UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form

FORM 10-Q

(Mark One)

☒     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

or

☐     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 000-52047

50 Division Street Somerset NJ 08873

(Address of principal executive offices)

(732) 695-4389

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes ☒     No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ ☐    No ☐

Indicate by check mark whether the registrant is large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” accelerated filer” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐     No ☒

Securities registered pursuant to Section 12(b) of the Act: None

As of August 14, 2023, there were 1,978,087,926 shares outstanding of the registrant’s common stock.

AUTHENTIC HOLDINGS, INC.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

AUTHENTIC HOLDINGS INC. 

ECO TEK 360, INC. and Subsidiaries

Condensed Consolidated Balance Sheets

As of June 30, 2023 and December 31, 2022

*Derived from audited financial statements

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

ECO TEK 360, INC. and Subsidiaries

AUTHENTIC HOLDINGS INC.

Condensed Consolidated StatementsStatement of Operations

(Unaudited)For the Three and Six Months Ended June 30, 2023 and 2022

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

ECO TEK 360, INC. and Subsidiaries

AUTHENTIC HOLDINGS INC.

Condensed Consolidated StatementsStatement of Cash FlowsStockholders' Deficit  

(Unaudited)For the Three and Six Months Ended June 30 , 2023 and 2022

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

ECO TEK 360,AUTHENTIC HOLDINGS INC.

Condensed Consolidated Statement of Cash Flows

For the Six Months Ended June 30, 2023 and 2022

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SeptemberJune 30, 20172023

NOTE 1 – DESCRIPTION OF BUSINESS AND GOING CONCERN

Eco Tek 360,

Authentic Holdings Inc. ("the Company"(formerly Global Fiber Technologies, Inc.) was incorporated in Nevada on March 25, 2005. As of September 30, 2017 and December 31, 2016,2005 as “Premier Publishing Group, Inc.” Originally formed as a publishing company, the Company had 400,000,000 sharesceased its publishing operations in or around 2007.

After ceasing the publishing operations, the Company's operations consisted solely of authorized common stock.utilizing the expertise of its board Members and outside agents to further the efforts of its advisory services business plan through a wholly owned subsidiary known as Trident Merchant Group, Inc.  On April 20, 2011 the Company filed an amendment with the Nevada Secretary of State for a name change to Premiere Opportunities Group, Inc.  which became official on June 29, 2011.

During the secondfourth quarter of 2013, the Company became involved in the manufacturing and global distribution of ladies’ apparel.  However, in 2014 the Company formed Leading Edge Fashions, LLC of which it controls 51%. Effective December 31,stopped developing a footprint in the apparel business due to cash restraints and logistics and ceased agreements with all third parties.  On August 4, 2014,  the Company's BoardCompany filed an amendment to the articles of Directors determined it was inincorporation to change the best interestname of the Company to discontinueGlobal Fashion Technologies, Inc. 

On January 11, 2017 the operationsCompany filed an amendment to change the name of Leading Edge Fashions, LLC.

Thethe Company to Eco Tek 360, Inc.  In November 2018, the Company created a new limited liability company, Pure361, LLC ("Pure361") in May 2015subsidiary, Fiber Chain, Inc., for the purpose of operating the portion of the Company's business that is involved with the collection, rejuvenationas an intermediary providing an expedited trading platform for buyers and manufacturing of garments and other accessories for the uniform marketplace that serves the hospitality, food service, medical, manufacturing, education, military, transportation and other commercial uniform industries.sellers to efficiently consummate fiber transactions. The Company owns 51% of Pure361. Pure361 entered into a license agreement with Pure System International Ltd. ("Pure"), the minority owner of Pure 361, related to potential future operations in which Pure361 was granted the exclusive license to use certain licensed intellectual property related to the manufacturing of uniforms from recyclable waste. Pure361ECO CHAIN 360, Inc. ECO CHAIN 360, Inc. has had no operations to date.

The Company created a new wholly owned subsidiary, Progressive Fashions Inc. ("PFI") in February 2016 for the purpose of designing, producing and marketing the EMME® Activewear Collection. On June 5, 2017 the Company and True Beauty, LLC (the company that controls the EMME® trademark) terminated the license agreement. PFI has had no operations to date.

Basis of Presentation: Unaudited Interim Financial Information

The accompanying interim condensed consolidated financial statements are unaudited. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all of the normal recurring adjustments necessary to present fairly the financial position and results of operationsdate nor did it have assets or liabilities as of and for the periods presented. The interim results are not necessarily indicative of the results to be expected for the full yearMarch 31, 2023 or any future period.2022.

Certain informationOn April 18, 2019, the Company filed an amendment to change the name of the Company to Global Fiber Technologies, Inc.

On June 18, 2019, the Company completed its acquisition of assets from AH Originals, Inc. (“AHO”), a corporation controlled by the same owner group of Global Fiber Technologies, Inc., for the consideration of 6,400,000 shares of common stock of the Company to be issued and footnote disclosures normally includedthe issuance of a promissory note of $447,150 that bears 3% interest per annum and has a one-year term with eight options to extend the maturity date for three-month periods. In addition, the Company issued to AHO 200,000 common shares of Authentic Heroes, Inc. (“AHI”), a subsidiary created by the Company, to hold the purchased assets. AHI has commenced minimal operations.

The Company’s business plan is to operate three separate subsidiaries. Authentic Heroes is a company with proprietary know how and patented technology that is currently operating in the condensed consolidated financial statements preparedmemorabilia industry. It has licenses with Universal Music Group artists RUN DMC, YUNGBLUD and is in discussions with several other music artists. Ecotek360 is a fiber rejuvenation technology company. It plans on offering branded fabrics, apparel and uniforms to the corporate, hotel, hospital and military markets and is still in the development stage but running testing in the joint venture with Fiber Conversion Inc a joint development partner in Broadalbin NY. Fiber Chain, Inc. is still in the development stage and its business plan is to operate as an intermediary providing an expedited trading platform for buyers and sellers to efficiently consummate fiber transactions.

On April 26, 2023, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Maybacks Global Entertainment LLC, an Arizona limited liability company (“Maybacks”), and the members of Maybacks. As a result of the transaction, Maybacks became a wholly-owned subsidiary of the Company. In accordance with accounting principles generally acceptedthe terms of the Purchase Agreement, at the closing an aggregate of 100,000 shares of the Company’s newly created Series C Preferred Stock were issued to the holders of Maybacks in exchange for their membership interests of Maybacks.

The Purchase Agreement includes a funding obligation, which requires the United States have been condensed or omittedCompany to provide capital to fund the monthly expenses of Maybacks. 

On June 20, 2023, the Company closed an Asset Purchase Agreement (the “Asset Agreement”) with Goliath Motion Picture Promotions owned by Priscella Cooper (the “Seller”). On the Closing Date, pursuant to the rulesAsset Agreement, the Company acquired various full-length motion pictures and regulationsserial television shows (the “Assets”). In exchange for the Assets, the Company issued to the Seller 100,000 shares of the SecuritiesCompany’s Series D Preferred Stock, par value $0.001 with state value of $50 per share.

Management plans to raise additional debt or equity and Exchange Commission ("SEC"). Thecontinue to settle obligations by issuing stock, as well as grow other debt and equity until the Company believes thatgenerates positive cash flow from an operating company. However, the disclosures are adequate to make the interim information presented not misleading. These condensed consolidatedCompany’s financial statements should be read in conjunction with the Company's audited consolidated financial statements and the notes thereto included in the Company's Report on Form 10-K filed on March 31, 2017 for the years ended December 31, 2016 and 2015.

Going Concern

The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles, which contemplates continuation of the Company as a going concern. The Company hasshow an accumulated deficit of $30,530,887 and $29,730,893$37.7 million as of SeptemberJune 30, 20172023, with a net working capital deficit of $5.6 million and December 31, 2016, respectively, which include losses of $799,994 and $162,577 for the nine months ended September 30, 2017 and 2016, respectively.  Consequently, the aforementioned itemslimited cash resources. These factors raise substantial doubtdoubts about the Company'sCompany’s ability to continue as a going concern within one year after the date that the financial statements are issued.next year.

The Company's ability to continue as a going concern is dependent upondepends on its ability to repay or settle its current indebtedness, acquire an operating businessgenerate positive cash flow, and raise capital through equity and debt financing or other means on desirablefavorable terms. If the Company is unable tocannot obtain additional funds when they are required or if the funds cannot be obtained on favorable terms, management may be requirednecessary to restructure the Company or cease operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

NOTE 2 –SUMMARY– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in U.S. dollars. The Company uses the accrual basis of accounting and has adopted a December 31 fiscal year-end. 

Principles of Consolidation

The accompanying consolidated financial statements include all of the accounts of the Company and its wholly owned subsidiary,subsidiaries, Trident Merchant Group, Inc. and Progressive Fashions Inc., and its majority-owned subsidiaries, Leading Edge Fashion, LLC, which is 51% owned, and Pure361, LLC and ECO CHAIN 360, Inc., which isare 51% owned. All significant intercompany accounts and transactions have been eliminated. As noted in Note 1, our 51% owned subsidiaries, Pure361, Leading Edge Fashions, LLC, and ECO CHAIN 360, Inc., had no operations, assets, or liabilities as of December 31, 2022, and 2021. Because of this, a non-controlling interest is not reflected in these financial statements. In addition, the Company has consolidated Authentic Heroes, Inc., of which the Company owns 80%.

ReclassificationsThe Company filed articles of Merger with the Secretary of State of Nevada to effectuate a merger with its wholly-owned subsidiary, Authentic Holdings, Inc. Shareholder approval was optional under Section 92A.180 of the Nevada Revised Statutes. As part of the merger, the Company’s board of directors authorized a change in our name to “Authentic Holdings, Inc.” The Company’s Articles of Incorporation have been amended to reflect this name change.

CertainReclassifications

Specific amounts in the prior periodperiod’s financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect ondid not affect the reported consolidated net (loss).loss.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and investments in money market funds. The Company considers all highly-liquidhighly liquid instruments with an original maturity of 90 days or less at the time of purchase to be cash equivalents.

Inventories

Inventories are stated at the lower cost (first-in, first-out method) or net realizable value.

On June 30, 2023, and December 31, 2022, the Company had no acquired inventories.

Equipment

Property and equipment are stated at cost. Costs of replacements and majorsignificant improvements are capitalized, and maintenance and repairs are charged to operations as incurred. Depreciation expense is provided primarily by the straight-line method over the estimated useful lives of the assets which is seven years.as follows:

Depreciation expenses amounted to $22,236 and $25,636 for the six months ended June 30, 2023 and 2022, respectively.

The long-lived assets of the Company are reviewed for impairment under ASC 360, “Property, Plant and Equipment” (“ASC 360”), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the six months ended June 30, 2023, and 2022, no impairment losses have been identified.

Intangible Assets

The Company accounts for intangible assets (including trademarks and website) under ASC 350 “Intangibles-Goodwill and Other” (“ASC 350”). ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. In addition, ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including identifying reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include assessing future cash flows and determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to differ from such estimates materially and affect the determination of fair value and goodwill impairment at future reporting dates.

The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed on a straight-line or accelerated basis over the estimated periods benefited. Patents, technology, and other intangibles with contractual terms are generally amortized over their respective legal or contractual lives. When certain events or changes in operating conditions occur, an impairment assessment is performed, and lives of intangible assets with determinable lives may be adjusted.

We amortize the cost of our intangible assets over the 15-year estimated useful life on a straight-line basis.

The following table sets forth the amortization for the intangible assets on June 30, 2023 and December 31, 2022:

Prepaid interest and deposits

Prepaid interestInterest and deposits consist of debt discounts,include prepaid consulting fees, OTC market annual fees, and amounts paid for deposits on property, plant and equipment.license agreements. Prepaid interest is amortized over the life of the related liability.

Revenue Recognition

The Company recognizes revenue from its customer contracts following ASC 606 – Revenue from Contracts with Customers. The Company recognizes revenues when satisfying the performance obligation of the associated contract that reflects the consideration expected to be received based on the terms of the contract.

Revenue forrelated to contracts with customers is evaluated utilizing the women's fashion division will be recognizedfollowing steps:

Accounts Receivable

Accounts receivables are recorded following ASC 310,” Receivables.” Accounts receivables are recorded at the point-of-sale for retail store sales, net of estimated customer returns. Revenue is recognized at the completion of a job or service for the consulting division. Revenue is presented on a net basisinvoiced amount and doesdo not include any tax assessed by a governmental or municipal authority. Payment for merchandise at stores and through the Company's direct-to-consumer channel will be tendered by cash, check, credit card, debit card or gift card. Therefore, the Company's need to collect outstanding accounts receivable for its retail and direct-to-consumer channel is negligible and mainly results from returned checks or unauthorized credit card transactions.bear interest. The Company maintainshas no amount recorded as an allowance for doubtful accounts. The allowance for doubtful accounts for its consulting service accounts receivable, which management reviews on a regular basis and believes is sufficient to cover potentialthe Company’s best estimate of probable credit losses in its existing accounts receivable. Based on management’s estimate and billing adjustments. Depositsall charges being current, the Company has not deemed it necessary to reserve for consulting services are recognized as a sale upon completion of service.doubtful accounts at this time.

Leases

Effective October 1, 2019, the Company adopted the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), and additional ASUs issued to clarify and update the guidance in ASU 2016-02 (collectively, the “new leases standard”), which modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing essential information about leasing arrangements. The Company accountsadopted the new lease standard utilizing the modified retrospective transition method, under which amounts in prior periods presented were not restated for a gift card transaction by recording a liabilitycontracts existing at the time the gift card is issuedof adoption. The Company currently does not have any operating lease over one year term to the customer in exchange for consideration from the customer. A liability is establishedrequire accessing (i) whether any are or contain leases, (ii) lease classification, and remains on the Company's books until the card is redeemed by the customer, at which time the Company records the redemption of the card for merchandise as a sale or when it is determined the likelihood of redemption is remote, based on historical redemption patterns. Revenues attributable to gift card liabilities relieved after the likelihood of redemption becomes remote are included in sales and are not material.(iii) initial direct costs.

Sales Return ReserveIncome Taxes

The Company records a reserve for estimated product returns where the sale has occurred during the period reported, but the return is likely to occur subsequent to the period reported and may otherwise be considered in-transit. The reserve for estimated in-transit product returns is based on the Company's most recent historical return trends. If the actual return rate or experience is materially higher than the Company's estimate, additional sales returns would be recorded in the future.

Income Taxes

Income taxes are accounted for under the asset and liability method as stipulated by ASC 740 "Income“Income Taxes."” Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases and operating loss, and tax credit carry forwards.carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities or a change in tax rate is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced to estimated amounts to be realized by the use ofusing a valuation allowance. A valuation allowance is applied when in management's view, it is more likely than not that such deferred tax asset will be unable to be utilized.

The Company adopted certainspecific provisions under ASC Topic 740, which provide interpretative guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Effective with the Company'sCompany’s adoption of these provisions, interest related to the unrecognized tax benefits is recognized in the financial statements as a component of income taxes.

The Company’s tax returns are subject to examination by the federal and state tax authorities for the years ended 2017 through 2021. In the unlikely event that an uncertain tax position exists in which the Company could incur income taxes, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities. Reserves for uncertain tax positions would be recorded if the Company determined it is probable that a position would not be sustained upon examination or if payment would have to be made to a taxing authority and the amount is reasonably estimated. As of June 30, 2023, and December 31, 2016 and 2015,2022, the Company does not believe it has any uncertain tax positions that would result in the Company having a liability to the taxing authorities. The Company's tax returns are subject to examination by the federal and state tax authorities for the years ended 2005 through 2016.

Impairment or Disposal of Long-Lived Assets

ASC Topic 360 (formerly FASB issued Statement No. 144), "Accounting for the Impairment or Disposal of Long-Lived Assets" ("FAS 144"), clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business.  Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable.  When necessary, impaired assets are written down to their estimated fair value based on the best information available. No impairment was necessary as of September 30, 2017 or September 30, 2016.

Stock-based Compensation

We account for stock-based awards at fair value on the grant date of grant, and recognize compensation over the service-period thatservice period they are expected to vest. WeUsing the Black-Scholes option pricing model, we estimate the fair value of stock options and stock purchase warrants using the Black-Scholes option pricing model.warrants. The estimated value of the portion of a stock-based award that is ultimately expected to vest, taking into considerationconsidering estimated forfeitures, is recognized as expense over the requisite service periods. The model includes subjective input assumptions that can materially affect the fair value estimates. The expected volatility is estimated based on the most recent historical period of time, of other comparative securities, equal to the weighted average life of the options. The estimate of stock awards that will ultimately vest requires judgment, and tojudgment. To the extent that actual forfeitures differ from estimated forfeitures, such differences are accounted for as a cumulative adjustment to compensation expenses and recorded in the period that estimates are revised.

For the six months ended June 30, 2023, and 2022, the Company incurred no stock-based compensation.

Beneficial Conversion Feature

For conventional convertible debt where the rate of conversion is below market value, the Company records any “beneficial conversion feature” (“BCF”) intrinsic value as additional paid-in capital and related debt discount.

When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The discount is amortized over the life of the debt. If the underlying debt is converted, a proportionate share of the unamortized amounts is immediately expensed.

Debt Issue Costs

The Company may pay debt issue costs in connection with raising funds through the issuance of debt, whether convertible or not, or with other considerations. These costs are recorded as debt discounts and are amortized over the life of the obligation to the statement of operations as amortization of debt discount.

Original Issue Discount

Suppose a debt is issued with an original issue discount. In that case, the original issue discount is recorded as a debt discount, reducing the face amount of the note. It is amortized over the life of the debt to the statement of operations as amortization of debt discount. If the underlying debt is converted, a proportionate share of the unamortized amounts is immediately expensed.

Use of Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the valuation of stock-based awards issued and derivatives embedded in financial instruments. Assessments are used to determine depreciation, the valuation of non-cash issuances of common stock, stock options, and options issued as stock based compensation.warrants, and valuing convertible notes for beneficial conversion features, among others.

Fair Value

FASB ASC 820, Fair Value Measurements and Disclosures ("(“ASC 820"820”) establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following threeSix categories:

Level 1—Quoted market prices for identical assets or liabilities in active markets or observable inputs;inputs.

Level 2—Significant other observable inputs that can be corroborated by observable market data;data can corroborate; and

Level 3—Significant unobservable inputs that cannot be corroborated by observable market data.data cannot corroborate.

The carrying amounts of cash, accrued compensation, accounts payable and other liabilities, accrued interest payable, and short-term portion of notes payable approximatefollowing table summarizes fair value because of the short-term nature of these items.measurements by level on June 30, 2023 and December 31, 2022, measured at fair value on a recurring basis:

Concentration

The concentration of Credit Risk

The carrying value of short-term financial instruments, including cash, restricted cash, trade accounts receivable, accounts payable, accrued expenses, and short-term debt, approximates the fair value of these instruments. These financial instruments generally expose the Company to limited credit risk and have no stated maturities or have short-term maturities and carry interest rates that approximate the market. The Company maintains cash balances at financial institutions that are insured by the FDIC. At SeptemberOn June 30, 2017,2023 and December 31, 2016,2022, the Company had no amounts in excess ofabove the FDIC limit.

New Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 "Debt—Debt with Conversion and Other Options." The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company has adopted this standard and determined no material impact on its financial statements.

NOTE 3 – CAPITAL STOCK

Preferred Stock

TheSeries B Preferred Stock

In September 2014, the Company has designated a "Class"Series B Convertible Preferred Stock" (the "Class"Series B Preferred").  The  number of authorizedCompany had originally allocated 1,000,000 shares totals 1,000,000 andto the series, par value is $.001$0.001 per share.  The Class B Preferred shareholders vote together withshare, and features included super voting rights of 10,000 votes per share, non-cumulative dividends at 8% per annum, accrued daily, and a liquidation preference over the common stock, as a single class.  The holdersalong with other features contained in the Certificate of Class B Preferred are entitled to receive all notices relating to voting as are required to be given toDesignation for the holders of the Common Stock.  The holders of shares of Class B Preferred shall be entitled to 10,000 votes per share.  The ClassSeries B Preferred Stock will havefiled with the rights to liquidation as all classesState of Nevada.

On June 20, 2023, the Common StockBoard of Director and the Company.  The Class B Preferred stockholders are entitled to receive non-cumulative dividends at the rate of 8% per annum, and are accrued daily.  The Class B Preferred Stock shall be redeemed by the Corporation for 100% of the original purchase price plus the amount of cash dividends accrued on the earlier of 6 months from the date of issuance, or the date that the Corporation received its funding from any outside source in conjunction with a merger, reverse merger or any change of control.  In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the holders of the Class B Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any assets of the Corporation to the holders of the Common Stock, the amount of $.035 per share plus any and all accrued but unpaid dividends.

During the fourth quarter, 2011, 200,000 sharesoutstanding shareholders of the Series B Preferred Stock were issuedconsented to amend and restate the Certificate of Designation for the Series B Preferred Stock, to (i) reduce the number of authorized preferred stock designated to the Series B Preferred Stock to 400,000 shares, (ii) revise the liquidation preference of the Series B Preferred Stock from a preferred payout to a related partyparity payout in any liquidation with the common stock and Series C Preferred Stock of the Company, and (iii) to change the language with respect to dividends, such that the Series B Preferred Stock shall have no dividend rights except as may be declared by the Board in its sole and absolute discretion, out of funds legally available for reimbursementthat purpose.

Series C Preferred Stock

On April 26, 2023, the Board of $7,500Directors created, out of legalthe available shares of preferred stock, par value $0.001 per share, a series of preferred stock known as “Series C Preferred Stock” consisting of 100,000 shares.

Under the terms of the Certificate of Designation for the Series C Preferred Stock, the shares shall not accrue nor pay dividends except as declared by the board of directors in its sole discretion. The Series C Preferred Stock shall rank pari passu with the Series B Preferred Stock and accounting fees paid on behalfcommon stock in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company.

The outstanding shares of Series C Preferred Stock shall automatically convert into shares of our common stock upon the following to occur:

In the event that the Company goes through a “Change of Control” event, the foregoing milestone achievements above shall be deemed accomplished and all rights to the shares of Common Stock shall immediately vest prior to the close of such Change of Control event.

Series D Preferred Stock

On June 20, 2023, the Board of Directors created, out of the available shares of preferred stock, par value $0.001 per share, a series of preferred stock known as “Series D Preferred Stock” consisting of 100,000 shares.

Under the terms of the Certificate of Designation for the Series D Preferred Stock, the shares shall not accrue nor pay dividends except as declared by the board of directors in its sole discretion. The Series D Preferred Stock shall not have voting rights except as it pertains to altering the rights associated with the Series D Preferred Stock. The Series D Preferred Stock shall have a stated value of $50 per share (the “Stated Value”) and each share shall be entitled to a preference over the common stock, the Series B Preferred Stock, and the Series C Preferred Stock of the Stated Value upon the liquidation, dissolution and winding up of the Company. Each share of Series D Preferred Stock shall be convertible, at any time after three years of issuance or immediately in the event of a change in control at the option of the Holder thereof, into that number of shares of common stock (subject to a beneficial ownership limitation of up to 9.99%) determined by dividing the Stated Value by the Conversion Price, which is closing price of the common stock of the Company on the OTC, on the day immediately prior to the conversion. The Company has the right to redeem the Series D Preferred Stock after five years by making a payment of cash equal to 106% of the sum of an amount equal to the total number of Series D Preferred Stock held by the Holder multiplied by the Stated Value. In the event of a change in control, the company shall redeem the outstanding shares of Series D Preferred Stock by making a payment in cash using the same formula.

Common Stock

As of SeptemberJune 30, 20172023, and December 31, 2016,2022, the Company had 18,738,8771,875,685,127 and 19,209,1611,557,397,662 shares of its $0.001 par value common stock issued and outstanding, respectively. In addition, as of September 30, 2017, and December 31, 2016, the Company had 1,451,666 and 871,666 shares of common stock issuable, respectively.

In February 2016,

During the six months ended June 30, 2023, the Company issued 50,000common shares of its common stock at a value of $1.00 per share for $50,000 to a board director for payment of services.

In March 2016, the Company issued 250,000 shares of its common stock at a value of $1.00 per share for $250,000 in payment for consulting services.  In addition, the Company granted a warrant to the consultant to purchase 250,000 shares of common stock at $0.50 per share for a period of two years.  The fair value of these warrants at the time they were granted was approximately $170,000 and was calculated using the Black-Scholes-Merton model. During the nine months ended September 30, 2017, and 2016, $0 and $56,658 was expensed, respectively.

The following assumptions were used for the warrants granted in March 2016 are as follows:

The following table summarizes information relating to outstanding and exercisable stock warrants as of September 30, 2017:

In March 2016, the Company issued 50,000 shares of its common stock at a value of $1.00 per share for $50,000 as payment for consulting services.

In the nine month period ended September 30, 2016, the Company issued 200,000 shares of its common stock at a value of $1.00 per share, in conjunction with the extension of the maturity date of the $100,000 note.  $150,000 was amortized as of September 2016, and $50,000 is being amortized for the period ended August 31, 2017. The unamortized portion as of September 30, 2017 and December 31, 2016 was $0 and $21,622, respectively. Amortization expense for the nine months ended September 30, 2017, and 2016, was $21,622 and $18,919, respectively.

In March 2016, the Company issued 884,001 shares of its common stock at approximately $0.25 per share amounting to $250,000 to two individuals for monies received in 2015 from subscription agreements that were entered into with the Company in 2015.  115,100 shares remain issuable related to these subscription agreements as of September 30, 2017.

During the ninesix months ended SeptemberJune 30, 2017,2022, the Company issued 29,716 common stock valued at $.30 per share for $8,885had no issuance of consulting services.shares.

On February 14, 2017, the Chief Technical Officer resigned. On June 8, 2017, the Company authorized the cancellation of 500,000 shares held by the Chief Technical Officer. As of September 30, 2017 the shares were voluntarily returned, and were cancelled by the Company in August 2017.Stock Options

Stock OptionsNo stock options were issued during the six months ended June 30, 2023, and 2022. All stock options issued previous to 2021 were either exercised or expired.

In the nine months ended September 30, 2017 the Company granted 2,650,000 options to consultants, employees and management. One hundred thousand of those options had an exercise price of $.0001, and 250,000 options at an exercise price of $0.01 vested immediately and were valued at the fair value of the Company’s stock at the measurement date less the exercise price. The value of the options was $151,490 and recorded as stock based compensation. The other 2,300,000 of options vested immediately and the fair value of these options were calculated using the Black-Scholes-Merton model. The stock compensation expense related to these options for the nine months ended September 30, 2017 was $341,327.

The following assumptions were used for the options granted in the period ended September 30, 2017 are as follows:

NOTE 4 – NOTES PAYABLE

Unsecured Notes Payable

On November 25, 2014, the Company issued an unsecured promissory note to an individual in the amount of $100,000 at 10% interest and due on April 1, 2015. On April 1, 2016, the Company entered into a forbearance agreement. The Company was granted an extension of the note through September 30, 2016, in consideration of 150,000 shares of common stock valued at $150,000 with interest accruing after March 29, 2016, at 12%. The lender was issued an additional 50,000 shares valued at $50,000 to extend the note to August 31, 2017. The note and accrued interest was $131,333 and $122,333 as of September 30, 2017, andDuring the year ended December 31, 2016.2019, the Company made a $15,000 repayment. The initial extension fee was amortized ratably over the extension period of 180 days.

The subsequent extension fee is amortized over the periodunsecured note and accrued interest were $306,303 as of the extension. During the nine months ended SeptemberJune 30, 2017,2023 and September 30, 2016, the amortization expense on the extension fees were $21,622, and $50,000, respectively.$250,464 as of December 31, 2022. The note remains unpaid as of September 30, 2017 and is currently in default.

Convertible Notes Payable

As of June 30, 2023, and December 31, 2022, convertible notes outstanding are $1,022,359 and $1,243,243 respectively.

The following table summarizes the convertible notes included in the balance sheet on June 30, 2023 and December 31, 2022:

NOTE 5 – DERIVATIVE LIABILITIES

The Company analyzed the conversion option for derivative accounting consideration under ASC 815, "Derivatives and Hedging," and determined that the convertible notes should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The Company accounts for convertible notes and warrants as a derivative liability due to there being no explicit limit to the number of shares to be delivered upon settlement of all conversion options.

The following table summarizes the derivative liabilities included in the balance sheet at June 30, 2023:

Fair Value Measurements Using Significant Observable Inputs (Level 3)

NOTE 6 – RELATED PARTY TRANSACTIONS

During the yearsix months that ended June 30, 2023, and 2022, net cash proceeds of $33,388 and $33,439, respectively, were received from related parties for operating expenses. Advances from related parties accumulated balances as of June 30, 2023, and December 31, 2016, the Company received two separate payments of $12,500, totaling $25,000, as secured notes. The notes are non-interest bearing,2022, were $417,054 and have no terms of repayment. The balance of the notes was $25,000 as of September 30, 2017.$383,686, respectively.

Promissory Notes Payable – related party

On December 12, 2016,June 18, 2019, the Company issued an unsecureda promissory note to an investor.at a principal amount of $447,150 as part of the consideration for the acquisition of assets from AH Originals, Inc., a corporation controlled by the same owner group of Authentic Holdings Inc., formerly Global Fiber Technologies, Inc. The promissory note bears 3% interest at 5%per annum and matured on June 30, 2017. As of December 31, 2016, payments fromhas a one-year term with eight options to extend the investor are $2,200. On January 11, 2017 the investor loaned an additional $5,000 related to the promissory note. The balance of this note plus accrued interest totals $7,468 as of September 30, 2017. The notes are currently unpaid and in default.maturity date for six-month periods.

On March 14, 2017, the Company issued an unsecured promissory note to an investor in the amount of $5,000. The note bears interest at 4% and matures on March 14, 2018. The balance of this note plus interest totals $5,109 as of September 30, 2017.

Convertible Notes Payable – related party

In August 2015, Thethe Company issued an unsecured promissory note to an investor in the amount of $50,000, convertible to common stock at $1.00 per share. The note bears an interest rate of 8% per annum and matured on August 8, 2016. The note is currently unpaid and in default. The note was also issued with a warrant for this investor to purchase 25,000 shares of common stock at $1.50 for a period of 2 years.  The fair value of these warrants was approximately $3,909 as of December 31, 2016 and was calculated using the Black-Scholes-Merton model. The note does not contain a beneficial conversion feature. The balanceAs of thisJune 30, 2023 the note plus accruedhave an accumulated interest totals were $58,500 and $55,500 at September 30, 2017 and December 31, 2016, respectively.of $32,568.

NOTE 5 – DISCONTINUED OPERATIONS

During 2014, the Company's Leading Edge Fashions, LLC retail businesses, of which it owned 51%, was classified as discontinued operations.  Based on the Company's strategy to allocate resources to its businesses relative to their growth potential and those with the greater right to win in the marketplace, the Company determined that this business did not align with the Company's long-term growth plans.

As of September 30, 2017, and December 31, 2016 current liabilities from discontinued operations includes $84,281 accounts payable. In July 2016, a loan payable from discontinued operations was converted to common stock, which resulted in a gain on the extinguishment of debt related to discontinued operations in the amount of $635,764.

NOTE 6 – RELATED PARTY TRANSACTIONS

During the nine months ended September 30, 2017, the Company repaid advances from related parties in the amount of $23,479. The President of the Company was owed $15,569 and $39,048 at September 30, 2017 and December 31, 2016, respectively. Related Party Loans

During 2016, the Company received loans from the CEO and a member of the board of directors totaling $284,900. In the nine monthsyear ended September 30,December 31, 2017, the Company received additional loans from these individuals in the amount of $160,650. The loans bear interest at 5% per annum and matured on June 30, 2017, and September 30, 2017. During the nine monthsyear ended September 30,December 31, 2017, $237,400$241,059 of the notes and interest was converted at approximately $0.40$0.19 for 580,000 common shares. The conversion of debt resulted in a gain on extinguishment of debt in the amount of $130,859. $130,859 in the year ended December 31, 2017.

Balances of all loans due to related parties as of June 30, 2023:

NOTE 7 – LEASES

The balanceCompany’s right-of-use assets under the operating lease for an office premise had expired on October 1 and the lease was not renewed. There are no lease liabilities balances as of these loans plusJune 30, 2023.

The company currently does not have any long-term operating lease. Our operating lease expenses of $0 for the six months ended June 30, 2023 and $1,601 for the year ended December 31, 2022.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

The Company is a party to six pending litigation matters. The Company does not believe it has any liability, nor has it accrued interest was $221,279 and $289,741 at Septemberany liability as of June 30, 20172023 and December 31, 2016, respectively.2022, for the following:

One matter is entitled Randazzo LLC v. Avani Holdings LLC & Global Fashion Technologies, Inc. The plaintiff initiated this litigation to evict Avani Holdings LLC from its rented premises in California and to recover unpaid rent. The Company does not operate outside the premises and has never signed any leases or other documents with the plaintiff. A judgment of eviction was entered, but the Company does not operate out of the premises in question and therefore did not appear in the matter to oppose the judgment of eviction. The plaintiff is also seeking unpaid rent in the amount of $26,595

The second matter is entitled Patricia Witthuhn v. Global Fashion Technologies, Inc. The plaintiff initiated this litigation to collect wages allegedly due pursuant to her employment with Avani Holdings LLC. The Company never hired Ms. Witthuhn and never acquired Avani Holdings, LLC. Consequently, there is no legitimate cause of action against the Company. However, the Company cannot hire outside counsel for this litigation due to cash flow constraints. The amount being sought by the plaintiff is approximately $15,000.

The third matter is entitled William Corso v. Global Fashion Technologies, Inc. The plaintiff initiated this litigation to collect wages allegedly due pursuant to his employment with Avani Holdings LLC. The Company never hired Mr. Corso and never acquired Avani Holdings, LLC. Consequently, there is no legitimate cause of action against the Company. However, the Company cannot hire outside counsel for this litigation due to cash flow constraints. The amount being sought by the plaintiff is approximately $40,000.

NOTE 9 – NET LOSS PER SHARE

Potentially dilutive securities are excluded from the calculation of net loss per share when their effect would be anti-dilutive. For all periods presented in the consolidated financial statements, all potentially dilutive securities have been excluded from the diluted share calculations as they were anti-dilutive as a result of the net losses incurred for the respective periods. Accordingly, basic shares equal diluted shares for all periods presented.

Potentially dilutive securities were comprised of the following:

NOTE 10 – SUBSEQUENT EVENTS

Subsequent to the reporting period, the Company issued 102,402,799 shares for conversion of notes valued at $61,441. 

The Company had evaluated subsequent events for recognition and disclosure as of August 21, 2023, when the financial statements were available to be issued. No other matters were identified affecting the accompanying financial statements and related disclosures.