What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-15 compared with 2023-11-20 · 115 added, 141 removed, 415 unchanged (38% of the section changed)

FINANCIAL STATEMENTS

BALANCE SHEETS

September 30, 2023

CONSOLIDATED BALANCE SHEETS

March 31, 2024

December 31, 2023

3 unchanged sentences

Deposits on inventory

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

Accounts receivable

Other current assets

1 unchanged sentence

Investment in securities at cost

Right-of-use asset

Property and equipment, net of accumulated depreciation

3 unchanged sentences

Liabilities for product returns and credits

Related-party payable

Accounts payable Related party

Short-term advances payable

28 unchanged sentences

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

STATEMENTS OF OPERATIONS

Three Months Ended

September 30,

Nine Months Ended

September 30,

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended March 31,

Cost of sales

3 unchanged sentences

Total operating expenses

Income (loss) from operations

Loss from operations

Other income (expense)

1 unchanged sentence

Gain on forgiveness of debt

Gain (loss) on derivative valuation

Loss on derivative valuation

Total other expense

1 unchanged sentence

Loss from discontinued operations

$ ( 205,755 )

$ ( 345,912 )

Net loss before income tax

Income tax benefit (expense)

$ ( 518,088 )

5 unchanged sentences

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

STATEMENTS OF STOCKHOLDERS’ DEFICIT

THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

stockholders’

5 unchanged sentences

$ ( 22,296,773 )

Balance, June 30, 2023

( 80,028,883 )

( 42,790,377 )

Balance, September 30, 2023

$ ( 80,234,638 )

$ ( 42,996,132 )

stockholders’

2 unchanged sentences

$ ( 42,067,045 )

Balance, March 31, 2022

$ ( 79,305,551 )

$ ( 42,067,045 )

Balance, June 30, 2022

( 78,414,878 )

( 41,176,372 )

( 78,414,878 )

( 41,176,372 )

Balance, September 30, 2022

Net income (loss)

Balance, March 31, 2023

$ ( 79,785,896 )

3 unchanged sentences

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

STATEMENTS OF CASH FLOWS

For the Nine Months Ended

September 30,

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31,

Cash flows from operating activities

6 unchanged sentences

Debt discount amortization

Gain on forgiveness of debt

Amortization of right-of-use asset to rent expense

Gain on settlement of debt

Changes in operating assets and liabilities:

6 unchanged sentences

Accrued liabilities

Payments for lease liability

Accrued payroll and compensation

2 unchanged sentences

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 loans payable

Repayments of related-party loans

Net Cash used in financing activities

Net Cash used by financing activities

Net change in cash

4 unchanged sentences

Cash paid for income taxes

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

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

TO UNAUDITED CONDENSED 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, 2023, 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, 2024, 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

25 unchanged sentences

There were no cash

equivalents as of September 30, 2023 and December 31, 2022.

equivalents as of March 31, 2024 and December 31, 2023.

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, 2023 and 2022, we recognized revenue of $ 538,228 and $ 402,723 , respectively, related to the performance

the three months ended March 31, 2024 and 2023, we recognized revenue of $ 19,515 and $ 52,570 , respectively, related to the performance

obligations under product development service agreements with customers.

6 unchanged sentences

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

during the nine months ended September 30, 2023 and 2022.

during the three months ended March 31, 2024 and 2023.

Additionally,

we recognized revenues of $ 900,204 and $ 1,292,984 during the nine months ended September 30, 2023 and 2022, respectively, related to

the delivery of products 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, and price.

we recognized revenues of $ 409,876 and $ 160,839 during the three months ended March 31, 2024 and 2023, respectively, related to the delivery

of products 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.

The Company also recognizes revenue from advanced

royalty payments per the terms in its Manufacturing and Distribution Agreement with one if its distributors.

The royalty to be received

is calculated based on 8 % of gross sales, with an annual minimum royalty paid upfront per calendar year for the term of the contract.

There is a non-refundable $ 350,000 Minimum Royalty for FY2023 and a $ 150,000 annual operational fee (marketing and support).

recognizes the minimum royalty at the time of receipt.

The annual $ 150,000 fee is recognized over one year.

Company also recognizes revenue from advanced royalty payments per the terms in its Manufacturing and Distribution Agreement with one

of its distributors.

The royalty to be received is calculated based on 8 % of gross sales, with an annual minimum royalty paid upfront

per calendar year for the term of the contract.

There is a non-refundable $ 350,000 Minimum Royalty for FY 2023.

The Company recognizes

the minimum royalty and corresponding expense at the time of receipt.

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

3 unchanged sentences

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

As of September 30, 2023, the Company has recorded an allowance

for doubtful accounts of $ 39,438 .

As March 31, 2024 and December 31, 2023, the Company has no t

recorded an allowance for doubtful accounts.

in Securities

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

30, 2023 and December 31, 2022.

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.

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

at March 31, 2024 and December 31, 2023.

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.

Pursuant to ASC 321, the Company also searched for observable transactions in the investee’s stock.

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

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

9 unchanged sentences

These deposits are carried as a separate balance sheet

component and total $ 65,440 (non-related-party) and $ 92,175 (related-party) as of September 30, 2023 and $ 40,440 (non-related-party)

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

component and total $ 22,508 (non-related-party) and $ 216,113 (related-party) as of March 31, 2024 and $ 26,983 (non-related-party) and

$ 224,411 (related-party) as of December 31, 2023.

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

2 unchanged sentences

SCHEDULE OF INVENTORY

March 31, 2024

December 31, 2023

Finished goods

Raw materials

Value of Financial Instruments

15 unchanged sentences

Derivative liabilities are measured using level 3 inputs.

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

September 30,

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

Quoted prices

12 unchanged sentences

462,334,000 and 179,468,200 potentially issuable shares from the conversions of convertible debentures outstanding that were excluded

in dilutive outstanding shares for the nine months ended September 30, 2023 and 2022, respectively, due to the anti-dilutive effect these

in dilutive outstanding shares for the three months ended March 31, 2024 and 2023, respectively, due to the anti-dilutive effect these

would have on net loss per share.

4 unchanged sentences

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.

Company continually assesses any new accounting pronouncements to determine their applicability.

When it is determined that a new accounting

pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change

to its Consolidated Financial Statements and assures that there are proper controls in place to ascertain that the Company’s Consolidated

Financial Statements properly reflect the change.

3 — GOING CONCERN

1 unchanged sentence

as a going concern.

We had a working capital deficiency of $ 40,588,828 as of September 30, 2023, and a net loss from continuing operations

of $ 814,303 for the nine months ended September 30, 2023.

As of September 30, 2023, we had an accumulated deficit of $ 80,234,638 .

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

We had a working capital deficiency of $ 19,823,850 as of March 31, 2024, and a net loss from continuing operations

of $ 479,827 for the three months ended March 31, 2024.

As of March 31, 2024, we had an accumulated deficit of $ 59,535,279 .

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

20 unchanged sentences

SCHEDULE OF PROPERTY AND EQUIPMENT AND ESTIMATED SERVICE LIVES

September 30, 2023

March 31, 2024

December 31, 2023

3 unchanged sentences

Property and equipment, net

recorded $ 3,260 and $ 2,857 of depreciation expense during the nine months ended September 30, 2023 and 2022.

recorded $ 1,228 and $ 922 of depreciation expense during the three months ended March 31, 2024 and 2023.

5 — RELATED PARTY TRANSACTIONS

2 unchanged sentences

There were no repayments made during the periods presented.

At September 30, 2023 and December 31, 2022, the principal amount

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

At March 31, 2024 and December 31, 2023, 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, 2024 and December 31, 2023, 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 September 30, 2023 and December 31, 2022, respectively.

were $ 21,882 and $ 21,882 of short-term advances due to related parties as of March 31, 2024 and December 31, 2023, 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 September 30, 2023 and December 31, 2022.

See Note 13–Stock Options and Warrants.

of September 30, 2023 and December 31, 2022, we owed our president a total of $ 433,379 and $ 433,379 , respectively, in unsecured advances.

Hawatmeh held outstanding options to purchase 30,000 shares of common stock as of March 31, 2024.

See Note 11–Stock

Options and Warrants.

of March 31, 2024 and December 31, 2023, 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, 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 date.

the nine months ended September 30, 2023, we had a net decrease in deposits with a related-party inventory supplier totaling $ 325,458 .

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

the three months ended March 31, 2024, we had a net decrease in deposits with a related-party inventory supplier totaling $ 8,298 .

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 $ 251,788 and $ 837,618

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

during the periods ended March 31, 2024 and December 31, 2023, respectively.

6 — OTHER ACCRUED LIABILITIES

2 unchanged sentences

liabilities consist of the following:

OF ACCRUED LIABILITIES

September 30,

SCHEDULE OF ACCRUED LIABILITIES

Tax liabilities

accrued liabilities as of September 30, 2023 and December 31, 2022, include a non-interest-bearing payable totaling $ 45,000 and $ 45,000 ,

Accrued Royalty - Globrands LLC

accrued liabilities as of March 31, 2024 and December 31, 2023, include a non-interest-bearing payable totaling $ 45,000 and $ 45,000 ,

respectively, that is due on demand and customer deposits totaling $ 1,924,814 and $ 1,735,109 , respectively.

payroll and compensation liabilities consist of the following:

OF ACCRUED PAYROLL AND COMPENSATION LIABILITIES

September 30,

SCHEDULE OF ACCRUED PAYROLL AND COMPENSATION LIABILITIES

Director fees

24 unchanged sentences

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

have accrued $ 17,205,599 as of September 30, 2023 and December 31, 2022, related to this judgment, which is included in liabilities in

discontinued operations.

balance due related to this judgment, has been included in liabilities in discontinued operations.

As of December 31, 2023, the Company

received legal representation that the judgement can no longer be enforced after seven years, as a result, the Company has recognized

a gain from discontinued operations of $ 18,878,359 of time barred debt previously included in liabilities from discontinued operations.

Payroll Taxes, Interest, and Penalties

9 unchanged sentences

of limitations on this settlement and appropriate next steps.

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

December 31, 2022, respectively.

During the year ended December 31, 2023, the Company wrote off $ 512,520

as time barred debt.

The amounts of $ 5,164 and $ 5,164 were due as March 31, 2024 and December 31, 2023, respectively.

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

21 unchanged sentences

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

$ 258,750 and $ 345,000 was accrued during the period ended September 30, 2023 and December 31, 2022, respectively.

$ 74,124 and $ 345,000 was accrued during the periods ended March 31, 2024 and December 31, 2023, 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:

OF NOTES PAYABLE

September 30, 2023

SCHEDULE OF NOTES PAYABLE

March 31, 2024

December 31, 2023

2 unchanged sentences

Small Business Administration loan

is $ 353,302 and $ 300,165 of accrued interest due on these notes as of September 30, 2023 and December 31, 2022, respectively.

is $ 379,806 and $ 366,626 of accrued interest due on these notes as of March 31, 2024 and December 31, 2023, respectively.

9 — CONVERTIBLE DEBENTURES

debentures consisted of the following:

OF CONVERTIBLE DEBENTURES

September 30, 2023

SCHEDULE OF CONVERTIBLE DEBENTURES

March 31, 2024

December 31, 2023

8 unchanged sentences

for the 20 trading days prior to conversion.

of September 30, 2023 and December 31, 2022, we had accrued interest on the convertible debentures totaling $ 1,887,997 and $ 1,788,318 ,

respectively.

of March 31, 2024 and December 31, 2023, we had accrued interest on the convertible debentures totaling $ 1,954,819 and $ 1,921,590 , 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 September 30, 2023, using the following assumptions:

OF DERIVATIVE LIABILITIES AT FAIR VALUE

simulation as of March 31, 2024, using the following assumptions:

SCHEDULE OF DERIVATIVE LIABILITIES AT FAIR VALUE

114.8 % - 127.5 %

3 unchanged sentences

0.25 - 3.08 years

fair values of the derivative instruments are measured each quarter, which resulted in a loss of $ 19,238 and $ 35,105 during the nine

months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023 and December 31, 2022, the fair market value of the

derivatives aggregated $ 1,024,075 and $ 1,004,837 , respectively.

fair values of the derivative instruments are measured each quarter, which resulted in a loss of $ 248,454 and $ 124,545 during the three

months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024 and December 31, 2023, the fair market value of the derivatives

aggregated $ 1,545,391 and $ 1,296,937 , respectively.

11 — STOCK OPTIONS AND WARRANTS

Incentive Plans

the nine months ended September 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 September 30, 2023 and December 31, 2022, we had no unrecognized compensation related to outstanding options that have not yet vested

of March 31, 2024 and December 31, 2023, 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, 2023 and December 31, 2022, there were 40,000 options issued and vested with a weighted average exercise price of $ 0.03

of March 31, 2024 and December 31, 2023, there were 40,000 options issued and vested with a weighted average exercise price of $ 0.03

and a weighted average remaining life of 1.68 years.

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

OF STOCK OPTIONS OUTSTANDING

Outstanding options as of March 31, 2024, consisted of:

SCHEDULE OF STOCK OPTIONS OUTSTANDING

Exercise Price

3 unchanged sentences

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 September 30, 2023 and December 31, 2022.

Additionally, the

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

The assets and liabilities associated with this

business are displayed as assets and liabilities from discontinued operations as of March 31, 2024 and December 31, 2023.

Additionally, the revenues and costs associated with this business are displayed as losses from discontinued operations.

the year ended December 31, 2023, the Company received legal representation that the judgement related to Play Beverages, LLC, (Note

7) can no longer be enforced after seven years, as a result, the Company has recognized a gain from discontinued operations of $ 18,873,932

of time barred debt previously included in liabilities from discontinued operations.

SCHEDULE OF DISCONTINUED OPERATIONS

assets and liabilities included in discontinued operations were as follows:

OF DISCONTINUED OPERATIONS

September 30, 2023

March 31, 2024

December 31, 2023

10 unchanged sentences

Total liabilities from discontinued operations

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

Nine Months ended September 30,

loss from discontinued operations for the three months ended March 31, 2024 and 2023, were comprised of the following components:

Three Months ended March 31,

Other expense:

1 unchanged sentence

Net loss from discontinued operations

$ ( 114,784 )

13 — SUBSEQUENT EVENTS

3 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