Annual Report (10-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended: December 31, 2017

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

For the transition period from ________________ to ________________

Commission File No. 333-178037

PAZOO, INC.

(Exact name of registrant as specified in its charter)

Nevada		27-3984713
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

34 DeForest Rd, Unit 9 East Hanover, NJ		07936
(Address of Principal Executive Offices)		(Zip Code)

(973) 884-0136

(Registrant's Telephone Number, Including Area Code)

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

Title of each class	Trading Symbol(s)	Name on each exchange on which registered
Common Stock	PZOO	OTC Bulletin Board

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

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

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

Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☐ No ☒

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

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

As of the most recently completed second fiscal quarter (i.e. June 30, 2017) the aggregate market value of the voting and non-voting common equity held by non-affiliates of the Company was $70,956. The aggregate market share was calculated by using the average of the bid and ask price of such common equity as of June 30, 2017.

2,688,214,838 shares of common stock, par value $0.001 per share, outstanding as of December 7, 2020.

TABLE OF CONTENTS

		Page
PART I

Item 1.	Business	3
Item 1A.	Risk Factors	6
Item 1B.	Unresolved Staff Comments	10
Item 2.	Properties	10
Item 3.	Legal Proceedings	10
Item 4.	Mine Safety Disclosures	10
PART II

Item 5.	Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	11
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operation	11
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 8.	Financial Statements and Supplementary Data	16
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	17
Item 9A.	Controls and Procedures	17
Item 9B.	Other Information	17
PART III

Item 10.	Directors, Executive Officers and Corporate Governance.	18
Item 11.	Executive Compensation	20
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	21
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	21
Item 14.	Principal Accounting Fees and Services	22
PART IV

Item 15.	Exhibits and Financial Statement Schedules	23

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PART I

Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements include, but are not limited to, statements regarding: our core strategy; the growth of the marijuana testing market; liquidity; free cash flows; revenues; net income; legal costs; operating cash flows; stock price volatility; timing of facilities construction; nature of our licensing agreements; future governmental regulation; obtaining additional capital; significance of future contractual obligations; domestic expansion. These forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included throughout this filing and particularly in Item 1A: "Risk Factors" section set forth in this Annual Report on Form 10-K. Forward-looking statements include those that use forward-looking terminology, such as the words "anticipate," "believe," "estimate," "expect," "intend," "may." "project," "plan," ''will,'' "shall," "should," and similar expressions, including when used in the negative. Although we believe that the expectations reflected in these forward-looking statements are reasonable and achievable, these statements involve risks and uncertainties and we cannot assure you that actual results will be consistent with these forward-looking statements. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to revise or publicly release any revision to any such forward-looking statement, except as may otherwise be required by law.

Item 1. Business

Organization

Pazoo, Inc. ("Pazoo"), was incorporated in Nevada on November 16, 2010 under the name "IUCSS, Inc." A name change from IUCSS, Inc. to Pazoo occurred on May 9, 2011. As of October 31, 2020 there were 2,688,214,838 shares of common stock outstanding. There is also the following Preferred Stock issued and outstanding on September 18, 2020: Series A – 215,139; Series B – 3,240,000; and Series C – 3,787,709 shares outstanding. All Series of Preferred Stock, under certain circumstances, convert into Pazoo Common Stock. Copies of the filed Certificates of Designations, as amended, can be obtained from the Nevada Secretary of State or the Company.

Our principal executive offices are located at 34 DeForest Ave, Unit 9, East Hanover, New Jersey 07936. Our telephone number is (855) PAZOO-US. Our internet address is www.pazoo.com. Information on our website does not constitute part of this Annual Report.

On March 30, 2016, the Company effectuated its Definitive 14C filing through FINRA resulting in a reverse split to the common stock of a ratio of 100:1. All fractional shares were rounded up. The total amount of authorized common stock, and all Preferred shareholders were unaffected by the reverse split.

In 2017, the Company filed a Form 14-C in order to effectuate a 1-for-250 reverse stock split of the outstanding common stock (the "Reverse Stock Split") whereby every two hundred and fifty (250 shares of outstanding common stock decreases to one (1) share of common stock. The reverse stock split of 1-for-250 went into effect April 26, 2017. The impact of this reverse stock split has been retroactively applied to the financial statements and the related notes.

In 2018, the Company filed a Form 14-C in order to increase its authorized shares from 3,000,000,000 to 40,000,000,000. In March 2019, the Company withdrew the Form 14-C due to financial constraints.

Our Company

We are a health and wellness company. Presently, our only asset is MA & Associates, LLC, a cannabis testing laboratory located in Las Vegas NV. The Company holds a 30% uncontrollable interest as of December 31, 2017. MA & Associates primary mission is to protect the public health by providing infrastructure and analytical services to legally authorized distributors and producers of cannabis and to regulators tracking their operations. The cannabis industry is heavily regulated on the Federal, State and Local levels and the Company is subject to changing regulation and enforcement. As of December 31, 2017, the cannabis testing laboratory in Denver, Colorado is closed and the Company does not have any plans to re-open the facility. As of December 31, 2017, MA & Associates, LLC was not open and non-revenue generating.

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In the fourth quarter of 2017, the Company sold a 70% Membership Interest in its wholly owned subsidiary (MA & Associates, LLC) in consideration of retirement of approximately $1,000,000 in the Company’s debt and approximately $500,000 in cash (of which $117,894 was funded as of December 31, 2017). The buyer also has an option to buy an additional 10% for 18 months from the closing at a 10% premium to the 70% purchase. The option to purchase the additional 10% has been extended to November 22, 2020 (i.e. three years from the date of the sale of the initial 70% interest). The Company will account for their remaining 30% interest as an equity level investment going forward. On June 30, 2020, the Company sold the remaining 10% equity interest from the November 22, 2017 Membership Interest Agreement in MA & Associates for an aggregate total of $226,388. The total amount was in the form of retirement of the loans extended by the Buyer as designated by Buyer in Buyer’s sole and absolute discretion, including applicable interest, default interest, late charges, and other obligations accrued. The Company still maintains a 20% equity interest in MA & Associates.

Line of Business

We currently have a minority interest one line of business relating to and revolving around the cannabis industry; at this time no significant revenue has been derived from this source.

Testing Facilities. We entered this arena through our acquisition of a 100% equity stake in MA & Associates, LLC in order to set up two testing locations within the State of Nevada. MA & Associates, LLC was launched in September of 2013 to provide quality control services to the medical cannabis industry. MA & Associates, LLC's primary mission is to protect the public health by providing infrastructure and analytical services to legally authorized distributors and producers of cannabis and to regulators tracking their operations.

MA & Associates, LLC's primary customer base includes all of the licensed cannabis cultivators, in the State of Nevada, who are required by law to have their products tested before they can be transferred to the dispensaries. Furthermore, MA has acquired all of the Membership interest in Harris Lee Holdings, LLC. Harris Lee Holdings, LLC was set up to take the MA model and testing operations to additional states above and beyond Nevada either in direct testing laboratories or through licensing the testing protocol. As such, MA is in a unique position to provide the mandated health and safety testing in this burgeoning industry. Lastly, Harris Lee Holdings, LLC, due to Colorado residency requirements, entered into an advisory agreement with Harris Lee Colorado, LLC, Harris Lee Holdings, LLC has sub-licensed the testing protocols to Harris Lee Colorado, LLC in exchange for a management fee for each test conducted. The Colorado MED approved the transfer of management of an existing laboratory, operating as Steep Hill Colorado, to Harris Lee Colorado, LLC (a related party) and Harris Lee Holdings, LLC has derived management fees from Harris Lee Colorado, LLC in the year ending December 31, 2016. All 2016 revenue was derived from these related-party management fees for the year ended December 31, 2016. However, because of the failure to transfer the MED license to Harris Lee Colorado, LLC, the Denver laboratory was closed by the end 2016. As of December 31, 2017, MA & Associates was not yet operational but still ramping up staff, policies, procedures and scientific methodologies. As of August 24, 2020, MA & Associates is operational and fully staffed.

Growth Strategy

We plan to grow our assets and earnings per share by employing the following business strategies, all of which are dependent on securing further funding through debt and/or equity capital infusions:

Continue to support MA & Associates LLC and opportunistically pursue strategic acquisitions. We plan to selectively pursue strategic, investments in, or acquisitions of, companies (like MA & Associates, LLC and Harris Lee Holdings, LLC) and assets that are complementary to our existing line of business.

Pazoo will continue to support and contribute to the growth strategy of MA & Associates LLC, which is licensed by the State of Nevada and the city of Las Vegas to test all aspects of potency, purity, and other criteria of cannabis products to determine an independent profile for any cannabis product. MA & Associates sales continue to grow and Pazoo continues to support selling efforts.

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Marketing and Promotion

To achieve our marketing goal and objective of being the leading provider of pharmaceutical testing, health and wellness content, services and products, our marketing strategy has focused on the following:

	·	Increase testing revenue through sales employees and independent sales representatives;
	·	Strengthen the Pazoo.com brand name; and
	·	Continue to build strong brand loyalty.

Sales and Employee Agents

Contract with independent sales agents, on a commission basis, employees to drive testing sales to the laboratories in Nevada.

On-Line Marketing

	·	Search Engine Optimization (SEO)
	·	Social media (Facebook, Twitter, Instagram, YouTube)

Brick and Mortar Marketing and Promotion

	·	Take advantage of market relationships from suppliers and retailers
	·	Take advantage of combined sales efficiencies from online as well as off-line
	·	Build strong relationships with suppliers from both a sales standpoint as well as a promotional standpoint

Additional infusions of capital (either through debt or equity) will be required in order for the Company to meet its marketing goals and objectives.

Cannabis Testing Industry Trends

The marijuana testing industry will continue to increase as it is just in its infancy. Of the 50 US States, 47 have enacted some form of medical marijuana laws. The following States have legalized the recreational use of marijuana: Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, and Washington as well as the District of Columbia. Of the States that have enacted some form of medical marijuana laws, all have some type of testing guidelines. The State of Nevada has been recognized as the State with the strictest laboratory testing rules and requirements and is becoming the model for cannabis laboratory testing requirements for the rest of the county.

Competition

Pharmaceutical Testing. Inasmuch as this industry is in its infancy, it is clear that there is currently competition and if the industry goes as we anticipate, new entrants to the market will be inevitable. However, there are certain barriers to entry which clearly benefit MA & Associates, LLC. For example:

	1.	Cost of establishing a testing laboratory. The cost to setting up a fully operational laboratory, depending on the variety and number of tests the laboratory can do, can range from $1,000,000 to $3,000,000. Pazoo has the advantage of going through this process with MA & Associates, LLC and has built relationships with equipment suppliers for the lease and/or purchase of the equipment needed to run a laboratory.
	2.	The Need for a Proven Set of Testing protocols. Nevada boasts the most stringent testing laws in the nation and we are developing our own standard testing protocols by which to operate in this state and subsequently in other states in the future.
	3.	Limited Number of Licenses to be Issued. Each state has its own regulations for the licensing of testing laboratories. Many states, such as Nevada, limit the number of licenses which may be issued. Accordingly, if the maximum number of licenses has been issued, there would be a complete bar to the entry of new competitors.

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Item 1A. Risk Factors

General Risks Relating to the Business

We have only a limited operating history. We have had only limited sales and revenue during our operating history. We have never been profitable. We cannot therefore forecast with any accuracy the results of operations for the next fiscal year, nor predict our need for cash. Our revenues may not grow as anticipated, and revenues are dependent on consumer acceptance of our products and services and website, our ability to market our products and services and website, the effect of competition, and general economic factors beyond our control.

Regulation of Pharmaceutical Testing Facilities. There are stringent regulatory risks and guidelines. The risk factors set forth below relate to risks related to testing facilities in the State of Nevada, where MA & Associates, LLC, our 20% equity investee¹ , has been granted a State license as a testing facility.

	1.	*Local Regulatory Risk.* The primary local regulatory risk faced by medical marijuana facilities is that of the local municipality enacting a moratorium on the issuance of business licenses. Some of the local municipalities have gone back and forth regarding whether and what categories of medical marijuana facilities they will allow in their jurisdiction. Municipalities from the City of Henderson to the City of North Las Vegas have vacillated between a full moratorium, a moratorium on dispensaries only, and no moratorium at all.

	2.	*State Regulatory Risk.* On November 7, 2000, 65% of Nevada voters passed 'Question 9' which went into effect October 1, 2001. Question 9 amended the States' constitution recognizing the medical use of marijuana and removing the state-level criminal penalties for the use, possession and cultivation of marijuana by qualified patients. Nevada marijuana laws allow the legal use of medical marijuana by a patient with 'written documentation' and a 'registry identification card'. The will of the people was codified in Nevada Revised Statute 453A. Despite the fact that the people of the State of Nevada expressed their wish to legalize medical marijuana in 2000, NRS 453A was not fully adopted until April 1, 2014.

	3.	*Federal Regulatory Risk.* Due to the current federal laws prohibiting the use of cannabis for any reason, medical or non-medical, the regulatory risks associated with federal enforcement of the Controlled Substances Act are the most serious threat to the medical marijuana industry as a whole. Fortunately, the U.S. Department of Justice (USDOJ) thus far has taken a stance on the matter that it will enforce the law to prevent sales to minors, sales by criminal enterprises or gangs, interstate commercial trade of medical marijuana, and medical marijuana as a pretext for trafficking other controlled substances. The USDOJ has specifically declared that it will leave all other enforcement to the States to enforce as they see fit and in compliance with their own State laws. There is no guaranty that this policy of limited enforce by the USDOJ will continue in the future. Strict enforcement of the Controlled Substances Act could have a crippling effect on the marijuana industry. Additionally, because of the uncertainly in the future outcome of federal enforcement, many conventional lenders and banking institutions are reluctant to make large investments, or create banking and clearing relationships in this industry.

Federal regulation and enforcement may adversely affect the implementation of medical marijuana laws and regulations may negatively impact our revenues and profits. Currently, there are 47states plus the District of Columbia that have laws and/or regulations that recognize, in one form or another, legitimate medical uses for cannabis and consumer use of cannabis in connection with medical treatment. Many other states are considering similar legislation. Conversely, under the Controlled Substance Act (the "CSA"), the policies and regulations of the Federal government and its agencies are that cannabis has no medical benefit and a range of activities including cultivation and the personal use of cannabis is prohibited. Unless and until Congress amends the CSA with respect to medical marijuana, as to the timing or scope of any such potential amendments there can be no assurance, there is a risk that federal authorities may enforce current federal law, and we may be deemed to be possession of marijuana in violation of federal law with respect to MA & Associates, LLC's business operations. Active enforcement of the current federal regulatory position on cannabis may thus indirectly and adversely affect our revenues and profits. The risk of strict enforcement of the CSA in light of Congressional activity, judicial holdings and stated federal policy remains uncertain.

The U.S. Supreme Court declined to hear a case brought by San Diego County, California that sought to establish federal preemption over state medical marijuana laws. The preemption claim was rejected by every court that reviewed the case. The California 4th District Court of Appeals wrote in its unanimous ruling, "Congress does not have the authority to compel the states to direct their law enforcement personnel to enforce federal laws." However, in another case, the U.S. Supreme Court held that, as long as the CSA contains prohibitions against marijuana, under the Commerce Clause of the United States Constitution, the United States may criminalize the production and use of homegrown cannabis even where states approve its use for medical purposes.

_______________

¹ See Subsequent Events for the reduction in equity from 30% to 20%.

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In an effort to provide guidance to federal law enforcement, the Department of Justice (the "DOJ") has issued Guidance Regarding Marijuana Enforcement to all United States Attorneys in a memorandum from Deputy Attorney General David Ogden on October 19, 2009, in a memorandum from Deputy Attorney General James Cole on June 29, 2011 and in a memorandum from Deputy Attorney General James Cole on August 29, 2013. Each memorandum provides that the DOJ is committed to the enforcement of the CSA, but, the DOJ is also committed to using its limited investigative and prosecutorial resources to address the most significant threats in the most effective, consistent and rational way.

The August 29, 2013 memorandum provides updated guidance to federal prosecutors concerning marijuana enforcement in light of state laws legalizing medical and recreational marijuana possession in small amounts.

The memorandum sets forth certain enforcement priorities that are important to the federal government:

	·	Distribution of marijuana to children;
	·	Revenue from the sale of marijuana going to criminals;
	·	Diversion of medical marijuana from states where it is legal to states where it is not;
	·	Using state authorized marijuana activity as a pretext of other illegal drug activity;
	·	Preventing violence in the cultivation and distribution of marijuana;
	·	Preventing drugged driving;
	·	Growing marijuana on federal property; and
	·	Preventing possession or use of marijuana on federal property.

The DOJ has not historically devoted resources to prosecuting individuals whose conduct is limited to possession of small amounts of marijuana for use on private property but has relied on state and local law enforcement to address marijuana activity.

On January 4, 2018, then Attorney General Jeffrey Sessions, rescinded the Cole Memorandum allowing the country strictly enforce the CSA in states that have laws legalizing medical marijuana and recreational marijuana. While there has been no tidal change of enforcement, without the directives set forth in the Cole Memorandum, there may be a direct and adverse future impact to our business and our revenue and profits.

We could be found to be violating laws related to medical cannabis. The risk of strict enforcement of the CSA in light of the rescission of the Cole Memorandum, Congressional activity, judicial holdings and stated federal policy remains uncertain. Because we do not currently cultivate, produce, sell or distribute any medical marijuana, but we do test marijuana for growers and dispensaries and may be deemed to facilitate the selling or distribution of medical marijuana in violation of federal law..

Variations in state and local regulation and enforcement in states that have legalized medical cannabis that may restrict marijuana-related activities, including activities related to medical cannabis may negatively impact our revenues and profits. Individual state laws do not always conform to the federal standard or to other states laws. A number of states have decriminalized marijuana to varying degrees, other states have created exemptions specifically for medical cannabis, and several have both decriminalization and medical laws. Ten states, Alaska, California, Colorado, Maine, Massachusetts, Michigan Nevada, Oregon, Vermont and Washington, and Washington D.C. have legalized the recreational use of cannabis. Variations exist among states that have legalized, decriminalized or created medical marijuana exemptions. For example, Alaska and Colorado have limits on the number of marijuana plants that can be homegrown. In most states, the cultivation of marijuana for personal use continues to be prohibited except for those states that allow small-scale cultivation by the individual in possession of medical marijuana needing care or that person's caregiver. Active enforcement of state laws that prohibit personal cultivation of marijuana may indirectly and adversely affect our business and our revenue and profits.

Marijuana remains illegal under Federal law. Marijuana is a schedule-I controlled substance and is illegal under federal law. Even in those states in which the use of marijuana has been legalized, its use remains a violation of federal law. Since federal law criminalizing the use of marijuana preempts state laws that legalize its use, strict enforcement of federal law regarding marijuana would likely result in our inability to proceed with our business plan.

Laws and regulations affecting the medical marijuana industry are constantly changing, which could detrimentally affect our proposed operations.

Local, state and federal medical marijuana laws and regulations are broad in scope and subject to evolving interpretations, which could require us to incur substantial costs associated with compliance or alter certain aspects of our business plan which requires additional funding to complete. In addition, violations of these laws, or allegations of such violations, could disrupt certain aspects of our business plan and result in a material adverse effect on certain aspects of our planned operations. In addition, it is possible that regulations may be enacted in the future that will be directly applicable to certain aspects of our proposed medical marijuana businesses. We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business.

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We may not obtain the necessary permits and authorizations to operate our marijuana businesses. We may not be able to obtain or maintain the necessary licenses, permits, authorizations or accreditations, or may only be able to do so at great cost, to operate our marijuana testing businesses. In addition, we may not be able to comply fully with the wide variety of laws and regulations applicable to the marijuana industry. Failure to comply with or to obtain the necessary licenses, permits, authorizations or accreditations could result in restrictions on our ability to operate our marijuana businesses, which could have a material adverse effect on our business.

If we incur substantial liability from litigation, complaints, or enforcement actions, our financial condition could suffer. Our participation in the marijuana industry may lead to litigation, formal or informal complaints, enforcement actions, and inquiries by various federal, state, or local governmental authorities against these subsidiaries. Litigation, complaints, and enforcement actions involving these subsidiaries could consume considerable amounts of financial and other corporate resources, which could have a negative impact on our sales, revenue, profitability.

We may have difficulty accessing the service of banks, which may make it difficult for us to operate. Since the use of marijuana is illegal under federal law, there is a strong argument that banks cannot accept for deposit funds from businesses involved with the marijuana industry. Consequently, businesses involved in the marijuana industry often have difficulty finding a bank willing to accept their business. The inability to open bank accounts may make it difficult for us to operate our contemplated marijuana businesses.

The stock symbol on otcmarkets.com currently shows a stop sign symbol next to the stock. The stop sign on the website stands for “pink no information”. Pink no information companies may be unwilling or unable to provide disclosure to public markets, either to a regulator, an exchange, or OTC markets group. This occurs when the stock falls behind in its regular reporting with the SEC. Per the Company’s press release dated September 10, 2020, “Pazoo, Inc. is still focused on its current primary goal of becoming fully reporting with the SEC. The Company has been working on multiple years of financial statements concurrently and hopes to file the 2017 Form 10-K in the upcoming weeks. Thereafter it plans to continue to move on to 2018 and so forth.”

There is only a limited public trading market for the common stock. Investors may not be able to resell their common stock or stock underlying convertible debt, warrants and/or preferred stock, if at all, and thus could lose all or part of their investment. The common stock is listed on the OTC Bulletin Board under the symbol PZOO. Listing on the OTC Bulletin Board does not constitute any endorsement or approval of a listed company or its securities, and the OTC Bulletin Board does not review or monitor an issuer's activities. Our common stock is a "penny stock" (as defined in Exchange Act Rule 3a-51) which means that brokers can only buy or sell the common stock on an unsolicited basis. The penny stock rule and similar regulations will reduce the likelihood that a liquid trading market will arise for the common stock. The common stock may trade at less than the offering price. Because our stock is a "penny stock" a shareholder may find it more difficult to dispose of, or to obtain accurate quotations as to the price of, Pazoo's common stock.

In the absence of a security being quoted on NASDAQ, or the Company having $2,000,000 in net tangible assets, trading in the Common Stock is covered by Rule 15c2-6 promulgated under the Securities Exchange Act of 1934 for non-NASDAQ and non-exchange listed securities. Under such rule, broker/dealers who recommend such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or an annual income exceeding $200,000 or $300,000 jointly with their spouse) must make a special written suitability determination for the purchaser and receive the purchaser's written agreement to a transaction prior to sale. Securities are also exempt from this rule if the market price is at least $5.00 per share, or for warrants, if the warrants have an exercise price of at least $5.00 per share.

The Securities Enforcement and Penny Stock Reform Act of 1990 requires additional disclosures related to the market for penny stocks and for trades in any stock defined as a penny stock. The Commission's regulations under such Act define a penny stock to be any NASDAQ or non-NASDAQ equity security that has a market price or exercise price of less than $5.00 per share and allow for the enforcement against violators of the proposed rules. In addition, unless exempt, the rules require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule prepared by the Commission explaining important concepts involving the penny stock market, the nature of such market, terms used in such market, the broker/dealer's duties to the customer, a toll-free telephone number for inquiries about the broker/dealer's disciplinary history, and the customer's rights and remedies in case of fraud or abuse in the sale. Disclosure also must be made about commissions payable to both the broker/dealer and the registered representative, current quotations for the securities, and if the broker/dealer is the sole market-maker, the broker/dealer must disclose this fact and its control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

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While many NASDAQ stocks are covered by the proposed definition of penny stock, transactions in NASDAQ stock are exempt from all but the sole market-maker provision for (i) issuers who have $2,000,000 in tangible assets ($5,000,000 if the issuer has not been in continuous operation for three years), (ii) transactions in which the customer is an institutional accredited investor and (iii) transactions that are not recommended by the broker/dealer. In addition, transactions in a NASDAQ security directly with the NASDAQ market-maker for such securities, are subject only to the sole market-maker disclosure, and the disclosure with regard to commissions to be paid to the broker/dealer and the registered representatives.

Our financial statements have been prepared assuming that the Company will continue as a going concern. Our audited financial statements for the fiscal year ended December 31, 2017 have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements for the years ended December 31, 2017, and 2016, the continuation of the Company as a going concern is dependent upon the continued financial support through sales of the Company's common stock, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's planned business. Our independent registered public accounting firm has included an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern in their audit report for the fiscal years ended December 31, 2017, and 2016. If we are unable to raise additional capital or borrow money we will not be able to continue our operating plans. If that were to occur the Company would be forced to suspend or terminate operations and, in all likelihood cause investors to lose their entire investment.

Dependence on Key Personnel and Management of Growth. The Company's success and growth will depend upon its ability to attract and retain skilled employees and the ability of its officers and key employees to initiate and to manage successfully any growth. Any failure to do so could have a material adverse effect on the Company's operations. The Company expects that, in order to attract and retain skilled employees, the Company will have to offer to such prospective employees an equity participation in the Company. Such equity participation could dilute the existing investors' ownership interest, resulting in diminished potential earnings per share and/or book value.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential stockholders could lose confidence in our financial reporting, which would harm our business and the trading price of our stock. Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. If we cannot provide reliable financial reports or prevent fraud, our brand and operating results could be harmed. We have in the past discovered, and may in the future discover, areas of our internal controls that need improvement. We are continuing to work to improve our internal controls, including in the areas of access, segregation of duties and security. We cannot be certain that these measures will ensure that we implement and maintain adequate controls over our financial processes and reporting in the future. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.

We have reported material weaknesses in internal controls over financial reporting as of December 31, 2017 and we cannot assure you that additional material weaknesses will not be identified in the future or that we can effectively remediate our reported weaknesses. If our internal control over financial reporting or disclosure controls and procedures are not effective, there may be errors in our financial statements that could require a restatement or our filings may not be timely and investors may lose confidence in our reported financial information.

Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate the effectiveness of our internal control over financial reporting as of the end of each year, and to include a management report assessing the effectiveness of our internal control over financial reporting in each Annual Report on Form 10-K.

Our management, including our Chief Executive Officer and Acting Chief Financial Officer, does not expect that our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. Over time, controls may become inadequate because changes in conditions or deterioration in the degree of compliance with policies or procedures may occur. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

As a result, we cannot assure you that additional significant deficiencies or material weaknesses in our internal control over financial reporting will not be identified in the future or that we can effectively remediate our reported weaknesses. Any failure to maintain or implement required new or improved controls, or any difficulties we encounter in their implementation, could result in significant deficiencies or material weaknesses, cause us to fail to timely meet our periodic reporting obligations, or result in material misstatements in our financial statements. Any such failure could also adversely affect the results of periodic management evaluations regarding disclosure controls and the effectiveness of our internal control over financial reporting required under Section 404 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder. The existence of a material weakness could result in errors in our financial statements that could result in a restatement of financial statements, cause us to fail to timely meet our reporting obligations and cause investors to lose confidence in our reported financial information. Overall, there are insufficient controls in place as of December 31, 2017.

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We Have Been Unable to Stay Current on Our Periodic Filings with the Securities and Exchange Commission. Under the Exchange Act, the Company (as reporting company) is required to provide investors on a regular basis with periodic reports that contain important financial and business information. Examples of these reports include the annually filed Form 10-K or Form 20-F, and the quarterly filed Form 10-Q. Periodic reports help investors to make informed investment decisions about the purchase or sale of a reporting company's securities. The timely and complete submission of periodic reports provides investors with information to help them make informed investment decisions. The SEC's Divisions of Enforcement and Corporation Finance jointly established the Delinquent Filings Program in 2004 to encourage reporting companies that are delinquent in filing their periodic reports to submit their periodic reports or rectify deficient periodic reports. The SEC's Delinquent Filings Group in its Division of Enforcement conducts investigations into possible violations of the federal securities laws' periodic reporting obligations, and prosecutes administrative proceedings against these companies when appropriate. The Division of Corporation Finance identifies reporting companies that are delinquent filers and usually provides them with notice of their failure to submit periodic reports. If a reporting company identified as a delinquent filer fails to submit its periodic reports, Section 12(k) of the Exchange Act gives the SEC the authority to suspend trading in a security for up to 10 trading days if the SEC believes that a suspension is required to protect investors and the public interest. A trading suspension by the SEC halts the trading in a security on all trading platforms (e.g., national securities exchanges, over-the-counter market, or alternative trading systems). In addition, Section 12(j) gives the SEC the authority to revoke, or suspend for up to twelve months, an issuer's securities registration if, after an administrative hearing, the SEC finds that an issuer violated the Exchange Act by failing to file its periodic reports.

The Global COVID-19 Pandemic Could Adversely Affect Our Business Operations.The Company, including its 30% equity investee, MA & Associates LLC, could be adversely affected by the worldwide Covid-19 pandemic in, among others, the following ways: (i) Travel and tourism disruptions in Nevada and specifically, Las Vegas, could affect the demand for cannabis which in turn could affect current efforts to ramp up operations and become cash flow positive; (ii) Cannabis, and cannabis derived products, could experience production interruptions due to infected workers that could in turn affect the demand for MA's testing services; (iii) If dispensaries are forced to close or scale back sales due to the pandemic, and/or experience disruptions in staffing, that could also disrupt MA's business and its ability to collect on accounts receivable; (iv) Any disruption in the supply chain of critical supplies needed to perform testing could interrupt the processing of test samples; and (v) In a highly regulated and specialized industry such as the testing of cannabis products, the extended absence of any key employee due to illness could cause a delay or suspension of testing. As of the date of this report, none of the aforementioned has occurred.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our corporate headquarters is located at 34 DeForest Ave, Unit 9, East Hanover, New Jersey 07936. Pazoo's office facilities are specifically used to further our business endeavors.

Item 3. Legal Proceedings

In April 2013, the Company filed a complaint against Edataworx, Inc. for return of monies and stock under an agreement dated August 2012. On November 4, 2013, the Company filed an amended complaint now seeking total damages of $105,000 and a return, for cancellation, of the 20,000 shares of company's common stock issued to Edataworx Inc. On November 21, 2013, Edataworx, Inc. filed an Answer to the Amended Complaint denying the allegations and asserted a Counter-Claim against the Company in the amount of $25,000. Edataworx, Inc. also filed a Third-Party Complaint against Integrated Capital Partners, Inc. (an investor of the Company) for the same $25,000. On February 27, 2015, the parties agreed to settle all claims whereby Edataworx, Inc. will pay to the Company a total of $35,000 in three installments. Additionally, Edataworx, Inc. will be allowed to retain a minimum of 15,000 shares of the Company's common stock previously issued with the possibility to retain all 20,000 shares if Edataworx Inc. elects to sell the 15,000 shares agreed upon, and the aggregate sales price is less than $2.00 per share. Edataworx, Inc. failed to make any required payments. On February 25, 2016 new action to enforce the Settlement Agreement, including a claim for attorney's fees as provided for in the Settlement Agreement, was filed. Edataworx failed to respond to the Complaint in the action to enforce the Settlement Agreement. On September 16, 2016 a Judgment was entered in favor of the Company in the Amount of $35,012. The Company is currently seeking to enforce the Judgment.

On or about April 21, 2017, Eri Eveland filed a Complaint in District Court of Denver County Colorado against Harris Lee Colorado, LLC, Harris Lee Holdings, LLC and Pazoo Inc. Ms. Eveland is a former employee of Harris Lee Colorado, LLC and is claiming less than $15,000 in unpaid salary/wages. Inasmuch as Ms. Eveland was not an employee of Harris Lee Holdings, LLC nor Pazoo, Inc., her claims against the Company are derivative in nature and based on theories of corporate alter ego. The Company disputes any liability however as of May 2018, Pazoo, Inc. entered into a settlement with Ms. Eveland in the amount of $5,000 cash and 40,000 Series C Preferred Shares of stock valued at $1,200 at the time of issuance. As of the current date, the Company has completed its obligation of the settlement agreement.

Item 4. Mine Safety Disclosures

None.

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PART II

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

(a) Market for Our Common Shares

Our common shares are quoted on the OTC Pink Sheets under the symbol PZOO. The high and low common closing stock prices per share during the periods indicated were as follows:

Quarter Ended	March 31		June 30		September 30		December 31		Year

2017
High		0.0750		0.0750		0.0065		0.0035		0.0750
Low		0.0250		0.0021		0.0014		0.0002		0.0002

2016
High		0.0500		0.0319		0.0010		0.0005		0.0500
Low		0.0100		0.0009		0.0001		0.0002		0.0001

NUMBER OF HOLDER OF OUR COMMON SHARES

As of the date of this filing there are six thousand and seventy one (6,071) holders of record of our common shares.

DIVIDEND POLICY

We have never paid cash or any other form of dividend on our common stock, and we do not anticipate paying cash dividends in the foreseeable future. Moreover, any future credit facilities might contain restrictions on our ability to declare and pay dividends on our common stock. We plan to retain all earnings, if any, for the foreseeable future for use in the operation of our business and to fund the pursuit of future growth. Future dividends, if any, will depend on, among other things, our results of operations, capital requirements and on such other factors as our board of directors, in its discretion, may consider relevant. We have issued shares of Series A Preferred Stock dividends on our preferred stock in accordance with the Series A Certificate of Designation.

In March 2016, the Company effected a 1-for-100 reverse stock split of the outstanding common stock ("the Reverse Stock Split") whereby every one hundred (100) shares of outstanding common stock decreased to one (1) share of common stock. The impact of this reverse stock split has been retroactively applied to the financial statements and the related notes.

In 2017, the Company filed a Form 14-C in order to effectuate a 1-for-250 reverse stock split of the outstanding common stock (the "Reverse Stock Split") whereby every two hundred and fifty (250) shares of outstanding common stock decreases to one (1) share of common stock. The reverse stock split of 1-for-250 went into effect April 26, 2017. In 2018, the Company filed a Form 14-C in order to increase its authorized shares from 3,000,000,000 to 40,000,000,000. In March of 2019, the Company withdrew the Form 14-C due to financial constraints.

In 2018, the Company filed a Form 14-C in order to increase its authorized shares from 3,000,000,000 to 40,000,000,000. In March 2019, the Company withdrew the Form 14-C due to financial constraints.

Item 6. Selected Financial Data

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

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

This report on Form 10-K contains forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements in this Annual Report that are not statements of historical facts but rather are forward-looking statements, which involve risks and uncertainties. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," and similar expressions are intended to identify forward-looking statements. Our actual results may differ materially from those indicated in the forward-looking statements as a result of the factors set forth elsewhere in this Annual Report on Form 10-K, including under "Risk Factors." You should read the following discussion and analysis together with our audited financial statements for the periods specified and the related notes included herein.

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This report on Form 10-K contains terminology referring to Pazoo, Inc., such as "us," "our," and "the Company."

Management intends the following discussion to assist in the understanding of our financial position and our results of operations for the years ended December 31, 2017 and December 31, 2016

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Overview

We were incorporated as a C-Corporation in the State of Nevada as IUCSS, Inc. on November 16, 2010 and we established a fiscal year end of December 31. On May 9, 2011, we changed our name to Pazoo, Inc. to take advantage of unique branding and website opportunities. We are a start-up health and wellness company offering laboratory testing as it specifically relates to marijuana and the testing of marijuana to ensure quality and safety for the consumer through our 30% equity level investee.

Our principal executive offices are located at 34 DeForest Ave, Unit 9, East Hanover NJ 07936. Our telephone number is (855) PAZOO-US. Our internet address is www.pazoo.com. Any information on the Company’s website is not intended to be incorporated into this Report.

On or about April 8, 2014, Pazoo moved into the pharmaceutical testing space with the acquisition of MA & Associates, LLC, a Nevada limited liability company formed with the purpose of opening a cannabis testing laboratory based in Las Vegas, Nevada to be branded under the Steep Hill Labs name. Harris Lee Holdings, LLC was formed, as a Nevada limited liability company, on or about July 23, 2014 and was formed to hold a License from Steep Hill Labs, Inc. for cannabis testing protocols and the use of the Steep Hill Labs name.

The Company, due to the uncertainties surrounding the license agreement and the efficacy of the testing protocols provided, impaired 100% of the value of the Steep Hill Labs licenses due to the purported unsubstantiated termination of the license agreements in June 2016 between Steep Hill Labs and MA & Associates, LLC and Harris Lee, LLC respectively. The Company strongly believes that any attempted termination of the licenses on the part of Steep Hill Labs was ineffective for many reasons, including, without limitation, Steep Hill's failure to provide key deliverables including technology, scientific know-how and lab guidance. On July 6, 2016, the Company contested the improper attempted termination of the licenses which was based on no identifiable contractual justification, and to which Steep Hill has not formally responded.

In regard to MA & Associates, LLC,the company passed its ISO 17025 accreditation and received its ISO Laboratory Certification in September of 2019. MA & Associates also passed its annual rigorous inspection by the State of Nevada’s team of State inspectors in November of 2019. The lab is fully staffed and operational and is fully licensed to accept both recreational and medical cannabis samples for testing in Nevada.

Liquidity, Capital Resources and Going Concern

As of December 31, 2017 and December 21, 2016, the Company had cash and cash equivalents of $73,387 and $88,909 respectively. As of December 31, 2017, we had a working capital deficit of $9,824,496.

The Company has no agreements, arrangements or understandings with any officer, director or shareholder as to any future financing, either equity or debt. In view of general economic conditions, there can be no assurance that any additional financing will be available to us, that any affiliate will provide additional investments in the Company or that adequate funds for our operations will otherwise be available when needed or on terms acceptable to us.

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Cash used in operating activities during the year end 2017 was ($904,987) compared to cash used of ($928,085) during the year end 2016. This resulted from a net loss of $3,544,617 in the year end 2017 and $8,795,474 in 2016. The Company continued to have net cash flow used in operations for the year ended December 31, 2017 and 2016, primarily as a result of continued net losses and no significant revenue to cover operating expenses.

Net cash provided by financing activities for the years ended December 31, 2016 and December 31, 2017 was $1,000,175, and $889,465 respectively. At December 31, 2017, our principal source of liquidity had been funded primarily through the borrowings on convertible notes and preferred stock offset by repayment of convertible notes in the period.

Net cash used in investing activities for the years ended December 31, 2016 and December 31, 2017 was $0, and $0, respectively. The lack in investing activities was due to the Company focusing its resources on the current testing laboratories.

The company raised $1,356,433 under various loans, convertible loans and advances during 2017, to support operations. As of the issuance of these financial statements, a total of $1,072,773 has been repaid, retired, or converted.

Subsequent to year end, the company entered into a Bridge Loan in the aggregate amount of $150,000 whose proceeds are to be used to get the Company’s SEC filings up to date.

The financial statements included in this report have been prepared in conformity with generally accepted accounting principles that contemplate our continuance as a going concern. The Company has had no revenues and has generated losses from operation. As set forth in Note 2 to the audited Financial Statements, the continuation of the Company as a going concern is dependent upon the Company obtaining adequate capital to fund operating losses until it becomes profitable, if ever. The 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. The Company does not have sufficient cash for the next 12 months from the issuance of these financial statements.

Critical Accounting Policy and Estimates

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Stock Based Compensation

We follow ASC 718 "Compensation - Stock Compensation" which prescribes accounting and reporting standards for all stock-based payments awarded to employees, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights, which may be classified as either equity or liabilities. The Company determines if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present obligation to settle in cash or other assets exists if: (a) the option to settle by issuing equity instruments lacks commercial substance or (b) the present obligation is implied because of an entity's past practices or stated policies. If a present obligation exists, the transaction is recognized as a liability; otherwise, the transaction is recognized as equity. The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50 "Equity-Based Payments to Non-Employees." Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date, the performance completion date, or the contract date. To date, the Company has not issued any stock options, but has issued common stock to non-employees for services.

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Fair Value of Financial Instruments

We follow ASC Topic 820, Fair Value Measurement, to measure certain financial instruments. The fair value of our long-term debt is determined by using estimated market prices. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows:

Level 1: Inputs are based on quoted market prices for identical assets or liabilities in active markets at the measurement date.

Level 2: Inputs include quoted prices for similar assets or liabilities in active markets and/or quoted prices for identical or similar assets or liabilities in markets that are not active near the measurement date.

Level 3: Inputs include management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument's valuation.

Derivatives

We follow ASC Topic 815, Derivatives and Hedging, to evaluate our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

Impairment of Long-Lived Assets

The Company's intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the historical-cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to its carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset.

Equity Method Investments

We apply the equity method of accounting to investments when we have significant influence, but not controlling interest in the investee. Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. The Company’s proportionate share of the net income (loss) resulting from these investments is reported under the line item captioned “equity method investment (loss) income” in our Statements of Operations. The carrying value of our equity method investments is reported in equity method investments in the Balance Sheets. The Company’s equity method investments are reported at cost and adjusted each period for the Company’s share of the investee’s income or loss and dividend paid, if any. The Company classifies distributions received from equity method investments using the cumulative earnings approach on the Statements of Cash Flows. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable.

Comparison of Fiscal Years Ended December 31, 2017 and 2016

Revenues. Revenues were $30,515 for the year ended December 31, 2016, compared to $0 for the year ended December 31, 2017, a decrease of $30,515. As of December 31, 2016, revenue has discontinued from the management fees derived from the cannabis laboratory in Denver, Colorado and the Company does not have any plans to re-open the facility in the near future.

Operating Expenses. Operating expenses consisted of the following expenses: selling, general and administrative expenses; professional fees; and impairment of licenses. Total operating expenses were $4,482,997 in the year ended 2016, compared to $2,152,641 in year ended 2017. Selling, general and administrative (SG&A) expenses were $2,278,768 in 2016 compared to $1,600,848 in 2017, a decrease of $677,920. The decrease in SG&A was due to a decrease in spending on marketing expenses, and the conversion premium fee. SG&A expenses were mainly comprised of branding and public relations, marketing and advertising, and payroll. Professional fees were $664,022 in the year ended 2016, compared to $551,793 in the year ended 2017, a decrease of $112,229. The decrease in professional fees was due primarily to the decrease in investor relations. The Company also had a loss of impairment of $0 during year ended 2017 compared to a $1,540,207 impairment during year ended 2016, as no impairment occurred in 2017.

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Other Expenses. For the year ended December 31, 2016, other expense was $4,342,992 mostly from the following factors; $2,430,259 from a gain on debt extinguishment $2,959,548 for interest expense, and $3,827,703 loss on derivative liabilities. For the year ended December 31, 2017, other expenses were $1,391,976 primarily from loss on debt extinguishment of $624,690, interest expense of $1,212,268 and loss on derivative liabilities of $2,371,599. On November 22, 2017, the Company entered into a Limited Liability Membership Interest Purchase Agreement to sell a 70% Membership Interest of MA & Associates for the aggregate sales price of $1,523,767 of which $1,031,539 was in the form of retirement of the loans extended by the Buyer as designated by Buyer in Buyer’s sole and absolute discretion, including applicable interest, default interest, late charges, and other obligations accrued.

Net loss. The net loss was $8,795,474 for the year ended December 31, 2016, compared to net loss of $3,544,617 for the year ended December 31, 2017.

Subsequent Events

The company issued an aggregate of 2,074,969,990 common shares to debt holders valued at a total of $163,431 for conversions pursuant to convertible notes.

In February 2018, the Company entered into one convertible note agreements for a total of $28,500. The interest rate is 12% and the conversion term is a 45% discount to market over the prior 20 days.

In November of 2019, the Company issued 1,090,000 Series B preferred stock in exchange for services to Board Members and milestones hit in ramping up the testing lab under MA & Associates LLC.

In May of 2019, the Company issued 1,140,000 Series C preferred stock in exchange for a Bridge Loan of $150,000 and the settlement with Ms Eveland.

The company entered into Bridge Loans in the aggregate amount of $150,000 whose proceeds are to be used to get the Company’s SEC filings up to date. The Bridge Loans, each of $75,000, carry an interest rate of 6% and the conversion term is as follows: the loans can be turned into a convertible note whereby $115,000 worth of common stock will be issued as payment in full or the loan will be paid back with monies from the revenue of the testing lab in Las Vegas after it has generated more than $1,500,000 in said monies after expenses. As of May 2018, Pazoo, Inc. entered into a settlement with Ms. Eveland in the amount of $5,000 cash and 40,000 Series C Preferred Shares of stock valued at $1,200 at the time of issuance. As of the current date, the Company has completed its obligation of the settlement agreement.

In June 2020, the Company sold the remaining 10% equity interest from the November 22, 2017 Membership Interest Agreement in MA & Associates for an aggregate total of $226,388. The total amount was in the form of retirement of the loans extended by the Buyer as designated by Buyer in Buyer’s sole and absolute discretion, including applicable interest, default interest, late charges, and other obligations accrued. The Company still maintains a 20% equity interest in MA & Associates.

The Global COVID-19 Pandemic Could Adversely Affect Our Business Operations. The Company, including its 30% equity investee, MA & Associates LLC, could be adversely affected by the worldwide Covid-19 pandemic in, among others, the following ways: (i) Travel and tourism disruptions in Nevada and specifically, Las Vegas, could affect the demand for cannabis which in turn could affect current efforts to ramp up operations and become cash flow positive; (ii) Cannabis, and cannabis derived products, could experience production interruptions due to infected workers that could in turn affect the demand for MA's testing services; (iii) If dispensaries are forced to close or scale back sales due to the pandemic, and/or experience disruptions in staffing, that could also disrupt MA's business and its ability to collect on accounts receivable; (iv) Any disruption in the supply chain of critical supplies needed to perform testing could interrupt the processing of test samples; and (v) In a highly regulated and specialized industry such as the testing of cannabis products, the extended absence of any key employee due to illness could cause a delay or suspension of testing. As of the date of this report, none of the aforementioned has occurred.

Off-Balance Sheet Agreements

None noted.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

As a "smaller reporting company", as defined by Item 10(f) of Regulation S-K, we are not required to provide the information required by Item 7A.

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Item 8. Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of Pazoo, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Pazoo, Inc. (the “Company”) as of December 31, 2017 and 2016, and the related statements of operations, changes in deficit, and cash flows for each of the years in the two year period ended December 31, 2017, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the two year period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has recurring losses from operations which raises substantial doubt about its ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding those matters also are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to that matter.

Basis for Opinion

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

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

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

/s/ Friedman LLP

We have served as the Company’s auditor since 2015.

Marlton, New Jersey December 7, 2020

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PAZOO, INC.
BALANCE SHEETS

	December 31,			December 31,
	2017			2016

ASSETS
Current assets:
Cash	$	73,387		$	88,909
Other receivable		52,000			-
Prepaid expenses		4,066			5,536

Total current assets		129,453			94,445

Fixed assets, net		-			613,332

Total assets	$	129,453		$	707,777

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Lines of credit	$	10,671		$	21,039
Accounts payable and accrued liabilities		1,029,387			608,332
Loans payable (related party portion $409,458 and $546,717)		436,958			615,801
Interest payable		1,820,942			1,452,102
Convertible debt, net of unamortized discounts of $161,648 and $195,827		1,379,778			983,621
Contingent consideration liabilities		713,581			713,581
Derivative liabilities		4,562,632			2,925,627
Capital lease liabilities		-			373,930

Total current liabilities		9,953,949			7,694,033

Long-term liabilities:
Long-term portion of convertible debt, net of unamortized discounts of $0, and $110,672 (related party portion $550,000 and $550,000)		1,292,500			1,401,828
Capital lease liabilities		-			136,672

Total long-term liabilities		1,292,500			1,538,500

Total liabilities		11,246,449			9,232,533

Commitments and contingencies

Stockholders' deficit:
Convertible Preferred Stock, 50,000,000 shares authorized, $0.001 par value
Series A; 10,000,000 shares authorized, 215,139 and 230,401 shares issued and outstanding, respectively.		215			230
Series B; 5,000,000 shares authorized, 2,150,000 and 1,762,500 shares issued and outstanding, respectively.		2,150			1,762
Series C; 10,000,000 shares authorized, 2,647,709 and 2,621,375 shares issued and outstanding, respectively.		2,648			2,621
Series D; 12,500,000 shares authorized, 0 and 0 shares issued and outstanding, respectively.		-			-
Series E; 12,500,000 shares authorized, 0 and 0 shares issued and outstanding, respectively.		-			-
Common stock, $0.001 par value; 2,950,000,000 shares authorized, 613,244,848 and 9,137,630 shares issued and outstanding, respectively.		613,245			9,138
Additional paid-in capital		12,503,586			12,155,641
Accumulated deficit		(24,238,840	)		(20,694,148	)

Total stockholders' deficit		(11,116,996	)		(8,524,756	)
Total liabilities and stockholders' deficit	$	129,453		$	707,777

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

F-1

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PAZOO, INC.
STATEMENTS OF OPERATIONS

	Years Ended
	December 31,
	2017			2016

Revenues:
Management fees - related party	$	-		$	30,515
Total revenues		-			30,515

Operating expenses:
Selling, general and administrative expenses		1,600,848			2,278,768
Professional fees		551,793			664,022
Loss on impairment of license		-			1,540,207
Total operating expenses		2,152,641			4,482,997

Loss from operations		(2,152,641	)		(4,452,482	)

Other income/(expenses):
Gain from sale of interest in MA, net of transaction fees		1,567,201			-
Loss on derivative liabilities		(2,371,599	)		(3,827,703	)
Loss on debt extinguishment		624,690			2,430,259
Gain on change in fair value of contingent consideration		-			5,000
Interest expense		(1,212,268	)		(2,950,548	)
Total other income/(expenses)		(1,391,976	)		(4,342,992	)

Net loss	$	(3,544,617	)	$	(8,795,474	)

Series A preferred stock dividends		(75	)		(76	)

Net loss attributable to common stockholders	$	(3,544,692	)	$	(8,795,550	)

Basic and dilutive net loss per common share	$	(0.03	)	$	(3.28	)

Weighted average common shares outstanding - basic and diluted		117,224,982			2,678,502

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

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PAZOO, INC.
STATEMENTS OF CASH FLOWS

	Years Ended
	December 31,
	2017			2016

Cash flows from operating activities:
Net loss	$	(3,544,617	)	$	(8,795,474	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discounts		683,828			1,420,061
Depreciation		166,142			136,509
Amortization		-			50,728
Change in fair value of contingent consideration		-			(5,000	)
Stock-based compensation		67,310			79,900
(Gain)/loss on derivative liabilities		2,371,599			3,827,703
(Gain)/loss on debt extinguishment		(624,690	)		(2,430,259	)
(Gain)/loss on impairment of intangibles		-			1,540,207
Gain from sale of interest in MA, net of transaction fees		(1,567,201	)		-
Loss on settlement		-			1,146,231
Changes in operating assets and liabilities:
Accounts receivable		(52,000	)		-
Prepaid expenses and other current assets		-			(1	)
Accounts payable, accrued liabilities and interest payable		1,594,642			2,101,310
Net cash used in operating activities		(904,987	)		(928,085	)

Cash flows from financing activities:
Proceeds from convertible note		527,605			673,460
Repayments on capital leases		(85,535	)		(36,685	)
Repayments on convertible notes and loans		(367,765	)		(175,239	)
Repayments on loans payable - related party		(3,300	)		-
Proceeds from loans payable		828,828			447,100
Proceeds from sale of Series C preferred stock		-			90,000
Lines of credit		(10,368	)		1,539
Net cash provided by financing activities		889,465			1,000,175

Net (decrease) increase in cash and cash equivalents		(15,522	)		72,090

Cash and cash equivalents beginning of period		88,909			16,819

Cash and cash equivalents end of period	$	73,387		$	88,909

Noncash Investing and Financing Activities
Common stock issued for the conversion of Series A preferred stock	$	2,634		$	34,659
Common stock issued for the conversion of Series C preferred stock		-			183,570
Debt discount due to derivative liabilities		509,592			1,233,098
Preferred shares issued for conversion of debt and interest		-			30,652
Common shares issued for conversion of debt and interest		856,559			1,042,688
Common shares issued for accrued liability		-			350,000

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

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PAZOO, INC.
STATEMENTS OF STOCKHOLDERS' DEFICIT

	Common Stock				Series A Preferred Stock						Series B Preferred Stock				Series C Preferred Stock						Additional Paid-In			Accumulated
	Shares		Par		Shares			Par			Shares		Par		Shares			Par			Capital			Deficit			Total

January 1, 2016		59,461	$	59		860,669		$	861			1,762,500	$	1,762		2,051,000		$	2,051		$	9,425,188		$	(11,898,674	)	$	(2,468,753	)

Common shares issued for services		240		-		-			-			-		-		-			-			2,400			-			2,400

Conversion of preferred stock to common stock		872,914		873		(691,629	)		(692	)		-		-		(1,835,697	)		(1,836	)		1,655			-			-

Preferred Series A stock issued for debt conversion		-		-		61,306			61			-		-		-			-			30,591			-			30,652

Preferred Series A stock issued for dividends		-		-		55			-			-		-		-			-			-			-			-

Preferred Series C issued for services - non cash		-		-		-			-			-		-		77,500			77			77,423			-			77,500

Preferred Series C stock issued for cash		-		-		-			-			-		-		128,572			129			89,871			-			90,000

Preferred Series C stock issued to ICPI for settlement		-		-		-			-			-		-		2,200,000			2,200			1,494,031			-			1,496,231

Common shares issued for conversion of debt		8,205,015		8,205		-			-			-		-		-			-			1,034,483			-			1,042,688

Net Loss		-		-		-			-			-		-		-			-			-			(8,795,474	)		(8,795,474	)

December 31, 2016		9,137,630	$	9,138		230,401		$	230			1,762,500	$	1,762		2,621,375		$	2,621		$	12,155,641		$	(20,694,148	)	$	(8,524,756	)

Common shares issued due to rounding for reverse split		2,485		2		-			-			-		-		-			-			(2	)		-			-

Conversion of preferred stock to common stock		2,633,700		2,634		(15,337	)		(15	)		-		-		(11,000	)		(11	)		(2,608	)		-			-

Preferred Series A stock issued for dividends		-		-		75			-			-		-		-			-			75			(75	)		-

Preferred Series B issued for services		-		-		-			-			387,500		388		-			-			55,722			-			56,110

Preferred Series C issued for services		-		-		-			-			-		-		37,334			38			11,162			-			11,200

Common shares issued for conversion of debt		601,471,033		601,471		-			-			-		-		-			-			283,596			-			885,067

Net Loss		-		-		-			-			-		-		-			-			-			(3,544,617	)		(3,544,617	)

December 31, 2017		613,244,848	$	613,245		215,139		$	215			2,150,000	$	2,150		2,647,709		$	2,648		$	12,503,586		$	(24,238,840	)	$	(11,116,996	)

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

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Pazoo, Inc.

Notes to Financial Statements

Note 1—DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

On November 22, 2017, the Company entered into a Limited Liability Membership Interest Purchase Agreement (the “Agreement”) to sell a 70% Membership Interest for the aggregate sales price of One Million Five Hundred Twenty-Three Thousand Seven Hundred Sixty-Seven and no/100 United States Dollars ($1,523,767) in the following manner: (i) Four Hundred Ninety-Two Thousand Two Hundred Twenty-Seven and 30/100 United States Dollars ($492,227), to be paid in cash; and (ii) One Million Thirty-One Thousand Five Hundred Thirty-Nine and 70/100 United States Dollars ($1,031,539), in the form of retirement of the loans extended by the Buyer as designated by Buyer in Buyer’s sole and absolute discretion, including applicable interest, default interest, late charges, and other obligations accrued in respect thereof. The Agreement also contained an option to purchase an additional 10% interest within 18 months. The option has subsequently been extended to November 22, 2020. Post sale, the Company retains 30% equity investment in MA & Associates LLC. The Company sold the remaining 10% equity interest from the November 22, 2017 on June 30, 2020. Membership Interest Agreement in MA & Associates for an aggregate total of $226,388. The total amount was in the form of retirement of the loans extended by the Buyer as designated by Buyer in Buyer’s sole and absolute discretion, including applicable interest, default interest, late charges, and other obligations accrued. The Company still maintains a 20% equity interest in MA & Associates.

The Company entered the pharmaceutical testing laboratory market with their acquisitions of MA & Associates, LLC (“MA”) which will operate pharmaceutical testing laboratories in Nevada, and Harris Lee Holdings, LLC which will operate pharmaceutical testing laboratories within other states, or license testing protocols as independently owned laboratories. These pharmaceutical testing laboratories focus on providing quality control services to the medical cannabis industry. The mission is to protect the public health by providing infrastructure and analytical services to legally-authorized cannabis producers and distributors as well as to regulators. States that have legalized cannabis are developing cannabis health and safety criteria that we will fulfill through their testing laboratories. Harris Lee Holdings, LLC, due to Colorado residency requirements, entered into an advisory agreement with Harris Lee Colorado, LLC, a related party. Harris Lee Holdings, LLC has sub-licensed the testing protocols to Harris Lee Colorado, LLC in exchange for management fees for each test conducted. The Colorado MED approved the transfer of management of an existing laboratory, operating as Steep Hill Colorado, to Harris Lee Colorado, LLC (a related party) and Harris Lee Holdings, LLC has derived management fees from Harris Lee Colorado, LLC in the year ending December 31, 2016. However, because of the failure to transfer the MED license to Harris Lee Colorado, LLC, the Denver laboratory was closed by the end 2016. The Company does not expect to re-commence operations. MA, a cannabis testing laboratory in Las Vegas Nevada, officially opened for business in October 2018. It took its first revenue in December of 2018. Furthermore, the company passed its ISO 17025 accreditation and received its ISO Laboratory Certification in September of 2019. MA also passed its annual rigorous inspection by the State of Nevada’s team of State inspectors in November of 2019. Operational ramp up took longer than expected but as of now the lab is fully staffed and operational and is fully licensed to accept both recreational and medical cannabis samples for testing in Nevada. The Company currently owns a 20% equity stake in MA & Associates.

Basis of Presentation

The accompanying financial statements include the accounts of Pazoo, Inc. ("Pazoo" or the "Company") These financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP").

In March 2016, the Company effected a 1-for-100 reverse stock split of the outstanding common stock (the "Reverse Stock Split") whereby every one hundred (100) shares of outstanding common stock decreased to one (1) share of common stock. Similarly, the number of shares of common stock, par value $0.001 ("Common Stock") into which each outstanding Preferred stock, convertible debt and warrant to purchase common stock is to be exercisable decreased on a 1-for-100 basis and the exercise price of each outstanding preferred stock and warrant to purchase common stock increased proportionately. The impact of this reverse stock split has been retroactively applied to the financial statements and the related notes and all debt terms were also adjusted/effected.

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In January 2017, the Company filed a Form 14-C in order to effectuate a 1-for-250 reverse stock split of the outstanding common stock (the "Reverse Stock Split") whereby every two hundred and fifty (250 shares of outstanding common stock decreases to one (1) share of common stock). As of April 2017, the 1-for-250 reverse stock split was effectuated.

Use of Estimates

In accordance with GAAP the preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period.

On an ongoing basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions. The most significant accounting estimates inherent in the preparation of the Company's financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which are not readily apparent from other sources. These accounting policies are described at relevant sections in the notes to the financial statements.

Fixed Asset

Fixed assets are presented at cost at the date of acquisition. Depreciation and amortization is calculated based on the straight-line method over the estimated useful lives of the depreciable assets, or in the case of leasehold improvements, the shorter of the lease term or the estimated useful life of the asset, a portion of which is allocated to cost of sales. Improvements are capitalized while repairs and maintenance are charged to operations as incurred.

Impairment of Long-Lived Assets

The Company's intangible assets and fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the historical-cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to its carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset.

The Company, due to the uncertainties surrounding the license agreement, impaired 100% of the value of the Steep Hill Labs licenses due to the purported unsubstantiated termination of the license agreements in June 2016 between Steep Hill Labs and MA & Associates, LLC and Harris Lee, LLC prior to the deconsolidation and sale of the 70% ownership position in MA. The Company strongly believes that any attempted termination of the licenses on the part of Steep Hill Labs was ineffective for many reasons, including, without limitation, Steep Hill's failure to provide key deliverables including technology, scientific know-how and lab guidance. On July 6, 2016, the Company contested the improper attempted termination of the licenses which was based on no identifiable contractual justification, and to which Steep Hill has not formally responded.

Equity Method Investments

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Fair Value of Financial Instruments

The Company's financial instruments consist principally of cash and cash equivalents and accounts payable. The Company believes that the recorded values of all of its other financial instruments approximate their fair values because of their nature and respective maturity dates or durations. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows:

Level 1: Inputs are based on quoted market prices for identical assets or liabilities in active markets at the measurement date.

Level 2: Inputs include quoted prices for similar assets or liabilities in active markets and/or quoted prices for identical or similar assets or liabilities in markets that are not active near the measurement date.

Level 3: Inputs include management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument's valuation.

The following table sets forth by level within the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value as December 31, 2017 and 2016.

Recurring Fair Value Measurements	Level 1		Level 2		Level 3		Total
LIABILITIES:
Derivative liability – December 31, 2017	$	-	$	-	$	4,526,632	$	4,526,632
Derivative liability – December 31, 2016	$	-	$	-	$	2,925,627	$	2,925,627

Derivative

The Company has certain convertible notes outstanding at December 31, 2017 and 2016 with variable conversion rates that qualify as derivatives that need to be separately accounted for in accordance with FASB ASC 815, "Derivatives and Hedging". In addition, the Company did not have enough authorized shares for the full conversion of all convertible notes. Embedded derivatives satisfying certain criteria are recorded at fair value at issuance and marked-to-market at each balance sheet date with the change in the fair value recorded as a gain or loss (see Note 10).

The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

Cash and Cash Equivalents

We classify all highly liquid instruments with an original maturity of three months or less at the time of purchase as cash equivalents.

Stock Based Compensation

ASC 718 "Compensation - Stock Compensation" prescribes accounting and reporting standards for all stock-based payments awarded to employees, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights, which may be classified as either equity or liabilities. The Company determines if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present obligation to settle in cash or other assets exists if: (a) the option to settle by issuing equity instruments lacks commercial substance or (b) the present obligation is implied because of an entity's past practices or stated policies. If a present obligation exists, the transaction is recognized as a liability; otherwise, the transaction is recognized as equity. The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50 "Equity-Based Payments to Non-Employees." Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date, the performance completion date, or the contract date.

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Revenue Recognition

Revenues are recognized when evidence of an agreement exists, the price is fixed or determinable, collectability is reasonably assured, and goods have been delivered or services performed. Prior to the sale of MA, the Company was paid revenue from various advertising, cannabis testing, through MA & Associates, LLC and sales and distribution of non-controlled hemp products.

Income Taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse.

We have net operating loss carryforwards available to reduce future taxable income. Future tax benefits for these net operating loss carryforwards are recognized to the extent that realization of these benefits is considered more likely than not. To the extent that we will not realize a future tax benefit, a valuation allowance is established.

Basic and Diluted Net Loss Per Common Share

Basic net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share reflects, in addition to the weighted average number of common shares, the potential dilution if shares of convertible preferred stock and debt were converted into shares of common stock and a corresponding accrued 5% dividend, unless the effects of such exercises and conversions would have been anti-dilutive.

Potentially Dilutive Securities
	December 31, 2017		December 31, 2016

Convertible notes		7,868,063,321		158,168,021
Preferred series A shares & warrants		21,513,900		92,160
Preferred series B		430,000,000		1,410,000
Preferred series C		264,770,900		1,266,829
		8,584,348,121		160,937,010

Advertising Expenses

Costs associated with advertising are charged to expense as incurred.

Recent Accounting Pronouncements

In March 2016, the FASB under ASU 2016-09 issued new guidance which involves several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under the new standard, income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the income statement and the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity should also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. Excess tax benefits should be classified along with other income tax cash flows as an operating activity. In regards to forfeitures, the entity may make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. This ASU was effective for fiscal years beginning after December 15, 2016 including interim periods within that reporting period, however early adoption is permitted. The Company evaluated the guidance to determine the Company's adoption method and the effect it will have on the Company's consolidated financial statements and it is effective currently.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in ASU 2016-01, among other things, requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; Requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables); Eliminate the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities. The amendments in this ASU are effective for non-public companies for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning December 15, 2019. Early adoption of the amendments in the ASU is permitted as early as the fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of this standard is not expected to have a material effect on the financial position and results of operations and statements of cash flows.

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In August 2014, the FASB issued ASU No. 2014-15 —Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. The ASU requires management to evaluate whether there are conditions and events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the financial statements are issued and if management's plans will alleviate that doubt. Management will be required to make this evaluation for both annual and interim reporting periods. The Company adopted this guidance for the fiscal year ended December 31, 2016. This adoption did not have a material impact on the Company's financial statements.

In September 2015, the FASB issued Accounting Standards Update (ASU) 2015-16—Business Combinations, as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). The amendment eliminates the requirement to retrospectively apply adjustments made to provisional amounts recognized in a business combination. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company adopted this guidance for the year ended December 31, 2016. This guidance did not have a material effect on its financial statements.

On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delayed the effective date of the new standard from January 1, 2017 to January 1, 2018. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. This ASU permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on our financial statements and related disclosures. The Company has no revenue at this time.

In June 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-07, “Compensation — Stock Compensation (Topic 718),” (“ASU 2018-07”). ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for nonemployee share-based payments. Currently, the accounting requirements for nonemployee and employee share-based payment transactions are significantly different. ASU 2018-07 expands the scope of Topic 718, Compensation — Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. This ASU supersedes Subtopic 505-50, Equity — Equity-Based Payments to Nonemployees. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, and interim periods within that fiscal year. Early adoption is permitted, but no earlier than a company’s adoption date of Topic 606, Revenue from Contracts with Customers.

In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting (ASU 2017-09). ASU 2017-09 clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The standard is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the potential impact ASU 2017-09 will have on the Company's Consolidated Financial Statements.

Other recent accounting pronouncements issued by the FASB did not or are not believed to have a material impact on our present or future financial statements.

Note 2—GOING CONCERN

During 2017 and 2016, the Company incurred net losses of $3,544,617 and $8,795,474, respectively and had negative cash flows from operations of $904,987 and $928,085 respectively. In addition, as of December 31, 2017, the Company had a working capital deficit of $9,824,496. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company's continuation as a going concern is dependent upon our ability to generate sufficient cash flow and raise additional capital to meet our obligations on a timely basis and ultimately attain profitability. If the Company is unable to generate sufficient cash flow or raise additional capital in the new term, it could be forced to cease operations. The Company does not have sufficient capital for the next 12 months from the issuance of these financial statements.

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The Company's liquidity is highly dependent on its ability to obtain additional capital in the near future. The Company's failure to raise new capital would impair its ability to both continue its current operations and could result in its failure to continue to operate as a going concern. Substantial doubt about its ability to continue as a going concern may also create negative reactions to the price of the Company's common stock, and the Company may not be able to obtain additional financing in the future. The Company is currently exploring potential transactions. If the Company is unable to raise additional capital on terms acceptable to the Company and on a timely basis, the Company will be required to wind down its operations through liquidation, bankruptcy, or a sale of its assets. In addition, to the extent additional capital is raised through the sale of equity or convertible debt securities, such securities may be sold at a discount from the market price of the Company's common stock. The issuance of these securities could also result in significant dilution to some or all of the Company's stockholders, depending on the terms of the transaction. Subsequent to December 31, 2017 the Company was able to raise funds in the total of $178,500, $150,00 of which was earmarked for public Company filings.

Note 3—ACQUISITIONS AND DECONSOLIDATION

MA & Associates, LLC

On April 8, 2014 the Company entered into a Limited Liability Company Membership Interest Purchase Agreement with MA & Associates, LLC ("MA") under which the Company agreed to acquire a 40% equity interest in MA for two testing locations in exchange for a purchase price of $2,000,000 and 150,000 shares of the Company's Series C Preferred Stock. MA was formed to become a cannabis testing laboratory within the State of Nevada. In 2014 and 2015, prior to the purchase of the remaining 60% and obtaining control as discussed below, the Company paid an aggregate of $1,321,419 of the cash portion and issued 100,000 shares of the Series C Preferred Stock.

During 2015, prior to taking control through the acquisition of the remaining 60% interest, the consideration paid was originally recorded as an equity method investment, and was subsequently impaired prior to entering into the second investment agreement noted below.

On June 3, 2015, the Company entered into a 2nd agreement to acquire the remaining 60% interest in MA for 1,000,000 shares of Series C preferred stock, valued at $1,000,000. In accordance with generally accepted accounting principles ("GAAP") in accounting for a step-acquisition, the Company estimated the fair value of the previously held equity method investment at $667,666, resulting in a total purchase price of approximately $1.7 million.

As of December 31, 2015 the Company was still obligated to pay the remaining portion under the original 40% investment agreement, consisting of $678,000 of cash and 50,000 shares of Series C Preferred Stock (valued at $35,000 as of December 31, 2016), totaling $713,581 and included in contingent consideration liability on the accompanying balance sheet.

ICPI, who is a related party, was entitled to 500,000 Series C shares as a commission for services related to the MA acquisition, of which 300,000 were issued during the year ended December 31, 2015 valued and expensed at $300,000. The remaining 200,000 shares will be issued upon achieving certain milestones in 2016. As of December 31, 2017, all remaining shares upon achieving certain milestones in 2016 were issued due to settlement to ICPI.

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On November 22, 2017, the Company entered into a Limited Liability Membership Interest Purchase Agreement (the “Agreement”) with MA Analytics, LLC (the “Buyer”) to sell a 70% Membership Interest in MA & Associates, LLC for the aggregate sales price of One Million Five Hundred Twenty-Three Thousand Seven Hundred Sixty-Seven and no/100 United States Dollars ($1,523,767) in the following manner: (i) Four Hundred Ninety-Two Thousand Two Hundred Twenty-Seven and 30/100 United States Dollars ($492,227), to be paid in cash; and (ii) One Million Thirty-One Thousand Five Hundred Thirty-Nine and 70/100 United States Dollars ($1,031,539), in the form of retirement of the loans extended by the Buyer as designated by Buyer in Buyer’s sole and absolute discretion, including applicable interest, default interest, late charges, and other obligations accrued in respect thereof. The Agreement also contained an option to purchase an additional 10% interest within 18 months. The option has subsequently been extended to November 22, 2020. Post sale, the Company retained a 30% equity investment in MA & Associates LLC. The Buyer exercised the option to purchase the additional 10% equity interest for an aggregate total of $226,388 on June 30, 2020. The total amount was in the form of retirement of the loans extended by the Buyer as designated by Buyer in Buyer’s sole and absolute discretion, including applicable interest, default interest, late charges, and other obligations accrued. The Company still maintains a 20% equity interest in MA & Associates. The tables below show the assets and liabilities before the 70% equity sale, at the date of the sale, and after the sale.

	December 31,			At the		December 31,
	2017			Closing Date		2016
	(unaudited)			(unaudited)		(unaudited)
ASSETS
Current assets:
Cash	$	(264	)	$	17,798	$	2,481
Other current assets		1,470			1,470		1,470

Total current assets		1,206			19,268		3,951

Fixed assets, net		445,805			445,805		611,947
Other assets		1,385			1,385		1,385

Total assets	$	448,396		$	466,458	$	617,283

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Accounts payable	$	27,865		$	-	$	-
Lines of credit		13,065			13,705		11,141

Total current liabilities		40,930			13,705		11,141

Long-term liabilities:
Capital lease liabilities		407,983			425,067		510,602
Payable to Pazoo		-			382,179		-

Total long-term liabilities		407,983			807,246		510,602

Total liabilities		448,913			820,951		521,743

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As of December 31, 2017, the Company was still owed $52,000 of the cash purchase price, which is reflected on the balance sheet in the other receivable balance. In conjunction with the sale transaction, the Company determined that amounts due from MA totaling $311,060 were uncollectable. The allowance for uncollectible balances from MA is reflected in the gain on sale of interest in MA.

	January 1, 2017 - November 22, 2017			Year Ended December 31, 2016
	(unaudited)			(unaudited)
Operating expenses:
Selling, general and administrative expenses		504,577			374,075
Total operating expenses		504,577			374,075

Other income/(expenses):
Loss on impairment		-			1,276,998
Total other income/(expenses)		-			1,276,998

Loss from operations		(504,577	)		1,276,998

Net loss	$	(504,577	)	$	(1,651,073	)

Net loss attributable to common stockholders	$	(504,577	)	$	(1,651,073	)

Harris Lee Holdings, LLC

Harris Lee Holdings, LLC has sub-licensed the testing protocols to Harris Lee Colorado, LLC in exchange for a management fee for each test conducted. During 2016, the Colorado MED approved the transfer of management of an existing laboratory, operating as Steep Hill Colorado, to Harris Lee Colorado, LLC (a related party) and Harris Lee Holdings, LLC has derived management fees from Harris Lee Colorado, LLC in the year ending December 31, 2016. However, because of the failure to transfer the MED license to Harris Lee Colorado, LLC, the Denver laboratory was closed by the end 2016. There are no plans to re-open the facility.

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Note 4—FIXED ASSETS

Fixed assets consists of the following:

Fixed Assets
	Estimated Useful Life (in years)	December 31, 2017			December 31, 2016

Cost:
Equipment	3-5	$	-		$	643,195
Furniture and fixture	7		-			6,687
Leasehold improvements	3-5		-			238,620
Website	3		-			1,385
		$	-		$	889,887

Accumulated depreciation and amortization			(462,574	)		(276,555	)

Fixed Assets, Net		$	(462,574	)	$	613,332

Costs of assets acquired under capital leases were approximately $615,000 for the year ended December 31, 2016. The capital lease represents a total of three leases for testing equipment. The leases hold an interest rate of 0% and monthly payments are approximately $17,000 per month. The depreciation for the years ended December 31, 2017 and December 31, 2016 up to the date of deconsolidation of MA was $136,510 and $140,046 respectively. All fixed assets were sold as part of the MA sale and deconsolidation.

Note 5—INTANGIBLE ASSETS & GOODWILL

Intangible assets as of December 31, 2016 consisted of a license agreement acquired for $307,500 from Steep Hill Labs for the right to take the Steep Hill software and methodology to states above and beyond Nevada, and the MA license derived from the acquisition of $1,345,771. During 2016, the Company impaired 100% of the Steep Hill license agreement acquired for $307,500 as well as the MA license derived from acquisition of $1,345,771. The impairment was due to the uncertainties surrounding the license agreement, as well as the purported unsubstantiated termination of the license agreements in June 2016 between Steep Hill Labs and MA & Associates, LLC and Harris Lee, LLC respectively.

Note 6—LINES OF CREDIT

The Company entered into a line of credit with Wells Fargo in December 2015 in the amount of $25,000. The credit line bears an interest rate of 9.75% annually, compounded daily, and there is no term on the account. There are no financial covenants and the guarantor on the account is Steve Basloe, the Company's President. The line of credit has been used for general operating expenses and was paid off in July of 2020.

The Company entered into a line of credit with Wells Fargo in May 2016 in the amount of $5,000. The credit line bears an interest rate of 24.24% for the first year and then 9.75% annually, compounded daily, and there is no term on the account. There are no financial covenants. The credit has been used for general operating expenses.

Note 7—RELATED PARTY TRANSACTIONS

In July 2013, the Company entered into a consulting agreement with an affiliate of Mr. Basloe, a board member and President of the Company. The agreement provides for consulting on marketing-related services for the Company. The amounts paid under this agreement for the years ended December 31, 2016 and December 31, 2017 were $46,617 and $17,000, respectively.

In 2016, the Company managed Harris Lee Colorado, LLC, an existing lab in Denver, Colorado, after receiving approval from the Colorado Marijuana Enforcement Division in February of 2016. Harris Lee Holdings, LLC has sub-licensed the testing protocols to Harris Lee Colorado, LLC in exchange for a management fee for each test conducted. The Colorado MED has recently approved the transfer of management of an existing laboratory, to Harris Lee Colorado, LLC (a related party) and Harris Lee Holdings, LLC has begun to derive management fees from Harris Lee Colorado, LLC. The revenue derived from these management fees for the year ended December 31, 2016 was $30,515. The laboratory is currently closed and the Company does not have plans to re-open in the near future.

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In August 2016, Pazoo, Inc. entered into a loan agreement with David Cunic, Former CEO, and totaling $5,000. The note has an interest rate of 0.70% and the maturity date is August 2018. As of December 2017, $0 remains outstanding.

The buyer of the 70% interest is now considered a related party. All loans, convertible notes and accrued interest owed to the buyer, are disclosed on the face of the accompanying balance sheet, parenthetically, as related party liabilities.

Note 8—CONVERTIBLE DEBT

The following table summarizes the changes in the convertible notes during 2016 and 2017:

	Short Term			Long Term			Total
Balance as of January 1, 2016 - Gross	$	1,343,035		$	992,500		$	2,335,535
Cash additions		373,460			300,000			673,460
Interest added to notes payable		111,778			116,600			228,378
Cash payments		(118,223	)		-			(118,223	)
Conversions		(474,777	)		-			(474,777	)
Reassignments		(103,400	)		103,400			-
Original issue discount		47,575			-			47,575
Total	$	1,179,448		$	1,512,500		$	2,691,948
Less: unamortized discount		(195,827	)		(110,672	)		(306,499	)
Balance as of December 31, 2016 - Net	$	983,621		$	1,401,828		$	2,385,449
Add back: unamortized discount		195,827			110,672			306,499
Balance as of December 31, 2016 - Gross	$	1,179,448		$	1,512,500		$	2,691,948
Cash additions		527,605			-			527,605
Interest added to notes payable		63,281			-			63,281
Cash payments		(305,757	)		-			(305,757	)
Conversions		(219,500	)		-			(219,500	)
Reclassification to short-term		220,000			(220,000	)		-
Original issue discount		76,348			-			76,348
Total	$	1,541,425		$	1,292,500		$	2,833,925
Less: unamortized discount		(161,648	)		-			(161,648	)
Balance as of December 31, 2017 - Net	$	1,379,778		$	1,292,500		$	2,672,278

The Company received $673,460 of new cash additions in the year ended December 31, 2016 In addition to the funds received, noteholders converted $474,777 during the year ended December 31, 2016 into common stock exclusive of accrued interest. Cash payments consisted of $118,223. Non-cash additions, which are due to the increase in principle for compounding interest, including accrued interest totaled $103,400 in 2016. As of December 31, 2016, the unamortized debt discounts totaled $306,499. The interest rates on the notes ranged from 8% to 12%.

The Company received $527,605 of new cash additions in the year ended December 31, 2017. In addition to the funds received, noteholders converted $221,643 during the year ended December 31, 2017 into common stock exclusive of accrued interest. Non-cash additions, which are due to the increase in principle for compounding interest, including accrued interest, totaled $76,347 in 2016. As of December 31, 2017, the unamortized debt discounts totaled $184,415. The interest rates ranged between 8%-12%.

The Company evaluated all convertible notes describe above under ASC 815 and determined that certain conversion features qualify as derivative liabilities (see Note 10).

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During the year ended December 31, 2016, the Company incurred approximately $2.4 million of a gain in debt extinguishment primarily as a result of various notes converting to equity, with the corresponding derivative liability value at the date of conversion being written .off to debt extinguishment as a gain, offset by the unamortized discount on the convertible debt at the time of conversion.

During the year ended December 31, 2017, the Company incurred approximately 600 thousand of a loss in debt extinguishment primarily as a result of various notes converting to equity, with the corresponding derivative liability value at the date of conversion being written off to debt extinguishment as a gain, offset by the unamortized discount on the convertible debt at the time of conversion.

In 2016, the Company modified certain convertible notes aggregating a total of $992,500 to increase the interest rate from 10% to 12% retroactively. The maturity dates of these notes were also extended by 2 years. The modification of notes was accounted for as a gain on debt extinguishment, ?included in the note above.

Additionally, at December 31, 2017, all debt is past due and in default. The Company has adequately accrued all default interest and associated penalties related to these instruments. Additionally, cross default clauses exist within certain other instruments containing terms which would make the notes immediately due and payable, however no cross default clauses have been triggered as of yet.

Future minimum payments owed on the outstanding debt of the Company as of December 31, 2017 are as follows:

	Year Ended December 31,
	2018		2019		2020		2021		2022		Thereafter		Total
Convertible notes	$	1,541,424	$	-	$	-	$	350,000	$	942,500	$	-	$	2,833,924
Short-term non-convertible notes		436,958		-		-		-		-		-		436,958
	$	1,978,382	$	-	$	-	$	350,000	$	942,500	$	-	$	3,270,882

Note 9—LOANS PAYABLE

Loans Payable
	Short Term			Long Term		Total
Balance as of January 1, 2016	$	203,000		$	-	$	203,000
Cash additions		447,100			-		447,100
Interest added to notes payable		22,717			-		22,717
Cash payments		(57,016	)		-		(57,016	)
Balance as of December 31, 2016	$	615,801		$	-	$	615,801
Cash additions		828,828			-		828,828
Interest added to notes payable		34,734			-		34,734
Cash payments		(65,308	)		-		(65,308	)
Reassigned/retired notes (see note 3)		(977,097	)		-		(977,097	)
Balance as of December 31, 2017	$	436,958		$	-	$	436,958

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In September 2015, Pazoo, Inc. entered into a loan note totaling $200,000 with Mark Sarna and Sarna Family Limited Partnership. The note has an interest rate of 15.0% and matured September 22, 2016. As of December 31, 2016, $222,217 still remains outstanding due to accrued interest and an increase in interest to 22.5% payable in monthly payments from the revenue from the Las Vegas laboratory and has not yet commenced.

In January 2016, Pazoo, Inc. entered into a note totaling $5,000 with RBF Unlimited, LLC. The note has an interest rate of 0.70% and matures January 27, 2017. As of December 31, 2016, loan was paid back in full.

In January 2016, Pazoo, Inc. entered into a loan agreement with Kabbage Loans totaling $9,100. The loan has a monthly payment consisting of $500 to the principal and $210 to fees, totaling a monthly cost of $710. The loan will be paid off in a maximum of 12 months. As of December 31, 2016, this loan was paid off.

In February 2016, Pazoo, Inc. entered into a loan totaling $25,000 with LG Capital, LLC. The note has an interest of 8.0% and it matures on October 4, 2017. As of December 31, 2017, $25,000 still remains outstanding.

In June 2016, Pazoo, Inc. entered into a loan agreement with Kabbage Loans totaling $35,000. The loan will be paid off in a maximum of 12 months and has a monthly payment consisting of $3,792 to the principal and $875 to fees, totaling a monthly cost of $4,667. As of December 31, 2017, $0 remains outstanding.

In July 2016, Pazoo, Inc. entered into a loan agreement with Kabbage Loans totaling $7,500. The loan will be paid off in a maximum of 6 months and has a monthly payment consisting of $1,250 to the principal and $188 to fees, totaling a monthly cost of $1,438. As of December 31, 2017, $0 remains outstanding.

In August 2016, Pazoo, Inc, entered into loan agreements totaling an aggregate of $96,000 with a private investor. The notes have an interest rate of 8.0% and maturity dates range from October 2016 to August 2017. As of December 31, 2017, $84,000 still remains outstanding.

In August 2016, Pazoo, Inc. entered into a loan agreement with David Cunic, Company CEO, and totaling $5,000. The note has an interest rate of 0.70% and the maturity date is August 2018. As of December 2017, $0 remains outstanding.

In September 2016, Pazoo, Inc. entered into a loan agreement with Kabbage Loans totaling $7,700. The loan will be paid off in a maximum of 6 months and has a monthly payment consisting of $1,284 to the principal and $193 to fees, totaling a monthly cost of $1,477. As of December 31, 2017, $0 remains outstanding.

In October 2016, Pazoo, Inc, entered into loan agreements totaling an aggregate of $112,000 with a private investor. The notes have an interest rate of 8.0% and maturity dates of October 2017. As of December 31, 2017, $0 still remains outstanding.

In November 2016, Pazoo, Inc, entered into loan agreements totaling an aggregate of $33,000 with a private investor. The notes have an interest rate of 8.0% and maturity dates of November 2017. As of December 31, 2017, $0 still remains outstanding.

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In December 2016, Pazoo, Inc, entered into loan agreements totaling an aggregate of $95,000 with a private investor. The notes have an interest rate of 8.0% and maturity dates of December 2017. As of December 31, 2017, $0 still remains outstanding.

In December 2016, Pazoo, Inc. entered into a loan agreement with Kabbage Loans totaling $16,000. The loan will be paid off in a maximum of 12 months and has a monthly payment consisting of $1,334 to the principal and $400 to fees, totaling a monthly cost of $1,734. As of December 31, 2017, $0 remains outstanding.

In February 2017, Pazoo, Inc. entered into a loan agreement with Kabbage Loans totaling $10,500. The loan will be paid off in a maximum of 6 months and has a monthly payment consisting of $1,575 to the principal and $437 to fees, totaling a monthly cost of $2,012. As of December 31, 2017, $0 remains outstanding.

During 2017 the Company entered into 16 loan agreements totaling an aggregate of $818,328 with, a related party. The notes have an interest rate of 8.0% and initial maturity dates from March 2018 to July 2018. A portion of these loans were retired in accordance with the MA equity interest sale agreement (see note 3). As of December 31, 2017, $81,231 still remains outstanding.

Note 10—DERIVATIVE LIABILITIES

Under ASC-815 the conversion options embedded in the notes payable described in Note 9 require liability classification because they do not contain an explicit limit to the number of shares that could be issued upon settlement. In addition, all of the Company's outstanding common stock warrants include price protection clauses and are accounted for as derivative liabilities.

The following table summarizes the changes in the derivative liabilities during 2016 and 2017:

Derivative Liability Table

Balance as of December 31, 2016	$	2,925,627

Grant date fair value		2,068,299
Extinguished		(1,244,186	)
Change in fair value		812,892

Balance as of December 31, 2017	$	4,562,632

During 2017 and 2016, the aggregate loss on derivative liabilities was $2,371,599 and $3,827,703, respectively, consisting of initial derivative expense of $1,558,707 and $2,837,538 respectively, which was in excess of debt at inception, and the change in the fair value of the derivative liabilities.

The Company uses the Black Scholes Option Pricing Model to value its convertible debt and warrant derivative liabilities based upon the following assumptions:

	December 31, 2017			December 31, 2016

Dividend yield		0	%		0	%
Expected volatility		80	%		80	%
Risk-free interest rate	0.20% to 1.06		%	0.29% to 0.35		%
Expected life (years)	0.00 to 0.39			0.01 to 1.38

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Note 11—STOCKHOLDERS' EQUITY

Preferred Stock

On August 14, 2015 the Company filed a Definitive Information Statement with the SEC on Form 14C with regard to changes in its capital structure. On October 1, 2015 the Company filed an Amendment to its Articles of Incorporation authorizing 50 million shares of $0.001 par value Preferred Stock. The preferred shares available for issuance are 10,000,000 Series A Convertible Preferred Stock, 5,000,000 Series B Convertible Preferred Stock, 10,000,000 Series C Convertible Preferred Stock, 12,500,000 Series D Preferred Stock, and 12,500,000 Series E Preferred Stock.

The Series A Preferred Stock does not have voting rights and earns a Series A Preferred Stock dividend of 5% annually and has an expiration date of February 1, 2022. The Company shall pay the amount due on the Maturity Date in kind with shares of Common Stock. The number of shares of Common Stock to be issuable to a Holder on the Maturity Date (the "Maturity Shares") shall be equal to the quotient of (x) the aggregate Liquidation Preference for such Holder's Shares on the Maturity Date divided by (y) the Conversion Price in effect as of the Maturity Date. On or before the third (3rd) Business Day following the Maturity Date (the "Maturity Share Delivery Date"), the Company must deliver to each Holder the Maturity Shares issuable to such Holder. In the event of any liquidation, dissolution or winding up of the Company, either voluntarily or involuntarily, each Holder shall be entitled to receive prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of any Junior Stock, an amount (the "Liquidation Preference") equal to (A) $1,000 per Share held by such Holder, plus (B) a further amount equal to any Dividends accrued but unpaid on such Shares. If, upon such liquidation, dissolution or winding up of the Company, the assets of the Company available for distribution to the stockholders of the Company are insufficient to provide for the payment of the full aforesaid preferential amount, such assets as are so available shall be distributed among the Holders in proportion to the relative aggregate Liquidation Preferences of the Shares held by such Holders. The Liquidation Preference shall be appropriately adjusted for any stock splits, stock combinations, stock dividends or similar recapitalizations.

The Series B Preferred Stock is convertible in accordance with the terms of the Certificate of Designations, does not pay a dividend, and contains preferential voting rights. On August 14, 2015 the Company filed a Definitive Information Statement with the SEC on Form 14C increased the voting rights from a ratio of 200 votes for each share of Series B Preferred Stock to 1,000 votes for each share of Series B Preferred Stock. In the event of any liquidation, dissolution or winding up of the Company, either voluntarily or involuntarily, each Holder shall be entitled to receive prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of any Junior Stock, an amount (the "Liquidation Preference") equal to $0.001 per Share held by such Holder, or such other amount as any Securities Purchase Agreement under which the Shares are issued may provide. If, upon such liquidation, dissolution or winding up of the Company, the assets of the Company available for distribution to the stockholders of the Company are insufficient to provide for the payment of the full aforesaid preferential amount, such assets as are so available shall be distributed among the Holders in proportion to the relative aggregate Liquidation Preferences of the Shares held by such Holders. The Liquidation Preference shall be unaffected for any stock splits, stock combinations, stock dividends or similar recapitalizations.

The Series C Preferred Stock is convertible and has no voting rights and has an expiration date for redemption to February 1, 2022. The Company shall pay the amount due on the Maturity Date in kind with shares of Common Stock. The number of shares of Common Stock to be issuable to a Holder on the Maturity Date (the "Maturity Shares") shall be equal to the quotient of (x) the aggregate Liquidation Preference for such Holder's Shares on the Maturity Date divided by (y) the Conversion Price in effect as of the Maturity Date. On or before the third (3rd) Business Day following the Maturity Date (the "Maturity Share Delivery Date"), the Company must deliver to each Holder the Maturity Shares issuable to such Holder. In the event of any liquidation, dissolution or winding up of the Company, either voluntarily or involuntarily, each Holder shall be entitled to receive prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of any Junior Stock, an amount (the "Liquidation Preference") equal to (A) $0.001 per Share held by such Holder. If, upon such liquidation, dissolution or winding up of the Company, the assets of the Company available for distribution to the stockholders of the Company are insufficient to provide for the payment of the full aforesaid preferential amount, such assets as are so available shall be distributed among the Holders in proportion to the relative aggregate Liquidation Preferences of the Shares held by such Holders. The Liquidation Preference shall be appropriately adjusted for any stock splits, stock combinations, stock dividends or similar recapitalizations.

The conversion rates for Series A and C Preferred Stock are 1:100 to common stock. The conversion rate for Series B convertible stock is 1:200. . Series B was convertible contingent on certain liquidation events such as mergers and sales, which occurred. No Series of Preferred Stock is affected by reverse splits or recapitalizations.

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The Company's Series D and Series E Preferred shares terms and conditions are not yet determined and neither certificates of designation have been filed with the State of Nevada.

The Company and ICPI have engaged in a total of six investment agreements between the time of January 2011 and April 2016, with the last amendment to Investment Agreement No. 6 in November 2016. All of the investment agreements between ICPI and the Company provide for Series A Preferred Stock to be issued by the Company upon a cash investment provided to the Company by ICPI. ICPI makes up the majority of the Series A Preferred Stock outstanding at December 31, 2015 and 2016. In April 2016, pursuant to a Settlement Agreement with ICPI, all remaining Series A Warrants have been retired in exchange for the issuance of Series C Preferred Stock. A total of 2,200,000 Series C Preferred Shares were issued to ICPI in exchange for the retirement of all remaining Series A Warrants and the waiver of unpaid dividends on Series A Preferred stock held by ICPI for the years 2014, 2015 and 2016.

Total stock-based compensation recognized during 2017 totaled $67,310, consisting of 387,500 Series B Preferred stock and 37,334 Series C Preferred stock issued for services. Total stock-based compensation recognized during 2016 totaled $79,900 consisting of 60,000 common stock and 77,500 Series C Preferred stock issued for services. Total stock-based compensation recognized during 2015 totaled $1,221,981, consisting of 522,208 common shares and 50,000 Series A preferred shares, 575,000 Series B preferred shares and 803,000 Series C preferred shares, issued for services.

Series A

In 2016, the Company issued an aggregate of 61,306 Series A Preferred Stock for settlement, valued at a total of $30,652.

During 2016, 691,629 shares of Series A Preferred stock were converted into 138,635 common shares.

Total Series A Preferred shares outstanding as of December 31, 2016 were 230,401.

In 2017, 15,337 shares of Series A Preferred stock were converted into 1,533,700 shares of common stock.

Total Series A Preferred shares outstanding as of December 31, 2017 were 215,139.

Series B

Total Series B Preferred shares outstanding as of December 31, 2016 were 1,762,500.

In 2017, the Company issued an aggregate of 387,500 Series B Preferred Stock to Board members in recognition of obtaining the operating license for MA and Associates, LLC valued at $56,110.

Total Series B Preferred shares outstanding as of December 31, 2017 were 2,150,000

Series C

In 2016, the Company issued an aggregate of 2,277,500 Series C Preferred Stock for services consisting of 2,200,000 shares to ICPI per the previously disclosed settlement agreement and the remaining 77,500 shares to marketing consultants.

In 2016, the Company sold an aggregate of 128,572 Series C Preferred Stock for cash proceeds of $90,000.

During 2016, 1,835,697 Series C Preferred Stock were converted into 734,279 common shares.

Total Series C Preferred shares outstanding as of December 31, 2016 were 2,621,375

During 2017, the Company issued an aggregate of 37,334 Series C Preferred Stock for services.

Total Series C Preferred shares outstanding as of December 31, 2017 were 2,647,709

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Series D&E

In 2017 up to the date of the issuance of these financial statements, there have been no issuances or sales of Series D Preferred Stock or Series E Preferred Stock, as they have not been approved for issuance.

Common Stock

In 2018, the Company filed a Form 14-C in order to increase its authorized shares from 3,000,000,000 to 40,000,000,000. In March 2019, the Company withdrew the Form 14-C due to financial constraints.

Issuances

In 2016, the Company issued a total of 240 common shares for services.

In 2016, the Company issued an aggregate of 8,205,015 common shares for the conversion of debt and accrued interest totaling $1,042,688.

In 2017, the Company issued 601,471,033 common shares for the conversion of debt valued at $853,506.

Preferred Stock Warrants

In 2016, pursuant to a Settlement Agreement with ICPI, all remaining Series A Warrants have been retired in exchange for the issuance of Series C Preferred Stock. A total of 1,700,000 Series C Preferred Shares were issued to ICPI in exchange for the retirement of all remaining Series A Warrants and the waiver of unpaid dividends on Series A Preferred stock held by ICPI for the years 2014, 2015 and 2016. Additionally, 500,000 Series C preferred shares were issued to ICPI for settlement of liability to issue shares for services.

As of December 31, 2016 and 2017, and up to the date of these financial statements, no Preferred stock warrants were outstanding.

Common Stock Warrants

As of December 31, 2016 and December 31, 2017, no warrants for common stock were outstanding. In addition, none were issued up to the date of these financial statements.

On June 22, 2015 Typenex Co-Investments, LLC submitted a cashless warrant Notice of Exercise seeking 529,682 shares pursuant to a Warrant dated on or about May 14, 2014. The Company disputed the Notice of Exercise due to what the company believes was bad faith upon the holder acting in such a fashion to deflate the Company's stock price in order to obtain more share under the Warrant. On or about July 29, 2015 the Company permitted Typenex to submit a new Notice of Exercise for 45,000 shares. It is the Company's position that Typenex is not entitled to any additional shares under the Warrant. The Company and Typenex have reached an agreement in principal to resolve this dispute. Under the terms of the proposed settlement, Typenex will be issued common stock of the Company in the total aggregate value of $50,000. Typenex is prohibiting from holding more than 4.99% of the outstanding common stock of the Company and will be subject to leak out provisions restricting the amount of stock of the Company that sold. The stock was issued in 2016 and is included in the common shares issued for conversion of debt.

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Note 12—INCOME TAXES

The Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes. During 2016 and 2017, the company incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $12,436,000 at December 31, 2017, and will expire in the years 2032 – 2035.

The Company has not yet filed its 2017 Federal Tax Return due to lack of financial resources. Therefore, the tax information below is as up to date as the Company can present it at this point in time and is subject to change.

Internal Revenue Section 382 restricts the ability to use these carryforwards whenever an ownership change as defined occurs. A change in ownership may be deemed to have occurred, which may limit the net operating loss carry forward value pursuant to Section 382 of the Tax Code.

At December 31, 2017, deferred tax assets consisted of the following:

Deferred tax assets
Net operating losses	$	4,850,000
Less: valuation allowance		(4,850,000	)
Net deferred tax asset	$	-

At December 31, 2016, deferred tax assets consisted of the following:

Deferred tax assets
Net operating losses	$	4,389,477
Less: valuation allowance		(4,389,477	)
Net deferred tax asset	$	-

A reconciliation of the U.S. Federal statutory tax rate to our annual tax rate is as follows:

	2017			2016

U.S. Federal statutory tax rate		35.0	%		35.0	%
State income tax, net of U.S. Federal tax benefit		6.5	%		6.5	%
Change in valuation allowance		(41.5	%)		(41.5	%)
Annual tax rate		0.0	%		0.0	%

Note 13—COMMITMENTS

As of December 31, 2016, the Company was still obligated to pay the remaining portion under the original 2014 40% investment agreement with MA and Associates, LLC, consisting of $678,000 of cash and 50,000 shares of Series C Preferred Stock (valued at $35,000 as of December 31, 2016), totaling $713,581 and included in contingent consideration liability on the accompanying balance sheet and will be issued in the future after the testing laboratory is operational.

On or about April 21, 2017, Eri Eveland filed a Complaint in District Court of Denver County Colorado against Harris Lee Colorado, LLC, Harris Lee Holdings, LLC and Pazoo Inc. Ms. Eveland is a former employee of Harris Lee Colorado, LLC and is claiming less than $15,000 in unpaid salary/wages. Inasmuch as Ms. Eveland was not an employee of Harris Lee Holdings, LLC nor Pazoo, Inc., her claims against the Company are derivative in nature and based on theories of corporate alter ego. The Company disputes any liability however as of May 2018, Pazoo, Inc. entered into a settlement with Ms. Eveland in the amount of $5,000 cash and 40,000 Series C Preferred Shares of stock. As of the current date, the Company has completed its obligation of the settlement agreement.

On or about June 21, 2017 the Company received a Subpoena from the United States District Court for the District of New Jersey seeking documents in aid of certain legal actions (civil and criminal) surrounding the sale of the Company's stock in 2012-2013. The Company has complied with the Subpoena and has provided the requested documents. Neither the Company nor any of its officers and/or directors have been named as defendants in either the civil or criminal matter.

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Note 14—SUBSEQUENT EVENTS

The company issued an aggregate of 2,074,969,990 common shares to debt holders valued at a total of $159,238 for conversions pursuant to convertible notes.

In February 2018, the Company entered into one convertible note agreements for a total of $28,500. The interest rate is 12% and the conversion term is a 45% discount to market over the prior 20 days.

In November 2019, the Company issued 1,090,000 Series B preferred stock in exchange for services to Board Members and milestones hit in ramping up the testing lab under MA & Associates LLC.

In May 2020, the Company issued 1,140,000 Series C preferred stock in exchange for a Bridge Loan of $150,000 and the settlement with Ms Eveland.

The company entered into a Bridge Loan in the aggregate amount of $150,000 whose proceeds are to be used to get the Company’s SEC filings up to date. As of May 2018, Pazoo, Inc. entered into a settlement with Ms. Eveland in the amount of $5,000 cash and 40,000 Series C Preferred Shares of stock valued at $1200 at the time of issuance. As of the current date, the Company has completed its obligation of the settlement agreement.

The Global COVID-19 Pandemic Could Adversely Affect Our Business Operations. The Company, including its 30% equity investee, MA & Associates LLC, could be adversely affected by the worldwide Covid-19 pandemic in, among others, the following ways: (i) Travel and tourism disruptions in Nevada and specifically, Las Vegas, could affect the demand for cannabis which in turn could affect current efforts to ramp up operations and become cash flow positive; (ii) Cannabis, and cannabis derived products, could experience production interruptions due to infected workers that could in turn affect the demand for MA's testing services; (iii) If dispensaries are forced to close or scale back sales due to the pandemic, and/or experience disruptions in staffing, that could also disrupt MA's business and its ability to collect on accounts receivable; (iv) Any disruption in the supply chain of critical supplies needed to perform testing could interrupt the processing of test samples; and (v) In a highly regulated and specialized industry such as the testing of cannabis products, the extended absence of any key employee due to illness could cause a delay or suspension of testing. As of the date of this report, none of the aforementioned has occurred.

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

None.

Item 9A. Controls and Procedures

As of December 31, 2017, management, with the participation of our Chief Executive Officer and Acting Chief Financial Officer, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Acting Chief Financial Officer, to allow timely decisions regarding required disclosures. Because of inherent limitations, any controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance of achieving the desired control objective. Based on this evaluation, our Chief Executive Officer and Acting Chief Financial Officer concluded that, as of December 31, 2017, the design and operation of our disclosure controls and procedures were not effective at the reasonable assurance level.

There has been no change in our internal control over financial reporting during the year ended December 31, 2017, that has materially affected, or is reasonably likely to materially affect, our 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) of the Exchange Act. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Under the supervision and with the participation of our management, including our Chief Executive Officer and Acting Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in the 2013 Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management's assessment included evaluation of such elements as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and our overall control environment. Based on this evaluation, our management concluded that, as of December 31, 2017, our internal control over financial reporting was not effective based on such criteria. Contributing to our deficiency is the Company's small size and the Company's lack of an Audit Committee. Management continues to monitor and assess the controls to ensure compliance. As of the date of this Report, the material weaknesses discovered were as follows:

We did not maintain sufficient personnel with an appropriate level of technical accounting knowledge, experience, and training in the application of generally accepted accounting principles commensurate with our complexity and our financial accounting and reporting requirements.

(i) Due to the size of the Company, the Company does not have an internal accounting staff to provide checks and balances, thus one individual primarily controls the accounting and finance functions with limited review by other members of management. We do not have sufficient policies and procedures in place to provide for multiple levels of supervision and review.

(ii) We have inadequate segregation of duties.

(iii) We lack the necessary corporate accounting resources to maintain adequate segregation of duties

(iv) We did not perform an effective risk assessment or monitor internal controls over financial reporting.

The Company expects that as we grow, an Audit Committee (which requires outside Board Members) will be added, as well as internal accounting staff to provide further internal checks and balances.

Item 9B. Other Information

None.

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PART III

Item 10. Directors, Officers, and Corporate Governance

Our directors serve until their successors are elected and qualified. Our directors elect our officers to a term of one (1) year and they serve until they are reelected or their successors are duly elected and qualified, or until they are removed from office. The board of directors has no nominating or compensation committees.

The name, age, and position of our present officers and directors is set forth below:

Name	Age	Title
Steven Basloe	69	President, Chairman of the Board of Directors

Ben Hoehn	39	Chief Operating Officer Acting Chief Financial Officer, Director

Steven Basloe – President, and Executive Vice President of Marketing/Sales, Chairman of the Board

Steven Basloe holds a Bachelor of Science degree and a Master in Business Administration in Marketing, as well as a Juris Doctorate, all from Syracuse University. Mr. Basloe brings over three decades of sales and marketing experience to Pazoo and will play a key role in developing strategic plans for advertising, sales, marketing, and distribution. Since 1996, Mr. Basloe has served as owner of SMB Marketing Group, Inc. where he successfully provided consulting services in creative and strategic planning to major corporations such as Bertelsmann, Warner's, Samsung, S. Rothschild, and Alfred Haber Distribution. He was chosen to serve as the Chairman of the Board of Directors based on his previous success in operating SMB Marketing Group, a full service marketing firm providing strategic marketing, sales consulting services, planning and creative production for marketing, advertising and promotions. He maintained 100% responsibility for budgeting, planning and execution for his client's campaigns based strategy and planning.

Ben Hoehn – Chief Operating Officer, acting Chief Financial Officer

Ben Hoehn has both a Bachelor and a Master of Science in Criminal Justice from the University of Cincinnati. He was formerly the Chief Operating Officer for all 3 of DMC Athletics and Rehabilitation's physical therapy and personal training facilities, in New Jersey as well as DMC's Nutritional Line. He had held this post since April 2010, managing its current staff, handling all day to day business operations and implementing new policies and procedures to ensure patient satisfaction. Prior to his work at DMC, from 2007 to 2010 he was employed in Cincinnati by Community Police Partnering Center, a non-profit organization that worked with the Cincinnati Police Department in crime and problem solving techniques. His duties included developing, extracting, and analyzing criminal data as well as providing technical and analytical assistance to all stages of the criminal problem solving process.

Possible Potential Conflicts

The OTC Pink Sheets on which shares of our common stock is quoted does not currently have any director independence requirements.

No member of management will be required by us to work on a full time basis. Accordingly, certain conflicts of interest may arise between us and our officers and directors in that they may have other business interests in the future to which they devote their attention, and may be expected to continue to do so although management time must also be devoted to our business. As a result, conflicts of interest may arise that can be resolved only through their exercise of such business judgment as is consistent with each officer's understanding of his fiduciary duties to us.

Currently we have two officers and directors and will seek to add additional officer(s) and/or director(s) as and when the proper personnel are located and terms of employment are mutually negotiated and agreed, and we have sufficient capital resources and cash flow to make such offers.

We cannot provide assurances that our efforts to eliminate the potential impact of any conflicts of interest will be effective.

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Code of Business Conduct and Ethics

In January 1, 2011, we adopted a Code of Ethics and Business Conduct that is applicable to our future employees, concurrently with adopting a separate Code of Ethics for Principal Executive and Senior Financial Officers or persons performing similar functions. A code of ethics is a written standard designed to deter wrongdoing and to promote:

	·	honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships

	·	full, fair, accurate, timely,(based on available resources) and understandable disclosure in reports and documents that the Company files with, or submits to, the SEC and in other public communications made by the Company

	·	compliance with applicable governmental laws, rules and regulations

	·	the prompt internal reporting of violations of the Code of Ethics to an appropriate person or persons identified in the Code of Ethics; and

	·	accountability for adherence to the Code of Ethics.

Copies of our Code of Ethics and Business Conduct and Code of Ethics for Principal and Senior Financial Officers were filed as Exhibit 99.2 of the Company's Form S-1 filed with the Securities and Exchange Commission on November 18, 2011.

Board of Directors

Our directors hold office until the completion of their terms of office, which is not longer than one year, or until they have been reelected or their successor(s) have been elected. On November 16, 2019 each of our directors was reelected for a one year term. Therefore, our director's terms of office expire on November 16, 2020 All officers are appointed annually by the board of directors and, subject to existing employment agreements (of which there is currently one), serve at the discretion of the board. Currently, directors receive no compensation for their role as directors but may receive compensation for their role as officers. In hope of attracting exemplary professionals, the company reserves the right to compensate outside directors when such outside directors are elected.

Involvement in Certain Legal Proceedings

During the past five years, no present director, executive officer or person nominated to become a director or an executive officer of us:

(1) had a petition under the federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

(2) was convicted in a criminal proceeding or subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

(3) was subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any of the following activities:

i. acting as a futures commission merchant, introducing broker, commodity trading advisor commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

ii. engaging in any type of business practice; or

iii. engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws; or

(4) was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of an federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (3) (i), above, or to be associated with persons engaged in any such activity; or

(5) was found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and for which the judgment has not been reversed, suspended or vacated.

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Committees of the Board of Directors

Concurrent with having sufficient members and resources, our board of directors will establish an audit committee and a compensation committee. We believe that we will need a minimum of five directors to have effective committee systems. The audit committee will review the results and scope of the audit and other services provided by the independent auditors and review and evaluate the system of internal controls. The compensation committee will manage any stock option plan we may establish and review and recommend compensation arrangements for the officers. No final determination has yet been made as to the memberships of these committees or when we will have sufficient members to establish committees. See "Executive Compensation" hereinafter.

Item 11. Executive Compensation

We will reimburse all directors for any expenses incurred in attending directors' meetings provided that we have the resources to pay these fees. At the current time we do not have officers and directors liability insurance. We will consider applying for officers and directors liability insurance at such time when we have the resources to do so.

Summary Executive Compensation Table

The following table shows, for the fiscal year ended December 31, 2017 and the fiscal year ended December 31, 2016, compensation awarded to or paid to, or earned by, our Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer.

Executive Compensation.

Summary Compensation Table
Name and principal position (a)	Year (b)	Salary ($) (c)		Bonus ($) (d)		Stock Awards ($) (e)		Option Awards ($) (f)		Non-Equity Incentive Plan Compensation ($) (g)		Nonqualified Deferred Compensation Earnings ($) (h)		All Other Compensation ($) (i)			Total ($) (j)
Steven Basloe,	2017		-		-		-		-		-		-	2,500-			2,500-
President and Director	2016		-		-		-		-		-		-		-			-

David Cunic,(3)	2017		-		-		-		-		-		-		10,270			10,270
CEO and Director	2016		-		-		-		-		-		-		18,626	(1)		18,626	(1)

Ben Hoehn,	2017				-		-		-		-		-		18,500			18,500
COO/Acting CFO	2016		24,680		-		-		-		-		-		3,892	(2)		28,572

Antonio Del Hierro	2017		-		-		-		-		-		-		-			-
Director (4)	2016		34,029		-		-		-		-		-		-			34,029

David Lieberthal	2017		-		-		-		-		-		-		-			-
Director (5)	2016		37,019		-		-		-		-		-		-			37,019

______________

⁽¹⁾	David Cunic earned $18,626 as a 1099 consultant.
⁽²⁾	Ben Hoehn earned $24,680 as a Pazoo employee and $3,892 as a 1099 consultant.
⁽³⁾	David Cunic resigned from the Board of Directors in August of 2017.
⁽⁴⁾	Antonio Del Hierro resigned from the Board of Directors in January of 2018.
⁽⁵⁾	David Lieberthal resigned from the Board of Directors in April of 2018.

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Item 12. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, as of November 13, 2020, the beneficial ownership of our common stock by each executive officer and director, by each person known by us to beneficially own more than 5% of our common stock and by the executive officers and directors as a group. Except as otherwise indicated, all shares are beneficially owned directly, and the percentage shown is based on 2,688,214,838 shares of common stock.

Officers and Directors	Series B		Series B Vote		Common Stock		Combined Vote (Series B + Common)		% of Voting Power
Steve Basloe		1,000,000		1,000,000,000		150,000		1,000,150,000		17.28	%
Ben Hoehn		750,000		750,000,000		25,000		750,025,000		12.96	%
		1,750,000		1750,000,000		125,000		1,750,125,000		30.24	%

Outstanding – October 31, 2020		3,240,000		3,240,000,000		2,688,214,838		5,788,214,838

___________

⁽¹⁾	Mr. Basloe's beneficial ownership includes 10,000 shares of stock issued in the names of his four children at his request and direction.

As of November 20, 2020, shares of the Company's common stock issued and outstanding were 2,688,214,838.

Preferred stock voting rights are as follows: Series A contain no voting rights, Series B has voting rights of 1000:1, and Series C has no voting rights.

As used in this table, "beneficial ownership" means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have "beneficial ownership" of any security that such person has the right to acquire within 60 days after such date.

The persons named above have full voting and investment power with respect to the shares indicated. Under the rules of the Securities and Exchange Commission, a person (or group of persons) is deemed to be a "beneficial owner" of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security.

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

The following is a summary of transactions during the 2016 and 2017 fiscal years between the Company and its executive officers, directors, nominees, principal shareholders and other related parties involving amounts in excess of $120,000 or which the Company has chosen to voluntarily disclose.

In August 2016, Pazoo, Inc. entered into a loan agreement with David Cunic, Company Former CEO, and totaling $5,000. The note has an interest rate of 0.70% and the maturity date is August 2018. As of December 2016, $3,300 remains outstanding.

In September 2016, Pazoo, Inc. entered into a loan agreement with Steve Basloe, Company President, and totaling $2,500. The note has an interest rate of 0.70% and the maturity date is September. In July 2013, the Company entered into a consulting agreement with an affiliate of Mr. Basloe, a board member and President of the Company. The agreement provides for consulting on marketing-related services for the Company. The amounts paid under this agreement for the years ended December 31, 2016 and December 31, 2017 were $46,617 and $17,000, respectively.

As a result of the limited operating history of the Company, and its limited financial resources, our management believes that we will have difficulty in attracting independent directors.

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Item 14. Principal Accountant Fees and Services

Our Board of Directors is responsible for the selection, appointment, retention and dismissal of our independent auditors and pre-approves all services to be provided by our independent auditors. All of the above services and fees were reviewed and approved by our Board of Directors either before or after the respective services were rendered. Our Board of Directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services is compatible with maintaining our independent auditors' independence.

The following table summarizes the fees billed to the Company for professional services tendered by Friedman, LLP, for the years ended December, 31, 2017 and 2016:

	2017		2016

Audit fees	$	95,650	$	60,900
Audit related fees		-		-
Tax fees		-		-
All other fees				3,000
Total	$	95,650	$	63,900

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PART IV

Item 15. Exhibits and Financial Statement Schedules

Exhibit Number		Description

31.1		Certification of Steve Basloe, Chairman and Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
31.2		Certification of Ben Hoehn, Acting Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
32.1		Certification of Steve Basloe, Chief Executive Officer pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Ben Hoehn, Acting Chief Financial Officer pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURE

In accordance with the requirements 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.

	PAZOO, INC.

Date: December 7, 2020	By:	/s/ Steve Basloe
		Steve Basloe, Individually and as
		Chief Executive Officer and Director
		(Principal Executive Officer)

	PAZOO, INC.

Date: December 7, 2020	By:	/s/ Benjamin Hoehn
		Benjamin Hoehn, Individually and as
		Chief Operating Officer, Acting Chief Financial Officer and Director
		(Principal Financial and Accounting Officer)