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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

(Mark One)

x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 2022

 

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

 

For the transition period from ________________ to _______________

 

333-226801

(Commission file number)

 

TEO FOODS INC.

 (Exact name of registrant as specified in its charter)

 

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

                                                                                                 

Blvd Insurgentes 19801, unit 4-B

 Tijuana, BC, 22225

(619) 758 1973

 (Address and telephone number of principal executive offices)

 

 (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 Name of each exchange on which registered
None None None

 

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o     No x

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.  Yes x    No o

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x     No o

 

 

 

 
 

 

 

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

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in the definitive proxy or information statement incorporated by reference in Part III of this Form 10-K or, any amendment to Form 10-K. Yes x No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company.  See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer o Accelerated filer o
Non-accelerated filer o Smaller reporting company x
  Emerging growth company o

 

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 o

 

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

 

The aggregate market value of the voting and non-voting common equity held by non-affiliates as of June 30, 2022, was $1,072,691.

 

As of April 17, 2023, there were 13,071,957 shares of the registrant’s common stock outstanding.

 

 
 

 

 TEO Foods Inc.

Index

 

        Page  
Number
PART I.   FINANCIAL INFORMATION        
             
Item 1.   Description of Business     3  
             
Item 1A.   Risk Factors     8  
             
Item 1B.   Unresolved Staff Comments     8  
             
Item 2.   Properties     8  
             
Item 3.   Legal Proceedings     8  
             
Item 4.   Mine Safety Disclosures     8  
             
PART II.            
             
Item 5.   Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities     9  
             
Item 6.   [Reserved]     9  
             
Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations     10  
             
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk     15  
             
Item 8.   Financial Statements and Supplementary Data     F-1  
             
Item 9.   Changes in and Disagreements With Accountants on Accounting and Financial Disclosure     16  
             
Item 9A.   Controls and Procedures     16  
             
Item 9B.   Other Information     16  
             
Item 9C.   Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.     16  
             
PART III.            
             
Item 10.   Directors, Executive Officers and Corporate Governance     17  
             
Item 11.   Executive Compensation     19  
             
Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters     20  
             
Item 13.   Certain Relationships and Related Transactions, and Director Independence     20  
             
Item 14.   Principal Accounting Fees and Services     20  
             
PART IV.            
Item 15.   Exhibits and Financial Statement Schedules     22  
             
Item 16.   Form 10K Summary     22  
             
SIGNATURES         23  

 

2 
 

 

 

FORWARD LOOKING STATEMENTS

 

This Annual Report on Form 10-K (including the section regarding Management's Discussion and Analysis and Results of Operation) contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this Annual Report on Form 10-K. Additionally, statements concerning future matters are forward-looking statements.

 

Although forward-looking statements in this Annual Report on Form 10-K reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including but not limited to, our ability to obtain necessary equity or debt financing to continue operations, and ultimately our ability to generate profit from sales of packaged food products. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K.

 

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Annual Report on Form 10-K, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this Annual Report.

 

PART I

  

Item 1.  Description of Business.

 

General

Teo Foods Inc. ("TEO Foods" or the "Company") produces and sells packaged food and beverage products for retail in the frozen, refrigerated and shelf stable categories. We utilize our production capacities for our own brands and to co-pack for other brands sold domestically and in Mexico. We are also working to commercialize a novel sterilization system for packaged food products that is intended to improve food quality and extended shelf life. We operate from our processing and packaging facilities in Tijuana Mexico.

The Company created a new subsidiary, BC TEO Foods S.A de C.V., (“BC TEO”) in January 2020, which is operating our facilities in Tijuana Mexico where we have our processing and packaging equipment. The facilities have been remodeled for higher productivity and to achieve a high food safety certification in support of access to global markets. The TEO Pasteurizer/Sterilizer was also transferred to the facilities for final R&D and validation for production.

 

We have been working to develop business that is diverse. We provide logistics services including cold and dry storage in our warehouse.

 

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

 

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

 

Our facility benefits from its close proximity to the California border crossings into San Diego, low labor rates, low commercial lease rates and the ease of manufacturing for export due to the U.S.-Mexico-Canada (USMCA) Trade Agreement. We have reception, conference and administration offices. The combined suites are adjoining with forklift access internally between all 38,000 square feet and truck loading bays.

We will continue to develop our products for placements in Mexico and export to the USA. We believe that expanding our operations to include alcoholic and non-alcoholic beverages will also support the development of trayed meal products for final R&D and validation for production of the TEO Pasteurizer/Sterilizer. This assumes that we are able to secure additional capital to acquire the necessary equipment, supplies and staff.

 

We will maintain a website located at www.teofoods.com, and electronic copies of our filings with the SEC will be available on our website as soon as practicable after such material is filed with, or furnished to, the SEC.

 

Product Overview

Our product offering for processing on the TEO Pasteurizer/Sterilizer will be single serve and multi-serve entrees and side dishes focusing on convenience items that drive superior margins.  We will offer varying levels of vegetarian, organic, all natural, ethnic and home-style entrees that command a premium price in the market place.  Each meal will contain a starch and multiple vegetables with an exquisite sauce to compliment the meal.  Sauce quality will help us differentiate our products along with our unique production process. The vegetables will be high quality vegetables such as broccoli florets with no stems.  (Example: Teriyaki Rice Bowl with Vegetables or Home Style Garlic Mashed Potatoes).  The meals will have universal appeal but will also target specific demographic groups such as vegetarians and consumers who value organic meals. This type of product was selected based on current trends, our unique production process and handling requirements needed to process USDA meat components. Secondarily, these products are expected to have higher pricing to consumers which supports the use of high-quality components and the limited initial production throughput.

 

This preliminary product mix may change prior to initial production based on additional market research and customer input.  There is a unique opportunity to market multiple products, so consumers can "mix 'n match" meal components such as buying a side dish of garlic mashed potatoes and a serving of their favorite vegetable in sauce.

 

Management will initially produce single and multi-serve entrees & side dishes that have extended shelf life in a "refrigerated" format with the long-term intent to market shelf stable meals.  The "refrigerated" status will allow us to create critical mass while simultaneously seeking Food and Drug Administration (“FDA”) approval for our new production process.

 

The total market for frozen, refrigerated and shelf stable entrees and side dishes is a very dynamic marketplace that welcomes new product ideas.  We expect the extended shelf life will be embraced by wholesale customers due to supply chain issues of refrigerated foods and the application of a pasteurization/sterilization process in this category adds a food safety component that is not provided by other products in this category.

 

 

3 
 

 

 

Benefits of the Licensed Process and Improved Products

Quality, safety and convenience are what we believe to be the primary benefits to the licensed process.

 

The process is expected to produce sterilized meals in less than 15 minutes of processing time with time at sterilization temperatures targeted to preserve quality and assure safety. Pasteurization is expected in less processing time. We believe that achieving rapid heat rise times to sterilization temperature and rapid cool time back to near ambient or refrigerated temperature will produce meals that have improved taste, texture, color and nutritional values over conventional retort sterilization methods which can subject the food to high temperatures for an hour or more.

 

Our process utilizes microwave energy to achieve rapid heating of packaged food products. Food packages are filled and sealed using standard industry systems and enter our system via conveyor. Multiple tuned cavities apply varying power levels to rapidly and evenly heat the food to the desired temperature.

 

Retort methods place the product in a steam chamber and must rely on thermal transfer of heat from the outer surfaces to reach the center. Like cooking a roast in a conventional oven, it can take a very long time for the center to reach the desired temperature.

 

Microwave energy penetrates the food and can heat throughout the product with some limitations on depth of penetration and the challenges of overheating patterns.

 

The currently licensed 200-kilowatt system we intend to use for our products is designed to process twelve-ounce rigid tray packages. The system may be utilized in different configurations to achieve different levels of pasteurization /sterilization. The tray passing through the exposure cavities is heated to the desired temperature in about two minutes.

 

We believe the quality related to pasteurized/refrigerated foods will be comparable as these products are not subjected to high sterilization temperatures for extended periods. These products have a consumer perception of being high quality, healthy and nearly fresh prepared foods. We believe our products will be of equal or better quality and have a near fresh taste.

 

Our products will have an added safety benefit over many current offerings of refrigerated and frozen products because we will have subjected the products to pasteurization/sterilization temperatures; killing off resistant microorganisms that may remain viable in many traditional frozen and refrigerated products. Consumers often put themselves to health risks by failing to heat frozen and refrigerated products to safe temperatures prior to consumption. Consumers may not realize that the frozen or refrigerated products they are purchasing may not have undergone any sterilization processes. The importance of warning labels and instructions to cook thoroughly before eating can go ignored by a consumer heating a meal hastily during a lunch break.

 

We believe retailers and consumers will benefit from our distribution as a refrigerated product due to the extended shelf life we intend to provide. Our products can be processed at sterilization temperatures and will have packaging with high barrier properties; resulting in the ability to offer longer shelf life as a refrigerated product. This can result in less waste to the retailer and better quality to the consumer throughout the shelf life of the product.

 

We believe our products will be less susceptible to distribution variables that can affect safety and quality of frozen and refrigerated products. Frozen products can thaw and refreeze several times before they are eaten by the consumer. Variation of refrigeration temperatures during distribution and at the retailers can cause safety risks and quality issues to consumers refrigerated products.

 

Once our products are approved for shelf stable distribution, we expect consumers, customers and retailers to eventually prefer the convenience of the ambient ready to eat meal versus frozen or refrigerated meals.

 

When consumers become familiar and trust our products as refrigerated, we hope to transition those products out of refrigeration where we expect consumers to embrace the convenience of a high quality, healthy, ready to eat meal. The ambient meal can be warmed in 30 to 60 seconds. A typical comparable frozen meal can require 5 minutes or more and often requires multiple steps of heating and stirring.

 

We will likely maintain distribution as refrigerated products even after we are approved for shelf stable distribution due to the negative quality perception and low price point of the existing shelf stable products in the U.S. markets.

 

4 
 

 

 

Market Overview

The global frozen food market size was valued at USD 291.3 billion in 2019. Growing importance of Ready-to-Eat (RTE) food products as a result of hectic lifestyles among working class individuals on a global level is expected to expand the industry size over the next few years. Moreover, increasing spending on shelf-stable foods among consumers is anticipated to expand the market for frozen food in the near future.

 

The frozen ready meals segment accounted for more than 30.0% of revenue share in 2019 in the frozen food market. The segment is expected to maintain its dominance over the forecast period [2020 to 2026] on account of pre-dominant consumption of ready meals among working class people around the globe.

 

Some of the manufacturers include Wawona Frozen Foods; Bellisio Foods; McCain Foods; ConAgra Foods, Inc.; General Mills, Inc.; and Nestle S.A. Industry participants have been focusing on ensuring the continuous stock access in the supermarkets and hypermarkets amid the coronavirus breakdown. In March 2020, the CEO of the Kraft Heinz Co. has officially announced that the company is working hard for filling the demand supply gap owning to the seismic changes in the food industry. The company confirmed that frozen food, macaroni, cheese, and vinegar are one of the largest selling products and their demand has been witnessing surge significantly amid coronavirus breakdown. (https://www.grandviewresearch.com/industry-analysis/frozen-food-market)

 

The global ready meals market size was valued at USD 159.15 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 5.5% from 2020 to 2027. Shifting consumers’ food preferences towards ready-to-eat food products owing to busy lifestyle of working individuals as well as hectic work schedules of college grads and students is expected to be a key factor for the market growth. Moreover, growing demand for minimally processed and additive-free food products with extended shelf life is expected to fuel the market growth.

 

In recent years, the employment has been growing across the globe, which has changed the food preferences of the consumers. Customers around the globe are more inclining towards food items that can easily be consumed without any efforts. Due to hectic work schedules, people around the globe are buying Ready-to-Eat (RTE) food products and meals, which are easy to cook and less time consuming. These consumer food preferences are propelling the demand for ready meals.

 

Frozen and chilled meals held the largest revenue share of more than 50.0% in 2019 and are expected to maintain their lead over the forecast period owing to a wide range of products with high shelf life. Frozen pizza is the most popular frozen ready meal, thereby significantly contributing to the global revenue.

 

Supermarket and hypermarket held the largest revenue share of 59.4% in 2019 and are expected to maintain their lead over the forecast period. Some of the largest chains of supermarket and hypermarket, such as Walmart, Tesco, 7Eleven, Apar, and Aldi, are expanding their stores across the globe. These market giants are increasing their product offerings in order to attract the customers. (https://www.grandviewresearch.com/industry-analysis/ready-meals-market)

 

We believe we can market long shelf life refrigerated and shelf stable Ready-to-Eat (RTE) food products and meals that capitalize on consumer trends with great nutrition, value, taste and texture.

 

5 
 

 

 

The Consumer

We expect domestic consumers to have initial reservations regarding ambient ready to eat meals. Consumers are familiar with frozen products of this type and will likely have quality, taste, health and safety concerns related to sterilization and ambient storage.

 

We will initially market our products as refrigerated. Consumers can transition to accept our ambient product through familiarity with an extended life refrigerated product.  Based on our success with consumers in the refrigerated category we envision having both refrigerated and shelf stable entrees and sides. Consumers will need to slowly transition to shelf stable entrees and sides once they gain trust in product quality.   An example of this transition in the U.S. market was the marketing of UHT soy and dairy products in the chilled section of the supermarkets. These products are shelf stable for months but required marketing in the chilled dairy section to develop sales with U.S. consumers. Slowly we saw these products moved from chilled to the shelf.

 

We expect consumers, customers and retailers to eventually prefer the convenience of the ambient ready to eat meal versus frozen or refrigerated meals. The meal can be eaten as is or heated.  We expect the most popularly used heating method will be in a common home microwave oven. Consumers are expected to enjoy a more appealing final reheated meal. The ambient meal can be warmed in 30 to 60 seconds. A typical comparable frozen meal requires 5 minutes or more and often requires multiple steps of heating and stirring.

 

Distribution

We anticipate using traditional supply chain partners to get to market. We expect to market products regionally based on our first production line. Upon regional success, we will add lines when needed to service customers on a national basis.  Management believes our biggest distribution challenge will be creating critical mass to drive reasonable supply chain costs from storage to actual frequent shipments to customers, so they have acceptable inventory turns.

 

Other foodservice, c-store, vending and military customers may also place our product and force distribution accordingly, but we will still be faced with supporting reasonable supply chain costs.

 

We will initially distribute all our products as chilled.  We have no domestic distribution agreements established at this time. We can distribute in Mexico through our subsidiary, BCTEO Foods Mexico, and our licensed Nerys brand placements in grocery and convenience stores.

 

Branding

We intend to build a new brand in refrigerated and shelf stable entrees and sides.  We will also produce private label products for other brands and retailers.

 

We will be faced with the traditional challenges of introducing, marketing and gaining consumer acceptance of food products to consumers in highly competitive markets dominated by mega companies with generationally established brand recognition.

 

Management believes by changing the technology in refrigerated and shelf stable entree product life/shelf life, it is an ideal opportunity to carve out a new branded position.  We view the use of extended refrigerated shelf life and subsequent introduction of quality long-life, high-quality shelf stable entrees as a means to establish a new brand in the market.  The benefit of refining the sterilization process is a major point of differentiation in the marketplace.  We expect to receive limited competitive response since "price" won't be a determining factor due to our extended shelf life and high quality.

 

We will brand and also offer private label to continue the current perception of "prepared on premise" with national retailers.  In other segments such as military, c-store, etc., private label may be more prevalent.

 

6 
 

 

 

Competition

We will be competing with major food companies that have substantially more resources and influence over retail placements, distribution and supply chain.

 

Mega companies like Con-Agra, Nestle, Tyson and others dominate the markets and have many brands and products competing for retail shelf space.

 

If we are able to gain a market presence with our unique products and process in the domestic refrigerated category these larger competitors could utilize their vast resources to develop and market products to compete.

 

There is room for new competitors in both refrigerated and shelf stable entrees & sides.  Frozen competitors are not expected to view us as an immediate threat due to the convenience and long life of current frozen food formats.  Once retailers embrace our product offerings due to their long shelf life and as we fine tune our process we expect competitors will then react to us more aggressively.

 

Certain Agreements

Our current agreements consist primarily of business to business agreements. These agreements enable and facilitate the introduction of our branded products into the market.

 

Royalty and License Agreement

On September 30, 2017, the Company entered into a Master Agreement with TEO Inc. ("TEO"). TEO is the founder and majority controlling shareholder of the Company. The Master Agreement provides the Company a license to use the TEO name and logo on food products it sells and to apply TEO's pasteurization/sterilization processes to its products for improved shelf life and safety. Additional provisions provide the Company production rights to TEO's pasteurizer/sterilizer and rights to lease its own system when certain sales/production increase.

 

Nerys Brand License

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

 

Research and Development

We do not engage in research and development activities as part of our business at this time. We will cooperate with TEO Inc. in its research and development of its pasteurization/sterilization technology pursuant to the terms of the Master Agreement.

 

Intellectual Property and Licenses

We have a license agreement with TEO Inc. The Master Agreement provides the Company a license to use the TEO name and logo on food products it sells and to apply TEO's pasteurization/sterilization processes to its products for improved shelf life and safety. Additional provisions provide the Company production rights to TEO's pasteurizer/sterilizer and rights to lease its own system when certain sales/production increase.

 

We do not currently hold Patent rights. We may develop certain recipes and formulae related to our products in the ordinary course of business. We may develop additional trademark and other branding related intellectual property as we launch and market our products.

 

Government Regulation

We will be producing and selling food products in the domestic and international markets. We will be required to comply with various regulations in each jurisdiction related to food safety and consumer protection. We will be required to comply with regulations related to food handling, packaging, labeling, storage and shipping. International sales will have to comply with customs regulations.

 

We intend to introduce our initial products in the refrigerated category which does not require regulatory approval. When we choose to proceed with the introduction of products in the shelf stable category we will be required to have approval from the FDA to sell our products in the United States as shelf stable.  Although, microwave sterilization technology for packaged shelf stable meals was accepted by FDA in 2010, each process and product application must be approved prior to any sales as shelf stable.

 

Obtaining these approvals can take more than a year and require extensive data and expert support to obtain an approval which with the application of any novel technology may never be granted. It was a concern for many years that any microwave-based sterilization process would ever be approved by the FDA given the challenges to validation data where many traditional temperature measurement methods are incompatible with the application of microwave energy.

 

We believe that the system production data from our sale of products in the refrigerated category will be supportive to an application to the FDA by TEO Inc. for shelf stable approval. TEO Inc. would make the determination of when to proceed with an application and bear the costs related to the application.  TEO Inc. does not have an application for shelf stable approval pending with the FDA at this time.

 

We are not currently aware of any pending regulations that would materially impact our operations.

 

7 
 

 

 

Employees

We currently have Jeffrey Mackay as CEO, President and Director and John O'Keefe as CFO and Director.

 

Jeffrey Mackay currently devotes approximately 50% of his time to the business of TEO Foods, Inc. and the remainder of his time on other business ventures.

 

John O'Keefe currently has made available approximately 10% of his time for the business of TEO Foods, Inc. based on the current business needs at this time.

 

We expect to increase our future employee levels on an as-needed basis in connection with our expected growth.

 

The Company utilizes two staffing agencies in Mexico that currently provide us with staffing as needed for production, warehouse, merchandising and administration. We currently have eight people working in Tijuana. We are planning to bring on additional workers now that we have begun production operations in the new facility.

 

Item 1A.  Risk Factors.

 

Not Applicable.

 

Item 1B. Unresolved Staff Comments.

 

Not Applicable.

 

Item 2. Properties.

 

In January of 2020, we took possession of an approximately 18,000 square foot facility located in Tijuana Mexico. The current lease rate is approximately $7,300 per month. The facility is predominantly configured for cold storage and production operations. It also has a large dry warehouse area and four truck loading docks. Office space is also included at the facility for management and accounting staff.

 

In September of 2020, we took possession of two adjoining approximately 10,000 square foot facilities located in Tijuana Mexico. The current lease rate is approximately $4,100 per month. The facilities are predominantly configured for warehouse operations and include three truck loading docks. Office space is also included at the facility.

 

We have configured the entry offices of the center unit as the main entrances for the combined facility with reception, conference and administration offices. The combined facilities are adjoining with forklift access internally between all 38,000 square feet and truck loading bays.

 

Item 3. Legal Proceedings.

 

None.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

 

8 
 

 

 

PART II

 

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

Market Information

Our Common Stock is currently listed for quotation on the OTXQB under the symbol TEOF. We have recently completed approval with Depository Trust Company (DTC), shareholders can now electronically deposit their stock. As of the date of this filing only the initial qualifying deposit has been made and no trades have occurred. There can be no assurances that a market will develop for our Common Stock.

 

Holders

As of the date of this report, an aggregate of 13,071,957 shares of common stock were issued and outstanding and held by approximately 60 holders of record.

 

Dividends

We have never paid or declared any cash dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future but rather intend to retain future earnings, if any, for reinvestment in our future business. Any future determination to pay cash dividends will be in compliance with our contractual obligations and otherwise at the discretion of the board of directors and based upon our financial condition, results of operations, capital requirements and such other factors as the board of directors deems relevant.

 

Transfer Agent

Our registrar and transfer agent is Continental Stock Transfer & Trust Company.

 

Equity Compensation Plan Information

We did not have any equity compensation plans or arrangements for any director, officer, employee and/or consultant through December 31, 2022.

 

Our Board of Directors may adopt an equity compensation plan in the future to provide common stock option grants to selected employees, non-employee directors, consultants and advisors.

 

Issuer Purchase of Securities

None.

 

Recent Sales of Unregistered Securities

 

There were no sales of unregistered equity securities during fiscal year ended December 31, 2022 and to the date of this report that were not previously reported.

 

Item 6.  [Reserved]

 

9 
 

 

 

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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

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

 

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

 

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

 

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

 

Overview

 

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

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

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

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

 

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

 

10 
 

 

 

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

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

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

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

 

Results of Operations

 

Results of Operations for the Years Ended December 31, 2022 and 2021

During the years ended December 31, 2022 and 2021, the Company had $85,759 and $64,678 in sales revenue, respectively. The increase was due to new revenue from warehousing and logistics services utilizing our cold and dry storage. During the years ended December 31, 2022 and 2021, the Company had $6,787 and $25,708 in licensing and royalty revenue, respectively. The licensing and royalty revenue for Mexico terminated during the second quarter of 2022 due to a fire in the licensee’s facility, we were notified that they have discontinued operations. We are focusing on establishing distribution relationships and providing our own products through those channels. We are also seeking co-packing opportunities from established brands. We expected sales to develop from a new licensing and distribution agreement for Nerys branded food products outside Mexico. We did not receive any royalties or sales from this agreement during the year ended 2022.

During the years ended December 31, 2022 and 2021, we had general and administrative expenses of $33,537 and $61,848, respectively. The increased amount in 2021 was primarily due to a $20,000 payment for services related to our seeking quotation on the OTC. Payroll expenses were $17,708 and $43,556 during the years ended December 31, 2022 and 2021, respectively. Payroll expense was lower due to reduced staff in Mexico but is expected to increase as we replace staff. Rent and lease expenses were $135,691 and $147,663 for the years ended December 31, 2022 and 2021, respectively. Rent and lease expenses remain relatively stable, the slight reduction was a result of no charges on one suite during the repair of damage caused by a fire in the adjacent unit. Depreciation expenses were $10,506 and $10,250 for the years ended December 31, 2022 and 2021, respectively.

Interest expense was $38,885 and $32,365 for the years ended December 31, 2022 and 2021, respectively. This interest is primarily related to notes payable.

Other expense was $2,233 and $127 for the years ended December 31, 2022 and 2021, respectively.

 

The Company's comprehensive loss for the years ended December 31, 2022 and 2021 was $351,878 and $397,450, respectively. The primary differences between the years were the increase in warehousing sales and reduced operating costs in 2022.

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

 

 

 

11 
 

 

 

Liquidity and Capital Resources

During the years ended December 31, 2022 and 2021, the Company paid $1,700 and $3,200, respectively, toward the current portion of the license fee payable. As of December 31, 2022 and 2021, we had total assets of $107,724 and $137,622, respectively. The loss of assets was primarily due to the $31,929 write off resulting from the termination of the royalty agreement. As of December 31, 2022 and 2021, we had total liabilities of $1,575,505 and $1,273,525, respectively.

 

Net cash used in operating activities for the years ended December 31, 2022 and 2021 was $156,729 and $234,071, respectively. A substantial portion of these amounts resulted from accrued salary expense due to our CEO totaling $126,000 and $85,100, respectively.

 

Net cash used in investing activities for the years ended December 31, 2022 and 2021 was $0 and $6,959, respectively. The 2021 amount was primarily property and equipment purchases.

 

Net cash provided from financing activities for the years ended December 31, 2022 and 2021 was $154,400 and $221,243, respectively. The cash provided for the year ended December 31, 2022 was primarily as loans from our CEO of $130,100. The cash provided for the year ended December 31, 2021 was primarily from the sale of common stock of $67,443 and debt of $157,000.

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

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

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

 

Off-Balance Sheet Arrangements

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

 

Going Concern

The Company’s financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has suffered recurring losses from operations and has insufficient working capital as of December 31, 2022 to develop its business plan and meet its obligation of the next 12 months. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders, the Company's ability to obtain necessary equity or debt financing to continue operations, and ultimately the Company's ability to generate profit from sales of packaged food and beverage products. These financial statements do not include any adjustments to classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Critical Accounting Policies and Estimates

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

 

 

12 
 

 

 

Basis of Presentation and Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company consolidates the financial statements of its wholly-owned subsidiaries and all intercompany transactions and account balances have been eliminated in consolidation.

 

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

 

Cash and Cash Equivalents

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

 

Foreign Currency Translation

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

 

Accounts Receivable

Accounts receivable are reported at the customers’ outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The allowance for doubtful accounts at December 31, 2022 and December 31, 2021 was approximately, $0 and $16,000, respectively.

 

Inventory and Cost of Sales

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

 

Property and Equipment

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

 

Impairment of Long-Lived and Intangible Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company uses market quotes, if available, or an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable. The Company did not recognize impairment on its long-lived assets during the periods ended December 31, 2022 or 2021. Identified intangible assets are reviewed for impairment at least annually, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company’s only intangible asset consists of the royalty agreement discussed in Note 8.

 

Convertible Debentures

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

 

 

13 
 

 

 

 

Revenue Recognition

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

 

  i. Identification of the promised goods in the contract;

 

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

 

  iii. Measurement of the transaction price, including the constraint of variable consideration;

 

  iv. Allocation of the transaction price of the performance obligations; and

 

  v. Recognition of revenue when (or as) the Company satisfies each performance obligation.

 

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

 

Use of Estimates

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

 

Fair Value of Financial Instruments

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

 

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

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

 

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

 

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

 

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

 

 

14 
 

 

 

Loss Per Share of Common Stock

Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period.  The calculation of diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.  Securities with anti-dilutive effects on net earnings (loss) per share are excluded. As of December 31, 2022 and 2021, none of the convertible preferred shares or convertible debt were included in the calculation of diluted weighted average shares as they were anti-dilutive. As of December 31, 2022 and 2021, preferred shares convertible to 90,229,000 common shares were included in the diluted weighted average shares; however, notes convertible into a maximum of 1,727,500 common shares were excluded from the calculation of loss per common share as the notes are anti-dilutive. As of December 31, 2022 and 2021, common shares outstanding totaled 13,070,957 and 12,971,957, respectively.

 

Accounting Pronouncements Recently Adopted and Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Under this new guidance, lessees (including lessees under leases classified as finance leases, which are to be classified based on criteria similar to that applicable to capital leases under current guidance, and leases classified as operating leases) will recognize a right-to-use asset and a lease liability on the balance sheet, initially measured as the present value of lease payments under the lease. Under current guidance, operating leases are not recognized on the balance sheet. However, the new guidance permits companies to make an accounting policy election not to apply the recognition provisions of the new guidance to short term leases (leases with a lease term of 12 months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise). If this election is made, lease payments under short term leases will be recognized on a straight-line basis over the lease term. The Company has adopted the new guidance effective January 1, 2019: however, there was no impact to the financial statements. 

 

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

 

Not applicable.

 

 

15 
 

 

 

Item 8.  Financial Statements and Supplementary Data.

 

INDEX TO FINANCIAL STATEMENTS

 

  Page
Report of Independent Registered Public Accounting Firm F - 2
Consolidated Balance Sheets as of December 31, 2022 and 2021 F - 3
Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2022 and 2021 F - 4
Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021 F - 5
Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 2022 and 2021 F - 6
Notes to Consolidated Financial Statements F - 7

 

 

 

F-1 
 

 

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB #3289)

To the Board of Directors and Stockholders of TEO Foods Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of TEO Foods Inc. (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive loss, stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2022, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3, the Company has incurred net losses and has had insufficient working capital since inception. These factors, and the need for additional financing in order for the Company to meet its business plans, raise substantial doubt about the Company’s ability to continue as a going concern. Our opinion is not modified with respect to that matter.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.

/s/ & Accell Audit Compliance, P.A.

 

We have served as the Company’s auditor since 2019. PCAOB Firm ID# 3289

Tampa, Florida

April 17, 2023

 

3001 N. Rocky Point Dr. East Suite 200 i Tampa, Florida 33607 i 813.367.3527

 

F-2 
 

 

TEO Foods, Inc. 
CONSOLIDATED BALANCE SHEETS

       
   December 31,
   2022  2021
Assets      
Current assets          
Cash and cash equivalents  $657   $7,555 
Accounts receivable, net   25,924    5,976 
License and royalty income receivable         6,097 
Inventories, net         2,072 
Taxes receivable, net   37,563    29,726 
Prepaid and other assets   13,303    13,483 
Total current assets   77,447    64,909 
           
Property and equipment, net   30,278    40,784 
Royalty agreement         31,929 
           
Total assets  $107,725   $137,622 
           
Liabilities and stockholders' deficit          
Current liabilities          
Accounts payable and accrued expenses  $370,072   $202,492 
Related party advances   130,100       
License fee payable - related party   629,833    631,533 
Notes payable   100,000    100,000 
Convertible note payable - current portion   345,500    339,500 
Total current liabilities   1,575,505    1,273,525 
           
Total liabilities   1,575,505    1,273,525 
           
Commitments and contingencies (Note 12)        
           
Stockholders' deficit          
Preferred stock, $0.001 par value, 10,000,000 shares authorized, 9,022,900 shares issued and outstanding  9,023   9,023 
Common stock , $0.001 par value, 490,000,000 shares authorized,13,071,957 and 12,971,957, issued and outstanding, respectively   13,072    12,972 
Additional paid-in-capital   1,176,635    1,156,735 
Accumulated deficit   (2,661,744)   (2,314,436)
Other comprehensive loss   (4,766)   (197)
Total stockholders' deficit   (1,467,780)   (1,135,903)
           
Total liabilities and stockholders' deficit  $107,725   $137,622 

 

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

F-3 
 

 

TEO Foods, Inc
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

       
   For the Years ended December 31,
   2022  2021
       
Sales  $85,759   $64,678 
Cost of sales         (3,277)
Gross profit   85,759    61,401 
           
Operating expense          
Payroll   17,708    43,556 
General and administrative   33,537    61,848 
Rent and lease   135,691    147,663 
Professional fees   169,366    188,553 
Depreciation   10,506    10,250 
Total operating expenses   366,808    451,870 
           
Operating loss   (281,049)   (390,469)
           
Other income (expense)          
Licensing and royalty income   6,787    25,708 
Loss on Royalty Agreement   (31,929)     
Interest expense   (38,885)   (32,365)
Other income (expense)   (2,233)   (127)
Total other income (expense)   (66,260)   (6,784)
           
Net loss   (347,309)   (397,253)
           
Foreign currency translation adjustment   (4,569)   (197)
Comprehensive loss  $(351,878)  $(397,450)
           
Loss per common share -          
basic and diluted  $(0.03)  $(0.03)
           
Weighted average common          
shares outstanding - basic and diluted   13,071,957    12,784,673 

 

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

 

F-4 
 

 

TEO Foods Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS

       
   For the Years  ended December 31,
   2022  2021
       
Cash flows from operating activities          
Net loss  $(347,309)  $(397,253)
Adjustments to reconcile net loss to net Cash provided (used) in operations:          
Depreciation expense   10,506    10,250 
Stock compensation expense         5,000 
Bad debt expense            
Loss on royalty agreement   31,929       
Changes in operating assets and liabilities:          
Accounts receivable   (19,948)   9,766 
License and royalty income receivable   6,097    1,860
Inventories   2,072    5,308 
Tax receivable   (7,837)   (18,397)
Prepaid and other assets   181    (182)
Accounts payable and accrued expenses   167,580    149,577 
Net cash provided by (used) in operating activities   (156,729)   (234,071)
           
Cash flows from investing activities          
Purchase of property and equipment         (6,959)
Net cash (used) in investing activities         (6,959)
           
Cash flows from financing activities          
Proceeds from related party advances   130,100       
Proceeds from issuance of common stock   20,000    67,443 
Proceeds from convertible notes payable   6,000    157,000 
Payment of deemed dividend to Teo Inc. for license   (1,700)   (3,200)
Net cash provided by in financing activities   154,400    221,243 
           
Effect of foreign currency exchange translation   (4,569)   (197)
           
Net change for period  (6,898)   (19,984)
Cash and cash equivalents at beginning of period   7,555    27,539 
Cash and cash equivalents at end of period  $657   $7,555 
           
Supplement Information:          
Cash paid for:          
Interest  $     $   
Taxes  $     $   

 

 

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

 

 

F-5 
 

 

TEO Foods, Inc.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

 

                         
               Additional     Other   
   Preferred Stock  Common Stock  Paid-in  Accumulated  Comprehensive   
   Shares  Amount  Shares  Amount  Capital  deficit  Loss  Total
                         
Balance - December 31, 2020   9,022,900   $9,023    12,622,245   $12,623   $277,229   $(1,917,183)  $(428)  $(1,618,736)
Capital contribution for disposal of Targa   —            —            769,912          428    770,340 
Sale of common stock   —            337,212    337    67,106                67,443 
Conversion of notes   —            187,500    187    37,313                37,500 
Stock cancelled   —            (200,000)   (200)   200                   
Compensation common stock   —            25,000    25    4,975                5,000 
Foreign currency translation adjustment   —            —                        (197)   (197)
Net loss   —            —                  (397,253)         (397,253)
Balance - December 31, 2021   9,022,900   $9,023    12,971,957   $12,972   $1,156,735   $(2,314,436)  $(197)  $(1,135,903)
Sale of common stock   —            100,000    100    19,900                20,000 
Foreign currency translation adjustment   —            —                        (4,569)   (4,569)
Net loss   —            —                  (347,309)         (347,309)
Balance - December 31, 2022   9,022,900   $9,023    13,071,957   $13,072   $1,176,635   $(2,661,745)  $(4,766)  $(1,467,780)

 

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

 

F-6 
 

 

TEO Foods Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022 AND 2021

 

 

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

 

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

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

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

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation and Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company consolidates the financial statements of its wholly-owned subsidiaries and all intercompany transactions and account balances have been eliminated in consolidation.

 

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

 

Cash and Cash Equivalents

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

 

Foreign Currency Translation

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

 

Accounts Receivable

Accounts receivable are reported at the customers’ outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The allowance for doubtful accounts at December 31, 2022 and December 31, 2021 was approximately, $0 and $16,000, respectively.

 

Inventory and Cost of Sales

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

 

Property and Equipment

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

 

 

F-7 
 

 

 

Impairment of Long-Lived and Intangible Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company uses market quotes, if available, or an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable. The Company did not recognize impairment on its long-lived assets during the periods ended December 31, 2022 or 2021. Identified intangible assets are reviewed for impairment at least annually, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company’s only intangible asset consists of the royalty agreement discussed in Note 7.

 

Convertible Debentures

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

 

Revenue Recognition

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

 

  i. Identification of the promised goods in the contract;

 

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

 

  iii. Measurement of the transaction price, including the constraint of variable consideration;

 

  iv. Allocation of the transaction price of the performance obligations; and

 

  v. Recognition of revenue when (or as) the Company satisfies each performance obligation.

 

 

F-8 
 

 

 

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

 

Use of Estimates

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

 

Fair Value of Financial Instruments

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

 

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

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

 

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

 

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

 

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

 

 

F-9 
 

 

 

Loss Per Share of Common Stock

Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period.  The calculation of diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.  Securities with anti-dilutive effects on net earnings (loss) per share are excluded. As of December 31, 2022 and 2021, none of the convertible preferred shares or convertible debt were included in the calculation of diluted weighted average shares as they were anti-dilutive.

 

As of December 31, 2022 and 2021, preferred shares convertible to 90,229,000 common shares were included in the diluted weighted average shares; however, notes convertible into a maximum of 1,727,500 and 1,697,500 common shares, respectively, were excluded from the calculation of loss per common share as the notes are anti-dilutive. As of December 31, 2022 and 2021, common shares outstanding totaled 13,071,957 and 12,971,957, respectively.

 

Leases

In February 2016, the FASB issued ASU No. 2016-02, Under this new guidance, lessees (including lessees under leases classified as finance leases, which are to be classified based on criteria similar to that applicable to capital leases under current guidance, and leases classified as operating leases) will recognize a right-to-use asset and a lease liability on the balance sheet, initially measured as the present value of lease payments under the lease. Under current guidance, operating leases are not recognized on the balance sheet. However, the new guidance permits companies to make an accounting policy election not to apply the recognition provisions of the new guidance to short term leases (leases with a lease term of 12 months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise). If this election is made, lease payments under short term leases will be recognized on a straight-line basis over the lease term. The Company has adopted the new guidance effective January 1, 2019: however, there was no impact to the financial statements.

 

NOTE 3 – GOING CONCERN

 

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has suffered recurring losses from operations and has insufficient working capital as of December 31, 2022 to develop its business plan and meet its obligation of the next 12 months. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders, the Company's ability to obtain necessary equity or debt financing to continue operations, and ultimately the Company's ability to generate profit from sales of packaged food products. These consolidated financial statements do not include any adjustments to classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company plans to obtain funds for operations through continued financial support from its stockholders, debt and private offerings of its equity.

 

 

 

 

F-10 
 

 

 

NOTE 4 – INVENTORY

 

Inventories consists of raw materials and finished goods located in the Company’s warehouse in Tijuana, Mexico. At December 31, 2022 and 2021 Inventories were $0 and $2,072, respectively.

 

NOTE 5 – TAX RECEIVABLES

 

Tax Receivables represent credits from the Mexican taxing authority. The Company’s Mexican subsidiary has accumulated IVA tax payments that exceeded its IVA tax liabilities. These overpayments are available to the Company to offset future IVA liabilities. The net tax receivable balance at December 31, 2022 and 2021 of $37,563 and $29,726, respectively is net of a reserve for the possible uncollectable portion of the tax credits totaling $0 and $0, respectively.

 

NOTE 6 – PROPERTY AND EQUIPMENT

 

At December 31, 2022 and 2021, property and equipment consisted of the following:

 

      
   2022  2021
Machine and equipment  $42,502   $42,502 
Transportation equipment   10,032    10,032 
    52,534    52,534 
Less accumulated depreciation   (22,256)   (11,750)
   $30,278   $40,784 

 

Depreciation expense for the years ended December 31, 2022 and 2021 totaled $10,506 and $10,250, respectively. The estimated useful lives of fixed assets range from 3 to 10 years.

 

 

F-11 
 

 

 

NOTE 7 – ROYALTY AND LICENSE AGREEMENTS

 

On September 30, 2017, the Company entered into a Master Agreement with TEO Inc. ("TEO"). TEO is the founder and majority controlling shareholder of the Company. The Master Agreement provides the Company a license to use the TEO name and logo on food products it sells and to apply TEO's pasteurization/sterilization processes to its products for improved shelf life and safety. Additional provisions provide the Company production rights to TEO's pasteurizer/sterilizer and rights to lease its own system when certain sales/production increase. Pursuant to the Master Agreement, the Company agreed to pay an initial $1 million fee in installments with $100,000 due on June 30, 2018, $300,000 due on December 31, 2018 and the remaining $600,000 due in 12 equal monthly payments with the first payment due on January 31, 2019. TEO Inc. has agreed to maintain the license through December 31, 2023 and accrue and accept payments due as funds are available. As of December 31, 2022, the Company has paid a total of $370,117 towards the license. TEO Inc. has agreed to extend the start date to January 1, 2024 of the use/royalty and service fee of 5.5% of the Company's gross revenue for food sales processed using TEO's intellectual property is payable quarterly.  The ongoing licensing is maintained by meeting minimum annual use/royalty and service fees. The Company may pay for the difference between the actual use and the minimum to maintain the license. The annual minimum is listed as follows:

 

           
Year   Minimum Service Fee
  2024     $ 500,000  
  2025       750,000  
  2026       1,000,000  
  Thereafter       Increase 10% per year  

 

As a result of TEO being the majority shareholder of the Company and TEO's basis in the license being $0, the Company recorded a deemed dividend of $1 million for the initial fee payable to TEO. As of December 31, 2022, and 2021, the outstanding balance of the license fee payable was $629,833 and $631,533, respectively. For the years ended December 31, 2022, and 2021, the Company made payments toward the license of $1,700 and $3,200, respectively.

 

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

 

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

 

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

 

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

 

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

 

NOTE 8 – NOTES PAYABLE

 

Notes Payable

 

On July 31, 2018, the Company issued a note for $100,000 in principal bearing interest at 8% maturing on October 31, 2018. This note was subsequently amended to extend the maturity date to December 31, 2023. As of December 31, 2022 and 2021, the outstanding principal balance of the note was $100,000, respectively.

 

Convertible Note Payable

 

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

 

 

F-12 
 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

As of December 31, 2022 and 2021, there was not a quoted bid price available as the Company’s shares were not listed on any exchanges. As the minimum conversion rate at the time of issuance is greater than or equal to the current stock value based on other similar transactions, these notes are not deemed to have an embedded derivative associated with them.

 

The principal balance of convertible debt at December 31, 2022 and 2021 amounted to $345,500 and $339,500, respectively.

 

F-13 
 

 

NOTE 9 – EQUITY

 

Preferred Stock

 

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

 

NOTE 10 - INCOME TAXES

 

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

 

The provision for Federal income tax consists of the following December 31:

 

      
Federal income tax benefit attributable to:  2022  2021
Current Operations  $72,934   $83,423 
Less: valuation allowance   (72,934)   (83,423)
Net provision for Federal income taxes  $     $   

 

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

 

      
Deferred tax asset attributable to:  2022  2021
Net operating loss carryover  $313,455   $240,521 
Less: valuation allowance   (313,455)   (240,521)
Net deferred tax asset  $     $   

 

 

F-14 
 

 

At December 31, 2022, the Company had net operating loss carry forwards of approximately $1,376,000 that may be offset against future taxable income. No tax benefit has been reported in the December 31, 2022 and 2021 consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

 

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

 

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

 

The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of December 31, 2022 and 2021, the Company had no accrued interest or penalties related to uncertain tax positions.

 

NOTE 11 - RELATED PARTY TRANSACTIONS

 

The Company has various related party payables derived from normal operating activities. These balances are non-interest bearing and are periodically settled as cash flow permits. These payables include accrued compensation to officers. Accrued fees for services owed to the CEO as of December 31, 2022 and December 31, 2021 was $211,100 and $85,100, respectively, and are included within accounts payable and accrued expenses on the consolidated balance sheets. Cash advances made by the CEO as of December 31, 2022 and 2021 was $130,100 and $0, respectively.

 

Master License Agreement

 

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

 

 

F-15 
 

 

 

 

NOTE 12 – COMMITMENTS AND CONTINGENCIES

 

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

 

At December 31, 2020, the Company had three leases on commercial units that are contiguous in the same building located in Tijuana Mexico and comprising approximately 38,000 square feet total. The leases are 12 month leases with option to renew for additional 12 month periods. The total rents are currently approximately $16,000 per month gross with no additional common fees or other charges. The Company paid a total of $135,691 in the year ended December 31, 2022 related to is leases of commercial units in Tijuana.

 

The leases are short term in nature as the Company is not certain to renew the leases.

 


NOTE 13 – CONCENTRATIONS

 

Cash Deposit

 

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At December 31, 2022 and 2021, no cash balances exceeded the federally insured limit.

 

NOTE 14 - SUBSEQUENT EVENTS

 

In February 2023 the Company’s Common Stock was listed for quotation on the OTXQB under the symbol TEOF. Depository Trust Company (DTC) approval was received in March 2023, in April the initial qualifying deposit was made and no trades have occurred.

 

The Company has evaluated subsequent events for recognition and disclosure through April 17, 2023 which is the date the consolidated financial statements were available to be issued. No other matters were identified affecting the accompanying consolidated financial statements and related disclosures.

 

 

 

F-16 
 

 

Item 9.  Changes in and Disagreement with Accountants on Accounting and Financial Disclosure.

 

Not applicable.

 

Item 9A.  Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our CEO and our CFO, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our CEO and our CFO concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective to ensure  that information required to be disclosed is made known to management and others, as appropriate, to allow timely decision regarding required disclosure and that the information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our CEO and CFO, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

  

Management’s Annual Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

 

Our management evaluated the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework. Based on this evaluation, our management, with the participation of the CEO, concluded that, as of December 31, 2022, our internal control over financial reporting was effective.

 

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permits us to provide only management’s report in this annual report.

 

Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting that occurred during the fourth quarter of the year ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Item 9B.  Other Information.

 

None.

 

Item 9C.  Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

 

Not applicable.

 

 

16 
 

 

 

PART III

 

Item 10.  Directors, Executive Officers and Corporate Governance.

 

The following persons are our executive officers and directors, and hold the offices set forth opposite their names.

 

Name   Age   Position
Jeffrey Mackay   58   CEO, President and Director
John O'Keefe   73   CFO, Treasurer and Director

 

The following is a brief account of the business experience during the past five years of each of our directors and executive officers:

 

Jeffrey Mackay - CEO, President and Director

Jeffrey Mackay became our President and Director at inception in 2012 and has had primary responsibilities for our operations and business. Since inception in 2005, he has also been the CEO and a director of TEO Inc. Mackay is an inventor on several of the TEO patents and is majority shareholder of TEO Inc.


Mr. Mackay has a diverse entrepreneurial and technical background, starting as a prototype machinist in what came to be Silicon Valley and progressing to become a quality engineer for General Dynamics air defense systems division before transitioning to law.

 

Mr. Mackay is an attorney licensed in California for over 20 years with a practice in Corporate and Securities Law. He transitioned back to solo practice in 2020 due to devoting most of his time to TEO Foods. He has been Of Counsel at Borton Petrini LLP beginning September 2018 and Of Counsel at the firm of Rowe Mullen LLP beginning December 2014. Prior to 2014 he had a solo practice.

 

His practice includes mergers, acquisitions, private placements, registration statements, periodic and current reporting with the Securities and Exchange Commission, corporate governance and other compliance matters. He has had significant experience working with boards, executive management, accountants and auditing firms.

 

Mr. Mackay received his Juris Doctor at Thomas Jefferson School of Law in 1997, with a Certificate in International Legal Process.

 

John O'Keefe – CFO, Treasurer and Director

John O'Keefe became our CFO, Treasurer and Director in August 2018. He has also been the CFO, Treasurer and a director of TEO Inc. since 2006.

 

He is a highly seasoned senior executive with primary experience in all facets of the energy business. He is an accomplished veteran of running public companies in the US, Canada, and the UK with experience in many parts of the world. O'Keefe sits on the boards of two private corporations. He has been the Managing partner of O'Keefe Capital Partners LP since 2005 consisting of immediate family only.

 

During his career, O'Keefe has played key roles in $13.6 billion of mergers, acquisitions, divestments, spin offs, and stock buy backs. He also successfully accessed the capital markets, working with operating and technical people at all levels to create shareholder value. He has played key roles in raising $4.3B of equity and issued $4.2B of debt and convertibles in his career.

 

O'Keefe was Executive VP and CFO of Fram Exploration from 2011 to 2012, an early stage E&P company seeking to go public on the Oslo Stock Exchange. He was able to make the necessary board, corporate governance and financial reporting changes to get the Company qualified by the Norwegian securities authority. While there, O'Keefe managed a $25 million public company acquisition, a $40 million drilling joint venture, and raised $14 million of new funds.

  

O'Keefe was also a Partner in the Houston, Texas practice of Tatum, LLC from 2010 to 2011.  During his tenure, O'Keefe has operated as interim CFO for Lucas Energy, Inc. as well as providing capital raising support to Rooster Petroleum LLC, both of which are independent oil and gas companies. He was able to raise $14 million in equity and warrants for Lucas during the financial crisis. O'Keefe also led Blast Energy Services as President and CEO (2007-2009). For the prior three years, O'Keefe served as Blast Co-CEO & CFO where he raised $62 million in new funding and, jointly with the COO, turned the company around.

 

From 2000 to 2003, O'Keefe served as CFO of Ivanhoe Energy, a dual listed public E&P company in which he raised $90 million in new equity. Prior to 2000, he was VP of Investor Relations & Corporate Communications with Santa Fe Snyder and Oryx Energy Companies, two upstream Texas based NYSE companies. He played a lead role in merging the companies whereupon stockholders realized gains of $930 and $585 million respectively.

 

O'Keefe had a 22-year career with Sun Oil and 7 years with BP in the Refining, Marketing, and Upstream segments. He was sponsored by Sun to attend the PMD executive program at Harvard Business School in 1985. He earned an honors degree in Business from Portsmouth University and qualified as a Chartered Accountant at the London South Bank University while doing management training with BP.

 

 

17 
 

 

 

 

Involvement in Certain Legal Proceedings

 

During the past ten years, none of our directors, executive officers, promoters, control persons, or nominees has been:

 

the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
   
convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or any Federal or State authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;
   
found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law.
   
the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of (a) any Federal or State securities or commodities law or regulation; (b) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or (c) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
   
the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

Committees of the Board

 

The Company does not currently have independent committees. The Board currently acts in the roles of the various committees. As the Board is expanded to include independent members we expect to form and adopt charters for independent committees.

 

Code of Ethics

 

As of the date of this report we have not adopted a Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We expect to adopt a formal policy upon expanding the Board and executive management team.

 

Family Relationships

 

There are no family relationships among our executive officers and directors.

 

Compliance with Section 16(A) of the Exchange Act

 

Not Applicable

 

Changes in Nominating Procedures

 

None

 

18 
 

 

 

Item 11. Executive Compensation.

 

The following table sets forth information concerning the total compensation paid or accrued by us during the two fiscal years ended December 31, 2022 to:

 

all individuals who served as our chief executive officer, chief financial officer or acted in a similar capacity for us at any time during the fiscal years ended December 31, 2022 and 2021.

 

all individuals who served as executive officers of ours at any time during the fiscal years ended December 31, 2022 and 2021 and received annual compensation during the fiscal years ended December 31, 2022 and 2021 in excess of $100,000.

 

Summary Compensation Table

Position   Year    

Salary

($)

   

Bonus

($)

   

Stock Awards

($)

   

Option Awards

($)

   

Total

($)

 
                                               

Jeffrey Mackay

Chief Executive Officer (1)

 

2022

2021

     $

126,000

124,000

     

-

-

     

-

-

     

-

-

     $

126,000

124,000

 
                                               

John O’Keefe

Chief Financial Officer (2)

 

2022

2021

     

-

-

     

-

-

     

-

-

     

-

-

     

-

-

 

 

Note: The table above includes only the value of options that vested during the periods indicated. The listed executives may have also received unvested options that may vest in a future period. See “Outstanding Equity Awards at Fiscal Year-End” below.

 

(1) Jeffrey Mackay became our President and Director at inception in 2012. Not included in the chart above are 6,337,500 common shares received by TEO Inc. shareholders from TEO Inc. after its conversion of preferred shares in March of 2018.

 

(2) John O’Keefe became our CFO, Treasurer and Director in August 2018. Not included in the chart above are 370,000 common shares received by TEO Inc. shareholders from TEO Inc. after its conversion of preferred shares in March of 2018.

 

Employment Agreements and Benefits

 

We do not currently provide any employee benefit or retirement programs. Our officers’ salaries are determined by the Board of Directors. Officers and employees may receive bonuses from time to time in the form of cash or equity at the sole discretion of the Board of Directors.

 

We have no plans in place and have never maintained any plans that provide for the payment of retirement benefits or benefits that will be paid primarily following retirement including, but not limited to, tax qualified deferred benefit plans, supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans.

 

We have not entered into any employment agreements with our officers.

 

Outstanding Equity Awards

 

The following table reflects options granted to our executive officers named in the Summary Compensation Table.

 

Outstanding Equity Awards at Fiscal Year-End

 

Name   

Number of securities

underlying unexercised

options exercisable

(#)

    

Number of securities underlying unexercised options unexercisable

(#)

    

Option exercise

price

($)

    

Option expiration

date

 
Jeffrey Mackay   —      —      —      —   
                     
John O’Keefe   —      —      —      —   

 

Director Compensation

The Company currently has two Directors Jeffrey Mackay and John O'Keefe.

 

We do not have any independent, non-executive directors. We currently do not pay any cash remuneration for acting as a Director but expect to do so in the future as the Board is expanded. We intend to reimburse Independent Directors for their expenses, if any, for attendance at meetings of the Board of Directors.

 

 

19 
 

 

 

The following table sets forth compensation received by our directors in the fiscal year ended December 31, 2022.

 

 Name    

Fees earned or

paid in cash

($)

    

Stock awards

($)

    

Option awards

($)

    

All other

compensation

($)

    

Total

($)

 
 Jeffrey Mackay(1)    —      —      —      —      —   
 John O’Keefe(2)    —      —      —      —      —   

 

(1) This table includes only his compensation which was expressly for service as a director. Mr. Mackay did not receive any other compensation as an executive officer—see the Summary Compensation Table above.
(2) This table includes only his compensation which was expressly for service as a director. Mr. O’Keefe did not receive any other compensation as an executive officer—see the Summary Compensation Table above.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

The following table sets forth, as of April 17, 2023 , the beneficial ownership of TEO Foods Inc. common stock by each of our directors and named executive officers, each person known to us to beneficially own more than 5% of our common stock, and by the officers and directors of the Company as a group. Except as otherwise indicated, all shares are owned directly. Unless otherwise indicated in the footnotes to the following table, each person named in the table has sole voting and investment power (subject to applicable community property laws) and that person's address is c/o TEO Foods, Inc., Blvd Insurgentes 1980, suite 4-B, Tijuana, BC 22225. Shares of common stock subject to options, warrants, convertible notes or preferred stock currently exercisable or convertible or exercisable or convertible within 60 days after April 17, 2023 are deemed outstanding for computing the share ownership and percentage of the person holding such options, warrants, or convertible notes but are not deemed outstanding for computing the percentage of any other person.

 

    Shares   Percentage
Jeffrey H. Mackay (1)     97,566,500       92.9 %
John O'Keefe (2)     370,000       *  
                 
Officers and Directors as a Group (2 persons)     97,936,500       92.9 %

 

(1) Includes 6,337,500 shares held directly and 1,000,000 shares held by his spouse. Also includes 90,229,000 shares of common stock that are issuable upon conversion of 9,022,900 preferred shares held by TEO Inc. which are included since he is able to control the voting of those shares.
(2) Includes 300,000 shares held by O'Keefe Capital Partners, LLP
(*) Less than 1%.

 

Item 13. Certain Relationships and Related Transactions, and Director Independence.

 

In addition to the cash and equity compensation arrangements of our directors and executive officers discussed above under "Director Compensation" and "Executive Compensation," the following is a description of transactions since December 27, 2012 (inception), to which we have been a party in which the amount involved exceeded or will exceed $120,000 and in which any of our directors, executive officers, beneficial holders of more than 5% of our capital stock, or entities affiliated with them, had or will have a direct or indirect material interest.

 

There have not been any transactions meeting the criteria of the paragraph above.

 

Director Independence

Our Board of Directors presently consists of two members. Our Board of Directors has determined that Mr. Mackay and Mr. O'Keefe are not "independent," as defined by SEC rules adopted pursuant to the requirements of the Sarbanes-Oxley Act of 2002. Although our stock is not listed for trading on the Nasdaq Stock Market at this time, we are required to determine the independence of our directors by reference to the rules of a national securities exchange. In accordance with these requirements, we have determined that Jeffrey Mackay and John O'Keefe are not an "independent director," as determined in accordance with Rule 4200(a)(15) of the Marketplace Rules of the Nasdaq Stock Market, Inc.

 

Mr. Mackay and Mr. O'Keefe are executive officers of the Company, and therefore are not independent directors.  

 

Item 14.  Principal Accounting Fees and Services.

 

Audit Fees

The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements and review of financial statements included in the registrant's Form 10-K or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal years ending December 31, 2022 and 2021 were: $32,000, and $24,000, respectively.

 

 

20 
 

 

Audit-Related Fees

No aggregate fees were billed in either of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of the registrant's financial statements and are not reported under item (1) for the fiscal years ending December 31, 2022 and 2021.

 

Tax Fees

No aggregate fees were billed for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning for the fiscal years ending December 31, 2022 and 2021.

 

All Other Fees

Other fees billed for professional services provided by the principal accountant, other than the services reported above, for the fiscal years ending December 31, 2022 and 2021 were $0 and $0.

 

Audit Committee Pre-Approval Policies

The Board acting as our Audit Committee has approved the principal accountant's performance of services for the audit of the registrant's annual financial statements and review of financial statements included in our Form 10-K or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal year ending December 31, 2022.  Audit-related fees, tax fees, and all other fees, if any, are approved by the Board.

 

Work Performed by Others

The percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was less than 50 percent.

 

 

21 
 

 

PART IV

Item 15.  Exhibits and Financial Statement Schedules.

 

Exhibit No.   Description
     
3.1     Amended and Restated Articles of Incorporation of TEO Foods, Inc. (Incorporated by reference to Exhibit 3.1 from the registrant’s registration statement on Form S-1/A filed with the SEC on October 11, 2018)  
3.2     Bylaws of TEO Foods, Inc. (Incorporated by reference to Exhibit 3.2 from the registrant’s registration statement on Form S-1/A filed with the SEC on October 11, 2018)  
10.1     Master Agreement with TEO Inc. effective September 30, 2017 (Incorporated by reference to Exhibit 10.1 from the registrant’s registration statement on Form S-1/A filed with the SEC on October 11, 2018)  
10.2     Form of Securities Purchase Agreement.  We entered into respective agreements on this form with 1 purchaser in June 2018. (Incorporated by reference to Exhibit 10.3 from the registrant’s registration statement on Form S-1/A filed with the SEC on October 11, 2018)  
10.2.1     Form of Secure Convertible Note. (Incorporated by reference to Exhibit 10.3.1 from the registrant’s registration statement on Form S-1/A filed with the SEC on October 11, 2018)  
10.3     Promissory Note July 31, 2018. (Incorporated by reference to Exhibit 10.4 from the registrant’s registration statement on Form S-1/A filed with the SEC on October 11, 2018)  
21*     List of Subsidiaries.  
31.1*     Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934  
31.2*     Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934  
32.1*     Certification of Chief Executive Officer pursuant to Section 1350  
32.2*     Certification of Chief Financial Officer pursuant to Section 1350  
101.INS**     XBRL Instance Document.  
101.SCH**     XBRL Taxonomy Extension Schema Document.  
101.CAL**     XBRL Taxonomy Extension Calculation Linkbase Document.  
101.DEF**     XBRL Taxonomy Extension Definition Linkbase Document.  
101.LAB**     XBRL Taxonomy Extension Label Linkbase Document.  
101.PRE**     XBRL Taxonomy Extension Presentation Linkbase Document.  
         

* Filed herewith
** Furnished herewith
+ Each of these Exhibits constitutes a management contract, compensatory plan, or arrangement.

 

Item 16.  Form 10K Summary.

 

None.

 

22 
 

 

 

SIGNATURES

 

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

 

  TEO Foods Inc.
     
April 17, 2023 By:   /s/ Jeffrey Mackay
    Jeffery Mackay
    Chief Executive Officer
    (Principal Executive Officer)
     
April 17, 2023 By: /s/John O’Keefe
    John O’Keefe
    Chief Financial Officer
    (Principal Financial Officer and Principal Accounting Officer)

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Date: April 17, 2023 /s/ Jeffrey Mackay
  Jeffrey Mackay, Director,
  Principal Executive Officer

 

Date: April 17, 2023 /s/ John O'Keefe
  John O'Keefe, Director,
  Principal Accounting Officer

 

 

 

23 
 

 

  

 

 

 

 

 

 

EX-21 2 ex21.htm EXHIBIT 21

Exhibit 21

 

SUBSIDIARIES

 

BC TEO Foods S.A. De C.V.

EX-31.1 3 ex31x1.htm EXHIBIT 31.1

Exhibit 31.1

 

CERTIFICATION

 

I, Jeffrey Mackay, certify that:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

April 17, 2023

 

/s/ Jeffrey Mackay

Jeffrey Mackay

Chief Executive Officer

(Principal Executive Officer)

 

 

 

EX-31.2 4 ex31x2.htm EXHIBIT 31.2

 

Exhibit 31.2

 

CERTIFICATION

 

I, John O’Keefe, certify that:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

April 17, 2023

 

/s/ John O’Keefe

John O’Keefe

Chief Financial Officer

(Principal Financial and Accounting Officer)

 

 

EX-32.1 5 ex32x1.htm EXHIBIT 32.1

Exhibit 32.1

 

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

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Annual Report of TEO Foods Inc. (the "Company") on Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jeffrey Mackay, interim Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

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

 

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

 

April 17, 2023

 

 

/s/ Jeffrey Mackay

Jeffrey Mackay

Chief Executive Officer

(Principal Executive Officer)

 

 

EX-32.2 6 ex32x2.htm EXHIBIT 32.2

Exhibit 32.2

 

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

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Annual Report of TEO Foods Inc. (the "Company") on Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John O’Keefe, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

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

 

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

 

April 17, 2023

 

 

/s/ John O’Keefe

John O’Keefe

Chief Financial Officer

(Principal Financial and Accounting Officer)

 

 

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Document Fiscal Year Focus 2022    
Current Fiscal Year End Date --12-31    
Entity File Number 333-226801    
Entity Registrant Name TEO FOODS INC.    
Entity Central Index Key 0001612188    
Entity Tax Identification Number 47-1209532    
Entity Incorporation, State or Country Code NV    
Entity Address, Address Line One Blvd Insurgentes 19801, unit 4-B    
Entity Address, City or Town Tijuana    
Entity Address, State or Province BC    
Entity Address, Postal Zip Code 22225    
City Area Code (619)    
Local Phone Number 758 1973    
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Entity Voluntary Filers Yes    
Entity Current Reporting Status Yes    
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Entity Filer Category Non-accelerated Filer    
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Entity Public Float     $ 1,072,691
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Auditor Name Accell Audit Compliance, P.A.    
Auditor Location Florida    
Auditor Firm ID 3289    
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CONSOLIDATED BALANCE SHEETS - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Current assets    
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Accounts receivable, net 25,924 5,976
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Inventories, net 0 2,072
Taxes receivable, net 37,563 29,726
Prepaid and other assets 13,303 13,483
Total current assets 77,447 64,909
Property and equipment, net 30,278 40,784
Royalty agreement 31,929
Total assets 107,725 137,622
Current liabilities    
Accounts payable and accrued expenses 370,072 202,492
Related party advances 130,100
License fee payable - related party 629,833 631,533
Notes payable 100,000 100,000
Convertible note payable - current portion 345,500 339,500
Total current liabilities 1,575,505 1,273,525
Total liabilities 1,575,505 1,273,525
Commitments and contingencies (Note 12)
Stockholders' deficit    
Preferred stock, $0.001 par value, 10,000,000 shares authorized, 9,022,900 shares issued and outstanding 9,023 9,023
Common stock , $0.001 par value, 490,000,000 shares authorized,13,071,957 and 12,971,957, issued and outstanding, respectively 13,072 12,972
Additional paid-in-capital 1,176,635 1,156,735
Accumulated deficit (2,661,744) (2,314,436)
Other comprehensive loss (4,766) (197)
Total stockholders' deficit (1,467,780) (1,135,903)
Total liabilities and stockholders' deficit $ 107,725 $ 137,622
XML 17 R3.htm IDEA: XBRL DOCUMENT v3.23.1
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Dec. 31, 2022
Dec. 31, 2021
Statement of Financial Position [Abstract]    
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock shares, authorized 10,000,000 10,000,000
Preferred stock shares, issued 9,022,900 9,022,900
Preferred stock shares, outstanding 9,022,900 9,022,900
Common stock, par value $ 0.001 $ 0.001
Common stock shares, authorized 490,000,000 490,000,000
Common stock shares, issued 13,071,957 12,971,957
Common stock shares, outstanding 13,071,957 12,971,957
XML 18 R4.htm IDEA: XBRL DOCUMENT v3.23.1
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)
12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Income Statement [Abstract]    
Sales $ 85,759 $ 64,678
Cost of sales (3,277)
Gross profit 85,759 61,401
Operating expense    
Payroll 17,708 43,556
General and administrative 33,537 61,848
Rent and lease 135,691 147,663
Professional fees 169,366 188,553
Depreciation 10,506 10,250
Total operating expenses 366,808 451,870
Operating loss (281,049) (390,469)
Other income (expense)    
Licensing and royalty income 6,787 25,708
Loss on Royalty Agreement (31,929)
Interest expense (38,885) (32,365)
Other income (expense) (2,233) (127)
Total other income (expense) (66,260) (6,784)
Net loss (347,309) (397,253)
Foreign currency translation adjustment (4,569) (197)
Comprehensive loss $ (351,878) $ (397,450)
Loss per common share -    
basic and diluted $ (0.03) $ (0.03)
Weighted average common    
shares outstanding - basic and diluted 13,071,957 12,784,673
XML 19 R5.htm IDEA: XBRL DOCUMENT v3.23.1
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Cash flows from operating activities    
Net loss $ (347,309) $ (397,253)
Adjustments to reconcile net loss to net Cash provided (used) in operations:    
Depreciation expense 10,506 10,250
Stock compensation expense 5,000
Bad debt expense
Loss on royalty agreement 31,929
Changes in operating assets and liabilities:    
Accounts receivable (19,948) 9,766
License and royalty income receivable 6,097 1,860
Inventories 2,072 5,308
Tax receivable (7,837) (18,397)
Prepaid and other assets 181 (182)
Accounts payable and accrued expenses 167,580 149,577
Net cash provided by (used) in operating activities (156,729) (234,071)
Cash flows from investing activities    
Purchase of property and equipment (6,959)
Net cash (used) in investing activities (6,959)
Cash flows from financing activities    
Proceeds from related party advances 130,100
Proceeds from issuance of common stock 20,000 67,443
Proceeds from convertible notes payable 6,000 157,000
Payment of deemed dividend to Teo Inc. for license (1,700) (3,200)
Net cash provided by in financing activities 154,400 221,243
Effect of foreign currency exchange translation (4,569) (197)
Net change for period (6,898) (19,984)
Cash and cash equivalents at beginning of period 7,555 27,539
Cash and cash equivalents at end of period 657 7,555
Supplement Information:    
Interest
Taxes
XML 20 R6.htm IDEA: XBRL DOCUMENT v3.23.1
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($)
Preferred Stock [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
AOCI Attributable to Parent [Member]
Total
Balance - December 31, 2021 at Dec. 31, 2020 $ 9,023 $ 12,623 $ 277,229 $ (1,917,183) $ (428) $ (1,618,736)
Beginning balance, shares at Dec. 31, 2020 9,022,900 12,622,245        
Capital contribution for disposal of Targa 769,912 428 770,340
Sale of common stock $ 337 67,106 67,443
Sale of common stock, Shares   337,212        
Conversion of notes $ 187 37,313 37,500
Conversion of notes, Shares   187,500        
Stock cancelled $ (200) 200
Stock cancelled, Shares   (200,000)        
Compensation common stock $ 25 4,975 5,000
Compensation common stock, Shares   25,000        
Foreign currency translation adjustment (197) (197)
Net loss (397,253) (397,253)
Balance - December 31, 2022 at Dec. 31, 2021 $ 9,023 $ 12,972 1,156,735 (2,314,436) (197) (1,135,903)
Ending balance, shares at Dec. 31, 2021 9,022,900 12,971,957        
Sale of common stock $ 100 19,900 20,000
Sale of common stock, Shares   100,000        
Foreign currency translation adjustment (4,569) (4,569)
Net loss (347,309) (347,309)
Balance - December 31, 2022 at Dec. 31, 2022 $ 9,023 $ 13,072 $ 1,176,635 $ (2,661,745) $ (4,766) $ (1,467,780)
Ending balance, shares at Dec. 31, 2022   13,071,957        
XML 21 R7.htm IDEA: XBRL DOCUMENT v3.23.1
ORGANIZATION AND BASIS OF PRESENTATION
12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
ORGANIZATION AND BASIS OF PRESENTATION

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

 

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

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

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

XML 22 R8.htm IDEA: XBRL DOCUMENT v3.23.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation and Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company consolidates the financial statements of its wholly-owned subsidiaries and all intercompany transactions and account balances have been eliminated in consolidation.

 

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

 

Cash and Cash Equivalents

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

 

Foreign Currency Translation

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

 

Accounts Receivable

Accounts receivable are reported at the customers’ outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The allowance for doubtful accounts at December 31, 2022 and December 31, 2021 was approximately, $0 and $16,000, respectively.

 

Inventory and Cost of Sales

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

 

Property and Equipment

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

 

Impairment of Long-Lived and Intangible Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company uses market quotes, if available, or an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable. The Company did not recognize impairment on its long-lived assets during the periods ended December 31, 2022 or 2021. Identified intangible assets are reviewed for impairment at least annually, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company’s only intangible asset consists of the royalty agreement discussed in Note 7.

 

Convertible Debentures

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

 

Revenue Recognition

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

 

  i. Identification of the promised goods in the contract;

 

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

 

  iii. Measurement of the transaction price, including the constraint of variable consideration;

 

  iv. Allocation of the transaction price of the performance obligations; and

 

  v. Recognition of revenue when (or as) the Company satisfies each performance obligation.

 

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

 

Use of Estimates

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

 

Fair Value of Financial Instruments

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

 

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

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

 

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

 

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

 

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

 

Loss Per Share of Common Stock

Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period.  The calculation of diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.  Securities with anti-dilutive effects on net earnings (loss) per share are excluded. As of December 31, 2022 and 2021, none of the convertible preferred shares or convertible debt were included in the calculation of diluted weighted average shares as they were anti-dilutive.

 

As of December 31, 2022 and 2021, preferred shares convertible to 90,229,000 common shares were included in the diluted weighted average shares; however, notes convertible into a maximum of 1,727,500 and 1,697,500 common shares, respectively, were excluded from the calculation of loss per common share as the notes are anti-dilutive. As of December 31, 2022 and 2021, common shares outstanding totaled 13,071,957 and 12,971,957, respectively.

 

Leases

In February 2016, the FASB issued ASU No. 2016-02, Under this new guidance, lessees (including lessees under leases classified as finance leases, which are to be classified based on criteria similar to that applicable to capital leases under current guidance, and leases classified as operating leases) will recognize a right-to-use asset and a lease liability on the balance sheet, initially measured as the present value of lease payments under the lease. Under current guidance, operating leases are not recognized on the balance sheet. However, the new guidance permits companies to make an accounting policy election not to apply the recognition provisions of the new guidance to short term leases (leases with a lease term of 12 months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise). If this election is made, lease payments under short term leases will be recognized on a straight-line basis over the lease term. The Company has adopted the new guidance effective January 1, 2019: however, there was no impact to the financial statements.

 

XML 23 R9.htm IDEA: XBRL DOCUMENT v3.23.1
GOING CONCERN
12 Months Ended
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
GOING CONCERN

NOTE 3 – GOING CONCERN

 

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has suffered recurring losses from operations and has insufficient working capital as of December 31, 2022 to develop its business plan and meet its obligation of the next 12 months. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders, the Company's ability to obtain necessary equity or debt financing to continue operations, and ultimately the Company's ability to generate profit from sales of packaged food products. These consolidated financial statements do not include any adjustments to classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company plans to obtain funds for operations through continued financial support from its stockholders, debt and private offerings of its equity.

 

XML 24 R10.htm IDEA: XBRL DOCUMENT v3.23.1
INVENTORY
12 Months Ended
Dec. 31, 2022
Inventory Disclosure [Abstract]  
INVENTORY

NOTE 4 – INVENTORY

 

Inventories consists of raw materials and finished goods located in the Company’s warehouse in Tijuana, Mexico. At December 31, 2022 and 2021 Inventories were $0 and $2,072, respectively.

 

XML 25 R11.htm IDEA: XBRL DOCUMENT v3.23.1
TAX RECEIVABLES
12 Months Ended
Dec. 31, 2022
Tax Receivables  
TAX RECEIVABLES

NOTE 5 – TAX RECEIVABLES

 

Tax Receivables represent credits from the Mexican taxing authority. The Company’s Mexican subsidiary has accumulated IVA tax payments that exceeded its IVA tax liabilities. These overpayments are available to the Company to offset future IVA liabilities. The net tax receivable balance at December 31, 2022 and 2021 of $37,563 and $29,726, respectively is net of a reserve for the possible uncollectable portion of the tax credits totaling $0 and $0, respectively.

 

XML 26 R12.htm IDEA: XBRL DOCUMENT v3.23.1
PROPERTY AND EQUIPMENT
12 Months Ended
Dec. 31, 2022
Property, Plant and Equipment [Abstract]  
PROPERTY AND EQUIPMENT

NOTE 6 – PROPERTY AND EQUIPMENT

 

At December 31, 2022 and 2021, property and equipment consisted of the following:

 

      
   2022  2021
Machine and equipment  $42,502   $42,502 
Transportation equipment   10,032    10,032 
    52,534    52,534 
Less accumulated depreciation   (22,256)   (11,750)
   $30,278   $40,784 

 

Depreciation expense for the years ended December 31, 2022 and 2021 totaled $10,506 and $10,250, respectively. The estimated useful lives of fixed assets range from 3 to 10 years.

 

XML 27 R13.htm IDEA: XBRL DOCUMENT v3.23.1
ROYALTY AND LICENSE AGREEMENTS
12 Months Ended
Dec. 31, 2022
Royalty And License Agreements  
ROYALTY AND LICENSE AGREEMENTS

NOTE 7 – ROYALTY AND LICENSE AGREEMENTS

 

On September 30, 2017, the Company entered into a Master Agreement with TEO Inc. ("TEO"). TEO is the founder and majority controlling shareholder of the Company. The Master Agreement provides the Company a license to use the TEO name and logo on food products it sells and to apply TEO's pasteurization/sterilization processes to its products for improved shelf life and safety. Additional provisions provide the Company production rights to TEO's pasteurizer/sterilizer and rights to lease its own system when certain sales/production increase. Pursuant to the Master Agreement, the Company agreed to pay an initial $1 million fee in installments with $100,000 due on June 30, 2018, $300,000 due on December 31, 2018 and the remaining $600,000 due in 12 equal monthly payments with the first payment due on January 31, 2019. TEO Inc. has agreed to maintain the license through December 31, 2023 and accrue and accept payments due as funds are available. As of December 31, 2022, the Company has paid a total of $370,117 towards the license. TEO Inc. has agreed to extend the start date to January 1, 2024 of the use/royalty and service fee of 5.5% of the Company's gross revenue for food sales processed using TEO's intellectual property is payable quarterly.  The ongoing licensing is maintained by meeting minimum annual use/royalty and service fees. The Company may pay for the difference between the actual use and the minimum to maintain the license. The annual minimum is listed as follows:

 

           
Year   Minimum Service Fee
  2024     $ 500,000  
  2025       750,000  
  2026       1,000,000  
  Thereafter       Increase 10% per year  

 

As a result of TEO being the majority shareholder of the Company and TEO's basis in the license being $0, the Company recorded a deemed dividend of $1 million for the initial fee payable to TEO. As of December 31, 2022, and 2021, the outstanding balance of the license fee payable was $629,833 and $631,533, respectively. For the years ended December 31, 2022, and 2021, the Company made payments toward the license of $1,700 and $3,200, respectively.

 

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

 

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

 

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

 

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

 

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

 

XML 28 R14.htm IDEA: XBRL DOCUMENT v3.23.1
NOTES PAYABLE
12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
NOTES PAYABLE

NOTE 8 – NOTES PAYABLE

 

Notes Payable

 

On July 31, 2018, the Company issued a note for $100,000 in principal bearing interest at 8% maturing on October 31, 2018. This note was subsequently amended to extend the maturity date to December 31, 2023. As of December 31, 2022 and 2021, the outstanding principal balance of the note was $100,000, respectively.

 

Convertible Note Payable

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

As of December 31, 2022 and 2021, there was not a quoted bid price available as the Company’s shares were not listed on any exchanges. As the minimum conversion rate at the time of issuance is greater than or equal to the current stock value based on other similar transactions, these notes are not deemed to have an embedded derivative associated with them.

 

The principal balance of convertible debt at December 31, 2022 and 2021 amounted to $345,500 and $339,500, respectively.

 

XML 29 R15.htm IDEA: XBRL DOCUMENT v3.23.1
EQUITY
12 Months Ended
Dec. 31, 2022
Equity Method Investments and Joint Ventures [Abstract]  
EQUITY

NOTE 9 – EQUITY

 

Preferred Stock

 

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

 

XML 30 R16.htm IDEA: XBRL DOCUMENT v3.23.1
INCOME TAXES
12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 10 - INCOME TAXES

 

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

 

The provision for Federal income tax consists of the following December 31:

 

      
Federal income tax benefit attributable to:  2022  2021
Current Operations  $72,934   $83,423 
Less: valuation allowance   (72,934)   (83,423)
Net provision for Federal income taxes  $     $   

 

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

 

      
Deferred tax asset attributable to:  2022  2021
Net operating loss carryover  $313,455   $240,521 
Less: valuation allowance   (313,455)   (240,521)
Net deferred tax asset  $     $   

 

At December 31, 2022, the Company had net operating loss carry forwards of approximately $1,376,000 that may be offset against future taxable income. No tax benefit has been reported in the December 31, 2022 and 2021 consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

 

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

 

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

 

The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of December 31, 2022 and 2021, the Company had no accrued interest or penalties related to uncertain tax positions.

 

XML 31 R17.htm IDEA: XBRL DOCUMENT v3.23.1
RELATED PARTY TRANSACTIONS
12 Months Ended
Dec. 31, 2022
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 11 - RELATED PARTY TRANSACTIONS

 

The Company has various related party payables derived from normal operating activities. These balances are non-interest bearing and are periodically settled as cash flow permits. These payables include accrued compensation to officers. Accrued fees for services owed to the CEO as of December 31, 2022 and December 31, 2021 was $211,100 and $85,100, respectively, and are included within accounts payable and accrued expenses on the consolidated balance sheets. Cash advances made by the CEO as of December 31, 2022 and 2021 was $130,100 and $0, respectively.

 

Master License Agreement

 

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

 

XML 32 R18.htm IDEA: XBRL DOCUMENT v3.23.1
COMMITMENTS AND CONTINGENCIES
12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 12 – COMMITMENTS AND CONTINGENCIES

 

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

 

At December 31, 2020, the Company had three leases on commercial units that are contiguous in the same building located in Tijuana Mexico and comprising approximately 38,000 square feet total. The leases are 12 month leases with option to renew for additional 12 month periods. The total rents are currently approximately $16,000 per month gross with no additional common fees or other charges. The Company paid a total of $135,691 in the year ended December 31, 2022 related to is leases of commercial units in Tijuana.

 

The leases are short term in nature as the Company is not certain to renew the leases.

 

XML 33 R19.htm IDEA: XBRL DOCUMENT v3.23.1
CONCENTRATIONS
12 Months Ended
Dec. 31, 2022
Risks and Uncertainties [Abstract]  
CONCENTRATIONS


NOTE 13 – CONCENTRATIONS

 

Cash Deposit

 

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At December 31, 2022 and 2021, no cash balances exceeded the federally insured limit.

 

XML 34 R20.htm IDEA: XBRL DOCUMENT v3.23.1
SUBSEQUENT EVENTS
12 Months Ended
Dec. 31, 2022
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 14 - SUBSEQUENT EVENTS

 

In February 2023 the Company’s Common Stock was listed for quotation on the OTXQB under the symbol TEOF. Depository Trust Company (DTC) approval was received in March 2023, in April the initial qualifying deposit was made and no trades have occurred.

 

The Company has evaluated subsequent events for recognition and disclosure through April 17, 2023 which is the date the consolidated financial statements were available to be issued. No other matters were identified affecting the accompanying consolidated financial statements and related disclosures.

 

XML 35 R21.htm IDEA: XBRL DOCUMENT v3.23.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Basis of Presentation and Consolidation

Basis of Presentation and Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company consolidates the financial statements of its wholly-owned subsidiaries and all intercompany transactions and account balances have been eliminated in consolidation.

 

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

 

Cash and Cash Equivalents

Cash and Cash Equivalents

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

 

Foreign Currency Translation

Foreign Currency Translation

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

 

Accounts Receivable

Accounts Receivable

Accounts receivable are reported at the customers’ outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The allowance for doubtful accounts at December 31, 2022 and December 31, 2021 was approximately, $0 and $16,000, respectively.

 

Inventory and Cost of Sales

Inventory and Cost of Sales

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

 

Property and Equipment

Property and Equipment

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

 

Impairment of Long-Lived and Intangible Assets

Impairment of Long-Lived and Intangible Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company uses market quotes, if available, or an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable. The Company did not recognize impairment on its long-lived assets during the periods ended December 31, 2022 or 2021. Identified intangible assets are reviewed for impairment at least annually, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company’s only intangible asset consists of the royalty agreement discussed in Note 7.

 

Convertible Debentures

Convertible Debentures

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

 

Revenue Recognition

Revenue Recognition

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

 

  i. Identification of the promised goods in the contract;

 

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

 

  iii. Measurement of the transaction price, including the constraint of variable consideration;

 

  iv. Allocation of the transaction price of the performance obligations; and

 

  v. Recognition of revenue when (or as) the Company satisfies each performance obligation.

 

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

 

Use of Estimates

Use of Estimates

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

 

Fair Value of Financial Instruments

Fair Value of Financial Instruments

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

 

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

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

 

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

 

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

 

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

 

Loss Per Share of Common Stock

Loss Per Share of Common Stock

Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period.  The calculation of diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.  Securities with anti-dilutive effects on net earnings (loss) per share are excluded. As of December 31, 2022 and 2021, none of the convertible preferred shares or convertible debt were included in the calculation of diluted weighted average shares as they were anti-dilutive.

 

As of December 31, 2022 and 2021, preferred shares convertible to 90,229,000 common shares were included in the diluted weighted average shares; however, notes convertible into a maximum of 1,727,500 and 1,697,500 common shares, respectively, were excluded from the calculation of loss per common share as the notes are anti-dilutive. As of December 31, 2022 and 2021, common shares outstanding totaled 13,071,957 and 12,971,957, respectively.

 

Leases

In February 2016, the FASB issued ASU No. 2016-02, Under this new guidance, lessees (including lessees under leases classified as finance leases, which are to be classified based on criteria similar to that applicable to capital leases under current guidance, and leases classified as operating leases) will recognize a right-to-use asset and a lease liability on the balance sheet, initially measured as the present value of lease payments under the lease. Under current guidance, operating leases are not recognized on the balance sheet. However, the new guidance permits companies to make an accounting policy election not to apply the recognition provisions of the new guidance to short term leases (leases with a lease term of 12 months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise). If this election is made, lease payments under short term leases will be recognized on a straight-line basis over the lease term. The Company has adopted the new guidance effective January 1, 2019: however, there was no impact to the financial statements.

 

XML 36 R22.htm IDEA: XBRL DOCUMENT v3.23.1
PROPERTY AND EQUIPMENT (Tables)
12 Months Ended
Dec. 31, 2022
Property, Plant and Equipment [Abstract]  
Schedule of property and equipment
      
   2022  2021
Machine and equipment  $42,502   $42,502 
Transportation equipment   10,032    10,032 
    52,534    52,534 
Less accumulated depreciation   (22,256)   (11,750)
   $30,278   $40,784 
XML 37 R23.htm IDEA: XBRL DOCUMENT v3.23.1
ROYALTY AND LICENSE AGREEMENTS (Tables)
12 Months Ended
Dec. 31, 2022
Royalty And License Agreements  
Schedule of Royalty and License Agreements
           
Year   Minimum Service Fee
  2024     $ 500,000  
  2025       750,000  
  2026       1,000,000  
  Thereafter       Increase 10% per year  
XML 38 R24.htm IDEA: XBRL DOCUMENT v3.23.1
INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Schedule of provision for income tax
      
Federal income tax benefit attributable to:  2022  2021
Current Operations  $72,934   $83,423 
Less: valuation allowance   (72,934)   (83,423)
Net provision for Federal income taxes  $     $   
Schedule of deferred tax asset
      
Deferred tax asset attributable to:  2022  2021
Net operating loss carryover  $313,455   $240,521 
Less: valuation allowance   (313,455)   (240,521)
Net deferred tax asset  $     $   
XML 39 R25.htm IDEA: XBRL DOCUMENT v3.23.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)
12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Allowance for doubtful accounts $ 0 $ 16,000
Impairment on long-lived assets $ 0 $ 0
Common shares outstanding 13,071,957 12,971,957
Preferred Shares [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Antidilutive shares 90,229,000 90,229,000
Convertible Note [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Antidilutive shares 1,727,500  
Common Shares [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Antidilutive shares 1,697,500  
XML 40 R26.htm IDEA: XBRL DOCUMENT v3.23.1
INVENTORY (Details Narrative) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Inventory Disclosure [Abstract]    
Inventories $ 0 $ 2,072
XML 41 R27.htm IDEA: XBRL DOCUMENT v3.23.1
TAX RECEIVABLES (Details Narrative) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Tax Receivables    
Taxes receivable net $ 37,563 $ 29,726
Tax credits $ 0 $ 0
XML 42 R28.htm IDEA: XBRL DOCUMENT v3.23.1
PROPERTY AND EQUIPMENT (Details) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Property, Plant and Equipment [Line Items]    
Property plant and equipment gross $ 52,534 $ 52,534
Less accumulated depreciation (22,256) (11,750)
Property plant and equipment net 30,278 40,784
Furniture and Fixtures [Member]    
Property, Plant and Equipment [Line Items]    
Property plant and equipment gross 42,502 42,502
Machinery and Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Property plant and equipment gross $ 10,032 $ 10,032
XML 43 R29.htm IDEA: XBRL DOCUMENT v3.23.1
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)
12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Property, Plant and Equipment [Line Items]    
Depreciation expense $ 10,506 $ 10,250
Minimum [Member]    
Property, Plant and Equipment [Line Items]    
Estimated useful live 3 years  
Maximum [Member]    
Property, Plant and Equipment [Line Items]    
Estimated useful live 10 years  
XML 44 R30.htm IDEA: XBRL DOCUMENT v3.23.1
ROYALTY AND LICENSE AGREEMENTS (Details)
12 Months Ended
Dec. 31, 2022
USD ($)
Royalty And License Agreements  
2024 $ 500,000
2025 750,000
2026 $ 1,000,000
Thereafter Increase 10% per year
XML 45 R31.htm IDEA: XBRL DOCUMENT v3.23.1
ROYALTY AND LICENSE AGREEMENTS (Details Narrative) - USD ($)
1 Months Ended 12 Months Ended
Dec. 31, 2017
Dec. 31, 2022
Dec. 31, 2021
Royalty And License Agreements      
Master agreement, description Pursuant to the Master Agreement, the Company agreed to pay an initial $1 million fee in installments with $100,000 due on June 30, 2018, $300,000 due on December 31, 2018 and the remaining $600,000 due in 12 equal monthly payments with the first payment due on January 31, 2019.    
Deemed dividend   $ 1,000,000  
License fee payable   629,833 $ 631,533
License fee   1,700 3,200
Royalty agreement   $ 31,929
Royalty agreement write-off   $ 31,929  
XML 46 R32.htm IDEA: XBRL DOCUMENT v3.23.1
NOTES PAYABLE (Details Narrative) - USD ($)
1 Months Ended 12 Months Ended
Apr. 14, 2022
Jul. 12, 2021
May 05, 2021
Feb. 04, 2019
Dec. 20, 2021
Nov. 24, 2021
Sep. 29, 2021
Jun. 02, 2021
Jun. 01, 2021
Dec. 20, 2020
Jul. 31, 2018
Jun. 28, 2018
Dec. 31, 2021
Dec. 31, 2022
Debt Instrument [Line Items]                            
Outstanding principal amount                         $ 100,000 $ 100,000
Conversion of notes                         37,500  
Convertible note payable                         339,500 345,500
Notes Payable One [Member]                            
Debt Instrument [Line Items]                            
Principal amount                     $ 100,000      
Interest rate                     8.00%      
Maturity date                     Dec. 31, 2023      
Outstanding principal amount                         100,000 100,000
Convertible Note Payable [Member]                            
Debt Instrument [Line Items]                            
Principal amount                       $ 100,000    
Interest rate                       8.00%    
Maturity date                       Dec. 31, 2023    
Convertible note payable                         $ 339,500 $ 345,500
Convertible Note Payable 1 [Member]                            
Debt Instrument [Line Items]                            
Principal amount       $ 120,000           $ 27,500        
Interest rate       8.00%                    
Maturity date       Dec. 31, 2023                    
Conversion of shares price per share       $ 0.20                    
Conversion of shares                   137,500        
Price per share                   $ 0.20        
Convertible Note Payable 2 [Member]                            
Debt Instrument [Line Items]                            
Principal amount     $ 25,000                      
Interest rate     8.00%                      
Maturity date     Dec. 31, 2023                      
Convertible Note Payable 3 [Member]                            
Debt Instrument [Line Items]                            
Principal amount                 $ 20,000          
Interest rate                 8.00%          
Maturity date                 Dec. 31, 2023          
Conversion of shares         50,000                  
Conversion of notes         $ 10,000                  
Share price         $ 0.20                  
Convertible Note Payable 4 [Member]                            
Debt Instrument [Line Items]                            
Principal amount               $ 17,000            
Interest rate               8.00%            
Maturity date               Dec. 31, 2023            
Convertible Note Payable 5 [Member]                            
Debt Instrument [Line Items]                            
Principal amount   $ 40,000                        
Interest rate   8.00%                        
Maturity date   Dec. 31, 2023                        
Convertible Note Payable 6 [Member]                            
Debt Instrument [Line Items]                            
Principal amount             $ 15,000              
Interest rate             8.00%              
Maturity date             Dec. 31, 2023              
Convertible Note Payable 7 [Member]                            
Debt Instrument [Line Items]                            
Principal amount           $ 40,000                
Interest rate           8.00%                
Maturity date           Dec. 31, 2023                
Convertible Note Payable 8 [Member]                            
Debt Instrument [Line Items]                            
Principal amount $ 6,000                          
Interest rate 8.00%                          
Maturity date Dec. 31, 2023                          
XML 47 R33.htm IDEA: XBRL DOCUMENT v3.23.1
EQUITY (Details Narrative)
12 Months Ended
Dec. 31, 2022
Equity Method Investments and Joint Ventures [Abstract]  
Preferred stock voting rights Each share of Class A Preferred Stock may be converted by the holder upon request of the holder into 10 shares of common stock. Each holder is entitled to 100 votes for each share of Class A Preferred Stock held on the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company (and written actions of stockholders in lieu of meetings) with respect to any and all matters presented to the stockholders of the Company for their action or consideration. The holders are entitled to dividends, if any, as declared by the Company and participate pari passu with the common stock of the Company at the conversion rate.
XML 48 R34.htm IDEA: XBRL DOCUMENT v3.23.1
INCOME TAXES (Details) - USD ($)
12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Abstract]    
Current Operations $ 72,934 $ 83,423
Less: valuation allowance (72,934) (83,423)
Net provision for Federal income taxes
XML 49 R35.htm IDEA: XBRL DOCUMENT v3.23.1
INCOME TAXES (Details 1) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Abstract]    
Net operating loss carryover $ 313,455 $ 240,521
Less: valuation allowance (313,455) (240,521)
Net deferred tax asset
XML 50 R36.htm IDEA: XBRL DOCUMENT v3.23.1
INCOME TAXES (Details Narrative) - USD ($)
12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Abstract]    
Federal income tax rate 21.00%  
Net operating loss carry forwards $ 1,376,000  
Income tax expense benefit 0 $ 0
Accrued interest or penalties $ 0 $ 0
XML 51 R37.htm IDEA: XBRL DOCUMENT v3.23.1
RELATED PARTY TRANSACTIONS (Details Narrative) - Chief Executive Officer [Member] - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]    
Accrued fees $ 211,100 $ 85,100
Cash advances $ 130,100 $ 0
XML 52 R38.htm IDEA: XBRL DOCUMENT v3.23.1
COMMITMENTS AND CONTINGENCIES (Details Narrative)
12 Months Ended
Dec. 31, 2022
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
Rent Expenses $ 16,000
Lease rent $ 135,691
XML 53 R39.htm IDEA: XBRL DOCUMENT v3.23.1
CONCENTRATIONS (Details Narrative) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Risks and Uncertainties [Abstract]    
Federally insured limit $ 0 $ 0
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Florida 3289 657 7555 25924 5976 6097 0 2072 37563 29726 13303 13483 77447 64909 30278 40784 31929 107725 137622 370072 202492 130100 629833 631533 100000 100000 345500 339500 1575505 1273525 1575505 1273525 0.001 0.001 10000000 10000000 9022900 9022900 9022900 9022900 9023 9023 0.001 0.001 490000000 490000000 13071957 13071957 12971957 12971957 13072 12972 1176635 1156735 -2661744 -2314436 -4766 -197 -1467780 -1135903 107725 137622 85759 64678 3277 85759 61401 17708 43556 33537 61848 135691 147663 169366 188553 10506 10250 366808 451870 -281049 -390469 6787 25708 31929 38885 32365 -2233 -127 -66260 -6784 -347309 -397253 -4569 -197 -351878 -397450 -0.03 -0.03 13071957 12784673 347309 397253 10506 10250 5000 31929 19948 -9766 -6097 -1860 -2072 -5308 7837 18397 -181 182 167580 149577 -156729 -234071 6959 -6959 130100 20000 67443 6000 157000 1700 3200 154400 221243 -4569 -197 -6898 -19984 7555 27539 657 7555 9022900 9023 12622245 12623 277229 -1917183 -428 -1618736 769912 428 770340 337212 337 67106 67443 187500 187 37313 37500 -200000 -200 200 25000 25 4975 5000 -197 -197 -397253 -397253 9022900 9023 12971957 12972 1156735 -2314436 -197 -1135903 100000 100 19900 20000 -4569 -4569 -347309 -347309 9022900 9023 13071957 13072 1176635 -2661745 -4766 -1467780 <p id="xdx_807_eus-gaap--BusinessDescriptionAndBasisOfPresentationTextBlock_zdCzlrkk8rz1" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 1 - <span id="xdx_820_zB8L2mXJsHba">ORGANIZATION AND BASIS OF PRESENTATION</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 12pt; text-align: justify">TEO Foods Inc. (“Company”) was incorporated in the state of Nevada on December 27, 2012.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 12pt; text-align: justify">The Company’s principal activity is to produce and sell food packaged products for retail sale in the frozen, refrigerated and shelf stable categories. The Company has a license to use the TEO name and logo on food products it sells and to apply the TEO pasteurization/sterilization processes to its products for improved shelf life and safety.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 12pt; text-align: justify">In January 2020, the Company created BCTEO Foods S.A. de C.V. (“BC TEO Foods”), a 100% owned subsidiary in Mexico. BCTEO Foods is the operating entity in Mexico and holds all facilities leases.</p> <p id="xdx_803_eus-gaap--SignificantAccountingPoliciesTextBlock_zcmZEjuYcxl4" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 2 - <span id="xdx_820_zXd8Y0spOYQg">SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_849_eus-gaap--BasisOfAccountingPolicyPolicyTextBlock_z0pvgJr63Qc5" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86C_zsgyY7uGiwb9">Basis of Presentation and Consolidation</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company consolidates the financial statements of its wholly-owned subsidiaries and all intercompany transactions and account balances have been eliminated in consolidation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">All amounts referred to in the notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_84D_eus-gaap--CashAndCashEquivalentsPolicyTextBlock_zwdDB5gKTQye" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_865_zXmGyaPH7wo">Cash and Cash Equivalents</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company considers all highly liquid debt instruments and other short-term investments with a maturity date of three months or less, when purchased, to be cash equivalents.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_84D_eus-gaap--ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock_z14jJn4Ui5Dk" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_864_zcjNtbHpo907">Foreign Currency Translation</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company subsidiary’s primary functional currency is the Mexican peso, but it’s reporting currency is the U.S. dollar. The consolidated balance sheet accounts are translated at exchange rates in effect at the end of the period and income statement accounts are translated at average exchange rates for the period. Translation gains and losses are included as a separate component of stockholders’ deficit.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_845_eus-gaap--ReceivablesPolicyTextBlock_zFVKuVs71Pj5" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86B_zlv5pRI2qFPl">Accounts Receivable</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Accounts receivable are reported at the customers’ outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The allowance for doubtful accounts at December 31, 2022 and December 31, 2021 was approximately, $<span id="xdx_90A_eus-gaap--AllowanceForDoubtfulAccountsReceivable_iI_pp0p0_c20221231_zpy00njxpQdh" title="Allowance for doubtful accounts">0</span> and $<span id="xdx_907_eus-gaap--AllowanceForDoubtfulAccountsReceivable_iI_pp0p0_c20211231_zKoE2J1oToVl" title="Allowance for doubtful accounts">16,000</span>, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_844_eus-gaap--InventoryPolicyTextBlock_ztAzsjK0PV4k" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_868_zJwpjlZS41Xb">Inventory and Cost of Sales</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Inventories are stated at the lower of cost or realizable value, using the average cost method. When an impairment indicator suggests that the carrying amounts of inventories might not be recoverable, the Company reviews such carrying amounts and estimates the net realizable value based on the most reliable evidence available at that time. An impairment loss is recorded if the net realizable value is less than the carrying value. Impairment indicators considered for these purposes are, among others, obsolescence, decrease in market prices, damage and a firm commitment to sell.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_84D_eus-gaap--PropertyPlantAndEquipmentPolicyTextBlock_zR4cBQhTJhW6" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_863_zCPLLCkYqDf5">Property and Equipment</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Property and equipment are stated at cost, net of depreciation. Depreciation is provided over the useful life of the related asset using the straight line method. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs that do not improve or extend the lives of the respective assets are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_846_eus-gaap--ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock_zvSOEnnXCw1" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_864_zKIGam3Vwd61">Impairment of Long-Lived and Intangible Assets</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company uses market quotes, if available, or an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable. The Company did <span id="xdx_90F_eus-gaap--ImpairmentOfLongLivedAssetsToBeDisposedOf_pp0p0_do_c20220101__20221231_zZTvD6nUpdae" title="Impairment on long-lived assets"><span id="xdx_90B_eus-gaap--ImpairmentOfLongLivedAssetsToBeDisposedOf_pp0p0_do_c20210101__20211231_zP2XK2iNQvwj" title="Impairment on long-lived assets">no</span></span>t recognize impairment on its long-lived assets during the periods ended December 31, 2022 or 2021. Identified intangible assets are reviewed for impairment at least annually, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company’s only intangible asset consists of the royalty agreement discussed in Note 7.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_841_eus-gaap--DebtPolicyTextBlock_zaXYL6t2uV6h" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline">C<span>onvertible Debentures</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company adopted the guidance in Accounting Standards Updated (“ASU”) 2020-06, <i>Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity</i> on January 1, 2022. ASU 2020-06 simplifies an issuer’s accounting for convertible instruments and its application of the derivatives scope exception for contracts in its own equity. Additionally, ASU 2020-06 removes the requirements for accounting for beneficial conversion features. The Company adopted ASU 2020-06 utilizing the modified retrospective method, which resulted in an immaterial impact to the Company.</span><span style="font-size: 8pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_846_eus-gaap--RevenueRecognitionPolicyTextBlock_zVs001QoVHV2" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86F_z5XPC2rxjrvh">Revenue Recognition</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recognizes revenue in accordance with Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” (“Topic 606”). Revenue is recognized when a customer obtains control of promised goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the company expects to receive in exchange for those goods or services. The Company applies the following five-step model in order to determine this amount:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">i.</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Identification of the promised goods in the contract;</span></td></tr> </table> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellpadding="0" cellspacing="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ii.</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract;</span></td></tr> </table> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellpadding="0" cellspacing="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">iii.</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Measurement of the transaction price, including the constraint of variable consideration;</span></td></tr> </table> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellpadding="0" cellspacing="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">iv.</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Allocation of the transaction price of the performance obligations; and</span></td></tr> </table> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellpadding="0" cellspacing="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">v.</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recognition of revenue when (or as) the Company satisfies each performance obligation.</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company only applies the five-step model to contracts when it is probable the entity will collect the consideration it is entitled to in exchange for the goods and services it transfers to the customer. Once a contract is determined to be within the scope of Topic 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligations when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time typically upon delivery. The Company primarily sells packaged food products to its customers. The Company’s performance obligation is satisfied when the goods have been delivered, which is at a point in time. The Company provides manufacturing services for packaged food and other products. The Company’s performance obligation is satisfied for services when the services are completed or the related products have been delivered, which is at a point in time. The Company receives revenue from a licensing and royalty agreement and the licensee incurs fees based on their sales to their customers, which occurs when the products are delivered. The Company’s performance obligation related to these agreements is satisfied at the point in time when the products are delivered.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_845_eus-gaap--UseOfEstimates_zSd1cFNvK8dd" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_865_zJzSDaW80ftd">Use of Estimates</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.</p> <p style="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"> </p> <p id="xdx_841_eus-gaap--FairValueOfFinancialInstrumentsPolicy_z4BqeMtyFFIb" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="text-decoration: underline"><span id="xdx_86B_z90BYEzgesMg">Fair Value of Financial Instruments</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Fair value is defined as the price that would be received in the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has categorized all investments recorded at fair value based upon the level of judgment associated with the inputs used to measure their fair value.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; background-color: white">Hierarchical levels, directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.1pt; text-align: justify; background-color: white">● Level 1: Quoted prices in active markets for identical assets or liabilities that the organization has the ability to access at the reporting date.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.1pt; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.1pt; text-align: justify; background-color: white">● Level 2: Inputs other than quoted prices included in Level 1, which are either observable or that can be derived from or corroborated by observable data as of the reporting date.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.1pt; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.1pt; text-align: justify; background-color: white">● Level 3: Inputs include those that are significant to the fair value of the asset or liability and are generally less observable from objective resources and reflect the reporting entity's assumptions about the assumptions market participants would use in pricing the asset or liability.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.1pt; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company's financial instruments consist of advances from related party, notes payable, convertible notes payable and license fee payable. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of the respective instruments.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_845_eus-gaap--EarningsPerSharePolicyTextBlock_zxk5w7kh0oe5" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="text-decoration: underline"><span id="xdx_864_zBLLuomkhv6i">Loss Per Share of Common Stock</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period.  The calculation of diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.  Securities with anti-dilutive effects on net earnings (loss) per share are excluded. As of December 31, 2022 and 2021, none of the convertible preferred shares or convertible debt were included in the calculation of diluted weighted average shares as they were anti-dilutive.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">As of December 31, 2022 and 2021, preferred shares convertible to <span id="xdx_903_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_c20220101__20221231__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--PreferredSharesMember_zXN900Xgq7bc" title="Antidilutive shares"><span id="xdx_908_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_c20210101__20211231__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--PreferredSharesMember_zPOlvTaGKwE2" title="Antidilutive shares">90,229,000</span></span> common shares were included in the diluted weighted average shares; however, notes convertible into a maximum of <span id="xdx_90B_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_c20220101__20221231__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--ConvertibleNoteMember_zGRsLgxWSWj4" title="Antidilutive shares">1,727,500</span> and <span id="xdx_909_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_c20220101__20221231__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--CommonSharesMember_zjOYUUU4rfZ3" title="Antidilutive shares">1,697,500</span> common shares, respectively, were excluded from the calculation of loss per common share as the notes are anti-dilutive. As of December 31, 2022 and 2021, common shares outstanding totaled <span id="xdx_902_eus-gaap--CommonStockSharesOutstanding_iI_c20221231_z8i1pV3OiKig" title="Common shares outstanding">13,071,957</span> and <span id="xdx_90C_eus-gaap--CommonStockSharesOutstanding_iI_c20211231_zb9QQrDRK9v3" title="Common shares outstanding">12,971,957</span>, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 400 8.5pt Times New Roman, Times, Serif; margin: 0; letter-spacing: normal; word-spacing: 0px; text-indent: 0px; background-color: rgb(255, 255, 255)"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Leases</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In February 2016, the FASB issued ASU No. 2016-02, Under this new guidance, lessees (including lessees under leases classified as finance leases, which are to be classified based on criteria similar to that applicable to capital leases under current guidance, and leases classified as operating leases) will recognize a right-to-use asset and a lease liability on the balance sheet, initially measured as the present value of lease payments under the lease. Under current guidance, operating leases are not recognized on the balance sheet. However, the new guidance permits companies to make an accounting policy election not to apply the recognition provisions of the new guidance to short term leases (leases with a lease term of 12 months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise). If this election is made, lease payments under short term leases will be recognized on a straight-line basis over the lease term. The Company has adopted the new guidance effective January 1, 2019: however, there was no impact to the financial statements.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"/> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> <p id="xdx_849_eus-gaap--BasisOfAccountingPolicyPolicyTextBlock_z0pvgJr63Qc5" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86C_zsgyY7uGiwb9">Basis of Presentation and Consolidation</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company consolidates the financial statements of its wholly-owned subsidiaries and all intercompany transactions and account balances have been eliminated in consolidation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">All amounts referred to in the notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_84D_eus-gaap--CashAndCashEquivalentsPolicyTextBlock_zwdDB5gKTQye" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_865_zXmGyaPH7wo">Cash and Cash Equivalents</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company considers all highly liquid debt instruments and other short-term investments with a maturity date of three months or less, when purchased, to be cash equivalents.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_84D_eus-gaap--ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock_z14jJn4Ui5Dk" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_864_zcjNtbHpo907">Foreign Currency Translation</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company subsidiary’s primary functional currency is the Mexican peso, but it’s reporting currency is the U.S. dollar. The consolidated balance sheet accounts are translated at exchange rates in effect at the end of the period and income statement accounts are translated at average exchange rates for the period. Translation gains and losses are included as a separate component of stockholders’ deficit.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_845_eus-gaap--ReceivablesPolicyTextBlock_zFVKuVs71Pj5" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86B_zlv5pRI2qFPl">Accounts Receivable</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Accounts receivable are reported at the customers’ outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The allowance for doubtful accounts at December 31, 2022 and December 31, 2021 was approximately, $<span id="xdx_90A_eus-gaap--AllowanceForDoubtfulAccountsReceivable_iI_pp0p0_c20221231_zpy00njxpQdh" title="Allowance for doubtful accounts">0</span> and $<span id="xdx_907_eus-gaap--AllowanceForDoubtfulAccountsReceivable_iI_pp0p0_c20211231_zKoE2J1oToVl" title="Allowance for doubtful accounts">16,000</span>, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> 0 16000 <p id="xdx_844_eus-gaap--InventoryPolicyTextBlock_ztAzsjK0PV4k" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_868_zJwpjlZS41Xb">Inventory and Cost of Sales</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Inventories are stated at the lower of cost or realizable value, using the average cost method. When an impairment indicator suggests that the carrying amounts of inventories might not be recoverable, the Company reviews such carrying amounts and estimates the net realizable value based on the most reliable evidence available at that time. An impairment loss is recorded if the net realizable value is less than the carrying value. Impairment indicators considered for these purposes are, among others, obsolescence, decrease in market prices, damage and a firm commitment to sell.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_84D_eus-gaap--PropertyPlantAndEquipmentPolicyTextBlock_zR4cBQhTJhW6" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_863_zCPLLCkYqDf5">Property and Equipment</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Property and equipment are stated at cost, net of depreciation. Depreciation is provided over the useful life of the related asset using the straight line method. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs that do not improve or extend the lives of the respective assets are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_846_eus-gaap--ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock_zvSOEnnXCw1" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_864_zKIGam3Vwd61">Impairment of Long-Lived and Intangible Assets</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company uses market quotes, if available, or an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable. The Company did <span id="xdx_90F_eus-gaap--ImpairmentOfLongLivedAssetsToBeDisposedOf_pp0p0_do_c20220101__20221231_zZTvD6nUpdae" title="Impairment on long-lived assets"><span id="xdx_90B_eus-gaap--ImpairmentOfLongLivedAssetsToBeDisposedOf_pp0p0_do_c20210101__20211231_zP2XK2iNQvwj" title="Impairment on long-lived assets">no</span></span>t recognize impairment on its long-lived assets during the periods ended December 31, 2022 or 2021. Identified intangible assets are reviewed for impairment at least annually, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company’s only intangible asset consists of the royalty agreement discussed in Note 7.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> 0 0 <p id="xdx_841_eus-gaap--DebtPolicyTextBlock_zaXYL6t2uV6h" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline">C<span>onvertible Debentures</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company adopted the guidance in Accounting Standards Updated (“ASU”) 2020-06, <i>Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity</i> on January 1, 2022. ASU 2020-06 simplifies an issuer’s accounting for convertible instruments and its application of the derivatives scope exception for contracts in its own equity. Additionally, ASU 2020-06 removes the requirements for accounting for beneficial conversion features. The Company adopted ASU 2020-06 utilizing the modified retrospective method, which resulted in an immaterial impact to the Company.</span><span style="font-size: 8pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_846_eus-gaap--RevenueRecognitionPolicyTextBlock_zVs001QoVHV2" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_86F_z5XPC2rxjrvh">Revenue Recognition</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recognizes revenue in accordance with Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” (“Topic 606”). Revenue is recognized when a customer obtains control of promised goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the company expects to receive in exchange for those goods or services. The Company applies the following five-step model in order to determine this amount:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">i.</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Identification of the promised goods in the contract;</span></td></tr> </table> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellpadding="0" cellspacing="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ii.</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract;</span></td></tr> </table> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellpadding="0" cellspacing="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">iii.</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Measurement of the transaction price, including the constraint of variable consideration;</span></td></tr> </table> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellpadding="0" cellspacing="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">iv.</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Allocation of the transaction price of the performance obligations; and</span></td></tr> </table> <p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p> <table cellpadding="0" cellspacing="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">v.</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recognition of revenue when (or as) the Company satisfies each performance obligation.</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company only applies the five-step model to contracts when it is probable the entity will collect the consideration it is entitled to in exchange for the goods and services it transfers to the customer. Once a contract is determined to be within the scope of Topic 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligations when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time typically upon delivery. The Company primarily sells packaged food products to its customers. The Company’s performance obligation is satisfied when the goods have been delivered, which is at a point in time. The Company provides manufacturing services for packaged food and other products. The Company’s performance obligation is satisfied for services when the services are completed or the related products have been delivered, which is at a point in time. The Company receives revenue from a licensing and royalty agreement and the licensee incurs fees based on their sales to their customers, which occurs when the products are delivered. The Company’s performance obligation related to these agreements is satisfied at the point in time when the products are delivered.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_845_eus-gaap--UseOfEstimates_zSd1cFNvK8dd" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline"><span id="xdx_865_zJzSDaW80ftd">Use of Estimates</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.</p> <p style="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"> </p> <p id="xdx_841_eus-gaap--FairValueOfFinancialInstrumentsPolicy_z4BqeMtyFFIb" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="text-decoration: underline"><span id="xdx_86B_z90BYEzgesMg">Fair Value of Financial Instruments</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Fair value is defined as the price that would be received in the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has categorized all investments recorded at fair value based upon the level of judgment associated with the inputs used to measure their fair value.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; background-color: white">Hierarchical levels, directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.1pt; text-align: justify; background-color: white">● Level 1: Quoted prices in active markets for identical assets or liabilities that the organization has the ability to access at the reporting date.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.1pt; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.1pt; text-align: justify; background-color: white">● Level 2: Inputs other than quoted prices included in Level 1, which are either observable or that can be derived from or corroborated by observable data as of the reporting date.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.1pt; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.1pt; text-align: justify; background-color: white">● Level 3: Inputs include those that are significant to the fair value of the asset or liability and are generally less observable from objective resources and reflect the reporting entity's assumptions about the assumptions market participants would use in pricing the asset or liability.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.1pt; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company's financial instruments consist of advances from related party, notes payable, convertible notes payable and license fee payable. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of the respective instruments.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_845_eus-gaap--EarningsPerSharePolicyTextBlock_zxk5w7kh0oe5" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="text-decoration: underline"><span id="xdx_864_zBLLuomkhv6i">Loss Per Share of Common Stock</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period.  The calculation of diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.  Securities with anti-dilutive effects on net earnings (loss) per share are excluded. As of December 31, 2022 and 2021, none of the convertible preferred shares or convertible debt were included in the calculation of diluted weighted average shares as they were anti-dilutive.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">As of December 31, 2022 and 2021, preferred shares convertible to <span id="xdx_903_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_c20220101__20221231__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--PreferredSharesMember_zXN900Xgq7bc" title="Antidilutive shares"><span id="xdx_908_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_c20210101__20211231__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--PreferredSharesMember_zPOlvTaGKwE2" title="Antidilutive shares">90,229,000</span></span> common shares were included in the diluted weighted average shares; however, notes convertible into a maximum of <span id="xdx_90B_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_c20220101__20221231__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--ConvertibleNoteMember_zGRsLgxWSWj4" title="Antidilutive shares">1,727,500</span> and <span id="xdx_909_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_c20220101__20221231__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--CommonSharesMember_zjOYUUU4rfZ3" title="Antidilutive shares">1,697,500</span> common shares, respectively, were excluded from the calculation of loss per common share as the notes are anti-dilutive. As of December 31, 2022 and 2021, common shares outstanding totaled <span id="xdx_902_eus-gaap--CommonStockSharesOutstanding_iI_c20221231_z8i1pV3OiKig" title="Common shares outstanding">13,071,957</span> and <span id="xdx_90C_eus-gaap--CommonStockSharesOutstanding_iI_c20211231_zb9QQrDRK9v3" title="Common shares outstanding">12,971,957</span>, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 400 8.5pt Times New Roman, Times, Serif; margin: 0; letter-spacing: normal; word-spacing: 0px; text-indent: 0px; background-color: rgb(255, 255, 255)"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Leases</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In February 2016, the FASB issued ASU No. 2016-02, Under this new guidance, lessees (including lessees under leases classified as finance leases, which are to be classified based on criteria similar to that applicable to capital leases under current guidance, and leases classified as operating leases) will recognize a right-to-use asset and a lease liability on the balance sheet, initially measured as the present value of lease payments under the lease. Under current guidance, operating leases are not recognized on the balance sheet. However, the new guidance permits companies to make an accounting policy election not to apply the recognition provisions of the new guidance to short term leases (leases with a lease term of 12 months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise). If this election is made, lease payments under short term leases will be recognized on a straight-line basis over the lease term. The Company has adopted the new guidance effective January 1, 2019: however, there was no impact to the financial statements.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"/> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b> </b></p> 90229000 90229000 1727500 1697500 13071957 12971957 <p id="xdx_80B_eus-gaap--SubstantialDoubtAboutGoingConcernTextBlock_zDBDlpnK6Jh5" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 3 – <span id="xdx_82C_z9Cpl9S5hlC3">GOING CONCERN</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has suffered recurring losses from operations and has insufficient working capital as of December 31, 2022 to develop its business plan and meet its obligation of the next 12 months. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders, the Company's ability to obtain necessary equity or debt financing to continue operations, and ultimately the Company's ability to generate profit from sales of packaged food products. These consolidated financial statements do not include any adjustments to classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company plans to obtain funds for operations through continued financial support from its stockholders, debt and private offerings of its equity.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_80C_eus-gaap--InventoryDisclosureTextBlock_zxsWH8nxNrI7" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 4 – <span id="xdx_828_zAPoRzI7uLnk">INVENTORY</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Inventories consists of raw materials and finished goods located in the Company’s warehouse in Tijuana, Mexico. At December 31, 2022 and 2021 Inventories were $<span id="xdx_901_eus-gaap--InventoryNet_iI_pp0p0_c20221231_zCLi1KSj2r6f" title="Inventories">0</span> and $<span id="xdx_904_eus-gaap--InventoryNet_iI_pp0p0_c20211231_z22AAVX6NLt1" title="Inventories">2,072</span>, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> 0 2072 <p id="xdx_803_ecustom--TaxReceivablesTextBlock_zTUa1cqQgMf7" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 5 – <span id="xdx_82C_zE24unRikxT5">TAX RECEIVABLES</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Tax Receivables represent credits from the Mexican taxing authority. The Company’s Mexican subsidiary has accumulated IVA tax payments that exceeded its IVA tax liabilities. These overpayments are available to the Company to offset future IVA liabilities. The net tax receivable balance at December 31, 2022 and 2021 of $<span id="xdx_903_eus-gaap--IncomeTaxesReceivable_iI_pp0p0_c20221231_zOaddlIPUwJb" title="Taxes receivable net">37,563</span> and $<span id="xdx_90B_eus-gaap--IncomeTaxesReceivable_iI_pp0p0_c20211231_zFlfeeQOU762" title="Taxes receivable net">29,726</span>, respectively is net of a reserve for the possible uncollectable portion of the tax credits totaling $<span id="xdx_903_eus-gaap--TaxCreditCarryforwardValuationAllowance_iI_pp0p0_c20221231_zaMJh4lEr6Ma" title="Tax credits">0</span> and $<span id="xdx_902_eus-gaap--TaxCreditCarryforwardValuationAllowance_iI_pp0p0_c20211231_z3bRftuNkMqg" title="Tax credits">0</span>, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> 37563 29726 0 0 <p id="xdx_80A_eus-gaap--PropertyPlantAndEquipmentDisclosureTextBlock_z0tnKrMLlIB4" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 6 – <span id="xdx_824_ztNFdXH2njf1">PROPERTY AND EQUIPMENT</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2022 and 2021, property and equipment consisted of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" id="xdx_880_eus-gaap--PropertyPlantAndEquipmentTextBlock_zloAPdyKhPvc" style="font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - PROPERTY AND EQUIPMENT (Details)"> <tr style="vertical-align: bottom"> <td><span id="xdx_8B0_zLBOVLTTbshj" style="display: none"> Schedule of property and equipment</span></td><td> </td> <td colspan="3" style="text-align: center"> </td><td> </td> <td colspan="3" style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="3" style="border-bottom: Black 1pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="3" style="border-bottom: Black 1pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2021</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 66%; text-align: left">Machine and equipment</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_985_eus-gaap--PropertyPlantAndEquipmentGross_iI_pp0p0_c20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember_zcMMoSEdpba1" style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right" title="Property plant and equipment gross">42,502</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_987_eus-gaap--PropertyPlantAndEquipmentGross_iI_pp0p0_c20211231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember_z5eT0qdGtqGi" style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right" title="Property plant and equipment gross">42,502</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left">Transportation equipment</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--PropertyPlantAndEquipmentGross_iI_pp0p0_c20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember_znRAYj1mSOO6" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Property plant and equipment gross">10,032</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_eus-gaap--PropertyPlantAndEquipmentGross_iI_pp0p0_c20211231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember_zfGUmjfdErA5" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Property plant and equipment gross">10,032</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_eus-gaap--PropertyPlantAndEquipmentGross_iI_pp0p0_c20221231_zGXr141nbdXd" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Property plant and equipment gross">52,534</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_eus-gaap--PropertyPlantAndEquipmentGross_iI_pp0p0_c20211231_zkOOVu4KYxY2" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Property plant and equipment gross">52,534</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Less accumulated depreciation</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iNI_pp0p0_di_c20221231_zmM3D08z4Djh" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Less accumulated depreciation">(22,256</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iNI_pp0p0_di_c20211231_zR0DOeKEuU53" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Less accumulated depreciation">(11,750</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 2.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_983_eus-gaap--PropertyPlantAndEquipmentNet_iI_pp0p0_c20221231_zBDmuWuKI22k" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Property plant and equipment net">30,278</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_982_eus-gaap--PropertyPlantAndEquipmentNet_iI_pp0p0_c20211231_zUYrTOR17uDa" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Property plant and equipment net">40,784</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Depreciation expense for the years ended December 31, 2022 and 2021 totaled $<span id="xdx_900_eus-gaap--Depreciation_pp0p0_c20220101__20221231_z2CyAjYwP2Bk" title="Depreciation expense">10,506</span> and $<span id="xdx_90B_eus-gaap--Depreciation_pp0p0_c20210101__20211231_zWw2zzmee7p6" title="Depreciation expense">10,250</span>, respectively. The estimated useful lives of fixed assets range from <span id="xdx_905_eus-gaap--PropertyPlantAndEquipmentUsefulLife_dtY_c20220101__20221231__srt--RangeAxis__srt--MinimumMember_zjxYB1pY13p7" title="Estimated useful live">3</span> to <span id="xdx_90B_eus-gaap--PropertyPlantAndEquipmentUsefulLife_dtY_c20220101__20221231__srt--RangeAxis__srt--MaximumMember_zRDKZ4WpOuEi" title="Estimated useful live">10</span> years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" id="xdx_880_eus-gaap--PropertyPlantAndEquipmentTextBlock_zloAPdyKhPvc" style="font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - PROPERTY AND EQUIPMENT (Details)"> <tr style="vertical-align: bottom"> <td><span id="xdx_8B0_zLBOVLTTbshj" style="display: none"> Schedule of property and equipment</span></td><td> </td> <td colspan="3" style="text-align: center"> </td><td> </td> <td colspan="3" style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="3" style="border-bottom: Black 1pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="3" style="border-bottom: Black 1pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2021</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 66%; text-align: left">Machine and equipment</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_985_eus-gaap--PropertyPlantAndEquipmentGross_iI_pp0p0_c20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember_zcMMoSEdpba1" style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right" title="Property plant and equipment gross">42,502</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_987_eus-gaap--PropertyPlantAndEquipmentGross_iI_pp0p0_c20211231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember_z5eT0qdGtqGi" style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right" title="Property plant and equipment gross">42,502</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left">Transportation equipment</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--PropertyPlantAndEquipmentGross_iI_pp0p0_c20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember_znRAYj1mSOO6" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Property plant and equipment gross">10,032</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_eus-gaap--PropertyPlantAndEquipmentGross_iI_pp0p0_c20211231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember_zfGUmjfdErA5" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Property plant and equipment gross">10,032</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_eus-gaap--PropertyPlantAndEquipmentGross_iI_pp0p0_c20221231_zGXr141nbdXd" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Property plant and equipment gross">52,534</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_eus-gaap--PropertyPlantAndEquipmentGross_iI_pp0p0_c20211231_zkOOVu4KYxY2" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Property plant and equipment gross">52,534</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Less accumulated depreciation</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iNI_pp0p0_di_c20221231_zmM3D08z4Djh" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Less accumulated depreciation">(22,256</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iNI_pp0p0_di_c20211231_zR0DOeKEuU53" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Less accumulated depreciation">(11,750</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 2.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_983_eus-gaap--PropertyPlantAndEquipmentNet_iI_pp0p0_c20221231_zBDmuWuKI22k" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Property plant and equipment net">30,278</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_982_eus-gaap--PropertyPlantAndEquipmentNet_iI_pp0p0_c20211231_zUYrTOR17uDa" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Property plant and equipment net">40,784</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 42502 42502 10032 10032 52534 52534 22256 11750 30278 40784 10506 10250 P3Y P10Y <p id="xdx_80B_ecustom--RoyaltyAndLicenseAgreementsTextBlock_zq1c8fpjWYPg" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 7 – <span id="xdx_823_zRkDc9f6Wf5e">ROYALTY AND LICENSE AGREEMENTS</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 30, 2017, the Company entered into a Master Agreement with TEO Inc. ("TEO"). TEO is the founder and majority controlling shareholder of the Company. The Master Agreement provides the Company a license to use the TEO name and logo on food products it sells and to apply TEO's pasteurization/sterilization processes to its products for improved shelf life and safety. Additional provisions provide the Company production rights to TEO's pasteurizer/sterilizer and rights to lease its own system when certain sales/production increase. <span id="xdx_909_ecustom--MasterAgreementDescription_c20171201__20171231" title="Master agreement, description">Pursuant to the Master Agreement, the Company agreed to pay an initial $1 million fee in installments with $100,000 due on June 30, 2018, $300,000 due on December 31, 2018 and the remaining $600,000 due in 12 equal monthly payments with the first payment due on January 31, 2019.</span> TEO Inc. has agreed to maintain the license through December 31, 2023 and accrue and accept payments due as funds are available. As of December 31, 2022, the Company has paid a total of $370,117 towards the license. TEO Inc. has agreed to extend the start date to January 1, 2024 of the use/royalty and service fee of 5.5% of the Company's gross revenue for food sales processed using TEO's intellectual property is payable quarterly.  The ongoing licensing is maintained by meeting minimum annual use/royalty and service fees. The Company may pay for the difference between the actual use and the minimum to maintain the license. The annual minimum is listed as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" id="xdx_882_ecustom--ScheduleOfAnnualMinimumUseroyaltyAndServiceFeeTableTextBlock_z7c1V1N0Efw1" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse" summary="xdx: Disclosure - ROYALTY AND LICENSE AGREEMENTS (Details)"> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: center"> </td> <td style="text-align: center"><span id="xdx_8B4_zmsyo1NZpllb" style="display: none">Schedule of Royalty and License Agreements</span></td> <td style="text-align: center"> </td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Year</span></td> <td> </td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Minimum Service Fee</span></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 1%; text-align: center"> </td> <td style="width: 43%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2024</span></td> <td style="width: 1%; text-align: center"> </td> <td style="width: 10%"> </td> <td style="width: 1%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td id="xdx_984_ecustom--MinimumServiceFeeDueNextThirdyear_c20221231_pp0p0" style="width: 43%; text-align: center" title="2024"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">500,000</span></td> <td style="width: 1%; text-align: center"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: center"> </td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2025</span></td> <td style="text-align: center"> </td> <td> </td> <td style="text-align: center"> </td> <td id="xdx_987_ecustom--MinimumServiceFeeDueInFourthYear_c20221231_pp0p0" style="text-align: center" title="2025"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">750,000</span></td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: center"> </td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2026</span></td> <td style="text-align: center"> </td> <td> </td> <td style="text-align: center"> </td> <td id="xdx_986_ecustom--MinimumServiceFeeDueInFifthYear_c20221231_pp0p0" style="text-align: center" title="2026"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,000,000</span></td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: center"> </td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Thereafter</span></td> <td style="text-align: center"> </td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_903_ecustom--Thereafter_c20220101__20221231" title="Thereafter">Increase 10% per year</span></span></td> <td style="text-align: center"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As a result of TEO being the majority shareholder of the Company and TEO's basis in the license being $0, the Company recorded a deemed dividend of $<span id="xdx_907_ecustom--DeemedDividend_pn3n3_dm_c20220101__20221231_zg8Ul2EAS8s7" title="Deemed dividend">1</span> million for the initial fee payable to TEO. As of December 31, 2022, and 2021, the outstanding balance of the license fee payable was $<span id="xdx_903_eus-gaap--DeferredRevenueCurrent_iI_pp0p0_c20221231_z694byXnGxVj" title="License fee payable">629,833</span> and $<span id="xdx_90E_eus-gaap--DeferredRevenueCurrent_iI_pp0p0_c20211231_zx9lN1dB9V7e" title="License fee payable">631,533</span>, respectively. For the years ended December 31, 2022, and 2021, the Company made payments toward the license of $<span id="xdx_90E_eus-gaap--ProceedsFromLicenseFeesReceived_pp0p0_c20220101__20221231_z0XfLWCpSny7" title="License fee">1,700</span> and $<span id="xdx_90E_eus-gaap--ProceedsFromLicenseFeesReceived_pp0p0_c20210101__20211231_zGfHEqSBk9G3" title="License fee">3,200</span>, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"/> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Effective April 1, 2020, the Company entered into an agreement whereby it assigned half and licensed half of the Nerys Brand for cheese products in Mexico, along with certain production equipment and facilities that the Company did not intend to transfer to its new facility for production, to a third party. In exchange, the Company receives a portion of net revenue from all products sold, which includes bulk meats and other products, by the acquirer, a royalty on all NERYS cheese products sold in Mexico of $0.01 per pound and will also receive five percent of the proceeds of any sale of the related acquirer’s business.</p> <p style="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company valued the royalty agreement at the book value of the assets transferred of $<span id="xdx_909_ecustom--RoyaltyAgreement_iI_pp0p0_c20211231_zoiwVFzvTueg" title="Royalty agreement">31,929</span>, which approximates the fair value and is recorded as an intangible asset on the consolidated balance sheets as of December 31, 2021.</p> <p style="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 7, 2022, the facility used by the licensee was destroyed in a fire. The licensee has informed the Company that its insurance will not pay the loss and as a result is closing all of its business operations. Pursuant to the agreement all rights to the NERYS cheese products sold in Mexico revert back to the Company and it is evaluating the economic viability of resuming fulfillment of the retail placements in Mexico.</p> <p style="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As a result, during the year ended December 31, 2022, the Company has written off the value of the royalty agreement totaling $<span id="xdx_909_ecustom--RoyaltyAgreementWriteoff_pp0p0_c20220101__20221231_zQDaJFdLCXlh" title="Royalty agreement write-off">31,929</span>, which is included within other income (expense) on the consolidated statements of operations and comprehensive loss.</p> <p style="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2022, the Company licensed the Nerys Brand for products sold outside Mexico to an international distributor of a variety of meat, fish, cheese and other food products throughout the USA, south and central America. In exchange it will receive a royalty on the NERYS branded products sold outside of Mexico and will be the supplier of these branded products.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"/> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> Pursuant to the Master Agreement, the Company agreed to pay an initial $1 million fee in installments with $100,000 due on June 30, 2018, $300,000 due on December 31, 2018 and the remaining $600,000 due in 12 equal monthly payments with the first payment due on January 31, 2019. <table cellpadding="0" cellspacing="0" id="xdx_882_ecustom--ScheduleOfAnnualMinimumUseroyaltyAndServiceFeeTableTextBlock_z7c1V1N0Efw1" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse" summary="xdx: Disclosure - ROYALTY AND LICENSE AGREEMENTS (Details)"> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: center"> </td> <td style="text-align: center"><span id="xdx_8B4_zmsyo1NZpllb" style="display: none">Schedule of Royalty and License Agreements</span></td> <td style="text-align: center"> </td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Year</span></td> <td> </td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Minimum Service Fee</span></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 1%; text-align: center"> </td> <td style="width: 43%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2024</span></td> <td style="width: 1%; text-align: center"> </td> <td style="width: 10%"> </td> <td style="width: 1%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td id="xdx_984_ecustom--MinimumServiceFeeDueNextThirdyear_c20221231_pp0p0" style="width: 43%; text-align: center" title="2024"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">500,000</span></td> <td style="width: 1%; text-align: center"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: center"> </td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2025</span></td> <td style="text-align: center"> </td> <td> </td> <td style="text-align: center"> </td> <td id="xdx_987_ecustom--MinimumServiceFeeDueInFourthYear_c20221231_pp0p0" style="text-align: center" title="2025"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">750,000</span></td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: center"> </td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2026</span></td> <td style="text-align: center"> </td> <td> </td> <td style="text-align: center"> </td> <td id="xdx_986_ecustom--MinimumServiceFeeDueInFifthYear_c20221231_pp0p0" style="text-align: center" title="2026"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,000,000</span></td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: center"> </td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Thereafter</span></td> <td style="text-align: center"> </td> <td> </td> <td style="text-align: center"> </td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_903_ecustom--Thereafter_c20220101__20221231" title="Thereafter">Increase 10% per year</span></span></td> <td style="text-align: center"> </td></tr> </table> 500000 750000 1000000 Increase 10% per year 1000000 629833 631533 1700 3200 31929 31929 <p id="xdx_801_eus-gaap--DebtDisclosureTextBlock_zbGmNGDmZFP7" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 8 – <span id="xdx_82B_zHRFETAScE5c">NOTES PAYABLE</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><span style="text-decoration: underline">Notes Payable</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 31, 2018, the Company issued a note for $<span id="xdx_90C_eus-gaap--DebtInstrumentFaceAmount_c20180731__us-gaap--LongtermDebtTypeAxis__custom--NotesPayableOneMember_pp0p0" title="Principal amount">100,000</span> in principal bearing interest at <span id="xdx_900_eus-gaap--DebtInstrumentInterestRateDuringPeriod_dp_c20180701__20180731__us-gaap--LongtermDebtTypeAxis__custom--NotesPayableOneMember_z0gd9WK5cDn" title="Interest rate">8</span>% maturing on October 31, 2018. This note was subsequently amended to extend the maturity date to <span id="xdx_901_eus-gaap--DebtInstrumentMaturityDate_dd_c20180701__20180731__us-gaap--LongtermDebtTypeAxis__custom--NotesPayableOneMember_zQ7Z9RpMY5Wa" title="Maturity date">December 31, 2023</span>. As of December 31, 2022 and 2021, the outstanding principal balance of the note was $<span id="xdx_90C_eus-gaap--NotesPayableCurrent_c20221231__us-gaap--LongtermDebtTypeAxis__custom--NotesPayableOneMember_pp0p0" title="Outstanding principal amount"><span id="xdx_903_eus-gaap--NotesPayableCurrent_iI_pp0p0_c20211231__us-gaap--LongtermDebtTypeAxis__custom--NotesPayableOneMember_zw4nD3izU5Mi" title="Outstanding principal amount">100,000</span></span>, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><span style="text-decoration: underline">Convertible Note Payable</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 28, 2018, the Company issued a note for $<span id="xdx_900_eus-gaap--DebtInstrumentFaceAmount_c20180628__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayableMember_pp0p0" title="Principal amount">100,000</span>. The note bears an <span id="xdx_90E_eus-gaap--DebtInstrumentInterestRateDuringPeriod_dp_c20180601__20180628__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayableMember_zabX5FHfBUb5" title="Interest rate">8</span>% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to <span id="xdx_909_eus-gaap--DebtInstrumentMaturityDate_dd_c20180601__20180628__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayableMember_zioh53QpYP54" title="Maturity date">December 31, 2023</span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 4, 2019, the Company issued a note for $<span id="xdx_904_eus-gaap--DebtInstrumentFaceAmount_iI_pp0p0_c20190204__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable1Member_zmGV7cB6B2Dc" title="Principal amount">120,000</span>. The note can be converted to common stock at $<span id="xdx_90E_eus-gaap--DebtInstrumentConvertibleConversionPrice1_iI_c20190204__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable1Member_z5dJmzqAFbhj" title="Conversion of shares price per share">0.20</span> per share or the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share and converts automatically upon certain conditions. The note bears no interest until September 30, 2019 and then bears <span id="xdx_907_eus-gaap--DebtInstrumentInterestRateDuringPeriod_dp_c20190201__20190204__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable1Member_zICnbHzTvnQ5" title="Interest rate">8</span>% interest, if not converted to common stock. This note was subsequently amended to extend the maturity date to <span id="xdx_90B_eus-gaap--DebtInstrumentMaturityDate_dd_c20190201__20190204__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable1Member_zKAZVe6ULae8" title="Maturity date">December 31, 2023</span>. On December 20, 2020, the holder converted $<span id="xdx_90D_eus-gaap--DebtInstrumentFaceAmount_iI_pp0p0_c20201220__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable1Member_zAuoVSec0sc2" title="Principal amount">27,500</span> in principal of this note to <span id="xdx_903_eus-gaap--DebtConversionConvertedInstrumentSharesIssued1_c20201201__20201220__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable1Member_zzZ7FPyd3pp5" title="Conversion of notes, Shares">137,500</span> common shares at $<span id="xdx_900_eus-gaap--SharesIssuedPricePerShare_iI_c20201220__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable1Member_zS4bCEjtQhw3" title="Price per share">0.20</span> per share.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 5, 2021, the Company issued a note for $<span id="xdx_900_eus-gaap--DebtInstrumentFaceAmount_iI_pp0p0_c20210505__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable2Member_zKZnMmoeB4P8" title="Principal amount">25,000</span>. The note bears an <span id="xdx_909_eus-gaap--DebtInstrumentInterestRateDuringPeriod_dp_c20210501__20210505__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable2Member_zNvNzkVfVCC6" title="Interest rate">8</span>% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to <span id="xdx_909_eus-gaap--DebtInstrumentMaturityDate_dd_c20210501__20210505__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable2Member_zFR9T0gIprm5" title="Maturity date">December 31, 2023</span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 1, 2021, the Company issued a note for $<span id="xdx_903_eus-gaap--DebtInstrumentFaceAmount_iI_pp0p0_c20210601__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable3Member_zS1unQwTusZ4" title="Principal amount">20,000</span>. The note bears an <span id="xdx_909_eus-gaap--DebtInstrumentInterestRateDuringPeriod_dp_c20210501__20210601__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable3Member_zpRvxVikevS4" title="Interest rate">8</span>% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to <span id="xdx_900_eus-gaap--DebtInstrumentMaturityDate_dd_c20210501__20210601__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable3Member_zN7JPoysj7wl" title="Maturity date">December 31, 2023</span>. On December 20, 2021, the holder converted $<span id="xdx_909_eus-gaap--DebtConversionConvertedInstrumentAmount1_c20211201__20211220__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable3Member_zJ8NSkqeUHP2" title="Conversion of notes">10,000</span> in principal of this note to <span id="xdx_903_eus-gaap--DebtConversionConvertedInstrumentSharesIssued1_c20211201__20211220__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable3Member_zgdRYY0YcdZ8" title="Conversion of shares">50,000</span> common shares at $<span id="xdx_907_eus-gaap--SharePrice_iI_c20211220__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable3Member_zEIr7g7hImFh" title="Share price">0.20</span> per share.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 2, 2021, the Company issued a note for $<span id="xdx_90B_eus-gaap--DebtInstrumentFaceAmount_iI_pp0p0_c20210602__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable4Member_zuvdnYkgkj8h" title="Principal amount">17,000</span>. The note bears an <span id="xdx_909_eus-gaap--DebtInstrumentInterestRateDuringPeriod_dp_c20210501__20210602__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable4Member_zxelEd8NCFgl" title="Interest rate">8</span>% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to <span id="xdx_90E_eus-gaap--DebtInstrumentMaturityDate_dd_c20210501__20210602__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable4Member_zkglMPvDMJWe" title="Maturity date">December 31, 2023</span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 12, 2021, the Company issued a note for $<span id="xdx_90A_eus-gaap--DebtInstrumentFaceAmount_iI_pp0p0_c20210712__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable5Member_zWcY0a503beb" title="Principal amount">40,000</span>. The note bears an <span id="xdx_90A_eus-gaap--DebtInstrumentInterestRateDuringPeriod_dp_c20210701__20210712__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable5Member_zZQbGBHYIcSg" title="Interest rate">8</span>% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to <span id="xdx_907_eus-gaap--DebtInstrumentMaturityDate_dd_c20210701__20210712__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable5Member_zlxTGculfOTc" title="Maturity date">December 31, 2023</span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 29, 2021, the Company issued a note for $<span id="xdx_908_eus-gaap--DebtInstrumentFaceAmount_c20210929__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable6Member_pp0p0" title="Principal amount">15,000</span>. The note bears an <span id="xdx_904_eus-gaap--DebtInstrumentInterestRateDuringPeriod_dp_c20210901__20210929__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable6Member_zwW9zXoPX0Fi" title="Interest rate">8</span>% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to <span id="xdx_907_eus-gaap--DebtInstrumentMaturityDate_dd_c20210901__20210929__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable6Member_zbynVScA5PJ5" title="Maturity date">December 31, 2023</span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On November 24, 2021, the Company issued a note for $<span id="xdx_90B_eus-gaap--DebtInstrumentFaceAmount_iI_pp0p0_c20211124__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable7Member_zASSFkY5ym1c" title="Principal amount">40,000</span>. The note bears an <span id="xdx_90D_eus-gaap--DebtInstrumentInterestRateDuringPeriod_dp_c20211101__20211124__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable7Member_zKWRT9ecmmCc" title="Interest rate">8</span>% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to <span id="xdx_908_eus-gaap--DebtInstrumentMaturityDate_dd_c20211101__20211124__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable7Member_zYQxG8piHb42" title="Maturity date">December 31, 2023</span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 14, 2022, the Company issued a note for $<span id="xdx_901_eus-gaap--DebtInstrumentFaceAmount_iI_pp0p0_c20220414__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable8Member_zQ7GuQFuVjTa" title="Principal amount">6,000</span>. The note bears an <span id="xdx_90D_eus-gaap--DebtInstrumentInterestRateDuringPeriod_dp_c20220402__20220414__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable8Member_zS6XJGl7BaMf" title="Interest rate">8</span>% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. This note was subsequently amended to extend the maturity date to <span id="xdx_909_eus-gaap--DebtInstrumentMaturityDate_dd_c20220402__20220414__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayable8Member_zGnkIQhczgme" title="Maturity date">December 31, 2023</span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2022 and 2021, there was not a quoted bid price available as the Company’s shares were not listed on any exchanges. As the minimum conversion rate at the time of issuance is greater than or equal to the current stock value based on other similar transactions, these notes are not deemed to have an embedded derivative associated with them.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The principal balance of convertible debt at December 31, 2022 and 2021 amounted to $<span id="xdx_90F_eus-gaap--ConvertibleNotesPayableCurrent_iI_pp0p0_c20221231__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayableMember_zQzis4TPNxOd" title="Convertible note payable">345,500</span> and $<span id="xdx_90C_eus-gaap--ConvertibleNotesPayableCurrent_iI_pp0p0_c20211231__us-gaap--LongtermDebtTypeAxis__custom--ConvertibleNotePayableMember_zhn0BQ4oiDXd" title="Convertible note payable">339,500</span>, respectively.</p> <p style="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> 100000 0.08 2023-12-31 100000 100000 100000 0.08 2023-12-31 120000 0.20 0.08 2023-12-31 27500 137500 0.20 25000 0.08 2023-12-31 20000 0.08 2023-12-31 10000 50000 0.20 17000 0.08 2023-12-31 40000 0.08 2023-12-31 15000 0.08 2023-12-31 40000 0.08 2023-12-31 6000 0.08 2023-12-31 345500 339500 <p id="xdx_80A_eus-gaap--EquityMethodInvestmentsDisclosureTextBlock_zWHYqfvSiaWi" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 9 – <span id="xdx_82B_zVUriKbFP71g">EQUITY</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><span style="text-decoration: underline">Preferred Stock</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span id="xdx_909_eus-gaap--PreferredStockVotingRights_c20220101__20221231_zXoAdK5rZkDk" title="Preferred stock voting rights">Each share of Class A Preferred Stock may be converted by the holder upon request of the holder into 10 shares of common stock. Each holder is entitled to 100 votes for each share of Class A Preferred Stock held on the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company (and written actions of stockholders in lieu of meetings) with respect to any and all matters presented to the stockholders of the Company for their action or consideration. The holders are entitled to dividends, if any, as declared by the Company and participate pari passu with the common stock of the Company at the conversion rate.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> Each share of Class A Preferred Stock may be converted by the holder upon request of the holder into 10 shares of common stock. Each holder is entitled to 100 votes for each share of Class A Preferred Stock held on the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company (and written actions of stockholders in lieu of meetings) with respect to any and all matters presented to the stockholders of the Company for their action or consideration. The holders are entitled to dividends, if any, as declared by the Company and participate pari passu with the common stock of the Company at the conversion rate. <p id="xdx_809_eus-gaap--IncomeTaxDisclosureTextBlock_zV1mB6V4saG2" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 10 - <span id="xdx_829_zbDlh3iLlgzc">INCOME TAXES</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The U.S. federal income tax rate is <span id="xdx_90F_eus-gaap--EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate_dp_c20220101__20221231_zFfjfz8Er298" title="Federal income tax rate">21</span>%.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The provision for Federal income tax consists of the following December 31:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" id="xdx_899_eus-gaap--ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock_zxoW2Z0Ko1ui" style="font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - INCOME TAXES (Details)"> <tr style="vertical-align: bottom"> <td><span id="xdx_8B9_zJeFzE4RpiJi" style="display: none"> Schedule of provision for income tax</span></td><td> </td> <td colspan="3" id="xdx_49A_20220101__20221231_z0EP9lz399G1" style="text-align: center"> </td><td> </td> <td colspan="3" id="xdx_495_20210101__20211231_zO9RtyIdE1w5" style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">Federal income tax benefit attributable to:</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="3" style="border-bottom: Black 1pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="3" style="border-bottom: Black 1pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2021</td></tr> <tr id="xdx_40D_ecustom--FederalIncomeTaxExpenseBenefitContinuingOperation_maCFTEBzpac_zVkMsGBXBbNh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 66%; text-align: left">Current Operations</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">72,934</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">83,423</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--ValuationAllowanceDeferredTaxAssetChangeInAmount_iN_di_msCFTEBzpac_zGcozyEkHwd7" style="vertical-align: bottom; background-color: transparent"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Less: valuation allowance</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(72,934</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(83,423</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40D_eus-gaap--CurrentFederalTaxExpenseBenefit_iT_pp0p0_mtCFTEBzpac_zD0kFCPjtEdk" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Net provision for Federal income taxes</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0707">—</span>  </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0708">—</span>  </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p id="xdx_8A1_zoK8yKVdgn2f" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The cumulative tax effect at the expected rate of 21% of significant items comprising our net deferred tax amount is as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" id="xdx_895_eus-gaap--ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock_zDGXnLDnDJR4" style="font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - INCOME TAXES (Details 1)"> <tr style="vertical-align: bottom"> <td><span id="xdx_8BE_zTqyTblO9FG2" style="display: none"> Schedule of deferred tax asset</span></td><td> </td> <td colspan="3" id="xdx_498_20221231_zQsjfwnyyeE3" style="text-align: center"> </td><td> </td> <td colspan="3" id="xdx_498_20211231_zsrkzlPll5l7" style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">Deferred tax asset attributable to:</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="3" style="border-bottom: Black 1pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="3" style="border-bottom: Black 1pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2021</td></tr> <tr id="xdx_403_eus-gaap--DeferredTaxAssetsOperatingLossCarryforwards_iI_pp0p0_maDTANzO50_zWJak58g5x4l" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 66%; text-align: left">Net operating loss carryover</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">313,455</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">240,521</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--DeferredTaxAssetsValuationAllowance_iNI_pp0p0_di_msDTANzO50_zdHforkwMWkl" style="vertical-align: bottom; background-color: transparent"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Less: valuation allowance</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(313,455</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(240,521</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_408_eus-gaap--DeferredTaxAssetsNet_iTI_pp0p0_mtDTANzO50_zOfFlf1RGTSc" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Net deferred tax asset</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0718">—</span>  </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0719">—</span>  </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p id="xdx_8A2_zjyIedajPzhc" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2022, the Company had net operating loss carry forwards of approximately $<span id="xdx_90D_eus-gaap--OperatingLossCarryforwards_iI_pp0p0_c20221231_z33AEmmnXYjf" title="Net operating loss carry forwards">1,376,000</span> that may be offset against future taxable income. <span id="xdx_901_eus-gaap--IncomeTaxExpenseBenefit_pp0p0_do_c20220101__20221231_zB0jQlfvr6uj" title="Income tax expense benefit"><span id="xdx_907_eus-gaap--IncomeTaxExpenseBenefit_pp0p0_do_c20210101__20211231_zmYsvNWuQeHh" title="Income tax expense benefit">No</span></span> tax benefit has been reported in the December 31, 2022 and 2021 consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company’s financial statements. ASC 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than- not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of December 31, 2022 and 2021, the Company had <span id="xdx_904_eus-gaap--UnrecognizedTaxBenefitsIncomeTaxPenaltiesAndInterestAccrued_iI_pp0p0_do_c20221231_zsHcQpSsCOd2" title="Accrued interest or penalties"><span id="xdx_90C_eus-gaap--UnrecognizedTaxBenefitsIncomeTaxPenaltiesAndInterestAccrued_iI_pp0p0_do_c20211231_zbQSJLDM06e9" title="Accrued interest or penalties">no</span></span> accrued interest or penalties related to uncertain tax positions.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> 0.21 <table cellpadding="0" cellspacing="0" id="xdx_899_eus-gaap--ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock_zxoW2Z0Ko1ui" style="font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - INCOME TAXES (Details)"> <tr style="vertical-align: bottom"> <td><span id="xdx_8B9_zJeFzE4RpiJi" style="display: none"> Schedule of provision for income tax</span></td><td> </td> <td colspan="3" id="xdx_49A_20220101__20221231_z0EP9lz399G1" style="text-align: center"> </td><td> </td> <td colspan="3" id="xdx_495_20210101__20211231_zO9RtyIdE1w5" style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">Federal income tax benefit attributable to:</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="3" style="border-bottom: Black 1pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="3" style="border-bottom: Black 1pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2021</td></tr> <tr id="xdx_40D_ecustom--FederalIncomeTaxExpenseBenefitContinuingOperation_maCFTEBzpac_zVkMsGBXBbNh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 66%; text-align: left">Current Operations</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">72,934</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">83,423</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--ValuationAllowanceDeferredTaxAssetChangeInAmount_iN_di_msCFTEBzpac_zGcozyEkHwd7" style="vertical-align: bottom; background-color: transparent"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Less: valuation allowance</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(72,934</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(83,423</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40D_eus-gaap--CurrentFederalTaxExpenseBenefit_iT_pp0p0_mtCFTEBzpac_zD0kFCPjtEdk" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Net provision for Federal income taxes</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0707">—</span>  </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0708">—</span>  </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 72934 83423 72934 83423 <table cellpadding="0" cellspacing="0" id="xdx_895_eus-gaap--ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock_zDGXnLDnDJR4" style="font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - INCOME TAXES (Details 1)"> <tr style="vertical-align: bottom"> <td><span id="xdx_8BE_zTqyTblO9FG2" style="display: none"> Schedule of deferred tax asset</span></td><td> </td> <td colspan="3" id="xdx_498_20221231_zQsjfwnyyeE3" style="text-align: center"> </td><td> </td> <td colspan="3" id="xdx_498_20211231_zsrkzlPll5l7" style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">Deferred tax asset attributable to:</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="3" style="border-bottom: Black 1pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="3" style="border-bottom: Black 1pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2021</td></tr> <tr id="xdx_403_eus-gaap--DeferredTaxAssetsOperatingLossCarryforwards_iI_pp0p0_maDTANzO50_zWJak58g5x4l" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 66%; text-align: left">Net operating loss carryover</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">313,455</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">240,521</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--DeferredTaxAssetsValuationAllowance_iNI_pp0p0_di_msDTANzO50_zdHforkwMWkl" style="vertical-align: bottom; background-color: transparent"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Less: valuation allowance</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(313,455</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(240,521</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_408_eus-gaap--DeferredTaxAssetsNet_iTI_pp0p0_mtDTANzO50_zOfFlf1RGTSc" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Net deferred tax asset</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0718">—</span>  </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0719">—</span>  </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 313455 240521 313455 240521 1376000 0 0 0 0 <p id="xdx_80E_eus-gaap--RelatedPartyTransactionsDisclosureTextBlock_zDJa8Q2Ve6x" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 11 - <span id="xdx_82B_zCp7LAYlvP49">RELATED PARTY TRANSACTIONS</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has various related party payables derived from normal operating activities. These balances are non-interest bearing and are periodically settled as cash flow permits. These payables include accrued compensation to officers. Accrued fees for services owed to the CEO as of December 31, 2022 and December 31, 2021 was $<span id="xdx_906_eus-gaap--AccruedProfessionalFeesCurrent_iI_pp0p0_c20221231__srt--TitleOfIndividualAxis__srt--ChiefExecutiveOfficerMember_zZ0Nnjq0vA73" title="Accrued fees">211,100</span> and $<span id="xdx_904_eus-gaap--AccruedProfessionalFeesCurrent_iI_pp0p0_c20211231__srt--TitleOfIndividualAxis__srt--ChiefExecutiveOfficerMember_zbw1xjfBxhb6" title="Accrued fees">85,100</span>, respectively, and are included within accounts payable and accrued expenses on the consolidated balance sheets. Cash advances made by the CEO as of December 31, 2022 and 2021 was $<span id="xdx_906_eus-gaap--CustomerAdvancesAndDeposits_iI_pp0p0_c20221231__srt--TitleOfIndividualAxis__srt--ChiefExecutiveOfficerMember_z7sdilSiGAUe" title="Cash advances">130,100</span> and $<span id="xdx_903_eus-gaap--CustomerAdvancesAndDeposits_iI_pp0p0_c20211231__srt--TitleOfIndividualAxis__srt--ChiefExecutiveOfficerMember_zULcbdfTu5Ud" title="Cash advances">0</span>, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><span style="text-decoration: underline">Master License Agreement</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 30, 2017, the Company entered into a Master Agreement with TEO, the founder and majority controlling shareholder of the Company. See Note 7.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> 211100 85100 130100 0 <p id="xdx_80F_eus-gaap--CommitmentsAndContingenciesDisclosureTextBlock_zeeeH4gdVPc" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 12 – <span id="xdx_829_zXGXHtrklidg">COMMITMENTS AND CONTINGENCIES</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the normal course of business, the Company may be exposed to litigation. When the Company becomes aware of potential litigation, it evaluates the merits of the case in accordance with FASB ASC 450-20-50, <i>Contingencies</i>. The Company evaluates its exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If the Company determines that an unfavorable outcome is probable and can be reasonably estimated, it establishes the necessary accruals. As of December 31, 2022, the Company is not aware of any contingent liabilities that should be reflected in the financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2020, the Company had three leases on commercial units that are contiguous in the same building located in Tijuana Mexico and comprising approximately 38,000 square feet total. The leases are 12 month leases with option to renew for additional 12 month periods. The total rents are currently approximately $<span id="xdx_901_eus-gaap--OtherExpenses_c20220101__20221231_pp0p0" title="Rent Expenses">16,000</span> per month gross with no additional common fees or other charges. The Company paid a total of $<span id="xdx_90D_eus-gaap--OperatingLeasesRentExpenseNet_pp0p0_c20220101__20221231_zD1McxWeWhu7" title="Lease rent">135,691</span> in the year ended December 31, 2022 related to is leases of commercial units in Tijuana.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt/106% Times New Roman, Times, Serif; margin: 0">The leases are short term in nature as the Company is not certain to renew the leases.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> 16000 135691 <p id="xdx_803_eus-gaap--ConcentrationRiskDisclosureTextBlock_zfBAcVctYmfe" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><br/> NOTE 13 – <span id="xdx_829_zTyhW6r9CpV5">CONCENTRATIONS</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><span style="text-decoration: underline">Cash Deposit</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At December 31, 2022 and 2021, <span id="xdx_90C_eus-gaap--CashFDICInsuredAmount_iI_pp0p0_do_c20221231_zdQbxOhZm9L7" title="Federally insured limit"><span id="xdx_90F_eus-gaap--CashFDICInsuredAmount_iI_pp0p0_do_c20211231_zUPLFQA3YIwl" title="Federally insured limit">no</span></span> cash balances exceeded the federally insured limit.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> 0 0 <p id="xdx_809_eus-gaap--SubsequentEventsTextBlock_zU5KjGfA2ayb" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 14 - <span id="xdx_823_z3aXc8uk6HY9">SUBSEQUENT EVENTS</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2023 the Company’s Common Stock was listed for quotation on the OTXQB under the symbol TEOF. Depository Trust Company (DTC) approval was received in March 2023, in April the initial qualifying deposit was made and no trades have occurred.</p> <p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has evaluated subsequent events for recognition and disclosure through April 17, 2023 which is the date the consolidated financial statements were available to be issued. No other matters were identified affecting the accompanying consolidated financial statements and related disclosures.</p> <p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> EXCEL 55 Financial_Report.xlsx IDEA: XBRL DOCUMENT begin 644 Financial_Report.xlsx M4$L#!!0 ( /.*D58'04UB@0 +$ 0 9&]C4')O<',O87!P+GAM M;$V./0L",1!$_\IQO;=!P4)B0-!2L+(/>QLOD&1#LD)^OCG!CVX>;QA&WPIG M*N*I#BV&5(_C(I(/ !47BK9.7:=N')=HI6-Y #OGDK7A.YNJQ<&4GPZ4A!0W_J=0U[R;UEA_6\#MI7E!+ P04 M " #SBI%6/#A0.>X K @ $0 &1O8U!R;W!S+V-O&ULS9+! M:L,P#(9?9?B>*''*!B;UI:.G#@8K;.QF;+4UBV-C:R1]^R5>FS*V!]C1TN]/ MGT"M#D+[B,_1!XQD,=V-KNN3T&'-3D1! 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