FEARLESS FILMS, INC. - Annual Report: 2021 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the Fiscal Year Ended December 31, 2021

For the transition period from _______________ to _______________

Commission File Number: 000-31441

FEARLESS FILMS, INC.

(Exact name of registrant as specified in its charter)

467 Edgeley Blvd., Unit 2, Concord, ON L4K 4E9 Canada

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (888) 928-0184

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

None

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

Common Stock, $0.001 par value

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 Section 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, or a smaller reporting company.

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes ☐ No ☒

As of March 31, 2022, the last business day of the registrant’s most recently completed first quarter, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $654,737 based upon the closing price of the registrant’s common stock of $0.05 per share as reported on OTCPink on that date. (For this computation, the registrant has excluded the market value of all shares of its common stock reported as beneficially owned by executive officers, directors and certain other stockholders; such exclusion shall not be deemed an admission that any such person is an “affiliate” of the registrant for other purposes.)

The number of shares of the issuer’s common stock, $0.001 par value, outstanding as of April 13, 2022 was 33,895,157.

DOCUMENTS INCORPORATED BY REFERENCE

A description of “Documents Incorporated by Reference” is contained in Part IV, Item 15.

FEARLESS FILMS, INC.

TABLE OF CONTENTS

As used in this report, unless otherwise indicated, “we”, “us”, “our”, “FERL” and the “Company” refer to Fearless Films, Inc.

PART I

Fearless Films, Inc. (the “Company”) was incorporated as MYG Corp. in the State of Nevada on July 6, 2000. We subsequently underwent name changes to BisAssist, Inc. on December 21, 2000, to Cody Ventures Corporation on October 11, 2004, and to Paw4mance Pet Products International, Inc. on April 7, 2011. On September 26, 2014, we changed our name to Fearless Films, Inc. in anticipation of the acquisition of Fearless Films (Canada). On November 14, 2014, the company completed the acquisition of Fearless Films (Canada), which became a wholly-owned subsidiary of the company.

Our principal executive offices are located at 467 Edgeley Blvd., Unit 2, Concord, ONT L4K 4E9 Canada and our telephone number is (888) 928-0184. Our website address is http://fearless.film.

Our auditors have issued an opinion that raises substantial doubt about the company’s ability to continue as a going concern based on our current financial position. The ability to continue as a going concern is dependent upon the company generating profitable operations in the future, and/or its ability to obtain the necessary financing to meet its obligations and repay liabilities from normal business operations when due. Management intends to finance operating costs over the next twelve months with existing cash on hand, revenues, if revenues are generated from operations, and/or the sale and issuance of common stock, and/or the issuance of debt.

Business Development

On November 14, 2014, we completed the acquisition of Fearless Films (Canada). The intent of the acquisition was to engage in the business of providing professional services for short film and full-length feature film productions, distribution, and related services. In connection with the acquisition, Fearless Films (Canada) became our wholly-owned subsidiary and the former stockholders of Fearless Films (Canada) obtained control of the consolidated entity. On September 23, 2014, in connection with the acquisition of Fearless Films (Canada), we approved a one share for 1000 shares (1:1,000) reverse split of our outstanding common stock.

On September 21, 2018, we finalized negotiations with most of the holders of certain company debt and entered into agreements to restructure our capital. Thus, in exchange for cancelling debt with a total value of $120,845.80, the debt was converted into 129,845,200 shares of our common stock. The debt ranged in age from four months to nearly four years. At the same time, we issued a total of 3,300,000 shares of common stock to three directors in consideration for their service on the board of directors and, in the case of our CEO, for past services performed for the company in his capacity as CEO since March 2013. Also on the same date, we issued 30,250,000 shares of common stock pursuant to the Fearless Films (Canada) acquisition and the Administrative Services Agreement referenced above. As of December 31, 2018, and following these actions, 316,543,316 shares of common stock were issued and outstanding.

On December 12, 2019, we finalized an Equity Line with Crown Bridge Partners, LLC, pursuant to the terms of the Equity Purchase Agreement executed December 3, 2019. Under the Equity Line, we have the right, from time-to-time, to deliver a put notice for a number of shares of common stock that Crown Bridge Partners is committed to purchase, for an aggregate amount up to $5,000,000 until December 3, 2022. Each put notice is subject to certain volume limitations. Shares issued under the Equity Line must be registered with the SEC, which was accomplished by the registration statement on Form S-1 for the resale of shares that was declared effective on February 11, 2020. See “Equity Purchase Agreement with Crown Bridge Partners, LLC” under Item 7.

On December 8, 2020, we effected a reverse stock split of its issued and outstanding shares of common stock on a one share for 10 shares (1:10) basis. The reverse stock split was approved on October 26, 2020 unanimously by our Board of Directors and by a majority of our common stock voting power. All references to our common stock hereafter shall reflect the one for ten shares reverse stock split, unless otherwise noted.

Fearless Films (Canada), is an independent full-service production company and has been positioning itself to ultimately produces top quality entertainment. We intend to specialize in short film and feature film production in addition to script writing, copywriting, fulfillment and distribution. Because of a lack of adequate funding, we have not realized revenues since our acquisition, but management believes we are in a position to become fully operational with the infusion of new capital. Since inception and prior to our acquisition, Fearless Films (Canada) has produced more than ten films and also a pilot for a series, The My Ciccio Show.

We are currently engaged in the business of providing professional services for all forms of short film and full-length feature film productions, ranging from directing and creative directing through post-production and fulfillment. Our business is operated though our subsidiary, Fearless Films (Canada), an independent full-service production company. Our primary business is video production services. Video projects are divided into four parts: (i) pre-production, (ii) production, (iii) post-production and (iv) distribution. During pre-production, the client describes the need and the purpose of the production. Production is the part of the process where raw materials that will be formed into the final product are created. This could include such activities as recording material in one or more cameras to produce 2d and 3d effects. Post-production is where the first rough cut of the final product is created. Client input is then used to create the final version of the production.

Our primary markets are Media & Entertainment companies (short films, feature films, TV drama, broadcast programs), Animation and Multimedia companies. We provide directing, creative, video capture, video editing and full range of postproduction services to these target markets.

Because our business is customer-driven, our revenue requirements will be reviewed and adjusted based on sales. Costs associated with operating as a public company are included in management’s budget. Management will be responsible for the preparation of much of the required documents to keep the costs to a minimum.

Description of Products and Services

Fearless Films (Canada) offers itself as a full-service video production provider. Services include production elements such as creative brief, script writing, talent acquisition, voice overs, soundtracks and graphical animation. Our primary markets for services are directors, writers, and those in need of post-production and distribution / fulfillment. We intend to rely on Victor Altomare to oversee these services due to his extensive industry experience and technical and creative expertise. Many of these tasks will be carried out by consultants and contract specialists.

Video and film production

We are capable of producing short film and full-length feature films. We can handle the full project development cycle, from directing and creative directing through post-production and fulfillment, depending on the needs of the client. We use professional film equipment and record films in formats such as high definition, Full HD and 4k, resulting in cinema-quality output. Through our industry relationships, management believes we can obtain filming locations at competitive prices, procure staging and lighting in addition to facilitating full post production needs and demands.

Animation and Special Effects

Our network of video studio specialists can develop computer graphics: 2-d and 3-d animation, motion design and visual effects on behalf of our clients.

Talent acquisition

Fearless Films (Canada) assists producers in in identifying on-screen talent, script writers and other film creatives such as makeup artists and creative directors.

Editing

Our editing specialists carry out editing, make corrections and suggestions, and then implement color correction and final mixing of sound.

Distribution

From a business perspective, our primary goal is to maximize revenues and seek to maximize the return on investment for our stockholders. However, there can be no assurance that this goal will be achieved or that increased revenues will equate to a higher return on investment. The ultimate commercial success of any video product is dependent on its distribution. Our primary market of service is Canada and the United States. Through our industry connections, we can arrange distribution for our clients’ films, including both theatrical and digital distribution.

We plan to approach prospective distributors with completed trailers, thus potentially enhancing bargaining positions with respect to negotiating the terms of distribution arrangements. We also plan to present trailers at the major film markets held each year in the USA.

We have full interest in the theatrical film “The Great Chameleon.” The movie, produced in 2012 and released in 2013, features actors Stacy Keach, Robert Davi and Victor Altomare, who was also co-writer and co-producer of the film. The Great Chameleon is available for streaming distribution through Amazon Video (UK) and for rent or purchase through various outlets and services.

Marketing and Sales

Our current service scope is geared primarily towards directors, writers, and people in need of post-production and distribution/fulfillment. Our marketing strategy includes a diverse range of promotional communications. Our primary marketing channel is professional networking, using the existing industry connections that we have. A key component of our marketing strategy is to seek alliances with video companies that have industry credibility, presence, and distribution. Our professional networking efforts also include attending trade shows, industry events, meetings and seminars at events such as the Professional Videographers Association, Association of Video Professional, Digital Video Professionals Association. In terms of geography, our target markets are in North America. We also use online marketing as part of efforts to attract customers and promote and distribute our products. Our primary online interface is through our website. We supplement this with online marketing efforts, including advertising, links from Internet directories to our website and referrals from blogs. Our plan is to use Search Engine Optimization (SEO) to have Fearless Films show near the top of the list of relevant Internet searches.

Our Business Strategy

Our strategy has two elements: (i) utilize our current connections and skills to build a revenue-producing film services business; and (ii) become an independent producer of television and movie content.

We are currently focused on providing video production services to professional video production companies. Video projects are divided into four parts: (i) pre-production, (ii) production, (iii) post-production and (iv) distribution. During pre-production, the client describes the need and the purpose of the production. We then handle everything from directing and creative directing through post-production and fulfillment, depending on the needs of the client. Our services include: Video, TV and film production; talent selection; distribution; animation and special effects; editing; sound mixing; creative writing; and a full range of post-production services.

Our marketing strategy includes a diverse range of promotional communications. Our primary marketing channel is professional networking, using management’s existing industry connections. A key component of this strategy is to seek alliances with video companies that have industry credibility, presence, and distribution. Our networking efforts include attending trade shows, meetings, seminars and industry events. We also use our website for marketing to attract customers and promote and distribute our products. We intend to add online marketing, including advertising, links from Internet directories to our website, referrals from blogs, and Search Engine Optimization (SEO) to have Fearless Films show near the top of the list of relevant Internet searches.

Employees

We are currently in the early stage of developing our business plan, during which we intend to rely exclusively on the services of our officers and directors to set up our business operations. We believe that our operations are currently on a small scale that is manageable by our officers and directors.

Film production professionals we plan to use will be considered independent contractors. We do not intend to enter into any employment agreements with any of these professionals. Thus, these persons are not intended to be employees of the company.

Our future success will depend, in part, on our ability to continue to attract, retain and motivate highly qualified technical, marketing, production and post-production contract workers. We currently have no full-time employees.

Employee Stock Plan

We have not adopted any kind of stock or stock option plan for employees at this time.

Competition

The television and movie production industries are intensely competitive. Competition comes from companies within the same business and companies in other entertainment media that create alternative forms of entertainment. The industry is currently evolving in such a way that certain multinational multimedia firms will be able to dominate this space because of their control over key film, magazine, and television content, as well as key network and cable outlets. These organizations have numerous competitive advantages, such as the ability to acquire financing for their projects and to make favorable arrangements for the distribution of completed product. All of our competitors will likely be organizations of substantially larger size and capacity, with far greater financial and personnel resources and longer operating histories. Competitors may be better able to acquire properties, personnel and financing, and enter into more favorable distribution agreements. Our future success will largely depend on public taste, which is both unpredictable and susceptible to rapid change. As an independent production company, we most likely will not have the backing of a major studio for production and distribution support. Consequently, we may not be able to complete a distribution deal.

In order to be competitive, we intend to create and/or acquire innovative concepts that may appeal to a wide range of public tastes both in the United States and abroad. Moreover, by producing our products in Canada we believe that we will be able to significantly reduce production costs and, thereby offer our products to distributors at competitive pricing.

There are many companies in the Motion Picture & Video Tape Production market, most of which are larger, more experienced and better financed that Fearless Films. Currently, our competitive position within the industry is small because our operations have been limited by available cash. We believe we have the ability to compete favorably as a freelance video production company in the Media & Entertainment industry because of the following:

However, if we are not able to compete successfully against our current and future competitors, it will be difficult to acquire and retain clients. We would then experience revenue declines, reduced operating margins, loss of market share and diminished value in our services. Thus, it will be important that we engage and retain qualified and experienced personnel and develop a strong marketing strategy.

Research and Development

The market for our services is characterized by rapidly changing technology, evolving industry standards and frequent technology shifts and introductions. We believe that our future success depends in large part upon our ability to continue to adopt the functionality and standards of new film production technology. We intend to extend the functionality of our technology and develop new products by continuing to invest in our tools and studio infrastructure.

Most development work for our customers is conducted in-house. We also use independent contractors to assist with certain product development activities. We believe our future success relies on continued service offerings and enhancement. To accomplish this objective, we intend to seek to improve delivery reliability, advance and broaden employed technologies while maintaining or reducing production costs. In addition, we actively investigate new production equipment and standards.

We intend to continue to focus on services innovation, quality improvement, performance enhancement and on-time delivery while striving for delivered product cost improvements to promote added value for our services. We seek growth opportunities through the development of new applications for existing services, technological improvements for both new and existing markets and the acquisition and development of new tools/products and competencies.

Production

The company intends to produce its trailers and movies at the lowest possible cost consistent with the quality that it seeks to achieve. We will attempt to avoid substantial overhead associated with major production companies by maintaining minimal staff. We own some production equipment, but will adopt the standard Industry practice of renting production facilities and equipment and engaging free-lance production staff on an “as-needed” basis.

We expect the total production period for a company-produced trailer to generally continue for as long as three months and, in some instances, even longer. Feature-length movie production may take up to 12 months or longer. Multiple projects may run concurrently, should we have sufficient funds available to do so.

Strategic Relationships

We currently do not have any material strategic relationships. Management’s goal is to seek out and develop meaningful relationships with individuals and entities that can enhance the fulfillment of our business plan.

Intellectual Property

As a general practice, we will rely upon patent, copyright, trademark and trade secret laws to protect and maintain our proprietary rights for our products. There are no inherent factors or circumstances associated with this industry, or any of the products or services that we expect to be providing that would give rise to any patent, trademark or license infringements or violations. We have not entered into any franchise agreements or other contracts that have given, or could give rise to obligations or concessions. Our web domain and IP address as well as company information will be protected by our domain host. We do not own, either legally or beneficially, any patents or trademarks.

Rights to motion pictures are granted legal protection under the copyright laws of the United States and most foreign countries, including Canada. These laws provide substantial civil and criminal penalties for unauthorized duplication and exhibition of motion pictures. Motion pictures, musical works, sound recordings, artwork, and still photography are separately subject to copyright under most copyright laws. We plan to take appropriate and reasonable measures to secure, protect, and maintain copyright protection for all of our products under the laws of the applicable jurisdictions. Motion picture piracy is an industry-wide problem.

Under the copyright laws of Canada and the United States, copyright in a motion picture is automatically secured when the work is created and “fixed” in a copy. We intend to register our films for copyright with both the Canadian Copyright Office and the United States Copyright Office. Both offices will register claims to copyright and issue certificates of registration, but neither will “grant” or “issue” copyrights. Only the expression (camera work, dialogue, sounds, etc.) fixed in a motion picture can be protected under copyright. Copyright in both Canada and the United States does not cover the idea or concept behind the work, or any characters portrayed in the work. Registration with the appropriate office establishes a public record of the copyright claim.

Ordinarily, a number of individuals contribute authorship to a motion picture, including the writer, director, producer, camera operator, editor and others. Under the laws of both the United States, and Canada, these individuals are not always considered the “authors,” however, because a motion picture is frequently a “work made for hire.” In the case of a work made for hire, the employer, not the individuals who actually created the work, is considered the author for copyright purposes. We intend all of our films to be works made for hire in which we will be the authors and thereby own the copyright to our films.

Canada’s copyright law is distinguished from that of the United States by recognizing the moral rights of authors. Moral rights refer to the rights of authors to have their names associated with their work, and the right to not have their work distorted, mutilated or otherwise modified, or used in association with a product, service, cause or institution in a way that is prejudicial to their honor or reputation. Moral rights cannot be sold or transferred, but they can be waived. We intend that all individuals who contribute to the creation of any of our motion pictures will be required to waive any such moral rights that they may have in the motion picture.

For copyright purposes, publication of a motion picture takes place when one or more copies are distributed to the public by sale, rental, lease or lending. Publication also refers to an offering made to distribute copies to a group of persons (wholesalers, retailers, broadcasters, motion picture distributors, and the like), for purposes of further distribution or public performance. A work that is created (fixed in tangible form for the first time) on or after January 1, 1978, is automatically protected from the moment of its creation. The work is ordinarily given a term enduring for the author’s life plus an additional 70 years after the author’s death. For works made for hire, the duration of copyright will be 95 years from publication or 120 years from creation, whichever is shorter.

Although we plan to copyright all of our film properties and projects, there is no practical protection from films being copied by others without payment to us, especially overseas. We may lose an indeterminate amount of revenue as a result of motion picture piracy. Being a small company, with limited resources, it will be difficult, if not impossible, to pursue our various remedies. Motion picture piracy is an international as well as a domestic problem. It is extensive in many parts of the world.

Government Regulations

We are aware that the cost of producing and distributing filmed entertainment has increased substantially in recent years. This is due, among other things, to the increasing demands of creative talent as well as industry-wide collective bargaining agreements. Many screenplay writers, performers, directors and technical personnel in the entertainment industry who will be involved in our productions, are members of guilds or unions that bargain collectively on an industry-wide basis. We have found that actions by these guilds or unions can result in increased costs of production and can occasionally disrupt production operations. If such actions impede our ability to operate or produce a motion picture, it may substantially harm our ability to earn revenue and result in our business to fail.

We intend to use non-unionized talent whenever possible to reduce our costs of production. Notwithstanding, many individuals associated with our productions, including actors, writers and directors, will be members of guilds or unions, that bargain collectively with producers on an industry-wide basis from time to time. Our operations will be dependent upon our compliance with the provisions of collective bargaining agreements governing relationships with these guilds and unions. Strikes or other work stoppages by members of these unions could delay or disrupt our activities. The extent to which the existence of collective bargaining agreements may affect us in the future is not currently known.

Industry Background

Movie Distribution

We believe that the availability of low-cost, high-quality production equipment combined with the ability to distribute product via the Internet, may be fundamentally changing the way feature-length movies are distributed. Often, a movie that was accepted by a distributor would see a revenue split, reasonably expected in the 50-50 range, with no guarantee of distribution or revenue. In some cases, an up-front payment might be paid to offset production costs. Today, movies can be self-distributed via the Internet without the involvement of a distributor. This said, there are material costs associated with Internet marketing and those costs could render the movie unprofitable. Independent films, such as the company produces, may be inexpensive to produce, but they are very difficult to have been seen. Submissions to film festivals are an attempt to attract distributors, but there is no guarantee that film festivals will generate any distribution agreements.

United States Television Distribution

Television rights in the United States are generally licensed first to pay television for an exhibition period following home video release. Thereafter, they go to network television for an exhibition period, then to pay television again, and finally syndicated to independent stations. Therefore, the owner of a property may receive payments resulting from television licenses over a period of six years or more.

Cable and Pay Television

Pay television rights include rights granted to cable, direct broadcast satellite, microwave, pay per view and other services paid for by subscribers. Cable and pay television networks usually license properties for initial exhibition commencing six to twelve months after initial domestic theatrical release, if any, as well as for subsequent showings. Some pay television services have required exclusivity as a precondition to such contracts. The pay television market is characterized by a large number of sellers and few buyers. However, the number of properties utilized by these buyers is extremely large.

Network Television

In the United States, broadcast network rights are granted to ABC, CBS, NBC, FOX or other entities formed to distribute programming to a large group of stations. Commercial television networks in the United States license properties for a limited number of exhibitions.

Television Syndication

If the producer has entered into a commercial television network license, the property may be shown shortly after its completion through a number of outlets. This activity, known as “syndication,” has become an important source of revenues as the number of, and competition for, programming among local television stations has increased.

Foreign Television Syndication

Properties are now being licensed in foreign television market in a manner similar to that in the United States. The number of foreign television stations, as well as the modes of transmission such as pay, cable, network and satellite, have been expanding rapidly and the value of such markets has been likewise increasing. Management believes that this trend will continue to expand. Producers may license properties to foreign television stations during the same period they license such properties to television stations in the United States. However, governmental restrictions and the timing of the initial foreign theatrical release of the property in the territory, may delay exhibition of such properties in such territory.

Re-licensing

Collective retained rights in a group of previously produced properties is often a key asset, as such properties may be re-licensed in the pay and commercial television, home video and non-theatrical markets.

Facilities

Our principal corporate offices are located at 467 Edgeley Blvd., Unit 2, Concord, ONT L4K 4E9 Canada and our telephone number is (888) 928-0184. These facilities are offered to us on a rent-free basis by one of our stockholders. The location includes office space and meeting room, video editing, mixing and sound production facilities.

Industry Segments

No information is presented regarding industry segments. We are presently an emerging company

engaged in the business of providing professional services for all forms of short film and full-length feature film productions.

Plan of Operation

We are a television and movie production company providing production services to film producers and others. Over the next 12 to 24 months, we have plans to undertake production of a full-length feature film under our own name, based on a script that we will select.

During the next 12 months we intend to concentrate our efforts in two areas; (i) administration, and (ii) film development. Administrative costs will include the expense of maintaining our public company status, including legal and accounting fees, as well expenses for maintaining our principal place of business and other operating facilities, for salaries and compensation for key personnel. We estimate these costs to be approximately $275,000, of which $100,000 will be costs for reporting and compliance with public company obligations. Our film development budget is expected to be between $3.0 million and $5.0 million. Typical film budgets break down along the lines of; (i) 10% for writing, (ii) 20% for the cast, (iii) 50% for production, (iv) 15% for post-production, and (v) 5% for other costs.

We anticipate that our first planned production will be based on the following time and cost estimates: (i) Script development – approximately three months at a cost of $75,000; (ii) Storyboarding – approximately two months for a cost of $10,000; (iii) Pre-production, including sourcing equipment and talent – approximately two months and $1.0 million; Production – approximately three months and $2.0 million; and (v) Post-production – approximately four months and $2.0 million.

At this time management is not able to predict when it will identify our first project and precisely how financing will be secured. Management continues to explore and investigate potential projects and a final decision will be based on the perceived potential merit of the project and the feasibility of securing necessary funding.

Management anticipates that it will be able to use its network of contacts and industry relationships as a potentials sales team. As future revenue increases, we plan to hire a sales team, but currently there are no agreements or arrangements in place for the sales team.

We expect that financing to fund our future plans will come from private issuances of our securities, debt and/or equity. There can be no assurances that the company will be able to raise the necessary funds when needed.

Special risk factor related to the COVID-19 pandemic

The occurrence of the COVID-19 pandemic may negatively affect our business, financial condition and results of operations.

We are in the early stages of developing our business plan of building a revenue-producing film service business and becoming an independent producer of television and movie content. Because our business is customer-driven, our revenue requirements will be reviewed and adjusted based on future revenues. Expenses associated with operating as a public company are included in management’s budget. The occurrence of an uncontrollable event such as the COVID-19 pandemic is likely to negatively affect our operations. A pandemic such as COVID-19 can result in social distancing, travel bans and quarantines, which can lead to limited access to customers, management, support staff, consultants and professional advisors. These, in turn, will not only impact our operations, financial condition and demand for our services and products, but our overall ability to react timely to mitigate the impact of the event. It may also substantially hamper our efforts to provide investors with timely information and our ability to comply with filing obligations with the SEC.

This item is not required for a smaller reporting company.

This item is not required for a smaller reporting company.

We do not presently own any property.

There are no material pending legal proceedings to which the company or its subsidiary is a party, or to which any property is subject and, to the best of our knowledge, no such action against us is contemplated or threatened.

From time-to-time, we may be involved in various claims, lawsuits, and disputes with third parties incidental to the normal operations of the business. As of the date hereof, we are not aware of any material claims, lawsuits, or disputes with third parties or regulatory proceedings that would have any material effect on our company.

This item is not applicable.

PART II

Our common stock is presently quoted on the OTCPink under the trading symbol “FERL”, although there has not been a continuous, active trading market for the shares. The most recent reported trade by the OTCPink was on April 11, 2022 at a price of $0.05 per share.

Set forth in the table below are the quarterly high and low prices of our common stock as obtained from the OTC for the past two fiscal years ended December 31, 2021 and 2020 and the second quarter of 2022 through April 11, 2022. Stock prices have been adjusted for the one share for ten share reverse stock split effected December 8, 2020.

As of April 11, 2022, there were approximately 121 stockholders of record of our common stock, which does not consider those stockholders whose certificates are held in the name of broker-dealers or other nominee accounts.

The ability of individual stockholders to trade their shares in a particular state may be subject to various rules and regulations of that state. Many states require that an issuer’s securities be registered in their state or appropriately exempted from registration before the securities are permitted to trade in that state. Presently, we have no plans to register our securities in any state.

Purchase of Equity Securities by the Issuer and Affiliated Purchasers

We did not purchase any of our shares of common stock or other securities during fiscal year ended December 31, 2021.

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

The recent share issuances listed below are in pre-split amounts and do not reflect the one share for ten shares reverse stock split effected on December 8, 2020.

On June 1, 2020, the Company entered into private placement agreements with shareholders for issue of 6,666,667 shares (666,667 shares post reverse split) at a price of $0.15 per common share for a total of $1,000,000 gross proceeds. As at December 31, 2020 gross proceeds received are $627,923. As at December 31, 2020, 3,379,000 shares (337,900 shares post reverse split) have been issued and 807,154 shares (80,715 shares post reverse split) are included in common stock to be issued.

On June 15, 2020, the Company announced their decision to purchase the film “The Lunatic” from the President and CEO of the operating subsidiary. The purchase price will be in the form of common shares and the number of shares will be set by an independent appraisal of the film expected to take place during the fourth quarter of 2021.

On June 17, 2020, the Company announced the acquisition of FilmOla.com, a website for aficionados of film and which can provide a platform for distribution for the Company’s media properties. Payment for this acquisition was in the form of 1,000,000 common shares (100,000 shares post reverse split) of the Company. As at December 31, 2020, these shares have been issued and fair valued at $52,000 based on market price at the time of issue and included in intangible assets.

On June 24, 2020, the Company announced the acquisition of rights to the film, Only Minutes, an addition to the company’s growing library of media titles. Payment for this acquisition was in the form of 200,000 common shares (20,000 shares post reverse split) of the Company. As at December 31, 2020, these shares have been issued and fair valued at $10,400 based on market price at the time of issue and included in intangible assets.

On July 1, 2020, the Company entered into private placement agreements with shareholders for issue of 3,333,333 shares (333,333 shares post reverse split) at a price of $0.15 per common share for a total of $500,000 gross proceeds. As at December 31, 2020 gross proceeds received are $371,615 and the respective 2,477,433 shares (247,743 shares post reverse split) are included in common stock to be issued.

On July 28, 2020, the Company announced the acquisition of rights to the film, In the Lair, an addition to the company’s growing library of media titles. Payment for this acquisition was in the form of 200,000 common shares (20,000 shares post reverse split) of the Company. As at December 31, 2020, these shares have been issued and fair valued at $10,400 based on market price at the time of issue and included in intangible assets.

On August 24, 2020, the Company announced the acquisition of film script Dead Bounty, another significant addition to the company’s growing portfolio of films and intellectual property. Payment for this acquisition was in the form of 300,000 common shares (30,000 shares post reverse split) of the Company. As at December 31, 2020, these shares have been issued and fair valued at $15,600 based on market price at the time of issue and included in intangible assets.

On January 30, 2021, the Company issued 1,600,000 shares of common stock with a fair value of $272,000 to settle a accounts payable $320,000, resulting in a gain of $48,000. The fair value of the common stock was determined based on the closing price of the Company’s common stock on the date of issuance.

On May 3, 2021, the Company authorised to issue 5,000,000 shares of common stock with a fair value of $900,000 to settle a accounts payable of $815,000, resulting in a loss of $85,000. The fair value of the common stock was determined based on the closing price of the Company’s common stock on the date of settlement. As at December 31, 2021, these shares have not been issued and included in common stock to be issued.

On June 1, 2021, the Company entered into a private placement agreement with a third party for issue of 666,667 shares at a price of $0.15 per common share for a total of $100,000 gross proceeds. As at December 31, 2021 gross proceeds received are $15,796. As at December 31, 2021, these shares have not been issued and are included in common stock to be issued.

All of the common stock issued above were issued in private transactions to persons management believed possessed adequate information concerning the company, and the requisite level of knowledge and sophistication to evaluate the merits of the company. The issuances were made in reliance on an exemption from registration with the Securities and Exchange Commission provided by Section 4(a)(2) of the Securities Act of 1933, as amended. The shares are considered restricted securities and certificates representing the shares must contain a legend restricting further transfer, unless the shares are first registered under the Securities Act of 1933, or qualify for an appropriate exemption.

As at December 31, 2021, the Company has 33,895,157 (December 31, 2020: 32,295,157) shares issued and outstanding common stock (comprising 22,400,419 restricted stock and 11,494,738 unrestricted stock).

Penny Stock Rule

It is unlikely that our securities will be listed on any national or regional exchange nor the NASDAQ Stock Market in the foreseeable future. Therefore, our shares will be subject to the provisions of Section 15(g) and Rule 15g-9 of the Exchange Act, commonly referred to as the “penny stock” rule. Section 15(g) sets forth certain requirements for broker-dealer transactions in penny stocks and Rule 15g-9(d)(1) incorporates the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.

The SEC generally defines a penny stock to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. Rule 3a51-1 provides that any equity security is a penny stock unless that security is:

Broker-dealers who sell penny stocks to persons other than established customers and accredited investors, are subject to additional sales practice requirements. An accredited investor is generally defined as a person with assets more than $1,000,000, excluding their principal residence, or annual income exceeding $200,000, or $300,000 together with their spouse.

For transactions covered by these rules, broker-dealers must make a special suitability determination for the purchase of such securities and receive the purchaser’s written consent to the transaction prior to the purchase. Additionally, the rules require the delivery by the broker-dealer to the client, prior to the first transaction, of a risk disclosure document relating to the penny stock market. A broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements must be sent to clients disclosing recent price information for the penny stocks held in the account and information on the limited market in penny stocks.

These requirements may be considered cumbersome by broker-dealers and impact the willingness of a broker-dealer to trade and/or make a market in our shares, which could affect the value at which our shares trade. Classification of the shares as penny stocks may affect the ability of stockholders to sell their shares and increases the risk of an investment in our shares.

Rule 144

A total of 22,400,419 shares of our common stock presently outstanding and not registered for resale under the registration statement effective as of February 11, 2020, are deemed to be “restricted securities” as defined by Rule 144 promulgated by the Securities Act. Rule 144 is the common means for a stockholder to resell restricted securities and for affiliates, to sell their securities, either restricted or non-restricted control shares. In general, under Rule 144 as currently in effect, a person (or persons whose shares are required to be aggregated), including a person who may be deemed an “affiliate” of a company of a company filing reports under the Exchange Act, who has beneficially owned restricted securities for at least six months may sell, within any three-month period, a number of shares that does not exceed the greater of:

Sales under Rule 144 are also subject to certain requirements as to the manner of sale, filing appropriate notice, and availability of current public information about the issuer. A stockholder of a reporting company who is not deemed to have been an affiliate at any time during the 90 days preceding a sale by such person, and who has held their shares for more than six months, may make unlimited resales under Rule 144, provided only that the issuer has available current public information about itself. A person who has not been an affiliate during the 90 days preceding a sale, and who has beneficially owned the restricted shares for at least one year, is entitled to sell such shares under Rule 144 without regard to any of the restrictions described above.

After a one-year holding period, a non-affiliate may make unlimited sales with no other requirements or limitations.

We cannot estimate the number of shares of common stock that our existing stockholders will elect to sell under Rule 144. Also, we cannot predict the effect any future sales under Rule 144 may have on the market price of our common stock, but such sales may have a substantial depressing effect on such market price.

Dividends Policy

We have never declared cash dividends on our common stock, nor do we anticipate paying any dividends on our common stock in the foreseeable future.

This item is not required for a smaller reporting company.

The following information should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Form 10-K.

Business Overview

Our company was organized as MYG Corp. under the laws of the State of Nevada on July 6, 2000 and underwent name changes to BisAssist, Inc. on December 21, 2000 and to Cody Ventures Corporation on October 11, 2004. On April 7, 2011, the company changed its name to Paw4mance Pet Products International, Inc. to reflect the business of distributing natural-based pet foods and treats. On September 26, 2014, the company changed its name to Fearless Films, Inc. in anticipation of the acquisition of Fearless Films (Canada). On November 14, 2014, the company completed the acquisition of Fearless Films (Canada), which became a wholly-owned subsidiary of the company. The intent of the acquisition was to engage in the business of providing professional services for short film and full-length feature film productions and related services under the guidance of the founder of Fearless Films (Canada), Victor Altomare.

Our subsidiary, Fearless Films (Canada), is an independent full-service production company and has been positioning itself to ultimately produces top quality entertainment. We intend to specialize in short film and feature film production in addition to script writing, copywriting, fulfillment and distribution. Because of a lack of adequate funding, we have not realized revenues since our acquisition, but management believes we are in a position to become fully operational with the infusion of new capital. We currently do not have definite plans for securing adequate funding, but are working diligently to be able to fund our operations. Since inception and prior to our acquisition, Fearless Films (Canada) has produced more than ten films and also a pilot for a series, The My Ciccio Show.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report.

Going Concern

Our independent auditors have expressed a going concern modification to their report to our financial statements indicating substantial doubt about our ability to continue as a going concern. To date we have incurred substantial losses and will require financing for working capital to meet future obligations. We anticipate needing additional financing on an ongoing basis for the foreseeable future unless our operations provide adequate funds, of which there can be no assurance. We most likely will satisfy future financial needs through the sale of equity securities, although we could possibly consider debt securities or promissory notes. We believe the most probable source of funds will be from existing stockholders and/or management, although there are no formal agreements to do so. If we are unable to sustain a public trading market for our shares, it will be more difficult to raise funds though the sale of common stock. We cannot assure you that we will be able to obtain adequate financing, achieve profitability, or to continue as a going concern in the future.

Forward-Looking and Cautionary Statements

This report contains forward-looking statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will” “should,” “expect,” “intend,” “plan,” anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or similar terms, variations of such terms or the negative of such terms. These statements are only predictions and involve known and unknown risks, uncertainties and other factors. Although forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment, actual results could differ materially from those anticipated in such statements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Results of Operations

For the year ended December 31, 2021 compared to the year ended December 31, 2020.

We did not realize revenues from operations during the years ended December 31, 2021 and December 31, 2020. While developing our business as a provider of video production services to professional video production companies, we have not had sufficient capital to begin full activities or to complete projects that have been initiated. During 2022 we hope to secure financing that will enable us to complete existing projects and develop marketing plans.

During the year ended December 31, 2021, total operating expenses were $1,192,317 compared to $2,317,276 in 2020. Operating expenses are reported in the following categories. General and administrative expenses were $4,054 in 2021 compared to $4.440 in 2020, essentially unchanged. Management fees were $59,982 in 2021 compared to $133,690 in 2020, a decrease of $73,708 (45%), attributed to the effect of new management contracts entered into in 2020. Professional fees during 2021 were $182,152 compared to $1,379,146 in 2020, a decrease of $1,196,994 (87%) that is primarily due to expenses of $1,168,378 for investor relations activities during 2020 not being repeated in 2021. Stock based compensation was nil for 2021 compared to $nil in 2020. Additionally, during 2021 we recorded consulting expenses of $946,129 compared to $800,000 in 2020 The consulting expenses mainly relate to investor relations activity and a change in consultants led to the increase in 2021 as compared to 2020

During 2021 we recorded a net loss of $37,000 for settlement of debt compared to a gain of $914,008 in 2020. In September of 2020 the Company entered into a Termination Agreement effective January 31, 2020. under which amounts owing under the Agreement were waived, resulting in a gain on settlement of $955,000, as explained in Note 10 of the financial statements. Also, during 2021 we recorded an interest expense of $21,892 compared to $20,910 in 2020. The interest expense reflects the fact that implied interest at the rate of 5% per annum has been accrued on all loans outstanding as of December 31, 2021 and 10% per annum on all notes payable. Further, in 2021 we recorded a loss on exchange of $8,654 compared to a loss $224,714 in 2020. The loss is the result of translations as the functional currency of our parent company is United States dollars and the functional currency of our subsidiary is Canadian dollars. We also incurred a financing cost of $50,000 in 2019, which is evidenced by a convertible promissory note issued to Crown Bridge Partners as a commitment fee related to the Equity Purchase Agreement entered into during 2019. This note also has a discount of $10,000 at the time of issuance which is being amortized over the term of the note. During the year ended December 31, 2021 no discount has been amortized as compared to amortization of $8,445 in 2020 as the note discount was fully amortized at the end of 2020.

As a result of the above, we reported a net loss of $1,242,555 for 2021 compared to a net loss of $1,207,909 for 2020. We recorded a foreign currency translation adjustment gain of $9,705 for 2021 compared to a foreign currency translation loss of $230,186 for 2020. Because the functional currency of our parent, Fearless Films, is United States dollars and the functional currency of our subsidiary, Fearless Films (Canada), is Canadian dollars, an adjustment is necessary. Thus, after the foreign currency translation adjustment, our comprehensive loss for 2021 was $1,252,260 ($0.04 per share) compared to a comprehensive loss for 2020 of $1,438,095 ($0.04 per share), Comprehensive income and loss per share calculations are diluted and made giving effect to the share amounts of common stock to be issued.

Liquidity and Capital Resources

At fiscal year ended December 31, 2021 compared to fiscal year ended December 31, 2020.

At December 31, 2021, we had total assets of $379,087, comprised of $1,816 in cash and $288,781 in prepaid expenses. At December 31, 2020, we had total assets of $135,419 consisting of $39,036 in cash and prepaid expenses of $7,983. The decrease in cash during fiscal 2021 is due to payments made against current liabilities. The increase in prepaid expenses during fiscal 2021 is attributed to early payments against costs of an investor relations agreement entered into in March of 2021. Total current liabilities at December 31, 2021 were $1,005,933 compared to $775,801, at December 31. 2020. Included in current liabilities are accounts payable that increased to $546,393 at December 31, 2021 from $357,971 at December 31, 2020, and loans payable that increased from $367,635 at December 31, 2020 to $378,519 at December 31, 2021. The increase in accounts payable was due to the timing of accruals for services that were rendered, but not fully paid in cash. The increase in loans payable during 2021 was attributed to the company entering into loan agreements with third parties raising total gross proceeds of $10,000. Additionally, accrued liabilities increased from $50,195 at December 31, 2020 to $81,021at December 31, 2021.

At December 31, 2021 we had a working capital deficit of $626,846 compared to a working capital deficit of $640,382 at December 31, 2020. The company has incurred recurring losses from operations and as at December 31, 2021 and December 31, 2020 had an accumulated deficit of $6,559,940 and $5,317,385, respectively. We continue to seek additional funding, most likely through the Equity Line, the sale of securities or securing additional debt, although currently we have no definite agreement of arrangement for additional funding other than the Equity Line.

As of December 31, 2021, we did not have sufficient cash to fund our operations for the next twelve months.

Our capital requirements going forward will consist of financing operations until we are able to reach a level of revenues and gross margins adequate to equal or exceed ongoing operating expenses. Except for the Equity Line, we do not have any credit agreement or source of liquidity immediately available to us.

Net Operating Loss Carryforward

We have accumulated a net operating loss carryforward of approximately $6,559,940 as of December 31, 2021. This loss carry-forward may be offset against future taxable income. The use of these losses to reduce future income taxes will depend on the generation of sufficient taxable income prior to the expiration of the net operating loss carryforward. In the event of certain changes in control, there will be an annual limitation on the amount of net operating loss carryforward that can be used. No tax benefit has been reported in the financial statements for the years ended December 31, 2020 and 2019 because it has been fully offset by a valuation reserve. The use of future tax benefit is undeterminable because we presently have no revenues.

Equity Purchase Agreement with Crown Bridge Partners, LLC

On December 3, 2019, we executed an Equity Purchase Agreement with Crown Bridge Partners, LLC, the Selling Stockholder, which was finalized and effected on December 12, 2019 (the “Equity Line”). Under the Equity Line, we have the right, but not the obligation, to sell to Crown Bridge Partners, and Crown Bridge Partners is committed to purchase, on an unconditional basis, shares of our common stock (the “Put Shares”) at an aggregate price of up to $5,000,000 (the “Maximum Commitment Amount”) for a period of up to three (3) years. The term of the Equity Purchase Agreement commenced on December 3, 2019 and will end on the earlier of (i) the date on which the Selling Stockholder has purchased Put Shares pursuant to the Equity Purchase Agreement equal to the Maximum Commitment Amount, (ii) December 3, 2022, or (iii) written notice of termination by the company.

The Equity Line provides the company with a $5,000,000 line of credit to be used by us for general corporate purposes. Under the Equity Purchase Agreement, we have the right, from time-to-time at our discretion, to deliver to Crown Bridge Partners a “put notice” stating the specified number of Put Shares and purchase price we intend to sell to Crown Bridge Partners, that it is obligated to purchase. The company’s right to deliver a put notice commences on the date a registration statement registering the Put Shares becomes effective. Upon delivery of a put notice, the company must deliver the Put Shares requested as Deposit Withdrawal at Custodian (DWAC) shares to the Selling Stockholder within two trading days. In connection with the transactions contemplated by the Equity Purchase Agreement, the company is required to register the Put Shares with the SEC.

The amount of proceeds the company receives pursuant to each put notice is determined by multiplying the number of Put Shares requested, by the applicable purchase price. The purchase price for each put notice shall be equal to 80% of the lesser of the (i) “market price,” defined as the lowest traded price per share for any trading day during the 15 trading days immediately preceding delivery of the put notice, or (ii) the valuation price, which is the lowest traded price of the shares during the five trading days following the clearing date associated with the applicable put notice. Within four trading days following the end of the valuation periods, the Crown Bridge Partners will deliver the total proceeds to the company via wire transfer.

Each put notice shall be (i) in a minimum amount not less than $10,000, and (ii) a maximum amount up to the lesser of (a) $175,000, or (b) 200% of the Average Daily Trading Value. Average Daily Trading Value is defined as the average trading volume of our common stock in the fifteen (15) trading days immediately preceding delivery of the respective put notice (the “pricing period”), multiplied by the lowest traded price of the of our shares during the pricing period. We may not deliver a new put notice until ten trading days after the clearing of the prior put notice. Because of these limitations, it is possible that over the term of the Equity line, the company may not have the ability to fully draw the entire $5,000,000 credit line.

In order to deliver a put notice, certain conditions set forth in the Equity Purchase Agreement must be met. In addition, the company is prohibited from delivering a put notice (i) if the purchase of the Put Shares by the Selling Stockholder pursuant to such put notice would, when aggregated with all other shares previously purchased under the Equity Line, exceed the Maximum Commitment Amount; or (ii) if the purchase of the Put Shares pursuant to the put notice would, when aggregated with all other company common stock then owned by the Selling Stockholder, result in the Selling Stockholder beneficially owning more than 4.99% of the then issued and outstanding shares of the company’s common stock.

Based upon the trading price of our common stock as of January 30, 2020, we would have issued an aggregate of 33,333,334 pre-split shares of common stock under the Equity Line if the entire $5,000,000 amount of potential shares issuable to Crown Bridge Partners had been drawn. Such shares would represent approximately 10.5% of our outstanding common stock as of January 30, 2020, resulting in significant ownership dilution to our existing common stock stockholders.

As a term of the Equity Purchase Agreement, we entered into a Registration Rights Agreement with Crown Bridge Partners, whereby we agreed to register for resale by the Selling Stockholder the shares of common stock purchased pursuant to the Equity Purchase Agreement. Accordingly, we filed a registration statement with the SEC on Form S-1 within 45 days of the date of the Registration Rights Agreement. The registration statement, of which this report is a part, covers the resale of shares to be issued under the Registration Rights Agreement. We also agreed to use our reasonable best efforts to keep the registration statement effective until the earlier of (i) the date the Selling Stockholder may sell all of the Put shares without restriction pursuant to Rule 144, and (ii) the date on which the Selling Stockholder shall have sold all of the Put Shares covered by the registration statement.

Also in connection with the Equity Purchase Agreement, we issued to Crown Bridge Partners, as a commitment fee, a $50,000 convertible promissory note that matures on June 3, 2020. The note may not be prepaid, bears interest at the rate of ten percent (10%) per annum, and is convertible at any time by the holder for all or any part or the outstanding principal amount and accrued interest into shares of Fearless Films common stock at the conversion price of $0.25 per share. Additionally, Crown Bridge Partners shall withhold $5,000 from the first put notice for reimbursement of its expenses relating to preparation of the Equity Purchase Agreement.

The note bears an original discount of $10,000 to be amortized over the term of the note. During the year ended December 31, 2019, $1,555 has been amortized and during the year ended December 31,2020 $8,445 has been amortized to the statement of operations. On July 23, 2020, the Company issued 1,000,000 pre-split shares of common stock pursuant to a settlement agreement for the outstanding convertible note.

Availability of Additional Funds

Our capital requirements going forward will consist of financing operations until we are able to reach a level of revenues and gross margins adequate to equal or exceed ongoing operating expenses. Except for the Equity Line, we do not have any credit agreement or source of liquidity immediately available to us.

Historically, our operations have primarily been funded through proceeds from existing stockholders in exchange for equity and debt. At December 31, 2021, we had a cash balance of $1,816. There are no commitments in place, other than the Equity Line, for new financing as of the date of this report and there can be no assurance that we will be able to obtain funds on commercially acceptable terms, if at all. We expect to have ongoing needs for working capital in order to fund operations plus new film projects. To that end, we may be required to raise additional funds through other equity or debt financing. However, there can be no assurance that we will be successful in securing additional capital. If we are unsuccessful, we may need to (a) initiate cost reductions; (b) forego business development opportunities; (c) seek extensions of time to fund liabilities; or (d) seek protection from creditors.

Although the Equity Line provides that the Selling Stockholder must purchase the shares of common stock put to them, there are limits as to the amount of any put notice. The maximum amount of a single put notice is the lesser of (a) $175,000, or (b) 200% of the Average Daily Trading Value. Because Average Daily Trading Value is the average trading volume of our common stock in the fifteen (15) trading days immediately preceding delivery of the respective put notice, multiplied by the lowest traded price of the of our shares during the pricing period, the amount could be limited by a low stock price and low trading volume. A new put notice cannot be made until ten trading days after the clearing of the prior put notice. Thus, there may be periods when we are unable to rely on the Equity Line for adequate funds to satisfy immediately current obligations.

If we are unable to generate adequate cash from operations and if we are unable to find adequate sources of funding, it may be necessary for us to sell all or a portion of our assets, enter into a business combination, or reduce or eliminate operations. These possibilities, to the extent available, may be on terms that result in significant dilution to our stockholders or that result in our stockholders losing all of their investment in our company.

If we are able to raise additional capital, we do not know what the terms of any such capital raising would be. In addition, any future sale of our equity securities would dilute the ownership and control of your shares and could be at prices substantially below prices at which our shares currently trade. Our inability to raise capital could require us to significantly curtail or terminate our operations. We may seek to increase our cash reserves through the sale of additional equity or debt securities. The sale of convertible debt securities or additional equity securities could result in additional and potentially substantial dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations and liquidity. In addition, our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties.

Our audited consolidated financial statements included elsewhere in this report have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplate our continuation as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

Foreign Currency Translation

The functional currency of our parent company is United Stated dollars and the functional currency of our subsidiary, Fearless Films (Canada), is Canadian dollars. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included in net loss for the year. In translating financial statements of the company’s Canadian subsidiary from its functional currency into the company’s reporting currency of United States dollars, balance sheet accounts are translated using the closing exchange rate in effect at the balance sheet date. Income and expense accounts are translated using an average exchange rate prevailing during the reporting period. Adjustments resulting from the translation, if any, are included in cumulative other comprehensive income (loss) in stockholders’ equity. To date, we have not entered into derivative instruments to offset the impact of foreign currency fluctuations.

Business Trends and Forecast

Management believes that consumption of video is increasing due to the rapid expansion of streaming video. This trend is a result of more and more people augmenting their use of, or replacing broadcast television with, streaming video to watch their favorite content on services like Netflix, Amazon Prime, Hulu Plus, HBO Now and Gaia. The streaming video market includes various free, ad-supported and subscription service offerings focused on various genres, including films, broadcast and original series, fitness and educational content.

Our goal is to position Fearless Films in the streaming video landscape to offer a wide variety of exclusive and unique content. This would provide a complementary offering to other mostly entertainment-based streaming video services. Our original content is developed and produced in-house in our production studios in Concord, Ontario. By offering exclusive and unique content over a streaming service, we believe we will be able to significantly expand our target subscriber base.

While the shift to streaming delivery is strong, Fearless Films also intends to develop content that appeals to more traditional outlets, such as movie theatre chains.

Inflation

In the opinion of management, inflation has not and will not have a material effect on our operations in the immediate future. Management will continue to monitor inflation and evaluate the possible future effects of inflation on our business and operations.

Recent Accounting Pronouncements

The company has evaluated recent accounting pronouncements and their adoption has not had nor is not expected to have a material impact on the company’s financial position or statements.

Off-balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies

JOBS Act

The JOBS Act provides that, so long as a company qualifies as an “emerging growth company,” it will, among other things:

It should be noted that notwithstanding our status as an emerging growth company, we would be eligible for these exemptions because of our status as a “smaller reporting company” as defined by the Exchange Act.

Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to take advantage of the benefits of this extended transition period and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

This item is not required for a smaller reporting company.

The consolidated financial statements and related notes are included as part of this report as indexed in the appendix beginning on page F-1, immediately following the signature page.

Not applicable.

Evaluation of Disclosure Controls and Procedures. Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Disclosure and control procedures are also designed to ensure that such information is accumulated and communicated to management, including the chief executive officer and principal accounting officer, to allow timely decisions regarding required disclosures.

As of the end of the fiscal year covered by this annual report, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and principal accounting officer, of the effectiveness of the design and operation of our disclosure controls and procedures. In designing and evaluating the disclosure controls and procedures, management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives. Additionally, in evaluating and implementing possible controls and procedures, management is required to apply its reasonable judgment. Based on the evaluation described above, our management, including our principal executive officer and principal accounting officer, concluded that, as of December 31, 2021, our disclosure controls and procedures were not effective due to a lack of adequate segregation of duties and the absence of an audit committee.

Changes in Internal Control Over Financial Reporting. Management has evaluated whether any change in our internal control over financial reporting occurred during the fiscal year ended December 31, 2021. Based on its evaluation, management, including the chief executive officer and principal accounting officer, has concluded that there has been no change in our internal control over financial reporting during fiscal 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act of 1934. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles. Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2021 using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013). Based on its evaluation, our management concluded that there are material weaknesses in our internal control over financial reporting. We lack full time personnel in accounting and financial staff to sufficiently monitor and process financial transactions in an efficient and timely manner. This allows for insufficient segregation of duties and a lack of multiple levels of supervision and review. Our history of losses has severely limited our budget to hire and train enough accounting and financial personnel needed to adequately provide this function. Consequently, we lacked sufficient technical expertise, reporting standards and written policies and procedures. A material weakness is a deficiency, or a combination of control 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.

This Form 10-K does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting because the attestation report requirement has been removed for “smaller reporting companies” under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Not applicable.

PART III

The following table sets forth the name, age and position of our present directors and executive officers.

On September 27, 2020, our Board of Directors accepted the resignation of Dennis dos Santos as a director, President, CEO and Chairman of the Board. Mr. dos Santos also resigned as the Company’s Interim Chief Financial Officer and Acting Principal Accounting Officer and all positions held in our Canadian subsidiary, Fearless Films (Canada). Additionally, the Board accepted the resignation of Ann Gerard as a Fearless Films director. Eugene Gelsomino, an incumbent director, retained his position as a director.

Also on September 27, 2020, three new directors were appointed to the Board of Directors: Victor Altomare, Robert Davi and Goran Kalezic. Mr. Altomare was appointed to serve as our new President and CEO, and Interim Chief Financial Officer and Acting Principal Accounting Officer.

We presently anticipate considering new, qualified persons to become directors in the future, although no new appointments or arrangements have been made as of the date hereof.

All directors serve for a one-year term until their successors are elected or they are re-elected at the annual stockholders’ meeting. Officers hold their positions at the pleasure of the board of directors, absent any employment agreement, of which none currently exists or is contemplated.

There is no arrangement, agreement or understanding between any of the directors or officers and any other person pursuant to which any director or officer was or is to be selected as a director or officer. Also, there is no arrangement, agreement or understanding between management and non-management stockholders under which non-management stockholders may directly or indirectly participate in or influence the management of our affairs.

The business experience of each person listed above during the past five years is as follows:

Victor Altomare co-founded Fearless Films (Canada) in 2010. He is the President/CEO of this operating subsidiary. Victor Altomare is an actor and producer, known for The Great Chameleon (2012), Get the Sucker Back (2015) and Bag the Wolf (2000). Mr. Altomare studied acting at Academy of Canadian Cinema & Television in Toronto before studying under Hollywood director Tom Logan. Mr. Altomare has been involved in more than 50 productions, including more than 10 films whereby he was the production lead.

Robert Davi is an award-winning actor, screenwriter, director, producer and jazz vocalist with over 140 film and TV credits. From his portrayal of the opera singing baddie in The Goonies and one of the most popular James Bond villains, Franz Sanchez in License to Kill, to FBI Special Agent Big Johnson in Die Hardor Al Torres in Showgirls, to most recently Leo Marks in The Iceman, Robert Davi is one of the film industry’s most recognized tough guys. He has also starred on the small screen in hit shows like Profiler, Stargate Atlantis, Criminal Minds and CSI. He is also a top vocalist in interpreting the Great American Songbook, playing to sold-out audiences at venues like the Venetian in Las Vegas as a headliner, the Harry Chapin Theater in East Meadow, Long Island and the Orleans in Las Vegas. His debut album, Davi Sings Sinatra -On the Road to Romance, produced by Phil Ramone rose to number six for several weeks on Billboard’s Jazz Charts.

Goran Kalezic was a co-founder of Fearless Films (Canada) and is a writer and director, known for The Great Chameleon(2012) –recognized as a revolutionary comedy on major digital platforms, The Bartender(2005) –voted audience favorite at Indyfest ,Bag the Wolf(2000) –played nationwide on primetime networks, and Only Minutes (1998) –Finalist at the Hollywood Film Festival. He is also the author of Dostoevsky’s Anarchists: A Screenplay Adaptation of Dostoevsky’s Demons(2018).

Eugene Gelsomino has been a Director of Fearless Films since January of 2018. Since 2016 he has acted as managing partner at Church Aperitivo Bar on Queen St W in Toronto, Ontario. Mr. Gelsomino’s main focus is on creating partnerships and marketing strategies to generate and drive business as well as to facilitate the booking of private and corporate functions. From 2013 to the present, he has been co-producer with Fearless Films, responsible for ensuring that projects stay on their production schedules and within budget. He is also responsible for post-production efforts including arranging and selling film distribution rights

Committees of the Board of Directors

Mr. Davi, Mr. Kalezic. and Mr. Gelsomino are deemed to be independent directors. Currently we do not have any standing committees of the board of directors. Until formal committees are established, our board of directors will perform some of the functions associated with a nominating committee and a compensation committee, including reviewing all forms of compensation provided to our executive officers, directors, consultants and employees, including stock compensation. The board will also perform the functions of an audit committee until we establish a formal committee.

None of our officers, directors or control persons has had any of the following events occur:

Code of Ethics

We currently do not have a code of ethics. It is our intention during the coming year to adopt a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions.

Compliance With Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of our common stock, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. We believe that the requisite initial reports have been filed by the respective persons.

The following represents the annual executive compensation through the company’s past 3 years ended December 31, 2020 for (i) Dennis dos Santos, the company’s former President and CEO; and (ii) Victor Altomare, President and CEO

Summary Compensation Table for 2020

The following table represents compensation to company directors during the years ended December 31, 2020, 2019 and 2018. Mr. Altomare’s ⁽⁴⁾ compensation as a director and CEO is depicted in the table above. Mr. dos Santos’s compensation as former Director and CEO is depicted in the table above. MR. dos Santos resigned as director and CEO effective September 27, 2020.

Directors Compensation Table for 2020

Employment Agreements

The company has entered into a consulting agreement with Victor Altomare, President of its subsidiary Fearless Films (Canada), which was effective as of January 1, 2019. The consulting agreement has an indefinite term, which can be terminated by either party with a requisite 180 days’ written notice to the other party, or at any time by mutual agreement. Under the terms of the consulting agreement, the company has agreed to pay Mr. Altomare $5,000 per month and reimburse Mr. Altomare for out-of-pocket business expenses. The consulting agreement also contains standard confidentiality and non-interference provisions.

The following table sets forth information as of April 15, 2021, to the best of our knowledge, with respect to each person believed to be the beneficial owner of more than 5% of our outstanding common stock, each director and executive officer and by all directors and executive officers as a group. For purposes of disclosure, a person is deemed to be the beneficial owner of any shares of common stock (i) over which the person has or shares, directly or indirectly, voting or investment power, or (ii) of which the person has a right to acquire beneficial ownership at any time within 60 days after the date of this report. “Voting power” is the power to vote or direct the voting of shares and “investment power” includes the power to dispose or direct the disposition of shares.

Except as set forth below, we have not entered into material transactions with any officer, director, nominee for election as director, or any stockholder owning greater than five percent (5%) of our outstanding shares, nor any member of the above referenced individuals’ immediate family.

On September 21, 2018, the company entered into an agreement with Victor Altomare, President of Fearless Films (Canada), whereby Mr. Altomare converted $1,133,949.80 in debt owed him by the company into 161,992,828 pre-split shares of common stock. The debt has accumulated since November 2014 and carried no interest.

The following tables present for each of the last two fiscal years the aggregate fees billed in connection with the audits of our financial statements and other professional services rendered by our current independent registered public accounting firm Fruci & Associates II, PLLC:

Audit fees represent the professional services rendered for the audit of our annual financial statements and the review of our financial statements included in quarterly reports, along with services normally provided by the accounting firm in connection with statutory and regulatory filings or engagements. Audit-related fees represent professional services rendered for assurance and related services by the accounting firm that are reasonably related to the performance of the audit or review of our financial statements that are not reported under audit fees.

Tax fees represent professional services rendered by the accounting firm for tax compliance, tax advice, and tax planning. All other fees represent fees billed for products and services provided by the accounting firm, other than the services reported for in the other categories.

PART IV

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.

Consolidated Financial Statements

Fearless Films, Inc.

For the years ended December 31,2021 and 2020

Fearless Films, Inc.

Consolidated Financial Statements

For the years ended December 31,2021 and 2020

Table of contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Fearless Films, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Fearless Films, Inc. and Subsidiary (“the Company”) as of December 31, 2021 and 2020, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ deficiency, and cash flows for each of the years in the two-year period ended December 31, 2021, 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, 2021 and 2020 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has an accumulated deficit, recurring net losses, and a significant working capital deficiency. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. 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 judgments. We determined that there were no critical audit matters.

Fearless Films, Inc.

CONSOLIDATED BALANCE SHEETS

(Expressed in US dollars)

See accompanying notes

Fearless Films, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Expressed in US dollars)

See accompanying notes

Fearless Films, Inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY

(Expressed in US dollars)

See accompanying notes

Fearless Films, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in US dollars)

See accompanying notes

Fearless Films, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in US dollars)

1. NATURE OF OPERATIONS

Fearless Films, Inc. (the “Company “) was incorporated in the State of Nevada as MYG Corp. on July 06, 2000. The Company changed its name from time to time and its latest name change was from Paw4mance Pet Products International, Inc. to Fearless Films, Inc. effective from November 19, 2014.

Pursuant to Share Exchange Agreement dated August 5, 2014 and its subsequent amendments effective from that date, the Company acquired 100% of the issued and outstanding shares of a Canadian based entity, Fearless Films Inc. (“Fearless”) in exchange for 1,000,000 Preferred Shares and 30,000,000 Common Shares of the Company. As a result of the Share Exchange, Fearless is now a wholly-owned subsidiary of the Company. This transaction was accounted for as a reverse merger. Consequently, the assets and liabilities and the historical operations reflected in the consolidated financial statements for the periods prior to August 5, 2014 are those of Fearless and are recorded at the historical cost basis. After August 5, 2014, the Company’s consolidated financial statements include the assets and liabilities of both Fearless and the Company and the historical operations of both after that date as one entity. Fearless was incorporated on January 23, 2008 under the laws of the Province of Ontario, Canada. The Company is engaged in providing post production facilities and services and on-site and off-site off-line suites for television series and feature films. Both the Companies did not have any revenue since inception, as these were primarily engaged in the business development activities.

Pursuant to Share Exchange Agreement as explained above, the Company also effected a reverse split of its common stock by 1 share for 1,000 shares.

On October 26, 2020 the Company approved a reverse stock split of its issued and outstanding shares of common stock on a one share for 10 shares (1:10) basis. The reverse stock split was effected on December 8, 2020 with no change in par value. As a result of reverse stock split, the issued and outstanding common stock shares decreased to 32,295,157.

2. BASIS OF PRESENTATION, MEASUREMENT AND CONSOLIDATION

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and are expressed in United States dollars (“USD”).

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair statement of the financial position, results of operations and cash flows for the years ended December 31,2021 and 2020 have been included. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Fearless. Significant intercompany accounts and transactions have been eliminated.

3. GOING CONCERN

The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred recurring losses from operations and as at December 31, 2021 and December 31, 2020 and had a working capital deficiency of $715,246 and $728,782 respectively and an accumulated deficit of $6,559,940 and $5,317,385 respectively. Management anticipates the Company will attain profitable status and improve its liquidity through continued business development and additional debt or equity investment in the Company. Management is pursuing various sources of financing.

The Company’s continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance that the necessary debt or equity financing will be available or will be available on terms acceptable to the Company, in which case there may be substantial doubt that the Company will be able to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the

Fearless Films, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in US dollars)

3. GOING CONCERN (continued)

normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in the consolidated financial statements. The consolidated financial statements do not include any adjustments relating to the recoverability of recorded asset amounts that might be necessary should the Company be unable to continue in existence.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

Cash includes cash on hand and balances with banks.

Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Areas involving significant estimates and assumptions include, fair value of stock options or services offered, deferred income tax assets and related valuation allowance, and accruals. Actual results could differ from those estimates. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known.

Earnings (Loss) Per Share

The Company has adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 260-10 which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. Diluted earnings per share exclude all potentially dilutive shares if their effect is anti-dilutive. Series A are convertible into common, and potentially dilutive.

Foreign Currency Translation

The functional currency of the parent Company is United States dollar and the functional currency of the subsidiary is Canadian dollar. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included in net loss for the year. In translating the financial statements of the Company’s Canadian subsidiary from its functional currency into the Company’s reporting currency of United States dollars, balance sheet accounts are translated using the closing exchange rate in effect at the balance sheet date and income and expense accounts are translated using an average exchange rate prevailing during the reporting period. Adjustments resulting from the translation, if any, are included in accumulated other comprehensive income (loss) in stockholders’ equity. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

Fearless Films, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in US dollars)

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Advertising and Marketing Costs

Advertising and marketing costs are expensed as incurred. During the years ended December 31,2021 and December 31, 2020, the Company incurred $2,421 and $1,325 respectively in advertising and marketing costs included in General and Administrative costs.

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). This standard provides a single set of guidelines for revenue recognition to be used across all industries and requires additional disclosures. The updated guidance introduces a five-step model to achieve its core principal of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the updated guidance effective January 1,2018 using the full retrospective method.

Under ASC 606, in order to recognize revenue, the Company is required to identify an approved contract with commitments to preform respective obligations, identify rights of each party in the transaction regarding goods to be transferred, identify the payment terms for the goods transferred, verify that the contract has commercial substance and verify that collection of substantially all consideration is probable. The adoption of ASC 606 did not have an impact on the Company’s operations or cash flows since the Company has not started earning any revenue.

Fair Value of Financial Instruments

ASC 820 defines fair value, establishes a framework for measuring fair value and expands required disclosure about fair value measurements of assets and liabilities. ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

● Level 1 – Valuation based on quoted market prices in active markets for identical assets or liabilities.

● Level 2 – Valuation based on quoted market prices for similar assets and liabilities in active markets.

● Level 3 – Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s best estimate of what market participants would use as fair value.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments or interest rates that are comparable to market rates.

Fearless Films, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in US dollars)

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

These financial instruments include cash and accounts payable. The Company’s cash, which is carried at fair value, is classified as a Level 1 financial instrument. The Company’s bank accounts are maintained with financial institutions of reputable credit, therefore, bear minimal credit risk.

Intangible Assets

Intangible assets are initially valued at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Intangible assets with definite lives are amortized over their estimated useful lives and are reviewed for impairment if indicators of impairment arise. Intangible assets with indefinite lives are tested for impairment within one year of acquisitions or annually and whenever indicators of impairment exist. The fair value of intangible assets are compared with their carrying values, and an impairment loss would be recognized for the amount by which the carrying amount exceeds its fair value. The Company considers the intangibles acquired as assets with indefinite life and so not amortized. Acquired films rights have a three-year development limitation, after which if development has not started the film assets are to be recorded as impaired.

Convertible Notes Payable

The Company accounted for conversion options embedded in convertible notes in accordance with ASC 815. ASC 815 generally requires companies to bifurcate conversion options embedded in convertible notes from their host instruments and to account for them as free-standing derivative financial instruments. ASC 815 provides for an exception to this rule when convertible notes, as host instruments, are deemed to be conventional, as defined by ASC 815-40.

The Company accounts for convertible notes deemed conventional and conversion options embedded in non-conventional convertible notes which qualify as equity under ASC 815, in accordance with the provisions of ASC 470-20, which provides guidance on accounting for convertible securities with beneficial conversion features. Accordingly, the Company records, as a discount to convertible notes, the intrinsic value of such conversion options based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt.

Stock Based Compensation

The Company accounts for share-based payments in accordance with the provision of ASC 718, which requires that all share-based payments issued to acquire goods or services, including grants of employee stock options, be recognized in the consolidated statement of operations based on their fair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to share-based awards is recognized over the requisite service period, which is generally the vesting period.

The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the guidelines in ASC 718. The Company issues compensatory shares for services including, but not limited to, executive, management, accounting, operations, corporate communication, financial and administrative consulting services.

Fearless Films, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in US dollars)

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recently Issued Accounting Pronouncements

On May 3, 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Issuers should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard. Early adoption is permitted, including adoption in an interim period. If an issuer elects to early adopt the new standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The Company is currently evaluating the potential impact but does not believe there will be an impact of the adoption of this standard on its results of operations, financial position and cash flows and related disclosures.

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible debt instruments and convertible preferred stock by reducing the number of accounting models and the number of embedded conversion features that could be recognized separately from the primary contract. The update also requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share. The new guidance is effective for annual periods beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. This update can be adopted on either a fully retrospective or a modified retrospective basis. The Company is currently evaluating the potential impact but does not believe there will be an impact of the adoption of this standard on its results of operations, financial position and cash flows and related disclosures

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 eliminated certain exceptions and changed guidance on other matters. The exceptions relate to the allocation of income taxes in separate company financial statements, tax accounting for equity method investments and accounting for income taxes when the interim period year-to-date loss exceeds the anticipated full year loss. Changes relate to the accounting for franchise taxes that are income-based and non-income-based, determining if a step up in tax basis is part of a business combination or if it is a separate transaction, when enacted tax law changes should be included in the annual effective tax rate computation, and the allocation of taxes in separate company financial statements to a legal entity that is not subject to income tax. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the potential impact but does not believe there will be an impact of the adoption of this standard on its results of operations, financial position and cash flows and related disclosures.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets. This Update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the Update is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be affected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. The new standard is effective for fiscal years and interim periods within those years beginning after December 15, 2022

5. INTANGIBLE ASSETS

Intangible assets were comprised of the following at:

 SCHEDULE OF INDEFINITE-LIVED INTANGIBLE ASSETS

Fearless Films, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in US dollars)

5. INTANGIBLE ASSETS (continued)

All intangible assets are considered to be indefinite life assets and not amortized. Acquired films rights have a three-year development limitation, after which if development has not started the film assets are to be recorded as impaired.

6. ACCOUNTS PAYABLE

As at December 31, 2021, total accounts payable include $57,651 (December 31, 2020: $16,504) payable to directors of the Company.

7. LOANS PAYABLE

On July 1, 2021, the Company entered into a loan agreement with a third party for $50,000. The loan is unsecured, bears interest at 5% per annum, and repayable on demand within 180 days of written notice of such demand. As at December 31, 2021, total gross proceeds received against this loan are $10,800.

As at December 31, 2021, the Company owed $378,519 (2020: $367,635) under various loan agreements with third parties and shareholders. All loans are unsecured, interest free and repayable on demand within 180 days of written notice of such demand. Implied interest at the rate of 5% per annum has been accrued on all loans outstanding as of December 31, 2021.

As at December 31, 2021, accrued liabilities includes interest on loans payable of $301 and implied interest on loans payable of $49,003.

8. STOCKHOLDERS’ DEFICIENCY

Share Exchange Agreement

As explained in Note 1 to the consolidated financial statements, on August 5, 2014 the Company acquired 100% of the issued and outstanding shares of Fearless Films Inc. (“Fearless”) in exchange for 1,000,000 Preferred Shares and 30,000,000 Common Shares of the Company. As a result, Fearless became a wholly owned subsidiary of the Company.

Authorized stock

The Company is authorized to issue 500,000,000 common shares with a par value of $0.001 and 20,000,000 preferred shares with a par value of $0.001.

Common Stock

As explained in Note 1 to the consolidated financial statements, on September 23, 2014, the Board of Directors and stockholders of the Company approved a Certificate of Amendment to its Articles of Incorporation for a 1:1000 Reverse split of its Common Stock with shares rounded up to the nearest whole number. The Reverse split solely effected the issued and outstanding Common Stock and did not have any effect on the Authorized Common Stock. As a result of the Reverse split, the issued and outstanding Common Stock of the Company decreased from 155,085,275 shares prior to the Reverse split to 155,289 shares following the Reverse split.

Fearless Films, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in US dollars)

8. STOCKHOLDERS’ DEFICIENCY (continued)

As explained in Note 1 to the consolidated financial statements, on September 23, 2014, the Board of Directors and stockholders of the Company approved a Certificate of Amendment to its Articles of Incorporation for a 1:1000 Reverse split of its Common Stock with shares rounded up to the nearest whole number. The Reverse split solely effected the issued and outstanding Common Stock and did not have any effect on the Authorized Common Stock. As a result of the Reverse split, the issued and outstanding Common Stock of the Company decreased from 155,085,275 shares prior to the Reverse split to 155,289 shares following the Reverse split.

As explained in Note 1 to the consolidated financial statements, on October 26, 2020, the Board of Directors and stockholders of the Company approved a Certificate of Amendment to its Articles of Incorporation for a 1:10 Reverse split of its Common Stock with shares rounded up to the nearest whole number. The Reverse split solely effected the issued and outstanding Common Stock and did not have any effect on the Authorized Common Stock. As a result of the Reverse split, the issued and outstanding Common Stock of the Company decreased from 322,944,837 shares prior to the Reverse split to 32,295,157 shares following the Reverse split and $290,649 was reclassified from Common Stock to Additional Paid-In Capital.

On June 1, 2020, the Company entered into private placement agreements with shareholders for issue of 666,667 shares at a price of $1.50 per common share for a total of $1,000,000 gross proceeds. As at December 31, 2021 gross proceeds received are $657,923. As at December 31, 2021, 337,900 shares have been issued and 100,715 shares are included in common stock to be issued.

On June 15, 2020, the Company announced their decision to purchase the film “The Lunatic” from the President and CEO of the operating subsidiary. The purchase price will be in the form of common shares and the number of shares will be set by an independent appraisal of the film expected to take place during the fourth quarter of 2022.

On June 17, 2020, the Company announced the acquisition of FilmOla.com, a website for aficionados of film and which can provide a platform for distribution for the Company’s media properties. Payment for this acquisition was in the form of 100,000 common shares of the Company. As at December 31, 2021, these shares have been issued and fair valued at $52,000 based on market price at the time of issue and included in intangible assets.

On June 24, 2020, the Company announced the acquisition of rights to the film, Only Minutes, an addition to the company’s growing library of media titles. Payment for this acquisition was in the form of 20,000 common shares of the Company. As at December 31, 2021, these shares have been issued and fair valued at $10,400 based on market price at the time of issue and included in intangible assets.

On July 1, 2020, the Company entered into private placement agreements with shareholders for issue of 333,333 shares at a price of $1.50 per common share for a total of $500,000 gross proceeds. As at December 31, 2021 gross proceeds received are $402,615 and the respective 268,410 shares are included in common stock to be issued.

On July 1, 2020, the Company entered into a private placement agreement with a third party for issue of 333,333 shares at a price of $1.50 per common share for a total of $500,000 gross proceeds of. As at December 31, 2021 gross proceeds received are $451,043. As at December 31, 2021, 32,252 shares have been issued and 268,443 shares are included in common stock to be issued.

On July 28, 2020, the Company announced the acquisition of rights to the film, In the Lair, an addition to the company’s growing library of media titles. Payment for this acquisition was in the form of 20,000 common shares of the Company. As at December 31, 2021, these shares have been issued and fair valued at $10,400 based on market price at the time of issue and included in intangible assets.

Fearless Films, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in US dollars)

8. STOCKHOLDERS’ DEFICIENCY (continued)

On August 24, 2020, the Company announced the acquisition of film script Dead Bounty, another significant addition to the company’s growing portfolio of films and intellectual property. Payment for this acquisition was in the form of 30,000 common shares of the Company. As at December 31, 2021, these shares have been issued and fair valued at $15,600 based on market price at the time of issue and included in intangible assets.

On January 30, 2021, the Company issued 1,600,000 shares of common stock with a fair value of $272,000 to settle a accounts payable $320,000, resulting in a gain of $48,000. The fair value of the common stock was determined based on the closing price of the Company’s common stock on the date of issuance (Note 10).

On May 3, 2021, the Company authorised to issue 5,000,000 shares of common stock with a fair value of $900,000 to settle a accounts payable of $815,000, resulting in a loss of $85,000. The fair value of the common stock was determined based on the closing price of the Company’s common stock on the date of settlement. As at December 31, 2021, these shares have not been issued and included in common stock to be issued. (Note 10).

On June 1, 2021, the Company entered into a private placement agreement with a third party for issue of 666,667 shares at a price of $0.15 per common share for a total of $100,000 gross proceeds. As at December 31, 2021 gross proceeds received are $15,796. As at December 31, 2021, these shares have not been issued and are included in common stock to be issued.

As at December 31, 2021, the Company has 33,895,157 (December 31, 2020: 32,295,157) shares issued and outstanding common stock (comprising 22,400,419 restricted stock and 11,494,738 unrestricted stock).

Preference Stock

On June 25, 2014, the Board of Directors authorized the following designations for the class of 20,000,000 Preference Shares of the Company of $ 0.001 par value per share:

On August 5, 2014, the Company issued 1,000,000 Preference Stock Series “A” pursuant to Share Exchange Agreement.

As at December 31, 2021 and December 31, 2020, the Company has 1,000,000 outstanding restricted Preference Stock.

Fearless Films, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in US dollars)

9. RELATED PARTY TRANSACTIONS AND BALANCES

The Company’s transactions with related parties were carried out on normal commercial terms and in the course of the Company’s business. Other than those disclosed elsewhere in the financial statements, the related party transactions and balances are as follows:

On January 1, 2019, the Company entered into a consulting agreement with a shareholder. Pursuant to this agreement, the compensation is $5,000 per month and the duration of the agreement is open until terminated by either party. These fees are included in the Management Fees.

During the year ended December 31, 2019, the Company entered into loan agreements for $184,000 with a shareholder who is also the brother of the President and CEO of the Company. Pursuant to the loan agreement, the loan is unsecured, interest free and repayable on demand within 180 days of written notice of such demand.

On January 1, 2020, the Company entered into a loan agreement for $28,000 with a shareholder who is also the brother of the President and CEO of the Company. Pursuant to the loan agreement, the loan is unsecured, interest free and repayable on demand within 180 days of written notice of such demand.

On June 1, 2020, the Company entered into a share subscription agreement for 233,333 shares of the Company at $1.50 per share for a total of $350,000, with a shareholder who is also the brother of the President and CEO of the Company. As at December 31, 2021 gross proceeds received are $67,000. As at December 31, 2021, 31,333 shares have been issued and 13,333 shares are included in common stock to be issued.

On June 15, 2020, the Company announced their decision to purchase the film “The Lunatic” from the President and CEO of the Company. The purchase price will be in the form of common shares and the number of shares will be set by an independent appraisal of the film expected to take place during the fourth quarter of 2022

Management fees for the year ended December 31, 2021 represent charges from directors of $59,982 (2020: $133,690). Accounts payable as at December 31, 2021 and December 31, 2020 include $57,650 and $254,922, respectively, due to the directors in connection with management fees.

As at December 31, 2021, all loans from related parties remain unpaid

10. COMMITMENTS

On May 11, 2020, the Company entered into an agreement with a company who is to assist with investor relations efforts aimed at increasing the investment community’s awareness of Fearless Films (OTC: FERL). Fees for these services are to be mutually agreed as and when services are provided, and the agreement will remain valid unless terminated prior to the 1st of any month. Either party may terminate the agreement upon written notice to the other party. As at December 31, 2021, the contract has not been terminated.

Fearless Films, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in US dollars)

10. COMMITMENTS (continued)

On January 8, 2021, the Company entered into an agreement with a company for consulting services and to gain access to a premier investor intelligence and communications platform built to track shareholders’ behaviors and trends and manage investor outreach. Initial term of the agreement is one year and will automatically renew on a month-to-month basis after the first year until either party gives the other party written notice of non-renewal at least 30 days prior to the expiration of the then-current term “Renewal Term”. Pursuant to the agreement, fees for the first year were $320,000 to be paid on effective date of agreement. Additional Fees may be assessed if the Depository Trust Company (“DTC”) or Non-Objecting Beneficial Owner (“NOBO”) lists exceed 5,000 Stakeholders or the frequency of the imports exceeds once per calendar week for DTC and once per calendar month for NOBO. During the year ended December 31, 2021, $302,796 (2020: $nil) was included in consulting expenses. As at December 31, 2021, $17,204 was included in prepaid expenses and is to be expensed out over the period to January 21, 2022.

On January 30, 2021, the Company issued 1,600,000 common stock shares in settlement of the first-year fees of $320,000. At date of issue, the shares were fair valued at $272,000 resulting in a gain of $48,000. The fair value of the common stock was determined based on the closing price of the Company’s common stock on the date of issuance.

On March 23, 2021, the Company entered into an agreement with a company who is to assist with investor relations efforts aimed at increasing the investment community’s awareness of Fearless Films (OTC: FERL). Fees for these services are to be $100,000 per month and the agreement will remain valid unless terminated prior to the 1st of any month. Either party may terminate the agreement upon written notice to the other party. On May 3, 2021, the Company re-negotiated the fees of $100,000 per month and agreed to pay $815,000 for the next 12 months from May 1, 2021 to May 1, 2022. During the year ended December 31, 2021, $543,333 (2020: $nil) was included in consulting expenses. As at December 31, 2021, $271,667 was included in prepaid expenses and is to be expensed out over the period to May 1, 2022.

On May 3, 2021, the Company authorized to issue 5,000,000 common stock shares in settlement of the first-year fees of $815,000. At date of settlement, the shares were fair valued at $900,000 resulting in a loss of $85,000. The fair value of the common stock was determined based on the closing price of the Company’s common stock on the date of settlement.

11. INCOME TAXES

Income taxes

The provision for income taxes differs from the amounts which would be provided by applying a combined statutory income tax rates of approximately 21% for the years ended December 31, 2021 and December 31, 2020, as follows:

 SCHEDULE OF PROVISION FOR INCOME TAX

Fearless Films, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in US dollars)

11. INCOME TAXES (continued)

Deferred tax assets

 SCHEDULE OF DEFERRED TAX ASSETS

As of December 31, 2021, and December 31, 2020, the Company determined that a valuation allowance relating to above deferred tax asset of the Company was necessary. This determination was based largely on the negative evidence represented by the losses incurred. The Company decided not to recognize any deferred tax asset, as it is not more likely than not to be realized. Therefore, a valuation allowance of $1,730,604 and $1,143,875, for the years ended December 31, 2021 and December 31, 2020, respectively, was recorded to offset deferred tax assets.

Based on the recent change in corporation tax rates the Company calculated the deferred tax asset for the years ended December 31, 2021 and 2020 at 21% compared to the rate of 35% prior to the change in corporation tax rates for previous years.

As of December 31, 2021, and December 31, 2020, the Company has approximately $6,559,940 and $5,317,385, respectively, of non-capital losses available to offset future taxable income. For net operating losses arising after December 31, 2017, the 2017 Act limits a taxpayer’s ability to utilize net operating losses carry forwards to 80% of taxable income. In addition, net operating losses arising after 2017 can be carried forward indefinitely, but carry back is generally prohibited. Net operating losses generated in tax years beginning before January 1, 2018 will not be subject to the taxable income limitation. The 2017 Act would generally eliminate the carry back of all net operating losses arising in a tax year ending after 2017 and instead would permit all such net operating losses to be carried forward indefinitely.

As at December 31, 2021, the Company is in arrears on filing its statutory corporate income tax returns and the amounts presented above are based on estimates. The actual losses available could differ from these estimates.

12. SUBSEQUENT EVENTS

The Company’s management has evaluated subsequent events up to April 15, 2022, the date the consolidated financial statements were issued, pursuant to the requirements of ASC 855 and has determined the following material subsequent events:

The occurrence of the COVID-19 pandemic may negatively affect our business, financial condition and results of operations. We are in the early stages of developing our business plan of building a revenue-producing film service business and becoming an independent producer of television and movie content. Because our business is customer-driven, our revenue requirements will be reviewed and adjusted based on future revenues. Expenses associated with operating as a public company are included in management’s budget. The occurrence of an uncontrollable event such as the COVID-19 pandemic is likely to negatively affect our operations. A pandemic such as COVID-19 can result in social distancing, travel bans and quarantines, which can lead to limited access to customers, management, support staff, consultants and professional advisors. These, in turn, will not only impact our operations, financial condition and demand for our services and products, but our overall ability to react timely to mitigate the impact of the event. It may also substantially hamper our efforts to provide investors with timely information and our ability to comply with filing obligations with the SEC.