10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

Mark One

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

For the quarterly period ended June 30, 2023

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

For the transition period from ______ to _______

Commission file number 000-55787

BrewBilt Manufacturing Inc.

(Exact name of registrant as specified in its charter)

Florida	84-4556545
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

110 Spring Hill Drive #10
Grass Valley, CA 95945
(Address of principal executive offices)

(530) 802-5023
(Registrant’s telephone number, including area code)

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

Yes  x No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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

Yes  x No  o

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

Large accelerated filer o	Accelerated filer o
Non-accelerated Filer o (Do not check if a smaller reporting company)	Smaller reporting company x
	Emerging growth company x

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 7(a)(2)(B) of the Securities Act. o

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

Yes  o No  x

As of August 9, 2023, there were 581,572,673 shares of the registrant’s $0.001 par value common stock issued and outstanding.

CONTENTS

		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	26
Item 4.	Controls and Procedures	26
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	27
	SIGNATURES	28

FORWARD LOOKING STATEMENTS

Statements made in this Form 10-Q that are not historical or current facts are “forward-looking statements.”. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 210 8-03 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the three and six months ended June 30, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. For further information, refer to the financial statements and footnotes thereto included in our company’s Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission on April 10, 2023.

REPORTED IN UNITED STATES DOLLARS

	Page
Balance Sheets (Unaudited)	4
Statements of Operations and Comprehensive Loss (Unaudited)	5
Statements of Shareholders’ Deficit (Unaudited)	6
Statements of Cash Flows (Unaudited)	7
Notes to Financial Statements	8-22

3

BREWBILT MANUFACTURING INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2023			2022
ASSETS
Current Assets
Cash	$	—		$	112,086
Accounts receivable		56,084			100,996
Accounts receivable - related party		209,550			206,387
Earnings in excess of billings		364,373			590,746
Inventory		188,930			186,149
Prepaid expenses		22,653			12,663
Total current assets		841,590			1,209,027
Property, plant, and equipment, net		180,617			197,983
Intangibles, net		350,000			400,000
Right-of-use asset		133,850			158,021
Security deposit		16,980			16,980
Other assets		85,305			85,305
TOTAL ASSETS	$	1,608,342		$	2,067,316
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable	$	818,879		$	678,398
Accrued interest		182,603			268,936
Accrued liabilities		368,804			306,003
Bank overdraft		734			—
Billings in excess of revenue		850,130			1,266,940
Current operating lease liabilities		50,854			49,171
Convertible notes payable, net of discount		825,975			966,538
Derivative liabilities		329,833			1,129,846
Loans payable		51,400			—
Liability for unissued shares		150,825			150,825
Promissory notes payable, net of discount		225,000			411,849
Related party liabilities		357,175			181,477
Total Current Liabilities		4,212,212			5,409,983
Non-current operating lease liabilities		82,996			108,850
Total Liabilities		4,295,208			5,518,833
Series A convertible preferred stock: $0.001 par value; 30,000,000 shares authorized 1,376,239 shares issued and outstanding at June 30, 2023 1,394,052 shares issued and outstanding at December 31, 2022		13,762,390			13,940,520
Convertible preferred stock payable		934,000			175,000
Commitments and contingencies		—			—
Stockholders’ Deficit:
Preferred stock, Series B: $0.001 par value; 1,000 shares authorized 1,000 shares issued and outstanding at June 30, 2023 1,000 shares issued and outstanding at December 31, 2022		1			1
Common stock, $0.001 par value; 30,000,000,000 authorized 309,222,673 shares issued and outstanding at June 30, 2023 6,791,045 shares issued and outstanding at December 31, 2022 (1)		309,223			6,791
Additional paid in capital		10,530,174			8,565,459
Retained earnings		(28,222,654	)		(26,139,288	)
Total stockholders’ deficit		(17,383,256	)		(17,567,037	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	1,608,342		$	2,067,316

(1) Common share amounts and per share amounts in the financial statements reflect the one-for-three hundred reverse stock split that was made effective on March 23, 2023.

The accompanying notes are an integral part of these financial statements

4

BREWBILT MANUFACTURING INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

	Three months ended						Six months ended
	June 30,						June 30,
	2023			2022			2023			2022
Sales	$	354,209		$	14,398		$	673,694		$	25,698
Sales - related party		—			958,224			32,856			958,224
Cost of sales		227,318			693,097			512,122			698,870
Gross profit		126,891			279,525			194,428			285,052
Operating expenses:
Consulting fees		16,300			69,500			37,800			147,000
Depreciation and amortization		8,720			13,547			17,366			29,872
G&A expenses		88,998			202,925			215,292			364,685
Professional fees		42,603			6,382			88,857			30,676
Salaries and wages		149,057			124,489			1,103,022			446,391
Total operating expenses		305,678			416,843			1,462,337			1,018,624
Loss from operations		(178,787	)		(137,318	)		(1,267,909	)		(733,572	)
Other income (expense):
Other income		—			1			1			2
Gain on debt settlement		—			22,029			—			22,029
Gain on debt forgiveness		—			—			216,309			—
Derivative income (expense)		432,018			(1,893,753	)		(339,262	)		(1,802,925	)
Loss on conversion of debt		(37,580	)		(46,108	)		(44,871	)		(1,021,396	)
Loss (gain) on conversion of debt of preferred stock		886,655			11,685			(82,545	)		(109,872	)
Interest expense		(174,780	)		(267,097	)		(565,089	)		(738,916	)
Total other expenses		1,106,313			(2,173,243	)		(815,457	)		(3,651,078	)
Net profit (loss) before income taxes		927,526			(2,310,561	)		(2,083,366	)		(4,384,650	)
Income tax expense		—			—			—			—
Net profit (loss)	$	927,526		$	(2,310,561	)	$	(2,083,366	)	$	(4,384,650	)
Per share information
Weighted number of common shares outstanding, basic, and diluted (1)		109,563,951			323,894			65,725,758			222,542
Net profit (loss) per common share	$	0.0085		$	(7.1337	)	$	(0.0317	)	$	(19.7026	)

(1) Common share amounts and per share amounts in the financial statements reflect the one-for-three hundred reverse stock split that was made effective on March 23, 2023.

The accompanying notes are an integral part of these financial statements

5

BREWBILT MANUFACTURING INC.

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (DEFICIT)

	Convertible Preferred Stock									Preferred Stock										Additional			Retained			Total
	Series A						Shares			Series B				Common Stock						Paid-In			Earnings			Shareholders’
	Shares			Amount			Payable			Shares		Amount		Shares (1)			Amount			Capital			(Deficit)			Equity (Deficit)
Balance at December 31, 2022		1,394,052		$	13,940,520		$	175,000			1,000	$	1		6,791,045		$	6,791		$	8,565,459		$	(26,139,288	)	$	(17,567,037	)
Conversion of convertible notes payable to stock		—			—			—			—		—		9,602,210			9,602			144,052			—			153,654
Derivative settlements		—			—			—			—		—		—			—			1,193,815			—			1,193,815
Preferred stock converted to common stock		(11,200	)		(112,000	)		—			—		—		84,000,000			84,000			997,200			—			1,081,200
Preferred shares to be issued to officers and directors pursuant to agreements		—			—			750,000			—		—		—			—			—			—			—
Preferred shares to be issued for services		—			—			9,000			—		—		—			—			—			—			—
Cashless warrant exercise		—			—			—			—		—		416,666			417			(417	)		—			—
Rounding due to reverse stock split		—			—			—			—		—		56			—			—			—			—
Net loss		—			—			—			—		—		—			—			—			(3,010,892	)		(3,010,892	)
Balance at March 31, 2023		1,382,852		$	13,828,520		$	934,000			1,000	$	1		100,809,977		$	100,810		$	10,900,109		$	(29,150,180	)	$	(18,149,260	)
Conversion of convertible notes payable to stock		—			—			—			—		—		234,303,609			234,304			136,639			—			370,943
Derivative settlements		—			—			—			—		—		—			—			288,060			—			288,060
Common stock converted to preferred stock		8,000			80,000			—			—		—		(80,000,000	)		(80,000	)		(944,000	)		—			(1,024,000	)
Preferred stock converted to common stock		(14,613	)		(146,130	)		—			—		—		54,100,000			54,100			149,375			—			203,475
Rounding due to reverse stock split		—			—			—			—		—		9,087			9			(9	)		—			—
Net profit		—			—			—			—		—		—			—			—			927,526			927,526
Balance at June 30, 2023		1,376,239		$	13,762,390		$	934,000			1,000	$	1		309,222,673		$	309,223		$	10,530,174		$	(28,222,654	)	$	(17,383,256	)
	Convertible Preferred Stock									Preferred Stock										Additional			Retained			Total
	Series A						Shares			Series B				Common Stock						Paid-In			Earnings			Shareholders’
	Shares			Amount			Payable			Shares		Amount		Shares (1)			Amount			Capital			(Deficit)			Equity (Deficit)
Balance at December 31, 2021		1,329,717		$	13,297,170		$	500,000			1,000	$	1		90,106		$	90		$	2,515,308		$	(18,653,402	)	$	(16,138,003	)
Conversion of convertible notes payable to stock		—			—			—			—		—		42,052			42			1,341,974			—			1,342,016
Derivative settlements		—			—			—			—		—		—			—			521,712			—			521,712
Preferred stock converted to common stock		(23,720	)		(237,200	)		—			—		—		10,100			10			358,747			—			358,757
Preferred stock issued for services		7,500			75,000			—			—		—		—			—			—			—			—
Preferred stock payable converted to convertible preferred stock		50,000			500,000			(500,000	)		—		—		—			—			—			—			—
Preferred shares to be issued for services		—			—			150,000			—		—		—			—			—			—			—
Net loss		—			—			—			—		—		—			—			—			(2,074,089	)		(2,074,089	)
Balance at March 31, 2022		1,363,497		$	13,634,970		$	150,000			1,000	$	1		142,258		$	142		$	4,737,741		$	(20,727,491	)	$	(15,989,607	)
Conversion of convertible notes payable to stock		—			—			—			—		—		26,353			27			92,912			—			92,939
Derivative settlements		—			—			—			—		—		—			—			215,935			—			215,935
Preferred stock converted to common stock		(205,185	)		(2,051,850	)		—			—		—		688,118			688			2,039,477			—			2,040,165
Common stock issued per agreement		—			—			—			—		—		13,333			13			39,987			—			40,000
Preferred stock issued to settle debt		10,500			105,000			—			—		—		—			—			—			—			—
Preferred stock issued for future advertising expenses		200,000			2,000,000			—			—		—		—			—			—			—			—
Rounding due to reverse stock split		—			—			—			—		—		27			—			—			—			—
Net loss		—			—			—			—		—		—			—			—			(2,310,561	)		(2,310,561	)
Balance at June 30, 2022		1,368,812		$	13,688,120		$	150,000			1,000	$	1		870,089		$	870		$	7,126,052		$	(23,038,052	)	$	(15,911,129	)

(1) Common share amounts and per share amounts in the financial statements reflect the one-for-three hundred reverse stock split that was made effective on March 23, 2023.

The accompanying notes are an integral part of these financial statements

6

BREWBILT MANUFACTURING INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six months ended
	June 30,
	2023			2022
Cash flows from operating activities:
Net loss	$	(2,083,366	)	$	(4,384,650	)
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of convertible debt discount		405,631			544,271
Amortization of capitalized distribution fees		50,000			50,000
Change in derivative liability		339,262			1,802,925
Preferred stock issued for services		—			25,000
Preferred stock issued for advertising expenses		—			2,000,000
Gain on debt forgiveness		(216,309	)		—
Gain on debt settlement		—			(22,029	)
Depreciation and amortization of fixed assets		17,366			29,872
Loss on debt conversion		44,871			1,021,396
Loss on preferred stock conversion		82,545			109,872
Penalties on notes payable		44,848			66,488
Share based compensation		759,000			240,000
Decrease (increase) in operating assets
Accounts receivable		44,912			(3,250	)
Accounts receivable - related party		(3,163	)		(178,609	)
Earnings in excess of billings		226,373			290,989
Inventory		(2,781	)		(50,488	)
Prepaid expenses		(9,990	)		(964,378	)
Other assets		—			(1,000,000	)
Increase (decrease) in operating liabilities
Accounts payable		140,481			(47,038	)
Accrued interest		112,219			119,746
Accrued liabilities		62,801			43,177
Billings in excess of revenues		(416,810	)		(112,929	)
Net cash (used in) provided by operating activities		(402,110	)		(419,635	)
Cash flows from investing activities
Property, plant and equipment, additions		—			—
Property, plant and equipment, reductions		—			—
Net cash (used in) provided by investing activities		—			—
Cash flows from financing activities:
Bank overdraft		734			—
Long term debt		—			151
Payments on convertible debt		(13,650	)		(157,632	)
Proceeds from convertible debt		80,690			208,000
Payments on loans payable		(33,848	)		—
Proceeds from loans payable		80,400			170,000
Related party liabilities		175,698			60,172
Net cash (used in) provided for financing activities		290,024			280,691
Net increase (decrease) in cash		(112,086	)		(138,944	)
Cash, beginning of period		112,086			219,183
Cash, end of period	$	—		$	80,239
Supplemental disclosures of cash flow information:
Cash paid for income taxes	$	—		$	—
Cash paid for interest	$	—		$	—
Schedule of non-cash investing & financing activities
Stock issued for note payable conversion	$	479,726		$	413,559
Derivative settlements	$	1,481,875		$	737,647
Discount from derivative	$	342,600		$	66,001
Preferred stock converted to common stock	$	178,130		$	2,289,050
Preferred stock issued to settle liabilities	$	—		$	105,000
Preferred stock issued for advertising expenses	$	—		$	2,000,000
Cashless warrant exercise	$	417		$	—

(1) Common share amounts and per share amounts in the financial statements reflect the one-for-three hundred reverse stock split that was made effective on March 23, 2023.

The accompanying notes are an integral part of these financial statements

7

BREWBILT MANUFACTURING INC. 

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

June 30, 2023

(unaudited)

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Description of Business

BrewBilt Manufacturing Inc., a Florida Corporation, designs and manufactures custom brewing and fermentation equipment for craft brewers dedicated to making specialty craft beer. BrewBilt brewhouses and tanks are fabricated by highly skilled local welders using best-in-class American stainless steel. 

BrewBilt’s proprietary systems are designed for talented brewer’s who proudly stand behind every pint of great beer. The company has spent 15 years designing brewhouse systems for hundreds of satisfied companies around the globe. Each brewery systems is customized for the customers needs. Our engineering and design team work closely with each customer in order to assure quality assurance and industry compliance.

BrewBilt hand-crafts high quality brewing systems that are designed around specific brewing needs. Built by talented craftsmen in Northern California using the finest American 304 stainless steel. Every BrewBilt product features superior efficiency with an intuitive ergonomic design. From our powerful 10-bbl Pub system up to a 120-bbl production system, BrewBilt is there every step of the way during the life of your brewery.

Retail dollar sales of craft beer increased 21%, to $26.8 billion, and now account for just under 27% of the $100 billion U.S. beer market (previously $94 billion). The primary reason for the larger dollar sales increase was the shift back in beer volume to bars and restaurants from packaged sales.

The number of operating craft breweries continued to climb in 2021, reaching an all-time high of 9,118, including 1,886 microbreweries, 3,307 brewpubs, 3,702 taproom breweries, and 223 regional craft breweries. The total operating brewery count was 9,247, up from 9,025 in 2020. Throughout the year, there were 646 new brewery openings. 

Financial Statement Presentation 

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

Business Combinations

As per ASC 805-50 a common-control transaction does not meet the definition of a business combination because there is no change in control over the net assets. The accounting for these transactions is addressed in the “Transactions Between Entities Under Common Control”. The net assets are derecognized by the transferring entity and recognized by the receiving entity at the historical cost of the parent of the entities under common control. Any difference between the proceeds transferred or received and the carrying amounts of the net assets is recognized in equity in the transferring and receiving entities’ separate financial statements and eliminated in consolidation. The change in accounting principle is applied retroactively for all periods presented.

Fiscal year end 

The Company has selected December 31 as its fiscal year end.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates.

8

Cash Equivalents

The Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents.

Revenue Recognition and Related Allowances

The Company recognizes revenue when obligations under the terms of a contract with its customer are satisfied; generally, this occurs with the transfer of control of its products. Revenue is measured as the amount of consideration expected to be received in exchange for transferring products. If the conditions for revenue recognition are not met, the Company defers the revenue and related cost of sales until all conditions are met. As of June 30, 2023 and December 31, 2022, the Company has deferred $850,130 and $1,266,940, respectively, in revenue, and $364,373 and $590,746 in cost of sales, respectively, related to customer orders in progress. These amounts are recorded as billings in excess of revenues and earnings in excess of billings in the accompanying balance sheets.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at the amount that management expects to collect from outstanding balances. Bad debts and allowances are provided based on historical experience and management’s evaluation of outstanding accounts receivable. Management evaluates past due or delinquency of accounts receivable based on the open invoices aged on due date basis. The allowance for doubtful accounts at June 30, 2023 and December 31, 2022 is $0.

Inventories

Inventories consist of raw materials, work in process and finished goods. Raw materials, which principally consist of raw stainless steel, raw stainless tubing, motors, pumps, and fittings, are stated at the lower of cost, determined on the first-in, first-out basis, or net realizable value. As of June 30, 2023 and December 31, 2022, the Company has inventory of $188,930 and $186,149, respectively.

Capitalized distribution fees

The Company records its intangible assets at cost in accordance with ASC 350, Intangibles – Goodwill and Other. The Company reviews the intangible assets for impairment on an annual basis or if events or changes in circumstances indicate it is more likely than not that they are impaired. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale, or disposition of a significant portion of the business, or other factors. If the review indicates the impairment, an impairment loss would be recorded for the difference of the value recorded and the new value. For the six months ended June 30, 2023, and year ended December 31, 2022, there were no impairment losses recognized for intangible assets. The Company amortizes the capitalized distribution fees over the five-year term of the underlying distribution agreement.

Impairment of Long-Lived Assets

The Company reviews long-lived assets, including definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount. If the operation is determined to be unable to recover the carrying amount of its assets, then these assets are written down first, followed by other long-lived assets of the operation to fair value. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. For the six months ended June 30, 2023 and the year ended December 31, 2022, there were no impairment losses recognized for long-lived assets.

Warranty

The Company is a manufacturer of products which are shipped to our customers directly from the Company. For products that are made from raw materials, the Company offers a 6-year limited warranty. The parts provided by outside vendors as finished goods that are added to a system produced by the Company as components, have a manufacturers’ warranty that is passed on to the end user of the complete system. To date, BrewBilt has spent less than $5,000 over the past 5 years for repairs (under warranty) on products they have built, with most of the costs going to cover travel and lodging expenses. As of June 30, 2023 and December 31, 2022, the Company has recorded a liability of $5,000 and $5,000, respectively, for warranties, which is included in accrued liabilities in the accompanying balance sheet.

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Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses are carried at amortized cost and represent liabilities for goods and services provided to the Company prior to the end of the fiscal year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.

In addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs is expanded. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, and which is determined by the lowest level input that is significant to the fair value measurement in its entirety.

These levels are:

Level 1 - inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

Level 2 - inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

Financial assets and liabilities measured at fair value on a recurring basis:

	Input		June 30, 2023		December 31, 2022
	Level		Fair Value		Fair Value
Derivative Liability		3	$	329,833	$	1,129,846
Total Financial Liabilities			$	329,833	$	1,129,846

In management’s opinion, the fair value of convertible notes payable and advances payable is approximate to carrying value as the interest rates and other features of these instruments approximate those obtainable for similar instruments in the current market. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, exchange or credit risks arising from these financial instruments. As of June 30, 2023 and December 31, 2022, the balances reported for cash, accounts receivable, prepaid expenses, accounts payable, and accrued liabilities, approximate the fair value because of their short maturities.

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Convertible Instruments

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815 “Derivatives and Hedging”. ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument.”

ASC 815-40 “Derivatives and Hedging - Contracts in Entity’s Own Equity” provides that, among other things, generally, if an event is not within the entity’s control could or require net cash settlement, then the contract shall be classified as an asset or a liability.

Debt issuance costs and debt discounts

Debt issuance costs and debt discounts are being amortized over the lives of the related financings on a basis that approximates the effective interest method. Costs and discounts are presented as a reduction of the related debt in the accompanying consolidated balance sheets.

Income Taxes

The Company records deferred taxes in accordance with FASB ASC No. 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and loss carryforwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.

As of the date of this filing, the Company is not current in filing their tax returns. The last return filed by the Company was December 31, 2019, and the Company has not accrued any potential penalties or interest from that period forward. The Company will need to file returns for the year ending December 31, 2022, 2021, and 2020, which is still open for examination.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC Topic 718-10, Compensation-Stock Compensation and ASC Subtopic 505-50, Equity-Based Payments to Non-Employees. Stock-based compensation expense recognized during the requisite services period is based on the value of share-based payment awards after reduction for estimated forfeitures. Forfeitures are estimated at the time of grant and are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

During the six months ended June 30, 2023 and 2022, the Company had stock-based compensation expense recognized in its statements of operations of $759,000 and $240,000, respectively.

Basic and Diluted Loss Per Share

In accordance with ASC Topic 280 – “Earnings Per Share”, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period after giving retroactive effect to the reverse stock splits affected on April 28, 2022 and March 23, 2023 (see Note 17). Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

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Recent Accounting Pronouncements

Although there were new accounting pronouncements issued or proposed by the FASB during the six months ending June 30, 2023 and through the date of filing of this report, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its financial position or results of operations.

NOTE 2 – GOING CONCERN

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As of June 30, 2023, the Company has a shareholders’ deficit of $17,383,256 since its inception, working capital deficit of $3,370,622, negative cash flows from operations, and has limited business operations, which raises substantial doubt about the Company’s ability to continue as going concern. The ability of the Company to meet its commitments as they become payable is dependent on the ability of the Company to obtain necessary financing or achieving a profitable level of operations. There is no assurance the Company will be successful in achieving these goals.

The Company does not have sufficient cash to fund its desired production for the next 12 months. The Company has arranged financing and intends to utilize the cash received to cover ongoing operational expenses. The Company plans to seek additional financing if necessary, in private or public equity offering(s) to secure future funding for operations. There can be no assurance the Company will be successful in raising additional funding. If the Company is not able to secure additional funding, the implementation of the Company’s business plan will be impaired. There can be no assurance that such additional financing will be available to the Company on acceptable terms or at all.

NOTE 3 - PREPAID EXPENSES

Prepaid fees represent amounts paid in advance for future contractual benefits to be received. Contracting expenses paid in advance are recorded as a prepaid asset and then amortized to the statements of operations when services are rendered, or over the life of the contract using the straight-line method.

As of June 30, 2023 and December 31, 2022, prepaid expenses consisted of the following:

	June 30,		December 31,
	2023		2022
Prepaid insurance expenses	$	22,653	$	12,663
	$	22,653	$	12,663

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at June 30, 2023 and December 31, 2022:

	June 30,			December 31,
	2023			2022
Computer Equipment	$	23,876		$	23,876
Leasehold Improvements		131,890			131,890
Machinery		352,187			352,187
Software		23,183			23,183
Vehicles		6,717			6,717
		537,853			537,853
Less accumulated amortization		(23,183	)		(23,183	)
Less accumulated depreciation		(334,053	)		(316,687	)
	$	180,617		$	197,983

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During the six months ended June 30, 2023, the company recorded fixed assets additions of $0 and fixed asset proceeds of $0. Depreciation and amortization expenses of $17,366 and $29,872 were recorded to the statement of operations for the six months ended June 30, 2023 and 2022, respectively.

NOTE 5 – LEASES

The Company adopted the new lease guidance effective January 1, 2019 using the modified retrospective transition approach, applying the new standard to all of its leases existing at the date of initial application which is the effective date of adoption. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. We elected the package of practical expedients which permits us to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. We did not elect the hindsight practical expedient which permits entities to use hindsight in determining the lease term and assessing impairment. The adoption of the lease standard did not change our previously reported consolidated statements of operations and did not result in a cumulative catch-up adjustment to opening equity.

The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In calculating the present value of the lease payments, the Company elected to utilize its incremental borrowing rate based on the remaining lease terms as of the January 1, 2019 adoption date.

Operating Leases

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred, if any. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Our lease has a remaining lease term of 2.5 years.

The Company has elected the practical expedient to combine lease and non-lease components as a single component. The lease expense is recognized over the expected term on a straight-line basis. Operating leases are recognized on the balance sheet as right-of-use assets, current operating lease liabilities and non-current operating lease liabilities.

The new standard also provides practical expedients and certain exemptions for an entity’s ongoing accounting. We have elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases where the initial lease term is one year or less or for which the ROU asset at inception is deemed immaterial, we will not recognize ROU assets or lease liabilities. Those leases are expensed on a straight-line basis over the term of the lease.

On January 1, 2020, the Company entered into a standard office lease for approximately 8,000 square feet of space, located in the Wolf Creek Industrial Building at 110 Spring Hill Dr. #10 Grass Valley, CA 95945. The lease has a term of five years, from January 1, 2020 through December 31, 2025, with a monthly rent of $4,861.

As of June 30, 2023 and December 31, 2022, ROU assets and lease liabilities related to our operating lease is as follows:

	June 30,		December 31,
	2023		2022
Right-of-use assets	$	133,850	$	158,021
Current operating lease liabilities		50,854		49,171
Non-current operating lease liabilities		82,996		108,850

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The following is a schedule, by years, of future minimum lease payments required under the operating lease:

Years Ending
December 31,	Operating Lease
2023		29,168
2024		58,334
2025		58,334
Total		145,836
Less imputed interest		11,986
Total liability	$	133,850

NOTE 6 – INTANGIBLES

On August 20, 2021, the company entered into an Exclusive Distribution Agreement with South Pacific Traders Oy. Pursuant to the agreement, the company issued 50,000 Series A Convertible Preferred stock at $10 per share. South Pacific Traders will market BrewBilt Manufacturing equipment to the European Community and United Kingdom. Management determined that the 50,000 Series A Convertible Preferred to be issued as consideration for the exclusive distribution agreement is a finite-lived intangible asset and will be amortized over the five year term of the agreement.

On January 17, 2022, the company issued 50,000 shares, and $500,000 was reclassified from Convertible Stock Payable to Series A Convertible Preferred Stock. During the six months ending June 30, 2023 and 2022, the company amortized $50,000 and $50,000, respectively, of the capitalized distribution fees to the statement of operations.

NOTE 7 – ACCRUED LIABILITIES

As of June 30, 2023 and December 31, 2022, accrued liabilities were comprised of the following:

Schedule of Accrued Liabilities 

	June 30,		December 31,
	2023		2022
Accrued liabilities
Accrued wages	$	41,094	$	31,294
Credit card		8,137		7,295
Payroll taxes		219,237		163,384
Sales tax payable		95,336		99,030
Warranty		5,000		5,000
Total accrued expenses	$	368,804	$	306,003

NOTE 8 – BILLINGS IN EXCESS OF REVENUE AND EARNINGS IN EXCESS OF BILLINGS

Billings in excess of revenue is related to contracted amounts that have been invoiced to customers for which remaining performance obligations must be completed before the Company can recognize the revenue. Earnings in excess of billings is related to the cost of sales associated with the customer jobs that are incomplete.

Changes in unearned revenue for the six months ended June 30, 2023 and the year ended December 31, 2022 were as follows:

	June 30,			December 31,
	2023			2022
Unearned revenue, beginning of the period	$	1,266,940		$	1,104,923
Billings in excess of revenue additions		289,408			1,565,019
Recognition of revenue		(706,218	)		(1,403,002	)
Unearned revenue, end of the period	$	850,130		$	1,266,940

As of June 30, 2023 and December 31, 2022, the Company has recorded $364,373 and $590,746, respectively, in earnings in excess of billings for the cost of sales related to customer orders in progress.

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NOTE 9 – CONVERTIBLE NOTES PAYABLE

As of June 30, 2023 and December 31, 2022, convertible notes payable were comprised of the following:

	Original		Original	Due	Interest	Conversion	June 30,			December 31,
	Note Amount		Note Date	Date	Rate	Rate	2023			2022
1800 Diagonal Lending		54,250	7/26/2022	7/26/2023	10%	Variable	$	—		$	54,250
Coventry Enterprises		200,000	6/9/2022	6/9/2023	10%	Variable		223,283			—
Emerging Corp Capital		110,000	10/31/2018	10/31/2019	24%	Variable		—			110,000
Fourth Man		110,000	10/3/2022	10/3/2023	12%	0.09		78,760			110,000
Mammoth Corp		33,000	11/19/2020	8/19/2021	18%	Variable		33,000			33,000
Mammoth Corp		60,000	12/30/2021	12/30/2022	18%	Variable		60,000			60,000
Mammoth Corp		26,800	03/21/22	12/21/22	18%	Variable		28,600			28,600
Mammoth Corp		20,000	2/27/2023	11/27/2023	0%	Variable		20,000			—
Mammoth Corp		24,000	4/3/2023	1/3/2024	0%	Variable		24,000			—
Mast Hill Fund		550,000	10/6/2021	10/6/2022	16%	135		193,860			422,387
Mast Hill Fund		65,000	8/8/2022	8/8/2023	12%	0.75		—			65,000
Pacific Pier Capital		28,000	2/27/2023	2/27/2024	12%	0.015		28,000			—
Pacific Pier Capital		35,650	4/5/2023	4/5/2024	15%	0.004		35,650			—
Tri-Bridge Ventures		240,000	5/6/2021	5/6/2022	10%	0.001		202,599			207,998
							$	927,752		$	1,091,235
Debt discount								(77,721	)		(97,853	)
Financing costs/Original issue discount								(24,056	)		(26,844	)
Convertible notes payable, net of discount							$	825,975		$	966,538

During the six months ending June 30, 2023, the Company received proceeds from new convertible notes of $80,690 and reclassified a promissory note in the amount of $200,000 to convertible notes payable due to the default terms. The default on the promissory note resulted in a default penalty of $40,000, which was recorded to the statement of operations. The Company recorded cash payments of $13,650 and conversions of $387,483 of convertible note principal. Convertible note principal in the amount of $110,000 was forgiven by a note holder, and the Company recorded a gain on forgiveness of debt of $110,000 to the statement of operations. The Company recorded loan fees on new convertible notes of $26,960, which increased the debt discounts recorded on the convertible notes during the six months ending June 30, 2023. Some of the Company’s convertible notes have a conversion rate that is variable, and therefore, the Company has accounted for their conversion features as derivative instruments (see Note 11). The Company also recorded amortization of $392,480 on their convertible note debt discounts and loan fees. As of June 30, 2023, the convertible notes payable are convertible into 1,152,940,218 shares of the Company’s common stock.

During the six months ended June 30, 2023, the Company recorded interest expense of $92,833, conversions of $92,243 and conversion fees of $21,540 on its convertible notes payable. The Company transferred $20,000 in accrued interest from a promissory note that was reclassified as a convertible promissory note due to default. Convertible note interest in the amount of $106,309 was forgiven by note holders, and the Company recorded a gain on forgiveness of debt of $106,309 to the statement of operations. As of June 30, 2023, the accrued interest balance was $96,022.

As of June 30, 2023, we have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities.

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NOTE 10 – PROMISSORY NOTES PAYABLE

As of June 30, 2023 and December 31, 2022, promissory notes payable were comprised of the following:

	Original		Original	Due	Interest	June 30,		December 31,
	Note Amount		Note Date	Date	Rate	2023		2022
Auctus Fund, LLC	$	50,000	1/5/2021	1/5/2022	16%	$	50,000	$	50,000
Auctus Fund, LLC		75,000	7/15/2021	7/15/2022	16%		75,000		75,000
Auctus Fund, LLC		100,000	9/14/2021	9/14/2022	16%		100,000		100,000
Coventry Enterprises, LLC		200,000	6/9/2022	6/9/2023	10%		—		200,000
						$	225,000	$	425,000
Financing costs/Original issue discount							—		(13,151	)
Promissory notes payable, net of discount						$	225,000	$	411,849

On January 5, 2021, the Company received funding pursuant to a promissory note in the amount of $50,000, of which, $39,000 was received in cash and $11,000 was recorded as transaction fees. The note bears interest of 12% (increases to 16% per annum upon an event of default) and matures on January 5, 2022. As of December 31, 2022, the company has amortized $11,000 of the financing costs to the statement of operations. As of June 30, 2023, the note has a principal balance of $50,000 and accrued interest of $17,858.

On July 15, 2021, the Company received funding pursuant to a promissory note in the amount of $75,000, of which $62,500 was received in cash and $12,500 was recorded as transaction fees. The note bears interest of 12% (increases to 16% per annum upon an event of default) and matures on July 15, 2022. As of December 31, 2022, the company has amortized $12,500 of the financing costs to the statement of operations. As of June 30, 2023, the note has a principal balance of $75,000 and accrued interest of $20,507.

On September 14, 2021, the Company received funding pursuant to a promissory note in the amount of $100,000, of which, $82,500 was received in cash and $17,500 was recorded as transaction fees. The note bears interest of 12% (increases to 16% per annum upon an event of default) and matures on September 14, 2022. As of December 31, 2022, the company has amortized $17,500 of the financing costs to the statement of operations. As of June 30, 2023, the note has a principal balance of $100,000 and accrued interest of $24,668.

On June 9, 2022, the Company received funding pursuant to a promissory note in the amount of $200,000, of which $170,000 was received in cash and $30,000 was recorded as transaction fees. The note bears interest of 10% (increases to 18% per annum upon an event of default), which is guaranteed and earned in full as of the issue date. The note matures on June 9, 2023. As of June 30, 2023, the company has amortized $30,000 of the financing costs to the statement of operations. On January 24, 2023, the Company defaulted on the note, and pursuant to the terms, the note became convertible, and the company reclassed $200,000 in principal and $20,000 in accrued interest to convertible notes payable.

NOTE 11 – DERIVATIVE LIABIITIES

During the six months ended June 30, 2023, the Company valued the embedded conversion feature of the convertible notes and warrants. The Company uses the Black-Scholes option pricing model to estimate fair value for those instruments convertible into common shares at inception, at conversion or extinguishment date, and at each reporting date.

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The following table represents the Company’s derivative liability activity for the embedded conversion features for the six months ended June 30, 2023:

	Notes			Warrants			Total
Balance, beginning of period	$	1,088,633		$	41,213		$	1,129,846
Initial recognition of derivative liability		2,386,117			116,102			2,502,219
Derivative settlements		(1,456,834	)		(25,041	)		(1,481,875	)
Loss (gain) on derivative liability valuation		(1,690,789	)		(129,568	)		(1,820,357	)
Balance, end of period	$	327,127		$	2,706		$	329,833

Convertible Notes

The fair value at the commitment date for the convertible notes and the revaluation dates for the Company’s derivative liabilities were based upon the following management assumptions as of June 30, 2023:

	Valuation date
Expected dividends	0%
Expected volatility	356.36% - 411.95%
Expected term	.01 - 1 year
Risk free interest	4.27% - 5.81%

Warrants

We account for common stock purchase warrants as derivative liabilities and debt issuance costs on the balance sheet at fair value, and changes in fair value during the periods presented in the statement of operations, which is revalued at each balance sheet date subsequent to the initial issuance of the warrant. 

The fair value at the commitment date for the warrants and the revaluation dates for the Company’s derivative liabilities were based upon the following management assumptions as of June 30, 2023:

	Valuation date
Expected dividends	0%
Expected volatility	521.28% - 2498.90%
Expected term	1.97 – 5 years
Risk free interest	3.36% - 4.87%

NOTE 12 – WARRANTS

A summary of warrant activity for the six months ended June 30, 2023 is as follows:

					Weighted-Average
			Weighted-Average		Remaining		Aggregate
Warrants	Shares		Exercise Price		Contractual Term		Intrinsic Value
Outstanding at December 31, 2022		524,841	$	1.99		4.66	$	—
Granted		4,031,667		—
Exercised		-50,452		—
Forfeited or expired		0		—
Outstanding at June 30, 2023		4,506,055	$	0.202		4.21	$	—
Exercisable at June 30, 2023		4,506,055	$	0.202		4.21	$	—

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The aggregate intrinsic value in the preceding tables represents the total pre-tax intrinsic value, based on options with an exercise price that is higher than the Company’s market stock price of $0.0006 on June 30, 2023.

NOTE 13 – RELATED PARTY TRANSACTIONS

Officer and Director Agreements

On January 1, 2023, the Company and Jef Lewis entered into a new Employee Agreement that includes the issuance of 15,000 Preferred Series A shares, and an annual salary of $250,000. Unpaid wages will accrue interest at 6% per annum and may be converted to Preferred Series A stock of the company at equal value and under the conversion guidelines of the Certificate of designation for Preferred Series A stock. Pursuant to this the agreement, the Company will issue $150,000 in Convertible Preferred Series A stock. As of the date of the report the shares have not been issued and are reported as Convertible preferred stock payable on the balance sheet.

On January 1, 2023, the Company and Bennett Buchanan entered into a new Employee Agreement that includes the issuance of 15,000 Preferred Series A shares, and an annual salary of $250,000. Unpaid wages will accrue interest at 6% per annum and may be converted to Preferred Series A stock of the company at equal value and under the conversion guidelines of the Certificate of designation for Preferred Series A stock. Pursuant to this the agreement, the Company will issue $150,000 in Convertible Preferred Series A stock. As of the date of the report the shares have not been issued and are reported as Convertible preferred stock payable on the balance sheet.

On January 1, 2023, the Company entered into a Directors Agreement with Jef Lewis for a term of one year. In exchange for serving in this capacity, the Company will issue 15,000 shares of Convertible Preferred Series A stock at a price of $10 per share. As of the date of the report the shares have not been issued and are reported as Convertible preferred stock payable on the balance sheet.

On January 1, 2023, the Company entered into a Directors Agreement with Sam Berry for a term of one year. In exchange for serving in this capacity, the Company will issue 15,000 shares of Convertible Preferred Series A stock at a price of $10 per share. As of the date of the report the shares have not been issued and are reported as Convertible preferred stock payable on the balance sheet.

On January 1, 2023, the Company entered into a Directors Agreement with Bennett Buchanan for a term of one year. In exchange for serving in this capacity, the Company will issue 15,000 shares of Convertible Preferred Series A stock at a price of $10 per share. As of the date of the report the shares have not been issued and are reported as Convertible preferred stock payable on the balance sheet.

Consulting Agreements

On June 19, 2019, the Company entered into a Consulting Agreement with Mr. Samuel Berry.  The agreement is for a term of one year and has been renewed each year upon mutual consent. Mr. Berry will receive an annual salary of $50,000, payable in quarterly installments at $12,500 per quarter. As of December 31, 2022, Mr. Berry had an unpaid balance of $153,167. During the six months ended June 30, 2023, the Company accrued $25,000 in fees in connection to his agreement. As of June 30, 2023, the Company owed Mr. Berry $178,167 in fees.

Advances

During the six months ended June 30, 2023 and the year ended December 31, 2022, $22,120 and $14,237, respectively, was advanced to the company by Jef Lewis.

BrewBilt Brewing Company

BrewBilt Brewing Company works closely with BrewBilt Manufacturing Inc., which is also located in Grass Valley, California, and led by CEO Jef Lewis. BrewBilt Manufacturing is supplying all necessary equipment to BrewBilt Brewing for its craft beer production.

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During the years ending December 31, 2022 and December 31, 2021, Brewbilt Brewing Company made payments of $485,209 and $450,000, respectively, to BrewBilt Manufacturing for fabrication of a brewery system. As of December 31, 2022, the majority of the brewing equipment was completed and delivered to BrewBilt Brewing. The equipment that was delivered and put into use has a sales price of $1,086,246, which was recognized as related party sales on the statement of operations on the 10-K financial statements.

During the six months ended June 30, 2023, the company delivered equipment in the amount of $32,856 to BrewBilt Brewing which has been recognized as related party sales on the statement of operations.

The Company anticipates the remaining equipment will be complete and delivered within three to six months.

NOTE 14 – CONVERTIBLE PREFERRED STOCK

Series A Convertible Preferred Stock

On July 1, 2019, the Company filed a Certificate of Amendment to increase the number of authorized Series A Convertible Preferred Stock to 30,000,000, with a par value of $0.001.  Each share of Convertible Preferred Series A Stock shall have a value of $10 per share and will convert into common stock at the closing price of the common stock on the date of conversion.  The Series A stock shall have no voting rights on corporate matters, unless and until the Series A shares are converted into Common Shares, at which time they will have the same voting rights as all Common Shareholders have; their consent shall not be required for taking any corporate action.

On March 30, 2023, Jef Lewis converted 8,000 shares of Series A Convertible Preferred stock valued at $80,000, in to 80,000,000 common shares. The issuance resulted in a loss on conversion of $944,000 based on the market price of the stock on that date, which was recorded to the statement of operations. The company rescinded this conversion and recorded an adjustment to reverse this transaction on April 1, 2023.

During the six months ended June 30, 2023, 17,813 shares of Series A Convertible Preferred stock were converted to 58,100,000 common shares in accordance with the conversion terms. The issuances resulted in a loss on conversion of $82,545 based on the market price of the stock on the date of issuance, which was recorded to the statement of operations.

The Series A Convertible Preferred Stock has been classified outside of permanent equity and liabilities since it embodies a conditional obligation that the Company may settle by issuing a variable number of equity shares and the monetary value of the obligation is based on a fixed monetary amount known at inception. Each share of the Series A Convertible Preferred Stock has a fixed value of $10 per share, has no voting rights, and is convertible into common stock at closing market price on the date of conversion. The Company has recorded $13,762,390, which represents 1,376,239 Series A Convertible Preferred Stock at $10 per share, issued and outstanding as of June 30, 2023, outside of permanent equity and liabilities.

Preferred Stock Payable

On January 1, 2023, the company agreed to issue 15,000 Convertible Series A shares at $10 per share to Jef Lewis and Bennett Buchanan, pursuant to Employee Agreements.

On January 1, 2023, the company agreed to issue 15,000 Convertible Series A shares at $10 per share to Jef Lewis, Sam Berry, and Bennett Buchanan, pursuant to Directors Agreements.

During the six months ended June 30, 2023, the company agreed to issue 900 Convertible Series A shares at $10 per share to Christopher Bullock, pursuant to a Consulting Agreement.

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NOTE 15 – PREFERRED STOCK

On March 28, 2017, the Company filed an amendment to its articles of incorporation designating 20,000 shares of its authorized preferred stock, par value $0.001 as Series B Voting Preferred Stock.  The Series B Voting Preferred Stock shall have the right to vote the shares on any matter requiring shareholder approval on the basis of 4 times the votes of all the issued and outstanding shares of common stock, as well as any issued and outstanding preferred stock.

On November 22, 2019, President Jef Lewis was issued 1,000 Preferred Series B Control Shares, pursuant to his employee agreement dated November 22, 2019.

As of June 30, 2023, 1,000 Series B Preferred shares were authorized, of which 1,000 Series B shares were issued and outstanding.

NOTE 16 – COMMON STOCK

On December 1, 2022, the Company approved the authorization of a one for three hundred reverse stock split of the Company’s outstanding shares of common stock. The reverse split was effective on March 23, 2023, and the financial statements have been retroactively adjusted to take this into account for all periods presented.

On March 30, 2023, Jef Lewis converted 8,000 shares of Series A Convertible Preferred stock valued at $80,000, in to 80,000,000 common shares. The issuance resulted in a loss on conversion of $944,000 based on the market price of the stock on that date, which was recorded to the statement of operations. The company rescinded this conversion and recorded an adjustment to reverse this transaction on April 1, 2023.

During the six months ended June 30, 2023, 17,813 shares of Series A Convertible Preferred stock were converted to 58,100,000 common shares in accordance with the conversion terms. The issuances resulted in a loss on conversion of $82,545 based on the market price of the stock on the date of issuance, which was recorded to the statement of operations.

During the six months ended June 30, 2023, warrant holders exercised the warrants and the Company issued 416,667 shares of common stock through a cashless exercise of the warrants in accordance with the conversion terms.

During the six months ended June 30, 2023, the holders of a convertible notes converted $387,483 of principal, $92,243 of accrued interest and $21,540 in conversion fees into 243,905,819 shares of common stock. The common stock was valued at $524,597 based on the market price of the Company’s stock on the date of conversion, and a loss on conversion of $44,871 was recorded to the statement of operations.

As of June 30, 2023, 30,000,000,000 were authorized, of which 309,222,673 shares are issued and outstanding.

NOTE 17 – INCOME TAX

Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.

The deferred tax asset and the valuation allowance consist of the following at June 30, 2023:

	June 30,
	2023
Net operating loss	$	2,080,410
Statutory rate		21	%
Expected tax recovery		436,886
Change in valuation allowance		(436,886	)
Income tax provision	$	—
Components of deferred tax asset:
Non-capital tax loss carry-forwards		436,886
Less: valuation allowance		(436,886	)
Net deferred tax asset	$	—

20

As of the date of this filing, the Company is not current in filing their tax returns. The last return filed by the Company was December 31, 2019, and the Company has not accrued any potential penalties or interest from that period forward. The Company will need to file returns for the year ending December 31, 2022, 2021 and 2020, which is still open for examination.

NOTE 18 – COMMITMENTS AND CONTINGENCIES

Consulting Agreement

On August 1, 2022, the Company entered into a Consulting Agreement with Christopher Bullock as a sales representative in India. The term of the agreement is for two years and may be terminated or extended upon mutual agreement of both parties pursuant with a ninety-day written notice. Upon execution of the agreement, the Company agreed to issue $10,000 of Series A Convertible Preferred stock to the Consultant. The Consultant will receive a monthly fee of $3,000, to be paid Series A Convertible Preferred stock, and will receive a 2% commission on gross sales for all products sold in India. As of June 30, 2023, the shares have not been issued and $34,000 has been recorded to Convertible preferred stock payable on the balance sheet. As of March 31, 2023, the Company has terminated this agreement.

Operating Lease

On January 1, 2020, the Company entered into a new office lease for space located in the Wolf Creek Industrial Building at 110 Spring Hill Dr. #10 Grass Valley, CA 95945. The lease has a term of 5 years, from January 1, 2020 through December 31, 2025, with a monthly rent of $4,861.

Service Agreements

On June 12, 2018, the Company entered into a preventative maintenance service agreement with Atlas Copco Compressions LLC. The agreement is for a period of 5 years, at a cost of $145.13 per month.

On October 1, 2022, the Company entered into a Platform Account Contract with SRAX, Inc, whereby the Company agreed to pay $30,000 for access to the SRAX platform for a period of 12-months from the effective date. The platform access fee is non-cancelable and will be deemed fully earned on the effective date of the Agreement. In addition, the Company agrees to a deliverable purchase fee for marketing advisory services in the amount of $270,000 which is due on the effective date. All fees will be paid in Convertible Preferred Series A stock.

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NOTE 19 – SUBSEQUENT EVENTS

Subsequent Issuances

On July 5, 2023, the holder of a convertible note converted a total of $13,600 of principal and interest into 13,600,000 shares of our common stock.

On July 6, 2023, 137 shares of Series A Convertible Preferred stock was converted to 13,700,000 common shares in accordance with the conversion terms.

On July 7, 2023, the holder of a convertible note converted a total of $1,550 of principal and interest into 15,500,000 shares of our common stock.

On July 11, 2023, the holder of a convertible note converted a total of $1,700 of principal and fees into 17,000,000 shares of our common stock.

On July 14, 2023, the holder of a convertible note converted a total of $16,200 of principal and interest into 16,200,000 shares of our common stock.

On July 19, 2023, the holder of a convertible note converted a total of $1,850 of principal and interest into 18,500,000 shares of our common stock.

On July 19, 2023, 186 shares of Series A Convertible Preferred stock was converted to 18,600,000 common shares in accordance with the conversion terms.

On July 24, 2023, the holder of a convertible note converted a total of $21,200 of principal and interest into 21,200,000 shares of our common stock.

On July 25, 2023, the holder of a convertible note converted a total of $2,075 of principal and fees into 20,750,000 shares of our common stock.

On July 26, 2023, 226 shares of Series A Convertible Preferred stock was converted to 22,600,000 common shares in accordance with the conversion terms.

On July 28, 2023, the holder of a convertible note converted a total of $2,400 of principal and interest into 24,000,000 shares of our common stock.

On July 31, 2023, 188 shares of Series A Convertible Preferred stock was converted to 18,800,000 common shares in accordance with the conversion terms.

On August 2, 2023, the holder of a convertible note converted a total of $24,400 of principal and interest into 24,400,000 shares of our common stock.

On August 4, 2023, the holder of a convertible note converted a total of $2,750 of principal and fees into 27,500,000 shares of our common stock.

The Company has evaluated subsequent events pursuant to ASC Topic 855 and has determined that there are no additional subsequent events to disclose.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion and analysis summarizes the significant factors affecting our consolidated results of operations, financial condition, and liquidity position for the three and six months ended June 30, 2023. This discussion and analysis should be read in conjunction with our audited financial statements and notes thereto included in our Annual Report on Form 10-K for our year-ended December 31, 2022 and the consolidated unaudited financial statements and related notes included elsewhere in this filing. The following discussion and analysis contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “intends”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our or our industry’s actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statemen.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. You should not place undue reliance on these statements, which speak only as of the date that they were made. These cautionary statements should be considered with any written or oral forward-looking statements that we may issue in the future. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results, later events, or circumstances or to reflect the occurrence of unanticipated events.

In this report unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares of our capital stock.

The management’s discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

As used in this quarterly report, the terms “we”, “us”, “our”, and “our company” means BrewBilt Manufacturing, Inc., unless otherwise indicated.

RESULTS OF OPERATIONS

Results for the Three Months Ended June 30, 2023 Compared to the Three Months Ended June 30, 2022

Revenues:

The Company’s revenues were $354,209 for the three months ended June 30, 2023 compared to $972,622 for the three months ended June 30, 2022. During the six months ending June 30, 2023 and 2022, $32,856 and $958,224, respectively, were from a related party, BrewBilt Brewing.

The Company’s revenues were $354,209 for the three months ended June 30, 2023 compared to $972,622 for the three months ended June 30, 2022. During the three months ended June 30, 2023 and 2022, $0 and $958,224, respectively, were from related party, BrewBilt Brewing. During the three months ended June 30, 2023, the company completed and delivered 5 jobs. One was a large job in the amount of $306,750, while the remaining 4 jobs averaged $11,400 per sale.

Cost of Sales:

The Company’s cost of sales was $227,318 for the three months ended June 30, 2023, compared to $693,097 for the three months ended June 30, 2022. The decrease is due to the BrewBilt Brewing job that was completed in Q2 2022.

Operating Expenses:

Operating expenses consisted primarily of consulting fees, professional fees, salaries and wages, office expenses and fees associated with preparing reports and SEC filings relating to being a public company. Operating expenses for the three months ended June 30, 2023 and June 30, 2022 were $305,678 and $416,843, respectively. The decrease is due to a decrease in consulting fees and general and administrative expenses.

Other Income (Expense):

Other income (expense) for the three months ended June 30, 2023 and June 30, 2022 was $1,106,313 and $(2,173,243), respectively. Other income (expense) consisted of gains on debt forgiveness, gains on debt settlement, gains or losses on derivative valuation, losses on conversion on preferred stock to common stock and interest expense. The gain or loss on derivative valuation is directly attributable to the change in fair value of the derivative liability. Interest expense is primarily attributable the initial interest expense associated with the valuation of derivative instruments at issuance and the accretion of the convertible debentures over their respective terms. The increase in other income primarily resulted from the fluctuation of the Company’s stock price which impacted the valuation of the derivative liabilities on the convertible debt.

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Net Profit (Loss):

Net profit (loss) for the three months ended June 30, 2023 was $927,526 compared with $(2,310,561) for the three months ended June 30, 2022. The increased profit is primarily due to the fluctuation of the Company’s stock price which impacted the valuation of the derivative liabilities on the convertible debt.

Results for the Six Months Ended June 30, 2023 Compared to the Six Months Ended June 30, 2022

Revenues:

The Company’s revenues were $706,550 for the six months ended June 30, 2023 compared to $983,922 for the six months ended June 30, 2022. During the six months ending June 30, 2023 and 2022, $32,856 and $958,224, respectively, were from a related party, BrewBilt Brewing. The increase in non-related party revenue is due to a large job completed in Q2 2023. The sales for the six months ended June 30, 2022 were primarily pass-through equipment, such as flow meters, whereas in 2023, the jobs included fabrication of equipment with longer production times. The decrease in related party revenue is due to a project in the amount of $957,344 being completed and delivered to BrewBilt Brewing in the second quarter of 2022.

Cost of Sales:

The Company’s cost of sales was $512,122 for the six months ended June 30, 2023, compared to $698,870 for the six months ended June 30, 2022. The decrease is due to the large BrewBilt Brewing job that was completed in Q2 2022.

Operating Expenses:

Operating expenses consisted primarily of consulting fees, professional fees, salaries and wages, office expenses and fees associated with preparing reports and SEC filings relating to being a public company. Operating expenses for the six months ended June 30, 2023 and June 30, 2022 were $1,426,337 and $1,018,624, respectively. The increase is due to an increase in professional fees and salaries and wages, specifically related to stock-based compensation pursuant to officer and director agreements.

Other Expense:

Other expense for the six months ended June 30, 2023 and June 30, 2022 was $815,457 and $3,651,078, respectively. Other expense consisted of losses on derivative valuation, losses on conversion on preferred stock to common stock and interest expense. The gain or loss on derivative valuation is directly attributable to the change in fair value of the derivative liability. Interest expense is primarily attributable the initial interest expense associated with the valuation of derivative instruments at issuance and the accretion of the convertible debentures over their respective terms. The decrease primarily resulted from the fluctuation of the Company’s stock price which impacted the valuation of the derivative liabilities on the convertible debt, and a decrease in losses on conversions of preferred stock.

Net Loss:

Net loss for the six months ended June 30, 2023 was $2,083,366 compared with $4,384,650 for the six months ended June 30, 2022. The decreased loss can is due to a gain on the change in fair value of derivative liabilities in the first quarter of 2023.

Liquidity and Capital Resources

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As of June 30, 2023, the Company has a shareholders’ deficit of $17,383,256 since its inception, working capital deficit of $3,370,622, negative cash flows from operations, and has limited business operations, which raises substantial doubt about the Company’s ability to continue as going concern. The ability of the Company to meet its commitments as they become payable is dependent on the ability of the Company to obtain necessary financing or achieving a profitable level of operations. There is no assurance the Company will be successful in achieving these goals.

	June 30, 2023			December 31, 2022
	$			$
Current Assets		841,590			1,209,027
Current Liabilities		4,212,212			5,409,983
Working Capital (Deficit)		(3,370,622	)		(4,200,956	)

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The overall working capital (deficit) decreased from $(4,200,956) at December 31, 2022 to $(3,370,622) at June 30, 2023 due to a decrease in deferred revenue and a decrease in derivative liabilities. 

The Company requires additional capital to fully execute its marketing program and increase revenues. There can be no assurance that continued funding will be available on satisfactory terms. We intend to raise additional capital through the sale of equity, loans, or other short-term financing options.

	June 30, 2023			June 30, 2022
	$			$
Cash Flows from (used in) Operating Activities		(402,110	)		(419,635	)
Cash Flows from (used in) Investing Activities		—			—
Cash Flows from (used in) Financing Activities		290,024			280,691
Net Increase (decrease) in Cash During Period		(112,086	)		(138,944	)

During the six months ended June 30, 2023, cash used in operating activities was $402,110 compared to $419,635 for the six months ended June 30, 2022. The variance primarily resulted from the change in fair value of derivative liabilities, a decrease in losses on conversions, and an increase in gains on debt forgiveness during the six months ended June 30, 2023.

During the six months ended June 30, 2023, cash from (used in) investing activities was $0 compared to $0 for the six months ended June 30, 2022.

During the six months ended June 30, 2023, cash from financing activities was $290,024 compared to $280,691 for the six months ended June 30, 2022. The increase in cash from financing activity is due to an increase in related party liabilities and a decrease in payments made to notes payable during the six months ended June 30, 2023.

Contractual Obligations

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Critical Accounting Policies and Estimates

The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments which are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of their evaluation form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions and circumstances. Our significant accounting policies are more fully discussed in the Notes to our Financial Statements, included herein.

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ITEM  3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A smaller reporting company is not required to provide the information required by this Item.

ITEM 4.  CONTROLS AND PROCEDURES

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our president and chief financial officer (our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president and chief financial officer (our principal executive officer, principal financial officer, and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president and chief financial officer (our principal executive officer, principal financial officer, and principal accounting officer) concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report. Our company is in the process of adopting specific internal control mechanisms to ensure effectiveness as we grow, and we will work to retain additional qualified individuals to ensure a proper segregation of duties. We have engaged an outside consultant to assist in adopting new measures to improve our internal controls. Future controls, among other things, will include more checks and balances and communication strategies between the management and the board, once we are able to secure additional board members, to ensure efficient and effective oversight over company activities as well as more stringent accounting policies to track and update our financial reporting.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company was served a complaint in the County of Nevada, State of California (Case No. CU0000567). BrewBilt Manufacturing Inc. is listed as a named defendant in this matter. The complaint involves the termination of employee Branford Samuels who was employed as a fabricator for BrewBilt Manufacturing Inc. and California.

Although, the total amount of loss cannot be reasonably estimated as the complaint does not state a definitive amount of relief requested monetarily, the complaint does relate that plaintiffs’ economic loss exceeds $50,000. Thus, any current estimate as to exposure should be in excess of that amount.

In addition, other possible amounts awarded such as attorney’ fees, are not possible to estimate at this time as such amount will not be disclosed until settlement discussions occur or until any post-trial motion to tax costs (if plaintiff were to prevail). It should be noted that discovery has not been completed and investigation is ongoing at this time. 

ITEM 1A.    RISK FACTORS

A smaller reporting company is not required to provide the information required by this Item.

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ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Quarterly Issuances

On March 30, 2023, Jef Lewis converted 8,000 shares of Series A Convertible Preferred stock valued at $80,000, in to 80,000,000 common shares. The issuance resulted in a loss on conversion of $944,000 based on the market price of the stock on that date, which was recorded to the statement of operations. The company rescinded this conversion and recorded an adjustment to reverse this transaction on April 1, 2023.

During the three months ended June 30, 2023, 14,613 shares of Series A Convertible Preferred stock were converted to 54,100,000 common shares in accordance with the conversion terms. The issuances resulted in a loss on conversion of $57,345 based on the market price of the stock on the date of issuance, which was recorded to the statement of operations.

During the three months ended June 30, 2023, the holders of a convertible notes converted $262,640 of principal, $70,723 of accrued interest and $16,290 in conversion fees into 234,303,609 shares of common stock. The common stock was valued at $370,943 based on the market price of the Company’s stock on the date of conversion, and a loss on conversion of $21,290 was recorded to the statement of operations.

In respect of the aforementioned convertible loan agreement(s) and the underlying shares,  as well as shares issued to a director and consultant, the Company will claim an exemption from the registration requirements of the Securities Act of 1933, as amended, for the issuance of the shares pursuant to Section 4(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transaction does not involve a public offering, the purchasers are “accredited investors” and/or qualified institutional buyers, the purchasers have access to information about the Company and its purchase, the purchasers will take the securities for investment and not resale.

Other than as disclosed above, there were no unregistered securities to report which were sold or issued by the Company without the registration of these securities under the Securities Act of 1933 in reliance on exemptions from such registration requirements, within the period covered by this report, which have not been previously included in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit Number
	Description
31.1	Certification of the Chief Executive Officer required under Rule 13a-14(a)/15d-14(a) of the Exchange Act*
31.2	Certification of the Chief Financial Officer required under Rule 13a-14(a)/15d-14(a) of the Exchange Act*
32.1	Certification of the Chief Executive Officer and Chief Financial Officer required under Section 1350 of the Exchange Act*
101.SCH	XBRL Taxonomy Extension Schema*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase*
101.DEF	XBRL Taxonomy Extension Definition Linkbase*
101.LAB	XBRL Taxonomy Extension Label Linkbase*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase*

* Filed herewith

27

 SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	BrewBilt Manufacturing Inc.
Date:  August 14, 2023	By: /s/ Jef Lewis
	Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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EX-31

Exhibit 31.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14

I, Jef Lewis, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of BrewBilt Manufacturing Inc.;

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 my 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 our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal 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.

Date: August 14, 2023

/s/ Jef Lewis

By: Jef Lewis

Its: Principal Executive Officer

EX-31

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13a-14

I, Jef Lewis, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of BrewBilt Manufacturing Inc.;

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 my 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 our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal 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.

Date: August 14, 2023

/s/ Jef Lewis

By: Jef Lewis

Its: Principal Financial Officer

EX-32

Exhibit 32.1

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 BrewBilt Manufacturing Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jef Lewis, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(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 result of operations of the Company.

/s/ Jef Lewis

By: Jef Lewis

Principal Executive Officer and Principal Financial Officer

Dated: August 14, 2023

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover - shares	6 Months Ended
	Jun. 30, 2023	Aug. 09, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	000-55787
Entity Registrant Name	BrewBilt Manufacturing Inc.
Entity Central Index Key	0001641751
Entity Tax Identification Number	84-4556545
Entity Incorporation, State or Country Code	FL
Entity Address, Address Line One	110 Spring Hill Drive #10
Entity Address, City or Town	Grass Valley
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95945
City Area Code	(530)
Local Phone Number	802-5023
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		581,572,673

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)		Jun. 30, 2023	Dec. 31, 2022
Current Assets
Cash			$ 112,086
Accounts receivable		56,084	100,996
Accounts receivable - related party		209,550	206,387
Earnings in excess of billings		364,373	590,746
Inventory		188,930	186,149
Prepaid expenses		22,653	12,663
Total current assets		841,590	1,209,027
Property, plant, and equipment, net		180,617	197,983
Intangibles, net		350,000	400,000
Right-of-use asset		133,850	158,021
Security deposit		16,980	16,980
Other assets		85,305	85,305
TOTAL ASSETS		1,608,342	2,067,316
Current Liabilities:
Accounts payable		818,879	678,398
Accrued interest		182,603	268,936
Accrued liabilities		368,804	306,003
Bank overdraft		734
Billings in excess of revenue		850,130	1,266,940
Current operating lease liabilities		50,854	49,171
Convertible notes payable, net of discount		825,975	966,538
Derivative liabilities		329,833	1,129,846
Loans payable		51,400
Liability for unissued shares		150,825	150,825
Promissory notes payable, net of discount		225,000	411,849
Related party liabilities		357,175	181,477
Total Current Liabilities		4,212,212	5,409,983
Non-current operating lease liabilities		82,996	108,850
Total Liabilities		4,295,208	5,518,833
Series A convertible preferred stock: $0.001 par value; 30,000,000 shares authorized 1,376,239 shares issued and outstanding at June 30, 2023 1,394,052 shares issued and outstanding at December 31, 2022		13,762,390	13,940,520
Convertible preferred stock payable		934,000	175,000
Commitments and contingencies
Stockholders’ Deficit:
Preferred stock, Series B: $0.001 par value; 1,000 shares authorized 1,000 shares issued and outstanding at June 30, 2023 1,000 shares issued and outstanding at December 31, 2022		1	1
Common stock, $0.001 par value; 30,000,000,000 authorized 309,222,673 shares issued and outstanding at June 30, 2023 6,791,045 shares issued and outstanding at December 31, 2022	[1]	309,223	6,791
Additional paid in capital		10,530,174	8,565,459
Retained earnings		(28,222,654)	(26,139,288)
Total stockholders’ deficit		(17,383,256)	(17,567,037)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT		$ 1,608,342	$ 2,067,316

[1] Common share amounts and per share amounts in the financial statements reflect the one-for-three hundred reverse stock split that was made effective on March 23, 2023.

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	30,000,000,000	30,000,000,000
Common Stock, Shares, Issued	309,222,673	6,791,045
Common Stock, Shares, Outstanding	309,222,673	6,791,045
Series A Preferred Stock [Member]
Preferred Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	30,000,000	30,000,000
Preferred Stock, Shares Issued	1,376,239	1,394,052
Preferred Stock, Shares Outstanding	1,376,239	1,394,052
Series B Preferred Stock [Member]
Preferred Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	1,000	1,000
Preferred Stock, Shares Issued	1,000	1,000
Preferred Stock, Shares Outstanding	1,000	1,000

XML

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - USD ($)		3 Months Ended		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Sales		$ 354,209	$ 14,398	$ 673,694	$ 25,698
Sales - related party			958,224	32,856	958,224
Cost of sales		227,318	693,097	512,122	698,870
Gross profit		126,891	279,525	194,428	285,052
Operating expenses:
Consulting fees		16,300	69,500	37,800	147,000
Depreciation and amortization		8,720	13,547	17,366	29,872
G&A expenses		88,998	202,925	215,292	364,685
Professional fees		42,603	6,382	88,857	30,676
Salaries and wages		149,057	124,489	1,103,022	446,391
Total operating expenses		305,678	416,843	1,462,337	1,018,624
Loss from operations		(178,787)	(137,318)	(1,267,909)	(733,572)
Other income (expense):
Other income			1	1	2
Gain on debt settlement			22,029		22,029
Gain on debt forgiveness				216,309
Derivative income (expense)		432,018	(1,893,753)	(339,262)	(1,802,925)
Loss on conversion of debt		(37,580)	(46,108)	(44,871)	(1,021,396)
Loss (gain) on conversion of debt of preferred stock		886,655	11,685	(82,545)	(109,872)
Interest expense		(174,780)	(267,097)	(565,089)	(738,916)
Total other expenses		1,106,313	(2,173,243)	(815,457)	(3,651,078)
Net profit (loss) before income taxes		927,526	(2,310,561)	(2,083,366)	(4,384,650)
Income tax expense
Net profit (loss)		$ 927,526	$ (2,310,561)	$ (2,083,366)	$ (4,384,650)
Per share information
Weighted number of common shares outstanding, basic, and diluted	[1]	109,563,951	323,894	65,725,758	222,542
Net profit (loss) per common share		$ 0.0085	$ (7.1337)	$ (0.0317)	$ (19.7026)

[1] Common share amounts and per share amounts in the financial statements reflect the one-for-three hundred reverse stock split that was made effective on March 23, 2023.

XML

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($)		Convertible Preferred Stock [Member] Series A Preferred Stock [Member]	Convertible Preferred Stock Shares Payable [Member]	Preferred Stock [Member] Series B Preferred Stock [Member]	Common Stock [Member]		Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2021		$ 13,297,170	$ 500,000	$ 1	$ 90		$ 2,515,308	$ (18,653,402)	$ (16,138,003)
Beginning Balance, Shares at Dec. 31, 2021		1,329,717		1,000	90,106	[1]
Conversion of convertible notes payable to stock					$ 42		1,341,974		1,342,016
Conversion of convertible notes payable to stock, Shares	[1]				42,052
Derivative settlements							521,712		521,712
Preferred stock converted to common stock		$ (237,200)			$ 10		358,747		358,757
Preferred stock converted to common stock, Shares		(23,720)			10,100	[1]
Preferred shares to be issued for services			150,000
Net loss								(2,074,089)	(2,074,089)
Preferred stock issued for services		$ 75,000
Preferred stock issued for services, Shares		7,500
Preferred stock payable converted to convertible preferred stock		$ 500,000	(500,000)
Preferred stock payable converted to convertible preferred stock, Shares		50,000
Ending balance, value at Mar. 31, 2022		$ 13,634,970	150,000	$ 1	$ 142		4,737,741	(20,727,491)	(15,989,607)
Ending Balance, Shares at Mar. 31, 2022		1,363,497		1,000	142,258	[1]
Beginning balance, value at Dec. 31, 2021		$ 13,297,170	500,000	$ 1	$ 90		2,515,308	(18,653,402)	(16,138,003)
Beginning Balance, Shares at Dec. 31, 2021		1,329,717		1,000	90,106	[1]
Net loss									(4,384,650)
Preferred stock issued to settle debt									105,000
Preferred stock issued for future advertising expenses									2,000,000
Ending balance, value at Jun. 30, 2022		$ 13,688,120	150,000	$ 1	$ 870		7,126,052	(23,038,052)	(15,911,129)
Ending Balance, Shares at Jun. 30, 2022		1,368,812		1,000	870,089	[1]
Beginning balance, value at Mar. 31, 2022		$ 13,634,970	150,000	$ 1	$ 142		4,737,741	(20,727,491)	(15,989,607)
Beginning Balance, Shares at Mar. 31, 2022		1,363,497		1,000	142,258	[1]
Conversion of convertible notes payable to stock					$ 27		92,912		92,939
Conversion of convertible notes payable to stock, Shares	[1]				26,353
Derivative settlements							215,935		215,935
Preferred stock converted to common stock		$ (2,051,850)			$ 688		2,039,477		2,040,165
Preferred stock converted to common stock, Shares		(205,185)			688,118	[1]
Rounding due to reverse stock split, Shares	[1]				27
Net loss								(2,310,561)	(2,310,561)
Common stock issued per agreement					$ 13		39,987		40,000
Common stock issued per agreement, Shares	[1]				13,333
Preferred stock issued to settle debt		$ 105,000
Preferred Stock issued to settle Debt, Shares		10,500
Preferred stock issued for future advertising expenses		$ 2,000,000
Preferred stock issued for future advertising expenses, Shares		200,000
Ending balance, value at Jun. 30, 2022		$ 13,688,120	150,000	$ 1	$ 870		7,126,052	(23,038,052)	(15,911,129)
Ending Balance, Shares at Jun. 30, 2022		1,368,812		1,000	870,089	[1]
Beginning balance, value at Dec. 31, 2022		$ 13,940,520	175,000	$ 1	$ 6,791		8,565,459	(26,139,288)	$ (17,567,037)
Beginning Balance, Shares at Dec. 31, 2022		1,394,052		1,000	6,791,045	[1]			6,791,045
Conversion of convertible notes payable to stock					$ 9,602		144,052		$ 153,654
Conversion of convertible notes payable to stock, Shares	[1]				9,602,210
Derivative settlements							1,193,815		1,193,815
Preferred stock converted to common stock		$ (112,000)			$ 84,000		997,200		1,081,200
Preferred stock converted to common stock, Shares		(11,200)			84,000,000	[1]
Preferred shares to be issued to officers and directors pursuant to agreements			750,000
Preferred shares to be issued for services			9,000
Cashless warrant exercise					$ 417		(417)
Cashless warrant exercise, Shares	[1]				416,666
Rounding due to reverse stock split, Shares	[1]				56
Net loss								(3,010,892)	(3,010,892)
Ending balance, value at Mar. 31, 2023		$ 13,828,520	934,000	$ 1	$ 100,810		10,900,109	(29,150,180)	(18,149,260)
Ending Balance, Shares at Mar. 31, 2023		1,382,852		1,000	100,809,977	[1]
Beginning balance, value at Dec. 31, 2022		$ 13,940,520	175,000	$ 1	$ 6,791		8,565,459	(26,139,288)	$ (17,567,037)
Beginning Balance, Shares at Dec. 31, 2022		1,394,052		1,000	6,791,045	[1]			6,791,045
Conversion of convertible notes payable to stock									$ 524,597
Conversion of convertible notes payable to stock, Shares					243,905,819
Cashless warrant exercise, Shares					416,667
Net loss									(2,083,366)
Preferred stock issued to settle debt
Preferred stock issued for future advertising expenses
Ending balance, value at Jun. 30, 2023		$ 13,762,390	934,000	$ 1	$ 309,223		10,530,174	(28,222,654)	$ (17,383,256)
Ending Balance, Shares at Jun. 30, 2023		1,376,239		1,000	309,222,673	[1]			309,222,673
Beginning balance, value at Mar. 31, 2023		$ 13,828,520	934,000	$ 1	$ 100,810		10,900,109	(29,150,180)	$ (18,149,260)
Beginning Balance, Shares at Mar. 31, 2023		1,382,852		1,000	100,809,977	[1]
Conversion of convertible notes payable to stock					$ 234,304		136,639		370,943
Conversion of convertible notes payable to stock, Shares	[1]				234,303,609
Derivative settlements							288,060		288,060
Preferred stock converted to common stock		$ (146,130)			$ 54,100		149,375		203,475
Preferred stock converted to common stock, Shares		(14,613)			54,100,000	[1]
Rounding due to reverse stock split, Shares	[1]				9,087
Net loss								927,526	927,526
Common stock converted to preferred stock		$ 80,000			$ (80,000)		(944,000)		(1,024,000)
Common stock converted to preferred stock, Shares		8,000			(80,000,000)	[1]
Ending balance, value at Jun. 30, 2023		$ 13,762,390	$ 934,000	$ 1	$ 309,223		$ 10,530,174	$ (28,222,654)	$ (17,383,256)
Ending Balance, Shares at Jun. 30, 2023		1,376,239		1,000	309,222,673	[1]			309,222,673

[1] Common share amounts and per share amounts in the financial statements reflect the one-for-three hundred reverse stock split that was made effective on March 23, 2023.

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net loss	$ (2,083,366)	$ (4,384,650)
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of convertible debt discount	405,631	544,271
Amortization of capitalized distribution fees	50,000	50,000
Change in derivative liability	339,262	1,802,925
Preferred stock issued for services		25,000
Preferred stock issued for advertising expenses		2,000,000
Gain on debt forgiveness	(216,309)
Gain on debt settlement		(22,029)
Depreciation and amortization of fixed assets	17,366	29,872
Loss on debt conversion	44,871	1,021,396
Loss on preferred stock conversion	82,545	109,872
Penalties on notes payable	44,848	66,488
Share based compensation	759,000	240,000
Decrease (increase) in operating assets
Accounts receivable	44,912	(3,250)
Accounts receivable - related party	(3,163)	(178,609)
Earnings in excess of billings	226,373	290,989
Inventory	(2,781)	(50,488)
Prepaid expenses	(9,990)	(964,378)
Other assets		(1,000,000)
Increase (decrease) in operating liabilities
Accounts payable	140,481	(47,038)
Accrued interest	112,219	119,746
Accrued liabilities	62,801	43,177
Billings in excess of revenues	(416,810)	(112,929)
Net cash (used in) provided by operating activities	(402,110)	(419,635)
Cash flows from investing activities
Property, plant and equipment, additions	0	0
Property, plant and equipment, reductions	0	0
Net cash (used in) provided by investing activities
Cash flows from financing activities:
Bank overdraft	734
Long term debt		151
Payments on convertible debt	(13,650)	(157,632)
Proceeds from convertible debt	80,690	208,000
Payments on loans payable	(33,848)
Proceeds from loans payable	80,400	170,000
Related party liabilities	175,698	60,172
Net cash (used in) provided for financing activities	290,024	280,691
Net increase (decrease) in cash	(112,086)	(138,944)
Cash, beginning of period	112,086	219,183
Cash, end of period		80,239
Supplemental disclosures of cash flow information:
Cash paid for income taxes
Cash paid for interest
Schedule of non-cash investing & financing activities
Stock issued for note payable conversion	479,726	413,559
Derivative settlements	1,481,875	737,647
Discount from derivative	342,600	66,001
Preferred stock converted to common stock	178,130	2,289,050
Preferred stock issued to settle liabilities		105,000
Cashless warrant exercise	$ 417

XML

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Description of Business

BrewBilt Manufacturing Inc., a Florida Corporation, designs and manufactures custom brewing and fermentation equipment for craft brewers dedicated to making specialty craft beer. BrewBilt brewhouses and tanks are fabricated by highly skilled local welders using best-in-class American stainless steel. 

BrewBilt’s proprietary systems are designed for talented brewer’s who proudly stand behind every pint of great beer. The company has spent 15 years designing brewhouse systems for hundreds of satisfied companies around the globe. Each brewery systems is customized for the customers needs. Our engineering and design team work closely with each customer in order to assure quality assurance and industry compliance.

BrewBilt hand-crafts high quality brewing systems that are designed around specific brewing needs. Built by talented craftsmen in Northern California using the finest American 304 stainless steel. Every BrewBilt product features superior efficiency with an intuitive ergonomic design. From our powerful 10-bbl Pub system up to a 120-bbl production system, BrewBilt is there every step of the way during the life of your brewery.

Retail dollar sales of craft beer increased 21%, to $26.8 billion, and now account for just under 27% of the $100 billion U.S. beer market (previously $94 billion). The primary reason for the larger dollar sales increase was the shift back in beer volume to bars and restaurants from packaged sales.

The number of operating craft breweries continued to climb in 2021, reaching an all-time high of 9,118, including 1,886 microbreweries, 3,307 brewpubs, 3,702 taproom breweries, and 223 regional craft breweries. The total operating brewery count was 9,247, up from 9,025 in 2020. Throughout the year, there were 646 new brewery openings. 

Financial Statement Presentation 

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

Business Combinations

As per ASC 805-50 a common-control transaction does not meet the definition of a business combination because there is no change in control over the net assets. The accounting for these transactions is addressed in the “Transactions Between Entities Under Common Control”. The net assets are derecognized by the transferring entity and recognized by the receiving entity at the historical cost of the parent of the entities under common control. Any difference between the proceeds transferred or received and the carrying amounts of the net assets is recognized in equity in the transferring and receiving entities’ separate financial statements and eliminated in consolidation. The change in accounting principle is applied retroactively for all periods presented.

Fiscal year end 

The Company has selected December 31 as its fiscal year end.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates.

Cash Equivalents

The Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents.

Revenue Recognition and Related Allowances

The Company recognizes revenue when obligations under the terms of a contract with its customer are satisfied; generally, this occurs with the transfer of control of its products. Revenue is measured as the amount of consideration expected to be received in exchange for transferring products. If the conditions for revenue recognition are not met, the Company defers the revenue and related cost of sales until all conditions are met. As of June 30, 2023 and December 31, 2022, the Company has deferred $850,130 and $1,266,940, respectively, in revenue, and $364,373 and $590,746 in cost of sales, respectively, related to customer orders in progress. These amounts are recorded as billings in excess of revenues and earnings in excess of billings in the accompanying balance sheets.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at the amount that management expects to collect from outstanding balances. Bad debts and allowances are provided based on historical experience and management’s evaluation of outstanding accounts receivable. Management evaluates past due or delinquency of accounts receivable based on the open invoices aged on due date basis. The allowance for doubtful accounts at June 30, 2023 and December 31, 2022 is $0.

Inventories

Inventories consist of raw materials, work in process and finished goods. Raw materials, which principally consist of raw stainless steel, raw stainless tubing, motors, pumps, and fittings, are stated at the lower of cost, determined on the first-in, first-out basis, or net realizable value. As of June 30, 2023 and December 31, 2022, the Company has inventory of $188,930 and $186,149, respectively.

Capitalized distribution fees

The Company records its intangible assets at cost in accordance with ASC 350, Intangibles – Goodwill and Other. The Company reviews the intangible assets for impairment on an annual basis or if events or changes in circumstances indicate it is more likely than not that they are impaired. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale, or disposition of a significant portion of the business, or other factors. If the review indicates the impairment, an impairment loss would be recorded for the difference of the value recorded and the new value. For the six months ended June 30, 2023, and year ended December 31, 2022, there were no impairment losses recognized for intangible assets. The Company amortizes the capitalized distribution fees over the five-year term of the underlying distribution agreement.

Impairment of Long-Lived Assets

The Company reviews long-lived assets, including definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount. If the operation is determined to be unable to recover the carrying amount of its assets, then these assets are written down first, followed by other long-lived assets of the operation to fair value. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. For the six months ended June 30, 2023 and the year ended December 31, 2022, there were no impairment losses recognized for long-lived assets.

Warranty

The Company is a manufacturer of products which are shipped to our customers directly from the Company. For products that are made from raw materials, the Company offers a 6-year limited warranty. The parts provided by outside vendors as finished goods that are added to a system produced by the Company as components, have a manufacturers’ warranty that is passed on to the end user of the complete system. To date, BrewBilt has spent less than $5,000 over the past 5 years for repairs (under warranty) on products they have built, with most of the costs going to cover travel and lodging expenses. As of June 30, 2023 and December 31, 2022, the Company has recorded a liability of $5,000 and $5,000, respectively, for warranties, which is included in accrued liabilities in the accompanying balance sheet.

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses are carried at amortized cost and represent liabilities for goods and services provided to the Company prior to the end of the fiscal year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.

In addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs is expanded. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, and which is determined by the lowest level input that is significant to the fair value measurement in its entirety.

These levels are:

Level 1 - inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

Level 2 - inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

Financial assets and liabilities measured at fair value on a recurring basis:

	Input		June 30, 2023		December 31, 2022
	Level		Fair Value		Fair Value
Derivative Liability		3	$	329,833	$	1,129,846
Total Financial Liabilities			$	329,833	$	1,129,846

In management’s opinion, the fair value of convertible notes payable and advances payable is approximate to carrying value as the interest rates and other features of these instruments approximate those obtainable for similar instruments in the current market. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, exchange or credit risks arising from these financial instruments. As of June 30, 2023 and December 31, 2022, the balances reported for cash, accounts receivable, prepaid expenses, accounts payable, and accrued liabilities, approximate the fair value because of their short maturities.

Convertible Instruments

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815 “Derivatives and Hedging”. ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument.”

ASC 815-40 “Derivatives and Hedging - Contracts in Entity’s Own Equity” provides that, among other things, generally, if an event is not within the entity’s control could or require net cash settlement, then the contract shall be classified as an asset or a liability.

Debt issuance costs and debt discounts

Debt issuance costs and debt discounts are being amortized over the lives of the related financings on a basis that approximates the effective interest method. Costs and discounts are presented as a reduction of the related debt in the accompanying consolidated balance sheets.

Income Taxes

The Company records deferred taxes in accordance with FASB ASC No. 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and loss carryforwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.

As of the date of this filing, the Company is not current in filing their tax returns. The last return filed by the Company was December 31, 2019, and the Company has not accrued any potential penalties or interest from that period forward. The Company will need to file returns for the year ending December 31, 2022, 2021, and 2020, which is still open for examination.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC Topic 718-10, Compensation-Stock Compensation and ASC Subtopic 505-50, Equity-Based Payments to Non-Employees. Stock-based compensation expense recognized during the requisite services period is based on the value of share-based payment awards after reduction for estimated forfeitures. Forfeitures are estimated at the time of grant and are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

During the six months ended June 30, 2023 and 2022, the Company had stock-based compensation expense recognized in its statements of operations of $759,000 and $240,000, respectively.

Basic and Diluted Loss Per Share

In accordance with ASC Topic 280 – “Earnings Per Share”, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period after giving retroactive effect to the reverse stock splits affected on April 28, 2022 and March 23, 2023 (see Note 17). Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

Recent Accounting Pronouncements

Although there were new accounting pronouncements issued or proposed by the FASB during the six months ending June 30, 2023 and through the date of filing of this report, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its financial position or results of operations.

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GOING CONCERN

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GOING CONCERN

NOTE 2 – GOING CONCERN

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As of June 30, 2023, the Company has a shareholders’ deficit of $17,383,256 since its inception, working capital deficit of $3,370,622, negative cash flows from operations, and has limited business operations, which raises substantial doubt about the Company’s ability to continue as going concern. The ability of the Company to meet its commitments as they become payable is dependent on the ability of the Company to obtain necessary financing or achieving a profitable level of operations. There is no assurance the Company will be successful in achieving these goals.

The Company does not have sufficient cash to fund its desired production for the next 12 months. The Company has arranged financing and intends to utilize the cash received to cover ongoing operational expenses. The Company plans to seek additional financing if necessary, in private or public equity offering(s) to secure future funding for operations. There can be no assurance the Company will be successful in raising additional funding. If the Company is not able to secure additional funding, the implementation of the Company’s business plan will be impaired. There can be no assurance that such additional financing will be available to the Company on acceptable terms or at all.

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PREPAID EXPENSES

6 Months Ended

Jun. 30, 2023

Prepaid Expenses

PREPAID EXPENSES

NOTE 3 - PREPAID EXPENSES

Prepaid fees represent amounts paid in advance for future contractual benefits to be received. Contracting expenses paid in advance are recorded as a prepaid asset and then amortized to the statements of operations when services are rendered, or over the life of the contract using the straight-line method.

As of June 30, 2023 and December 31, 2022, prepaid expenses consisted of the following:

	June 30,		December 31,
	2023		2022
Prepaid insurance expenses	$	22,653	$	12,663
	$	22,653	$	12,663

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PROPERTY AND EQUIPMENT

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at June 30, 2023 and December 31, 2022:

	June 30,			December 31,
	2023			2022
Computer Equipment	$	23,876		$	23,876
Leasehold Improvements		131,890			131,890
Machinery		352,187			352,187
Software		23,183			23,183
Vehicles		6,717			6,717
		537,853			537,853
Less accumulated amortization		(23,183	)		(23,183	)
Less accumulated depreciation		(334,053	)		(316,687	)
	$	180,617		$	197,983

During the six months ended June 30, 2023, the company recorded fixed assets additions of $0 and fixed asset proceeds of $0. Depreciation and amortization expenses of $17,366 and $29,872 were recorded to the statement of operations for the six months ended June 30, 2023 and 2022, respectively.

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LEASES

6 Months Ended

Jun. 30, 2023

Leases

LEASES

NOTE 5 – LEASES

The Company adopted the new lease guidance effective January 1, 2019 using the modified retrospective transition approach, applying the new standard to all of its leases existing at the date of initial application which is the effective date of adoption. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. We elected the package of practical expedients which permits us to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. We did not elect the hindsight practical expedient which permits entities to use hindsight in determining the lease term and assessing impairment. The adoption of the lease standard did not change our previously reported consolidated statements of operations and did not result in a cumulative catch-up adjustment to opening equity.

The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In calculating the present value of the lease payments, the Company elected to utilize its incremental borrowing rate based on the remaining lease terms as of the January 1, 2019 adoption date.

Operating Leases

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred, if any. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Our lease has a remaining lease term of 2.5 years.

The Company has elected the practical expedient to combine lease and non-lease components as a single component. The lease expense is recognized over the expected term on a straight-line basis. Operating leases are recognized on the balance sheet as right-of-use assets, current operating lease liabilities and non-current operating lease liabilities.

The new standard also provides practical expedients and certain exemptions for an entity’s ongoing accounting. We have elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases where the initial lease term is one year or less or for which the ROU asset at inception is deemed immaterial, we will not recognize ROU assets or lease liabilities. Those leases are expensed on a straight-line basis over the term of the lease.

On January 1, 2020, the Company entered into a standard office lease for approximately 8,000 square feet of space, located in the Wolf Creek Industrial Building at 110 Spring Hill Dr. #10 Grass Valley, CA 95945. The lease has a term of five years, from January 1, 2020 through December 31, 2025, with a monthly rent of $4,861.

As of June 30, 2023 and December 31, 2022, ROU assets and lease liabilities related to our operating lease is as follows:

	June 30,		December 31,
	2023		2022
Right-of-use assets	$	133,850	$	158,021
Current operating lease liabilities		50,854		49,171
Non-current operating lease liabilities		82,996		108,850

The following is a schedule, by years, of future minimum lease payments required under the operating lease:

Years Ending
December 31,	Operating Lease
2023		29,168
2024		58,334
2025		58,334
Total		145,836
Less imputed interest		11,986
Total liability	$	133,850

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INTANGIBLES

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLES

NOTE 6 – INTANGIBLES

On August 20, 2021, the company entered into an Exclusive Distribution Agreement with South Pacific Traders Oy. Pursuant to the agreement, the company issued 50,000 Series A Convertible Preferred stock at $10 per share. South Pacific Traders will market BrewBilt Manufacturing equipment to the European Community and United Kingdom. Management determined that the 50,000 Series A Convertible Preferred to be issued as consideration for the exclusive distribution agreement is a finite-lived intangible asset and will be amortized over the five year term of the agreement.

On January 17, 2022, the company issued 50,000 shares, and $500,000 was reclassified from Convertible Stock Payable to Series A Convertible Preferred Stock. During the six months ending June 30, 2023 and 2022, the company amortized $50,000 and $50,000, respectively, of the capitalized distribution fees to the statement of operations.

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ACCRUED LIABILITIES

6 Months Ended

Jun. 30, 2023

Accrued Liabilities

ACCRUED LIABILITIES

NOTE 7 – ACCRUED LIABILITIES

As of June 30, 2023 and December 31, 2022, accrued liabilities were comprised of the following:

Schedule of Accrued Liabilities 

	June 30,		December 31,
	2023		2022
Accrued liabilities
Accrued wages	$	41,094	$	31,294
Credit card		8,137		7,295
Payroll taxes		219,237		163,384
Sales tax payable		95,336		99,030
Warranty		5,000		5,000
Total accrued expenses	$	368,804	$	306,003

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BILLINGS IN EXCESS OF REVENUE AND EARNINGS IN EXCESS OF BILLINGS

6 Months Ended

Jun. 30, 2023

Billings In Excess Of Revenue And Earnings In Excess Of Billings

BILLINGS IN EXCESS OF REVENUE AND EARNINGS IN EXCESS OF BILLINGS

NOTE 8 – BILLINGS IN EXCESS OF REVENUE AND EARNINGS IN EXCESS OF BILLINGS

Billings in excess of revenue is related to contracted amounts that have been invoiced to customers for which remaining performance obligations must be completed before the Company can recognize the revenue. Earnings in excess of billings is related to the cost of sales associated with the customer jobs that are incomplete.

Changes in unearned revenue for the six months ended June 30, 2023 and the year ended December 31, 2022 were as follows:

	June 30,			December 31,
	2023			2022
Unearned revenue, beginning of the period	$	1,266,940		$	1,104,923
Billings in excess of revenue additions		289,408			1,565,019
Recognition of revenue		(706,218	)		(1,403,002	)
Unearned revenue, end of the period	$	850,130		$	1,266,940

As of June 30, 2023 and December 31, 2022, the Company has recorded $364,373 and $590,746, respectively, in earnings in excess of billings for the cost of sales related to customer orders in progress.

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CONVERTIBLE NOTES PAYABLE

6 Months Ended

Jun. 30, 2023

Convertible Notes Payable

CONVERTIBLE NOTES PAYABLE

NOTE 9 – CONVERTIBLE NOTES PAYABLE

As of June 30, 2023 and December 31, 2022, convertible notes payable were comprised of the following:

	Original		Original	Due	Interest	Conversion	June 30,			December 31,
	Note Amount		Note Date	Date	Rate	Rate	2023			2022
1800 Diagonal Lending		54,250	7/26/2022	7/26/2023	10%	Variable	$	—		$	54,250
Coventry Enterprises		200,000	6/9/2022	6/9/2023	10%	Variable		223,283			—
Emerging Corp Capital		110,000	10/31/2018	10/31/2019	24%	Variable		—			110,000
Fourth Man		110,000	10/3/2022	10/3/2023	12%	0.09		78,760			110,000
Mammoth Corp		33,000	11/19/2020	8/19/2021	18%	Variable		33,000			33,000
Mammoth Corp		60,000	12/30/2021	12/30/2022	18%	Variable		60,000			60,000
Mammoth Corp		26,800	03/21/22	12/21/22	18%	Variable		28,600			28,600
Mammoth Corp		20,000	2/27/2023	11/27/2023	0%	Variable		20,000			—
Mammoth Corp		24,000	4/3/2023	1/3/2024	0%	Variable		24,000			—
Mast Hill Fund		550,000	10/6/2021	10/6/2022	16%	135		193,860			422,387
Mast Hill Fund		65,000	8/8/2022	8/8/2023	12%	0.75		—			65,000
Pacific Pier Capital		28,000	2/27/2023	2/27/2024	12%	0.015		28,000			—
Pacific Pier Capital		35,650	4/5/2023	4/5/2024	15%	0.004		35,650			—
Tri-Bridge Ventures		240,000	5/6/2021	5/6/2022	10%	0.001		202,599			207,998
							$	927,752		$	1,091,235
Debt discount								(77,721	)		(97,853	)
Financing costs/Original issue discount								(24,056	)		(26,844	)
Convertible notes payable, net of discount							$	825,975		$	966,538

During the six months ending June 30, 2023, the Company received proceeds from new convertible notes of $80,690 and reclassified a promissory note in the amount of $200,000 to convertible notes payable due to the default terms. The default on the promissory note resulted in a default penalty of $40,000, which was recorded to the statement of operations. The Company recorded cash payments of $13,650 and conversions of $387,483 of convertible note principal. Convertible note principal in the amount of $110,000 was forgiven by a note holder, and the Company recorded a gain on forgiveness of debt of $110,000 to the statement of operations. The Company recorded loan fees on new convertible notes of $26,960, which increased the debt discounts recorded on the convertible notes during the six months ending June 30, 2023. Some of the Company’s convertible notes have a conversion rate that is variable, and therefore, the Company has accounted for their conversion features as derivative instruments (see Note 11). The Company also recorded amortization of $392,480 on their convertible note debt discounts and loan fees. As of June 30, 2023, the convertible notes payable are convertible into 1,152,940,218 shares of the Company’s common stock.

During the six months ended June 30, 2023, the Company recorded interest expense of $92,833, conversions of $92,243 and conversion fees of $21,540 on its convertible notes payable. The Company transferred $20,000 in accrued interest from a promissory note that was reclassified as a convertible promissory note due to default. Convertible note interest in the amount of $106,309 was forgiven by note holders, and the Company recorded a gain on forgiveness of debt of $106,309 to the statement of operations. As of June 30, 2023, the accrued interest balance was $96,022.

As of June 30, 2023, we have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities.

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PROMISSORY NOTES PAYABLE

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

PROMISSORY NOTES PAYABLE

NOTE 10 – PROMISSORY NOTES PAYABLE

As of June 30, 2023 and December 31, 2022, promissory notes payable were comprised of the following:

	Original		Original	Due	Interest	June 30,		December 31,
	Note Amount		Note Date	Date	Rate	2023		2022
Auctus Fund, LLC	$	50,000	1/5/2021	1/5/2022	16%	$	50,000	$	50,000
Auctus Fund, LLC		75,000	7/15/2021	7/15/2022	16%		75,000		75,000
Auctus Fund, LLC		100,000	9/14/2021	9/14/2022	16%		100,000		100,000
Coventry Enterprises, LLC		200,000	6/9/2022	6/9/2023	10%		—		200,000
						$	225,000	$	425,000
Financing costs/Original issue discount							—		(13,151	)
Promissory notes payable, net of discount						$	225,000	$	411,849

On January 5, 2021, the Company received funding pursuant to a promissory note in the amount of $50,000, of which, $39,000 was received in cash and $11,000 was recorded as transaction fees. The note bears interest of 12% (increases to 16% per annum upon an event of default) and matures on January 5, 2022. As of December 31, 2022, the company has amortized $11,000 of the financing costs to the statement of operations. As of June 30, 2023, the note has a principal balance of $50,000 and accrued interest of $17,858.

On July 15, 2021, the Company received funding pursuant to a promissory note in the amount of $75,000, of which $62,500 was received in cash and $12,500 was recorded as transaction fees. The note bears interest of 12% (increases to 16% per annum upon an event of default) and matures on July 15, 2022. As of December 31, 2022, the company has amortized $12,500 of the financing costs to the statement of operations. As of June 30, 2023, the note has a principal balance of $75,000 and accrued interest of $20,507.

On September 14, 2021, the Company received funding pursuant to a promissory note in the amount of $100,000, of which, $82,500 was received in cash and $17,500 was recorded as transaction fees. The note bears interest of 12% (increases to 16% per annum upon an event of default) and matures on September 14, 2022. As of December 31, 2022, the company has amortized $17,500 of the financing costs to the statement of operations. As of June 30, 2023, the note has a principal balance of $100,000 and accrued interest of $24,668.

On June 9, 2022, the Company received funding pursuant to a promissory note in the amount of $200,000, of which $170,000 was received in cash and $30,000 was recorded as transaction fees. The note bears interest of 10% (increases to 18% per annum upon an event of default), which is guaranteed and earned in full as of the issue date. The note matures on June 9, 2023. As of June 30, 2023, the company has amortized $30,000 of the financing costs to the statement of operations. On January 24, 2023, the Company defaulted on the note, and pursuant to the terms, the note became convertible, and the company reclassed $200,000 in principal and $20,000 in accrued interest to convertible notes payable.

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DERIVATIVE LIABIITIES

6 Months Ended

Jun. 30, 2023

Derivative Liabiities

DERIVATIVE LIABIITIES

NOTE 11 – DERIVATIVE LIABIITIES

During the six months ended June 30, 2023, the Company valued the embedded conversion feature of the convertible notes and warrants. The Company uses the Black-Scholes option pricing model to estimate fair value for those instruments convertible into common shares at inception, at conversion or extinguishment date, and at each reporting date.

The following table represents the Company’s derivative liability activity for the embedded conversion features for the six months ended June 30, 2023:

	Notes			Warrants			Total
Balance, beginning of period	$	1,088,633		$	41,213		$	1,129,846
Initial recognition of derivative liability		2,386,117			116,102			2,502,219
Derivative settlements		(1,456,834	)		(25,041	)		(1,481,875	)
Loss (gain) on derivative liability valuation		(1,690,789	)		(129,568	)		(1,820,357	)
Balance, end of period	$	327,127		$	2,706		$	329,833

Convertible Notes

The fair value at the commitment date for the convertible notes and the revaluation dates for the Company’s derivative liabilities were based upon the following management assumptions as of June 30, 2023:

	Valuation date
Expected dividends	0%
Expected volatility	356.36% - 411.95%
Expected term	.01 - 1 year
Risk free interest	4.27% - 5.81%

Warrants

We account for common stock purchase warrants as derivative liabilities and debt issuance costs on the balance sheet at fair value, and changes in fair value during the periods presented in the statement of operations, which is revalued at each balance sheet date subsequent to the initial issuance of the warrant. 

The fair value at the commitment date for the warrants and the revaluation dates for the Company’s derivative liabilities were based upon the following management assumptions as of June 30, 2023:

	Valuation date
Expected dividends	0%
Expected volatility	521.28% - 2498.90%
Expected term	1.97 – 5 years
Risk free interest	3.36% - 4.87%

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WARRANTS

6 Months Ended

Jun. 30, 2023

Warrants

WARRANTS

NOTE 12 – WARRANTS

A summary of warrant activity for the six months ended June 30, 2023 is as follows:

					Weighted-Average
			Weighted-Average		Remaining		Aggregate
Warrants	Shares		Exercise Price		Contractual Term		Intrinsic Value
Outstanding at December 31, 2022		524,841	$	1.99		4.66	$	—
Granted		4,031,667		—
Exercised		-50,452		—
Forfeited or expired		0		—
Outstanding at June 30, 2023		4,506,055	$	0.202		4.21	$	—
Exercisable at June 30, 2023		4,506,055	$	0.202		4.21	$	—

The aggregate intrinsic value in the preceding tables represents the total pre-tax intrinsic value, based on options with an exercise price that is higher than the Company’s market stock price of $0.0006 on June 30, 2023.

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RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2023

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 13 – RELATED PARTY TRANSACTIONS

Officer and Director Agreements

On January 1, 2023, the Company and Jef Lewis entered into a new Employee Agreement that includes the issuance of 15,000 Preferred Series A shares, and an annual salary of $250,000. Unpaid wages will accrue interest at 6% per annum and may be converted to Preferred Series A stock of the company at equal value and under the conversion guidelines of the Certificate of designation for Preferred Series A stock. Pursuant to this the agreement, the Company will issue $150,000 in Convertible Preferred Series A stock. As of the date of the report the shares have not been issued and are reported as Convertible preferred stock payable on the balance sheet.

On January 1, 2023, the Company and Bennett Buchanan entered into a new Employee Agreement that includes the issuance of 15,000 Preferred Series A shares, and an annual salary of $250,000. Unpaid wages will accrue interest at 6% per annum and may be converted to Preferred Series A stock of the company at equal value and under the conversion guidelines of the Certificate of designation for Preferred Series A stock. Pursuant to this the agreement, the Company will issue $150,000 in Convertible Preferred Series A stock. As of the date of the report the shares have not been issued and are reported as Convertible preferred stock payable on the balance sheet.

On January 1, 2023, the Company entered into a Directors Agreement with Jef Lewis for a term of one year. In exchange for serving in this capacity, the Company will issue 15,000 shares of Convertible Preferred Series A stock at a price of $10 per share. As of the date of the report the shares have not been issued and are reported as Convertible preferred stock payable on the balance sheet.

On January 1, 2023, the Company entered into a Directors Agreement with Sam Berry for a term of one year. In exchange for serving in this capacity, the Company will issue 15,000 shares of Convertible Preferred Series A stock at a price of $10 per share. As of the date of the report the shares have not been issued and are reported as Convertible preferred stock payable on the balance sheet.

On January 1, 2023, the Company entered into a Directors Agreement with Bennett Buchanan for a term of one year. In exchange for serving in this capacity, the Company will issue 15,000 shares of Convertible Preferred Series A stock at a price of $10 per share. As of the date of the report the shares have not been issued and are reported as Convertible preferred stock payable on the balance sheet.

Consulting Agreements

On June 19, 2019, the Company entered into a Consulting Agreement with Mr. Samuel Berry.  The agreement is for a term of one year and has been renewed each year upon mutual consent. Mr. Berry will receive an annual salary of $50,000, payable in quarterly installments at $12,500 per quarter. As of December 31, 2022, Mr. Berry had an unpaid balance of $153,167. During the six months ended June 30, 2023, the Company accrued $25,000 in fees in connection to his agreement. As of June 30, 2023, the Company owed Mr. Berry $178,167 in fees.

Advances

During the six months ended June 30, 2023 and the year ended December 31, 2022, $22,120 and $14,237, respectively, was advanced to the company by Jef Lewis.

BrewBilt Brewing Company

BrewBilt Brewing Company works closely with BrewBilt Manufacturing Inc., which is also located in Grass Valley, California, and led by CEO Jef Lewis. BrewBilt Manufacturing is supplying all necessary equipment to BrewBilt Brewing for its craft beer production.

During the years ending December 31, 2022 and December 31, 2021, Brewbilt Brewing Company made payments of $485,209 and $450,000, respectively, to BrewBilt Manufacturing for fabrication of a brewery system. As of December 31, 2022, the majority of the brewing equipment was completed and delivered to BrewBilt Brewing. The equipment that was delivered and put into use has a sales price of $1,086,246, which was recognized as related party sales on the statement of operations on the 10-K financial statements.

During the six months ended June 30, 2023, the company delivered equipment in the amount of $32,856 to BrewBilt Brewing which has been recognized as related party sales on the statement of operations.

The Company anticipates the remaining equipment will be complete and delivered within three to six months.

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CONVERTIBLE PREFERRED STOCK

6 Months Ended

Jun. 30, 2023

Convertible Preferred Stock

CONVERTIBLE PREFERRED STOCK

NOTE 14 – CONVERTIBLE PREFERRED STOCK

Series A Convertible Preferred Stock

On July 1, 2019, the Company filed a Certificate of Amendment to increase the number of authorized Series A Convertible Preferred Stock to 30,000,000, with a par value of $0.001.  Each share of Convertible Preferred Series A Stock shall have a value of $10 per share and will convert into common stock at the closing price of the common stock on the date of conversion.  The Series A stock shall have no voting rights on corporate matters, unless and until the Series A shares are converted into Common Shares, at which time they will have the same voting rights as all Common Shareholders have; their consent shall not be required for taking any corporate action.

On March 30, 2023, Jef Lewis converted 8,000 shares of Series A Convertible Preferred stock valued at $80,000, in to 80,000,000 common shares. The issuance resulted in a loss on conversion of $944,000 based on the market price of the stock on that date, which was recorded to the statement of operations. The company rescinded this conversion and recorded an adjustment to reverse this transaction on April 1, 2023.

During the six months ended June 30, 2023, 17,813 shares of Series A Convertible Preferred stock were converted to 58,100,000 common shares in accordance with the conversion terms. The issuances resulted in a loss on conversion of $82,545 based on the market price of the stock on the date of issuance, which was recorded to the statement of operations.

The Series A Convertible Preferred Stock has been classified outside of permanent equity and liabilities since it embodies a conditional obligation that the Company may settle by issuing a variable number of equity shares and the monetary value of the obligation is based on a fixed monetary amount known at inception. Each share of the Series A Convertible Preferred Stock has a fixed value of $10 per share, has no voting rights, and is convertible into common stock at closing market price on the date of conversion. The Company has recorded $13,762,390, which represents 1,376,239 Series A Convertible Preferred Stock at $10 per share, issued and outstanding as of June 30, 2023, outside of permanent equity and liabilities.

Preferred Stock Payable

On January 1, 2023, the company agreed to issue 15,000 Convertible Series A shares at $10 per share to Jef Lewis and Bennett Buchanan, pursuant to Employee Agreements.

On January 1, 2023, the company agreed to issue 15,000 Convertible Series A shares at $10 per share to Jef Lewis, Sam Berry, and Bennett Buchanan, pursuant to Directors Agreements.

During the six months ended June 30, 2023, the company agreed to issue 900 Convertible Series A shares at $10 per share to Christopher Bullock, pursuant to a Consulting Agreement.

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PREFERRED STOCK

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

PREFERRED STOCK

NOTE 15 – PREFERRED STOCK

On March 28, 2017, the Company filed an amendment to its articles of incorporation designating 20,000 shares of its authorized preferred stock, par value $0.001 as Series B Voting Preferred Stock.  The Series B Voting Preferred Stock shall have the right to vote the shares on any matter requiring shareholder approval on the basis of 4 times the votes of all the issued and outstanding shares of common stock, as well as any issued and outstanding preferred stock.

On November 22, 2019, President Jef Lewis was issued 1,000 Preferred Series B Control Shares, pursuant to his employee agreement dated November 22, 2019.

As of June 30, 2023, 1,000 Series B Preferred shares were authorized, of which 1,000 Series B shares were issued and outstanding.

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COMMON STOCK

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

COMMON STOCK

NOTE 16 – COMMON STOCK

On December 1, 2022, the Company approved the authorization of a one for three hundred reverse stock split of the Company’s outstanding shares of common stock. The reverse split was effective on March 23, 2023, and the financial statements have been retroactively adjusted to take this into account for all periods presented.

On March 30, 2023, Jef Lewis converted 8,000 shares of Series A Convertible Preferred stock valued at $80,000, in to 80,000,000 common shares. The issuance resulted in a loss on conversion of $944,000 based on the market price of the stock on that date, which was recorded to the statement of operations. The company rescinded this conversion and recorded an adjustment to reverse this transaction on April 1, 2023.

During the six months ended June 30, 2023, 17,813 shares of Series A Convertible Preferred stock were converted to 58,100,000 common shares in accordance with the conversion terms. The issuances resulted in a loss on conversion of $82,545 based on the market price of the stock on the date of issuance, which was recorded to the statement of operations.

During the six months ended June 30, 2023, warrant holders exercised the warrants and the Company issued 416,667 shares of common stock through a cashless exercise of the warrants in accordance with the conversion terms.

During the six months ended June 30, 2023, the holders of a convertible notes converted $387,483 of principal, $92,243 of accrued interest and $21,540 in conversion fees into 243,905,819 shares of common stock. The common stock was valued at $524,597 based on the market price of the Company’s stock on the date of conversion, and a loss on conversion of $44,871 was recorded to the statement of operations.

As of June 30, 2023, 30,000,000,000 were authorized, of which 309,222,673 shares are issued and outstanding.

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INCOME TAX

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAX

NOTE 17 – INCOME TAX

Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.

The deferred tax asset and the valuation allowance consist of the following at June 30, 2023:

	June 30,
	2023
Net operating loss	$	2,080,410
Statutory rate		21	%
Expected tax recovery		436,886
Change in valuation allowance		(436,886	)
Income tax provision	$	—
Components of deferred tax asset:
Non-capital tax loss carry-forwards		436,886
Less: valuation allowance		(436,886	)
Net deferred tax asset	$	—

As of the date of this filing, the Company is not current in filing their tax returns. The last return filed by the Company was December 31, 2019, and the Company has not accrued any potential penalties or interest from that period forward. The Company will need to file returns for the year ending December 31, 2022, 2021 and 2020, which is still open for examination.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 18 – COMMITMENTS AND CONTINGENCIES

Consulting Agreement

On August 1, 2022, the Company entered into a Consulting Agreement with Christopher Bullock as a sales representative in India. The term of the agreement is for two years and may be terminated or extended upon mutual agreement of both parties pursuant with a ninety-day written notice. Upon execution of the agreement, the Company agreed to issue $10,000 of Series A Convertible Preferred stock to the Consultant. The Consultant will receive a monthly fee of $3,000, to be paid Series A Convertible Preferred stock, and will receive a 2% commission on gross sales for all products sold in India. As of June 30, 2023, the shares have not been issued and $34,000 has been recorded to Convertible preferred stock payable on the balance sheet. As of March 31, 2023, the Company has terminated this agreement.

Operating Lease

On January 1, 2020, the Company entered into a new office lease for space located in the Wolf Creek Industrial Building at 110 Spring Hill Dr. #10 Grass Valley, CA 95945. The lease has a term of 5 years, from January 1, 2020 through December 31, 2025, with a monthly rent of $4,861.

Service Agreements

On June 12, 2018, the Company entered into a preventative maintenance service agreement with Atlas Copco Compressions LLC. The agreement is for a period of 5 years, at a cost of $145.13 per month.

On October 1, 2022, the Company entered into a Platform Account Contract with SRAX, Inc, whereby the Company agreed to pay $30,000 for access to the SRAX platform for a period of 12-months from the effective date. The platform access fee is non-cancelable and will be deemed fully earned on the effective date of the Agreement. In addition, the Company agrees to a deliverable purchase fee for marketing advisory services in the amount of $270,000 which is due on the effective date. All fees will be paid in Convertible Preferred Series A stock.

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 19 – SUBSEQUENT EVENTS

Subsequent Issuances

On July 5, 2023, the holder of a convertible note converted a total of $13,600 of principal and interest into 13,600,000 shares of our common stock.

On July 6, 2023, 137 shares of Series A Convertible Preferred stock was converted to 13,700,000 common shares in accordance with the conversion terms.

On July 7, 2023, the holder of a convertible note converted a total of $1,550 of principal and interest into 15,500,000 shares of our common stock.

On July 11, 2023, the holder of a convertible note converted a total of $1,700 of principal and fees into 17,000,000 shares of our common stock.

On July 14, 2023, the holder of a convertible note converted a total of $16,200 of principal and interest into 16,200,000 shares of our common stock.

On July 19, 2023, the holder of a convertible note converted a total of $1,850 of principal and interest into 18,500,000 shares of our common stock.

On July 19, 2023, 186 shares of Series A Convertible Preferred stock was converted to 18,600,000 common shares in accordance with the conversion terms.

On July 24, 2023, the holder of a convertible note converted a total of $21,200 of principal and interest into 21,200,000 shares of our common stock.

On July 25, 2023, the holder of a convertible note converted a total of $2,075 of principal and fees into 20,750,000 shares of our common stock.

On July 26, 2023, 226 shares of Series A Convertible Preferred stock was converted to 22,600,000 common shares in accordance with the conversion terms.

On July 28, 2023, the holder of a convertible note converted a total of $2,400 of principal and interest into 24,000,000 shares of our common stock.

On July 31, 2023, 188 shares of Series A Convertible Preferred stock was converted to 18,800,000 common shares in accordance with the conversion terms.

On August 2, 2023, the holder of a convertible note converted a total of $24,400 of principal and interest into 24,400,000 shares of our common stock.

On August 4, 2023, the holder of a convertible note converted a total of $2,750 of principal and fees into 27,500,000 shares of our common stock.

The Company has evaluated subsequent events pursuant to ASC Topic 855 and has determined that there are no additional subsequent events to disclose.

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Organization and Description of Business

Organization and Description of Business

BrewBilt Manufacturing Inc., a Florida Corporation, designs and manufactures custom brewing and fermentation equipment for craft brewers dedicated to making specialty craft beer. BrewBilt brewhouses and tanks are fabricated by highly skilled local welders using best-in-class American stainless steel. 

BrewBilt’s proprietary systems are designed for talented brewer’s who proudly stand behind every pint of great beer. The company has spent 15 years designing brewhouse systems for hundreds of satisfied companies around the globe. Each brewery systems is customized for the customers needs. Our engineering and design team work closely with each customer in order to assure quality assurance and industry compliance.

BrewBilt hand-crafts high quality brewing systems that are designed around specific brewing needs. Built by talented craftsmen in Northern California using the finest American 304 stainless steel. Every BrewBilt product features superior efficiency with an intuitive ergonomic design. From our powerful 10-bbl Pub system up to a 120-bbl production system, BrewBilt is there every step of the way during the life of your brewery.

Retail dollar sales of craft beer increased 21%, to $26.8 billion, and now account for just under 27% of the $100 billion U.S. beer market (previously $94 billion). The primary reason for the larger dollar sales increase was the shift back in beer volume to bars and restaurants from packaged sales.

The number of operating craft breweries continued to climb in 2021, reaching an all-time high of 9,118, including 1,886 microbreweries, 3,307 brewpubs, 3,702 taproom breweries, and 223 regional craft breweries. The total operating brewery count was 9,247, up from 9,025 in 2020. Throughout the year, there were 646 new brewery openings. 

Financial Statement Presentation

Financial Statement Presentation 

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

Business Combinations

Business Combinations

As per ASC 805-50 a common-control transaction does not meet the definition of a business combination because there is no change in control over the net assets. The accounting for these transactions is addressed in the “Transactions Between Entities Under Common Control”. The net assets are derecognized by the transferring entity and recognized by the receiving entity at the historical cost of the parent of the entities under common control. Any difference between the proceeds transferred or received and the carrying amounts of the net assets is recognized in equity in the transferring and receiving entities’ separate financial statements and eliminated in consolidation. The change in accounting principle is applied retroactively for all periods presented.

Fiscal year end

Fiscal year end 

The Company has selected December 31 as its fiscal year end.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates.

Cash Equivalents

Cash Equivalents

The Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents.

Revenue Recognition and Related Allowances

Revenue Recognition and Related Allowances

The Company recognizes revenue when obligations under the terms of a contract with its customer are satisfied; generally, this occurs with the transfer of control of its products. Revenue is measured as the amount of consideration expected to be received in exchange for transferring products. If the conditions for revenue recognition are not met, the Company defers the revenue and related cost of sales until all conditions are met. As of June 30, 2023 and December 31, 2022, the Company has deferred $850,130 and $1,266,940, respectively, in revenue, and $364,373 and $590,746 in cost of sales, respectively, related to customer orders in progress. These amounts are recorded as billings in excess of revenues and earnings in excess of billings in the accompanying balance sheets.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at the amount that management expects to collect from outstanding balances. Bad debts and allowances are provided based on historical experience and management’s evaluation of outstanding accounts receivable. Management evaluates past due or delinquency of accounts receivable based on the open invoices aged on due date basis. The allowance for doubtful accounts at June 30, 2023 and December 31, 2022 is $0.

Inventories

Inventories

Inventories consist of raw materials, work in process and finished goods. Raw materials, which principally consist of raw stainless steel, raw stainless tubing, motors, pumps, and fittings, are stated at the lower of cost, determined on the first-in, first-out basis, or net realizable value. As of June 30, 2023 and December 31, 2022, the Company has inventory of $188,930 and $186,149, respectively.

Capitalized distribution fees

Capitalized distribution fees

The Company records its intangible assets at cost in accordance with ASC 350, Intangibles – Goodwill and Other. The Company reviews the intangible assets for impairment on an annual basis or if events or changes in circumstances indicate it is more likely than not that they are impaired. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale, or disposition of a significant portion of the business, or other factors. If the review indicates the impairment, an impairment loss would be recorded for the difference of the value recorded and the new value. For the six months ended June 30, 2023, and year ended December 31, 2022, there were no impairment losses recognized for intangible assets. The Company amortizes the capitalized distribution fees over the five-year term of the underlying distribution agreement.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company reviews long-lived assets, including definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount. If the operation is determined to be unable to recover the carrying amount of its assets, then these assets are written down first, followed by other long-lived assets of the operation to fair value. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. For the six months ended June 30, 2023 and the year ended December 31, 2022, there were no impairment losses recognized for long-lived assets.

Warranty

Warranty

The Company is a manufacturer of products which are shipped to our customers directly from the Company. For products that are made from raw materials, the Company offers a 6-year limited warranty. The parts provided by outside vendors as finished goods that are added to a system produced by the Company as components, have a manufacturers’ warranty that is passed on to the end user of the complete system. To date, BrewBilt has spent less than $5,000 over the past 5 years for repairs (under warranty) on products they have built, with most of the costs going to cover travel and lodging expenses. As of June 30, 2023 and December 31, 2022, the Company has recorded a liability of $5,000 and $5,000, respectively, for warranties, which is included in accrued liabilities in the accompanying balance sheet.

Accounts Payable and Accrued Expenses

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses are carried at amortized cost and represent liabilities for goods and services provided to the Company prior to the end of the fiscal year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.

In addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs is expanded. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, and which is determined by the lowest level input that is significant to the fair value measurement in its entirety.

These levels are:

Level 1 - inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

Level 2 - inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

Financial assets and liabilities measured at fair value on a recurring basis:

	Input		June 30, 2023		December 31, 2022
	Level		Fair Value		Fair Value
Derivative Liability		3	$	329,833	$	1,129,846
Total Financial Liabilities			$	329,833	$	1,129,846

In management’s opinion, the fair value of convertible notes payable and advances payable is approximate to carrying value as the interest rates and other features of these instruments approximate those obtainable for similar instruments in the current market. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, exchange or credit risks arising from these financial instruments. As of June 30, 2023 and December 31, 2022, the balances reported for cash, accounts receivable, prepaid expenses, accounts payable, and accrued liabilities, approximate the fair value because of their short maturities.

Convertible Instruments

Convertible Instruments

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815 “Derivatives and Hedging”. ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument.”

ASC 815-40 “Derivatives and Hedging - Contracts in Entity’s Own Equity” provides that, among other things, generally, if an event is not within the entity’s control could or require net cash settlement, then the contract shall be classified as an asset or a liability.

Debt issuance costs and debt discounts

Debt issuance costs and debt discounts

Debt issuance costs and debt discounts are being amortized over the lives of the related financings on a basis that approximates the effective interest method. Costs and discounts are presented as a reduction of the related debt in the accompanying consolidated balance sheets.

Income Taxes

Income Taxes

The Company records deferred taxes in accordance with FASB ASC No. 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and loss carryforwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.

As of the date of this filing, the Company is not current in filing their tax returns. The last return filed by the Company was December 31, 2019, and the Company has not accrued any potential penalties or interest from that period forward. The Company will need to file returns for the year ending December 31, 2022, 2021, and 2020, which is still open for examination.

Stock-Based Compensation

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC Topic 718-10, Compensation-Stock Compensation and ASC Subtopic 505-50, Equity-Based Payments to Non-Employees. Stock-based compensation expense recognized during the requisite services period is based on the value of share-based payment awards after reduction for estimated forfeitures. Forfeitures are estimated at the time of grant and are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

During the six months ended June 30, 2023 and 2022, the Company had stock-based compensation expense recognized in its statements of operations of $759,000 and $240,000, respectively.

Basic and Diluted Loss Per Share

Basic and Diluted Loss Per Share

In accordance with ASC Topic 280 – “Earnings Per Share”, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period after giving retroactive effect to the reverse stock splits affected on April 28, 2022 and March 23, 2023 (see Note 17). Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Although there were new accounting pronouncements issued or proposed by the FASB during the six months ending June 30, 2023 and through the date of filing of this report, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its financial position or results of operations.

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Summary of the fair value of our derivative liabilities

Financial assets and liabilities measured at fair value on a recurring basis:

	Input		June 30, 2023		December 31, 2022
	Level		Fair Value		Fair Value
Derivative Liability		3	$	329,833	$	1,129,846
Total Financial Liabilities			$	329,833	$	1,129,846

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PREPAID EXPENSES (Tables)

6 Months Ended

Jun. 30, 2023

Prepaid Expenses

Schedule of Prepaid Expenses

As of June 30, 2023 and December 31, 2022, prepaid expenses consisted of the following:

	June 30,		December 31,
	2023		2022
Prepaid insurance expenses	$	22,653	$	12,663
	$	22,653	$	12,663

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PROPERTY AND EQUIPMENT (Tables)

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consisted of the following at June 30, 2023 and December 31, 2022:

	June 30,			December 31,
	2023			2022
Computer Equipment	$	23,876		$	23,876
Leasehold Improvements		131,890			131,890
Machinery		352,187			352,187
Software		23,183			23,183
Vehicles		6,717			6,717
		537,853			537,853
Less accumulated amortization		(23,183	)		(23,183	)
Less accumulated depreciation		(334,053	)		(316,687	)
	$	180,617		$	197,983

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LEASES (Tables)

6 Months Ended

Jun. 30, 2023

Leases

Schedule of Right of use of assets and lease liabilities

As of June 30, 2023 and December 31, 2022, ROU assets and lease liabilities related to our operating lease is as follows:

	June 30,		December 31,
	2023		2022
Right-of-use assets	$	133,850	$	158,021
Current operating lease liabilities		50,854		49,171
Non-current operating lease liabilities		82,996		108,850

Schedule of future minimum lease payments

The following is a schedule, by years, of future minimum lease payments required under the operating lease:

Years Ending
December 31,	Operating Lease
2023		29,168
2024		58,334
2025		58,334
Total		145,836
Less imputed interest		11,986
Total liability	$	133,850

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ACCRUED LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2023

Accrued Liabilities

Schedule of Accrued Liabilities

As of June 30, 2023 and December 31, 2022, accrued liabilities were comprised of the following:

Schedule of Accrued Liabilities 

	June 30,		December 31,
	2023		2022
Accrued liabilities
Accrued wages	$	41,094	$	31,294
Credit card		8,137		7,295
Payroll taxes		219,237		163,384
Sales tax payable		95,336		99,030
Warranty		5,000		5,000
Total accrued expenses	$	368,804	$	306,003

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BILLINGS IN EXCESS OF REVENUE AND EARNINGS IN EXCESS OF BILLINGS (Tables)

6 Months Ended

Jun. 30, 2023

Billings In Excess Of Revenue And Earnings In Excess Of Billings

Schedule of Changes in Unearned Revenues

Changes in unearned revenue for the six months ended June 30, 2023 and the year ended December 31, 2022 were as follows:

	June 30,			December 31,
	2023			2022
Unearned revenue, beginning of the period	$	1,266,940		$	1,104,923
Billings in excess of revenue additions		289,408			1,565,019
Recognition of revenue		(706,218	)		(1,403,002	)
Unearned revenue, end of the period	$	850,130		$	1,266,940

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PROMISSORY NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Schedule of Promissory Notes Payable

As of June 30, 2023 and December 31, 2022, promissory notes payable were comprised of the following:

	Original		Original	Due	Interest	June 30,		December 31,
	Note Amount		Note Date	Date	Rate	2023		2022
Auctus Fund, LLC	$	50,000	1/5/2021	1/5/2022	16%	$	50,000	$	50,000
Auctus Fund, LLC		75,000	7/15/2021	7/15/2022	16%		75,000		75,000
Auctus Fund, LLC		100,000	9/14/2021	9/14/2022	16%		100,000		100,000
Coventry Enterprises, LLC		200,000	6/9/2022	6/9/2023	10%		—		200,000
						$	225,000	$	425,000
Financing costs/Original issue discount							—		(13,151	)
Promissory notes payable, net of discount						$	225,000	$	411,849

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DERIVATIVE LIABIITIES (Tables)

6 Months Ended

Jun. 30, 2023

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Schedule of Activity of Derivative Liabilities

The following table represents the Company’s derivative liability activity for the embedded conversion features for the six months ended June 30, 2023:

	Notes			Warrants			Total
Balance, beginning of period	$	1,088,633		$	41,213		$	1,129,846
Initial recognition of derivative liability		2,386,117			116,102			2,502,219
Derivative settlements		(1,456,834	)		(25,041	)		(1,481,875	)
Loss (gain) on derivative liability valuation		(1,690,789	)		(129,568	)		(1,820,357	)
Balance, end of period	$	327,127		$	2,706		$	329,833

Convertible Debt Securities [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Schedule of Company’s derivative liabilities upon management assumption

The fair value at the commitment date for the convertible notes and the revaluation dates for the Company’s derivative liabilities were based upon the following management assumptions as of June 30, 2023:

	Valuation date
Expected dividends	0%
Expected volatility	356.36% - 411.95%
Expected term	.01 - 1 year
Risk free interest	4.27% - 5.81%

Warrant [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Schedule of Company’s derivative liabilities upon management assumption

The fair value at the commitment date for the warrants and the revaluation dates for the Company’s derivative liabilities were based upon the following management assumptions as of June 30, 2023:

	Valuation date
Expected dividends	0%
Expected volatility	521.28% - 2498.90%
Expected term	1.97 – 5 years
Risk free interest	3.36% - 4.87%

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WARRANTS (Tables)

6 Months Ended

Jun. 30, 2023

Warrants

Schedule of Warrant Activity

A summary of warrant activity for the six months ended June 30, 2023 is as follows:

					Weighted-Average
			Weighted-Average		Remaining		Aggregate
Warrants	Shares		Exercise Price		Contractual Term		Intrinsic Value
Outstanding at December 31, 2022		524,841	$	1.99		4.66	$	—
Granted		4,031,667		—
Exercised		-50,452		—
Forfeited or expired		0		—
Outstanding at June 30, 2023		4,506,055	$	0.202		4.21	$	—
Exercisable at June 30, 2023		4,506,055	$	0.202		4.21	$	—

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INCOME TAX (Tables)

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Schedule of Deferred Tax Assets and Valuation Allowance

The deferred tax asset and the valuation allowance consist of the following at June 30, 2023:

	June 30,
	2023
Net operating loss	$	2,080,410
Statutory rate		21	%
Expected tax recovery		436,886
Change in valuation allowance		(436,886	)
Income tax provision	$	—
Components of deferred tax asset:
Non-capital tax loss carry-forwards		436,886
Less: valuation allowance		(436,886	)
Net deferred tax asset	$	—

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Fair Value, Recurring [Member] - Derivative [Member] - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, Fair Value Disclosure	$ 329,833	$ 1,129,846
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, Fair Value Disclosure	$ 329,833	$ 1,129,846

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Billings in Excess of Cost	$ 850,130	$ 1,266,940	$ 1,266,940	$ 1,104,923
Costs in Excess of Billings	364,373		590,746
Inventory, Net	188,930		186,149
Standard Product Warranty Accrual, Current	5,000		$ 5,000
Share-Based Payment Arrangement, Noncash Expense	$ 759,000	$ 240,000

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GOING CONCERN (Details Narrative) - USD ($)	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Equity, Attributable to Parent	$ 17,383,256	$ 18,149,260	$ 17,567,037	$ 15,911,129	$ 15,989,607	$ 16,138,003
Working Capital Deficit	$ 3,370,622

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PREPAID EXPENSES (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Prepaid Expenses
Prepaid insurance expenses	$ 22,653	$ 12,663
Prepaid Expense	$ 22,653	$ 12,663

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PROPERTY AND EQUIPMENT (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 537,853	$ 537,853
Less accumulated amortization	(23,183)	(23,183)
Less accumulated depreciation	(334,053)	(316,687)
Property, Plant and Equipment, Net	180,617	197,983
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	23,876	23,876
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	131,890	131,890
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	352,187	352,187
Software Development [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	23,183	23,183
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 6,717	$ 6,717

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PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment, Additions			$ 0	$ 0
Property, Plant and Equipment, Disposals			0	0
Depreciation	$ 8,720	$ 13,547	$ 17,366	$ 29,872

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LEASES (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Leases
Right-of-use assets	$ 133,850	$ 158,021
Current operating lease liabilities	50,854	49,171
Non-current operating lease liabilities	$ 82,996	$ 108,850

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LEASES (Details 2) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Leases
2023	$ 29,168
2024	58,334
2025	58,334
Total	145,836
Less imputed interest	11,986
Total liability	$ 133,850	$ 158,021

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INTANGIBLES (Details Narrative) - USD ($)		3 Months Ended	6 Months Ended
	Jan. 17, 2023	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Preferred stock payable converted to convertible preferred stock
Amortization of Capitalized Distribution Fees			$ 50,000	$ 50,000
Convertible Preferred Stock [Member] | Series A Preferred Stock [Member]
Preferred stock payable converted to convertible preferred stock in shares	50,000	50,000
Preferred stock payable converted to convertible preferred stock	$ 500,000	$ 500,000

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ACCURED LIABILITIES (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Accrued liabilities
Accrued wages	$ 41,094	$ 31,294
Credit card	8,137	7,295
Payroll taxes	219,237	163,384
Sales tax payable	95,336	99,030
Warranty	5,000	5,000
Total accrued expenses	$ 368,804	$ 306,003

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BILLINGS IN EXCESS OF REVENUE AND EARNINGS IN EXCESS OF BILLINGS (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Billings In Excess Of Revenue And Earnings In Excess Of Billings
Unearned revenue, beginning of the period	$ 1,266,940	$ 1,104,923
Billings in excess of revenue additions	289,408	1,565,019
Recognition of revenue	(706,218)	(1,403,002)
Unearned revenue, end of the period	$ 850,130	$ 1,266,940

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BILLINGS IN EXCESS OF REVENUE AND EARNINGS IN EXCESS OF BILLINGS (Details Narrative) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Billings In Excess Of Revenue And Earnings In Excess Of Billings
Costs in Excess of Billings	$ 364,373	$ 590,746

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CONVERTIBLE NOTES PAYABLE (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Short-Term Debt [Line Items]
Long-Term Debt, Gross	$ 927,752
Long-Term Debt, Gross	1,091,235
Long-Term Debt, Gross	927,752		$ 1,091,235
Amortization of Debt Discount (Premium)	(77,721)	$ (97,853)
Financing costs./Original issue discount	(24,056)	$ (26,844)
Convertible Notes Payable, Current	825,975		966,538
Eighteen Hundred Diagonal Lending [Member]
Short-Term Debt [Line Items]
Debt Instrument, Face Amount	$ 54,250
Derivative, Inception Date	Jul. 26, 2022
Derivative, Contract End Date	Jul. 26, 2023
Derivative, Variable Interest Rate	10.00%
Long-Term Debt, Gross
Long-Term Debt, Gross	54,250
Long-Term Debt, Gross			54,250
Coventry Enterprises [Member]
Short-Term Debt [Line Items]
Debt Instrument, Face Amount	$ 200,000
Derivative, Inception Date	Jun. 09, 2022
Derivative, Contract End Date	Jun. 09, 2023
Derivative, Variable Interest Rate	10.00%
Long-Term Debt, Gross	$ 223,283
Long-Term Debt, Gross
Long-Term Debt, Gross	223,283
Emerging Corp Capital [Member]
Short-Term Debt [Line Items]
Debt Instrument, Face Amount	$ 110,000
Derivative, Inception Date	Oct. 31, 2018
Derivative, Contract End Date	Oct. 31, 2019
Derivative, Variable Interest Rate	24.00%
Long-Term Debt, Gross
Long-Term Debt, Gross	110,000
Long-Term Debt, Gross			110,000
Fourth Man [Member]
Short-Term Debt [Line Items]
Debt Instrument, Face Amount	$ 110,000
Derivative, Inception Date	Oct. 03, 2022
Derivative, Contract End Date	Oct. 03, 2023
Derivative, Variable Interest Rate	12.00%
Long-Term Debt, Gross	$ 78,760
Long-Term Debt, Gross	110,000
Long-Term Debt, Gross	78,760		110,000
Mammoth Corp #1 [Member]
Short-Term Debt [Line Items]
Debt Instrument, Face Amount	$ 33,000
Derivative, Inception Date	Nov. 19, 2020
Derivative, Contract End Date	Aug. 19, 2021
Derivative, Variable Interest Rate	18.00%
Long-Term Debt, Gross	$ 33,000
Long-Term Debt, Gross	33,000
Long-Term Debt, Gross	33,000		33,000
Mammoth Corp #2 [Member]
Short-Term Debt [Line Items]
Debt Instrument, Face Amount	$ 60,000
Derivative, Inception Date	Dec. 30, 2021
Derivative, Contract End Date	Dec. 30, 2022
Derivative, Variable Interest Rate	18.00%
Long-Term Debt, Gross	$ 60,000
Long-Term Debt, Gross	60,000
Long-Term Debt, Gross	60,000		60,000
Mammoth Corp 3 [Member]
Short-Term Debt [Line Items]
Debt Instrument, Face Amount	$ 26,800
Derivative, Inception Date	Mar. 21, 2022
Derivative, Contract End Date	Dec. 21, 2022
Derivative, Variable Interest Rate	18.00%
Long-Term Debt, Gross	$ 28,600
Long-Term Debt, Gross	28,600
Long-Term Debt, Gross	28,600		28,600
Mammoth Corp 4 [Member]
Short-Term Debt [Line Items]
Debt Instrument, Face Amount	$ 20,000
Derivative, Inception Date	Feb. 27, 2023
Derivative, Contract End Date	Nov. 27, 2023
Derivative, Variable Interest Rate	0.00%
Long-Term Debt, Gross	$ 20,000
Long-Term Debt, Gross
Long-Term Debt, Gross	20,000
Mammoth Corp 5 [Member]
Short-Term Debt [Line Items]
Debt Instrument, Face Amount	$ 24,000
Derivative, Inception Date	Apr. 03, 2023
Derivative, Contract End Date	Jan. 03, 2024
Derivative, Variable Interest Rate	0.00%
Long-Term Debt, Gross	$ 24,000
Long-Term Debt, Gross
Long-Term Debt, Gross	24,000
Mast Hill Fund 1 [Member]
Short-Term Debt [Line Items]
Debt Instrument, Face Amount	$ 550,000
Derivative, Inception Date	Oct. 06, 2021
Derivative, Contract End Date	Oct. 06, 2022
Derivative, Variable Interest Rate	16.00%
Long-Term Debt, Gross	$ 193,860
Long-Term Debt, Gross	422,387
Long-Term Debt, Gross	193,860		422,387
Mast Hill Fund 2 [Member]
Short-Term Debt [Line Items]
Debt Instrument, Face Amount	$ 65,000
Derivative, Inception Date	Aug. 08, 2022
Derivative, Contract End Date	Aug. 08, 2023
Derivative, Variable Interest Rate	12.00%
Long-Term Debt, Gross
Long-Term Debt, Gross	65,000
Long-Term Debt, Gross			65,000
Pacific Pier Capital 1 [Member]
Short-Term Debt [Line Items]
Debt Instrument, Face Amount	$ 28,000
Derivative, Inception Date	Feb. 27, 2023
Derivative, Contract End Date	Feb. 27, 2024
Derivative, Variable Interest Rate	12.00%
Long-Term Debt, Gross	$ 28,000
Long-Term Debt, Gross
Long-Term Debt, Gross	28,000
Pacific Pier Capital 2 [Member]
Short-Term Debt [Line Items]
Debt Instrument, Face Amount	$ 35,650
Derivative, Inception Date	Apr. 05, 2023
Derivative, Contract End Date	Apr. 05, 2024
Derivative, Variable Interest Rate	15.00%
Long-Term Debt, Gross	$ 35,650
Long-Term Debt, Gross
Long-Term Debt, Gross	35,650
Tri Bridge [Member]
Short-Term Debt [Line Items]
Debt Instrument, Face Amount	$ 240,000
Derivative, Inception Date	May 06, 2021
Derivative, Contract End Date	May 06, 2022
Derivative, Variable Interest Rate	10.00%
Long-Term Debt, Gross	$ 202,599
Long-Term Debt, Gross	207,998
Long-Term Debt, Gross	$ 202,599		$ 207,998

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CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Convertible Notes Payable
Proceeds from Convertible Debt	$ 80,690	$ 208,000
Change in Debt Discount Recorded	$ 26,960
Shares Issued for Convertible Notes Payable, Shares	1,152,940,218
Interest Expense, Long-Term Debt	$ 92,833
Interest Receivable	$ 96,022

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PROMISSORY NOTES PAYABLE (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022	Jun. 09, 2022	Sep. 14, 2021	Jul. 15, 2021	Jan. 05, 2021
Short-Term Debt [Line Items]
Convertible Notes Payable	$ 225,000
Convertible Notes Payable	425,000
Convertible Notes Payable	225,000	$ 425,000
Debt Issuance Costs, Net	0	13,151
Debt Issuance Costs, Net	0	(13,151)
Notes Payable, Current	225,000	411,849
Convertible Notes Payable 1 [Member]
Short-Term Debt [Line Items]
Convertible Debt	$ 50,000
Debt Instrument, Issuance Date	Jan. 05, 2021
Debt Instrument, Maturity Date	Jan. 05, 2022
Debt, Weighted Average Interest Rate	16.00%
Convertible Notes Payable	$ 50,000
Convertible Notes Payable	50,000
Convertible Notes Payable	50,000	50,000
Debt Issuance Costs, Net						$ 11,000
Debt Issuance Costs, Net						$ (11,000)
Convertible Notes Payable 2 [Member]
Short-Term Debt [Line Items]
Convertible Debt	$ 75,000
Debt Instrument, Issuance Date	Jul. 15, 2021
Debt Instrument, Maturity Date	Jul. 15, 2022
Debt, Weighted Average Interest Rate	16.00%
Convertible Notes Payable	$ 75,000
Convertible Notes Payable	75,000
Convertible Notes Payable	75,000	75,000
Debt Issuance Costs, Net					$ 12,500
Debt Issuance Costs, Net					$ (12,500)
Convertible Notes Payable 3 [Member]
Short-Term Debt [Line Items]
Convertible Debt	$ 100,000
Debt Instrument, Issuance Date	Sep. 14, 2021
Debt Instrument, Maturity Date	Sep. 14, 2022
Debt, Weighted Average Interest Rate	16.00%
Convertible Notes Payable	$ 100,000
Convertible Notes Payable	100,000
Convertible Notes Payable	100,000	100,000
Debt Issuance Costs, Net				$ 17,500
Debt Issuance Costs, Net				$ (17,500)
Convertible Notes Payable 4 [Member]
Short-Term Debt [Line Items]
Convertible Debt	$ 200,000
Debt Instrument, Issuance Date	Jun. 09, 2022
Debt Instrument, Maturity Date	Jun. 09, 2023
Debt, Weighted Average Interest Rate	10.00%
Convertible Notes Payable
Convertible Notes Payable	200,000
Convertible Notes Payable		$ 200,000
Debt Issuance Costs, Net			$ 30,000
Debt Issuance Costs, Net			$ (30,000)

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PROMISSORY NOTES PAYABLE (Details Narrative) - USD ($)					6 Months Ended
	Jun. 09, 2022	Sep. 14, 2021	Jul. 15, 2021	Jan. 05, 2021	Jun. 30, 2023	Dec. 31, 2022
Short-Term Debt [Line Items]
Debt Issuance Costs, Net					$ 0	$ 13,151
Convertible Notes Payable					225,000	425,000
Convertible Notes Payable 1 [Member]
Short-Term Debt [Line Items]
Convertible Debt				$ 50,000	50,000
Proceeds from Notes Payable				39,000
Debt Issuance Costs, Net				$ 11,000
Convertible Notes Payable					50,000	50,000
Accured Interest on Notes Payable					17,858
Convertible Notes Payable 2 [Member]
Short-Term Debt [Line Items]
Convertible Debt			$ 75,000		75,000
Proceeds from Notes Payable			62,500
Debt Issuance Costs, Net			$ 12,500
Convertible Notes Payable					75,000	75,000
Accured Interest on Notes Payable					20,507
Amortization of Debt Issuance Costs					12,500
Convertible Notes Payable 3 [Member]
Short-Term Debt [Line Items]
Convertible Debt		$ 100,000			100,000
Proceeds from Notes Payable		82,500
Debt Issuance Costs, Net		$ 17,500
Convertible Notes Payable					100,000	100,000
Accured Interest on Notes Payable					24,668
Amortization of Debt Issuance Costs					17,500
Convertible Notes Payable 4 [Member]
Short-Term Debt [Line Items]
Convertible Debt	$ 200,000				200,000
Proceeds from Notes Payable	170,000
Debt Issuance Costs, Net	$ 30,000
Convertible Notes Payable						200,000
Accured Interest on Notes Payable						$ 20,000
Amortization of Debt Issuance Costs					$ 30,000

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DERIVATIVE LIABILITIES (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Balance, beginning of period	$ 1,129,846
Initial recognition of derivative liability	2,502,219
Derivative settlements	(1,481,875)	$ (737,647)
Loss (gain) on derivative liability valuation	(1,820,357)
Balance, end of period	329,833
Convertible Debt Securities [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Balance, beginning of period	1,088,633
Initial recognition of derivative liability	2,386,117
Derivative settlements	(1,456,834)
Loss (gain) on derivative liability valuation	(1,690,789)
Balance, end of period	327,127
Warrant [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Balance, beginning of period	41,213
Initial recognition of derivative liability	116,102
Derivative settlements	(25,041)
Loss (gain) on derivative liability valuation	(129,568)
Balance, end of period	$ 2,706

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DERIVATIVE LIABILITIES (Details 2) - Convertible Debt Securities [Member]	6 Months Ended
	Jun. 30, 2023
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Dividend Rate	0.00%
Minimum [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate	356.36%
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term	4 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	4.27%
Maximum [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate	411.95%
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term	1 year
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	5.81%

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DERIVATIVE LIABILITIES (Details 3) - Warrant [Member]	6 Months Ended
	Jun. 30, 2023
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Dividend Rate	0.00%
Minimum [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate	521.28%
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term	1 year 11 months 19 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	3.36%
Maximum [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate	2498.90%
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term	5 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	4.87%

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WARRANTS (Details) - Warrant [Member] - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number, Beginning Balance	524,841
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning Balance	$ 1.99
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	4 years 2 months 16 days	4 years 7 months 28 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross	4,031,667
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period	(50,452)
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures and Expirations in Period	0
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number, Ending Balance	4,506,055	524,841
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance	$ 0.202	$ 1.99
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Number	4,506,055
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 0.202
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	4 years 2 months 16 days

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RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)		3 Months Ended		6 Months Ended
	Jan. 01, 2023	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Related Party Transaction [Line Items]
Consulting fees		$ 16,300	$ 69,500	$ 37,800	$ 147,000
Jef Lewis
Related Party Transaction [Line Items]
Preferred Stock, Shares Issued	15,000
Salary and Wage, Officer, Excluding Cost of Good and Service Sold	$ 250,000
Bennett Buchanan
Related Party Transaction [Line Items]
Preferred Stock, Shares Issued	15,000
Salary and Wage, Officer, Excluding Cost of Good and Service Sold	$ 250,000
Sam Berry
Related Party Transaction [Line Items]
Preferred Stock, Shares Issued	15,000
Due to Other Related Parties		$ 178,167		$ 178,167
Sam Berry | Consultant Agreement [Member]
Related Party Transaction [Line Items]
Consulting fees					50,000
Consulting Fees Payable Quartely					$ 12,500

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CONVERTIBLE PREFERRED STOCK (Details Narrative) - USD ($)				3 Months Ended				6 Months Ended
		Jun. 30, 2023	Mar. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022	Jan. 01, 2023	Dec. 31, 2022	Jul. 01, 2019
Loss On Series A Conversion				$ (886,655)		$ (11,685)		$ 82,545	$ 109,872
Jef Lewis
Preferred Stock, Shares Issued										15,000
Bennett Buchanan
Preferred Stock, Shares Issued										15,000
Sam Berry
Preferred Stock, Shares Issued										15,000
Series A Preferred Stock [Member]
Preferred Stock, Shares Authorized		30,000,000		30,000,000				30,000,000			30,000,000
Preferred Stock, Par or Stated Value Per Share		$ 0.001		$ 0.001				$ 0.001			$ 0.001
Preferred Stock, Shares Outstanding		1,376,239		1,376,239				1,376,239			1,394,052
Preferred Stock, Shares Issued		1,376,239		1,376,239				1,376,239			1,394,052
Convertible Preferred Stock [Member] | Series A Preferred Stock [Member]
Preferred Stock, Shares Authorized												30,000,000
Preferred Stock, Par or Stated Value Per Share												$ 0.001
Preferred Stock converted to Common Stock, Shares		17,813		14,613	11,200	205,185	23,720
Preferred Stock converted to Common Stock, Shares		(17,813)		(14,613)	(11,200)	(205,185)	(23,720)
Convertible Preferred Stock [Member] | Series A Preferred Stock [Member] | Jef Lewis
Preferred Stock converted to Common Stock, Shares			8,000
Preferred Stock converted to Common Stock, Shares			(8,000)
Common Stock [Member]
Preferred Stock converted to Common Stock, Shares	[1]			(54,100,000)	(84,000,000)	(688,118)	(10,100)
Preferred Stock converted to Common Stock, Shares	[1]			54,100,000	84,000,000	688,118	10,100
Common Stock [Member] | Jef Lewis
Preferred Stock converted to Common Stock, Shares		(58,100,000)	(80,000,000)
Preferred Stock converted to Common Stock, Shares		58,100,000	80,000,000

[1] Common share amounts and per share amounts in the financial statements reflect the one-for-three hundred reverse stock split that was made effective on March 23, 2023.

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PREFERRED STOCK (Details Narrative) - shares	Mar. 28, 2017	Jun. 30, 2023	Jan. 01, 2023	Dec. 31, 2022	Nov. 22, 2019
Jef Lewis
Class of Stock [Line Items]
Preferred Stock, Shares Issued			15,000
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Preferred Stock, Shares Authorized	20,000	1,000		1,000
Preferred Stock, Voting Rights	The Series B Voting Preferred Stock shall have the right to vote the shares on any matter requiring shareholder approval on the basis of 4 times the votes of all the issued and outstanding shares of common stock, as well as any issued and outstanding preferred stock.
Preferred Stock, Shares Issued		1,000		1,000
Preferred Stock, Shares Outstanding		1,000		1,000
Series B Preferred Stock [Member] | Jef Lewis
Class of Stock [Line Items]
Preferred Stock, Shares Issued					1,000

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COMMON STOCK (Details Narrative) - USD ($)					3 Months Ended								6 Months Ended
		Jun. 30, 2023	Mar. 30, 2023	Dec. 01, 2022	Jun. 30, 2023		Mar. 31, 2023		Jun. 30, 2022		Mar. 31, 2022		Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stockholders' Equity, Reverse Stock Split				On December 1, 2022, the Company approved the authorization of a one for three hundred reverse stock split of the Company’s outstanding shares of common stock.
Debt Conversion, Converted Instrument, Amount					$ 370,943		$ 153,654		$ 92,939		$ 1,342,016		$ 524,597
Loss On Conversion Of Debt					$ 37,580				$ 46,108				$ 44,871	$ 1,021,396
Common Stock, Shares Authorized		30,000,000,000			30,000,000,000								30,000,000,000		30,000,000,000
Common Stock, Shares, Issued		309,222,673			309,222,673								309,222,673		6,791,045
Common Stock, Shares, Outstanding		309,222,673			309,222,673								309,222,673		6,791,045
Convertible Preferred Stock [Member] | Series A Preferred Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Preferred Stock converted to Common Stock, Shares		17,813			14,613		11,200		205,185		23,720
Preferred Stock converted to Common Stock, Shares		(17,813)			(14,613)		(11,200)		(205,185)		(23,720)
Debt Conversion, Converted Instrument, Amount
Common Stock, Shares, Outstanding		1,376,239			1,376,239		1,382,852		1,368,812		1,363,497		1,376,239	1,368,812	1,394,052	1,329,717
Convertible Preferred Stock [Member] | Series A Preferred Stock [Member] | Jef Lewis
Accumulated Other Comprehensive Income (Loss) [Line Items]
Preferred Stock converted to Common Stock, Shares			8,000
Preferred Stock converted to Common Stock, Shares			(8,000)
Common Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Preferred Stock converted to Common Stock, Shares	[1]				(54,100,000)		(84,000,000)		(688,118)		(10,100)
Preferred Stock converted to Common Stock, Shares	[1]				54,100,000		84,000,000		688,118		10,100
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period							416,666	[1]					416,667
Debt Conversion, Converted Instrument, Shares Issued					234,303,609	[1]	9,602,210	[1]	26,353	[1]	42,052	[1]	243,905,819
Debt Conversion, Converted Instrument, Amount					$ 234,304		$ 9,602		$ 27		$ 42
Common Stock, Shares, Outstanding	[1]	309,222,673			309,222,673		100,809,977		870,089		142,258		309,222,673	870,089	6,791,045	90,106
Common Stock [Member] | Jef Lewis
Accumulated Other Comprehensive Income (Loss) [Line Items]
Preferred Stock converted to Common Stock, Shares		(58,100,000)	(80,000,000)
Preferred Stock converted to Common Stock, Shares		58,100,000	80,000,000

[1] Common share amounts and per share amounts in the financial statements reflect the one-for-three hundred reverse stock split that was made effective on March 23, 2023.

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INCOME TAX (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Net operating loss	$ 2,080,410		$ 2,080,410
Statutory rate			21.00%
Expected tax recovery			$ 436,886
Change in valuation allowance			(436,886)
Income tax provision
Components of deferred tax asset:
Non-capital tax loss carry-forwards	436,886		436,886
Less: valuation allowance	(436,886)		(436,886)
Net deferred tax asset

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COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)		1 Months Ended
	Jan. 01, 2020	Jan. 31, 2020	Jan. 02, 2020
Commitments and Contingencies Disclosure [Abstract]
Lessor, Operating Lease, Description	Wolf Creek Industrial Building at 110 Spring Hill Dr. #10 Grass Valley, CA 95945
Lessor, Operating Lease, Term of Contract			5 years
Payments for Rent		$ 4,861

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SUBSEQUENT EVENTS (Details Narrative) - USD ($)																3 Months Ended								6 Months Ended
		Aug. 04, 2023	Aug. 02, 2023	Jul. 31, 2023	Jul. 28, 2023	Jul. 26, 2023	Jul. 25, 2023	Jul. 24, 2023	Jul. 19, 2023	Jul. 14, 2023	Jul. 11, 2023	Jul. 07, 2023	Jul. 06, 2023	Jul. 05, 2023	Jun. 30, 2023	Jun. 30, 2023		Mar. 31, 2023		Jun. 30, 2022		Mar. 31, 2022		Jun. 30, 2023
Subsequent Event [Line Items]
Debt Conversion, Converted Instrument, Amount																$ 370,943		$ 153,654		$ 92,939		$ 1,342,016		$ 524,597
Common Stock [Member]
Subsequent Event [Line Items]
Debt Conversion, Converted Instrument, Amount																$ 234,304		$ 9,602		$ 27		$ 42
Debt Conversion, Converted Instrument, Shares Issued																234,303,609	[1]	9,602,210	[1]	26,353	[1]	42,052	[1]	243,905,819
Preferred Stock converted to Common Stock, Shares	[1]															(54,100,000)		(84,000,000)		(688,118)		(10,100)
Preferred Stock converted to Common Stock, Shares	[1]															54,100,000		84,000,000		688,118		10,100
Convertible Preferred Stock [Member] | Series A Preferred Stock [Member]
Subsequent Event [Line Items]
Debt Conversion, Converted Instrument, Amount
Preferred Stock converted to Common Stock, Shares															17,813	14,613		11,200		205,185		23,720
Preferred Stock converted to Common Stock, Shares															(17,813)	(14,613)		(11,200)		(205,185)		(23,720)
Subsequent Event [Member] | Common Stock [Member]
Subsequent Event [Line Items]
Preferred Stock converted to Common Stock, Shares				(18,800,000)		(22,600,000)			(18,600,000)				(13,700,000)
Preferred Stock converted to Common Stock, Shares				18,800,000		22,600,000			18,600,000				13,700,000
Subsequent Event [Member] | Convertible Preferred Stock [Member] | Series A Preferred Stock [Member]
Subsequent Event [Line Items]
Preferred Stock converted to Common Stock, Shares				188		226			186				137
Preferred Stock converted to Common Stock, Shares				(188)		(226)			(186)				(137)
Subsequent Event [Member] | Convertible Notes Payable [Member]
Subsequent Event [Line Items]
Debt Conversion, Converted Instrument, Amount		$ 2,750	$ 24,400		$ 2,400		$ 2,075	$ 21,200	$ 1,850	$ 16,200	$ 1,700	$ 1,550		$ 13,600
Subsequent Event [Member] | Convertible Notes Payable [Member] | Common Stock [Member]
Subsequent Event [Line Items]
Debt Conversion, Converted Instrument, Shares Issued		27,500,000	24,400,000		24,000,000		20,750,000	21,200,000	18,500,000	16,200,000	17,000,000	15,500,000		13,600,000

[1] Common share amounts and per share amounts in the financial statements reflect the one-for-three hundred reverse stock split that was made effective on March 23, 2023.