What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-15 compared with 2021-08-19 · 224 added, 231 removed, 388 unchanged (54% of the section changed)

1 unchanged sentence

BALANCE SHEETS

June 30, 2021

December 31, 2020

Current assets:

Deposits on inventory

Deposits on inventory - related party

Deposits on inventory -

related party

Accounts receivable

Other current assets

Assets from discontinued operations

Total current assets

Investment in securities at cost

current assets

Investment in securities

Right-of-use asset

Property and equipment, net of accumulated depreciation

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Property and equipment,

net of accumulated depreciation

LIABILITIES AND STOCKHOLDERS’

Current liabilities:

3 unchanged sentences

Short-term advances payable

Short-term advances payable - related parties

Short-term advances payable

- related parties

Accrued liabilities

Accrued payroll and compensation expense

Accrued interest, current portion

Convertible debenture, current portion, net of discounts

Accrued payroll and compensation

Accrued interest, current

Convertible debenture,

current portion, net of discounts

Note payable, current portion

Note payable to stockholders and members

Note payable to stockholders

Derivative liability

Liabilities from discontinued operations

Total current liabilities

from discontinued operations

current liabilities:

Lease liability, long term

Accrued interest, net of current portion

Note payable, net of current portion

Convertible debenture, net of current portion, net of discount

Total liabilities

Accrued interest, net of

current portion

Note payable, net of current

debenture, net of current portion, net of discount

Commitments and contingencies

2 unchanged sentences

100,000,000 shares authorized;

4,945,417 and 4,720,417 shares issued and outstanding at June 30, 2021, and December 31, 2020, respectively

4,945,417 and 4,720,417 shares issued and outstanding at September 30, 2021, and December

31, 2020, respectively

Additional paid-in capital

Accumulated deficit

( 78,811,860 )

( 77,929,672 )

Total stockholders’ deficit

stockholders’ deficit

( 41,573,539 )

( 40,698,101 )

Total liabilities and stockholders’ deficit

liabilities and stockholders’ deficit

accompanying notes are an integral part of these unaudited consolidated financial statements.

STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended June 30,

Six Months Ended June 30,

September 30,

Cost of sales

1 unchanged sentence

Employee costs

Selling, general and administrative expenses

Total operating expenses

Income (loss) from operations

general and administrative expenses

operating expenses

(loss) from operations

Other income (expense)

1 unchanged sentence

Loss on disposal of equipment

Gain (loss) on derivative valuation

Total other expense

Net loss from continuing operations

Loss from discontinued operations

Gain on forgiveness of

Gain (loss) on derivative

other expense

loss from continuing operations

from discontinued operations

$ ( 304,648 )

2 unchanged sentences

$ ( 776,100 )

Net loss from continuing operations per common share, basic and diluted

Net loss from discontinued operations per common share, basic and diluted

Net loss per common share, basic and diluted

Basic and diluted weighted average common shares outstanding

loss from continuing operations per common share, basic and diluted

loss from discontinued operations per common share, basic and diluted

loss per common share, basic and diluted

and diluted weighted average common shares outstanding

accompanying notes are an integral part of these unaudited consolidated financial statements.

STATEMENTS OF STOCKHOLDERS’ DEFICIT

THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 (UNAUDITED)

Additional Paid-in

THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2021

Balance, December 31, 2019

1 unchanged sentence

$ ( 41,234,691 )

Common stock issued for conversion of accrued

interest , shares

Stock option expense

Common stock issued for conversion of accrued interest

Common stock issued for conversion of accrued interest, shares

Balance, March 31, 2020

4 unchanged sentences

( 41,778,377 )

STATEMENTS OF STOCKHOLDERS’ DEFICIT

THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 (UNAUDITED)

Additional Paid-in

Balance, September 30, 2020

$ ( 79,237,906 )

$ ( 42,010,735 )

Balance, December 31, 2020

1 unchanged sentence

$ ( 40,698,101 )

Common stock issued for conversion of accrued interest

Common stock issued for conversion of accrued

Balance, March 31, 2021

4 unchanged sentences

( 41,268,891 )

Balance, September 30,

$ ( 78,811,860 )

$ ( 41,573,539 )

accompanying notes are an integral part of these unaudited consolidated financial statements.

STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended June 30,

Cash flows from operating activities

Net loss from continuing operations

Months Ended September 30,

Cash flows from operating

Net loss from

continuing operations

$ ( 767,404 )

$ ( 660,896 )

Adjustments to reconcile net loss to net cash used in operating activities

Adjustments to reconcile

net loss to net cash used in operating activities

Depreciation expense

3 unchanged sentences

Stock option expense

Amortization of right-of-use asset to rent expense

Expenses paid on our behalf by a related party

Changes in operating assets and liabilities:

Gain on forgiveness of

Amortization of right-of-use

asset to rent expense

Expenses paid on our behalf

by a related party

Changes in operating assets

and liabilities:

Deposits on inventory

Deposits on inventory - related party

Deposits on inventory -

related party

Accounts receivable

4 unchanged sentences

Accrued payroll and compensation

Accrued interest

Net cash (used in) provided by continuing operating activities

Cash flows from investing activities

cash provided by continuing operating activities

Cash flows from investing

Purchase of equipment

Net cash used in investing activities

Cash flows from financing activities

cash used in investing activities

Cash flows from financing

Proceeds from bank overdraft

Proceeds from convertible loans payable

Proceeds from related-party loans

Repayments of related-party loans

Proceeds from convertible

loans payable

Proceeds from related-party

Repayments of related-party

Proceeds from loan payable

Repayments of loans payable

Net Cash used in financing activities

of loans payable

Net Cash used in financing

Net change in cash

Cash, beginning of period

Cash, beginning of

Cash, end of period

Supplemental disclosure of cash flow information

Cash paid for interest

Cash paid for income taxes

Supplemental disclosure of noncash investing activities

Initial measurement of derivative liability

Common stock issued for conversion of accrued interest

Supplemental disclosure

of cash flow information

paid for interest

paid for income taxes

Supplemental disclosure

of noncash investing activities

measurement of derivative liability

stock issued for conversion of accrued interest

accompanying notes are an integral part of these unaudited consolidated financial statements.

17 unchanged sentences

In the opinion of our management, all adjustments, including normal recurring

adjustments necessary to present fairly our financial position, as of June 30, 2021, and the results of our operations and cash flows

for the six months then ended have been included.

The results of operations for the interim period are not necessarily indicative of

the results for the full year ending December 31, 2021.

adjustments necessary to present fairly our financial position, as of September 30, 2021, and the results of our operations and cash

flows for the nine months then ended have been included.

The results of operations for the interim period are not necessarily indicative

of the results for the full year ending December 31, 2021.

of Consolidation

3 unchanged sentences

that we do not control, but over which we can exert significant influence, using the cost method.

unaudited consolidated financial statements as of and for the periods ended June 30, 2021 and 2020, include the accounts of CirTran Corporation

and our wholly owned subsidiaries:

unaudited consolidated financial statements as of and for the periods ended September 30, 2021 and 2020, include the accounts of CirTran

Corporation and our wholly owned subsidiaries:

CirTran Products Corp., LBC Products, Inc., and CirTran-Asia, Inc.

All intercompany balances and transactions

have been eliminated.

All intercompany balances

and transactions have been eliminated.

preparing the financial statements in accordance with US GAAP, management is required to make estimates and assumptions that affect the

10 unchanged sentences

We determine the transaction price associated with each deliverable based on the unique contract with

the customer, which is considered to be a stand-alone contract that we retain the right to accept or reject.

Revenue is recognized net

of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities.

the three and six months ended June 30, 2021, we recognized revenue of $ 15,000 and $ 30,000 , respectively, related to the performance

the customer, which is a stand-alone contract that we retain the right to accept or reject.

Revenue is recognized net of allowances for

returns and any taxes collected from customers, which are subsequently remitted to governmental authorities.

the three and nine months ended September 30, 2021, we recognized revenue of $ 0 and $ 30,000 , respectively, related to the performance

obligations under product development service agreements with customers.

6 unchanged sentences

Additionally, we have not recognized impairment losses related to the receivables from

these contracts during the three months ended June 30, 2021.

these contracts during the nine months ended September 30, 2021.

Additionally,

we recognized revenues of $ 55,656 and $ 1,290,055 during the three and six months ended June 30, 2021, respectively, related to the delivery

of product to our customers.

Each delivery is based on a unique customer purchase order, which is considered to be a stand-alone contract

we recognized revenues of $ 961,074 and $ 2,281,529 during the three and nine months ended September 30, 2021, respectively, related to

the delivery of product to our customers.

Each delivery is based on a unique customer purchase order, which is a stand-alone contract

that we retain the right to accept or reject.

10 unchanged sentences

adoption of the standard resulted in recording right-of-use (“ROU”) assets and operating lease liabilities of $ 29,185 as

of June 30, 2021.

of September 30, 2021.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future

11 unchanged sentences

rate to be 5 % based on our other borrowings secured by assets.

A summary of future payments due under the terms of the lease as of June

A summary of future payments due under the terms of the lease as of September

30, 2021, is as follows:

SUMMARY OF FUTURE MINIMUM LEASE PAYMENTS DUE

OF FUTURE MINIMUM LEASE PAYMENTS DUE

Total future payments

Implied interest

Operating lease liability as of December 31, 2021

Operating lease liability as of September

in Securities

cost-method investment consists of an investment in a private digital multi-media technology company that totaled $ 300,000 at June 30,

cost-method investment consists of an investment in a private digital multi-media technology company that totaled $ 300,000 at September

30, 2021, and December 31, 2020.

11 unchanged sentences

We did not record expenses for the impairment of long-lived assets

during the periods ended June 30, 2021 or 2020.

during the periods ended September 30, 2021 or 2020.

are stated at the lower of average cost or net realizable value.

3 unchanged sentences

indirect manufacturing costs to the manufacturing process.

Inventories consist of finished goods as we do not carry raw materials for

manufacturing products.

there is evidence that the inventory’s value is less than original cost, the inventory is reduced to market value.

4 unchanged sentences

These deposits are carried as a separate balance sheet

component and totaled $ 11,639 (non-related-party) and $ 81,821 (related-party) as of June 30, 2021, and $ 53,900 (non-related-party) and

$ 319,333 (related-party) as of December 31, 2020.

component and totaled $ 10,889 (non-related-party) and $ 228,730 (related-party) as of September 30, 2021, and $ 53,900 (non-related-party)

and $ 319,333 (related-party) as of December 31, 2020.

balances consisted of the following:

SCHEDULE OF INVENTORY

June 30, 2021

December 31, 2020

Finished goods

Raw materials

Reserves for obsolescence

Reserve for obsolescence

have outstanding stock options to directors and employees, which are described more fully in Note 12–Stock Options and Warrants.

6 unchanged sentences

equity-based compensation as a result of adopting ASC 718-10 and ASU 2018-07.

employee compensation was $ 0 and $ 56 for the six months ended June 30, 2021 and 2020, respectively.

employee compensation was $ 0 and $ 56 for the nine months ended September 30, 2021 and 2020, respectively.

Value of Financial Instruments

15 unchanged sentences

Derivative liabilities are measured using level 3 inputs.

SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES CARRIED AT FAIR VALUED MEASURED ON RECURRING BASIS

OF FINANCIAL ASSETS AND LIABILITIES CARRIED AT FAIR VALUED MEASURED ON RECURRING BASIS

September 30,

active markets

2 unchanged sentences

Derivative liabilities

loss per share (EPS) is calculated by dividing net loss available to common shareholders by the weighted-average number of common shares

loss per share (EPS) is calculated by dividing net loss available to common shareholders by the weighted-average number of common s hares

outstanding during each period.

2 unchanged sentences

There were 141,554,300

potentially issuable shares from the conversions of convertible debentures outstanding that were excluded in dilutive outstanding shares

for the three and six months ended June 30, 2021, due to the anti-dilutive effect these would have on net loss per share.

254,654,532 such shares issuable as of June 30, 2020.

We do not currently have adequate authorized but unissued shares to satisfy our

obligations should all instruments eligible to convert to common stock be exercised.

We are not currently contemplating an increase in

our authorized shares but may do so in the future.

potentially issuable shares from the conversions of convertible debentures outstanding that were excluded in dilutive outstanding

shares for the three and nine months ended September 30, 2021, due to the anti-dilutive effect these would have on net loss per share.

There were 160,186,365

such shares issuable

as of September 30, 2020.

We do not currently have adequate authorized but unissued shares to satisfy our obligations should all instruments

eli gible to convert to common stock be exercised.

are not currently contemplating an increase in our authorized shares but may do so in the future.

Issued Accounting Pronouncements

6 unchanged sentences

as a going concern.

We had a working capital deficiency of $ 36,611,977 as of June 30, 2021, and a net loss from continuing operations

of $ 501,438 during the six months ended June 30, 2021.

As of June 30, 2021, we had an accumulated deficit of $ 78,507,212 .

These conditions

raise substantial doubt about our ability to continue as a going concern.

We had a working capital deficiency of $ 37,840,853 as of September 30, 2021, and a net loss from continuing operations

of $ 767,404 during the nine months ended September 30, 2021.

As of September 30, 2021, we had an accumulated deficit of $ 78,811,860 .

These conditions raise substantial doubt about our ability to continue as a going concern.

ability to continue as a going concern is dependent upon our ability to successfully accomplish our business plan described in the following

29 unchanged sentences

SCHEDULE OF PROPERTY AND EQUIPMENT AND ESTIMATED SERVICE LIVES

June 30, 2021

December 31, 2020

Useful Life (years)

Furniture and office equipment

accumulated depreciation

Property and equipment, net

recorded $ 1,580 and $ 0 of depreciation expense during the six months ended June 30, 2021 and 2020.

Property and equipment,

recorded $ 2,389 and $ 0 of depreciation expense during the nine months ended September 30, 2021 and 2020.

5— RELATED-PARTY TRANSACTIONS

2 unchanged sentences

There were no repayments made during the periods presented.

At June 30, 2021, and December 31, 2020, the principal amount owing

on the note was $ 151,833 and $ 151,833 , respectively.

At September 30, 2021, and December 31, 2020, the principal amount

owing on the note was $ 151,833 and $ 151,833 , respectively.

March 31, 2008, we issued to this same family member, along with two other company shareholders, promissory notes totaling $ 315,000 ($ 105,000

3 unchanged sentences

We made no payments towards the outstanding notes during the periods presented.

The principal balance owing on the notes as of June 30,

The principal balance owing on the notes as of September

30, 2021, and December 31, 2020, was $ 72,466 and $ 72,466 , respectively.

the six months ended June 30, 2021, we made repayments to related parties of $ 30,000 and had other noncash reductions of $ 199,909 .

were $ 87,868 and $ 287,776 of short-term advances due to related parties as of June 30, 2021, and December 31, 2020, respectively.

advances are due on demand and included in current liabilities.

the nine months ended September 30, 2021, we made repayments to related parties of $ 214,421 and had other noncash reductions of $ 82,072 .

There were $ 18,852 and $ 287,776 of short-term advances due to related parties as of September 30, 2021, and December 31, 2020, respectively.

The advances are due on demand and included in current liabilities.

have agreed to issue stock options to Iehab Hawatmeh, our president, as compensation for services provided as our chief executive officer.

2 unchanged sentences

There were no options issued under this agreement during the

three months ended June 30, 2021.

There were options to purchase 6,000 shares of common stock that expired during the six months ended

June 30, 2021.

Hawatmeh held outstanding options to purchase 32,000 and 30,000 shares of common stock as of June 30, 2021, and December

31, 2020, respectively.

nine months ended September 30, 2021.

There were options to purchase 6,000 shares of common stock that expired during the nine months

ended September 30, 2021.

Hawatmeh held outstanding options to purchase 32,000 and 30,000 shares of common stock as of September

30, 2021, and December 31, 2020, respectively.

See Note 6–Other Accrued Liabilities and Note 12–Stock Options and Warrants.

of June 30, 2021, and December 31, 2020, we owed our president a total of $ 687,484 and $ 868,528 , respectively, in unsecured advances.

of September 30, 2021, and December 31, 2020, we owed our president a total of $ 474,948 and $ 868,528 , respectively, in unsecured advances.

The advances and short-term bridge loans were approved by our board of directors under a 5 % borrowing fee.

2 unchanged sentences

These amounts are included in our liabilities from discontinued operations.

of June 30, 2021, and December 31, 2020, we owed a total of $ 13,740 to a related party through trade payables incurred in the normal

course of business.

These amounts are shown as a separate related-party payable on the balance sheet as of each reporting date.

the six months ended June 30, 2021, we had a net decrease in deposits with a related-party inventory supplier totaling $ 234,512 .

related party is an entity controlled by our chief executive officer.

of September 30, 2021, and December 31, 2020, we owed a total of $ 13,740 and $ 13,740 to a related party through trade payables incurred

in the normal course of business.

These amounts are shown as a separate related-party payable on the balance sheet as of each reporting

the nine months ended September 30, 2021, we had a net decrease in deposits with a related-party inventory supplier totaling $ 90,603 .

The related party is an entity controlled by our chief executive officer.

All transactions were at a 2 % markup over the related-party’s

1 unchanged sentence

Total inventory purchases from the related party were $ 845,856 during the

six months ended June 30, 2021.

nine months ended September 30, 2021.

6— OTHER ACCRUED LIABILITIES

2 unchanged sentences

liabilities consist of the following:

SCHEDULE OF ACCRUED LIABILITIES

June 30, 2021

December 31, 2020

OF ACCRUED LIABILITIES

Tax liabilities

accrued liabilities as of June 30, 2021, and December 31, 2020, include a non-interest-bearing payable totaling $ 45,000 that is due on

Additionally, other accrued liabilities as of June 30, 2021, and December 31, 2020, include customer deposits totaling $ 832,678

accrued liabilities as of September 30, 2021, and December 31, 2020, include a non-interest-bearing payable totaling $ 45,000 that is

due on demand.

Additionally, other accrued liabilities as of September 30, 2021, and December 31, 2020, include customer deposits totaling

$ 819,495 and $ 751,645 , respectively.

payroll and compensation liabilities consist of the following:

SCHEDULE OF ACCRUED PAYROLL AND COMPENSATION LIABILITIES

June 30, 2021

December 31, 2020

OF ACCRUED PAYROLL AND COMPENSATION LIABILITIES

Director fees

23 unchanged sentences

In September 2018, the appellate court affirmed the judgment of the circuit court.

have accrued $ 17,205,599 as of June 30, 2021, and December 31, 2020, related to this judgment, which is included in liabilities in discontinued

have accrued $ 17,205,599 as of September 30, 2021, and December 31, 2020, related to this judgment, which is included in liabilities

in discontinued operations.

Payroll Taxes, Interest, and Penalties

1 unchanged sentence

and penalties, which required us to pay $ 500,000 ,

remain current in our payment of taxes for five years , and forego claiming any net operating losses for the years 2001 through 2015 or

until we paid taxes on future profits in an amount equal to the taxes of $ 1,455,767

remain current in our payment of taxes for five years , and forego claiming any net operating

losses for the years 2001 through 2015 or until we paid taxes on future profits in an amount equal to the taxes of $ 1,455,767

waived by the Offer.

10 unchanged sentences

and $ 673,645

were due as of June 30, 2021, and December 31,

were due as of September 30, 2021, and December

31, 2020, respectively.

9 unchanged sentences

(a) grants options to

purchase a minimum of 6,000 shares of our stock each year, with an exercise price equal to the market price of our common stock as of

the grant date, for the maximum term allowed under our stock option plan;

(b) provides for health insurance coverage, cell phone, car

allowance, life insurance, and director and officer liability insurance, as well as any other bonus approved by our board;

and (c) includes

additional incentive compensation as follows:

(i) a quarterly bonus equal to 5 % of our earnings before interest, taxes, depreciation,

and amortization for the applicable quarter;

(ii) bonuses equal to 1 % of the net purchase price of any acquisitions we complete that

are directly generated and arranged by Mr.

and (iii) an annual bonus (payable quarterly) equal to 1 % of our gross sales of

all products, net of returns and allowances.

On January 1, 2020, we resumed accruing wages for our chief executive officer.

$ 172,500 was accrued during the six months ended June 30, 2021.

purchase a minimum of 6,000

shares of our stock each year, with an exercise

price equal to the market price of our common stock as of the grant date, for the maximum term allowed under our stock option plan;

provides for health insurance coverage, cell phone, car allowance, life insurance, and director and officer liability insurance, as well

as any other bonus approved by our board;

and (c) includes additional incentive compensation as follows:

(i) a quarterly bonus equal

of our earnings before interest, taxes, depreciation, and amortization for the applicable quarter;

(ii) bonuses equal to 1 %

of the net purchase price of any acquisitions we complete that are directly generated and arranged by Mr.

and (iii) an annual

bonus (payable quarterly) equal to 1 %

of our gross sales of all products, net of returns and allowances.

On January 1, 2020, we resumed accruing wages for our chief executive

A total of $ 258,750

was accrued during the nine months ended September 30, 2021.

also have an oral agreement with our other director that requires us to issue options to purchase 2,000 shares of our common stock each

the six months ended June 30, 2021 and 2020, we granted options to purchase 0 and 8,000 shares of common stock to Mr.

Hawatmeh and Ms.

the nine months ended September 30, 2021 and 2020, we granted options to purchase 0 and 8,000 shares of common stock to Mr.

Hollinger, respectively.

We recorded expenses totaling $ 0 and $ 56 during the six months ended June 30, 2021 and 2020, respectively, for

these options.

We recorded expenses totaling $ 0 and $ 56 during the nine months ended September 30, 2021 and 2020, respectively,

for these options.

have no other agreements requiring the grant of options.

3 unchanged sentences

payable consisted of the following:

SCHEDULE OF NOTES PAYABLE

June 30, 2021

December 31, 2020

Note payable to former service provider for past due account payable (current)

OF NOTES PAYABLE

Note payable to former service

provider for past due account payable (current)

Note payable for settlement of debt (long term)

Small Business Administration loan

was $ 234,293 and $ 208,078 of accrued interest due on these notes as of June 30, 2021, and December 31, 2020, respectively.

Small Business Administration

was $ 247,577 and $ 208,078 of accrued interest due on these notes as of September 30, 2021, and December 31, 2020, respectively.

9— CONVERTIBLE DEBENTURES

debentures consisted of the following:

SCHEDULE OF CONVERTIBLE DEBENTURES

June 30, 2021

OF CONVERTIBLE DEBENTURES

December 31, 2020

Convertible debenture, 5 % stated interest rate, secured by all of our assets, due on May 30, 2021

Convertible debenture, 5 % stated interest rate, secured by all of our assets, due on December 8, 2021

Convertible debenture, 5 % stated interest rate, secured by all of our assets, due on February 8, 2021

Convertible debenture, 5 % stated interest rate, secured by all of our assets, due on December 8, 2021

Convertible debenture, 5 % stated interest rate, secured by all of our assets, due on April 30, 2027

Long term portion

Convertible debenture, 5 % stated

interest rate, secured by all of our assets, due on May 30, 2022

Convertible debenture, 5 %

stated interest rate, secured by all of our assets, due on December

Convertible debenture, 5 %

stated interest rate, secured by all of our assets, due on December

Convertible debenture, 5 %

stated interest rate, secured by all of our assets, due on December

Convertible debenture,

5 % stated interest rate, secured by all of our assets, due on April 30, 2027

current portion

2 unchanged sentences

for the 20 trading days prior to conversion.

During the six months ended June 30, 2021, the convertible debenture holder converted $ 6,750

During the nine months ended September 30, 2021, the convertible debenture holder converted

$ 6,750 of accrued but unpaid interest into 225,000 shares of our common stock.

of June 30, 2021, and December 31, 2020, we had accrued interest on the convertible debentures totaling $ 1,587,851 and $ 1,528,511 , respectively,

of which $ 59,341 and $ 41,960 was current and $ 1,516,023 and $ 1,486,551 was long term, respectively.

As of June 30, 2021, and December

31, 2020, the debentures, including accrued but unpaid interest, were convertible into 141,554,300 and 167,761,552 shares of our common

of September 30, 2021, and December 31, 2020, we had accrued interest on the convertible debentures totaling $ 1,621,443

and $ 1,528,511 , respectively, of which $ 1,181,171 and $ 41,960 was current and $ 1,569,200 and $ 1,486,551 was long term, respectively.

As of September 30, 2021, and December 31, 2020, the debentures, including accrued but unpaid interest, were convertible into

141,554,300 and 167,761,552 shares of our common stock.

10— DERIVATIVE LIABILITIES

7 unchanged sentences

We have estimated the fair value of these embedded derivatives for convertible debentures and associated warrants using a Monte Carlo

simulation as of June 30, 2021, using the following assumptions:

SCHEDULE OF DERIVATIVE LIABILITIES AT FAIR VALUE

simulation as of September 30, 2021, using the following assumptions:

OF DERIVATIVE LIABILITIES AT FAIR VALUE

112.9 % - 142.6 %

Risk-free rates

0.15 % - 0.75 %

Remaining life

0.00 - 5.83 years

fair values of the derivative instruments are measured each quarter, which resulted in a loss of $ 114,660 and $ 358,264 during the six

months ended June 30, 2021 and 2020, respectively, and a gain of $ 13,131 and loss of $ 289,050 during the three months ended June 30,

fair values of the derivative instruments are measured each quarter, which resulted in a loss of $ 176,746 and $ 318,564 during the nine

months ended September 30, 2021 and 2020, respectively, and a loss of $ 62,086 and a gain of $ 39,700 during the three months ended September

30, 2021 and 2020, respectively.

As of June 30, 2021, and December 31, 2020, the fair market value of the derivatives aggregated $ 1,037,314

As of September 30, 2021, and December 31, 2020, the fair market value of the derivatives aggregated

$ 1,099,400 and $ 922,654 , respectively.

1 unchanged sentence

are authorized to issue up to 100,000,000 shares of $ 0.001 par value common stock.

During the six months ended June 30, 2021, we issued

a total of 225,000 shares of common stock for the conversion of $ 6,750 of accrued interest.

During the nine months ended September 30, 2021, we

issued a total of 225,000 shares of common stock for the conversion of $ 6,750 of accrued interest.

12— STOCK OPTIONS AND WARRANTS

Incentive Plans

the six months ended June 30, 2021 and 2020, we granted to employees 0 and 8,000 options, respectively, to purchase shares of common

8,000 options granted during the six months ended June 30, 2020, were valued using the following assumptions:

estimated five-year term,

estimated volatility of 91 %, and a risk-free rate of 1.61 %.

of June 30, 2021, and December 31, 2020, we had no unrecognized compensation related to outstanding options that have not yet vested

the nine months ended September 30, 2021 and 2020, we granted to employees 0 and 8,000 options, respectively, to purchase shares of common

8,000 options granted during the nine months ended September 30, 2020, were valued using the following assumptions:

estimated five-year

term , estimated volatility of 91 %, and a risk-free rate of 1.61 %.

of September 30, 2021, and December 31, 2020, we had no unrecognized compensation related to outstanding options that have not yet vested

at year-end that would be recognized in subsequent periods.

1 unchanged sentence

option expenses included in accrued payroll and compensation expense.

of June 30, 2021, there were 32,000 options issued and vested with a weighted average exercise price of $ 0.08 and a weighted average

of September 30, 2021, there were 32,000 options issued and vested with a weighted average exercise price of $ 0.08 and a weighted average

remaining life of 2.15 years.

Outstanding options as of June 30, 2021, consisted of:

SCHEDULE OF STOCK OPTIONS OUTSTANDING

Exercise Price

Average Exercise

Remaining Life

Outstanding options as of September 30, 2021, consisted of:

OF STOCK OPTIONS OUTSTANDING

13— DISCONTINUED OPERATIONS

1 unchanged sentence

The assets and liabilities associated with this business

are displayed as assets and liabilities from discontinued operations as of June 30, 2021, and December 31, 2020, as a result.

are displayed as assets and liabilities from discontinued operations as of September 30, 2021, and December 31, 2020, as a result.

Additionally,

the revenues and costs associated with this business are displayed as losses from discontinued operations for the six months ended June

the revenues and costs associated with this business are displayed as losses from discontinued operations for the nine months ended September

30, 2021 and 2020.

assets and liabilities included in discontinued operations were as follows:

SCHEDULE OF DISCONTINUED OPERATIONS

June 30, 2021

December 31, 2020

OF DISCONTINUED OPERATIONS

Assets from Discontinued Operations:

Total assets from discontinued operations

assets from discontinued operations

Liabilities from Discontinued Operations:

2 unchanged sentences

Accrued interest

Accrued payroll and compensation expense

Current maturities of long-term debt

Accrued payroll and compensation

Current maturities of long-term

Related-party payable

Short-term advances payable

Total liabilities from discontinued operations

loss from discontinued operations for the six months ended June 30, 2021 and 2020, were comprised of the following components:

Six months ended June 30,

advances payable

liabilities from discontinued operations

loss from discontinued operations for the nine months ended September 30, 2021 and 2020, were comprised of the following components:

months ended September 30,

Other expense:

Interest expense

Total other expense

Net loss from discontinued operations

Net loss from discontinued

$ ( 114,784 )

$ ( 115,204 )

14— SUBSEQUENT EVENTS

have evaluated all events occurring subsequent to the financial statements and determined there are no additional items to disclose.

March 11, 2020, the World Health Organization characterized COVID-19 as a global pandemic.

This situation is ongoing, and we are monitoring

Although our response to the COVID-19 pandemic continues to evolve, we have taken measures to mitigate the impact on our

business operations and overall financial performance.

We are also constantly evaluating and responding to the impact of the pandemic

on our supply chain as compared to product demand.

In addition, we actively monitor COVID-19-related developments and may take further

actions that alter our business operations as may be required by federal, state, or local authorities or that we determine are in the

best interests of our employees, customers, vendors, and stockholders.

The effects of these operational modifications will be reflected

in current and future reporting periods.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements