UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 30, ~~2019~~2020

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

Commission file number: 000-55915

12 ReTech Corporation

(Exact name of registrant as specified in its charter)

Nevada

38-3954047

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

10785 W. Twain Ave, Suite 210 Las Vegas, Nevada		89135
515 E, Grant St. Suite 515 Phoenix, Arizona		85004
(Address of principal executive offices)		(Zip Code)

530-539-4329

Registrant’s telephone number

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 fling requirements for the past 90 days.

Yes [X] 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 [X] 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 definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X ] Smaller reporting company [X] Emerging Growth 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 Act). Yes [ ] No [X]

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Shares		RETC		OTC: PINK

The number of shares of common stock ($0.00001 par value) outstanding as of ~~October~~June 311, ~~2019~~2021 was 255,~~410~~593,~~392~~994,474.

12 RETECH CORPORATION

FOR THE THREE AND NINE MONTHS ENDED

~~SEPTEMBER~~September 30, ~~2019~~2020

Index to Report

		Page
PART I	FINANCIAL STATEMENTS (unaudited)	4
Item 1.	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss	5
	Condensed Consolidated Statements of Stockholders Deficit	6
	Condensed Consolidated Statements of Cash Flow	7
	Notes to Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2628
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3537
Item 4.	Controls and Procedures	3538
PART II	OTHER INFORMATION	3740
Item 1.	Legal Proceedings	3740
Item 1A.	Risks Factors	3741
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3842
Item 3.	Defaults Upon Senior Securities	3842
Item 4.	~~Mine~~Other ~~Safety Disclosures~~Information	3842
Item 5.	~~Other Information~~Exhibits	3842
Item 6.	Exhibits	38

FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements”. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. We do not intend, and undertake no obligation, to update any forward-looking statement. You should, however, consult further disclosures we make in future filings of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

- our current lack of working capital; - inability to raise additional financing; - that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require our management to make estimates about matters that are inherently uncertain; - deterioration in general or regional economic conditions; - adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations; - inability to efficiently manage our operations; - inability to achieve future sales levels or other operating results; and - the unavailability of funds for capital expenditures. - Our lack of cash due to the shutdown of operations due to the pandemic. - Our late disclosure filings caused by a lack of funding due to the impact of the pandemic on our operations.

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see “Item 1A. Risk Factors” in this document.

Throughout this ~~Annual~~Quarterly Report references to “we”, “our”, “us”, “12 ReTech”, “RETC”, “the Company”, and similar terms refer to 12 ReTech Corporation.

PART I

ITEM 1. FINANCIAL STATEMENTS

12 ReTech Corporation

Condensed Consolidated Balance Sheets

(unaudited)

	September 30, 2019			December 31, 2018
	September 30,			December 31,
	(unaudited)
	2020			2019
ASSETS
Current Assets:
Cash and cash equivalents	$	4042,~~258~~826		$	37118,~~721~~860
Accounts receivable		2622,~~972~~989			15131,~~609~~605
Inventory		-199,250			23241,~~140~~987
Prepaid expenses		712,~~600~~005			47,~~884~~600
Other current assets		-			19,344
Total Current Assets		277,070			500,051
Total Current Assets		74,830			100,698
Fixed assets, net		198,853			348,396
Fixed assets, net		156,456			98,295
ROU asset		77,243			303,071
Goodwill		874,821			-
Other asset		63,964			179,100
Software development		-			371,118
Security deposit		236,250			60,824
Security deposit		12,143			12,936
TOTAL ASSETS	$	853,380		$	1,391,442
TOTAL ASSETS	$	1,118,250		$	583,047
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable and accrued liabilities	$	~~924~~2,~~452~~859,705		$	12,~~234~~167,~~712~~496
Due to stockholders		~~120~~383,~~742~~856			~~766~~384,~~397~~091
Notes payable, net of discounts		31,000			158,245
Related Party Notes payable, net of discounts		31,000			346,000
Convertible notes payable, net of discounts		1,~~006~~274,~~013~~907			~~624~~1,~~845~~308,092
Derivative liabilities		147,~~494~~390,~~342~~863			25,~~696~~359,~~470~~442
General default reserve		12,~~687~~140,~~528~~995			-1,769,791
Series B Preferred Stock, 1,000,000 shares designated; $0.00001 par value, $1.00 stated value; 0 shares and 68,000 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively. Liquidation preference $0 as of September 30, 2019 and $68,000 as of December 31, 2018.		-			48,144
Lease liability		22,669			245,207
Series D-1 Preferred Stock, 500,000 shares designated; $0.00001 par value $2.00 stated value; 0 shares and 311,250 shares issued and outstanding at September 30, 2019 and December 31, 2018. Liquidation preference $0 as of September 30, 2019 and $622,500 as of December 31, 2018.		-			622,500
Bank loans		249,937			233,250
Series D-2 Preferred Stock, 2,500,000 shares designated; $0.00001 par value, $2.00 stated value; 941,408 shares and 0 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively. Liquidation preference $1,882,816 as of September 30, 2019		1,882,816			-
Merchant cash advances, net of discounts		410,012			472,829
Series D-3 Preferred Stock, 500,000 shares designated; $0.00001 par value $5.00 stated value; 54,846 shares issued and outstanding at September 30, 2019 and December 31, 2018. Liquidation preference $274,234		274,234			274,234
Total Current Liabilities		14,763,943			12,286,198
Total Current Liabilities		20,421,127			6,425,547
Lease Liability		59,372			59,372
Total Liabilities		20,421,127			6,425,547
SBA and PPP Loans		485,782			-
Total Long - Term Liabilities		545,154			59,372
Total Liabilities		15,309,097			12,345,570
Commitments and Contingencies
Series B Preferred Stock, 1,000,000 shares designated; $0.00001 par value, $1.00 stated value; 174,000 shares and 27,980 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively. Liquidation preference $170,400		170,400			121,000
Series D-1 Preferred Stock, 500,000 shares designated; $0.00001 par value $2.00 stated value; 0 shares issued and outstanding at September 30, 2020 and December 31, 2019. Liquidation preference $0 as of September 30, 2020		-			-
Series D-2 Preferred Stock, 2,500,000 shares designated; $0.00001 par value, $2.00 stated value; 929,918 shares and 915,968 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively. Liquidation preference $2,503,748		2,557,812			2,442,542
Series D-3 Preferred Stock, 500,000 shares designated; $0.00001 par value $5.00 stated value; 54,840 shares issued and outstanding at September 30, 2020 and December 31, 2019. Liquidation preference $274,234		274,234			274,234
Stockholders’ Deficit:
Preferred stock: 50,000,000 authorized; $0.00001 par value:
Series A Preferred Stock, 10,000,000 shares designated; $0.00001 par value; 8,529,316 shares and 6,500,000 issued and outstanding at September 30, 2019 and December 31, 2018, respectively		85			65
Series A Preferred Stock, 10,000,000 shares designated; $0.00001 par value; 9,196,316 and 9,064,316 shares issued and outstanding at September 30, 2020 and December 31, 2019		93			92
Series C Preferred Stock, 2 share designated; $0.00001 par value; 1 shares issued and outstanding at September 30, 2019 and December 31, 2018		1			1
Series C Preferred Stock, 2 share designated; $0.00001 par value; 1 shares issued and outstanding at September 30, 2020 and December 31, 2019		1			1
Series D-5 Preferred Stock, 1,000,000 shares designated; $0.00001 par value, $4.00 stated value; 120,088 shares and 0 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively		480,352			-
Series D-5 Preferred Stock, 1,000,000 shares designated; $0.00001 par value, $4.00 stated value; 128,494 shares and 0 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		513,976			513,976
Series D-6 Preferred Stock, 1,000,000 shares designated; $0.00001 par value $5.00 stated value; 55,600 shares and 0 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively		278,000			-
Series D-6 Preferred Stock, 1,000,000 shares designated; $0.00001 par value $5.00 stated value; 104,680 shares issued and outstanding at September 30, 2020 and December 31, 2019.		523,400			523,400
Common stock: 80,000,000 authorized, $0.00001 par value; 25,410,374 and 6,542,519 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively		254			65
Common stock: 8,000,000,000 authorized, $0.00001 par value; 902,746,952 and 36,935,303 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		9,024			369
Additional paid-in capital		69,~~581~~096,~~434~~420			58,~~336~~341,~~977~~811
Minority interest		20(566,~~301~~546	)		-(412,753	)
Accumulated other comprehensive income (loss)		(2,320	)		1,295
Accumulated other comprehensive income		(1,493	)		(2,455	)
Accumulated deficit		(2627,~~660~~033,~~984~~039	)		(1122,~~180~~756,~~903~~345	)
Total Stockholders’ Deficit		(1917,~~302~~458,~~877~~164	)		(513,~~842~~791,~~500~~904	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	1853,~~118,250~~379		$	~~583~~1,~~047~~391,442

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

12 ReTech Corporation

Condensed Consolidated Statements of Operations

(unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
	2020			2019			2020			2019
Revenues	$	~~165~~68,~~798~~052		$	48165,~~102~~798		$	~~625~~590,~~058~~814		$	73625,~~726~~058
Cost of revenues		113,015			26,795			426,393			26,831
Cost of revenue		33,539			113,015			304,700			426,393
Gross Profit		5234,~~783~~513			2152,~~307~~783			~~198~~286,~~665~~114			46198,~~895~~665
Operating Expenses
General and administrative	$	~~300~~366,~~673~~783		$	~~506~~300,~~327~~673			1,~~068~~425,~~216~~356			1,~~740~~068,~~398~~216
Professional fees		~~311~~94,~~113~~179			~~429~~311,~~409~~113			~~840~~428,~~611~~681			~~934~~840,~~459~~611
Depreciation		469,~~973~~256			24,~~552~~973			16264,~~095~~678			516,~~085~~095
Total Operating Expenses		~~616~~530,~~759~~218			~~938~~616,~~288~~759			12,~~924~~118,~~922~~715			21,~~679~~924,~~942~~922
Loss from operations		(~~563~~495,~~976~~705	)		(~~916~~563,~~981~~976	)		(1,~~726~~832,~~257~~601	)		(21,~~633~~726,~~047~~257	)
Other Expense
Other income	$	1217,~~027,306~~052		$	(71,027,306	)		1416,~~034,956~~218			(71,034,956	)
Reserve Expense		(~~142~~131,~~354~~131	)		-(142,354	)		(1355,~~687,528~~684	)		-(1,687,528	)
Loss on debt extension		-			-			-			~~(75,000~~-	)
Interest expense		(298,~~196,459~~752	)		(~~147~~2,~~719~~196,459	)		(8335,~~296,103~~339	)		(~~986~~8,~~312~~296,103	)
Loss on exchange of equity instruments		-			-			~~(132,812~~-	)		-(132,812	)
Loss on impairment of software development cost		-			-			(513,601	)		-
Loss on impairment of goodwill		-			-			-			-
Loss on derivative liability		(3,200,690	)		(704,116	)		(4,169,269	)		(1,637,527	)
Loss on impairment of software development cost		-			-			-			(513,601	)
Net Other Expense		(4,512,197	)		(851,842	)		(13,764,357	)		(2,698,846	)
Gain/loss on derivative liability		6,688,600			(3,200,690	)		(2,323,080	)		(4,169,269	)
Net Loss	$	(5,076,173	)	$	(1,768,823	)	$	(15,490,614	)	$	(5,331,893	)
Net Other Expense		6,675,769			(4,512,198	)		(2,597,885	)		(13,764,357	)
Other comprehensive income (loss) - foreign currency translation adjustment	$	7,804		$	131		$	(3,615	)	$	5,256
Net Loss		6,180,064			(5,076,174	)		(4,430,486	)		(15,490,614	)
Comprehensive Loss	$	(5,068,369	)	$	(1,768,692	)	$	(15,494,229	)	$	(5,326,637	)
Deemed Dividend - Preferred Stock					-						-
Minority Interest	$	(5,939	)	$	-		$	(10,533	)	$	-
Net Loss	$	6,180,064		$	(5,076,174	)	$	(4,430,486	)	$	(15,490,614	)
Net Loss to 12 ReTech Corporation	$	(5,062,430	)	$	(1,768,692	)	$	(15,483,696	)	$	(5,326,637	)
Other comprehensive income- foreign currency translation adjustment		3			7,804			962			(3,615	)
Net Loss Per Common Share: Basic and Diluted	$	(0.21	)	$	(1.74	)	$	(0.98	)	$	(5.95	)
Comprehensive Loss	$	6,180,067		$	(5,068,370	)	$	(4,429,524	)	$	(15,494,229	)
Weighted Average Number of Common Shares Outstanding: Basic and Diluted		24,128,911			1,015,155			15,860,943			896,603
Minority Interest	$	1,027		$	(5,939	)	$	(153,792	)	$	(10,533	)
Net Loss to 12 ReTech Corporation		6,179,040			(5,062,431	)		(4,275,732	)		(15,483,696	)
Net Loss Per Common Share: Basic and Diluted	$	0.04		$	(0.21	)	$	(0.09	)	$	(0.98	)
Weighted Average Number of Common Shares Outstanding: Basic and Diluted		146,341,243			24,128,911			47,357,790			15,860,943

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

12 ReTech Corporation

Condensed Consolidated Statement of Stockholder’s Deficit

Three and ~~Nine~~nine months ended September 30, ~~2019~~2020 and ~~2018~~2019

(unaudited)

	Series A Preferred Stock				Series C Preferred Stock				Series D-5 Preferred Stock				Series D-6 Preferred Stock				Common Stock						~~Additional~~						~~Common~~						~~Other~~						~~Total~~
	Number of Shares		Amount		Number of Shares		Amount		Number of Shares		Amount		Number of Shares		Amount		Number of Shares			Amount			Additional Paid-in Capital			~~Subscription~~Minority ~~receivable~~Interest			~~Stock~~Other toComprehensive ~~be issued~~Income			~~Minority~~Accumulated ~~Interest~~Deficit			~~Comprehensive~~Total ~~Income~~Stockholders’ Deficit			~~Accumulated Deficit~~			~~Stockholders’ Deficit~~
Balance - June 30. 2018		5,000,000		50		-		-		-		-		-		-		938,457			9			3,911,976			(320,000	)		-			-			6,638			(6,607,906	)		(3,009,233	)
Balance - June 30, 2019		6,500,000		65		1		1		120,088		480,352		55,600		278,000		25,410,374			254			5,263,018			26,240			(10,124	)		(21,590,749	)		(15,546,520	)
Common Stock issued for cash																								67,999			252,500															320,499
Common stock issued for conversion of notes payable and accrued interest		-		-		-		-		-		-		-		-		2,124,667			21			10,623			-			-			-			10,645
Common Stock issued for services																		106,667			1			(751,342	)																	(751,342	)
Common stock issued for Preferred Shares conversion		-		-		-		-		-		-		-		-		3,000,000			30			27,000			-			-			-			27,030
Common stock issued for conversion of notes payable and accrued interest																		227,171			2			168,110																		168,117
Preferred Stock issued with for services		114,615		1		-		-		-		-		-		-		-			-			62,999			-			-			-			62,999
Common stock issued for Preferred Shares conversion																		236,504			2			(8,784	)																	(8,784	)
Series D-2 shares exchange for common stock		-		-		-		-		-		-		-		-		-			-			-			-			-			-			-
Common Stock issued to Noteholder																		36,443			-			65,765																		65,765
Exchange Series A preferred stock for related party and third party liabilities		-		-		-		-		-		-		-		-		-			-			1,179,663			-			-			-			1,179,663
Preferred shares issues for services		1,500,000		15		1		1																																		16
Relief of derivative through conversion and issuance of preferred stock derivatives		1,915,151		19		-		-		-		-		-		-		-			-			51,676			-			-			-			51,676
Foreign currency translation adjustments																																				(6,638	)					(6,638	)
Net loss		-		-		-		-		-		-		-		-		-			-			-			(5,938	)		7,804			5,070,236			(5,068,370	)
Net Loss																								16,250															(1,182,303	)		(1,166,053	)
Balance - September 30, 2019		8,529,316		85		1		1		120,088		480,352		55,600		278,000		25,410,374			254			6,556,277			20,302			(2,320	)		(26,660,984	)		(19,302,877	)
Balance - September 30, 2018		6,500,000		65		1		1		-		-		-		-		1,545,242			1,545			3,469,975			(67,500	)		-			-			-			(7,790,209	)		(4,387,653	)
Balance - December 31, 2018		6,500,000	$	65		1	$	1		-	$	-		-	$	-		6,542,520		$	65		$	5,336,977		$			$	1,295		$	(11,180,903	)	$	(5,842,500	)
Balance - December 31, 2018		6,500,000	$	65		1	$	1		-	$	-		-	$	-		6,542,520		$	65		$	5,336,977			-		$	-		$	-		$	1,295		$	(11,180,903	)	$	(5,842,500	)
Common stock issued for conversion of notes payable and accrued interest		-		-		-		-		-		-		-		-		10,904,612			109			303,364			-			-			-			303,484
Balance - December 31, 2017		5,000,000	$	50	$	-	$	-		-		-		-		-		822,000		$	8		$	1,268,780			-		$	92,646		$			$	1,514		$	(2,413,739	)	$	(1,050,791	)
Common stock issued for Preferred Shares conversion		-		-		-		-		-		-		-		-		8,025,742			80			255,733			-			-			-			255,814
Series B Preferred stock issued for cash																								260,000																		260,000
Preferred stock issued with acquisition		-		-		-		-		120,088		480,352		55,600		278,000		-			-			-			30,834			-			-			789,272
Common stock issued as part of funds raised																		7,683			-			117,646						(92,646	)											25,000
Preferred Stock issued with for services		114,165		1		-		-		-		-		-		-		-			-			62,999			-			-			-			62,999
Common Stock issued for cash																		62,500			1			599,249			(67,500	)														531,752
Series D-2 shares exchange for common stock		-		-		-		-		-		-		-		-		(62,500	)		(1	)		(523,374	)		-			-			-			(523,376	)
Common stock issued for services																		136,001			1			(302,482	)					-												(302,481	)
Exchange Series A preferred stock for related party and third party liabilities		1,915,151		19		-		-		-		-		-		-		-			-			1,179,663			-			-			-			1,179,663
Common stock issued for conversion of notes payable and accrued interest																		234,111			2			346,982																		346,985
Relief of derivative through conversion and issuance of preferred stock derivatives		-		-		-		-		-		-		-		-		-			-			(34,004	)		-			-			-			(34,004	)
Common stock issued for acquisition of E-motion																		10,000			-			80,000																		80,000
Net loss		-				-		-		-		-		-		-		-			-						(10,532	)		(3,615	)		(15,480,081	)		(15,494,229	)
Common stock issued for Preferred Shares conversion																		236,504			2			(8,558	)																	(8,555	)
Balance - September 30, 2019		8,529,316		85		1		1		120,088		480,352		55,600		278,000		25,410,374			254			6,556,277			20,302			(2,320	)		(26,660,984	)		(19,302,877	)
Common Stock issued to Noteholder																		36,443			1			65,801																		65,801
Balance June 30, 2020		9,183,816		92		1		1		128,494		513,976		104,680		523,400		755,657,804			7,555			9,055,278			(567,572	)		(1,496	)		(33,212,076	)		(23,680,844	)
Preferred shares issued for Cash																								16																		16
Common stock issued for conversion of notes payable and accrued interest		-		-		-		-		-		-		-		-		69,089,148			691.00			5,527			-			-			-			6,218
Beneficial conversion feature																								774,282																		774,282
Common stock issued for Preferred Shares conversion		-		-		-		-		-		-		-		-		78,000,000			780			7,020			-			-			-			7,799
Deemed Dividend																								252,078																		252,075
Series D-2 shares exchanged for common stock						-		-		-		-		-		-		-			-			-			-			-			-			(1	)
Foreign currency translation adjustments																																				(1,514	)					(1,514	)
Preferred shares issued for Cash		-		-		-		-		-		-		-		-		-			-			-			-			-			-			-
Net Loss																								16,247															(5,376,470	)		(5,360,223	)
Preferred shares issued for compensation		12,750		0		-		-		-		-		-		-		-			-			51			-			-			-			51
Balance - September 30, 2018		6,500,000		65		1		1		-		-		-		-		1,545,242			15			3,469,975			(67,500	)		-			-			-			(7,790,209	)		(4,387,653	)
Relief of derivative through conversion and issuance of preferred stock derivatives		-		-		-		-		-		-		-		-		-			-			-			-			-			-			-
Balance - December 31, 2018		6,500,000	$	65		1	$	1		-	$	-		-	$	-		6,542,520		$	65		$	5,336,977			-		$	-		$	-		$	1,295		$	(11,180,903	)	$	(5,842,500	)
Dividends		-		-		-		-		-		-		-		-		-			-			6,912			-			-			-			6,912
Balance - June 30, 2019		6,500,000		65		1		1		120,088		480,352		55,600		278,000		20,285,708			203			5,249,407						-			26,240			(10,124	)		(21,590,749	)		(15,546,521	)
Net loss		-		-		-		-		-		-		-		-		-			-			21,632			1,026			3			6,179,037			6,201,700
Common stock issued for conversion of notes payable and accrued interest		-		-		-		-		-		-		-		-		2,124,667			21			10,623			-			-			-			-			-			10,645
Balance September 30, 2020		9,196,566		92		1		1		128,494		513,976		104,680		523,400		902,746,952			9,026			9,096,420			(566,546	)		(1,493	)		(27,033,039	)		(17,458,164	)
Common stock issued for Preferred Shares conversion		-		-		-		-		-		-		-		-		3,000,000			30			27,000			-			-			-			-			-			27,030
Balance - December 31, 2019		9,183,816		92		1		1		128,494		513,976		104,680		523,400		1,315,323,569			13,153			18,256,846			(722,391	)		(537	)		(77,737,604	)		(58,574,075	)
Preferred stock issued with acquisition		-		-		-		-		-		-		-		-		-			-			-			-			-			-			-			-			-
Common stock issued for conversion of notes payable and accrued interest		-		-		-		-		-		-		-		-		202,503,779			2,023			70,295			-			-			-			72,318
Preferred stock issued for services		114,165		1		-		-		-		-		-		-		-			-			62,999			-			-			-			-			-			62,999
Common stock issued for Preferred Shares conversion		-		-		-		-		-		-		-		-		483,807,870			4,838			48,374			-			-			-			53,211
Series D-2 shares exchanged for common stock		-		-		-		-		-		-		-		-		-179,500,000			-1,795			-18,305			-			-			-			-20,099						-
Exchange Series A preferred stock for related party and third party liabilities		1,915,151		19		-		-		-		-		-		-		-			-			1,179,663			-			-			-			-			-			1,179,663
Preferred shares issued for Cash		-		-		-		-		-		-		-		-		-			-			-			-			-			-			-
Relief of derivative through conversion and issuance of preferred stock derivatives		-		-		-		-		-		-		-		-		-			-			51,676			-			-			-			-			-			51,676
Preferred shares issued for compensation		12,750		0		-		-		-		-		-		-		-			-			4,957			-			-			-			4,957
Net loss		-		-		-		-		-		-		-		-		-			-			-			-			-			(5,938	)		7,804			(5,070,236	)		(5,068,370	)
Relief of derivative through conversion and issuance of preferred stock derivatives		-		-		-		-		-		-		-		-		-			-			-			-			-			-			-
Balance - September 30, 2019		8,529,316		85		1		1		120,088		480,352		55,600		278,000		25,410,374			254			6,581,368			-			-			20,302			(2,320	)		(26,660,984	)		(19,302,877	)
Dividends		-		-		-		-		-		-		-		-		-			-			313,749			-			-			-			313,749
Balance - December 31, 2018		6,500,000	$	65		1	$	1			$				$			6,542,520		$	65		$	5,336,977		$	-		$	-		$	-		$	1,295		$	(11,180,903	)	$	(5,842,500	)
Net loss		-		-		-		-		-		-		-		-		-			-			298,931			(153,793	)		962			(4,276,694	)		(4,130,592	)
Common stock issued for conversion of notes payable and accrued interest		-		-		-		-		-		-		-		-		10,904,612			109			303,375			-			-			-			-			-			303,484
Balance September 30, 2020		9,196,566		92		1		1		128,494		513,976		104,680		523,400		902,746,952			9,026			9,096,420			(566,546	)		(1,493	)		(27,033,039	)		(17,458,164	)
Common stock issued for Preferred Shares conversion		-		-		-		-		-		-		-		-		8,025,742			80			255,733			-			-			-			-			-			255,814
Preferred stock issued with acquisition		-		-		-		-		120,088		480,352		55,600		278,000		-			-			-			-			-			30,834			-			-			789,272
Preferred stock issued for services		114,165		1		-		-		-		-		-		-		-			-			62,999			-			-			-			-			-			62,999
Series D-2 shares exchanged for common stock		-		-		-		-		-		-		-		-		(62,500	)		(1	)		(523,375	)		-			-			-			-			-			(523,376	)
Exchange Series A preferred stock for related party and third party liabilities		1,915,151		19		-		-		-		-		-		-		-			-			1,179,663			-			-			-			-			-			1,179,663
Relief of derivative through conversion and issuance of preferred stock derivatives		-		-		-		-		-		-		-		-		-			-			(34,004	)		-			-			-			-			-			(34,004	)
Net loss		-		-		-		-		-		-		-		-		-			-			-			-			-			(10,532	)		(3,615	)		(15,480,081	)		(15,494,229	)
Balance - September 30, 2019		8,529,316		85		1		1		120,088		480,352		55,600		278,000		25,410,374			254			6,581,368			-			-			20,302			(2,320	)		(26,660,984	)		(19,302,877	)

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

12 ReTech Corporation

Condensed Consolidated Statements of Cash Flow

(unaudited)

	Nine Months Ended
	September 30,
	2019			2018
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(154,~~490~~430,~~614~~486	)	$	(515,~~331~~490,~~893~~614	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		16264,~~095~~678			516,~~085~~095
Bad debt		-			-
Stock based compensation		-			63,000
Stock based compensation		63,000			1,231,549
Amortization of debt discount		-			674,210
Amortization of debt discount		674,210			972,641
Gain/loss on derivative liability and additional interest expense recorded on issuance		2,323,080			11,199,339
Change in fair value of derivative liabilities		-			1,637,527
Increase in notes payable and Series D-2 for defaults		355,684			1,687,528
Loss on debt extinguishment		-			75,000
Excess fair market value of common shares over liabilities settled		123,375			196,711
Accretion of interest for note payable		-			1,854
Impairment of software development cost					513,601
Increase in notes payable and Series D-2 for defaults		1,687,528			-
Relief of notes payable and other liabilities through rescindment of Emotion acquisition					(163,805	)
Impairment of software development costs		513,601			-
Accrual of dividends on preferred stock		20,661			-
Loss on derivative liability and additional interest expense recorded on issuance		11,199,339			-
Loss on exchange and issuance of preferred stock		-			674,644
Loss on exchange and issuance of preferred stock and additional interest expense		674,644			-
Right of use lease		3,290			-
Excess fair market value of common shares over liabilities settled		196,713			-
Accounts receivable		108,616			(11,363	)
Relief of notes payable and other liabilities through rescindment of Emotion acquisition		(163,805	)		-
Prepaid Expenses		(4,405	)		(2,716	)
Changes in operating assets and liabilities:
Inventory		42,737			23,140
Accounts receivable		(11,363	)		(26,396	)
Security deposit					793
Prepaid Expenses		(2,716	)		(13,865	)
Other current assets		115.136			108,600
Inventory		23,140			18,874
Accounts payable and accrued liabilities		692,210			115,724
Other current assets		108,600			(2,257	)
Net Cash Provided By (Used in) Operating Activities		(385,424	)		(395,111	)
Security deposit		793			3,143
Accounts payable and accrued liabilities		115,724			443,981
Net Cash Used in Operating Activities		(395,111	)		(984,757	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		(16,146	)		(2,412	)
Purchase of property and equipment		400			(16,146	)
Cash received from acquisition		~~12,924~~-			~~779~~12,924
Cash paid on acquisition		~~(79,937~~-	)		(79,937	)
Software development costs		~~(142,483~~-	)		(~~177~~142,~~270~~483	)
Other assets		5,519
Security deposit		(175,426	)		5,519
Net Cash Used in Investing Activities		(~~220~~175,~~123~~026	)		(~~178~~220,~~903~~123	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stockholders		52,646			62,326
Proceeds (repayments) from stockholders		(235	)		52,646
Repayment to stockholders		-			(36,931	)
Proceeds from convertible notes payable		60,000			527,740
Proceeds from convertible notes payable		527,740			482,500
Proceeds from Preferred Stock		-			10,000
Costs on issuance of convertible notes payable		-			(26,469	)
Proceeds from notes payable		-			31,000
Issuance of common stock for cash		-			211,250
Repayments of related party notes payable		(15,000)			-
Proceeds from sale of Series D-3 Preferred Stock		-			100,000
Proceeds from SBA and PPP loan		485,782
Proceeds from sale of Series B Preferred Stock		-			329,000
Proceeds from merchant financing		-			-
Costs of issuance of Series B preferred Stock		-			(9,000	)
Payments on merchant financing		(62,817	)		-
Proceeds from sale of preferred and common stock		10,000			0
Proceeds from bank loans		16,687			-
Proceeds from notes payable		31,000			0
Net Cash Provided by Financing Activities		484,416			621,386
Net Cash Provided by Financing Activities		621,386			1,112,676
Effect of Exchange Rate Changes on Cash and Cash Equivalents		962			(3,615	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents		(3,615	)		1,231
Net decrease in cash and cash equivalents		(76,034	)		6,152
Net decrease in cash and cash equivalents		2,537			(49,751	)
Cash and cash equivalents, beginning of period		118,860			37,721
Cash and cash equivalents, beginning of period		37,721			100,264
Cash and cash equivalents, end of period	$	42,826		$	40,258
Cash and cash equivalents, end of period	$	40,258			50,513
Supplemental cash flow information
Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-
Non-cash transactions:
Common stock to be issued in current period				$	12,500
Discounts on convertible notes payable	$	7.099		$	452,528
Discounts on convertible notes payable	$	452,528		$	-
Conversions of convertible notes payable, accrued interest and derivatives	$	106,833		$	1,020,790
Conversions of convertible notes payable, accrued interest and derivatives	$	1,020,790		$	-
Conversion of preferred stock in common stock	$	38,799		$	758,352
Reduction of APIC related to derivative recorded on Preferred Stock in equity	$	~~850,695~~-		$	-850,695
Preferred stock issued for acquisitions	$	758,352		$	-
Conversions of Series B and D-2 preferred stock into common stock	$	-		$	509,157
Original issue discount on convertible notes payable	$	509,157		$	-
Exchange of preferred stock for different series	$	-		$	1,145,938
Exchange of common stock and preferred stock for different series	$	1,145,938		$	-
Issuance of Series A for liabilities	$			$	431,338
Issuance of Series D-2 for accounts payable	$	~~200,000~~-		$	-200,000
Issuance of Series A for liabilities	$	431,338		$	-
Common stock issued in conjunction with convertible notes	$	-		$	86,600
Conversion of Series B and D-2 preferred stock into common stock	$	-		$	46,234
Beneficial conversion feature for Series B preferred stock	$	-		$	173,923
Beneficial conversion feature for convertible notes payable	$	-		$	349,576
Related party liability relived with Series D-3 preferred stock	$	-		$	154,234
Common stock issued for acquisition for E-motion	$	-		$	80,000

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

12 RETECH CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, ~~2019~~2020

(Unaudited)

~~Note~~NOTE 1 –- ~~Nature~~NATURE ofOF ~~the Business~~BUSINESS

12 ReTech Corporation ~~(“the Company”)~~ is a holding company with subsidiaries that develop, sell, and ~~deploy~~install software that ~~the~~we ~~Company~~believe ~~believes~~enhance ~~will~~the ~~REINVENT~~shopping experience ~~RETAIL~~ for shoppers and retailers. As a holding company, we also acquire synergistic operating companies that manufacture and sell fashion and other products to other retailers as well as ~~sell~~selling these products online. In October 2019, we acquired retail stores in airport terminals and casinos, solidifying us as a true Omni-Channel retailer. Owning our own brick and mortar stores will allow us to deploy our cutting-edge software and Apps in the United States, to demonstrate its effectiveness at attracting shoppers and inducing them to purchase. In our own stores, we plan to test, in real time, new software products which should delight consumers and generate incremental revenues and profits for our stores. If we can show incremental revenues and profits for ourselves, we believe that other retailers may follow our example and deploy our software solutions themselves.

AsWith athe ~~subsequent~~intended ~~event~~future onlaunch ~~October~~of 1,our ~~2019,~~social ~~the~~shopping ~~Company~~app ~~acquired~~which ~~twelve~~is ~~(12)~~in ~~retail~~development ~~stores operating~~ in ~~airport~~2021 ~~terminals~~(see ~~and~~subsequent ~~casinos transforming~~events), ~~the~~we ~~Company~~intend ~~into a true Omni-Channel retailer. The new operations will allow us~~ to ~~deploy our cutting-edge software~~associate inwith ~~the~~other ~~United~~retailers ~~States~~on toa ~~demonstrate its effectiveness as well as to test, in real time,~~ new ~~software~~shopping ~~products~~platform that will ~~continue to~~benefit ~~delight~~both consumers and ~~generate~~retailers ~~additional~~in ~~revenue~~new and ~~profit~~exciting ~~opportunities for retailers~~ways.

During the 4th quarter 2019 and continuing in the first quarter 2020 amid the effects of the pandemic created by COVID-19, the Company chose to consolidate its operations around three operating entities; 12 Tech, Inc., formed in Arizona on December 26, 2019 (“12 Tech”) and 12 Retail Corporation, formed on September 17th, 2017 (“12 Retail”), and the 12 Fashion Group, Inc formed on June 26, 2020.

12 Retail operates its own retail outlet(s) as well as those of Bluwire Group, LLC (“Bluwire”), that operates retail stores in airports (mainly in international terminals) and casinos. Because of their locations mainly in international terminals of airports, all Bluwire Company owned stores and all but one royalty store remains closed due to Covid-19. 12 Retail will also serve to demonstrate the effectiveness of the software technology created by 12 Tech in improving revenues and profits for retailers as well as providing access to other retailers through our soon to be launched social shopping app, and through our wholesale fashion business relationships.

12 Fashion Group, Inc., an Arizona Corporation, was formed on June 26, 2020, and operates our fashion wholesale and direct to consumer brands, including Rune NYC, Social Sunday, and Red Wire Design, as well as consolidating remaining operations from our other smaller fashion acquisitions.

Today, 12 Tech aims to provide technology solutions both online and inside retail brick and mortar that helps retailers acquire customers, reduce overhead expenses, streamline operations, and gain incremental revenues and profits. Existing 12 Tech solutions are deployed mainly in Asia. We are planning to deploy our solutions in the United States retail markets, which serve the world’s largest consumer economy. While we continue to operate in Asia, we have consolidated our international units, which were focused on our technology deployment (“12 Japan” and “12 Europe”), and consolidated our software development company 12 Hong Kong, Ltd (“12 HK”), under 12 Tech to further streamline our own operations.

As the retail environment continues to evolve, we as both retailers and technologists, will evolve with it. We believe our developed software, both current and in development, will delight consumers, provide contactless experiential shopping, and assist retailers with the recapture of their revenues as they combat the dual threats of Amazon and Walmart. Our software, once fully deployed and implemented, may provide retailers with another effective online and mobile sales channel besides their current options of Google, Amazon, and/or Facebook/Instagram.

As an innovative retail technology company that has been built through acquisitions and ideas, we will continue to search for additional synergistic acquisitions that bring incremental revenues and profitability and/or provide innovative software solutions.

Principal subsidiaries

The details of the principal subsidiaries of the Company are set out as follows:

Name of Company

Place of Incorporation

Date of Incorporation

Acquisition Date

Attributable Equity Interest %

Business

12 Hong Kong Limited (“12HK”)

Hong Kong, China

February 2, 2014

June 27, 2017

100

Development and sales of technology applications

12 Retail Corporation (“12 Retail”)

Arizona, USA

Sept. 18, 2017

Formed by 12 ReTech Corporation

100

As a holding Company to execute the Company’s roll up acquisition strategy as well as to penetrate the North American market with our technology to select retailers. Separated into two division: 12 Fashion Group, Inc., and Bluwire Group, LLC.

12 Retail Corporation (“12 Retail”)

Arizona, USA

Sept. 18, 2017

Formed by 12 ReTech Corporation

100

As a holding Company to execute the Company’s roll up acquisition strategy as well as to penetrate the North American market with our technology to select retailers.

Red Wire Group, LLC

Utah, USA

July 2, 2015

February 19, 2019

100

Operations are consolidated into 12 Fashion Group, and this company is closed, and we filed a Chapter 11 Subsection V on March 6, 2020. This was discharged on or about September 2020 and. is permanently closed

Red Wire Group, LLC

Utah, USA

July 2, 2015

February 19, 2019

100

A subsidiary of 12 Retail and is part of the brand acquisition strategy. Operates its own “cut & sew” factory for independent third party brands who contract us to produce their apparel products.

Rune NYC, LLC

New York, USA

Jan 23, 2013

March 14, 2019

92.5

Operated by 12 Fashion Group, Inc., an unincorporated division of 12 Retail. Operates contemporary women’s ‘Athleisure’ brand which is primarily sold to retailers.

Rune NYC, LLC

New York, USA

Jan 23, 2013.

March 14, 2019

92.5

A subsidiary of 12 Retail and is part of the brand acquisition. Operates contemporary women’s ‘Athleisure’ brand which is primarily sold to retailers.

Bluwire Group, LLC (“Bluwire”)

Florida, USA

Feb 1, 2010

October 1, 2019

60.5

A subsidiary of 12 Retail with 12 brick and mortar stores was acquired.

12 Japan Limited (“12JP”)

Tokyo, Japan

February 12, 2015

July 31, 2017

100

Consultation and sales of technology applications

Social Decay, LLC dba Social Sunday (“Social Sunday”)

New Jersey, USA

Sept 24, 2014

November 1, 2019

100

Operated by 12 Fashion Group Inc., a division of 12 Retail. Operates a contemporary women’s clothing brand primarily sold to wholesalers.

12 Europe AG (“12EU”)

Zurich, Switzerland

August 22, 2013

October 26, 2017

100

Inactive as of August 20, 2019

12 Tech Inc

Arizona, USA

Dec 26,2019

Formed by 12 Retech

100

As a holding Company to execute the Company’s technology strategy.

Bluwire Group, LLC (“Bluwire”)

Florida, USA

October 1, 2019

As a subsequent event, this 12 location retailer was acquired.

12 Hong Kong Limited (“12HK”)

Hong Kong, China

February 2, 2014

June 27, 2017

100

A subsidiary of 12 Tech Inc. Development and sales of technology applications. Services customers in Asia, including Japan.

12 Japan Limited (“12JP”)

Tokyo, Japan

February 12, 2015

July 31, 2017

100

A subsidiary of 12 Tech Inc. Consultation and sales of technology applications. As of June 2020, our Japanese customer (s) is serviced by 12 Hong Kong.

12 Europe AG (“12EU”)

Switzerland

August 22, 2013

October 26, 2017

100

As of September 2019, this company is closed.

12 Fashion Group Inc

Arizona, USA

June 26, 2020

Formed by 12 Retech

100

Formed as a subsidiary of 12 Retech to hold and operate the wholesale and Retail fashion and apparel operations.

Note 2 – Going Concern

The Company accounts for going concern matters under the guidance of ASU 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entities Ability to Continue as a” Going Concern” (“ASU 2014-15”). The guidance in ASU 2014-15 sets forth management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern as well as required disclosures. ASU 2014-15 indicates that, when preparing financial statements for interim and annual financial statements, management should evaluate whether conditions or events, in the aggregate, raise substantial doubt about the entity’s ability to continue as a going concern for one year from the date the financial statements are issued or are available to be issued. This evaluation should include consideration of conditions and events that are either known or are reasonably knowable at the date the financial statements are issued or are available to be issued, as well as whether it is probable that management’s plans to address the substantial doubt will be implemented and, if so, whether it is probable that the plans will alleviate the substantial doubt.

These interim financial statements have been prepared on a going concern basis which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of September 30, 2019, the Company had a total accumulated deficit totaling $26,660,984 since inception, has not yet generated significant revenue from its operations, and will require additional funds to maintain its normal operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. These interim financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 3 – Acquisitions

The Company accounts for all business combinations in accordance with Financial Accounting Standards Board (“FASB”) ASC 805, “Business Combinations” (“ASC 805”), using the acquisition method of accounting. Under this method, assets and liabilities, including any remaining non-controlling interests, are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, may be made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period would be recorded as income. Results of operations of the acquired entity are included in the Company’s results from operations from the date of the acquisition onward and include amortization expense arising from acquired assets. The Company expenses all costs as incurred related to an acquisition in the condensed consolidated statements of operations.

~~Red~~Reverse ~~Wire~~Stock ~~Group,~~Split ~~LLC.~~and increase in authorized shares

On ~~February~~October 1918, 2019, the Company completed ~~the~~a ~~acquisition~~100-for-1 ofreverse ~~Red~~common ~~Wire~~stock ~~Group,~~split ~~LLC.~~reducing ~~(“RWG”)~~the aoutstanding ~~Utah~~common ~~limited~~shares ~~liability company, pursuant~~ to a25,410,391. Upon ~~share exchange agreement whereby~~ the ~~Company~~stock ~~exchanged~~split, the Company’s ~~Series~~authorized ~~D-5~~common ~~and~~shares ~~Series D-6 for 100%~~ of ~~the~~8,000,000,000 ~~outstanding~~did ~~equity~~not ~~of RWG~~change. ~~Pursuant~~The toreverse ~~the~~split ~~terms~~has ofbeen ~~the~~retroactively applied ~~exchange~~to ~~agreement,~~share ~~the~~amounts ~~Company~~in ~~acquired~~these ~~(i)~~consolidated ~~75%~~financial ofstatements. ~~the~~As ~~membership interests~~a ofsubsequent ~~RWG in exchange for 54~~event,~~000~~ ~~shares~~as of ~~the~~May ~~Company’s Series D-6 Preferred Stock (stated value of $5.00 per share)~~18, ~~and~~ ~~(ii)~~2021 the ~~remaining~~authorized ~~25%~~common stock ofwas ~~the~~increased ~~membership~~to ~~interests of RWG in exchange for 37~~20,~~500~~000,000,000 shares of ~~the~~common ~~Company’s Series D-5 Preferred Stock (stated value of $4~~stock.~~00 per share).~~

~~The~~NOTE ~~powers,~~2 ~~preferences and rights, and the qualifications, limitations and restrictions of the Series D~~-5 ~~and~~GOING ~~Series D-6 Preferred Stock are set forth in the Company’s Current Report on Form 8-K and exhibits attached thereto previously filed with the Securities and Exchange Commission on January 11, 2019.~~CONCERN

~~RWG~~The ~~continued~~Company ~~its~~accounts ~~operations~~for ~~uninterrupted~~going ~~following~~concern matters under the ~~closing~~guidance ~~and~~of ~~retained~~ASU ~~key~~2014-15, ~~employees~~“Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entities Ability to Continue as a” Going Concern” (“ASU 2014-15”). The ~~exchange~~guidance ~~agreement~~in ~~included~~ASU ~~customary~~2014-15 sets forth management’s responsibility to evaluate whether there is substantial ~~representations~~doubt about an entity’s ability to continue as a going concern as well as required disclosures. ASU 2014-15 indicates that, ~~warranties~~when preparing financial statements for interim and ~~covenants~~annual offinancial statements, management should evaluate whether conditions or events, in the ~~parties~~aggregate, raise substantial doubt about the entity’s ability to continue as a going concern for one year from the date the financial statements are issued or are available to be issued. ~~The~~This ~~closing~~evaluation should include consideration of conditions and events that are either known or are reasonably knowable at the ~~Exchange~~date ~~Agreement~~the isfinancial ~~subject~~statements are issued or are available to ~~certain~~be ~~closing conditions~~issued, ~~including~~as well as whether it is probable that management’s plans to address the ~~Members~~substantial ~~have~~doubt ~~not~~will ~~materially~~be ~~misrepresented~~implemented ~~any~~and, ofif ~~the~~so, ~~representations~~whether ~~contained~~it inis probable that the ~~Exchange Agreement~~plans ~~and~~will ~~its~~alleviate ~~exhibits~~the substantial doubt.

~~The~~These interim financial statements have been prepared on a going concern basis which assumes the Company ~~has~~will ~~consolidated~~continue to realize its assets and discharge its liabilities in the ~~acquisition~~normal ~~effective~~course ~~February~~of 1business. As of September 30, ~~2019~~2020, the Company had a total accumulated deficit totaling $27,033,039 since inception, has not yet generated significant revenue from its operations, and will require additional funds to ~~simplify~~maintain our operations. As of September 30, 2020, the ~~accounting~~Company ~~under~~had ~~ASC~~a ~~805~~working ~~purchase~~capital ~~accounting~~deficit of $14,486,873. These factors raise substantial doubt regarding the Company’s ability to continue as ita ~~pertains~~going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or obtain the ~~acquisition~~necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. The Company intends to finance operating costs over the next twelve months through continued financial support from its shareholders, the issuance of debt securities and private placements of common stock. These financial statements do not include any adjustments to the ~~RWG~~recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

~~The~~NOTE ~~assets~~3 ~~and~~- ~~net~~SUMMARY ~~liabilities~~OF ~~acquired~~SIGNIFICANT ~~(based~~ACCOUNTING ~~on fair values) were as follows:~~POLICIES

Cash	$	10
Other assets (except cash)		106,110
Goodwill		480,381
Liabilities		(136,501	)
Net consideration provided	$	450,000

The fair values of the net assets acquired were determined using the market approach, which indicates value for a subject asset based on available market pricing for comparable assets. The fair value of the fixed assets of $58,110 has been determined by a third-party valuation firm and is valued at its estimated sale price. The Company also capitalized assets of approximately $48,000. The fair value of the debt has been determined using an appropriately required payment amount.

The purchase price for the acquisition was allocated to the fair value of the assets acquired and liabilities assumed based on the estimates of the fair values at the acquisition date, with the amount exceeding the estimated fair values being recorded as goodwill.

The fixed assets are being depreciated over their estimated useful lives of 5 years. Goodwill recorded will not be amortized but tested for impairment at least annually, which will occur during the fourth quarter of the current year. The Company assumed the liabilities of the RWG of $136,501.

RWG results of operations have been included in the Company’s operating results for the period subsequent to the February 1, 2019. RWG contributed revenues of $529,201 for the nine months ended September 30, 2019. The Company is still evaluating the total assets and liabilities at the date of acquisition and further adjustments might be made to the purchase price.

RuneNYC, LLC.

On March 14, 2019, the Company completed the acquisition of RuneNYC, LLC (“Rune”), a New York limited liability company, pursuant to a share exchange agreement whereby the Company exchanged the Company’s Series D-5 shares for 92.5% of the total outstanding equity of Rune and the members of Rune (the “Members”). Pursuant to the terms of the exchange agreement, the Members of Rune (the “Members”) representing 92.5% of the membership interests have agreed to tender their interests to the Company, and the Company closed the tender offer period on March 14, 2019 at which time the exchange agreement became effective. Accordingly, pursuant to the terms of the exchange agreement, at closing the Company acquired 92.5% of the membership interests of Rune were exchange for 82,588 shares of the Company’s Series D-5 Preferred Stock with a stated value of $4.00 per share.

The powers, preferences and rights, and the qualifications, limitations and restrictions of the Series D-5 Preferred Stock are set forth in the Corporation’s Current Report on Form 8-K and exhibits attached thereto previously filed with the Securities and Exchange Commission on January 11, 2019.

Rune continued its operations uninterrupted during closing and retained certain key employees. The exchange agreement included customary representations, warranties and covenants of the parties. The closing of the exchange agreement was subject to certain closing conditions, including that the Members have not materially misrepresented any of the representations contained in the exchange agreement and its exhibits.

The Company has consolidated the acquisition effective February 1, 2019 to simplify the accounting under ASC 805 purchase accounting as it pertains to the acquisition of the Rune.

The assets and net liabilities acquired (based on fair values) were as follows:

Cash	$	12,914
Other assets (except cash)		41,586
Goodwill		394,440
Liabilities		(37,817	)
Net consideration provided	$	411,123

Rune’s results of operations have been included in the Company’s operating results for the period subsequent to it’s acquisition on February 1, 2019. Rune contributed revenues of $123,168 in 2019. The Company is still evaluating the total assets and liabilities at the date of acquisition and further adjustments might be made to the purchase price.

The below table sets forth selected unaudited and unreviewed pro forma financial information for the Company for 2018 compared to 12 ReTech as if RWG and Rune was owned for the nine months ended September 30, 2019 and 2018.

	Proforma
	Nine months ended
	September 30,
	2019			2018
Revenues	$	705,058		$	1,180,989
Cost of revenues		466,393			805,532
Gross profit		238,665			375,457
Operating expenses	$	1.924,922		$	491,487
Operating losses	$	(1,686,257	)	$	(116,030	)
Net Loss	$	(15,450,614	)	$	(2,698,846	)
Earnings Per Share	$	(0.97	)	$	(3.14	)

The unaudited pro forma information set forth above is for informational purposes only. The pro forma information should not be considered indicative of actual results that would have been achieved if the RWG and Rune acquisition had occurred on January 1, 2018. The unaudited supplemental pro forma financial information was calculated by combining the Company’s results with the stand-alone results of Rune. For the identified periods, which were adjusted for certain transactions and other costs that would have been occurred during this pre-acquisition period.

Emotion Apparel, Inc. & Emotion Fashion Group, Inc.

On May 1, 2018, the Company completed the acquisition of E-motion Apparel, Inc. (“EAI”) a California corporation, pursuant to a share exchange agreement whereby the Company exchanged 1.0 million of its common shares for 100% of the outstanding equity of EAI, in a third-party transaction. (This company shed this subsidiary as of September 30th, 2019 see below).

The Original EAI Transaction was accounted for as follows: The fair value of the 1.0 million shares of common stock issued amounted to $80,000. EAI owned four wholly-owned and majority –owned subsidiaries: Lexi Luu Designs, Inc, (a Nevada Corporation), Punkz Gear, Inc, (a Wyoming Corporation), Cleo VII, Inc. (a Nevada Corporation) and Skipjack Dive & Dance Wear, Inc. (a Nevada Corporation), which together owns five microbrands that were included in this transaction and target specific niche markets: Lexi-Luu Dancewear, Punkz Gear, Cleo VII, Skipjack Dive & Dance Wear, and E-motion Apparel, Inc. The acquisition of EAI was accounted for under ASC 805 where purchase price was allocated based on assets acquired and liabilities assumed as of the acquisition date May 1, 2018, at the estimated fair value. During the fourth quarter of 2018, the Company determined that the goodwill associated with the acquisition should be fully impaired, and as such was expensed during the fourth quarter of 2018.

On July 6, 2018, the Company incorporated an new Emotion Apparel, Inc. in the state of Utah and immediately re-named it as Emotion Fashion Group, Inc. (“Emotion Fashion Group” or “EFG”) and does business under the brand name, “Emotion Fashions.”

The EAI share exchange agreement included terms that the Company would provide funding of at least $200,000 in the first 12 months after acquisition and the Seller, who remained as manager, would produce revenues in excess of $1.3 million dollars over that period. The Company secured its investment with a secured line of credit and a landlord’s lien through one of its other subsidiaries. Those liens covered all of the intellectual property and physical assets of Emotion Apparel, Inc. On September 30, 2019 the Company effectively foreclosed on its liens taking possession of the assets including the brands; Lexi-Luu, Emotion Fashion Group, Punkz Gear and retuned the stock in Emotion Apparel, Inc. and its subsidiaries to the Seller. In the 4th quarter 2019 the Company plans to market those brands under new management as part of its consolidation of its acquisitions and utilize its Emotion Fashion Group, Inc, subsidiary that was incorporated in Utah in July 2018. As a result, the related accounts payable and accrued expenses which were payable by Emotion Apparel, Inc. which totaled $511,486 including $250,000 Note Payable, were offset to other income. For further details see Note 6 Accounts Payable and Accrued Expenses and 9 Notes Payable for further details.

12 Japan, LTD.

After the initial acquisition of 12 Hong Kong, LTD during 2017 and the first half of 2018 the Company made several acquisitions including; 12 Japan, LTD. Subsequent to this acquisitions the Company took steps to consolidate the assets and streamline operations that effectively by the end the 3rd quarter 2019, this Company’s no longer function as independent subsidiaries.

12 Japan LTD, in order to streamline operations in the third quarter the Company closed the physical offices in Japan and while revenues continue to be generated in Japan through its flagship customer ITOYA it is serviced under a licensing agreement by 12 Hong Kong Ltd. Management believes that these changes will result in a profit for the Company, from operations in Japan beginning in the 4th quarter of 2019.

12 Europe, A.G.

12 Europe A.G. which was acquired in 2017 has underperformed against expectation. In the third quarter 2019 it was determined by management that the costs of continuing to support the expenses of an independent 12 Europe A.G., were unsupportable. Therefore, the Company reaffirmed its previous master representation agreement between 12 Hong Kong, LTD and Coppola, AG so that the software customers in Europe can continue to be supported and then closed its operations in Europe. On August 20, 2019, the Company had successfully discharged all of its debts associated with 12 Europe A.G., as part of the completion of the 12 Europe A.G., bankruptcy filing except for certain social benefit payments still owed approximately $35K by the Company. Therefore, this subsidiary is no longer in existence. Management does not consider this closure as a condition for discontinued operations as master representation agreement between 12 Europe is now been transferred to 12 Hong Kong and Coppola AG. As such, software customer in Europe will continue to be supported.

Bluwire Group, LLC.

On October 1, 2019, the Company acquired a retailer with 11 airport terminal locations and one casino location under an equity exchange agreement. Under the terms of the agreement the Company issued to the sellers 500,000 Series A Preferred Shares in exchange for 51% of the equity in Bluwire Group, LLC and its subsidiaries (“Bluwire”). The Sellers retained 30% of Bluwire and 19% is reserved for 12 months for potential equity investors into Bluwire. Any of this equity reserve not used to raise capital for Bluwire over that period would be divided equally between the Company and the Sellers. The Sellers will continue to manage Bluwire under consulting agreements. See filed 8K between the Company and Bluwire Group, LLC on October 16, 2019.

The Company is expected to consolidate this acquisition effective October 1, 2019, under ASC 805 purchase accounting. However, the accounting impact of this acquisition, including the purchase price and fair value of assets and liabilities acquired, is still being determined and will the result of an independent valuation and will be shown as part of the Company’s 2019 10-K.

The below table sets forth selected unaudited and unreviewed pro forma financial information for the Company for 2018 compared to 12 ReTech as if Bluwire Group, Redwire and Rune were owned for the nine months ended September 30, 2019 and 2018.

	Proforma
	Nine months ended
	September 30,
	2019			2018
Revenues	$	3,838,793		$	5,873,098
Cost of revenues		1,881,970			2,744,412
Gross profit		1,956,823			3,128,686
Operating expenses	$	3,969,923		$	2,958,089
Operating loss	$	(2,013,100	)	$	170,597
Net Loss	$	(15,777,457	)	$	(2,528,249	)
Earnings (Loss) Per Share	$	(0.99	)	$	(2.82	)

The unaudited proforma information set forth above is for informational purposes only. The proforma information should not be considered indicative of actual results that would have been achieved if the Bluwire Group, LLC acquisition had occurred on January 1, 2018. The unaudited supplemental pro forma financial information was calculated by combining the Company’s results with the stand-alone results of Bluwire Group, LLC. For the identified periods.

Note 4 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted ~~accounting~~ accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended September 30, ~~2019~~2020 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2019~~2020. Notes to the unaudited interim condensed consolidated financial statements that would substantially duplicate the disclosures contained in the audited ~~condensed~~ consolidated financial statements for fiscal year 2018 have been omitted. This report should be read in conjunction with the audited ~~condensed~~ consolidated financial statements and the footnotes thereto for the fiscal year ended December 31, ~~2018~~2019 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on ~~April~~June 1618, ~~2019~~2020.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries 12HK, 12JP, 12EU. 12 Retail, Rune NYC, LLC, Red Wire Group, LLC (“RWG”), Bluwire Group, LLC, Social Decay LLC dba Social Sunday (“Social Sunday”) and Emotion Fashion Group which included the brands Emotion Apparel, Inc., Lexi Luu Designs, Inc., Punkz Gear, Skipjack Dive and Dance Wear, Inc. and Cleo VII, Inc. ~~Since January 2019, the consolidation includes both Rune and RWG which were acquired in the first quarter 2019.~~ All inter-company accounts and transactions have been eliminated on consolidation. We currently have no investments accounted for using the equity or cost methods of accounting. ~~On October 1, 2019, Bluwire Group, LLC will be included in the consolidation.~~

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ~~requires~~ requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. ~~Actual~~Significant ~~results~~estimates ~~could~~and ~~differ~~assumptions ~~from~~reflected in these ~~good~~consolidated ~~faith~~financial statements include, but are not limited to, stock-based compensation, derivate instruments, accounting for preferred stock, and the valuation of acquired assets and liabilities. The Company bases its estimates on historical experience, known trends and ~~judgments~~other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

~~Software~~Cash ~~Development~~and ~~Costs~~Cash Equivalents

AtCash ~~September 30, 2019~~ and ~~December~~cash ~~31,~~equivalents ~~2018~~include ~~software~~cash ~~development~~in ~~costs~~banks, ~~totaled~~money $0market ~~and $371~~funds,~~118,~~ ~~respectively.~~and ~~Capitalized~~certificates ~~costs~~of ~~related to~~term ~~the~~deposits ~~software~~with ~~under~~maturities ~~development~~of ~~are~~less ~~treated~~than ~~as an asset until the development is completed and the software is available for~~three ~~licensure~~months ~~under~~from ~~a software-as-a-service (“SaaS”) arrangement. Periodically~~inception, ~~management~~which ~~reviews~~are ~~its~~readily ~~capitalized~~convertible ~~costs~~ to ~~determine~~known ifamounts ~~they are properly valued or should they be impaired. As~~ of ~~June~~cash ~~30,~~and ~~2019~~which, ~~management had capitalized approximately $513,601~~ in ~~development costs for its 12 Technology suite and 12 Sconti APP. While management still believes in~~ the ~~long-term validity~~opinion of ~~these software applications~~management, ~~the~~are ~~fact~~subject ~~remains~~to an ~~that~~insignificant ~~adoption~~risk byof ~~retailers~~loss ~~has~~in ~~not~~value. ~~met~~The ~~management’s~~Company ~~expectations. As~~had ~~a result~~$42,826 ~~management~~and ~~believed~~$118,860 ~~that~~in ~~the~~cash ~~capitalized~~and ~~costs~~cash ~~for~~equivalents ~~the software development should be fully impaired~~ as ofat ~~that date. As of~~ September 30, ~~2019,~~2020 ~~management~~and December ~~has~~31, ~~not since revised its opinion. Please see Management~~2019, ~~Discussion Analysis for further details in the resulting cutting of costs in 12 Europe and 12 Japan~~respectively.

~~Goodwill~~10

Goodwill represents the excess of the acquisition cost of businesses over the fair value of the identifiable net assets acquired.

The goodwill amount of $480,381 related to the acquisition of RWG and $394,440 related to the acquisition of Rune as of September 30, 2019. Goodwill is not amortized, but is tested annually for impairment, or if circumstances occur that more likely than not reduce the fair value of the reporting unit below its carrying amount. The Company has determined that there has been no impairment of goodwill at September 30, 2019. The Company performs its annual test during the fourth quarter.

Revenue Recognition

~~The~~Under Financial Accounting Standards Board (“FASB”) Topic 606, “Revenue from Contacts with Customers” (“ASC 606”), the Company recognizes revenue ~~from~~when the ~~sale~~customer obtains control of ~~products~~promised ~~and~~goods or services, in ~~accordance~~an ~~with~~amount that reflects the consideration which is expected to be received in exchange for those goods or services. The Company recognizes revenue following the five-step model prescribed under ASC 606,: ~~“Revenue~~(i) ~~from~~identify ~~Contracts~~contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) ~~Customers”.~~determine ~~Revenue~~the istransaction ~~recognized~~price; ~~when~~(iv) allocate the ~~earnings~~transaction ~~process~~price isto ~~complete~~the ~~typically~~performance ~~when~~obligation(s) ~~services~~in orthe ~~products~~contract; ~~are~~and ~~provided~~(v) recognize torevenues when (or as) the ~~customer~~Company satisfies a performance obligation.

The Company’s revenue consists primarily of product sales from our retail stores operating in airport terminals and casinos. Revenue for retail customers is recognized upon completion of the transaction in the point-of-sale system and satisfaction of the sale by providing the corresponding inventory at the retail location. Revenue is recognized upon transfer of control of promised products to customers, generally as risk of loss pass, in an amount that reflects the consideration the Company expects to receive in exchange for those products. Shipping and handling costs are expensed as incurred and are included in cost of revenue. Sales taxes collected from customers, which are subsequently remitted to governmental authorities, are excluded from revenue.

The Company earns ancillary revenue including royalty payments and software licensing fees.

Business Combinations

The Company accounts for all business combinations in accordance with FASB ASC 805, “Business Combinations” (“ASC 805”), using the acquisition method of accounting. Under this method, assets and liabilities, including any non-controlling interests, are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, may be made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period would be recorded as income. Results of operations of the acquired entity are included in the Company’s results from operations from the date of the acquisition onward and include amortization expense arising from acquired assets. The Company expenses all costs as incurred related to an acquisition in the consolidated statements of operations.

Accounts Receivable

The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. As of September 30, 2020 and December 31, 2019, the Company did not have an allowance for doubtful accounts.

Inventory

Inventories, consisting of a computer application, a mirror with a computer screen and touch monitor, are primarily accounted for using the first-in-first-out (“FIFO”) method and are valued at the lower of cost or market value. Inventories on hand are evaluated on an on-going basis to determine if any items are obsolete or in excess of future market needs. Items determined to be obsolete are reserved for. As of September 30, 2020 and December 31, 2019, all inventory on hand is pursuant to our Bluwire (see Note 4).

Goodwill

Goodwill represents the excess of the purchase price of an acquired entity over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed in a business combination.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets (property and equipment) for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the expected cash flows, undiscounted, is less than the carrying amount of the asset, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its fair value.

Goodwill is tested annually at December 31 for impairment and upon the occurrence of certain events or substantive changes in circumstances.

As of December 31, 2019, the Company performed its annual impairment test on all reporting units and determined that each unit had indicating factors of impairment due to failure to meet respective sales projections. As a result, the Company fully impaired the goodwill from each 2019 acquisition.

Convertible Debt and Convertible Preferred Stock

When the Company issues convertible debt or convertible preferred stock, it first evaluates the balance sheet classification of the convertible instrument in its entirety to determine whether the instrument should be classified as a liability under ASC 480, Distinguishing Liabilities from Equity, and second whether the conversion feature should be accounted for separately from the host instrument. A conversion feature of a convertible debt instrument or certain convertible preferred stock would be separated from the convertible instrument and classified as a derivative liability if the conversion feature, were it a standalone instrument, meets the definition of an “embedded derivative” in ASC 815, Derivatives and Hedging. Generally, characteristics that require derivative treatment include, among others, when the conversion feature is not indexed to the Company’s equity, as defined in ASC 815-40, or when it must be settled either in cash or by issuing stock that is readily convertible to cash. When a conversion feature meets the definition of an embedded derivative, it would be separated from the host instrument and classified as a derivative liability carried on the consolidated balance sheet at fair value, with any changes in its fair value recognized currently in the consolidated statements of operations.

If a conversion feature does not meet the conditions to be separated and accounted for as an embedded derivative liability, the Company then determines whether the conversion feature is “beneficial”. A conversion feature would be considered beneficial if the conversion feature is “in the money” when the host instrument is issued or, under certain circumstances, later. If convertible debt contains a beneficial conversion feature (“BCF”), the amount of the amount of the proceeds allocated to the BCF reduces the balance of the convertible debt, creating a discount which is amortized over the debt’s term to interest expense in the consolidated statements of operations.

When a convertible preferred stock contains a BCF, after allocating the proceeds to the BCF, the resulting discount is either amortized over the period beginning when the convertible preferred stock is issued up to the earliest date the conversion feature may be exercised, or if the convertible preferred stock is immediately exercisable, the discount is fully amortized at the date of issuance. The amortization is recorded similar to a dividend.

14Financial Instruments and Fair Value Measurements

~~Derivative~~The ~~Liabilities~~Company’s financial instruments consist primarily of cash, accounts receivable, inventory, prepaid expenses and ~~Fair~~other ~~Value~~current ~~Measurements~~assets, accounts payable and accrued liabilities, convertible notes payable and due to stockholders. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Observable inputs are based on market data obtained from sources independent of the Company. Unobservable inputs reflect our own assumptions based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs used to measure fair value into three broad levels, defined as follows:

Level 1	—	Inputs are quoted prices in active markets for identical assets or liabilities as of the reporting date.
Level 2	—	Inputs other than quoted prices included within Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated with observable market data.
Level 3	—	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. Unobservable inputs for the asset or liability that reflect management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability as of the reporting date.

Level 1

—

Inputs are quoted prices in active markets for identical assets or liabilities as of the reporting date.

~~The Company carries certain derivative financial instruments using inputs classified as “Level 3” in the fair value hierarchy on the Company’s consolidated balance sheets.~~12

The Company classified certain conversion features in the convertible notes issued during 2019 and 2018 as embedded derivative instruments due to down-round ratchet provisions and potential adjustments to conversion prices due to events of default and accordingly measures and carries the conversion features as derivative liabilities in the consolidated financial statements. Also, the Company determined that the certain notes should be measured and carried at fair value in the consolidated financial statements according to ASC 480, as they are settleable in a variable number of shares based on a fixed monetary amount known at inception. These fair value estimates were measured using inputs classified as “Level 3” of the fair value hierarchy. The Company develops unobservable “Level 3” inputs using the best information available in the circumstances, which might include its own data, or when it believes inputs based on external data better reflect the data that market participants would use, its bases its inputs on comparison with similar entities. Due to the existence of down round provisions, which create a path-dependent nature of the conversion prices of the convertible notes, the Company decided a Black Scholes Simulation model, which incorporates inputs classified as “Level 3” was appropriate.

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

Level 3	—	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. Unobservable inputs for the asset or liability that reflect management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability as of the reporting date.

The ~~conversion~~Company ~~feature~~carries ~~was~~certain ~~recognized~~derivative asfinancial aninstruments ~~embedded~~using ~~derivative~~inputs ~~and~~classified ~~was~~as ~~valued~~Level ~~using~~3 ain ~~Black~~the ~~Scholes~~fair ~~model~~value ~~that~~hierarchy ~~resulted~~on inthe ~~a derivative~~Company’s ~~liability~~consolidated ofbalance ~~$14,494,342~~sheets. ~~and~~Refer ~~$2,696,470~~to atNote ~~September~~11 ~~30,~~for ~~2019~~detail ~~and~~on ~~December~~the ~~31,~~derivative ~~2018, respectively~~liability.

	September 30, 2019
Risk-free interest rates		1.74 – 2.63	%
Expected life (years)		0.05 – 1.00 years
Expected dividends		0	%
Expected volatility		226 – 736	%

Further, the Company determined that the certain notes should be measured and carried at fair value in the consolidated financial statements according to ASC 480, as they are settleable in a variable number of shares based on a fixed monetary amount known at inception.

Net Loss per Share

The Company follows ASC 260, “Earnings per Share” (“EPS”), which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements, basic earnings (loss) per share are computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. On October 18, 2019, the Company successfully completed its reverse stock split and reduced its common stock outstanding by a ratio of one hundred for one. Per ASC 505-10, if a reverse split occurs after the date of the latest reported balance sheet but before the release of the financial statements, then such changes in the capital structure must be given retroactive effect in the balance sheet. As such, the reverse split has been retroactively applied to these financial statements.

Diluted earnings per share reflects the potential dilution that could occur if securities were exercised or converted into common stock or other contracts to issue common stock resulting in the issuance of common stock that would then share in the Company’s earnings subject to anti-dilution limitations. In a period in which the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have an anti-dilutive impact. For the three months ended September 30, 2020, potentially dilutive common shares consist of common stock issuable upon the conversion of convertible notes payable, Series A Preferred Stock, Series B Preferred Stock, Series D-2 Preferred Stock, Series D-3 Preferred Stock, Series D-5 Preferred Stock and Series D-6 Preferred Stock (using the if converted method). For the three months ended September 30, 2020, potentially dilutive common shares consist of common stock issuable upon the conversion of convertible notes payable, Series A Preferred Stock, Series B Preferred Stock, Series D-2 Preferred Stock and Series D-3 Preferred Stock (using the if converted method).

All potentially dilutive securities were excluded from the computation of diluted weighted average number of shares of common stock outstanding as they would have had an anti-dilutive impact. At September 30, 2020, if all dilutive securities were converted the Company would be in excess of their authorized shares of common stock.

Contingencies

The Company follows ASC 450-20, “Loss Contingencies” to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no loss contingencies as of September 30, 2020 and December 31, 2019.

Management has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

NOTE 4 – ACQUISITIONS

Acquisitions

Red Wire Group, LLC

On February 19, 2019, the Company completed the acquisition of Red Wire Group, LLC. (“RWG”) a Utah limited liability company, pursuant to a share exchange agreement whereby the Company exchanged shares of the Company’s Series D-5 and Series D-6 Preferred Stock for 100% of the outstanding equity of RWG. Pursuant to the terms of the exchange agreement, the Company acquired (i) 75% of the membership interests of RWG in exchange for 54,000 shares of the Company’s Series D-6 Preferred Stock (stated value of $5.00 per share), and (ii) the remaining 25% of the membership interests of RWG in exchange for 37,500 shares of the Company’s Series D-5 Preferred Stock (stated value of $4.00 per share). The total purchase consideration for the RWG acquisition was $450,000, including the fair value of D-5 and D-6 Preferred Stock of $420,000 and $30,000 in cash. RWG’s results of operations have been included in the Company’s operating results for the period from February 1, 2019.

The RWG acquisition was accounted for as a business combination in accordance with ASC 805. The Company has determined preliminary fair values of the assets acquired and liabilities assumed. These values are subject to change as we perform additional reviews of our assumptions utilized. For more information, please see filed 2019 10K.

March 16, 2020, as part of the Company’s streamlining operations and partially because of COVID-19, the Company filed a Chapter 11 Reorganization of Red Wire Group, LLC. The Company’s 12 Fashion Group continues to service Red Wire Group customers under the trade name Red Wire Design. The bankruptcy was discharged on or about September 2020 and all debts were extinguished. 12 Fashion Group continues to service those customers acquired as well as obtaining new accounts by marketing under the d/b/a Red Wire Designs.

Rune NYC, LLC

Effective March 14, 2019, the Company completed the acquisition of Rune NYC, LLC (“Rune”), a New York limited liability company, pursuant to a share exchange agreement whereby the Company exchanged shares of the Company’s Series D-5 Preferred Stock for 92.5% of the total outstanding equity of Rune and the members of Rune (the “Members”). The Company issued an aggregate of 82,588 shares of Series D-5 Preferred Stock with a stated value of $4.00 per share, and cash consideration of $49,937, for total purchase consideration of $380,289. Rune’s results of operations have been included in the Company’s operating results for the period from March 1, 2019. For more information, please see 2019 10K.

Bluwire Group, LLC

On October 1, 2019, the Company completed the acquisition of Bluwire Group, LLC (“Bluwire”), a Florida limited liability company, pursuant to a share exchange agreement whereby the Company exchanged shares of the Company’s Series A Preferred Stock for 60.5% of the outstanding equity of Bluwire. Pursuant to the terms of the exchange agreement, at closing the Company acquired 60.5% of the membership interests of Bluwire in exchange for 500,000 shares of the Company’s Series A Preferred Stock. The total purchase consideration for the Bluwire acquisition was $200,000, the fair value of the Series A Preferred Stock issued. Bluwire’s results of operations have been included in the Company’s operating results for the period from October 1, 2019. For more information, please see company’s 2019 10K.

Social Decay, LLC dba Social Sunday

On November 20, 2019, the Company completed the acquisition of Social Decay, LLC dba Social Sunday (“Social Sunday”), a New Jersey limited liability company, pursuant to a share exchange agreement whereby the Company exchanged shares of the Company’s Series D-6 Preferred Stock for 100% of the total outstanding equity of Social Sunday and the member of Social Sunday (the “Member”). The Company issued an aggregate of 30,000 shares of Series D-6 Preferred Stock with a stated value of $5.00 per share, and an additional 12,000 shares were issued and held in escrow, for total purchase consideration of $210,000. Social Sunday’s results of operations have been included in the Company’s operating results for the period from November 1, 2019. See company 2019 filed 10K.

All acquisitions were accounted for as a business combination in accordance with ASC 805. The Company has determined preliminary fair values of the assets acquired, liabilities assumed and fair value of the minority interest. These values are subject to change as we perform additional reviews of our assumptions utilized.

InNOTE ~~connection~~5 ~~with~~– ~~convertible~~FIXED ~~notes payable~~ASSETS, the Company records derivative liabilities for the conversion feature. During the year ended December 31, 2018, the Company recorded initial derivative liabilities of $3,229,344. Upon initial valuation, the derivative liability exceeded the face value certain of the convertible note payables by approximately $1,637,572, which was recorded as a day one loss on derivative liability. On December 31, 2018, the derivative liabilities were revalued at $2,696,470 resulting in a loss of $760,508 related to the change in fair market value of the derivative liabilities during the year ended December 31, 2018. In connection with convertible notes, as disclosed in Note 8, the Company reclassified derivative liabilities with a fair value of $1,418,516 to additional paid-in capital during year ended December 31, 2018. The Company revalued the derivative liabilities at each conversion date recording the pro-rata portion of the derivative liability as compared to the portion of the convertible note converted to the pre-conversion carrying value to additional paid-in capital.NET

~~During~~Fixed ~~the~~assets ~~nine~~at ~~months ended~~ September 30, ~~2019,~~2020 ~~the Company recorded additional derivative liabilities of $1,150,152 related to convertible notes payable~~ and ~~$2,717,043~~December ~~for various series of preferred stock. The Company also recorded $4~~31,~~555,575~~ of additional derivative liability for the default reserve related to the potential additional liability for the default on convertible notes and certain Series D Preferred Stock. See further details convertible notes below and management discussion analysis section. On September 30, 2019, ~~the~~consisted ~~derivative liabilities were revalued at $14,494,342 resulting in a loss~~ of ~~$4,169,269 related to~~ the ~~change~~ ~~in fair market value of the derivative liabilities during the nine months ended September 30, 2019.~~following:

	For the Nine Months Ended September 30, 2019
	September 30,			December 31,
Balance – December 31, 2018	$	2,696,470
	2020			2019
Issuance of new derivative liabilities		8,422,770
Office equipment	$	280,965		$	281,365
Conversions to paid-in capital		(794,167	)
Furniture and equipment		58,118			58,118
Change in fair market value of derivative liabilities		4,169,269
Computer		13,704			13,704
Balance – September 30, 2019	$	14,494,342
Technical equipment		27,492			27,492
Truck		-			-
Intellectual Property		78,506			78,506
Machinery					-
		458,785			458,785
Less: accumulated depreciation		(259,931	)		(110,388	)
Equipment	$	198,853		$	348,396

~~Management views~~Depreciation ~~these~~expense ~~convertible~~for ~~notes, due to their conversion feature to be viewed as equity, and~~ the ~~expenses~~three ~~associated~~months ~~through~~ended ~~derivative~~September ~~calculations~~30, to2020 beand ~~estimates~~2019 ~~that~~was ~~are~~$69,256 ~~only~~(depreciation ~~finalized~~and ~~once~~amortization) ~~the~~and ~~actual conversion has been consummated. For the balance outstanding~~$4, ~~please~~973, ~~see Note 8~~respectively.

Commitments and Contingencies

The Series B Redeemable Convertible Preferred Stock is classified as temporary equity, as it is mandatorily redeemable by the holder at a future date. The Series D-2 Preferred Stock is classified as temporary equity due to the fact that it is redeemable immediately. The Series D-3 Preferred Stock is also classified as temporary equity due to the existence of the PUT. Under the terms of the acquisition of the Red Wire Group, certain members received Series D-5 with a PUT option with a face value of $150,000. If those members so elect, to not convert those shares to common stock, they have the right to PUT those shares to the Company for cash. This would be an additional cash constraint on the company. For additional detail, See Note 3 Acquisitions.

~~Earnings~~NOTE ~~(Loss)~~6 ~~per~~– ~~Share~~ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

~~The~~Accounts ~~Company~~payable ~~follows~~and ~~ASC~~accrued ~~260,~~liabilities ~~“Earnings~~at ~~per~~September ~~Share” (“EPS”)~~30, ~~which~~2020 ~~requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures~~ and ~~requires~~December ~~a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements~~31, ~~basic earnings (loss) per share are computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. As a subsequent event, on October 18,~~ 2019, ~~the~~consisted ~~Company successfully completed its reverse stock split and reduced its common stock outstanding by a ratio~~ of ~~one hundred for one. Per ASC 505-10, if a reverse split occurs after~~ the date of the latest reported balance sheet but before the release of the financial statements, then such changes in the capital structure must be given retroactive effect in the balance sheet. As such, the reverse split has been retroactively applied to these financial statements. following:

Diluted earnings per share reflects the potential dilution that could occur if securities were exercised or converted into common stock or other contracts to issue common stock resulting in the issuance of common stock that would then share in the Company’s earnings subject to anti-dilution limitations. In a period in which the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have an anti-dilutive impact. For the nine months ended September 30, 2019, potentially dilutive common shares consist of common stock issuable upon the conversion of convertible notes payable, Series A Preferred Stock, Series B Preferred Stock, Series D-2 Preferred Stock, Series D-3 Preferred Stock, Series D-5 Preferred Stock and Series D-6 Preferred Stock (using the if converted method). All potentially dilutive securities were excluded from the computation of diluted weighted average number of shares of common stock outstanding as they would have had an anti-dilutive impact. If all dilutive securities were converted the Company would be in excess of their authorized shares of common stock.

	September 30,		December 31,
	2020		2019

Accounts payable	$	1,291,311	$	1,249,740
Accrued expenses		1,037,068		548,920
Accrued Salaries		139,300		111,000
Accrued board of director fees		120,000		30,000
Accrued interest		272,026		191,836
	$	2,859,705	$	2,167,496

~~Financial~~NOTE ~~Instruments~~7 - DUE TO STOCKHOLDERS

~~The~~Due ~~Company’s~~to ~~financial~~stockholders ~~instruments~~at ~~consist~~September ~~primarily of cash and cash equivalents~~30, ~~accounts~~2020 ~~receivable, prepaid expenses~~ and ~~other~~ ~~current~~December ~~assets~~31, ~~accounts~~2019 ~~payable~~consists ~~and accrued liabilities, due to stockholders and notes payable. The carrying amounts~~ of ~~such~~ ~~financial instruments approximate their respective estimated fair value due to~~ the ~~short-term maturities and approximate market interest rates of these instruments.~~following:

Recent Accounting Pronouncements

	September 30,		December 31,
	2020		2019
Daniel Monteverde		402		1,388
Angelo Ponzetta		10,918		10,167
Christoper Burden		172,536		172,536
Maurice Ojeda		200,000		200,000

	$	383,856	$	384,091

~~Management~~During ~~has~~the ~~considered~~three ~~all~~months ~~recent~~ended ~~accounting~~September ~~pronouncements~~30, ~~issued.~~2020 ~~The~~and 2019, in connection with the Bluwire acquisition, the Company assumed liabilities to Bluwire’s members, ~~management~~Christopher ~~believes~~Burden ~~that~~and ~~these~~Maurice ~~recent~~Ojeda, ~~pronouncements will~~totaling ~~not~~$372,536. ~~have~~The aamounts ~~material~~do ~~effect~~not onincur ~~the~~interest ~~Company’s~~and are ~~financial~~due ~~statements~~on demand.

As of September 30, 2020 and December 31, 2019, accounts payable and accrued liabilities included salaries of $139,300 and $111,000, respectively, and accrued board of director fees of $120,000 and $30,000, respectively.

NOTE 8 – NOTES RELATED PARTY PAYABLE

As of September 30, 2020 and December 31, 2019, there were two demand notes outstanding totaling $31,000.

~~Note~~NOTE 59 – ~~Fixed~~CONVERTIBLE ~~Assets~~NOTES PAYABLE

~~Fixed~~Convertible ~~assets~~notes payable at September 30, ~~2019~~2020 and December 31, ~~2018~~2019 ~~consisted~~consists of the following:

	September 30, 2019			December 31, 2018
	September 30,			December 31,
Office equipment	$	90,798		$	32,107
	2020			2019
Furniture and equipment		607			607
Dated September 15, 2017	$	318,492		$	337,653
Computer		13,704			13,704
Dated December 8, 2017
Technical equipment		27,492			27,492
Dated December 8, 2017		-			-
Intellectual Property		74,982			65.487
Dated April 25, 2018		40,123			40,123
Subtotal Fixed Assets	$	207,583		$	139,397
Dated September 21, 2018		56,714			56,714
Less: accumulated depreciation		(51,127	)		(41,102	)
Dated October 18, 2018		60,000			60,000
Fixed Assets	$	156,456		$	98,295
Dated November 28, 2018		33			25,443
Dated November 28, 2018		30,600			57,870
Dated November 29, 2018		25,000			25,000
Dated December 13, 2018		105,000			105,000
Dated January 15, 2019		115,000			115,000
Dated February 7, 2019		111,276			132,720
Dated February 19, 2019		64,500			64,500
Dated February 19, 2019		55,125			55,125
Dated March 13, 2019		55,125			55,125
Dated May 14, 2019		26,500			26,500
Dated May 17, 2019		27,825			27,825
Dated August 1, 2019		56,194			56,194
Dated August 7, 2019		55,125			55,125
Dated October 3, 2019		5,350			5,350
Dated October 25, 2019		6,825			6,825
Dated March 19, 2020		33,600
Dated March 25, 2020		33,600
Total convertible notes payable		1,282,007			1,308,092
Less: Unamortized debt discount		(7,099	)		-
Total convertible notes		1,274,907			1,308,092
Less: current portion of convertible notes		1,274,907			1,308,092
Long-term convertible notes	$	0		$	(0	)

~~Depreciation~~On March ~~expense~~18, ~~for~~2020 the ~~nine~~Company ~~months~~entered ~~ended September~~into 30a promissory note agreement with Adar Alef, ~~2019~~LLC ~~and~~(“Adar”) ~~2018~~for ~~was~~loans totaling $33,600. The consideration to the Company is $1630,~~095~~000 ~~and~~with $53,~~085,~~600 ~~respectively~~legal fees and OID. The note is convertible after 181 days at a (i) $0.0075 ceiling or (ii) 60% of the lowest trading price over the past twenty trading days prior to the conversion date.

~~Note~~On 6March –25, ~~Accounts~~2020 ~~Payable~~the ~~and~~Company ~~Accrued~~entered ~~Liabilities~~into a promissory note agreement with LG Capital Funding, LLC (“LG”) for loans totaling $33,600. The note is convertible after 181 days at a (i) $0.0075 ceiling or (ii) 60% of the lowest trading price over the past twenty trading days prior to the conversion date.

~~Accounts~~During ~~payable~~the ~~and~~three ~~accrued~~months ~~liabilities~~ended at September 30, 2020 and 2019, the Company recognized interest expense of $98,752 and $352,330, respectively, which represented the amortization of original issue discounts and debt discounts. As of December 31, ~~2018~~2019, ~~consisted~~all original issue and debt discounts pertaining to outstanding convertible notes were fully amortized. As of September 30, 2020, the ~~following:~~unamortized debt discount of $7,099 are related to the new convertible notes issued during the first quarter of 2020.

	September 30, 2019		December 31, 2018
Accounts payable	$	308,230	$	379,448
Accrued expenses		452,838		495,785
Accrued salaries		6,753		206,031
Accrued board of director fees		-		74,295
Accrued interest		156,631		79,153
	$	924,452	$	1,234,712

During the three months and nine months ended September 30, 2020, the Company converted principal and unpaid accrued interest totaling $6,218 and $93,285 into an aggregate of 69,089,148 and 553,2315,698 shares of common stock.

~~During~~The ~~the~~Company ~~three~~has ~~months~~twenty-one ~~ended~~(21) outstanding convertible notes as of September 30, ~~2019,~~2020 ~~some~~with ~~accounts~~a ~~payable~~total ~~and~~outstanding ~~accrued~~principal ~~expenses~~of ~~were~~$1,274,907. The ~~exchanged~~2019 ~~for~~notes ~~Series~~mature Afrom ~~Preferred~~January ~~shares~~2020 to May 2020. The ~~majority~~2020 ofnotes ~~which~~mature ~~represented~~in ~~professional~~September ~~consulting~~2020. ~~fees~~These ofnotes ~~approximately~~carry ~~$161,221~~an ~~and~~interest ~~board~~rate ofranging between ~~director~~8% ~~fees~~and of12% ~~approximately $264,616~~per annum. ~~See~~The ~~Note~~notes carry an original issue discounts ranging between 10% ~~Series~~to A25% ~~Preferred~~of ~~Stock~~the ~~for~~face ~~further~~value ~~details~~of each note.

In addition, as detailed in Note 3, on September 30, 2019 the Company effectively foreclosed on its liens taking possession of the assets including the brands; Lexi-Luu, Emotion Apparel, Inc., Punkz Gear and retuned the stock in Emotion Apparel, Inc. and its subsidiaries to the Seller. As a result, the related accounts payable and accrued expenses which were payable by Emotion Apparel, Inc. which totaled $511,486 including $250,000 Note Payable, were offset to other income. For further details See Note 9 Notes Payable for further details.

Also 12 Europe, on August 20, 2019, the Company had successfully discharged all of its debts associated with 12 Europe A.G., as part of the completion of the 12 Europe A.G., bankruptcy filing except for certain social benefit payments still owed by the Company. As a result of filing for bankruptcy, all the companies have been discharged and are no longer owed by the Company with the exception of approximately $35K in social benefits liabilities. As such the total discharged accounts payable totaled $445,244 and were offset to other income.

Lastly, after careful review by management, certain invoices posted to accounts payable were deemed to not be owed by the Company. These payables totaled approximately $68K were offset to other income.

See further discussion as part of the Management Discussion and Analysis below.

~~Note~~The 7notes –may ~~Due~~be converted into shares of the Company’s common stock at any time on or after the occurrence of an event of default. The conversion prices of the notes include the conversion price shall be the 60% multiplied by the lowest trading price during the 30 trading days period ending, in holder’s sole discretion on each conversion, on either (i) the last complete trading day prior to the ~~Stockholders~~conversion date or (ii) the conversion date.

~~Amounts~~For ~~due~~some notes, the Company agreed to ~~stockholders~~pay ~~(related~~a ~~party)~~one-time interest charge of 9% of the principal amount for each note. The notes may be converted at ~~September~~specified ~~30,~~times ~~2019~~per ~~and~~the ~~December~~respective ~~31,~~agreements. ~~2018~~The ~~consist~~conversion ofprice shall be 75% multiplied by the ~~following:~~lowest trading price during the 10 prior trading days period ending on either (i) the last complete trading day prior to conversion date or (ii) the conversion date.

	September 30, 2019		December 31, 2018
Daniel Monteverde	$	1,388	$	143,195
Angelo Ponzetta		119,354		623,201
	$	120,742	$	766,397

All terms of the notes, including but not limited to interest rate, prepayment terms, conversion discount or look-back period will be adjusted downward if the Company offers more favorable terms to another party, while this note is in effect.

OnThe ~~August~~notes ~~12,~~may ~~2017,~~be ~~Gianni~~redeemed ~~Ponzetta~~by ~~loaned~~the ~~CHF~~Company ~~60,000.~~at ~~The~~rates ~~promissory~~ranging ~~note~~from ~~was unsecured, bore an interest at 1~~105% ~~per annum and is due December 31, 2019. In September 2018, Gianni Ponzetta converted this note and all the due~~ to ~~Gianni~~130% ~~Ponzetta~~depending ~~payables~~on ~~to Preferred D-3 shares. See Preferred D-3 shares in Note 10 below. During~~ the 12redemption ~~months~~date ~~ended~~provided ~~December~~that ~~31,~~no ~~2018 total advances and expenses~~redemption ~~paid~~is ~~directly~~allowed byafter ~~stockholders on behalf of~~ the ~~Company~~180th ~~$107,326 and $36,931~~day.

~~During~~The ~~the~~following ~~nine~~table ~~months~~is ~~ended~~a ~~September~~rollforward ~~30,~~of ~~2019~~activity, ~~the~~by ~~Company~~each ~~exchanged~~noteholder, ~~most~~for ~~its~~the ~~accounts~~three ~~payables~~months ~~due~~ended toSeptember ~~Daniele Monteverde and Angelo Ponzetta of approximately $723~~30,~~253~~ ~~into Series A Preferred shares. See Note 10 Series A Preferred Stock for further details.~~2020:

Note 8 – Convertible Notes Payable

	Loan Holder		Principal Amount		Date		Maturity		OID & Financing Costs		Balance at 12 31 17		Additions		Payments			Conversion			Balance at 12 31 18		Additions		Payments			Conversion			Balance at 12 31 19		Additions		Payments		Conversion			Balance at 9 30 20

1		SBI Investment	$	200,000		9/27/2017		3/15/2018				200,000		75,000		(25,000	)		(93,150	)		156,850		-		-			(6,697	)		150,153					$	(19,160.78	)		130,992
1		SBI Investment	$	187,500		11/14/2017		5/14/2018				187,500		-		-			-			187,500		-		-			-			187,500									187,500
2		LG Caputal Funding, LLC	$	185,292		12/8/2017		6/8/2018		17,646		92,646		92,646		-			(133,032	)		52,260		-		-			(52,260	)		0									0
3		Cerberus Finance Group Ltd	$	185,292		12/12/2017		6/8/2018		17,646		92,646		92,646		(25,000	)		(53,183	)		107,109		-		(99,684	)		(7,425	)		-									-
4		Eagle Equities LLC	$	50,000		3/15/2018		3/15/2019		2,500		-		50,000		-			(50,000	)		-		-		-			-			-									-
5		Adar Capital LLC	$	50,000		3/15/2018		3/15/2019		2,500		-		50,000		-			(50,000	)		-		-		-			-			-									-
6		Bellridge Capital LP	$	60,000		5/17/2018		5/17/2019		10,000		-		60,000		-			(44,000	)		16,000		-		-			(16,000	)		-									-
7		Auctus	$	100,000		4/27/2018		4/25/2019		10,000		-		100,000		-			(59,877	)		40,123		-		-			-			40,123									40,123
8		Bellridge Capital LP	$	60,000		9/17/2018		3/15/2019		10,000		-		60,000		-			-			60,000		-		-			(3,286	)		56,714									56,714
9		Eagles Equity	$	50,000		9/21/2018		3/15/2019		2,500		-		50,000		-			(50,000	)		-		-		-			-			-									-
10		Adar Bay	$	50,000		10/4/2018		10/4/2018		2,500		-		50,000		-			(50,000	)		-		-		-			-			-									-
11		Bellridge Capital LP	$	60,000		10/18/2018		10/18/2019		10,000		-		60,000		-			-			60,000		-		-			-			60,000									60,000
12		Adar Alef Omnibus	$	64,500		11/28/2018		11/29/2019		4,125		-		64,500		-			-			64,500		-		-			(39,057	)		25,443					$	(25,410.13	)		33
13		Adar Alef Debt Purchase	$	25,000		11/28/2018		11/29/2019				-		25,000		-			(25,000	)		-		-		-			-			-									-
14		LG Capital Omnibus	$	64,500		11/28/2018		11/29/2019		4,125		-		64,500		-			-			64,500		-		-			(6,630	)		57,870					$	(27,270.00	)		30,600
15		LG Capital Debt Purchase	$	25,000		11/29/2018		11/29/2018				-		25,000		-			-			25,000		-		-			-			25,000									25,000
16		LG Capital Omnibus	$	105,000		12/13/2018		12/14/2019		5,000		-		105,000		-			-			105,000		-		-			-			105,000									105,000
17		LG Capital Omnibus	$	115,000		1/15/2019		1/15/2020		5,750		-		-		-			-					115,000		-			-			115,000									115,000
18		Adar Alef Omnibus	$	132,720		2/7/2019		2/7/2020		6,000		-		-		-			-					132,720		-			-			132,720					$	(21,444.27	)		111,276
19		Adar Alef Debt Note	$	108,055		2/7/2019		2/7/2019		8,371		-		-		-			-					108,055		-			(108,056	)		-									-
20		Adar Alef Omnibus	$	64,500		2/19/2019		2/19/2020		4,125		-		-		-			-					64,500		-			-			64,500									64,500
21		LG Capital Omnibus	$	55,125		2/19/2019		2/19/2020		2,500		-		-		-			-					55,125		-			-			55,125									55,125
22		LG Capital Omnibus	$	55,125		3/13/2019		3/13/2020		2,500		-		-		-			-					55,125		-			-			55,125									55,125
23		Adar Alef Omnibus #2 Back End	$	26,500		5/14/2019		2/20/2020		1,500		-		-		-			-					26,500		-			-			26,500									26,500
24		LG Capital Omnibus #5	$	27,825		5/17/2019		5/15/2020		2,825		-		-		-			-					27,825		-			-			27,825									27,825
25		Adar Alef Omnibus #2 BE 3rd Tranche	$	56,194		8/1/2019		2/7/2020		50,000		-		-		-			-					56,194		-			-			56,194									56,194
26		LG Capital Omnibus #7	$	55,125		8/6/2019		2/7/2020		50,000		-		-		-			-					55,125		-			-			55,125									55,125
27		Adar Alef Omnibus #2 BE 4th Tranche	$	5,350		10/3/2019		2/7/2020		5,000		-		-		-			-					5,350		-			-			5,350									5,350
28		LG Capital Omnibus #8	$	6,825		10/25/2019		10/26/2020		5,000		-		-		-			-					6,825		-			-			6,825									6,825
29		Adar Alef Omnibus # 5th Tranche	$	33,600		3/19/2020		9/19/2020		3,600																							$	33,600							33,600
30		LG Caputal Funding, LLC	$	33,600		3/25/2020		9/20/2020		3,600																							$	33,600							33,600

Convertible note total										214,021		572,792		1,024,292		(50,000)			(608,242)			938,842		708,344		(99,684)			(239,411)			1,308,092		67,200		-		(93,285)			1,282,007

~~Convertible~~As ~~notes~~of ~~payable~~December at31, ~~September~~2019, 30several notes were past maturity, ~~2019~~in default and ~~December~~due 31on demand. As such, ~~2018~~the ~~consists~~Company accelerated the amortization of the ~~following:~~remaining unamortized original issue and debt discounts. As of September 30, 2020 the notes remained in default and due on demand.

	September 30, 2019			December 31, 2018
September 15, 2017	$	337,653		$	344,262
December 8, 2017		-			52,260
December 12, 2017		-			107,109
March 15, 2018		40,123			40,123
April 27, 2018		-			16,000
May 17, 2018		56,714			60,000
September 17, 2018		60,000			60,000
September 21, 2018		30,285			64,500
November 28, 2018		64,500			64,500
November 28, 2018		25,000			25,000
December 13, 2018		105,000			105,000
January 15, 2019		115,000			-
February 7, 2019		132,720			-
February 19, 2019		64,500			-
February 19, 2019		55,125			-
March 13, 2019		55,125			-
May 14, 2019		26,500			-
May 17, 2019		27,825			-
August 1, 2019		53,500			-
August 7, 2019		55,125			-
Total	$	1,304,695		$	938,754
Less: unamortized debt discount		(298,682	)		(313,909	)
Total convertible notes	$	1,006,013		$	624,845

The Company calculated a default reserve which represents the additional amount the Company would have to pay to all note holders in the event of the default. Management calculated the amount utilizing additional premiums, accrued interest and default accrued interest as per the agreements. As of September 30, 2020 and December 31, 2019, the Company recorded a general default reserve of $2,140,995 and $1,769,791, respectively.

~~For~~NOTE the nine months ended September 30, 2019, the Company recognized interest expense of $674,210, all of which represented the amortization of original issue discounts, debt discounts and beneficial conversion features. For the nine months ended September 30, 2019, the Company reduced the principal by $339,371 principal through conversion through the issuance of 10~~,904,612 shares~~ of– ~~common~~DERIVATIVE stock. The issue discounts and debt discounts are being amortized over the life of the convertible notes using straight line amortization due to the short-term nature of the note. Remaining issue discounts and debt discounts of $298,682 will be fully amortized by May 2020.LIABILITIES

The Company classified certain conversion features in the convertible notes and preferred stock issued as embedded derivative instruments due to the variable conversion price feature and potential adjustments to conversion prices due to events of default. These conversion features are recorded as derivative liabilities at fair value in the consolidated financial statements. These fair value estimates were measured using inputs classified as Level 3 of the fair value hierarchy. The Company develops unobservable Level 3 inputs using the best information available in the circumstances, which might include its own data, or when it believes inputs based on external data better reflect the data that market participants would use, its bases its inputs on comparison with similar entities. Due to the existence of down round provisions, which create a path-dependent nature of the conversion prices of the convertible notes, the Company decided a Lattice-Based Simulation model, which incorporates inputs classified as Level 3 was appropriate.

The ~~Company~~following ~~has~~table ~~twenty~~present ~~four (24) outstanding convertible notes as of September 30, 2019, with a total outstanding balance of $1,006,013. All~~ the ~~notes~~assumptions ~~have~~used ~~matured~~in ~~that~~Black-Scholes ~~were~~Simulation ~~entered~~model ~~into prior~~ to ~~2019.~~determine ~~The~~the ~~2019~~fair ~~notes~~value ~~mature from January 2020 to March 2020. These notes carry an interest rate ranging between 8% and 12% per annum. The notes carry an original issue discounts ranging between 10% to 25%~~ of the ~~face~~derivative ~~value~~liabilities as of ~~each~~September ~~note.~~30, 2020:

~~The~~For ~~notes may be converted into shares of~~ the ~~Company’s~~three ~~common~~months ~~stock~~ended atSeptember ~~any time on or after the occurrence of an event of default. The conversion price shall be the 60% multiplied by the lowest trading price during the~~ 30 ~~trading days period ending~~, in holder’s sole discretion on each conversion, on either (i) the last complete trading day prior to the conversion date or (ii) the conversion date. All terms of the note, including but not limited to interest rate, prepayment terms, conversion discount or look-back period will be adjusted downward if the Company offers more favorable terms to another party, while this note is in effect.2020:

For some notes, the Company agreed to pay a one-time interest charge of 9% of the principal amount for each note. The notes may be converted at any time after the maturity date. The conversion price shall be 75% multiplied by the lowest trading price during the 10 prior trading days period ending on either (i) the last complete trading day prior to conversion date or (ii) the conversion date. All terms of the note, including but not limited to interest rate, prepayment terms, conversion discount or look-back period will be adjusted downward if the Company offers more favorable terms to another party, while this note is in effect.

Derivative Liabilities at June 30, 2020	$	14,101,095
Additional new conversion option derivatives	$	-
Conversion of note derivatives	$	(21,631	)
Change in fair value	$	(6,688,600	)
Derivative Liabilities at September 30, 2020		7,390,864

~~The~~For ~~note may be redeemed by~~ the ~~Company~~nine atmonths ~~rates~~ended ~~ranging~~September ~~from 105% to 130% depending on the redemption date provided that no redemption is allowed after the 180th day. All terms of the note~~30, including but not limited to interest rate, prepayment terms, conversion discount or look-back period will be adjusted downward in the Company offers more favorable terms to another party, while this note is in effect. As additional consideration, the Company is to issue to Adar Bays Capital shares of common stock with a value equal to 25% of each note, determine at the time of signing of each note.2020:

See summary of outstanding notes payable by debt holder with related change in derivative liability and amortization of debt discount for the period ended September 30, 2019.

Derivative Liabilities at December 31, 2019	$	5,359,442
Additional new conversion option derivatives	$	7,272
Conversion of note derivatives	$	(298,929	)
Change in fair value	$	2,323,080
Derivative Liabilities at September 30, 2020		7,390,863

	Loan Holder	Principal Amount		Date		Maturity		Balance at 12 31 18		Additions		Payments			Conversion			Balance at 9 30 19
1	SBI Investment	$	200,000		9/27/2017		3/15/2018		156,850		-		-			(6,697	)		150,153
1	SBI Investment	$	187,500		11/14/2017		5/14/2018		187,500		-		-			-			187,500
2	LG Capital Funding, LLC	$	185,292		12/8/2017		6/8/2018		52,260		-		-			(52,260	)		-
3	Cerberus Finance Group Ltd	$	185,292		12/12/2017		6/8/2018		107,109		-		(99,684	)		(7,425	)		-
6	Bellridge Capital LP	$	60,000		5/17/2018		5/17/2019		16,000		-		-			(16,000	)		-
7	Auctus	$	100,000		4/27/2018		4/25/2019		40,123		-		-			-			40,123
8	Bellridge Capital LP	$	60,000		9/17/2018		3/15/2019		60,000		-		-			(3,286	)		56,714
9	Bellridge Capital LP	$	60,000		10/18/2018		10/18/2019		60,000		-		-			-			60,000
10	Adar Alef Omnibus	$	64,500		11/28/2018		11/29/2019		64,500		-		-			(34,215	)		30,285
11	Adar Alef Debt Purchase	$	25,000		11/28/2018		11/29/2019		-		-		-			-			-
12	LG Capital Omnibus	$	64,500		11/28/2018		11/29/2019		64,500		-		-			-			64,500
13	LG Capital Debt Purchase	$	25,000		11/29/2018		11/29/2018		25,000		-		-			-			25,000
14	LG Capital Omnibus	$	105,000		12/13/2018		12/14/2019		105,000		-		-			-			105,000
15	LG Capital Omnibus	$	115,000		1/15/2019		1/15/2020		-		115,000		-			-			115,000
16	Adar Alef Omnibus	$	132,720		2/7/2019		2/7/2020		-		132,720		-			-			132,720
17	Adar Alef Debt Note	$	108,055		2/7/2019		2/7/2019		-		108,055		-			(108,056	)		-
18	Adar Alef Omnibus	$	64,500		2/19/2019		2/19/2020		-		64,500		-			-			64,500
19	LG Capital Omnibus	$	55,125		2/19/2019		2/19/2020		-		55,125		-			-			55,125
20	LG Capital Omnibus	$	55,125		3/13/2019		3/13/2020		-		55,125		-			-			55,125
21	Adar Alef Omnibus	$	26,500		5/14/2019		2/20/2020		-		26,500		-			-			26,500
22	LG Capital Omnibus	$	27,825		5/17/2019		2/15/2020		-		27,825		-			-			27,825
23	Adar Alef Omnibus	$	53,500		8/1/2019		2/7/2020		-		53,500		-			-			53,500
24	LG Capital Omnibus	$	55,125		8/6/2019		2/7/2020		-		55,125		-			-			55,125
Convertible note total								$	938,843	$	693,475		(99,684	)		(227,939	)		1,304,695

During the three and nine months ended September 30, 2020, the Company recorded new derivative liabilities of $0 and $7,272 related to the issuance of convertible notes payable and Series D-2 Preferred Stock and converted $21,631 and $298,929 in derivative liability to additional paid-in capital due to conversions of notes payable and Series D-2 Preferred Stock into common stock.

NOTE 11 – MERCHANT FINANCING

On January 4, 2020, the Company’s Rune subsidiary entered into another future receivable purchase agreement with Vox Funding and received $14,500. This agreement provides for payment over 70 business days and carried a fee of $4,850. This obligation is not convertible under any terms into Company stock.

On January 24, 2020, the Company’s Social Sunday subsidiary entered into a first future receivable purchase agreement with Vox Funding and received $14,500. This agreement provides for payment over 3.5 months and carried a fee of $4,850. This obligation is not convertible under any terms into Company stock.

On March 3, 2020, the Company’s Social Sunday subsidiary entered into a second future receivable purchase agreement with Vox Funding and received $5,605. This agreement provides for payment over 2 months and carried a fee of $1,895. This obligation is not convertible under any terms into Company stock.

On March 5, 2020, the Company’s Bluwire subsidiary entered into a second future receivable purchase agreement with Reliant Funding and received $83,000. This agreement provides for payment over 6 months and carries a fee of $3,000. This obligation is not convertible under any terms into Company stock.

On March 16, 2020, the President of the United States of America issued a stay-at-home instructions and business closure directive in response to COVID-19 pandemic. Management took steps to promptly close all its Bluwire stores and Fashion Group operations, laying off the vast majority of its employees. The Company’s landlords and Libertas, Vox and Reliant have all agreed to collections deferment of an indeterminant duration. (see note above regarding individual agreements. The Fashion Group continues limited operations in creating and producing PPE materials.

As a consequence of the Covid-19 shutdowns as of March 16, 2020 the Company’s Bluwire Group subsidiary also suspended making any payments on its Merchant Cash Advance facility to Libertas Funding. Merchant Cash Advances are based on the collection of “future receivables” and with the businesses being closed no future payments were due. Libertas has accepted that position and has voluntarily ceased all collection activity.

As of September 30, 2020 the Company had total merchant financing payables of $415,981 with unamortized discounts of 5,968 for net payable of $410,012. As of December 31, 2019 the Company had total merchant financing payables of $631,664 with unamortized discounts of $158,835 for net payable of $472,829.

As a subsequent event, in May 2021, the Company entered into a verbal agreement with Vox to repay $250 per week and all collection efforts are put on hold and forbearance on other receivable holders

As a subsequent event, the Company entered into a verbal agreement with Reliant Funding has been in forbearance. Since April 2021, and the Company pays $10 per week until Bluwire Newark is re-opened.

Additional Working Capital from convertible debt and under the CARES Act.

The Federal Government of the United States of America on March 27, 2020, passed the Cares Act allowing companies to quality SBA Payroll Protection Loans (PPP). These loans provide for certain funding based on previous employment which in part may be forgivable under certain conditions. The remaining portion needs to be repaid over 2 years with a 6-month moratorium on payments and carry a 1% annual interest rate. These loans require no collateral nor personal guarantees. During the subsequent period from May 5, 2020 to May 22, 2021, the Company’s subsidiaries quality and received an aggregate of $294,882 in 2020 and $302,602 in 2021 in PPP loans.

OnBeginning ~~July~~in 25August 2020, ~~2019~~two of the Company’s ~~was~~subsidiaries ~~served~~qualified ~~with~~for athe ~~lawsuit~~United ~~from~~States ~~Auctus~~Small ~~Fund,~~Business ~~LLC~~Administration (“~~Auctus~~SBA”). Economic ~~For~~Industry ~~additional~~Disaster ~~details~~Loans (“EIDL”) and the Company received $325,300 ~~see~~under the program. These loans are unsecured, ~~MD&A~~have ~~Item~~no 1personal guaranty, carry a 3.75% ~~Legal~~annual ~~Proceedings~~interest rate with aggregate monthly payments of 13 months after receipt of funds. Management has used these funds to retain key personnel, pay regulatory fees, rent, begin work on a new website for Bluwire, make progress on this retail APP and acquire product to re-open one of its Bluwire Stores.

AsBeginning ain the subsequent ~~event,~~month onof ~~October~~December 32020 and continuing , ~~2019~~as a further series of subsequent events, the Company’s 12 Retail subsidiary has received anshort ~~additional~~term fundings from a private investor ranging between $530,000 ~~from~~and ~~Adar~~$50,000 ~~Alef~~in asadvances ~~part~~that ofare ~~aback~~paid ~~end~~back ~~promissory~~and renewed ~~note~~in ~~agreement.~~45 ~~The~~to ~~cost~~60 today ~~the~~intervals ~~Company~~for ~~was~~inventory ~~$5,350~~and ~~which~~special ~~includes~~orders ~~$350~~for ~~OID~~customers.

AsOn aMarch ~~subsequent event~~18, ~~on October 8~~2020, ~~2019~~ the Company ~~entered~~received ~~into~~$30,000 afrom ~~promissory~~Adar ~~note agreement with LG Capital Funding~~Alef, LLC (“LGAdar”) ~~for~~ ~~loans~~from ~~totaling~~a $633,~~850.~~600 ~~The~~convertible ~~consideration~~promissory tonote ~~the~~agreement including ~~Company~~fees isand ~~$5,000~~legal ~~with~~expenses of $13,~~500~~600. ~~legal~~The ~~fees~~note ~~and~~is convertible after 181 days at a ~~$350~~(i) ~~OID~~$0.0075 LGceiling ~~delivered~~or ~~those~~(ii) 60% of the lowest ~~funds~~trading onprice ~~October~~over ~~24,~~the ~~2019~~past twenty trading days prior to the conversion date.

~~Note~~On 9March –25, ~~Note~~2020, ~~Payable~~the Company received $30,000 from LG Capital, LLC (“LG”) from a $33,600 convertible promissory note agreement including fees and legal expenses of $3,600. The note is convertible after 181 days at a (i) $0.0075 ceiling or (ii) 60% of the lowest trading price over the past twenty trading days prior to the conversion date.

~~On May 1, 2018, 12 ReTech acquired Emotion Apparel, Inc.~~ As ~~part of the acquisition, Emotion Fashion Group was obligated under~~ a ~~disputed~~subsequent ~~note~~event ~~payable~~on toApril a30, ~~third~~2021 ~~party in~~ the ~~amount~~Company ofreceived $~~250~~30,000, ~~maturing~~from inSBI ~~July 2027~~ and ~~bearing~~ an ~~interest~~additional rate of 2% per annum. The note calls for monthly payments to be made to the third party equal to ten percent (10%) of the gross sales of the Company until paid in full, including accrued interest. When the note was acquired, the Company recorded the note at its fair market value of $~~156~~40,~~014.~~000 The note discount is being amortized to interest expense through maturity. Prior to September 30, 2019 the total payments made under the note payable were $0. Amortization of debt discount amortized amounted to $8,340 and $2,780 for the nine and three months ended September 30, 2019. On September 30, 2019 the Company effectively foreclosed on ~~its~~May ~~liens taking possession of the assets including the brands; Lexi-Luu~~17, ~~Emotion~~2021 ~~Fashion~~(see ~~Group, Punkz Gear and retuned the stock in Emotion Apparel, Inc~~below). ~~and its subsidiaries to the Seller. As detailed in Note 6, all accounts payable, accrued expenses and notes payable reverted back to the seller and offset to Other Income.~~

AsOn as a subsequent event, onApril ~~October 3~~21, ~~2019~~2021 ~~one~~and ofMay ~~the~~4 ~~Sellers~~2021 ~~of Bluwire to~~ the Company ~~provided~~received $~~300~~50,000 tofrom ~~its~~Adar ~~Bluwire~~Alef ~~subsidiary under a secured demand promissory note executed jointly by Bluwire~~ and ~~the~~on ~~Company.~~June ~~This~~1st ~~note~~an ~~caries~~additional ~~interest of 15%~~$50,000. ~~This obligation is not convertible into Company stock under any terms.~~

AsOn aMay ~~subsequent event~~6, on2021 ~~October 11, 2019,~~ the Company’s ~~Bluwire subsidiary entered into a future receivable purchase agreement with Libertas Funding and~~ received $~~343~~30,000. ~~This~~as ~~agreement~~an ~~provides~~additional ~~for~~advance ~~payment~~from ~~over~~Oasis 8Capital ~~months~~pursuant ~~and~~to ~~caries~~previous aagreements ~~fee~~with ofOasis ~~$7,000.~~and ~~This~~on ~~obligation~~May is13, ~~not~~2021 ~~convertible~~an ~~under~~additional ~~any~~$50,000, ~~terms~~as ~~into~~subsequent ~~Company stock~~event.

AsOn aMay ~~subsequent event~~17, on2021 ~~November 4, 2019,~~ the Company’s ~~Bluwire~~received ~~subsidiary~~an ~~entered~~additional ~~into a second future receivable purchase agreement with Libertas Funding and received~~ $~~145~~40,~~500.~~000 ~~This~~from ~~agreement~~SBI, ~~provides~~as ~~for payment over 6 months and caries~~ a ~~fee~~subsequent ~~of $4,500. This obligation is not convertible under any terms into Company stock.~~event

~~Note~~In 10May –2021, ~~Common~~as ~~and~~a ~~Preferred~~subsequent ~~Stock~~event, advisory board member, Richard Berman invested $50,000 in exchange for preferred shares with the option to invest a further $100,000 over the next few months.

~~Capitalization~~NOTE 12 - STOCKHOLDERS’ DEFICIT

~~The~~Reverse ~~Company has authorized shares of common stock of 80,000,000 at a par value of $0.00001, and 50,000,000 shares of Preferred~~ Stock ~~as described below.~~Split

On October 18, 2019, the Company completed a 100 for 1 reverse common stock split reducing the outstanding common shares to 25,410,391. As a subsequent event, as of May 18, 2021 the authorized was increased to 20,000,000,000 shares of common stock.

Preferred Stock

The Preferred Stock may be divided into such number of series as the Board of Directors may determine. The Board of Directors is authorized to determine and alter the rights, preferences, privileges, and restrictions granted to and imposed upon any wholly unissued series of of Preferred Stock, and to fix the number of shares of any series of Preferred Stock and the designation of any such series of ~~Preferred~~ Preferred Stock. The Board of Directors, ~~within the limits and restrictions stated in any resolution or resolutions of the Board of Directors originally fixing the number of shares constituting any series,~~ may increase or decrease (but not below the number of shares such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series.

Commitment and Contingencies

The Series B Redeemable Convertible Preferred Stock is classified as temporary equity, as it is mandatorily redeemable by the holder at a future date. The Series D-1 Preferred Stock is classified as temporary Series D-1 as temporary equity due to the fact that redeemable immediately. The Series D-3 Preferred Stock is classified as temporary equity due to the existence of the PUT. Under the terms of the acquisition of the Red Wire Group, certain members received Series D-5 with a PUT option with a face value of $150,000. If those members so elect to not convert those shares to common stock, they have the right to PUT those shares to the Company for cash. This would be an additional cash constraint on the company. For additional detail, See Note 3 Acquisitions.

Series A Preferred Stock

On July 19, 2018, 1,500,000 shares of Series A Preferred Stock were deemed issued as compensation for services These were, by agreement, not delivered until August, 2019.

As detailed in Note 6 and 7, during the third quarter 2019, Series A preferred stock was issued in exchange for certain accounts payable, accrued expenses, board director fees and related parties payable which total approximately $1,154,572 for 1,915,151 Series A Preferred Shares. In addition, management issued Series A Preferred shares in exchange for professional fees of 114,165 Series A shares.

The Company issued a total of 2,029,316 Series A preferred shares related to the aforementioned.

Therefore, as of September 30, 2019 and December 31, 2018, there was 8,529,316 and 6,500,000 shares of Series A Preferred Stock deemed issued and outstanding.

In addition, as a subsequent event, effective October 1, 2019, the Company issued 500,000 Series A shares in exchange for equity in Bluwire Group, LLC. See Note 3 above for further details.

Series B Preferred Stock

The Series B Redeemable Convertible Preferred Stock is classified as temporary equity, as it is mandatorily redeemable by the holder 15 months after issuance and thus have been recorded as mezzanine. During the six months ended September 30, 2019, the Company issued Series B Preferred Stock and converted to common shares the following Series B Preferred shares as follow:

● As of September 30, 2019 and December 31, 2018, 0 and 68,000 shares of Series B Preferred Stock were issued and outstanding at $1.00 par value, respectively. The Company recognized interest expense of $12,063 for the nine months ended September 30,2019.

The Series B Redeemable Convertible Preferred Stock is classified as temporary equity as it is mandatorily redeemable by the holder at a Cfuture date. The Series D-1 and D-2 Preferred Stock are classified as temporary equity as they are redeemable immediately. The Series D-3 Preferred Stock is also classified as temporary equity due to its put option, which providers the holders the right to put the shares to the Company for cash if they elect not to convert into shares of common stock.

~~There~~2020 was a single issuance of the Series C Preferred Stock during the years ended December 31, 2018. There have been no additional Series C Preferred Stock issued during the three and six months ended September 30, 2019.Transactions

On ~~August~~January 616, ~~2018~~2020, ~~the~~an ~~Board~~existing ofSeries ~~Directors~~B ofstockholder 12purchased ~~ReTech~~53,000 ~~corporation~~Series ~~authorized~~B ~~the~~Preferred ~~issuance~~shares offor ~~one~~proceeds ~~(1) share~~ of ~~our~~$53,000 ~~Series~~under Cthe ~~Preferred~~same ~~Shares~~terms toas ~~the~~their ~~founder,~~prior ~~Angelo Ponzetta, effective August 14, 2018~~purchases.

~~The~~In ~~Series C Preferred Shares have no equity value~~June, no2020 ~~preference in liquidation and is not convertible into common shares, but authorizes~~ the ~~holder~~holders ~~to vote eight billion (8,000,000,000) votes on any matter that shareholders are entitled to vote for under our Bylaws at a cost~~ of ~~$1.00 per share. Please note~~3,600 ~~original~~shares ~~1 share~~ of Series CB Preferred ~~shares~~Stock ~~authorized~~converted ~~the~~these ~~holder~~shares tofor ~~vote one billion (1~~29,~~000~~353,~~000,000)~~846 ~~votes~~shares onof ~~any~~common ~~matter that shareholders are entitled to vote but was modified on January 14, 2019 to be eight billion (8,000,000,000) votes per share~~stock.

~~The~~During ~~Board believes that this was necessary so that~~ the ~~Company~~three ~~maintains~~and anine ~~consistent~~months ~~vision~~ended ~~going~~September ~~forward~~30, ~~that~~2020, ~~can~~Oasis ~~only~~Capital beconverted ~~achieved if~~3,900 ~~the~~and ~~Founder’s~~23,300 ~~vision~~Series isD-2 ~~maintained.~~Preferred ~~This~~shares ~~vision~~with isa ~~the~~value of ~~same~~$7,800 ~~vision~~and ~~that~~$38,800 ~~all current shareholders bought~~ into as78,000,000 ~~evidenced by~~and ~~their investment into the Company. To ensure that the founder’s vision is maintained~~283,142,105 itcommon ~~is necessary that no outsider person or group can gain voting control from the founder as the Company~~shares.

~~There~~During isthe ~~one~~remainder ~~share~~of 2020, the Company converted an aggregate of 3,600 shares of Series CD-2 Preferred Stock ~~issued~~with ~~and~~a ~~outstanding~~fair asvalue of ~~September~~$17,203 into 3072,000,000 ~~2019~~shares ~~and~~of ~~December~~common ~~31, 2018~~stock.

~~Series~~During Dthe ~~Preferred~~third quarter, 2020 the company issued $12,750 Series A shares in restricted shares to employees under the Employee Restricted Stock Plan .

~~Series D~~1. ~~Preferred~~As ~~Stock~~a ~~are~~subsequent ~~“Blank~~event, ~~Check”~~in ~~Preferred~~December ~~which~~2020, ~~allows~~ the ~~Board~~company ofissued ~~Directors to subdivide and/or determine the rights~~$1,250 ~~privileges~~Series ~~and~~A ~~other~~shares ~~features~~for ~~of this stock~~cash.

~~The total~~2. ~~number~~As ofa ~~shares~~subsequent ~~of Series D Preferred Stock the Company is authorized to issue is ten million (10~~event,~~000,000) shares,~~ ~~with~~in aMarch ~~stated par value of $0.00001 per share with such powers~~2021, ~~preferences, rights and restrictions which shall be determined by~~ the ~~Company’s~~company ~~Board~~issued ~~of Directors in its sole discretion~~1,250 ~~and~~Series ~~which~~A ~~designations~~shares ~~and~~for ~~issuances shall not require the approval of the shareholders of the Corporation~~cash.

~~Series D~~3. ~~Preferred~~As ~~Stock~~a ~~are~~subsequent ~~“Blank Check Preferred” which allows the Board of Directors to subdivide and/or determine the rights~~event, ~~privileges~~in ~~and~~April ~~other features of this stock. On July 13~~2021, ~~2018,~~ the ~~Company~~company ~~filed~~issued ~~an amended certificate of designation increasing the authorized Series D preferred shares from~~ 1 ~~million (1~~,~~000,000)~~250 ~~to 10 million (10,000,000), as a reallocation of the 50 million (50,000,000) shares of preferred stock authorized. All of these 10 million (10,000,000) shares of~~ Series DA ~~Preferred Stock are part of the 50 million (50,000,000) authorized~~ shares offor ~~preferred stock~~cash.

4. As a subsequent event, in April 2021, the company issued 25,000 Series ~~D-1~~ ~~Preferred~~A ~~Stock~~shares for cash.

On2019 ~~July 5, 2018 the Company filed a certificate of designation to create a subset of the Series D Preferred Stock designated Series D-1.~~Transactions

OnDuring ~~July 2, 2018,~~ the ~~Company~~three ~~entered~~months ~~into~~ended anMarch ~~equity~~31, ~~line~~2019, holders of ~~credit~~Series ~~agreement~~B ~~with~~Preferred ~~Oasis~~Stock ~~Capital~~converted 40,020 ~~LLC~~shares ~~(“Oasis Agreement”)~~ and asreduced ~~a part of that Agreement~~ the ~~Company~~principal ~~created~~by a$20,164 and ~~subset~~interest ~~Series~~of ~~D-1~~$2,400 ~~Preferred~~through ~~Stock from~~ the ~~authorized~~issuance ~~Series~~of D87,041,209 ~~Preferred Stock~~shares ~~having~~of ~~special~~common ~~rights and privileges as follows:~~stock.

~~The~~During ~~total~~the ~~number~~three ofmonths ~~shares~~ended ofMarch ~~Series~~31, ~~D-1~~2019 ~~Preferred~~Oasis ~~Stock~~Capital ~~issued~~converted ~~was 311~~28,~~250~~500 ~~shares, with a par value of $0.0001 per share and a stated value of $2.00 per share (the “Stated Value”). The~~ Series D-1 Preferred ~~Stock~~shares asfor ~~a whole~~63, ~~of which Series D-1 is a subset~~000,000 ~~has~~shares ~~such~~of ~~powers,~~common ~~preferences, rights~~ stock and ~~restrictions~~reduced ~~which~~the ~~shall~~principal beoutstanding ~~determined~~balance by ~~the~~$28,500. ~~Company’s~~As ~~Board of Directors in its sole discretion~~such, ~~and~~the ~~which~~Company ~~designations~~recorded ~~and~~a ~~issuances~~change ~~shall~~in ~~not~~derivative ~~require~~liability ~~the~~associated ~~approval of~~ the ~~shareholders of the Company.~~ ~~For additional information on~~ Series D-1 Preferred ~~Stock,~~Shares ~~please~~of ~~see Company’s 10_K filed April 16~~$86, ~~2019~~428.

AsOn ofMarch ~~December~~14, 312019, ~~2018~~the ~~with~~Company ~~the~~executed ~~execution~~an ofagreement ~~the~~with Oasis ~~Agreement~~Capital, whereby the Company ~~issued~~agreed ~~311,250~~to ~~shares~~exchange ofthe ~~Preferred~~remaining outstanding of Series D-1 ~~shares which~~Preferred ~~are~~Shares atof ~~par~~282,750 ~~value~~for of282,750 $Series D-2 ~~per~~Preferred ~~share~~Shares. ~~total~~In ~~$622~~addition,~~500.~~ ~~The~~the Company ~~recorded~~executed aan ~~derivative~~agreement ~~liability~~whereby 62,250 ofoutstanding ~~approximately~~D-1 ~~$700,000~~shares ~~associated with~~for 62,250 Series D-12 ~~Preferred~~preferred ~~Shares~~shares in exchange of $100,000. ~~The~~In ~~Series~~addition, ~~D-1~~the ~~Preferred~~Company ~~Stock~~agreed isto ~~classified~~pay 1,425 ~~Series~~shares of D-12 shares as ~~temporary~~a ~~equity~~finance ~~due~~charge tofor this agreement. The excess fair value of the ~~fact that~~shares ~~redeemable~~exchanged ~~immediately~~was recorded as additional interest expense.

During the first quarter of, 2019 Oasis Capital converted 28,500 shares for 630,000 common stock and reduced the principal outstanding balance by $28,500. As such, the Company recorded a change in derivative liability associated the Series D-1 Preferred Shares of approximately ($86,428).

On March 14, 2019, the Company executed an agreement with Oasis Capital, whereby the Company agreed to exchange the remaining outstanding of Series D-1 Preferred Shares of 282,750 for 282,750 Series D-2 Preferred Shares. In addition, the Company executed an agreement whereby 62,250 outstanding D-1 shares for 62,250 Series D-2 preferred shares in exchange of $100,000. In addition, the Company agreed to pay 1,425 shares of D-2 shares as a finance charge for this agreement. The excess fair value of the shares exchanged was recorded as additional interest expense. As of September 30, 2019 there are no Preferred Series D-1 shares outstanding.

~~Series~~The Company issued 346,625 Series D-2 shares to Oasis Capital with a value of $692,850. The Series D-2 Preferred Stock is classified temporary equity due to the fact that the shares are redeemable immediately. As such, the Company recorded an associated derivative liability of $177,323.

~~The~~On ~~Company~~February ~~designated Series D-2 Preferred Stock. The following summary of the Company’s 8% Series D-2 Preferred Stock. The Series D Preferred Stock as a whole~~21, ~~of which Series D-2 is a subset~~2019, ~~has such powers, preferences, rights and restrictions which shall be determined by~~ the Company’s ~~Board~~issued ~~of Directors in its sole discretion~~37,500 and which designations and issuances shall not require the approval of the stockholders of the Company. Before any dividends shall be paid or set-side for payment on any Junior Security Corporation, each holder of Series D-25 ~~Preferred~~and ~~Stock shall be entitled to receive dividends~~54,00 ~~in the manner provided herein, payable on the stated value of the~~ Series D-26 ~~Preferred Stock at a rate of 8% per annum, or 18% per annum following the occurrence of an Event of Default, which shall be cumulative and be due and payable in~~ shares ofpursuant ~~Common~~to ~~Stock on~~ the ~~Conversion date~~RWG ~~or in cash on the Redemption Date~~acquisition. ~~Such dividends shall accrue from the date of issue of each share of Series D-2 Preferred Stock.~~

~~The~~On ~~total~~March ~~number~~14, of2019, the Company issued 82,588 shares of Series D-25 Preferred Stock ~~this~~for ~~Company is authorized to issue 2,500,000 shares, with~~ a ~~par value of $0~~92.~~00001~~5% ~~per~~interest ~~share~~in ~~and a stated value of $2~~Rune.~~00 per share.~~

The Company issued 346,625 Series D-2 shares to Oasis Capital with a value of $692,850. On May 9, 2019, the Company received $50,000 in exchange for 45,045 Series D-2 Preferred Shares from Oasis Capital with which the Company had previously executed the PIPE Securities Purchase Agreement in March of 2019. During the three months ended September 30, 2019 Oasis Capital redeemed $30,000 or 15,000 shares of its Series D-2 Preferred shares for 300,000,000 common shares. In addition, Oasis purchased an additional 9,009 series D-2 Preferred shares for $10,000. For the nine months ended September 30, 2019, Oasis redeemed and exchanged $115,500 or 57,750 shares of its D-2 Preferred shares for 558,000,000 commons shares.

On April 3, 2019, the Company entered into a Securities Exchange Agreement with Mr. D’Alleva and issued him 332,032 Series D-2 Preferred Shares in exchange for the 6,250,000 common shares that Mr. D’Alleva had previously purchased from the Company.

Mr. D’Alleva received 318,750 Series D-2 shares in exchange for the 6,250,000 common shares that he previously purchased for $531,250. He will also receive an additional 13,282 Series D-2 Preferred shares in the form of debt discount in this share exchange.

Also on April 3, 2019, concurrent with the PIPE Securities Purchase Agreement entered into with Mr. D’Alleva, the Company entered into a PIPE Securities Purchase Agreement with Dominic D’Alleva to sell to Mr. D’Alleva in various $25,000 tranches up to 93,750 Series D-2 Preferred Shares for a commitment of a $150,000 investment into the Company.

Thus far, Mr. D’Alleva has purchased 15,625 Series D-2 Preferred Shares for $25,000. He has delivered $12,500 and the Company expects him to deliver the remainder of the purchase price in the current period.

In addition, on April 3, 2019, the Company entered into a PIPE Securities Purchase Agreement with a key technology vendor where the Company exchanged 125,000 Series D-2 Preferred Shares for $200,000 of Company debt held by that vendor. An additional $50,000 was expensed as a result of this transaction.

As of September 30, 2019 the Company had 941,408 Series D-2 Preferred Shares with a face value of $1,882,816.

The Series D-2 Preferred Stock is classified temporary equity due to the fact that the shares are redeemable immediately. As such, the Company recorded an associated derivative liability of $2,156,164 a general default reserve of $387,002 and derivative on default of $701,229.

Series D-3 Preferred Shares

On September 29, 2018, the Board of Directors of 12 ReTech corporation authorized the issuance of twenty thousand (20,000) shares of Series D-3 Preferred Shares to Gianni Ponzetta at a price of $5.00 par value in exchange for $100,000. On the same date, 12 ReTech corporation authorized the issuance of four thousand (4,000) shares of its Series D-3 preferred shares to Gianni Ponzetta at $5.00 par value with a face value of $20,000 as incentive shares at no additional costs to Gianni Ponzetta. Lastly, 12 ReTech corporation issued 30,840 shares of Series D-3 Preferred Shares to Gianni Ponzetta with par value per share of $5.00 in exchange of $154,234 which was owed to Gianni Ponzetta. On October 30, 2018, this Certificate of Designation was filed with the Secretary of State in the State of Nevada.

The Company agrees in connection with this subscription created a sub-class of its Series D Preferred shares which are designated as “Blank Check Preferred” which allows the Board of Directors of the Company to designate, without further shareholder approval, the rights, privileges and preferences or some, part or all of the Series D Preferred Shares and/or to create sub-classification of those Series D Preferred Shares as they deem necessary. The Holder may convert some, part of all of the Securities into common shares of the Company based on the closing market price on the day before notice of conversion is presented to the Company. The Company will pay dividends on the Securities at the rate of 10% per annum and shall pre-pay the Holder the first 12 month’s dividends from proceeds. After 12 months the Company would pay the pro-rata interest on a monthly basis due the first of each month and late after the 10th of each month. For additional information of Series D-3 Preferred Shares, please see the Company’s filed 10-K from April 16, 2019.

The Series D-3 Preferred Stock is classified as temporary equity due to the existence of the PUT. As of September 30, 2019, there were 54,846 Preferred Series D-3 shares outstanding at $5.00 par representing a total of $274,234.

Series D-5 Preferred Stock

The Company designated Series D-5 Preferred Stock, which consists of one million (1,000,000) shares of stock that are designated as the Series D-5 Convertible Preferred Stock. The par value of each issued share of Series D-5 Preferred Stock is $0.00001 per share, and the stated value of each issued share of Series D-5 Preferred Stock is deemed to be $4.00. Series D-5 Preferred Stock carries an annual dividend of 6% which will be paid in arrears. Holders of the shares of Series D-5 Preferred Stock shall not have the right to vote on any matter as to which shareholders are required or permitted to vote, except as otherwise required by law. On February 21, 2019, the Company issued 37,500 shares for 25% minority interest in the Red Wire Group. On March 14, 2019, the Company issued 82,588 shares of Series D-5 Preferred Stock for 92.5% interest in Rune. See Note 3, Acquisitions for additional information. The company recorded an associated derivative liability of $424,753 which remained the same as of September 30, 2019.

As of September 30, 2019 the Company had 120,088 Series D-5 Preferred Shares with a face value of $480,352.

Series D-6 Preferred Stock

The Company designated Series D-6 Convertible Preferred Stock, which consists of one million (1,000,000) shares of stock. The par value of each issued share of Series D-6 Preferred Stock is $0.00001 per share, and the stated value of each share is $5.00. On February 21, 2019, the Company issued 54,000 shares for 75% minority interest in the Red Wire Group. See Note 3, Acquisitions for additional information.

The Company issued 55,600 Series D-6 shares related to the acquisitions of RWG (54,000 shares) and another individual (1,600 shares) with a value of $278,000. The Company recorded an associated derivative liability of $248,618 which remained the same as of September 30, 2019.

As of September 30, 2019 the Company had 55,600 Series D-6 Preferred Shares with a face value of $278,000.

Common Stock

~~The~~2020 ~~Company is authorized to issue 80,000,000 shares of common stock at a par value of $0.00001.~~Transactions

~~Common~~During ~~stock~~the ~~issued~~three ~~for~~months ~~the~~and ~~three~~nine months ended September 30, ~~2019~~2020, ~~was~~LG asconverted ~~follows:~~$0 and $27,270 of principal and $0 and $3,690 of interest of its outstanding convertible note into zero and 217,990,427 shares of common stock.

~~The~~During ~~Company~~the ~~issued~~three 2months and nine months ended September 30,~~124~~ 2020,~~667~~ ~~shares~~SBI ~~for~~Investments anconverted ~~exchange~~$6,218 ofand ~~the~~$16,992 ~~settlement~~of principal of the outstanding convertible ~~debt.~~note ~~The~~into ~~Company issued 3~~69,~~000~~089,~~000~~148 ~~common~~and 96,521,526 shares toof ~~Oasis~~common ~~Capital in exchange for Preferred shares~~stock.

~~Common~~During ~~stock~~the ~~issued~~three ~~for~~months ~~the~~and nine months ended September 30, ~~2019~~2020, ~~was~~Adar asAlef ~~follows:~~converted $0 and $40,559 of principal $0 and $4,659 of interest of the outstanding convertible note into zero and 334,419,870 shares of common stock.

~~The~~During ~~Company~~the ~~issued~~three ~~10,904,612~~and ~~shares~~nine inmonths ~~exchange~~ended ofSeptember ~~the~~30, ~~settlement~~2020, ofOasis ~~the~~Capital ~~convertible~~converted ~~debt.~~3,900 ~~The~~and ~~Company~~19,400 ~~issued~~Series ~~8,025,742 common~~D -2 Preferred shares towith ~~Geneva~~a ~~Roth~~value of $7,800 and ~~Oasis~~$35,200 ~~Capital~~into in78,000,000 ~~exchange~~and ~~for~~283,142,105 ~~Preferred~~ shares of common stock.

AsDuring ofthe ~~September~~remainder ~~30,~~of ~~2019~~2020, ~~and~~LG ~~December~~converted 31$8,900 ~~2018,~~of ~~25,410,374~~principal and 6$3,~~542,519~~458 ~~shares~~of interest of ~~common~~its ~~stock~~outstanding ~~were~~convertible ~~issued~~note ~~and~~into ~~outstanding~~202,356,666 shares ~~respectively~~of common stock.

During ~~As a subsequent event, on October 18, 2019~~ the ~~Company~~remainder ~~completed~~of ~~a 100 for 1 reverse common stock split reducing the outstanding common shares to 25~~2020,~~410,391.~~ ~~All~~SBI ofInvestments ~~the~~did ~~above~~not ~~transactions~~convert ~~occurred~~any ~~prior~~principal ~~to the completion~~ of the ~~Reverse~~outstanding ~~Stock~~convertible ~~split~~note ~~and~~into ~~with the~~shares ~~exception~~ of ~~the authorized~~ common ~~shares which remain at 8 billion authorized common~~ stock ~~issuances listed here had the effect of being divided by 100~~.

~~Note~~During 11the –remainder ~~Segment~~of ~~Data~~2020, Adar Alef did not convert any principal of the outstanding convertible note into shares of common stock.

~~The~~During ~~Company~~the ~~does~~remainder ~~business~~of ~~on three continents (North America~~2020, ~~Asia,~~the ~~and~~Company ~~Europe)~~converted inan ~~three~~aggregate ~~different jurisdictions (Hong Kong-special economic zone~~ of ~~the People’s Republic of China~~3,600 ~~Japan,~~shares ~~United States~~ of ~~America,~~Series ~~and~~D-2 ~~the~~Preferred ~~European~~Stock ~~common~~with ~~market~~a ~~through Switzerland).~~fair ~~These~~value ~~segments are components~~ of ~~the Company about which separate financial information is available and regularly~~$10,803 ~~evaluated~~into ~~by the Chief Executive Officer decision maker in deciding how to allocate resources and in assessing performance. The accounting policies of the segments are the same as those described in Note 3~~72,000,000 ~~Summary~~shares of ~~Significant~~common ~~Accounting Policies~~stock.

~~The following table shows operating activities information by geographic segment for the nine and three months ended September 30, 2019 and 2018.~~23

~~Nine months ended September 30,~~ 2019 Transactions

September 30, 2019		North America				Asia				Europe				Total
Revenue		$	597,678			$	27,091			$	289			$	625,058

During the three months ended March 31, 2019, the Company converted notes payable including principal and accrued interest of $183,874 into 189,859,704 shares of common stock.

September 30, 2019		North America				Asia				Europe				Total
Fixed assets, net		$	68,109			$	88,347			$	-			$	156,456

During the three months ended March 31, 2019, the Company converted 40,020 Series D-1 Preferred shares and 28,500 Series D-1 Preferred shares into an aggregate of 150,041,209 shares of common stock.

~~Three~~NOTE ~~months~~13 ~~ended~~- ~~September 30, 2019~~COMMITMENTS

September 30, 2019		North America				Asia				Europe				Total
Revenue		$	156,788			$	9,010			$	-			$	165,798

Lease Commitments

~~Nine~~The ~~months~~Company ~~ended~~determines ~~September~~if 30an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified fixed asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. The Company has lease agreements which include lease and non-lease components, ~~2018~~which the Company has elected to account for as a single lease component for all classes of underlying assets. Lease expense for variable lease components are recognized when the obligation is probable.

September 30, 2018		North America				Asia				Europe				Total
Revenue		$	26,896			$	46,792			$	38			$	73,726

Operating lease right of use (“ROU”) assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Operating lease payments are recognized as lease expense on a straight-line basis over the lease term. The Company primarily leases buildings (real estate) which are classified as operating leases. ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As an implicit interest rate is not readily determinable in the Company’s leases, the incremental borrowing rate is used based on the information available at commencement date in determining the present value of lease payments.

September 30, 2018		North America				Asia				Europe				Total
Fixed assets, net		$	22,916			$	8,179			$	-			$	31,095

The lease term for all of the Company’s leases includes the non-cancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. Options for lease renewals have been excluded from the lease term (and lease liability) for the majority of the Company’s leases as the reasonably certain threshold is not met.

~~Three~~Lease ~~months~~payments ~~ended~~included ~~September~~in 30the measurement of the lease liability are comprised of fixed payments, ~~2018~~variable payments that depend on index or rate, and amounts probable to be payable under the exercise of the Company option to purchase the underlying asset if reasonably certain.

September 30, 2018		North America				Asia				Europe				Total
Revenue		$	19,642			$	28,460			$	-			$	48,102

Variable lease payments not dependent on a rate or index associated with the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed as probable. Variable lease payments are presented as operating expenses in the Company’s income statement in the same line item as expense arising from fixed lease payments. As of and during the year ended December 31, 2020, management determined that there were no variable lease costs.

Right of Use Asset

In connection with the Bluwire acquisition, the Company recognized a right of use asset of $77,243. The Company used an effective borrowing rate of 13% within the calculation. The lease agreement matures in August 2021. Minimum remaining rental payments in 2020 and 2021 are $22,669 and $59,372, respectively.

Operating Leases

The Company and its subsidiaries have various short-term leases that mature in 2020.

During the second and third quarters up and until the date of this filing the Company has been making post-Covid moves in closing various historically non-profitable Bluwire locations primarily Denver airport, and one location in JFK international airports, or moving this JFK location inside the terminal, redesigning its signature App for a post Covid world, and renegotiating its minimum base rental commitments for all of its retail stores. In all cases there is a rent moratorium until October 1st, 2020. For the Casino store, we did a soft opening on September 11, 2020 and then closed for a two week period in November 2019 to hire and train new staff and management. The store reopened in full on November 29, 2020 in time for Cyber Monday. Management continues to monitor the situation in our prime airport locations or Newark and Dulles airports for reopening. Base monthly rent on the Mohegan Sun store was $6,916, plus a percentage rent equal to 8% of the gross sales that exceeds $86,450 per month until January 2021. The lease expires on April 14, 2021. This lease has been renegotiated and taken over by a different subsidiary of the company that was able to fully stock the store with inventory. and management believes that it will be successful eliminating the minimum base rental feature in all of its retail locations before that date.

~~Note~~On August 13, 2020 the Company’s 12 –Fashion ~~Subsequent~~Group, ~~Events~~a division of 12 Retail Corporation, entered into a new office location under a 2 year lease with an option for a third year beginning on August 17, 2020. This new location is 1600 square feet and caries a base monthly rent of $5651.30 plus a pro-rated expenses for garbage and utilities of $743. Management believes that this additional space is necessary to manage the consolidation of its fashion brands.

~~The~~Other Company evaluated all events and transactions that occurred after September 30, 2019 and through the date of this filing in accordance with FASB ASC 855, “Subsequent Events.” The Company determined that it does have a material subsequent events to disclose as follows:Commitments

The Company ~~obtained~~has a significant contract with an independent contractor third party company which plays a critical role to the ongoing operations of the Company. The contract is for an initial period of five years for which can be cancelled upon six months’ notice and payment of all outstanding fees. The minimum monthly payment is $35,000 for which additional ~~working~~amounts ~~capital~~are ~~from~~to be reimbursed for expenses, etc. During the ~~following~~three ~~sources:~~months ended March 31, 2020, the Company paid $60,800 under the contract to which an additional $192,035 was payable as of March 31, 2020. The Company relies upon the third party for obtaining financing, targeting acquisitions, general corporate guidance, financial reporting, etc.

●Legal & As a subsequent event on October 1, 2019 the Company acquired a retailer with 11 airport terminal locations and one casino location under an equity exchange agreement. Under the terms of the agreement the Company issued to the Sellers 500,000 Series A Preferred Shares in exchange for 51% of the equity in Bluwire Group, LLC and its subsidiaries (“Bluwire”). The Sellers retained 30% of Bluwire and 19% is was reserved for 12 months for potential equity investors into Bluwire. Any of the equity not used to raise capital for Bluwire over that period would be divided equally between the Company and the Sellers. The Sellers will continue to manage Bluwire under consulting agreements. ● On October 18, 2019, the Company successfully completed its reverse stock split and reduced its common stock outstanding by a ratio of one hundred for one. While the board of directors and a majority of the voting interests of the Company had approved an increase in the authorized common shares in an amount up to 20 billion common shares within 12 months of July 18, 2019 at this time management has elected to keep the authorized stock at 8 billion common shares. ● The Company has decided to decrease costs in 12 Japan as well. By cutting all fixed costs and having the one employee in 12 Japan work directly for 12 Hong Kong, Ltd, as a contractor, the Company will now generate an operating profit from the licensing and maintenance revenue generated from 12 Japan. ● On October 3, 2019 the Company received an additional $5,000 from Adar Alef as part of aback end promissory note agreement. The cost to the Company was $5,350 which includes $350 OID.Contingencies

● OnAuctus ~~October~~Fund 8,Management ~~2019 the Company entered into a promissory note agreement with LG Capital Funding, LLC~~ (“LGAuctus”) ~~for~~vs. ~~loans~~12 ~~totaling~~ReTech ~~$6,850~~Corporation. ~~The~~Auctus ~~consideration~~Filed tosuit ~~the~~in ~~Company~~August is2019 ~~$5,000~~claiming ~~with~~breach ~~$1,500~~of ~~legal~~contract ~~fees~~on ~~and~~ a ~~$350~~convertible ~~OID.~~promissory LGnote ~~delivered~~dated ~~those~~April ~~funds~~25, ~~on October 24~~2018, ~~2019.~~which ●had Ona ~~October~~remaining 3,principal ~~2019~~balance ~~one~~ of ~~the~~nearly ~~Sellers of Bluwire provided~~ $~~300~~40,000 ~~to its Bluwire subsidiary under a secured demand promissory note executed jointly by Bluwire and the Company~~. ~~This~~Auctus ~~note~~claimed ~~caries~~damages ~~interest~~totaling ofover ~~15% per annum~~$482,000. ~~This~~The ~~obligation~~Company ishad ~~not~~entered ~~convertible~~ into ~~Company~~a ~~stock~~settlement ~~under~~agreement ~~any~~with ~~terms.~~Auctus ●that Onrequired ~~October 11, 2019,~~ the Company’s ~~Bluwire~~to ~~subsidiary~~make ~~entered into~~ a ~~future~~cash ~~receivable~~payment ~~purchase~~of ~~agreement with Libertas Funding and received~~ $~~343~~117,000. ~~This~~and ~~agreement~~which ~~provides~~was ~~for~~dependent ~~payment~~on ~~over~~the 8Company ~~months~~receiving ~~and~~funding ~~caries~~from a ~~fee~~foreign ~~of $7,000~~investor. ~~This~~That ~~obligation~~investment isdid not ~~convertible~~occur, ~~under~~and ~~any~~the ~~terms~~Company ~~into~~was ~~Company~~unable ~~stock~~to perform. ●Upon Oninformation ~~November~~and 4belief, ~~2019,~~management ~~the~~believes ~~Company’s~~that ~~Bluwire~~Auctus ~~subsidiary~~will ~~entered~~at ~~into~~some apoint ~~second~~re-institute ~~future~~that ~~receivable~~lawsuit. ~~purchase~~Management ~~agreement~~has ~~with~~reserved ~~Libertas~~on ~~Funding~~its ~~and~~financial ~~received~~statements ~~$145,500.~~a ~~This~~sum ~~agreement~~in ~~provides~~excess ~~for~~of ~~payment~~$482,000 ~~over~~in 6regards ~~months~~to ~~and~~this ~~caries~~claim. aTo ~~fee~~the best of $4management’s knowledge,~~500.~~ ~~This~~Auctus ~~obligation~~has is not ~~convertible~~taken ~~under~~other ~~any terms into Company stock~~actions.

●

Bellridge Capital, LP, one of the Company’s convertible debt providers has sued the Company for non-performance and has obtained a default judgment in the amount of $214,195.74 in the southern district of New York. The Company maintains that service of process is defective, and the Company will also assert lack of jurisdiction if any collection effort is ever undertaken among other potential legal claims and defenses

●

J&S properties sued the Company in regards to a lease for a subsidiary in-the State of Utah that was never guaranteed by the Company and obtained a default judgement in Salt Lake County. The Company maintains that it was never properly served and has, it believes, substantial defenses that it will raise should J&S properties ever try to enforce the judgment.

●

RedWire Group, LLC (“RedWire Group”) filed for bankruptcy under Chapter 11 subsection V on March 6, 2020, and the case in ongoing. The Company has funded the initial costs, as well as some ongoing storage costs for RedWire Group equipment. The Company plans to liquidate the equipment and some other assets to pay creditors. This Chapter 11 was converted by the Court to a Chapter 7 and discharged. The equipment was liquidated in 2021, and the Bank (Bank of American Fork) has been paid in full and all other debts have been discharged.

●

Leider Enterprises, Inc. D/b/a SM Distribution Inc a Florida corporation sued Bluwire Sun, LLC in Florida. Bluwire Sun never received any product from this company and is defending this lawsuit in Florida.

●

Rottenberg, Meril, Solomon, Bertiger & Guttilla (“Rottenberg”) sued the Company in Bergen County New Jersey and obtained a default judgement because the Company was never served. The Company believes it has substantial counterclaims and defenses should Rottenberg ever tries to enforce this judgement.

●

PCG Advisory Group (PSG) obtained a default judgement of $63,350 in New York because, we believe, it never properly served the Company and has tried to domesticate that judgement in Arizona. The Arizona Court refused to domesticate the judgment and has given PSG some time to prove proper service. That period has expired.

●

VXB & Orfwid d/b/a Lost + Wander sued the Company’s Social Decay d/b/a Social Sunday subsidiary and also named the Company for invoices. The Company never guaranteed obligations for Social Sunday and intends to vigorously defend this lawsuit as meritless.

●

Tessco Technologies V Bluwire filed suit in Maryland. The Company has not been properly served and if served would dispute jurisdiction as well as other defenses on behalf of its Bluwire subsidiary.

●

George Sharpe, In May 2021 sued the Company in Nevada to try to obtain custodianship of the Company. This was defeated and the Company will be filing for attorney fees, although there are no guarantees the court will award us our attorney fees or other outcomes.

NOTE 14 – SUBSEQUENT EVENTS

The Company evaluated all events and transactions that occurred after March 31, 2020 and through the date of this filing in accordance with FASB ASC 855, “Subsequent Events”. The Company determined that it does have a material subsequent events to disclose as follows:

On March 27, 2020, the Federal Government of the United States of America passed the Cares Act allowing companies access to quality SBA Payroll Protection Loans (PPP). These loans provide for certain funding based on previous employment which in part may be forgivable under certain conditions. The remaining portion needs to be repaid over 2 years with a 6-month moratorium on payments and carry a 1% annual interest rate. These loans require no collateral nor personal guarantees. During the period from May 5, 2020 to May 22, 2021, the Company’s subsidiaries quality and received an aggregate of $294,882 in 2020 and $302,602 in 2021 in PPP loans.

During the remainder of 2020, LG converted $8,900 of principal and $3,458 of interest of its outstanding convertible note into 202,356,666 shares of common stock.

During the remainder of 2020, SBI Investments did not convert any principal of the outstanding convertible note into shares of common stock.

During the remainder of 2020, Adar Alef did not convert any principal of the outstanding convertible note into shares of common stock.

During the remainder of 2020, the Company converted an aggregate of 3,600 shares of Series D-2 Preferred Stock with a fair value of $10,803 into 72,000,000 shares of common stock.

In April 2020, the Company authorized one million (1,000,000) shares of Series D-4 Preferred stock with a face value of $100. The shares have no dividends, are non-voting, and have a liquidation preference after Series D-3 Preferred Shares. These shares are convertible into the Company’s common shares at no discount.

	-	Mid-September 2020. The Company has taken steps to re-open its Bluwire retail store inside the Mohegan Sun Casino location. Due to Covid-19 management was able to negotiate concession from the casino regarding rent and use clauses allowing additional kinds of products in the store. Since Mohegan Sun re-opened the casino in June, traffic has been very good and management believes that by increasing inventory in the Bluwire Mohegan Sun store we are optimistic that unit sales volume will increase significantly. We did a soft opening on September 11, 2020 and then closed for a two week period on November 2019 to hire and train new staff and management. The tore reopened in Full on November 29, 2020 in time for Cyber Monday. Management continues to monitor the situation in our prime airport locations or Newark and Dulles airports for reopening.

	-	As of April 1, 2020 the Company closed its unprofitable company owned Bluwire Store in JFK terminal 4 but may re-open at a different location inside the terminal. The company still maintains two Royalty stores operated by others under the Bluwire Brand in Terminal 5 at JFK international airport in NYC.

	-	The lease for the Company’s Rune NYC. LLC subsidiary ended on March 31, 2020 in the middle of the Covid-19 enforced closures and New York City’s moratorium on evictions. Rune NYC, LLC began paying on a month-by-month basis for June 2020. On August 13, 2020 the Company’s 12 Fashion Group, a division of 12 Retail Corporation, entered into a new office location under a 2 year lease with an option for a third year beginning on August 17, 2020. This new location is 1600 square feet and caries a base monthly rent of $5651.30 plus a pro-rated expenses for garbage and utilities of $743. Management believes that this additional space is necessary to manage the consolidation of its fashion brands.

	-	During August and September 2020, three of the Company’s subsidiaries qualified for the United States Small Business Administration (“SBA”) Economic Industry Disaster Loans (“EIDL”) and the Company received $325,300 under the program. These loans are unsecured, have no personal guaranty, carry a 3.75% annual interest rate with aggregate monthly payments of $1,588, thirteen months after receipt of funds. Management has used these funds to retain key personnel, pay regulatory fees, rent, begin work on a new website for Bluwire, make progress on this retail APP and acquire product to re-open one of its Bluwire Stores which management hopes to accomplish before the third quarter is ended. Management is working hard to obtain EDIL approval for its other subsidiaries and is optimistic in achieving this within the next 6 weeks.

	-	In August 2020 Management elected to restructure its equity cap table. First taking advantage of Nevada statutes that allow a business to reduce its authorized and its outstanding stock by the same ratio without special notice to stockholders and the Company performed a 500 to 1 reverse. This effectively reduced the Company’s authorized stock to 16 million common shares and its outstanding shares to approximately 1.6 million common shares. Then on August 15th, 2020 management exercised its authority granted by stockholders on 8/16/19 by consent with notice to all shareholders to increase the authorized common shares to 20 billion (See 14-C filed on August 16, 2019 and 8-Ks filed on August 17 and August 18 for more information). Preferred shares are unaffected. These changes will be effective upon approval by FINRA. This change will not occur until the Company becomes current in its filings either with the SEC or AND with the State of Nevada.

During the first quarter of 2021, the company applied and qualified for the second round of PPP Loans and received $177,300 for its companies as of 3/2/2021. As of the date of this filing the Company believes that these loans will also all qualify for forgiveness but the Company has not yet applied. The U.S. Congress and Senate is to reconvene and both houses have expressed a desire to expand the CARES act and make the PPP loans automatically forgivable. Management will review whether or not to apply for the forgiveness at the end of the third quarter.

On April 30, 2021 the Company received $30,000 from SBI and an additional $40,000 on May 17, 2021 (see below).

On April 21, 2021 and May 4 2021 the Company received $50,000 from Adar Alef and on June 1st an additional $50,000.

On May 6, 2021 the Company received $30,000 as an additional advance from Oasis Capital pursuant to previous agreements with Oasis and on May 13, 2021 an additional $50,000.

On May 17, 2021 the Company received an additional $40,000 from SBI.

On May 18, 2021, the Company filed its required filings with the State of Nevada and became current and increased its authorized common shares from 8 Billion to 20 Billion common shares.

In May 2021, advisory board member, Richard Berman invested $50,000 in exchange for preferred shares with the option to invest a further $100,000 over the next few months.

On May 18, 2021, the Company filed its required filings with the State of Nevada and became current and increased its authorized common shares from 8 Billion to 20 Billion common shares. While this filing was accepted on May 18, 2021 If became effective with the original filing due date of August, 2020 by Nevada Law.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this quarterly report. References in the following discussion and throughout this annual report to “we”, “our”, “us”, “12 ReTech Corporation”, “12 ReTech”, “RETC”, “the Company”, and similar terms refer to, 12 ReTech Corporation. unless otherwise expressly stated or the context otherwise requires. This discussion contains forward-looking statements that involve risks and uncertainties. 12 ReTech Corporation actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included elsewhere in this filing.

Company

12 ReTech Corporation is a holding company with subsidiaries that develop, sell, and install software that we believe ~~will~~enhance ~~REINVENT~~the shopping ~~RETAIL~~experience for shoppers and retailers. As a holding company we also acquire synergistic operating companies that manufacture and sell fashion and other products to other retailers as well as selling these products online. AsIn ~~a subsequent event on~~ October 12019, ~~2019~~ we acquired 12 retail stores in airport terminals and casinos ~~creating~~solidifying us as a true Omni-Channel retailer. ~~This~~Owning our own brick and mortar stores will allow us to deploy our cutting-edge software and Apps in the United States, to demonstrate its effectiveness asat ~~well~~attracting asshoppers and inducing them to ~~test~~purchase. In our own stores, we plan to test in real time new software products towhich ~~continue~~should to delight consumers and generate ~~additional~~incremental revenues ~~revenue~~and profits for our stores. If we can show incremental revenues and profits for ourselves, we believe that other retailers may follow our example and deploy our software solutions themselves.

~~The~~With ~~Company~~the isintended ~~organized~~future aslaunch aof ~~holding~~our ~~Company~~social ~~with~~shopping ~~two~~app ~~main~~which ~~operating~~is ~~subsidiaries;~~in 12development ~~Hong~~in ~~Kong,~~2021 ~~LTD~~ (~~“12HK”)~~see ~~acquired on~~subsequent ~~June 27, 2017 and 12 Retail Corporation (“12Retail”~~events). ~~Formed~~we onintend ~~September 28, 2017. 12 HK holds all of the intellectual property related~~ to ~~what management believes is our cutting-edge software designed to delight shoppers and provide revenue and~~associate ~~net~~with ~~income~~other ~~lift to~~ retailers. 12on ~~Retail~~a ~~currently~~new ~~operates~~shopping ~~all~~platform ~~of the subsidiaries~~ that ~~actually~~will ~~manufacture,~~benefit asboth ~~well~~consumers ~~as distribute physical products through various channels including; wholesale, retail~~ and ~~online.~~retailers ~~12 Retail provides a number of specific functions for 12 HK including testing the latest software ideas~~ in anew ~~real world setting, the ability to demonstrate revenue~~ and ~~net~~exciting ~~income lift for other retailers as well as avenues to introduce our software products to retailers that we already do business with~~ways. ~~12 Retail has the following Operating Company subsidiaries:~~

●During the ~~Red~~4th ~~Wire~~quarter ~~Group, LLC. (“RWG”) a Utah Corporation was acquired effective February 19,~~ 2019, ~~pursuant to a Share Exchange Agreement whereby the Company exchanged~~ and ~~the~~continuing ~~members~~in ~~of RWG (~~the ~~“Members”)~~first ~~Pursuant~~quarter ~~to the terms of the Exchange Agreement~~2020, ~~the~~amid ~~Company will acquire (i) 75% of~~ the ~~membership~~effects ~~interests~~ of ~~RWG in exchange for 54,000 shares of~~ the ~~Corporation’s~~pandemic ~~Series~~created ~~D-6~~by ~~Preferred Stock and with a stated value of $5 (ii) the remaining 25% of the membership interests of RWG in exchange for 37~~COVID-19,~~500~~ ~~shares of~~ the ~~Corporation’s~~Company ~~Series~~chose to ~~D-5~~consolidate ~~Preferred Stock with a stated value of $4 per share, RWG operates~~ its ~~own~~operations ~~“cut~~around &three ~~sew operation for independent third parties contract to produce cloths~~ operating ~~out~~entities; of12 ~~its factory in Salt Lake City~~Tech, ~~Utah~~Inc. ~~● Rune NYC~~, ~~LLC.~~formed ~~(“Rune”)~~in aArizona ~~New~~on ~~York~~December ~~Corporation was acquired effective March 14~~26, 2019, ~~pursuant to a Share Exchange Agreement whereby the Company exchanged with the members of Rune~~ (~~the~~ “~~Members~~12 Tech”)~~, the members of representing 92.5% of the membership interests have agreed to tender their interests to the Corporation,~~ and ~~the~~12 ~~Corporation~~Retail closed out the tender offer period and the Exchange Agreement became effective. Accordingly, pursuant to the terms of the Exchange Agreement, at closing the Company acquired 92.5% of the membership interests of Rune in exchange for 82,588 shares of the Corporation~~’s Series D-5 Preferred Stock with a stated value of $4 per share. Rune’s operations continued uninterrupted in New York City following the closing and retained key employees. ● Bluwire Group~~, ~~LLC.~~formed ~~As a subsequent event~~ on ~~October~~September 117th, ~~2019~~2017 the Company acquired the retailer with 11 airport terminal locations and one casino location under an equity exchange agreement. Under the terms of the Agreement the Company issued to the Sellers 500,000 Series A Preferred Shares in exchange for 51% of the equity in Bluwire Group, LLC and its subsidiaries (“~~Bluwire~~12 Retail”)., ~~The Sellers retained 30% of Bluwire~~ and ~~19% is reserved for 12 months for potential equity investors into Bluwire. Any of that equity not used to raise capital for Bluwire over that period would be divided equally between~~ the ~~Company and the Sellers. The Sellers will continue to manage Bluwire under consulting agreements. ●~~ 12 ~~Hong~~Fashion ~~Kong~~Group, ~~Ltd.,~~Inc aformed ~~corporation~~on ~~organized in the special economic region of Hong Kong. On~~ June 2726, ~~2017 the Company acquired 12 Hong Kong, Ltd~~ 2020. in a share exchange transaction. This is the technology that manages all the Company’s proprietary and licensed technology that is utilized and sold by the other subsidiaries. In addition, this subsidiary serves as an additional marketing and sales hub for Asia, particularly the Chinese market, excluding Japan.of the account in Europe to a manufacturer’s representative subsequent to the end of this quarter.

2612 Retail operates its own retail outlet(s) as well as those of Bluwire Group, LLC (“Bluwire”) that operates retail stores in airports (mainly in international terminals) and casinos. Because of their locations mainly in international terminals of airports, all Bluwire Company owned stores and all but one royalty store remains closed due to Covid-19. 12 Retail will also serve to demonstrate the effectiveness of the software technology created by 12 Tech in improving revenues and profits for retailers, as well as providing access to other retailers through our soon to be launched social shopping app and through our wholesale fashion business relationships.

~~● Emotion Apparel, Inc. and Emotion~~ 12 Fashion Group, Inc. ~~(“EFG”).~~an OnArizona ~~May~~Corporation 1, 2018, the Company completed the acquisition of E-motion Apparel, Inc. (“EAI”) a California corporation, pursuant to a share exchange agreement whereby the Company exchanged 1.0 million of its common shares for 100% of the outstanding equity of EAI, in a third-party transaction. (This company shed this subsidiary as of September 30th, 2019 see below) The Original EAI Transaction was ~~accounted for as follows: The fair value of the 1.0 million shares of common stock issued amounted to $80,000. EAI owned four wholly~~formed-owned and majority –owned subsidiaries: Lexi Luu Designs, Inc, (a Nevada Corporation), Punkz Gear, Inc, (a Wyoming Corporation), Cleo VII, Inc. (a Nevada Corporation) and Skipjack Dive & Dance Wear, Inc. (a Nevada Corporation), which together owns five microbrands that were included in this transaction and target specific niche markets: Lexi-Luu Dancewear, Punkz Gear, Cleo VII, Skipjack Dive & Dance Wear, and E-motion Apparel, Inc. The acquisition of EAI was accounted for under ASC 805 where purchase price was allocated based on ~~assets~~June ~~acquired and liabilities assumed as of the acquisition date May 1~~26, ~~2018~~2020, ~~at the estimated fair value. During the fourth quarter of 2018, the Company determined that the goodwill associated with the acquisition should be fully impaired,~~ and ~~as such was expensed during the fourth quarter of 2018 On July 6, 2018, the Company incorporated an new Emotion Apparel Ind in the state of Utah and immediately re-named~~ it asoperates ~~Emotion~~our ~~Fashion~~fashion ~~Group,~~wholesale ~~Inc. (“Emotion Fashion Group” or “EFG”)~~ and ~~does~~direct ~~business~~to ~~under~~consumer brands the brand name, “Emotion Fashions.” The EAI share exchange agreement included terms that the Company would provide funding of at least $200,000 in the first 12 months after acquisition and the Seller, who remained as manager, would produce revenues in excess of $1.3 million dollars over that period. The Company secured its investment with a secured line of credit and a landlord’s lien through one of its other subsidiaries. Those liens covered all of the intellectual property and physical assets of Emotion Apparel, Inc. On September 30, 2019 the Company effectively foreclosed on its liens taking possession of the assets including ~~the~~Rune ~~brands; Lexi-Luu~~NYC, ~~Emotion~~Social ~~Fashion Group~~Sunday, ~~Punkz Gear~~ and ~~retuned~~Red ~~the~~Wire ~~stock in Emotion Apparel~~Design, ~~Inc.~~as ~~and~~well ~~its subsidiaries to the Seller. In the 4th quarter 2019 the Company plans to market those brands under new management~~ as ~~part~~consolidating ofremaining ~~its~~operations ~~consolidation~~from ofour ~~its~~other ~~acquisitions~~smaller ~~and utilize its Emotion Fashion Group, Inc, subsidiary that was incorporated in Utah in July 2018~~fashion acquisitions.

Principal subsidiaries

The details of the principal subsidiaries of the Company as of December 31, 2019, are set out as follows (additional consolidation may occur in the future):

Name of Company

Place of Incorporation

Date of Incorporation

Acquisition Date

Attributable Equity

Interest %

Business

12 Retail Corporation (“12 Retail”)

Arizona, USA

Sept. 18, 2017

Formed by 12 ReTech Corporation

100

Red Wire Group, LLC

Utah, USA

July 2, 2015

February 19, 2019

100

Rune NYC, LLC

New York, USA

Jan 23, 2013

March 14, 2019

92.5

Operated by 12 Fashion Group, Inc., an unincorporated division of 12 Retail. Operates contemporary women’s ‘Athleisure’ brand which is primarily sold to retailers.

Bluwire Group, LLC (“Bluwire”)

Florida, USA

Feb 1, 2010

October 1, 2019

60.5

A subsidiary of 12 Retail with 12 brick and mortar stores was acquired.

Social Decay, LLC dba Social Sunday (“Social Sunday”)

New Jersey, USA

Sept 24, 2014

November 1, 2019

100

Operated by 12 Fashion Group Inc., a division of 12 Retail. Operates a contemporary women’s clothing brand primarily sold to wholesalers.

12 Tech Inc

Arizona, USA

Dec 26,2019

Formed by 12 Retech

100

As a holding Company to execute the Company’s technology strategy.

12 Hong Kong Limited (“12HK”)

Hong Kong, China

February 2, 2014

June 27, 2017

100

A subsidiary of 12 Tech Inc. Development and sales of technology applications. Services customers in Asia, including Japan.

12 Japan Limited (“12JP”)

Tokyo, Japan

February 12, 2015

July 31, 2017

100

A subsidiary of 12 Tech Inc. Consultation and sales of technology applications. As of June 2020, our Japanese customer (s) is serviced by 12 Hong Kong.

12 Europe AG (“12EU”)

Switzerland

August 22, 2013

October 26, 2017

100

As of September 2019, this company is closed.

12 Fashion Group Inc

Arizona, USA

June 26, 2020

Formed by 12 Retech

100

Formed as a subsidiary of 12 Retech to hold and operate the wholesale and Retail fashion and apparel operations.

12 Retail Corporation: a subsidiary of 12 ReTech Corporation Operates its own retail store (as of March 2021 as a subsequent event) and manages two main subsidiaries each of which have multiple subsidiaries; 12 Fashion Group, Inc and Bluwire Group, LLC.

12 Fashion Group Inc; A subsidiary of 12 retail, Inc. has the following subsidiaries;

On February 19, 2019 we acquired Red Wire Group, LLC. (“RWG”) a Utah Limited Liability company pursuant to a Share Exchange Agreement whereby the Company exchanged and the members of RWG (the “Members”) Pursuant to the terms of the Exchange Agreement, the Company will acquire (i) 75% of the membership interests of RWG in exchange for 54,000 shares of the Corporation’s Series D-6 Preferred Stock and with a stated value of $5.00 (ii) the remaining 25% of the membership interests of RWG in exchange for 37,500 shares of the Corporation’s Series D-5 Preferred Stock with a stated value of $4.00 per share, RWG operates its own “cut & sew” operation for independent third parties contract to produce cloths operating out of its factory in Salt Lake City, Utah.

As of the end of November 30, 2019, we closed the factory in Utah while 12 Fashion Group retained the customers by completing the orders in process. We were able to produce the products through 3rd party factories in New York City and Los Angeles for less than it cost us to produce the products in our own factory in Salt Lake City, Utah. On March 6, 2020, the company filed a Chapter 11 Bankruptcy filing in Phoenix Arizona. This filing allowed us to sell the equipment we no longer need, pay off the secured creditors and shed all of Red Wire’s debt from our balance sheet. The bankruptcy was discharged on or about September 2020 and all debts were extinguished. 12 Fashion Group continues to service those customers acquired as well as obtaining new accounts by marketing under the d/b/a Red Wire Designs.

One March 14, 2019 we acquired Rune NYC, LLC. (“Rune”) a New York Corporation pursuant to a Share Exchange Agreement whereby the Company exchanged with the members of Rune (the “Members”), the members of representing 92.5% of the membership interests have agreed to tender their interests to the Corporation, and the Corporation closed out the tender offer period and the Exchange Agreement became effective. Accordingly, pursuant to the terms of the Exchange Agreement, at closing the Company acquired 92.5% of the membership interests of Rune in exchange for 82,588 shares of the Corporation’s Series D-5 Preferred Stock with a stated value of $4.00 per share. Rune’s operations continued uninterrupted in New York City following the closing and retained key employees as the leading part of 12 Fashion Group.

On November 20, 2019 Social Decay, LLC d/b/a Sunday, (“Social”) a New Jersey Limited liability company, was acquired by the Company pursuant to a share exchange agreement whereby the Company exchanged the Company’s 30,000 D-6 Shares for 100% of the total outstanding equity of Social and the member of Social (the “Member”). That Member was retained by the Company, but subsequent to the year end on April 15, 2020 she resigned and as a consequence, forfeited the additional 12,000 D-6 Shares held in escrow as a performance incentive. The D-6 shares have a face value of $5.00 per share, and are convertible into the Company’s common shares. Subsequent to year end in March 2020, Social’s print factory was closed in part due to the COVID-19 Pandemic. Social’s products are marketing and manufactured by the staff of 12 Fashion Group.

Bluwire Group, LLC. On October 1, 2019 the Company acquired the retailer with 11 airport terminal locations and one casino location under an equity exchange agreement. Under the terms of the Agreement the Company issued to the Sellers 500,000 Series A Preferred Shares in exchange for 51% of the equity in Bluwire Group, LLC and its subsidiaries (“Bluwire”). The Sellers retained 30% of Bluwire and 19% is reserved for 12 months for potential equity investors into Bluwire. Any of that equity not used to raise capital for Bluwire over that period would be divided equally between the Company and the Sellers. No capital was raised for Bluwire Group and this 19% was issued to 12 ReTech Corporation

12 Tech, Inc. An Arizona corporation is a subsidiary of 12 ReTech Corporation and has a number of subsidiaries (“12Tech”). On December 26, 2019, the Company formed 12 Tech to spearhead the Company’s software technology development and to focus more effort on the largest retail market in the world: the United States of America. The Company then closed or consolidated under 12 Tech all its other software technology companies and maintains the following subsidiaries;

12 Hong Kong, Ltd., a corporation organized in the special economic region of Hong Kong is a subsidiary of 12 Tech, Inc. On June 27, 2017 the Company acquired 12 Hong Kong, Ltd. in a share exchange transaction. Originally this is the Company that managed all the Company’s proprietary and licensed technology that is utilized and sold by the other subsidiaries. With the formation of 12 Tech that role is now being managed by 12 Tech. Today, 12 HK operates as a subsidiary of 12 Tech and serves as the marketing and sales hub for Asia, particularly the Chinese market and now services our customers in Japan, formerly managed by 12 Japan Ltd.

12 Japan, LTD. Organized in Japan and is a subsidiary of 12 Tech inc. After the initial acquisition of 12 Hong Kong, LTD during 2017 and the first half of 2018 the Company made several acquisitions including 12 Japan, LTD. Subsequent to this acquisition, the Company took steps to consolidate the assets and streamline operations that effectively by the end the 3rd quarter 2019, this Company no longer functions as independent subsidiary. In the third quarter of 2019 the Company closed the offices of 12 Japan, and its flagship customer ITOYA and the revenue generated will be serviced and managed by 12 Hong Kong.

12 Europe, A.G. 12 Europe A.G. was acquired in 2017, and underperformed. In the third quarter 2019 it was determined by management that the costs of continuing to support the expenses of an independent 12 Europe A.G., were unsupportable. Therefore, the Company reaffirmed its previous master representation agreement between 12 Hong Kong, LTD and Coppola, AG so that the software customers in Europe can continue to be supported and then closed its operations in Europe. On August 20, 2019, the Company had successfully discharged all of its debts associated with 12 Europe A.G., as part of the completion of the 12 Europe A.G., bankruptcy filing except for certain social benefit payments still owed approximately $35K by the Company. Therefore, this subsidiary is no longer in existence.

Business and Operations

~~Brick~~12 ~~and~~ReTech ~~mortar~~Corporation ~~retailers~~is ~~continue~~a toTechnology ~~struggle~~company ~~against~~that ~~online~~is ~~competition,~~creating ~~even~~software ~~though~~that ~~online~~management ~~sites~~believes ~~haven’t~~will ~~changed~~create innew ~~many~~platforms ~~years. Consumers~~and ~~are~~tools ~~now looking~~ for smaller ~~new~~retailers ~~ways~~ to ~~purchase~~compete ~~products,~~ with amajor ~~larger~~companies ~~focus~~like onAmazon ~~individualism~~and Walmart and ~~social~~delight ~~sharing~~consumers. ~~Retailers and~~To ~~merchants~~better ~~are~~understand ~~searching~~the ~~for~~entire ~~new~~retail environment ~~ways~~the toCompany ~~entice~~has ~~consumers~~acquired ~~through~~operating ~~software~~companies ~~technologies~~ that ~~engage~~sell ~~consumers~~direct ~~both~~to consumers online and in ~~the~~ physical ~~store~~stores as well as to other retailers. These ~~disruptive~~acquisitions, ~~changes~~in ~~are~~addition ~~affecting~~to ~~merchants~~providing ~~and~~current ~~retailers~~revenue ~~and~~to ~~all~~the ~~stages~~Company ofmanagement ~~their~~believes ~~supply~~that ~~chains~~they ~~from~~will provide entree ~~design~~to ~~and~~other ~~manufacture~~retailers tofor ~~distribution~~the sale and ~~logistics~~or licensing of our technology solutions.

~~The~~From ~~Company’s~~an ~~business~~operating ~~plan is to develop and implement cutting edge software that engages and delights consumers~~perspective, ~~reduces~~12 ~~retailers costs~~ReTech ~~and~~Corporation ~~demonstrates~~is ~~revenue and net income lift to retailers. To demonstrate the effectiveness of our technology the Company has acquired (see subsequent events)~~ a ~~twelve~~holding ~~chain~~company ~~retailer (Bluwire Group)~~ with ~~high~~three ~~profile~~main ~~stores~~operating incompanies ~~airport terminals and casinos~~ that ~~provides~~themselves ~~significant~~may ~~revenue to the Company and will be the perfect operation to demonstrate many of our software~~now ~~products~~ and/or ~~develop~~in ~~new products. In addition,~~ the ~~Company~~future ~~operates~~own ~~a number of~~ other subsidiaries. ~~that~~They ~~sell~~are: ~~products~~12 onRetail aCorporation ~~wholesale basis~~which tonow ~~other~~operates ~~retailers~~our ascasino ~~well~~stores asand ~~direct to consumers. These other~~ subsidiaries ~~in addition to providing considerable revenue~~Bluwire toGroup, ~~the~~LLC, ~~Company~~12 ~~management~~Fashion ~~believes~~Group, ~~that~~Inc, ~~they~~and ~~will~~others, ~~provide an entree to sell our software products too once we can demonstrate the revenue~~ and ~~income~~12 ~~lift~~Tech ~~management~~Inc ~~believes~~ that ~~Bluwire~~designed ~~will~~and ~~experience~~develops ~~through the deployment of~~ our ~~technology~~retail ~~in the U~~software.S.

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The Company ~~also~~has ~~plans~~earned tomoney ~~continue~~from tofour ~~make~~different ~~additional synergistic acquisitions that will increase~~ revenue ofstreams ~~our~~(in ~~existing~~declining ~~subsidiaries, and/or~~order): ~~reduce~~Retail ~~costs~~Sales, Wholesale and~~/or~~ ~~open~~Online ~~additional~~ sales ~~channels~~of ~~and/or provide opportunities to sell or license our software products.~~Fashion ~~Management~~products, isRoyalty ~~also~~Payments infor ~~early~~3rd ~~stage~~party ~~talks~~licensing ~~with point~~ of ~~sales~~the ~~(“POS”)~~Bluwire ~~software~~name, and ~~credit~~technology ~~card processing companies that we may partner with to market our software products~~sales.

~~For~~Effects ~~more~~on ~~information~~us ~~about~~of ~~our~~the ~~technology please visit our website at www.12retech,com. For more information about. our business or subsidiaries please see our Form 10~~Covid-K19 ~~for the period ended December 31, 2018.~~Pandemic

2020 was an unusual year, in that at nearly the same time the entire world was in the grip of the Covid-19 pandemic with unprecedented closings of businesses, a virtual cessation of most business and personal travel, lockdown, and stay at home orders. As a Company centered on retail and which derives the most significant portion of its revenue from retail stores in airports and casinos, we were hit particularly hard. In retail, the 1st quarter of every year is the slowest revenue quarter of any year, and even before that first quarter ended all of our retail stores were closed due to the pandemic. Only the casino store was able to be re-opened in late November 2020 to lackluster sales. Supply chains were interrupted, and it became difficult to re-stock our retail store for the holiday season which also delayed its re-opening to mid-December, after an aborted restart in September. The supply chain problems also delayed the receipt of fabric and other products needed by our Fashion Group as they began to re-emerge from under the pandemic closures. Our fashion group, being based-in NYC was closed for many months and only reopened in July to produce masks. All of the stores our fashion group would sell to were also closed. Our technology division, 12 Tech Inc, was also hard hit. Not only were retailers closed and conserving cash like we were, but it became apparent that consumers would no longer interact with public touchscreens, which was the corner stone of our technology. In other words, our technology was made obsolete in the blink of an eye.

The Company managed survival during the pandemic by squirreling cash and obtaining PPP and or EIDL loans from the SBA. We attempted to retain all of our key employees utilizing these funds, but as a subsequent event by June 2021 most have found other jobs once the PPP money ran out. This presents challenges for our airport stores re-openings, as it is a long process to get employees certified (“badged”) to work in airports. This will further slow our re-openings during 2021. We also renegotiated various leases and commitments to make us more streamlined and efficient as we re-open and expand. In Japan we renegotiated out licensing arrangement with ITOYA whereby they managed more of the day-to-day software for a smaller fee and we eliminated virtually all of our costs there. We also learned that the App we had developed there was strongly used by Japanese consumers of ITOYA and we could re-develop it for the U.S. market. This process is well on the way and management believes will create the next great shopping platform.

For more information about our existing technology please visit our website at www.12retech.com. We do not, however, assure that our website is or can always remain current or complete or without errors in terms of information.

Financing and Convertible Debt

To finance our operations, the Company has historically resorted to a number of convertible debt providers (see Note 810). These debt ~~providers~~ providers have in many cases exercised their rights to convert their debt into the Company’s common stock at a discount to market. They then sell that stock to recover their investment and profits. This has over time depressed the value of our Company’s common stock and caused a significant dilution to our shareholders. This could not be ~~helped~~avoided, and management ~~relieves~~believes it was necessary in order to [provide continuation of the Company’s business so that we could make significant acquisitions. The Company has been building revenue momentum through these acquisitions and is no longer exclusively reliant on this form of fund raising. The vast majority of the ~~surfs~~funds the Company has received over the last 4 months have been sourced through non-convertible debt incurred by our operating subsidiaries. There is , however, still a considerable amount of convertible debt that needs to be retired over the near term. Management is working closely with the convertible note holders to find less dilutive alternatives and management believes that ~~during~~in ~~the~~first ~~4th~~half ~~quarter~~of ~~2019~~2021 it will arrive at a solution that will involve less dilution, may require some cash payments from other sources including an equity offering and/or debt offerings through one or more of its subsidiaries as well as leak out provisions negotiated with the convertible debt holders themselves.

The Company had also entered into a $12 million dollar Equity Line of Credit with Oasis Capital which it has been unable to access due to some delays in the audits of one of its acquired subsidiaries. That ~~Has~~has been resolved and Management has been in talks with Oasis on amending that original offering, so that the Company may refile the S-1 required with the SEC. IfThe ~~and~~equity ~~when~~line ~~approved by the SEC this Equity Line~~ of ~~Credit~~credit ~~cajoled~~is ~~provide~~ineffective at ~~fund to retire~~ the ~~convertible~~current ~~debt~~share ~~instrument~~price, ~~upon~~and ~~much~~we ~~more~~will ~~favorable terms~~not ~~than~~be ~~the~~able ~~original~~to ~~convertible~~reinstitute ~~debt~~at ~~which~~current ~~would~~share ~~prove~~price ~~significantly less dilutive to our shareholders~~levels.

In addition, Management has received tentative commitments for preferred Equity Funding that if completed would allow the Company to fully retire the convertible debt. Management, however, cautions readers that while promising no Equity or Debt funding can truly be counted upon until the money is in the bank. The exact amount of the final funding and timing have not been fully determined at this time.

However, ~~management~~Management believes that now that the Company has significant and growing revenue, has streamlined operations, is set to launch its software products in its own ~~store~~stores in the United States, and has access to more standard debt capital, that the issues associated with the convertible debt have become more manageable and therefore will be resolved more favorably to the Company than was previously observed.

Results of Operations

Three Months Ended September 30, ~~2019~~2020 and ~~2018~~2019

Revenues

During the three months ended September 30, ~~2019~~2020 our revenue ~~increased~~decreased to $~~165~~68,~~798~~052 from $48165,~~102~~798, ana ~~increase~~decrease of $~~117~~97,~~696~~746 or ~~245~~59%, ~~which~~compared to the three months ended September 30, 2019 which is primarily the result of ~~new~~the ~~acquisitions~~global ofpandemic ~~RWG~~due to COVID 19 on our Bluwire subsidiary and ~~Rune~~12 Fashion Group subsidiary. The government forced the closure of all our store locations on March 16, 2020. When allowed, the company was able to re-open one of our store locations in December 2020. We hope to open additional store locations in the near future.

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Cost of revenues

During the three months ended September 30, ~~2019~~2020 we incurred costs associated with the delivery of our products in the amount of $~~113~~33,~~015~~539, as compared to $26113,~~795~~015 for the comparable period in ~~2018~~2019. These expenses are related to costs of manufacturing goods. The higher Cost of Revenues as a percentage of Revenues in 2020 is mainly the result of on inventory and production materials due to COVID 19.

General and Administrative

Our general and administrative expenses for the three months ended September 30, ~~2019~~2020 were $~~300~~366,~~673~~783, aan ~~decrease~~increase of ~~$205~~66,~~654~~110, ~~compared~~ compared to $~~506~~300,~~327~~673 for the three months ended September 30, ~~2018~~2019. This is primarily due ~~decrease~~to ofsalary ~~Stock~~for ~~based~~personnel ~~compensation~~associated with Bluwire store ~~expense~~off by impact due to COVID 19 and forced closure of ~~$448,757~~operations during many months.

Professional fees

Our professional fees for the three months ~~ended~~ September 30, ~~2019~~2020 ~~were~~decreased by $~~311~~216,~~113~~934 to $94,179, compared to $~~429~~311,~~409~~113 for the three months ~~ended~~ ended September 30, ~~2018~~2019. Our professional fees include expenses related to our external auditors, legal costs, and consultants. In order to preserve our subsidiaries operations, the company conserved on spending from the period of closure on March 16, 2020 until September 30, 2020.

~~Other~~Depreciation ~~Expense~~and amortization

Our ~~other~~depreciation ~~expenses~~expense ~~increased by $3,660,355 to $4,512,197~~ for the three months ended September 30, ~~2019~~2020 ~~compared~~were to $~~851~~69,~~842 for~~256 ~~the~~an ~~three months ended September 30, 2018. The majority of the~~ increase ~~is made up~~ of ~~three components~~$64,283 ~~increase~~or in1293% ~~other income~~when, compared to $14,~~027,306~~ 973 for the three months ended September 30, 2019. ~~compared~~Our todepreciation $7and ~~for~~amortization ~~three months ended September 30, 2018, offset by increase interest~~ expense toincludes ~~$2,196,459~~intangibles ~~compared~~and toleasehold ~~$147,719~~improvements added ~~for~~October ~~the three months ended September 30~~1, ~~2018~~2019 ~~and~~as ~~increase~~part ~~in change in derivative liability~~ of ~~$2,496,574 for~~ the ~~three~~Bluwire ~~months~~acquisition. ~~ended~~As ~~September~~such ~~30,~~the ~~2019~~company tohad ~~$3,200,690 compared to $704,116, for the~~ three months ~~ended~~of ~~September~~depreciation ~~30,~~and ~~2018.~~amortization ~~See~~as ~~each component described in further detail below. Offset~~opposed byto ~~the~~zero ~~company~~on ~~recognizing~~these anew ~~general~~assets ~~default~~which ~~reserve~~were ~~expense~~added ofduring ~~for~~ the ~~three~~fourth ~~months~~quarter ~~ended September 30, 2019~~ of ~~$142,354 compared to zero as of September 30, 2018~~2019.

~~The~~Other ~~Company~~Income ~~recognized~~and other income primarily from 12 Europe declaring bankruptcy on August 26, 2019 whereby all debts of the company were eliminated with the exception of $35,757 in accounts payable resulting in a gain of $445,244.Expense

~~In addition,~~Our asother ~~detailed~~expenses inincreased by ~~Note 3~~$11,187,967 ~~the~~to ~~Company~~a ~~effectively~~net ~~foreclosed~~other onexpense ~~its liens taking possession~~ of ~~the assets including the brands; Lexi-Luu~~$6, ~~Emotion Fashion Group~~675,769 ~~Punkz~~for ~~Gear and retuned~~ the ~~stock~~three inmonths ~~Emotion~~ended ~~Apparel~~September 30, ~~Inc.~~2020 ~~and~~compared ~~its subsidiaries~~ to ~~the~~net other ~~Seller.~~income ~~AS a result of the debts related to Emotion Apparel~~$4, ~~Inc~~512,198 ~~reverted~~for to the ~~seller~~three ~~including~~months ~~all~~ended ~~accounts~~September ~~payable~~30, ~~accrued expenses~~2019. ~~and~~There ~~notes~~are ~~payable~~three ~~resulting~~main incomponents ~~a gain~~ of ~~$511,486.~~the ~~Lastly,~~increase ~~after~~of ~~care~~the ~~review~~2020 ~~by management, certain accounts payable~~Other ~~were~~Expense ~~determined to not be payable. These payables total approximately $68K were offset to other income.~~category:

291. A increase in loss on derivative liability of $9,889,290 to $6,688,600 from gain of $3,200,690 which is the result of the calculation of derivative liability using Black-Scholes.

~~There~~2. ~~was~~A ~~also~~decrease anin ~~increase~~interest expense of $2,097,707. There was a decrease in interest expense to $298,~~196,459~~752 from $~~147~~2,~~719~~196,459 for the period ended September 30, ~~2019~~2020 compared to the period September 30, ~~2018~~2019. ~~Increase~~This ~~in interest expenses~~ is related to the ~~increase~~cost inof convertible notes and the cost of convertible preferred stock during the same period. In addition, there was a significant increase in interest expense associated with the additional derivative liability for the general default reserve. This resulted in increase in interest expense of $1,786,353.

~~Lastly~~3. ~~there~~A ~~was~~decrease ~~change~~in ofOther ~~derivative~~income ~~liability~~to of $31,~~200~~027,~~690~~306 ~~compared~~from to $~~704~~217,~~116 for the period ended September 30, 2019 compared to the September 30, 2018~~052.

Net Loss

AsFor ~~a result of~~ the ~~foregoing, for the~~ three months ended September 30, ~~2019~~2020, we incurred of a net loss of $56,~~068~~180,~~369~~067 compared to a ~~comprehensive~~ net ~~loss~~gain of $15,~~768~~068,~~692~~ 370 for the three months ended September 30, ~~2018~~2019. This ~~increased~~decrease in net loss is primarily the result of the ~~increase~~decrease in ~~interest~~net ~~expense, and change in derivative liability offset by~~ other ~~income~~expense. ~~These are not operating expenses.~~

The Company is expending working capital to further their business plan. This includes the further development, refinement, and improvement of their software and its adaptation to various European languages and geography. The Company is also expending working capital on the development of new technology which is designed to further enhance the attractiveness of their offerings to their target customer base in the new post Covid-19 contactless environment.

~~Nine Months Ended September 30, 2019 and 2018~~32

~~Revenues~~Nine Months Ended September 30, 2020 and 2019

~~During the nine months ended September 30, 2019 our revenue increased to $625,058 from $73,726, an increase of $551,332 or 748%, which is primarily the result of new acquisitions of RWG and Rune.~~Revenue

During the nine months ended September 30, 2020 our revenue decreased to $590,814 from $625,058, a decrease of $34,244 or 5%, compared to the six months ended September 30, 2019. The decrease was due to the additional revenues from Bluwire acquisition during the fourth quarter of 2019 offset by the result of the global pandemic due to COVID 19 on our Bluwire subsidiary and 12 Fashion Group subsidiary. The government forced the closure of all our store locations on March 16, 2020. When allowed, the company was able to re-open one of our store locations in December 2020. We hope to open additional store locations in the near future.

Cost of ~~revenues~~revenue

During the nine months ended September 30, ~~2019~~2020 we incurred costs associated with the delivery of our ~~product~~products in the amount of $~~426~~304,~~393,~~700 as compared to $26426,~~831~~393 for the comparable period in ~~2018~~2019. These expenses are related to costs of manufacturing goods.

General and Administrative

Our general and administrative expenses for the nine months ended September 30, ~~2019~~2020 were $1,~~068~~425,~~216~~356, aan ~~decrease~~increase of $~~672~~357,~~182~~140, compared to $1,~~740~~068,~~398~~216 for the nine months ended September 30, ~~2018~~2020. This isincrease primarily due ~~decrease~~to insalary ~~stock~~for ~~compensation~~personnel associated with Bluwire ~~expense~~store ofoff ~~$448,757.~~by ~~This~~impact ~~decreased~~due isto aCOVID ~~result~~19 ofand ~~managements continued~~forced ~~efforts~~closure toof ~~reduce~~operations ~~and~~during ~~control~~many ~~costs~~months.

Professional fees

Our professional fees for the nine months ended September 30, ~~2019~~2020 ~~were~~decreased by $~~840~~411,~~611~~930 to $428,681, compared to $~~934~~840,~~459~~611 for the nine months ended September 30, ~~2018~~2019. Our professional fees include expenses related to our external auditors, legal costs, and consultants. In ~~The~~order ~~decrease is~~to apreserve ~~result~~our subsidiaries operations, the company conserved on spending from the period of ~~managements~~closure ~~continued~~on ~~efforts~~March to16, ~~reduce~~2020 ~~and.~~until December ~~control~~31, ~~costs~~2020.

~~Other~~Depreciation ~~Expense~~and amortization

Our ~~other~~depreciation ~~expenses~~expense ~~increased of $11,065,511 to $13,764,357~~ for the nine months ended September 30, ~~2019~~2020 ~~compared~~were to $2264,~~698,846~~678 ~~for~~an ~~the nine months ended September 30, 2018. The majority of the~~ increase ~~is made up~~ of ~~the following components, impairment costs of~~ $~~513~~248,~~601~~583 ~~for~~or ~~the~~1544% ~~nine months ended September 30~~when, ~~2019~~ compared to ~~zero for nine months ended September 30, 2018, default reserve expense of~~ $116,~~687,128 compared to zero~~ 095 for the nine months ended September 30, 2019,. ~~increase~~Our indepreciation ~~interest expense~~and ofamortization ~~$7,309,791~~expense ~~for~~includes ~~the~~intangibles ~~nine~~and ~~months~~leasehold ~~ended~~improvements added ~~September~~October 301, 2019 toas ~~$8,296,103~~part ~~compared~~of ~~to $986,312 for~~ the ~~nine~~Bluwire ~~months~~acquisition. ~~ended September~~As ~~30,~~such ~~2018~~the ~~and~~company ~~lastly~~had ~~change~~three inmonths ~~derivative liability~~ of ~~$4,196,269~~depreciation ~~for~~and ~~the~~amortization ~~period~~as ~~ended September 30, 2019~~opposed ~~compared~~ to ~~$1,637,527.~~zero ~~These costs are estimates that may or may not be realized~~ on athese ~~cash~~new ~~basis.~~assets ~~These~~which ~~increases~~were ~~are~~added ~~offset by~~during ~~increase~~the infourth ~~other~~quarter ~~income to $1,034,956 compared to $7 as~~ of ~~September 30, 2018~~2019. ~~See each component described in further detail below.~~

~~The~~Other ~~company~~Income ~~recognized a loss impairment of software development costs of $513,601 compared to zero as of September 30, 2019~~ and September 30, 2018. Periodically, management reviews its capitalized costs to determine if they are properly valued or should they be impaired. As of September 30, 2019. Management had capitalized approximately $513,601 in development costs for its 12 Technology suite and 12 Sconti APP. While management still believes in the long-term validity of these software applications, the fact remains that adoption by retailers has not met management’s expectations. This led management to cut costs in 12 Europe and 12 Japan. Therefore, management believes that the capitalized costs for the software development should be fully impaired as of the quarter. 12 Sconti App was deployed in 2018 and then the company partnered with major retailer called Jemoli beginning in 2019. Jelmoli has not adopted the balance of the 12 Technology suite. The 12 Europe office has been closed and the technology licensed so that any revenues generated are mostly profit without any significant related costs. Many elements of the 12 Technology suite was launched in Japan more than 3 years ago at one specific retailer, ITOYA. In 2018, elements of the 12 Technology Suite was installed in a second new ITOYA store. ITOYA has indicated interest in expanding its use of elements of the 12 Technology Suite to the remainder of its stores (more than 25) and while talks are ongoing no determination has been made. Management has determined to minimize its costs by, downsizing 12 Japan, closing the office and hiring the one former employee as a contractor of 12 Hong Kong.Expense

InOur ~~addition,~~other ~~the~~expenses ~~company~~decreased ~~recognized~~by a$11,166,472 ~~general~~to ~~default~~a ~~reserve~~net other expense of $2,597,885 for the nine months ended September 30, ~~2019~~2020 ofcompared to $113,~~687~~764,~~528 compared~~357 tofor ~~zero~~the asnine ofmonths ended September 30, ~~2018~~2019. There are three main components of the decrease of the 2020 Other Expense category:

On1. ~~July~~A ~~25,~~decrease ~~2019~~in ~~the~~loss ~~Company~~on ~~was~~derivative ~~served~~liability ~~with~~of a$1,846,189 ~~lawsuit~~to ~~from Auctus Fund~~$2,323,080 ~~LLC~~from ~~(“Auctus”). For additional details~~$4,169,269 ~~see MD&A~~which ~~Item~~is 1.the ~~Legal~~result ~~Proceedings,~~of ~~including~~ the ~~settlement~~calculation of ~~$120,375~~derivative liability ~~which~~using ~~is still pending~~Black-Scholes.

~~However,~~2. ~~management~~A ~~calculated~~decrease ain ~~default~~interest ~~reserve~~expense ~~which~~of ~~represents~~$7,960,764. ~~the~~There ~~additional~~was ~~amount~~a ~~management~~decrease ~~would~~in ~~have~~interest toexpense ~~payout~~ to ~~all~~$335,339 ~~note~~from ~~holders in~~$8,296,103 for the ~~event~~period ofended September ~~the~~30, ~~default.~~2020 ~~Management~~compared ~~quantified~~to ~~what~~the ~~this~~period ~~amount~~September ~~would~~30, be2019. ~~which~~This ~~includes~~is ~~additional~~related ~~premiums,~~to ~~additional~~the ~~accrued interest~~cost ~~and~~of ~~default~~convertible ~~accrued~~notes ~~interest.~~and ~~The~~the ~~total~~cost ~~reserve~~of ~~quantified~~convertible preferred bystock ~~management~~during ~~amounted~~the tosame ~~$1,687,528~~period.

~~There~~3. ~~was~~A ~~also~~decrease ~~an increase~~ in ~~interest~~reserve expense of $71,~~309~~331,~~791~~844 to $8355,~~296~~684 from $1,~~103~~687.528 for the ~~period~~nine months ended September 30, ~~2018~~2020 compared to ~~$986,312~~ ~~the period~~ September 30, ~~2018~~2019. Increase in interest expenses is related to increase in convertible notes convertible preferred stock during the same period. As well as a significant increase in interest expense associated with the additional derivative liability and for the general default reserve.

3133

The Company recognized other income primarily from 12 Europe declaring bankruptcy on August 26, 2019 whereby all debts of the company were eliminated with the exception of $35,757 in accounts payable resulting in a gain of $445,244.

In addition, as detailed in Note 3, the Company effectively foreclosed on its liens taking possession of the assets including the brands; Lexi-Luu, Emotion Fashion Group, Punkz Gear and retuned the stock in Emotion Apparel, Inc. and its subsidiaries to the Seller. AS a result of the debts related to Emotion Apparel, Inc, reverted to the seller including all accounts payable, accrued expenses and notes payable resulting in a gain of $511,486. Lastly, after care review by management, certain accounts payable were determined to not be payable. These payables totally approximately $68K were offset to other income.

Lastly there was change of derivative liability of $4,169,269 compared to $1,637,527 for the period ended September 30, 2019 compared to the September 30, 2018.

Net Loss

As a result of the foregoing, for the nine months ended September 30, ~~2019~~2020, we incurred of a net loss of $154,~~494~~429,~~229~~ 524 compared to a comprehensive net loss of $515,~~326~~494,~~637~~229 for the nine months ended September 30, ~~2018~~2019. This ~~increased~~decrease in net loss is primarily the result of the ~~increase in interest expense, general default reserve expense in case of default pay out and loss on impairment of development costs off set by~~ decrease in ~~selling~~net ~~general~~other ~~and administrative~~ expense.

The Company is expending working capital to further their business plan. This includes the further development, refinement and improvement of their software and its adaptation to various European languages and geography. The Company is also expending working capital on the development of new technology which is designed to further enhance the attractiveness of their offerings to their target customer base.

Consolidation of Operations

In order to achieve cost synergies, the Company continues to take steps to reduce and eliminate redundant and unnecessary costs in its operations. Management recently created the 12 Fashion Group division of 12 Retail to house and operate its fashion brand operations. The operations of Rune NYC, Red Wire Group and Social Sunday were combined, and steps were taken to reduce expenses while still working to expand the business.

Management’s recent decision in the 1^stquarter of 2020 to outsource Red Wire Group’s manufacturing operations to qualified third parties has increased the potential for profitability of the 12 Fashion Group’s DIFY (“Do it For You”) apparel design and apparel manufacturing Today, we no longer operate our own factory but still service existing customers and recruit new customers. As a result, we have cut expenses dramatically and no longer have a manufacturing factory’s expenses such as payroll and rent. We have increased the customer base and conduct our business providing design and project management services to our client base. We have also decided to put the Red Wire Group into bankruptcy protection which will eventually allow us to eliminate the debts of the former operation. This may result in future gains in net income as well as allowing the successor business to operate with a cost structure that does not need to scale up with operational expansion and potentially earn a profit.

During the transition, Red Wire Design had a number of customer projects where they had taken deposits (typically 50% of total project revenues) and could not finish the project in its own factory. 12 Fashion Group found manufacturing partners who were willing to finish each and every unfinished project. The completed projects were to be invoiced for the remainder of the balances due and the resultant payments would be used to pay the manufacturing partners for their services. Some of these projects still remain unfinished at the time of the filing this report due to the government mandated closures. Through our efforts and good communication most of these customer relationships were salvaged, and we can expect that 12 Fashion Group will continue to receive business from these former customers of Red Wire Design.

This salvage operation allowed the Company to recognize revenues and expenses as it would have done if Red Wire Group had completed their projects on their own. However, there was a negative cash flow effect as all the resultant collected accounts receivables generated by these projects went out to pay the manufacturing partners. Management expects this to negatively affect gross margins for the Company in the upcoming financial reports of the 1^st quarter of 2020. Going forward in the second half of 2020, Management expects gross margins to return to levels of between 30% and 40% for the 12 Fashion Group business.

Social Sunday’s operations are also being restructured. Management has taken steps to reduce cash outflows while it makes a decision regarding the future of the Social Sunday operation. In the meantime, this business has been stood still and it may be that we will use the bankruptcy laws to eliminate the debts.

Rune’s business has also been consolidated into the 12 Fashion Group Division with Rune’s President, Emily Santamore, installed as President for the 12 Fashion Group’s operation. Rune’s business continues to service existing clients and recruit new clients. It is Management’s strategy that the improved cost structures of the 12 Fashion Group will allow the business to grow and generate profits over the next 12 months and beyond.

Beginning in early March 2020, the apparel business of 12 Fashion Group was affected by the business shutdowns of geographies in the USA related to the COVID-19 pandemic. Manufacturing partners had to shut down their operations unless they were producing products such as face masks or hospital gowns that were deemed essential to the fight against this infectious disease. As such, 12 Fashion Group and select manufacturing partners got into the face mask business. So far, this business has produced quantities of product and revenues that are approximately a third of what management would consider normal business activity levels. Management does not expect business activities of the fashion industry to return to normal levels until the following year.

In another consolidation of operations and expenses, Management partially consolidated the operations of 12 Japan into 12 Hong Kong. In so doing, we are eliminating much of the overhead expenses of one of the Asian operations while retaining the ability to service our existing customer base. As a subsequent event, we have also received 2 million yen ($18,000) from the government of Japan as a grant which management plans to use to try to expand our business in Japan.

Bluwire Group, which provided the bulk of the revenue growth of the 4^th quarter of 2019, has also been impacted by the COVID-19 pandemic. On or about March 16, 2020, every one of the Bluwire stores was shut down by local government mandate. Stores were shuttered and our staff was laid off. We are staying in close communication with our landlords and the various airport authorities where we have stores located. At this point, Management still does not have a timeline for the reopening of these business operations. This shutdown has negatively impacted the Company’s revenues and cash flow. As a subsequent event, we have applied for and received CARES Act Payment Protection Program funding and EIDL for some of the stores. These funds will help Bluwire get back on its feet when the airport and casino stores are allowed to reopen. Management predicts that it will likely be the following year before airport traffic levels get back to normal if not longer. We are currently expecting to report large negative impacts to the Bluwire business in terms of revenues for the balance of this year.

Liquidity and Capital Resources

The Company has met its current capital requirements primarily through the issuance of debt-equity and preferred stock. Management views the working capital that is raised through debt-equity or preferred equity offerings as being equivalent to raising working capital via common equity subscriptions, but with the added bonus of allowing the common equity value to rise through the passage of time and simultaneous achievement of the Company’s business goals. Any conversion of debt into equity could occur at a higher equity valuation then the Company currently has. The Company has reserved the right to repurchase these debt-equity interests and preferred stock at a predetermined premium should management determine that this is in the best interests of shareholders at an appropriate future point in time.

32Operating expenses for the Company have been paid from revenue as well as from the issuance of debt-equity and preferred stock subscriptions. At September 30, 2020 and December 31, 2019, the Company had a deficit in working capital (current liabilities in excess of current assets) of $14,486,873 and $11,786,147, respectively. The increase in working capital deficit was principally due to an increase in accounts payable due to the acquisition of Bluwire. A portion of this working capital deficit has been financed loans from stockholders. As of September 30, 2020, amounts owed to stockholders totaled $383,856.

Operating expenses for the Company have been paid from revenue as well as from the issuance of debt-equity and preferred stock subscriptions. As of September 30, 2019, the Company had a deficit in working capital (current liabilities in excess of current assets) of $20,346,297. The majority of the deficit is derivative liability of $14,494,342 and a general default reserve of $1,687,528 and convertible notes of $1,006,013. A portion of this working capital deficit has been financed loans from stockholders. As of September 30, 2019, amounts owed to stockholders totaled $120,742 which was significant reduced during the third quarter of 2019. The total stockholders’ deficit as of September 30, 2019 and December 31, 2018 was $19,302,877 and $5,842,500. The increase in working capital deficit when compared to December 31, 2018 was principally due to an increase in notes payable (“debt-equity”) and associated derivative liability and to a lesser extent, an increase in accounts payable.

The Company has financed our cash flow requirements through the issuance of debt-equity and preferred stock. As the Company expands, we may continue to experience net negative cash flows from operations, pending generation of significant revenues. Additionally, we anticipate obtaining additional financing to fund operations through debt-equity and preferred stock offerings to the extent available or to obtain additional financing to the extent necessary to augment our working capital balances.

Management believes that our acquisition strategy will successfully provide significant revenues, potential profits as well as access to ~~traditional~~ traditional bank and asset-based credit lines. In addition, Management believes that existing shareholders, lenders, and prospective new investors will provide the additional cash needed to meet our obligations as they become due.

~~The~~In ~~Company~~connection ~~filed~~with athe ~~Certificate~~acquisition of ~~Designation~~Bluwire Group, LLC, on ~~January~~October 93, 2019, toone ~~create~~of 1the Sellers of Bluwire provided $300,000 capital contribution to its Bluwire. This obligation is not convertible into Company stock under any terms. This capital contribution to Bluwire has not been adequately documented. In Addition,~~000~~ ~~Series~~on ~~D-5~~October ~~Convertible~~15, ~~Preferred~~2019, ~~Stock~~the ~~with~~Company’s Bluwire subsidiary entered into a future receivable purchase ~~par~~agreement ~~value~~with Libertas Funding and received $0343,000.~~00001~~ This agreement provides for payment over 8 months and ~~stated~~caries ~~value~~a fee of $47,000.00 This ~~per~~obligation ~~share~~is not convertible under any terms into Company stock. ~~Also~~Lastly, on ~~January~~November 95, 2019, the Company’s ~~filed~~Rune subsidiary entered into a ~~Certificate~~future ofreceivables ~~Designation to~~purchase ~~create~~agreement ~~One~~with ~~Million~~Vox (1funding and received gross proceeds for $145,~~000,000)~~500 ~~Series~~which ~~D-6~~were ~~Convertible~~used ~~Preferred~~in ~~Stock~~part to ~~with~~retire ~~par~~a ~~value~~previous $0and smaller obligation to Vox Funding.~~00001~~ The Agreement provided for payment over 6 months and ~~stated~~carries ~~value~~a fee of $54,500.00 This obligation is not convertible under any terms into Company Stock. After the March 16, 2020 Covid shut down, all payment ceased by verbal mutual agreement. In May 2021, the Company entered into a verbal agreement with Vox to repay $250 per week and all collection ~~share~~efforts are put on hold and forbearance on other receivable holders.

~~The~~On ~~Company~~March ~~filed~~18, an2020, ~~amendment~~the onCompany ~~January~~entered ~~11,~~into ~~2019~~a toback ~~Series~~end Cpromissory ~~Preferred~~note ~~shares~~agreement ~~where~~with ~~each~~Adar ~~issued~~Alef, ~~and~~LLC ~~outstanding~~(“Adar”) ~~shares~~for ofloans ~~Series~~totaling C$33,600. ~~Preferred~~The ~~Stock~~consideration ~~shall~~to bethe ~~entitled~~Company towas 8$30,000 with $3,~~000,000~~600 ~~votes~~of atlegal ~~each~~fees. ~~meeting~~As ofa ~~shareholders~~subsequent ofevent, on March 25, 2020, the Company entered into a back end promissory note agreement with ~~respect~~LG toCapital, ~~any and~~LLC ~~all~~(“LG”) ~~matters~~for ~~presented~~loans totaling $33,600. The consideration to the ~~shareholders~~Company was $30,000 with $3,600 of ~~the~~legal ~~Company~~fees. ~~for~~The ~~their~~note ~~action~~is orconvertible ~~consideration~~after ~~(by~~181 ~~vote~~days orat ~~written~~a ~~consent~~(i) $0.0075 ~~Holders of~~ceiling ~~shares~~or of(ii) ~~Series~~60% Cof the ~~Preferred~~lowest ~~Stock~~trading ~~shall~~price ~~vote~~over ~~together with~~ the ~~holders~~past oftwenty ~~Common~~trading ~~Shares~~days asprior ato ~~single~~the ~~class~~conversion date.

~~The~~On ~~Company also filed with the State of Nevada an Amendment to its Articles of Incorporation on~~ March 85, ~~2018~~2020, ~~that~~the ~~increased~~Company’s ~~it authorized~~Bluwire ~~common~~subsidiary ~~shares~~entered ~~from~~into ~~One~~a ~~billion~~second tofuture ~~eight~~receivable ~~billion~~purchase ~~common~~agreement ~~shares~~with ~~authorized.~~Reliant OnFunding and ~~March~~received 14$83,000. ~~2019,~~This ~~the~~agreement ~~Company~~provides ~~entered~~for ~~into a~~payment ~~PIPE~~over ~~Equity~~6 ~~Purchase~~months ~~Agreement~~and ~~whereby~~carries ana ~~institutional~~fee ~~investor~~of ~~agreed to purchase up to~~ $~~500~~3,000 ~~worth of the Company’s D-2 Preferred Shares with a $2~~.00 ~~face~~This ~~value~~obligation atis tonot beconvertible under ~~determined~~any ~~discount~~terms tointo ~~face~~Company ~~value~~stock. ~~Concurrent~~This ~~with~~agreement ~~the~~has ~~execution~~been ofin ~~this Agreement,~~forbearance ~~the~~since ~~Company~~April ~~sold 103~~2021,~~500~~ ~~preferred D-2 Preferred Shares~~ and ~~received~~the ~~net~~Company ~~proceeds~~pays ~~after expenses of~~ $~~100,000~~10 ~~(Tranche #1).~~per ~~The~~week ~~D-2 Preferred Shares are convertible to common shares after a 6 month or more holding period at market price. (See Form~~until ~~8-K~~Bluwire ~~filed~~Newark onis ~~March 20, 2019)~~re-opened.

~~Concurrent~~In ~~with~~ the ~~execution~~future ofwe ~~the~~will ~~PIPE~~need ~~Funding~~to ~~Agreement~~generate ~~the~~sufficient ~~Company~~revenues ~~executed~~from anoperations ~~Exchange~~in ~~Agreement~~order ~~with~~to eliminate or reduce the ~~same~~need ~~institution~~to ~~investor~~sell additional stock ~~whereby~~or ~~that~~obtain ~~investor~~additional ~~exchange~~loans. ~~all~~However, ofthere ~~its~~can ~~Series~~be ~~D-1~~no ~~preferred~~assurance ~~shares~~we ~~for~~will ~~newly~~be ~~issued~~successful ~~Series~~in ~~D-2~~raising ~~Preferred~~the ~~Shares.~~necessary ~~(See~~funds ~~Form 8-K~~to ~~filed~~execute onour ~~March~~high growth ~~20,~~business ~~2019)~~plan.

InAt ~~connection~~September ~~with~~30, ~~the~~2020, ~~with~~cash ~~PIPE Funding Agreement~~ and ~~the~~cash ~~Exchange~~equivalents ~~Agreement~~was ~~listed~~$42,826 ~~above~~compared ~~the~~to ~~Company~~$118,860 ~~field~~at ~~with~~December the State of Nevada a new Certificate of Designation which took 2.5 million of the blank check preferred shares the Company has and designated them as Series D-2 Preferred Shares. (See Form 8-K filed on March 2031, 2019).

OnIt ~~September~~is ~~25.~~likely ~~2019,~~that the Company’s ~~Rune~~will ~~subsidiary~~need ~~entered~~to ~~into~~obtain ~~two~~additional ~~separate~~working ~~future~~capital ~~receivables~~through ~~purchase~~debt-equity ~~agreements with Vox Funding~~ and ~~received~~preferred ~~gross~~stock ~~proceeds~~capital ~~for~~raises ~~$49,000~~until the ~~which~~Company ~~were~~can ~~used~~generate insufficiently ~~part~~profitable torevenues ~~retire a previous and smaller. obligation~~ to ~~Vox Funding.~~sustain ~~The~~the ~~Agreements~~cash ~~provided~~burn ~~for~~rate ~~payment~~that ~~over~~the 6Company’s ~~months~~business ~~and~~plan ~~carries a fee of $1,470. This obligation is not convertible under~~calls ~~any terms into Company Stock~~for.

~~On September 26, 2019, the Company sold 9,009 Series D-2 Convertible Shares to Oasis Capital and received $10,000.~~35

AsAlthough, aour ~~subsequent~~business ~~event,~~plan incalls ~~connection~~for ~~with~~high ~~the acquisition of Bluwire Group~~growth, ~~LLC,~~we onanticipate ~~October~~that 3,we ~~2019~~may ~~one~~continue ~~of the Sellers of Bluwire provided $300,000~~ to ~~its~~incur ~~Bluwire~~operating ~~subsidiary~~losses ~~under~~during athe ~~secured~~next ~~demand~~twelve ~~promissory note executed jointly by Bluwire and the Company~~months. ~~This~~Our ~~note~~prospects ~~caries~~must ~~interest~~be ofconsidered ~~15%.~~in ~~this~~light ~~obligation~~of isthe ~~not convertible into Company stock under any terms. In Addition~~risks, ~~on October 15~~expenses, ~~2019~~and ~~the~~difficulties ~~Company’s~~frequently ~~Bluwire~~encountered ~~subsidiary~~by ~~entered~~companies ~~into~~at aour ~~future receivable purchase agreement with Libertas Funding~~stage, ~~and~~particularly ~~received~~companies ~~$343,000.~~in ~~This~~new ~~agreement provides for payment over 8 months~~ and ~~caries~~rapidly aevolving ~~fee of $7,000~~markets. ~~This~~Our ~~obligation~~roll isup ~~not~~acquisition ~~convertible under~~strategy ~~any~~seeks ~~terms~~to ~~into~~mitigate ~~Company~~some ~~stock.~~of ~~Lastly,~~those ~~on November 5. 2019~~risks, ~~the Company’s Rune subsidiary entered into a future receivables~~but ~~purchase~~until ~~agreement~~more ~~with~~acquisitions ~~Vox~~can ~~funding~~be ~~and~~completed, ~~received gross proceeds for $145~~consolidated,~~500~~ ~~which were used in part to retire a previous~~ and ~~smaller.~~ ~~obligation~~we toreap ~~Vox~~the ~~Funding.~~benefits ~~The Agreement provided for payment over 6 months and caries a fee~~ of $4consolidation,~~500.~~ ~~This~~we ~~obligation is~~cannot ~~not~~accurately ~~convertible~~include ~~under~~their results ~~any~~in ~~terms~~our ~~into~~projection ~~Company~~of ~~Stock~~cash needs.

AtRisks ~~September 30~~include, ~~2019~~but are not limited to, an evolving and unpredictable business model and the ~~Cash~~management of growth and ~~Cash~~the ~~Equivalents~~consummation ~~balance~~and ~~was~~assimilation of ~~$40~~multiple acquisitions. These factors raise substantial doubt about our ability to continue as a going concern. To address these risks,~~258~~ we ~~compared~~must, among other things, increase our customer base, implement and successfully execute our business and marketing strategy, respond to ~~$37~~competitive developments,~~721~~ asand ofattract, ~~December~~retain 31and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, ~~2018~~and the failure to do so can have a material adverse effect on our business prospects, financial condition, and results of operations.

~~During~~Impact the nine months ended September 30, 2019, current liabilities increased by $13,995,580 when compared to December 31, 2018. The primary reasons for the increase was an increase is due to derivative liabilities of ~~$11,797,872, default reserve of $1,687,528 offset by decrease in accounts payable (“debt~~COVID-~~equity”) of $310,260. The decrease in accounts payable and accrued expenses is primarily due to some of this debt being exchanged for Series A preferred stock.~~19

~~The~~Like ~~Company’s~~most ~~lack~~other ofbusiness ~~operating~~in ~~history~~the ~~makes~~United ~~predictions~~States, ofour ~~future~~businesses ~~operating~~have ~~results~~been ~~difficult~~severely toimpacted ~~ascertain.~~by ~~However,~~the asCOVID-19 ~~a subsequent~~Pandemic. ~~event,~~While the ~~Company~~first ~~acquired~~quarter of ~~controlling~~any ~~interest~~calendar inyear ~~Bluwire~~is ~~Group,~~historically ~~LLC~~the ~~effective~~slowest ~~October~~quarter ~~1st,~~of ~~2019~~the ~~which~~year ~~shows~~for ~~substantial operating~~revenues ~~history~~for ~~which~~our ~~improves~~main ~~the~~operating ~~company’s~~subsidiaries ~~prospects. Still,~~ the ~~Company’s~~first ~~prospects must be considered in light~~quarter of ~~the~~2020 ~~risks,~~was ~~expenses~~severely ~~and~~impacted ~~difficulties frequently encountered~~ by ~~companies~~US atGovernment’s ~~our~~business ~~stage,~~shutdowns ~~particularly companies in new~~ and ~~rapidly evolving~~stay ~~markets.~~at ~~Our~~home ~~roll~~orders uprelated ~~acquisition~~to ~~strategy~~COVID-19. ~~seeks~~We toderive ~~mitigate~~most of ~~some~~our ofrevenue ~~those~~from ~~risks~~our ~~but~~12 ~~until~~Retail ~~more~~Corporation ~~acquisitions~~which ~~can~~is beitself ~~completed, we~~composed ~~cannot~~of ~~include~~two ~~their~~Operating ~~results~~units: in12 ~~our~~Fashion ~~projection~~Group ofand ~~cash~~Bluwire ~~needs~~Group, LLC.

33In response to the President’s “stay at home orders” on March 16, 2020, we promptly laid off almost all of our 12 Fashion Group employees and contractors. 12 Fashion Group retained three employee/contractors and focused on producing and selling of washable reusable masks, both wholesale and direct to consumer online.

~~Risks~~Our ~~include,~~Bluwire ~~but~~retail ~~are~~stores ~~not~~in ~~limited~~Newark toairport, anDallas ~~evolving~~airport, and ~~unpredictable~~JFK ~~business~~international ~~model~~airport ~~and~~were ~~the~~temporarily ~~management~~closed ofon ~~growth~~or ~~and~~about ~~the~~March ~~consummation~~17, ~~and~~2020. ~~assimilation~~Our ofCasino ~~multiple~~location ~~acquisitions.~~was ~~These~~temporarily ~~factors~~closed ~~raise~~on ~~substantial~~or ~~doubt~~ about ~~our~~March ~~ability~~17, to2020 ~~continue~~when asthe aMohegan ~~going~~Sun ~~concern~~Casino itself was closed. We laid off Toall ~~address~~of ~~these~~our ~~risks,~~Bluwire weemployee/contractors ~~must,~~except ~~among~~for ~~other~~two ~~things,~~members ~~increase~~of ~~our~~the ~~customer~~headquarters ~~base,~~staff ~~implement~~who ~~and~~continued ~~successfully~~to ~~execute~~source ~~our~~innovative ~~business~~products ~~and~~for ~~marketing~~our ~~strategy~~stores when they re-open, ~~respond~~some toof ~~competitive~~which ~~developments,~~will ~~and~~be ~~attract,~~uniquely ~~retain~~desired ~~and~~by ~~motivate~~consumers ~~qualified~~due ~~personnel.~~to ~~There~~changing ~~can~~buying behabits due to COVID-19. noWe ~~assurance~~have ~~that~~since weaccepted ~~will~~the beresignation ~~successful~~of inall ~~addressing~~of ~~such~~the ~~risks,~~employees and ~~the~~contractors ~~failure~~of toour docasino sostore ~~can~~and have arebuilt ~~material~~the ~~adverse~~team ~~effect~~in anticipation onof ~~our~~future ~~business~~store ~~prospects,~~operations. The financial ~~condition~~effects ~~and~~of ~~results~~these ofclosures ~~operations~~are reflected in the Management Discussion and Analysis.

The Cares Act and the Payroll Protection Program SBA Loans (PPP Loans)

As a subsequent event, the Company has applied for PPP Loans for all of its U.S. operating Companies, and is in the process of analyzing if it would qualify for similar governmental assistance for its reduced operating unit in Japan (12 Japan Ltd). The Company has qualified for an aggregate of $294,882 of PPP Loans for its operating companies. These funds are being used to re-hire previously laid off personnel where appropriate and hire new personal that management believes better fits the post COVID-19 shut down environment. The Company is hiring personnel that will help the operating units generate revenues in a more contactless environment and to create changes to our cutting-edge retail software to help our stores and well as other retailers attract consumers in this new environment. The Cares Act provides very favorable terms for the repayment or forgiveness of the monies lent to qualifying businesses like ours. While the final rules are not yet formalized, the initial guidelines allow for complete forgiveness for monies spent on approved expenses such as payroll and labor with non- approved expenses to be paid back over 2 years at 1% annual interest with no payments for the first 6 months after receipt. No collateral was pledged for these loans and management did not have to sign any personal guarantees. Management will make every effort to utilize these PPP loan funds in a manner that may allow for complete forgiveness of the loan(s) while providing the best opportunity for the continuity and growth of the business.

During the COVID-19 shutdown period management sourced new products and vendors for its businesses and is now optimistic that it will shortly obtain additional funding of debt or preferred equity to grow our business.

Reliance on the SEC’s March 25, 2019 order regarding extension of filing deadlines due to COVID-19

As a direct result of the COVID-19 shutdowns and travel restrictions, the SEC provided for any public company impacted by COVID-19 to extend its filing of its 10-K or 10-Q or other required filings for 45 additional days and would still be eligible for the further normal extensions of 15 and 5 days respectively. As noted herein, we have been extremely impacted on an operational level, delayed in obtaining information from our foreign subsidiaries in Hong Kong and Japan, as well as being delayed in our ability to obtain capital for the professional fees to complete our filings, and further compromised by the fact that our CEO and CFO are both restricted from travel to the United States at this time as they are in Hong Kong and Japan respectively. Therefore, we filed for a 45 day and 15-day NT10–KA Filing extensions in reliance on the March 25, 2020, order and have further been in communication with the SEC for additional consideration for timely filing under these extraordinary circumstances.

However, due to cash restraints with all of our closed operations, the Company was unable to meet any deadline to complete this audit and the quarterly reports (forms 10-Q) in a timely fashion during 2020 and the first quarter 2021. The Company retained auditor BF Borgers on April 28, 2021 and will complete all delinquent filings in the second quarter 2021. With our businesses reopening and revenues being generated, Management believes that it can continue to make timely filings in the future.

Going Concern

The Company’s financial statements are prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. Since the Company has not generated significant revenue or gross profits adequate to cover operating costs, has negative cash flows from operations, and negative working capital, the Company has included a reference to the substantial doubt about our ability to continue as a going concern. Inin connection with our consolidated financial statements for the period ended September 30, ~~2019~~2020. Our total accumulated deficit as of September 30, ~~2019~~2020 was approximately $~~26.6~~24 million.

The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. Management’s plans to continue as a going concern include raising additional capital through sales of equity securities and borrowing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. If the Company is not able to obtain the necessary additional financing on a timely basis, the Company will be required to delay, reduce the scope of or eliminate one or more of the Company’s research and development activities or commercialization efforts or perhaps even cease the operation of its business. The ability of the Company to continue as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable operations. There is substantial doubt about the ability of the Company to continue as a going concern for one year from the issuance of the accompanying consolidated financial statements. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Listing Status

On July 11, 2018, the Company’s stock began trading on the OTC QB market under the symbol ‘RETC’ after successfully meeting the listing standards for that exchange. During the company the Company lost this qualification due to its stock price which was below the exchange standard of $0.01. Currently the Company’s stock is quoted on the OTC Pink marketplace.

As a subsequent event, on October 18, 2019, the Company’s 1 for 100 Reverse Stock split became effective. Therefore, as of October 31, 2019, there are 25,410,374 common shares of stock outstanding and 8 billion common shares authorized.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United ~~States~~ States requires us to make estimates and judgments that affect our reported assets, liabilities, and expenses and the disclosure of contingent assets and liabilities. We use assumptions that we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. We believe there have been no significant changes in accounting policies for the period ended September 30, ~~2019~~2020. See Note 43 to the consolidated statements in this Quarterly Report for a complete discussion of our significant accounting policies and estimates.

Recently Issued Accounting Standards

The Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its consolidated results of operation, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its consolidated financial statements. See Note 3 to the consolidated statements in our ~~2018~~2019 Annual Report for a complete discussion of our significant accounting policies and estimates.

Off-Balance Sheet Transactions

At September 30, ~~2019~~2020, the Company did not have any transactions, obligations or relationships that could be considered off-balance ~~sheet~~ sheet arrangements.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

As a smaller reporting company, we are not required to provide the information required by this Item 3.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our ~~management~~Management, with the participation of our Chief Executive Officer and Chief Accounting Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Chief ~~Executive~~ Executive Officer and Chief Accounting Officer concluded that our disclosure controls and procedures, as of September 30, ~~2019~~ 2020 were not effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Accounting Officer, as appropriate to allow timely decisions regarding disclosure. A control system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Management’s Quarterly Report on Internal Control over Financial Reporting

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

In connection with our completed acquisitions of significant operating companies during the first three quarters of 2019, Management has begun to institute some financial controls. The first area management is improving is cash and expense payment controls. Management has implemented a segregation of duties and authorities in this area:

1. Revenues are deposited in 98% of all cases electronically ~~wither~~whether by our credit card processors or factors. 2. The accounting department does not make any direct payments and all invoices are approved by the management of the operating companies, reviewed by the accounting department and representatives of senior management. 3. Weekly, the managers of each operating company reviews with representatives of senior management which payments are to be made from the accounts payable listing. 4. The payments are then made by a third -party payments person directed by senior management and recorded by the accounting department. Payments are mostly made by check, or automatic bill payment from the bank. 5. The accounting department then verifies and reports to senior management that the payments were made as approved by serious management. 6. Future improvements as the accounting staff will grow will be to segregate posting of entries from the person who can make journal entries.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

Our management, with the participation of the principal executive officer and principal financial officer, evaluated the effectiveness of of the Company’s internal control over financial reporting as of ~~September~~December 3031, 2019. In making this assessment, our management ~~used~~ used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal ~~Control~~ Control – Integrated Framework. Based on the criteria established by COSO, management concluded that the Company’s internal control over financial reporting was not effective as of September 30, ~~2019~~2020 as a result of the identification of the material weaknesses described below.

35Specifically, management identified the following control deficiencies: (1) The Company has not properly segregated duties as two or three individuals initiate, authorize, and complete all transactions. The Company has not implemented measures that would prevent the individuals from overriding the internal control system; (2) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines and (3) the Company has installed accounting software that does not prevent erroneous or unauthorized changes to previous reporting periods and does not provide an adequate audit trail of entries made in the accounting software.

~~Specifically,~~Our ~~management~~Company ~~identified~~plans ~~the~~to ~~following~~take ~~control~~steps ~~deficiencies:~~to ~~(1)~~enhance ~~The~~and ~~Company~~improve ~~has~~the ~~not~~design ~~properly~~of ~~segregated~~our ~~duties~~internal ascontrols ~~one~~over orfinancial ~~two~~reporting. ~~individuals~~During the period covered ~~initiate,~~by ~~authorize~~this ~~and~~annual ~~complete~~report ~~all~~on ~~transactions.~~Form ~~The~~10-K, ~~Company~~we ~~has~~have not ~~implemented~~been ~~measures~~able ~~that~~to ~~would~~remediate ~~prevent~~ the ~~individuals~~material weaknesses identified above. To remediate such weaknesses, ~~from~~we ~~overriding~~plan to implement the ~~internal~~following ~~control~~changes ~~system.;~~during our fiscal year ending December 31, 2020: (2i) ~~insufficient~~adopt sufficient written policies and procedures for accounting and financial reporting ~~with~~, ~~respect~~(ii) tocomplete the ~~requirements~~implementation of QuickBooks Enterprise solution for consistent recording and ~~application~~accounting of ~~both~~all UStransactions ~~GAAP~~across ~~and~~all ~~SEC~~business ~~guidelines~~groups ~~and~~started ~~(3)~~in ~~the~~2019. ~~Company~~The ~~has~~remediation ~~installed~~efforts ~~accounting software~~set ~~that~~out ~~does~~are ~~not~~largely dependent ~~prevent~~upon ~~erroneous~~our orsecuring ~~unauthorized~~additional ~~changes~~financing to ~~previous~~cover ~~reporting~~the ~~periods~~costs ~~and~~of ~~does~~implementing ~~not~~the ~~provide~~changes anrequired. ~~adequate~~If we are unsuccessful in securing ~~audit~~such ~~trail~~funds, ofremediation ~~entries~~efforts ~~made~~may be adversely affected in ~~the~~a ~~accounting~~material ~~software~~manner.

~~Our~~Accordingly, ~~Company~~while ~~plans~~the toCompany ~~take~~has ~~steps~~identified tocertain ~~enhance~~material ~~and~~weakness ~~improve~~in ~~the~~its ~~design~~system of ~~our~~ internal ~~controls~~control over financial reporting~~. During the period covered by this quarterly report on Form 10-Q~~, weit ~~have~~believes ~~not been able to remediate the material weaknesses identified above. To~~that ~~remediate~~is ~~such~~has ~~weaknesses,~~taken wereasonable ~~plan~~steps to ~~implement~~ascertain that the ~~following~~financial ~~changes~~information ~~during~~contained ~~our~~in ~~fiscal~~this ~~year~~report ~~ending~~is ~~December~~in ~~31,~~accordance ~~2018:~~with ~~(i)~~generally ~~appoint~~accepted ~~additional~~accounting ~~qualified~~principles ~~personnel~~generally toaccepted ~~address~~in ~~inadequate~~the ~~segregation~~United States of ~~duties~~America. ~~and~~Management ~~ineffective~~has ~~risk~~determined ~~management;~~that ~~and~~current ~~(ii)~~resources ~~adopt~~would ~~sufficient~~be appropriately ~~written~~applied ~~policies~~elsewhere and ~~procedures~~when ~~for~~resources accounting and financial reporting. The remediation efforts set out are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such fundspermit, ~~remediation~~they ~~efforts~~will ~~may~~alleviate bematerial ~~adversely~~weaknesses ~~affected~~through invarious ~~a material manner~~steps.

Accordingly, while the Company has identified certain material weakness in its system of internal control over financial reporting, it believes that is has taken reasonable steps to ascertain that the financial information contained in this report is in accordance with accounting principles generally accepted in the United States of America. Management has determined that current resources would be appropriately applied elsewhere and when resources permit, they will alleviate material weaknesses through various steps.

Changes in Internal Control Over Financial Reporting

As of September 30, ~~2019~~2020, there were no changes in the Company’s internal controls over financial reporting known to the Chief ~~Executive~~ Executive Officer or the Chief Accounting Officer that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II

Item 1. Legal Proceedings

~~The~~During ~~Company~~the ~~was~~ordinary ~~not~~course ~~currently~~of abusiness, ~~party~~and toas ~~any~~a ~~pending~~result ~~legal~~of ~~proceedings~~quickly incompleting ~~the~~multiple ~~end~~acquisitions ~~quarter~~ and ~~subsequently~~the ~~involved~~business indisruption ~~any~~due ~~legal~~to ~~proceedings~~the Covid-19 ~~that~~Pandemic itthe ~~believes~~Company ~~will~~has ~~have~~become ainvolved ~~material~~in ~~adverse~~some ~~effect on its business or financial condition. The Company may~~litigation, ~~however,~~has besome ~~subject to~~disputed ~~various~~ claims and ~~legal~~possible ~~actions~~contingencies ~~arising~~as ~~in the ordinary course of business from time to time.~~follows:

OnClaims ~~July 25, 2019 the Company was served with a lawsuit from Auctus Fund, LLC (“Auctus”) alleging a default under their convertible promissory note with an original amount due of $100,000~~ and claiming to now be owned $ 482,509 including principal, Interest, damages, defaults and other costs. Management believes that this is a frivolous lawsuit directly related to the fact that Auctus ran out of reserve shares because of failure to act in a timely fashion to increase their reserve shares through the Company’s transfer agent. Management believes that this will be easily resolved as soon as more reserve shares are available. The Company currently owe’s approximately $40,000 in principal to Auctus.Litigation:

~~On August~~● ~~26,~~Auctus ~~2019,~~Fund ~~the~~Management ~~Company~~(“Auctus”) ~~reached~~vs. ~~preliminary~~12 ~~settlement~~ReTech ~~with~~Corporation. Auctus ~~Fund,~~Filed ~~LLC~~suit toin ~~their~~August ~~lawsuit~~2019 ~~served~~claiming onbreach ~~July~~of ~~25,~~contract ~~2019~~on ~~(“Auctus”). While~~a ~~Auctus~~convertible ~~had~~promissory ~~alleged~~note adated ~~default~~April ~~under~~25, ~~their~~2018, ~~convertible~~which ~~promissory~~had ~~note~~a ~~with~~remaining anprincipal ~~original~~balance ~~amount due~~ of ~~approximately~~nearly $40,000 ~~and~~. ~~claiming~~Auctus toclaimed ~~now~~damages betotaling ~~owned~~over $ 482,~~509~~000. ~~including~~The ~~principal,~~Company ~~Interest,~~had ~~damages,~~entered ~~defaults~~into ~~and~~a ~~other~~settlement ~~costs~~agreement awith ~~settlement~~Auctus ~~was~~that ~~reached whereby~~required the Company ~~has~~to ~~agreed~~make toa ~~pay~~cash ~~only~~payment of $~~120~~117,~~375.~~000 ~~Management~~and ~~believes~~which ~~that~~was itdependent ~~will~~on ~~continue~~the toCompany ~~work~~receiving ~~directly~~funding ~~with~~from ~~Auctus~~a ~~management to~~foreign ~~either~~investor. ~~pay~~That investment did not occur, and the ~~amount~~Company ~~agreed~~was orunable ~~now~~to ~~that~~perform. ~~the~~Upon ~~reverse~~information ~~split~~and ~~has~~belief, ~~taken~~management ~~effect~~believes ~~provide~~that Auctus ~~with~~will ~~sufficient~~at ~~stock~~some topoint ~~leach~~re-institute ~~out stock~~that ~~sales~~lawsuit. toManagement ~~repay~~has ~~this~~reserved ~~obligation.~~on ~~However~~its itfinancial ~~should~~statements bea ~~noted~~sum ~~that~~in ~~management~~excess ~~has~~of ~~created~~$482,000 ain ~~reserve~~regards ~~for~~to ~~the~~this ~~full~~claim. ~~amount~~To of the ~~lawsuit~~best of ~~$482~~management’s knowledge,~~509~~ Auctus has not taken other actions.

●

Bellridge Capital, LP, one of the Company’s convertible debt providers has sued the Company for non-performance and has obtained a default judgment in the amount of $214,195.74 in the southern district of New York. The Company maintains that service of process is defective and the Company will also assert lack of jurisdiction if any collection effort is ever undertaken among other potential legal cleans and defenses

●

Tessco Technologies V Bluwire filed suit in Maryland. The Company has not been properly served and if served would dispute jurisdiction as well as other defenses on behalf of its Bluwire subsidiary.

●

Item 1A. Risk Factors

The Company’s investors should consider the risks that could affect its business as set forth in Item 1A, Risk Factors, of its most recent Annual Report on Form 10-K ~~for the year ended December 31, 2018~~.

The effectiveness of our disclosure controls and procedures and internal control over financial reporting

The Company has a limited number of personnel which may lead to a risk limited controls and procedures. As a result of the aforementioned reason there is a limit on the amount of internal controls during our financial reporting process.

The Company’s Chief Financial Officer is currently the Chief Financial Officer of another company

The Company Chief Financial Officer is also the Chief Financial Officer of another business and therefore may have limited time to work on the business and may experience time conflicts.

Our directors may lack of an independent director on your Board of Directors

Our directors are also on our Board of Directors and as a result the Board of Directors may lack some independence.

The Chief Executive Officer and the ability to control the Company

The Company’s Chief Executive Officer is also one of the most significant shareholders of the Company and as a result may control the Company.

Small customer base makes onus dependent on a few customers

The Company currently has a small base of customers from which it derives its revenue. This could adversely affect the Company as it is dependent on a few customers for its current revenue.

There are a number of shares of common stock underlying the outstanding preferred stock and convertible notes

The Company has outstanding preferred stock and convertible notes which are potentially convertible into common stock. Should all of these convertible instrument convert into common stock, hethe number of common shares issued would lead to substantial dilution of the current common shareholders.

Although we have attempted to discuss meaningful factors, our investors need to be aware that other factors and risks may become important in the future. New risks may emerge at any time. We cannot predict such risks or estimate the extent to which they may affect our operations and financial performance. Investors should carefully consider the discussion of risks and the other information included in this Quarterly Report on Form 10-Q, including the Cautionary Information Regarding Forward-Looking Information provided above in Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

3741

Item 2. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. ~~Mine~~Other ~~Safety Disclosures~~Information

Not applicable.

Item 5. Other Information

None.

Item 65. Exhibits

Number		Description of Exhibit

31.1		8K- Amendment to Articles of Incorporation filed October 18, 2019.

31.2		8K- Share Exchange Agreement between 12 ReTech and Bluwire Group, LLC filed on October, 16 2019.

3842

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.

12 ReTech Corporation

Date: November 19, 2019	By:	/s/ Angelo Ponzetta
Date: June 28, 2021	By:	/s/ Angelo Ponzetta
		Angelo Ponzetta
		Chief Executive Officer

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.

12 ReTech Corporation

Date: November 19, 2019	By:	/s/ Angelo Ponzetta
Date: June 28, 2021	By:	/s/ Angelo Ponzetta
		Angelo Ponzetta
	Its:	~~Chairman,~~Chief ~~Director,~~Executive ~~President~~Officer,
		Chief Executive Officer,
		(Principal Executive Officer)
	By:	/s/ Daniele Monteverde
		Daniele Monteverde
	Its:	~~Director~~Chief Financial Officer
		Secretary
		Treasurer
		Chief Operating Officer
		(Principal Accounting Officer)
		(Principal Financial Officer)

3943

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