10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023

OR

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

COMMISSION FILE NUMBER 000-55805

JAMES MARITIME HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Nevada	95-4363944
(State of incorporation)	(I.R.S. Employer Identification No.)

9160 South 300 West, #101

Sandy, UT 84070

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (801) 706-9429

Not applicable

(Former name, address and fiscal year, if changed since last report)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

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 ☐     No ☒

Indicate by check mark whether the registrant has submitted electronically 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 ☒     No ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐     No ☒

As of June 3, 2024, there were 8,566,429 shares of our common stock, par value $0.001 per share, and 400,000 shares of our preferred stock, par value $0.001 outstanding.

JAMES MARITIME HOLDINGS INC.

FORM 10-Q

FOR THE THREE MONTHS ENDED MARCH 31, 2023

TABLE OF CONTENTS

	PAGE
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements	3-21
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosure About Market Risk	24
Item 4. Controls and Procedures	24
PART II – OTHER INFORMATION
Item 1. Legal Proceedings	25
Item 1A. Risk Factors	25
Item 2. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities	25
Item 3. Defaults Upon Senior Securities	25
Item 4. Mine Safety Disclosure	25
Item 5. Other Information	25
Item 6. Exhibits	26
SIGNATURES	27
EXHIBIT INDEX

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PART I – FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

James Maritime Holdings Inc.

A Nevada Corporation

Condensed Consolidated Financial Statements (Unaudited)

March 31, 2023

James Maritime Holdings Inc.

TABLE OF CONTENTS

	Page
Condensed Consolidated Financial Statements:
Condensed Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022	4
Condensed Consolidated Statements of Operations (Unaudited) for the three months ended March 31, 2023 and 2022	5
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) for the three months ended March 31, 2023 and 2022	6
Condensed Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2023 and 2022	7
Notes to Unaudited Condensed Consolidated Financial Statements	8-21

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JAMES MARITIME HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 AS OF MARCH 31, 2023 (UNAUDITED) AND DECEMBER 31, 2022

	March 31, 2023			December 31, 2022
ASSETS
Cash	$	76,577		$	455,454
Accounts receivables		667,267			722,367
Prepaid expenses and other current assets		41,876			70,487
Total current assets		785,720			1,248,308
Due from related parties		28,746			7,379
Intangible assets		2,951,178			4,150,280
Property and equipment, net		152,891			200,502
Right-of-use asset		400,925			168,339
Total assets	$	4,319,461		$	5,774,808
LIABILITIES
Accounts payable and accrued expenses	$	1,089,974		$	921,230
Accrued payroll expenses		172,285			161,360
Deferred revenue		-			400,000
Common stock to-be-issued		50,000			50,000
Notes payable, current portion		259,707			323,562
Convertible debenture, current portion		35,000			35,000
Loans payable, current portion		408,247			585,831
Embedded conversion feature		175,045			331,399
Operating lease liability, current		223,179			114,400
Total current liabilities		2,413,437			2,922,782
Notes payable, net of current portion		110,287			110,287
Loans payable, net of current portion		424,433			490,093
Operating lease liability		381,163			68,953
Total liabilities		3,329,320			3,592,115
SHAREHOLDERS’ EQUITY
Preferred Stock – Series A, 2,000,000 authorized shares, $0.001 par value; 400,000 shares issued and outstanding, as of March 31, 2023 and December 31, 2022		400			400
Common Stock, 90,000,000 shares authorized, $0.001 par value; 9,004,129 shares issued and outstanding as of March 31, 2023 and December 31, 2022		9,004			9,004
Additional paid-in capital		13,656,447			13,656,447
Accumulated deficit		(12,495,115	)		(11,454,076	)
Equity attributable to shareholders of James Maritime Holdings, Inc.		1,170,736			2,211,775
Non-controlling interest		(180,595	)		(29,082
Total shareholders’ equity		990,141			2,182,693
Total liabilities and shareholders’ equity	$	4,319,461		$	5,774,808

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JAMES MARITIME HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)

 FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

	Three months ended March 31,
	2023			2022
Net sales	$	2,736,403		$	-
Cost of goods sold		2,040,863			-
Gross profit		695,540			-
Operating expenses:
Selling, general, and administrative expenses		934,373			240,841
Loss on impairment of intangible assets		911,467			-
Total operating expenses		1,845,840			240,841
Operating loss		(1,150,299	)		(240,841	)
Other income (expense)
Interest expense		(183,745	)		-
Financial expenses		(15,108	)		-
Change in fair value of derivative liability		156,354			-
Other income		246			-
Total other expense, net		(42,253	)		-
Net loss	$	(1,192,552	)	$	(240,841	)
Less: net income (loss) attributable to non-controlling interests		(151,513	)		1,076
Net loss attributable to James Maritime Holdings, Inc. and subsidiaries	$	(1,041,039	)	$	(241,917	)
Weighted average number of common shares outstanding:
Basic and diluted		9,006,047			7,371,907
Net loss per share:
Basic and diluted	$	(0.12	)	$	(0.03	)

The accompanying notes to the consolidated financial statements are an integral part of these statements.

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JAMES MARITIME HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

														Total Equity
									Additional					attributable			Non-			Total
	Preferred Stock				Common Stock				Paid-in		Accumulated			to the			controlling			Shareholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Company			interest			Equity
Balance as at January 1, 2022		400,000	$	400		7,354,129	$	7,354	$	12,008,097	$	(11,658,970	)	$	356,881		$	62,367		$	419,248
Issuance of common stock and warrants to shareholders		-		-		50,000		50		49,650		-			50,000			-			50,000
Net income (loss)		-		-		-		-		-		(241,917	)		(241,917	)		1,076			(240,841	)
Balance as at March 31, 2022		400,000	$	400		7,404,129	$	7,404	$	12,058,047	$	(11,900,887	)	$	164,964		$	63,443		$	228,407
Balance as at January 1, 2023		400,000	$	400		9,004,129	$	9,004	$	13,656,447	$	(11,454,076	)	$	2,211,775		$	(29,082	)	$	2,182,693
Net loss		-		-		-		-		-		(1,041,039	)		(1,041,039	)		(151,513	)		(1,192,552	)
Balance as at March 31, 2023		400,000	$	400		9,004,129	$	9,004	$	13,656,447	$	(12,495,115	)	$	1,170,736		$	(180,595	)	$	990,141

The accompanying notes to the consolidated financial statements are an integral part of these statements.

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 JAMES MARITIME HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

	Three months ended March 31,
	2023			2022
Cash flows from operating activities:
Net loss	$	(1,192,552	)	$	(241,917	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Loss on impairment of goodwill and intangibles		911,467			-
Depreciation and amortization		606,122			-
Amortization of debt discounts		37,032			-
Change in fair value of derivative liability		(156,354	)		-
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		28,611			-
Accounts receivable		55,100			-
Other assets		(232,586	)		-
Due from related party		(21,367	)		-
Accounts payable and accrued expenses		168,743			199,001
Accrued payroll		10,925			-
Deferred revenue		(400,000	)		-
Net cash used in operating activities		(184,860	)		(42,916	)
Cash flows from financing activities
Proceeds from shares to-be-issued		-			50,000
Proceeds from notes		-			19,000
Payment of notes		(371,913	)		(5,051	)
Proceeds from loans		355,480			-
Payment of loans		(177,584	)		-
Net cash (used in) provided by financing activities		(194,017	)		63,949
Net (decrease) increase in cash		(378,877	)		21,003
Cash, beginning of period		455,454			110,460
Cash, end of period	$	76,577		$	131,463

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JAMES MARITIME HOLDINGS INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

1. Nature and Continuance of Operations

Business Operations Basis of Presentation

The accompanying consolidated financial statements include the accounts of James Maritime Holdings Inc. (“James Maritime”) and its majority-owned subsidiary, Gladiator Solutions Inc. (“Gladiator”), and its wholly owned subsidiary United Security Specialists Inc. (“USS”) (collectively as the “Company”). James Maritime Holdings, Inc. was incorporated in the State of Nevada on January 23, 2015.

Substantially all of the Company’s business is conducted through its subsidiaries, Gladiator and USS. Gladiator produces revenues through the distribution of personal protective products, primarily through mail-in orders to customers or via e-commerce sales generated through their website. USS provides professional security personnel enhanced by smartphone-based security applications.

Share Exchange Agreement – United Security Specialists, Inc.

On September 23, 2022, James Maritime Holdings completed a share exchange agreement with USS.

As a result of the exchange, James Maritime became the sole shareholder of USS, holding 100% of all shares outstanding. See Note 3 for further information.

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. The Company has adopted a December 31 fiscal year-end for financial statement reporting purposes.

All operations activity related to James Maritimes’ subsidiary, Gladiator, all operations are included within condensed consolidated statement of operations for the three months ended March 31, 2023 and 2022, respectively.

All operations activity related to James Maritimes’ subsidiary, USS, for the quarterly periods of 2022 and the year ended December 31, 2022, will only reflect activity from September 23, 2022 through December 31, 2022, the period for which USS was acquired and owned by James Maritime. All operations are included within consolidated statement of operations.

All intercompany balances were eliminated in the condensed consolidated financial statements. Non-controlling interests are classified in the accompanying consolidated balance sheets as a component of equity. The amounts of consolidated net income (loss) attributable to both the Company and the non-controlling interests are separately presented in the accompanying consolidated statement of operations.

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JAMES MARITIME HOLDINGS INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

Going concern

The Company’s consolidated financial statements as of March 31, 2023, are prepared using U.S. GAAP, which contemplates continuation of the Company as a going concern. This contemplates the realization of assets and liquidation of liabilities in the ordinary course of business. The Company has yet to establish an ongoing source of revenue to finance its operating expenses and to continue as a going concern.

During the three months ended March 31, 2023, the Company generated a net loss of $1,192,552. The accumulated deficit as of March 31, 2023 is $12,495,115 ($11,454,076 as of December 31, 2022). In order to continue as a going concern, the Company plans to receive funds through the selling of equity securities to existing and new shareholders. The Company is also evaluating potential acquisitions in the corporate security space. Additionally, the Company has created and maintained good customer relationships during 2023 for both USS and Gladiator, which the Company is relying on to potentially generate sustainable sales throughout 2024 and afterward. While management maintains they will be able to continue to generate sufficient cash flows through a combination of operations, debt, and equity raises, there is no guarantee the Company will be able to raise or generate additional funds in the short term to meet present obligations as they come due. Due to these factors, there is substantial doubt the Company may be able to continue as a going concern. The financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reporting amounts of assets and liabilities.

Estimates are used for, but not limited to, the accounting for inventories, impairment of long-term assets and derivatives.

It is reasonably possible that the estimate of the effect of a condition, situation, or set of circumstances that existing at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results of could differ significantly from those estimates.

Business Combinations

The Company accounts for all business combinations using the acquisition method of accounting. Under this method, assets and liabilities, including any remaining non-controlling interests, are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and non- controlling interests is recognized as goodwill. Certain adjustments to the assessed fair values of assets and liabilities, or non-controlling interests made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Results of operations of the acquired entity are included in the Company’s results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible assets.

Cash

The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash and cash equivalents.

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JAMES MARITIME HOLDINGS INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

Concentration of Credit Risk

The Company maintains its cash accounts with financial institutions, where, at times, deposits exceed federal insurance limits of $250,000. The Company believes that no significant concentration of credit risk exists with respect to these cash balances due to its assessment of the credit worthiness and financial viability of the financial institutions.

Inventories

Inventories consist primarily of finished goods. Costs of finished goods inventories include all costs incurred to bring inventory to its current condition, which includes standard cost paid to suppliers, shipping costs, and other costs. The Company values its inventory using specific identification method of each inventory item. If the Company determines that the estimated net realizable value of its inventory is less than the carrying value of such inventory, it records a charge to cost of goods sold to reflect the lower of cost or net realizable value. If actual market conditions are less favorable than those projected by the Company, further adjustments may be required that would increase the cost of goods sold in the period in which such a determination was made. As of March 31, 2023 and December 31, 2022, the Company had no inventory on hand.

Accounts Receivable

Accounts receivables are generally recorded at the invoiced amounts, net of an allowance for expected losses. The Company evaluates the collectability of its trade accounts receivable based on a number of factors. In circumstances where the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded, which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer identification of bad debts, bad debt charges are recorded based on the Company’s historical losses and an overall assessment of past due trade accounts receivable outstanding. The allowance for accounts receivable is established through a provision reducing the carrying value of receivables. At March 31, 2023 and December 31, 2022, the Company determined that no allowance was necessary.

Leases

The Company accounts for a contract as a lease when it has the right to direct the use of the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of its right-of-use (“ROU”) assets and lease liabilities at the lease commencement date and thereafter if modified. ROU assets and liabilities are represented on the balance sheet at the present value of future minimum lease payments to be made over the lease term. Leases that are insignificant or with a 12-month term or less at inception are not recorded on the consolidated balance sheet and are expensed as incurred in the consolidated statements of operations. As of December 31, 2022, the Company leased real estate and office space (the “Saratoga Lease”) under non-cancelable operating lease agreements that qualified for ROU accounting treatment. As of March 31, 2023, the Company was in default for the Saratoga Lease and, subsequent to March 31, 2023, terminated the lease with the landlord in a settlement agreement. Commencing on February 1, 2023, the Company leased a second real estate and office space (the “Suite 200 Lease”) under non-cancelable operating lease agreement that qualified for ROU accounting treatment.

Property and equipment

The Company records depreciation when appropriate using the straight-line method over the estimated useful life of the assets. Property and equipment are stated at cost less accumulated depreciation. The estimated useful lives of the Company’s property and equipment by class are as follows:

Asset classes	Useful lives (in years)
Vehicles	5
Furniture and fixtures	7

Management regularly reviews property, equipment, and other long-lived assets for possible impairment. This review occurs annually or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. Based on management’s assessment, there were no indicators of impairment of the Company’s property and equipment as of March 31, 2023 or December 31, 2022.

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JAMES MARITIME HOLDINGS INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

Intangible Assets

Intangible assets are recorded at their estimated fair value at the date of acquisition and are allocated to the reporting units that are expected to receive the related benefits. During the three months ended March 31, 2023 and year ended December 31, 2022, the Company determined that all intangibles related to the acquisition of USS were fully recognizable at their net book values and therefore no impairment was deemed necessary.

On December 13, 2021, the Company executed a share exchange agreement that resulted in the recognition of intangible assets (see Note 3 – Gladiator Share Exchange Agreement). At the time of the share exchange agreement, Management had determined that the intangible assets extrapolated from the share exchange agreement will be amortized over a useful life of 3 years. Concurrent with the cessation of operations of Gladiator, the Company determined that all intangibles related to the acquisition of Gladiator were impaired. As such, in the three months ending March 31, 2023, the Company recorded an Impairment Loss of $911,000, the full value of the unamortized Intangibles.

On September 23, 2022, the Company executed a share exchange agreement that resulted in the recognition of intangible assets (see Note 4 – USS Share Exchange Agreement). Management has determined that the intangible assets extrapolated from the share exchange agreement will be amortized over the useful life of 3 years.

Convertible Debt and Derivative Liabilities

The convertible debt is convertible into shares of common stock at a conversion rate of 10% of the lowest trading price during the previous five trading days. The terms of the embedded conversion feature require embedded derivative instrument treatment and classification as a separate liability. The conversion feature and certain other features are considered embedded derivative instruments, such as a conversion reset provision, a penalty provision and redemption option, which are to be recorded at their fair value as its fair value can be separated from the convertible note and its conversion is independent of the underlying note. The Company records the resulting discount on debt related to the conversion features at initial transaction and amortizes the discount using the effective interest rate method over the life of the debt instruments. The conversion liability is then marked to market each reporting period with the resulting gains or losses shown in the consolidated statement of operations.

Revenue recognition

The Company recognizes revenue when it satisfies its performance obligations by transferring control of promised products or services to its customers, which occurs either at a point in time or over time, depending on when the customer obtains the ability to direct the use of and obtain substantially all of the remaining benefits from the products or services.

The Company determines revenue recognition through the following five steps:

(1) Identify the contract with the customer,

(2) identify the performance obligations in the contract,

(3) determine the transaction price,

(4) allocate the transaction price to the performance obligations in the contract; and

(5) recognize revenue when, or as, the performance obligations are satisfied.

Net revenues from Gladiator primarily consist of sales of personal protective products, including armor, plates, helmets, shields, and accessories shipped directly to customers. All revenue transactions for Gladiator comprise a single performance obligation, which consists of the sale of products to customers either through wholesale, intermediary, or direct-to-consumer channels. The company satisfies the performance obligation and records revenues when transfer of control has passed to the customer, based on the terms of sale. In all of the Companies revenue channels, transfer of control takes place at the point of sale upon shipment to customer.

Net revenues from USS primarily consist of security services provided to large residential, industrial, construction and government clients. Contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. The Company does offer discounts, but historically the discounts have been insignificant. The Company satisfies the performance obligation for the agreed-upon period of time and location and records revenues after completion. There are no services that would be considered fulfilled over an extended period of time and necessitate different accounting treatment.

Advertising Costs

Advertising costs are charged to selling, general, and administrative expenses. Advertising production costs are expensed the first time an advertisement related to such production costs is run. Media (television, print and radio) placement costs are expensed in the month during which the advertisement appears. Advertising expenses for the three months ended March 31, 2023 and 2022, were approximately $34,000 and $nil, respectively.

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JAMES MARITIME HOLDINGS INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

Earnings per Share

Basic earnings per common share is computed by dividing net income (loss) available to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per common share are computed by dividing net income (loss) available to common stockholders for the period by the diluted weighted average common shares outstanding during the period. Diluted earnings per share reflects the potential dilution from common shares issuable through stock options, restricted stock units and other equity awards. For the three months ended March 31, 2023 and 2022, the Company generated net losses, therefore applying applicable equity instruments for diluted earnings per share would have had an anti-dilutive effect.

Fair Value of Financial Instruments

The carrying amounts shown for the Company’s cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, and notes and loans approximate fair value because of the short-term maturity of those instruments.

The Company groups its recurring, non-recurring and disclosure-only fair value measurements into the following levels when making fair value measurement disclosures:

Level 1 Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.

Level 3 Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The Company and its subsidiaries use, as appropriate, a market approach (generally, data from market transactions), an income approach (generally, present value techniques and option-pricing models), and / or a cost approach (generally, replacement cost) to measure the fair value of an asset or liability. These valuation approaches incorporate inputs such as observable, independent market data and/or unobservable data that management believes are predicated on the assumptions market participants would use to price an asset or liability. These inputs may incorporate, as applicable, certain risks such as nonperformance risk, which includes credit risk.

The Company received a fair value assessment from a third-party prior to the business combination with Gladiator. See Note 3 for further details and assumptions used in the calculation.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at tax rates expected to be in effect when such assets or liabilities are realized or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date of a change in tax rates. Deferred income tax assets are reduced by valuation allowances when necessary. On March 31, 2023 and December 31, 2022, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required. The 2019 through 2022 tax years remain subject to examination by federal and most state tax authorities.

Commitments and Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings. The Company evaluates the perceived merits of any legal proceedings, or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is possible but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

Non-controlling Interests

Non-controlling interests are classified in the accompanying consolidated balance sheet as a component of equity. The amounts of consolidated net income (loss) attributable to both the Company and the non-controlling interests are separately presented in the accompanying consolidated statements of operations.

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JAMES MARITIME HOLDINGS INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

3. Share Exchange Agreement with Gladiator Solutions, Inc.

On December 13, 2021 (the “Gladiator Closing date”), Gladiator (the “Gladiator Seller”) entered into a share exchange agreement with the Company, in which all the outstanding shares of Gladiator, 750,000 common shares, no par value, were exchanged for 1,000,000 shares, $0.001 par value of James Maritime’s common stock.

On the Closing date, one of the seller’s shareholders dissented from participating in the acquisition, which immediately resulted in a noncontrolling interest after the completion of the share purchase agreement. The noncontrolling interest is equivalent to the shareholder’s proportionate holdings of 100,000 Gladiator shares, or 13.3%. The remaining shareholders with an equity stake of 86.7% exchanged their total aggregate shares of 650,000 for 866,667 of James Maritime’s common stock shares.

The Company also included contingent considerations if Gladiator meets or exceeds certain earnings before interest, taxes, amortization (“EBITDA”) thresholds, (the “Gladiator Milestones”):

- $3,000,000 and 25% during any consecutive twelve-month period commencing on the Gladiator closing date and ending December 31, 2024 (the “Measurement period”), the Company shall issue one (1) additional share for each two (2) shares of James Maritime stock received by such shareholder;

- $5,000,000 and 25% during the measurement period, one (1) additional share of James Maritime stock for each one (1) share of James Maritime stock received by such shareholder at the closing;

- $10,000,000 during the measurement period, one (1) additional share of James Maritime stock for each one (1) share of James Maritime stock received by such shareholder at the closing;

- Conversely, in the event Gladiator’s revenues and EBITDA percentage does not equal or exceed $2,000,000 and 25%, respectively, during any consecutive twelve-month period commencing on the closing date and ending on the 24-month anniversary of the Closing date, the seller’s shareholders shall return to the Company an aggregate of 500,000 shares of James Maritime common stock.

The Company utilized a third-party valuation specialist to calculate the intangible assets and estimate the purchase price of the agreement. The valuation utilized a share purchase price of $0.50, which constitutes a Level 2 fair value measurement.

Purchase price (2)	$	433,334
Plus: Net liabilities assumed (3)		967,079
Intangibles (1)	$	1,400,413

____________

(1) Intangibles were determined to consist of two separately identifiable intangible assets to be amortized over their useful lives of 3 years (the average time the company has maintained customer relationships). 50% of the value or $700,206 was attributed to Supplier Relationships and 50% of the value or $700,206 was attributed to Customer Relationships.

(2) The purchase price was calculated by taking the recapitalization of James Maritime Holdings shares of 866,667 (previously 650,000 Gladiator shares) at $0.50 per share, resulting in a total purchase price of $433,334.

(3) Identifiable assets acquired, and liabilities assumed:

-13-

JAMES MARITIME HOLDINGS INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

The following tables present the allocation of the purchase consideration, which includes tangible assets acquired and liabilities assumed, based on their assessed fair values.

Assets acquired:
Cash	$	60,349
Accounts receivable		1,356
Total assets acquired	$	61,705
Liabilities assumed:
Accounts payable and accrued expenses	$	264,909
Deferred revenue		84,750
Due to related parties		154,948
Note payable		30,987
Convertible debenture		28,370
Loan		67,800
Derivative liability		330,353
Minority interest (4)		66,667
Total liabilities assumed	$	1,028,784
Net assets (liabilities) acquired/assumed	$	(967,079	)

____________

(4) The non-controlling interest was calculated by taking the Level 2 fair value assessment of price per share of $0.50 and multiplying by the recapitalization of James Maritime Holdings shares of 133,333 (previously 100,000 Gladiator shares), resulting in a non-controlling interest valuation of $66,667.

If the share exchange agreement had occurred on January 1, 2021, the pro forma consolidated revenues at December 31, 2021 would have amounted to approximately $308,051 and the consolidated operating loss would have amounted to approximately $1,000,940.

4. Share Exchange Agreement with United Securities Specialists, Inc. (USS)

On September 23, 2022 (the “USS Closing date”), USS entered into a share exchange agreement with the Company, in which all the outstanding shares, 100 common shares, no par value, were exchanged for 1,000,000 shares, $0.001 par value of James Maritime common stock.

The Company also included contingent considerations if USS meets or exceeds certain earnings before interest, taxes, amortization (“EBITDA”) thresholds:

a.	$20,000,000 and 15% during any consecutive (12) month period commencing on the Closing date and ending on December 31, 2025 (“the Measurement Period”), the Company shall issue an aggregate 500,000 shares of James Maritime stock
b.	$30,000,000 and 15% during the measurement period, the Company shall issue an aggregate 500,000 shares of James Maritime stock
c.	$40,000,000 and 15% during the measurement period, the Company shall issue an aggregate 500,000 shares of James Maritime stock
d.	$50,000,000 and15% during the measurement period, the Company shall issue an aggregate 500,000 shares of James Maritime stock

If all criteria are met, an aggregate of 2,000,000 earnout shares will be awarded to the Company.

The Company utilized a third-party valuation specialist to calculate the intangible assets and estimate the purchase price of the agreement. The valuation utilized a share purchase price of $1.00, which constitutes a Level 2 fair value measurement.

-14-

JAMES MARITIME HOLDINGS INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

The allocation of the purchase price in connection with the acquisition of USS was calculated as follows:

Purchase price (2)	$	1,000,000
Plus: Net liabilities assumed (3)		2,439,614
Intangibles (1)	$	3,439,614

____________

(1) Intangibles were determined to consist of two separately identifiable intangible assets to be amortized over their useful lives of 3 years (the average time the Company has maintained customer and employee relationships). 50% of the value or $1,719,807 was attributable to Employee Expertise and 50% of the value or $1,719,807 was attributable to Customer Relationships.

(2) The purchase price was calculated by taking the recapitalization of James Maritime Holdings shares of 1,000,000 (previously 100 Company shares) at $1.00 per share, resulting in a total purchase price of $1,000,000.

(3) The following tables present the allocation of the purchase consideration, which includes tangible and intangible assets acquired and liabilities assumed, based on their assessed fair values. Identifiable assets acquired, and liabilities assumed:

Assets acquired:
Cash	$	21,437
Accounts receivable		206,536
Prepaid expenses		10,487
Property and equipment		199,584
Right-of-use asset		193,839
Intangible assets		99,609
Total assets acquired	$	731,492
Liabilities assumed:
Accounts payable and accrued expenses	$	704,637
Accrued payroll		172,366
Notes payable – current and non-current		1,017,771
Loan – current and non-current		1,066,012
Operating lease liability – current and non-current		210,320
Total liabilities assumed	$	3,171,106
Net assets (liabilities) acquired/assumed	$	(2,439,614	)

If the share exchange agreement had occurred on January 1, 2022, the pro forma consolidated revenues at December 31, 2022 would have amounted to approximately $9,420,417 and the consolidated operating loss would have amounted to approximately $2,301,112.

5. Intangible Assets

The Company’s intangible assets are as follows:

	March 31, 2023			December 31, 2022
Customer relationships	$	2,125,491		$	2,420,014
Supplier relationships		700,207			700,207
Employee expertise		1,426,284			1,719,807
Software development costs		99,609			99,609
Less: accumulated amortization and impairment loss		(1,400,413	)		(789,357	)
Net intangible assets	$	2,951,178		$	4,150,280

-15-

JAMES MARITIME HOLDINGS INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

Amortization expense for the three months ended March 31, 2023 and 2022 equated to $287,635 and $nil, respectively and is included in selling, general, and administrative expenses in the condensed consolidated statements of operations. During the three months ended March 31, 2023, the Company recognized an impairment loss of $911,467 on assets acquired as part of the business combination with Gladiator, due to the uncertainty of future operations of that entity.

6. Property and Equipment

The table below displays the Company’s property and equipment balances as of March 31, 2023 and 2022, respectively.

	2023			2022
Furniture and fixtures	$	16,062		$	16,062
Vehicles		195,322			195,322
Less: accumulated amortization		(58,493	)		(10,882	)
Total property and equipment, net	$	152,891		$	200,502

Depreciation expense for the three months ended March 31, 2023 and 2022 equated to $31,548 and $nil, respectively and is included in selling, general, and administrative expenses in the condensed consolidated statements of operations.

7. Lease Payable

The Company leases its headquarters office. Leases with an initial term of 12 months or less or are immaterial are not included on the balance sheets. During the year ended December 31, 2020, the Company entered into an office lease for its administrative operations, (the “Saratoga lease"). The Saratoga lease is for a 48.5-month term, with an original expiration date of July 31, 2024, with an initial monthly payment of $8,819. Straight-line rent per month was calculated at $9,522. As of March 31, 2023, the Company was in default for the Saratoga Lease due to non-payment. Subsequent to March 31, 2023, the Company terminated the Saratoga Lease and entered into a settlement agreement with the landlord. During the quarter ending March 31, 2023, the Company entered a new lease for its headquarters office, (the “Suite 200 Lease”) for a 60 month lease with an expiration date of January 31, 2028 with an initial monthly payment of $7,943.

The components of lease expense included on the Company’s consolidated statements of operations were as follows:

	March 31, 2023			December 31, 2022
Weighted average remaining lease term (in years)		2.85			1.58
Weighted average discount rate		7.6	%		6.0	%

Amounts relating to operating leases were presented on the consolidated balance sheets as of March 31, 2023 and December 31, 2022 in the following line items:

	March 31, 2023		December 31, 2022
Operating Leases
ROU lease assets	$	400,925	$	168,339
Lease liabilities, short-term		223,179		114,400
Lease liabilities, long term		381,163		68,953

-16-

JAMES MARITIME HOLDINGS INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

Future minimum lease payments required under operating leases on an undiscounted cash flow basis as of March 31, 2023 is as follows:

Fiscal Year	Operating Lease Payments
2023	$	163,968
2024		171,346
2025		103,661
2026		107,020
2027		110,228
2028		9,208
Total minimum lease payments		665,431
Less: imputed interest		(101,431	)
Present value of future minimum lease payments		564,000
Less:  current lease liabilities		(182,836	)
Operating lease liabilities, non-current	$	381,164

8. Accounts Payable and Accrued Expenses

The accounts payable and accrued expenses balance consists of the following as of March 31, 2023 and December 31, 2022:

	March 31, 2023		December 31, 2022
Accounts Payable	$	839,059	$	723,886
Credit card liability		136,728		156,115
Accrued interest		104,267		26,809
Taxes payable		9,920		14,420
		1,089,974	$	921,230

9. Notes Payable, current and non-current

The following table summarizes the outstanding notes payable amount owed by the Company as of March 31, 2023 and 2022:

		2023		2022
Kapitus	(a)	$	122,973	$	122,973
Henry Sierra	(b)		158,611		168,276
IOU	(c)		88,410		142,600
Total notes payable outstanding		$	369,994	$	433,849
Notes payable, current portion			259,707		323,562
Notes payable, excluding current			110,287		110,287

-17-

JAMES MARITIME HOLDINGS INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(a)	On November 4, 2020 Gladiator received $69,800 from their supplier, Kapitus Servicing Inc. Gladiator agreed to pay back the note in weekly installments of $1,419, which includes interest, for a total term of 15 months from commencement. The interest paid over the maturity period totals $22,336 (45.6% per annum). For the year ended December 31, 2022 and for the period December 13, 2021 through December 31, 2021, Gladiator paid $155 and $240 in interest expense related to this note, respectively. The note has been fully paid off.
	On August 20, 2021, Gladiator received $25,500 from their supplier, Kapitus Servicing Inc. Gladiator agreed to pay back the note in weekly installments of $519, which includes interest, for a total term of 15 months from commencement. The interest paid over the maturity period totals $8,205 (46.5% per annum). For the year ended December 31, 2022 and for the period December 13, 2021 through December 31, 2021, Gladiator paid $4,514 and $541 in interest expense related to this note, respectively. The note has been fully paid off.
	On September 15, 2022, Gladiator received additional funding of $150,000 from their supplier, Kapitus Servicing Inc. The Company agreed to pay back the note in weekly installments of $3,003, which includes interest, for a total term of 15 months from commencement. The interest paid over the maturity period totals $45,000 (24% per annum). For the year ended December 31, 2022, Gladiator paid $18,018 in interest expense related to this note. The Company accrued interest payable of $7,379 on this note as of and for the three months ended March 31, 2023.
(b)	On September 23, 2021, Mr. Sierra resigned from his position of employment with USS. As a result, USS agreed to repurchase 100 shares of common stock held by Mr. Sierra and in exchange, issued a promissory note with a repurchase amount of $637,500. The repurchase amount was reduced by $405,545 as a result of distributions to Mr. Sierra from the Company. The remaining value of $231,955 is to be repaid through the promissory note. This note bears no interest and monthly installment payments are payable over 4 years beginning November 15, 2021. The promissory note was discounted at 6% prior to acquisition, however, was recognized at fair value upon the acquisition of USS by James Maritime, for an adjusted fair value of $182,773. As of March 31, 2023 and December 31, 2022, the note had an outstanding principal of $158,611 and $168,276, respectively.
(c)	On June 3, 2022, USS entered into a promissory note agreement with IOU Central Inc. for $336,000, which matures on November 29, 2023. The Company agreed to pay back the note in weekly installments of $5,690 and a final payment of $2,831, which includes interest, as well as incudes $1,038 attributable to the weekly loan guarantee fee. An origination fee of $36,000 and a loan guarantee fee of $81,000 are included in the principal was charged and discounted against the note over the term. As of December 31, 2022, the note had an outstanding principal balance of $211,246 and a debt discount of $68,646. As of March 31, 2023, the note had an outstanding principal balance of $154,056 and a debt discount of $65,646.

10. Loans, current and non-current

The following table summarizes the outstanding loans amount owed by the Company as of March 31, 2023 and 2022:

		2023		2022
Quattro Capital	(a)	$	237,500	$	237,500
Merchant cash advances	(b)		18,019		206,680
Vehicle loans	(c)		103,197		117,971
Newtek	(d)		386,164		395,973
SBA Loan	(e)		67,800		67,800
Westwood settlement	(f)		20,000		50,000
Total loans outstanding		$	832,680	$	1,075,924
Loans, current portion			408,247		585,831
Loans, excluding current			424,433		490,093

(a)

On December 9, 2022, Gladiator entered into a collateralized loan of the Company’s inventory with Quattro Capital LLC, a third-party lender. The Company received $250,000, maturing 60 days after the effective date, or February 9, 2023. The Company is responsible for paying additional fees related to the escrow agent and brokers in the amounts of $6,000 and $6,500, which is included in the loan balance as a debt discount. The interest will accrue at a non-compounding rate of 25% of the total loan value upon maturity (or $62,500). Penalty interest of $1,200 will accrue daily after the maturity date until the full value of the loan is paid. As of the date these condensed consolidated financial statements are filed, the loan is in default, and the Company has included interest (including penalty interest) of $113,125 as of March 31, 2023.

(b)

On September 16, 2022, Gladiator entered into a collateralized loan of the Company’s future receipts of receivables with Pinnacle Business Funding LLC (“PBF”). The Company received net amount of $145,500 (net of $$4,500 paid for ACH fees) in exchange for $202,500 receivables purchased by PBF. The Company agreed to pay $6,328 per week as funds are made available to be sent to PBF until paid off in its entirety. As of March 31, 2023 and December 31, 2022, $18,019 and $77,368 remains outstanding, respectively (2022 - $107,578 principal netted against $30,210 of a debt discount).

-18-

JAMES MARITIME HOLDINGS INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(b)	On November 18, 2021, USS entered into a collateralized loan of the Company’s future receipts of receivables with GHI Funding, LLC (“GHI”). The Company received a net amount of $180,000 (net of $20,000 paid for ACH fees) in exchange for $300,000 receivables purchased by GHI. The Company agreed to pay $2,600 every day for which funds are available to be sent to GHI until paid off in its entirety. As of December 31, 2022, $103,312 remains outstanding. This loan was satisfied in full during the three months ended March 31, 2023.
	On December 28, 2021, USS entered into a collateralized loan of the Company’s future receipts of receivables with Adar Funding, LLC (“AF”). The Company received a net amount $180,000 (net of $20,000 paid for ACH fees) in exchange for $300,000 receivables purchased by AF. The Company agreed to pay $5,000 every day for which funds are available to be sent to AF until paid off in its entirety. As of December 31, 2022, $26,000 remains outstanding. This loan was satisfied in full during the three months ended March 31, 2023.
(c)	Upon acquisition of USS at September 23, 2022, the Company assumed the liabilities for eleven vehicle loans from USS which together had an outstanding total amount of $140,300. During the period beginning September 23, 2022 and ended December 31, 2022, the Company made principal repayments of $47,268 for its vehicle loans. At March 31, 2023 and December 31, 2022, the total amount outstanding is $103,197 and $117,971, respectively, with 9 vehicle loans currently outstanding. The Company currently has loans for vehicles with interest rates between 0% and 12.6%, per annum. Monthly payments range from $98 to $695, with an aggregate monthly payment of $4,923. All loans have a term between 1 and 6 years.
(d)	On December 30, 2020, USS entered into a $466,000 loan agreement (“NewTek loan”) with an outside lender, NewTek Small Business Finance, LLC. The U.S. Small Business Administration (“SBA”) agreed to guarantee up to 75% of the NewTek loan principal in exchange for a guaranty fee of $10,485. Under the terms of the NewTek loan, the interest rate is the prime rate, plus 2.75% and may be adjusted every change period (every quarter). The interest rate is originally stated at 6%. Monthly installment payments, which include interest, began on February 2, 2021. As of March 31, 2023 and December 31, 2022, the principal balance was $386,164 and $395,973, respectively, and accrued interest payable as of March 31, 2023 and December 31, 2022 of $52,652 and $47,517, respectively.
(e)	On March 3, 2021, the Company received a loan from the U.S. Small Business Administration (“SBA”) in the amount of $67,900 with an interest rate of 3.75% per annum. The loan is due and payable thirty (30) years from the date of the note. Interest accrued as of March 31, 2023 and December 31, 2022 is $7,204 and $4,661, respectively.
(f)	On July 9, 2021, USS sold $685,000 of their receivables in a purchase agreement with an outside lender, Westwood Funding Solutions, LLC (“Westwood”). The purchase price of the receivables totaled $685,000, with the Company receiving net proceeds of $500,000 after applicable fees were deducted. The Westwood Funding agreement was guaranteed by the USS CEO. On December 27, 2022, Westwood entered into a settlement agreement with USS for an amount of $125,000. On December 28, 2022 $75,000 was paid towards this balance. The remaining $50,000 as of December 31, 2022 is owed in monthly installments of $10,000 until paid off. As of March 31, 2023, the remaining settlement balance was $20,000.

11. Convertible Notes

On February 8, 2021, Gladiator entered into a note agreement with Pink Holdings LLC. The Company received $10,000 at a 6% interest rate per annum, maturing on February 7, 2022. All principal and interest are due upon maturity. The issuer of the note has the option to convert any part, or all of the outstanding interest or principal amount owed into fully paid and non-assessable shares of common stock of the Company at a stock price at the lower of 10% of the lowest trading price during the 5-trading day period ending on the conversion date per share. As of March 31, 2023 and December 31, 2022, the Company accrued $655 and $505, respectively, in interest related to this note. Due to the variable nature of the conversion feature, this note was determined to contain a derivative liability. It was valued using the Black-Scholes pricing model with the following inputs: 18,508 shares, stock price of $6.00, exercise price of $0.60, 0.1 year term, and volatility of 40.88%.

On February 26, 2021, Gladiator entered into a note agreement with Pink Holdings LLC. The Company received $25,000 at a 6% interest rate per annum, maturing on February 25, 2022. All principal and interest are due upon maturity. The issuer of the note has the option to convert any portion, or all of the outstanding interest or principal amount owed into fully paid and non-assessable shares of common stock of the Company at a stock price at the lower of 10% of the lowest trading day period ending on the conversion date per share. As of March 31, 2023 and December 31, 2022, the Company accrued $1,640 and $1,265, respectively, in interest related to this note. Due to the variable nature of the conversion feature, this note was determined to contain a derivative liability. It was valued using the Black-Scholes pricing model with the following inputs: 46,275 shares, stock price of $6.00, exercise price of $0.60, 0.1 year term, and volatility of 40.88%.

As of March 31, 2023, these notes have not been converted and are overdue.

12. Common shares to-be-issued

On December 23, 2022, the Company received $50,000 as consideration for 50,000 common shares to an officer. These shares were not issued until after March 31, 2023, resulting in a liability rather than equity transaction as of March 31, 2023 and December 31, 2022.

-19-

JAMES MARITIME HOLDINGS INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

13. Stockholders’ Equity

Common Stock

a. Authorized

The Company is authorized to issue 90,000,000 shares of common stock, each with a par value of $0.001.

b. Transactions during the three months ended March 31, 2022

On February 28, 2022, the Company issued 50,000 shares of common stock at a price of $1 per share to an officer. The Company received $50,000 on consideration for the shares issued. There were no transactions during the three months ended March 31, 2023.

Preferred Stock

c. Authorized and voting rights

The Company is authorized to issue 2,000,000 shares of its series A preferred stock, each with a par value of $0.001. Each share of the series A preferred stock has the equivalent voting power of (30) thirty shares of the Company’s common stock. The series A preferred stock does not have any liquidation or dividend rights or preferences. On July 20, 2021 the Company converted 1,600,000 preferred shares held by a related party, in exchange for 750,000 shares of the Company’s common stock (the “July conversion”). The series A preferred stock does not have any native convertible rights, preferences, or other conversion terms, and the Company had not previously signed an agreement setting conversion terms for the July conversion. Therefore, the July conversion met the requirements under ASC 260 to be considered a preferred stock extinguishment for the purposes of calculating the company’s earnings per share available to common shareholders. There were no transactions during the three months ended March 31, 2023 and 2022.

Warrants

The following table summarizes the Company’s warrant activity:

	Number of Warrants		Weighted Average Exercise Price
Outstanding at December 31, 2022		1,000,000	$	3.50
Granted		-		-
Exercised		-		-
Expired/Cancelled		-		-
Outstanding at March 31, 2023		1,000,000	$	3.50
Exercisable at December 31, 2022		1,000,000	$	3.50
Exercisable at March 31, 2023		1,000,000	$	3.50

-20-

JAMES MARITIME HOLDINGS INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

14. Subsequent Events

The Company evaluated subsequent events occurring from April 1, 2023 through June 3, 2024, the date in which the consolidated financial statements were available to be issued.

During April 2023, Adar Funding LLC and GHI Funding LLC entered into a settlement agreement with USS on the remaining balance of their outstanding loan. The settlement agreement is in the amount of $90,000, payable monthly in sums of $10,000 for the first eight months after the agreement date, and monthly sums of $5,000 for the 9th and 10th months. All prior commitments were forgiven with this agreement.

In April 2023, the president of the Company received the 50,000 shares he had paid for in the year ended December 31, 2022 are recorded as common shares to-be-issued at March 31, 2023 and December 31, 2022.

On April 5, 2023, USS entered into a collateralized loan of the Company’s future receipts of receivables with Velocity Group USA Inc. (“Velocity”). The Company received net proceeds of $332,015 (net of $17,985 paid for fees) in exchange for $497,000 receivables purchased by Velocity. The Company agreed to pay $3,381 in daily installments until the loan is paid off in its entirety.

On April 18, 2023, the Company received $10,000 in exchange for 10,000 common stock shares to be issued to an individual stockholder.

On June 8, 2023, USS entered into another collateralized loan of the Company’s future receipts of receivables with Velocity. The Company received net proceeds of $56,615 (net of $3,385 paid for fees) in exchange for $87,000 of receivables purchased by Velocity. The Company agreed to pay $690 in daily installments until the loan is paid off in its entirety.

On June 30, 2023, USS entered into a collateralized loan of the Company’s future receipts of receivables with Itria Ventures LLC (“Itria”). The Company received net proceeds of $57,100 (net of $2,900 paid for ACH fees) in exchange for $81,000 of receivables purchased by Itria. The Company agreed to pay $4,050 per week as funds are made available to be sent to Itria until paid off in its entirety.

-21-

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This quarterly report contains forward-looking statements and information relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, our management. When used in this report, the words “believe,” “anticipate,” “expect,” “will,” “estimate,” “intend”, “plan” and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions. The terms “JMTM,” “we,” “us,” “our,” and the “Company” refer to James Maritime Holdings Inc., a Nevada corporation.

Business Overview

James Maritime Holdings, Inc. operates mainly through its subsidiaries, Gladiator and USS. Gladiator specializes in the distribution of personal protective products, largely through mail-in orders and e-commerce channels. On the other hand, USS offers a combination of professional security personnel services, enhanced by smartphone-based security applications, providing a unique blend of traditional and modern security solutions. The consolidated financial statements were prepared according to U.S. GAAP and SEC regulations. The Company has adopted a December 31 fiscal year-end for financial statement reporting.

The financial statements were prepared with estimates and assumptions that impact the reported amounts of assets and liabilities. These estimates were used for inventories, impairment of long-term assets, and derivatives. The actual results could differ significantly from these estimates. Business combinations were accounted for using the acquisition method. Assets, liabilities, and any remaining non-controlling interests were recognized at fair value on the acquisition date. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and non-controlling interests, was recognized as goodwill. The company considers investments with an original maturity of three months or less at the purchase date as cash and cash equivalents.

Recent Developments

During the past two fiscal years, the company underwent significant corporate changes.

Share Exchange Agreements and Stock Conversions

James Maritime solidified its position in the market by becoming the majority shareholder of Gladiator Solutions Inc., holding approximately 86.7% of all shares outstanding as of December 13, 2021. The acquisition of Gladiator Solutions, Inc. resulted in the issuance of 866,667 shares and brought the total common stock balance to 7,354,129 by the end of 2021. Furthermore, on September 23, 2022, the company fortified its portfolio by completing a share exchange agreement with USS, resulting in James Maritime securing 100% of all USS shares. The acquisition of USS resulted in the issuance of 1,000,000 shares by the end of 2022, and the common stock balance reached 9,004,129. Additional paid-in capital also saw a significant increase to $13,656,447, reflecting the stock issuances and compensations during the year.

There were multiple issuances of common stock for diverse purposes, ranging from shareholder-related issuances to share-based compensations and acquisitions. In 2021, our preferred stock decreased from 2,000,000 to 400,000 shares. This decrease was primarily due to the conversion of preferred stock to common stock. Specifically, 1,600,000 shares of preferred stock were converted, leading to the issuance of 750,000 shares of common stock. Total shareholders' equity, which includes both equity attributable to the company and non-controlling interest, increased from $419,248 at the end of 2021 to $2,182,693 by the end of 2022.

-22-

Results of Operations

Three months ended March 31, 2023 and 2022

We had net sales of $2,736,403 for the three months ended March 31, 2023, as compared to $0 for the three months ended March 31, 2022, an increase of $2,736,403. This increase in revenue was due to the acquisition of Gladiator and USS between the two periods.

Cost of Goods Sold

Cost of Goods Sold for the three months ended March 31, 2023 was $2,040,863, as compared to $0 for the three months ended March 31, 2022, an increase of $2,040,863 due to increased operations from the acquisition of Gladiator and USS.

General and Administrative

Our general and administrative expenses for the three months ended March 31, 2023 were $934,373 an increase of $693,532, or 288%, compared to $240,841 for the three months ended March 31, 2022.

Net loss

As a result of the foregoing, for the three months ended March 31, 2023, we recorded a net loss of $1,192,552 compared to a net loss of $240,841 for the three months ended March 31, 2022.

Liquidity and Capital Resources

At March 31, 2023, the Company had $76,577 cash. The Company has limited commercial experience and had a net loss of $1,192,552 for the three months ended March 31, 2023, and an accumulated deficit of $12,495,115, and a working capital deficit of $1,627,717 at March 31, 2023. The Company’s condensed consolidated financial statements are prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and to allow it to continue as a going concern. The accompanying condensed consolidated financial statements for the nine months ended March 31, 2023, have been prepared assuming the Company will continue as a going concern.

We do not believe that we have enough cash on hand to operate our business during the next 12 months. The Company will require additional financing to fund its future planned operations, including research and development and commercialization of its products. To date, the Company has financed its operation primarily from advances from its affiliates. As of March 31, 2023 and December 31, 2022, the Company has received advances totaling $1,950,193 and $1,875,436, respectively, from its affiliates. The formal structure and payment terms of these advances have not yet been determined by the Company and the third parties. We do not have verbal or formal contracts with our affiliates obligating them to loan funds to us.

We may seek to raise additional funding that we require in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our operations. We currently do not have any agreements or arrangements in place for any future financing.

Operating Activities

During the three months ended March 31, 2023, we used $184,860 of cash in operating activities primarily as a result of our net loss of $1,192,552, offset by net changes in working capital items of operating assets and liabilities of $1,007,693.

During the three months ended March 31, 2022, we used $42,916 of cash in operating activities primarily as a result of our net loss of $241,917, offset by net changes in working capital items of operating assets and liabilities of $199,001.

Financing Activities

During the three months ended March 31, 2023, we used $194,017 of cash in financing activities as a result of $355,480 in proceeds from bridge loans and repaid $371,913 of notes payable and $177,584 of loans.

During the three months ended March 31, 2022, financing activities provided $19,000 in proceeds from a bridge loan and $50,000 from the issuance of common shares. This was offset by the repayment of notes payable of $5,051.

Off-Balance Sheet Transactions

At March 31, 2023, the Company did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.

-23-

Item 3. Quantitative and Qualitative Disclosure About Market Risk

As a smaller reporting company, we are not required to provide the information required by this Item 3.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Form 10-Q, management performed, with the participation of our principal executive officer and principal financial officer, an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures. Based on the evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2023, our disclosure controls and procedures were not effective.

Due to resource constraints, material weaknesses are evident to management regarding our inability to generate all the necessary disclosure for inclusion in our filings with the Securities and Exchanges Commission, which is due to the lack of resources and segregation of duties. We lack sufficient personnel with the appropriate level of knowledge, experience and training in GAAP to meet the demands for a public company, including the accounting skills and understanding necessary to fulfill the requirements of GAAP-based reporting. This weakness causes us to not fully identify and resolve accounting and disclosure issues that could lead to a failure to perform timely internal control and reviews. In addition, the Company has not established an audit committee, does not have any independent outside directors on the Company’s Board of Directors, and lacks documentation of its internal control processes.

Management’s Report on Internal Control Over Financial Reporting: Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed 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. The key internal controls for the Company are provided by executive management’s review and approval of all transactions. Our internal control over financial reporting also includes those policies and procedures that:

(1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal controls and procedures over financial reporting as of March 31, 2023. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of these controls.

Based on this assessment, specifically that the Company lacks sufficient personnel with the appropriate level of knowledge, experience and training in GAAP to meet the demands for a public company, including the accounting skills and understanding necessary to fulfill the requirements of GAAP-based reporting. This weakness causes us to not fully identify and resolve accounting and disclosure issues that could lead to a failure to perform timely internal control and reviews. In addition, the Company has not established an audit committee, does not have any independent outside directors on the Company’s Board of Directors, and lacks documentation of its internal control processes, management has concluded that as of March 31, 2023, our internal control over financial reporting was ineffective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

-24-

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently a party to any pending legal proceedings that we believe will have a material adverse effect on our business or financial condition. We may, however, be subject to various claims and legal actions arising in the ordinary course of business from time to time.

Item 1A. Risk Factors

Not required for smaller reporting companies.

Item 2. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None

-25-

Item 6. Exhibits

Exhibit No.	Description of Exhibit
31.1 *	Rule 13a14(a)/15d-14(a) Certification of Principal Executive Officer
31.2 *	Rule 13a14(a)/15d-14(a) Certification of Principal Financial Officer
32.1 *	Section 1350 Certification of Principal Executive Officer/Principal Financial Officer
101.INS**	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH**	Inline XBRL Taxonomy Extension Schema Document
101.CAL**	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB**	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF**	Inline XBRL Taxonomy Definition Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

____________ 

* Filed herewith

** Furnished herewith (not filed)

-26-

SIGNATURES

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

	JAMES MARITIME HOLDINGS INC.
Date: June 3, 2024	By:	/s/ Kip Eardley
		Kip Eardley
		President (Principal Executive Officer)

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

Signature	Title	Date
/s/ Kip Eardley	President	June 3, 2024
Kip Eardley	(Principal Executive Officer)

-27-

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kip Eardley, certify that:

1)	I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 of James Maritime Holdings Inc.;
2)	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)	I am 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) 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: June 3, 2024	By:	/s/ Kip Eardley
		Kip Eardley
		President (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ray Sheets, certify that:

1)	I have reviewed this Quarterly Report on Form 10-Q for quarter ended March 31, 2023 of James Maritime Holdings Inc.;
2)	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)	I am 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) 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: June 3, 2024	By:	/s/ Ray Sheets
		Ray Sheets
		Principal Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF

PRINCIPAL EXECUTIVE OFFICER/PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Kip Eardley, the President of James Maritime Holdings Inc. (the “Company”), hereby certify, that, to my knowledge:

1.	The Quarterly Report on Form 10-Q for the period ended March 31, 2023 (the "Report") of the Company fully complies with the requirements of Section 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.

Date: June 3, 2024	By:	/s/ Kip Eardley
		Kip Eardley
		President (Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the accompanying report of James Maritime Holdings Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2023 (the “Report”), I, Ray Sheets, Chief Finance Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	To my knowledge, the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: June 3, 2024	By:	/s/ Ray Sheets
		Ray Sheets
		Principal Financial and Accounting Officer

XML

Cover - shares	3 Months Ended
	Mar. 31, 2023	Jun. 03, 2024
Cover [Abstract]
Entity Registrant Name	JAMES MARITIME HOLDINGS INC.
Entity Central Index Key	0000889353
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	No
Document Period End Date	Mar. 31, 2023
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2023
Entity Common Stock Shares Outstanding		8,566,429
Entity File Number	000-55805
Entity Incorporation State Country Code	NV
Entity Tax Identification Number	95-4363944
Entity Address Address Line 1	9160 South 300 West
Entity Address Address Line 2	#101
Entity Address City Or Town	Sandy
Entity Address State Or Province	UT
Entity Address Postal Zip Code	84070
City Area Code	801
Local Phone Number	706-9429
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2023	Dec. 31, 2022
ASSETS
Cash	$ 76,577	$ 455,454
Accounts receivables	667,267	722,367
Prepaid expenses and other current assets	41,876	70,487
Total current assets	785,720	1,248,308
Due from related parties	28,746	7,379
Intangible assets	2,951,178	4,150,280
Property and equipment, net	152,891	200,502
Right-of-use asset	400,925	168,339
Total assets	4,319,461	5,774,808
LIABILITIES
Accounts payable and accrued expenses	1,089,974	921,230
Accrued payroll expenses	172,285	161,360
Deferred revenue	0	400,000
Common stock to-be-issued	50,000	50,000
Notes payable, current portion	259,707	323,562
Convertible debenture, current portion	35,000	35,000
Loans payable, current portion	408,247	585,831
Embedded conversion feature	175,045	331,399
Operating lease liability, current	223,179	114,400
Total current liabilities	2,413,437	2,922,782
Notes payable, net of current portion	110,287	110,287
Loans payable, net of current portion	424,433	490,093
Operating lease liability	381,163	68,953
Total liabilities	3,329,320	3,592,115
SHAREHOLDERS' EQUITY
Preferred Stock - Series A, 2,000,000 authorized shares, $0.001 par value; 400,000 shares issued and outstanding, as of March 31, 2023 and December 31, 2022	400	400
Common Stock, 90,000,000 shares authorized, $0.001 par value; 9,004,129 shares issued and outstanding as of March 31, 2023 and December 31, 2022	9,004	9,004
Additional paid-in capital	13,656,447	13,656,447
Accumulated deficit	(12,495,115)	(11,454,076)
Equity attributable to shareholders of James Maritime Holdings, Inc.	1,170,736	2,211,775
Non-controlling interest	(180,595)	(29,082)
Total shareholders' equity	990,141	2,182,693
Total liabilities and shareholders' equity	$ 4,319,461	$ 5,774,808

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Common Stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common Stock, shares authorized	90,000,000	90,000,000
Common Stock, shares issued	9,004,129	9,004,129
Common Stock, shares outstanding	9,004,129	9,004,129
Series A Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	2,000,000	2,000,000
Preferred stock, shares issued	400,000	400,000
Preferred stock, shares outstanding	400,000	400,000

XML

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
Net sales	$ 2,736,403	$ 0
Cost of goods sold	2,040,863	0
Gross profit	695,540	0
Operating expenses:
Selling, general, and administrative expenses	934,373	240,841
Loss on impairment of intangible assets	911,467	0
Total operating expenses	1,845,840	240,841
Operating loss	(1,150,299)	(240,841)
Other income (expense)
Interest expense	(183,745)	0
Financial expenses	(15,108)	0
Change in fair value of derivative liability	156,354	0
Other income	246	0
Total other expense, net	(42,253)	0
Net loss	(1,192,552)	(240,841)
Less: net income (loss) attributable to non-controlling interests	(151,513)	1,076
Net loss attributable to James Maritime Holdings, Inc. and subsidiaries	$ (1,041,039)	$ (241,917)
Weighted average number of common shares outstanding:
Basic and diluted	9,006,047	7,371,907
Net loss per share:
Basic and diluted	$ (0.12)	$ (0.03)

XML

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY (UNAUDITED) - USD ($)	Total	Common Stock	Preferred Stock	Additional Paid-In Capital	Accumulated Deficit	Total Equity Attributable To The Company	Noncontrolling Interest
Balance, shares at Dec. 31, 2021		7,354,129	400,000
Balance, amount at Dec. 31, 2021	$ 419,248	$ 7,354	$ 400	$ 12,008,097	$ (11,658,970)	$ 356,881	$ 62,367
Issuance of common stock and warrants to shareholders, shares		50,000
Issuance of common stock and warrants to shareholders, amount	50,000	$ 50	0	49,650	0	50,000	0
Net income (loss)	(240,841)	$ 0	$ 0	0	(241,917)	(241,917)	1,076
Balance, shares at Mar. 31, 2022		7,404,129	400,000
Balance, amount at Mar. 31, 2022	228,407	$ 7,404	$ 400	12,058,047	(11,900,887)	164,964	63,443
Balance, shares at Dec. 31, 2022		9,004,129	400,000
Balance, amount at Dec. 31, 2022	2,182,693	$ 9,004	$ 400	13,656,447	(11,454,076)	2,211,775	(29,082)
Net income (loss)	$ (1,192,552)	$ 0	$ 0	0	(1,041,039)	(1,041,039)	(151,513)
Balance, shares at Mar. 31, 2023	2,000,000	9,004,129	400,000
Balance, amount at Mar. 31, 2023	$ 990,141	$ 9,004	$ 400	$ 13,656,447	$ (12,495,115)	$ 1,170,736	$ (180,595)

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net loss	$ (1,192,552)	$ (241,917)
Adjustments to reconcile net loss to net cash provided by operating activities:
Loss on impairment of goodwill and intangibles	911,467	0
Depreciation and amortization	606,122	0
Amortization of debt discounts	37,032	0
Change in fair value of derivative liability	(156,354)	0
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	28,611	0
Accounts receivable	55,100	0
Other assets	(232,586)	0
Due from related party	(21,367)	0
Accounts payable and accrued expenses	168,743	199,001
Accrued payroll	10,925	0
Deferred revenue	(400,000)	0
Net cash used in operating activities	(184,860)	(42,916)
Cash flows from financing activities
Proceeds from shares to-be-issued	0	50,000
Proceeds from notes	0	19,000
Payment of notes	(371,913)	(5,051)
Proceeds from loans	355,480	0
Payment of loans	(177,584)	0
Net cash (used in) provided by financing activities	(194,017)	63,949
Net (decrease) increase in cash	(378,877)	21,003
Cash, beginning of period	455,454	110,460
Cash, end of period	$ 76,577	$ 131,463

XML

Nature and Continuance of Operations

3 Months Ended

Mar. 31, 2023

Nature and Continuance of Operations

Nature and Continuance of Operations

1. Nature and Continuance of Operations

Business Operations Basis of Presentation

The accompanying consolidated financial statements include the accounts of James Maritime Holdings Inc. (“James Maritime”) and its majority-owned subsidiary, Gladiator Solutions Inc. (“Gladiator”), and its wholly owned subsidiary United Security Specialists Inc. (“USS”) (collectively as the “Company”). James Maritime Holdings, Inc. was incorporated in the State of Nevada on January 23, 2015.

Substantially all of the Company’s business is conducted through its subsidiaries, Gladiator and USS. Gladiator produces revenues through the distribution of personal protective products, primarily through mail-in orders to customers or via e-commerce sales generated through their website. USS provides professional security personnel enhanced by smartphone-based security applications.

Share Exchange Agreement – United Security Specialists, Inc.

On September 23, 2022, James Maritime Holdings completed a share exchange agreement with USS.

As a result of the exchange, James Maritime became the sole shareholder of USS, holding 100% of all shares outstanding. See Note 3 for further information.

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. The Company has adopted a December 31 fiscal year-end for financial statement reporting purposes.

All operations activity related to James Maritimes’ subsidiary, Gladiator, all operations are included within condensed consolidated statement of operations for the three months ended March 31, 2023 and 2022, respectively.

All operations activity related to James Maritimes’ subsidiary, USS, for the quarterly periods of 2022 and the year ended December 31, 2022, will only reflect activity from September 23, 2022 through December 31, 2022, the period for which USS was acquired and owned by James Maritime. All operations are included within consolidated statement of operations.

All intercompany balances were eliminated in the condensed consolidated financial statements. Non-controlling interests are classified in the accompanying consolidated balance sheets as a component of equity. The amounts of consolidated net income (loss) attributable to both the Company and the non-controlling interests are separately presented in the accompanying consolidated statement of operations.

Going concern

The Company’s consolidated financial statements as of March 31, 2023, are prepared using U.S. GAAP, which contemplates continuation of the Company as a going concern. This contemplates the realization of assets and liquidation of liabilities in the ordinary course of business. The Company has yet to establish an ongoing source of revenue to finance its operating expenses and to continue as a going concern.

During the three months ended March 31, 2023, the Company generated a net loss of $1,192,552. The accumulated deficit as of March 31, 2023 is $12,495,115 ($11,454,076 as of December 31, 2022). In order to continue as a going concern, the Company plans to receive funds through the selling of equity securities to existing and new shareholders. The Company is also evaluating potential acquisitions in the corporate security space. Additionally, the Company has created and maintained good customer relationships during 2023 for both USS and Gladiator, which the Company is relying on to potentially generate sustainable sales throughout 2024 and afterward. While management maintains they will be able to continue to generate sufficient cash flows through a combination of operations, debt, and equity raises, there is no guarantee the Company will be able to raise or generate additional funds in the short term to meet present obligations as they come due. Due to these factors, there is substantial doubt the Company may be able to continue as a going concern. The financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reporting amounts of assets and liabilities.

Estimates are used for, but not limited to, the accounting for inventories, impairment of long-term assets and derivatives.

It is reasonably possible that the estimate of the effect of a condition, situation, or set of circumstances that existing at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results of could differ significantly from those estimates.

Business Combinations

The Company accounts for all business combinations using the acquisition method of accounting. Under this method, assets and liabilities, including any remaining non-controlling interests, are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and non- controlling interests is recognized as goodwill. Certain adjustments to the assessed fair values of assets and liabilities, or non-controlling interests made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Results of operations of the acquired entity are included in the Company’s results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible assets.

Cash

The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash and cash equivalents.

Concentration of Credit Risk

The Company maintains its cash accounts with financial institutions, where, at times, deposits exceed federal insurance limits of $250,000. The Company believes that no significant concentration of credit risk exists with respect to these cash balances due to its assessment of the credit worthiness and financial viability of the financial institutions.

Inventories

Inventories consist primarily of finished goods. Costs of finished goods inventories include all costs incurred to bring inventory to its current condition, which includes standard cost paid to suppliers, shipping costs, and other costs. The Company values its inventory using specific identification method of each inventory item. If the Company determines that the estimated net realizable value of its inventory is less than the carrying value of such inventory, it records a charge to cost of goods sold to reflect the lower of cost or net realizable value. If actual market conditions are less favorable than those projected by the Company, further adjustments may be required that would increase the cost of goods sold in the period in which such a determination was made. As of March 31, 2023 and December 31, 2022, the Company had no inventory on hand.

Accounts Receivable

Accounts receivables are generally recorded at the invoiced amounts, net of an allowance for expected losses. The Company evaluates the collectability of its trade accounts receivable based on a number of factors. In circumstances where the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded, which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer identification of bad debts, bad debt charges are recorded based on the Company’s historical losses and an overall assessment of past due trade accounts receivable outstanding. The allowance for accounts receivable is established through a provision reducing the carrying value of receivables. At March 31, 2023 and December 31, 2022, the Company determined that no allowance was necessary.

Leases

The Company accounts for a contract as a lease when it has the right to direct the use of the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of its right-of-use (“ROU”) assets and lease liabilities at the lease commencement date and thereafter if modified. ROU assets and liabilities are represented on the balance sheet at the present value of future minimum lease payments to be made over the lease term. Leases that are insignificant or with a 12-month term or less at inception are not recorded on the consolidated balance sheet and are expensed as incurred in the consolidated statements of operations. As of December 31, 2022, the Company leased real estate and office space (the “Saratoga Lease”) under non-cancelable operating lease agreements that qualified for ROU accounting treatment. As of March 31, 2023, the Company was in default for the Saratoga Lease and, subsequent to March 31, 2023, terminated the lease with the landlord in a settlement agreement. Commencing on February 1, 2023, the Company leased a second real estate and office space (the “Suite 200 Lease”) under non-cancelable operating lease agreement that qualified for ROU accounting treatment.

Property and equipment

The Company records depreciation when appropriate using the straight-line method over the estimated useful life of the assets. Property and equipment are stated at cost less accumulated depreciation. The estimated useful lives of the Company’s property and equipment by class are as follows:

Asset classes	Useful lives (in years)
Vehicles	5
Furniture and fixtures	7

Management regularly reviews property, equipment, and other long-lived assets for possible impairment. This review occurs annually or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. Based on management’s assessment, there were no indicators of impairment of the Company’s property and equipment as of March 31, 2023 or December 31, 2022.

Intangible Assets

Intangible assets are recorded at their estimated fair value at the date of acquisition and are allocated to the reporting units that are expected to receive the related benefits. During the three months ended March 31, 2023 and year ended December 31, 2022, the Company determined that all intangibles related to the acquisition of USS were fully recognizable at their net book values and therefore no impairment was deemed necessary.

On December 13, 2021, the Company executed a share exchange agreement that resulted in the recognition of intangible assets (see Note 3 – Gladiator Share Exchange Agreement). At the time of the share exchange agreement, Management had determined that the intangible assets extrapolated from the share exchange agreement will be amortized over a useful life of 3 years. Concurrent with the cessation of operations of Gladiator, the Company determined that all intangibles related to the acquisition of Gladiator were impaired. As such, in the three months ending March 31, 2023, the Company recorded an Impairment Loss of $911,000, the full value of the unamortized Intangibles.

On September 23, 2022, the Company executed a share exchange agreement that resulted in the recognition of intangible assets (see Note 4 – USS Share Exchange Agreement). Management has determined that the intangible assets extrapolated from the share exchange agreement will be amortized over the useful life of 3 years.

Convertible Debt and Derivative Liabilities

The convertible debt is convertible into shares of common stock at a conversion rate of 10% of the lowest trading price during the previous five trading days. The terms of the embedded conversion feature require embedded derivative instrument treatment and classification as a separate liability. The conversion feature and certain other features are considered embedded derivative instruments, such as a conversion reset provision, a penalty provision and redemption option, which are to be recorded at their fair value as its fair value can be separated from the convertible note and its conversion is independent of the underlying note. The Company records the resulting discount on debt related to the conversion features at initial transaction and amortizes the discount using the effective interest rate method over the life of the debt instruments. The conversion liability is then marked to market each reporting period with the resulting gains or losses shown in the consolidated statement of operations.

Revenue recognition

The Company recognizes revenue when it satisfies its performance obligations by transferring control of promised products or services to its customers, which occurs either at a point in time or over time, depending on when the customer obtains the ability to direct the use of and obtain substantially all of the remaining benefits from the products or services.

The Company determines revenue recognition through the following five steps:

(1) Identify the contract with the customer,

(2) identify the performance obligations in the contract,

(3) determine the transaction price,

(4) allocate the transaction price to the performance obligations in the contract; and

(5) recognize revenue when, or as, the performance obligations are satisfied.

Net revenues from Gladiator primarily consist of sales of personal protective products, including armor, plates, helmets, shields, and accessories shipped directly to customers. All revenue transactions for Gladiator comprise a single performance obligation, which consists of the sale of products to customers either through wholesale, intermediary, or direct-to-consumer channels. The company satisfies the performance obligation and records revenues when transfer of control has passed to the customer, based on the terms of sale. In all of the Companies revenue channels, transfer of control takes place at the point of sale upon shipment to customer.

Net revenues from USS primarily consist of security services provided to large residential, industrial, construction and government clients. Contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. The Company does offer discounts, but historically the discounts have been insignificant. The Company satisfies the performance obligation for the agreed-upon period of time and location and records revenues after completion. There are no services that would be considered fulfilled over an extended period of time and necessitate different accounting treatment.

Advertising Costs

Advertising costs are charged to selling, general, and administrative expenses. Advertising production costs are expensed the first time an advertisement related to such production costs is run. Media (television, print and radio) placement costs are expensed in the month during which the advertisement appears. Advertising expenses for the three months ended March 31, 2023 and 2022, were approximately $34,000 and $nil, respectively.

Earnings per Share

Basic earnings per common share is computed by dividing net income (loss) available to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per common share are computed by dividing net income (loss) available to common stockholders for the period by the diluted weighted average common shares outstanding during the period. Diluted earnings per share reflects the potential dilution from common shares issuable through stock options, restricted stock units and other equity awards. For the three months ended March 31, 2023 and 2022, the Company generated net losses, therefore applying applicable equity instruments for diluted earnings per share would have had an anti-dilutive effect.

Fair Value of Financial Instruments

The carrying amounts shown for the Company’s cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, and notes and loans approximate fair value because of the short-term maturity of those instruments.

The Company groups its recurring, non-recurring and disclosure-only fair value measurements into the following levels when making fair value measurement disclosures:

Level 1 Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.

Level 3 Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The Company and its subsidiaries use, as appropriate, a market approach (generally, data from market transactions), an income approach (generally, present value techniques and option-pricing models), and / or a cost approach (generally, replacement cost) to measure the fair value of an asset or liability. These valuation approaches incorporate inputs such as observable, independent market data and/or unobservable data that management believes are predicated on the assumptions market participants would use to price an asset or liability. These inputs may incorporate, as applicable, certain risks such as nonperformance risk, which includes credit risk.

The Company received a fair value assessment from a third-party prior to the business combination with Gladiator. See Note 3 for further details and assumptions used in the calculation.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at tax rates expected to be in effect when such assets or liabilities are realized or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date of a change in tax rates. Deferred income tax assets are reduced by valuation allowances when necessary. On March 31, 2023 and December 31, 2022, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required. The 2019 through 2022 tax years remain subject to examination by federal and most state tax authorities.

Commitments and Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings. The Company evaluates the perceived merits of any legal proceedings, or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is possible but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

Non-controlling Interests

Non-controlling interests are classified in the accompanying consolidated balance sheet as a component of equity. The amounts of consolidated net income (loss) attributable to both the Company and the non-controlling interests are separately presented in the accompanying consolidated statements of operations.

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Share Exchange Agreement with Gladiator Solutions Inc

3 Months Ended

Mar. 31, 2023

Share Exchange Agreement with Gladiator Solutions Inc

Share Exchange Agreement with Gladiator Solutions, Inc.

3. Share Exchange Agreement with Gladiator Solutions, Inc.

On December 13, 2021 (the “Gladiator Closing date”), Gladiator (the “Gladiator Seller”) entered into a share exchange agreement with the Company, in which all the outstanding shares of Gladiator, 750,000 common shares, no par value, were exchanged for 1,000,000 shares, $0.001 par value of James Maritime’s common stock.

On the Closing date, one of the seller’s shareholders dissented from participating in the acquisition, which immediately resulted in a noncontrolling interest after the completion of the share purchase agreement. The noncontrolling interest is equivalent to the shareholder’s proportionate holdings of 100,000 Gladiator shares, or 13.3%. The remaining shareholders with an equity stake of 86.7% exchanged their total aggregate shares of 650,000 for 866,667 of James Maritime’s common stock shares.

The Company also included contingent considerations if Gladiator meets or exceeds certain earnings before interest, taxes, amortization (“EBITDA”) thresholds, (the “Gladiator Milestones”):

- $3,000,000 and 25% during any consecutive twelve-month period commencing on the Gladiator closing date and ending December 31, 2024 (the “Measurement period”), the Company shall issue one (1) additional share for each two (2) shares of James Maritime stock received by such shareholder;

- $5,000,000 and 25% during the measurement period, one (1) additional share of James Maritime stock for each one (1) share of James Maritime stock received by such shareholder at the closing;

- $10,000,000 during the measurement period, one (1) additional share of James Maritime stock for each one (1) share of James Maritime stock received by such shareholder at the closing;

- Conversely, in the event Gladiator’s revenues and EBITDA percentage does not equal or exceed $2,000,000 and 25%, respectively, during any consecutive twelve-month period commencing on the closing date and ending on the 24-month anniversary of the Closing date, the seller’s shareholders shall return to the Company an aggregate of 500,000 shares of James Maritime common stock.

The Company utilized a third-party valuation specialist to calculate the intangible assets and estimate the purchase price of the agreement. The valuation utilized a share purchase price of $0.50, which constitutes a Level 2 fair value measurement.

Purchase price (2)	$	433,334
Plus: Net liabilities assumed (3)		967,079
Intangibles (1)	$	1,400,413

____________

(1) Intangibles were determined to consist of two separately identifiable intangible assets to be amortized over their useful lives of 3 years (the average time the company has maintained customer relationships). 50% of the value or $700,206 was attributed to Supplier Relationships and 50% of the value or $700,206 was attributed to Customer Relationships.

(2) The purchase price was calculated by taking the recapitalization of James Maritime Holdings shares of 866,667 (previously 650,000 Gladiator shares) at $0.50 per share, resulting in a total purchase price of $433,334.

(3) Identifiable assets acquired, and liabilities assumed:

The following tables present the allocation of the purchase consideration, which includes tangible assets acquired and liabilities assumed, based on their assessed fair values.

Assets acquired:
Cash	$	60,349
Accounts receivable		1,356
Total assets acquired	$	61,705
Liabilities assumed:
Accounts payable and accrued expenses	$	264,909
Deferred revenue		84,750
Due to related parties		154,948
Note payable		30,987
Convertible debenture		28,370
Loan		67,800
Derivative liability		330,353
Minority interest (4)		66,667
Total liabilities assumed	$	1,028,784
Net assets (liabilities) acquired/assumed	$	(967,079	)

____________

(4) The non-controlling interest was calculated by taking the Level 2 fair value assessment of price per share of $0.50 and multiplying by the recapitalization of James Maritime Holdings shares of 133,333 (previously 100,000 Gladiator shares), resulting in a non-controlling interest valuation of $66,667.

If the share exchange agreement had occurred on January 1, 2021, the pro forma consolidated revenues at December 31, 2021 would have amounted to approximately $308,051 and the consolidated operating loss would have amounted to approximately $1,000,940.

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Share Exchange Agreement with United Securities Specialists Inc (USS)

3 Months Ended

Mar. 31, 2023

Share Exchange Agreement with United Securities Specialists Inc (USS)

Share Exchange Agreement with United Securities Specialists, Inc. (USS)

4. Share Exchange Agreement with United Securities Specialists, Inc. (USS)

On September 23, 2022 (the “USS Closing date”), USS entered into a share exchange agreement with the Company, in which all the outstanding shares, 100 common shares, no par value, were exchanged for 1,000,000 shares, $0.001 par value of James Maritime common stock.

The Company also included contingent considerations if USS meets or exceeds certain earnings before interest, taxes, amortization (“EBITDA”) thresholds:

a.	$20,000,000 and 15% during any consecutive (12) month period commencing on the Closing date and ending on December 31, 2025 (“the Measurement Period”), the Company shall issue an aggregate 500,000 shares of James Maritime stock
b.	$30,000,000 and 15% during the measurement period, the Company shall issue an aggregate 500,000 shares of James Maritime stock
c.	$40,000,000 and 15% during the measurement period, the Company shall issue an aggregate 500,000 shares of James Maritime stock
d.	$50,000,000 and15% during the measurement period, the Company shall issue an aggregate 500,000 shares of James Maritime stock

If all criteria are met, an aggregate of 2,000,000 earnout shares will be awarded to the Company.

The Company utilized a third-party valuation specialist to calculate the intangible assets and estimate the purchase price of the agreement. The valuation utilized a share purchase price of $1.00, which constitutes a Level 2 fair value measurement.

The allocation of the purchase price in connection with the acquisition of USS was calculated as follows:

Purchase price (2)	$	1,000,000
Plus: Net liabilities assumed (3)		2,439,614
Intangibles (1)	$	3,439,614

____________

(1) Intangibles were determined to consist of two separately identifiable intangible assets to be amortized over their useful lives of 3 years (the average time the Company has maintained customer and employee relationships). 50% of the value or $1,719,807 was attributable to Employee Expertise and 50% of the value or $1,719,807 was attributable to Customer Relationships.

(2) The purchase price was calculated by taking the recapitalization of James Maritime Holdings shares of 1,000,000 (previously 100 Company shares) at $1.00 per share, resulting in a total purchase price of $1,000,000.

(3) The following tables present the allocation of the purchase consideration, which includes tangible and intangible assets acquired and liabilities assumed, based on their assessed fair values. Identifiable assets acquired, and liabilities assumed:

Assets acquired:
Cash	$	21,437
Accounts receivable		206,536
Prepaid expenses		10,487
Property and equipment		199,584
Right-of-use asset		193,839
Intangible assets		99,609
Total assets acquired	$	731,492
Liabilities assumed:
Accounts payable and accrued expenses	$	704,637
Accrued payroll		172,366
Notes payable – current and non-current		1,017,771
Loan – current and non-current		1,066,012
Operating lease liability – current and non-current		210,320
Total liabilities assumed	$	3,171,106
Net assets (liabilities) acquired/assumed	$	(2,439,614	)

If the share exchange agreement had occurred on January 1, 2022, the pro forma consolidated revenues at December 31, 2022 would have amounted to approximately $9,420,417 and the consolidated operating loss would have amounted to approximately $2,301,112.

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Intangible Assets

3 Months Ended

Mar. 31, 2023

Intangible Assets

Intangible Assets

5. Intangible Assets

The Company’s intangible assets are as follows:

	March 31, 2023			December 31, 2022
Customer relationships	$	2,125,491		$	2,420,014
Supplier relationships		700,207			700,207
Employee expertise		1,426,284			1,719,807
Software development costs		99,609			99,609
Less: accumulated amortization and impairment loss		(1,400,413	)		(789,357	)
Net intangible assets	$	2,951,178		$	4,150,280

Amortization expense for the three months ended March 31, 2023 and 2022 equated to $287,635 and $nil, respectively and is included in selling, general, and administrative expenses in the condensed consolidated statements of operations. During the three months ended March 31, 2023, the Company recognized an impairment loss of $911,467 on assets acquired as part of the business combination with Gladiator, due to the uncertainty of future operations of that entity.

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Property and Equipment

3 Months Ended

Mar. 31, 2023

Property and Equipment

Property and Equipment

6. Property and Equipment

The table below displays the Company’s property and equipment balances as of March 31, 2023 and 2022, respectively.

	2023			2022
Furniture and fixtures	$	16,062		$	16,062
Vehicles		195,322			195,322
Less: accumulated amortization		(58,493	)		(10,882	)
Total property and equipment, net	$	152,891		$	200,502

Depreciation expense for the three months ended March 31, 2023 and 2022 equated to $31,548 and $nil, respectively and is included in selling, general, and administrative expenses in the condensed consolidated statements of operations.

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Lease Payable

3 Months Ended

Mar. 31, 2023

Lease Payable

Lease Payable

7. Lease Payable

The Company leases its headquarters office. Leases with an initial term of 12 months or less or are immaterial are not included on the balance sheets. During the year ended December 31, 2020, the Company entered into an office lease for its administrative operations, (the “Saratoga lease"). The Saratoga lease is for a 48.5-month term, with an original expiration date of July 31, 2024, with an initial monthly payment of $8,819. Straight-line rent per month was calculated at $9,522. As of March 31, 2023, the Company was in default for the Saratoga Lease due to non-payment. Subsequent to March 31, 2023, the Company terminated the Saratoga Lease and entered into a settlement agreement with the landlord. During the quarter ending March 31, 2023, the Company entered a new lease for its headquarters office, (the “Suite 200 Lease”) for a 60 month lease with an expiration date of January 31, 2028 with an initial monthly payment of $7,943.

The components of lease expense included on the Company’s consolidated statements of operations were as follows:

	March 31, 2023			December 31, 2022
Weighted average remaining lease term (in years)		2.85			1.58
Weighted average discount rate		7.6	%		6.0	%

Amounts relating to operating leases were presented on the consolidated balance sheets as of March 31, 2023 and December 31, 2022 in the following line items:

	March 31, 2023		December 31, 2022
Operating Leases
ROU lease assets	$	400,925	$	168,339
Lease liabilities, short-term		223,179		114,400
Lease liabilities, long term		381,163		68,953

Future minimum lease payments required under operating leases on an undiscounted cash flow basis as of March 31, 2023 is as follows:

Fiscal Year	Operating Lease Payments
2023	$	163,968
2024		171,346
2025		103,661
2026		107,020
2027		110,228
2028		9,208
Total minimum lease payments		665,431
Less: imputed interest		(101,431	)
Present value of future minimum lease payments		564,000
Less:  current lease liabilities		(182,836	)
Operating lease liabilities, non-current	$	381,164

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Accounts Payable and Accrued Expenses

3 Months Ended

Mar. 31, 2023

Accounts Payable and Accrued Expenses

Accounts Payable and Accrued Expenses

8. Accounts Payable and Accrued Expenses

The accounts payable and accrued expenses balance consists of the following as of March 31, 2023 and December 31, 2022:

	March 31, 2023		December 31, 2022
Accounts Payable	$	839,059	$	723,886
Credit card liability		136,728		156,115
Accrued interest		104,267		26,809
Taxes payable		9,920		14,420
		1,089,974	$	921,230

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Notes Payable current and noncurrent

3 Months Ended

Mar. 31, 2023

Notes Payable current and noncurrent

Notes Payable, current and non-current

9. Notes Payable, current and non-current

The following table summarizes the outstanding notes payable amount owed by the Company as of March 31, 2023 and 2022:

		2023		2022
Kapitus	(a)	$	122,973	$	122,973
Henry Sierra	(b)		158,611		168,276
IOU	(c)		88,410		142,600
Total notes payable outstanding		$	369,994	$	433,849
Notes payable, current portion			259,707		323,562
Notes payable, excluding current			110,287		110,287

(a)	On November 4, 2020 Gladiator received $69,800 from their supplier, Kapitus Servicing Inc. Gladiator agreed to pay back the note in weekly installments of $1,419, which includes interest, for a total term of 15 months from commencement. The interest paid over the maturity period totals $22,336 (45.6% per annum). For the year ended December 31, 2022 and for the period December 13, 2021 through December 31, 2021, Gladiator paid $155 and $240 in interest expense related to this note, respectively. The note has been fully paid off.
	On August 20, 2021, Gladiator received $25,500 from their supplier, Kapitus Servicing Inc. Gladiator agreed to pay back the note in weekly installments of $519, which includes interest, for a total term of 15 months from commencement. The interest paid over the maturity period totals $8,205 (46.5% per annum). For the year ended December 31, 2022 and for the period December 13, 2021 through December 31, 2021, Gladiator paid $4,514 and $541 in interest expense related to this note, respectively. The note has been fully paid off.
	On September 15, 2022, Gladiator received additional funding of $150,000 from their supplier, Kapitus Servicing Inc. The Company agreed to pay back the note in weekly installments of $3,003, which includes interest, for a total term of 15 months from commencement. The interest paid over the maturity period totals $45,000 (24% per annum). For the year ended December 31, 2022, Gladiator paid $18,018 in interest expense related to this note. The Company accrued interest payable of $7,379 on this note as of and for the three months ended March 31, 2023.
(b)	On September 23, 2021, Mr. Sierra resigned from his position of employment with USS. As a result, USS agreed to repurchase 100 shares of common stock held by Mr. Sierra and in exchange, issued a promissory note with a repurchase amount of $637,500. The repurchase amount was reduced by $405,545 as a result of distributions to Mr. Sierra from the Company. The remaining value of $231,955 is to be repaid through the promissory note. This note bears no interest and monthly installment payments are payable over 4 years beginning November 15, 2021. The promissory note was discounted at 6% prior to acquisition, however, was recognized at fair value upon the acquisition of USS by James Maritime, for an adjusted fair value of $182,773. As of March 31, 2023 and December 31, 2022, the note had an outstanding principal of $158,611 and $168,276, respectively.
(c)	On June 3, 2022, USS entered into a promissory note agreement with IOU Central Inc. for $336,000, which matures on November 29, 2023. The Company agreed to pay back the note in weekly installments of $5,690 and a final payment of $2,831, which includes interest, as well as incudes $1,038 attributable to the weekly loan guarantee fee. An origination fee of $36,000 and a loan guarantee fee of $81,000 are included in the principal was charged and discounted against the note over the term. As of December 31, 2022, the note had an outstanding principal balance of $211,246 and a debt discount of $68,646. As of March 31, 2023, the note had an outstanding principal balance of $154,056 and a debt discount of $65,646.

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Loans current and noncurrent

3 Months Ended

Mar. 31, 2023

Loans current and noncurrent

Loans, current and non-current

10. Loans, current and non-current

The following table summarizes the outstanding loans amount owed by the Company as of March 31, 2023 and 2022:

		2023		2022
Quattro Capital	(a)	$	237,500	$	237,500
Merchant cash advances	(b)		18,019		206,680
Vehicle loans	(c)		103,197		117,971
Newtek	(d)		386,164		395,973
SBA Loan	(e)		67,800		67,800
Westwood settlement	(f)		20,000		50,000
Total loans outstanding		$	832,680	$	1,075,924
Loans, current portion			408,247		585,831
Loans, excluding current			424,433		490,093

(a)

On December 9, 2022, Gladiator entered into a collateralized loan of the Company’s inventory with Quattro Capital LLC, a third-party lender. The Company received $250,000, maturing 60 days after the effective date, or February 9, 2023. The Company is responsible for paying additional fees related to the escrow agent and brokers in the amounts of $6,000 and $6,500, which is included in the loan balance as a debt discount. The interest will accrue at a non-compounding rate of 25% of the total loan value upon maturity (or $62,500). Penalty interest of $1,200 will accrue daily after the maturity date until the full value of the loan is paid. As of the date these condensed consolidated financial statements are filed, the loan is in default, and the Company has included interest (including penalty interest) of $113,125 as of March 31, 2023.

(b)

On September 16, 2022, Gladiator entered into a collateralized loan of the Company’s future receipts of receivables with Pinnacle Business Funding LLC (“PBF”). The Company received net amount of $145,500 (net of $$4,500 paid for ACH fees) in exchange for $202,500 receivables purchased by PBF. The Company agreed to pay $6,328 per week as funds are made available to be sent to PBF until paid off in its entirety. As of March 31, 2023 and December 31, 2022, $18,019 and $77,368 remains outstanding, respectively (2022 - $107,578 principal netted against $30,210 of a debt discount).

(b)	On November 18, 2021, USS entered into a collateralized loan of the Company’s future receipts of receivables with GHI Funding, LLC (“GHI”). The Company received a net amount of $180,000 (net of $20,000 paid for ACH fees) in exchange for $300,000 receivables purchased by GHI. The Company agreed to pay $2,600 every day for which funds are available to be sent to GHI until paid off in its entirety. As of December 31, 2022, $103,312 remains outstanding. This loan was satisfied in full during the three months ended March 31, 2023.
	On December 28, 2021, USS entered into a collateralized loan of the Company’s future receipts of receivables with Adar Funding, LLC (“AF”). The Company received a net amount $180,000 (net of $20,000 paid for ACH fees) in exchange for $300,000 receivables purchased by AF. The Company agreed to pay $5,000 every day for which funds are available to be sent to AF until paid off in its entirety. As of December 31, 2022, $26,000 remains outstanding. This loan was satisfied in full during the three months ended March 31, 2023.
(c)	Upon acquisition of USS at September 23, 2022, the Company assumed the liabilities for eleven vehicle loans from USS which together had an outstanding total amount of $140,300. During the period beginning September 23, 2022 and ended December 31, 2022, the Company made principal repayments of $47,268 for its vehicle loans. At March 31, 2023 and December 31, 2022, the total amount outstanding is $103,197 and $117,971, respectively, with 9 vehicle loans currently outstanding. The Company currently has loans for vehicles with interest rates between 0% and 12.6%, per annum. Monthly payments range from $98 to $695, with an aggregate monthly payment of $4,923. All loans have a term between 1 and 6 years.
(d)	On December 30, 2020, USS entered into a $466,000 loan agreement (“NewTek loan”) with an outside lender, NewTek Small Business Finance, LLC. The U.S. Small Business Administration (“SBA”) agreed to guarantee up to 75% of the NewTek loan principal in exchange for a guaranty fee of $10,485. Under the terms of the NewTek loan, the interest rate is the prime rate, plus 2.75% and may be adjusted every change period (every quarter). The interest rate is originally stated at 6%. Monthly installment payments, which include interest, began on February 2, 2021. As of March 31, 2023 and December 31, 2022, the principal balance was $386,164 and $395,973, respectively, and accrued interest payable as of March 31, 2023 and December 31, 2022 of $52,652 and $47,517, respectively.
(e)	On March 3, 2021, the Company received a loan from the U.S. Small Business Administration (“SBA”) in the amount of $67,900 with an interest rate of 3.75% per annum. The loan is due and payable thirty (30) years from the date of the note. Interest accrued as of March 31, 2023 and December 31, 2022 is $7,204 and $4,661, respectively.
(f)	On July 9, 2021, USS sold $685,000 of their receivables in a purchase agreement with an outside lender, Westwood Funding Solutions, LLC (“Westwood”). The purchase price of the receivables totaled $685,000, with the Company receiving net proceeds of $500,000 after applicable fees were deducted. The Westwood Funding agreement was guaranteed by the USS CEO. On December 27, 2022, Westwood entered into a settlement agreement with USS for an amount of $125,000. On December 28, 2022 $75,000 was paid towards this balance. The remaining $50,000 as of December 31, 2022 is owed in monthly installments of $10,000 until paid off. As of March 31, 2023, the remaining settlement balance was $20,000.

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Convertible Notes

3 Months Ended

Mar. 31, 2023

Convertible Notes

Convertible Notes

11. Convertible Notes

On February 8, 2021, Gladiator entered into a note agreement with Pink Holdings LLC. The Company received $10,000 at a 6% interest rate per annum, maturing on February 7, 2022. All principal and interest are due upon maturity. The issuer of the note has the option to convert any part, or all of the outstanding interest or principal amount owed into fully paid and non-assessable shares of common stock of the Company at a stock price at the lower of 10% of the lowest trading price during the 5-trading day period ending on the conversion date per share. As of March 31, 2023 and December 31, 2022, the Company accrued $655 and $505, respectively, in interest related to this note. Due to the variable nature of the conversion feature, this note was determined to contain a derivative liability. It was valued using the Black-Scholes pricing model with the following inputs: 18,508 shares, stock price of $6.00, exercise price of $0.60, 0.1 year term, and volatility of 40.88%.

On February 26, 2021, Gladiator entered into a note agreement with Pink Holdings LLC. The Company received $25,000 at a 6% interest rate per annum, maturing on February 25, 2022. All principal and interest are due upon maturity. The issuer of the note has the option to convert any portion, or all of the outstanding interest or principal amount owed into fully paid and non-assessable shares of common stock of the Company at a stock price at the lower of 10% of the lowest trading day period ending on the conversion date per share. As of March 31, 2023 and December 31, 2022, the Company accrued $1,640 and $1,265, respectively, in interest related to this note. Due to the variable nature of the conversion feature, this note was determined to contain a derivative liability. It was valued using the Black-Scholes pricing model with the following inputs: 46,275 shares, stock price of $6.00, exercise price of $0.60, 0.1 year term, and volatility of 40.88%.

As of March 31, 2023, these notes have not been converted and are overdue.

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Common shares to be issued

3 Months Ended

Mar. 31, 2023

Common shares to be issued

Common shares to-be-issued

12. Common shares to-be-issued

On December 23, 2022, the Company received $50,000 as consideration for 50,000 common shares to an officer. These shares were not issued until after March 31, 2023, resulting in a liability rather than equity transaction as of March 31, 2023 and December 31, 2022.

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Stockholders Equity

3 Months Ended

Mar. 31, 2023

Stockholders Equity

Stockholders' Equity

13. Stockholders’ Equity

Common Stock

a. Authorized

The Company is authorized to issue 90,000,000 shares of common stock, each with a par value of $0.001.

b. Transactions during the three months ended March 31, 2022

On February 28, 2022, the Company issued 50,000 shares of common stock at a price of $1 per share to an officer. The Company received $50,000 on consideration for the shares issued. There were no transactions during the three months ended March 31, 2023.

Preferred Stock

c. Authorized and voting rights

The Company is authorized to issue 2,000,000 shares of its series A preferred stock, each with a par value of $0.001. Each share of the series A preferred stock has the equivalent voting power of (30) thirty shares of the Company’s common stock. The series A preferred stock does not have any liquidation or dividend rights or preferences. On July 20, 2021 the Company converted 1,600,000 preferred shares held by a related party, in exchange for 750,000 shares of the Company’s common stock (the “July conversion”). The series A preferred stock does not have any native convertible rights, preferences, or other conversion terms, and the Company had not previously signed an agreement setting conversion terms for the July conversion. Therefore, the July conversion met the requirements under ASC 260 to be considered a preferred stock extinguishment for the purposes of calculating the company’s earnings per share available to common shareholders. There were no transactions during the three months ended March 31, 2023 and 2022.

Warrants

The following table summarizes the Company’s warrant activity:

	Number of Warrants		Weighted Average Exercise Price
Outstanding at December 31, 2022		1,000,000	$	3.50
Granted		-		-
Exercised		-		-
Expired/Cancelled		-		-
Outstanding at March 31, 2023		1,000,000	$	3.50
Exercisable at December 31, 2022		1,000,000	$	3.50
Exercisable at March 31, 2023		1,000,000	$	3.50

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Subsequent Events

3 Months Ended

Mar. 31, 2023

Subsequent Events

Subsequent Events

14. Subsequent Events

The Company evaluated subsequent events occurring from April 1, 2023 through June 3, 2024, the date in which the consolidated financial statements were available to be issued.

During April 2023, Adar Funding LLC and GHI Funding LLC entered into a settlement agreement with USS on the remaining balance of their outstanding loan. The settlement agreement is in the amount of $90,000, payable monthly in sums of $10,000 for the first eight months after the agreement date, and monthly sums of $5,000 for the 9th and 10th months. All prior commitments were forgiven with this agreement.

In April 2023, the president of the Company received the 50,000 shares he had paid for in the year ended December 31, 2022 are recorded as common shares to-be-issued at March 31, 2023 and December 31, 2022.

On April 5, 2023, USS entered into a collateralized loan of the Company’s future receipts of receivables with Velocity Group USA Inc. (“Velocity”). The Company received net proceeds of $332,015 (net of $17,985 paid for fees) in exchange for $497,000 receivables purchased by Velocity. The Company agreed to pay $3,381 in daily installments until the loan is paid off in its entirety.

On April 18, 2023, the Company received $10,000 in exchange for 10,000 common stock shares to be issued to an individual stockholder.

On June 8, 2023, USS entered into another collateralized loan of the Company’s future receipts of receivables with Velocity. The Company received net proceeds of $56,615 (net of $3,385 paid for fees) in exchange for $87,000 of receivables purchased by Velocity. The Company agreed to pay $690 in daily installments until the loan is paid off in its entirety.

On June 30, 2023, USS entered into a collateralized loan of the Company’s future receipts of receivables with Itria Ventures LLC (“Itria”). The Company received net proceeds of $57,100 (net of $2,900 paid for ACH fees) in exchange for $81,000 of receivables purchased by Itria. The Company agreed to pay $4,050 per week as funds are made available to be sent to Itria until paid off in its entirety.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2023

Summary of Significant Accounting Policies

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reporting amounts of assets and liabilities.

Estimates are used for, but not limited to, the accounting for inventories, impairment of long-term assets and derivatives.

It is reasonably possible that the estimate of the effect of a condition, situation, or set of circumstances that existing at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results of could differ significantly from those estimates.

Business Combinations

The Company accounts for all business combinations using the acquisition method of accounting. Under this method, assets and liabilities, including any remaining non-controlling interests, are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and non- controlling interests is recognized as goodwill. Certain adjustments to the assessed fair values of assets and liabilities, or non-controlling interests made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Results of operations of the acquired entity are included in the Company’s results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible assets.

Cash

The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash and cash equivalents.

Concentration of Credit Risk

The Company maintains its cash accounts with financial institutions, where, at times, deposits exceed federal insurance limits of $250,000. The Company believes that no significant concentration of credit risk exists with respect to these cash balances due to its assessment of the credit worthiness and financial viability of the financial institutions.

Inventories

Inventories consist primarily of finished goods. Costs of finished goods inventories include all costs incurred to bring inventory to its current condition, which includes standard cost paid to suppliers, shipping costs, and other costs. The Company values its inventory using specific identification method of each inventory item. If the Company determines that the estimated net realizable value of its inventory is less than the carrying value of such inventory, it records a charge to cost of goods sold to reflect the lower of cost or net realizable value. If actual market conditions are less favorable than those projected by the Company, further adjustments may be required that would increase the cost of goods sold in the period in which such a determination was made. As of March 31, 2023 and December 31, 2022, the Company had no inventory on hand.

Accounts Receivable

Accounts receivables are generally recorded at the invoiced amounts, net of an allowance for expected losses. The Company evaluates the collectability of its trade accounts receivable based on a number of factors. In circumstances where the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded, which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer identification of bad debts, bad debt charges are recorded based on the Company’s historical losses and an overall assessment of past due trade accounts receivable outstanding. The allowance for accounts receivable is established through a provision reducing the carrying value of receivables. At March 31, 2023 and December 31, 2022, the Company determined that no allowance was necessary.

Leases

The Company accounts for a contract as a lease when it has the right to direct the use of the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of its right-of-use (“ROU”) assets and lease liabilities at the lease commencement date and thereafter if modified. ROU assets and liabilities are represented on the balance sheet at the present value of future minimum lease payments to be made over the lease term. Leases that are insignificant or with a 12-month term or less at inception are not recorded on the consolidated balance sheet and are expensed as incurred in the consolidated statements of operations. As of December 31, 2022, the Company leased real estate and office space (the “Saratoga Lease”) under non-cancelable operating lease agreements that qualified for ROU accounting treatment. As of March 31, 2023, the Company was in default for the Saratoga Lease and, subsequent to March 31, 2023, terminated the lease with the landlord in a settlement agreement. Commencing on February 1, 2023, the Company leased a second real estate and office space (the “Suite 200 Lease”) under non-cancelable operating lease agreement that qualified for ROU accounting treatment.

Property and equipment

The Company records depreciation when appropriate using the straight-line method over the estimated useful life of the assets. Property and equipment are stated at cost less accumulated depreciation. The estimated useful lives of the Company’s property and equipment by class are as follows:

Asset classes	Useful lives (in years)
Vehicles	5
Furniture and fixtures	7

Management regularly reviews property, equipment, and other long-lived assets for possible impairment. This review occurs annually or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. Based on management’s assessment, there were no indicators of impairment of the Company’s property and equipment as of March 31, 2023 or December 31, 2022.

Intangible Assets

Intangible assets are recorded at their estimated fair value at the date of acquisition and are allocated to the reporting units that are expected to receive the related benefits. During the three months ended March 31, 2023 and year ended December 31, 2022, the Company determined that all intangibles related to the acquisition of USS were fully recognizable at their net book values and therefore no impairment was deemed necessary.

On December 13, 2021, the Company executed a share exchange agreement that resulted in the recognition of intangible assets (see Note 3 – Gladiator Share Exchange Agreement). At the time of the share exchange agreement, Management had determined that the intangible assets extrapolated from the share exchange agreement will be amortized over a useful life of 3 years. Concurrent with the cessation of operations of Gladiator, the Company determined that all intangibles related to the acquisition of Gladiator were impaired. As such, in the three months ending March 31, 2023, the Company recorded an Impairment Loss of $911,000, the full value of the unamortized Intangibles.

On September 23, 2022, the Company executed a share exchange agreement that resulted in the recognition of intangible assets (see Note 4 – USS Share Exchange Agreement). Management has determined that the intangible assets extrapolated from the share exchange agreement will be amortized over the useful life of 3 years.

Convertible Debt and Derivative Liabilities

The convertible debt is convertible into shares of common stock at a conversion rate of 10% of the lowest trading price during the previous five trading days. The terms of the embedded conversion feature require embedded derivative instrument treatment and classification as a separate liability. The conversion feature and certain other features are considered embedded derivative instruments, such as a conversion reset provision, a penalty provision and redemption option, which are to be recorded at their fair value as its fair value can be separated from the convertible note and its conversion is independent of the underlying note. The Company records the resulting discount on debt related to the conversion features at initial transaction and amortizes the discount using the effective interest rate method over the life of the debt instruments. The conversion liability is then marked to market each reporting period with the resulting gains or losses shown in the consolidated statement of operations.

Revenue recognition

The Company recognizes revenue when it satisfies its performance obligations by transferring control of promised products or services to its customers, which occurs either at a point in time or over time, depending on when the customer obtains the ability to direct the use of and obtain substantially all of the remaining benefits from the products or services.

The Company determines revenue recognition through the following five steps:

(1) Identify the contract with the customer,

(2) identify the performance obligations in the contract,

(3) determine the transaction price,

(4) allocate the transaction price to the performance obligations in the contract; and

(5) recognize revenue when, or as, the performance obligations are satisfied.

Net revenues from Gladiator primarily consist of sales of personal protective products, including armor, plates, helmets, shields, and accessories shipped directly to customers. All revenue transactions for Gladiator comprise a single performance obligation, which consists of the sale of products to customers either through wholesale, intermediary, or direct-to-consumer channels. The company satisfies the performance obligation and records revenues when transfer of control has passed to the customer, based on the terms of sale. In all of the Companies revenue channels, transfer of control takes place at the point of sale upon shipment to customer.

Net revenues from USS primarily consist of security services provided to large residential, industrial, construction and government clients. Contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. The Company does offer discounts, but historically the discounts have been insignificant. The Company satisfies the performance obligation for the agreed-upon period of time and location and records revenues after completion. There are no services that would be considered fulfilled over an extended period of time and necessitate different accounting treatment.

Advertising Costs

Advertising costs are charged to selling, general, and administrative expenses. Advertising production costs are expensed the first time an advertisement related to such production costs is run. Media (television, print and radio) placement costs are expensed in the month during which the advertisement appears. Advertising expenses for the three months ended March 31, 2023 and 2022, were approximately $34,000 and $nil, respectively.

Earnings per Share

Basic earnings per common share is computed by dividing net income (loss) available to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per common share are computed by dividing net income (loss) available to common stockholders for the period by the diluted weighted average common shares outstanding during the period. Diluted earnings per share reflects the potential dilution from common shares issuable through stock options, restricted stock units and other equity awards. For the three months ended March 31, 2023 and 2022, the Company generated net losses, therefore applying applicable equity instruments for diluted earnings per share would have had an anti-dilutive effect.

Fair Value of Financial Instruments

The carrying amounts shown for the Company’s cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, and notes and loans approximate fair value because of the short-term maturity of those instruments.

The Company groups its recurring, non-recurring and disclosure-only fair value measurements into the following levels when making fair value measurement disclosures:

Level 1 Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.

Level 3 Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The Company and its subsidiaries use, as appropriate, a market approach (generally, data from market transactions), an income approach (generally, present value techniques and option-pricing models), and / or a cost approach (generally, replacement cost) to measure the fair value of an asset or liability. These valuation approaches incorporate inputs such as observable, independent market data and/or unobservable data that management believes are predicated on the assumptions market participants would use to price an asset or liability. These inputs may incorporate, as applicable, certain risks such as nonperformance risk, which includes credit risk.

The Company received a fair value assessment from a third-party prior to the business combination with Gladiator. See Note 3 for further details and assumptions used in the calculation.

Income taxes

Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at tax rates expected to be in effect when such assets or liabilities are realized or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date of a change in tax rates. Deferred income tax assets are reduced by valuation allowances when necessary. On March 31, 2023 and December 31, 2022, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required. The 2019 through 2022 tax years remain subject to examination by federal and most state tax authorities.

Commitments and Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings. The Company evaluates the perceived merits of any legal proceedings, or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is possible but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

Non-controlling Interests

Non-controlling interests are classified in the accompanying consolidated balance sheet as a component of equity. The amounts of consolidated net income (loss) attributable to both the Company and the non-controlling interests are separately presented in the accompanying consolidated statements of operations.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2023

Summary of Significant Accounting Policies

Summary of estimated useful lives of assets

Asset classes	Useful lives (in years)
Vehicles	5
Furniture and fixtures	7

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Share Exchange Agreement with Gladiator Solutions Inc (Tables)

3 Months Ended

Mar. 31, 2023

Share Exchange Agreement with Gladiator Solutions Inc

Summary of intangible assets and purchase price of an agreement

Purchase price (2)	$	433,334
Plus: Net liabilities assumed (3)		967,079
Intangibles (1)	$	1,400,413

Summary of allocation of purchase consideration

Assets acquired:
Cash	$	60,349
Accounts receivable		1,356
Total assets acquired	$	61,705
Liabilities assumed:
Accounts payable and accrued expenses	$	264,909
Deferred revenue		84,750
Due to related parties		154,948
Note payable		30,987
Convertible debenture		28,370
Loan		67,800
Derivative liability		330,353
Minority interest (4)		66,667
Total liabilities assumed	$	1,028,784
Net assets (liabilities) acquired/assumed	$	(967,079	)

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Share Exchange Agreement with United Securities Specialists Inc (USS) (Tables)

3 Months Ended

Mar. 31, 2023

Share Exchange Agreement with United Securities Specialists Inc (USS)

Summary of price allocated regarding acquisition

Purchase price (2)	$	1,000,000
Plus: Net liabilities assumed (3)		2,439,614
Intangibles (1)	$	3,439,614

Summary of acquisition

Assets acquired:
Cash	$	21,437
Accounts receivable		206,536
Prepaid expenses		10,487
Property and equipment		199,584
Right-of-use asset		193,839
Intangible assets		99,609
Total assets acquired	$	731,492
Liabilities assumed:
Accounts payable and accrued expenses	$	704,637
Accrued payroll		172,366
Notes payable – current and non-current		1,017,771
Loan – current and non-current		1,066,012
Operating lease liability – current and non-current		210,320
Total liabilities assumed	$	3,171,106
Net assets (liabilities) acquired/assumed	$	(2,439,614	)

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Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2023

Intangible Assets

Summary of Intangible Assets

	March 31, 2023			December 31, 2022
Customer relationships	$	2,125,491		$	2,420,014
Supplier relationships		700,207			700,207
Employee expertise		1,426,284			1,719,807
Software development costs		99,609			99,609
Less: accumulated amortization and impairment loss		(1,400,413	)		(789,357	)
Net intangible assets	$	2,951,178		$	4,150,280

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Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2023

Property and Equipment

Summary of Property and Equipment

	2023			2022
Furniture and fixtures	$	16,062		$	16,062
Vehicles		195,322			195,322
Less: accumulated amortization		(58,493	)		(10,882	)
Total property and equipment, net	$	152,891		$	200,502

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Lease Payable (Tables)

3 Months Ended

Mar. 31, 2023

Lease Payable

Summary of lease cost

	March 31, 2023			December 31, 2022
Weighted average remaining lease term (in years)		2.85			1.58
Weighted average discount rate		7.6	%		6.0	%

Summary of operating lease

	March 31, 2023		December 31, 2022
Operating Leases
ROU lease assets	$	400,925	$	168,339
Lease liabilities, short-term		223,179		114,400
Lease liabilities, long term		381,163		68,953

Summary of Future minimum lease payments

Fiscal Year	Operating Lease Payments
2023	$	163,968
2024		171,346
2025		103,661
2026		107,020
2027		110,228
2028		9,208
Total minimum lease payments		665,431
Less: imputed interest		(101,431	)
Present value of future minimum lease payments		564,000
Less:  current lease liabilities		(182,836	)
Operating lease liabilities, non-current	$	381,164

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Accounts Payable and Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2023

Accounts Payable and Accrued Expenses

Summary of accounts payable and accrued expenses

	March 31, 2023		December 31, 2022
Accounts Payable	$	839,059	$	723,886
Credit card liability		136,728		156,115
Accrued interest		104,267		26,809
Taxes payable		9,920		14,420
		1,089,974	$	921,230

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Notes Payable current and noncurrent (Tables)

3 Months Ended

Mar. 31, 2023

Notes Payable current and noncurrent

Summary of outstanding notes payable

		2023		2022
Kapitus	(a)	$	122,973	$	122,973
Henry Sierra	(b)		158,611		168,276
IOU	(c)		88,410		142,600
Total notes payable outstanding		$	369,994	$	433,849
Notes payable, current portion			259,707		323,562
Notes payable, excluding current			110,287		110,287

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Loans current and noncurrent (Tables)

3 Months Ended

Mar. 31, 2023

Loans current and noncurrent

Summary of loans

		2023		2022
Quattro Capital	(a)	$	237,500	$	237,500
Merchant cash advances	(b)		18,019		206,680
Vehicle loans	(c)		103,197		117,971
Newtek	(d)		386,164		395,973
SBA Loan	(e)		67,800		67,800
Westwood settlement	(f)		20,000		50,000
Total loans outstanding		$	832,680	$	1,075,924
Loans, current portion			408,247		585,831
Loans, excluding current			424,433		490,093

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Stockholders equity (Tables)

3 Months Ended

Mar. 31, 2023

Stockholders equity (Tables)

Summary of warrants

	Number of Warrants		Weighted Average Exercise Price
Outstanding at December 31, 2022		1,000,000	$	3.50
Granted		-		-
Exercised		-		-
Expired/Cancelled		-		-
Outstanding at March 31, 2023		1,000,000	$	3.50
Exercisable at December 31, 2022		1,000,000	$	3.50
Exercisable at March 31, 2023		1,000,000	$	3.50

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Nature and Continuance of Operations (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Sep. 23, 2022
Net loss	$ (1,192,552)	$ (240,841)
Accumulated deficit	$ (12,495,115)		$ (11,454,076)
JamesMaritime[Member]
Ownership percentage				100.00%

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Summary of Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2023
Vehicles [Member]
Property and equipment useful lifes	5 years
Furniture and Fixtures [Member]
Property and equipment useful lifes	7 years

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Summary of Significant Accounting Policies (Details Narrative) - USD ($)			1 Months Ended	3 Months Ended
	Dec. 13, 2022	Dec. 13, 2021	Sep. 23, 2022	Mar. 31, 2023	Mar. 31, 2022
Inatangible assets useful lifes		3 years	3 years
Cash FDIC Insured limit				$ 250,000
Advertising expense				34,000	$ 0
Impairment Loss				$ (911,000)
Gladiator Solutions Inc. [Member]
Inatangible assets useful lifes	3 years
USS Share Exchange Agreement [Member]
Inatangible assets useful lifes			3 years
Ownership percentage				10.00%

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Share Exchange Agreement with Gladiator Solutions Inc (Details) - USD ($)	Dec. 13, 2021	Sep. 23, 2022
Share Exchange Agreement with Gladiator Solutions Inc
Purchase price	$ 433,334
Intangibles	1,400,413
Plus: Net liabilities assumed	$ 967,079	$ 2,439,614

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Share Exchange Agreement with Gladiator Solutions Inc (Details 1)	Dec. 13, 2021 USD ($)
Share Exchange Agreement with Gladiator Solutions Inc
Cash	$ 60,349
Accounts receivable	1,356
Total assets acquired	61,705
Accounts payable and accrued expenses	264,909
Deferred revenue	84,750
Due to related parties	154,948
Note payable	30,987
Convertible debenture	28,370
Loan	67,800
Derivative liability	330,353
Minority interest	66,667
Total liabilities assumed	1,028,784
Net assets (liabilities) acquired/assumed	$ (967,079)

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Share Exchange Agreement with Gladiator Solutions Inc (Details Narrative) - USD ($)			1 Months Ended	12 Months Ended
	Dec. 13, 2022	Dec. 13, 2021	Sep. 23, 2022	Dec. 31, 2022	Dec. 31, 2021	Mar. 31, 2023
Intangible assets useful life		3 years	3 years
Outstanding shares		750,000				100
Common share exchanged		1,000,000	1,000,000
Par value		$ 0.001				$ 0.001
Noncontrolling interest		100,000
Noncontrolling interes percentage		13.30%
Shareholders descerption		The remaining shareholders with an equity stake of 86.7% exchanged their total aggregate shares of 650,000 for 866,667 of James Maritime’s common stock shares
Business acquisition description		$3,000,000 and 25% during any consecutive twelve-month period commencing on the Gladiator closing date and ending December 31, 2024 (the “Measurement period”), the Company shall issue one (1) additional share for each two (2) shares of James Maritime stock received by such shareholder	$20,000,000 and 15% during any consecutive (12) month period commencing on the Closing date and ending on December 31, 2025 (“the Measurement Period”), the Company shall issue an aggregate 500,000 shares of James Maritime stock
Business acquisition description One		$5,000,000 and 25% during the measurement period, one (1) additional share of James Maritime stock for each one (1) share of James Maritime stock received by such shareholder at the closing	$30,000,000 and 15% during the measurement period, the Company shall issue an aggregate 500,000 shares of James Maritime stock
Additional business acquisition description		$10,000,000 during the measurement period, one (1) additional share of James Maritime stock for each one (1) share of James Maritime stock received by such shareholder at the closing	$40,000,000 and 15% during the measurement period, the Company shall issue an aggregate 500,000 shares of James Maritime stock
Additional business acquisition description one		Conversely, in the event Gladiator’s revenues and EBITDA percentage does not equal or exceed $2,000,000 and 25%, respectively, during any consecutive twelve-month period commencing on the closing date and ending on the 24-month anniversary of the Closing date, the seller’s shareholders shall return to the Company an aggregate of 500,000 shares of James Maritime common stock	$50,000,000 and15% during the measurement period, the Company shall issue an aggregate 500,000 shares of James Maritime stock
Customer Relationships [Member]
Intangible description		$700,206 was attributed to Supplier Relationships and 50% of the value or $700,206 was attributed to Customer Relationships	1,719,807 was attributable to Employee Expertise and 50% of the value or $1,719,807 was attributable to Customer Relationships
JamesMaritime[Member]
Recapitalization description		Holdings shares of 866,667 (previously 650,000 Gladiator shares) at $0.50 per share, resulting in a total purchase price of $433,334	Holdings shares of 1,000,000 (previously 100 Company shares) at $1.00 per share, resulting in a total purchase price of $1,000,000
Share issued during period		133,333
Pro forma consolidated revenues				$ 9,420,417
Consolidated operating loss				$ 2,301,112
Gladiator Solutions Inc. [Member]
Share purchase price		$ 0.50
Intangible assets useful life	3 years
Share issued during period		100,000
Non-controlling interest valuation		$ 66,667
Pro forma consolidated revenues					$ 308,051
Consolidated operating loss					$ 1,000,940

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Share Exchange Agreement with United Securities Specialists Inc (Details) - USD ($)	Sep. 23, 2022	Dec. 13, 2021
Share Exchange Agreement with United Securities Specialists Inc (USS)
Purchase price	$ 1,000,000
Intangibles	3,439,614
Plus: Net liabilities assumed	$ 2,439,614	$ 967,079

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Share Exchange Agreement with United Securities Specialists Inc (Details 1)	Sep. 23, 2022 USD ($)
Share Exchange Agreement with United Securities Specialists Inc (USS)
Accounts receivable	$ 206,536
Prepaid expenses	10,487
Property and equipment	199,584
Right-of-use asset	193,839
Intangible assets	99,609
Total assets acquired	731,492
Accounts payable and accrued expenses	704,637
Accrued payroll	172,366
Notes payable - current and non-current	1,017,771
Loan - current and non-current	1,066,012
Operating lease liability - current and non-current	210,320
Total liabilities assumed	3,171,106
Net assets (liabilities) acquired/assumed	(2,439,614)
Cash	$ 21,437

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Share Exchange Agreement with United Securities Specialists Inc (Details Narrative) - USD ($)		1 Months Ended	12 Months Ended
	Dec. 13, 2021	Sep. 23, 2022	Dec. 31, 2022	Mar. 31, 2023
Outstanding shares	750,000			100
Common share exchanged	1,000,000	1,000,000
Par value	$ 0.001			$ 0.001
Shares issued				2,000,000
Business acquisition description	$3,000,000 and 25% during any consecutive twelve-month period commencing on the Gladiator closing date and ending December 31, 2024 (the “Measurement period”), the Company shall issue one (1) additional share for each two (2) shares of James Maritime stock received by such shareholder	$20,000,000 and 15% during any consecutive (12) month period commencing on the Closing date and ending on December 31, 2025 (“the Measurement Period”), the Company shall issue an aggregate 500,000 shares of James Maritime stock
Business acquisition description One	$5,000,000 and 25% during the measurement period, one (1) additional share of James Maritime stock for each one (1) share of James Maritime stock received by such shareholder at the closing	$30,000,000 and 15% during the measurement period, the Company shall issue an aggregate 500,000 shares of James Maritime stock
Additional business acquisition description	$10,000,000 during the measurement period, one (1) additional share of James Maritime stock for each one (1) share of James Maritime stock received by such shareholder at the closing	$40,000,000 and 15% during the measurement period, the Company shall issue an aggregate 500,000 shares of James Maritime stock
Additional business acquisition description one	Conversely, in the event Gladiator’s revenues and EBITDA percentage does not equal or exceed $2,000,000 and 25%, respectively, during any consecutive twelve-month period commencing on the closing date and ending on the 24-month anniversary of the Closing date, the seller’s shareholders shall return to the Company an aggregate of 500,000 shares of James Maritime common stock	$50,000,000 and15% during the measurement period, the Company shall issue an aggregate 500,000 shares of James Maritime stock
Intangible assets useful life	3 years	3 years
Customer Relationships [Member]
Intangible description	$700,206 was attributed to Supplier Relationships and 50% of the value or $700,206 was attributed to Customer Relationships	1,719,807 was attributable to Employee Expertise and 50% of the value or $1,719,807 was attributable to Customer Relationships
JamesMaritime[Member]
Recapitalization description	Holdings shares of 866,667 (previously 650,000 Gladiator shares) at $0.50 per share, resulting in a total purchase price of $433,334	Holdings shares of 1,000,000 (previously 100 Company shares) at $1.00 per share, resulting in a total purchase price of $1,000,000
Pro forma consolidated revenues			$ 9,420,417
Consolidated operating loss			$ 2,301,112

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Intangible Assets (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Less: accumulated depreciation	$ (1,400,413)	$ (789,357)
Intangible assets, net	2,951,178	4,150,280
Customer Relationships [Member]
Intangible assets, net	2,125,491	2,420,014
Supplier Relationships [Member]
Intangible assets, net	700,207	700,207
Employee expertise [Member]
Intangible assets, net	1,426,284	1,719,807
Software development costs [Member]
Intangible assets, net	$ 99,609	$ 99,609

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Intangible Assets (Details Narrative)	3 Months Ended
	Mar. 31, 2023 USD ($)
Intangible Assets
Amortization expense	$ 287,635
Impairment Loss	$ (911,467)

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Property and Equipment (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Property and Equipment
Furniture and fixtures	$ 16,062	$ 16,062
Vehicles	195,322	195,322
Less: accumulated amortization	(58,493)	(10,882)
Total property and equipment, net	$ 152,891	$ 200,502

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Property and Equipment (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Property and Equipment
Depreciation expense	$ 31,548	$ 0

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Lease Payable (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Lease Payable
Weighted average remaining lease term (in years)	2 years 10 months 6 days	1 year 6 months 29 days
Weighted average discount rate	7.60%	6.00%

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Lease Payable (Details 1) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Lease Payable
ROU lease assets	$ 400,925	$ 168,339
Lease liabilities, short-term	223,179	114,400
Lease liabilities, long-term	$ 381,163	$ 68,953

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Lease Payable (Details 2)	Mar. 31, 2023 USD ($)
Lease Payable
2023	$ 163,968
2024	171,346
2025	103,661
2026	107,020
2027	110,228
2028	9,208
Total minimum lease payments	665,431
Less: imputed interest	(101,431)
Present value of future minimum lease payments	564,000
Less: current lease liabilities	(182,836)
Operating lease liabilities, non-current	$ 381,164

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Lease Payable (Details Narrative) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2020
Lease Payable
Leases monthly payment	$ 7,943	$ 8,819
Straight-line rent per month		$ 9,522
Lease term		lease is for a 48.5-month term, with an original expiration date of July 31, 2024

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Accounts Payable and Accrued Expenses (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Accounts Payable and Accrued Expenses
Accounts payable	$ 839,059	$ 723,886
Credit card liability	136,728	156,115
Accrued interest	104,267	26,809
Taxes payable	9,920	14,420
Accounts Payable and Accrued Expenses	$ 1,089,974	$ 921,230

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Notes Payable current and noncurrent (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Notes payable outstanding	$ 369,994	$ 433,849
Notes payable, current portion	259,707	323,562
Notes payable, excluding current	110,287	110,287
Kapitus [Member]
Notes payable outstanding	122,973	122,973
Henry Sierra [Member]
Notes payable outstanding	158,611	168,276
IOU [Member]
Notes payable outstanding	$ 88,410	$ 142,600

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Notes Payable current and noncurrent (Details Narrative) - USD ($)				1 Months Ended				3 Months Ended		12 Months Ended
	Dec. 09, 2022	Jun. 03, 2022	Nov. 04, 2020	Sep. 15, 2022	Nov. 18, 2021	Sep. 23, 2021	Aug. 20, 2021	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 13, 2021	Mar. 03, 2021
Interest rate													3.75%
Preoceeds from notes								$ 0	$ 19,000
Accrued interest payable								104,267		$ 26,809
Interest expenses								183,745	0
Weekly installments payments								371,913	$ 5,051
Notes payable outstanding												$ 30,987
USS [Member]
Repurchase common stock shares						100
Description of repurchase amount						The repurchase amount was reduced by $405,545 as a result of distributions to Mr. Sierra from the Company. The remaining value of $231,955 is to be repaid through the promissory note
Promissory note issued						$ 637,500
Maturity period						4 years
Weekly installments payments					$ 2,600
Note discounted prior to acquisition						6.00%
Fair value adjusted						$ 182,773
Notes payable outstanding								158,611		168,276
May 31, 2022 [Member] | USS [Member]
Promissory note issued		$ 336,000
Weekly installments payments		5,690
Final payment of note		2,831
Outstanding principal amount								154,056		211,246
Loan guarantee fee weekly		1,038
Origination fee		36,000
Total loan guarantee fee		$ 81,000
Debt discount								$ 65,646		68,646
Gladiator [Member]
Interest rate			45.60%
Preoceeds from notes			$ 69,800
Interest paid			$ 22,336
Interest expenses										155	$ 240
Maturity period	60 days		15 months
Weekly installments payments			$ 1,419
Gladiator [Member] | August 20, 2021 [Member]
Interest rate							46.50%
Preoceeds from notes							$ 25,500
Interest paid							$ 8,205
Interest expenses										4,514	$ 541
Maturity period							15 months
Weekly installments payments							$ 519
Gladiator [Member] | September 15, 2022 [Member]
Interest rate				24.00%
Preoceeds from notes				$ 150,000
Accrued interest payable				7,379
Interest paid				$ 45,000
Interest expenses										$ 18,018
Maturity period				15 months
Weekly installments payments				$ 3,003

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Loans current and noncurrent (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022
Total loans outstanding	$ 832,680		$ 1,075,924
Loans, current portion	408,247	$ 585,831	585,831
Loans, excluding current	424,433	$ 490,093	490,093
Quattro Capital [Member]
Total loans outstanding	237,500		237,500
Merchant Cash Advances [Member]
Total loans outstanding	18,019		206,680
Vehicle Loans [Member]
Total loans outstanding	103,197		117,971
Newtek [Member]
Total loans outstanding	386,164		395,973
SBA Loan [Member]
Total loans outstanding	67,800		67,800
Westwood Settlement [Member]
Total loans outstanding	$ 20,000		$ 50,000

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Loans current and noncurrent (Details Narrative) - USD ($)					1 Months Ended						3 Months Ended
	Dec. 09, 2022	Jul. 09, 2021	Mar. 03, 2021	Nov. 04, 2020	Sep. 23, 2022	Sep. 16, 2022	Dec. 28, 2021	Nov. 18, 2021	Sep. 23, 2021	Dec. 30, 2020	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Sep. 30, 2022
Accrued interest											$ 7,204	$ 4,661
Preoceeds from loans			$ 67,900								355,480		$ 0
Total loans outstanding											832,680		1,075,924
Interest rate			3.75%
Per day installments payments											371,913		5,051
USS [Member]
Preoceeds from loans								$ 180,000
Fees of ACH paid								20,000
Purchased receivables by PBF								300,000
Outstanding amount												103,312
Maturity period									4 years
Per day installments payments								$ 2,600
December 28, 2021 [Member] | USS [Member]
Preoceeds from loans							$ 180,000
Fees of ACH paid							20,000
Purchased receivables by PBF							300,000
Outstanding amount												26,000
Per day installments payments							$ 5,000
December 30, 2020 [Member] | USS [Member]
Accrued interest											52,652	47,517
Preoceeds from loans										$ 466,000
Total loans outstanding											386,164		395,973
Interest rate										6.00%
Description of loan agreement										The U.S. Small Business Administration (“SBA”) agreed to guarantee up to 75% of the NewTek loan principal in exchange for a guaranty fee of $10,485. Under the terms of the NewTek loan, the interest rate is the prime rate, plus 2.75% and may be adjusted every change period (every quarter)
July 9, 2021 [Member] | USS [Member]
Purchase price receivables		$ 685,000
Receivables sold		685,000
Net proceeds from sale		500,000
Settlement amount		125,000
Outstanding amount											20,000	50,000
Per day installments payments		10,000
Payments of debt		$ 75,000
Gladiator [Member]
Accrued interest											113,125
Preoceeds from loans	$ 250,000
Interest rate				45.60%
Description of interest and interest rate	The interest will accrue at a non-compounding rate of 25% of the total loan value upon maturity (or $62,500). Penalty interest of $1,200 will accrue daily after the maturity date until the full value of the loan is paid
Fees of escrow agent	$ 6,000
Fees of brokers	$ 6,500
Maturity period	60 days			15 months
Per day installments payments				$ 1,419
Gladiator [Member] | September 16, 2022 [Member]
Preoceeds from loans						$ 145,500
Fees of ACH paid						4,500
Purchased receivables by PBF						202,500
Remeaning loan amount											18,019	77,368
Outstanding principal amount												107,578
Debt discount												30,210
Per day installments payments						$ 6,328
Vehicle Loans [Member]
Total loans outstanding											103,197		$ 117,971
Vehicle Loans [Member] | USS [Member]
Repayments of loans												47,268
Per day installments payments					$ 4,923
Outstanding liability											$ 103,197	$ 117,971		$ 140,300
Vehicle Loans [Member] | USS [Member] | Minimum [Member]
Interest rate					0.00%
Maturity period					1 year
Per day installments payments					$ 98
Vehicle Loans [Member] | USS [Member] | Maximum [Member]
Interest rate					12.60%
Maturity period					6 years
Per day installments payments					$ 695

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Convertible Note Payable (Details Narrative) - USD ($)		1 Months Ended	3 Months Ended
	Feb. 08, 2021	Feb. 26, 2021	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Accrued interest			$ 655		$ 505
Accrued interest payable and interest expense			7,204		4,661
Notes Payable			$ 0	$ 19,000
Convertible Notes [Member]
Maturity	February 7, 2022
Interest rate	6.00%
Black-Scholes pricing mode	18,508
Stock price	$ 6
Trading day	5 days
Covertible year term	1 month 6 days
Volatility rate	40.88%
Exercise price	$ 0.60
Ownership percentage			10.00%
Notes Payable	$ 10,000
Convertible Notes One [Member]
Maturity		February 25, 2022
Interest rate		6.00%
Black-Scholes pricing mode		46,275
Stock price		$ 6
Covertible year term		1 month 6 days
Volatility rate		40.88%
Exercise price		$ 0.60
Ownership percentage			10.00%
Accrued interest payable and interest expense			$ 1,640		$ 1,265
Notes Payable		$ 25,000

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Common shares tobeissued (Details Narrative) - December 23, 2022 [Member]	3 Months Ended
	Mar. 31, 2023 USD ($) shares
Consideration | $	$ 50,000
Stock issued for services | shares	50,000

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Stockholders Equity (Details) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Stockholders Equity
Outstanding at December 31, 2022	1,000,000
Number of warrants granted	0
Number of warrants Exercised	0
Number of warrants Expired/Cancelled	0
Outstanding at March 31, 2023	1,000,000	1,000,000
Number of warrants Exercisable	1,000,000	1,000,000
Weighted Average Exercise Price Outstanding at December 31, 2022	$ 3.50
Weighted Average Exercise Price Granted	0
Weighted Average Exercise Price Exercised	0
Weighted Average Exercise Price Expired/Cancelled	0
Weighted Average Exercise Price Outstanding at March 31, 2023	3.50	$ 3.50
Weighted Average Exercise Price Exercisable	$ 3.50	$ 3.50

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Stockholders Equity (Details Narrative) - USD ($)		1 Months Ended			3 Months Ended	12 Months Ended
	Dec. 13, 2021	Sep. 23, 2022	Feb. 28, 2022	Jul. 20, 2021	Mar. 31, 2023	Dec. 31, 2021	Dec. 31, 2023	Dec. 31, 2022
Common share exchanged	1,000,000	1,000,000
Common Stock, par value							$ 0.001	$ 0.001
Preferred Stock, par value	$ 0.001				$ 0.001
Common stock, shares authorized					90,000,000		90,000,000	90,000,000
Consulting expenses					$ 6,768	$ 0
Officer [Member]
Common stock, shares issued			50,000
Received consideration for the shares issued			$ 50,000
Common stock, shares price			$ 1
Series A Preferred Stock
Preferred stock, shares authorized					2,000,000		2,000,000	2,000,000
Common share exchanged				750,000
Preferred shares				1,600,000
Preferred Stock, par value							$ 0.001	$ 0.001

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Subsequent Events (Details Narrative) - USD ($)			1 Months Ended			3 Months Ended
	Jun. 08, 2023	Apr. 05, 2023	Jun. 30, 2023	Apr. 30, 2023	Apr. 18, 2023	Mar. 31, 2022
Shares issued during period, value						$ 50,000
Subsequent Events | USS LLC
Loan Settlement amount				$ 90,000
Subsequent Events | USS LLC | First eight months
Monthly installment payments				10,000
Subsequent Events | USS LLC | Last two month
Monthly installment payments				$ 5,000
Subsequent Events | Velocity
Total receivables	$ 87,000	$ 497,000
Net proceeds from recievbles	56,615	332,015
Fees paid	3,385	17,985
Daily installment payments	$ 690	$ 3,381
Subsequent Events | Itria
Total receivables			$ 81,000
Weekly installment payments			4,050
Net proceeds from recievbles			57,100
Fees paid			$ 2,900
Subsequent Events | President
Shares received prior to year-end				50,000
Individual stockholder | Subsequent Events
Shares issued during period, shares					10,000
Shares issued during period, value					$ 10,000