Form 10-Q Global Warming Solutions For: Jun 30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended June 30, 2021

For the transition period from ___________ to __________

Commission file number 000-53170

28751 Rancho California Road, Suite 100 Temecula, California 92590

 (Address of Principal Executive Offices & Zip Code)

(613) 363-1222

(Registrant’s Telephone Number)

Securities registered pursuant to Section 12(b) of the Act:

 None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒     No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒     No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐     No ☒

Securities registered pursuant to Section 12(b) of the Act: None

As of September 23, 2021, the registrant had 20,251,390 shares of common stock issued and outstanding.

GLOBAL WARMING SOLUTIONS, INC.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1.  Financial Statements

Global Warming Solutions, Inc.

and Subsidiaries

Consolidated Balance Sheets

See accompanying notes to these unaudited consolidated financial statements.

Global Warming Solutions, Inc.

and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

See accompanying notes to these unaudited consolidated financial statements.

Global Warming Solutions, Inc.

and Subsidiaries

Consolidated Statement of Stockholders’ Equity

See accompanying notes to these unaudited consolidated financial statements.

Global Warming Solutions, Inc.

and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

See accompanying notes to these unaudited consolidated financial statements.

Global Warming Solutions, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

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

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 March 12, 2021, 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.

BUSINESS

Development of Business

Global Warming Solutions, Inc. (“Company”) is an Oklahoma corporation headquartered in California that develops technologies to help mitigate the effects of global warming. Formerly maintaining a retail operation in CBD products this has since been divested to focus primarily on climate change solutions. 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.

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.

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.

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. They have also entered into a “Letter of Intent” on a Turbine Energy Project with a Due Diligence period beginning in the second quarter of 2021.

We have no government contracts at this time, nor are we seeking any. Our retail operations will be primarily business to customer, while our consulting and royalty revenues, when earned, will be primarily, business to business.

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.

Our involvement in development projects since revamping our operations in February of 2021 has provided substantial advancements towards our goal in combating climate change. Securing patents and global development projects; has opened the doors to many alternative green energy solutions.

As we continue to create, secure, develop new clean energy technologies, we understand there is a strong demand from our current administration to revolutionize the green energy sector immediately. Our goal has never been to improve existing technologies limitations; but to seek new technologies to revolutionize the industry.

Working closely with scientists worldwide, our advantage to our mission is our ability to search out and locate innovation. We have the ability to expand upon working inventions with additional patent technologies that we own (or seek to own) to truly create green energy solutions that produce more, cost less, and save our planet from the trajectory that our current energy methods have put us on.

Competition

The Company competes with other industry participants, including those in global warming 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.

Recent Events

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 has 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.

Results of Operations

Revenue

Our revenue from operations for the three months ended June 30, 2021, was $336 compared to $38,264 for the three months ended June 30, 2020. The difference was primarily due to the Company ceasing all operations relating to CBD sales in the second quarter of 2021 as compared to 2020. 

For the six months ended June 30, 2021, revenue was $101,724 compared to $68,674 for the six months ended June 30, 2020. The difference was primarily due to increase retail sales operations in the first quarter of 2021 as compared to 2020. 

Cost of Goods Sold

Our cost of goods sold for the three months ended June 30, 2021, was $3,664 as compared to $28,079 for the three months ended June 30, 2020. The difference was primarily due to increase retail sales operations in the first quarter of 2021 as compared to 2020.

For the six months ended June 30, 2021, the cost of goods sold was $72,839 as compared to $52,920 for the six months ended June 30, 2020. The costs of goods consisted of $59,334 in resale products, and $12,719 in commissions, with the remaining $785 in shipping and merchant fees. 

Gross Profit

Our gross profit for the three months ended June 30, 2021, was $(3,328) as compared to $10,185 for the three months ended June 30, 2020.

For the six months ended June 30, 2021, gross profit was $28,886 as compared to $15,754 for the six months ended June 30, 2020. The gross profit represents approximately 28.4% as a percentage of total revenue for the six months ended June 30, 2021 as compared to 22.9% for the six months ended June 30,2020.

Operating Expenses

Our operating expenses for the three months ended June 30, 2021, was $153,724 compared to $16,432 for the three months ended June 30, 2020. Our total operating expenses for the three months ended June 30, 2021, consisted of $141,495 of selling, general and administrative expenses, professional fees of $8,737, and amortization expense of $3,492. Our total operating expenses for the three months ended June 30, 2020, consisted of $(567) of selling, general and administrative expenses, professional fees of $7,832, and amortization expense of $9,167. Our general and administrative expenses consist of payroll, professional services, bank charges and other expenses.

For the six months ended June 30, 2021, operating expenses were $204,906 compared to $25,152 for the six months ended June 30, 2020. Our total operating expenses for the six months ended June 30, 2021, consisted of $164,914 of selling, general and administrative expenses, professional fees of $28,167, and amortization expense of $11,825. Our total operating expenses for the six months ended June 30, 2020, consisted of $653 of selling, general and administrative expenses, professional fees of $7,832, and amortization expense of $16,667. Our general and administrative expenses consist of payroll, professional services, bank charges and other expenses.

Net Loss

Our net loss for the three months ended June 30, 2021, was $157,052 as compared to a net loss of $19,558 for the three months ended June 30, 2020. 

Our net loss for the six months ended June 30, 2021, was $322,823 as compared to a net loss of $31,509 for the six months ended June 30, 2020. The net loss for the six months ended June 30, 2021 includes a derivative expense of $163,640.

Liquidity and Capital Resources

As of June 30, 2021, we had current assets of $860,152, including $822,416 in cash, and current liabilities of $24,155, resulting in a working capital of $835,997. 

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, 916,000 shares of common stock were issued for gross proceeds of $1,145,000 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.

Cash Flows

Operating Activities

We used cash from operating activities totaling $352,117 during the six months ended June 30, 2021 and generated cash from operating activities totaling $2,469 during the six months ended June 30, 2020. The increase in cash used in operations was primarily due to an increase in operating activities.

Investing Activities

Investing activities during the six months ended June 30, 2021 consisted of $60,274 of equipment purchases, $24,472 in intangible assets and $11,800 of deposits on lease.

There was no cash used or provided in investing activities during the six months ended June 30, 2020.

Financing Activities

Financing activities during the six months ended June 30, 2021 consisted of $1,3080,630 of proceeds from the issuance of stock and $50,000 of payments on the repurchase of stock.

For the six months ended June 30, 2020, the cash flows from financing activities consisted of $29,000 of proceed from the issuance of stock and the payment of $29,000 related to a convertible note.

Critical Accounting Policies and Estimates

Refer to Note 2, “Summary of Significant Accounting Polices,” in the accompanying notes to the condensed consolidated financial statements for a discussion of recent accounting pronouncements.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

We are a smaller reporting company as defined by section 10(f)(1) of Regulation S-K. As such, we are not required to provide the information set forth in this item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e), as of the end of the period covered by this report. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that as of June 30, 2019 our disclosure controls and procedures were not effective.

Changes in Internal Control

There were no changes in our internal control over financial reporting during the six months ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 5.  Other Information

None

Item 6. Exhibits

* Filed electronically herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized

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