UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
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NETBRANDS CORP.
QUARTERLY REPORT ON FORM 10-Q
March 31, 2023
TABLE OF CONTENTS
| PAGE | ||
| PART I - FINANCIAL INFORMATION | 3 | |
| Item 1. | Condensed Financial Statements | 3 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 4 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 7 |
| Item 4. | Controls and Procedures | 7 |
| PART II - OTHER INFORMATION | 8 | |
| Item 1. | Legal Proceedings | 8 |
| Item 1A. | Risk Factors | 8 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 8 |
| Item 3. | Defaults Upon Senior Securities | 8 |
| Item 4. | Mine Safety Disclosure | 8 |
| Item 5. | Other Information | 8 |
| Item 6. | Exhibits | 9 |
| SIGNATURES | 10 | |
| 2 |
PART I – FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS.
The following unaudited interim condensed financial statements of NetBrands Corp. (referred to herein as the “Company,” “we,” “us” or “our”) are included in this Quarterly Report on Form 10-Q (the “Quarterly Report”).
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States and the rules of the Securities and Exchange Commission (the “SEC”), and should be read in conjunction with the audited condensed financial statements and notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 which we filed with the SEC on March 23, 2023 (the “Annual Report”), as updated in subsequent filings we have made with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.
| 3 |
NetBrands Corp.
(formerly known as Global Diversified Marketing Group Inc.)
Condensed Financial Statements for the Three Months Ended March 31, 2023
Index to the Unaudited Consolidated Condensed Financial Statements
| F-1 |
NetBrands Corp.
Formerly Known as Global Diversified Marketing Group Inc.
Consolidated Balance Sheets
| March 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Prepaid expenses | ||||||||
| Inventory | ||||||||
| Other assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right of use assets | ||||||||
| Other assets-security deposit | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expense | $ | $ | ||||||
| Current portion of operating lease payable | ||||||||
| Government loans payable | ||||||||
| Loans payable | ||||||||
| Total current liabilities | ||||||||
| Lease liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ (Deficit): | ||||||||
| Preferred stock, Series A $ par value, shares authorized, issued and outstanding | ||||||||
| Common stock, $ par value, shares authorized; and issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| Total stockholders’ (deficit) | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ (deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.
| F-2 |
NetBrands Corp.
Formerly Known as Global Diversified Marketing Group Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended | Three Months Ended | |||||||
| March 31, | March 31, | |||||||
| 2023 | 2022 | |||||||
| Sales, net | $ | $ | ||||||
| Cost of goods sold | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Payroll and taxes | ||||||||
| Legal and professional fees | ||||||||
| Rent | ||||||||
| Selling, general and administrative and expenses | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other (expense) | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Total other (expense) | ( | ) | ( | ) | ||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes (benefit) | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted loss per common share | $ | ( | ) | $ | ( | ) | ||
| Weighted-average number of common shares outstanding: | ||||||||
| Basic and diluted | ||||||||
The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.
| F-3 |
NetBrands Corp.
Formerly Known as Global Diversified Marketing Group Inc.
Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited)
| Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Accumulated Other Comprehensive | Total Stockholders’ | |||||||||||||||||||||||||||
| Shares | Value | Shares | Value | Capital | Deficit | Income(Loss) | Equity | |||||||||||||||||||||||||
| Balance, December 31, 2021 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||
| Common stock issued for services | ||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance, March 31, 2022 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||
| Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Accumulated Other Comprehensive | Total Stockholders’ | |||||||||||||||||||||||||||
| Shares | Value | Shares | Value | Capital | Deficit | Income(Loss) | Equity | |||||||||||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance, March 31, 2023 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.
| F-4 |
NetBrands Corp.
Formerly Known as Global Diversified Marketing Group Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended | Three Months Ended | |||||||
| March 31, | March 31, | |||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities | ||||||||
| Net (loss) | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Stock based compensation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid expenses | ||||||||
| Right of use assets | ||||||||
| Inventory | ||||||||
| Other assets | ( | ) | ||||||
| Operating lease payable | ( | ) | ( | ) | ||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Net cash (used in) operating activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Increase (decrease) in loans payable | ( | ) | ||||||
| Government loans | ( | ) | ||||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Effect of exchange rates on cash and cash and cash equivalents | ||||||||
| Net (decrease) in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.
| F-5 |
NetBrands Corp.
(Formerly known as Global Diversified Marketing Group Inc.)
Notes To Unaudited Condensed Financial Statements For The Periods
Ended March 31, 2023 And 2022
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
NetBrands
Corp., formerly known as Global Diversified Marketing Group Inc. ( “NetBrands” or the “Company”), was incorporated
as Dense Forest Acquisition Corporation, in
On November 26, 2018, the Company effected the acquisition of Global Diversified Holdings, Inc. (“GDHI”), a private New York company owned by the Company’s president, with the issuance of shares of the Company’s common stock in exchange for all of the outstanding shares of GDHI. GDHI became a wholly-owned subsidiary of the Company, and its activity for the years 2022 and 2021 is reflected in these condensed financial statements along with the expenses of the Company.
Prior to the acquisition of GDHI, the Company had no business and no operations. Pursuant to the acquisition, the Company acquired the operations and business plan of GDHI, which imports and sells snack food products. For accounting purposes, GDHI is considered to be the acquirer, and the equity is presented as if the business combination had occurred on January 1, 2017.
On
August 31, 2022, the Company entered into an Asset Purchase Agreement with InPlay Capital Inc., a Delaware corporation (“InPlay”),
pursuant to which, on the same date, the Company purchased from InPlay all of the assets used in the operation and conduct of its business
relating to the online home fitness store known as “The Hula Fit”, including the Shopify Store and the TikTok, Facebook and
Google ad accounts, for a purchase price of $
On March 29, 2023, the Company filed an Amendment to its Certificate of Incorporation (the “Amendment”) effecting the change of the Company’s name to “NetBrands Corp.”, a name that reflects the planned expansion of the Company’s digital business. In connection with the name change, the Company submitted to the Financial Industry Regulatory Authority, Inc. (“FINRA”) a voluntary request for the change of its OTC trading symbol. In the meantime, the Company’s common stock will remain listed for quotation under the current symbol “GDMK.”
Basis of Presentation
The condensed financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. Certain prior year amounts have been reclassified to conform to the presentation in the current year. The Company has adopted a December 31 year-end.
Management’s Representation of Interim Condensed Financial Statements
The accompanying unaudited consolidated condensed financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual condensed financial statements. Certain information and footnote disclosures normally included in condensed financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated condensed financial statements include all of the adjustments, which in the opinion of management are necessary for a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year.
Principles of Consolidation
The accompanying consolidated condensed financial statements include the accounts of the Company and its wholly-owned subsidiary, Global Diversified Holdings, Inc. All intercompany accounts and transactions have been eliminated in consolidation.
Fair Value of Financial Instruments
The Company’s financial instruments consist of cash, accounts receivable from customers, accounts payable, and loans payable. The carrying amounts of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these condensed financial statements.
Use of Estimates
The preparation of condensed financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates.
Stock-Based Compensation
The Company accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This Section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. During the three months ended March 31, 2023 and March 31, 2022 stock-based compensation was $-- and $, respectively.
| F-6 |
Cash and Cash Equivalents
The
Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. On March 31,
2023, and December 31, 2022, the Company had $
Accounts Receivable
Accounts receivable are generated from sales of snack food products to retail outlets throughout the United States. The Company performs ongoing credit evaluations of its customers and adjusts credit limits based on customer payment and current creditworthiness, as determined by review of their current credit information. The Company continuously monitors credit limits for its customers and maintains a provision for estimated credit losses based on its historical experience and any specific customer issues that have been identified. An allowance for doubtful; accounts are provided against accounts receivable for amounts management believes may be uncollectible. The Company historically has not had issues collecting on its accounts receivable from its customers. The Company factors certain of its receivables to improve its cash flow.
Bad
debt expense for the three months ended March 31, 2023, and 2022 was $-
Inventory
Inventory, which is comprised of snack food products and packaging supplies is charged to inventory when purchased, is stated at the lower of cost or net realizable value with cost determined under the first-in, first-out (“FIFO”) method. The Company does not carry any raw materials.
The Company evaluates inventory levels quarterly value based upon assumptions about future demand and market conditions. Any inventory that has a cost basis in excess of its expected net realizable value, inventory that becomes obsolete, inventory in excess of expected sales requirements, inventory that fails to meet commercial sale specifications or is otherwise impaired are written down with a corresponding charge to the statement of operations in the period that the impairment is first identified. The Company performed its evaluation on March 31, 2023 and December 30, 2022, and determined that no write-down was required.
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful life of the assets. Maintenance, repairs, and renewals that do not materially add to the value of the equipment nor appreciably prolong its useful life are charged to expense as incurred.
Revenue Recognition
The Company recognizes revenue from product sales when control of the promised goods are transferred to our clients in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation. Typically, the Company receives a detailed purchase order from large retailers that specify the goods ordered, their price, payment terms and the required delivery date. Once the delivery of items on the purchase order is made to the client and title passes, the Company has met its performance obligation and recognizes revenue.
| F-7 |
Advertising and Marketing Costs
The
Company’s policy regarding advertising and marketing is to record the expense when incurred. The Company incurred advertising and
marketing expenses of $
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate the carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Intangible Assets
Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter.
We perform an annual impairment assessment for intangible assets during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount.
Determining the fair value of intangible assets is judgmental in nature and requires the use of significant estimates and assumptions.
On
September 30, 2022, we conducted an impairment analysis and determined that our purchase of Hula Fit was fully impaired. As a result, we
recorded an impairment loss of $
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
The Company’s income tax returns are open for examination for up to the past three years under the statute of limitations. There are no tax returns currently under examination.
Leases
The majority of our lease obligations are real estate operating leases from which we conduct our business. For any lease with an initial term in excess of 12 months, the related lease assets and liabilities are recognized on the Consolidated Balance Sheets as either operating or finance leases at the inception of an agreement where it is determined that a lease exists. Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets; we recognize lease expense for these leases on a straight-line basis over the lease term.
Leases with an initial term of 12 months or less, or that are on a month-to-month basis are not recorded on our Consolidated Balance Sheets; we recognize lease expense for these leases on a straight-line basis over the lease term.
Operating lease assets represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at commencement date. We use a collateralized incremental borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. Our lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term.
| F-8 |
As
of March 31, 2023, we had $
Comprehensive Income
The
Company has established standards for reporting and displaying comprehensive income, its components, and accumulated balances. When
applicable, the Company would disclose this information on its Statement of Stockholders’ Equity. Comprehensive income
comprises equity except those resulting from investments by owners and distributions to owners. During the periods ended March 31,
2023 and December 31, 2022, the Company had a balance of $
Basic income (loss) per share has been calculated based on the weighted average number of shares of common stock outstanding during the period. As of March 31, 2023 the Company had no dilutive instruments that could increase the number of shares if exercised or converted.
Recent Accounting Pronouncements
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position, or cash flow.
NOTE 2 – GOING CONCERN
As
of March 31, 2023, the Company had cash and cash equivalents of $
NOTE 3 – CAPITAL STOCK
The Company has shares of $ par value common stock authorized. The Company had and shares of common stock issued and outstanding as of March 31, 2023, and December 31, 2022, respectively. There were no stock issuances in the first fiscal quarter of 2023.
2022 Common Stock Issuances for Services
During
the three months ended March 31, 2022, the Company issued shares of its common stock for services, which were valued at $
During the three months ended June 30, 2022, the Company issued an aggregate of (a) shares of common stock to the members of the Company’s board of directors, valued at $ per share, and (b) shares of common stock to the members of its board of directors in lieu of cash payments, valued at $ per share. The Company also issued shares of common stock to a service provider, valued at $ per share.
During the three months ended September 30, 2022, the Company issued an aggregate of shares to consultants and to an investor relations firm valued at an average of approximately $ per share.
| F-9 |
During the three months ended December 31, 2022, the Company issued shares of common stock to a member of the Company’s board of directors valued at $ per share.
Preferred Stock
The
Company has
shares of $
par value preferred stock authorized. On February 24, 2020, the Company filed a Certificate of Designation for a class of preferred
stock designated Class A Super Voting Preferred Stock (“A Stock”). There are
shares of A Stock designated.
As
a result of
NOTE 4 – RELATED PARTY TRANSACTIONS
On
August 31, 2022, the Company entered into an Asset Purchase Agreement with InPlay Capital Inc., a Delaware corporation (“InPlay”),
pursuant to which the Company purchased from InPlay all of the assets used in the operation its business
relating to the online home fitness store known as “The Hula Fit”, including the Shopify Store and the TikTok, Facebook and
Google ad accounts, for a purchase price of $
NOTE 5 – COMMITMENTS AND CONTINGENCIES
The
Company has two primary leases. The Company leases approximately
In
March 2022,
Future minimum lease payments due under these operating leases, including renewal periods, are as follows:
| December 31, 2023 | ||||
| December 31, 2024 | ||||
| December 31, 2025 | ||||
| December 31, 2026 | ||||
| December 31, 2027 | ||||
| Total | $ |
NOTE 6 – LOANS PAYABLE
The Company had various loans outstanding on March 31, 2023, and December 31, 2022. All of these loans were short-term in nature, with varying rates of interest and fees, and no set minimum monthly payments, as follows:
| Fund box (c) | $ | $ | ||||||
| Can Capital (d) | ||||||||
| Credit Line – Loan Builder(b) | ||||||||
| Credit Line – Webster Bank(a) | ||||||||
| Total loans payable | $ | $ |
| (a) |
| F-10 |
| (b) | ||
| (c) | ||
| (d) |
Government loans payable
As
of March 31, 2022 and December 31, 2022, the Company had $
NOTE 7 – CONCENTRATIONS
The
Company does substantially all of its business with five customers. These customers accounted for
| March 31, 2023 | March 31, 2022 | |||||||
| Customer A | ||||||||
| Customer B | ||||||||
| Customer C | ||||||||
| Customer D | ||||||||
| Customer E | ||||||||
| Total | % | % | ||||||
NOTE 8 – SUBSEQUENT EVENTS
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to March 31, 2023, to the date these condensed financial statements were issued, and has determined that it does not have any other material subsequent events to disclose in these condensed financial statements except as follows:
On
April 10, 2023, the Company’s CEO, Paul Adler extended a short-term, unsecured loan to the Company in the principal amount of
$
| F-11 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The information set forth in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including, among others (I) increase in our revenue and profitability, (ii) prospective business opportunities and (iii) our strategy for financing our business. Forward-looking statements are statements other than historical information or statements of current condition. Some forward-looking statements may be identified by use of terms such as “believes”, “anticipates”, “intends” or “expects”. These forward-looking statements relate to our plans, liquidity, ability to complete financing, to enter into future agreements with companies, and plans to successfully expand our business operations and the sale of our products. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.
Although we believe that our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this Quarterly Report should not be regarded as a representation by us or any other person that our objectives or plans will be achieved. All forward-looking statements speak only as of the date of this Quarterly Report. Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, or other information contained herein, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise. We caution you therefore that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance.
Basis of Presentation
The following discussion highlights our results of operations and the principal factors that have affected our financial condition as well as our liquidity and capital resources for the periods described, and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein. The following discussion and analysis are based on our unaudited condensed financial statements contained in this Quarterly Report, which we have prepared in accordance with United States generally accepted accounting principles. You should read the discussion and analysis together with such condensed financial statements and the related notes thereto.
The audited condensed financial statements for our fiscal year ended December 31, 2022, contained in our Annual Report, include a summary of our significant accounting policies and should be read in conjunction with the discussion below. In the opinion of management, all material adjustments necessary to present fairly the results of operations for such periods have been included in these audited condensed financial statements. All such adjustments are of a normal recurring nature.
References in this section to “NetBrands,” “we,” “us,” “our,” “the Company” and “our Company” refer to NetBrands Corp. (formerly known as Global Diversified Marketing Group Inc.), and its consolidated subsidiary.
Overview
The Company was incorporated in the State of Delaware on December 1, 2017, under the name “Dense Forest Acquisition Corporation.”
On June 13, 2018, in anticipation of its acquisition of Global Diversified Holdings, Inc., a private New York snack and gourmet food company (“GDHI”), the Company changed its to “Global Diversified Marketing Group Inc.”
On November 26, 2018, the Company consummated the acquisition of GDHI. As a result of the acquisition, GDHI became our wholly owned operating subsidiary, and we changed our business focus to the business of GDHI, which was to develop and market healthy snack foods.
| 4 |
Historically, the Company has been focused on developing and marketing products in the United States, Canada, and Europe that appeal to consumers’ growing preference for healthy snack food. The Company operates through snacks segments offering Italian Wafers, French Madeleines, Italian Croissants, Macaron Cookies, Wafer Pralines, and other wholesome snacks. The Company sells its food and snack products through various distribution channels comprising specialty, grocery retailers, food-service distributors and direct store delivery, as well as the vending, pantry, and micro-market segment. Our buyers typically represent recognized large retail chain stores. The products are then distributed by the chains to their local outlets. We intend to develop additional gourmet foods and snack products under our trademarked brands and to expand the Company’s offering portfolio by identifying, producing and marketing new products.
While continuing to grow its brick-and-mortar sales, the Company plans to make a major shift towards ecommerce development and the acquisition of new ecommerce assets to diversify its business. The Company made the first of such acquisitions on August 31, 2022, when it purchased from InPlay Capital Inc. all of the assets relating to the online home fitness store known as “The Hula Fit,” including the Shopify Store and the TikTok, Facebook and Google ad accounts.
The Company’s management believes that the strategy of acquiring small brands regional distribution brands and acquiring more e-commerce brand assets will diversify its current business and increase its business operation results.
Recent Developments
On March 29, 2023, we filed an Amendment to our Certificate of Incorporation (the “Amendment”) effecting the change of the Company’s name to “NetBrands Corp.,: a name that reflects the planned expansion of our digital business. In connection with the name change, we submitted to the Financial Industry Regulatory Authority, Inc. (“FINRA”) a voluntary request for the change of our OTC trading symbol. We will announce our new trading symbol once it is approved by FINRA. In the meantime, our common stock will remain listed for quotation under the current symbol “GDMK.”
Results of Operations
Comparison of Results of Operations for the Three Months Ended March 31, 2023 and 2022
Revenue and Cost of Sales
During the three months ended March 31, 2023, our revenues were $317,684 compared to $332,835 during the period ended March 31, 2022, a decrease of $15,201, or approximately 4.6%. The decrease is primarily attributable to shipping and supply chain delays we have been experiencing in receiving inventory from our suppliers necessary to fulfill customer orders.
Cost of sales was $209,760 for the three months ended March 31, 2023, compared to $224,552 for the three months ended March 31, 2022. The decrease in cost of sales is due to lower sales and improved gross profit margin in the three-month period ended March 31, 2023 compared to the same period in 2022. Gross profit margin for the three months ended March 31, 2023 was 34%, compared to 32.5% during the same three-month period in 2022. The increase in gross profit margins in the three-month period ended March 31, 2023 compared to the same period in 2022, is attributable to a slight decrease in the cost of shipping containers and supply chain improvement.
Operating expenses
During the three months ended March 31, 2023, our operating expenses were $372,702 compared to $311,047 during the three months ended March 31, 2022. The primary reason for the increase in operating expenses in the three-month period ended March 31, 2023 compared to the same period in 2022, is due to an increase in our warehouse rent, equipment leases in the warehouse and office rent, aggregating to approximately $39,000, an increase of approximately $13,000 in legal and professional fees, and an increase of approximately $13,000 in payroll expenses in the three-month period ended March 31, 2023, compared to the same period in 2022.
Other Expense
Other expenses were comprised solely of interest expense, which amounted to $27,241 during the three-month period ended March 31, 2023, compared to $1,080 during the three-month period ended March 31, 2022. The increase in interest expense is due to higher levels of borrowing at higher interest rates in the three-month period ended March 31, 2023 period compared to the same period in 2022.
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Net (Loss) Income
As a result of the foregoing, the net loss for the three months ended March 31, 2023 was $292,020 $(0.02 per share) compared to a net loss of $203,794 ($0.01 per share) for the three months ended March 31, 2022.
Liquidity and Capital Resources
As of March 31, 2023, we had $8,221 in cash and cash equivalents compared to $54,185 in cash as of December 31, 2022.
Net cash used in operating activities decreased to $202,960 in the three months ended March 31, 2023, compared to $230,925 during the same period in 2022. The decrease in cash used in operating is primarily due to changes in operating assets and liabilities, partially offset by decreased profitability in the three-month period ended March 31, 2023, compared to the same period in 2022.
Net cash provided by financing activities was $156,996 during the three months ended March 31, 2023, compared to $3,066 of net cash used in the three-month period ended March 31, 2022. The increase in net cash provided in the three-month period ended March 31, 2023 as compared to the same period in 2022 is primarily due to an increase in loans payable in 2023 of $162,028 compared to loan repayments of $3,066 in 2022.
The Company has historically financed its operations through the cash flow generated from operations, capital investment, notes payable and factoring and has recently financed its operations through SBA COVID-19 loans, capital investment, notes payable, and factoring.
In the event continuing decreased sales and profits contain, our ability to obtain additional financing or factoring for our receivables could be negatively impacted which could have a material adverse impact on our liquidity or our ability to remain as a going concern.
Going Concern
The accompanying consolidated condensed financial statements have been prepared assuming we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of these condensed financial statements. On a consolidated basis, we have incurred significant operating losses since inception. The Company’s independent auditor has indicated substantial doubt about the Company continuing as a going concern based on the Company’s accumulated deficit and accrued liabilities. Our ability to continue our operations as a going concern, realize the carrying value of our assets, and discharge our liabilities in the normal course of business is dependent upon our ability to raise capital sufficient to fund our commitments and ongoing losses, and ultimately generate profitable operations. If we cannot obtain needed funds, we may be forced to reduce or cease our activities with a consequent loss to investors. In addition, should we incur significant presently unforeseen expenses or delays, we may not be able to accomplish our goals. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Critical Accounting Estimates
Our condensed financial statements and accompanying notes have been prepared in accordance with GAAP. The preparation of these condensed financial statements requires management to make estimates, judgments, and assumptions that affect reported amounts of assets, liabilities, revenues and expenses. We continually evaluate the accounting policies and estimates used to prepare our condensed financial statements. The estimates are based on historical experience and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management. Certain accounting policies that require significant management estimates and are deemed critical to our results of operations or financial position. Our critical accounting estimates are more fully discussed in Note 2 to our unaudited condensed financial statements contained herein.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable because we are an emerging growth company.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our President (principal executive officer) and Chief Financial Officer (principal financial and accounting officer), who is directly involved in the day-to-day operations of the Company, as of March 31, 2023, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and principal financial and accounting officer has concluded that our disclosure controls and procedures were effective as of March 31, 2023 to ensure that information required to be disclosed by us in reports filed or submitted under the Securities Exchange Act were recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Act Commission’s rules and forms and that our disclosure controls are effectively designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Our management, including our President and Chief Financial Officer, does not expect that our disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdown can occur because of simple error or mistake. In particular, many of our current processes rely upon manual reviews and processes to ensure that neither human error nor system weakness has resulted in erroneous reporting of financial data.
As of March 31, 2023, our disclosure controls and procedures were determined to be effective.
Changes in Internal Control over Financial Reporting
During the period covered by this Quarterly Report, there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
We know of no active or pending legal proceedings against us, nor are we involved as a plaintiff in any proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any beneficial shareholder are an adverse party or has a material interest adverse to us.
Item 1A. Risk Factors.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Except as set forth below, there were no sales of equity securities sold during the period covered by this Report that were not registered under the Securities Act and were not previously reported in a Current Report on Form 8-K filed by the Company.
These issuances were exempt from registration under Section 4(a)(2) of the Securities Act as not involving any public offering.
Item 3. Defaults upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
On April 21, 2023, the Company’s board of directors adopted a Code of Business Conduct and Ethics (“Code of Ethics”) that applies to its officers, directors, and employees. A copy of the Code of Ethics is filed as Exhibit 14.1 to this Quarterly Report.
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Item 6. Exhibits.
| Exhibit No. | Description | |
| 14.1* | CODE OF BUSINESS CONDUCT AND ETHICS | |
| 31.1/31.2* | CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a) AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 | |
| 32.1/32.2* | CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 | |
| 101.INS* | Inline XBRL Instance Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Link base Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Link base Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Link base Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Link base Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
*Filed herewith
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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.
| NETBRANDS CORP. | ||
| Date: May 15, 2023 | By: | /s/ Paul Adler |
| Name: | Paul Adler | |
| Title: | Chief Financial Officer, President, Secretary and Treasurer (Principal Executive Officer and Principal Financial and Accounting Officer) | |
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Exhibit 14.1
NETBRANDS CORP.
Code of Business Conduct and Ethics
| A. | INTRODUCTION |
The purpose of this Code of Business Conduct and Ethics (this “Code”) is to describe standards of conduct and business expected of directors, officers, and employees (the “Covered Persons”) of NetBrands Corp., a Delaware corporation (the “Company”). All Covered Persons will be required to attest annually to their awareness and acceptance of the provisions of the Code and to affirm their compliance with such provisions.
The Company has formulated this Code to help to ensure that Covered Persons act in accordance with applicable laws and observe the highest ethical standards in their business dealings. The Company is keenly aware of the importance of maintaining its corporate reputation for integrity. It is the responsibility of each Covered Person to create and maintain a fair, honest and professional workplace. The Company believes that honesty is the essential standard of integrity and expects Covered Persons to deal with others in a manner that absolutely excludes any consideration of personal or private benefit. It is, therefore, fundamental to the reputation and continuing success of the Company that Covered Persons adhere to the rules and procedures set forth in this Code.
While this Code is intended to provide guidelines for ethical and professional conduct, ultimately, Covered Persons must exercise good judgment and common sense in interpreting and applying these procedures in any given situation. In cases of doubt, Covered Persons should consult with the Chief Executive Officer (the “Chief Executive Officer”) of the Company.
| B. | GENERAL BUSINESS PRINCIPLES |
| 1. | Observance of Highest Ethical Standards |
All Covered Persons must observe the highest ethical standards of business conduct in their dealings with the Company’s stockholders, employees, service providers, customers, suppliers, landlords, lessees and competitors. No Covered Person should engage in dishonest and unethical behavior affecting such persons, including manipulation, concealment, abuse of privileged information, misrepresentation or any other unfair dealing.
| 2. | Compliance with Laws |
All Covered Persons must fully comply with all applicable foreign and United States laws, rules and regulations. No Covered Person should at any time take any action on behalf of the Company which violates such laws, rules, or regulations. Ignorance of the applicable laws, rules or regulations will not serve as a defense should such laws, rules or regulations be contravened. Covered Persons should always, including in situations where applicable legal standards are conflicting or unclear, conduct the Company’s business in such a manner that will not embarrass the Company should the full facts be disclosed.
| 3. | Relationships with Public Officials - Political Contributions |
The Company’s policy is to develop and maintain good relationships and effective communications at all levels of domestic and foreign governments having authority over the areas in which we do business. Contacts with governmental officials both in this country and abroad, whether direct or indirect, shall at all times be maintained as proper business relationships. These contacts must never suggest a compromise of the objectivity of such persons or cast doubt on the Company’s integrity. No corporate funds, property of any kind or services shall be used directly or indirectly to influence the nomination or election of any candidate to public office, if such use is in violation of applicable law. This restriction is not intended to discourage Covered Persons from making proper political contributions to the candidates, parties or committees of their choice.
| 4. | Employment Relationships |
The Company is committed to the recruitment, training, development and retention of competent staff. All employment decisions, including selection for employment, promotion and transfer, must be made solely on merit, experience and other work-related criteria.
The employment relationship established with the Company is terminable at will, either by the employee or the Company, at any time, for any reason, and with or without cause. The provisions of this Code should not be construed as creating a right to employment for any person or for any specific period of time. Exceptions to the at-will employment relationship are only permitted when authorized in writing by the Board of Directors or Chief Executive Officer.
| 5. | Truth in Communications |
The Chief Executive Officer is responsible for making public communications about the financial and business condition of the Company and is to cause full, fair, accurate, timely and understandable disclosure in reports and documents filed with the Securities and Exchange Commission and in other public communications about the Company.
| C. | COMPANY FUNDS AND ASSETS |
Covered Persons are charged with safeguarding the Company’s assets and property and ensuring their efficient and proper use. Covered Persons having authority to handle the Company’s funds or assets are placed in a position of trust with respect to the Company. A Covered Person must at all times maintain in good working order and safeguard from harm, theft or loss all tangible and intangible assets of the Company, whether on the Company’s property or in the possession of the Covered Person. Assets of the Company may be used only for their intended use and only for Company business even though incidental personal use may be permitted. Any assets of the Company in the possession of a Covered Person must be returned to the Company upon the termination of such Covered Person’s employment or association with the Company.
Neither the Company nor the Board of Directors will engage in offering or making available credit or loan arrangements to any member of the Board of Directors or the Company’s executive management.
Any discovery, improvement, or invention made or conceived by an officer or employee, either solely or jointly with others, during the time he or she is employed by the Company which pertains or relates to the products or business in which the Company is engaged shall be the exclusive property of the Company whether or not patentable or copyrightable.
| D. | CONFLICTS OF INTEREST |
A “conflict of interest” exists when a person’s private interest interferes in any way with the interests of the Company. When a conflict of interest arises, others may question the Company’s integrity. Therefore, all Covered Persons must conduct themselves in accordance with the highest ethical standards of honesty and fair dealing and should, in pursuit of their business duties, avoid actions that may create a conflict of interest and be adverse to the best interests of the Company and its stockholders.
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Covered Persons must report in writing to the Chief Executive Officer the existence or discovery of any circumstances, relating to such Covered Person, or other Covered Persons, which constitute a conflict of interest or could create a potential conflict of interest, including any financial or other business relationships, transactions, arrangements or other interests or activities with the Company’s suppliers, customers, competitors or other persons that could create a potential conflict of interest.
If a potential conflict of interest would constitute a “related party transaction” that would be required to be disclosed pursuant to the securities laws, the terms of the proposed transaction must be reported in writing to the Company’s Chief Executive Officer who will refer the matter, if necessary, to the Audit Committee, or, if there is no Audit Committee, to the full Board of Directors, for approval. Generally, a related party transaction is a transaction that includes a director or executive officer, directly or indirectly, and the Company, that exceeds $120,000 in amount. If a Covered Person has any questions as to whether a proposed transaction is a “related party transaction,” the Covered Person should contact the Chief Executive Officer for clarification.
| 1. | Gifts and Entertainment |
Gifts and entertainment can easily be misunderstood and can appear to be an attempt to bribe our employees or the employees of another company. Generally, it is the Company’s policy that Covered Persons are prohibited from accepting gifts or favors (i.e., money, merchandise, services, entertainment, travel, or other forms of benefit) from any person or business organization that does business with the Company, seeks to do business with the Company, or is a competitor of the Company. Covered Persons may accept small gifts or favors that would be considered common business courtesies, however, no Covered Person should accept a gift or favor that might be intended to influence, or appears to influence, a business decision. Covered Persons must report to his or her supervisor the receipt of any gifts or favors.
In general, Covered Persons should not solicit entertainment, but are allowed to accept entertainment if the following criteria are met:
| (a) | it occurs infrequently; |
| (b) | it arises in the normal course of business and would be considered a common business courtesy; |
| (c) | it involves reasonable expenditures; and |
| (d) | it takes place in settings that are appropriate and fitting. |
A Covered Person shall not accept travel, vacation arrangements or similar favors or gratuities. Attending sports or theatrical events with and as a guest of a supplier or receiving sports or theatre tickets for personal use is acceptable and considered a normal business practice if kept within reasonable limits.
| 2. | Certain Interests |
Each Covered Person must report in writing to the Chief Executive Officer any service as an officer, director, member, manager, partner or trustee of or any investment in a company that is a customer, supplier, contractor, competitor or any person or organization having dealings with the Company where the Company’s relationship with such organization is significant. For the purposes of this Code, the term “investment” means any investment beneficially owned by the Covered Person, his or her family member, nominee, or other person through which the Covered Person derives an economic benefit; provided, however, the term “investment” shall not mean any beneficial ownership of up to five percent (5%) of the outstanding securities of a publicly-held company that is a customer, supplier, contractor, or competitor of the Company.
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| 3. | Corporate Opportunity |
Covered Persons should not: (i) take for themselves personally opportunities that are discovered through the use of Company property, information or position; (ii) use Company property, information, or position for personal gain; or (iii) directly compete with the Company. Covered Persons owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises.
| 4. | Acting as a Supplier |
A Covered Person may not enter into an agreement with the Company as a supplier of products and services to the Company unless he or she receives prior written approval in accordance with this Code. This policy extends to any prospective supplier that is controlled or actively influenced by a Covered Person. Selection of a supplier, including a Covered Person, must be made in accordance with the Company’s procedures and policies.
| 5. | Outside Activities |
Officers and employees should avoid outside employment or activities that impair effective performance of their obligations to the Company, either because of excessive demands on their time or because the outside commitments constitute a drain away from the Company of their talents and creative energies.
Of course, reasonable participation in the activities of a trade association, professional society or charitable institution on an uncompensated basis will not be deemed to violate the Conflicts of Interest provisions of this Code.
| E. | COMPANY INFORMATION |
| 1. | Integrity of Records |
The Company requires honest and accurate recording and reporting of information at all times. It applies the highest ethical standards in its financial and non-financial reporting and follows the Securities and Exchange Commission’s and other applicable rules regarding financial reporting.
Covered Persons may not manipulate financial accounts, records or reports or take any action or cause any person to take any action to influence, coerce, manipulate or mislead auditors for the purpose of rendering financial statements misleading.
All transactions must be approved and executed in accordance with internal control procedures established by the Company and must be recorded in such a manner as to permit the preparation of accurate financial statements for the Company.
Covered Persons may not knowingly alter, destroy, mutilate, conceal, cover up, falsify or make a false entry in any record, document or tangible object with the intent either to impair the object’s integrity or availability for use in an official proceeding or to obstruct, impede, direct or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any bankruptcy case, or in relation to or contemplation of any such matter or case.
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Covered Persons who prepare, maintain or have custody of the Company’s records and reports should endeavor to ensure that these documents are: (i) accurate and complete and clearly reflect the assets and transactions of the Company; (ii) safeguarded from loss or destruction; (iii) retained for specified periods of time in accordance with the Company’s document retention policy; and (iv) maintained in confidence.
| 2. | Trade Secrets/Confidential Information |
In general, a “trade secret” is any nonpublic information that affords a commercial advantage to its owner. Trade secrets may take the form of a customer list, business plan and business strategy, terms and conditions of the Company’s contracts and agreements or any number of other things which enhance the ability to compete for business. The Company possesses trade secrets and other confidential information, many of which are the product of considerable investment by the Company.
Trade secrets and other confidential information disclosed to or observed by Covered Persons should not be revealed at any time to any person or firm or used at any time for any purpose other than the advancement of the Company’s business interests. The Company’s policy is that all information developed or shared as the result of business processes is proprietary to the Company and an important asset in the operation of the Company’s business, and the unauthorized use or disclosure of this information is prohibited.
All information about the Company, its business, stockholders, customers, and suppliers should be considered confidential unless the information is already known to the public. This includes, but is not limited to, confidential technology, proprietary information, trade secrets, business plans, documents, pricing, and records. Covered Persons should not, without prior written authorization from the appropriate authority, acquire, use, access, copy, remove, modify, alter, or disclose to any third parties, any confidential information for any purpose other than to perform their job responsibilities or in furtherance of expressly stated Company-sponsored activities. Any such materials must be returned to the Company prior to a Covered Person leaving the Company.
Similarly, all Covered Persons must respect the confidentiality of their former employer’s trade secrets. As a result, Covered Persons should not divulge such information to any of the Company’s personnel or use the information while associated with the Company, unless explicit written permission by the former employer has been obtained.
Confidential information or materials in the possession of a Covered Person must be returned to the Company upon termination of employment or association with the Company. Since the Company views the protection of its confidential information as highly critical to its business, unauthorized disclosure of such information by the Covered Persons will result in disciplinary action that may include termination of employment or prosecution under applicable law.
| 3. | Insider Trading |
It is unlawful to buy or sell securities on the basis of material, non-public information (whether such information is gained in the course of employment or otherwise) for Company-owned or managed accounts, for personal accounts, or for any accounts that associates may influence, including, but not limited to, accounts of family members. This type of activity is known as “insider trading” and is prohibited by securities laws and Company policy.
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Information may be material if there is a substantial likelihood that the information would affect the price of the security or that a reasonable investor would consider the information significant in deciding whether to buy or sell a security. Information is considered to be non-public if it has not been disclosed to the public. Generally, information is considered disclosed to the public if it has been published in newspapers or other media, has been the subject of a press release or a public filing with the Securities and Exchange Commission and, in all cases, at least 48 hours has passed since the publication, release or filing.
Substantial penalties may be assessed against people who trade while in possession of material inside information and can also be imposed upon companies and so-called controlling persons such as officers and directors, who fail to take appropriate steps to prevent or detect insider trading violations by their employees or subordinates. Sanctions may be imposed by law enforcement officials for violating the insider trading policy, as well as Company-imposed sanctions, up to and including termination of employment.
The Company opposes the unauthorized disclosure of any non-public information acquired in the workplace and prevents the misuse of material nonpublic information in securities trading. The Company has established procedures for releasing material information in a manner that is designed to achieve broad public dissemination of the information immediately upon its release. Covered Persons may not, therefore, disclose information to anyone outside the Company, including family members and friends, other than in accordance with those procedures. Covered Persons also may not discuss the Company or its business in an internet “chat room” or similar internet-based forum.
The Company has a separate, detailed Insider Trading Policy applicable to Covered Persons, which is incorporated herein by reference.
| F. | EMBEZZLEMENT, THEFT, FRAUD AND NON-MONETARY IRREGULARITIES |
The Company expects all Covered Persons to continuously demonstrate honesty and integrity in their business activities and relationships. Except for incidental personal use, all Company assets should be used for legitimate business purposes. Unacceptable conduct includes:
| ● | conversion to cash of any checks made payable to the Company or misappropriation of cash receipts, including delaying submission of cash receipts so that they may be used on a temporary basis for personal reasons; |
| ● | authorization for payment of goods and services not received, or overpayment for goods or services; |
| ● | acceptance of kickbacks; |
| ● | engaging in any unethical act to entice a customer or potential customer to do business with the Company; |
| ● | accepting, soliciting or giving gifts, gratuities or any other personal benefit or favor from or to suppliers, potential suppliers or customers, except as provided in this Code; |
| ● | failure to accurately report the proceeds from the disposal of assets; |
| ● | misstatement of travel or expense reports, including processing of non-business items for expense report reimbursement; | |
| ● | falsification of any reports submitted to financial or operational management including but not limited to: |
| ◌ | misreporting or manipulating revenue or expenses to enhance reported financial results, |
| ◌ | delay in reporting revenues, |
| ◌ | delay in reporting expenses, |
| ◌ | misstating quantities of physical inventories or the cost basis of inventories, and |
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| ◌ | submission of inflated or fictitious inter-company expenses; |
| ● | engaging in any action to fraudulently influence, coerce, manipulate, or mislead any independent public or certified accountant engaged in the performance of an audit of the Company’s financial statements for the purpose of rendering such financial statements materially misleading; |
| ● | misuse of Company computer resources; |
| ● | unauthorized or improper access, misuse, modification, destruction or disclosure of Company data/software or non-Company data/software for which the Company has been identified as accountable for processing, accessing and/or storing; |
| ● | failure to follow policies relating to capital expenditures; and |
| ● | theft of any nature (cash, equipment, parts, etc.). |
| G. | REPORTING AND COMPLIANCE WITH THE CODE’S STANDARDS |
| 1. | Reporting of Violations |
Any Covered Person having knowledge of any actions prohibited by this Code must report such activity immediately to his or her supervisor or the Chief Executive Officer. Prohibited actions involving directors and executive officers should be reported to the Audit Committee, or, if there is no Audit Committee, to the full Board of Directors. Suspected violations or good faith concerns regarding accounting, internal accounting controls or auditing matters should be reported directly to the Audit Committee, or, if there is no Audit Committee, to the full Board of Directors. Covered Persons are expected to cooperate in internal investigations of misconduct.
| 2. | Prohibition against Retaliation |
It is the Company’s policy not to allow retaliation against any Covered Person for reports of misconduct or suspected violation of this Code by another person made in good faith, for providing to a law enforcement officer any truthful information relating to the commission or possible commission of any federal offense, or for proving information on actions such Covered Person reasonably believes to be violations of securities laws, rules of the Securities and Exchange Commission, or other federal laws relating to fraud against stockholders.
| 3. | Enforcement |
The Company must ensure prompt and consistent action against violations of this Code and reporting of violators to the appropriate authorities. All management personnel of the Company shall be responsible for the enforcement of this Code. The management shall periodically review the rules and procedures contained herein with the Covered Persons to ensure that the Covered Persons understand and comply with this Code.
In some situations, it is difficult to determine if a violation occurred. In order to afford a fair process by which to determine violations of the Code, the Covered Persons should keep the following in mind:
| (a) | make sure that the reporting person has all the facts available to him or her; | |
| (b) | use judgment and common sense in determining whether an act seems unethical or improper; | |
| (c) | discuss the situation with the supervisor or manager; and | |
| (d) | if one is unsure of what to do in any situation, he or she should ask for a guidance before acting. |
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| 4. | Waivers |
Any waiver of this Code for any director, executive officer or senior financial officer of the Company may be granted only upon approval by the Board of Directors and disclosed in accordance with applicable exchange rules or securities laws. A waiver of this Code for other directors, officers or employees of the Company may be granted only by the Chief Executive Officer in writing. For the purposes of this Code, a “senior financial officer” means the Company’s principal financial officer, principal accounting officer, controller, and other persons performing similar functions.
| 5. | Sanctions |
Any Covered Person who is found to have violated this Code, or knowingly permits a Covered Person under his or her supervision to do so, may be subject to immediate disciplinary action, including, but not limited to, reassignment, demotion, or, where appropriate, dismissal and legal proceedings to recover the amount of any improper expenditures and any other losses that the Company may have incurred as a result of such violation. Violations of this Code may also result in prosecution of the individual under applicable criminal law statutes.
| 6. | Interpretation |
All questions regarding the interpretation, scope, and application of the policies set forth in this Code should be referred to the Chief Executive Officer, who will consult with the outside legal counsel for resolution.
| 7. | Acknowledgment |
Each Covered Person will be required to sign an acknowledgment annually certifying that he or she has read, understands and agrees to abide by the policies set forth in this Code.
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CODE OF BUSINESS CONDUCT AND ETHICS ACKNOWLEDGMENT
By signing below, I acknowledge and certify that I have received, read, and understand NetBrands Corp.’s (the “Company”) Code of Business Conduct and Ethics (the “Code”).
I acknowledge that my employment relationship with the Company is terminable at will, by the Company or me, at any time, for any reason, with or without cause.
I agree (i) to comply with the Code and conduct the business of the Company in keeping with the highest ethical standards and (ii) to comply with international, federal, state, and local laws applicable to the Company’s businesses. I understand that failure to comply with the Code will lead to disciplinary action by the Company, which may include termination of my employment and/or the reduction of compensation or demotion.
(Please Print)
Name ______________________________________________________________________
Business Unit/Location ________________________________________________________
Position/Title ________________________________________________________________
Signature ___________________________________________________________________
Date _______________________________________________________________________
Please sign and return entire document to the Chief Executive Officer
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Exhibit 31.1/31.2
CERTIFICATION
OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Paul Adler, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of NetBrands Corp.;
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 condensed financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(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)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of condensed 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 registrants’ other certifying officer(s) 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 controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 15, 2023
| /s/ Paul Adler | |
| Paul Adler | |
| President, Chief Financial Officer, | |
| Treasurer, Secretary and Director | |
| (Principal Executive Officer and | |
| Principal Financial and Accounting Officer) |
Exhibit 32.1/32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of NetBrands Corp. (the “Company”), does hereby certify, in the capacities and on the date indicated below, to the best of such officer’s knowledge, that:
| 1. | The Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and | |
| 2. | The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q. |
Date: May 15, 2023
| /s/ Paul Adler | |
| Paul Adler | |
| President, Chief Financial Officer, | |
| Treasurer, Secretary and Director | |
| (Principal Executive Officer and | |
| Principal Financial and Accounting Officer) |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Preferred stock, par value | $ 0.0001 | |
| Preferred stock, shares authorized | 20,000,000 | |
| Common stock, par value | $ 0.0001 | $ 0.0001 |
| Common stock, shares authorized | 100,000,000 | 100,000,000 |
| Common stock, shares issued | 15,635,756 | 15,635,756 |
| Common stock, shares outstanding | 15,635,756 | 15,635,756 |
| Series A Preferred Stock [Member] | ||
| Preferred stock, par value | $ 0.0001 | $ 0.0001 |
| Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
| Preferred stock, shares issued | 1,000 | 1,000 |
| Preferred stock, shares outstanding | 1,000 | 1,000 |
Consolidated Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Income Statement [Abstract] | ||
| Sales, net | $ 317,684 | $ 332,885 |
| Cost of goods sold | 209,760 | 224,552 |
| Gross profit | 107,924 | 108,333 |
| Operating expenses: | ||
| Payroll and taxes | 165,080 | 152,449 |
| Legal and professional fees | 56,814 | 43,216 |
| Rent | 44,457 | 5,245 |
| Selling, general and administrative and expenses | 106,351 | 110,137 |
| Total operating expenses | 372,702 | 311,047 |
| Loss from operations | (264,778) | (202,714) |
| Other (expense) | ||
| Interest expense | (27,241) | (1,080) |
| Total other (expense) | (27,241) | (1,080) |
| Loss before income taxes | (292,020) | (203,794) |
| Provision for income taxes (benefit) | ||
| Net loss | $ (292,020) | $ (203,794) |
| Basic and diluted loss per common share | $ (0.02) | $ (0.01) |
| Weighted-average number of common shares outstanding: | ||
| Basic and diluted | 15,635,756 | 14,488,256 |
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) |
Preferred Stock [Member] |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
AOCI Attributable to Parent [Member] |
Total |
|---|---|---|---|---|---|---|
| Beginning balance, value at Dec. 31, 2021 | $ 1,447 | $ 27,688,665 | $ (27,543,659) | $ 1,895 | $ 148,349 | |
| Beginning balance, shares at Dec. 31, 2021 | 1,000 | 14,473,256 | ||||
| Common stock issued for services | $ 2 | 4,514 | 4,515 | |||
| Common stock issued for services, shares | 15,000 | |||||
| Net loss | (203,794) | (203,794) | ||||
| Ending balance, value at Mar. 31, 2022 | $ 1,449 | 27,693,179 | (27,747,454) | 1,895 | (50,930) | |
| Ending balance, shares at Mar. 31, 2022 | 1,000 | 14,488,256 | ||||
| Beginning balance, value at Dec. 31, 2022 | $ 1,564 | 27,915,909 | (28,630,321) | 1,895 | (710,953) | |
| Beginning balance, shares at Dec. 31, 2022 | 1,000 | 15,635,756 | ||||
| Net loss | (292,020) | (292,020) | ||||
| Ending balance, value at Mar. 31, 2023 | $ 1,564 | $ 27,915,909 | $ (28,922,340) | $ 1,895 | $ (1,002,973) | |
| Ending balance, shares at Mar. 31, 2023 | 1,000 | 15,635,756 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Accounting Policies [Abstract] | |
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
NetBrands Corp., formerly known as Global Diversified Marketing Group Inc. ( “NetBrands” or the “Company”), was incorporated as Dense Forest Acquisition Corporation, in Delaware on December 1, 2017, and changed its name on June 13, 2018, as part of a change in control. As part of the change in control, its then officers and directors resigned and contributed back to the Company shares of the outstanding shares of its common stock, and appointed new officers and directors. On June 14, 2018, the new management of the Company issued shares of its common stock to Paul Adler, the then president of the Company.
On November 26, 2018, the Company effected the acquisition of Global Diversified Holdings, Inc. (“GDHI”), a private New York company owned by the Company’s president, with the issuance of shares of the Company’s common stock in exchange for all of the outstanding shares of GDHI. GDHI became a wholly-owned subsidiary of the Company, and its activity for the years 2022 and 2021 is reflected in these condensed financial statements along with the expenses of the Company.
Prior to the acquisition of GDHI, the Company had no business and no operations. Pursuant to the acquisition, the Company acquired the operations and business plan of GDHI, which imports and sells snack food products. For accounting purposes, GDHI is considered to be the acquirer, and the equity is presented as if the business combination had occurred on January 1, 2017.
On August 31, 2022, the Company entered into an Asset Purchase Agreement with InPlay Capital Inc., a Delaware corporation (“InPlay”), pursuant to which, on the same date, the Company purchased from InPlay all of the assets used in the operation and conduct of its business relating to the online home fitness store known as “The Hula Fit”, including the Shopify Store and the TikTok, Facebook and Google ad accounts, for a purchase price of $50,000. Paul Adler, the sole executive officer and a director of the Company, and the Company’s majority stockholder, is also the sole officer, director, and 100% stockholder of InPlay.
On March 29, 2023, the Company filed an Amendment to its Certificate of Incorporation (the “Amendment”) effecting the change of the Company’s name to “NetBrands Corp.”, a name that reflects the planned expansion of the Company’s digital business. In connection with the name change, the Company submitted to the Financial Industry Regulatory Authority, Inc. (“FINRA”) a voluntary request for the change of its OTC trading symbol. In the meantime, the Company’s common stock will remain listed for quotation under the current symbol “GDMK.”
Basis of Presentation
The condensed financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. Certain prior year amounts have been reclassified to conform to the presentation in the current year. The Company has adopted a December 31 year-end.
Management’s Representation of Interim Condensed Financial Statements
The accompanying unaudited consolidated condensed financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual condensed financial statements. Certain information and footnote disclosures normally included in condensed financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated condensed financial statements include all of the adjustments, which in the opinion of management are necessary for a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year.
Principles of Consolidation
The accompanying consolidated condensed financial statements include the accounts of the Company and its wholly-owned subsidiary, Global Diversified Holdings, Inc. All intercompany accounts and transactions have been eliminated in consolidation.
Fair Value of Financial Instruments
The Company’s financial instruments consist of cash, accounts receivable from customers, accounts payable, and loans payable. The carrying amounts of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these condensed financial statements.
Use of Estimates
The preparation of condensed financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates.
Stock-Based Compensation
The Company accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This Section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. During the three months ended March 31, 2023 and March 31, 2022 stock-based compensation was $-- and $, respectively.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. On March 31, 2023, and December 31, 2022, the Company had $8,221 and $54,185 of cash and cash equivalents, respectively.
Accounts Receivable
Accounts receivable are generated from sales of snack food products to retail outlets throughout the United States. The Company performs ongoing credit evaluations of its customers and adjusts credit limits based on customer payment and current creditworthiness, as determined by review of their current credit information. The Company continuously monitors credit limits for its customers and maintains a provision for estimated credit losses based on its historical experience and any specific customer issues that have been identified. An allowance for doubtful; accounts are provided against accounts receivable for amounts management believes may be uncollectible. The Company historically has not had issues collecting on its accounts receivable from its customers. The Company factors certain of its receivables to improve its cash flow.
Bad debt expense for the three months ended March 31, 2023, and 2022 was $-0- and $-0-, respectively; the allowance for doubtful accounts on the same dates were $-0-and $-0-, respectively.
Inventory
Inventory, which is comprised of snack food products and packaging supplies is charged to inventory when purchased, is stated at the lower of cost or net realizable value with cost determined under the first-in, first-out (“FIFO”) method. The Company does not carry any raw materials.
The Company evaluates inventory levels quarterly value based upon assumptions about future demand and market conditions. Any inventory that has a cost basis in excess of its expected net realizable value, inventory that becomes obsolete, inventory in excess of expected sales requirements, inventory that fails to meet commercial sale specifications or is otherwise impaired are written down with a corresponding charge to the statement of operations in the period that the impairment is first identified. The Company performed its evaluation on March 31, 2023 and December 30, 2022, and determined that no write-down was required.
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful life of the assets. Maintenance, repairs, and renewals that do not materially add to the value of the equipment nor appreciably prolong its useful life are charged to expense as incurred.
Revenue Recognition
The Company recognizes revenue from product sales when control of the promised goods are transferred to our clients in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation. Typically, the Company receives a detailed purchase order from large retailers that specify the goods ordered, their price, payment terms and the required delivery date. Once the delivery of items on the purchase order is made to the client and title passes, the Company has met its performance obligation and recognizes revenue.
Advertising and Marketing Costs
The Company’s policy regarding advertising and marketing is to record the expense when incurred. The Company incurred advertising and marketing expenses of $31,288 and $14,884 during the three months ended March 31, 2023, and 2022, respectively.
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate the carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Intangible Assets
Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter.
We perform an annual impairment assessment for intangible assets during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount.
Determining the fair value of intangible assets is judgmental in nature and requires the use of significant estimates and assumptions.
On September 30, 2022, we conducted an impairment analysis and determined that our purchase of Hula Fit was fully impaired. As a result, we recorded an impairment loss of $50,000 for the year ended December 31, 2022.
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
The Company’s income tax returns are open for examination for up to the past three years under the statute of limitations. There are no tax returns currently under examination.
Leases
The majority of our lease obligations are real estate operating leases from which we conduct our business. For any lease with an initial term in excess of 12 months, the related lease assets and liabilities are recognized on the Consolidated Balance Sheets as either operating or finance leases at the inception of an agreement where it is determined that a lease exists. Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets; we recognize lease expense for these leases on a straight-line basis over the lease term.
Leases with an initial term of 12 months or less, or that are on a month-to-month basis are not recorded on our Consolidated Balance Sheets; we recognize lease expense for these leases on a straight-line basis over the lease term.
Operating lease assets represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at commencement date. We use a collateralized incremental borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. Our lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term.
As of March 31, 2023, we had $546,267 in right of use assets, $112,666 in short term operating lease payables and $436,674 in long term lease liabilities with an average remaining life of approximately 3.75 years.
Comprehensive Income
The Company has established standards for reporting and displaying comprehensive income, its components, and accumulated balances. When applicable, the Company would disclose this information on its Statement of Stockholders’ Equity. Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. During the periods ended March 31, 2023 and December 31, 2022, the Company had a balance of $1,895 in accumulated other comprehensive income on its balance sheet which arose from an unrealized gain due to foreign currency fluctuations in prior years.
Basic income (loss) per share has been calculated based on the weighted average number of shares of common stock outstanding during the period. As of March 31, 2023 the Company had no dilutive instruments that could increase the number of shares if exercised or converted.
Recent Accounting Pronouncements
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position, or cash flow.
|
GOING CONCERN |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| GOING CONCERN | NOTE 2 – GOING CONCERN
As of March 31, 2023, the Company had cash and cash equivalents of $8,221, negative working capital of $1,114,166 and had an accumulated deficit of $28,922,341. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financials have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty. If the Company is, in fact, unable to continue as a going concern, the shareholders may lose some or all of their investment in the Company.
|
CAPITAL STOCK |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Equity [Abstract] | |
| CAPITAL STOCK | NOTE 3 – CAPITAL STOCK
The Company has shares of $ par value common stock authorized. The Company had and shares of common stock issued and outstanding as of March 31, 2023, and December 31, 2022, respectively. There were no stock issuances in the first fiscal quarter of 2023.
2022 Common Stock Issuances for Services
During the three months ended March 31, 2022, the Company issued shares of its common stock for services, which were valued at $4,515. All issuances made by the Company are valued based upon the closing trading price of the Company’s common stock on the date when the board of directors authorizes and approves the issuance of such shares.
During the three months ended June 30, 2022, the Company issued an aggregate of (a) shares of common stock to the members of the Company’s board of directors, valued at $ per share, and (b) shares of common stock to the members of its board of directors in lieu of cash payments, valued at $ per share. The Company also issued shares of common stock to a service provider, valued at $ per share.
During the three months ended September 30, 2022, the Company issued an aggregate of shares to consultants and to an investor relations firm valued at an average of approximately $ per share.
During the three months ended December 31, 2022, the Company issued shares of common stock to a member of the Company’s board of directors valued at $ per share.
Preferred Stock
The Company has shares of $ par value preferred stock authorized. On February 24, 2020, the Company filed a Certificate of Designation for a class of preferred stock designated Class A Super Voting Preferred Stock (“A Stock”). There are shares of A Stock designated. Each share of such stock shall vote with the common stock and have 100,000 votes. The A Stock has no conversion, dividend, or liquidation rights. Accordingly, the holders of A Stock will, by reason of their voting power, be able to control the affairs of the Company. The Company has issued shares of A Stock to Paul Adler, the Company’s Chief Executive Officer, and majority shareholder giving him effective voting control over the Company’s affairs for the foreseeable future.
As a result of the issuance of the A Stock with super-voting rights giving him an aggregate of 100,000,000 votes, combined with the shares of common stock he holds, Mr. Adler has effective voting control of approximately 97% of the Company.
|
RELATED PARTY TRANSACTIONS |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Related Party Transactions [Abstract] | |
| RELATED PARTY TRANSACTIONS | NOTE 4 – RELATED PARTY TRANSACTIONS
On August 31, 2022, the Company entered into an Asset Purchase Agreement with InPlay Capital Inc., a Delaware corporation (“InPlay”), pursuant to which the Company purchased from InPlay all of the assets used in the operation its business relating to the online home fitness store known as “The Hula Fit”, including the Shopify Store and the TikTok, Facebook and Google ad accounts, for a purchase price of $50,000. Paul Adler, the sole executive officer and a director of the Company, and the Company’s majority stockholder, is also the sole officer, director, and 100% stockholder of InPlay. The assets were recorded as intangible assets on the Company’s balance sheet then impaired for the full amount of $50,000.
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COMMITMENTS AND CONTINGENCIES |
3 Months Ended | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||
| COMMITMENTS AND CONTINGENCIES | NOTE 5 – COMMITMENTS AND CONTINGENCIES
The Company has two primary leases. The Company leases approximately 1,500 square feet of office space at 4042 Austin Boulevard, Suite B, Island Park, New York 11558. On October 1, 2021, the Company entered into a -month lease for $20,976 per year for the first two years, with 3% annual escalation clauses for the last three years of the lease. The lease contains one renewal option. Management believes that its present office facilities are adequate for its corporate needs.
In March 2022, the Company transitioned from the use of a public warehouse and entered a lease for 8,500 square feet of warehouse space for 60 months at 78 Henry Street Secaucus, NJ 07094, at the rate of $132,896 per year, with annual 3% escalation clauses.
Future minimum lease payments due under these operating leases, including renewal periods, are as follows:
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LOANS PAYABLE |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LOANS PAYABLE | NOTE 6 – LOANS PAYABLE
The Company had various loans outstanding on March 31, 2023, and December 31, 2022. All of these loans were short-term in nature, with varying rates of interest and fees, and no set minimum monthly payments, as follows:
Government loans payable
As of March 31, 2022 and December 31, 2022, the Company had $519,001 and $524,033, respectively, in government EIDL loans outstanding related to Covid-19. These loans are repayable over a 30-year period with an interest rate of 3.75%.
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CONCENTRATIONS |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Risks and Uncertainties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONCENTRATIONS | NOTE 7 – CONCENTRATIONS
The Company does substantially all of its business with five customers. These customers accounted for 99% and 99% of revenues for the three months ended March 31, 2022, and 2022, respectively.
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SUBSEQUENT EVENTS |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS | NOTE 8 – SUBSEQUENT EVENTS
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to March 31, 2023, to the date these condensed financial statements were issued, and has determined that it does not have any other material subsequent events to disclose in these condensed financial statements except as follows:
On April 10, 2023, the Company’s CEO, Paul Adler extended a short-term, unsecured loan to the Company in the principal amount of $124,000, at an interest rate of 14.9% per annum. To evidence the loan, the Company issued Mr. Adler a promissory note, which has a maturity date of July 9, 2023. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Accounting Policies [Abstract] | |
| Nature of Business | Nature of Business
NetBrands Corp., formerly known as Global Diversified Marketing Group Inc. ( “NetBrands” or the “Company”), was incorporated as Dense Forest Acquisition Corporation, in Delaware on December 1, 2017, and changed its name on June 13, 2018, as part of a change in control. As part of the change in control, its then officers and directors resigned and contributed back to the Company shares of the outstanding shares of its common stock, and appointed new officers and directors. On June 14, 2018, the new management of the Company issued shares of its common stock to Paul Adler, the then president of the Company.
On November 26, 2018, the Company effected the acquisition of Global Diversified Holdings, Inc. (“GDHI”), a private New York company owned by the Company’s president, with the issuance of shares of the Company’s common stock in exchange for all of the outstanding shares of GDHI. GDHI became a wholly-owned subsidiary of the Company, and its activity for the years 2022 and 2021 is reflected in these condensed financial statements along with the expenses of the Company.
Prior to the acquisition of GDHI, the Company had no business and no operations. Pursuant to the acquisition, the Company acquired the operations and business plan of GDHI, which imports and sells snack food products. For accounting purposes, GDHI is considered to be the acquirer, and the equity is presented as if the business combination had occurred on January 1, 2017.
On August 31, 2022, the Company entered into an Asset Purchase Agreement with InPlay Capital Inc., a Delaware corporation (“InPlay”), pursuant to which, on the same date, the Company purchased from InPlay all of the assets used in the operation and conduct of its business relating to the online home fitness store known as “The Hula Fit”, including the Shopify Store and the TikTok, Facebook and Google ad accounts, for a purchase price of $50,000. Paul Adler, the sole executive officer and a director of the Company, and the Company’s majority stockholder, is also the sole officer, director, and 100% stockholder of InPlay.
On March 29, 2023, the Company filed an Amendment to its Certificate of Incorporation (the “Amendment”) effecting the change of the Company’s name to “NetBrands Corp.”, a name that reflects the planned expansion of the Company’s digital business. In connection with the name change, the Company submitted to the Financial Industry Regulatory Authority, Inc. (“FINRA”) a voluntary request for the change of its OTC trading symbol. In the meantime, the Company’s common stock will remain listed for quotation under the current symbol “GDMK.”
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| Basis of Presentation | Basis of Presentation
The condensed financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. Certain prior year amounts have been reclassified to conform to the presentation in the current year. The Company has adopted a December 31 year-end.
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| Management’s Representation of Interim Condensed Financial Statements | Management’s Representation of Interim Condensed Financial Statements
The accompanying unaudited consolidated condensed financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual condensed financial statements. Certain information and footnote disclosures normally included in condensed financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated condensed financial statements include all of the adjustments, which in the opinion of management are necessary for a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year.
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| Principles of Consolidation | Principles of Consolidation
The accompanying consolidated condensed financial statements include the accounts of the Company and its wholly-owned subsidiary, Global Diversified Holdings, Inc. All intercompany accounts and transactions have been eliminated in consolidation.
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| Fair Value of Financial Instruments | Fair Value of Financial Instruments
The Company’s financial instruments consist of cash, accounts receivable from customers, accounts payable, and loans payable. The carrying amounts of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these condensed financial statements.
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| Use of Estimates | Use of Estimates
The preparation of condensed financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates.
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| Stock-Based Compensation | Stock-Based Compensation
The Company accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This Section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. During the three months ended March 31, 2023 and March 31, 2022 stock-based compensation was $-- and $, respectively.
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| Cash and Cash Equivalents | Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. On March 31, 2023, and December 31, 2022, the Company had $8,221 and $54,185 of cash and cash equivalents, respectively.
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| Accounts Receivable | Accounts Receivable
Accounts receivable are generated from sales of snack food products to retail outlets throughout the United States. The Company performs ongoing credit evaluations of its customers and adjusts credit limits based on customer payment and current creditworthiness, as determined by review of their current credit information. The Company continuously monitors credit limits for its customers and maintains a provision for estimated credit losses based on its historical experience and any specific customer issues that have been identified. An allowance for doubtful; accounts are provided against accounts receivable for amounts management believes may be uncollectible. The Company historically has not had issues collecting on its accounts receivable from its customers. The Company factors certain of its receivables to improve its cash flow.
Bad debt expense for the three months ended March 31, 2023, and 2022 was $-0- and $-0-, respectively; the allowance for doubtful accounts on the same dates were $-0-and $-0-, respectively.
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| Inventory | Inventory
Inventory, which is comprised of snack food products and packaging supplies is charged to inventory when purchased, is stated at the lower of cost or net realizable value with cost determined under the first-in, first-out (“FIFO”) method. The Company does not carry any raw materials.
The Company evaluates inventory levels quarterly value based upon assumptions about future demand and market conditions. Any inventory that has a cost basis in excess of its expected net realizable value, inventory that becomes obsolete, inventory in excess of expected sales requirements, inventory that fails to meet commercial sale specifications or is otherwise impaired are written down with a corresponding charge to the statement of operations in the period that the impairment is first identified. The Company performed its evaluation on March 31, 2023 and December 30, 2022, and determined that no write-down was required.
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| Property and Equipment | Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful life of the assets. Maintenance, repairs, and renewals that do not materially add to the value of the equipment nor appreciably prolong its useful life are charged to expense as incurred.
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| Revenue Recognition | Revenue Recognition
The Company recognizes revenue from product sales when control of the promised goods are transferred to our clients in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation. Typically, the Company receives a detailed purchase order from large retailers that specify the goods ordered, their price, payment terms and the required delivery date. Once the delivery of items on the purchase order is made to the client and title passes, the Company has met its performance obligation and recognizes revenue.
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| Advertising and Marketing Costs | Advertising and Marketing Costs
The Company’s policy regarding advertising and marketing is to record the expense when incurred. The Company incurred advertising and marketing expenses of $31,288 and $14,884 during the three months ended March 31, 2023, and 2022, respectively.
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| Impairment of Long-Lived Assets | Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate the carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
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| Intangible Assets | Intangible Assets
Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter.
We perform an annual impairment assessment for intangible assets during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount.
Determining the fair value of intangible assets is judgmental in nature and requires the use of significant estimates and assumptions.
On September 30, 2022, we conducted an impairment analysis and determined that our purchase of Hula Fit was fully impaired. As a result, we recorded an impairment loss of $50,000 for the year ended December 31, 2022.
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| Income Taxes | Income Taxes
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
The Company’s income tax returns are open for examination for up to the past three years under the statute of limitations. There are no tax returns currently under examination.
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| Leases | Leases
The majority of our lease obligations are real estate operating leases from which we conduct our business. For any lease with an initial term in excess of 12 months, the related lease assets and liabilities are recognized on the Consolidated Balance Sheets as either operating or finance leases at the inception of an agreement where it is determined that a lease exists. Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets; we recognize lease expense for these leases on a straight-line basis over the lease term.
Leases with an initial term of 12 months or less, or that are on a month-to-month basis are not recorded on our Consolidated Balance Sheets; we recognize lease expense for these leases on a straight-line basis over the lease term.
Operating lease assets represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at commencement date. We use a collateralized incremental borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. Our lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term.
As of March 31, 2023, we had $546,267 in right of use assets, $112,666 in short term operating lease payables and $436,674 in long term lease liabilities with an average remaining life of approximately 3.75 years.
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| Comprehensive Income | Comprehensive Income
The Company has established standards for reporting and displaying comprehensive income, its components, and accumulated balances. When applicable, the Company would disclose this information on its Statement of Stockholders’ Equity. Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. During the periods ended March 31, 2023 and December 31, 2022, the Company had a balance of $1,895 in accumulated other comprehensive income on its balance sheet which arose from an unrealized gain due to foreign currency fluctuations in prior years.
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| Basic Income (Loss) Per Share |
Basic income (loss) per share has been calculated based on the weighted average number of shares of common stock outstanding during the period. As of March 31, 2023 the Company had no dilutive instruments that could increase the number of shares if exercised or converted.
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| Recent Accounting Pronouncements | Recent Accounting Pronouncements
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position, or cash flow. |
COMMITMENTS AND CONTINGENCIES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||
| SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF OPERATING LEASE LIABILITY | Future minimum lease payments due under these operating leases, including renewal periods, are as follows:
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LOANS PAYABLE (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF DEBT | The Company had various loans outstanding on March 31, 2023, and December 31, 2022. All of these loans were short-term in nature, with varying rates of interest and fees, and no set minimum monthly payments, as follows:
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CONCENTRATIONS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Risks and Uncertainties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF CONCENTRATION OF RISK |
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GOING CONCERN (Details Narrative) - USD ($) |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
| Cash and cash equivalents | $ 8,221 | $ 54,185 |
| Working capital | 1,114,166 | |
| Accumulated deficit | $ 28,922,341 | $ 28,630,321 |
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
Aug. 31, 2022 |
Mar. 31, 2023 |
Dec. 31, 2022 |
|
| Related Party Transactions [Abstract] | |||
| Purchase of assets | $ 50,000 | ||
| Purchase of assets, percentage | 100.00% | ||
| Impairment loss | $ 50,000 | $ 50,000 |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF OPERATING LEASE LIABILITY (Details) |
Mar. 31, 2023
USD ($)
|
|---|---|
| Commitments and Contingencies Disclosure [Abstract] | |
| December 31, 2023 | $ 157,014 |
| December 31, 2024 | 161,724 |
| December 31, 2025 | 166,576 |
| December 31, 2026 | 171,573 |
| December 31, 2027 | 37,392 |
| Total | $ 694,279 |
COMMITMENTS AND CONTINGENCIES (Details Narrative) |
1 Months Ended | |
|---|---|---|
|
Oct. 01, 2021
USD ($)
ft²
|
Mar. 31, 2022
USD ($)
ft²
|
|
| Commitments and Contingencies Disclosure [Abstract] | ||
| Area of land | ft² | 1,500 | 8,500 |
| Lease description | the Company entered into a 60-month lease for $20,976 per year for the first two years, with 3% annual escalation clauses for the last three years of the lease. The lease contains one five-year renewal option. | the Company transitioned from the use of a public warehouse and entered a lease for 8,500 square feet of warehouse space for 60 months at 78 Henry Street Secaucus, NJ 07094, at the rate of $132,896 per year, with annual 3% escalation clauses. |
| Lessee, operating lease, term of contract | 5 months | 60 months |
| Payments for rent | $ | $ 20,976 | $ 132,896 |
| Lease renewal term | 5 years |
SCHEDULE OF DEBT (Details) - USD ($) |
Mar. 31, 2023 |
Dec. 31, 2022 |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Short-Term Debt [Line Items] | ||||||||||
| Total loans payable | $ 433,124 | $ 271,096 | ||||||||
| Fund Box [Member] | ||||||||||
| Short-Term Debt [Line Items] | ||||||||||
| Total loans payable | [1] | 68,827 | 50,964 | |||||||
| Can Capital [Member] | ||||||||||
| Short-Term Debt [Line Items] | ||||||||||
| Total loans payable | [2] | 155,902 | ||||||||
| Credit Line Blue Loan Builder [Member] | ||||||||||
| Short-Term Debt [Line Items] | ||||||||||
| Total loans payable | [3] | 112,395 | 144,746 | |||||||
| Webster Bank [Member] | ||||||||||
| Short-Term Debt [Line Items] | ||||||||||
| Total loans payable | [4] | $ 96,000 | $ 75,656 | |||||||
| ||||||||||
SCHEDULE OF DEBT (Details) (Parenthetical) |
3 Months Ended |
|---|---|
|
Mar. 31, 2023
USD ($)
| |
| Credit Line Sterling [Member] | |
| Short-Term Debt [Line Items] | |
| Line of credit facility, maximum borrowing capacity | $ 100,000 |
| Debt Instrument Interest Rate | 2.50% |
| Credit Line Loan Builder [Member] | |
| Short-Term Debt [Line Items] | |
| Line of credit facility, maximum borrowing capacity | $ 150,000 |
| Debt Instrument Interest Rate | 10.00% |
| Fund Box [Member] | |
| Short-Term Debt [Line Items] | |
| Debt Instrument Interest Rate | 40.00% |
| Debt Instrument Interest Rate | Dec. 31, 2023 |
| Principal Loan [Member] | |
| Short-Term Debt [Line Items] | |
| Line of credit facility, maximum borrowing capacity | $ 150,000 |
| Debt Instrument Interest Rate | 67.00% |
| Payments of Loan Costs | $ 2,558 |
LOANS PAYABLE (Details Narrative) - USD ($) |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Short-Term Debt [Line Items] | ||
| Government loans payable | $ 519,001 | $ 524,033 |
| Government Loans Payable [Member] | ||
| Short-Term Debt [Line Items] | ||
| Debt Instrument Interest Rate | 3.75% |
SCHEDULE OF CONCENTRATION OF RISK (Details) - Revenue Benchmark [Member] - Customer Concentration Risk [Member] |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Customer A [Member] | ||
| Concentration Risk [Line Items] | ||
| Total | 34.00% | 39.00% |
| Customer B [Member] | ||
| Concentration Risk [Line Items] | ||
| Total | 23.00% | 36.00% |
| Customer C [Member] | ||
| Concentration Risk [Line Items] | ||
| Total | 15.00% | 24.00% |
| Customer D [Member] | ||
| Concentration Risk [Line Items] | ||
| Total | 15.00% | |
| Customer E [Member] | ||
| Concentration Risk [Line Items] | ||
| Total | 12.00% | |
| Customer [Member] | ||
| Concentration Risk [Line Items] | ||
| Total | 99.00% | 99.00% |
CONCENTRATIONS (Details Narrative) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer [Member] | ||
| Concentration Risk [Line Items] | ||
| Concentration Risk, Percentage | 99.00% | 99.00% |
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] |
Apr. 10, 2023
USD ($)
|
|---|---|
| Subsequent Event [Line Items] | |
| Debt Instrument, Face Amount | $ 124,000 |
| Debt Instrument, Interest Rate, Stated Percentage | 14.90% |
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