What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-26 compared with 2024-05-15 · 98 added, 83 removed, 447 unchanged (29% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

March 31, 2024

June 30, 2024

December 31, 2023

43 unchanged sentences

CONSOLIDATED 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

2 unchanged sentences

Net loss before income tax

Income tax benefit (expense)

$ ( 518,088 )

$ ( 480,345 )

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

4 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023

stockholders’

5 unchanged sentences

( 22,296,773 )

stockholders’

Balance, June 30, 2024

$ ( 59,931,388 )

$ ( 22,692,882 )

Additional Paid-in

Total stockholders’

Balance, December 31, 2022

1 unchanged sentence

$ ( 42,067,045 )

Balance, March 31, 2023

( 79,785,896 )

( 42,547,390 )

( 79,785,896 )

( 42,547,390 )

Net income (loss)

Balance, March 31, 2023

Balance, June 30, 2023

$ ( 80,028,883 )

4 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31,

For the Six Months Ended

Cash flows from operating activities

1 unchanged sentence

$ ( 723,332 )

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

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

Loss from discontinued operations

13 unchanged sentences

Accrued interest

Net cash provided by operating activities

Net cash provided (used) by operating activities

Cash flows from investing activities:

Purchase of property and equipment

Net Cash used in investing activities

Cash flows from financing activities:

Repayments of loans payable

Proceeds from loans payable

Proceeds from related-party loans

Repayments of related-party loans

Net Cash used by financing activities

Net Cash (used) provided by 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, 2024, 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, 2024, 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

25 unchanged sentences

There were no cash

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

equivalents as of June 30, 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 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.

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, 2024 and 2023.

the six months ended June 30, 2024 and 2023, we recognized revenue of $ 48,004 and $ 23,228 , 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, 2024 and 2023.

Additionally,

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

we recognized revenues of $ 771,878 and $ 648,692 during the six months ended June 30, 2024 and 2023, respectively, related to the delivery

of products to our customers.

16 unchanged sentences

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

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

As of June 30, 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 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.

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

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 and found none.

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

10 unchanged sentences

These deposits are carried as a separate balance sheet

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

component and total $ 22,508 (non-related-party) and $ 619,189 (related-party) as of June 30, 2024 and $ 26,983 (non-related-party) and

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

3 unchanged sentences

SCHEDULE OF INVENTORY

March 31, 2024

June 30, 2024

December 31, 2023

1 unchanged sentence

Raw materials

Value of Financial Instruments

Fair Value of Financial Instruments

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

29 unchanged sentences

300,617,000 and 151,982,800 potentially issuable shares from the conversions of convertible debentures outstanding that were excluded

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.

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.

in dilutive outstanding shares for the six months ended June 30, 2024 and 2023, 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

7 unchanged sentences

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 .

We had a working capital deficiency of $ 20,195,795 as of June 30, 2024, and a net loss from continuing operations

of $ 837,674 for the six months ended June 30, 2024.

As of June 30, 2024, we had an accumulated deficit of $ 59,931,388 .

These conditions

22 unchanged sentences

SCHEDULE OF PROPERTY AND EQUIPMENT AND ESTIMATED SERVICE LIVES

March 31, 2024

June 30, 2024

December 31, 2023

3 unchanged sentences

Property and equipment, net

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

recorded $ 2,447 and $ 1,893 of depreciation expense during the six months ended June 30, 2024 and 2023.

5 — RELATED PARTY TRANSACTIONS

2 unchanged sentences

There were no repayments made during the periods presented.

At March 31, 2024 and December 31, 2023, the principal amount owing

At June 30, 2024 and December 31, 2023, 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,

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 March 31, 2024 and December 31, 2023, respectively.

were $ 21,882 and $ 21,882 of short-term advances due to related parties as of June 30, 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 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 terms of his employment agreement require us to grant options to purchase 6,000

shares of our stock each year.

Hawatmeh held

outstanding options to purchase 24,000

shares of common stock as of June 30, 2024.

Note 11–Stock Options and Warrants.

of June 30, 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.

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

the six months ended June 30, 2024, we had a net increase in deposits with a related-party inventory supplier totaling $ 394,778 .

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

2 unchanged sentences

Total inventory purchases from the related party were $ 562,290 and $ 837,618

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

during the periods ended June 30, 2024 and December 31, 2023, respectively.

6 — OTHER ACCRUED LIABILITIES

3 unchanged sentences

SCHEDULE OF ACCRUED LIABILITIES

June 30, 2024

December 31, 2023

Tax liabilities

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.

accrued liabilities as of June 30, 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 $ 2,196,164 and $ 1,735,109 , respectively.

payroll and compensation liabilities consist of the following:

SCHEDULE OF ACCRUED PAYROLL AND COMPENSATION LIABILITIES

June 30, 2024

December 31, 2023

Director fees

41 unchanged sentences

as time barred debt.

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

The amounts of $ 5,164 and $ 5,164 were due as June 30, 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.

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

$ 74,124 and $ 345,000 was accrued during the periods ended June 30, 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

4 unchanged sentences

SCHEDULE OF NOTES PAYABLE

March 31, 2024

June 30, 2024

December 31, 2023

2 unchanged sentences

Small Business Administration loan

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

is $ 391,648 and $ 366,626 of accrued interest due on these notes as of June 30, 2024 and December 31, 2023, respectively.

9 — CONVERTIBLE DEBENTURES

1 unchanged sentence

SCHEDULE OF CONVERTIBLE DEBENTURES

March 31, 2024

June 30, 2024

December 31, 2023

4 unchanged sentences

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

Debt carrying amount

current portion

2 unchanged sentences

for the 20 trading days prior to conversion.

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.

of June 30, 2024 and December 31, 2023, we had accrued interest on the convertible debentures totaling $ 1,988,046 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 March 31, 2024, using the following assumptions:

simulation as of June 30, 2024, using the following assumptions:

SCHEDULE OF DERIVATIVE LIABILITIES AT FAIR VALUE

114.8 % - 127.5 %

Risk-free rates

4.83 % - 4.98 %

Remaining life

0.25 - 2.83 years

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

fair values of the derivative instruments are measured each quarter, which resulted in a loss of $ 326,259 and $ 44,503 during the six

months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024 and December 31, 2023, the fair market value of the derivatives

aggregated $ 1,623,196 and $ 1,296,937 , respectively.

1 unchanged sentence

Incentive Plans

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 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 March 31, 2024, consisted of:

of June 30, 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 June 30, 2024 and December 31, 2023, there were 32,000 options issued and vested with a weighted average exercise price of $ 0.01 and

a weighted average remaining life of 2.48 years.

Outstanding options as of June 30, 2024, consisted of:

SCHEDULE OF STOCK OPTIONS OUTSTANDING

4 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 March 31, 2024 and December 31, 2023.

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 June 30, 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

3 unchanged sentences

assets and liabilities included in discontinued operations were as follows:

March 31, 2024

June 30, 2024

December 31, 2023

10 unchanged sentences

Total liabilities from discontinued operations

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,

loss from discontinued operations for the six months ended June 30, 2024 and 2023, 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