UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
OR
For the transition period from _________ to __________
Commission File Number:
(Exact name of registrant as specified in its charter)
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| Incorporation or Organization) | Identification No.) | |
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(Address of Principal Executive Offices) |
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(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Indicate
by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the
past 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.
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted 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 and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
| Large accelerated filer | ¨ | Accelerated filer | ¨ |
| x | 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. ¨
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
¨ No
| 1 |
Securities registered under Section 12(b) of the Act:
| Title of each class | Name of each exchange on which registered |
| N/A | N/A |
Securities registered under Section 12(g) of the Act:
Common Stock, $.0001 Par Value
(Title of class)
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
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). ☐
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of August 12, 2024, the issuer had shares of its common stock issued and outstanding, par value $0.0001 per share.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This report on Form 10-Q contains "forward-looking statements" that involve risks and uncertainties. You should not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described in our Form 10-K filed on April 1, 2024, and other filings we make with the Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made. We do not intend to update any of the forward-looking statements after the date of this report to conform these statements to actual results or to changes in our expectations, except as required by law.
The following discussion and analysis of financial condition and results of operations is based upon and should be read in conjunction with our audited financial statements and related notes thereto included elsewhere in this report, and in our Form 10-K filed on April 1, 2024.
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TWO HANDS CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2024
TABLE OF CONTENTS
| 4 |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
| TWO HANDS CORPORATION |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
June 30, 2024 | December 31, 2023 | |||||||
| ASSETS | (Unaudited) | |||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| VAT taxes receivable | ||||||||
| Inventory | ||||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use asset | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Due to related party | ||||||||
| Notes payable | ||||||||
| Line of credit | ||||||||
| Current portion of operating lease right-of-use liability | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities | ||||||||
| Promissory notes | ||||||||
| Non-redeemable convertible notes, net | ||||||||
| Operating lease right-of-use liability, net of current portion | ||||||||
| Total long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| Temporary equity | ||||||||
| Series A convertible preferred stock; $ par value; shares designated, shares issued and outstanding | ||||||||
| Series B convertible preferred stock; $ par value; shares designated, shares issued and outstanding | ||||||||
| Series C convertible preferred stock; $ par value; shares designated, shares and shares issued and outstanding, respectively | ||||||||
| Series D convertible preferred stock; $ par value; shares designated, shares issued and outstanding | ||||||||
| Series E convertible preferred stock; $ par value; shares designated, shares issued and outstanding | ||||||||
| Total temporary equity | ||||||||
| Stockholder's deficit | ||||||||
| Preferred stock; $ par value; shares authorized, issued and outstanding | ||||||||
| Common stock; $ par value; shares authorized, and shares issued and outstanding, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive income | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders' deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders' deficit | $ | $ | ||||||
| The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements. | ||||||||
| 5 |
| TWO HANDS CORPORATION |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS |
| (Unaudited) |
For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Sales | $ | $ | $ | $ | ||||||||||||
| Cost of goods sold | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Amortization of debt discount and interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gain on disposition | ||||||||||||||||
| Loss on settlement of non-redeemable convertible notes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other comprehensive (loss) income | ||||||||||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||||||||||
| Total other comprehensive (loss) income | ( | ) | ( | ) | ||||||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per common share - basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average number of common shares outstanding - basic | ||||||||||||||||
| The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements. | ||||||||||||||||
| 6 |
| TWO HANDS CORPORATION |
| CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT |
| For the three and six months ended June 30, 2024 and 2023 |
| (Unaudited) |
| Common Stock | Common Stock to be | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Total Stockholders' | |||||||||||||||||||||||
| Shares | Amount | Issued | Capital | Income | Deficit | Deficit | ||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
| Stock issued for conversion of non-redeemable convertible notes | ||||||||||||||||||||||||||||
| Stock issued for settlement of debt - related party | — | |||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | |||||||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
| Common Stock | Common Stock to be | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Total Stockholders' | |||||||||||||||||||||||
| Shares | Amount | Issued | Capital | Income | Deficit | Deficit | ||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
| Stock issued for conversion of non-redeemable convertible notes | ||||||||||||||||||||||||||||
| Stock issued for settlement of debt - related party | ||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | |||||||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
| 7 |
| TWO HANDS CORPORATION |
| CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (CONTINUED) |
| For the three and six months ended June 30, 2024 and 2023 |
| (Unaudited) |
| Common Stock | Common Stock to be | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Total Stockholders' | |||||||||||||||||||||||
| Shares | Amount | Issued | Capital | Income | Deficit | Deficit | ||||||||||||||||||||||
| Balance, March 31, 2023 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
| Stock issued for conversion of non-redeemable convertible notes | ||||||||||||||||||||||||||||
| Stock issued for the conversion of Series B convertible preferred stock | ||||||||||||||||||||||||||||
| Stock issued for the conversion of Series C convertible preferred stock | ||||||||||||||||||||||||||||
| Stock issued to settle stock to be issued | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance, June 30, 2023 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
| Common Stock | Common Stock to be | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Total Stockholders' | |||||||||||||||||||||||
| Shares | Amount | Issued | Capital | Income | Deficit | Deficit | ||||||||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
| Stock issued for conversion of non-redeemable convertible notes | ||||||||||||||||||||||||||||
| Stock issued for settlement of debt - related party | ||||||||||||||||||||||||||||
| Stock issued for the conversion of Series B convertible preferred stock | ||||||||||||||||||||||||||||
| Stock issued for the conversion of Series C convertible preferred stock | ||||||||||||||||||||||||||||
| Stock issued to settle stock to be issued | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance, June 30, 2023 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
| 8 |
| TWO HANDS CORPORATION |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (Unaudited) |
| For the six months ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to cash used in operating activities | ||||||||
| Depreciation and amortization | ||||||||
| Bad debt | ( | ) | ||||||
| Gain on disposition | ( | ) | ||||||
| Amortization of debt discount | ||||||||
| Loss on settlement of non-redeemable convertible notes | ||||||||
| Change in operating assets and liabilities | ||||||||
| Accounts and taxes receivable | ( | ) | ( | ) | ||||
| Prepaid expense | ||||||||
| Inventory | ( | ) | ||||||
| Deferred revenue | ( | ) | ||||||
| Accounts payable and accrued liabilities | ||||||||
| Operating lease right-of-use liability | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of property and equipment | ||||||||
| Net cash used in investing activities | ||||||||
| Cash flow from financing activities | ||||||||
| Expenses paid for by related party | ||||||||
| Repayment of advances to related party | ( | ) | ( | ) | ||||
| Proceeds from notes payable | ||||||||
| Repayment of notes payable | ( | ) | ||||||
| Proceeds from line of credit | ||||||||
| Net cash provided by financing activities | ||||||||
| Change in foreign exchange | ( | ) | ||||||
| Net change in cash | ( | ) | ( | ) | ||||
| Cash, beginning of the period | ||||||||
| Cash, end of the period | $ | $ | ||||||
| Cash paid during the period | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| Supplemental disclosure of non-cash investing and financing activities | ||||||||
| Stock issued to settle due to related party | $ | $ | ||||||
| Stock issued to settle promissory note - related party | $ | $ | ||||||
| Stock issued to settle non-redeemable convertible notes | $ | $ | ||||||
| The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements. | ||||||||
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TWO HANDS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Two Hands Corporation (the "Company") was incorporated in the state of Delaware on April 3, 2009 and on July 26, 2016, changed its name from Innovative Product Opportunities Inc. to Two Hands Corporation.
The Two Hands co-parenting application launched on July 2018 and the Two Hands Gone application launched In February 2019. The Company ceased work on these applications in 2021.
The gocart.city online consumer grocery delivery application was released in early June 2020 and Cuore Food Services commenced sale of dry goods and produce to other businesses in July 2020.
In July 2021, the Company made the strategic decision to focus exclusively on the grocery market through three on-demand branches of its grocery businesses: gocart.city, Grocery Originals, and Cuore Food Services.
| i) | gocart.city is the Company’s online delivery marketplace, allowing consumers to shop online and have their groceries delivered. |
| ii) | Grocery Originals is the Company’s brick-and-mortar grocery store located in Mississauga Ontario at the site of the Company’s warehouse. |
| iii) | Cuore Food Services is the Company’s wholesale food distribution branch. |
On May 1, 2023, the Company entered into an asset sale agreement with a non-related private corporation (“Purchaser”) whereby the Company sold the assets of gocart.city. The sale included the e-commerce site, branding, supporting components of the Grocery Originals store and inventory. The ongoing sales and client base gocart.city and Grocery Originals was transferred as part of the asset sale. After May 1, 2023, the Company continued the business of Cuore Food Services.
The operations of the business are carried on by Two Hands Canada Corporation, a wholly-owned subsidiary of the Company, incorporated under the laws of Canada on February 7, 2014.
The Company received approval from the Canadian Securities Exchange (the "CSE") to list its common shares (the "Common Shares") on the CSE. Trading of the Common Shares in the capital of the Company commenced on August 5, 2022, under the symbol "TWOH".
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements of Two Hands Corporation have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission requirements for interim financial statements. Therefore, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The financial statements should be read in conjunction with the annual financial statements for the year ended December 31, 2023 of Two Hands Corporation in our Form 10-K filed on April 1, 2024.
The interim financial statements present the balance sheets, statements of operations, stockholders’ deficit and cash flows of Two Hands Corporation. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States.
The interim financial information is unaudited. In the opinion of management, all adjustments necessary to present fairly the financial position as of June 30, 2024 and the results of operations and cash flows presented herein have been included in the financial statements. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results of operations for the full year.
GOING CONCERN
The Company's financial statements are prepared
in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of
assets and the liquidation of liabilities in the normal course of business. During the six months ended June 30, 2024, the Company
incurred a net loss of $
| 10 |
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Two Hands Canada Corporation. All intercompany transactions and balances have been eliminated in consolidation.
USE OF ESTIMATES AND ASSUMPTIONS
Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
CONCENTRATIONS
The following table summarizes accounts receivable and revenue concentrations:
Accounts receivable on June 30, 2024 | Revenue for the six months ended June 30, 2024 | |||||||
| Customer #1 | % | |||||||
| Customer #2 | % | |||||||
| Total concentration | % | |||||||
The following table summarizes accounts payable and purchases concentrations:
Accounts payable on June 30, 2024 | Purchases for the six months ended June 30, 2024 | |||||||
| Supplier #1 | % | % | ||||||
| Supplier #2 | % | |||||||
| Supplier #3 | % | |||||||
| Supplier #4 | % | |||||||
| Supplier #5 | % | |||||||
| Supplier #6 | % | |||||||
| Supplier #7 | % | |||||||
| Total concentration | % | % | ||||||
CASH AND CASH EQUIVALENTS
For the purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.
ACCOUNTS RECEIVABLE
Trade accounts receivable is recorded at the invoiced amount and do not bear interest. The Company grants credit to its customers with defined payment terms, performs ongoing evaluations of the credit worthiness of its customers and generally does not require collateral. Accounts receivables are carried at their outstanding principal amounts, less an anticipated amount for discounts and an allowance for expected credit losses, which management believes is sufficient to cover potential credit losses based on historical experience and periodic evaluation of the financial condition of the Company's customers. Estimated credit losses consider relevant information about past events, current conditions and reasonable and supporting forecasts that affect the collectability of financial assets.
The allowance for doubtful accounts on June 30, 2024
and December 31, 2023 is $
| 11 |
INVENTORY
Inventory consisting of groceries and dry goods are
measured at the lower of cost and net realizable value. Cost is determined pursuant to the first-in first out (“FIFO”) method.
The cost of inventory includes the purchase price, shipping and handling costs incurred to bring the inventories to their present location
and condition. Inventory with a short shelf life that is not utilized within the planned period are immediately expensed in the statement
of operations. Estimated gross profit rates are used to determine the cost of goods sold in the interim periods, unless physical inventory
counts are performed. Any significant adjustment that results from the reconciliation with physical inventory counts is disclosed. On
June 30, 2024 and December 31, 2023, the inventory valuation allowance was $
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost, less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to expense when incurred, while renewals and betterments that materially extend the life of an asset are capitalized.
The costs of assets sold, retired, or otherwise disposed of, and the related allowance for depreciation, are eliminated from the accounts, and any resulting gain or loss is recognized in the results from operations. Depreciation is provided over the estimated useful lives of the assets, which are as follows:
Computer equipment
In the year of acquisition, one half the normal rate of depreciation is provided.
REVENUE RECOGNITION
In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. The provisions of ASC 606 include a five-step process by which we determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which we expect to be entitled in exchange for those goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation. We recognize revenue for the sale of our products upon delivery to a customer.
During the six months ended June 30, 2024 and 2023,
the Company had revenue of $
LEASES
Under ASC 842, a right-of-use asset and lease liability is recorded for all leases and the statement of operations reflects the lease expense for operating leases and amortization/interest expense for financing leases.
The Company does not apply the recognition requirements in the standard to a lease that at commencement date has a lease term of twelve months or less and does not contain a purchase option that it is reasonably certain to exercise and to not separate lease and related non-lease components. Options to extend the leases are not included in the minimum lease terms unless they are reasonably certain to be exercised.
The Company leases an automobile under a non-cancelable operating lease. Right-of-use assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
| 12 |
DEBT DISCOUNT AND DEBT ISSUANCE COSTS
Debt discounts and debt issuance costs incurred in connection with the issuance of convertible notes are capitalized and amortized to interest expense based on the related debt agreements using the effective interest rate method. Unamortized discounts are netted against convertible notes.
INCOME TAXES
The Company accounts for income taxes in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("FASB ASC") 740, Income Taxes. Under the assets and liability method of FASB ASC 740, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value.
Basic net income (loss) per share includes no dilution and is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing earnings available to common shareholders by the weighted average number of common shares outstanding for the period increased to include the number of additional common shares that would have been outstanding if potentially dilutive securities had been issued Dilutive net loss per share for common stock is calculated utilizing the if-converted method which assumes the conversion of all Series C Stock to common stock. On June 30, 2024 and June 30, 2023, we excluded the common stock issuable upon conversion of non-redeemable convertible notes, and Series C Stock of shares and shares, respectively, as their effect would have been anti-dilutive.
FOREIGN CURRENCY TRANSLATION
The consolidated financial statements are presented in United States dollars. The functional currency of the consolidated entities are determined by evaluating the economic environment of each entity. The functional currency of Two Hands Corporation is the United States dollar. Foreign exchange translation adjustments are reported as gains or losses resulting from foreign currency transactions and are included in the results of operations.
Two Hands Canada Corporation maintains its accounts in the Canadian dollar. Assets and liabilities are translated to United States dollars at year-end exchange rates. Income and expenses are transaction at averages exchange rate during the year. Foreign currency transaction adjustments are reported as other comprehensive income, a component of equity in the consolidated balance sheet.
The Company accounts for stock incentive awards issued to employees and non-employees in accordance with FASB ASC 718, Stock Compensation. Accordingly, stock-based compensation is measured at the grant date, based on the fair value of the award. Stock-based awards to employees are recognized as an expense over the requisite service period, or upon the occurrence of certain vesting events. Additionally, stock-based awards to non-employees are expensed over the period in which the related services are rendered.
FAIR VALUE OF FINANCIAL INSTRUMENTS
ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.
Included in the ASC Topic 820 framework is a three level valuation inputs hierarchy with Level 1 being inputs and transactions that can be effectively fully observed by market participants spanning to Level 3 where estimates are unobservable by market participants outside of the Company and must be estimated using assumptions developed by the Company. The Company discloses the lowest level input significant to each category of asset or liability valued within the scope of ASC Topic 820 and the valuation method as exchange, income or use. The Company uses inputs which are as observable as possible and the methods most applicable to the specific situation of each company or valued item.
| 13 |
The Company’s financial instruments such as cash, accounts payable and accrued liabilities, non-redeemable convertible notes, notes payable and due to related parties are reported at cost, which approximates fair value due to the short-term nature of these financial instruments.
RECENT ACCOUNTING PRONOUNCEMENTS
In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. The Company is currently evaluating the provisions of the amendments and the impact on its financial statements.
In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the provisions of the amendments and the impact on its financial statements.
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.
NOTE 3 – NON-REDEEMABLE CONVERTIBLE NOTES
| 14 |
NOTE 4 – LEASES
The Company entered into an operating lease
agreement on October 14, 2021 for an automobile, resulting in the recording of an initial liability and corresponding right-of-use asset
of $
The Company’s operating lease expires in 2025. The following shows future lease payments for the remaining periods under operating lease at June 30, 2024:
| Periods ending December 31, | Operating Lease Commitments | |||
| 2024 | $ | |||
| 2025 | ||||
| Total operating lease commitments | ||||
| Less: imputed interest | ( | ) | ||
| Total right-of-use liability | $ | |||
The Company’s discounted current right-of-use
lease liability and discounted non-current right-of-use lease liability on June 30, 2024 is $
Operating leases expense for the six months
ended June 30, 2024 is $
NOTE 5 – LINE OF CREDIT
On April 14, 2022, the Company entered into a
binding Grid Promissory Note and Credit Facility Agreement (the “Line of Credit”) with The Cellular Connection Ltd. (the
“Lender”). Pursuant to the Line of Credit, the Company can borrow from the Lender up to CAD $
| 15 |
NOTE 6 – NOTES PAYABLE
As of June 30, 2024 and December 31, 2023, notes payable
due to Piero Manzini, and The Cellular Connection Limited, a corporation controlled by Stuart Turk, totaling $
NOTE 7 – PROMISSORY NOTES
Promissory Notes
As of June 30, 2024 and December 31, 2023, promissory
notes of $
Promissory Notes – Related Party
As of June 30, 2024 and December 31, 2023, promissory
note – related party of $
NOTE 8 – RELATED PARTY TRANSACTIONS
As of June 30, 2024 and December 31, 2023, advances
and accrued salary of $
During the six months ended June 30, 2024, the Company
issued advances due to related party for $
During the six months ended June 30, 2023, the Company
issued advances due to related party for $
During the six months ended June 30, 2024 and 2023,
the Company paid Linus Creative Services, a business controlled by Bradley Southam, a director of the Company, $
Employment Agreements
On January 15, 2023, the Company executed an employment
agreement for the period from January 1, 2023 to December 31, 2023 with Nadav Elituv, the Chief Executive Officer of the Company whereby
the Company shall pay an annual salary of $
On March 17, 2024, the Company executed an employment
agreement for the period from January 1, 2024 to December 31, 2024 with Nadav Elituv, the Chief Executive Officer of the Company whereby
the Company shall pay an annual salary of $
On July 1, 2023, entered into a consulting agreement
to pay 2130555 Ontario Limited, a Company controlled by Nadav Elituv, a monthly consulting fee of $
On January 1, 2024, entered into a consulting agreement
to pay 2130555 Ontario Limited, a Company controlled by Nadav Elituv, a monthly consulting fee of CAD $
| 16 |
Stock-based compensation – salaries expense related to these employment agreements for the six months ended June 30, 2024 and 2023 is $ and $, respectively. Stock-based compensation – salaries expense was recognized ratably over the requisite service period.
NOTE 9 – PREFERRED STOCK
On August 6, 2013, the Company filed a Certificate
of Designation with the Delaware Secretary of State thereby designating two hundred thousand () shares as Series A Convertible
Preferred Stock (“Series A Stock”). Each share of Series A Stock is convertible into one thousand (1,000) shares of common
stock of the Company.
On December 12, 2019, the Company filed a Certificate
of Designation with the Delaware Secretary of State thereby designating one hundred thousand () shares as Series B Convertible
Preferred Stock (“Series B Stock”). After a one year holding period,
On October 7, 2020, the Company filed a Certificate
of Designation with the Delaware Secretary of State thereby designating five thousand () shares as Series C Convertible Preferred
Stock, par value $ per share (“Series C Stock”).
On September 1, 2021, the Company filed a Certificate
of Designation with the Delaware Secretary of State thereby designating two hundred thousand () shares as Series D Convertible
Preferred Stock, par value $ per share (“Series D Stock”).
On June 30, 2022, the Company made an amendment to
the Certificate of Designation of its Series C Stock which lowered the fixed conversion price from $
On October 4,
2022, the Company filed a Certificate of Designation with the Delaware Secretary of State that had the effect of designating shares
of preferred stock as Series E Convertible Preferred Stock (“Series E Stock”). Series E Stock are non-voting, have a par value
of $
On September 29, 2023, a
Series A Stock, Series B Stock, Series C Stock, Series D Stock and Series E Stock has been classified as temporary equity (outside of permanent equity) on the consolidated balance sheet on June 30, 2024 and December 31, 2023, since share settlement is not within the control of the Company.
| 17 |
NOTE 10 - STOCKHOLDERS' EQUITY
The Company is authorized to issue an aggregate of common shares with a par value of $ per share and shares of preferred stock with a par value of $ per share.
On August 22, 2023, pursuant to stockholder consent,
our Board of Directors authorized an amendment (the "Amendment") to our Certificate of Incorporation, as amended, to effect
a reverse stock split of the issued and outstanding shares of our common stock, par value $, on a
During the six months ended June 30, 2024, the Company
elected to convert $
On February 26, 2024, the Company agreed to issue
shares of common stock with a fair value of $
NOTE 11 - SUBSEQUENT EVENTS
From July 1, 2024 to August 14, 2024, the Company
elected to convert $of principal and interest of non-redeemable convertible notes into shares of common stock of the Company with a fair value of $
On August 5, 2024, the Side Letter Agreement dated January 8, 2018, with a non-related investor, Stuart Turk, was fully converted.
| 18 |
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Two Hands Corporation (the "Company") was incorporated in the state of Delaware on April 3, 2009 and on July 26, 2016, changed its name from Innovative Product Opportunities Inc. to Two Hands Corporation.
The Two Hands co-parenting application launched on July 2018 and the Two Hands Gone application launched In February 2019. The Company ceased work on these applications in 2021.
The gocart.city online consumer grocery delivery application was released in early June 2020 and Cuore Food Services commenced sale of dry goods and produce to other businesses in July 2020.
In July 2021, the Company made the strategic decision to focus exclusively on the grocery market through three on-demand branches of its grocery businesses: gocart.city, Grocery Originals, and Cuore Food Services. All three of such branches of the Company’s business share industry standard warehouse storage space and inventory. The Company’s inventory is updated continuously and generally consists of produce, meats, pantry items, bakery & pastry goods, gluten-free goods, and organic items, acquired from various different suppliers in Canada and internationally, with whom the Company and its principals have cultivated long-term relationships.
On May 1, 2023, the Company sold its gocarty.city and Grocery Originals branches.
Cuore Food Services
Cuore Food Services is the Company’s wholesale food distribution branch. Cuore Food Services uses inventory from the Company’s warehouse as well as inventory it acquires on an ad hoc basis, and focuses on bulk delivery of goods to food service business such as restaurants, hotels, event planning/hosting businesses. Orders distributed through Cuore Food Services can be made over the phone or online through a different front-end of the gocart.city platform.
The Company continued Cuore Food Services after May 1, 2023.
gocart.city
gocart.city is the Company’s online delivery marketplace, allowing consumers to shop online and have their groceries delivered. The gocart.city online platform stores all inventory in the Company’s warehouse located at its head office in Mississauga. The aim of gocart.city is to deliver fresh and high-quality food products directly to retail consumers throughout Southern Ontario. The Company recently engaged local renowned chef, Grace DiFede, to curate a new line of meal kits and bundles to sell on the gocart.city platform alongside the Company’s other grocery essentials.
The gocart.city platform is available online and through applications for handheld devices supporting iOS or Android. The features and functions of gocart.city include customers having the ability to search for products by category and name, customers saving items in their cart and being able to share their cart with others, and being able to opt-in to digital weekly alerts that provide information on promotions and discounts on certain products. gocart.city also includes standard payment options for customers, such as PayPal, American Express and Visa.
The Company also employs a social media manager to oversee and increase engagement with customers by using platforms such as Facebook, Twitter, Instagram and Google. The ads that are posted on these platforms are generic branding related to the Company, as well as the promotion of particular sale items. Moreover, the Company has agreements with SRAX, Inc. and Adfuel Media Inc. to boost such engagement.
Management's Plan of Operation
The Company is focused exclusively on the grocery market through its on-demand grocery business: Cuore Food Services.
Products and Services
The Company plans to continue expanding its reach to additional customers and geographies across Canada while enhancing its product line with a focus on Italian staples, including pasta, oils, olives, and canned tomatoes.
| 19 |
Operations and Logistics
The company plans to expand storage and warehousing, expand warehouse staff, add more delivery trucks and expand the delivery area.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the Financial Statements and accompanying notes. Estimates are used for, but not limited to, the accounting for the allowance for doubtful accounts, inventories, impairment of long-term assets, stock-based compensation, derivatives, income taxes and loss contingencies. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions.
We believe the following critical accounting policies, among others, may be impacted significantly by judgment, assumptions and estimates used in the preparation of the Financial Statements:
STOCK-BASED COMPENSATION
The Company accounts for stock incentive awards issued to employees and non-employees in accordance with FASB ASC 718, Stock Compensation. Accordingly, stock-based compensation is measured at the grant date, based on the fair value of the award. Stock-based awards to employees are recognized as an expense over the requisite service period, or upon the occurrence of certain vesting events. Additionally, stock-based awards to non-employees are expensed over the period in which the related services are rendered.
REVENUE RECOGNITION
In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. The provisions of ASC 606 include a five-step process by which we determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which we expect to be entitled in exchange for those goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation. We recognize revenue for the sale of our products upon delivery to a customer.
RECENT ACCOUNTING PRONOUNCEMENTS
In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). This update amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity's own equity and improves and amends the related EPS guidance for both Subtopics. This standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2023, which means it will be effective for our fiscal year beginning January 1, 2024. The Company recognizes there will be an impact on how conversions are calculated which may require recognition of gains or losses. However, the Company believes, through their evaluation, there is no material impact this new guidance will have on its financial statements.
In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. The Company is currently evaluating the provisions of the amendments and the impact on its financial statements.
In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the provisions of the amendments and the impact on its financial statements.
| 20 |
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.
COMPARISON OF RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2024 AND 2023
Sales, Cost of goods sold, Gross profit:
| Three months ended June 30, | Change | |||||||||||||||
2024 $ | 2023 $ | $ | % | |||||||||||||
| Sales | 226,289 | 197,324 | 28,965 | 15 | ||||||||||||
| Cost of goods sold | 181,279 | 185,108 | (3,829 | ) | (2 | ) | ||||||||||
| Gross profit | 45,010 | 12,216 | 32,794 | 268 | ||||||||||||
| Gross profit % | 19.9 | % | 6.2 | % | ||||||||||||
Breakdown of sales by branch:
| Three months ended June 30, | Change | |||||||||||||||
2024 $ | 2023 $ | $ | % | |||||||||||||
| gocart.city – online delivery | — | 362 | (362 | ) | (100 | ) | ||||||||||
| Grocery Originals and Cuore Food Service – retail and wholesale distribution | 226,289 | 196,962 | 29,327 | 15 | ||||||||||||
| Total sales | 226,289 | 197,324 | 28,965 | 15 | ||||||||||||
The gocart.city grocery delivery application was released in early June 2020 and gocart.city wholesale commenced sale of dry goods and produce to other businesses in July 2020. Our revenue from gocart.city – online delivery was primarily due to the recognition of revenue from expired grocery vouchers. gocart.city – online delivery was sold on May 1, 2023.
The gross margin percentage increased from 2023 to 2024 due to improved management of purchases and inventory.
Operating expenses:
| Three months ended June 30, | Change | |||||||||||||||
2024 $ | 2023 $ | $ | % | |||||||||||||
| Salaries and benefits | 165,538 | 172,852 | (7,314 | ) | (4 | ) | ||||||||||
| Occupancy expense | 10,412 | 12,375 | (1,963 | ) | (16 | ) | ||||||||||
| Advertising and travel | 4,941 | 11,930 | (6,989 | ) | (59 | ) | ||||||||||
| Auto expenses | 4,002 | 5,502 | (1,500 | ) | (27 | ) | ||||||||||
| Consulting | 76,671 | 67,018 | 9,653 | 14 | ||||||||||||
| Depreciation and Amortization | 2,864 | 3,219 | (355 | ) | (11 | ) | ||||||||||
| Bad debt | (2,106 | ) | (31,940 | ) | 29,834 | (93 | ) | |||||||||
| Office and general expenses | 17,003 | 14,674 | 2,329 | 16 | ||||||||||||
| Professional fees | 29,862 | 19,571 | 10,291 | 53 | ||||||||||||
| Freight and delivery | 2,312 | 2,126 | 186 | 9 | ||||||||||||
| Total operating expenses | 311,499 | 277,327 | 34,172 | 12 | ||||||||||||
Our total operating expenses for the three months ended June 30, 2024 was $311,499, compared to $277,327, for the three months ended June 30, 2023, respectively. The increase in total operating expense is primarily due to an increase in professional fees and consulting.
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Salaries and benefits for the three months ended June 30, 2024 and 2023, comprise primarily of accrued but unpaid salary due to Nadav Elituv, our Chief Executive Officer, of $150,000 and $150,000, respectively.
For the three months ended June 30, 2024, consulting comprises primarily of (i) $52,610 for consulting fees payable under a consulting agreement with 2130555 Ontario Limited, a Company controlled by Nadav Elituv and (ii) $24,061 paid to contractors to manage our grocery business The amount paid to contractors managing our grocery business increased in 2024 due to fewer employees being paid on regular payroll.
For the three months ended June 30, 2023, consulting comprises primarily of (i) $49,091 for consulting fees payable under a consulting agreement with 2130555 Ontario Limited, a Company controlled by Nadav Elituv and (ii) $17,927 paid to contractors to manage our grocery business.
On January 1, 2024, entered into a consulting agreement to pay 2130555 Ontario Limited, a Company controlled by Nadav Elituv, a monthly consulting fee of CAD $24,000 per month for services for the period from January 1, 2024 to December 31, 2024.
Other income (expense):
| Three months ended June 30, | Change | |||||||||||||||
2024 $ | 2023 $ | $ | % | |||||||||||||
| Amortization of debt discount and interest expense | (43,975 | ) | (38,774 | ) | (5,201 | ) | 13 | |||||||||
| Loss on settlement of non-redeemable convertible notes | (184,577 | ) | (275,950 | ) | 91,373 | (33 | ) | |||||||||
| Gain on disposition | — | 50,750 | (50,750 | ) | (100 | ) | ||||||||||
| Total operating expenses | (228,552 | ) | (263,974 | ) | 35,422 | 13 | ||||||||||
Amortization of debt discount and interest expense for the three months ended June 30, 2024 was $43,975, compared to $38,774 for the three months ended June 30, 2023. Amortization of debt discount and interest expense relates to the issuance of non-redeemable convertible notes and promissory notes.
During the three months ended June 30, 2024 and 2023, the Company elected to convert $106,661 and $41,770 of principal and interest of a non-redeemable convertible note into 1,066,605,300 and 417,700 shares of common stock of the Company resulting in a loss on settlement of debt of $184,577 and $275,950, respectively.
During the three months ended June 30, 2023 the Company received net proceeds from the sale of gocart.city assets of $64,076 (CAD $86,742). The net proceeds comprise of the settlement $127,249 (CAD $172,261) of accounts payable and $63,173 (CAD $85,519) of account receivable with the Purchaser resulting in a gain of $50,750 (CAD $68,442).
Net loss for the period:
| Three months ended June 30, | Change | |||||||||||||||
2024 $ | 2023 $ | $ | % | |||||||||||||
| Net loss for the period | (495,041 | ) | (529,085 | ) | 34,044 | (6 | ) | |||||||||
Our net loss for the three months ended June 30, 2024 was $495,041, compared to $529,085 for the three months ended June 30, 2023, respectively. Our losses during the three months ended June 30, 2024 and 2023 are primarily due to costs associated with professional fees, compensation due to our CEO, interest expense and loss on settlement of non-redeemable convertible notes.
COMPARISON OF RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023
Sales, Cost of goods sold, Gross profit:
| Six months ended June 30, | Change | |||||||||||||||
2024 $ | 2023 $ | $ | % | |||||||||||||
| Sales | 389,766 | 372,769 | 16,997 | 5 | ||||||||||||
| Cost of goods sold | 329,767 | 345,104 | (15,337 | ) | (4 | ) | ||||||||||
| Gross profit | 59,999 | 27,665 | 32,334 | 117 | ||||||||||||
| Gross profit % | 15.4 | % | 7.4 | % | ||||||||||||
| 22 |
Breakdown of sales by branch:
| Six months ended June 30, | Change | |||||||||||||||
2024 $ | 2023 $ | $ | % | |||||||||||||
| gocart.city – online delivery | — | 13,167 | (13,167 | ) | (100 | ) | ||||||||||
| Grocery Originals and Cuore Food Service – retail and wholesale distribution | 389,766 | 359,602 | 30,164 | 8 | ||||||||||||
| Total sales | 389,766 | 372,769 | 16,997 | 5 | ||||||||||||
The gocart.city grocery delivery application was released in early June 2020 and gocart.city wholesale commenced sale of dry goods and produce to other businesses in July 2020. Our revenue from gocart.city – online delivery was primarily due to the recognition of revenue from expired grocery vouchers. gocart.city – online delivery was sold on May 1, 2023.
The gross margin percentage increased from 2023 to 2024 due to improved management of purchases and inventory.
Operating expenses:
| Six months ended June 30, | Change | |||||||||||||||
2024 $ | 2023 $ | $ | % | |||||||||||||
| Salaries and benefits | 328,539 | 368,422 | (39,883 | ) | (11 | ) | ||||||||||
| Occupancy expense | 20,976 | 30,800 | (9,824 | ) | (32 | ) | ||||||||||
| Advertising and travel | (28,102 | ) | 18,525 | (46,627 | ) | (252 | ) | |||||||||
| Auto expenses | 9,060 | 13,624 | (4,564 | ) | (33 | ) | ||||||||||
| Consulting | 153,765 | 127,099 | 26,666 | 21 | ||||||||||||
| Depreciation and Amortization | 5,829 | 6,524 | (695 | ) | (11 | ) | ||||||||||
| Bad debt | 527 | (28,937 | ) | 29,464 | (102 | ) | ||||||||||
| Office and general expenses | 34,117 | 28,001 | 6,116 | 22 | ||||||||||||
| Professional fees | 86,733 | 72,168 | 14,565 | 20 | ||||||||||||
| Freight and delivery | 5,245 | 6,807 | (1,562 | ) | (23 | ) | ||||||||||
| Total operating expenses | 616,689 | 643,033 | (26,344 | ) | (4 | ) | ||||||||||
Our total operating expenses for the six months ended June 30, 2024 was $616,689, compared to $643,033, for the six months ended June 30, 2023, respectively. The decrease in total operating expense is primarily due to a $60,000 recovery on a service contract.
Salaries and benefits for the six months ended June 30, 2024 and 2023, comprise primarily of accrued but unpaid salary due to Nadav Elituv, our Chief Executive Officer, of $300,000 and $300,000, respectively.
For the six months ended June 30, 2024, consulting comprises primarily of (i) $105,984 for consulting fees payable under a consulting agreement with 2130555 Ontario Limited, a Company controlled by Nadav Elituv and (ii) $47,781 paid to contractors to manage our grocery business The amount paid to contractors managing our grocery business increased in 2024 due to fewer employees being paid on regular payroll.
For the six months ended June 30, 2023, consulting comprises primarily of (i) $97,878 for consulting fees payable under a consulting agreement with 2130555 Ontario Limited, a Company controlled by Nadav Elituv and (ii) $29,221 paid to contractors to manage our grocery business.
| 23 |
On January 1, 2024, entered into a consulting agreement to pay 2130555 Ontario Limited, a Company controlled by Nadav Elituv, a monthly consulting fee of CAD $24,000 per month for services for the period from January 1, 2024 to December 31, 2024.
Other income (expense):
| Six months ended June 30, | Change | |||||||||||||||
2024 $ | 2023 $ | $ | % | |||||||||||||
| Amortization of debt discount and interest expense | (85,785 | ) | (76,451 | ) | (9,334 | ) | 12 | |||||||||
| Loss on settlement of non-redeemable convertible notes | (634,712 | ) | (393,500 | ) | (241,212 | ) | 61 | |||||||||
| Gain on disposition | — | 50,750 | (50,750 | ) | (100 | ) | ||||||||||
| Total operating expenses | (720,497 | ) | (419,201 | ) | (301,296 | ) | 72 | |||||||||
Amortization of debt discount and interest expense for the six months ended June 30, 2024 was $85,785, compared to $76,451 for the six months ended June 30, 2023. Amortization of debt discount and interest expense relates to the issuance of non-redeemable convertible notes and promissory notes.
During the six months ended June 30, 2024 and 2023, the Company elected to convert $112,526 and $45,920 of principal and interest of a non-redeemable convertible note into 1,125,255,300 and 459,200 shares of common stock of the Company resulting in a loss on settlement of debt of $634,712 and $393,500, respectively.
During the six months ended June 30, 2023 the Company received net proceeds from the sale of gocart.city assets of $64,076 (CAD $86,742). The net proceeds comprise of the settlement $127,249 (CAD $172,261) of accounts payable and $63,173 (CAD $85,519) of account receivable with the Purchaser resulting in a gain of $50,750 (CAD $68,442).
Net loss for the period:
| Six months ended June 30, | Change | |||||||||||||||
2024 $ | 2023 $ | $ | % | |||||||||||||
| Net loss for the period | (1,277,187 | ) | (1,034,569 | ) | (242,618 | ) | 23 | |||||||||
Our net loss for the six months ended June 30, 2024 was $1,277,187, compared to $1,034,569 for the six months ended June 30, 2023, respectively. Our losses during the six months ended June 30, 2024 and 2023 are primarily due to costs associated with professional fees, compensation due to our CEO, interest expense and loss on settlement of non-redeemable convertible notes.
QUARTERLY RESULTS OF OPERATIONS
The following is a summary of selected quarterly information that has been derived from the financial statements of the Company. This summary should be read in conjunction with the consolidated financial statements of the Company.
| Quarter Ended | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | ||||||||||||||||||||||||
| Sales | $ | 226,289 | $ | 163,477 | $ | 198,266 | $ | 212,453 | $ | 197,324 | $ | 175,446 | $ | 168,790 | $ | 172,782 | ||||||||||||||||
| Gross profit | $ | 45,010 | $ | 14,989 | $ | (20,815 | ) | $ | 55,262 | $ | 12,216 | $ | 15,449 | $ | 21,299 | $ | 13,659 | |||||||||||||||
| Operating expenses | $ | (311,499 | ) | $ | (305,190 | ) | $ | (391,043 | ) | $ | (307,223 | ) | $ | (277,327 | ) | $ | (365,706 | ) | $ | (2,759,699 | ) | $ | (304,452 | ) | ||||||||
| Other income (expense) | $ | (228,552 | ) | $ | (491,945 | ) | $ | (6,151,405 | ) | $ | (313,869 | ) | $ | (263,974 | ) | $ | (155,227 | ) | $ | (194,174 | ) | $ | (768,587 | ) | ||||||||
| Net loss for the period | $ | (495,041 | ) | $ | (782,146 | ) | $ | (6,563,263 | ) | $ | (565,830 | ) | $ | (529,085 | ) | $ | (505,484 | ) | $ | (2,932,573 | ) | $ | (1,059,380 | ) | ||||||||
| Basic net income (loss) per share | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.17 | ) | $ | 1.33 | $ | (0.00 | ) | $ | (0.00 | ) | $ | (20.00 | ) | $ | (10.00 | ) | |||||||||
| Diluted net loss per share | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.17 | ) | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (20.00 | ) | $ | (10.00 | ) | ||||||||
| 24 |
LIQUIDITY AND CAPITAL RESOURCES
For the six months ended June 30, 2024
Cash flows used in operating activities
| Six months ended June 30, | Change | |||||||||||||||
2024 $ | 2023 $ | $ | % | |||||||||||||
| Net cash used in operating activities | (213,429 | ) | (313,061 | ) | 99,632 | (32 | ) | |||||||||
Our net cash used in operating activities for the six months ended June 30, 2024 and 2023 is $213,429 and $313,061, respectively. Our net loss for the six months ended June 30, 2024 of $1,277,187 was the main contributing factor for our negative cash flow. We were able to mostly offset the cash used in operating activities by using our stock to pay for expenses such as, amortization of debt discount of $85,785 and loss on debt settlement of $634,712.
Cash flows used in investing activities
| Six months ended June 30, | Change | |||||||||||||||
2024 $ | 2023 $ |
$ |
% | |||||||||||||
| Net cash used in investing activities | — | — | — | — | ||||||||||||
Cash flows from financing activities
| Six months ended June 30, | Change | |||||||||||||||
2024 $ | 2023 $ | $ | % | |||||||||||||
| Net cash from financing activities | 196,982 | 304,272 | (107,290 | ) | (35 | ) | ||||||||||
Our net cash provided by financing activities for the six months ended June 30, 2024 and 2023 is $196,982 and $304,272, respectively.
During the six months ended June 30, 2024, the Company received $166,952 (CAD $226,837) in cash from its line of credit with The Cellular Connection Ltd. dated April 14, 2022, net cash advances from related party of $30,030. The cash advances are non-interest bearing, unsecured and have no specific terms of repayment.
As of June 30, 2024, we had cash of $7,269, working capital (deficiency) of $(2,232,849) and total liabilities of $3,103,532.
Our working capital as of June 30, 2024 and December 31, 2023 is as follows:
June 30, 2024 | December 31, 2023 | |||||||
| $ | 171,132 | $ | 169,481 | |||||
| Current liabilities | 2,403,981 | 2,158,619 | ||||||
| Working capital (Deficiency) | $ | (2,232,849 | ) | $ | (1,989,138 | ) | ||
| 25 |
The Company is continuing to focus improving cash flows from operations by reducing incentives to customers, by making purchases from different suppliers, accelerating the collection of accounts receivable, reducing expenses, managing accounts payable balances and by paying our officers, directors, consultants and staff with our stock.
The Company’s financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the six months ended June 30, 2024, the Company incurred a net loss of $1,277,187 and used cash in operating activities of $213,429, and on June 30, 2024, had stockholders’ deficit of $2,990,013 and an accumulated deficit of $93,363,365. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. The Company’s independent registered public accounting firm, in their report on the Company’s financial statements for the year ended December 31, 2023, contains an explanatory paragraph regarding the Company’s ability to continue as a going concern. The Company’s financial statements do not include any adjustments that might result from the outcome of this uncertainty should we be unable to continue as a going concern.
Over the next 12 months we expect to spend approximately $368,000 in cash for operations, legal, accounting and related services and to implement our business plan. We hope to be able to compensate our independent contractors with stock-based compensation, which will not require us to use our cash, although there can be no assurances that we will be successful in these efforts.
Cash Required to Implement of Business Plan | ||||
| General and Administration | $ | 268,000 | ||
| Operations | 100,000 | |||
| Total Estimated Cash Expenditures | $ | 368,000 | ||
On April 14, 2022, the Company entered into a binding Line of Credit with The Cellular Connection Ltd. Pursuant to the Line of Credit, the Company can borrow from the Lender up to CAD $0 (CAD $750,000 available on the Line of Credit less CAD $1,007,174 of funds drawn and outstanding on June 30, 2024) in principal. The outstanding principal and all accrued interest became due and payable in full on May 1, 2024, the maturity date of the Line of Credit. The Lender has provided verbal assurances that the Company may continue to borrow additional funds at the same terms as the Line of Credit. From July 1, 2024 to August 14, 2024, the Company received cash advances of $5,907 (CAD$8,088) from the Lender. There is no guarantee that the Lender will continue to advance cash to the Company. If required, we expect to be able to secure additional capital through advances from our Chief Executive Officer, note holders, shareholders and others in order to pay expenses such as organizational costs, filing fees, accounting fees and legal fees, however, we do not have any written or oral agreements with any other third parties which require them to fund our operations. Although there can be no assurances that we will be able to obtain such funds in the future, the Company has been able to secure financing to continue operations since its inception on April 3, 2009. We are currently quoted on OTC Pink.. If we need additional capital in the next twelve months and if we cannot raise such capital on acceptable terms, we may have to curtail our operations or terminate our business entirely.
The inability to obtain financing or generate sufficient cash from operations could require us to reduce or eliminate expenditures for developing products and services, or otherwise curtail or discontinue our operations, which could have a material adverse effect on our business, financial condition and results of operations. Furthermore, to the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities may result in dilution to existing stockholders. If we raise additional funds through the issuance of debt securities, these securities may have rights, preferences and privileges senior to holders of our common stock and the terms of such debt could impose restrictions on our operations. Regardless of whether our cash assets prove to be inadequate to meet our operational needs, we may seek to compensate providers of services by issuing stock in lieu of cash, which may also result in dilution to existing stockholders.
Our common stock started trading over the counter and has been quoted on the Over-The Counter Bulletin Board since February 17, 2011. The stock currently trades under the symbol “TWOH.OB.”
| 26 |
Commitments for future capital expenditures on June 30, 2024 is as follows:
| Payments Due by Period | ||||||||||||||||||||
| Contractual obligations | Total $ | Less than 1 year $ | 1 - 3 years $ | 4 – 5 years $ | After 5 years $ | |||||||||||||||
| Accounts payable and accrued liabilities | 466,380 | 466,380 | — | — | — | |||||||||||||||
| Debt | 2,186,142 | 1,928,947 | 257,195 | — | — | |||||||||||||||
| Non-redeemable convertible notes | 440,139 | — | 440,139 | — | — | |||||||||||||||
| Operating leases(1) | 10,871 | 8,654 | 2,217 | — | — | |||||||||||||||
| Total contractual obligations | 3,103,532 | 2,403,981 | 699,551 | — | — | |||||||||||||||
Notes:
| (1) | Leases for retail space, equipment and warehousing are currently month to month. Deliveries are currently outsourced. |
OPERATING CAPITAL AND CAPITAL EXPENDITURE REQUIREMENTS
We are currently funding our operations by way of cash advances from our Chief Executive Officer, note holders, shareholders and others. We hope to be able to compensate our independent contractors with stock-based compensation, which will not require us to use our cash, although there can be no assurances that we will be successful in these efforts. On April 14, 2022, the Company entered into a binding Line of Credit with The Cellular Connection Ltd. Pursuant to the Line of Credit, the Company can borrow from the Lender up to CAD $0 (CAD $750,000 available on the Line of Credit less CAD $1,007,174 of funds drawn and outstanding on June 30, 2024) in principal. The outstanding principal and all accrued interest became due and payable in full on May 1, 2024, the maturity date of the Line of Credit. The Lender has provided verbal assurances that the Company may continue to borrow additional funds at the same terms as the Line of Credit. From July 1, 2024 to August 14, 2024, the Company received cash advances of $5,907 (CAD$8,088) from the Lender. These is no guarantee that the Lender will continue to advance cash to the Company. If required, we expect to be able to secure additional capital through advances from our Chief Executive Officer, note holders, shareholders and others in order to pay expenses such as organizational costs, filing fees, accounting fees and legal fees, however, we do not have any written or oral agreements with any other third parties which require them to fund our operations. The loans from our Chief Executive Officer, note holders, shareholders and others are unsecured and non-interest bearing and have no set terms of repayment. Our common stock started trading over the counter and has been quoted on the Over-The Counter Bulletin Board since February 17, 2011. The stock currently trades under the symbol “TWOH.OB.”
RELATED PARTY TRANSACTIONS
Due to Related Party
As of June 30, 2024 and December 31, 2023, advances and accrued salary of $1,017,499 and $883,534, respectively, were due to Nadav Elituv, the Company's Chief Executive Officer. The balance is non-interest bearing, unsecured and have no specified terms of repayment.
During the six months ended June 30, 2024, the Company issued advances due to related party for $53,428 for expenses paid on behalf of the Company and advances due to related party were repaid by the Company with $23,398 in cash. In addition, the Company accrued salary of $405,754 due to Nadav Elituv for services provided during the six months ended June 30, 2024. On February 26, 2024, the Company issued common stock to settle due to related party with a carrying value of $296,000 (Note 10).
During the six months ended June 30, 2023, the Company issued advances due to related party for $52,266 of expenses paid on behalf of the Company and advances due to related party were repaid by the Company with $20,749 in cash. In addition, the Company accrued salary of $399,739 due to Nadav Elituv for services provided during the six months ended June 30, 2023. On February 2, 2023, the Company issued common stock to settle due to related party with a carrying value of $188,871.
During the six months ended June 30, 2024 and 2023, the Company paid Linus Creative Services, a business controlled by Bradley Southam, a director of the Company, $0 and $2,720, respectively, for advertising services.
| 27 |
Promissory Notes – Related Party
As of June 30, 2024 and December 31, 2023, promissory note – related party of $0 and $0, respectively, were outstanding. The promissory notes – related party bear interest of 10% per annum, are unsecured, mature on December 31, 2025 and are due to 2130555 Ontario Limited, a Company controlled by Nadav Elituv, the Company's Chief Executive Officer. On February 2, 2023, the Company issued common stock to settle promissory note – related party and interest with a carrying value of $85,922.
Our policy with regard to transactions with related persons or entities is that such transactions must be on terms no less favorable than could be obtained from non-related persons.
The above related party transactions are not necessarily indicative of the amounts that would have been incurred had a comparable transaction been entered into with an independent party. The terms of these transactions were more favorable than would have been attained if the transactions were negotiated at arm's length.
PROPOSED TRANSACTIONS
The Company is not anticipating any transactions.
CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION
Refer to Note 2 in the consolidated financial statements for the six months ended June 30, 2024 for information on accounting policies.
FINANCIAL INSTRUMENTS
The main risks of the Company’s financial instrument are exposed to are credit risk, market risk, foreign exchange risk, and liquidity risk.
Credit risk
The Company’s credit risk is primarily attributable to trade receivables. Trade receivables comprise amounts due from other businesses from the sale of groceries and dry goods. The Company mitigates credit risk through approvals, limits and monitoring. The amounts disclosed in the consolidated balance sheet are net of allowances for expected credit losses, estimated by the Company’s management based on past experience and specific circumstances of the customer. The Company manages credit risk for cash by placing deposits at major Canadian financial institutions.
Market risk
value of financial instruments. These risks are generally outside the control of the Company. The objective of the Company is to mitigate market risk exposures within acceptable limits, while maximizing returns. The Company’s market risk consists of risks from changes in foreign exchange rates, interest rates and market prices that affect its financial liabilities, financial assets and future transactions.
Refer to Note 2 in the consolidated financial statements for the six months ended June 30, 2024 for information on market risk.
Foreign Exchange risk
Our revenue is derived from operations in Canada. Our consolidated financial statements are presented in U.S. dollars and our liabilities other than trade payables are primarily due in U.S. dollars. The revenue we earn in Canadian dollars is adversely impacted by the increase in the value of the U.S. dollar relative to the Canadian dollar.
Liquidity risk
Liquidity risk relates to the risk the Company will encounter difficulty in meeting its obligations associated with financial liabilities. The financial liabilities on our consolidated balance sheets consist of accounts payable and accrued liabilities, due to related party, notes payable, convertible notes, net, derivative liabilities, promissory notes, promissory notes – related party and non-redeemable convertible notes, Management monitors cash flow requirements and future cash flow forecasts to ensure it has access to funds through its existing cash and from operations to meet operational and financial obligations. The Company believes it has sufficient liquidity to meet its cash requirements for the next twelve months.
| 28 |
OUTSTANDING SHARE DATA
As of August 12, 2024, the following securities were outstanding:
Common stock: 1,665,906,829 shares
Series C Convertible Preferred Stock: 80,000
OFF-BALANCE SHEET TRANSACTIONS
We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a Smaller Reporting Company, as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item.
ITEM 4T. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As required by Rule 13a-15 of the Securities Exchange Act of 1934, our principal executive officer and principal financial officer evaluated our company's disclosure controls and procedures (as defined in Rules 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that as of the end of the period covered by this report, these disclosure controls and procedures were not effective to ensure that the information required to be disclosed by our company in reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities Exchange Commission and to ensure that such information is accumulated and communicated to our company's management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. The conclusion that our disclosure controls and procedures were not effective was due to the presence of the following material weaknesses in internal control over financial reporting which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both United States generally accepted accounting principles and Securities and Exchange Commission guidelines. Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated.
We plan to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending December 31, 2024, subject to obtaining additional financing: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out above are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting during the quarter ended June 30, 2024 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 may be involved from time to time in ordinary litigation, negotiation and settlement matters that will not have a material effect on our operations or finances. We are not aware of any pending or threatened litigation against our Company or our officers and directors in their capacity as such that could have a material impact on our operations or finances.
ITEM 1A. RISK FACTORS
A smaller reporting company is not required to provide the information required by this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
During the three months ended June 30, 2024, the Company elected to convert $106,661 of principal and interest of non-redeemable convertible notes into 1,066,605,300 shares of common stock of the Company with a fair value of $291,238 resulting in a loss of extinguishment of debt of $184,577.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
During the quarter ended June 30, 2024, we did not have any defaults upon senior securities.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION.
During the quarter ended June 30, 2024, no director or Section 16 officer
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ITEM 6. EXHIBITS
| Incorporated by reference | ||||||
| Exhibit | Exhibit Description | Filed herewith | Form | Period ending | Exhibit | Filing date |
| 3.1 | Certificate of Incorporation, dated April 3, 2009 | S-1 | 3.1 | 6/22/2010 | ||
| 3.2 | Bylaws, dated April 3, 2009 | S-1 | 3.2 | 6/22/2010 | ||
| 3.3 | Certificate of Amendment to the Certificate of Incorporation, dated August 8, 2013 | 10-Q | 6/30/2013 | 3.3 | 8/14/2013 | |
| 3.4 | Certificate of Amendment to the Certificate of Incorporation, dated July 27, 2016 | 8-K | 9/1/2016 | 3.1 | 9/1/2016 | |
| 3.5 | Certificate of Amendment to the Certificate of Incorporation, dated August 27, 2018 | 8-K | 9/10/2018 | 3.1 | 9/10/2018 | |
| 3.6 | Certificate of Amendment to the Certificate of Incorporation, dated November 18, 2019 | 8-K | 12/12/2019 | 3.1 | 12/12/2019 | |
| 3.7 | Certificate of Amendment to the Certificate of Incorporation, dated July 16, 2021 | 8-K | 7/16/2021 | 3.1 | 7/22/2021 | |
| 3.8 | Certificate of Amendment to the Certificate of Incorporation, dated January 3, 2022 | 8-K | 1/3/2022 | 3.1 | 1/6/2022 | |
| 3.9 | Certificate of Amendment to the Certificate of Incorporation, As Amended, dated March 21, 2022 |
8-K | 4/25/2022 | 3.1 | 4/26/2022 | |
| 3.10 | Certificate of Amendment to the Certificate of Incorporation, As Amended, filed with the Delaware Secretary of State on August 22, 2023. |
8-K | 9/8/2023 | 3.1 | 9/11/2023 | |
| 4.1 | Specimen Stock Certificate | S-1 | 4.1 | 6/22/2010 | ||
| 4.2 | Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock, dated August 6, 2013 | 10-Q | 6/30/2013 | 4.2 | 8/14/2013 | |
| 4.3 | Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock, dated December 12, 2019 | 8-K
|
12/12/2019
|
3.1
|
12/19/2019
| |
| 4.4 | Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock, dated October 7, 2020 | 8-K | 10/07/2020 | 3.1 | 10/08/2020 | |
| 4.5 | Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock, dated June 24, 2021 | 8-K | 6/24/2021 | 3.1 | 7/1/2021 | |
| 4.6 | Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock, dated September 1, 2021 | 8-K | 9/1/2021 | 3.1 | 9/1/2021 | |
| 4.7 | Amended and Restated Designation of Series A Convertible Preferred Stock of Two Hands Corporation, dated April 21, 2022 | 8-K | 4/21/2022 | 3.1 | 4/26/2022 | |
| 4.8 | Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock, dated July 5, 2022 | 10-Q | 6/30/2022 | 4.8 | 8/15/2022 | |
| 4.9 | Certificate of Designation, Preference and Rights of Series E Preferred Stock, dated October 3, 2022 | 8-K | 10/4/2022 | 3.1 | 10/11/2022 | |
| 10.1 | Innovative Product Opportunities Inc. Trust Agreement | S-1 | 10.1 | 6/22/2010 | ||
| 10.2 | Side Letter Agreement, The Cellular Connection Ltd., dated January 8, 2018 | 10-K | 12/31/2017 | 10.2 | 3/29/2018 | |
| 10.3 | Side Letter Agreement, Stuart Turk, dated January 8, 2018 | 10-K | 12/31/2017 | 10.3 | 3/29/2018 | |
| 10.4 | Side Letter Agreement, Jordan Turk, dated April 12, 2018 | 10-Q | 3/31/2018 | 10.4 | 5/21/2018 | |
| 10.5 | Side Letter Agreement, Jordan Turk, dated May 10, 2018 | 10-Q | 3/31/2018 | 10.5 | 5/21/2018 | |
| 10.6 | Side Letter Agreement, Jordan Turk, dated September 13, 2018 | 10-K | 12/31/2018
|
10.6 | 4/1/2019 | |
| 10.7 | Side Letter Agreement, The Cellular Connection Ltd., dated January 31, 2019 | 10-K | 12/31/2018 | 10.7 | 4/1/2019 | |
| 10.8 | Side Letter Agreement, Stuart Turk, dated January 31, 2019 | 10-K | 12/31/2018 | 10.8 | 4/1/2019 | |
| 31.1 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||
| 32.1* | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||
| 101.INS | XBRL Instance Document – the instance document does not appear in the Interactive Data Files as its XBRL tags are embedded within the Inline XBRL document | X | ||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | X | ||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | X | ||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Definition | X | ||||
| 104 | Cover page formatted as Inline XBRL and contained in Exhibit 101 | X | ||||
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under those sections.
| 31 |
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
TWO HANDS CORPORATION
| |
| August 12, 2024 |
By: /s/ Nadav Elituv Nadav Elituv, President, Chief Executive Officer and Director (Principal Executive Officer) |
| August 12, 2024 |
By: /s/ Steven Gryfe Steven Gryfe, Chief Financial Officer (Principal Financial and Accounting Officer) |
| 32 |
EXHIBIT 31.1
TWO HANDS CORPORATION
OFFICER'S CERTIFICATE PURSUANT TO SECTION 302
I, Nadav Elituv, certify that:
1. I have reviewed this Form 10-Q of TWO HANDS CORPORATION;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Dated: August 12, 2024
By: /s/ Nadav Elituv
Name: Nadav Elituv
Title: President, Chief Executive Officer and Director
(Principal Executive Officer)
| 1 |
EXHIBIT 31.2
TWO HANDS CORPORATION
OFFICER'S CERTIFICATE PURSUANT TO SECTION 302
I, Steven Gryfe, certify that:
1. I have reviewed this Form 10-Q of TWO HANDS CORPORATION;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Dated: August 12, 2024
By: /s/ Steven Gryfe
Name: Steven Gryfe
Title: Chief Financial Officer
(Principal Financial and Accounting Officer)
| 2 |
EXHIBIT 32.1
TWO HANDS CORPORATION
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of TWO HANDS CORPORATION (the Registrant) on Form 10-Q for the period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Nadav Elituv, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to Nadav Elituv and will be retained by TWO HANDS CORPORATION and furnished to the Securities and Exchange Commission or its staff upon request.
Dated: August 12, 2024
By: /s/ Nadav Elituv
Name: Nadav Elituv
Title: President, Chief Executive Officer and Director
(Principal Executive Officer)
| 1 |
EXHIBIT 32.2
TWO HANDS CORPORATION
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of TWO HANDS CORPORATION (the Registrant) on Form 10-Q for the period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Steven Gryfe, Principal Financial and Accounting Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to Steven Gryfe and will be retained by TWO HANDS CORPORATION and furnished to the Securities and Exchange Commission or its staff upon request.
Dated: August 12, 2024
By: /s/ Steven Gryfe
Name: Steven Gryfe
Title: Chief Financial Officer
(Principal Financial and Accounting Officer)
| 2 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Income Statement [Abstract] | ||||
| Sales | $ 226,289 | $ 197,324 | $ 389,766 | $ 372,769 |
| Cost of goods sold | 181,279 | 185,108 | 329,767 | 345,104 |
| Gross profit | 45,010 | 12,216 | 59,999 | 27,665 |
| Operating expenses | ||||
| General and administrative | 311,499 | 277,327 | 616,689 | 643,033 |
| Total operating expenses | 311,499 | 277,327 | 616,689 | 643,033 |
| Loss from operations | (266,489) | (265,111) | (556,690) | (615,368) |
| Other income (expense) | ||||
| Amortization of debt discount and interest expense | (43,975) | (38,774) | (85,785) | (76,451) |
| Gain on disposition | 0 | 50,750 | 0 | 50,750 |
| Loss on settlement of non-redeemable convertible notes | (184,577) | (275,950) | (634,712) | (393,500) |
| Total other income (expense) | (228,552) | (263,974) | (720,497) | (419,201) |
| Net loss | (495,041) | (529,085) | (1,277,187) | (1,034,569) |
| Other comprehensive (loss) income | ||||
| Foreign currency translation adjustment | 13,446 | (20,448) | 41,280 | (27,536) |
| Total other comprehensive (loss) income | 13,446 | (20,448) | 41,280 | (27,536) |
| Comprehensive loss | $ (481,595) | $ (549,533) | $ (1,235,907) | $ (1,062,105) |
| Net loss per common share - basic | $ (0.00) | $ (1.68) | $ (0.00) | $ (4.33) |
| Net loss per common share - diluted | $ (0.00) | $ (1.68) | $ (0.00) | $ (4.33) |
| Weighted average number of common shares outstanding - basic | 489,306,245 | 315,394 | 274,782,357 | 238,788 |
Pay vs Performance Disclosure - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Pay vs Performance Disclosure [Table] | ||||
| Net Income (Loss) | $ (495,041) | $ (529,085) | $ (1,277,187) | $ (1,034,569) |
Insider Trading Arrangements |
3 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Insider Trading Arrangements [Line Items] | |
| Rule 10b5-1 Arrangement Adopted [Flag] | false |
| Non-Rule 10b5-1 Arrangement Adopted [Flag] | false |
| Rule 10b5-1 Arrangement Terminated [Flag] | false |
| Non-Rule 10b5-1 Arrangement Terminated [Flag] | false |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION |
6 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | ||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||
| NATURE OF OPERATIONS AND BASIS OF PRESENTATION | NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Two Hands Corporation (the "Company") was incorporated in the state of Delaware on April 3, 2009 and on July 26, 2016, changed its name from Innovative Product Opportunities Inc. to Two Hands Corporation.
The Two Hands co-parenting application launched on July 2018 and the Two Hands Gone application launched In February 2019. The Company ceased work on these applications in 2021.
The gocart.city online consumer grocery delivery application was released in early June 2020 and Cuore Food Services commenced sale of dry goods and produce to other businesses in July 2020.
In July 2021, the Company made the strategic decision to focus exclusively on the grocery market through three on-demand branches of its grocery businesses: gocart.city, Grocery Originals, and Cuore Food Services.
On May 1, 2023, the Company entered into an asset sale agreement with a non-related private corporation (“Purchaser”) whereby the Company sold the assets of gocart.city. The sale included the e-commerce site, branding, supporting components of the Grocery Originals store and inventory. The ongoing sales and client base gocart.city and Grocery Originals was transferred as part of the asset sale. After May 1, 2023, the Company continued the business of Cuore Food Services. The operations of the business are carried on by Two Hands Canada Corporation, a wholly-owned subsidiary of the Company, incorporated under the laws of Canada on February 7, 2014.
The Company received approval from the Canadian Securities Exchange (the "CSE") to list its common shares (the "Common Shares") on the CSE. Trading of the Common Shares in the capital of the Company commenced on August 5, 2022, under the symbol "TWOH".
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements of Two Hands Corporation have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission requirements for interim financial statements. Therefore, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The financial statements should be read in conjunction with the annual financial statements for the year ended December 31, 2023 of Two Hands Corporation in our Form 10-K filed on April 1, 2024.
The interim financial statements present the balance sheets, statements of operations, stockholders’ deficit and cash flows of Two Hands Corporation. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States.
The interim financial information is unaudited. In the opinion of management, all adjustments necessary to present fairly the financial position as of June 30, 2024 and the results of operations and cash flows presented herein have been included in the financial statements. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results of operations for the full year.
GOING CONCERN
The Company's financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. During the six months ended June 30, 2024, the Company incurred a net loss of $1,277,187 and used cash in operating activities of $213,429, and on June 30, 2024, had stockholders’ deficit of $2,990,013 and an accumulated deficit of $93,363,365. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date that the financial statements are issued. The Company will be dependent upon the raising of additional capital through placement of its common stock in order to implement its business plan. There can be no assurance that the Company will be successful in this situation. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might result from this uncertainty. We are currently funding our operations by way of cash advances from our Chief Executive Officer, note holders, shareholders and others; however, we do not have any oral or written agreements with them or others to loan or advance funds to us. There can be no assurances that we will be able to receive loans or advances from them or other persons in the future.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Two Hands Canada Corporation. All intercompany transactions and balances have been eliminated in consolidation.
USE OF ESTIMATES AND ASSUMPTIONS
Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
CONCENTRATIONS
The following table summarizes accounts receivable and revenue concentrations:
The following table summarizes accounts payable and purchases concentrations:
CASH AND CASH EQUIVALENTS
For the purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.
ACCOUNTS RECEIVABLE
Trade accounts receivable is recorded at the invoiced amount and do not bear interest. The Company grants credit to its customers with defined payment terms, performs ongoing evaluations of the credit worthiness of its customers and generally does not require collateral. Accounts receivables are carried at their outstanding principal amounts, less an anticipated amount for discounts and an allowance for expected credit losses, which management believes is sufficient to cover potential credit losses based on historical experience and periodic evaluation of the financial condition of the Company's customers. Estimated credit losses consider relevant information about past events, current conditions and reasonable and supporting forecasts that affect the collectability of financial assets.
The allowance for doubtful accounts on June 30, 2024 and December 31, 2023 is $102,306 and $105,072, respectively.
INVENTORY
Inventory consisting of groceries and dry goods are measured at the lower of cost and net realizable value. Cost is determined pursuant to the first-in first out (“FIFO”) method. The cost of inventory includes the purchase price, shipping and handling costs incurred to bring the inventories to their present location and condition. Inventory with a short shelf life that is not utilized within the planned period are immediately expensed in the statement of operations. Estimated gross profit rates are used to determine the cost of goods sold in the interim periods, unless physical inventory counts are performed. Any significant adjustment that results from the reconciliation with physical inventory counts is disclosed. On June 30, 2024 and December 31, 2023, the inventory valuation allowance was $0.
PROPERTY AND EQUIPMENT Property and equipment is stated at cost, less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to expense when incurred, while renewals and betterments that materially extend the life of an asset are capitalized.
The costs of assets sold, retired, or otherwise disposed of, and the related allowance for depreciation, are eliminated from the accounts, and any resulting gain or loss is recognized in the results from operations. Depreciation is provided over the estimated useful lives of the assets, which are as follows:
Computer equipment 50% declining balance over a three year useful life
In the year of acquisition, one half the normal rate of depreciation is provided.
REVENUE RECOGNITION
In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. The provisions of ASC 606 include a five-step process by which we determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which we expect to be entitled in exchange for those goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation. We recognize revenue for the sale of our products upon delivery to a customer.
During the six months ended June 30, 2024 and 2023, the Company had revenue of $389,766 and $372,769, respectively. In 2024, the Company recognized revenue of $0 from the sale of groceries to consumers via the gocart.city online grocery delivery application and $389,766 from the sale of dry goods and produce to other customers. In 2023 the Company recognized revenue of $13,167 from the sale of groceries to consumers via the gocart.city online grocery delivery application and $359,602 from the sale of dry goods and produce to other customers.
LEASES
Under ASC 842, a right-of-use asset and lease liability is recorded for all leases and the statement of operations reflects the lease expense for operating leases and amortization/interest expense for financing leases.
The Company does not apply the recognition requirements in the standard to a lease that at commencement date has a lease term of twelve months or less and does not contain a purchase option that it is reasonably certain to exercise and to not separate lease and related non-lease components. Options to extend the leases are not included in the minimum lease terms unless they are reasonably certain to be exercised.
The Company leases an automobile under a non-cancelable operating lease. Right-of-use assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
DEBT DISCOUNT AND DEBT ISSUANCE COSTS
Debt discounts and debt issuance costs incurred in connection with the issuance of convertible notes are capitalized and amortized to interest expense based on the related debt agreements using the effective interest rate method. Unamortized discounts are netted against convertible notes.
INCOME TAXES
The Company accounts for income taxes in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("FASB ASC") 740, Income Taxes. Under the assets and liability method of FASB ASC 740, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value.
Basic net income (loss) per share includes no dilution and is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing earnings available to common shareholders by the weighted average number of common shares outstanding for the period increased to include the number of additional common shares that would have been outstanding if potentially dilutive securities had been issued Dilutive net loss per share for common stock is calculated utilizing the if-converted method which assumes the conversion of all Series C Stock to common stock. On June 30, 2024 and June 30, 2023, we excluded the common stock issuable upon conversion of non-redeemable convertible notes, and Series C Stock of shares and shares, respectively, as their effect would have been anti-dilutive.
FOREIGN CURRENCY TRANSLATION
The consolidated financial statements are presented in United States dollars. The functional currency of the consolidated entities are determined by evaluating the economic environment of each entity. The functional currency of Two Hands Corporation is the United States dollar. Foreign exchange translation adjustments are reported as gains or losses resulting from foreign currency transactions and are included in the results of operations.
Two Hands Canada Corporation maintains its accounts in the Canadian dollar. Assets and liabilities are translated to United States dollars at year-end exchange rates. Income and expenses are transaction at averages exchange rate during the year. Foreign currency transaction adjustments are reported as other comprehensive income, a component of equity in the consolidated balance sheet.
The Company accounts for stock incentive awards issued to employees and non-employees in accordance with FASB ASC 718, Stock Compensation. Accordingly, stock-based compensation is measured at the grant date, based on the fair value of the award. Stock-based awards to employees are recognized as an expense over the requisite service period, or upon the occurrence of certain vesting events. Additionally, stock-based awards to non-employees are expensed over the period in which the related services are rendered.
FAIR VALUE OF FINANCIAL INSTRUMENTS
ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.
Included in the ASC Topic 820 framework is a three level valuation inputs hierarchy with Level 1 being inputs and transactions that can be effectively fully observed by market participants spanning to Level 3 where estimates are unobservable by market participants outside of the Company and must be estimated using assumptions developed by the Company. The Company discloses the lowest level input significant to each category of asset or liability valued within the scope of ASC Topic 820 and the valuation method as exchange, income or use. The Company uses inputs which are as observable as possible and the methods most applicable to the specific situation of each company or valued item.
The Company’s financial instruments such as cash, accounts payable and accrued liabilities, non-redeemable convertible notes, notes payable and due to related parties are reported at cost, which approximates fair value due to the short-term nature of these financial instruments.
RECENT ACCOUNTING PRONOUNCEMENTS
In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. The Company is currently evaluating the provisions of the amendments and the impact on its financial statements.
In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the provisions of the amendments and the impact on its financial statements.
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.
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NON-REDEEMABLE CONVERTIBLE NOTES |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Debt Disclosure [Abstract] | |
| NON-REDEEMABLE CONVERTIBLE NOTES | NOTE 3 – NON-REDEEMABLE CONVERTIBLE NOTES
On January 8, 2018, the Company entered into a Side Letter Agreement (“Note”) with a non-related investor, Stuart Turk, to amend and add certain terms to unsecured, non-interest bearing, due on demand notes payable totaling $244,065 issued by the Company during the period of July 2014 and December 2017. The issue price of the Note is $244,065 with a face value of $292,878 and the Note has an original maturity date of December 31, 2018 which is subject to automatic annual renewal. On June 29, 2021, the Company and Stuart Turk entered into an Agreement to change the original maturity date of the Note to December 31, 2025. At the option of the Company, the Company may convert principal and interest at a fixed conversion price of $0.0001 per share of the Company’s common stock. The Note allows the lender to secure a portion of the Company assets up to 200% of the face value of the Note. If the Note is not paid on December 31 each year, the outstanding face amount of the Note increases by 20% on January 1 the following year. During the six months ended June 30, 2024, the Company elected to convert $110,263 of principal and interest into shares of common stock of the Company at a conversion price of $0.0001 per share. These conversions resulted in a loss on debt settlement of $597,965 due to the requirement to record the share issuance at fair value on the date the shares were issued. The consolidated statement of operations includes interest expense of $11,438 and $18,626 for the six months ended June 30, 2024 and 2023, respectively, and $5,719 and $9,365 for the three months ended June 30, 2024 and 2023, respectively. On June 30, 2024 and December 31, 2023, the carrying amount of the Note is $16,179 (face value of $27,742 less $11,563 unamortized discount) and $115,004 (face value of $115,004 less $0 unamortized discount), respectively.
On May 10, 2018, the Company entered into a Side Letter Agreement (“Note”) with a non-related investor, Jordan Turk, to amend and add certain terms to unsecured, non-interest bearing, due on demand notes payable totaling $35,000 issued by the Company on May 9, 2018. The issue price of the Note is $35,000 with a face value of $42,000 and the Note has an original maturity date of December 31, 2018 which is subject to automatic annual renewal. On June 29, 2021, the Company and Jordan Turk entered into an Agreement to change the original maturity date of the Note to December 31, 2025. At the option of the Company, the Company may convert principal and interest at a fixed conversion price of $0.0001 per share of the Company’s common stock. The Note allows the lender to secure a portion of the Company assets up to 200% of the face value of the Note. If the Note is not paid on December 31 each year, the outstanding face amount of the Note increases by 20% on January 1 the following year. During the six months ended June 30, 2024, the Company elected to convert $2,263 of principal and interest into shares of common stock of the Company at a conversion price of $0.0001 per share. These conversions resulted in a loss on debt settlement of $36,747 due to the requirement to record the share issuance at fair value on the date the shares were issued. The consolidated statement of operations includes interest expense of $377 and $840 for the six months ended June 30, 2024 and 2023, respectively, and $283 and $422 for the three months ended June 30, 2024 and 2023, respectively. On June 30, 2024 and December 31, 2023, the carrying amount of the Note is $0 and $1,885 (face value of $1,885 less $0 unamortized discount), respectively. This Note was paid in full on April 29, 2024.
On September 13, 2018, the Company entered into a Side Letter Agreement (“Note”) with a non-related investor, Jordan Turk, to amend and add certain terms to unsecured, non-interest bearing, due on demand notes payable totaling $40,000 issued by the Company during the period of July 10, 2018 to September 13, 2018. The issue price of the Note is $40,000 with a face value of $48,000 and the Note has an original maturity date of December 31, 2018 which is subject to automatic annual renewal. On June 29, 2021, the Company and Jordan Turk entered into an Agreement to change the original maturity date of the Note to December 31, 2025. At the option of the Company, the Company may convert principal and interest at a fixed conversion price of $0.0001 per share of the Company’s common stock. The Note allows the lender to secure a portion of the Company assets up to 200% of the face value of the Note. If the Note is not paid on December 31 each year, the outstanding face amount of the Note increases by 20% on January 1 the following year. The consolidated statement of operations includes interest expense of $11,878 and $9,872 for the six months ended June 30, 2024 and 2023, respectively, and $5,939 and $4,963 for the three months ended June 30, 2024 and 2023, respectively. On June 30, 2024 and December 31, 2023, the carrying amount of the Note is $131,318 (face value of $143,327 less $12,009 unamortized discount) and $119,440 (face value of $119,440 less $0 unamortized discount), respectively.
On January 31, 2019, the Company entered into a Side Letter Agreement (“Note”) with Stuart Turk to amend and add certain terms to unsecured, non-interest bearing, due on demand notes payable totaling $106,968 issued by the Company during the period of January 3, 2018 to December 28, 2018. The issue price of the Note is $106,968 with a face value of $128,362 and the Note has an original maturity date of December 31, 2019 which is subject to automatic annual renewal. On June 29, 2021, the Company and Stuart Turk entered into an Agreement to change the original maturity date of the Note to December 31, 2025. At the option of the Company, the Company may convert principal and interest at a fixed conversion price of $0.0001 per share of the Company’s common stock. The Note allows the lender to secure a portion of the Company assets up to 200% of the face value of the Note. If the Note is not paid on December 31 each year, the outstanding face amount of the Note increases by 20% on January 1 the following year. The consolidated statement of operations includes interest expense of $26,472 and $21,999 for the six months ended June 30, 2024 and 2023, respectively, and $13,236 and $11,060 for the three months ended June 30, 2024 and 2023, respectively. On June 30, 2024 and December 31, 2023, the carrying amount of the Note is $292,642 (face value of $319,405 less $26,763 unamortized discount) and $266,171 (face value of $266,171 less $0 unamortized discount), respectively.
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LEASES |
6 Months Ended | |||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||
| Leases | ||||||||||||||||||||||||||||||||||||
| LEASES | NOTE 4 – LEASES
The Company entered into an operating lease agreement on October 14, 2021 for an automobile, resulting in the recording of an initial liability and corresponding right-of-use asset of $35,906. The weighted-average remaining non-cancelable lease term for the Company’s operating lease was 1.50 years at June 30, 2024. The weighted-average discount rate was 3.96% at June 30, 2024. The Company’s operating lease expires in 2025. The following shows future lease payments for the remaining periods under operating lease at June 30, 2024:
The Company’s discounted current right-of-use lease liability and discounted non-current right-of-use lease liability on June 30, 2024 is $8,654 and $2,217, respectively.
Operating leases expense for the six months ended June 30, 2024 is $5,100.
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LINE OF CREDIT |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Line Of Credit | |
| LINE OF CREDIT | NOTE 5 – LINE OF CREDIT
On April 14, 2022, the Company entered into a binding Grid Promissory Note and Credit Facility Agreement (the “Line of Credit”) with The Cellular Connection Ltd. (the “Lender”). Pursuant to the Line of Credit, the Company can borrow from the Lender up to CAD $750,000 in principal in increments of at least CAD $50,000 upon five business days’ notice and the outstanding principal bears interest at 8% per annum, payable monthly. The outstanding principal and all accrued interest became due and payable in full on May 1, 2024, the maturity date of the Line of Credit. Any indebtedness under the Line of Credit are secured against accounts receivable and inventory of the Company, and is convertible into shares of common stock of the Company at the Company’s option any time after twelve months from the first advance at a conversion price of $0.10 per share, subject to a restriction on the Lender holding more than 4.99% of the Company’s Common Shares. As of June 30, 2024 and December 31, 2023, the Line of Credit of $801,485 (principal $735,539 (CAD $1,007,174) and interest of $65,946) and $629,507 (principal $588,295 (CAD $780,336) and interest of $41,212), respectively, was outstanding. The consolidated statement of operations includes interest expense of $14,218 and $8,987 for the three months ended June 30, 2024 and 2023, respectively, and $26,229 and $15,780 for the six months ended June 30, 2024 and 2023, respectively.
|
NOTES PAYABLE |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Debt Disclosure [Abstract] | |
| NOTES PAYABLE | NOTE 6 – NOTES PAYABLE
As of June 30, 2024 and December 31, 2023, notes payable due to Piero Manzini, and The Cellular Connection Limited, a corporation controlled by Stuart Turk, totaling $109,963 and $113,333, respectively, were outstanding. The balances are non-interest bearing, unsecured and have no specified terms of repayment.
|
PROMISSORY NOTES |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Promissory Notes | |
| PROMISSORY NOTES | NOTE 7 – PROMISSORY NOTES
Promissory Notes
As of June 30, 2024 and December 31, 2023, promissory notes of $257,195 (principal $186,672 and interest of $70,523) and of $247,862 (principal $186,672 and interest of $61,190), respectively, were outstanding. The promissory notes bears interest of 10% per annum, are unsecured and mature on December 31, 2025.
Promissory Notes – Related Party
As of June 30, 2024 and December 31, 2023, promissory note – related party of $0 and $0, respectively, were outstanding. The promissory notes – related party bear interest of 10% per annum, are unsecured, mature on December 31, 2025 and are due to 2130555 Ontario Limited, a Company controlled by Nadav Elituv, the Company's Chief Executive Officer. On February 2, 2023, the Company issued common stock to settle promissory note – related party and interest with a carrying value of $85,922.
|
RELATED PARTY TRANSACTIONS |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Related Party Transactions [Abstract] | |
| RELATED PARTY TRANSACTIONS | NOTE 8 – RELATED PARTY TRANSACTIONS
As of June 30, 2024 and December 31, 2023, advances and accrued salary of $1,017,499 and $883,534, respectively, were due to Nadav Elituv, the Company's Chief Executive Officer. The balance is non-interest bearing, unsecured and have no specified terms of repayment.
During the six months ended June 30, 2024, the Company issued advances due to related party for $53,428 for expenses paid on behalf of the Company and advances due to related party were repaid by the Company with $23,398 in cash. In addition, the Company accrued salary of $405,754 due to Nadav Elituv for services provided during the six months ended June 30, 2024. On February 26, 2024, the Company issued common stock to settle due to related party with a carrying value of $296,000 (Note 10).
During the six months ended June 30, 2023, the Company issued advances due to related party for $52,266 of expenses paid on behalf of the Company and advances due to related party were repaid by the Company with $20,749 in cash. In addition, the Company accrued salary of $399,739 due to Nadav Elituv for services provided during the six months ended June 30, 2023. On February 2, 2023, the Company issued common stock to settle due to related party with a carrying value of $188,871.
During the six months ended June 30, 2024 and 2023, the Company paid Linus Creative Services, a business controlled by Bradley Southam, a director of the Company, $0 and $2,720, respectively, for advertising services.
Employment Agreements
On January 15, 2023, the Company executed an employment agreement for the period from January 1, 2023 to December 31, 2023 with Nadav Elituv, the Chief Executive Officer of the Company whereby the Company shall pay an annual salary of $600,000 from available funds.
On March 17, 2024, the Company executed an employment agreement for the period from January 1, 2024 to December 31, 2024 with Nadav Elituv, the Chief Executive Officer of the Company whereby the Company shall pay an annual salary of $600,000 from available funds.
On July 1, 2023, entered into a consulting agreement to pay 2130555 Ontario Limited, a Company controlled by Nadav Elituv, a monthly consulting fee of $18,000 (CAD $24,000 per month) for services for the period from July 1, 2023 to December 31, 2023.
On January 1, 2024, entered into a consulting agreement to pay 2130555 Ontario Limited, a Company controlled by Nadav Elituv, a monthly consulting fee of CAD $24,000 per month for services for the period from January 1, 2024 to December 31, 2024.
Stock-based compensation – salaries expense related to these employment agreements for the six months ended June 30, 2024 and 2023 is $ and $, respectively. Stock-based compensation – salaries expense was recognized ratably over the requisite service period.
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PREFERRED STOCK |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Equity [Abstract] | |
| PREFERRED STOCK | NOTE 9 – PREFERRED STOCK
On August 6, 2013, the Company filed a Certificate of Designation with the Delaware Secretary of State thereby designating two hundred thousand () shares as Series A Convertible Preferred Stock (“Series A Stock”). Each share of Series A Stock is convertible into one thousand (1,000) shares of common stock of the Company. On April 21, 2022, the Company amended its articles to amend the terms of its Series A Convertible Preferred Stock to become non-voting shares. Previously Series A Stock were entitled to the number of votes equal to the aggregate number of shares of common stock into which the Holder’s share of Series A Stock is convertible, multiplied by one hundred (100).
On December 12, 2019, the Company filed a Certificate of Designation with the Delaware Secretary of State thereby designating one hundred thousand () shares as Series B Convertible Preferred Stock (“Series B Stock”). After a one year holding period, each share of Series B Stock is convertible into one thousand (1,000) shares of common stock of the Company. Series B Stock is non-voting.
On October 7, 2020, the Company filed a Certificate of Designation with the Delaware Secretary of State thereby designating five thousand () shares as Series C Convertible Preferred Stock, par value $ per share (“Series C Stock”). Each share of Series C Stock (i) has a liquidation value of $100, subject to various anti-dilution protections (ii) is convertible into shares of common stock of the Company six months after the date of issuance at a price of $ per share effective June 30, 2022, subject to various anti-dilution protections (iii) on conversion will receive an aggregate number of shares of common stock as is determined by dividing the liquidation value by the conversion price. Series C Stock are non-voting. On June 24, 2021, the board of directors approved the increase in the number of designated shares of Series C Convertible Preferred Stock from to and reduction of the conversion price from $0.0035 per share to $0.002 per share. On April 27, 2022, a 1 for 1,000 reverse stock split of the Company’s common stock took effect which increased the conversion rate from $0.002 per share to $2.00 per share. On June 30, 2022, the Company made an amendment to the Certificate of Designation of its Series C Stock which lowered the fixed conversion price from $2.00 per share to $0.25 per share.
On September 1, 2021, the Company filed a Certificate of Designation with the Delaware Secretary of State thereby designating two hundred thousand () shares as Series D Convertible Preferred Stock, par value $ per share (“Series D Stock”). Each share of Series D Stock is convertible into one hundred (100) shares of common stock of the Company six months after the date of issuance. Series D Stock are non-voting.
On June 30, 2022, the Company made an amendment to the Certificate of Designation of its Series C Stock which lowered the fixed conversion price from $2.00 per share to $0.25 per share. Per separate agreement, the fixed conversion price was adjusted to $400 per share. The Company accounted for the amendment as an extinguishment and recorded a deemed dividend in accordance with ASC 260-10-599-2. As such, on June 30, 2022, the shares of Series C Stock recorded at fair value of resulting in a deemed contribution of $834,001.
On October 4, 2022, the Company filed a Certificate of Designation with the Delaware Secretary of State that had the effect of designating shares of preferred stock as Series E Convertible Preferred Stock (“Series E Stock”). Series E Stock are non-voting, have a par value of $0.0001 per share and have a stated value of $ per share. Each share of Series E Stock carries an annual cumulative dividend of 10% of the stated value. The Company may redeem Series E Stock in cash, if redeemed within 60 days of issuance date, at 110% of the stated value plus accrued unpaid dividends and between 61 days and 180 days at 115% of the stated value plus unpaid accrued dividends. After 180 days of the issuance date, the Company does not have the right to redeem Series E Stock. After 180 days after the issue date, Series E Stock at the stated value together with any unpaid accrued dividends are convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 75% of the market price defined as the lowest three average trading price during the ten trading day period ending on the latest trading day prior to the conversion date. After 18 months following the issuance date, the Company must redeem for cash Series E Stock at its stated value plus any accrued unpaid dividends and the default adjustment, if any.
On September 29, 2023, a 1 for 1,000 reverse stock split of the Company’s common stock took effect.
Series A Stock, Series B Stock, Series C Stock, Series D Stock and Series E Stock has been classified as temporary equity (outside of permanent equity) on the consolidated balance sheet on June 30, 2024 and December 31, 2023, since share settlement is not within the control of the Company.
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STOCKHOLDERS' EQUITY |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Equity [Abstract] | |
| STOCKHOLDERS' EQUITY | NOTE 10 - STOCKHOLDERS' EQUITY
The Company is authorized to issue an aggregate of common shares with a par value of $ per share and shares of preferred stock with a par value of $ per share.
On August 22, 2023, pursuant to stockholder consent, our Board of Directors authorized an amendment (the "Amendment") to our Certificate of Incorporation, as amended, to effect a reverse stock split of the issued and outstanding shares of our common stock, par value $, on a 1 for 1,000 bases. We filed the Amendment with the Delaware Secretary of State on August 22, 2023. On September 21, 2023 the Financial Industry Regulatory Authority, Inc. notified us that the reverse stock split would take effect on September 29, 2023. All common stock share and per-share amounts for all periods presented in these consolidated financial statements have been adjusted retroactively to reflect the reverse stock split.
During the six months ended June 30, 2024, the Company elected to convert $112,526 of principal and interest of non-redeemable convertible notes into shares of common stock of the Company with a fair value of $747,238 resulting in a loss of extinguishment of debt of $634,712.
On February 26, 2024, the Company agreed to issue shares of common stock with a fair value of $109,600 to settle accrued salary and expenses of $296,000 (CAD $400,000) due to Nadav Elituv, the Chief Executive Officer of the Company resulting an increase in additional paid-in capital of $186,400.
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SUBSEQUENT EVENTS |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS | NOTE 11 - SUBSEQUENT EVENTS
From July 1, 2024 to August 14, 2024, the Company elected to convert $of principal and interest of non-redeemable convertible notes into shares of common stock of the Company with a fair value of $55,906 resulting in a loss of extinguishment of debt of $6,850.
On August 5, 2024, the Side Letter Agreement dated January 8, 2018, with a non-related investor, Stuart Turk, was fully converted.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BASIS OF PRESENTATION | BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements of Two Hands Corporation have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission requirements for interim financial statements. Therefore, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The financial statements should be read in conjunction with the annual financial statements for the year ended December 31, 2023 of Two Hands Corporation in our Form 10-K filed on April 1, 2024.
The interim financial statements present the balance sheets, statements of operations, stockholders’ deficit and cash flows of Two Hands Corporation. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States.
The interim financial information is unaudited. In the opinion of management, all adjustments necessary to present fairly the financial position as of June 30, 2024 and the results of operations and cash flows presented herein have been included in the financial statements. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results of operations for the full year.
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| GOING CONCERN | GOING CONCERN
The Company's financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. During the six months ended June 30, 2024, the Company incurred a net loss of $1,277,187 and used cash in operating activities of $213,429, and on June 30, 2024, had stockholders’ deficit of $2,990,013 and an accumulated deficit of $93,363,365. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date that the financial statements are issued. The Company will be dependent upon the raising of additional capital through placement of its common stock in order to implement its business plan. There can be no assurance that the Company will be successful in this situation. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might result from this uncertainty. We are currently funding our operations by way of cash advances from our Chief Executive Officer, note holders, shareholders and others; however, we do not have any oral or written agreements with them or others to loan or advance funds to us. There can be no assurances that we will be able to receive loans or advances from them or other persons in the future.
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| PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Two Hands Canada Corporation. All intercompany transactions and balances have been eliminated in consolidation.
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| USE OF ESTIMATES AND ASSUMPTIONS | USE OF ESTIMATES AND ASSUMPTIONS
Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
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| CONCENTRATIONS | CONCENTRATIONS
The following table summarizes accounts receivable and revenue concentrations:
The following table summarizes accounts payable and purchases concentrations:
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| CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS
For the purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.
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| ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE
Trade accounts receivable is recorded at the invoiced amount and do not bear interest. The Company grants credit to its customers with defined payment terms, performs ongoing evaluations of the credit worthiness of its customers and generally does not require collateral. Accounts receivables are carried at their outstanding principal amounts, less an anticipated amount for discounts and an allowance for expected credit losses, which management believes is sufficient to cover potential credit losses based on historical experience and periodic evaluation of the financial condition of the Company's customers. Estimated credit losses consider relevant information about past events, current conditions and reasonable and supporting forecasts that affect the collectability of financial assets.
The allowance for doubtful accounts on June 30, 2024 and December 31, 2023 is $102,306 and $105,072, respectively.
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| INVENTORY | INVENTORY
Inventory consisting of groceries and dry goods are measured at the lower of cost and net realizable value. Cost is determined pursuant to the first-in first out (“FIFO”) method. The cost of inventory includes the purchase price, shipping and handling costs incurred to bring the inventories to their present location and condition. Inventory with a short shelf life that is not utilized within the planned period are immediately expensed in the statement of operations. Estimated gross profit rates are used to determine the cost of goods sold in the interim periods, unless physical inventory counts are performed. Any significant adjustment that results from the reconciliation with physical inventory counts is disclosed. On June 30, 2024 and December 31, 2023, the inventory valuation allowance was $0.
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| PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment is stated at cost, less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to expense when incurred, while renewals and betterments that materially extend the life of an asset are capitalized.
The costs of assets sold, retired, or otherwise disposed of, and the related allowance for depreciation, are eliminated from the accounts, and any resulting gain or loss is recognized in the results from operations. Depreciation is provided over the estimated useful lives of the assets, which are as follows:
Computer equipment 50% declining balance over a three year useful life
In the year of acquisition, one half the normal rate of depreciation is provided.
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| REVENUE RECOGNITION | REVENUE RECOGNITION
In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. The provisions of ASC 606 include a five-step process by which we determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which we expect to be entitled in exchange for those goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation. We recognize revenue for the sale of our products upon delivery to a customer.
During the six months ended June 30, 2024 and 2023, the Company had revenue of $389,766 and $372,769, respectively. In 2024, the Company recognized revenue of $0 from the sale of groceries to consumers via the gocart.city online grocery delivery application and $389,766 from the sale of dry goods and produce to other customers. In 2023 the Company recognized revenue of $13,167 from the sale of groceries to consumers via the gocart.city online grocery delivery application and $359,602 from the sale of dry goods and produce to other customers.
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| LEASES | LEASES
Under ASC 842, a right-of-use asset and lease liability is recorded for all leases and the statement of operations reflects the lease expense for operating leases and amortization/interest expense for financing leases.
The Company does not apply the recognition requirements in the standard to a lease that at commencement date has a lease term of twelve months or less and does not contain a purchase option that it is reasonably certain to exercise and to not separate lease and related non-lease components. Options to extend the leases are not included in the minimum lease terms unless they are reasonably certain to be exercised.
The Company leases an automobile under a non-cancelable operating lease. Right-of-use assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
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| DEBT DISCOUNT AND DEBT ISSUANCE COSTS | DEBT DISCOUNT AND DEBT ISSUANCE COSTS
Debt discounts and debt issuance costs incurred in connection with the issuance of convertible notes are capitalized and amortized to interest expense based on the related debt agreements using the effective interest rate method. Unamortized discounts are netted against convertible notes.
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| INCOME TAXES | INCOME TAXES
The Company accounts for income taxes in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("FASB ASC") 740, Income Taxes. Under the assets and liability method of FASB ASC 740, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value.
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| NET LOSS PER SHARE |
Basic net income (loss) per share includes no dilution and is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing earnings available to common shareholders by the weighted average number of common shares outstanding for the period increased to include the number of additional common shares that would have been outstanding if potentially dilutive securities had been issued Dilutive net loss per share for common stock is calculated utilizing the if-converted method which assumes the conversion of all Series C Stock to common stock. On June 30, 2024 and June 30, 2023, we excluded the common stock issuable upon conversion of non-redeemable convertible notes, and Series C Stock of shares and shares, respectively, as their effect would have been anti-dilutive.
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| FOREIGN CURRENCY TRANSLATION | FOREIGN CURRENCY TRANSLATION
The consolidated financial statements are presented in United States dollars. The functional currency of the consolidated entities are determined by evaluating the economic environment of each entity. The functional currency of Two Hands Corporation is the United States dollar. Foreign exchange translation adjustments are reported as gains or losses resulting from foreign currency transactions and are included in the results of operations.
Two Hands Canada Corporation maintains its accounts in the Canadian dollar. Assets and liabilities are translated to United States dollars at year-end exchange rates. Income and expenses are transaction at averages exchange rate during the year. Foreign currency transaction adjustments are reported as other comprehensive income, a component of equity in the consolidated balance sheet.
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| STOCK-BASED COMPENSATION |
The Company accounts for stock incentive awards issued to employees and non-employees in accordance with FASB ASC 718, Stock Compensation. Accordingly, stock-based compensation is measured at the grant date, based on the fair value of the award. Stock-based awards to employees are recognized as an expense over the requisite service period, or upon the occurrence of certain vesting events. Additionally, stock-based awards to non-employees are expensed over the period in which the related services are rendered.
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| FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS
ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.
Included in the ASC Topic 820 framework is a three level valuation inputs hierarchy with Level 1 being inputs and transactions that can be effectively fully observed by market participants spanning to Level 3 where estimates are unobservable by market participants outside of the Company and must be estimated using assumptions developed by the Company. The Company discloses the lowest level input significant to each category of asset or liability valued within the scope of ASC Topic 820 and the valuation method as exchange, income or use. The Company uses inputs which are as observable as possible and the methods most applicable to the specific situation of each company or valued item.
The Company’s financial instruments such as cash, accounts payable and accrued liabilities, non-redeemable convertible notes, notes payable and due to related parties are reported at cost, which approximates fair value due to the short-term nature of these financial instruments.
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| RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS
In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. The Company is currently evaluating the provisions of the amendments and the impact on its financial statements.
In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the provisions of the amendments and the impact on its financial statements.
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of accounts receivable and revenue concentrations |
The following table summarizes accounts payable and purchases concentrations:
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LEASES (Tables) |
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Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||
| Leases | ||||||||||||||||||||||||||||||||||||
| Schedule of operating lease liability |
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NON-REDEEMABLE CONVERTIBLE NOTES (Details Narrative) - Non Redeemable Convertible Notes Payable [Member] - Side Letter Agreement [Member] - USD ($) |
3 Months Ended | 6 Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|---|
Jan. 31, 2019 |
Sep. 13, 2018 |
May 10, 2018 |
Jan. 08, 2018 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Dec. 31, 2023 |
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| Stuart Turk [Member] | |||||||||
| Short-Term Debt [Line Items] | |||||||||
| Debt description | On January 8, 2018, the Company entered into a Side Letter Agreement (“Note”) with a non-related investor, Stuart Turk, to amend and add certain terms to unsecured, non-interest bearing, due on demand notes payable totaling $244,065 issued by the Company during the period of July 2014 and December 2017. | ||||||||
| Debt carrying value | $ 244,065 | $ 16,179 | $ 16,179 | $ 115,004 | |||||
| Debt face value | $ 292,878 | $ 27,742 | $ 27,742 | 115,004 | |||||
| Debt maturity date | Dec. 31, 2018 | ||||||||
| Debt conversion price per share | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
| Debt instrument collateral | The Note allows the lender to secure a portion of the Company assets up to 200% of the face value of the Note. | ||||||||
| Debt payment terms | If the Note is not paid on December 31 each year, the outstanding face amount of the Note increases by 20% on January 1 the following year. | ||||||||
| Value of principal and interest portion of debt converted into shares | $ 110,263 | ||||||||
| No of shares of common stock issued in conversion of debt | 1,102,630,000 | ||||||||
| Gain (loss) on debt settlement | $ 597,965 | ||||||||
| Interest expense | $ 5,719 | $ 9,365 | 11,438 | $ 18,626 | |||||
| Unamortized discount | 11,563 | $ 11,563 | 0 | ||||||
| Jordan Turk [Member] | |||||||||
| Short-Term Debt [Line Items] | |||||||||
| Debt description | On May 10, 2018, the Company entered into a Side Letter Agreement (“Note”) with a non-related investor, Jordan Turk, to amend and add certain terms to unsecured, non-interest bearing, due on demand notes payable totaling $35,000 issued by the Company on May 9, 2018. | ||||||||
| Debt carrying value | $ 35,000 | 0 | $ 0 | 1,885 | |||||
| Debt face value | $ 42,000 | $ 1,885 | $ 1,885 | 1,885 | |||||
| Debt maturity date | Dec. 31, 2018 | ||||||||
| Debt conversion price per share | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
| Debt instrument collateral | The Note allows the lender to secure a portion of the Company assets up to 200% of the face value of the Note. | ||||||||
| Debt payment terms | If the Note is not paid on December 31 each year, the outstanding face amount of the Note increases by 20% on January 1 the following year. | ||||||||
| No of shares of common stock issued in conversion of debt | 22,625,300 | ||||||||
| Gain (loss) on debt settlement | $ 36,747 | ||||||||
| Interest expense | $ 283 | 422 | 377 | 840 | |||||
| Unamortized discount | 0 | 0 | 0 | ||||||
| Principle amount converted | $ 2,263 | ||||||||
| Jordan Turk 1 [Member] | |||||||||
| Short-Term Debt [Line Items] | |||||||||
| Debt description | On September 13, 2018, the Company entered into a Side Letter Agreement (“Note”) with a non-related investor, Jordan Turk, to amend and add certain terms to unsecured, non-interest bearing, due on demand notes payable totaling $40,000 issued by the Company during the period of July 10, 2018 to September 13, 2018. | ||||||||
| Debt carrying value | $ 40,000 | 131,318 | $ 131,318 | 119,440 | |||||
| Debt face value | $ 48,000 | 143,327 | $ 143,327 | 119,440 | |||||
| Debt maturity date | Dec. 31, 2018 | ||||||||
| Debt conversion price per share | $ 0.0001 | ||||||||
| Debt instrument collateral | The Note allows the lender to secure a portion of the Company assets up to 200% of the face value of the Note. | ||||||||
| Debt payment terms | If the Note is not paid on December 31 each year, the outstanding face amount of the Note increases by 20% on January 1 the following year. | ||||||||
| Interest expense | 5,939 | 4,963 | $ 11,878 | 9,872 | |||||
| Unamortized discount | 12,009 | $ 12,009 | 0 | ||||||
| Stuart Turk 1 [Member] | |||||||||
| Short-Term Debt [Line Items] | |||||||||
| Debt description | On January 31, 2019, the Company entered into a Side Letter Agreement (“Note”) with Stuart Turk to amend and add certain terms to unsecured, non-interest bearing, due on demand notes payable totaling $106,968 issued by the Company during the period of January 3, 2018 to December 28, 2018. | ||||||||
| Debt carrying value | $ 106,968 | 292,642 | $ 292,642 | 266,171 | |||||
| Debt face value | $ 128,362 | 319,405 | $ 319,405 | 266,171 | |||||
| Debt maturity date | Dec. 31, 2019 | ||||||||
| Debt conversion price per share | $ 0.0001 | ||||||||
| Debt instrument collateral | The Note allows the lender to secure a portion of the Company assets up to 200% of the face value of the Note. | ||||||||
| Debt payment terms | If the Note is not paid on December 31 each year, the outstanding face amount of the Note increases by 20% on January 1 the following year. | ||||||||
| Interest expense | 13,236 | $ 11,060 | $ 26,472 | $ 21,999 | |||||
| Unamortized discount | $ 26,763 | $ 26,763 | $ 0 | ||||||
LEASES (Details) |
Jun. 30, 2024
USD ($)
|
|---|---|
| Leases | |
| 2024 | $ 5,100 |
| 2025 | 7,650 |
| Total operating lease commitments | 12,750 |
| Less: imputed interest | (1,879) |
| Total right-of-use liability | $ 10,871 |
LEASES (Details Narrative) - USD ($) |
6 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Dec. 31, 2023 |
|
| Leases | ||
| Right-of-use asset | $ 35,906 | |
| Weighted-average lease term | 1 year 6 months | |
| Weighted-average discount rate | 3.96% | |
| Discounted current right-of-use lease liability | $ 8,654 | $ 8,759 |
| Discounted non-current right-of-use lease liability | 2,217 | $ 6,800 |
| Operating leases expense | $ 5,100 |
LINE OF CREDIT (Details Narrative) - Grid Promissory Note [Member] - Lender [Member] - Credit Facility Agreement [Member] |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
|---|---|---|---|---|---|---|---|---|
|
Apr. 14, 2022
CAD ($)
|
Jun. 30, 2024
USD ($)
|
Jun. 30, 2023
USD ($)
|
Jun. 30, 2024
USD ($)
|
Jun. 30, 2024
CAD ($)
|
Jun. 30, 2023
USD ($)
|
Dec. 31, 2023
USD ($)
|
Dec. 31, 2023
CAD ($)
|
|
| Debt Instrument [Line Items] | ||||||||
| Line of credit | $ 750,000 | $ 801,485 | $ 801,485 | $ 629,507 | ||||
| Line of credit increments | $ 50,000 | |||||||
| Interest rate | 8.00% | |||||||
| Maturity date | May 01, 2024 | |||||||
| Line of credit principal | 735,539 | $ 1,007,174 | 588,295 | $ 780,336 | ||||
| Line of credit interest | 65,946 | $ 41,212 | ||||||
| Interest expense | $ 14,218 | $ 8,987 | $ 26,229 | $ 15,780 | ||||
NOTES PAYABLE (Details Narrative) - USD ($) |
Jun. 30, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Debt Disclosure [Abstract] | ||
| Notes payable, current | $ 109,963 | $ 113,333 |
PROMISSORY NOTES (Details Narrative) - Promissory Notes [Member] - USD ($) |
6 Months Ended | 12 Months Ended | |
|---|---|---|---|
Feb. 02, 2023 |
Jun. 30, 2024 |
Dec. 31, 2023 |
|
| Short-Term Debt [Line Items] | |||
| Promissory notes with principal and interest | $ 257,195 | $ 247,862 | |
| Promissory notes - principle | 186,672 | 186,672 | |
| Promissory notes - interest | $ 70,523 | 61,190 | |
| Promissory note interest rate | 10.00% | ||
| Maturity date | Dec. 31, 2025 | ||
| Chief Executive Officers [Member] | |||
| Short-Term Debt [Line Items] | |||
| Promissory notes with principal and interest | $ 0 | $ 0 | |
| Promissory note interest rate | 10.00% | ||
| Maturity date | Dec. 31, 2025 | ||
| Settle debt related party with carrying value | $ 85,922 |
RELATED PARTY TRANSACTIONS (Details Narrative) |
6 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
|
Mar. 17, 2024
USD ($)
|
Feb. 26, 2024
USD ($)
|
Jan. 02, 2024
CAD ($)
|
Jul. 01, 2023
USD ($)
|
Jul. 01, 2023
CAD ($)
|
Feb. 02, 2023
USD ($)
|
Jan. 15, 2023
USD ($)
|
Jun. 30, 2024
USD ($)
|
Jun. 30, 2023
USD ($)
|
Dec. 31, 2023
USD ($)
|
|
| Advances and accrued salary | $ 1,017,499 | $ 883,534 | ||||||||
| Consulting fee | $ 24,000 | $ 18,000 | $ 24,000 | |||||||
| Stock based compensation - salaries | 0 | $ 0 | ||||||||
| Chief Executive Officer [Member] | ||||||||||
| Advances to related party for expenses | 53,428 | 52,266 | ||||||||
| Repaid adavance from related party | 23,398 | 20,749 | ||||||||
| Accrued salary | 405,754 | 399,739 | ||||||||
| Annual salary | $ 600,000 | $ 600,000 | ||||||||
| Chief Executive Officer [Member] | Promissory Notes [Member] | ||||||||||
| Conversion of stock amount | $ 296,000 | $ 188,871 | ||||||||
| Bradley Southam [Member] | ||||||||||
| Advertising services | $ 0 | $ 2,720 | ||||||||
PREFERRED STOCK (Details Narrative) - USD ($) |
6 Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 29, 2023 |
Oct. 04, 2022 |
Jun. 30, 2022 |
Apr. 27, 2022 |
Jun. 30, 2024 |
Dec. 31, 2023 |
Sep. 01, 2021 |
Jun. 24, 2021 |
Oct. 07, 2020 |
Dec. 12, 2019 |
Aug. 06, 2013 |
|
| Class of Stock [Line Items] | |||||||||||
| Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |||||||||
| Stated value | $ 0.001 | $ 0.001 | |||||||||
| Common Stock [Member] | |||||||||||
| Class of Stock [Line Items] | |||||||||||
| Stockholders equity reverse stock split | 1 for 1,000 reverse stock split | ||||||||||
| Series A Preferred Stock [Member] | |||||||||||
| Class of Stock [Line Items] | |||||||||||
| Preferred stock, shares authorized | 200,000 | ||||||||||
| Preferred stock, voting rights | On April 21, 2022, the Company amended its articles to amend the terms of its Series A Convertible Preferred Stock to become non-voting shares. Previously Series A Stock were entitled to the number of votes equal to the aggregate number of shares of common stock into which the Holder’s share of Series A Stock is convertible, multiplied by one hundred (100). | ||||||||||
| Series B Preferred Stock [Member] | |||||||||||
| Class of Stock [Line Items] | |||||||||||
| Preferred stock, shares authorized | 100,000 | ||||||||||
| Preferred stock, convertible terms | each share of Series B Stock is convertible into one thousand (1,000) shares of common stock of the Company. Series B Stock is non-voting. | ||||||||||
| Series C Preferred Stock [Member] | |||||||||||
| Class of Stock [Line Items] | |||||||||||
| Preferred stock, shares authorized | 5,000 | ||||||||||
| Preferred stock, convertible terms | Each share of Series C Stock (i) has a liquidation value of $100, subject to various anti-dilution protections (ii) is convertible into shares of common stock of the Company | ||||||||||
| Stated value | $ 0.001 | ||||||||||
| Share price | $ 0.25 | ||||||||||
| Conversion Price | $ 2.00 | ||||||||||
| Stockholders equity reverse stock split | 1 for 1,000 reverse stock split | ||||||||||
| Shares issued | 296,951 | ||||||||||
| Fair value of stock issued | $ 834,001 | ||||||||||
| Series C Preferred Stock [Member] | Minimum [Member] | |||||||||||
| Class of Stock [Line Items] | |||||||||||
| Preferred stock, shares authorized | 5,000 | ||||||||||
| Conversion Price | $ 0.0035 | ||||||||||
| Fixed conversion price | $ 0.25 | ||||||||||
| Series C Preferred Stock [Member] | Maximum [Member] | |||||||||||
| Class of Stock [Line Items] | |||||||||||
| Preferred stock, shares authorized | 30,000 | ||||||||||
| Conversion Price | $ 0.002 | ||||||||||
| Fixed conversion price | $ 2.00 | ||||||||||
| Series D Preferred Stock [Member] | September One Two Thousand Twenty One [Member] | |||||||||||
| Class of Stock [Line Items] | |||||||||||
| Preferred stock, shares authorized | 200,000 | ||||||||||
| Preferred stock, convertible terms | Each share of Series D Stock is convertible into one hundred (100) shares of common stock of the Company six months after the date of issuance. Series D Stock are non-voting. | ||||||||||
| Stated value | $ 0.001 | ||||||||||
| Series E Convertible Preferred Stock [Member] | |||||||||||
| Class of Stock [Line Items] | |||||||||||
| Preferred stock, shares authorized | 300,000 | ||||||||||
| Stated value | $ 1.00 | ||||||||||
| Preferred stock, par value | $ 0.0001 | ||||||||||
| Annual cumulative dividend | 10.00% |
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] |
1 Months Ended |
|---|---|
|
Aug. 14, 2024
USD ($)
shares
| |
| Subsequent Event [Line Items] | |
| Debt instrument fair value | $ 55,906 |
| Loss of extinguishment of debt | 6,850 |
| Non Redeemable Convertible Notes [Member] | |
| Subsequent Event [Line Items] | |
| Conversion of stock value | $ 49,056 |
| Conversion of stock | shares | 490,561,200 |
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