UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2022~~2023

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to __________

Commission File Number: 333-167667

TWO HANDS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		42-1770123
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

~~1035 Queensway East~~373 Joicey Blvd., ~~Mississauga~~North York, Ontario, Canada (Address of Principal Executive Offices)		~~L4Y 4C1~~M5M 2W2 (Zip Code)

(416) 357-0399

(Registrant's telephone number, including area code)

~~N/A~~1035 Queensway East, Mississauga, Ontario, Canada L4Y 4C1

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x	Smaller reporting company	x
Emerging growth company	¨

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 x

Securities registered under Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
N/A	N/A

Securities registered under Section 12(g) of the Act:

Common Stock, $.0001 Par Value

(Title of class)

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of ~~November 14, 2022,~~August 6, 2023, the issuer had ~~132,402,624~~1,030,558,548 shares of its common stock issued and outstanding, par value $0.0001 per share.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report on Form 10-Q contains "forward-looking statements" that involve risks and uncertainties. You should not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described in our Form 10-K filed on ~~March 31, 2022,~~April 3, 2023, and other filings we make with the Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made. We do not intend to update any of the forward-looking statements after the date of this report to conform these statements to actual results or to changes in our expectations, except as required by law.

The following discussion and analysis of financial condition and results of operations is based upon and should be read in conjunction with our audited financial statements and related notes thereto included elsewhere in this report, and in our Form 10-K filed on ~~March 31, 2022.~~April 3, 2023.

TWO HANDS CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2022~~2023

TABLE OF CONTENTS

PART I		PAGE
Item 1.	Financial Statements (Unaudited)	54
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2119
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3230
Item 4.	Controls and Procedures	3230
PART II
Item 1.	Legal Proceedings	3331
Item 1A.	Risk Factors	3331
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3331
Item 3.	Defaults Upon Senior Securities	3331
Item 4.	Mining Safety Disclosures	3331
Item 5.	Other Information	3331
Item 6.	Exhibits	3432
	Signatures	3534

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

TWO HANDS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS


	June 30, 2023			December 31, 2022
ASSETS	(Unaudited)

Current assets
Cash	$	8,615		$	17,137
Accounts receivable, net		113,376			94,182
VAT taxes receivable		3,431			8,157
Inventory		46,713			73,621
Total current assets		172,135			193,097

Property and equipment, net		11,543			13,667
Operating lease right-of-use asset		19,855			23,438

Total assets	$	203,533		$	230,202

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued liabilities	$	407,925		$	555,220
Due to related party		431,855			185,473
Notes payable		113,575			13,443
Line of credit		494,827			—
Deferred revenue		15,792			22,107
Current portion of operating lease right-of-use liability		8,607			8,230
Total current liabilities		1,472,581			784,473
Long-term liabilities
Line of credit		—			293,298
Promissory notes		238,528			229,194
Promissory note - related party		—			84,377
Non-redeemable convertible notes, net		523,038			517,621
Operating lease right-of-use liability, net of current portion		11,248			15,208
Total long-term liabilities		772,814			1,139,698

Total liabilities		2,245,395			1,924,171

Commitments and Contingencies		—			—

Temporary equity
Series A convertible preferred stock; $0.01 par value; 200,000 shares designated, 25,000 shares issued and outstanding, respectively		249,505			249,505
Series B convertible preferred stock; $0.01 par value; 100,000 shares designated, 0 and 11,000 shares issued and outstanding, respectively		—			109,783
Series C convertible preferred stock; $0.001 par value; 150,000 shares designated, 80,000 shares and 90,000 shares issued and outstanding, respectively		2,288,000			2,584,951
Series D convertible preferred stock; $0.001 par value; 200,000 shares designated, 0 shares issued and outstanding, respectively		—			—
Series E convertible preferred stock; $0.0001 par value; 300,000 shares designated, 0 shares issued and outstanding		—			—
Total temporary equity		2,537,505			2,944,239

Stockholder's deficit
Preferred stock; $0.001 par value; 1,000,000 shares authorized, 0 issued and outstanding		—			—
Common stock; $0.0001 par value; 12,000,000,000 shares authorized, 618,958,548 and 137,402,624 shares issued and outstanding, respectively		61,897			13,742
Additional paid-in capital		80,304,216			78,895,425
Common stock to be issued		—			336,000
Accumulated other comprehensive income		11,605			39,141
Accumulated deficit		(84,957,085	)		(83,922,516	)
Total stockholders' deficit		(4,579,367	)		(4,638,208	)

Total liabilities and stockholders' deficit	$	203,533		$	230,202

The accompanying footnotes are an integral part of these unaudited condensed financial statements.

September 30, 2022 December 31, 2021
ASSETS (Unaudited)

Current assets
Cash $ 20,846 $ 533,295
Accounts receivable, net 178,027 163,197
VAT taxes receivable 13,369 24,563
Inventory 78,716 154,848
Prepaid expense 2,443,495 732,945
Total current assets 2,734,453 1,608,848

Property and equipment, net 13,321 6,974
Operating lease right-of-use asset 25,061 33,612

Total assets $ 2,772,835 $ 1,649,434

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued liabilities $ 685,944 $ 498,428
Due to related party 40,715 39,985
Notes payable 6,068 6,103
Deferred revenue 21,774 —
Current portion of operating lease right-of-use liability 8,026 8,482
Total current liabilities 762,527 552,998
Long-term liabilities
Line of credit 73,006 —
Promissory notes 224,528 210,527
Promissory note - related party 81,173 —
Non-redeemable convertible notes, net 492,023 517,717
Operating lease right-of-use liability, net of current portion 17,035 25,130
Total long-term liabilities 887,765 753,374

Total liabilities 1,650,292 1,306,372

Commitments and Contingencies —   —

Temporary equity
Series A convertible preferred stock; $0.01 par value; 200,000 shares designated, 25,000 and 189,500 shares issued and outstanding, respectively 249,505 595,122
Series B convertible preferred stock; $0.01 par value; 100,000 shares designated, 11,000 and 21,000 shares issued and outstanding, respectively 109,783 1,564,100
Series C convertible preferred stock; $0.001 par value; 150,000 shares designated, 90,000 shares and 10,000 shares issued and outstanding, respectively 2,584,951 1,130,952
Series D convertible preferred stock; $0.001 par value; 200,000 shares designated, 0 shares and 40,000 shares issued and outstanding, respectively —   789,006
Total temporary equity 2,944,239 4,079,180

Stockholder's deficit
Preferred stock; $0.001 par value; 1,000,000 shares authorized, 0 issued and outstanding —   —
Common stock; $0.0001 par value; 12,000,000,000 shares authorized, 132,402,624 and 6,000,000 shares issued and outstanding, respectively 13,242 600
Additional paid-in capital 78,776,207 58,151,817
Common stock to be issued 336,000 336,000
Accumulated other comprehensive income 42,798 4,870
Accumulated deficit (80,989,943 ) (62,229,405 )
Total stockholders' deficit (1,821,696 ) (3,736,118 )

Total liabilities and stockholders' deficit $ 2,772,835 $ 1,649,434

The accompanying footnotes are an integral part of these unaudited financial statements.

TWO HANDS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)


		For the three months ended June 30,						For the six months ended June 30,
		2023			2022			2023			2022

Sales	$	197,324		$	190,691		$	372,769		$	389,730
Cost of goods sold		185,108			196,969			345,104			375,494
Gross profit		12,216			(6,278	)		27,665			14,236

Operating expenses
General and administrative		277,327			14,021,263			643,033			14,781,176
Total operating expenses		277,327			14,021,263			643,033			14,781,176

Loss from operations		(265,111	)		(14,027,541	)		(615,368	)		(14,766,940	)

Other income (expense)
Amortization of debt discount and interest expense		(38,774	)		(32,570	)		(76,451	)		(62,768	)
Gain on disposition		50,750			—			50,750			—
Loss on settlement of debt		(275,950	)		(2,287,450	)		(393,500	)		(2,871,450	)
Total other income (expense)		(263,974	)		(2,320,020	)		(419,201	)		(2,934,218	)

Net loss attributed to Two Hands Corporation		(529,085	)		(16,347,561	)		(1,034,569	)		(17,701,158	)

Less: deemed dividend - Series A Stock modification		—			(1,396,721	)		—			(1,396,721	)
Add: deemed contribution - Series B Stock modification		—			1,354,515			—			1,354,515
Add: deemed contribution - Series C Stock modification		—			834,001			—			834,001
Add: deemed contribution - Series D Stock modification		—			749,085			—			749,085

Net loss attributable to Two Hands Corporation common shareholders	$	(529,085	)	$	(14,806,681	)	$	(1,034,569	)	$	(16,160,278	)

Other comprehensive income (loss)
Foreign exchange income		(20,448	)		2,884			(27,536	)		1,701
Total other comprehensive income		(20,448	)		2,884			(27,536	)		1,701

Comprehensive loss	$	(549,533	)	$	(14,803,797	)	$	(1,062,105	)	$	(16,158,577	)

Net loss per common share - basic and diluted	$	(0.00	)	$	(0.18	)	$	(0.00	)	$	(0.36	)

Weighted average number of common shares outstanding - basic and diluted		315,394,461			82,169,404			238,787,933			44,674,229

The accompanying footnotes are an integral part of these unaudited condensed financial statements.

For the three months ended September 30, For the nine months ended September 30,
2022 2021 2022 2021

Sales $ 172,783 $ 241,417 $ 562,513 $ 605,498
Cost of goods sold 159,124 201,609 534,618 527,385
Gross profit 13,659 39,808 27,895 78,113

Operating expenses
General and administrative 304,452 693,259 15,085,628 1,997,004
Total operating expenses 304,452 693,259 15,085,628 1,997,004

Loss from operations (290,793 ) (653,451 ) (15,057,733 ) (1,918,891 )

Other income (expense)
Amortization of debt discount and interest expense (33,287 ) (130,594 ) (96,055 ) (261,560 )
Loss on settlement of debt (735,300 ) (7,360,278 ) (3,606,750 ) (10,817,203 )
Initial derivative expense —   —   —   (126,322 )
Change in fair value of derivative liabilities —   93,626 —   194,750
     Total other income (expense) (768,587 ) (7,397,246 ) (3,702,805 ) (11,010,335 )

Net loss attributable to Two Hands Corporation (1,059,380 ) (8,050,697 ) (18,760,538 ) (12,929,226 )

Less: deemed dividend - Series A Stock modification —   —   (1,396,721 ) —
Add: deemed contribution - Series B Stock modification —   —   1,354,515 —
Add: deemed contribution - Series C Stock modification —   —   834,001 —
Add: deemed contribution - Series D Stock modification —   —   749,085 —

Net loss attributable to Two Hands Corporation common shareholders $ (1,059,380 ) $ (8,050,697 ) $ (17,219,658 ) $ (12,929,226 )

Other comprehensive income (loss)
Foreign exchange income 36,227 —   37,928 —
    Total other comprehensive income 36,227 —   37,928 —

Comprehensive loss $ (1,023,153 ) $ (8,050,697 ) $ (17,181,730 ) $ (12,929,226 )

Net loss per common share - basic and diluted $ (0.01 ) $ (2.68 ) $ (0.24 ) $ (6.97 )

Weighted average number of common shares outstanding - basic and diluted 125,175,444 2,998,955 71,802,843 1,854,661

The accompanying footnotes are an integral part of these unaudited financial statements.

TWO HANDS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

For the three and ~~nine~~six months ended ~~September~~June 30, 2023 and 2022

(Unaudited)

Common Stock Common Stock to be Additional Paid-in Accumulated Other Comprehensive Accumulated Total Stockholders'
Shares Amount Issued Capital Income Deficit Deficit
Balance, June 30, 2022 123,415,558 $ 12,342 $ 336,000 $ 76,235,088 $ 6,571 $ (79,930,563 ) $ (3,340,562 )

Stock issued for conversion of non-redeemable convertible notes 3,000,000 300 —   735,300 —   —   735,600
Stock issued for conversion of Series B Stock 6,000,000 600 —   59,281 —   —   59,881
Cancellation of Series A Stock —   —   —   1,746,538 —   —   1,746,538
Cancellation of common stock (12,934 ) —   —   —   —   —   —
Foreign exchange loss —   —   —   —   36,227 —   36,227
Net loss —   —   —   —   —   (1,059,380 ) (1,059,380 )
Balance, September 30, 2022 132,402,624 $ 13,242 $ 336,000 $ 78,776,207 $ 42,798 $ (80,989,943 ) $ (1,821,696 )

Common Stock Common Stock to be Additional Paid-in Accumulated Other Comprehensive Accumulated Total Stockholders'
Shares Amount Issued Capital Income Deficit Deficit
Balance, December 31, 2021 6,000,000 $ 600 $ 336,000 $ 58,151,817 $ 4,870 $ (62,229,405 ) $ (3,736,118 )

Rounding on reverse split 5,558 1 —   —   —   —   1
Stock issued for conversion of non-redeemable convertible notes 22,410,000 2,241 —   3,707,649 —   —   3,709,890
Stock issued for officer and director compensation 90,000,000 9,000 —   13,491,000 —   —   13,500,000
Stock issued for the conversion of Series B Stock 10,000,000 1,000 —   98,802 —   —   99,802
Stock issued for the conversion of Series D Stock 4,000,000 400 —   39,521 —   —   39,921
Deemed dividend - Series A Stock modification —   —   —   (1,396,721 ) —   —   (1,396,721 )
Deemed contribution - Series B Stock modification —   —   —   1,354,515 —   —   1,354,515
Deemed contribution - Series C Stock modification —   —   —   834,001 —   —   834,001
Deemed contribution - Series D Stock modification —   —   —   749,085 —   —   749,085
Cancellation of Series A Stock —   —   —   1,746,538 —   —   1,746,538
Cancellation of common stock (12,934 ) —   —   —   —   —   —
Foreign exchange loss —   —   —   —   37,928 —   37,928
Net loss —   —   —   —   —   (18,760,538 ) (18,760,538 )
Balance, September 30, 2022 132,402,624 $ 13,242 $ 336,000 $ 78,776,207 $ 42,798 $ (80,989,943 ) $ (1,821,696 )


	Common Stock				Common Stock to be			Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares		Amount		Issued			Capital		Income			Deficit			Deficit
Balance, March 31, 2023	193,226,548	$	19,324	$	336,000		$	79,356,197	$	32,053		$	(84,428,000	)	$	(4,684,426	)

Stock issued for conversion of non-redeemable convertible notes	417,700,000		41,770		—			275,950		—			—			317,720
Stock issued for the conversion of Series B convertible preferred stock	4,000,000		400		—			39,521		—			—			39,921
Stock issued for the conversion of Series Convertible preferred stock	4,000,000		400		—			296,551		—			—			296,951
Stock issued to settle stock to be issued	32,000		3		(336,000	)		335,997		—			—			—
Foreign exchange loss	—		—		—			—		(20,448	)		—			(20,448	)
Net loss	—		—		—			—		—			(529,085	)		(529,085	)
Balance, June 30, 2023	618,958,548	$	61,897	$	—		$	80,304,216	$	11,605		$	(84,957,085	)	$	(4,579,367	)

	Common Stock				Common Stock to be			Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares		Amount		Issued			Capital		Income			Deficit			Deficit
Balance, December 31, 2022	137,402,624	$	13,742	$	336,000		$	78,895,425	$	39,141		$	(83,922,516	)	$	(4,638,208	)

Stock issued for conversion of non-redeemable convertible notes	459,200,000		45,920		—			393,500		—			—			439,420
Stock issued for settlement of debt - related party	7,323,924		732		—			274,061		—			—			274,793
Stock issued for the conversion of Series B convertible preferred stock	11,000,000		1,100		—			108,682		—			—			109,782
Stock issued for the conversion of Series Convertible preferred stock	4,000,000		400		—			296,551		—			—			296,951
Stock issued to settle stock to be issued	32,000		3		(336,000	)		335,997		—			—			—
Foreign exchange loss	—		—		—			—		(27,536	)		—			(27,536	)
Net loss	—		—		—			—		—			(1,034,569	)		(1,034,569	)
Balance, June 30, 2023	618,958,548	$	61,897	$	—		$	80,304,216	$	11,605		$	(84,957,085	)	$	(4,579,367	)

The accompanying footnotes are an integral part of these unaudited condensed financial statements.

TWO HANDS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (CONTINUED)

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2023 and 2022

(Unaudited)

Common Stock Common Stock to be Additional Paid-in Accumulated Other Comprehensive Accumulated Total Stockholders'
Shares Amount Issued Capital Income Deficit Deficit
Balance, June 30, 2021 1,903,793 $ 190 $ 336,000 $ 46,902,968 $ —   $ (50,771,897 ) $ (3,532,739 )

Stock issued for conversion of non-redeemable convertible notes 2,459,980 246 —   7,565,944 —   —   7,566,190
Stock Issued for conversion of convertible notes 83,196 8 —   228,316 —   —   228,324
Stock issued for the conversion of Series C Stock 225,000 23 —   508,905 —   —   508,928
Stock issued for officer and director compensation 30,000 3 —   74,497 —   —   74,500
Net loss —   —   —   —   —   (8,050,697 ) (8,050,697 )
Balance, September 30, 2021 4,701,969 $ 470 $ 336,000 $ 55,280,630 $ —   $ (58,822,594 ) $ (3,205,494 )

Common Stock Common Stock to be Additional Paid-in Accumulated Other Comprehensive Accumulated Total Stockholders'
Shares Amount Issued Capital Income Deficit Deficit
Balance, December 31, 2020 695,576 $ 70 $ 336,000 $ 42,773,378 $ —   $ (45,893,368 ) $ (2,783,920 )

Stock issued for conversion of non-redeemable convertible notes 3,552,025 357 —   11,150,067 —   —   11,150,424
Stock issued for conversion of convertible notes 146,868 15 —   446,435 —   —   446,450
Stock issued for the conversion of Series C Stock 225,000 23 —   508,905 —   —   508,928
Stock issued for consulting 40,500 4 —   290,996 —   —   291,000
Stock issued for officer and director compensation 42,000 1 —   110,849 —   —   110,850
Net loss —   —   —   —   —   (12,929,226 ) (12,929,226 )
Balance, September 30, 2021 4,701,969 $ 470 $ 336,000 $ 55,280,630 $ —   $ (58,822,594 ) $ (3,205,494 )


	Common Stock				Common Stock to be		Additional Paid-in			Accumulated Other Comprehensive		Accumulated			Total Stockholders'
	Shares		Amount		Issued		Capital			Income		Deficit			Deficit
Balance, March 31, 2022	7,015,558	$	702	$	336,000	$	58,836,716		$	3,687	$	(63,583,002	)	$	(4,405,897	)

Stock issued for conversion of non-redeemable convertible notes	18,400,000		1,840		—		2,287,450			—		—			2,289,290
Stock issued for officer and director compensation	90,000,000		9,000		—		13,491,000			—		—			13,500,000
Stock issued for the conversion of Series B Stock	4,000,000		400		—		39,521			—		—			39,921
Stock issued for the conversion of Series D Stock	4,000,000		400		—		39,521			—		—			39,921
Deemed dividend - Series A Stock modification	—		—		—		(1,396,721	)		—		—			(1,396,721	)
Deemed contribution - Series B Stock modification	—		—		—		1,354,515			—		—			1,354,515
Deemed contribution - Series C Stock modification	—		—		—		834,001			—		—			834,001
Deemed contribution - Series D Stock modification	—		—		—		749,085			—		—			749,085
Foreign exchange loss	—		—		—		—			2,884		—			2,884
Net loss	—		—		—		—			—		(16,347,561	)		(16,347,561	)
Balance, June 30, 2022	123,415,558	$	12,342	$	336,000	$	76,235,088		$	6,571	$	(79,930,563	)	$	(3,340,562	)

	Common Stock				Common Stock to be		Additional Paid-in			Accumulated Other Comprehensive		Accumulated			Total Stockholders'
	Shares		Amount		Issued		Capital			Income		Deficit			Deficit
Balance, December 31, 2021	6,000,000	$	600	$	336,000	$	58,151,817		$	4,870	$	(62,229,405	)	$	(3,736,118	)

Rounding on reverse split	5,558		1		—		—			—		—			1
Stock issued for conversion of non-redeemable convertible notes	19,410,000		1,941		—		2,972,349			—		—			2,974,290
Stock issued for officer and director compensation	90,000,000		9,000		—		13,491,000			—		—			13,500,000
Stock issued for the conversion of Series B Stock	4,000,000		400		—		39,521			—		—			39,921
Stock issued for the conversion of Series D Stock	4,000,000		400		—		39,521			—		—			39,921
Deemed dividend - Series A Stock modification	—		—		—		(1,396,721	)		—		—			(1,396,721	)
Deemed contribution - Series B Stock modification	—		—		—		1,354,515			—		—			1,354,515
Deemed contribution - Series C Stock modification	—		—		—		834,001			—		—			834,001
Deemed contribution - Series D Stock modification	—		—		—		749,085			—		—			749,085
Foreign exchange loss	—		—		—		—			1,701		—			1,701
Net loss	—		—		—		—			—		(17,701,158	)		(17,701,158	)
Balance, June 30, 2022	123,415,558	$	12,342	$	336,000	$	76,235,088		$	6,571	$	(79,930,563	)	$	(3,340,562	)

The accompanying footnotes are an integral part of these unaudited condensed financial statements.

TWO HANDS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the nine months ended
September 30,
2022 2021
Cash flows from operating activities
Net loss $ (18,760,538 ) $ (12,929,226 )
Adjustments to reconcile net loss to cash used in operating activities

Depreciation and amortization 8,603 1,281
Bad debt 17,949 —
Stock-based compensation 13,504,200 511,850
Amortization of debt discount 96,055 261,560
Loss on settlement of debt 3,606,750 10,817,203
Initial derivative expense —   126,322
Change in fair value of derivative liabilities —   (194,750 )
Reduction in ROU liability (6,246 ) —
Change in operating assets and liabilities
Accounts and taxes receivable (38,267 ) (85,273 )
Prepaid expense 576,745 958,282
Inventory 68,239 —
Deferred revenue 23,388 —
Accounts payable and accrued liabilities 290,300 232,718
Net cash used in operating activities (612,822 ) (300,033 )

Cash flows from investing activities
Purchase of property and equipment (9,784 ) (1,945 )
Net cash used in investing activities (9,784 ) (1,945 )

Cash flow from financing activities
Advances by related party 133,156 90,680
Repayment of advances to related party (92,325 ) (83,747 )
Proceeds from notes payable —   14,895
Proceeds from issuance of shares —   789,006
Proceeds from promissory notes 77,960 19,151
Proceeds from non-redeemable convertible —   15,823
Proceeds from convertible notes —   225,000
Net cash provided by financing activities 118,791 1,070,808

Change in foreign exchange (8,634 ) 15,075

Net change in cash (512,449 ) 783,905

Cash, beginning of the period 533,295 21,843

Cash, end of the period $ 20,846 $ 805,748

Cash paid during the year
Interest paid $ —   $ —
Income taxes paid $ —   $ —

Supplemental disclosure of non-cash investing and financing activities
Stock issued to settle accounts payable and accrued liabilities $ —   $ 207,500
Stock issued to settle non-redeemable convertible notes $ 3,709,890 $ 11,150,424
Stock issued to settle convertible notes $ —   $ 446,450
Stock issued for prepaid expense $ 2,288,000 $ 1,153,571
Initial debt discount from derivative $ —   $ 225,000
Transfer of notes payable to promissory notes $ —   $ 91,192
Transfer of accounts payable and accrued liabilities to promissory notes $ 85,285 $ 29,450
Transfer of due to related party to promissory notes - related party $ —   $ 19,572
Deemed dividend - Series A Stock modification $ 1,396,721 $ —
Deemed contribution - Series B Stock modification $ 1,354,515 $ —
Deemed contribution - Series C Stock modification $ 834,001 $ —
Deemed contribution - Series D Stock modification $ 749,085 $ —


		For the six months ended June 30,
		2023			2022
Cash flows from operating activities
Net loss	$	(1,034,569	)	$	(17,701,158	)
Adjustments to reconcile net loss to cash used in operating activities

Depreciation and amortization		6,524			5,806
Bad debt		(28,936	)		9,328
Stock-based compensation		—			13,504,200
Gain on disposition		(50,750	)		—
Amortization of debt discount		76,451			62,768
Loss on settlement of debt		393,500			2,871,450
Change in operating assets and liabilities
Accounts and taxes receivable		(46,125	)		(35,362	)
Prepaid expense		—			561,764
Inventory		14,671			82,254
Deferred revenue		(6,748	)		—
Accounts payable and accrued liabilities		367,021			136,291
Operating lease right-of-use liability		(4,100	)		(4,179	)
Net cash used in operating activities		(313,061	)		(506,838	)

Cash flows from investing activities
Net cash used in investing activities		—			—

Cash flow from financing activities
Advances from related party		52,266			97,079
Repayment of advances to related party		(20,749	)		(71,239	)
Proceeds from notes payable		105,114			—
Repayment of notes payable		(7,044	)		—
Proceeds from promissory notes		174,685			—
Net cash provided by financing activities		304,272			25,840

Change in foreign exchange		267			(3,166	)

Net change in cash		(8,522	)		(484,164	)

Cash, beginning of the period		17,137			533,295

Cash, end of the period	$	8,615		$	49,131

Cash paid during the year
Interest paid	$	—		$	—
Income taxes paid	$	—		$	—

Supplemental disclosure of non-cash investing and financing activities
Stock issued to settle due to related party	$	188,871		$	—
Stock issued to settle promissory note - related party	$	85,922		$	—
Stock issued to settle non-redeemable convertible notes	$	439,420		$	2,974,290
Stock issued for prepaid expense	$	—		$	2,288,000
Transfer of accounts payable and accrued liabilities to promissory notes	$	—		$	85,285
Deemed dividend - Series A Stock modification	$	—		$	1,396,721
Deemed contribution - Series B Stock modification	$	—		$	1,354,515
Deemed contribution - Series C Stock modification	$	—		$	834,001
Deemed contribution - Series D Stock modification	$	—		$	749,085
The accompanying footnotes are an integral part of these unaudited condensed financial statements.

~~The accompanying footnotes are an integral part of these unaudited financial statements.~~

TWO HANDS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Two Hands Corporation (the "Company") was incorporated in the state of Delaware on April 3, 2009 and on July 26, 2016, changed its name from Innovative Product Opportunities Inc. to Two Hands Corporation.

The Two Hands co-parenting application launched on July 2018 and the Two Hands Gone application launched In February 2019. The Company ceased work on these applications in 2021.

The gocart.city online consumer grocery delivery application was released in early June 2020 and Cuore Food Services commenced sale of dry goods and produce to other businesses in July 2020.

gocart.city is the Company’s online delivery marketplace, allowing consumers to shop online and have their groceries delivered.

ii)

Grocery Originals is the Company’s brick-and-mortar grocery store located in Mississauga Ontario at the site of the Company’s warehouse.

iii)

Cuore Food Services is the Company’s wholesale food distribution branch.

On May 1, 2023, the Company entered into an asset sale agreement with a non-related private corporation (“Purchaser”) whereby the Company sold the assets of gocart.city. The sale included the e-commerce site, branding, supporting components of the Grocery Originals store and inventory. The ongoing sales and client base gocart.city and Grocery Originals was transferred as part of the asset sale. The Company received net proceeds from the sale of gocart.city assets of $64,319 (CAD $86,742). The net proceeds comprise of the settlement $127,731 (CAD $172,261) of accounts payable and $63,412 (CAD $85,519) of account receivable with the Purchaser resulting in a gain of $50,750 (CAD $68,442). After the asset sale was completed, the Company owed the Purchaser an additional $37,099 (CAD $49,099) in accounts payable which was not settled in the asset sale agreement. The Company and the Purchase agreed the $37,099 amount was due in twelve equal monthly installments commencing July 1, 2023 without interest. After May 1, 2023, the Company continued the business of Cuore Food Services.

The operations of the business are carried on by Two Hands Canada Corporation, a wholly-owned subsidiary of the Company, incorporated under the laws of Canada on February 7, 2014.

The Company received approval from the Canadian Securities Exchange (the "CSE") to list its common shares (the "Common Shares") on the CSE. Trading of the Common Shares in the capital of the Company commenced on August 5, 2022, under the symbol "TWOH".

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements of Two Hands Corporation have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission requirements for interim financial statements. Therefore, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The financial statements should be read in conjunction with the annual financial statements for the year ended December 31, ~~2021~~2022 of Two Hands Corporation in our Form 10-K filed on ~~March 31, 2022.~~April 3, 2023.

The interim financial statements present the balance sheets, statements of operations, stockholders’ deficit and cash flows of Two Hands Corporation. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States.

The interim financial information is unaudited. In the opinion of management, all adjustments necessary to present fairly the financial position as of ~~September~~June 30, ~~2022~~2023 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.

~~COVID-19~~GOING CONCERN

The recent outbreak of the coronavirus COVID-19 has spread across the globe and is impacting worldwide economic activity. Conditions surrounding the coronavirus continue to rapidly evolve and government authorities have implemented emergency measures to mitigate the spread of the virus. The outbreak and the related mitigation measures have had and will continue to have a material adverse impact on global economic conditions as well as on the Company's business activities. The extent to which COVID-19 may impact the Company's business activities will depend on future developments, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions, business disruptions, and the effectiveness of actions taken in the Canada, United States and other countries to contain and treat the disease. These events are highly uncertain and, as such, the Company cannot determine their financial impact at this time. No adjustments have been made to the amounts reported in these condensed consolidated financial statements as a result of this matter.

~~GOING CONCERN~~

The Company's financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. During the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, the Company incurred a net loss of $~~18,760,538~~1,034,569 and used cash in operating activities of $~~612,822~~313,061, and on ~~September~~June 30, ~~2022,~~2023, had stockholders’ deficit of $~~1,821,696~~4,579,367 4,876,317 and an accumulated deficit of $84,957,085. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date that the financial statements are issued. The Company will be dependent upon the raising of additional capital through placement of its common stock in order to implement its business plan. There can be no assurance that the Company will be successful in this situation. ~~The Company is unable to predict the effect, if any, that the coronavirus COVID-19 global pandemic may have on its access to the financing markets.~~ These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might result from this uncertainty. We are currently funding our operations by way of cash advances from our Chief Executive Officer, note holders, shareholders and ~~others. On April 14, 2022, the Company entered into a binding Grid Promissory Note and Credit Facility Agreement (the “Line of Credit”)~~others; however, we do not have any oral or written agreements with ~~The Cellular Connection Ltd. Pursuant~~them or others to ~~the Line of Credit, the Company can borrow from the Lender up~~loan or advance funds to CAD $750,000 in principal in increments of at least CAD $50,000 upon five business days’ notice. The funds due for repayment on May 1, 2024, and the principal bears interest at 8% per annum, payable monthly. As at the date of this Form 10-Q, CAD $100,000 have been borrowed by the Company pursuant to the Line of Credit.us. There can be no assurances that we will be able to receive ~~further commitments,~~ loans or advances from them or other persons in the future.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Two Hands Canada Corporation. All intercompany transactions and balances have been eliminated in consolidation.

USE OF ESTIMATES AND ASSUMPTIONS

Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

The ~~Company believes that it is probable that SRAX, Inc. will resolve its operational issues during the quarter ended December 31, 2022~~following table summarizes accounts receivable and resume providing advertising services to the Company. It is possible this assessment could change at December 31, 2022, which may cause the Company to write-off part or all this prepaid asset. If SRAX, Inc. does not resume advertising services to the Company, the Company expects the ~~80,000~~ ~~shares of Series C Convertible Preferred Stock issued on June 30, 2022 to SRAX, Inc. with a carrying value of $2,288,000~~ ~~will be returned to the Company for cancellation.~~revenue concentrations:

Schedule of concentration of risk, by risk factor
	Accounts receivable at June 30, 2023			Revenue for the six months ended June 30, 2023
Customer #1		17	%		—
Customer #2		11	%		—
Total concentration		28	%		—%

The following table summarizes accounts payable and purchases concentrations:

	Accounts payable at June 30, 2023			Purchases for the six months ended June 30, 2023
Supplier #1		13	%		—
Supplier #2		12	%		23	%
Supplier #3		12	%		—
Supplier #4		—			20	%
Supplier #5		—			14	%
Total concentration		37	%		57	%

CASH AND CASH EQUIVALENTS

For the purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.

ACCOUNTS RECEIVABLE

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Accounts receivable are reduced by an allowance for doubtful accounts, which is the Company’s best estimate of the amount of credit losses inherent in its existing accounts receivable. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and customers’ financial condition, the amount of receivables in dispute, and the current receivables aging and current payment patterns. The Company writes off accounts receivable against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

The allowance for doubtful accounts at ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021~~2022 is $~~65,026~~101,190 and $~~68,673~~156,693, respectively.

INVENTORY

Inventory consisting of groceries and dry goods are measured at the lower of cost and net realizable value. Cost is determined pursuant

to the first-in first out (“FIFO”) method. The cost of inventory includes the purchase price, shipping and handling costs incurred to bring the inventories to their present location and condition. Inventory with a short shelf life that is not utilized within the planned period are immediately expensed in the statement of operations. Estimated gross profit rates are used to determine the cost of goods sold in the interim periods. Any significant adjustment that results from the reconciliation with annual physical inventory is disclosed. At ~~September~~June 30, 2023 and December 31, 2022, nothe inventory valuation allowance was ~~required for spoiled inventory.~~$0.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost, less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to expense when incurred, while renewals and betterments that materially extend the life of an asset are capitalized.

The costs of assets sold, retired, or otherwise disposed of, and the related allowance for depreciation, are eliminated from the accounts, and any resulting gain or loss is recognized in the results from operations. Depreciation is provided over the estimated useful lives of the assets, which are as follows:

Computer equipment 50% declining balance over a three year useful life

In the year of acquisition, one half the normal rate of depreciation is provided.

REVENUE RECOGNITION

In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. The provisions of ASC 606 include a five-step process by which we determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which we expect to be entitled in exchange for those goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation. We recognize revenue for the sale of our products upon delivery to a customer.

During the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, the Company had revenue of $~~562,513~~372,769 and $~~605,498~~389,730, respectively. In ~~2022,~~2023, the Company recognized revenue of $~~130,990~~13,167 from the sale of groceries to consumers via the gocart.city online grocery delivery application and $~~431,523~~359,602 from the sale of dry goods and produce to other businesses. In ~~2021,~~2022 the Company recognized revenue of $~~132,617~~121,305 from the sale of groceries to consumers via the gocart.city online grocery delivery application and $~~472,881~~268,425 from the sale of dry goods and produce to other businesses.

~~RESEARCH AND DEVELOPMENT COSTS~~

~~Software development costs are included in research and development and are expensed as incurred. FASB ASC Topic 350~~ ~~Intangibles—Goodwill and Other~~ requires that software development costs incurred subsequent to reaching technological feasibility be capitalized, if material. If the process of developing a new product or major enhancement does not include a detailed program design, technological feasibility is determined only after completion of a working model. To date, the period between achieving technological feasibility and the general availability of such software has been short, and the software development costs qualifying for capitalization have been insignificant. The Company recorded research and development expense of $0 ~~and $~~0 ~~for the nine months ended September 30, 2022 and 2021, respectively.~~

LEASES

Under ASC 842, a right-of-use asset and lease liability is recorded for all leases and the statement of operations reflects the lease expense for operating leases and amortization/interest expense for financing leases.

The Company does not apply the recognition requirements in the standard to a lease that at commencement date has a lease term of twelve months or less and does not contain a purchase option that it is reasonably certain to exercise and to not separate lease and related non-lease components. Options to extend the leases are not included in the minimum lease terms unless they are reasonably certain to be exercised.

The Company leases an automobile under a non-cancelable operating lease. Right-of-use assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

DEBT DISCOUNT AND DEBT ISSUANCE COSTS

Debt discounts and debt issuance costs incurred in connection with the issuance of convertible notes are capitalized and amortized to interest expense based on the related debt agreements using the effective interest rate method. Unamortized discounts are netted against convertible notes.

~~DERIVATIVE LIABILITY~~

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Paragraph 815-15-25-1 the conversion feature and certain other features are considered embedded derivative instruments, such as a conversion reset provision, a penalty provision and redemption option, which are to be recorded at their fair value as its fair value can be separated from the convertible note and its conversion is independent of the underlying note value. The Company records the resulting discount on debt related to the conversion features at initial transaction and amortizes the discount using the effective interest rate method over the life of the debt instruments. The conversion liability is then marked to market each reporting period with the resulting gains or losses shown in the statements of operations.

In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

The Company follows ASC Section 815-40-15 (“Section 815-40-15”) to determine whether an instrument (or an embedded feature) is indexed to the Company’s own stock. Section 815-40-15 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions.

The Company evaluates its convertible debt, options, warrants or other contracts, if any, to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 810-10-05-4 and Section 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise or cancellation and then that the related fair value is reclassified to equity.

The Company utilizes the binomial option pricing model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date. The binomial option pricing 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 equal to the remaining contractual term of the instrument granted.

~~On October 1, 2021, the Company adopted a sequencing policy under Accounting Standards Codification (“ASC”) 815-40-35~~ ~~Derivatives and Hedging~~ (“ASC 815”) whereby in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares as a result of certain securities convertible or exchangeable for a potentially indeterminable number of shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving the first allocation of shares. Pursuant to ASC 815, issuances of securities to the Company’s employees or directors are not subject to the sequencing policy.

INCOME TAXES

The Company accounts for income taxes in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("FASB ASC") 740, Income Taxes. Under the assets and liability method of FASB ASC 740, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value.

NET LOSS PER SHARE

Basic net income (loss) per share includes no dilution and is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing earnings available to common shareholders by the weighted average number of common shares outstanding for the period increased to include the number of additional common shares that would have been outstanding if potentially dilutive securities had been issued. On ~~September~~June 30, ~~2022~~2023 and ~~2021,~~December 31, 2022, we excluded the common stock issuable upon conversion of non-redeemable convertible notes, convertible notes, Series A Stock, Series B Stock, Series C Stock ~~Series D Stock~~ and common stock to be issued of ~~5,253,246,650~~5,809,249,200 shares and ~~6,906,076,484~~5,248,242,000 shares, respectively, as their effect would have been anti-dilutive.

FOREIGN CURRENCY TRANSLATION

The consolidated financial statements are presented in United States dollars. The functional currency of the consolidated entities are determined by evaluating the economic environment of each entity. The functional currency of Two Hands Corporation is the United States dollar. Foreign exchange translation adjustments are reported as gains or losses resulting from foreign currency transactions and are included in the results of operations.

~~The~~Effective October 1, 2021, the Company changed the functional currency of its Company’s Canadian subsidiary, Two Hands Canada Corporation, to the Canadian dollar from United States dollar. The change in functional currency is due to the increase of Canadian dollar dominated activities over time including sales, operating costs and share subscriptions. The change in functional currency is accounted for prospectively. Two Hands Canada Corporation maintains its accounts in the Canadian dollar. Assets and liabilities are translated to United States dollars at year-end exchange rates. Income and expenses are transaction at averages exchange rate during the year. Foreign currency transaction adjustments are reported as other comprehensive income, a component of equity in the consolidated balance sheet.

STOCK-BASED COMPENSATION

The Company accounts for stock incentive awards issued to employees and non-employees in accordance with FASB ASC 718, Stock Compensation. Accordingly, stock-based compensation is measured at the grant date, based on the fair value of the award. Stock-based awards to employees are recognized as an expense over the requisite service period, or upon the occurrence of certain vesting events. Additionally, stock-based awards to non-employees are expensed over the period in which the related services are rendered.

FAIR VALUE OF FINANCIAL INSTRUMENTS

ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

Included in the ASC Topic 820 framework is a three level valuation inputs hierarchy with Level 1 being inputs and transactions that can be effectively fully observed by market participants spanning to Level 3 where estimates are unobservable by market participants outside of the Company and must be estimated using assumptions developed by the Company. The Company discloses the lowest level input significant to each category of asset or liability valued within the scope of ASC Topic 820 and the valuation method as exchange, income or use. The Company uses inputs which are as observable as possible and the methods most applicable to the specific situation of each company or valued item.

The Company’s financial instruments such as cash, ~~accounts receivable,~~ accounts payable and accrued liabilities, non-redeemable convertible notes, notes payable and due to related parties ~~and promissory notes~~ are reported at cost, which approximates fair value due to the short-term nature of these financial instruments.

RECENT ACCOUNTING PRONOUNCEMENTS

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). This update amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity's own equity and improves and amends the related EPS guidance for both Subtopics. This standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2023, which means it will be effective for our fiscal year beginning January 1, ~~2014.~~2024. Early adoption is permitted but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. We are currently evaluating the impact of ASU 2020-06 on our consolidated financial statements.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

NOTE 3 – NON-REDEEMABLE CONVERTIBLE NOTES

On September 1, 2016, Doug Clark, former Chief Executive Officer and related party, assigned the Side Letter Agreement (“Note”) dated June 10, 2014 with a total carrying value $382,016 to DC Design Inc. (“DC Design”).On September 1, 2016, the Company entered into an amended Side Letter Agreement with DC Design to amend and add certain terms to the Side Letter Agreement and advances from the period from June 25, 2014 to December 24, 2014. ~~Under the terms of the amended Side Letter Agreement, the issue price of the Note is $174,252~~ ~~with an interest rate~~ 20~~% per annum and an original maturity date of~~ ~~December 31, 2017~~ which is subject to automatic annual renewal. In addition, on September 30, 2019, the Company and DC Design entered into an Agreement to change the original maturity date of the Note to December 31, 2021. At the option of the Company, the Company may convert principal and interest at a fixed conversion price of $~~0.003~~ ~~per share of the Company’s common stock.~~ ~~The Note allows for the lender to secure a portion of the Company assets up to 200% of the face value of the note.~~ ~~During the year ended December 31, 2021, the Company elected to convert $39,612~~ ~~of principal and interest into~~ ~~13,204~~ ~~shares of common stock of the Company at a conversion price of $3.00~~ ~~per share. This conversion resulted in a gain on debt settlement of $6,602~~ ~~due to the requirement to record the share issuance at fair value on the date the shares were issued. The condensed consolidated statement of operations includes interest expense of $~~0 ~~and $6,602~~ ~~for the nine months ended September 30, 2022 and 2021, respectively, and $~~0 ~~and $6,602~~ ~~for the three months ended September 30, 2022 and 2021, respectively. On September 30, 2022 and December 31, 2021, the carrying amount of the Note is $~~0 ~~and $~~0~~, respectively. This Note has been paid in full.~~

On January 8, 2018, the Company entered into a Side Letter Agreement (“Note”) with a non-related investor, Stuart Turk, to amend and add certain terms to unsecured, non-interest bearing, due on demand notes payable totaling $244,065 issued by the Company during the period of July 2014 and December 2017. The issue price of the Note is $244,065 with a face value of $292,878 and the Note has an original maturity date of December 31, 2018 which is subject to automatic annual renewal. On June 29, 2021, the Company and Stuart Turk entered into an Agreement to change the original maturity date of the Note to December 31, 2025. At the option of the Company, the Company may convert principal and interest at a fixed conversion price of $0.0001 per share of the Company’s common stock. The Note allows ~~for~~ the lender to secure a portion of the Company assets up to 200% of the face value of the Note. If the Note is not paid on ~~the maturity date,~~December 31 each year, the outstanding face amount of the Note ~~shall increase~~increases by 20% on January 1 ~~2022.~~the following year. During the ~~year~~six months ended ~~December 31, 2020,~~June 30, 2023, the Company elected to convert $~~1,400~~37,820 of principal and interest into ~~14,000~~ ~~shares of common stock of the Company at a conversion price of $0.10~~ ~~per share. These conversions resulted in a loss on debt settlement of $58,800~~ ~~due to the requirement to record the share issuance at fair value on the date the shares were issued. During the year ended December 31, 2021, the Company elected to convert $286,957~~ ~~of principal and interest into~~ ~~2,869,571~~ ~~shares of common stock of the Company at a conversion price of $0.10~~ ~~per share. These conversions resulted in a loss on debt settlement of $7,693,428~~ due to the requirement to record the share issuance at fair value on the date the shares were issued. During the nine months ended September 30, 2022 (prior to the reverse stock split on April 27, 2022), the Company elected to convert $~~71,000~~ ~~of principal and interest into~~ ~~710,000~~ ~~shares of common stock of the Company at a conversion price of $0.10~~ ~~per share. These conversions resulted in a loss on debt settlement of $374,000~~ due to the requirement to record the share issuance at fair value on the date the shares were issued. During the nine months ended September 30, 2022 (after the reverse stock split on April 27, 2022), the Company elected to convert $~~1,640~~ ~~of principal and interest into~~ ~~16,400,000~~378,200,000 shares of common stock of the Company at a conversion price of $0.0001 per share. These conversions resulted in a loss on debt settlement of $~~2,374,750~~294,500 due to the requirement to record the share issuance at fair value on the date the shares were issued. The condensed consolidated statement of operations includes interest expense of $~~32,529~~18,626 and $~~62,879~~21,567 for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and $~~10,962~~9,365 and $~~21,190~~10,843 for the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. On ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the carrying amount of the Note is $~~177,346~~168,614 (face value of $~~188,308~~187,549 less $~~10,962~~18,935 unamortized discount) and ~~$217,457~~$187,808 (face value of $~~217,457~~187,808 less $0 unamortized discount), respectively.

On April 12, 2018, the Company entered into a Side Letter Agreement (“Note”) with a non-related investor, Jordan Turk, to amend and add certain terms to unsecured, non-interest bearing, due on demand notes payable totaling $45,000 issued by the Company during the period of March 19, 2018 to April 12, 2018. ~~The issue price of the Note is $45,000~~ ~~with a face value of $54,000~~ ~~and the Note has an original maturity date of~~ ~~December 31, 2018~~ which is subject to automatic annual renewal. On June 29, 2021, the Company and Jordan Turk entered into an Agreement to change the original maturity date of the Note to December 31, 2025. At the option of the Company, the Company may convert principal and interest at a fixed conversion price of $~~0.0001~~ ~~per share of the Company’s common stock.~~ ~~The Note allows for the lender to secure a portion of the Company assets up to 200% of the face value of the Note.~~ ~~During the year ended December 31, 2020, the Company elected to convert $2,000~~ ~~of principal and interest into~~ ~~20,000~~ ~~shares of common stock of the Company at a conversion price of $0.10~~ ~~per share. These conversions resulted in a loss on debt settlement of $62,000~~ ~~due to the requirement to record the share issuance at fair value on the date the shares were issued. During the year ended December 31, 2021, the Company elected to convert $90,048~~ ~~of principal and interest into~~ ~~900,480~~ ~~shares of common stock of the Company at a conversion price of $0.10~~ ~~per share. These conversions resulted in a loss on debt settlement of $2,918,242~~ ~~due to the requirement to record the share issuance at fair value on the date the shares were issued. The condensed consolidated statement of operations includes interest expense of $~~0 ~~and $15,008~~ ~~for the nine months ended September 30, 2022 and 2021, respectively, and $~~0 ~~and $7,566~~ ~~for the three months ended September 30, 2022 and 2021, respectively. On September 30, 2022 and December 31, 2021, the carrying amount of the Note is $~~0 ~~and $~~0~~, respectively. This Note has been paid in full.~~

On May 10, 2018, the Company entered into a Side Letter Agreement (“Note”) with a non-related investor, Jordan Turk, to amend and add certain terms to unsecured, non-interest bearing, due on demand notes payable totaling $35,000 issued by the Company on May 9, 2018. The issue price of the Note is $35,000 with a face value of $42,000 and the Note has an original maturity date of December 31, 2018 which is subject to automatic annual renewal. On June 29, 2021, the Company and Jordan Turk entered into an Agreement to change the original maturity date of the Note to December 31, 2025. At the option of the Company, the Company may convert principal and interest at a fixed conversion price of $0.0001 per share of the Company’s common stock. The Note allows ~~for~~ the lender to secure a portion of the Company assets up to 200% of the face value of the Note. If the Note is not paid on December 31 each year, the outstanding face amount of the Note increases by 20% on January 1 the following year.During the ~~year~~six months ended ~~December 31, 2021,~~June 30, 2023, the Company elected to convert $~~40,100~~8,100 of principal and interest into ~~401,000~~ ~~shares of common stock of the Company at a conversion price of $0.10~~ ~~per share. These conversions resulted in a loss on debt settlement of $846,100~~ due to the requirement to record the share issuance at fair value on the date the shares were issued. During the nine months ended September 30, 2022 (prior to the reverse stock split on April 27, 2022), the Company elected to convert $~~30,000~~ ~~of principal and interest into~~ ~~300,000~~ ~~shares of common stock of the Company at a conversion price of $0.10~~ ~~per share. These conversions resulted in a loss on debt settlement of $210,000~~ due to the requirement to record the share issuance at fair value on the date the shares were issued. During the nine months ended September 30, 2022 (after the reverse stock split on April 27, 2022), the Company elected to convert $~~500~~ ~~of principal and interest into~~ ~~5,000,000~~81,000,000 shares of common stock of the Company at a conversion price of $0.0001 per share. These conversions resulted in a loss on debt settlement of $~~648,000~~99,000 due to the requirement to record the share issuance at fair value on the date the shares were issued. The condensed consolidated statement of operations includes interest expense of $~~4,858~~840 and $~~9,047~~3,221 for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and $~~1,637~~422 and $~~3,049~~1,619 for the three months ended ~~September~~June 30, 2022 and 2021, respectively. On ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the carrying amount of the Note is $~~6,834~~1,211 (face value of $2,065 less $854 unamortized discount) and $8,471 (face value of $8,471 less $~~1,637~~ ~~unamortized discount) and $32,476~~ ~~(face value of $32,476~~ ~~less $~~0 unamortized discount), respectively.

On September 13, 2018, the Company entered into a Side Letter Agreement (“Note”) with a non-related investor, Jordan Turk, to amend and add certain terms to unsecured, non-interest bearing, due on demand notes payable totaling $40,000 issued by the Company during the period of July 10 to September 13, 2018. The issue price of the Note is $40,000 with a face value of $48,000 and the Note has an original maturity date of December 31, 2018 which is subject to automatic annual renewal. On June 29, 2021, the Company and Jordan Turk entered into an Agreement to change the original maturity date of the Note to December 31, 2025. At the option of the Company, the Company may convert principal and interest at a fixed conversion price of $0.0001 per share of the Company’s common stock. The Note allows ~~for~~ the lender to secure a portion of the Company assets up to 200% of the face value of the Note. If the Note is not paid on December 31 each year, the outstanding face amount of the Note increases by 20% on January 1 the following year.The condensed consolidated statement of operations includes interest expense of $~~12,408~~9,872 and $~~10,339~~8,226 for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022 respectively, and $~~4,181~~4,963 and $~~3,485~~4,136 for the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022 respectively. On ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the carrying amount of the Note is $~~95,352~~109,405 (face value of $119,440 less $10,035 unamortized discount) and $99,533 (face value of $99,533 ~~less $4,181~~ ~~unamortized discount) and $82,944~~ ~~(face value of $82,944~~ less $0 unamortized discount), respectively.

On January 31, 2019, the Company entered into a Side Letter Agreement (“Note”) with ~~a non-related investor,~~ Stuart Turk to amend and add certain terms to unsecured, non-interest bearing, due on demand notes payable totaling $106,968 issued by the Company during the period of January 3, 2018 to December 28, ~~2018~~.2018. The issue price of the Note is $106,968 with a face value of $128,362 and the Note has an original maturity date of December 31, 2019 which is subject to automatic annual renewal. On June 29, 2021, the Company and Stuart Turk entered into an Agreement to change the original maturity date of the Note to December 31, 2025. At the option of the Company, the Company may convert principal and interest at a fixed conversion price of $0.0001 per share of the Company’s common stock. The Note allows ~~for~~ the lender to secure a portion of the Company assets up to 200% of the face value of the Note. If the Note is not paid on ~~the maturity date,~~December 31 each year, the outstanding face amount of the Note ~~shall increase~~increases by 20% on January 1 ~~2022.~~the following year. The condensed consolidated statement of operations includes interest expense of $~~27,650~~21,999 and $~~23,042~~18,332 for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and $~~9,318~~11,060 and $~~7,765~~9,217 for the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. On ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the carrying amount of the Note is $~~212,491~~243,808 (face value of $266,171 less $22,363 unamortized discount) and $221,809 (face value of $221,809 less $~~9,318~~ ~~unamortized discount) and $184,841~~ ~~(face value of $184,841~~ ~~less $~~0 unamortized discount), respectively.

On January 31, 2019, the Company entered into a Side Letter Agreement (“Note”) with a non-related investor, The Cellular Connection Ltd., to amend and add certain terms to unsecured, non-interest bearing, due on demand notes payable totaling $20,885 issued by the Company during the period of January 23, 2018 to October 16, 2018. ~~The issue price of the Note is $20,885~~ ~~with a face value of $25,062~~ ~~and the Note has an original maturity date of~~ ~~December 31, 2019~~ which is subject to automatic annual renewal. On September 30, 2019, the Company and The Cellular Connection Ltd. entered into an Agreement to change the original maturity date of the Note to December 31, 2021. At the option of the Company, the Company may convert principal and interest at a fixed conversion price of $~~0.0001~~ ~~per share of the Company’s common stock.~~ ~~The Note allows for the lender to secure a portion of the Company assets up to 200% of the face value of the Note.~~ ~~During the year ended December 31, 2020, the Company elected to convert $115~~ ~~of principal and interest into~~ ~~1,150~~ ~~shares of common stock of the Company at a conversion price of $0.10~~ ~~per share. These conversions resulted in a loss on debt settlement of $3,795~~ ~~due to the requirement to record the share issuance at fair value on the date the shares were issued. During the year ended December 31, 2021, the Company elected to convert $35,952~~ ~~of principal and interest into~~ ~~359,517~~ ~~shares of common stock of the Company at a conversion price of $0.10~~ ~~per share. These conversions resulted in a loss on debt settlement of $1,357,400~~ ~~due to the requirement to record the share issuance at fair value on the date the shares were issued. The condensed consolidated statement of operations includes interest expense of $~~0 ~~and $5,992~~ ~~for the nine months ended September 30, 2022 and 2021, respectively, and $~~0 ~~and $~~0 ~~for the three months ended September 30, 2022 and 2021, respectively. On September 30, 2022 and December 31, 2021, the carrying amount of the Note is $~~0 ~~and $~~0~~, respectively. This Note has been paid in full.~~

~~On January 20, 2021, the Company entered into a Side Letter Agreement (“Note”) with a non-related investor, Francesco Bisignano, for cash proceeds of $15,823.~~ ~~The issue price of the Note is $15,823~~ ~~with a face value of $23,735. At the option of the Company, the Company may convert principal and interest at a fixed conversion price of $0.0034~~ ~~per share of the Company’s common stock.. During the year ended December 31, 2021, the Company elected to convert $23,735~~ ~~of principal and interest into~~ ~~8,823~~ ~~shares of common stock of the Company at a conversion price of $3.40~~ ~~per share. This conversion resulted in a loss on debt settlement of $2,736~~ ~~due to the requirement to record the share issuance at fair value on the date the shares were issued. The condensed consolidated statement of operations includes interest expense of $~~0 ~~and $7,912~~ ~~for the nine months ended September 30, 2022 and 2021, respectively. On September 30, 2022 and December 31, 2021, the carrying amount of the Note is $~~0 ~~and $~~0~~, respectively. This Note has been paid in full.~~

NOTE 4 – LEASES

The Company entered into an operating lease agreement on October 14, 2021 for an automobile, resulting in the recording of an initial liability and corresponding right-of-use asset of $35,906. The weighted-average remaining non-cancelable lease term for the Company’s operating lease was ~~3.00~~2.25 years at ~~September~~June 30, ~~2022.~~2023. The weighted-average discount rate was 3.96% at ~~September~~June 30, ~~2022.~~2023.

The Company’s operating ~~leases~~lease expires in 2025. The following shows ~~the undiscounted cash flows~~future lease payments for the remaining periods under operating lease at ~~September~~June 30, ~~2022:~~2023:

Operating Lease Liability Maturity
Periods ending December 31, Operating Lease Commitments
2022 $ 2,515
2023 10,058
2024 10,058
2025 7,544
Total operating lease commitments 30,175
Less: imputed interest (5,114 )
Total right-of-use liability $ 25,061

Schedule of operating lease liability maturity
Periods ending December 31,		Operating Lease Commitments
	2023	$	10,471
	2024		10,471
	2025		7,854
	Total operating lease commitments		28,796
	Less: imputed interest		(8,941	)
	Total right-of-use liability	$	19,855

The Company’s discounted current right-of-use lease liability and discounted non-current right-of-use lease liability at ~~September~~June 30, ~~2022~~2023 is $~~8,026~~8,607 and $~~17,035~~11,248, respectively.

NOTE 5 – LINE OF CREDIT

On April 14, 2022, the Company entered into a binding Grid Promissory Note and Credit Facility Agreement (the “Line of Credit”) with The Cellular Connection Ltd. (the “Lender”) Pursuant to the Line of Credit, the Company can borrow from the Lender up to CAD $750,000 in principal in increments of at least CAD $50,000 upon five business days’ notice. The line of credit is due on May 1, 2024 and the outstanding principal bears interest at 8% per annum, payable monthly. Any indebtedness under the Line of Credit are secured against accounts receivable and inventory of the Company, and is convertible into shares of common stock of the Company at the Company’s option any time after twelve months from the first advance at a conversion price of $0.10 per share, subject to a restriction on the Lender holding more than 4.99% of the Company’s Common Shares. As atof June 30, 2023 and December 31, 2022, the ~~date~~Line of ~~this Form 10-Q,~~Credit of $~~72,580~~494,827 (principal $475,335 (CAD $~~100,000~~629,083) ~~have been borrowed by the Company pursuant to the Line~~and interest of ~~Credit.~~$19,492) and $293,298 (principal $289,970 (CAD $393,500) and interest of $3,328), respectively, was outstanding. The ~~condensed~~ consolidated statement of operations includes interest expense of $~~426~~ ~~and $~~0 ~~for the nine months ended September 30, 2022 and 2021, respectively, and $426~~8,987 and $0 for the three months ended ~~September~~June 30, 2023 and 2022, respectively, and ~~2021,~~$15,780 and $0 for the six months ended June 30, 2023 and 2022, respectively.

NOTE 6 – NOTES PAYABLE

As of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, notes payable due to ~~Stuart Turk, Jordan Turk~~Piero Manzini, and The Cellular Connection Limited, a corporation controlled by Stuart Turk, totaling $~~6,068~~113,575 and $~~6,103~~13,443, respectively, were outstanding. The balances are non-interest bearing, unsecured and have no specified terms of repayment.

~~During the nine months ended September 30, 2021, $14,895~~ ~~for expenses paid on behalf of the Company and the Company settled notes payable of $91,192~~ ~~by issuing promissory notes.~~

NOTE 7 – PROMISSORY NOTES

Promissory Notes

As of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, promissory notes of $~~224,528~~ ~~(principal $259,252~~ ~~and interest of $37,856) and $210,527~~238,528 (principal $186,672 and interest of $~~23,855~~51,856) and $229,194 (principal $186,672 and interest of $42,522), respectively, were outstanding. The promissory notes bears interest of 10% per annum, are unsecured and mature on December 31, ~~2025~~.

~~During the nine months ended September 30, 2021, the Company issued promissory notes of $136,459~~ ~~for $19,217~~ ~~of cash advanced to the Company and $91,192~~ ~~to settle notes payable and $26,050~~ ~~to settle accounts payable.~~2025.

Promissory ~~Note~~Notes – Related Party

As of ~~September~~June 30, 2023 and December 31, 2022, promissory note – related party of $~~81,173~~0 and $84,377 (principal $~~77,308~~78,490 and interest of $~~3,865~~5,887) ~~and $~~0, respectively, were outstanding. The promissory notes – related party bear interest of 10% per annum, are unsecured, mature on December 31, 2025 and are due to 2130555 Ontario Limited, a Company controlled by Nadav Elituv, the Company's Chief Executive Officer.

~~During the nine months ended September 30, 2021,~~ On February 2, 2023, the Company issued common stock to settle promissory ~~notes~~note – related party and interest with a carrying value of $~~19,572~~85,922 ~~for $3,400~~ ~~to settle accrued liabilities and $16,172~~ ~~of expenses paid on behalf of the Company to Nadav Elituv, the Company's Chief Executive Officer.~~(Note 10).

NOTE 8 – RELATED PARTY TRANSACTIONS

As of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, advances and accrued salary of $~~40,715~~431,855 and $~~39,985~~185,473, respectively, were due to Nadav Elituv, the Company's Chief Executive Officer. The balance is non-interest bearing, unsecured and have no specified terms of repayment.

During the ~~nine~~six months ended ~~September~~June 30, 2023 and 2022, the Company issued advances due to related party for $~~133,156~~52,266 of expenses paid on behalf of the Company and advances due to related party were repaid by the Company with $~~92,325~~20,749 in cash. In addition, the Company accrued salary of $~~146,916~~399,739 due to Nadav Elituv for the ~~nine~~six months ended ~~September~~June 30, 2023. On February 2, 2022, ~~and~~the Company issued ~~a promissory note for $77,308~~common stock to settle due to related ~~party.~~party with a carrying value of $188,871 (Note 10).

During the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, the Company issued advances due to related party for $~~90,680~~97,079 of expenses paid on behalf of the Company and advances due to related party were repaid by the Company with $~~83,747~~71,239 in cash. In addition, the Company accrued salary of $~~129,600~~99,013 due to Nadav Elituv for the ~~nine~~six months ended ~~September~~June 30, ~~2021, issued~~ ~~60,000~~ ~~shares of Series A Convertible Preferred Stock with a fair value of $207,500~~ ~~to settled salary due~~2022 and issued a promissory note for $~~19,572~~82,740 to settle due to related party.

During the ~~nine~~six months ended ~~September~~June 30, 2023 and 2022, the Company paid Linus Creative Services, a business ~~owned~~controlled by Bradley Southam, a director orof the Company, $~~25,259~~2,720 and $16,984, respectively, for advertising services.

Employment Agreements

On August 7, 2020, the Company executed an employment agreement for the period from July 1, 2020 to June 30, 2021 with Nadav Elituv, the Chief Executive Officer of the Company whereby the Company shall pay 50,000,000 shares of Common Stock of the Company and an annual salary of $151,200 payable monthly on the first day of each month from available funds. On September 30, 2021, there were no shares of common stock due Nadav Elituv under the employment agreement.

On July 1, 2021, the Company executed an employment agreement for the period from July 1, 2021 to June 30, 2022 with Nadav Elituv, the Chief Executive Officer of the Company whereby the Company shall pay 30,000 shares of Series A Convertible Preferred Stock of the Company, 60,000,000 shares of Common Stock of the Company and an annual salary of $216,000 payable monthly on the first day of each month from available funds, commencing on July 1, 2021. On October 1, 2021, the Company and Nadav Elituv amended the employment agreement to (i) cancel annual salary of $216,000 payable monthly and (ii) enter in to a consulting agreement to pay 2130555 Ontario Limited, a Company controlled by Nadav Elituv, a monthly consulting fee of $17,400 (CAD $22,000 per month) for services for the period from October 1, 2021 to June 30, 2022.

On March 26, 2022, the Company and Nadav Elituv further amended the employment agreement to (i) change the termination date from June 30, 2022 to December 31, 2022; (ii) pay an additional 10,500 shares of Series A Convertible Preferred Stock of the Company and (iii) pay an additional 50,000,000 shares of Common Stock of the Company.

On July 1, 2022, the term of the consulting contract with 2130555 Ontario Limited was extended to June 30, 2023.

On January 15, 2023, the Company executed an employment agreement for the period from January 1, 2023 to December 31, 2023 with Nadav Elituv, the Chief Executive Officer of the Company whereby the Company shall pay an annual salary of $600,000 from available funds.

Stock-based compensation – salaries expense related to these employment agreements for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022 is $~~13,504,200~~0 and $~~186,350~~13,504,200, respectively. Stock-based compensation – salaries expense was recognized ratably over the requisite service period. (See Note 10).

NOTE 9 – PREFERRED STOCK

On August 6, 2013, the Company filed a Certificate of Designation with the Delaware Secretary of State thereby designating two hundred thousand (200,000) shares as Series A Convertible Preferred Stock (“Series A Stock”). Each share of Series A Stock is convertible into one thousand (1,000) shares of common stock of the Company. On April 21, 2022, the Company amended its articles to amend the terms of its Series A Convertible Preferred Stock to become non-voting shares. Previously Series A Stock were entitled to the number of votes equal to the aggregate number of shares of common stock into which the Holder’s share of Series A Stock is convertible, multiplied by one hundred (100).

On December 12, 2019, the Company filed a Certificate of Designation with the Delaware Secretary of State thereby designating one hundred thousand (100,000) shares as Series B Convertible Preferred Stock (“Series B Stock”). After a one year holding period, each share of Series B Stock is convertible into one thousand (1,000) shares of common stock of the Company. Series B Stock is non-voting.

On October 7, 2020, the Company filed a Certificate of Designation with the Delaware Secretary of State thereby designating thirty thousand (30,000) shares as Series C Convertible Preferred Stock, par value $0.001 per share (“Series C Stock”). Each share of Series C Stock (i) has a liquidation value of $100, subject to various anti-dilution protections (ii) is convertible into shares of common stock of the Company six months after the date of issuance at a price of $0.25 per share effective June 30, 2022, subject to various anti-dilution protections (iii) on conversion will receive an aggregate number of shares of common stock as is determined by dividing the liquidation value by the conversion price. Series C Stock are non-voting. On June 24, 2021, the board of directors approved the increase in the number of designated shares of Series C Convertible Preferred Stock from 5,000 to 30,000 and reduction of the conversion price from $0.0035 per share to $0.002 per share. On April 27, 2022, a 1 for 1,000 reverse stock split of the Company’s common stock took effect which increased the conversion rate of from $~~0.002~~$0.002 per share to $2.00 per share. On June 30, 2022, the Company made an amendment to the Certificate of Designation of its Series C Stock which lowered the fixed conversion price from $2.00 per share to $0.25 per share.

On September 1, 2021, the Company filed a Certificate of Designation with the Delaware Secretary of State thereby designating two hundred thousand (200,000) shares as Series D Convertible Preferred Stock, par value $0.001 per share (“Series D Stock”). Each share of Series D Stock is convertible into one hundred (100) shares of common stock of the Company six months after the date of issuance. Series D Stock are non-voting.

On June 30, 2022, the Company made an amendment to the Certificate of Designation of its Series C Stock which lowered the fixed conversion price from $2.00 per share to $0.25 per share. The Company accounted for the amendment as an extinguishment and recorded a deemed dividend in accordance with ASC 260-10-599-2. As such, on June 30, 2022, the shares of Series C Stock recorded at fair value of 296,951 resulting in a deemed contribution of $834,001.

On October 4, 2022, the Company filed a Certificate of Designation with the Delaware Secretary of State that had the effect of designating 300,000 shares of preferred stock as Series E Convertible Preferred Stock (“Series E Stock”). Series E Stock are non-voting, have a par value of $0.0001 per share and have a stated value of $1.00 per share. Each share of Series E Stock carries an annual cumulative dividend of 10% of the stated value. The Company may redeem Series E Stock in cash, if redeemed within 60 days of issuance date, at 110% of the stated value plus accrued unpaid dividends and between 61 days and 180 days at 115% of the stated value plus unpaid accrued dividends. After 180 days of the issuance date, the Company does not have the right to redeem Series E Stock. After 180 days after the issue date, Series E Stock at the stated value together with any unpaid accrued dividends are convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 75% of the market price defined as the lowest three average trading price during the ten trading day period ending on the latest trading day prior to the conversion date. After 18 months following the issuance date, the Company must redeem for cash Series E Stock at its stated value plus any accrued unpaid dividends and the default adjustment, if any.

On March 26, 2022, the Company issued 10,500 shares of Series A Convertible Preferred Stock with a fair value of $4,200 ($2.50 per share) for compensation due to Nadav Elituv, the Chief Executive Officer of the Company.

On April 27, 2022, a 1 for 1,000 reverse stock split of the Company’s common stock took effect which increased the conversion rate of

(i) Series A Stock from 1 (one) share of Series A Stock for 1 (one) share of common stock (pre-reverse stock-split) to 1 (one) share of Series A Stock for 1,000 (one thousand) shares of common stock (post-reverse stock-split) (ii) Series B Stock from 1 (one) share of Series B Stock for 1 (one) share of common stock (pre-reverse stock-split) to 1 (one) share of Series B Stock for 1,000 (one thousand) shares of common stock (post-reverse stock-split) and (iii) Series D Stock from 1 (one) share of Series D Stock for 1 (one) share of common stock (pre-reverse stock-split) to 1 (one) share of Series D Stock for 100 (one hundred) shares of common stock (post-reverse stock-split). The Company accounted for the increase in the conversion rates as an extinguishment and recorded a deemed dividend (contribution) in accordance with ASC 260-10-599-2. As such, on April 27, 2022, the shares of Series A Stock, Series B Stock and Series D Stock were recorded at fair value of $1,966,043, $209,585 and $39,921, respectively, and resulting in a deemed dividend (contribution) of $1,396,721, ($1,354,515) and ($749,085), respectively.

On June 30, 2022, the Company made an amendment to the Certificate of Designation of its Series C Stock which lowered the fixed conversion price from $2.00 per share to $0.25 per share. The Company accounted for the amendment as an extinguishment and recorded a deemed dividend in accordance with ASC 260-10-599-2. As such, on June 30, 2022, the shares of Series C Stock recorded at fair value of ~~296,951~~ ~~resulting in a deemed contribution of $834,001~~.

~~On June 30, 2022 the Company issued~~ ~~80,000~~ ~~of Series C Convertible Preferred Stock with a fair value of $2,288,000~~ ~~for prepaid advertising expense.~~

~~On July 26, 2022, Nadav Elituv, our Chief Executive Officer, returned~~ ~~175,000~~ ~~shares of Series A Stock to treasury for cancellation for no consideration resulting in a $1,746,538~~ ~~reduction in the carrying value of Series A Stock.~~

Series A Stock, Series B Stock, Series C Stock, Series D Stock and Series DE Stock has been classified as temporary equity (outside of permanent equity) on the consolidated balance sheet on ~~September~~June 30, ~~2022~~2023 and December 31, 2022, ~~because other tainting contracts such as convertible notes have inadequate available authorized shares~~since share settlement is not within control of the ~~Company for settlement.~~Company.

NOTE 10 - STOCKHOLDERS' EQUITY

The Company is authorized to issue an aggregate of 12,000,000,000 common shares with a par value of $0.0001 per share and 1,000,000 shares of preferred stock with a par value of $0.0001 per share.

On March 21, 2022, pursuant to stockholder consent, our Board of Directors authorized an amendment (the "Amendment") to our Certificate of Incorporation, as amended, to affect a reverse stock split of the issued and outstanding shares of our common stock, par value $0.0001, on a 1 for 1,000 basis. We filed the Amendment with the Delaware Secretary of State on March 21, 2022. On April 25, 2022 the Financial Industry Regulatory Authority, Inc. notified us that the reverse stock split would take effect on April 27, 2022. All common stock share and per-share amounts for all periods presented in these consolidated financial statements have been adjusted retroactively to reflect the reverse stock split.

~~During~~For the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, the Company elected to convert $~~103,140~~45,920 of principal and interest of non-redeemable convertible notes into ~~22,410,000~~459,200,000 shares of common stock of the Company with a fair value of $~~3,709,890~~439,420 resulting in a loss of extinguishment of debt of $~~3,606,750~~393,500.

On ~~April 27, 2022,~~February 2, 2023, the Company ~~issued~~agreed to issue ~~90,000,000~~977,889 shares of common stock with a fair value of $~~13,500,000~~3,912 to settle advances with a carrying value of $36,690 (CAD $48,894) due to Nadav Elituv, the ~~Company's~~ Chief Executive Officer ~~due under his employment agreement dated July 1, 2021, amended on October 1, 2021 and March 26, 2022.~~of the Company resulting an increase in additional paid-in capital of $32,778.

On ~~April 28, 2022,~~February 2, 2023, the ~~Holders~~Company agreed to issue 6,346,035 shares of common stock with a fair value of $25,384 to settle consulting fees with a carrying value of $238,103 (CAD $317,302) due to 2130555 Ontario Limited resulting an increase in additional paid-in capital of $212,720. 2130555 Ontario Limited is controlled by Nadav Elituv, the Chief Executive Officer of the Company.

On March 3, 2023, the Holder of Series B Stock elected to convert 7,000 shares of Series B Stock into 7,000,000 shares of common stock resulting in a $69,162 reduction in the carrying value of Series B Stock.

On May 12, 2023, the Company issued 32,000 shares of common stock to satisfy an obligation for common stock to be issued with a carrying value of $336,000.

On May 16, 2023, the Holder of Series B Stock elected to convert 4,000 shares of Series B Stock into 4,000,000 shares of common stock resulting in a $~~39,521~~39,921 reduction in the carrying value of Series B Stock.

On ~~May 4, 2022, the Holders of Series D Stock elected to convert~~June 30, 2023, ~~40,000~~10,000 shares of Series DC Stock automatically converted into 4,000,000 shares of common stock in accordance with the Certificate of Designation resulting in a $~~39,521~~296,951 reduction in the carrying value of Series ~~D Stock.~~

~~On September 26, 2022, the Holder of Series B Stock elected to convert~~ ~~6,000~~ ~~shares of Series B Stock into~~ ~~6,000,000~~ ~~shares of common stock resulting in a $59,281~~ ~~reduction in the carrying value of Series B~~C Stock.

Common stock to be issued

On ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had an obligation to issue ~~32,000~~0 shares of common stock valued at $~~336,000~~0 and 32,000 shares of common stock valued at ~~$336,000,~~$336,000, respectively, for stock-based compensation – consulting services. These shares relate to an agreement dated August 1, 2020 for services to be provided from August 1, 2020 to July 31, 2022 whereby the Company shall pay 50,000 shares of Common Stock of the Company with a fair value of $525,000 for consulting. The shares are expensed the earlier of (i) the date of issue of shares or (ii) on a straight line over the life of the contract.

NOTE 11 - SUBSEQUENT EVENTS

~~Certificate of Designation~~

~~On October 4, 2022,~~From July 1, 2023 to August 6, 2023, the Company ~~filed a Certificate~~elected to convert $41,160 of ~~Designation with the Delaware Secretary~~principal and interest of ~~State that had the effect of designating~~non-redeemable convertible notes into ~~300,000~~411,600,000 ~~shares of preferred stock as Series E Convertible Preferred Stock (“Series E Stock”). Series E Stock are non-voting, have a par value of $0.0001~~ ~~per share and have a stated value of $1.00~~ ~~per share. Each share of Series E Stock carries an annual cumulative dividend of~~ 10~~% of the stated value.~~ The Company may redeem Series E Stock in cash, if redeemed within 60 days of issuance date, at 110% of the stated value plus accrued unpaid dividends and between 61 days and 180 days at 115% of the stated value plus unpaid accrued dividends. After 180 days of the issuance date, the Company does not have the right to redeem Series E Stock. After 180 days after the issue date, Series E Stock at the stated value together with any unpaid accrued dividends are convertible into shares of common stock of the Company ~~at the Holder’s option at~~with a ~~variable conversion price calculated at 75%~~fair value of the market price defined as the lowest three average trading price during the ten trading day period ending on the latest trading day prior to the conversion date. After 18 months following the issuance date, the Company must redeem for cash Series E Stock at its stated value plus any accrued unpaid dividends and the default adjustment, if any.$114,090 resulting in a loss of extinguishment of debt of $72,930.

~~1800 Diagonal Lending LLC~~

On October 6, 2022, the Company entered into a Series E Preferred Stock Purchase Agreement (the “Agreement”) with 1800 Diagonal Lending LLC (the “Buyer”). Pursuant to the Agreement, the Company agreed to sell to Buyer ~~169,675~~ ~~shares of its Series E Convertible Preferred Stock at a purchase price of $154,250~~ ~~less transaction costs of $4,250~~ ~~for $150,000~~ ~~in cash.~~

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Two Hands co-parenting application launched on July 2018 and the Two Hands Gone application launched In February 2019. The Company ceased work on these applications in 2021.

The gocart.city online consumer grocery delivery application was released in early June 2020 and Cuore Food Services commenced sale of dry goods and produce to other businesses in July 2020.

In July 2021, the Company made the strategic decision to focus exclusively on the grocery market through three on-demand branches of its grocery businesses: gocart.city, Grocery Originals, and Cuore Food Services. All three of such branches of the Company’s business share industry standard warehouse storage space and inventory. The Company’s inventory is updated continuously and generally consists of produce, meats, pantry items, bakery & pastry goods, gluten-free goods, and organic items, acquired from various different suppliers in Canada and internationally, with whom the Company and its principals have cultivated long-term relationships.

gocart.city

gocart.city is the Company’s online delivery marketplace, allowing consumers to shop online and have their groceries delivered. The gocart.city online platform stores all inventory in the Company’s warehouse located at its head office in Mississauga. The aim of gocart.city is to deliver fresh and high-quality food products directly to retail consumers throughout Southern Ontario. The Company recently engaged local renowned chef, Grace DiFede, to curate a new line of meal kits and bundles to sell on the gocart.city platform alongside the Company’s other grocery essentials.

The gocart.city platform is available online and through applications for handheld devices supporting iOS or Android. The features and functions of gocart.city include customers having the ability to search for products by category and name, customers saving items in their cart and being able to share their cart with others, and being able to opt-in to digital weekly alerts that provide information on promotions and discounts on certain products. gocart.city also includes standard payment options for customers, such as PayPal, American Express and Visa.

The Company also employs a social media manager to oversee and increase engagement with customers by using platforms such as Facebook, Twitter, Instagram and Google. The ads that are posted on these platforms are generic branding related to the Company, as well as the promotion of particular sale items. Moreover, the Company has ~~an agreement~~agreements with SRAX, Inc. and Adfuel Media Inc. to boost such engagement.

The Company sold the gocarty.city branch on May 1, 2023.

Grocery Originals

Grocery Originals is the Company’s brick-and-mortar grocery store located in Mississauga Ontario at the site of the Company’s warehouse. Grocery Originals was originally intended for curbside pickup but has expanded into a full service store, that includes a deli, cold storage, a stone pizza oven, and offering a wide variety of fresh and specialty meals curated by Grace Di Fede.

The Company sold the Grocery Originals branch on May 1, 2023.

Cuore Food Services

Cuore Food Services is the Company’s wholesale food distribution branch. Cuore Food Services uses inventory from the Company’s warehouse as well as inventory it acquires on an ad hoc basis, and focuses on bulk delivery of goods to food service business such as restaurants, hotels, event planning/hosting businesses. Orders distributed through Cuore Food Services can be made over the phone or online through a different front-end of the gocart.city platform.

On May 1, 2023, the Company sold its gocarty.city and Grocery Originals branches. The Company continued Cuore Food Services after May 1, 2023.

2119

The operations of the business are carried on by Two Hands Canada Corporation, a wholly-owned subsidiary of the Company, incorporated under the laws of Canada on February 7, 2014.

Management's Plan of Operation

The Company is focused exclusively on the grocery market through ~~three~~its on-demand ~~branches of its~~ grocery ~~businesses: gocart.city, Grocery Originals, and~~business: Cuore Food Services.

The performance of the Company’s business during the COVID-19 pandemic illustrates the flexibility of its model as the Company was able to meet heightened demand with an assortment of products that met customer preferences. The Company is still early-on in its development but sees a highly scalable business with lower corporate fixed costs, providing protection in the event of an economic downturn.

Products and Services

The Company plans to continue to expand it reach to additional customers and geographies across Canada and continue to enhance its product offering with fresh, natural and organic foods.

~~Mobile Application~~

V2 of the gocart.city mobile application will be a subsequent release. The Company plans to further expand the features of the mobile application. Following the completion of V2 of the mobile application, the Company will consider user behaviour and plans to expand the functionality and features of the mobile application on an on-going basis going forward.

Operations and Logistics

The company plans to expand storage and warehousing, expand warehouse staff, add more delivery trucks and expand the delivery area.

~~Sales and Marketing~~

The Company plans on utilizing and leveraging its agreement with SRAX, Inc. to market its grocery delivery application and services and expand its footprint in the Ontario region and beyond as its customer base grows.

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the Financial Statements and accompanying notes. Estimates are used for, but not limited to, the accounting for the allowance for doubtful accounts, inventories, impairment of long-term assets, stock-based compensation, derivatives, income taxes and loss contingencies. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions.

We believe the following critical accounting policies, among others, may be impacted significantly by judgment, assumptions and estimates used in the preparation of the Financial Statements:

~~GOING CONCERN~~

The Company's financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. During the nine months ended September 30, 2022, the Company incurred a net loss of $18,760,538 and used cash in operating activities of $612,822, and on September 30, 2022, had stockholders’ deficit of $1,821,696. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern for a period one year from the date that the financial statements are issued. The Company will be dependent upon the raising of additional capital through placement of its common stock in order to implement its business plan. There can be no assurance that the Company will be successful in this situation. The Company is unable to predict the effect, if any, that the coronavirus COVID-19 global pandemic may have on its access to the financing markets. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might result from this uncertainty. We are currently funding our operations by way of cash advances from our Chief Executive Officer, note holders, shareholders and others. On April 14, 2022, the Company entered into a binding Grid Promissory Note and Credit Facility Agreement (the “Line of Credit”) with The Cellular Connection Ltd. Pursuant to the Line of Credit, the Company can borrow from the Lender up to CAD $750,000 in principal in increments of at least CAD $50,000 upon five business days’ notice. The funds due for repayment on May 1, 2024, and the principal bears interest at 8% per annum, payable monthly. As at the date of this Form 10-Q, CAD $100,000 have been borrowed by the Company pursuant to the Line of Credit. There can be no assurances that we will be able to receive further commitments, loans or advances from them or other persons in the future.

STOCK-BASED COMPENSATION

DERIVATIVE LIABILITY

REVENUE RECOGNITION

RECENT ACCOUNTING PRONOUNCEMENTS

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). This update amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity's own equity and improves and amends the related EPS guidance for both Subtopics. This standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2023, which means it will be effective for our fiscal year beginning January 1, 2014. Early adoption is permitted but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. We are currently evaluating the impact of ASU 2020-06 on our consolidated financial statements.

COMPARISON OF RESULTS FOR THE THREE MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2022~~2023 AND ~~2021~~2022

Sales, Cost of goods sold, Gross profit:

	Three months ended September 30,						Change						Three months ended June 30,						Change
	2022 $			2021 $			$			%			2023 $			2022 $			$			%
Sales		172,783			241,417			(68,634	)		(28	)		197,324			190,691			6,633			3
Cost of goods sold		159,124			201,609			(42,485	)		(21	)		185,108			196,969			(11,861	)		(6	)
Gross profit		13,659			39,808			(26,149	)		(66	)		12,216			(6,278	)		18,494			(295	)
Gross profit %		7.9	%		16.5	%								6.2	%		(3.3	)%

Breakdown of sales by branch:

Three months ended September 30, Change

2022
$

2021
$
$ %
gocart.city – online delivery 9,686 28,990 (19,306 ) (67 )
Grocery Originals and Cuore Food Service – retail and wholesale distribution 163,097 212,427 (49,330 ) (23 )
Total sales 172,783 241,417 (68,636 ) (28 )

	Three months ended June 30,				Change
	2023 $		2022 $		$			%
gocart.city – online delivery		362		54,677		(54,315	)		(99	)
Grocery Originals and Cuore Food Service – retail and wholesale distribution		196,962		136,014		60,948			45
Total sales		197,324		190,691		6,633			3

2321

The gocart.city grocery delivery application was released in early June 2020 and gocart.city wholesale commenced sale of dry goods and produce to other businesses in July 2020. Our gross profit is less than expected due to the expiry and write-off of inventory during the three months ended September 30, 2022. We have carefully reviewed our inventory and do not expect further significant write-offs for expired inventory during 2022. We expect our gross profit to increase to 15% by December 31, 2022 as we reduce coupons to obtain new customers.

~~Operating expenses:~~

Three months ended September 30, Change
2022
$ 2021$ $ %
Salaries and benefits 57,921 238,500 (180,579 ) (76 )
Occupancy expense 18,612 7,028 11,584 165
Advertising and travel 12,103 28,705 (16,602 ) (58 )
Auto expenses 9,415 914 8,501 930
Consulting 107,932 381,339 (273,407 ) (72 )
Depreciation and Amortization 713 411 302 73
Bad debt 8,621 — 8,621 —
Office and general expenses 23,671 6,243 17,428 279
Professional fees 55,075 30,119 24,956 83
Freight and delivery 10,389 — 10,389 —
Total operating expenses 304,452 693,259 (388,807 ) (56 )

Our total operating expenses for the three months ended September 30, 2022 was $304,452, compared to $693,259 for the three months ended September 30, 2021, respectively. The decrease in total operating expense is primarily due to a decrease in stock-based compensation paid to officers, directors and consultants.

Total operating expense includes stock-based compensation for the three months ended September 30, 2022 and 2021 which comprises of 0 and 0 shares of common stock issued valued at $0 and $0, respectively for consulting services.

Total operating expense also includes stock-based compensation for the three months ended September 30, 2022 and 2021 which comprises of 0 and 30,000 shares of common stock issued valued at $0, and $74,500, respectively, for salaries and compensation for our officers and directors.

Salaries and benefits for the three months ended September 30, 2021, also includes stock issued to officers and directors with a fair value of $184,500 and accrued but unpaid salary to Nadav Elituv, our Chief Executive Officer, of $54,000.

~~Advertising and travel includes expenses for online advertising, website, meals and entertainment.~~

For the three months ended September 30, 2022, consulting comprises primarily stock-based compensation expense (i) $0 for the expenditure of advertising credits with SRAX, Inc. (ii) $22,295 for consulting fees and (iii) $0 paid to contractors to manage our grocery business.

For the three months ended September 30, 2021, consulting comprises primarily stock-based compensation expense (i) $301,010 for the expenditure of advertising credits with SRAX, Inc. and (ii) $66,164 for consulting fees.

~~Professional fees comprise of audit, legal, filing fees and contract accountant. The increase in professional fees is primarily due our listing application with the Canadian Securities Exchange.~~

~~Other income (expense):~~

Three months ended September 30, Change

2022
$

2021
$
$ %
Amortization of debt discount and interest expense (33,287 ) (130,594 ) 97,307 (75 )
Loss on settlement of debt (735,300 ) (7,360,278 ) 6,624,978 (90 )
Change in fair value of derivative liabilities — 93,626 (93,626 ) (100 )
Total operating expenses (768,587 ) (7,397,246 ) 6,628,659 (90 )

Amortization of debt discount and interest expense for the three months ended September 30, 2022 was $33,287, compared to $130,594 for the three months ended September 30, 2021. Amortization of debt discount and interest expense relates to the issuance of non-redeemable convertible notes, convertible notes and promissory notes.

During the three months ended September 30, 2022 and 2021, the Company elected to convert $300 and $245,998 of principal and interest of a non-redeemable convertible note into 3,000,000 and 2,459,980 shares of common stock of the Company resulting in a loss on settlement of debt of $735,300 and $7,320,192, respectively.

During the three months ended September 30, 2022 and 2021, the holders of the convertible notes elected to convert principal and interest of $0 and $159,120 into 0 and 83,195 shares of the common stock with a fair value of $0 and $228,323 resulting in a loss on settlement of debt of $0 and $40,086, respectively.

~~During the three months ended September 30, 2022 and 2021, the gain (loss) due to the change in fair value of derivative liabilities was $0 and $93,626, respectively.~~

~~Net loss for the period:~~

Three months ended September 30, Change

2022
$

2021
$
$ %
Net loss attributed to Two Hands Corporation (1,059,380 ) (8,050,697 ) 6,991,317 (87 )

Our net loss for three months ended September 30, 2022 was $1,059,380, compared to $8,050,697 for the three months ended September 30, 2021, respectively. Our losses during the three months ended September 30, 2022 and 2021 are primarily due to costs associated with professional fees, our transfer agent, investor relations, stock-based compensation paid to officers, directors and consultants and loss on settlement of debt.

~~COMPARISON OF RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021~~

~~Sales, Cost of goods sold, Gross profit:~~

Nine months ended September 30, Change

2022
$

2021
$
$ %
Sales 562,513 605,498 (42,985 ) (7 )
Cost of goods sold 534,618 527,385 7,233 1
Gross profit 27,895 78,113 (50,218 ) (64 )
Gross profit % 5 % 12.9 %

~~Breakdown of sales by branch:~~

Nine months ended September 30, Change

2022
$

2021
$
$ %
gocart.city – online delivery 130,990 132,617 (1,627 ) (1 )
Grocery Originals and Cuore Food Service – retail and wholesale distribution 431,523 472,881 (41,358 ) (9 )
Total sales 562,513 605,498 (42,985 ) (7 )

The gocart.city grocery delivery application was released in early June 2020 and gocart.city wholesale commenced sale of dry goods and produce to other businesses in July 2020. Our ~~gross profit is less than expected~~revenue from gocart.city – online delivery has decreased from the previous period because we (1) have decreased advertising expenditures as part of our overall plan to reduce expenses (2) have concentrated our efforts on our wholesale business and (3) on May 1, 2023, gocart.city and Grocery Originals was sold.

Cost of goods sold as a percentage of sales decreased from 2022 to 2023. This was due to the ~~expiry and~~ write-off of ~~inventory during the nine months ended September 30, 2022. We have carefully reviewed our inventory and do not expect further significant write-offs for~~ expired inventory ~~during~~in 2022. ~~We expect our gross profit to increase to 15% by December 31, 2022 as we reduce coupons to obtain new customers.~~

Operating expenses:

	Nine months ended September 30,				Change						Three months ended June 30,					Change
	2022 $		2021 $		$			%			2023 $			2022 $		$			%
Salaries and benefits		13,692,392		350,450		13,341,942			3807			172,852			13,571,665		(13,398,813	)		(99	)
Occupancy expense		72,567		21,221		51,346			242			12,375			25,309		(12,934	)		(51	)
Advertising and travel		78,390		49,611		28,779			58			11,930			19,169		(7,239	)		(38	)
Auto expenses		33,171		9,767		23,404			240			5,502			11,739		(6,237	)		(53	)
Consulting		814,220		1,299,676		(485,456	)		(37	)		67,018			282,145		(215,127	)		(76	)
Depreciation and Amortization		4,418		1,281		3,137			245			3,219			747		2,472			331
Design		—		14,734		(14,734	)		(100	)
Bad debt		17,949		—		17,949			—			(31,940	)		9,328		(41,268	)		(442	)
Office and general expenses		119,882		163,443		(43,561	)		(27	)		14,674			21,478		(6,804	)		(32	)
Professional fees		195,596		86,821		108,775			125			19,571			58,199		(38,628	)		(66	)
Freight and delivery		57,043		—		57,043			—			2,126			21,484		(19,358	)		(90	)
Total operating expenses		15,085,628		1,997,004		13,088,624			655			277,327			14,021,263		(13,743,936	)		(98	)

Our total operating expenses for the ~~nine~~three months ended ~~September~~June 30, 2023 was $277,327, compared to $14,021,263 for the three months ended June 30, 2022, ~~was $15,085,628, compared to $1,997,004 for the nine months ended September 30, 2021,~~ respectively. The ~~increase~~decrease in total operating expense is primarily due to an ~~increase~~decrease in expenditure for prepaid advertising credits with SRAX Inc. and stock-based compensation paid to ~~officers, directors and consultants.~~

Total operating expense includes stock-based compensation for the nine months ended September 30, 2022 and 2021 which comprises of 0 and 40,500 shares of common stock issued valued at $0 and $291,000, respectively for consulting services.

Total operating expense also includes stock-based compensation for the nine months ended September 30, 2022 and 2021 which comprises of 90,000,000 and 42,000 shares of common stock issued valued at $13,500,000, and $110,850, respectively, for salaries and compensation forNadav Elituv, our ~~officers and directors.~~Chief Executive Officer.

Salaries and benefits for the ~~nine~~three months ended ~~September~~June 30, 2023, comprise primarily of accrued but unpaid salary due to Nadav Elituv, our Chief Executive Officer, of $150,000.

Salaries and benefits for the three months ended June 30, 2022, comprise primarily of stock issued to Nadav Elituv, our Chief Executive Officer with a fair value of ~~$13,504,200.~~

Salaries and benefits for the nine months ended September 30, 2021, include stock issued to officers and directors with a fair value of $220,850 and accrued but unpaid salary to Nadav Elituv, our Chief Executive Officer, of $129,600.$13,500,000.

Advertising and travel includes expenses for online advertising, website, meals and entertainment.

For the ~~nine~~three months ended ~~September~~June 30, ~~2022,~~2023, consulting comprises primarily stock-based compensation expense (i) ~~$415,866~~$0 for the expenditure of advertising credits with SRAX, Inc. (ii) ~~$156,666~~$49,091 for consulting fees and (iii) ~~$241,688~~$17,927 paid to contractors to manage our grocery business.

For the ~~nine~~three months ended ~~September~~June 30, ~~2021,~~2022, consulting comprises primarily stock-based compensation expense (i) ~~$777,933~~$143,184 for the expenditure of advertising credits with SRAX, Inc. (ii) ~~$196,336~~$65,445 for consulting fees and (iii) ~~$291,000~~$73,473 paid to contractors to manage our grocery business.

Professional fees comprise of audit, legal, filing fees and contract accountant. The ~~increase~~decrease in professional fees is primarily due to legal fees related to the prospectus dated April 21, 2022 filed with Ontario Securities Commission and British Columbia Securities Commission and our listing application with the Canadian Securities Exchange.

~~Other income (expense):~~

Nine months ended September 30, Change

2022
$

2021
$
$ %
Amortization of debt discount and interest expense (96,055 ) (261,560 ) 165,505 (63 )
Loss on settlement of debt (3,606,750 ) (10,817,203 ) 7,210,453 (67 )
Initial derivative expense — (126,322 ) 126,322 (100 )
Change in fair value of derivative liabilities — 194,750 (194,750 ) (100 )
Total operating expenses (3,702,805 ) (11,010,335 ) 7,307,530 (66 )

2622

Other income (expense):

	Three months ended June 30,						Change
	2023 $			2022 $			$			%
Amortization of debt discount and interest expense		(38,774	)		(32,570	)		(6,204	)		19
Loss on settlement of debt		(275,950	)		(2,287,450	)		2,011,500			(88	)
Gain on disposition		50,750			—			50,750			—
Total operating expenses		(263,974	)		(2,320,020	)		2,056,044			(89	)

Amortization of debt discount and interest expense for the ~~nine~~three months ended ~~September~~June 30, ~~2022~~2023 was ~~$96,055,~~$38,774, compared to ~~$261,560~~$32,570 for the ~~nine~~three months ended ~~September~~June 30, ~~2021.~~2022. Amortization of debt discount and interest expense relates to the issuance of non-redeemable convertible notes ~~convertible notes~~ and promissory notes.

During the ~~nine~~three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, the Company elected to convert ~~$103,140~~$41,770 and ~~$416,347~~$1,840 of principal and interest of a non-redeemable convertible note into ~~22,410,000~~417,700,000 and ~~3,552,025~~18,400,000 shares of common stock ~~with a fair value of $3,709,890 and $11,150,424~~ of the Company resulting in a loss on settlement of debt of ~~$3,606,750~~$275,950 and ~~$10,734,075,~~$2,287,450, respectively.

During the ~~nine~~three months ended ~~September~~June 30, 2023 the Company received net proceeds from the sale of gocart.city assets of $64,319 (CAD $86,742). The net proceeds comprise of the settlement $127,731 (CAD $172,261) of accounts payable and $63,412 (CAD $85,519) of account receivable with the Purchaser resulting in a gain of $50,750 (CAD $68,442).

Net loss for the period:

Three months ended June 30,

Change

2023

2022

Net loss for the period

(529,085

)

(16,347,561

)

15,818,476

(97

)

Our net loss for the three months ended June 30, 2023 was $529,085, compared to $16,347,561 for the three months ended June 30, 2022, respectively. Our losses during the three months ended June 30, 2023 and ~~2021,~~2022 are primarily due to costs associated with professional fees, compensation due to our CEO, interest expense and loss on settlement of debt.

COMPARISON OF RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

Sales, Cost of goods sold, Gross profit:

	Six months ended June 30,						Change
	2023 $			2022 $			$			%
Sales		372,769			389,730			(16,961	)		(4	)
Cost of goods sold		345,104			375,494			(30,390	)		(8	)
Gross profit		27,665			14,236			13,429			94
Gross profit %		7.4	%		3.7	%

Breakdown of sales by branch:

	Six months ended June 30,				Change
	2023 $		2022 $		$			%
gocart.city – online delivery		13,167		121,305		(108,137	)		(89	)
Grocery Originals and Cuore Food Service – retail and wholesale distribution		359,602		268,425		91,176			34
Total sales		372,769		389,730		(16,961	)		(4	)

The gocart.city grocery delivery application was released in early June 2020 and gocart.city wholesale commenced sale of dry goods and produce to other businesses in July 2020. Our revenue from gocart.city – online delivery has decrease from the ~~holders~~previous period because we (1) have decreased advertising expenditures as part of our overall plan to reduce expenses (2) have concentrated our efforts on our wholesale business and (3) On May 1, 2023, gocart.city and Grocery Originals was sold.

Operating expenses:

	Six months ended June 30,					Change
	2023 $			2022 $		$			%
Salaries and benefits		368,422			13,634,471		(13,266,049	)		(97	)
Occupancy expense		30,800			53,955		(23,155	)		(43	)
Advertising and travel		18,525			66,286		(47,761	)		(72	)
Auto expenses		13,624			23,757		(10,133	)		(43	)
Consulting		127,099			706,289		(579,190	)		(82	)
Depreciation and Amortization		6,524			3,706		2,818			76
Bad debt		(28,937	)		9,328		(38,265	)		(410	)
Office and general expenses		28,001			96,208		(68,207	)		(71	)
Professional fees		72,168			140,521		(68,353	)		(49	)
Freight and delivery		6,807			46,655		(39,848	)		(85	)
Total operating expenses		643,033			14,781,176		(14,138,143	)		(96	)

Our total operating expenses for the ~~convertible notes also elected~~six months ended June 30, 2023 was $643,033, compared to ~~convert 0 shares~~$14,781,176 for the six months ended June 30, 2022, respectively. The decrease in total operating expense is primarily due to an decrease in expenditure for prepaid advertising credits with SRAX Inc.

Salaries and ~~146,868 shares~~benefits for the six months ended June 30, 2023, comprise primarily of accrued but unpaid salary due to Nadav Elituv, our Chief Executive Officer, of $300,000.

Salaries and benefits for the ~~Company~~six months ended June 30, 2022, comprise primarily of stock issued to Nadav Elituv, our Chief Executive Officer with a fair value of $13,504,200.

Advertising and travel includes expenses for online advertising, website, meals and entertainment.

For the six months ended June 30, 2023, consulting comprises primarily stock-based compensation expense (i) $0 for the expenditure of advertising credits with SRAX, Inc. (ii) $97,878 for consulting fees and ~~$446,450~~(iii) $29,221 paid to contractors to manage our grocery business.

For the six months ended June 30, 2022, consulting comprises primarily stock-based compensation expense (i) $415,866 for the expenditure of advertising credits with SRAX, Inc. (ii) $130,171 for consulting fees and (iii) $156,051 paid to contractors to manage our grocery business.

Professional fees comprise of audit, legal, filing fees and contract accountant. The decrease in professional fees is primarily due to legal fees related to the prospectus dated April 21, 2022 filed with Ontario Securities Commission and British Columbia Securities Commission and our listing application with the Canadian Securities Exchange.

Other income (expense):

	Six months ended June 30,						Change
	2023 $			2022 $			$			%
Amortization of debt discount and interest expense		(76,451	)		(62,768	)		(13,683	)		22
Loss on settlement of debt		(393,500	)		(2,871,450	)		2,477,950			(86	)
Gain on disposition		50,750			—			50,750			—
Total operating expenses		(419,201	)		(2,934,218	)		2,515,017			(86	)

Amortization of debt discount and interest expense for the six months ended June 30, 2023 was $76,451, compared to $62,768 for the six months ended June 30, 2022. Amortization of debt discount and interest expense relates to the issuance of non-redeemable convertible notes and promissory notes.

During the six months ended June 30, 2023 and 2022, the Company elected to convert $45,920 and $2,871,450 of principal and interest of a non-redeemable convertible note into 459,200,000 and 19,410,000 shares of common stock of the Company resulting in a loss on settlement of debt of $0$393,500 and ~~$83,127,~~$2,871,450, respectively.

Initial derivative expense of $126,322 for the nine months ended September 30, 2021 represents the difference between the fair value of the total embedded derivative liability of 351,322 and the cash received of $225,000 for the convertible note issued on February 23, 2021.

During the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 the Company received net proceeds from the sale of gocart.city assets of $64,076 (CAD $86,742). The net proceeds comprise of the settlement $127,249 (CAD $172,261) of accounts payable and ~~2021,~~$63,173 (CAD $85,519) of account receivable with the Purchaser resulting in a gain ~~(loss) due to the change in fair value~~ of ~~derivative liabilities was $0 and $194,750, respectively.~~

$50,750 (CAD $68,442).

Net loss for the period:

Nine months ended September 30, Change

2022
$

2021
$
$ %
Net loss attributed to Two Hands Corporation (18,760,538 ) (12,929,226 ) (5,831,312 ) 45

Six months ended June 30,

Change

2023

2022

Net loss for the period

(1,034,569

)

(17,701,158

)

16,666,590

(94

)

Our net loss for ~~nine~~the six months ended ~~September~~June 30, ~~2022~~2023 was ~~$18,760,538,~~$1,034,569, compared to ~~$12,929,226~~$17,701,158 for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, respectively. Our losses during the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022 are primarily due to costs associated with professional fees, compensation due to our ~~transfer agent, investor relations, stock-based compensation paid to officers, directors and consultants~~CEO, interest expense and loss on settlement of debt.

QUARTERLY RESULTS OF OPERATIONS

The following is a summary of selected quarterly information that has been derived from the financial statements of the Company. This summary should be read in conjunction with the consolidated financial statements of the Company.

Quarter Ended	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020			June 301, 2023			March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021
Sales	$	172,782		$	190,691		$	199,039		$	324,748		$	241,417		$	174,774		$	189,157		$	96,194		$	197,324		$	175,446		$	168,790		$	172,782		$	190,691		$	199,039		$	324,748		$	241,417
Gross profit (loss)	$	13,659		$	(6,278	)	$	20,514		$	19,117		$	39,808		$	19,808		$	18,547		$	16,320
Gross profit																									$	12,216		$	15,449		$	21,299		$	13,659		$	(6,278	)	$	20,514		$	19,117		$	39,808
Operating expenses	$	(304,452	)	$	14,021,263	)	$	(759,913	)	$	(1,270,225	)	($	(693,259	)	$	(446,806	)	$	(856,989	)	$	(836,932	)	$	(277,327	)	$	(365,706	)	$	(2,759,699	)	$	(304,452	)	$	(14,021,263	)	$	(759,913	)	$	(1,270,225	)	$	(693,259	)
Other income (expense)	$	768,587	)	$	(2,320,020	)	$	(614,198	)	$	(2,155,703	)	$	(7,397,246	)	$	(1,560,110	)	$	(2,052,979	)	$	(626,383	)	$	(263,974	)	$	(155,227	)	$	(194,173	)	$	(768,587	)	$	(2,320,020	)	$	(614,198	)	$	(2,155,703	)	$	(7,397,246	)
Net loss for the period	$	(1,059,380	)	$	(16,347,561	)	$	(1,353,597	)	$	(3,406,811	)	$	(8,050,697	)	$	(1,987,108	)	$	(2,891,421	)	$	(1,446,995	)	$	(529,085	)	$	(505,484	)	$	(2,932,573	)	$	(1,059,380	)	$	(16,347,561	)	$	(1,353,597	)	$	(3,406,811	)	$	(8,050,697	)
Basic and diluted net loss per share	$	(0.01	)	$	(0.18	)	$	(0.20	)	$	(0.63	)	$	(2.68	)	$	(1.26	)	$	(2.99	)	$	(2.64	)	$	(0.00	)	$	(0.00	)	$	(0.02	)	$	(0.01	)	$	(0.18	)	$	(0.20	)	$	(0.63	)	$	(2.68	)

2725

LIQUIDITY AND CAPITAL RESOURCES

For the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023

Cash flows used in operating activities

Nine months ended September 30, Change

2022
$

2021
$
$ %
Net cash used in operating activities (612,822 ) (300,033 ) (312,789 ) 104

Six months ended June 30,

Change

2023

2022

Net cash used in operating activities

(313,061

)

(506,838

)

193,777

(38

)

Our net cash used in operating activities for the ~~nine~~six months ended ~~September~~June 30, 2023 and 2022 is $313,061 and ~~2021 is $612,822 and $300,033,~~$506,838, respectively. Our net loss for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 of ~~$18,760,538~~$1,034,569 was the main contributing factor for our negative cash flow. We were able to mostly offset the cash used in operating activities by using our stock to pay for expenses such as, amortization of ~~prepaid expense of $576,745, stock-based compensation of $13,504,200, amortization of~~ debt discount of ~~$96,055~~$76,451 and loss on debt settlement of ~~$3,606,750.~~$393,500.

Cash flows used in investing activities

Nine months ended September 30, Change

2022
$

2021
$
$ %
Net cash used in investing activities (9,784 ) (1,945 ) (7,839 ) 403

Six months ended June 30,

Change

2023

2022

Net cash used in investing activities

—

Our net cash (used in) provided by investing activities for the ~~nine~~six months ended ~~September~~June 30, 2023 and 2022 ~~and 2021~~ is ~~$9,784 and $1,945, respectively.~~$0.

Cash flows from financing activities

Nine months ended September 30, Change

2022
$

2021
$
$ %
Net cash from financing activities 118,791 1,070,808 (952,017 ) (89 )

Six months ended June 30,

Change

2023

2022

Net cash from financing activities

304,272

25,840

278,432

1,078

Our net cash provided by financing activities for the ~~nine~~six months ended ~~September~~June 30, 2023 and 2022 is ~~$118,791~~$304,272 and ~~$1,070,808,~~$25,840, respectively. Cash from financing activities in 2022 is primarily due to net advances from related party. Cash from financing activities in 2021 is primarily due to the issuance of convertible notes, non-redeemable notes, promissory notes and Series B Stock.

~~As of September~~During the six months ended June 30, 2022, we had cash of $20,846, working capital of $1,971,926 and total liabilities of $1,650,292. We believe our current cash balance is sufficient to fund our operations during the next 12 months because on April 14, 2022,2023, the Company ~~entered into a binding Grid Promissory Note and Credit Facility Agreement (the “Line~~received $174,685 (CAD $235,583) in cash from its line of ~~Credit”)~~credit with The Cellular Connection Ltd. ~~Pursuant to the Line~~dated April 14, 2022, net cash advances from related party of ~~Credit, the Company can borrow~~$31,517 and net proceeds from ~~the Lender up to CAD $750,000 in principal in increments~~notes payable of ~~at least CAD $50,000 upon five business days’ notice.~~$98,070. The ~~funds due for repayment on May 1, 2024,~~cash advances are non-interest bearing, unsecured and ~~the principal bears interest at 8% per annum, payable monthly. As at the date~~have no specific terms of this Form 10-Q, CAD $100,000 have been borrowed by the Company pursuant to the Line of Credit the Company does not expect significant cash outlays for advertising in the next year as there are $2,436,811 in advertising credits with SRAX, Inc. included in prepaid expense and we expect to reduce the cash expended on contractors in the next year as we plan to pay them in shares of the Company.repayment.

SRAX Inc. provides online advertising services to the Company. SRAX, Inc. during the three months September 30, 2022 had operational issues which prevented the Company from using its prepaid advertising credits. These prepaid advertising credits have a carrying valueAs of $2,436,811 at September 30, 2022. The Company believes that it is probable that SRAX, Inc. will resolve its operational issues during the quarter ended December 31, 2022 and resume providing advertising services to the Company. It is possible this assessment could change at December 31, 2022, which may cause the Company to write-off part or all this prepaid asset. If SRAX, Inc. does not resume advertising services to the Company, the Company expects the 80,000 shares of Series C Convertible Preferred Stock issued on June 30, ~~2022 to SRAX, Inc. with a carrying value~~2023, we had cash of ~~$2,288,000 will be returned to the Company for cancellation.~~$8,615, working capital (deficiency) of $(1,300,446) and total liabilities of $2,245,395.

Our working capital as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021~~2022 is as follows:

	September 30, 2022		December 31, 2021		June 30, 2023			December 31, 2022
Current assets	$	2,734,453	$	1,608,848	$	172,135		$	193,097
Current liabilities		762,527		552,998		1,472,581			784,473
Working capital	$	1,971,926	$	1,055,850
Working capital (Deficiency)					$	(1,300,446	)	$	(591,376	)

The Company is continuing to focus improving cash flows from operations by reducing incentives to customers, by making purchases from different suppliers, accelerating the collection of accounts receivable, reducing expenses, managing accounts payable balances and by paying our officers, directors, consultants and staff with our stock.

The Company’s financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, the Company incurred a net loss of ~~$18,760,538~~$1,034,569 and used cash in operating activities of ~~$612,822~~$313,061, and on ~~September~~June 30, ~~2022,~~2023, had stockholders’ deficit of ~~$1,821,696.~~$4,579,367 and an accumulated deficit of $84,957,085. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. The Company’s independent registered public accounting firm, in their report on the Company’s financial statements for the ~~year~~six months ended ~~December 31, 2021,~~June 30, 2023, expressed substantial doubt about the Company’s ability to continue as a going concern. The Company’s financial statements do not include any adjustments that might result from the outcome of this uncertainty should we be unable to continue as a going concern.

Over the next 12 months we expect to ~~expend~~spend approximately $268,000 in cash for legal, accounting and related services and to implement our business plan.

Cash Required to Implement of Business Plan
Operations and Logistics $ 20,000
General and Administration 248,000
Total Estimated Cash Expenditures $ 268,000

We hope to be able to compensate our independent contractors with stock-based compensation, which will not require us to use our cash, although there can be no assurances that we will be successful in these efforts.

	Cash Required to Implement of Business Plan
General and Administration	$	268,000
Total Estimated Cash Expenditures	$	268,000

~~We believe we have sufficient cash to pay for our business plan and to pay for our other overhead costs for the next twelve months because on~~

On April 14, 2022, the Company entered into a binding Line of Credit with The Cellular Connection Ltd. Pursuant to the Line of Credit, the Company can borrow from the Lender up to CAD $90,499 (CAD $750,000 available on the Line of Credit less CAD $659,501 of funds drawn and outstanding at August 6, 2023) in principal. If required, we expect to be able to secure additional capital through advances from our Chief Executive Officer, note holders, shareholders and others in order to pay expenses such as organizational costs, filing fees, accounting fees and legal fees, however, we do not have any written or oral agreements with any other third parties which require them to fund our operations. Although there can be no assurances that we will be able to obtain such funds in the future, the Company has been able to secure financing to continue operations since its inception on April 3, 2009. We are currently quoted on OTC ~~Pink. The Company is unable to predict the effect, if any, that the coronavirus COVID-19 global pandemic may have on its access to the financing markets.~~Pink.. If we need additional capital in the next twelve months and if we cannot raise such capital on acceptable terms, we may have to curtail our operations or terminate our business entirely.

The inability to obtain financing or generate sufficient cash from operations could require us to reduce or eliminate expenditures for developing products and services, or otherwise curtail or discontinue our operations, which could have a material adverse effect on our business, financial condition and results of operations. Furthermore, to the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities may result in dilution to existing stockholders. If we raise additional funds through the issuance of debt securities, these securities may have rights, preferences and privileges senior to holders of our common stock and the terms of such debt could impose restrictions on our operations. Regardless of whether our cash assets prove to be inadequate to meet our operational needs, we ~~will~~may seek to compensate providers of services by issuing stock in lieu of cash, which may also result in dilution to existing stockholders.

We are currently funding our operations by way of cash advances from our Chief Executive Officer, note holders, shareholders and others. We hope to be able to compensate our independent contractors with stock-based compensation, which will not require us to use our cash, although there can be no assurances that we will be successful in these efforts. On April 14, 2022, the Company entered into a binding Line of Credit with The Cellular Connection Ltd. Pursuant to the Line of Credit, the Company can borrow from the Lender up to CAD $750,000 in principal. We believe our current cash balance and the Line of Credit is sufficient to fund our operations during the next 12 months The loans from our Chief Executive Officer, note holders, shareholders and others are unsecured and non-interest bearing and have no set terms of repayment. Our common stock started trading over the counter and has been quoted on the Over-The Counter Bulletin Board since February 17, 2011. The stock currently trades under the symbol “TWOH.OB.”

Commitments for future capital expenditures at ~~September~~June 30, ~~2022~~2023 is as follows:

	Payments Due by Period
Contractual obligations	Total $		Less than 1 year $		1 - 3 years $		4 – 5 years $		After 5 years $
Accounts payable and accrued liabilities		407,924		407,924		—		—		—
Debt		1,278,785		1,040,257		238,528		—		—
Deferred revenue		15,792		15,792		—		—		—
Non-redeemable convertible notes		523,038		—		523,038		—		—
Financial lease Obligations		—		—		—		—		—
Operating leases⁽¹⁾		19,855		8,607		11,248		—		—
Purchase obligations		—		—		—		—		—
Total contractual obligations		2,245,394		1,472,580		772,814		—		—

Payments Due by Period
Contractual obligations
Total
$

Less than 1 year
$

1 - 3 years
$

4 – 5 years
$

After 5 years
$
Accounts payable and accrued liabilities 685,944 685,944 —   —   —
Debt 425,490 46,783 73,006 305,701 —
Deferred revenue 21,774 21,774 —   —   —
Non-redeemable convertible notes 492,023 —   —   492,023 —
Financial lease Obligations —   —   —   —   —
Operating leases⁽¹⁾ 25,061 8,026 17,035 —   —
Purchase obligations —   —   —   —   —
Total contractual obligations 1,650,292 762,527 90,041 797,724 —

Notes:

(1)

Leases for retail space, equipment and warehousing is currently month to month. Deliveries are currently outsourced.

OPERATING CAPITAL AND CAPITAL EXPENDITURE REQUIREMENTS

We are currently funding our operations by way of cash advances from our Chief Executive Officer, note holders, shareholders and others. We hope to be able to compensate our independent contractors with stock-based compensation, which will not require us to use our cash, although there can be no assurances that we will be successful in these efforts. On April 14, 2022, the Company entered into a binding Line of Credit with The Cellular Connection Ltd. Pursuant to the Line of Credit, the Company can borrow from the Lender up to up to CAD $90,499 (CAD $750,000 available on the Line of Credit less CAD $659,501 of funds drawn and outstanding at August 6, 2023) in principal. We believe our current cash balance and the Line of Credit is sufficient to fund our operations during the next 12 months The loans from our Chief Executive Officer, note holders, shareholders and others are unsecured and non-interest bearing and have no set terms of repayment. Our common stock started trading over the counter and has been quoted on the Over-The Counter Bulletin Board since February 17, 2011. The stock currently trades under the symbol “TWOH.OB.”

RELATED PARTY TRANSACTIONS

~~Nine~~Six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022

Due to Related Party

As of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, advances and accrued salary of ~~$40,715~~$431,855 and ~~$39,985,~~$185,473, respectively, were due to Nadav Elituv, the Company's Chief Executive Officer. The balance is non-interest bearing, unsecured and have no specified terms of repayment.

During the ~~nine~~six months ended ~~September~~June 30, 2023 and 2022, the Company issued advances due to related party for ~~$133,156~~$52,266 of expenses paid on behalf of the Company and advances due to related party were repaid by the Company with ~~$92,325~~$20,749 in cash. In addition, the Company accrued salary of ~~$146,916~~$399,739 due to Nadav Elituv for the ~~nine~~six months ended ~~September~~June 30, 2023. On February 2, 2022, ~~and~~the Company issued ~~a promissory note for $77,308~~common stock to settle due to related ~~party.~~party with a carrying value of $188,871 (Note 10).

During the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, the Company issued advances due to related party for ~~$90,680~~$97,079 of expenses paid on behalf of the Company and advances due to related party were repaid by the Company with ~~$83,747~~$71,239 in cash. In addition, the Company accrued salary of ~~$129,600~~$99,013 due to Nadav Elituv for the ~~nine~~six months ended ~~September~~June 30, ~~2021, issued 60,000 shares of Series A Convertible Preferred Stock with a fair value of $207,500 to settled salary due~~2022 and issued a promissory note for ~~$19,572~~$82,740 to settle due to related party.

During the ~~nine~~six months ended ~~September~~June 30, 2023 and 2022, the Company paid Linus Creative Services, a business ~~owned~~controlled by Bradley Southam, a director orof the Company, ~~$25,259~~$2,720 and $16,984, respectively, for advertising services.

Promissory ~~Note~~Notes – Related Party

As of ~~September~~June 30, 2023 and December 31, 2022, promissory note – related party of ~~$81,173~~$0 and $84,377 (principal ~~$77,308~~$78,490 and interest of ~~$3,865) and $0,~~$5,887), respectively, were outstanding. The promissory notes – related party bear interest of 10% per annum, are unsecured, mature on December 31, 2025 and are due to 2130555 Ontario Limited, a Company controlled by Nadav Elituv, the Company's Chief Executive Officer.

~~During the nine months ended September 30, 2021,~~ On February 2, 2023, the Company issued common stock to settle promissory ~~notes~~note – related party and interest with a carrying value of ~~$19,572 for $3,400 to settle accrued liabilities and $16,172 of expenses paid on behalf of the Company.~~$85,922 (Note 10).

Our policy with regard to transactions with related persons or entities is that such transactions must be on terms no less favorable than could be obtained from non-related persons.

The above related party transactions are not necessarily indicative of the amounts that would have been incurred had a comparable transaction been entered into with an independent party. The terms of these transactions were more favorable than would have been attained if the transactions were negotiated at arm's length.

PROPOSED TRANSACTIONS

The Company is not anticipating any transactions.

CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION

Refer to Note 2 in the ~~condensed~~ consolidated financial statements for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and Note 2 in the ~~condensed~~ consolidated financial statement for the ~~nine months~~year ended ~~September 30,~~December 31, 2022 for information on accounting policies.

FINANCIAL INSTRUMENTS

The main risks of the Company’s financial instrument are exposed to are credit risk, market risk, foreign exchange risk, and liquidity risk.

Credit risk

The Company’s credit risk is primarily attributable to trade receivables. Trade receivables comprise of amounts due from other businesses from the sale of groceries and dry goods. The Company mitigates credit risk through approvals, limits and monitoring. The amounts disclosed in the consolidated balance sheet are net of allowances for expected credit losses, estimated by the Company’s management based on past experience and specific circumstances of the customer. The Company manages credit risk for cash by placing deposits at major Canadian financial institutions.

Market risk

Market risk is the risk that changes in market prices and interest rates will affect the Company’s net earnings or the value of financial instruments. These risks are generally outside the control of the Company. The objective of the Company is to mitigate market risk exposures within acceptable limits, while maximizing returns. The Company’s market risk consists of risks from changes in foreign exchange rates, interest rates and market prices that affect its financial liabilities, financial assets and future transactions.

Refer to Note 2 in the ~~condensed~~ consolidated financial statements for the ~~nine~~six months ~~September~~ended June 30, ~~2022~~2023 and Note 2 in the ~~condensed~~ consolidated financial ~~statements.~~statements for the year ended December 31, 2022 for information on market risk.

Foreign Exchange risk

Our revenue is derived from operations in Canada. Our consolidated financial statements are presented in U.S. dollars and our liabilities other than trade ~~payable~~payables are primarily due in U.S. dollars. The revenue we earn in Canadian dollars is adversely impacted by the increase in the value of the U.S. dollar relative to the Canadian dollar.

Liquidity risk

Liquidity risk relates to the risk the Company will encounter difficulty in meeting its obligations associated with financial liabilities. The financial liabilities on our consolidated balance sheets consist of accounts payable and accrued liabilities, due to related party, notes payable, convertible notes, net, derivative liabilities, promissory notes, promissory notes – related party and non-redeemable convertible notes, Management monitors cash flow requirements and future cash flow forecasts to ensure it has access to funds through its existing cash and from operations to meet operational and financial obligations. The Company believes it has sufficient liquidity to meet its cash requirements for the next twelve months.

OUTSTANDING SHARE DATA

As of ~~November 14, 2022,~~August 6, 2023, the following securities were outstanding:

Common stock: ~~132,402,624~~1,030,558,548 shares

Series A Convertible Preferred Stock: 25,000

Series ~~B Convertible Preferred Stock: 11,000~~

~~Series~~ C Convertible Preferred Stock: ~~90,000~~

~~Series E Convertible Preferred Stock: 169,675~~80,000

OFF-BALANCE SHEET TRANSACTIONS

We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a Smaller Reporting Company, as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item.

ITEM 4T. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

As required by Rule 13a-15 of the Securities Exchange Act of 1934, our principal executive officer and principal financial officer evaluated our company's disclosure controls and procedures (as defined in Rules 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that as of the end of the period covered by this report, these disclosure controls and procedures were not effective to ensure that the information required to be disclosed by our company in reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities Exchange Commission and to ensure that such information is accumulated and communicated to our company's management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. The conclusion that our disclosure controls and procedures were not effective was due to the presence of the following material weaknesses in internal control over financial reporting which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both United States generally accepted accounting principles and Securities and Exchange Commission guidelines. Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated.

We plan to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending December 31, ~~2022,~~2023, subject to obtaining additional financing: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out above are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

There were no changes in our internal control over financial reporting during the quarter ended ~~September~~June 30, ~~2022~~2023 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

3230

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We may be involved from time to time in ordinary litigation, negotiation and settlement matters that will not have a material effect on our operations or finances. We are not aware of any pending or threatened litigation against our Company or our officers and directors in their capacity as such that could have a material impact on our operations or finances.

ITEM 1A. RISK FACTORS

A smaller reporting company is not required to provide the information required by this Item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

~~During~~For the three months ended ~~September~~June 30, ~~2022,~~2023, the Company elected to convert ~~$300~~$41,770 of principal and interest of a non-redeemable convertible ~~note~~notes into ~~3,000,000~~417,700,000 shares of common stock of the Company with a fair value of $317,720 resulting in a loss ~~on settlement~~of extinguishment of debt of ~~$735,300.~~$275,950.

On ~~September 26, 2022,~~May 12, 2023, the ~~Holders~~Company issued 32,000 shares of common stock to satisfy an obligation for common stock to be issued with a carrying value of $336,000.

On May 16, 2023, the Holder of Series B Stock elected to convert ~~6,000~~4,000 shares of Series B Stock into ~~6,000,000~~4,000,000 shares of common ~~stock.~~stock resulting in a $39,921 reduction in the carrying value of Series B Stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

During the quarter ended ~~September~~June 30, ~~2022,~~2023, we did not have any defaults upon senior securities.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION.

Not applicable.

3331

ITEM 6. EXHIBITS

Incorporated by reference
Exhibit Exhibit Description Filed herewith Form Period ending Exhibit Filing date
3.1 Certificate of Incorporation, dated April 3, 2009 S-1 3.1 6/22/2010
3.2 Bylaws, dated April 3, 2009 S-1 3.2 6/22/2010
3.3 Certificate of Amendment to the Certificate of Incorporation, dated August 8, 2013 10-Q 6/30/2013 3.3 8/14/2013
3.4 Certificate of Amendment to the Certificate of Incorporation, dated July 27, 2016 8-K 9/1/2016 3.1 9/1/2016
3.5 Certificate of Amendment to the Certificate of Incorporation, dated August 27, 2018 8-K 9/10/2018 3.1 9/10/2018
3.6 Certificate of Amendment to the Certificate of Incorporation, dated November 18, 2019 8-K 12/12/2019 3.1 12/12/2019
3.7 Certificate of Amendment to the Certificate of Incorporation, dated July 16, 2021 8-K 7/16/2021 3.1 7/22/2021
3.8 Certificate of Amendment to the Certificate of Incorporation, dated January 3, 2022 8-K 1/3/2022 3.1 1/6/2022
3.9
Certificate of Amendment to the Certificate of Incorporation, As Amended, dated
March 21, 2022
8-K 4/25/2022 3.1 4/26/2022
4.1 Specimen Stock Certificate S-1 4.1 6/22/2010
4.2 Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock, dated August 6, 2013 10-Q 6/30/2013 4.2 8/14/2013
4.3 Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock, dated December 12, 2019
8-K

12/12/2019

3.1

12/19/2019

4.4 Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock, dated October 7, 2020 8-K 10/07/2020 3.1 10/08/2020
4.5 Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock, dated June 24, 2021 8-K 6/24/2021 3.1 7/1/2021
4.6 Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock, dated September 1, 2021 8-K 9/1/2021 3.1 9/1/2021
4.7 Amended and Restated Designation of Series A Convertible Preferred Stock of Two Hands Corporation, dated April 21, 2022 8-K 4/21/2022 3.1 4/26/2022
4.8 Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock, dated July 5, 2022 10-Q 6/30/2022 4.8 8/15/2022
4.9 Certificate of Designation, Preference and Rights of Series E Preferred Stock, dated October 3, 2022 8-K 10/4/2022 3.1 10/11/2022
10.1 Innovative Product Opportunities Inc. Trust Agreement S-1 10.1 6/22/2010
10.2 Side Letter Agreement, The Cellular Connection Ltd., dated January 8, 2018 10-K 12/31/2017 10.2 3/29/2018
10.3 Side Letter Agreement, Stuart Turk, dated January 8, 2018 10-K 12/31/2017 10.3 3/29/2018
10.4 Side Letter Agreement, Jordan Turk, dated April 12, 2018 10-Q 3/31/2018 10.4 5/21/2018
10.5 Side Letter Agreement, Jordan Turk, dated May 10, 2018 10-Q 3/31/2018 10.5 5/21/2018
10.6 Side Letter Agreement, Jordan Turk, dated September 13, 2018 10-K
12/31/2018

10.6 4/1/2019
10.7 Side Letter Agreement, The Cellular Connection Ltd., dated January 31, 2019 10-K 12/31/2018 10.7 4/1/2019
10.8 Side Letter Agreement, Stuart Turk, dated January 31, 2019 10-K 12/31/2018 10.8 4/1/2019
31.1 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X
32.1 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X
101.INS XBRL Instance Document – the instance document does not appear in the Interactive Data Files as its XBRL tags are embedded within the Inline XBRL document X
101.SCH XBRL Taxonomy Extension Schema Document X
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document X
101.LAB XBRL Taxonomy Extension Label Linkbase Document X
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document X
101.DEF XBRL Taxonomy Extension Definition Linkbase Definition X
104 Cover page formatted as Inline XBRL and contained in Exhibit 101 X

			Incorporated by reference
Exhibit	Exhibit Description	Filed herewith	Form	Period ending	Exhibit	Filing date
3.1	Certificate of Incorporation, dated April 3, 2009		S-1		3.1	6/22/2010
3.2	Bylaws, dated April 3, 2009		S-1		3.2	6/22/2010
3.3	Certificate of Amendment to the Certificate of Incorporation, dated August 8, 2013		10-Q	6/30/2013	3.3	8/14/2013
3.4	Certificate of Amendment to the Certificate of Incorporation, dated July 27, 2016		8-K	9/1/2016	3.1	9/1/2016
3.5	Certificate of Amendment to the Certificate of Incorporation, dated August 27, 2018		8-K	9/10/2018	3.1	9/10/2018
3.6	Certificate of Amendment to the Certificate of Incorporation, dated November 18, 2019		8-K	12/12/2019	3.1	12/12/2019
3.7	Certificate of Amendment to the Certificate of Incorporation, dated July 16, 2021		8-K	7/16/2021	3.1	7/22/2021
3.8	Certificate of Amendment to the Certificate of Incorporation, dated January 3, 2022		8-K	1/3/2022	3.1	1/6/2022
3.9	Certificate of Amendment to the Certificate of Incorporation, As Amended, dated March 21, 2022		8-K	4/25/2022	3.1	4/26/2022
4.1	Specimen Stock Certificate		S-1		4.1	6/22/2010
4.2	Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock, dated August 6, 2013		10-Q	6/30/2013	4.2	8/14/2013
4.3	Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock, dated December 12, 2019		8-K	12/12/2019	3.1	12/19/2019
4.4	Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock, dated October 7, 2020		8-K	10/07/2020	3.1	10/08/2020
4.5	Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock, dated June 24, 2021		8-K	6/24/2021	3.1	7/1/2021
4.6	Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock, dated September 1, 2021		8-K	9/1/2021	3.1	9/1/2021
4.7	Amended and Restated Designation of Series A Convertible Preferred Stock of Two Hands Corporation, dated April 21, 2022		8-K	4/21/2022	3.1	4/26/2022
4.8	Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock, dated July 5, 2022		10-Q	6/30/2022	4.8	8/15/2022
4.9	Certificate of Designation, Preference and Rights of Series E Preferred Stock, dated October 3, 2022		8-K	10/4/2022	3.1	10/11/2022
10.1	Innovative Product Opportunities Inc. Trust Agreement		S-1		10.1	6/22/2010
10.2	Side Letter Agreement, The Cellular Connection Ltd., dated January 8, 2018		10-K	12/31/2017	10.2	3/29/2018
10.3	Side Letter Agreement, Stuart Turk, dated January 8, 2018		10-K	12/31/2017	10.3	3/29/2018
10.4	Side Letter Agreement, Jordan Turk, dated April 12, 2018		10-Q	3/31/2018	10.4	5/21/2018
10.5	Side Letter Agreement, Jordan Turk, dated May 10, 2018		10-Q	3/31/2018	10.5	5/21/2018
10.6	Side Letter Agreement, Jordan Turk, dated September 13, 2018		10-K	12/31/2018	10.6	4/1/2019
10.7	Side Letter Agreement, The Cellular Connection Ltd., dated January 31, 2019		10-K	12/31/2018	10.7	4/1/2019
10.8	Side Letter Agreement, Stuart Turk, dated January 31, 2019		10-K	12/31/2018	10.8	4/1/2019
31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	X
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X

3432

101.INS	XBRL Instance Document – the instance document does not appear in the Interactive Data Files as its XBRL tags are embedded within the Inline XBRL document	X
101.SCH	XBRL Taxonomy Extension Schema Document	X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	X
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Definition	X
104	Cover page formatted as Inline XBRL and contained in Exhibit 101	X

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	TWO HANDS CORPORATION


~~November~~August 14, ~~2022~~2023	By: /s/ Nadav Elituv Nadav Elituv, President, Chief Executive Officer and Director (Principal Executive Officer)

	By: /s/ Steven Gryfe Steven Gryfe, Chief Financial Officer (Principal Financial and Accounting Officer)

3534


		For the three months ended September 30,						For the nine months ended September 30,
		2022			2021			2022			2021

Sales	$	172,783		$	241,417		$	562,513		$	605,498
Cost of goods sold		159,124			201,609			534,618			527,385
Gross profit		13,659			39,808			27,895			78,113

Operating expenses
General and administrative		304,452			693,259			15,085,628			1,997,004
Total operating expenses		304,452			693,259			15,085,628			1,997,004

Loss from operations		(290,793	)		(653,451	)		(15,057,733	)		(1,918,891	)

Other income (expense)
Amortization of debt discount and interest expense		(33,287	)		(130,594	)		(96,055	)		(261,560	)
Loss on settlement of debt		(735,300	)		(7,360,278	)		(3,606,750	)		(10,817,203	)
Initial derivative expense		—			—			—			(126,322	)
Change in fair value of derivative liabilities		—			93,626			—			194,750
Total other income (expense)		(768,587	)		(7,397,246	)		(3,702,805	)		(11,010,335	)

Net loss attributable to Two Hands Corporation		(1,059,380	)		(8,050,697	)		(18,760,538	)		(12,929,226	)

Less: deemed dividend - Series A Stock modification		—			—			(1,396,721	)		—
Add: deemed contribution - Series B Stock modification		—			—			1,354,515			—
Add: deemed contribution - Series C Stock modification		—			—			834,001			—
Add: deemed contribution - Series D Stock modification		—			—			749,085			—

Net loss attributable to Two Hands Corporation common shareholders	$	(1,059,380	)	$	(8,050,697	)	$	(17,219,658	)	$	(12,929,226	)

Other comprehensive income (loss)
Foreign exchange income		36,227			—			37,928			—
Total other comprehensive income		36,227			—			37,928			—

Comprehensive loss	$	(1,023,153	)	$	(8,050,697	)	$	(17,181,730	)	$	(12,929,226	)

Net loss per common share - basic and diluted	$	(0.01	)	$	(2.68	)	$	(0.24	)	$	(6.97	)

Weighted average number of common shares outstanding - basic and diluted		125,175,444			2,998,955			71,802,843			1,854,661

The accompanying footnotes are an integral part of these unaudited financial statements.


	For the nine months ended September 30,
	2022			2021
Cash flows from operating activities
Net loss	$	(18,760,538	)	$	(12,929,226	)
Adjustments to reconcile net loss to cash used in operating activities

Depreciation and amortization		8,603			1,281
Bad debt		17,949			—
Stock-based compensation		13,504,200			511,850
Amortization of debt discount		96,055			261,560
Loss on settlement of debt		3,606,750			10,817,203
Initial derivative expense		—			126,322
Change in fair value of derivative liabilities		—			(194,750	)
Reduction in ROU liability		(6,246	)		—
Change in operating assets and liabilities
Accounts and taxes receivable		(38,267	)		(85,273	)
Prepaid expense		576,745			958,282
Inventory		68,239			—
Deferred revenue		23,388			—
Accounts payable and accrued liabilities		290,300			232,718
Net cash used in operating activities		(612,822	)		(300,033	)

Cash flows from investing activities
Purchase of property and equipment		(9,784	)		(1,945	)
Net cash used in investing activities		(9,784	)		(1,945	)

Cash flow from financing activities
Advances by related party		133,156			90,680
Repayment of advances to related party		(92,325	)		(83,747	)
Proceeds from notes payable		—			14,895
Proceeds from issuance of shares		—			789,006
Proceeds from promissory notes		77,960			19,151
Proceeds from non-redeemable convertible		—			15,823
Proceeds from convertible notes		—			225,000
Net cash provided by financing activities		118,791			1,070,808

Change in foreign exchange		(8,634	)		15,075

Net change in cash		(512,449	)		783,905

Cash, beginning of the period		533,295			21,843

Cash, end of the period	$	20,846		$	805,748

Cash paid during the year
Interest paid	$	—		$	—
Income taxes paid	$	—		$	—

Supplemental disclosure of non-cash investing and financing activities
Stock issued to settle accounts payable and accrued liabilities	$	—		$	207,500
Stock issued to settle non-redeemable convertible notes	$	3,709,890		$	11,150,424
Stock issued to settle convertible notes	$	—		$	446,450
Stock issued for prepaid expense	$	2,288,000		$	1,153,571
Initial debt discount from derivative	$	—		$	225,000
Transfer of notes payable to promissory notes	$	—		$	91,192
Transfer of accounts payable and accrued liabilities to promissory notes	$	85,285		$	29,450
Transfer of due to related party to promissory notes - related party	$	—		$	19,572
Deemed dividend - Series A Stock modification	$	1,396,721		$	—
Deemed contribution - Series B Stock modification	$	1,354,515		$	—
Deemed contribution - Series C Stock modification	$	834,001		$	—
Deemed contribution - Series D Stock modification	$	749,085		$	—

	Operating Lease Liability Maturity
Periods ending December 31,		Operating Lease Commitments
	2022	$	2,515
	2023		10,058
	2024		10,058
	2025		7,544
	Total operating lease commitments		30,175
	Less: imputed interest		(5,114	)
	Total right-of-use liability	$	25,061

	Cash Required to Implement of Business Plan
Operations and Logistics	$	20,000
General and Administration		248,000
Total Estimated Cash Expenditures	$	268,000