| NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The Company’s
consolidated financial statements and the notes thereto have been prepared in accordance with Generally Accepted Accounting Principles
(“GAAP”) in the United States of America. The consolidated financial statements include Real Brands, and its wholly owned
subsidiaries. One subsidiary, Real Brands Venture Group, LLC, has been inactive for the last two years and only maintains a debt instrument
on its financial records. DePetrillo Real Estate Holdings, LLC is a wholly owned subsidiary of CASH and the owner of the Company’s
building in Rhode Island. American Standard Hemp Inc. is a wholly owned subsidiary of CASH and holds the hemp licenses in Rhode Island.
All significant intercompany accounts and transactions have been eliminated. Use of estimates and judgments 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 consolidated financial statements and
the reported amounts of expenses during the reporting period. Key areas of estimation include the estimated useful lives of property,
plant, equipment and intangibles assets and liabilities, income taxes, and the valuation of stock-based compensation. Due to the uncertainty
inherent in such estimates, actual results may differ from the Company’s estimates. Accounting standard updates From time to time, new accounting pronouncements
are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of
the specified effective date. Unless otherwise discussed, the Company believes that the effect of recently issued standards that are
not yet effective will not have a material effect on its consolidated financial position or results of operations upon
adoption. Segment Reporting The Company operates as one segment, in which management
uses one measure of profitability, and all of the Company’s assets are located in the United States of America. The Company does
not operate separate lines of business or separate business entities with respect to any of its product candidates. Accordingly, the Company
does not have separately reportable segments. Cash and Cash Equivalents The Company considers all highly liquid investments
with an original maturity of three months or less when purchased to be a cash equivalent. Accounts Receivable and Allowance for Doubtful
Accounts The Company performs periodic credit evaluations of
its customers’ financial conditions and generally does not require collateral. The Company reviews all outstanding accounts receivable
for collectability on a quarterly basis. An allowance for doubtful accounts is recorded for any amounts deemed uncollectable. The Company
does not accrue interest receivable on past due accounts receivable. Concentrations of Credit Risk The Company, from time to time during the years covered
by these consolidated financial statements, may have bank balances in excess of its insured limits. Management has deemed this a normal
business risk. Inventory Inventory is comprised of raw hemp and hemp oil in
different phases of production to completion of final product. Products include tinctures, creams and lotions. Inventory is valued at
cost. No packaging material of any kind is included in inventory. Packaging materials are expensed as incurred. Property and Equipment On February 15, 2020 the Company purchased
DePetrillo Real Estate Holdings, LLC, a Rhode Island Limited Liability Company having as it’s only asset the building at 12 Humbert
Street in North Providence Rhode Island. The building is the Company’s headquarters and a hemp processing facility. The purchase
price of the building was 2 million $25,000 $189,916 $25,000 $475,000 30 The Company made $355,301 $26,588 $85,000 15 Property and equipment are recorded at cost. Depreciation
is computed using the straight-line method over estimated useful lives of five years $35,014 $35,014 Property and
equipment are summarized as follows at September 30, 2021 and September 30, 2020: Schedule of Property and equipment
September 30, September 30,
2021 2020
Furniture and equipment $ 766,044 $ 725,965
Leasehold Improvements 46,859 46,859
Gross fixed assets 812,903 772,824
Accumulated depreciation 389,289 236,827
Net furniture and equipment $ 423,614 $ 535,997 Impairment of Long-Lived Assets The Company reviews long-lived assets, including
property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the
assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant
underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes
or planned changes in the use of the assets. If an impairment review is performed to evaluate long-lived asset for recoverability, the
Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset
to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the
use of an asset over its fair value, determined based on discounted cash flows is less than the carrying value on the books of the Company.
To date, the Company has not recorded any impairment losses on long-lived assets. Revenue Recognition The Company follows, ASC 606 Revenue from Contracts
with Customers which establishes a single and comprehensive framework and sets out how much revenue is to be recognized, and when. The
core principle is that a vendor should recognize revenue to depict the transfer of promised goods or services to customers in an amount
that reflects the consideration to which the vendor expects to be entitled in exchange for those goods or services. Revenue will now be
recognized by a vendor when control over the goods or services is transferred to the customer. In contrast, Revenue based revenue recognition
is around an analysis of the transfer of risks and rewards; this now forms one of a number of criteria that are assessed in determining
whether control has been transferred. The application of the core principle in ASC 606 is carried out in five steps: Step 1 – Identify
the contract with a customer: a contract is defined as an agreement (including oral and implied), between two or more parties, that creates
enforceable rights and obligations and sets out the criteria for each of those rights and obligations. The contract needs to have commercial
substance and it is probable that the entity will collect the consideration to which it will be entitled. Step 2 – Identify the
performance obligations in the contract: a performance obligation in a contract is a promise (including implicit) to transfer a good or
service to the customer. Each performance obligation should be capable of being distinct and is separately identifiable in the contract.
Step 3 – Determine the transaction price: transaction price is the amount of consideration that the entity can be entitled to, in
exchange for transferring the promised goods and services to a customer, excluding amounts collected on behalf of third parties. Step
4 – Allocate the transaction price to the performance obligations in the contract: for a contract that has more than one performance
obligation, the entity will allocate the transaction price to each performance obligation separately, in exchange for satisfying each
performance obligation. The acceptable methods of allocating the transaction price include adjusted market assessment approach, expected
cost plus a margin approach, and the residual approach in limited circumstances. Discounts given should be allocated proportionately to
all performance obligations unless certain criteria are met and reallocation of changes in standalone selling prices after inception is
not permitted. Step 5 – Recognize revenue as and when the entity satisfies a performance obligation: the entity should recognize
revenue at a point in time, except if it meets any of the three criteria, which will require recognition of revenue over time: the entity’s
performance creates or enhances an asset controlled by the customer, the customer simultaneously receives and consumes the benefit of
the entity’s performance as the entity performs, and the entity does not create an asset that has an alternative use to the entity
and the entity has the right to be paid for performance to date. Stock-based Compensation The Company expenses stock-based compensation to employees
and consultants based on the fair value at grant date, which generally is the agreement date the Company entered into with employees or
consultants. To date the Company has issued restricted common stock shares and preferred stock. Beneficial Conversion Features of Convertible
Securities Conversion options that are not bifurcated as a derivative
pursuant to ASC 815 and not accounted for as a separate equity component under the cash conversion guidance are evaluated to determine
whether they are beneficial to the investor at inception (a beneficial conversion feature) or may become beneficial in the future due
to potential adjustments. The beneficial conversion feature guidance in ASC 470-20 applies to convertible stock as well as convertible
debt which are outside the scope of ASC 815. A beneficial conversion feature is defined as a nondetachable conversion feature that is
in the money at the commitment date. The beneficial conversion feature guidance requires recognition of the conversion option’s
in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument.
The resulting discount is amortized as a dividend over either the life of the instrument, if a stated maturity date exists, or to the
earliest conversion date, if there is no stated maturity date. If the earliest conversion date is immediately upon issuance, the dividend
must be recognized at inception. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion
price may trigger the recognition of an additional beneficial conversion feature on occurrence. Derivatives The Company reviews the terms of convertible debt
issued to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be
bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more
than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative
instruments are accounted for as a single, compound derivative instrument. Bifurcated embedded derivatives are initially recorded
at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense.
When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as
liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining
proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount
from their face value. The discount from the face value of the convertible debt, together with the stated interest on the instrument,
is amortized over the life of the instrument through periodic charges to interest expense. Net Loss Per Common Share Basic net loss per common share is computed
by dividing net loss by the weighted-average number of common shares outstanding during the period. Potential common stock equivalents
are determined using the treasury stock method. For diluted net loss per share purposes, the Company excludes stock options and other
stock-based awards, including shares issued as a result of option exercises that are subject to repurchase by the Company, whose effect
would be anti-dilutive from the calculation. During the three months ended September 30, 2021 and 2020, common stock equivalents were
excluded from the calculation of diluted net loss per common share, as their effect was anti-dilutive due to the net loss incurred. Therefore,
basic and diluted net loss per share was the same in all periods presented. The Company had 182,524,275 400,000 Treasury Stock The Company accounts for treasury stock under the
cost method and includes treasury stock as a component of stockholder’s deficit. Fair Value of Financial Instruments The guidance for fair value measurements, ASC 820,
Fair Value Measurements and Disclosures, establishes the authoritative definition of fair value, sets out a framework for measuring fair
value, and outlines the required disclosures regarding fair value measurements. Fair value is the price that would be received to sell
an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an
orderly transaction between market participants at the measurement date. The Company uses a three-tier fair value hierarchy based upon
observable and non-observable inputs as follow:
• Level 1 – Quoted market prices in active markets for identical assets and liabilities;
• Level 2 – Inputs, other than level 1 inputs, either directly or indirectly observable; and
• Level 3 – Unobservable inputs developed using internal estimates and assumptions (there is little or no market date) which reflect those that market participants would use.
The Company records its derivative activities at fair
value. As of September 30, 2021, no derivative liabilities are recorded. |
