| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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. ILA Fund includes cash
as its only assets with minimal expenses as of June 30, 2022. 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 June 30, 2022.
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 ENTITY
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 %
Plaza Bajamar LLC Wyoming 100 %
Plaza Valle Divino, LLC Wyoming 100 % 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. As of June 30, 2022, management believes the carrying value of its equity method investments were recoverable
in all material respects. 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 asset 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 June 30, 2022, and December 31, 2021, respectively. Fair
Value of Financial Instruments and Fair Value Measurements Accounting
Standards Codification (“ASC”) 820 Fair Value Measurements and Disclosures, Level
1 Level
1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level
2 Level
2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability
such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets
with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are
observable or can be derived principally from, or corroborated by, observable market data. If the asset or liability has a specified
(contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level
3 Level
3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement
of the fair value of the assets or liabilities. 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 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. 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. 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 Real Estate - General 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 the 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 Revenue
Recognition Under
ASC Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that
reflects the consideration we expect to be entitled to in exchange for those goods or services. The guidance sets forth a five-step revenue
recognition model. The underlying principle of the standard is that a business or other organization will recognize revenue to depict
the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods
or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed
completely in the prior accounting guidance. The
Company determines revenue recognition through the following steps:
■ Identification
of the agreement or agreements with a buyer and/or investor.
■ Identification
of the performance obligations in the agreement(s) for the sale of plots including the delivering title to the property being acquired
from ILA.
■ Determination
of the transaction price.
■ Allocation
of the transaction price to the plots purchased when issued with equity or warrants to purchase equity in the Company; and
■ Recognition
of revenue when, or as, we satisfy a performance obligation such as the transfer of control of the plots. 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 the execution of terms and conditions contracts with third parties and investors. These contracts define each party’s
rights, payment terms and other contractual terms and conditions of the sale. Consideration was historically paid prior to transfer of
title as stated above and in future land sales, the Company plans to transfer title to buyers at the time consideration has been transferred
if the acquisition of the property has been completed by the Company. The Company applies judgment in determining the customer’s
ability and intention to pay; however, collection risk is mitigated through collecting payment in advance or through escrow arrangements.
A performance obligation is a promise in a contract or agreement to transfer a distinct product or item to the customer, which for us
is transfer of title to our buyers. 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. We have concluded that the existing contracts only have
one single performance obligation identified as the transfer of control of the property to the buyer, since the delivery of the title
is merely seen as a protective right. Currently, upon execution of each contract, 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. The Company
has recognized $ 15,000 30,000 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 to which we will expect
to receive in exchange for transferring title to the customer. The
Company recognizes revenue when it satisfies a performance obligation in a contract by transferring control over property to a customer.
The Company’s principal activities in the real estate development industry which it generates its revenues is the sale of developed
and undeveloped land. Advertising
costs The
Company expenses advertising costs when incurred. Advertising costs incurred amounted to $ 802,683 39,200 Debt
issuance costs and debt discounts Debt
issuance costs and debt discounts are being amortized over the lives of the related financings on a basis that 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. 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 requires approval by the Company’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 shareholders’ approval will be “non-qualified”. Pursuant to the 2019 Plan, the Company
has reserved a total of 3,000,000 2,150,000 On
August 26, 2020, the Company’s Board of Directors approved the 2020 Equity Plan (the “2020 Plan”). The Company has
reserved a total of 3,000,000 1,700,000 Income
Taxes The
Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes 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. Loss
Per Share The
Company computes loss per share in accordance with ASC 260 – Earnings per Share Securities
that are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been antidilutive
are: SCHEDULE
OF POTENTIALLY DILUTIVE SHARES
For the six months ended June 30, 2022 For the six months ended June 30, 2021
Options 3,850,000 2,900,000
Warrants 3,867,500 200,000
Total potentially dilutive shares 7,717,500 3,100,000 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 June 30, 2022. Reclassification Certain
reclassifications have been made to prior year’s data to confirm to the current year’s presentation. Such reclassifications
had no impact on the Company’s financial condition, operating results, cash flows or stockholders’ deficit. Recent
Accounting Pronouncements Not
Yet Adopted Accounting Standards: In
March of 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815), Fair Value Hedging - Portfolio Layer Method. The amendments
in this Update amend the guidance in ASU 2017-12 relating to the “last-of-layer” method and rename the method as the “portfolio
layer” method. It expands the scope of existing guidance so that entities can apply the portfolio layer method to portfolios of
all financial assets, including both prepayable and non-prepayable financial assets. Additionally, the standard expands the current model
to explicitly allow entities to designate multiple layers in a single portfolio as individual hedged items. This allows a larger portion
of the interest rate risk associated with such a portfolio to be hedged. The Update is effective for fiscal years beginning after December
15, 2022, with early adoption permitted in any interim period after its issuance. The Company has not yet adopted this Update. In
June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on
Financial Instruments. Financial Instruments
– Credit Losses, Derivatives and Hedging, and Leases Adopted
Accounting Standards: In
August 2020, the FASB issued ASU No. 2020-06 (“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.” ASU 2020-06 simplifies the accounting for convertible instruments by reducing the
number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results
in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments
that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related
to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting
and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. In addition,
ASU 2020-06 amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based
accounting conclusions. The amendments also affect the diluted EPS calculation for instruments that may be settled in cash or shares
and for convertible instruments. The amendments are effective for public entities excluding smaller reporting companies for fiscal years
beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective
for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted,
but no earlier than fiscal years beginning after December 15, 2020, including interim periods. The Company adopted the new standard on
January 1, 2022, which did not result in a material impact on the Company’s consolidated results of operations, financial position,
and cash flows. In
February 2016, the FASB issued ASU 2016-02 (Topic 842), Leases, and issued subsequent amendments to the initial guidance or implementation
guidance including ASU 2017-13, 2018-01, 2018-10, 2018-11, 2018-20 and 2019-01 (collectively, including ASU 2016-02, “ASC 842”),
which supersedes the guidance in topic ASC 840, Leases. The new standard requires lessees to classify leases as either finance or operating
based on whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether related
expenses are recognized based on the effective interest method or on a straight-line basis over the term of the lease. For any leases
with a term of greater than 12 months, ASU 2016-02 requires lessees to recognize a lease liability for the obligation to make the lease
payments arising from a lease, and a right-of-use asset for the right to use the underlying asset for the lease term. An election can
be made to account for leases with a term of 12 months or less similar to existing guidance for operating leases under ASC 840. The
new standard will also require new disclosures, including qualitative and quantitative requirements, providing additional information
about the amounts recorded in the financial statements. For emerging growth companies such as the Company, ASU No. 2016-02 is effective
for financial statements issued for fiscal years beginning after December 15, 2021. Early adoption is permitted. The
new standard will also require new disclosures, including qualitative and quantitative requirements, providing additional information
about the amounts recorded in the financial statements. For public companies, the new standard is effective for interim and annual reporting
periods beginning after December 15, 2018. The Company adopted the new standard on January 1, 2022, which did not result in a material
impact on the Company’s consolidated results of operations, financial position, and cash flows, as the Company has no material
leases. In
June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on
Financial Instruments. Financial Instruments
– Credit Losses, Derivatives and Hedging, and Leases There
were no other new accounting standards that had a material impact on the Company’s consolidated financial statements during the
six-month period ended June 30, 2022, and there were no other new accounting standards or pronouncements that were issued but not yet
effective as of June 20, 2022, that the Company expects to have a material impact on its consolidated financial statements. |
