 

 

 

  Fixed assets, net of accumulated depreciation of $33,656 and $60,735, respectively

 

54,523 

 

56,832 

  Goodwill

 

 

 

 

- 

 

- 

 

Total other assets

 

 

 

 

54,523 

 

56,832 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

 

 

 

$2,413,420 

 

$2,488,925 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

Accounts payable

 

 

 

 

$219,900 

 

$354,145 

Accrued liabilities

 

 

 

 

36,374 

 

48,076 

 

Total current and total liabilities

 

 

256,274 

 

402,221 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

  Accumulated deficit

 

 

 

 

2,157,146 

 

2,086,704 

 

Total stockholders' equity (deficit)

 

 

2,157,146 

 

2,086,704 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

$2,413,420 

 

$2,488,925 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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


F-21



HYPERION LLC

STATEMENT OF OPERATIONS

FOR THE YEAR ENDING DECEMBER 31,

(Audited)

 

 

 

 

 

 

 

 

 

FOR THE YEAR ENDING

 

 

 

 

DECEMBER 31,

 

 

 

 

2022

 

2021

 

 

 

 

 

 

 

REVENUE

 

 

 

 

 

   Gross revenue

 

 

$                    11,515,868

 

$                    11,402,269

   Less returns

 

 

                      (1,233,715)

 

                      (1,184,114)

 

Net revenue

 

 

                      10,282,153

 

                      10,218,155

 

 

 

 

 

 

 

COST OF REVENUE

 

 

 

 

 

   Cost of goods sold

 

 

                        3,937,084

 

                        7,587,776

 

Total cost of revenue

 

 

                        3,937,084

 

                        7,587,776

 

 

 

 

 

 

 

GROSS PROFIT

 

 

                        6,345,069

 

                        2,630,379

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

   General and administrative

 

 

                        5,850,762

 

                        1,910,356

 

Total operating expenses

 

 

                        5,850,762

 

                        1,910,356

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

   Interest expense, net of interest income

 

 

                               2,135

 

                                  235

   Miscellaneous Income

 

 

                                     -   

 

                               2,500

   Loss on extinguishment of debt

 

 

                                     -   

 

                                     -   

   SBA loan forgiveness

 

 

                                     -   

 

                                     -   

   Gain on sale of asset

 

 

                             22,000

 

                               7,000

 

 

 

 

 

 

 

 

Total other income (expense)

 

 

                             24,135

 

                               9,735

 

 

 

 

 

 

 

Net gain/(loss) before income tax provision

 

 

                           518,442

 

                           729,758

 

 

 

 

 

 

 

NET GAIN/(LOSS)

 

 

$                         518,442

 

$                         729,758

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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


F-22



HYPERION LLC

CONSOLIDATED STATEMENT OF CASH FLOWS

(Audited)

 

 

 

 

 

 

 

FOR THE

 

 

YEAR ENDING

 

 

DECEMBER 31,

 

 

2022

 

2021

Cash Flows from Operating Activities:

 

 

 

 

Net Gain/(Loss)

 

$518,442  

 

$729,758  

 

 

 

 

 

Adjustments to reconcile net loss to net cash

 

 

 

 

used in operating activities:

 

 

 

 

Depreciation and amortization

 

2,309  

 

32,253  

Gain on sale of asset

 

(22,000) 

 

(7,000) 

Impairment of goodwill

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

3,021  

 

(16,149) 

Inventory

 

(2,364) 

 

(83,596) 

Prepaid expenses

 

47,757  

 

(106,425) 

Accrued interest receivable

 

 

 

 

Deposits

 

 

 

 

Accounts payable

 

(134,245) 

 

72,060  

Accounts payable - related party

 

 

 

 

Accrued liabilities

 

(11,702) 

 

1,305  

Accrued interest payable

 

 

 

 

Accrued interest payable - related party

 

 

 

 

Net Cash used in Operating Activities

 

401,218  

 

622,206  

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

 

Purchase of fixed assets

 

22,000  

 

(22,388) 

Cash received from sale of asset

 

 

 

 

Purchase of note receivable

 

 

 

 

Trademarks

 

 

 

 

Payments of note receivable

 

51,527  

 

34,405  

Cash flows provided by (used in) Investing Activities:

 

73,527  

 

12,017  

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

 

 

Proceeds from issuance of convertible debt,

 

 

 

 

Payments for repayment of long-term debt

 

 

 

 

Proceeds from issuance of noted payable

 

 

 

 

Proceeds from issuance of noted payable - related party

 

 

 

 

Payments for repayment of notes payable - related party

 

 

 

 

Distribution payments

 

(448,000) 

 

(812,000) 

Net Cash provided by Financing Activities

 

(448,000) 

 

(812,000) 

 

 

 

 

 

Increase (decrease) in cash

 

26,745  

 

(177,777) 

Cash at beginning of period

 

1,659,500  

 

1,837,277  

Cash  at end of period

 

$1,686,245  

 

$1,659,500  

 

 

 

 

 

 

 

 

 

 

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


F-23



HYPERION, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 20152022 and 2021

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Hyperion, LLC (the “Company”) was incorporated in the State of Virginia on June 6, 2003 as Hyperion LLC. The owner originally incorporated the business for other purposes but didn’t begin functioning as the current nutritional supplement business until 2012. The Company, in 2014 created the doing business as (DBA) Green Valley Natural Solutions, is an LLC partnership that develops its own line of nutritional supplements and uses contract manufacturers to produce the finished products which are then sold and shipped direct to individual retail customers. Customers purchase the products either through email marketing, from the Company webstore or through direct mail advertising mailed to customers through the postal service.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying audited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements.  Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying audited financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of December 31, 2022 and the results of operations and cash flows for the periods presented. The results of operations for the year ending December 31, 2022 and 2021 are not necessarily indicative of the operating results for the full fiscal year or any future period.

Use of Estimates

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

Cash

Cash includes cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.

Accounts Receivables

Accounts receivables are recorded at the invoice amount and do not bear interest.

Inventory

Inventories consist of health supplements held for sale in the ordinary course of business. The Company uses the weighted average cost method to value its inventories at the lower of cost and net realizable value. The components of inventory cost include raw materials, labor, and overhead.  Net realizable value is determined using various assumptions with regard to excess or slow-moving inventories, expiration dates,


F-24



current and future product demand, production planning, and market conditions.  A change in any of these variables could result in an adjustment to inventory.

An allowance has not been created due to most of the Company’s inventory gets sold prior to any expiration date.

 

 

DECEMBER 31,

 

 

DECEMBER 31,

 

 

2022

 

 

2021

Inventory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventory Classes:

 

 

 

 

 

 

 

 Raw Materials

 

$

0

 

 

$

0

 Finished Goods

 

 

552,801

 

 

 

550,437

 Work in process

 

 

0

 

 

 

0

Total inventory

 

 

552,801

 

 

 

550,437

Property and Equipment

The Company’s property and equipment are recorded at cost and depreciated using the straight-line and accelerated methods over the useful lives of the assets, generally from five to seven years. Upon sale or disposal of property and equipment, the related asset cost and accumulated depreciation or amortization are removed from the respective accounts and any gain or loss is reflected in current operations.

Revenue Recognition

The Company applies Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) topic 606, Revenue from Contracts with Customers (ASC 606).  ASC 606 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes all of the existing revenue recognition guidance.  This standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  ASC 606 requires us to identify distinct performance obligations.  A performance obligation is a promise in a contract to transfer a distinct good or service to the customer.  When distinct performance obligations exist, the Company allocates the contract transaction price to each distinct performance obligation.  The standalone selling price is used to allocate the transaction price to the separate performance obligations.  The Company recognizes revenue when, or as, the performance obligation is satisfied.

Generally, revenues are recognized at the time of shipment to the customer with the price being fixed and determinable and collectability assured, provided title and risk of loss is transferred to the customer.  Most of our shipping and handling costs are built into the transaction price, but if the customer asks for express shipping, the costs charged to customers are classified as sales, and the shipping and handling costs incurred are included in cost of sales.

The Company recognizes revenue from our main source – e-commerce or from our call center.  Here is a list of all the sales channels which include the Company’s website channel,,our email marketing efforts, or direct mail..  The Company sells plant-based nutraceuticals to our end using customers.

The Company evaluates the criteria outlined in ASC 606-10-55, Principal versus Agent Considerations, currently we are the principal and have not engaged an agent at this time.  Currently, we have not recognized any revenues under the agent considerations.

Revenue is recognized when, or as, control of a promised merchandise or service is shipped to the customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring title of those products or services and are recorded net of and discounts or allowances.  Shipping costs paid by the customer are included in revenue or may be charge on top of the merchandise price.  Merchandise sales are fulfilled with inventory held in our warehouse in Lexington, VA. Therefore, the Company’s contracts have a single performance obligation (shipment of product).


F-25



If the Company receives a request for refund on a customer obligation, the Company will refund the full cost of the obligation due to our money back guarantee, less shipping costs.  

Revenue recognition is evaluated through the following five-step process:

1.identification of the contract with a customer; 

2.identification off the performance obligations in the contract; 

3.determination of the transaction price; 

4.allocation of the transaction price to the performance obligations in the contract; and 

5.recognition of revenue when or as a performance obligation is satisfied. 

These steps are met when an order is received, a price agreed and the product shipped or delivered to that customer.

Concentration

There is no concentration of revenue for the year ended December 31, 2022 and 2021 because the revenue was earned from multiple customers.  In 2022 and 2021, 97% of our orders were placed in the United States of America, 3% from Canada, and less than 1% the rest of the world.

Income Taxes

The Company is registered as a limited liability company in Virginia and is not subject to income taxes but instead are treated as a pass-through entity for federal income taxes.  The Company approved the ongoing payment of quarterly distributions to stockholders.  Distributions are paid primarily to satisfy the income tax liabilities of the stockholders.  For the period ending December 31, 2022 and 2021, the Company paid a total of $448,000 and $812,000, respectively, in distributions were declared for payment to stockholders.

Recent Accounting Pronouncements

In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation”. The update removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. In addition, the update adds an example disclosure in Risks and Uncertainties (Topic 275) to illustrate one way that an entity that has not begun planned principal operations could provide information about the risks and uncertainties related to the company’s current activities. Furthermore, the update removes an exception provided to development stage entities in Consolidations (Topic 810) for determining whether an entity is a variable interest entity-which may change the consolidation analysis, consolidation decision, and disclosure requirements for a company that has an interest in a company in the development stage. The update is effective for the annual reporting periods beginning after December 15, 2014, including interim periods therein. Early application with the first annual reporting period or interim period for which the entity’s financial statements have not yet been issued (Public business entities) or made available for issuance (other entities). The Company adopted this pronouncement for the year ended December 31, 2014.

In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-12, “Compensation – Stock Compensation ( Topic 718 ); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or


F-26



modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition. We are currently reviewing the provisions of this ASU to determine if there were 3,290,000 warrants outstanding.will be any impact on our results of operations, cash flows or financial condition.

In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.

NOTE 3 – ACCOUNTS RECEIVABLE

For the year ended December 31, 2022 and 2021, the Company had a balance of $14,501 and $17,522.

NOTE 4 – INVENTORY

For the year ended December 31, 2022 and 2021, the Company had a balance of $558,801 and $550,437. All of our inventory is accounted for as finished goods.

NOTE 5 – PREPAID EXPENSES

For the year ended December 31, 2022 and 2021, the Company had a balance of $91,282 and $139,039. These expenses are made up of pre-paid postage, independent contractors’ retainers, pre-paid advertising, and pre-paid insurance.

 

NOTE 6 – RELATED PARTY

For the year ended December 31, 2022 and 2021, the Company had a note receivable due from a related party.  The note was non-interest bearing.  As of the year ended December 31, 2022 and 2021, the Company had a balance of $14,068 and $65,595.

NOTE 7 – PROPERTY AND EQUIPMENT

Depreciation expense for the years ended December 31, 2022 and 2021, was $2,309 and $32,253.


F-27



NOTE 8 – LEASES

The company leases office space and warehouse facilities under an operating lease that expired in 2021. We are continuing to lease the facilities on a month-to-month obligation.

Total rent expenses for the months ended December 31, 2022 and 2021 was $34,530 and $34,530.

NOTE 9 – ACCOUNTS PAYABLE & ACCRUED LIABILITIES

Accounts payables consists of all overhead and inventory purchases which are due Net 30.  As of the year ended December 31, 2022 and 2021, the Company had a balance of $256,274 and $402,221.

NOTE 9 – SUBSEQUENT EVENTS

 

Management hasCOVID-19

On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. The Company is monitoring this closely, and although operations have not been materially affected by the coronavirus outbreak to date, the ultimate severity of the outbreak is uncertain. Further the uncertain nature of its spread globally may impact our business operations resulting from quarantines of employees, customers, and third-party service providers. At this time, the Company is unable to estimate the impact of this event on its operations.

On January 13, 2023 the Company entered into definitive agreement to sell Hyperion and its digital marketing affiliate, Online Publishing and Marketing.  The total purchase price for the acquisitions will be $1,750,000 in cash, $1,300,000 in the form of secured promissory notes, and $1,250,000 worth of our common stock.

The Company evaluated its December 31, 2022 financial statements for subsequent events through February 10, 2015,January 24, 2023, the date thesethe financial statementstatements were available to be issued.


F-28



Report of Independent Registered Public Accounting Firm

 

On February 9, 2015To the shareholders and the board of directors of Online Publishing & Marketing LLC

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Online Publishing & Marketing LLC as of December 31, 2022 and 2021, the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company issued 10,000 unitsas of December 31, 2022 and 2021, and the results of its operations and its cash flows for proceeds of $1,000 to an unaffiliated investorthe years then ended, in conformity with accounting principles generally accepted in the private placement referredUnited States.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in note 5.accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/S/ BF Borgers CPA PC

BF Borgers CPA PC (PCAOB ID 5041)

We have served as the Company's auditor since 2022

Lakewood, CO

April 11, 2023


F-29



ONLINE PUBLISHING & MARKETING LLC

BALANCE SHEETS

(Audited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DECEMBER 31,

 

DECEMBER 31,

 

 

 

 

2022

 

2021

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

  Cash

 

 

$111,095 

 

$577,986 

  Accounts receivable

 

 

40,059 

 

47,671 

  Inventory

 

 

217,379 

 

178,818 

  Prepaid expenses

 

 

1,125 

 

59,509 

  Note receivable - Due from related party

 

 

- 

 

- 

 

Total current assets

 

 

369,658 

 

863,984 

 

 

 

 

 

 

 

  Fixed assets, net of accumulated depreciation of $35,342 and $35,286, respectively

11,224 

 

11,224 

  Other assets

 

 

166,261 

 

- 

  Goodwill

 

 

56,077 

 

91,190 

 

Total other assets

 

 

233,562 

 

102,414 

 

 

 

 

 

 

 

TOTAL ASSETS

 

 

$603,220 

 

$966,398 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

Accounts payable

 

 

$108,069 

 

$23,248 

Accrued liabilities

 

 

180 

 

153 

Notes payable - Due from related party

 

 

14,068 

 

65,595 

 

Total current and total liabilities

 

 

122,317 

 

88,996 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

  Accumulated deficit

 

 

480,903 

 

877,402 

 

Total stockholders' equity (deficit)

 

 

480,903 

 

877,402 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

$603,220 

 

$966,398 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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


F-30



ONLINE PUBLISHING & MARKETING LLC

STATEMENT OF OPERATIONS

FOR THE YEAR ENDING DECEMBER 31,

(Audited)

 

 

 

 

 

 

 

 

 

FOR THE YEAR ENDING

 

 

 

 

DECEMBER 31,

 

 

 

 

2022

 

2021

 

 

 

 

 

 

 

REVENUE

 

 

 

 

 

   Gross revenue

 

 

$528,381  

 

$1,174,094  

   Less selling fees

 

 

(3,254) 

 

(20,935) 

 

Net revenue

 

 

525,127  

 

1,153,159  

 

 

 

 

 

 

 

COST OF REVENUE

 

 

 

 

 

   Cost of goods sold

 

 

249,219  

 

37,222  

 

Total cost of revenue

 

 

249,219  

 

37,222  

 

 

 

 

 

 

 

GROSS PROFIT

 

 

275,908  

 

1,115,937  

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

   General and administrative

 

 

672,407  

 

1,186,717  

 

Total operating expenses

 

 

672,407  

 

1,186,717  

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

   Interest expense, net of interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Net gain/(loss) before income tax provision

 

 

(396,499) 

 

(70,780) 

 

 

 

 

 

 

 

NET GAIN/(LOSS)

 

 

$(396,499) 

 

$(70,780) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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


F-31



ONLINE PUBLISHING & MARKETING LLC

CONSOLIDATED STATEMENT OF CASH FLOWS

(Audited)

 

 

 

 

 

 

 

 

 

 

 

 

FOR THE YEAR

 

 

ENDING

 

 

DECEMBER 31,

 

 

2022

 

2021

Cash Flows from Operating Activities:

 

 

 

 

Net Gain/(Loss)

 

$(396,499) 

 

$(70,780) 

 

 

 

 

 

Adjustments to reconcile net loss to net cash

 

 

 

 

used in operating activities:

 

 

 

 

Depreciation and amortization

 

26,335  

 

35,189  

Gain on sale of asset

 

 

 

 

Impairment of goodwill

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

7,612  

 

2,301  

Inventory

 

(38,561) 

 

31,429  

Prepaid expenses

 

58,384  

 

(57,634) 

Accrued interest receivable

 

 

 

 

Deposits

 

 

 

 

Accounts payable

 

84,821  

 

(35,557) 

Accounts payable - related party

 

 

 

 

Accrued liabilities

 

27  

 

(70) 

Accrued interest payable

 

 

 

 

Accrued interest payable - related party

 

 

 

 

Net Cash used in Operating Activities

 

(257,881) 

 

(95,122) 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

 

Purchase of fixed assets

 

8,778  

 

(1) 

Cash received from sale of asset

 

 

 

 

Purchase of note receivable

 

 

 

 

Other assets

 

(166,261) 

 

 

Payments of note receivable

 

 

 

 

Cash flows provided by (used in) Investing Activities:

 

(157,483) 

 

(1) 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

 

 

Proceeds from issuance of convertible debt,

 

 

 

 

Payments for repayment of convertible debt

 

 

 

 

Proceeds from issuance of noted payable

 

 

 

 

Proceeds from issuance of noted payable - related party

 

 

 

(34,405) 

Payments for repayment of notes payable - related party

 

(51,527) 

 

 

Distribution payments

 

 

 

 

Net Cash provided by Financing Activities

 

(51,527) 

 

(34,405) 

 

 

 

 

 

Increase (decrease) in cash

 

(466,891) 

 

(129,528) 

Cash at beginning of period

 

577,986  

 

707,514  

Cash  at end of period

 

$111,095  

 

$577,986  

 

 

 

 

 

 

 

 

 

 

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


F-32



ONLINE PUBLISHING & MARKING, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022 and 2021

 

 

-49-

(table of contents)

PART II

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Online Publishing & Marketing, LLC (the “Company”) was incorporated in the State of Virginia in 2005 as Online Publishing & Marketing, LLC. The Company is a book/video publishing business specializing in alternative health subjects involving cancer treatments, Alzheimer’s and general health. Sales mainly involve the sale of books on Amazon and several video series dealing with the prevention and treatment of dementia sold online through periodical video launch events.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying audited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements.  Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying audited financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of December 31, 2022 and the results of operations and cash flows for the periods presented. The results of operations for the year ending December 31, 2022 and 2021 are not necessarily indicative of the operating results for the full fiscal year or any future period.

Use of Estimates

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

Cash

Cash includes cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.

Accounts Receivables

Accounts receivables are recorded at the invoice amount and do not bear interest.

Inventory

Inventories consist of alternative health educational materials held for sale in the ordinary course of business. The Company uses the weighted average cost method to value its inventories at the lower of cost and net realizable value. The components of inventory cost include raw materials, labor, and overhead.  Net realizable value is determined using various assumptions with regard to excess or slow-moving inventories, expiration dates, current and future product demand, production planning, and market conditions.  A change in any of these variables could result in an adjustment to inventory.

An allowance has not been created due to most of the Company’s inventory gets sold prior to any expiration date.


F-33



 

 

DECEMBER 31,

 

 

DECEMBER 31,

 

 

2022

 

 

2021

Inventory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventory Classes:

 

 

 

 

 

 

 

 Raw Materials

 

$

0

 

 

$

0

 Finished Goods

 

 

217,379

 

 

 

178,818

 Work in process

 

 

0

 

 

 

0

Total inventory

 

 

217,379

 

 

 

178,818

Property and Equipment

The Company’s property and equipment are recorded at cost and depreciated using the straight-line and accelerated methods over the useful lives of the assets, generally from five to seven years. Upon sale or disposal of property and equipment, the related asset cost and accumulated depreciation or amortization are removed from the respective accounts and any gain or loss is reflected in current operations.

Revenue Recognition

The Company applies Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) topic 606, Revenue from Contracts with Customers (ASC 606).  ASC 606 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes all of the existing revenue recognition guidance.  This standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  ASC 606 requires us to identify distinct performance obligations.  A performance obligation is a promise in a contract to transfer a distinct good or service to the customer.  When distinct performance obligations exist, the Company allocates the contract transaction price to each distinct performance obligation.  The standalone selling price is used to allocate the transaction price to the separate performance obligations.  The Company recognizes revenue when, or as, the performance obligation is satisfied.

Generally, revenues are recognized at the time of shipment to the customer with the price being fixed and determinable and collectability assured, provided title and risk of loss is transferred to the customer.  Most of our shipping and handling costs are built into the transaction price, but if the customer asks for express shipping, the costs charged to customers are classified as sales, and the shipping and handling costs incurred are included in cost of sales.

The Company recognizes revenue from our main source – e-commerce.  Here is a list of all the sales channels which include email marketing efforts or Amazon..  The Company sell alternative health educational materials to our end using customers.

The Company evaluates the criteria outlined in ASC 606-10-55, Principal versus Agent Considerations, currently we are the principal and have not engaged an agent at this time.  Currently, we have not recognized any revenues under the agent considerations.

Revenue is recognized when, or as, control of a promised merchandise or service is shipped to the customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring title of those products or services and are recorded net of and discounts or allowances.  Shipping costs paid by the customer are included in revenue or may be charge on top of the merchandise price. Merchandise sales are fulfilled with inventory held in our warehouse in Lexington, VA. Therefore, the Company’s contracts have a single performance obligation (shipment of product).

If the Company receives a request for refund on a customer obligation, the Company will refund the full cost of the obligation due to our money back guarantee, less shipping costs.  


F-34



Revenue recognition is evaluated through the following five-step process:

1.identification of the contract with a customer; 

2.identification off the performance obligations in the contract; 

3.determination of the transaction price; 

4.allocation of the transaction price to the performance obligations in the contract; and 

5.recognition of revenue when or as a performance obligation is satisfied. 

These steps are met when an order is received, a price agreed and the product shipped or delivered to that customer.

Concentration

There is no concentration of revenue for the year ended December 31, 2022 and 2021 because the revenue was earned from multiple customers.  In 2022, 78% of our orders were placed in the United States of America, 8% from Canada, 4% from Australia, and 10% from other nations.  In 2021, 92 % of our orders were placed in the United States of America, 3% from Canada, and 5% from the rest of the world.  

Income Taxes

The Company is registered as a limited liability company in Virginia and is not subject to income taxes but instead are treated as a pass-through entity for federal income taxes.  The Company approved the ongoing payment of quarterly distributions to stockholders, as needed.  Distributions are paid primarily to satisfy the income tax liabilities of the stockholders.  For the period ending December 31, 2022 and 2021, the Company did not pay out any distributions as payment to stockholders.

Recent Accounting Pronouncements

In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation”. The update removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. In addition, the update adds an example disclosure in Risks and Uncertainties (Topic 275) to illustrate one way that an entity that has not begun planned principal operations could provide information about the risks and uncertainties related to the company’s current activities. Furthermore, the update removes an exception provided to development stage entities in Consolidations (Topic 810) for determining whether an entity is a variable interest entity-which may change the consolidation analysis, consolidation decision, and disclosure requirements for a company that has an interest in a company in the development stage. The update is effective for the annual reporting periods beginning after December 15, 2014, including interim periods therein. Early application with the first annual reporting period or interim period for which the entity’s financial statements have not yet been issued (Public business entities) or made available for issuance (other entities). The Company adopted this pronouncement for the year ended December 31, 2014.

In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-12, “Compensation – Stock Compensation ( Topic 718 ); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update


F-35



as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.

NOTE 3 – ACCOUNTS RECEIVABLE

For the year ended December 31, 2022 and 2021, the Company had a balance of $40,059 and $47,671.

NOTE 4 – INVENTORY

For the year ended December 31, 2022 and 2021, the Company had a balance of $217,379 and $178,818.  All inventory is accounted for as finished goods.

NOTE 5 – PREPAID EXPENSES

For the year ended December 31, 2022 and 2021, the Company had a balance of $1,125 and $59,509. These expenses are made up of pre-paid postage, independent contractor retainers, pre-paid advertising, and pre-paid insurance.

NOTE 6 – PROPERTY AND EQUIPMENT

Depreciation expense for the year ended December 31, 2022 and 2021, was $0 and $57.

NOTE 7 – INTANGIBLES

The Company’s goodwill originated from the organizational expense costs from June 1, 2006 of $675,890, amortized over 15 years.  This was fully amortized at December 31, 2020.  Additionally, goodwill was created after an owner of the Company passed away and a stepped-up basis was created for his heirs.  The value of the goodwill created on December 12, 2009 was $526,697, amortized over 15 years.  Amortization expense for the year ended December 31, 2022 and 2021, was $35,113 and $35,132.

NOTE 8 – RELATED PARTY

For the year ended December 31, 2022 and 2021, the Company had a note payable due to a related party.  The note was non-interest bearing.  As of the year ended December 31, 2022 and 2021, the Company had a balance of $14,068 and $65,595.


F-36



NOTE 9 – LEASES

The company leases office space and warehouse facilities under an operating lease that expired in 2021.  We are continuing to lease the facilities on a month-to-month obligation.

Total rent expenses for the months ended December 31, 2022 and 2021 was $25,530 and $25,530.

NOTE 10 – OTHER CURRENT LIABILITIES

Accounts payables consists of all overhead and inventory purchases which are due Net 30.  As of the year ended December 31, 2022 and 2021, the Company had a balance of $108,249 and $23,401.

NOTE 11 – SUBSEQUENT EVENTS

COVID-19

On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. The Company is monitoring this closely, and although operations have not been materially affected by the coronavirus outbreak to date, the ultimate severity of the outbreak is uncertain. Further the uncertain nature of its spread globally may impact our business operations resulting from quarantines of employees, customers, and third-party service providers. At this time, the Company is unable to estimate the impact of this event on its operations.

On January 13, 2023 the Company entered into definitive agreement to sell Online Publishing and Marketing and its nutraceutical manufacturer affiliate, Hyperion.  The total purchase price for the acquisitions will be $1,750,000 in cash, $1,300,000 in the form of secured promissory notes, and $1,250,000 worth of our common stock.

The Company evaluated its December 31, 2022 financial statements for subsequent events through January 24, 2023, the date the financial statements were available to be issued.


F-37



Audited Pro Forma Condensed Combined Financial Statements

Pursuant to a Reorganization and Acquisition Agreement (“Exchange Agreement”) dated January 13, 2023, Health Extracts, Incorporated (“HYEX”) has come into an agreement to acquire 100% ownership interest in Hyperion, LLC (“HYP”), a Virginia limited liability company and Online Publishing and Marketing, LLC (“OPM”), a Virginia limited liability company, in exchange for $3,050,000 in cash and the issuance of $1,250,000 in shares of Health Extracts’ common stock (approximately 25,000,000 shares valued at $0.05), to the former owner of HYP and OPM, resulting in HYP and OPM becoming a wholly-owned subsidiary of the Company.  Once the funding for the acquisition has been obtained, the Company will move forward with the agreed upon purchase.

For financial accounting purposes, the acquisition of HYP and OPM by HYEX (referred to as the “Merger”) was valued under the purchase price method. Accordingly, financial statements presented following the Merger will be viewed as being fairly valued as of December 31, 2022, and represent the operations of HYEX prior to the Merger. The Company’s will continue to operating under the names Green Valley Natural Solutions and Online Publishing and Marketing, LLC.

Prior to the Merger, all the companies involved had fiscal year ends of December 31, respectively. The accompanying audited pro forma condensed combined financial statements were prepared based on a December 31 year end, while the period ending of December 31, 2022 has been prepared as uaudited pro forma condensed combined financial statements. The audited pro forma condensed combined balance sheet as of December 31, 2022, December 31, 2021, and December 31, 2020 combines the historical consolidated balance sheets of HYP, OPM and HYEX, giving effect to the Merger as if it had been consummated on December 31, 2022. The audited pro forma condensed combined statement of operations for the period ended December 31, 2022 combines the historical consolidated statements of income of HYP, OMP, and HYEX, giving effect to the Merger as if it had occurred on January 1, 2022. The audited pro forma combined financial data should be read in connection with the notes to these audited pro forma condensed combined financial statements and the following:

·The Company’s separate historical audited consolidated financial statements and the related notes year ended December 31, 2021 and 2020; 

·The Company’s separate historical audited consolidated financial statements and the related notes for the period ended December 31, 2022; 

·HYEX’s separate historical audited consolidated financial statements and related notes as of and for the year ended December 31, 2021. 

The audited pro forma condensed combined financial statements have been prepared for informational purposes only. The historical financial information has been adjusted to give effect to pro forma events that are: (1) directly attributable to the Merger and (2) factually supportable and reasonable under the circumstances.

The audited pro forma adjustments represent management’s estimates based on information available at this time. The audited pro forma combined financial statements are not necessarily indicative of what the financial position or results of operations actually would have been had the acquisition been completed at the dates indicated. In addition, the audited pro forma combined financial statements do not purport to project the future financial position or operating results of the consolidated company. The audited pro forma combined financial statements do not give consideration to the impact of possible revenue enhancements, expense efficiencies, future underwriting decisions or changes in the book of business that may result from the acquisition. 


F-38



PRO FORMA CONDENSED

 

COMBINED BALANCE SHEETS

 

(Audited)

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HISTORICAL

 

PRO FORMA

 

 

 

 

 

HYEX

 

HYPERION

 

OP&M

 

ADJUST-MENTS

 

COMBINED

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

  Cash

 

 

$ 65,651 

 

 $ 1,686,245

 

 $ 111,095

 

$ 2,250,000 

 

$ 4,112,991 

(a), (b)

  Accounts receivable

 

 

 105,794 

 

  14,501

 

  40,059

 

 - 

 

 160,354 

 

  Inventory

 

 

 1,819,128 

 

  552,801

 

  217,379

 

 - 

 

 2,589,308 

 

  Prepaid expenses

 

 

 16,890 

 

  91,282

 

  1,125

 

 - 

 

 109,297 

 

  Note receivable

 

 

 - 

 

  14,068

 

  -

 

 - 

 

 14,068 

 

  Accrued interest receivable

 

 

 - 

 

  -

 

  -

 

 - 

 

 - 

 

 

Total current assets

 

 

 2,007,462 

 

  2,358,897

 

  369,658

 

 2,250,000 

 

 6,986,017 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Property and equipment, net

 

 

 5,501 

 

  54,523

 

  11,224

 

 - 

 

 71,248 

 

  Patents/Trademarks

 

 

 521,881 

 

  -

 

  -

 

 - 

 

 521,881 

 

  Prepaid Acquisition Costs

 

 

 53,015 

 

  -

 

  -

 

 - 

 

 53,015 

 

  Other assets

 

 

 - 

 

  -

 

  166,261

 

 - 

 

 166,261 

 

  Goodwill, net

 

 

 193,260 

 

  -

 

  56,077

 

 1,661,951 

 

 1,911,288 

(a)

 

Total other assets

 

 

 773,656 

 

  54,523

 

  233,562

 

 1,661,951 

 

 2,723,692 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

 

$ 2,781,118 

 

 $ 2,413,420

 

 $ 603,220

 

$ 3,911,951 

 

$ 9,709,709 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

$ 91,316 

 

 $ 219,900

 

 $ 108,069

 

$ - 

 

$ 419,285 

 

Accrued liabilities

 

 

 94,554 

 

  36,374

 

  180

 

 - 

 

 131,108 

 

Notes payable

 

 

 275,370 

 

  -

 

  -

 

 - 

 

 275,370 

 

Notes payable - related party

 

 

 866 

 

  -

 

  14,068

 

 1,300,000 

 

 1,314,934 

(a)

Convertible debt

 

 

 317,284 

 

  -

 

  -

 

 - 

 

 317,284 

 

Accrued interest payable

 

 

 21,387 

 

  -

 

  -

 

 - 

 

 21,387 

 

Accrued interest payable - related party

 

 

 - 

 

  -

 

  -

 

 - 

 

 - 

 

Derivative liabilities

 

 

 102,011 

 

  -

 

  -

 

 - 

 

 102,011 

 

 

Total current and total liabilities

 

 

 902,788 

 

  256,274

 

  122,317

 

 1,300,000 

 

 2,581,379 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

 

 

 

  Preferred stock

 

 

 - 

 

  -

 

  -

 

 - 

 

 - 

 

  Common stock

 

 

 345,172 

 

  -

 

  -

 

 131,250 

 

 476,422 

(a), (b)

  Additional paid-in capital

 

 

 17,459,899 

 

  -

 

  -

 

 5,118,750 

 

 22,578,649 

(a), (b)

  Accumulated deficit

 

 

 (15,926,742)

 

  2,157,146

 

  480,903

 

 (2,638,049)

 

 (15,926,742)

(a)

 

Total stockholders' equity (deficit)

 

 

 1,878,330 

 

  2,157,146

 

  480,903

 

 2,611,951 

 

 7,128,330 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

$ 2,781,118 

 

 $ 2,413,420

 

 $ 603,220

 

$ 3,911,951 

 

$ 9,709,709 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Purchase transactions for Hyperion & OP&M

 

 

 

 

 

 

 

 

(b)

$4M raised to purchase Hyperion & OP&M

 

 

 

 

 

 


F-39



PRO FORMA CONDENSED

COMBINED BALANCE SHEETS

(Audited)

December 31, 2022

HISTORICAL

PRO FORMA

HYEX

HYPERION

OP&M

ADJUST-MENTS

COMBINED

REVENUE

   Gross revenue, net

$2,251,469 

$10,282,153

$525,127 

$13,058,749 

Net revenue

2,251,469 

10,282,153

525,127 

-

13,058,749 

COST OF REVENUE

   Cost of goods sold

783,141 

3,937,084

249,219 

4,969,444 

   Written off inventory

96,811 

-

96,811 

Total cost of revenue

879,951 

3,937,084

249,219 

-

5,066,254 

GROSS PROFIT

1,371,517 

6,345,069

275,908 

-

7,992,494 

OPERATING EXPENSES

   General and administrative

2,283,107 

5,850,762

672,407 

8,806,276 

   Impairment of assets

-

Total operating expenses

2,283,107 

5,850,762

672,407 

-

8,806,276 

OTHER INCOME (EXPENSE)

   Interest expense, net of interest income

(64,690)

2,135

(62,555)

   Change in fair value on derivative

(9,484)

-

(9,484)

   Miscellaneous Income

-

   SBA loan forgiveness

-

   Gain on sale of asset

2,643 

22,000

24,643 

Total other income (expense)

(71,531)

24,135

-

(47,396)

Net gain/(loss) before income tax provision

(983,121)

518,442

(396,499)

-

(861,178)

NET GAIN/(LOSS)

$(983,121)

$518,442

$(396,499)

$-

$(861,178)

Loss per share - basic and diluted

$(0.287)

$(0.251)

Weighted average number of shares outstanding

Basic and diluted

3,425,148 

3,425,148 

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


F-40



NOTES TO AUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

Note 1 – Basis of Presentation

Pursuant to a Reorganization and Acquisition Agreement (“Exchange Agreement”) dated January 13, 2023, Health Extracts, Incorporated (“HYEX”) has come into an agreement to acquire 100% ownership interest in Hyperion, LLC (“HYP”), a Virginia limited liability company and Online Publishing and Marketing, LLC (“OPM”), a Virginia limited liability company, in exchange for $3,050,000 in cash and the issuance of $1,250,000 in shares of Health Extracts’ common stock (approximately 25,000,000 shares valued at $0.05), to the former owner of HYP and OPM, resulting in HYP and OPM becoming a wholly-owned subsidiary of the Company.  Once the funding for the acquisition has been obtained, the Company will move forward with the agreed upon purchase.

For financial accounting purposes, the acquisition of HYP and OPM by HYEX (referred to as the “Merger”) was valued under the purchase price method. Accordingly, financial statements presented following the Merger will be viewed as being fairly valued as of December 31, 2022, and represent the operations of HYEX prior to the Merger. The Company’s will continue to operating under the names Green Valley Natural Solutions and Online Publishing and Marketing, LLC.  See Note 2 for further discussion.

The audited pro forma condensed combined financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and certain footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations; however, management believes that the disclosures are adequate to make the information presented not misleading.

The accompanying audited pro forma condensed combined financial statements present the pro forma consolidated financial position and operations of the combined company based upon the historical financial statements of HYP, OPM, and HYEX, after giving effect to the Merger and adjustments described in the following footnotes, and are intended to reflect the impact of the Merger on a pro forma basis. The accompanying audited pro forma condensed combined financial statements are presented for illustrative purposes only.

The accompanying audited pro forma condensed combined balance sheet at December 31, 2022 combines the historical consolidated balance sheets of HYP, OPM, and HYEX, giving effect to the Merger as if it had been consummated on December 31, 2022. The audited pro forma condensed combined statement of operations for the period ended December 31, 2022 combines the historical consolidated statements of operations of HYP, OPM, and HYEX, giving effect to the Merger as if it had occurred on January 1, 2022. Prior to the Merger, HYP, OPM, and HYEX, had fiscal year ends of December 31, respectively. As of the Merger date, the Company kept December 31 as its fiscal year end.

Note 2 - Merger

HYEX, will be acquiring 100% ownership interest in HYP and OPM in exchange for $3,050,000 in cash and the issuance of $1,250,000 in shares of Health Extracts’ common stock (approximately 25,000,000 shares valued at $0.05), to the former owner of HYP and OPM, resulting in HYP and OPM becoming a wholly-owned subsidiary of the Company.

The preliminary purchase price for the Acquired Businesses have been allocated to the assets acquired and liabilities assumed for purposes of this pro forma financial information based on their estimated relative fair values. The purchase price allocations herein are preliminary. The final purchase price allocations for the Acquired Businesses will be determined after completion of a thorough analysis to determine the fair value of all assets acquired and liabilities assumed but in No event later than one year following completion of the Acquisitions. Accordingly, the final acquisition accounting adjustments could differ materially from the accounting adjustments included in the pro forma financial statements presented herein. Any increase or decrease in the fair value of the assets acquired and liabilities assumed, as compared to the information shown herein, could also change the portion of purchase price allocable to goodwill and could impact the operating results of the Company following the acquisition due to differences in purchase price allocation, depreciation and amortization related to some of these assets and liabilities.


F-41



HYP and OPM Preliminary Purchase Price Allocation

The acquisition of HYP and OPM is being accounted for as a business combination under Financial Accounting Standards Board Accounting Standards Codification (ASC) 805.  The following information summarizes the provisional purchase consideration and preliminary allocation of the fair values assigned to the assets at the purchase date:

Preliminary Purchase Price Allocation Based On Estimated Fair Values Of The Net Assets Acquired

December 31, 2022

Purchase consideration

Cash consideration paid

$1,750,000

Cash placed in escrow for purchase of the company’s

1,300,000

Common stock shares issued

1,250,000

Total Purchase Consideration

$4,300,000

Purchase price allocation

   Cash

$200,000

   Accounts receivables

54,560

   Inventory

770,180

   Prepaid expenses

92,407

   Property and equipment, net

65,747

   Other assets

166,261

   Goodwill

3,315,368

   Accounts payable

327,969

   Accrued Liabilities

36,554

Net assets acquired

$4,300,000

Finite-lived intangible assets

   Customer Relationships – Additional goodwill

3,259,291

Total intangible assets

$3,259,291

This preliminary purchase price allocation has been used to prepare pro forma adjustments in the accompanying pro forma balance sheets and statements of operations. The final purchase price allocation will be determined when the Company has completed the detailed valuations and necessary calculations. The final allocation could differ materially from the preliminary allocation used in the pro forma adjustments. The final allocation may include (1) changes in fair values of long-lived assets, (2) changes in the allocation of purchase consideration in excess of fair value to separately identifiable intangible assets and (3) other changes to assets and liabilities.

Note 3 - Pro Forma Adjustments

Pro forma adjustments are necessary to reflect events that are: directly attributable to the Merger; factually supportable, and expected to have a continuing impact. The pro forma adjustments included in the audited pro forma condensed combined financial statements are as follows:

(a)

To remove carrying value of HYP and OPMs’ net assets that either did not carry over or were settled in conjunction with the merger.

(b)

HYEX issued equity immediately prior to the Merger to raise the funds needed for the merger.  Entries added the equity and goodwill created from the merger.

(c)

To eliminate HYP and OPMs’ historical members’ equity balance as of December 31, 2022.


F-42



Note 4 –Loss per Share

Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

The combined entity’s financial statements are prepared as if the transaction had been completed at the beginning of the period. The net loss and shares used in computing the net income loss per share for the period ended December 31, 2022 is based on weighted average common shares outstanding during the period. The effect of the additional shares of common stock issued as part of the Merger has been included for purposes of presenting pro forma net loss per share.


F-43



YOU MAY RELY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS.  WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS.  NEITHER THE DELIVERY OF THIS PROSPECTUS NOR SALE OF COMMON STOCK MEANS THAT INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT AFTER THE DATE OF THIS PROSPECTUS.  THIS PROSPECTUS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THESE SHARES OF THE COMMON STOCK IN ANY CIRCUMSTANCES UNDER WHICH THE OFFER OR SOLICITATION IS UNLAWFUL.

_________________

[·] SHARES

TABLE OF CONTENTS

COMMON STOCK

Page

Prospectus Summary

1

The Offering

Summary Financial Information

13

Risk Factors

16

Cautionary Note Regarding Forward-Looking Statements

38

Use of Proceeds

40

Dividend Policy

41

Capitalization

42

Dilution

43

Management’s Discussion and Analysis

44

-------------------------

Business

52

PROSPECTUS

Management

70

-------------------------

Executive Compensation

75

Security Ownership of Certain Beneficial Owners and Management

77

Certain Relationships and Related Transactions

79

[·], 2023

Description of Securities

82

Material U.S. Federal Income Tax Consequences

83

Underwriting

88

Legal Matters

91

Experts

91

Where You Can Find More Information

91

Index to Financial Statements

F-1

Dealer Prospectus Delivery Obligation.  Until termination of this offering, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus.  This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.




PART II – INFORMATION NOT REQUIRED IN PROSPECTUS

 

ITEM 13.OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

 

Expenses incurred or (expected) relating to this ProspectusThe following table sets forth the costs and expenses, other than the underwriting discounts, payable by the registrant in connection with the sale of our securities being registered. The estimated expenses of issuance and distribution is as follows:are set forth below: 

 

Legal and SEC filing fees $20,000 
Accounting  3,000 
Filing fees  1.16 
TOTAL $23,001.16 

Registration Fees

 

Approximately

$

1,350

FINRA filing fee

 

Approximately

 

5,000

Nasdaq listing fee

 

Approximately

 

50,000

Transfer Agent Fees

 

Approximately

 

1,500

Costs of Printing and Engraving

 

Approximately

 

5,000

Legal Fees

 

Approximately

 

30,000

Accounting and Audit Fees

 

Approximately

 

30,000

  Total

 

 

$

122,850

 

ITEM 14.INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

Pursuant to the ArticlesEach of Incorporationour officers and Bylaws of the corporation, we may indemnify an officer or director whodirectors is made a party to any proceeding, including a lawsuit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest.  In certain cases, we may advance expenses incurred in defending any such proceeding.  Toan Indemnification Agreement with the extentCompany that the officer or directors is successful on the merits in any such proceeding as to which such person is to be indemnified, we must indemnify him against all expenses incurred, including attorney's fees.  With respect to a derivative action, indemnity may be made onlyprovides for expenses actually and reasonably incurred in defending the proceeding, and if the officer or directors is judged liable, only by a court order.  The indemnification is intended to be to the fullest extent permitted byunder applicable law.

Section 78.751 of the lawsGeneral Corporation Law of the State of Nevada.Nevada states that the articles of incorporation of a Nevada corporation may provide that the expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition. It further states that indemnification does not exclude any other rights that an officer or director may have pursuant to the articles, bylaws, shareholders agreement or otherwise, and that it continues for a person who has ceased to be a director, officer, or employee of the company.

 

In regards toInsofar as indemnification for liabilities arising under the Securities Act of 1933 as amended,(the “Act”) may be permitted to directors, or officers and controlling persons of the registrant pursuant to the foregoing provisions, we are informedor otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.

 

ITEM 15.RECENT SALES OF UNREGISTERED SECURITIES

 

Set forth belowThe following is information regarding the issuance anda list of unregistered sales of equity securities withoutissued by the Company from January 1, 2020 through the date hereof. All share amounts reflect the anticipated 1-for-100 reverse stock split of our outstanding shares of Common Stock.

Note Conversion Agreements and Advance Conversion Agreements

Effective April 13, 2020, we entered into a total of eighteen (18) agreements (16 Note Conversion Agreements and 2 Advance Conversion Agreements) whereby an aggregate of $1,508,407.84 in outstanding principal and accrued interest was converted into an aggregate of 392,488 shares of our common stock. The conversion price was either $3.00 per share or $5.00 per share, depending on the individual agreement. The conversions included notes and advances held by our officers and directors and our largest shareholder, as follows:


II-1



 

Name

Aggregate Principal and Interest

 

Aggregate Shares

Jay W. Decker

$1,282,231.11

334,180

William Bossung

$65,677.84

21,892

First Capital Properties LLC

$16,180.00

5,393

Shelton S. Decker

$33,717.78

7,822

Logan B. Decker

$33,717.78

7,822

Kevin Pitts

$51,255.56

10,251

Innovation Group Holdings, LLC

$25,627.78

5,125

The shares of common stock issued pursuant to the Note Conversion Agreements and the Advance Conversion Agreements were offered and sold in reliance on an exemption from registration since inception.  No such sales involvedpursuant to Section 4(a)(2) of the useSecurities Act of an underwriter; no advertising or public solicitation was involved;1933, as amended. The investors have acquired the securities bearfor investment purposes only and not with a restrictive legend;view to, or for sale in connection with, any distribution thereof. The securities were not issued through any general solicitation or advertisement.

Securities Purchase Agreements

On October 15, 2020, we entered into four (4) Securities Purchase Agreements to document transactions prior to September 30, 2020 whereby we sold and no commissionsissued 59,000 shares of our common stock at $5.00 per share for aggregate consideration of $295,000. The purchasers included our officers and directors and our largest shareholder, as follows:

 

Name

Aggregate Principal and Interest

 

Aggregate Shares

Jay W. Decker

$100,000

20,000

Shelton S. Decker

$50,000

10,000

Logan B. Decker

$50,000

10,000

Dr. Gerald Haase

$95,000

19,000

   Total

$295,000

59,000

The shares of common stock issued pursuant to the Securities Purchase Agreements were paidoffered and sold in reliance on an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. The investors have acquired the securities for investment purposes only and not with a view to, or for sale in connection with, any distribution thereof. The securities were not issued through any general solicitation or advertisement.

Note Conversion Agreements

Effective September 2, 2020, we entered into five (5) Note Conversion Agreements whereby an aggregate of $1,791,382.56 in outstanding principal and accrued interest was converted into an aggregate of 358,276 shares of our common stock. The conversion price was $0.05 per share. The conversions included a note held by our largest shareholder, as follows:

Name:

No. of Shares

Jay W. Decker

307,350

Genuine Partners

16,926

Dan Bishop

22,000

James Knox

10,000

Matthew Dee Grabau

2,000

Total

358,276


II-2



The shares of common stock issued pursuant to the Note Conversion Agreements were offered and sold in reliance on an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. The investors have acquired the securities for investment purposes only and not with a view to, or for sale in connection with, any distribution thereof. The securities were not issued through any general solicitation or advertisement.

Note and Warrants

On March 18, 2021, we entered into a Securities Purchase Agreement whereby we issued a Promissory Note in the principal amount of $340,000. The Note has an original issue discount of $20,000, a maturity date of one year, and bears interest at the rate of ten percent (10%) per annum. We received a net amount of $320,000, minus expenses, upon issuance of the Note. We can prepay the Note at any time without penalty. If we have not previously prepaid the Note, after 180 days the holder may convert the Note, in whole or in part, into our common stock at a conversion price of $5.00 per share. As additional consideration, we issued an aggregate of 12,000 shares of our common stock to the note holder. If we prepay the Note in 180 days or less, 6,000 of the shares will be returned to us without additional consideration.

On March 18, 2021, we issued 27,150 shares of common stock, restricted in accordance with Rule 144, to two (2) shareholders for services rendered. 

The note, warrants, and common stock were offered and sold in reliance on an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. The investors have acquired the securities for investment purposes only and not with a view to, or for sale in connection with, any distribution thereof. The securities were not issued through any general solicitation or advertisement.

Notes and Warrants

From May through September 2021, we issued convertible promissory notes with an aggregate face value of $625,000, plus warrants to acquire an aggregate of 62,500 shares of our common stock, to a total of twenty (20) investors. The notes are convertible into our common stock at the election of the holder at $5.00 per share. The warrants are exercisable for a period of five (5) years at $7.50 per share. In connection with the sale of any securities.

On December 19, 2014, the Companynotes and warrants to U.S. investors, HP Securities, Inc. or its affiliates was paid ten percent (10%) of the offering proceeds from investors introduced by them in cash, and issued a total of 10,000,000one million (10,000) shares of common stock to its three founders for a cash contribution of $100. These securities were issued in reliance upon the exemption contained in Section 4(2) of Securities Act of 1933.  These securities were issued to the founders of the Company and bear a restrictive legend.  No written agreement was entered into regarding the sale of stock to the Company's founders.

On December 24, 2014 the Company issued 1,006,666 shares of common stock to four unaffiliated investors for proceeds of $20,133.

On January 30, and February 9, 2015 the Company issued 3,300,000 shares ofour common stock and 3,300,000warrants to acquire 1,000 shares of our common stock purchaseat an exercise price of $5.00 per share; Carter Terry & Co was issued 1,777 shares of our common stock.

The note, warrants, for $330,000,and common stock were offered and sold in reliance on an exemption from registration pursuant to thirty (37) unaffiliated private investors in a private offering dated January 15, 2015. The company relied uponRule 506(b) of Regulation D Rule 506(b).  The investors were business acquaintances, family members, or friends of, or personally known to, our officers and directors.  It is the belief of management that eachpromulgated under Section 4(a)(2) of the individuals who invested have such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of the investment and therefore did not need the protections offered by registering their shares under Securities and Exchange Act of 1933, as amended. Each investor completedThe investors have acquired the securities for investment purposes only and not with a subscription confirmation letter and private placement subscription agreement whereby the investors certified that theyview to, or for sale in connection with, any distribution thereof. The securities were purchasing the shares for their own accounts, with investment intent.  This Offering was not accompanied by general advertisement orissued through any general solicitation and the shares were issued with a Rule 144 restrictive legend.

-50-

EXHIBITSor advertisement.

 

FRANK PLEASE INCLUDE EXHIBITS REGARDING WARRANTS, CORPORATE RESOLUTION

The following exhibits are included with this registration statement filing:Note

 

On May 25, 2022, we entered into a Securities Purchase Agreement with a single purchaser, whereby we sold to the purchaser a Convertible Promissory Note in the principal amount of $154,000. The Note contained an original issue discount of 10%, and thus the proceeds to us was $138,600. The Note bears interest at a rate of ten percent (10%) per annum, has a maturity date of August 5, 2023, and is payable in

Exhibit No.Description  Incorporated by Reference to
3.1*Articles of Incorporation
3.2*Bylaws
4.2*Form of Warrant Certificate
4.3*Warrant Agreement
5*Opinion re: Legality
23.1*Consent of Independent Auditors
23.2Consent of Counsel (See Exhibit 5)
*Files herewith

II-3



equal monthly installments of $14,488.49 per month beginning on October 5, 2022. The Note is convertible into our common stock at the election of the holder at $5.00 per share.

 

The proceeds from the sale of the Note were used to satisfy all but $17,000 of our obligations to Jay Decker pursuant to a previously issued promissory note to benefit from terms that our management believes are more favorable to the Company. 

 

-51-

UNDERTAKINGSCommon Stock

On April 22, 2022, April 25, 2022, and May 19, 2022, we issued an aggregate of 64,000 shares of our common stock to four parties in exchange for services. The issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, there was no solicitation involved in the offerings, and the parties were all accredited. 

Note Conversion

On June 24, 2022, we entered into a Note Conversion Agreement with Jay Decker whereby Decker converted $17,000 in principal and $31.07 in interest on an outstanding convertible note into 3,406 shares of our common stock at a conversion price of $5.00 per share.

Common Stock

On September 13, 2022, we issued an aggregate of 3,400 shares of our common stock to two parties in exchange for services. The issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, there was no solicitation involved in the offerings, and the parties were either sophisticated or accredited. 

Restricted Stock Units and Restricted Stock Awards

On December 26, 2022, we approved the Healthy Extracts Inc. 2022 Equity Incentive Plan and set aside 5,200 shares of our common stock for issuance thereunder. On December 26, 2022, we approved a total of 1,597 Restricted Stock Units at $1.00 per share and 3,600 Restricted Stock Awards with a strike price of $0.00 to $1.00 to a total of sixteen (16) individuals.

 

The undersigned Registrant hereby undertakes:issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, there was no solicitation involved in the offerings, and the parties were either sophisticated or accredited.

 

Convertible Notes and Warrants

On January 24, 2023, we entered into a Securities Purchase Agreement for the sale of convertible notes in the aggregate principal amount of $388,888, and warrants to acquire 74,216 shares of our common stock at an exercise price of $4.72 per share, to two investors. The Notes contained an original issue discount of 10%, and thus the proceeds to us was $350,000. The Notes do not bear interest unless we are in default, have a maturity date of October 24, 2023, and all amounts are payable on the maturity date. The Notes are convertible into our common stock at the election of the holder at means ninety percent (90%) of the lowest


II-4



VWAP of our common stock for the five (5) consecutive Trading Days immediately preceding the date of the issuance of a Conversion Election.

The issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, there was no solicitation involved in the offerings, and the parties were either sophisticated or accredited.

ITEM 16.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)The exhibits listed on the Exhibit Index at the end of this Registration Statement are incorporated herein and filed as part of this registration statement.  

(b)Financial Statement Schedules.  


No financial statement schedules have been provided because the information is not required or is shown either in the financial statements or the notes thereto.

ITEM 17.UNDERTAKINGS

A.Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. 

B. The undersigned registrant hereby undertakes: 

(1)To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

i.To include any prospectus required by Section 10(a) (3) of the Securities Act;

(a)To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; 

ii.To reflect in each prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement.  Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement;

iii.To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

 

(b)To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (Section 230.424(b) of Regulation S-K) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and 


II-5



(c)To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. 

(2)That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of suchthe securities at that time shall be deemed to be the initial bona fide offering thereof;thereof. 

 

(3)To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(4) ForThat, for the purpose of determining liability of the undersigned registrant under the Securities Act of 1933 to any purchaser inpurchaser: 

(i) If the initial distributionregistrant is relying on Rule 430B (§230.430B of this chapter): 

(a) Each prospectus filed by the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to Rule 424(b)(3) (§230.424(b)(3) of this Registration Statement, regardlesschapter) shall be deemed to be part of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of anyregistration statement as of the following communications,date the undersigned registrant will be a seller tofiled prospectus was deemed part of and included in the purchaserregistration statement; and will be considered to offer or sell such securities to such purchaser:

 

i.    Any preliminary Prospectus or Prospectus of the undersigned registrant relating to the offering(b) Each prospectus required to be filed pursuant to Rule 424 (Sec. 230-424);

ii.  Any free writing Prospectus424(b)(2), (b)(5), or (b)(7) (§230.424(b)(2), (b)(5), or (b)(7) of this chapter) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) (§230.415(a)(1)(i), (vii), or (x) of this chapter) for the offering preparedpurpose of providing the information required by or on behalfsection 10(a) of the undersigned registrant or used or referred to by the registrant;

iii.  The portionSecurities Act of any other free writing Prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

iv.  Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

v.  Each prospectus1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or 

(ii) If the registrant is subject to Rule 430C (§230.430C of this Registration Statementchapter), each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (§230.430A of this chapter), shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a  


II-6



registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

-52-

 

Insofar as indemnification(5)That, for liabilities arisingthe purpose of determining liability of the registrant under the Securities Act may be permittedof 1933 to directors, officers and controlling personsany purchaser in the initial distribution of the Registrantsecurities: 

(i)The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to the provisions above, or otherwise, the Registrant has been advised that in the opinionthis registration statement, regardless of the Securities and Exchange Commissionunderwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.  In the event that a claim for indemnification against such liabilities (other than the paymentpurchaser by the Registrantmeans of expenses incurred or paid by a directors, officer or controlling personany of the Registrant infollowing communications, the successful defense of any action, suit or proceeding) is asserted by such directors, officer or controlling person in connection withundersigned registrant will be a seller to the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Actpurchaser and will be governedconsidered to offer or sell such securities to such purchaser: 

(a)Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (§230.424 of this chapter); 

(b) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the final adjudicationundersigned registrant; 

(c) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and 

(d) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. 

(6) The undersigned registrant hereby undertakes that: 

(i)For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. 

(ii) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such issue.securities at that time shall be deemed to be the initial bona fide offering thereof.


II-7



SIGNATURES

 

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Amendment No. 1 to the registrant’s registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Las Vegas, NV.Henderson, State of Nevada. 

 

GREY CLOAK TECH INC, Registrant

 

/s/Fred Covely                  

Fred Covely
President, and Member of the Board of Directors

Healthy Extracts Inc.

/s/William Bossung

William Bossung

Dated:  April 11, 2023

/s/ Kevin “Duke” Pitts

By:Kevin “Duke” Pitts 

Its:President 

Dated:  April 11, 2023

/s/ Robert Madden

By:Robert Madden 

Its:Chief Financial Officer, (Principal Accounting Officer),

Secretary, and  Member of the Board of Directors

Principal Accounting Officer 

 

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates stated:indicated. 

 

 

Dated:  April 11, 2023

/s/Fred Covely

Date: March 6, 2015
Fred Covely
President, Director

Kevin “Duke” Pitts

/s/William Bossung

Name:Kevin “Duke” Pitts

Title:President and Director

Dated:  April 11, 2023

/s/ William Bossung

Chief Financial Officer (Principal Accounting Officer),

Name:William Bossung

SecretaryTitle:Director

Dated:  April 11, 2023

/s/ Bill Croyle

Name:Bill Croyle

Title:Director




EXHIBIT INDEX

Exhibit No.

Description

1.1**

Form of Underwriting Agreement

3.1 (1)

Articles of Incorporation of Grey Cloak Tech Inc.

3.2 (2)

Certificate of Amendment of Articles of Incorporation

3.3 (1)

Bylaws of Grey Cloak Tech Inc.

5.1**

Opinion of Clyde Snow & Sessions, PC

10.1 (11)

Supply Agreement with H&AD S.r.L. dated January 1, 2019, as amended

10.2 (3)

Share Exchange Agreement dated February 4, 2019 by and Memberamong Grey Cloak Tech Inc., BergaMet NA, LLC, and the Members of BergaMet

10.3 (4)

Independent Contractor Agreement by and between the Company and Kevin “Duke” Pitts, dated October 1, 2019

10.4 (5)

Share Exchange Agreement with Ultimate Brain Nutrients, LLC and its members

10.5 (6)

Securities Purchase Agreement dated March 18, 2021

10.6 (6)

Promissory Note dated March 18, 2021

10.7 (11)

Licensing Agreement with Gelteq Ptd Ltd.

10.8 (12)

Private Label Agreement with Whitney Johns, Inc. dated October 11, 2021

10.9*

Lease Agreement for warehouse and distribution facility dated January 20, 2022

10.10 (7)

Common Stock Purchase Warrant dated February 10, 2022

10.11 (7)

Promissory Note dated February 22, 2022

10.12 (8)

Securities Purchase Agreement dated May 25, 2022

10.13 (8)

Convertible Promissory Note dated May 25, 2022

10.14 (11)

Consulting Agreement with Robert Madden

10.15 (9)

Loan Agreement with Amazon Capital Services, Inc. entered into on October 7, 2022

10.16 (10)

Acquisition Agreement with Hyperion, L.L.C. and Online Publishing & Marketing, LLC dated January 13, 2023




10.17 (10)

Securities Purchase Agreement dated January 24, 2023

10.18 (10)

10% OID Promissory Note dated January 24, 2023

10.19 (10)

Common Stock Purchase Warrant dated January 24, 2023

10.20**

Form of Underwriter’s Warrant

14.1 (11)

Code of Ethics

23.1*

Consent of BF Borgers CPA PC, independent registered public accounting firm

23.2**

Consent of Clyde Snow & Sessions, PC (included in Exhibit 5.1)

24.1 (11)

Power of Attorney (included on the signature page of the Boardinitial filing of Directorsthis Registration Statement)

101.INS

XBRL Instance Document

101.SCH

XBRL Schema Document

101.CAL

XBRL Calculation Linkbase Document

101.DEF

XBRL Definition Linkbase Document

101.LAB

XBRL Labels Linkbase Document

101.PRE

XBRL Presentation Linkbase Document

107*

Filing Fee Table

 

 

* Filed herewith 

**To be filed by amendment 

-53-

(1)

Incorporated by reference from our Registration Statement on Form S-1 dated and filed with the Commission on March 6, 2015.

(2)

Incorporated by reference from our Annual Report on Form 10-K dated and filed with the Commission on February 19, 2021.

(3)

Incorporated by reference from our Quarterly Report on Form 10-Q dated and filed with the Commission on May 28, 2020.

(4)

Incorporated by reference from our Regulation A Offering Statement on Form 1-A dated and filed with the Commission on May 7, 2021.

(5)

Incorporated by reference from our Current Report on Form 8-K filed with the Commission on April 8, 2020




(6)

Incorporated by reference from our Current Report on Form 8-K filed with the Commission on March 19, 2021

(7)

Incorporated by reference from our Current Report on Form 8-K filed with the Commission on March 2, 2022.

(8)

Incorporated by reference from our Current Report on Form 8-K filed with the Commission on June 7, 2022.

(9)

Incorporated by reference from our Quarterly Report on Form 10-Q dated and filed with the Commission on November 8, 2022.

(10)

Incorporated by reference from our Current Report on Form 8-K filed with the Commission on January 26, 2023.

(11)

Previously filed.

(12)

Incorporated by reference from our Annual Report on Form 10-K filed with the Commission on March 31, 2023.