What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-25 compared with 2024-06-28 · 623 added, 371 removed, 420 unchanged (70% of the section changed)

12 unchanged sentences

on the Consolidated Financial Statements

We have audited the accompanying consolidated balance

sheets of MDwerks, Inc.

(the Company) as of December 31, 2023 and 2022, and the related consolidated statements of operations, changes

in stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2023 and the related

notes (collectively referred to as the “financial statements”).

In our opinion, the consolidated financial statements referred

to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results

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

principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements

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

As discussed in Note 2 to the consolidated financial statements,

the Company suffered a net loss from operations and has an accumulated deficit, which raises substantial doubt about its ability to continue

as a going concern.

Management’s plans regarding those matters are also described in Note 2.

The consolidated financial statements

do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

have audited the accompanying consolidated balance sheets of MDWerks,

(the Company) as of December 31, 2024 and 2023, and the related consolidated statements of operations, stockholders’ equity

(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 referred to above 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.

The accompanying financial statements have been prepared assuming that

the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company suffered a net loss from

operations and has an accumulated deficit, which raises substantial doubt about its ability to continue as a going concern.

plans regarding those matters are discussed in Note 2.

The consolidated financial statements do not include any adjustments that might

result from the outcome of this uncertainty.

These consolidated financial statements are the responsibility

of the Company’s management.

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

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 audits to obtain reasonable assurance about whether the consolidated

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.

Those standards require that we plan and perform the audits 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.

Our audits included performing procedures to assess

the risks of material misstatement of the consolidated 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

consolidated financial statements.

Our audits also included evaluating the accounting principles used and the significant estimates made

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

We believe our audits provide

a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below

is a matter arising from the current period audits of the consolidated 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 consolidated

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

The communication of the

critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are

not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or

disclosures to which it relates.

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 statements.

Our audits also included

evaluating the accounting principles used and the significant estimates made by management, as well as evaluating the overall presentation

of the financial statements.

We believe our audits provides a reasonable basis for our opinion.

The critical audit matter communicated below is a

matter arising from the current period audits 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.

The communication of critical audit matters does not alter in any way our opinion on the

financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on

the critical audit matter or on the accounts or disclosures to which it relates.

Going Concern

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loss from operations and has an accumulated deficit for the year ended December 31, 2024.

To evaluate the appropriateness of the going concern,

we examined and evaluated the financial information along with management’s plans to mitigate the going concern and management’s

disclosure on going concern.

To evaluate the appropriateness of the going concern, we examined and evaluated

the financial information along with management’s plans to mitigate the going concern and management’s disclosure on going

have served as the Company’s auditor since 2022

The Woodlands,

June 28, 2024

MDwerks, Inc.

Woodlands, TX

March 25, 2025

Balance Sheets

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Total Current Assets

Fixed assets, net of accumulated depreciation of $ 10,787 and $ 0 , respectively

Intangible assets, net of accumulated amortization of $ 4,339

and $ 0 , respectively

Fixed assets, net

Intangible assets, net

Right-of-use asset

Other non-current assets

Liabilities and Stockholders’ Equity (Deficit)

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Accounts payable and accrued expenses

Advances payable

Accounts payable related party

Notes payable

Notes payable – related party

Notes payable

Deferred revenue

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Preferred stock, par value $ 0.001 ;

10,000,000 shares authorized, of which 8,957,500 were issued and outstanding

10,000,000 shares authorized, of which 0 and 8,957,500 were issued and outstanding

Common stock, par value $ 0.001 ;

300,000,000 shares authorized, of which 198,724,868

and 122,260,208 shares were issued and outstanding

at December 31, 2023 and 2022, respectively

300,000,000 shares authorized, of which 204,744,872 and 198,724,868 shares were issued and outstanding at December 31, 2024 and 2023, respectively

Additional paid in capital

Subscription payable

Accumulated deficit

( 2,360,505 )

Total Stockholders’ Equity (Deficit)

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accompanying notes are an integral part of these consolidated financial statements.

MDwerks, Inc.

Statements of Operations

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Salaries and wages

Depreciation expense

Depreciation and amortization expense

Loss on sale of assets, related party

Total operating expenses

Operating loss

( 1,502,664 )

Other income (expense):

Gain on sale of assets

Gain (loss) on sale of assets

Loss on impairment of note receivable

Interest expense, net

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accompanying notes are an integral part of these consolidated financial statements.

MDwerks, Inc.

Statement of Changes in Stockholders’ Equity (Deficit)

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$ ( 114,967 )

Conversion of preferred stock-related party

( 1,042,500 )

Contributed capital

Forgiveness of debt-related party

Common Shares sold for cash

Common Shares issued for acquisitions

Imputed interest

Balance December 31, 2023

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$ ( 739,388 )

Balance December 31, 2022

$ ( 447,716 )

Common shares sold for cash

Common shares to be issued for royalty agreement

Redemption of Preferred Stock

( 8,957,500 )

Stock based compensation

( 1,621,117 )

Common Shares sold for cash

Common Shares issued for acquisitions

Imputed interest

Balance December 31, 2024

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accompanying notes are an integral part of these consolidated financial statements.

MDwerks, Inc.

Statements of Cash Flows

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Depreciation and amortization

Gain on sale of assets

Gain/Loss on sale of assets

Loss on impairment of note receivable

Stock-based compensation

Common stock to be issued for royalty agreement

Imputed interest

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Accounts payable

Accounts payable related party

Deferred revenue

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Purchase of property and equipment

NET CASH PROVIDED BY INVESTING ACTIVITIES

NET CASH (USED IN)/PROVIDED BY INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from advances payable

Contributed capital

Proceeds from related party notes payable

Redemption of preferred stock

Repayment of notes payable

Repayment of notes payable related party

Repayment of advances payable

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Supplemental disclosure of non-cash investing and financing activities

Forgiveness of debt as capital contribution

Property and equipment acquired with notes payable

Note receivable issued for asset sale

Common stock issued for acquisitions

Conversion of preferred stock

accompanying notes are an integral part of these consolidated financial statements.

MDwerks, Inc.

to Consolidated Financial Statements

1 unchanged sentence

1 - ORGANIZATION AND DESCRIPTION OF THE BUSINESS

(the “Company”), a Delaware corporation, was focused on effecting a “reverse merger,” capital exchange, asset

acquisition, stock purchase, reorganization or other similar business combination with one or more unrelated businesses (the “Business

(the “Company”), a Delaware corporation, was focused on effecting a “reverse merger,” capital exchange,

asset acquisition, stock purchase, reorganization or other similar business combination with one or more unrelated businesses (the “Business

Combination”) that would benefit from the Company’s public reporting status.

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and manufacturing.

As discussed below, on January 25, 2023, the “Company entered into an Exchange Agreement (the “Exchange

Agreement”), dated as of January 19, 2023, by and between the Company, RFS and Keith A.

Mort as the sole member of RFS (the “Member”).

Pursuant to the terms of the Exchange Agreement, the Company agreed to acquire from Mr.

As discussed below, on January 25, 2023, the Company entered into an Exchange Agreement (the “Exchange Agreement”),

dated as of January 19, 2023, by and between the Company, RFS and Keith A.

Mort as the sole member of RFS.

Pursuant to the terms of the

Exchange Agreement, the Company agreed to acquire from Mr.

Mort, and Mr.

Mort agreed to sell to the Company,

100 % of the equity interests and membership interests of RFS, in exchange for the issuance by the Company to Mr.

Mort of 7,500,000 shares

of the Company’s common stock (the “Exchange”).

Whereby, immediately following the closing of the Exchange, RFS became

a wholly owned subsidiary of the Company.

The Exchange closed on December 27, 2023.

Mort agreed to sell to the Company, 100 % of the equity interests

and membership interests of RFS, in exchange for the issuance by the Company to Mr.

Mort of 7,500,000 shares of the Company’s common

stock (the “Exchange”).

Immediately following the closing of the Exchange on December 27, 2023, RFS became a wholly owned

subsidiary of the Company.

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Two Trees Beverage

Company, Prost Beverage Co, Radio Aged Beer LLC, RF Kettle Company LLC, Two Trees, Drilling, RAS LLC, (collectively referred to as “Two

Trees”) and RF Specialties, LLC.

Company, Prost Beverage Co, Radio Aged Beer LLC, RF Kettle Company LLC, Two Trees, Distilling, RAS LLC, (collectively referred to as

“Two Trees”) and RF Specialties, LLC.

All intercompany accounts, transactions and balances have been eliminated in consolidation.

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These amounts are recognized as an expense in the period the related service or benefit is received.

Receivable and the Allowances for Credit losses - Accounts receivable are recorded in the period when the right to

receive payment or other consideration becomes unconditional.

Accounts receivable are recorded at the invoiced amount and do not

earn interest.

The Company maintains an allowance for credit losses based upon the best estimate of probable credit losses in

existing accounts receivable.

The Company determines the allowance based upon individual accounts when information indicates the

customers may have an inability to meet their financial obligations, as well as historical collection and write-off experience.

Company had an accounts receivable balance of $ 106,734

net of $ 54,967

allowance for doubtful accounts as of December 31, 2023.

The Company had bad debt expense of $ 20,420 and $ 0 as of December 31, 2023

and 2022, respectively.

The company had an accounts receivable balance of $ 0

Receivable and the Allowances for Credit losses - Accounts receivable are recorded in the period when the right to receive payment

or other consideration becomes unconditional.

Accounts receivable are recorded at the invoiced amount and do not earn interest.

maintains an allowance for credit losses based upon the best estimate of probable credit losses in existing accounts receivable.

Company determines the allowance based upon individual accounts when information indicates the customers may have an inability to meet

their financial obligations, as well as historical collection and write-off experience.

The Company had an accounts receivable balance

of $ 109,142 net of $ 26,710 allowance for doubtful accounts as of December 31, 2024.

The Company had bad debt expense of $ 39,176 and $ 20,420

as of December 31, 2024 and 2023, respectively.

The company had an accounts receivable balance of $ 106,734 as of December 31, 2023.

of December 31, 2024, the Company had two customers that accounted for 50 % and 10 % of total accounts receivable.

As of December 31, 2023,

As of and for the year ended December 31, 2023, the Company had three customers that accounted

for 25 %, 17 %,

of total accounts receivable.

the Company had three customers that accounted for 25 %, 17 %, and 10 % of total accounts receivable.

value of financial instruments - The Company measures its financial and non-financial assets and liabilities, as well as makes related

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their fair value due to their short-term nature.

notes payable - The Company accounts for convertible notes payable in accordance with the FASB Accounting Standards Codification

815, Derivatives and Hedging, since the conversion feature is not indexed to the Company’s stock and can’t be classified

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.

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.

The Company has no assets or liabilities measured at fair value on a recurring basis.

The Company’s goodwill and intangible asses were valued using level 3 inputs at the time of acquisition.

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.

in the accompanying financial statements, the Company had loss of $ 291,672 and an accumulated deficit of $ 739,388 as of and for the year

ended December 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

in the accompanying financial statements, the Company had a net loss of $ 1,621,117 and an accumulated deficit of $ 2,360,505 as of and

for the year ended December 31, 2024.

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.

Recognition - Net sales from Two Trees include liquor and related products, less excise taxes and customer programs and

Sales from RF Specialties, LLC will include product and services related to sustainable Radio Frequency applications to a

wide range of industries including structural engineering, food & beverage, and manufacturing.

The Company recognizes revenue by

applying the following steps in accordance with Accounting Standards Codification (“ASC”) Topic 606 – Revenue from

Contracts with Customers:

Recognition - Net sales from Two Trees include liquor and related products, less excise taxes and customer programs and incentives.

Sales from RF Specialties, LLC will include product and services related to sustainable Radio Frequency applications to a wide range

of industries including structural engineering, food & beverage, and manufacturing.

The Company recognizes revenue by applying the

following steps in accordance with Accounting Standards Codification (“ASC”) Topic 606 – Revenue from Contracts with

(1) identify the contract with a customer;

(2) identify the performance obligations in the contract;

(3) determine

the transaction price;

(3) determine the transaction

(4) allocate the transaction price to each performance obligation in the contract;

and (5) recognize revenue when

each performance obligation is satisfied.

and (5) recognize revenue when each performance

obligation is satisfied.

Company recognizes sales when merchandise is shipped from a warehouse directly to wholesale customers (except in the case of a consignment

For consignment sales, which include sales to the Oregon Liquor Control Commission, the Company recognizes sales upon the consignee’s

shipment to the customer.

Postage and handling charges billed to customers are also recognized as sales upon shipment of the related

Shipping terms are generally FOB shipping point, and title passes to the customer at the time and place of shipment or purchase

by customers at a retail location.

For consignment sales, title passes to the consignee concurrent with the consignee’s shipment

to the customer.

The customer has no cancellation privileges after shipment or upon purchase at retail locations, other than customary

rights of return.

For service revenue within the Company’s radio frequency applications, the Company recognizes revenue as the

services are provided to the customer.

The Company’s contracts typically have a single performance obligation, and do not contain

a significant financing component.

For consignment sales, , the Company recognizes sales upon the consignee’s shipment to the customer.

Postage and handling

charges billed to customers are also recognized as sales upon shipment of the related merchandise.

Shipping terms are generally FOB shipping

point, and title passes to the customer at the time and place of shipment or purchase by customers at a retail location.

For consignment

sales, title passes to the consignee concurrent with the consignee’s shipment to the customer.

The customer has no cancellation

privileges after shipment or upon purchase at retail locations, other than customary rights of return.

For service revenue within the

Company’s radio frequency applications, the Company recognizes revenue as the services are provided to the customer.

The Company’s

contracts typically have a single performance obligation, and do not contain a significant financing component.

Company recognizes deferred revenue for performance obligations not yet satisfied, primarily related to liquor sales not yet shipped.

As of December 31, 2024, the Company had $ 52,779 in unsatisfied performance obligations that it expects to satisfy over the next 12 months.

the year ended December 31, 2023, the Company’s revenue consisted solely of liquor sales.

For the year ended December 31, 2023, the Company

had one customer who accounted for 26 % of total revenue.

As of December 31, 2024, the Company had $ 226,066 in unsatisfied performance obligations that it expects to satisfy over the next 12

the year ended December 31, 2024, the Company’s revenue consisted of liquor sales resulting from the acquisition of Two Trees and

labor costs related to the product and service income resulting from the acquisition of RF Specialties.

the year ended December 31, 2024, the Company had one customer who accounted for 25 % of total revenue.

- Inventories primarily consist of bulk and bottled liquor and raw materials and are stated at the lower of cost or market.

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with ASC 350 “Intangibles - Goodwill and Other”.

Intangible assets that have finite lives are amortized using the straight-line method

over their estimated useful lives of three to fifteen years.

Intangible assets that have finite lives are amortized using the straight-line

method over their estimated useful lives of three to fifteen years .

- Goodwill represents the excess of acquisition cost over the fair value of the net tangible and intangible assets acquired.

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by comparing the estimated fair value of a reporting unit with its respective carrying value to determine the amount of impairment, if

The Company has determined that it has one reporting unit.

The Company has determined that it has two reporting units.

During the years ended December 31, 2024, and 2023, no impairment expense

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basis over the estimated useful lives of the assets.

Furniture and fixture assets are depreciated over seven years, vehicles are depreciated

Furniture and fixture assets are depreciated over five years , vehicles are depreciated

over five years , and computer and equipment are depreciated over three years .

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Depreciation is recorded using the straight-line method over the estimated useful lives of the assets as follows:

OF PROPERTY AND EQUIPMENT

SCHEDULE OF PROPERTY AND EQUIPMENT

Machinery and equipment

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31, 2024, and 2023, respectively.

Issued Accounting Pronouncements - From time to time, new accounting pronouncements are issued by the Financial Accounting Standard

Board (“ 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 financial position or results of operations upon adoption.

Reporting - Financial Accounting Standard Board (“FASB”) ASC Topic 280, “ Segment Reporting ,” requires

annual and interim reporting for an enterprise’s operating segments and related disclosures about its products, services, geographic

areas and major customers.

An operating segment is defined as a component of an enterprise that engages in business activities from which

it may earn revenues and expenses, and about which separate financial information is regularly evaluated by the chief operating decision

maker in deciding how to allocate resources.

information is prepared on the same basis that our CEO, who is our Chief Operating Decision Maker (“CODM”), manages our segments,

evaluates financial results, and makes key operating decisions.

The Company has two reportable operating segments, 1) RF Specialties,

which derives its revenue from developing sustainable radio frequency (RF) applications, and 2) Two Tress Distilling, which derives its

revenue from the sale of liquor beverages.

The CODM uses net income from operations to evaluate and make key operating decisions.

Reclassifications

– Certain prior period amounts have been reclassified to conform to current period presentation.

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 financial position or results of

operations upon adoption.

November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures , which amends the existing segment

reporting guidance (ASC Topic 280) to improve reportable segment disclosure requirements, primarily through enhanced disclosures about

significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss,

an amount for other segment items by reportable segment and a description of its composition, the title and position of the CODM and

an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how

to allocate resources.

The amendments in this update were effective for fiscal years beginning after December 15, 2023, and interim periods

within fiscal years beginning after December 15, 2024.

Company adopted this standard on a retrospective basis within our annual report for the year ended December 31, 2024, which resulted

in additional disclosures in our segment financial information footnote, primarily related to significant segment expenses that are regularly

provided to the CODM and included within our reported measure of segment profit or loss.

Refer to note 14 for these additional disclosures.

November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE) , requiring additional disclosure

of the nature of expenses included in the income statement.

The new standard requires disclosures about specific types of expenses included

in the expense captions presented on the face of the income statement as well as disclosures about selling expenses.

The amendments in

this update are effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after

December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of our pending adoption of this standard

on its consolidated financial statements.

3 - INVENTORY

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finished goods inventory is held in warehouses located in several states that maintain control over the alcohol beverage distribution

process until it is sold in to the retail distribution channel within those states.

process until it is sold into the retail distribution channel within those states.

The Company regularly monitors inventory quantities

3 unchanged sentences

consisted of the following as of December 31:

SCHEDULE OF INVENTORY

Raw materials and packaging

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assets, net consisted of the following as of December 31:

OF FIXED ASSETS, NET

SCHEDULE OF FIXED ASSETS, NET

Machinery and equipment

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liability company (“Dream Workz”).

Pursuant to this agreement, the Company sold certain tangible manufacturing assets of

ours to Dream Workz for a purchase price of $ 195,000

(the “Purchase Price”).

Price was paid in a combination of cash in the amount of $ 100,000

and a promissory note in the amount of $ 95,000

(the “Note”).

The Note is unsecured

and bears interest at the rate of 8 %

per annum commencing as of August 25, 2023.

The Note matures on August

Pursuant to this agreement, the Company sold certain tangible manufacturing assets to

Dream Workz for a purchase price of $ 195,000 (the “Purchase Price”).

The Purchase Price was paid in a combination of cash

in the amount of $ 100,000 and a promissory note in the amount of $ 95,000 (the “Note”).

The Note is unsecured and bears interest

at the rate of 8 % per annum commencing as of August 25, 2023.

The Note matures on August 25, 2029 and is due in full at maturity.

the year ended December 31, 2024, the Company recognized a loss on impairment of the note receivable and accrued interest of $ 97,533 .

purchase agreements

to its acquisition by the Company on December 27, 2023, RFS entered into two asset purchase agreements to acquire certain tools and equipment.

The Company received assets under one agreement in December 2023, totaling $ 97,363 .

The assets are included in property and equipment

on the Company’s consolidated balance sheet.

The Company assumed the liability of $ 88,674 as part of the Exchange Agreement with

The agreement requires monthly payments through October 2026.

January 31, 2024, the Company received assets under the second purchase agreement totaling $ 444,891 .

The assets are included in property

and equipment on the Company’s consolidated balance sheet.

The Company assumed the liability of $ 444,891 as part of the Exchange

Agreement with RFS.

The Exchange Agreement requires monthly payments through March 2030.

May 2024, the Company entered into two bill of sale agreements to sell two vehicles to Keith Mort, the former owner of RFS.

assumed the loans associated with the two vehicles with a net book value of $ 130,492 and an aggregate principal balance of $ 72,592 at

the time of sale, and the Company recognized a loss on disposal of $ 57,900 during the year ended December 31, 2024, included in loss

on disposal of assets on the consolidated statement of operations.

of December 31, 2024 and 2023, the Company owed $ 344,343 and $ 88,674 under the notes payable, respectively.

expense totaled $ 233,254 and $ 10,787 for the years ended December 31, 2024, and 2023, respectively.

5 – I NTANGIBLE ASSETS, NET

5 – INTANGIBLE ASSETS, NET

assets, net consisted of the following as of December 31:

OF INTANGIBLE ASSETS, LESS ACCUMULATED AMORTIZATION

SCHEDULE OF INTANGIBLE ASSETS, LESS ACCUMULATED AMORTIZATION

Trade names and license, 10 year estimated useful life

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Total intangible assets, net

amortization expense for the years ended December 31, 2023 and 2022 was $ 4,339

respectively.

The Company expects to recognize amortization expense of $ 56,432

annually in each of the next five

amortization expense for the years ended December 31, 2024 and 2023 was $ 56,377 and $ 4,339 , respectively.

The Company expects to recognize

amortization expense of $ 56,432 annually in each of the next five years.

February 5, 2024, the Company, through its wholly owned subsidiary, Two Trees Beverages, entered into a new 15-year license agreement

with Shine Time, LLC, licensing territories for Tim Smith Spirits ® expanding its territories beyond the United States to include

all members of the European Union, the United Kingdom, Norway, Switzerland, Iceland, Serbia, Turkey and Ukraine.

The Company agreed to

pay a royalty of 9 % on branded products covered by the license agreement, or 4.5 % of any sublicensed revenue under the agreement.

the year ended December 31, 2024, the Company paid $ 79,688 to Shine Time, LLC pursuant to the license agreement.

An additional $ 112,500

was due under the terms of the license agreement by April 1, 2024.

As of the filing date of this Annual Report on Form 10-K, the Company

has not paid such amount.

The Company also agreed to issue to Shine Time, LLC 300,000 shares of the Company’s common stock with

a fair value of $ 15,000 .

Such shares have not been issued as of the date of this report.

As of December 31, 2024, the royalty payable

balance was $ 170,274 , and is included in accounts payable on the Company’s consolidated balance sheet.

6 – NOTE RECEIVABLE

the year ended December 31, 2023, the Company sold certain fixed assets for $ 195,000 .

At the time of the sale $ 100,000 cash

proceeds were received and the Company received a note receivable for $ 95,000 .

At the time of the sale $ 100,000 cash proceeds

were received and the Company received a note receivable for $ 95,000 .

net book value of the asset at the time of sale was $ 26,145 .

A gain of $ 168,855 was

recorded in the year ended December 31, 2023, for the sale of equipment.

The note is payable

in full at maturity on August 25,

accrues interest at the rate of 8 %

The note receivable balance as of December 31, 2023, was $ 97,533

including interest of $ 2,533 .

A gain of $ 168,855 was recorded in the year ended December 31, 2023, for

the sale of equipment.

The note is payable in full at maturity on August 25, 2029 , and accrues

interest at the rate of 8 % per year.

During the year ended December 31, 2024, the Company impaired the note receivable.

The note receivable

balance as of December 31, 2024 and 2023, was $ 0 and $ 97,533 including interest income of $ 0 and $ 2,533 , respectively.

During the year

ended December 31, 2024, the Company impaired the note receivable.

The Company recorded a loss of $ 97,533 during the year ended December

7 - ACQUISITIONS

5 unchanged sentences

as of the closing of the Merger (the “Merger Consideration”).

Upon completion of the Merger, all 12,045,277 shares of

Two Trees common stock were cancelled in exchange for the right of the Two Trees stockholders to receive the Merger Consideration.

share of common stock of Merger Sub issued and outstanding immediately prior to the effective time of the Merger was converted into and

exchanged for one validly issued, fully paid and nonassessable share of common stock, $ 0.001 par value per share, of Two Trees as the

surviving corporation.

Purchase Price Allocation

purchase price for Two Trees has been allocated to the assets acquired and liabilities assumed for purposes of this pro forma

financial information based on their estimated relative fair values.

merger with Two Trees is being accounted for as a business combination under Financial Accounting Standards Board Accounting Standards

Codification (ASC) 805.

The following information summarizes the purchase consideration and allocation of the

fair values assigned to the assets at the purchase date:

THE PURCHASE CONSIDERATION AND ALLOCATION OF THE FAIR VALUES

60,000,000 common share @ $ 0.011 per share

Total purchase consideration

Purchase Price Allocation

Accounts receivable

Prepaid expenses

Fixtures and equipment

Right of use asset

Developed technologies

Customer relationships

Accounts payable

Accrued expenses

Deferred revenue

Right of use liability

Notes payable

fair value of the common stock issued for the Merger was based on the closing price of the Company’s common stock on the closing

date of December 8, 2023.

Company’s consolidated statement of operations includes revenue of $ 104,066 and net income of $ 12,620 related to the Two Trees business

since the transaction closed on December 8, 2023.

Upon completion of the Merger, all 12,045,277 shares of Two

Trees common stock were cancelled in exchange for the right of the Two Trees stockholders to receive the Merger Consideration.

of common stock of Merger Sub issued and outstanding immediately prior to the effective time of the Merger was converted into and exchanged

for one validly issued, fully paid and nonassessable share of common stock, $ 0.001 par value per share, of Two Trees as the surviving

December 27, 2023, the Company completed the acquisition of RFS and the Exchange and issued to Mr.

3 unchanged sentences

became a wholly owned subsidiary of the Company.

Purchase Price Allocation

following table presents the estimated allocation of the purchase price of the assets acquired and liabilities assumed for the acquisition

by the Company of RFS via the exchange:

SUMMARIZES THE PURCHASE CONSIDERATION AND ALLOCATION OF THE

Purchase Price:

7,500,000 common share @ $ 0.03 per share based on closing price of the Company’s common stock at December 27, 2023

Total purchase consideration

Purchase Price Allocation

Accounts receivable

Fixtures and equipment

Right of use assets

Developed technologies

Accounts payable

Accrued expenses

Notes payable – current

Right of use liability - current

Right of use liability – net of current

Long term loans payable

fair value of the common stock issued for the Merger was based on the closing price of the Company’s common stock on the closing

date of December 27, 2023.

Company’s consolidated statement of operations includes revenue of $ 0 and net loss of $ 8,112 related to RFS since the transaction

closed on December 27, 2023.

Pro Forma Financial Information

1 unchanged sentence

Exchange agreement with RF Specialties and the Merger agreement with Two Trees occurred on January 1, 2023.

The pro forma

results of operations are presented for informational purposes only and are not indicative of the results of operations that would have

been achieved if the acquisitions had taken place on the dates noted above, or of results that may occur in the future.

OF UNAUDITED PROFORMA FINANCIAL INFORMATION

The pro forma results of

operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved

if the acquisitions had taken place on the dates noted above, or of results that may occur in the future.

OF UNAUDITED PROFORMA A FINANCIAL INFORMATION

Year ended December 31,

6 unchanged sentences

Weighted Average common shares outstanding

purchase agreements

to its acquisition by the Company on December 27, 2023, RFS entered into two asset purchase agreements to acquire certain tools and

The Company received assets under one agreement in December 2023, totaling $ 97,363 .

The assets are included in property and equipment on the Company’s consolidated balance sheet.

The Company assumed the

liability of $ 88,674

as part of the Exchange agreement with RF Specialties.

The agreement requires monthly payments through October 2026.

As of December 31, 2023, the Company owed $ 88,674 .

Company did not receive the assets under the second purchase agreement until 2024, and as such did not recognize any asset or

liability until it took control of the assets in January 2024.

The Company agreed to pay a total of $ 441,891

on a monthly basis through March 2030.

8 - ADVANCES PAYABLE

Company received advances aggregating $ 29,444

from a non-related parties during the first half

of 2022 in order to cover legal, accounting and other various public company related operating expenses.

This amount was forgiven during

the year ended December 31, 2022, along with the outstanding note payable of $ 210,000 .

This transaction was recognized as an in substance related party transaction.

The forgiveness of debt was recognized as capital contribution

during July 2022 in the accompanying financial statements.

Company received advances aggregating $ 104,204 from two non-related parties during the year ended December 31, 2022 to cover

legal, accounting, and other various public company related operating expenses.

The advances are unsecured, non-interest bearing and

are due on demand.

During the year ended December 31, 2023, the Company repaid $ 104,204 in cash of the advances.

The balance as of December

31, 2023 and 2022 is $ 0 and $ 104,204 , respectively.

8 - NOTES PAYABLE

July 2022, the holders of the Company’s shares of Preferred Stock sold their shares pursuant to a Stock Purchase Agreement (“SPA”),

executed with (i) Tradition Reserve I LLC, a New York limited liability company (“Buyer”);

and (ii) Ronin Equity Partners,

Inc., a Texas corporation (“Seller”).

The SPA, provides, among other things, that the Company’s obligations under its

convertible notes and advances payable aggregating $ 239,444 are forgiven.

This transaction was recognized as an in substance related

party transaction.

The forgiveness of debt was recognized as capital contribution during July 2022 in the accompanying financial statements.

Company has the following outstanding notes payable:

SCHEDULE OF NOTES PAYABLE

OF NOTES PAYABLE

Origination Date

Interest Rate

Balance as of

December 31, 2024

Asset purchase agreement note

Balance as of

December 31, 2023

Asset purchase agreement notes

December 1, 2023 and January 31, 2024

Termination Agreement

4 unchanged sentences

June 18, 2022

Advances Payable – Related parties

following is a summary of the future minimum payments of loans payable:

OF LOANS PAYABLE FUTURE MINIMUM PAYMENTS

OF FUTURE MINIMUM PAYMENTS OF LOANS PAYABLE

2029 and Thereafter

Total loans payable

Company received advances aggregating $ 104,204 from two non-related parties during the year ended December 31, 2022 to cover legal, accounting,

and other various public company related operating expenses.

The advances are unsecured, non-interest bearing and are due on demand.

During the year ended December 31, 2023, the Company repaid $ 104,204 in cash of the advances.

The balance as of December 31, 2024 and

2023 is $ 0 .

the year ended December 31, 2020, the Company entered into a termination agreement and agreed to pay the sum of $ 50,000 , pursuant to

2 unchanged sentences

rate of 0.13 % per annum, with a maturity date on or before January 1, 2025 , for settlement of the $ 50,000 agreed upon in the termination

The balance as of December 31, 2023, and December 31, 2022, is $ 21,584 and $ 31,584 , respectively.

During the year ended December

31, 2023, the Company made a payment of $ 10,000 .

Interest expense of $ 10,461 and $ 0 was recorded in

the years ended December 31, 2023, and 2022, respectively, of which $ 5,507 was imputed interest on the termination agreement.

interest as of December 31, 2023, and December 31, 2022, was zero .

During the year ended December 31, 2023, the Company made a payment of $ 10,000 .

The balance as of December 31, 2024, and December

31, 2023, is $ 21,584 .

to its acquisition by the Company on December 27, 2023, RFS entered into two asset purchase agreements to acquire certain tools and equipment.

The Company received assets under one agreement in December 2023, totaling $ 97,363 .

The assets are included in property and equipment

on the Company’s consolidated balance sheet.

The Company assumed the liability of $ 88,674 as part of the Exchange agreement with

RF Specialties.

The agreement requires monthly payments through October 2026.

January 31, 2024, the Company received assets under the second purchase agreement totaling $ 444,891 .

The assets are included in property

and equipment on the Company’s consolidated balance sheet.

The Company assumed the liability of $ 444,891 as part of the Exchange

Agreement with RFS.

The agreement requires monthly payments through March 2030.

In May 2024, the Company sold two vehicles and transferred the related

See Notes 4 and 11.

the year ended December 31, 2024, the Company received a total of $ 155,500 in proceeds from shareholders.

The loans included interest

of 10 % and $ 32,500 was repaid in 2024.

The advances are unsecured, due on demand and have stated interest of 10 % per annum.

As of December

31, 2024, the balance owed on the advances from shareholders was $ 123,000 .

expense of $ 23,420 and $ 10,461 was recorded in the years ended December 31, 2024, and 2023, respectively, of which $ 5,507 for the year

ended December 31, 2023 was imputed interest on the termination agreement.

Accrued interest as of December 31, 2024, and December 31,

2023, was $ 7,637 and $ 0 , respectively.

9 - CAPITAL STOCK

Company is authorized to issue 300,000,000 shares of Common stock, $ 0.001 par value, with such designations, rights and preferences as

may be determined from time to time by the Board of Directors.

The increase in authorized shares from 200,000,000 to 300,000,000 was

effective September 13, 2022.

Company is authorized to issue 10,000,000 shares of preferred stock, $ 0.001 par value, with such designations, rights and preferences

4 unchanged sentences

on any company matter requiring a vote of shareholders .

At December 31, 2023 and 2022, there were 8,957,500 shares issued and outstanding.

of the Preferred Stock converted 1,042,500 shares of Preferred Stock into 104,250,000 shares of the Company’s common stock during

December 2022.

December 31, 2023 and 2022, there were 198,724,868 and 122,260,208 shares issued and outstanding, respectively.

November 7, 2024, the Company agreed to purchased 8,957,500 shares of Series A Convertible Preferred Stock, representing all of the issued

and outstanding shares of Series A Convertible Preferred Stock of the Company from, Tradition Reserve I LLC, a New York limited liability

company, in exchange for $ 10 .

At December 31, 2024 and 2023 and 2023, there were 0 and 8,957,500 shares of Series A Convertible Preferred

Stock issued and outstanding, respectively.

Company is authorized to issue 300,000,000 shares of Common stock, $ 0.001 par value, with such designations, rights and preferences as

may be determined from time to time by the Board of Directors.

the year ended December 31, 2024, the Company sold a total of 5,020,004 shares of common

stock to accredited investors for total cash proceeds of $ 745,000 .

the year ended December 31, 2024, the Company issued a total of 1,000,000

shares of common stock to accredited investors for total cash proceeds of $ 676,349 .

A total of 53,336 shares of common stock were not issued as of the date of this report.

July 2022, the holders of the Company’s shares of Preferred Stock sold their shares pursuant to a Stock Purchase Agreement (“SPA”),

executed with (i) Tradition Reserve I LLC, a New York limited liability company (“Buyer”);

and (ii) Ronin Equity Partners,

Inc., a Texas corporation (“Seller”).

The SPA, provides, among other things, that the Company’s obligations under its

convertible notes and advances payable aggregating $ 239,444 are forgiven.

This transaction was recognized as an in substance related

party transaction.

The forgiveness of debt was recognized as capital contribution during July 2022 in the accompanying financial statements.

December 2022 Tradition Reserve 1 LLC contributed $ 30,100 as contributed capital to MDwerks Inc.

These funds represent the holdback amount

of the purchase price between Tradition Reserve 1 LLC and Ronin Equity Partners Inc.

shares of common stock to officers and directors

for services under the employment agreements discussed in Note 10.

The Company recorded stock-based compensation of $ 71,938

under the employment and Independent Director

agreements, based on the common stock prices ranging from $ 0.10

the respective grant dates.

part of the license agreement disclosed in Note 11, the Company agreed to issue 300,000 restricted shares of common stock with a fair

value of $ 15,000 based on the fair value of the Company’s stock at the grant date.

The shares have not been issued to date, and

the fair value is included in subscriptions payable on the Company’s consolidated balance sheet

the year ended December 31, 2023, the Company issued a total of 8,964,660 shares of common stock to accredited investors for total cash

proceeds of $ 676,349 .

the year ended December 31, 2023, the Company issued a total of 67,500,000 shares of common stock, with a fair value of $ 885,000 , for

the acquisitions of Two Trees and RF Specialties, LLC.

11 - CONTINGENCIES

December 31, 2024 and 2023, there were 204,744,872 and 198,724,868 shares issued and outstanding, respectively.

the year ended December 31, 2023, the Company issued warrants in connection with the sale of common stock to investors.

The following

table represents warrant activity during the years ended December 31, 2024 and 2023:

OF WARRANT ACTIVITY

Number of Options

Weighted Average Exercise Price

Outstanding at December 31, 2022

Forfeited, cancelled

Outstanding at December 31, 2023

Forfeited, cancelled

Outstanding at December 31, 2024

Exercisable at December 31, 2024

warrants had a weighted average remaining life of 3.65 years and no intrinsic value as of December 31, 2024.

the year ended December 31, 2023, in connection with the acquisition of Two Trees, the Company issued common stock options to purchase

the Company’s common stock to employees of Two Trees in replacement of their previously outstanding stock options of Two Trees.

The following is a summary of activity of outstanding stock options during the year ended December 31, 2024:

OF ACTIVITY OF OUTSTANDING STOCK OPTIONS

Balance, December 31, 2023

Balance, December 31, 2024

Exercisable, December 31, 2024

options had a weighted average remaining life of 8.94 years and no intrinsic value as of December 31, 2024.

10 - COMMITMENTS AND CONTINGENCIES

the ordinary course of business, the Company may become a party to lawsuits involving various matters.

4 unchanged sentences

our continued financial position, results of operations or cash flows.

April 22, 2024, the Company entered into a broker agreement with a third party.

Under the agreement, the Company will pay a monthly fee

of $ 1,500 , and a commission of 12 % of any revenue from customers introduced by the broker, less any promotional expenses incurred by

The agreement is cancellable by either party with 60 days’ notice, and in the event of termination, the commissions

shall continue for a period of one year from the termination date.

The Company incurred fees of $ 15,000 and commissions of $ 1,125 during

the year ended December 31, 2024, and owed the broker $ 5,625 as of December 31, 2024.

November 6, 2024, the Company entered into an employment agreement with its CEO, Steve Laker.

The agreement specifies an annual salary

of $ 180,000 through December 31, 2025, $ 225,000 2026, $ 250,000 for 2027, $ 300,000 for 2028 and $ 350,000 for 2029.

Laker is also eligible

to receive a cash performance-based bonus for any quarter over the next two years where the Company’s gross revenue has increased

by at least 25% compared to the previous year quarter.

The bonus per quarter would be 25% of Mr.

Laker’s then-current base salary.

After two years, for any calendar year where gross revenue has increased at least 10%, 15% or 25%, Mr.

Laker will be eligible to a bonus

of 50%, 100% or 150%, respectively, of his then-current base salary, and is payable 50% in cash and 50% in Company stock vesting over

the following 24 months .

Upon execution of the agreement, the Company will issue 500,000 shares of common stock to Mr.

Laker, with 25%

vesting on January 1, 2025 and the remainder monthly from January 1, 2026 through December 31, 2028 .

During the year ended December 31,

2024, the Company issued a total of 500,000 shares to Mr.

Laker, valued at $ 102,500 , based on the common stock price at the date of grant.

The Company recognized expense of $ 12,250 for these awards and expects to recognize an additional $ 36,750 through the end of the vesting

Additionally, Mr.

Laker is eligible to receive an additional 3,000,000 shares of common stock based on performance benchmarks

tied to certain revenue targets, with targets ranging from $ 5,000,000 to $ 50,000,000 .

These performance awards had a grant date fair

value of $ 294,000 .

The Company recognized no expense during the year ended December 31, 2024 related to these awards as vesting was not

deemed probable.

The expense related to the performance awards will be recognized when vesting becomes probable.

The agreement has an

initial term of five years, and renewal automatically unless written notice is provided 90 days prior.

The agreement can be terminated

by the Company for cause with 90 days notice.

In the event of termination of Mr.

Laker without cause, Mr.

Laker will receive one year

of his then-current base salary, and all stock awards under the agreement will become fully vested .

November 6, 2024, the Company entered into an employment agreement with its Executive Chairman James Cassidy.

The agreement specifies

an annual salary of $ 180,000 through December 31, 2025, $ 225,000 2026, $ 250,000 for 2027, $ 300,000 for 2028 and $ 350,000 for 2029.

Cassidy is also eligible to receive a cash performance-based bonus for any quarter over the next two years where the Company’s

gross revenue has increased by at least 25% compared to the previous year quarter.

The bonus per quarter would be 25% of Mr.

then-current base salary.

After two years, for any calendar year where gross revenue has increased at least 10%, 15%, or 25% Mr.

will be eligible to a bonus of 50%, 100% or 150%, respectively, of his then-current base salary, and is payable 50% in cash and 50% in

Company stock vesting over the following 24 months .

Upon execution of the agreement, the Company will issue 500,000 shares of common

Cassidy, with 25% vesting on January 1, 2025 and the remainder monthly from January 1, 2026 through December 31, 2028 .

the year ended December 31, 2024, the Company issued a total of 500,000 shares to Mr.

Cassidy, valued at $ 49,000 based the common stock

price at the date of grant.

The Company recognized stock based compensation expense of $ 12,250 for these awards and expects to recognize

an additional $ 36,750 through the end of the vesting period.

Additionally, Mr.

Cassidy is eligible to receive an additional 3,000,000

shares of common stock based on performance benchmarks tied to certain revenue targets, with targets ranging from $ 5,000,000 to $ 50,000,000 .

These performance awards had a grant date fair value of $ 294,000 .

The Company recognized no expense during the year ended December 31,

2024 related to these awards as vesting was not deemed probable.

The expense related to the performance awards will be recognized when

vesting becomes probable.

The agreement has an initial term of five years, and renewal automatically unless written notice is provided

90 days prior.

The agreement can be terminated by the Company for cause with 90 days notice.

In the event of termination of Mr.

without cause, Mr.

Cassidy will receive one year of his then-current base salary, and all stock awards under the agreement will become

fully vested .

November 18, 2024, Mr.

Timothy Brocopp and the Company entered into an Independent Director Agreement, with the following summarized

Brocopp shall serve as an independent director of the Company and be available to perform the duties consistent with such

position pursuant to the Certificate of Incorporation and Bylaws of the Company.

Brocopp’s employment commenced on Monday,

November 16, 2024, and continues for a term of three (3) years.

Compensation that Mr.

Brocopp will receive during his term includes the

sum of $ 5,000 , each calendar quarter, payable in the third month of each calendar quarter, and with such amount for any partial calendar

quarter being appropriately prorated .

Upon employment, the Company shall issue to Mr.

Brocopp 100,000 shares of common stock, par value

$ 0.001 per share, of the Company (the “Common Stock”), subject to the terms and conditions of the Company’s applicable

equity incentive plan and any related grant documentation, with $ 10,000 shares divided by a VWAP schedule.

The fair value of the shares

was estimated using a common stock price of $ 0.10 or $ 10,000 .

The Company recognized stock based compensation expense of $ 10,000 for

these awards and expects to recognize an additional $ 0 as the awards vest immediately.

Furthermore, the Company is to issue an additional

71,429 shares of common stock, based on the VWAP of the Common Stock Trading Market during the 20 Trading Day as of December 31, 2024.

The fair value of the shares was estimated using a common stock price of $ 0.15 or $ 10,714 .

Subsequent to the date of this report, the

Company issued 171,429 shares of common stock to Mr.

December 3, 2024, Mr.

Richard Blackstone and the Company entered into an Independent Director Agreement.

Blackstone shall serve as

an independent director of the Company and be available to perform the duties consistent with such position pursuant to the Certificate

of Incorporation and Bylaws of the Company.

Blackstone’s employment commenced on Tuesday, December 3, and continues for a term

of three (3) years.

Compensation that Mr.

Blackstone will receive during his term includes the sum of $ 5,000 , each calendar quarter,

payable in the third month of each calendar quarter, and with such amount for any partial calendar quarter being appropriately prorated .

Upon employment, the Company shall issue to Mr.

Blackstone 100,000 shares of common stock, par value $ 0.001 per share, of the Company

(the “Common Stock”), subject to the terms and conditions of the Company’s applicable equity incentive plan and any

related grant documentation, with $ 10,000 shares divided by a VWAP schedule.

The estimated fair value of the shares was estimated using

a common stock price of $ 0.16 or $ 16,010 .

The Company recognized stock based compensation expense of $ 16,010 for these awards and expects

to recognize an additional $ 0 as the awards vest immediately.

Furthermore, the Company is to issue an additional 71,429 shares of common

stock, based on the VWAP of the Common Stock Trading Market during the 20 Trading Day as of December 31, 2024.

The fair value of the

shares was estimated using a common stock price of $ 0.15 or $ 10,714 .

Subsequent to the date of this report, the Company issued 171,429

shares of common stock to Mr.

11 - RELATED PARTY TRANSACTIONS

July 2022, the holders of the Company’s shares of Preferred Stock sold their shares pursuant to a Stock Purchase Agreement (“SPA”),

executed with (i) Tradition Reserve I LLC, a New York limited liability company (“Buyer”);

and (ii) Ronin Equity Partners,

Inc., a Texas corporation (“Seller”).

The SPA, provides, among other things, that the Company’s obligations under its

convertible notes and advances payable aggregating $ 239,444 are forgiven.

This transaction was recognized as an in substance related

party transaction.

The forgiveness of debt was recognized as capital contribution during July 2022 in the accompanying financial statements.

December 2022 Tradition Reserve 1 LLC contributed $ 30,100 as contributed capital to MDwerks Inc.

These funds represent the holdback amount

of the purchase price between Tradition Reserve 1 LLC and Ronin Equity Partners Inc.

of the Preferred Stock, the largest Company’s shareholder, converted 1,042,500 shares of Preferred Stock into 104,250,000 shares

of the Company’s common stock during December 2022.

the year ended December 31, 2024, the Company entered into agreements with certain officers and directors, as disclosed in Note 10.

November 7, 2024, the Company agreed to purchased 8,957,500 shares of Series A Convertible Preferred Stock, representing all of the issued

and outstanding shares of Series A Convertible Preferred Stock of the Company from, Tradition Reserve I LLC, a New York limited liability

company, in exchange for $ 10 .

At December 31, 2024 and 2023, there were 0 and 8,957,500 shares of Series A Convertible Preferred Stock

issued and outstanding, respectively.

the year ended December 31, 2024, the Company received a total of $ 155,500 in proceeds from shareholders and repaid $ 32,500 .

are unsecured, due on demand and have stated interest of 10 % per annum.

As of December 31, 2024, the balance owed on the advances from

shareholders was $ 123,000 .

See Note 8 above.

May 2024, the Company entered into two bill of sale agreements to sell two vehicles to Keith Mort, the former owner of RFS.

assumed the loans associated with the two vehicles with a net book value of $ 130,492 and an aggregate principal balance of $ 72,592 at

the time of sale, and the Company recognized a loss on disposal of $ 57,900 during the year ended December 31, 2024.

As of December 31, 2024, the Company owed a total of $ 36,738 to an entity

controlled by the Company’s Chairman, and $ 10,074 to Mr.

Mort related to expense reimbursements.

Company maintains an operating lease for its office space and operating facility.

lease has a remaining term of 80 months.

The Company determines if an arrangement is a lease at inception.

As the rate implicit in

each lease is not readily determinable, the Company uses its incremental borrowing rate based on information available at

commencement to determine the present value of the lease payments.

The Company used a weighted average incremental borrowing rate of

8.4% Right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over

the lease term.

Leases with an initial term of 12 months or less (“short-term leases”) are not recorded on the balance

sheet and are recognized on a straight-line basis over the lease term .

As of December 31, 2023, the amount of right-of-use

assets and lease liabilities were $ 1,105,152

and $ 1,162,090 ,

respectively.

As of December 31, 2022, the amount of right-of-use assets and lease liabilities were $ 0 .

Aggregate lease expense for the years ended December 31, 2023, and 2022 was $ 5,546

respectively.

The lease has a remaining term of 80 months.

determines if an arrangement is a lease at inception.

As the rate implicit in each lease is not readily determinable, the Company uses

its incremental borrowing rate based on information available at commencement to determine the present value of the lease payments.

Company used a weighted average incremental borrowing rate of 8.4 % Right-of-use assets and lease liabilities are recognized at commencement

date based on the present value of lease payments over the lease term.

Leases with an initial term of 12 months or less (“short-term

leases”) are not recorded on the balance sheet and are recognized on a straight-line basis over the lease term.

As of December

31, 2024, the amount of right-of-use assets and lease liabilities were $ 915,803 and $ 961,490 , respectively.

As of December 31, 2023,

the amount of right-of-use assets and lease liabilities were $ 1,105,152 and $ 1,162,090 , respectively.

Aggregate lease expense for the

years ended December 31, 2024, and 2023 was $ 215,928 and $ 5,546 , respectively.

following table provides the maturities of lease liabilities at December 31, 2024:

1 unchanged sentence

Operating Lease

Term in Years

Total lease payments

24 unchanged sentences

accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions.

14 – SEGMENT REPORTING

Company’s operations are managed and reported in two operating segments, each of which is a reportable segment for financial reporting

(1) RF Specialties and (2) Two Trees Distilling.

These segments are organized principally by product and service category.

The Company’s reportable segments are determined based on (1) financial information reviewed by the CODM, (2) operational structure

of the Company which is designed and managed to share resources across the entire suite of products offered by the business, and (3)

the basis upon which the CODM makes resource allocation decisions.

The CODM for both segments is the Director, President and Chief Executive

Officer of the Company.

The CODM utilizes the segment operating income (loss) to assess profitability and performance of actual results

compared to forecasts.

segment expenses and assets information is as follows:

OF SEGMENT EXPENSES AND ASSETS INFORMATION

For the Years ended December 31,

Two Trees Distilling

RF Specialties

Cost of Sales

Two Trees Distilling

RF Specialties

Cost of Sales

Two Trees Distilling

RF Specialties

General & Administrative Expense

Two Trees Distilling

RF Specialties

General & Administrative Expense

Salary and Wages

Two Trees Distilling

RF Specialties

Salary and Wages

Depreciation and Amortization Expense

Two Trees Distilling

RF Specialties

Depreciation and Amortization Expense

Net loss from operations

Two Trees Distilling

$ ( 451,956 )

RF Specialties

( 1,051,616 )

$ ( 1,502,664 )

$ ( 452,599 )

Net loss from operations

$ ( 1,502,664 )

$ ( 452,599 )

Two Trees Distilling

RF Specialties

15 - SUBSEQUENT EVENTS

February 5, 2024, the Company issued a press release announcing that the Company’s wholly owned subsidiary, Two Trees

Beverages, has entered a new, fifteen (15) year license agreement Shine Time, LLC, product licensing territories for Tim Smith

Spirits ® expanding its territories beyond the United States to include all members of the European Union, the United

Kingdom, Norway, Switzerland, Iceland, Serbia, Turkey and Ukraine.

The Company will pay a royalty of 9 % on branded products

covered by the license agreement, or 4.5 % of any sublicensed revenue under the agreement.

The Company paid $ 79,688 , owes an

additional $ 112,500 under the license agreement that was due by April 1, 2024 but has not yet been paid and will issue 300,000

shares of common stock.

Subsequent to December 31, 2023, the Company issued

2,600,000 shares of common stock and received cash proceeds of $ 390,000 .

On April 22, 2024, the Company entered into a broker

agreement with a third party.

Under the agreement, the Company will pay a monthly fee of $ 1,500 , and a commission of 12 % of any revenue

from customers introduced by the broker, less any promotional expenses incurred by the Company.

The agreement is cancellable by either

party with 60 days notice, and in the event of termination, the commissions shall continue for a period of one year from the termination

On January 1, 2024, the Company entered into a short-term loan agreement with an existing shareholder for $ 25,000

in cash proceeds.

The loan included interest of 10 % and was repaid in full in March 2024.

Company evaluates events that have occurred after the balance sheet date through the date these financial statements were issued.

December 31, 2024, the Company issued a promissory note payable in the amount of $ 100,000 at the rate of 12 % per annum, with a maturity

date on December 31, 2026 .

The cash proceeds from this promissory note were received in January 2025.

On January 30, 2025, the Company issued a promissory note payable in the

amount of $ 50,000 at the rate of 12 % per annum, with a maturity date of January 30, 2026 .

to December 31, 2024, the Company sold 7,826,667 shares of common stock in exchange for cash proceeds of $ 1,174,000 , of which 2,666,667 have not yet been issued.

Subsequent to December 31, 2024, the Company issued 171,429 shares each

Brocopp and Mr.

Blackstone pursuant to their director agreements.

January 27, 2025, the Company’s wholly owned subsidiary, Two Trees Beverage Company (the “Buyer”), and Brown Water

Bourbon Xchange, LLC, a Kentucky Limited Liability Company (the “Seller”) (collectively the “Parties”) entered

into an Asset Purchase Agreement (the “Agreement”).

According to the terms of the Agreement, the Seller sold to Buyer 680

barrels of whiskey in exchange for 5,000,000 restricted shares of Common Stock of the Company (the “Shares”).

day, the Buyer and Seller closed the transaction.

February 19, 2025, Two Trees Beverage Company, and RFS each entered into new contracts with two industry-leading spirits companies, related

to the deployment and license of the Company’s proprietary Spirits Rapid Aging System (“SRAS”).

March 10, 2025, the Company entered into an Executive Employment Agreement with David Stephens.

Stephens shall serve as the Chief

Financial Officer of the Company and be available to perform the duties consistent with such position pursuant to the Certificate of

Incorporation and Bylaws of the Company.

Stephen’s employment commenced on March 1, 2025, and continues for a term of three

Compensation that Mr.

Stephens will receive during his term includes (i) for the period of January 1, 2025 through December

31, 2025, an base salary of $ 120,000 , payable in equal monthly payments of $ 10,000 per month;

(ii) for the period of January 1, 2026

through December 31, 2026, a base salary of $ 150,000 ;

and (iii) for the period of January 1, 2027 through December 31, 2027, a base salary

of $ 175,000 .

In addition to the Base Salary, Mr.

Stephens shall receive performance-based bonuses from January 1, 2025 on a quarterly

basis for a period of two (2) years of the Term (the “Two Year Quarterly Bonuses”) as follows:

for any calendar quarter(s)

where the Company’s gross revenue has increased a minimum of twenty five percent (25%) from its prior year gross revenue for that

corresponding calendar quarter, Mr.

Stephens shall be entitled to a cash bonus equating to fifteen percent (15%) of his then-current

Base Salary within thirty (30) days of the conclusion of any such calendar quarter(s).

Upon conclusion of the two (2) years of the Term,

Stephens shall thereafter receive performance-based bonuses on an annual basis (the “Subsequent Annual Bonuses”).

any calendar year(s) where the Company’s gross revenue has increased a minimum of ten percent (10%) from its prior year gross revenue

for that corresponding calendar year, Mr.

Stephens shall be entitled to a cash bonus equating to forty percent (40%) of his then-current

Base Salary payable as follows:

(1) fifty percent (50%) in cash within thirty (30) days of the conclusion of any such calendar year(s);

and (2) fifty percent (50%) in Company stock vesting on a prorated consecutive twenty four (24) calendar month basis;

For any calendar

year(s) where the Company’s gross revenue has increased a minimum of fifteen percent (15%) from its prior year gross revenue for

that corresponding calendar year(s), Mr.

Stephens shall be entitled to a cash bonus equating to seventy-five percent (75%) of his then-current

Base Salary payable as follows:

(1) fifty percent (50%) in cash within thirty (30) days of the conclusion of any such calendar year(s);

and (2) fifty percent (50%) in Company stock vesting on a prorated consecutive twenty four (24) calendar month basis.;

For any calendar

year(s) where the Company’s gross revenue has increased a minimum of twenty five percent (25%) from its prior year gross revenue

for that corresponding calendar year(s), Mr.

Stephens shall be entitled to a cash bonus equating to one hundred twenty five percent (125%)

of his then-current Base Salary payable as follows:

(1) fifty percent (50%) in cash within thirty (30) days of the conclusion of any

such calendar year(s);

and (2) fifty percent (50%) in Company stock vesting on a prorated consecutive twenty four (24) calendar month

execution of the agreement, the Company will issue 150,000 shares of common stock to Mr.

Stephens, with 50,000 shares vesting on execution of the agreement

and the remainder monthly from January 1, 2026 through December 31, 2027 .

Additionally, Mr.

Stephens is eligible to receive an additional

562,500 shares of common stock based on performance benchmarks tied to certain revenue targets, with targets ranging from $ 5,000,000

to $ 50,000,000 .

The agreement has an initial term of three years, and renewal automatically unless written notice is provided 90 days

The agreement can be terminated by the Company for cause with 90 days notice.

In the event of termination of Mr.

Stephens without

Stephens will receive six months of his then-current base salary, and all stock awards under the agreement will become fully

These shares have not yet been issued.

March 14, 2025, the Company agreed to issue 200,000

shares of common stock to a consultant, of which 66,667

vest upon execution, and the remaining 133,333 vesting

monthly from January 1, 2026 through December 31, 2027 .

Additionally, the consultant is eligible to receive an additional 750,000

shares of common stock based on performance benchmarks tied to certain revenue targets, with targets ranging from $ 5,000,000 to

$ 50,000,000 .

These shares have not yet been issued.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

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What changed 10-K

Item 8. Financial Statements and Supplementary Data