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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 8/22/22 First Foods Group, Inc. 10-Q 6/30/22 56:5M Discount Edgar/FA |
Document/Exhibit Description Pages Size
1: 10-Q Quarterly Report HTML 1.07M
2: EX-31.1 Certification -- §302 - SOA'02 HTML 20K
3: EX-31.2 Certification -- §302 - SOA'02 HTML 20K
4: EX-32.1 Certification -- §906 - SOA'02 HTML 16K
5: EX-32.2 Certification -- §906 - SOA'02 HTML 16K
11: R1 Cover HTML 66K
12: R2 Condensed Consolidated Balance Sheets HTML 121K
13: R3 Condensed Consolidated Balance Sheets HTML 48K
(Parenthetical)
14: R4 Condensed Consolidated Statements of Operations HTML 93K
(Unaudited)
15: R5 Condensed Consolidated Statements of Changes in HTML 91K
Deficit (Unaudited)
16: R6 Condensed Consolidated Statements of Cash Flows HTML 125K
(Unaudited)
17: R7 Business Summary of Significant Accounting HTML 31K
Principles and Liquidity
18: R8 Related Party Transactions HTML 94K
19: R9 Property and Equipment HTML 25K
20: R10 Accounts Payable and Accrued Liabilities HTML 28K
21: R11 Loans and Long-Term Loans HTML 144K
22: R12 Stockholders Deficit HTML 60K
23: R13 Leases HTML 25K
24: R14 Commitments HTML 32K
25: R15 Concentration Risks HTML 19K
26: R16 Subsequent Events HTML 18K
27: R17 Business Summary of Significant Accounting HTML 39K
Principles and Liquidity (Policies)
28: R18 Related Party Transactions (Tables) HTML 87K
29: R19 Property and Equipment (Tables) HTML 22K
30: R20 Accounts Payable and Accrued Liabilities (Tables) HTML 27K
31: R21 Loans and Long-Term Loans (Tables) HTML 141K
32: R22 Stockholders Deficit (Tables) HTML 56K
33: R23 Leases (Tables) HTML 22K
34: R24 Business Summary of Significant Accounting HTML 26K
Principles and Liquidity (Details Narrative)
35: R25 Related Party Transactions (Details) HTML 42K
36: R26 Related Party Transactions (Details Narrative) HTML 57K
37: R27 Property and Equipment (Details) HTML 26K
38: R28 Property and Equipment (Details Narrative) HTML 17K
39: R29 Accounts Payable Related Party Payable and Accrued HTML 30K
Liabilities (Details)
40: R30 Loans and Longterm Loans (Details) HTML 83K
41: R31 Loans and Longterm Loans (Details Narrative) HTML 34K
42: R32 Stockholders Deficit (Details) HTML 31K
43: R33 Stockholders Deficit (Details 1) HTML 29K
44: R34 Stockholders Deficit (Details 2) HTML 35K
45: R35 Stockholders Deficit (Details 3) HTML 31K
46: R36 Stockholders Deficit (Details Narrative) HTML 76K
47: R37 Leases (Details) HTML 29K
48: R38 Leases (Details Narrative) HTML 28K
49: R39 Commitments (Details Narrative) HTML 73K
50: R40 Concentration Risks (Details Narrative) HTML 36K
51: R41 Subsequent Events (Details Narrative) HTML 17K
54: XML IDEA XML File -- Filing Summary XML 95K
52: XML XBRL Instance -- fifg_10q_htm XML 1.43M
53: EXCEL IDEA Workbook of Financial Reports XLSX 99K
8: EX-101.CAL XBRL Calculations -- fifg-20220630_cal XML 132K
10: EX-101.DEF XBRL Definitions -- fifg-20220630_def XML 429K
7: EX-101.LAB XBRL Labels -- fifg-20220630_lab XML 758K
9: EX-101.PRE XBRL Presentations -- fifg-20220630_pre XML 603K
6: EX-101.SCH XBRL Schema -- fifg-20220630 XSD 172K
55: JSON XBRL Instance as JSON Data -- MetaLinks 274± 371K
56: ZIP XBRL Zipped Folder -- 0001477932-22-006373-xbrl Zip 172K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM i 10-Q
(Mark One)
i ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended i June 30, 2022
or
i ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition period from __________ to __________
Commission File Number: i 333-206260
i FIRST FOODS GROUP, INC. |
(Exact name of registrant as specified in its charter) |
i Nevada |
| i 47-4145514 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
i First Foods Group, Inc. c/o Incorp Services, Inc.,
i 3773 Howard Hughes Parkway, i Suite 500S,
i Las Vegas, i NV i 89169-6014
(Address of principal executive offices) (Zip Code)
( i 201) i 471-0988
Registrant’s telephone number, including area code
_______________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
| None |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. i Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). i Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
i Non-accelerated Filer | ☒ | Smaller reporting company | i ☒ |
Emerging growth company | i ☐ | ||
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 i ☐ No ☒
As of August 19, 2022, the number of shares outstanding of the registrant’s class of common stock was i 27,058,338, par value of $0.001 per share.
| 2 |
| Table of Contents |
Condensed Consolidated Balance Sheets |
|
| 2022 |
|
| 2021 |
| ||
|
| (Unaudited) |
|
| (Audited) |
| ||
ASSETS |
| |||||||
CURRENT ASSETS |
|
|
|
|
|
| ||
Cash |
| $ | i 16,314 |
|
| $ | i 5,627 |
|
Restricted cash |
|
| i 5,900 |
|
|
| i 5,900 |
|
Inventory, net of reserve $ i 23,625 and $ i 0, respectively |
|
| i 33,590 |
|
|
| i 56,936 |
|
Merchant cash advances, net of allowance $ i 173,088 and $ i 131,703, respectively |
|
| i 722 |
|
|
| i 37,541 |
|
Prepaid expenses and other current assets |
|
| i 83,405 |
|
|
| i 89,888 |
|
TOTAL CURRENT ASSETS |
|
| i 139,931 |
|
|
| i 195,892 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
| i 25,232 |
|
|
| i 139,103 |
|
Operating lease right-of-use assets |
|
| i 143,175 |
|
|
| i 177,062 |
|
TOTAL ASSETS |
| $ | i 308,338 |
|
| $ | i 512,057 |
|
LIABILITIES AND DEFICIT | ||||||||
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
| $ | i 1,412,184 |
|
| $ | i 1,074,216 |
|
Accounts payable and accrued liabilities - related parties |
|
| i 862,747 |
|
|
| i 718,114 |
|
Put liability |
|
| i 29,421 |
|
|
| i 29,421 |
|
Deferred revenue |
|
| i 50,746 |
|
|
| i 81,953 |
|
Loans, net of unamortized debt discount |
|
| i 1,363,988 |
|
|
| i 1,288,586 |
|
Related party loans, net of unamortized debt discount |
|
| i 708,313 |
|
|
| i 471,009 |
|
Operating lease liabilities |
|
| i 74,650 |
|
|
| i 69,078 |
|
TOTAL CURRENT LIABILITIES |
|
| i 4,502,049 |
|
|
| i 3,732,377 |
|
|
|
|
|
|
|
|
|
|
Loans - long term |
|
| i 150,000 |
|
|
| i 150,000 |
|
Operating lease liabilities - long term |
|
| i 71,323 |
|
|
| i 109,975 |
|
TOTAL LIABILITIES |
|
| i 4,723,372 |
|
|
| i 3,992,352 |
|
|
|
|
|
|
|
|
|
|
Commitments (Note 8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEFICIT |
|
|
|
|
|
|
|
|
FIRST FOODS GROUP, INC. DEFICIT: |
|
|
|
|
|
|
|
|
Preferred stock, i 20,000,000 shares authorized: |
|
|
|
|
|
|
|
|
Series A convertible preferred stock: $ i 0.001 par value, i 1 share authorized, i 1 issued and outstanding ($ i 577,005 liquidation preference) |
|
| i - |
|
|
| i - |
|
Series B convertible preferred stock: $ i 0.001 par value, i 4,999,999 shares authorized, i 354,999 issued and outstanding, respectively ($ i 118,235 liquidation preference) |
|
| i 355 |
|
|
| i 355 |
|
Series C convertible preferred stock: $ i 0.001 par value, i 3,000,000 shares authorized, i 660,000 shares issued and outstanding ($ i 165,000 liquidation preference) |
|
| i 660 |
|
|
| i 660 |
|
Common stock: $ i 0.001 par value, i 100,000,000 shares authorized, i 27,058,338 and i 26,998,338 shares issued and outstanding, respectively |
|
| i 27,058 |
|
|
| i 26,998 |
|
Additional paid-in capital |
|
| i 11,894,629 |
|
|
| i 12,062,341 |
|
Accumulated deficit |
|
| ( i 16,051,407 | ) |
|
| ( i 15,335,458 | ) |
Total First Foods Group, Inc. Deficit |
|
| ( i 4,128,705 | ) |
|
| ( i 3,245,104 | ) |
|
|
|
|
|
|
|
|
|
Noncontrolling interests |
|
| ( i 286,329 | ) |
|
| ( i 235,191 | ) |
Total deficit |
|
| ( i 4,415,034 | ) |
|
| ( i 3,480,295 | ) |
TOTAL LIABILITIES AND DEFICIT |
| $ | i 308,338 |
|
| $ | i 512,057 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
| Table of Contents |
Condensed Consolidated Statements of Operations |
(Unaudited) |
|
| For the Three Months Ended June 30, |
|
| For the Six Months Ended |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Product sales, net |
| $ | i 63,877 |
|
| $ | i 240,439 |
|
| $ | i 78,334 |
|
| $ | i 256,464 |
|
Merchant cash advance income, net |
|
| i 29 |
|
|
| i 7,102 |
|
|
| i 377 |
|
|
| i 33,415 |
|
Total Revenues |
|
| i 63,906 |
|
|
| i 247,541 |
|
|
| i 78,711 |
|
|
| i 289,879 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product sales |
|
| i 37,993 |
|
|
| i 162,343 |
|
|
| i 40,474 |
|
|
| i 166,084 |
|
Legal fees |
|
| i 27,949 |
|
|
| i 2,097 |
|
|
| i 29,098 |
|
|
| i 3,096 |
|
General and administrative |
|
| i 335,492 |
|
|
| i 446,423 |
|
|
| i 739,978 |
|
|
| i 933,810 |
|
Provision for merchant cash advances |
|
| i 37,145 |
|
|
| ( i 6,840 | ) |
|
| i 36,799 |
|
|
| ( i 144,338 | ) |
Impairment of assets |
|
| i 92,736 |
|
|
| i - |
|
|
| i 92,736 |
|
|
| i - |
|
Total Operating Expenses |
|
| i 531,315 |
|
|
| i 604,023 |
|
|
| i 939,085 |
|
|
| i 958,652 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS |
|
| ( i 467,409 | ) |
|
| ( i 356,482 | ) |
|
| ( i 860,374 | ) |
|
| ( i 668,773 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
| i 291,482 |
|
|
| i - |
|
|
| i 291,482 |
|
|
| i - |
|
Loss on extinguishment of loans payable |
|
| i - |
|
|
| ( i 299,773 | ) |
|
| i - |
|
|
| ( i 299,773 | ) |
Interest expense |
|
| ( i 89,536 | ) |
|
| ( i 174,461 | ) |
|
| ( i 198,196 | ) |
|
| ( i 359,950 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
| ( i 265,463 | ) |
|
| ( i 830,716 | ) |
|
| ( i 767,088 | ) |
|
| ( i 1,328,496 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
| i - |
|
|
| i - |
|
|
| i - |
|
|
| i - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS |
|
| ( i 265,463 | ) |
|
| ( i 830,716 | ) |
|
| ( i 767,088 | ) |
|
| ( i 1,328,496 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interest share of loss |
|
| i 29,466 |
|
|
| i 10,748 |
|
|
| i 51,138 |
|
|
| i 37,055 |
|
Deemed dividends |
|
| i - |
|
|
| ( i 139,690 | ) |
|
| i - |
|
|
| ( i 139,690 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributed to shareholders of First Foods Group, Inc. |
| $ | ( i 235,997 | ) |
| $ | ( i 959,658 | ) |
| $ | ( i 715,950 | ) |
| $ | ( i 1,431,131 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC AND DILUTED LOSS PER COMMON SHARE ATTRIBUTABLE TO FIRST FOODS GROUP, INC. STOCKHOLDERS |
| $ | ( i 0.01 | ) |
| $ | ( i 0.04 | ) |
| $ | ( i 0.03 | ) |
| $ | ( i 0.06 | ) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING ATTRIBUTABLE TO FIRST FOODS GROUP, INC. STOCKHOLDERS - BASIC AND DILUTED |
|
| i 27,058,338 |
|
|
| i 24,167,311 |
|
|
| i 27,050,426 |
|
|
| i 23,397,874 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
| Table of Contents |
Condensed Consolidated Statements of Changes in Deficit | ||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||
|
| Preferred Stock |
|
| Common Stock |
|
| Additional paid-in |
|
| Accumulated |
|
| Total First Foods Group, |
|
| Non-controlling |
|
| Total |
| |||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| capital |
|
| deficit |
|
| Inc. deficit |
|
| interests |
|
| deficit |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Balance at December 31, 2020 |
|
| i 1,133,333 |
|
| $ | i 1,133 |
|
|
| i 22,367,179 |
|
| $ | i 22,367 |
|
| $ | i 10,515,601 |
|
| $ | ( i 12,954,696 | ) |
| $ | ( i 2,415,595 | ) |
| $ | ( i 142,780 | ) |
| $ | ( i 2,558,375 | ) |
Common stock issued for cash to a related party |
|
| - |
|
|
| i - |
|
|
| i 249,999 |
|
|
| i 250 |
|
|
| i 49,750 |
|
|
| i - |
|
|
| i 50,000 |
|
|
| i - |
|
|
| i 50,000 |
|
Common stock issued to consultants for services |
|
| - |
|
|
| i - |
|
|
| i 36,765 |
|
|
| i 37 |
|
|
| i 4,963 |
|
|
| i - |
|
|
| i 5,000 |
|
|
| i - |
|
|
| i 5,000 |
|
Common stock issued for related party loan |
|
| - |
|
|
| i - |
|
|
| i 140,000 |
|
|
| i 140 |
|
|
| i 28,520 |
|
|
| i - |
|
|
| i 28,660 |
|
|
| i - |
|
|
| i 28,660 |
|
Common stock issued with loans payable |
|
| - |
|
|
| i - |
|
|
| i 18,000 |
|
|
| i 18 |
|
|
| i 4,662 |
|
|
| i - |
|
|
| i 4,680 |
|
|
| i - |
|
|
| i 4,680 |
|
Stock based compensation |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i 65,542 |
|
|
| i - |
|
|
| i 65,542 |
|
|
| i - |
|
|
| i 65,542 |
|
Warrants issued for director services |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i 43,693 |
|
|
| i - |
|
|
| i 43,693 |
|
|
| i - |
|
|
| i 43,693 |
|
Net loss |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i - |
|
|
| ( i 471,473 | ) |
|
| ( i 471,473 | ) |
|
| ( i 26,307 | ) |
|
| ( i 497,780 | ) |
Balance at March 31, 2021 |
|
| i 1,133,333 |
|
|
| i 1,133 |
|
|
| i 22,811,943 |
|
|
| i 22,812 |
|
|
| i 10,712,731 |
|
|
| ( i 13,426,169 | ) |
|
| ( i 2,689,493 | ) |
|
| ( i 169,087 | ) |
|
| ( i 2,858,580 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for cash to a related party |
|
| - |
|
|
| i - |
|
|
| i 249,999 |
|
|
| i 250 |
|
|
| i 49,750 |
|
|
| i - |
|
|
| i 50,000 |
|
|
| i - |
|
|
| i 50,000 |
|
Common stock issued to consultants for services - put liability |
|
| - |
|
|
| i - |
|
|
| i 112,390 |
|
|
| i - |
|
|
| i - |
|
|
| i - |
|
|
| i - |
|
|
| i - |
|
|
| i - |
|
Common stock issued for related party loan |
|
| - |
|
|
| i - |
|
|
| i 50,000 |
|
|
| i 50 |
|
|
| i 10,450 |
|
|
| i - |
|
|
| i 10,500 |
|
|
| i - |
|
|
| i 10,500 |
|
Common stock issued for conversion of loans payable |
|
| - |
|
|
| i - |
|
|
| i 191,424 |
|
|
| i 192 |
|
|
| i 31,067 |
|
|
| i - |
|
|
| i 31,259 |
|
|
| i - |
|
|
| i 31,259 |
|
Common stock issued for conversion of loans payable - related party |
|
| - |
|
|
| i - |
|
|
| i 2,000,000 |
|
|
| i 2,000 |
|
|
| i 458,000 |
|
|
| i - |
|
|
| i 460,000 |
|
|
| i - |
|
|
| i 460,000 |
|
Stock based compensation |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i 74,253 |
|
|
| i - |
|
|
| i 74,253 |
|
|
| i - |
|
|
| i 74,253 |
|
Warrants issued for director services |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i 44,179 |
|
|
| i - |
|
|
| i 44,179 |
|
|
| i - |
|
|
| i 44,179 |
|
Warrants issued for related party loan |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i 20,200 |
|
|
| i - |
|
|
| i 20,200 |
|
|
| i - |
|
|
| i 20,200 |
|
Warrants issued for conversion of loan payable |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i 83,513 |
|
|
| i - |
|
|
| i 83,513 |
|
|
| i - |
|
|
| i 83,513 |
|
Net loss |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i - |
|
|
| ( i 819,968 | ) |
|
| ( i 819,968 | ) |
|
| ( i 10,748 | ) |
|
| ( i 830,716 | ) |
Balance at June 30, 2021 |
|
| i 1,133,333 |
|
| $ | i 1,133 |
|
|
| i 25,415,756 |
|
| $ | i 25,304 |
|
| $ | i 11,484,143 |
|
| $ | ( i 14,246,137 | ) |
| $ | ( i 2,735,557 | ) |
| $ | ( i 179,835 | ) |
| $ | ( i 2,915,392 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2021 |
|
| i 1,015,000 |
|
| $ | i 1,015 |
|
|
| i 26,998,338 |
|
| $ | i 26,998 |
|
| $ | i 12,062,341 |
|
| $ | ( i 15,335,458 | ) |
| $ | ( i 3,245,104 | ) |
| $ | ( i 235,191 | ) |
| $ | ( i 3,480,295 | ) |
Common stock issued with loans payable |
|
| - |
|
|
| i - |
|
|
| i 60,000 |
|
|
| i 60 |
|
|
| i 12,540 |
|
|
| i - |
|
|
| i 12,600 |
|
|
| i - |
|
|
| i 12,600 |
|
Stock based compensation |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i 30,154 |
|
|
| i - |
|
|
| i 30,154 |
|
|
| i - |
|
|
| i 30,154 |
|
Warrants issued for consulting services |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i 41,508 |
|
|
| i - |
|
|
| i 41,508 |
|
|
| i - |
|
|
| i 41,508 |
|
Warrants issued for loan payable |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i 28,088 |
|
|
| i - |
|
|
| i 28,088 |
|
|
| i - |
|
|
| i 28,088 |
|
Net loss |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i - |
|
|
| ( i 479,952 | ) |
|
| ( i 479,952 | ) |
|
| ( i 21,672 | ) |
|
| ( i 501,624 | ) |
Balance at March 31, 2022 |
|
| i 1,015,000 |
|
|
| i 1,015 |
|
|
| i 27,058,338 |
|
|
| i 27,058 |
|
|
| i 12,174,631 |
|
|
| ( i 15,815,410 | ) |
|
| ( i 3,612,706 | ) |
|
| ( i 256,863 | ) |
|
| ( i 3,869,569 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i 11,480 |
|
|
| i - |
|
|
| i 11,480 |
|
|
| i - |
|
|
| i 11,480 |
|
Accumulated catch up adjustment |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| ( i 291,482 | ) |
|
| i - |
|
|
| ( i 291,482 | ) |
|
| i - |
|
|
| ( i 291,482 | ) |
Net loss |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i - |
|
|
| ( i 235,997 | ) |
|
| ( i 235,997 | ) |
|
| ( i 29,466 | ) |
|
| ( i 265,463 | ) |
Balance at June 30, 2022 |
|
| i 1,015,000 |
|
| $ | i 1,015 |
|
|
| i 27,058,338 |
|
| $ | i 27,058 |
|
| $ | i 11,894,629 |
|
| $ | ( i 16,051,407 | ) |
| $ | ( i 4,128,705 | ) |
| $ | ( i 286,329 | ) |
| $ | ( i 4,415,034 | ) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. |
| 5 |
| Table of Contents |
Condensed Consolidated Statements of Cash Flows |
(Unaudited) |
|
| For the Six Months Ended |
| |||||
|
| 2022 |
|
| 2021 |
| ||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
| ||
Net loss |
| $ | ( i 767,088 | ) |
| $ | ( i 1,328,496 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Non-employee stock based compensation |
|
| i - |
|
|
| i 5,000 |
|
Employee stock based compensation |
|
| i 83,142 |
|
|
| i 227,666 |
|
Accumulative catch up adjustment |
|
| ( i 291,482 | ) |
|
| i - |
|
Loss on extinguishment of loans payable |
|
| i - |
|
|
| i 299,773 |
|
Impairment of asset |
|
| i 92,736 |
|
|
| i - |
|
Amortization of debt discount |
|
| i 105,394 |
|
|
| i 253,549 |
|
Depreciation and amortization expense |
|
| i 31,108 |
|
|
| i 28,566 |
|
Change in merchant allowance |
|
| i 41,385 |
|
|
| ( i 143,986 | ) |
Merchant cash advance direct write off |
|
| i - |
|
|
| ( i 1,312 | ) |
Non-cash lease expense |
|
| i 33,887 |
|
|
| i 30,193 |
|
Put liability |
|
| i - |
|
|
| i 23,490 |
|
Inventory reserve |
|
| i 23,625 |
|
|
| i - |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
| i - |
|
|
| ( i 23,654 | ) |
Inventory |
|
| ( i 279 | ) |
|
| ( i 9,373 | ) |
Merchant cash advances |
|
| ( i 4,566 | ) |
|
| i 212,502 |
|
Prepaid expenses and other current assets |
|
| ( i 3,489 | ) |
|
| i 30,783 |
|
Operating lease liabilities |
|
| ( i 33,080 | ) |
|
| ( i 29,643 | ) |
Accounts payable and accrued liabilities |
|
| i 337,968 |
|
|
| i 231,881 |
|
Accounts payable and accrued liabilities – related party |
|
| i 144,633 |
|
|
| i 142,784 |
|
Deferred revenue |
|
| ( i 31,207 | ) |
|
| ( i 14,221 | ) |
Net cash used in operating activities |
|
| ( i 237,313 | ) |
|
| ( i 64,498 | ) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Purchase of equipment |
|
| i - |
|
|
| ( i 877 | ) |
Net cash used in investing activities |
|
| i - |
|
|
| ( i 877 | ) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from sale of common stock – related party |
|
| i - |
|
|
| i 100,000 |
|
Proceeds from loans |
|
| i 30,000 |
|
|
| i 103,601 |
|
Repayment of loans |
|
| i - |
|
|
| ( i 33,429 | ) |
Proceeds from related party loans |
|
| i 218,000 |
|
|
| i 112,500 |
|
Repayments of related party loans |
|
| i - |
|
|
| ( i 75,411 | ) |
Net cash provided by financing activities |
|
| i 248,000 |
|
|
| i 207,261 |
|
|
|
|
|
|
|
|
|
|
NET INCREASE IN CASH AND RESTRICTED CASH |
|
| i 10,687 |
|
|
| i 141,886 |
|
CASH AND RESTRICTED CASH AT BEGINNING OF THE PERIOD |
|
| i 11,527 |
|
|
| i 50,386 |
|
CASH AND RESTRICTED CASH AT END OF THE PERIOD |
| $ | i 22,214 |
|
| $ | i 192,272 |
|
|
|
|
|
|
|
|
|
|
CASH AND RESTRICTED CASH CONSIST OF THE FOLLOWING: |
|
|
|
|
|
|
|
|
END OF THE PERIOD |
|
|
|
|
|
|
|
|
Cash |
| $ | i 16,314 |
|
| $ | i 168,782 |
|
Restricted Cash |
|
| i 5,900 |
|
|
| i 23,490 |
|
|
| $ | i 22,214 |
|
| $ | i 192,272 |
|
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
NON-CASH FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Common stock issued with loans |
| $ | i 12,600 |
|
| $ | i 4,680 |
|
Common stock issued with related party loans |
| $ | i - |
|
| $ | i 59,360 |
|
Common stock and warrants issued for conversion of loan payable |
| $ | i - |
|
| $ | i 250,000 |
|
Common stock issued for conversion of loan payable |
| $ | i - |
|
| $ | i 25,000 |
|
$Warrants issued with loans |
| $ | i 28,088 |
|
| $ | i - |
|
|
|
|
|
|
|
|
|
|
CASH PAID FOR: |
|
|
|
|
|
|
|
|
Interest |
| $ | i 5,052 |
|
| $ | i 83,034 |
|
Income taxes |
| $ | i - |
|
| $ | i - |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. |
| 6 |
| Table of Contents |
NOTE 1 – BUSINESS SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND LIQUIDITY
Nature of Business
i
First Foods Group, Inc. (the “Company” or “First Foods”) is a smaller reporting company focused on developing its specialty chocolate product line through its Holy Cacao subsidiary and participating in merchant cash advances (“MCAs”) through its 1st Foods Funding Division. First Foods continues to pursue new brands and concepts, including the wholesaling of various health-related products through its FFGI Wholesale Division.
Holy Cacao is a majority owned subsidiary that is dedicated to producing, packaging, distributing and selling specialty chocolate products, including specialty chocolate products infused with a hemp-based ingredient in accordance with the Company’s understanding of the Agricultural Act of 2014 (the “2014 Farm Bill”) and/or the Agriculture Improvement Act of 2018 (the “2018 Farm Bill,” and together with the 2014 Farm Bill, collectively, the “Farm Bill”), which renders the production of hemp in compliance with the provisions of the Farm Bill federally lawful. The Company has not been, is not, and has no current plans to be involved in producing, packaging, distributing or selling any product that is infused with a still-illegal marijuana-based ingredient THQ, although it intends to revisit the matter as regulations change in jurisdictions in which it operates.
The Company is also dedicated to licensing its intellectual property (“IP”), including its name, brand, and packaging, to third parties. The Company may license its IP to third parties that may produce, package, and distribute hemp-based products pursuant with the Company’s understanding of the Farm Bill. The Company may license its IP to third parties that may produce, package, and distribute marijuana-based products, but only as such licensing is legal. Holy Cacao holds four trademarks for the brands, “The Edibles Cult”, “Purely Irresistible”, “Mystere” and “Southeast Edibles”.
The Company also has a contract with TIER Merchant Advances LLC (“TIER”) to participate in the purchase of future receivables from qualified TIER merchants for the purpose of generating revenue for the Company. The Company also provides cash advances directly to merchants.
Quarterly Reporting
i
The accompanying unaudited condensed consolidated financial statements (“financial statements”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and have been consistently applied. Certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP, but which are not required for interim reporting purposes, have been omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to present fairly the financial position as of June 30, 2022 and the results of operations and cash flows for the interim periods ended June 30, 2022 and 2021, have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on April 14, 2022. Operating results for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2022.
Impairment of Long-Lived Assets
i
Long-lived assets are comprised of property and equipment. The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset or group of assets may not be recoverable. If these circumstances exist, recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to future undiscounted net cash flows expected to be generated by the asset group. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the six months ended June 30, 2022 and the year ended December 31, 2021, the Company impaired property and equipment for a total of $ i 92,736 and $ i 46,368, respectively.
/
Liquidity and Going Concern
i
The Company’s unaudited condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States of America (“GAAP”) applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for the next 12 months following the issuance of these unaudited condensed consolidated financial statements.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. As of June 30, 2022, the Company had approximately $ i 1,364,000 in third-party short-term debt and approximately $ i 3,100 in associated debt discount and approximately $ i 708,000 in related-party short-term debt and $ i 0 in associated debt discount that is due within the next twelve months. Management’s plan is to increase revenue, obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its operating expenses and seeking equity and/or debt financing. However, neither any members of management nor any significant shareholders are currently committed to invest funds with us and, therefore, we cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The Company does not have sufficient cash flow for the next twelve months from the date of this report. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
/ /
| 7 |
| Table of Contents |
Recent Accounting Pronouncements
i
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial position or results of operations upon adoption.
In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses” to improve information on credit losses for financial assets and net investment in leases that are not accounted for at fair value through net income. ASU 2016-13 replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. In April 2019 and May 2019, the FASB issued ASU No. 2019-04, ”Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” and ASU No. 2019-05, ”Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief” which provided additional implementation guidance on the previously issued ASU. In November 2019, the FASB issued ASU 2019-10, “Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842),” which defers the effective date for public filers that are considered small reporting companies (“SRC”) as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Since the Company is an SRC, implementation is not needed until January 1, 2023. The Company will continue to evaluate the effect adopting ASU 2016-13 will have on the Company’s consolidated financial statements.
Recently Adopted Accounting Pronouncements
i
In May 2021, the FASB issued ASU 2021-04, “Earnings Per Share (Topic 260)– Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity – Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force).” The ASU addresses how an issuer should account for modifications or an exchange of freestanding written call options classified as equity that is not within the scope of another Topic. For both public and private companies, the ASU is effective for fiscal years beginning after December 15, 2021. Transition is prospective. Early adoption is permitted. The Company’s adoption of ASU 2021-04 on January 1, 2022 did not have a material impact on its unaudited condensed consolidated financial statements.
i
NOTE 2 – RELATED PARTY TRANSACTIONS
Consulting Agreements
On February 27, 2017, Harold Kestenbaum assumed the role of Chairman of the Board of Directors and Interim Chief Executive Officer (“Interim CEO”). Mr. Kestenbaum earned $ i 40,000 per year for his role as Chairman of the Board and no longer takes compensation. As of June 30, 2022, the Company has accrued a total of $ i 40,000 of compensation for his role as Interim CEO under the previous agreement.
/
| 8 |
| Table of Contents |
As of June 30, 2022, the Company has a consulting agreement with R and W Financial (a company owned by a director) for $ i 5,000 a month. The agreement is for an indefinite period of time and is subject to cancellation by either party with written notice of 30 days. The outstanding balance as of June 30, 2022 and December 31, 2021 was $ i 177,960 and $ i 146,303, respectively.
Related Party Loans
i
|
|
|
|
|
|
|
|
|
| Associated equity instruments recorded as debt discount |
|
|
|
|
|
|
| |||||||||||||||||
|
|
|
|
|
| Original |
| New |
| Common |
|
| Fair Value of Common |
|
|
|
| Fair Value of |
|
|
|
|
| |||||||||||
|
|
| Interest |
|
| Maturity |
| Maturity |
| Shares |
|
| Shares |
|
| Warrants |
|
| Warrants |
|
| June 30, |
|
| December 31, |
| ||||||||
|
|
| Rate |
|
| Date |
| Date** |
| issued |
|
| issued |
|
| issued |
|
| issued |
|
| 2022 |
|
| 2021 |
| ||||||||
| 1 |
|
|
| 12%* |
| 4/17/22 |
| 10/31/22 |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | i 100,000 |
|
| $ | 100,000 |
| |||||
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| 2 |
|
|
| 0%* |
| 4/24/22 |
| 8/31/22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 179,813 |
|
|
| i 179,813 |
| |
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| 3 |
|
|
| 12%* |
| 4/16/22 |
| 8/30/22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 150,000 |
|
|
| i 150,000 |
| |
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| i 130,000 |
|
|
| i 26,500 |
|
|
| i 100,000 |
|
|
| i 20,200 |
|
|
|
|
|
|
|
|
| ||||||||||
| 4 |
|
|
| 0%* |
| 9/15/22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 500 |
|
|
| i 500 |
| |
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| 5 |
|
|
| 0%* |
| 5/30/22 |
| 12/31/22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 278,000 |
|
|
| i 60,000 |
| |
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| 6 |
|
|
| 0%* |
| Loans fully repaid in 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
| - |
|
|
| - |
| |
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| i 60,000 |
|
|
| i 12,660 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
Unamortized debt discount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
| ( i 19,304 | ) | |||||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | i 708,313 |
|
| $ | i 471,009 |
| |||||
* - unsecured note |
** - During the six months ended June 30, 2022 and 2021, the company extended the terms of the notes identified above. The extension of the term was accounted for as a modification to the original note. The company capitalized new costs of $ i 0 and $ i 59,360, for the period ended June 30, 2022 and 2021, respectively, as a result of the modifications. |
During the six months ended June 30, 2022 and 2021, the Company recorded $ i 19,304 and $ i 57,470 of interest expense related to the amortization of debt discount and $ i 11,901 and $ i 22,258 of regular interest, respectively.
During the three months ended June 30, 2022 and 2021, the Company recorded $ i 3,792 and $ i 24,116 of interest expense related to the amortization of debt discount and $ i 5,984 and $ i 8,942 of regular interest, respectively.
As of June 30, 2022 and December 31, 2021, accrued interest was $ i 80,051 and $ i 68,149, respectively.
During the six months ended June 30, 2021, the Company converted $ i 250,000 of loan payable in exchange for i 2,000,000 shares of common stock and warrants for the right to purchase i 375,000 shares of common stock. The aggregate fair value of the common stock shares issued and for the granted warrants was $ i 543,513. The Company recorded a loss on extinguishment of debt of $ i 293,513.
Related Party Payables
As of June 30, 2022 and December 31, 2021, the Company owed a Director $ i 204,787 and $ i 150,822, respectively, for expenses incurred on behalf of the Company.
Director Agreements
The Company annually revisits the board of director agreements, which include quarterly compensation of $ i 10,000 per director for the fiscal year. Three of the five board members currently are compensated under these terms, while the other two board members remain unpaid. As of June 30, 2022 and December 31, 2021, the Company has accrued $ i 440,000 and $ i 381,000, respectively, in relation to the director agreements which is included in Accounts payable and accrued liabilities – related parties on the unaudited condensed consolidated balance sheet.
| 9 |
| Table of Contents |
On July 7, 2020, our Board of Directors appointed Michael Kaplan to the Board of Directors for a term of 2 years, who currently remains as an uncompensated board member (see note 6 for details). If terminated with cause by the Company, the consultant shall not thereafter be entitled to any form of compensation, the unvested warrants shall terminate, and he shall be paid a buyout fee in the amount of i 250,000 fully vested warrants. If terminated without cause by the Company, all unvested warrants shall be accelerated and vest in one-half the time it was previously scheduled to vest.
i
NOTE 3 – PROPERTY AND EQUIPMENT
Property and equipment, net consists of the following:
i
|
| 2022 |
|
| 2021 |
| ||
Leasehold improvements |
| $ | i 33,000 |
|
| $ | i 33,000 |
|
Equipment |
|
| i 201,024 |
|
|
| i 201,024 |
|
Less: Accumulated depreciation, amortization and impairment |
|
| ( i 208,792 | ) |
|
| ( i 94,921 | ) |
Total |
| $ | i 25,232 |
|
| $ | i 139,103 |
|
The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset or group of assets may not be recoverable. If these circumstances exist, recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to future undiscounted net cash flows expected to be generated by the asset group. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the six months ended June 30, 2022 and the year ended December 31, 2021, the Company impaired property and equipment for a total of $ i 92,736 and $ i 46,368, respectively. |
| 10 |
| Table of Contents |
i
NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities consist of the following:
i
|
| June 30, |
|
|
| |||
|
| 2022 |
|
| 2021 |
| ||
Accounts Payable |
| $ | i 324,323 |
|
| $ | i 221,206 |
|
Interest |
|
| i 299,866 |
|
|
| i 209,311 |
|
Salaries |
|
| i 730,183 |
|
|
| i 603,371 |
|
Other |
|
| i 57,812 |
|
|
| i 40,328 |
|
Total third party payables |
|
| i 1,412,184 |
|
|
| i 1,074,216 |
|
Related party payables, officers and director fees |
|
| i 862,747 |
|
|
| i 718,114 |
|
Total payables |
| $ | i 2,274,931 |
|
| $ | i 1,792,330 |
|
i
NOTE 5 – LOANS AND LONG-TERM LOANS
Associated equity instruments recorded as debt discount
i
|
|
| Interest Rate |
|
| Original Maturity Date |
| New Maturity Date **** |
| Common Shares issued |
|
| Fair Value of Common Shares issued |
|
| Warrants issued |
|
| Fair Value of Warrants issued |
|
| 2022 |
|
| 2021 |
| ||||||||
| 1 |
|
|
| i 12%* |
| i 4/16/2022 |
| i 8/31/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | i 50,000 |
|
| $ | 50,000 |
| |||||
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| 2 |
|
|
| i 12%* |
| i 4/22/2022 |
| i 11/30/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 18,000 |
|
|
| i 18,000 |
| |
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| i 18,000 |
|
|
| i 4,680 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| 3 |
|
|
| i 12%* |
| i 6/30/2022 |
| i 12/31/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 250,000 |
|
|
| i 250,000 |
| |
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| i 125,000 |
|
|
| i 28,088 |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| 4 |
|
|
| i 12%* |
| i 4/16/2022 |
| i 12/31/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 410,000 |
|
|
| i 410,000 |
| |
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| 5 |
|
|
| i 12%* |
| i 4/16/2022 |
| i 12/31/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 140,000 |
|
|
| i 140,000 |
| |
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| 6 |
|
|
| i 12%* |
| i 4/30/2022 |
| i 12/31/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 200,000 |
|
|
| i 200,000 |
| |
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| 7 |
|
|
| i 12%* |
| i 7/31/2022 |
| i 12/31/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 60,000 |
|
|
| i 60,000 |
| |
During the six months ended June 30, 2022 |
|
| i 60,000 |
|
|
| i 12,600 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| 8 |
|
|
| i 12%* |
| i 7/29/2022 |
| i 12/31/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 96,000 |
|
|
| i 96,000 |
| |
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| 9 |
|
| i 3.75% ** |
|
| i 6/25/2050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 150,000 |
|
|
| i 150,000 |
| |
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| 10 |
|
|
| i 12.5%* |
| i 12/17/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 3,600 |
|
|
| i 3,600 |
| |
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| 11 |
|
|
| i 0%* |
| i 9/19/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 16,500 |
|
|
| i 16,500 |
| |
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| 12 |
|
|
| i 0%* |
| i 4/16/2022 |
| i 8/31/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 50,000 |
|
|
| i 50,000 |
| |
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| 13 |
|
| i 0% *** |
|
| i 4/16/2022 |
| i 8/31/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 30,000 |
|
|
| i 30,000 |
| |
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| 14 |
|
|
| i 0%* |
| i 4/16/2022 |
| i 8/31/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 13,000 |
|
|
| i 13,000 |
| |
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| 15 |
|
| i 0% *** |
|
| i 5/30/2022 |
| i 8/31/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 30,000 |
|
|
| i - |
| |
During the six months ended June 30, 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
During the six months ended June 30, 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| ||||||||||
| Unamortized debt discount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( i 3,112 | ) |
|
| ( i 48,514 | ) | |||||||
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 1,513,988 |
|
|
| i 1,438,586 |
| |||||||
| Less: short term loans, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| i 1,363,988 |
|
|
| i 1,288,586 |
| |||||||
| Total long-term loans, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | i 150,000 |
|
| $ | i 150,000 |
| |||||||
* - unsecured note
** - secured note and collateralized by all tangible and intangible personal property
*** - unsecured note and guaranteed by a Director of the Company
**** - During the six months ended June 30, 2022 and 2021, the company extended the terms of the notes identified above, the extension of the term was accounted for as a modification to the original note. The company capitalized new costs of $ i 40,688 and $ i 4,680, for the period ended June 30, 2022 and 2021, respectively, as a result of the modifications. On August 1, 2022, the Company extended the terms of Note 7 above. In connection with this extension the Company issued a warrant to purchase i 60,000 shares of common stock. The warrants are valued at $ i 7,788 based on the Black Scholes Model, are fully vested as of the issue date and have an exercise term of three ( i 3) years. The Company recorded a debt discount and will amortize it over the life of the loan.
In connection with the various debts issuances and extensions, the Company periodically, as applicable, records debt discount and amortizes it over the applicable life of the debt. During the three months ended June 30, 2022 and 2021, the Company recorded $ i 38,744 and $ i 99,382 of interest expense related to the amortization of debt discount and $ i 38,134 and $ i 41,687 of regular interest, respectively. During the six months ended June 30, 2022 and 2021, the Company recorded $ i 86,090 and $ i 196,079 of interest expense related to the amortization of debt discount and $ i 75,848 and $ i 82,990 of regular interest, respectively. As of June 30, 2022 and December 31, 2021, accrued interest was $ i 208,627 and $ i 132,778, respectively.
As of June 30, 2022 and December 31, 2021, accrued interest associated with the economic injury disaster loan was $ i 11,188 and $ i 8,385, respectively.
/
| 11 |
| Table of Contents |
i
NOTE 6 – STOCKHOLDERS’ DEFICIT
Warrant Activity
Common Stock Warrants
On July 7, 2020, our Board of Directors appointed Michael Kaplan to the Board of Directors. In connection with the agreement one million ( i 1,000,000) warrants were issued. The warrants are valued at $ i 177,200 based on the Black Scholes Model. For the six months ended June 30, 2022 and 2021, the Company recorded $ i 0 and $ i 87,872 as compensation expense related to the warrants, respectively. For the three months ended June 30, 2022 and 2021, the Company recorded $ i 0 and $ i 44,179 as compensation expense related to the warrants, respectively.
Prior to Mr. Kaplan’s appointment to the Board of Directors, on July 7, 2020 the Company entered into a Consulting Agreement with Mr. Kaplan to award him, as full compensation for two (2) years of service, warrants to purchase two million ( i 2,000,000) shares of common stock, if certain milestones are reached, at an exercise price of $ i 0.18 per share, which was the closing price of our common stock on such date. The warrants are valued at $ i 354,400 based on the Black Scholes Model. When the warrants were issued management had assessed the probability of certain milestones being met as probable and therefore the warrants were being straight-lined over the term of services and accelerated whenever a milestone is met. During the quarter ending June 30, 2022, management, upon further review, has determined that these milestones will probably not be met and has recorded an accumulative catch up adjustment of $ i 291,482. For the six months ended June 30, 2022 and 2021, the Company recorded $ i 41,508 and $ i 83,478 as compensation expense related to the warrants, respectively. For the three months ended June 30, 2022 and 2021, the Company recorded $ i 0 and $ i 41,970 as compensation expense related to the warrants, respectively. The warrants shall vest upon the occurrence to the Company of the following milestone events through the efforts of the consultant. In July 2022, the term of the consulting agreement ended with no further milestones being completed. No further compensation will be recorded in association to these warrants:
i
No. of Warrants | Milestone | |
i 100,000 | Acceptance by the Company of a full go-to market strategy for the Company’s products. This milestone has been achieved. | |
i 100,000 |
| i Acceptance by the Company of a social marketing platform and PR strategy and onboarding of such. |
i 300,000/ i 500,000 | i 300,000 for each multi outlet (“MULO”) retailer that is onboarded – regardless of store count carrying the product; and 500,000, if the onboarded MULO is a national chain. | |
i 300,000 | i Deliverance of full due diligence package for each potential acquisition for which the Company requests the consultant perform due diligence | |
i 500,000 | i Upon the closing of any acquisition which the consultant brought to the Company and provided due diligence. | |
i 500,000 | i Additional compensation in board seat agreement. |
On August 4, 2020, the Company signed an Employment Agreement for a term of three years with an annual base salary of eighty-four thousand dollars ($ i 84,000). As part of the agreement the Company will issue a warrant to the employee to purchase i 300,000 shares a year, for a total of 900,000 shares of the Company’s common stock. The warrants have a term of three ( i 3) years from date of issue and an exercise price equal to the closing market price of the Company’s common stock on August 4, of the corresponding year. The warrants issued on August 4, 2020, 2021 and 2022, are valued at $ i 97,470, $ i 46,050 and $ i 22,740, respectively, based on the Black Scholes Model. The warrants will be subject to a 12-month period whereby the warrants will vest in equal monthly increments for each year of the employment period. Once per quarter, the employee may waive the right to receive i 25,000 warrants and receive in exchange for $ i 5,000 worth of shares of the Company’s common stock. In the event the employee’s employment is terminated by the Company without cause, the employee shall be entitled to receive severance in an amount equal to the lesser of three month’s salary or the amount of salary otherwise payable until the termination date. The employee additionally shall be entitled to retain all warrants scheduled to vest within the following six months. For the six months ended June 30, 2022 and 2021, the Company recorded $ i 41,634 and $ i 48,334 as compensation expense related to the warrants, respectively. For the three months ended June 30, 2022 and 2021, the Company recorded $ i 11,480 and $ i 24,301 as compensation expense related to the warrants, respectively.
/
| 12 |
| Table of Contents |
On March 21, 2022, the Company extended the maturity date on one of its promissory notes (see Note 5). In association with this extension the company granted warrants for the right to purchase i 125,000 shares of common stock at an exercise price of $ i 0.24 a share. The warrants are valued at $ i 28,088 based on the Black Scholes Model, are fully vested as of the issue date and have an exercise term of three (3) years. The Company recorded a debt discount and will amortize it over the life of the loan.
The Company utilized the Black-Scholes option-pricing model to estimate fair value, utilizing the following assumptions for the respective period:
i
|
| 2022 |
|
| 2021 |
| ||
Risk-free interest rate |
|
| i 0.22 | % |
| i 0.03- i 0.08 | % | |
Expected term of options, in years |
|
| i 3 |
|
|
| i 3 |
|
Expected annual volatility |
|
| i 214.0 | % |
| i 228.0- i 247.7 | % | |
Expected dividend yield |
| - | % |
| - | % | ||
Determined grant date fair value per option |
| $ | i 0.15 – i 0.22 |
| $ | i 0.14 – i 0.22 |
| |
A summary of the Company’s warrants to purchase common stock activity is as follows:
i
|
| Number of Warrants (in common shares) |
|
| Weighted Average Exercise Price |
| ||
Outstanding, December 31, 2020 |
|
| i 4,899,750 |
|
| $ | i 0.21 |
|
Granted |
|
| i 1,148,775 |
|
|
| i 0.19 |
|
Exercised |
|
| - |
|
|
| i - |
|
Forfeited or cancelled |
|
| ( i 343,750 | ) |
|
| i 0.08 |
|
Outstanding, December 31, 2021 |
|
| i 5,704,775 |
|
| $ | i 0.22 |
|
Granted |
|
| i 425,000 |
|
|
| i 0.18 |
|
Exercised |
|
| - |
|
|
| i - |
|
Forfeited or cancelled |
|
| ( i 60,000 | ) |
|
| i 0.30 |
|
Outstanding, June 30, 2022 |
|
| i 6,069,775 |
|
| $ | i 0.21 |
|
| 13 |
| Table of Contents |
As of June 30, 2022, i 4,144,775 warrants for common stock were exercisable and the intrinsic value of these warrants was $0, the weighted average remaining contractual life for warrants outstanding was i 1.67 years and the remaining expense is $ i 4,416 over the remaining amortization period which is three months.
As of June 30, 2021, i 3,468,391 warrants for common stock were exercisable and the intrinsic value of these warrants was $ i 76,742, the weighted average remaining contractual life for warrants outstanding was i 2.01 years and the remaining expense is $ i 184,313 over the remaining amortization period which is 1.25 years.
Preferred Stock Warrants
A summary of the Company’s warrants to purchase Series B Preferred Stock activity is as follows:
i
|
| Number of Warrants (in Series B Preferred Stock) |
|
| Weighted Average Exercise Price |
| ||
Outstanding, December 31, 2020 |
|
| i 4,470,000 |
|
| $ | i 0.68 |
|
Granted |
|
| - |
|
|
| i - |
|
Exercised |
|
| - |
|
|
| i - |
|
Forfeited or cancelled |
|
| - |
|
|
| i - |
|
Outstanding, December 31, 2021 |
|
| i 4,470,000 |
|
| $ | 0.68 |
|
Granted |
|
| - |
|
|
| i - |
|
Exercised |
|
| - |
|
|
| i - |
|
Forfeited or cancelled |
|
| - |
|
|
| i - |
|
Outstanding, June 30, 2022 |
|
| i 4,470,000 |
|
| $ | i 0.68 |
|
As of June 30, 2022, i 4,470,000 warrants for Series B preferred stock were exercisable and the intrinsic value of these warrants was $ i 0, the weighted average remaining contractual life for warrants outstanding was i 5.87 years.
As of June 30, 2021, i 4,470,000 warrants for Series B preferred stock were exercisable and the intrinsic value of these warrants was $ i 1,739,250, the weighted average remaining contractual life for warrants outstanding was i 6.87 years.
i
NOTE 7 – LEASES
On June 23, 2020, the i Company entered into an operating lease agreement with a term of 4 years, and an option to extend for three years, comprising of office and warehouse space. This option is included in the lease term when it is reasonably certain that the option will be exercised and failure to exercise such option will result in economic penalty and as such the option to extend for the three-year term is not included in the below calculation.
For the six months ended June 30, 2022 and 2021, the Company incurred lease expense for its operating leases of $ i 43,821 and $ i 43,821, respectively, which was included in general and administrative expenses on the accompanying unaudited condensed consolidated statements of operations.
For the three months ended June 30, 2022 and 2021, the Company incurred lease expense for its operating leases of $ i 21,910 and $ i 21,910, respectively, which was included in general and administrative expenses on the accompanying unaudited condensed consolidated statements of operations.
The Company’s weighted-average remaining lease term relating to its operating leases is i 1.83 years, with a weighted-average discount rate of i 12.00%.
/
| 14 |
| Table of Contents |
The Company had cash payments for operating leases of $ i 43,015 and $ i 43,271 for the six months ended June 30, 2022 and 2021, respectively and $ i 21,720 and $ i 21,465 for the three months ended June 30, 2022 and 2021, respectively.
The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of June 30, 2022.
i
Maturity of Lease Liability |
|
|
| |
2022 |
| $ | i 43,866 |
|
2023 |
|
| i 89,487 |
|
2024 |
|
| i 30,120 |
|
Total undiscounted operating lease payments |
|
| i 163,474 |
|
Less: Imputed interest |
|
| 17,501 |
|
Present value of operating lease liabilities |
| $ | i 145,973 |
|
i
NOTE 8 – COMMITMENTS
On July 16, 2018, the Company entered into a consulting agreement with a service provider that contains the following terms:
| · | i A $6,000 per month advance of Holy Cacao equity distribution will be awarded every month Holy Cacao earns a net profit over a period of twenty-four (24) consecutive months following the initial product launch and production sale. |
| · | i 300,000 warrants for shares of the Company’s common stock will be awarded after each of two consecutive twelve (12) month periods in which Holy Cacao earns a net profit from gross annual product sales of at least $1M. Each of the two 300,000 warrant awards will vest equally over a twelve (12) month period. As of June 30, 2022, these targets have not been achieved and the Company has determined it is not probable of being met at this time, as such no compensation expense has been recorded. |
On August 14, 2019, the Company entered into an agreement with a CFN Media. In consideration for the services and deliverables provided by CFN Media, the Company will make three (3) cash payments to CFN Media totaling $ i 30,000. Payments will be made in accordance with the following staged schedule:
“Stage 1” - i $10,000 due upon the signing of the agreement for the Stage 1 services and deliverables: the interview, lead generation system and two (2) articles, including syndication, distribution and placement. This payment has been made.
“Stage 2” - i $10,000 due upon the Company’s receipt of CFN Media’s invoice issued after CFN Media’s completion of Stage 1 and the Company’s confirmation they are ready to continue with Stage 2, which will include CFN Media’s delivery of two (2) Articles with the embedded interview and lead generation, as well as syndication, distribution and placement of services and deliverables.
“Stage 3” - i $10,000 due upon the Company’s receipt of CFN Media’s invoice issued after CFN Media’s completion of Stage 2 and the Company’s confirmation they are ready to continue with Stage 3, which will include CFN Media’s delivery of two (2) Articles with the embedded interview and lead generation, as well as syndication, distribution and placement of services and deliverables.
On October 10, 2019, the Company signed a master distribution agreement with CBD Unlimited, Inc., which is a public company and a master distributor, to distribute the Company’s hemp-based chocolate products. The term of this agreement is four years. The agreement includes the issuance of i 250,000 shares of the Company’s common stock at the closing market price of $ i 0.26 per share as of the date of the agreement. Additionally, the Company shall pay the distributor a commission for its services hereunder amounting to applicable percentage of the sales price of any sales or sales contract with a customer.
/
| 15 |
| Table of Contents |
On January 14, 2020, the Company entered into an agreement with a sales consultant to further the business purpose of the Company. In consideration for the services provided by the consultant, the Consultant shall be paid a fee of ten percent ( i 10%) of each of the consultant’s sales of the Company’s product.
On October 15, 2020, the Company entered into a chocolate sales agreement with a sales consultant. The consultant will receive a commission of the gross sales (net of returns) that were directly generated by the consultant to new customers. The consultant shall receive a sales commission of the gross sales (net of returns) directly generated by the consultant to such distributor and such distributor shall receive a commission of such gross sales (net of returns). Commissions shall be paid within 30 days of the end of the quarter in which they are deemed earned. No commissions are due and no commissions have been earned as of June 30, 2022. In addition, once the consultant has made $ i 75,000 of gross sales (net of returns) he shall receive i 75,000 shares of the Company’s common stock. This agreement shall continue for sixty months from the date of the agreement and will automatically extend for additional successive sixty-month terms unless written notice is delivered at least thirty days prior to the end of the current term.
On November 9, 2020, the Company entered into an agreement with a consultant. The consultant shall provide the following services: develop a marketing plan and act as a sales agent with respect to the wholesale of various products by the Company. As compensation for the services, i the consultant shall receive a cash payment in an amount in excess of 9% of the profit margin. However, in the event the average closing price of the Company’s common stock on the common stock’s primary market over the final ten (10) trading days of any month is greater than or equal to $0.50, then the cash compensation for such month shall only be the amount of profit margin generated by the sales of the products in excess of 14% of gross sales and the amount of profit margin between 9% and 14% of gross sales shall completely belong to the Company. Prior to the payment date of each month, the consultant can elect to receive all or part of the cash compensation due for such month in the form of common stock by providing written notice of such election to the Company. The number of shares to be issued shall be calculated based upon a per share value equal to 80% of the valuation price. This agreement shall commence on the effective date and shall continue for a term of two (2) years. Prior to six months after the effective date this agreement may not be cancelled without cause. After six months this agreement may be sooner terminated by either party upon sixty days written notice. Commencing 120 days after the effective date, absent an effective registration statement by the Company covering the shares, the sales consultant may “Put” to the Company any vested shares at a price per share equal to the grant price at any time during the term. The Company shall maintain a separate account with funds to pay for the Put for as long as the Put is exercisable and the Put right shall be subject to the terms governing such account. As of June 30, 2022, the Company has recorded a Put liability of $ i 29,421. The Consultant has agreed to lower the restricted cash amount for the Put to $ i 5,900.
On November 9, 2020, the Company entered into a grant agreement with a sales consultant. As compensation for the services, the Company will issue up to three million (3,000,000) shares to the sales consultant in monthly installments over the twenty (24) month term of the agreement. The number of shares to be issued by the Company to the sales consultant on a monthly basis will be determined by the amount of net sales of various wholesale products generated by the sales consultant at the end of each month multiplied by a fixed percentage of nine percent ( i 9%) divided by the last closing market price of the shares as of the effective date. In addition to the shares to be issued, the sales consultant shall be issued three million ( i 3,000,000) warrants to purchase shares. One warrant shall be fully vested for every share issued. The exercise price of each warrant shall be equal to the grant price and each warrant shall be exercisable for thirty-six (36) months following the date of vesting. Until such time as the shares underlying the warrants are registered, the warrants may be exercised via a cashless exercise. As of June 30, 2022, there were i 2,852,009 shares of common stock and i 2,942,725 warrants remaining to be issued if certain performance thresholds are met.
On January 14, 2021, the Company entered into an agreement with a sales consultant to further the business purpose of the Company. In consideration for the services provided by the consultant, the consultant will receive a commission of the gross sales (net of returns) that were directly generated by the consultant to new customers. This agreement shall continue for sixty months from the date of the agreement and will automatically extend for additional successive sixty-month terms unless written notice is delivered at least thirty days prior to the end of the current term.
| 16 |
| Table of Contents |
On January 4, 2022, the Company entered into a grant agreement with a sales consultant. As compensation for the services, the Company will issue up to 2,380,952 shares of restricted common stock to the sales consultant in monthly installments over the twenty (24) month term of the agreement. The number of shares to be issued by the Company to the sales consultant on a monthly basis will be determined by the amount of net sales of products generated by the sales consultant at the end of each month multiplied by a fixed percentage of 5% divided by the last closing market price of the shares as of the effective date. Additionally, if the sales consultant makes sales using salespeople who are not under contract with the Company, the Company will pay the consultant a cash commission at the end of each month equal to i 5% of net sales over the term. During the three and six months ended June 30, 2022 no shares have been issued.
On March 2, 2022, the Company entered into two agreements with two consultants to further the business purpose of the Company. In consideration for the services provided by the consultants, the consultants will receive a 10% commission of the gross sales (net of returns) that were directly generated by the consultants to new customers. This agreement shall continue for sixty months from the date of the agreement and will automatically extend for additional successive sixty-month terms unless written notice is delivered at least thirty days prior to the end of the current term.
On March 23, 2022, the Company entered into a grant agreement with a sales consultant. As compensation for the services, i the Company will issue up to i 2,083,333 shares of restricted common stock to the sales consultant in monthly installments over the twenty (24) month term of the agreement. The number of shares to be issued by the Company to the sales consultant on a monthly basis will be determined by the amount of net sales of products generated by the sales consultant at the end of each month multiplied by a fixed percentage of 5% divided by the last closing market price of the shares as of the effective date / . During the three and six months ended June 30, 2022 no shares have been issued.
On April 11, 2022, the Company entered into a memo of understanding with a marketing consultant, who is a National Football League (NFL) celebrity. As compensation for the services, the Company agrees to split the net profit on a 50 / 50 basis derived from the sales of the Company’s products that will be branded under the consultant’s name and result from the marketing consultant’s efforts. The marketing consultant will be paid on a quarterly basis over the two (2) year term.
Commission costs for the six months ending June 30, 2022 and 2021, were $ i 0 and $ i 34,986, respectively. Commission costs for the three months ending June 30, 2022 and 2021, were $ i 0 and $ i 33,848, respectively. These expenses are included in general and administrative expenses on the accompanying unaudited condensed consolidated statements of operations. As of June 30, 2022 and December 31, 2021, there were no accrued commissions outstanding.
i
NOTE 9 – CONCENTRATION RISKS
As of June 30, 2022, the Company’s concentrations for receivables from merchant cash advances as well as income from merchant cash advances were not significant to warrant concentration risk.
As of December 31, 2021, the Company’s receivables from merchant cash advances included $ i 29,290 from one merchant, representing i 78% of the Company’s merchant cash advances. The Company earned $ i 14,949 and $ i 4,287 of MCA income from two merchants, representing i 45% and i 13%, respectively, of the Company’s MCA income for the six months ended June 30, 2021.
For the three months ended June 30, 2022, the Company had purchase concentrations of i 52%, i 29% and i 11% from three vendors. For the three months ended June 30, 2021, the Company had purchase concentrations of i 88% from two vendors.
For the six months ended June 30, 2022, the Company had purchase concentrations of i 31%, i 22%, i 17%, i 11%, and i 10% from five vendors. For the six months ended June 30, 2021, the Company had purchase concentrations of i 88% from two vendors.
/i
NOTE 10 – SUBSEQUENT EVENTS
Subsequent to the year end, the Company has extended various loans (see notes 2 and 5) and issued i 300,000 warrants to an employee (see note 6).
/
| 17 |
| Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Statements
This Form 10-Q contains “forward-looking statements,” as that term is used in federal securities laws, about First Foods Group, Inc.’s financial condition, results of operations and business.
These statements include, among others:
· | statements concerning the potential benefits that First Foods Group, Inc. (“First Foods”, “we”, “our”, “us”, the “Company”, or “management”) may experience from its business activities and certain transactions it contemplates or has completed; and |
| |
· | statements of First Foods’ expectations, beliefs, future plans and strategies, anticipated developments and other matters that are not historical facts. These statements may be made expressly in this Form 10-Q. You can find many of these statements by looking for words such as “believes,” “expects,” “anticipates,” “plans”, “estimates,” “opines,” or similar expressions used in this Form 10-Q. These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause First Foods’ actual results to be materially different from any future results expressed or implied by First Foods in those statements. The most important facts that could prevent First Foods from achieving its stated goals include, but are not limited to, the following: |
| (a) | volatility or decline of First Foods’ stock price; |
| (b) | potential fluctuation of quarterly results; |
| (c) | include failure of First Foods to earn significant revenues or profits; |
| (d) | inadequate capital to continue or expand its business, and inability to raise additional capital or financing to implement its business plans; |
| (e) | decline in demand for First Foods’ products and services; |
| (f) | rapid adverse changes in markets; due to, among other things, international conflicts, terrorism, environmental issues, world and national health issues, and inflation; |
| (g) | litigation with or legal claims and allegations by outside parties against First Foods, including but not limited to challenges to First Foods’ intellectual property rights; |
| (h) | reliance on proprietary merchant advance credit models, which involve the use of qualitative factors that are inherently judgmental and which could result in merchant defaults; and |
| (i) | new regulations impacting the business. |
There is no assurance that First Foods will be profitable, due to, among other potential reasons, that it may (i) not be able to successfully develop, manage or market its products and services; attract or retain qualified executives and personnel; or obtain customers for its products or services, (ii) incur additional dilution in outstanding stock ownership due to the issuance of more shares, warrants, stock options or other convertible securities, or the exercise of outstanding warrants and stock options, and (iii) suffer other risks inherent in its business.
Because the forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. First Foods cautions you not to place undue reliance on the statements, which speak only of management’s plans and expectations as of the date of this Form 10-Q. The cautionary statements contained or referred to in this section should be considered in connection with any subsequent written or oral forward-looking statements that First Foods or persons acting on its behalf may issue. First Foods does not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this Form 10-Q, or to reflect the occurrence of unanticipated events.
| 18 |
| Table of Contents |
General
First Foods is currently a “smaller reporting company” under the JOBS Act. A company loses its “smaller reporting company” status on (i) the day its public float becomes greater than or equal to $250,000,000 or (ii) had annual revenues of less than $100,000,000 and either: (A) had no public float or (B) had a public float of less than $700,000,000. As a “smaller reporting company” First Foods is exempt from certain obligations of the Exchange Act, including those found in Section 14A(a) and (b) related to shareholder approval of executive compensation and golden parachute compensation and Section 404(b) of the Sarbanes-Oxley Act of 2002 related to the requirement that management assess the effectiveness of the Company’s internal control for financial reporting. Furthermore, Section 103 of the JOBS Act provides that as a “smaller reporting company” First Foods is not required to comply with the requirement to provide an auditor’s attestation of ICFR under Section 404(b) of the Sarbanes-Oxley Act for as long as First Foods qualifies as a “smaller reporting company.” In addition, a “smaller reporting company” may include less extensive narrative disclosure than required of other reporting companies, particularly in the description of executive compensation and provide audited financial statements for two fiscal years, in contrast to other reporting companies, which must provide audited financial statements for three fiscal years. However, a “smaller reporting company” is not exempt from the requirement to perform management’s assessment of internal control over financial reporting.
First Foods is focused on developing its specialty chocolate product line through its Holy Cacao subsidiary, participating in merchant cash advances (“MCAs”) through its 1st Foods Funding Division, and introducing new health-related brands, concepts and products through its FFGI Wholesaling Division.
Holy Cacao is a majority owned subsidiary that is dedicated to producing, packaging, distributing and selling specialty chocolate products, including specialty chocolate products infused with a hemp-based ingredient in accordance with the Company’s understanding of the Agricultural Act of 2014 (the “2014 Farm Bill”) and/or the Agriculture Improvement Act of 2018 (the “2018 Farm Bill,” and together with the 2014 Farm Bill, collectively, the “Farm Bill”), which renders the production of hemp in compliance with the provisions of the Farm Bill federally lawful. The Company has not been, is not, and has no current plans to be involved in producing, packaging, distributing or selling any product that is infused with a still illegal marijuana-based ingredient such as THQ, although it intends to revisit the matter if regulations change in jurisdictions in which it operates.
The Company is also dedicated to licensing its intellectual property (“IP”) including its name, brand, and packaging, to third parties. The Company may license its IP to third parties that may produce, package, and distribute hemp-based products pursuant with the Company’s understanding of the Farm Bill. The Company may license its IP to third parties that may produce, package, and distribute marijuana-based products, but only as such licensing is legal. Holy Cacao holds four trademarks for the brands, “The Edibles Cult”, “Purely Irresistible”, “Mystere” and “Southeast Edibles”.
The Company also has a contract with TIER Merchant Advances LLC (“TIER”) to participate in the purchase of future receivables from qualified TIER merchants.
The Company’s common stock is quoted on the OTCQB under “FIFG.”
The Company’s principal executive offices are located at First Foods Group, Inc. c/o Incorp Services, Inc., 3773 Howard Hughes Parkway, Suite 500S, Las Vegas, NV 89169-6014. Our telephone number is (201) 471-0988.
As of June 30, 2022, our cash balance was $22,214, which includes restricted cash of $5,900, and our current liabilities were $4,502,049.
Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We monitor our estimates on an on-going basis for changes in facts and circumstances, and material changes in these estimates could occur in the future. Changes in estimates are recorded in the period in which they become known. We base our estimates on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from our estimates, if past experience or other assumptions do not turn out to be substantially accurate.
| 19 |
| Table of Contents |
Results of Operations for the Three Months Ended June 30, 2022 compared to the Three Months Ended June 30, 2021
Total net sales decreased 74% or $183,635 during the three months ended June 30, 2022 compared to 2021, primarily due to the Company discontinuing its wholesaling division and phasing out the merchant cash advance division to focus and dedicate resources to the chocolate producing division of the Company.
Products Performance
The following table shows net sales by category for the three months ended June 30, 2022 and 2021:
|
| 2022 |
|
| Change |
|
| 2021 |
| |||
Net sales by category: |
|
|
|
|
|
|
|
|
| |||
Chocolate products |
| $ | 63,877 |
|
|
| -73 | % |
| $ | 240,439 |
|
Merchant cash advances |
|
| 29 |
|
|
| -99 | % |
|
| 7,102 |
|
Total net sales |
| $ | 63,906 |
|
|
| -74 | % |
| $ | 247,541 |
|
Chocolate products
Chocolate products sales decreased during 2022 compared to 2021 due primarily to increased supply chain costs and a decrease in marketing and advertising.
Merchant cash advances
Merchant cash advances sales decreased during 2022 compared to 2021 due to the Company focusing upon and dedicating resources to the chocolate producing division of the Company.
Cost of Product Sales
Products cost of sales for the three months ended June 30, 2022 and 2021 were as follows:
|
| 2022 |
|
| 2021 |
| ||
Cost of Product Sales: |
|
|
|
|
|
| ||
Chocolate products |
| $ | 37,993 |
|
| $ | 162,343 |
|
Cost of product sales
The decrease in cost of product sales in June 30, 2022 as compared to June 30, 2021 was due to a decrease in product sales.
Legal fees for the three months ended June 30, 2022 was $27,949 compared to $2,097 for the three months ended June 30, 2021. This increase in legal fees was due to increased legal rates and legal consultations for potential deals that were passed on.
General and administrative expenses for the three months ended June 30, 2022 was $335,493 compared to $446,423 for the three months ended June 30, 2021. The decrease in general and administrative expenses was primarily due to decreased costs associated with compensation expenses, and consulting and accounting fees.
| 20 |
| Table of Contents |
Provision for merchant cash advances for the three months ended June 30, 2022 was $37,145 compared to $(6,840) for the three months ended June 30, 2021. The increase in provision for merchant cash advances was due to the Company updating its reserves to accurately reflect its current merchant cash advances positions.
Impairment of assets expense for the three months ended June 30, 2022 was $92,736. The company has not realized cash flows sufficient to overcome an asset impairment and is, therefore, estimating an impairment of 50% of its asset carrying value. There was no impairment expense for the three months ended June 30, 2021.
Results of Operations for the Six Months Ended June 30, 2022 compared to the Six Months Ended June 30, 2021
Total net sales decreased 73% or $211,168 during the six months ended June 30, 2022 compared to the six months ended June 30, 2021, primarily due to the Company discontinuing its wholesaling division and phasing out the merchant cash advance division to focus and dedicate resources to the chocolate producing division of the Company.
Products Performance
The following table shows net sales by category for the six months ended June 30, 2022 and 2021:
|
| 2022 |
|
| Change |
|
| 2021 |
| |||
Net sales by category: |
|
|
|
|
|
|
|
|
| |||
Chocolate products |
| $ | 78,334 |
|
|
| -69 | % |
| $ | 256,464 |
|
Merchant cash advances |
|
| 377 |
|
|
| -99 | % |
|
| 33,415 |
|
Total net sales |
| $ | 78,711 |
|
|
| -73 | % |
| $ | 289,879 |
|
Chocolate products
Chocolate products sales decreased during the six months ended June 30, 2022 compared to the six months ended June 30, 2021 due primarily to increased supply chain costs and a decrease in marketing and advertising.
Merchant cash advances
Merchant cash advances sales decreased during the six months ended June 30, 2022 compared to the six months ended June 30, 2021 due to the Company focusing upon and dedicating resources to the chocolate producing division of the Company.
Cost of Product Sales
Products cost of sales for the six months ended June 30, 2022 and 2021 were as follows:
|
| 2022 |
|
| 2021 |
| ||
Cost of Product Sales: |
|
|
|
|
|
| ||
Chocolate products |
| $ | 40,474 |
|
| $ | 166,084 |
|
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Cost of product sales
The decrease in cost of product sales in June 30, 2022 as compared to June 30, 2021 was due to a decrease in product sales.
Legal fees for the six months ended June 30, 2022 was $29,098 compared to $3,096 for the six months ended June 30, 2021. This increase in legal fees was due to increased legal rates and legal consultations for potential deals that were passed on.
General and administrative expenses for the six months ended June 30, 2022 was $739,978 compared to $933,810 for the six months ended June 30, 2021. The decrease in general and administrative expenses was primarily due to decreased costs associated with compensation expenses, and consulting and accounting fees.
Provision for merchant cash advances for the six months ended June 30, 2022 was $36,799 compared to $(144,338) for the six months ended June 30, 2021. The increase in provision for merchant cash advances was due to the Company updating its reserves to accurately reflect its current merchant cash advances positions.
Impairment of assets expense for the six months ended June 30, 2022 was $92,736. The company has not realized cash flows sufficient to overcome an asset impairment and is, therefore, estimating an impairment of 50% of its asset carrying value. There was no impairment expense for the six months ended June 30, 2021.
Liquidity and Capital Resources
The following table presents our cash flows:
|
| Six Months Ended |
| |||||
|
|
| ||||||
|
| 2022 |
|
| 2021 |
| ||
Net cash used in operating activities |
| $ | (237,313 | ) |
| $ | (64,498 | ) |
Net cash used in investing activities |
| $ | - |
|
| $ | (877 | ) |
Net cash provided by financing activities |
| $ | 248,000 |
|
| $ | 207,261 |
|
Operating Activities
Our primary uses of cash from our operating activities include payments for compensation and related costs and other general corporate expenditures.
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| Table of Contents |
Net cash used in operating activities increased from the six months ended June 30, 2021 to the six months ended June 30, 2022 primarily due to the net effect of a decrease in cash received from a decrease in revenues and cash paid for cost of revenues and operating expenses, changes in operating assets and liabilities, decrease in stock compensation, increase in accumulative catch up adjustment and impairment of assets, and change in merchant allowance.
Investing Activities
There was no investing activities for the six months ended June 30, 2022.
Financing Activities
Cash provided by financing activities consists of proceeds from issuance of debt.
Net cash provided by financing activities increased from the six months ended June 30, 2021 to the six months ended June 30, 2022 primarily due to a decrease in repayment of loans.
Going Concern
The Company’s unaudited condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.
The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
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In order to continue as a going concern, the Company will need, among other things, additional capital resources. As of June 30, 2022, the Company had approximately $1,364,000 in third-party short-term debt and approximately $3,100 in associated debt discount and approximately $708,000 in related-party short-term debt and $0 in associated debt discount that is due within the next twelve months. Management’s plan is to increase revenue, obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its operating expenses and seeking equity and/or debt financing. However, neither any members of management nor any significant shareholders are currently committed to invest funds with us and; therefore, we cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The Company does not have sufficient cash flow for the next twelve months from the issuance of these unaudited condensed consolidated financial statements. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Concentration Risks
As of June, 2022, the Company's concentrations for receivables from merchant cash advances as well as income from merchant cash advances were not significant to warrant concentration risk.
As of December 31, 2021, the Company’s receivables from merchant cash advances included $29,290 from one merchant, representing 78% of the Company’s merchant cash advances. The Company earned $14,949 and $4,287 of MCA income from two merchants, representing 45% and 13%, respectively, of the Company’s MCA income for the six months ended June 30, 2021.
For the three months ended June 30, 2022, the Company had purchase concentrations of 52%, 29% and 11% from three vendors. For the three months ended June 30, 2021, the Company had purchase concentrations of 88% from two vendors.
For the six months ended June 30, 2022, the Company had purchase concentrations of 31%, 22%, 17%, 11%, and 10% from five vendors. For the six months ended June 30, 2021, the Company had purchase concentrations of 88% from two vendors.
Off-Balance Sheet Arrangements
No off-balance sheet arrangements exist.
Contractual Obligations
None.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s principal executive officer and principal financial officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and includes those policies and procedures that:
| 1. | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
| 2. | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and |
| 3. | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
The Company’s management, including the chief executive officer and chief financial officer, do not expect that its disclosure controls or internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
As of June 30, 2022, management has not completed an effective assessment of the Company’s internal controls over financial reporting based on the 2013 Committee of Sponsoring Organizations (COSO) framework. Management has concluded that, during the period covered by this report, our internal controls and procedures were not effective to detect the inappropriate application of U.S. GAAP. Management identified the following material weaknesses set forth below in our internal control over financial reporting.
| 1. | We lack the necessary corporate accounting resources to maintain adequate segregation of duties. |
| 2. | We did not perform an effective risk assessment or monitor internal controls over financial reporting. |
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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As of June 30, 2022, we were not a party to any legal proceedings that could have a material adverse effect on the Company’s business, financial condition or operating results. Further, to the Company’s knowledge, no such proceedings have been threatened against the Company.
We are not obligated to disclose our risk factors in this report; however, information regarding our risk factors appears in various places in this Quarterly Report and in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2021. Except as described below, there have been no material changes from the risk factors previously disclosed in such Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The Company issued 60,000 shares of the Company’s common stock during the six months ended June 30, 2022. All of these shares were exempt pursuant to Section 4(1) as they were issued privately without any advertising or finders/brokers fees paid to third parties.
Item 3. Defaults Upon Senior Securities
There have been no defaults upon senior securities.
Item 4. Mine Safety Disclosures
Not applicable.
Not Applicable
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(a) Exhibits
Item 6. Exhibits, Financial Statement Schedules
| ||
| ||
| Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| ||
| ||
101.INS |
| Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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 Labels Linkbase Document. |
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
104 |
| Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
___________
(1) | Filed as an Exhibit to the Form S-1, filed by First Foods Group, Inc. on August 10, 2015, and incorporated herein by reference. |
| 27 |
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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
By: |
| Dated: August 22, 2022 | |
| |||
| Chairman of the Board and | ||
| Interim Chief Executive Officer | ||
|
| ||
By: | /s/ Mark J. Keeley |
| Dated: August 22, 2022 |
| |||
| Chief Financial Officer |
| 28 |
| This ‘10-Q’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 1/1/23 | ||||
| 12/31/22 | ||||
| 12/15/22 | ||||
| Filed on: | 8/22/22 | |||
| 8/19/22 | ||||
| 8/4/22 | ||||
| 8/1/22 | ||||
| For Period end: | 6/30/22 | NT 10-Q | ||
| 4/14/22 | 10-K | |||
| 4/11/22 | ||||
| 3/31/22 | 10-Q, NT 10-K, NT 10-Q | |||
| 3/23/22 | ||||
| 3/21/22 | ||||
| 3/2/22 | ||||
| 1/4/22 | ||||
| 1/1/22 | ||||
| 12/31/21 | 10-K, NT 10-K | |||
| 12/15/21 | ||||
| 8/4/21 | ||||
| 6/30/21 | 10-Q | |||
| 3/31/21 | 10-Q | |||
| 1/14/21 | ||||
| 12/31/20 | 10-K | |||
| 11/9/20 | ||||
| 10/15/20 | ||||
| 8/4/20 | ||||
| 7/7/20 | ||||
| 6/23/20 | ||||
| 1/14/20 | ||||
| 10/10/19 | ||||
| 8/14/19 | ||||
| 7/16/18 | ||||
| 2/27/17 | 8-K | |||
| 8/10/15 | S-1 | |||
| List all Filings | ||||
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 8/10/15 First Foods Group, Inc. S-1 10:1M Discount Edgar/FA |