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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended September 30, 2023

 

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

 

For the transition period from ______ to _______

 

Commission File Number 000-56047

 

ADM ENDEAVORS, INC.

(Exact name of registrant as specified in its charter)

 

Nevada   45-0459323
(State of incorporation)   (I.R.S. Employer Identification No.)

 

5941 Posey Lane

Haltom City, Texas 76117

(Address of principal executive offices)

 

(817) 840-6271

(Registrant’s telephone number)

 

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

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
N/A   N/A   N/A

 

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 such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

As of November 14, 2023, there were 156,537,143 shares of the registrant’s $0.001 par value common stock issued, issuable, and outstanding.

 

 

 

 

 

 

ADM ENDEAVORS, INC.

 

TABLE OF CONTENTS   Page
       
PART I. FINANCIAL INFORMATION   3
       
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)   4
       
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS   17
       
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK   19
       
ITEM 4. CONTROLS AND PROCEDURES   19
       
PART II. OTHER INFORMATION   20
       
ITEM 1. LEGAL PROCEEDINGS   20
       
ITEM 1A. RISK FACTORS   20
       
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS   20
       
ITEM 3. DEFAULTS UPON SENIOR SECURITIES   20
       
ITEM 4. MINE SAFETY DISCLOSURES   20
       
ITEM 5. OTHER INFORMATION   20
       
ITEM 6. EXHIBITS   21

 

2

 

 

PART I – FINANCIAL INFORMATION

 

TABLE OF CONTENTS

 

Index to Financial Statements   Page
     
Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 (unaudited)   4
     
Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022 (unaudited)   5
     
Consolidated Statements of Shareholders’ Equity for the nine months ended September 30, 2023 and 2022 (unaudited)   6
     
Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 (unaudited)   7
     
Notes to the Consolidated Financial Statements (unaudited)   8

 

3

 

 

ITEM 1. FINANCIAL STATEMENTS

 

ADM Endeavors, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

 

   September 30,   December 31, 
   2023   2022 
         
ASSETS          
Current assets          
Cash  $498,338   $234,235 
Accounts receivable, net   310,708    358,376 
Other receivable, related party   -    28,446 
Inventory   231,841    168,082 
Prepaid expenses and other current assets   24,449    41,366 
Total current assets   1,065,336    830,505 
           
Noncurrent assets          
Property and equipment, net   3,178,307    2,830,308 
Right of use asset - operating lease   25,577    50,664 
Goodwill   688,778    688,778 
           
Total assets  $4,957,998   $4,400,255 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
Current liabilities          
Accounts payable  $70,599   $72,291 
Accounts payable - related party   14,756    - 
Accrued expenses   329,247    316,349 
Income tax payable   10,940    5,859 
Current portion of notes payable - secured   141,667    - 
Current portion of right of use liability - operating lease   26,142    33,682 
Convertible notes payable   106,092    106,092 
Derivative liabilities   233,672    307,973 
           
Total current liabilities   933,115    842,246 
           
Noncurrent liabilities          
Right of use liability - operating lease, net current portion   -    16,982 
Deferred tax liability   65,185    26,460 
Notes payable - secured, net of discount   1,242,628    1,075,957 
           
Total noncurrent liabilities   1,307,813    1,119,399 
           
Total liabilities   2,240,928    1,961,645 
           
Commitments and contingencies   -    - 
           
Stockholders’ equity          
          
Preferred stock, $0.001 par value, 80,000,000 shares authorized, 2,000,000 shares outstanding as of September 30, 2023 and December 31, 2022   2,000    2,000 
Common stock, $0.001 par value, 800,000,000 shares authorized, 156,537,143 and 153,652,143 shares issued and outstanding at September 30, 2023 and December 31, 2022   156,537    153,652 
Additional paid-in capital   1,430,762    1,317,747 
Retained earnings   1,127,771    965,211 
Total stockholders’ equity   2,717,070    2,438,610 
           
Total liabilities and stockholders’ equity  $4,957,998   $4,400,255 

 

See accompanying notes to unaudited consolidated financial statements.

 

4

 

 

ADM Endeavors, Inc. and Subsidiaries

Consolidated Statements of Operations

For the Three and Nine Months Ended September 30, 2023 and 2022

(Unaudited)

 

   2023   2022   2023   2022 
  

For the three months ended

September 30,

  

For the nine months ended

September 30,

 
   2023   2022   2023   2022 
                 
Revenue                    
School uniform sales  $1,070,216   $963,156   $1,263,879   $1,162,928 
Promotional sales   913,977    1,359,423    2,652,008    3,515,707 
Total revenue   1,984,193    2,322,579    3,915,887    4,678,635 
                     
Operating expenses                    
Direct costs of revenue   1,389,608    1,550,069    2,703,206    3,033,065 
General and administrative   400,658    287,801    1,065,307    1,036,045 
Marketing and selling   7,793    14,201    28,300    47,182 
                     
Total operating expenses   1,798,059    1,852,071    3,796,813    4,116,292 
                     
Operating income   186,134    470,508    119,074    562,343 
                     
Other income (expense)                    
Gain (loss) on change in fair value of derivative liabilities   (7,066)   (21,734)   74,301    (13,866)
Gain on sale of fixed assets   22,639    -    22,639    - 
Other income   2,673    2,260    7,573    15,800 
Interest expense   (9,130)   (27,936)   (19,538)   (34,034)
                     
Total other income (expense)   9,116    (47,410)   84,975    (32,100)
                     
Income before tax provision   195,250    423,098    204,049    530,243 
                     
Provision for income taxes   39,641    93,415    41,489    114,263 
                     
Net income  $155,609   $329,683   $162,560   $415,980 
                     
Net income per share - basic  $0.00   $0.00   $0.00   $0.00 
Net income per share - diluted  $0.00   $0.00   $0.00   $0.00 
                     
Weighted average number of shares outstanding                    
basic   156,537,143    153,652,143    155,329,286    153,652,143 
diluted   156,537,143    153,652,143    155,329,286    153,652,143 

 

See accompanying notes to unaudited consolidated financial statements.

 

5

 

 

ADM Endeavors, Inc. and Subsidiaries

Consolidated Statements of Shareholders’ Equity

For the Nine Months Ended September 30, 2023 and 2022

(Unaudited)

 

   Shares   Amount   Shares   Amount   Capital   Earnings   Total 
                   Additional         
   Preferred Stock   Common Stock   Paid In   Retained     
   Shares   Amount   Shares   Amount   Capital   Earnings   Total 
                             
Balance at December 31, 2022   2,000,000   $2,000    153,652,143   $153,652   $1,317,747   $965,211   $2,438,610 
Net loss   -    -    -    -    -    (110,597)   (110,597)
Balance at March 31, 2023   2,000,000    2,000    153,652,143    153,652    1,317,747    854,614    2,328,013 
Stock-based compensation   -    -    2,885,000    2,885    113,015    -    115,900 
Net income   -    -    -    -    -    117,548    117,548 
Balance at June 30, 2023   2,000,000    2,000    156,537,143    156,537    1,430,762    972,162    2,561,461 
Net income   -    -    -    -    -    155,609    155,609 
Balance at September 30, 2023   2,000,000   $2,000    156,537,143   $156,537   $1,430,762   $1,127,771   $2,717,070 
                                    
Balance at December 31, 2021   2,000,000   $2,000    153,652,143   $153,652   $1,317,747   $815,459   $2,288,858 
Net income   -    -    -    -    -    16,430    16,430 
Balance at March 31, 2022   2,000,000    2,000    153,652,143    153,652    1,317,747    831,889    2,305,288 
Net income   -    -    -    -    -    69,867    69,867 
Balance at June 30, 2022   2,000,000    2,000    153,652,143    153,652    1,317,747    901,756    2,375,155 
Net income   -    -    -    -    -    329,683    329,683 
Balance at September 30, 2022   2,000,000   $2,000    153,652,143   $153,652   $1,317,747   $1,231,439   $2,704,838 

 

See accompanying notes to unaudited consolidated financial statements.

 

6

 

 

ADM Endeavors, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2023 and 2022

(Unaudited)

 

   2023   2022 
Cash flows from operating activities:          
Net income  $162,560   $415,980 
Adjustments to reconcile net income to net cash provided by continuing operations:          
Stock-based compensation   115,900    - 
Depreciation and amortization   45,877    26,618 
Bad debt expense   4,408    1,340 
Amortization of debt discount   12,028    - 
Amortization of right of use asset - operating lease   25,087    - 
Change in derivative liability   (74,301)   13,866 
Gain on fixed assets   (22,639)   - 
Changes in operating assets and liabilities:          
Accounts receivable   43,260    55,281 
Other receivable, related party   28,446    1,407 
Inventory   (53,759)   15,159 
Prepaid expenses and other assets   18,407    7,704 
Accounts payable   (1,692)   22,156 
Accounts payable - related party   14,756    - 
Accrued expenses   12,898    103,028 
Income tax payable   5,081    114,263 
Right of use operating lease liability   (24,522)   - 
Deferred tax liability   38,725    - 
Net cash provided by operating activities   350,520    776,802 
           
Cash flows used in investing activities          
Purchase of property and equipment   (230,570)   (275,424)
Net cash used in investing activities   (230,570)   (275,424)
           
Cash flows used in financing activities:          
Repayments on note payable   (3,126)   (212,963)
Proceeds from note payable   147,279    - 
Net cash provided by (used in) financing activities   144,153    (212,963)
           
Net change in cash   264,103    288,415 
           
Cash at beginning of period   234,235    418,413 
           
Cash at end of period  $498,338   $706,828 
Supplemental disclosure of cash flow information:          
           
Cash paid for interest  $32,975   $5,943 
           
Cash paid for taxes  $-   $- 
           
Non-cash investing and financing activities:          
Capitalized loan costs  $7,030   $- 
Acquisition of Innovative Impression, Inc.  $143,637   $- 
Non-cash addition to note payable  $1,490   $- 

 

See accompanying notes to unaudited consolidated financial statements.

 

7

 

 

ADM ENDEAVORS, INC. and Subsidiaries

Notes to the Consolidated Financial Statements

September 30, 2023

(Unaudited)

 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

On January 4, 2001, we were incorporated in North Dakota as ADM Enterprises, Inc. On May 9, 2006, the Company changed its name to ADM Endeavors, Inc. (“ADM Endeavors,” or the “Company,” “we,” “us,” or “our”) and its domicile to the state of Nevada. On July 1, 2008, the Company acquired all of the assets of ADM Enterprises, LLC (“ADM Enterprises”), a sole proprietorship owned by Ardell and Tammera Mees, in exchange for 10,000,000 newly issued shares of our common stock. As a result, ADM Enterprises became a wholly owned subsidiary of the Company. ADM then provided installation services to grocery décor and design companies primarily in North Dakota.

 

On April 19, 2018, the Company acquired Just Right Products, Inc. (“JRP”), a Texas corporation. JRP was incorporated on January 17, 2010. The acquisition of 100% of JRP from its sole shareholder, Marc Johnson, was through a stock exchange whereby the Company issued 2,000,000 shares of restricted Series A preferred stock (the “Acquisition Shares”) to Mr. Johnson in consideration of the acquisition of 100% of JRP from Mr. Johnson. Each share of the Series A preferred stock is convertible into ten shares of common stock, and each share has 100 votes on a fully diluted basis. The Acquisition Shares represented 61% of the voting shares of the Company, and thus there was a change of voting control in connection with the transaction, and the transaction was accounted for as a reverse acquisition.

 

On April 27, 2023, the Company entered into an Asset Purchase Agreement with Innovative Impressions, Inc., a Texas corporation (the “Seller”), pursuant to which the Company acquired (the “Acquisition”) embroidery equipment, inventory, and related assets from the Seller.

 

JRP is focused on being an added value reseller with concentration in embroidery, screen printing, importing and uniforms for businesses, schools and individuals in the State of Texas.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The Company follows the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and has a year-end of December 31.

 

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

 

The unaudited consolidated financial statements of the Company for the three and nine month periods ended September 30, 2023 and 2022 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2022, was derived from the audited financial statements included in the Company’s financial statements as of and for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2023. These financial statements should be read in conjunction with that report.

 

8

 

 

Principles of Consolidation

 

The accompanying unaudited consolidated financial statements include all of the accounts of the Company and its wholly owned subsidiary, JRP, at September 30, 2023. All significant intercompany balances and transactions have been eliminated.

 

Use of Estimates

 

The preparation of the Consolidated Financial Statements in accordance with U.S. GAAP requires management to make use of certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reported periods. The Company bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Significant estimates are related to allowance for doubtful accounts, goodwill, derivative liability, stock-based compensation and deferred tax valuations.

 

Stock-Based Compensation

 

Stock-based compensation expense is recorded in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, for stock and stock options awarded in return for services rendered. The expense is measured at the grant-date fair value of the award and recognized as compensation expense on a straight-line basis over the service period, which is the vesting period. The Company estimates forfeitures that it expects will occur and records expense based upon the number of awards expected to vest.

 

Cash Equivalents

 

The Company considers all highly liquid investments with an original maturity of nine months or less when purchased to be cash equivalents. At September 30, 2023, and December 31, 2022, the Company had no cash equivalents. Periodically, the Company may carry cash balances at financial institutions in excess of the federally insured limit of $250,000. The amount in excess of the FDIC insurance at September 30, 2023, was $243,200. The Company has not experienced losses on these accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.

 

Allowance for Doubtful Accounts

 

The Company establishes an allowance for doubtful accounts to ensure trade and notes receivable are not overstated due to non-collectability. The Company’s allowance is based on a variety of factors, including age of the receivable, significant one-time events, historical experience, and other risk considerations. The Company had no allowance at September 30, 2023, and December 31, 2022. The Company had bad debt expense of $4,408 and $1,340 for the nine months ended September 30, 2023, and 2022, respectively.

 

Inventory

 

Inventory is valued at the lower of cost or net realizable value. Cost is determined using a weighted-average cost method. The Company decreases the value of inventory for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value, based upon an aging analysis of the inventory on hand, specifically known inventory-related risks, and assumptions about future demand and market conditions. The Company has inventory of $231,841 and $168,082 as of September 30, 2023, and December 31, 2022, respectively.

 

Four vendors accounted for approximately 82% of inventory purchases during the nine months ended September 30, 2023. Three vendors accounted for approximately 66% of inventory purchases during the nine months ended September 30, 2022.

 

9

 

 

Derivative Instruments

 

Derivatives are measured at their fair value on the balance sheet. In determining the appropriate fair value, the Company uses the Black-Scholes-Merton option pricing model. Changes in fair value are recorded in Other Income (Expense) of the consolidated statements of operations.

 

Fair Value of Financial Instruments

 

The Company measures its financial assets and liabilities in accordance with U.S. GAAP. For certain of our financial instruments, including cash, accounts payable, accrued expenses, and short-term loans the carrying amounts approximate fair value due to their short maturities.

 

We follow accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

 

  Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
     
  Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
     
  Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

 

The Company adopted the provisions of FASB ASC 820 (the Fair Value Topic) which defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and expands disclosures about fair value measurements.

 

The Company had no assets or liabilities other than derivative liabilities measured at fair value on a recurring basis at September 30, 2023, and December 31, 2022.

 

Fixed Assets

 

Fixed assets are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method over the assets estimated useful life. Upon the sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in consolidated statements of operations.

 

 

Classification   Estimated Useful Lives
Equipment   5 to 7 years
Leasehold improvements   Shorter of useful life or lease term
Furniture and fixtures   4 to 7 years
Websites   3 years

 

Goodwill

 

Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible assets of businesses acquired. Goodwill is not amortized, but instead assessed for impairment. We perform our annual impairment review of goodwill in our fiscal fourth quarter or when a triggering event occurs between annual impairment tests. No impairment was recorded in fiscal 2023 or 2022 as a result of our qualitative assessments over our single reporting segment.

 

10

 

 

The Company performs a qualitative assessment for each of its reporting units to determine if the two-step process for impairment testing is required. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would then evaluate the recoverability of goodwill using a two-step impairment test approach at the reporting unit level. In the first step, the fair value for the reporting unit is compared to its book value including goodwill. In the case that the fair value of the reporting unit is less than book value, a second step is performed which compares the implied fair value of the reporting unit’s goodwill to the book value of the goodwill. The fair value for the goodwill is determined based on the difference between the fair values of the reporting unit and the net fair values of the identifiable assets and liabilities of such reporting unit. If the implied fair value of the goodwill is less than the book value, the difference is recognized as impairment.

 

Impairment of Long-lived Assets

 

The Company follows paragraph 360-10-05-4 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, such as intellectual property, are required to be reviewed for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

 

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

 

The Company determined that there were no impairments of long-lived assets at September 30, 2023 and December 31, 2022.

 

Revenue Recognition

 

We recognize revenue for merchandise sales, net of expected returns and sales tax, at the time of in-store purchase or delivery of the product to our customer. When merchandise is shipped to our guests, we estimate receipt based on historical experience. Revenue is deferred and a liability is established for sales returns based on historical return rates and sales for the return period. We recognize an asset and corresponding adjustment to cost of sales for our right to recover returned merchandise. At each financial reporting date, we assess our estimates of expected returns, refund liabilities and return assets. For merchandise sold in our stores and online, tender is accepted at the point of sale. When we receive payment before the guest has taken possession of the merchandise, the amount received is recorded as deferred revenue until the transaction is complete. Our performance obligations for unfulfilled merchandise orders are typically satisfied within one week. Shipping and handling fees charged to guests relate to fulfilment activities and are included in net sales with the corresponding costs recorded in cost of sales.

 

Cost of Sales

 

Cost of sales includes the actual cost of merchandise sold and services performed; the cost of transportation of merchandise from vendors to our distribution network, stores, or customers; shipping and handling costs from our stores or distribution network to customers; and the operating cost and depreciation of our sourcing and distribution network and online fulfilment centers.

 

11

 

 

Net Income per Share

 

The Company computes basic and diluted income per share amounts pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic income per share is computed by dividing net income available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted income per share is computed by dividing net income available to common shareholders by the diluted weighted average number of shares of common stock during the period. The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially diluted debt or equity.

 

The dilutive effect of outstanding convertible securities and preferred stock is reflected in diluted earnings per share by application of the if-converted method.

 

During the three and nine months ended September 30, 2023 and 2022, 8,893,496 and 5,226,207 shares issuable upon the conversion of convertible note, respectively, 20,000,000 shares issuable upon the conversion of preferred shares, were considered for their dilutive effects but were determined to be anti-dilutive.

 

Income Taxes

 

The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carryforwards and their respective tax bases.

 

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income (loss) in the years in which those temporary differences are expected to be recovered or settled.

 

The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.

 

Tax benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain a position taken on an income tax return. The Company has no liability for uncertain tax positions as of September 30, 2023, and December 31, 2022. Interest and penalties, if any, related to unrecognized tax benefits would be recognized as interest expense. The Company does not have any accrued interest or penalties associated with unrecognized tax benefits, nor was any significant interest expense recognized during the periods ended September 30, 2023 and 2022.

 

Segment Information

 

In accordance with the provisions of ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information,” the Company is required to report financial and descriptive information about its reportable operating segments. The Company has one operating segment as of September 30, 2023, and December 31, 2022.

 

Effect of Recent Accounting Pronouncements

 

Recently Issued Accounting Standards Not Yet Adopted

 

The Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that no other pronouncements will have a significant effect on its financial statements.

 

NOTE 3 – COMMITMENTS AND CONTINGENCIES

 

Legal Matters

 

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of November 14, 2023, there were no pending or threatened lawsuits.

 

12

 

 

Franchise Agreement

 

The Company has a franchise agreement effective February 19, 2014, expiring in February 2024, with a right to renew for an additional five years to operate stores and websites in the Company’s exclusive territory. The Company is obligated to pay 5% of gross revenue for use of systems and manuals.

 

During the nine months ended September 30, 2023, and 2022, the Company paid $60,072 and $62,495, respectively, for the franchise agreement.

 

NOTE 4 – FIXED ASSETS

 

Fixed assets and finance lease right of use assets, stated at cost, less accumulated depreciation at September 30, 2023, and December 31, 2022, consisted of the following:

 

 

   September 30, 2023   December 31, 2022 
Land  $970,455   $970,455 
Equipment   668,847    485,958 
Autos and trucks   44,244    95,246 
Construction in process   1,643,349    1,413,531 
Land and building – rental property   256,387    256,388 
           
Less: accumulated depreciation   (404,975)   (391,270)
Property and equipment, net  $3,178,307   $2,830,308 

 

Depreciation expense for the nine months ended September 30, 2023, and 2022, was $45,877 and $26,618, respectively.

 

NOTE 5 – CONVERTIBLE NOTE PAYABLE AND NOTES PAYABLE

 

Convertible Notes Payable

 

On April 1, 2018, the Company assumed a convertible promissory note in connection with the reverse acquisition. The Company received total funding of $106,092 as of December 31, 2018. The note had fees of $53,046 which were recorded as a discount to the convertible promissory note and are being amortized over the life of the loan using the effective interest method. The maturity of the note is March 5, 2023. On March 5, 2023, the note was extended to September 5, 2023.

 

The note is convertible into common stock at a price of 35% of the lowest three trading prices during the ten days prior to conversion. As of September 30, 2023, the convertible debt was convertible into 8,893,496 common shares.

 

The note balance was $106,092 as of September 30, 2023, and December 31, 2022.

 

Derivative liabilities

 

The conversion features embedded in the convertible notes were evaluated to determine if such conversion feature should be bifurcated from its host instrument and accounted for as a freestanding derivative. In the convertible notes with variable conversion terms, the conversion feature was accounted for as a derivative liability. The derivatives associated with the term convertible notes were recognized as a discount to the debt instrument and the discount is amortized over the expected life of the notes with any excess of the derivative value over the note payable value recognized as additional interest expense at the issuance date.

 

The following table presents information about the Company’s liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of September 30, 2023, and December 31, 2022:

 

 

               Fair value at 
   Level 1   Level 2   Level 3   September 30, 2023 
Liabilities:                          
Derivative liabilities  $-   $       -   $233,672   $233,672 

 

13

 

 

               Fair value at 
   Level 1   Level 2   Level 3   December 31, 2022 
Liabilities:                    
Derivative liabilities  $         -   $             -   $307,973   $307,973 

 

As of September 30, 2023, and December 31, 2022, the derivative liability was calculated using the Black-Scholes method over the expected terms of the convertible debt and the following assumptions: volatility of 100%, exercise price of $0.0119 and $0.0155, and risk-free rate of 5.47% and 5.53%, respectively. Included in gain on change in fair value of derivative liabilities in the accompanying consolidated statements of operations is expense arising from the gain on change in fair value of the derivatives of $74,301 and a derivatives loss of $13,866 during the nine months ended September 30, 2023, and 2022, respectively.

 

 

Fair value at December 31, 2022  $307,973 
Gain on change in fair value of derivative liabilities   (74,301)
Fair value at September 30, 2023  $233,672 

 

Notes Payable

 

On October 25, 2022, the Company entered into a secured promissory note in the amount up of $4,618,960. The note is secured by the deed of trust on the property and bears interest at 5.5% and is due on October 25, 2032. On October 25, 2027, the rate shall be adjusted to the daily rate reported in the Credit Markets section (or similar section) of The Wall Street Journal as the U.S. “Prime Rate” (“Index”), as announced from time to time, without notice to Maker, plus one percent (1.00%) (the sum being the “Adjusted Rate”); provided that in no event shall the Rate or Adjusted Rate exceed the lesser of eighteen percent (18%) per annum or the maximum rate permitted under applicable law. Monthly payments of accrued and unpaid interest shall commence on November 25, 2022, and continue on the same date of each succeeding calendar month through and including April 25, 2024. Thereafter, monthly principal and interest (“Payments”) in the amount of $26,458.87, which is an amount necessary to amortize the stated principal balance. The Company recorded $94,072 of loan cost as a debt discount and will be amortized over the life of the note. During the nine months ended September 30, 2023, the Company capitalized $7,030 of loan costs and $52,398 of interest related to this note. As of September 30, 2023, the loan balance was $1,228,630, net of $85,316 of debt discount.

 

On April 27, 2023, the Acquisition (as defined in Note 11 below) closed, and the Company issued the Note (as defined in Note 11 below) to the Seller’s principal, Robert Breese. The Company entered into a Pledge and Security Agreement with Mr. Breese (the “Security Agreement”), and the parties agreed that the Acquisition would be considered effective as of May 1, 2023. The Note does not bear interest except upon default, and it is payable in 24 equal consecutive monthly installments of $8,333 beginning May 1, 2023, with the final payment due on April 1, 2025. Pursuant to the Security Agreement, the Company’s payment obligations under the Note are secured by a security interest in the Assets granted to Mr. Breese. The Company recorded $56,363 of loan cost as a debt discount and will be amortized over the life of the note. During the nine months ended September 30, 2023, the Company amortized $12,028 of debt discount related to this note. As of September 30, 2023, the loan balance was $155,665, net of $44,335 of debt discount.

 

As of September 30, 2023, the secured notes payable balance was $1,384,294, consisting of long term notes payable of $1,242,628 and current portion of notes payable of $141,667. As of December 31, 2022, the secured notes payable balance was $1,075,957, consisting of long term notes payable of $1,075,957 and current portion of notes payable of $0.

 

14

 

 

NOTE 6 – ACCRUED EXPENSES

 

The Company had total accrued expenses of $329,247 and $316,349 as of September 30, 2023, and December 31, 2022, respectively. See breakdown below of accrued expenses:

 

 

   September 30,
2023		   December 31,
2022		 
Credit cards payable  $150,833   $150,107 
Accrued interest   93,273    80,949 
Other accrued expenses   85,141    85,293 
Total accrued expenses  $329,247   $316,349 

 

NOTE 7 – RELATED PARTY TRANSACTIONS

 

The majority shareholder, director and officer, is the owner of M & M Real Estate, Inc. (“M & M”). M & M leases the Haltom City, Texas facility to the Company. The monthly lease payment, under a month-to-month lease, is currently $6,500. The Company incurred lease expense, including equipment rental expense of $68,750 and $66,110 to M & M for the nine months ended September 30, 2023, and 2022, respectively.

 

NOTE 8 – STOCKHOLDERS’ EQUITY

 

Our Articles of Incorporation authorize the issuance of 800,000,000 shares of common stock and 80,000,000 shares of preferred stock, $0.001 par value per share. There were 156,537,143 and 153,652,143 outstanding shares of common stock at September 30, 2023, and December 31, 2022, respectively. There were 2,000,000 outstanding shares of preferred stock as of September 30, 2023, and December 31, 2022, respectively. Each share of preferred stock has 100 votes per share and is convertible into 10 shares of common stock. The preferred stock pays dividends equal with common stock and has preferential liquidation rights to common stockholders.

 

On April 1, 2023, the Company entered into an investor relations agreement and issued 300,000 shares of common stock for services from April 1, 2023, through September 30, 2023. The Company recognized $15,900 of expense related to this agreement.

 

On April 27, 2023, the Company also entered into an Independent Consulting Agreement with Mr. Breese, pursuant to which (i) Mr. Breese would provide embroidery industry consulting and sales services to the company for an initial term of two years, and (ii) Mr. Breese would be paid 20% sales commissions and $100,000 of Company stock, valued as of May 1, 2023, which totaled 2,585,000 shares of common stock.

 

NOTE 9 – CONCENTRATION OF CUSTOMERS

 

Concentration of Revenue

 

For the nine months ended September 30, 2023, no customer made up over 10% of revenues, and for the nine months ended September 30, 2022, one customer made up 27% of revenues.

 

Concentration of accounts receivable

 

Two customers accounted for 22% of accounts receivable as of September 30, 2023. Two customers accounted for 46% of accounts receivable as of December 31, 2022.

 

15

 

 

NOTE 10 – LEASE LIABILITY

 

Operating Leases

 

The Company leases office space. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Leases with initial terms in excess of 12 months are recorded as operating or financing leases in our consolidated balance sheet. Lease expense is recognized on a straight-line basis over the term of the lease. For leases beginning in 2018 and later, the Company accounts for lease components separately from the non-lease components. Most leases include one or more options to renew. The exercise of the lease renewal options is at the sole discretion of the Company. The depreciable life of the assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

 

The Company leases approximately 18,000 square feet of space in Haltom City, Texas, pursuant to a month-to-month lease. This facility serves as our corporate headquarters, manufacturing facility and showroom. The lease is with M & M Real Estate, Inc. (“M & M”), a company owned solely by our majority shareholder and director of the Company.

 

On October 28, 2022, the Company entered into an operating lease that expires June 30, 2024. The operating lease results in the recognition of ROU asset and lease liability on the balance sheet. ROU asset and operating lease liability are recognized based on the present value of lease payments over the lease terms of the commencement date. Because the leases do not provide an explicit or implicit rate of return, the Company determines incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments on an individual lease basis. The incremental borrowing rate for a lease is the rate of interest the Company would have to pay on a collateralized basis to borrow an amount equal to the lease payments for the asset under similar terms, which is 5.50%. The Company’s lease does not contain any material restrictive covenants. The lease has a remaining term of 1.25 years.

 

The following table provides the maturities of lease liabilities at September 30, 2023:

 

 

   Operating 
   Lease 
Maturity of Lease Liability at September 30, 2023     
2023 (three months remaining)  $8,907 
2024   17,814 
Total future undiscounted lease payments  $26,721 
Less: Amounts representing interest   (579)
Present value of lease liabilities  $26,142 

 

NOTE 11 – ASSET ACQUISITION

 

On April 27, 2023, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Innovative Impressions, Inc., a Texas corporation (the “Seller”), pursuant to which the Company acquired (the “Acquisition”) embroidery equipment, inventory, and related assets (the “Assets”), from the Seller for a $200,000 secured promissory note (with a fair value of $143,637) to the Seller or its nominee (the “Note”) that matures on April 25, 2025. The monthly payments under the agreement are due in twenty-four installments of $8,333. The Company evaluated and concluded that the assets acquired would qualify as a single identifiable asset in a business combination in accordance with ASC 805. The Company evaluated the intangible assets acquired in the acquisition and determined the value was immaterial.

 

 

       Average
   Fair Value   Estimated Life
Purchase Price:        
Notes payable, net of discount  $143,637    
Total purchase consideration  $143,637    
         
Purchase Allocation:        
Inventory  $10,000   Less than 1 year
Fixed assets   133,637   3 years
Total purchase price allocation  $143,637    

 

Pro-Forma Financial Information

 

The following unaudited pro-forma data summarizes the result of the operations for the three and nine ended September 30, 2023, and 2022, as if the acquisition from Innovative Impressions, Inc. (“Innovative Impressions”) had been completed on January 1, 2022. The pro-forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on January 1, 2023, or of results that may occur in the future.

 

 

   2023   2022   2023   2022 
   For the three months ended
September 30,		   For the nine months ended
September 30,		 
   2023   2022   2023   2022 
   Pro Forma   Pro Forma   Pro Forma   Pro Forma 
                 
Revenue  $2,077,855   $2,506,649   $4,216,762   $5,201,429 
Operating income   210,619    472,472    178,806    552,658 
Net income   180,094    331,647    222,292    406,295 
Net income per share  $0.00   $0.00   $0.00   $0.00 

 

NOTE 12 – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the filing date of this Form 10-Q and determined that no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosures in the notes thereto.

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION

 

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

 

We believe that it is important to communicate our future expectations to our security holders and to the public. This report, therefore, contains statements about future events and expectations which are “forward-looking statements” within the meaning of Sections 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934, including the statements about our plans, objectives, expectations and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You can expect to identify these statements by forward-looking words such as “may,” “might,” “could,” “would,” “will,” “anticipate,” “believe,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek” and other similar expressions. Any statement contained in this report that is not a statement of historical fact may be deemed to be a forward-looking statement. Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved.

 

Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors” section of and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and in our subsequent filings with the Securities and Exchange Commission. The following discussion of our results of operations should be read together with our financial statements and related notes included elsewhere in this report.

 

Company Overview

 

On January 4, 2001, ADM Endeavors, Inc. (“ADM Endeavors,” or the “Company,” “we,” “us,” or “our”) was incorporated in North Dakota as “ADM Enterprises, Inc.” On May 9, 2006, the Company changed its name to “ADM Endeavors, Inc.” and its domicile to the State of Nevada. On July 1, 2008, the Company acquired all of the assets of ADM Enterprises, LLC (“ADM Enterprises”) in exchange for 10,000,000 newly issued shares of Company common stock. As a result, ADM Enterprises became a wholly owned subsidiary of the Company. ADM then provided installation services to grocery décor and design companies primarily in North Dakota.

 

On April 19, 2018, the Company acquired Just Right Products, Inc. (“Just Right Products”), a Texas corporation, from its sole shareholder, Marc Johnson, through a share exchange transaction whereby the Company acquired 100% of Just Right Products and issued 2,000,000 shares of Series A Convertible Preferred stock (“Series A Preferred Stock”) to the shareholder of Just Rights Products. Each share of the Series A Preferred Stock is convertible into 10 shares of Company common stock and each share has 100 votes on a fully diluted basis. The preferred shares represented 61% of the Company’s voting shares and constituted a change of voting control of the Company, with the transaction accounted for as a reverse acquisition. As a result of the transaction, Just Right Products became a wholly owned subsidiary of the Company.

 

On January 1, 2020, the Company determined that it would discontinue its business operations in North Dakota, specifically, ADM Enterprises LLC (the “Disposed Company”). The Company transferred the Disposed Company to Ardell Mees in exchange for Mr. Mees’ assumption of the liabilities of the Disposed Company. As part of the transaction, Mr. Mees resigned from all positions with the Company and, in a private transaction, sold a significant portion of his ownership in the Company to Marc Johnson. The Company and Mr. Mees entered into an indemnification agreement pursuant to which Mr. Mees indemnified the Company for the liabilities of the Disposed Company.

 

Since that time, the Company has exclusively focused on its Just Right Productions operations, which includes a diverse vertical integrated business consisting of a retail sales division, screen print promotions, embroidery production, digital production, import wholesale sourcing, and uniforms.

 

17

 

 

On April 27, 2023, the Company entered into an Asset Purchase Agreement with Innovative Impressions, Inc., a Texas corporation (the “Seller” or “Innovative Impressions”), pursuant to which the Company acquired embroidery equipment, inventory, and related assets from the Seller, which was paid by the issuance by the Company of a $200,000 secured promissory note (with a fair value of $143,637) to the Seller’s principal.

 

For the Three Months Ended September 30, 2023, and 2022

 

Revenues

 

Our revenue was $1,984,193 for the three months ended September 30, 2023, compared to $2,322,579 for the three months ended September 30, 2022, resulting in a decrease of $338,386, or 15%. The decrease in revenue is primarily due to a first and second quarter reduction in spending from social media influencer merchandise sales.

 

Operating Expenses

 

Direct costs of revenues were $1,389,608 and $1,550,069 for the three months ended September 30, 2023, and 2022, respectively, resulting in a decrease of $160,461, or 10%. The decrease in direct costs was a direct result of the decreased sales due to the reduction in spending from social media influencers merchandise sales. The gross margin decreased from 33% during the three months ended September 30, 2022, to 30% during the three months ended September 30, 2023.

 

General and administrative expenses were $400,658 for the three months ended September 30, 2023, compared to $287,801 for the same period in 2022. The increase in 2023 general and administrative expenses of approximately 39% was primarily due to additional expenses related to the second quarter acquisition from Innovative Impressions.

 

Marketing and selling expenses were $7,793 for the three months ended September 30, 2023, compared to $14,201 for the same period in 2022. The decrease in 2023 marketing and selling expenses of approximately 45% was primarily due to the utilization of more cost-effective marketing techniques.

 

Net income was $155,609 for the three months ended September 30, 2023, compared to $329,683 for the three months ended September 30, 2022, for the reasons stated above.

 

For the Nine Months Ended September 30, 2023 and 2022

 

Revenues

 

Our revenue was $3,915,887 for the nine months ended September 30, 2023, compared to $4,678,635 for the nine months ended September 30, 2022, resulting in a decrease of $762,748, or 16%. The decrease in revenue is primarily due to a first quarter reduction in spending from social media influencer merchandise sales.

 

Operating Expenses

 

Direct costs of revenues were $2,703,206 and $3,033,065 for the nine months ended September 30, 2023, and 2022, respectively, resulting in a decrease of $329,859, or 11%. This decrease in operating costs was a direct result of decreased sales. The gross margin decreased from 35% during the nine months ended September 30, 2022, to 31% during the nine months ended September 30, 2023. The decrease in margin is primarily due to an increase of new government customers with lower margins as compared to non-government customers.

 

General and administrative expenses were $1,065,307 for the nine months ended September 30, 2023, compared to $1,036,045 for the same period in 2022.

 

Marketing and selling expenses were $28,300 for the nine months ended September 30, 2023, compared to $47,182 for the same period in 2022. The decrease in 2023 marketing and selling expenses of approximately 40% was primarily due to utilizing more cost-efficient marketing platforms.

 

18

 

 

Net income was $162,560 for the nine months ended September 30, 2023, compared to net income of $415,980 for the nine months ended September 30, 2022, for the reasons stated above.

 

Liquidity and Capital Resources

 

Liquidity and Capital Resources during the nine months ended September 30, 2023, compared to the three months ended September 30, 2022

 

We had cash provided by operations of $350,520 for the nine months ended September 30, 2023, compared to cash provided by operations of $776,802 for the nine months ended September 30, 2022. The decrease in positive cash flow from operating activities for the nine months ended September 30, 2023, was primarily attributable to a decrease in net income and changes in inventory.

 

We had cash used in investing activities of $230,570 for the nine months ended September 30, 2023, and $275,424 for the nine months ended September 30, 2022. The change in cash flow from investing activities for the nine months ended September 30, 2023, was attributable to a decrease in the purchase of property and equipment in 2023.

 

We had cash provided by financing activities of $144,153 for the nine months ended September 30, 2023, compared to cash used in financing activities of $212,963 for the same period in 2022. Cash provided by financing activities consisted primarily of proceeds from note payable offset with repayments on notes payable.

 

We will likely have to raise funds to pay for growth and acquisitions. We may have to borrow money from shareholders or issue debt or equity or enter into a strategic arrangement with a third party. There can be no assurance that additional capital will be available to us. We currently have no arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.

 

Critical Accounting Policies

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experiences and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions and conditions. We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.

 

See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 1, “Summary of Significant Accounting Policies” in our audited financial statements for the year ended December 31, 2022, included in our Annual Report on Form 10-K as filed on March 29, 2023, for a discussion of our critical accounting policies and estimates.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

The Company does not currently maintain controls and procedures that are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified by the Commission’s rules and forms.

 

19

 

 

Disclosure controls and procedures would include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

 

Under the supervision and with the participation of management, including the Company’s Chief Executive Officer, the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2023, have been evaluated, and, based upon this evaluation, the Company’s Chief Executive Officer has concluded that these controls and procedures are not effective in providing reasonable assurance of compliance.

 

Changes in Internal Control over Financial Reporting

 

Management will continue to monitor and evaluate the effectiveness of the Company’s internal controls and procedures and the Company’s internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. There were no changes in Internal Control Over Financial Reporting during the quarter ended September 30, 2023.

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

 

There are no pending legal proceedings in which we are a party or in which any of our directors, officers or affiliates, any owner of record or beneficiary of more than 5% of any class of our voting securities is a party adverse to us or has a material interest adverse to us. Our property is not the subject of any pending legal proceedings.

 

ITEM 1A. RISK FACTORS.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not Applicable.

 

ITEM 5. OTHER INFORMATION.

 

None.

 

20

 

 

ITEM 6. EXHIBITS

 

Exhibit Number   Description
     
3.1   Articles of Incorporation (incorporated by reference to our Registration Statement on Form S-1, filed on October 8, 2013)
3.2   Bylaws (incorporated by reference to our Registration Statement on Form S-1, filed on October 8, 2013)
10.1   Texas Commercial Lease between M&M Real Estate Inc. and Just Right Products Inc., dated January 1, 2018 (incorporated by reference to our Annual Report on Form 10-K, filed on March 15, 2022)
10.2   Construction Loan Agreement, dated as of October 25, 2022, by and among ADM Endeavors, Inc., Just Right Products, Inc., and CapTex Bank (incorporated by reference to our Current Report on Form 8-K, filed on November 1, 2022)
10.3   Promissory Note, dated as of October 25, 2022, by ADM Endeavors, Inc., and Just Right Products, Inc., in favor of CapTex Bank (incorporated by reference to our Current Report on Form 8-K, filed on November 1, 2022)
10.4   Asset Purchase Agreement, dated April 27, 2023, by Just Right Products, Inc., and Innovative Impressions, Inc. (incorporated by reference to our Current Report on Form 8-K, filed on April 28, 2023)
10.5   Promissory Note, dated April 27, 2023, by Just Right Products, Inc., in favor of Robert Breese (incorporated by reference to our Current Report on Form 8-K, filed on April 28, 2023)
10.6   Pledge and Security Agreement, dated April 27, 2023, by Just Right Products, Inc., and Robert Breese (incorporated by reference to our Current Report on Form 8-K, filed on April 28, 2023)
10.7   Independent Consulting Agreement, dated April 27, 2023, by Just Right Products, Inc., and Robert Breese (incorporated by reference to our Current Report on Form 8-K, filed on April 28, 2023)
31.1   Certification of Principal Executive Officer and Principal Accounting Officer of ADM Endeavors, Inc. required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1   Certification of Principal Executive Officer and Principal Accounting Officer of ADM Endeavors, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 Of 18 U.S.C. 63
     
101.INS (2)   Inline XBRL Taxonomy Extension Instance Document
101.SCH (2)   Inline XBRL Taxonomy Extension Schema Document
101.CAL (2)   Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF (2)   Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB (2)   Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE (2)   Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 (2)   Cover Page Interactive Data file

 

(1) Filed herewith.

(2) XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

21

 

 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  ADM ENDEAVORS, INC.
     
Dated: November 14, 2023   /s/ Marc Johnson
  By: Marc Johnson
  Its: Chief Executive Officer and Interim Chief Financial Officer

 

22

 

Exhibit 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

AND PRINCIPAL ACCOUNTING OFFICER

REQUIRED BY RULE 13A-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 AS AMENDED,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Marc Johnson, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of ADM Endeavors, 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 consolidated 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, 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 consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

 

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

 

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

 

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

 

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

 

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

 

Date: November 14, 2023

 

By: /s/ Marc Johnson  
  Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Accounting Officer  

 

 

 

 

Exhibit 32.1

 

CERTIFICATION OF

PRINCIPAL EXECUTIVE OFFICER

AND PRINCIPAL ACCOUNTING OFFICER

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

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

 

I, Marc Johnson, Chief Executive Officer and Chief Financial Officer of ADM Endeavors, Inc. (the “Company”), certify, pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) the Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

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

 

Date: November 14, 2023

 

By: /s/ Marc Johnson  
  Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Accounting Officer)  

 

 

v3.23.3
Cover - shares
 9 Months Ended
Sep. 30, 2023
Nov. 14, 2023
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Sep. 30, 2023  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2023  
Current Fiscal Year End Date --12-31  
Entity File Number 000-56047  
Entity Registrant Name ADM ENDEAVORS, INC.  
Entity Central Index Key 0001588014  
Entity Tax Identification Number 45-0459323  
Entity Incorporation, State or Country Code NV  
Entity Address, Address Line One 5941 Posey Lane  
Entity Address, City or Town Haltom City  
Entity Address, State or Province TX  
Entity Address, Postal Zip Code 76117  
City Area Code (817)  
Local Phone Number 840-6271  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   156,537,143
v3.23.3
Consolidated Balance Sheets (Unaudited) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Current assets    
Cash $ 498,338 $ 234,235
Accounts receivable, net 310,708 358,376
Inventory 231,841 168,082
Prepaid expenses and other current assets 24,449 41,366
Total current assets 1,065,336 830,505
Noncurrent assets    
Property and equipment, net 3,178,307 2,830,308
Right of use asset - operating lease 25,577 50,664
Goodwill 688,778 688,778
Total assets 4,957,998 4,400,255
Current liabilities    
Accrued expenses 329,247 316,349
Income tax payable 10,940 5,859
Current portion of notes payable - secured 141,667
Current portion of right of use liability - operating lease 26,142 33,682
Convertible notes payable 106,092 106,092
Derivative liabilities 233,672 307,973
Total current liabilities 933,115 842,246
Noncurrent liabilities    
Right of use liability - operating lease, net current portion 16,982
Deferred tax liability 65,185 26,460
Notes payable - secured, net of discount 1,242,628 1,075,957
Total noncurrent liabilities 1,307,813 1,119,399
Total liabilities 2,240,928 1,961,645
Commitments and contingencies
Stockholders’ equity    
Preferred stock, $0.001 par value, 80,000,000 shares authorized, 2,000,000 shares outstanding as of September 30, 2023 and December 31, 2022 2,000 2,000
Common stock, $0.001 par value, 800,000,000 shares authorized, 156,537,143 and 153,652,143 shares issued and outstanding at September 30, 2023 and December 31, 2022 156,537 153,652
Additional paid-in capital 1,430,762 1,317,747
Retained earnings 1,127,771 965,211
Total stockholders’ equity 2,717,070 2,438,610
Total liabilities and stockholders’ equity 4,957,998 4,400,255
Related Party [Member]    
Current assets    
Other receivable, related party 28,446
Current liabilities    
Accounts payable 14,756
Nonrelated Party [Member]    
Current liabilities    
Accounts payable $ 70,599 $ 72,291
v3.23.3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares
Sep. 30, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 80,000,000 80,000,000
Preferred stock, shares outstanding 2,000,000 2,000,000
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 800,000,000 800,000,000
Common stock, shares issued 156,537,143 153,652,143
Common stock, shares outstanding 156,537,143 153,652,143
v3.23.3
Consolidated Statements of Operations (Unaudited) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Revenue        
Total revenue $ 1,984,193 $ 2,322,579 $ 3,915,887 $ 4,678,635
Operating expenses        
Direct costs of revenue 1,389,608 1,550,069 2,703,206 3,033,065
General and administrative 400,658 287,801 1,065,307 1,036,045
Marketing and selling 7,793 14,201 28,300 47,182
Total operating expenses 1,798,059 1,852,071 3,796,813 4,116,292
Operating income 186,134 470,508 119,074 562,343
Other income (expense)        
Gain (loss) on change in fair value of derivative liabilities (7,066) (21,734) 74,301 (13,866)
Gain on sale of fixed assets 22,639 22,639
Other income 2,673 2,260 7,573 15,800
Interest expense (9,130) (27,936) (19,538) (34,034)
Total other income (expense) 9,116 (47,410) 84,975 (32,100)
Income before tax provision 195,250 423,098 204,049 530,243
Provision for income taxes 39,641 93,415 41,489 114,263
Net income $ 155,609 $ 329,683 $ 162,560 $ 415,980
Net income per share - basic $ 0.00 $ 0.00 $ 0.00 $ 0.00
Net income per share - diluted $ 0.00 $ 0.00 $ 0.00 $ 0.00
Weighted average number of shares outstanding        
basic 156,537,143 153,652,143 155,329,286 153,652,143
diluted 156,537,143 153,652,143 155,329,286 153,652,143
School Uniform [Member]        
Revenue        
Total revenue $ 1,070,216 $ 963,156 $ 1,263,879 $ 1,162,928
Promotional Sales [Member]        
Revenue        
Total revenue $ 913,977 $ 1,359,423 $ 2,652,008 $ 3,515,707
v3.23.3
Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($)
Preferred Stock [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Beginning balance, value at Dec. 31, 2021 $ 2,000 $ 153,652 $ 1,317,747 $ 815,459 $ 2,288,858
Balance, shares at Dec. 31, 2021 2,000,000 153,652,143      
Net income (loss) 16,430 16,430
Balance at Mar. 31, 2022 $ 2,000 $ 153,652 1,317,747 831,889 2,305,288
Balance, shares at Mar. 31, 2022 2,000,000 153,652,143      
Beginning balance, value at Dec. 31, 2021 $ 2,000 $ 153,652 1,317,747 815,459 2,288,858
Balance, shares at Dec. 31, 2021 2,000,000 153,652,143      
Net income (loss)         415,980
Balance at Sep. 30, 2022 $ 2,000 $ 153,652 1,317,747 1,231,439 2,704,838
Balance, shares at Sep. 30, 2022 2,000,000 153,652,143      
Beginning balance, value at Mar. 31, 2022 $ 2,000 $ 153,652 1,317,747 831,889 2,305,288
Balance, shares at Mar. 31, 2022 2,000,000 153,652,143      
Net income (loss) 69,867 69,867
Balance at Jun. 30, 2022 $ 2,000 $ 153,652 1,317,747 901,756 2,375,155
Balance, shares at Jun. 30, 2022 2,000,000 153,652,143      
Net income (loss) 329,683 329,683
Balance at Sep. 30, 2022 $ 2,000 $ 153,652 1,317,747 1,231,439 2,704,838
Balance, shares at Sep. 30, 2022 2,000,000 153,652,143      
Beginning balance, value at Dec. 31, 2022 $ 2,000 $ 153,652 1,317,747 965,211 2,438,610
Balance, shares at Dec. 31, 2022 2,000,000 153,652,143      
Net income (loss) (110,597) (110,597)
Balance at Mar. 31, 2023 $ 2,000 $ 153,652 1,317,747 854,614 2,328,013
Balance, shares at Mar. 31, 2023 2,000,000 153,652,143      
Beginning balance, value at Dec. 31, 2022 $ 2,000 $ 153,652 1,317,747 965,211 2,438,610
Balance, shares at Dec. 31, 2022 2,000,000 153,652,143      
Net income (loss)         162,560
Balance at Sep. 30, 2023 $ 2,000 $ 156,537 1,430,762 1,127,771 2,717,070
Balance, shares at Sep. 30, 2023 2,000,000 156,537,143      
Beginning balance, value at Mar. 31, 2023 $ 2,000 $ 153,652 1,317,747 854,614 2,328,013
Balance, shares at Mar. 31, 2023 2,000,000 153,652,143      
Net income (loss) 117,548 117,548
Stock-based compensation $ 2,885 113,015 115,900
Stock-based compensation, shares   2,885,000      
Balance at Jun. 30, 2023 $ 2,000 $ 156,537 1,430,762 972,162 2,561,461
Balance, shares at Jun. 30, 2023 2,000,000 156,537,143      
Net income (loss) 155,609 155,609
Balance at Sep. 30, 2023 $ 2,000 $ 156,537 $ 1,430,762 $ 1,127,771 $ 2,717,070
Balance, shares at Sep. 30, 2023 2,000,000 156,537,143      
v3.23.3
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Cash flows from operating activities:    
Net income $ 162,560 $ 415,980
Adjustments to reconcile net income to net cash provided by continuing operations:    
Stock-based compensation 115,900
Depreciation and amortization 45,877 26,618
Bad debt expense 4,408 1,340
Amortization of debt discount 12,028
Amortization of right of use asset - operating lease 25,087
Change in derivative liability (74,301) 13,866
Gain on fixed assets (22,639)
Changes in operating assets and liabilities:    
Accounts receivable 43,260 55,281
Other receivable, related party 28,446 1,407
Inventory (53,759) 15,159
Prepaid expenses and other assets 18,407 7,704
Accrued expenses 12,898 103,028
Income tax payable 5,081 114,263
Right of use operating lease liability (24,522)
Deferred tax liability 38,725
Net cash provided by operating activities 350,520 776,802
Cash flows used in investing activities    
Purchase of property and equipment (230,570) (275,424)
Net cash used in investing activities (230,570) (275,424)
Cash flows used in financing activities:    
Repayments on note payable (3,126) (212,963)
Proceeds from note payable 147,279
Net cash provided by (used in) financing activities 144,153 (212,963)
Net change in cash 264,103 288,415
Cash at beginning of period 234,235 418,413
Cash at end of period 498,338 706,828
Supplemental disclosure of cash flow information:    
Cash paid for interest 32,975 5,943
Cash paid for taxes
Non-cash investing and financing activities:    
Capitalized loan costs 7,030
Acquisition of Innovative Impression, Inc. 143,637
Non-cash addition to note payable 1,490
Nonrelated Party [Member]    
Changes in operating assets and liabilities:    
Accounts payable (1,692) 22,156
Related Party [Member]    
Changes in operating assets and liabilities:    
Accounts payable $ 14,756
v3.23.3
ORGANIZATION AND DESCRIPTION OF BUSINESS
 9 Months Ended
Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
ORGANIZATION AND DESCRIPTION OF BUSINESS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

On January 4, 2001, we were incorporated in North Dakota as ADM Enterprises, Inc. On May 9, 2006, the Company changed its name to ADM Endeavors, Inc. (“ADM Endeavors,” or the “Company,” “we,” “us,” or “our”) and its domicile to the state of Nevada. On July 1, 2008, the Company acquired all of the assets of ADM Enterprises, LLC (“ADM Enterprises”), a sole proprietorship owned by Ardell and Tammera Mees, in exchange for 10,000,000 newly issued shares of our common stock. As a result, ADM Enterprises became a wholly owned subsidiary of the Company. ADM then provided installation services to grocery décor and design companies primarily in North Dakota.

 

On April 19, 2018, the Company acquired Just Right Products, Inc. (“JRP”), a Texas corporation. JRP was incorporated on January 17, 2010. The acquisition of 100% of JRP from its sole shareholder, Marc Johnson, was through a stock exchange whereby the Company issued 2,000,000 shares of restricted Series A preferred stock (the “Acquisition Shares”) to Mr. Johnson in consideration of the acquisition of 100% of JRP from Mr. Johnson. Each share of the Series A preferred stock is convertible into ten shares of common stock, and each share has 100 votes on a fully diluted basis. The Acquisition Shares represented 61% of the voting shares of the Company, and thus there was a change of voting control in connection with the transaction, and the transaction was accounted for as a reverse acquisition.

 

On April 27, 2023, the Company entered into an Asset Purchase Agreement with Innovative Impressions, Inc., a Texas corporation (the “Seller”), pursuant to which the Company acquired (the “Acquisition”) embroidery equipment, inventory, and related assets from the Seller.

 

JRP is focused on being an added value reseller with concentration in embroidery, screen printing, importing and uniforms for businesses, schools and individuals in the State of Texas.

 
v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The Company follows the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and has a year-end of December 31.

 

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

 

The unaudited consolidated financial statements of the Company for the three and nine month periods ended September 30, 2023 and 2022 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2022, was derived from the audited financial statements included in the Company’s financial statements as of and for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2023. These financial statements should be read in conjunction with that report.

 

 

Principles of Consolidation

 

The accompanying unaudited consolidated financial statements include all of the accounts of the Company and its wholly owned subsidiary, JRP, at September 30, 2023. All significant intercompany balances and transactions have been eliminated.

 

Use of Estimates

 

The preparation of the Consolidated Financial Statements in accordance with U.S. GAAP requires management to make use of certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reported periods. The Company bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Significant estimates are related to allowance for doubtful accounts, goodwill, derivative liability, stock-based compensation and deferred tax valuations.

 

Stock-Based Compensation

 

Stock-based compensation expense is recorded in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, for stock and stock options awarded in return for services rendered. The expense is measured at the grant-date fair value of the award and recognized as compensation expense on a straight-line basis over the service period, which is the vesting period. The Company estimates forfeitures that it expects will occur and records expense based upon the number of awards expected to vest.

 

Cash Equivalents

 

The Company considers all highly liquid investments with an original maturity of nine months or less when purchased to be cash equivalents. At September 30, 2023, and December 31, 2022, the Company had no cash equivalents. Periodically, the Company may carry cash balances at financial institutions in excess of the federally insured limit of $250,000. The amount in excess of the FDIC insurance at September 30, 2023, was $243,200. The Company has not experienced losses on these accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.

 

Allowance for Doubtful Accounts

 

The Company establishes an allowance for doubtful accounts to ensure trade and notes receivable are not overstated due to non-collectability. The Company’s allowance is based on a variety of factors, including age of the receivable, significant one-time events, historical experience, and other risk considerations. The Company had no allowance at September 30, 2023, and December 31, 2022. The Company had bad debt expense of $4,408 and $1,340 for the nine months ended September 30, 2023, and 2022, respectively.

 

Inventory

 

Inventory is valued at the lower of cost or net realizable value. Cost is determined using a weighted-average cost method. The Company decreases the value of inventory for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value, based upon an aging analysis of the inventory on hand, specifically known inventory-related risks, and assumptions about future demand and market conditions. The Company has inventory of $231,841 and $168,082 as of September 30, 2023, and December 31, 2022, respectively.

 

Four vendors accounted for approximately 82% of inventory purchases during the nine months ended September 30, 2023. Three vendors accounted for approximately 66% of inventory purchases during the nine months ended September 30, 2022.

 

 

Derivative Instruments

 

Derivatives are measured at their fair value on the balance sheet. In determining the appropriate fair value, the Company uses the Black-Scholes-Merton option pricing model. Changes in fair value are recorded in Other Income (Expense) of the consolidated statements of operations.

 

Fair Value of Financial Instruments

 

The Company measures its financial assets and liabilities in accordance with U.S. GAAP. For certain of our financial instruments, including cash, accounts payable, accrued expenses, and short-term loans the carrying amounts approximate fair value due to their short maturities.

 

We follow accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

 

  Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
     
  Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
     
  Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

 

The Company adopted the provisions of FASB ASC 820 (the Fair Value Topic) which defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and expands disclosures about fair value measurements.

 

The Company had no assets or liabilities other than derivative liabilities measured at fair value on a recurring basis at September 30, 2023, and December 31, 2022.

 

Fixed Assets

 

Fixed assets are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method over the assets estimated useful life. Upon the sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in consolidated statements of operations.

 

 

Classification   Estimated Useful Lives
Equipment   5 to 7 years
Leasehold improvements   Shorter of useful life or lease term
Furniture and fixtures   4 to 7 years
Websites   3 years

 

Goodwill

 

Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible assets of businesses acquired. Goodwill is not amortized, but instead assessed for impairment. We perform our annual impairment review of goodwill in our fiscal fourth quarter or when a triggering event occurs between annual impairment tests. No impairment was recorded in fiscal 2023 or 2022 as a result of our qualitative assessments over our single reporting segment.

 

 

The Company performs a qualitative assessment for each of its reporting units to determine if the two-step process for impairment testing is required. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would then evaluate the recoverability of goodwill using a two-step impairment test approach at the reporting unit level. In the first step, the fair value for the reporting unit is compared to its book value including goodwill. In the case that the fair value of the reporting unit is less than book value, a second step is performed which compares the implied fair value of the reporting unit’s goodwill to the book value of the goodwill. The fair value for the goodwill is determined based on the difference between the fair values of the reporting unit and the net fair values of the identifiable assets and liabilities of such reporting unit. If the implied fair value of the goodwill is less than the book value, the difference is recognized as impairment.

 

Impairment of Long-lived Assets

 

The Company follows paragraph 360-10-05-4 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, such as intellectual property, are required to be reviewed for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

 

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

 

The Company determined that there were no impairments of long-lived assets at September 30, 2023 and December 31, 2022.

 

Revenue Recognition

 

We recognize revenue for merchandise sales, net of expected returns and sales tax, at the time of in-store purchase or delivery of the product to our customer. When merchandise is shipped to our guests, we estimate receipt based on historical experience. Revenue is deferred and a liability is established for sales returns based on historical return rates and sales for the return period. We recognize an asset and corresponding adjustment to cost of sales for our right to recover returned merchandise. At each financial reporting date, we assess our estimates of expected returns, refund liabilities and return assets. For merchandise sold in our stores and online, tender is accepted at the point of sale. When we receive payment before the guest has taken possession of the merchandise, the amount received is recorded as deferred revenue until the transaction is complete. Our performance obligations for unfulfilled merchandise orders are typically satisfied within one week. Shipping and handling fees charged to guests relate to fulfilment activities and are included in net sales with the corresponding costs recorded in cost of sales.

 

Cost of Sales

 

Cost of sales includes the actual cost of merchandise sold and services performed; the cost of transportation of merchandise from vendors to our distribution network, stores, or customers; shipping and handling costs from our stores or distribution network to customers; and the operating cost and depreciation of our sourcing and distribution network and online fulfilment centers.

 

 

Net Income per Share

 

The Company computes basic and diluted income per share amounts pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic income per share is computed by dividing net income available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted income per share is computed by dividing net income available to common shareholders by the diluted weighted average number of shares of common stock during the period. The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially diluted debt or equity.

 

The dilutive effect of outstanding convertible securities and preferred stock is reflected in diluted earnings per share by application of the if-converted method.

 

During the three and nine months ended September 30, 2023 and 2022, 8,893,496 and 5,226,207 shares issuable upon the conversion of convertible note, respectively, 20,000,000 shares issuable upon the conversion of preferred shares, were considered for their dilutive effects but were determined to be anti-dilutive.

 

Income Taxes

 

The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carryforwards and their respective tax bases.

 

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income (loss) in the years in which those temporary differences are expected to be recovered or settled.

 

The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.

 

Tax benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain a position taken on an income tax return. The Company has no liability for uncertain tax positions as of September 30, 2023, and December 31, 2022. Interest and penalties, if any, related to unrecognized tax benefits would be recognized as interest expense. The Company does not have any accrued interest or penalties associated with unrecognized tax benefits, nor was any significant interest expense recognized during the periods ended September 30, 2023 and 2022.

 

Segment Information

 

In accordance with the provisions of ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information,” the Company is required to report financial and descriptive information about its reportable operating segments. The Company has one operating segment as of September 30, 2023, and December 31, 2022.

 

Effect of Recent Accounting Pronouncements

 

Recently Issued Accounting Standards Not Yet Adopted

 

The Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that no other pronouncements will have a significant effect on its financial statements.

 
v3.23.3
COMMITMENTS AND CONTINGENCIES
 9 Months Ended
Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 3 – COMMITMENTS AND CONTINGENCIES

 

Legal Matters

 

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of November 14, 2023, there were no pending or threatened lawsuits.

 

 

Franchise Agreement

 

The Company has a franchise agreement effective February 19, 2014, expiring in February 2024, with a right to renew for an additional five years to operate stores and websites in the Company’s exclusive territory. The Company is obligated to pay 5% of gross revenue for use of systems and manuals.

 

During the nine months ended September 30, 2023, and 2022, the Company paid $60,072 and $62,495, respectively, for the franchise agreement.

 
v3.23.3
FIXED ASSETS
 9 Months Ended
Sep. 30, 2023
Property, Plant and Equipment [Abstract]  
FIXED ASSETS

NOTE 4 – FIXED ASSETS

 

Fixed assets and finance lease right of use assets, stated at cost, less accumulated depreciation at September 30, 2023, and December 31, 2022, consisted of the following:

 

 

   September 30, 2023   December 31, 2022 
Land  $970,455   $970,455 
Equipment   668,847    485,958 
Autos and trucks   44,244    95,246 
Construction in process   1,643,349    1,413,531 
Land and building – rental property   256,387    256,388 
           
Less: accumulated depreciation   (404,975)   (391,270)
Property and equipment, net  $3,178,307   $2,830,308 

 

Depreciation expense for the nine months ended September 30, 2023, and 2022, was $45,877 and $26,618, respectively.

 
v3.23.3
CONVERTIBLE NOTE PAYABLE AND NOTES PAYABLE
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
CONVERTIBLE NOTE PAYABLE AND NOTES PAYABLE

NOTE 5 – CONVERTIBLE NOTE PAYABLE AND NOTES PAYABLE

 

Convertible Notes Payable

 

On April 1, 2018, the Company assumed a convertible promissory note in connection with the reverse acquisition. The Company received total funding of $106,092 as of December 31, 2018. The note had fees of $53,046 which were recorded as a discount to the convertible promissory note and are being amortized over the life of the loan using the effective interest method. The maturity of the note is March 5, 2023. On March 5, 2023, the note was extended to September 5, 2023.

 

The note is convertible into common stock at a price of 35% of the lowest three trading prices during the ten days prior to conversion. As of September 30, 2023, the convertible debt was convertible into 8,893,496 common shares.

 

The note balance was $106,092 as of September 30, 2023, and December 31, 2022.

 

Derivative liabilities

 

The conversion features embedded in the convertible notes were evaluated to determine if such conversion feature should be bifurcated from its host instrument and accounted for as a freestanding derivative. In the convertible notes with variable conversion terms, the conversion feature was accounted for as a derivative liability. The derivatives associated with the term convertible notes were recognized as a discount to the debt instrument and the discount is amortized over the expected life of the notes with any excess of the derivative value over the note payable value recognized as additional interest expense at the issuance date.

 

The following table presents information about the Company’s liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of September 30, 2023, and December 31, 2022:

 

 

               Fair value at 
   Level 1   Level 2   Level 3   September 30, 2023 
Liabilities:                          
Derivative liabilities  $-   $       -   $233,672   $233,672 

 

 

               Fair value at 
   Level 1   Level 2   Level 3   December 31, 2022 
Liabilities:                    
Derivative liabilities  $         -   $             -   $307,973   $307,973 

 

As of September 30, 2023, and December 31, 2022, the derivative liability was calculated using the Black-Scholes method over the expected terms of the convertible debt and the following assumptions: volatility of 100%, exercise price of $0.0119 and $0.0155, and risk-free rate of 5.47% and 5.53%, respectively. Included in gain on change in fair value of derivative liabilities in the accompanying consolidated statements of operations is expense arising from the gain on change in fair value of the derivatives of $74,301 and a derivatives loss of $13,866 during the nine months ended September 30, 2023, and 2022, respectively.

 

 

Fair value at December 31, 2022  $307,973 
Gain on change in fair value of derivative liabilities   (74,301)
Fair value at September 30, 2023  $233,672 

 

Notes Payable

 

On October 25, 2022, the Company entered into a secured promissory note in the amount up of $4,618,960. The note is secured by the deed of trust on the property and bears interest at 5.5% and is due on October 25, 2032. On October 25, 2027, the rate shall be adjusted to the daily rate reported in the Credit Markets section (or similar section) of The Wall Street Journal as the U.S. “Prime Rate” (“Index”), as announced from time to time, without notice to Maker, plus one percent (1.00%) (the sum being the “Adjusted Rate”); provided that in no event shall the Rate or Adjusted Rate exceed the lesser of eighteen percent (18%) per annum or the maximum rate permitted under applicable law. Monthly payments of accrued and unpaid interest shall commence on November 25, 2022, and continue on the same date of each succeeding calendar month through and including April 25, 2024. Thereafter, monthly principal and interest (“Payments”) in the amount of $26,458.87, which is an amount necessary to amortize the stated principal balance. The Company recorded $94,072 of loan cost as a debt discount and will be amortized over the life of the note. During the nine months ended September 30, 2023, the Company capitalized $7,030 of loan costs and $52,398 of interest related to this note. As of September 30, 2023, the loan balance was $1,228,630, net of $85,316 of debt discount.

 

On April 27, 2023, the Acquisition (as defined in Note 11 below) closed, and the Company issued the Note (as defined in Note 11 below) to the Seller’s principal, Robert Breese. The Company entered into a Pledge and Security Agreement with Mr. Breese (the “Security Agreement”), and the parties agreed that the Acquisition would be considered effective as of May 1, 2023. The Note does not bear interest except upon default, and it is payable in 24 equal consecutive monthly installments of $8,333 beginning May 1, 2023, with the final payment due on April 1, 2025. Pursuant to the Security Agreement, the Company’s payment obligations under the Note are secured by a security interest in the Assets granted to Mr. Breese. The Company recorded $56,363 of loan cost as a debt discount and will be amortized over the life of the note. During the nine months ended September 30, 2023, the Company amortized $12,028 of debt discount related to this note. As of September 30, 2023, the loan balance was $155,665, net of $44,335 of debt discount.

 

As of September 30, 2023, the secured notes payable balance was $1,384,294, consisting of long term notes payable of $1,242,628 and current portion of notes payable of $141,667. As of December 31, 2022, the secured notes payable balance was $1,075,957, consisting of long term notes payable of $1,075,957 and current portion of notes payable of $0.

 

 
v3.23.3
ACCRUED EXPENSES
 9 Months Ended
Sep. 30, 2023
Payables and Accruals [Abstract]  
ACCRUED EXPENSES

NOTE 6 – ACCRUED EXPENSES

 

The Company had total accrued expenses of $329,247 and $316,349 as of September 30, 2023, and December 31, 2022, respectively. See breakdown below of accrued expenses:

 

 

   September 30,
2023		   December 31,
2022		 
Credit cards payable  $150,833   $150,107 
Accrued interest   93,273    80,949 
Other accrued expenses   85,141    85,293 
Total accrued expenses  $329,247   $316,349 

 
v3.23.3
RELATED PARTY TRANSACTIONS
 9 Months Ended
Sep. 30, 2023
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 7 – RELATED PARTY TRANSACTIONS

 

The majority shareholder, director and officer, is the owner of M & M Real Estate, Inc. (“M & M”). M & M leases the Haltom City, Texas facility to the Company. The monthly lease payment, under a month-to-month lease, is currently $6,500. The Company incurred lease expense, including equipment rental expense of $68,750 and $66,110 to M & M for the nine months ended September 30, 2023, and 2022, respectively.

 
v3.23.3
STOCKHOLDERS’ EQUITY
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 8 – STOCKHOLDERS’ EQUITY

 

Our Articles of Incorporation authorize the issuance of 800,000,000 shares of common stock and 80,000,000 shares of preferred stock, $0.001 par value per share. There were 156,537,143 and 153,652,143 outstanding shares of common stock at September 30, 2023, and December 31, 2022, respectively. There were 2,000,000 outstanding shares of preferred stock as of September 30, 2023, and December 31, 2022, respectively. Each share of preferred stock has 100 votes per share and is convertible into 10 shares of common stock. The preferred stock pays dividends equal with common stock and has preferential liquidation rights to common stockholders.

 

On April 1, 2023, the Company entered into an investor relations agreement and issued 300,000 shares of common stock for services from April 1, 2023, through September 30, 2023. The Company recognized $15,900 of expense related to this agreement.

 

On April 27, 2023, the Company also entered into an Independent Consulting Agreement with Mr. Breese, pursuant to which (i) Mr. Breese would provide embroidery industry consulting and sales services to the company for an initial term of two years, and (ii) Mr. Breese would be paid 20% sales commissions and $100,000 of Company stock, valued as of May 1, 2023, which totaled 2,585,000 shares of common stock.

 
v3.23.3
CONCENTRATION OF CUSTOMERS
 9 Months Ended
Sep. 30, 2023
Risks and Uncertainties [Abstract]  
CONCENTRATION OF CUSTOMERS

NOTE 9 – CONCENTRATION OF CUSTOMERS

 

Concentration of Revenue

 

For the nine months ended September 30, 2023, no customer made up over 10% of revenues, and for the nine months ended September 30, 2022, one customer made up 27% of revenues.

 

Concentration of accounts receivable

 

Two customers accounted for 22% of accounts receivable as of September 30, 2023. Two customers accounted for 46% of accounts receivable as of December 31, 2022.

 

 
v3.23.3
LEASE LIABILITY
 9 Months Ended
Sep. 30, 2023
Lease Liability  
LEASE LIABILITY

NOTE 10 – LEASE LIABILITY

 

Operating Leases

 

The Company leases office space. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Leases with initial terms in excess of 12 months are recorded as operating or financing leases in our consolidated balance sheet. Lease expense is recognized on a straight-line basis over the term of the lease. For leases beginning in 2018 and later, the Company accounts for lease components separately from the non-lease components. Most leases include one or more options to renew. The exercise of the lease renewal options is at the sole discretion of the Company. The depreciable life of the assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

 

The Company leases approximately 18,000 square feet of space in Haltom City, Texas, pursuant to a month-to-month lease. This facility serves as our corporate headquarters, manufacturing facility and showroom. The lease is with M & M Real Estate, Inc. (“M & M”), a company owned solely by our majority shareholder and director of the Company.

 

On October 28, 2022, the Company entered into an operating lease that expires June 30, 2024. The operating lease results in the recognition of ROU asset and lease liability on the balance sheet. ROU asset and operating lease liability are recognized based on the present value of lease payments over the lease terms of the commencement date. Because the leases do not provide an explicit or implicit rate of return, the Company determines incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments on an individual lease basis. The incremental borrowing rate for a lease is the rate of interest the Company would have to pay on a collateralized basis to borrow an amount equal to the lease payments for the asset under similar terms, which is 5.50%. The Company’s lease does not contain any material restrictive covenants. The lease has a remaining term of 1.25 years.

 

The following table provides the maturities of lease liabilities at September 30, 2023:

 

 

   Operating 
   Lease 
Maturity of Lease Liability at September 30, 2023     
2023 (three months remaining)  $8,907 
2024   17,814 
Total future undiscounted lease payments  $26,721 
Less: Amounts representing interest   (579)
Present value of lease liabilities  $26,142 

 
v3.23.3
ASSET ACQUISITION
 9 Months Ended
Sep. 30, 2023
Business Combination and Asset Acquisition [Abstract]  
ASSET ACQUISITION

NOTE 11 – ASSET ACQUISITION

 

On April 27, 2023, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Innovative Impressions, Inc., a Texas corporation (the “Seller”), pursuant to which the Company acquired (the “Acquisition”) embroidery equipment, inventory, and related assets (the “Assets”), from the Seller for a $200,000 secured promissory note (with a fair value of $143,637) to the Seller or its nominee (the “Note”) that matures on April 25, 2025. The monthly payments under the agreement are due in twenty-four installments of $8,333. The Company evaluated and concluded that the assets acquired would qualify as a single identifiable asset in a business combination in accordance with ASC 805. The Company evaluated the intangible assets acquired in the acquisition and determined the value was immaterial.

 

 

       Average
   Fair Value   Estimated Life
Purchase Price:        
Notes payable, net of discount  $143,637    
Total purchase consideration  $143,637    
         
Purchase Allocation:        
Inventory  $10,000   Less than 1 year
Fixed assets   133,637   3 years
Total purchase price allocation  $143,637    

 

Pro-Forma Financial Information

 

The following unaudited pro-forma data summarizes the result of the operations for the three and nine ended September 30, 2023, and 2022, as if the acquisition from Innovative Impressions, Inc. (“Innovative Impressions”) had been completed on January 1, 2022. The pro-forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on January 1, 2023, or of results that may occur in the future.

 

 

   2023   2022   2023   2022 
   For the three months ended
September 30,		   For the nine months ended
September 30,		 
   2023   2022   2023   2022 
   Pro Forma   Pro Forma   Pro Forma   Pro Forma 
                 
Revenue  $2,077,855   $2,506,649   $4,216,762   $5,201,429 
Operating income   210,619    472,472    178,806    552,658 
Net income   180,094    331,647    222,292    406,295 
Net income per share  $0.00   $0.00   $0.00   $0.00 

 
v3.23.3
SUBSEQUENT EVENTS
 9 Months Ended
Sep. 30, 2023
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 12 – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the filing date of this Form 10-Q and determined that no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosures in the notes thereto.
v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

The Company follows the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and has a year-end of December 31.

 

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

 

The unaudited consolidated financial statements of the Company for the three and nine month periods ended September 30, 2023 and 2022 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2022, was derived from the audited financial statements included in the Company’s financial statements as of and for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2023. These financial statements should be read in conjunction with that report.

 

 
Principles of Consolidation

Principles of Consolidation

 

The accompanying unaudited consolidated financial statements include all of the accounts of the Company and its wholly owned subsidiary, JRP, at September 30, 2023. All significant intercompany balances and transactions have been eliminated.

 
Use of Estimates

Use of Estimates

 

The preparation of the Consolidated Financial Statements in accordance with U.S. GAAP requires management to make use of certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reported periods. The Company bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Significant estimates are related to allowance for doubtful accounts, goodwill, derivative liability, stock-based compensation and deferred tax valuations.

 
Stock-Based Compensation

Stock-Based Compensation

 

Stock-based compensation expense is recorded in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, for stock and stock options awarded in return for services rendered. The expense is measured at the grant-date fair value of the award and recognized as compensation expense on a straight-line basis over the service period, which is the vesting period. The Company estimates forfeitures that it expects will occur and records expense based upon the number of awards expected to vest.

 
Cash Equivalents

Cash Equivalents

 

The Company considers all highly liquid investments with an original maturity of nine months or less when purchased to be cash equivalents. At September 30, 2023, and December 31, 2022, the Company had no cash equivalents. Periodically, the Company may carry cash balances at financial institutions in excess of the federally insured limit of $250,000. The amount in excess of the FDIC insurance at September 30, 2023, was $243,200. The Company has not experienced losses on these accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.

 
Allowance for Doubtful Accounts

Allowance for Doubtful Accounts

 

The Company establishes an allowance for doubtful accounts to ensure trade and notes receivable are not overstated due to non-collectability. The Company’s allowance is based on a variety of factors, including age of the receivable, significant one-time events, historical experience, and other risk considerations. The Company had no allowance at September 30, 2023, and December 31, 2022. The Company had bad debt expense of $4,408 and $1,340 for the nine months ended September 30, 2023, and 2022, respectively.

 
Inventory

Inventory

 

Inventory is valued at the lower of cost or net realizable value. Cost is determined using a weighted-average cost method. The Company decreases the value of inventory for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value, based upon an aging analysis of the inventory on hand, specifically known inventory-related risks, and assumptions about future demand and market conditions. The Company has inventory of $231,841 and $168,082 as of September 30, 2023, and December 31, 2022, respectively.

 

Four vendors accounted for approximately 82% of inventory purchases during the nine months ended September 30, 2023. Three vendors accounted for approximately 66% of inventory purchases during the nine months ended September 30, 2022.

 

 
Derivative Instruments

Derivative Instruments

 

Derivatives are measured at their fair value on the balance sheet. In determining the appropriate fair value, the Company uses the Black-Scholes-Merton option pricing model. Changes in fair value are recorded in Other Income (Expense) of the consolidated statements of operations.

 
Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

The Company measures its financial assets and liabilities in accordance with U.S. GAAP. For certain of our financial instruments, including cash, accounts payable, accrued expenses, and short-term loans the carrying amounts approximate fair value due to their short maturities.

 

We follow accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

 

  Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
     
  Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
     
  Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

 

The Company adopted the provisions of FASB ASC 820 (the Fair Value Topic) which defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and expands disclosures about fair value measurements.

 

The Company had no assets or liabilities other than derivative liabilities measured at fair value on a recurring basis at September 30, 2023, and December 31, 2022.

 
Fixed Assets

Fixed Assets

 

Fixed assets are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method over the assets estimated useful life. Upon the sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in consolidated statements of operations.

 

 

Classification   Estimated Useful Lives
Equipment   5 to 7 years
Leasehold improvements   Shorter of useful life or lease term
Furniture and fixtures   4 to 7 years
Websites   3 years

 
Goodwill

Goodwill

 

Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible assets of businesses acquired. Goodwill is not amortized, but instead assessed for impairment. We perform our annual impairment review of goodwill in our fiscal fourth quarter or when a triggering event occurs between annual impairment tests. No impairment was recorded in fiscal 2023 or 2022 as a result of our qualitative assessments over our single reporting segment.

 

 

The Company performs a qualitative assessment for each of its reporting units to determine if the two-step process for impairment testing is required. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would then evaluate the recoverability of goodwill using a two-step impairment test approach at the reporting unit level. In the first step, the fair value for the reporting unit is compared to its book value including goodwill. In the case that the fair value of the reporting unit is less than book value, a second step is performed which compares the implied fair value of the reporting unit’s goodwill to the book value of the goodwill. The fair value for the goodwill is determined based on the difference between the fair values of the reporting unit and the net fair values of the identifiable assets and liabilities of such reporting unit. If the implied fair value of the goodwill is less than the book value, the difference is recognized as impairment.

 
Impairment of Long-lived Assets

Impairment of Long-lived Assets

 

The Company follows paragraph 360-10-05-4 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, such as intellectual property, are required to be reviewed for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

 

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

 

The Company determined that there were no impairments of long-lived assets at September 30, 2023 and December 31, 2022.

 
Revenue Recognition

Revenue Recognition

 

We recognize revenue for merchandise sales, net of expected returns and sales tax, at the time of in-store purchase or delivery of the product to our customer. When merchandise is shipped to our guests, we estimate receipt based on historical experience. Revenue is deferred and a liability is established for sales returns based on historical return rates and sales for the return period. We recognize an asset and corresponding adjustment to cost of sales for our right to recover returned merchandise. At each financial reporting date, we assess our estimates of expected returns, refund liabilities and return assets. For merchandise sold in our stores and online, tender is accepted at the point of sale. When we receive payment before the guest has taken possession of the merchandise, the amount received is recorded as deferred revenue until the transaction is complete. Our performance obligations for unfulfilled merchandise orders are typically satisfied within one week. Shipping and handling fees charged to guests relate to fulfilment activities and are included in net sales with the corresponding costs recorded in cost of sales.

 
Cost of Sales

Cost of Sales

 

Cost of sales includes the actual cost of merchandise sold and services performed; the cost of transportation of merchandise from vendors to our distribution network, stores, or customers; shipping and handling costs from our stores or distribution network to customers; and the operating cost and depreciation of our sourcing and distribution network and online fulfilment centers.

 

 
Net Income per Share

Net Income per Share

 

The Company computes basic and diluted income per share amounts pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic income per share is computed by dividing net income available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted income per share is computed by dividing net income available to common shareholders by the diluted weighted average number of shares of common stock during the period. The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially diluted debt or equity.

 

The dilutive effect of outstanding convertible securities and preferred stock is reflected in diluted earnings per share by application of the if-converted method.

 

During the three and nine months ended September 30, 2023 and 2022, 8,893,496 and 5,226,207 shares issuable upon the conversion of convertible note, respectively, 20,000,000 shares issuable upon the conversion of preferred shares, were considered for their dilutive effects but were determined to be anti-dilutive.

 
Income Taxes

Income Taxes

 

The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carryforwards and their respective tax bases.

 

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income (loss) in the years in which those temporary differences are expected to be recovered or settled.

 

The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.

 

Tax benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain a position taken on an income tax return. The Company has no liability for uncertain tax positions as of September 30, 2023, and December 31, 2022. Interest and penalties, if any, related to unrecognized tax benefits would be recognized as interest expense. The Company does not have any accrued interest or penalties associated with unrecognized tax benefits, nor was any significant interest expense recognized during the periods ended September 30, 2023 and 2022.

 
Segment Information

Segment Information

 

In accordance with the provisions of ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information,” the Company is required to report financial and descriptive information about its reportable operating segments. The Company has one operating segment as of September 30, 2023, and December 31, 2022.

 
Effect of Recent Accounting Pronouncements

Effect of Recent Accounting Pronouncements

 

Recently Issued Accounting Standards Not Yet Adopted

 

The Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that no other pronouncements will have a significant effect on its financial statements.

 
v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
 9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
SCHEDULE OF ESTIMATED USEFUL LIVE OF FIXED ASSETS

 

Classification   Estimated Useful Lives
Equipment   5 to 7 years
Leasehold improvements   Shorter of useful life or lease term
Furniture and fixtures   4 to 7 years
Websites   3 years
v3.23.3
FIXED ASSETS (Tables)
 9 Months Ended
Sep. 30, 2023
Property, Plant and Equipment [Abstract]  
SCHEDULE OF FIXED ASSETS AND FINANCE LEASE RIGHT OF USE ASSETS

Fixed assets and finance lease right of use assets, stated at cost, less accumulated depreciation at September 30, 2023, and December 31, 2022, consisted of the following:

 

 

   September 30, 2023   December 31, 2022 
Land  $970,455   $970,455 
Equipment   668,847    485,958 
Autos and trucks   44,244    95,246 
Construction in process   1,643,349    1,413,531 
Land and building – rental property   256,387    256,388 
           
Less: accumulated depreciation   (404,975)   (391,270)
Property and equipment, net  $3,178,307   $2,830,308 

 

Depreciation expense for the nine months ended September 30, 2023, and 2022, was $45,877 and $26,618, respectively.

 
v3.23.3
CONVERTIBLE NOTE PAYABLE AND NOTES PAYABLE (Tables)
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
SCHEDULE OF FAIR VALUE LIABILITIES MEASURED ON RECURRING BASIS

The following table presents information about the Company’s liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of September 30, 2023, and December 31, 2022:

 

 

               Fair value at 
   Level 1   Level 2   Level 3   September 30, 2023 
Liabilities:                          
Derivative liabilities  $-   $       -   $233,672   $233,672 

 

 

               Fair value at 
   Level 1   Level 2   Level 3   December 31, 2022 
Liabilities:                    
Derivative liabilities  $         -   $             -   $307,973   $307,973 
SCHEDULE OF DERIVATIVE LIABILITIES AT FAIR VALUE

 

Fair value at December 31, 2022  $307,973 
Gain on change in fair value of derivative liabilities   (74,301)
Fair value at September 30, 2023  $233,672 
v3.23.3
ACCRUED EXPENSES (Tables)
 9 Months Ended
Sep. 30, 2023
Payables and Accruals [Abstract]  
SCHEDULE OF ACCRUED EXPENSES

 

   September 30,
2023		   December 31,
2022		 
Credit cards payable  $150,833   $150,107 
Accrued interest   93,273    80,949 
Other accrued expenses   85,141    85,293 
Total accrued expenses  $329,247   $316,349 
v3.23.3
LEASE LIABILITY (Tables)
 9 Months Ended
Sep. 30, 2023
Lease Liability  
SCHEDULE OF MATURITIES OF LEASE LIABILITIES

The following table provides the maturities of lease liabilities at September 30, 2023:

 

 

   Operating 
   Lease 
Maturity of Lease Liability at September 30, 2023     
2023 (three months remaining)  $8,907 
2024   17,814 
Total future undiscounted lease payments  $26,721 
Less: Amounts representing interest   (579)
Present value of lease liabilities  $26,142 
v3.23.3
ASSET ACQUISITION (Tables)
 9 Months Ended
Sep. 30, 2023
Business Combination and Asset Acquisition [Abstract]  
SCHEDULE OF BUSINESS ACQUISITIONS

 

       Average
   Fair Value   Estimated Life
Purchase Price:        
Notes payable, net of discount  $143,637    
Total purchase consideration  $143,637    
         
Purchase Allocation:        
Inventory  $10,000   Less than 1 year
Fixed assets   133,637   3 years
Total purchase price allocation  $143,637    
SCHEDULE OF PRO FORMA FINANCIAL

 

   2023   2022   2023   2022 
   For the three months ended
September 30,		   For the nine months ended
September 30,		 
   2023   2022   2023   2022 
   Pro Forma   Pro Forma   Pro Forma   Pro Forma 
                 
Revenue  $2,077,855   $2,506,649   $4,216,762   $5,201,429 
Operating income   210,619    472,472    178,806    552,658 
Net income   180,094    331,647    222,292    406,295 
Net income per share  $0.00   $0.00   $0.00   $0.00 
v3.23.3
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) - shares
Apr. 19, 2018
Jul. 01, 2008
Just Right Products, Inc. [Member]    
Percentage of voting interests acquired 61.00%  
Series A Preferred Stock [Member] | Just Right Products, Inc. [Member]    
Issuance of restricted shares 2,000,000  
Preferred stock voting rights description Each share of the Series A preferred stock is convertible into ten shares of common stock, and each share has 100 votes on a fully diluted basis  
Just Right Products, Inc. [Member] | Series A Preferred Stock [Member]    
Ownership percentage 100.00%  
Common Stock [Member]    
Shares issued for assets acquired   10,000,000
v3.23.3
SCHEDULE OF ESTIMATED USEFUL LIVE OF FIXED ASSETS (Details)
Sep. 30, 2023
Property, Plant and Equipment [Line Items]  
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] Useful Life, Lease Term [Member]
Equipment [Member] | Minimum [Member]  
Property, Plant and Equipment [Line Items]  
Fixed assets estimated useful life 5 years
Equipment [Member] | Maximum [Member]  
Property, Plant and Equipment [Line Items]  
Fixed assets estimated useful life 7 years
Furniture and Fixtures [Member] | Minimum [Member]  
Property, Plant and Equipment [Line Items]  
Fixed assets estimated useful life 4 years
Furniture and Fixtures [Member] | Maximum [Member]  
Property, Plant and Equipment [Line Items]  
Fixed assets estimated useful life 7 years
Websites [Member]  
Property, Plant and Equipment [Line Items]  
Fixed assets estimated useful life 3 years
v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative)
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
USD ($)
shares
Sep. 30, 2022
shares
Sep. 30, 2023
USD ($)
Segment
shares
Sep. 30, 2022
USD ($)
shares
Dec. 31, 2022
USD ($)
Segment
Product Information [Line Items]          
Cash $ 0   $ 0   $ 0
Cash FDIC insured limit 250,000   250,000    
Cash insured amount 243,200   243,200    
Allowance for doubtful accounts receivable 0   0   0
Bad debt expenses     4,408 $ 1,340  
Inventory 231,841   231,841   168,082
Assets or liabilities other than derivative liabilities measured at fair value $ 0   0   0
Impairments of long-lived assets     $ 0   0
Convertible debt coverted into shares | shares 8,893,496 5,226,207 8,893,496 5,226,207  
Preferred shares | shares     20,000,000    
Unrecognized tax benefits $ 0   $ 0   $ 0
Number of reporting segments | Segment     1   1
Revenue Benchmark [Member] | Supplier Concentration Risk [Member] | Three Vendors [Member]          
Product Information [Line Items]          
Concentration risk, percentage     82.00% 66.00%  
v3.23.3
COMMITMENTS AND CONTINGENCIES (Details Narrative) - Franchise Agreement [Member] - USD ($)
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]    
Lease expiration date February 2024  
Lease term 5 years  
Lease description The Company is obligated to pay 5% of gross revenue for use of systems and manuals  
Amount paid under agreement $ 60,072 $ 62,495
v3.23.3
SCHEDULE OF FIXED ASSETS AND FINANCE LEASE RIGHT OF USE ASSETS (Details) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Property, Plant and Equipment [Line Items]    
Less: accumulated depreciation $ (404,975) $ (391,270)
Property and equipment, net 3,178,307 2,830,308
Land [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 970,455 970,455
Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 668,847 485,958
Autos And Trucks [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 44,244 95,246
Construction in Progress [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 1,643,349 1,413,531
Land And Building Rental Property [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 256,387 $ 256,388
v3.23.3
FIXED ASSETS (Details Narrative) - USD ($)
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Property, Plant and Equipment [Abstract]    
Depreciation expense $ 45,877 $ 26,618
v3.23.3
SCHEDULE OF FAIR VALUE LIABILITIES MEASURED ON RECURRING BASIS (Details) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Platform Operator, Crypto-Asset [Line Items]    
Derivative liabilities $ 233,672 $ 307,973
Fair Value, Inputs, Level 1 [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Derivative liabilities
Fair Value, Inputs, Level 2 [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Derivative liabilities
Fair Value, Inputs, Level 3 [Member]    
Platform Operator, Crypto-Asset [Line Items]    
Derivative liabilities $ 233,672 $ 307,973
v3.23.3
SCHEDULE OF DERIVATIVE LIABILITIES AT FAIR VALUE (Details)
 9 Months Ended
Sep. 30, 2023
USD ($)
Debt Disclosure [Abstract]  
Fair value, beginning $ 307,973
Gain loss on change in fair value of derivative liabilities (74,301)
Fair value, ending $ 233,672
v3.23.3
CONVERTIBLE NOTE PAYABLE AND NOTES PAYABLE (Details Narrative)
 3 Months Ended 9 Months Ended 12 Months Ended
Apr. 27, 2023
USD ($)
Oct. 25, 2022
USD ($)
Apr. 01, 2018
USD ($)
Sep. 30, 2023
USD ($)
$ / shares
shares
Sep. 30, 2022
USD ($)
shares
Sep. 30, 2023
USD ($)
Days
$ / shares
shares
Sep. 30, 2022
USD ($)
shares
Dec. 31, 2018
USD ($)
Jun. 30, 2023
USD ($)
Dec. 31, 2022
USD ($)
$ / shares
Debt Instrument [Line Items]                    
Proceeds from convertible debt               $ 106,092    
Debt instrument fee amount     $ 53,046              
Debt instrument maturity date     Mar. 05, 2023              
Conversion of debt into stock           35.00%        
Debt trading days | Days           10        
Convertible debt coverted into shares | shares       8,893,496 5,226,207 8,893,496 5,226,207      
Note balance       $ 106,092   $ 106,092       $ 106,092
Change in fair value of derivative liability           74,301 $ 13,866      
Secured notes payable       1,384,294 $ 1,075,957 1,384,294 $ 1,075,957      
Long term notes payable       1,242,628   1,242,628       1,075,957
Notes payable current       141,667   141,667      
Secured Debt [Member]                    
Debt Instrument [Line Items]                    
Secured debt   $ 4,618,960                
Debt instrument interest rate   5.50%                
Notes payable due date   Oct. 25, 2032                
Loan monthly payment   $ 26,458.87                
Loan cost recorded as debt discount   $ 94,072                
Loan costs                 $ 7,030  
Interest related to note           52,398        
Notes payable - secured, net of current portion       1,228,630   1,228,630        
Debt discount amount       85,316   85,316        
Secured Debt [Member] | Security Agreement [Member]                    
Debt Instrument [Line Items]                    
Loan monthly payment $ 8,333                  
Loan cost recorded as debt discount $ 56,363                  
Loan costs       12,028   12,028        
Notes payable - secured, net of current portion       155,665   155,665        
Debt discount amount       $ 44,335   $ 44,335        
Secured Debt [Member] | October 25, 2027 [Member]                    
Debt Instrument [Line Items]                    
Adjusted rate   1.00%                
Secured Debt [Member] | October 25, 2027 [Member] | Maximum [Member]                    
Debt Instrument [Line Items]                    
Adjusted rate   18.00%                
Measurement Input, Option Volatility [Member]                    
Debt Instrument [Line Items]                    
Percentage of embedded derivative liability measurement input       100   100       100
Measurement Input, Exercise Price [Member]                    
Debt Instrument [Line Items]                    
Exercise price | $ / shares       $ 0.0119   $ 0.0119       $ 0.0155
Measurement Input, Risk Free Interest Rate [Member]                    
Debt Instrument [Line Items]                    
Percentage of embedded derivative liability measurement input       5.47   5.47       5.53
v3.23.3
SCHEDULE OF ACCRUED EXPENSES (Details) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Payables and Accruals [Abstract]    
Credit cards payable $ 150,833 $ 150,107
Accrued interest 93,273 80,949
Other accrued expenses 85,141 85,293
Total accrued expenses $ 329,247 $ 316,349
v3.23.3
ACCRUED EXPENSES (Details Narrative) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Payables and Accruals [Abstract]    
Accrued expenses $ 329,247 $ 316,349
v3.23.3
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
M & M Real Estate, Inc. [Member]    
Equipment expense $ 68,750 $ 66,110
Haltom City [Member]    
Operating lease payments $ 6,500  
v3.23.3
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)
Apr. 27, 2023
Apr. 01, 2023
Sep. 30, 2023
Dec. 31, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Common stock shares authorized     800,000,000 800,000,000
Preferred stock shares authorized     80,000,000 80,000,000
Preferred stock, par value     $ 0.001 $ 0.001
Common stock shares outstanding     156,537,143 153,652,143
Preferred stock shares outstanding     2,000,000 2,000,000
Percentage of sales commissions 20.00%      
Issued for service value $ 100,000      
Number of shares issued for services 2,585,000      
Common Stock [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Common stock shares issued   300,000    
Common stock issued value   $ 15,900    
v3.23.3
CONCENTRATION OF CUSTOMERS (Details Narrative) - Customer Concentration Risk [Member]
 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Sales Revenues Net [Member] | No Customer [Member]      
Concentration Risk [Line Items]      
Concentration risk, percentage 10.00%    
Sales Revenues Net [Member] | One Customer [Member]      
Concentration Risk [Line Items]      
Concentration risk, percentage   27.00%  
Accounts Receivable [Member] | One Customer [Member]      
Concentration Risk [Line Items]      
Concentration risk, percentage 22.00%    
Accounts Receivable [Member] | Two Customers [Member]      
Concentration Risk [Line Items]      
Concentration risk, percentage     46.00%
v3.23.3
SCHEDULE OF MATURITIES OF LEASE LIABILITIES (Details)
Sep. 30, 2023
USD ($)
Lease Liability  
2023 (three months remaining) $ 8,907
2024 17,814
Total future undiscounted lease payments 26,721
Less: Amounts representing interest (579)
Present value of lease liabilities $ 26,142
v3.23.3
LEASE LIABILITY (Details Narrative) - ft²
Oct. 28, 2022
Sep. 30, 2023
Operating lease, expires Jun. 30, 2024  
Operating lease dicount rate 5.50%  
Lease remaining lease term 1 year 3 months  
Haltom City [Member]    
Office area   18,000
v3.23.3
SCHEDULE OF BUSINESS ACQUISITIONS (Details) - Innovative Impressions, Inc. [Member]
Apr. 27, 2023
USD ($)
Business Acquisition [Line Items]  
Notes payable, net of discount $ 143,637
Total purchase consideration 143,637
Inventory $ 10,000
Estimated life - Inventory Less than 1 year
Fixed assets $ 133,637
Estimated life - Fixed assets 3 years
Total purchase price allocation $ 143,637
v3.23.3
SCHEDULE OF PRO FORMA FINANCIAL (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Business Combination and Asset Acquisition [Abstract]        
Revenue $ 2,077,855 $ 2,506,649 $ 4,216,762 $ 5,201,429
Operating income 210,619 472,472 178,806 552,658
Net income $ 180,094 $ 331,647 $ 222,292 $ 406,295
Net income per share $ 0.00 $ 0.00 $ 0.00 $ 0.00
v3.23.3
ASSET ACQUISITION (Details Narrative)
Apr. 27, 2023
USD ($)
Innovative Impressions, Inc. [Member]  
Asset Acquisition [Line Items]  
Total purchase price allocation $ 143,637
Innovative Impressions, Inc. [Member]  
Asset Acquisition [Line Items]  
Asset Acquisition, Price of Acquisition, Expected 200,000
Debt Instrument, Periodic Payment $ 8,333
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