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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended September 30, 2023

 

or

 

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

 

For the transition period from              to              

 

Commission file number: 333-172172

 

STEMTECH CORPORATION

(Exact name of registrant as specified in its charter)

 

Nevada   87-2151440

State or other jurisdiction

of incorporation or organization

  

(I.R.S. Employer

Identification No.)

 

4851 Tamiami Trail North, Suite 200

Naples, FL 34103

(Address of principal executive offices) (Zip Code)

 

(954) 715-6000

Registrant’s telephone number, including area code

 

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

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.001   STEK   OTC Markets Group

  

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting 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 ☒

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date 104,476,731 shares of common stock, $0.001 par value, issued and outstanding as of November 13, 2023.

 

 

   

 

 

STEMTECH CORPORATION

FORM 10-Q

September 30, 2023

 

 

INDEX

 

Cautionary Note Regarding Forward-Looking Statements 3
     
PART I – FINANCIAL INFORMATION 4
     
Item 1. Consolidated Financial Statements 4
  Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022 4
  Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2023 and 2022 (unaudited) 5
  Consolidated Statements of Stockholders’ Deficit for the three and 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 Consolidated Financial Statements (unaudited) 8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 21
Item 3 Quantitative and Qualitative Disclosures About Market Risk 26
Item 4. Controls and Procedures 26
     
PART II — OTHER INFORMATION 27
     
Item 1. Legal Proceeding 27
Item 1A. Risk Factors 27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 27
Item 3. Defaults Upon Senior Securities 27
Item 4. Mine Safety Disclosures 27
Item 6. Exhibits 27
     
SIGNATURES 28

 

 

 

 

 

 

 

 

 2 

 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Certain information set forth in this Quarterly Report on Form 10-Q, including in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere herein may address or relate to future events and expectations and as such constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements which are not historical reflect our current expectations and projections about our future results, performance, liquidity, financial condition, prospects and opportunities and are based upon information currently available to us and our management and their interpretation of what is believed to be significant factors affecting our business, including many assumptions regarding future events. Such forward-looking statements include statements regarding, among other things:

 

  · the size and growth of the potential markets for our products and the ability to serve those markets;
     
  · our expectations regarding our expenses and revenue, the sufficiency of our cash resources and needs for additional financing;
     
  · the rate and degree of market acceptance of any of our products;
     
  · our expectations regarding competition;
     
  · our anticipated growth strategies;
     
  · our ability to attract or retain key personnel;
     
  · our ability to establish and maintain development partnerships;
     
  · regulatory developments in the U.S. and foreign countries, especially those related to change in, and enforcement of, cannabis laws;
     
  · our ability to obtain and maintain intellectual property protection for our products; and
     
  · the anticipated trends and challenges in our business and the market in which we operate.

 

Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “should,” “would,” “could,” “scheduled,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “seek,” or “project” or the negative of these words or other variations on these words or comparable terminology. Actual results, performance, liquidity, financial condition and results of operations, prospects and opportunities could differ materially and perhaps substantially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors. These statements may be found under the section of our Annual Report on Form 10-K for the year ended December 31, 2022 (filed on April 17, 2023) entitled “Risk Factors” as well as in our other public filings.

 

In light of these risks and uncertainties, and especially given the start-up nature of our business, there can be no assurance that the forward-looking statements contained herein will in fact occur. Readers should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

 

 

 

 

 

 

 3 

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

STEMTECH CORPORATION

 

Consolidated Balance Sheets

(Unaudited)

 

         
   September 30,
2023		   December 31,
2022		 
ASSETS          
           
CURRENT ASSETS:          
Cash  $323,629   $132,487 
Accounts receivable, net   102,647    34,767 
Inventory, net   84,079    158,053 
Prepaid expenses and other current assets   184,377    287,063 
TOTAL CURRENT ASSETS   694,732    612,370 
           
Property and equipment, net   15,189    27,296 
Intangible assets, net   2,861,183    2,994,000 
Long term deposits   23,593    23,065 
Operating lease right-of-use assets, net   86,916    142,801 
Goodwill   467,409    467,409 
TOTAL ASSETS  $4,149,022   $4,266,941 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
           
CURRENT LIABILITIES:          
Accounts payable and accrued expenses  $2,650,165   $3,396,543 
Notes payable   1,360,313    446,246 
Convertible debentures, net of discount   1,392,972    482,885 
Operating lease liabilities - current   83,836    119,065 
Deferred revenues   82,835    39,170 
Factoring liability   276,028    214,249 
Derivative liability   –    2,717,633 
TOTAL CURRENT LIABILITIES   5,846,149    7,415,791 
           
Operating lease liabilities – non-current   –    23,068 
TOTAL LIABILITIES   5,846,149    7,438,859 
           
COMMITMENTS AND CONTINGENCIES (Note 11)   –    – 
           
STOCKHOLDERS' DEFICIT          
Common stock - $0.001 par value; 400,000,000 and 200,000,000 shares authorized as of September 30, 2023 and December 31, 2022, respectively; 104,476,731 and 53,442,147 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively   104,477    53,442 
Additional paid in capital   24,596,604    19,391,400 
Accumulated other comprehensive loss   (461,225)   (247,760)
Accumulated deficit   (25,196,690)   (21,631,241)
Stemtech Corporation stockholders’ deficit   (956,834)   (2,434,159)
Non-controlling interest in subsidiaries   (740,293)   (737,759)
TOTAL STOCKHOLDERS’ DEFICIT   (1,697,127)   (3,171,918)
           
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT  $4,149,022   $4,266,941 

 

See accompanying notes to these unaudited consolidated financial statements.

 

 

 4 

 

 

STEMTECH CORPORATION

 

Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)

                 
   For the three-months ended
September 30,		   For the nine-months ended
September 30,		 
   2023   2022   2023   2022 
                 
NET SALES  $1,298,322   $1,047,030   $3,559,789   $3,479,762 
                     
Cost of goods sold   265,162    160,509    719,879    789,566 
Freight-in   25,734    20,090    62,016    46,843 
TOTAL COST OF GOODS SOLD   290,896    180,599    781,895    836,409 
GROSS PROFIT   1,007,426    866,431    2,777,894    2,643,353 
                     
OPERATING EXPENSES                    
Commissions   386,070    306,293    807,678    761,345 
Selling and marketing   119,123    120,434    387,102    400,018 
General and administrative   1,081,224    3,822,131    4,366,912    6,073,133 
Research and development   –    –    13,800    – 
TOTAL OPERATING EXPENSES   1,586,417    4,248,858    5,575,492    7,234,496 
                     
LOSS FROM OPERATIONS   (578,991)   (3,382,427)   (2,797,598)   (4,591,143)
                     
OTHER INCOME (EXPENSE):                    
Other income (expenses), net   (1,525)   9,284    (2,626)   7,333 
Interest expense   (426,048)   (1,833,911)   (4,323,528)   (3,004,928)
Change in fair value of derivative liabilities   –    18,229,091    1,681,798    (4,112,025)
Gain on extinguishment of debt   –    4,237,648    814,132    3,358,842 
Gain on settlement of derivative liabilities   –    –    1,059,839    – 
Gain on forgiveness of PPP Loan   –    126,525    –    250,825 
TOTAL OTHER INCOME (EXPENSE), NET   (427,573)   20,768,637    (770,385)   (3,499,953)
                     
INCOME (LOSS) BEFORE INCOME TAXES   (1,006,564)   17,386,210    (3,567,983)   (8,091,096)
                     
PROVISION (BENEFIT) FOR INCOME TAXES   (33,529)   –    –    – 
NET INCOME (LOSS)   (1,040,093)   17,386,210    (3,567,983)   (8,091,096)
                     
NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS   1,707    (30,707)    (2,534)   (65,034)
                     
NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS  $(1,041,800)  $17,416,917   $(3,565,449)  $(8,026,062)
                     
Net income (loss) per common share                    
Basic  $(0.01)  $0.38   $(0.05)  $(0.18)
Diluted  $(0.01)  $0.38   $(0.05)  $(0.18)
                     
Shares used to compute income (loss) per share                    
Basic   100,572,563    45,588,294    76,221,547    44,983,240 
Diluted   100,572,563    45,588,294    76,221,547    44,983,240 
                     
Comprehensive income (loss)                    
Net income (loss)  $(1,041,800)  $17,416,917   $(3,565,449)  $(8,026,062)
Change in foreign currency translation adjustments   (223,557)   (406,374)    (213,465)   (243,667) 
Comprehensive income (loss) available to common stockholders  $(1,265,357)  $17,010,543   $(3,778,914)  $(8,269,729)

 

See accompanying notes to these unaudited consolidated financial statements.

 

 

 5 

 

STEMTECH CORPORATION

 

Consolidated Statements of Stockholders’ Deficit

For the three and nine months ended September 30, 2023 and 2022

(Unaudited)

 

                                         
                                         
Balance at June 30, 2022   44,795,673   $44,795   $10,663,909   $(38,529,297)  $(267,548)  $(28,088,141)  $(684,181)  $(28,772,322)
Stock based compensation   –    –    110,665    –    –    110,665    –    110,665 
Stock issued for services   974,344    976    2,805,135    –    –    2,806,111    –    2,806,111 
Conversion of convertible notes and accrued interest to common stock   1,935,330    1,935    636,065    –    –    638,000    –    638,000 
Stock issued for loan extension   845,512    846    3,320,928    –    –    3,321,774    –    3,321,774 
Stock issued as debt issuance cost   74,488    74    199,926    –    –    200,000    –    200,000 
Foreign currency translation adjustment   –    –    –    –    (406,374)   (406,374)   –    (406,374)
Loss attributable to non-controlling interest   –    –    –    –    –    –    (30,707)   (30,707)
Net income   –    –    –    17,416,917    –    17,416,917    –    17,416,917 
Balance at September 30, 2022   48,625,347   $48,626   $17,736,628   $(21,112,380)  $(673,922)  $(4,001,048)  $(714,888)  $(4,715,936)
                                         
                                         
   Common Stock   Additional Paid-in   Accumulated   Accumulated Other Comprehensive       Non-controlling   Total Stockholders' 
   No. of Shares   Amount   Capital   Deficit   Loss   Sub total   Interest   Equity 
Balance at December 31, 2021   44,685,673   $44,685   $10,116,296   $(13,086,318)  $(430,255)  $(3,355,592)  $(649,854)  $(4,005,446)
Stock based compensation   –    –    328,388    –    –    328,388    –    328,388 
Stock issued for services   984,344    986    2,835,125    –    –    2,836,111    –    2,836,111 
Stock issued for loan extension   945,512    946    3,620,828    –    –    3,621,774    –    3,621,774 
Conversion of convertible notes and accrued interest to common stock   1,935,330    1,935    636,065    –    –    638,000    –    638,000 
Stock issued as debt issuance cost   74,488    74    199,926    –    –    200,000    –    200,000 
Foreign currency translation adjustment   –    –    –    –    (243,667)   (243,667)   –    (243,667)
Loss attributable to non-controlling interests   –    –    –    –    –    –    (65,034)   (65,034)
Net loss   –    –    –    (8,026,062)   –    (8,026,062)   –    (8,026,062)
Balance at September 30, 2022   48,625,347   $48,626   $17,736,628   $(21,112,380)  $(673,922)  $(4,001,048)  $(714,888)  $(4,715,936)
                                         

 

 

                                 
   Common Stock   Additional Paid-in   Accumulated   Accumulated Other Comprehensive       Non- controlling   Total Stockholders' 
   No. of Shares   Amount   Capital   Deficit   Income (Loss)   Sub total   Interests   Deficit 
Balance at June 30, 2023   96,317,252   $96,319   $23,728,202   $(24,154,890)  $(237,668)  $(568,037)  $(742,000)  $(1,310,037)
Stock based compensation   –    –    110,665    –    –    110,665    –    110,665 
Stock issued for services   37,500    38    1,800    –    –    1,838    –    1,838 
Conversion of convertible notes and accrued interest to common stock   8,121,979    8,120    755,937    –    –    764,057    –    764,057 
Settlement of accrued liabilities for common stock   –    –    –    –    –    –    –    – 
Foreign currency translation adjustment   –    –    –    –    (223,557)   (223,557)   –    (223,557)
Income attributable to non-controlling interests   –    –    –    –    –    –    1,707    1,707 
Net loss   –    –    –    (1,041,800)   –    (1,041,800)   –    (1,041,800)
Balance at September 30, 2023   104,476,731   $104,477   $24,596,604   $(25,196,690)  $(461,225)  $(956,834)  $(740,293)  $(1,697,127)
                                         
                                         
Balance at December 31, 2022   53,442,147   $53,442   $19,391,400   $(21,631,241)  $(247,760)  $(2,434,159)  $(737,759)  $(3,171,918)
Stock based compensation   –    –    328,388    –    –    328,388    –    328,388 
Stock issued for services   6,113,078    6,113    427,838    –    –    433,951    –    433,951 
Conversion of convertible notes and accrued interest to common stock   30,371,836    30,372    2,373,081    –    –    2,403,453    –    2,403,453 
Settlement of accrued liabilities for common stock   12,149,670    12,150    794,926    –    –    807,076    –    807,076 
Stock issued for LFR Acquisition   2,400,000    2,400    269,520    –    –    271,920    –    271,920 
Reclassification of derivative liabilities to APIC   –    –    1,011,451    –    –    1,011,451    –    1,011,451 
Foreign currency translation adjustment   –    –    –    –    (213,465)   (213,465)   –    (213,465)
Loss attributable to non-controlling interests   –    –    –    –    –    –    (2,534)   (2,534)
Net loss   –    –    –    (3,565,449)   –    (3,565,449)    –    (3,565,449)
Balance at September 30, 2023   104,476,731   $104,477   $24,596,604   $(25,196,690)  $(461,225)  $(956,834)  $(740,293)  $(1,697,127)

 

See accompanying notes to these unaudited consolidated financial statements.

 

 6 

 

 

STEMTECH CORPORATION

 

Consolidated Statements of Cash Flows

(Unaudited)

 

         
  

For the Nine Months Ended

September 30,

 
   2023   2022 
         
CASH FLOWS FROM OPERATING ACTIVITIES          
Net loss  $(3,567,983)  $(8,091,096)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   432,049    330,169 
Amortization of right of use asset   55,885    46,388 
Stock compensation expense   328,388    328,388 
Stock issued for services   433,951    2,836,111 
Amortization of debt discount   2,443,506    2,400,670 
Change in fair value of derivative liabilities   (1,681,798)   4,112,025 
Non-cash interest expense from issuance on debt (derivative)   1,604,081    – 
Gain on settlement of derivative liabilities   (1,059,839)   – 
Gain on forgiveness of PPP Loan   –    (250,825)
Gain on extinguishment of debt   (814,132)   (3,358,842)
Changes in operating assets and liabilities, net of effect of acquisitions:          
Accounts receivable   (67,880)   (29,034)
Inventory   73,974    254,608 
Prepaid expenses and other current assets   102,686    69,652 
Accounts payable and accrued expenses   828,263    406,600 
Long term deposits   (528)   10,276 
Operating lease liabilities   (58,297)   (41,240)
Deferred revenues   43,665    – 
Net cash used in operating activities   (904,009)   (976,150)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Proceeds from notes payable   1,711,000    341,939 
Repayment of note payable   (403,293)   (67,228)
Net proceeds from financing arrangement   909    239,986 
Net cash provided by financing activities   1,308,616    514,697 
           
Effects of currency translation on cash   (213,465)   (243,667)
           
Net increase (decrease) in cash   191,142    (705,120)
Cash, beginning of period   132,487    828,206 
Cash, end of period  $323,629   $123,086 
           
Supplemental Disclosure of Cash Flow Information          
Cash paid for interest  $46,243   $– 
Cash paid for income taxes  $–   $– 
           
Supplemental noncash transactions          
Stock issued for LFR Acquisition  $271,920   $– 
Issuance of common stock for conversion of debt  $2,403,453   $– 
Settlement of accrued liabilities for common stock  $807,076   $– 
Reclassification of derivative liabilities to APIC  $1,011,451   $– 
Recognition of right of use asset - operating lease  $–   $53,463 

 

See accompanying notes to these unaudited consolidated financial statements.

 

 

 7 

 

 

STEMTECH CORPORATION

 

Notes to Consolidated Financial Statements

(Unaudited)

 

Note 1 – Organization and Basis of Presentation

 

Stemtech Corporation and its Subsidiaries (collectively, the “Company”) was incorporated in the State of Nevada, USA on September 4, 2009 under the previous name Globe Net Wireless Corp. On November 19, 2021, the Company adopted an Amendment to its Articles changing the name of the Corporation to Stemtech Corporation in the state of Nevada, and on April 14, 2022, FINRA gave final approval for said name change, as evidenced by the 8-K filed that date. Stemtech is a global network marketing company that develops science-based products that it believes supports wellness by helping the body maintain healthy stem cell physiology, also known as stem cell enhancers. Known as the Stem Cell Nutrition Company®, the Company is a pioneer in stem cell science, and believes it can demonstrate that adult stem cells function as the natural renewal system of the body. The Company believes our products enhance and support the work of the body’s stem cells by releasing more stem cells, helping to circulate them in the blood and migrate them into tissues, where they can perform their daily function of renewal for optimal health. Our mission is to enhance wellness and prosperity around the world. These products are marketed internationally by the Company’s subsidiaries and through independent distributors. The Company markets its products under the following brands: RCM System, stemrelease3™, Stemflo® MigraStem™, OraStem® (Oral Health Care), D-Fuze™ (Electromagnetic Frequency Blocker), Cellect One™ Rapid Renew Stem Cell Peptide Night Cream.

 

On August 19, 2021, Stemtech Corporation (“Stemtech”), a Delaware corporation, entered into a Merger Agreement (the “Merger Agreement”) with Globe Net Wireless Corp. (“Globe Net” or “GNTW”). The merger was accounted for as a reverse acquisition and recapitalization in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations. Management evaluated the guidance contained in ASC 805 with respect to the identification of the acquirer in the merger and concluded, based on a consideration of the pertinent facts and circumstances, that Stemtech acquired Globe Net for financial accounting purposes. On November 9, 2021, the Company changed its fiscal year end from a fiscal year end of August 31 to a calendar year end of December 31.

 

The consolidated financial statements include the accounts of Stemtech (Parent) and its ten (10) subsidiaries:

 

1) Stemtech HealthSciences Corp (U.S.A.) (“Stemtech HealthSciences”) – 100%
2) Stemtech Canada, Inc. (“Canada”) – 100%
3) Stemtech Health Sciences S. de R.L. de C.V. (“Mexico”) – 100%
4) Stemtech Services SARL de C.V. (Mexico) (“Stemtech Mexico”) – 100%
5) Stemtech Malaysia Holdings Sdn. Bhd. (“Malaysia Holdings”) – 100%
6) Stemtech Malaysia Sdn. Bhd. (“Malaysia”) – 70%
7) Stemtech Taiwan Holding, Inc. (“Taiwan”) – 100%
8) Tecrecel S.A. (“Ecuador”) – 100%
9) Food & Health Tech Foodhealth SA (“Ecuador FHTFH”) – 100%
10) Life Factor Research (“LFR”) – 100%

 

 

 

 

 

 8 

 

 

Note 2 — Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2022, filed April 17, 2023. In the opinion of management, all adjustments (consisting of normal recurring adjustments unless otherwise indicated) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2023, are not necessarily indicative of the results that may be expected for the year as a whole. All intercompany accounts and transactions have been eliminated in consolidation.

 

Going Concern

 

The accompanying consolidated financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and classification of liabilities and commitments in the normal course of business. The accompanying consolidated financial statements do not reflect any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might result if the Company is unable to continue as a going concern.

 

The Company has experienced recurring net losses and negative cash flows from operations since inception and has an accumulated deficit of approximately $25.2 million and a working capital deficiency of approximately $5.2 million at September 30, 2023. The Company has funded its activities to date almost exclusively from debt and equity financing. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company will continue to require substantial funds to implement its new investment acquisition plans. Management’s plans in order to meet its operating cash flow requirements include financing activities such as private placements of its common stock, preferred stock offerings, and issuances of debt and convertible debt instruments.

 

The Company’s ability to continue as a going concern for the next twelve months from the issuance of these financial statements depends on its ability to execute its business plan, increase revenue, and reduce expenses. Such conditions raise substantial doubt about the Company’s ability to continue as a going concern.

 

Use of Estimates

 

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash

 

The Company considers all highly liquid temporary investments purchased with original maturities of three months or less at the date of purchase to be cash equivalents. The Company has no cash equivalents as of September 30, 2023 and December 31, 2022. The Company maintains certain cash balances at several institutions located outside the United States. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk.

 

 

 

 9 

 

 

Inventory

 

Inventory is comprised of finished goods and raw materials and is valued at the lower of cost or market, using the “first-in, first-out” method in determining cost. Management evaluates the allowance for inventory obsolescence on a regular basis and has determined that no allowance for slow moving or obsolete inventory is necessary as at September 30, 2023 and December 31, 2022.

 

Impairment of Long-Lived Assets

 

The Company assesses, on an annual basis, the recoverability of the carrying amount of intangible assets and long-lived assets used in continuing operations. A loss is recognized when expected future cash flows (undiscounted and without interest) are less than the carrying amount of the asset. The impairment loss is determined as the difference by which the carrying amount of the asset exceeds its fair value. The Company evaluated its long-lived assets for any indications of impairment. The Company concluded that there was no impairment, however there can be no assurance that market conditions will not change or demand for the Company’s products will continue which could result in impairment of long-lived assets in the future.

 

Revenue Recognition

 

It is the Company’s policy that revenues from product sales is recognized in accordance with ASC 606 “Revenues from Contracts with Customers.” Five basic steps must be followed before revenue can be recognized; (1) Identifying the contract(s) with a customer that creates enforceable rights and obligations; (2) Identifying the performance obligations in the contract, such as promising to transfer goods or services to a customer; (3) Determining the transaction price, meaning the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer; (4) Allocating the transaction price to the performance obligations in the contract, which requires the Company to allocate the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or services promised in the contract; and (5) Recognizing revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service to a customer. The amount of revenue recognized is the amount allocated to the satisfied performance obligation.

 

Revenues from direct retail sales to consumers and revenues from independent distributors occur when title and risk of loss had passed, which generally occurs at the time the products are shipped. Revenues are recorded net of estimated sales returns and allowances.

 

Allowances for product returns are provided at the time the sale is recorded. This liability is based upon historic return rates and the relevant return pattern, which reflects anticipated returns to be received over a period of up to one year following the original sale. As at September 30, 2023, the Company had a reserve for sales returns of approximately $6,800 (December 31, 2022 - $7,000), which is included in accrued liabilities in the accompanying consolidated balance sheets.

 

Comprehensive Income (Loss)

 

The other comprehensive income (loss) in the accompanying consolidated financial statements relates to the net income (loss) of the Company for the respective period as well as unrealized foreign currency translation adjustments.

 

Foreign Currency Translation

 

A portion of the Company’s business operations occur outside the United States. The local currency of each of the Company’s subsidiaries is generally its functional currency. All assets and liabilities are translated into U.S. Dollars at exchange rates existing at the balance sheet dates, revenue and expenses are translated at weighted-average exchange rates and stockholders’ deficit is recorded at historical exchange rates. The resulting foreign currency translation adjustments are recorded as a separate component of stockholders’ deficit in the consolidated balance sheets and as a component of comprehensive income (loss) . Transaction gains and losses are included in other income (expense), net in the consolidated statements of operations and comprehensive income (loss).

 

 

 

 10 

 

 

Net Income (Loss) per Common Share, basic

 

Basic net income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period.

  

For the nine months ended September 30, 2023 and 2022, the dilutive effect of 14,448,206 and 3,836,000, respectively, of common stock warrants have not been included in the average shares outstanding for the calculation of net income (loss) per share as the effect would be anti-dilutive as a result of our net income (loss) in these periods.

 

Fair Value Measurements

 

As defined in ASC 820 “Fair Value Measurements,” fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

 

The Company determines the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company performs an analysis of the assets and liabilities at each reporting period end.

 

The Company’s financial instruments consist of cash, accounts receivable, accounts payable, accrued interest, notes payable and, convertible debentures. The carrying amounts of these financial instruments are of approximate fair value due to either length of maturity or interest rates that approximate prevailing rates unless otherwise disclosed in these financial statements. The Company’s derivative liabilities are valued using option pricing models with Level 3 inputs.

 

Sequencing

 

Based upon ASC 840-15-25, the Company has adopted a sequencing approach regarding the application of ASC 815-40 to its outstanding convertible notes and warrants. Pursuant to the sequencing approach, the Company evaluates its contracts based upon the earliest issuance date.

 

Note 3 – Inventory

 

Inventory consists of the following components:

        
   September 30,   December 31, 
   2023   2022 
Finished goods  $84,079   $103,297 
Raw materials   –    54,756 
Total Inventory  $84,079   $158,053 

 

 

 

 

 11 

 

 

Note 4 – Intangible Assets

 

On May 7, 2018, Stemtech Corporation purchased the assets of Stemtech International, Inc. (the “Former Parent Company”), out of a Chapter 7 Bankruptcy for $400,000 and assumed a $4,000,000 note from RBCD Holdings Inc (formerly RBCD Holdings LLC) (“RBCD Holdings”), a related party owned by the Company’s Directors, purchased an outstanding note at its face value of $4,000,000 from the Opus Bank (the “Opus Note”) and subsequently converted in 2019 into 2,000,000 shares of the Company’s common stock of which 250,000 shares of the Company’s stock was allocated to Charles Arnold, an officer and director.

 

Pursuant to a bankruptcy decree, the Company paid $400,000 in cash and assumed a note payable in the amount of $4,000,000 representing 100% percent of the issued and outstanding capital stock of Stemtech Canada, Inc. (Canada), Stemtech Health Sciences S. de R.L. de C.V. (Mexico), Stemtech Services SARL de C.V. (Mexico) (“Stemtech Mexico”), Ste, Stemtech New Zealand, Ltd. (“Stemtech New Zealand”), Stemtech Taiwan Holding, Inc. (U.S.A.), PT Stemtech Indonesia (Indonesia Pty Ltd.), Stemtech Korea (Korea) and Tecrecel S.A. (Ecuador); and Stemtech Malaysia Holdings S/B (Malaysian Parent) that owns two-thirds of its subsidiary Stemtech Malaysia Holding Sdn. Bhd. (Malaysia).

 

Fair Value of the Acquired Assets

 

The Company accounted for the acquisitions as business combinations using the acquisition method of accounting as prescribed in ASC Topic 805 Business Combinations (“ASC 805”) and ASC Topic 820 – Fair Value Measurements and Disclosures (“ASC 820”). In accordance with ASC 805 and ASC 820, the Company assigned fair value to the tangible assets acquired, identifiable intangible assets and liabilities assumed as of the acquisition dates. Goodwill as of the acquisition date is measured as the excess of purchase consideration over the fair value of tangible and identifiable intangible assets acquired and liabilities assumed.

 

The excess purchase price has been recorded as goodwill in the amount of $467,409 at September 30, 2023 and December 31, 2022. The estimated useful life of the identifiable intangible assets is six to fourteen years. The goodwill is amortizable for tax purposes.

 

Fair Value of the LFR Acquisition

 

In March 2023, the Company acquired 100% of LFR, a research and development company with expertise in the formulation of products. The Company accounted for this transaction under the asset acquisition method of accounting as prescribed in ASC Topic 805 Business Combinations (“ASC 805”) and ASC Topic 820 – Fair Value Measurements and Disclosures (“ASC 820”). In accordance with ASC 805 and ASC 820, the Company assigned fair value to the tangible assets acquired, identifiable intangible assets and liabilities assumed as of the acquisition dates.

 

The consideration paid for 100% of LFR was 2.4 million shares of the Company with a fair value of $271,920. At the time of purchase, LFR’s liabilities exceeded its assets by $15,205, and the difference between the net tangible assets and the purchase price, being $287,125, was allocated to a non-compete agreement and will be amortized over 18 months.

 

 

 

 

 

 12 

 

 

The components of all acquired intangible assets were as follows at September 30, 2023 and December 31, 2022:

            
   September 30, 2023   December 31, 2022  

Average

Estimated Life

(Years)

 
Patent products  $2,344,900   $2,344,900    14 
Trade names and trademarks   1,106,000    1,106,000    Indefinite 
Customer/distribution list   1,461,300    1,461,300    6 
Non-compete agreement   287,125    –    18 months 
Accumulated amortization   (2,338,142)   (1,918,200)     
Total  $2,861,183   $2,994,000      

 

Intellectual Property

 

The Company has five current patents filed international, and as our research and development progress, plan on filing more patents as we progress. Our current patent portfolio includes:

 

·Patent US 9, 289, 375 – Skin Care Composition Containing Combinations of Natural Ingredients
·Patent AU 201127647 – Methods and Composition for Enhancing Stem Cell Mobilization
·Patent MX 344304 – Metodos y Composiciones para Mejorar las Celulas Madre
·Patent US 10,159,705 – Methods and Composition for Enhancing Stem Cell Mobilization
·Patent MX 358857 – Composiciones para el Cuidado de la Piel que Contienen Combinaciones de Ingredientes Naturales
·Patent MX 358857 (part 1 of 3) - Composiciones para el Cuidado de la Piel que Contienen Combinaciones de Ingredientes Naturales
·Patent MX 358857 (part 2 of 3) - Composiciones para el Cuidado de la Piel que Contienen Combinaciones de Ingredientes Naturales
·Patent MX358857 (part 3 of 3) - Composiciones para el Cuidado de la Piel que Contienen Combinaciones de Ingredientes Naturales

  

Note 5 – Operating Lease Commitments

 

On August 16, 2021, the Company extended its office space lease with Sunbeam Properties Inc. to rent approximately 5,000 square feet of space in Miramar, Florida. The Company pays $8,900 per month in rent until the end of the extended lease September 30, 2024. The Company, incurred lease expense for its operating leases of $19,963 and $61,156 for each of the three and nine month periods ended September 30, 2023, respectively and Company’s weighted-average remaining lease term relating to its operating leases is 0.95 years, with a weighted-average discount rate of 10%.

 

In June 2022, the Company entered into a lease for office space in Mexico which terminates on May 31, 2024.

 

The following table presents information about the amount and timing of liabilities arising from the Company’s operating leases as of September 30, 2023:

    
Maturity of operating lease liabilities for the following periods:    
October 1, 2023 to December 31, 2023  $23,810 
January 1, 2024 to September 30, 2024   64,935 
Total undiscounted operating lease payments   88,745 
Less: imputed interest   4,909 
Present value of operating lease liabilities  $83,836 

 

The Company’s operating leases do not provide an implicit rate that can readily be determined. Therefore, the Company uses a discount rate based on its incremental borrowing rate, which is determined using the average of borrowing rates explicitly stated in the Company’s convertible debt.

 

 

 

 13 

 

 

Note 6 – Notes Payable

 

Schedule of notes payable as of:

        
   September 30,
2023		   December 31,
2022		 
Secured Royalty Participation Agreements (1)  $–   $150,000 
Vehicle and equipment loans (2)   –    11,246 
Notes payable (3)   1,360,313    285,000 
Convertible debentures, net of discount (4)   1,392,972    482,885 
Total notes payable, net of discount of $661,657 and $1,823,265 as of September 30, 2023 and December 31, 2022, respectively  $2,753,285   $929,131 

 

(1) During June 2018, the Company entered into two (2) Secured Royalty Participation Agreements with Profile Solutions, Inc. (“PSI”) in exchange for working capital loans totaling $150,000. The loan amounts were due in June of 2019, plus an IRR of 18%. In consideration of these loan obligations, The Company agreed to pay a monthly royalty for one year being the greater of: x) 10% of the loan amount or y) 1.5% of the monthly gross revenues. PSI claims that these loans are in default, but the Company contends the loans reflected the terms of these agreements were usurious and contends that the loans are not legally enforceable obligations. This case was dismissed by the Court March 16, 2023 leaving a gain on extinguishment of $150,000.
   
(2) In 2019, Malaysia borrowed $27,295 to purchase a car and as of September 30, 2023, the note was paid in full. As of December 31, 2022, there was a balance of $11,246.

  

(3)

In 2019, the Company engaged in agreements involving promissory notes with three lenders, collectively amounting to a principal balance of $375,000. These notes, bearing effective interest rates of 10%, mature within a one-year timeframe. Additionally, the Company allotted 45,000 shares of common stock, cumulatively valued, as a commitment incentive, resulting in an associated debt discount of $22,500. In the subsequent year, 2020, the Company further entered into promissory note arrangements with four lenders, culminating in an aggregate principal balance of $225,000. The effective interest rates for these notes range between 8% and 10% annually. As of December 31, 2022, the outstanding balance for the notes from both the 2019 and 2020 issuances amounted to $275,000, accompanied by accrued interest totaling $50,819.

 

On October 20, 2021, the Company issued a pair of promissory notes to investors, totaling $10,000. These notes were duly settled in their entirety on January 18, 2023 and April 3, 2023, respectively. Subsequently, on June 12, 2023, a conversion of principal took place, with $275,000 being converted at a rate of $0.05 per share, resulting in the issuance of 6,777,121 common shares.

 
On May 1, 2023, the Company amended its convertible promissory note with Sharing Services Global Corporation (“SHRG”), wherein SHRG capitalized $222,556 of accrued interest and waive its conversion rights as per the original agreement, see below. The promissory note is no longer convertible and is included in the chart above with plain notes payable.

 

On July 21, 2023, the Company issued a promissory note with an investor for $150,000, net of original issue discount of $22,600. The note matures in eleven months and accrues interest at 13% per annum. The first nine payments will be in installments of $20,241 and the final 2 payments will be $7,000 each. As of September 30, the Company made $40,482 of payments leaving a principal balance of $132,118 and $3,862 of accrued interest.

 

As of September 30, 2023, and December 31, 2022, the outstanding balance for these notes stood at $1,413,301 and $285,000, respectively.

 

 

 

 

 14 

 

 

(4)

During the fiscal year concluding on December 31, 2021, the Company issued a cumulative total of $2,423,738 in convertible promissory notes to investors. These notes featured varying maturity dates spanning from nine months to three years, coupled with interest rates ranging from 8% to 12% per annum. In addition, the Company distributed 154,173 shares of common stock and granted warrants allowing the purchase of 2,400,000 common stock shares at exercise prices spanning between $2.685 and $3.00 per share. The recorded value of both the common stock and warrants was attributed as a discount to the notes, valued at fair market value.

 

In the second quarter of 2022, one of the notes held by investor MCUS LLC (“MCUS”) was extended by 60 days, until August 1, 2022. As part of the extension agreement, the Company issued 100,000 shares of common stock to the noteholder. Moreover, the conversion price of the note was reduced to the lower of (i) 50% of the lowest volume weighted average prices for common stock over the 30 trading days leading up to the conversion notice date and (ii) the Closing Price on the Closing Date, capped at $2.25. On August 18, 2022, this note was extended to September 30, 2022, in exchange for 200,000 shares of common stock and in the fourth quarter of 2022, this note was once again extended, this time until May 31, 2023.

 

On July 13, 2022, another note held by investor Leonite Fund 1, LP (”Leonite”), was extended to September 1, 2022, in exchange for 183,780 warrants, 75,512 common stock shares, and an increased principal amount of $70,833. On September 8, 2022, the same note was further extended to May 26, 2023, accompanied by a rise in the interest rate from 10% to 18% per annum. The amendment of this note resulted in a recognized loss on extinguishment amounting to $252,429.

 

Throughout the third and fourth quarters of 2022, the Company issued a collective sum of $400,000 in convertible notes payable, net of discount, in several installments to MCUS and Leonite. These notes accrued interest varying from 10% to prime plus 8% per annum and possessed maturity dates nine months from their issuance. Additionally, the lenders received 95,115 warrants with an exercise price equivalent to the lower of $2.685 or 65% of the lowest traded price over the preceding 30 days, and 81,760 warrants with an exercise price equal to the lower of $2.685 or 50% of the Volume Weighted Average Price (VWAP) over the preceding 30 days. All the warrants issued were set to expire five years after their issuance date.

 

During the year ended December 31, 2022, a sum of $798,526 in principal and $25,473 in accrued interest was converted into 4,114,816 common shares. As a result, a balance of $482,885, net of discount and accrued interest of $381,259 remained outstanding as of December 31, 2022.

 

In January 2023, the Company issued 5,266,763 upon the conversion of $263,000 in notes payable. Upon conversion and settlement of the derivative liability, the Company recognized a $318,678 gain on extinguishment.

 

  On February 28, 2023, the Company entered into a comprehensive settlement and exchange agreement concerning a Senior Secured Convertible Promissory Note with Leonite. Under this agreement, Leonite agreed to settle its outstanding liability and cancel its warrants in exchange for 10,648,152 common stock shares of the Company to purchase common stock at $0.05 per share. As the debt was settled, the Company recognized a loss on extinguishment worth $132,142 and owed $637,684 worth of common shares. In the second quarter of 2023, the Company issued 6,340,591 common shares, leaving a payable balance of 4,307,561 shares of common stock valued at $573,336, which is included in accounts payable and accrued expenses on the consolidated balance sheet as of June 30, 2023. On September 21, 2023, the Company issued the remaining 4,307,561 shares of common stock.
   
  On March 27, 2023, the Company executed an investment agreement with an institutional investor (“Holder”) for up to $7,000,000 through a convertible promissory note, share purchase agreement, and warrant agreement (the "2023 Note"). The 2023 Note, with a principal amount reaching up to $7,000,000, carried an original issue discount of 12% and was structured to be disbursed in four installments. These installments included a first disbursement of $1,000,000 on March 27, 2023, a second disbursement of $200,000 within three days after filing an S-1 registration statement, a third disbursement of $500,000 forty-five days after the effectiveness of the S-1 registration statement, and a fourth disbursement of $120,000 forty-five days after the third disbursement. The S-1 Registration Statement was filed on May 9, 2023. The 2023 Note bore an interest rate of seven percent (7%) per annum and could be redeemed by the Company at any time for an amount equivalent to one hundred twenty-five percent (125%) of the outstanding principal and interest on the Note. Additional disbursements were discretionary on the Holder's part and could be executed at any time. Should the Holder's broker decline custody of the issued securities, the Holder would have no obligation to adhere to the disbursement schedule, yet the option to make such disbursement would remain.

 

 

 

 

 15 

 

 

   
  On April 11, 2023, the Company amended its Promissory Note with MCUS, resulting in the conversion price being fixed at $0.05. Since the Promissory Note is not significantly different after the amendment, the note was treated using modification accounting. After eliminating the bifurcated derivative liability, the company recorded a gain of $171,362 on settlement of derivative liabilities. On May 1, 2023, the Company partially settled its debt with MCUS by agreeing to issue 7,739,938 shares of common stock, of which 5,121,200 were issued, resulting in a loss on extinguishment of $79,212. The Company retains an obligation towards MCUS, entailing the issuance of 2,618,738 shares of common stock valued at $130,987, which is included in accounts payable and accrued expenses as of June 30, 2023. On August 11, 2023, the Company issued the remaining 2,559,600 shares of common stock.
   
  Similarly, on May 1, 2023, the Company amended its convertible promissory note with SHRG, wherein SHRG capitalized $222,556 of accrued interest and waive its conversion rights as per the original agreement. However, this amendment was contingent upon the Company making a payment of $222,556 to SHRG, which was duly fulfilled in May 2023. This amendment was treated using extinguishment accounting which eliminated the bifurcated derivative liability and added additional debt discount resulted in a recorded gain of $557,793 on extinguishment.
   
  As of September 30, 2023, the outstanding gross principal balance for the two convertible notes was $227,777 and $1,773,864, and the remaining unamortized debt discount for each note was $0 and $608,669, respectively.
   
  As of December 31, 2022, the outstanding gross principal balance for the three convertible notes was $1,400,000, $267,082, and $639,068, and the remaining unamortized debt discount for each note was $1,259,825, $183,391, and $380,049, respectively.
   
  The aggregate balance of convertible notes payable, net of discount, as of September 30, 2023 and December 31, 2022 was $1,392,972 and $482,885, respectively.

 

Note 7 – Derivative Liabilities

 

The Company issued debt instruments that consist of the issuance of convertible notes with variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock, which gives rise to a derivative liability which is a non-cash liability. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Pursuant to ASC Subtopic 815-15 Embedded Derivatives (“ASC 815-15”), the fair values of the variable conversion options and warrants and shares to be issued were recorded as derivative liabilities on the issuance date and revalued at each reporting period. Based upon ASC 840-15-25, the Company has adopted a sequencing approach regarding the application of ASC 815-40 to its outstanding convertible notes and warrants. Pursuant to the sequencing approach, the Company evaluates its contracts based upon the earliest issuance date.

 

Schedule of Derivative Liabilities

            
   Derivative Liability - Convertible Notes   Derivative Liability - Warrants   Total 
Balance as of January 1, 2022  $1,252,397   $2,972,188   $4,224,585 
Change due to issuances   3,401,528    1,964,761    5,366,289 
Change due to redemptions   (2,850,311)   (7,246,201)   (10,096,512)
Change in fair value   840,180    2,383,091    3,223,271 
Balance as of December 31, 2022   2,643,794    73,839    2,717,633 
Change due to issuances   1,279,735    1,233,201    2,512,936 
Change due to redemptions   (2,533,464)   (1,015,307)   (3,548,771)
Change in fair value   (1,390,065)   (291,733)   (1,681,798)
Balance as of September 30, 2023  $–   $–   $– 

 

 

 

 

 16 

 

 

The Company used a Monte Carlo model to estimate the fair value of its derivatives. A summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the fair value of derivative liabilities during the following periods:

               
      September 30, 2023       December 31, 2022  
Stock price     N/A       $0.09 - $10.85  
Contractual term (in years)     N/A       0.00 - 5.00  
Volatility (annual)     N/A       47.4% - 236%  
Risk-free rate     N/A       0.19% - 4.38%  

 

Note 8 – Financing Arrangement

 

During the year ended December 31, 2022, the Company entered into five non-recourse agreements for the sale of future receipts receiving gross proceeds of $528,984 which provided the Company with the ability to convert its account receivables into cash. Under the terms of the agreements, the Company must pay a specified amount each day until the financed receivables are fully paid. The agreements have an effective interest rate within the range of approximately 36% and 40%, which includes a discount of $143,446. The outstanding balance is secured by an interest in virtually all assets of the Company, with a first security interest on accounts receivable.

 

During the nine month period ended September 30, 2023, the Company entered into various non-recourse agreements for the sale of future receipts for net proceeds of $953,786, receiving $766,111 in cash, which provided the Company with the ability to convert its account receivables into cash.

 

The Company accounts for these agreements as a financing arrangement, with the purchase price recorded as a liability and daily repayments made are a reduction of the liability. As of September 30, 2023, there was an outstanding balance of $240,895 (December 31, 2022 - $292,636) which is presented net of a discount of $35,133 (December 31, 2022 - $78,387).

 

Note 9 – Stockholders’ (Deficit) Equity

 

On May 5, 2023, the Company amended its articles of incorporation to increase the number of authorized shares of common stock of the Company to 400,000,000.

  

Stock issuance for services and stock based compensation

 

During the nine months ended September 30, 2023, the Company issued 6,113,078 shares of common stock, to officers, employees and vendors for services valued at $433,951.

 

During the nine months ended September 30, 2023 and 2022, the Company also recognized $328,388 of expense relating to the vesting of common stock issued to the Company’s Chairman and CEO.

 

Settlement of accrued liabilities for common stock

 

During the nine months ended September 30, 2023, the Company issued 12,149,670 shares of common stock to officers, employees and vendors for accumulated past services of $807,076, including $416,667 to its Chairman and CEO, see note 10. The Company also issued 8,121,979 shares of common stock valued at $7,64,057 to previous debt holders. The Company owes 157,023 shares of common stock to a vendor for services, leaving a payable of $10,572, which is included in accounts payable and accrued expenses on the consolidated balance sheet as of September 30, 2023.

 

 

 

 17 

 

 

Stock issued for LFR Acquisition

 

During the nine months ended September 30, 2023, the Company issued 2,400,000 shares of common stock for the acquisition of LFR with a fair value of $271,920 (see Note 4).

 

Stock issued for loan extension

 

On June 8, 2022, the Company issued 100,000 shares of common stock valued at $300,000 to one of its note holders per the loan extension agreement (see Note 6). The Company recognized $878,806 loss on extinguishment of the note.

 

On July 13, 2022, the Company entered into an amendment of its original promissory convertible note of September 1, 2021 with the note holder. The terms of the original note was amended to increase the principal balance of the note by $70,833; as well as granting 186,220 warrants and 75,512 common shares as consideration for a 90-day extension of the note. The common shares were issued to the lender as well as the original 74,488 common shares that were to be issued upon entering into the original loan agreement dated September 1, 2021. The Company recognized $955,658 loss on extinguishment of the note.

 

On August 18, 2022, the Company entered into an additional amendment of a previous amendment dated May 31, 2022, of its original promissory convertible note executed on September 3, 2021. Under the terms of the new amendment dated August 18, 2022, the note is extended until September 30, 2022 and in exchange, the Company agreed to provide the noteholder with 200,000 shares of common stock. In addition, the noteholder also agreed to cancel 500,000 warrants previously issued to the noteholder in exchange for an additional 200,000 shares of Company’s common stock. The Company recognized $423,176 loss on extinguishment of the note and a $1,183,544 gain on extinguishment upon cancellation of the warrants and derivative liabilities associated with the warrants.

 

On August 26, 2022, the Company cancelled 370,000 warrants previously issued to a note holder in exchange for the 370,000 common shares valued at $1,213,710. The Company recognized a $4,106,707 gain on extinguishment upon cancellation of the warrants and derivative liabilities associated with the warrants that was partially offset by a loss on extinguishment of $77,960.

  

Conversion of convertible notes and accrued interest to common stock

 

On September 19, 2022, the Company, under the terms of the note, issued 329,670 common shares upon the conversion of $148,870 in notes payable plus $1,250 in transaction fees. Upon conversion and settlement of the derivative liability, the Company recognized a $214,655 gain on extinguishment.

 

On September 20, 2022, the Company, under the terms of the note, issued 250,438 common shares upon the conversion of $100,000 in notes payable. Upon conversion and settlement of the derivative liability, the Company recognized a $100,808 gain on extinguishment.

 

On September 29, 2022, the Company, under the terms of the note, issued 1,355,222 common shares upon the conversion of $388,000 in notes payable. Upon conversion and settlement of the derivative liability, the Company recognized a $341,156 gain on extinguishment.

 

On December 9, 2022, the Company, under the terms of the note, issued 256,410 common shares upon the conversion of $39,744 in notes payable. Upon conversion and settlement of the derivative liability, the Company recognized a $41,435 gain on extinguishment.

 

On December 9, 2022, the Company, under the terms of the note, issued 1,923,077 common shares upon the conversion of $148,077 in notes payable. Upon conversion and settlement of the derivative liability, the Company recognized a $148,254 gain on extinguishment.

 

 

 

 

 18 

 

 

On January 13, 2023, the Company, under the terms of the note, issued 2,600,000 common shares upon the conversion of $130,000 in notes payable. Upon conversion and settlement of the derivative liability, the Company recognized a $155,870 gain on extinguishment.

 

On January 23, 2023, the Company, under the terms of the note, issued 2,666,763 common shares upon the conversion of $133,000 in notes payable. Upon conversion and settlement of the derivative liability, the Company recognized a $162,808 gain on extinguishment.

 

On April 26, 2023 and June 7, 2023, the Company issued 6,340,591 common shares valued at $843,933 upon the conversion of notes payable. Upon conversion of the note and settlement and derivative liability, the Company recognized a $132,142 loss on extinguishment, see Note 6.

 

On May 1, 2023 and June 21, 2023, the Company issued 5,120,200 common shares valued at $250,889, resulting in a loss on extinguishment of $79,212, see Note 6.

 

On June 12, 2023, the Company issued 5,522,303 common shares upon the conversion of $276,115 in notes payable and accrued interest. Upon conversion, the Company recognized a $5,516 loss on extinguishment.

 

Reclassification of derivative liabilities to APIC

 

On May 1, 2023, the Company no longer had derivative liabilities associated with the warrants and their cumulative value of $1,011,451 was reclassified into additional paid in capital on the consolidated statement of stockholders’ deficit.

 

Note 10 – Related Parties

 

Notes Payable and Accrued Interest – Related Parties

 

During the period ended September 30, 2022, the Company entered into the following related party transactions:

 

  · It recognized $125,000 in accrued salary for its Chairman and CEO in addition to the Company amortized $328,388 of previous stock compensation granted to its Chairman and CEO that is being amortized over 82 months;
  · A company with a common director advanced the Company $1,400,000 at 10% on September 1, 2021 for which the Company accrued $130,000 in interest for the year which is included in accounts payable and accrued liabilities. This note is also described in Note 6.
  · The Company paid its CFO $4,500 in fees during the year.

 

During the period ended September 30, 2023, the Company entered into the following related party transactions:

 

  · Issued 8,333,333 shares of common stock at $0.05 per share for $416,667 in accrued salary for its Chairman and CEO and in addition the Company amortized $328,388 of previous stock compensation granted to its Chairman and CEO that is being amortized over 82 months;
  · The Company paid $30,000 in salary to its President and COO.
  · The Company accrued $3,500 in fees payable and issued 2,685,180 shares of common stock at $0.05 per share for $134,259 to its Corporate Secretary for services.
  · The Company accrued $14,000 in fees payable to its CFO.
  · The Company issued 3,663,636 shares of common stock to one of its board members to settle notes payable of $150,000 and accrued interest of $33,182.
  · A company with a common director advanced the Company $1,400,000 at 10% on September 1, 2021 for which the Company accrued $8,574 ($165,000 in 2022) in interest during the nine months ended September 30, 2023 and included in accounts payable and accrued liabilities on the consolidated balance sheet as of September 30, 2023 and December 31, 2022, respectively. This note is also described in Note 6.

 

 

 

 

 19 

 

 

Note 11 – Commitments and Contingencies

 

Legal proceedings

 

On August 6, 2019, Ray Carter, the former CEO prior to the Company’s Bankruptcy, filed a lawsuit against the Company’s subsidiary Stemtech HealthSciences, alleging unpaid salary and vacation time dating to a period predating the Company’s current management team taking control in 2018. Mr. Carter’s claim is in the amount of $267,000. The Company has counter-sued Ray Carter personally and deems this matter non-meritorious. At the same time, the Company has accrued $267,000 which is included in accounts payable and accrued liabilities in the consolidated balance sheets as at September 30, 2023 and December 31, 2022. Mr. Carter’s request for Summary Judgment was dismissed by the Court on March 3, 2023.

 

In the opinion of management, the resolution of these matters, if any, will not have a material adverse impact on the Company’s consolidated financial position or consolidated results of operations.

 

Note 12 – Taxes

 

At September 30, 2023, the Company had net operating loss (“NOL”) carryforwards of approximately $25 million that may be offset against future taxable income. Of the $25 million of net operating losses, U.S. Federal and state net operating losses accounted for $21 million and are subject to limitation under IRC Section 382. The U.S. net operating losses are limited to utilization of 80% of taxable income but do not have an expiration. At September 30, 2023, the Company had $4 million of non-US NOL carryforwards.

 

The Company applied the "more-likely-than-not" recognition threshold to all tax positions taken or expected to be taken in a tax return, which resulted in no unrecognized tax benefits as of September 30, 2023 and December 31, 2022, respectively.

 

Note 13 – Subsequent Events

 

Management of the Company has performed a review of events and transactions occurring after the consolidated balance sheet date to determine if there were any such events or transactions requiring adjustment to or disclosure in the accompanying consolidated financial statements, noting none other than the following:

 

On October 2, 2023, the Company issued 510,000 shares to an investor in exchange for the cancellation of his outstanding warrants.

 

 

 

 

 

 

 

 

 

 

 20 

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

The following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this quarterly report.

 

FORWARD-LOOKING STATEMENTS

 

This quarterly report on Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws and is subject to the safe-harbor created by such Act and laws. Forward-looking statements may include statements regarding our goals, beliefs, strategies, objectives, plans, including product and technology developments, future financial conditions, results or projections or current expectations These forward-looking statements involve known or unknown risks, uncertainties and other factors that may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “potential,” “continue,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” and similar expressions. These statements are based on our current beliefs, expectations, and assumptions and are subject to a number of risks and uncertainties. Although we believe that the expectations reflected-in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our actual results may differ materially from those anticipated in these forward-looking statements. These forward-looking statements are made as of the date of this report, and we assume no obligation to update these forward-looking statements whether as a result of new information, future events, or otherwise, other than as required by law. In light of these assumptions, risks, and uncertainties, the forward-looking events discussed in this report might not occur and actual results and events may vary significantly from those discussed in the forward-looking statements.

 

Implications of Being an Emerging Growth Company

 

Emerging Growth Company - We are an emerging growth company as defined in Section 2(a)(19) of the Securities Act of 1933, as amended, or the Securities Act. We will continue to be an emerging growth company until: (i) the last day of our fiscal year during which we had total annual gross revenues of at least $1.07 billion; (ii) the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act; (iii) the date on which we have, during the previous 3-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which we are deemed to be a large accelerated filer, as defined in Section 12b-2 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30.

 

As an emerging growth company, we are exempt from:

 

  · Sections 14A(a) and (b) of the Exchange Act, which require companies to hold stockholder advisory votes on executive compensation and golden parachute compensation;
  · The requirement to provide, in any registration statement, periodic report or other report to be filed with the Securities and Exchange Commission, or the “Commission” or “SEC”, certain modified executive compensation disclosure under Item 402 of Regulation S-K or selected financial data under Item 301 of Regulation S-K for any period before the earliest audited period presented in our initial registration statement;
  · Compliance with new or revised accounting standards until those standards are applicable to private companies;
  · The requirement under Section 404(b) of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, to provide auditor attestation of our internal controls and procedures; and
  · Any Public Company Accounting Oversight Board, or “PCAOB”, rules regarding mandatory audit firm rotation or an expanded auditor report, and any other PCAOB rules subsequently adopted unless the Commission determines the new rules are necessary for protecting the public.

 

We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the Jumpstart Our Business Startups Act.

 

We are also a smaller reporting company as defined in Rule 12b-2 of the Exchange Act. As a smaller reporting company, we are not required to provide selected financial data pursuant to Item 301 of Regulation S-K, nor are we required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. We are also permitted to provide certain modified executive compensation disclosure under Item 402 of Regulation S-K.

 

 21 

 

 

Company Overview

 

Stemtech Corporation was incorporated under the laws of the State of Nevada, U.S. on September 4, 2009. Our registration statement on Form S-1 was filed with the SEC was declared effective on May 15, 2013. On August 19, 2021, the Company entered into a Merger Agreement with Stemtech Corporation by which the Company acquired one hundred percent of the shares of STEMTECH CORPORATION in exchange for the issuance of 37,060,000 shares of the Company, approximately 85% of the issued and outstanding shares of the Company. On November 19, 2021, the Company adopted an Amendment to its Articles changing the name of the Corporation to Stemtech Corporation in the state of Nevada, and on April 14, 2022, FINRA gave final approval for said name change.

 

Stemtech has pioneered and patented a whole new category of dietary supplements. Stemtech’s advanced Stem Cell Nutrition formulations are one-of-a-kind natural products designed to help support the three most important aspects of stem cell physiology: 1) Releasing more stem cells; 2) their circulation in the blood; and 3) Migration into tissues, where they can perform their daily function of renewal and rejuvenation for optimal health. We actually harness the incredible power of adult stem cells. How does this work? Adult stem cells are released from your bone marrow into the bloodstream, they then Circulate in the bloodstream and flow to the tissues most in need. As they arrive, the adult stem cells migrate into the tissues, reproduce and become new, healthy cells of those tissues. This process takes place every single day, even without tissue damage, as part of the natural renewal system of the body. It is important to understand that Stemtech’s products do not contain stem cells. They are composed of natural botanicals and other ingredients that have been clinically documented to support the performance of your own adult stem cells. Stemtech also offers our all-natural OraStem toothpaste, which is a tooth whitener, breath freshener, anti-microbial, stem cell attracting and promotes good gum health. In December 2022, our new Cellect One™ Rapid Renew Stem Cell Peptide Night Cream. Cellect One is a Stemtech proprietary formula containing an FDA patented ingredient, Red Oak Bark, which enables deep penetration to promote good skin health.

 

While sales of products obviously create the cash flow, our real business model is not just “sales”, but lateral penetration. We do this through our IBPs - “Independent Business Partner” Sales Forces, and we invest much energy in growing our IBPs. Post funding, Stemtech is projecting the addition of 30,000 new independent business partner reps over the next 12 to 24 months, adding to the existing IBPs. With an enhanced compensation plan, IBPs will be even more incentivized to build their network, attracting additional industry leaders. IBPs are a testimonial to our product and business model, lowering our customer acquisition costs.

 

We have reinstituting contests, travel incentives, cruises, other trips, Business Academies (Aguas Calientes, Mexico in May 2023; Las Vegas, U.S. in June, 2023) for Training, regional conferences, our Annual Convention with new product launches. Our IBPs offer highly flexible yet steady income which is most adapted to todays “Laptop & Cellphone Lifestyle”, with structured and organized weekly Corporate training calls, a personalized website, back-office tracking, oversight and management Tools, Reports, Training Materials and Social Sharing. Stemtech also launched the Stemtech AdvanceOffice Mobile App, based on the Verb Technology platform in September 2022, improving communication, sharing of information, training videos and other content for recruiting, on-boarding, customer retention and measuring key performance indicators for the IBP business.

 

Stemtech launched a new marketing program in January 2022, with sales continuing to come in from returning consumers who believe in the quality products. Until September 2021, the Company had operated on an extremely tight budget, with inadequate working capital and difficulties fulfilling orders. Since the cash infusions noted in “Financing” infra, the company now has the resources to contact and re-engage the over 200,000 former distributors. With this new cash infusion, the Company has engaged experienced marketing and social media professionals to initiate new marketing strategies which are expected to bring increased activity. Moreover, we are now better positioned to absorb significant new clientele as the company has directed significant cash towards our inventory, and we now have enough inventory on hand to fulfill over $3 million dollars’ worth of new orders, an inventory level we have not had since going into bankruptcy in 2017. Management conservatively believes that given the cash on hand and working expenditures as describe above, we can reinvigorate sales to be more consistent with the company’s previous revenue historically, as we were recognized 4 times in the Inc 5000 Magazine’s list of fastest growing companies.

 

Below this IBP level, we have our “DTC” (Direct To Consumer) network marketing Distribution model. This integrative model allows us an immediate global presence and ability to operate in multiple countries on any continent. We are uniquely positioned in this post pandemic economy beset by supply chain issues, as this method requires no up-front or required buy-in of inventory, with monthly shipments available for known recurring sales. This platform has us now operating at the intersection of the ecommerce economy, social economy and gig economy.

 

 

 

 

 22 

 

 

The Company has been making great strides the past year, having filed our “Orastem” trademark registration in Mexico as noted in our press release of August 23, 2022. In addition, Stemtech filed our new ‘stemceuticals’ trademark registration. We also have been fortunate to have Dr. Bankole Johnson join our Life Sciences Advisory Board in September, as well as the introduction of a whole new line of stem cell skin care products. Life Factor Research brings their expertise in research, development and product formulations enabling the Company to now organically develop whole new lines of Stemceuticals. This new arrangement enables Stemtech to offer more new, cutting-edge products to an ever-growing market interested in improved health and quality of life.

 

In addition, Stemtech has worked to reduce overhead costs by outsourcing U.S. order fulfillment services to a third-party partner who will also be responsible for inventory planning and production scheduling, beginning August 7, 2023. Further, beginning August 1, 2023, the customer service function for the U.S. was transitioned to our Mexico offices in Guadalajara at a cost savings and improved synergistic benefits by expanding service hours from 8 to 12 hours in the U.S.  Also, U.S. health insurance coverage has ended with the release of employees. With the new inventory process, the cost of insurance coverage will be reduced to lower rates beginning in September.

 

RESULTS OF OPERATIONS

 

Our consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

 

Three-Month Period Ended September 30, 2023 Compared to the Three-Month Period Ended September 30, 2022.

 

During the three months ended September 30, 2023 and 2022, net sales were $1,298,322 and $1,047,030, respectively. This variance is due to an increase in IBPs and management anticipates net sales to increase further as it has recently implemented a price increase, however current economic risks of recession can influence this.

 

During the three months ended September 30, 2023 and 2022, cost of goods sold was $290,896 versus $180,599, for a positive variance of $110,297 or 61%. This variance is in line with the increase in sales during the three months ended September 30, 2023.

 

During the three months ended September 30, 2023 and 2022, our commissions expenses were $386,070 and $306,293, respectively, resulting in an increase of $79,777, or 26%.

 

During the three months ended September 30, 2023 and 2022, our general and administrative expenses were $1,081,224 and $3,822,131, respectively, resulting in a decrease of $2,740,907, or 72%. The decrease is primarily due to stock issued for services in 2022 at a higher stock price than in 2023 and the cutting of operational expenses, such as personnel.

 

During the three months ended September 30, 2023 and 2022, our selling and marketing expenses were $119,123 and $120,434, respectively, resulting in a decrease of $1,311, or 1%.

 

During the three months ended September 30, 2023, total non-operating expenses were $427,573 compared to total non-operating income of $20,768,637 during the three months ended September 30, 2022, resulting in a decrease in income of $21,196,210. The difference is primarily due to $18,229,091 gain from change in fair value of derivative liabilities and a gain on extinguishment of debt of $4,237,648 in 2022.

 

The net loss attributable to Stemtech for the three months ended September 30, 2023 was $1,041,800 compared to net income attributable to Stemtech for the three month period ended September 30, 2022 was $17,416,917. The loss was caused by the factors described above.

 

 

 

 

 

 23 

 

 

Nine-Month Period Ended September 30, 2023 Compared to the Nine-Month Period Ended September 30, 2022.

 

During the nine months ended September 30, 2023 and 2022, net sales were $3,559,789 and $3,479,762, respectively, resulting in an increase of $80,027, or 2%. This variance is due to an increase in IBPs and management anticipates net sales to increase further as it has recently implemented a price increase, however current economic risks of recession can influence this.

 

During the nine months ended September 30, 2023, cost of goods sold was $781,895 versus $836,409, for a negative variance of $54,514 or 7%.

 

During the nine months ended September 30, 2023 and 2022, our commissions expenses were $807,678 and $761,345, respectively, resulting in an increase of $46,333, or 6%. The variance is in line with increased sales during the nine months ended September 30, 2023.

 

During the nine months ended September 30, 2023 and 2022, our selling and marketing expenses were $387,102 and $400,018, respectively, resulting in a decrease of $12,916, or 3%.

 

During the nine months ended September 30, 2023 and 2022, our general and administrative expenses were $4,366,912 and $6,073,133, respectively, resulting in a decrease of $1,706,221, or 28%. The decrease is primarily due to stock issued for services in 2022 at a higher stock price than in 2023 and the cutting of operational expenses, such as personnel.

 

During the nine months ended September 30, 2023 and 2022, our total operating expenses were $5,575,492 and $7,234,496, respectively, resulting in a decrease of $1,659,004, or 23%. The decrease in operating expenses was caused by the factors described above.

 

During the nine months ended September 30, 2023, total non-operating expenses were $770,385 compared to $3,499,953 resulting in a decrease in expenses of $2,729,568. The difference is primarily due to a $4,112,025 loss from change in fair value of derivative liabilities in 2022 to a $1,681,798 gain in 2023, offset by an increase in interest expense of $1,318,600.

 

The net loss attributable to Stemtech for the nine months ended September 30, 2023 and 2022, was $3,565,449 and $8,026,062, respectively. The decrease in net loss was caused by the factors described above.

 

Liquidity and Capital Resources

 

We are not currently profitable, and we cannot provide any assurance of when we will be profitable. We incurred a net loss of $3,565,449 and $8,026,062 for the nine months ended September 30, 2023 and 2022, respectively. During the nine months ended September 30, 2023, we met our short-term liquidity requirements from issuance of debt.

 

As of September 30, 2023, our current assets were $694,732 compared to $612,370 in current assets at December 31, 2022. As of September 30, 2023, our current liabilities were $5,846,149 compared to $7,415,791 at December 31, 2022. Current liabilities at September 30, 2023 were comprised of $2,650,165 of accounts payable and accrued expenses, $1,360,313 in notes payables, $1,392,972 in convertible notes net of discounts and $83,836 in current operating lease liabilities, $82,835 of deferred revenues.

 

Cash Flows from Operating Activities

 

We have not generated positive cash flows from operating activities. For the nine-month period ended September 30, 2023, net cash flows used in operating activities were $904,009 versus $976,150 a year earlier, which is primarily due to the change in working capital accounts. The net loss of $3,567,983, gain on extinguishment of debt of $814,132, loss on settlement of derivative liabilities of $1,059,839 and the gain from the change in fair value of derivative liabilities of $1,681,798 was offset by the interest expense and amortization of debt discount of $1,604,081 and $2,443,506, respectively, as well as $432,049 depreciation and amortization expense and $328,388 of stock compensation expense and $433,951 in stock issued for services.

 

 

 

 

 

 24 

 

 

Cash Flows from Financing Activities

 

We have financed our operations primarily from the issuance of notes payable. For the nine-month period ended September 30, 2023, net cash provided from financing activities of $1,308,616 mainly consisted of proceeds from notes payable of $1,711,000 partially offset by payments on factoring agreements. For the nine-month period ended September 30, 2022, $514,697 cash provided from financing activities mainly consisted of proceeds from notes payable of $341,939 and net proceeds of factoring liability of $239,986 partially offset by payments on factoring agreements.

 

Plan of Operation and Funding

 

We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working

 

Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next three months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory; (ii) developmental expenses associated with a start-up business; (iii) marketing expenses; and (iv) IT website development. We intend to finance these expenses with further issuances of securities and director loans. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

 

Basis of Presentation

 

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial statement presentation and in accordance with Form 10-Q. Accordingly, they do not include all of the information and footnotes required in annual financial statements. In the opinion of management, the unaudited financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position and results of operations and cash flows. The results of operations presented are not necessarily indicative of the results to be expected for any other interim period or for the entire year.

 

Off-Balance Sheet Arrangements

 

As of the date of this report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

 

Stockholders’ Deficit

 

Authorized Shares

 

Effective May 5, 2023, the Company is authorized to issue up to 400,000,000 shares of common stock, $0.001 par value. Prior to May 5, 2023, the Company was authorized to issue up to 200,000,000 shares (see Note 9). Each outstanding share of common stock entitles the holder to one vote per share on all matters submitted to a stockholder vote. All shares of common stock are non-assessable and non-cumulative, with no pre-emptive rights.

 

Commitments and Contingencies

 

None.

 

 

 

 

 25 

 

 

Financing

 

On March 27, 2023, the Company and an institutional investor (the “Holder”) executed an investment agreement for up to $7,000,000 through a convertible promissory note, share purchase agreement and warrant agreement (the “2023 Note"). The 2023 Note has a principal amount of up to $7,000,000 with an original issue discount of 12% and is to be disbursed in four (4) disbursements as set forth as follows: (i) the first disbursement in the amount of $1,000,000 occurred on March 27, 2023; (ii) the second disbursement in the amount of $200,000 is due within three (3) days after the filing of an S-1 registration statement; (iii) the third disbursement in the amount of $500,000 is due forty-five (45) days after effectiveness of an S-1 registration statement; and (iv) $120,000 is due forty-five (45) days after the third disbursement. The 2023 Note carries an interest rate equal to seven percent (7%) per annum and is redeemable by the Company at any time at an amount equal to one hundred twenty-five percent (125%) of the then outstanding principal and interest accrued on the Note. All additional disbursements will be made at the Holder’s discretion, at any time, and if the Holder’s broker refuses to custody the securities issued in connection therewith, the Holder will have no obligation to make a disbursement under the disbursement schedule but will have the option to make such disbursement.

 

Future financing through equity investments is likely to be dilutive to existing stockholders. Also, the terms of securities we may issue in future capital transactions may be more favorable for our new investors. Newly issued securities may include preferences, superior voting rights, and the issuance of warrants or other derivative securities, which may have additional dilutive effects. Further, we may incur substantial costs in pursuing future capital and financing, including investment banking fees, legal fees, accounting fees, and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which will adversely impact our financial condition.

 

Our ability to obtain needed financing may be impaired by such factors as the capital markets, both generally and specifically in the nutraceutical industry, which could impact the availability or cost of future financing. If the amount of capital we are able to raise from financing activities, together with our revenue from operations, is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations accordingly, we may be required to cease operations.

 

We have no plans, arrangements or contingencies in place in the event that we cease operations.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

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

 

Item 4. Controls and Procedures

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2023. Based on that evaluation, our management concluded that our disclosure controls and procedures were effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Such officer also confirmed that there was no change in our internal control over financial reporting during the three-month period ended September 30, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

 

 

 

 

 

 26 

 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

On August 6, 2019, Ray Carter, the former CEO prior to the Company’s Bankruptcy, filed a lawsuit against the Company’s subsidiary Stemtech HealthSciences, alleging unpaid salary and vacation time dating to a period predating the Company’s current management team taking control in 2018. Mr. Carter’s claim is in the amount of $267,000. The Company has counter-sued Ray Carter personally and deems this matter non-meritorious. At the same time, the Company has accrued $267,000 which is included in accounts payable and accrued liabilities in the accompanying consolidated financial statements as at September 30, 2023 and December 31, 2022. Mr. Carter’s request for Summary Judgment was dismissed by the Court on March 3, 2023.

 

In the opinion of management, the resolution of these matters, if any, will not have a material adverse impact on the Company’s consolidated financial position or consolidated results of operations.

 

Item 1A. Risk Factors

 

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

 

Item 2. Recent Sale of Unregistered Securities

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 6. Exhibits

 

Exhibit 31.1*   Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).
Exhibit 31.2*   Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).
Exhibit 32.1**   Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.2**   Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     
101.INS***   Inline XBRL Instance Document
101.SCH***   Inline XBRL Taxonomy Extension Schema Document
101.CAL***   Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF***   Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB***   Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE***   Inline XBRL Taxonomy Extension Presentation Linkbase Document
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

  

* Filed herewith.
** Furnished herewith.
*** 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.

 

 

 27 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  Stemtech Corporation
   
Date: December 1, 2023 By: /s/ Charles S. Arnold
    Charles S. Arnold
  Title:

Chief Executive Officer

(Principal Executive Officer)

     
Date: December 1, 2023 By: /s/ James S. Cardwell
    James S. Cardwell
  Title:

Chief Financial Officer

(Principal Financial Officer)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 28 

 

Exhibit 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

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

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

 

 

I, Charles S. Arnold, certify that:

 

1. I have reviewed this Form 10-Q of STEMTECH CORPORATION;
     
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
     
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
     
4. I am 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 13-a-15(f) and 15d-15(f)) for the registrant and have:
     
  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (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. 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 involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: December 1, 2023 By: /s/ Charles S. Arnold
    Charles S. Arnold
   

Director, Chief Executive Officer

STEMTECH CORPORATION

 

 

 

Exhibit 31.2

 

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

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

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

 

 

I, James S. Cardwell, certify that:

 

1. I have reviewed this Form 10-Q of STEMTECH CORPORATION;
     
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
     
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
     
4. I am 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 13-a-15(f) and 15d-15(f)) for the registrant and have:
     
  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (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. 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 involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: December 1, 2023 By: /s/ James S. Cardwell
    James S. Cardwell
   

Chief Financial Officer

STEMTECH CORPORATION

 

 

Exhibit 32.1

 

CERTIFICATION OF

PRINCIPAL EXECUTIVE OFFICER

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

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

 

In connection with this Quarterly Report of STEMTECH CORPORATION (the “Company”) on Form 10-Q for the quarter ended September 30, 2023, as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, Charles S. Arnold, Director and Chief Executive Officer (Principal Executive Officer) of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

 

1. Such Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, 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 such Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: December 1, 2023 By: /s/ Charles S. Arnold
    Charles S. Arnold
   

Director, Chief Executive Officer

STEMTECH CORPORATION

 

 

 

Exhibit 32.2

 

CERTIFICATION OF

PRINCIPAL FINANCIAL OFFICER

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

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

 

In connection with this Quarterly Report of STEMTECH CORPORATION (the “Company”) on Form 10-Q for the quarter ended September 30, 2023, as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, James S. Cardwell, Chief Financial Officer (Principal Financial Officer) of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

 

1. Such Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, 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 such Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: December 1, 2023 By: /s/ James S. Cardwell
    James S. Cardwell
   

Chief Financial Officer

STEMTECH CORPORATION

 

 

 

 

v3.23.3
Cover - shares
 9 Months Ended
Sep. 30, 2023
Nov. 13, 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 333-172172  
Entity Registrant Name STEMTECH CORPORATION  
Entity Central Index Key 0001511820  
Entity Tax Identification Number 87-2151440  
Entity Incorporation, State or Country Code NV  
Entity Address, Address Line One 4851 Tamiami Trail North, Suite 200  
Entity Address, City or Town Naples  
Entity Address, State or Province FL  
Entity Address, Postal Zip Code 34103  
City Area Code (954)  
Local Phone Number 715-6000  
Title of 12(b) Security Common Stock, par value $0.001  
Trading Symbol STEK  
Entity Current Reporting Status No  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company true  
Elected Not To Use the Extended Transition Period false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   104,476,731
v3.23.3
Consolidated Balance Sheets (Unaudited) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
CURRENT ASSETS:    
Cash $ 323,629 $ 132,487
Accounts receivable, net 102,647 34,767
Inventory, net 84,079 158,053
Prepaid expenses and other current assets 184,377 287,063
TOTAL CURRENT ASSETS 694,732 612,370
Property and equipment, net 15,189 27,296
Intangible assets, net 2,861,183 2,994,000
Long term deposits 23,593 23,065
Operating lease right-of-use assets, net 86,916 142,801
Goodwill 467,409 467,409
TOTAL ASSETS 4,149,022 4,266,941
CURRENT LIABILITIES:    
Accounts payable and accrued expenses 2,650,165 3,396,543
Notes payable 1,360,313 446,246
Convertible debentures, net of discount 1,392,972 482,885
Operating lease liabilities - current 83,836 119,065
Deferred revenues 82,835 39,170
Factoring liability 276,028 214,249
Derivative liability 0 2,717,633
TOTAL CURRENT LIABILITIES 5,846,149 7,415,791
Operating lease liabilities – non-current 0 23,068
TOTAL LIABILITIES 5,846,149 7,438,859
COMMITMENTS AND CONTINGENCIES (Note 11)
STOCKHOLDERS' DEFICIT    
Common stock - $0.001 par value; 400,000,000 and 200,000,000 shares authorized as of September 30, 2023 and December 31, 2022, respectively; 104,476,731 and 53,442,147 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively 104,477 53,442
Additional paid in capital 24,596,604 19,391,400
Accumulated other comprehensive loss (461,225) (247,760)
Accumulated deficit (25,196,690) (21,631,241)
Stemtech Corporation stockholders’ deficit (956,834) (2,434,159)
Non-controlling interest in subsidiaries (740,293) (737,759)
TOTAL STOCKHOLDERS’ DEFICIT (1,697,127) (3,171,918)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 4,149,022 $ 4,266,941
v3.23.3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares
Sep. 30, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Common stock, par value $ 0.001 $ 0.001
Common Stock, shares authorized 400,000,000 200,000,000
Common stock, shares issued 104,476,731 53,442,147
Common stock, shares outstanding 104,476,731 53,442,147
v3.23.3
Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Income Statement [Abstract]        
NET SALES $ 1,298,322 $ 1,047,030 $ 3,559,789 $ 3,479,762
Cost of goods sold 265,162 160,509 719,879 789,566
Freight-in 25,734 20,090 62,016 46,843
TOTAL COST OF GOODS SOLD 290,896 180,599 781,895 836,409
GROSS PROFIT 1,007,426 866,431 2,777,894 2,643,353
OPERATING EXPENSES        
Commissions 386,070 306,293 807,678 761,345
Selling and marketing 119,123 120,434 387,102 400,018
General and administrative 1,081,224 3,822,131 4,366,912 6,073,133
Research and development 0 0 13,800 0
TOTAL OPERATING EXPENSES 1,586,417 4,248,858 5,575,492 7,234,496
LOSS FROM OPERATIONS (578,991) (3,382,427) (2,797,598) (4,591,143)
OTHER INCOME (EXPENSE):        
Other income (expenses), net (1,525) 9,284 (2,626) 7,333
Interest expense (426,048) (1,833,911) (4,323,528) (3,004,928)
Change in fair value of derivative liabilities 0 18,229,091 1,681,798 (4,112,025)
Gain on extinguishment of debt 0 4,237,648 814,132 3,358,842
Gain on settlement of derivative liabilities 0 0 1,059,839 0
Gain on forgiveness of PPP Loan 0 126,525 0 250,825
TOTAL OTHER INCOME (EXPENSE), NET (427,573) 20,768,637 (770,385) (3,499,953)
INCOME (LOSS) BEFORE INCOME TAXES (1,006,564) 17,386,210 (3,567,983) (8,091,096)
PROVISION (BENEFIT) FOR INCOME TAXES (33,529) 0 0 0
NET INCOME (LOSS) (1,040,093) 17,386,210 (3,567,983) (8,091,096)
NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS 1,707 (30,707) (2,534) (65,034)
NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ (1,041,800) $ 17,416,917 $ (3,565,449) $ (8,026,062)
Net income (loss) per common share        
Basic $ (0.01) $ 0.38 $ (0.05) $ (0.18)
Diluted $ (0.01) $ 0.38 $ (0.05) $ (0.18)
Shares used to compute income (loss) per share        
Basic 100,572,563 45,588,294 76,221,547 44,983,240
Diluted 100,572,563 45,588,294 76,221,547 44,983,240
Comprehensive income (loss)        
Net income (loss) $ (1,041,800) $ 17,416,917 $ (3,565,449) $ (8,026,062)
Change in foreign currency translation adjustments (223,557) (406,374) (213,465) (243,667)
Comprehensive income (loss) available to common stockholders $ (1,265,357) $ 17,010,543 $ (3,778,914) $ (8,269,729)
v3.23.3
Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
AOCI Attributable to Parent [Member]
Sub Total [Member]
Noncontrolling Interest [Member]
Total
Beginning balance, value at Dec. 31, 2021 $ 44,685 $ 10,116,296 $ (13,086,318) $ (430,255) $ (3,355,592) $ (649,854) $ (4,005,446)
Beginning balance, shares at Dec. 31, 2021 44,685,673            
Stock based compensation 328,388 328,388 328,388
Stock issued for services $ 986 2,835,125 2,836,111 2,836,111
Stock issued for services, shares 984,344            
Conversion of convertible notes and accrued interest to common stock $ 1,935 636,065 638,000 638,000
Conversion of convertible notes and accrued interest to common stock , shares 1,935,330            
Stock issued for loan extension $ 946 3,620,828 3,621,774 3,621,774
Beginning balance, shares 945,512            
Stock issued as debt issuance cost $ 74 199,926 200,000 200,000
Beginning balance, shares 74,488            
Foreign currency translation adjustment (243,667) (243,667) (243,667)
Loss attributable to non-controlling interests (65,034) (65,034)
Net loss (8,026,062) (8,026,062) (8,026,062)
Ending balance, value at Sep. 30, 2022 $ 48,626 17,736,628 (21,112,380) (673,922) (4,001,048) (714,888) (4,715,936)
Ending balance, shares at Sep. 30, 2022 48,625,347            
Beginning balance, value at Jun. 30, 2022 $ 44,795 10,663,909 (38,529,297) (267,548) (28,088,141) (684,181) (28,772,322)
Beginning balance, shares at Jun. 30, 2022 44,795,673            
Stock based compensation 110,665 110,665 110,665
Stock issued for services $ 976 2,805,135 2,806,111 2,806,111
Stock issued for services, shares 974,344            
Conversion of convertible notes and accrued interest to common stock $ 1,935 636,065 638,000 638,000
Conversion of convertible notes and accrued interest to common stock , shares 1,935,330            
Stock issued for loan extension $ 846 3,320,928 3,321,774 3,321,774
Beginning balance, shares 845,512            
Stock issued as debt issuance cost $ 74 199,926 200,000 200,000
Beginning balance, shares 74,488            
Foreign currency translation adjustment (406,374) (406,374) (406,374)
Loss attributable to non-controlling interests (30,707) (30,707)
Net loss 17,416,917 17,416,917 17,416,917
Ending balance, value at Sep. 30, 2022 $ 48,626 17,736,628 (21,112,380) (673,922) (4,001,048) (714,888) (4,715,936)
Ending balance, shares at Sep. 30, 2022 48,625,347            
Beginning balance, value at Dec. 31, 2022 $ 53,442 19,391,400 (21,631,241) (247,760) (2,434,159) (737,759) (3,171,918)
Beginning balance, shares at Dec. 31, 2022 53,442,147            
Stock based compensation 328,388 328,388 328,388
Stock issued for services $ 6,113 427,838 433,951 433,951
Stock issued for services, shares 6,113,078            
Conversion of convertible notes and accrued interest to common stock $ 30,372 2,373,081 2,403,453 2,403,453
Conversion of convertible notes and accrued interest to common stock , shares 30,371,836            
Settlement of accrued liabilities for common stock $ 12,150 794,926 807,076 807,076
Settlement of accrued liabilities for common stock , shares 12,149,670            
Stock issued for LFR Acquisition $ 2,400 269,520 271,920 271,920
Stock issued for LFR Acquisition , shares 2,400,000            
Reclassification of derivative liabilities to APIC 1,011,451 1,011,451 1,011,451
Foreign currency translation adjustment (213,465) (213,465) (213,465)
Loss attributable to non-controlling interests (2,534) (2,534)
Net loss (3,565,449) (3,565,449) (3,565,449)
Ending balance, value at Sep. 30, 2023 $ 104,477 24,596,604 (25,196,690) (461,225) (956,834) (740,293) (1,697,127)
Ending balance, shares at Sep. 30, 2023 104,476,731            
Beginning balance, value at Jun. 30, 2023 $ 96,319 23,728,202 (24,154,890) (237,668) (568,037) (742,000) (1,310,037)
Beginning balance, shares at Jun. 30, 2023 96,317,252            
Stock based compensation 110,665 110,665 110,665
Stock issued for services $ 38 1,800 1,838 1,838
Stock issued for services, shares 37,500            
Conversion of convertible notes and accrued interest to common stock $ 8,120 755,937 764,057 764,057
Conversion of convertible notes and accrued interest to common stock , shares 8,121,979            
Settlement of accrued liabilities for common stock
Foreign currency translation adjustment (223,557) (223,557) (223,557)
Loss attributable to non-controlling interests 1,707 1,707
Net loss (1,041,800) (1,041,800) (1,041,800)
Ending balance, value at Sep. 30, 2023 $ 104,477 $ 24,596,604 $ (25,196,690) $ (461,225) $ (956,834) $ (740,293) $ (1,697,127)
Ending balance, shares at Sep. 30, 2023 104,476,731            
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 loss $ (3,567,983) $ (8,091,096)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 432,049 330,169
Amortization of right of use asset 55,885 46,388
Stock compensation expense 328,388 328,388
Stock issued for services 433,951 2,836,111
Amortization of debt discount 2,443,506 2,400,670
Change in fair value of derivative liabilities (1,681,798) 4,112,025
Non-cash interest expense from issuance on debt (derivative) 1,604,081 0
Gain on settlement of derivative liabilities (1,059,839) 0
Gain on forgiveness of PPP Loan 0 (250,825)
Gain on extinguishment of debt (814,132) (3,358,842)
Changes in operating assets and liabilities, net of effect of acquisitions:    
Accounts receivable (67,880) (29,034)
Inventory 73,974 254,608
Prepaid expenses and other current assets 102,686 69,652
Accounts payable and accrued expenses 828,263 406,600
Long term deposits (528) 10,276
Operating lease liabilities (58,297) (41,240)
Deferred revenues 43,665 0
Net cash used in operating activities (904,009) (976,150)
Proceeds from notes payable 1,711,000 341,939
Repayment of note payable (403,293) (67,228)
Net proceeds from financing arrangement 909 239,986
Net cash provided by financing activities 1,308,616 514,697
Effects of currency translation on cash (213,465) (243,667)
Net increase (decrease) in cash 191,142 (705,120)
Cash, beginning of period 132,487 828,206
Cash, end of period 323,629 123,086
Supplemental Disclosure of Cash Flow Information    
Cash paid for interest 46,243 0
Cash paid for income taxes 0 0
Supplemental noncash transactions    
Stock issued for LFR Acquisition 271,920 0
Issuance of common stock for conversion of debt 2,403,453 0
Settlement of accrued liabilities for common stock 807,076 0
Reclassification of derivative liabilities to APIC 1,011,451 0
Recognition of right of use asset - operating lease $ 0 $ 53,463
v3.23.3
Organization and Basis of Presentation
 9 Months Ended
Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Basis of Presentation

Note 1 – Organization and Basis of Presentation

 

Stemtech Corporation and its Subsidiaries (collectively, the “Company”) was incorporated in the State of Nevada, USA on September 4, 2009 under the previous name Globe Net Wireless Corp. On November 19, 2021, the Company adopted an Amendment to its Articles changing the name of the Corporation to Stemtech Corporation in the state of Nevada, and on April 14, 2022, FINRA gave final approval for said name change, as evidenced by the 8-K filed that date. Stemtech is a global network marketing company that develops science-based products that it believes supports wellness by helping the body maintain healthy stem cell physiology, also known as stem cell enhancers. Known as the Stem Cell Nutrition Company®, the Company is a pioneer in stem cell science, and believes it can demonstrate that adult stem cells function as the natural renewal system of the body. The Company believes our products enhance and support the work of the body’s stem cells by releasing more stem cells, helping to circulate them in the blood and migrate them into tissues, where they can perform their daily function of renewal for optimal health. Our mission is to enhance wellness and prosperity around the world. These products are marketed internationally by the Company’s subsidiaries and through independent distributors. The Company markets its products under the following brands: RCM System, stemrelease3™, Stemflo® MigraStem™, OraStem® (Oral Health Care), D-Fuze™ (Electromagnetic Frequency Blocker), Cellect One™ Rapid Renew Stem Cell Peptide Night Cream.

 

On August 19, 2021, Stemtech Corporation (“Stemtech”), a Delaware corporation, entered into a Merger Agreement (the “Merger Agreement”) with Globe Net Wireless Corp. (“Globe Net” or “GNTW”). The merger was accounted for as a reverse acquisition and recapitalization in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations. Management evaluated the guidance contained in ASC 805 with respect to the identification of the acquirer in the merger and concluded, based on a consideration of the pertinent facts and circumstances, that Stemtech acquired Globe Net for financial accounting purposes. On November 9, 2021, the Company changed its fiscal year end from a fiscal year end of August 31 to a calendar year end of December 31.

 

The consolidated financial statements include the accounts of Stemtech (Parent) and its ten (10) subsidiaries:

 

1) Stemtech HealthSciences Corp (U.S.A.) (“Stemtech HealthSciences”) – 100%
2) Stemtech Canada, Inc. (“Canada”) – 100%
3) Stemtech Health Sciences S. de R.L. de C.V. (“Mexico”) – 100%
4) Stemtech Services SARL de C.V. (Mexico) (“Stemtech Mexico”) – 100%
5) Stemtech Malaysia Holdings Sdn. Bhd. (“Malaysia Holdings”) – 100%
6) Stemtech Malaysia Sdn. Bhd. (“Malaysia”) – 70%
7) Stemtech Taiwan Holding, Inc. (“Taiwan”) – 100%
8) Tecrecel S.A. (“Ecuador”) – 100%
9) Food & Health Tech Foodhealth SA (“Ecuador FHTFH”) – 100%
10) Life Factor Research (“LFR”) – 100%

 
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 accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2022, filed April 17, 2023. In the opinion of management, all adjustments (consisting of normal recurring adjustments unless otherwise indicated) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2023, are not necessarily indicative of the results that may be expected for the year as a whole. All intercompany accounts and transactions have been eliminated in consolidation.

 

Going Concern

 

The accompanying consolidated financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and classification of liabilities and commitments in the normal course of business. The accompanying consolidated financial statements do not reflect any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might result if the Company is unable to continue as a going concern.

 

The Company has experienced recurring net losses and negative cash flows from operations since inception and has an accumulated deficit of approximately $25.2 million and a working capital deficiency of approximately $5.2 million at September 30, 2023. The Company has funded its activities to date almost exclusively from debt and equity financing. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company will continue to require substantial funds to implement its new investment acquisition plans. Management’s plans in order to meet its operating cash flow requirements include financing activities such as private placements of its common stock, preferred stock offerings, and issuances of debt and convertible debt instruments.

 

The Company’s ability to continue as a going concern for the next twelve months from the issuance of these financial statements depends on its ability to execute its business plan, increase revenue, and reduce expenses. Such conditions raise substantial doubt about the Company’s ability to continue as a going concern.

 

Use of Estimates

 

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash

 

The Company considers all highly liquid temporary investments purchased with original maturities of three months or less at the date of purchase to be cash equivalents. The Company has no cash equivalents as of September 30, 2023 and December 31, 2022. The Company maintains certain cash balances at several institutions located outside the United States. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk.

 

Inventory

 

Inventory is comprised of finished goods and raw materials and is valued at the lower of cost or market, using the “first-in, first-out” method in determining cost. Management evaluates the allowance for inventory obsolescence on a regular basis and has determined that no allowance for slow moving or obsolete inventory is necessary as at September 30, 2023 and December 31, 2022.

 

Impairment of Long-Lived Assets

 

The Company assesses, on an annual basis, the recoverability of the carrying amount of intangible assets and long-lived assets used in continuing operations. A loss is recognized when expected future cash flows (undiscounted and without interest) are less than the carrying amount of the asset. The impairment loss is determined as the difference by which the carrying amount of the asset exceeds its fair value. The Company evaluated its long-lived assets for any indications of impairment. The Company concluded that there was no impairment, however there can be no assurance that market conditions will not change or demand for the Company’s products will continue which could result in impairment of long-lived assets in the future.

 

Revenue Recognition

 

It is the Company’s policy that revenues from product sales is recognized in accordance with ASC 606 “Revenues from Contracts with Customers.” Five basic steps must be followed before revenue can be recognized; (1) Identifying the contract(s) with a customer that creates enforceable rights and obligations; (2) Identifying the performance obligations in the contract, such as promising to transfer goods or services to a customer; (3) Determining the transaction price, meaning the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer; (4) Allocating the transaction price to the performance obligations in the contract, which requires the Company to allocate the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or services promised in the contract; and (5) Recognizing revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service to a customer. The amount of revenue recognized is the amount allocated to the satisfied performance obligation.

 

Revenues from direct retail sales to consumers and revenues from independent distributors occur when title and risk of loss had passed, which generally occurs at the time the products are shipped. Revenues are recorded net of estimated sales returns and allowances.

 

Allowances for product returns are provided at the time the sale is recorded. This liability is based upon historic return rates and the relevant return pattern, which reflects anticipated returns to be received over a period of up to one year following the original sale. As at September 30, 2023, the Company had a reserve for sales returns of approximately $6,800 (December 31, 2022 - $7,000), which is included in accrued liabilities in the accompanying consolidated balance sheets.

 

Comprehensive Income (Loss)

 

The other comprehensive income (loss) in the accompanying consolidated financial statements relates to the net income (loss) of the Company for the respective period as well as unrealized foreign currency translation adjustments.

 

Foreign Currency Translation

 

A portion of the Company’s business operations occur outside the United States. The local currency of each of the Company’s subsidiaries is generally its functional currency. All assets and liabilities are translated into U.S. Dollars at exchange rates existing at the balance sheet dates, revenue and expenses are translated at weighted-average exchange rates and stockholders’ deficit is recorded at historical exchange rates. The resulting foreign currency translation adjustments are recorded as a separate component of stockholders’ deficit in the consolidated balance sheets and as a component of comprehensive income (loss) . Transaction gains and losses are included in other income (expense), net in the consolidated statements of operations and comprehensive income (loss).

 

Net Income (Loss) per Common Share, basic

 

Basic net income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period.

  

For the nine months ended September 30, 2023 and 2022, the dilutive effect of 14,448,206 and 3,836,000, respectively, of common stock warrants have not been included in the average shares outstanding for the calculation of net income (loss) per share as the effect would be anti-dilutive as a result of our net income (loss) in these periods.

 

Fair Value Measurements

 

As defined in ASC 820 “Fair Value Measurements,” fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

 

The Company determines the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company performs an analysis of the assets and liabilities at each reporting period end.

 

The Company’s financial instruments consist of cash, accounts receivable, accounts payable, accrued interest, notes payable and, convertible debentures. The carrying amounts of these financial instruments are of approximate fair value due to either length of maturity or interest rates that approximate prevailing rates unless otherwise disclosed in these financial statements. The Company’s derivative liabilities are valued using option pricing models with Level 3 inputs.

 

Sequencing

 

Based upon ASC 840-15-25, the Company has adopted a sequencing approach regarding the application of ASC 815-40 to its outstanding convertible notes and warrants. Pursuant to the sequencing approach, the Company evaluates its contracts based upon the earliest issuance date.

 
v3.23.3
Inventory
 9 Months Ended
Sep. 30, 2023
Inventory Disclosure [Abstract]  
Inventory

Note 3 – Inventory

 

Inventory consists of the following components:

        
   September 30,   December 31, 
   2023   2022 
Finished goods  $84,079   $103,297 
Raw materials   –    54,756 
Total Inventory  $84,079   $158,053 

 
v3.23.3
Intangible Assets
 9 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets

Note 4 – Intangible Assets

 

On May 7, 2018, Stemtech Corporation purchased the assets of Stemtech International, Inc. (the “Former Parent Company”), out of a Chapter 7 Bankruptcy for $400,000 and assumed a $4,000,000 note from RBCD Holdings Inc (formerly RBCD Holdings LLC) (“RBCD Holdings”), a related party owned by the Company’s Directors, purchased an outstanding note at its face value of $4,000,000 from the Opus Bank (the “Opus Note”) and subsequently converted in 2019 into 2,000,000 shares of the Company’s common stock of which 250,000 shares of the Company’s stock was allocated to Charles Arnold, an officer and director.

 

Pursuant to a bankruptcy decree, the Company paid $400,000 in cash and assumed a note payable in the amount of $4,000,000 representing 100% percent of the issued and outstanding capital stock of Stemtech Canada, Inc. (Canada), Stemtech Health Sciences S. de R.L. de C.V. (Mexico), Stemtech Services SARL de C.V. (Mexico) (“Stemtech Mexico”), Ste, Stemtech New Zealand, Ltd. (“Stemtech New Zealand”), Stemtech Taiwan Holding, Inc. (U.S.A.), PT Stemtech Indonesia (Indonesia Pty Ltd.), Stemtech Korea (Korea) and Tecrecel S.A. (Ecuador); and Stemtech Malaysia Holdings S/B (Malaysian Parent) that owns two-thirds of its subsidiary Stemtech Malaysia Holding Sdn. Bhd. (Malaysia).

 

Fair Value of the Acquired Assets

 

The Company accounted for the acquisitions as business combinations using the acquisition method of accounting as prescribed in ASC Topic 805 Business Combinations (“ASC 805”) and ASC Topic 820 – Fair Value Measurements and Disclosures (“ASC 820”). In accordance with ASC 805 and ASC 820, the Company assigned fair value to the tangible assets acquired, identifiable intangible assets and liabilities assumed as of the acquisition dates. Goodwill as of the acquisition date is measured as the excess of purchase consideration over the fair value of tangible and identifiable intangible assets acquired and liabilities assumed.

 

The excess purchase price has been recorded as goodwill in the amount of $467,409 at September 30, 2023 and December 31, 2022. The estimated useful life of the identifiable intangible assets is six to fourteen years. The goodwill is amortizable for tax purposes.

 

Fair Value of the LFR Acquisition

 

In March 2023, the Company acquired 100% of LFR, a research and development company with expertise in the formulation of products. The Company accounted for this transaction under the asset acquisition method of accounting as prescribed in ASC Topic 805 Business Combinations (“ASC 805”) and ASC Topic 820 – Fair Value Measurements and Disclosures (“ASC 820”). In accordance with ASC 805 and ASC 820, the Company assigned fair value to the tangible assets acquired, identifiable intangible assets and liabilities assumed as of the acquisition dates.

 

The consideration paid for 100% of LFR was 2.4 million shares of the Company with a fair value of $271,920. At the time of purchase, LFR’s liabilities exceeded its assets by $15,205, and the difference between the net tangible assets and the purchase price, being $287,125, was allocated to a non-compete agreement and will be amortized over 18 months.

 

The components of all acquired intangible assets were as follows at September 30, 2023 and December 31, 2022:

            
   September 30, 2023   December 31, 2022  

Average

Estimated Life

(Years)

 
Patent products  $2,344,900   $2,344,900    14 
Trade names and trademarks   1,106,000    1,106,000    Indefinite 
Customer/distribution list   1,461,300    1,461,300    6 
Non-compete agreement   287,125    –    18 months 
Accumulated amortization   (2,338,142)   (1,918,200)     
Total  $2,861,183   $2,994,000      

 

Intellectual Property

 

The Company has five current patents filed international, and as our research and development progress, plan on filing more patents as we progress. Our current patent portfolio includes:

 

·Patent US 9, 289, 375 – Skin Care Composition Containing Combinations of Natural Ingredients
·Patent AU 201127647 – Methods and Composition for Enhancing Stem Cell Mobilization
·Patent MX 344304 – Metodos y Composiciones para Mejorar las Celulas Madre
·Patent US 10,159,705 – Methods and Composition for Enhancing Stem Cell Mobilization
·Patent MX 358857 – Composiciones para el Cuidado de la Piel que Contienen Combinaciones de Ingredientes Naturales
·Patent MX 358857 (part 1 of 3) - Composiciones para el Cuidado de la Piel que Contienen Combinaciones de Ingredientes Naturales
·Patent MX 358857 (part 2 of 3) - Composiciones para el Cuidado de la Piel que Contienen Combinaciones de Ingredientes Naturales
·Patent MX358857 (part 3 of 3) - Composiciones para el Cuidado de la Piel que Contienen Combinaciones de Ingredientes Naturales

  
v3.23.3
Operating Lease Commitments
 9 Months Ended
Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
Operating Lease Commitments

Note 5 – Operating Lease Commitments

 

On August 16, 2021, the Company extended its office space lease with Sunbeam Properties Inc. to rent approximately 5,000 square feet of space in Miramar, Florida. The Company pays $8,900 per month in rent until the end of the extended lease September 30, 2024. The Company, incurred lease expense for its operating leases of $19,963 and $61,156 for each of the three and nine month periods ended September 30, 2023, respectively and Company’s weighted-average remaining lease term relating to its operating leases is 0.95 years, with a weighted-average discount rate of 10%.

 

In June 2022, the Company entered into a lease for office space in Mexico which terminates on May 31, 2024.

 

The following table presents information about the amount and timing of liabilities arising from the Company’s operating leases as of September 30, 2023:

    
Maturity of operating lease liabilities for the following periods:    
October 1, 2023 to December 31, 2023  $23,810 
January 1, 2024 to September 30, 2024   64,935 
Total undiscounted operating lease payments   88,745 
Less: imputed interest   4,909 
Present value of operating lease liabilities  $83,836 

 

The Company’s operating leases do not provide an implicit rate that can readily be determined. Therefore, the Company uses a discount rate based on its incremental borrowing rate, which is determined using the average of borrowing rates explicitly stated in the Company’s convertible debt.

 
v3.23.3
Notes Payable
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
Notes Payable

Note 6 – Notes Payable

 

Schedule of notes payable as of:

        
   September 30,
2023		   December 31,
2022		 
Secured Royalty Participation Agreements (1)  $–   $150,000 
Vehicle and equipment loans (2)   –    11,246 
Notes payable (3)   1,360,313    285,000 
Convertible debentures, net of discount (4)   1,392,972    482,885 
Total notes payable, net of discount of $661,657 and $1,823,265 as of September 30, 2023 and December 31, 2022, respectively  $2,753,285   $929,131 

 

(1) During June 2018, the Company entered into two (2) Secured Royalty Participation Agreements with Profile Solutions, Inc. (“PSI”) in exchange for working capital loans totaling $150,000. The loan amounts were due in June of 2019, plus an IRR of 18%. In consideration of these loan obligations, The Company agreed to pay a monthly royalty for one year being the greater of: x) 10% of the loan amount or y) 1.5% of the monthly gross revenues. PSI claims that these loans are in default, but the Company contends the loans reflected the terms of these agreements were usurious and contends that the loans are not legally enforceable obligations. This case was dismissed by the Court March 16, 2023 leaving a gain on extinguishment of $150,000.
   
(2) In 2019, Malaysia borrowed $27,295 to purchase a car and as of September 30, 2023, the note was paid in full. As of December 31, 2022, there was a balance of $11,246.

  

(3)

In 2019, the Company engaged in agreements involving promissory notes with three lenders, collectively amounting to a principal balance of $375,000. These notes, bearing effective interest rates of 10%, mature within a one-year timeframe. Additionally, the Company allotted 45,000 shares of common stock, cumulatively valued, as a commitment incentive, resulting in an associated debt discount of $22,500. In the subsequent year, 2020, the Company further entered into promissory note arrangements with four lenders, culminating in an aggregate principal balance of $225,000. The effective interest rates for these notes range between 8% and 10% annually. As of December 31, 2022, the outstanding balance for the notes from both the 2019 and 2020 issuances amounted to $275,000, accompanied by accrued interest totaling $50,819.

 

On October 20, 2021, the Company issued a pair of promissory notes to investors, totaling $10,000. These notes were duly settled in their entirety on January 18, 2023 and April 3, 2023, respectively. Subsequently, on June 12, 2023, a conversion of principal took place, with $275,000 being converted at a rate of $0.05 per share, resulting in the issuance of 6,777,121 common shares.

 
On May 1, 2023, the Company amended its convertible promissory note with Sharing Services Global Corporation (“SHRG”), wherein SHRG capitalized $222,556 of accrued interest and waive its conversion rights as per the original agreement, see below. The promissory note is no longer convertible and is included in the chart above with plain notes payable.

 

On July 21, 2023, the Company issued a promissory note with an investor for $150,000, net of original issue discount of $22,600. The note matures in eleven months and accrues interest at 13% per annum. The first nine payments will be in installments of $20,241 and the final 2 payments will be $7,000 each. As of September 30, the Company made $40,482 of payments leaving a principal balance of $132,118 and $3,862 of accrued interest.

 

As of September 30, 2023, and December 31, 2022, the outstanding balance for these notes stood at $1,413,301 and $285,000, respectively.

 

(4)

During the fiscal year concluding on December 31, 2021, the Company issued a cumulative total of $2,423,738 in convertible promissory notes to investors. These notes featured varying maturity dates spanning from nine months to three years, coupled with interest rates ranging from 8% to 12% per annum. In addition, the Company distributed 154,173 shares of common stock and granted warrants allowing the purchase of 2,400,000 common stock shares at exercise prices spanning between $2.685 and $3.00 per share. The recorded value of both the common stock and warrants was attributed as a discount to the notes, valued at fair market value.

 

In the second quarter of 2022, one of the notes held by investor MCUS LLC (“MCUS”) was extended by 60 days, until August 1, 2022. As part of the extension agreement, the Company issued 100,000 shares of common stock to the noteholder. Moreover, the conversion price of the note was reduced to the lower of (i) 50% of the lowest volume weighted average prices for common stock over the 30 trading days leading up to the conversion notice date and (ii) the Closing Price on the Closing Date, capped at $2.25. On August 18, 2022, this note was extended to September 30, 2022, in exchange for 200,000 shares of common stock and in the fourth quarter of 2022, this note was once again extended, this time until May 31, 2023.

 

On July 13, 2022, another note held by investor Leonite Fund 1, LP (”Leonite”), was extended to September 1, 2022, in exchange for 183,780 warrants, 75,512 common stock shares, and an increased principal amount of $70,833. On September 8, 2022, the same note was further extended to May 26, 2023, accompanied by a rise in the interest rate from 10% to 18% per annum. The amendment of this note resulted in a recognized loss on extinguishment amounting to $252,429.

 

Throughout the third and fourth quarters of 2022, the Company issued a collective sum of $400,000 in convertible notes payable, net of discount, in several installments to MCUS and Leonite. These notes accrued interest varying from 10% to prime plus 8% per annum and possessed maturity dates nine months from their issuance. Additionally, the lenders received 95,115 warrants with an exercise price equivalent to the lower of $2.685 or 65% of the lowest traded price over the preceding 30 days, and 81,760 warrants with an exercise price equal to the lower of $2.685 or 50% of the Volume Weighted Average Price (VWAP) over the preceding 30 days. All the warrants issued were set to expire five years after their issuance date.

 

During the year ended December 31, 2022, a sum of $798,526 in principal and $25,473 in accrued interest was converted into 4,114,816 common shares. As a result, a balance of $482,885, net of discount and accrued interest of $381,259 remained outstanding as of December 31, 2022.

 

In January 2023, the Company issued 5,266,763 upon the conversion of $263,000 in notes payable. Upon conversion and settlement of the derivative liability, the Company recognized a $318,678 gain on extinguishment.

 

  On February 28, 2023, the Company entered into a comprehensive settlement and exchange agreement concerning a Senior Secured Convertible Promissory Note with Leonite. Under this agreement, Leonite agreed to settle its outstanding liability and cancel its warrants in exchange for 10,648,152 common stock shares of the Company to purchase common stock at $0.05 per share. As the debt was settled, the Company recognized a loss on extinguishment worth $132,142 and owed $637,684 worth of common shares. In the second quarter of 2023, the Company issued 6,340,591 common shares, leaving a payable balance of 4,307,561 shares of common stock valued at $573,336, which is included in accounts payable and accrued expenses on the consolidated balance sheet as of June 30, 2023. On September 21, 2023, the Company issued the remaining 4,307,561 shares of common stock.
   
  On March 27, 2023, the Company executed an investment agreement with an institutional investor (“Holder”) for up to $7,000,000 through a convertible promissory note, share purchase agreement, and warrant agreement (the "2023 Note"). The 2023 Note, with a principal amount reaching up to $7,000,000, carried an original issue discount of 12% and was structured to be disbursed in four installments. These installments included a first disbursement of $1,000,000 on March 27, 2023, a second disbursement of $200,000 within three days after filing an S-1 registration statement, a third disbursement of $500,000 forty-five days after the effectiveness of the S-1 registration statement, and a fourth disbursement of $120,000 forty-five days after the third disbursement. The S-1 Registration Statement was filed on May 9, 2023. The 2023 Note bore an interest rate of seven percent (7%) per annum and could be redeemed by the Company at any time for an amount equivalent to one hundred twenty-five percent (125%) of the outstanding principal and interest on the Note. Additional disbursements were discretionary on the Holder's part and could be executed at any time. Should the Holder's broker decline custody of the issued securities, the Holder would have no obligation to adhere to the disbursement schedule, yet the option to make such disbursement would remain.

 

   
  On April 11, 2023, the Company amended its Promissory Note with MCUS, resulting in the conversion price being fixed at $0.05. Since the Promissory Note is not significantly different after the amendment, the note was treated using modification accounting. After eliminating the bifurcated derivative liability, the company recorded a gain of $171,362 on settlement of derivative liabilities. On May 1, 2023, the Company partially settled its debt with MCUS by agreeing to issue 7,739,938 shares of common stock, of which 5,121,200 were issued, resulting in a loss on extinguishment of $79,212. The Company retains an obligation towards MCUS, entailing the issuance of 2,618,738 shares of common stock valued at $130,987, which is included in accounts payable and accrued expenses as of June 30, 2023. On August 11, 2023, the Company issued the remaining 2,559,600 shares of common stock.
   
  Similarly, on May 1, 2023, the Company amended its convertible promissory note with SHRG, wherein SHRG capitalized $222,556 of accrued interest and waive its conversion rights as per the original agreement. However, this amendment was contingent upon the Company making a payment of $222,556 to SHRG, which was duly fulfilled in May 2023. This amendment was treated using extinguishment accounting which eliminated the bifurcated derivative liability and added additional debt discount resulted in a recorded gain of $557,793 on extinguishment.
   
  As of September 30, 2023, the outstanding gross principal balance for the two convertible notes was $227,777 and $1,773,864, and the remaining unamortized debt discount for each note was $0 and $608,669, respectively.
   
  As of December 31, 2022, the outstanding gross principal balance for the three convertible notes was $1,400,000, $267,082, and $639,068, and the remaining unamortized debt discount for each note was $1,259,825, $183,391, and $380,049, respectively.
   
  The aggregate balance of convertible notes payable, net of discount, as of September 30, 2023 and December 31, 2022 was $1,392,972 and $482,885, respectively.

 
v3.23.3
Derivative Liabilities
 9 Months Ended
Sep. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Liabilities

Note 7 – Derivative Liabilities

 

The Company issued debt instruments that consist of the issuance of convertible notes with variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock, which gives rise to a derivative liability which is a non-cash liability. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Pursuant to ASC Subtopic 815-15 Embedded Derivatives (“ASC 815-15”), the fair values of the variable conversion options and warrants and shares to be issued were recorded as derivative liabilities on the issuance date and revalued at each reporting period. Based upon ASC 840-15-25, the Company has adopted a sequencing approach regarding the application of ASC 815-40 to its outstanding convertible notes and warrants. Pursuant to the sequencing approach, the Company evaluates its contracts based upon the earliest issuance date.

 

Schedule of Derivative Liabilities

            
   Derivative Liability - Convertible Notes   Derivative Liability - Warrants   Total 
Balance as of January 1, 2022  $1,252,397   $2,972,188   $4,224,585 
Change due to issuances   3,401,528    1,964,761    5,366,289 
Change due to redemptions   (2,850,311)   (7,246,201)   (10,096,512)
Change in fair value   840,180    2,383,091    3,223,271 
Balance as of December 31, 2022   2,643,794    73,839    2,717,633 
Change due to issuances   1,279,735    1,233,201    2,512,936 
Change due to redemptions   (2,533,464)   (1,015,307)   (3,548,771)
Change in fair value   (1,390,065)   (291,733)   (1,681,798)
Balance as of September 30, 2023  $–   $–   $– 

 

 

The Company used a Monte Carlo model to estimate the fair value of its derivatives. A summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the fair value of derivative liabilities during the following periods:

               
      September 30, 2023       December 31, 2022  
Stock price     N/A       $0.09 - $10.85  
Contractual term (in years)     N/A       0.00 - 5.00  
Volatility (annual)     N/A       47.4% - 236%  
Risk-free rate     N/A       0.19% - 4.38%  

 
v3.23.3
Financing Arrangement
 9 Months Ended
Sep. 30, 2023
Financing Arrangement  
Financing Arrangement

Note 8 – Financing Arrangement

 

During the year ended December 31, 2022, the Company entered into five non-recourse agreements for the sale of future receipts receiving gross proceeds of $528,984 which provided the Company with the ability to convert its account receivables into cash. Under the terms of the agreements, the Company must pay a specified amount each day until the financed receivables are fully paid. The agreements have an effective interest rate within the range of approximately 36% and 40%, which includes a discount of $143,446. The outstanding balance is secured by an interest in virtually all assets of the Company, with a first security interest on accounts receivable.

 

During the nine month period ended September 30, 2023, the Company entered into various non-recourse agreements for the sale of future receipts for net proceeds of $953,786, receiving $766,111 in cash, which provided the Company with the ability to convert its account receivables into cash.

 

The Company accounts for these agreements as a financing arrangement, with the purchase price recorded as a liability and daily repayments made are a reduction of the liability. As of September 30, 2023, there was an outstanding balance of $240,895 (December 31, 2022 - $292,636) which is presented net of a discount of $35,133 (December 31, 2022 - $78,387).

 
v3.23.3
Stockholders’ (Deficit) Equity
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
Stockholders’ (Deficit) Equity

Note 9 – Stockholders’ (Deficit) Equity

 

On May 5, 2023, the Company amended its articles of incorporation to increase the number of authorized shares of common stock of the Company to 400,000,000.

  

Stock issuance for services and stock based compensation

 

During the nine months ended September 30, 2023, the Company issued 6,113,078 shares of common stock, to officers, employees and vendors for services valued at $433,951.

 

During the nine months ended September 30, 2023 and 2022, the Company also recognized $328,388 of expense relating to the vesting of common stock issued to the Company’s Chairman and CEO.

 

Settlement of accrued liabilities for common stock

 

During the nine months ended September 30, 2023, the Company issued 12,149,670 shares of common stock to officers, employees and vendors for accumulated past services of $807,076, including $416,667 to its Chairman and CEO, see note 10. The Company also issued 8,121,979 shares of common stock valued at $7,64,057 to previous debt holders. The Company owes 157,023 shares of common stock to a vendor for services, leaving a payable of $10,572, which is included in accounts payable and accrued expenses on the consolidated balance sheet as of September 30, 2023.

 

Stock issued for LFR Acquisition

 

During the nine months ended September 30, 2023, the Company issued 2,400,000 shares of common stock for the acquisition of LFR with a fair value of $271,920 (see Note 4).

 

Stock issued for loan extension

 

On June 8, 2022, the Company issued 100,000 shares of common stock valued at $300,000 to one of its note holders per the loan extension agreement (see Note 6). The Company recognized $878,806 loss on extinguishment of the note.

 

On July 13, 2022, the Company entered into an amendment of its original promissory convertible note of September 1, 2021 with the note holder. The terms of the original note was amended to increase the principal balance of the note by $70,833; as well as granting 186,220 warrants and 75,512 common shares as consideration for a 90-day extension of the note. The common shares were issued to the lender as well as the original 74,488 common shares that were to be issued upon entering into the original loan agreement dated September 1, 2021. The Company recognized $955,658 loss on extinguishment of the note.

 

On August 18, 2022, the Company entered into an additional amendment of a previous amendment dated May 31, 2022, of its original promissory convertible note executed on September 3, 2021. Under the terms of the new amendment dated August 18, 2022, the note is extended until September 30, 2022 and in exchange, the Company agreed to provide the noteholder with 200,000 shares of common stock. In addition, the noteholder also agreed to cancel 500,000 warrants previously issued to the noteholder in exchange for an additional 200,000 shares of Company’s common stock. The Company recognized $423,176 loss on extinguishment of the note and a $1,183,544 gain on extinguishment upon cancellation of the warrants and derivative liabilities associated with the warrants.

 

On August 26, 2022, the Company cancelled 370,000 warrants previously issued to a note holder in exchange for the 370,000 common shares valued at $1,213,710. The Company recognized a $4,106,707 gain on extinguishment upon cancellation of the warrants and derivative liabilities associated with the warrants that was partially offset by a loss on extinguishment of $77,960.

  

Conversion of convertible notes and accrued interest to common stock

 

On September 19, 2022, the Company, under the terms of the note, issued 329,670 common shares upon the conversion of $148,870 in notes payable plus $1,250 in transaction fees. Upon conversion and settlement of the derivative liability, the Company recognized a $214,655 gain on extinguishment.

 

On September 20, 2022, the Company, under the terms of the note, issued 250,438 common shares upon the conversion of $100,000 in notes payable. Upon conversion and settlement of the derivative liability, the Company recognized a $100,808 gain on extinguishment.

 

On September 29, 2022, the Company, under the terms of the note, issued 1,355,222 common shares upon the conversion of $388,000 in notes payable. Upon conversion and settlement of the derivative liability, the Company recognized a $341,156 gain on extinguishment.

 

On December 9, 2022, the Company, under the terms of the note, issued 256,410 common shares upon the conversion of $39,744 in notes payable. Upon conversion and settlement of the derivative liability, the Company recognized a $41,435 gain on extinguishment.

 

On December 9, 2022, the Company, under the terms of the note, issued 1,923,077 common shares upon the conversion of $148,077 in notes payable. Upon conversion and settlement of the derivative liability, the Company recognized a $148,254 gain on extinguishment.

 

On January 13, 2023, the Company, under the terms of the note, issued 2,600,000 common shares upon the conversion of $130,000 in notes payable. Upon conversion and settlement of the derivative liability, the Company recognized a $155,870 gain on extinguishment.

 

On January 23, 2023, the Company, under the terms of the note, issued 2,666,763 common shares upon the conversion of $133,000 in notes payable. Upon conversion and settlement of the derivative liability, the Company recognized a $162,808 gain on extinguishment.

 

On April 26, 2023 and June 7, 2023, the Company issued 6,340,591 common shares valued at $843,933 upon the conversion of notes payable. Upon conversion of the note and settlement and derivative liability, the Company recognized a $132,142 loss on extinguishment, see Note 6.

 

On May 1, 2023 and June 21, 2023, the Company issued 5,120,200 common shares valued at $250,889, resulting in a loss on extinguishment of $79,212, see Note 6.

 

On June 12, 2023, the Company issued 5,522,303 common shares upon the conversion of $276,115 in notes payable and accrued interest. Upon conversion, the Company recognized a $5,516 loss on extinguishment.

 

Reclassification of derivative liabilities to APIC

 

On May 1, 2023, the Company no longer had derivative liabilities associated with the warrants and their cumulative value of $1,011,451 was reclassified into additional paid in capital on the consolidated statement of stockholders’ deficit.

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

Note 10 – Related Parties

 

Notes Payable and Accrued Interest – Related Parties

 

During the period ended September 30, 2022, the Company entered into the following related party transactions:

 

  · It recognized $125,000 in accrued salary for its Chairman and CEO in addition to the Company amortized $328,388 of previous stock compensation granted to its Chairman and CEO that is being amortized over 82 months;
  · A company with a common director advanced the Company $1,400,000 at 10% on September 1, 2021 for which the Company accrued $130,000 in interest for the year which is included in accounts payable and accrued liabilities. This note is also described in Note 6.
  · The Company paid its CFO $4,500 in fees during the year.

 

During the period ended September 30, 2023, the Company entered into the following related party transactions:

 

  · Issued 8,333,333 shares of common stock at $0.05 per share for $416,667 in accrued salary for its Chairman and CEO and in addition the Company amortized $328,388 of previous stock compensation granted to its Chairman and CEO that is being amortized over 82 months;
  · The Company paid $30,000 in salary to its President and COO.
  · The Company accrued $3,500 in fees payable and issued 2,685,180 shares of common stock at $0.05 per share for $134,259 to its Corporate Secretary for services.
  · The Company accrued $14,000 in fees payable to its CFO.
  · The Company issued 3,663,636 shares of common stock to one of its board members to settle notes payable of $150,000 and accrued interest of $33,182.
  · A company with a common director advanced the Company $1,400,000 at 10% on September 1, 2021 for which the Company accrued $8,574 ($165,000 in 2022) in interest during the nine months ended September 30, 2023 and included in accounts payable and accrued liabilities on the consolidated balance sheet as of September 30, 2023 and December 31, 2022, respectively. This note is also described in Note 6.

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

Note 11 – Commitments and Contingencies

 

Legal proceedings

 

On August 6, 2019, Ray Carter, the former CEO prior to the Company’s Bankruptcy, filed a lawsuit against the Company’s subsidiary Stemtech HealthSciences, alleging unpaid salary and vacation time dating to a period predating the Company’s current management team taking control in 2018. Mr. Carter’s claim is in the amount of $267,000. The Company has counter-sued Ray Carter personally and deems this matter non-meritorious. At the same time, the Company has accrued $267,000 which is included in accounts payable and accrued liabilities in the consolidated balance sheets as at September 30, 2023 and December 31, 2022. Mr. Carter’s request for Summary Judgment was dismissed by the Court on March 3, 2023.

 

In the opinion of management, the resolution of these matters, if any, will not have a material adverse impact on the Company’s consolidated financial position or consolidated results of operations.

 
v3.23.3
Taxes
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
Taxes

Note 12 – Taxes

 

At September 30, 2023, the Company had net operating loss (“NOL”) carryforwards of approximately $25 million that may be offset against future taxable income. Of the $25 million of net operating losses, U.S. Federal and state net operating losses accounted for $21 million and are subject to limitation under IRC Section 382. The U.S. net operating losses are limited to utilization of 80% of taxable income but do not have an expiration. At September 30, 2023, the Company had $4 million of non-US NOL carryforwards.

 

The Company applied the "more-likely-than-not" recognition threshold to all tax positions taken or expected to be taken in a tax return, which resulted in no unrecognized tax benefits as of September 30, 2023 and December 31, 2022, respectively.

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

Note 13 – Subsequent Events

 

Management of the Company has performed a review of events and transactions occurring after the consolidated balance sheet date to determine if there were any such events or transactions requiring adjustment to or disclosure in the accompanying consolidated financial statements, noting none other than the following:

 

On October 2, 2023, the Company issued 510,000 shares to an investor in exchange for the cancellation of his outstanding warrants.

 
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 accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2022, filed April 17, 2023. In the opinion of management, all adjustments (consisting of normal recurring adjustments unless otherwise indicated) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2023, are not necessarily indicative of the results that may be expected for the year as a whole. All intercompany accounts and transactions have been eliminated in consolidation.

 
Going Concern

Going Concern

 

The accompanying consolidated financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and classification of liabilities and commitments in the normal course of business. The accompanying consolidated financial statements do not reflect any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might result if the Company is unable to continue as a going concern.

 

The Company has experienced recurring net losses and negative cash flows from operations since inception and has an accumulated deficit of approximately $25.2 million and a working capital deficiency of approximately $5.2 million at September 30, 2023. The Company has funded its activities to date almost exclusively from debt and equity financing. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company will continue to require substantial funds to implement its new investment acquisition plans. Management’s plans in order to meet its operating cash flow requirements include financing activities such as private placements of its common stock, preferred stock offerings, and issuances of debt and convertible debt instruments.

 

The Company’s ability to continue as a going concern for the next twelve months from the issuance of these financial statements depends on its ability to execute its business plan, increase revenue, and reduce expenses. Such conditions raise substantial doubt about the Company’s ability to continue as a going concern.

 
Use of Estimates

Use of Estimates

 

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 
Cash

Cash

 

The Company considers all highly liquid temporary investments purchased with original maturities of three months or less at the date of purchase to be cash equivalents. The Company has no cash equivalents as of September 30, 2023 and December 31, 2022. The Company maintains certain cash balances at several institutions located outside the United States. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk.

 
Inventory

Inventory

 

Inventory is comprised of finished goods and raw materials and is valued at the lower of cost or market, using the “first-in, first-out” method in determining cost. Management evaluates the allowance for inventory obsolescence on a regular basis and has determined that no allowance for slow moving or obsolete inventory is necessary as at September 30, 2023 and December 31, 2022.

 
Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

 

The Company assesses, on an annual basis, the recoverability of the carrying amount of intangible assets and long-lived assets used in continuing operations. A loss is recognized when expected future cash flows (undiscounted and without interest) are less than the carrying amount of the asset. The impairment loss is determined as the difference by which the carrying amount of the asset exceeds its fair value. The Company evaluated its long-lived assets for any indications of impairment. The Company concluded that there was no impairment, however there can be no assurance that market conditions will not change or demand for the Company’s products will continue which could result in impairment of long-lived assets in the future.

 
Revenue Recognition

Revenue Recognition

 

It is the Company’s policy that revenues from product sales is recognized in accordance with ASC 606 “Revenues from Contracts with Customers.” Five basic steps must be followed before revenue can be recognized; (1) Identifying the contract(s) with a customer that creates enforceable rights and obligations; (2) Identifying the performance obligations in the contract, such as promising to transfer goods or services to a customer; (3) Determining the transaction price, meaning the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer; (4) Allocating the transaction price to the performance obligations in the contract, which requires the Company to allocate the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or services promised in the contract; and (5) Recognizing revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service to a customer. The amount of revenue recognized is the amount allocated to the satisfied performance obligation.

 

Revenues from direct retail sales to consumers and revenues from independent distributors occur when title and risk of loss had passed, which generally occurs at the time the products are shipped. Revenues are recorded net of estimated sales returns and allowances.

 

Allowances for product returns are provided at the time the sale is recorded. This liability is based upon historic return rates and the relevant return pattern, which reflects anticipated returns to be received over a period of up to one year following the original sale. As at September 30, 2023, the Company had a reserve for sales returns of approximately $6,800 (December 31, 2022 - $7,000), which is included in accrued liabilities in the accompanying consolidated balance sheets.

 
Comprehensive Income (Loss)

Comprehensive Income (Loss)

 

The other comprehensive income (loss) in the accompanying consolidated financial statements relates to the net income (loss) of the Company for the respective period as well as unrealized foreign currency translation adjustments.

 
Foreign Currency Translation

Foreign Currency Translation

 

A portion of the Company’s business operations occur outside the United States. The local currency of each of the Company’s subsidiaries is generally its functional currency. All assets and liabilities are translated into U.S. Dollars at exchange rates existing at the balance sheet dates, revenue and expenses are translated at weighted-average exchange rates and stockholders’ deficit is recorded at historical exchange rates. The resulting foreign currency translation adjustments are recorded as a separate component of stockholders’ deficit in the consolidated balance sheets and as a component of comprehensive income (loss) . Transaction gains and losses are included in other income (expense), net in the consolidated statements of operations and comprehensive income (loss).

 
Net Income (Loss) per Common Share, basic

Net Income (Loss) per Common Share, basic

 

Basic net income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period.

  

For the nine months ended September 30, 2023 and 2022, the dilutive effect of 14,448,206 and 3,836,000, respectively, of common stock warrants have not been included in the average shares outstanding for the calculation of net income (loss) per share as the effect would be anti-dilutive as a result of our net income (loss) in these periods.

 
Fair Value Measurements

Fair Value Measurements

 

As defined in ASC 820 “Fair Value Measurements,” fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

 

The Company determines the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company performs an analysis of the assets and liabilities at each reporting period end.

 

The Company’s financial instruments consist of cash, accounts receivable, accounts payable, accrued interest, notes payable and, convertible debentures. The carrying amounts of these financial instruments are of approximate fair value due to either length of maturity or interest rates that approximate prevailing rates unless otherwise disclosed in these financial statements. The Company’s derivative liabilities are valued using option pricing models with Level 3 inputs.

 
Sequencing

Sequencing

 

Based upon ASC 840-15-25, the Company has adopted a sequencing approach regarding the application of ASC 815-40 to its outstanding convertible notes and warrants. Pursuant to the sequencing approach, the Company evaluates its contracts based upon the earliest issuance date.

 
v3.23.3
Inventory (Tables)
 9 Months Ended
Sep. 30, 2023
Inventory Disclosure [Abstract]  
Schedule of inventory
        
   September 30,   December 31, 
   2023   2022 
Finished goods  $84,079   $103,297 
Raw materials   –    54,756 
Total Inventory  $84,079   $158,053 
v3.23.3
Intangible Assets (Tables)
 9 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of acquired intangible assets
            
   September 30, 2023   December 31, 2022  

Average

Estimated Life

(Years)

 
Patent products  $2,344,900   $2,344,900    14 
Trade names and trademarks   1,106,000    1,106,000    Indefinite 
Customer/distribution list   1,461,300    1,461,300    6 
Non-compete agreement   287,125    –    18 months 
Accumulated amortization   (2,338,142)   (1,918,200)     
Total  $2,861,183   $2,994,000      
v3.23.3
Operating Lease Commitments (Tables)
 9 Months Ended
Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
Schedule of maturity operating lease liabilities
    
Maturity of operating lease liabilities for the following periods:    
October 1, 2023 to December 31, 2023  $23,810 
January 1, 2024 to September 30, 2024   64,935 
Total undiscounted operating lease payments   88,745 
Less: imputed interest   4,909 
Present value of operating lease liabilities  $83,836 
v3.23.3
Notes Payable (Tables)
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
Schedule of notes payable
        
   September 30,
2023		   December 31,
2022		 
Secured Royalty Participation Agreements (1)  $–   $150,000 
Vehicle and equipment loans (2)   –    11,246 
Notes payable (3)   1,360,313    285,000 
Convertible debentures, net of discount (4)   1,392,972    482,885 
Total notes payable, net of discount of $661,657 and $1,823,265 as of September 30, 2023 and December 31, 2022, respectively  $2,753,285   $929,131 
v3.23.3
Derivative Liabilities (Tables)
 9 Months Ended
Sep. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of derivative liabilities
            
   Derivative Liability - Convertible Notes   Derivative Liability - Warrants   Total 
Balance as of January 1, 2022  $1,252,397   $2,972,188   $4,224,585 
Change due to issuances   3,401,528    1,964,761    5,366,289 
Change due to redemptions   (2,850,311)   (7,246,201)   (10,096,512)
Change in fair value   840,180    2,383,091    3,223,271 
Balance as of December 31, 2022   2,643,794    73,839    2,717,633 
Change due to issuances   1,279,735    1,233,201    2,512,936 
Change due to redemptions   (2,533,464)   (1,015,307)   (3,548,771)
Change in fair value   (1,390,065)   (291,733)   (1,681,798)
Balance as of September 30, 2023  $–   $–   $– 
Schedule of fair value of derivative liabilities assumptions
               
      September 30, 2023       December 31, 2022  
Stock price     N/A       $0.09 - $10.85  
Contractual term (in years)     N/A       0.00 - 5.00  
Volatility (annual)     N/A       47.4% - 236%  
Risk-free rate     N/A       0.19% - 4.38%  
v3.23.3
Summary of Significant Accounting Policies (Details Narrative) - USD ($)
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Working capital deficiency $ 5,200,000    
Cash equivalents $ 0   $ 0
Anti-dilutive shares 14,448,206 3,836,000  
Accounts Payable and Accrued Liabilities [Member]      
Reserve for sales returns $ 6,800   $ 7,000
v3.23.3
Inventory (Details) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Inventory Disclosure [Abstract]    
Finished goods $ 84,079 $ 103,297
Raw materials 0 54,756
Total Inventory $ 84,079 $ 158,053
v3.23.3
Intangible Assets (Details) - USD ($)
 9 Months Ended 12 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]    
Finite-lived intangible assets acquired, Total $ 2,861,183 $ 2,994,000
Finite-lived intangible assets, accumulated amortization (2,338,142) (1,918,200)
Patent Products [Member]    
Finite-Lived Intangible Assets [Line Items]    
Finite-lived intangible assets acquired, Total $ 2,344,900 2,344,900
Finite-lived intangible asset, useful life 14  
Trade Names And Trademarks [Member]    
Finite-Lived Intangible Assets [Line Items]    
Finite-lived intangible assets acquired, Total $ 1,106,000 1,106,000
Finite-lived intangible asset, useful life Indefinite  
Customer Or Distribution List [Member]    
Finite-Lived Intangible Assets [Line Items]    
Finite-lived intangible assets acquired, Total $ 1,461,300 1,461,300
Finite-lived intangible asset, useful life 6  
Non Compete Agreement [Member]    
Finite-Lived Intangible Assets [Line Items]    
Finite-lived intangible assets acquired, Total $ 287,125 $ 0
Finite-lived intangible asset, useful life 18 months  
v3.23.3
Intangible Assets (Details Narrative) - USD ($)
 9 Months Ended 12 Months Ended
May 07, 2018
Sep. 30, 2023
Dec. 31, 2019
Dec. 31, 2022
Indefinite-Lived Intangible Assets [Line Items]        
Goodwill   $ 467,409   $ 467,409
Stock issued for acquisition, value   $ 271,920    
L F R Acquisition [Member]        
Indefinite-Lived Intangible Assets [Line Items]        
Stock issued for acquisition, shares   2,400,000    
Stock issued for acquisition, value   $ 271,920    
Stemtech International [Member]        
Indefinite-Lived Intangible Assets [Line Items]        
Goodwill   $ 467,409   $ 467,409
R B C D Holdings [Member]        
Indefinite-Lived Intangible Assets [Line Items]        
Debt converted, amount converted     $ 4,000,000  
Debt converted, shares issued     2,000,000  
R B C D Holdings [Member]        
Indefinite-Lived Intangible Assets [Line Items]        
Payments to acquire intangible assets $ 400,000      
v3.23.3
Operating Lease Commitments (Details)
Sep. 30, 2023
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
October 1, 2023 to December 31, 2023 $ 23,810
January 1, 2024 to September 30, 2024 64,935
Total undiscounted operating lease payments 88,745
Less: imputed interest 4,909
Present value of operating lease liabilities $ 83,836
v3.23.3
Operating Lease Commitments (Details Narrative)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
USD ($)
Sep. 30, 2022
USD ($)
Aug. 16, 2021
ft²
Product Liability Contingency [Line Items]      
Operating lease expenses | $ $ 19,963 $ 61,156  
Weighted-average remaining lease term 11 months 12 days    
Weighted-average discount rate 10.00%    
Miramar Florida [Member] | Sunbearn Properties Inc [Member]      
Product Liability Contingency [Line Items]      
Lease and rent expenses | ft²     5,000
v3.23.3
Notes Payable (Details) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Debt Instrument [Line Items]    
Notes Payable $ 1,360,313 $ 446,246
Convertible notes payable 1,392,972 482,885
Total notes payable 2,753,285 929,131
Secured Royal Participation Agreement [Member]    
Debt Instrument [Line Items]    
Secured debt [1] 0 150,000
Vehicle And Equipment Loans [Member]    
Debt Instrument [Line Items]    
Notes Payable [2] 0 11,246
Notes Payable [Member]    
Debt Instrument [Line Items]    
Notes Payable [3] 1,360,313 285,000
Notes payable, net of discount 661,657 1,823,265
Convertible Notes Payable [Member]    
Debt Instrument [Line Items]    
Notes Payable   482,885
Convertible notes payable [4] $ 1,392,972 $ 482,885
[1] During June 2018, the Company entered into two (2) Secured Royalty Participation Agreements with Profile Solutions, Inc. (“PSI”) in exchange for working capital loans totaling $150,000. The loan amounts were due in June of 2019, plus an IRR of 18%. In consideration of these loan obligations, The Company agreed to pay a monthly royalty for one year being the greater of: x) 10% of the loan amount or y) 1.5% of the monthly gross revenues. PSI claims that these loans are in default, but the Company contends the loans reflected the terms of these agreements were usurious and contends that the loans are not legally enforceable obligations. This case was dismissed by the Court March 16, 2023 leaving a gain on extinguishment of $150,000.
[2] In 2019, Malaysia borrowed $27,295 to purchase a car and as of September 30, 2023, the note was paid in full. As of December 31, 2022, there was a balance of $11,246.
[3] In 2019, the Company engaged in agreements involving promissory notes with three lenders, collectively amounting to a principal balance of $375,000. These notes, bearing effective interest rates of 10%, mature within a one-year timeframe. Additionally, the Company allotted 45,000 shares of common stock, cumulatively valued, as a commitment incentive, resulting in an associated debt discount of $22,500. In the subsequent year, 2020, the Company further entered into promissory note arrangements with four lenders, culminating in an aggregate principal balance of $225,000. The effective interest rates for these notes range between 8% and 10% annually. As of December 31, 2022, the outstanding balance for the notes from both the 2019 and 2020 issuances amounted to $275,000, accompanied by accrued interest totaling $50,819.
[4] During the fiscal year concluding on December 31, 2021, the Company issued a cumulative total of $2,423,738 in convertible promissory notes to investors. These notes featured varying maturity dates spanning from nine months to three years, coupled with interest rates ranging from 8% to 12% per annum. In addition, the Company distributed 154,173 shares of common stock and granted warrants allowing the purchase of 2,400,000 common stock shares at exercise prices spanning between $2.685 and $3.00 per share. The recorded value of both the common stock and warrants was attributed as a discount to the notes, valued at fair market value.
v3.23.3
Notes Payable (Details Narrative) - USD ($)
 1 Months Ended 3 Months Ended 7 Months Ended 9 Months Ended 12 Months Ended
Sep. 21, 2023
Aug. 11, 2023
Jul. 21, 2023
Jun. 12, 2023
May 01, 2023
Mar. 16, 2023
Feb. 28, 2023
Sep. 08, 2022
Aug. 18, 2022
Jul. 13, 2022
Jan. 31, 2023
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2019
Apr. 11, 2023
Mar. 27, 2023
Oct. 20, 2021
Dec. 31, 2020
Debt Instrument [Line Items]                                              
Gain loss on extinguishment                       $ 0 $ 4,237,648   $ 814,132 $ 3,358,842              
Interest rate     13.00%                                        
Loss on extinguishment                       $ 0 (4,237,648)   (814,132) (3,358,842)              
Convertible notes payable                             $ 1,711,000 341,939              
Issuance of common shares         5,121,200                                    
Common shares payable                         $ 200,000     $ 200,000              
Conversion per share                                       $ 0.05      
Settlement of derivative liabilities                                       $ 171,362      
Agree to Issued common shares         7,739,938                                    
Loss on extinguishment         $ 79,212                                    
M C U S [Member]                                              
Debt Instrument [Line Items]                                              
Issuance of common shares                       2,618,738     2,618,738                
Common stock value                             $ 130,987                
Sharing Services Global Corporation [Member]                                              
Debt Instrument [Line Items]                                              
Gain loss on extinguishment         557,793                                    
Loss on extinguishment         (557,793)                                    
Capitalized of accrued interest         222,556                                    
Contingent payment         $ 222,556                                    
Vehicle And Equipment Loans [Member]                                              
Debt Instrument [Line Items]                                              
Debt instrument face amount                                     $ 27,295        
Notes issued                           $ 11,246     $ 11,246            
Three Lenders [Member]                                              
Debt Instrument [Line Items]                                              
Debt instrument face amount                                     $ 375,000        
Stock issued new, shares                                     45,000        
Unamortized debt discount                                     $ 22,500        
Four Lenders [Member]                                              
Debt Instrument [Line Items]                                              
Debt instrument face amount                                             $ 225,000
All Lenders [Member]                                              
Debt Instrument [Line Items]                                              
Notes issued                           275,000     275,000            
Accrued interest                           50,819     50,819            
Two Promissory Notes [Member] | Investors [Member]                                              
Debt Instrument [Line Items]                                              
Debt instrument face amount                                           $ 10,000  
Debt Conversion, Original Debt, Amount       $ 275,000                                      
Debt conversion, shares issued       6,777,121                                      
Promissory Notes [Member]                                              
Debt Instrument [Line Items]                                              
Gain loss on extinguishment                     $ 318,678                        
Debt instrument face amount                       $ 132,118     132,118                
Unamortized debt discount     $ 22,600                                        
Accrued interest                       3,862     3,862                
Payments to installments                             40,482                
Loss on extinguishment                     $ (318,678)                        
Conversion of common stock                     5,266,763                        
Conversion of principal amount                     $ 263,000                        
Promissory Notes [Member] | Nine Installments [Member]                                              
Debt Instrument [Line Items]                                              
Payments to installments     20,241                                        
Promissory Notes [Member] | Final Two Installments [Member]                                              
Debt Instrument [Line Items]                                              
Payments to installments     7,000                                        
Promissory Notes [Member] | Investors [Member]                                              
Debt Instrument [Line Items]                                              
Debt instrument face amount     $ 150,000                                        
Notes Payable [Member]                                              
Debt Instrument [Line Items]                                              
Unamortized debt discount                       661,657   1,823,265 661,657   1,823,265            
Notes payable, outstanding balance                       1,413,301   285,000 1,413,301   285,000            
Notes payable [1]                       $ 1,360,313   285,000 $ 1,360,313   $ 285,000            
Convertible Notes Payable [Member]                                              
Debt Instrument [Line Items]                                              
Debt instrument face amount                                   $ 2,423,738          
Stock issued new, shares                                   154,173          
Debt conversion, shares issued                                 4,114,816            
Warrants issued, shares                                   2,400,000          
Debt converted, amount converted                                 $ 798,526            
Debt converted, interest converted                                 25,473            
Notes payable                           482,885     482,885            
Accrued interest                           381,259     381,259            
Convertible Notes Payable [Member] | M C U S And Leonite [Member]                                              
Debt Instrument [Line Items]                                              
Convertible notes payable                           $ 400,000                  
Convertible Notes Payable [Member] | M C U S And Leonite [Member] | Exercise Price Terms 1 [Member]                                              
Debt Instrument [Line Items]                                              
Warrants issued, shares                           95,115                  
Convertible Notes Payable [Member] | M C U S And Leonite [Member] | Exercise Price Terms 2 [Member]                                              
Debt Instrument [Line Items]                                              
Warrants issued, shares                           81,760                  
Convertible Notes Payable 2 [Member]                                              
Debt Instrument [Line Items]                                              
Gain loss on extinguishment               $ (252,429)                              
Debt instrument, increase (decrease), net                   $ 70,833                          
Loss on extinguishment               $ 252,429                              
Convertible Notes Payable 2 [Member] | Warrants [Member]                                              
Debt Instrument [Line Items]                                              
Debt conversion, shares issued                   183,780                          
Convertible Notes Payable 2 [Member] | Common Stock [Member]                                              
Debt Instrument [Line Items]                                              
Debt conversion, shares issued                   75,512                          
Secured Convertible Promissory Note [Member] | Common Stock [Member]                                              
Debt Instrument [Line Items]                                              
Gain loss on extinguishment             $ 132,142                                
Debt conversion, shares issued             10,648,152                                
Loss on extinguishment             $ (132,142)                                
Notes payable             $ 637,684                                
Issuance of common shares                       6,340,591     6,340,591                
Common shares payable 4,307,561 2,559,600                         4,307,561                
Common shares payable                             $ 573,336                
Convertible Promissory Note [Member] | Investment Agreement [Member] | Institutional Investor [Member]                                              
Debt Instrument [Line Items]                                              
Debt instrument face amount                                         $ 70,000    
Convertible notes payable                                         $ 7,000,000    
Original issue discount                                         12.00%    
Convertible Note 1 [Member]                                              
Debt Instrument [Line Items]                                              
Unamortized debt discount                       $ 0   $ 1,259,825 0   1,259,825            
Convertible notes                       227,777   1,400,000 227,777   1,400,000            
Convertible Note 2 [Member]                                              
Debt Instrument [Line Items]                                              
Unamortized debt discount                       608,669   183,391 608,669   183,391            
Convertible notes                       1,773,864   267,082 1,773,864   267,082            
Convertible Note 3 [Member]                                              
Debt Instrument [Line Items]                                              
Unamortized debt discount                           380,049     380,049            
Convertible notes                           639,068     639,068            
Three Convertible Notes [Member]                                              
Debt Instrument [Line Items]                                              
Convertible notes                       $ 1,392,972   $ 482,885 $ 1,392,972   $ 482,885            
Secured Royalty Participation Agreements [Member]                                              
Debt Instrument [Line Items]                                              
Gain loss on extinguishment           $ 150,000                                  
Loss on extinguishment           $ (150,000)                                  
Extension Agreement [Member] | Convertible Notes Payable 1 [Member]                                              
Debt Instrument [Line Items]                                              
Stock issued new, shares                         100,000                    
Second Extension Agreement [Member] | Convertible Notes Payable 1 [Member]                                              
Debt Instrument [Line Items]                                              
Stock issued new, shares                 200,000                            
[1] In 2019, the Company engaged in agreements involving promissory notes with three lenders, collectively amounting to a principal balance of $375,000. These notes, bearing effective interest rates of 10%, mature within a one-year timeframe. Additionally, the Company allotted 45,000 shares of common stock, cumulatively valued, as a commitment incentive, resulting in an associated debt discount of $22,500. In the subsequent year, 2020, the Company further entered into promissory note arrangements with four lenders, culminating in an aggregate principal balance of $225,000. The effective interest rates for these notes range between 8% and 10% annually. As of December 31, 2022, the outstanding balance for the notes from both the 2019 and 2020 issuances amounted to $275,000, accompanied by accrued interest totaling $50,819.
v3.23.3
Derivative Liabilities (Details - Derivative liabilities) - USD ($)
 9 Months Ended 12 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Short-Term Debt [Line Items]    
Derivative liability beginning balance $ 2,717,633 $ 4,224,585
Change due to issuances 2,512,936 5,366,289
Change due to redemptions (3,548,771) (10,096,512)
Change in fair value (1,681,798) 3,223,271
Derivative liability ending balance 0 2,717,633
Warrant [Member]    
Short-Term Debt [Line Items]    
Derivative liability beginning balance 73,839 2,972,188
Change due to issuances 1,233,201 1,964,761
Change due to redemptions (1,015,307) (7,246,201)
Change in fair value (291,733) 2,383,091
Derivative liability ending balance 0 73,839
Convertible Notes [Member]    
Short-Term Debt [Line Items]    
Derivative liability beginning balance 2,643,794 1,252,397
Change due to issuances 1,279,735 3,401,528
Change due to redemptions (2,533,464) (2,850,311)
Change in fair value (1,390,065) 840,180
Derivative liability ending balance $ 0 $ 2,643,794
v3.23.3
Derivative Liabilities (Details - Assumptions)
 12 Months Ended
Dec. 31, 2022
Measurement Input, Share Price [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Derivatives, Determination of Fair Value $0.09 - $10.85
Measurement Input, Expected Term [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Derivatives, Determination of Fair Value 0.00 - 5.00
Measurement Input, Price Volatility [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Derivatives, Determination of Fair Value 47.4% - 236%
Measurement Input, Risk Free Interest Rate [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Derivatives, Determination of Fair Value 0.19% - 4.38%
v3.23.3
Financing Arrangement (Details Narrative) - USD ($)
 9 Months Ended 12 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Proceeds from factoring liability $ 953,786 $ 528,984
Cash received 766,111  
Factoring liability 240,895 292,636
Factoring liability, discount $ 35,133 $ 78,387
Minimum [Member]    
Factoring liability effective interest rate   36.00%
Maximum [Member]    
Factoring liability effective interest rate   40.00%
v3.23.3
Stockholders’ (Deficit) Equity (Details Narrative) - USD ($)
 3 Months Ended 9 Months Ended
Jun. 21, 2023
Jun. 12, 2023
Jun. 07, 2023
May 01, 2023
Apr. 26, 2023
Jan. 23, 2023
Jan. 13, 2023
Dec. 09, 2022
Sep. 29, 2022
Sep. 21, 2022
Sep. 19, 2022
Aug. 26, 2022
Aug. 18, 2022
Jul. 13, 2022
Jun. 08, 2022
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
May 05, 2023
Dec. 31, 2022
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                          
Common stock, shares authorized                               400,000,000   400,000,000   400,000,000 200,000,000
Stock based compensation                                   $ 328,388 $ 328,388    
Stock to be issued for services, value                               $ 1,838 $ 2,806,111 433,951 2,836,111    
Share issued       5,121,200                                  
Number of shares acquired                                   271,920      
Loss on extinguishment                               $ 0 $ 4,237,648 $ 814,132 3,358,842    
Notes Payable [Member]                                          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                          
Debt conversion, shares issued 5,120,200 5,522,303 6,340,591 5,120,200 6,340,591 2,666,763 2,600,000 256,410 1,355,222 250,438 329,670                    
Debt conversion, converted instrument, amount $ 250,889 $ 276,115 $ 843,933 $ 250,889 $ 843,933 $ 133,000 $ 130,000 $ 39,744 $ 388,000 $ 100,000 $ 148,870                    
Transaction fees                     1,250                    
Loss on extinguishment $ 79,212 $ 5,516 $ 132,142 $ 79,212 $ 132,142 $ 162,808 $ 155,870 $ 41,435 $ 341,156 $ 100,808 $ 214,655                    
Notes Payable 1 [Member]                                          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                          
Debt conversion, shares issued               1,923,077                          
Debt conversion, converted instrument, amount               $ 148,077                          
Loss on extinguishment               $ 148,254                          
Note Extension [Member]                                          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                          
Loss on extinguishment                             $ 878,806            
Loan Extension [Member] | Note Sept 2021 [Member]                                          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                          
Stock issued new, shares                           75,512              
Debt instrument, increase (decrease), net                           $ 70,833              
Warrants issued, shares                           186,220              
Gain (loss) on extinguishment of debt                           $ 955,658              
Loan Extension [Member] | Note May 2022 [Member]                                          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                          
Stock issued new, shares                         200,000                
Gain (loss) on extinguishment of debt                         $ 423,176                
Warrants cancelled, shares                         500,000                
Warrants cancelled, common stock issued, shares                         200,000                
Gain on cancellation of warrants                         $ 1,183,544                
L F R [Member]                                          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                          
Number of shares acquired                                   2,400,000      
Number of shares acquired                                   $ 271,920      
Chairman and CEO [Member]                                          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                          
Stock based compensation                                   $ 328,388 328,388    
Stock to be issued for services, shares                                   8,333,333      
Vesting Of Common Stock Of One Officer [Member]                                          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                          
Stock based compensation                                   $ 328,388 $ 328,388    
Officers Employees And Vendors [Member]                                          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                          
Stock issued new, shares                                   6,113,078      
Number of shares issued, value                                   $ 433,951      
Officers Employees And Vendors [Member] | Accumulated Past Services [Member]                                          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                          
Stock to be issued for services, shares                                   12,149,670      
Stock to be issued for services, value                                   $ 807,076      
Officers Employees And Vendors [Member] | Accumulated Past Services [Member] | Chairman and CEO [Member]                                          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                          
Stock to be issued for services, value                                   416,667      
Officers Employees And Vendors [Member] | Accumulated Past Services [Member] | Debt Holders [Member]                                          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                          
Number of shares issued, value                                   $ 764,057      
Share issued                               8,121,979   8,121,979      
A Vendor [Member]                                          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                          
Stock to be issued for services, shares                               157,023   157,023      
Stock to be issued for services, value                               $ 10,572   $ 10,572      
Noteholder [Member]                                          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                          
Stock issued for loan extension, shares                             100,000            
Stock issued for loan extension, value                             $ 300,000            
A Note Holder [Member]                                          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                          
Gain (loss) on extinguishment of debt                       $ 77,960                  
Warrants cancelled, shares                       370,000                  
Warrants cancelled, common stock issued, shares                       370,000                  
Gain on cancellation of warrants                       $ 4,106,707                  
Warrants cancelled, common stock issued, value                       $ 1,213,710                  
v3.23.3
Related Parties (Details Narrative) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Related Party Transaction [Line Items]          
Stock compensation     $ 328,388 $ 328,388  
Advance payable $ 2,650,165   2,650,165   $ 3,396,543
Stock issued for services, value $ 1,838 $ 2,806,111 433,951 2,836,111  
Chief Financial Officer [Member]          
Related Party Transaction [Line Items]          
Accrued fees paid     14,000 4,500  
President And C O O [Member]          
Related Party Transaction [Line Items]          
Salary paid     30,000    
Corporate Secretary [Member]          
Related Party Transaction [Line Items]          
Accrued fees paid     $ 3,500    
Stock issued for services, shares     2,685,180    
Common stock, price per share $ 0.05   $ 0.05    
Stock issued for services, value     $ 134,259    
Chairman and CEO [Member]          
Related Party Transaction [Line Items]          
Accrued salary $ 416,667 125,000 416,667 125,000  
Stock compensation     $ 328,388 328,388  
Stock issued for services, shares     8,333,333    
Common stock, price per share $ 0.05   $ 0.05    
Common Director [Member]          
Related Party Transaction [Line Items]          
Advance payable $ 1,400,000 1,400,000 $ 1,400,000 1,400,000  
Accrued interest $ 8,574 $ 130,000 $ 8,574 $ 130,000 $ 165,000
Board Member [Member]          
Related Party Transaction [Line Items]          
Debt converted, shares isseud     3,663,636    
Debt converted, orginal debt amount     $ 150,000    
Debt converted, interest converted     $ 33,182    
v3.23.3
Commitments and Contingencies (Details Narrative)
Dec. 31, 2022
USD ($)
Ray Carter [Member]  
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]  
Accrued Salaries $ 267,000
v3.23.3
Taxes (Details Narrative)
$ in Millions
Sep. 30, 2023
USD ($)
Operating Loss Carryforwards [Line Items]  
Operating Loss Carryforwards $ 25
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration 21
Non U S Carryforwards [Member]  
Operating Loss Carryforwards [Line Items]  
Operating Loss Carryforwards $ 4
Stemtech (QB) (USOTC:STEK)
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