This Quarterly Report on Form 10-Q contains "forward-looking statements" as
defined in Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange
Act, in connection with the Private Securities Litigation Reform Act of 1995
that involve risks and uncertainties, as well as assumptions that, if they never
materialize or prove incorrect, could cause our results to differ materially and
adversely from those expressed or implied by such forward-looking statements
Such forward-looking statements include statements about our expectations,
beliefs or intentions regarding our potential product offerings, business,
financial condition, results of operations, strategies or prospects. You can
identify forward-looking statements by the fact that these statements do not
relate strictly to historical or current matters. Rather, forward-looking
statements relate to anticipated or expected events, activities, trends or
results as of the date they are made and are often identified by the use of
words such as "anticipate," "believe," "continue," "could," "estimate,"
"expect," "intend," "may," or "will," and similar expressions or variations.
Because forward-looking statements relate to matters that have not yet occurred,
these statements are inherently subject to risks and uncertainties that could
cause our actual results to differ materially from any future results expressed
or implied by the forward-looking statements. Many factors could cause our
actual activities or results to differ materially from the activities and
results anticipated in forward-looking statements. These factors include those
risks disclosed under the caption "Risk Factors" included in our 2020 annual
report on Form 10-K filed with the Securities and Exchange Commission, or the
SEC, on April 4, 2022, and in our subsequent filings with the SEC. Furthermore,
such forward-looking statements speak only as of the date of this report. We
undertake no obligation to update any forward-looking statements to reflect
events or circumstances occurring after the date of such statements.
Development of Business
Global Warming Solutions, Inc. ("Company") is an Oklahoma corporation
headquartered in California that develops technologies that help mitigate global
warming while maintaining a retail operation in CBD products. The Company was
formerly known as Southern Investments, Inc., and was domiciled in Oklahoma. On
April 15, 2007, the company changed its name to Global Warming Solutions, Inc.,
and moved its headquarters to the commonwealth of Canada. In February 2021 we
relocated to Temecula, California.
The Company was incorporated on March 30, 1999, as Southern Investments, Inc.
and has not been in bankruptcy, receivership or any similar proceeding. The
Company has never been classified as a shell company.
On April 15, 2007, Southern Investments, Inc. acquired all of the issued and
outstanding stock of Global Warming Technologies, Inc., an Oklahoma corporation,
in exchange for 55,000,000 shares of Southern Investments, Inc. common stock.
Following the acquisition, Southern Investments, Inc. changed its name to Global
Warming Solutions, Inc and the Company implemented a 1 for 10 reverse stock
split of the Company's outstanding common stock that took effect on July 6,
2007.
From 2007-2017 the Company was conducting testing of its fertilizer product made
with Humate Coated Urea (HCU) with various farmers in Canada. Recently the
Company has begun a pilot program in New Zealand with Carbon Company, LTD.
Originally, the Company obtained 11.8% of Carbon Company, LTD which was
transferred to the Company's CEO as compensation for work performed on behalf of
the Company prior to 2018.
On October 23, 2019, the Company acquired the domain name "www.cbd.biz" and
certain other intangible assets in exchange for a convertible promissory note
for $100,000 and began offering hemp-based cannabinoid ("CBD") products through
this website.
On May 8, 2021, the company ceased all operations relating to CBD sales. The
website "www.cbd.biz" has since been shut down. All operations pertaining to CBD
sales have been divested and discontinued. The domain and all other assets
associated with CBD sales was transferred to Green Holistic Solutions, Inc., in
exchange for 18 million shares of Green Holistic Solutions, Inc. Green Holistic
Solutions, Inc., is controlled by Paul Rosenberg and Michael Hawkins, both of
whom are a significant shareholder of the Company.
BUSINESS STRATEGY
Industry Overview
Global Warming Industry
Typically, executives manage environmental risk as a threefold problem of i)
regulatory compliance, ii) potential liability for industrial accidents, and
iii) pollutant release mitigation. But climate change presents business risks
that are different in kind because the impact is global, the problem is
long-term, and the harm is essentially irreversible.
The market for global warming solutions is highly competitive and rapidly
evolving, resulting in a dynamic competitive environment with several dominant
national and multi-national leaders. The Company will have to compete with
established corporations that have substantially greater financial, marketing,
technical and human resource capabilities. Such competition may be able to
undertake more extensive marketing campaigns, adopt more aggressive distribution
policies and make more attractive offers to potential clients. The Company
expects competition to persist and intensify in the future.
12
Table of Contents
Management believes that there is an increasing demand for money-making ideas
created by the warming of our planet and that products and services that slow
the flow of greenhouse gases by using less energy or by substituting clean
energy for fossil fuels are in great demand.
Description of Business
Our current business strategy is to generate revenue through three basic
options: i) consulting fees, ii) royalty fees, and iii) retail sales.
Principal Products
Currently the company has initiated research and development on Hydrogen Fuel
Cell Batteries which they expect to compete directly with the current
Lithium-Ion market.
Patents, Trademarks, Trade Secrets, and Other Intellectual Property
In order to generate revenue from royalties and consulting, we have been
developing technologies for future use and development. There are no assurances
any of these items currently identified as research and development will
materialize or generate revenue for the Company.
We intend to file a provisional patent with the U.S. Patent Office in the first
quarter of 2021 titled Hydrogen Supply Way and Device. This patent will cover
intellectual property developed by us in expanding our business opportunities as
discussed under Recent Events.
We have created various formulas and processes we intend to patent and/or
copyright for future use and licensing. The following list comprise our
intellectual property:
Pick-Up-Oil - is a proprietary carbon sorbent for oil collection. Under the
process, the airborne sorbent is discharged in the oil slick and after absorbing
the oil is collected. The product is then extracted from the oil and available
for secondary use.
Hybrid Electrochemical Energy System - is a patented battery system employing
advanced manufacturing techniques for solid state electrolytes. With large
capacity anode due to special design creating higher specific energy due to air
oxygen acting as a depolarizer we expect much quicker charging times and far
cheaper manufacturing costs.
Exclusive Rights License Technology
Turbine Energy Project - is a patented turbine technology invented and owned by
Dr. Yuri Abramov "Licensor", that increases the efficiency of electrical power
production triggered by wind. Lift force is generated with relatively low wind
force and utilizes changes in temperature and density to generate equivocal
force throughout thus creating perpetual flow. The Company has the right of the
use of the patented technology on a perpetual basis. The Company will pay a 6%
licensing fee until such time as $10 million has been paid to the Licensor at
which time the patent shall be transferred to the Company and the Licensor shall
receive an option for up to 2% of the total issued and outstanding stock.
Growth Strategy
We anticipate growth in our operations through normal acceptance of our
products, through the licensing of our technologies and intellectual properties,
and through acquisitions when deemed in the best interest of our shareholders.
Competition
The Company competes with other industry participants, including those in global
warming and CBD products and services. Market and financial conditions, and
other conditions beyond the Company's control may make it more attractive for
prospective customers to transact business with other entities.
Our potential competitors may have greater resources, longer histories, more
developed intellectual property, and lower costs of operations. Other companies
also may enter into business combinations or alliances that strengthen their
competitive positions.
13
Table of Contents
Recent Events
On May 18, 2022, the Company signed a research and development agreement with
AQST USA, LLC valued at $1.3 million. The agreement is for sixty percent of the
agreement to be paid based on certain milestone deliverables and the balance is
to be paid in Company common stock. As of September 30, 2022, the Company has
paid approximately $295 thousand based on the milestones achieved and is
recorded as a research and development expense.
On April 8, 2021, Mr. Michael Pollastro, 37, was appointed to the Board of
Directors and President of the Company. Also, effective April 8, 2021, Mr.
Vladimir Vasilenko resigned from his position on the Board of Directors and
as Chief Executive Officer of the Company and appointed Chief Scientific
Officer. Mr. Vaslienko's resignation was not based on any disagreement with the
Company on any matter relating to the Company's operations, policies or
practices.
In 2021 the Company has engaged MSP Corporate, a Ukrainian patent agency to file
a patent on behalf of the Company for their mobile system for the production of
hydrogen and electric energy during the movement of automobiles. We believe our
system is more suitable for vehicular applications as it recovers metal sodium
produced by means of circulating electrical current. The Company has no
projections when this project will be complete, when or if the project will be
offered on the market, or if the project will be successful.
In 2020, the Company entered into the initial phase of testing its theory for a
sodium-based battery. The study is in conjunction with a Scientific School in
Kazakhstan. The study's focus is of electrochemical processes in biological
objects. The Company believes that the transfer rate of sodium ions in our solid
electrolyte is sufficient to provide power to the vehicle. The Company has
divided the project into three phases. The end result will be the testing of a
sodium-based battery on a light chassis. The Company has no projections when
this project will be complete, when or if the project will be offered on the
market, or if the project will be successful. The cost associated with this
project has been minimal to date; however, we expect the initial investment to
develop this will be greater than we can self-fund. We are actively seeking to
raise capital through private placement exempt from registration under Rule
506(c).
In December 2020, the Company began developing and designing an ECO APP for
calculating, assessing, monitoring CO2 emissions and reforestation of affected
areas. The application will use satellite imaging and other remote-sensing
technologies to measure real time atmospheric CO2 being absorbed and stored by
trees and other plants across the USA and Europe. The Company is still
evaluating revenue potential opportunities associated with this initiative. The
Company has no projections when this project will be complete, when or if the
project will be offered on the market, or if the project will be successful.
On December 11, 2020, the Company announced it was relocating its headquarters
to Temecula, California in January 2021. In February 2021 we relocated to
Temecula, California.
On December 5, 2020, the Company converted all its outstanding debt into common
stock. Total debt converted was $531,203 at the conversion price of $2.13 per
share. An additional two million shares were issued to three debt holders as
settlement for converting at $2.13 per share instead of $0.01 as outlined in
their various debt instruments. Under the conversions, Paul Rosenberg was issued
1,155,585 shares of common stock, Epic Industry Corp was issued 550,606 shares
of common stock and Overwatch Partners, Inc., was issued 523,899 shares of
common stock.
On December 3, 2020, the Company incorporated Alterna Motors, LLC, a Wyoming
limited liability company, a wholly owned subsidiary of the
Company. Subsequently, Alterna Motors entered into a letter of intent with
Classic Electro, LLC, based in Grodno, Belorussia. It is in the intent of the
parties for Alterna Motors to be the American and Canadian distributor of
Classic Electro's retrofitting engine concept and universal electric mobility
installation kit. The Company has no assurances at this time that this project
will be implemented, that an actual agreement will be entered into, or if this
project will be successful. In addition, Alterna Motors is developing a line of
three-wheeled, all electric local delivery vehicles for use in the USA and
Europe. The Company has no assurances at this time that this project will be
implemented, that an actual agreement will be entered into, or if this project
will be successful. The cost associated with this project has been minimal to
date; however, we expect the initial investment to develop this will be greater
than we can self-fund. We are actively seeking to raise capital through private
placement exempt from registration under Rule 506(c).
On November 17, 2020, the Company's CEO cancelled 12 million shares he owned in
the Company. The CEO received no compensation for such cancellation.
On October 26, 2020, the Company established an advisory committee. The advisory
committee consists of seven members with expertise in the global warming
communities. Each member has agreed to serve on the advisory committee for 2
years. The goal of the advisory committee is to make recommendations to the
company and its scientist in matters within the areas of their experience and
expertise, based upon the members' reasonable research, study, and
analysis. Compensation for serving on the advisory committee is determined by
the board of directors on an individual-by-individual basis based upon the
experience, knowledge and negotiated value. The advisory committee will meet
three times per year.
14
Table of Contents
Results of Operations
Revenue
Our revenue from operations for the three months ended September 30, 2022, and
2021 was $0.
For the nine months ended September 30, 2022, revenue was $0 compared to
$101,724 for the nine months ended September 30, 2021. The difference was
primarily due to decrease in retail sales operations in 2022 as compared to
2021.
Cost of Goods Sold
Our cost of goods sold for the three months ended September 30, 2022, and 2021
was $0.
For the nine months ended September 30, 2022, the cost of goods sold was $0 as
compared to $72,839 for the nine months ended September 30, 2021. The difference
was primarily due to decrease in retail sales operations in 2022 as compared to
2021.
Gross Profit
Our gross profit for the three months ended September 30, 2022, and 2021 was $0.
For the nine months ended September 30, 2022, gross profit was $0 as compared to
$28,886 for the nine months ended September 30, 2021. The difference was
primarily due to decrease in retail sales operations in 2022 as compared to
2021.
Operating Expenses
Our operating expenses for the three months ended September 30, 2022, was
$339,515 compared to $152,804 for the three months ended September 30, 2021.
Our total operating expenses for the three months ended September 30, 2022,
consisted of $146,498 of selling, general and administrative expenses,
professional fees of $12,657, research and development of $176,365, and
amortization expense of $3,995. Our total operating expenses for the three
months ended September 30, 2021, consisted of $16,697 of selling, general and
administrative expenses, professional fees of $104,741, research and development
of $27,416, and amortization expense of $3,951. Our general and administrative
expenses consist of bank charges and other expenses.
For the nine months ended September 30, 2022, operating expenses were $873,427
compared to $357,710 for the nine months ended September 30, 2021. Our total
operating expenses for the nine months ended September 30, 2022, consisted of
$319,476 of selling, general and administrative expenses, professional fees of
$218,049, research and development of $324,047, and amortization expense of
$11,855. Our total operating expenses for the nine months ended September 30,
2021, consisted of $181,611 of selling, general and administrative expenses,
professional fees of $132,907, research and development of $27,416, and
amortization expense of $15,776. Our general and administrative expenses consist
of payroll, professional services, bank charges and other expenses.
Net Operating Income/Loss
Our net operating loss for the three months ended September 30, 2022, was
$263,164 as compared to a net operating loss of $152,804 for the three months
ended September 30, 2021.
Our net loss for the nine months ended September 30, 2022, was $843,405 as
compared to a net loss of $475,627 for the nine months ended September 30,
2021.
Liquidity and Capital Resources
As of September 30, 2022, we had current assets of $177,487, including $47,511
in cash, and current liabilities of $5,654, resulting in a working capital of
$171,833.
In February 2021, we commenced a private placement of 1,000,000 units of our
securities, at a price of $1.25 per unit. Each unit consists of one share of our
common stock and a common stock purchase warrant to purchase one-tenth share of
our common stock, over a five-year period, at an exercise price of $1.75 per
share. As of the date of this report, gross proceeds of $1,145,00 have been
received.
We believe as of the date of this report, we have the working capital on hand,
along with our expected cash flow from operations, to fund our current level of
operations at least through the end of the next twelve months. However, there
can be no assurance that we will not require additional capital. If we require
additional capital, we will seek to obtain additional working capital through
the sale of our securities and, if available, bank lines of credit. However,
there can be no assurance we will be able to obtain access to capital as and
when needed and, if so, the terms of any available financing may not be subject
to commercially reasonable terms.
15
Table of Contents
Cash Flows
Operating Activities
We used cash from operating activities totaling $958,520 during the nine months
ended September 30, 2022 and used cash from operating activities totaling
$479,370 during the nine months ended September 30, 2021. The increase in cash
used in operations was primarily due to an increase in research and development
expenses of $324,047.
Investing Activities
Investing activities during the nine months ended September 30, 2022, consisted
of $359 of equipment purchases, and $2,149 in intangible assets.
Investing activities during the nine months ended September 30, 2021, consisted
of $68,607 of equipment purchases, $16,199 in intangible assets, and $11,800 of
deposits on lease
Financing Activities
Financing activities during the nine months ended September 30, 2022, consisted
of $167,900 of proceeds from the issuance of stock.
Financing activities during the nine months ended September 30, 2021, consisted
of $1,373,630 of proceeds from the issuance of stock and $130,000 of payments on
the repurchase of stock.
Critical Accounting Policies and Estimates
Refer to Note 2, "Summary of Significant Accounting Polices," in the
accompanying notes to the consolidated financial statements for a discussion of
recent accounting pronouncements.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
© Edgar Online, source Glimpses
GLOBAL WARMING SOL 