10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2013
¨	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 000-49654
CirTran Corporation
(Exact name of registrant as specified in its charter)
Nevada		68-0121636
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
4125 South 6000 West, West Valley City, Utah 84128
(Address of principal executive offices, including zip code)
(801) 963-5112
(Registrant’s telephone number, including area code)
n/a
(Former name, former address and former fiscal year, if changed since last report)

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 Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 

Yes x No o

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

Large accelerated filer o	Accelerated filer ¨
Non-accelerated filer o	Smaller reporting company x

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

Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  As of August 16, 2013, issuer had 4,020,491,910 outstanding shares of common stock, par value $0.001.

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CIRTRAN CORPORATION

FORM 10-Q

For the Quarterly Period Ended June 30, 2013

INDEX

		Page
	PART I – FINANCIAL INFORMATION
Item 1	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4	Controls and Procedures	23
	PART II – OTHER INFORMATION
Item 1	Legal Proceedings	23
Item 5	Other Information	23
Item 6	Exhibits	24
Signatures		25

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PART I – FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

CIRTRAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
	June 30,		December 31,
	2013		2012
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	46,066	$	7,883
Trade accounts receivable, net of allowance for doubtful
accounts of $832,093 and $832,093, respectively		407,772		162,468
Inventory, net of reserve of $2,255,795 and $2,256,399, respectively		52,584		98,343
Other		281,036		7,866
Total current assets		787,458		276,560
Investment in securities, at cost		300,000		300,000
Long-term receivable, net of allowance of $1,582,895		-		-
Property and equipment, net		59,036		86,034
Other assets		128,986		224,488
Total assets	$	1,275,480	$	887,082
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Checks written in excess of bank balance	$	-	$	17,118
Accounts payable		4,635,523		4,681,114
Related-party payable		1,077,914		955,656
Short-term advances payable		2,892,814		3,088,945
Accrued liabilities		1,697,485		2,445,167
Accrued payroll and compensation expense		2,823,867		2,599,533
Accrued interest		1,834,768		2,417,834
Deferred revenue		3,004,850		2,984,119
Derivative liability		360,340		829,090
Convertible debenture		2,699,228		3,132,855
Refundable customer deposits		200,000		200,201
Current maturities of long-term debt		247,835		236,585
Current liabilities to non-controlling interest holders		2,849,079		2,570,000
Note payable to stockholders and members		251,833		576,833
Total current liabilities		24,575,536		26,735,050
Total liabilities		24,575,536		26,735,050
Stockholders' deficit
CirTran Corporation stockholders' deficit:
Common stock, par value $0.001; authorized 4,500,000,000 shares;
issued and outstanding shares: 3,686,791,910 and 2,541,502,289		3,686,792		2,541,502
Additional paid-in capital		29,591,580		29,451,824
Subscription receivable		(17,000)		(17,000)
Accumulated deficit		(48,089,198)		(48,514,796)
Total CirTran Corporation and subsidiaries stockholders' deficit		(14,827,826)		(16,538,470)
Non-controlling interest		(8,472,230)		(9,309,498)
Total stockholders' deficit		(23,300,056)		(25,847,968)
Total liabilities and stockholders' deficit	$	1,275,480	$	887,082
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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CIRTRAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
	Three months ended				Six months ended
	June 30,				June 30,
	2013		2012			2013	2012
Net sales	$	1,096,691	$	315,755	$	1,964,843	$	934,455
Cost of sales		(195,953)		(8,814)		(430,468)		(246,964)
Royalty expense		-		(5,011)		(37,494)		(526,015)
Gross profit		900,738		301,930		1,496,881		161,476
Operating expenses
Selling, general and administrative expenses		818,704		672,868		1,652,156		1,411,347
Non-cash compensation expense		1,000		19,183		30,872		39,080
Total operating expenses		819,704		692,051		1,683,028		1,450,427
Income (loss) from operations		81,034		(390,121)		(186,147)		(1,288,951)
Other income (expense)
Interest expense		(156,115)		(282,441)		(365,610)		(538,102)
Gain on settlement of debt		1,405,205		-		1,443,557		-
Gain (loss) on derivative valuation		365,222		(32,925)		371,066		(166,530)
Total other income (expense), net		1,614,312		(315,366)		1,449,013		(704,632)
Net income (loss)		1,695,346		(705,487)		1,262,866		(1,993,583)
Net loss (income) attributable to non-controlling interest		(1,164,172)		115,970		(837,268)		269,940
Net income (loss) attributable to CirTran Corporation and subsidiaries	$	531,174	$	(589,517)	$	425,598	$	(1,723,643)
Basic and diluted income (loss) per common share	$	0.00	$	(0.00)	$	0.00	$	(0.00)
Basic and diluted weighted-average
common shares outstanding		3,393,814,977		1,881,061,840		3,122,082,670		1,863,764,859
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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CIRTRAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended June 30,		2013		2012
Cash flows from operating activities
Net income (loss)	$	1,262,866	$	(1,993,583)
Adjustments to reconcile net income (loss) to net
cash provided (used) in operating activities:
Depreciation and amortization		26,998		49,845
Inventory reserves		(604)		-
Issuance of warrants and settlements		-		39,183
Change in valuation of derivative		(371,066)		166,531
Current liabilities to non-controlling interest holders		-		181,090
Gain on settlement of debt		(1,443,557)		-
Non-cash compensation expense		30,872		39,080
Changes in assets and liabilities:
Trade accounts receivable		(245,304)		(128,233)
Inventory		46,363		173,359
Other current assets		(273,170)		19,607
Other assets		95,502		(19,259)
Accounts payable		18,509		516,087
Related-party payable		122,258		66,118
Accrued liabilities		90,808		(85,394)
Accrued payroll and compensation expense		242,334		-
Refundable customer deposits		(201)		-
Accrued interest		392,609		-
Deferred revenue		20,731		975,038
Net cash provided by (used in) operating activities		15,948		(531)
Cash flows from financing activities
Proceeds from notes payable		-		25,000
Checks written in excess of bank balance		(17,118)		(158,149)
Proceeds from non-controlling interest		279,079		-
Proceeds from short-term advances		243,057		206,700
Payments on convertible debenture accrued interest		(64,395)		(100,000)
Payments on short-term advances		(418,388)		(146,800)
Net cash provided by (used in) financing activities		22,235		(173,249)
Net increase (decrease) in cash and cash equivalents		38,183		(173,780)
Cash and cash equivalents at beginning of period		7,883		173,780
Cash and cash equivalents at end of period	$	46,066	$	-
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	64,395	$	100,000
Noncash investing and financing activities:
Debt and accrued liabilities converted to equity	$	1,204,362	$	55,000
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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CIRTRAN CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements include the accounts of CirTran Corporation and its subsidiaries (the “Company”).  These financial statements have been prepared in accordance with Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”).  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations.  These statements should be read in conjunction with the Company’s annual financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.  In particular, the Company’s significant accounting policies were presented as Note 2 to the consolidated financial statements in that Annual Report.  In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying condensed consolidated financial statements and consist of only normal recurring adjustments.  The results of operations presented in the accompanying condensed consolidated financial statements for the six months ended June 30, 2013, are not necessarily indicative of the results that may be expected for the 12 months ending December 31, 2013.

NOTE 2 - REALIZATION OF ASSETS

The accompanying condensed consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern.  The Company had a net income of $1,262,866 and a net loss of $1,993,583 for the six months ended June 30, 2013 and 2012, respectively.  As of June 30, 2013, the Company had an accumulated deficit of $48,089,198.  In addition, the Company provided cash by operations in the amount of $15,948 during the six months ended June 30, 2013, and used cash in operations in the amount of $531 during the six months ended June 30, 2012.  The Company also had a negative working capital balance of $23,788,078 as of June 30, 2013, and $26,458,490 as of December 31, 2012.  These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s ability to continue energy drink distribution, its principal source of revenue, is subject to interruption or termination because of ongoing disputes respecting the status of the Play Beverages, LLC, or PlayBev, license to market Playboy-licensed energy drinks.  The Company is continuing its suit against Playboy Enterprises, Inc., or Playboy, in Illinois in an effort to enjoin Playboy’s termination of the license so the Company will be able to continue its beverage distribution segment.  If the Playboy licensing dispute is not resolved satisfactorily through a negotiated settlement or litigation in such proceeding, PlayBev would be required to terminate its beverage distribution activities, which are currently the principal source of the Company’s revenues.  Such termination may require the Company to cease its activities and seek protection from creditors.

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In view of the matters described in the preceding paragraphs, recoverability of a major portion of the recorded asset amounts shown in the accompanying consolidated balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its financing requirements on a continuing basis, to maintain or replace present financing, to acquire additional capital from investors, and to succeed in its future operations.  The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

The Company believes that its beverage business segment has the potential to have a substantial impact on its overall business.  The Company plans to focus on the beverage business and the contract manufacturing business.  For the beverage business, the Company plans to sell existing products and develop new products under the license agreement with Playboy to a globally expanding market.  With regard to contract manufacturing, the Company’s goal is to provide customers with manufacturing solutions for both new and more mature products, as well as across product generations.

The Company provides product marketing services to the direct response and retail markets for both proprietary and nonproprietary products.  This segment provides campaign management and marketing services for the beverage distribution, direct response, and retail markets.  The Company intends to continue to provide marketing and media services to support its own product efforts and offer to customers marketing service in channels involving television, radio, print media, and the Internet.  The Company intends to serve the electronics assembly and manufacturing industries, although it anticipates that its focus will shift more to providing services on a subcontract basis.

NOTE 3 - INVENTORIES

Inventories are stated at the lower of average cost or market and consisted of the following:

		June 30,		December 31,
		2013		2012
Raw Materials	$	1,674,500	$	1,691,500
Work in Process		169,391		221,225
Finished Goods		464,488		442,017
Allowance / Reserve		(2,255,795)		(2,256,399)
Totals	$	52,584	$	98,343

NOTE 4 – RELATED-PARTY TRANSACTIONS

Transactions Involving Officers, Directors, and Stockholders - In 2007, the Company appointed Fadi Nora to its Board of Directors.  In addition to compensation the Company normally pays to nonemployee members of the Board, Mr. Nora is entitled to a quarterly bonus equal to 0.5% of any gross sales earned by the Company directly through Mr. Nora’s efforts.  As of June 30, 2013, the Company owed $65,967 under this arrangement.  As of June 30, 2013, the Company owed Mr. Nora $1,034,929 in the form of unsecured advances.  These advances and short-term bridge loans were approved by the Board of Directors under a 5% borrowing fee.  The borrowing fees were waived by Mr. Nora on these loans.  In addition, the Company owed Mr. Nora $321,982 in accrued liabilities as of June 30, 2013, for selling, general, and administrative expenses that were paid for by Mr. Nora on a personal credit card.

7

The Company has agreed to issue 2,400,000 options to Mr. Nora as compensation for services provided as a Director of the Company.  The terms of the director agreement require the Company to grant to Mr. Nora options to purchase 2,400,000 shares of the Company’s stock each year, with the exercise price of the options being the market price of the Company’s common stock as of the grant date.  During the six months ended June 30, 2013, the Company accrued for 2,400,000 stock options relating to the director agreement with Mr. Nora.  The fair market value of the options was $4,069, using the following assumptions: 7.0-year term, estimated volatility of 224.82%, and a discount rate of 0.0% (see also Note 11).

In 2007, the Company issued a 10% promissory note to a family member of the Company President in exchange for $300,000.  The note was due on demand after May 2008.  During the six months ended June 30, 2013, the Company made no payments towards the outstanding note.  At June 30, 2013, the principal amount owing on the note was $151,833.  On March 31, 2008, the Company issued to this same family member, along with four other Company shareholders, promissory notes totaling $315,000.  The family member’s note was for $105,000.  Under the terms of all the notes, the Company received total proceeds of $300,000 and agreed to repay the amount received plus a 5% borrowing fee.  The notes were due April 30, 2008, after which they were due on demand, with interest accruing at 12% per annum.  During the six months ended June 30, 2013, the Company made no payments towards the outstanding notes.  The principal balance owing on the promissory notes as of June 30, 2013, totaled $72,465.

On April 2, 2009, the Company President and a Director of the Company borrowed from a third party a total of $890,000 in the form of four short-term promissory notes.  The Company President and the Director of the Company signed personally for the notes.  Because the loans were used to pay obligations of the Company, the Company has assumed full responsibility for the notes.  Two of the notes were for a term of 60 days, with a 60-day grace period; a third note was for a term of 90 days; and a fourth note was for 24 days.  Loan fees totaling $103,418 were incurred with the issuance of the notes and are payable upon maturity of the notes.  At June 30, 2013, two of the notes had a combined remaining balance of $270,000 and comprised a portion of short-term advances payable of $2,892,814.  As of June 30, 2013, these notes were in default and are accruing interest at the default rate of 36% per year.

The Company has agreed to issue 6,000,000 options each year to the Company President as compensation for services provided as an officer of the Company.  The terms of the employment agreement require the Company to grant to the Company President options to purchase 6,000,000 shares of the Company’s stock each year, with the exercise price of the options being the market price of the Company’s common stock as of the grant date.  During the six months ended June 30, 2013, the Company accrued for 6,000,000 stock options relating to the employee agreement with Mr. Hawatmeh.  The fair market value of the options was $10,171, using the following assumptions: estimated 7.0-year term, estimated volatility of 224.82%, and a discount rate of 0.0% (see also Note 11).

As of June 30, 2013, the Company owed the Company President a total of $88,564 in short-term advances payable and 36,000,000 stock options with an aggregated fair value at time of grant of $154,537.  These advances and short-term bridge loans were approved by the Board of Directors under a 5% borrowing fee.  The borrowing fees were waived by the Company’s President on these loans.

Sublease - In an effort to operate more efficiently and focus resources on higher margin areas of the Company’s business, on March 5, 2010, the Company and Katana Electronics, LLC, a Utah limited liability company (“Katana”), entered into certain agreements (collectively, the “Agreements”) to reduce the Company’s costs.  The Agreements include an Assignment and Assumption Agreement, an Equipment Lease, and a Sublease Agreement relating to the Company’s property.  Pursuant to the terms of the Sublease, the Company agreed to sublease a certain portion of the Company’s premises to Katana, consisting of the warehouse and office space used as of the close of business on March 4, 2010.  The term of the Sublease was for two months with automatic renewal periods of one month each.  The base rent under the Sublease is $8,500 per month.  The Sublease contains normal and customary use restrictions, indemnification rights and obligations, default provisions, and termination rights.  Under the Agreements signed, the Company continues to have rights to operate as a contract manufacturer in the future in the U.S. and offshore.  On July 1, 2011, Katana had assumed the full lease payment, and the Company agreed to pay Katana $5,000 per month for the use of office space and utilities.  The Company recorded a rent expense of $30,000 and $15,000 for the six months ended June 30, 2013 and 2012, respectively.

8

NOTE 5 - COMMITMENTS AND CONTINGENCIES

Litigation and Claims - In the ordinary course of business, the Company and its subsidiaries are from time to time defendants in or parties to pending and threatened legal actions and proceedings.  In certain of these actions and proceedings, claims are asserted against the Company and its subsidiaries.

In view of the inherent difficulty of predicting the outcome of such matters, the Company cannot state with confidence what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be or what the eventual loss related to each pending matter may be.  Based on current knowledge, management does not believe that liabilities, if any, arising from pending litigation or regulatory matters will have a material adverse effect on the consolidated financial position or liquidity of the Company, but may be material to the Company's operating results for any particular reporting period.

Registration Rights Agreements - In connection with the Company’s issuance of convertible debentures to YA Global Investments, L.P., formerly known as Cornell Capital Partners, L.P. (“YA Global”), the Company granted to YA Global certain registration rights, pursuant to which the Company agreed to file a registration statement to register the resale of shares of the Company’s common stock issuable upon conversion of the debentures.  The Company agreed to keep the registration statement effective until all of the shares issuable upon conversion of the debenture have been sold.  The Company has not accrued a liability for potential losses.

Previously, YA Global agreed to extensions of the filing deadlines inherent in the terms of the convertible debentures mentioned above.  On January 24, 2011, the Company and YA Global entered into a forbearance agreement related to the convertible debentures issued by the Company to YA Global or its predecessor entities (the “2011 Forbearance Agreement”), as discussed below.

YA Global Forbearance Agreements - On September 25, 2010, YA Global filed a lawsuit against the Company asserting claims for breach of contract, breaches of the uniform commercial code, and replevin.  YA Global sought a judgment in the amount of $4,193,380, plus interest and attorneys fees, as well as a writ of replevin to compel the Company to turn over equipment and other property that YA Global claims was pledged as collateral to secure obligations owing to YA Global.

On January 24, 2011, the Company entered into confession of judgment in favor of YA Global.  On February 23, 2011, the court entered judgment based on the confession of judgment against the Company in the principal amount of $3,161,354, plus interest of $825,858.

On July 22, 2011, YA Global filed a motion in the Advanced Beauty Solutions, or ABS, lawsuit (discussed below) seeking an order clarifying its position with respect to ABS and staying enforcement of that court’s order that the Company pay approximately $35,000 in legal fees to ABS.  In its motion, YA Global notified the Company that it intended to conduct a secured party’s public auction of all of the Company’s assets.  YA Global also informed the Company that it had defaulted under the 2011 Forbearance Agreement and declared that all of the Company’s obligations to YA Global were immediately due and owing.  Further, YA Global stated that it intended to commence action to collect on the Company’s obligations and instructed it to assemble its assets.

9

At a hearing held on August 3, 2011, in the ABS reorganization proceeding on YA Global’s motion to stay enforcement, YA Global noted that the date of the proposed secured party’s public auction was August 30, 2011.  At the same time, YA Global notified the Company that the proposed sale of assets would be held on August 30, 2011.

At the hearing in the ABS matter, the Bankruptcy Court denied YA Global’s motion to stay the payment of attorneys’ fees by the Company.  Subsequently, the parties to the January 2011 settlement with YA Global entered into an agreement whereby YA Global agreed to cancel the proposed asset sale without waiver.

On September 30, 2011, YA Global directed the Company to assemble the collateral in order to enable it to take possession on or before October 6, 2011.  Following negotiations with YA Global, the Company confirmed its indebtedness to YA Global and arranged for it to take possession of collateral on October 17, 2011, on which date, all accounts receivable, collections, and other proceeds and products of the collateral would be held in trust by the Company for YA Global and immediately forwarded to it.  Before the Company was required to surrender possession of the collateral, it initiated negotiations to obtain YA Global’s forbearance from collection.

On March 22, 2012, the Company entered into a formal forbearance agreement with YA Global, dated as of March 1, 2012 (the “2012 YA Global Forbearance Agreement”), in which it ratified its previous obligations under the debentures and agreed to pay the debentures under the following payment plan: $25,000 at signing the 2012 YA Global Forbearance Agreement, $25,000 per month in March through June 2012, $50,000 per month in July through September 2012, $75,000 in the months of October and November 2012, $100,000 per month in the months of December 2012 through May 2013, $125,000 per month in the months of June through December 2013, and the balance in December 2014 (the “Extended Termination Date”).  In addition to the above minimum payments to YA Global, the Company is required to pay monthly excess cash flow, to the extent cumulatively available, consisting of consolidated earnings before interest, taxes, depreciation and amortization, less cash deposits for product orders received but not yet shipped, actual cash taxes paid, actual cash principal and interest paid, and reasonable out-of-pocket cash paid together with reasonable cash reserves in an amount not to exceed 5% of total net sales, provided that such excess cash flow payments shall not to exceed $50,000 in March 2012 and $25,000 per month in April through September 2012.

The Company continues to have the right, subject to the consent of YA Global, to pay all or any portion of the payments listed above in common stock, with the conversion price to be used to determine the number of shares being equal to the lowest closing bid price of the Company’s common stock during the 20 trading days prior to the payment date.  The amount applied as a payment on the note and accrued interest will be adjusted to the value of the actual proceeds from the sale of the stock by YA Global, less costs associated with the sale.

YA Global agreed to forbear from enforcing its rights and remedies as a result of the existing defaults and/or converting the debentures into shares of the Company’s common stock, until the earlier of the Company’s default under the 2012 YA Global Forbearance Agreement or the Extended Termination Date.

On February 22, 2013, the Company entered into a Ratification Agreement with YA Global (the “2013 Ratification Agreement”).  Under the 2013 Ratification Agreement, the Company ratified the obligations under three existing Convertible Debentures dated May 26, 2005, December 30, 2005, and August 23, 2006, and agreed to amend, restate, and consolidate the obligations evidenced thereby into a Consolidated Debenture. 

10

The 2013 Ratification Agreement also provides for a new payment schedule under the Consolidated Debenture that replaces the payment schedule that had been agreed to in the 2012 YA Global Forbearance Agreement among the parties.  Under the 2013 Ratification Agreement payment schedule, the Company is required to make monthly payments, to be applied first to accrued interest and then to principal, in the amount of $100,000 per month, commencing in April 2013.  The amount of the Company’s required monthly cash payment shall be reduced in an amount equal to the amount credited to the lender against the obligation as a result of the lender’s exercise of the right to convert the outstanding balance due under the debentures into common stock, as provided in the original convertible debentures as well as in the Consolidated Debenture.  Any amount credited against the debenture obligation in excess of $100,000 per month shall be credited against the amounts due in the next succeeding month.

During the six months ended June 30, 2013, the Company issued common stock valued at $800,712, which balance includes common stock valued at $675,176 towards the required monthly payments.  

Delinquent Payroll Taxes, Interest, and Penalties - In November 2004, the IRS accepted the Company’s Amended Offer in Compromise (the “Offer”) to settle delinquent payroll taxes, interest, and penalties.  The acceptance of the Offer required the Company to pay $500,000.  Additionally, the Offer required the Company to remain current in its payment of taxes for five years and not claim any net operating losses for the years 2001 through 2015 or until the Company pays taxes on future profits in an amount equal to the taxes waived by the Offer of $1,455,767.  In June 2013, the Company entered into a partial installment agreement to pay $768,526 in unpaid 2009 payroll taxes.  The installment agreement requires the Company to pay the IRS 5% of cash deposits.  The monthly payments are to continue until the account balances are paid in full or until the collection statute of limitation expires on October 6, 2020.

Disputed Account Payable - The Company is in disagreement with its former legal counsel over the amount due to this provider for billed services, charges, and interest expense.  The Company is vigorously working with this provider to settle the outstanding balance.  Management assesses the likelihood to be remote that it will not be able to settle the balance at or below the currently accrued balance.

Employment Agreements - On August 1, 2009, the Company entered into a new employment agreement with Mr. Hawatmeh, the Company’s President.  The term of the employment agreement continues until August 31, 2014, and automatically extends for successive one-year periods, with an annual base salary of $345,000.  The employment agreement also grants to Mr. Hawatmeh options to purchase a minimum of 6,000,000 shares of the Company’s stock each year, with the exercise price of the options being the market price of the Company’s common stock as of the grant date.  The employment agreement also provides for health insurance coverage, cell phone, car allowance, life insurance, and director and officer liability insurance, as well as any other bonus approved by the Board.  The employment agreement includes additional incentive compensation as follows: a quarterly bonus equal to 5% of the Company’s earnings before interest, taxes, depreciation, and amortization for the applicable quarter; bonus(es) equal to 1.0% of the net purchase price of any acquisitions completed by the Company that are directly generated and arranged by Mr. Hawatmeh; and an annual bonus (payable quarterly) equal to 1% of the gross sales, net of returns and allowances, of all beverage products of the Company and its affiliates for the most recent fiscal year.  During the six months ended June 30, 2013 and 2012, the Company incurred $10,171 and $19,183, respectively, of noncash compensation expense related to accrual for employee stock options to be awarded per the employment contract with the president of the Company.

Pursuant to the employment agreement, Mr. Hawatmeh’s employment may be terminated for cause or upon death or disability, in which event, the Company is required to pay Mr. Hawatmeh any unpaid base salary and unpaid earned bonuses.  In the event that Mr. Hawatmeh is terminated without cause, the Company is required to pay to Mr. Hawatmeh: (i) within 30 days following such termination, any benefit, incentive, or equity plan, program, or practice (the “Accrued Obligations”) paid when the amount would have been paid Mr. Hawatmeh if employed; (ii) within 30 days following such termination (or on the earliest later date as may be required by Internal Revenue Code Section 409A to the extent applicable), a lump sum equal to 30 months of  annual base salary; (iii) bonus(es) owing under the employment agreement for the two-year period after the date of termination (net of bonus amounts paid as Accrued Obligations) based on actual results for the applicable quarters and fiscal years; and (iv) within 12 months following such termination (or on the earliest later date as may be required by Internal Revenue Code Section 409A to the extent applicable), a lump sum equal to 30 months of annual base salary; provided that if Mr. Hawatmeh is terminated without cause in contemplation of, or within one year after, a change in control, then two times such annual base salary and bonus payment amounts.

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On May 1, 2009, PlayBev, a consolidated variable interest entity, entered into compensation agreements with its managers, Mr. Hawatmeh and Mr. Nora.  The agreed compensation consists of a monthly fee of $10,000 for each manager, reimbursement of reasonable expenses on its behalf, and a car allowance for Mr. Nora of $1,000 per month to cover the cost of use, fuel, and repairs.  The Company has accrued $1,073,150 in compensation, which is included in related-party payables as of June 30, 2013.

Advanced Beauty Solutions, LLC - In connection with prior litigation with ABS, ABS claimed nonperformance by the Company and filed an adversary proceeding in its bankruptcy case proceeding in the United States Bankruptcy Court, Central District of California, San Fernando Valley Division.  On March 17, 2009, the Bankruptcy Court entered judgment in favor of ABS and against the Company in the amount of $1,811,667, plus interest.  On September 11, 2009, the Bankruptcy Court denied the Company’s motion to set aside the judgment. 

On September 8, 2010, the Company executed an Assignment of Copyrights, thereby assigning Copyright Registration No. TX-6-064-955, Copyright Registration No. TX-6-064-956, and Copyright to the True Ceramic Pro - Live Ops (TCPS) infomercial and related master tapes (collectively the “Copyrights”) to ABS, without reservation or exclusion, making ABS the owner of the Copyrights. 

On February 23, 2011, the Company filed a Motion to Declare Judgment Fully Satisfied or Alternatively to Recoup Mutual Debts, requesting that the court determine that its assignment of the Copyrights resulted in full satisfaction of the ABS judgment.  On March 3, 2011, ABS brought a Motion for Order to Show Cause re Civil Contempt alleging that the Company had failed to make payments on ABS’s judgment in violation of the court’s orders.  At the hearing on April 6, 2011, the court denied the motion to declare the judgment fully satisfied and granted ABS’s motion, but did not hold the Company in civil contempt.  The court also set a hearing on the ABS Motion for the Order to Show Cause for July 8, 2011, regarding the Company’s compliance with collection orders, which the parties stipulated should be postponed until August 3, 2011.  The parties attended mediation on July 11, 2011, but no formal settlement resulted.  At the hearing in August, the court found that a basis existed to hold the Company in contempt and set an evidentiary hearing for October 6, 2011, to determine whether to issue a contempt citation.  The Company appealed the denial of its motion to declare judgment satisfied. 

On March 22, 2012, the Company and ABS entered into a formal forbearance agreement, dated as of March 1, 2012 (the “ABS Forbearance Agreement”), whereby ABS agreed to take no further judgment enforcement actions in consideration of the payment of $25,000 upon execution of the definitive ABS Forbearance Agreement and satisfaction of applicable conditions precedent.  The ABS Forbearance Agreement calls for the Company to pay $7,500 per month for 46 consecutive months (except for a payment of $15,000 in December 2012), commencing in March 2012, with the unpaid balance, as finally determined as provided below, due and payable in January 2016.  No interest on the principal would accrue unless the note is in default, in which case, it would bear interest at 10% per annum from the date of the ABS Forbearance Agreement.  In addition, the Company stipulated to an additional judgment for attorney’s fees incurred in negotiating the ABS Forbearance Agreement and entering into the related definitive agreements and in related post-judgment collection efforts.  The obligation to pay $1,835,000 under the ABS Forbearance Agreement would be secured by an encumbrance on all of the Company’s assets, subject to a prior lien and encumbrance in favor of YA Global. 

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The principal amount of $1,835,000 due under the ABS Forbearance Agreement would be reduced by the greater of the amount of credit granted in the bankruptcy proceedings for the value of the intellectual property the Company previously conveyed to ABS and the amount received by ABS from the sale of such intellectual property to a third party during the term of the ABS Forbearance Agreement, plus the amount of any distribution to which the Company is entitled as a creditor of ABS, provided, however, that in no event would the amount due under the ABS Forbearance Agreement be reduced below $90,000, which is the amount payable during the first 12 months under the ABS Forbearance Agreement.  ABS entered into a subordination agreement subordinating the obligation under the ABS Forbearance Agreement in favor of the obligations and first-priority security interest of YA Global.  The Company conveyed to ABS the trademarks and intellectual property previously conveyed by ABS to the Company. 

The Company’s appeal of the approximately $1.8 million judgment has been remanded in the ABS bankruptcy proceedings to conclusively determine the amount of credit due the Company for the conveyance of the intellectual property.  Except for the determination of the fair market value of the intellectual property and any enforcement or collection proceedings that may be required under the ABS Forbearance Agreement, all litigation and disputes between ABS and its affiliates, on the one hand, and the Company and its affiliates, on the other hand, would be dismissed, including the pending order to show cause regarding contempt against the Company, its subsidiaries, and its President. 

The Company has assigned to ABS its creditor claim against the estate of ABS, to the extent of the balance due under the ABS Forbearance Agreement.  Any distribution from the ABS estate in excess of the adjusted amounts due under the ABS Forbearance Agreement will be paid to the Company.  Pending the determination of the amount of the credit due for the value of the intellectual property conveyed, the Company accrued a balance of $90,000 for the minimum required payment under the ABS Forbearance Agreement.  It is reasonably possible that this estimate may change in the near future based on the events of the ABS settlement.

As part of ABS Forbearance Agreement, among other things, the Company agreed to a settlement amount that is to be reduced by any distribution to which the Company was entitled as a creditor of ABS.  Under the ABS Forbearance Agreement the minimum amount due ABS is $90,000, which is the amount payable during the first 12 months under the ABS Forbearance Agreement.  The Company accrued $90,000 as of December 31, 2012, and made payments of $70,000.  The royalty accrual as of June 30, 2013, was $20,000.

Play Beverages, LLC, et al., v. Warner K. Depuy, et al. - PlayBev alleged tortuous interference with contractual relations, breaches of fiduciary duty, and fraud and negligent misrepresentations and sought a declaratory judgment determining the rights of the parties, damages to be determined at trial, costs, and attorney’s fees.  A default certificate was filed by the plaintiffs for the failure of the defendants to respond and then withdrawn.  Under a settlement and release agreement in April 2013, the parties exchanged mutual general releases without the payment by any party of any amounts to any other.  Accordingly, PlayBev was relieved of approximately $1.4 million in amounts due LIB-MP without any payment.

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NOTE 6 - NOTES PAYABLE

In February 2012, the Company issued an 18% interest, 90-day, $30,000 promissory note to an investor.  The principal balance included a $5,000 borrowing fee.  The promissory note along with accrued interest was converted to 32,000,000 shares of stock in January 2013.  There was no outstanding balance as of June 30, 2013.

NOTE 7 - FINANCIAL INSTRUMENTS

The Company has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting.  Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in the Company’s balance sheet.  The Company measures these instruments at their estimated fair value and recognizes changes in their estimated fair value in results of operations during the period of change.  The Company has estimated the fair value of these embedded derivatives for convertible debentures and associated warrants using a multinomial lattice model as of June 30, 2013, and December 31, 2012, and used the Black-Scholes model prior to that.  The fair values of the derivative instruments are measured each quarter, which resulted in a gain (loss) of $371,066 and $(166,530) during the six months ended June 30, 2013 and 2012, respectively.  As of June 30, 2013, and December 31, 2012, the fair market value of the derivatives aggregated $360,340 and $829,090, respectively.

NOTE 8 - FAIR VALUE MEASUREMENTS

For asset and liabilities measured at fair value, the Company uses the following hierarchy of inputs:

·Level one -- Quoted market prices in active markets for identical assets or liabilities;

·Level two -- Inputs other than level one inputs that are either directly or indirectly observable; and

·Level three -- Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

Liabilities measured at fair value on a recurring basis at June 30, 2013, are summarized as follows:

	Level 1		Level 2		Level 3		Total
Fair value of derivatives	$	-	$	360,340	$	-	$	360,340

Liabilities measured at fair value on a recurring basis at December 31, 2012, are summarized as follows:

	Level 1		Level 2		Level 3		Total
Fair value of derivatives	$	-	$	829,090	$	-	$	829,090

NOTE 9 - STOCKHOLDERS’ DEFICIT

The Company’s stockholders’ deficit decreased by $425,598 as a result of the net income attributable to CirTran Corporation for the six months ended June 30, 2013.  Noncontrolling interest in consolidated

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subsidiaries decreased stockholders’ deficit by $837,268 for the six months ended June 30, 2013, due to the operating income of the noncontrolling subsidiary.

Income (Loss) Per Share- Basic income (loss) per share is calculated by dividing net income (loss) available to common shareholders by the weighted-average number of common shares outstanding during each period.  Diluted income (loss) per share is similarly calculated, except that the weighted-average number of common shares outstanding would include common shares that may be issued subject to existing rights with dilutive potential when applicable.  The Company had 3,601,399,910 and 4,401,029,000 in potentially issuable common shares at June 30, 2013, and December 31, 2012, respectively.  These potentially issuable common shares were excluded from the calculation of diluted income (loss) per share because the effects were antidilutive.

NOTE 10 – CAPITAL STOCK

In January through March 2013, four unrelated parties elected to convert debt in the amount of $246,000, into 246,000,000 shares of the Company’s common.

In January through May 2013, YA Global Investments (formerly known as Cornell Capital Partners, LP) and its assigns elected to convert the amounts of $538,412, $95,100, $67,200, and $100,000 of their convertible debt into 538,412,000, 86,454,545, 56,000,000, and 76,923,076 shares of the Company’s common stock, respectively.

In February 2013, the Company issued 4,000,000 shares of its common stock to an unrelated party for $20,800 in debt that was settled during the year ended December 31, 2010.

In January through June 2013, three unrelated parties elected to convert debt in the amounts of $22,100, $28,000, $60,750, $16,000, and $12,000 into 7,000,000, 13,000,000, 67,500,000, 20,000,000, and 30,000,000 shares of the Company’s common stock, respectively.

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NOTE 11 - STOCK OPTIONS AND WARRANTS

Stock Incentive Plans - As of June 30, 2013, a total of 446,200,000 shares of common stock had been issued from the 2012 Stock Incentive Plan, out of which a maximum of 458,000,000 can be issued.  The Company’s Board of Directors administers the plan and has discretion in determining the employees, directors, independent contractors, and advisors who receive awards, the type of awards (stock, incentive stock options, nonqualified stock options, or share purchase rights) granted, and the term, vesting, and exercise prices.

Employee Options - During the six months ended June 30, 2013 and 2012, the Company did not grant options to purchase shares of common stock to employees.

A summary of the stock option activity under the plans as of June 30, 2013, and changes during the six months then ended is presented below:

				Weighted-
		Weighted-		Average	Aggregate
		Average		Remaining	Intrinsic
	Shares	Exercise Price		Contractual Life	Value
Outstanding at December 31, 2012	3,600,000	$	0.0123	0.013	$	-
Granted	-		-
Exercised	-		-
Expired	(3,600,000)		0.0123			-
Outstanding at June 30, 2013	-	$	-	-	$	-
Exercisable at June 30, 2013	-	$	-	-	$	-

As of June 30, 2013, and December 31, 2012, the Company had a total of 106,800,000 and 88,000,000 options accrued but not issued, respectively.

Warrants - On January, 24, 2011, as part of the 2011 Forbearance Agreement, a warrant to purchase 25,000,000 shares of common stock was issued to YA Global.  The warrant had an exercise price of $0.02 per share and vested immediately.

The Company currently has an insufficient number of authorized shares to enable warrant holders to fully exercise their warrants, assuming all warrants holders desired to do so.  Accordingly, the warrants are subject to derivative accounting treatment and are included in the derivative liability related to the convertible debentures (see Note 8).

NOTE 12 - SEGMENT INFORMATION

Segment information has been prepared in accordance with ASC 280-10, Disclosure about Segments of an Enterprise and Related Information.  The Company has four reportable segments: electronics assembly, contract manufacturing, marketing and media, and beverage distribution.  The electronics assembly segment manufactures and assembles circuit boards and electronic component cables.  The contract manufacturing segment manufactures, either directly or through foreign subcontractors, various products under manufacturing and distribution agreements.  The marketing and media segment provides marketing services to online retailers, along with beverage development and promotional services to PlayBev.  The beverage distribution segment manufactures, markets, and distributes Playboy-licensed energy drinks domestically and internationally.

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The accounting policies of the segments are consistent with those described in the summary of significant accounting policies.  The Company evaluates performance of each segment based on earnings or loss from operations.  Selected segment information is as follows:

		Electronics		Contract		Marketing		Beverage
		Assembly		Manufacturing		and Media		Distribution		Total
Three Months Ended June 30, 2013
Sales to external customers	$	-	$	26,080	$	-	$	1,070,611	$	1,096,691
Segment income (loss)		276,804		26,376		(25)		527,231		830,386
Segment assets		405,365		49,346		-		820,769		1,275,480
Depreciation and amortization		4,269		7,591		-		-		11,860
Three Months Ended June 30, 2012
Sales to external customers	$	-	$	24,541	$	-	$	291,214	$	315,755
Segment income (loss)		(47,857)		(16,656)		15		(640,989)		(705,487)
Segment assets		350,865		69,750		-		477,350		897,965
Depreciation and amortization		5,156		17,180		-		-		22,336
Six Months Ended June 30, 2013
Sales to external customers	$	-	$	57,212	$	-	$	1,907,631	$	1,964,843
Segment income (loss)		298,313		13,922		(25)		950,656		1,262,866
Segment assets		405,365		49,346		-		820,769		1,275,480
Depreciation and amortization		8,600		18,398		-		-		26,998
Six Months Ended June 30, 2012
Sales to external customers	$	-	$	55,625	$	-	$	878,830	$	934,455
Segment income (loss)		(302,531)		(14,733)		-		(1,676,319)		(1,993,583)
Segment assets		350,865		69,750		-		477,350		897,965
Depreciation and amortization		10,321		39,524		-		-		49,845

NOTE 13 - GEOGRAPHIC INFORMATION

The Company currently maintains $18,652 of capitalized tooling costs in China.  All other revenue-producing assets are located in the United States of America.  Revenues are attributed to the geographic areas based on the location of the customers purchasing the products.

NOTE 14 - SUBSEQUENT EVENTS

In July 2013, YA Global Investments (formerly known as Cornell Capital Partners, LP) and its assigns elected to convert the amounts of $25,000, $100,000, and $158,700 of their convertible debt into 283,700,000 shares of the Company’s common stock at a price of $0.001 per share.

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In July 2013, an investor in PlayBev elected to convert debt in the amount of $350,000 into 53,511 Class A Units, which equals 25% of the membership interest in PlayBev.

In July 2013, two unrelated parties elected to convert debt in the amounts of $20,000, and $30,000 into 50,000,000 shares of the Company’s common stock at a price of $0.001 per share.

These financial statements considered subsequent events through August 16, 2013, the date the financial statements were available to be issued.

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

This discussion should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2012.

Overview

We manufacture, market, and distribute domestically and internationally an energy drink under a license, now in dispute, with Playboy Enterprises, Inc., or Playboy, and in the U.S., we provide a mix of high- and medium-volume turnkey manufacturing services and products using various high-tech applications for leading electronics OEMs (original equipment manufacturers) in the communications, networking, peripherals, gaming, law enforcement, consumer products, telecommunications, automotive, medical, and semiconductor industries.  Our services include pre-manufacturing, manufacturing, and post-manufacturing services.  Our goal is to offer customers the significant competitive advantages that can be obtained from manufacture outsourcing. 

We are engaged in the following business segments.

Beverage Distribution (98% and 94% of total revenue during six months ended June 30, 2013 and 2012, respectively)

CirTran Beverage manufactures, markets, and distributes Playboy-branded energy drinks in accordance with an agreement we entered into with Play Beverages, LLC, or PlayBev, a consolidated variable interest entity, which holds the Playboy license. 

Contract Manufacturing (2% and 6% of total revenue during the six months ended June 30, 2013 and 2012, respectively)

CirTran Products pursues contract-manufacturing relationships in the U.S. consumer products markets, including licensed merchandise sold in the sports and entertainment markets. 

CirTran Asia manufactures and distributes electronics, consumer products, and general merchandise to companies selling in international markets. 

Prior to 2012, we also conducted activities in the marketing and media and electronics assembly operating segments, which may be reactivated. 

Forward-Looking Statements

The statements contained in this report that are not purely historical are considered to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act.  These statements represent our expectations, hopes, beliefs, anticipations, commitments, intentions, and strategies regarding the future.  They may be identified by the use of words or phrases such as “believes,” “expects,” “anticipates,” “should,” “plans,” “estimates,” and “potential,” among others.  Forward-looking statements include, but are not limited to, statements contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations regarding our financial performance, revenue, and expense levels in the future and the sufficiency of our existing assets to fund future operations and capital spending needs.  Readers are cautioned that actual results could differ materially from the anticipated results or other expectations that are expressed in these

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forward-looking statements.  The forward-looking statements contained in this report are made as of the date of this report, and we assume no obligation to update them or to update the reasons why our actual results could differ from those that we have projected in such forward-looking statements.  We expressly disclaim any obligation or intention to update any forward-looking statement.

Results of Operations

Comparison of the Three Months and Six Months Ended June 30, 2013 and 2012

Sales and Cost of Sales

Net sales increased to $1,096,691 for the three months ended June 30, 2013, as compared to $315,755 for the three months ended June 30, 2012.  Net sales increased to $1,964,843 for the six months ended June 30, 2013, as compared to $934,455 for the six months ended June 30, 2012.  The increases are primarily attributable to our ability to manage the disruption we experienced in 2012 and into 2013 with the unexpected bankruptcy proceedings initiated against PlayBev, the continuing uncertainty created by Playboy in relation to the interference with our beverage distributors, and defense against numerous lawsuits. 

Cost of sales, including royalty expense, as a percentage of sales, increased to 18% from 4% for the three months ended June 30, 2013, as compared to the three months ended June 30, 2012, respectively, and decreased to 24% from 83% for the six months ended June 30, 2013, as compared to the six months ended June 30, 2012, respectively.  Consequently, the gross profit margin decreased to 82% from 96%, for the three months ended June 30, 2013 and 2012, respectively.  The decrease in gross profit margin is attributable to an increase in revenues from product sales that have an overall higher cost than revenues from royalty agreements.

The following charts present comparisons of sales, cost of sales, and gross profits generated by our two operating segments, beverage distribution and contract manufacturing, during the six months ended June 30, 2013 and 2012:

Six months Ended June 30:
Segment	Year	Sales	Cost of Sales	Royalty Expense	Gross Loss / Margin
Beverage Distribution	2013	$ 1,907,631	$ 429,118	$ 37,494	$ 1,441,019
	2012	878,830	246,763	526,015	106,052
Contract Manufacturing	2013	57,212	1,350	-	55,862
	2012	55,625	201	-	55,424

Three months Ended June 30:
Segment	Year	Sales	Cost of Sales	Royalty Expense	Gross Loss / Margin
Beverage Distribution	2013	$ 1,070,611	$ 194,704	$ -	$ 875,907
	2012	291,214	8,613	5,011	277,590
Contract Manufacturing	2013	26,080	1,249	-	24,831
	2012	24,541	201	-	24,340

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Selling, General, and Administrative Expenses

During the six months ended June 30, 2013, selling, general, and administrative expenses increased by $240,809 to $1,652,156 from $1,411,347 for the same period during 2012.  The increase in selling, general, and administrative expenses was driven primarily by an increase in legal fees.

Noncash Compensation Expense

Compensation expense in connection with accounting for options owed or granted to employees to purchase common stock was $1,000 for the three months ended June 30, 2013, as compared to $19,183 for the three months ended June 30, 2012, and $30,872 for the six months ended June 30, 2013, as compared to $39,080 for the six months ended June 30, 2012, as a result of the employee stock options accrued for employment agreements.

Other Income and Expense

Interest expense for the three months ended June 30, 2013, was $156,115, as compared to $282,441 for the three months ended June 30, 2012, a decrease of 45%.  Interest expense for the six months ended June 30, 2013, was $365,610, as compared to $538,102 for the six months ended June 30, 2012.  The decrease in the combined interest expense was driven by the reduction in interest-bearing liabilities during the six months ended June 30, 2013, and a decrease in the interest rate on the convertible debentures.

We recorded a gain of $365,222 on our derivative valuation for the three months ending June 30, 2013, as compared to a loss of $32,925 recorded for the three months ended June 30, 2012.  We recorded a gain of $371,066 on our derivative valuation for the six months ended June 30, 2013, as compared to a loss of $166,530 recorded for the six months ended June 30, 2012.  The swing in the derivative valuation is primarily the result of the change in estimating the fair value of convertible debentures and associated warrants from using the Black-Scholes model to a multinomial lattis model, together with the varying market values of our common stock.

We recorded a gain of $1,443,557 on our settlement of debt for the six months ended June 30, 2013.  We recorded a gain of $1,405,205 on our settlement of debt for the three months ended June 30, 2013.  This was a result of settling payable, accrued liabilities and debt for equity and relief of about $1.4 million in amounts due LIB-MP.  See Notes 5 and 10, in the notes to the unaudited financial statements above for more details.

As a result of these factors, our overall net income increased to $1,695,346 for the three months ended June 30, 2013, as compared to net loss of $705,487 for the three months ended June 30, 2012.  The net income attributable to us was $531,174 for the three months ended June 30, 2013, and a net income of $1,164,172 was attributable to a noncontrolling equity interest in PlayBev.  Net income increased to $1,262,866 for the six months ended June 30, 2013, as compared to a net loss of $1,993,583 for the six months ended June 30, 2012.  The net income attributable to us was $425,598 for the six months ended June 30, 2013, and net income of $837,268 was attributable to a noncontrolling equity interest in PlayBev.

Liquidity and Capital Resources

We have had a history of losses from operations, as our expenses have been greater than our revenues.  Our accumulated deficit was $48,089,198 at June 30, 2013, and $48,514,796 at December 31, 2012.  Net income for the six months ended June 30, 2013, was $1,262,866, as compared to a net loss of $1,993,583

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for the six months ended June 30, 2012.  Our current liabilities exceeded our current assets by $23,788,078 as of June 30, 2013, and by $26,458,490 as of December 31, 2012. 

Cash

The amount of cash provided by operating activities during the six months ended June 30, 2013, increased by $16,479, driven primarily by gains recognized on settlement of debts. The amount of cash provided by financing activities during the six months ended June 30, 2013, increased by $195,484, driven primarily by increased proceeds from non-controlling interest members and proceeds from short-term advances.

Accounts Receivable

Trade accounts receivable, net of allowance for doubtful accounts, increased $245,304 during the six months ended June 30, 2013.  We continue to monitor individual customer accounts and are working to improve collections on trade accounts receivable.  We eliminate the receivables associated with PlayBev as part of consolidation in accordance with GAAP treatment as a variable interest entity.

Accounts Payable and Accrued Liabilities

During the six months ended June 30, 2013, accounts payable, accrued liabilities, advances payable, interest payable, and short-term debt decreased by $1,225,878 to a combined balance of $14,962,371 as of June 30, 2013.  The decrease includes a decrease of $747,682 in accrued liabilities, a $583,066 decrease in interest payable, an increase of $224,334 in accrued payroll and compensation, a $45,591 decrease in accounts payable, and a $122,258 increase in related party payables.  The significant decrease in accrued liabilities and accrued interest is a result of settlement of various liabilities. At June 30, 2013, we owed $2,892,814, to various investors from whom we had borrowed funds in the form of either unsecured or short-term advances.

Capital Requirements

In conjunction with our efforts to improve our results of operations, we are also actively seeking infusions of capital from investors and are seeking sources to repay our existing convertible debentures.  In our current financial condition and with ongoing activities substantially dependent on the outcome of the Playboy litigation, it is unlikely that we will be able to obtain additional debt financing.  Even if we did acquire additional debt, we would be required to devote additional cash flow to servicing the debt and securing the debt with assets.  Accordingly, we are looking to obtain equity financing to meet our anticipated capital needs.  We cannot assure that we will be successful in obtaining such capital.  If we issue additional shares for debt and/or equity, this will dilute the value of our common stock and existing shareholders’ positions.

We cannot assure that we will be successful in obtaining more debt and/or equity financing in the future or that our results of operations will materially improve in either the short or the long term.  If we fail to obtain such financing and improve our results of operations, we will be unable to meet our obligations as they become due.  These conditions raise substantial doubt about our ability to continue as a going concern.

Convertible Debentures

We had outstanding convertible debentures with an aggregate outstanding balance of $3,469,600 as of June 30, 2013, including accrued interest of $770,372.  We have entered into forbearance agreements following our previous defaults in payments in order to obtain extended payment terms. Under our most

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recent agreement reached with the lender in the second quarter of 2013, we are required to make monthly payments, to be applied first to accrued interest and then to principal, in the amount of $100,000 per month, commencing in April 2013.  The amount of our required monthly cash payments is reduced in an amount equal to the amount credited to the lender against the obligation as a result of the lender’s exercise of the right to convert the outstanding balance due under the debentures into common stock.  Any amount credited against the debenture obligation in excess of $100,000 per month is credited against the amounts due in the next succeeding month.  During the six months ended June 30, 2013, we issued common stock valued at $800,712, which balance includes common stock valued at $675,176 towards the required monthly payments.  The amount of cash required to meet our payment obligations under the debentures will depend on the lender’s decision to convert amounts to common stock, which will in turn depend on the trading market prices and volumes for our common stock, over which we have no control.

.  

Critical Accounting Estimates

Revenue Recognition - Revenue is recognized when products are shipped.  Title passes to the customer or independent sales representative at the time of shipment.  Returns for defective items are repaired and sent back to the customer.  Historically, expenses associated with returns have not been significant and have been recognized as incurred.

Shipping and handling fees are included as part of net sales.  The related freight costs and supplies directly associated with shipping products to customers are included as a component of cost of goods sold.

We sold our Salt Lake City, Utah, building in a sale/leaseback transaction and reported the gain on the sale as deferred revenue to be recognized over the term of lease pursuant to Financial Accounting Standards Board Accounting Standards Codification, or ASC, 840-10, Accounting for Leases.  The lease agreement was terminated during 2011 and the remainder of the deferred revenue was recognized upon this termination event.

We have entered into a Manufacturing, Marketing and Distribution Agreement with PlayBev, a consolidated variable interest entity, whereby we are the vendor of record in providing initial development, promotional, marketing, and distribution services.  Accordingly, all amounts billed to PlayBev in connection with the development and marketing of its new energy drink have been eliminated in consolidation.

Financial Instruments with Derivative Features - We do not hold or issue derivative instruments for trading purposes.  However, we have financial instruments that are considered derivatives or contain embedded features subject to derivative accounting.  Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in our balance sheet.  We measure these instruments at their estimated fair value and recognize changes in their estimated fair value in results of operations during the period of change.  We have estimated the fair value of these embedded derivatives using the Black-Scholes model.  The fair values of the derivative instruments are measured each quarter.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

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ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer / Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of June 30, 2013.  Based on our evaluation, our Chief Executive Officer / Chief Financial Officer has concluded that our disclosure controls and procedures were not effective at June 30, 2013, due to the fact that the material weaknesses in our internal control over financial reporting described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012, had not been remediated as of June 30, 2013.

These weaknesses are continuing.  Management and the Board of Directors are aware of these weaknesses that result because of limited resources and staff.  Efforts to design and implement controls and processes have been put on hold due to limited resources, but we anticipate a renewed focus on this effort in the near future.  Due to our limited financial and managerial resources, we cannot assure when we will be able to implement effective internal controls over financial reporting.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred in the second quarter of 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

No material developments.

ITEM 5. OTHER INFORMATION

As of July 31, 2013, YA Global Investments, L.P., and its assigns converted an aggregate of $333,700 in amounts due under outstanding convertible debentures originally issued to YA Global’s predecessor-in-interest in 2005 and 2006, and subsequently amended, restated, and consolidated, to 333,700,000 shares of CirTran Corporation’s common stock at the conversion price set forth in the debentures.

In each of the above transactions, the convertible debentures exchanged for the common stock issued had been issued as restricted securities taken for investment with a restrictive legend to the effect that such securities were restricted.  The issuance of the original securities was effected in reliance on the exemption from registration provided in Section 4(2) of the Securities Act of 1933 as transactions not involving any public offering.  The issuance of the common stock in exchange for such previously issued debt securities was effected in reliance on the exemption from registration provided in Section 3(a)(9) of the Securities Act for any security exchanged by the issuer with its existing securities holders when no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange.

As a result of all of the foregoing transactions, as of August 16, 2013, CirTran Corporation had an aggregate of 4,020,491,910 shares issued and outstanding.

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ITEM 6. EXHIBITS

The following exhibits are filed as a part of this report:

Exhibit Number*	Title of Document	Location
Item 31	Rule 13a-14(a)/15d-14(a) Certifications
31.01	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13a-14	This filing.
Item 32	Section 1350 Certifications
32.01	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief Financial Officer)	This filing.
Item 101	Interactive Data File
101	Interactive Data File	This filing

_______________

*      All exhibits are numbered with the number preceding the decimal indicating the applicable SEC reference number in Item 601 and the number following the decimal indicating the sequence of the particular document. 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amended report to be signed on its behalf by the undersigned thereunto duly authorized.

	CIRTRAN CORPORATION
		(Registrant)
Date: August 16, 2013	By:	/s/ Iehab Hawatmeh
		Iehab Hawatmeh, President, Chief Financial Officer (Principal Executive Officer, Principal Financial Officer)

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EX-31

Exhibit 31.01

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

                I, Iehab Hawatmeh, certify that:

                1.             I have reviewed this Quarterly Report on Form 10-Q of CirTran Corporation;

                2.             Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

                3.             Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

                4.             The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

                (a)           designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

                (b)           designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

                (c)           evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

                (d)           disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

                5.             The registrant’s other certifying officer(s) and I have disclosed, based on 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 16, 2013

/s/ Iehab Hawatmeh

Iehab Hawatmeh

President, Chief Executive Officer, and Chief Financial Officer

(Principal Executive Officer and Principal Financial Officer)

EX-32

EXHIBIT 32.01

                                                                        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 CirTran Corporation on Form 10-Q for the period ended June 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Iehab Hawatmeh, Chief Executive Officer and Chief Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002, that:

(1)           The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 16, 2013

/s/ Iehab Hawatmeh

Iehab Hawatmeh

Chief Executive Officer and Chief Financial Officer

(Principal Executive Officer and Principal Financial Officer)

XML

SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

SEGMENT INFORMATION

NOTE 12 - SEGMENT INFORMATION

Segment information has been prepared in accordance with ASC 280-10, Disclosure about Segments of an Enterprise and Related Information. The Company has four reportable segments: electronics assembly, contract manufacturing, marketing and media, and beverage distribution. The electronics assembly segment manufactures and assembles circuit boards and electronic component cables. The contract manufacturing segment manufactures, either directly or through foreign subcontractors, various products under manufacturing and distribution agreements. The marketing and media segment provides marketing services to online retailers, along with beverage development and promotional services to PlayBev. The beverage distribution segment manufactures, markets, and distributes Playboy-licensed energy drinks domestically and internationally.

The accounting policies of the segments are consistent with those described in the summary of significant accounting policies. The Company evaluates performance of each segment based on earnings or loss from operations. Selected segment information is as follows:

		Electronics		Contract		Marketing		Beverage
		Assembly		Manufacturing		and Media		Distribution		Total
Three Months Ended June 30, 2013
Sales to external customers	$	-	$	26,080	$	-	$	1,070,611	$	1,096,691
Segment income (loss)		276,804		26,376		(25)		527,231		830,386
Segment assets		405,365		49,346		-		820,769		1,275,480
Depreciation and amortization		4,269		7,591		-		-		11,860
Three Months Ended June 30, 2012
Sales to external customers	$	-	$	24,541	$	-	$	291,214	$	315,755
Segment income (loss)		(47,857)		(16,656)		15		(640,989)		(705,487)
Segment assets		350,865		69,750		-		477,350		897,965
Depreciation and amortization		5,156		17,180		-		-		22,336
Six Months Ended June 30, 2013
Sales to external customers	$	-	$	57,212	$	-	$	1,907,631	$	1,964,843
Segment income (loss)		298,313		13,922		(25)		950,656		1,262,866
Segment assets		405,365		49,346		-		820,769		1,275,480
Depreciation and amortization		8,600		18,398		-		-		26,998
Six Months Ended June 30, 2012
Sales to external customers	$	-	$	55,625	$	-	$	878,830	$	934,455
Segment income (loss)		(302,531)		(14,733)		-		(1,676,319)		(1,993,583)
Segment assets		350,865		69,750		-		477,350		897,965
Depreciation and amortization		10,321		39,524		-		-		49,845

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Statement [Abstract]
Net sales	$ 1,096,691	$ 315,755	$ 1,964,843	$ 934,455
Cost of sales	(195,953)	(8,814)	(430,468)	(246,964)
Royalty expense		(5,011)	(37,494)	(526,015)
Gross profit	900,738	301,930	1,496,881	161,476
Operating expenses
Selling, general and administrative expenses	818,704	672,868	1,652,156	1,411,347
Non-cash compensation expense	1,000	19,183	30,872	39,080
Total operating expenses	819,704	692,051	1,683,028	1,450,427
Income (loss) from operations	81,034	(390,121)	(186,147)	(1,288,951)
Other income (expense)
Interest expense	(156,115)	(282,441)	(365,610)	(538,102)
Gain on settlement of debt	1,405,205		1,443,557
Gain (loss) on derivative valuation	365,222	(32,925)	371,066	(166,530)
Total other income (expense), net	1,614,312	(315,366)	1,449,013	(704,632)
Net income (loss)	1,695,346	(705,487)	1,262,866	(1,993,583)
Net loss (income) attributable to non-controlling interest	(1,164,172)	115,970	(837,268)	269,940
Net income (loss) attributable to CirTran Corporation and subsidiaries	$ 531,174	$ (589,517)	$ 425,598	$ (1,723,643)
Basic and diluted income (loss) per common share (in dollars per share)	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Basic and diluted weighted-average common shares outstanding (in shares)	3,393,814,977	1,881,061,840	3,122,082,670	1,863,764,859

XML

COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 5 - COMMITMENTS AND CONTINGENCIES

Litigation and Claims - In the ordinary course of business, the Company and its subsidiaries are from time to time defendants in or parties to pending and threatened legal actions and proceedings. In certain of these actions and proceedings, claims are asserted against the Company and its subsidiaries.

In view of the inherent difficulty of predicting the outcome of such matters, the Company cannot state with confidence what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be or what the eventual loss related to each pending matter may be. Based on current knowledge, management does not believe that liabilities, if any, arising from pending litigation or regulatory matters will have a material adverse effect on the consolidated financial position or liquidity of the Company, but may be material to the Company's operating results for any particular reporting period.

Registration Rights Agreements - In connection with the Company’s issuance of convertible debentures to YA Global Investments, L.P., formerly known as Cornell Capital Partners, L.P. (“YA Global”), the Company granted to YA Global certain registration rights, pursuant to which the Company agreed to file a registration statement to register the resale of shares of the Company’s common stock issuable upon conversion of the debentures. The Company agreed to keep the registration statement effective until all of the shares issuable upon conversion of the debenture have been sold. The Company has not accrued a liability for potential losses.

Previously, YA Global agreed to extensions of the filing deadlines inherent in the terms of the convertible debentures mentioned above. On January 24, 2011, the Company and YA Global entered into a forbearance agreement related to the convertible debentures issued by the Company to YA Global or its predecessor entities (the “2011 Forbearance Agreement”), as discussed below.

YA Global Forbearance Agreements - On September 25, 2010, YA Global filed a lawsuit against the Company asserting claims for breach of contract, breaches of the uniform commercial code, and replevin. YA Global sought a judgment in the amount of $4,193,380, plus interest and attorneys fees, as well as a writ of replevin to compel the Company to turn over equipment and other property that YA Global claims was pledged as collateral to secure obligations owing to YA Global.

On January 24, 2011, the Company entered into confession of judgment in favor of YA Global. On February 23, 2011, the court entered judgment based on the confession of judgment against the Company in the principal amount of $3,161,354, plus interest of $825,858.

On July 22, 2011, YA Global filed a motion in the Advanced Beauty Solutions, or ABS, lawsuit (discussed below) seeking an order clarifying its position with respect to ABS and staying enforcement of that court’s order that the Company pay approximately $35,000 in legal fees to ABS. In its motion, YA Global notified the Company that it intended to conduct a secured party’s public auction of all of the Company’s assets. YA Global also informed the Company that it had defaulted under the 2011 Forbearance Agreement and declared that all of the Company’s obligations to YA Global were immediately due and owing. Further, YA Global stated that it intended to commence action to collect on the Company’s obligations and instructed it to assemble its assets.

At a hearing held on August 3, 2011, in the ABS reorganization proceeding on YA Global’s motion to stay enforcement, YA Global noted that the date of the proposed secured party’s public auction was August 30, 2011. At the same time, YA Global notified the Company that the proposed sale of assets would be held on August 30, 2011.

At the hearing in the ABS matter, the Bankruptcy Court denied YA Global’s motion to stay the payment of attorneys’ fees by the Company. Subsequently, the parties to the January 2011 settlement with YA Global entered into an agreement whereby YA Global agreed to cancel the proposed asset sale without waiver.

On September 30, 2011, YA Global directed the Company to assemble the collateral in order to enable it to take possession on or before October 6, 2011. Following negotiations with YA Global, the Company confirmed its indebtedness to YA Global and arranged for it to take possession of collateral on October 17, 2011, on which date, all accounts receivable, collections, and other proceeds and products of the collateral would be held in trust by the Company for YA Global and immediately forwarded to it. Before the Company was required to surrender possession of the collateral, it initiated negotiations to obtain YA Global’s forbearance from collection.

On March 22, 2012, the Company entered into a formal forbearance agreement with YA Global, dated as of March 1, 2012 (the “2012 YA Global Forbearance Agreement”), in which it ratified its previous obligations under the debentures and agreed to pay the debentures under the following payment plan: $25,000 at signing the 2012 YA Global Forbearance Agreement, $25,000 per month in March through June 2012, $50,000 per month in July through September 2012, $75,000 in the months of October and November 2012, $100,000 per month in the months of December 2012 through May 2013, $125,000 per month in the months of June through December 2013, and the balance in December 2014 (the “Extended Termination Date”). In addition to the above minimum payments to YA Global, the Company is required to pay monthly excess cash flow, to the extent cumulatively available, consisting of consolidated earnings before interest, taxes, depreciation and amortization, less cash deposits for product orders received but not yet shipped, actual cash taxes paid, actual cash principal and interest paid, and reasonable out-of-pocket cash paid together with reasonable cash reserves in an amount not to exceed 5% of total net sales, provided that such excess cash flow payments shall not to exceed $50,000 in March 2012 and $25,000 per month in April through September 2012.

The Company continues to have the right, subject to the consent of YA Global, to pay all or any portion of the payments listed above in common stock, with the conversion price to be used to determine the number of shares being equal to the lowest closing bid price of the Company’s common stock during the 20 trading days prior to the payment date. The amount applied as a payment on the note and accrued interest will be adjusted to the value of the actual proceeds from the sale of the stock by YA Global, less costs associated with the sale.

YA Global agreed to forbear from enforcing its rights and remedies as a result of the existing defaults and/or converting the debentures into shares of the Company’s common stock, until the earlier of the Company’s default under the 2012 YA Global Forbearance Agreement or the Extended Termination Date.

On February 22, 2013, the Company entered into a Ratification Agreement with YA Global (the “2013 Ratification Agreement”). Under the 2013 Ratification Agreement, the Company ratified the obligations under three existing Convertible Debentures dated May 26, 2005, December 30, 2005, and August 23, 2006, and agreed to amend, restate, and consolidate the obligations evidenced thereby into a Consolidated Debenture.

The 2013 Ratification Agreement also provides for a new payment schedule under the Consolidated Debenture that replaces the payment schedule that had been agreed to in the 2012 YA Global Forbearance Agreement among the parties. Under the 2013 Ratification Agreement payment schedule, the Company is required to make monthly payments, to be applied first to accrued interest and then to principal, in the amount of $100,000 per month, commencing in April 2013. The amount of the Company’s required monthly cash payment shall be reduced in an amount equal to the amount credited to the lender against the obligation as a result of the lender’s exercise of the right to convert the outstanding balance due under the debentures into common stock, as provided in the original convertible debentures as well as in the Consolidated Debenture. Any amount credited against the debenture obligation in excess of $100,000 per month shall be credited against the amounts due in the next succeeding month.

During the six months ended June 30, 2013, the Company issued common stock valued at $800,712, which balance includes common stock valued at $675,176 towards the required monthly payments.

Delinquent Payroll Taxes, Interest, and Penalties - In November 2004, the IRS accepted the Company’s Amended Offer in Compromise (the “Offer”) to settle delinquent payroll taxes, interest, and penalties. The acceptance of the Offer required the Company to pay $500,000. Additionally, the Offer required the Company to remain current in its payment of taxes for five years and not claim any net operating losses for the years 2001 through 2015 or until the Company pays taxes on future profits in an amount equal to the taxes waived by the Offer of $1,455,767. In June 2013, the Company entered into a partial installment agreement to pay $768,526 in unpaid 2009 payroll taxes. The installment agreement requires the Company to pay the IRS 5% of cash deposits. The monthly payments are to continue until the account balances are paid in full or until the collection statute of limitation expires on October 6, 2020.

Disputed Account Payable - The Company is in disagreement with its former legal counsel over the amount due to this provider for billed services, charges, and interest expense. The Company is vigorously working with this provider to settle the outstanding balance. Management assesses the likelihood to be remote that it will not be able to settle the balance at or below the currently accrued balance.

Employment Agreements - On August 1, 2009, the Company entered into a new employment agreement with Mr. Hawatmeh, the Company’s President. The term of the employment agreement continues until August 31, 2014, and automatically extends for successive one-year periods, with an annual base salary of $345,000. The employment agreement also grants to Mr. Hawatmeh options to purchase a minimum of 6,000,000 shares of the Company’s stock each year, with the exercise price of the options being the market price of the Company’s common stock as of the grant date. The employment agreement also provides for health insurance coverage, cell phone, car allowance, life insurance, and director and officer liability insurance, as well as any other bonus approved by the Board. The employment agreement includes additional incentive compensation as follows: a quarterly bonus equal to 5% of the Company’s earnings before interest, taxes, depreciation, and amortization for the applicable quarter; bonus(es) equal to 1.0% of the net purchase price of any acquisitions completed by the Company that are directly generated and arranged by Mr. Hawatmeh; and an annual bonus (payable quarterly) equal to 1% of the gross sales, net of returns and allowances, of all beverage products of the Company and its affiliates for the most recent fiscal year. During the six months ended June 30, 2013 and 2012, the Company incurred $10,171 and $19,183, respectively, of noncash compensation expense related to accrual for employee stock options to be awarded per the employment contract with the president of the Company.

Pursuant to the employment agreement, Mr. Hawatmeh’s employment may be terminated for cause or upon death or disability, in which event, the Company is required to pay Mr. Hawatmeh any unpaid base salary and unpaid earned bonuses. In the event that Mr. Hawatmeh is terminated without cause, the Company is required to pay to Mr. Hawatmeh: (i) within 30 days following such termination, any benefit, incentive, or equity plan, program, or practice (the “Accrued Obligations”) paid when the amount would have been paid Mr. Hawatmeh if employed; (ii) within 30 days following such termination (or on the earliest later date as may be required by Internal Revenue Code Section 409A to the extent applicable), a lump sum equal to 30 months of annual base salary; (iii) bonus(es) owing under the employment agreement for the two-year period after the date of termination (net of bonus amounts paid as Accrued Obligations) based on actual results for the applicable quarters and fiscal years; and (iv) within 12 months following such termination (or on the earliest later date as may be required by Internal Revenue Code Section 409A to the extent applicable), a lump sum equal to 30 months of annual base salary; provided that if Mr. Hawatmeh is terminated without cause in contemplation of, or within one year after, a change in control, then two times such annual base salary and bonus payment amounts.

On May 1, 2009, PlayBev, a consolidated variable interest entity, entered into compensation agreements with its managers, Mr. Hawatmeh and Mr. Nora. The agreed compensation consists of a monthly fee of $10,000 for each manager, reimbursement of reasonable expenses on its behalf, and a car allowance for Mr. Nora of $1,000 per month to cover the cost of use, fuel, and repairs. The Company has accrued $1,073,150 in compensation, which is included in related-party payables as of June 30, 2013.

Advanced Beauty Solutions, LLC - In connection with prior litigation with ABS, ABS claimed nonperformance by the Company and filed an adversary proceeding in its bankruptcy case proceeding in the United States Bankruptcy Court, Central District of California, San Fernando Valley Division. On March 17, 2009, the Bankruptcy Court entered judgment in favor of ABS and against the Company in the amount of $1,811,667, plus interest. On September 11, 2009, the Bankruptcy Court denied the Company’s motion to set aside the judgment.

On September 8, 2010, the Company executed an Assignment of Copyrights, thereby assigning Copyright Registration No. TX-6-064-955, Copyright Registration No. TX-6-064-956, and Copyright to the True Ceramic Pro - Live Ops (TCPS) infomercial and related master tapes (collectively the “Copyrights”) to ABS, without reservation or exclusion, making ABS the owner of the Copyrights.

On February 23, 2011, the Company filed a Motion to Declare Judgment Fully Satisfied or Alternatively to Recoup Mutual Debts, requesting that the court determine that its assignment of the Copyrights resulted in full satisfaction of the ABS judgment. On March 3, 2011, ABS brought a Motion for Order to Show Cause re Civil Contempt alleging that the Company had failed to make payments on ABS’s judgment in violation of the court’s orders. At the hearing on April 6, 2011, the court denied the motion to declare the judgment fully satisfied and granted ABS’s motion, but did not hold the Company in civil contempt. The court also set a hearing on the ABS Motion for the Order to Show Cause for July 8, 2011, regarding the Company’s compliance with collection orders, which the parties stipulated should be postponed until August 3, 2011. The parties attended mediation on July 11, 2011, but no formal settlement resulted. At the hearing in August, the court found that a basis existed to hold the Company in contempt and set an evidentiary hearing for October 6, 2011, to determine whether to issue a contempt citation. The Company appealed the denial of its motion to declare judgment satisfied.

On March 22, 2012, the Company and ABS entered into a formal forbearance agreement, dated as of March 1, 2012 (the “ABS Forbearance Agreement”), whereby ABS agreed to take no further judgment enforcement actions in consideration of the payment of $25,000 upon execution of the definitive ABS Forbearance Agreement and satisfaction of applicable conditions precedent. The ABS Forbearance Agreement calls for the Company to pay $7,500 per month for 46 consecutive months (except for a payment of $15,000 in December 2012), commencing in March 2012, with the unpaid balance, as finally determined as provided below, due and payable in January 2016. No interest on the principal would accrue unless the note is in default, in which case, it would bear interest at 10% per annum from the date of the ABS Forbearance Agreement. In addition, the Company stipulated to an additional judgment for attorney’s fees incurred in negotiating the ABS Forbearance Agreement and entering into the related definitive agreements and in related post-judgment collection efforts. The obligation to pay $1,835,000 under the ABS Forbearance Agreement would be secured by an encumbrance on all of the Company’s assets, subject to a prior lien and encumbrance in favor of YA Global.

The principal amount of $1,835,000 due under the ABS Forbearance Agreement would be reduced by the greater of the amount of credit granted in the bankruptcy proceedings for the value of the intellectual property the Company previously conveyed to ABS and the amount received by ABS from the sale of such intellectual property to a third party during the term of the ABS Forbearance Agreement, plus the amount of any distribution to which the Company is entitled as a creditor of ABS, provided, however, that in no event would the amount due under the ABS Forbearance Agreement be reduced below $90,000, which is the amount payable during the first 12 months under the ABS Forbearance Agreement. ABS entered into a subordination agreement subordinating the obligation under the ABS Forbearance Agreement in favor of the obligations and first-priority security interest of YA Global. The Company conveyed to ABS the trademarks and intellectual property previously conveyed by ABS to the Company.

The Company’s appeal of the approximately $1.8 million judgment has been remanded in the ABS bankruptcy proceedings to conclusively determine the amount of credit due the Company for the conveyance of the intellectual property. Except for the determination of the fair market value of the intellectual property and any enforcement or collection proceedings that may be required under the ABS Forbearance Agreement, all litigation and disputes between ABS and its affiliates, on the one hand, and the Company and its affiliates, on the other hand, would be dismissed, including the pending order to show cause regarding contempt against the Company, its subsidiaries, and its President.

The Company has assigned to ABS its creditor claim against the estate of ABS, to the extent of the balance due under the ABS Forbearance Agreement. Any distribution from the ABS estate in excess of the adjusted amounts due under the ABS Forbearance Agreement will be paid to the Company. Pending the determination of the amount of the credit due for the value of the intellectual property conveyed, the Company accrued a balance of $90,000 for the minimum required payment under the ABS Forbearance Agreement. It is reasonably possible that this estimate may change in the near future based on the events of the ABS settlement.

As part of ABS Forbearance Agreement, among other things, the Company agreed to a settlement amount that is to be reduced by any distribution to which the Company was entitled as a creditor of ABS. Under the ABS Forbearance Agreement the minimum amount due ABS is $90,000, which is the amount payable during the first 12 months under the ABS Forbearance Agreement. The Company accrued $90,000 as of December 31, 2012, and made payments of $70,000. The royalty accrual as of June 30, 2013, was $20,000.

Play Beverages, LLC, et al., v. Warner K. Depuy, et al. - PlayBev alleged tortuous interference with contractual relations, breaches of fiduciary duty, and fraud and negligent misrepresentations and sought a declaratory judgment determining the rights of the parties, damages to be determined at trial, costs, and attorney’s fees. A default certificate was filed by the plaintiffs for the failure of the defendants to respond and then withdrawn. Under a settlement and release agreement in April 2013, the parties exchanged mutual general releases without the payment by any party of any amounts to any other. Accordingly, PlayBev was relieved of approximately $1.4 million in amounts due LIB-MP without any payment.

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REALIZATION OF ASSETS (Detail Textuals) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Realization Of Assets [Abstract]
Net income (loss)	$ 1,695,346	$ (705,487)	$ 1,262,866	$ (1,993,583)
Accumulated deficit	(48,089,198)		(48,089,198)		(48,514,796)
Net cash used in operating activities			15,948	(531)
Working capital	$ (23,788,078)		$ (23,788,078)		$ (26,458,490)

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GEOGRAPHIC INFORMATION

6 Months Ended

Jun. 30, 2013

Geographic Information [Abstract]

GEOGRAPHIC INFORMATION

NOTE 13 - GEOGRAPHIC INFORMATION

The Company currently maintains $18,652 of capitalized tooling costs in China.  All other revenue-producing assets are located in the United States of America.  Revenues are attributed to the geographic areas based on the location of the customers purchasing the products.

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GEOGRAPHIC INFORMATION (Detail Textuals) (China, USD $)	6 Months Ended
	Jun. 30, 2013
China
Revenues from External Customers and Long-Lived Assets [Line Items]
Capitalized tooling costs	$ 18,652

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NOTES PAYABLE (Detail Textuals) (18% Promissory notes payable, USD $)	1 Months Ended
	Jan. 31, 2013	Feb. 29, 2012
18% Promissory notes payable
Short-term Debt [Line Items]
Interest rate		18.00%
Holding period of promissory note		90 days
Amount of promissory note issued		$ 30,000
Borrowing fee of promissory note		$ 5,000
Conversion of promissory note into shares	32,000,000

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RELATED-PARTY TRANSACTIONS (Detail Textuals 1) (USD $)				12 Months Ended		6 Months Ended	1 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Promissory Notes	Dec. 31, 2007 Family Member Of President Promissory Notes At Interest Rate Of 10 Percent Due On Demand May 2008	Jun. 30, 2013 Family Member Of President Promissory Notes At Interest Rate Of 10 Percent Due On Demand May 2008	Jun. 30, 2013 Family Member Of President Promissory Notes At Interest Rate Of 12 Percent Due On Demand April 2008	Mar. 31, 2008 Family member with four directors Promissory Notes	Mar. 31, 2008 Family member Promissory Notes
Related Party Transaction [Line Items]
Interest rate				10.00%
Amount of promissory note issued				$ 300,000		$ 300,000	$ 315,000	$ 105,000
Note payable to stockholders and members	$ 251,833	$ 576,833	$ 72,465		$ 151,833
Percentage of borrowing fee						5.00%
Rate of interest during the period						12.00%

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RELATED-PARTY TRANSACTIONS (Detail Textuals) (Fadi Nora, USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2007
Fadi Nora
Related Party Transaction [Line Items]
Percentage of gross sales entitled as quarterly bonus		0.50%
Compensation payable to related party	$ 65,967
Unsecured advances payable to related party	1,034,929
Percentage of borrowing fee	5.00%
Accrued liabilities to related party	321,982
Number of options issued	2,400,000
Number of shares purchased to grant options	2,400,000
Accrued options to related party	2,400,000
Fair market value of accrued options	$ 4,069
Expected term for options	7 years
Estimated volatility	224.82%
Discount rate	0.00%

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SEGMENT INFORMATION (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Segment Reporting Information [Line Items]
Sales to external customers	$ 1,096,691	$ 315,755	$ 1,964,843	$ 934,455
Segment income (loss)	1,695,346	(705,487)	1,262,866	(1,993,583)
Depreciation and amortization			26,998	49,845
Operating segments
Segment Reporting Information [Line Items]
Sales to external customers	1,096,691	315,755	1,964,843	934,455
Segment income (loss)	830,386	(705,487)	1,262,866	(1,993,583)
Segment assets	1,275,480	897,965	1,275,480	897,965
Depreciation and amortization	11,860	22,336	26,998	49,845
Operating segments | Electronics Assembly
Segment Reporting Information [Line Items]
Sales to external customers
Segment income (loss)	276,804	(47,857)	298,313	(302,531)
Segment assets	405,365	350,865	405,365	350,865
Depreciation and amortization	4,269	5,156	8,600	10,321
Operating segments | Contract Manufacturing
Segment Reporting Information [Line Items]
Sales to external customers	26,080	24,541	57,212	55,625
Segment income (loss)	26,376	(16,656)	13,922	(14,733)
Segment assets	49,346	69,750	49,346	69,750
Depreciation and amortization	7,591	17,180	18,398	39,524
Operating segments | Marketing and Media
Segment Reporting Information [Line Items]
Sales to external customers
Segment income (loss)	(25)	15	(25)
Segment assets
Depreciation and amortization
Operating segments | Beverage Distribution
Segment Reporting Information [Line Items]
Sales to external customers	1,070,611	291,214	1,907,631	878,830
Segment income (loss)	527,231	(640,989)	950,656	(1,676,319)
Segment assets	820,769	477,350	820,769	477,350
Depreciation and amortization

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COMMITMENTS AND CONTINGENCIES (Detail Textuals 2) (Delinquent payroll taxes interest and penalties, USD $)	1 Months Ended		6 Months Ended
	Apr. 30, 2013	Nov. 30, 2004	Jun. 30, 2013
Delinquent payroll taxes interest and penalties
Commitments and Contingencies [Line Items]
Payment for acceptance of Delinquent payroll taxes, interest and penalties offer		$ 500,000
Period of required offer to remain current in payment of taxes		5 years
Amount of taxes waived		1,455,767
Unpaid 2009 payroll taxes			768,526
IRS of cash deposits			5.00%
Amount relieved under settlement and release agreement	$ 1,400,000

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FAIR VALUE MEASUREMENTS (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of derivatives	$ 360,340	$ 829,090
Level 1 | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of derivatives
Level 2 | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of derivatives	360,340	829,090
Level 3 | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of derivatives
Total | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of derivatives	$ 360,340	$ 829,090

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SUBSEQUENT EVENTS (Detail Textuals) (Convertible debt, USD $)	1 Months Ended	5 Months Ended	1 Months Ended
	Jul. 31, 2013 Subsequent event Two unrelated parties	May 31, 2013 YA global investments	Jul. 31, 2013 YA global investments Subsequent event	Jul. 31, 2013 Play Beverages Llc Subsequent event Class A unit
Subsequent Event [Line Items]
Amount of convertible debt converted	$ 20,000	$ 538,412	$ 25,000	$ 350,000
Amount of second convertible debt converted	30,000	95,100	100,000
Amount of third convertible debt converted		$ 67,200	$ 158,700
Numbers of shares issued on debt conversion	50,000,000	538,412,000	283,700,000	53,511
Conversion price	$ 0.001		$ 0.001
Percentage of membership interest				25.00%

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RELATED-PARTY TRANSACTIONS (Detail Textuals 5) (Katana Electronics Llc, USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Katana Electronics Llc
Related Party Transaction [Line Items]
Term of Sublease	2 months
Term of automatic renewal periods	one month each
Base rent under the Sublease per month	$ 8,500
Future operating lease payment per month	5,000
Rent expense	$ 30,000	$ 15,000

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STOCK OPTIONS AND WARRANTS (Details) (Stock options, USD $)	6 Months Ended
	Jun. 30, 2013
Stock options
Shares
Outstanding at December 31, 2012	3,600,000
Stock options granted
Exercised
Expired	(3,600,000)
Outstanding at June 30, 2013
Exercisable at June 30, 2013
Weighted - Average Exercise Price
Outstanding at December 31, 2012	$ 0.0123
Granted
Exercised
Expired	$ 0.0123
Outstanding at June 30, 2013
Exercisable at June 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Weighted-average remaining contractual life for options outstanding	5 days
Aggregate intrinsic value for options, outstanding at December 31, 2012
Aggregate intrinsic value for options, outstanding at June 30, 2013
Aggregate intrinsic value for options, exercisable at June 30, 2013

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INVENTORIES (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Inventory Disclosure [Abstract]
Raw Materials	$ 1,674,500	$ 1,691,500
Work in Process	169,391	221,225
Finished Goods	464,488	442,017
Allowance / Reserve	(2,255,795)	(2,256,399)
Totals	$ 52,584	$ 98,343

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BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2013

Organization, Consolidation and Presentation Of Financial Statements [Abstract]

BASIS OF PRESENTATION

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements include the accounts of CirTran Corporation and its subsidiaries (the “Company”).  These financial statements have been prepared in accordance with Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”).  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations.  These statements should be read in conjunction with the Company’s annual financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.  In particular, the Company’s significant accounting policies were presented as Note 2 to the consolidated financial statements in that Annual Report.  In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying condensed consolidated financial statements and consist of only normal recurring adjustments.  The results of operations presented in the accompanying condensed consolidated financial statements for the six months ended June 30, 2013, are not necessarily indicative of the results that may be expected for the 12 months ending December 31, 2013.

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INVENTORIES

6 Months Ended

Jun. 30, 2013

Inventory Disclosure [Abstract]

INVENTORIES

NOTE 3 - INVENTORIES

Inventories are stated at the lower of average cost or market and consisted of the following:

		June 30,		December 31,
		2013		2012
Raw Materials	$	1,674,500	$	1,691,500
Work in Process		169,391		221,225
Finished Goods		464,488		442,017
Allowance / Reserve		(2,255,795)		(2,256,399)
Totals	$	52,584	$	98,343

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NOTES PAYABLE

6 Months Ended

Jun. 30, 2013

Notes Payable [Abstract]

NOTES PAYABLE

NOTE 6 - NOTES PAYABLE

In February 2012, the Company issued an 18% interest, 90-day, $30,000 promissory note to an investor.  The principal balance included a $5,000 borrowing fee.  The promissory note along with accrued interest was converted to 32,000,000 shares of stock in January 2013.  There was no outstanding balance as of June 30, 2013.

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RELATED-PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

RELATED-PARTY TRANSACTIONS

NOTE 4 – RELATED-PARTY TRANSACTIONS

Transactions Involving Officers, Directors, and Stockholders - In 2007, the Company appointed Fadi Nora to its Board of Directors.  In addition to compensation the Company normally pays to nonemployee members of the Board, Mr. Nora is entitled to a quarterly bonus equal to 0.5% of any gross sales earned by the Company directly through Mr. Nora’s efforts.  As of June 30, 2013, the Company owed $65,967 under this arrangement.  As of June 30, 2013, the Company owed Mr. Nora $1,034,929 in the form of unsecured advances.  These advances and short-term bridge loans were approved by the Board of Directors under a 5% borrowing fee.  The borrowing fees were waived by Mr. Nora on these loans.  In addition, the Company owed Mr. Nora $321,982 in accrued liabilities as of June 30, 2013, for selling, general, and administrative expenses that were paid for by Mr. Nora on a personal credit card.

The Company has agreed to issue 2,400,000 options to Mr. Nora as compensation for services provided as a Director of the Company.  The terms of the director agreement require the Company to grant to Mr. Nora options to purchase 2,400,000 shares of the Company’s stock each year, with the exercise price of the options being the market price of the Company’s common stock as of the grant date.  During the six months ended June 30, 2013, the Company accrued for 2,400,000 stock options relating to the director agreement with Mr. Nora.  The fair market value of the options was $4,069, using the following assumptions: 7.0-year term, estimated volatility of 224.82%, and a discount rate of 0.0% (see also Note 11).

In 2007, the Company issued a 10% promissory note to a family member of the Company President in exchange for $300,000.  The note was due on demand after May 2008.  During the six months ended June 30, 2013, the Company made no payments towards the outstanding note.  At June 30, 2013, the principal amount owing on the note was $151,833.  On March 31, 2008, the Company issued to this same family member, along with four other Company shareholders, promissory notes totaling $315,000.  The family member’s note was for $105,000.  Under the terms of all the notes, the Company received total proceeds of $300,000 and agreed to repay the amount received plus a 5% borrowing fee.  The notes were due April 30, 2008, after which they were due on demand, with interest accruing at 12% per annum.  During the six months ended June 30, 2013, the Company made no payments towards the outstanding notes.  The principal balance owing on the promissory notes as of June 30, 2013, totaled $72,465.

On April 2, 2009, the Company President and a Director of the Company borrowed from a third party a total of $890,000 in the form of four short-term promissory notes.  The Company President and the Director of the Company signed personally for the notes.  Because the loans were used to pay obligations of the Company, the Company has assumed full responsibility for the notes.  Two of the notes were for a term of 60 days, with a 60-day grace period; a third note was for a term of 90 days; and a fourth note was for 24 days.  Loan fees totaling $103,418 were incurred with the issuance of the notes and are payable upon maturity of the notes.  At June 30, 2013, two of the notes had a combined remaining balance of $270,000 and comprised a portion of short-term advances payable of $2,892,814.  As of June 30, 2013, these notes were in default and are accruing interest at the default rate of 36% per year.

The Company has agreed to issue 6,000,000 options each year to the Company President as compensation for services provided as an officer of the Company.  The terms of the employment agreement require the Company to grant to the Company President options to purchase 6,000,000 shares of the Company’s stock each year, with the exercise price of the options being the market price of the Company’s common stock as of the grant date.  During the six months ended June 30, 2013, the Company accrued for 6,000,000 stock options relating to the employee agreement with Mr. Hawatmeh.  The fair market value of the options was $10,171, using the following assumptions: estimated 7.0-year term, estimated volatility of 224.82%, and a discount rate of 0.0% (see also Note 11).

As of June 30, 2013, the Company owed the Company President a total of $88,564 in short-term advances payable and 36,000,000 stock options with an aggregated fair value at time of grant of $154,537.  These advances and short-term bridge loans were approved by the Board of Directors under a 5% borrowing fee.  The borrowing fees were waived by the Company’s President on these loans.

Sublease - In an effort to operate more efficiently and focus resources on higher margin areas of the Company’s business, on March 5, 2010, the Company and Katana Electronics, LLC, a Utah limited liability company (“Katana”), entered into certain agreements (collectively, the “Agreements”) to reduce the Company’s costs.  The Agreements include an Assignment and Assumption Agreement, an Equipment Lease, and a Sublease Agreement relating to the Company’s property.  Pursuant to the terms of the Sublease, the Company agreed to sublease a certain portion of the Company’s premises to Katana, consisting of the warehouse and office space used as of the close of business on March 4, 2010.  The term of the Sublease was for two months with automatic renewal periods of one month each.  The base rent under the Sublease is $8,500 per month.  The Sublease contains normal and customary use restrictions, indemnification rights and obligations, default provisions, and termination rights.  Under the Agreements signed, the Company continues to have rights to operate as a contract manufacturer in the future in the U.S. and offshore.  On July 1, 2011, Katana had assumed the full lease payment, and the Company agreed to pay Katana $5,000 per month for the use of office space and utilities.  The Company recorded a rent expense of $30,000 and $15,000 for the six months ended June 30, 2013 and 2012, respectively.

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STOCKHOLDERS' DEFICIT (Detail Textuals) (USD $)	3 Months Ended		6 Months Ended			12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013 Common stock	Dec. 31, 2012 Common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially issuable common shares					3,601,399,910	4,401,029,000
Decreased in stockholders' deficit			$ (425,598)
Net loss attributable to noncontrolling interest	$ 1,164,172	$ (115,970)	$ 837,268	$ (269,940)

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RELATED-PARTY TRANSACTIONS (Detail Textuals 2) (USD $)	0 Months Ended	6 Months Ended
	Apr. 02, 2009 Promissory_note	Jun. 30, 2013 Promissory_note
Short-term promissory notes
Related Party Transaction [Line Items]
Combined remaining balance of the promissory notes		$ 270,000
President and Director | Short-term promissory notes
Related Party Transaction [Line Items]
Amount of promissory note issued	890,000
Number of promissory notes	4
Loan fees	103,418
Short-term advances payable		$ 2,892,814
Number of notes in default		2
Default rate of accruing interest on notes		36.00%
President and Director | First note
Related Party Transaction [Line Items]
Term of promissory notes	60 days
Grace period of promissory notes	60 days
President and Director | Second note
Related Party Transaction [Line Items]
Term of promissory notes	60 days
Grace period of promissory notes	60 days
President and Director | Third note
Related Party Transaction [Line Items]
Term of promissory notes	90 days
President and Director | Fourth note
Related Party Transaction [Line Items]
Term of promissory notes	24 days

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COMMITMENTS AND CONTINGENCIES (Detail Textuals) (Ya global forbearance agreements, USD $)	1 Months Ended
	Jul. 22, 2011	Feb. 23, 2011	Sep. 25, 2010
Ya global forbearance agreements
Loss Contingencies [Line Items]
Loss contingency, damages sought			$ 4,193,380
Principal amount, litigation settlement		3,161,354
Interest amount, litigation settlement		825,858
Legal fees paid to ABS	$ 35,000

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COMMITMENTS AND CONTINGENCIES (Detail Textuals 5) (Litigation with advanced beauty solutions llc, USD $)	1 Months Ended	6 Months Ended
	Mar. 22, 2012	Jun. 30, 2013	Dec. 31, 2012	Mar. 17, 2009
Commitments and Contingencies [Line Items]
Amount of bankruptcy judgment in favor of ABS				$ 1,811,667
Payment made for execution of agreement	25,000
Payment called per month for 46 consecutive months except December 2012	7,500
Payment called for the month of December 2012	15,000
Obligation to pay under the ABS forbearance agreement	1,835,000
Amount payable during the first 12 months under the ABS Forbearance Agreement		90,000
Accrued balance for minimum required payment			90,000
Portion paid from minimum required payments		70,000
Accrued royalties		$ 20,000
Notes payable
Commitments and Contingencies [Line Items]
Interest bearing rate of notes	10.00%

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STOCK OPTIONS AND WARRANTS (Detail Textuals 1) (Warrant, Ya global forbearance agreements)	Jan. 24, 2011
Warrant | Ya global forbearance agreements
Class of Warrant or Right [Line Items]
Number of shares of common stock purchased	25,000,000
Exercise price	0.02

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Statement Of Financial Position [Abstract]
Allowance for doubtful accounts (in dollars)	$ 832,093	$ 832,093
Inventory reserve (in dollars)	2,255,795	2,256,399
Allowance for long-term receivable (in dollars)	$ 1,582,895	$ 1,582,895
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	4,500,000,000	4,500,000,000
Common stock, shares issued (in shares)	3,686,791,910	2,541,502,289
Common stock, shares outstanding (in shares)	3,686,791,910	2,541,502,289

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STOCKHOLDERS' DEFICIT

6 Months Ended

Jun. 30, 2013

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' DEFICIT

NOTE 9 - STOCKHOLDERS’ DEFICIT

The Company’s stockholders’ deficit decreased by $425,598 as a result of the net income attributable to CirTran Corporation for the six months ended June 30, 2013.  Noncontrolling interest in consolidated subsidiaries decreased stockholders’ deficit by $837,268 for the six months ended June 30, 2013, due to the operating income of the noncontrolling subsidiary.

Income (Loss) Per Share- Basic income (loss) per share is calculated by dividing net income (loss) available to common shareholders by the weighted-average number of common shares outstanding during each period.  Diluted income (loss) per share is similarly calculated, except that the weighted-average number of common shares outstanding would include common shares that may be issued subject to existing rights with dilutive potential when applicable.  The Company had 3,601,399,910 and 4,401,029,000 in potentially issuable common shares at June 30, 2013, and December 31, 2012, respectively.  These potentially issuable common shares were excluded from the calculation of diluted income (loss) per share because the effects were antidilutive.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows from operating activities
Net income (loss)	$ 1,262,866	$ (1,993,583)
Adjustments to reconcile net income (loss) to net cash provided (used) in operating activities:
Depreciation and amortization	26,998	49,845
Inventory reserves	(604)
Issuance of warrants and settlements		39,183
Change in valuation of derivative	(371,066)	166,531
Current liabilities to non-controlling interest holders		181,090
Gain on settlement of debt	(1,443,557)
Non-cash compensation expense	30,872	39,080
Changes in assets and liabilities:
Trade accounts receivable	(245,304)	(128,233)
Inventory	46,363	173,359
Other current assets	(273,170)	19,607
Other assets	95,502	(19,259)
Accounts payable	18,509	516,087
Related-party payable	122,258	66,118
Accrued liabilities	90,808	(85,394)
Accrued payroll and compensation expense	242,334
Refundable customer deposits	(201)
Accrued interest	392,609
Deferred revenue	20,731	975,038
Net cash provided by (used in) operating activities	15,948	(531)
Cash flows from financing activities
Proceeds from notes payable		25,000
Checks written in excess of bank balance	(17,118)	(158,149)
Proceeds from non-controlling interest	279,079
Proceeds from short-term advances	243,057	206,700
Payments on convertible debenture accrued interest	(64,395)	(100,000)
Payments on short-term advances	(418,388)	(146,800)
Net cash provided by (used in) financing activities	22,235	(173,249)
Net increase (decrease) in cash and cash equivalents	38,183	(173,780)
Cash and cash equivalents at beginning of period	7,883	173,780
Cash and cash equivalents at end of period	46,066
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	64,395	100,000
Noncash investing and financing activities:
Debt and accrued liabilities converted to equity	$ 1,204,362	$ 55,000

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2013	Dec. 31, 2012
Current assets
Cash and cash equivalents	$ 46,066	$ 7,883
Trade accounts receivable, net of allowance for doubtful accounts of $832,093 and $832,093, respectively	407,772	162,468
Inventory, net of reserve of $2,255,795 and $2,256,399, respectively	52,584	98,343
Other	281,036	7,866
Total current assets	787,458	276,560
Investment in securities, at cost	300,000	300,000
Long-term receivable, net of allowance of $1,582,895
Property and equipment, net	59,036	86,034
Other assets	128,986	224,488
Total assets	1,275,480	887,082
Current liabilities
Checks written in excess of bank balance		17,118
Accounts payable	4,635,523	4,681,114
Related-party payable	1,077,914	955,656
Short-term advances payable	2,892,814	3,088,945
Accrued liabilities	1,697,485	2,445,167
Accrued payroll and compensation expense	2,823,867	2,599,533
Accrued interest	1,834,768	2,417,834
Deferred revenue	3,004,850	2,984,119
Derivative liability	360,340	829,090
Convertible debenture	2,699,228	3,132,855
Refundable customer deposits	200,000	200,201
Current maturities of long-term debt	247,835	236,585
Current liabilities to non-controlling interest holders	2,849,079	2,570,000
Note payable to stockholders and members	251,833	576,833
Total current liabilities	24,575,536	26,735,050
Total liabilities	24,575,536	26,735,050
CirTran Corporation stockholders' deficit:
Common stock, par value $0.001; authorized 4,500,000,000 shares; issued and outstanding shares: 3,686,791,910 and 2,541,502,289	3,686,792	2,541,502
Additional paid-in capital	29,591,580	29,451,824
Subscription receivable	(17,000)	(17,000)
Accumulated deficit	(48,089,198)	(48,514,796)
Total CirTran Corporation and subsidiaries stockholders' deficit	(14,827,826)	(16,538,470)
Non-controlling interest	(8,472,230)	(9,309,498)
Total stockholders' deficit	(23,300,056)	(25,847,968)
Total liabilities and stockholders' deficit	$ 1,275,480	$ 887,082

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RELATED-PARTY TRANSACTIONS (Detail Textuals 3) (President, USD $)	6 Months Ended
	Jun. 30, 2013
President
Related Party Transaction [Line Items]
Number of shares purchased to grant options	6,000,000
Accrued options to related party	6,000,000
Fair market value of accrued options	$ 10,171
Expected term for options	7 years
Estimated volatility	224.82%
Discount rate	0.00%

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SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Schedule of segment information

		Electronics		Contract		Marketing		Beverage
		Assembly		Manufacturing		and Media		Distribution		Total
Three Months Ended June 30, 2013
Sales to external customers	$	-	$	26,080	$	-	$	1,070,611	$	1,096,691
Segment income (loss)		276,804		26,376		(25)		527,231		830,386
Segment assets		405,365		49,346		-		820,769		1,275,480
Depreciation and amortization		4,269		7,591		-		-		11,860
Three Months Ended June 30, 2012
Sales to external customers	$	-	$	24,541	$	-	$	291,214	$	315,755
Segment income (loss)		(47,857)		(16,656)		15		(640,989)		(705,487)
Segment assets		350,865		69,750		-		477,350		897,965
Depreciation and amortization		5,156		17,180		-		-		22,336
Six Months Ended June 30, 2013
Sales to external customers	$	-	$	57,212	$	-	$	1,907,631	$	1,964,843
Segment income (loss)		298,313		13,922		(25)		950,656		1,262,866
Segment assets		405,365		49,346		-		820,769		1,275,480
Depreciation and amortization		8,600		18,398		-		-		26,998
Six Months Ended June 30, 2012
Sales to external customers	$	-	$	55,625	$	-	$	878,830	$	934,455
Segment income (loss)		(302,531)		(14,733)		-		(1,676,319)		(1,993,583)
Segment assets		350,865		69,750		-		477,350		897,965
Depreciation and amortization		10,321		39,524		-		-		49,845

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STOCK OPTIONS AND WARRANTS (Detail Textuals) (Stock Options)	6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted
Number of options not issued but accrued	106,800,000	88,000,000
Stock Incentive 2012 Plans
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of common stock purchased	446,200,000
Stock options granted	458,000,000

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FINANCIAL INSTRUMENTS (Detail Textuals) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Investments, All Other Investments [Abstract]
Gain (loss) on derivative valuation	$ 365,222	$ (32,925)	$ 371,066	$ (166,530)
Fair value of derivatives	$ 360,340		$ 360,340		$ 829,090

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COMMITMENTS AND CONTINGENCIES (Detail Textuals 3) (Employment Agreement, Mr. Hawatmeh, USD $)	1 Months Ended	6 Months Ended
	Aug. 31, 2009	Jun. 30, 2013	Jun. 30, 2012
Employment Agreement | Mr. Hawatmeh
Commitments and Contingencies [Line Items]
Annual base salary	$ 345,000
Minimum number of shares purchased for options granted	6,000,000
Quarterly bonus as stated percentage of earnings before interest, taxes, depreciation and amortization for the applicable quarter	5.00%
Annual bonus percentage of gross sales, net of returns and allowances	1.00%
Non-cash compensation expense related to accrual for employee stock options to be awarded		$ 10,171	$ 19,183
Bonus percentage of net purchase price of acquisitions completed	1.00%

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COMMITMENTS AND CONTINGENCIES (Detail Textuals 4) (USD $)		1 Months Ended
	Jun. 30, 2013	May 31, 2009 Compensation Agreement Play Beverages Llc Mr. Hawatmeh	May 31, 2009 Compensation Agreement Play Beverages Llc Mr. Nora
Commitments and Contingencies [Line Items]
Monthly fee for each manager		$ 10,000	$ 10,000
Car allowance per month			1,000
Accrued compensation included in related-party payables	$ 1,073,150

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FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 8 - FAIR VALUE MEASUREMENTS

For asset and liabilities measured at fair value, the Company uses the following hierarchy of inputs:

·Level one -- Quoted market prices in active markets for identical assets or liabilities;

·Level two -- Inputs other than level one inputs that are either directly or indirectly observable; and

·Level three -- Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

Liabilities measured at fair value on a recurring basis at June 30, 2013, are summarized as follows:

	Level 1		Level 2		Level 3		Total
Fair value of derivatives	$	-	$	360,340	$	-	$	360,340

Liabilities measured at fair value on a recurring basis at December 31, 2012, are summarized as follows:

	Level 1		Level 2		Level 3		Total
Fair value of derivatives	$	-	$	829,090	$	-	$	829,090

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RELATED-PARTY TRANSACTIONS (Detail Textuals 4) (President, USD $)	6 Months Ended
	Jun. 30, 2013
President
Related Party Transaction [Line Items]
Short-term advances payable to related party	$ 88,564
Stock options granted	36,000,000
Fair value of stock options granted	$ 154,537
Borrowing fee	5.00%

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CAPITAL STOCK (Detail Textuals) (Convertible debt, USD $)	1 Months Ended	3 Months Ended	6 Months Ended	5 Months Ended
	Feb. 28, 2013 Unrelated parties	Mar. 31, 2013 Unrelated parties Unrelated_Party	Jun. 30, 2013 Unrelated parties Unrelated_Party	May 31, 2013 YA global investments
Capital Stock [Line Items]
Amount of convertible debt converted	$ 20,800	$ 246,000	$ 22,100	$ 538,412
Amount of second convertible debt converted			28,000	95,100
Amount of third convertible debt converted			60,750	67,200
Amount of fourth convertible debt converted			16,000	100,000
Amount of fifth convertible debt converted			$ 12,000
Numbers of shares issued on debt conversion	4,000,000	246,000,000	7,000,000	538,412,000
Debt Conversion Converted Instrument Shares Issued Two			13,000,000	86,454,545
Debt Conversion Converted Instrument Shares Issued Three			67,500,000	56,000,000
Debt Conversion Converted Instrument Shares Issued Four			20,000,000	76,923,076
Debt Conversion Converted Instrument Shares Issued Five			30,000,000
Number of unrelated party		4	3

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STOCK OPTIONS AND WARRANTS

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

STOCK OPTIONS AND WARRANTS

NOTE 11 - STOCK OPTIONS AND WARRANTS

Stock Incentive Plans - As of June 30, 2013, a total of 446,200,000 shares of common stock had been issued from the 2012 Stock Incentive Plan, out of which a maximum of 458,000,000 can be issued.  The Company’s Board of Directors administers the plan and has discretion in determining the employees, directors, independent contractors, and advisors who receive awards, the type of awards (stock, incentive stock options, nonqualified stock options, or share purchase rights) granted, and the term, vesting, and exercise prices.

Employee Options - During the six months ended June 30, 2013 and 2012, the Company did not grant options to purchase shares of common stock to employees.

A summary of the stock option activity under the plans as of June 30, 2013, and changes during the six months then ended is presented below:

				Weighted-
		Weighted-		Average	Aggregate
		Average		Remaining	Intrinsic
	Shares	Exercise Price		Contractual Life	Value
Outstanding at December 31, 2012	3,600,000	$	0.0123	0.013	$	-
Granted	-		-
Exercised	-		-
Expired	(3,600,000)		0.0123			-
Outstanding at June 30, 2013	-	$	-	-	$	-
Exercisable at June 30, 2013	-	$	-	-	$	-

As of June 30, 2013, and December 31, 2012, the Company had a total of 106,800,000 and 88,000,000 options accrued but not issued, respectively.

Warrants - On January, 24, 2011, as part of the 2011 Forbearance Agreement, a warrant to purchase 25,000,000 shares of common stock was issued to YA Global.  The warrant had an exercise price of $0.02 per share and vested immediately.

The Company currently has an insufficient number of authorized shares to enable warrant holders to fully exercise their warrants, assuming all warrants holders desired to do so.  Accordingly, the warrants are subject to derivative accounting treatment and are included in the derivative liability related to the convertible debentures (see Note 8).

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FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2013

Investments, All Other Investments [Abstract]

FINANCIAL INSTRUMENTS

NOTE 7 - FINANCIAL INSTRUMENTS

The Company has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting.  Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in the Company’s balance sheet.  The Company measures these instruments at their estimated fair value and recognizes changes in their estimated fair value in results of operations during the period of change.  The Company has estimated the fair value of these embedded derivatives for convertible debentures and associated warrants using a multinomial lattice model as of June 30, 2013, and December 31, 2012, and used the Black-Scholes model prior to that.  The fair values of the derivative instruments are measured each quarter, which resulted in a gain (loss) of $371,066 and $(166,530) during the six months ended June 30, 2013 and 2012, respectively.  As of June 30, 2013, and December 31, 2012, the fair market value of the derivatives aggregated $360,340 and $829,090, respectively.

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REALIZATION OF ASSETS

6 Months Ended

Jun. 30, 2013

Realization Of Assets [Abstract]

REALIZATION OF ASSETS

NOTE 2 - REALIZATION OF ASSETS

The accompanying condensed consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern.  The Company had a net income of $1,262,866 and a net loss of $1,993,583 for the six months ended June 30, 2013 and 2012, respectively.  As of June 30, 2013, the Company had an accumulated deficit of $48,089,198.  In addition, the Company provided cash by operations in the amount of $15,948 during the six months ended June 30, 2013, and used cash in operations in the amount of $531 during the six months ended June 30, 2012.  The Company also had a negative working capital balance of $23,788,078 as of June 30, 2013, and $26,458,490 as of December 31, 2012.  These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s ability to continue energy drink distribution, its principal source of revenue, is subject to interruption or termination because of ongoing disputes respecting the status of the Play Beverages, LLC, or PlayBev, license to market Playboy-licensed energy drinks.  The Company is continuing its suit against Playboy Enterprises, Inc., or Playboy, in Illinois in an effort to enjoin Playboy’s termination of the license so the Company will be able to continue its beverage distribution segment.  If the Playboy licensing dispute is not resolved satisfactorily through a negotiated settlement or litigation in such proceeding, PlayBev would be required to terminate its beverage distribution activities, which are currently the principal source of the Company’s revenues.  Such termination may require the Company to cease its activities and seek protection from creditors.

In view of the matters described in the preceding paragraphs, recoverability of a major portion of the recorded asset amounts shown in the accompanying consolidated balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its financing requirements on a continuing basis, to maintain or replace present financing, to acquire additional capital from investors, and to succeed in its future operations.  The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

The Company believes that its beverage business segment has the potential to have a substantial impact on its overall business.  The Company plans to focus on the beverage business and the contract manufacturing business.  For the beverage business, the Company plans to sell existing products and develop new products under the license agreement with Playboy to a globally expanding market.  With regard to contract manufacturing, the Company’s goal is to provide customers with manufacturing solutions for both new and more mature products, as well as across product generations.

The Company provides product marketing services to the direct response and retail markets for both proprietary and nonproprietary products.  This segment provides campaign management and marketing services for the beverage distribution, direct response, and retail markets.  The Company intends to continue to provide marketing and media services to support its own product efforts and offer to customers marketing service in channels involving television, radio, print media, and the Internet.  The Company intends to serve the electronics assembly and manufacturing industries, although it anticipates that its focus will shift more to providing services on a subcontract basis.

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SEGMENT INFORMATION (Detail Textuals)	6 Months Ended
	Jun. 30, 2013 Segment
Segment Reporting [Abstract]
Number of reportable segments	4

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COMMITMENTS AND CONTINGENCIES (Detail Textuals 1) (Ya global forbearance agreements, USD $)	1 Months Ended		6 Months Ended
	Mar. 22, 2012	Mar. 31, 2012	Jun. 30, 2013	Sep. 30, 2012
Ya global forbearance agreements
Loss Contingencies [Line Items]
Repayment of debentures per month in March 2012	$ 25,000
Repayment of debentures per month in March through June 2012	25,000
Repayment of debentures per month in July through September 2012	50,000
Repayment of debentures in the months of October and November 2012	75,000
Repayment of debentures per month in the months of December 2012 through May 2013	100,000
Repayment of debentures per month in the months of June through December 2013	125,000
Repayment of debentures per month in the months commencing in April, 2013	100,000
Maximum out-of-pocket expenses in percentages of total net sales	5.00%
Maximum excess cash flow payments		50,000		25,000
Number of trading days prior to payment date			20 days
Litigation amount paid			800,712
Litigation amount required monthly payments			$ 675,176

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2013

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 14 - SUBSEQUENT EVENTS

In July 2013, YA Global Investments (formerly known as Cornell Capital Partners, LP) and its assigns elected to convert the amounts of $25,000, $100,000, and $158,700 of their convertible debt into 283,700,000 shares of the Company’s common stock at a price of $0.001 per share.

In July 2013, an investor in PlayBev elected to convert debt in the amount of $350,000 into 53,511 Class A Units, which equals 25% of the membership interest in PlayBev.

In July 2013, two unrelated parties elected to convert debt in the amounts of $20,000, and $30,000 into 50,000,000 shares of the Company’s common stock at a price of $0.001 per share.

These financial statements considered subsequent events through August 16, 2013, the date the financial statements were available to be issued.

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CAPITAL STOCK

6 Months Ended

Jun. 30, 2013

Capital Stock [Abstract]

CAPITAL STOCK

NOTE 10 – CAPITAL STOCK

In January through March 2013, four unrelated parties elected to convert debt in the amount of $246,000, into 246,000,000 shares of the Company’s common.

In January through May 2013, YA Global Investments (formerly known as Cornell Capital Partners, LP) and its assigns elected to convert the amounts of $538,412, $95,100, $67,200, and $100,000 of their convertible debt into 538,412,000, 86,454,545, 56,000,000, and 76,923,076 shares of the Company’s common stock, respectively.

In February 2013, the Company issued 4,000,000 shares of its common stock to an unrelated party for $20,800 in debt that was settled during the year ended December 31, 2010.

In January through June 2013, three unrelated parties elected to convert debt in the amounts of $22,100, $28,000, $60,750, $16,000, and $12,000 into 7,000,000, 13,000,000, 67,500,000, 20,000,000, and 30,000,000 shares of the Company’s common stock, respectively.

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STOCK OPTIONS AND WARRANTS (Tables)

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Schedule of summary of the stock option activity under the plans

				Weighted-
		Weighted-		Average	Aggregate
		Average		Remaining	Intrinsic
	Shares	Exercise Price		Contractual Life	Value
Outstanding at December 31, 2012	3,600,000	$	0.0123	0.013	$	-
Granted	-		-
Exercised	-		-
Expired	(3,600,000)		0.0123			-
Outstanding at June 30, 2013	-	$	-	-	$	-
Exercisable at June 30, 2013	-	$	-	-	$	-

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INVENTORIES (Tables)

6 Months Ended

Jun. 30, 2013

Inventory Disclosure [Abstract]

Schedule of inventories stated at the lower of average cost or market

		June 30,		December 31,
		2013		2012
Raw Materials	$	1,674,500	$	1,691,500
Work in Process		169,391		221,225
Finished Goods		464,488		442,017
Allowance / Reserve		(2,255,795)		(2,256,399)
Totals	$	52,584	$	98,343

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 16, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	CIRTRAN CORP
Entity Central Index Key	0000813716
Trading Symbol	circ
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		4,020,491,910
Document Type	10-Q
Document Period End Date	Jun. 30, 2013
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2

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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Schedule of liabilities measured at fair value on a recurring basis

Liabilities measured at fair value on a recurring basis at June 30, 2013, are summarized as follows:

	Level 1		Level 2		Level 3		Total
Fair value of derivatives	$	-	$	360,340	$	-	$	360,340

Liabilities measured at fair value on a recurring basis at December 31, 2012, are summarized as follows:

	Level 1		Level 2		Level 3		Total
Fair value of derivatives	$	-	$	829,090	$	-	$	829,090