TEOF Teo Foods Inc (PK)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 For the quarterly period ended June 30, 2023

 

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

For the transition period from ____________ to ____________

 

Commission file number:  333-226801

 

TEO Foods Inc.

(Exact name of small business issuer as specified in its charter)

 

Nevada	47-1209532
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

 

Blvd. Insurgentes 19801 unit. 4B

Tijuana, BC. 22225

(Address of principal executive offices)

 

(619) 758-1973

(Registrants telephone number, including area code)

_____________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     ☒  Yes   ☐ No

Securities registered pursuant to Section 12(b) of the Act: None.

 

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).       ☒  Yes   ☐ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company; See the definitions of “large accelerated filer”, “accelerated filer”, “non-accelerated filer”, “smaller reporting company” or “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

☐

large accelerated filer

☐

accelerated filer

☐

Non-accelerated filer

☒

smaller reporting company

☐

emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to extend the transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ☐  Yes   ☒ No

 

As of August 21, 2023, there were 13,071,957 shares of the registrant’s common stock outstanding.

 

 

 

Contents

 

		Page
		Number
PART I	FINANCIAL INFORMATION	3
Item 1	Interim Consolidated Financial Statements June 30, 2023	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations and Comprehensive (Loss) Income	4
	Consolidated Statements of Cash Flows	5
	Consolidated Statements of Stockholders’ Deficit	6
	Notes to the Interim Consolidated Financial Statements	7-14
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	15-18
Item 3	Quantitative and Qualitative Disclosures About Market Risk	18
Item 4	Controls and Procedures	19
PART II	OTHER INFORMATION	20
Item 1	Legal Proceedings	20
Item1A	Risk Factors	20
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3	Defaults Upon Senior Securities	20
Item 4	Mine Safety Disclosures	20
Item 5	Other Information	20
Item 6	Exhibits	20
SIGNATURES		21

 

 

 

PART I - FINANCIAL INFORMATION

 

Item 1 - Interim Consolidated Financial Statements June 30, 2023

 

TEO Foods, Inc.

CONSOLIDATED BALANCE SHEETS

 

		March 31, 2023				December 31, 2022
			(Unaudited)
Assets
Current assets
Cash and cash equivalents		$	2,483			$	657
Accounts receivable, net			14,829				25,924
Inventories, net			—				—
Taxes receivable, net			40,386				37,563
Prepaid and other assets			13,302				13,303
Total current assets			71,000				77,447
Property and equipment, net			25,067				30,278
Total assets		$	96,067			$	107,725
Liabilities and stockholders' (deficit)
Current liabilities
Accounts payable and accrued expenses		$	450,447			$	370,072
Related party advances			188,205				130,100
License fee payable - related party			629,833				629,833
Notes payable			100,000				100,000
Convertible note payable			345,500				345,500
Total current liabilities			1,713,985				1,575,505
Total liabilities			1,713,985				1,575,505
Commitments and contingencies (Note 14)			—				—
Stockholders' deficit
Preferred stock, $0.001 par value, 10,000,000 shares authorized, 9,022,900 shares issued and outstanding			9,023				9,023
Common stock, $0.001 par value, 490,000,000 shares authorized, 13,071,957 and 13,071,957 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively			13,072				13,072
Additional paid-in capital			1,176,635				1,176,635
Accumulated deficit			(2,826,523	)			(2,661,744	)
Other comprehensive income (loss)			9,875				(4,766	)
Total stockholders' deficit			(1,617,918	)			(1,467,780	)
Total liabilities and stockholders' deficit		$	96,067			$	107,725

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

TEO Foods, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2023				2022				2023				2022
Sales		$	36,021			$	10,519			$	69,286			$	10,519
Cost of sales			—				—				—				—
Gross profit			36,021				10,519				69,286				10,519
Operating expense
Payroll			—				7,440				—				16,816
General and administrative			11,080				4,426				19,915				12,207
Rent and lease			49,772				42,423				94,870				79,325
Professional fees			36,576				50,207				101,665				82,364
Depreciation			2,619				2,619				5,210				5,210
Total operating expenses			100,047				107,115				221,660				195,922
Operating loss			(64,026	)			(96,596	)			(152,374	)			(185,403	)
Other income (expense)
Licensing and royalty income			—				—				—				6,787
Loss on Royalty Agreement			—				(31,929				—				(31,929
Other income (expense)			4,007				2,413				7,086				1,946
Interest expense			(9,754	)			(9,495	)			(19,490	)			(18,846	)
Total other (loss) income			(5,747	)			(39,011				(12,404	)			(42,042	)
Net (loss) income before income taxes			(69,773	)			(135,607	)			(164,778	)			(227,445	)
Income tax expense			—				—				—				—
Net (loss) income			(69,773	)			(135,607	)			(164,778	)			(227,445	)
Other comprehensive (loss) income
Foreign currency transaction adjustment			11,949				3,044				9,875				(853
Comprehensive income (loss)		$	(57,825	)		$	(138,651	)		$	(154,903	)		$	(228,298	)
Earnings (loss) per common share -
Basic and diluted		$	(0.01	)		$	(0.01	)		$	(0.01	)		$	(0.02	)
Weighted average common
shares outstanding – basic and diluted			13,071,957				13,071,957				13,071,957				13,071,957

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

TEO Foods Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

		For the Six Months Ended June 30,
		2023				2022
Net loss		$	(164,779	)		$	(227,445	)
Adjustments to reconcile net loss to net Cash used in operations:
Depreciation expense			5,211				5,210
Loss on Royalty Agreement			—				31,929
Changes in operating assets and liabilities:
Accounts receivable			(11,095	)			(4,082	)
Licensing and royalty income receivable			—				6,097
Inventories			—				(41	)
Tax receivables			(2,823	)			(7468	)
Prepaid and other assets			—				43
Accounts payable and accrued expenses			80,375				100,177
Net cash (used) in operating activities			(70,921	)			(95,580	)
Cash flows from investing activities
Purchase of property and equipment			—				—
Net cash (used) in investing activities			—				—
Cash flows from financing activities
Proceeds from related party advances			58,105				64,400
Proceeds from issuance of promissory notes			—				6,000
Proceeds from issuance of common stock			—				20,000
Payment of deemed dividend to Teo Inc. for license			—				(1,300	)
Net cash provided by (used) in financing activities			58,105				89,100
Effect of foreign currency exchange translation			14,641				(853	)
Net change for period			1,825				(7,333	)
Cash and Cash Equivalents at beginning of period			657				7,555
Cash and Cash Equivalents at end of period		$	2,482			$	222
Supplement Information:
Cash paid for:
Interest		$	—			$	—
Income taxes		$	—			$	—

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

TEO Foods, Inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT (Unaudited)

 

		Preferred Stock								Common Stock								Additional Paid-in				Accumulated				Other Comprehensive
		Shares				Amount				Shares				Amount				Capital				Deficit				Income(loss)				Total
Three months ended June 30, 2022
Balance - December 31, 2021			9,022,900			$	9,023				12,971,957			$	12,972			$	1,156,735			$	(2,314,436	)		$	(197	)		$	(1,135,903	)
Stock issued for cash			—				—				100,000				100				19,900				—				—				20,000
Foreign currency translation adjustments			—				—				—				—				—				—				2,191				2,191
Net (loss) income			—				—				—				—				—				(91,838	)			—				(91,838	)
Balance March 31, 2022			9,022,900			$	9,023				13,071,957			$	13,072			$	1,176,635			$	(2,406,274	)		$	1,994			$	(1,205,550	)
Foreign currency translation adjustments			—				—				—				—				—				—				(3,044	)			(3,044	)
Net (loss) income			—				—				—				—				—				(135,607	)			—				(135,607	)
Balance June 30, 2022			9,022,900			$	9,023				13,071,957			$	13,072			$	1,176,635			$	(2,541,881	)		$	(1,050	)		$	(1,344,201	)
Three months ended June 30, 2023
Balance - December 31, 2022			9,022,900			$	9,023				13,071,957			$	13,072			$	1,176,635			$	(2,661,745	)		$	4,766			$	(1,467,780	)
Foreign currency translation adjustments			—				—				—				—				—				—				(2,074	)			(2,074	)
Net (loss) income			—				—				—				—				—				(95,005	)			—				(95,005	)
Balance March 31, 2023			9,022,900			$	9,023				13,071,957			$	13,072			$	1,176,635			$	(2,756,750	)		$	2,692			$	(1,564,859	)
Foreign currency translation adjustments			—				—				—				—				—				—				9,875				9,875
Net (loss) income			—				—				—				—				—				(164,799	)			—				(164,799	)
Balance June 30, 2023			9,022,900			$	9,023				13,071,957			$	13,072			$	1,176,635			$	(2,922,049	)		$	12,567			$	(1,617,918	)

 

 

 

  

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

TEO Foods Inc.

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

 

 

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

 

TEO Foods Inc. (“Company”) was incorporated in the state of Nevada on December 27, 2012.

 

The Company’s principal activity is to produce and sell food packaged products for retail sale in the frozen, refrigerated and shelf stable categories. The Company has a license to use the TEO name and logo on food products it sells and to apply the TEO pasteurization/sterilization processes to its products for improved shelf life and safety.

 

In January 2020, the Company created BCTEO Foods S.A. de C.V. (“BC TEO Foods”), a 100% owned subsidiary in Mexico. BCTEO Foods is the operating entity in Mexico and holds all facilities leases.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation and Consolidation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the Six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. Notes to the unaudited consolidated financial statements that would substantially duplicate the disclosure contained in the audited consolidated financial statements for the fiscal year ending December 31, 2023 have been omitted. The Company consolidates the financial statements of its wholly-owned subsidiaries and all intercompany transactions and account balances have been eliminated in consolidation.

 

All amounts referred to in the notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise.

 

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with a maturity date of three months or less, when purchased, to be cash equivalents.

 

Foreign Currency Translation

The Company subsidiary’s primary functional currency is the Mexican peso, but it’s reporting currency is the U.S. dollar. The balance sheet accounts are translated at exchange rates in effect at the end of the period and income statement accounts are translated at average exchange rates for the period. Translation gains and losses are included as a separate component of stockholders’ deficit.

 

 

7

 

 

 

Accounts Receivable

Accounts receivable are reported at the customers’ outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The allowance for doubtful accounts at June 30, 2023 and December 31, 2022 was $0.

 

Inventory and Cost of Sales

Inventories are stated at the lower of cost or realizable value, using the average cost method. When an impairment indicator suggests that the carrying amounts of inventories might not be recoverable, the Company reviews such carrying amounts and estimates the net realizable value based on the most reliable evidence available at that time. An impairment loss is recorded if the net realizable value is less than the carrying value. Impairment indicators considered for these purposes are, among others, obsolescence, decrease in market prices, damage and a firm commitment to sell.

 

Property and Equipment

Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs that do not improve or extend the lives of the respective assets are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income.

 

Impairment of Long-Lived and Intangible Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company uses market quotes, if available, or an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable. The Company did not recognize impairment on its long-lived assets during the periods ended March 31, 2023 or 2022. Identified intangible assets are reviewed for impairment at least annually, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company’s only intangible asset consists of the royalty agreement discussed in Note 7.

 

Convertible Debentures

The Company adopted the guidance in Accounting Standards Updated (“ASU”) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity on January 1, 2022. ASU 2020-06 simplifies an issuer’s accounting for convertible instruments and its application of the derivatives scope exception for contracts in its own equity. Additionally, ASU 2020-06 removes the requirements for accounting for beneficial conversion features. The Company adopted ASU 2020-06 utilizing the modified retrospective method, which resulted in an immaterial impact to the Company.

 

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” (“Topic 606”). Revenue is recognized when a customer obtains control of promised goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five-step model in order to determine this amount:

 

	i.	Identification of the promised goods in the contract;
	ii.	Determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract;

 

 

8

 

 

 

	iii.	Measurement of the transaction price, including the constraint of variable consideration;
	iv.	Allocation of the transaction price of the performance obligations; and
	v.	Recognition of revenue when (or as) the Company satisfies each performance obligation.

 

The Company only applies the five-step model to contracts when it is probable the entity will collect the consideration it is entitled to in exchange for the goods and services it transfers to the customer. Once a contract is determined to be within the scope of Topic 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligations when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time typically upon delivery. The Company primarily sells packaged food products to its customers. The Company’s performance obligation is satisfied when the goods have been delivered, which is at a point in time. The Company provides manufacturing services for packaged food and other products. The Company’s performance obligation is satisfied for services when the services are completed or the related products have been delivered, which is at a point in time. The Company receives revenue from a licensing and royalty agreement and the licensee incurs fees based on their sales to their customers, which occurs when the products are delivered. The Company’s performance obligation related to these agreements is satisfied at the point in time when the products are delivered.

 

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 disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

Fair Value of Financial Instruments

Fair value is defined as the price that would be received in the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has categorized all investments recorded at fair value based upon the level of judgment associated with the inputs used to measure their fair value.

 

Hierarchical levels, directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:

 

●

Level 1: Quoted prices in active markets for identical assets or liabilities that the organization has the ability to access at the reporting date.

 

●

Level 2: Inputs other than quoted prices included in Level 1, which are either observable or that can be derived from or corroborated by observable data as of the reporting date.

 

●

Level 3: Inputs include those that are significant to the fair value of the asset or liability and are generally less observable from objective resources and reflect the reporting entity's assumptions about the assumptions market participants would use in pricing the asset or liability.

The Company's financial instruments consist of advances from related party, notes payable, convertible notes payable and license fee payable. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of the respective instruments.

 

Loss Per Share of Common Stock

Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. The calculation of diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Securities with anti-dilutive effects on net earnings (loss) per share are excluded. As of June 30, 2023 and 2022, none of the convertible preferred shares or convertible debt were included in the calculation of diluted weighted average shares as they were anti-dilutive.

 

As of June 30, 2023 and 2022, preferred shares convertible to 90,229,000 common shares were included in the diluted weighted average shares; however, notes convertible into a maximum of 1,727,500 and 1,697,500 common shares were excluded from the calculation of loss per common share as the notes are anti-dilutive. As of June 30, 2023 and 2022, common shares outstanding totaled 13,071,957.

 

 

9

 

 

NOTE 3 – GOING CONCERN

 

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has suffered recurring losses from operations and has insufficient working capital as of June 30, 2023 to develop its business plan and meet its obligation of the next 12 months. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders, the Company's ability to obtain necessary equity or debt financing to continue operations, and ultimately the Company's ability to generate profit from sales of packaged food products. These consolidated financial statements do not include any adjustments to classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company plans to obtain funds for operations through continued financial support from its stockholders, debt and private offerings of its equity.

 

NOTE 4 – INVENTORY

 

Inventory consists of raw materials and finished goods located in the Company’s warehouse in Tijuana, Mexico. At June 30, 2023 and December 31, 2022, inventories were $0.

 

NOTE 5 – TAX RECEIVABLES

 

Tax receivables represent credits from the Mexican taxing authority. The Company’s Mexican subsidiaries have accumulated IVA tax payments that exceeded its IVA tax liabilities. The Company periodically applies for refunds of these accumulated overpayments. These overpayments are also available to the Company to offset future IVA liabilities. The tax receivable balance at June 30, 2023 and December 31, 2022 was $40,386 and $37,563, respectively.

 

 

10

 

 

 

NOTE 6 – PROPERTY AND EQUIPMENT

 

At June 30, 2023 and December 31, 2022, property and equipment consisted of the following:

Schedule of property and equipment
		June 30, 2023				December 31, 2022
Machinery and equipment		$	42,502			$	42,502
Transportation equipment			10,032				10,032
			52,534				52,534
Less accumulated depreciation			(27,466	)			(22,256	)
		$	25,068			$	30,278

 

Depreciation expense for the three months ended June 30, 2023 and 2022 was $2,619 and $2,591, respectively. The estimated useful lives of fixed assets is 5 years.

 

NOTE 7 – ROYALTY AND LICENSE AGREEMENT

 

On September 30, 2017, the Company entered into a Master Agreement with TEO Inc. ("TEO"). TEO is the founder and majority controlling shareholder of the Company. The Master Agreement provides the Company a license to use the TEO name and logo on food products it sells and to apply TEO's pasteurization/sterilization processes to its products for improved shelf life and safety. Additional provisions provide the Company production rights to TEO's pasteurizer/sterilizer and rights to lease its own system when certain sales/production increase. Pursuant to the master agreement, the Company agreed to pay an initial $1 million fee in installments with $100,000 due on June 30, 2018, $300,000 due on December 31, 2018 and the remaining $600,000 due in 12 equal monthly payments with the first payment due on January 31, 2019. TEO Inc. has agreed to maintain the license through December 31, 2023 and accrue and accept payments due as funds are available. TEO Inc. has agreed to extend the start date to January 1, 2024 of the use/royalty and service fee of 5.5% of the Company's gross revenue for food sales processed using TEO's intellectual property. The ongoing licensing is maintained by meeting minimum annual use/royalty and service fees. The Company may pay for the difference between the actual use and the minimum to maintain the license. The annual minimum is listed as follows:

Schedule of Royalty and License Agreements
Year			Minimum Service Fee
2024			$	500,000
2025				750,000
2026				1,000,000
Thereafter				Increase 10% per year

 

As a result of TEO being the majority shareholder of the Company and TEO's basis in the license being $0, the Company recorded a deemed dividend of $1 million for the initial fee payable to TEO. As of June 30, 2023 and December 31, 2022, the outstanding balance of the license fee payable was $629,833. For the six months ended June 30, 2023 and 2022, the Company made payments toward the license of $0 and $1,300, respectively.

 

Effective April 1, 2020, the Company entered into an agreement whereby it assigned half and licensed half of the Nerys Brand for cheese products in Mexico, along with certain production equipment and facilities that the Company did not intend to transfer to its new facility for production, to a third party. In exchange, the Company receives a portion of net revenue from all products sold, which includes bulk meats and other products, by the acquirer, a royalty on all NERYS cheese products sold in Mexico of $0.01 per pound and will also receive five percent of the proceeds of any sale of the related acquirer’s business.

 

The Company valued the royalty agreement at the book value of the assets transferred of $31,929, which approximates the fair value and is recorded as an intangible asset on the consolidated balance sheets as of December 31, 2021.

 

On June 7, 2022, the facility used by the licensee was destroyed in a fire. The licensee has informed the Company that its insurance will not pay the loss and as a result is closing all of its business operations. Pursuant to the agreement all rights to the NERYS cheese products sold in Mexico revert back to the Company and it is evaluating the economic viability of resuming fulfillment of the retail placements in Mexico.

 

As a result, during the year ended December 31, 2022, the Company has written off the value of the royalty agreement totaling $31,929, which is included within other income (expense) on the consolidated statements of operations and comprehensive loss.

 

In May 2022, the Company licensed the Nerys Brand for products sold outside Mexico to an international distributor of a variety of meat, fish, cheese and other food products throughout the USA, south and central America. In exchange it will receive a royalty on the NERYS branded products sold outside of Mexico and will be the supplier of these branded products.

 

11

 

 

NOTE 8 – NOTES PAYABLE

 

Notes Payable

On July 31, 2018, the Company issued a note for $100,000 in principal bearing interest at 8% maturing on October 31, 2018. This note was subsequently amended to extend the maturity date to December 31, 2022. As of June 30, 2023, and December 31, 2022, the outstanding principal balance of the note was $100,000.

 

Convertible Note Payable

 

On June 28, 2018, the Company issued a note for $100,000. The note bears an 8% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. The maturity date of the note is December 31, 2023.

 

On February 4, 2019, the Company issued a note for $120,000. The note can be converted to common stock at $0.20 per share or the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share and converts automatically upon certain conditions. The note bears no interest until September 30, 2019 and then bears 8% interest, if not converted to common stock. This note was subsequently amended to extend the maturity date to December 31, 2023. On December 20, 2020, the holder converted $27,500 in principal of this note to 137,500 common shares at $0.20 per share.

 

On May 5, 2021, the Company issued a note for $25,000. The note bears an 8% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to December 31, 2023.

 

On June 1, 2021, the Company issued a note for $20,000. The note bears an 8% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to December 31, 2023. On December 20, 2021, the holder converted $10,000 in principal of this note to 50,000 common shares at $0.20 per share.

 

On June 2, 2021, the Company issued a note for $17,000. The note bears an 8% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to December 31, 2023.

 

On July 12, 2021, the Company issued a note for $40,000. The note bears an 8% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to December 31, 2023.

 

On September 29, 2021, the Company issued a note for $15,000. The note bears an 8% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to December 31, 2023.

 

On November 24, 2021, the Company issued a note for $40,000. The note bears an 8% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to December 31, 2023.

 

On April 14, 2022, the Company issued a note for $6,000. The note bears an 8% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to December 31, 2023.

 

The principal balance of convertible debt at June 30, 2023 and December 31, 2022 amounted to $345,500.

 

 

12

 

 

NOTE 9 – EQUITY

 

Preferred Stock

 

Each share of Class A Preferred Stock may be converted by the holder upon request of the holder into 10 shares of common stock. Each holder is entitled to 100 votes for each share of Class A Preferred Stock held on the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company (and written actions of stockholders in lieu of meetings) with respect to any and all matters presented to the stockholders of the Company for their action or consideration. The holders are entitled to dividends, if any, as declared by the Company and participate pari passu with the common stock of the Company at the conversion rate.

 

NOTE 11 - INCOME TAXES

 

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The U.S. federal income tax rate is 21%.

 

The provision for Federal income tax consists of the following June 30, 2023 and 2022:

Schedule of provision for income tax
Federal income tax (expense) benefit attributable to:		June 30, 2023				June 30, 2022
Current Operations		$	31,998			$	48,357
Less: valuation allowance			(31,998	)			(48,357	)
Net provision for Federal income taxes		$	—			$	—

 

The cumulative tax effect at the expected rate of 21% of significant items comprising our net deferred tax amount is as follows:

 

Schedule of deferred tax asset
Deferred tax asset attributable to:		June 30, 2023				December 31, 2022
Net operating loss carryover		$	152,374			$	313,455
Less: valuation allowance			(152,374	)			(313,455	)
Net deferred tax asset		$	—			$	—

 

At June 30, 2023, the Company had net operating loss carry forwards of approximately $1,528,000 that may be offset against future taxable income. No tax benefit has been reported in the June 30, 2023 or December 31, 2022 consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

 

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.

 

ASC 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company’s financial statements. ASC 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than- not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

 

The Company includes interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in the provision for income taxes. As of June 30, 2023 and 2022, the Company had no accrued interest or penalties related to uncertain tax positions.

 

 

13

 

 

 

NOTE 11 - RELATED PARTY TRANSACTIONS

 

The Company has various related party receivables and payables derived from normal operating activities. These balances are non-interest bearing and are periodically settled as cash flow permits. These payables may include accrued compensation to officers. Accrued fees for services owed to the CEO as of June 30, 2023 and December 31, 2022 was $257,600 and $211,100, respectively, and are included within accounts payable and accrued expenses on the consolidated balance sheets. Cash advances made by the CEO as of June 30, 2023 and December 31, 2022 was $188,204 and $130,100, respectively.

 

Master License Agreement

 

On September 30, 2017, the Company entered into a Master Agreement with TEO, the founder and majority controlling shareholder of the Company. See Note 7.

 

NOTE 12 – COMMITMENTS AND CONTINGENCIES

 

During the normal course of business, the Company may be exposed to litigation. When the Company becomes aware of potential litigation, it evaluates the merits of the case in accordance with Financial Accounting Standards Board Accounting Standards Codification “FASB ASC” 450-20-50, Contingencies. The Company evaluates its exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If the Company determines that an unfavorable outcome is probable and can be reasonably estimated, it establishes the necessary accruals. As of March 31, 2023 and December 31, 2022, the Company is not aware of any contingent liabilities that should be reflected in the financial statements.

 

At March 31, 2023, the Company had three leases on commercial units that are contiguous in the same building located in Tijuana Mexico and comprising approximately 38,000 square feet total. The leases are 12 month leases with option to renew for additional 12 month periods. The total rents are approximately $16,000 per month gross with no additional common fees or other charges. The Company paid a total of $94,870 and $79,325 during the six month period ended June 31, 2023 and 2022, respectively, related to the leases of commercial units in Tijuana. The leases are short term in nature as the Company is not certain to renew the leases.

 

NOTE 13 – CONCENTRATIONS

 

Cash Deposit

 

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At June 30, 2023 and December 31, 2022, no cash balances exceeded the federally insured limit.

 

NOTE 14 - SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events for recognition and disclosure through August 21, 2023 which is the date the consolidated financial statements were available to be issued. No other matters were identified affecting the accompanying consolidated financial statements and related disclosures.

 

 

 

 

 

Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations

 

The following Management's Discussion and Analysis should be read in conjunction with our consolidated financial statements and the related notes thereto. The Management's Discussion and Analysis may contain “forward-looking statements.” Any statements that are not statements of historical fact are forward-looking statements.

 

These statements are based on the current expectations, forecasts, and assumptions of our management and are subject to various risks and uncertainties that could cause our actual results to differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements are sometimes identified by language such as “believes,” “anticipates,” “estimates,” “expects,” “plans,” “intends,” “projects,” “future” and similar expressions and may also include references to plans, strategies, objectives, and anticipated future performance as well as other statements that are not strictly historical in nature.

 

The risks, uncertainties, and other factors that could cause our actual results to differ materially from those expressed or implied in this Quarterly Report on Form 10-Q include:

 

	●	our ability to successfully develop and sell our products;
	●	our ability to obtain additional financing at favorable rates to maintain and develop our operations;
	●	competitive conditions in our industry; and
	●	the ability to attract and retain key personnel.

 

There may be other factors that may cause our actual results to differ materially from the forward-looking statements. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. Readers should carefully consider this information as well as the risks and other uncertainties described in our other filings made with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements. They reflect opinions, assumptions, and estimates only as of the date they were made, and we undertake no obligation to publicly update or revise any forward-looking statements in this Quarterly Report on Form 10-Q, whether as a result of new information, future events or circumstances, or otherwise.

 

Critical Accounting Policies and Estimates

 

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses.  We have identified the following accounting policies that we believe are key to an understanding of our financial statements.  These are important accounting policies that require management's most difficult, subjective judgments.

 

Foreign Currency Translation

 

The Company subsidiary’s primary functional currency is the Mexican peso, but it’s reporting currency is the U.S. dollar. The balance sheet accounts are translated at exchange rates in effect at the end of the period and income statement accounts are translated at average exchange rates for the period. Translation gains and losses are included as a separate component of stockholders’ deficit.

 

Convertible Debentures

 

The Company adopted the guidance in Accounting Standards Updated (“ASU”) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity on January 1, 2022. ASU 2020-06 simplifies an issuer’s accounting for convertible instruments and its application of the derivatives scope exception for contracts in its own equity. Additionally, ASU 2020-06 removes the requirements for accounting for beneficial conversion features. The Company adopted ASU 2020-06 utilizing the modified retrospective method, which resulted in an immaterial impact to the Company.

 

 

 

 

 

Overview

 

TEO Foods Inc. (“Company”) was incorporated in the state of Nevada on December 27, 2012.

 

The Company’s principal activity is to produce and sell food packaged products for retail sale in the frozen, refrigerated and shelf stable categories. The Company has a license to use the TEO name and logo on food products it sells and to apply the TEO pasteurization/sterilization processes to its products for improved shelf life and safety.

 

In January 2020, the Company created BCTEO Foods S.A. de C.V. (“BC TEO Foods”), a 100% owned subsidiary in Mexico. BCTEO Foods is the operating entity in Mexico and holds all facilities leases.

 

In March 2022, we received initial licensing in Mexico to produce alcohol in our Tijuana facilities. We are currently able to produce and export alcoholic beverages produced in our facility. We are in the process of completing licensing that will allow us to distribute and sell throughout Mexico. We believe that the addition of alcoholic and non-alcoholic beverages to our capabilities will expand our opportunities in the USA and Mexico.

 

In May 2022, we licensed the Nerys Brand for products sold outside Mexico to an international distributor of a variety of meat, fish, cheese and other food products throughout the USA, south and central America. In exchange we will receive a royalty on the NERYS branded products sold outside of Mexico and will be the supplier of these branded products.

 

In January 2020, the Company created BCTEO Foods S.A. de C.V. (“BC TEO Foods”), a 100% owned subsidiary in Mexico. BCTEO Foods is the operating entity in Mexico and holds all facilities leases.

 

We will continue to develop our products and services. We will continue to pursue co-packing opportunities to support production planning, formulation, equipment acquisition, testing, validation, branding and sales of new products. This assumes that we are able to secure additional capital to purchase the necessary equipment, supplies (trays, film, carton/print materials, etc.), retain consultants/staff and provide for other costs of production.

 

We have received equity and debt investments both from insiders and from private investors. As we expand operational activities, we may continue to experience operating losses and/or negative cash flows from operations and may be required to obtain additional financing to fund operations. There can be no assurance that we will be able obtain additional financing, if at all, or upon terms that will be acceptable to us.

 

Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in our stage of development. Such risks include, but are not limited to, an evolving business model and the management of growth.

 

To address these risks we must, among other things, implement and successfully execute our business and marketing strategy and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.

 

 

 

 

Results of Operations

 

Results of Operations for the Three Months Ended June 30, 2023 and 2022

 

During the three-month periods ended June 30, 2023 and 2022, the Company had $36,021 and $10,519 in sales revenue, respectively. During the three-month periods ended June 30, 2023 and 2022, the Company had $0 and $0 in licensing and royalty revenue, respectively.

 

The increase was due to new revenue from warehousing and logistics services utilizing our cold and dry storage.

 

The licensing and royalty revenue for Mexico terminated during the second quarter of 2022 due to a fire in the licensee’s facility, we were notified that they have discontinued operations. We are focusing on establishing distribution relationships and providing our own products through those channels. We are also seeking co-packing opportunities.

 

During the three-month periods ended June 30, 2023 and 2022, we had general and administrative expenses of $11,080 and $4,426, respectively. Payroll expenses were $0 and $7,440 during the three-month periods ended June 30, 2023 and 2022, respectively. Payroll decreased due to using contractors. These expenses are expected to increase as we add production staff for operations. Rent and lease expenses were $49,772 and $42,423 for the three-month periods ended June 30, 2023 and 2022, respectively. Rent and lease expenses increased as a result of a rate increase. Depreciation expenses were $2,619 and $2,619 for the three-month period ended June 30, 2023 and 2022, respectively. Professional fees were $36,576 and $50,207 for the three-month periods ended June 30, 2023 and 2022, respectively. The increase was partially due to fees paid related to obtaining quotation on the OTCQB.

 

Interest expense was $9,754 and $9,495 for the three-month periods ended June 30, 2023 and 2022, respectively. This interest is primarily related to notes payable.

 

The Company's comprehensive loss for the three-month periods ended June 30, 2023 and 2022 was $154,904 and $138,651, respectively. The losses remained consistent between the periods due to the level of operations being consistent.

 

Results of Operations for the Six Months Ended June 30, 2023 and 2022

 

During the six-month periods ended June 30, 2023 and 2022, the Company had $69,286 and $10,519 in sales revenue, respectively. During the six-month periods ended June 30, 2023 and 2022, the Company had $0 and $6,787 in licensing and royalty revenue, respectively.

 

During the six-month periods ended June 30, 2023 and 2022, we had general and administrative expenses of $19,915 and $12,207, respectively. Payroll expenses were $0 and $16,816 during the six-month periods ended June 30, 2023 and 2022, respectively. Rent and lease expenses were $94,870 and $79,325 for the six-month periods ended June 30, 2023 and 2022, respectively. Depreciation expenses were $5,210 and $5,210 for the six-month period ended June 30, 2023 and 2022, respectively. Professional fees were $101,665 and $82,364 for the six-month periods ended June 30, 2023 and 2022, respectively.

 

Interest expense was $19,490 and $18,846 for the six-month periods ended June 30, 2023 and 2022, respectively. This interest is primarily related to notes payable.

 

Expenses are expected to increase as our operations develop and we continue to provide services and introduce new products into the market.

 

 

 

 

Liquidity and Capital Resources

 

As of June 30, 2023, we had total assets of $96,067 and total liabilities of $1,713,985. As of December 31, 2022, we had total assets of $107,725 and total liabilities of $1,575,505. During the three-month periods ended June 30, 2023 and 2022, the Company paid $0 and $1,300, respectively, toward the current portion of the license fee payable.

 

Net cash used in investing activities for the six-month periods ended June 30, 2023 and 2022 was $0 and $0, respectively. Net cash provided from financing activities for the six-month periods ended June 30, 2023 and 2022 was $58,105 and 54,900, respectively. The cash provided was primarily due to loans from our CEO for the six-month periods ended June 30, 2023 and 2022 of $58,105 and $35,500, respectively.

 

Net cash used in operating activities for the six-month periods ended June 30, 2023 and 2022 was $1,647 and $63,167, respectively. A substantial portion of these amounts resulted from accrued salary expense due to our CEO totaling $15,000 and $31,500, respectively.

 

Over the next twelve months, we believe that we will require additional capital and anticipated funds from operations to further develop and sustain our operations. The Company will need to seek additional financing to expand operations and create revenue with the introduction of its products to the market. The TEO license requires future payments and royalty payments on related revenue.

 

We believe that we will need to raise an additional $1,000,000 over the next 12 months and intend to seek additional investment through a private or a public equity offering. We will use the proceeds to cover our product development, auditing and accounting costs, licensing, necessary equipment, supplies (trays, film, carton/print materials, etc.), retain consultants/staff, provide for other costs of production and other working capital needs.

 

There can be no assurance that we will be able obtain additional financing, if at all or upon terms that will be acceptable to us. There can be no assurance of when, if ever, our operations become profitable.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements or financing activities with special purpose entities.

 

Going Concern

 

The Company’s consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has suffered recurring losses from operations and has insufficient working capital as of June 30, 2023. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders, the Company's ability to obtain necessary equity or debt financing to continue operations, and ultimately the Company's ability to generate profit from sales of packaged food products. These consolidated financial statements do not include any adjustments to classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company plans to obtain fund for operations through continued financial support from its stockholders, debt and private offerings of its equity.

 

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

 

Not required for Smaller Reporting Companies.

 

 

 

 

 

Item 4 - Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

The Company’s Principal Executive Officer and Principal Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that information required to be disclosed in the reports that we file or submit under the Exchange Act reports is (1) recorded, processed, summarized and reported within the periods specified in the Commission’s rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

Internal control systems, no matter how well designed and operated, have inherent limitations. Therefore, even a system which is determined to be effective cannot provide absolute assurance that all control issues have been detected or prevented. Our systems of internal controls are designed to provide reasonable assurance with respect to financial statement preparation and presentation.

 

Management will continue to review and make any changes it deems necessary to the overall design of the Company’s internal control over financial reporting, including implementing improvements in policies and procedures. We are committed to a proper internal control environment and will continue to implement measures to improve the Company’s internal control over financial reporting in response to our continued operational development.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended June 30, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

 

 

PART II - OTHER INFORMATION

 

Item 1 - Legal Proceedings

 

No disclosure required.

 

Item 1A - Risk Factors

 

Not required for Smaller Reporting Companies.

 

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

 

  No disclosure required.

 

Item 3 - Defaults Upon Senior Securities

 

No disclosure required.

 

Item 4 – Mine Safety Disclosures

 

No disclosure required.

 

Item 5 - Other Information

 

No disclosure required.

 

Item 6 - Exhibits

 

Exhibit No.		Description
31.1*		Certification of Principal Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
31.2*		Certification of Principal Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
32.1*		Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**		Inline XBRL Instance Document.
101.SCH**		Inline XBRL Taxonomy Extension Schema Document.
101.CAL**		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF**		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB**		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE**		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*		Cover Page Interactive Data File - the cover page from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 is formatted in Inline XBRL

*   Filed herewith

** Furnished herewith 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	TEO Foods Inc.
Date:  August 21, 2023	By:	/s/ Jeffrey H. Mackay
		Jeffrey H. Mackay, CEO and President
		Principal Executive Officer

 

 

Date:  August 21, 2023	By:	/s/ John O’Keefe
		John O’Keefe, Chief Financial Officer
		Principal Financial Officer

 

 

 

 

Exhibit 31.1

 

CERTIFICATION

 

I, Jeffrey Mackay, certify that:

 

1.    I have reviewed this quarterly report on Form 10-Q of TEO Foods Inc. (the "Registrant");

 

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

 

4.    The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a.    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

 

  b.    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c.    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d.    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5.    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

  a.    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial; and

 

  b.    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

August 21, 2023

 

/s/ Jeffrey Mackay

Jeffrey Mackay

Chief Executive Officer

(Principal Executive Officer)

 

Exhibit 31.2

 

CERTIFICATION

 

I, John O’Keefe, certify that:

 

1.    I have reviewed this quarterly report on Form 10-Q of TEO Foods Inc. (the "Registrant");

 

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

 

4.    The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a.   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our    supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

 

  b.   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c.   Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d.   Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5.    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

  a.   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

  b.   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

August 21, 2023

 

 

/s/ John O’Keefe

John O’Keefe

Chief Financial Officer

(Principal Financial and Accounting Officer)

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of TEO Foods Inc. (the "Company") on Form 10-Q for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jeffrey Mackay, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)        The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)        The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

August 21, 2023

 

/s/ Jeffrey Mackay

Jeffrey Mackay

Chief Executive Officer

(Principal Executive Officer)

 

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of TEO Foods Inc. (the "Company") on Form 10-Q for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John O’Keefe, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

August 21, 2023

 

/s/ John O’Keefe

John O’Keefe

Chief Financial Officer

(Principal Financial and Accounting Officer)

 

v3.23.2

Cover - shares	6 Months Ended
	Jun. 30, 2023	Aug. 21, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	333-226801
Entity Registrant Name	TEO Foods Inc.
Entity Central Index Key	0001612188
Entity Tax Identification Number	47-1209532
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	Blvd. Insurgentes 19801 unit. 4B
Entity Address, City or Town	Tijuana
Entity Address, State or Province	BC
Entity Address, Postal Zip Code	22225
City Area Code	(619)
Local Phone Number	758-1973
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		13,071,957

v3.23.2

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 2,483	$ 657
Accounts receivable, net	14,829	25,924
Inventories, net
Taxes receivable, net	40,386	37,563
Prepaid and other assets	13,302	13,303
Total current assets	71,000	77,447
Property and equipment, net	25,067	30,278
Total assets	96,067	107,725
Current liabilities
Accounts payable and accrued expenses	450,447	370,072
Related party advances	188,205	130,100
License fee payable - related party	629,833	629,833
Notes payable	100,000	100,000
Convertible note payable	345,500	345,500
Total current liabilities	1,713,985	1,575,505
Total liabilities	1,713,985	1,575,505
Commitments and contingencies (Note 14)
Stockholders' deficit
Preferred stock, $0.001 par value, 10,000,000 shares authorized, 9,022,900 shares issued and outstanding	9,023	9,023
Common stock, $0.001 par value, 490,000,000 shares authorized, 13,071,957 and 13,071,957 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively	13,072	13,072
Additional paid-in capital	1,176,635	1,176,635
Accumulated deficit	(2,826,523)	(2,661,744)
Other comprehensive income (loss)	9,875	(4,766)
Total stockholders' deficit	(1,617,918)	(1,467,780)
Total liabilities and stockholders' deficit	$ 96,067	$ 107,725

v3.23.2

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock shares, authorized	10,000,000	10,000,000
Preferred stock shares, issued	9,022,900	9,022,900
Preferred stock shares, outstanding	9,022,900	9,022,900
Common stock, par value	$ 0.001	$ 0.001
Common stock shares, authorized	490,000,000	490,000,000
Common stock shares, issued	13,071,957	13,071,957
Common stock shares, outstanding	13,071,957	13,071,957

v3.23.2

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Sales	$ 36,021	$ 10,519	$ 69,286	$ 10,519
Cost of sales
Gross profit	36,021	10,519	69,286	10,519
Operating expense
Payroll		7,440		16,816
General and administrative	11,080	4,426	19,915	12,207
Rent and lease	49,772	42,423	94,870	79,325
Professional fees	36,576	50,207	101,665	82,364
Depreciation	2,619	2,619	5,210	5,210
Total operating expenses	100,047	107,115	221,660	195,922
Operating loss	(64,026)	(96,596)	(152,374)	(185,403)
Other income (expense)
Licensing and royalty income				6,787
Loss on Royalty Agreement		(31,929)		(31,929)
Other income (expense)	4,007	2,413	7,086	1,946
Interest expense	(9,754)	(9,495)	(19,490)	(18,846)
Total other (loss) income	(5,747)	(39,011)	(12,404)	(42,042)
Net (loss) income before income taxes	(69,773)	(135,607)	(164,778)	(227,445)
Income tax expense
Net (loss) income	(69,773)	(135,607)	(164,778)	(227,445)
Other comprehensive (loss) income
Foreign currency transaction adjustment	11,949	3,044	9,875	(853)
Comprehensive income (loss)	$ (57,825)	$ (138,651)	$ (154,903)	$ (228,298)

v3.23.2

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Basic	$ (0.01)	$ (0.01)	$ (0.01)	$ (0.02)
Diluted	$ (0.01)	$ (0.01)	$ (0.01)	$ (0.02)
Basic	13,071,957	13,071,957	13,071,957	13,071,957
Diluted	13,071,957	13,071,957	13,071,957	13,071,957

v3.23.2

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Statement of Cash Flows [Abstract]
Net loss	$ (164,779)	$ (227,445)
Adjustments to reconcile net loss to net Cash used in operations:
Depreciation expense	5,211	5,210
Loss on Royalty Agreement		31,929
Changes in operating assets and liabilities:
Accounts receivable	(11,095)	(4,082)
Licensing and royalty income receivable		6,097
Inventories		(41)
Tax receivables	(2,823)	(7,468)
Prepaid and other assets		43
Accounts payable and accrued expenses	80,375	100,177
Net cash (used) in operating activities	(70,921)	(95,580)
Cash flows from investing activities
Purchase of property and equipment
Net cash (used) in investing activities
Cash flows from financing activities
Proceeds from related party advances	58,105	64,400
Proceeds from issuance of promissory notes		6,000
Proceeds from issuance of common stock		20,000
Payment of deemed dividend to Teo Inc. for license		(1,300)
Net cash provided by (used) in financing activities	58,105	89,100
Effect of foreign currency exchange translation	14,641	(853)
Net change for period	1,825	(7,333)
Cash and Cash Equivalents at beginning of period	657	7,555
Cash and Cash Equivalents at end of period	2,482	222
Supplement Information:
Interest
Income taxes

v3.23.2

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Unaudited) - USD ($)	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Beginning balance, value at Dec. 31, 2021	$ 9,023	$ 12,972	$ 1,156,735	$ (2,314,436)	$ (197)	$ (1,135,903)
Beginning balance, shares at Dec. 31, 2021	9,022,900	12,971,957
Stock issued for cash		$ 100	19,900			20,000
Stock Issued for cash, shares		100,000
Foreign currency translation adjustments					2,191	2,191
Net (loss) income				(91,838)		(91,838)
Ending balance, value at Mar. 31, 2022	$ 9,023	$ 13,072	1,176,635	(2,406,274)	1,994	(1,205,550)
Ending balance, shares at Mar. 31, 2022	9,022,900	13,071,957
Foreign currency translation adjustments					(3,044)	(3,044)
Net (loss) income				(135,607)		(135,607)
Ending balance, value at Jun. 30, 2022	$ 9,023	$ 13,072	1,176,635	(2,541,881)	(1,050)	(1,344,201)
Ending balance, shares at Jun. 30, 2022	9,022,900	13,071,957
Beginning balance, value at Dec. 31, 2022	$ 9,023	$ 13,072	1,176,635	(2,661,745)	4,766	(1,467,780)
Beginning balance, shares at Dec. 31, 2022	9,022,900	13,071,957
Foreign currency translation adjustments					(2,074)	(2,074)
Net (loss) income				(95,005)		(95,005)
Ending balance, value at Mar. 31, 2023	$ 9,023	$ 13,072	1,176,635	(2,756,750)	2,692	(1,564,859)
Ending balance, shares at Mar. 31, 2023	9,022,900	13,071,957
Foreign currency translation adjustments					9,875	9,875
Net (loss) income				(164,799)		(164,799)
Ending balance, value at Jun. 30, 2023	$ 9,023	$ 13,072	$ 1,176,635	$ (2,922,049)	$ 12,567	$ (1,617,918)
Ending balance, shares at Jun. 30, 2023	9,022,900	13,071,957

v3.23.2

ORGANIZATION AND BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
ORGANIZATION AND BASIS OF PRESENTATION	NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION   TEO Foods Inc. (“Company”) was incorporated in the state of Nevada on December 27, 2012.   The Company’s principal activity is to produce and sell food packaged products for retail sale in the frozen, refrigerated and shelf stable categories. The Company has a license to use the TEO name and logo on food products it sells and to apply the TEO pasteurization/sterilization processes to its products for improved shelf life and safety.   In January 2020, the Company created BCTEO Foods S.A. de C.V. (“BC TEO Foods”), a 100% owned subsidiary in Mexico. BCTEO Foods is the operating entity in Mexico and holds all facilities leases.

v3.23.2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   Basis of Presentation and Consolidation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the Six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. Notes to the unaudited consolidated financial statements that would substantially duplicate the disclosure contained in the audited consolidated financial statements for the fiscal year ending December 31, 2023 have been omitted. The Company consolidates the financial statements of its wholly-owned subsidiaries and all intercompany transactions and account balances have been eliminated in consolidation.   All amounts referred to in the notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise.   Cash and Cash Equivalents The Company considers all highly liquid debt instruments and other short-term investments with a maturity date of three months or less, when purchased, to be cash equivalents.   Foreign Currency Translation The Company subsidiary’s primary functional currency is the Mexican peso, but it’s reporting currency is the U.S. dollar. The balance sheet accounts are translated at exchange rates in effect at the end of the period and income statement accounts are translated at average exchange rates for the period. Translation gains and losses are included as a separate component of stockholders’ deficit.   Accounts Receivable Accounts receivable are reported at the customers’ outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The allowance for doubtful accounts at June 30, 2023 and December 31, 2022 was $0.   Inventory and Cost of Sales Inventories are stated at the lower of cost or realizable value, using the average cost method. When an impairment indicator suggests that the carrying amounts of inventories might not be recoverable, the Company reviews such carrying amounts and estimates the net realizable value based on the most reliable evidence available at that time. An impairment loss is recorded if the net realizable value is less than the carrying value. Impairment indicators considered for these purposes are, among others, obsolescence, decrease in market prices, damage and a firm commitment to sell.   Property and Equipment Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs that do not improve or extend the lives of the respective assets are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income.   Impairment of Long-Lived and Intangible Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company uses market quotes, if available, or an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable. The Company did not recognize impairment on its long-lived assets during the periods ended March 31, 2023 or 2022. Identified intangible assets are reviewed for impairment at least annually, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company’s only intangible asset consists of the royalty agreement discussed in Note 7.   Convertible Debentures The Company adopted the guidance in Accounting Standards Updated (“ASU”) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity on January 1, 2022. ASU 2020-06 simplifies an issuer’s accounting for convertible instruments and its application of the derivatives scope exception for contracts in its own equity. Additionally, ASU 2020-06 removes the requirements for accounting for beneficial conversion features. The Company adopted ASU 2020-06 utilizing the modified retrospective method, which resulted in an immaterial impact to the Company.   Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” (“Topic 606”). Revenue is recognized when a customer obtains control of promised goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five-step model in order to determine this amount:     i. Identification of the promised goods in the contract;   ii. Determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract;       iii. Measurement of the transaction price, including the constraint of variable consideration;   iv. Allocation of the transaction price of the performance obligations; and   v. Recognition of revenue when (or as) the Company satisfies each performance obligation.   The Company only applies the five-step model to contracts when it is probable the entity will collect the consideration it is entitled to in exchange for the goods and services it transfers to the customer. Once a contract is determined to be within the scope of Topic 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligations when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time typically upon delivery. The Company primarily sells packaged food products to its customers. The Company’s performance obligation is satisfied when the goods have been delivered, which is at a point in time. The Company provides manufacturing services for packaged food and other products. The Company’s performance obligation is satisfied for services when the services are completed or the related products have been delivered, which is at a point in time. The Company receives revenue from a licensing and royalty agreement and the licensee incurs fees based on their sales to their customers, which occurs when the products are delivered. The Company’s performance obligation related to these agreements is satisfied at the point in time when the products are delivered.   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 disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.   Fair Value of Financial Instruments Fair value is defined as the price that would be received in the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has categorized all investments recorded at fair value based upon the level of judgment associated with the inputs used to measure their fair value.   Hierarchical levels, directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:   ●   Level 1: Quoted prices in active markets for identical assets or liabilities that the organization has the ability to access at the reporting date.   ●   Level 2: Inputs other than quoted prices included in Level 1, which are either observable or that can be derived from or corroborated by observable data as of the reporting date.   ●   Level 3: Inputs include those that are significant to the fair value of the asset or liability and are generally less observable from objective resources and reflect the reporting entity's assumptions about the assumptions market participants would use in pricing the asset or liability. The Company's financial instruments consist of advances from related party, notes payable, convertible notes payable and license fee payable. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of the respective instruments.   Loss Per Share of Common Stock Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. The calculation of diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Securities with anti-dilutive effects on net earnings (loss) per share are excluded. As of June 30, 2023 and 2022, none of the convertible preferred shares or convertible debt were included in the calculation of diluted weighted average shares as they were anti-dilutive.   As of June 30, 2023 and 2022, preferred shares convertible to 90,229,000 common shares were included in the diluted weighted average shares; however, notes convertible into a maximum of 1,727,500 and 1,697,500 common shares were excluded from the calculation of loss per common share as the notes are anti-dilutive. As of June 30, 2023 and 2022, common shares outstanding totaled 13,071,957.

v3.23.2

GOING CONCERN	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
GOING CONCERN	NOTE 3 – GOING CONCERN   These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has suffered recurring losses from operations and has insufficient working capital as of June 30, 2023 to develop its business plan and meet its obligation of the next 12 months. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders, the Company's ability to obtain necessary equity or debt financing to continue operations, and ultimately the Company's ability to generate profit from sales of packaged food products. These consolidated financial statements do not include any adjustments to classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company plans to obtain funds for operations through continued financial support from its stockholders, debt and private offerings of its equity.

v3.23.2

INVENTORY	6 Months Ended
	Jun. 30, 2023
Inventory Disclosure [Abstract]
INVENTORY	NOTE 4 – INVENTORY   Inventory consists of raw materials and finished goods located in the Company’s warehouse in Tijuana, Mexico. At June 30, 2023 and December 31, 2022, inventories were $0.

v3.23.2

TAX RECEIVABLES	6 Months Ended
	Jun. 30, 2023
Tax Receivables
TAX RECEIVABLES	NOTE 5 – TAX RECEIVABLES   Tax receivables represent credits from the Mexican taxing authority. The Company’s Mexican subsidiaries have accumulated IVA tax payments that exceeded its IVA tax liabilities. The Company periodically applies for refunds of these accumulated overpayments. These overpayments are also available to the Company to offset future IVA liabilities. The tax receivable balance at June 30, 2023 and December 31, 2022 was $40,386 and $37,563, respectively.

v3.23.2

PROPERTY AND EQUIPMENT	6 Months Ended
	Jun. 30, 2023
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT	NOTE 6 – PROPERTY AND EQUIPMENT   At June 30, 2023 and December 31, 2022, property and equipment consisted of the following: Schedule of property and equipment                 June 30, 2023     December 31, 2022                 Machinery and equipment   $ 42,502     $ 42,502   Transportation equipment     10,032       10,032         52,534       52,534   Less accumulated depreciation     (27,466 )     (22,256 )     $ 25,068     $ 30,278     Depreciation expense for the three months ended June 30, 2023 and 2022 was $2,619 and $2,591, respectively. The estimated useful lives of fixed assets is 5 years.

v3.23.2

ROYALTY AND LICENSE AGREEMENT	6 Months Ended
	Jun. 30, 2023
Royalty And License Agreement
ROYALTY AND LICENSE AGREEMENT	NOTE 7 – ROYALTY AND LICENSE AGREEMENT   On September 30, 2017, the Company entered into a Master Agreement with TEO Inc. ("TEO"). TEO is the founder and majority controlling shareholder of the Company. The Master Agreement provides the Company a license to use the TEO name and logo on food products it sells and to apply TEO's pasteurization/sterilization processes to its products for improved shelf life and safety. Additional provisions provide the Company production rights to TEO's pasteurizer/sterilizer and rights to lease its own system when certain sales/production increase. Pursuant to the master agreement, the Company agreed to pay an initial $1 million fee in installments with $100,000 due on June 30, 2018, $300,000 due on December 31, 2018 and the remaining $600,000 due in 12 equal monthly payments with the first payment due on January 31, 2019. TEO Inc. has agreed to maintain the license through December 31, 2023 and accrue and accept payments due as funds are available. TEO Inc. has agreed to extend the start date to January 1, 2024 of the use/royalty and service fee of 5.5% of the Company's gross revenue for food sales processed using TEO's intellectual property. The ongoing licensing is maintained by meeting minimum annual use/royalty and service fees. The Company may pay for the difference between the actual use and the minimum to maintain the license. The annual minimum is listed as follows: Schedule of Royalty and License Agreements           Year   Minimum Service Fee 2024     $ 500,000   2025       750,000   2026       1,000,000   Thereafter       Increase 10% per year     As a result of TEO being the majority shareholder of the Company and TEO's basis in the license being $0, the Company recorded a deemed dividend of $1 million for the initial fee payable to TEO. As of June 30, 2023 and December 31, 2022, the outstanding balance of the license fee payable was $629,833. For the six months ended June 30, 2023 and 2022, the Company made payments toward the license of $0 and $1,300, respectively.   Effective April 1, 2020, the Company entered into an agreement whereby it assigned half and licensed half of the Nerys Brand for cheese products in Mexico, along with certain production equipment and facilities that the Company did not intend to transfer to its new facility for production, to a third party. In exchange, the Company receives a portion of net revenue from all products sold, which includes bulk meats and other products, by the acquirer, a royalty on all NERYS cheese products sold in Mexico of $0.01 per pound and will also receive five percent of the proceeds of any sale of the related acquirer’s business.   The Company valued the royalty agreement at the book value of the assets transferred of $31,929, which approximates the fair value and is recorded as an intangible asset on the consolidated balance sheets as of December 31, 2021.   On June 7, 2022, the facility used by the licensee was destroyed in a fire. The licensee has informed the Company that its insurance will not pay the loss and as a result is closing all of its business operations. Pursuant to the agreement all rights to the NERYS cheese products sold in Mexico revert back to the Company and it is evaluating the economic viability of resuming fulfillment of the retail placements in Mexico.   As a result, during the year ended December 31, 2022, the Company has written off the value of the royalty agreement totaling $31,929, which is included within other income (expense) on the consolidated statements of operations and comprehensive loss.   In May 2022, the Company licensed the Nerys Brand for products sold outside Mexico to an international distributor of a variety of meat, fish, cheese and other food products throughout the USA, south and central America. In exchange it will receive a royalty on the NERYS branded products sold outside of Mexico and will be the supplier of these branded products.

v3.23.2

NOTES PAYABLE	6 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
NOTES PAYABLE	NOTE 8 – NOTES PAYABLE   Notes Payable On July 31, 2018, the Company issued a note for $100,000 in principal bearing interest at 8% maturing on October 31, 2018. This note was subsequently amended to extend the maturity date to December 31, 2022. As of June 30, 2023, and December 31, 2022, the outstanding principal balance of the note was $100,000.   Convertible Note Payable   On June 28, 2018, the Company issued a note for $100,000. The note bears an 8% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. The maturity date of the note is December 31, 2023.   On February 4, 2019, the Company issued a note for $120,000. The note can be converted to common stock at $0.20 per share or the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share and converts automatically upon certain conditions. The note bears no interest until September 30, 2019 and then bears 8% interest, if not converted to common stock. This note was subsequently amended to extend the maturity date to December 31, 2023. On December 20, 2020, the holder converted $27,500 in principal of this note to 137,500 common shares at $0.20 per share.   On May 5, 2021, the Company issued a note for $25,000. The note bears an 8% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to December 31, 2023.   On June 1, 2021, the Company issued a note for $20,000. The note bears an 8% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to December 31, 2023. On December 20, 2021, the holder converted $10,000 in principal of this note to 50,000 common shares at $0.20 per share.   On June 2, 2021, the Company issued a note for $17,000. The note bears an 8% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to December 31, 2023.   On July 12, 2021, the Company issued a note for $40,000. The note bears an 8% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to December 31, 2023.   On September 29, 2021, the Company issued a note for $15,000. The note bears an 8% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to December 31, 2023.   On November 24, 2021, the Company issued a note for $40,000. The note bears an 8% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to December 31, 2023.   On April 14, 2022, the Company issued a note for $6,000. The note bears an 8% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to December 31, 2023.   The principal balance of convertible debt at June 30, 2023 and December 31, 2022 amounted to $345,500.

v3.23.2

EQUITY	6 Months Ended
	Jun. 30, 2023
Equity Method Investments and Joint Ventures [Abstract]
EQUITY	NOTE 9 – EQUITY   Preferred Stock   Each share of Class A Preferred Stock may be converted by the holder upon request of the holder into 10 shares of common stock. Each holder is entitled to 100 votes for each share of Class A Preferred Stock held on the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company (and written actions of stockholders in lieu of meetings) with respect to any and all matters presented to the stockholders of the Company for their action or consideration. The holders are entitled to dividends, if any, as declared by the Company and participate pari passu with the common stock of the Company at the conversion rate.

v3.23.2

INCOME TAXES	6 Months Ended
	Jun. 30, 2023
Income Tax Disclosure [Abstract]
INCOME TAXES	NOTE 11 - INCOME TAXES   Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The U.S. federal income tax rate is 21%.   The provision for Federal income tax consists of the following June 30, 2023 and 2022: Schedule of provision for income tax             Federal income tax (expense) benefit attributable to:   June 30, 2023     June 30, 2022   Current Operations   $ 31,998     $ 48,357   Less: valuation allowance     (31,998 )     (48,357 ) Net provision for Federal income taxes   $ —       $ —       The cumulative tax effect at the expected rate of 21% of significant items comprising our net deferred tax amount is as follows:   Schedule of deferred tax asset             Deferred tax asset attributable to:   June 30, 2023     December 31, 2022   Net operating loss carryover   $ 152,374     $ 313,455   Less: valuation allowance     (152,374 )     (313,455 ) Net deferred tax asset   $ —       $ —       At June 30, 2023, the Company had net operating loss carry forwards of approximately $1,528,000 that may be offset against future taxable income. No tax benefit has been reported in the June 30, 2023 or December 31, 2022 consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.   Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.   ASC 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company’s financial statements. ASC 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than- not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.   The Company includes interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in the provision for income taxes. As of June 30, 2023 and 2022, the Company had no accrued interest or penalties related to uncertain tax positions.

v3.23.2

RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2023
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 11 - RELATED PARTY TRANSACTIONS   The Company has various related party receivables and payables derived from normal operating activities. These balances are non-interest bearing and are periodically settled as cash flow permits. These payables may include accrued compensation to officers. Accrued fees for services owed to the CEO as of June 30, 2023 and December 31, 2022 was $257,600 and $211,100, respectively, and are included within accounts payable and accrued expenses on the consolidated balance sheets. Cash advances made by the CEO as of June 30, 2023 and December 31, 2022 was $188,204 and $130,100, respectively.   Master License Agreement   On September 30, 2017, the Company entered into a Master Agreement with TEO, the founder and majority controlling shareholder of the Company. See Note 7.

v3.23.2

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 12 – COMMITMENTS AND CONTINGENCIES   During the normal course of business, the Company may be exposed to litigation. When the Company becomes aware of potential litigation, it evaluates the merits of the case in accordance with Financial Accounting Standards Board Accounting Standards Codification “FASB ASC” 450-20-50, Contingencies. The Company evaluates its exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If the Company determines that an unfavorable outcome is probable and can be reasonably estimated, it establishes the necessary accruals. As of March 31, 2023 and December 31, 2022, the Company is not aware of any contingent liabilities that should be reflected in the financial statements.   At March 31, 2023, the Company had three leases on commercial units that are contiguous in the same building located in Tijuana Mexico and comprising approximately 38,000 square feet total. The leases are 12 month leases with option to renew for additional 12 month periods. The total rents are approximately $16,000 per month gross with no additional common fees or other charges. The Company paid a total of $94,870 and $79,325 during the six month period ended June 31, 2023 and 2022, respectively, related to the leases of commercial units in Tijuana. The leases are short term in nature as the Company is not certain to renew the leases.

v3.23.2

CONCENTRATIONS	6 Months Ended
	Jun. 30, 2023
Risks and Uncertainties [Abstract]
CONCENTRATIONS	NOTE 13 – CONCENTRATIONS   Cash Deposit   The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At June 30, 2023 and December 31, 2022, no cash balances exceeded the federally insured limit.

v3.23.2

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 14 - SUBSEQUENT EVENTS   The Company has evaluated subsequent events for recognition and disclosure through August 21, 2023 which is the date the consolidated financial statements were available to be issued. No other matters were identified affecting the accompanying consolidated financial statements and related disclosures.

v3.23.2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation and Consolidation	Basis of Presentation and Consolidation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the Six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. Notes to the unaudited consolidated financial statements that would substantially duplicate the disclosure contained in the audited consolidated financial statements for the fiscal year ending December 31, 2023 have been omitted. The Company consolidates the financial statements of its wholly-owned subsidiaries and all intercompany transactions and account balances have been eliminated in consolidation.   All amounts referred to in the notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise.
Cash and Cash Equivalents	Cash and Cash Equivalents The Company considers all highly liquid debt instruments and other short-term investments with a maturity date of three months or less, when purchased, to be cash equivalents.
Foreign Currency Translation	Foreign Currency Translation The Company subsidiary’s primary functional currency is the Mexican peso, but it’s reporting currency is the U.S. dollar. The balance sheet accounts are translated at exchange rates in effect at the end of the period and income statement accounts are translated at average exchange rates for the period. Translation gains and losses are included as a separate component of stockholders’ deficit.
Accounts Receivable	Accounts Receivable Accounts receivable are reported at the customers’ outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The allowance for doubtful accounts at June 30, 2023 and December 31, 2022 was $0.
Inventory and Cost of Sales	Inventory and Cost of Sales Inventories are stated at the lower of cost or realizable value, using the average cost method. When an impairment indicator suggests that the carrying amounts of inventories might not be recoverable, the Company reviews such carrying amounts and estimates the net realizable value based on the most reliable evidence available at that time. An impairment loss is recorded if the net realizable value is less than the carrying value. Impairment indicators considered for these purposes are, among others, obsolescence, decrease in market prices, damage and a firm commitment to sell.
Property and Equipment	Property and Equipment Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs that do not improve or extend the lives of the respective assets are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income.
Impairment of Long-Lived and Intangible Assets	Impairment of Long-Lived and Intangible Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company uses market quotes, if available, or an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable. The Company did not recognize impairment on its long-lived assets during the periods ended March 31, 2023 or 2022. Identified intangible assets are reviewed for impairment at least annually, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company’s only intangible asset consists of the royalty agreement discussed in Note 7.
Convertible Debentures	Convertible Debentures The Company adopted the guidance in Accounting Standards Updated (“ASU”) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity on January 1, 2022. ASU 2020-06 simplifies an issuer’s accounting for convertible instruments and its application of the derivatives scope exception for contracts in its own equity. Additionally, ASU 2020-06 removes the requirements for accounting for beneficial conversion features. The Company adopted ASU 2020-06 utilizing the modified retrospective method, which resulted in an immaterial impact to the Company.
Revenue Recognition	Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” (“Topic 606”). Revenue is recognized when a customer obtains control of promised goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five-step model in order to determine this amount:     i. Identification of the promised goods in the contract;   ii. Determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract;       iii. Measurement of the transaction price, including the constraint of variable consideration;   iv. Allocation of the transaction price of the performance obligations; and   v. Recognition of revenue when (or as) the Company satisfies each performance obligation.   The Company only applies the five-step model to contracts when it is probable the entity will collect the consideration it is entitled to in exchange for the goods and services it transfers to the customer. Once a contract is determined to be within the scope of Topic 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligations when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time typically upon delivery. The Company primarily sells packaged food products to its customers. The Company’s performance obligation is satisfied when the goods have been delivered, which is at a point in time. The Company provides manufacturing services for packaged food and other products. The Company’s performance obligation is satisfied for services when the services are completed or the related products have been delivered, which is at a point in time. The Company receives revenue from a licensing and royalty agreement and the licensee incurs fees based on their sales to their customers, which occurs when the products are delivered. The Company’s performance obligation related to these agreements is satisfied at the point in time when the products are delivered.
Use of Estimates	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 disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Fair Value of Financial Instruments	Fair Value of Financial Instruments Fair value is defined as the price that would be received in the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has categorized all investments recorded at fair value based upon the level of judgment associated with the inputs used to measure their fair value.   Hierarchical levels, directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:   ●   Level 1: Quoted prices in active markets for identical assets or liabilities that the organization has the ability to access at the reporting date.   ●   Level 2: Inputs other than quoted prices included in Level 1, which are either observable or that can be derived from or corroborated by observable data as of the reporting date.   ●   Level 3: Inputs include those that are significant to the fair value of the asset or liability and are generally less observable from objective resources and reflect the reporting entity's assumptions about the assumptions market participants would use in pricing the asset or liability. The Company's financial instruments consist of advances from related party, notes payable, convertible notes payable and license fee payable. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of the respective instruments.
Loss Per Share of Common Stock	Loss Per Share of Common Stock Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. The calculation of diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Securities with anti-dilutive effects on net earnings (loss) per share are excluded. As of June 30, 2023 and 2022, none of the convertible preferred shares or convertible debt were included in the calculation of diluted weighted average shares as they were anti-dilutive.   As of June 30, 2023 and 2022, preferred shares convertible to 90,229,000 common shares were included in the diluted weighted average shares; however, notes convertible into a maximum of 1,727,500 and 1,697,500 common shares were excluded from the calculation of loss per common share as the notes are anti-dilutive. As of June 30, 2023 and 2022, common shares outstanding totaled 13,071,957.

v3.23.2

PROPERTY AND EQUIPMENT (Tables)	6 Months Ended
	Jun. 30, 2023
Property, Plant and Equipment [Abstract]
Schedule of property and equipment	Schedule of property and equipment                 June 30, 2023     December 31, 2022                 Machinery and equipment   $ 42,502     $ 42,502   Transportation equipment     10,032       10,032         52,534       52,534   Less accumulated depreciation     (27,466 )     (22,256 )     $ 25,068     $ 30,278

v3.23.2

ROYALTY AND LICENSE AGREEMENT (Tables)	6 Months Ended
	Jun. 30, 2023
Royalty And License Agreement
Schedule of Royalty and License Agreements	Schedule of Royalty and License Agreements           Year   Minimum Service Fee 2024     $ 500,000   2025       750,000   2026       1,000,000   Thereafter       Increase 10% per year

v3.23.2

INCOME TAXES (Tables)	6 Months Ended
	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Schedule of provision for income tax	Schedule of provision for income tax             Federal income tax (expense) benefit attributable to:   June 30, 2023     June 30, 2022   Current Operations   $ 31,998     $ 48,357   Less: valuation allowance     (31,998 )     (48,357 ) Net provision for Federal income taxes   $ —       $ —
Schedule of deferred tax asset	Schedule of deferred tax asset             Deferred tax asset attributable to:   June 30, 2023     December 31, 2022   Net operating loss carryover   $ 152,374     $ 313,455   Less: valuation allowance     (152,374 )     (313,455 ) Net deferred tax asset   $ —       $ —

v3.23.2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Allowance for doubtful accounts			$ 0		$ 0
Impairment on long-lived assets	$ 0	$ 0
Common shares outstanding			13,071,957	13,071,957	13,071,957
Preferred Shares [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares			90,229,000	90,229,000
Convertible Note [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares			1,727,500
Common Shares [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares			1,697,500

v3.23.2

INVENTORY (Details Narrative) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Inventories
Tijuana Mexico [Member]
Inventories	$ 0	$ 0

v3.23.2

TAX RECEIVABLES (Details Narrative) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Tax Receivables
Taxes receivable net	$ 40,386	$ 37,563

v3.23.2

PROPERTY AND EQUIPMENT (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	$ 52,534	$ 52,534
Less accumulated depreciation	(27,466)	(22,256)
Property plant and equipment net	25,068	30,278
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	42,502	42,502
Transportation Equipment [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	$ 10,032	$ 10,032

v3.23.2

PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 2,619	$ 2,591
Estimated useful live	5 years

v3.23.2

ROYALTY AND LICENSE AGREEMENTS (Details)	6 Months Ended
	Jun. 30, 2023 USD ($)
Royalty And License Agreement
2024	$ 500,000
2025	750,000
2026	$ 1,000,000
Thereafter	Increase 10% per year

v3.23.2

ROYALTY AND LICENSE AGREEMENT (Details Narrative) - USD ($)	1 Months Ended	6 Months Ended		12 Months Ended
	Sep. 30, 2017	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Royalty And License Agreement
Master agreement, description	Pursuant to the master agreement, the Company agreed to pay an initial $1 million fee in installments with $100,000 due on June 30, 2018, $300,000 due on December 31, 2018 and the remaining $600,000 due in 12 equal monthly payments with the first payment due on January 31, 2019.
Deemed dividend		$ 1,000,000
License fee payable		629,833		$ 629,833
License fee		$ 0	$ 1,300
Royalty agreement					$ 31,929
Royalty agreement write-off				$ 31,929

v3.23.2

NOTES PAYABLE (Details Narrative) - USD ($)					1 Months Ended
	Apr. 14, 2022	Jul. 12, 2021	May 05, 2021	Feb. 04, 2019	Dec. 20, 2021	Nov. 24, 2021	Sep. 29, 2021	Jun. 02, 2021	Jun. 01, 2021	Dec. 20, 2020	Jul. 31, 2018	Jun. 28, 2018	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Outstanding principal amount													$ 100,000	$ 100,000
Convertible note payable													345,500	345,500
Notes Payable One [Member]
Debt Instrument [Line Items]
Principal amount											$ 100,000
Interest rate											8.00%
Maturity date											Dec. 31, 2022
Outstanding principal amount													$ 100,000	$ 100,000
Convertible Note Payable [Member]
Debt Instrument [Line Items]
Principal amount												$ 100,000
Interest rate												8.00%
Maturity date												Dec. 31, 2023
Convertible Note Payable 1 [Member]
Debt Instrument [Line Items]
Principal amount				$ 120,000						$ 27,500
Interest rate				8.00%
Maturity date				Dec. 31, 2023
Conversion of shares price per share				$ 0.20
Conversion of shares										137,500
Price per share										$ 0.20
Convertible Note Payable 2 [Member]
Debt Instrument [Line Items]
Principal amount			$ 25,000
Interest rate			8.00%
Maturity date			Dec. 31, 2023
Convertible Note Payable 3 [Member]
Debt Instrument [Line Items]
Principal amount									$ 20,000
Interest rate									8.00%
Maturity date									Dec. 31, 2023
Conversion of shares					50,000
Share price					$ 0.20
Convertible Note Payable 4 [Member]
Debt Instrument [Line Items]
Principal amount								$ 17,000
Interest rate								8.00%
Maturity date								Dec. 31, 2023
Convertible Note Payable 5 [Member]
Debt Instrument [Line Items]
Principal amount		$ 40,000
Interest rate		8.00%
Maturity date		Dec. 31, 2023
Convertible Note Payable 6 [Member]
Debt Instrument [Line Items]
Principal amount							$ 15,000
Interest rate							8.00%
Maturity date							Dec. 31, 2023
Convertible Note Payable 7 [Member]
Debt Instrument [Line Items]
Principal amount						$ 40,000
Interest rate						8.00%
Maturity date						Dec. 31, 2023
Convertible Note Payable 8 [Member]
Debt Instrument [Line Items]
Principal amount	$ 6,000
Interest rate	8.00%
Maturity date	Dec. 31, 2023

v3.23.2

EQUITY (Details Narrative)	Jun. 30, 2023
Preferred Class A [Member] | Voting [Member]
Schedule of Equity Method Investments [Line Items]
Voting percentage	100.00%

v3.23.2

INCOME TAXES (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Current Operations	$ 31,998	$ 48,357
Less: valuation allowance	(31,998)	(48,357)
Net provision for Federal income taxes

v3.23.2

INCOME TAXES (Details 1) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Net operating loss carryover	$ 152,374	$ 313,455
Less: valuation allowance	(152,374)	(313,455)
Net deferred tax asset

v3.23.2

INCOME TAXES (Details Narrative) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Federal income tax rate	21.00%
Net operating loss carry forwards	$ 1,528,000
Income tax expense benefit	0	$ 0
Accrued interest or penalties	$ 0	$ 0

v3.23.2

RELATED PARTY TRANSACTIONS (Details Narrative) - Chief Executive Officer [Member] - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Accrued fees	$ 257,600	$ 211,100
Cash advances	$ 188,204	$ 130,100

v3.23.2

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Rent Expenses	$ 16,000
Lease rent	$ 94,870	$ 79,325

v3.23.2

CONCENTRATIONS (Details Narrative) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Risks and Uncertainties [Abstract]
Federally insured limit	$ 0	$ 0

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