| Significant Accounting Policies | 2.
Significant Accounting Policies Use
of Estimates The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ
from those estimates. Those estimates and assumptions include estimates for reserves of uncollectible accounts receivables, assumptions
used in valuing inventories at net realizable value, impairment testing of recorded long-term tangible and intangible assets, the valuation
allowance for deferred tax assets, accruals for potential liabilities, assumptions made in valuing stock instruments issued for services,
and assumptions used in valuing warrant liabilities, and assumptions used in the determination of the Company’s liquidity. Accounts
Receivable Accounts
receivable are generally recorded at the invoiced amounts net of an allowance for expected losses. The Company evaluates the collectability
of its trade accounts receivable based on a number of factors. In circumstances where the Company becomes aware of a specific customer’s
inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded, which reduces
the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer
identification of potential bad debts, bad debt charges are recorded based on the Company’s historical losses and an overall assessment
of past due trade accounts receivable outstanding. The
allowance for accounts receivable is established through a provision reducing the carrying value of receivables. At December 31, 2022,
and 2021, the allowance was $ 252 215 Inventory Inventory
is stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (“FIFO”) basis. We
regularly review our inventory quantities on hand and record a provision for excess and obsolete inventory based primarily on our estimated
forecast of product demand and our ability to sell the product(s) concerned. Demand for our products can fluctuate significantly. Factors
that could affect demand for our products include unanticipated changes in consumer preferences, general market conditions or other factors,
which may result in cancellations of advance orders or a reduction in the rate of reorders placed by customers. Additionally, our management’s
estimates of future product demand may be inaccurate, which could result in an understated or overstated provision required for excess
and obsolete inventory. At December 31, 2022, and 2021, inventory has been reduced by cumulative write-downs for inventory aggregating
$ 479 135 Property
and Equipment Property
and equipment are stated at cost. Expenditures for major renewals and improvements that extend the useful lives of property and equipment
or increase production capacity are capitalized, and expenditures for repairs and maintenance are charged to expense as incurred. Depreciation
is calculated using accelerated and straight-line methods over the estimated useful lives of the assets as follows: Schedule of Estimated Useful Lives of Property and Equipment and Related Depreciation
Property
and Equipment Type Years
of Depreciation
Computer
hardware and software 3 7
Machinery
and equipment 5 Management
assesses the carrying value of property and equipment whenever events or changes in circumstances indicate that the carrying value may
not be recoverable. If there is an indication of impairment, management prepares an estimate of future cash flows expected to result from
the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment
loss is recognized to write down the asset to its estimated fair value. For the years ended December 31, 2022 and 2021, the Company determined
there were no Intangible
Assets Intangible
assets are comprised of indefinite-lived brand names acquired, so classified because we anticipate that these brand names will contribute
cash flows to the Company perpetually. Indefinite-lived intangible assets are not amortized but are assessed for impairment annually,
or more frequently if events or circumstances indicate that assets might be impaired and evaluated annually to determine whether the
indefinite useful life is appropriate. As part of our impairment test, we first assess qualitative factors to determine whether it is
more likely than not the asset is impaired. If further testing is necessary, we compare the estimated fair value of our asset with its
book value. If the carrying amount of the asset exceeds its fair value, as determined by its discounted cash flows, an impairment loss
is recognized in an amount equal to that excess. For the years ended December 31, 2022 and 2021, the Company determined there was no Revenue
Recognition The
Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers The
Company does not allow for returns, except for damaged products when the damage occurred pre-fulfilment. Damaged product returns have
historically been insignificant. Because of this, the stand-alone nature of our products, and our assessment of performance obligations
and transaction pricing for our sales contracts, we do not currently maintain a contract asset or liability balance for obligations.
We assess our contracts and the reasonableness of our conclusions on a quarterly basis. Cost
of Goods Sold Cost
of goods sold is comprised of the costs of raw materials and packaging utilized in the manufacture of products, co-packing fees, repacking
fees, in-bound freight charges, as well as certain internal transfer costs. Additionally, cost of goods sold includes direct production
costs in excess of charges allocated to finished goods in production. Charges for labor and overhead allocated to finished goods are
determined on a market cost basis, which may be lower than the actual costs incurred. Plant costs in excess of production allocations
are expensed in the period incurred rather than added to the cost of finished goods produced. Expenses not related to the production
of our products are classified as operating expenses. Delivery
and Handling Expense Shipping
and handling costs are comprised of purchasing and receiving, inspection, warehousing, transfer freight, and other costs associated with
product distribution after manufacture and are included as part of operating expenses. Advertising
Costs Advertising
costs are expensed as incurred and are included in selling and marketing expense. Advertising costs aggregated $ 668 1,418 Stock
Compensation Expense The
Company periodically issues stock options and restricted stock awards to employees and non-employees in non-capital raising transactions
for services and for financing costs. The Company accounts for such grants issued and vesting based on ASC 718, Compensation-Stock
Compensation The
fair value of the Company’s stock options is estimated using the Black-Scholes-Merton Option Pricing model, which uses certain
assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock, and future
dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model and based
on actual experience. The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense
recorded in future periods. Income
Taxes The
Company uses an asset and liability approach for accounting and reporting for income taxes that allows recognition and measurement of
deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach,
deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets
if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility
is uncertain. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. Loss
per Common Share Basic
earnings (loss) per share is computed by dividing the net income (loss) applicable to common stockholders by the weighted average number
of shares of common stock outstanding during the year. Diluted earnings (loss) per share is computed by dividing the net income applicable
to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would
have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares
are excluded from the computation when their effect is antidilutive. For
the years ended December 31, 2022 and 2021, the calculations of basic and diluted loss per share are the same because potential dilutive
securities would have had an anti-dilutive effect. The potentially dilutive securities consisted of the following: Schedule of Potentially Dilutive Securities
December 31, 2022 December 31, 2021
Warrants 235,946 90,770
Common stock equivalent of Series A Convertible Preferred Stock 753 753
Convertible note payable 955,363 -
Unvested restricted common stock 1,460 2,223
Options 164,423 210,460
Total 1,357,945 304,206 The
Series A Convertible Preferred Stock is convertible into Common shares at the rate of 1:0.08 Fair
Value of Financial Instruments The
Company uses various inputs in determining the fair value of its financial assets and liabilities and measures these assets on a recurring
basis. Financial assets recorded at fair value are categorized by the level of subjectivity associated with the inputs used to measure
their fair value. Accounting Standards Codification Section 820 defines the following levels of subjectivity associated with the inputs: Level
1—Quoted prices in active markets for identical assets or liabilities. Level
2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level
3—Unobservable inputs based on the Company’s assumptions. T Segments The
Company operates in one Concentrations The
Company’s cash balances on deposit with banks are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $ 250 Gross
sales. 17 16 19 11 Accounts
receivable. 19 11 18 During
the years ended December 31, 2022, and 2021, the Company utilized six separate co-packers for most its production and bottling of beverage
products in the United States. The Company utilizes co-packers to produce 100 100 Purchases
from vendors. 12 13 10 Accounts
payable. 10 10 Recent
Accounting Pronouncements Recently
Adopted Accounting Pronouncements In
August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 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) (“ASU
2020-06”).” ASU 2020-06 reduces the number of accounting models for convertible debt instruments by eliminating the cash
conversion and beneficial conversion models. The diluted net income per share calculation for convertible instruments will require the
Company to use the if-converted method. For contracts in an entity’s own equity, the type of contracts primarily affected by this
update are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet
the settlement conditions of the derivative scope exception. This update simplifies the related settlement assessment by removing the
requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required
to be posted, and (iii) assess shareholder rights. ASU 2020-06 is effective January 1, 2024, for the Company and the provisions of this
update can be adopted using either the modified retrospective method or a fully retrospective method. Early adoption is permitted, but
no earlier than January 1, 2021, including interim periods within that year. Effective January 1, 2021, the Company early adopted ASU
2020-06 and that adoption did not have an impact on our financial statements and related disclosures. In
May 2021, the FASB issued ASU 2021-04 “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50),
Compensation— Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic
815- 40) Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options”
(“ASU 2021-04”). ASU 2021-04 provides guidance as to how an issuer should account for a modification of the terms or conditions
or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains equity classified after modification
or exchange as an exchange of the original instrument for a new instrument. An issuer should measure the effect of a modification or
exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately
before modification or exchange and then apply a recognition model that comprises four categories of transactions and the corresponding
accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance
and debt origination or modification). ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021,
including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications
or exchanges occurring on or after the effective date. The Company adopted ASU 2021-04 effective January 1, 2022. The adoption of ASU
2021-04 did not have any impact on the Company’s financial statement presentation or disclosures. Recently
Issued Accounting Pronouncements Not Yet Adopted In
September 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments Other
recent accounting pronouncements issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants,
and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s
present or future financial statements. |
