What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-21 compared with 2022-08-22 · 169 added, 225 removed, 322 unchanged (55% of the section changed)

1 unchanged sentence

BALANCE SHEETS

June 30, 2022

December 31, 2021

on inventory - related party

current assets

Deposits on inventory

Deposits on inventory - related party

Accounts receivable

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’ DEFICIT

current assets

in securities at cost

and equipment, net of accumulated depreciation

AND STOCKHOLDERS’ DEFICIT

liability, current

Related-party

advances payable

advances payable - related parties

payroll and compensation expense

interest, current portion

debenture, current portion, net of discounts

payable, current portion

payable to stockholders

from discontinued operations

current liabilities:

Accounts payable

Lease liability, current

Related-party payable

Short-term advances payable

Short-term advances payable - related parties

Accrued liabilities

Accrued payroll and compensation expense

Accrued interest, current portion

Convertible debenture, current portion, net of discounts

Note payable, current portion

Note payable to stockholders

Derivative liability

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

Stockholders’ deficit:

Common stock, par value $ 0.001 ;

payable, net of current portion

debenture, net of current portion, net of discount

and contingencies

Stockholders’

stock, par value $ 0.001 ;

100,000,000 shares authorized;

4,945,417 shares issued and outstanding

Additional paid-in capital

Accumulated deficit

paid-in capital

( 78,760,790 )

( 77,803,460 )

Total stockholders’ deficit

stockholders’ deficit

( 41,522,284 )

( 40,564,954 )

Total liabilities and stockholders’ deficit

liabilities and stockholders’ deficit

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

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended June 30,

Six Months Ended June 30,

Cost of sales

Three Months Ended

September 30,

general and administrative expenses

operating expenses

Employee costs

Selling, general and administrative expenses

Total operating expenses

Loss from operations

Other income (expense)

Interest expense

Gain (loss) on derivative valuation

Total other expense

Net loss from continuing operations

Loss from discontinued operations

from operations

Gain on forgiveness of debt

on derivative valuation

other expense

loss from continuing operations

from discontinued operations

$ ( 345,912 )

2 unchanged sentences

$ ( 882,188 )

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 condensed consolidated financial statements.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021

Additional Paid-in

Total Stockholders’

Balance, December 31, 2021

THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

Stockholders’

December 31, 2021

$ ( 77,803,460 )

6 unchanged sentences

( 41,176,372 )

Additional Paid-in

Total Stockholders’

Balance, December 31, 2020

September 30, 2022

$ ( 78,760,790 )

$ ( 41,522,284 )

Common stock issued for conversion of accrued interest

Balance, March 31, 2021

Stockholders’

December 31, 2020

$ ( 77,929,672 )

$ ( 40,698,101 )

Beginning Balance

stock issued for conversion of accrued interest

Balance, March 31,

( 78,257,227 )

3 unchanged sentences

( 41,268,891 )

Ending Balance

September 30, 2021

$ ( 78,811,860 )

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30,

Cash flows from operating activities

For the Nine Months Ended

September 30,

flows from operating activities

$ ( 957,330 )

$ ( 882,188 )

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

Loss from discontinued operations

Depreciation expense

Loss on derivative valuation

Debt discount amortization

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

Accrued interest

Net cash provided (used) by operating activities

Cash flows from investing activities:

Purchase of equipment

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from convertible loans payable

Proceeds from related-party loans

Repayments of related-party loans

Net cash used by financing activities

Net change in cash

Cash, beginning of period

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:

Common stock issued for conversion of accrued interest

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

from discontinued operations

on derivative valuation

discount amortization

on forgiveness of debt

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 by operating activities

flows from investing activities:

cash used in investing activities

flows from financing activities:

from related-party loans

of related-party loans

cash used by financing activities

change in cash

beginning of period

end of period

disclosure of cash flow information:

paid for interest

paid for income taxes

disclosure of noncash investing activities:

stock issued for conversion of accrued interest

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

18 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, 2022, and the results of our operations

and cash flows for the six months then ended have been included.

normal recurring adjustments necessary to present fairly our financial position, as of September 30, 2022, 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

23 unchanged sentences

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

the six months ended June 30, 2022 and 2021, we recognized revenue of $ 227,404 and $ 30,000 , respectively, and $ 97,106 and $ 15,000 , during

the three months ended June 30, 2022 and 2021, 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

the nine months ended September 30, 2022 and 2021, we recognized revenue of $ 402,723 and $ 30,000 , respectively, and $ 175,319 and $ 0 ,

during the three months ended September 30, 2022 and 2021, 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

Additionally,

we recognized revenue of $ 991,285 and $ 1,290,055 during the six months ended June 30, 2022 and 2021, respectively, and $ 429,816 and $ 55,656 ,

during the three months ended June 30, 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.

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

We recognize revenue under the

unique contract upon fulfilment of our performance obligations therein, typically limited to the delivery of product.

we recognized revenue of $ 1,292,984 and $ 2,281,529 during the nine months ended September 30, 2022 and 2021, respectively, and $ 301,699

and $ 961,074 , during the three months ended September 30, 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

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 contract upon fulfilment 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

19 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

30, 2022, is as follows:

SUMMARY OF FUTURE MINIMUM LEASE PAYMENTS DUE

Total future payments

Implied interest

Operating lease liability as of June 30, 2022

lease was renewed on October 19, 2022, on a month to months basis, with payments remaining at $ 2,500 a month.

in Securities

cost-method investment consists of an investment in a private digital multi-media technology company that totalled $ 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, 2022, and December 31, 2021.

14 unchanged sentences

These deposits are carried as a separate balance sheet

component and totalled $ 40,410 (non-related-party) and $ 245,007 (related-party) as of June 30, 2022, and $ 11,639 (non-related-party)

component and totaled $ 45,280 (non-related-party) and $ 272,597 (related-party) as of September 30, 2022, and $ 11,639 (non-related-party)

and $ 87,042 (related-party) as of December 31, 2021.

1 unchanged sentence

SCHEDULE OF INVENTORY

June 30, 2022

December 31, 2021

Finished goods

Raw materials

Value of Financial Instruments

16 unchanged sentences

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

September 30,

active markets

Derivative liabilities

active markets

Derivative liabilities

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

4 unchanged sentences

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

as of June 30, 2022, due to the anti-dilutive effect these would have on net loss per share.

There were 141,554,300 such shares issuable

as of June 30, 2021.

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.

as of September 30, 2022, due to the anti-dilutive effect these would have on net loss per share.

There were 141,554,300 such shares

issuable as of September 30, 2021.

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.

Issued Accounting Pronouncements

7 unchanged sentences

as a going concern.

We had a working capital deficiency of $ 38,923,561 as of June 30, 2022, and a net loss from continuing operations

of $ 535,316 for the six months ended June 30, 2022.

As of June 30, 2022, we had an accumulated deficit of $ 78,414,878 .

These conditions

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

We had a working capital deficiency of $ 39,237,548 as of September 30, 2022, and a net loss from continuing operations

of $ 842,546 for the nine months ended September 30, 2022.

As of September 30, 2022, we had an accumulated deficit of $ 78,760,790 .

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 and eventually attain

20 unchanged sentences

SCHEDULE OF PROPERTY AND EQUIPMENT AND ESTIMATED SERVICE LIVES

June 30, 2022

December 31, 2021

Furniture and office equipment

and office equipment

accumulated depreciation

Property and equipment, net

recorded $ 1,874 and $ 1,953 of depreciation expense for the six months ended June 30, 2022 and 2021.

and equipment, net

recorded $ 2,857 and $ 2,389 depreciation expense for the nine months ended September 30, 2022 and 2021.

5 — RELATED PARTY TRANSACTIONS

2 unchanged sentences

There were no repayments made during the periods presented.

At June 30, 2022, and December 31, 2021, the principal amount owing

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

At September 30, 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.

4 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, 2022, and December 31, 2021, was $ 72,466 and $ 72,466 , respectively.

No demand for payment has been made.

the six months ended June 30, 2022, we made repayments to related parties of $ 107,482 and had other noncash reductions of $ 166,747 .

were $ 21,882 and $ 21,882 of short-term advances due to related parties as of June 30, 2022, and December 31, 2021, respectively.

advances are due on demand and included in current liabilities.

the nine months ended September 30, 2022, we made repayments to related parties of $ 139,883 and had other noncash reductions of $ 166,747 .

There were $ 21,882 and $ 21,882 of short-term advances due to related parties as of September 30, 2022, and December 31, 2021, respectively.

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

No demand for payment has been made.

1 unchanged sentence

The terms of his employment agreement require us to grant options to purchase 6,000 shares of our stock each year, with an exercise $ 0.10 .

Hawatmeh held outstanding options to purchase 24,000 and 30,000 shares of common stock as of June 30, 2022, and December 31, 2021,

Hawatmeh held outstanding options to purchase 24,000 and 30,000 shares of common stock as of September 30, 2022, and December 31,

2021, respectively.

See Note 12–Stock Options.

of June 30, 2022, and December 31, 2021, we owed our president a total of $ 433,379 and $ 433,379 , respectively, in unsecured advances.

of September 30, 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.

2 unchanged sentences

These amounts are included in our liabilities from discontinued operations.

of June 30, 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 six months ended June 30, 2022, we had a net increase in deposits with a related-party inventory supplier totaling $ 157,965 .

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

of September 30, 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 nine months ended September 30, 2022, we had a net increase in deposits with a related-party inventory supplier totaling $ 185,555 .

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 $ 744,709 and $ 845,856

during the six months ended June 30, 2022 and 2021, respectively.

during the nine months ended September 30, 2022 and 2021, respectively.

6 — OTHER ACCRUED LIABILITIES

3 unchanged sentences

SCHEDULE OF ACCRUED LIABILITIES

June 30, 2022

December 31, 2021

Tax liabilities

accrued liabilities as of June 30 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 $ 1,097,696 and $ 718,535 , respectively.

accrued liabilities as of September 30, 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 $ 1,281,302 and $ 718,535 , respectively.

payroll and compensation liabilities consist of the following:

SCHEDULE OF ACCRUED PAYROLL AND COMPENSATION LIABILITIES

June 30, 2022

December 31, 2021

Director fees

Bonus expenses

Administrative payroll

Administrative

7 — COMMITMENTS AND CONTINGENCIES

21 unchanged sentences

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

have accrued $ 17,205,599 as of June 30, 2022, and December 31, 2021, related to this judgment, which is included in liabilities in discontinued

have accrued $ 17,205,599 as of September 30, 2022, and December 31, 2021, related to this judgment, which is included in liabilities

in discontinued operations.

Payroll Taxes, Interest, and Penalties

9 unchanged sentences

of limitations on this settlement and appropriate next steps.

Amounts of $ 517,684 and $ 525,238 were due as June 30, 2022, and December

Amounts of $ 517,684 and $ 525,238 were due as September 30, 2022, and December

31, 2021, respectively.

22 unchanged sentences

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

$ 172,500 was accrued during the six months ended June 30, 2022.

$ 258,750 was accrued during the nine months ended September 30, 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

4 unchanged sentences

SCHEDULE OF NOTES PAYABLE

June 30, 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 loan

was $ 287,115 and $ 252,665 of accrued interest due on these notes as of June 30, 2022, and December 31, 2021, respectively.

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

payable for settlement of debt (long-term)

Business Administration loan

was $ 288,192 and $ 252,665 of accrued interest due on these notes as of September 30, 2022, and December 31, 2021, respectively.

9 — CONVERTIBLE DEBENTURES

1 unchanged sentence

SCHEDULE OF CONVERTIBLE DEBENTURES

June 30, 2022

December 31, 2021

Convertible debenture, 5 % stated interest rate, secured by all our assets, due on December 30, 2022

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 December 30, 2022

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

debenture, 5 % stated interest rate, secured by all our assets, due on December 30, 2022

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

debenture, 5 % stated interest rate, secured by all our assets, due on December 30, 2022

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

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

current portion

Long-term portion

convertible debentures and accrued interest are convertible into shares of our common stock at the lower of $ 100 or the lowest bid price

2 unchanged sentences

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

of June 30, 2022, and December 31, 2021, we had accrued interest on the convertible debentures totaling $ 1,721,128 and $ 1,655,037 , respectively.

of September 30, 2022, and December 31, 2021, we had accrued interest on the convertible debentures totaling $ 1,754,720 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 using a Monte Carlo simulation as of June 30,

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

30, 2022, using the following assumptions:

SCHEDULE OF DERIVATIVE LIABILITIES AT FAIR VALUE

106.4 % - 109.8 %

Risk-free rates

2.36 % - 2.66 %

Remaining life

0.25 - 4.83 years

fair values of the derivative instruments are measured each quarter, which resulted in a loss of $ 33,949 and $ 114,660 during the six

months ended June 30, 2022 and 2021, respectively.

As of June 30, 2022, and December 31, 2021, the fair market value of the derivatives

aggregated $ 972,746 and $ 938,794 , respectively.

fair values of the derivative instruments are measured each quarter, which resulted in a loss of $ 35,105 and $ 176,746 during the nine

months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, and December 31, 2021, the fair market value of the

derivatives aggregated $ 973,902 and $ 938,794 , respectively.

11 – COMMON STOCK TRANSACTIONS

3 unchanged sentences

Incentive Plans

the six months ended June 30, 2022, and the year ended December 31, 2021, we granted to employees 0 and 8,000 options to purchase shares

of common stock, respectively.

the nine months ended September 30, 2022, and the year ended December 31, 2021, we granted to employees 0 and 8,000 options to purchase

shares of common stock, respectively.

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

1 unchanged sentence

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

of June 30, 2022, and December 31, 2021, we had no unrecognized compensation related to outstanding options that have not yet vested

of September 30, 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 June 30, 2022, there were 32,000 options issued and vested with a weighted average exercise price of $ 0.06 and a weighted average

of September 30, 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 2.66 years.

Outstanding options as of June 30, 2022, consisted of:

Outstanding options as of September 30, 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 June 30, 2022, and December 31, 2021.

Additionally, the revenues

and costs associated with this business are displayed as losses from discontinued operations for the six months ended June 30, 2022 and

are displayed as assets and liabilities from discontinued operations as of September 30, 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, 2022 and 2021.

assets and liabilities included in discontinued operations were as follows:

SCHEDULE OF DISCONTINUED OPERATIONS

June 30, 2022

December 31, 2021

from Discontinued Operations:

assets from discontinued operations

Total assets from discontinued operations

from Discontinued Operations:

payroll and compensation expense

maturities of long-term debt

Related-party

advances payable

liabilities from discontinued operations

Accounts payable

Accrued liabilities

Accrued interest

Accrued payroll and compensation expense

Current maturities of long-term debt

Related-party payable

Short-term advances payable

Total liabilities from discontinued operations

loss from discontinued operations for the six months ended June 30, 2022 and 2021, were comprised of the following components:

Six Months ended June 30,

Other expense:

Interest expense

Net loss from discontinued operations

loss from discontinued operations for the nine months ended September 30, 2022 and 2021, were comprised of the following components:

Months ended September 30,

loss from discontinued operations

$ ( 114,784 )

14 — SUBSEQUENT EVENTS

1 unchanged sentence

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

October 19, 2022, the Company renewed its lease with GloBrands, LLC, for 500 square feet of office space in Las Vegas, NV.

was renewed on a month to months basis, with monthly payments of $ 2,500 .

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