Deconsolidation of Foreign Subsidiaries

12 Months Ended

Dec. 31, 2023

Deconsolidation Of Foreign Subsidiaries

Deconsolidation of Foreign Subsidiaries

Note 3 – Deconsolidation of Foreign Subsidiaries

On December 22, 2023, our wholly-owned subsidiary, One World Products, S.A.S., a Colombian Simplified Shares Company, filed for protection under Colombian Law 1116 of 2006, which is the primary legislation governing business insolvency proceedings (restructuring and liquidation) (“Reorganization Proceedings”) in Colombia. The Reorganization Proceeds are similar to Chapter 11 of the Bankruptcy Code in the United States, whereby the Company intends to restructure its debts and continue to operate. The plan of reorganization and assessment of valid claims has not yet been determined, or approved by the court and creditors, as necessary. OWP SAS has currently identified approximately 23 creditors, consisting of approximately $1.2 million of financial obligations, collectively. In accordance with ASC 810-10-15, the Company has deconsolidated its foreign subsidiaries until it emerges from the Reorganization Proceedings to include the petitioning entity, OWP SAS. Given the lack of independently identifiable operations, the Company has also deconsolidated its non-operating shell entities, Agrobase, S.A.S. and Hope Colombia, S.A.S (collectively, the “Foreign Subsidiaries”). The deconsolidation resulted in a loss on deconsolidation of foreign subsidiaries in the amount of $1,564,823 for the year ended December 31, 2023. There were no income, losses or cash flows within the Foreign Subsidiaries between the date of petition on December 22, 2023 and December 31, 2023. A summary of the deconsolidated condensed combined balance sheet of the Foreign Subsidiaries as of December 31, 2023 is as follows:

FOREIGN SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

	December 31,
	2023
Assets
Current assets:
Cash	$	1,660
Inventory		45,791
Other current assets		2,687
Total current assets		50,138
Other assets		226,542
Fixed assets, net		2,346,281
Total Assets	$	2,622,961
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable	$	392,403
Accrued expenses		482,587
Notes payable		183,148
Intercompany liability owed to OWP Ventures, Inc.		7,348,034
Total current liabilities		8,406,172
Stockholders’ Equity (Deficit):
Accumulated (deficit)		(5,783,211	)
Total Stockholders’ Equity (Deficit)		(5,783,211	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	2,622,961