What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-04-18 compared with 2022-04-15 · 32 added, 796 removed, 366 unchanged (69% of the section changed)

123 unchanged sentences

who were serving in such capacities during the preceding fiscal year (“Named Executive Officers”):

and Principal Position

Name and Principal Position

Year Ended Dec.

Stock Award(s) ($)

Awards ($) (1)

Equity Incentive Plan Compen- sation

in Pension Value and Non- Qualified Deferred Compen- sation Earnings ($)

Other Compen- sation ($)

Non Equity Incentive Plan Compen-

Change in Pension Value and Non-

Qualified Deferred Compen- sation Earnings ($)

All Other Compen- sation ($)

President, Chief Executive Officer

Kathryn Hollinger (4)

Hawatmeh accrued his full salary in 2020 and $296,500 of his salary in 2021, he has not yet received any of his 2020 salary.

Hawatmeh accrued $296,500 of his salary in 2022 and 2021.

amount is the fair value of the option awards on the date of grant in accordance with Financial Accounting Standards Board Accounting

46 unchanged sentences

or within one year, after a change in control, then two times his annual base salary and bonus payment amounts.

the year ended December 31, 2021, we were obligated to issue options to purchase 6,000 shares to Mr.

Hawatmeh but did not issue the options

until after the end of the period.

the years ended December 31, 2022 and 2021, we accrued for 6,000 and 6,000 stock options, respectively, relating to this employment agreement.

3 unchanged sentences

by the Named Executive Officers as of December 31, 2022:

of Securities Underlying Unexer- cised Options (#) Exer- cisable

Number of Securities Underlying Unexercised

Options (#) Exercisable

of Securities Underlying Unexercised Options (#) Unexer- cisable (1)

Incentive Plan Awards:

Number of Securities Underlying Unexer- cised Unearned Options(#)

Exercise Price($)

Expiration Date

Shares or Units of Stock

Held That Have Not Vested(#)

Value of Shares or Units of Stock That Have Not Vested($)

Incentive Plan Awards:

Number of Unearned Shares, Units or Other Rights That Have Not Vested(#)

Incentive Plan Awards:

Market or Payout Value of Unearned Shares, Units or Other Rights That

Have Not Vested($)

Equity Incentive Plan Awards:

of Securities Underlying Unexer- cised Unearned Options(#)

Option Exercise Price($)

Option Expiration Date

or Units of Stock

That Have Not Vested(#)

Market Value of Shares or Units of

Stock That Have Not Vested($)

Equity Incentive Plan Awards:

of Unearned Shares, Units or Other Rights That Have Not Vested(#)

Equity Incentive Plan Awards:

or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested($)

Iehab Hawatmeh

9 unchanged sentences

for Iehab Hawatmeh, who is also our chief executive officer, we pay our directors $5,000 per year to serve on our board.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

MANAGEMENT AND RELATED STOCKHOLDER MATTERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

following table sets forth certain information, as of March 17, 2023, respecting the beneficial ownership of our outstanding common stock

4 unchanged sentences

and (iii) our directors and Named Executive Officers as a group, based on 4,945,417 shares of common stock outstanding.

Name of Person or Group (1)

of Person or Group (1)

Nature of Ownership

24 unchanged sentences

result in a change in our control.

CERTAIN RELATIONSHIPS AND

TRANSACTIONS, AND DIRECTOR INDEPENDENCE

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

is set forth below for any transaction during the preceding fiscal year to which we were a party and in which any of our officers and

10 unchanged sentences

The principal balance owing on the notes as of December 31, 2022, of $72,466 is included in liabilities from discontinued operations.

the year ended December 31, 2021, we made repayments to related parties of $188,877 and had other noncash reductions of $82,018.

were $21,882 of short-term advances due to related parties as of December 31, 2021.

the year ended December 31, 2022, we made repayments to related parties of $154,832 had other noncash reductions of $422,315.

$21,882 of short-term advances due to related parties as of December 31, 2022.

The advances are due on demand and included in current

12 unchanged sentences

firm of Fruci & Associates II, PLLC has served as our independent registered public accounting firm since July 2020.

our fiscal year ended December 31, 2021, we were billed approximately $18,000 for professional services rendered for the audit

and reviews of our consolidated financial statements.

For our fiscal year ended December 31, 2020, we were billed approximately

$28,500 for professional services rendered for the audit and reviews of our consolidated financial statements.

our fiscal year ended December 31, 2022, we were billed approximately $34,000 for professional services rendered for the audit and reviews

of our consolidated financial statements.

For our fiscal year ended December 31, 2021, we were billed approximately $18,000 for professional

services rendered for the audit and reviews of our consolidated financial statements.

our fiscal years ended December 31, 2022 and 2021, we did not incur any audit-related fees.

41 unchanged sentences

EXHIBITS and FINANCIAL STATEMENT SCHEDULES

following financial statements are filed as part of this report:

Consolidated Financial Statements for the Years Ended December 31, 2021 and 2020:

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Balance Sheets as of December 31, 2021 and 2020

Statements of Operations for the Years Ended December 31, 2021 and 2020

Statements of Stockholders’ Deficit for the Years Ended December 31, 2021 and 2020

Statements of Cash Flows for the Years Ended December 31, 2021 and 2020

to the Consolidated Financial Statements

following exhibits are filed as part of this report:

of Incorporation and Bylaws

54 unchanged sentences

Exchange Act of 1934 and otherwise are not subject to liability.

FORM 10-K SUMMARY

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

15 unchanged sentences

Hollinger, Director

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

the Board of Directors and Shareholders of CirTran Corporation

on the Financial Statements

have audited the accompanying consolidated balance sheets of CirTran Corporation and Subsidiaries (“the Company”) as of December

31, 2021 and 2020, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the

years in the two-year period ended December 31, 2021, and the related notes (collectively referred to as the financial statements).

our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2021 and 2020 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31,

2021, in conformity with accounting principles generally accepted in the United States of America.

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note

3 to the financial statements, the Company has a significant accumulated deficit and working capital deficiency.

These factors raise

substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters

are also described in Note 3.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

Audit Matters

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated

or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Recognition – Refer to Note 2 to the financial statements

of the Critical Audit Matter

discussed in Note 2, the Company recognizes revenue upon transfer of control of promised products or services to customers in an amount

that reflects the consideration expected to be received in exchange for those products or services.

judgment is exercised by the Company in determining revenue recognition for products and services, and includes the following:

● Identification

and treatment of contract terms that may impact the timing and amount of revenue recognized.

● Determination

of stand-alone selling prices for each distinct performance obligation.

management’s revenue recognition was highly judgmental due to the significant estimation required for the recognition of revenue.

the Critical Audit Matter Was Addressed in the Audit

principal audit procedures related to the Company's revenue recognition for these customer agreements included the following, among others:

evaluated management's significant accounting policies related to revenue recognition and

reviewed underlying customer invoices for reasonableness of the application of ASC 606.

obtained and read contract source documents for selected revenue transactions and tested

management’s treatment of those terms.

tested the accuracy and completeness of selected revenue transactions during the year ended

December 31, 2021.

& Associates II, PLLC

have served as the Company’s auditor since 2020.

BALANCE SHEETS

Current assets:

Deposits on inventory

Deposits on inventory -

related party

Accounts receivable

current assets

Total current assets

Investment in securities

Right-of-use asset

and equipment, net of accumulated depreciation

LIABILITIES AND STOCKHOLDERS’

Current liabilities:

Accounts payable

Lease liability, current

Related-party payable

Short-term advances payable

- related parties

Accrued liabilities

Accrued payroll and compensation

Accrued interest, current

Convertible debenture,

current portion, net of discounts

Note payable, current portion

Note payable to stockholders

Derivative liability

from discontinued operations

Total 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

Total liabilities

Commitments and contingencies

Stockholders’ deficit:

Common stock, par value

100,000,000 shares authorized;

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

Additional paid-in capital

( 77,803,460 )

( 77,929,672 )

Total stockholders’

( 40,564,954 )

( 40,698,101 )

Total liabilities and

stockholders’ deficit

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

STATEMENTS OF OPERATIONS

the Years Ended

Cost of sales

Operating expenses:

Employee costs

general and administrative expenses

Total operating expenses

(Loss) income

from operations

Other income (expense)

Interest expense

Loss on disposal of equipment

Gain on forgiveness of

Gain on write off of accounts

Gain (loss) on derivative

Total other (expense)

Net (loss) income

from continuing operations

from discontinued operations

Net (loss) income

from continuing operations per common share, basic

Net income from continuing

operations per common share, diluted

Net income from

discontinued operations per common share, basic

Net income from

discontinued operations per common share, diluted

Net income per share, basic

Net income per share, diluted

Basic and diluted weighted

average common shares outstanding

Diluted weighted average common shares

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

STATEMENTS OF STOCKHOLDERS’ DEFICIT

THE YEARS ENDED DECEMBER 31, 2021 AND 2020

Balance, December 31, 2019

$ ( 78,461,806 )

$ ( 41,234,691 )

Stock option expense

Common stock issued for conversion of accrued

Balance, December 31, 2020

( 77,929,672 )

( 40,698,101 )

Stock option expense

Common stock issued for conversion of accrued

Balance, December 31, 2021

$ ( 77,803,460 )

$ ( 40,564,954 )

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

STATEMENTS OF CASH FLOWS

the Years Ended December 31,

Cash flows from operating activities

Adjustments to reconcile

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

from discontinued operations

Depreciation expense

Loss on derivative valuation

Debt discount amortization

Loss on disposal of equipment

Stock option expense

Gain on forgiveness of

Gain on write off of accounts

( 1,023,471 )

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

Net cash provided by continuing

operating activities

cash provided by (used in) discontinued operations

Net cash provided by operating

Cash flows from investing activities:

Purchase of equipment

Net cash used in investing

Cash flows from financing activities:

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 activities

Net change in cash

beginning of year

Supplemental disclosure of cash flow information:

paid for interest

paid for income taxes

Supplemental disclosure of noncash investing

measurement of derivative liability

stock issued for conversion of accrued interest

accompanying notes are an integral part of these financial statements.

TO CONSOLIDATED FINANCIAL STATEMENTS

1 — ORGANIZATION AND NATURE OF OPERATIONS

1987, CirTran Corporation was incorporated in Nevada under the name Vermillion Ventures, Inc., for the purpose of acquiring other operating

corporate entities.

We were largely inactive until July 1, 2000, when our wholly owned subsidiary, CirTran Corporation (Utah), acquired

substantially all the assets and certain liabilities of Circuit Technology, Inc., founded by our president, Iehab Hawatmeh.

together with our majority-owned subsidiaries, manufacture, distribute, and sell condoms, electronic tobacco products, cigars, energy

drinks, water beverages, and related merchandise, all using the HUSTLER® brand name.

Since entering our 2019 five-year manufacturing

and distribution agreement with an unrelated party, our efforts have been devoted to phase one of our development of all HUSTLER®-branded

products, which led us to generating revenue during 2020 for the first time in several years.

2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States

of America (“U.S.

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.

Intercompany accounts and transactions have been eliminated in consolidation

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.

Actual results could differ from those estimates.

Concentrations

of Credit Risk

maintain our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits.

We continually monitor

our banking relationships and consequently have not experienced any losses in our accounts.

At times, such deposits may exceed the Federal

Deposit Insurance Corporation insurable limit.

consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

There were no cash

equivalents for the years ended December 31, 2021 or 2020.

and Equipment

and equipment are stated at cost less accumulated depreciation and amortization.

Depreciation of property and equipment is calculated

using the straight-line method over the estimated useful lives of the assets, which ranges from three to ten years.

Leasehold improvements

are amortized over the lesser of the remaining term of the lease or the estimated useful life of the asset.

Expenditures for repairs

and maintenance are expensed as incurred.

Gains or losses on dispositions of property and equipment are included in operating results.

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

from Contracts with Customers , for revenue recognition.

Adoption of ASC 606 did not have a significant impact on our financial statements.

We generate revenue by providing product design services and through the sales of tangible product.

We recognize revenue upon transfer

of control of promised products or services to customers in an amount that reflects the consideration expected to be received in exchange

for those products or services.

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

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 years ended December 31, 2021 and 2020, we recognized revenue of $ 60,500 and $ 515,000 , 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.

We have not recognized impairment losses related to the receivables from these contracts during the years

ended December 31, 2021 and 2020.

Additionally,

we recognized revenues of $ 2,862,769 and $ 1,217,625 during the years ended December 31, 2021 and 2020, 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

in ASC 840, Leases , which we adopted for the year ended December 31, 2019, under the modified retrospective transition approach

by applying the new standard to all leases existing at the date of initial application.

We account for short-term leases, those lasting

fewer than 12 months, using the practical expedient as outlined in the guidance, which does not include recording such leases on the

balance sheet.

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

of December 31, 2021.

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

minimum lease payments over the lease term at commencement date.

As the lease does not provide an implicit rate, we use our incremental

borrowing rate based on information available at the commencement date in determining the present value of future payments.

The operating

lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred.

Lease terms may

include options to extend or terminate the lease when it is reasonably certain we will exercise that option.

Although considered, we

determined it was appropriate to exclude future renewal terms from the capitalization of our operating lease.

have one lease in effect requiring minimum monthly payments of $ 2,500 through October 2022.

We have determined the appropriate discount

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 December

31, 2021, is as follows:

SUMMARY OF FUTURE MINIMUM LEASE PAYMENTS DUE

Total future payments

Implied interest

Operating lease liability as of December

in Securities

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

31, 2021 and 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 no t record expenses for the impairment of long-lived assets

during the years ended December 31, 2021 or 2020.

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

Cost on manufactured inventories includes labor, material, and overhead.

Overhead cost is based on indirect costs allocated to cost of sales, work-in-process inventory, and finished goods inventory.

overhead costs have been charged to cost of sales or capitalized as inventory, based on management’s estimate of the benefit of

indirect manufacturing costs to the manufacturing process.

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

market value on current resale amounts and whether technological obsolescence exists.

We will seek agreements with manufacturing customers

that require them to purchase their inventory items in the event they cancel their business with us.

time to time, we will place deposits on inventory to be delivered in the future.

These deposits are carried as a separate balance sheet

component and totaled $ 11,639 (non-related-party) and $ 87,042 (related-party) as of December 31, 2021, and $ 53,900 (non-related-party)

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

most of tobacco related products, the Company pays in advance for Federal Excise Taxes and State Excise Taxes prior to receiving product.

The Company accrues those taxes on its balance sheet and expenses them per-unit basis as sold.

balances consisted of the following:

SCHEDULE OF INVENTORY

Finished goods

Raw materials

Reserve for obsolescence

have outstanding stock options to directors and employees, which are described more fully in Note 13–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.

Value of Financial Instruments

820-10-15, Fair Value Measurement-Overall-Scope and Scope Exceptions , defines fair value, thereby eliminating inconsistencies

in guidance found in various prior accounting pronouncements, and increases disclosures surrounding fair value calculations.

ASC 820-10-15

establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations.

three levels of inputs are defined as follows:

1 —Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

2 —Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the

asset or liability, such as quoted prices for similar assets or liabilities in active markets;

quoted prices for identical assets or

liabilities in markets with insufficient volume or infrequent transactions (less active markets);

or model-derived valuations in which

significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

3 —Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant

to the measurement of the fair value of the assets or liabilities.

payable and related-party payables have fair values that approximate the carrying value due to the short-term nature of these instruments.

Derivative liabilities are measured using level 3 inputs.

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

Fair Value at December 31, 2021

prices in active markets (Level 1)

other observable inputs (Level 2)

Derivative liabilities

Fair Value at December 31, 2020

prices in active markets (Level 1)

other observable inputs (Level 2)

unobservable inputs (Level 3)

Derivative liabilities

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

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 144,264,247 potentially issuable shares from the conversions of convertible debentures

outstanding that were excluded in dilutive outstanding shares for the year ended December 31, 2021, due to the anti-dilutive effect these

would have on net loss per share.

There were 167,761,552 such shares issuable as of December 31,

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.

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

taxes are provided for the tax effects of the transactions reported in the financial statements and consist of taxes currently due plus

deferred taxes related primarily to tax net operating loss carryforwards.

The deferred tax assets and liabilities represent the future

tax return consequences of these differences, which will either be taxable or deductible when assets and liabilities are recovered or

settled, as well as operating loss carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to

apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred

tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

allowance is established against deferred tax assets when in the judgment of management, it is more likely than not that such deferred

tax assets will not become available.

Because the judgment about the level of future taxable income is dependent to a great extent on

matters that may, at least in part, be beyond our control, it is at least reasonably possible that management’s judgment about

the need for a valuation allowance for deferred taxes could change in the near term.

benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities.

amount recognized is measured as the largest amount of benefit that is greater than 50% likely to be realized upon settlement.

for “unrecognized tax benefits” is recorded for any tax benefits claimed in our tax returns that do not meet these recognition

and measurement standards.

As of December 31, 2021 and 2020, no liability for unrecognized tax benefits was required to be reported.

Issued Accounting Pronouncements

have implemented all new accounting pronouncements that are in effect.

These pronouncements did not have any material impact on our financial

statements unless otherwise disclosed, and we do not believe that there are any other new accounting pronouncements that have been issued

that might have a material impact on our financial position or results of operations.

3 — GOING CONCERN

accompanying 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 $ 38,373,523

as of December 31, 2021, and net income

from continuing operations of $ 838,473

for the year ended December 31, 2021.

of December 31, 2021, we had an accumulated deficit of $ 77,803,460 .

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 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.

experience a cash shortfall and be required to raise additional capital.

Historically,

we have mainly relied upon shareholder loans and advances to finance operations and growth.

Management may raise additional capital by

retaining net earnings, if any, or through future public or private offerings of our stock or loans from private investors, although

we cannot assure that we will be able to obtain such financing.

Our failure to do so could have a material and adverse effect upon our

shareholders and us.

4 — PROPERTY AND EQUIPMENT

incur certain costs associated with the design and development of molds and dies for our contract-manufacturing segment.

are held as deposits on the balance sheet until the molds or dies are finished and ready for use.

At that point, the costs are included

as part of production equipment in property and equipment and are amortized over their useful lives.

We hold title to all molds and dies

used in the manufacture of products.

and equipment and estimated service lives consist of the following:

SCHEDULE OF PROPERTY AND EQUIPMENT AND ESTIMATED SERVICE LIVES

Furniture and office equipment

accumulated depreciation

Property and equipment,

recorded $ 3,198 and $ 373 of depreciation expense during the years ended December 31, 2021 and 2020.

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 December 31, 2021 and 2020, 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 ($ 105,000

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.

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

The principal balance owing on the notes as of December

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

No demand for payment has been made.

the year ended December 31, 2021, we made repayments to related parties of $ 396,797

and had other noncash reductions of $ 82,018 .

During the year ended December 31, 2020, we made repayments to related parties of $ 467,409

and received $ 11,500 .

There were $ 21,882 and

short-term advances due to related parties as of December 31, 2021 and 2020, 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 $ 0.10 .

We issued options to purchase 6,000 and 6,000 shares of common stock during the years ended December 31, 2021 and 2020, respectively.

There were options to purchase 6,000 shares of common stock that expired during each year ended December 31, 2021 and 2020.

held outstanding options to purchase 30,000 and 30,000 shares of common stock as of December 31, 2021 and 2020, respectively.

13–Stock Options and Warrants.

of December 31, 2021 and 2020, we owed our president a total of $ 433,379 and $ 868,528 , respectively, in unsecured 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 December 31, 2021 and 2020, 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

the year ended December 31, 2021, we had a net decrease in deposits with a related-party inventory supplier totaling $ 232,291 .

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 $ 1,186,645 and $ 643,772

during the years ended December 31, 2021 and 2020, respectively.

6 — OTHER ACCRUED LIABILITIES

tax liabilities consist of delinquent payroll taxes, interest, and penalties owed by us to the Internal Revenue Service (“IRS”)

and other tax entities.

liabilities consist of the following:

SCHEDULE OF ACCRUED LIABILITIES

Tax liabilities

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

that is due on demand and customer deposits totaling $ 718,535 and $ 751,645 , respectively.

payroll and compensation liabilities consist of the following:

SCHEDULE OF ACCRUED PAYROLL AND COMPENSATION LIABILITIES

Director fees

Bonus expenses

Administrative payroll

7 — COMMITMENTS AND CONTINGENCIES

to GloBrands, LLC

December 2019 Exclusive Manufacturing and Distribution Agreement with GloBrands grants to us the exclusive right to manufacture, distribute,

and sell specified products, including the authority to deal directly with distribution chain participants and to collect all product

We are authorized to retain from the collected sales proceeds an amount equal to 120% of our cost of goods sold, plus 10% of

gross sales of the covered products.

GloBrands reimburses us 105% of certain of our media placement expenses.

Our GloBrands’ agreement

term extends through November 30, 2024, subject to earlier termination by either party following 60 days’ notice of uncured material

time to time, GloBrands, LLC agrees to advance funds to the Company to assist in precuring inventory due to long lead times and to avoid

last minute high cost of shipping.

These advances are booked under Accrued Liabilities.

In addition, the Company bills GloBrands under

its agreement monthly, those amounts get netted out of the advances made.

agreement with GloBrands is subject in all respects to its rights as licensee under its licensing agreements with the Flynt/HUSTLER®

organization to use the HUSTLER® brand name.

The Flynt/HUSTLER® organization has approved our manufacturing and distribution

GloBrands is obligated to fully and timely perform and observe all terms, covenants, and conditions of the three underlying

licenses between it and the Flynt/Hustler organization, including the payment of required minimum and actual royalties to the Flynt/HUSTLER®

organization.

Further, GloBrands cannot amend the license agreements or waive or release any material right under the underlying Flynt/HUSTLER®

Under the Exclusive Manufacturing and Distribution Agreement, we transmit royalty payments on GloBrands’ behalf directly

to the Flynt/HUSTLER® organization.

have a limited license to use the HUSTLER® brand name for the exclusive purposes of fulfilling our obligations under the Exclusive

Manufacturing and Distribution Agreement

vendors, service providers, and others have asserted legal claims in previous years.

These creditors generally are not actively seeking

collection of amounts due to them, and we have determined that the probability of realizing any loss on these claims is remote and will

seek to compromise and settle at a deep discount any of such claims that are asserted for collection.

These amounts are included in our

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.

affiliate, Play Beverages, LLC, filed suit against Playboy Enterprises, Inc., in Cook County, Illinois, Circuit Court in October 2012

asserting numerous claims, including breach of contract and tortious interference.

Playboy responded with a counterclaim of breach of

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.

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

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 December 31, 2021 and 2020, related to this judgment, which is included in liabilities in discontinued

Payroll Taxes, Interest, and Penalties

November 2004, the IRS accepted our amended offer in compromise (the “Offer”) to settle delinquent payroll taxes, interest,

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

waived by the Offer.

In June 2013, we entered into a partial installment agreement to pay $ 768,526 in unpaid 2009 payroll taxes, which

required us to pay the IRS 5 % of cash deposits.

The monthly payments were to continue until the account balances were paid in full or

until the collection statute of limitation expired on October 6, 2020.

We are currently in communication with the IRS regarding the statute

of limitations on this settlement and appropriate next steps.

Amounts of $ 525,238 and $ 673,645 were due as December 31, 2021 and 2020,

respectively.

engage Iehab Hawatmeh, our president and chief executive officer, through an employment agreement entered in August 2009 and amended

in September 2017.

In July 2017, Mr.

Hawatmeh had resigned all positions with us to pursue other business activities, thereby effectively

terminating the agreement.

However, the amendment to his employment agreement in September 2017 reinstated Mr.

Hawatmeh to his previous

positions, with a salary in an amount to be determined.

Among other things, the reinstated employment agreement:

(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.

$ 296,500 was accrued during the year ended December 31, 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 years ended December 31, 2021 and 2020, we granted options to purchase 8,000

shares of common stock, respectively, to Mr.

Hawatmeh and Ms.

We recorded expenses totaling $ 185

during the years ended December 31, 2021 and

2020, respectively, for these options.

We 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.

based on a percentage of sales and remitted quarterly and are included in cost of sales for financial reporting purposes.

8 — NOTES PAYABLE

payable consisted of the following:

SCHEDULE 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

was $ 252,665 and $ 205,165 of accrued interest due on these notes as of December 31, 2021 and 2020, respectively.

9 — CONVERTIBLE DEBENTURES

debentures consisted of the following:

SCHEDULE OF CONVERTIBLE DEBENTURES

Convertible debenture, 5 % stated

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

Convertible debenture, 5 % stated interest rate,

secured by all our assets, due on February 8, 2022

Convertible debenture, 5 % stated interest rate,

secured by all our assets, due on May 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

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

for the 20 trading days prior to conversion.

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.

During the year ended December 31, 2020, the convertible debenture

holder converted $ 4,400 of accrued but unpaid interest into 220,000 shares of our common stock.

of December 31, 2021 and 2020, we had accrued interest on the convertible debentures totaling $ 1,655,037 and

$ 1,528,511 , respectively, of which $ 55,710 and $ 41,960 was current and $ 1,599,328 and $ 1,486,551 was long term, respectively.

As of December

31 , 2021 and 2020, the debentures, including accrued but unpaid interest, were convertible into

144,264,247 and 167,761,552 shares of our common stock, respectively.

10 — DERIVATIVE LIABILITIES

discussed in Note 9—Convertible Debentures, we have entered into five separate agreements to borrow a total of $ 2,665,528 with

the outstanding principal and interest being convertible at the holder’s option into common stock of the company at the lesser

of $ 100 (notes one through four) or $0.10 (note five) or the lowest closing bid price in the prior 20 trading days .

Embedded derivatives

are valued separately from the host instrument and are recognized as derivative liabilities in our balance sheet.

We measure these instruments

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 December 31, 2021, using the following assumptions:

SCHEDULE OF DERIVATIVE LIABILITIES AT FAIR VALUE

36.5 % - 103 %

Risk-free rates

Remaining life

fair values of the derivative instruments are measured each quarter, which resulted in a loss of $ 16,143 and $ 22,822 during the years

ended December 31, 2021 and 2020, respectively.

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

$ 938,794 and $ 922,654 , respectively.

11 – COMMON STOCK TRANSACTIONS

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

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.

the year ended December 31, 2020, we issued a total of 220,000 shares of common stock for the conversion of $ 4,400 of accrued interest.

12 — INCOME TAXES

did not provide any current or deferred U.S.

federal income tax provision or benefit for any of the periods presented because we have

experienced operating losses since inception.

When it is more likely than not that a tax asset cannot be realized through future income,

the company must allow for this future tax benefit.

We provided a full valuation allowance on the net deferred tax asset, consisting

of net operating loss carryforwards, because management has determined that it is more likely than not that we will not earn income sufficient

to realize the deferred tax assets during the carryforward period.

federal income tax rate of 21 % is being used.

have not taken a tax position that, if challenged, would have a material effect on the financial statements for the years ended December

31, 2021 and 2020, applicable under FASB ASC 740, Income Taxes .

We did not recognize any adjustment to the liability for an uncertain

tax position and, therefore, did not record any adjustment to the beginning balance of accumulated deficit on the balance sheet.

our tax returns remain open.

of December 31, 2021 and 2020, we had net operating loss carryforwards for tax reporting purposes of approximately $ 20.2 million

and $ 19.0 million, respectively.

During the year ended December 31, 2019, we dissolved four subsidiaries that had total net operating

loss carryforwards of approximately $ 8.9 million, which were forfeited upon dissolution, reducing our deferred tax asset by approximately

$ 1.9 million .

In addition, the realization of tax benefits relating to net operating loss carryforwards is limited due to the settlement

related to amounts previously due to the IRS, as discussed in Note 6 – Other Accrued Liabilities.

SCHEDULE OF NET DEFERRED TAX ASSETS

Deferred Tax Assets:

NOL Carryover

Less valuation allowance

( 3,791,763 )

Net deferred tax assets

income tax provision differs from the amount of income tax determined by applying the U.S.

federal income tax rate to pretax income from

continuing operations for the years ended December 31, 2021 and 2020 due to the following:

SCHEDULE OF RECONCILIATION OF INCOME TAXES COMPUTED AT STATUTORY RATE

Book income (loss)

Change in payroll accruals

Stock option expense

Amortization of debt discount

Change in derivative liability

Valuation allowance

Income tax expense

13 — STOCK OPTIONS AND WARRANTS

Incentive Plans

the years ended December 31, 2021 and 2020, we granted to employees 8,000 and 8,000 options to purchase shares of common stock.

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 %.

8,000 options granted during the year ended December 31, 2020, were valued using the following assumptions:

estimated five -year term,

estimated volatility of 103 %, and a risk-free rate of 0.10 %.

of December 31, 2021 and 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.

of December 31, 2021, there were 40,000 options issued and vested with a weighted average exercise price of $ 0.08 and a weighted average

remaining life of 2.92 years.

Outstanding options as of December 31, 2021, consisted of:

SCHEDULE OF STOCK OPTIONS OUTSTANDING

14— DISCONTINUED OPERATIONS

October 21, 2016, we exited the beverage licensing and distribution business.

The assets and liabilities associated with this business

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

Additionally, the

revenues and costs associated with this business are displayed as losses from discontinued operations for the years ended December 31,

2021 and 2020.

assets and liabilities included in discontinued operations were as follows:

SCHEDULE OF DISCONTINUED OPERATIONS

Assets from Discontinued Operations:

assets from discontinued operations

Liabilities from Discontinued Operations:

Accounts payable

Accrued liabilities

Accrued interest

Accrued payroll and compensation

Current maturities of long-term

Related-party payable

advances payable

liabilities from discontinued operations

(loss) income from discontinued operations for the years ended December 31, 2021 and 2020, were comprised of the following components:

ended December 31,

Other income (expense):

Interest expense

on write off of accounts payable

Total other income

Net income from

discontinued operations

15 — SUBSEQUENT EVENTS

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-K

Item 9A. Controls and Procedures