BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2024

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

Principles of Consolidation

The consolidated financial statements include the accounts of Singlepoint, Boston Solar, Direct Solar America, Box Pure Air, EnergyWyze, DIGS, and ShieldSaver as of December 31, 2024 and 2023, and for the years then ended. All significant intercompany transactions have been eliminated in consolidation.

Use of Estimates in the Preparation of Financial Statements

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

Reclassifications

Certain 2023 amounts have been reclassified to conform to the 2024 presentation, including the presentation of accrued warranty liability previously included in accrued expenses.

Reverse Stock-splits

On July 20, 2023, the Company affected a 1 for 400 reverse stock split of the Company’s common stock. At the effective time of the reverse stock split, every 400 shares of issued and outstanding common stock were converted into one (1) share of issued and outstanding common stock. The number of authorized shares and the par value per share of the common stock and the number of authorized or issued and outstanding shares of the Company’s preferred stock remained unchanged. As a result of the reverse stock split, the Company further adjusted the share amounts reserved and available for issuance under its employee incentive plan which had no outstanding options or common stock warrant agreements with third parties.

On December 14, 2023, the Company affected a 1 for 26 reverse stock split of the Company’s common stock, and a proportionate related reduction in the number of the Company’s authorized shares of Common Stock from 5,000,000,000 to 192,307,693. At the effective time of the reverse stock split, every 26 shares of issued and outstanding common stock were converted into one (1) share of issued and outstanding common stock. The par value per share of the common stock and the number of authorized or issued and outstanding shares of the Company’s preferred stock remained unchanged. As a result of the reverse stock split, the Company further adjusted the share amounts reserved and available for issuance under its employee incentive plan which had no outstanding options or common stock warrant agreements with third parties.

On August 15, 2024, the Company affected a 1 for 100 reverse stock split of the Company’s common stock, and increased the number of the Company’s authorized shares of Common Stock from 192,307,693 to 6,000,000,000. At the effective time of the reverse stock split, every 100 shares of issued and outstanding common stock were converted into one (1) share of issued and outstanding common stock. The par value per share of the common stock and the number of authorized or issued and outstanding shares of the Company’s preferred stock remained unchanged. As a result of the reverse stock split, the Company further adjusted the share amounts reserved and available for issuance under its employee incentive plan which had no outstanding options or common stock warrant agreements with third parties.

All disclosures of common shares and per common share data in the accompanying consolidated financial statements and related notes reflect these reverse stock splits for all periods presented.

Cash

The Company considers all highly-liquid investments with an original maturity of ninety days or less at the time of purchase to be cash equivalents. There were no cash equivalents at December 31, 2024 and 2023. The Company also maintains deposits in financial institutions which are insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company had approximately $45,000 of deposits in excess of amounts insured by the FDIC as of December 31, 2024.

Revenues

The Company records revenue in accordance with Financial Accounting Standards Board's (FASB) Accounting Standards Codification ("ASC") 606, “Revenue from Contracts with Customers” by analyzing exchanges with its customers using a five-step analysis:

(1)	identifies the contract(s) with a customer;
(2)	identifies the performance obligations in the contract(s);
(3)	determines the transaction price;
(4)	allocates the transaction price to the performance obligations in the contract(s); and
(5)	recognizes revenue when (or as) the entity satisfies a performance obligation.

The Company incurs costs associated with product distribution, such as freight and handling costs. The Company has elected to treat these costs as fulfillment activities and recognizes these costs at the same time that it recognizes the underlying product revenue. In accordance with ASC 606, the Company recognizes revenue at an amount that reflects the consideration that the Company expects to be entitled to receive in exchange for transferring goods or services to its customers. The Company’s policy is to record revenue when control of the goods transfers to the customer.

The Company uses the following categories for disaggregated revenue classification:

(1)	Retail Sales and
(2)	Services Revenue

Additionally, the Company also disaggregates revenue by subsidiary:

(1)	Singlepoint (parent company)
(2)	Boston Solar
(3)	Box Pure Air
(4)	Non-Core a) DIGS b) Direct Solar c) EnergyWyze d) Ecodaptive

Retail Sales. Our retail sales include our products sold directly to consumers, with sales recognized upon delivery of the product to the customer, with the customer taking risk of ownership and assuming risk of loss. Payment is due upon delivery. Box Pure Air provides advanced air purification devices to businesses and consumers.

Services Revenue. Our services revenue is provided by Boston Solar and is generally recorded upon completion. 

Adjustments. The Company’s discounts and customer rebates are known at the time of sale and are recorded against product revenues based on the known discount and customer rebates.  The Company estimates for customer returns based on estimates of historical transactions and accounts for such provisions during the same period in which the related revenues are earned. Historically, returns have been nominal. 

Construction Contract Performance Obligations, Revenues and Costs. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account. The Company evaluates whether two or more contracts should be combined and accounted for as one performance obligation and whether the combined or single contract should be accounted for as more than one performance obligation. This evaluation requires significant judgment, and the decision to combine a group of contracts or separate a single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. The Company’s installation contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contract and, therefore, not distinct. Less commonly, the Company may promise to provide distinct goods or services within a contract, in which case the contract is separated into more than one performance obligation. If a contract is separated into more than one performance obligation, the total transaction price is allocated to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation.

The Company recognizes revenue upon completion. Contract costs include all installed materials, direct labor and subcontract costs. Operating costs are charged to expense as incurred.

Contract Modifications

Contract modifications are routine in the performance of the Company’s contracts. Contracts are often modified to account for changes in the contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct and are accounted for as part of the existing contract.

Contract Assets and Unearned Revenues

Billing practices are governed by the contract terms of each project based primarily on costs incurred, achievement of milestones or predetermined schedules. Billings do not necessarily correlate with the timing of revenues recognized. Contract assets represent costs incurred that have not been billed to the customer. Unearned revenues represent payments collected in advance of revenues recognized.

The Company’s residential contracts include payments terms that call for payment upon receipt of the invoice, and their commercial contracts call for payment between 15 and 60 days from the invoice date, primarily within 30 days.

Accounts Receivable

The Company carries its accounts receivable at the amount management expects to collect from outstanding receivables. On an ongoing basis, the Company evaluates its accounts receivable and adjusts an allowance for credit losses based on historical losses and current credit conditions.

Accounts receivable is net of an allowance for credit losses of approximately $270,000 and $375,000 as of December 31, 2024 and 2023, respectively.

Property

Property are stated at historical cost net of accumulated depreciation. Property is being depreciated on a straight-line basis. Repairs and maintenance are expensed as incurred.

Following is a summary of property as of December 31, 2024, and 2023.

	December 31,
	2024			2023
Computer equipment	$	155,329		$	142,189
Software		167,394			167,394
Tools and equipment		244,972			244,972
Furniture		66,392			66,392
Leasehold improvements		40,100			40,100
Vehicles		305,211			274,156
Accumulated depreciation		(735,108	)		(679,183	)
	$	244,290		$	256,020

Impairment Assessment

The Company evaluates the recoverability of long-lived assets whenever events or changes in circumstances indicate that the carrying value of such asset may not be recoverable. The Company groups and evaluates these long-lived assets for impairment at the lowest level at which individual cash flows can be identified. If indicators of impairment are present, the Company first compares the carrying amount of the asset group to the estimated future cash flows associated with the asset group. If the estimated future cash flows used in the analysis are less than the carrying amount of the asset group, an impairment loss calculation is prepared. The impairment loss calculation compares the carrying amount of the asset group to the asset group’s estimated discounted future cash flows. If required, an impairment loss is recorded for the portion of the asset group’s carrying value that exceeds the asset group’s estimated discounted future cash flows.

Inventory

Inventory consists primarily of photovoltaic modules, inverters, racking and associated finished parts required for the assembly of photovoltaic systems. Inventories are valued at the lower of cost or net realizable value determined by the first-in, first-out method. The Company writes down its inventory for estimated obsolescence equal to the difference between the carrying value of the inventory and the estimated net realizable value based upon assumptions about future demand and market conditions. If actual future demand or market conditions are less favorable than those projected by management, additional inventory write-downs may be required.

Inventory is net of a reserve for obsolescence of approximately $1,391,000 and $762,000 as of December 31, 2024 and 2023, respectively. At December 31, 2024 the Company’s existing inventory, totaling approximately $629,000, was determined to be obsolete, resulting in a corresponding loss on inventory obsolescence during the year ended December 31, 2024. There have been no sales of inventory previously deemed obsolete during the years ended December 31, 2024 and 2023.

Following is a summary of inventory as of December 31, 2024, and 2023.

	December 31,
	2024			2023
Finished goods	$	1,390,946		$	2,596,746
Reserve for obsolescence		(1,390,946	)		(761,662	)
	$	-		$	1,835,084

Accrued Warranty and Production Guarantee Liabilities

As a standard practice, the Company warranties its labor for ten years from the completion date of their installation projects and passes through manufacturer warranties on products installed. These warranties are not separately priced, therefore, costs related to the warranties are accrued when management determines they are able to estimate them. Management has not separately accounted for the actual warranty costs each year and has accrued based on their best estimates as of each year end.

The Company provides a two-year production guarantee on installed solar systems. These production guarantees are not separately priced, therefore, costs related to production guarantees are accrued based on management’s best estimates as of each year end.

Following is a summary of the accrued warranty and production guarantee liability for the year ended December 31, 2024, and 2023.

	December 31,
	2024			2023
Balance, beginning of year	$	234,840		$	206,669
Additions		51,470			28,171
Changes in estimates		(112,582	)		-
Balance, end of year	$	173,728		$	234,840

Convertible Instruments - Derivatives

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with the Accounting Standards Committee (“ASC”) 815 “Derivatives and Hedging”. It provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative financial instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or other expense. Upon conversion or exercise of a derivative financial instrument, the instrument is marked to fair value at the conversion date and is reclassified to equity. The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of notes redemption.

Leases

ASC 842, “Leases”, requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company used its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. A number of the lease agreements may contain options to renew and options to terminate the leases early. The lease term used to calculate ROU assets and lease liabilities only includes renewal and termination options that are deemed reasonably certain to be exercised. The Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months. The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances of accrued and prepaid rent, and unamortized lease incentives provided by lessors. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur. The Company has elected not to separate lease and non-lease components for all property leases for the purposes of calculating ROU assets and lease liabilities.

Income Taxes

The Company accounts for its income taxes in accordance with ASC 740 “Income Taxes”, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company has net deferred tax assets as of December 31, 2024, and 2023 pertaining to unused net operating loss carryforwards.  Due to the uncertainty of future realization, the Company has provided a full valuation allowance for the net deferred tax assets at December 31, 2024, and 2023.

Net Income (loss) Per Common Share

Basic net income (loss) per share is calculated by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents.

For the years ended December 31, 2024 and 2023, the potentially dilutive securities were excluded from the computation of diluted loss per share as the effect would be to reduce the net loss per common share. Therefore, the weighted-average common stock outstanding is used to calculate both basic and diluted net loss per share for the years ended December 31, 2024 and 2023.

A reconciliation of the weighted average shares outstanding used in basic and diluted earnings per share computation is as follows:

	Year Ended December 31,
	2024			2023
Numerator:
Net loss available for common stockholders	$	(28,934,045	)	$	(7,623,290	)
Denominator:
Weighted-average shares to compute basic earnings per share		8,075,296			2,843
Weighted-average shares to compute diluted earnings per share		8,075,296			2,843
Loss per share:
Basic	$	(3.58	)	$	(2,681.62	)
Diluted	$	(3.58	)	$	(2,681.62	)

Following is a summary of potentially dilutive securities as of December 31, 2024, and 2023.

	December 31,
	2024		2023
Class A preferred		100,000		100,000
Warrants		36,026		31,057
Convertible debt		231,164,667		3,010
Settlement liability		243,636,892		-
		474,937,585		134,067

Stock-Based Compensation

The Company may issue stock-based compensation to non-employees in non-capital raising transactions for services and for other costs. The cost of stock-based compensation issued is measured on the grant date at fair value.

Fair Value Measurements

The Company’s financial instruments consist of cash, accounts receivable, investments, accounts payable, convertible notes payable, advances from related parties, and derivative liabilities. The estimated fair value of cash, accounts receivable, accounts payable, convertible notes payable and advances from related parties approximate their carrying amounts due to the short-term nature of these instruments.

Certain non-financial assets are measured at fair value on a nonrecurring basis but are subject to periodic impairment tests. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

Level 1 - Valuation is based upon unadjusted quoted market prices for identical assets or liabilities in accessible active markets.

Level 2 - Valuation is based upon quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable in the market.

Level 3 - Valuation is based on models where significant inputs are not observable. The unobservable inputs reflect a company’s own assumptions about the inputs that market participants would use.

Following is a summary of recurring fair value measurements as of December 31, 2024, and 2023.

	December 31, 2024
	Level 1		Level 2		Level 3		Total
Derivative - settlement liability	$	-	$	-	$	1,948,711	$	1,948,711
Derivative - convertible debt		-		-		2,322,844		2,322,844
	$	-	$	-	$	4,271,555	$	4,271,555
	December 31, 2023
	Level 1		Level 2		Level 3		Total
Derivative - settlement liability	$	-	$	-	$	-	$	-
Derivative - convertible debt		-		-		388,983		388,983
	$	-	$	-	$	388,983	$	388,983

Following is a summary of nonrecurring fair value measurements as of December 31, 2024, and 2023.

	December 31, 2024
	Level 1		Level 2		Level 3		Total
Goodwill	$	-	$	-	$	-	$	-
Intangible assets		-		-		-		-
	$	-	$	-	$	-	$	-
	December 31, 2023
	Level 1		Level 2		Level 3		Total
Goodwill	$	-	$	-	$	2,886,794	$	2,886,794
Intangible assets		-		-		7,199,567		7,199,567
	$	-	$	-	$	10,086,361	$	10,086,361

The following is a summary of activity of Level 3 liabilities during the year ended December 31, 2023:

	Related to Debt
Balance - December 31, 2022	$	-
Additions		1,236,928
Settlement		(112,818	)
Change in fair value		(735,127	)
Balance - December 31, 2023	$	388,983

The following is a summary of activity of Level 3 liabilities during the year ended December 31, 2024:

	Related to			Related to
	Debt			Settlement			Total
Balance - December 31, 2023	$	388,983		$	-		$	388,983
Additions		5,759,456			4,257,378			10,016,834
Settlement		(1,808,779	)		(956,944	)		(2,765,723	)
Change in fair value		(2,016,816	)		(1,351,723	)		(3,368,539	)
Balance –December 31, 2024	$	2,322,844		$	1,948,711		$	4,271,555

During 2023 the Company issued note payable agreements (Note 5) which contained default provisions that contain a conversion feature meeting the definition of a derivative liability which therefore required bifurcation.

At December 31, 2023, the Company estimated the fair value of the conversion feature derivatives embedded in the outstanding notes payable and warrants based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock of $215; risk-free interest rates ranging from 5.26% to 5.60%; expected volatility of the Company’s common stock ranging from 273% to 345%; exercise prices of $126; and terms from one to seven months.

Beginning in January 2024, the Company issued convertible note payable agreements which contain conversion provisions meeting the definition of a derivative liability which therefore required bifurcation. The conversion features were valued at $5,759,000 upon issuance and recorded as a derivative liability, resulting in additional debt discounts and finance costs totaling $2,898,000 and $2,861,000, respectively.

At December 31, 2024, the Company estimated the fair value of the conversion feature derivatives embedded in the outstanding notes payable and warrants based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock of $0.01; risk-free interest rates ranging from 4.16% to 4.39%; expected volatility of the Company’s common stock ranging from 266% to 318%; exercise prices ranging from $0.008 to $0.010; and terms from three to sixteen months.

During July 2024, the Company entered into a settlement agreement (Note 9) related to certain accounts payable and accrued expenses. The settlement agreement contained a conversion feature meeting the definition of a derivative liability which therefore require bifurcation. The conversion feature was valued at $4,257,000 upon issuance and recorded as a derivative liability, resulting in a loss on settlement of liabilities.

At December 31, 2024, the Company estimated the fair value of the conversion feature derivatives embedded in the outstanding settlement liability based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock of $0.01; risk-free interest rate of 4.24%; expected volatility of the Company’s common stock of 303% based on the volatility of the Company’s historical stock prices; an exercise price of $0.007 and term of six months.

As of December 31, 2024, the Company determined the recorded values of intangibles and goodwill required adjustment for impairment resulting in a full impairment of both. See Note 4.

Financing Costs

Financing costs include certain financing related expenses including derivative origination costs in excess of allowable discounts, default penalties, and costs incurred related to financing that are not attributable to specific instruments.

Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting Improvements to Reportable Segment Disclosures. The amendments in this update improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis. Adoption did not have a material impact on the Company’s disclosures. See Note 3 for the Company’s segment disclosures.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-09 (“ASU 2023-09”), Income Taxes, which enhances the transparency of income tax disclosures by expanding annual disclosure requirements related to the rate reconciliation and income taxes paid. The amendments are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied on a prospective basis. Retrospective application is permitted. Adoption did not have any impact on the Company’s disclosures. 

Subsequent Events

Other than the events described in Note 12, there were no subsequent events that required recognition or disclosure. The Company evaluated subsequent events through the date the consolidated financial statements were issued and filed with the Securities and Exchange Commission.