Coro Global Inc. - Annual Report: 2020 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number: 033-25126-D

CORO GLOBAL INC.

Registrant’s telephone number, including area code: 866-806-2676

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

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐   No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐   No ☒

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, a 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

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

As of June 30, 2020, the aggregate market value of the voting and non-voting common equity held by non-affiliates was approximately $19.5 million.

As of March 25, 2021, there were 25,413,746 shares of common stock, par value $0.0001 per share, issued and outstanding.

CORO GLOBAL INC.

TABLE OF CONTENTS

PART I

This report may contain forward-looking statements. Investors are cautioned that such forward-looking state to all comments are based on our management’s beliefs and assumptions and on information currently available to our management and involve risks and uncertainties. Forward-looking statements include statements regarding our plans, strategies, objectives, expectations and intentions, which are subject to change at any time at our discretion. Forward-looking statements include our assessment, from time to time of our competitive position, the industry environment, potential growth opportunities and the effects of regulation. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “hopes,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss many of these risks in greater detail in “Risk Factors.” Given these uncertainties, undue reliance should not be placed on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this report. You should read this report and the documents that we reference in this report and have filed as exhibits to the report completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

As used in this Annual Report on Form 10-K and unless otherwise indicated, the terms “we,” “us,” “our,” “Coro,” or the “Company” refer to Coro Global Inc. and its subsidiary. Unless otherwise specified, all dollar amounts are expressed in United States dollars

Item 1. Business.

Coro Global Inc. is a Nevada corporation formed in 2005. Since 2018, we have been in the business of financial technology, also known as Fintech. From March 2018 to January 2020 the Company was known as Hash Labs Inc., a name chosen because of the advanced distributed ledger technology we license which is called hashgraph. Effective January 9, 2020, we changed our name to Coro Global Inc. to align our company name with our primary product.

Our CORO Product Overview

We have developed and commenced commercializing a financial technology product, CORO which uses advanced distributed ledger technology for improved security, speed, and reliability. CORO is a global money transmitter that allows customers to send, receive, and exchange currencies faster, cheaper and more securely, initially consisting of the ability to send, receive and exchange U.S. dollars and gold. Our mission through CORO is to democratize access to gold as sound money. CORO makes it simple, convenient and affordable to use gold as money. The CORO mobile app was completed and released in select U.S. markets in August 2020. Following the initial commercial release, CORO has expanded into new markets and is now licensed, approved and operating in 26 U.S. states plus the District of Columbia and Puerto Rico. CORO intends to expand the release of the app throughout the U.S. in 2021. The Company will also pursue money transmission licenses in foreign countries such as Mexico and Canada.

We believe CORO is the world’s first global payment application that includes gold, the oldest and most trusted money. CORO technology facilitates money transmission and exchange with faster speeds, better security, and lower costs than existing options in the marketplace. An important component of the CORO payment system is our Financial Crime Risk Management (FCRM) solution. We have developed our FCRM platform, with integrated Anti-Money Laundering / Know Your Customer on boarding and transaction monitoring to provide a fully integrated compliance solution for CORO’s compliance department. The solution meets the rigorous demands of government regulators, while supporting our customers. The FCRM technology has been completed and is incorporated within the CORO mobile payment system.

CORO Money Transmitter Business

CORO is a mobile application that allows customers to send and receive USD or XAU. CORO operates on a private permission network which increases the level of security and compliance.

In order to use CORO, customers are required to pass an identity verification and stringent anti-money laundering/know-your customer check, to prevent bad actors from joining and assist in ensuring regulatory compliance. Our FCRM platform will manage on boarding, screening and monitoring of CORO’s customers.

CORO provides its customers with the benefits of speed, security, transparency, and ease of use, as well as the opportunity to transact in dollars or gold on the fastest distributed ledger technology (DLT) on the market.

We believe CORO is solving the following two important problems:

CORO maintains segregated custody accounts to facilitate the flow of funds. One custody account is maintained by the independent vaulting custodian for storage of users’ physical gold. The CORO users’ gold is fully insured at all times. The users’ gold account balances are represented in XAU, the International Organization of Standardization’s currency code for gold where 1 XAU is equal to 1 troy ounce of gold. A separate segregated custody account is a U.S. dollar account held at a FDIC insured U.S. Bank. U.S. dollar account balances are represented in USD, the International Organization of Standardization’s currency code for U.S. dollars.

Customers who download the CORO app and pass the verification process are able to:

We operate as a licensed money transmitter company by allowing users of our mobile app to send and receive monetary value currently in two formats: USD and XAU.

CORO Process

The CORO platform operates as follows:

Legal rights

CORO users will have direct ownership of their allocated gold as follows; such gold ownership will be effectuated contractually through bailment with the vault custodian. Bailment is the act of placing property in the custody and control of another, by an agreement in which the holder (bailee) is responsible for the safekeeping and return of the property. In bailment law, ownership and possession of the gold are split and they merge at the moment of delivery. CORO users have a bailor/bailee relationship with the custodian for the storage of their physical gold. CORO users (bailors) have ownership of the gold and the gold vault custodian (bailee) has authorized possession of the gold.

CORO users will only buy allocated gold with direct ownership. Gold bars are allocated and identifiable for CORO users inside independent custody vault. The gold belongs to the users and is their absolute property. This is evidenced by:

CORO Gold Ownership

When a CORO customer purchases gold through the CORO mobile payment application, the CORO user becomes the legal owner of the gold. CORO instantly routes gold purchase transactions through a gold dealer. Within the CORO app, customers’ U.S. dollars are exchanged for an equivalent amount of gold at the prevailing spot rate. CORO’s spot rate is derived from a number of gold market sources including but not limited to, our gold dealer the Chicago Mercantile Exchange, or CME and the LBMA. The CORO spot rate also includes our spread. Gold purchased by the customer is identified and evidenced by a serial number, or otherwise identified and evidenced with a specific identifier in accordance with the methods used by the auditors of the independent gold vaulting custodian, such as with SKUs/bar codes, and then allocated within CORO’s custody account with the independent gold vaulting custodian. The independent vaulting custodian maintains a bailment arrangement with CORO’s customers, so that the customers have direct ownership of their gold at all times. Our CORO customers’ gold is fully insured by the vaulting custodian. The vaulting custodian will have a daily record of each customer’s gold holdings. Allocated gold is, by definition, unencumbered. In the event of Coro Global Inc. or Coro Corp.’s dissolution or failure, CORO’s customers would not risk becoming creditors of the Company since their ownership of their gold is direct. Coro Corp. through the CORO app and the independent vaulting custodian maintain an inventory list of the allocated customer gold which is updated in real time and reconciled daily. The CORO user’s gold inventory will be physically counted weekly and audited by an independent auditor of the independent gold vaulting custodian on a quarterly basis. The customer’s gold ownership is also recorded, confirmed and evidenced on CORO’s accounting ledger and shared with the independent vaulting custodian. Coro Corp. and the gold vaulting custodian have the right of substitution within the allocated gold. Right of substitution means that when a customer withdraws their gold, Coro Corp. and the gold vaulting custodian may choose which gold to provide the customer, thus the serial number at purchase may be different than the serial number at withdrawal. Right of substitution makes the logistics of gold storage, deposit and withdrawal more pragmatic and is the primary method used for the independent safe custody of all commodities.

Government Regulation

In the United States, money transmission activities are strictly regulated both at the federal level by FinCEN and at the state level by financial institution regulators. Registration with FinCEN is mandatory for all money transmitters and state regulators impose strict requirements to obtain and maintain a license to operate in their jurisdictions. In addition, state regulations covering money transmission provide enhanced protections for the consumers in case of fraud or bankruptcy and require regular examination and review of licensees’ activities.

Coro Corp. is registered with and regulated by FinCEN, a bureau of the U.S. Department of the Treasury. FinCEN regulates Coro Corp. as both a money services business, or MSB, and a Dealer in Precious Metals. As a regulated financial institution, Coro Corp. must assess the money laundering risk involved in its transactions, and implement an anti-money laundering program to mitigate such risk. In addition, we must comply with recordkeeping, reporting, and transaction monitoring requirements under FinCEN regulations.

As a registered money services business, Coro Corp. is required to be licensed in the states where it operates. Coro Corp. is in the process of obtaining individual money transmission licenses state-by-state in the jurisdictions where it plans to provide its services. To date, we have been licensed to operate CORO in the following U.S. states and jurisdictions Alabama, Alaska, Arkansas, Arizona, Delaware, Idaho, Iowa, Florida, Georgia, Massachusetts, Minnesota, Mississippi, Montana, New Hampshire, New Jersey, New Mexico, Ohio, Oklahoma, Oregon, Puerto Rico, Rhode Island, South Carolina, South Dakota, Virginia, Washington, Washington D.C., and Wisconsin. We have launched CORO in the above-mentioned U.S. states and jurisdictions.

In addition to an application process that includes providing a detailed business plan and criminal and financial background check on all officers and controlling parties of the applying company, licensed money transmitters are subjected to strict requirements such as providing annual audited financial statements, filing quarterly reports, and maintaining at all times a minimum net worth and a surety bond approved by the state’s Commissioner. Due to its main office being located in the State of Florida, Coro Corp. filed an initial application for Money Transmitter license (FT2) with the Florida Office of Financial Regulations on October 4, 2019 and obtained its license on March 18, 2020. Since then, Coro Corp. has filed money transmitter license applications in 31 additional states, some of which are still under review by the respective state banking departments. We anticipate that we will receive nationwide money transmitter licensure to operate CORO by the end of 2021.

The Commodity Futures Trading Commission (CFTC) does not regulate Coro Corp. because Coro Corp. only transacts with physical gold in the spot market when buying or selling gold for its customers. The Commodity Exchange Act (CEA) grants the CFTC exclusive jurisdiction over the regulation of futures contracts, option contracts and leverage contracts, but this authority specifically does not extend to “deferred” or “forward” delivery contracts which are essentially “cash transactions providing for later delivery of the underlying commodity.”

To prevent fraud and illegal activities at our money transmission business, we do the following:

CORO Revenue Model

Customers of the CORO product are or will be charged (i) a 0.5% annual custody and storage fee on their XAU balances, (ii) a 0.5% fee to exchange USD for XAU or exchange XAU for USD, (iii) a 0.5% fee for sending XAU to other CORO customers (which fee we waived through 2020 and may waive through the remainder of 2021) and (iv) a 0.5% fee to exchange XAU for delivery of physical gold (when we commence providing this service, which we have not yet done). We collect and charge or, with respect to the fee for sending XAU to other CORO customers and the fee delivery of physical gold, anticipate that we will collect and charge such fees from CORO customers.

CORO Business Milestones

We began development of the CORO mobile application, database, infrastructure and the associated distributed private permissioned DLT network, in September of 2018. Following nearly two years of design, development and testing the CORO mobile application and DLT powered gold payment system was completed and released to the public on August 5, 2020. Having completed the commercial release of CORO, the Company has established new milestones for 2021. These milestones include: 1.) implementation of the digital marketing and customer acquisition program; 2.) continuously improving CORO app performance, functionality and user experience; and 3.) acceleration of the state money transmission licensure program in the U.S. to achieve nationwide licensure, as well as filing money transmission license applications with regulators in Mexico and Canada;

We have relied and continue to rely upon both employees and contractors. CORO’s commercialization and continued enhancement is being led by David Dorr, the Founder and recently appointed CEO of the Company, and Brian Dorr, the Co-founder and recently appointed COO of the Company. They will continue the coordination of our technology development resources and team of consultants. We intend to increase our technology development team during 2021, as we continue to improve the functionality and performance of the CORO mobile application.

As of March 23, 2021 the CORO app has had 9,092 downloads of which 1,641 have become verified users. There are 4,950 individuals on our waiting list in states where we are pending approval of our money transmission licenses. Upon our receipt of money transmission licenses in those states, these individuals will then have the opportunity to become verified users.

Hashgraph License

CORO is built on a new generation of DLT utilizing the Hashgraph consensus algorithm, (“Hashgraph”). We believe Hashgraph is superior to the current generation of DLT. Hashgraph is owned by Swirlds, Inc., (“Swirlds”). In July 2020, we entered into an amended and restated software license agreement with Swirlds to license Hashgraph.

DLT is disrupting and transforming existing markets in multiple industries. However, we believe there are four fundamental obstacles to be overcome before DLT can be widely accepted and adopted across every industry and geography. These obstacles are:

Performance: The technology is built on Hashgraph, which provides near-perfect efficiency in bandwidth usage and consequently can process upwards of 500,000 transactions per second. To put the speed of our network in perspective, Visa’s network handles an estimated 35,000 transactions per second.

Security: Hashgraph achieves the highest standard for security in the field of distributed consensus: asynchronous Byzantine Fault Tolerance (aBFT). Other networks that use coordinators, leaders, or communication timeouts tend to be vulnerable to Distributed Denial of Service (DDoS) attacks against those vulnerable areas. Hashgraph is resilient to these types of attacks and achieves the theoretical limits of security. Achieving this level of security at scale is a fundamental advance in the field of distributed systems as it is the gold standard for security in this category.

Regulatory Compliance: The Hashgraph technical framework includes an Opt-In Escrow Identity mechanism that gives customers a choice to bind verified identities to otherwise anonymous accounts, which is designed to provide governments with the oversight necessary to ensure regulatory compliance. This is optional, and each user will be able to decide what kinds of credentials, if any, to reveal.

Hashgraph accomplishes being fair, fast, efficient, inexpensive, timestamped, and DDoS resistant.

Our Hashgraph private-permissioned network provides the strongest foundation for CORO. We believe it will enable the CORO product to achieve unprecedented speed with fractional cost per transaction, all while maintaining or exceeding current bank-grade security.

Intellectual Property

In addition to our right to the use of Hashgraph as discussed above, our intellectual property currently includes our trademark “CORO” for a mobile application for certain financial and computer software services. We have a pending trademark registration application for “CORO” in the United States and several additional countries.

Marketing, Communications and Growth Strategy

During the first half of 2020 we made a significant investment of time and resources in completion of a comprehensive growth strategy for marketing, communications and customer acquisition. Our strategy follows a growth marketing approach, with rapid experimentation across marketing channels and product development paths to determine the most effective and sustainable way to acquire and retain customers. Our go-to market strategy fuses data analysis and behavioral research to identify key customer segments. Under this strategy, user experience/user interface design optimization, highly targeted advertising, thought leadership, and PR tactics are implemented to acquire customers efficiently and build trust, which is our main brand pillar. Our growth plan was divided into 2 main stages – the pre-commercial launch stage and the post-launch stage. Our pre-launch stage was dedicated to garnering interest and enthusiasm from prospective CORO customers via digital marketing efforts. We have now embarked upon the post-launch stage, which is divided into traction, transition and growth sub-stages. During the traction sub-stage which we are now in, we are simply building momentum for growth.

We are focusing on finding product/market fit and growing our brand. Finding product/market fit means that we are getting early users, gathering their feedback and optimizing our product based on that feedback. Once we see signs that our business has gained market share and mindshare from our target audience we will scale our efforts and move into the transition sub-stage. During the transition sub-stage, we will take the information we gathered during traction and build up towards growth mode.

We will optimize and scale marketing channels that work for us. We will optimize customer acquisition costs and gain more insights into their lifetime value. We will also focus on scaling our marketing team. When we enter the growth sub-stage, we will be ready to deploy our growth engine and prove that it works. Our goal here will be to maximize our value proposition and achieve exponential growth.

Using a combination of qualitative and quantitative methods, we conducted extensive research and discovery to set success metrics, recognize future growth initiatives, develop audience profiles, and assess the competition landscape and market conditions.

Under our marketing and sales strategy, we have taken the following steps:

Employees

As of March 23, 2021, we have 2 full-time employees and retain approximately 16 consultants. We consider our relationship with our employees and consultants to be good.

Item 1A. Risk Factors.

An investment in the Company’s common stock involves a high degree of risk. Our business, operating results and financial condition could be harmed and the value of our stock could go down as a result of the risk factors described below. This means shareholders could lose all or a part of their investment.

Risks Related to Our Business

We have a limited operating history under our current business focus, and we may not succeed.

We have a limited operating history, in particular under our current business focus, and we may not succeed. We released CORO, our first product under our current business focus, in select US markets in August 2020. You should consider, among other factors, our prospects for success in light of the risks and uncertainties encountered by companies that, like us, are in their early stages. For example, unanticipated expenses, problems, and technical difficulties may occur and they may result in material challenges to our business. We may not be able to successfully address these risks and uncertainties or successfully implement our operating strategies. If we fail to do so, such failure could have a material adverse effect on our business, financial conditions and results of operation. We may never generate significant revenues or achieve profitability.

We may not succeed in commercializing CORO or any future product.

We commenced commercializing our CORO product in August 2020 and we have begun generating revenues. We may face difficulties or delays in the commercialization of CORO or any future products, which could result in our inability to timely offer products or services that satisfy the market.

We may encounter significant competition and may not be able to successfully compete.

There are many financial technology companies developing money transmission products, and more competitors are likely to arrive. Some of our competitors have considerably more financial resources than us, and the backing of traditional large financial institutions. As a result, we may not be able to successfully compete in our market, which could result in our failure to successfully commercialize CORO, or otherwise fail to successfully compete. There can be no assurances that we will be able to compete successfully in this environment.

The distributive ledger technology on which CORO relies may be the target of malicious cyberattacks or may contain exploitable flaws in its underlying code, which could result in security breaches and the loss or theft of funds. If such attacks occur or security is compromised, this could expose us to liability and reputational harm and could seriously curtail the utilization of CORO, resulting in customers reducing their use of CORO, or stopping their use of CORO altogether.

The structural foundation, the software applications and other interfaces or applications upon which CORO relies are unproven, and there can be no assurances that CORO and the creating, transfer or storage of data and funds will be uninterrupted or fully secure, which could result in impermissible transfers, and a complete loss of a customer’s data and funds. CORO may be subject to a cyberattack, software error, or other intentional or negligent act or omission that results in the theft of funds, funds being lost, destroyed or otherwise compromised. Further, CORO (and any technology on which we rely) may also be the target of malicious attacks from hackers or malware distributors seeking to identify and exploit weaknesses in the software, which could result in the loss or theft of data and funds. If such attacks occur or security is compromised, this could expose us to liability and reputational harm and could seriously curtail the utilization of CORO, resulting in customers reducing their use of CORO or stopping their use altogether, which could have a material adverse effect on our business, financial condition and results of operations.

We may not be able to raise capital as needed to develop our products or maintain our operations.

We expect that we will need to raise additional funds to execute our business plan and expand our operations. Additional financing may not be available to us on favorable terms, or at all. If we cannot raise needed funds on acceptable terms, our business and prospects may be materially adversely affected.

We may face risks of Internet disruptions, which could have an adverse effect on the use of our products.

A disruption of the Internet may affect the use of our products. Generally, our products are dependent upon the Internet. A significant disruption in Internet connectivity could disrupt network operations until the disruption is resolved.

Exchange rates are continuously changing and can be volatile. CORO customers will be exposed to this risk.

The price of gold is continuously changing and has exhibited periods of volatility throughout history. Customers that choose to maintain gold balances (which would be in XAU, the International Organization of Standardization’s currency code for gold.) but have personal liabilities in U.S. dollars (USD) will be exposed to this potential volatility and could incur significant gains or losses when converting from XAU back to USD. This may make CORO less appealing to prospective customers.

CORO is not a market maker and thus will not guarantee a fixed bid/ask spread or guarantee that a bid or an ask will be available to customers. CORO will be reliant on the financial institutions with whom it interacts to facilitate its services.

CORO will be dependent upon the bid/ask spread as provided by large gold dealers and London Bullion Market Association, or LBMA members. In times of market turbulence, it is possible that the bid/ask spread could widen significantly thus increasing the cost of transacting between XAU and USD. This may make CORO less appealing to prospective customers.

Changes in general economic and business conditions, internationally, nationally and in the markets in which we operate, could have an adverse effect on our business, financial condition, or results of operations.

Our operating results may be subject to factors which are outside of our control, including changes in general economic and business conditions, internationally, nationally and in the markets in which we operate. Such factors could have a material adverse effect on our business, financial condition, or results of operations.

In addition, disruptions in the credit and financial markets, declines in consumer confidence, increases in unemployment, declines in economic growth and uncertainty about earnings could have a significant negative impact on the U.S. and global financial and credit markets and the overall economy. Such events could have an adverse impact on financial institutions resulting in limited access to capital and credit for many companies. Furthermore, economic uncertainties make it very difficult to accurately forecast and plan future business activities. Changes in economic conditions, changes in financial markets, deterioration in the capital markets or other factors could have an adverse effect on our financial position, revenues, results of operations and cash flows and could materially adversely affect our business, financial condition and results of operations.

Our operations will significantly rely on our team of managers, advisors, and technical personnel.

The successful operation and development of our business will be dependent primarily upon the operating and management skills of our managers, advisors, and technical personnel. The loss of the services of any one of our key personnel, in particular our Chief Executive Officer, David Dorr, and Chief Operating Officer, Brian Dorr, could have a material adverse impact on our ability to realize our objectives, including our ability to complete development of, launch and commercialize our planned products, which could have a material adverse effect on our business, financial condition and results of operations.

If we fail to protect our intellectual property and proprietary rights, we could lose our ability to compete.

Our intellectual property, which currently includes our trademark for “CORO” (registration pending) and our license for use of Hashgraph (see “Business—Hashgraph License”), and proprietary rights are essential to our ability to remain competitive and successful in the development of our products and our business. We expect to rely on a combination of trademark, copyright, and trade secret laws as well as confidentiality agreements and procedures, non-competition agreements, and other contractual provisions to protect our intellectual property, other proprietary rights, and our brand. Our intellectual property rights may be challenged, invalidated or circumvented by third parties. We may not be able to prevent the unauthorized disclosure or use of our technical knowledge or other trade secrets by employees or competitors. If we do not adequately protect our intellectual property or proprietary rights, our competitors could use it to enhance their products, compete against us, and take our market share. Our inability to adequately protect our intellectual property could adversely affect the Company’s business, financial condition and results of operations.

Other companies may claim that we infringe their intellectual property.

We do not believe that our technologies infringe, or will infringe, on the proprietary rights of any third party, but claims of infringement are becoming increasingly common and third parties may assert infringement claims against us in the future. It may be difficult or impossible to identify, prior to receipt of notice from a third party, the trade secrets, patent position or other intellectual property rights of a third party. If CORO or any future products we may sell were found to infringe on other parties’ proprietary rights and we are unable to come to terms regarding a license with such parties, we may be forced to modify our products to make them non-infringing or to cease to offer such products altogether, which could adversely affect our business, financial condition and results of operations.

We have an evolving business model.

As financial technologies become more widely available, we expect the services and products associated with them to evolve. In order to stay current with the industry, our business model may need to evolve as well. From time to time, we may modify aspects of our business model relating to our product mix and service offerings. Any such modifications we may make may not be successful and may result in harm to our business. We may not be able to manage growth effectively, which could damage our reputation, limit our growth and negatively affect our operating results.

The Covid-19 pandemic may negatively affect our operations.

The COVID-19 pandemic is having widespread, rapidly evolving, and unpredictable impacts on global society, economies, financial markets, and business practices. The continuing impacts of COVID-19 are highly unpredictable and could be significant, and may have an adverse effect on our business, operations and our future financial performance.

The impact of the pandemic on our business, operations and future financial performance could include, but is not limited to, that:

If we fail to comply with anti-money laundering laws, it may harm our business.

We are subject to various anti-money laundering and counter-terrorist financing laws and regulations that prohibit, among other things, our involvement in transferring the proceeds of criminal activities. Regulators in the U.S. and other regulators globally continue to increase their scrutiny of compliance with these obligations, which may require us to further revise or expand our compliance program, including the procedures we use to verify the identity of our customers and to monitor transactions. In addition to laws in the United States, other countries in which we plan to operate also have anti-money laundering and counter-terrorist financing laws and regulations, and we may be required to make changes to our compliance program in various jurisdictions in response. Such changes could have the effect of making compliance more costly and operationally difficult to manage, lead to increased friction for customers, and result in a decrease in business. Non-compliance with anti-money laundering laws may subject us to significant fines, penalties, lawsuits, and enforcement actions, result in regulatory sanctions and additional compliance requirements, increase regulatory scrutiny of our business, restrict our operations or damage our reputation and brand.

Risks Related to Our Common Stock

There is not an active, liquid market for our common stock, and investors may find it difficult to buy and sell our shares.

Our common stock is not listed on any national securities exchange. Accordingly, investors may find it more difficult to buy and sell our shares than if our common stock was traded on an exchange. Although our common stock is quoted on the OTCQB, it is an unorganized, inter-dealer, over-the-counter market which provides significantly less liquidity than the Nasdaq Capital Market or other national securities exchange. Further, there is little reported trading in our common stock. These factors may have an adverse impact on the trading and price of our common stock.

The market price of our common stock is likely to be highly volatile and subject to wide fluctuations.

In the event a more active market for common stock develops, we anticipate that the market price of our common stock will be highly volatile and could be subject to wide fluctuations in response to a number of factors that are beyond our control, including:

Our common stock has in the past been, and may in the future be considered a “penny stock” and thus be subject to additional sale and trading regulations that may make it more difficult to buy or sell.

Our common stock, which is traded on the OTCQB has in the past been, and may in the future be considered a “penny stock.” Securities broker-dealers participating in sales of “penny stock” are subject to the “penny stock” regulations set forth in Rules 15g-2 through 15g-9 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

We do not intend to pay dividends on our common stock for the foreseeable future.

We have paid no dividends on our common stock to date and we do not anticipate paying any dividends to holders of our common stock in the foreseeable future. While our future dividend policy will be based on the operating results and capital needs of the business, we currently anticipate that we will retain any earnings to finance our future expansion and for the implementation of our business plan. Investors should take note of the fact that a lack of a dividend can further affect the market value of our common stock, and could significantly affect the value of any investment in the Company.

Our articles of incorporation allow for our board to create new series of preferred stock without further approval by our stockholders, which could adversely affect the rights of the holders of our common stock.

Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors has the authority to issue up to 10,000,000 shares of our preferred stock without further stockholder approval. As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders of preferred stock the right to our assets upon liquidation, or the right to receive dividend payments before dividends are distributed to the holders of common stock. In addition, our board of directors could authorize the issuance of a series of preferred stock that has greater voting power than our common stock or that is convertible into our common stock, which could decrease the relative voting power of our common stock or result in dilution to our existing stockholders. Although we have no present intention to issue any shares of preferred stock or to create any series of preferred stock, we may create such series and issue such shares in the future.

Additional stock offerings in the future may dilute then-existing shareholders’ percentage ownership of the Company.

Given our plans and expectations that we will need additional capital and personnel, we anticipate that we will need to issue additional shares of common stock or securities convertible or exercisable for shares of common stock, including convertible preferred stock, convertible notes, stock options or warrants. The issuance of additional securities in the future will dilute the percentage ownership of then current stockholders.

Ownership of our common stock is highly concentrated.

Our executive officers, directors, and principal stockholders beneficially own an aggregate of approximately 78% of our outstanding common stock (see “Security Ownership of Certain Beneficial Owners and Management”). As a result, such principal stockholders will be able to exert significant control over the election of the members of our board of directors, our management, and our affairs, and other corporate transactions (such as mergers, consolidations, or the sale of all or substantially all of our assets) that are submitted to shareholders for approval, and their interests may differ from the interests of other stockholders.

Item 1B. Unresolved Staff Comments.

Not required for smaller reporting companies.

Item 2. Properties.

We are party to a 12 month lease that commenced March 1, 2021 under an arrangement with WeWork, for office space located at 78 SW 7th St, Suite 500, Miami, FL 33130. Our current monthly rent is approximately $2,000. We believe these facilities are suitable and adequate to meet our current business requirements.

Item 3. Legal Proceedings.

We are not party to any material legal proceedings, and our property is not the subject of any material legal proceedings.

Item 4. Mine Safety Disclosures.

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock is quoted under the symbol “CGLO” on the OTCQB tier of the OTC Markets. There is little trading activity in our common stock.

As of March 25, 2021, there were approximately 1,181 holders of record of our common stock.

Dividend Policy

The Company has never declared or paid any cash dividends on its common stock and does not expect to pay any cash dividends for the foreseeable future.

Securities Authorized for Issuance Under Equity Compensation Plans

In January 2019, the Company adopted the Company’s 2019 Equity Incentive Plan. 2,400,000 shares are available for awards under the plan. The plan was approved by the Company’s stockholders in February 2019.

The following table provides equity compensation plan information as of December 31, 2020:

Recent Sales of Unregistered Securities

In the three months ended December 31, 2020, we issued and sold an aggregate of 22,000 shares of common stock to accredited investors for a purchase price of $5.00 per share for aggregate gross proceeds of $110,000.

On December 31, 2020, we issued 7,500 shares of common stock to each of our three independent directors for services as directors.

On December 31, 2020, we issued 13,500 shares of common stock to consultants for services. 

In connection with the foregoing, we relied upon the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, for transactions not involving a public offering.

Purchases by Issuer and Its Affiliates

None.

Item 6. Selected Financial Data.

Not required for smaller reporting companies.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described. This discussion should be read in conjunction with our Consolidated Financial Statements and the related notes included in Item 8 of this Form 10-K. This discussion contains forward-looking statements. Please see the explanatory note concerning “Forward-Looking Statements” in Part I of this Annual Report on Form 10-K and Item 1A. Risk Factors for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.

Results of Operations for the years ended December 31, 2020 and 2019

Revenues

In August 2020 the Company successfully launched the Coro mobile payment application on a commercial basis. The Coro app is available for users to download in the Apple Store and Google Play. The Company generated nominal transaction revenues of $694 during the year ended December 31, 2020.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the year ended December 31, 2020 were $4,269,390, an increase of $433,842 or approximately 10% compared to selling, general and administrative expenses of $3,835,548 for the year ended December 31, 2019. The increase in expense was mainly attributable to higher legal, professional and consulting fees during the year ended December 31, 2020. In addition, during the year ended December 31, 2020 the Company incurred advertising costs of $295,538 compared to $8,994 for the year ended December 31, 2019, as the Company prepared to launch its CORO product. This was partially offset by a decrease in stock compensation due to consulting fees of $1,300,163 to $1,417,128 for the year ended December 31, 2020 from stock compensation expense of $2,717,291 for the year ended December 31, 2019.

Development Expense

Development expenses for the year ended December 31, 2020 were $1,084,705 compared to $997,620 for the year ended December 31, 2019. We incurred higher development expenses, including fees paid to vendors, for our CORO product during the year ended December 31, 2020 compared to the year ended December 31, 2019 as we expanded development of our CORO product.

Interest Expense

Interest expense on debentures for the years ended December 31, 2020 and 2019, were $165,000 and $17,211, respectively. Interest expense during the year ended December 31, 2020 included the expense for issuing 33,000 shares of common stock valued at $165,000 for the extension of a loan to a then-related party.

Net Loss

For the reasons stated above, our net loss for the year ended December 31, 2020 was ($5,518,401) or ($0.20) per share, an increase of $668,022 or 12%, compared to net loss of ($4,850,379), or ($0.21) per share, for the year ended December 31, 2019.

Liquidity and Capital Resources

As of December 31, 2020, we had cash of $735,547, compared to cash of $470,800 as of December 31, 2019. Net cash used in operating activities for the year ended December 31, 2020 was $3,238,165. Our current liabilities as of December 31, 2020 of $685,751 consisted of: $534,223 for accounts payable and due to customers of $151,528.

Net cash used in investing activities for the year ended December 31, 2020 was $2,506 compared to $0 for the year ended December 31, 2019. During the year ended December 31, 2020 the Company purchased office equipment.

During the year ended December 31, 2020 we entered into and closed subscription agreements with accredited investors pursuant to which we sold to the investors an aggregate of 737,000 shares of common stock, for a purchase price of $5.00 per share, and aggregate gross proceeds of $3,685,000. We repaid $180,382 of outstanding principal of a note payable from a then-related party. The balance at December 31, 2020 was $0. During the year ended December 31, 2019 we entered into and closed subscription agreements with accredited investors pursuant to which the Company sold to the investors an aggregate of 482,000 shares of common stock, for a purchase price of $5.00 per share, and aggregate gross proceeds of $2,410,000.

During the next twelve months, we anticipate that we will incur approximately $5,200,000 of general and administrative expenses in order to execute our current business plan. We also plan to incur significant sales, marketing, research and technical development expenses during the next 12 months. We must obtain additional financing to continue our operations. We may not be able to obtain additional funding on terms that are favorable to us or at all. We may not be able to obtain sufficient funding to continue our operations, or if we do receive funding, to generate adequate revenues in the future or to operate profitably in the future. These conditions raise substantial doubt about our ability to continue as a going concern.

Critical Accounting Policies and Estimates

Revenue Recognition

Effective January 1, 2018, we recognize revenue in accordance with Accounting Standards Codification 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific revenue recognition guidance throughout the Industry Topics of the Accounting Standards Codification. The updated guidance states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also provides for additional disclosures with respect to revenues and cash flows arising from contracts with customers. The standard was effective for the first interim period within annual reporting periods beginning after December 15, 2017, and we adopted the standard using the modified retrospective approach effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial statements.

Stock-Based Compensation

We account for all compensation related to stock; options or warrants using a fair value-based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. We use the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued using the market price of the stock on the date of the related agreement.

Recently Issued Accounting Pronouncements

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on our financial position, results of operations or cash flows.

In February 2016, the FASB issued ASU 2016-02, Leases, which amended current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard was effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of this ASU did not have a material impact on our balance sheet.

Management does not believe that any other recently issued but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

Off Balance Sheet Arrangements

We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk.

Not required for smaller reporting companies.

Item 8. Financial Statements.

CORO GLOBAL INC.

CONTENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

Coro Global Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Coro Global Inc, and its subsidiary (collectively, the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Matter

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements. We determined that there are no critical audit matters.

/s/ MaloneBailey, LLP

www.malonebailey.com

We served as the Company’s auditor from 2016 through 2019 and were re-engaged in 2020.

Houston, Texas

March 31, 2021

Coro Global Inc.

Consolidated Balance Sheets

The accompanying notes are an integral part of these consolidated financial statements.

Coro Global Inc.

Consolidated Statements of Operations

The accompanying notes are an integral part of these consolidated financial statements.

Coro Global Inc.
Consolidated Statements of Changes in Stockholders’ Equity (Deficit)
For the Years Ended December 31, 2020 and 2019

The accompanying notes are an integral part of these consolidated financial statements.

Coro Global Inc.

Consolidated Statements of Cash Flows

The accompanying notes are an integral part of these consolidated financial statements.

Coro Global Inc.

Notes to the Audited Consolidated Financial Statements

For The Years Ended December 31, 2020 and 2019

NOTE 1 — BUSINESS, GOING CONCERN AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements present the balance sheets, statements of operations, changes in stockholders’ equity (deficit) and cash flows of the Company. The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America.

Principle of Consolidation

The accompanying financial statements present on a consolidated basis the accounts of the Company and its wholly owned subsidiary, Coro Corp., which was organized in the State of Nevada on September 14, 2018.

All significant intercompany accounts and transactions have been eliminated in consolidation.

Nature of Business Operations

Coro Global Inc. is a Nevada corporation that was originally formed on November 1, 2005. On September 14, 2018 the Company formed a wholly owned subsidiary, Coro Corp. The Company is focused on dynamic global growth opportunities in the financial technology (Fintech) industry. Effective January 9, 2020, the Company changed its name to Coro Global Inc. The Company has developed a Fintech product that uses advanced distributed ledger technology for improved security, speed, and reliability. In August 2020 the Company released its CORO payment product and commenced its commercialization.

Covid-19 Pandemic

The Company’s operations have been materially and adversely impacted by the Covid-19 pandemic. The Company is located in Dade County, Florida which was subject to a “stay at home” order effective March 26, 2020, and which was lifted effective May 20, 2020. The effect of Covid-19 on the business has since been limited to experiencing delays in obtaining registrations and/or licenses from various state governmental agencies due to staff being temporarily suspended or working remotely.

Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company reported net losses of $5,518,401 and $4,850,379 for the years ended December 31, 2020 and 2019, respectively. The losses raise substantial doubt about the Company’s ability to continue as a going concern.

We will need to raise additional capital in order to continue operations. The Company’s ability to obtain additional financing may be affected by the success of its growth strategy and its future performance, each of which is subject to general economic, financial, competitive, legislative, regulatory and other factors beyond the Company’s control. Additional capital may not be available on acceptable terms, or at all. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms.

Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail or cease our operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. These financial statements do not include any adjustments that might arise from this uncertainty.

Cash and Cash Equivalents

For purposes of these financial statements, cash and cash equivalents includes highly liquid debt instruments with maturity of less than three months.

Restricted cash are funds that belong to the Company’s clients and is held at financial institutions.

Concentrations of Credit Risk

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments with high credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit. Currently our operating accounts are approximately $120,000 above the FDIC limit.

Advertising

The Company follows the policy of charging the costs of advertising to expense as incurred. The Company incurred $295,358 and $8,994, respectively for advertising costs for the years ended December 31, 2020 and 2019.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Property and Equipment

Property and equipment are stated at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives being 3 years up to 5 years.

Computer and equipment costs consisted of the following:

Depreciation expense was $2,031 and $1,993 respectively for the years ended December 31, 2020 and 2019, respectively.

Revenue Recognition

Effective January 1, 2018, the Company recognizes revenue in accordance with Accounting Standards Codification 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific revenue recognition guidance throughout the Industry Topics of the Accounting Standards Codification. The updated guidance states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also provides for additional disclosures with respect to revenues and cash flows arising from contracts with customers. As of December 31, 2020 the Company recorded a liability of $151,528 for amounts owed to customers for the purchase of gold.

Fair Value of Financial Instruments

Cash, Receivables, Prepaid and Other Current Assets, Accounts Payable, Accrued Salaries and Wages and Other Current Liabilities.

The carrying amounts of these items approximated fair value.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, Financial Accounting Standards Board (“FASB”) ASC Topic 820-10-35 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements).

Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

Impairment of Long Lived Assets

In accordance with Accounting Standards Codification (“ASC”) 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets, long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. ASC 360-10 relates to assets that can be amortized and the life can be determinable. The Company reviews property and equipment and other long-lived assets for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the asset’s carrying amount to future undiscounted net cash flows the assets are expected to generate. Cash flow forecasts are based on trends of historical performance and management’s estimate of future performance, giving consideration to existing and anticipated competitive and economic conditions. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future cash flows arising from the assets or their fair values, whichever is more determinable.

Leases

In February 2016, the FASB issued ASU 2016-02, Leases, which amended current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of this ASU did not have a material impact on our balance sheet.

Net Loss per Share

Basic and diluted loss per share amounts are computed based on net loss divided by the weighted average number of common shares outstanding. Convertible shares, if converted, totaling 0 were not included in the computation of diluted loss per share because the assumed conversion and exercise would be anti-dilutive as there were no potentially dilutive instruments as of December 31, 2020 and 2019.

Management Estimates

The presentation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.

Stock Based Compensation

The Company accounts for employee compensation related to stock, options or warrants using a fair value-based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company accounts for nonemployee compensation related to stock, options or warrants using a fair value-based method whereby compensation cost is measured at the earlier of a commitment date or completion of services based on the value of the award and is recognized over the service period. The Company uses the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued using the market price of the stock on the measurement date.

Reclassifications

Certain 2020 balances have been reclassified in the 2019 financial statement presentation. The reclassification of accrued interest did not have any effect on the financial statements.

Recent Accounting Pronouncements

All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.

2. DEFERRED STOCK-BASED COMPENSATION - RELATED PARTY

Effective May 18, 2018, the Company appointed J. Mark Goode as the President and Chief Executive Officer of the Company. He was also appointed a member and Chairman of the Board of Directors of the Company.

The Company entered into an employment agreement on May 18, 2018 with Mr. Goode, which provided for an annual salary and certain other benefits. Pursuant to the employment agreement, Mr. Goode’s annual base salary was $96,000, which could be increased to up to $216,000 upon Mr. Goode meeting certain milestones set forth in the employment agreement related to the Company’s performance and was subject to increases as set from time to time by the Board. Upon the execution of the employment agreement, Mr. Goode received 500,000 shares of common stock of the Company valued at $1,250,000 ($2.50 per share). Pursuant to the initial terms of the employment agreement, after one year of employment by the Company as the Chief Executive Officer, the Company agreed to issue to Mr. Goode additional shares of common stock of the Company equal to 1% of the outstanding shares of the Company at the time of such issuance; after two years of employment by the Company as the Chief Executive Officer, the Company agreed to issue to Mr. Goode additional shares of common stock of the Company equal to 1% of the outstanding shares of the Company at the time of such issuance; and after three years of employment by the Company as the Chief Executive Officer, the Company agreed to issue to Mr. Goode additional shares of common stock of the Company equal to 1% of the outstanding shares of the Company at the time of such issuance. As of December 31, 2018 the Company accrued $300,995 in accordance with ASC 718-10-55-65 for the portion earned as the terms of such an award do not establish an ownership relationship because the extent to which (or whether) the employee benefits from the award depends on something other than changes in the entity’s share price. Therefore, the awards should be accounted for as a liability award. ASC 718 requires that public companies measure share-based awards classified as liabilities at fair value at each reporting date. In accordance with 718-30-35-3, a public entity shall measure a liability award under a share-based payment arrangement based on the award’s fair value re-measured at each reporting date until the date of settlement. Compensation cost for each period until settlement shall be based on the change (or a portion of the change, depending on the percentage of the requisite service that has been rendered at the reporting date) in the fair value of the instrument for each reporting period.

On May 31, 2019, the Company entered into amendment no. 1 to the Company’s employment agreement with Mr. Goode. Pursuant to the amendment, the Company’s obligation to issue additional shares of common stock as compensation to Mr. Goode was amended, such that, the Company issued to Mr. Goode and his designee 750,000 shares of common stock upon execution of the amendment, and the Company had no further obligation to issue to Mr. Goode shares under the employment agreement. Mr. Goode would have been required to return such 750,000 shares to the Company as follows:

On May 31, 2019 the Company recorded the conversion of deferred compensation to common stock of $2,162,408 for the issuance of these shares to additional paid in capital and common stock. The Company recorded $300,995 for the additional value of the common stock for the vesting of the award during the year ended December 31, 2019. The Company recorded $622,107 for the additional value of the common stock for the vesting of the award during the year ended December 31, 2020. As of December 31, 2020 and December 31, 2019 the unvested amount of the awards was $171,285 and $900,589, respectively.

On December 29, 2020, the Company entered into amendment No. 2 to the Company’s employment agreement with J. Mark Goode. Pursuant to the amendment, Mr. Goode’s employment with the Company continued until January 31, 2021, and Mr. Goode agreed to resign as President, Chairman, and Chief Executive Officer of the Company effective December 31, 2020. From the period January 1, 2021 to January 31, 2021 Mr. Goode was entitled to his base salary and any other regular compensation under the employment agreement and agreed to assist the Company in the Company’s transition to a new Chief Executive Officer. Mr. Goode agreed that he would return 250,000 shares of the Company’s common stock if he were not serving as Chief Executive Officer of the Company as of December 30, 2020, and agreed to return 62,500 shares of common stock to the Company upon expiration of the employment agreement on January 31, 2021. On December 31, 2020, Mr. Goode submitted his resignation as Director, President and Chief Executive Officer of the Company, effective at 11:59 p.m. on December 31, 2020.

3. NOTES PAYABLE – RELATED PARTY

On July 15, 2016, the Company issued a 7% promissory note to a significant shareholder in the principal amount of $100,000. The note had an initial one-year term. On April 9, 2019, the maturity date of the note was extended to June 30, 2019. On April 12, 2019, the Company entered into an exchange agreement with The Vantage Group Ltd. (“Vantage”), which held the note, pursuant to which Vantage exchanged a portion of this note, in the amount of $50,000, for 10,000 newly issued shares of common stock of the Company. The Company repaid the remaining balance of $50,000. Vantage is owned by Lyle Hauser, formerly the Company’s largest stockholder.

The changes in this note payable to related party are reflected in the following at December 31, 2020 and December 31, 2019:

On January 14, 2019, the Company entered into an exchange agreement with Lyle Hauser. Pursuant to the exchange agreement, Mr. Hauser exchanged an outstanding convertible promissory note of the Company in the aggregate amount of $70,382 (including accrued interest) held by Mr. Hauser for a new non-convertible promissory note of the Company in the principal amount of $70,382. On April 7, 2020, the maturity date of outstanding notes held by Lyle Hauser, consisting of (i) a promissory note, dated on or about January 14, 2019, in the original principal amount of $70,384, as amended by amendment No. 1 thereto, dated April 9, 2019, amendment No. 2 thereto, dated July 3, 2019, amendment No. 3 thereto, dated October 1, 2019, and amendment no. 4 thereto, dated January 17, 2020; and (ii) an original issue discount promissory note, dated on or about February 28, 2019, in the original principal amount of $110,000 (of which $100,000 had been repaid, leaving an outstanding balance of $10,000), as amended by amendment No. 1 thereto, dated April 9, 2019, amendment No. 2 thereto, dated July 3, 2019, amendment No. 3 thereto, dated October 1, 2019, and amendment No. 4 thereto, dated January 17, 2020, was extended to June 30, 2020. In consideration for the extension of the maturity date of the notes, the Company issued to the designee of Lyle Hauser 33,000 shares of common stock. From April 1, 2020 to December 31, 2020, the Company repaid $73,382 of the notes due to Lyle Hauser. On July 27, 2020 the maturity date of the note dated January 14, 2019 was extended to September 30, 2020. As of December 31, 2020 and December 31, 2019, the note dated January 14, 2019 had a balance of $0 and accrued interest of $5,438.

On February 28, 2019, the Company issued a promissory note in the principal amount of $110,000 to Lyle Hauser with an original issue discount of $10,000, for a purchase price of $100,000. The note had a 0% interest rate until maturity and had an original maturity date of March 31, 2019, which was extended to June 30, 2020. Following the maturity date, the note would bear a 9% annual interest rate until paid in full. During the year ended December 31, 2020 the Company repaid a total of $110,000. As of December 31, 2020 and December 31, 2019, the note had a balance of $0 and $110,000, respectively.

The Company evaluated the modification under ASC 470-50 and concluded the deletion of the conversion qualifies for debt modification which triggered debt extinguishment; however, there was no impact to the income statement as there was no unamortized discounts or other fees paid on the under the prior debt terms.

4. INTELLECTUAL PROPERTY

In September 2017, the Company entered into and closed an asset purchase agreement with Vantage. Pursuant to the asset purchase agreement, the Company purchased from Vantage a software application referred to as Dino Might and related intellectual property. As consideration for the purchase, the Company issued to Vantage 7,000 shares of newly created Series C Preferred Stock, valued at $820,451, and granted to Vantage a revenue sharing interest in the Dino Might asset pursuant to which the Company agreed to pay to Vantage, for the Company’s 2017 fiscal year and the following nine years, 30% of the revenue generated by the Dino Might asset. In 2017 the Company recognized an impairment loss of $818,472, on the transaction based on the future discounted cash flows over the next three years. As of December 31, 2020 and December 31, 2019, the Dino Might asset balance was $1,979.

Intellectual property is stated at cost. When retired or otherwise disposed, the related carrying value and accumulated amortization are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. Minor additions and renewals are expensed in the year incurred.

5. EQUITY

On September 29, 2017, the Company filed a Certificate of Designation of Series C Preferred Stock with the Secretary of State of Nevada (the “Series C Certificate of Designation”). The Company authorized 7,000 shares of preferred stock as Series C Preferred Stock. The Company issued 7,000 shares of Series C Preferred Stock on September 29, 2017. All outstanding shares of Series C Preferred Stock were converted to common stock in April 2018. No shares of Series C Preferred Stock are outstanding as of December 31, 2020 and December 31, 2019, and no such shares may be re-issued.

On May 18, 2018, the Company appointed J. Mark Goode as the new President and Chief Executive Officer of the Company, effective May 18. 2018. He was also appointed a member and Chairman of the Board of Directors of the Company. The Company entered into an employment agreement on May 18, 2018 with Mr. Goode, which provided for an annual salary and certain other benefits. Pursuant to the employment agreement, Mr. Goode’s annual base salary was $96,000, which could be increased to up to $216,000 upon Mr. Goode meeting certain milestones set forth in the employment agreement related to the Company’s performance and was subject to increases as set from time to time by the Board. Upon the execution of the employment agreement, Mr. Goode was issued 500,000 shares of common stock of the Company valued at $1,250,000 ($2.50 per share).

On May 31, 2019, the Company entered into amendment no. 1 to the Company’s employment agreement with Mr. Goode. Pursuant to the amendment, the Company’s obligation to issue additional shares of common stock as compensation to Mr. Goode was amended, such that, the Company issued to Mr. Goode and his designee 750,000 shares of common stock upon execution of the amendment, and the Company had no further obligation to issue to Mr. Goode shares under the employment agreement. Mr. Goode would have been required to return such 750,000 shares to the Company as follows:

On May 31, 2019 the Company recorded the conversion of deferred compensation to common stock of $2,162,408 for the issuance of these shares to additional paid in capital and common stock. The Company recorded $300,995 for the additional value of the common stock for the vesting of the award during the year ended December 31, 2019. The Company recorded $622,107 for the additional value of the common stock for the vesting of the award during the year ended December 31, 2020. As of December 31, 2020 and December 31, 2019 the unvested amount of the awards was $171,285 and $900,589, respectively.

On December 29, 2020, the Company entered into amendment No. 2 to the Company’s employment agreement with J. Mark Goode. See Note 2.

During the year ended December 31, 2020, 500,000 shares of common stock issued to Mr. Goode vested.

During the year ended December 31, 2020, the Company entered into securities purchase agreements with accredited investors pursuant to which the Company issued and sold an aggregate of 737,000 shares of common stock for an aggregate purchase price of $3,685,000.

On April 7, 2020, the maturity date of outstanding notes held by Lyle Hauser was extended to June 30, 2020. See Note 3. In consideration for the extension of the maturity date of the notes, the Company issued to the designee of Lyle Hauser 33,000 shares of common stock valued at $165,000 ($5.00 per share).

On June 24, 2020, the board of directors of the Company adopted a compensation program for independent directors. Under the program, independent directors will be entitled to a quarterly cash fee of $7,500 and 7,500 shares of common stock on a quarterly basis (each due and payable quarterly in arrears).

Between January 1, 2020 and December 31, 2020, the Company issued a total of 68,500 shares of common stock valued at $342,500 ($5.00 per share) to various consultants for consulting and business development.

Between January 1, 2020 and December 31, 2020, the Company issued a total of 22,500 shares of common stock valued at $106,875 ($4.75 per share) to a consultant for business development services.

Between January 1, 2020 and December 31, 2020, the Company issued a total of 5,000 shares of common stock valued at $24,750 ($4.95 per share) to a consultant for business development services.

Between January 1, 2020 and December 31, 2020, the Company issued a total of 45,000 shares of common stock valued at $213,750 ($4.75 per share) to the Company’s three independent directors for services as directors

On June 22, 2020, the Company issued, to a consultant for services, six-month warrants to purchase 30,000 shares of common stock with an exercise price of $0.01. The warrants were exercised and the Company recognized an expense of $149,700 ($5.00 per share), the current fair value for common stock.

On June 22, 2020, the Company issued to Niquana Noel, the Company’s then-chief operating officer, for services provided, six-month warrants to purchase 50,000 shares of common stock, with an exercise price of $0.01. The warrants were exercised and the Company recognized an expense of $249,500 ($5.00 per share), the current fair value for common stock.

6. COMMITMENTS AND CONTINGENCIES

In December 2018, we entered into a software license agreement with Swirlds to license Hashgraph for the Coro platform, and on June 23, 2020, the agreement was amended and restated (as amended, the “Swirlds Agreement”). Pursuant to the Swirlds Agreement, the Company extended its license from Swirlds of Hashgraph technology for use in the Company’s Coro payment platform. The term and fees of such license will be as set forth in any applicable order form. In connection with the Swirlds Agreement, the Company and Swirlds executed an order form (the “Order Form”), which amends, restates and supersedes the order form between the Company and Swirlds dated December 13, 2018, whereby the Company will license 15 nodes from Swirlds, at a license fee of $15,000 per node, for a term of one (1) year, for a license fee of $225,000. Pursuant to the Order Form, the license of the nodes will automatically renew for additional one (1) year terms unless and until either party terminates the Swirlds Agreement or provides notice of non-renewal of the license then in effect. Should the license for any of the foregoing 15 nodes renew for any additional year, the license fee per node will drop to $3,000 per node per year. During the year ended December 31, 2020 the Company paid a total of $225,000 and recorded a prepaid expense of $112,500.

Additionally, pursuant to the Order Form, the Company will pay Swirlds quarterly fees based on the aggregate value of all transaction fees the Company collects in that quarter from customers whose transactions were processed on the Coro payment platform using Swirld’s Hashgraph algorithm. The Company will also pay quarterly network transaction fees on all transactions (other than transactions for fiat), that are conducted by a Coro network user. If such quarterly network transaction fees equal less than $5,000, the Company will pay Swirlds $5,000 for that quarter.

On March 9, 2020, the Company entered into an engagement agreement with Aegis Capital Corp. (“Aegis”), pursuant to which we engaged Aegis to act as lead underwriter in connection with a proposed public offering of common stock by the Company. In the event the contemplated offering were completed, the agreement contemplated, that (subject to execution of an underwriting agreement for the offering) Aegis would be entitled to a 8% underwriting discount, a 1% non-accountable expense allowance, reimbursement of certain expenses, and warrants to purchase 8% of the number of shares of common stock sold in the offering. The agreement had a termination date of six months from the date thereof or upon completion of the proposed offering. The Company had recorded $119,025 of deferred offering costs consisting of $85,000 of legal fees, exchange listing fees of $9,025 and $25,000 of underwrite due diligence fees. The agreement expired on September 9, 2020 and offering costs of $119,025 were expensed.

On June 24, 2020, the board of directors of the Company adopted a compensation program for independent directors. Under the program, independent directors will be entitled to a quarterly cash fee of $7,500 and 7,500 shares of common stock on a quarterly basis (each due and payable quarterly in arrears). During the year ended December 31, 2020, the Company had appointed three independent directors.

7. RELATED PARTY

On July 15, 2016, the Company issued a 7% promissory note to a significant shareholder in the principal amount of $100,000. The note had an initial one-year term. On April 9, 2019, the maturity date of the note was extended to June 30, 2019. On April 12, 2019, the Company entered into an exchange agreement with The Vantage Group Ltd. (“Vantage”), which held the note, pursuant to which Vantage exchanged a portion of this note, in the amount of $50,000, for 10,000 newly issued shares of common stock of the Company. The Company repaid the remaining balance of $50,000. Vantage is owned by Lyle Hauser, formerly the Company’s largest stockholder.

On January 14, 2019, the Company entered into an exchange agreement with Lyle Hauser. Pursuant to the exchange agreement, Mr. Hauser exchanged an outstanding convertible promissory note of the Company in the aggregate amount of $70,382 (including accrued interest) held by Mr. Hauser for a new non-convertible promissory note of the Company in the principal amount of $70,382. On April 7, 2020, the maturity date of outstanding notes held by Lyle Hauser, consisting of (i) a promissory note, dated on or about January 14, 2019, in the original principal amount of $70,384, as amended by amendment No. 1 thereto, dated April 9, 2019, amendment No. 2 thereto, dated July 3, 2019, amendment No. 3 thereto, dated October 1, 2019, and amendment no. 4 thereto, dated January 17, 2020; and (ii) an original issue discount promissory note, dated on or about February 28, 2019, in the original principal amount of $110,000 (of which $100,000 had been repaid, leaving an outstanding balance of $10,000), as amended by amendment No. 1 thereto, dated April 9, 2019, amendment No. 2 thereto, dated July 3, 2019, amendment No. 3 thereto, dated October 1, 2019, and amendment No. 4 thereto, dated January 17, 2020, was extended to June 30, 2020. In consideration for the extension of the maturity date of the notes, the Company issued to the designee of Lyle Hauser 33,000 shares of common stock. From April 1, 2020 to December 31, 2020, the Company repaid $73,382 of the notes due to Lyle Hauser. On July 27, 2020 the maturity date of the note dated January 14, 2019 was extended to September 30, 2020As of December 31, 2020 and December 31, 2019, the note dated January 14, 2019 had a balance of $0 and accrued interest of $5,438.

On February 28, 2019, the Company issued a promissory note in the principal amount of $110,000 to Lyle Hauser with an original issue discount of $10,000, for a purchase price of $100,000. The note had a 0% interest rate until maturity and had an original maturity date of March 31, 2019, which was extended to June 30, 2020. Following the maturity date, the note would bear a 9% annual interest rate until paid in full. During the year ended December 31, 2020 the Company repaid a total of $110,000. As of December 31, 2020 and December 31, 2019, the note had a balance of $0 and $110,000, respectively.

During the years ended December 31, 2020 and 2019 the Company paid Dorr Asset Management consulting fees and expenses of $293,367, and $38,939, respectively. Dorr Asset Management is controlled by Brian and David Dorr, related parties to the Company.

9. INCOME TAXES

A reconciliation of the Company’s income taxes to amounts calculated at the federal statutory rate of 21% is as follows for the years ended December 31:

The significant components of the Company’s net deferred tax assets are as follows for the years ended December 31:

FASB ASC 740, Income Taxes, requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of all the evidence, both positive and negative, management has determined that a full valuation allowance of $6,412,301 and $5,514,632 against its net deferred taxes is necessary as of December 31, 2020 and December 31, 2019, respectively. The change in valuation allowance for the years ended December 31, 2020 and 2018 is $897,939 and $547,966, respectively.

At December 31, 2020 and December 31, 2019, respectively, the Company had approximately $25,300,000 and $21,758,000, respectively, of U.S. net operating loss carryforwards remaining.

As a result of certain ownership changes, the Company may be subject to an annual limitation on the utilization of its U.S. net operating loss carryforwards pursuant to Section 382 of the Internal Revenue Code. A study to determine the effect, if any, of this change, has not been undertaken.

Tax returns for the years ended December 31, 2020, 2019, 2018, 2017, and 2016 are subject to examination by the Internal Revenue Service.

10. SUBSEQUENT EVENTS

Between January 1, 2021 and March 30, 2021, the Company entered into securities purchase agreements with accredited investors pursuant to which the Company issued and sold an aggregate of 300,000 shares of common stock for an aggregate purchase price of $1,500,000.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure and Control Procedures

Management of the Company conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) under the 1934 Act) pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this report. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Based on this evaluation, management concluded that the design and operation of our disclosure controls and procedures are not effective due to the following material weaknesses:

To the extent reasonably possible given our limited resources, we intend to take measures to cure the aforementioned weaknesses, including, but not limited to increasing the capacity of our qualified financial personnel to ensure that accounting policies and procedures are consistent across the organization and that we have adequate control over financial statement disclosures.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2020 based on the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013).

A material weakness is defined within the Public Company Accounting Oversight Board’s Auditing Standard No. 5 as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In conducting his evaluation, our principal executive officer and principal financial officer noted the following material weaknesses in our internal controls over financial reporting:

As a result of these deficiencies in our internal controls, our officer concluded that our internal control over financial reporting was not effective.

This Annual Report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. The Company’s internal control over financial reporting was not subject to attestation by the Company’s independent registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(t) and 15d-15(f) under the Exchange Act, during the fourth quarter of the fiscal year ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Directors and Executive Officers

The following table and biographical summaries set forth information, including principal occupation and business experience about our directors and executive officers:

David Dorr is the Co-founder of Coro Global Inc. under the Company’s current business. He has been Chief Executive Officer, President and director of the Company since January 2021. Since 2010, Mr. Dorr has served as Managing Principal of Dorr Asset Management LLC and as Managing Principal and Director of Dorr Asset Management SEZC (a Cayman Islands entity), since 2012. The Dorr Asset Management companies provide investing and advisory services based on global macroeconomic analysis. Mr. Dorr’s experience includes trading in complex derivatives, equities, commodities, FX, and fixed income markets. His focus in physical commodities has been centered in the precious metals sector. He has also served as a strategic advisor to various sovereign governments as it relates to gold, financial systems, and economic policies. Mr. Dorr is currently licensed as a Director in Cayman Islands by the Cayman Islands Monetary Authority and has previously served as Director of Registered Cayman Islands Mutual Funds. Prior to the Dorr Asset Management companies, Mr. Dorr was Co-founder & CEO of Life-Exchange, Inc., an electronic trading platform for financial institutions trading longevity risk in the life insurance sector. Life-Exchange, Inc. was a U.S. publicly traded company and Mr. Dorr served as Director and CEO. Mr. Dorr has an extensive background in finance and risk management, having worked in capital markets for nearly two decades, which qualifies him to serve on the Company’s board of directors.

Brian Dorr is the Co-founder of Coro Global Inc. under the Company’s current business. He has been Chief Operating Officer and director of the Company since January 2021. Since 2010 Mr. Dorr has served as Managing Principal of Dorr Asset Management LLC and as Managing Principal, Director and Anti-Money Laundering Compliance Officer of Dorr Asset Management SEZC since 2012. The Dorr Asset Management companies provide investing and advisory services based on global macroeconomic analysis. Mr. Dorr’s experience includes trading in complex derivatives, equities, commodities, FX, and fixed income markets. His focus in physical commodities has been centered in the precious metals sector. He has also served as a strategic advisor to various sovereign governments as it relates to gold, financial systems, and economic policies. Mr. Dorr is currently licensed as a Director in Cayman Islands by the Cayman Islands Monetary Authority and has previously served as Director of a Registered Cayman Islands Mutual Fund. Prior to the Dorr Asset Management companies, Mr. Dorr was Co-founder & COO of Life-Exchange, Inc., an electronic trading platform for financial institutions trading longevity risk in the life insurance sector. Life-Exchange, Inc. was a U.S. publicly traded company and Mr. Dorr served as Director and COO. Mr. Dorr has an extensive background in finance and risk management, having worked in capital markets for nearly two decades, which qualifies him to serve on the Company’s board of directors.

Rudolf Hüppi has served a director of the Company since June 2020. Mr. Hüppi is the founder of ParaLife, and since its formation in 2006, the Chairman and CEO of the ParaLife Group. ParaLife provides affordable and efficient insurance and other financial services solutions to people in informal economies, in the lower income and in underprivileged sectors. ParaLife is headquartered in Switzerland, operates in Latin America and is currently preparing for market entry in China. Mr. Hüppi had a long career with Zurich Insurance Group (Zurich Financial Services), which he joined in 1963. He headed up Zurich’s operations in India, held various positions for the company in the United States, and led Zurich’s International Division, serving the insurance and risk management needs of corporate customers around the world. In 1983, he was appointed to the Group Executive Board with oversight responsibility for the group’s activities throughout North America, the United Kingdom, Asia, and Australia. He was also appointed CEO of Zurich’s U.S. operations. He became Group COO in 1988 and president and CEO of Zurich Group in 1991. In 1993, Mr. Hüppi joined the board of directors and was elected Chairman in 1995. He resigned as CEO and Chairman in 2002. Since his retirement, and beyond building ParaLife into a leading microinsurance provider, Mr. Hüppi has been supporting various new ventures in China and the United States. He is a Fellow of the Batten Institute at the University of Virginia Darden Business School. Mr. Hüppi’s financial and executive knowledge and experience qualifies him to serve on the Company’s board of directors.

Lou Naser has served as a director of the Company since June 2020 and as the Chairman since January 2021. Mr. Naser is the founder and managing partner of Global Wealth Partners, Inc., which he founded in 2010. He has over 30 years of experience in the wealth management and financial services industry. Mr. Naser creates the firm’s vision and oversees all of its strategic initiatives and key partnerships. This includes the firm’s acquisitions as well as global development, worldwide relationships, and private equity investments. Mr. Naser’s executive and financial knowledge and experience qualifies him to serve on the Company’s board of directors.

Carlos Naupari has served as a director of the Company since June 2020. Mr. Naupari has been CEO Brazil at Fligoo, a San Francisco-based advanced analytics company since July 2019. He began his career at UBS in New York in 2008. After half a decade on Wall Street, Mr. Naupari pivoted his professional journey towards technology companies and has held senior leadership roles at Rokk3R Inc (from July 2017 to June 2019), VARIV Capital (from January 2015 to June 2015), and Rocket Internet AG (from June 2014 to January 2015) in the United States, Mexico, and Brazil. Mr. Naupari holds a BA from the University of Virginia. Mr. Naupari’s technology industry knowledge and experience qualifies him to serve on the Company’s board of directors.

Corporate Governance

Board of Directors Term of Office

Directors are elected at our annual meeting of shareholders and serve for one year until the next annual meeting of shareholders or until their successors are elected and qualified.

Committees of our Board of Directors

We have established an audit committee, a compensation committee, and a nominating and corporate governance committee. Each such board committee consists of our three independent directors. Mr. Hüppi serves as chair of our audit committee, Mr. Naupari serves as chair of our compensation committee, and Mr. Naser serves chair of our nominating and corporate governance committee. Mr. Hüppi is our audit committee financial expert.

Family Relationships

There is no family relationship between any director and executive officer or among any directors or executive officers, except that David and Brian Dorr are brothers.

Involvement in Certain Legal Proceedings

Our directors and executive officers have not been involved in any of the following events during the past ten years:

Code of Ethics

We have adopted a Code of Ethics for adherence by all of our employees. In addition, certain provisions of the Code of Ethics are specifically directed to the Company’s Chief Executive Officer, Chief Financial Officer, and financial managers. We have adopted a Code of Ethics to ensure honest and ethical conduct; full, fair and proper disclosure of financial information in our periodic reports filed pursuant to the Exchange Act; and compliance with applicable laws, rules, and regulations. Our Code of Ethics is available on our website at www.coro.global.

Item 11. Executive Compensation.

The following table sets forth compensation information for services rendered by certain of our executive officers in all capacities during the last two completed fiscal years. The following information includes the dollar value of base salaries and certain other compensation, if any, whether paid or deferred.

Employment Agreements

We entered into an employment agreement on May 18, 2018, with J. Mark Goode, our then-Chief Executive Officer and on May 31, 2019, and December 29, 2020, we entered into amendments to the employment agreement. Pursuant to the employment agreement, as amended, Mr. Goode’s annual base salary was $96,000, which could be increased to up to $216,000 upon Mr. Goode meeting certain milestones set forth in the employment agreement related to our performance and was subject to increases as set from time to time by our board of directors. Upon the execution of the employment agreement, Mr. Goode received 500,000 shares of our common stock. Upon execution of the first amendment, we issued to Mr. Goode and his designee 750,000 shares of common stock, and we had no further obligation to issue to Mr. Goode shares under the employment agreement. Pursuant to Mr. Goode’s employment agreement, as amended, Mr. Goode would have been required to return 500,000 shares if he was not serving as our Chief Executive Officer as of May 17, 2020.

Pursuant to the second amendment to the employment agreement, Mr. Goode agreed to resign as President, Chairman, and Chief Executive Officer of the Company effective December 31, 2020. From the period January 1, 2021 to January 31, 2021 Mr. Goode will be entitled to his base salary and any other regular compensation under the employment agreement and will assist the Company in the Company’s transition to a new Chief Executive Officer. Mr. Goode agreed that he would return 250,000 shares of the Company’s common stock if he were not serving as Chief Executive Officer of the Company as of December 30, 2020, and agreed to return 62,500 shares of common stock to the Company upon expiration of the employment agreement on January 31, 2021.

Outstanding Equity Awards at 2020 Fiscal Year-End

The following table sets forth our outstanding equity awards to our executive officers as of December 31, 2020.

Director Compensation

On June 24, 2020, the board of directors of the Company adopted a compensation program for independent directors. Under the program, independent directors will be entitled to a quarterly cash fee of $7,500 and 7,500 shares of common stock on a quarterly basis (each due and payable quarterly in arrears).

The following table sets forth compensation we paid to our directors during the year ended December 31, 2020 (excluding compensation under the Summary Compensation table above).

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth certain information, as of March 25, 2021, with respect to the beneficial ownership of the outstanding common stock by (i) any holder of more than five (5%) percent; (ii) each of our executive officers and directors; and (iii) our directors and executive officers as a group.

The table lists applicable percentage ownership based on 25,413,746 shares of common stock outstanding as of March 25, 2021. In addition, the rules include shares of our common stock issuable pursuant to the exercise of stock options and warrants that are either immediately exercisable or exercisable within 60 days of March 25, 2021. These shares are deemed to be outstanding and beneficially owned by the person holding those options for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws. Except as otherwise noted below, the address for persons listed in the table is c/o Coro Global Inc., 78 SW 7th Street, Suite 500, Miami, FL 33130. 

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Certain Relationships and Related Transactions

On April 8, 2020, the Company issued 33,000 shares of common stock to the designee of Lyle Hauser (then a significant stockholder of the Company) in connection with the extension of the maturity date of outstanding notes held by Mr. Hauser.

On June 22, 2020, the Company issued to Niquana Noel, the Company’s then-Chief Operating Officer, for services provided, six-month warrants to purchase 50,000 shares of common stock, with an exercise price of $0.01. On June 30, 2020, the Company issued 50,000 shares of common stock to Niquana Noel, upon exercise of Ms. Noel’s warrants, at an exercise price of $0.01 per share.

During the nine months ended September 30, 2020, the Company paid Dorr Asset Management LLC consulting fees and expenses of $218,367. Dorr Asset Management LLC concluded its consulting services to the Company on November 30, 2020. There are no current compensation arrangements between the Company and David Dorr or Brian Dorr.

On May 31, 2019, the Company entered into an amendment to its employment agreement with J. Mark Goode, the Company’s then-Chief Executive Officer and on December 29, 2020, we entered into amendment No. 2 to the employment agreement with J. Mark Goode. See “Executive Compensation.”

On January 15, 2021, we entered into a securities purchase agreement with Lou Naser, the Company’s chairman, pursuant to which we issued and sold to Mr. Naser 6,000 shares of common stock for a purchase price of $5.00 per share.

Director Independence

Mr. Hüppi, Mr. Naser and Mr. Naupari are independent as defined under Nasdaq Marketplace Rules.

Item 14. Principal Accountant Fees and Services.

The following table shows the fees that were billed to the Company by its independent auditor for professional services rendered in 2020 and 2019.

Audit fees. Audit fees represent fees for professional services performed by MaloneBailey, LLP or Liggett & Webb, P.A., as applicable, for the audit of our annual financial statements and the review of our quarterly financial statements, as well as services that are normally provided in connection with statutory and regulatory filings or engagements.

Audit-related fees. Audit-related fees represent fees for assurance and related services performed that are reasonably related to the performance of the audit or review of our financial statements.

Tax Fees. MaloneBailey, LLP and Liggett & Webb, P.A. did not perform any tax compliance services for us during the years ended December 31, 2020 or 2019, except that Liggett & Webb, P.A. received $1,500 for providing tax services relating to preparation of certain tax returns for us during the year ended December 31, 2020.

All other fees. MaloneBailey, LLP and Liggett & Webb, P.A., did not receive any other fees from us for the years ended December 31, 2020 or 2019, except that Liggett & Webb, P.A. received $5,000 for audit of our subsidiary. 

PART IV

Item 15. Exhibits.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.