What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-11 compared with 2022-11-08 · 307 added, 271 removed, 439 unchanged (57% of the section changed)

FINANCIAL STATEMENTS

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

14 unchanged sentences

We disclaim any obligation to update forward-looking

Factors that may cause or contribute actual results to differ from these

forward-looking statements include, but are not limited to, for example:

Factors that may cause or contribute actual results

to differ from these forward-looking statements include, but are not limited to, for example:

adverse economic conditions;

14 unchanged sentences

Consolidated Balance Sheets

September 30,

Current assets:

1 unchanged sentence

Accounts receivable

Prepaid expenses

Other receivables

1 unchanged sentence

Property and equipment, net

Equipment not in service

Right of use assets

5 unchanged sentences

Notes payable

Convertible notes

Derivative liability

Total current liabilities

Lease liability - long term

Notes payable long term

Convertible notes -long term

Lease liability- long term

Total liabilities

Commitments and contingencies

Stockholders' Equity:

Stockholders' Deficit:

Preferred stock, Series A $ 0.001

shares authorized;

zero 0 shares shares issued and outstanding

zero 0 shares issued and outstanding

Preferred stock, Series B $ 0.001

shares authorized;

zero 0 shares shares issued and outstanding

zero 0 shares issued and outstanding

Preferred stock, Series C, $ 0.001 par value 1,000,000 shares authorized;

145,080 shares and 240,080 shares issued and outstanding as of September 30, 2022 and December 31 2021, respectively

145,080 shares and 145,080 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

Common stock, $ 0.001 par value, 300,000,000 shares authorized;

185,520,582 and 180,913,582 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

210,220,534 and 189,216,582 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

Additional paid-in capital

4 unchanged sentences

Non-controlling interest

Total stockholders' equity

Total liabilities and equity

The accompanying notes are an integral part of the consolidated financial

Total stockholders' (deficit)

Total liabilities and (deficit)

The accompanying notes are an integral part of these unaudited consolidated

financial statements.

Kisses From Italy Inc.

Consolidated Statements of Operations

September 30,

Total Revenue

Cost of goods sold

1 unchanged sentence

Depreciation and amortization

Stock based compensation-related party

Stock based compensation

1 unchanged sentence

Consulting and professional fees

General and administrative

General and administrative expenses

Total operating expenses

Income (loss) from operations

( 3,473,897 )

Loss from operations

Other income (expense)

Interest income (expense), net

Interest expense, net

Loss the extinguishment of debt

Change in the fair value of the derivative liability

Total other income (expense)

Income (loss) before income taxes

( 3,821,644 )

Total other expense

Loss before income taxes

Provision for income taxes (benefit)

( 3,821,644 )

net income (loss) attributable to non-controlling interests

Loss attributable to non-controlling interests

Net loss attributable to Kisses From Italy, Inc.

1 unchanged sentence

$ ( 150,205 )

$ ( 838,739 )

$ ( 3,831,930 )

Basic earnings (loss) per common share

Diluted earnings (loss) per common share

Basic loss per common share

Fully diluted loss per common share

Weighted -weighted average number of shares outstanding:

The accompanying notes are an integral part of the consolidated financial

Kisses from Italy

The accompanying notes are an integral part of these unaudited consolidated

financial statements.

Kisses From Italy Inc.

Statements of Changes in Stockholders' Equity

Preferred Stock

Non-controlling

2 unchanged sentences

$ ( 13,859,006 )

$ ( 172,350 )

Non-controlling interest, net

income (loss)

Issuance of common stock in

a private placement

Issuance of common stock for

Balance, March 31, 2021

$ ( 9,338,755 )

$ ( 148,029 )

Net income (loss)

( 3,205,314 )

Non-controlling interest, net

income (loss)

Issuance of common stock for

Issuance of stock options for

Issuance of common stock in

private placement

Issuance of Series C Preferred

Conversion of Series C Preferred

to Common stock

Balance, June 30, 2021

$ ( 12,544,069 )

Stock based compensation

Issuance of Series C Preferred Stock

Conversion of Series C Preferred to Common stock

Non-controlling interest, net income (loss)

Net income (loss)

Non-controlling interest, net

income (loss)

Issuance of common stock for

Issuance of stock options for

Issuance of common stock in

private placement

Issuance of Series C Preferred

Conversion of Series C Preferred

to Common stock

Balance, September 30,

Balance, March 31, 2022

$ ( 14,009,211 )

7 unchanged sentences

$ ( 14,706,391 )

Non-controlling interest, net income (loss)

Stock based compensation

Issuance of Series C Preferred Stock

Conversion of Series C Preferred to common stock

Balance, March 31, 2022

$ ( 610,962 )

$ ( 137,629 )

Non-controlling interest, net income (loss)

Non-controlling interest, net

income (loss)

Stock based compensation for services

Common stock issued for accounts payable

Issuance of common stock as financing commitment shares

Issuance of warrants in connection with debt

Balance, June 30, 2022

$ ( 14,415,850 )

$ ( 351,812 )

Non-controlling interest, net income (loss)

Issuance of warrants in connection with debt

Balance, September 30, 2022

Conversion of convertible notes and accrued interest into common stock

March 31, 2023

$ ( 15,656,889 )

$ ( 761,732 )

The accompanying notes are an integral part of the consolidated financial

Kisses From Italy Inc.

The accompanying notes are an integral part of these unaudited consolidated

financial statements.

From Italy Inc.

Consolidated Statements of Cash Flows

September 30,

Cash flows from operating activities of continuing operations:

1 unchanged sentence

$ ( 153,094 )

Adjustments to reconcile net loss to cash used in operating activities:

Depreciation and amortization

Loss on the extinguishment of debt

Stock-based compensation for services

1 unchanged sentence

Issuance of financing commitment shares

Issuance of financing commitment warrants

Beneficial conversion feature of Preferred C Stock

Changes in operating assets and liabilities:

Prepaid expenses

Accounts receivable

4 unchanged sentences

Cash flows from investing activities:

Purchase of fixed assets

Net cash used in financing activities

Cash flows from financing activities:

Proceeds from convertible notes

Proceeds from notes payable

Proceeds from the sale of common stock

Proceeds from the sale of preferred stock

Net cash provided by financing activities

Net increase in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

3 unchanged sentences

Cash paid for income taxes

The accompanying notes are an integral part of the consolidated financial

KISSES FROM ITALY INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

Supplemental disclosure of non-cash investing and financing activities

Conversion of convertible notes and accrued interest into common stock

Reduction of accounts payable with common stock

The accompanying notes are an integral part of these unaudited consolidated

financial statements.

KISSES FROM ITALY

NOTES TO UNAUDITED CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION

7 unchanged sentences

Wyndham Hotel properties in the Pompano Beach, Florida area, were then opened within the following ten months.

All locations, which are

All locations, which were

in leased facilities, were fully operational by April 2016.

5 unchanged sentences

2020 due to the Covid-19 pandemic, briefly re-opened and has not re-opened as of the date of this Report.

Such location was intended to

serve as the distribution center for products for European locations, as well as to be used as a training facility for European franchises.

Such a location was intended

to serve as the distribution center for future products for European locations, as well as to be used as a training facility for European

However, this initiative has been severely curtailed due to the onset and lingering impact of Covid-19 in Europe.

1 unchanged sentence

its first two franchise locations in Chino, California and Montreal, Canada, respectively.

Due to the onset of Covid-19 the Company has

Since the onset of Covid-19 the Company has

temporarily waived any franchise fees at both locations so that the franchisees could establish operations at each of those locations.

28 unchanged sentences

in consolidation.

Management’s Representation of Interim

Financial Statements

Management’s Representation of Interim Financial Statements

The accompanying unaudited consolidated financial

10 unchanged sentences

These consolidated financial statements should be read in conjunction with the audited consolidated financial

statements at and as of December 31, 2021, filed as part of the Company’s Annual Report on Form 10-K with the SEC on April 15, 2022.

Going Concern

The accompanying unaudited consolidated financial

statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and

the satisfaction of liabilities in the normal course of business for the twelve months following the date of these financial statements.

On a consolidated basis, the Company has incurred significant operating losses since inception.

Because the Company does not expect that existing

operational cash flow will be sufficient to fund presently anticipated operations, this raises substantial doubt about the Company’s

ability to continue as a going concern.

Therefore, the Company will need to raise additional funds and is currently exploring alternative

sources of financing.

Historically, the Company has raised capital through private placements of equity and convertible debt as interim

measures to finance working capital needs and may continue its efforts to raise additional capital through the sale of common stock or

other securities and obtain short-term loans.

The Company will be required to continue to do so until its consolidated operations become

Also, the Company has, in the past, paid for consulting services with its common stock to maximize working capital, and intends

to continue this practice where feasible.

statements at and as of December 31, 2022, filed as part of the Company’s Annual Report on Form 10-K with the SEC on March 31, 2023.

Use of Estimates

3 unchanged sentences

The most significant estimates relate to revenue recognition, valuation of accounts receivable and the allowance for doubtful

accounts, inventories, purchase price allocation of acquired businesses, impairment of long-lived assets and goodwill, valuation of financial

instruments, income taxes, and contingencies.

The Company bases its estimates on historical experience, known or expected trends and various

other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements.

The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are

not readily apparent from other sources.

Actual results could differ from these estimates.

accounts, inventories, valuation of financial instruments, income taxes, and contingencies.

The Company bases its estimates on historical

experience, known or expected trends and various other assumptions that are believed to be reasonable given the quality of information

available as of the date of these financial statements.

The results of these assumptions provide the basis for making estimates about

the carrying amounts of assets and liabilities that are not readily apparent from other sources.

Actual results could differ from these

Accounts Receivable and Allowance for Doubtful

Accounts receivables are recorded at the net value

of face amount less any allowance for doubtful accounts.

The allowance for doubtful accounts is the Company’s best estimate of the

amount of probable credit losses in its existing accounts receivable.

The Company reviews the allowance for doubtful accounts on

a regular basis, and all past due balances are reviewed individually for collectability.

of the face amount less any allowance for doubtful accounts.

The allowance for doubtful accounts is the Company’s best estimate

of the amount of probable credit losses in its existing accounts receivable.

The Company reviews the allowance for doubtful accounts

on a regular basis, and all past due balances are reviewed individually for collectability.

Account balances are charged against the allowance

4 unchanged sentences

These receivables are related to the sale of our private label branded products sold in retail and grocery stores in Canada.

As of September 30, 2022, and December 31,

2021, our trade receivables amounted to $ 17,429

respectively, with an allowance for doubtful accounts of $- 0 -

As of March 31, 2023, and December 31, 2022, our

trade receivables amounted to $ 13,672

and $ 13,470 respectively,

with an allowance for doubtful accounts of $- 0 -

for both periods.

Other Receivables

Other receivables are comprised of three components,

a receivable from a franchisee, and a receivable from the government for Employee Retention Credits (“ERC”) and Value Added

Tax at the Company’s Bari location in Italy.

The purpose of the ERC is to encourage employers to

keep employees on the payroll, even if they are not working during the covered period due to the effects of the coronavirus outbreak.

The updated ERC provides a refundable credit of up to $5,000 for each full-time equivalent employee a company retained from March 13,

2020, to December 31, 2020, and up to $14,000 for each retained employee from January 1, 2021, to June 30, 2021.

The Company qualifies

as an employer if it was ordered to fully or partially shut down or if the Company’s gross receipts fell below 50% for the same

quarter in 2019 (for 2020) and below 80% (for 2021).

As of September 30, 2022 and December 31, 2021 the Company had ERC credits receivable

of $ 27,190 and $ 41,717 credits receivable, respectively.

Other receivables are comprised of two components,

a receivable from a franchisee, and a receivable from the government for Employee Retention Credits (“ERC”).

The purpose of the ERC is to encourage employers

to keep employees on the payroll, even if they are not working during the covered period due to the effects of the coronavirus

The updated ERC provides a refundable credit of up to $5,000 for each full-time equivalent employee a company retained

from March 13, 2020, to December 31, 2020, and up to $14,000 for each retained employee from January 1, 2021, to June 30, 2021.

Company qualifies as an employer if it was ordered to fully or partially shut down or if the Company’s gross receipts fell

below 50% for the same quarter in 2019 (for 2020) and below 80% (for 2021).

As of March 31, 2023 and December 31, 2022 the Company

had ERC credits receivable of $ 27,190

in ERC credits receivable, respectively.

Valued Added Tax (“VAT”)

5 unchanged sentences

VAT tax ranges between 4% and 10% for food products and alcohol.

As of September 30, 2022 and December 31, 2021, respectively, the Company

As of March 31, 2023 and December 31, 2022, respectively, the Company

had a VAT net receivable from its Bari location amounting to $- 0 - and $- 0 - respectively.

2 unchanged sentences

in California, the Company extended a $22,000 demand loan at a 1% interest rate to the franchisee.

As of September 30, 2022 and December

As of March 31, 2023 and December 31,

2022 the balance on the franchisee receivable was $ 22,000 and $ 22,000 , respectively.

16 unchanged sentences

Equity transactions are recorded at the historical

rate when the transaction occurred.

rate when the transaction occurs.

Revenue Recognition

2 unchanged sentences

and food and beverage

product sold which is presented net of discounts, coupons, employee meals and complimentary meals.

products sold which is presented net of discounts, coupons, employee meals and complimentary meals.

Revenue is recognized using the five

step approach required under the guidelines of ASC 606:

Identify the contract with the client,

Identify the performance obligations in the contract,

Determine the transaction price,

Allocate the transaction price to performance obligations

in the contract

Recognize revenues when or as the Company satisfies

a performance obligation

At the corporate owned restaurants all five steps

of revenue recognition occur almost simultaneously.

The customer orders food from a menu, it is prepared, delivered to the customer who

then pays for the food order at the cash register.

Our restaurant business represented approximately 90-95% of our revenue for the year

ended December 31, 2022 and three months ended March 31, 2023.

For our branded retail products goods sold in Canada,

the Company receives a detailed purchase order from grocery store retailers that specifies the goods ordered, their price, payment terms

and the required delivery date.

Once the delivery of items on the purchase order is made to the client and title passes to the retailer,

the Company has met its performance obligation and recognizes revenue.

Non-controlling interest

7 unchanged sentences

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

On September 30, 2022 and December 31, 2021,

the Company cash equivalents totaled $ 435,076 and $ 139,485 , respectively.

On March 31, 2023 and December 31, 2022, the

Company’s cash equivalents totaled $ 34,255 and $ 324,493 , respectively.

Property and equipment

3 unchanged sentences

The carrying amount and accumulated depreciation of assets sold or retired are removed from the accounts in the year of disposal and any

resulting gain or loss is included in results of operations.

resulting gain or loss is included in the results of operations.

The estimated useful lives of property and equipment are as follows:

6 unchanged sentences

Accounting Standards Board (“FASB”) ASC 740, “Accounting for Income Taxes”.

Under FASB ASC 740, deferred

tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement

carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using

enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or

Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the

period that includes the enactment date.

FASB ASC 740-10-05, “Accounting for Uncertainty in Income Taxes” prescribes

a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or

expected to be taken in a tax return.

For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained

upon examination by taxing authorities.

Under FASB ASC 740, deferred tax assets

and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts

of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax

rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes

the enactment date.

FASB ASC 740-10-05,“Accounting for Uncertainty in Income Taxes” prescribes a recognition threshold

and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in

a tax return.

For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing

The amount recognized is measured as the largest amount

22 unchanged sentences

settlement of the derivative instrument could be required within twelve months of the balance sheet date.

As of September 30, 2022 and

December 31, 2021 the balance of the derivative liability was $ 109,411 and $- 0 -, respectively.

As of March 31, 2023 and December

31, 2022, the balance of the derivative liability was $ 139,740 and $ 73,398 , respectively.

Stock-based Compensation

24 unchanged sentences

deferring the adoption of ASC 842 to January 1, 2022.

In the first quarter of fiscal 2022, we adopted ASU

The most significant impact of adoption was the recognition of right of use operating lease assets and right of use operating

lease liabilities of approximately $ 562,000 each, respectively.

We expect the impact of adoption to be immaterial to our consolidated

statements of operations and consolidated statements of cash flows on an ongoing basis.

Leases, for additional information

regarding additional lease disclosures.

In the first quarter of fiscal 2022, we adopted

ASU 2016-02 related solely to operating leases at our store locations.

The most significant impact of adoption was the recognition

of right of use operating lease assets and right of use operating lease liabilities of approximately $ 562,000

each, respectively.

Inventory is comprised of wholesale food inventory

at our retail operations in Canada and alcoholic beverages at our Bari location in Italy.

at our retail operations.

The value of the food at our US locations is very minimal at any one time and is charged to cost of sales as

soon as it arrives at the store.

Our US locations do not have liquor licenses.

During the three months ended March 31, 2022 we wrote off $1,951 alcoholic beverage inventory since the Bari location had been closed

since the onset of Covid in March 2020.

The balance of inventory at September 30, 2022 and December 31, 2021 was $ 12,809 and $ 5,270 ,

respectively.

During the three months ended March 31, 2022 we wrote off

$1,951 alcoholic beverage inventory since the Bari location had been closed since the onset of Covid in March 2020.

The balance of inventory

on March 31, 2023 and December 31, 2022 was $ 15,500 and $ 14,359 , respectively.

Net Loss per Share

5 unchanged sentences

are determined by dividing net income by the weighted average number of shares of common stock and dilutive common share equivalents outstanding.

Due to the Company’s net losses for the three months ended March 31, 2023 and March 31, 2022, all of its outstanding stock options,

warrants, and shares issuable if convertible notes or Preferred C shares was converted to common stock;

are all considered anti-dilutive.

The number of these anti-dilutive equivalents was not calculated and are excluded from the calculation of net loss per share.

Recent Accounting Pronouncements

24 unchanged sentences

NOTE 3 – GOING CONCERN AND LIQUIDITY

As of September 30, 2022 the Company had cash on hand

of $ 435,076 and an accumulated deficit of $ 14,697,745 .

As of March 31, 2023 the Company had cash on

hand of $ 34,255 ,

negative working capital of $ 603,107

and an accumulated deficit of $ 15,656,889 .

Management has concluded that these financial statements

1 unchanged sentence

in the normal course of business.

It is the Company’s current intention to raise

debt and/or equity financing to fund ongoing operating expenses.

There is no assurance that financing, whether debt or equity, will be

available to the Company, satisfactorily completed or on terms favorable to the Company.

Any issuance of equity securities, if accomplished,

could cause substantial dilution to existing stockholders and any debt financing may contain covenants limiting certain corporate actions.

Any failure by the Company to successfully raise additional financing would have a material adverse effect on its business, including

the possible inability to continue operations.

It is the Company’s current intention to raise debt and/or equity financing to fund ongoing operating

There is no assurance that financing, whether debt or equity, will be available to the Company, satisfactorily completed or

on terms favorable to the Company.

Any issuance of equity securities, if accomplished, could cause substantial dilution to existing stockholders

and any debt financing may contain covenants limiting certain corporate actions.

Any failure by the Company to successfully raise additional

financing would have a material adverse effect on its business, including the possible inability to continue operations.

NOTE 4 – PROPERTY AND EQUIPMENT

As of September 30, 2022 and December 31,

2021, the Company had $ 4,740 and

As of March 31, 2023 and December 31, 2022, the

Company had $ 3,160

in property and equipment, all located at its Bari location in Italy.

As of September 30, 2022 all property and equipment and

As of December 31, 2022 all property and equipment and

leaseholds at its US locations had been fully depreciated.

1 unchanged sentence

The following table sets forth the components of the

Company’s accrued liabilities on September 30, 2022 and December 31, 2021.

Company’s accrued liabilities on March 31, 2023 and December 31, 2022.

Schedule of accrued and other liabilities

September 30,

Sales tax payable

2 unchanged sentences

Total accrued liabilities

The Company is in arrears on its payroll tax payments

as of September 30, 2022.

As of September 30, 2022 and December 31, 2021 “payroll tax liabilities” was approximately $ 38,557

and $ 55,202 in interest and penalties, respectively.

The Company is in arrears on its payroll tax

payments as of March 31, 2023.

As of March 31, 2023 the “payroll tax liabilities” were comprised of approximately $ 49,455

in tax due, and $ 46,997

in interest and penalties, respectively.

NOTE 6 – PROMISSORY NOTES PAYABLE

As of September 30, 2022 and December 31,

2021, the balance of notes payable was $ 262,171

and $- 0 -, respectively.

The September 30, 2022 balance is

As of March 31, 2023 and December 31, 2022, the

balance of notes payable was $ 262,171 and

$ 262,171 respectively.

The 2022 balance is

comprised of two unsecured 8 %

3 unchanged sentences

NOTE 7 – CONVERTIBLE NOTES AND DERIVATIVE

As of September 30, 2022 and December 31, 2021, the

outstanding principal balance of convertible notes was $ 560,000 and $ 10,000 , respectively.

The balance of the derivative liability was

$ 109,411 and $- 0 -, respectively.

On April 11, 2022, the Company entered into a securities

purchase agreement, dated as of April 6, 2022, (the “Talos Purchase Agreement”) with Talos Victory Fund, LLC, a Delaware limited

liability company (“Talos”), pursuant to which the Company issued to Talos a promissory note in the principal amount of $ 165,000

As of March 31, 2023 and December 31, 2022, the

outstanding principal balance of convertible notes was $ 314,400 and

$ 488,400 respectively.

balance of the derivative liability was $ 139,740

respectively.

On April 11, 2022, the Company entered into a

securities purchase agreement, dated as of April 6, 2022, (the “Talos Purchase Agreement”) with Talos Victory Fund, LLC,

a Delaware limited liability company (“Talos”), pursuant to which the Company issued to Talos a promissory note in the

principal amount of $ 165,000

(the “Talos Note”).

The Company received $ 148,500 gross proceeds from Talos due to the original issue discount on the Talos

In connection with the execution and delivery of the Talos Purchase Agreement and the issuance of the Talos Note, the Company issued

to Talos 500,000 commitment shares and a warrant to purchase an additional 1,650,000 shares of common stock of the Company.

On April 13, 2022, the Company entered into a securities

purchase agreement, dated as of April 11, 2022, (the “Blue Lake Purchase Agreement”) with Blue Lake Partners, LLC, a Delaware

limited liability company (“Blue Lake”), pursuant to which the Company issued to Blue Lake a promissory note in the principal

amount of $ 165,000 .00 (the “Blue Lake Note”).

The Company received $ 148,500 gross proceeds from Blue Lake due to the original

issue discount on the Blue Lake Note.

In connection with the execution and delivery of the Blue Lake Purchase Agreement and the issuance

of the Blue Lake Note, the Company issued to Blue Lake 500,000 commitment shares and a warrant to purchase an additional 1,650,000 shares

of common stock of the Company.

On May 13, 2022, the Company entered into a securities

purchase agreement, dated as of May 11, 2022, (the “Fourth Man Purchase Agreement”) with Fourth Man, LLC (“Fourth Man”),

pursuant to which the Company issued to Fourth Man a promissory note in the principal amount of $ 150,000 (the “Fourth Man Note”).

The Company received $ 135,000 gross proceeds from Fourth Man due to the original issue discount on the Fourth Man Note.

In connection

with the execution and delivery of the Fourth Man Purchase Agreement and the issuance of the Fourth Man Note, the Company issued to Fourth

Man, 607,000 commitment shares and a warrant to purchase an additional 1,500,000 shares of common stock of the Company.

The Company received $ 148,500

gross proceeds from Talos due to the original issue discount on the Talos Note.

In connection with the execution and delivery of the

Talos Purchase Agreement and the issuance of the Talos Note, the Company issued to Talos 500,000 commitment

shares and a warrant to purchase an additional 1,650,000 shares

of common stock of the Company at an exercise price of $ 0.10 .

On April 13, 2022, the Company entered into a

securities purchase agreement, dated as of April 11, 2022, (the “Blue Lake Purchase Agreement”) with Blue Lake Partners,

LLC, a Delaware limited liability company (“Blue Lake”), pursuant to which the Company issued to Blue Lake a promissory

note in the principal amount of $ 165,000

(the “Blue Lake Note”).

The Company received $ 148,500 gross

proceeds from Blue Lake due to the original issue discount on the Blue Lake Note.

In connection with the execution and delivery of

the Blue Lake Purchase Agreement and the issuance of the Blue Lake Note, the Company issued to Blue Lake 500,000 commitment

shares and a warrant to purchase an additional 1,650,000

shares of common stock of the Company at an exercise price of $ 0.10 .

On May 13, 2022, the Company entered into a

securities purchase agreement, dated as of May 11, 2022, (the “Fourth Man Purchase Agreement”) with Fourth Man, LLC

(“Fourth Man”), pursuant to which the Company issued to Fourth Man a promissory note in the principal amount of $ 150,000

(the “Fourth Man Note”).

The Company received $ 135,000

gross proceeds from Fourth Man due to the original issue discount on the Fourth Man Note.

In connection with the execution and

delivery of the Fourth Man Purchase Agreement and the issuance of the Fourth Man Note, the Company issued to Fourth Man, 607,000

commitment shares and a warrant to purchase an additional 1,500,000

shares of common stock of the Company.

Each of the notes bear interest at 12 % and has a fixed

price conversion to common stock at $ 0.025 per share.

Using the Black Scholes model, the Company

recording a financing expense of $ 97,453

for the total of 4,800,000

warrants issued on the Talos Note, Blue Lake Note and the Fourth Man Note.

During the three months ended September 30,

2022, the Company granted an underwriter 162,000

warrants exercisable for five years at an exercise price of $ 0.11 ,

warrants exercisable for five 5

years at $ 0.12

Using the Black Scholes model, the Company recording a financing expense of $ 3,214

for these warrants.

As a result of the above transactions, the

Company has recorded $ 100,167

in total financing fees in 2022 on these warrants issued to the noteholders and the underwriter.

During the three months ended March 31, 2023 the Talos,

Fourth Man and Blue Lake converted $ 172,000 in note principal and $ 37,800 in accrued interest into 8,552,000 common shares.

of these conversion the company recorded a loss of $ 168,060 on the conversion of this debt.

On July 26, 2022 the Company entered into a

convertible note agreement with a maturity date of July 26, 2023 with Diagonal Lending.

Under the terms of the note agreement Diagonal

had the right to convert its note at a discount of 35 % to the Company’s lowest trading price in the 10 days prior to conversion.

convertible note agreement at 9 %

interest with a maturity date of July

26, 2023 with Diagonal Lending.

Under the terms of the note agreement Diagonal had the right to convert its note at a

discount of 35%

to the Company’s lowest trading price in the 10

days prior to conversion.

On January 23, 2023 the Company paid off this $ 70,000

convertible note along with accrued interest of $ 3,863 and a $ 20,000 prepayment penalty for a total payment of $ 93,863 .

On February 13,

2023 the Company entered into a new $ 70,000 note with a 180 maturity on the same terms as the previous $70,000 note.

The Company considered the current FASB guidance of

7 unchanged sentences

own stock and characterized the fair value of the conversion features as derivative liabilities upon issuance.

The fair value

of the Company’s derivative liability of $ 109,411 as of September 30, 2022 was estimated using the Black-Scholes-Merton Option Pricing

model with a volatility of $ 188.1 %, exercise price of $ 0.0101 , using a one-year T-bill rate of $ 4.05 %.

the three months ended September 30, 2022, the Company granted an underwriter 162,000

warrants exercisable for five 5

years at an exercise price of $ 0.11 ,

warrants exercisable for five 5 years at $ 0.12 per share.

Using the Black Scholes model, the Company recording a financing expense

of $ 3,214 for these warrants.

As a result of the above transactions, the Company

has recorded $ 176,251 in total financing fees in 2022 on these warrants issued to the noteholders and the underwriter.

The fair value of the Company’s derivative

liability of $ 139,740 as of March 31, 2023 was estimated using the Black-Scholes-Merton Option Pricing model with a volatility of

246.8%, exercise price of $0.0084, using a one-year T-bill rate of $4.73%.

NOTE 8 – STOCKHOLDERS EQUITY

The Company has authorized 300,000,000 shares of common

On September 30, 2022 and December 31, 2021, there were 185,520,582 and 180,913,582 shares of common stock issued and outstanding,

respectively, with a $ 0.001 par value per share.

During the nine months ended September 30, 2022, the

The Company has authorized 300,000,000

shares of common stock.

On March 31, 2023 and December 31, 2022, there were 210,220,534 and 189,216,582 shares of common stock

issued and outstanding, respectively, with a $ 0.001 par value per share.

During the three months ended March 31, 2023, the

Company issued the following shares of stock:

3,000,000 shares upon the conversion of Series C Stock

1,607,000 shares for financing commitments valued at $ 97,453

6,000,000 shares for services

valued at $ 206,700

6,000,000 shares for financing commitments

valued at $ 198,000

8,552,000 shares upon the conversion of convertible notes and accrued

interest valued at $ 381,860

451,952 shares to pay off an accounts payable balance of $ 15,050

During the year ended December 31, 2022, the Company

issued the following shares of common stock:

14,000,000 shares to its executive officers valued at $ 1,987,200

4,408,334 shares to service providers valued at $ 538,568

1,750,000 shares to accredited investors for gross proceeds of $ 175,000

5,922,903 shares upon the conversion of Series C Stock

These shares were valued based on the trading price

of the Company’s stock on the date of approval of the respective share issuances by the Company’s Board of Directors times

the number of shares issued.

issued the following shares of stock:

3,000,000 shares upon the

conversion of Series C Stock

1,607,000 shares for financing commitments

valued at $ 97,453

3,696,000 shares upon the conversion of convertible notes valued at

Preferred Stock

17 unchanged sentences

There were no shares of Series A Stock outstanding

as of September 30, 2022 and December 31, 2021.

as of March 31, 2023 and December 31, 2022

Series B Stock

4 unchanged sentences

the Board and not the price paid for the shares).

The holders of the Series B Stock shall not be entitled to voting rights except as otherwise

The holders of Series B Stock shall not be entitled to voting rights except as otherwise

provided by applicable law.

7 unchanged sentences

and applicable securities laws.

There were no

shares of Series B Stock outstanding as of September 30, 2022.

There were no shares of Series B Stock outstanding

as of March 31, 2023 or December 31, 2022.

Series C Stock

16 unchanged sentences

securities laws.

As of September 30, 2022 and December 31, 2021

there were 145,080

shares of Series C Stock outstanding, respectively, which were purchased at a price of $ 1.00 per

As of March 31, 2023 and December 31, 2022 there were 145,080 and 145,080 shares

of Series C Stock outstanding, respectively, which were purchased at a price of $ 1.00 per share.

Stock Purchase Warrants

Stock purchase warrants are accounted for as equity

in accordance with ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s

Own Stock, Distinguishing Liabilities from Equity .

The following table reflects all outstanding and exercisable

warrants on March 31, 2023 and December 31, 2022.

All warrants are exercisable for a period of three to five years from the date of issuance:

Schedule of warrant activity

Number of Warrants Outstanding

Weighted Average Exercise Price

Weighted Average Remaining Contractual Life (Yrs.)

Balance January 1, 2021

Warrants issued

Warrants exercised

Warrants forfeited

December 31, 2021

Warrants issued

Warrants exercised

Warrants forfeited

Balance December 31, 2022

Warrants issued

Warrants exercised

Warrants forfeited

Balance March 31, 2023

As of March 31, 2023 the outstanding stock purchase

warrants had an aggregate intrinsic value of $0.

Stock Options

As of March 31, 2023 there were 16,000,000

vested 10 year stock options outstanding.

options had a strike price of $0.07, 5,333,333

had a strike price of $0.25 and 5,333,333

had a strike price of $0.50 and a remaining life of 8.25

All options were immediately expensed during the second quarter of 2022 and the Company recorded an expense of $ 1,239,823

related to these options.

There have been no stock option issuances since June 30, 2021.

As of March 31, 2023, these options had no

intrinsic value.

NOTE 9 – LEASES

As of December 31, 2021 the Company had three operating

As of March 31, 2023 the Company had two operating

The Company leases these spaces based upon the following schedules:

8 unchanged sentences

Both parties have agreed no rent payments will be submitted, until new terms are agreed upon.

During the three months ended March 31, 2022, the

Company adopted ASC 842, and based on the present value of the lease payments for the remaining average lease term of the Company’s

existing leases noted above, the Company recognized $ 562,030 in noncurrent ROU assets, $ 88,469 in current lease liabilities and $ 473,561 in

noncurrent lease liabilities from operating leases.

For the nine months ended September 30, 2022 and

During the three months ended March 31, 2023,

the Company adopted ASC 842, and based on the present value of the lease payments for the remaining average lease term of the

Company’s existing leases noted above, the Company recognized $ 562,030

in noncurrent ROU assets, $ 88,469

in current lease liabilities and $ 473,561

in noncurrent lease liabilities from operating leases.

For the three months ended March 31, 2023 and

2022, the Company recorded rent expenses related to lease obligations of $ 32,357

and $ 99,646 respectively.

and $ 32,888 ,

respectively.

Rent expenses related to lease obligations in operating expenses in the Company’s statement of operations.

NOTE 10 – SUBSEQUENT EVENTS

Subsequent to March 31, 2023, the company issued

7,000,000 common shares ot executive officers, 1,501,502 common shares as financing fees, and 6,503,890 shares to reduce convertible debt.

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