UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒
Table of Contents Cruzani, Inc. and Subsidiaries The accompanying notes are an integral part of these unaudited condensed consolidated financial statements Cruzani Inc. and Subsidiaries Cruzani, Inc. and Subsidiaries On acquisition: The Company’s derivative liability and warrants are measured at fair value. The Company’s derivative instruments and warrants are valued using Level 3 fair value inputs. The Company does not have any other financial instruments which require re-measurement to fair value. The carrying 2021, respectively: CASH AND CASH EQUIVALENTS September 30, 2021 December 31, 2020 2021: 31-Aug-22 The following table shows the assumptions used in the Results of Operations Other Income (Expense) The Company had a net loss of SeptemberJune 30, 20212022or☐ Nevada
of incorporation)
Identification No.)211 Greenwood Avenue, 2-2, Unit 129, Bethel CT 06801(646) 893-1112☐ ☒PinkOther November 2021,7,766,206,5249,899,574,600 shares of Common Stock, par value $0.00001$0.0001 per shares outstanding.71
2022
2021 0 0 September 30,
2021 December 31,
2020 (Unaudited) ASSETS Cash and cash equivalents $ 5,778 $ - Total Assets $ 5,778 $ - LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current Liabilities: Accounts payable $ 326,400 $ 326,400 Accrued liabilities 920,204 1,150,820 Accrued officer compensation 382,000 292,000 Convertible Notes, net of discounts of $-0- and $77,004, respectively 848,100 1,391,432 Derivative liabilities - 2,140,159 Put premium on stock settled debt 263,821 - Loans payable 254,500 254,500 Total Current Liabilities 2,995,025 5,555,311 Total Liabilities 2,995,025 5,555,311 Commitments and Contingencies (Note 12) - - STOCKHOLDERS’ DEFICIT: Series A Preferred stock, 3,500,000 shares authorized, par value $0.01; 3,381,520 shares issued and outstanding 33,815 33,815 Series B Preferred stock, 10,000 shares authorized, par value $0.01; 5,000 shares issued and outstanding 50 50 Series C Preferred stock, 10,000,000 shares authorized, par value $0.01; 5,000,000 shares issued and outstanding 50,000 50,000 Series D Preferred stock, 125,000 shares authorized, par value $0.0001; 125,000 shares issued and outstanding 12 12 Series E Preferred stock, 500,000 shares authorized, par value $0.01; - and 34,985 shares issued and outstanding; respectively - 34,985 Series E Preferred stock to be issued 166,331 166,331 Common stock 10,000,000 shares authorized, $0.00001 par value; 5,906,130,230 and 1,339,044,282 shares issued and outstanding, respectively at September 30, 2021 and December 31, 2020 59,061 13,390 Treasury stock, at cost – 2,917 shares (773,500 ) (773,500 ) Additional paid in capital 80,201,667 76,679,297 Accumulated deficit (82,726,683 ) (81,759,691 ) Total Stockholders’ Deficit (2,989,247 ) (5,555,311 ) Total Liabilities and Stockholders’ Deficit $ 5,778 $ - 2
Months Ended
Months
Ended
Months Ended
Months
Ended
2022
2021
2022
2021 (Unaudited) For the Three Months Ended
September 30, 2021 2020 Operating Expenses: Compensation expense 30,000 30,000 Consulting fees 75,000 75,000 General and administrative expenses 19,312 10,500 Professional fees - 19,025 Total operating expenses 124,312 134,525 Loss from operations (124,312 ) (134,525 ) Other Income (Expense): Interest expense (369,331 ) (121,276 ) Change in fair value of derivatives - (87,556 ) Total other income (expense) (369,331 ) (208,832 ) Income (loss) before provision for income taxes (493,643 ) (343,357 ) Provision for income taxes - - Net Income (Loss) $ (493,643 ) $ (343,357 ) Basic income (loss) per share $ (0.00 ) $ (0.00 ) Basic weighted average shares outstanding 5,148,149,881 437,343,152 3 Super Series B Series G Series E Preferred Preferred Stock Preferred Stock Preferred Stock Stock to be issued Common Stock Common Stock Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount to be Issued Treasury
Stock Accumulated
Deficit Total Balance December 31, 2021 652,259 652 500 1 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 18,150,000 18,150 0— 3,802,391 0— (4,663,488 ) (842,294 ) — Net loss — — — — — — — — — — — — — — — — — — — — — — — (64,062 ) (64,062 ) Balance, March 31, 2022 652,259 652 500 1 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 18,150,000 18,150 0— 3,802,391 0— (4,727,550 ) (906,356 ) Recapitalization at reverse merger - May 4, 2022 (652,259 ) (652 ) (500 ) (1 ) 3,381,520 33,815 5,000 50 5,000,000 50,000 125,000 12 101 0 1,000,000 1,000 0— 166,331 8,936,864,497 71,400 26 (2,630,899 ) (773,500 ) — (3,082,418 ) Warrants issued — — — — — — — — — — — — — — — — — — — — — 306,220 306,220 Shares issued for extinguishment of convertible debt — — — — — — — — — — — — — — — — — — 6,673,960,315 66,740 — 532,379 — — 599,119 Net loss — — — — — — — — — — — — — — — — — — — — — — — (286,994 ) (286,994 ) Balance, June 30, 2022 — — — — 3,381,520 33,815 5,000 50 5,000,000 50,000 125,000 12 101 0 1,000,000 1,000 0— 166,331 15,628,974,812 156,290 26 2,010,091 (773,500 ) (5,014,544 ) (3,370,429 ) Condensed 4 OperationsChanges in Stockholders’ Deficit Series E Preferred Stock to be issued Common Stock Additional
Paid-In Treasury Accumulated Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Capital Capital Stock Deficit Total Balance December 31, 2020 652,259 652 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 18,150,000 18,150 3,802,342 3,802,342 0— (4,397,571 ) (576,427 ) Net loss — — — — — — — — — — — — — — — — — — — — — — — (137,155 ) (137,155 ) Balance, March 31, 2021 652,259 652 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 18,150,000 18,150 3,802,342 3,802,342 0— (4,534,726 ) (713,582 ) Net loss — — — — — — — — — — — — — — — — — — — — — — — (118,307 ) Balance, June 30, 2021 652,259 652 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 0— 18,150,000 18,150 3,802,342 3,802,342 0— (4,653,033 ) (713,582 ) (Unaudited)5 For the Nine Months Ended
September 30, 2021 2020 Operating Expenses: Compensation expense 90,000 90,000 Consulting fees 225,000 150,000 General and administrative expenses 27,522 14,500 Professional fees 39,000 30,125 Total operating expenses 381,522 284,625 Loss from operations (381,522 ) (284,625 ) Other Income (Expense): Interest expense (573,724 ) (338,643 ) Change in fair value of derivatives (741,027 ) (182,725 ) Loss on debt litigation (266,412 ) Gain on new methodology for accounting for debt conversion features 995,692 - Total other income (expense) (585,471 ) (521,368 ) Loss before provision for income taxes (716,993 ) (805,993 ) Provision for income taxes - - Net Income (Loss) $ (966,993 ) $ (805,993 ) Basic income (loss) per share $ (0.00 ) $ (0.00 ) Basic weighted average shares outstanding 4,428,601,331 310,698,700
Ended
June 30, 6 Consolidated Statement of Changes in Stockholders’ DeficitFor the Three Months Ended September 30, 2021(Unaudited) Series A Series B Series C Series D Series E Series E Preferred Additional Preferred Stock Preferred Stock Preferred Stock Preferred Stock Preferred Stock Stock to be issued Common Stock Paid-In Treasury Accumulated Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Capital Stock Deficit Total Balance December 31, 2020 3,381,520 $ 33,815 5,000 $ 50 5,000,000 $ 50,000 125,000 $ 12 34,985 $ 34,985 - $ 166,331 1,339,044,281 $ 13,390 $ 76,679,297 $ (773,500 ) $ (81,759,691 ) $ (5,555,311 ) Shares issued for extinguishment of convertible debt - - - - - - - - 1,042,231,035 10,422 1,092,823 - - 1,103,246 Shares issued for extinguishment of Convertible Preferred stock (20,370 ) (20,370 ) 49,871,795 499 19,871 - - - Net loss - - - - - - - - - - - - - - - - (1,195,836 ) (1,195,836 ) Balance March 31, 2021 3,381,520 $ 33,815 5,000 $ 50 5,000,000 $ 50,000 125,000 $ 12 14,615 $ 14,615 - $ 166,331 2,431,147,111 $ 24,311 $ 77,791,992 $ (773,500 ) $ (82,955,527 ) $ (5,647,901 ) Shares issued for extinguishment of convertible debt - - - - - - - - 1,231,213,640 12,312 1,163,128 - - 1,175,440 Shares issued for extinguishment of Convertible Preferred stock (14,615 ) (14,615 ) 39,371,795 394 15,246 - - 1,025 Net loss - - - - - - - - - - - - - - - - 722,486 722,486 Balance, June 30, 2021 3,381,520 $ 33,815 5,000 $ 50 5,000,000 $ 50,000 125,000 $ 12 - - - $ 166,331 3,701,732,545 $ 37,017 $ 78,970,365 $ (773,500 ) $ (82,233,040 ) $ (3,748,949 ) Shares issued for extinguishment of convertible debt - - - - - - - - - - - - 2,204,397,685 22,044 1,231,302 - - 1,253,346 Net loss - - - - - - - - - - - - - - - - (493,643 ) (493,643 ) Balance September 30, 2021 3,381,520 $ 33,815 5,000 $ 50 5,000,000 $ 50,000 125,000 $ 12 - $ - - $ 166,331 5,906,130,230 $ 59,061 $ 80,201,667 $ (773,500 ) $ (82,726,683 ) $ (2,989,247 ) Cruzani Inc. and SubsidiariesConsolidated Statement of Changes in Stockholders’ DeficitFor the Nine months Ended September 30, 2020(Unaudited) Series A Series B Series C Series D Series E Series E Preferred Additional Preferred Stock Preferred Stock Preferred Stock Preferred Stock Preferred Stock Stock to be issued Common Stock Paid-In Treasury Accumulated Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Capital Stock Deficit Total Balance December 31, 2019 3,381,520 $ 33,815 5,000 $ 50 5,000,000 $ 50,000 125,000 $ 12 34,985 $ 34,985 $ 166,331 297,041,945 $ 2,970 $ 75,958,049 $ (773,500 ) $ (79,575,663 ) $ (4,102,950 ) Net loss - - - - - - - - - - - - - - - - (130,188 ) (130,188 ) Balance March 31, 2020 3,381,520 33,815 5,000 50 5,000,000 50,000 125,000 12 34,985 34,985 - 166,331 297,041,945 2,970 75,958,049 (773,500 ) (79,705,850 ) (4,233,138 ) Shares issued for extinguishment of convertible debt - - - - - - - - 73,343,869 733 31,998 - - 32,731 Net loss - - - - - - - - - - - - - - - - (332,448 ) (332,448 ) Balance, June 30, 2020 3,381,520 $ 33,815 5,000 $ 50 5,000,000 $ 50,000 125,000 $ 12 34,985 $ 34,985 - $ 166,331 370,385,814 $ 3,704 $ 75,990,047 $ (773,500 ) $ (80,038,298 ) $ (4,532,854 ) Shares issued for extinguishment of debt and accrued interest - - - - - - - - - - - - 205,217,291 2,052 148,119 - - 150,172 Net loss - - - - - - - - - - - - - - - - (343,357 ) (343,357 ) Balance September 30, 2020 3,381,520 $ 33,815 5,000 $ 50 5,000,000 $ 50,000 125,000 $ 12 34,985 $ 34,985 - $ 166,331 575,603,105 $ 5,756 $ 76,138,167 $ (773,500 ) $ (80,381,656 ) $ (4,726,040 ) Cruzani, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited) For the Nine Months Ended
September 30, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ (966,993 ) $ (805,993 ) Adjustments to reconcile net income to net cash used in operating activities: Change in fair value of derivatives 741,027 182,725 Gain on new methodology for accounting for debt conversion features (995,692 ) - Consulting notes 225,000 150,000 Expenses incurred on extinguishment of convertible debt and accrued interest 11,300 7,025 Loss on legal settlement 266,412 - Debt discount amortization 100,358 79,837 Loss on receivables - (316,400 ) Debt discount elimination 70,789 - Put premium incurred on stock settled debt 32,143 - Reconciliation of debt balances (4,000 ) - Changes in Operating Assets and Liabilities: Accounts payable and accrued liabilities 374,434 258,806 Accrued officer compensation 90,000 90,000 Net Cash Used in Operating Activities (55,222 ) (37,600 ) CASH FLOWS FROM INVESTING ACTIVITIES: Net Cash Provided by Investing Activities - - CASH FLOWS FROM FINANCING ACTIVITIES: Notes issued for cash 61,000 37,600 Net Cash Provided by Financing Activities 61,000 37,600 Net Increase (Decrease) in Cash 5,778 - Cash at Beginning of Period - - Cash at End of Period $ 5,778 $ - Cash paid during the period for: Interest $ - $ - Income taxes $ - $ - Supplemental disclosure of non-cash activity: Common stock issued for extinguishment of debt and accrued interest $ 1,784,074 $ 32,732 Common stock issued for extinguishment of Preferred stock $ 34,985 $ - The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.Cruzani, Inc. and SubsidiariesNotesotes to Unaudited Consolidated Condensed Financial StatementsSeptember20212022June 29, 2018, the Company filed Amended and Restated Articles of Incorporation with the State of Nevada to change its name to Cruzani, Inc.On June 30, 2018, Supreme Sweets Acquisition Corp. (n/k/a Oventa, Inc.), a subsidiary of the Company, and the Company (collectively, the “Company”) entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Supreme Sweets Inc. and 2498411 Ontario, Inc., as sellers (collectively, the “Seller”), pursuant to which in exchange for CAD $200,000 and a twenty percent (20%) interest in Oventa, Inc., the Company agreed to acquire the trade secret assets of Seller upon the terms and subject to the conditions set forth in the Asset Purchase Agreement. A second closing occurred on July 31, 2018, pursuant to whichMay 4, 2022, the Company acquired Bowmo, Inc. (“Bowmo”), a privately held Delaware corporation formed in 2016. Upon completion of the furniture, fixturesacquisition, Bowmo is treated as the surviving entity and equipment of Seller in exchange for CAD $100,000. Seller is engaged in the business of preparing delicious snacks, pastries and baked goods with high quality ingredients for exceptional taste, including low calorie and gluten-free alternatives. The Asset Purchase Agreement included a provision, pursuant to whichaccounting acquirer although the Company could unwindwas the transaction if certain milestones were not achieved. The milestones contemplated inlegal acquirer. Accordingly, the Asset Purchase Agreement were not met,Company’s historical financial statements are those of Bowmo.accordingly, on February 7, 2019, effective as of December 31, 2018, the Company terminated the Asset Purchase Agreement with Supreme Sweets Inc. and 2498411 Ontario, Inc, by written notice to the Seller, and the Company unwound the transaction. The $339,813 of capital injected into Oventa, Inc was written off as uncollectable by September 30, 2021.September 27, 2018,May 4, 2022, the Company entered into a stock purchasemerger agreement (the “Stock Purchase“Merger Agreement”) with Sandrea Gibson, as sellerBowmo and Bowmo Merger Sub, Inc. to acquire Bowmo (the “Seller”“Acquisition”), and Recipe Food Co., as. The transactions contemplated by the target (the “Target”),Merger Agreement were consummated on May 4, 2022 and, pursuant to which in exchange for up to CAD $237,000, the Company agreed to acquire 80%terms of the issued andMerger Agreement, all outstanding stockshares of Bowmo will be exchanged for shares of the Target fromCompany’s common stock and Bowmo became the Seller upon the terms and subjectCompany’s wholly owned subsidiary.conditions set forth inMerger Agreement. The Merger is being accounted for as a reverse merger whereby Bowmo is the Stock Purchase Agreement. There were difficulties integratingacquirer for accounting purposes. Bowmo is considered the Target intoacquiring company for accounting purposes as upon completion of the Company group, which forced the Company to cease injecting additional capital into the Target and recognizeMerger, Bowmo’s former stockholders held a loss of $102,552 for amounts that had already been loaned to the Target.On July 8, 2019, Mr. Dickson entered into a Securities Purchase Agreement (“Purchase Agreement”) with Conrad Huss to sell 5,000,000 shares of Series C Preferred and 5,000 shares of Series B preferred Stock held by Mr. Dickson. As a result, Mr. Huss acquired the right to vote 99.06 %majority of the voting controlinterest of the Company. Thecombined company.BG Preferred Stock is also convertible into common stock which, inholding the aggregate, would represent upvoting rights to .01%78% of the outstanding common stock aftertotal voting equity securities to Bowmo’s stockholders.conversion. The Series B Preferred Stock is also convertible into common stock which, in the aggregate, would represent up to 99.05%allocation of purchase price of the outstanding common stock after the conversion. 7 On July 8, 2019, Everett Dickson, who had been the sole officer of the Company, resigned as an officer of the Company,Conrad Huss was appointed the Interim President and Chief Executive Officer of the Company. Mr. Huss is the sole beneficial owner of 5,000,000 and 5,000 shares of Series B and C Preferred Stocks, respectively. Mr. Dickson also resigned as a director of the Company, effective on July 8th, 2019. Mr. Dickson’s resignation was not the result of any disagreement with the management of the Company.20202021 included on the Company’s Form 10-K. The results of the three and six months ended SeptemberJune 30, 20212022 are not necessarily indicative of the results to be expected for the full year ending December 31, 2021.SeptemberJune 30, 20212022 and the results of operations and cash flows presented herein have been included in the financial statements. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results of operations for the full year.8 9 ReclassificationsCertain reclassifications have been madeprior year financial information to conform to the presentation used in the financial statements for the ninethree months ended SeptemberJune 30, 2021. There is no effect on2022, two customers accounted for more than 10% of revenue, at 83% and 11%, for a total of 94%. During the accumulated deficit asthree months ended June 30, 2021, one customer accounted for more than 10% of revenue at 100%.resultsix months ended June 30, 2022, four customers accounted for more than 10% of these reclassifications.Principles of ConsolidationThe accompanying unaudited interim consolidated condensed financial statements include the accounts of the Company. All financial information has been prepared in conformity with accounting principles generally accepted in the United States of America. All significant intercompany transactions and balances have been eliminated.10 amountvalues of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, and loans payable represent fair value based upon their short-term nature.Company’shierarchy is determined based on the lowest level input that is significant to the fair value measurement. The table below summarizes the fair values of our financial assets and liabilities such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s notes payable approximates the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at SeptemberJune 30, 20212022 and December 31, 2020.
June 30,
December 31, 11 82,726,684)5,014,544). The Company’s ability to continue as a going concern depends upon its ability to obtain adequate funding to support its operations through continuing investments of debt and/or equity by qualified investors/creditors, internally generated working capital and monetization of intellectual property assets. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management is currently pursuing a business strategy which includes raising the necessary funds to finance the Company’s development and marketing efforts.12 LOANS PAYABLE
2022
2021The loan payable balances are as follows: Rate Loan 1 1 % $ 27,000 $ 27,000 Loan 2 1 % 3,000 3,000 Loan 3 8 % 64,000 64,000 Loan 4 8 % 160,500 160,500 Total $ 254,500 $ 254,500 Above notes are past due as of the issuance of these financial statements.45 – CONVERTIBLE NOTESSeptemberJune 30, 20212022 and December 31, 2020:
Issued
Rate
Date
2022
2021 13 Date Interest Maturity Creditor Issued Rate Date 30-Sep-21 31-Dec-20 Travel Data Solutions, Inc. 18-Nov-17 10 % 30-Nov-19 $ 100,000 $ 100,000 (1) GW Holdings Group (1 ) (1 ) (1 ) 20,000 60,750 Travel Data Solutions, Inc. 18-Jan-19 10 % 31-Jan-20 25,000 25,000 Oasis Capital, LLC (See Note 5) (2 ) (2 ) (2 ) - 1,020,086 Trillium Partners, LP (3 ) (3 ) (3 ) 154,500 - Livingston Asset Management, LLC 1-Apr-20 10 % 31-Dec-20 25,000 25,000 Livingston Asset Management, LLC 1-May-20 10 % 31-Jan-21 25,000 25,000 Livingston Asset Management, LLC 20-May-20 10 % 20-Feb-21 10,000 10,000 Livingston Asset Management, LLC 1-Jun-20 10 % 10-Mar-21 25,000 25,000 Livingston Asset Management, LLC 11-Jun-20 10 % 01-Feb-21 1,100 1,100 Livingston Asset Management, LLC 1-Jul-20 10 % 31-Mar-21 25,000 25,000 Livingston Asset Management, LLC 20-Jul-20 10 % 20-Apr-21 4,500 4,500 Livingston Asset Management, LLC 1-Aug-20 10 % 30-Apr-21 25,000 25,000 Livingston Asset Management, LLC 14-Aug-20 10 % 14-May-21 9,500 9,500 Livingston Asset Management, LLC 24-Aug-20 10 % 24-May-21 12,500 12,500 Livingston Asset Management, LLC 1-Sep-20 10 % 30-Jun-21 25,000 25,000 Livingston Asset Management, LLC 1-Oct-20 10 % 31-Jul-21 25,000 25,000 Livingston Asset Management, LLC 1-Nov-20 10 % 30-Aug-21 25,000 25,000 Livingston Asset Management, LLC 1-Dec-20 10 % 30-Sep-21 25,000 25,000 Livingston Asset Management, LLC 1-Jan-21 10 % 31-Oct-21 25,000 - Livingston Asset Management, LLC 1-Feb-21 10 % 30-Nov-21 25,000 - Livingston Asset Management, LLC 1-Mar-21 10 % 31-Dec-21 25,000 - Trillium Partners, LP 24-Mar-21 10 % 31-Dec-21 17,000 - Livingston Asset Management, LLC 1-Apr-21 10 % 31-Jan-22 25,000 - Livingston Asset Management, LLC 1-May-21 10 % 28-Feb-22 25,000 - Trillium Partners, LP 25-May-21 12 % 25-May-22 22,000 - Livingston Asset Management, LLC 1-Jun-21 10 % 31-Mar-22 25,000 - Livingston Asset Management, LLC 1-Jul-21 10 % 30-Apr-22 25,000 - Trillium Partners, LP 6-Jul-21 12 % 6-Jul-22 22,000 - Livingston Asset Management, LLC 1-Aug-21 10 % 31-Jul-22 25,000 - Livingston Asset Management, LLC 1-Sep-21 10 % 25,000 - Convertible notes payable-Gross $ 848,100 $ 1,468,436 Less: discount - (77,004 ) Convertible notes payable-net $ 848,100 $ 1,391,432 As 30, 2021, if fully converted,18, 2014, May 29, 2015, July 3, 2015, December 2, 2015, and January 4, 2016, the convertible debt would be convertibleCompany entered into 1,598,841,558 shares of common stock(1) GW Holdings Group Balance after settlement $ 348,548 Conversions (328,548 ) Remaining balance at September 30, 2021 $ 20,000 (2) Oasis Capital, LLC Balance at 12/31/20 $ 1,020,086 Conversions (618,329 ) Transfer from accrued interest 248,243 Total sold to Trillium Partners LP (650,000 ) Remaining balance at September 30, 2021 $ - (3) Trillium Partners, LP Debt purchased from Oasis Capital, LLC $ 650,000 Conversions (495,500 ) Remaining balance at September 30, 2021 $ 154,500 NOTE 5 – CONTINGENCY ARISING INDEBTEDNESS OWED TO OASIS CAPITAL, LLCA contingency arises when there is a situation forunsecured, non-guaranteed, loan agreements pursuant to which the outcome is uncertain,Company received proceeds of $35,000, $4,000, $5,000, $22,000, and which should be resolved in$45,000, respectively. The loans bear interest at 8% per annum compounded annually and are due 1 year after the future, Generally Accepted Accounting Principles require recognitiondate of only those losses thatissuance.probableuncollateralized, and for which a loss amount can be reasonably estimated.The following detailsnatureCompany agreed to the second and third modifications of the contingencyEconomic Injury Disaster Loan (“EIDL” or “Loan 5”). The EIDL was modified to include additional borrowings of $269,200, which were received in full in February 2022. Periodic monthly payments have increased to $1,506. Additionally, the Company entered into an amended security agreement with Oasis Capital LLC (“Oasis”). In the normal course of its business, Oasis files notices to convert (“conversion notices”) a portion of its outstanding ownershipSBA in which this promissory note, and the modifications, is collateralized by certain of the Company’s indebtedness into shares of common stock. As a customary procedure forproperty as specified within the annual audit for the period ended December 31, 2020, the Company’s auditors confirmed its outstanding balanceamended security agreement.14 indebtedness and related accrued interest. During the quarter ended September 30, 2021, Oasis submitted one such conversion which stated that the outstanding indebtedness was far greater than that which was on the Company’s books. The total amount of the increased indebtedness was approximately $1.5 million. After investigation, the Company determined that the difference related to liquidated damages that the Company does not believe that it owes.Since the Company believes that the loss is not probable and no litigation has been pursued at this time, there has been no recognition of this liability on the books and records of the Company.67 – PUT PREMIUM ON STOCK SETTLED DEBTSeptemberJune 30, 2021,2022, the Company decided to adopt ASC 480- ” Distinguishing Liabilities from Equity.” When the enter into convertible notes, some of which contain, predominantly, fixed rate conversion features, whereby the outstanding principal and accrued interest may be converted by the holder, into common shares at a fixed discount to the market price of the common stock at the time of conversion. This results in a fair value of the convertible note being equal to a fixed monetary amount. The Company records the convertible note liability at its fixed monetary amount by measuring and recording a premium, as applicable, on the note date with a charge to interest expense.liabilities (See Note seven).liabilities. Thusly, there was a charge to put premium on stock settled debt and a decrease to derivative liability. On a going-forward basis, all put premiums will be charged to interest expense.15 Balance at December 31, 2020 $ - Add: transfers from derivative liability 1,652,421 Gain on new methodology for accounting for debt conversion features (995,692 ) Balance at June 30, 2021 656,730 Add; put premium on new debt issuances 32,143 Less: put premium on convertible debt extinguished (425,052 ) Balance at September 30, 2021 $ 263,821
Issued
Date
Percentage
stock settled
debt18-Nov-17 30-Nov-19 18-Jan-19 31-Jan-20 7-Jul-20 7-Jul-21 25-May-21 25-May-22 06-Jul-21 06-Jul-22 01-Dec-21 30-Sep-22 01-Jan-22 31-Oct-22 01-Feb-22 30-Nov-22 01-Mar-22 31-Dec-22 01-Apr-22 31-Jan-23 01-May-22 28-Feb-23 01-Jun-22 31-Mar-23 15-Jun-22 15-Jun-23 Date Maturity Discount Put premium on Creditor Issued Date 30-Sep-21 Percentage stock settled debt GW Holdings Group Various Various 20,000 45% $ 16,714 Livingston Asset Management, LLC 1-Apr-20 31-Dec-20 25,000 30 % 10,714 Livingston Asset Management, LLC 1-May-20 31-Jan-21 25,000 30 % 10,714 Livingston Asset Management, LLC 20-May-20 20-Feb-21 10,000 50 % 10,000 Livingston Asset Management, LLC 1-Jun-20 10-Mar-21 25,000 30 % 10,714 Livingston Asset Management, LLC 11-Jun-20 01-Feb-21 1,100 50 % 1,100 Livingston Asset Management, LLC 1-Jul-20 31-Mar-21 25,000 30 % 10,714 Livingston Asset Management, LLC 20-Jul-20 20-Apr-21 4,500 50 % 4,500 Livingston Asset Management, LLC 1-Aug-20 30-Apr-21 25,000 30 % 10,714 Livingston Asset Management, LLC 14-Aug-20 14-May-21 9,500 50 % 9,500 Livingston Asset Management, LLC 24-Aug-20 24-May-21 12,500 50 % 12,500 Livingston Asset Management, LLC 1-Sep-20 30-Jun-21 25,000 30 % 10,714 Livingston Asset Management, LLC 1-Oct-20 31-Jul-21 25,000 30 % 10,714 Livingston Asset Management, LLC 1-Nov-20 30-Aug-21 25,000 30 % 10,714 Livingston Asset Management, LLC 1-Dec-20 30-Sep-21 25,000 30 % 10,714 Livingston Asset Management, LLC 1-Jan-21 31-Oct-21 25,000 30 % 10,714 Livingston Asset Management, LLC 1-Feb-21 30-Nov-21 25,000 30 % 10,714 Livingston Asset Management, LLC 1-Mar-21 31-Dec-21 25,000 30 % 10,714 Livingston Asset Management, LLC 1-Apr-21 31-Jan-22 25,000 30 % 10,714 Livingston Asset Management, LLC 1-May-21 28-Feb-22 25,000 30 % 10,714 Livingston Asset Management, LLC 1-Jun-21 31-Mar-22 25,000 30 % 10,714 Trillium Partners, LP 24-Mar-21 30-Apr-22 17,000 50 % 17,000 Livingston Asset Management, LLC 1-Jul-21 31-May-22 25,000 30 % 10,714 Livingston Asset Management, LLC 1-Aug-21 30-Jun-22 25,000 30 % 10,714 Livingston Asset Management, LLC 1-Sep-21 31-Jul-22 25,000 30 % 10,714 Put premium on stock settled debt $ 263,821 78 – DERIVATIVE LIABILITIES4,5, and its convertible preferred Series E stock. contain conversion features that qualify for embedded derivative classification. The fair value of these liabilities is re-measured at the end of every reporting period and the change in fair value is reported in the statement of operations as a gain or loss on derivative financial instruments.
2021Derivative liability at March 31, 2021 $ 2,140,159 Less; conversions (1,322,907 ) Add: new debt issuances 94,143 Change in fair value of derivative liability 741,027 Transfer to put premium (1,652,421 ) Derivative liability at September 30, 2021 $ - 16
Issued
Retired
Interest 17
warrants
Price
Fair Value calculationscalculations:
Remaining
Contractual Life
Average Exercise
Priceits derivatives: Expected
Volatility Risk-free Interest Rate Expected Dividend Yield Expected Life (in years) At December 31, 2020 251.93 % .62 % 0 % 0.25 – 0.75 NOTE 8 – COMMON STOCKReincorporation in State of WyomingOn June 21, 2021,$0.001, may be converted at the Company received approval from the State of Wyoming to reincorporate in that state and increase its authorized share count to 10,000,000,000.During the six months ended September 30, 2021, the Company issued 4,477,842,359holder’s election into shares of common stock at the conversion rate of one share of common stock for the extinguishmentone share of convertible debt as follows:Creditor Date Shares Principal Accrued interest Fees Total Oasis Capital LLC 14-Jan-21 132,565,384 $ 29,827 $ - $ - $ 29,827 Oasis Capital LLC 27-Jan-21 98,310,546 22,120 100 - 22,220 Oasis Capital LLC 10-Feb-21 155,422,101 41,964 - - 41,964 GW Holdings Group LLC 2-Mar-21 20,203,797 10,000 - - 10,000 Oasis Capital, LLC 8-Mar-21 175,494,746 71,075 - - 71,075 GW Holdings Group LLC 9-Mar-21 3,818,181 2,520 - - 2,520 Trillium Partners LLC 10-Mar-21 86,508,841 - 37,039 1,025 38,064 Trillium Partners LLC 12-Mar-21 86,900,826 42,000 9,550 1,025 52,575 Trillium Partners LLC 19-Mar-21 89,695,455 58,000 174 1,025 59,199 Oasis Capital LLC 19-Mar-21 193,311,158 95,689 - - 95,689 Oasis Capital LLC 6-Apr-21 203,298,776 91,484 - - 91,484 Trillium Partners LLC 12-Apr-21 92,267,673 25,000 24,722 1,025 50,747 Oasis Capital LLC 26-Apr-21 50,000,000 20,250 - - 20,250 Oasis Capital LLC 4-May-21 50,000,000 20,250 - - 20,250 Trillium Partners LLC 29-Apr-21 53,055,556 25,000 238 1,025 26,263 Trillium Partners LLC 5-May-21 80,857,455 - 38,994 1,030 40,024 Oasis Capital LLC 22-Jun-21 296,999,838 106,919 - - 106,919 Trillium Partners LLC 22-Jun-21 229,656,566 100,000 12,650 1,030 113,680 GW Holdings Group Inc 30-Jun-21 175,077,777 63,028 - - 63,028 GW Holdings Group Inc 2-Jul-21 61,666,666 22,200 - - 22,200 Trillium Partners LP 6-Jul-21 348,195,964 86,000 104,478 1,030 191,508 Trillium Partners LP 13-Jul-21 209,870,909 114,000 399 1,030 115,429 GW Holdings Group Inc 14-Jul-21 85,555,555 30,800 - - 30,800 GW Holdings Group Inc 19-Jul-21 187,500,000 60,000 - - 60,000 GW Holdings Group Inc 27-Jul-21 125,000,000 40,000 - - 40,000 Trillium Partners LP 2-Aug-21 349,108,591 45,500 107,078 1,030 153,608 GW Holdings Group Inc 2-Aug-21 187,500,000 60,000 - - 60,000 Oasis Capital, LLC 2-Aug-21 150,000,000 47,250 - - 47,250 GW Holdings Group Inc 2-Aug-21 100,000,000 20,000 - - 20,000 Oasis Capital, LLC 3-Sep-21 150,000,000 33,750 - - 33,750 Oasis Capital, LLC 21-Sep-21 150,000,000 33,750 - - 33,750 GW Holdings Group Inc 23-Sep-21 100,000,000 20,000 - - 20,000 Total 4,477,842,359 $ 1,438,377 $ 335,422 $ 10,275 $ The Company issuedAs of June 30, 2022, and December 31, 2021, there are 0 and 652,759 shares for the extinguishment of Series E PreferredAA and Super preferred stock as follows: Preferred Accrued Recipient of shares Date Shares stock Dividend Fees Total Trillium Partners LLC 25-Mar-21 49,871,795 $ 20,370 $ - $ - $ 20,370 Trillium Partners LLC 6-Apr-21 39,371,795 14,330 - - 14,330 89,243,590 $ 34,700 $ - $ - $ 34,700 NOTE 9 – PREFERRED STOCKSeptemberJune 30, 2021,2022, and December 31, 2020,2021, there are 3,381,520 and 3,381,5200 shares of Series A preferred stock outstanding, respectively.SeptemberJune 30, 2021,2022, and December 31, 2020,2021, there are 5,000 and 5,0000 shares of Series B preferred stock outstanding, respectively.SeptemberJune 30, 2021,2022, and December 31, 2020,2021, there are 5,000,000 and 5,000,0000 shares of Series C preferred stock outstanding, respectively.18 SeptemberJune 30, 2021,2022, and December 31, 2020,2021, there are 125,000 and 125,0000 shares of Series D preferred stock outstanding, respectively., On July 1, 2018, the Company entered into a Stock Purchase Agreement with Device Corp. (“Device”) whereby Device will purchase up to $250,000hares of Series EF$1 per share. Asa period ending 18 months following issuance at the conversion rate that will result, in the aggregate, in the holders of December 31, 2019, the Company has received $166,331 for the purchaseSeries G Preferred Stock receiving that number of shares of Common Stock which equals Seventy Eight Percent (78%) of the Series E. Originally, these purchases were recorded as debt because the Preferredtotal issued and outstanding shares were not issued. Asof commons stock of the Balance sheet datecompany on a fully diluted basis. The Series G Preferred Stock shall vote with the common stock as a single class, has liquidation rights of $0.001 per share and is entitled to receive an annal dividend of 6% of the date of this report, these shares have not been issued to the Purchaser.On January 15, 2019, the Company entered into a Stock Purchase Agreement with Geneva Roth Remark Holdings, Inc. (“Geneva”) whereby Geneva will purchase 53,000EG preferred stock for $53,000.During th4e first quarterissued as of Fiscal 2021, Geneva sold their position to Trillium Partners, LP (“Trillium”) On March 25, 2021, Trillium converted 20,370 shares of Series E preferred stock into 49,871,795 shares of common stock. As of SeptemberJune 30, 2021,2022 and December 31, 2020, there are -0-and 34,985 shares of Series E preferred stock outstanding,2021, respectively.As of September 30, 2021, all classes of convertible preferred stock were convertible into 2,137,148,533 shares of common stock.1012 – RELATED PARTY TRANSACTIONSHuss, the new CEO.Huss. The agreement provides for a salary of $10,000 per month. As of SeptemberJune 30, 2021, $382,0002022, $472,000 has been credited to accrued compensation.NOTE 11 – LOSS ON DEBT LITIGATIONOn February 16, 2021, the Company received notice that a default judgment had been entered against it in the Southern District of New York. The total amount of the judgment was for $348,548. The Company incurred a loss on the settlement as follows: Accrued Date of Note Note Interest Total 17-May-16 $ 24,000 $ 11,106 $ 35,106 16-Mar-18 36,750 10,280 47,030 $ 60,750 $ 21,386 $ 82,136 Total settlement amount $ 348,548 Balance $ 82,136 $ 266,412 NOTE 12 – GAIN ON NEW METHODOLOGY FOR ACCOUNTING FOR DEBT CONVERSION FEATURESThe Company changed its accounting for the methodology for debt conversion features as stated in Note 6- Put premium on stock settled debt. An one-time gain of $955,692 was recorded in regards to the transition.19 On September 21, 2018, Pro Drive Outboards, LLC (“Pro-Drive”) filed a lawsuit against the Company, in which Pro-Drive alleges that the Company breached a contract that Pro-Drive entered into with the Company. Pro-Drive is seeking damages in excess of $500,000. The Company has filed an answer, including the defenses of defective service of process and statute of limitations and a motion to dismiss. The judge granted a motion to dismiss, and the plaintiff’s deadline to appeal has passed, thus concluding the matter. contingent liabilities that should be reflected in the financial statements.SeptemberJune 30, 20212022 and December 31, 2020.NOTE 14 – COVID-19The Company, like all enterprises,currently dealing witha situation for which the impact of COVID-19 on future prospects. Recent events such as the vaccinations mitigate, but do not eliminate, the possible adverse consequences to the domesticoutcome is uncertain, and international economies. Recent increaseswhich should be resolved in the Delta Variantfuture, Generally Accepted Accounting Principles require recognition of COVID-19 have resulted inonly those losses that are probable and for which a loss amount can be reasonably estimated.infectionsthan that which was on the Company’s books. The total amount of the increased indebtedness was approximately $1.6 million. After investigation, the Company determined that the difference related to liquidated damages that the Company does not believe that it owes.its ultimate impact cannot be ascertainedno litigation has been pursued at this time, there has been no recognition of this liability on the books and records of the Company.1514 – IMPACT OF CLIMATE CHANGE1615 – SUBSEQUENT EVENTS20 Issuance of shares of common stockSubsequent to September 30, 2021, the Company issued 1,860,076,291 shares for the extinguishment of $437,750 of principal interest on debt, 77,419 of accrued interest, and $7,210 in fees as follows below: Accrued Creditor Date Shares Principal interest Fees Total Oasis Capital, LLC 01-Oct-21 150,000,000 $ 33,750 $ - $ - $ 33,750 GW Holdings Group Inc 05-Oct-21 100,000,000 32,000 - - 32,000 Oasis Capital, LLC 13-Oct-21 150,000,000 33,750 - - 33,750 Livingston Asset Management LLC 19-Oct-21 87,643,429 25,000 4,645 1,030 30,675 Oasis Capital, LLC 22-Oct-21 150,000,000 33,750 - - 33,750 Livingston Asset Management LLC 26-Oct-21 88,715,857 25,000 5,021 1,030 31,051 Livingston Asset Management LLC 26-Oct-21 87,021,143 25,000 4,427 1,030 30,457 Livingston Asset Management LLC 27-Oct-21 85,995,686 25,000 4,068 1,030 30,098 Livingston Asset Management LLC 27-Oct-21 84,903,714 25,000 3,686 1,030 29,716 Livingston Asset Management LLC 27-Oct-21 83,827,371 25,000 3,310 1,030 29,340 Oasis Capital, LLC 28-Oct-21 200,000,000 - 45,000 - 45,000 Trillium Partners LP 01-Nov-21 591,969,091 154,500 7,261 1,030 162,791 Total 1,860,076,291 $ 437,750 $ 77,419 $ 7,210 $ 522,379 Issuance of Convertible debtPlan of OperationsCruzani is currently evaluating various enterprises for its new business model.SeptemberJune 30, 20212022 Compared to the Three Months Ended SeptemberJune 30, 20202021SeptemberJune 30, 20212022 and June 30, 20202021 was $30,000 due$101 thousand and $103 thousand, respectively, and consists entirely of compensation paid to Chief Executive Officer compensation.officers..ExpenseConsulting expensefees for the three months ended SeptemberJune 30, 2021 and September2022 was $47 thousand, an increase of $47 thousand or 100% from $0 through the three months ended June 30, 2020 was $75,000 and $75,000. A2021. The increase is due to the consulting contract was signed effective April 1, 2020. Foracquired in the Merger on May 4, 2022 with a fee of $25,000 per month, payable in a note, the consultant shall provide accounting and financial statement services, evaluate business acquisition opportunities and help in securing financing.SeptemberJune 30, 20212022 were $19,312$49 thousand compared to $10,500$641 for the three months ended SeptemberJune 30, 2020.2021. The increase was primarily due to payments for SEC filings and to increase the authorized shares outstanding plus greater expenses associated with extinguishment of debtinvestor relations.21 SeptemberJune 30, 20212022 were $-0-$121 thousand, an increase of $121 thousand or 100% compared to $19,025$0 for the three months ended SeptemberJune 30, 2020.2021. The increase in expenses were due to greater accounting, and legal expenses and expenses paid to reincorporate inassociated with the Stateextinguishment of Wyoming.income (expense) of $(369,331)expense for the three months ended SeptemberJune 30, 2021 was entirely for interest expense. Of that amount, $70,789 was for the elimination2022 were $10 thousand, a decrease of discount, no longer needed due$14 thousand or 58% compared to the assignment$24 thousand of put premium; $32,143 was due to put premium on stock settled debt for newly issued consulting notes and $266,399 for interest on outstanding debt. Total expense of $(208,832) for the three months ended SeptemberJune 30, 2020, was comprised2021. The decrease is a result of the gain on new methodology for accounting for debt conversion features, offset by the decrease in interest expense of $97,240, which includes $32,974 of debt discount amortization and a loss on fair value of derivatives of ($87,556).Net Income (Loss)$(493,643)$287 thousand for the three months ended SeptemberJune 30, 2021,2022, as compared to a net loss of ($343,357)$119 thousand for the three months ended SeptemberJune 30, 2020.NineSeptemberJune 30, 20212022 Compared to the NineSix Months Ended SeptemberJune 30, 20202021Expenseninesix months ended SeptemberJune 30, 20212022 and June 30, 20202021 was $60,000$203 thousand and $204 thousand, respectively, and consists entirely of compensation paid to officers..Chief Executive Officer compensation.Consulting ExpenseConsulting expense for the nine months ended September 30, 2021 and September 30, 2020 was $225,000 and $150,000. A consulting contract was signed effective April 1, 2020. Foracquired in the Merger on May 4, 2022 with a fee of $25,000 per month, payable in a note, the consultant shall provide accounting and financial statement services, evaluate business acquisition opportunities and help in securing financing.ninesix months ended SeptemberJune 30, 20212022 were $27,522$55 thousand compared to $14,500$1 thousand for the ninesix months ended SeptemberJune 30, 2020. Expenses incurred were associated with the conversion of debt and preferred stock.2021. The increase was primarily due to payments for SEC filings and to increase the authorized shares outstanding plus greater expenses associated with extinguishment of debtinvestor relations.ninesix months ended SeptemberJune 30, 20212022 were $39,000$131 thousand, an increase of $131 thousand or 100% compared to $30,125$0 for the ninesix months ended SeptemberJune 30, 2020.2021. The increase in expenses were due to greater accounting, and legal expenses and expenses paid to reincorporate inassociated with the Stateextinguishment of Wyoming.debt.income (expense) of ($585,471)expense for the ninesix months ended SeptemberJune 30, 2021 consists2022 were $17 thousand, a decrease of $59 thousand or 58% compared to $24 thousand of expense for the three months ended June 30, 2021. The decrease is a result of the gain on new methodology for accounting for debt conversion features, of $995,692 offset by a)the decrease in interest expense of ($573,724), which includes $100,358 of debt discount amortization and $70,789 of debt discount elimination; b) change in fair values of derivatives of $(741,027), and c) loss on debt litigation of $266,412. (See Note 10 above for more detail) .. Total expense of $(521,368) for the nine months ended September 30, 2020, was comprised of interest expense of $(338,643), which includes $79,837of debt discount amortization and a loss on fair value of derivatives of ($182,725).$(966,993)$351 thousand for the ninethree months ended SeptemberJune 30, 2021,2022, as compared to a net loss of ($805,993)$255 thousand for the ninethree months ended SeptemberJune 30, 2020.2021. The increase in net loss is a result of the explanations above.22 None.None$(82,726,683)$(5,014,544). The Company’s ability to continue as a going concern depends upon its ability to obtain adequate funding to support its operations through continuing investments of debt and/or equity by qualified investors/creditors, internally generated working capital and monetization of intellectual property assets. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management is currently pursuing a business strategy which includes raising the necessary funds to finance the Company’s development and marketing efforts.23 SeptemberJune 30, 2021.2022.1.SeptemberJune 30, 2021.2022. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.2.3.4.24 SeptemberJune 30, 2021,2022, that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.SeptemberJune 30, 20212022 and December 31, 2018.2021. The management is having discussions with respect to the timing and structure of the settlement.September20212022 See Note EightNine above for all unregistered sales of equity during the ninethree and six months ended SeptemberJune 30, 2021.2022.None25 November 19, 2021August 15, 2022Conrad HussConrad HussChief Executive Officer Chairman of the Board
Interim Chief Financial Officer Officer)(Principal Financial, and Accounting Officer)2326 iso4217:USD xbrli:shares