UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31 2020, 2021

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

For the transition period from to _______________ to ____________

Commission file number 000-54830

SUNSTOCK, INC.

(Exact name of registrant as specified in its charter)

111 Vista Creek Circle

Sacramento, California95835

(Address of principal executive offices) (zip code)

Registrant’s telephone number, including area code: 916-860-9622916-860-9622

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

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

Common Stock, $0.0001 par value per share

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act [  ]☐ Yes [X] ☒ 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 [X] ☒ 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. [X] ☒ 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 (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). [X] ☒ Yes [  ] ☐ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]☒ Yes [  ]☐ No

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

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $2,824,446$2,824,446 as of June 30, 2020.2021. Shares of the registrant’s common stock held by each executive officer and director and by each person who beneficially owns 10 percent or more of the registrant’s outstanding common stock have been excluded in that such persons may be deemed to be “affiliates” of the registrant for purposes of the above calculation. This determination of affiliate status is not a conclusive determination for other purposes.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.

Documents incorporated by reference: None

Table of Contents

PART I

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K, including the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains statements relating to our future plans and developments, financial goals and operating performance that are based on our current beliefs and assumptions. These statements constitute “forward-looking statements” within the meaning of federal securities laws. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “could,” “may,” “should,” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this report. Additionally, statements concerning future matters are forward-looking statements.

Although forward-looking statements in this report reflect the good faith judgment of our management, such statements are only based on facts and factors known by us as of the date of this report. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the section below entitled “Risk Factors,” as well as those discussed elsewhere in this report and in our other filings with the Securities and Exchange Commission (“SEC”). Readers are urged not to place undue reliance on these forward-looking statements.

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, whether as a result of new information, future events or otherwise, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this report, as well as our other SEC filings, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations, and prospects.

Item 1. Business

Summary

Sunstock, Inc. (“Sunstock” or “the Company”) was incorporated on July 23, 2012, as Sandgate Acquisition Corporation, under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. In July 2013, the Company implemented a change of control by issuing shares to new shareholders, redeeming shares of existing shareholders, electing new officers and directors and accepting the resignations of its then existing officers and directors. In connection with the change of control, the shareholders of the Company and its board of directors unanimously approved the change of the Company’s name from Sandgate Acquisition Corporation to Sunstock, Inc. On July 18, 2013, Jason Chang and Dr. Ramnik S Clair were named as directors of the Company.

On October 30, 2013, the Company entered into a Purchase Agreement with Dollar Store Services, Inc. to develop, design and build out a retail store which the Company opened in February 2014. The Company opened its second retail store in May 2014. On August 21, 2014 the first store was forced to close due to below code electrical wiring the landlord had provided. Perishable inventory at this store was relocated to the second store as nonperishables were moved into storage along with fixed assets. The Company’s second store was relocated in December of 2015 under lease running through June 2017 and operated on a month to month lease from then until the store was closed in September 2018. The Company currently operates no variety retail stores.

On October 22, 2018, the CompanySunstock, Inc. acquired all assets and liabilities of Mom’s Silver Shop, Inc. (the “Retail Store”) oflocated in Sacramento, California. Included in the assets acquired was approximately $60,000 in precious metals inventory and approximately $13,000 in net fixtures. Also included were any licenses and permits, customer lists, logo, trade names, signs, and websites. Financing of the purchase was by $20,056 cash, $33,000 unsecured note payable with principal payments of $1,000 per week for 33 weeks starting January 1, 2019 with 4.5% annual interest accrued on the unpaid balance (total accrued interest due August 27, 2019), and the assumption of liabilities and lease obligations. The Retail Store specializes in buying and selling gold, silver, and rare coins, and is one of the leading precious metals retailers in the greater Sacramento metropolitan area.

The Company’s business plan includes the buying, selling and distribution of precious metals, primarily gold. The Company pursues a “ground to coin” strategy, whereby it acquiresseeks to acquire mining assets as well as rights to purchase mining production and sellsto sell these metals primarily through retail channels including their own branded coins. The company Company emphasizes investment in enduring assets that we believe may provide ‘resource to retail’ conversion upside. Our goal is to provide our shareholders with an exceptional opportunity to capture value in the precious metals sector without incurring many of the costs and risks associated with actual mining operations.

The Company’s independent registered public accounting firm has issued a report stating there is substantial doubt about the Company’s ability to continue as a going concern.

The Business: Precious Metals and Coins - Sunstock

Silver and other precious metals, may be used as an investment. A traditional way of investing in silver is by buying actual bullion bars. In some countries, like Switzerland and Liechtenstein, bullion bars can be bought or sold over the counter at major banks. Another means of buying and trading silver is through silver coins. Silver coins include the one ounce 99.99% pure Canadian Silver Maple Leaf and the one ounce 99.93% pure American Silver Eagle. Likewise, an increasing popular method of trading in silver and precious metals is through exchange-traded products, such as exchange-traded funds, exchange-traded notes and closed-end funds that aim to track the price of silver. Silver exchange-traded products are traded on the major stock exchanges including the London and New York Stock Exchanges.

Investors typically look to precious metals as a safe and reliable store of value and as a way to protect their assets from the influence of inflation, devaluation, and potential bond and equity market crashes. They act as safe haven investments, particularly in times of elevated political and economic uncertainty. The flow of investment capital into commodity-related sectors has increased more than tenfold over the past decade. Stable precious metal prices compared to increasing stock market volatility have elevated investments in precious metals to a standalone asset class, forming part of almost all diversified asset portfolios.

At the present time, the Company does not anticipate or foresee a material effect on this line of its business from existing or probable governmental regulations except as follows. The recent COVID-19 pandemic has resulted in many governments around the world enacting various social distancing orders and directives, which have resulted in decreased foot traffic to many business, as well as accommodative fiscal and monetary measures that have been viewed as inflationary by some markets, which has resulted in increased demand for physical precious metals bullion and coins. This recent increased demand has occurred at the same time in supply constraints from mints and refiners as a result of the COVID-19 pandemic. As a result, premiums on precious metal bullion and coins available for immediate delivery have recently increased, affecting both our revenues and our ability to resupply our inventories of our precious metals. We expect price, demand and supply volatility to continue as a result of the COVID-19 pandemic and the actions governments are taking to address it.

Services and Products

The Company has established positions in precious metals. As of December 31, 2020,2021, the Company held 11,20020,117 ounces of silver and 204139 ounces of gold.

Competition

The Company’s Retail Store has a number of small coin shop competitors in the Sacramento, California area, as well as online precious metals dealer competitors such as monex.com and apmex.com.

Sales and Marketing Strategy

The Company’s goal is to achieve vertical integration within the precious metal industry. To achieve this goal, the Company is investigating the acquisition of mineral rights and assets to complement its already established precious metal business. We intend to first focus on projects that already own significant amounts of unrefined – but already mined – gold ore and other precious metals.

Revenues and Losses

The Company had limited revenues prior to the acquisition of the Retail Store, and has not realized any operating profits as of yet.

The Company recorded revenues of $10,072,770 and $6,148,441 during the years ended December 31, 2020 and 2019, respectively.

The Company has had net losses from inception through the year ended December 31, 2019. The Company had a net loss of $10,125,066 for the year ended December 31, 2019. The Company had a net income of $2,677,844 for the year ended December 31, 2020, due to $4,087,280 in net other income derived mainly from the settlement of $776,315 of debt and $3,240,220 reduction of derivative liability. The Company does not expect to enter into such debt agreements in the future nor realize such income in the future.

THE COMPANY

Employees

Currently, the Company has three employees and two consultants. The employees are at the Retail Store. Our employees are not represented by a labor union or by a collective bargaining agreement.

Item 1A. Risk Factors

Not Applicable.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The Company currently uses the residence of the Company’s CEO for its corporate office at no charge.

The Company entered into a lease agreement in October 2018 for 1,088 square feet of retail shop space for the Retail Store. The lease requires combined monthly payments of base rent and triple net of $1,866$1,945 per month for sixty months.

Item 3. Legal Proceedings

On August 21, 2020, Boustead Securities, LLC (“Boustead”) filed suit against Sunstock, Inc. (“Sunstock”) in the County of Orange, California. Boustead is an investment banking firm engaged by Sunstock on September 19, 2019 to raise equity. Boustead maintainsmaintained that Sunstock owes it 87,179,48787,179 shares of Preferred Stock Warrants and 9,230,7699,231 shares of Common Stock Warrants. Boustead is also seekingsought general damages, interest, and costs of the suit. Sunstock believesbelieved that Boustead hashad not fulfilled its obligations in raising equity and plans to vigorously contestcontested the suit. Sunstock has hired an arbitrator but there was no resolution between Sunstock and Boustead. The matter went to trial in September 2021 and on November 2, 2021 the Court determined that Sunstock owed Boustead $260,308 for warrants issued that Sunstock did not honor. $260,308 was accrued and is currentlyshown in negotiations with Boustead.operating expenses in the audited and consolidated statement of operations. The warrants are no longer outstanding (see Note 12). All other monetary claims by Boustead were dismissed by the Court. The $260,308 is to be paid in cash. The Company has filed an appeal of the judgment on December 9, 2021.

In December 2020, a former employee of Sunstock filed a claim with the California Labor Commission regarding claimed back pay owed. A preliminary hearing was held on January 4, 2021 and the Company is currently awaiting the next step.

Item 4. Mine Safety Disclosures.

Not applicable.

PART II

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

On December 9, 2015 the Company began light trading on the NASDAQ bulletin board under the symbol “SSOK”.

The Company’s shares currently trade on the OTC Link alternative trading system operated by OTC Markets Group, Inc. under the symbol “SSOK.” The following table sets forth the high and low bid prices of our common stock (USD) for the last two fiscal years as reported by the OTCMarkets.com and represents inter dealer quotations, without retail markup, markdown or commission and may not be reflective of actual transactions.transactions.

As of December 31, 2020,2021, there are 2,939,677,7034,126,387 shares of common stock outstanding of which 1,256,124,3972,451,239 shares are owned by officers and directors of the Company. There are approximately 8081 holders of our common stock.

The future sale of the Company’s presently outstanding “unregistered” and “restricted” common stock by present members of management and persons who own more than five percent of the Company’s outstanding voting securities may have an adverse effect on any “established trading market” that may develop in the shares of the Company’s common stock.

In general, securities may be sold pursuant to Rule 144 after being fully-paid and held for more than 6 months. While affiliates of the Company are subject to certain limits in the amount of restricted securities, they can sell under Rule 144, there are no such limitations on sales by persons who are not affiliates of the Company. In the event non-affiliated holders elect to sell such shares in the public market, there is likely to be a negative effect on the market price of the Company’s securities. There is no dividend policy currently in place.

Recent Sales of Unregistered Securities.

During the quarter ended December 31, 2020,2021, we have issued the followingno securities which were not registered under the Securities Act and not previously disclosed in the Company’s Quarterly Reports on Form 10-Q or Current Reports on Form 8-K:8-K.

Shares issued for conversion of Series A convertible preferred shares:

On October 16, 2020, the Company issued 130,000,000 shares of common stock in exchange for 130,000,000 shares of Series A convertible preferred stock.

On December 8, 2020, the Company issued 75,000,000 shares of common stock in exchange for 75,000,000 shares of Series A convertible preferred stock.

Shares issued to investors for cash:

On December 29, 2020, the Company sold 20,000,000 shares of common stock at $0.001 per share for $2,000 to an accredited investor.

Item 6. Selected Financial Data.

There is no selected financial data required to be filed for a smaller reporting company.

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

Overview

You should read the following discussion and analysis in conjunction with our Consolidated Financial Statements and related Notes thereto included in Part II, Item 8 of this Report before deciding to purchase, hold or sell our common stock.

Sunstock, Inc. (“Sunstock” or “the Company”) was incorporated on July 23, 2012, as Sandgate Acquisition Corporation, under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions.

On In July 18, 2013, the Company changed its’implemented a change of control by issuing shares to new shareholders, redeeming shares of existing shareholders, electing new officers and directors and accepting the resignations of its then existing officers and directors. In connection with the change of control, the shareholders of the Company and its board of directors unanimously approved the change of the Company’s name from Sandgate Acquisition Corporation to Sunstock, Inc. On the same date,July 18, 2013, Jason Chang and Dr. Ramnik S Clair were named as directors of the Company.

On October 30, 2013, the Company entered into a Purchase Agreement with Dollar Store Services, Inc. to develop, design and build out a retail store which the Company opened in February 2014. The Company opened its second retail store in May 2014. On August 21, 2014 the first store was forced to close due to below code electrical wiring the landlord had provided. Perishable inventory at this store was relocated to the second store as nonperishables were moved into storage along with fixed assets. The Company’s second store was relocated in December of 2015 under lease running through June 2017 and operated on a month to month lease from then until the store was closed in September 2018. The Company currently operates no variety retail stores.

On October 22, 2018, the CompanySunstock, Inc. acquired all assets and liabilities of the Retail Store ofMom’s Silver Shop, Inc. (the “Retail Store”) located in Sacramento, California. Included in the assets acquired was approximately $60,000 in precious metals inventory and approximately $13,000 in net fixtures. Also included were any licenses and permits, customer lists, logo, trade names, signs, and websites. Financing of the purchase was by $20,056 cash, $33,000 unsecured note payable with principal payments of $1,000 per week for 33 weeks starting January 1, 2019 with 4.5% annual interest accrued on the unpaid balance (total accrued interest due August 27, 2019), and the assumption of liabilities and lease obligations. The Retail Store specializes in buying and selling gold, silver, and rare coins, and is one of the leading precious metals retailers in the greater Sacramento metropolitan area.

Critical Accounting Policies

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires making estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Revenue Recognition

The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). The guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance.

The Company’s principal activities from which it generates revenue are product sales. Revenue is measured based on considerations specified in a contract with a customer. A contract exists when it becomes a legally enforceable agreement with a customer. These contracts define each party’s rights, payment terms and other contractual terms and conditions of the sale. Consideration is typically paid at time of sale via credit card, check, or cash when products are sold direct to consumers.

A performance obligation is a promise in a contract to transfer a distinct product to the customer, which for the Company is transfer of a product to customers. Performance obligations promised in a contract are identified based on the goods that will be transferred to the customer that are both capable of being distinct and are distinct in the context of the contract, whereby the transfer of the goods is separately identifiable from other promises in the contract. The Company has concluded the sale of product and related shipping and handling are accounted for as the single performance obligation.

The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. The transaction price is determined based on the consideration to which the Company will be entitled to receive in exchange for transferring goods to the customer. We do not issue refunds.

Revenue Recognition (continued)

The Company recognizes revenue when it satisfies a performance obligation in a contract by transferring control over a product to a customer when product is shipped based on fulfillment by the Company or when a point of sale transaction is completed. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of product sales. The Company does not accept returns.

Stock-Based Compensation:

All share-based payments are recognized in the consolidated financial statements based upon their fair values.

The Company recognizes stock-based compensation expense in accordance with the provisions of ASC 718, Compensation – Stock Compensation (“(“ASC 718”). ASC 718 requires the measurement and recognition of compensation expense for all stock-based awards made to employees, directors and non-employees based on the grant date fair value of the awards. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is primarily recognized over the term of the consulting agreement. In accordance with FASB guidance, an asset acquired in exchange for the issuance of fully vested, non-forfeitable equity instruments should not be presented or classified as an offset to equity on the grantor’s balance sheet once the equity instrument is granted for accounting purposes.

20202021 Year-End Analysis Results of Operations

Comparison of the Years Ended December 31, 20202021 and 20192020

For the year ended December 31, 2020,2021, revenues were $10,072,770,$14,016,479, an increase of $3,924,329$3,943,709 from $6,148,441$10,072,770 for 2019.2020. The increase in revenue was primarily due to discounts to large purchasers of coins and more people considering coins a safe haven in 20202021 due to Covid-19 and political uncertainty.

For the year ended December 31, 2020,2021, cost of goods sold were $9,843,157,$13,731,669, an increase of $3,901,418$3,888,512 from $5,941,739$9,843,157 for 20192020, due to the increase in revenue.revenues.

For the year ended December 31, 2020,2021, gross profit was $229,613 (2.3%$284,810 (2.0%), an increase of $22,911$55,197 from a gross profit of $206,702 (3.4%$229,613 (2.2%) for 2019.2020.

For the year ended December 31, 2020,2021, operating expenses were $1,638,250,$593,884, a decrease of $7,125,808$1,044,366 from $8,764,057$1,638,250 for 2019.2020. Stock based compensation was $974,600$0 for 2020,2021, a decrease of $6,860,550$974,600 from $7,835,150 in 2019. $5,865,950 was$974,600 for employee stock based compensation and $894,600 was for consultant stock based compensation in 2019.2020. Stock based compensation is based on the discretion of the CEO. Professional fees were $250,846, a $225,343 decrease from $476,189 (excluding $345,400 stock based compensation) for 2020. Compensation was $31,960 for 2021, a $50,089 decrease from $82,049 (excluding $629,200 stock based compensation) for 2020. Lawsuit judgment was $260,308 for 2021 compared to $0 for 2020. The lawsuit judgment was the result of trial regarding Boustead Securities. The Company has filed an appeal.

For the year ended December 31, 2020,2021, the net loss was $2,056,654, a decrease of $4,734,498 from net income wasof $2,677,844 an increase of $12,802,910 from a loss of $10,125,066 for 2019.2020. The net income for 2020 was due to $4,087,280 in net other income derived mainly from the settlement of $776,315 of debt and $3,240,220 reduction of derivative liability. The Company does not expect to enter into such debt agreements in the future, nor realize such income in the future. The accumulated deficit at December 31, 20202021 was $60,207,492.$62,264,145.

Liquidity and Capital Resources

As of December 31, 2020,2021, the Company had $47,055$30,168 in cash, $219 in accounts receivable, $1,015,599$1,392,665 in inventories and $13,456$5,655 in prepaid expenses. During the year ended December 31, 2020,2021, the Company used net cash of $414,280$377,337 in operations. During the year ended December 31, 2020, $307,7002021, $360,450 in net cash was provided by financing activities as follows: the Company raised $25,000 in cash from a convertible note payable, $5,100$45,100 from shareholder receivable, $42,500$30,250 from the issuance of common stock, $400,000 from the issuance of preferred stock, $150,000 from an SBA loan, $359,838PPP loans, and $285,100 in notes payable from related parties, and paid $110,000 on notes payable from related parties and $564,738 on convertible notes payable.parties.

The Company has not posted operating income since inception. It has an accumulated deficit of $60,207,491 as$62,264,145 of December 31, 2020.2021. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and/or obtain additional financing from its stockholders and/or third parties.

Item 8. Financial Statements and Supplementary Data

The financial statements for the years ended December 31, 20202021 and 20192020 are attached hereto.

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

None.On February 15, 2022, the Board of Directors of Sunstock, Inc. (“Sunstock”) approved the engagement of Fruci & Associates II, PLLC as the Company’s independent registered public accounting firm for the Company’s fiscal year ended December 31, 2021, effective immediately.

On February 15, 2022, the audit practice of Macias Gini & O’Connell LLP (“MGO”) notified Sunstock, Inc. (“Sunstock”) that Sunstock no longer fit in with the future direction of MGO’s practice and, therefore, that Sunstock should seek another audit firm.

The Report of Independent Registered Public Accounting Firm of MGO regarding the Company’s financial statements for the year ended December 31, 2020 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that such audit report did include an explanatory paragraph regarding the Company’s ability to continue as a going concern.

During the year ended December 31, 2020 and during the interim period from the end of the most recently completed year through February 15, 2022, the date of resignation, there were no disagreements with MGO on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of MGO, would have caused MGO to make reference to such disagreement in its report.

Item 9A. Controls and Procedures

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. Management must evaluate its internal controls over financial reporting, as required by Sarbanes-Oxley Act, Section 404 (a). The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles or GAAP.

As of December 31, 2020,2021, management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in the 2013 Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of the Company’s internal controls over financial reporting that adversely affected its internal controls and that may be considered to be material weaknesses.

Material Weaknesses:

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses identified are:

1. Thethe Company does not have accounting personnel that have adequate technical accounting skills to identify terms in agreements that would have material accounting implications on the Company’s consolidated financial statements in accordance with US GAAP, such as permanent vs. temporary equity treatment of the Company’s preferred stock in accordance with ASC 480.

2. Thethe Company does not obtain and retain supporting documentation over the precious metal trade dates and quantities traded and does not properly record the realized gain/loss on the trade according to the fair market value of the items traded on a given date.

3. Thethe Company has an inadequate number of personnel that could accurately and timely record and report the Company’s consolidated financial statements in accordance with US GAAP.

4. Thethe Company does not perform formal risk assessments over financial reporting and does not evaluate its internal control processes.

Notwithstanding the existence of these material weaknesses in internal control over financial reporting, we believe that the financial statements in this Annual Report on Form 10-K fairly present, in all material respects, our financial condition in conformity with U.S. generally accepted accounting principles (GAAP). Further, we do not believe the material weaknesses identified had an impact on prior financial statements.

Remediation:

As part of our ongoing remedial efforts, we have and will continue to, among other things:

1. Expand our accounting policy and controls organization by hiring qualified accounting and finance personnel;

2. Increase our efforts to educate both our existing and expanded accounting policy and control organization on the application of the internal control structure;

3. Emphasize with management the importance of our internal control structure;

4. Seek outside consulting services where our existing accounting policy and control organization believes the complexity of the existing exceeds our internal capabilities.

5. Plan to implement improved accounting systems.

We believe that the foregoing actions will improve our internal control over financial reporting, as well as our disclosure controls and procedures. When funds permit, we intend to perform such procedures and commit such resources as necessary to continue to allow us to overcome or mitigate these material weaknesses such that we can make timely and accurate quarterly and annual financial filings until such time as those material weaknesses are fully addressed and remediated.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal controls over financial reporting during its fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

Item 9B. Other information

Not applicable.

PART III

Item 10. Directors, Executive Officers, and Corporate Governance

The Directors and Officers of the Company are as follows:

Management of Sunstock

The Company has three employees and two consultants. Jason C. Chang and Dr. Ramnik S. Clair are the officers and directors of the Company and shareholders. Mr. Chang, as president, and Mr. Clair as senior vice president, have allocated time to the activities of the Company with minimal cash compensation.

There are no agreements or understandings for the officer or director to resign at the request of another person and the above- named officer and director is not acting on behalf of nor will act at the direction of any other person.

Set forth below are the names of the directors and officers of the Company, all positions and offices with the Company held, the period during which they have served as such, and the business experience during at least the last five years:

Jason C. Chang, serves as a director, Chief Executive Officer and President of Sunstock. Mr. Chang began his career in the hospitality industry as a child and continuing as an adult working in the family business operating several hotels throughout California. Mr. Chang has now had over 20 years of hospitality management experience. In addition, as an entrepreneur, Mr. Chang has helped fund numerous startup companies, primarily related to the technology sector.

Dr. Ramnik Clair serves as a director and Senior Vice President of Sunstock. Dr. Clair received his medical degree in India and immigrated to the United States in 1983. He completed his medical residency in New York and has subsequently served in his medical practice as a solo practitioner. Dr. Clair intends to assist the Company in building long term relationships with its client base.

Conflicts of Interest

Messrs. Chang and Clair are not directors of, or sole beneficial shareholders of any other companies which have filed registration statements on Form 10 for the registration of their common stock pursuant to the Securities Exchange Act.

There are no binding guidelines or procedures for resolving potential conflicts of interest. Failure by management to resolve conflicts of interest in favor of the Company could result in liability of management to the Company. However, any attempt by shareholders to enforce a liability of management to the Company would most likely be prohibitively expensive and time consuming.

Code of Ethics. The Company has not at this time adopted a Code of Ethics pursuant to rules described in Regulation S-K. The Company has two persons who are the only shareholders and who serve as the directors and officers. The Company has limited operations and business actually does not receive any revenues or investment capital. The adoption of an Ethical Code at this time would not serve the primary purpose of such a code to provide a manner of conduct as the development, execution and enforcement of such a code would be by the same persons and only persons to whom such code applied. Furthermore, because the Company does not have any activities, there are activities or transactions which would be subject to this code. At the time the Company enters into a business combination or other corporate transaction, the current officers and directors will recommend to any new management that such a code be adopted. The Company does not maintain an Internet website on which to post a code of ethics.

Corporate Governance.

For reasons similar to those described above, the Company does not have a nominating, compensation nor audit committee of the board of directors. At this time, the Company consists of two shareholders who serve as the corporate directors and officers. The Company has no activities, and receives no revenues. At such time that the Company enters into a business combination and/or has additional shareholders and a larger board of directors and commences activities, the Company will propose creating committees of its board of directors, including both a nominating and an audit committee. Because there are only two shareholders of the Company, there is no established process by which shareholders to the Company can nominate members to the Company’s board of directors. Similarly, however, at such time as the Company has more shareholders and an expanded board of directors, the new management of the Company may review and implement, as necessary, procedures for shareholder nomination of members to the Company’s board of directors.

Compliance with Section 16(A) of the Exchange Act

Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who beneficially own 10% or more of a class of securities registered under Section 12 of the Exchange Act to file reports of beneficial ownership and changes in beneficial ownership with the SEC. Directors, executive officers and greater than 10% stockholders are required by the rules and regulations of the SEC to furnish the Company with copies of all reports filed by them in compliance with Section 16(a).

Delinquent Section 16(a) Reports

Based solely on our review of certain reports filed with the Securities and Exchange Commission pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, the reports required to be filed with respect to transactions in our common stock by each person who, at any time during the 2019 and 2020 fiscal years, was a director, officer, or beneficial owner of more than 10% of our common stock, were timely, except as follows (i) Jason Chang did not timely file a Form 4 upon the following:

his purchase of 50,000,000 shares of Company common stock on January 8, 2019,

his purchase of 15,000,000 shares of Company common stock on January 23, 2019,

his purchase of 20,000,000 shares of Company common stock on January 29, 2019,

his purchase of 10,638,298 shares of Company common stock on February 12, 2019,

his purchase of 20,000,000 shares of Company common stock on February 22, 2019,

his purchase of 5,000,000 shares of Company common stock on February 25, 2019,

his purchase of 10,638,298 shares of Company common stock on February 26, 2019,

his purchase of 3,723,404 shares of Company common stock on February 27, 2019,

his purchase of 1,860,465 shares of Company common stock on February 26, 2019,

his purchase of 11,627,907 shares of Company common stock on March 8, 2019,

his purchase of 23,255,814 shares of Company common stock on March 12, 2019,

his purchase of 23,255,814 shares of Company common stock on March 18, 2019,

his purchase of 27,000,000 shares of Company common stock on July 1, 2019,

his purchase of 50,000,000 shares of Company common stock on August 16, 2019,

his purchase of 30,000,000 shares of Company common stock on September 5, 2019,

his receipt of 164,277,000 shares of Company common stock on October 28, 2019,

his receipt of 22,631,000 shares of Company common stock on December 28, 2019,

his receipt of 24,737,650 shares of Company common stock on January 9, 2020,

his receipt of 80,000,000 shares of Company common stock on February 11, 2020,

and his receipt of 205,000,000 shares of Company common stock on March 25, 2020.

(ii) Dr. Ramnik Clair did not timely file a Form 4 upon his receipt of 30,000,000 shares of Company common stock on October 1, 2019 and his purchase of 36,000,000 shares of Company common stock on February 15, 2020.

Item 11. Executive Compensation

Summary Compensation Table — Fiscal Years Ended December 31, 20202021 and 20192020

The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named persons for services rendered in all capacities during the noted periods. No other executive officers received total annual salary and bonus compensation in excess of $100,000.

Narrative to Summary Compensation Table

No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by the Company for the benefit of its employees.

The Company currently does not compensate its directors with cash.

Corporate Governance.

For reasons similar to those described above, the Company does not have a nominating, compensation nor audit committee of the board of directors. At this time, the Company consists of two shareholders who serve as the corporate directors and officers. The Company has no activities, and receives no revenues. At such time that the Company enters into a business combination and/or has additional shareholders and a larger board of directors and commences activities, the Company will propose creating committees of its board of directors, including both a nominating and an audit committee. Because there are only two shareholders of the Company, there is no established process by which shareholders to the Company can nominate members to the Company’s board of directors. Similarly, however, at such time as the Company has more shareholders and an expanded board of directors, the new management of the Company may review and implement, as necessary, procedures for shareholder nomination of members to the Company’s board of directors.

Compliance with Section 16(A) of the Exchange Act

Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who beneficially own 10% or more of a class of securities registered under Section 12 of the Exchange Act to file reports of beneficial ownership and changes in beneficial ownership with the SEC. Directors, executive officers and greater than 10% stockholders are required by the rules and regulations of the SEC to furnish the Company with copies of all reports filed by them in compliance with Section 16(a).

Delinquent Section 16(a) Reports

Based solely on our review of certain reports filed with the Securities and Exchange Commission pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, the reports required to be filed with respect to transactions in our common stock by each person who, at any time during the 2020 and 2021 fiscal years, was a director, officer, or beneficial owner of more than 10% of our common stock, were timely, except as follows (i) Jason Chang did not timely file a Form 4 upon the following:

his purchase of 50,000 shares of Company common stock on January 8, 2019,

his purchase of 15,000 shares of Company common stock on January 23, 2019,

his purchase of 20,000 shares of Company common stock on January 29, 2019,

his purchase of 10,638 shares of Company common stock on February 12, 2019,

his purchase of 20,000 shares of Company common stock on February 22, 2019,

his purchase of 5,000 shares of Company common stock on February 25, 2019,

his purchase of 10,638 shares of Company common stock on February 26, 2019,

his purchase of 3,723 shares of Company common stock on February 27, 2019,

his purchase of 1,860 shares of Company common stock on February 26, 2019,

his purchase of 11,628 shares of Company common stock on March 8, 2019,

his purchase of 23,256 shares of Company common stock on March 12, 2019,

his purchase of 23,256 shares of Company common stock on March 18, 2019,

his purchase of 27,000 shares of Company common stock on July 1, 2019,

his purchase of 50,000 shares of Company common stock on August 16, 2019,

his purchase of 30,000 shares of Company common stock on September 5, 2019,

his receipt of 164,277 shares of Company common stock on October 28, 2019,

his receipt of 22,631 shares of Company common stock on December 28, 2019,

his receipt of 24,737 shares of Company common stock on January 9, 2020,

his receipt of 80,000 shares of Company common stock on February 11, 2020,

and his receipt of 205,000 shares of Company common stock on March 25, 2020.  

(ii) Dr. Ramnik Clair did not timely file a Form 4 upon his receipt of 30,000 shares of Company common stock on October 1, 2019 and his purchase of 36,000 shares of Company common stock on February 15, 2020.

All such reports have been filed with the Securities and Exchange Commission as of the date of this report.

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

The following table sets forth certain information regarding beneficial ownership of our common stock as of April 15, 2021,18, 2022, by (i) each person known by us to be the beneficial owner of more than 5% of our outstanding Common Stock, (ii) each director and each of our named executive officers and (iii) all executive officers and directors as a group.

The number of shares of Common Stock beneficially owned by each person is determined under the rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which such person has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within 60 days after the date hereof, through the exercise of any stock option, warrant or other right. Unless otherwise indicated, each person has sole investment and voting power (or shares such power with his or her spouse) with respect to the shares set forth in the following table. The inclusion herein of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of those shares.

Item 13. Certain Relationships and Related Transactions and Director Independence

The parents of Jason C. Chang, the Company’s Chief Executive Officer and a director, purchased a combined total of 90,000,000 shares of the Company’s common stock for $25,000 cash duringDuring the year ended December 31, 2019. The shares were purchased below market price, and $975,000 in stock-based2021, the Company recorded compensation expense was recorded.to its CEO for the following.

During the year ended December 31, 2020, the Company recorded compensation to its CEO for the following.

During the year ended December 31, 2019, the Company recorded compensation to its CEO for the following:

Sunstock is not currently required to maintain an independent director as defined by in Rule 4200 of the Nasdaq Capital Market nor does it anticipate that it will be applying for listing of its securities on an exchange in which an independent directorship is required. It is likely that neither Mr. Chang nor Dr. Clair would not be considered independent directors if it were to do so.

Item 14. Principal Accounting Fees and Services

Audit Fees

Hall & Company has been the Company’s auditor since 2014. Hall & Company was acquired by Macias Gini & O’Connell LLP (“MGO”) on January 1, 2021. MGO has performedwas the Company’s auditor effective with the December 31, 2020 audit through the September 30, 2021 review. Fruci & Associates II, PLLC (“Fruci”) has been engaged as the Company’s auditor effective with the December 31, 2021 audit.

Audit Fees

The aggregate fees billed or expected to be billed for each of the last two years for professional services rendered by the independent registered public accounting firm for the audits of the Company’s annual financial statements and reviews of financial statements included in the Company’s Form 10-K and Form 10-Q reports, consents and services normally provided in connection with statutory and regulatory filings or engagements were as follows:

Audit Related Fees

None.

Tax Fees

None.

All Other Fees

None.

Audit Committee Policies and Procedures

The Company does not currently have an audit committee serving and as a result its board of directors performs the duties of an audit committee. The board of directors will evaluate and approve in advance, the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services. The Company does not rely on pre- approval policies and procedures.

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a) Exhibits

* Filed herewith.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

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

FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting FirmREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholdersBoard of Directors and the board of directorsStockholders of Sunstock, Inc.

Opinion on Thethe Financial Statements

We have audited the accompanying consolidated balance sheet of Sunstock, Inc. and subsidiaries (the “Company”(“the Company”) as of December 31, 2019,2021, and the related consolidated statements of operations, convertible preferred stock and changes in stockholders’ deficitequity, and cash flows for the year then ended, December 31, 2019, and the related notes (collectively referred to as the “financial statements”)financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019,2021, and the results of its operations and its cash flows for the year then ended, December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Emphasis of Matter Regarding Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losseshad insufficient cash flows from operations and has an accumulated deficit thatbeen unable to secure financing from third parties. These factors raise substantial doubt about itsthe Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. 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 audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)(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 audit 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 audit, 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 audit 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 audit 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 audit provides a reasonable basis for our opinion.

/s/ Hall & Company

We have served as the Company’s auditor since 2014

Irvine, CA

April 24, 2020

Critical Audit Matters

The critical audit matters communicated below 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. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Identification and evaluation of related party transactions and disclosures

As discussed in Note 7 to the consolidated financial statements, Jason C. Chang, the Chief Executive Officer, Chief Financial Officer and Director, is the majority beneficial owner of the Company and a related party. Historically, the Company has entered into numerous transactions with Mr. Chang, including various debt and equity agreements. We identified the identification and evaluation of related party transactions and disclosures as a critical audit matter. Auditor judgment was involved in assessing the sufficiency of the procedures performed to identify related parties, and related party transactions and disclosures.

The following are the primary procedures we performed to address this critical audit matter.

Report of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of Sunstock, Inc.

Opinion on The Financial Statements

We have audited the accompanying consolidated balance sheet of Sunstock, Inc. and subsidiaries (the “Company”) as of December 31, 2020, the related consolidated statements of operations, convertible preferred stock and changes in stockholders’ equity and cash flows for the year ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Emphasis of Matter Regarding Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. 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 audit. 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 audit 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 audit 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 opinion.

Our audit 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 audit 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 audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the board of directors and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation and identification of related parties and related party transactions

As discussed in Note 7 to the consolidated financial statements, Jason C. Chang, the Chief Executive Officer, Chief Financial Officer and Director, is the majority beneficial owner of the Company and is a related party. During the year ended December 31, 2020, the Company entered into a number of transactions with Mr. Chang, including 1) debt agreements for funds advanced to the Company for the use of settling other convertible notes payable and outstanding as of December 31, 2019; such related party debt was either repaid by the Company during the year ended December 31, 2020 or in the subsequent period, or converted into the Company’s common stock during the year ended December 31, 2020 at a price below market value, which further caused the Company to record a loss from settlement with the related party, 2) equity agreement for the issuance of Series A convertible preferred stock for cash, which was also used to repay part of the other convertible notes payable outstanding as of December 31, 2019.

We identified the evaluation of the identification of related parties and recording of related party transactions as a critical audit matter. Auditor judgment was involved in assessing the sufficiency of the procedures performed to identify related parties and related party transactions of the Company.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and the operating effectiveness of certain internal controls over the Company’s related party process, including controls over the identification of the Company’s related party relationships and transactions. We performed the following procedures to evaluate the identification of related parties and recording of related party transactions by the Company:

/s/ Macias Gini & O’Connell LLP

We have served as the Company’s auditor since 20212014.

Irvine, CA

April 15, 2021

SUNSTOCK, INC.

CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of the consolidated financial statements

SUNSTOCK, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

The accompanying notes are an integral part of the consolidated financial statements

SUNSTOCK, INC.

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

The accompanying notes are an integral part of the auditedunaudited condensed and consolidated financial statements

SUNSTOCK, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS