POWERDYNE INTERNATIONAL, INC.

The Company considers intangible asset - cryptocurrency to be revenue that has been earned, but for which no cash has been received. Intangible asset consists of crypto mined coins that are held in a digital wallet and have not been cashed out. The basis of the valuation is the market price of the Sia coins on March 31, 2021. The Company considers this to be an intangible asset under GAAP guidelines. The Company had $41,365 of intangible asset as of March 31, 2021 and $4,787 as of December 31, 2020. Revenue is recognized on the last date of the quarter based on the transaction price of the Sia coin at that date times the number of coins in the wallet. Unrealized gains and losses are recognized quarterly based on the fluctuation in the market value of the coin versus the value booked when obtained.

During the year ended December 31, 2018, Powerdyne International, Inc. terminated the 15-year contract to lease power generating equipment, due to the third-party lessee’s inability to obtain financing.

We are an operational company which has experienced losses since our inception, with the exception of the current quarter ended March 31, 2021 in which we had a net income of $11,961. Our sources of cash to date have been capital invested by shareholders and venture capital investors/lenders. Our cumulative revenue of $49,716 has come from two sources: 1) $1,240 from our one equipment lease agreement, which was terminated in September 2017 due to a natural disaster; and 2) $48,476 from crypto-mining revenue, of which $3,521 was received during the year ended December 31, 2020 and $36,577 was received during the three months ended March 31, 2021.

During the three months ended March 31, 2021 total operating expenses increased 389.80% to $23,269 from $4,751 for the three months ended March 31, 2020. The increase from the three months ended March 31, 2020 to the three months ended March 31, 2021 is mainly due increases of $6,665 in filing fees, $11,953 in legal and accounting expense, $337 in other taxes expense, and $48 in telephone expense. These increases were offset by a decrease of $410 in stock registration fees and minor decreases in bank service charges, payroll processing fees and office supplies expense.

As of March 31, 2021, and December 31, 2020, we had working capital deficits of $151,366 and $127,499, respectively. For the three months ended March 31, 2021 we had a $2,925 increase in cash compared to the year end. The total net cash provided by operations of $14,655 was primarily due to net income from operations of $11,961 plus increases in depreciation expense of $750 and $1,944 in accrued expenses. The total net cash used in investing activities of $36,577 was due to an increase in intangible asset – Cryptocurrency. The total net cash provided by financing activities of $24,847 was due to proceeds of due to related party of $24,250 and proceeds from notes payable stockholder of $597.