| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis
of Presentation The
Company follows the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America
(“U.S. GAAP”) and has a year-end of December 31. Management
further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of
internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed
to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded
in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations
and cash flows of the Company for the respective periods being presented. The
unaudited consolidated financial statements of the Company for the three month periods ended March 31, 2023 and 2022 have been prepared
in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant
to the requirements for reporting on Form 10-Q and Regulation S-K. Accordingly, they do not include all the information and footnotes
required by accounting principles generally accepted in the United States of America for complete financial statements. However, such
information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary
for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily
indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2022 was derived from
the audited financial statements included in the Company’s financial statements as of and for the year ended December 31, 2022
included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”)
on March 29, 2023. These financial statements should be read in conjunction with that report. Principles
of Consolidation The
accompanying unaudited consolidated financial statements include all of the accounts of the Company and its wholly owned subsidiary,
JRP, at March 31, 2023. All significant intercompany balances and transactions have been eliminated. Use
of Estimates The
preparation of the Consolidated Financial Statements in accordance with U.S. GAAP requires management to make use of certain estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of
the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reported periods. The Company
bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances,
the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results could differ from those estimates. Significant estimates are related to allowance for doubtful accounts,
goodwill, derivative liability, stock-based compensation and deferred tax valuations. Stock-Based
Compensation Stock-based
compensation expense is recorded in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, for stock and stock
options awarded in return for services rendered. The expense is measured at the grant-date fair value of the award and recognized as
compensation expense on a straight-line basis over the service period, which is the vesting period. The Company estimates forfeitures
that it expects will occur and records expense based upon the number of awards expected to vest. Cash
Equivalents The
Company considers all highly liquid investments with an original maturity of nine months or less when purchased to be cash equivalents.
At March 31, 2023 and December 31, 2022, the Company had no 250,000 35,457 Allowance
for Doubtful Accounts The
Company establishes an allowance for doubtful accounts to ensure trade and notes receivable are not overstated due to non-collectability.
The Company’s allowance is based on a variety of factors, including age of the receivable, significant one-time events, historical
experience, and other risk considerations. The Company had no 2,601 0 Inventory Inventory
is valued at the lower of cost or net realizable value. Cost is determined using a weighted-average cost method. The Company decreases
the value of inventory for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value,
based upon an aging analysis of the inventory on hand, specifically known inventory-related risks, and assumptions about future demand
and market conditions. The Company has inventory of $ 410,535 168,082 Three
vendors accounted for approximately 87 91 Derivative
Instruments Derivatives
are measured at their fair value on the balance sheet. In determining the appropriate fair value, the Company uses the Black-Scholes-Merton
option pricing model. Changes in fair value are recorded in Other Income (Expense) of the consolidated statements of operations. Fair
Value of Financial Instruments The
Company measures its financial assets and liabilities in accordance with U.S. GAAP. For certain of our financial instruments, including
cash, accounts payable, accrued expenses, and short-term loans the carrying amounts approximate fair value due to their short maturities. We
follow accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance
for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather
applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements
related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices),
the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an
asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to
measure fair value into three broad levels. The following is a brief description of those three levels:
Level
1: Observable
inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level
2: Inputs
other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities
in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level
3: Unobservable
inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect
those that a market participant would use. The
Company adopted the provisions of FASB ASC 820 (the Fair Value Topic) which defines fair value, establishes a framework for measuring
fair value under U.S. GAAP, and expands disclosures about fair value measurements. The
Company had no Fixed
Assets Fixed
assets are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to
operations as incurred. Depreciation is computed by the straight-line method over the assets estimated useful life. Upon the sale or
retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss
is reflected in consolidated statements of operations. SCHEDULE OF ESTIMATED USEFUL LIVE
Classification Estimated
Useful Lives
Equipment 5 7
Leasehold
improvements Shorter
of useful life or lease term
Furniture
and fixtures 4 7
Websites 3 Goodwill Goodwill
represents the excess of purchase price and related costs over the value assigned to the net tangible assets of businesses acquired.
Goodwill is not amortized, but instead assessed for impairment. We perform our annual impairment review of goodwill in our fiscal fourth
quarter or when a triggering event occurs between annual impairment tests. No impairment was recorded in fiscal 2023 or 2022 as a result
of our qualitative assessments over our single reporting segment. The
Company performs a qualitative assessment for each of its reporting units to determine if the two-step process for impairment testing
is required. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying
amount, the Company would then evaluate the recoverability of goodwill using a two-step impairment test approach at the reporting unit
level. In the first step, the fair value for the reporting unit is compared to its book value including goodwill. In the case that the
fair value of the reporting unit is less than book value, a second step is performed which compares the implied fair value of the reporting
unit’s goodwill to the book value of the goodwill. The fair value for the goodwill is determined based on the difference between
the fair values of the reporting unit and the net fair values of the identifiable assets and liabilities of such reporting unit. If the
implied fair value of the goodwill is less than the book value, the difference is recognized as impairment. Impairment
of Long-lived Assets The
Company follows paragraph 360-10-05-4 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived
assets, such as intellectual property, are required to be reviewed for impairment annually, or whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable. The
Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the
related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying
amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally
determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets
are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the
net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The
Company determined that there were no Revenue
Recognition We
recognize revenue for merchandise sales, net of expected returns and sales tax, at the time of in-store purchase or delivery of the product
to our customer. When merchandise is shipped to our guests, we estimate receipt based on historical experience. Revenue is deferred and
a liability is established for sales returns based on historical return rates and sales for the return period. We recognize an asset
and corresponding adjustment to cost of sales for our right to recover returned merchandise. At each financial reporting date, we assess
our estimates of expected returns, refund liabilities and return assets. For merchandise sold in our stores and online, tender is accepted
at the point of sale. When we receive payment before the guest has taken possession of the merchandise, the amount received is recorded
as deferred revenue until the transaction is complete. Our performance obligations for unfulfilled merchandise orders are typically satisfied
within one week. Shipping and handling fees charged to guests relate to fulfilment activities and are included in net sales with the
corresponding costs recorded in cost of sales. Cost
of Sales Cost
of sales includes the actual cost of merchandise sold and services performed; the cost of transportation of merchandise from vendors
to our distribution network, stores, or customers; shipping and handling costs from our stores or distribution network to customers;
and the operating cost and depreciation of our sourcing and distribution network and online fulfilment centers. Net
Income (Loss) per Share The
Company computes basic and diluted income per share amounts pursuant to section 260-10-45 of the FASB Accounting Standards Codification.
Basic income (loss) per share is computed by dividing net income (loss) available to common shareholders, by the weighted average number
of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted income
(loss) per share is computed by dividing net income (loss) available to common shareholders by the diluted weighted average number of
shares of common stock during the period. The diluted weighted average number of common shares outstanding is the basic weighted number
of shares adjusted as of the first day of the year for any potentially diluted debt or equity. The
dilutive effect of outstanding convertible securities and preferred stock is reflected in diluted earnings per share by application of
the if-converted method. The
following is a reconciliation of basic and diluted earnings (loss) per common share for the three months ended March 31, 2023 and 2022: SCHEDULE OF EARNINGS PER SHARE BASIC AND DILUTED
Numerator: 2023 2022
For the Three Months Ended
Basic earnings (loss) per common share March 31,
Numerator: 2023 2022
Net income (loss) available to common shareholders $ (110,597 ) $ 16,430
Denominator:
Weighted average common shares outstanding 153,652,143 153,652,143
Basic earnings per common share $ 0.00 $ 0.00
Diluted earnings (loss) per common share
Numerator:
Net income (loss) available to common shareholders $ (110,597 ) $ 16,430
Add convertible debt interest 83,274 -
Net income available to common shareholders $ (27,323 ) $ 583,290
Denominator:
Weighted average common shares outstanding 153,652,143 153,652,143
Preferred shares 20,000,000 20,000,000
Convertible debt 6,732,011 4,709,270
Adjusted weighted average common shares outstanding 180,384,154 178,361,413
Diluted earnings per common share $ 0.00 $ 0.00 Income
Taxes The
Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of
existing assets and liabilities and loss carryforwards and their respective tax bases. Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income (loss) in the years in which those
temporary differences are expected to be recovered or settled. The
effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation
allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized. Tax
benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain a position
taken on an income tax return. The Company has no Segment
Information In
accordance with the provisions of ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information,” the
Company is required to report financial and descriptive information about its reportable operating segments. The Company has one Effect
of Recent Accounting Pronouncements Recently
Issued Accounting Standards Not Yet Adopted The
Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on
its results of operations, financial position or cash flows. Based on that review, the Company believes that no other pronouncements
will have a significant effect on its financial statements. |
