UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2023

or

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

For the transition period from ________ to ________

Commission file number: 000-33231

CARBONMETA TECHNOLOGIES, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	95-4868120
(State or Other Jurisdiction	(I.R.S. Employer
of Incorporation or Organization)	Identification No.)

13110 NE 177th Place, Suite 145
Woodinville, WA	98072
(Address of Principal Executive Offices)	(Zip Code)

(206) 900-9088

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒Yes ☐ No

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

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller Reporting Company ☒
	Emerging Growth Company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	COWI	OTC Markets “PINK”

As of August 21, 2023, there were 20,756,286,962 shares of the registrant’s common stock outstanding.

CARBONMETA TECHNOLOGIES, INC.

TABLE OF CONTENTS

		Page Number
PART I		5
Item 1.	Financial Statements	5
	Condensed Consolidated Balance Sheets as of June 30, 2023 (Unaudited) and December 31, 2022	5
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022 (Unaudited)	6
	Condensed Consolidated Statements of Changes in Stockholders’ (Deficit) for the three and six months ended June 30, 2023 and 2022 (Unaudited)	7
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022 (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41
PART II		42
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	43
	Signatures	47

2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q for the period ended June 30, 2023 (the “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements relate to future events including, without limitation, our ability to raise capital, our operational and strategic initiatives or our future financial performance. We have attempted to identify forward-looking statements by using terminology such as “anticipates,” “believes,” “expects,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predict,” “should” or “will” or the negative of these terms or other comparable terminology. These statements are only predictions; uncertainties and other factors may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels or activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our expectations are as of the date this Quarterly Report is filed, and we do not intend to update any of the forward-looking statements after the date this Quarterly Report is filed to confirm these statements to actual results, unless required by law.

You should not place undue reliance on forward-looking statements. The cautionary statements set forth in this Quarterly Report identify important factors which you should consider in evaluating our forward-looking statements. These factors include, among other things:

● Our ability to effectively execute our business plans including transitioning from being focused on end-to-end consumer product innovation, development, and commercialization to being focused on digital media, advertising and content technologies innovation, development, and commercialization;

● Our ability to manage our expansion, growth and operating expenses;

● Our ability to protect our brands, reputation and intellectual property rights;

● Our ability to obtain adequate financing to support our development plans;

● Our ability to repay our debts;

● Our ability to rely on third-party suppliers, content contributors, developers, and other business partners;

● Our ability to evaluate and measure our business, prospects and performance metrics;

● Our ability to compete and succeed in a highly competitive and evolving industry;

● Our ability to respond and adapt to changes in technology and consumer behavior;

● Our dependence on information technology, and being subject to potential cyberattacks, security problems, network disruptions, and other incidents;

● Our ability to comply with complex and evolving laws and regulations including those relating to privacy, data use and data protection, content, competition, safety and consumer protection, e-commerce, digital assets and other matters, many of which are subject to change and uncertain interpretation;

● Our ability to enhance disclosure and financial reporting controls and procedures and remedy the existing weakness;

● Risks in connection with completed or potential acquisitions, dispositions and other strategic growth opportunities and initiatives;

● Taxes;

● The stability of the governments and political and business conditions in certain foreign countries in which we or certain of our business partners may operate now or in the future;

● Costs and results of potential litigation;

● Changes in accounting standards or inaccurate estimates or assumptions in the application of accounting policies;

● The use of social or digital media to disseminate false, misleading and/or unreliable or inaccurate information regarding our products, services or the industry in which we operate;

● Other risk factors discussed in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 20, 2023.

These and other factors discussed above could cause results to differ materially from those expressed in the estimates made by any independent parties and by us.

3

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

Solely for convenience, we refer to trademarks in this Quarterly Report without the ® or the ™ or symbols, but such references are not intended to indicate that we will not assert, to the fullest extent under applicable law, our rights to our own trademarks. Other service marks, trademarks and trade names referred to in this Quarterly Report, if any, are the property of their respective owners, although for presentational convenience we may not use the ® or the ™ symbols to identify such trademarks.

OTHER PERTINENT INFORMATION

Unless the context otherwise indicates, when used in this Annual Report, the terms “CarbonMeta,” “COWI,” “we,” “us,” “our,” the “Company” and similar terms refer to CarbonMeta Technologies, Inc., a Delaware corporation, and all of our consolidated subsidiaries and variable interest entities.

4

PART I - FINANCIAL INFORMATION

CARBONMETA TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2023			2022
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	4,144		$	379
Accounts receivable		-			20,525
Inventory		3,157			3,157
Total Current Assets		7,301			24,061
Property and equipment, net of accumulated depreciation of $25,937 and $18,235 at June 30, 2023 and December 31, 2022, respectively		21,187			28,889
Licenses, net of accumulated amortization of $45,209 and $32,229 at June 30, 2023 and December 31, 2022, respectively		125,294			138,274
TOTAL ASSETS	$	153,782		$	191,224
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	12,144,702		$	11,457,444
Obligations collateralized by receivables		206,236			206,236
Convertible debt, net		2,070,244			2,160,034
Notes payable		154,873			154,873
Notes payable - related parties		199,415			199,415
Small Business Administration loan		979,950			979,950
Derivative liability		11,889,638			9,652,846
Total Current Liabilities		27,645,058			24,810,798
TOTAL LIABILITIES	$	27,645,058		$	24,810,798
Commitments and contingencies		-			-
STOCKHOLDERS’ DEFICIT:
Redeemable convertible preferred stock, Series A, $0.001 par value, 125,000 shares authorized, 0 shares issued and outstanding		-			-
Redeemable convertible preferred stock, Series B, $0.001 par value, 525,000 shares authorized, 159,666 and 159,666 shares issued and outstanding		160			160
Redeemable convertible preferred stock, Series C, $0.001 par value, 500,000 shares authorized, 0 and 0 shares issued and outstanding		-			-
Redeemable convertible preferred stock, Series D, $0.001 par value, 500,000 shares authorized, 100,000 and 100,000 shares issued and outstanding		100			100
Redeemable convertible preferred stock, Series E, $0.001 par value, 1,000,000 shares authorized, 821,377 and 821,377 shares issued and outstanding, respectively		821			821
Redeemable convertible preferred stock, Series F, $0.001 par value, 500,000 shares authorized, 190,000 and 190,000 shares issued and outstanding		190			190
Redeemable convertible preferred stock, Series G, $0.001 par value, 500,000 shares authorized, 25,000 and 25,000 shares issued and outstanding		25			25
Common stock; 35,000,000,000 and 35,000,000,000 shares authorized at $0.0001 par value, 20,781,583,966 and 18,831,386,254 shares issued, respectively; 20,756,286,962 and 18,643,205,254 shares outstanding, respectively		2,078,159			1,883,139
Additional paid-in capital		37,688,371			37,515,219
Treasury stock – 25,297,004 and 188,181,000 shares of common stock		(3,191	)		(18,997	)
Accumulated other comprehensive income		262			3,725
Accumulated deficit		(67,256,173	)		(64,003,956	)
TOTAL STOCKHOLDERS’ DEFICIT		(27,491,276	)		(24,619,574	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	153,782		$	191,224

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

5

CARBONMETA TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

For the three and six months ended June 30, 2023 and 2022

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Revenues::
Contract services revenues	$	10,970		$	21,555		$	21,346		$	21,555
Consulting fees from Salvum Corporation affiliate		15,000			-			15,000			-
Total revenues		25,970			21,555			36,346			21,555
Operating expenses:
Executive Compensation		37,500			37,500			75,000			75,000
Legal and Professional Fees		66,684			123,953			89,845			168,009
Investor Relations		3,630			15,118			7,720			35,782
Consulting Fees		30,537			6,670			31,825			21,891
Sales and marketing		3,108			21,244			23,108			35,427
Research and development		60,810			4,545			70,140			8,644
Amortization of licenses		6,526			6,526			12,980			14,430
Depreciation of equipment		3,872			3,872			7,702			7,702
Other operating expenses		43,842			(29,850	)		70,214			80,207
Total operating expenses		256,509			189,578			388,534			447,092
Operating income (loss)		(230,539	)		(168,023	)		(352,188	)		(425,537	)
Other (expense) income:
Gain (loss) from derivative liabilities		6,120,022			(5,284,532	)		(2,236,792	)		(5,855,627	)
Interest expense, net		(333,794	)		(266,181	)		(663,237	)		(487,109	)
Loss from debt settlements		-			(5,000	)		-			(5,000	)
Total other income (expense)		5,786,228			(5,555,713	)		(2,900,029	)		(6,347,736	)
Income (loss) before income taxes		5,555,689			(5,723,736	)		(3,252,217	)		(6,773,273	)
Income tax expense		-			-			-			-
Net income (loss)	$	5,555,689		$	(5,723,736	)	$	(3,252,217	)	$	(6,773,273	)
Net income (loss) per common share:
Basic and diluted net income (loss) per common share	$	0.0003		$	(0.0003	)	$	(0.0002	)	$	(0.0004	)
Weighted average number of common shares outstanding – basic and diluted		19,406,540,232			18,680,401,516			19,314,787,265			18,483,949,031
Comprehensive income (loss):
Net income (loss)	$	5,555,689		$	(5,723,736	)	$	(3,252,217	)	$	(6,773,273	)
Foreign currency translation adjustments		(2,408	)		9,393			(3,463	)		9,393
Comprehensive income (loss)	$	5,553,281		$	(5,714,343	)	$	(3,255,680	)	$	(6,763,880	)

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

6

CARBONMETA TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT)

For the three and six months ended June 30, 2023 and 2022

(Unaudited)

	Preferred Stock												Common Stock				Additional									Accumulated Other
	Series B		Series D		Series E		Series F		Series G		Amount		Shares		Amount		Paid-In Capital			Treasury Stock			Accumulated Deficit			Comprehensive Income			Total
Balances, December 31, 2021		159,666		100,000		791,567		180,000		25,000	$	1,256		17,592,057,165	$	1,759,206	$	36,775,736		$	(18,997	)	$	(64,404,388	)		-		$	(25,887,187	)
Common stock issued for license		-		-		-		-		-		-		160,000,000		16,000		48,000			-			-			-			64,000
Common stock issued for services		-		-		-		-		-		-		203,333,334		20,333		52,667			-			-			-			73,000
Common stock and warrants issued in connection with convertible notes financings, net of placement agent fee of $1,350		-		-		-		-		-		-		60,500,000		6,050		102,600			-			-			-			108,650
Common stock issued for accrued executive compensation		-		-		-		-		-		-		428,571,428		42,857		107,143			-			-			-			150,000
Common stock issued for accrued consulting fees		-		-		-		-		-		-		206,896,552		20,690		279,310			-			-			-			300,000
Net loss for three months ended March 31, 2022		-		-		-		-		-		-		-		-		-			-			(1,049,537	)		-			(1,049,537	)
Balances, March 31, 2022		159,666		100,000		741,567		180,000		25,000	$	1,256		18,651,358,479	$	1,865,136	$	37,365,456		$	(18,997	)	$	(65,453,925	)	$	-		$	(26,241,074	)
Preferred stock adjustments		-		-		29,810		10,000		-		40		-		-		(40	)		-			-			-			-
Common stock issued for services		-		-		-		-		-		-		200,000,000		2,000		5,000			-			-			-			7,000
Common stock and warrants issued in connection with convertible note financings, net of placement agent fee of $		-		-		-		-		-		-		16,527,775		1,653		29,153			-			-			-			30,806
Foreign currency translation adjustments		-		-		-		-		-		-		-		-		-			-			-			9,393			9,393
Net loss for the three months ended June 30, 2022		-		-		-		-		-		-		-		-		-			-			(5,723,736	)		-			(5,723,736	)
Balances, June 30, 2022		159,666		100,000		821,377		190,000		25,000	$	1,296		18,687,86,254	$	1,868,789	$	37,399,569		$	(18,997	)	$	(71,177,661	)	$	9,393		$	(31,917,611	)
Balances, December 31, 2022		159,666		100,000		821,377		190,000		25,000	$	1,296		18,831,386,254	$	1,883,139	$	37,515,219		$	(18,997	)	$	(64,003,956	)	$	3,725		$	(24,619,574	)
Common stock issued in connection with conversion of convertible notes		-		-		-		-		-		-		329,333,562		32,933		32,933			-			-			-			65,866
Common stock issued for services		-		-		-		-		-		-		200,000,000		20,000		-			-			-			-			20,000
Sale of Treasury stock		-		-		-		-		-		-		-		-		10,430			4,767			-			-			15,197
Foreign currency translation adjustments		-		-		-		-		-		-		-		-		-			-			-			(1,055	)		(1,055	)
Net loss for three months ended March 31, 2023		-		-		-		-		-		-		-		-		-			-			(8,807,906	)		-			(8,807,906	)
Balances, March 31, 2023		159,666		100,000		821,377		190,000		25,000	$	1,296		19,360,719,816	$	1,936,072	$	37,558,582		$	(14,230	)	$	(72,811,862	)	$	2,670		$	(33,327,472	)