What changed in this filing

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Item 1. Financial Statements

2023-05-22 compared with 2022-11-21 · 277 added, 239 removed, 252 unchanged (67% of the section changed)

1 unchanged sentence

BALANCE SHEETS

on inventory - related party

current assets

March 31, 2023

December 31, 2022

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

Deposits on inventory

Deposits on inventory - related party

Accounts receivable, net of allowance for doubtful accounts of $ 39,438 and $ 39,438 , respectively

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 liabilities:

payable, net of current portion

debenture, net of current portion, net of discount

and contingencies

Stockholders’

stock, par value $ 0.001 ;

Accounts payable

Liabilities for product returns and credits

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:

Deferred tax liability

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 ;

100,000,000 shares authorized;

4,945,417 shares issued and outstanding

paid-in capital

Additional paid-in capital

Accumulated deficit

( 79,785,896 )

( 79,305,551 )

stockholders’ deficit

Total stockholders’ deficit

( 42,547,390 )

( 42,067,045 )

liabilities and stockholders’ deficit

Total liabilities and stockholders’ deficit

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

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

September 30,

general and administrative expenses

STATEMENTS OF OPERATIONS

For the Three Months Ended March 31,

Cost of sales

Operating expenses:

from operations

Employee costs

Selling, general and administrative expenses

Total operating expenses

Loss from operations

Other income (expense)

Interest expense

Gain on forgiveness of debt

on derivative valuation

other expense

loss from continuing operations

from discontinued operations

$ ( 345,912 )

$ ( 304,648 )

Loss on derivative valuation

Total other expense

Net loss from continuing operations

Loss from discontinued operations

Net loss before income tax

$ ( 480,345 )

$ ( 296,503 )

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

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 share, basic and diluted

Basic 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 NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

Stockholders’

December 31, 2021

STATEMENTS OF STOCKHOLDERS’ DEFICIT

THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

Additional Paid-in

Total stockholders’

Balance, December 31, 2022

$ ( 79,305,551 )

3 unchanged sentences

$ ( 42,547,390 )

Balance, June 30,

( 78,414,878 )

( 41,176,372 )

September 30, 2022

$ ( 78,760,790 )

$ ( 41,522,284 )

Stockholders’

December 31, 2020

Additional Paid-in

Total stockholders’

Balance, December 31, 2021

$ ( 77,803,460 )

$ ( 40,564,954 )

stock issued for conversion of accrued interest

Net income (loss)

Balance, March 31, 2022

1 unchanged sentence

$ ( 40,861,457 )

Balance, June 30,

( 78,507,212 )

( 41,268,891 )

September 30, 2021

$ ( 78,811,860 )

$ ( 41,573,539 )

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended

September 30,

flows from operating activities

STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31,

Cash flows from operating activities

$ ( 480,345 )

$ ( 296,503 )

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

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

Gain on forgiveness of debt

Amortization of right-of-use asset to rent expense

Changes in operating assets and liabilities:

Deposits on inventory

Deposits on inventory - related party

Accounts receivable

Other current assets

Accounts payable

Liabilities for product returns and credits

Accrued liabilities

Payments for lease liability

Accrued payroll and compensation

Accrued interest

Net cash provided by operating activities

Cash flows from investing activities:

Cash flows from financing activities:

Repayments of related-party loans

Net Cash used in 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

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

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1 — ORGANIZATION AND NATURE OF OPERATIONS

16 unchanged sentences

In the opinion of our management, all adjustments, including

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.

normal recurring adjustments necessary to present fairly our financial position, as of March 31, 2023, 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

11 unchanged sentences

Products, Inc., and CirTran Asia, Inc.

All intercompany accounts and transactions have been eliminated in consolidation

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 three months ended March 31, 2023 and the year ended December 31, 2022.

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

9 unchanged sentences

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

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

the three months ended March 31, 2023 and 2022, we recognized revenue of $ 52,570 and $ 130,299 , 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 three months ended March 31, 2023 and 2022.

Additionally,

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

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.

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

we recognized revenues of $ 160,839 and $ 561,469 during the three months ended March 31, 2023 and 2022, 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.

that have been recognized but not yet received are recorded as accounts receivable.

Losses on receivables will be recognized when it

is more likely than not that a receivable will not be collected.

An allowance for estimated uncollectible amounts will be recognized

to reduce the amount receivable to its net realizable value when needed.

As of March 31, 2023, the Company has recorded an allowance

for doubtful accounts of $ 39,438 .

in Securities

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

cost-method investment consists of an investment in a private digital multi-media technology company that totaled $ 300,000 at March 31,

2023 and December 31, 2022.

14 unchanged sentences

These deposits are carried as a separate balance sheet

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.

component and total $ 40,440 (non-related-party) and $ 143,154 (related-party) as of March 31, 2023 and $ 40,440 (non-related-party) and

$ 417,633 (related-party) as of December 31, 2022.

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

March 31, 2023

December 31, 2022

Finished goods

Raw materials

Value of Financial Instruments

15 unchanged sentences

Derivative liabilities are measured using level 3 inputs.

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

September 30,

active markets

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

Total Fair Value at March 31, 2023

Quoted prices in active markets

Significant other observable inputs (Level 2)

Derivative liabilities

Total Fair Value at December 31, 2022

Quoted prices in active markets (Level 1)

Significant other observable inputs (Level 2)

Significant 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 shares outstanding

3 unchanged sentences

There were 179,468,200

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

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.

and 79,146,472 potentially issuable shares from the conversions of convertible debentures outstanding that were excluded in dilutive

outstanding shares for the three months ended March 31, 2023 and 2022, respectively, due to the anti-dilutive effect these would have

on net loss per share.

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

4 unchanged sentences

3 — GOING CONCERN

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

GAAP, which contemplate our continuation

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

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.

We had a working capital deficiency of $ 40,178,774 as of March 31, 2023, and a net loss from continuing operations

of $ 442,504 for the three months ended March 31, 2023.

As of March 31, 2023, we had an accumulated deficit of $ 79,785,896 .

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 accompanying unaudited consolidated 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.

16 unchanged sentences

SCHEDULE OF PROPERTY AND EQUIPMENT AND ESTIMATED SERVICE LIVES

and office equipment

March 31, 2023

December 31, 2022

Useful Life (years)

Furniture and office equipment

accumulated depreciation

and equipment, net

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

Property and equipment, net

recorded $ 922 and $ 941 of depreciation expense during the three months ended March 31, 2023 and 2022.

5 — RELATED-PARTY TRANSACTIONS

2 unchanged sentences

There were no repayments made during the periods presented.

At September 30, 2022, and December 31, 2021, the principal amount

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

At March 31, 2023 and December 31, 2022, 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 September

The principal balance owing on the notes as of March

31, 2023 and December 31, 2022, was $ 72,466 and $ 72,466 , respectively.

No demand for payment has been made.

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.

were $ 21,882 and $ 21,882 of short-term advances due to related parties as of March 31, 2023 and December 31, 2022, respectively.

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 .

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

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

Hawatmeh held outstanding options to purchase 30,000 shares of common stock as of March 31, 2023 and December 31, 2022.

See Note 13–Stock Options and Warrants.

of March 31, 2023 and December 31, 2022, 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 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.

of March 31, 2023 and December 31, 2022, we owed a total of $ 0 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 three months ended March 31, 2023, we had a net decrease in deposits with a related-party inventory supplier totaling $ 274,479 .

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 $ 143,154 and $ 341,734

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

during the periods ended March 31, 2023 and December 31, 2022, respectively.

6 — OTHER ACCRUED LIABILITIES

2 unchanged sentences

liabilities consist of the following:

SCHEDULE OF ACCRUED LIABILITIES

accrued liabilities as of September 30, 2022, and December 31, 2021, include a non-interest-bearing payable totaling $ 45,000 and $ 45,000 ,

OF ACCRUED LIABILITIES

March 31, 2023

December 31, 2022

Tax liabilities

accrued liabilities as of March 31, 2023 and December 31, 2022, include a non-interest-bearing payable totaling $ 45,000 and $ 45,000 ,

respectively, that is due on demand and customer deposits totaling $ 1,543,170 and $ 1,437,361 , respectively.

payroll and compensation liabilities consist of the following:

SCHEDULE OF ACCRUED PAYROLL AND COMPENSATION LIABILITIES

Administrative

OF ACCRUED PAYROLL AND COMPENSATION LIABILITIES

March 31, 2023

December 31, 2022

Director fees

Bonus expenses

Administrative payroll

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 September 30, 2022, and December 31, 2021, related to this judgment, which is included in liabilities

in discontinued operations.

have accrued $ 17,205,599 as of March 31, 2023 and December 31, 2022, related to this judgment, which is included in liabilities in discontinued

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 September 30, 2022, and December

Amounts of $ 517,684 and $ 517,684 were due as March 31, 2023 and December

31, 2022, respectively.

22 unchanged sentences

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

$ 258,750 was accrued during the nine months ended September 30, 2022.

$ 86,250 and $ 345,000 was accrued during the period ended March 31, 2023 and December 31, 2022, respectively.

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

3 unchanged sentences

payable consisted of the following:

SCHEDULE OF NOTES PAYABLE

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.

OF NOTES PAYABLE

March 31, 2023

December 31, 2022

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

Note payable for settlement of debt (long-term)

Small Business Administration loan

is $ 311,877 and $ 300,165 of accrued interest due on these notes as of March 31, 2023 and December 31, 2022, respectively.

9 — CONVERTIBLE DEBENTURES

debentures consisted of the following:

SCHEDULE OF CONVERTIBLE DEBENTURES

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

OF CONVERTIBLE DEBENTURES

March 31, 2023

December 31, 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 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.

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.

of March 31, 2023 and December 31, 2022, we had accrued interest on the convertible debentures totaling $ 1,821,176 and $ 1,788,318 , 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 September

30, 2022, using the following assumptions:

SCHEDULE OF DERIVATIVE LIABILITIES AT FAIR VALUE

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

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.

12 — STOCK OPTIONS

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

simulation as of March 31, 2023, using the following assumptions:

OF DERIVATIVE LIABILITIES AT FAIR VALUE

129.1 % - 137.7 %

Risk-free rates

4.19 % - 4.42 %

Remaining life

0.25 - 4.08 years

fair values of the derivative instruments are measured each quarter, which resulted in a loss of $ 124,545 and $ 36,053 during the three

months ended March 31, 2023 and 2022, respectively.

As of March 31, 2023 and December 31, 2022, the fair market value of the derivatives

aggregated $ 1,129,382 and $ 1,004,837 , respectively.

11 — STOCK OPTIONS AND WARRANTS

Incentive Plans

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:

estimated five -year term,

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

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 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 September 30, 2022, consisted of:

SCHEDULE OF STOCK OPTIONS OUTSTANDING

the three months ended March 31, 2023, 8,000 options previously granted to employees expired.

During the same period we granted those

same employees 8,000

new options to purchase shares of common stock.

The value of the options is nominal;

therefore there is no current impact to the financial statements.

of March 31, 2023 and December 31, 2022, 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, 2023 and December 31, 2022, there were 40,000

options issued and vested with a weighted average

exercise price of $ 0.03

and a weighted average remaining life of 2.18

Outstanding options as of March 31, 2023,

consisted of:

OF STOCK OPTIONS OUTSTANDING

Exercise Price

Average Exercise

Remaining Life

12— 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, 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.

are displayed as assets and liabilities from discontinued operations as of March 31, 2023 and December 31, 2022.

Additionally, the revenues

and costs associated with this business are displayed as losses from discontinued operations.

assets and liabilities included in discontinued operations were as follows:

SCHEDULE OF DISCONTINUED OPERATIONS

from Discontinued Operations:

OF DISCONTINUED OPERATIONS

March 31, 2023

December 31, 2022

Assets from Discontinued Operations:

from Discontinued Operations:

payroll and compensation expense

maturities of long-term debt

Related-party

advances payable

Total assets from discontinued operations

Liabilities 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 )

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 three months ended March, 2023 and 2022, were comprised of the following components:

Three Months ended March 31,

Other expense:

Interest expense

Net loss from discontinued operations

13 — 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

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 .

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

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

these unaudited consolidated financial statements.

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