What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-04-15 compared with 2025-04-15 · 274 added, 196 removed, 554 unchanged (46% of the section changed)

7 unchanged sentences

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Shareholders of CirTran Corporation

on the Financial Statements

have audited the accompanying consolidated balance sheets of CirTran Corporation (“the Company”) as of December 31, 2024

and 2023, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the years in

the two-year period ended December 31, 2024, and the related notes (collectively referred to as the financial statements).

In our opinion,

the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and

2023 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity

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

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

As discussed in Note

3 to the financial statements, the Company has a working capital deficiency, a net loss from continuing operations, and an accumulated

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

plans in regard to these matters are also described in Note 3.

The financial statements do not include any adjustments that might result

from the outcome of this uncertainty.

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

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

financial statements based on our audits.

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

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

federal securities

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

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

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

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

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

As part of our audits,

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

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

To the Board of Directors and Stockholders

of CirTran Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheets of CirTran Corporation (“the Company”) as of December 31, 2025 and 2024, and the related consolidated statements

of operations, stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2025, and the

related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all

material respects, the financial position of the Company as of December 31, 2025, and 2024 and the results of its operations and its cash

flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted

in the United States of America.

Going Concern

The accompanying financial statements

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

As discussed in Note 3 to the financial statements, the

Company has a working capital deficiency, a net loss from continuing operations, and an accumulated deficit.

These factors, among others,

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

Management’s plans in regard to these

matters are also described in Note 3.

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

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are

required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance

with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

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

The Company is not required to have, nor were

we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an

understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the

Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

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

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

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

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

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

We believe that our audits

provide a reasonable basis for our opinion.

Audit Matters

audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be

communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and

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

Our audits included performing procedures

to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that

respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as

evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters

arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee

and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,

subjective, or complex judgments.

We determined that there were no critical audit matters.

Fruci & Associates II, PLLC –

PCAOB ID #05525

We have served as the Company’s

auditor since 2020.

Fruci & Associates II, PLLC – PCAOB ID #05525

We have served as the Company’s auditor since 2020.

Spokane,Washington

41 unchanged sentences

( 25,107,195 )

( 24,405,561 )

Total liabilities and stockholders’ deficit

12 unchanged sentences

Gain on forgiveness of debt

Gain on disposal of equipment

(Loss) gain on disposal of equipment

Impairment of investment

Loss on derivative valuation

Gain (loss) on derivative valuation

( 1,161,498 )

3 unchanged sentences

( 2,547,354 )

(Loss) income from discontinued operations

Net (loss) income before income tax

Loss from discontinued operations

Net Loss before income tax

( 2,701,240 )

Net (loss) income

$ ( 701,634 )

$ ( 2,626,876 )

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

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

Net (loss) income per common share, basic and diluted

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

Net loss per common share, basic and diluted

Basic and diluted weighted average common shares outstanding

6 unchanged sentences

$ ( 21,778,685 )

Balance, December 31, 2023

( 2,626,876 )

( 59,017,191 )

( 21,778,685 )

Balance, December 31, 2024

( 61,644,067 )

( 24,405,561 )

Net income (loss)

( 61,644,067 )

9 unchanged sentences

Cash flows from operating activities

Net ( loss) income

$ ( 701,634 )

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

Loss (gain) from discontinued operations

$ ( 2,626,876 )

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

Loss from discontinued operations

Depreciation expense

Loss on derivative valuation

Gain (loss) on derivative valuation

Debt discount amortization

9 unchanged sentences

Accounts payable

( 1,188,715 )

Liabilities for product returns and credits

4 unchanged sentences

Net cash used by operating activities

( 1,338,174 )

Cash flows from investing activities:

Purchase of property and equipment

Proceeds from sale of automobile

Net Cash used in investing activities

Net cash provided by investing activities

Cash flows from financing activities:

Bank overdraft

Repayments of loans payable

Proceeds from related-party loans

48 unchanged sentences

Deposit Insurance Corporation insurable limit.

As of December 31, 2025, one customer represented 97.4 % of the Company’s total accounts receivable, resulting

in a significant concentration of credit risk.

segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the

Chief Operating Decision Maker (“CODM”), or decision maker group, in deciding how to allocate resources to an individual

segment and in assessing performance.

Our chief operating decision–making is composed of the Chief Executive Officer.

has two operating segments as of December 31, 2025 and 2024.

(see Note 12).

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

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

the years ended December 31, 2024 and 2023, we recognized revenue of $ 90,929 and $ 410,000 , respectively, related to the performance obligations

under product development service agreements with customers.

These contracts are long term in nature and revenue is recognized at certain

milestone intervals upon our delivery and customer acceptance of work product related to those milestones:

namely, product design, packaging,

branding display, and prototypes.

There were no costs to obtain the contracts identified, and therefore, no asset has been recorded for

customer acquisition costs.

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

ended December 31, 2024 and 2023.

the years ended December 31, 2025 and 2024, we recognized revenue of $ 77,267

and $ 90,929 ,

respectively, We recognize $ 5,000 per month for administrative services and a 5% markup per agreement .

Additionally,

we recognized revenues of $ 1,205,867 and $ 1,206,148 during the years ended December 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.

we recognized revenues of $ 3,049,624

and $ 1,205,867

during the years ended December 31, 2025 and 2024, 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 recognize revenue under the unique contract upon fulfilment of our performance obligations therein, typically

limited to the delivery of product.

Payment terms depend on customer agreement and length of relationship.

It varies between cash

in advance to 30-60 days term.

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

The Company estimates credit losses based on the

Current Expected Credit Losses (CECL) model as required by ASC 326.

The allowance for credit losses is based on a variety of factors,

including historical loss experience, current conditions, and reasonable and supportable forecasts of future economic conditions.

Current Expected Credit Losses (“CECL”) model in accordance with ASC 326.

The allowance for credit losses is based on a variety

of factors, including historical loss experience, current conditions, and reasonable and supportable forecasts of future economic conditions.

adoption of ASU 2025-05 in the year ended December 31, 2025, the Company elected the practical expedient to estimate expected credit

losses based on actual uncollected accounts.

Under this approach, the Company recognizes credit losses as receivables are deemed uncollectible

rather than applying more complex forward-looking modeling.

The Company applied this guidance prospectively, and the adoption did not

have a material impact on the Company’s consolidated financial statements.

The election of this practical expedient simplifies

the estimation process by reducing the level of judgment and complexity required in applying the CECL model.

of December 31, 2025 and 2024, the Company has recorded an allowance for doubtful accounts of $ 65,704 and $ 4,839 , respectively.

1 unchanged sentence

cost-method investment consists of an investment in a private digital multi-media technology company that totaled $ 248,000 and $ 248,000

at December 31, 2024 and 2023, respectivley.

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

We evaluated the investment for impairment and determined that the investment was impaired as of December 31, 2024.

recognized a loss on an impairment of $ 52,000

as of December 31, 2024.

at December 31, 2025 and 2024, respectively.

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.

We evaluated the investment for impairment and determined that

the investment was not impaired as of December 31, 2025.

We recognized a loss on an impairment of $ 52,000 as of December 31, 2024.

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

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

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

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

indirect manufacturing costs to the manufacturing process.

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

9 unchanged sentences

balances consisted of the following:

SCHEDULE OF INVENTORY

Finished goods

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Derivative liabilities are measured using level 3 inputs.

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

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

Quoted prices

38 unchanged sentences

Issued Accounting Pronouncements

Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280):

to Reportable Segment Disclosures, in November 2023.

This update enhances segment reporting disclosures to provide investors with more

useful and transparent information about a company’s operating segments.

Public companies must now disclose significant segment

expenses that are regularly reviewed by the chief operating decision-maker (CODM).

These expenses should be reported on an itemized basis,

providing more insight into segment profitability.

Companies must provide segment disclosures in both annual and interim reports.

disclosures apply to all public entities under FASB’s segment reporting rules.

Effective for fiscal years beginning after December

15, 2023, including interim periods within those fiscal years.

Early adoption is permitted.

In December 2023, the FASB issued ASU 2023-09, Income

Taxes (Topic 740):

Improvements to Income Tax Disclosures, which enhances the disclosure requirements for income taxes, including additional

disaggregation of rate reconciliation and income taxes paid.

The standard is effective for annual periods beginning after December 15,

The Company adopted ASU 2023-09 in the annual financial statements for the year ended December 31, 2025, and for interim periods

within the year of adoption.

The adoption had no impact on the Company’s financial statements.

Financial Accounting Standards Board (FASB) issued Accounting Standards Update ASU 2025-02 - Liabilities (Topic 405):

Amendments to SEC

Paragraphs Pursuant to SEC SAB No.

122, which is effective for annual periods beginning after December 15, 2024, and may require full

retrospective adoption.

This amendment eliminates outdated SEC guidance previously codified under SAB No.

122 and may impact disclosures

or recognition related to obligations and liabilities.

The Company adopted this ASU, effective for the year ended December 31, 2025.

The adoption had no impact on the Company’s financial statements.

Financial Accounting Standards Board (FASB) issued Accounting Standards Update ASU 2024-01 - Compensation - Stock Compensation (Topic

Scope Application of Profits Interest and Similar Awards, effective for public entities for annual periods beginning after December

This may impact whether profits interest or similar awards are within the scope of ASC 718 and thus could affect compensation

expense accounting.

The Company adopted this ASU, effective for the year ended December 31, 2024.

The adoption had no impact on the Company’s

financial statements.

January 1, 2026, the Company adopted Accounting Standards Codification (“ASC”) Topic 326, Financial Instruments—Credit

Losses , as amended by ASU 2025-05, which the Company elected to early adopt.

ASC Topic 326 replaces the incurred loss model with

an expected credit loss model for financial assets measured at amortized cost, including accounts receivable and contract assets.

ASC 326, the Company is required to estimate lifetime expected credit losses upon initial recognition of financial assets and update

those estimates each reporting period based on historical experience, current conditions, and reasonable and supportable forecasts.

connection with the adoption of ASU 2025-05, the Company elected the practical expedient to estimate expected credit losses based on

actual uncollected accounts.

The Company elected to early adopt this guidance as it simplifies the application of the CECL model and

reduces the level of estimation complexity and judgment required, given the short-term nature of the Company’s receivables and

its historical collection experience.

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

15 unchanged sentences

the coming year, our foreseeable cash requirements will relate to the development of business operations and associated expenses.

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

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

Historically,

35 unchanged sentences

were $ 1,400,699 and $ 22,452 of short-term advances due to related parties as of December 31, 2025 and 2024, respectively.

have previously agreed to issue stock options to Iehab Hawatmeh, our president, as compensation for services provided as our chief executive

The terms of his employment agreement require us to grant options to purchase 6,000 shares of our stock each year.

held outstanding options to purchase 24,000 shares of common stock as of December 31, 2024.

See Note 11–Stock Options and Warrants.

of December 31, 2025 and 2024, we owed our president a total of $ 433,379 and $ 433,379 , respectively, in unsecured advances.

3 unchanged sentences

These amounts are included in our liabilities from discontinued operations.

of December 31, 2024, the Company owes the CEO $ 7,059 for short term advances to the Company.

The advances are non-interest bearing and

due on demand.

the years ended December 31, 2024 and 2023, we had a net decrease in deposits with a related-party inventory supplier totaling $ 223,774

and $ 193,222 , respectively.

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

All transactions were at a 2 % markup

over the related-party’s cost paid for inventory in arm’s-length transactions.

Total inventory purchases from the related

party were $ 1,168,930 and $ 837,618 during the periods ended December 31, 2024 and 2023, respectively.

inventory purchases from the related parties were $ 251,394 and $ 292,102 during the years ended December 31, 2025 and 2024, respectively

All transactions were at a 2 % markup over the related-party’s cost paid for inventory in arm’s-length transactions.

6 — OTHER ACCRUED LIABILITIES

24 unchanged sentences

to be barred by the applicable statute of limitations, which generally is eight years for judgments in Utah.

Enterprises, Inc.

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

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

Playboy responded with a counterclaim of breach of

contract and trademark infringement.

After proceedings in October 2016, the court awarded a judgment of $ 6.6 million to Playboy against

Play Beverages and CirTran Beverage Corp., our subsidiary.

The court denied our motion for a new trial and awarded Playboy treble patent

infringement damages and attorney’s fees.

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

Playboy has initiated

collection efforts but has recovered no funds.

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

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

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

and penalties, which required us to pay $ 500,000 , remain current in our payment of taxes for five years , and forego claiming any net

operating losses for the years 2001 through 2015 or until we paid taxes on future profits in an amount equal to the taxes of $ 1,455,767

waived by the Offer.

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

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

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

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

We are currently in communication with the IRS regarding the statute

of limitations on this settlement and appropriate next steps.

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 December 31, 2024 and 2023, respectively.

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

28 unchanged sentences

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

Note payable for settlement of debt (long-term)

Small Business Administration loans

Note payable for settlement of debt

Small Business Administration loan

is $ 447,334 and $ 402,906 of accrued interest due on these notes as of December 31, 2025 and 2024, respectively.

2 unchanged sentences

SCHEDULE OF CONVERTIBLE DEBENTURES

Convertible debenture, 5 % stated interest rate, secured by all our assets, due on May 30, 2022

Convertible debenture, 5 % stated interest rate, secured by all our assets, due on February 8, 2022

Convertible debenture, 5 % stated interest rate, secured by all our assets, due on May 30, 2022

Convertible debenture, 5 % stated interest rate, secured by all our assets, due on December 8, 2022

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

Debt carrying amount

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

current portion

2 unchanged sentences

for the 20 trading days prior to conversion.

On November 26, 2025, the Company and the lender entered

into a Forbearance and Standstill Agreement, extending the maturity date on all debentures to April 30, 2027.

of December 31, 2025 and 2024, we had accrued interest on the convertible debentures totaling $ 2,179,837 and $ 2,055,232 , respectively.

10 unchanged sentences

SCHEDULE OF DERIVATIVE LIABILITIES AT FAIR VALUE

December 31, 2025

December 31, 2024

108.7 % - 117.2 %

136.0 % - 139.62 %

Risk-free rates

3.53 % - 3.59 %

4.09 % - 4.13 %

Remaining life

0.25 - 1.33 years

0.25 - 2.33 years

summary of the activity of the derivative liability for these notes is as follows:

5 unchanged sentences

Balance at December 31, 2025

fair values of the derivative instruments are measured each quarter, which resulted in a loss of $ 1,161,498 and $ 292,100 during the years

ended December 31, 2024 and 2023, respectively.

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

$ 2,458,435 and $ 1,296,937 , respectively.

fair values of the derivative instruments are measured each quarter, which resulted in a gain (loss) of $ 64,891 and ($ 1,161,498 ) during

the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025 and 2024, the fair market value of the derivatives

aggregated $ 2,393,544 and $ 2,458,435 , respectively.

11 — STOCK OPTIONS AND WARRANTS

2 unchanged sentences

that would be recognized in subsequent periods.

of December 31, 2024 and 2023, there were 32,000 and 40,000 options, respectively, issued and vested with a weighted average exercise

price of $ 0.01 .

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

OF STOCK OPTIONS OUTSTANDING

SCHEDULE OF STOCK OPTIONS OUTSTANDING

Average Remaining Life

1 unchanged sentence

Outstanding, December 31, 2024

Outstanding, December 31, 2025

Exercisable, December 31, 2025

8 unchanged sentences

following table details revenue, operating expenses, and assets for the Company’s reportable segments for the year ended December

OF SEGMENTAL INFORMATION

All other product lines

SCHEDULE OF SEGMENTAL INFORMATION

product lines

Current Assets:

Deposits on inventory

Accounts receivable

Other current assets

Total current assets

Investment in securities at cost

Property and equipment, net of accumulated depreciation

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable

Liabilities for product returns and credits

Short-term advances payable

Short-term advances payable - related parties

Short-term advances payable

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:

Note payable, net of current portion

Convertible debenture, net of current portion, net of discount

Total liabilities

Stockholders’ Equity:

Additional paid-in capital

Accumulated deficit

( 6,155,024 )

( 56,190,677 )

( 62,345,701 )

Total stockholders’ equity

( 6,155,024 )

( 18,952,171 )

( 25,107,195 )

Total liabilities and stockholders’ deficit

product lines

Cost of sales

Operating expenses:

Employee costs

Selling, general and administrative expenses

Total operating expenses

Loss from operations

Other income (expense):

Interest expense

Gain on settlement of debt

Gain on forgiveness of debt

Loss on derivative valuation

Total other expense

Net loss from continuing operations

Loss from discontinued operations

Net Loss before income tax

$ ( 193,099 )

$ ( 508,535 )

$ ( 701,634 )

following table details revenue, operating expenses, and assets for the Company’s reportable segments for the year ended December

product lines

Current Assets:

Deposits on inventory

Deposits on inventory - related party

Deposits on inventory

Accounts receivable

10 unchanged sentences

Short-term advances payable - related parties

advances payable

Short-term advances payable

Accrued liabilities

21 unchanged sentences

Total liabilities and stockholders’ deficit

All other product lines

product lines

Cost of sales

45 unchanged sentences

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

of December 31, 2024 and 2023, we recognized a tax benefit of $ 74,364 and $ 8,533 , respectively,

for our LBC Products, Inc, subsidiary only.

LBC is not considered part of the consolidated company for tax purposes.

SCHEDULE OF NET DEFERRED TAX ASSETS

Deferred Tax Assets:

NOL Carryover

Less valuation allowance

( 1,585,600 )

( 1,177,300 )

Net deferred tax assets

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

2 unchanged sentences

SCHEDULE OF RECONCILIATION OF INCOME TAXES COMPUTED AT STATUTORY RATE

Book income (loss)

$ ( 115,100 )

$ ( 552,900 )

Change in payroll accruals

Allowance for doubtful accounts

Amortization of debt discount

1 unchanged sentence

Change in derivative liability

Other non-deductible expenses

Valuation allowance

( 4,393,800 )

Income tax expense

tax computations are as follows:

OF TAX COMPUTATION

December 31, 2025

December 31, 2024

Net losses before taxes

$ ( 701,634 )

$ ( 2,701,240 )

Adjustments to arrive at taxable loss:

Permanent differences:

Temporary differences:

$ ( 701,634 )

$ ( 2,701,240 )

Federal income tax benefit

$ ( 147,300 )

$ ( 567,300 )

NOL carried forward prior year (tax return)

$ ( 1,744,600 )

$ ( 1,177,300 )

NOL carried forward at period end

$ ( 1,891,900 )

$ ( 1,744,600 )

Deferred Tax Asset - Federal Rate ( 21 %)

Deferred Tax Asset - State Rate ( 4.5 %) (1)

Total Deferred Tax Asset

Valuation Allowance

$ ( 482,435 )

$ ( 444,873 )

Deferred tax per books

corporate tax rate.

OF EFFECTIVE INCOME TAX

Expected tax liability (benefit):

$ ( 147,343 )

$ ( 567,260 )

Expected tax liability (benefit), State Rate:

Permanent differences

Change in valuation allowance

Income tax benefit

14 — DISCONTINUED OPERATIONS

4 unchanged sentences

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.

assets and liabilities included in discontinued operations were as follows:

SCHEDULE OF DISCONTINUED OPERATIONS

December 31, 2024

December 31, 2023

Assets from Discontinued Operations:

11 unchanged sentences

Other expense:

Gain on settlement

Gain on forgiveness of debt

Interest expense

$ ( 153,466 )

$ ( 153,886 )

Net loss from discontinued operations

$ ( 153,466 )

$ ( 153,886 )

15 — SUBSEQUENT EVENTS

4 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-K

Item 8. Financial Statements and Supplementary Data