GOLDEN DEVELOPING SOLUTIONS, INC. The following discussion contains certain statements that may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, "Management's Discussion and Analysis of Financial Condition and Results of Operations." These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this quarterly report on Form 10-Q. The following should also be read in conjunction with the unaudited Financial Statements and notes thereto that appear elsewhere in this report. Company Overview The Company
Golden Developing Solutions, Inc. (the "Company," "we," "our," or "us") was originally incorporated onDecember 17, 1998 in theState of Nevada under the nameAmerican Associates Group . In 2007 the name was changed toClean Hydrogen Producers, Ltd before being changed in April of 2017 toGolden Developing Solutions, Inc. The Company has structured itself in 2017 as a cannabis holding company and intends to make additional acquisitions in the industry in the
near future.
On
On
On
The Termination Agreement provides that Infusionz and all associated members will return the stock consideration granted to them pursuant to the Asset Purchase Agreement. The fair value of the stock consideration to be returned to the Company is approximately$2,600,000 . The Termination Agreement provides that Infusionz will release the Company from the promissory note issued as payment for the assets pursuant to the Asset Purchase Agreement (the "Original Note") and any and all obligations therein. The Termination Agreement provides that the Company will issue two unsecured promissory notes to Infusionz each in the principal amount of$25,000 with neither of these notes being convertible (the "Notes"). The Termination Agreement further provides that the Company will assign, and Infusionz will assume, certain assets and contracts as defined therein. The Notes became effective as of the Closing Date, and both Notes were due and payable onDecember 31, 2020 and remain outstanding as ofSeptember 10, 2021 in the amount of$50,000 . OnSeptember 18, 2018 the Company completed the purchase of all of the assets ofLayer Six Media, Inc. (DBA Where's Weed), an online and mobile cannabis services hub that focuses on fast, secure and efficient discovery and purchasing of cannabis in both recreational and medical markets inthe United States andCanada . The transaction was accounted for as a business combination under ASC 805. 16 OnJanuary 27, 2020 the Company entered into an Asset Purchase Agreement (the "APA") withViath, LLC , aColorado limited liability company ("Viath") controlled by the original sellers of Layer Six, whereby the Company agree to sell the assets and liabilities associated with the Layer Six business.
The APA provides that the Company will sell all of the Layer Six assets to
Viath, along with release from all claims and certain litigation. The
Termination Agreement also provides for the termination of the Employment
Agreements between the Company and each of
The APA also provided that the associated members of Layer Six will return the 170,454,545 shares of common stock consideration granted to them pursuant to the Asset Purchase Agreement. The fair value of the stock consideration to be returned to the Company is approximately$477,273 at the time of the Sale Agreement. These shares were returned to the Company and cancelled inFebruary 2020 . OperationsGolden Developing Solutions, Inc. (the "Company") is developing an online retail business for CBD, hemp oil and health/wellness related products. Through our online retail business, we will offer a broad range of price-competitive products, including traditional vitamins, supplements, and CBD based tinctures, vapes, softgels, among other products.
We will sell our products and services through our Internet website (the "Website"). The Company is developing an online store whose merchandise includes hemp related products, CBD (Cannabidiol) related products and additional products focusing on health and lifestyle.
Initially, we intend to carry in excess of 10 products from two suppliers. We intend to place directed advertising throughout the online store. Advertising will originate through internet or direct-advertising sales by the Company. The company may also use social media outlets such as Facebook, Twitter and Instagram in an effort to attract customers with product specific advertisements or posts.
As an online retail store operating with distribution hub, we will be able to rapidly scale our products and services with minimal marginal costs. Each additional brand, category or product that we add to our platform adds negligible server hosting costs. It also allows us to have a virtual presence and exposure to every regulated cannabis market without establishing a costly physical presence in each state. This minimizes the costs of scaling and required capital while, at the same time, offering a direct role in the cannabis industry without ever touching the plant itself. We are a startup company in the cannabis industry. Our focus is to create online sales and marketing initiatives to build a dominate brand. Our oil and extracts division will focus on online sales of formulated CBD / hemp oil tinctures, softgels, capsules. We have our Website under development and anticipate to be online in the next few months. We are in the process of acquiring trademarks relative to our products. Agreements with raw material suppliers and related products have been obtained. All supply will come domestically with white label agreements when needed. Online Marketing program in place to drive fast paced growth plan in line with industry. Orders will be handled online and shipped via appropriate carriers from our inventory in leased warehouse. Drop shipping may be used during initial launch phases. Customers for CBD/hemp products expect the highest of quality and consistency and pricing is based on those levels. We expect to be price and quality competitive on the higher end of that scale. All product quality is 100% customer satisfaction guaranteed and products not deemed to be of quality can be returned for a refund. Quality and consistency of quality are needed to avoid returned product issues which could result in financial liability. Online payment gateway being established with backup vendor for online payment gateway in place as well. Results of Operations
Three months ended
Selling, General and Administrative Expenses
Selling, general and administrative expenses amounted to$40,257 and$2,035 , respectively for the three months endedSeptember 30, 2021 and 2020, an increase of$38,222 due to additional filing fees in the current period. 17 Professional fees
Professional fees amounted to
Interest expense
Interest expense was
Other Income/Expense
The Company recognized a derivative loss of
Nine months ended
Selling, General and Administrative Expenses
Selling, general and administrative expenses amounted to$45,970 and$417,521 , respectively for the nine months endedSeptember 30, 2021 and 2020, a decrease of$371,551 due to reduction of operations in the current period associated with disposing of the Company's two previous businesses. Professional fees Professional fees amounted to$45,054 and$102,678 respectively for the nine months endedSeptember 30, 2021 and 2020. The decrease of$57,624 was due to reduction of operations in the current period associated with disposing of the Company's two previous businesses. Interest expense
Interest expense was
Other Income/Expense
The Company recognized a gain of$58,617 from extinguishment of liabilities during the nine months endedSeptember 30, 2021 , and a derivative loss of$452,008 compared to a derivative gain of$56,712 during the nine months endedSeptember 30, 2020 . The Company recognized a loss on settlement of leases of$179,684 during the nine months endedSeptember 30, 2020 .
Net Loss From Discontinued Operations
Net income from discontinued operations was
18
Liquidity and Capital Resources
The following is a summary of the Company's cash flows used in operating
activities for the nine months ended
Nine Months ended Nine Months ended
September 30, 2021 September 30, 2020
Net cash used in operating activities from
continuing operations $ (49,827 ) $ (143,981 )
Net cash used in operating activities from
discontinued operations (1,959 )
Net cash used in operating activities (49,827 ) (142,022 )
Net cash used in investing activities from
continuing operations - -
Net cash used in investing activities from
discontinued operations - -
Net cash used in investing activities - -
Net cash used in financing activities from
continuing operations 50,000 37,952
Net cash used in financing activities from
discontinued operations - -
Net cash provided by financing activities 50,000
37,952
Operating Activities
The cash used in operating activities from continuing operations of$49,827 for the nine months endedSeptember 30, 2021 was primarily due working capital and general and administrative expenses during the period. Financing Activities The cash provided by financing activities from continuing operations of$50,000 during the nine months endedSeptember 30, 2021 was from the proceeds of$50,000 from issuance of a convertible note. The cash provided by financing activities from continuing operations of$37,952 during the nine months endedSeptember 30, 2020 was from the proceeds of$37,000 from issuance of a convertible note and proceeds of$20,792 from a previous line of credit, partially offset by repayment of notes payable of$19,840 . We are a public company and as such we have incurred and will continue to incur significant expenses for legal, accounting and related services. As a public entity, subject to the reporting requirements of the Exchange Act of 1934, we incur ongoing expenses associated with professional fees for accounting, legal and a host of other expenses including annual reports and proxy statements, if required. We estimate that these costs will increase over the next few years and may be significantly higher if our business volume and transactional activity increases. These obligations will certainly reduce our ability and resources to expand our business plan and activities. Going Concern As ofSeptember 30, 2021 , the Company had$173 of cash and had no revenue during the three and nine months endedSeptember 30, 2021 to meets its ongoing operating expenses and liabilities of$1,703,297 all of which are due within 12 months. Our auditor has issued a "going concern" qualification as part of its opinion in the Audit Report for the year endingDecember 31, 2020 , and our unaudited financial statements for the quarter endedSeptember 30, 2021 , include a "going concern" note disclosing that our ability to continue as a going concern is contingent on us being able to raise working capital to grow our operations
and generate revenue.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted inthe United States requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. TheSEC has defined a company's critical accounting policies as the ones that are most important to the portrayal of the company's financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. We believe that our estimates and assumptions are reasonable under the circumstances; however, actual results may vary from these estimates and assumptions. 19
Recently Issued Accounting Pronouncements
The Company does not believe that any other recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements.
Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors. Contractual Obligations
As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.
© Edgar Online, source
