MDWerks, Inc. 10-Q

Item 1. Financial Statements MDWERKS, INC. Condensed Balance Sheets (unaudited) March 31, December 31, 2023 2022 ASSETS Cash $ 41,228 $ 23,715 TOTAL ASSETS $ 41,228 $ 23,715 LIABILITIES AND STOCKHOLDERS’ DEFICIT CURRENT LIABILITIES Accounts payable and accrued expenses $ 17,175 $ 34,478 Advances payable 94,873 104,204 TOTAL LIABILITIES 112,048 138,682 STOCKHOLDERS’ DEFICIT Preferred stock, par value $ 0.001 ; 10,000,000 shares authorized of which 8,957,500 are issued and outstanding 8,958 8,958 Common stock, par value $ 0.001 ; 300,000,000 shares authorized of which 122,260,208 shares are issued and outstanding at 12/31/22 and 123,401,506 shares are issued and outstanding at 3/31/23 123,401 122,260 Additional paid in capital 285,988 201,531 Accumulated deficit ( 489,167 ) ( 447,716 ) TOTAL STOCKHOLDERS’ DEFICIT $ ( 70,820 ) $ ( 114,967 ) TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 41,228 $ 23,715 The accompanying notes are an integral part of these unaudited condensed financial statements. 4 MDWERKS, INC, Condensed Statements of Operations (unaudited) 2023 2022 For the three month period ended March 31, 2023 2022 Operating expenses General and administrative $ 41,451 $ 5,494 Total operating expenses 41,451 5,494 Net loss from operations ( 41,451 ) ( 5,494 ) Other income Interest - - Total other income - - Net loss $ ( 41,451 ) $ ( 5,494 ) Net loss per share Basic $ ( 0.00 ) $ ( 0.00 ) Diluted $ ( 0.00 ) $ ( 0.00 ) WEIGHTED AVERAGE NUMBER OF SHARES Basic 122,712,732 18,010,208 Diluted 122,712,732 18,010,208 The accompanying notes are an integral part of these unaudited condensed financial statements . 5 MDWERKS, INC. CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT (Unaudited) For the three months ended March 31, 2023 and twelve months ended December 31, 2022 Shares Amount Shares Amount Capital Deficit Total Preferred Stock Common Stock Additional Paid-in Accumulated Shares Amount Shares Amount Capital Deficit Total Balance January 1, 2022 10,000,000 $ 10,000 18,010,208 $ 18,010 $ 35,195 $ ( 294,003 ) $ ( 230,798 ) Net loss - - - - - ( 153,713 ) ( 153,713 ) Conversion of preferred stock ( 1,042,500 ) ( 1,042 ) 104,250,000 104,250 ( 103,208 ) - - Contributed Capital 30,100 30,100 Forgiveness of debt - - 239,444 - 239,444 Balance December 31, 2022 8,957,500 $ 8,958 122,260,208 $ 122,260 $ 201,531 $ ( 447,716 ) $ ( 114,967 ) Balance January 1, 2023 8,957,500 $ 8,958 122,260,208 $ 122,260 $ 201,531 $ ( 447,716 ) $ ( 114,967 ) Balance, value 8,957,500 $ 8,958 122,260,208 $ 122,260 $ 201,531 $ ( 447,716 ) $ ( 114,967 ) Common shares sold for cash 1,141,298 $ 1,141 $ 84,457 85,598 Net income - - - - - ( 41,451 ) ( 41,451 ) Net income (loss) - - - - - ( 41,451 ) ( 41,451 ) Balance March 31, 2023 8,957,500 $ 8,958 123,401,506 $ 123,401 $ 285,988 $ ( 489,167 ) $ ( 70,820 ) Balance , value 8,957,500 $ 8,958 123,401,506 $ 123,401 $ 285,988 $ ( 489,167 ) $ ( 70,820 ) The accompanying notes are an integral part of these unaudited condensed financial statements . 6 MDWERKS, INC, Condensed Statements of Cash Flows (unaudited) 2023 2022 For the three month period ended March 31, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ ( 41,451 ) $ ( 5,494 ) Adjustments to reconcile net loss to net cash used in operating activities: Gain on forgiveness of debt - - Changes in operating assets and liabilities: Accounts payable ( 17,303 ) 4,494 NET CASH USED IN OPERATING ACTIVITIES ( 58,754 ) ( 1,000 ) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of equipment - - NET CASH USED IN INVESTING ACTIVITIES - - CASH FLOWS FROM FINANCING ACTIVITIES Repayment of advances payable ( 9,331 ) Proceeds from subscription agreements 85,598 1,000 NET CASH PROVIDED BY FINANCING ACTIVITIES 76,267 1,000 NET CHANGE IN CASH 17,513 - CASH - BEGINNING OF YEAR 23,715 - CASH - END OF PERIOD 41,228 - Supplemental disclosures of cash flow information: Cash paid for interest $ - $ - Cash paid for taxes $ - $ - Supplemental disclosure of non-cash investing and financing activities Forgiveness of debt as capital contribution $ - $ - Conversion of preferred stock $ - $ - The accompanying notes are an integral part of these unaudited condensed financial statements. 7 MDWERKS, INC. Notes to Unaudited Condensed Financial Statements For the Three Months Ended March 31, 2023 NOTE 1 – ORGANIZATION AND DESCRIPTION OF THE BUSINESS MDWerks, Inc. (the “Company”), a Delaware corporation, is focused on effecting a “reverse merger,” capital exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more unrelated businesses (a “Business Combination”) that would benefit from the Company’s public reporting status. The Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination. As of the date of this report, the Company has not yet commenced any operations. All activity through the date of this report relates to preserving cash, making settlements with creditors, attempting to raise capital, and continuing the Company’s public reporting. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation – The financial statements present the financial position, results of operations and cash flows of the Company in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). All dollar amounts are rounded to the nearest thousand dollars. Cash and Cash Equivalents – The Company considers all highly liquid instruments with original maturities of three months or less when acquired, to be cash equivalents. The Company had no cash equivalents at March 31, 2023. Income Taxes – The Company complies with the accounting and reporting requirements of US GAAP in accounting for income taxes. The Company uses the asset and liability approach to financial reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in future taxable or deductible amounts and are based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred income tax assets to the amount expected to be realized. The Company also complies with US GAAP in accounting for uncertain tax positions. A tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable based on its technical merits. Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as of March 31, 2023. However, the Company’s conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulations and interpretations thereof. The Company recognizes interest and penalties related to unrecognized tax benefits in interest expense and other expenses, respectively. No interest expense or penalties have been recognized as of March 31, 2023. Earnings Per Share –Earnings per share is computed based on the weighted average number of common shares outstanding. Basic income (loss) per share excludes dilution and is computed by dividing income (loss) available to common stockholders by the weighted average common shares outstanding for the year. Diluted income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. For the three months ended March 31, 2023, there were no options, warrants or derivative securities outstanding. Therefore, basic and diluted loss per share were the same for the three months ended March 31, 2023. Use of Estimates and Assumptions - The preparation of financial statements in accordance with US GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results can, and in many cases will, differ from those estimates. 8 Fair Value of Financial Instruments - The Company measures its financial and non-financial assets and liabilities, as well as makes related disclosures, in accordance with the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Codification (“ASC”) No. 820, Fair Value Measurement (“ASC 820”), which provides guidance with respect to valuation techniques to be utilized in the determination of fair value of assets and liabilities. Approaches include, (i) the market approach (comparable market prices), (ii) the income approach (present value of future income or cash flow), and (iii) the cost approach (cost to replace the service capacity of an asset or replacement cost). ASC 820 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one more significant inputs or significant value drivers are unobservable. The carrying values of the Company’s accounts payable and accrued liabilities, advances payable, and convertible notes payable, approximate their fair value due to their short-term nature. Convertible notes payable - The Company accounts for convertible notes payable in accordance with ASC No. 815, Derivatives and Hedging, since the conversion feature is not indexed to the Company’s stock and cannot be classified in equity. The Company allocates the proceeds received from convertible notes payable between the liability component and conversion feature component. The conversion feature that is considered embedded derivative liabilities has been recorded at their fair value as its fair value can be separated from the convertible note and its conversion is independent of the underlying note value. The Company has also recorded the resulting discount on debt related to the conversion feature and is amortizing the discount using the effective interest rate method over the life of the debt instruments. Going Concern – These financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. As reflected in the accompanying unaudited financial statements, the Company had a net loss of $ 41,451 and an accumulated deficit of $ 489,167 as of and for the three months ended March 31, 2023. Although management believes that it will be able to successfully execute a Business Combination, which includes third party financing and the raising of capital to meet the Company’s future liquidity needs, there can be no assurances in this regard. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Recently Issued Accounting Pronouncements - From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the effect of recently issued standards that are not yet effective will not have a material effect on its consolidated financial position or results of operations upon adoption. In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, “ Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hed g ing – Contracts in Entity’s Own Equity (Subtopic 815 – 40) ” (“ ASU 2020-06 ”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in US GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2020-06 on its financial statements. NOTE 3 – ACCOUNTS PAYABLE The Company had accounts payable balance of $ 17,175 as of March 31, 2023 and $ 34,478 as of December 31, 2022 and related to amounts owed for various professional services and public company related expenses. 9 NOTE 4 - ADVANCES PAYABLE The Company had advances aggregating $ 104,204 as of December 31, 2022 and $ 94,873 as of March 31, 2023 from a non-related third party in order to cover legal, accounting and other various public company related operating expenses. The Company repaid $ 9,331 of these advances during the three months ended March 31, 2023. The advances are unsecured, non-interest bearing and are due on demand. NOTE 5 – CAPITAL STOCK Common Stock The Company is authorized to issue 300,000,000 shares of common stock, $ 0.001 par value. At March 31, 2023, there were 123,401,506 shares of common stock issued and outstanding. During the three month period ended March 31, 2023, 1,141,298 shares were sold and issued for $ 85,598 Preferred Stock The Company is authorized to issue 10,000,000 shares of preferred stock, $ 0.001 par value, with such designations, rights and preferences as may be determined from time to time by the Board of Directors, of which 10,000,000 shares are designated Series A Convertible Preferred Stock. Each share of Series A Convertible Preferred Stock is convertible into 100 shares of common stock, and each share of Series A Preferred Stock has the same number of common share votes prior to conversion as it would if fully converted to be used in voting on any company matter requiring a vote of shareholders. At March 31, 2023, there were 8,957,500 shares issued and outstanding. NOTE 6 – CONTINGENCY In the ordinary course of business, the Company may become a party to lawsuits involving various matters. The impact and outcome of litigation, if any, is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business. The Company believes the ultimate resolution of any such current proceeding will not have a material adverse effect on our continued financial position, results of operations or cash flows. NOTE 7 – SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet and up to June 8, 2023, the date that the financial statements were issued. In the subsequent period, the Company issued 1,333,333 shares for $ 100,000 . Management has determined that there are no other items requiring disclosure or adjustment. 10