What changed in this filing

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Item 1. Financial Statements

2023-08-21 compared with 2023-05-22 · 109 added, 87 removed, 442 unchanged (31% of the section changed)

1 unchanged sentence

BALANCE SHEETS

March 31, 2023

June 30, 2023

December 31, 2022

2 unchanged sentences

Deposits on inventory - related party

Deposits on inventory

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

9 unchanged sentences

Related-party payable

Accounts payable Related party

Short-term advances payable

Short-term advances payable - related parties

Short-term advances payable

Accrued liabilities

26 unchanged sentences

STATEMENTS OF OPERATIONS

For the Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cost of sales

7 unchanged sentences

Gain on forgiveness of debt

Loss on derivative valuation

Gain (loss) on derivative valuation

Total other expense

1 unchanged sentence

Loss from discontinued operations

Net loss before income tax

$ ( 242,987 )

$ ( 314,915 )

$ ( 723,332 )

$ ( 611,418 )

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

Net loss from continuing operations per common share, basic

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

Net loss per share, basic and diluted

Basic weighted average common shares outstanding

Net loss from discontinued operations per common share, basic

Net loss per common share, basic and diluted

Basic and diluted weighted average common shares outstanding

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

STATEMENTS OF STOCKHOLDERS’ DEFICIT

THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022

Additional Paid-in

6 unchanged sentences

( 42,547,390 )

Balance, June 30, 2023

$ ( 80,028,883 )

$ ( 42,790,377 )

Additional Paid-in

3 unchanged sentences

$ ( 40,564,954 )

Net income (loss)

Balance, March 31, 2022

1 unchanged sentence

( 40,861,457 )

Balance, June 30, 2022

$ ( 78,414,878 )

$ ( 41,176,372 )

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

STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Cash flows from operating activities

19 unchanged sentences

Accrued interest

Net cash provided by operating activities

Net cash (used) provided by operating activities

Cash flows from investing activities:

Purchase of property and equipment

Net Cash used in investing activities

Cash flows from financing activities:

Proceeds from loans payable

Proceeds from related-party loans

Repayments of related-party loans

Net Cash used in financing activities

Net Cash provided by (used in) financing activities

Net change in cash

24 unchanged sentences

In the opinion of our management, all adjustments, including

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.

normal recurring adjustments necessary to present fairly our financial position, as of June 30, 2023, and the results of our operations

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

The results of operations for the interim period are not necessarily

24 unchanged sentences

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.

There were no cash equivalents

as of June 30, 2023 and 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 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.

the six months ended June 30, 2023 and 2022, we recognized revenue of $ 23,228 and $ 227,404 , 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 six months

ended June 30, 2023 and 2022.

Additionally,

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

we recognized revenues of $ 648,692 and $ 991,285 during the six months ended June 30, 2023 and 2022, respectively, related to the delivery

of product to our customers.

9 unchanged sentences

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 .

As of June 30, 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 March 31,

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

2023 and December 31, 2022.

14 unchanged sentences

These deposits are carried as a separate balance sheet

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

component and total $ 50,440 (non-related-party) and $ 0 (related-party) as of June 30, 2023 and $ 40,440 (non-related-party) and $ 417,633

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

3 unchanged sentences

SCHEDULE OF INVENTORY

March 31, 2023

June 30, 2023

December 31, 2022

19 unchanged sentences

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)

Total Fair Value at

June 30, 2023

Quoted prices in active

markets (Level 1)

Significant other observable

inputs (Level 2)

Significant unobservable

inputs (Level 3)

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)

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

5 unchanged sentences

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.

outstanding shares for the six months ended June 30, 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

10 unchanged sentences

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 .

We had a working capital deficiency of $ 40,406,753 as of June 30, 2023, and a net loss from continuing operations

of $ 647,230 for the six months ended June 30, 2023.

As of June 30, 2023, we had an accumulated deficit of $ 80,028,883 .

These conditions

22 unchanged sentences

SCHEDULE OF PROPERTY AND EQUIPMENT AND ESTIMATED SERVICE LIVES

March 31, 2023

June 30, 2023

December 31, 2022

3 unchanged sentences

Property and equipment, net

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

recorded $ 1,893 and

of depreciation expense during the six months ended June 30, 2023 and 2022.

5 — RELATED-PARTY TRANSACTIONS

2 unchanged sentences

There were no repayments made during the periods presented.

At March 31, 2023 and December 31, 2022, the principal amount owing

At June 30, 2023 and December 31, 2022, the principal amount owing

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

5 unchanged sentences

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

The principal balance owing on the notes as of March

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

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

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.

were $ 58,366 and $ 21,882 of short-term advances due to related parties as of June 30, 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 price

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

Hawatmeh held outstanding options to purchase 30,000 shares of common stock as of June 30, 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.

of June 30, 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 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

of June 30, 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 .

the six months ended June 30, 2023, we had a net decrease in deposits with a related-party inventory supplier totaling $ 417,633 .

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

2 unchanged sentences

Total inventory purchases from the related party were $ 509,114 and $ 341,734

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

during the periods ended June 30, 2023 and December 31, 2022, respectively.

6 — OTHER ACCRUED LIABILITIES

3 unchanged sentences

OF ACCRUED LIABILITIES

March 31, 2023

June 30, 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.

accrued liabilities as of June 30, 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 $ 1,626,861 and $ 1,437,361 , respectively.

payroll and compensation liabilities consist of the following:

OF ACCRUED PAYROLL AND COMPENSATION LIABILITIES

March 31, 2023

June 30, 2023

December 31, 2022

25 unchanged sentences

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

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

have accrued $ 17,205,599 as of June 30, 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 $ 517,684 were due as March 31, 2023 and December

The amounts of $ 517,684 and $ 517,684 were due as June 30, 2023 and December

31, 2022, respectively.

22 unchanged sentences

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

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

$ 172,500 and $ 345,000 was accrued during the period ended June 30, 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

4 unchanged sentences

OF NOTES PAYABLE

March 31, 2023

June 30, 2023

December 31, 2022

2 unchanged sentences

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.

is $ 339,978 and $ 300,165 of accrued interest due on these notes as of June 30, 2023 and December 31, 2022, respectively.

9 — CONVERTIBLE DEBENTURES

1 unchanged sentence

OF CONVERTIBLE DEBENTURES

March 31, 2023

June 30, 2023

December 31, 2022

8 unchanged sentences

for the 20 trading days prior to conversion.

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.

of June 30, 2023 and December 31, 2022, we had accrued interest on the convertible debentures totaling $ 1,854,405 and $ 1,788,318 , respectively.

10 — DERIVATIVE LIABILITIES

7 unchanged sentences

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

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

simulation as of June 30, 2023, using the following assumptions:

OF DERIVATIVE LIABILITIES AT FAIR VALUE

4 unchanged sentences

0.25 - 3.83 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.

fair values of the derivative instruments are measured each quarter, which resulted in a loss of $ 44,503 and $ 33,949 during the six months

ended June 30, 2023 and 2022, respectively.

As of June 30, 2023 and December 31, 2022, the fair market value of the derivatives aggregated

$ 1,049,340 and $ 1,004,837 , respectively.

11 — STOCK OPTIONS AND WARRANTS

Incentive Plans

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 six months ended June 30, 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:

therefore there is no current impact

to the financial statements.

of June 30, 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 June 30, 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 years.

Outstanding options as of June 30, 2023, consisted of:

OF STOCK OPTIONS OUTSTANDING

5 unchanged sentences

The assets and liabilities associated with this business

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

are displayed as assets and liabilities from discontinued operations as of June 30, 2023 and December 31, 2022.

Additionally, the revenues

2 unchanged sentences

OF DISCONTINUED OPERATIONS

March 31, 2023

June 30, 2023

December 31, 2022

10 unchanged sentences

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,

loss from discontinued operations for the six months ended June 30, 2023 and 2022, were comprised of the following components:

Six Months ended June 30,

Other expense:

6 unchanged sentences

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