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Grand Havana Inc. – ‘10-K’ for 12/31/17 – ‘EX-101.INS’

On:  Monday, 8/5/19, at 4:36pm ET   ·   For:  12/31/17   ·   Accession #:  1264931-19-165   ·   File #:  0-55037

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 8/05/19  Grand Havana Inc.                 10-K       12/31/17   45:2.6M                                   Bongiovanni Michael J

Annual Report   —   Form 10-K   —   Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                       HTML    465K 
 2: EX-31.1     Certification of Chief Executive Officer Pursuant   HTML     19K 
                to 18 Usc 1350 as Adopted Pursuant to 302 of the                 
                Sarbanes-Oxley Act of 2002                                       
 3: EX-31.2     Certification of Principal Financial Officer and    HTML     20K 
                Principal Accounting Officer Pursuant to 18 Usc                  
                1350 as Adopted Pursuant to 302 of the                           
                Sarbanes-Oxley Act of 2002                                       
 4: EX-32.1     Certification of Chief Executive Officer,           HTML     16K 
                Principal Financial Officer and Principal                        
                Accounting Officer Pursuant to 18 Usc 1350 as                    
                Adopted Pursuant to 906 of the Sarbanes-Oxley Act                
                of 2002                                                          
11: R1          Document and Entity Information                     HTML     49K 
12: R2          Balance Sheets                                      HTML    105K 
13: R3          Balance Sheets (Parenthetical)                      HTML     44K 
14: R4          Statements of Operations                            HTML     67K 
15: R5          Shareholders Equity                                 HTML     65K 
16: R6          Statements of Cash Flows                            HTML    114K 
17: R7          Note 1 - Organization                               HTML     28K 
18: R8          Note 2 - Summary of Significant Accounting          HTML     73K 
                Policies                                                         
19: R9          Note 3 - Going Concern                              HTML     21K 
20: R10         Note 4 - Loss Per Share                             HTML     23K 
21: R11         Note 5 - Inventory                                  HTML     20K 
22: R12         Note 6 - Property and Equipment                     HTML     21K 
23: R13         Note 7 - Acquisition and Related Goodwill           HTML     93K 
24: R14         Note 8 - Intangible Assets                          HTML     21K 
25: R15         Note 9 - Convertible Notes                          HTML     33K 
26: R16         Note 10 - Note Payable                              HTML     17K 
27: R17         Note 11 - Related Party Transactions                HTML     22K 
28: R18         Note 12 - Line of Credit                            HTML     18K 
29: R19         Note 13 - Income Taxes                              HTML     25K 
30: R20         Note 14 - Equity                                    HTML     22K 
31: R21         Note 15 - Warrants                                  HTML     29K 
32: R22         Note 16 - Commitments and Contingencies             HTML     22K 
33: R23         Note 17 - Subsequent Events                         HTML     54K 
34: R24         Note 2 - Summary of Significant Accounting          HTML    133K 
                Policies (Policies)                                              
35: R25         Note 2 - Summary of Significant Accounting          HTML     26K 
                Policies (Tables)                                                
36: R26         Note 4 - Loss Per Share (Tables)                    HTML     21K 
37: R27         Note 7 - Acquisition and Related Goodwill (Tables)  HTML     31K 
38: R28         Note 13 - Income Taxes (Tables)                     HTML     19K 
39: R29         Note 11 - Related Party Transactions (Details       HTML     18K 
                Narrative)                                                       
40: R30         Note 13 - Income Taxes (Details Narrative)          HTML     17K 
41: R31         Note 7 - Acquisition and Related Goodwill           HTML     58K 
                (Details)                                                        
42: R32         NOTE 13 - INCOME TAXES - Schedule of                HTML     24K 
                Reconciliation between US corporate and effective                
                income tax rate (Details)                                        
44: XML         IDEA XML File -- Filing Summary                      XML     73K 
43: EXCEL       IDEA Workbook of Financial Reports                  XLSX     53K 
 5: EX-101.INS  XBRL Instance -- ghav-20171231                       XML    651K 
 7: EX-101.CAL  XBRL Calculations -- ghav-20171231_cal               XML     94K 
 8: EX-101.DEF  XBRL Definitions -- ghav-20171231_def                XML     68K 
 9: EX-101.LAB  XBRL Labels -- ghav-20171231_lab                     XML    417K 
10: EX-101.PRE  XBRL Presentations -- ghav-20171231_pre              XML    299K 
 6: EX-101.SCH  XBRL Schema -- ghav-20171231                         XSD     74K 
45: ZIP         XBRL Zipped Folder -- 0001264931-19-000165-xbrl      Zip     75K 


‘EX-101.INS’   —   XBRL Instance — ghav-20171231


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<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>NOTE 1 - ORGANIZATION</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Grand Havana Inc. F/K/A Junkiedog.com, Inc. (the “Company”) was incorporated in the State of Texas in 2009 as Unique Underwriters, Inc.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 9, 2014, the Board of Directors and consenting shareholders holding a majority of issued and outstanding Common Stock approved a change in domicile of the Company from Texas to Nevada. The change of domicile, or reincorporation, was effected by means of a merger between the Company and a newly formed wholly-owned Nevada subsidiary of the Company in name of JunkieDog.com Inc., in which the subsidiary was the surviving entity.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 19, 2014, a Plan of Exchange (the “Exchange”) was executed between and among the Company and First Choice Apparel LLC (“First Choice”), a limited liability company organized in the State of North Carolina on June 20, 2013, specializing in the online sales of clothing and other quality items via a wholesale website. Pursuant to the Exchange, the Company acquired 100% of the membership interests of First Choice in exchange for an issuance by the Company of 40,000,000 shares of Common Stock to First Choice Members, and/or their assigns. The above issuance gave First Choice Members and/or their assigns a 'controlling interest' in the Company representing approximately 98.1% of the then issued and outstanding shares of the Company’s Common Stock. The transaction resulted in a change in control of the Company. The Company and First Choice were reorganized, such that the Company acquired 100% of the membership interests of First Choice, and First Choice became a wholly-owned subsidiary of the Company.</p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As a result of the Exchange with First Choice Apparel, the Company’s business model was changed from insurance sales to e-commerce</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In March 2016, the Company’s management decided to discontinue the operations of First Choice Apparel due to the significant adverse change in the business climate for internet based retail and wholesale virtual stores. Accordingly, both segments with respect to insurance sales and e-commerce were reported as discontinued operations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 19, 2016, Grand Havana LLC, organized as a Limited Liability Company under the laws of the State of Florida having its articles of organization filed and effective on April 2, 2015, merged into Grand Havana Master LLC, (“GHM”) a Limited Liability Company organized and existing under the laws of the State of Florida having its Articles of Organization filed and effective on August 20, 2015.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 5, 2017, an Agreement for the Exchange of Stock (the “Exchange”) was entered into between the Company and GHM, and the members of GHM, pursuant to which 50,000,000 shares of the Company’s common stock were issued to the members of GHM in exchange for 100% of the membership interests of GHM. Upon completion of the Exchange, Grand Havana Master LLC became the Company’s wholly-owned subsidiary and the members of GHM own a controlling interest in the Company. Simultaneously upon the Closing of the Exchange, Mr. Roberto Luciano, the Company’s Chief Executive Officer, returned his 39,500,000 shares of the Company’s common stock for cancellation in exchange for certain assets of the business. As a result, the Company became GHM’s wholly owned subsidiary and assumed a total of $866,011 in net liabilities. This transaction is being accounted for as a reverse merger and GHM is deemed to be the acquirer. Consequently, the assets and liabilities and the historical operations that will be reflected in the consolidated financial statements prior to the Reverse Merger will be those of GHM.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 25, 2017, the Company entered into an agreement to purchase 70% of the issued and outstanding capital stock of Cafesa Co., a Florida corporation that is a coffee wholesaler. 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The business purpose of GMB is to provide marketing and sales services for the Company’s products to retail businesses.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Grand Havana, Inc. and its subsidiaries are hereinafter referred to as the “Company”.</p>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>FAIR VALUE OF FINANCIAL INSTRUMENTS</u></p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">GAAP requires certain disclosures regarding the fair value of financial instruments. The fair value of financial instruments is made as of a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">GAAP defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal, or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">GAAP establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the degree of subjectivity that is necessary to estimate the fair value of a financial instrument. GAAP establishes three levels of inputs that may be used to measure fair value:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 1 – Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 2 – Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 3 – Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table summarizes our financial instruments measured at fair value as of December 31, 2017:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="15" style="text-align: center"><b>Fair Value Measurements at December 31, 2017</b></td></tr> <tr style="vertical-align: bottom"> <td><b>Liabilities:</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Total</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Level 1</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Level 2</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Level 3</b></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; text-align: left">Convertible notes payable</td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">1,619,049</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">1,619,049</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Warrants</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">3,309,861</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">  </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">  </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">3,309,861</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="15" style="text-align: center"><b>Fair Value Measurements at December 31, 2016</b></td></tr> <tr style="vertical-align: bottom"> <td><b>Liabilities:</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Total</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Level 1</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Level 2</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Level 3</b></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; text-align: left">Convertible notes payable</td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Warrants</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">  </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">  </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">  </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">  </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="7" style="text-align: center"><b>December 31</b></td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid"><b>Description</b></td><td style="padding-bottom: 1pt"><b> </b></td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><b>2017</b></td><td style="padding-bottom: 1pt"><b> </b></td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><b>2016</b></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 56%; text-align: left">Beginning balance</td><td style="width: 8%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Proceeds, payments and conversions</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">736,109</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">  </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Total change in fair value</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid"> </td><td style="text-align: right; border-bottom: Black 1pt solid">4,224,631</td><td style="text-align: left; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid"> </td><td style="text-align: right; border-bottom: Black 1pt solid">  </td><td style="text-align: left; padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Ending balance</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">4,960,740</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">  </td><td style="text-align: left; padding-bottom: 2.5pt"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company uses a multinomial lattice model that values the derivative liability within the convertible notes and warrants based on probability weighted discounted cash flow model. The following assumptions were used for the valuation of the derivative liability related to the convertible notes:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top; text-align: left"> <td style="width: 9%"> </td> <td style="width: 3%"> </td> <td style="width: 88%">The underlying stock price $0.0085 to $.0615 was used as the fair value of the common stock;</td></tr> <tr style="vertical-align: top; text-align: left"> <td> </td> <td> </td> <td>The note face amounts are in the range $12,970 and $172,000 with the same terms as at issuance and effectively convert at discounts in the range of 43.70% to 78.23%.</td></tr> <tr style="vertical-align: top; text-align: left"> <td> </td> <td></td> <td>Capital raising events would not occur in any quarter generating dilutive reset events at prices below the current variable rates for the Notes;</td></tr> <tr style="vertical-align: top; text-align: left"> <td> </td> <td></td> <td>The holder would redeem based on availability of alternative financing, 10% of the time increasing 1.0% monthly to a maximum of 20%;</td></tr> <tr style="vertical-align: top; text-align: left"> <td> </td> <td></td> <td>The holder would automatically convert the note at maturity if the registration was effective and the company was not in default;</td></tr> <tr style="vertical-align: top; text-align: left"> <td> </td> <td></td> <td>An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 20% – to–date many notes are in default and partially converted by the holder’s post assignment;</td></tr> <tr style="vertical-align: top; text-align: left"> <td> </td> <td></td> <td>The projected volatility for each valuation period was based on the volatility of 12 comparable company’s in the same Food Processing industry range from 112% to 243%.</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following assumptions were used for the valuation of the derivative liability related to the warrants: </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top; text-align: left"> <td style="width: 9%"> </td> <td style="width: 3%"> </td> <td style="width: 88%">The holder would automatically exercise the warrants at a stock price above the exercise price at expiration;</td></tr> <tr style="vertical-align: top; text-align: left"> <td> </td> <td> </td> <td>Dilutive reset events (March 15, 2017 to $0.027 and April 7, 2017 to $0.012) projected to occur based on future projected capital needs and projected debt/liability settlements resulting in adjusted warrants to 3,341,691 as of December 31, 2017;</td></tr> <tr style="vertical-align: top; text-align: left"> <td> </td> <td> </td> <td>The projected annual volatility was based on the historical volatility of comparable companies of 123% to 175%;</td></tr> <tr style="vertical-align: top; text-align: left"> <td> </td> <td> </td> <td>Risk-free rates were based on the remaining term</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
</us-gaap:FairValueOfFinancialInstrumentsPolicy>
<us-gaap:CashAndCashEquivalentsPolicyTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><u>CASH AND CASH EQUIVALENTS </u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify">The Company considers highly liquid investments with original maturities of three months or less when purchased as cash equivalents. The Company had no cash equivalents as of December 31, 2017 and 2016. At times throughout the year, the Company might maintain bank balances that may exceed Federal Deposit Insurance Corporation insured limits. Periodically, the Company evaluates the credit worthiness of the financial institutions, and has not experienced any losses in such accounts. At December 31, 2017 and 2016, the Company had $0 over the insurable limit.</p>
</us-gaap:CashAndCashEquivalentsPolicyTextBlock>
<us-gaap:ReceivablesPolicyTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>ACCOUNTS RECEIVABLE</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. At December 31, 2017 and 2016, the Company has established, based on a review of its outstanding balances, that no allowance is necessary.</p>
</us-gaap:ReceivablesPolicyTextBlock>
<us-gaap:DerivativesPolicyTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>CONVERTIBLE INSTRUMENTS AND DERIVATIVES</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for FASB ASC 815, <i>Derivatives and Hedging</i> (“ASC 815”).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Professional standards generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three 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 otherwise applicable generally accepted accounting principles 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. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument”.</p> <p style="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, 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 discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares 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.</p> <p style="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC 815 provides that, among other things, generally, if an event is not within the entity’s control could or require net cash settlement, then the contract shall be classified as an asset or a liability.</p>
</us-gaap:DerivativesPolicyTextBlock>
<us-gaap:GoodwillAndIntangibleAssetsPolicyTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>GOODWILL</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Goodwill represents the excess of cost over net assets of acquired businesses that are consolidated. The Company performs its annual assessment of goodwill on December 31 of each fiscal year and whenever events or changes in circumstances or a triggering event indicate that the carrying amount may not be recoverable. Determining whether a triggering event has occurred often involves significant judgment from management. An entity is permitted to first assess qualitatively whether it is necessary to perform a goodwill impairment test. The quantitative impairment test is required only if the entity concludes that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. The Company determines the fair value of a reporting unit based on an income approach utilizing a discounted cash flow adjusted for entity specific factors. In evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, an entity should consider the totality of all relevant events or circumstances that affect the fair value or carrying amount of a reporting unit. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then an impairment loss equal to the difference is recorded. See Note 7, "Acquisition and Related Goodwill" for further information and discussion.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company performed its annual assessment of goodwill on December 31, 2017 and determined that a full impairment to goodwill of $553,980 was necessary.</p>
</us-gaap:GoodwillAndIntangibleAssetsPolicyTextBlock>
<us-gaap:InventoryPolicyTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>INVENTORY</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Inventory is stated at the lower of cost or net realizable value using the FIFO method. Inventory consists primarily of only finished goods, which represents the final product ready for sale. A periodic inventory system is maintained by 100% count. Inventory is replaced periodically to maintain the optimum stock on hand available for immediate shipment. The Company assesses whether an inventory reserve is necessary at the end of each fiscal period. For the years ended December 31, 2017 and 2016 no inventory reserve was deemed necessary.</p>
</us-gaap:InventoryPolicyTextBlock>
<us-gaap:IncomeTaxPolicyTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>INCOME TAXES</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company, along with its consolidated subsidiaries, are deemed a corporation and thus is a taxable entity. Prior to the reverse merger on February 5, 2017 the Company filed a U.S. Return of Partnership Income, whereby the members of the Company were taxed on their share of the Company’s taxable income, and the Company was not subject to federal and state income taxes. No provision for income taxes was reflected in the accompanying consolidated financial statements, as the Company did not have income through December 31, 2017. There were no uncertain tax positions that would require recognition in the consolidated financial statements through December 31, 2017.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Generally, federal, state and local authorities may examine the Company’s tax returns for three years from the date of filing, and the current and prior three years remain subject to examination as of December 31, 2017.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analyses of tax laws, regulations and interpretations thereof as well as other factors.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for income taxes under ASC 740-10-30, <i>Income Taxes</i>. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.</p>
</us-gaap:IncomeTaxPolicyTextBlock>
<us-gaap:PropertyPlantAndEquipmentPolicyTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>PROPERTY AND EQUIPMENT</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Property and equipment are recorded at cost. Expenditures for major renewals and improvements are capitalized while expenditures for minor replacements, maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Upon retirement or disposal of assets, the accounts are relieved of cost and accumulated depreciation and the related gain or loss, if any, is reflected in loss on disposal of assets in the consolidated statement of income and comprehensive income.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 27pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At least annually, the Company evaluates, and adjusts when necessary, the estimated useful lives. The changes in estimated useful lives would not have a material impact on depreciation in any period. The estimated useful lives are:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="background-color: white"> <td style="vertical-align: top; width: 50%; padding-right: 0.8pt; padding-left: 0.25in; text-align: justify; text-indent: -0.25in"><font style="font-size: 10pt">Equipment</font></td> <td style="vertical-align: bottom; width: 50%; padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">7 years</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
</us-gaap:PropertyPlantAndEquipmentPolicyTextBlock>
<us-gaap:ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>LONG LIVED ASSETS</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company evaluates the carrying value and recoverability of its long-lived assets when circumstances warrant such evaluation by applying the provisions of ASC 360-35, <i>Property, Plant and Equipment, Subsequent Measurement </i>(“ASC 360-35”). ASC 360-35 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.</p>
</us-gaap:ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock>
<us-gaap:LongDurationContractsRevenueRecognitionPolicy contextRef="From2017-01-01to2017-12-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>RECOGNITION OF REVENUE</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Sales are recorded at the time title of goods sold passes to customers, which based on shipping terms, which generally occurs when the product is shipped to the customer and collectability is reasonably assured. Sales are presented net of discounts and allowances. Discounts and allowances are determined when a sale is negotiated. The Company does not grant price adjustments after a sale is complete.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s revenue is primarily derived from the sale of coffee, tea and accessories. The Company records revenue when the amount is fixed or determinable, delivery has occurred or services have been performed and both title and risk of loss have transferred to the customer, and collection is reasonably assured.</p>
</us-gaap:LongDurationContractsRevenueRecognitionPolicy>
<us-gaap:CompensationRelatedCostsPolicyTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>STOCK BASED COMPENSATION</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows FASB ASC 718, <i>Compensation – Stock Compensation</i>, which prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired.  Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights.  Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the unaudited condensed consolidated financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50, <i>Equity–based Payments to Non-Employees</i>.  Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable:  (a) the goods or services received; or (b) the equity instruments issued.  The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the years ended December 31, 2017 and 2016, the Company had stock based compensation <font style="color: black">totaling $2,883,032 and $0, respectively.</font></p>
</us-gaap:CompensationRelatedCostsPolicyTextBlock>
<us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>NEW ACCOUNTING PRONOUNCEMENTS</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2014, the FASB issued ASU No. 2014-09, <i>Revenue from Contracts with Customers (Topic 606) </i>("ASU 2014-09"). ASU 2014-09 affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services, or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). ASU 2014-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company adopted ASU 2014-09 on January 1, 2018. The adoption had no impact on the financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued ASU No. 2016-02, <i>Leases (Topic 842)</i> (“ASU 2016-02”), which modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing key information about leasing arrangements. The amendment is effective from December 15, 2018. The Company adopted ASU 2016-02 on January 1, 2019 along with the “package of practical expedients”. At the time of adoption, the Company recognized ROU assets and liabilities in the amount of $32,616.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2017, the FASB issued ASU 2017-09, <i>Compensation - Stock Compensation (Subtopic 718) Scope of Modification Accounting</i>. The amendments in ASU 2017-09 provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those periods. The Company has determined that <font style="color: black">this </font>ASU will have an immaterial impact <font style="color: black">on its consolidated financial statements.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="color: black">In July 2017, the FASB issued ASU 2017-11, <i>Earnings per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), and Derivatives and Hedging (Topic 815)</i>. The amendments in ASU 2017-11 provide guidance for freestanding equity-linked financial instruments, such as warrants and conversion options in convertible debt or preferred stock, and should no longer be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. The ASU is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those periods. </font>The Company has determined that <font style="color: black">this </font>ASU will have an immaterial impact <font style="color: black">on its consolidated financial statements.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="color: black">In June 2018, the FASB issued ASU 2018-07, <i>Compensation - Stock Compensation (Topic 718): Improvements to Non-Employee Share Based Payment Accounting</i>. The amendments in ASU 2018-07 provide for the simplification of the measurement of share-based payment transactions for acquiring goods and services from non-employees. The ASU is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those periods. </font>The Company has determined that <font style="color: black">this </font>ASU will have an immaterial impact <font style="color: black">on its consolidated financial statements.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2018, the FASB issued ASU 2018-13, <i>Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement</i>. The amendments in ASU 2018-13 provide for increased effectiveness of the disclosures made around fair value measurements while including consideration for costs and benefits. The ASU is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those periods. The Company is currently evaluating the impact the adoption of ASU 2018-13 may have on its consolidated financial statements.</p>
</us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock>
<us-gaap:SubstantialDoubtAboutGoingConcernTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>NOTE 3 - GOING CONCERN</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s consolidated financial statements have been prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred net losses during the years ended December 31, 2017 and 2016, respectively. Cash on hand will not be sufficient to cover debt repayments, operating expenses and capital expenditure requirements for at least twelve months from the consolidated balance sheet date. As of December 31, 2017 and 2016, the Company had working capital deficits. Our historical operating results indicate substantial doubt exists related to the Company’s ability to continue as a going concern. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to seek equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placements, public offerings and/or bank financing necessary to support the Company's working capital requirements. To the extent that funds generated from operations, any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.</p>
</us-gaap:SubstantialDoubtAboutGoingConcernTextBlock>
<us-gaap:EarningsPerSharePolicyTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>NOTE 4 - LOSS PER SHARE</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company utilizes the guidance per ASC 260, <i>Earnings Per Share</i>. Basic earnings per share is calculated on the weighted effect of all common shares issued and outstanding, and is calculated by dividing net income available to common stockholders by the weighted average shares outstanding during the period. Diluted earnings per share, which is calculated by dividing net income available to common stockholders by the weighted average number of common shares used in the basic earnings per share calculation, plus the number of common shares that would be issued assuming conversion of all potentially dilutive securities outstanding, is not presented separately as of December 31, 2017 <font style="color: black">as it is anti-dilutive.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="color: black"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font>Such securities, shown below, presented on a common share equivalent basis and outstanding as of December 31, 2017 and 2016 have been excluded from the per share computations:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="color: black"></font></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="9" style="text-align: center">D<b>ecember 31, </b></td></tr> <tr style="vertical-align: bottom"> <td><b></b></td><td><b> </b></td> <td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>2017</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>2016</b></td><td><b> </b></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Convertible notes payable</td><td style="width: 3%"> </td> <td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$ </td><td style="width: 12%; text-align: right">44,437,745</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Warrants</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt"> </td> <td style="text-align: left">$</td><td style="text-align: right"><p>4,088,874</p> </td><td style="text-align: left; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left">$</td><td style="text-align: right">  </td><td style="text-align: left; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt">Series A preferred stock</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid">$</td><td style="text-align: right; border-bottom: Black 1pt solid">122,251,400</td><td style="text-align: left; padding-bottom: 1pt"></td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid">$</td><td style="text-align: right; border-bottom: Black 1pt solid">  </td><td style="text-align: left; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Total diluted shares</td><td> </td> <td> </td> <td style="text-align: left">$</td><td style="text-align: right">170,778,019 </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">  </td><td style="text-align: left"> </td><td> </td> </tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
</us-gaap:EarningsPerSharePolicyTextBlock>
<us-gaap:InventoryDisclosureTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>NOTE 5 - INVENTORY</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Inventory consisted of the following at December 31, 2017 and 2016: </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="9" style="text-align: center">D<b>ecember 31, </b></td></tr> <tr style="vertical-align: bottom"> <td><b></b></td><td><b> </b></td> <td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>2017</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>2016</b></td><td><b> </b></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left; padding-bottom: 1pt">Finishing goods</td><td style="width: 3%; padding-bottom: 1pt"> </td> <td style="width: 3%; padding-bottom: 1pt"> </td> <td style="width: 1%; text-align: left; border-bottom: Black 1pt solid">$ </td><td style="width: 12%; text-align: right; border-bottom: Black 1pt solid">10,966</td><td style="width: 1%; text-align: left; padding-bottom: 1pt"> </td><td style="width: 3%; padding-bottom: 1pt"> </td> <td style="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</td><td style="width: 12%; text-align: right; border-bottom: Black 1pt solid">100</td><td style="width: 1%; text-align: left; padding-bottom: 1pt"> </td><td style="width: 3%; padding-bottom: 1pt"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Totals</td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">10,966</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">100</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> </tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
</us-gaap:InventoryDisclosureTextBlock>
<us-gaap:PropertyPlantAndEquipmentDisclosureTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>NOTE 6 - PROPERTY AND EQUIPMENT</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">Property and equipment consisted of the following at December 31, 2017 and 2016: </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="9" style="text-align: center">D<b>ecember 31, </b></td></tr> <tr style="vertical-align: bottom"> <td><b></b></td><td><b> </b></td> <td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>2017</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>2016</b></td><td><b> </b></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Equipment</td><td style="width: 3%"> </td> <td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$ </td><td style="width: 12%; text-align: right">74,404</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">32,248</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Less: accumulated depreciation</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid">$</td><td style="text-align: right; border-bottom: Black 1pt solid">(23,187</td><td style="text-align: left; padding-bottom: 1pt">)</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid">$</td><td style="text-align: right; border-bottom: Black 1pt solid">(6,766</td><td style="text-align: left; padding-bottom: 1pt">)</td><td style="padding-bottom: 1pt"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Property and equipment, net</td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">51,217</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">34,229</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> </tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">Depreciation expense for the years ended December 31, 2017 and 2016 was $16,402 and $5,057, respectively.</p>
</us-gaap:PropertyPlantAndEquipmentDisclosureTextBlock>
<us-gaap:BusinessCombinationSeparatelyRecognizedTransactionsTableTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>NOTE 7 - ACQUISITION AND RELATED GOODWILL</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>Acquisition of Cafesa:</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 25, 2017, the Company entered into an agreement to purchase 70% of the issued and outstanding capital stock of Cafesa Co., a Florida corporation that is a coffee wholesaler (the “Acquisition”). The Company will pay a total of $420,000 in cash and stock for the interest in Cafesa. There were two initial cash payments in May and August 2017, followed by eight quarterly payments of cash and stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table summarizes the consideration paid for Cafesa and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date, as well as the fair value at the acquisition date:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="3" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>April 25,</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><font style="font: 10pt Times New Roman, Times, Serif">Consideration:</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 70%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Notes issued for 70% acquisition of Cafesa</font></td><td style="width: 10%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="width: 18%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">420,000</font></td><td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Non-controlling interest</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">180,000</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Total Consideration</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">600,000</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Recognized amounts of identifiable assets acquired and liabilities assumed:</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Tangible assets acquired:</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><font style="font: 10pt Times New Roman, Times, Serif">Cash</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,393</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><font style="font: 10pt Times New Roman, Times, Serif">Inventory</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">6,238</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Property and equipment</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">24,906</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Total tangible assets acquired</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">33,537</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Assumed liabilities:</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Accounts payable and accrued expenses</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">6,617</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Total assumed liabilities</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">6,617</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Net tangible assets/liabilities</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">26,920</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Intangible assets acquired:</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><font style="font: 10pt Times New Roman, Times, Serif">Trademarks</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">7,100</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Customer lists</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">12,000</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Total intangible assets acquired</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">19,100</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">Goodwill recognized</font></td><td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">553,980</font></td><td style="text-align: left; padding-bottom: 2.5pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">    </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>Goodwill:</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At the time of the Acquisition, the Company allocated the purchase price to the assets acquired and liabilities assumed at their estimated fair values as of the date of Acquisition. The excess of the purchase price paid by the Company over the estimated fair value of net assets acquired has been recorded as goodwill. Goodwill represents the value associated with the acquired workforce and synergies related to the merger of the two companies.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company performed its annual assessment of goodwill on December 31, 2017 and determined that a full impairment to goodwill of $553,980 was necessary.<b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Unaudited Pro Forma Financial Information:</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The unaudited pro forma consolidated statements of operations give effect to the acquisition as if it occurred at the beginning of 2016. These unaudited pro forma consolidated statements of operations are prepared by management for informational purposes and are not necessarily indicative of future results or of actual results that would have been achieved had the acquisition been consummated as of the dates presented, and should not be taken as representative of future consolidated results of operations of the Company:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="11" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Year Ended</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="11" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>December 31, 2016</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">(Actual)</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">CAFESA</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">(Proforma)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b>NET REVENUES:</b></font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 46%; text-align: left; text-indent: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Revenues, net</font></td><td style="width: 5%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="width: 11%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">210,508</font></td><td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 5%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="width: 11%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">207,702</font></td><td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 5%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="width: 11%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">418,210</font></td><td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; text-indent: 20pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>TOTAL NET REVENUES</b></font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">210,508</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">207,702</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">418,210</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b>COST OF GOODS SOLD:</b></font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; text-indent: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Cost of goods sold</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">50,512</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">118,545</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">169,057</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; text-indent: 20pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>TOTAL COST OF GOODS SOLD</b></font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">50,512</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">118,545</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">169,057</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b>GROSS PROFIT (LOSS)</b></font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">159,996</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">89,157</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">249,153</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b>OPERATING EXPENSES:</b></font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; text-indent: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">General and administrative expenses</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">142,560</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">40,440</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">183,000</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; text-indent: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Depreciation and amortization</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">5,057</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">  </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">  </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; text-indent: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Payroll and related expenses</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">129,179</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">43,406</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">367,062</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; text-indent: 20pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>TOTAL OPERATING EXPENSES</b></font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">276,796</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">83,846</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">360,642</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b>NET LOSS</b></font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(116,800</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">5,311</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(111,489</font></td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif">)</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b></b></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="11" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Year Ended</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="11" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>December 31, 2017</b></font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">(Actual)</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">CAFESA</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">(Proforma)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b>NET REVENUES:</b></font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; text-indent: 10pt; width: 46%; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Revenues, net</font></td><td style="width: 5%; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="width: 11%; text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">47,418</font></td><td style="width: 1%; text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 5%; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="width: 11%; text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">211,246</font></td><td style="width: 1%; text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 5%; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="width: 11%; text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">258,664</font></td><td style="width: 1%; text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; text-indent: 20pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>TOTAL NET REVENUES</b></font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">47,418</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">211,246</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">258,664</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b>COST OF GOODS SOLD:</b></font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; text-indent: 10pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Cost of goods sold</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">32,146</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">102,204</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">134,350</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; text-indent: 20pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>TOTAL COST OF GOODS SOLD</b></font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">32,146</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">102,204</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">134,350</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b>GROSS PROFIT</b></font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15,272</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">109,042</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">124,314</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b>OPERATING EXPENSES:</b></font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; text-indent: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">General and administrative expenses</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3,257,064</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">30,444</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3,287,508</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; text-indent: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Depreciation and amortization</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">6,114</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">11,040</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">17,154</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; text-indent: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Impairment of goodwill</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">553,980</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">  </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">553,980</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; text-indent: 10pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Payroll and related expenses</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">287,283</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">104,709</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">391,992</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; text-indent: 20pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>TOTAL OPERATING EXPENSES</b></font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">4,104,441</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">146,193</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">4,250,634</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>LOSS FROM OPERATIONS</b></font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">(4,089,169</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">(37,151</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">(4,126,320</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b>OTHER EXPENSE:</b></font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; text-indent: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Interest expense, net</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(309,908</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">  </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(309,908</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; text-indent: 10pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Other (expense) income</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">(4,224,631</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">  </font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">(4,224,631</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; text-indent: 20pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>TOTAL OTHER EXPENSE</b></font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">(4,534,539</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">  </font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">(4,534,539</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>NET LOSS</b></font></td><td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">(8,623,708</font></td><td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">(37,151</font></td><td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">(8,660,859</font></td><td style="text-align: left; padding-bottom: 2.5pt"><font style="font-family: Times New Roman, Times, Serif">)</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
</us-gaap:BusinessCombinationSeparatelyRecognizedTransactionsTableTextBlock>
<us-gaap:IntangibleAssetsDisclosureTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>NOTE 8 - INTANGIBLE ASSETS</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">The expected useful life of intangible assets is 15 years. Intangible assets consisted of the following at December 31, 2017 and 2016: </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="7" style="text-align: center">D<b>ecember 31, </b></td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 56%; text-align: left">Trademarks</td><td style="width: 8%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">7,100</td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Customer lists</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid">$</td><td style="text-align: right; border-bottom: Black 1pt solid">12,000</td><td style="text-align: left; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid">$</td><td style="text-align: right; border-bottom: Black 1pt solid">  </td><td style="text-align: left; padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Subtotal</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid">$</td><td style="text-align: right; border-bottom: Black 1pt solid">19,100</td><td style="text-align: left; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid">$</td><td style="text-align: right; padding-bottom: 1pt">  </td><td style="text-align: left; padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Intangible assets, net</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">19,100</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">  </td><td style="text-align: left; padding-bottom: 2.5pt"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="color: Red; font: 9pt Sans-Serif; margin: 0; text-align: center"><b></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">Amortization expense for the years ended December 31, 2017 and 2016 was $0 and $0, respectively. </p>
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<us-gaap:ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="margin-top: 0; margin-bottom: 0"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="3" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">April 25,</font></td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">2017</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><font style="font: 10pt Times New Roman, Times, Serif">Consideration:</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 70%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Notes issued for 70% acquisition of Cafesa</font></td><td style="width: 10%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="width: 18%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">420,000</font></td><td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Non-controlling interest</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">180,000</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Total Consideration</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">600,000</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Recognized amounts of identifiable assets acquired and liabilities assumed:</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Tangible assets acquired:</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><font style="font: 10pt Times New Roman, Times, Serif">Cash</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,393</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><font style="font: 10pt Times New Roman, Times, Serif">Inventory</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">6,238</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Property and equipment</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">24,906</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Total tangible assets acquired</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">33,537</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Assumed liabilities:</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Accounts payable and accrued expenses</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">6,617</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Total assumed liabilities</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">6,617</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Net tangible assets/liabilities</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">26,920</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Intangible assets acquired:</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td><font style="font: 10pt Times New Roman, Times, Serif">Trademarks</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">7,100</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Customer lists</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">12,000</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Total intangible assets acquired</font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">19,100</font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">Goodwill recognized</font></td><td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left; border-bottom: Black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">553,980</font></td><td style="text-align: left; padding-bottom: 2.5pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td></tr> </table> <p style="margin-top: 0; margin-bottom: 0"> </p>
</us-gaap:ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock>
<us-gaap:LongTermDebtTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>NOTE 9 - CONVERTIBLE NOTES</b> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 28, 2013 and November 19, 2013, the Company issued convertible promissory notes in the amounts of $47,500 and $18,000, respectively. These notes bear interest at a rate of 8% per annum, and the interest rate will increase to 22% if the convertible promissory note is in default. These notes contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 58% of the average of the lowest three trading prices during the last ten day trading period, including the date of conversion. On March 14, 2014, one of the notes for $47,500 was assigned for a premium of $18,624 which was added to convertible note principal. On March 14, 2014, one of the notes for $18,000 was assigned for a premium of $3,920 which was added to convertible note principal, and on July 7, 2015 $9,000 of principal for this note was converted into 2,000,000 shares of common stock at a price of $0.00225 per share. The combined principal amount of these notes at December 31, 2017 and 2016 is $79,044, and the related accrued interest is $18,601, respectively. These notes are currently in default.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 28, 2013 the Company issued a 10% convertible promissory note in the principal amount of $172,000. The note bears interest at a rate of 10% per annum, and the interest rate will increase to 18% if the convertible promissory note is in default. This note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 50% of the closing bid price on the day immediately prior to conversion. The principal amount of this note at December 31, 2017 and 2016 is $172,000, and the related accrued interest is $42,666, respectively. This note is currently in default.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 13, 2017 the Company entered into an unsecured convertible promissory note for $25,000, due on February 13, 2018, bearing interest at 8% per annum. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 55% of the lowest trading price during the last fifteen trading day period, including the date of conversion. The principal amount of the note at December 31, 2017 is $25,000, and the related accrued interest is $1,764, respectively. This note is currently in default.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 13, 2017 the Company entered into an unsecured convertible promissory note for $95,000, due on February 13, 2018, bearing interest at 8% per annum. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 55% of the lowest trading price during the last fifteen trading day period, including the date of conversion. The principal amount of the note at December 31, 2017 is $95,000, and the related accrued interest is $5,830, respectively. This note is currently in default.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 15, 2017 the Company entered into a secured convertible promissory note for $60,000, due on March 15, 2018, bearing interest at 8% per annum and secured by the assets of the Company. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 55% of the lowest trading price during the last fifteen trading day period, including the date of conversion. The principal amount of the note at December 31, 2017 is $60,000, and the related accrued interest is $3,827, respectively. This note is currently in default.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 17, 2017 the Company entered into a secured convertible promissory note for $80,000, due on March 17, 2018, bearing interest at 15% per annum and secured by the assets of the Company. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 45% of the lowest trading price during the last fifteen trading day period, including the date of conversion. The principal amount of the note at December 31, 2017 is $80,000, and the related accrued interest is $9,534, respectively. This note is currently in default.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 17, 2017 the Company entered into an unsecured convertible promissory note for $60,000, due on March 17, 2018, bearing interest at 8% per annum. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 55% of the lowest trading price during the last fifteen trading day period, including the date of conversion. The principal amount of the note at December 31, 2017 is $60,000, and the related accrued interest is $3,814, respectively. This note is currently in default.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 17, 2017 the Company entered into an unsecured convertible promissory note for $25,000, due on March 17, 2018, bearing interest at 15% per annum. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 45% of the lowest trading price during the last fifteen trading day period, including the date of conversion. The principal amount of the note at December 31, 2017 is $25,000, and the related accrued interest is $2,877, respectively. This note is currently in default.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 7, 2017 the Company entered into an unsecured convertible promissory note for $20,000, due on April 7, 2018, bearing interest at 8% per annum. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 55% of the lowest trading price during the last fifteen trading day period, including the date of conversion. The principal amount of the note at December 31, 2017 is $20,000, and the related accrued interest is $1,179, respectively. This note is currently in default.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 3, 2017 the Company entered into an unsecured convertible promissory note for $20,000, due on May 3, 2018, bearing interest at 8% per annum. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 55% of the lowest trading price during the last fifteen trading day period, including the date of conversion. The principal amount of the note at December 31, 2017 is $20,000, and the related accrued interest is $1,065, respectively. This note is currently in default.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 3, 2017 the Company entered into a secured convertible promissory note for $60,000, due on May 3, 2018, bearing interest at 8% per annum and secured by the assets of the Company. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 55% of the lowest trading price during the last fifteen trading day period, including the date of conversion. The principal amount of the note at December 31, 2017 is $60,000, and the related accrued interest is $3,196, respectively. This note is currently in default.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 7, 2017 the Company entered into a secured convertible promissory note for $78,750, due on August 7, 2018, bearing interest at 8% per annum and secured by the assets of the Company. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 55% of the lowest trading price during the last fifteen trading day period, including the date of conversion. The principal amount of the note at December 31, 2017 is $78,750, and the related accrued interest is $2,537, respectively. This note is currently in default.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 13, 2017 the Company entered into a secured convertible promissory note for $60,000, due on September 14, 2018, bearing interest at 8% per annum and secured by the assets of the Company. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 55% of the lowest trading price during the last fifteen trading day period, including the date of conversion. The principal amount of the note at December 31, 2017 is $60,000, and the related accrued interest is $250, respectively. This note is currently in default.</p>
</us-gaap:LongTermDebtTextBlock>
<us-gaap:DebtDisclosureTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>NOTE 12 - LINE OF CREDIT</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has a revolving business credit line of $5,000 with one of its banks with a variable interest rate of 5% above the Prime rate of the respective bank. As of December 31, 2017, and 2016 the balance due on the line of credit was $4,936 and $5,034, respectively. The line of credit is collateralized by a certificate of deposit in the amount of $5,300, which matures on December 8, 2020.</p>
</us-gaap:DebtDisclosureTextBlock>
<us-gaap:Cash contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 30185 </us-gaap:Cash>
<us-gaap:Cash contextRef="AsOf2016-12-31" unitRef="USD" decimals="0"> 314 </us-gaap:Cash>
<us-gaap:AssetsCurrent contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 53762 </us-gaap:AssetsCurrent>
<us-gaap:AssetsCurrent contextRef="AsOf2016-12-31" unitRef="USD" decimals="0"> 2007 </us-gaap:AssetsCurrent>
<us-gaap:OtherPrepaidExpenseCurrent contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 10514 </us-gaap:OtherPrepaidExpenseCurrent>
<us-gaap:OtherPrepaidExpenseCurrent contextRef="AsOf2016-12-31" unitRef="USD" xsi:nil="true"/>
<us-gaap:PropertyPlantAndEquipmentNet contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 51217 </us-gaap:PropertyPlantAndEquipmentNet>
<us-gaap:PropertyPlantAndEquipmentNet contextRef="AsOf2016-12-31" unitRef="USD" decimals="0"> 34248 </us-gaap:PropertyPlantAndEquipmentNet>
<us-gaap:DepositsAssets contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 1200 </us-gaap:DepositsAssets>
<us-gaap:DepositsAssets contextRef="AsOf2016-12-31" unitRef="USD" xsi:nil="true"/>
<us-gaap:FiniteLivedIntangibleAssetsNet contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 19100 </us-gaap:FiniteLivedIntangibleAssetsNet>
<us-gaap:FiniteLivedIntangibleAssetsNet contextRef="AsOf2016-12-31" unitRef="USD" xsi:nil="true"/>
<us-gaap:Assets contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 130579 </us-gaap:Assets>
<us-gaap:Assets contextRef="AsOf2016-12-31" unitRef="USD" decimals="0"> 41555 </us-gaap:Assets>
<us-gaap:MinorityInterest contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 167435 </us-gaap:MinorityInterest>
<us-gaap:MinorityInterest contextRef="AsOf2016-12-31" unitRef="USD" xsi:nil="true"/>
<us-gaap:MinorityInterest contextRef="AsOf2017-04-25" unitRef="USD" decimals="0"> 180000 </us-gaap:MinorityInterest>
<us-gaap:AdditionalPaidInCapital contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 1991817 </us-gaap:AdditionalPaidInCapital>
<us-gaap:AdditionalPaidInCapital contextRef="AsOf2016-12-31" unitRef="USD" decimals="0"> -14077 </us-gaap:AdditionalPaidInCapital>
<us-gaap:CommonStockValueOutstanding contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 61126 </us-gaap:CommonStockValueOutstanding>
<us-gaap:CommonStockValueOutstanding contextRef="AsOf2016-12-31" unitRef="USD" decimals="0"> 50000 </us-gaap:CommonStockValueOutstanding>
<us-gaap:PreferredStockValueOutstanding contextRef="AsOf2017-12-31" unitRef="USD" xsi:nil="true"/>
<us-gaap:PreferredStockValueOutstanding contextRef="AsOf2016-12-31" unitRef="USD" xsi:nil="true"/>
<us-gaap:PreferredStockValue contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 1 </us-gaap:PreferredStockValue>
<us-gaap:PreferredStockValue contextRef="AsOf2016-12-31" unitRef="USD" xsi:nil="true"/>
<us-gaap:Liabilities contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 6686379 </us-gaap:Liabilities>
<us-gaap:Liabilities contextRef="AsOf2016-12-31" unitRef="USD" decimals="0"> 128094 </us-gaap:Liabilities>
<us-gaap:LiabilitiesCurrent contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 6686379 </us-gaap:LiabilitiesCurrent>
<us-gaap:LiabilitiesCurrent contextRef="AsOf2016-12-31" unitRef="USD" decimals="0"> 128094 </us-gaap:LiabilitiesCurrent>
<us-gaap:EmployeeRelatedLiabilitiesCurrent contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 52926 </us-gaap:EmployeeRelatedLiabilitiesCurrent>
<us-gaap:EmployeeRelatedLiabilitiesCurrent contextRef="AsOf2016-12-31" unitRef="USD" decimals="0"> 31811 </us-gaap:EmployeeRelatedLiabilitiesCurrent>
<us-gaap:DerivativeLiabilitiesCurrent contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 4960740 </us-gaap:DerivativeLiabilitiesCurrent>
<us-gaap:DerivativeLiabilitiesCurrent contextRef="AsOf2016-12-31" unitRef="USD" xsi:nil="true"/>
<us-gaap:LinesOfCreditCurrent contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 4936 </us-gaap:LinesOfCreditCurrent>
<us-gaap:LinesOfCreditCurrent contextRef="AsOf2016-12-31" unitRef="USD" decimals="0"> 5034 </us-gaap:LinesOfCreditCurrent>
<us-gaap:LoansPayable contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 417018 </us-gaap:LoansPayable>
<us-gaap:LoansPayable contextRef="AsOf2016-12-31" unitRef="USD" decimals="0"> 77267 </us-gaap:LoansPayable>
<us-gaap:ConvertibleNotesPayable contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 611592 </us-gaap:ConvertibleNotesPayable>
<us-gaap:ConvertibleNotesPayable contextRef="AsOf2016-12-31" unitRef="USD" xsi:nil="true"/>
<us-gaap:AccruedLiabilitiesCurrent contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 99067 </us-gaap:AccruedLiabilitiesCurrent>
<us-gaap:AccruedLiabilitiesCurrent contextRef="AsOf2016-12-31" unitRef="USD" xsi:nil="true"/>
<us-gaap:OtherAccountsPayableAndAccruedLiabilities contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 374155 </us-gaap:OtherAccountsPayableAndAccruedLiabilities>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>RECLASSIFICATION</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and the financial position of the Company.</p>
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<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>NOTE 14 - EQUITY</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2016, GHM granted an aggregate of 23% membership interests in GHM to employees pursuant to employee agreements. The fair value of the membership interests was estimated using a discounted cash flow method and market approach. GHM recorded the fair value of $7,589 as compensation expense for the year ended December 31, 2016.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Preferred Stock</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2017, and 2016, the Company has 19,999,900 and 20,000,000 undesignated shares of preferred stock authorized, no par value, of which nil shares are issued and outstanding.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has designated 100 shares of Series A Preferred Stock for issuance.   Each share of Series A Preferred Stock (i) pays no dividends, (ii) is convertible into a number of common shares equal to 2% of the issued and outstanding shares at the time of conversion, (iii) has no liquidation preference, and (v) has voting rights equal to the number of shares into which they can be converted. For the year ended December 31, 2017, the Company issued 100 shares of Series A Preferred Stock to certain employees and shareholders valued on an as if converted basis.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2017, and 2016, the Company has 10,000,000 authorized shares of Series B Preferred Stock, no par value, of which nil shares are issued and outstanding. The Series B Preferred Stock carries super voting rights at a 1:1 ratio of the entire voting Common Stock eligible to vote at any time until such Series B Preferred shares are either converted, redeemed, liquidated or cancelled. The Series B Preferred Stock is convertible into common stock at a 1:1 ratio (i.e. – one share of common stock issued for each share of Series B Preferred Stock converted).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Common Stock</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2017, and 2016, the Company has 400,000,000 authorized shares of common stock, par value $0.001, of which 61,125,687 and 46,875,687 shares are issued and outstanding, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 5, 2017, as part of the reverse merger, the Company issued 7,375,687 shares of common stock (see Note 1).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 31, 2017, the Company issued a total of 3,750,000 shares of common stock at a price of $0.019 per share, the fair market value on the date of issuance, to two separate third parties for services rendered totaling $71,250.</p>
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<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>NOTE 16 - COMMITMENTS AND CONTINGENCIES</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company evaluates contingencies on an ongoing basis and is not currently a party to any legal proceeding that management believes could have a material adverse effect on our results of operations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Rent is charged at the rate of 50% of retail sales by the hotels where the Company’s kiosks are located and totaled $0 and $95,989 for the years ended December 31, 2017 and 2016, respectively, pursuant to oral agreements with the hotels.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has a one year lease for approximately 225 square feet of office space located at 407 Lincoln Road, Miami Beach, FL 33139. The lease started May 1, 2017 and ended April 30, 2018. The monthly rental payments are $600 per month. This lease was extended on a month to month basis through July 2018 with the same terms.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">Future minimum rentals on non-cancelable leases for the year ending December 31, 2017 are as follows:</p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 88%; padding-right: 0.8pt"><font style="font-size: 10pt">2018</font></td> <td style="width: 1%; padding-right: 0.8pt; text-align: right"> </td> <td style="width: 1%; padding-right: 0.8pt"><font style="font-size: 10pt">$</font></td> <td style="width: 9%; padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">2,400</font></td> <td style="width: 1%; padding-right: 0.8pt"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1.5pt solid; padding-right: 0.8pt"><font style="font-size: 10pt">Thereafter</font></td> <td style="border-bottom: black 1.5pt solid; padding-right: 0.8pt; text-align: right"> </td> <td style="border-bottom: black 1.5pt solid; padding-right: 0.8pt"> </td> <td style="border-bottom: black 1.5pt solid; padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">-</font></td> <td style="border-bottom: black 1.5pt solid; padding-right: 0.8pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="border-bottom: black 9pt double; padding-right: 0.8pt"><font style="font-size: 10pt">Total</font></td> <td style="border-bottom: black 9pt double; padding-right: 0.8pt; text-align: right"> </td> <td style="border-bottom: black 9pt double; padding-right: 0.8pt"><font style="font-size: 10pt">$</font></td> <td style="border-bottom: black 9pt double; padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">2,400</font></td> <td style="border-bottom: black 9pt double; padding-right: 0.8pt"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
</us-gaap:CommitmentsAndContingenciesDisclosureTextBlock>
<us-gaap:SubsequentEventsPolicyPolicyTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>NOTE 17 - SUBSEQUENT EVENTS</b></font></p> <p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 16, 2018, the Company issued 100,000 shares of common stock for services rendered.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 27, 2018, the Company issued 60,000 shares of common stock at a price of $0.05 per share for $3,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 12, 2018, the Company issued 100,000 shares of common stock at a price of $0.05 per share for $5,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 15, 2018, the Company entered into a strategic partnership and services agreement. On February 27, 2018, the Company issued 400,000 shares of common stock for services rendered. In addition to services rendered, the Company received 10,000,000 shares of their partner's common stock. On September 11, 2018, the partner effectuated a 1:250 reverse stock split. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 27, 2018, the Company issued 100,000 shares of common stock at a price of $0.05 per share for $5,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 5, 2018, the Company entered into a convertible promissory note for $302,612 in settlement of previous convertible promissory notes, of which $228,750 was principal and $73,862 was interest accrued through the date of issuance of this note, due on March 5, 2019, bearing interest at 8% per annum, with an original issuance discount of $1,500. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 50% of the closing price on the trading day immediately prior to the conversion date.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 12, 2018, the Company issued 100,000 shares of common stock at a price of $0.05 per share for $5,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 13, 2018 the Company entered into a convertible promissory note for $15,000, due on March 23, 2019, bearing interest at 15% per annum, with an original issuance discount of $1,500. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of the lower of $0.01 per share or 45% of the lowest trading price during the last twenty trading day period, including the date of conversion. In addition to this note, the Company granted 500,000 warrants to purchase common stock at an exercise price of $0.10 per share expiring on March 23, 2023. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 25, 2018, the Company issued to 56,000 shares of common stock at a price of $0.05 per share for $2,800 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 8, 2018, the Company issued to a related party 1 share of Series A preferred stock for $25,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 10, 2018 the Company entered into a secured convertible promissory note for $20,000, due on May 10, 2019, bearing interest at 8% per annum and secured by the assets of the Company. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 55% of the lowest trading price during the last twenty trading day period, including the date of conversion.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 31, 2018, the Company issued to the Company’s accountant 1 share of Series A preferred stock for $25,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 1, 2018, the Company issued to a related party 1 share of Series A preferred stock for $25,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 25, 2018 the Company entered into a secured convertible promissory note for $32,000, due on June 25, 2019, bearing interest at 8% per annum and secured by the assets of the Company. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 55% of the lowest trading price during the last twenty trading day period, including the date of conversion.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 7, 2018 the Company entered into a finance agreement for the purchase of a vehicle totaling $32,529, of which $5,350 was paid on the date of signing. The terms of this agreement include 72 monthly payments of $377 beginning on August 21, 2018 with an annual interest rate of 7.04%.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 9, 2018, the Company entered into a two year lease for office and warehouse space located at 2300 NW 7th Place, Miami, FL 33127. The lease began July 12, 2018 and ends July 1th, 2020. The monthly rental payments are $1,495 per month for year 1 and $1,548 per month for year 2 of the lease.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 25, 2018, the Company issued 65,000 shares of common stock at a price of $0.05 per share for $3,250 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 26, 2018, the Company issued 100,000 shares of common stock at a price of $0.10 per share for $10,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 28, 2018 the Company entered into a finance agreement for the purchase of a vehicle totaling $36,331, of which $4,850 was paid on the date of signing. The terms of this agreement include 72 monthly payments of $437 beginning on September 11, 2018 with an annual interest rate of 8.94%.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 2, 2018, the Company issued 1 share of Series A preferred stock for $25,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 19, 2018, the Company issued 21,000 shares of common stock at a price of $0.05 per share for $1,050 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 2, 2018 the Company entered into a convertible promissory note for $12,500, due on September 1, 2019, bearing interest at 10% per annum. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 55% of the lowest intraday trading price during the last five trading day period, including the date of conversion.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 17, 2018 the Company entered into a secured convertible promissory note for $40,000, due on September 17, 2020, bearing interest at 12% per annum and secured by the assets of the Company. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of $0.02 per share.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 20, 2018, the Company issued 3,000,000 shares of common stock at a price of $0.02 per share for $60,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 20, 2018, the Company issued to a related party 250,000 shares of common stock at a price of $0.02 per share for $5,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On October 26, 2018 the Company entered into a secured convertible promissory note for $100,000, due on October 26, 2020, bearing interest at 12% per annum and secured by the assets of the Company. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of $0.02 per share.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On October 30, 2018 the Company entered into a finance agreement for the purchase of a vehicle totaling $36,981, of which $5,500 was paid on the date of signing. The terms of this agreement include 72 monthly payments of $437 beginning on December 14, 2018 with an annual interest rate of 7.44%.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On October 31, 2018, the Company entered into a five year consulting agreement including a commencement bonus of 100,000 shares of common stock valued at $0.12 per share for a total of $12,000 with an additional 400,000 shares of common stock to be issued after established targets have been achieved.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 4, 2018, the Company issued to a related party a 1/2 share of Series A preferred stock for $12,500 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 7, 2018, the Company issued the Company’s accountant a 1/2 share of Series A preferred stock for $12,500 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 13, 2018 the Company entered into a secured convertible promissory note for $30,000, due on October 26, 2020, bearing interest at 12% per annum and secured by the assets of the Company. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of $0.02 per share.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 31, 2018 the Company entered into a finance agreement for the purchase of a vehicle totaling $35,701, of which $1,500 was paid on the date of signing. The terms of this agreement include 75 monthly payments of $456 beginning on February 14, 2019 with an annual interest rate of 6.99%.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 31, 2018 the Company entered into a secured convertible promissory note for $35,000, due on May 10, 2019, bearing interest at 8% per annum and secured by the assets of the Company. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 55% of the lowest trading price during the last twenty trading day period, including the date of conversion. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 3, 2019, the Company entered into a secured convertible promissory note for $63,309, due on January 3, 2020, bearing interest at 8% per annum and secured by the assets of the Company. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate of 55% of the lowest trading price during the last twenty trading day period, including the date of conversion.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 13, 2019, the Company entered into a two year lease for office and warehouse space located at 761 NW 23 Street, Miami, FL 33127. The lease began February 1, 2019 and ends January 31, 2021. The monthly rental payments are $1,601 per month for year 1 and $1,657 per month for year 2 of the lease.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 6, 2019, the Company issued 100,000 shares of common stock at a price of $0.05 per share for $5,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 25, 2019, the Company issued 150,000 shares of common stock at a price of $0.04667 per share for $7,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 1, 2019, the Company issued 50,000 shares of common stock at a price of $0.05 per share for $2,500 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 12, 2019, the Company entered into a secured promissory note for $50,000, due on July 12, 2019, bearing interest at 8% per annum and secured by 60 shares of Series A preferred stock. This note was further extended through October 12, 2019.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 12, 2019, the Company filed an amendment to their Articles of Incorporation to increase the number of authorized shares of Series A Preferred Stock from 100 shares to 200 shares.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 28, 2019, the Company issued 200,000 shares of common stock at a price of $0.025 per share for $5,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 1, 2019, the Company issued 25,000 shares of common stock at a price of $0.04 per share for $1,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 12, 2019, the Company entered into a secured senior convertible promissory note for $100,000, due on October 26, 2020, bearing interest at 12% per annum and secured by the assets of the Company. This convertible promissory note contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a conversion prices per share of $0.02.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 25, 2019, the Company entered into two secured convertible promissory note for $33,000 each totaling $66,000, due on April 25, 2020, bearing interest at 10% per annum, each with an original issuance discount of $3,000 and secured by the assets of the Company. Both convertible promissory notes contains a provision for conversion at the holder's option including accrued interest, into the Company's common stock at a rate equal to the lower of $.11 per share or 50% of the lowest trading price during the last twenty trading day period, including the date of conversion. In addition to the notes, the Company granted 75,000 warrants to purchase common stock at an exercise price of $0.11 per share expiring on April 25, 2022.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 1, 2019, The Board of Directors approved a bonus to three of the Company's executives in the form of 37 Series A Preferred Shares.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 2, 2019, the Company issued 5,714,286 shares of common stock at a price of $0.035 per share for $200,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 13, 2019, the Company issued 142,857 shares of common stock at a price of $0.035 per share for $5,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 16, 2019, the Company issued 5,714,286 shares of common stock at a price of $0.035 per share for $200,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 21, 2019, the Company issued 2,857,143 shares of common stock at a price of $0.035 per share for $100,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 22, 2019, the Company issued 285,714 shares of common stock at a price of $0.035 per share for $10,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 1, 2019, the Company entered into a six month consulting agreement including a commencement bonus of 250,000 shares of common stock valued at $0.19 per share for a total of $47,500.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 26, 2019, the Company issued 571,429 shares of common stock at a price of $0.035 per share for $20,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 8, 2019, the Company issued 285,714 shares of common stock at a price of $.035 per share of $10,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 18, 2019, the Company issued 285,714 share of common stock at a price of $.035 per share of $10,000 cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 19, 2019, the Company issued 4 shares of Series A Preferred Stock for services rendered.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Management has evaluated all transactions and events after the balance sheet date through the date on which these financials were available to be issued, and except as already included in the notes to these consolidated financial statements, has determined that no additional disclosures are required.</p>
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<us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedInventory contextRef="AsOf2017-04-25" unitRef="USD" decimals="0"> 6238 </us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedInventory>
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<us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedIndefiniteLivedIntangibleAssets contextRef="AsOf2017-04-25" unitRef="USD" decimals="0"> 19100 </us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedIndefiniteLivedIntangibleAssets>
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<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>NOTE 13 - INCOME TAXES</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The provision for income taxes represents estimated federal and state income taxes. From the Company’s inception on August 20, 2015 to February 4, 2017, the Company was not subject to federal and state income taxes since it was operating as a Limited Liability Company. On February 5, 2017, as a result of the reverse merger, the Company became subject to corporate federal and state income taxes as a C corporation. The effective tax rate for the year ended December 31, 2017 was 41% and diverged from the combined federal and state statutory rates strictly due to differences in the tax rates.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Reconciliation between the statutory United States corporate income tax rate and the effective income tax rates based on continuing operations is as follows:</p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> </td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid">Year ended December 31,</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 75%; text-align: justify; padding-left: 5.4pt">Income tax expense at Federal statutory rate of 35%</td><td style="width: 9%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">241,843</td><td style="width: 1%; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-left: 5.4pt">State Income tax expense (benefit), net of Federal effect</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">40,216</td><td style="text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Change in valuation allowance</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(282,059</td><td style="padding-bottom: 1pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt"><font style="font-size: 10pt"> <b>Total</b></font></td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">  </td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td> </tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company did not have a deferred tax asset or liability as of December 31, 2017 and 2016.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2017 the Company has available net operating losses of approximately $731,000 which may be carried forward to apply against future taxable income. These losses will expire carryforward indefinitely. The net operating losses may be subject to limitations under Internal Revenue Code Section 382 should there be a 50% ownership change as determined under regulations. Deferred tax assets related to these losses have not been recorded due to uncertainty regarding their utilization.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The provisions of ASC 740 require companies to recognize in their unaudited consolidated financial statements the impact of a tax position if that position is more likely than not to be sustained upon audit, based upon the technical merits of the position. ASC 740 prescribes a recognition threshold and measurement attribute for the unaudited consolidated financial statement recognition and measurement of a tax position taken or expected to be taken on a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Management does not believe that the Company has any material uncertain tax positions requiring recognition or measurement in accordance with the provisions of ASC 740. Accordingly, the adoption of these provisions of ASC 740 did not have a material effect on the Company’s unaudited consolidated financial statements. The Company’s policy is to record interest and penalties on uncertain tax positions, if any, as income tax expense.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has not filed its applicable Federal and State tax returns for the years ended December 31, 2017 and 2016, and may be subject to penalties for noncompliance. </p>
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<us-gaap:ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="margin-top: 0; margin-bottom: 0"></p> <p style="margin-top: 0; margin-bottom: 0"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid">Year ended December 31,</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 75%; text-align: justify; padding-left: 5.4pt">Income tax expense at Federal statutory rate of 35%</td><td style="width: 9%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">241,843</td><td style="width: 1%; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-left: 5.4pt">State Income tax expense (benefit), net of Federal effect</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">40,216</td><td style="text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Change in valuation allowance</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(282,059</td><td style="padding-bottom: 1pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt"><font style="font-size: 10pt"> <b>Total</b></font></td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">  </td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td> </tr> </table> <p style="margin-top: 0; margin-bottom: 0"></p>
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<us-gaap:CurrentIncomeTaxExpenseBenefit contextRef="From2017-01-01to2017-12-31" unitRef="USD" decimals="0"> 241843 </us-gaap:CurrentIncomeTaxExpenseBenefit>
<us-gaap:CurrentIncomeTaxExpenseBenefit contextRef="From2016-01-01to2016-12-31" unitRef="USD" decimals="0"> 141266 </us-gaap:CurrentIncomeTaxExpenseBenefit>
<us-gaap:IncomeTaxReconciliationStateAndLocalIncomeTaxes contextRef="From2017-01-01to2017-12-31" unitRef="USD" decimals="0"> 40216 </us-gaap:IncomeTaxReconciliationStateAndLocalIncomeTaxes>
<us-gaap:IncomeTaxReconciliationStateAndLocalIncomeTaxes contextRef="From2016-01-01to2016-12-31" unitRef="USD" decimals="0"> 23491 </us-gaap:IncomeTaxReconciliationStateAndLocalIncomeTaxes>
<us-gaap:ValuationAllowanceDeferredTaxAssetChangeInAmount contextRef="From2017-01-01to2017-12-31" unitRef="USD" decimals="0"> -282059 </us-gaap:ValuationAllowanceDeferredTaxAssetChangeInAmount>
<us-gaap:ValuationAllowanceDeferredTaxAssetChangeInAmount contextRef="From2016-01-01to2016-12-31" unitRef="USD" decimals="0"> -164757 </us-gaap:ValuationAllowanceDeferredTaxAssetChangeInAmount>
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<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></font><font style="font: 8pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>BASIS OF PRESENTATION</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s consolidated financial statements and related disclosures for the periods ended December 31, 2017 and 2016, have been prepared using the accounting principles generally accepted in the United States (“GAAP”).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>PRINCIPLES OF CONSOLIDATION</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying financial statements reflect the consolidation of the individual financial statements of Grand Havana, Inc., Grand Havana Master LLC, Unique Underwriters, Inc, and Cafesa Co. All significant intercompany accounts and transactions have been eliminated.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>RECLASSIFICATION</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and the financial position of the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>USE OF ESTIMATES</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions which affect the reporting of assets and liabilities as of the dates of the financial statements and revenues and expenses during the reporting period. These estimates primarily relate to the sales recognition, allowance for doubtful accounts, inventory obsolescence and asset valuations. Actual results could differ from these estimates. Management’s estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the periods they are determined to be necessary.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>FAIR VALUE OF FINANCIAL INSTRUMENTS</u></p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">GAAP requires certain disclosures regarding the fair value of financial instruments. The fair value of financial instruments is made as of a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">GAAP defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal, or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">GAAP establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the degree of subjectivity that is necessary to estimate the fair value of a financial instrument. GAAP establishes three levels of inputs that may be used to measure fair value:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 1 – Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 2 – Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 3 – Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table summarizes our financial instruments measured at fair value as of December 31, 2017:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="15" style="text-align: center"><b>Fair Value Measurements at December 31, 2017</b></td></tr> <tr style="vertical-align: bottom"> <td><b>Liabilities:</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Total</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Level 1</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Level 2</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Level 3</b></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; text-align: left">Convertible notes payable</td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">1,619,049</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">1,619,049</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Warrants</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">3,309,861</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">  </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">  </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">3,309,861</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="15" style="text-align: center"><b>Fair Value Measurements at December 31, 2016</b></td></tr> <tr style="vertical-align: bottom"> <td><b>Liabilities:</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Total</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Level 1</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Level 2</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Level 3</b></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; text-align: left">Convertible notes payable</td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Warrants</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">  </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">  </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">  </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">  </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="7" style="text-align: center"><b>December 31</b></td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid"><b>Description</b></td><td style="padding-bottom: 1pt"><b> </b></td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><b>2017</b></td><td style="padding-bottom: 1pt"><b> </b></td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><b>2016</b></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 56%; text-align: left">Beginning balance</td><td style="width: 8%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Proceeds, payments and conversions</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">736,109</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">  </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Total change in fair value</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid"> </td><td style="text-align: right; border-bottom: Black 1pt solid">4,224,631</td><td style="text-align: left; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid"> </td><td style="text-align: right; border-bottom: Black 1pt solid">  </td><td style="text-align: left; padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Ending balance</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">4,960,740</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">  </td><td style="text-align: left; padding-bottom: 2.5pt"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company uses a multinomial lattice model that values the derivative liability within the convertible notes and warrants based on probability weighted discounted cash flow model. The following assumptions were used for the valuation of the derivative liability related to the convertible notes:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top; text-align: left"> <td style="width: 9%"> </td> <td style="width: 3%"> </td> <td style="width: 88%">The underlying stock price $0.0085 to $.0615 was used as the fair value of the common stock;</td></tr> <tr style="vertical-align: top; text-align: left"> <td> </td> <td> </td> <td>The note face amounts are in the range $12,970 and $172,000 with the same terms as at issuance and effectively convert at discounts in the range of 43.70% to 78.23%.</td></tr> <tr style="vertical-align: top; text-align: left"> <td> </td> <td></td> <td>Capital raising events would not occur in any quarter generating dilutive reset events at prices below the current variable rates for the Notes;</td></tr> <tr style="vertical-align: top; text-align: left"> <td> </td> <td></td> <td>The holder would redeem based on availability of alternative financing, 10% of the time increasing 1.0% monthly to a maximum of 20%;</td></tr> <tr style="vertical-align: top; text-align: left"> <td> </td> <td></td> <td>The holder would automatically convert the note at maturity if the registration was effective and the company was not in default;</td></tr> <tr style="vertical-align: top; text-align: left"> <td> </td> <td></td> <td>An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 20% – to–date many notes are in default and partially converted by the holder’s post assignment;</td></tr> <tr style="vertical-align: top; text-align: left"> <td> </td> <td></td> <td>The projected volatility for each valuation period was based on the volatility of 12 comparable company’s in the same Food Processing industry range from 112% to 243%.</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following assumptions were used for the valuation of the derivative liability related to the warrants: </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top; text-align: left"> <td style="width: 9%"> </td> <td style="width: 3%"> </td> <td style="width: 88%">The holder would automatically exercise the warrants at a stock price above the exercise price at expiration;</td></tr> <tr style="vertical-align: top; text-align: left"> <td> </td> <td> </td> <td>Dilutive reset events (March 15, 2017 to $0.027 and April 7, 2017 to $0.012) projected to occur based on future projected capital needs and projected debt/liability settlements resulting in adjusted warrants to 3,341,691 as of December 31, 2017;</td></tr> <tr style="vertical-align: top; text-align: left"> <td> </td> <td> </td> <td>The projected annual volatility was based on the historical volatility of comparable companies of 123% to 175%;</td></tr> <tr style="vertical-align: top; text-align: left"> <td> </td> <td> </td> <td>Risk-free rates were based on the remaining term</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><u>CASH AND CASH EQUIVALENTS </u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify">The Company considers highly liquid investments with original maturities of three months or less when purchased as cash equivalents. The Company had no cash equivalents as of December 31, 2017 and 2016. At times throughout the year, the Company might maintain bank balances that may exceed Federal Deposit Insurance Corporation insured limits. Periodically, the Company evaluates the credit worthiness of the financial institutions, and has not experienced any losses in such accounts. At December 31, 2017 and 2016, the Company had $0 over the insurable limit.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>ACCOUNTS RECEIVABLE</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. At December 31, 2017 and 2016, the Company has established, based on a review of its outstanding balances, that no allowance is necessary.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>CONCENTRATION OF CREDIT RISK</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Financial instruments, which potentially expose the Company to concentrations of credit risk, are primarily comprised of cash and cash equivalents, investments, accounts receivable and unbilled accounts receivable, if any. The Company places its cash in highly rated financial institutions. Management believes its credit policies reflect normal industry terms and business risk.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>CONVERTIBLE INSTRUMENTS AND DERIVATIVES</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for FASB ASC 815, <i>Derivatives and Hedging</i> (“ASC 815”).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Professional standards generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three 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 otherwise applicable generally accepted accounting principles 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. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument”.</p> <p style="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, 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 discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares 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.</p> <p style="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC 815 provides that, among other things, generally, if an event is not within the entity’s control could or require net cash settlement, then the contract shall be classified as an asset or a liability.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>GOODWILL</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Goodwill represents the excess of cost over net assets of acquired businesses that are consolidated. The Company performs its annual assessment of goodwill on December 31 of each fiscal year and whenever events or changes in circumstances or a triggering event indicate that the carrying amount may not be recoverable. Determining whether a triggering event has occurred often involves significant judgment from management. An entity is permitted to first assess qualitatively whether it is necessary to perform a goodwill impairment test. The quantitative impairment test is required only if the entity concludes that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. The Company determines the fair value of a reporting unit based on an income approach utilizing a discounted cash flow adjusted for entity specific factors. In evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, an entity should consider the totality of all relevant events or circumstances that affect the fair value or carrying amount of a reporting unit. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then an impairment loss equal to the difference is recorded. See Note 7, "Acquisition and Related Goodwill" for further information and discussion.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company performed its annual assessment of goodwill on December 31, 2017 and determined that a full impairment to goodwill of $553,980 was necessary.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>INTANGIBLE ASSETS</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company records intangible assets at cost or based on the fair value of the assets acquired. Intangible assets consist of customer lists and trademarks. The Company amortizes intangible assets over their estimated useful lives or in proportion to expected yearly revenue generated from the intangibles that were acquired.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accordance with ASC 350, <i>Intangibles-Goodwill and Other</i>, the Company assesses intangible assets for potential impairments at the end of each fiscal year, or during the year if an event or other circumstance indicates that we may not be able to recover the carrying amount of the asset. In evaluating goodwill and intangible assets for impairment, the Company first assesses qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount. If the Company concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying value, then no further testing of the intangible assets assigned to the reporting unit is required. However, if the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company will perform a two-step intangible assets impairment test to identify potential intangible assets impairment and measure the amount of intangible assets impairment to be recognized, if any.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In the first step of the review process, the Company compares the estimated fair value of the reporting unit with its carrying value. If the estimated fair value of the reporting unit exceeds its carrying amount, no further analysis is needed. If the estimated fair value of the reporting unit is less than its carrying amount, the Company proceeds to the second step of the review process to calculate the implied fair value of the reporting unit intangible assets in order to determine whether any impairment is required. The Company calculates the implied fair value of the reporting unit intangible assets by allocating the estimated fair value of the reporting unit to all of the assets and liabilities of the reporting unit as if the reporting unit had been acquired in a business combination. If the carrying value of the reporting unit's intangible assets exceeds the implied fair value of the intangible assets, the Company recognizes an impairment loss for that excess amount. In allocating the estimated fair value of the reporting unit to all of the assets and liabilities of the reporting unit, the Company uses industry and market data, as well as knowledge of the industry and the Company’s past experiences.</p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company bases its calculation of the estimated fair value of a reporting unit on the income approach. For the income approach, the Company uses internally developed discounted cash flow models that include, among others, the following assumptions: projections of revenues and expenses and related cash flows based on assumed long-term growth rates and demand trends; expected future investments to grow new units; and estimated discount rates. The Company bases these assumptions on its historical data and experience, third-party appraisals, industry projections, micro and macro general economic condition projections, and its expectations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company had no intangible assets impairment charges for the years ended December 31, 2017 and 2016.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>INVENTORY</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Inventory is stated at the lower of cost or net realizable value using the FIFO method. Inventory consists primarily of only finished goods, which represents the final product ready for sale. A periodic inventory system is maintained by 100% count. Inventory is replaced periodically to maintain the optimum stock on hand available for immediate shipment. The Company assesses whether an inventory reserve is necessary at the end of each fiscal period. For the years ended December 31, 2017 and 2016 no inventory reserve was deemed necessary.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>INCOME TAXES</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company, along with its consolidated subsidiaries, are deemed a corporation and thus is a taxable entity. Prior to the reverse merger on February 5, 2017 the Company filed a U.S. Return of Partnership Income, whereby the members of the Company were taxed on their share of the Company’s taxable income, and the Company was not subject to federal and state income taxes. No provision for income taxes was reflected in the accompanying consolidated financial statements, as the Company did not have income through December 31, 2017. There were no uncertain tax positions that would require recognition in the consolidated financial statements through December 31, 2017.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Generally, federal, state and local authorities may examine the Company’s tax returns for three years from the date of filing, and the current and prior three years remain subject to examination as of December 31, 2017.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analyses of tax laws, regulations and interpretations thereof as well as other factors.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for income taxes under ASC 740-10-30, <i>Income Taxes</i>. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>PROPERTY AND EQUIPMENT</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Property and equipment are recorded at cost. Expenditures for major renewals and improvements are capitalized while expenditures for minor replacements, maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Upon retirement or disposal of assets, the accounts are relieved of cost and accumulated depreciation and the related gain or loss, if any, is reflected in loss on disposal of assets in the consolidated statement of income and comprehensive income.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 27pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At least annually, the Company evaluates, and adjusts when necessary, the estimated useful lives. The changes in estimated useful lives would not have a material impact on depreciation in any period. The estimated useful lives are:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <table cellspacing="0" cellpadding="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="background-color: white"> <td style="vertical-align: top; width: 50%; padding-right: 0.8pt; padding-left: 0.25in; text-align: justify; text-indent: -0.25in"><font style="font-size: 10pt">Equipment</font></td> <td style="vertical-align: bottom; width: 50%; padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">7 years</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>LONG LIVED ASSETS</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company evaluates the carrying value and recoverability of its long-lived assets when circumstances warrant such evaluation by applying the provisions of ASC 360-35, <i>Property, Plant and Equipment, Subsequent Measurement </i>(“ASC 360-35”). ASC 360-35 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>RECOGNITION OF REVENUE</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Sales are recorded at the time title of goods sold passes to customers, which based on shipping terms, which generally occurs when the product is shipped to the customer and collectability is reasonably assured. Sales are presented net of discounts and allowances. Discounts and allowances are determined when a sale is negotiated. The Company does not grant price adjustments after a sale is complete.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s revenue is primarily derived from the sale of coffee, tea and accessories. The Company records revenue when the amount is fixed or determinable, delivery has occurred or services have been performed and both title and risk of loss have transferred to the customer, and collection is reasonably assured.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>STOCK BASED COMPENSATION</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows FASB ASC 718, <i>Compensation – Stock Compensation</i>, which prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired.  Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights.  Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the unaudited condensed consolidated financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50, <i>Equity–based Payments to Non-Employees</i>.  Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable:  (a) the goods or services received; or (b) the equity instruments issued.  The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the years ended December 31, 2017 and 2016, the Company had stock based compensation <font style="color: black">totaling $2,883,032 and $0, respectively.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>NEW ACCOUNTING PRONOUNCEMENTS</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2014, the FASB issued ASU No. 2014-09, <i>Revenue from Contracts with Customers (Topic 606) </i>("ASU 2014-09"). ASU 2014-09 affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services, or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). ASU 2014-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company adopted ASU 2014-09 on January 1, 2018. The adoption had no impact on the financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued ASU No. 2016-02, <i>Leases (Topic 842)</i> (“ASU 2016-02”), which modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing key information about leasing arrangements. The amendment is effective from December 15, 2018. The Company adopted ASU 2016-02 on January 1, 2019 along with the “package of practical expedients”. At the time of adoption, the Company recognized ROU assets and liabilities in the amount of $32,616.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2017, the FASB issued ASU 2017-09, <i>Compensation - Stock Compensation (Subtopic 718) Scope of Modification Accounting</i>. The amendments in ASU 2017-09 provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those periods. The Company has determined that <font style="color: black">this </font>ASU will have an immaterial impact <font style="color: black">on its consolidated financial statements.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="color: black">In July 2017, the FASB issued ASU 2017-11, <i>Earnings per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), and Derivatives and Hedging (Topic 815)</i>. The amendments in ASU 2017-11 provide guidance for freestanding equity-linked financial instruments, such as warrants and conversion options in convertible debt or preferred stock, and should no longer be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. The ASU is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those periods. </font>The Company has determined that <font style="color: black">this </font>ASU will have an immaterial impact <font style="color: black">on its consolidated financial statements.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="color: black">In June 2018, the FASB issued ASU 2018-07, <i>Compensation - Stock Compensation (Topic 718): Improvements to Non-Employee Share Based Payment Accounting</i>. The amendments in ASU 2018-07 provide for the simplification of the measurement of share-based payment transactions for acquiring goods and services from non-employees. The ASU is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those periods. </font>The Company has determined that <font style="color: black">this </font>ASU will have an immaterial impact <font style="color: black">on its consolidated financial statements.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2018, the FASB issued ASU 2018-13, <i>Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement</i>. The amendments in ASU 2018-13 provide for increased effectiveness of the disclosures made around fair value measurements while including consideration for costs and benefits. The ASU is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those periods. The Company is currently evaluating the impact the adoption of ASU 2018-13 may have on its consolidated financial statements.</p>
</us-gaap:SignificantAccountingPoliciesTextBlock>
<us-gaap:FairValueLiabilitiesMeasuredOnRecurringBasisTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="margin: 0pt"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="15" style="text-align: center"><b>Fair Value Measurements at December 31, 2017</b></td></tr> <tr style="vertical-align: bottom"> <td><b>Liabilities:</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Total</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Level 1</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Level 2</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>Level 3</b></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; text-align: left">Convertible notes payable</td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">1,619,049</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">1,619,049</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Warrants</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">3,309,861</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">  </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">  </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">3,309,861</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> </table> <p style="margin: 0pt"> </p>
</us-gaap:FairValueLiabilitiesMeasuredOnRecurringBasisTextBlock>
<GHAV:DerivativeLiabilityRelatedToConvertibleNotes contextRef="From2017-01-01to2017-12-31">
<p style="margin-top: 0; margin-bottom: 0"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="7" style="text-align: center"><b>December 31</b></td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid"><b>Description</b></td><td style="padding-bottom: 1pt"><b> </b></td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><b>2017</b></td><td style="padding-bottom: 1pt"><b> </b></td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><b>2016</b></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 56%; text-align: left">Beginning balance</td><td style="width: 8%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Proceeds, payments and conversions</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">736,109</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">  </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Total change in fair value</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid"> </td><td style="text-align: right; border-bottom: Black 1pt solid">4,224,631</td><td style="text-align: left; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid"> </td><td style="text-align: right; border-bottom: Black 1pt solid">  </td><td style="text-align: left; padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Ending balance</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">4,960,740</td><td style="text-align: left; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: left; border-bottom: Black 2.5pt double">$</td><td style="text-align: right; border-bottom: Black 2.5pt double">  </td><td style="text-align: left; padding-bottom: 2.5pt"> </td></tr> </table> <p style="margin-top: 0; margin-bottom: 0"> </p>
</GHAV:DerivativeLiabilityRelatedToConvertibleNotes>
<GHAV:LoansNet1 contextRef="From2017-01-01to2017-12-31" unitRef="USD" decimals="0"> -80249 </GHAV:LoansNet1>
<GHAV:LoansOutstanding contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 102018 </GHAV:LoansOutstanding>
<us-gaap:ScheduleOfEarningsPerShareBasicByCommonClassTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="margin: 0pt"> </p> <p style="margin: 0pt"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="9" style="text-align: center">D<b>ecember 31, </b></td></tr> <tr style="vertical-align: bottom"> <td><b></b></td><td><b> </b></td> <td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>2017</b></td><td><b> </b></td> <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><b>2016</b></td><td><b> </b></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Convertible notes payable</td><td style="width: 3%"> </td> <td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$ </td><td style="width: 12%; text-align: right">44,437,745</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">  </td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Warrants</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt"> </td> <td style="text-align: left">$</td><td style="text-align: right"><p>4,088,874</p> </td><td style="text-align: left; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left">$</td><td style="text-align: right">  </td><td style="text-align: left; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt">Series A preferred stock</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid">$</td><td style="text-align: right; border-bottom: Black 1pt solid">122,251,400</td><td style="text-align: left; padding-bottom: 1pt"></td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; border-bottom: Black 1pt solid">$</td><td style="text-align: right; border-bottom: Black 1pt solid">  </td><td style="text-align: left; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Total diluted shares</td><td> </td> <td> </td> <td style="text-align: left">$</td><td style="text-align: right">170,778,019 </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">  </td><td style="text-align: left"> </td><td> </td> </tr> </table> <p style="margin: 0pt"> </p>
</us-gaap:ScheduleOfEarningsPerShareBasicByCommonClassTextBlock>
<us-gaap:AccountsReceivableNet contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 2097 </us-gaap:AccountsReceivableNet>
<us-gaap:AccountsReceivableNet contextRef="AsOf2016-12-31" unitRef="USD" decimals="0"> 1593 </us-gaap:AccountsReceivableNet>
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<p style="margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 11 - RELATED PARTY TRANSACTIONS </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 1, 2016, the Company entered into employment agreements with certain key executives with initial terms of five years and call for compensation in cash and equity in the Company as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top; text-align: left"> <td style="width: 25%; border-bottom: Black 1pt solid">Employee</td> <td style="width: 25%; border-bottom: Black 1pt solid">Position</td> <td style="width: 25%; border-bottom: Black 1pt solid">Cash Compensation</td> <td style="width: 25%; border-bottom: Black 1pt solid">Equity Compensation</td></tr> <tr style="vertical-align: top; text-align: left"> <td>Tanya Bredemeier</td> <td>Chairman and COO</td> <td>$ 75,000*</td> <td>25%</td></tr> <tr style="vertical-align: top; text-align: left"> <td>Robert Rico</td> <td>Chief Executive Office </td> <td>$ 125,000</td> <td>10%</td></tr> <tr style="vertical-align: top; text-align: left"> <td>Steve Polisar</td> <td>Chief Legal Officer</td> <td>$ 36,000*</td> <td>30%</td></tr> <tr style="vertical-align: top; text-align: left"> <td>Jorge Moreno</td> <td>Chief Marketing Officer </td> <td>$ 40,000*</td> <td>10%</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">*= Second year compensation will increase by 20% after corporate financing milestones are met.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Additionally, an employment agreement was entered into on May 5, 2017, with Luis Ravelo, Vice President of Operations. The agreement has a one-year renewable term with an annual salary of $104,000. As of December 31, 2017 and 2016 related party payroll liabilities totaled $165,945 and $0, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Certain employees and shareholders were granted shares of Series A preferred stock in 2017. For the years ended December 31, 2017 and 2016 employees and shareholders received a total of 100 shares of Series A preferred stock valued at $2,811,782.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has received loans from related parties for working capital purposes. These unsecured loans bear interest at a rate of 6% per annum and have no repayment terms. For the years ended December 31, 2017 and 2016 the Company was (repaid) loaned a net of $(80,249) and $57,452, respectively. As of December 31, 2017 and 2016 the outstanding balance of these loans is $102,018 and $77,267, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As part of the Cafesa acquisition on April 25, 2017, the Company is required to make cash and stock payments to a related party. For the year ended December 31, 2017, the Company made two cash payments totaling $105,000. As of December 31, 2017, the outstanding balance due to this related party is $315,000.</p>
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<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>NOTE 15 - WARRANTS</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2017, the Company granted a total of 4,088,874 warrants to acquire shares of common stock at a range of $0.01 to $0.03 per share. All tranches of stock purchase warrants were issued to various note holders in connection with the issuance of convertible debt. The intrinsic value of the 4,088,874 warrants as of December 31, 2017 is $147,461.</p> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">A summary of the status of the Company’s warrants as of December 31, 2017 is presented below: </p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 12pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Number of <br />Options and <br />Warrants</td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="3"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Outstanding at December 31, 2016</td><td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">  </td><td style="font-size: 10pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 70%; font-size: 10pt; text-align: justify">Options and warrants granted</td><td style="width: 10%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 18%; font-size: 10pt; text-align: right">4,088,874</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Options and warrants exercised</td><td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">  </td><td style="font-size: 10pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Options and warrants forfeited or expired</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Outstanding at December 31, 2017</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">4,088,874</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.5pt">Exercisable at December 31, 2017</td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">4,088,874</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr> </table> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table summarizes information about warrants as of December 31, 2017: </p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 12pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td colspan="3"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td colspan="11" style="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Warrants <br />Outstanding</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Warrants <br />Exercisable</td></tr> <tr style="vertical-align: bottom"> <td colspan="3" style="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Range of Exercise <br />Prices</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Number <br />Outstanding</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Weighted <br />Average <br />Remaining <br />Contractual <br />Life (in <br />years)</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Weighted <br />Average <br />Exercise <br />Price</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Number <br />Exercisable</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Weighted <br />Average <br />Exercise <br />Price</td></tr> <tr style="vertical-align: bottom"> <td colspan="3"> </td><td> </td> <td colspan="3"> </td><td> </td> <td colspan="3"> </td><td> </td> <td colspan="3"> </td><td> </td> <td colspan="3"> </td><td> </td> <td colspan="3"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 13%; font-size: 10pt; text-align: right"><font style="font-size: 10pt">$0.01 to $0.03</font></td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 13%; font-size: 10pt; text-align: right">4,088,874</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 13%; font-size: 10pt; text-align: right">2.31</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 13%; font-size: 10pt; text-align: right">0.03</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 13%; font-size: 10pt; text-align: right">4,088,874</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 13%; font-size: 10pt; text-align: right">0.03</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">4,088,874</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">2.31</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">0.03</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">4,088,874</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">0.03</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr> </table> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p>
</us-gaap:ScheduleOfStockholdersEquityNoteWarrantsOrRightsTextBlock>
<us-gaap:OperatingLossCarryforwards contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> 731000 </us-gaap:OperatingLossCarryforwards>
<dei:EntityCommonStockSharesOutstanding contextRef="AsOf2019-07-18" unitRef="Shares" decimals="INF"> 82309830 </dei:EntityCommonStockSharesOutstanding>
<GHAV:NotePayableTextBlock contextRef="From2017-01-01to2017-12-31">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 10 - NOTE PAYABLE </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During 2013 and 2014, the Company entered into a promissory note for $88,957 for inventory purchase. The note had no stated term and bears no interest.</p>
</GHAV:NotePayableTextBlock>
<us-gaap:RetainedEarningsAccumulatedDeficit contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> -8776179 </us-gaap:RetainedEarningsAccumulatedDeficit>
<us-gaap:RetainedEarningsAccumulatedDeficit contextRef="AsOf2016-12-31" unitRef="USD" decimals="0"> -122462 </us-gaap:RetainedEarningsAccumulatedDeficit>
<GHAV:TotalGrandHavanaStockholdersDeficit contextRef="AsOf2017-12-31" unitRef="USD" decimals="0"> -6723235 </GHAV:TotalGrandHavanaStockholdersDeficit>
<GHAV:TotalGrandHavanaStockholdersDeficit contextRef="AsOf2016-12-31" unitRef="USD" decimals="0"> -86539 </GHAV:TotalGrandHavanaStockholdersDeficit>
<us-gaap:GoodwillImpairmentLoss contextRef="From2017-01-01to2017-12-31" unitRef="USD" decimals="0"> 553980 </us-gaap:GoodwillImpairmentLoss>
<us-gaap:GoodwillImpairmentLoss contextRef="From2016-01-01to2016-12-31" unitRef="USD" xsi:nil="true"/>
<GHAV:TotalOtherExpense contextRef="From2017-01-01to2017-12-31" unitRef="USD" decimals="0"> -4534539 </GHAV:TotalOtherExpense>
<GHAV:TotalOtherExpense contextRef="From2016-01-01to2016-12-31" unitRef="USD" xsi:nil="true"/>
<dei:EntityPublicFloat contextRef="AsOf2019-06-27" unitRef="USD" decimals="0"> 823721 </dei:EntityPublicFloat>
</xbrli:xbrl>

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