| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis
of Presentation The
accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany
transactions and balances have been eliminated in consolidation. These consolidated financial statements have been prepared on the accrual
basis of accounting and in accordance with generally accepted accounting principles (“GAAP”) in the United States. 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 receivable, 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 March 31, 2023 and
December 31, 2022, the allowance was $ 143,906 145,579 Revenue
Recognition The
Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers Revenue
and costs of sales are recognized when control of the products transfers to our customer, which generally occurs upon shipment from our
facilities. The Company’s performance obligations are satisfied at that time. The Company does not have any significant contracts
with customers requiring performance beyond delivery, and contracts with customers contain no incentives or discounts that could cause
revenue to be allocated or adjusted over time. Shipping and handling activities are performed before the customer obtains control of
the goods and therefore represent a fulfillment activity rather than a promised service to the customer. All
of the Company’s products are offered for sale as finished goods only, and there are no performance obligations required post-shipment
for customers to derive the expected value from them. The
Company does not allow for returns, except for damaged products when the damage occurred pre-fulfillment. 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. Sales
are made to customers under terms allowing certain limited rights of return. The Company records an allowance for returns for each quarter
for 3 36,400 35,100 The
following table presents our net revenues, by revenue source, and the period-over-period percentage change, for the period presented: SCHEDULE
OF NET REVENUES BY REVENUE
Three Months Ended 31,
2023 2022
Revenue Source Revenue Revenue % Change
Distributors $ 221,746 $ 189,952 17 %
Amazon 13,063 35,524 (63 )%
Online Sales 5,236 10,971 (52 )%
Retail 1,070,283 791,402 35 %
Shipping 969 2,382 (59 )%
Sales Returns and Allowances (36,400 ) (35,100 ) 4 %
Net Revenues $ 1,274,897 $ 995,131 28 % The
following table presents our net revenues by product lines for the period presented:
Three Months Ended 31,
2023 2022
Product Line Revenue Revenue % Change
Energy Drinks $ 9,624 $ 62,892 (85 )%
CBD Energy Waters 1,867 14,472 (87 )%
Lemonade Drinks 228,554 159,018 44 %
Apparel - 65 (100 )%
Retail 1,070,283 791,402 35 %
Shipping 969 2,382 (59 )%
Sales returns and allowance (36,400 ) (35,100 ) 4 %
Net Revenues $ 1,274,897 $ 995,131 28 % Advertising
Costs Advertising
costs are expensed as incurred and are included in selling and marketing expense. Advertising costs aggregated $ 18,966 52,519 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. 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 three months ending March 31, 2023 and 2022, 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 POTENTIAL DILUTIVE SECURITIES
March 31, 2023 March 31, 2022
Warrants 347,169,154 170,000,000
Common stock equivalent of Series B Convertible Preferred Stock 488,000 488,000
Common stock equivalent of Series C Convertible Preferred Stock 1,000 -
Common stock equivalent of Series D Convertible Preferred Stock 500,000,000 -
Common stock issuable 169,998,860 500,000,000
Restricted common stock 9,600,000 170,000,000
Common stock on convertible debentures and accrued interest 449,794,074 856,123,077
Total 1,477,051,088 1,696,611,077
Anti-dilutive shares 1,477,051,088 1,696,611,077 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. The
carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, short-term bank loans,
accounts payable, notes payable and other payables, approximate their fair values because of the short maturity of these instruments.
The carrying values of capital lease obligations and long-term financing obligations approximate their fair values because interest rates
on these obligations are based on prevailing market interest rates. Segments During
the 2022 fiscal year, the Company consolidated and restructured its operations. The Company now operates in one Concentrations The
Company’s cash balances on deposit with banks are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $ 250,000 Gross
sales. 10 10 Accounts
receivable. 25 18 11 11 10 27 20 Co-Packers.
Purchases
from vendors. 68 34 Accounts
payable. 10 27 21 10 31 18 Recent
Accounting Pronouncements In
June 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. |
