What changed in this filing

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Item 1. Financial Statements

2022-05-16 compared with 2021-11-15 · 318 added, 348 removed, 264 unchanged (72% of the section changed)

1 unchanged sentence

BALANCE SHEETS

March 31, 2022

December 31, 2021

March 31, 2022

December 31, 2021

Current assets:

Deposits on inventory

Deposits on inventory -

related party

Deposits on inventory - related party

Accounts receivable

current assets

Investment in securities

Other current assets

Total current assets

Investment in securities at cost

Right-of-use asset

Property and equipment,

net of accumulated depreciation

LIABILITIES AND STOCKHOLDERS’

Property and equipment, net of accumulated depreciation

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:

3 unchanged sentences

Short-term advances payable

- related parties

Short-term advances payable - related parties

Accrued liabilities

Accrued payroll and compensation

Accrued interest, current

Convertible debenture,

current portion, net of discounts

Accrued payroll and compensation expense

Accrued interest, current portion

Convertible debenture, current portion, net of discounts

Note payable, current portion

1 unchanged sentence

Derivative liability

from discontinued operations

current liabilities:

Lease liability, long term

Accrued interest, net of

current portion

Note payable, net of current

debenture, net of current portion, net of discount

Liabilities from discontinued operations

Total current liabilities:

Note payable, net of current portion

Convertible debenture, net of current portion, net of discount

Total liabilities

Commitments and contingencies

2 unchanged sentences

100,000,000 shares authorized;

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

31, 2020, respectively

4,945,417 shares issued and outstanding

Additional paid-in capital

Accumulated deficit

( 78,099,963 )

( 77,803,460 )

stockholders’ deficit

Total stockholders’ deficit

( 40,861,457 )

( 40,564,954 )

liabilities and stockholders’ deficit

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

STATEMENTS OF OPERATIONS (UNAUDITED)

September 30,

Total liabilities and stockholders’ deficit

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

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended

Cost of sales

1 unchanged sentence

Employee costs

general and administrative expenses

operating expenses

(loss) from operations

Other income (expense)

Interest expense

Loss on disposal of equipment

Gain on forgiveness of

Gain (loss) on derivative

Selling, general and administrative expenses

Total operating expenses

(Loss) income from operations

Other expense:

loss from continuing operations

from discontinued operations

$ ( 304,648 )

$ ( 232,358 )

Interest expense

Loss on derivative valuation

Total other expense

Net loss from continuing operations

Loss from discontinued operations

$ ( 296,503 )

$ ( 327,555 )

loss from continuing operations per common share, basic and diluted

Net 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 NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2021

Loss from discontinued operations per common share, and diluted

Basic and diluted weighted average common shares outstanding

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

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021

Additional Paid-in

Balance, December 31, 2021

1 unchanged sentence

$ ( 40,564,954 )

Common stock issued for conversion of accrued

interest , shares

Stock option expense

Balance, March 31, 2022

1 unchanged sentence

$ ( 40,861,457 )

Balance, June 30, 2020

( 79,005,548 )

( 41,778,377 )

Balance, September 30, 2020

$ ( 79,237,906 )

$ ( 42,010,735 )

Additional Paid-in

Balance, December 31, 2020

1 unchanged sentence

$ ( 40,698,101 )

Common stock issued for conversion of accrued

Balance, March 31, 2021

( 78,257,227 )

( 41,018,906 )

Balance, June 30, 2021

Beginning Balance

$ ( 77,929,672 )

$ ( 40,698,101 )

Balance, September 30,

Common stock issued for conversion of accrued interest

Balance, March 31, 2021

$ ( 78,257,227 )

$ ( 41,018,906 )

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

STATEMENTS OF CASH FLOWS (UNAUDITED)

Months Ended September 30,

Cash flows from operating

Net loss from

continuing operations

Ending Balance

$ ( 78,257,227 )

$ ( 41,018,906 )

Adjustments to reconcile

net loss to net cash used in operating activities

Depreciation expense

Loss on derivative valuation

Debt discount amortization

Loss on disposal of equipment

Stock option expense

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

Accounts receivable

Other current assets

Accounts payable

Accrued liabilities

Payments for lease liability

Accrued payroll and compensation

cash provided by continuing operating activities

Cash flows from investing

Purchase of equipment

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

the Three Months Ended March 31,

flows from operating activities

to reconcile net income to net cash (used) provided by operating activities:

Loss from discontinued operations

on derivative valuation

discount amortization

of right-of-use asset to rent expense

paid on our behalf by a related party

in operating assets and liabilities:

on inventory - related party

current assets

for lease liability

payroll and compensation

cash provided (used) by operating activities

flows from investing activities:

cash used in investing activities

Cash flows from financing

Proceeds from bank overdraft

Proceeds from convertible

loans payable

Proceeds from related-party

Repayments of related-party

Proceeds from loan payable

of loans payable

Net Cash used in financing

Net change in cash

Cash, beginning of

Cash, end of period

Supplemental disclosure

of cash flow information

flows from financing activities:

of related-party loans

Cash used in financing activities

change in cash

beginning of period

end of period

disclosure of cash flow information:

paid for interest

paid for income taxes

Supplemental disclosure

of noncash investing activities

measurement of derivative liability

disclosure of noncash investing activities:

stock issued for conversion of accrued interest

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

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 — ORGANIZATION AND NATURE OF OPERATIONS

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of Presentation

unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United

States of America (“US GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”).

These financial statements and the notes attached hereto should be read in conjunction with the financial statements and notes included

in our Form 10-K for the fiscal year ended December 31, 2020.

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

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

consolidate our majority-owned subsidiaries, companies over which we exercise control through majority voting rights, and companies in

which we have a variable interest and we are the primary beneficiary.

We account for our investments in common stock of other companies

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 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.

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

reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements,

and the reported amounts of revenues and expenses during the reported periods.

unaudited condensed consolidated financial statements

have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.

and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

These financial statements

and the notes attached hereto should be read in conjunction with the financial statements and notes included in our Form 10-K for the

fiscal year ended December 31, 2021.

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

to present fairly our financial position, as of March 31, 2022, and the results of our operations and cash flows for the three 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, 2022.

preparation of financial statements in conformity with U.S.

GAAP 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 revenues and expenses during the reporting period.

Significant estimates include the estimated useful lives

of property and equipment.

Actual results could differ from those estimates.

of Consolidation

consolidated financial statements include the accounts of the company and our wholly owned subsidiaries:

CirTran Products Corp., LBC

Products, Inc., and CirTran Asia, Inc.

All intercompany accounts and transactions have been eliminated in consolidation

follow Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue

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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.

These contracts are long term in nature and revenue is recognized

at certain milestone intervals upon our delivery and customer acceptance of work product related to those milestones:

namely, product

design, packaging, branding display, and prototypes.

There were no costs to obtain the contracts identified, and therefore, no asset

has been recorded for customer acquisition costs.

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

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

the three months ended March 31, 2022 and 2021, we recognized revenue of $ 130,299

and $ 15,000 ,

respectively, related to the performance obligations under product development service agreements with customers.

These contracts are

long term in nature and revenue is recognized at certain milestone intervals upon our delivery and customer acceptance of work product

related to those milestones:

namely, product design, packaging, branding display, and prototypes.

There were no costs to obtain the contracts

identified, and therefore, no asset has been recorded for customer acquisition costs.

Additionally,

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.

Upon acceptance, we oblige delivery of such product to the customer at an agreed-upon place,

time, and price.

We recognize revenue under the unique purchase order contract upon fulfillment of our performance obligations therein,

typically limited to the delivery of product.

we recognized revenues of $ 561,469 and $ 604,399 during the three months ended March 31, 2022 and 2021, respectively, related to the delivery

of product to our customers.

Each delivery is based on the unique contract with the customer, which is a stand-alone contract that we

retain the right to accept or reject.

Upon acceptance, we oblige delivery of such product to the customer at an agreed-upon place, time,

We recognize revenue under the unique contract upon fulfillment of our performance obligations therein, typically limited

to the delivery of product.

February 2016, the FASB issued Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842), which superseded guidance

5 unchanged sentences

adoption of the standard resulted in recording right-of-use (“ROU”) assets and operating lease liabilities of $ 22,291 as

of September 30, 2021.

of December 31, 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 September

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

31, 2022, is as follows:

OF FUTURE MINIMUM LEASE PAYMENTS DUE

SUMMARY OF FUTURE MINIMUM LEASE PAYMENTS DUE

Total future payments

Implied interest

Operating lease liability as of September

Operating lease liability as of March 31, 2022

in Securities

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.

Because we owned less than 20 % of that company’s stock as of each date, and no significant influence

or control exists, the investment is accounted for using the cost method.

We evaluated the investment for impairment and determined there

was none during the periods presented.

of Long-Lived Assets

review our long-lived assets, including intangibles, for impairment when events or changes in circumstances indicate that the carrying

value of an asset may not be recoverable.

At each balance sheet date, we evaluate whether events and circumstances have occurred that

indicate possible impairment.

We use an estimate of future undiscounted net cash flows from the related asset or group of assets over

their remaining life in measuring whether the assets are recoverable.

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

during the periods ended September 30, 2021 or 2020.

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

at March 31, 2022, and December 31, 2021.

Because we owned less than 20 %

of that company’s stock as of each date, and no significant influence or control exists, the investment is accounted for using

the cost method.

We evaluated the investment for impairment and determined there was none during the periods presented.

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

9 unchanged sentences

These deposits are carried as a separate balance sheet

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.

component and totaled $ 40,772 (non-related-party)

and $ 361,315 (related-party)

as of March 31, 2022, and $ 11,639

(non-related-party) and $ 87,042

(related-party) as of December 31, 2021.

balances consisted of the following:

SCHEDULE OF INVENTORY

March 31, 2022

December 31, 2021

Finished goods

Raw materials

Reserve for obsolescence

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

We account for our stock options in accordance with ASC 718-10, Accounting for Stock Issued to Employees , and ASU 2018-07, Improvements

to Nonemployee Share-Based Payment Accounting , as updated, which requires the recognition of the cost of employee services received

in exchanged for an award of equity instruments in the financial statements and is measured based on the grant date fair value of the

ASC 718-10 also requires the stock option compensation expense to be recognized over the period during which an employee is required

to provide service in exchange for the award (typically the vesting period).

There was no impact to our methodology for accounting for

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

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.

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

September 30,

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

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 s hares

outstanding during each period.

Diluted EPS is similarly calculated, except that the weighted-average number of common shares outstanding

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

during each period.

Diluted loss per share is similarly calculated, except that the weighted-average number of common shares outstanding

would include common shares that may be issued subject to existing rights with dilutive potential when applicable.

There were 79,146,472

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.

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

as of March 31, 2022, due to the anti-dilutive effect these would have on net loss per share.

There were 140,896,716 such shares issuable

as of March 31, 2021.

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.

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.

Issued Accounting Pronouncements

4 unchanged sentences

3 — GOING CONCERN

accompanying unaudited consolidated financial statements have been prepared in conformity with US GAAP, which contemplate our continuation

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 .

accompanying unaudited consolidated financial statements have been prepared in conformity with U.S.

GAAP, which contemplate our

continuation as a going concern.

We had a working capital deficiency of $ 38,639,637

as of March 31, 2022, and a net loss from continuing

operations of $ 258,698

for the three months ended March 31, 2022.

of March 31, 2022, we had an accumulated deficit of $ 78,099,963 .

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

paragraphs and eventually attain profitable operations.

The accompanying financial statements do not include any adjustments that may

be necessary if we are unable to continue as a going concern.

ability to continue as a going concern is dependent upon our ability to successfully accomplish our business plan and eventually attain

profitable operations.

The accompanying financial statements do not include any adjustments that may be necessary if we are unable to

continue as a going concern.

the coming year, our foreseeable cash requirements will relate to development of business operations and associated expenses.

14 unchanged sentences

used in the manufacture of products.

expense is recognized in amounts equal to the cost of depreciable assets over estimated service lives.

Leasehold improvements are amortized

over the shorter of the life of the lease or the service life of the improvements.

The straight-line method of depreciation and amortization

is followed for financial reporting purposes.

Maintenance, repairs, and renewals that neither materially add to the value of the property

nor appreciably prolong its life are charged to expense as incurred.

Gains or losses on dispositions of property and equipment are included

in operating results.

and equipment and estimated service lives consist of the following:

SCHEDULE OF PROPERTY AND EQUIPMENT AND ESTIMATED SERVICE LIVES

March 31, 2022

December 31, 2021

Useful Life (years)

Furniture and office equipment

accumulated depreciation

Property and equipment,

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

Property and equipment, net

recorded $ 941 and $ 431 of depreciation expense for the three months ended March 31, 2022 and 2021.

5 — RELATED PARTY TRANSACTIONS

2007, we issued a 10 % promissory note to a family member of our president in exchange for $ 300,000 .

The note was due on demand after

There were no repayments made during the periods presented.

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

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

2007, we issued a 10 %

promissory note to a family member of our president in exchange for $ 300,000 .

note was due on demand after May 2008.

repayments made during the periods presented.

At March 31, 2022, and December 31, 2021, the principal amount owing on the note was $ 151,833

and $ 151,833 ,

respectively.

No demand for payment has been made.

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

Under the terms of these three $ 105,000 notes, we received total proceeds of $ 300,000 and agreed to repay the amount received

plus a 5 % borrowing fee.

The notes were due April 30, 2008, after which they were due on demand, with interest accruing at 12 % per annum.

Under the terms of these three $ 105,000

notes, we received total proceeds of $ 300,000

and agreed to repay the amount received plus

borrowing fee.

The notes were due April 30, 2008, after which they were due on demand, with interest accruing at 12 %

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

The principal balance owing on the notes as of September

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

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.

The principal balance owing on the notes as

of March 31, 2022, and December 31, 2021, was $ 72,466

and $ 72,466 ,

respectively.

No demand for payment has been made.

the three months ended March 31, 2022, we made repayments to related parties of $ 35,000

and had other noncash reductions of $ 96,145 .

There were $ 21,882 and

short-term advances due to related parties as of March 31, 2022, and December 31, 2021, respectively.

The advances are due on

demand and included in current liabilities.

No demand for payment has been made.

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

The terms of his employment agreement require us to grant options to purchase 6,000 shares of our stock each year, with an exercise price

equal to the fair market price of our common stock as of the grant date.

There were no options issued under this agreement during the

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

The terms of his employment agreement require us to grant options to purchase 6,000

shares of our stock each year, with an exercise

Hawatmeh held outstanding options to purchase 24,000

shares of common stock as of March 31, 2022,

and December 31, 2021, respectively.

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

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.

The borrowing fees were waived

by our president on these loans.

These amounts are included in our liabilities from discontinued operations.

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 .

See Note 12–Stock Options.

of March 31, 2022, and December 31, 2021, we owed our president a total of $ 433,379

and $ 433,379 ,

respectively, in unsecured advances.

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

borrowing fee.

The borrowing fees were waived by our president on these loans.

These amounts are included in our liabilities from discontinued

of March 31, 2022, and December 31, 2021, we owed a total of $ 13,740

and $ 13,740 ,

respectively, 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 three months ended March 31, 2022, we had a net increase in deposits with a related-party inventory supplier totaling $ 274,273 .

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

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

cost paid for inventory in arm’s-length transactions.

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

nine months ended September 30, 2021.

All transactions were at a 2 %

markup over the related-party’s cost paid for inventory in arm’s-length transactions.

Total inventory purchases from the

related party were $ 448,190

and $ 277,275

during the three months ended March 31,

2022 and 2021, respectively.

6 — OTHER ACCRUED LIABILITIES

2 unchanged sentences

liabilities consist of the following:

OF ACCRUED LIABILITIES

SCHEDULE OF ACCRUED LIABILITIES

March 31, 2022

December 31, 2021

Tax liabilities

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.

accrued liabilities as of March 31, 2022, and December 31, 2021, include a non-interest-bearing payable totaling $ 45,000

and $ 45,000 ,

respectively, that is due on demand and customer deposits totaling $ 1,102,285

and $ 718,535 ,

respectively.

payroll and compensation liabilities consist of the following:

OF ACCRUED PAYROLL AND COMPENSATION LIABILITIES

SCHEDULE OF ACCRUED PAYROLL AND COMPENSATION LIABILITIES

March 31, 2022

December 31, 2021

Director fees

7 unchanged sentences

These amounts are included in our

current liabilities.

We have not accrued any liability for claims or judgments that we have determined to be barred by the applicable

statute of limitations, which generally is eight years for judgments in Utah.

current liabilities, except where we believe collection or enforcement of the judgments is barred by the applicable statute of limitations,

in which case the liabilities have been eliminated.

We have not accrued any liability for claims or judgments that we have determined

to be barred by the applicable statute of limitations, which generally is eight years for judgments in Utah.

Enterprises, Inc.

3 unchanged sentences

contract and trademark infringement.

After proceedings in October 2016, the court awarded a judgment of $ 6.6 million to Playboy against

Play Beverages and CirTran Beverage Corp., our subsidiary.

The court denied our motion for a new trial and awarded Playboy treble patent

infringement damages and attorney’s fees.

After proceedings in October 2016, the court awarded a judgment of $ 6.6

million to Playboy against Play Beverages and

CirTran Beverage Corp., our subsidiary.

The court denied our motion for a new trial and awarded Playboy treble patent infringement damages

and attorney’s fees.

We filed a notice of appeal in July 2017 and again in March 2018.

Playboy has initiated

collection efforts but has recovered no funds.

Playboy has initiated collection efforts

but has recovered no funds.

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

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.

We have accrued $ 17,205,599

as of March 31, 2022, and December 31,

2021, 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

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

11 unchanged sentences

and $ 525,238

were due as of September 30, 2021, and December

were due as March 31, 2022, and December

31, 2021, 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;

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.

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.

$ 86,250 was accrued during the three months ended March 31, 2022.

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 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 nine months ended September 30, 2021 and 2020, respectively,

for these options.

have no other agreements requiring the grant of options.

have entered into agreements requiring us to pay certain royalties for the manufacture and distribution of licensed products.

2 unchanged sentences

payable consisted of the following:

OF NOTES PAYABLE

Note payable to former service

provider for past due account payable (current)

SCHEDULE OF NOTES PAYABLE

March 31, 2022

December 31, 2021

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

Note payable for settlement of debt (long-term)

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.

Small Business Administration loan

was $ 276,661

and $ 252,665

of accrued interest due on these notes as of

March 31, 2022, and December 31, 2021, respectively.

9 — CONVERTIBLE DEBENTURES

debentures consisted of the following:

OF CONVERTIBLE DEBENTURES

SCHEDULE OF CONVERTIBLE DEBENTURES

March 31, 2022

December 31, 2021

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

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

Convertible debenture, 5 %

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

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

Convertible debenture, 5 %

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

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

Convertible debenture, 5 % stated interest rate, secured by all our assets, due on December 8, 2022

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

current portion

2 unchanged sentences

for the 20 trading days prior to conversion.

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

During the year ended December 31, 2021, the convertible debenture holder converted $ 6,750

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

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.

of March 31, 2022, and December 31, 2021, we had accrued interest on the convertible debentures totaling $ 1,687,900

and $ 1,655,037 ,

respectively.

10 — DERIVATIVE LIABILITIES

6 unchanged sentences

at their estimated fair value and recognize changes in their estimated fair value in results of operations during the period of change.

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

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

OF DERIVATIVE LIABILITIES AT FAIR VALUE

We have estimated the fair value of these embedded derivatives for convertible debentures using a Monte Carlo simulation as of March

31, 2022, using the following assumptions:

SCHEDULE OF DERIVATIVE LIABILITIES AT FAIR VALUE

89.7 % - 109.1 %

Risk-free rates

1.37 % - 1.80 %

Remaining life

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

0.25 - 5.08 years

fair values of the derivative instruments are measured each quarter, which resulted in a loss of $ 36,053

and $ 127,791

during the three months ended March 31, 2022

and 2021, respectively.

As of March 31, 2022, and December 31, 2021, the fair market value of the derivatives aggregated $ 974,850

and $ 938,794 ,

respectively.

11 – COMMON STOCK TRANSACTIONS

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

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

the year ended December 31, 2021, we issued a total of 225,000 shares of common stock for the conversion of $ 6,750 of accrued interest.

12 — STOCK OPTIONS

Incentive Plans

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.

See Note 6–Other Accrued Liabilities for a description of amounts of

option expenses included in accrued payroll and compensation expense.

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 September 30, 2021, consisted of:

OF STOCK OPTIONS OUTSTANDING

the three months ended March 31, 2022, and the year ended December 31, 2021, we granted to employees 0

and options to purchase 8,000 shares of

common stock, respectively.

8,000 options granted during the year ended December 31, 2021, were valued using the following assumptions:

estimated five -year term,

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

of March 31, 2022, and December 31, 2021, we had no

unrecognized compensation related to outstanding

options that have not yet vested at year-end that would be recognized in subsequent periods.

of March 31, 2022, there were 32,000

options issued and vested with a weighted

average exercise price of $ 0.06

and a weighted average remaining life of

Outstanding options as of March 31,

2022, consisted of:

SCHEDULE OF STOCK OPTIONS OUTSTANDING

Exercise Price

Average Exercise

Remaining Life

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 September 30, 2021, and December 31, 2020, as a result.

are displayed as assets and liabilities from discontinued operations as of March 31, 2022, and December 31, 2021.

Additionally,

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.

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

March 31, 2022 and 2021.

assets and liabilities included in discontinued operations were as follows:

OF DISCONTINUED OPERATIONS

Assets from Discontinued Operations:

SCHEDULE OF DISCONTINUED OPERATIONS

March 31, 2022

December 31, 2021

Assets from Discontinued Operations:

Total assets from discontinued operations

Liabilities from Discontinued Operations:

2 unchanged sentences

Accrued interest

Accrued payroll and compensation

Current maturities of long-term

Accrued payroll and compensation expense

Current maturities of long-term debt

Related-party payable

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,

Short-term advances payable

Total liabilities from discontinued operations

loss from discontinued operations for the three months ended March 31, 2022 and 2021, were comprised of the following components:

Three Months ended March 31,

Other expense:

Total other expense

Net loss from discontinued

$ ( 114,784 )

$ ( 115,204 )

Interest expense

Net loss from discontinued operations

14 — SUBSEQUENT EVENTS

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

accordance with SFAS 165 (ASC 855-10), management has performed an evaluation of subsequent events through the date that the financial

statements were issued and has determined that it does not have any material subsequent events to disclose in these consolidated financial

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