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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2023

 

OR

 

☐ TRANSITION REPORT PURSUANT TO PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from_____ to _____

 

Commission File Number: 000-56232

 

KRAIG BIOCRAFT LABORATORIES, INC.

(Exact Name of Registrant as Specified in Charter)

 

Wyoming   83-0459707

(State or Other Jurisdiction

of Incorporation)

  

(I.R.S. Employer

Identification No.)

 

2723 South State St. Suite 150

Ann Arbor, Michigan 48104

(Address of Principal Executive Offices)

 

(734) 619-8066

(Registrant’s telephone number, including area code)

 

 

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

 

Copies to:

Hunter Taubman Fischer & Li LLC

950 Third Ave., 19th Floor

New York, NY 10022

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of exchange on which registered
None   -   -

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 ☐

 

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 and post 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,” “smaller reporting company,” and 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 use the extended 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 by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

As of August 14, 2023, there were 1,033,374,219 shares of the issuer’s Class A common stock, no par value per share, outstanding, 0 shares of the issuer’s Class B common stock, no par value per share, outstanding and 2 shares of preferred stock, no par value per share, outstanding.

 

 

 

 

 

 

TABLE OF CONTENTS

 

  Page
   
PART I FINANCIAL INFORMATION  
   
Item 1. Unaudited Condensed Financial Statements:
   
Condensed Consolidated Balance Sheets as of June 30, 2023 (Unaudited) and December 31, 2022 (Audited) 3
   
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) for the three and six months ended June 30, 2023 and 2022 4
   
Condensed Consolidated Statement of Changes in Stockholders’ Deficit for the three and six months ended June 30, 2023 (Unaudited) 5
   
Condensed Consolidated Statement of Changes in Stockholders’ Deficit for the three and six months ended June 30, 2022 (Unaudited) 6
   
Condensed Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30, 2023 and 2022 7
   
Notes to Condensed Consolidated Financial Statements (Unaudited) 8
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 29
   
Item 3. Quantitative and Qualitative Disclosures about Market Risk 38
   
Item 4. Controls and Procedures 38
   
PART II OTHER INFORMATION  
   
Item 1. Legal proceedings 39
   
Item 1A. Risk Factors 39
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 39
   
Item 3. Defaults upon Senior Securities 39
   
Item 4. Mine Safety Disclosures 39
   
Item 5. Other information 39
   
Item 6. Exhibits 39

 

2

 

 

Kraig Biocraft Laboratories, Inc. and Subsidiary

Condensed Consolidated Balance Sheets

 

   June 30, 2023   December 31, 2022 
   (Unaudited)     
ASSETS          
Current Assets          
Cash and cash equivalents  $1,436,861   $3,862,716 
Investment in U.S. Treasury Bills at fair value (cost: $1,714,790 and $0)   1,727,811    - 
Inventory   6,580    6,580 
Prepaid expenses   1,728    15,665 
Deposit   98,480    98,480 
Total Current Assets   3,271,460    3,983,441 
           
Property and Equipment, net   75,104    87,861 
Investment in gold bullions (cost $450,216 and $450,216, respectively)   458,832    437,251 
Operating lease right-of-use asset, net   34,814    58,849 
Security deposit   3,518    3,518 
           
Total Assets  $3,843,728   $4,570,920 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
           
Current Liabilities          
Accounts payable and accrued expenses  $527,919   $540,339 
Note payable - related party   1,617,000    1,617,000 
Royalty agreement payable - related party   65,292    65,292 
Accounts payable and accrued expenses - related party   6,043,760    5,715,008 
Operating lease liability, current   18,019    39,200 
Loan payable   65,244    95,244 
Total Current Liabilities   8,337,234    8,072,083 
           
Long Term Liabilities          
Operating lease liability, net of current   17,145    20,697 
Total Liabilities   8,354,379    8,092,780 
           
Commitments and Contingencies (Note 9)   -    - 
           
Stockholders’ Deficit          
Preferred stock, no par value; unlimited shares authorized, none, issued and outstanding   -    - 
Preferred stock Series A, no par value; 2 and 2 shares issued and outstanding, respectively   5,217,800    5,217,800 
Common stock Class A, no par value; unlimited shares authorized, 1,033,374,219 and 1,030,940,008 shares issued and outstanding, respectively   27,160,611    27,060,611 
Common stock Class B, no par value; unlimited shares authorized, no shares issued and outstanding   -    - 
Common Stock Issuable, 1,122,311 and 1,122,311 shares, respectively   22,000    22,000 
Additional paid-in capital   10,888,790    10,834,729 
Accumulated Other comprehensive income   13,021    - 
Accumulated Deficit   (47,812,873)   (46,657,000)
           
Total Stockholders’ Deficit   (4,510,651)   (3,521,860)
           
Total Liabilities and Stockholders’ Deficit  $3,843,728   $4,570,920 

 

3

 

 

Kraig Biocraft Laboratories, Inc. and Subsidiary

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

 

  

June 30,

2023

  

June 30,

2022

  

June 30,

2023

  

June 30,

2022

 
   For the Three Months Ended   For the Six Months Ended 
  

June 30,

2023

  

June 30,

2022

  

June 30,

2023

  

June 30,

2022

 
                 
Revenue  $-   $-   $-   $- 
                     
Operating Expenses                    
General and Administrative   220,667    212,419    431,770    425,438 
Professional Fees   31,349    109,534    66,096    229,914 
Officer’s Salary   171,625    164,845    343,249    349,653 
Research and Development   57,035    49,869    126,127    77,373 
Total Operating Expenses   480,676    536,667    967,242    1,082,378 
                     
Loss from Operations   (480,676)   (536,667)   (967,242)   (1,082,378)
                     
Other Income/(Expenses)                    
Net change in unrealized gain (loss) on investment in gold bullion   (11,771)   (28,352)   21,581    (5,401)
Interest expense   (119,282)   (298,444)   (237,119)   (460,331)
Amortization of debt issue costs   -    (174,669)   -    (536,701)
Interest income   22,638    -    26,907    - 
Total Other Income/(Expenses)   (108,415)   (501,465)   (188,631)   (1,002,433)
                     
Net (Loss) before Provision for Income Taxes   (589,091)   (1,038,132)   (1,155,873)   (2,084,811)
                     
Provision for Income Taxes   -    -    -    - 
                     
Net (Loss)  $(589,091)  $(1,038,132)  $(1,155,873)  $(2,084,811)
                     
Other Comprehensive Income                    
Change in unrealized value of available-for-sale securities, net of income tax  $13,021   $-   $13,021   $- 
                     
Total Comprehensive Loss  $(576,070)  $(1,038,132)  $(1,142,852)  $(2,084,811)
                     
Net Income (Loss) Per Share - Basic and Diluted  $(0.00)  $(0.00)  $(0.00)  $(0.00)
                     
Weighted average number of shares outstanding during the period - Basic and Diluted   1,033,374,219    955,149,900    1,032,728,682    949,454,169 

 

4

 

 

Kraig Biocraft Laboratories, Inc. and Subsidiary

Condensed Consolidated Statement of Changes in Stockholders Deficit

For the three and six months ended June 30, 2023

(Unaudited)

 

   Shares   Par   Shares   Par   Shares   Par   Shares   Par   APIC   Income   Deficit   Total 
  

Preferred Stock -

Series A

  

Common Stock -

Class A

  

Common Stock -

Class B

   To be issued      

Accumulated other

Comprehensive

   Accumulated     
   Shares   Par   Shares   Par   Shares   Par   Shares   Par   APIC   Income   Deficit   Total 
                                                 
Balance, March 31, 2023 (Unaudited)   2   $5,217,800    1,033,374,219   $27,160,611            -   $-    1,122,311   $22,000   $10,786,149   $-   $(47,223,782)  $(4,037,222)
                                                             
Warrants issued for services - related parties   -    -    -    -    -    -    -    -    80,997    -    -    80,997 
                                                             
Warrants issued for services   -    -    -    -    -    -    -    -    1,487    -    -    1,487 
                                                             
Imputed interest - related party   -    -    -    -    -    -    -    -    20,157    -    -    20,157 
                                                             
Other comprehensive income   -    -    -    -    -    -    -    -    -    13,021    -     13,021 
                                                             
Net loss for the three months ended June 30, 2023        -    -    -    -    -    -    -    -    -    -    (589,091)   (589,091)
                                                             
Balance, June 30, 2023 (Unaudited)   2   $5,217,800    1,033,374,219   $27,160,611    -   $-    1,122,311   $22,000   $10,888,790   $13,021   $(47,812,873)  $(4,510,651)
                                                             
Balance, December 31, 2022 (Audited)   2   $5,217,800    1,030,940,008   $27,060,611    -   $-    1,122,311   $22,000   $10,834,729    -   $(46,657,000)  $(3,521,860)
                                                             
Warrants issued for services - related parties   -    -    -    -    -    -    -    -    98,197    -    -    98,197 
                                                             
Warrants issued for services   -    -    -    -    -    -    -    -    15,771    -    -    15,771 
                                                             
Shares issued in connection with cashless warrants exercise   -    -    2,434,211    100,000    -    -    -    -    (100,000)   -    -    - 
                                                             
Imputed interest - related party   -    -    -    -    -    -    -    -    40,093    -    -    40,093 
                                                             
Other comprehensive income   -    -    -    -    -    -    -    -    -    13,021    -    13,021 
                                                             
Net loss for the six months ended June 30, 2023   -    -    -    -    -    -    -    -    -    -    (1,155,873)   (1,155,873)
                                                             
Balance, June 30, 2023 (Unaudited)   2   $5,217,800    1,033,374,219   $27,160,611    -   $     -    1,122,311   $22,000   $10,888,790   $13,021   $(47,812,873)  $(4,510,651)

 

5

 

 

Kraig Biocraft Laboratories, Inc. and Subsidiary

Condensed Consolidated Statement of Changes in Stockholders’ Deficit

For the three and six months ended June 30, 2022

(Unaudited)

 

   Shares   Par   Shares   Par   Shares   Par   Shares   Par   APIC   Deficit   Total 
  

Preferred Stock -

Series A

  

Common Stock -

Class A

  

Common Stock -

Class B

   To be issued       Accumulated     
   Shares   Par   Shares   Par   Shares   Par   Shares   Par   APIC   Deficit   Total 
Balance, March 31, 2022 (Unaudited)   2   $5,217,800    950,905,044   $23,921,297              -   $             -    1,122,311   $22,000   $10,599,108   $(43,861,665)  $(4,101,460)
                                                        
Warrants issued for services - related parties   -    -    -    -    -    -    -    -    49,370    -    49,370 
                                                        
Warrants issued for services   -    -    -    -    -    -    -    -    7,929    -    7,929 
                                                        
Convertible debt and accrued interest conversion into common stock ($0.045/Sh-$0.064/Sh)   -    -    23,507,693    1,285,781    -    -    -    -    -    -    1,285,781 
                                                        
Imputed interest - related party   -    -    -    -    -    -    -    -    21,708    -    21,708 
                                                        
Net loss for the three months ended June 30, 2022   -    -    -    -    -           -    -    -    -    (1,038,132)   (1,038,132)
                                                        
Balance, June 30, 2022 (Unaudited)   2   $5,217,800    974,412,737   $25,207,078    -   $-    1,122,311   $22,000   $10,678,115   $(44,899,797)  $(3,774,804)

 

  

Preferred Stock -

Series A

  

Common Stock -

Class A

 

Common Stock -

Class B

  

Class A Shares

To be issued

       Accumulated     
   Shares   Par   Shares   Par  Shares   Par   Shares   Par   APIC   Deficit   Total 
Balance, December 31, 2021 (Audited)   2   $5,217,800    927,378,166   $22,385,132              -   $           -    1,122,311   $22,000   $9,894,179   $(42,814,986)  $(5,295,875)
                                                       
Warrants issued for services - related parties   -    -    -    -   -    -    -    -    103,069    -    103,069 
                                                       
Warrants issued for services   -    -    -    -   -    -    -    -    15,771    -    15,771 
                                                       
Exercise of warrants in exchange for cash ($0.06/Sh and $0.08/Sh)   -    -    11,097,959    739,864   -    -    -    -    -    -    739,864 
                                                       
Convertible debt and accrued interest conversion into common stock ($0.045/Sh-$0.064/Sh))   -    -    35,936,612    2,082,082   -    -    -    -    -    -    2,082,082 
                                                       
Imputed interest - related party   -    -    -    -   -    -    -    -    40,093    -    40,093 
                                                       
Beneficial conversion feature   -    -    -    -   -    -    -    -    625,003    -    625,003 
                                                       
Net loss for the six months ended June 30, 2022   -    -    -    -   -    -    -    -    -    (2,084,811)   (2,084,811)
                                                       
Balance, June 30, 2022 (Unaudited)   2   $5,217,800    974,412,737   $25,207,078   -   $-    1,122,311   $22,000   $10,678,115   $(44,899,797)  $(3,774,804)

 

6

 

 

Kraig Biocraft Laboratories, Inc. and Subsidiary

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

   2023   2022 
   For the six months ended June 30, 
         
   2023   2022 
Cash Flows From Operating Activities:          
Net Loss  $(1,155,873)  $(2,084,811)
Adjustments to reconcile net loss to net cash used in operations          
Depreciation expense   12,757    14,721 
Net change in unrealized appreciation and depreciation in gold bullions   (21,581)   5,401 
Change in fair value of marketable securities   13,021    - 
Amortization of debt discount   -    536,701 
Imputed interest - related party   40,093    40,093 
Warrants issued/(cancelled) to consultants   113,968    118,840 
Changes in operating assets and liabilities:          
Decrease in prepaid expenses   13,937    9,453 
Decrease in operating lease right-of-use, net   24,035    22,198 
Increase in accrued expenses and other payables - related party   328,752    182,706 
Decrease in accounts payable   (12,420)   216,060 
Decrease in operating lease liabilities, current   (24,733)   (21,499)
Net Cash Used In Operating Activities   (668,044)   (960,137)
           
           
Cash Flows From Investing Activities          
Purchase of treasury bills   (2,587,811)   - 
Proceeds from maturity of treasury bills   860,000    - 
Net Cash Used in Investing Activities   (1,727,811)   - 
           
Cash Flows From Financing Activities:          
Repayment of notes payable - related party   -    (40,000)
Proceeds from convertible note payable, net of original issue discount   -    2,990,000 
Payment of debt offering costs   -    (230,000)
Principal payments on debt   (30,000)   (30,000)
Proceeds from warrant exercise   -    739,864 
Net Cash Provided by and Used in Financing Activities   (30,000)   3,429,864 
           
Net Change in Cash and Cash Equivalents   (2,425,855)   2,469,727 
           
Cash and Cash Equivalents at Beginning of Period   3,862,716    2,355,060 
           
Cash and Cash Equivalents at End of Period  $1,436,861   $4,824,787 
           
Supplemental disclosure of cash flow information:          
           
Cash paid for interest  $-   $- 
Cash paid for taxes  $-   $- 
           
Supplemental disclosure of non-cash investing and financing activities:          
Shares issued in connection with cashless warrants exercise  $100,000   $- 
Beneficial conversion feature in connection with convertible debt  $-   $625,003 
Shares issued in connection with convertible note payable  $-   $2,082,082 

 

7

 

 

Kraig Biocraft Laboratories, Inc.

Notes to Condensed Consolidated Financial Statements as of June 30, 2023

(Unaudited)

 

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

 

Basis of Presentation

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements (“U.S. GAAP”) and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.

 

In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all of the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2023 and the results of operations and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the operating results for the full fiscal year or any future period.

 

These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 29, 2023.

 

Management acknowledges its responsibility for the preparation of the accompanying unaudited consolidated financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its consolidated financial position and the consolidated results of its operations for the periods presented.

 

On July 15, 2022, the Company signed an agreement with Global Silk Solutions Joint Stock Company (GSS). Under this agreement, GSS will serve as a contract manufacturer for the Company’s recombinant spider silk.

 

Kraig Biocraft Laboratories, Inc. (the “Company”) was incorporated under the laws of the State of Wyoming on April 25, 2006. The Company was organized to develop high strength, protein based fiber, using recombinant DNA technology, for commercial applications in the textile and specialty fiber industries.

 

Kraig Biocraft Laboratories, Inc. (the “Company”) was incorporated under the laws of the State of Wyoming on April 25, 2006. The Company was organized to develop high strength, protein based fiber, using recombinant DNA technology, for commercial applications in the textile and specialty fiber industries.

 

8

 

 

On March 5, 2018, the Company issued a board resolution authorizing investment in a Vietnamese subsidiary and appointing a representative for the subsidiary.

 

On April 24, 2018, the Company announced that it had received its investment registration certificate for its new Vietnamese subsidiary Prodigy Textiles Co., Ltd.

 

On May 1, 2018, the Company announced that it had received its enterprise registration certificate for its new Vietnamese subsidiary Prodigy Textiles Co., Ltd

 

Foreign Currency

 

The assets and liabilities of Prodigy Textiles, Co., Ltd. (the Company’s Vietnamese subsidiary) whose functional currency is the Vietnamese Dong, are translated into US dollars at period-end exchange rates prior to consolidation. Income and expense items are translated at the average rates of exchange prevailing during the period. The adjustments resulting from translating the Company’s financial statements are reflected as a component of other comprehensive (loss) income. Foreign currency transaction gains and losses are recognized in net earnings based on differences between foreign exchange rates on the transaction date and settlement date.

 

Use of Estimates

 

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.

 

Cash and Cash Equivalents

 

Cash and cash equivalents consist of demand deposits at financial institutions, money market funds, and highly liquid investments with original maturities of three months or less.

 

As of June 30, 2023 and December 31, 2022, the Company had $1,436,861 and $3,862,716, in cash and cash equivalent accounts.

 

Loss Per Share

 

Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by the Financial Accounting Standards Board (“FASB” Accounting Standards Codification (“ASC”) No. 260, “Earnings per Share.” For June 30, 2023 and 2022, warrants were not included in the computation of income/ (loss) per share because their inclusion is anti-dilutive.

 

The computation of basic and diluted loss per share for June 30, 2023 and December 31, 2022 excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive:

 

  

June 30,

2023

  

December 31,

2022

 
         
Stock Warrants (Exercise price - $0.001- $0.25/share)   48,460,714    54,660,032 
Stock Options (Exercise price - $0.1150/Share)   26,520,000    26,520,000 
Convertible Preferred Stock   2    2 
Total   74,980,716    81,180,034 

 

9

 

 

Investments

 

The Company has investments Treasury Bills. The Treasury Bills have remaining terms ranging from one month to three months on June 30, 2023.

 

The Company classifies its investments in Treasury Bills as available-for-sale, accounted for at fair value with unrealized gains and losses recognized in other comprehensive gain on the statement of operations and comprehensive loss.

 

The cost and estimated fair value of the Company’s investments are as follows:

 

      Gross    
       unrealized   Fair 
   Cost   gain   value 
December 31, 2022  $-   $-   $- 
Treasury Bills  $1,714,790   $13,021   $1,727,811 
Total Investments, June 30, 2023  $1,714,790   $13,021   $1,727,811 

 

Research and Development Costs

 

The Company expenses all research and development costs as incurred for which there is no alternative future use. These costs also include the expensing of employee compensation and employee stock based compensation.

 

For the three months ended June 30, 2023 and 2022, the Company had $57,035 and $49,869 respectively, in research and development costs.

 

For the six months ended June 30, 2023 and 2022, the Company had $126,127 and $77,373 respectively, in research and development costs

 

Advertising Expense

 

The Company follows the policy of charging the costs of advertising to expense as incurred. There was no advertising expense in the three and six months ended June 30, 2023 and 2022.

 

Income Taxes

 

The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC No. 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC No. 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

Stock-Based Compensation

 

The Company accounts for stock-based compensation for employees and directors in accordance with ASC 718, Compensation (“ASC 718”). ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values. Under the provisions of ASC 718, stock-based compensation costs are measured at the grant date, based on the fair value of the award, and are recognized as expense over the employee’s requisite service period (generally the vesting period of the equity grant). The fair value of the Company’s common stock options are estimated using the Black Scholes option-pricing model with the following assumptions: expected volatility, dividend rate, risk free interest rate and the expected life. The Company expenses stock-based compensation by using the straight-line method. In accordance with ASC 718 and, excess tax benefits realized from the exercise of stock-based awards are classified as cash flows from operating activities. All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income tax expense or benefit in the condensed consolidated statements of operations.

 

10

 

 

The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASU 2018-07.

 

Recent Accounting Pronouncements

 

In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity; Own Equity (“ASU 2020-06”), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. The Company adopted the guidance under ASU 2020-06 on January 1, 2022. The adoption of this guidance and had no material impact on the Company’s financial statements.

 

Equipment

 

The Company values property and equipment at cost and depreciates these assets using the straight-line method over their expected useful life.

 

In accordance with FASB ASC No. 360, Property, Plant and Equipment, the Company carries long-lived assets at the lower of the carrying amount or fair value. Impairment is evaluated by estimating future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected undiscounted future cash flow is less than the carrying amount of the assets, an impairment loss is recognized. Fair value, for purposes of calculating impairment, is measured based on estimated future cash flows, discounted at a market rate of interest.

 

There were no impairment losses recorded for the six months ended June 30, 2023 and 2022.

 

Fair Value of Financial Instruments

 

We hold certain financial assets, which are required to be measured at fair value on a recurring basis in accordance with the Statement of Financial Accounting Standard No. 157, “Fair Value Measurements” (“ASC Topic 820-10”). ASC Topic 820-10 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). ASC Topic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Level 1 instruments include cash and cash equivalents, account receivable, prepaid expenses, inventory and account payable and accrued liabilities. The carrying values are assumed to approximate the fair value due to the short term nature of the instrument.

 

11

 

 

The three levels of the fair value hierarchy under ASC Topic 820-10 are described below:

 

  ● Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. We believe our carrying value of level 1 instruments approximate their fair value at June 30, 2023 and 2022.
     
  ● Level 2 - Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
     
  ● Level 3 - Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We consider depleting assets, asset retirement obligations and net profit interest liability to be Level 3. We determine the fair value of Level 3 assets and liabilities utilizing various inputs, including NYMEX price quotations and contract terms.

 

The following are the major categories of assets measured at fair value on a recurring basis: as of June 30, 2023 and December 31, 2022, using quoted prices in active markets for identical liabilities (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):

 

The Company has consistently applied the valuation techniques in all periods presented. The following table presents the Company’s assets which were measured at fair value at June 30, 2023 and December 31, 2022:

 

   June 30, 2023   December 31, 2022 
   Fair Value Measurement Using   Fair Value Measurement Using 
   Level 1   Level 2   Level 3   Total   Level 1   Level 2   Level 3   Total 
                                 
Assets:                                        
Investment in gold  $458,832   $     -   $     -   $458,832   $437,251   $     -   $     -   $437,251 
Treasury bills   1,727,811    -    -    1,727,811    -    -    -    - 
Money market fund  $1,212,045   $-   $-   $1,212,045   $-   $-   $-   $- 
Total  $3,398,688   $-   $-   $3,398,688   $437,251   $-   $-   $437,251 

 

The Board of Directors, who serves as the Custodian, is responsible for the safekeeping of gold bullion owned by the Company.

 

Fair value of the gold bullion held by the Company is based on that day’s London Bullion Market Association (“LBMA”) Gold Price PM. “LBMA Gold Price PM” is the price per fine troy ounce of gold, stated in U.S. dollars, determined by ICE Benchmark Administration (“IBA”) following an electronic auction consisting of one or more 30-second rounds starting at 3:00 p.m. (London time), on each day that the London gold market is open for business and published shortly thereafter.

 

The fair value of the treasury bills is based on quoted market prices in an active market. The Company has determined the fair value based on financial factors that are considered level 1 inputs in the fair value hierarchy.

 

 

Money market funds included in cash and cash equivalents and U.S. government-backed securities are measured at fair value based on quoted prices in active markets, which are considered Level 1 inputs. The Company’s policy is to recognize transfers in and/or out of the fair value hierarchy as of the date in which the event or change in circumstances caused the transfer.

 

The following tables summarize activity in gold bullion for the six months ended June 30, 2023:

 

Six Months Ended June 30, 2023  Ounces   Cost   Fair Value 
             
Balance December 31, 2022   239   $1,829   $437,251 
Net change in unrealized gain   -    -    21,581 
Balance June 30, 2023   239   $1,920   $458,832 

 

12

 

 

The following tables summarize activity in gold bullion for the six months ended June 30, 2022:

 

Six Months Ended June 30, 2022  Ounces   Cost   Fair Value 
             
Balance December 31, 2021   239   $1,884   $437,212 
Net change in unrealized loss   -    -    (5,401)
Balance June 30, 2022   239   $1,884   $431,811 

 

Revenue Recognition

 

Effective January 1, 2018, the Company adopted ASC No. 606 — Revenue from Contracts with Customers. Under ASC No. 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

 

For the three and six months ended June 30, 2023 and 2022, the Company recognized $0 and $0 respectively in revenue.

 

Concentration of Credit Risk

 

The Company at times has cash and cash equivalents in banks in excess of FDIC insurance limits. At June 30, 2023 and December 31, 2022, the Company had approximately $1,212,045 and $3,285,197, respectively in excess of FDIC insurance limits.

 

On March 12, 2023, the U.S. government took extraordinary steps to stop a potential banking crisis after the historic failure of Silicon Valley Bank, assuring all depositors at the failed institution that they could access all their money quickly, even as another major bank was shut down. The Company had no exposure to a failed bank. The Company averts risks associated with such a crisis by holding minimum cash balances required for uninterrupted operations, federal funds money market fund, and U.S. government-backed securities. As of June 30, 2023, the Company held $1,212,045 million in a federal money market fund (the “Fund”) with an investment objective to seek to provide current income while maintaining liquidity and a stable share price of $1. The Fund invests at least 99.5% of its total assets in cash, U.S. government securities, and/or repurchase agreements that are collateralized solely by U.S. government securities or cash (collectively, government securities). As such it is considered one of the most conservative investment options offered.

 

Original Issue Discount

 

For certain notes issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded as a debt discount, reducing the face amount of the note, and is amortized to amortization of original issue discount in the consolidated statements of operations over the life of the debt.

 

Debt Issue Cost

 

Debt issuance cost paid to lenders, or third parties are recorded as debt discounts and amortized to interest expense in the consolidated statements of operations, over the life of the underlying debt instrument.

 

Deposit

 

During the year ended December 31, 2022, the Company paid $98,480 as a deposit towards the purchase of inventory. As of June 30, 2023, the balance remained at $98,480.

 

NOTE 2 GOING CONCERN

 

As reflected in the accompanying financial statements, the Company has a working capital deficiency of $5,065,774 and stockholders’ deficiency of $4,510,651 and used $668,044 of cash in operations for the six months ended June 30, 2023. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

 

13

 

 

NOTE 3 EQUIPMENT

 

At June 30, 2023 and December 31, 2022, property and equipment, net, is as follows:

 

   June 30,
2023		   December 31,
2022		   Estimated
Useful Lives
(Years)		 
Automobile  $41,805   $41,805    5 
Laboratory Equipment   123,911    123,911    5-10 
Office Equipment   7,260    7,260    5-10 
Leasehold Improvements   82,739    82,739    2-5 
Less: Accumulated Depreciation   (180,611)   (167,854)     
Total Property and Equipment, net  $75,104   $87,861      

 

Depreciation expense for the three months ended June 30, 2023 and 2022, was $6,140 and $7,270, respectively.

 

Depreciation expense for the six months ended June 30, 2023 and 2022, was $12,757 and $14,721, respectively.

 

NOTE 4 - RIGHT TO USE ASSETS AND LEASE LIABILITY

 

We determine if an arrangement is a lease, or contains a lease, at inception and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor.

 

We have a lease agreement with lease and non-lease components and have elected to utilize the practical expedient to account for lease and non-lease components together as a single combined lease component, from both a lessee and lessor perspective with the exception of direct sales-type leases and production equipment classes embedded in supply agreements. From a lessor perspective, the timing and pattern of transfer are the same for the non-lease components and associated lease component and, the lease component, if accounted for separately, would be classified as an operating lease.

 

We have elected not to present short-term leases on the balance sheet as these leases have a lease term of 12 months or less at lease inception and do not contain purchase options or renewal terms that we are reasonably certain to exercise. All other lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because our lease does not provide an implicit rate of return, we used our incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments.

 

In general, leases, where we are the lessee, may include options to extend the lease term. These leases may include options to terminate the lease prior to the end of the agreed upon lease term. For purposes of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise such options.

 

14

 

 

Lease expense for operating leases is recognized on a straight-line basis over the lease term as cost of revenues or operating expenses depending on the nature of the leased asset. Certain operating leases provide for annual increases to lease payments based on an index or rate. We calculate the present value of future lease payments based on the index or rate at the lease commencement date.

 

Differences between the calculated lease payment and actual payment are expensed as incurred. Amortization of finance lease assets is recognized over the lease term as cost of revenues or operating expenses depending on the nature of the leased asset.

 

Interest expense on finance lease liabilities is recognized over the lease term in interest expense.

 

Since September of 2015, we rent office space at 2723 South State Street, Suite 150, Ann Arbor, Michigan 48104, which is our principal place of business. We pay an annual rent of $2,508 for conference facilities, mail, fax, and reception services located at our principal place of business.

 

On September 5, 2019, we signed a two-year lease for a 5,000 square foot property in Lansing, MI that commenced on October 1, 2019 and ends on September 30, 2021, for its research and development headquarters. We pay an annual rent of $42,000 for year one of the lease and will pay $44,800 for year two of the lease. On April 16, 2021, the Company signed a two year amendment to this lease. Commencing on July 1, 2021 and ending on September 30, 2022, the Company paid an annualized rent of $42,000. From October 1, 2022 through September 30, 2023, the Company will pay an annual rent of $44,800. The Company recorded ROU asset of $79,862 and lease liability of $79,862 in accordance with the adoption of the new guidance.

 

On May 9, 2019 the Company signed a 5 year property lease with the Socialist Republic of Vietnam which consists of 4,560.57 square meters of space, which it leases at a current rent of approximately $45,150 per year one and two and with the 5% increase per year for three through five. On July 1, 2021, the Company ended this lease agreement, and the company recovered the associated ROU asset and lease liability of $241,800.

 

On July 1, 2021, the Company signed a 5-year property lease with the Socialist Republic of Vietnam which consists of 6,000 square meters of space, which it leases at a current rent of approximately $8,645 per year.

 

The tables below present information regarding the Company’s operating lease assets and liabilities at June 30, 2023;

 

At June 30, 2023 and December 31, 2022, the Company had no financing leases as defined in ASC 842, “Leases.”

 

  

June 30,

2023

  

December 31,

2022

 
Assets          
           
Operating lease - right-of-use asset - non-current  $34,814   $58,849 
           
Liabilities          
           
Operating lease liability  $35,164   $59,897 
           
Weighted-average remaining lease term (three months)   1.59    2.08 
           
Weighted-average discount rate   8%   8%
           
The components of lease expense were as follows:          
           
Operating lease costs          
           
Amortization of right-of-use operating lease asset  $24,035   $52,043 
Total operating lease costs  $24,035   $52,043 
           
Supplemental cash flow information related to operating leases was as follows:          
           
Operating cash outflows from operating lease (obligation payment)  $24,733   $51,344 
Right-of-use asset obtained in exchange for new operating lease liability  $-   $- 

 

15

 

 

Future minimum lease payments required under leases that have initial or remaining non-cancelable lease terms in excess of one year at June 30, 2023:

 

      
2023  $15,523 
2024   8,644 
2025   8,644 
2026   5,763 
Total lease payments   38,574 
Less: amount representing interest   (3,410)
Total lease obligations   35,164 
Less: current portion of operating lease liability   (18,019)
Long-term portion operating lease liability  $17,145 

 

NOTE 5 NOTE PAYABLE – RELATED PARTY

 

Between June 6, 2016, and December 1, 2020 the Company received a total of $1,657,000 in loans from its founder and CEO. Pursuant to the terms of the loans, the advances bear an interest at 3%, is unsecured, and due on demand. 

 

On January 26, 2022, the Company repaid $40,000 of the outstanding loan to its founder and CEO.

 

Total loan payable to the founder and CEO for as of June 30, 2023 is $1,617,000.

 

Total loan payable to the founder and CEO as of December 31, 2022 is $1,617,000.

 

During the six months ended June 30, 2023, the Company recorded $40,093 as an in-kind contribution of interest related to the loan and recorded accrued interest payable of $27,888. As of June 30, 2023, total interest payable is $218,551.

 

During the six months ended June 30, 2022, the Company recorded $40,093 as an in-kind contribution of interest related to the loan and recorded accrued interest payable of $27,267. As of December 31, 2022, total interest payable is $190,663.

 

 

NOTE 6 LOAN PAYABLE

 

On March 1, 2019, the Company entered into an unsecured promissory note with Notre Dame - an unrelated party in the amount of $265,244 in exchange for outstanding account payable due to the debtor. Pursuant to the terms of the note, the note bears 10% interest per year from the date of default until the date the loan is paid in full. The term of the loan is twenty-four months. The loan repayment commenced immediately over a twenty-four month period according to the following table.

 

1. $1,000 per month for the first nine months;

2. $2,000 per month for the months seven and eight;

3. $5,000 per month for months nine through twenty-three; and,

4. Final payment of all remaining balance, in the amount of $180,224 in month 24.

 

16

 

 

On July 8, 2021, the Company entered into an amendment to the March 1, 2019 agreement. As of the date of the amendment, the remaining outstanding balance was $180,244. The loan repayment commenced immediately following the amendment and extended over a fourteen-month period with the following terms:

 

1. $5,000 per month for months one through thirteen.
2. Final payment of the remaining balance in the amount of $115,244 split into two equal payments, of which $57,622 to be paid in month fourteen and $57,622 paid in month twenty.

 

The Company has continued to make $5,000 monthly payment against this remaining balance in lieu of the balloon payments in months fourteen and twenty. The Company expects to make the final payment on August 1, 2024.

 

During the six months ended June 30, 2023, the Company paid $30,000 of the loan balance. The remaining loan balance as of June 30, 2023 is $65,244.

 

NOTE 7 CONVERTIBLE NOTES

 

On December 11, 2020, the Company issued 3,125,000 five-year (5) warrants. The warrants had a fair value of $2,599,066, based upon using a black-scholes option pricing model with the following inputs:

 

Stock Price   $ 0.14  
Exercise price   $ 0.16  
Expected term (in years)     5  
Expected volatility     60.64 %
Annual rate of quarterly dividends     0 %
Risk free interest rate     0.10 %

 

The Company has determined that ASC 815 does not apply since the Company has unlimited authorized shares, which in turn satisfies the requirement of having sufficient authorized shares available to settle any potential instruments that may require physical net-share settlement.

 

Pursuant to ASC 470, the Company will record a beneficial conversion feature (“BCF”) based upon the relative fair value of the conversion feature within the convertible note and the related warrants. The BCF cannot exceed the face amount of the note, therefore, the discount for this note is $1,000,000, and was recorded on the commitment date. The discount is amortized to amortization of debt discount over the life of the underlying convertible note.

 

The Company also paid $86,000 as a debt issuance cost to a placement agent for services rendered. These costs are considered to be a component of the total debt discount.

 

On March 25, 2021, the Company entered into one year, unsecured, convertible note in the aggregate principal amount of $4,000,000 for which the first convertible debenture for $500,000, a one year, unsecured, convertible note on March 25, 2021, which was due March 25, 2022. The convertible note bore interest at 10%. The note contained a discount to market feature, whereby, the lender could purchase stock at 80% of the lowest trading price for a period of ten (10) days preceding the conversion date. The second convertible debenture of $500,000 was issued on April 6, 2021 and the third convertible debenture of $3,000,000 was issued on April 22, 2021. As of February 16, 2022 these debentures were satisfied.

 

 

Additionally, the Company issued 8,000,000 five-year (5) warrants. The warrants had a fair value of $3,359,716, based upon using a black-scholes option pricing model with the following inputs:

 

Stock Price  $0.15 
Exercise price  $0.25 
Expected term (in years)   5 
Expected volatility   100.76%
Annual rate of quarterly dividends   0%
Risk free interest rate   0.07%

 

17

 

 

The Company has determined that ASC 815 does not apply since the Company has unlimited authorized shares, which in turn satisfies the requirement of having sufficient authorized shares available to settle any potential instruments that may require physical net-share settlement.

 

Pursuant to ASC 470, the Company will record a beneficial conversion feature (“BCF”) based upon the relative fair value of the conversion feature within the convertible note and the related warrants. The BCF cannot exceed the face amount of the note, therefore, the discount for this note is $3,670,000, and was recorded on the commitment date. The discount is amortized to amortization of debt discount over the life of the underlying convertible note.

 

The Company also paid $330,000 as a debt issuance cost to a placement agent for services rendered. These costs are a component of the total debt discount.

 

On January 21, 2022, the Company issued 3,935,417 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $2,260 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On January 31, 2022, the Company issued 4,569,059 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $42,877 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On February 16, 2022, the Company issued 3,924,443 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $1,164 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

The Company issued a $1,500,000, thirteen-month (13), unsecured, convertible note on January 18, 2022, which was due February 18, 2023. The convertible note bore interest at 10%, with an original issue discount ($10,000), resulting in net proceeds of $1,490,000. The note contained a discount to market feature, whereby, the lender could purchase stock at 85% of the lowest trading price for a period of ten (10) days preceding the conversion date. As of October 26, 2022 this debenture was satisfied.

 

Additionally, the Company issued 12,000,000 five-year (5) warrants with an exercise price of $0.12 per share, and 4,285,714 warrants with an exercise price of $0.14 per share during the year ended December 31, 2022. The warrants had a fair value of $1,071,437, based upon using a black-scholes option pricing model with the following inputs:

 

Stock Price   $ 0.08  
Exercise price   $ 0.12 - $ 0.14  
Expected term (in years)     5  
Expected volatility     124.10 %
Annual rate of quarterly dividends     0 %
Risk free interest rate     0.58 %

 

The Company has determined that ASC 815 does not apply since the Company has unlimited authorized shares, which in turn satisfies the requirement of having sufficient authorized shares available to settle any potential instruments that may require physical net-share settlement.

 

In connection with $1,500,000 in note issued, the Company issued 16,785,714 warrants, which are accounted for as debt issue costs, having a fair value of $625,003. The debt issue costs are amortized over the life of the underlying convertible note.

 

The Company also paid $115,000 as a debt issuance cost to a placement agent for services rendered. These costs are considered to be a component of the total debt discount.

 

On April 14, 2022, the Company issued 2,358,380 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $1,644 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

18

 

 

On April 29, 2022, the Company issued 4,272,417 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $5,918 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On May 17, 2022, the Company issued 3,628,325 shares of Common Stock in exchange for conversion of $200,000 of principle balance on a convertible debenture and $5,726 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On June 6, 2022, the Company issued 3,549,793 shares of Common Stock in exchange for conversion of $200,000 of principle balance on a convertible debenture and $5,178 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On June 14, 2022, the Company issued 2,902,922 shares of Common Stock in exchange for conversion of $100,000 of principle balance on a convertible debenture and $60,822 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On June 21, 2022, the Company issued 3,393,979 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $3,068 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On June 30, 2022, the Company issued 3,401,877 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $3,425 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On July 19, 2022, the Company issued 4,364,987 shares of Common Stock in exchange for conversion of $200,000 of principle balance on a convertible debenture and $6,027 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On August 18, 2022, the Company issued 4,325,913 shares of Common Stock in exchange for conversion of $200,000 of principle balance on a convertible debenture and $7,644 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On September 8, 2022, the Company issued 3,396,898 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $4,219 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On September 26, 2022, the Company issued 3,605,259 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $2,863 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On October 11, 2022, the Company issued 2,907,240 shares of Common Stock in exchange for conversion of $100,000 of principle balance on a convertible debenture and $1,753 of accrued interest.

 

On October 18, 2022, the Company issued 4,782,778 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $658 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On October 26, 2022, the Company issued 5,487,951 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $370 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On October 31, 2022, the Company issued 6,510,348 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $28,384 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On November 1, 2022, the Company issued 9,236,212 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $301 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

19

 

 

On November 14, 2022, the Company issued 5,974,335 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $1,151 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On November 17, 2022, the Company issued 5,935,350 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $164 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

The Company issued a $1,500,000, thirteen-month (13), unsecured, convertible note on April 11, 2022, which was due May 11, 2023. The convertible note bore an interest at 10%. The note contained a discount to market feature, whereby, the lender could purchase stock at 85% of the lowest trading price for a period of ten (10) days preceding the conversion date. As of November 17, 2022 this debenture was satisfied.

 

The Company also paid $115,000 as a debt issuance cost to a placement agent for services rendered. These costs are considered to be a component of the total debt discount.

 

As of June 30, 2023, the above three notes were fully converted, with the no remaining balance due.

 

The following represents a summary of the Company’s convertible debt at June 30, 2023:

 

Convertible Note Payable

 

   Amounts 
Balance – December 31, 2021  $503,423 
Proceeds   3,000,000 
Debt discount and issue costs recorded   (865,000)
Conversion of debt into common shares   (3,750,003)
Amortization of debt discount   1,111,580 
Balance – December 31, 2022  $- 
No activity – June 30, 2023   - 
Balance – June 30, 2023  $- 

 

Accrued Interest Payable

 

   Amounts 
Balance – December 31, 2021   31,657 
Interest Expense December 31, 2022   153,955 
Interest conversion into common shares   (185,612)
Balance – December 31, 2022  $- 
No activity – June 30, 2023   - 
Balance – June 30, 2023  $- 

 

NOTE 8 STOCKHOLDERS’ DEFICIT

 

(A) Common Stock Issued for Cash

 

On March 9, 2019, the Company entered into a purchase agreement with one investor (the “Purchase Agreement”). Pursuant to the Purchase Agreement, the Company issued the investor 14,797,278 Units at a purchase price of $0.06758 per Unit, for total gross proceeds to the Company of $1,000,000. The Units consist of 14,797,278 shares of the Company’s Class A Common Stock (the “Common Stock”) and two warrants (the “Warrants”): (i) one warrant entitles the investor to purchase up to 14,797,278 shares of Common Stock at an exercise price of $0.06 per share (the “6 Cent Warrants”) and (ii) one warrant entitles the investor to purchase up to 7,398,639 shares of Common Stock at an exercise price of $0.08 per share (the “8 Cent Warrant”). The Warrants shall be exercisable at any time from the issuance date until the following expiration dates:

 

● ½ of all $0.06 Warrants shall expire on March 8, 2021;
● ½ of all $0.06 Warrants shall expire on March 8, 2022;
● ½ of all $0.08 Warrants shall expire on March 8, 2022; and,
● ½ of all $0.08 Warrants shall expire on March 8, 2023.

 

20

 

 

On March 2, 2021, the Company determined to amend and extend the expiration of the warrants expiring on March 8, 2021 as follows:

 

  ● 1,479,728 shares of all $0.06 Warrants shall expire on March 8, 2021.
  ● 1,479,728 shares of all $0.06 Warrants shall expire on May 8, 2021
  ● 1,479,728 shares of all $0.06 Warrants shall expire on July 8, 2021. On June 24, 2021, the Company determined to amend and extend the expiration of warrants expiring on July 8, 2021, to December 8, 2021.
  ● 1,479,728 shares of all $0.06 Warrants shall expire on September 8, 2021. As of December 31, 2021, the warrants have expired.
  ● 1,479,727 shares of all $0.06 Warrants shall expire on November 8, 2021. As of December 31, 2021, the warrants have expired.

 

On February 15, 2022, the Company issued 7,398,639 shares of Common stock in connection with the exercise of 7,398,639 warrants for $443,918.

 

On February 15, 2022, the Company issued 3,699,320 shares of Common stock in connection with the exercise of 3,699,320 warrants for $295,946.

 

(B) Common Stock Warrants and Options

 

On February 16, 2023, the Company issued 2,434,211 shares of Common Stock in exchange for the cashless exercise of 2,500,000 warrants.

 

On February 15, 2022, the Company issued 7,398,639 shares of Common stock in connection with the exercise of 7,398,639 warrants for $443,918.

 

On February 15, 2022, the Company issued 3,699,320 shares of Common stock in connection with the exercise of 3,699,320 warrants for $295,946.

 

On April 11, 2022, the Company extended the expiration date of the warrant issued on May 28, 2015 to May 27, 2025. No additional expense was recorded due to rate difference being de minimis.

 

On January 25, 2021, the Company issued a 7-year option to purchase 2,500,000 shares of common stock at an exercise price of $0.134 per share to a related party for services rendered. The options had a fair value of $310,165, based upon the Black-Scholes option-pricing model on the date of grant. Options vest 33.3% on the year one anniversary of the grant date, 33.3% will vest on the second anniversary, and 33.3% will vest on the third year anniversary as long as the employee remains with the Company at the end of each successive year for three years. Options will be exercisable on January 25, 2021, and for a period of 7 years expiring on January 25, 2028. During the six months ended June 30, 2023 the Company recorded $46,491 as an expense for options issued.

 

Expected dividends   0%
Expected volatility   133.22%
Expected term   7 years 
Risk free interest rate   1.46%
Expected forfeitures   0%

 

On February 19, 2020 the Company issued a 10-year option to purchase 6,000,000 shares of common stock at an exercise price of $0.115 per share to a related party for services rendered. The options had a fair value of $626,047, based upon the Black-Scholes option-pricing model on the date of grant and 2,000,000 options are fully vested on the date granted and 1,000,000 options vest at the end of each successive year for four years. Options will be exercisable on February 19, 2021, and for a period of 10 years expiring on February 19, 2030. During the six months ended June 30, 2023, the Company recorded $51,706 as an expense for options issued.

 

21

 

 

Expected dividends   0%
Expected volatility   125.19%
Expected term   3 years 
Risk free interest rate   1.50%
Expected forfeitures   0%

 

On February 19, 2020 the Company issued a 7-year option to purchase 1,340,000 shares of common stock at an exercise price of $0.115 per share to employees for services rendered. The options had a fair value of $133,063, based upon the Black-Scholes option-pricing model on the date of grant and 268,000 options are fully vested on the date granted and the remaining option vest equally over the remaining 4 years at the end of each successive year. Options will be exercisable on February 19, 2021, and for a period of 6 years expiring on February 19, 2027. During the six months ended June 30, 2023, the Company recorded $15,771 as an expense for options issued

 

Expected dividends   0%
Expected volatility   125.19%
Expected term   6 years  
Risk free interest rate   1.46%
Expected forfeitures   0%

 

Warrant activity as of June 30, 2023 is summarized as follows:

 

           Weighted     
       Weighted   Average     
       Average   Remaining   Aggregate 
Warrants 

Number of

Warrants

   Exercise
Price		  

Contractual

Term (Years)

  

Intrinsic

Value

 
Outstanding - December 31, 2021   48,972,279   $0.12    2.64   $1,248,452 
Exercisable - December 31, 2021   48,972,279   $0.12    2.64   $1,248,452 
Granted   16,785,714   $0.12    4.05    - 
Exercised   (11,097,959)  $0.07    -    - 
Cancelled/Forfeited   -   $-    -    - 
Outstanding - December 31, 2022   54,660,034   $0.13    3.04   $319,000 
Exercisable - December 31, 2022   54,660,034   $0.13    3.04   $319,000 
Granted   -   $-    -    - 
Exercised   (2,500,000)  $0.001    -    - 
Cancelled/Forfeited   (3,699,320)  $0.08    -    - 
Outstanding – June 30, 2023   48,460,714   $0.14    2.79   $331,500 
Exercisable – June 30, 2023   48,460,714   $0.14    2.79   $331,500 

 

As of June 30, 2023, the following warrants were outstanding:

 

Exercise Price

Warrants Outstanding

  

Warrants

Exercisable

  

Weighted Average

Remaining Contractual Life

  

Aggregate

Intrinsic Value

 
$0.001    8,500,000    2.53   $331,500 
$0.04    2,300,000    3.26   $- 
$0.056    1,000,000    2.02   $- 
$0.2299    8,250,000    1.75   $- 
$0.16    3,125,000    2.45   $- 
$0.25    8,000,000    2.74   $- 
$0.1160    500,000    2.02   $- 
$0.12    12,500,000    3.55   $- 
$0.14    4,285,714    3.55   $- 
      48,460,714        $331,500 

 

22

 

 

For the year ended December 31, 2022, the following warrants were outstanding:

 

Exercise Price

Warrants Outstanding

   Warrants
Exercisable		   Weighted Average
Remaining Contractual Life		   Aggregate
Intrinsic Value		 
$0.001    11,000,000    3.43   $319,000 
$0.04    2,300,000    3.75   $- 
$0.056    1,000,000    2.02   $- 
$0.08    3,699,320    0.18   $- 
$0.2299    8,250,000    2.21   $- 
$0.16    3,125,000    2.95   $- 
$0.25    8,000,000    3.23   $- 
$0.1160    500,000    2.52   $- 
$0.12    12,500,000    4.05   $- 
$0.14    4,285,714    4.05   $- 
      54,660,034        $319,000 

 

Options activity as of June 30, 2023 is summarized as follows:

 

Options 

Number of

Options

  

Weighted

Average

Exercise

Price

  

Weighted

Average

Remaining

Contractual

Term (Years)

  

Aggregate

Intrinsic

Value

 
Outstanding - December 31, 2021   26,802,500   $0.12    19.12   $      - 
Exercisable - December 31, 2021   26,802,500   $0.12    19.12   $- 
Granted   -   $-    -    - 
Exercised   -   $-    -    - 
Cancelled/Forfeited   (282,500)  $0.12    5.00    - 
Outstanding - December 31, 2022   26,520,000   $0.12    18.27   $- 
Granted   -   $-    -    - 
Exercised   -   $-    -    - 
Cancelled/Forfeited   -   $-    -    - 
Outstanding – June 30, 2023   26,520,000   $0.12    17.77   $- 
Exercisable – June 30, 2023   26,520,000   $0.12    17.77   $- 

 

As of June 30, 2023, the following options were outstanding:

 

            Weighted Average 
            Remaining 
Exercise   Options   Options   Contractual Life 
Price   Outstanding   Exercisable   (in Years) 
                  
$0.115         -    26,520,000    17.77 

 

For the year ended December 31, 2022, the following options were outstanding:

 

            Weighted Average 
            Remaining 
Exercise   Options   Options   Contractual Life 
Price   Outstanding   Exercisable   (in Years) 
                  
$0.115          -    26,520,000    18.52 

 

23

 

 

(C) Amendment to Articles of Incorporation

 

On February 16, 2009, the Company amended its articles of incorporation to amend the number and class of shares the Company is authorized to issue as follows:

 

● Common stock Class A, unlimited number of shares authorized, no par value
● Common stock Class B, unlimited number of shares authorized, no par value
● Preferred stock, unlimited number of shares authorized, no par value

 

Effective December 17, 2013, the Company amended its articles of incorporation to designate a Series A no par value preferred stock. Two shares of Series A Preferred stock have been authorized.

 

(D) Common Stock Issued for Debt

 

As of November 17, 2022, the Company has satisfied all debentures to Yorkville Advisors.

 

On November 17, 2022, the Company issued 5,935,350 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $164 of accrued interest.

 

On November 14, 2022, the Company issued 5,974,335 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $1,151 of accrued interest.

 

On November 1, 2022, the Company issued 9,236,212 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $301 of accrued interest.

 

On October 31, 2022, the Company issued 6,510,348 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $28,384 of accrued interest.

 

On October 26, 2022, the Company issued 5,487,951 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $370 of accrued interest.

 

On October 18, 2022, the Company issued 4,782,778 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $658 of accrued interest.

 

On October 11, 2022, the Company issued 2,907,240 shares of Common Stock in exchange for conversion of $100,000 of principle balance on a convertible debenture and $1,753 of accrued interest.

 

On September 26, 2022, the Company issued 3,605,259 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $2,863 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On September 8, 2022, the Company issued 3,396,898 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $4,219 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On August 18, 2022, the Company issued 4,325,913 shares of Common Stock in exchange for conversion of $200,000 of principle balance on a convertible debenture and $7,644 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion

 

On July 19, 2022, the Company issued 4,364,987 shares of Common Stock in exchange for conversion of $200,000 of principle balance on a convertible debenture and $6,027 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On June 30, 2022, the Company issued 3,401,877 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $3,425 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

24

 

 

On June 21, 2022, the Company issued 3,393,979 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $3,068 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On June 14, 2022, the Company issued 2,902,922 shares of Common Stock in exchange for conversion of $100,000 of principle balance on a convertible debenture and $60,822 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On June 6, 2022, the Company issued 3,549,793 shares of Common Stock in exchange for conversion of $200,000 of principle balance on a convertible debenture and $5,178 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On May 17, 2022, the Company issued 3,628,325 shares of Common Stock in exchange for conversion of $200,000 of principle balance on a convertible debenture and $5,726 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On April 14, 2022, the Company issued 2,358,380 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $1,644 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On April 29, 2022, the Company issued 4,272,417 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $5,918 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On February 16, 2022, the Company issued 3,924,443 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $1,164 of accrued interest.

 

On January 21, 2022, the Company issued 3,935,417 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $2,260 of accrued interest.

 

On January 31, 2022, the Company issued 4,569,059 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $42,877 of accrued interest.

 

NOTE 9 COMMITMENTS AND CONTINGENCIES

 

On November 10, 2010, the Company entered into an employment agreement with its CEO, effective January 1, 2011 through the December 31, 2015. The term of the agreement is a five year period at an annual salary of $210,000. There is a 6% annual increase. For the year ending December 31, 2015, the annual salary was $281,027. The employee is also to receive a 20% bonus based on the annual based salary. Any stock, stock options bonuses have to be approved by the board of directors. On January 1, 2016 the agreement was renewed with the same terms for another 5 years with an annual salary of $297,889 for the year ended December 31, 2016. On January 1, 2017, the agreement renewed with the same terms for another 5 years, but with an annual salary of $315,764 for the year ended December 31, 2017. On January 1, 2019 the agreement renewed again with the same terms for another 5 years. On January 1, 2023 the agreement renewed again with the same terms, but with an annual salary of $447,915 for the six months ended June 30, 2023. As of June 30, 2023 and 2022, the accrued salary balance is $3,198,236 and $3,077,393, respectively (See Note 10).

 

On January 20, 2015, the board of directors appointed Mr. Jonathan R. Rice as our Chief Operating Officer. Mr. Rice’s employment agreement has a term of one year and can be terminated by either the Company or Mr. Rice at any time. Under the employment agreement, Mr. Rice is entitled to an annual cash compensation of $120,000, which includes salary, health insurance, 401K retirement plan contributions, etc. The Company also agreed to reimburse Mr. Rice for his past educational expenses of approximately $11,000. In addition, Mr. Rice was issued a three-year warrant to purchase 2,000,000 shares of common stock of the Company at an exercise price of $0.001 per share (the “January 2015 Warrant”) pursuant to the employment agreement. Additionally, on May 28, 2015, the Company issued a three-year warrant to purchase 3,000,000 shares of common stock of the Company at an exercise price of $0.001 per share (the “May 2015 Warrant”) to Mr. Rice. The May 2015 warrant fully vested on October 28, 2016 and will expire on May 28, 2022. For the year ended December 31, 2015, the Company recorded $121,448 for the warrants issued to Mr. Rice. On January 14, 2016, the Company signed a new employment agreement with Mr. Rice. The employment agreement has a term of one year and can be terminated by either the Company or Mr. Rice at any time. Under the employment agreement, Mr. Rice is entitled to annual cash compensation of $140,000, which includes salary, health insurance, 401K retirement plan contributions, etc. In addition, Mr. Rice was issued a three-year warrant to purchase 6,000,000 shares of common stock of the Company at an exercise price of $0.001 per share pursuant to the employment agreement (the “May 2016 Warrant”). The May 2016 warrant fully vested on February 20, 2017 and will expire on May 20, 2026. On January 9, 2018, the Company extended the expiration date of the January 2015 warrant from January 19, 2018 to January 31, 2020, and on January 10, 2020 the Company extended the expiration date of the January 2015 warrant to January 10, 2025 and on March 15, 2018, the Company signed an extension of its at-will employment agreement with its COO, extending the term to January 31, 2019. On March 25, 2019, the Company signed an extension of its at-will employment agreement with its COO, extending the term to January 1, 2020. On March 5, 2021, the Company signed an extension of its at-will employment agreement with its COO, extending the term to January 1, 2022. On February 25, 2022, the Company signed an extension of its at-will employment agreement with its COO, extending the term to January 1, 2023. On August 8, 2019, Mr. Rice was issued a set of three five-year warrants to purchase a total of 6,000,000 shares of common stock of the Company at an exercise price of $0.2299 per share pursuant to the employment agreement. On April 26, 2019, the Company signed an agreement to increase Mr. Rice’s base salary by $20,000 per year and issue a one-time $20,000 bonus. Additionally, on August 15, 2019, the Company signed an agreement to increase Mr. Rice’s base salary by an additional $20,000 per year.

 

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As of June 30, 2023 and December 31, 2022, the Company owes $3,195 and $3,728, respectively, to Mr. Rice for payroll payable.

 

On July 3, 2019, the board of directors appointed Mr. Kenneth Le as the Company’s Director of Government relations and President of Prodigy Textiles. Mr. Le’s employment agreement has a term of one year and can be terminated by either the Company or Mr. Rice at any time. Under the employment agreement, Mr. Le is entitled to annual cash compensation of $60,000. In addition, Mr. Le was issued two three-year warrants to purchase 2,000,000 shares of common stock of the Company at an exercise price of $0.2299 per share. As of June 30, 2023 and December 31, 2022, the accrued salary balance is $1,065 and $1,243, respectively.

 

(A) License Agreement

 

On May 8, 2006, the Company entered into a license agreement. Pursuant to the terms of the agreement, the Company paid a non- refundable license fee of $10,000. The Company will pay a license maintenance fee of $10,000 on the one year anniversary of this agreement and each year thereafter. The Company will pay an annual research fee of $13,700 with first payment due January 2007, then on each subsequent anniversary of the effective date commencing May 4, 2007. The annual research fees are accrued by the Company for future payment. Pursuant to the terms of the agreement the Company may be required to pay additional fees aggregating up to a maximum of $10,000 a year for patent maintenance and prosecution relating to the licensed intellectual property.

 

On October 28, 2011, the Company entered into a license agreement with the University of Notre Dame. Under the agreement, the Company received exclusive and non-exclusive rights to certain spider silk technologies including commercial rights with the right to sublicense such intellectual property. In consideration of the licenses granted under the agreement, the Company agreed to issue to the University of Notre Dame 2,200,000 shares of its common stock and to pay a royalty of 2% of net sales. The license agreement has a term of 20 years which can be extended on an annual basis after that. It can be terminated by the University of Notre Dame if the Company defaults on its obligations under the agreement and fails to cure such default within 90 days of a written notice by the university. The Company can terminate the agreement upon a 90 day written notice subject to payment of a termination fee of $5,000 if the termination takes place within 2 years after its effectiveness, $10,000 if the termination takes place within 4 years after its effectiveness and $20,000 if the Agreement is terminated after 4 years. On May 5, 2017, the Company signed an addendum to that agreement relating to tangible property and project intellectual property. On March 1, 2019, the Company singed an addendum to that agreement. The Company entered into a separate loan agreement and promissory noted dated March 1, 2019 as a payment for expenses paid by the University prior to January 31, 2019 totaling $265,244 and issued 4,025,652 shares of Class A common stock with a fair value of $281,659 as payment of certain debt. In the event of default, the license agreement will be terminated. During the six months ended June 30, 2023, the Company paid $30,000 of the balance (See Notes 6).

 

On December 26, 2006, the Company entered into an addendum to the intellectual property transfer agreement with Mr. Thompson, its CEO. In accordance with FASB ASC No 480, Distinguishing Liabilities from Equity, the Company determined that the present value of the payment of $120,000 that was due on December 26, 2007. As of June 30, 2023 and December 31, 2022, the outstanding balance is $65,292. For the six months ended June 30, 2023, the Company recorded $980 in interest expensed and related accrued interest payable.

 

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(B) Operating Lease Agreements

 

Since September of 2015, we rent office space at 2723 South State Street, Suite 150, Ann Arbor, Michigan 48104, which is our principal place of business. We pay an annual rent of $2,508 for conference facilities, mail, fax, and reception services located at our principal place of business.

 

On May 9, 2019, the Company signed a 5 year property lease with the Socialist Republic of Vietnam which consists of 4,560.57 square meters of space, which it leases at a current rent of approximately $45,150 per year one and two and with the 5% increase per year for years three through five. On July 1, 2021, the Company ended this lease agreement and entered into a new agreement effective July 1, 2021. The Company accounted for the lease in accordance with ASC Topic 842, “Leases”

 

On July 1, 2021, the Company signed a 5 year property lease with the Socialist Republic of Vietnam which consists of 6,000 square meters of space, which it leases at a current rent of approximately $8,645 per year. The Company accounts for the lease in accordance with ASC Topic 842, “Leases”

 

On September 13, 2017, the Company signed a new two year lease with a 2 year option commencing on October 1, 2017 and ending on September 31, 2019. The Company paid an annual rent of $39,200 for the year one of lease and $42,000 for the year two of lease for office and manufacturing space. On September 5, 2019, the Company signed a new two-year lease for this 5,000 square foot property in Lansing, MI that commenced on October 1, 2019 and ended on September 30, 2021, for its research and development headquarters. The Company pays an annual rent of $42,000 for year one of the lease and $44,800 for year two of the lease. On April 16, 2021, the Company signed a two year amendment to this lease. Commencing on July 1, 2021 and ending on September 30, 2022, the Company paid an annualized rent of $42,000. From October 1, 2022 through September 30, 2023, the Company will pay an annual rent of $44,800. The Company accounts for the lease in accordance with ASC Topic 842, “Leases”

 

NOTE 10 RELATED PARTY TRANSACTIONS

 

Accounts payable and accrued expenses – related party consists of the following:

 

   As of   As of 
   June 30, 2023   December 31, 2022 
         
Accounts payable - related party  $367,784   $356,191 
Accrued expenses - related party   3,202,496    3,082,363 
Accrued interest - related party   2,473,480    2,276,454 
           
Total accounts payable and accrued expenses - related party  $6,043,760   $5,715,008 

 

Between June 6, 2016, and December 1, 2020 the Company received a total of $1,657,000 in loans from its founder and CEO. Pursuant to the terms of the loan, the advance bears an interest at 3%, is unsecured, and due on demand. 

 

On January 26, 2022, the Company repaid $40,000 of the outstanding loan to its founder and CEO.

 

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Total loan payable to principal stockholder for as of June 30, 2023 is $1,617,000.

 

Total loan payable to this principal stockholder as of December 31, 2022 is $1,617,000.

 

During the six months ended June 30, 2023, the Company recorded $40,093 as an in-kind contribution of interest related to the loan and recorded accrued interest payable of $27,888. As of June 30, 2023, total interest payable is $218,551.

 

During the six months ended June 30, 2022, the Company recorded $40,093 as an in-kind contribution of interest related to the loan and recorded accrued interest payable of $27,267. As of December 31, 2022, total interest payable is $190,663.

 

As of June 30, 2023, and December 31, 2022, there was $367,784 and $356,191, respectively, included in accounts payable – related party, which is owed to the Company’s Chief Executive Officer for expenses paid on behalf of the Company.

 

As of June 30, 2023, and December 31, 2022, there was $3,202,496 and $3,082,363, respectively, included in accrued expenses – related party, which includes accrued salaries owed to the Company’s senior staff.

 

As of June 30, 2023, and December 31, 2022, there was $2,473,480 and $2,276,454, respectively, included in accrued interest – related party, which includes interest on accrued salary and accrued expenses owed to the Company’s Chief Executive Officer.

 

In aggregate as of June 30, 2023, and December 31, 2022, the Company owed $6,043,760 and $5,715,008, respectively to its related parties in accrued salaries, accrued interest and note payable.

 

As of June 30, 2023 and December 31, 2022, the Company owed $65,292 and $65,292, respectively, in royalty agreement payable to Chief Executive Officer.

 

NOTE 11 SUBSEQUENT EVENTS

 

The Company has analyzed its operations subsequent to August 14, 2023 through the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose.

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

FORWARD-LOOKING INFORMATION

 

The following information should be read in conjunction with Kraig Biocraft Laboratories, Inc. and its subsidiaries (“we”, “us”, “our”, or the “Company”) condensed unaudited financial statements and the notes thereto contained elsewhere in this report. Information in this Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Form 10-Q that does not consist of historical facts, are “forward-looking statements.” Statements accompanied or qualified by, or containing words such as “may,” “will,” “should,” “believes,” “expects,” “intends,” “plans,” “projects,” “estimates,” “predicts,” “potential,” “outlook,” “forecast,” “anticipates,” “presume,” and “assume” constitute forward-looking statements, and as such, are not a guarantee of future performance.

 

Forward-looking statements are subject to risks and uncertainties, certain of which are beyond our control. Actual results could differ materially from those anticipated as a result of the factors described in the “Risk Factors” and detailed in our other Securities and Exchange Commission (“SEC”) filings. Risks and uncertainties can include, among others, international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to obtain sufficient financing to continue and expand business operations; the ability to develop technology and products; changes in technology and the development of technology and intellectual property by competitors; the ability to protect technology and develop intellectual property; and other factors referenced in this and previous filings. Consequently, investors should not place undue reliance on forward-looking statements as predictive of future results.

 

Because of these risks and uncertainties, the forward-looking events and circumstances discussed in this report or incorporated by reference might not transpire. Factors that cause actual results or conditions to differ from those anticipated by these and other forward-looking statements include those more fully described elsewhere in this report and in the “Risk Factors” section of our registration statement on Form S-1.

 

The Company disclaims any obligation to update the forward-looking statements in this report.

 

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Overview

 

Kraig Biocraft Laboratories, Inc. is a corporation organized under the laws of Wyoming on April 25, 2006. Kraig Labs was organized to develop high strength fibers using recombinant DNA technology for commercial applications in technical textile. We use genetically engineered silkworms that produce spider silk proteins to create our recombinant spider silk. Applications include performance apparel, workwear, filtration, luxury fashion, flexible composites, medical implants, cosmetics and more. We believe that we have been a leader in the research and development of commercially scalable and cost effective spider silk for technical textile and non-fibrous applications. Our primary proprietary fiber technology includes natural and engineered variants of spider silk produced in domesticated mulberry silkworms. Our business brings twenty-first century biotechnology to the historical silk industry, permitting us to introduce materials with innovative properties and claims into an established commercial ecosystem of silkworm rearing, silk spinning and weaving, and manufacture of garments and other products that can include our specialty fibers and textiles. Specialty fibers are engineered for specific uses that require exceptional strength, flexibility, heat resistance and/or chemical resistance. The specialty fiber market is exemplified by two synthetic fiber products that come from petroleum derivatives: (1) aramid fibers; and (2) ultra-high molecular weight polyethylene fibers. The technical textile industry involves products for both industrial and consumer products, such as filtration fabrics, medical textiles (e.g., sutures and artificial ligaments), safety and protective clothing and fabrics used in military and aerospace applications (e.g., high-strength composite materials).

 

We are using genetic engineering technologies to develop fibers with greater strength, resiliency and flexibility for use in our target markets, namely the specialty fiber and technical textile industries.

 

In 2020, we developed a new technology platform, based on a non-CRISPR Cas9 gene editing knock-in knock-out technology. This is our first knock-in knock-out technology which we are now using for the development of advanced materials. This system is built on our eco-friendly and cost-effective silkworm production system, which we believe is more advanced than current competing methods. Knock-in knock-out technology allows for the targeting of specific locations and genetic traits for modification, addition, and removal. This capability should allow us to accelerate new product developments and bring products to market more quickly. This capability also allows for genetic trait modifications that were previously impractical, creating opportunities for products outside of silk fibers and increased flexibility in production location.

 

Based on our internal analysis, management believes that this new platform technology will allow us to outpace and surpass Dragon Silk, a fiber that we developed with our previous tools. Samples of Dragon Silk have already demonstrated to be tougher than many fibers used in bullet proof vests. We expect that this new approach will yield materials beyond those capabilities based upon its potential for significantly improved purity.

 

In August 2019, we received authorization from governmental authorities to begin rearing genetically enhanced silkworms at our production facility in Vietnam. In October 2019, the Company delivered the first batch of these silkworms and began operations. These silkworms served as the basis for the commercial expansion of our proprietary silk technology. On November 4, 2019, we reported that we had successfully completed rearing the first batch of its transgenic silkworms at the Quang Nam production factory. Seasonal challenges in late December 2019 slowed production operations and governmental restrictions imposed due to the global COVID pandemic further delayed our operations in 2020. In January of 2021, we received the first shipment of silk from our factory in Vietnam. We believe that we will be able to target metric tons of capacity of our recombinant spider silk fiber per annum from this factory once it reaches maximum utilization. This capacity will allow us to address initial demand for our products and materials for various applications in the protective, performance, and luxury textile markets.

 

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On November 23, 2020, we entered into a Strategic Partnership Agreement (the “SPA”) with Mthemovement Kings Pte Ltd (“Kings”). Kings is an eco-friendly luxury streetwear apparel line, part of the Kings Group of Companies and its affiliated companies. On January 25, 2021, the parties exchanged signatures for an amendment to the Agreement, which amended the procedures for termination of the SPA to only allow for the termination of the SPA by mutual agreement of the Company and Kings following a consultation period of 120 (one hundred and twenty) calendar days or such period as agreed otherwise between the parties (the “Amendment,” together with the SPA, the “Agreement”).

 

Pursuant to the Agreement, the parties formed a joint venture, Spydasilk Enterprises Pte. Ltd., to develop and sell the Company’s spider silk fibers under the new innovative apparel and fashion brand, trade named SpydaSilk™ and potential other trademarks to be announced. All intellectual property related to SpydaSilk™ will be jointly owned by the Company and Kings.

 

The Report of Independent Registered Public Accounting Firm to our financial statements as of December 31, 2022 includes an explanatory paragraph stating that our net loss from operations and net capital deficiency at December 31, 2022 raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Plan of Operations

 

During the next twelve months, we expect to take the following steps in connection with the further development of our business and the implementation of our plan of operations:

 

● We plan to expand our research and development to accelerate our work in creating next generation materials and to improve the robustness of our recombinant spider silk lines. This will involve new selective breed protocols, the creation of new hybrids, and the develop of new transgenics utilizing plasmids that are already in an advanced state of development.
   
● We plan to develop a line of fabrics and apparel under a joint venture with Kings to create a line of fashion wear under Spydasilk Enterprises Pte. Ltd., with trade names including SpydasilkTM, SpydraTM and others.
   
● We plan to continue the expansion of our production capacity at our facilities in Quang Nam, Vietnam.
   
● We plan to overcome the current bottleneck in production by improving the overall robustness of our recombinant spider silk lines through a combination of climate acclimation and implementation of a multiple-strain hybrid breeding program. This program has already been initiated and is being rapidly accelerated.
   
● We plan to accelerate both our microbiology and selective breeding programs, as well as provide more resources for our material testing protocols. We spent approximately $126,000 over the last 6 months on research and development of high strength polymers. In 2023, we are directing our research and development efforts on growing our internal capabilities..
   
●

We will consider buying an established revenue producing company in a compatible business, in order to broaden our financial base and facilitate the commercialization of our products; as of the date hereof, we have not had any formal discussion or entered into any definitive agreements regarding any such purchase.

 

● We will also actively consider pursuing collaborative research opportunities with private laboratories in areas of research which overlap the company’s existing research and development. One such potential area for collaborative research which the company is considering is protein expression platforms. If our financing allows, management will strongly consider increasing the breadth of our research to include protein expression platform technologies.

 

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● We plan to actively pursue collaborative research and product testing opportunities with companies in the biotechnology, materials, textile and other industries.
   
● We plan to actively pursue additional collaborative commercialization, marketing and manufacturing opportunities with companies in the textile and material sectors for the fibers we developed and for any new polymers that we create in 2023 and going forward.
   
● We plan to actively pursue the development of commercial scale production of our recombinant materials including Monster Silk®, Dragon SilkTM, SpydasilkTM, and SpydraTM.

 

Limited Operating History

 

We have not previously demonstrated that we will be able to expand our business through an increased investment in our research and development efforts. We cannot guarantee that the research and development efforts described in this filing will be successful. Our business is subject to risks inherent in growing an enterprise, including limited capital resources, risks inherent in the research and development process and possible rejection of our products in development.

 

If financing is not available on satisfactory terms, we may be unable to continue our research and development and other operations. Equity financing will result in dilution to existing stockholders.

 

Impact of COVID-19 Outbreak

 

On January 30, 2020, the World Health Organization declared the coronavirus outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared it to be a pandemic. Actions taken around the world relating to coronavirus include restrictions on travel, quarantines in certain areas, and forced closures for certain types of public places and businesses. Governmental actions taken relating to coronavirus are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While the closures and limitations on movement, domestically and internationally, are expected to be temporary, if these actions continue, the duration of the supply chain disruption could reduce the availability or result in delays, of materials or supplies to and from the Company, which in turn could materially interrupt the Company’s business operations. Given the speed and frequency of the continuously evolving developments with respect to this pandemic, the Company cannot reasonably estimate the magnitude of the impact to its consolidated results of operations. We have taken every known and reasonable precaution possible to ensure the safety of our employees.

 

On March 19, 2020, we furloughed non-essential staff in response to governmental regulations relating to COVID. This decision primarily impacted staff at our fully owned subsidiary, Prodigy Textiles, in Vietnam and resulted in the temporary closing of silk rearing operations at that facility. As of the date hereof, we have resumed silk production operations at the factory in Vietnam. The Company supported its furloughed staff and paid their salaries during all mandatory closures. During the duration of the furlough, the Company’s CEO voluntarily waved the payment or accrual of his salary. The Company leveraged this forced closure time to improve its production infrastructure based on the lessons learned from its operations. After the mandated closure, the Company has enhanced its production operations with process automation, moved its production headquarters to a facility designed for silk production, created a more self-reliant supply chain, and established a microbiology laboratory in its factory for enhanced quality control. On October 24, 2020, silk production operations at the factory resumed.

 

The actions of governments in response to COVID, both domestic and foreign, impacted our ability to transport goods, people, essential equipment, and other items essential to our production. In turn, these restrictions are impacting our ability to produce intermediate and end products and are delaying our timelines for commercialization and revenue. 

 

Additionally, it is reasonably possible that estimates made in the financial statements have been, or will be, materially and adversely impacted in the near term as a result of these conditions, including losses on inventory; impairment losses related to goodwill and other long-lived assets and current obligations.

 

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Three months ended June 30, 2023 compared to the three months ended June  30, 2022

 

Our revenue, operating expenses, and net loss from operations for the three month period ended June 30, 2023 as compared to the three month period ended June 30, 2022, were as follows – some balances on the prior period’s combined financial statements have been reclassified to conform to the current period presentation:

 

   Three Months Ended       % Change 
   June 30,       Increase  
   2023    2022   Change   (Decrease) 
NET REVENUES  $-   $-    -    - 
OPERATING EXPENSES:                    
General and Administrative   220,667    212,419    8,248    3.88%
Professional Fees   31,349    109,534    (78,185)   -71.38%
Officer’s Salary   171,625    164,845    6,780    4.11%
Research and Development   57,035    49,869    7,166    14.37%
Total operating expenses   480,676    536,667    (55,991)   -10.43%
Loss from operations   (480,676)   (536,667)   55,991    -10.43%
Interest expense   (119,282)   (298,444)   179,162    -60.03%
Amortization of debt issue costs   -    (174,669)   174,669    -100.00%
Net change in unrealized appreciation on investment in gold bullion   (11,771)   (28,352)   16,581    -58.48%
Interest income   22,638    -    22,638    100.00%
Net Loss  $(589,091)  $(1,038,132)   449,041    -43.25%

 

Net Revenues: During the three months ended June 30, 2023, we realized $0 of revenues from our business. During the three months ended June 30, 2022, we realized $0 of revenues from our business. The change in revenues between the quarter ended June 30, 2023 and 2022 was $0 or 0%.

 

Cost of Revenues: Costs of revenues for the three months ended June 30, 2023 were $0, as compared to $0 for the three months ended June 30, 2022, a change of $0 or 0%.

 

Gross Profit: During the three months ended June 30, 2023, we realized a gross profit of $0, as compared to $0 for the three months ended June 30, 2022, a change of $0 or 0%.

 

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Research and development expenses: During the three months ended June 30, 2023, we incurred $57,035 of research and development expenses. During the three months ended June 30, 2022, we incurred $49,869 of research and development expenses. This was an increase of $7,166 or 14.37% in 2023 compared with the same period in 2022. This increase was due to an increase in research spending.

 

Professional Fees: During the three months ended June 30, 2023, we incurred $31,349 of professional expenses, which decreased by $78,185 or 71.38% from $109,534 for the three months ended June 30, 2022. This decrease was primarily due to a decrease in professional fees and in investor relations services.

 

Officers Salary: During the three months ended June 30, 2023, officers’ salary expenses decreased to $171,625 or 4.11% from $164,845 for the three months ended June 30, 2022. This change was primarily due to a 6% annual increase for the Company’s CEO for the three months ended June 30, 2022.

 

General and Administrative Expense: General and administrative expenses increased by $8,248 or 3.88% to $220,667 for the three months ended June 30, 2023 from $212,419 for the three months ended June 30, 2022. Our general and administrative expenses for the three months ended June 30, 2023 consisted of other general and administrative expenses (which includes expenses such as auto, business development, SEC filings, investor relations, general office, warrants and shares issued for services) of $141,500, travel of $4,376, and office salary of $74,791 for a total of $220,667. Our general and administrative expenses for the six months ended June 30, 2022, consisted of other general and administrative expenses (which includes expenses such as auto, business development, SEC filings, investor relations, general office, warrants and shares issued for services) of $23,797, travel of $12,388, consulting $30,000 and office salary of $146,234 for a total of $212,419.

 

Net Change in Unrealized Depreciation on Investment in Gold Bullion: Net change in unrealized appreciation on investment in gold bullion increased by $16,581 to $11,771 for the three-month period ended June 30, 2023 from $28,352 for the three month period ended June 30, 2022. The increase was primarily due to a net change in unrealized appreciation on investment in gold bullion.

 

Interest Expense: Interest expense decreased by $179,162 to $119,282 for the three-month period ended June 30, 2023 from $298,444 for the three month period ended June 30, 2022. The decrease was primarily due to interest on certain Company loans.

 

Amortization of original issue and debt discounts: Amortization of original issue and debt discount decreased to $0, or 0% for the three months ended June 30, 2023 compared to $174,669 for the three months ended June 30, 2022. The decrease was primarily due to amortization of original issue and debt discounts on convertible loans.

 

Net Loss: Net loss decreased by $449,041, or 43.25%, to a net loss of $589,091 for the three-month period ended June 30, 2023 from a net loss of $1,038,132 for the three month period ended June 30, 2022. This decrease in net loss was primarily attributable to decreases in amortization of original issue debt discount, warrant expense, professional fees and general and administrative expenses and offset by an increase in research and development fees.

 

 

Six months ended June 30, 2023 compared to the six months ended June 30, 2022

 

Our revenue, operating expenses, and net loss from operations for the six month period ended June 30, 2023 as compared to the six month period ended June 30, 2022, were as follows – some balances on the prior period’s combined financial statements have been reclassified to conform to the current period presentation:

 

   Six Months Ended       % Change 
   June 30,       Increase  
   2023   2022   Change   (Decrease) 
NET REVENUES  $-   $-    -    - 
OPERATING EXPENSES:                    
General and Administrative   431,770    425,438    6,332    1.49%
Professional Fees   66,096    229,914    (163,818)   -71.25%
Officer’s Salary   343,249    349,653    (6,404)   -1.83%
Research and Development   126,127    77,373    48,754    63.01%
Total operating expenses   967,242    1,082,378    (115,136)   -10.64%
Loss from operations   (967,242)   (1,082,378)   115,136    -10.64%
Interest expense   (237,119)   (460,331)   223,212    -48.49%
Amortization of debt issue costs   -    (536,701)   536,701    -100.00%
Net change in unrealized appreciation on investment in gold bullion   21,581    (5,401)   26,982    -499.57%
Interest income   26,907    -    26,907    100.00%
Net Loss  $(1,155,873)  $(2,084,811)   928,938    -44.56%

 

34

 

 

Net Revenues: During the six months ended June 30, 2023, we realized $0 of revenues from our business. During the six months ended June 30, 2022, we realized $0 of revenues from our business. The change in revenues between the quarter ended June 30, 2023 and 2022 was $0 or 0%.

 

Cost of Revenues: Costs of revenues for the six months ended June 30, 2023 were $0, as compared to $0 for the six months ended June 30, 2022, a change of $0 or 0%.

 

Gross Profit: During the six months ended June 30, 2023, we realized a gross profit of $0, as compared to $0 for the six months ended June 30, 2022, a change of $0 or 0%.

 

Research and development expenses: During the six months ended June 30, 2023, we incurred $126,127 of research and development expenses. During the six months ended June 30, 2022, we incurred $77,373 of research and development expenses. This was an increase of $48,754 or 63.01% in 2023 compared with the same period in 2022. This increase was due to an increase in research spending.

 

Professional Fees: During the six months ended June 30, 2023, we incurred $66,096 of professional expenses, which decreased by $163,818 or 71.25% from $229,914 for the six months ended June 30, 2022. This decrease was primarily due to a decrease in professional fees and in investor relations services.

 

Officers Salary: During the six months ended June 30, 2023, officers’ salary expenses decreased to $343,249 or 1.83% from $349,653 for the six months ended June 30, 2022. This change was primarily due to a 6% annual increase for the Company’s CEO and offset by a bonus paid to the Company’s COO for the six months ended June 30, 2022.

 

General and Administrative Expense: General and administrative expenses increased by $6,332 or 1.49% to $431,770 for the six months ended June 30, 2023 from $425,438 for the six months ended June 30, 2022. Our general and administrative expenses for the six months ended June 30, 2023 consisted of other general and administrative expenses (which includes expenses such as auto, business development, SEC filings, investor relations, general office, warrants and shares issued for services) of $273,997, travel of $12,168, and office salary of $145,605 for a total of $431,770. Our general and administrative expenses for the six months ended June 30, 2022 consisted of other general and administrative expenses (which includes expenses such as auto, business development, SEC filings, investor relations, general office, warrants and shares issued for services) of $139,687, travel of $15,389, consulting $60,000 and office salary of $210,362 for a total of $425,438.

 

35

 

 

Net Change in Unrealized Depreciation on Investment in Gold Bullion: Net change in unrealized appreciation on investment in gold bullion increased by $26,982 to $21,581 for the six-month period ended June 30, 2023 from $5,401 for the six month period ended June 30, 2022. The increase was primarily due to a net change in unrealized appreciation on investment in gold bullion.

 

Interest Expense: Interest expense decreased by $223,212 to $237,119 for the six-month period ended June 30, 2023 from $460,331 for the six month period ended June 30, 2022. The decrease was primarily due to interest on certain Company loans.

 

Amortization of original issue and debt discounts: Amortization of original issue and debt discount decreased to $0, or 0% for the six months ended June 30, 2023 compared to $536,701 for the six months ended June 30, 2022. The decrease was primarily due to amortization of original issue and debt discounts on convertible loans.

 

Net Loss: Net loss decreased by $928,938, or 47.31%, to a net loss of $1,155,873 for the six-month period ended June 30, 2023 from a net loss of $2,084,811 for the six month period ended June 30, 2022. This decrease in net loss was primarily attributable to decreases in amortization of original issue debt discount, warrant expense, professional fees and general and administrative expenses and offset by an increase in research and development fees.

 

Capital Resources and Liquidity

 

Our financial statements have been presented on the basis that are a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As presented in the unaudited condensed financial statements, we incurred a net loss of $1,098,575 during the six months ended June 30, 2023, and losses are expected to continue in the near term. The accumulated deficit is $47,755,575 at June 30, 2023. Refer to Note 2 for our discussion of stockholder deficit. We have been funding our operations through private loans and the sale of common stock in private placement transactions. Refer to Note 6 and Note 7 in the financial statements for our discussion of notes payable and shares issued, respectively. Our cash resources are insufficient to meet our planned business objectives without additional financing. These and other factors raise substantial doubt about our ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of our company to continue as a going concern.

 

Management anticipates that significant additional expenditures will be necessary to develop and expand our business before significant positive operating cash flows can be achieved. Our ability to continue as a going concern is dependent upon our ability to raise additional capital and to ultimately achieve sustainable revenues and profitable operations. At June 30, 2023, we had 1,436,861 of cash and cash equivalents on hand. These funds are insufficient to complete our business plan and as a consequence, we will need to seek additional funds, primarily through the issuance of debt or equity securities for cash to operate our business. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in the case of equity financing.

 

Management has undertaken steps as part of a plan to improve operations with the goal of sustaining our operations for the next twelve months and beyond. These steps include (a) raising additional capital and/or obtaining financing; (b) controlling overhead and expenses; and (c) executing material sales or research contracts. There can be no assurance that the Company can successfully accomplish these steps and it is uncertain that the Company will achieve a profitable level of operations and obtain additional financing. There can be no assurance that any additional financing will be available to the Company on satisfactory terms and conditions, if at all. As of the date of this Report, we have not entered into any formal agreements regarding the above.

 

In the event the Company is unable to continue as a going concern, the Company may elect or be required to seek protection from its creditors by filing a voluntary petition in bankruptcy or may be subject to an involuntary petition in bankruptcy. To date, management has not considered this alternative, nor does management view it as a likely occurrence.

 

36

 

 

Cash and cash equivalents, total current assets, total assets, total current liabilities and total liabilities as of June 30, 2023 as compared to December 31, 2022, were as follows:

 

  

June 30,

2023

  

December 31,

2022

 
Cash and cash equivalents  $1,436,861   $3,862,716 
Investment in U.S. Treasury Bills at fair value (cost: $1,714,790 and $0)  $1,727,811   $- 
Inventory  $6,580   $6,580 
Prepaid expenses  $1,728   $15,665 
Deposits  $98,480   $98,480 
Total current assets  $3,271,460   $3,983,441 
Total assets  $3,843,728   $4,570,920 
Total current liabilities  $8,337,234   $8,072,083 
Total liabilities  $8,354,379   $8,092,780 

 

At June 30, 2023, we had a working capital deficit of $5,065,774 compared to a working capital deficit of $4,088,642 at December 31, 2022. Current liabilities increased to $8,337,234 at June 30, 2023 from $8,072,083 at December 31, 2022, primarily as a result of accounts payable – related party.

 

For the six months ended June 30, 2023, net cash used in operations of $668,044 was the result of a net loss of $1,142,852 offset by depreciation expense of $12,757, net change in unrealized depreciation in gold bullions of $21,581, warrants issuance of $113,968, imputed interest on related party loans of $40,093, decrease in prepaid expenses of $13,937, decrease in operating lease right of use of $24,035, an increase of accrued expenses and other payables-related party of $328,752, decrease in accounts payable of $12,420 and a decrease in operating lease liabilities of $24,733.

 

For the six months ended June 30, 2022, net cash used in operations of $960,137 was the result of a net loss of $2,084,811 offset by depreciation expense of $14,721, net change in unrealized depreciation in gold bullions of $5,401, amortization of debt discount of $536,701, warrants issuance of $118,840, imputed interest on related party loans of $40,093, decrease in prepaid expenses of $9,453 and a decrease in operating lease right of use of $22,198, an increase of accrued expenses and other payables-related party of $182,706, increase in accounts payable of $216,060 and a decrease in operating lease liabilities of $21,499.

 

Net cash used in our investing activities were $1,727,811 and $0 for the six months ended June 30, 2023 and June 30, 2022, respectively. During the six months ended June 30, 2023, the Company had net purchases of treasury bills of $2,587,811 and net proceeds from maturities of treasury bills of $860,000.

 

Our financing activities resulted in a cash outflow of $30,000 for the six months ended June 30, 2023 is represented loan repayment.

 

Our financing activities resulted in a cash inflow of $3,429,864 for the six months ended June 30, 2022 is represented by proceeds from convertible notes payable, net of $2,990,000, repayment of notes payable – related party of $40,000, $30,000 loan repayment, payment of debt offering costs of $230,000, and proceeds from a warrant exercise for $739,864.

 

Critical Accounting Policies

 

Please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2022, for disclosures regarding the Company’s critical accounting policies and estimates, as well as updates further disclosed in our interim financial statements as described in this Form 10-Q.

 

37

 

 

Recent Accounting Pronouncements

 

In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity; Own Equity (“ASU 2020-06”), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. The Company adopted the guidance under ASU 2020-06 on January 1, 2022. The adoption of this guidance and had no material impact on the Company’s financial statements.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

Not applicable.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

As of the end of our fiscal quarter ended June 30, 2023, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon those evaluations, management concluded that our disclosure controls and procedures were not effective as of June 30, 2023, to cause the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods prescribed by SEC, and that such information is accumulated and communicated to management, including our chief executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

 

Going forward from this filing, the Company intends to work on establishing and maintaining disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

 

In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based, in part, upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

Changes in Internal Control over Financial Reporting

 

During the quarter covered by this Report, there were no changes in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. Although we continue to educate our management personnel to increase its ability to comply with the disclosure requirements and financial reporting controls and management oversight of accounting and reporting functions in the future, as we stated in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, we do not expect to remediate the weaknesses in our internal controls over financial reporting until the time when we start to commercialize a recombinant fiber or such time as we have sufficient cash flow to carry out our remediation plans.

 

38

 

 

Part II – Other Information

 

Item 1. Legal Proceedings

 

From time to time, the Company may become a party to litigation or other legal proceedings that it considers to be a part of the ordinary course of its business. To the best of our knowledge, the Company is not currently involved in any legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations; however, the Company may become involved in material legal proceedings in the future.

 

Item 1A. Risk Factors

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this item. A description of risk factors can be found on our registration statement on Form S-1 located through the SEC EDGAR system or on the company website www.kraiglabs.com/sec-filings/. Information contained on, or that can be accessed through, our website does not constitute a part of this report.

 

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

 

We have not sold any equity securities during the period covered by this Report that were not registered under the Securities Act of 1933, as amended.

 

Item 3. Defaults upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

(a) Not applicable.
(b) None.

 

ITEM 6. EXHIBITS

 

EXHIBIT INDEX

 

Exhibit No.   Description
3.1   Articles of Incorporation (1)
3.2   Articles of Amendment (2)
3.3   Articles of Amendment, filed with the Wyoming Secretary of State on November 15, 2013 (3)
3.4   Articles of Amendment, filed with the Wyoming Secretary of State on December 17, 2013 (4)
3.5   Bylaws(1)
4.1   Form of Warrant issued Mr. Jonathan R. Rice (5)
4.2   Form of Warrant issued pursuant to that certain Purchase Agreement dated as of March 8, 2019 (7)
4.3   Form of Convertible Debenture (8)
4.4   Form of Warrant(8)
4.5   Form of A&R Convertible Debenture(8)
10.1   Employment Agreement between Mr. Jonathan Rice and the Company (6)
10.2   Form of Purchase Agreement dated March 8, 2019 (7)
10.3   Form of Securities Purchase Agreement(8)

 

39

 

 

10.4   Form of Guaranty Agreement(8)
10.5   Form of Security Agreement(8)
10.6   Form of IP Security Agreement(8)
10.7   Form of Registration Rights Agreement(8)
10.8   Strategic Partnership Agreement (portions of the exhibit have been omitted because they (i) are not material and (ii) would likely cause competitive harm to the Registrant if publicly disclosed)(9)
10.9   Amendment (portions of the exhibit have been omitted because they (i) are not material and (ii) would likely cause competitive harm to the Registrant if publicly disclosed)(9)
31.1   Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
31.2   Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
32.1   Certification of the Principal Executive Officer pursuant to U.S.C. Section 1350 As adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
32.2   Certification of the Principal Financial Officer pursuant to U.S.C. Section 1350 As adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
101.INS   Inline XBRL Instance Document (filed herewith)
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 (embedded within the Inline XBRL document)

 

1. Incorporated by reference to our Registration Statement on Form SB-2 (Reg. No. 333-146316) filed with the SEC on September 26, 2007.
2. Incorporated by reference to our Registration Statement on Form S-1 (Reg. No. 333-162316) filed with the SEC on October 2, 2009.
3. Incorporated by reference to our Current Report on Form 8-K filed with the SEC on November 22, 2013.
4. Incorporated by reference to our Current Report on Form 8-K filed with the SEC on December 19, 2013.
5. Incorporated by reference to our Annual Report on Form 10-K filed with the SEC on March 22, 2017.
6. Incorporated by reference to our Current Report on Form 8-K filed with the SEC on January 21, 2015.
7. Incorporated by reference to our Current Report on Form 8-K filed with the SEC on March 11, 2019.
8. Incorporated by reference to our Current Report on Form 8-K filed with the SEC on March 26, 2021.
9. Incorporated by reference to our Current Report on Form 8-K filed with the SEC on January 26, 2021.

 

40

 

 

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 of the undersigned thereunto duly authorized.

 

  Kraig Biocraft Laboratories, Inc.
  (Registrant)
     
Date: August 14, 2023 By: /s/ Kim Thompson
    Kim Thompson
    President, Chief Executive Officer and
    Chief Financial Officer (Principal Executive Officer and
    Principal Financial and Accounting Officer)

 

41

 

 

EXHIBIT 31.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO EXCHANGE ACT RULE 13A-14(A) OR RULE 15D-14(A), AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Kim Thompson, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2023, of Kraig Biocraft Laboratories, Inc.;
   
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 report;
   
4 The registrant’s other certifying officer 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 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 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:

 

  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.

 

Date: August 14, 2023 By: /s/ Kim Thompson
    Kim Thompson
    Chief Executive Officer
    (Principal Executive Officer)

 

 

 

 

EXHIBIT 31.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO EXCHANGE ACT RULE 13A-14(A), AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Kim Thompson, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2023, of Kraig Biocraft Laboratories, Inc.;
   
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 report;
   
4 The registrant’s other certifying officer 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 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 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:

 

  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.

 

Date: August 14, 2023 By: /s/ Kim Thompson
      Kim Thompson
      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

 

I, Kim Thompson, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

 

  1. The Quarterly Report on Form 10-Q of Kraig Biocraft Laboratories, Inc. (the “Company”) for the period ended June 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (U.S.C. 78m or 78o(d)); and
     
  2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: August 14, 2023 By: /s/ Kim Thompson
      Kim Thompson
      Chief Executive Officer
      (Principal Executive Officer)

 

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.

 

 

 

 

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

 

I, Kim Thompson, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

 

  1. The Quarterly Report on Form 10-Q of Kraig Biocraft Laboratories, Inc. (the “Company”) for the period ended June 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (U.S.C. 78m or 78o(d)); and
     
  2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: August 14, 2023 By: /s/ Kim Thompson
      Kim Thompson
     

Chief Financial Officer

(Principal Financial and Accounting Officer)

 

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.

 

 

 

v3.23.2
Cover - shares
 6 Months Ended
Jun. 30, 2023
Aug. 14, 2023
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 000-56232  
Entity Registrant Name KRAIG BIOCRAFT LABORATORIES, INC.  
Entity Central Index Key 0001413119  
Entity Tax Identification Number 83-0459707  
Entity Incorporation, State or Country Code WY  
Entity Address, Address Line One 2723 South State St. Suite 150  
Entity Address, City or Town Ann Arbor  
Entity Address, State or Province MI  
Entity Address, Postal Zip Code 48104  
City Area Code (734)  
Local Phone Number 619-8066  
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  
Common Class A [Member]    
Entity Common Stock, Shares Outstanding   1,033,374,219
Common Class B [Member]    
Entity Common Stock, Shares Outstanding   0
v3.23.2
Condensed Consolidated Balance Sheets - USD ($)
Jun. 30, 2023
Dec. 31, 2022
Current Assets    
Cash and cash equivalents $ 1,436,861 $ 3,862,716
Investment in U.S. Treasury Bills at fair value (cost: $1,714,790 and $0) 1,727,811
Inventory 6,580 6,580
Prepaid expenses 1,728 15,665
Deposit 98,480 98,480
Total Current Assets 3,271,460 3,983,441
Property and Equipment, net 75,104 87,861
Investment in gold bullions (cost $450,216 and $450,216, respectively) 458,832 437,251
Operating lease right-of-use asset, net 34,814 58,849
Security deposit 3,518 3,518
Total Assets 3,843,728 4,570,920
Current Liabilities    
Accounts payable and accrued expenses 527,919 540,339
Operating lease liability, current 18,019 39,200
Loan payable 65,244 95,244
Total Current Liabilities 8,337,234 8,072,083
Long Term Liabilities    
Operating lease liability, net of current 17,145 20,697
Total Liabilities 8,354,379 8,092,780
Commitments and Contingencies (Note 9)
Stockholders’ Deficit    
Preferred stock value
Common stock value
Common Stock Issuable, 1,122,311 and 1,122,311 shares, respectively 22,000 22,000
Additional paid-in capital 10,888,790 10,834,729
Accumulated Other comprehensive income 13,021
Accumulated Deficit (47,812,873) (46,657,000)
Total Stockholders’ Deficit (4,510,651) (3,521,860)
Total Liabilities and Stockholders’ Deficit 3,843,728 4,570,920
Series A Preferred Stock [Member]    
Stockholders’ Deficit    
Preferred stock value 5,217,800 5,217,800
Common Class A [Member]    
Stockholders’ Deficit    
Common stock value 27,160,611 27,060,611
Common Class B [Member]    
Stockholders’ Deficit    
Common stock value
Related Party [Member]    
Current Liabilities    
Note payable - related party 1,617,000 1,617,000
Royalty agreement payable - related party 65,292 65,292
Accounts payable and accrued expenses - related party $ 6,043,760 $ 5,715,008
v3.23.2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
Investment owned, at cost $ 1,714,790 $ (0)
Preferred stock, no par value $ 0 $ 0
Preferred stock, shares authorized Unlimited Unlimited
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock issuable 1,122,311 1,122,311
Series A Preferred Stock [Member]    
Preferred stock, no par value $ 0 $ 0
Preferred stock, shares issued 2 2
Preferred stock, shares outstanding 2 2
Common Class A [Member]    
Common stock, no par value $ 0 $ 0
Common stock, shares authorized Unlimited Unlimited
Common stock, shares issued 1,033,374,219 1,030,940,008
Common stock, shares outstanding 1,033,374,219 1,030,940,008
Common Class B [Member]    
Common stock, no par value $ 0 $ 0
Common stock, shares authorized Unlimited Unlimited
Common stock, shares issued 0 0
Common stock, shares outstanding 0 0
Investment in Gold [Member]    
Investment owned, at cost $ 450,216 $ 450,216
US Treasury Securities [Member]    
Investment owned, at cost $ 1,714,790 $ 0
v3.23.2
Condensed Consolidated Statements of Operations and Comprehensive loss (Unaudited) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Income Statement [Abstract]        
Revenue
Operating Expenses        
General and Administrative 220,667 212,419 431,770 425,438
Professional Fees 31,349 109,534 66,096 229,914
Officer’s Salary 171,625 164,845 343,249 349,653
Research and Development 57,035 49,869 126,127 77,373
Total Operating Expenses 480,676 536,667 967,242 1,082,378
Loss from Operations (480,676) (536,667) (967,242) (1,082,378)
Other Income/(Expenses)        
Net change in unrealized gain (loss) on investment in gold bullion (11,771) (28,352) 21,581 (5,401)
Interest expense (119,282) (298,444) (237,119) (460,331)
Amortization of debt issue costs (174,669) (536,701)
Interest income 22,638 26,907
Total Other Income/(Expenses) (108,415) (501,465) (188,631) (1,002,433)
Net (Loss) before Provision for Income Taxes (589,091) (1,038,132) (1,155,873) (2,084,811)
Provision for Income Taxes
Net (Loss) (589,091) (1,038,132) (1,155,873) (2,084,811)
Other Comprehensive Income        
Change in unrealized value of available-for-sale securities, net of income tax 13,021 13,021
Total Comprehensive Loss $ (576,070) $ (1,038,132) $ (1,142,852) $ (2,084,811)
Net Income (Loss) Per Share - Basic $ (0.00) $ (0.00) $ (0.00) $ (0.00)
Net Income (Loss) Per Share - Diluted $ (0.00) $ (0.00) $ (0.00) $ (0.00)
Weighted average number of shares outstanding during the period - Basic 1,033,374,219 955,149,900 1,032,728,682 949,454,169
Weighted average number of shares outstanding during the period - Diluted 1,033,374,219 955,149,900 1,032,728,682 949,454,169
v3.23.2
Condensed Consolidated Statement of Changes in Stockholders Deficit (Unaudited) - USD ($)
Series A Preferred Stock [Member]
Preferred Stock [Member]
Common Class A Stock [Member]
Common Stock [Member]
Common Class B Stock[Member]
Common Stock [Member]
Class A Shares To Be Issued [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
AOCI Attributable to Parent [Member]
Retained Earnings [Member]
Total
Balance at Dec. 31, 2021 $ 5,217,800 $ 22,385,132 $ 22,000 $ 9,894,179   $ (42,814,986) $ (5,295,875)
Beginning balance, shares at Dec. 31, 2021 2 927,378,166 1,122,311        
Warrants issued for services - related parties 103,069   103,069
Warrants issued for services 15,771   15,771
Imputed interest - related party 40,093   40,093
Net loss   (2,084,811) (2,084,811)
Convertible debt and accrued interest conversion into common stock ($0.045/Sh-$0.064/Sh)) $ 2,082,082   2,082,082
Convertible debt and accrued interest conversion into common stock ($0.045/Sh-$0.064/Sh)), shares   35,936,612            
Exercise of warrants in exchange for cash ($0.06/Sh and $0.08/Sh) $ 739,864   739,864
Exercise of warrants in exchange for cash ($0.06/Sh and $0.08/Sh), shares   11,097,959            
Beneficial conversion feature 625,003   625,003
Balance at Jun. 30, 2022 $ 5,217,800 $ 25,207,078 $ 22,000 10,678,115   (44,899,797) (3,774,804)
Ending balance, shares at Jun. 30, 2022 2 974,412,737 1,122,311        
Balance at Mar. 31, 2022 $ 5,217,800 $ 23,921,297 $ 22,000 10,599,108   (43,861,665) (4,101,460)
Beginning balance, shares at Mar. 31, 2022 2 950,905,044 1,122,311        
Warrants issued for services - related parties 49,370   49,370
Warrants issued for services 7,929   7,929
Imputed interest - related party 21,708   21,708
Net loss   (1,038,132) (1,038,132)
Convertible debt and accrued interest conversion into common stock ($0.045/Sh-$0.064/Sh)) $ 1,285,781   1,285,781
Convertible debt and accrued interest conversion into common stock ($0.045/Sh-$0.064/Sh)), shares   23,507,693            
Balance at Jun. 30, 2022 $ 5,217,800 $ 25,207,078 $ 22,000 10,678,115   (44,899,797) (3,774,804)
Ending balance, shares at Jun. 30, 2022 2 974,412,737 1,122,311        
Balance at Dec. 31, 2022 $ 5,217,800 $ 27,060,611 $ 22,000 10,834,729 (46,657,000) (3,521,860)
Beginning balance, shares at Dec. 31, 2022 2 1,030,940,008 1,122,311        
Warrants issued for services - related parties 98,197 98,197
Warrants issued for services 15,771 15,771
Imputed interest - related party 40,093 40,093
Other comprehensive income 13,021 13,021
Net loss (1,155,873) (1,155,873)
Shares issued in connection with cashless warrants exercise $ 100,000 (100,000)
Shares issued in connection with cashless warrants exercise, shares   2,434,211            
Balance at Jun. 30, 2023 $ 5,217,800 $ 27,160,611 $ 22,000 10,888,790 13,021 (47,812,873) (4,510,651)
Ending balance, shares at Jun. 30, 2023 2 1,033,374,219 1,122,311        
Balance at Mar. 31, 2023 $ 5,217,800 $ 27,160,611 $ 22,000 10,786,149 (47,223,782) (4,037,222)
Beginning balance, shares at Mar. 31, 2023 2 1,033,374,219 1,122,311        
Warrants issued for services - related parties 80,997 80,997
Warrants issued for services 1,487 1,487
Imputed interest - related party 20,157 20,157
Other comprehensive income 13,021 13,021
Net loss (589,091) (589,091)
Balance at Jun. 30, 2023 $ 5,217,800 $ 27,160,611 $ 22,000 $ 10,888,790 $ 13,021 $ (47,812,873) $ (4,510,651)
Ending balance, shares at Jun. 30, 2023 2 1,033,374,219 1,122,311        
v3.23.2
Condensed Consolidated Statement of Changes in Stockholders Deficit (Unaudited) (Parenthetical)
Jun. 30, 2022
$ / shares
Minimum [Member]  
Conversion price per share $ 0.045
Warrant exercise price 0.06
Maximum [Member]  
Conversion price per share 0.064
Warrant exercise price $ 0.08
v3.23.2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
 3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
Cash Flows From Operating Activities:          
Net Loss $ (589,091) $ (1,038,132) $ (1,155,873) $ (2,084,811)  
Adjustments to reconcile net loss to net cash used in operations          
Depreciation expense 6,140 7,270 12,757 14,721  
Net change in unrealized appreciation and depreciation in gold bullions     (21,581) 5,401  
Change in fair value of marketable securities     13,021 $ 0
Amortization of debt discount 174,669 536,701  
Imputed interest - related party     40,093 40,093  
Warrants issued/(cancelled) to consultants     113,968 118,840  
Changes in operating assets and liabilities:          
Decrease in prepaid expenses     13,937 9,453  
Decrease in operating lease right-of-use, net     24,035 22,198  
Increase in accrued expenses and other payables - related party     328,752 182,706  
Decrease in accounts payable     (12,420) 216,060  
Decrease in operating lease liabilities, current     (24,733) (21,499)  
Net Cash Used In Operating Activities     (668,044) (960,137)  
Cash Flows From Investing Activities          
Purchase of treasury bills     (2,587,811)  
Proceeds from maturity of treasury bills     860,000  
Net Cash Used in Investing Activities     (1,727,811)  
Cash Flows From Financing Activities:          
Repayment of notes payable - related party     (40,000)  
Proceeds from convertible note payable, net of original issue discount     2,990,000  
Payment of debt offering costs     (230,000)  
Principal payments on debt     (30,000) (30,000)  
Proceeds from warrant exercise     739,864  
Net Cash Provided by and Used in Financing Activities     (30,000) 3,429,864  
Net Change in Cash and Cash Equivalents     (2,425,855) 2,469,727  
Cash and Cash Equivalents at Beginning of Period     3,862,716 2,355,060 2,355,060
Cash and Cash Equivalents at End of Period $ 1,436,861 $ 4,824,787 1,436,861 4,824,787 $ 3,862,716
Supplemental disclosure of cash flow information:          
Cash paid for interest      
Cash paid for taxes      
Supplemental disclosure of non-cash investing and financing activities:          
Shares issued in connection with cashless warrants exercise     100,000  
Beneficial conversion feature in connection with convertible debt     625,003  
Shares issued in connection with convertible note payable     $ 2,082,082  
v3.23.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
 6 Months Ended
Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

 

Basis of Presentation

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements (“U.S. GAAP”) and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.

 

In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all of the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2023 and the results of operations and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the operating results for the full fiscal year or any future period.

 

These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 29, 2023.

 

Management acknowledges its responsibility for the preparation of the accompanying unaudited consolidated financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its consolidated financial position and the consolidated results of its operations for the periods presented.

 

On July 15, 2022, the Company signed an agreement with Global Silk Solutions Joint Stock Company (GSS). Under this agreement, GSS will serve as a contract manufacturer for the Company’s recombinant spider silk.

 

Kraig Biocraft Laboratories, Inc. (the “Company”) was incorporated under the laws of the State of Wyoming on April 25, 2006. The Company was organized to develop high strength, protein based fiber, using recombinant DNA technology, for commercial applications in the textile and specialty fiber industries.

 

Kraig Biocraft Laboratories, Inc. (the “Company”) was incorporated under the laws of the State of Wyoming on April 25, 2006. The Company was organized to develop high strength, protein based fiber, using recombinant DNA technology, for commercial applications in the textile and specialty fiber industries.

 

 

On March 5, 2018, the Company issued a board resolution authorizing investment in a Vietnamese subsidiary and appointing a representative for the subsidiary.

 

On April 24, 2018, the Company announced that it had received its investment registration certificate for its new Vietnamese subsidiary Prodigy Textiles Co., Ltd.

 

On May 1, 2018, the Company announced that it had received its enterprise registration certificate for its new Vietnamese subsidiary Prodigy Textiles Co., Ltd

 

Foreign Currency

 

The assets and liabilities of Prodigy Textiles, Co., Ltd. (the Company’s Vietnamese subsidiary) whose functional currency is the Vietnamese Dong, are translated into US dollars at period-end exchange rates prior to consolidation. Income and expense items are translated at the average rates of exchange prevailing during the period. The adjustments resulting from translating the Company’s financial statements are reflected as a component of other comprehensive (loss) income. Foreign currency transaction gains and losses are recognized in net earnings based on differences between foreign exchange rates on the transaction date and settlement date.

 

Use of Estimates

 

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.

 

Cash and Cash Equivalents

 

Cash and cash equivalents consist of demand deposits at financial institutions, money market funds, and highly liquid investments with original maturities of three months or less.

 

As of June 30, 2023 and December 31, 2022, the Company had $1,436,861 and $3,862,716, in cash and cash equivalent accounts.

 

Loss Per Share

 

Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by the Financial Accounting Standards Board (“FASB” Accounting Standards Codification (“ASC”) No. 260, “Earnings per Share.” For June 30, 2023 and 2022, warrants were not included in the computation of income/ (loss) per share because their inclusion is anti-dilutive.

 

The computation of basic and diluted loss per share for June 30, 2023 and December 31, 2022 excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive:

 

  

June 30,

2023

  

December 31,

2022

 
         
Stock Warrants (Exercise price - $0.001- $0.25/share)   48,460,714    54,660,032 
Stock Options (Exercise price - $0.1150/Share)   26,520,000    26,520,000 
Convertible Preferred Stock   2    2 
Total   74,980,716    81,180,034 

 

 

Investments

 

The Company has investments Treasury Bills. The Treasury Bills have remaining terms ranging from one month to three months on June 30, 2023.

 

The Company classifies its investments in Treasury Bills as available-for-sale, accounted for at fair value with unrealized gains and losses recognized in other comprehensive gain on the statement of operations and comprehensive loss.

 

The cost and estimated fair value of the Company’s investments are as follows:

 

      Gross    
       unrealized   Fair 
   Cost   gain   value 
December 31, 2022  $-   $-   $- 
Treasury Bills  $1,714,790   $13,021   $1,727,811 
Total Investments, June 30, 2023  $1,714,790   $13,021   $1,727,811 

 

Research and Development Costs

 

The Company expenses all research and development costs as incurred for which there is no alternative future use. These costs also include the expensing of employee compensation and employee stock based compensation.

 

For the three months ended June 30, 2023 and 2022, the Company had $57,035 and $49,869 respectively, in research and development costs.

 

For the six months ended June 30, 2023 and 2022, the Company had $126,127 and $77,373 respectively, in research and development costs

 

Advertising Expense

 

The Company follows the policy of charging the costs of advertising to expense as incurred. There was no advertising expense in the three and six months ended June 30, 2023 and 2022.

 

Income Taxes

 

The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC No. 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC No. 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

Stock-Based Compensation

 

The Company accounts for stock-based compensation for employees and directors in accordance with ASC 718, Compensation (“ASC 718”). ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values. Under the provisions of ASC 718, stock-based compensation costs are measured at the grant date, based on the fair value of the award, and are recognized as expense over the employee’s requisite service period (generally the vesting period of the equity grant). The fair value of the Company’s common stock options are estimated using the Black Scholes option-pricing model with the following assumptions: expected volatility, dividend rate, risk free interest rate and the expected life. The Company expenses stock-based compensation by using the straight-line method. In accordance with ASC 718 and, excess tax benefits realized from the exercise of stock-based awards are classified as cash flows from operating activities. All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income tax expense or benefit in the condensed consolidated statements of operations.

 

 

The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASU 2018-07.

 

Recent Accounting Pronouncements

 

In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity; Own Equity (“ASU 2020-06”), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. The Company adopted the guidance under ASU 2020-06 on January 1, 2022. The adoption of this guidance and had no material impact on the Company’s financial statements.

 

Equipment

 

The Company values property and equipment at cost and depreciates these assets using the straight-line method over their expected useful life.

 

In accordance with FASB ASC No. 360, Property, Plant and Equipment, the Company carries long-lived assets at the lower of the carrying amount or fair value. Impairment is evaluated by estimating future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected undiscounted future cash flow is less than the carrying amount of the assets, an impairment loss is recognized. Fair value, for purposes of calculating impairment, is measured based on estimated future cash flows, discounted at a market rate of interest.

 

There were no impairment losses recorded for the six months ended June 30, 2023 and 2022.

 

Fair Value of Financial Instruments

 

We hold certain financial assets, which are required to be measured at fair value on a recurring basis in accordance with the Statement of Financial Accounting Standard No. 157, “Fair Value Measurements” (“ASC Topic 820-10”). ASC Topic 820-10 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). ASC Topic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Level 1 instruments include cash and cash equivalents, account receivable, prepaid expenses, inventory and account payable and accrued liabilities. The carrying values are assumed to approximate the fair value due to the short term nature of the instrument.

 

 

The three levels of the fair value hierarchy under ASC Topic 820-10 are described below:

 

  ● Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. We believe our carrying value of level 1 instruments approximate their fair value at June 30, 2023 and 2022.
     
  ● Level 2 - Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
     
  ● Level 3 - Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We consider depleting assets, asset retirement obligations and net profit interest liability to be Level 3. We determine the fair value of Level 3 assets and liabilities utilizing various inputs, including NYMEX price quotations and contract terms.

 

The following are the major categories of assets measured at fair value on a recurring basis: as of June 30, 2023 and December 31, 2022, using quoted prices in active markets for identical liabilities (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):

 

The Company has consistently applied the valuation techniques in all periods presented. The following table presents the Company’s assets which were measured at fair value at June 30, 2023 and December 31, 2022:

 

   June 30, 2023   December 31, 2022 
   Fair Value Measurement Using   Fair Value Measurement Using 
   Level 1   Level 2   Level 3   Total   Level 1   Level 2   Level 3   Total 
                                 
Assets:                                        
Investment in gold  $458,832   $     -   $     -   $458,832   $437,251   $     -   $     -   $437,251 
Treasury bills   1,727,811    -    -    1,727,811    -    -    -    - 
Money market fund  $1,212,045   $-   $-   $1,212,045   $-   $-   $-   $- 
Total  $3,398,688   $-   $-   $3,398,688   $437,251   $-   $-   $437,251 

 

The Board of Directors, who serves as the Custodian, is responsible for the safekeeping of gold bullion owned by the Company.

 

Fair value of the gold bullion held by the Company is based on that day’s London Bullion Market Association (“LBMA”) Gold Price PM. “LBMA Gold Price PM” is the price per fine troy ounce of gold, stated in U.S. dollars, determined by ICE Benchmark Administration (“IBA”) following an electronic auction consisting of one or more 30-second rounds starting at 3:00 p.m. (London time), on each day that the London gold market is open for business and published shortly thereafter.

 

The fair value of the treasury bills is based on quoted market prices in an active market. The Company has determined the fair value based on financial factors that are considered level 1 inputs in the fair value hierarchy.

 

 

Money market funds included in cash and cash equivalents and U.S. government-backed securities are measured at fair value based on quoted prices in active markets, which are considered Level 1 inputs. The Company’s policy is to recognize transfers in and/or out of the fair value hierarchy as of the date in which the event or change in circumstances caused the transfer.

 

The following tables summarize activity in gold bullion for the six months ended June 30, 2023:

 

Six Months Ended June 30, 2023  Ounces   Cost   Fair Value 
             
Balance December 31, 2022   239   $1,829   $437,251 
Net change in unrealized gain   -    -    21,581 
Balance June 30, 2023   239   $1,920   $458,832 

 

 

The following tables summarize activity in gold bullion for the six months ended June 30, 2022:

 

Six Months Ended June 30, 2022  Ounces   Cost   Fair Value 
             
Balance December 31, 2021   239   $1,884   $437,212 
Net change in unrealized loss   -    -    (5,401)
Balance June 30, 2022   239   $1,884   $431,811 

 

Revenue Recognition

 

Effective January 1, 2018, the Company adopted ASC No. 606 — Revenue from Contracts with Customers. Under ASC No. 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

 

For the three and six months ended June 30, 2023 and 2022, the Company recognized $0 and $0 respectively in revenue.

 

Concentration of Credit Risk

 

The Company at times has cash and cash equivalents in banks in excess of FDIC insurance limits. At June 30, 2023 and December 31, 2022, the Company had approximately $1,212,045 and $3,285,197, respectively in excess of FDIC insurance limits.

 

On March 12, 2023, the U.S. government took extraordinary steps to stop a potential banking crisis after the historic failure of Silicon Valley Bank, assuring all depositors at the failed institution that they could access all their money quickly, even as another major bank was shut down. The Company had no exposure to a failed bank. The Company averts risks associated with such a crisis by holding minimum cash balances required for uninterrupted operations, federal funds money market fund, and U.S. government-backed securities. As of June 30, 2023, the Company held $1,212,045 million in a federal money market fund (the “Fund”) with an investment objective to seek to provide current income while maintaining liquidity and a stable share price of $1. The Fund invests at least 99.5% of its total assets in cash, U.S. government securities, and/or repurchase agreements that are collateralized solely by U.S. government securities or cash (collectively, government securities). As such it is considered one of the most conservative investment options offered.

 

Original Issue Discount

 

For certain notes issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded as a debt discount, reducing the face amount of the note, and is amortized to amortization of original issue discount in the consolidated statements of operations over the life of the debt.

 

Debt Issue Cost

 

Debt issuance cost paid to lenders, or third parties are recorded as debt discounts and amortized to interest expense in the consolidated statements of operations, over the life of the underlying debt instrument.

 

Deposit

 

During the year ended December 31, 2022, the Company paid $98,480 as a deposit towards the purchase of inventory. As of June 30, 2023, the balance remained at $98,480.

 
v3.23.2
GOING CONCERN
 6 Months Ended
Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
GOING CONCERN

NOTE 2 GOING CONCERN

 

As reflected in the accompanying financial statements, the Company has a working capital deficiency of $5,065,774 and stockholders’ deficiency of $4,510,651 and used $668,044 of cash in operations for the six months ended June 30, 2023. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

 

 
v3.23.2
EQUIPMENT
 6 Months Ended
Jun. 30, 2023
Property, Plant and Equipment [Abstract]  
EQUIPMENT

NOTE 3 EQUIPMENT

 

At June 30, 2023 and December 31, 2022, property and equipment, net, is as follows:

 

   June 30,
2023		   December 31,
2022		   Estimated
Useful Lives
(Years)		 
Automobile  $41,805   $41,805    5 
Laboratory Equipment   123,911    123,911    5-10 
Office Equipment   7,260    7,260    5-10 
Leasehold Improvements   82,739    82,739    2-5 
Less: Accumulated Depreciation   (180,611)   (167,854)     
Total Property and Equipment, net  $75,104   $87,861      

 

Depreciation expense for the three months ended June 30, 2023 and 2022, was $6,140 and $7,270, respectively.

 

Depreciation expense for the six months ended June 30, 2023 and 2022, was $12,757 and $14,721, respectively.

 
v3.23.2
RIGHT TO USE ASSETS AND LEASE LIABILITY
 6 Months Ended
Jun. 30, 2023
Right To Use Assets And Lease Liability  
RIGHT TO USE ASSETS AND LEASE LIABILITY

NOTE 4 - RIGHT TO USE ASSETS AND LEASE LIABILITY

 

We determine if an arrangement is a lease, or contains a lease, at inception and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor.

 

We have a lease agreement with lease and non-lease components and have elected to utilize the practical expedient to account for lease and non-lease components together as a single combined lease component, from both a lessee and lessor perspective with the exception of direct sales-type leases and production equipment classes embedded in supply agreements. From a lessor perspective, the timing and pattern of transfer are the same for the non-lease components and associated lease component and, the lease component, if accounted for separately, would be classified as an operating lease.

 

We have elected not to present short-term leases on the balance sheet as these leases have a lease term of 12 months or less at lease inception and do not contain purchase options or renewal terms that we are reasonably certain to exercise. All other lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because our lease does not provide an implicit rate of return, we used our incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments.

 

In general, leases, where we are the lessee, may include options to extend the lease term. These leases may include options to terminate the lease prior to the end of the agreed upon lease term. For purposes of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise such options.

 

 

Lease expense for operating leases is recognized on a straight-line basis over the lease term as cost of revenues or operating expenses depending on the nature of the leased asset. Certain operating leases provide for annual increases to lease payments based on an index or rate. We calculate the present value of future lease payments based on the index or rate at the lease commencement date.

 

Differences between the calculated lease payment and actual payment are expensed as incurred. Amortization of finance lease assets is recognized over the lease term as cost of revenues or operating expenses depending on the nature of the leased asset.

 

Interest expense on finance lease liabilities is recognized over the lease term in interest expense.

 

Since September of 2015, we rent office space at 2723 South State Street, Suite 150, Ann Arbor, Michigan 48104, which is our principal place of business. We pay an annual rent of $2,508 for conference facilities, mail, fax, and reception services located at our principal place of business.

 

On September 5, 2019, we signed a two-year lease for a 5,000 square foot property in Lansing, MI that commenced on October 1, 2019 and ends on September 30, 2021, for its research and development headquarters. We pay an annual rent of $42,000 for year one of the lease and will pay $44,800 for year two of the lease. On April 16, 2021, the Company signed a two year amendment to this lease. Commencing on July 1, 2021 and ending on September 30, 2022, the Company paid an annualized rent of $42,000. From October 1, 2022 through September 30, 2023, the Company will pay an annual rent of $44,800. The Company recorded ROU asset of $79,862 and lease liability of $79,862 in accordance with the adoption of the new guidance.

 

On May 9, 2019 the Company signed a 5 year property lease with the Socialist Republic of Vietnam which consists of 4,560.57 square meters of space, which it leases at a current rent of approximately $45,150 per year one and two and with the 5% increase per year for three through five. On July 1, 2021, the Company ended this lease agreement, and the company recovered the associated ROU asset and lease liability of $241,800.

 

On July 1, 2021, the Company signed a 5-year property lease with the Socialist Republic of Vietnam which consists of 6,000 square meters of space, which it leases at a current rent of approximately $8,645 per year.

 

The tables below present information regarding the Company’s operating lease assets and liabilities at June 30, 2023;

 

At June 30, 2023 and December 31, 2022, the Company had no financing leases as defined in ASC 842, “Leases.”

 

  

June 30,

2023

  

December 31,

2022

 
Assets          
           
Operating lease - right-of-use asset - non-current  $34,814   $58,849 
           
Liabilities          
           
Operating lease liability  $35,164   $59,897 
           
Weighted-average remaining lease term (three months)   1.59    2.08 
           
Weighted-average discount rate   8%   8%
           
The components of lease expense were as follows:          
           
Operating lease costs          
           
Amortization of right-of-use operating lease asset  $24,035   $52,043 
Total operating lease costs  $24,035   $52,043 
           
Supplemental cash flow information related to operating leases was as follows:          
           
Operating cash outflows from operating lease (obligation payment)  $24,733   $51,344 
Right-of-use asset obtained in exchange for new operating lease liability  $-   $- 

 

 

Future minimum lease payments required under leases that have initial or remaining non-cancelable lease terms in excess of one year at June 30, 2023:

 

      
2023  $15,523 
2024   8,644 
2025   8,644 
2026   5,763 
Total lease payments   38,574 
Less: amount representing interest   (3,410)
Total lease obligations   35,164 
Less: current portion of operating lease liability   (18,019)
Long-term portion operating lease liability  $17,145 

 
v3.23.2
NOTE PAYABLE – RELATED PARTY
 6 Months Ended
Jun. 30, 2023
Note Payable Related Party  
NOTE PAYABLE – RELATED PARTY

NOTE 5 NOTE PAYABLE – RELATED PARTY

 

Between June 6, 2016, and December 1, 2020 the Company received a total of $1,657,000 in loans from its founder and CEO. Pursuant to the terms of the loans, the advances bear an interest at 3%, is unsecured, and due on demand. 

 

On January 26, 2022, the Company repaid $40,000 of the outstanding loan to its founder and CEO.

 

Total loan payable to the founder and CEO for as of June 30, 2023 is $1,617,000.

 

Total loan payable to the founder and CEO as of December 31, 2022 is $1,617,000.

 

During the six months ended June 30, 2023, the Company recorded $40,093 as an in-kind contribution of interest related to the loan and recorded accrued interest payable of $27,888. As of June 30, 2023, total interest payable is $218,551.

 

During the six months ended June 30, 2022, the Company recorded $40,093 as an in-kind contribution of interest related to the loan and recorded accrued interest payable of $27,267. As of December 31, 2022, total interest payable is $190,663.

 

 
v3.23.2
LOAN PAYABLE
 6 Months Ended
Jun. 30, 2023
Debt Disclosure [Abstract]  
LOAN PAYABLE

NOTE 6 LOAN PAYABLE

 

On March 1, 2019, the Company entered into an unsecured promissory note with Notre Dame - an unrelated party in the amount of $265,244 in exchange for outstanding account payable due to the debtor. Pursuant to the terms of the note, the note bears 10% interest per year from the date of default until the date the loan is paid in full. The term of the loan is twenty-four months. The loan repayment commenced immediately over a twenty-four month period according to the following table.

 

1. $1,000 per month for the first nine months;

2. $2,000 per month for the months seven and eight;

3. $5,000 per month for months nine through twenty-three; and,

4. Final payment of all remaining balance, in the amount of $180,224 in month 24.

 

 

On July 8, 2021, the Company entered into an amendment to the March 1, 2019 agreement. As of the date of the amendment, the remaining outstanding balance was $180,244. The loan repayment commenced immediately following the amendment and extended over a fourteen-month period with the following terms:

 

1. $5,000 per month for months one through thirteen.
2. Final payment of the remaining balance in the amount of $115,244 split into two equal payments, of which $57,622 to be paid in month fourteen and $57,622 paid in month twenty.

 

The Company has continued to make $5,000 monthly payment against this remaining balance in lieu of the balloon payments in months fourteen and twenty. The Company expects to make the final payment on August 1, 2024.

 

During the six months ended June 30, 2023, the Company paid $30,000 of the loan balance. The remaining loan balance as of June 30, 2023 is $65,244.

 
v3.23.2
CONVERTIBLE NOTES
 6 Months Ended
Jun. 30, 2023
Convertible Notes  
CONVERTIBLE NOTES

NOTE 7 CONVERTIBLE NOTES

 

On December 11, 2020, the Company issued 3,125,000 five-year (5) warrants. The warrants had a fair value of $2,599,066, based upon using a black-scholes option pricing model with the following inputs:

 

Stock Price   $ 0.14  
Exercise price   $ 0.16  
Expected term (in years)     5  
Expected volatility     60.64 %
Annual rate of quarterly dividends     0 %
Risk free interest rate     0.10 %

 

The Company has determined that ASC 815 does not apply since the Company has unlimited authorized shares, which in turn satisfies the requirement of having sufficient authorized shares available to settle any potential instruments that may require physical net-share settlement.

 

Pursuant to ASC 470, the Company will record a beneficial conversion feature (“BCF”) based upon the relative fair value of the conversion feature within the convertible note and the related warrants. The BCF cannot exceed the face amount of the note, therefore, the discount for this note is $1,000,000, and was recorded on the commitment date. The discount is amortized to amortization of debt discount over the life of the underlying convertible note.

 

The Company also paid $86,000 as a debt issuance cost to a placement agent for services rendered. These costs are considered to be a component of the total debt discount.

 

On March 25, 2021, the Company entered into one year, unsecured, convertible note in the aggregate principal amount of $4,000,000 for which the first convertible debenture for $500,000, a one year, unsecured, convertible note on March 25, 2021, which was due March 25, 2022. The convertible note bore interest at 10%. The note contained a discount to market feature, whereby, the lender could purchase stock at 80% of the lowest trading price for a period of ten (10) days preceding the conversion date. The second convertible debenture of $500,000 was issued on April 6, 2021 and the third convertible debenture of $3,000,000 was issued on April 22, 2021. As of February 16, 2022 these debentures were satisfied.

 

 

Additionally, the Company issued 8,000,000 five-year (5) warrants. The warrants had a fair value of $3,359,716, based upon using a black-scholes option pricing model with the following inputs:

 

Stock Price  $0.15 
Exercise price  $0.25 
Expected term (in years)   5 
Expected volatility   100.76%
Annual rate of quarterly dividends   0%
Risk free interest rate   0.07%

 

 

The Company has determined that ASC 815 does not apply since the Company has unlimited authorized shares, which in turn satisfies the requirement of having sufficient authorized shares available to settle any potential instruments that may require physical net-share settlement.

 

Pursuant to ASC 470, the Company will record a beneficial conversion feature (“BCF”) based upon the relative fair value of the conversion feature within the convertible note and the related warrants. The BCF cannot exceed the face amount of the note, therefore, the discount for this note is $3,670,000, and was recorded on the commitment date. The discount is amortized to amortization of debt discount over the life of the underlying convertible note.

 

The Company also paid $330,000 as a debt issuance cost to a placement agent for services rendered. These costs are a component of the total debt discount.

 

On January 21, 2022, the Company issued 3,935,417 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $2,260 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On January 31, 2022, the Company issued 4,569,059 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $42,877 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On February 16, 2022, the Company issued 3,924,443 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $1,164 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

The Company issued a $1,500,000, thirteen-month (13), unsecured, convertible note on January 18, 2022, which was due February 18, 2023. The convertible note bore interest at 10%, with an original issue discount ($10,000), resulting in net proceeds of $1,490,000. The note contained a discount to market feature, whereby, the lender could purchase stock at 85% of the lowest trading price for a period of ten (10) days preceding the conversion date. As of October 26, 2022 this debenture was satisfied.

 

Additionally, the Company issued 12,000,000 five-year (5) warrants with an exercise price of $0.12 per share, and 4,285,714 warrants with an exercise price of $0.14 per share during the year ended December 31, 2022. The warrants had a fair value of $1,071,437, based upon using a black-scholes option pricing model with the following inputs:

 

Stock Price   $ 0.08  
Exercise price   $ 0.12 - $ 0.14  
Expected term (in years)     5  
Expected volatility     124.10 %
Annual rate of quarterly dividends     0 %
Risk free interest rate     0.58 %

 

The Company has determined that ASC 815 does not apply since the Company has unlimited authorized shares, which in turn satisfies the requirement of having sufficient authorized shares available to settle any potential instruments that may require physical net-share settlement.

 

In connection with $1,500,000 in note issued, the Company issued 16,785,714 warrants, which are accounted for as debt issue costs, having a fair value of $625,003. The debt issue costs are amortized over the life of the underlying convertible note.

 

The Company also paid $115,000 as a debt issuance cost to a placement agent for services rendered. These costs are considered to be a component of the total debt discount.

 

On April 14, 2022, the Company issued 2,358,380 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $1,644 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

 

On April 29, 2022, the Company issued 4,272,417 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $5,918 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On May 17, 2022, the Company issued 3,628,325 shares of Common Stock in exchange for conversion of $200,000 of principle balance on a convertible debenture and $5,726 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On June 6, 2022, the Company issued 3,549,793 shares of Common Stock in exchange for conversion of $200,000 of principle balance on a convertible debenture and $5,178 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On June 14, 2022, the Company issued 2,902,922 shares of Common Stock in exchange for conversion of $100,000 of principle balance on a convertible debenture and $60,822 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On June 21, 2022, the Company issued 3,393,979 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $3,068 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On June 30, 2022, the Company issued 3,401,877 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $3,425 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On July 19, 2022, the Company issued 4,364,987 shares of Common Stock in exchange for conversion of $200,000 of principle balance on a convertible debenture and $6,027 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On August 18, 2022, the Company issued 4,325,913 shares of Common Stock in exchange for conversion of $200,000 of principle balance on a convertible debenture and $7,644 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On September 8, 2022, the Company issued 3,396,898 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $4,219 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On September 26, 2022, the Company issued 3,605,259 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $2,863 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On October 11, 2022, the Company issued 2,907,240 shares of Common Stock in exchange for conversion of $100,000 of principle balance on a convertible debenture and $1,753 of accrued interest.

 

On October 18, 2022, the Company issued 4,782,778 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $658 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On October 26, 2022, the Company issued 5,487,951 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $370 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On October 31, 2022, the Company issued 6,510,348 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $28,384 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On November 1, 2022, the Company issued 9,236,212 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $301 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

 

On November 14, 2022, the Company issued 5,974,335 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $1,151 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On November 17, 2022, the Company issued 5,935,350 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $164 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

The Company issued a $1,500,000, thirteen-month (13), unsecured, convertible note on April 11, 2022, which was due May 11, 2023. The convertible note bore an interest at 10%. The note contained a discount to market feature, whereby, the lender could purchase stock at 85% of the lowest trading price for a period of ten (10) days preceding the conversion date. As of November 17, 2022 this debenture was satisfied.

 

The Company also paid $115,000 as a debt issuance cost to a placement agent for services rendered. These costs are considered to be a component of the total debt discount.

 

As of June 30, 2023, the above three notes were fully converted, with the no remaining balance due.

 

The following represents a summary of the Company’s convertible debt at June 30, 2023:

 

Convertible Note Payable

 

   Amounts 
Balance – December 31, 2021  $503,423 
Proceeds   3,000,000 
Debt discount and issue costs recorded   (865,000)
Conversion of debt into common shares   (3,750,003)
Amortization of debt discount   1,111,580 
Balance – December 31, 2022  $- 
No activity – June 30, 2023   - 
Balance – June 30, 2023  $- 

 

Accrued Interest Payable

 

   Amounts 
Balance – December 31, 2021   31,657 
Interest Expense December 31, 2022   153,955 
Interest conversion into common shares   (185,612)
Balance – December 31, 2022  $- 
No activity – June 30, 2023   - 
Balance – June 30, 2023  $- 

 
v3.23.2
STOCKHOLDERS’ DEFICIT
 6 Months Ended
Jun. 30, 2023
Equity [Abstract]  
STOCKHOLDERS’ DEFICIT

NOTE 8 STOCKHOLDERS’ DEFICIT

 

(A) Common Stock Issued for Cash

 

On March 9, 2019, the Company entered into a purchase agreement with one investor (the “Purchase Agreement”). Pursuant to the Purchase Agreement, the Company issued the investor 14,797,278 Units at a purchase price of $0.06758 per Unit, for total gross proceeds to the Company of $1,000,000. The Units consist of 14,797,278 shares of the Company’s Class A Common Stock (the “Common Stock”) and two warrants (the “Warrants”): (i) one warrant entitles the investor to purchase up to 14,797,278 shares of Common Stock at an exercise price of $0.06 per share (the “6 Cent Warrants”) and (ii) one warrant entitles the investor to purchase up to 7,398,639 shares of Common Stock at an exercise price of $0.08 per share (the “8 Cent Warrant”). The Warrants shall be exercisable at any time from the issuance date until the following expiration dates:

 

● ½ of all $0.06 Warrants shall expire on March 8, 2021;
● ½ of all $0.06 Warrants shall expire on March 8, 2022;
● ½ of all $0.08 Warrants shall expire on March 8, 2022; and,
● ½ of all $0.08 Warrants shall expire on March 8, 2023.

 

 

On March 2, 2021, the Company determined to amend and extend the expiration of the warrants expiring on March 8, 2021 as follows:

 

  ● 1,479,728 shares of all $0.06 Warrants shall expire on March 8, 2021.
  ● 1,479,728 shares of all $0.06 Warrants shall expire on May 8, 2021
  ● 1,479,728 shares of all $0.06 Warrants shall expire on July 8, 2021. On June 24, 2021, the Company determined to amend and extend the expiration of warrants expiring on July 8, 2021, to December 8, 2021.
  ● 1,479,728 shares of all $0.06 Warrants shall expire on September 8, 2021. As of December 31, 2021, the warrants have expired.
  ● 1,479,727 shares of all $0.06 Warrants shall expire on November 8, 2021. As of December 31, 2021, the warrants have expired.

 

On February 15, 2022, the Company issued 7,398,639 shares of Common stock in connection with the exercise of 7,398,639 warrants for $443,918.

 

On February 15, 2022, the Company issued 3,699,320 shares of Common stock in connection with the exercise of 3,699,320 warrants for $295,946.

 

(B) Common Stock Warrants and Options

 

On February 16, 2023, the Company issued 2,434,211 shares of Common Stock in exchange for the cashless exercise of 2,500,000 warrants.

 

On February 15, 2022, the Company issued 7,398,639 shares of Common stock in connection with the exercise of 7,398,639 warrants for $443,918.

 

On February 15, 2022, the Company issued 3,699,320 shares of Common stock in connection with the exercise of 3,699,320 warrants for $295,946.

 

On April 11, 2022, the Company extended the expiration date of the warrant issued on May 28, 2015 to May 27, 2025. No additional expense was recorded due to rate difference being de minimis.

 

On January 25, 2021, the Company issued a 7-year option to purchase 2,500,000 shares of common stock at an exercise price of $0.134 per share to a related party for services rendered. The options had a fair value of $310,165, based upon the Black-Scholes option-pricing model on the date of grant. Options vest 33.3% on the year one anniversary of the grant date, 33.3% will vest on the second anniversary, and 33.3% will vest on the third year anniversary as long as the employee remains with the Company at the end of each successive year for three years. Options will be exercisable on January 25, 2021, and for a period of 7 years expiring on January 25, 2028. During the six months ended June 30, 2023 the Company recorded $46,491 as an expense for options issued.

 

Expected dividends   0%
Expected volatility   133.22%
Expected term   7 years 
Risk free interest rate   1.46%
Expected forfeitures   0%

 

On February 19, 2020 the Company issued a 10-year option to purchase 6,000,000 shares of common stock at an exercise price of $0.115 per share to a related party for services rendered. The options had a fair value of $626,047, based upon the Black-Scholes option-pricing model on the date of grant and 2,000,000 options are fully vested on the date granted and 1,000,000 options vest at the end of each successive year for four years. Options will be exercisable on February 19, 2021, and for a period of 10 years expiring on February 19, 2030. During the six months ended June 30, 2023, the Company recorded $51,706 as an expense for options issued.

 

 

Expected dividends   0%
Expected volatility   125.19%
Expected term   3 years 
Risk free interest rate   1.50%
Expected forfeitures   0%

 

On February 19, 2020 the Company issued a 7-year option to purchase 1,340,000 shares of common stock at an exercise price of $0.115 per share to employees for services rendered. The options had a fair value of $133,063, based upon the Black-Scholes option-pricing model on the date of grant and 268,000 options are fully vested on the date granted and the remaining option vest equally over the remaining 4 years at the end of each successive year. Options will be exercisable on February 19, 2021, and for a period of 6 years expiring on February 19, 2027. During the six months ended June 30, 2023, the Company recorded $15,771 as an expense for options issued

 

Expected dividends   0%
Expected volatility   125.19%
Expected term   6 years  
Risk free interest rate   1.46%
Expected forfeitures   0%

 

Warrant activity as of June 30, 2023 is summarized as follows:

 

           Weighted     
       Weighted   Average     
       Average   Remaining   Aggregate 
Warrants 

Number of

Warrants

   Exercise
Price		  

Contractual

Term (Years)

  

Intrinsic

Value

 
Outstanding - December 31, 2021   48,972,279   $0.12    2.64   $1,248,452 
Exercisable - December 31, 2021   48,972,279   $0.12    2.64   $1,248,452 
Granted   16,785,714   $0.12    4.05    - 
Exercised   (11,097,959)  $0.07    -    - 
Cancelled/Forfeited   -   $-    -    - 
Outstanding - December 31, 2022   54,660,034   $0.13    3.04   $319,000 
Exercisable - December 31, 2022   54,660,034   $0.13    3.04   $319,000 
Granted   -   $-    -    - 
Exercised   (2,500,000)  $0.001    -    - 
Cancelled/Forfeited   (3,699,320)  $0.08    -    - 
Outstanding – June 30, 2023   48,460,714   $0.14    2.79   $331,500 
Exercisable – June 30, 2023   48,460,714   $0.14    2.79   $331,500 

 

As of June 30, 2023, the following warrants were outstanding:

 

Exercise Price

Warrants Outstanding

  

Warrants

Exercisable

  

Weighted Average

Remaining Contractual Life

  

Aggregate

Intrinsic Value

 
$0.001    8,500,000    2.53   $331,500 
$0.04    2,300,000    3.26   $- 
$0.056    1,000,000    2.02   $- 
$0.2299    8,250,000    1.75   $- 
$0.16    3,125,000    2.45   $- 
$0.25    8,000,000    2.74   $- 
$0.1160    500,000    2.02   $- 
$0.12    12,500,000    3.55   $- 
$0.14    4,285,714    3.55   $- 
      48,460,714        $331,500 

 

 

For the year ended December 31, 2022, the following warrants were outstanding:

 

Exercise Price

Warrants Outstanding

   Warrants
Exercisable		   Weighted Average
Remaining Contractual Life		   Aggregate
Intrinsic Value		 
$0.001    11,000,000    3.43   $319,000 
$0.04    2,300,000    3.75   $- 
$0.056    1,000,000    2.02   $- 
$0.08    3,699,320    0.18   $- 
$0.2299    8,250,000    2.21   $- 
$0.16    3,125,000    2.95   $- 
$0.25    8,000,000    3.23   $- 
$0.1160    500,000    2.52   $- 
$0.12    12,500,000    4.05   $- 
$0.14    4,285,714    4.05   $- 
      54,660,034        $319,000 

 

Options activity as of June 30, 2023 is summarized as follows:

 

Options 

Number of

Options

  

Weighted

Average

Exercise

Price

  

Weighted

Average

Remaining

Contractual

Term (Years)

  

Aggregate

Intrinsic

Value

 
Outstanding - December 31, 2021   26,802,500   $0.12    19.12   $      - 
Exercisable - December 31, 2021   26,802,500   $0.12    19.12   $- 
Granted   -   $-    -    - 
Exercised   -   $-    -    - 
Cancelled/Forfeited   (282,500)  $0.12    5.00    - 
Outstanding - December 31, 2022   26,520,000   $0.12    18.27   $- 
Granted   -   $-    -    - 
Exercised   -   $-    -    - 
Cancelled/Forfeited   -   $-    -    - 
Outstanding – June 30, 2023   26,520,000   $0.12    17.77   $- 
Exercisable – June 30, 2023   26,520,000   $0.12    17.77   $- 

 

As of June 30, 2023, the following options were outstanding:

 

            Weighted Average 
            Remaining 
Exercise   Options   Options   Contractual Life 
Price   Outstanding   Exercisable   (in Years) 
                  
$0.115         -    26,520,000    17.77 

 

For the year ended December 31, 2022, the following options were outstanding:

 

            Weighted Average 
            Remaining 
Exercise   Options   Options   Contractual Life 
Price   Outstanding   Exercisable   (in Years) 
                  
$0.115          -    26,520,000    18.52 

 

 

(C) Amendment to Articles of Incorporation

 

On February 16, 2009, the Company amended its articles of incorporation to amend the number and class of shares the Company is authorized to issue as follows:

 

● Common stock Class A, unlimited number of shares authorized, no par value
● Common stock Class B, unlimited number of shares authorized, no par value
● Preferred stock, unlimited number of shares authorized, no par value

 

Effective December 17, 2013, the Company amended its articles of incorporation to designate a Series A no par value preferred stock. Two shares of Series A Preferred stock have been authorized.

 

(D) Common Stock Issued for Debt

 

As of November 17, 2022, the Company has satisfied all debentures to Yorkville Advisors.

 

On November 17, 2022, the Company issued 5,935,350 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $164 of accrued interest.

 

On November 14, 2022, the Company issued 5,974,335 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $1,151 of accrued interest.

 

On November 1, 2022, the Company issued 9,236,212 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $301 of accrued interest.

 

On October 31, 2022, the Company issued 6,510,348 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $28,384 of accrued interest.

 

On October 26, 2022, the Company issued 5,487,951 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $370 of accrued interest.

 

On October 18, 2022, the Company issued 4,782,778 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $658 of accrued interest.

 

On October 11, 2022, the Company issued 2,907,240 shares of Common Stock in exchange for conversion of $100,000 of principle balance on a convertible debenture and $1,753 of accrued interest.

 

On September 26, 2022, the Company issued 3,605,259 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $2,863 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On September 8, 2022, the Company issued 3,396,898 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $4,219 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On August 18, 2022, the Company issued 4,325,913 shares of Common Stock in exchange for conversion of $200,000 of principle balance on a convertible debenture and $7,644 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion

 

On July 19, 2022, the Company issued 4,364,987 shares of Common Stock in exchange for conversion of $200,000 of principle balance on a convertible debenture and $6,027 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On June 30, 2022, the Company issued 3,401,877 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $3,425 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

 

On June 21, 2022, the Company issued 3,393,979 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $3,068 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On June 14, 2022, the Company issued 2,902,922 shares of Common Stock in exchange for conversion of $100,000 of principle balance on a convertible debenture and $60,822 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On June 6, 2022, the Company issued 3,549,793 shares of Common Stock in exchange for conversion of $200,000 of principle balance on a convertible debenture and $5,178 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On May 17, 2022, the Company issued 3,628,325 shares of Common Stock in exchange for conversion of $200,000 of principle balance on a convertible debenture and $5,726 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On April 14, 2022, the Company issued 2,358,380 shares of Common Stock in exchange for conversion of $150,000 of principle balance on a convertible debenture and $1,644 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On April 29, 2022, the Company issued 4,272,417 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $5,918 of accrued interest. Accordingly, no gain or loss was recognized upon debt conversion.

 

On February 16, 2022, the Company issued 3,924,443 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $1,164 of accrued interest.

 

On January 21, 2022, the Company issued 3,935,417 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $2,260 of accrued interest.

 

On January 31, 2022, the Company issued 4,569,059 shares of Common Stock in exchange for conversion of $250,000 of principle balance on a convertible debenture and $42,877 of accrued interest.

 
v3.23.2
COMMITMENTS AND CONTINGENCIES
 6 Months Ended
Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 9 COMMITMENTS AND CONTINGENCIES

 

On November 10, 2010, the Company entered into an employment agreement with its CEO, effective January 1, 2011 through the December 31, 2015. The term of the agreement is a five year period at an annual salary of $210,000. There is a 6% annual increase. For the year ending December 31, 2015, the annual salary was $281,027. The employee is also to receive a 20% bonus based on the annual based salary. Any stock, stock options bonuses have to be approved by the board of directors. On January 1, 2016 the agreement was renewed with the same terms for another 5 years with an annual salary of $297,889 for the year ended December 31, 2016. On January 1, 2017, the agreement renewed with the same terms for another 5 years, but with an annual salary of $315,764 for the year ended December 31, 2017. On January 1, 2019 the agreement renewed again with the same terms for another 5 years. On January 1, 2023 the agreement renewed again with the same terms, but with an annual salary of $447,915 for the six months ended June 30, 2023. As of June 30, 2023 and 2022, the accrued salary balance is $3,198,236 and $3,077,393, respectively (See Note 10).

 

On January 20, 2015, the board of directors appointed Mr. Jonathan R. Rice as our Chief Operating Officer. Mr. Rice’s employment agreement has a term of one year and can be terminated by either the Company or Mr. Rice at any time. Under the employment agreement, Mr. Rice is entitled to an annual cash compensation of $120,000, which includes salary, health insurance, 401K retirement plan contributions, etc. The Company also agreed to reimburse Mr. Rice for his past educational expenses of approximately $11,000. In addition, Mr. Rice was issued a three-year warrant to purchase 2,000,000 shares of common stock of the Company at an exercise price of $0.001 per share (the “January 2015 Warrant”) pursuant to the employment agreement. Additionally, on May 28, 2015, the Company issued a three-year warrant to purchase 3,000,000 shares of common stock of the Company at an exercise price of $0.001 per share (the “May 2015 Warrant”) to Mr. Rice. The May 2015 warrant fully vested on October 28, 2016 and will expire on May 28, 2022. For the year ended December 31, 2015, the Company recorded $121,448 for the warrants issued to Mr. Rice. On January 14, 2016, the Company signed a new employment agreement with Mr. Rice. The employment agreement has a term of one year and can be terminated by either the Company or Mr. Rice at any time. Under the employment agreement, Mr. Rice is entitled to annual cash compensation of $140,000, which includes salary, health insurance, 401K retirement plan contributions, etc. In addition, Mr. Rice was issued a three-year warrant to purchase 6,000,000 shares of common stock of the Company at an exercise price of $0.001 per share pursuant to the employment agreement (the “May 2016 Warrant”). The May 2016 warrant fully vested on February 20, 2017 and will expire on May 20, 2026. On January 9, 2018, the Company extended the expiration date of the January 2015 warrant from January 19, 2018 to January 31, 2020, and on January 10, 2020 the Company extended the expiration date of the January 2015 warrant to January 10, 2025 and on March 15, 2018, the Company signed an extension of its at-will employment agreement with its COO, extending the term to January 31, 2019. On March 25, 2019, the Company signed an extension of its at-will employment agreement with its COO, extending the term to January 1, 2020. On March 5, 2021, the Company signed an extension of its at-will employment agreement with its COO, extending the term to January 1, 2022. On February 25, 2022, the Company signed an extension of its at-will employment agreement with its COO, extending the term to January 1, 2023. On August 8, 2019, Mr. Rice was issued a set of three five-year warrants to purchase a total of 6,000,000 shares of common stock of the Company at an exercise price of $0.2299 per share pursuant to the employment agreement. On April 26, 2019, the Company signed an agreement to increase Mr. Rice’s base salary by $20,000 per year and issue a one-time $20,000 bonus. Additionally, on August 15, 2019, the Company signed an agreement to increase Mr. Rice’s base salary by an additional $20,000 per year.

 

 

As of June 30, 2023 and December 31, 2022, the Company owes $3,195 and $3,728, respectively, to Mr. Rice for payroll payable.

 

On July 3, 2019, the board of directors appointed Mr. Kenneth Le as the Company’s Director of Government relations and President of Prodigy Textiles. Mr. Le’s employment agreement has a term of one year and can be terminated by either the Company or Mr. Rice at any time. Under the employment agreement, Mr. Le is entitled to annual cash compensation of $60,000. In addition, Mr. Le was issued two three-year warrants to purchase 2,000,000 shares of common stock of the Company at an exercise price of $0.2299 per share. As of June 30, 2023 and December 31, 2022, the accrued salary balance is $1,065 and $1,243, respectively.

 

(A) License Agreement

 

On May 8, 2006, the Company entered into a license agreement. Pursuant to the terms of the agreement, the Company paid a non- refundable license fee of $10,000. The Company will pay a license maintenance fee of $10,000 on the one year anniversary of this agreement and each year thereafter. The Company will pay an annual research fee of $13,700 with first payment due January 2007, then on each subsequent anniversary of the effective date commencing May 4, 2007. The annual research fees are accrued by the Company for future payment. Pursuant to the terms of the agreement the Company may be required to pay additional fees aggregating up to a maximum of $10,000 a year for patent maintenance and prosecution relating to the licensed intellectual property.

 

On October 28, 2011, the Company entered into a license agreement with the University of Notre Dame. Under the agreement, the Company received exclusive and non-exclusive rights to certain spider silk technologies including commercial rights with the right to sublicense such intellectual property. In consideration of the licenses granted under the agreement, the Company agreed to issue to the University of Notre Dame 2,200,000 shares of its common stock and to pay a royalty of 2% of net sales. The license agreement has a term of 20 years which can be extended on an annual basis after that. It can be terminated by the University of Notre Dame if the Company defaults on its obligations under the agreement and fails to cure such default within 90 days of a written notice by the university. The Company can terminate the agreement upon a 90 day written notice subject to payment of a termination fee of $5,000 if the termination takes place within 2 years after its effectiveness, $10,000 if the termination takes place within 4 years after its effectiveness and $20,000 if the Agreement is terminated after 4 years. On May 5, 2017, the Company signed an addendum to that agreement relating to tangible property and project intellectual property. On March 1, 2019, the Company singed an addendum to that agreement. The Company entered into a separate loan agreement and promissory noted dated March 1, 2019 as a payment for expenses paid by the University prior to January 31, 2019 totaling $265,244 and issued 4,025,652 shares of Class A common stock with a fair value of $281,659 as payment of certain debt. In the event of default, the license agreement will be terminated. During the six months ended June 30, 2023, the Company paid $30,000 of the balance (See Notes 6).

 

On December 26, 2006, the Company entered into an addendum to the intellectual property transfer agreement with Mr. Thompson, its CEO. In accordance with FASB ASC No 480, Distinguishing Liabilities from Equity, the Company determined that the present value of the payment of $120,000 that was due on December 26, 2007. As of June 30, 2023 and December 31, 2022, the outstanding balance is $65,292. For the six months ended June 30, 2023, the Company recorded $980 in interest expensed and related accrued interest payable.

 

 

(B) Operating Lease Agreements

 

Since September of 2015, we rent office space at 2723 South State Street, Suite 150, Ann Arbor, Michigan 48104, which is our principal place of business. We pay an annual rent of $2,508 for conference facilities, mail, fax, and reception services located at our principal place of business.

 

On May 9, 2019, the Company signed a 5 year property lease with the Socialist Republic of Vietnam which consists of 4,560.57 square meters of space, which it leases at a current rent of approximately $45,150 per year one and two and with the 5% increase per year for years three through five. On July 1, 2021, the Company ended this lease agreement and entered into a new agreement effective July 1, 2021. The Company accounted for the lease in accordance with ASC Topic 842, “Leases”

 

On July 1, 2021, the Company signed a 5 year property lease with the Socialist Republic of Vietnam which consists of 6,000 square meters of space, which it leases at a current rent of approximately $8,645 per year. The Company accounts for the lease in accordance with ASC Topic 842, “Leases”

 

On September 13, 2017, the Company signed a new two year lease with a 2 year option commencing on October 1, 2017 and ending on September 31, 2019. The Company paid an annual rent of $39,200 for the year one of lease and $42,000 for the year two of lease for office and manufacturing space. On September 5, 2019, the Company signed a new two-year lease for this 5,000 square foot property in Lansing, MI that commenced on October 1, 2019 and ended on September 30, 2021, for its research and development headquarters. The Company pays an annual rent of $42,000 for year one of the lease and $44,800 for year two of the lease. On April 16, 2021, the Company signed a two year amendment to this lease. Commencing on July 1, 2021 and ending on September 30, 2022, the Company paid an annualized rent of $42,000. From October 1, 2022 through September 30, 2023, the Company will pay an annual rent of $44,800. The Company accounts for the lease in accordance with ASC Topic 842, “Leases”

 
v3.23.2
RELATED PARTY TRANSACTIONS
 6 Months Ended
Jun. 30, 2023
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 10 RELATED PARTY TRANSACTIONS

 

Accounts payable and accrued expenses – related party consists of the following:

 

   As of   As of 
   June 30, 2023   December 31, 2022 
         
Accounts payable - related party  $367,784   $356,191 
Accrued expenses - related party   3,202,496    3,082,363 
Accrued interest - related party   2,473,480    2,276,454 
           
Total accounts payable and accrued expenses - related party  $6,043,760   $5,715,008 

 

Between June 6, 2016, and December 1, 2020 the Company received a total of $1,657,000 in loans from its founder and CEO. Pursuant to the terms of the loan, the advance bears an interest at 3%, is unsecured, and due on demand. 

 

On January 26, 2022, the Company repaid $40,000 of the outstanding loan to its founder and CEO.

 

 

Total loan payable to principal stockholder for as of June 30, 2023 is $1,617,000.

 

Total loan payable to this principal stockholder as of December 31, 2022 is $1,617,000.

 

During the six months ended June 30, 2023, the Company recorded $40,093 as an in-kind contribution of interest related to the loan and recorded accrued interest payable of $27,888. As of June 30, 2023, total interest payable is $218,551.

 

During the six months ended June 30, 2022, the Company recorded $40,093 as an in-kind contribution of interest related to the loan and recorded accrued interest payable of $27,267. As of December 31, 2022, total interest payable is $190,663.

 

As of June 30, 2023, and December 31, 2022, there was $367,784 and $356,191, respectively, included in accounts payable – related party, which is owed to the Company’s Chief Executive Officer for expenses paid on behalf of the Company.

 

As of June 30, 2023, and December 31, 2022, there was $3,202,496 and $3,082,363, respectively, included in accrued expenses – related party, which includes accrued salaries owed to the Company’s senior staff.

 

As of June 30, 2023, and December 31, 2022, there was $2,473,480 and $2,276,454, respectively, included in accrued interest – related party, which includes interest on accrued salary and accrued expenses owed to the Company’s Chief Executive Officer.

 

In aggregate as of June 30, 2023, and December 31, 2022, the Company owed $6,043,760 and $5,715,008, respectively to its related parties in accrued salaries, accrued interest and note payable.

 

As of June 30, 2023 and December 31, 2022, the Company owed $65,292 and $65,292, respectively, in royalty agreement payable to Chief Executive Officer.

 
v3.23.2
SUBSEQUENT EVENTS
 6 Months Ended
Jun. 30, 2023
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 11 SUBSEQUENT EVENTS

 

The Company has analyzed its operations subsequent to August 14, 2023 through the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose.
v3.23.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION (Policies)
 6 Months Ended
Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation

Basis of Presentation

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements (“U.S. GAAP”) and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.

 

In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all of the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2023 and the results of operations and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the operating results for the full fiscal year or any future period.

 

These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 29, 2023.

 

Management acknowledges its responsibility for the preparation of the accompanying unaudited consolidated financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its consolidated financial position and the consolidated results of its operations for the periods presented.

 

On July 15, 2022, the Company signed an agreement with Global Silk Solutions Joint Stock Company (GSS). Under this agreement, GSS will serve as a contract manufacturer for the Company’s recombinant spider silk.

 

Kraig Biocraft Laboratories, Inc. (the “Company”) was incorporated under the laws of the State of Wyoming on April 25, 2006. The Company was organized to develop high strength, protein based fiber, using recombinant DNA technology, for commercial applications in the textile and specialty fiber industries.

 

Kraig Biocraft Laboratories, Inc. (the “Company”) was incorporated under the laws of the State of Wyoming on April 25, 2006. The Company was organized to develop high strength, protein based fiber, using recombinant DNA technology, for commercial applications in the textile and specialty fiber industries.

 

 

On March 5, 2018, the Company issued a board resolution authorizing investment in a Vietnamese subsidiary and appointing a representative for the subsidiary.

 

On April 24, 2018, the Company announced that it had received its investment registration certificate for its new Vietnamese subsidiary Prodigy Textiles Co., Ltd.

 

On May 1, 2018, the Company announced that it had received its enterprise registration certificate for its new Vietnamese subsidiary Prodigy Textiles Co., Ltd

 
Foreign Currency

Foreign Currency

 

The assets and liabilities of Prodigy Textiles, Co., Ltd. (the Company’s Vietnamese subsidiary) whose functional currency is the Vietnamese Dong, are translated into US dollars at period-end exchange rates prior to consolidation. Income and expense items are translated at the average rates of exchange prevailing during the period. The adjustments resulting from translating the Company’s financial statements are reflected as a component of other comprehensive (loss) income. Foreign currency transaction gains and losses are recognized in net earnings based on differences between foreign exchange rates on the transaction date and settlement date.

 
Use of Estimates

Use of Estimates

 

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.

 
Cash and Cash Equivalents

Cash and Cash Equivalents

 

Cash and cash equivalents consist of demand deposits at financial institutions, money market funds, and highly liquid investments with original maturities of three months or less.

 

As of June 30, 2023 and December 31, 2022, the Company had $1,436,861 and $3,862,716, in cash and cash equivalent accounts.

 
Loss Per Share

Loss Per Share

 

Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by the Financial Accounting Standards Board (“FASB” Accounting Standards Codification (“ASC”) No. 260, “Earnings per Share.” For June 30, 2023 and 2022, warrants were not included in the computation of income/ (loss) per share because their inclusion is anti-dilutive.

 

The computation of basic and diluted loss per share for June 30, 2023 and December 31, 2022 excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive:

 

  

June 30,

2023

  

December 31,

2022

 
         
Stock Warrants (Exercise price - $0.001- $0.25/share)   48,460,714    54,660,032 
Stock Options (Exercise price - $0.1150/Share)   26,520,000    26,520,000 
Convertible Preferred Stock   2    2 
Total   74,980,716    81,180,034 

 

 
Investments

Investments

 

The Company has investments Treasury Bills. The Treasury Bills have remaining terms ranging from one month to three months on June 30, 2023.

 

The Company classifies its investments in Treasury Bills as available-for-sale, accounted for at fair value with unrealized gains and losses recognized in other comprehensive gain on the statement of operations and comprehensive loss.

 

The cost and estimated fair value of the Company’s investments are as follows:

 

      Gross    
       unrealized   Fair 
   Cost   gain   value 
December 31, 2022  $-   $-   $- 
Treasury Bills  $1,714,790   $13,021   $1,727,811 
Total Investments, June 30, 2023  $1,714,790   $13,021   $1,727,811 

 
Research and Development Costs

Research and Development Costs

 

The Company expenses all research and development costs as incurred for which there is no alternative future use. These costs also include the expensing of employee compensation and employee stock based compensation.

 

For the three months ended June 30, 2023 and 2022, the Company had $57,035 and $49,869 respectively, in research and development costs.

 

For the six months ended June 30, 2023 and 2022, the Company had $126,127 and $77,373 respectively, in research and development costs

 
Advertising Expense

Advertising Expense

 

The Company follows the policy of charging the costs of advertising to expense as incurred. There was no advertising expense in the three and six months ended June 30, 2023 and 2022.

 
Income Taxes

Income Taxes

 

The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC No. 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC No. 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 
Stock-Based Compensation

Stock-Based Compensation

 

The Company accounts for stock-based compensation for employees and directors in accordance with ASC 718, Compensation (“ASC 718”). ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values. Under the provisions of ASC 718, stock-based compensation costs are measured at the grant date, based on the fair value of the award, and are recognized as expense over the employee’s requisite service period (generally the vesting period of the equity grant). The fair value of the Company’s common stock options are estimated using the Black Scholes option-pricing model with the following assumptions: expected volatility, dividend rate, risk free interest rate and the expected life. The Company expenses stock-based compensation by using the straight-line method. In accordance with ASC 718 and, excess tax benefits realized from the exercise of stock-based awards are classified as cash flows from operating activities. All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income tax expense or benefit in the condensed consolidated statements of operations.

 

 

The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASU 2018-07.

 
Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity; Own Equity (“ASU 2020-06”), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. The Company adopted the guidance under ASU 2020-06 on January 1, 2022. The adoption of this guidance and had no material impact on the Company’s financial statements.

 
Equipment

Equipment

 

The Company values property and equipment at cost and depreciates these assets using the straight-line method over their expected useful life.

 

In accordance with FASB ASC No. 360, Property, Plant and Equipment, the Company carries long-lived assets at the lower of the carrying amount or fair value. Impairment is evaluated by estimating future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected undiscounted future cash flow is less than the carrying amount of the assets, an impairment loss is recognized. Fair value, for purposes of calculating impairment, is measured based on estimated future cash flows, discounted at a market rate of interest.

 

There were no impairment losses recorded for the six months ended June 30, 2023 and 2022.

 
Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

We hold certain financial assets, which are required to be measured at fair value on a recurring basis in accordance with the Statement of Financial Accounting Standard No. 157, “Fair Value Measurements” (“ASC Topic 820-10”). ASC Topic 820-10 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). ASC Topic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Level 1 instruments include cash and cash equivalents, account receivable, prepaid expenses, inventory and account payable and accrued liabilities. The carrying values are assumed to approximate the fair value due to the short term nature of the instrument.

 

 

The three levels of the fair value hierarchy under ASC Topic 820-10 are described below:

 

  ● Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. We believe our carrying value of level 1 instruments approximate their fair value at June 30, 2023 and 2022.
     
  ● Level 2 - Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
     
  ● Level 3 - Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We consider depleting assets, asset retirement obligations and net profit interest liability to be Level 3. We determine the fair value of Level 3 assets and liabilities utilizing various inputs, including NYMEX price quotations and contract terms.

 

The following are the major categories of assets measured at fair value on a recurring basis: as of June 30, 2023 and December 31, 2022, using quoted prices in active markets for identical liabilities (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):

 

The Company has consistently applied the valuation techniques in all periods presented. The following table presents the Company’s assets which were measured at fair value at June 30, 2023 and December 31, 2022:

 

   June 30, 2023   December 31, 2022 
   Fair Value Measurement Using   Fair Value Measurement Using 
   Level 1   Level 2   Level 3   Total   Level 1   Level 2   Level 3   Total 
                                 
Assets:                                        
Investment in gold  $458,832   $     -   $     -   $458,832   $437,251   $     -   $     -   $437,251 
Treasury bills   1,727,811    -    -    1,727,811    -    -    -    - 
Money market fund  $1,212,045   $-   $-   $1,212,045   $-   $-   $-   $- 
Total  $3,398,688   $-   $-   $3,398,688   $437,251   $-   $-   $437,251 

 

The Board of Directors, who serves as the Custodian, is responsible for the safekeeping of gold bullion owned by the Company.

 

Fair value of the gold bullion held by the Company is based on that day’s London Bullion Market Association (“LBMA”) Gold Price PM. “LBMA Gold Price PM” is the price per fine troy ounce of gold, stated in U.S. dollars, determined by ICE Benchmark Administration (“IBA”) following an electronic auction consisting of one or more 30-second rounds starting at 3:00 p.m. (London time), on each day that the London gold market is open for business and published shortly thereafter.

 

The fair value of the treasury bills is based on quoted market prices in an active market. The Company has determined the fair value based on financial factors that are considered level 1 inputs in the fair value hierarchy.

 

 

Money market funds included in cash and cash equivalents and U.S. government-backed securities are measured at fair value based on quoted prices in active markets, which are considered Level 1 inputs. The Company’s policy is to recognize transfers in and/or out of the fair value hierarchy as of the date in which the event or change in circumstances caused the transfer.

 

The following tables summarize activity in gold bullion for the six months ended June 30, 2023:

 

Six Months Ended June 30, 2023  Ounces   Cost   Fair Value 
             
Balance December 31, 2022   239   $1,829   $437,251 
Net change in unrealized gain   -    -    21,581 
Balance June 30, 2023   239   $1,920   $458,832 

 

 

The following tables summarize activity in gold bullion for the six months ended June 30, 2022:

 

Six Months Ended June 30, 2022  Ounces   Cost   Fair Value 
             
Balance December 31, 2021   239   $1,884   $437,212 
Net change in unrealized loss   -    -    (5,401)
Balance June 30, 2022   239   $1,884   $431,811 

 
Revenue Recognition

Revenue Recognition

 

Effective January 1, 2018, the Company adopted ASC No. 606 — Revenue from Contracts with Customers. Under ASC No. 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

 

For the three and six months ended June 30, 2023 and 2022, the Company recognized $0 and $0 respectively in revenue.

 
Concentration of Credit Risk

Concentration of Credit Risk

 

The Company at times has cash and cash equivalents in banks in excess of FDIC insurance limits. At June 30, 2023 and December 31, 2022, the Company had approximately $1,212,045 and $3,285,197, respectively in excess of FDIC insurance limits.

 

On March 12, 2023, the U.S. government took extraordinary steps to stop a potential banking crisis after the historic failure of Silicon Valley Bank, assuring all depositors at the failed institution that they could access all their money quickly, even as another major bank was shut down. The Company had no exposure to a failed bank. The Company averts risks associated with such a crisis by holding minimum cash balances required for uninterrupted operations, federal funds money market fund, and U.S. government-backed securities. As of June 30, 2023, the Company held $1,212,045 million in a federal money market fund (the “Fund”) with an investment objective to seek to provide current income while maintaining liquidity and a stable share price of $1. The Fund invests at least 99.5% of its total assets in cash, U.S. government securities, and/or repurchase agreements that are collateralized solely by U.S. government securities or cash (collectively, government securities). As such it is considered one of the most conservative investment options offered.

 
Original Issue Discount

Original Issue Discount

 

For certain notes issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded as a debt discount, reducing the face amount of the note, and is amortized to amortization of original issue discount in the consolidated statements of operations over the life of the debt.

 
Debt Issue Cost

Debt Issue Cost

 

Debt issuance cost paid to lenders, or third parties are recorded as debt discounts and amortized to interest expense in the consolidated statements of operations, over the life of the underlying debt instrument.

 
Deposit

Deposit

 

During the year ended December 31, 2022, the Company paid $98,480 as a deposit towards the purchase of inventory. As of June 30, 2023, the balance remained at $98,480.
v3.23.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION (Tables)
 6 Months Ended
Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
SCHEDULE OF ANTIDILUTIVE SECURITIES OF EARNINGS PER SHARE

The computation of basic and diluted loss per share for June 30, 2023 and December 31, 2022 excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive:

 

  

June 30,

2023

  

December 31,

2022

 
         
Stock Warrants (Exercise price - $0.001- $0.25/share)   48,460,714    54,660,032 
Stock Options (Exercise price - $0.1150/Share)   26,520,000    26,520,000 
Convertible Preferred Stock   2    2 
Total   74,980,716    81,180,034 
SCHEDULE OF COST AND ESTIMATED FAIR VALUE INVESTMENT

The cost and estimated fair value of the Company’s investments are as follows:

 

      Gross    
       unrealized   Fair 
   Cost   gain   value 
December 31, 2022  $-   $-   $- 
Treasury Bills  $1,714,790   $13,021   $1,727,811 
Total Investments, June 30, 2023  $1,714,790   $13,021   $1,727,811 
SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS

 

   June 30, 2023   December 31, 2022 
   Fair Value Measurement Using   Fair Value Measurement Using 
   Level 1   Level 2   Level 3   Total   Level 1   Level 2   Level 3   Total 
                                 
Assets:                                        
Investment in gold  $458,832   $     -   $     -   $458,832   $437,251   $     -   $     -   $437,251 
Treasury bills   1,727,811    -    -    1,727,811    -    -    -    - 
Money market fund  $1,212,045   $-   $-   $1,212,045   $-   $-   $-   $- 
Total  $3,398,688   $-   $-   $3,398,688   $437,251   $-   $-   $437,251 
SCHEDULE OF GOLD IN BULLION

The following tables summarize activity in gold bullion for the six months ended June 30, 2023:

 

Six Months Ended June 30, 2023  Ounces   Cost   Fair Value 
             
Balance December 31, 2022   239   $1,829   $437,251 
Net change in unrealized gain   -    -    21,581 
Balance June 30, 2023   239   $1,920   $458,832 

 

 

The following tables summarize activity in gold bullion for the six months ended June 30, 2022:

 

Six Months Ended June 30, 2022  Ounces   Cost   Fair Value 
             
Balance December 31, 2021   239   $1,884   $437,212 
Net change in unrealized loss   -    -    (5,401)
Balance June 30, 2022   239   $1,884   $431,811 
v3.23.2
EQUIPMENT (Tables)
 6 Months Ended
Jun. 30, 2023
Property, Plant and Equipment [Abstract]  
SCHEDULE OF PROPERTY AND EQUIPMENT

At June 30, 2023 and December 31, 2022, property and equipment, net, is as follows:

 

   June 30,
2023		   December 31,
2022		   Estimated
Useful Lives
(Years)		 
Automobile  $41,805   $41,805    5 
Laboratory Equipment   123,911    123,911    5-10 
Office Equipment   7,260    7,260    5-10 
Leasehold Improvements   82,739    82,739    2-5 
Less: Accumulated Depreciation   (180,611)   (167,854)     
Total Property and Equipment, net  $75,104   $87,861      
v3.23.2
RIGHT TO USE ASSETS AND LEASE LIABILITY (Tables)
 6 Months Ended
Jun. 30, 2023
Right To Use Assets And Lease Liability  
SCHEDULE OF OPERATING LEASES

At June 30, 2023 and December 31, 2022, the Company had no financing leases as defined in ASC 842, “Leases.”

 

  

June 30,

2023

  

December 31,

2022

 
Assets          
           
Operating lease - right-of-use asset - non-current  $34,814   $58,849 
           
Liabilities          
           
Operating lease liability  $35,164   $59,897 
           
Weighted-average remaining lease term (three months)   1.59    2.08 
           
Weighted-average discount rate   8%   8%
           
The components of lease expense were as follows:          
           
Operating lease costs          
           
Amortization of right-of-use operating lease asset  $24,035   $52,043 
Total operating lease costs  $24,035   $52,043 
           
Supplemental cash flow information related to operating leases was as follows:          
           
Operating cash outflows from operating lease (obligation payment)  $24,733   $51,344 
Right-of-use asset obtained in exchange for new operating lease liability  $-   $- 
SCHEDULE OF MINIMUM LEASE PAYMENTS

Future minimum lease payments required under leases that have initial or remaining non-cancelable lease terms in excess of one year at June 30, 2023:

 

      
2023  $15,523 
2024   8,644 
2025   8,644 
2026   5,763 
Total lease payments   38,574 
Less: amount representing interest   (3,410)
Total lease obligations   35,164 
Less: current portion of operating lease liability   (18,019)
Long-term portion operating lease liability  $17,145 

 
v3.23.2
CONVERTIBLE NOTES (Tables)
 6 Months Ended
Jun. 30, 2023
Convertible Notes  
SCHEDULE OF FAIR VALUE WARRANTS

 

Stock Price   $ 0.14  
Exercise price   $ 0.16  
Expected term (in years)     5  
Expected volatility     60.64 %
Annual rate of quarterly dividends     0 %
Risk free interest rate     0.10 %
 
Stock Price  $0.15 
Exercise price  $0.25 
Expected term (in years)   5 
Expected volatility   100.76%
Annual rate of quarterly dividends   0%
Risk free interest rate   0.07%
  
Stock Price   $ 0.08  
Exercise price   $ 0.12 - $ 0.14  
Expected term (in years)     5  
Expected volatility     124.10 %
Annual rate of quarterly dividends     0 %
Risk free interest rate     0.58 %
 
SUMMARY OF CONVERTIBLE DEBT

The following represents a summary of the Company’s convertible debt at June 30, 2023:

 

Convertible Note Payable

 

   Amounts 
Balance – December 31, 2021  $503,423 
Proceeds   3,000,000 
Debt discount and issue costs recorded   (865,000)
Conversion of debt into common shares   (3,750,003)
Amortization of debt discount   1,111,580 
Balance – December 31, 2022  $- 
No activity – June 30, 2023   - 
Balance – June 30, 2023  $- 

 

Accrued Interest Payable

 

   Amounts 
Balance – December 31, 2021   31,657 
Interest Expense December 31, 2022   153,955 
Interest conversion into common shares   (185,612)
Balance – December 31, 2022  $- 
No activity – June 30, 2023   - 
Balance – June 30, 2023  $- 
v3.23.2
STOCKHOLDERS’ DEFICIT (Tables)
 6 Months Ended
Jun. 30, 2023
Equity [Abstract]  
SCHEDULE OF OPTION ASSUMPTION

 

Expected dividends   0%
Expected volatility   133.22%
Expected term   7 years 
Risk free interest rate   1.46%
Expected forfeitures   0%
 
Expected dividends   0%
Expected volatility   125.19%
Expected term   3 years 
Risk free interest rate   1.50%
Expected forfeitures   0%
  
Expected dividends   0%
Expected volatility   125.19%
Expected term   6 years  
Risk free interest rate   1.46%
Expected forfeitures   0%
 
SCHEDULE OF WARRANTS ACTIVITY

Warrant activity as of June 30, 2023 is summarized as follows:

 

           Weighted     
       Weighted   Average     
       Average   Remaining   Aggregate 
Warrants 

Number of

Warrants

   Exercise
Price		  

Contractual

Term (Years)

  

Intrinsic

Value

 
Outstanding - December 31, 2021   48,972,279   $0.12    2.64   $1,248,452 
Exercisable - December 31, 2021   48,972,279   $0.12    2.64   $1,248,452 
Granted   16,785,714   $0.12    4.05    - 
Exercised   (11,097,959)  $0.07    -    - 
Cancelled/Forfeited   -   $-    -    - 
Outstanding - December 31, 2022   54,660,034   $0.13    3.04   $319,000 
Exercisable - December 31, 2022   54,660,034   $0.13    3.04   $319,000 
Granted   -   $-    -    - 
Exercised   (2,500,000)  $0.001    -    - 
Cancelled/Forfeited   (3,699,320)  $0.08    -    - 
Outstanding – June 30, 2023   48,460,714   $0.14    2.79   $331,500 
Exercisable – June 30, 2023   48,460,714   $0.14    2.79   $331,500 
SCHEDULE OF WARRANTS OUTSTANDING

As of June 30, 2023, the following warrants were outstanding:

 

Exercise Price

Warrants Outstanding

  

Warrants

Exercisable

  

Weighted Average

Remaining Contractual Life

  

Aggregate

Intrinsic Value

 
$0.001    8,500,000    2.53   $331,500 
$0.04    2,300,000    3.26   $- 
$0.056    1,000,000    2.02   $- 
$0.2299    8,250,000    1.75   $- 
$0.16    3,125,000    2.45   $- 
$0.25    8,000,000    2.74   $- 
$0.1160    500,000    2.02   $- 
$0.12    12,500,000    3.55   $- 
$0.14    4,285,714    3.55   $- 
      48,460,714        $331,500 

 

 

For the year ended December 31, 2022, the following warrants were outstanding:

 

Exercise Price

Warrants Outstanding

   Warrants
Exercisable		   Weighted Average
Remaining Contractual Life		   Aggregate
Intrinsic Value		 
$0.001    11,000,000    3.43   $319,000 
$0.04    2,300,000    3.75   $- 
$0.056    1,000,000    2.02   $- 
$0.08    3,699,320    0.18   $- 
$0.2299    8,250,000    2.21   $- 
$0.16    3,125,000    2.95   $- 
$0.25    8,000,000    3.23   $- 
$0.1160    500,000    2.52   $- 
$0.12    12,500,000    4.05   $- 
$0.14    4,285,714    4.05   $- 
      54,660,034        $319,000 
SCHEDULE OF OPTIONS ACTIVITY

Options activity as of June 30, 2023 is summarized as follows:

 

Options 

Number of

Options

  

Weighted

Average

Exercise

Price

  

Weighted

Average

Remaining

Contractual

Term (Years)

  

Aggregate

Intrinsic

Value

 
Outstanding - December 31, 2021   26,802,500   $0.12    19.12   $      - 
Exercisable - December 31, 2021   26,802,500   $0.12    19.12   $- 
Granted   -   $-    -    - 
Exercised   -   $-    -    - 
Cancelled/Forfeited   (282,500)  $0.12    5.00    - 
Outstanding - December 31, 2022   26,520,000   $0.12    18.27   $- 
Granted   -   $-    -    - 
Exercised   -   $-    -    - 
Cancelled/Forfeited   -   $-    -    - 
Outstanding – June 30, 2023   26,520,000   $0.12    17.77   $- 
Exercisable – June 30, 2023   26,520,000   $0.12    17.77   $- 
SCHEDULE OF OPTIONS OUTSTANDING

As of June 30, 2023, the following options were outstanding:

 

            Weighted Average 
            Remaining 
Exercise   Options   Options   Contractual Life 
Price   Outstanding   Exercisable   (in Years) 
                  
$0.115         -    26,520,000    17.77 

 

For the year ended December 31, 2022, the following options were outstanding:

 

            Weighted Average 
            Remaining 
Exercise   Options   Options   Contractual Life 
Price   Outstanding   Exercisable   (in Years) 
                  
$0.115          -    26,520,000    18.52 
v3.23.2
RELATED PARTY TRANSACTIONS (Tables)
 6 Months Ended
Jun. 30, 2023
Related Party Transactions [Abstract]  
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES RELATED PARTY

Accounts payable and accrued expenses – related party consists of the following:

 

   As of   As of 
   June 30, 2023   December 31, 2022 
         
Accounts payable - related party  $367,784   $356,191 
Accrued expenses - related party   3,202,496    3,082,363 
Accrued interest - related party   2,473,480    2,276,454 
           
Total accounts payable and accrued expenses - related party  $6,043,760   $5,715,008 
v3.23.2
SCHEDULE OF ANTIDILUTIVE SECURITIES OF EARNINGS PER SHARE (Details) - shares
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total 74,980,716 81,180,034
Warrant [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total 48,460,714 54,660,032
Equity Option [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total 26,520,000 26,520,000
Convertible Preferred Stock [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total 2 2
v3.23.2
SCHEDULE OF ANTIDILUTIVE SECURITIES OF EARNINGS PER SHARE (Details) (Parenthetical) - $ / shares
Jun. 30, 2023
Dec. 31, 2022
Jun. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Option exercise price $ 0.1150 $ 0.1150  
Minimum [Member]      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Warrant exercise price per share     $ 0.06
Maximum [Member]      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Warrant exercise price per share     $ 0.08
Warrant [Member] | Minimum [Member]      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Warrant exercise price per share 0.001 0.001  
Stock Warrants [Member] | Maximum [Member]      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Warrant exercise price per share $ 0.25 $ 0.25  
v3.23.2
SCHEDULE OF COST AND ESTIMATED FAIR VALUE INVESTMENT (Details) - USD ($)
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
Cash and Cash Equivalents [Line Items]      
Investment cost $ 1,714,790   $ (0)
Investment gross unrealized gain (13,021) (0)
Investment fair value 1,727,811   (0)
Investment gross unrealized gain 13,021 0
US Treasury Securities [Member]      
Cash and Cash Equivalents [Line Items]      
Investment cost 1,714,790   $ 0
Investment gross unrealized gain 13,021    
Investment fair value 1,727,811    
Investment gross unrealized gain $ (13,021)    
v3.23.2
SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($)
Jun. 30, 2023
Dec. 31, 2022
Platform Operator, Crypto-Asset [Line Items]    
Fair value of assets $ 3,398,688 $ 437,251
Investment in Gold [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Fair value of assets 458,832 437,251
US Treasury Securities [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Fair value of assets 1,727,811
Money Market Funds [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Fair value of assets 1,212,045
Fair Value, Inputs, Level 1 [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Fair value of assets 3,398,688 437,251
Fair Value, Inputs, Level 1 [Member] | Investment in Gold [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Fair value of assets 458,832 437,251
Fair Value, Inputs, Level 1 [Member] | US Treasury Securities [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Fair value of assets 1,727,811
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Fair value of assets 1,212,045
Fair Value, Inputs, Level 2 [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Fair value of assets
Fair Value, Inputs, Level 2 [Member] | Investment in Gold [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Fair value of assets
Fair Value, Inputs, Level 2 [Member] | US Treasury Securities [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Fair value of assets
Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Fair value of assets
Fair Value, Inputs, Level 3 [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Fair value of assets
Fair Value, Inputs, Level 3 [Member] | Investment in Gold [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Fair value of assets
Fair Value, Inputs, Level 3 [Member] | US Treasury Securities [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Fair value of assets
Fair Value, Inputs, Level 3 [Member] | Money Market Funds [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Fair value of assets
v3.23.2
SCHEDULE OF GOLD IN BULLION (Details)
 6 Months Ended
Jun. 30, 2023
USD ($)
oz
Jun. 30, 2022
USD ($)
oz
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Beginning balance, ounce | oz 239 239
Beginning balance, cost $ 1,829 $ 1,884
Beginning balalnce, fair value $ 437,251 $ 437,212
Net change in unrealized gain (loss), ounce | oz
Net change in unrealized gain (loss), cost
Net change in unrealized gain (loss), fair value $ 21,581 $ (5,401)
Ending balance, ounce | oz 239 239
Ending balance, cost $ 1,920 $ 1,884
Ending balance, fair value $ 458,832 $ 431,811
v3.23.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION (Details Narrative) - USD ($)
 3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]          
Cash and cash equivalents $ 1,436,861   $ 1,436,861   $ 3,862,716
Research and development costs 57,035 $ 49,869 126,127 $ 77,373  
Advertising expenses 0 0 0 0  
Impairment losses on equipment     0 0  
Revenue  
Cash excess of FDIC insurance limits 1,212,045   1,212,045   3,285,197
Federal money market fund $ 1,212,045   $ 1,212,045    
Share price $ 1   $ 1    
Funds invests, percentage 99.50%   99.50%    
Deposits paid         $ 98,480
Deposits $ 98,480   $ 98,480    
v3.23.2
GOING CONCERN (Details Narrative) - USD ($)
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Mar. 31, 2023
Dec. 31, 2022
Mar. 31, 2022
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]            
Working capital deficit $ 5,065,774          
Stockholders' deficiency 4,510,651 $ 3,774,804 $ 4,037,222 $ 3,521,860 $ 4,101,460 $ 5,295,875
Cash used in operating activities $ 668,044 $ 960,137        
v3.23.2
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($)
Jun. 30, 2023
Dec. 31, 2022
Property, Plant and Equipment [Line Items]    
Less: Accumulated Depreciation $ (180,611) $ (167,854)
Total Property and Equipment, net 75,104 87,861
Automobiles [Member]    
Property, Plant and Equipment [Line Items]    
Leasehold Improvements $ 41,805 41,805
Estimated useful lives (years) 5 years  
Laboratory Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Leasehold Improvements $ 123,911 123,911
Laboratory Equipment [Member] | Minimum [Member]    
Property, Plant and Equipment [Line Items]    
Estimated useful lives (years) 5 years  
Laboratory Equipment [Member] | Maximum [Member]    
Property, Plant and Equipment [Line Items]    
Estimated useful lives (years) 10 years  
Office Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Leasehold Improvements $ 7,260 7,260
Office Equipment [Member] | Minimum [Member]    
Property, Plant and Equipment [Line Items]    
Estimated useful lives (years) 5 years  
Office Equipment [Member] | Maximum [Member]    
Property, Plant and Equipment [Line Items]    
Estimated useful lives (years) 10 years  
Leasehold Improvements [Member]    
Property, Plant and Equipment [Line Items]    
Leasehold Improvements $ 82,739 $ 82,739
Leasehold Improvements [Member] | Minimum [Member]    
Property, Plant and Equipment [Line Items]    
Estimated useful lives (years) 2 years  
Leasehold Improvements [Member] | Maximum [Member]    
Property, Plant and Equipment [Line Items]    
Estimated useful lives (years) 5 years  
v3.23.2
EQUIPMENT (Details Narrative) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Property, Plant and Equipment [Abstract]        
Depreciation expense $ 6,140 $ 7,270 $ 12,757 $ 14,721
v3.23.2
SCHEDULE OF OPERATING LEASES (Details) - USD ($)
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
May 09, 2019
Right To Use Assets And Lease Liability      
Operating lease - right-of-use asset - non-current $ 34,814 $ 58,849 $ 241,800
Operating lease liability $ 35,164 $ 59,897  
Weighted-average remaining lease term (years) 1 year 7 months 2 days 2 years 29 days  
Weighted-average discount rate 8.00% 8.00%  
Amortization of right-of-use operating lease asset $ 24,035 $ 52,043  
Total operating lease costs 24,035 52,043  
Operating cash outflows from operating lease (obligation payment) 24,733 51,344  
Right-of-use asset obtained in exchange for new operating lease liability  
v3.23.2
SCHEDULE OF MINIMUM LEASE PAYMENTS (Details) - USD ($)
Jun. 30, 2023
Dec. 31, 2022
Sep. 05, 2019
Sep. 13, 2017
Right To Use Assets And Lease Liability        
2023 $ 15,523   $ 42,000 $ 39,200
2024 8,644   $ 44,800 $ 42,000
2025 8,644      
2026 5,763      
Total lease payments 38,574      
Less: amount representing interest (3,410)      
Total lease obligations 35,164 $ 59,897    
Less: current portion of operating lease liability (18,019) (39,200)    
Long-term portion operating lease liability $ 17,145 $ 20,697    
v3.23.2
RIGHT TO USE ASSETS AND LEASE LIABILITY (Details Narrative)
 1 Months Ended 6 Months Ended
May 09, 2019
USD ($)
m²
Sep. 30, 2022
USD ($)
Jun. 30, 2023
USD ($)
Dec. 31, 2022
USD ($)
Jul. 02, 2021
USD ($)
m²
Jul. 01, 2021
m²
Sep. 05, 2019
USD ($)
ft²
Sep. 13, 2017
USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                
Lease term             2 years  
Area of land | ft²             5,000  
Annual rent, year one     $ 15,523       $ 42,000 $ 39,200
Annual rent, year two     8,644       $ 44,800 $ 42,000
Operating lease, right-of-use asset $ 241,800   34,814 $ 58,849        
Lease liabilities     18,019 $ 39,200        
Socialist Republic of Vietnam [Member]                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                
Lease term 5 years       5 years      
Area of land | m² 4,560.57       6,000      
Annual rent, year one $ 45,150       $ 8,645      
Annual rent, year two $ 45,150              
Rent increase percentage 5.00%              
Operating Lease Agreements [Member]                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                
Rent payments     2,508          
Operating Lease Agreements [Member] | Socialist Republic of Vietnam [Member]                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                
Rent payments $ 45,150              
Area of land | m² 4,560.57         6,000    
Rent increase percentage 5.00%              
Operating Lease Agreements [Member] | October 1, 2022 through September 30, 2023 [Member]                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                
Rent payments     44,800          
Operating Lease Agreements [Member] | Office and Manufacturing Space [Member] | July 1, 2021 and ending on March 31, 2023 [Member]                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                
Rent payments   $ 42,000            
Adoption of New Guidance [Member]                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                
Operating lease, right-of-use asset     79,862          
Lease liabilities     $ 79,862          
v3.23.2
NOTE PAYABLE – RELATED PARTY (Details Narrative) - USD ($)
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
Jan. 26, 2022
Dec. 01, 2020
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]          
Paid-in-kind interest $ 40,093 $ 40,093      
Accured interest payable 27,888 27,267      
Interest payable 218,551 $ 190,663 $ 190,663    
Related Party [Member]          
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]          
Notes payable, related parties, current $ 1,617,000   $ 1,617,000 $ 40,000  
CEO [Member] | Related Party [Member]          
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]          
Notes payable, related parties, current         $ 1,657,000
Loans received bear interest         3.00%
v3.23.2
LOAN PAYABLE (Details Narrative) - USD ($)
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
Jul. 08, 2021
Mar. 01, 2019
Short-Term Debt [Line Items]          
Notes payable $ 6,043,760   $ 5,715,008 $ 180,244  
Repayment of debt 30,000 $ 30,000      
Loan balance 65,244   $ 95,244    
Related Party [Member]          
Short-Term Debt [Line Items]          
Notes payable 115,244        
First Nine Months [Member]          
Short-Term Debt [Line Items]          
Repayment of debt 1,000        
Seven and Eight Months [Member]          
Short-Term Debt [Line Items]          
Repayment of debt 2,000        
Nine Through Twenty Three Months [Member]          
Short-Term Debt [Line Items]          
Repayment of debt 5,000        
24th Month [Member]          
Short-Term Debt [Line Items]          
Notes payable 180,224        
13 Months [Member]          
Short-Term Debt [Line Items]          
Repayment of debt 5,000        
14 Months [Member]          
Short-Term Debt [Line Items]          
Repayment of debt 57,622        
20 Months [Member]          
Short-Term Debt [Line Items]          
Repayment of debt 57,622        
Months Fourteen And Twenty [Member]          
Short-Term Debt [Line Items]          
Repayment of debt 5,000        
Unsecured Promissory Note [Member]          
Short-Term Debt [Line Items]          
Repayment of debt $ 30,000        
Notre Dame [Member] | Unsecured Promissory Note [Member]          
Short-Term Debt [Line Items]          
Notes payable         $ 265,244
Debt Instrument, Interest Rate, Stated Percentage         10.00%
v3.23.2
SCHEDULE OF FAIR VALUE WARRANTS (Details)
Jan. 18, 2022
$ / shares
Mar. 25, 2021
$ / shares
Dec. 11, 2020
$ / shares
Measurement Input, Share Price [Member]      
Fair Value Measurement Inputs and Valuation Techniques [Line Items]      
Warrants, measurement input, percentage 0.08 0.15 0.14
Measurement Input, Exercise Price [Member]      
Fair Value Measurement Inputs and Valuation Techniques [Line Items]      
Warrants, measurement input, percentage   0.25 0.16
Measurement Input, Expected Term [Member]      
Fair Value Measurement Inputs and Valuation Techniques [Line Items]      
Warrants term 5 years 5 years 5 years
Measurement Input, Price Volatility [Member]      
Fair Value Measurement Inputs and Valuation Techniques [Line Items]      
Warrants, measurement input, percentage 124.10 100.76 60.64
Measurement Input, Expected Dividend Rate [Member]      
Fair Value Measurement Inputs and Valuation Techniques [Line Items]      
Warrants, measurement input, percentage 0 0 0
Measurement Input, Risk Free Interest Rate [Member]      
Fair Value Measurement Inputs and Valuation Techniques [Line Items]      
Warrants, measurement input, percentage 0.58 0.07 0.10
v3.23.2
SUMMARY OF CONVERTIBLE DEBT (Details) - USD ($)
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Short-Term Debt [Line Items]        
Proceeds - net $ 2,990,000    
Balance, beginning $ 31,657 $ 31,657  
Interest expense     153,955  
Interest conversion into common shares     (185,612)  
Balance, ending     $ 31,657
Convertible Notes Payable [Member]        
Short-Term Debt [Line Items]        
Balance, beginning     503,423
Proceeds - net     3,000,000
Debt discount and issue costs recorded     $ (865,000)
Conversion of debt into common shares       (3,750,003)
Amortization of debt discount       $ 1,111,580
v3.23.2
CONVERTIBLE NOTES (Details Narrative)
 6 Months Ended
Nov. 17, 2022
USD ($)
shares
Nov. 14, 2022
USD ($)
shares
Nov. 01, 2022
USD ($)
shares
Oct. 31, 2022
USD ($)
shares
Oct. 26, 2022
USD ($)
shares
Oct. 18, 2022
USD ($)
shares
Oct. 11, 2022
USD ($)
shares
Sep. 26, 2022
USD ($)
shares
Sep. 08, 2022
USD ($)
shares
Aug. 18, 2022
USD ($)
shares
Jul. 19, 2022
USD ($)
shares
Jun. 30, 2022
USD ($)
$ / shares
shares
Jun. 21, 2022
USD ($)
shares
Jun. 14, 2022
USD ($)
shares
Jun. 06, 2022
USD ($)
shares
May 17, 2022
USD ($)
shares
Apr. 29, 2022
USD ($)
shares
Apr. 14, 2022
USD ($)
shares
Apr. 11, 2022
USD ($)
Feb. 16, 2022
USD ($)
shares
Jan. 31, 2022
USD ($)
shares
Jan. 21, 2022
USD ($)
shares
Jan. 18, 2022
USD ($)
$ / shares
shares
Apr. 22, 2021
USD ($)
Apr. 06, 2021
USD ($)
Mar. 25, 2021
USD ($)
$ / shares
shares
Dec. 11, 2020
USD ($)
$ / shares
shares
Jun. 30, 2023
USD ($)
Jun. 30, 2022
USD ($)
$ / shares
Dec. 31, 2022
USD ($)
$ / shares
shares
Feb. 15, 2022
shares
Number of warrants issued | shares                                                             7,398,639
Interest payable                       $ 190,663                               $ 218,551 $ 190,663 $ 190,663  
Proceeds from Convertible Debt                                                       $ 2,990,000    
Minimum [Member]                                                              
Exercise price | $ / shares                       $ 0.06                                 $ 0.06    
Maximum [Member]                                                              
Exercise price | $ / shares                       $ 0.08                                 $ 0.08    
Common Stock [Member]                                                              
Number of warrants issued | shares                                                             3,699,320
Debt conversion, converted instrument, amount $ 150,000 $ 150,000 $ 250,000 $ 150,000 $ 150,000 $ 150,000 $ 100,000 $ 150,000 $ 150,000 $ 200,000 $ 200,000 $ 150,000 $ 150,000 $ 100,000 $ 200,000 $ 200,000 $ 250,000 $ 150,000   $ 250,000 $ 250,000 $ 250,000                  
Debt conversion, converted instrument, shares issued | shares 5,935,350 5,974,335 9,236,212 6,510,348 5,487,951 4,782,778 2,907,240 3,605,259 3,396,898 4,325,913 4,364,987 3,401,877 3,393,979 2,902,922 3,549,793 3,628,325 4,272,417 2,358,380   3,924,443 4,569,059 3,935,417                  
Interest payable $ 164 $ 1,151 $ 301 $ 28,384 $ 370 $ 658 $ 1,753 $ 2,863 $ 4,219 $ 7,644 $ 6,027 $ 3,425 $ 3,068 $ 60,822 $ 5,178 $ 5,726 $ 5,918 $ 1,644   $ 1,164 $ 42,877 $ 2,260             $ 3,425    
Measurement Input, Share Price [Member]                                                              
Warrants, measurement input, percentage | $ / shares                                             0.08     0.15 0.14        
Measurement Input, Exercise Price [Member]                                                              
Warrants, measurement input, percentage | $ / shares                                                   0.25 0.16        
Measurement Input, Exercise Price [Member] | Minimum [Member]                                                              
Warrants, measurement input, percentage | $ / shares                                             0.12                
Measurement Input, Exercise Price [Member] | Maximum [Member]                                                              
Warrants, measurement input, percentage | $ / shares                                             0.14                
Measurement Input, Expected Term [Member]                                                              
Warrants term                                             5 years     5 years 5 years        
Measurement Input, Price Volatility [Member]                                                              
Warrants, measurement input, percentage                                             124.10     100.76 60.64        
Measurement Input, Expected Dividend Rate [Member]                                                              
Warrants, measurement input, percentage                                             0     0 0        
Measurement Input, Risk Free Interest Rate [Member]                                                              
Warrants, measurement input, percentage                                             0.58     0.07 0.10        
Unsecured Convertible Note [Member]                                                              
Number of warrants issued | shares                                             12,000,000     8,000,000 3,125,000     4,285,714  
Warrants term                                             5 years     5 years 5 years        
Fair value adjustments of warrants                                             $ 1,071,437     $ 3,359,716 $ 2,599,066        
Debt instrument, discount                                                   3,670,000          
Debt issuance costs                                     $ 115,000       $ 115,000     $ 330,000 86,000        
Debt instrument term                                     13 months       13 months     1 year          
Debt conversion, converted instrument, amount                                             $ 1,500,000     $ 4,000,000          
Debt instrument, interest rate                                     10.00%       10.00%                
Debt instrument, description                                     The note contained a discount to market feature, whereby, the lender could purchase stock at 85% of the lowest trading price for a period of ten (10) days preceding the conversion date. As of November 17, 2022 this debenture was satisfied.       The note contained a discount to market feature, whereby, the lender could purchase stock at 85% of the lowest trading price for a period of ten (10) days preceding the conversion date. As of October 26, 2022 this debenture was satisfied.                
Debt instrument, maturity date                                     May 11, 2023       Feb. 18, 2023                
Debt Instrument, Unamortized Discount, Current                                             $ 10,000                
Proceeds from Convertible Debt                                             $ 1,490,000                
Exercise price | $ / shares                                             $ 0.12             $ 0.14  
Issuance of convertible securities                                     $ 1,500,000       $ 1,500,000                
Class of warrant issued | shares                                             16,785,714                
Debt issuance cost                                             $ 625,003                
Unsecured Convertible Note [Member] | First Convertible Debenture [Member]                                                              
Debt instrument, discount                                                     $ 1,000,000        
Debt conversion, converted instrument, amount                                                   $ 500,000          
Debt instrument, interest rate                                                   10.00%          
Debt instrument, description                                                   The note contained a discount to market feature, whereby, the lender could purchase stock at 80% of the lowest trading price for a period of ten (10) days preceding the conversion date.          
Unsecured Convertible Note [Member] | Second Convertible Debenture [Member]                                                              
Debt conversion, converted instrument, amount                                                 $ 500,000            
Unsecured Convertible Note [Member] | Third Convertible Debenture [Member]                                                              
Debt conversion, converted instrument, amount                                               $ 3,000,000              
v3.23.2
SCHEDULE OF OPTION ASSUMPTION (Details)
Jan. 25, 2021
Feb. 19, 2020
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Expected dividends 0.00% 0.00%
Expected volatility 133.22% 125.19%
Expected term 7 years 3 years
Risk free interest rate 1.46% 1.50%
Expected forfeitures 0.00% 0.00%
Equity Option [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Expected dividends   0.00%
Expected volatility   125.19%
Expected term   6 years
Risk free interest rate   1.46%
Expected forfeitures   0.00%
v3.23.2
SCHEDULE OF WARRANTS ACTIVITY (Details) - USD ($)
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Equity [Abstract]      
Number of Warrants, Outstanding, Beginning balance 54,660,034 48,972,279  
Weighted Average Exercise Price, Outstanding, Beginning balance $ 0.13 $ 0.12  
Weighted Average Remaining Contractual Life (In Years) 2 years 9 months 14 days 3 years 14 days 2 years 7 months 20 days
Aggregate Intrinsic Value, Outstanding, Beginning balance $ 319,000 $ 1,248,452  
Number of Warrants, Exercisable, Beginning balance 54,660,034 48,972,279  
Weighted Average Exercise Price, Exercisable, Beginning balance $ 0.13 $ 0.12  
Weighted Average Remaining Contractual Life (In Years), Exercisable 2 years 9 months 14 days 3 years 14 days 2 years 7 months 20 days
Aggregate Intrinsic Value, Exercisable, Beginning balance   $ 1,248,452  
Number of Warrants, Granted 16,785,714  
Weighted Average Exercise Price, Granted $ 0.12  
Weighted Average Remaining Contractual Life (In Years), Granted   4 years 18 days  
Number of Warrants, Exercised (2,500,000) (11,097,959)  
Weighted Average Exercise Price, Exercised $ 0.001 $ 0.07  
Number of Warrants, Cancelled/Forfeited (3,699,320)  
Weighted Average Exercise Price, Cancelled/Forfeited $ 0.08  
Aggregate Intrinsic Value, Exercisable, Beginning balance $ 319,000    
Number of Warrants, Outstanding, Ending balance 48,460,714 54,660,034 48,972,279
Weighted Average Exercise Price, Outstanding, Ending balance $ 0.14 $ 0.13 $ 0.12
Aggregate Intrinsic Value, Outstanding, Ending balance $ 331,500 $ 319,000 $ 1,248,452
Number of Warrants, Exercisable, Ending balance 48,460,714 54,660,034 48,972,279
Weighted Average Exercise Price, Exercisable, Ending balance $ 0.14 $ 0.13 $ 0.12
Aggregate Intrinsic Value, Exercisable, Ending balance $ 331,500 $ 319,000  
v3.23.2
SCHEDULE OF WARRANTS OUTSTANDING (Details) - USD ($)
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Warrants Exercisable 48,460,714 54,660,034 48,972,279
Aggregate Intrinsic Value $ 331,500 $ 319,000 $ 1,248,452
Warrant [Member]      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Warrant exercise price $ 0.001 $ 0.001  
Warrants Exercisable 8,500,000 11,000,000  
Weighted Average Remaining Contractual Life 2 years 6 months 10 days 3 years 5 months 4 days  
Aggregate Intrinsic Value $ 331,500 $ 319,000  
Warrant One [Member]      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Warrant exercise price $ 0.04 $ 0.04  
Warrants Exercisable 2,300,000 2,300,000  
Weighted Average Remaining Contractual Life 3 years 3 months 3 days 3 years 9 months  
Aggregate Intrinsic Value  
Warrant Two [Member]      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Warrant exercise price $ 0.056 $ 0.056  
Warrants Exercisable 1,000,000 1,000,000  
Weighted Average Remaining Contractual Life 2 years 7 days 2 years 7 days  
Aggregate Intrinsic Value  
Warrant Three [Member]      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Warrant exercise price $ 0.2299 $ 0.08  
Warrants Exercisable 8,250,000 3,699,320  
Weighted Average Remaining Contractual Life 1 year 9 months 2 months 4 days  
Aggregate Intrinsic Value  
Warrant Four [Member]      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Warrant exercise price $ 0.16 $ 0.2299  
Warrants Exercisable 3,125,000 8,250,000  
Weighted Average Remaining Contractual Life 2 years 5 months 12 days 2 years 2 months 15 days  
Aggregate Intrinsic Value  
Warrant Five [Member]      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Warrant exercise price $ 0.25 $ 0.16  
Warrants Exercisable 8,000,000 3,125,000  
Weighted Average Remaining Contractual Life 2 years 8 months 26 days 2 years 11 months 12 days  
Aggregate Intrinsic Value  
Warrant Six [Member]      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Warrant exercise price $ 0.1160 $ 0.25  
Warrants Exercisable 500,000 8,000,000  
Weighted Average Remaining Contractual Life 2 years 7 days 3 years 2 months 23 days  
Aggregate Intrinsic Value  
Warrant Seven [Member]      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Warrant exercise price $ 0.12 $ 0.1160  
Warrants Exercisable 12,500,000 500,000  
Weighted Average Remaining Contractual Life 3 years 6 months 18 days 2 years 6 months 7 days  
Aggregate Intrinsic Value  
Warrant Eight [Member]      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Warrant exercise price $ 0.14 $ 0.12  
Warrants Exercisable 4,285,714 12,500,000  
Weighted Average Remaining Contractual Life 3 years 6 months 18 days 4 years 18 days  
Aggregate Intrinsic Value  
Warrant Nine [Member]      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Warrant exercise price   $ 0.14  
Warrants Exercisable   4,285,714  
Weighted Average Remaining Contractual Life   4 years 18 days  
Aggregate Intrinsic Value    
v3.23.2
SCHEDULE OF OPTIONS ACTIVITY (Details) - USD ($)
 6 Months Ended 12 Months Ended
Feb. 16, 2023
Jan. 25, 2021
Jun. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Equity [Abstract]          
Number of Options, Outstanding, Beginning balance     26,520,000 26,802,500  
Weighted Average Exercise Price, Outstanding, Beginning balance     $ 0.12 $ 0.12  
Weighted Average Remaining Contractual Life (In Years)     17 years 9 months 7 days 18 years 3 months 7 days 19 years 1 month 13 days
Aggregate Intrinsic Value, Outstanding, Beginning balance      
Number of Options, Outstanding, Exercisable       26,802,500  
Weighted Average Exercise Price, Outstanding, Exercisable       $ 0.12  
Weighted Average Remaining Contractual Life (In Years), Exercisable     17 years 9 months 7 days   19 years 1 month 13 days
Aggregate Intrinsic Value, Exercisable, Beginning balance        
Number of Options, Outstanding, Granted   2,500,000  
Weighted Average Exercise Price, Outstanding, Granted      
Number of Options, Outstanding, Exercised (2,500,000)    
Weighted Average Exercise Price, Outstanding, Exercised      
Number of Options, Outstanding, Cancelled/Forfeited       (282,500)
Weighted Average Exercise Price, Outstanding, Cancelled/Forfeited     $ 0.12  
Weighted Average Remaining Contractual Life (In Years), Cancelled/Forfeited       5 years  
Number of Options, Outstanding, Exercised 2,500,000    
Number of Options, Outstanding, Ending balance     26,520,000 26,520,000 26,802,500
Weighted Average Exercise Price, Outstanding, Ending balance     $ 0.12 $ 0.12 $ 0.12
Aggregate Intrinsic Value, Outstanding, Ending balance    
Number of Options, Outstanding, Exercisable     26,520,000   26,802,500
Weighted Average Exercise Price, Outstanding, Exercisable     $ 0.12   $ 0.12
Aggregate Intrinsic Value, Exercisable, Ending balance      
v3.23.2
SCHEDULE OF OPTIONS OUTSTANDING (Details) - $ / shares
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
Equity [Abstract]    
Exercise Price $ 0.115 $ 0.115
Options Outstanding
Options Exercisable 26,520,000 26,520,000
Weighted Average Remaining Contractual Life 17 years 9 months 7 days 18 years 6 months 7 days
v3.23.2
STOCKHOLDERS’ DEFICIT (Details Narrative) - USD ($)
 6 Months Ended 12 Months Ended
Feb. 16, 2023
Nov. 17, 2022
Nov. 14, 2022
Nov. 01, 2022
Oct. 31, 2022
Oct. 26, 2022
Oct. 18, 2022
Oct. 11, 2022
Sep. 26, 2022
Sep. 08, 2022
Aug. 18, 2022
Jul. 19, 2022
Jun. 30, 2022
Jun. 21, 2022
Jun. 14, 2022
Jun. 06, 2022
May 17, 2022
Apr. 29, 2022
Apr. 14, 2022
Feb. 16, 2022
Feb. 15, 2022
Jan. 31, 2022
Jan. 21, 2022
Jan. 25, 2021
Feb. 19, 2020
Mar. 09, 2019
Feb. 16, 2009
Jun. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Jun. 24, 2021
Mar. 02, 2021
Dec. 17, 2013
Class of Stock [Line Items]                                                                  
Stock issued during period shares new issues 2,434,211                                       7,398,639                        
Share price                                                       $ 1          
Warrants to purchase up share                                         7,398,639                        
Stock issued during period value new issues                                         $ 443,918                        
Cashless exercise warrants 2,500,000                                                            
Stock issued during period shares issuance of common stock                                         7,398,639                        
Options to purchase shares                                               2,500,000              
Preferred stock, shares authorized                                                     Unlimited Unlimited Unlimited        
Preferred stock, no par value                                                     $ 0 $ 0 $ 0        
Accrued interest                         $ 190,663                             $ 218,551 $ 190,663        
Equity Option [Member]                                                                  
Class of Stock [Line Items]                                                                  
Fair value of options                                               $ 310,165                  
Common stock warrants and options, description                                               Options vest 33.3% on the year one anniversary of the grant date, 33.3% will vest on the second anniversary, and 33.3% will vest on the third year anniversary as long as the employee remains with the Company at the end of each successive year for three years. Options will be exercisable on January 25, 2021, and for a period of 7 years expiring on January 25, 2028                  
Share based compensation, expense                                                       46,491          
Stock Option One [Member]                                                                  
Class of Stock [Line Items]                                                                  
Share price                                                 $ 0.115                
Options to purchase shares                                                 6,000,000                
Fair value of options                                                 $ 626,047                
Share based compensation, expense                                                       51,706          
Share based compensation arrangement by share based payment award, description                                                 Black-Scholes option-pricing model on the date of grant and 2,000,000 options are fully vested on the date granted and 1,000,000 options vest at the end of each successive year for four years. Options will be exercisable on February 19, 2021, and for a period of 10 years expiring on February 19, 2030                
Stock Option Two [Member]                                                                  
Class of Stock [Line Items]                                                                  
Share price                                                 $ 0.115                
Options to purchase shares                                                 1,340,000                
Fair value of options                                                 $ 133,063                
Share based compensation, expense                                                       $ 15,771          
Share based compensation arrangement by share based payment award, description                                                 Black-Scholes option-pricing model on the date of grant and 268,000 options are fully vested on the date granted and the remaining option vest equally over the remaining 4 years at the end of each successive year. Options will be exercisable on February 19, 2021, and for a period of 6 years expiring on February 19, 2027                
Warrant [Member]                                                                  
Class of Stock [Line Items]                                                                  
Warrant exercise price per share                                                       $ 0.001 $ 0.001        
Stock issued during period value new issues                                         $ 295,946                        
Stock issued during period shares issuance of common stock                                         3,699,320                        
Warrant One [Member]                                                                  
Class of Stock [Line Items]                                                                  
Warrant exercise price per share                                                       0.04 0.04        
Warrant Two [Member]                                                                  
Class of Stock [Line Items]                                                                  
Warrant exercise price per share                                                       0.056 0.056        
Warrant Three [Member]                                                                  
Class of Stock [Line Items]                                                                  
Warrant exercise price per share                                                       0.2299 0.08        
Warrant Four [Member]                                                                  
Class of Stock [Line Items]                                                                  
Warrant exercise price per share                                                       $ 0.16 $ 0.2299        
Common Stock [Member]                                                                  
Class of Stock [Line Items]                                                                  
Stock issued during period shares new issues                                         3,699,320                        
Warrants to purchase up share                                         3,699,320                        
Stock issued during period value new issues                                         $ 295,946                        
Debt conversion, converted instrument, shares issued   5,935,350 5,974,335 9,236,212 6,510,348 5,487,951 4,782,778 2,907,240 3,605,259 3,396,898 4,325,913 4,364,987 3,401,877 3,393,979 2,902,922 3,549,793 3,628,325 4,272,417 2,358,380 3,924,443   4,569,059 3,935,417                    
Debt conversion, converted instrument, amount   $ 150,000 $ 150,000 $ 250,000 $ 150,000 $ 150,000 $ 150,000 $ 100,000 $ 150,000 $ 150,000 $ 200,000 $ 200,000 $ 150,000 $ 150,000 $ 100,000 $ 200,000 $ 200,000 $ 250,000 $ 150,000 $ 250,000   $ 250,000 $ 250,000                    
Accrued interest   $ 164 $ 1,151 $ 301 $ 28,384 $ 370 $ 658 $ 1,753 $ 2,863 $ 4,219 $ 7,644 $ 6,027 $ 3,425 $ 3,068 $ 60,822 $ 5,178 $ 5,726 $ 5,918 $ 1,644 $ 1,164   $ 42,877 $ 2,260                    
Common Stock Warrants and Options [Member]                                                                  
Class of Stock [Line Items]                                                                  
Share price                                               $ 0.134                  
Common Class A [Member]                                                                  
Class of Stock [Line Items]                                                                  
Common stock, shares authorized                                                     Unlimited Unlimited Unlimited        
Common stock, no par value                                                     $ 0 $ 0 $ 0        
Common Class B [Member]                                                                  
Class of Stock [Line Items]                                                                  
Common stock, shares authorized                                                     Unlimited Unlimited Unlimited        
Common stock, no par value                                                     $ 0 $ 0 $ 0        
Series A Preferred Stock [Member]                                                                  
Class of Stock [Line Items]                                                                  
Preferred stock, no par value                                                       $ 0 $ 0       $ 0
Preferred stock, shares authorized                                                                 2
Purchase Agreement [Member] | Warrant [Member]                                                                  
Class of Stock [Line Items]                                                                  
Warrants to purchase up share                                                               1,479,728  
Warrant exercise price per share                                                   $ 0.06           $ 0.06  
Warrant expiration date                                                               Mar. 08, 2021  
Purchase Agreement [Member] | Warrant One [Member]                                                                  
Class of Stock [Line Items]                                                                  
Warrants to purchase up share                                                               1,479,728  
Warrant exercise price per share                                                   0.06           $ 0.06  
Warrant expiration date                                                               May 08, 2021  
Purchase Agreement [Member] | Warrant Two [Member]                                                                  
Class of Stock [Line Items]                                                                  
Warrants to purchase up share                                                               1,479,728  
Warrant exercise price per share                                                   0.08           $ 0.06  
Warrant expiration date                                                             Dec. 08, 2021 Jul. 08, 2021  
Purchase Agreement [Member] | Warrant Three [Member]                                                                  
Class of Stock [Line Items]                                                                  
Warrants to purchase up share                                                               1,479,728  
Warrant exercise price per share                                                   $ 0.08           $ 0.06  
Warrant expiration date                                                               Sep. 08, 2021  
Purchase Agreement [Member] | Warrant Four [Member]                                                                  
Class of Stock [Line Items]                                                                  
Warrants to purchase up share                                                               1,479,727  
Warrant exercise price per share                                                               $ 0.06  
Warrant expiration date                                                               Nov. 08, 2021  
Purchase Agreement [Member] | Investor [Member]                                                                  
Class of Stock [Line Items]                                                                  
Stock issued during period shares new issues                                                   14,797,278              
Share price                                                   $ 0.06758              
Proceeds from issuance of common stock                                                   $ 1,000,000              
Purchase Agreement [Member] | Investor [Member] | 6 Cent Warrants [Member]                                                                  
Class of Stock [Line Items]                                                                  
Warrants to purchase up share                                                   14,797,278              
Warrant exercise price per share                                                   $ 0.06              
Purchase Agreement [Member] | Investor [Member] | 8 Cent Warrant [Member]                                                                  
Class of Stock [Line Items]                                                                  
Warrants to purchase up share                                                   7,398,639              
Warrant exercise price per share                                                   $ 0.08              
Purchase Agreement [Member] | Investor [Member] | Common Class A [Member]                                                                  
Class of Stock [Line Items]                                                                  
Stock issued during period shares new issues                                                   14,797,278              
v3.23.2
COMMITMENTS AND CONTINGENCIES (Details Narrative)
 3 Months Ended 6 Months Ended 12 Months Ended 15 Months Ended
Feb. 16, 2023
shares
Feb. 15, 2022
USD ($)
shares
Sep. 05, 2019
USD ($)
ft²
Aug. 15, 2019
USD ($)
Jul. 03, 2019
USD ($)
$ / shares
shares
May 09, 2019
USD ($)
m²
Apr. 26, 2019
USD ($)
Mar. 01, 2019
USD ($)
shares
Jan. 01, 2019
Jan. 14, 2016
USD ($)
$ / shares
shares
Jan. 20, 2015
USD ($)
$ / shares
shares
Oct. 28, 2011
USD ($)
shares
Nov. 10, 2010
USD ($)
Dec. 26, 2006
USD ($)
Aug. 08, 2006
USD ($)
May 08, 2006
USD ($)
Jun. 30, 2023
USD ($)
Jun. 30, 2022
USD ($)
$ / shares
Jun. 30, 2023
USD ($)
Jun. 30, 2022
USD ($)
$ / shares
Sep. 30, 2023
USD ($)
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
Dec. 31, 2015
USD ($)
Sep. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Jul. 02, 2021
USD ($)
m²
Jul. 01, 2021
m²
Aug. 08, 2019
$ / shares
shares
Sep. 13, 2017
USD ($)
May 28, 2015
$ / shares
shares
Loss Contingencies [Line Items]                                                                
Annual salary                                 $ 171,625 $ 164,845 $ 343,249 $ 349,653                        
Accrued salary balance                                 3,198,236 $ 3,077,393 3,198,236 3,077,393                        
Number of shares issued | shares 2,434,211 7,398,639                                                            
Payment for debt                                     30,000 $ 30,000                        
Stock issued during period, value   $ 443,918                                                            
Accrued Interest payable                                                   $ 31,657          
Area of land | ft²     5,000                                                          
Annual rent, year one     $ 42,000                           15,523   15,523                       $ 39,200  
Annual rent, year two     $ 44,800                           8,644   8,644                       $ 42,000  
Socialist Republic of Vietnam [Member]                                                                
Loss Contingencies [Line Items]                                                                
Area of land | m²           4,560.57                                           6,000        
Rent increase percentage           5.00%                                                    
Annual rent, year one           $ 45,150                                           $ 8,645        
Annual rent, year two           45,150                                                    
Maximum [Member]                                                                
Loss Contingencies [Line Items]                                                                
Warrant exercise price per share | $ / shares                                   $ 0.08   $ 0.08                        
Mr. Jonathan R. Rice [Member]                                                                
Loss Contingencies [Line Items]                                                                
Payroll payment                                 3,195   3,195             3,728            
Board of Directors Chairman [Member]                                                                
Loss Contingencies [Line Items]                                                                
Accrued salary balance                                 1,065   1,065             1,243            
Employment Agreement [Member] | Chief Executive Officer [Member]                                                                
Loss Contingencies [Line Items]                                                                
Agreement term description                         The term of the agreement is a five year period                                      
Annual salary                         $ 210,000           447,915     $ 315,764 $ 297,889 $ 281,027                
Annual salary rate, increase                         6.00%                                      
Agreement term                 5 years                         5 years 5 years                  
Employment Agreement [Member] | Employee [Member]                                                                
Loss Contingencies [Line Items]                                                                
Employee bonus rate                                               20.00%                
Employment Agreement [Member] | Mr. Jonathan R. Rice [Member]                                                                
Loss Contingencies [Line Items]                                                                
Annual salary       $ 20,000     $ 20,000                                                  
Annual cash compensation                   $ 140,000 $ 120,000                                          
Educational expenses                     $ 11,000                                          
Warrants term                   3 years 3 years                                     5 years   3 years
Warrant to purchase common stock shares | shares                   6,000,000 2,000,000                                     6,000,000   3,000,000
Warrant exercise price per share | $ / shares                   $ 0.001 $ 0.001                                     $ 0.2299   $ 0.001
Warrants maturity date                   May 20, 2026                                           May 28, 2022
Warrants issued value                                               $ 121,448                
One-time bonus             $ 20,000                                                  
Employment Agreement [Member] | Mr. Kenneth Le [Member]                                                                
Loss Contingencies [Line Items]                                                                
Annual cash compensation         $ 60,000                                                      
Warrants term         3 years                                                      
Warrant to purchase common stock shares | shares         2,000,000                                                      
Warrant exercise price per share | $ / shares         $ 0.2299                                                      
License Agreement [Member]                                                                
Loss Contingencies [Line Items]                                                                
Agreement term                       20 months                                        
License fee                               $ 10,000                                
License maintenance fee                               10,000                                
Annual research fee                             $ 13,700                                  
Number of shares issued | shares                       2,200,000                                        
Royalty percentage                       2.00%                                        
Termination agreement description                       The Company can terminate the agreement upon a 90 day written notice subject to payment of a termination fee of $5,000 if the termination takes place within 2 years after its effectiveness, $10,000 if the termination takes place within 4 years after its effectiveness and $20,000 if the Agreement is terminated after 4 years                                        
License termination fee                       $ 5,000                                        
Payment for debt                                     30,000                          
License Agreement [Member] | Common Class A [Member]                                                                
Loss Contingencies [Line Items]                                                                
Number of shares issued | shares               4,025,652                                                
Payment for debt               $ 265,244                                                
Stock issued during period, value               $ 281,659                                                
License Agreement [Member] | Maximum [Member]                                                                
Loss Contingencies [Line Items]                                                                
Patent maintenance and prosecution related to license cost                               $ 10,000                                
Intellectual Property Transfer Agreement [Member] | Kim Thompson [Member]                                                                
Loss Contingencies [Line Items]                                                                
Payment for debt                           $ 120,000                                    
Outstanding balance                                 65,292   65,292             $ 65,292            
Accrued Interest payable                                 $ 980   980                          
Operating Lease Agreements [Member]                                                                
Loss Contingencies [Line Items]                                                                
Payments for rent                                     $ 2,508                          
Operating lease term, description     the Company signed a new two-year lease for this 5,000 square foot property in Lansing, MI that commenced on October 1, 2019 and ended on September 30, 2021, for its research and development headquarters                                                          
Operating Lease Agreements [Member] | Forecast [Member]                                                                
Loss Contingencies [Line Items]                                                                
Payments for rent                                         $ 44,800                      
Operating Lease Agreements [Member] | Office and Manufacturing Space [Member] | July 1, 2021 and ending on September 30, 2022 [Member]                                                                
Loss Contingencies [Line Items]                                                                
Payments for rent                                                 $ 42,000              
Operating Lease Agreements [Member] | Socialist Republic of Vietnam [Member]                                                                
Loss Contingencies [Line Items]                                                                
Payments for rent           $ 45,150                                                    
Operating lease, term           5 years                                             5 years      
Area of land | m²           4,560.57                                             6,000      
Rent increase percentage           5.00%                                                    
v3.23.2
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES RELATED PARTY (Details) - USD ($)
Jun. 30, 2023
Dec. 31, 2022
Related Party Transaction [Line Items]    
Accrued expenses - related party $ 3,202,496 $ 3,082,363
Accrued interest - related party 2,473,480 2,276,454
Total accounts payable and accrued expenses - related party 6,043,760 5,715,008
Related Party [Member]    
Related Party Transaction [Line Items]    
Accounts payable - related party $ 367,784 $ 356,191
v3.23.2
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)
 6 Months Ended
Jan. 26, 2022
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
Jul. 08, 2021
Dec. 01, 2020
Related Party Transaction [Line Items]            
Paid-in-kind interest   $ 40,093 $ 40,093      
Accured interest payable   27,888 27,267      
Interest payable   218,551 $ 190,663 $ 190,663    
Accrued expenses related party   3,202,496   3,082,363    
Accrued interest related party   2,473,480   2,276,454    
Accrued interest related party   6,043,760   5,715,008 $ 180,244  
Related Party [Member]            
Related Party Transaction [Line Items]            
Loans payable amount $ 40,000 1,617,000   1,617,000    
Accounts payable related party   367,784   356,191    
Accrued interest related party   115,244        
Accrued royalties   65,292   65,292    
Founder and Chief Executive Officer [Member]            
Related Party Transaction [Line Items]            
Repayment of debt $ 40,000          
Principal Stockholder [Member]            
Related Party Transaction [Line Items]            
Loans payable amount   1,617,000   1,617,000    
Chief Executive Officer [Member]            
Related Party Transaction [Line Items]            
Accounts payable related party   367,784   356,191    
Accrued interest related party   2,473,480   2,276,454    
Chief Executive Officer [Member] | Royalty Agreement Terms [Member]            
Related Party Transaction [Line Items]            
Accrued royalties   65,292   65,292    
Senior Staff [Member]            
Related Party Transaction [Line Items]            
Accrued expenses related party   $ 3,202,496   $ 3,082,363    
CEO [Member] | Related Party [Member]            
Related Party Transaction [Line Items]            
Loans payable amount           $ 1,657,000
Loans received bear interest           3.00%
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