| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accompanying condensed consolidated financial
statements of Two Hands Corporation have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange
Commission requirements for interim financial statements. Therefore, they do not include all of the information and footnotes required
by accounting principles generally accepted in the United States for complete financial statements. The financial statements should be
read in conjunction with the annual financial statements for the year ended December 31, 2022 of Two Hands Corporation in our Form 10-K
filed on April 3, 2023. The interim financial statements present the balance
sheets, statements of operations, stockholders’ deficit and cash flows of Two Hands Corporation. The financial statements have been
prepared in accordance with accounting principles generally accepted in the United States. The interim financial information is unaudited. In
the opinion of management, all adjustments necessary to present fairly the financial position as of September 30, 2023 and the results
of operations and cash flows presented herein have been included in the financial statements. All such adjustments are of a normal and
recurring nature. Interim results are not necessarily indicative of results of operations for the full year. GOING CONCERN The Company's financial statements are prepared in
accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and
the liquidation of liabilities in the normal course of business. During the nine months ended September 30, 2023, the Company incurred
a net loss of $ 1,600,399 372,464 2,312,962 85,522,915 PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the
accounts of the Company and its wholly owned subsidiary, Two Hands Canada Corporation. All intercompany transactions and balances have
been eliminated in consolidation. USE OF ESTIMATES AND ASSUMPTIONS Preparation of the financial statements in
conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. CONCENTRATIONS The following table summarizes accounts receivable
and revenue concentrations:
Schedule of concentration of risk, by risk factor
Accounts receivable at September 30, 2023 Revenue for the nine months ended September 30, 2023
Customer #1 12 % —
Total concentration 12 % -- The following table summarizes accounts payable and
purchases concentrations:
Accounts payable at September 30, 2023 Purchases for the nine months ended September 30, 2023
Supplier #1 13 % —
Supplier #2 13 % 22 %
Supplier #3 11 % —
Supplier #4 — 18 %
Supplier #5 — 12 %
Total concentration 37 % 52 % CASH AND CASH EQUIVALENTS For the purposes of the statement of cash flows,
the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. ACCOUNTS RECEIVABLE Trade accounts receivable are recorded at the invoiced
amount and do not bear interest. Accounts receivable are reduced by an allowance for doubtful accounts, which is the Company’s best
estimate of the amount of credit losses inherent in its existing accounts receivable. In establishing the required allowance, management
considers historical losses adjusted to take into account current market conditions and customers’ financial condition, the amount
of receivables in dispute, and the current receivables aging and current payment patterns. The Company writes off accounts receivable
against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts at September 30,
2023 and December 31, 2022 is $ 101,652 156,693 INVENTORY Inventory consisting of groceries and dry goods are measured at
the lower of cost and net realizable value. Cost is determined pursuant to the first-in first out (“FIFO”) method. The cost
of inventory includes the purchase price, shipping and handling costs incurred to bring the inventories to their present location and
condition. Inventory with a short shelf life that is not utilized within the planned period are immediately expensed in the statement
of operations. Estimated gross profit rates are used to determine the cost of goods sold in the interim periods. Any significant adjustment
that results from the reconciliation with annual physical inventory is disclosed. At September 30, 2023 and December 31, 2022, the inventory
valuation allowance was $ 0 PROPERTY AND EQUIPMENT Property and equipment is stated at cost, less accumulated
depreciation and amortization. Expenditures for maintenance and repairs are charged to expense when incurred, while renewals and betterments
that materially extend the life of an asset are capitalized. The costs of assets sold, retired, or otherwise disposed
of, and the related allowance for depreciation, are eliminated from the accounts, and any resulting gain or loss is recognized in the
results from operations. Depreciation is provided over the estimated useful lives of the assets, which are as follows: Computer equipment 50 In the year of acquisition, one half the normal rate
of depreciation is provided. REVENUE RECOGNITION In accordance with ASC 606, revenue is recognized
when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we
expect to be entitled to receive in exchange for these goods or services. The provisions of ASC 606 include a five-step process by which
we determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which
we expect to be entitled in exchange for those goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract
with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction
price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation. We
recognize revenue for the sale of our products upon delivery to a customer. During the nine months ended September 30, 2023 and
2022, the Company had revenue of $ 585,222 562,513 28,715 556,507 130,990 431,523 LEASES Under ASC 842, a right-of-use asset and lease liability
is recorded for all leases and the statement of operations reflects the lease expense for operating leases and amortization/interest expense
for financing leases. The Company does not apply the recognition requirements
in the standard to a lease that at commencement date has a lease term of twelve months or less and does not contain a purchase option
that it is reasonably certain to exercise and to not separate lease and related non-lease components. Options to extend the leases are
not included in the minimum lease terms unless they are reasonably certain to be exercised. The Company leases an automobile under a non-cancelable
operating lease. Right-of-use assets represent the right to use an underlying asset for the lease term, and lease liabilities represent
the obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement
date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit
rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present
value of lease payments. DEBT DISCOUNT AND DEBT ISSUANCE COSTS Debt discounts and debt issuance costs incurred in
connection with the issuance of convertible notes are capitalized and amortized to interest expense based on the related debt agreements
using the effective interest rate method. Unamortized discounts are netted against convertible notes. INCOME TAXES The Company accounts for income taxes in accordance
with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("FASB ASC") 740, Income Taxes.
Under the assets and liability method of FASB ASC 740, deferred tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled. The Company provides a valuation allowance, if necessary, to reduce deferred tax
assets to their estimated realizable value. NET LOSS PER SHARE Basic net income (loss) per share includes no dilution
and is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding
for the period. Diluted earnings per share is computed by dividing earnings available to common shareholders by the weighted average number
of common shares outstanding for the period increased to include the number of additional common shares that would have been outstanding
if potentially dilutive securities had been issued Dilutive net loss per share for common stock is calculated utilizing the if-converted
method which assumes the conversion of all Series C Stock to common stock. On September 30, 2023 and December 31, 2022, we excluded the
common stock issuable upon conversion of non-redeemable convertible notes, convertible notes, Series A Stock, Series B Stock and common
stock to be issued of 5,039,499,100 5,248,242,000 FOREIGN CURRENCY TRANSLATION The consolidated financial statements are presented
in United States dollars. The functional currency of the consolidated entities are determined by evaluating the economic environment of
each entity. The functional currency of Two Hands Corporation is the United States dollar. Foreign exchange translation adjustments are
reported as gains or losses resulting from foreign currency transactions and are included in the results of operations. Effective October 1, 2021, the Company changed the
functional currency of its Company’s Canadian subsidiary, Two Hands Canada Corporation, to the Canadian dollar from United States
dollar. The change in functional currency is due to the increase of Canadian dollar dominated activities over time including sales, operating
costs and share subscriptions. The change in functional currency is accounted for prospectively. Two Hands Canada Corporation maintains
its accounts in the Canadian dollar. Assets and liabilities are translated to United States dollars at year-end exchange rates.
Income and expenses are transaction at averages exchange rate during the year. Foreign currency transaction adjustments are reported as
other comprehensive income, a component of equity in the consolidated balance sheet. STOCK-BASED COMPENSATION The Company accounts for stock incentive awards issued
to employees and non-employees in accordance with FASB ASC 718, Stock Compensation. Accordingly, stock-based compensation is measured
at the grant date, based on the fair value of the award. Stock-based awards to employees are recognized as an expense over the requisite
service period, or upon the occurrence of certain vesting events. Additionally, stock-based awards to non-employees are expensed over
the period in which the related services are rendered. FAIR VALUE OF FINANCIAL INSTRUMENTS ASC Topic 820 defines fair value, establishes a framework
for measuring fair value, and expands disclosures about fair value measurements. Included in the ASC Topic 820 framework is a three
level valuation inputs hierarchy with Level 1 being inputs and transactions that can be effectively fully observed by market participants
spanning to Level 3 where estimates are unobservable by market participants outside of the Company and must be estimated using assumptions
developed by the Company. The Company discloses the lowest level input significant to each category of asset or liability valued within
the scope of ASC Topic 820 and the valuation method as exchange, income or use. The Company uses inputs which are as observable as possible
and the methods most applicable to the specific situation of each company or valued item. The Company’s financial instruments such as
cash, accounts payable and accrued liabilities, non-redeemable convertible notes, notes payable and due to related parties are reported
at cost, which approximates fair value due to the short-term nature of these financial instruments. RECENT ACCOUNTING PRONOUNCEMENTS In August 2020, the 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). Other recent accounting pronouncements issued by the
FASB, including 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 consolidated financial
statements. |
