International Land Alliance 10Q 2024 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2024

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

For the transition period from to

Commission file number: 000-56111

INTERNATIONAL LAND ALLIANCE, INC.

(Exact name of registrant as specified in its charter)

Wyoming		46-3752361
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

350 10th Avenue, Suite 1000, San Diego, California 92101

(Address of principal executive offices) (Zip Code)

(877) 661-4811

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 ☒ No ☐

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

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

Large-accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		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 ☒

As of November 20, 2024, the registrant had 90,006,719 shares of common stock, $0.001 par value per share, outstanding.

TABLE OF CONTENTS

Part I. Financial Information	3
Item 1. Consolidated Financial Statements	3
Consolidated Balance Sheets – As of September 30, 2024 (unaudited) and December 31, 2023 (audited)	3
Consolidated Statements of Operations – For the three and nine months ended September 30, 2024, and 2023 (unaudited)	4
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2024, and 2023 (unaudited)	5
Consolidated Statements of Cash Flows for the nine months ended September 30, 2024, and 2023 (unaudited)	7
Notes to Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3. Quantitative and Qualitative Disclosures about Market Risk	33
Item 4. Controls and Procedures	33

Part II. Other Information	34
Item 1. Legal Proceedings	34
Item 1A. Risk Factors	34
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3. Defaults upon Senior Securities	34
Item 4. Mine Safety Disclosures	34
Item 5. Other Information	34
Item 6. Exhibits	34

Signatures	35

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

INTERNATIONAL LAND ALLIANCE, INC.

CONSOLIDATED BALANCE SHEETS

	September 30, 2024 (unaudited)			December 31, 2023
ASSETS
Current assets
Cash	$	3,339		$	140,247
Accounts receivable		1,297,481			1,652,086
Prepaid and other current assets		25,215			16,815
Total current assets		1,326,035			1,809,148

Land		15,776,526			15,551,526
Buildings, net		1,830,344			1,818,825
Furniture and equipment, net		-			2,677
Other non-current assets		440,040			53,468
Goodwill		11,118,187			11,118,187

Total assets	$	30,491,132		$	30,353,831

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	1,931,051		$	1,431,676
Accounts payable and accrued liabilities related parties		326,947			361,223
Accounts payable and accrued liabilities		326,947			361,223
Deferred revenue		-			4,521,222
Accrued interest		1,403,707			1,756,937
Contract liability		142,933			93,382
Deposits		20,500			20,500
Derivative liability		269,593			781,924
Convertible notes, net of debt discounts		474,346			652,077
Convertible note RCVD acquisition		-			8,900,000
Promissory notes, net of debt discounts		2,184,762			2,674,762
Promissory notes, net discounts – Related Parties		308,040			104,498
Promissory notes, net discounts		308,040			104,498
Other loans		8,077,351			7,358,600
Total current liabilities		15,139,229			28,656,801

Total liabilities		15,139,229			28,656,801

Commitments and Contingencies (Note 10)		-			-

Preferred Stock Series B (Temporary Equity)		293,500			293,500
Preferred Stock Series C (Temporary Equity)		310,000			310,000
Total Temporary Equity		603,500			603,500

Stockholders’ Equity

Preferred stock; $0.001 par value; 2,000,000 shares authorized; 117,000 and 28,000 Series A shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		117			28
1,000 Series B shares issued and outstanding as of September 30, 2024 and December 31, 2023		1			1
3,100 Series C shares issued and outstanding as of September 30, 2024 and December 31, 2023		3			3
17,000 Series D shares issued and outstanding as of September 30, 2024 and December 31, 2023		17			17
Preferred stock value		17			17
Common stock; $0.001 par value; 150,000,000 shares authorized; 89,006,719 and 86,006,719 shares issued and outstanding as of September 30, 2024, respectively, and 79,658,165 and 76,658,165 shares issued and outstanding as of December 31, 2023, respectively		89,007			79,658
Additional paid-in capital		38,661,748			28,476,622
Common stock payable		-			31,939
Treasury stock (3,000,000 shares as of September 30, 2024 and December 31, 2023)		(300,000	)		(300,000	)
Accumulated deficit		(23,702,489	)		(27,194,738	)
Total stockholders’ equity		14,748,403			1,093,530

Total liabilities and stockholders’ equity	$	30,491,132		$	30,353,831

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

INTERNATIONAL LAND ALLIANCE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


	For the three months ended						For the nine months ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Net revenues and lease income	$	1,303,271		$	358,129		$	7,134,240		$	1,084,641

Cost of revenues		390,788			296,680			993,114			300,680

Gross profit		912,483			61,449			6,141,126			783,961

Operating expenses
Sales and marketing		160,884			12,000			497,863			300,259
Impairment loss		-			-			-			245,674
General and administrative expenses		474,819			1,007,030			1,176,452			2,316,807
Total operating expenses		635,703			1,019,030			1,674,314			2,862,740

Income (loss) from operations		276,779			(957,581	)		4,466,811			(2,078,779	)

Other income (expense)
Loss from debt extinguishment		-			(1,091,117	)		-			(1,140,446	)
Loss on acquisition of RCVD		-			(2,995,000	)		-			(2,995,000	)
Change in fair value derivative liability		-			(588,314	)		229,814			(690,091	)
Interest expense		(528,376	)		(708,356	)		(1,204,375	)		(1,723,273	)
Total other expense, net		(528,376	)		(5,382,787	)		(974,561	)		(6,548,810	)

Net income (loss)	$	(251,598	)	$	(6,340,368	)	$	3,492,250		$	(8,627,589	)

Preferred stock dividends		-			1,007,822			114,308			1,082,825

Net income (loss) applicable to common shareholders	$	(251,598	)	$	(7,348,190	)	$	3,377,942		$	(9,710,413	)

Income (loss) per common share - basic and diluted	$	(0.01	)	$	(0.11	)	$	0.04		$	(0.16	)

Weighted average common shares outstanding - basic and diluted		90,340,381			64,441,149			82,483,960			62,191,188

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

INTERNATIONAL LAND ALLIANCE, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

For the Three and Nine Months Ended September 30, 2024 and 2023

(unaudited)

Activity for the Three and Nine Months Ended September 30, 2024

	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Stock			Capital			Payable			Deficit			Equity
	Series A Preferred Stock				Series B Preferred Stock				Series C Preferred Stock				Series D Preferred Stock				Common Stock				Treasury			Additional Paid-in			Common Stock			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Stock			Capital			Payable			Deficit			Equity
Balance, December 31, 2023		28,000	$	28		1,000	$	1		3,100		3		17,000	$	17		79,658,165	$	79,658	$	(300,000	)	$	28,476,622		$	31,939		$	(27,194,738	)	$	1,093,530
Dividend on Series C Preferred		-		-		-		-		-		-		-		-		94,827		95		-			(95	)		-			-			-
Common shares issued for exercise of warrants		-		-		-		-		-		-		-		-		2,484,832		2,485		-			(2,485	)		-			-			-
Common shares issued pursuant to promissory notes		-		-		-		-		-		-		-		-		50,000		50		-			34,915			(31,939	)		-			3,026
Stock-based compensation		-		-		-		-		-		-		-		-		-		-		-			78,047			-			-			78,047
Common stock issued for consulting services		-		-		-		-		-		-		-		-		1,552,595		1,553		-			99,367			-			-			100,919
Common stock issued from debt conversion		-		-		-		-		-		-		-		-		1,223,776		1,224		-			47,902			-			-			49,126
Series A Preferred shares issued for the conversion of related party debt		89,000		89		-		-		-		-		-		-		-		-		-			9,456,161			-			-			9,456,250
Net income		-		-		-		-		-		-		-		-		-		-		-			-			-			3,650,150			3,650,150
Balance, March 31, 2024		117,000	$	117		1,000	$	1		3,100		3		17,000	$	17		85,064,195	$	85,064	$	(300,000	)	$	38,190,434		$	-		$	(23,544,588	)	$	14,431,048
Dividend on Series C Preferred		-		-		-		-		-		-		-		-		195,000		195		-			(22,825	)		-			-			(22,630	)
Common shares issued pursuant to inducement agreement		-		-		-		-		-		-		-		-		500,000		500		-			12,000			-			-			12,500
Dividend on Series A Preferred		-		-		-		-		-		-		-		-		-		-		-			(91,678	)		-			-			(91,678	)
Settlement of derivative liability		-		-		-		-		-		-		-		-		-		-		-			282,517			-			-			282,517
Stock-based compensation		-		-		-		-		-		-		-		-		-		-		-			78,047			-			-			78,047
Common stock issued for consulting services		-		-		-		-		-		-		-		-		1,000,000		1,000		-			65,000			-			-			66,000
Net income		-		-		-		-		-		-		-		-		-		-		-			-			-			93,697			93,697
Balance, June 30, 2024		117,000	$	117		1,000	$	1		3,100		3		17,000	$	17		86,759,195	$	86,759	$	-		$	38,513,493		$	-		$	(23,450,890	)	$	14,849,502
Dividend on Series C Preferred		-		-		-		-		-		-		-		-		97,524		98		-			(98	)		-			-			-
Common stock issued for consulting services		-		-		-		-		-		-		-		-		2,150,000		2,150		-			148,350			-			-			150,500
Net loss		-		-		-		-		-		-		-		-		-		-		-			-			-			(251,598	)		(251,598	)
Balance, September 30, 2024		117,000	$	117		1,000	$	1		3,100		3		17,000	$	17		89,006,719	$	89,007	$	-		$	38,661,748		$	-		$	(23,702,489	)	$	14,748,403

Activity for the Three and Nine Months Ended September 30, 2023

	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Stock			Capital			Payable		Deficit			Deficit
	Series A Preferred Stock				Series B Preferred Stock				Series C Preferred Stock				Common Stock				Treasury			Additional Paid-in			Common Stock		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Stock			Capital			Payable		Deficit			Deficit
Balance, December 31, 2022		28,000	$	28		1,000	$	1		-		-		43,499,423	$	43,500		-		$	20,233,446		$	-	$	(25,121,457	)	$	(4,844,482	)
Common shares issued from related party acquisition		-		-		-		-		-		-		20,000,000		20,000		-			1,780,000			-		-			1,800,000
Fair value common shares warrants issued from related party acquisition		-		-		-		-		-		-		-		-		-			2,674,976			-		-			2,674,976
Deemed dividend from related party acquisition		-		-		-		-		-		-		-		-		-			(24,913,097	)		-		(441,875	)		(25,354,972	)
Reciprocal interest in business acquisition		-		-		-		-		-		-		-				(300,000	)		-			-		-			(300,000	)
Common stock issued from debt conversion		-		-		-		-		-		-		1,077,164		1,077		-			146,728			-		-			147,805
Common stock issued for consulting services		-		-		-		-		-		-		100,000		100		-			14,900			-		-			15,000
Stock-based compensation		-		-		-		-		-		-		-		-		-			78,047			-		-			78,047
Dividend on Series B Preferred		-		-		-		-		-		-		-		-		-			(15,000	)		-		-			(15,000	)
Net loss		-		-		-		-		-		-		-		-		-			-			-		(1,908,561	)		(1,908,561	)
Balance, March 31, 2023		28,000	$	28		1,000	$	1		-		-		64,676,587	$	64,677	$	(300,000	)	$	-		$	-	$	(27,471,893	)	$	(27,707,187	)

Common stock issued for warrant exercise		-		-		-		-		-		-		267,310		267		-			(267	)		-		-			-
Warrants issued pursuant to Series C Preferred Stock		-		-		-		-		-		-		-		-		-			18,504			-		-			18,504
Stock-based compensation		-		-		-		-		-		-		-		-		-			78,047			-		-			78,047
Series C Preferred Stock issued for cash		-		-		-		-		3,100		3		-		-		-			-			-		-			3,100
Dividend on Series B Preferred		-		-		-		-		-		-		-		-		-			(60,003	)		-		-			(60,003	)
Net loss		-		-		-		-		-		-		-		-		-			-			-		(378,660	)		(378,660	)
Balance, June 30, 2023		28,000	$	28		1,000	$	1		3,100		3		64,676,587	$	64,677	$	(300,000	)	$	36,281		$	-	$	(27,850,553	)	$	(28,049,295	)
Balance		28,000	$	28		1,000	$	1		3,100		3		64,676,587	$	64,677	$	(300,000	)	$	36,281		$	-	$	(27,850,553	)	$	(28,049,295	)

Reclassification of deemed dividend from related party transaction		-		-		-		-		-		-		-		-		-			24,913,097			-		441,875			25,354,972
Common shares issued for cash		-		-		-		-		-		-		500,000		500		-			49,500			-		-			50,000
Common shares issued pursuant to promissory notes		-		-		-		-		-		-		-		-		-			-			31,939		-			31,939
Stock-based compensation		-		-		-		-		-		-		-		-		-			78,047			-		-			78,047
Common stock issued for consulting services		-		-		-		-		-		-		2,100,000		2,100		-			134,900			-		-			137,000
Common stock issued from debt conversion		-		-		-		-		-		-		7,851,268		7,851		-			1,527,123			-		-			1,534,974
Warrants issued pursuant to Series C Preferred Stock		-		-		-		-		-		-		-		-		-			105,392			-		-			105,392
Settlement of derivative liability		-		-		-		-		-		-		-		-		-			518,646			-		-			518,646
Dividends on Series B Preferred Stock		-		-		-		-		-		-		-		-		-			(1,007,822	)		-		-			(1,007,822	)
Dividends on Preferred Stock		-		-		-		-		-		-		-		-		-			(1,007,822	)		-		-			(1,007,822	)
Net loss		-		-		-		-		-		-		-		-		-			-			-		(6,340,368	)		(6,340,368	)
Net Income (Loss)		-		-		-		-		-		-		-		-		-			-			-		(6,340,368	)		(6,340,368	)
Balance, September 30, 2023		28,000	$	28		1,000	$	1		3,100		3		75,395,165	$	75,395	$	(300,000	)	$	26,355,164		$	31,939	$	(33,749,046	)	$	(7,586,516	)
Balance		28,000	$	28		1,000	$	1		3,100		3		75,395,165	$	75,395	$	(300,000	)	$	26,355,164		$	31,939	$	(33,749,046	)	$	(7,586,516	)

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

INTERNATIONAL LAND ALLIANCE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	For the nine months ended
	September 30, 2024			September 30, 2023

Cash Flows from Operating Activities
Net income (loss)	$	3,492,250		$	(8,627,589	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Stock based compensation		515,537			358,037
Impairment loss		-			245,674
Loss on acquisition of RCVD		-			2,995,000
Fair value equity securities issued for services		-			152,000
Penalty on convertible debt		-			108,096
Loss on debt extinguishment		-			1,140,446
Depreciation and amortization		87,250			89,241
Amortization of debt discount		-			357,376
Excess Fair Value of derivative		-			108,465
Change in fair value of derivative liability		(229,814	)		475,114
Changes in operating assets and liabilities
Accounts Receivable		354,604			58,764
Prepaid and other current assets		(8,400	)		32,383
Other non-current assets		(194,529	)		(7,808	)
Accounts payable and accrued liabilities		499,375			310,182
Accounts payable and accrued liabilities related parties		(34,276	)		136,970
Deferred revenue		(4,521,222	)		75,195
Accrued interest		731,395			579,183
Contract liability		49,551			305,909
Net cash provided by (used in) operating activities		741,721			(1,107,362	)

Cash Flows from Investing Activities
Cash acquired from RCVD acquisition		-			321,920
Proceeds from disposal of fixed assets		-			205,096
Additional expenditures on land		(225,000	)		(274,846	)
Building and Construction in Progress payments		(288,138	)		(354,070	)
Net cash used in investing activities		(513,138	)		(101,900	)

Cash Flows from Financing Activities
Common Stock issued for cash		-			50,000
Series C Preferred Stock issued for cash		-			250,000
Series A Preferred Stock dividends paid		(91,678	)		-
Cash payments on promissory notes - related party		-			(318,359	)
Cash payments on promissory notes		(565,000	)		(60,000	)
Cash payments on convertible notes		(177,731	)		(270,414	)
Cash proceeds from convertible notes		-			225,000
Cash proceeds other loans		190,376			380,938
Cash proceeds from promissory notes		75,000			465,000
Cash proceeds from promissory notes- related party		203,541			560,840
Net cash (used in) provided by financing activities		(365,491	)		1,283,005

Net increase (decrease) in Cash		(136,908	)		73,743

Cash, beginning of period		140,247			49,374

Cash, end of period	$	3,339		$	123,117

Supplemental disclosure of cash flow information
Cash paid for interest	$	41,161		$	276,963

Non-Cash investing and financing transactions
Dividend on Series B	$	-		$	1,022,822
Dividend on Series C	$	22,630		$	60,003
Series A shares issued for the conversion of related party notes payable	$	9,456,250		$	-
Common shares issued with convertible debt	$	49,126		$	156,310
Common shares issued with convertible related party	$	-		$	386,023
Debt discount from issuance of new promissory notes	$	-		$	31,939
Debt discount from bifurcated derivative	$	-		$	100,000
Settlement of derivative liability	$	282,517		$	518,646
Convertible debt exchange for related party note payable	$	-		$	182,594
Cashless warrant exercise	$	-		$	267

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

INTERNATIONAL LAND ALLIANCE, INC.

Notes to the Consolidated Financial Statements

For the three and nine months ended September 30, 2024

NOTE 1 – NATURE OF OPERATIONS AND GOING CONCERN

Nature of Operations

International Land Alliance, Inc. (the “Company”) was incorporated under the laws of the State of Wyoming on September 26, 2013. The Company is a residential land development company with target properties located in the Baja California, Northern region of Mexico and Southern California. The Company’s principal activities are purchasing properties, obtaining zoning and other entitlements required to subdivide the properties into residential and commercial building plots, securing financing for the purchase of the plots, improving the properties infrastructure and amenities, and selling the plots to homebuyers, retirees, investors, and commercial developers.

In May 2021, the Company acquired a 25% investment in Rancho Costa Verde Development LLC (“RCVD”). RCVD is a 1,100-acre master planned second home, retirement home and vacation home real estate community located on the east coast of Baja California. RCVD is a self-sustained solar powered green community that takes advantage of the advances in solar and other green technology. On January 3, 2023, the Company completed the acquisition of the remaining 75% interest in RCVD for a contractual price of $13.5 million, paid through a combination of a promissory note, common stock and common stock purchase warrants. As a result of the transaction, RCVD became a wholly owned subsidiary of the Company. The transaction was accounted for as a business acquisition pursuant to ASC 805 Business Combinations.

Certain information and note disclosures included in the financial statements prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP” or “GAAP”) have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. For further information, refer to the audited financial statements and notes for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K filed with the SEC on June 27, 2024.

Liquidity and Going Concern

The accompanying consolidated unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

Management evaluated all relevant conditions and events that are reasonably known or reasonably knowable, in the aggregate, as of the date the consolidated financial statements were available to be issued and determined that substantial doubt exists about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on the Company’s ability to generate revenues and raise capital. The Company has faced significant liquidity shortages as shown in the accompanying financial statements. As of September 30, 2024, the Company’s current liabilities exceeded its current assets by approximately $13.8 million. The Company has recorded net income of $3.5 million for the nine months ended September 30, 2024 and has an accumulated deficit of approximately $23.7 million as of September 30, 2024. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The Company continues to raise additional capital through the issuance of debt instruments and equity to fund its ongoing operations, which may have the effect of potentially diluting the holdings of existing shareholders.

Management anticipates that the Company’s capital resources will significantly improve if its plots of land gain wider market recognition and acceptance resulting in increased plot sales and house construction. If the Company is not successful with its marketing efforts to increase sales, the Company will continue to experience a shortfall in cash, and it will be necessary to obtain funds through equity or debt financing in sufficient amounts or to further reduce its operating expenses in a manner to avoid the need to curtail its future operations subsequent to September 30, 2024. The direct impact of these conditions is not fully known.

However, there can be no assurance that the Company would be able to secure additional funds if needed and that if such funds were available on commercially reasonable terms or in the necessary amounts, and whether the terms or conditions would be acceptable to the Company. In such case, the reduction in operating expenses might need to be substantial in order for the Company to generate positive cash flow to sustain the operations of the Company. (See Note 12 regarding subsequent events).

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company maintains its accounting records on an accrual basis in accordance with GAAP. These consolidated financial statements are presented in United States dollars. The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, ILA Fund I, LLC (the “ILA Fund”), a company incorporated in the State of Wyoming, International Land Alliance, S.A. de C.V., a company incorporated in Mexico (“ILA Mexico”), and Emerald Grove Estates LLC, incorporated in the State of California, Plaza Bajamar, LLC, incorporated in State of Wyoming, Plaza Valle Divino, LLC, incorporated in the State of Wyoming and Rancho Costa Verde Development, LLC incorporated in State of Nevada.

ILA Fund includes cash as its only assets with minimal expenses as of September 30, 2024. The sole purpose of this entity is strategic funding for the operations of the Company. ILA Mexico has plots held for sale for the Oasis Park Resort, no liabilities, and minimal expenses as of September 30, 2024. As of September 30, 2024, Emerald Grove Estates LLC, Plaza Bajamar LLC, and Plaza Valle Divino LLC have no operations. All intercompany balances and transactions are eliminated in consolidation.

The Company’s consolidated subsidiaries and/or entities were as follows:

SCHEDULE OF CONSOLIDATED SUBSIDIARIES AND EQUITY

Name of Consolidated Subsidiary or Entity	State or Other Jurisdiction of Incorporation or Organization	Attributable Interest
ILA Fund I, LLC	Wyoming		100	%
International Land Alliance, S.A. de C.V. (ILA Mexico)	Mexico		100	%
Emerald Grove Estates, LLC	California		100	%
Oasis Park Resort LLC	Wyoming		100	%
Plaza Bajamar LLC	Wyoming		100	%
Plaza Valle Divino, LLC	Wyoming		100	%
Rancho Costa Verde Development, LLC	Nevada		100	%

On January 1, 2023, the Company executed a securities purchase agreement pursuant to which the Company acquired all of the issued and outstanding units of Rancho Costa Verde Development, LLC. for a total contractual consideration of $13,500,000, paid through a combination of a promissory note, common stock and common stock purchase warrants.

Investments - Equity Method

The Company accounts for equity method investments at cost, adjusted for the Company’s share of the investee’s earnings or losses, which are reflected in the consolidated statements of operations. The Company periodically reviews the investments for other than temporary declines in fair value below cost and more frequently when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. On January 3, 2023, the Company acquired a controlling financial interest in its previous equity method investment, which resulted in the consolidation pursuant to ASC 805 Business Combinations of such entity on the effective date.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management regularly evaluates estimates and assumptions related to the valuation of assets and liabilities. Management bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from management’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Significant estimates include:

■

Liability for legal contingencies.

	■	Useful life of buildings.
	■	Assumptions used in valuing equity instruments.
	■	Deferred income taxes and related valuation allowances.
	■	Going concern.
	■	Assessment of long-lived assets for impairment.
	■	Significant influence or control over the Company’s investee.
	■	Revenue recognition.

Segment Reporting

The Company operates as one reportable segment under ASC 280, Segment Reporting. The Chief Operating Decision Maker (“CODM”) regularly reviews the financial information of the Company at a consolidated level in deciding how to allocate resources and in assessing performances.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2024, and December 31, 2023, respectively.

Fair Value of Financial Instruments and Fair Value Measurements

Accounting Standards Codification (“ASC”) 820 Fair Value Measurements and Disclosures, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1: uses quoted market prices in active markets for identical assets or liabilities.

Level 2: uses observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: uses unobservable inputs that are not corroborated by market data.

As defined by ASC 820, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date.

The reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the Company’s financial instruments that could have been realized as of any balance sheet dates presented or that will be recognized in the future, and do not include expenses that could be incurred in an actual settlement.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid, and other current assets, accounts payable and accrued liabilities, contracts liability, deposits, promissory notes, net of debt discounts and promissory notes related party, deferred revenue, other notes approximate fair value due to their relatively short maturities. Equity-method investment is recorded at cost, which approximates its fair value since the consideration transferred includes cash and a non-monetary transaction, in the form of the Company’s common stock, which was valued based on a combination of a market and asset approach.

The fair value of the Company’s recorded derivative liability is determined based on unobservable inputs that are not corroborated by market data, which require a Level 3 classification. A Black-Sholes option valuation model was used to determine the fair value. The Company records derivative liability on the consolidated balance sheets at fair value with changes in fair value recorded in the consolidated statements of operation.

The following table presents balances of the liabilities with significant unobservable inputs (Level 3) as of September 30, 2024:

SCHEDULE OF LIABILITIES WITH SIGNIFICANT UNOBSERVABLE INPUTS

	Fair Value Measurements at September 30, 2024 Using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total

Derivative liability	$	-	$	-	$	269,593	$	269,593
Total	$	-	$	-	$	269,593	$	269,593

The following table presents changes of the liabilities with significant unobservable inputs (Level 3) for the nine months ended September 30, 2024:

SCHEDULE OF CHANGES IN LIABILITIES WITH SIGNIFICANT UNOBSERVABLE INPUTS

	Derivative
	Liability
Balance December 31, 2023	$	781,924

Change in estimated fair value		(229,814	)
Settlement of derivative liability		(282,517	)
Balance September 30, 2024	$	269,593

Derivative Liability

As of September 30, 2024, the Company has variable rate convertible promissory notes, which contained variable conversion rates based on unknown future prices of the Company’s common stock. This resulted in the recognition of a derivative liability as the conversion feature failed the scope exception for derivative accounting due to the variability of its conversion price. The Company measures the derivative liability using the Black-Scholes option valuation model using the following assumptions:

SCHEDULE OF DERIVATIVE LIABILITY

	For the Nine Months Ending September 30,
	2024			2023

Expected term		1 month – 1 year			1 month – 1 year
Exercise price	$	0.03 - $0.13		$	0.05 - $0.10
Expected volatility		176% - 232	%		139% - 163	%
Expected dividends		None			None
Risk-free interest rate		5.03% - 5.55	%		4.74% - 5.09	%
Forfeitures		None			None

The assumptions used in determining fair value represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if factors change, including changes in the market value of the Company’s common stock, managements’ assessment, or significant fluctuations in the volatility of the trading market for the Company’s common stock, the Company’s fair value estimates could be materially different in the future.

The Company computes the fair value of the derivative liability at each reporting period and the change in the fair value is recorded as non-cash expense or non-cash income. The key component in the value of the derivative liability is the Company’s stock price, which is subject to significant fluctuation and is not under its control, and the assessment of volatility. The resulting effect on net loss is therefore subject to significant fluctuation and will continue to be so until the Company’s variable convertible notes, which the convertible feature is associated with, are converted into common stock or paid in full with cash. Assuming all other fair value inputs remain constant, the Company will record non-cash expense when its stock price increases and non-cash income when its stock price decreases.

Cost Capitalization

The cost of buildings and improvements includes the purchase price of the property, legal fees, and other acquisition costs. Costs directly related to planning, developing, initial leasing and constructing a property are capitalized and classified as Buildings in the consolidated balance sheets. Capitalized development costs include interest, property taxes, insurance, and other direct project costs incurred during the period of development are also capitalized.

A variety of costs are incurred in the acquisition, development, and leasing of properties. After determination is made to capitalize a cost, it is allocated to the specific component of a project that is benefited. Determination of when a development project is substantially complete, and capitalization must cease involves a degree of judgment. Our capitalization policy on development properties is guided by ASC 835-20 Interest – Capitalization of Interest and ASC 970 Real Estate - General. The costs of land and buildings under development include specifically identifiable costs. The capitalized costs include pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries and related costs and other costs incurred during the period of development. We consider a construction project as substantially completed and held available for occupancy or sale upon the receipt of certificates of occupancy, but no later than one year from cessation of major construction activity. We cease capitalization on the portion (1) substantially completed and (2) occupied or held available for occupancy, and we capitalize only those costs associated with the portion under construction.

Land Held for Sale

The Company considers properties to be assets held for sale when (1) management commits to a plan to sell the property; (2) the property is available for immediate sale in its present condition and (3) the property is actively being marketed for sale at a price that is reasonable given our estimate of current market value. Upon designation of a property as an asset held for sale, we record the property’s value at the lower of its’ carrying value or its estimated net realizable value.

Land and Buildings

Land and buildings are stated at cost. Depreciation is provided by the use of the straight-line and accelerated methods for financial and tax reporting purposes, respectively, over the estimated useful lives of the assets. Buildings will have an estimated useful life of 20 years. Land is an indefinite-lived asset that is stated at fair value at date of acquisition.

Construction in progress (“CIP”)

A CIP asset reflects the cost of construction work undertaken, but not yet completed on land not currently owned by the Company. For construction in progress assets, no depreciation is recorded until the asset is placed in service. When construction is completed, the assets should be reclassified as building, building improvement, infrastructure or land improvement and should be capitalized and depreciated. The land is currently owned by companies controlled by our Chief Executive Officer.

Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation, and amortization. Depreciation is computed using the double declining balance method over the estimated useful lives of the respective assets:

SCHEDULE OF DEPRECIATION ESTIMATED USEFUL LIVES

Classification		Life
Buildings		20 years
Furniture and equipment		5 years

Revenue Recognition

The Company determines revenue recognition pursuant to Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, through the following steps:

	■	Identification of the contract, or contracts, with a customer.
	■	Identification of the performance obligations in the agreement(s) for the sale of plots or house construction.
	■	Determination of the transaction price.
	■	Allocation of the transaction price to the performance obligation(s) in the contract.
	■	Recognition of revenue when, or as the Company satisfies a performance obligation.

Revenue is measured based on considerations specified in the agreements with our customers. A contract exists when it becomes a legally enforceable agreement with a customer. The contract is based on either the acceptance of standard terms and conditions as stated in our agreement of plot sales or house construction with customers. These contracts define each party’s rights, payment terms and other contractual terms and conditions of the sale. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. The transaction price is determined based on the consideration which we will expect to receive in exchange for execution of the performance obligation(s).

The Company applies judgment in determining the customer’s ability and intention to pay the consideration to which the Company is entitled to. A performance obligation is a promise in a contract or agreement to transfer a distinct product or item to the customer. Performance obligations promised in a contract are identified based on the property that will be transferred to the customer that are both capable of being distinct and are distinct in the context of the contract, whereby the transfer of the property is separately identifiable from other promises in the contract. Management considers the retention of title as merely a protective right, which would not disallow revenue recognition for the full consideration to which the Company is entitled upon the execution of a contract for deed.

Currently, upon execution of each contract for deed, the Company has not developed sufficient controls and procedures to provide reasonable assurance that collection of the consideration, which the Company is entitled to, is probable. In addition, the title of the land for the various projects (Bajamar and Divino) is held by an entity that is controlled by the Company’s Chief Executive Officer.

The Company’s principal activities in the real estate development industry which it generates its revenues from are the sale of developed and undeveloped land and house construction.

Rancho Costa Verde Development or RCVD generates revenue from the following sources: (1) lot sales, (2) home construction calculated as a set percentage of builders’ costs, (3) administrative income for loan servicing, (4) interest income resulting from monthly payments from financed loans made to customers on lot sales, (5) resale income as commission for selling homes for owners that have purchased lots at RCVD and (6) utilities revenue from waste water systems and solar systems.

The Company identified the following performance obligations related to the operations of RCVD: (1) subdivision of the developer parcel, (ii) casita free week for each customer allowing them to enjoy a free week to a casita per year. The Company determined that there was a significant financing component in most arrangements with customers, which results in the recognition of interest income.

The Company recognized $7,134,240 and $1,084,641, respectively, of net revenue during the nine months ended September 30, 2024.

Advertising costs

The Company expenses advertising costs when incurred. Advertising costs incurred amounted to $160,884 and $497,863 for the three and nine months ended September 30, 2024, respectively, and $12,000 and $300,259 for the three and nine months ended September 30, 2023, respectively.

Debt issuance costs and debt discounts

Debt issuance costs and debt discounts are being amortized over the term of the related financings on a straight-line approach, which approximates the effective interest method. Costs and discounts are presented as a reduction of the related debt in the accompanying consolidated balance sheets.

Stock-Based Compensation

The fair value of stock options is estimated on the grant date using the Black-Scholes option pricing model, based on weighted average assumptions. Expected volatility is based on historical volatility of our common stock. The Company has elected to use the simplified method described in the Securities and Exchange Commission Staff Accounting Bulletin Topic 14C to estimate the expected term of employee stock options. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The value of stock awards is determined using the fair value of the Company’s common stock on the date of grant. The Company accounts for forfeitures as they occur. Any compensation cost previously recognized for an unvested award that is forfeited because of a failure to satisfy a service condition is reversed in the period of the forfeiture. Compensation expense is recognized on a straight-line basis over the requisite service period of the award. Stock-based compensation includes the fair value of options, warrants and restricted stocks issued to employees, directors, and non-employees.

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provide that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Management makes estimates and judgments about our future taxable income that are based on assumptions that are consistent with our plans and estimates. Should the actual amounts differ from our estimates, the amount of our valuation allowance could be materially impacted. Any adjustment to the deferred tax asset valuation allowance would be recorded in the income statement for the periods in which the adjustment is determined to be required. Management does not believe that it has taken any positions that would require the recording of any additional tax liability, nor does it believe that there are any unrealized tax benefits that would either increase or decrease within the next year.

Net Earnings (Loss) Per Share

The Company computes earnings (loss) per share in accordance with ASC 260 – Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the consolidated statements of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible notes payable using the if-converted method. Diluted EPS excludes all dilutive potential shares if their effect is antidilutive. During periods of net loss, all common stock equivalents are excluded from the diluted EPS calculation because they are antidilutive.

Securities that are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been antidilutive are:

SCHEDULE OF POTENTIALLY DILUTED SHARES

	For the nine months ended September 30, 2024		For the nine months ended September 30, 2023

Options		6,000,000		6,000,000
Warrants		38,107,500		38,107,500
Total potentially dilutive shares		44,107,500		44,107,500

Concentration of Credit Risk

The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. The Company has not experienced any losses in such accounts through September 30, 2024.

Impairment of Long-lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. If impairment is indicated, the asset is written down to its estimated fair value. The Company fully impaired its long-lived assets due to the uncertainty in title transfer of the land not currently owned by the Company and the estimated fair value of its construction in progress during the three and nine months ended September 30, 2024.

Accounts Receivable

The Company uses the specific identification method for recording the provision for doubtful accounts, which was $0 at September 30, 2024 and December 31, 2023, respectively. Account receivables are written off when all collection attempts have failed.

Convertible Promissory Note

The Company accounts for convertible promissory notes in accordance with ASC 470-20, Debt with Conversion and Other Options. The Company evaluates embedded conversion features within convertible debt to determine whether the embedded conversion feature should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in the Income Statement. If the conversion feature does not require recognition of a bifurcated derivative, the convertible debt instrument is evaluated for consideration of any beneficial conversion feature (“BCF”) requiring separate recognition. When the Company records a BCF, the intrinsic value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument with an offset to additional paid-in capital and amortized to interest expense over the life of the debt using the effective interest method.

NOTE 3 – LAND, BUILDING, NET AND CONSTRUCTION IN PROCESS

Land, buildings, net and construction in process as of September 30, 2024, and December 31, 2023:

SCHEDULE OF LAND AND BUILDING

	Useful life	September 30, 2024			December 31, 2023
Land – Emerald Grove		$	203,419		$	203,419

Land – Rancho Costa Verde Development		$	15,573,107		$	15,348,107

Furniture & equipment, net	5 years	$	-		$	2,677

Building	20 years		2,674,471			2,591,421
Less: Accumulated depreciation			(844,127	)		(772,596	)

Building, net		$	1,830,344		$	1,818,825

Depreciation expense was approximately $87,250 and $89,241 for the nine months ended September 30, 2024, and 2023, respectively.

Valle Divino

The Valle Divino is the Company’s premier wine country development project in Ensenada, Baja California. This land project consists of 20 acres to be acquired from Baja Residents Club, a Company controlled by our Chief Executive Officer and developed into Valle Divino resort. The acquisition of title to the land for this project is subject to approval from the Mexican government in Baja, California. The Company broke ground of the Valle Divino development in July 2020 and has commenced site preparation for two model homes including a 1-bedroom and 2- bedroom option. The first Phase of the development includes 187 homes. This development will also have innovative microgrid solutions by our partner to power the model home and amenities.

There was no activity during the nine months ended September 30, 2024. The construction contractor is also an entity controlled by our Chief Executive Officer. Construction began during the year ended December 31, 2020. The balance of construction in process for Valle Divino was $0 as of September 30, 2024 and December 31, 2023. The Company fully impaired the accumulated costs related to its Valle Divino project due to the uncertainty pertaining to the title transfer for a total amount of $457,275 during the year ended December 31, 2023.

Plaza Bajamar

The Plaza Bajamar community is an 80-unit development located within the internationally renowned Bajamar Ocean Front Hotel and Golf Resort. The Bajamar Ocean Front Golf Resort is an expertly planned, well-guarded, and gated wine and golf community located 45 minutes South of the San Diego-Tijuana Border along the scenic toll road to Ensenada on the Pacific Ocean.

Phase I will include 22 “Merlot” 1,150 square-foot single-family homes that feature two bedrooms and two baths. The home includes two primary bedroom suites – one on the first floor and one upstairs, as well as fairway and ocean views from a rooftop terrace. The Merlot villas will come with the installation of solar packages construction in mind. Planned amenities include a pool, wellness and fitness center and available office space.

The Company has not yet taken title to this property, which is currently owned by Valdeland, S.A. de C.V. (“Valdeland”), an entity controlled and 100% owned by Roberto Valdes, the Company’s Chief Executive Officer. In September 2019, the Company executed a land purchase agreement with Valdeland, under which the Company is to acquire from Valdeland the Plaza Bajamar property free of liens and encumbrances for a total consideration of $1,000,000.

In November and December 2019, $250,000 was paid to the Company’s Chief Executive Officer, Roberto Valdes, of which $150,000 was used for the construction of two model Villas at our planned Plaza Bajamar development and $100,000 as a down payment towards the acquisition of the land from Valdeland. As of September 30, 2024 and December 31, 2023 the Company has issued 250,000 shares of the Company’s common stock for a total amount of $150,000 reported under Prepaid and other current assets in the consolidated balance sheets towards the purchase of the land. The balance was fully impaired during the year ended December 31, 2022.

Valdeland has completed a two-bedroom model home, an enhanced entrance, and interior roads as well as site preparation for four (4) new homes adjacent to the model home. It has commenced construction on four residential lots following the payment of the required minimum deposits from buyers.

The Company funded the construction by an additional $179,700 during the year ended December 31, 2023. Valdeland is the construction contractor is also an entity controlled and owned by Roberto Valdes.

The balance of construction in process for Plaza Bajamar totaled $0 as of September 30, 2024 and December 31, 2023. During the year ended December 31, 2023, the Company fully impaired the accumulated costs related to Plaza Bajamar, due to the uncertainty pertaining to title transfer for a total amount of $179,700.

Within the “restricted zone,” a foreigner can purchase the beneficial interest in real property through a bank trust or “fideicomiso.” Indeed, a bank trust must be used when acquiring property within the restricted zone. In this bank trust, the buyer of the property is designated as the “fideicomisario” or the beneficiary of the trust. While legal title is held by the bank, (specifically the trustee of the trust or the “fiduciario,”) the trustee must administer the property in accordance with the instructions of the buyer (the beneficiary of the trust). The property is not an asset of the bank, and the trustee is obligated to follow every lawful instruction given by the beneficiary to perform legal action. The Company has not yet established the bank trust, which is anticipated to occur before the end of the fiscal year 2024.

As of September 30, 2024, Valdeland sold six (6) house constructions on residential lots for estimated price of $1.5 million, of which $0.5 million has been paid and collected by the Company and initially presented under contract liability in the consolidated balance sheet. However, the Company offset the balance of construction in process with the contract liability with the net balance written off due to the uncertainty pertaining to the transfer of title.

Rancho Costa Verde Development (“RCVD”)

RCVD is a 1,000 acre, 1,200 lot master planned community in Baja, California, located few miles from the Company’s Oasis Park resort on the sea of Cortez. To date, RCVD has sold over 1,000 residential lots and built 55 single-family homes with approximately 30 under construction. This is in addition to a completed boutique hotel and clubhouse.

NOTE 4 – RELATED PARTY TRANSACTIONS

Chief Executive Officer – Roberto Valdes

Effective January 1, 2020, the Company executed an employment agreement with its Chief Executive Officer.

The Company has not accrued or paid any salary to its Chief Executive Officer for the nine months ended September 30, 2024. The balance owed is $66,846 as of September 30, 2024 and December 31, 2023, respectively.

As of September 30, 2024, the Company funded an aggregate amount of $1.4 million for construction on residential lots, projects amenities and towards the acquisition of land to companies controlled by the Company’s Chief Executive Officer. The land for the Plaza Bajamar and Valle Divino is currently owned by two entities controlled by the Chief Executive Officer (Valdeland S.A de C.V. and Valdetierra S.A de C.V) and all parties executed land purchase agreement for each project to transfer title of the land to a bank trust or “fideicomiso”, in which the Company will be named the beneficiary of the trust (“fideicomisario”).

During the year ended December 31, 2023, the Company funded an aggregate amount of approximately $251,000 to the construction companies owned by the Company’s Chief Executive Officer for the two projects in Ensenada, Baja California. The Company has not yet established the bank trust, which is anticipated to occur before the end of the fiscal year 2024. The properties at Valle Divino and Plaza Bajamar have executed promise to purchase agreements between the Company and Roberto Valdes, which require the transfer of titles of the land free of liens and encumbrances to the Company. There can be no assurance as to what and if any profit might have been received by our Chief Operating Officer, in his separate company as a result of these transactions.

On December 1, 2022, the Company issued 465,834 stock options under the 2022 Plan with a strike price of $0.20, vesting 25% on grant date and the remaining 75% monthly over a twelve-month period from grant date with an estimated fair value of approximately $90,188. The Company recognized approximately $16,900 of stock-based compensation related to these stock options during the nine months ended September 30, 2024.

Chief Financial Officer – Jason Sunstein

Effective January 1, 2020, the Company executed an employment agreement with its Chief Financial Officer.

The Company has not paid or accrued any salary to its Chief Financial Officer for the nine months ended September 30, 2024. The balance owed is $66,846 as of September 30, 2024 and December 31, 2023, respectively.

The Company’s Chief Financial Officer is also the managing member of Six Twenty Management LLC, an entity that has historically provided ongoing capital support to the Company.

The Company’s Chief Financial Officer also facilitated the Emerald Grove asset purchase.

President – Frank Ingrande

In May 2021, the Company executed an employment agreement with its President.

The Company has not accrued or paid any salary to its President for the nine months ended September 30, 2024. The balance owed is $66,846 as of September 30, 2024, and December 31, 2023, respectively.

Frank Ingrande was the co-founder and owner of 33% of the Company’s equity-method investee RCVD. During the year ended December 31, 2023, the Company acquired the remaining 75% interest in RCVD, which became the Company’s wholly owned subsidiary as of January 2023 (Note 8).

International Real Estate Development, LLC. (“IRED”)

Frank Ingrande was an owner of 33% of IRED at the time of the 25% initial investment in RCVD in May 2021 and subsequent to this transaction became a shareholder and President of the Company. As of the date the remaining 75% interest was acquired by the Company and as of September 30, 2024 and December 31, 2023, Mr. Ingrande was still the President of the Company and a 33% owner in IRED. As such, any transactions with IRED are deemed to be related party transactions.

On January 1, 2023, the Company issued a convertible promissory note pursuant to the acquisition of RCVD for a total principal of $8,900,000, carrying a 5% coupon and maturing on September 30, 2024. The convertible note is payable in quarterly installment of $2,225,000 starting on March 31, 2023. The convertible note includes a twelve percent (12%) default interest. Although, this convertible promissory note payable is part of the consideration to the business combination in stages (Note 8) which is not deemed a related party transaction, the convertible promissory note payable is with a related party and deemed a related party convertible promissory note payable. During the nine months ended September 30, 2024, the Company convertible the entire principal and interest balance of the promissory note into 89,000 Series A Preferred Shares. See Note 6 and Note 8 for additional information related to this convertible promissory note.

NOTE 5 – PROMISSORY NOTES

Promissory notes consisted of the following at September 30, 2024 and December 31, 2023:

SCHEDULE OF PROMISSORY NOTES

	September 30, 2024			December 31, 2023

Cash Call note payable, due August 2020 – past maturity	$	24,785		$	24,785
Cash Call note payable, due December 31, 2024	$	24,785		$	24,785
Elder note payable, 10% interest, due December 31, 2024		1,500			1,500
Elder note payable, 15% interest, due December 31, 2024		76,477			76,477
Griffith note payable, 15% interest, due December 31, 2024		250,000			250,000
Banker note payable, 15% interest, due December 31, 2024		42,500			97,500
Robles note Payable, 10% interest, due December 31, 2024		37,500			37,500
Victrix note payable, 20% interest, due December 31, 2024		400,000			400,000
Redwood Trust note payable, 12% interest, due January 2025		1,352,000			1,787,000
Total Notes payable	$	2,184,762		$	2,674,762
Less discounts		-			-

Total Promissory notes, net of discount		2,184,762			2,674,762

Less current portion		(2,184,762	)		(2,674,762	)

Total Promissory notes, net of discount - long term	$	-		$	-

Redwood Trust

On January 21, 2021, the Company refinanced its existing first and second mortgage loans on the 80 acres of land and the structure located at Sycamore Road in Hemet, California for aggregate amount of $1,787,000, carrying coupon at twelve (12) percent, payable in monthly interest installments of $17,870 starting on September 1st, 2021, and continuing monthly thereafter until maturity on February 1st, 2023, at which time all sums of principal and interest then remaining unpaid shall be due and payable. The balloon payment promissory note is secured by deed of trust. The refinanced amount paid off the first and second mortgage loans with a net funding to the Company of approximately $387,000, net of finders’ fees. On June 27, 2023, the Company, through Emerald Grove Estates, LLC, its wholly owned company, executed a modification agreement, under which the maturity date was extended to January 1, 2025, and the payment of all unpaid interest, late fees, charges.

Victrix LLC

On December 6, 2023, the Company took out a second financing on its 80 acres of land and the structure located at Sycamore Road in Hemet, California for aggregate amount of $400,000 carrying coupon at twenty (20) percent and continuing monthly thereafter until maturity, at which time all sums of principal and interest then remaining unpaid shall be due and payable. The balloon payment promissory note is secured by deed of trust and collateralized by 2,000,000 shares of common stock to be held in escrow until the debt is satisfied in full.

Cash Call, Inc.

On March 19, 2018, the Company issued a promissory note to CashCall, Inc. for $75,000 of cash consideration. The note bears interest at 94%. The Company also recorded a $7,500 debt discount due to origination fees due at the beginning of the note, which was fully amortized as of December 31, 2023. There was no activity during the nine months ended September 30, 2024.

On August 2, 2022, the Company and Cash Call settled for an aggregate principal of $23,641 payable in one lump sum or a series of 9 installments of $3,152. No payment was made under this settlement agreement.

As of September 30, 2024 and December 31, 2023, the remaining principal balance was $24,785, respectively. The Company has not incurred any interest expense related to this promissory note during the nine months ended September 30, 2024 due to the agreed upon settlement amount.

Christopher Elder

On December 15, 2020, the Company entered into a promissory note pursuant to which the Company borrowed $126,477. Interest under the promissory note in default is 18%, and the principal and all accrued but unpaid interest is due upon maturity.

There was no activity during the nine months ended September 30, 2024. As of September 30, 2024 and December 31, 2023, the remaining principal balance was $76,477, respectively.

The Company incurred approximately $2,868 of interest during the nine months ended September 30, 2024. Accrued interest was $37,839 and $34,971 as of September 30, 2024 and December 31, 2023, respectively.

Bobbie Allen Griffith

On September 5, 2023, the Company entered into a promissory note pursuant to which the Company borrowed $215,000. Interest under the promissory note is 15% per annum, and the principal and all accrued but unpaid interest is due upon maturity.

The Company repaid the note in full during the year ended December 31, 2023. During the year ended December 31, 2023, the Company was advanced an additional $250,000 due in May 2024. As of September 30, 2024 and December 31, 2023, the remaining principal balance was $250,000.

The Company incurred approximately $3,875 of interest during the nine months ended September 30, 2024, respectively. Accrued interest was $19,375 and $15,500 as of September 30, 2024 and December 31, 2023, respectively.

The Company initially recognized a debt discount and stock payable on this note of $20,777, which was fully amortized as of December 31, 2023.

George Banker

On August 11, 2023, the Company entered into a promissory note pursuant to which the Company borrowed $150,000. Interest under the promissory note is 15% per annum, and the principal and all accrued but unpaid interest was due on October 11, 2023. The note is in technical default as it is past maturity date and the Company failed to repay the outstanding principal and accrued interest.

Accrued interest was $22,500 as of September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024, the remaining principal balance was $42,500.

The Company initially recognized a debt discount and stock payable on this note of $5,769, which was fully amortized as of December 31, 2023.

George Robles

On September 1, 2023, the Company entered into a promissory note pursuant to which the Company borrowed $100,000. Interest under the promissory note is 5% per month with a default rate of 10% per month, and the principal and all accrued but unpaid interest is due upon maturity.

Accrued interest was $7,500 as of September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024, the remaining principal balance was $37,500.

The Company initially recognized a debt discount and stock payable on this note of $5,393, which was fully amortized as of December 31, 2023.

Kitchner

During the nine months ended September 30, 2024, the Company entered into a promissory note pursuant to which the Company borrowed $75,000. Interest under the promissory note is 10% per annum, and the principal and all accrued but unpaid interest is due in July 2024. As of September 30, 2024, the remaining principal balance was $0.

NOTE 6 – CONVERTIBLE NOTES

Convertible notes consisted of the following at September 30, 2024 and December 31, 2023:

SCHEDULE OF CONVERTIBLE NOTES

	September 30, 2024			December 31, 2023

1800 Diagonal convertible note #5, 9% interest, due June 2024		-			55,000
1800 Diagonal convertible note #6, 10% interest, due September 2024		-			68,511
1800 Diagonal convertible note #7, 10% interest, due September 2024		-			61,600
Mast Hill convertible note, 16% interest, due March 2023		250,000			250,000
Blue Lake convertible note, 16% interest, due March 2023		250,000			250,000
International Real Estate Development, 5% interest, due March 2024		-			8,900,000
Total convertible notes	$	500,000		$	9,585,111
Less discounts		(25,654	)		(33,034	)

Total convertible notes, net of discount		474,346			9,552,077

Less current portion		(474,346	)		(9,552,077	)

Total convertible notes, net of discount - long term	$	-		$	-

Mast Hill Fund, L.P (“Mast note”)

On March 23, 2022, the Company issued a convertible promissory note pursuant to which it borrowed gross proceeds of $250,000 for net proceeds of $211,250, net of issuance costs of $13,750 and original issuance discount of $25,000. The interest rate under the convertible promissory note in default is 16%, and the principal and all accrued but unpaid interest are due on March 23, 2023 but has been extended until the end of the year. The note requires eight (8) mandatory monthly installments of $35,000 starting in July 2022.

Additionally, as an incentive to the note holder, the securities purchase agreement also provided for the issuance of 225,000 shares of common stock with fair value of approximately $101,000, which were fully earned at issuance, and 343,750 warrants to purchase an equivalent number of shares of common stock at an exercise price of $0.80 and a term of five years. The note is convertible upon an event of default at the noteholder’s option into shares of our common stock at a fixed conversion price of $0.35, subject to standard anti-dilutive rights and down round protection. The conversion price of the convertible debt and the strike price of the warrants should be adjusted to the new effective conversion price following subsequent dilutive issuances.

During the year ended December 31, 2023, the Company converted approximately $133,096 of interest and premium into 1,664,857 shares of common stock.

The principal balance owed to Mast Hill Fund was $250,000 as of September 30, 2024 and December 31, 2023. The Company incurred approximately $9,221 of interest during the nine months ended September 30, 2024.

The Company has not yet received any default notice from the investor. Upon event of default, the Company is required to pay the outstanding principal plus accrued interest and a default penalty which is equal to 25% of the principal and accrued interest.

The Company initially recognized $219,832 of debt discount resulting from the original issue discount, the deferred financing costs, the fair value assigned to the commitment shares and the warrants. The balance of the unamortized debt discount was $0 as of September 30, 2024 and December 31, 2023, respectively.

Blue Lake Partners LLC (“Blue Lake note”)

On March 28, 2022, the Company issued a convertible promissory note pursuant to which it borrowed gross proceeds of $250,000 for net proceeds of $211,250, net of issuance costs of $13,750 and original issuance discount of $25,000. The interest rate under the convertible promissory note in default is 16%, and the principal and all accrued but unpaid interest are due on March 28, 2023. The note requires eight (8) mandatory monthly installments of $35,000 starting in July 2022. Additionally, as an incentive to the note holder, the securities purchase agreement provided for the issuance of 225,000 shares of common stock with fair value of approximately $101,000, which were fully earned at issuance, and 343,750 warrants for the purchase of an equivalent number of shares of common stock at an exercise price of $0.80 and a term of five years.

The note is convertible upon an event of default at the noteholder’s option into shares of our common stock at a fixed conversion price of $0.35, subject to standard anti-dilutive rights and down round provisions. With the issuance of a variable rate transaction with any new investor, the conversion price of the convertible debt and the strike price of the warrants should be adjusted down to the new effective conversion price.

The principal balance owed to Blue Lake was $250,000 as of September 30, 2024 and December 31, 2023.

The Company initially recognized $219,607 of debt discount resulting from the original issue discount, the deferred financing costs, the fair value assigned to the commitment shares and the warrants. The balance of the unamortized debt discount was $0 as of September 30, 2024 and December 31, 2023.

1800 Diagonal Lending Inc. (“Diagonal note”)

Diagonal note #5

On September 13, 2023, the Company issued a convertible promissory note pursuant to which it borrowed gross proceeds of $55,000 for net proceeds of $50,000, net of issuance costs of $5,000. Interest under the convertible promissory note is 9% per year and a default coupon of 22%.

The maturity date of the note is June 15, 2024. At any time after issuance, the note is convertible into shares of our common stock at the greater of a fixed conversion rate or discount to the market price. The note includes a prepayment feature at a premium of up to 25% from the issuance date and up to 180 days. The note includes a 50% penalty premium on unpaid principal and interest upon an event of default.

The Company initially recognized $5,000 of debt discount resulting from the original issue discount and the deferred financing costs. The Company amortized $1,527 through interest expenses during the nine months ended September 30, 2024. The balance of the unamortized debt discount was $0 and $3,473, respectively, as of September 30, 2024 and December 31, 2023.

Diagonal note #6

On September 6, 2023, the Company issued a convertible promissory note pursuant to which it borrowed gross proceeds of $92,000 for net proceeds of $75,000, net of issuance costs of $17,000. Interest under the convertible promissory note is 10% per year and a default coupon of 22%.

The maturity date of the note is September 6, 2024. At any time after issuance, the note is convertible into shares of our common stock at the greater of a fixed conversion rate or discount to the market price. The note includes a prepayment feature at a premium of up to 25% from the issuance date and up to 180 days. The note includes a 50% penalty premium on unpaid principal and interest upon an event of default.

Diagonal note #7

On December 5, 2023, the Company issued a convertible promissory note pursuant to which it borrowed gross proceeds of $61,600 for net proceeds of $55,000, net of issuance costs of $6,600. Interest under the convertible promissory note is 10% per year and a default coupon of 22%.

The maturity date of the note is September 15, 2024. At any time after issuance, the note is convertible into shares of our common stock at the greater of a fixed conversion rate or discount to the market price. The note includes a prepayment feature at a premium of up to 25% from the issuance date and up to 180 days. The note includes a 50% penalty premium on unpaid principal and interest upon an event of default.

All Diagonal notes have been satisfied in full as of September 30, 2024.

International Real Estate Development, LLC

The convertible note is convertible commencing on April 1, 2023 at the option of the holder into shares of common stock at a 10% discount to market price. The Company can prepay the convertible note at any time.

The Company incurred $111,250 of interest during the nine months ended September 30, 2024. In March 2024, the Company converted the entire principal balance of $8,900,000 and accrued interest of $556,250 into 89,000 shares of Series A Preferred shares. See Note 11 for further discussion.

NOTE 7 – PROMISSORY NOTES – RELATED PARTY

Related party promissory notes consisted of the following at September 30, 2024, and December 31, 2023:

SCHEDULE OF RELATED PARTY PROMISSORY NOTES

	September 30, 2024		December 31, 2023
Frank Ingrande – On demand	$	-	$	10,394
Lisa Landau – On demand		308,040		94,104
Total promissory notes, net of discount current	$	308,040	$	104,498

Lisa Landau

Lisa Landau is a relative of the Company’s Chief Financial Officer. During the nine months ended September 30, 2024 and the year ended December 31, 2023, Lisa Landau advanced funds to the Company for general corporate expenses and paid directly towards the Diagonal convertible notes.

NOTE 8 – BUSINESS ACQUISITION IN STAGES

On January 3, 2023, the Company completed the acquisition in stages of International Real Estate Development, LLC (“IRED” or the “seller”), for the purchase of the remaining seventy five percent (75%) of the issued and outstanding membership interest in Rancho Costa Verde Development, LLC (“RCVD”) for a total consideration of $13.4 million. The consideration was paid through (i) a secured convertible promissory note in the principal amount of $8,900,000 (Note 4 and 6), (ii) issuance of 20,000,000 shares of common stock with a fair value of $1.8 million and (iii) 33,000,000 common stock warrants to purchase an equivalent number of shares of common stock with a fair value of approximately $2.7 million. The Company issued the 20,000,000 shares of common stock to International Real Estate Development, LLC (“IRED”) on January 3, 2023.

Prior to the acquisition of a controlling financial interest in RCVD, the Company held a twenty five percent (25%) interest in RCVD, which was previously acquired and accounted for in May 2021 as an equity method investment under ASC 323 Investments – Equity Method and Joint Ventures (Note 9). It was determined that the Company did not have the power to direct the activities that most significantly impact RCVD’s economic performance, and therefore, the Company was not the primary beneficiary of RCVD and RCVD was not consolidated under the variable interest model. The investment was initially recorded at cost, which was determined to be $2,680,000. The carrying value was fully written down to $0 as of December 31, 2022.

As outlined in the letter of intent with IRED and RCVD dated April 2021, in addition to various communications with both parties, the Company had strategized and intended to acquire the remaining 75% of RCVD from the original discussions that began in 2018. The Company’s President and director was the previously the owner of one third of the issued and outstanding interest in International Real Estate Development LLC and has been disclosed as a related party since the acquisition of the initial 25% interest in RCVD.

The Company has accounted for this transaction as a business combination in stages under ASC 805 Business Combinations as the Company took control of RCVD in January 2023. Accordingly, and as of January 3, 2023, the assets acquired, and the liabilities assumed were recorded at their estimated fair value as of the closing date of the acquisition. The Company is in the process of finalizing the purchase price allocation and it is to be completed in January 2023.

The secured convertible promissory note has a principal amount of $8,900,000 and is payable in quarterly installments of $2,225,000, carries a five percent (5%) coupon. The note carries a default coupon of twelve percent (12%) on the unpaid principal after the maturity date. The note includes standard events of default, which will result in the principal and accrued interest to be payable immediately. The note is convertible at any time commencing on April 1, 2023, at the option of the holder, into shares of common stock of the company at a 10% discount to market. The note may be prepaid at any time without penalties. The Company has not made the first installment by December 31, 2023, but the Company obtained a default waiver from IRED. The Company incurred approximately $445,000 of interest during the year ending December 31, 2023. The note and all accrued interest were converted into common stock during the nine months ended September 30, 2024 (Note 6).

RCVD was originally formed in the State of Nevada. RCVD is a 1,100-acre master planned second home, retirement home, and vacation home real estate community located on the east coast of Baja California, Mexico. It is just south of the small fishing village of San Felipe, where the Oasis Park Resort project of the Company is located.

As of December 31, 2023, the Company finalized its purchase price allocation and valuation for the acquisition of RCVD.

The acquisition-date fair value of the consideration transferred is as follows:

SCHEDULE OF FAIR VALUE OF CONSIDERATION TRANSFERRED

	January 3, 2023

Fair value of common stock	$	1,800,000
Fair value of common stock warrants		2,674,972
Promissory notes	$	8,900,000
Fair value of consideration transferred	$	13,374,972

The following is the purchase price allocation as of the January 3, 2023, acquisition date:

SCHEDULE OF PROVISIONAL PURCHASE PRICE ALLOCATION

	January 3, 2023
Cash	$	321,916
Accounts receivable		1,900,388
Other current assets		342,574
Fixed Assets		16,213,967
Accounts payable and accrued expenses		(652,329	)
Mortgage loans		(6,576,566	)
Related party notes		(16,545	)
Deferred revenue		(9,276,620	)
Net Assets Acquired	$	2,256,785
Goodwill		11,118,187
Total consideration	$	13,374,972

Pro Forma Financial Information

The following unaudited pro forma consolidated results of operations for the years ended December 31, 2023 and 2022 assume the acquisition was completed on January 1, 2022:

SCHEDULE OF PRO FORMA FINANCIAL INFORMATION

	2023			2022
	Years Ended December 31,
	2023			2022
Pro forma net revenues		1,090,617			1,516,622
Pro forma net loss		(1,110,022	)		(926,798	)

Pro forma data does not purport to be indicative of the results that would have been obtained had these events actually occurred at the beginning of the periods presented and is not intended to be a projection of future results.

Common Stock warrants

At acquisition date, the Company measures the fair value of the common stock warrant using the Black-Scholes option valuation model using the following assumptions as of December 31, 2023:

SCHEDULE OF FAIR VALUE OF COMMON STOCK WARRANTS

Expected term		5 years
Exercise price	$	0.10
Expected volatility		145	%
Risk-free interest rate		3.94	%
Forfeitures		None

The Company computes the fair value of the common stock warrants at the acquisition date, which does not have to be updated at each reporting period.

NOTE 9 – EQUITY METHOD INVESTMENT

In May 2021, the Company acquired a 25% investment in RCVD in exchange for 3,000,000 shares of the Company’s common stock at a determined fair value of $0.86 per share and $100,000 in cash for total consideration of $2,680,000. The fair value of the non-monetary exchange was determined based on a valuation report obtained from an independent third-party valuation firm. The fair value of the Company’s common stock was determined based on weighted combination of market approach and asset approach. The market approach estimates fair value based on a weighted average between the listed price of the Company’s common shares and the Company’s recent private transaction adjusted for a lack of marketability discount.

The investment has been accounted for under the equity method. It was determined that the Company does not have the power to direct the activities that most significantly impact RCVD’s economic performance, and therefore, the Company is not the primary beneficiary of RCVD and RCVD has not been consolidated under the variable interest model.

The investment was initially recorded at cost, which was determined to be $2,680,000. The Company impaired the remaining balance of its equity-method investment for a total amount of $2,089,337 for the year ended December 31, 2022.

On January 3, 2023, the Company executed a securities purchase agreement with International Real Estate Development, LLC, for the purchase of the remaining seventy five percent (75%) of the issued and outstanding membership interest in RCVD for a total contractual consideration of $13,500,000.

The Company acquired a controlling financial interest and accounted for this transaction as a business combination in stages under ASC 805 (refer to note 8). Upon the acquisition of such controlling interest, the Company re-measured the previously held equity method interest to fair value as part of the accounting for the business combination, see Note 8.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

Commitment to Purchase Land (Valle Divino)

The land project consisting of 20 acres to be acquired from Baja Residents Club (a Company controlled by our CEO Roberto Valdes) and developed into Valle Divino resort in Ensenada, Baja California, the acquisition of title to the land for this project is subject to approval from the Mexican government in Baja, California. Although management believes that the transfer of title to the land will be approved before the end of the Company fiscal year end 2024, there is no assurance that such transfer of title will be approved in that time frame or at all. The Company has promised to transfer title to the plots of land to the investors who have invested in the Company once the Company receives an approval of change in transfer of title to the Company through a Fideicomiso. As of September 30, 2024 and December 31 2023, Valdetierra S.A de C.V., a company controlled and 100% owned by Roberto Valdes our Chief Executive Officer, has entered into fifteen (15) and thirteen (13) contracts for deed agreements to sell lots of land, respectively. The proceeds are collected by the Company and initially presented under contract liability in the consolidated balance sheets; however, the Company has netted the balance in contract liability against the related capitalized construction in process, with the remaining net balance fully impaired and recorded under impairment loss in the consolidated statement of operations.

Land purchase- Plaza Bajamar.

On September 25, 2019, the Company, entered into a definitive Land Purchase Agreement with Valdeland, S.A. de C.V., a Company controlled by our CEO Roberto Valdes, to acquire approximately one acre of land with plans and permits to build 34 units at the Bajamar Ocean Front Golf Resort located in Ensenada, Baja California. Pursuant to the terms of the Agreement, the total purchase price is $1,000,000, payable in a combination of a new series of preferred stock (with a stated value of $600,000), 250,000 shares of common stock, a promissory note in the amount of $150,000, and an initial construction budget of $150,000 payable upon closing. The closing is subject to obtaining the necessary approval by the City of Ensenada and transfer of title, which includes the formation of a wholly owned Mexican subsidiary. As of September 30, 2024 and December 31 2023, the agreement has not yet closed.

The total budget was established at approximately $1,556,000, inclusive of lots construction, of which approximately $995,747 has been paid, leaving a firm commitment of approximately $560,250 as of September 30, 2024 and December 31, 2023.

Commitment to Sell Land (IntegraGreen)

On September 30, 2019, the Company entered into a contract for deed agreement “Agreement” with IntegraGreen whose principal, Christopher Elder, is also a creditor. Under the agreement the Company agreed to the sale of 20 acres of vacant land and associated improvements located at the Emerald Grove property in Hemet, California for a total purchase price of $630,000, $63,000 was paid upon execution and the balance is payable in a balloon payment on October 1, 2026, with interest only payments due on the 1st of each month beginning April 1, 2020. During the duration of the Agreement the Company retains title and is allowed to encumber the property with a mortgage at its discretion, however IntegraGreen has the right to use the property. The Company may also evict IntegraGreen from the premises in the case of default under the agreement. As of September 30, 2024, the principal owed under the agreement is $403,020.

The Company fully impaired the carrying balance of its account receivable owed by IntegraGreen as of December 31, 2023

Oasis Park Resort construction budget

During the year ended December 31, 2021, the Company engaged a general contractor to complete phase I of the project including the two-mile access road and the community entrance structure. Contractor also commenced phase II construction including the waterfront clubhouse, casitas, and model homes. The total budget was established at approximately $512,000, of which approximately $118,600 has been paid, leaving a firm commitment of approximately $393,400 as of September 30, 2024 and December 31 2023.

Litigation Costs and Contingencies

From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business. Management is currently not aware of any such legal proceedings or claims that could have, individually or in the aggregate, a material adverse effect on our business, financial condition, or operating results.

NOTE 11 – STOCKHOLDERS’ EQUITY (DEFICIT)

The Company’s equity at September 30, 2024 consisted of 150,000,000 authorized common shares and 2,010,000 authorized preferred shares, all with a par value of $0.001 per share. As of September 30, 2024, there were 89,006,719 shares issued and 86,006,719 shares outstanding. As of December 31, 2023, there were 79,658,165 shares issued and 76,658,165 outstanding.

As of September 30, 2024, there were 117,000 shares of Series A Preferred Stock issued and outstanding, 1,000 shares of Series B Preferred Stock issued and outstanding, 3,100 shares of Series C Preferred Stock issued and outstanding and 17,000 of Series D Preferred Stock issued and outstanding.

As of December 31, 2023, there were 28,000 shares of Series A Preferred Stock issued and outstanding, 1,000 shares of Series B Preferred Stock issued and outstanding, 3,100 shares of Series C Preferred Stock issued and outstanding and 17,000 of Series D Preferred Stock issued and outstanding.

Equity Incentive Plans

2022 Equity Incentive Plan

On December 1, 2022, the Company’s Board of Directors approved a 2022 Equity Incentive Plan (the “2022 Plan”). Pursuant to the 2022 Plan, the Company has reserved a total of 5,000,000 shares of the Company’s common stock to be available under the 2022 Plan. The 2022 Plan was never approved by the stockholders. Therefore, any options granted under the 2022 Plan prior to stockholder approval will be “non-qualified”. The Company granted 2,150,000 options during the year ended December 31, 2022. There was no activity during the nine months ended September 30, 2024. The Company has 2,150,000 options issued and outstanding under the 2022 Plan as of September 30, 2024 and December 31, 2023.

2020 Equity Incentive Plan

On August 26, 2020, the Company’s Board of Directors approved the 2020 Equity Incentive Plan (the “2020 Plan”). The Company has reserved a total of 3,000,000 shares of the authorized common stock for issuance under the 2020 Plan. There was no activity during the nine months ended September 30, 2024. The Company has 1,700,000 options issued and outstanding under the 2020 Plan as of September 30, 2024 and December 31, 2023.

2019 Equity Incentive Plan

On February 11, 2019, the Company’s Board of Directors approved a 2019 Equity Incentive Plan (the “2019 Plan”). In order for the 2019 Plan to grant “qualified stock options” to employees, it required approval by the Corporation’s shareholders within 12 months from the date of the 2019 Plan. The 2019 Plan was never approved by the shareholders. Therefore, any options granted under the 2019 Plan prior to shareholder approval will be “non-qualified”. Pursuant to the 2019 Plan, the Company has reserved a total of 3,000,000 shares of the Company’s common stock to be available under the 2019 Plan. No options under the 2019 Plan were issued, cancelled, forfeited, or exercised during the nine months ended September 30, 2024. The Company has 2,150,000 options issued and outstanding under the 2019 Plan as of September 30, 2024 and December 31, 2023.

Activity during the nine months ended September 30, 2024

During the nine months ended September 30, 2024, the Company issued 4,702,595 shares of common stock pursuant to consulting agreements for a total fair value of approximately $317,419.

During the nine months ended September 30, 2024, the Company issued 1,223,776 shares of common stock pursuant to the conversion of convertible notes payable.

During the nine months ended September 30, 2024, the Company issued 2,484,832 shares of common stock pursuant to the exercise of warrants.

During the nine months ended September 30, 2024, the Company issued 550,000 shares of common stock pursuant to a promissory note agreement. The shares were valued at $47,415.

During the nine months ended September 30, 2024, the Company issued 387,351 shares of common stock pursuant to a stock dividend arrangement for Series C Preferred Stock.

Activity during the nine months ended September 30, 2023

During the nine months ended September 30, 2023, the Company issued 2,200,000 shares of common stock pursuant to consulting agreements for a total fair value of approximately $152,000.

During the nine months ended September 30, 2023, the Company issued 20,000,000 shares of common stock pursuant to a business acquisition with a fair value of 1,800,000.

During the nine months ended September 30, 2023, the Company issued 8,928,435 shares of common stock pursuant to the conversion of convertible notes and notes payable.

During the nine months ended September 30, 2023, the Company issued 267,310 shares of common stock pursuant to a cashless exercise of warrants.

During the nine months ended September 30, 2023, the Company issued 500,000 shares of common stock for $50,000 in cash proceeds.

Preferred Stock

On November 6, 2019, the Company authorized and issued 1,000 shares of Series B Preferred Stock (“Series B”) and 350,000 shares of common stock to CleanSpark Inc. in a private equity offering for $500,000. Management determined that the Series B should not be classified as liability per the guidance in ASC 480 Distinguishing Liabilities from Equity as of December 31, 2022, even though the conversion would require the issuance of variable number of shares since such obligation is not unconditional. As of December 31, 2022, and 2021, Management recorded the value attributable to the Series B of $293,500 as temporary equity on the consolidated balance sheets since the instrument is contingently redeemable at the option of the holder. The Company recognized the beneficial conversion feature (“BCF”) that arises from a contingent conversion feature, since the instrument reached maturity during the year ended December 31, 2020. The Company recognized such BCF as a discount on the convertible preferred stock. The amortization of the discount created by a BCF recognized as a result of the resolution of the contingency is treated as a deemed dividend that reduced net income in arriving at income available to common stockholders. The holder can convert the Series B into shares of common stock at a discount of 35% to the market price.

The terms and conditions of the Series B include an in-kind accrual feature, which provides for a cumulative accrual at a rate of 12% per annum of the face amount of the Series B. The Company has recognized a total dividend on Series B for a total accrual to $1,212,822 as of September 30, 2024 and December 31, 2023, respectively. The recognition of the in-kind accrual was reported in Additional Paid In Capital on the Company’s consolidated balance sheets.

The Securities Purchase Agreement (“SPA”) states that the in-kind accrual rate should be increased by10% per annum upon each occurrence of an event of default. In addition, the SPA further states that the conversion price initially set at a discount of 35% to the market price should be further increased by an additional 10% upon each occurrence of an event of default. At the date of their Annual Report, CleanSpark claims that the Company was in default in three instances triggering further discount to the market price for the conversion feature and additional accrual rate. Management has recorded for this additional default and interest expense as noted in the previous paragraph. The Company has not been served with any notice of default stating the specific default events but will continue to accrue the additional default interest until the matter is resolved. As of the date of the filing of this Annual Report, the parties are cooperating to resolve this matter.

During the nine months ended September 30, 2024, the Company issued 89,000 shares of Series A preferred stock pursuant to the conversion of the note payable to IRED for $8,900,000. The total principal balance along with accrued interest of $556,250 has been converted. The Company did not issue any shares of Series B preferred stock during the nine months ended September 30, 2024.

On June 2, 2023, the Company authorized and issued 10,000 and 3,100 shares, respectively, of Series C Preferred Stock (“Series C”) to Bigger Capital Fund, LP in a private equity offering for $310,000. Management determined that the Series C should not be classified as liability per the guidance in ASC 480 Distinguishing Liabilities from Equity as of September 30, 2024 and December 31, 2024, even though the conversion would require the issuance of variable number of shares since such obligation is not unconditional. As of September 30, 2024 and December 31, 2023, Management recorded the value attributable to the Series C of $310,000 as temporary equity on the consolidated balance sheets since the instrument is contingently redeemable at the option of the holder. The Company recognized the beneficial conversion feature (“BCF”) that arises from a contingent conversion feature. The Company recognized such BCF as a discount on the convertible preferred stock. The discount created by a BCF recognized as a result of the resolution of the contingency is treated as a deemed dividend. The holder can convert the Series C into shares of common stock at a variable discount to the market price.

The terms and conditions of the Series C include an in-kind accrual feature, which provides for a cumulative accrual at a rate of 12% per annum of the face amount of the Series C. The Company recognized a deemed dividend of $60,003 based on a discount to the purchase price on the Series C during the year ended December 31, 2023. The recognition of the in-kind accrual was reported in Additional Paid In Capital on the Company’s consolidated balance sheets. During the nine months ended September 30, 2024, the Company has issued 94,827 shares of common stock pursuant to the stock dividend terms in the agreement.

The Securities Purchase Agreement (“SPA”) states that the in-kind accrual rate should be increased by 8% per annum upon each occurrence of an event of default.

Concurrently with this SPA, the Company entered into a Warrant Inducement Agreement (“Inducement”). Previously, on July 26, 2021, the Company entered into a Warrant Purchase Agreement with Bigger Capital Fund, LP where the Company issued common stock purchase warrants at an exercise price of $0.68 (the “Existing Warrants”). As further consideration for Bigger Capital Fund, LP agreeing to enter in the Series C Preferred Stock Securities Purchase Agreement (the “New Purchase Agreement”), the Company offered an additional 1,240,000 Warrant Shares, and (b) a reduction of the exercise price of the Existing Warrants to $0.07 per Warrant Share. As such, upon accepting this offer, the terms to the Existing Warrant issued pursuant to the Inducement have been amended and restated to refer to 2,740,000 Warrant Shares in the aggregate and all Existing Warrants issued pursuant to the Inducement will have an updated exercise price per share of $0.07. As such, the Company recorded share-based compensation expenses of $123,896 related to the additional warrants issued during the year ended December 31, 2023.

In October 2023, the Company filed and adopted a Certificate of Designations, Preferences and Rights of the Series D Convertible Preferred Stock (the “Certificate of Designations”) with the Wyoming Secretary of State, authorizing the issuance of up to 20,000 shares of Series D Convertible Preferred Stock, par value $0.001 per share (the “Series D Preferred Stock”), each having a stated value equal to $100.00 (the “Stated Value”). The Series D Preferred Stock has no stated maturity and is subject to a mandatory redemption at 110% of the Stated Value, plus all unpaid dividends in respect of such share (the “Additional Amount”) thereon.

The Series D Preferred Stock ranks senior with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company to all other shares of capital stock of the Company, including all other outstanding shares of preferred stock as of the filing date of the Certificate of Designations, except, however, the Series D Preferred Stock is subordinate to the series of preferred stock of the Company designated as “Series C Convertible Preferred Stock.” The Company shall be permitted to issue capital stock, including preferred stock, that is junior in rank to the Series D Preferred Stock with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company.

Holders of shares of Series D Preferred Stock are entitled to receive, on each dividend payment date, (i) cumulative cash dividends on each share of Series D Preferred Stock, on a quarterly basis, at a rate of 12% per annum of the Stated Value, plus the Additional Amount thereon, and (ii) dividends in the form of shares of common stock on each share of Series D Preferred Stock, on a quarterly basis, at a rate of 8% per annum on the Stated Value.

At any time after the earlier of (i) a Qualified Offering (as defined below) or (ii) the date that is 18 months from the date the first share of Series D Preferred Stock is issued to any holder thereof, each holder of Series D Preferred Stock shall be entitled to convert any portion of the outstanding Series D Preferred Stock, including any Additional Amount, held by such holder into shares of common stock at the Conversion Price (as defined below) by following the mechanics of conversion set forth in the Certificate of Designations.

The amount of shares of common stock issuable upon a conversion for each Series D Preferred Stock shall be the Stated Value of such share plus the Additional Amount divided by the Conversion Price (as defined below). The “Conversion Price” for each Series D Preferred Stock is, the lower of the price per share at which a Qualified Offering (as defined below) is made (the “Qualified Offering Price”) or 80% of the average of the closing sale price for the 10 consecutive trading days immediately preceding, but not including, the effective date of the applicable conversion notice. A “Qualified Offering” means an offering of common stock (or units consisting of common stock and warrants to purchase common stock) resulting in the listing for trading of the common stock on the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).

During the year ended December 31, 2023, the Company converted $1,414,338 of principal and $171,825 of interest payable due to Six Twenty Management LLC into 17,000 shares of Series D Convertible Preferred Stock. The previous amounts due to the related party are discussed further in Note 6 of these financial statements. There was no activity during the nine months ended September 30, 2024.

Warrants

A summary of the Company’s warrant activity during the nine months ended September 30, 2024, is presented below:

SCHEDULE OF WARRANTS ACTIVITY

	Number of Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contract Term (Year)
Outstanding at December 31, 2023		38,107,500	$	0.16		4.17
Granted		-		-		-
Exercised		-		-		-
Forfeited-Canceled		-		-		-
Outstanding at September 30, 2024		38,107,500	$	0.16		3.67

Exercisable at September 30, 2024		38,107,500

The aggregate intrinsic value as of September 30, 2024 and December 31, 2023, was $0, respectively.

Options

A summary of the Company’s option activity during the nine months ended September 30, 2024, is presented below:

SCHEDULE OF OPTION ACTIVITY

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contract Term (Year)
Outstanding at December 31, 2023		6,000,000	$	0.34		3.14
Granted		-		-		-
Exercised		-		-		-
Forfeited-Canceled		-		-		-
Outstanding at September 30, 2024		6,000,000	$	0.34		2.64

Exercisable at September 30, 2024		6,000,000

Options outstanding as of September 30, 2024, and December 31, 2023, had aggregate intrinsic value of $0, respectively.

NOTE 12 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events for adjustment to or disclosure in its consolidated financial statements through the date of this report and has not identified any recordable or disclosable events.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview of Our Company

The Company was incorporated pursuant to the laws of the State of Wyoming on September 26, 2013. We are based in San Diego, California. We are a residential land development company with target properties located primarily in the Baja California Norte region of Mexico and Southern California. Our principal activities are purchasing properties, obtaining zoning and other entitlements required to subdivide the properties into residential and commercial building plots, securing financing for the purchase of the plots, improving the properties’ infrastructure and amenities, and selling the lots to homebuyers, retirees, investors, and commercial developers. We offer the option of financing (i.e. taking a promissory note from the buyer for all or part of the purchase price) with a guaranteed acceptance on any purchase for every customer.

Overview

The real estate market in Northern Baja California has continued to significantly improve and has fully recover from the negative impact of Covid-19. The housing prices has continued to rise in the Southwest U.S., and inventory has remained severely low, which generated additional attraction from home buyers seeking second homes or vacation homes.

The Company’s current portfolio includes residential, resort and commercial properties comprising the following projects:

	■	*Oasis Park Resort* is a 497-acres master planned real estate community including 1,344 residential home sites, south of San Felipe, Baja California, which offers a 180-degree sea and mountain views. In addition to the residential lots, there is a planned boutique hotel, a spacious commercial center, and a nautical center. The Company recently allowed prospective homeowners and existing lot holders to tour the property again. 75 of the 1,344 planned residential lots were pre-sold to initial shareholders. The Company has made significant progress on the project, which included the completion of the two-mile access road and the community entrance structure. The Company also started construction of the waterfront clubhouse, and model homes.

	■	*Valle Divino* is a self-contained solar 650-home site project in Ensenada, Baja California, with test vineyard at the property. This resort includes 137 residential lots and 3 commercial lots on 20 acres of land. This represents an estimated $60 million in gross sales opportunity.

	■	*Plaza Bajamar Resort* is an 80-unit project located at the internationally renowned Bajamar Ocean front hotel and golf resort. The Bajamar oceanfront golf resort is a master planned golf community located 45 minutes south of the San Diego-Tijuana border along the scenic toll road to Ensenada. The first Phase will include 22 “Merlot” 1,150 square-foot single-family homes that features two bedrooms and two baths. The home includes two primary bedroom suites - one on the first floor and one upstairs, as well as fairway and ocean views from a rooftop terrace. The Merlot villas will come with the installation of solar packages.

	■	*Emerald Grove Estates* is the Company’s newly renovated Southern California property, used for organized events at this 8,000 square foot event venue.

	■	*Rancho Costa Verde (“RCVD”)* is a 1,100-acre master planned second home, retirement home and vacation home real estate community located on the east coast of Baja California. RCVD is a self-sustained solar powered green community that takes advantage of the advances in solar and other green technology. In May 2021, the Company acquired a 25% investment in RCVD in exchange for $100,000 and 3,000,000 shares of the Company’s common stock, and such investment was initially recorded as an equity-method investment in the Company’s condensed consolidated financial statements. On January 3, 2023, the Company acquired the remaining 75% membership interest in RCVD for a contractual consideration of $13.5 million, paid through $8,900,000 secured convertible note, 20,000,000 shares of common stock and 33,000,000 common stock warrants. Such transaction was recorded pursuant to ASC 805 Business Combinations.

Summary of key operational and financial events:

	■	During the year ended December 31, 2023, the Company collected an aggregate amount of $312,175 from house construction at the Plaza Bajamar project, which was initially recorded and presented as contract liability in the consolidated balance sheets. However, the Company offset the balance with the additional cash funded for the construction of amenities at Bajamar, with the net balance presented as impairment loss in the consolidated statement of operations in the previous period.

	■	Continued our research and marketing efforts to identify potential home buyers in the United States, Canada, Europe, and Asia. Through the formation of a partnership with a similar development company in the Baja California Norte Region of Mexico, we have been able to leverage additional resources with the use of their established and proven marketing plan which can help us with sophisticated execution and the desired results for residential plot sales and development.

	■	Title of Oasis Park Resort in San Felipe was assumed during 2019. We are expecting the transfer of title on Valle Divino in Ensenada, Baja California and Plaza Bajamar in Ensenada, Baja California before the end of our fiscal year 2024, as we continue to follow the necessary steps to complete this legal process.

Results of Operations for the Three and Nine months Ended September 30, 2024, compared to the Three and Nine months Ended September 30, 2023

	For the three months ended						For the nine months ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Revenue, net	$	1,303,271		$	358,129		$	7,134,240		$	1,084,641

Cost of revenue		390,788			296,680			993,114			300,680

Gross profit		912,483			61,449			6,141,126			783,961

Operating expenses
Sales and marketing		160,884			12,000			497,863			300,259
Impairment loss		-			-			-			245,674
General and administrative expenses		474,819			1,007,030			1,176,452			2,316,807
Total operating expenses		635,703			1,019,030			1,674,314			2,862,740

Income (loss) from operations		276,779			(957,581	)		4,466,811			(2,078,779	)

Other expense:
Loss from acquisition of RCVD		-			(2,995,000	)		-			(2,995,000	)
Loss from debt extinguishment		-			(1,091,117	)		-			(1,140,446	)
Change in fair value of derivative		-			(588,314	)		229,814			(690,091	)
Interest expense		(528,376	)		(708,356	)		(1,204,375	)		(1,723,273	)
Total other expense, net		(528,376	)		(5,382,787	)		(974,561	)		(6,548,810	)

Net income (loss)	$	(251,598	)	$	(6,340,368	)	$	3,492,250		$	(8,627,589	)

Revenue

Revenue increased by $845,142 to $1,303,271 for the three months ended September 30, 2024, from $358,129 for the three months ended September 30, 2023. The revenue recognized during the three months ended September 30, 2024 includes real estate sales, interest from financed sales, financing fees, previously deferred revenues, and components of home construction.

Revenue increased by $6,049,599 to $7,134,240 for the nine months ended September 30, 2024, from $1,084,641 for the nine months ended September 30, 2023. The revenue recognized during the nine months ended September 30, 2024 includes real estate sales, interest from financed sales, financing fees, previously deferred revenues, and components of home construction.

Cost of revenue

Cost of revenue increased to $390,788 for the three months ended September 30, 2024, from $296,680 for the three months ended September 30, 2023. Cost of revenue includes land cost and related land improvements including infrastructure and subdivision costs.

Cost of revenue increased to $993,114 for the nine months ended September 30, 2024, from $300,680 for the nine months ended September 30, 2023. Cost of revenue includes land cost and related land improvements including infrastructure and subdivision costs.

Operating Expenses

Operating expenses decreased by $383,327 to $635,703 for the three months ended September 30, 2024, from $1,019,030 for the three months ended September 30, 2023.

Operating expenses decreased by $1,188,426 to $1,674,314 for the nine months ended September 30, 2024, from $2,862,740 for the nine months ended September 30, 2023.

Such decrease mainly relates to the reduced marketing efforts incurred by RCVD and ILAL during the three and nine months ended September 30, 2024, as the Company was in process of raising additional capital. Sales costs are related to real estate’s sales commissions. Marketing costs include advertising, prospective customers’ education, travel, and accommodation. In addition, general and administrative decreased for professional fees and other general and administrative expenses due to the lack of capital available during the three and nine months ended September 30, 2024. General and administrative costs mainly include commissions paid attributable to sales.

Other expense

Other expenses decreased to $528,376 in the three months ended September 30, 2024, from $5,382,787 in the three months ended September 30, 2023. Such change is primarily due to the change in fair value of the Company’s derivative liability, a decrease in loss on debt from extinguishment, a decrease in the loss on acquisition, with interest expense decreasing period over period.

Other expenses decreased to $974,561 in the nine months ended September 30, 2024, from $6,548,810 in the nine months ended September 30, 2023. Such change is primarily due to the change in fair value of the Company’s derivative liability, a decrease in loss on debt from extinguishment, a decrease in the loss on acquisition, with interest expense decreasing period over period.

Net Income (Loss)

The Company finished the three months ended September 30, 2024, with net loss of $251,598, as compared to a net loss of $6,340,368 for the three months ended September 30, 2023. The decrease in our net loss resulted from the reasons outlined above.

The Company finished the nine months ended September 30, 2024, with net income of $3,492,250, as compared to a net loss of $8,627,589 for the nine months ended September 30, 2023. The increase in our net income resulted from the reasons outlined above.

The factors that will most significantly affect future operating results will be:

	■	The positive effect of implemented sales and marketing initiatives to drive opportunities into our various projects.
	■	The quality of our amenities.
	■	The global economy and the demand for vacation homes.
	■	The sale price of future plots and home construction compared to the sale price in other resorts in Mexico.
	■	The prime location of our projects.

Other than the foregoing we do not know of any trends, events or uncertainties that have had, or are reasonably expected to have, a material impact on our revenues or expenses.

Capital Resources and Liquidity

Cash was $3,339 and $140,247 as of September 30, 2024, and December 31, 2023, respectively. As shown in the accompanying financial statements, we recorded income of $3.5 million for the nine months ended September 30, 2024. Our working capital deficit as of September 30, 2024, was $13.8 million. These factors and our ability to raise additional capital to accomplish our objectives, raises substantial doubt about our ability to continue as a going concern. We expect our expenses will continue to increase during the foreseeable future as a result of increased operations, increased construction activity and the development of current and future projects which include our current business operations.

We anticipate generating increased revenues over the next twelve months, as we continue to market the sale of plots held for sale at our various projects, generate cash from the sale of house construction at our properties.

If the Company is not successful with its marketing efforts to increase sales, the Company will continue to experience a shortfall in cash, and it will be necessary to obtain funds through equity or debt financing in sufficient amounts or to further reduce its operating expenses in a manner to avoid the need to curtail its future operations.

Operating Activities

Net cash flows provided by operating activities for the nine months ended September 30, 2024, was $741,721 which resulted primarily due to net income of $3,492,250, non-cash share-based compensation of $515,537, depreciation of $87,250, and change in fair value of derivative liability of $229,814, offset by net change in assets and liabilities of $3,123,502.

Net cash flows used in operating activities for the nine months ended September 30, 2023, was $1,107,362 which resulted primarily due to the loss of $8,627,589 offset by non-cash share-based compensation of $358,037, amortization of debt discount of $357,376, depreciation of $89,241, impairment loss of $245,674, loss from debt extinguishment of $1,140,446, loss on acquisition of RCVD of $2,995,000, fair value of equity securities issued for services for $152,000, excess fair value of derivative liability for $108,465, change in fair value of derivative liability of $475,114, and net change in assets and liabilities of $1,490,778.

Investing Activities

Net cash flows used in investing activities was $513,138 for the nine months ended September 30, 2024. The funds were used for the development of the various projects and additional investment for land development.

Net cash flows used in investing activities was $101,900 for the nine months ended September 30, 2023. The funds were used for the development of the various projects and the purchased house construction at Plaza Bajamar and Valle Divino for $354,070, additional investment for land development for $274,846. This was offset by the cash acquired for $321,920 from the acquisition of RCVD and $205,096 in proceeds from the disposal of fixed assets.

Financing Activities

Net cash flows used in financing activities for the nine months ended September 30, 2024, was $365,491, primarily from cash proceed from related parties for aggregate amount of $203,541, cash payments for convertible notes of $177,731, cash proceeds from other loans for $190,376, cash proceeds from promissory notes of $75,000, dividends paid of $91,678, and cash payments on promissory notes of $565,000.

Net cash flows provided by financing activities for the nine months ended September 30, 2023, was $1,283,005, primarily from cash proceeds from additional funding from related parties for aggregate amount of $560,840, cash proceeds from convertible notes of $225,000, cash proceeds from other loans for $380,938, cash proceeds from Common Stock issuances of $50,000, cash proceeds from promissory notes of $465,000, and cash proceeds from Series C Preferred Stock issuance of $250,000. These were offset by $318,359 repayment of related party advances, $60,000 repayment of promissory notes, and $270,414 repayment of convertible notes.

As a result of these activities, we experienced a decrease in cash of $136,908 for the nine months ended September 30, 2024.

Our ability to continue as a going concern is dependent on our success in obtaining additional financing from investors or from the sale of our common shares.

Critical Accounting Polices

There have been no material changes to our critical accounting policies as compared to the critical accounting policies and significant judgments and estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on June 27, 2024.

Off-balance Sheet Arrangements

During the period ended September 30, 2024, we have not engaged in any off-balance sheet arrangements.

New and Recently Adopted Accounting Standards

For a listing of our new and recently adopted accounting standards, see Note 2, Summary of Significant Accounting Policies, to the Notes to the condensed consolidated financial statements in “Part I, Item 1. condensed consolidated financial statements” of this Quarterly Report.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not required under Regulation S-K for “smaller reporting companies.”

Item 4. Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer (Principal Executive Officer) and the Chief Financial Officer (Principal Financial Officer), to allow for timely decisions regarding required disclosure. In designing and evaluating disclosure controls and procedures, the Company recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

The Company conducted an evaluation under the supervision and with the participation of management, including the Principal Executive Officer and Principal Financial Officer, of the effectiveness of its disclosure controls and procedures as of September 30, 2024, as defined in Rule 13a -15(e) and Rule 15d -15(e) under the Exchange Act. This evaluation was carried out under supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2024, our disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting related to the lack of adequate accounting and finance personnel, inadequate controls over maintenance of records, inadequate internal controls relating to the authorization, recognition, capture, and review of transactions, facts, circumstances, and events that could have a material impact on the Company’s financial reporting process.as further discussed in our Annual Report on Form 10-K for the year ended December 31, 2023, and which the Company determined continued to exist as of September 30, 2024.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the nine months ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

We are not party to, and our property is not the subject of, any material pending legal proceedings.

Item 1A. Risk Factors

You should carefully review and consider the information regarding certain factors that could materially affect our business, financial condition or future results set forth under Part I, Item 1A, Risk Factors, contained in our Annual Report on Form 10-K for Fiscal 2023, as filed with the SEC on June 27, 2024. The risk factors described in the fiscal year ended 2023 Form 10-K have not materially changed.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the nine months ended September 30, 2024, the Company issued 2,484,832 shares of common stock pursuant to the exercise of warrants. All other equity issuances during the nine months ended September 30, 2024 were non-cash.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Item 6. Exhibits

(a) Exhibits

Exhibit No.		Description
31.1*		Certification of Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2022
32.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101*		Inline XBRL Document set for the financial statements and accompanying notes in Part I, Item 1, of this Quarterly Report on Form 10-Q

104*		Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.

		Exhibits designated by the symbol * are filed or furnished with this Quarterly Report on Form 10-Q

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated:	November 20, 2024	International Land Alliance, Inc.

		By:	/s/ Roberto Jesus Valdes
			Principal Executive Officer and a Director

		By:	/s/ Jason Sunstein
			Principal Financial and Accounting Officer and a Director

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International Land Alliance (ILAL) 10-Q2024 Q3 Quarterly report

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