What changed in this filing

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Item 1. Financial Statements

2024-11-15 compared with 2024-08-14 · 183 added, 152 removed, 687 unchanged (33% of the section changed)

2 unchanged sentences

Condensed Consolidated Financial Statements

June 30, 2024

September 30, 2024

Splash Beverage Group, Inc.

Condensed Consolidated Balance Sheets

June 30, 2024 and December 31, 2023

September 30, 2024 and December 31, 2023

September 30,

December 31, 2023

27 unchanged sentences

Preferred stock, $ 0.001 par value, 5,000,000 shares authorized, no shares issued

Common Stock, $ 0.001 par, 300,000,000 shares authorized, 53,886,610 shares issued, 44,330,099 shares outstanding at June 30, 2024 and December 31, 2023

Common Stock, $ 0.001 par, 300,000,000 shares authorized, 61,230,548 shares issued, 44,330,099 shares outstanding at September 30, 2024 and December 31, 2023

Additional paid in capital

11 unchanged sentences

Condensed Consolidated Statements of Operations and Comprehensive Loss

For the Three Months and Six Months Ended June 30, 2024 and 2023

Three months ended June 30

Six months ended June 30,

For the Three Months and Nine Months Ended September 30, 2024 and 2023

Three months ended September 30

Nine months ended September 30,

Cost of goods sold

11 unchanged sentences

Other Income/Expense

Legal reserve

Amortization of debt discount

13 unchanged sentences

in Stockholders’ Equity

For the Six months ended June 30, 2024 and 2023

For the Nine months ended September 30, 2024 and

Common Shares

17 unchanged sentences

( 121,670,574

Debt discount from convertible instrument

Share based compensation

Issuance of common stock for services

Issuance of warrants on convertible instruments

Accumulated Comprehensive loss – translation, net

Balances at September 30, 2023

( 127,340,655

Balances at December 31, 2023

9 unchanged sentences

( 136,746,623

Issuance of common stock for New note

Issuance of common stock for convertible note

Share based compensation

5 unchanged sentences

( 142,073,327

Share based compensation

Issuance of common stock for convertible note

Issuance of warrants on convertible instruments

Conversion of notes payable to common stock

Issuance of common stock for services

Accumulated Comprehensive loss – translation, net

Balances at September 30, 2024

( 146,792,889

The accompanying notes are an integral part of these

2 unchanged sentences

Condensed Consolidated Statement of Cash Flows

For the Six Months Ended June 30, 2024 and 2023

For the Nine Months Ended September 30, 2024 and 2023

$ ( 14,717,161 )

4 unchanged sentences

ROU assets, net

Common stock issued for services

Non-cash share-based compensation

44 unchanged sentences

direct to their office, facilities, and or homes.

Note 2 – Summary

of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Accounting

33 unchanged sentences

with an original maturity of three months or less to be cash equivalents.

The Company had no cash equivalents at June 30, 2024 or December

The Company had no cash equivalents at September 30, 2024 or

December 31, 2023.

Our cash in bank deposit accounts, at times, may exceed

federally insured limits of $250,000.

At June 30, 2024 and December 31, 2023, the Company’s cash on deposit with financial institutions,

at times, had not exceeded federally insured limits of $250,000.

At September 30, 2024, the Company had $120,275 in excess of the federally insured limits.

31, 2023, the Company’s cash on deposit with financial institutions, at times, had not exceeded federally insured limits of $250,000.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated

Financial Statements

Notes to the Condensed Consolidated Financial Statements

Note 2 – Summary of Significant Accounting

5 unchanged sentences

balance, and current economic conditions.

At June 30, 2024 and December 31, 2023, our accounts receivable amounts are reflected net of

allowances of $ 669,130 and $ 890,631 , respectively.

At September 30, 2024 and December 31, 2023, our accounts receivable amounts are reflected net

of allowances of $ 595,305 and $ 890,631 , respectively.

Inventory is stated at the lower of cost or net realizable

value, accounted for using the weighted average cost method.

The inventory balances at June 30, 2024 and December 31, 2023 consisted of

raw materials, work-in-process, and finished goods held for distribution.

The inventory balances at September 30, 2024 and December 31, 2023 consisted

of raw materials, work-in-process, and finished goods held for distribution.

The cost elements of inventory consist of purchase of products,

6 unchanged sentences

Company manages inventory levels and purchase commitments in an effort to maximize utilization of inventory on hand and under commitments.

The amount of our reserve was $ 236,100 and $ 290,524 at June 30, 2024 and December 31, 2023, respectively.

The amount of our reserve was $ 227,186 and $ 290,524 at September 30, 2024 and December 31, 2023, respectively.

Property and Equipment

7 unchanged sentences

Depreciation expense totaled $ 37,043 and $ 38,242 for

the three months ended June 30, 2024 and June 30, 2023, respectively.

For the six months ended June 30, 2024 and June 30, 2023 depreciation

expense totaled $ 74,229 and $ 78,366 respectively.

Property and equipment as of June 30, 2024 and December 31, 2023 consisted of the following:

the three months ended September 30, 2024 and September 30, 2023, respectively.

For the nine months ended September 30, 2024 and September

30, 2023 depreciation expense totaled $ 111,271 and $ 98,285 respectively.

Property and equipment as of September 30, 2024 and December

31, 2023 consisted of the following:

Schedule of property and equipment

33 unchanged sentences

The liabilities and indebtedness presented on the

condensed consolidated financial statements approximate fair values at June 30, 2024 and December 31, 2023, consistent with recent negotiations

of notes payable and due to the short duration of maturities and market rates of interest.

condensed consolidated financial statements approximate fair values at September 30, 2024 and December 31, 2023, consistent with recent

negotiations of notes payable and due to the short duration of maturities and market rates of interest.

Embedded debt costs

92 unchanged sentences

Company management

has determined that there are no material uncertain tax positions at June 30, 2024 and December 31, 2023.

has determined that there are no material uncertain tax positions at September 30, 2024 and December 31, 2023.

Net income (loss) per share

11 unchanged sentences

For the three months ended

June 30, 2024 and June 30, 2023 the Company recorded advertising expenses of $ 109,624 and $ 194,415 , respectively.

The Company recorded

advertising expense of $ 187,251 and $ 389,462 for the six months ended June 30, 2024 and 2023, respectively.

September 30, 2024 and September 30, 2023 the Company recorded advertising expenses of $ 216,359 and $ 248,512 , respectively.

recorded advertising expense of $ 403,610 and $ 1,075,127 for the nine months ended September 30, 2024 and 2023, respectively.

Goodwill and Intangibles Assets

13 unchanged sentences

Schedule of intangible assets, net

June 30, 2024

Customer Relationships

Total Intangible Assets

Relationships

Intangible Assets

At the time of acquisition, the Company estimates

5 unchanged sentences

The Company’s amortization expense for acquired identifiable intangible assets with finite useful lives was $ 98,017 for the three

months ended June 30, 2024 and 2023.

Estimated amortization expense for acquired identifiable intangible assets for fiscal year 2024 and

the succeeding years is as follows:

months ended September 30, 2024 and 2023.

Estimated amortization expense for acquired identifiable intangible assets for fiscal year 2024

and the succeeding years is as follows:

Splash Beverage Group, Inc.

23 unchanged sentences

Gains or losses from these translation adjustments are included in the condensed consolidated statement of operations

and other comprehensive loss as foreign currency translation gains or losses.

and other comprehensive gain as foreign currency translation gains or losses.

Translation gains and losses that arise from the translation

of net assets from functional currency to the reporting currency, as well as exchange gains and losses on intercompany balances, are included

in foreign currency translation in the condensed consolidated statement of operations and comprehensive loss.

in foreign currency translation in the condensed consolidated statement of operations and comprehensive gain.

The Company incurred foreign

currency translation net gain of $ 182 and net loss of $ 15,774 for the three months ending June 30, 2024 and 2023, respectively and net

loss of $ 7,255 and $ 17,382 for the six months ending June 30, 2024 and 2023, respectively.

currency translation net gain of $ 85,074 and $ 29,406 for the three months ending September 30, 2024 and 2023, respectively and net gain

of $ 77,819 and $ 12,024 for the nine months ending September 30, 2024 and 2023, respectively.

Liquidity, Capital Resources and Going Concern Considerations

3 unchanged sentences

The Company historically has incurred significant losses and negative cash flows from operation

since inception and had net-loss of approximately $ 10 .0 million for six-month period ended June 30, 2024 and accumulated deficit of approximately

$142.1 million through June 30, 2024.

During the six-month period ended June 30, 2024, the Company’s net cash used in operating

activities totaled approximately $ 3.7 million.

Additionally, the Company’s current liabilities exceed its current assets, and it

has a working capital deficit.

since inception and had net-loss of approximately $ 14 .0 million for nine-month period ended September 30, 2024 and accumulated deficit

of approximately $146.8 million through September 30, 2024.

During the nine-month period ended September 30, 2024, the Company’s

net cash used in operating activities totaled approximately $ 6.4 million.

Additionally, the Company’s current liabilities exceed

its current assets, and it has a working capital deficit.

During the year ended December 31, 2023, the Company

7 unchanged sentences

The Company received approximately $ 7.9 million from

the issuance of debt for the six months ending June 30, 2024.

This event served to ensure liquidity of the business through June 30, 2024.

the issuance of debt for the nine months ending September 30, 2024.

This event served to ensure liquidity of the business through September

Management’s plans in regard to these matters

33 unchanged sentences

Schedule of notes payable

September 30,

Notes Payable and Convertible Notes Payable

5 unchanged sentences

The loan had an original maturity of October 2021 with principal and interest due at maturity.

The loan was extended to October 31, 2024.

In May 2021, the Company entered into a six-month loan with an individual in the amount of $ 50,000 .

The loan was extended to April 2025.

In May 2021, the Company entered into a six-month loan with two individuals totaling $ 60,000 .

The loan had an original maturity of October 2021 with principal and interest due at maturity.

The loan was extended to October 31, 2024.

The loan was extended to April 2025.

In August 2022, the Company entered into a 56-months auto loan in the amount of $ 45,420 .

2 unchanged sentences

The loans mature in June 2025 with principal and interest due at maturity with conversion price of $ 1.00 per share.

In February 2023, the Company entered into a

twelve-month loan with an entity in the amount of $ 2,000,000 .

The convertible note included the issuance of 1,500,000

shares of common stock.

The loan matures in February 2024 with conversion price of $ 0.85

per share and is non-interest bearing.

In February 2023, the Company entered into a twelve-month loan with an entity in the amount of $ 2,000,000 .

The convertible note included the issuance of 1,500,000 shares of common stock.

The loan matures in February 2024 with conversion price of $ 0.85 per share and is non-interest bearing.

The loan was extended to May, 2024.

3 unchanged sentences

The loans mature in November 2024 with principal and interest due at maturity with conversion price of $ 1.00 per share.

The loans were extended to May 2025.

In June 2023, the Company entered into various eighteen-month loans with individuals totaling in the amount of $ 350,000 .

4 unchanged sentences

The loan matures in July 2024 with principal and interest due at maturity with conversion price of $ 1.00 per share.

The loan was extended to September 2024.

The loan was fully converted in September 2024.

In July 2023, the Company entered into a twelve-month loan with an individual in the amount of $ 100,000 .

The note included 50 % warrant coverage.

The loan matures in January 2025 with principal and interest due at maturity with conversion price of $ 1.00 per share.

The loan originally matures in June 2024 with principal and interest due at maturity with conversion price of $ 1.00 per share.

The loan was extended to January 2025.

In August 2023, the Company entered into a twelve-month loan with an individual in the amount of $ 300,000 .

The convertible note included the issuance of 150,000 shares of common stocks.

The loan matures in August 2024 with principal and interest due at maturity with conversion price of $ 0.85 per share and is non-interest bearing.

The loan matures in August 2024 with principal due at maturity with conversion price of $ 0.85 per share and is non-interest bearing.

Partial of the note was converted into common stock.

In October 2023, the Company entered into a three-month loan with an individual in the amount of $ 500,000 .

The loan matures in January 2024 with principal and interest due at maturity.

The loan was extended to September 2024.

In October 2023, the Company entered into a loan with an

individual in the amount of $ 196,725

The loan matures in March 2024.

The loan was extended to February 2025.

In October 2023, the Company entered into a loan with an individual in the amount of $ 196,725 The loan matures in March 2024.

Note is guaranteed by a related party.

5 unchanged sentences

The loan matures in April 2025 with principal and interest due at maturity with conversion price of $ 1.00 per share.

In December 2023, we entered into a 2.5-month loan with an individual in the amount of $ 450,000 .

The loan had a maturity of March 2024 with principal and interest due at maturity.

The loan was extended to September 2024.

In January 2024, we entered into a loan in the amount of $ 500,000 .

Partial principal and 1 st year interest were converted in September 2024.

In December 2023, the Company entered into a 2.5-month loan with an individual in the amount of $ 450,000 .

The loan had a maturity of March 2024 with principal and interest due at maturity.

It was paid off with a new loan in April 2024

In January 2024, we entered into a 18-month loan with an individual in the amount of $ 250,000 .

The loan was extended to February 2025.

In January 2024, the Company entered into a 18-month loan with an individual in the amount of $ 250,000 .

The note included 100 % warrant coverage.

The loan had a maturity of July 2025 with principal and interest due at maturity with conversion price of $ 0.50 per share.

In February 2024, we entered into a 18-month loan with an individual in the amount of $ 150,000 .

In February 2024, the Company entered into a 18-month loan with an individual in the amount of $ 150,000 .

The note included 100 % warrant coverage.

The loan had a maturity of August 2025 with principal and interest due at maturity with conversion price of $ 0.40 per share.

In February 2024, we entered into a 6-month loan with an individual in the amount of $ 315,000 .

In February 2024, the Company entered into a 6-month loan with an individual in the amount of $ 315,000 .

The note included 60 % warrant coverage.

The loan had a maturity of August 2024 with principal and interest due at maturity with conversion price of $ 0.38 per share.

This was extended to July 2025.

In February 2024, the Company entered into a 18-month loan with an entity in the amount of $ 250,000 .

1 unchanged sentence

The loan matures in August 2025 with principal and interest due at maturity with conversion price of $ 0.46 per share

In April 2024, we entered into a commercial financing

agreement in the amount of $ 815,000

will be paid weekly until the loan is paid in full.

In April 2024, the Company entered into a commercial financing agreement in the amount of $ 815,000 and will be paid weekly until the loan is paid in full.

In May 2024, the Company entered into an eighteen-month loan with individuals totaling in the amount of $ 1,850,000 .

1 unchanged sentence

The loan matures in November 2026 with principal and interest due at maturity with conversion price of $ 0.40 per share

In June 2024, we entered into a merchant cash advance

agreement in the amount of $ 325,000 to

be paid weekly until the loan is paid in full.

In June 2024, we entered into a revenue purchase agreement in the amount of $ 250,000 .

In June 2024, the Company entered into a merchant cash advance agreement in the amount of $ 325,000 to be paid weekly until the loan is paid in full.

This loan was paid off in September

In June 2024, the Company entered into a revenue purchase agreement in the amount of $ 250,000 .

4 % of revenue will be paid weekly until the loan is paid in full.

In July 2024, the Company entered into a revenue purchase agreement in the amount of $ 178,250 .

The loan matures in April 2025.

10 equal P&I payments starting in July 2024

In July 2024, the Company entered into a revenue purchase agreement in the amount of $ 120,750 .

The loan matures in May 30, 2025.

1 st P&I payment will be starting Jan 2025.

In August 2024, the Company entered into a 5-year loan

with individuals totaling in the amount of $ 500,000 .

The loan matures in September 2029 with principal and interest due at maturity with conversion price of $ 0.35

In August 2024, the Company entered into a eighteen-month

loan with individuals totaling in the amount of $ 1,500,000 .

The loan matures in February 2026 with principal and interest due at maturity with conversion price of $ 0.38

In September 2024, we entered into a merchant cash advance agreement in the amount of $ 325,000 to be paid weekly until the loan is paid in full.

In September 2024, the Company entered into an agreement with individuals totaling in the amount of $ 590,000

Total notes payable

Less notes discount

( 3,977,802 )

( 2,876,387 )

Less current portion

( 8,974,659 )

( 7,748,518 )

Long-term notes payable

4 unchanged sentences

Interest expense on notes payable was $ 877,772 and

$ 170,078 for the three months ended June 30, 2024 and 2023, respectively.

$ 207,087 for the three months ended September 30, 2024 and 2023, respectively.

Interest expense on notes payable was $ 2,026,523 and $ 546,849

for the six months ended June 30, 2024 and 2023, respectively.

for the nine months ended September 30, 2024 and 2023, respectively.

The Company recognized approximately $ 830,200 and approximately $ 1,125,409

of interest expense attributable to the amortization of the debt discount during the three months ended June 30, 2024 and 2023, respectively.

of interest expense attributable to the amortization of the debt discount during the three months ended September 30, 2024 and 2023, respectively.

The Company recognized approximately $ 2,730,857 and approximately $ 2,500,065 of interest expense attributable to the amortization of the

debt discount during the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, and December 31, 2023, the balance of the unamortized

debt discount during the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, and December 31, 2023, the balance of the unamortized

debt discount was $ 3,534,793 and $ 1,944,348 respectively.

12 unchanged sentences

Interest expense on related party notes payable was

$ 6,000 and $ 0 for the three months ended June 30, 2024 and 2023, respectively.

$ 6,000 and $ 0 for the three months ended September 30, 2024 and 2023, respectively.

Interest expense on related party notes payable was

and $ 0 for the six months ended June 30, 2024 and 2023, respectively.

The Company’s effective interest rate was 25.32 % for the six

months ended June 30, 2024.

As of June 30, 2024, the Company’s convertible

$ 11,030 and $ 0 for the nine months ended September 30, 2024 and 2023, respectively.

The Company’s effective interest rate was 26.71 %

for the nine months ended September 30, 2024.

As of September 30, 2024, the Company’s convertible

note balances are convertible into 21,620,579 shares of common stock

7 unchanged sentences

on net sales, as defined, and are required to make minimum monthly payments of $ 55,000 in 2024 and 2023.

The Company has accrued guaranteed minimum royalty

payments of $ 165,000 for the three months ended June 30, 2024 and there were no unpaid royalties at June 30, 2023.

The royalty payment

is included in general and administrative expenses in the condensed consolidated statement of operations and comprehensive loss.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

The Company has accrued guaranteed minimum

royalty payments of $ 0

for the three months ended September 30, 2024 and $ 55,000

for nine months ended in September 2024.

The royalty expense $ 55,000

is included in general and administrative expenses.

The Company has reserved $ 330,000

that is included in legal reserve in the condensed consolidated statement of operations and comprehensive loss.

In connection with the Copa di Vino APA, the Company

8 unchanged sentences

The asset is being amortized over a 10 -year useful life.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

Note 5– Stockholders’ Equity

14 unchanged sentences

to an aggregate of 4,625,000 additional shares of Common Stock (the “Warrants”) at an exercise price of $0.85 per Warrant

During the six-months ended June 30, 2024, the Company

granted share-based awards to certain consultants totaling 530,000 shares of common stock at a weighted average price of $0.41, 200,000

shares for extension of note, 7,611,511 shares on conversion of convertible instruments, 925,000 shares on debt discount and 290,000 shares

for non-cash compensation.

During the nine-months ended September 30, 2024, the

Company granted share-based awards to certain consultants totaling 1,639,190 shares of common stock at a weighted average price of $0.24,

200,000 shares for extension of note, 15,212,629 shares on conversion of convertible instruments, 925,000 shares on debt discount and

290,000 shares for non-cash compensation.

A convertible promissory note was issued to shareholder

on April 15, 2024 to cover advance $ 200,000 at 12 % with conversion price of $0.35 per share.

on April 15, 2024 for $ 200,000 at 12 % with conversion price of $0.35 per share.

The note included 571,429 share of warrant

6 unchanged sentences

The total number of shares that may be issued under the 2020 plan

was 1,685,825 at the time the 2020 plan was adopted as of June 30, 2024.

was 1,685,825 at the time the 2020 plan was adopted as of September 30, 2024.

The 2020 Plan has an “evergreen” feature,

3 unchanged sentences

under the 2020 plan increased by 2,054,276 and 2,984,276 shares, respectively.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

In October 2023, the shareholders voted to increase

3 unchanged sentences

Schedule of stock option activity

June 30, 2024

June 30, 2023

September 30, 2024

September 30, 2023

Number of Options

5 unchanged sentences

Balance – June 30,

Exercisable – June 30,

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

Balance – September 30,

Exercisable – September 30,

Note 5– Stockholders’ Equity, continued

During the three-month period ended June 30, 2024

and June 30, 2023, the company granted 3,855,000 and 3,376,008 options to employees and directors at weighted average strike price of

$ 0.33 under the 2020 plan.

During the nine-month period ended September 30, 2024

and September 30, 2023, the company granted 4,485,000 and 3,441,008 options to employees and directors at weighted average strike price

of $ 0.33 under the 2020 plan.

1,200,000 shares were granted to CEO, Robert Nistico, 750,000 shares to CMO, William Meissner, 750,000 shares

to CFO, Julius Ivancsits and 475,000 shares to the Board director, Bill Caple.

to CFO, Julius Ivancsits, 600,000 to the Board director, John Paglia and 475,000 shares to Board director, Bill Caple.

The fair value of stock options granted in the period

9 unchanged sentences

(the “Lender”).

The Note Payable with a balance of $ 268,192 at June 30, 2024 and $ 672,695 at June 30,2023.

The Note Payable with a balance of $ 232,776 at September 30, 2024 and $ 371,693 at December 31, 2023.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

There were related party advances from our chief executive

officer in the amount of approximately $ 0.4 million outstanding as of June 30, 2024 and approximately $ 0.4 million as of December 31,

A shareholder note payable outstanding in the amount of $ 0.2 million as of June 30, 2024.

officer in the amount of approximately $ 0.4 million outstanding as of September 30, 2024 and approximately $ 0.4 million as of December

A shareholder note payable outstanding in the amount of $ 0.2 million as of September 30, 2024.

Note 7 – Investment in Salt Tequila USA,

5 unchanged sentences

Note 8 – Leases

The Company has various operating lease agreements

primarily related to real estate and office.

The Company has various operating lease agreements primarily related to real

estate and office space.

The Company’s real estate leases represent a majority of the lease liability.

payments are mainly fixed.

Any variable lease payments, including utilities, and common area maintenance are expensed during the period

Variable lease costs were immaterial for the quarter ended June 30, 2024 and 2023.

A majority of the real estate leases include

options to extend the lease.

Management reviews all options to extend at the inception of the lease and account for these options when

they are reasonably certain of being exercised.

Lease payments are mainly

Any variable lease payments, including utilities, and common area maintenance are expensed during the period incurred.

lease costs were immaterial for the quarter ended September 30, 2024 and 2023.

A majority of the real estate leases include options to

extend the lease.

Management reviews all options to extend at the inception of the lease and account for these options when they are reasonably

certain of being exercised.

Operating lease expense is recognized on a straight-line

1 unchanged sentence

comprehensive loss.

Operating lease cost was $ 163,590 and $ 182,658 during the six-month period ended June 30, 2024 and 2023, respectively.

Operating lease cost was $ 277,564 and $ 273,631 during the nine-month period ended September 30, 2024 and 2023, respectively.

The following table sets for the maturities of our

operating lease liabilities and reconciles the respective undiscounted payments to the operating lease liabilities in the consolidated

balance sheet at June 30, 2024

balance sheet at September 30, 2024

Schedule of operating lease liabilities

1 unchanged sentence

Operating Lease

2024 (Six months remaining)

2024 (three months remaining)

Amount representing imputed interest

6 unchanged sentences

The table below presents lease-related terms and discount

rates at June 30, 2024:

rates at September 30, 2024:

Schedule of lease related terms and discount

12 unchanged sentences

Schedule of segment

Three Months Ended June 30

Six Months Ended June 30

Three Months Ended September 30

Nine Months Ended September 30

Splash Beverage Group

2 unchanged sentences

Splash Beverage Group

( 1,468,564 )

Total contribution after marketing

8 unchanged sentences

$ ( 11,999,801 )

June 30, 2024

September 30, 2024

December 31, 2023

8 unchanged sentences

business, financial condition or results of operations.

On June 5, 2024, the Company received notification from the NYSE American

LLC (“NYSE American”) indicating that it is not in compliance with the NYSE American’s continued listing standards

under Section 1003(a)(iii) of the NYSE American Company Guide (the “Company Guide”), requiring a listed company

to have stockholders’ equity of $ 6 million or more if the listed company has reported losses from continuing operations and/or net

losses in its five most recent fiscal years.

The Company is now subject to the procedures and requirements of Section 1009 of the Company

If the Company is not in compliance with the continued listing standards by April 6, 2025 or if the Company does not make progress

consistent with the Plan during the plan period, the NYSE American may commence delisting procedures.

Note 11 – Subsequent Events

In July 2024, the Company entered into an approximately

$ 0.3 million merchant cash advance agreement for a period of 13 weeks until the loan is paid in full.

In July 2024, a $ 0.4 million convertible note with

accrued interest matured in June 2024 was converted into common stocks at $ 0.25 per share.

The Company granted 358,334 shares in July in exchange

for services under the 2020 plan.

The maturity dates of the related party notes were

extended to October 2024 with 4% interest.

At the Special Meeting of Stockholders held on July

31, 2024, The Company’s Stockholders approved the issuance of shares of our common stock, representing more than 20% of our Common

Stock outstanding upon the conversion of Convertible Notes and Warrants issued to certain accredited investors on May 1, 2024, respectively

convertible into up to 4,625,000 shares of Common Stock and exercisable into 4,625,000 shares of Common Stock, which amount would be in

excess of 19.99% of the issued and outstanding shares of Common Stock, in accordance with section 713 of the NYSE American LLC Company

On June 5, 2024 , the Company

received notification from the NYSE American LLC (“NYSE American”) indicating that it is not in compliance with the NYSE

American’s continued listing standards under Section 1003(a)(iii) of the NYSE American Company Guide (the “Company Guide”),

requiring a listed company to have stockholders’ equity of $ 6 million or more if the listed company has reported losses from

continuing operations and/or net losses in its five most recent fiscal years.

The Company is now subject to the procedures and requirements

of Section 1009 of the Company Guide.

If the Company is not in compliance with the continued listing standards by April 6, 2025 or if

the Company does not make progress consistent with the Plan during the plan period, the NYSE American may commence delisting procedures.

Note 11 – Subsequent

The notes that matured in October 2024 was extended

by the note holders to April 2025 .

The note that matured in August 2024 was partially

converted to common stock in September and the remaining was converted in October 2024.

In November 2024, the company entered into a merchant

cash advance agreement in the amount of $ 273,600 to be paid weekly until the loan is paid in full.

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