| Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Accounting Principles The accompanying unaudited consolidated financial
statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)
for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the U.S. Securities and Exchange
Commission (the “SEC”). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial
statements. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all
the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30,
2022, and the results of operations and cash flows for the periods presented. The results of operations for the three and six months ended
June 30, 2022, are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited
consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the
Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the U.S. Securities and Exchange Commission
(the “SEC”) on April 18, 2022. Principles of Consolidation The unaudited consolidated financial statements
include the accounts of the Company and its subsidiaries, all of which are wholly owned. All intercompany balances and transactions have
been eliminated. Use of Estimates The preparation of financial statements in conformity
with GAAP requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses
during the reporting periods. Actual results could differ from those estimates. Certain of these estimates could be affected by external
conditions, including those unique to the Company’s industries, and general economic conditions. These external conditions could
affect the Company’s estimates so as to cause actual results to differ materially from its estimates. The Company re-evaluates all
of its accounting estimates at least quarterly based on these conditions and records adjustments when necessary. Significant estimates relied upon in preparing
these consolidated financial statements include revenue recognition, accounts receivable reserves, inventory and related reserves, valuations
and purchase price allocations related to business combinations, expected future cash flows used to evaluate the recoverability of long-lived
assets, estimated fair values of long-lived assets used to record impairment charges related to intangible assets and goodwill, amortization
periods, accrued expenses, share-based compensation, and recoverability of the Company’s net deferred tax assets and any related
valuation allowance. Cash and Cash Equivalents The Company considers all short-term highly liquid
investments with an original maturity at the date of purchase of 3 months or less to be cash equivalents. The Company had no Accounts Receivable Included in accounts receivable on the
consolidated balance sheets are amounts primarily related to customers. The Company estimates losses on receivables based on known
troubled accounts and historical experience of losses incurred. Receivables are considered impaired and written off when it is
probable that all contractual payments due will not be collected in accordance with the terms of the related agreement. Based upon
experience and the judgment of management, the provision for doubtful accounts was $ 5,750 Inventories Inventories, which consist of products held
for resale, are stated at the lower of cost (determined using the first-in first-out method) and net realizable value. Net
realizable value is the estimated selling price in the ordinary course of business, less estimated costs to complete and dispose of
the product. If the Company identifies excess, obsolete or unsalable items, its inventories are written down to their realizable
value in the period in which the impairment is first identified. Shipping and handling costs incurred for inventory purchases and
product shipments are recorded in cost of sales in the Company’s consolidated statements of operations. As of June 30, 2022,
no inventory reserves were considered necessary. Property and Equipment Property and equipment are stated at cost less
accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets. Furniture and fixtures
are depreciated over the useful life of 7 3 7 2 Goodwill and Intangible Assets Goodwill and intangible assets that have indefinite
useful lives are not amortized but are evaluated for impairment annually or whenever events or changes in circumstances indicate that
their carrying value may not be recoverable. The Company records intangible assets at fair value when they are acquired and they are tested
for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment
test consists of a comparison of the fair value of the indefinite-lived intangible asset with its carrying amount. If the carrying amount
of an intangible asset exceeds its fair value, an impairment loss will be recorded in the consolidated statements of operations in an
amount equal to that excess. The Company amortizes its intangible assets that have finite lives using either the straight-line method
or based upon estimated future cash flows to approximate the pattern in which the economic benefit of the assets will be utilized. Amortization
is recorded over estimated useful lives ranging from 5 20 The Company reviews intangible assets subject
to amortization at least annually to determine whether any adverse conditions exist or a change in circumstances has occurred that would
indicate impairment or a change in the remaining useful life. Conditions that would indicate impairment and trigger a more frequent than
quarterly impairment assessment include, but are not limited to, a significant adverse change in legal factors or business climate that
could affect the value of an asset or an adverse action or assessment by a regulator. If the carrying value of an intangible asset exceeds
its undiscounted cash flows, the Company will write down the carrying value to its fair value in the period identified. The Company generally
calculates fair value as the present value of estimated future cash flows to be generated by the asset using a risk-adjusted discount
rate. If the estimate of an intangible asset’s remaining useful life is changed, the Company will amortize its remaining carrying
value prospectively over its revised remaining useful life. The Company has conducted its annual impairment test of goodwill during the
fourth quarter of each year. The estimation of fair value requires significant judgment. There was no Any loss resulting from an impairment test will
be reflected in operating income in the Company’s consolidated statements of operations. The annual impairment testing process is
subjective and requires judgment at many points. If these estimates or their related assumptions change in the future, the Company may
be required to record impairment charges for these assets not previously recorded. Revenue Recognition The Company follows the Financial Accounting Standards
Board’s (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers Under ASC 606, Company recognizes revenue when
a customer obtains control of promised goods or services or when they are shipped to a customer, in an amount that reflects the consideration
that it expects to receive in exchange for them. The Company recognizes revenues following the five-step model prescribed under ASC 606:
(a) it identifies a contract with a customer; (b) it identifies the performance obligations in the contract; (c) it determines the transaction
price; (d) it allocates the transaction price to the performance obligations in the contract; and (e) it recognizes revenues when (or
as) it satisfies its performance obligation. Revenues from product sales are recognized when
a customer obtains control of the Company’s product, which occurs at a point in time, typically upon shipment to the customer. The
Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that
it would have been recognized is 1 year or less or the amount is immaterial. Revenue from sales of items sold by the Company
for the three months ended June 30, 2022, and June 30, 2021, and the percentage of sales allocable to each item to the Company’s
total revenues were as follows:
Schedule of revenue from sales of items sold
Three Months Ended June 30,
2022 2021
Revenues % Revenues %
GrowPods and related products $ 202,500 27 $ 145,000 19
Medtainers 188,655 26 273,961 36
Lighters 174,286 24 129,600 17
Humidity pack inserts 92,884 13 86,409 11
Plastic lighter holders 37,640 5 35,682 5
Printing 22,450 3 14,492 2
Shipping charges 18,672 3 21,790 3
Jars 4,175 1 8,900 1
Others (1,920 ) 0 42,738 6
Total revenues $ 739,342 100 $ 758,572 100 Revenue from sales of items sold by the Company
for the six months ended June 30, 2022, and June 30, 2021, and the percentage of sales allocable to each item to the Company’s total
revenues were as follows:
Six Months Ended June 30,
2022 2021
Revenues % Revenues %
Lighters $ 444,347 27 $ 211,859 8
Medtainers 410,896 25 498,745 19
GrowPods and related products 399,650 24 1,470,000 56
Humidity pack inserts 173,418 10 237,663 9
Plastic lighter holders 78,198 5 65,368 2
Printing 55,547 3 23,980 1
Others 49,003 3 67,242 3
Shipping charges 42,556 3 39,633 2
Jars 11,875 1 17,040 1
Total revenues $ 1,665,490 100 $ 2,631,530 100 The table below presents the customer deposits
payable balance and the significant activity affecting customer deposits during the period ended June 30, 2022:
Schedule of customer deposits
Balance at December 31, 2021 $ 361,230
New customer deposits received 591,101
Revenue recognized from customer deposits (464,995 )
Balance at June 30, 2022 $ 487,336 Share-Based Payments ASC 718, Compensation – Stock Compensation Fair Value Measurements The Company has adopted ASC Topic 820, Fair
Value Measurements, The estimated fair value of certain financial
instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, is carried on a historical
cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of the Company’s
short- and long-term credit obligations approximate fair value because the effective yields on these obligations, which include contractual
interest rates taken together with other features, such as concurrent issuances of warrants and/or embedded conversion options, are comparable
to rates of returns for instruments of similar credit risk. ASC Topic 820 defines fair value as the exchange
price that would be received for 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 on the measurement date. ASC Topic 820 also establishes
a fair-value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs
when measuring fair value. ASC Topic 820 describes three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices in active markets for identical
assets or liabilities. Level 2 - Quoted prices for similar assets and liabilities
in active markets or inputs that are observable. Level 3 - Inputs that are unobservable (for example, cash
flow modeling inputs based on assumptions). Advertising Advertising and marketing expenses are charged
to operations as incurred. These expenses totaled $ 77,991 32,431 Income Taxes The Company uses the asset and liability method
of accounting for income taxes in accordance with ASC Topic 740, Income Taxes ASC Topic 740-10-30 clarifies accounting for uncertainty
in income taxes recognized in an entity’s financial statements and prescribes a recognition threshold and measurement attribute
for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-40
provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.
The Company has no material uncertain tax positions. Concentration of Credit Risk Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts in financial institutions, which at times may exceed the federal
deposit insurance coverage of $250,000. The Company has not experienced losses on these accounts and believes that it is not exposed to
significant risks on such accounts. The Company has not experienced losses on accounts receivable and the Company believes that it is
not exposed to significant risks with respect to them. Loss per Share The basic loss per share is calculated by dividing
the Company’s net loss attributable to common stockholders by the weighted average number of common shares outstanding during the
year. The diluted loss per share is calculated by dividing the Company’s net loss attributable to common stockholders by the diluted
weighted average number of shares outstanding during the year. The potentially dilutive stock options on the Company’s common stock
were not considered in the computation of diluted net loss per share as they would be anti-dilutive. No Recent Accounting Pronouncements The Company follows ASU 2016-02, Leases (Topic
842) 9,791 In August 2020, FASB issued ASU 2020-06, “ Debt—Debt
with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic
815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. In December 2019, FASB issued ASU 2019-12, Income
Taxes, In June 2016, FASB issued ASU 2016-13 regarding
ASC Topic 326, “ Measurement of Credit Losses on Financial Instruments The Company does not believe there are any other
recently issued, but not yet effective, accounting standards that would have a significant impact on the Company’s financial position
or results of operations. |
