UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended: June 30, 2024

 

or

  

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

 

For the transition period from __________ to __________

 

Commission File Number: 000-52759

 

BESPOKE EXTRACTS, INC.

(Exact name of registrant as specified in its charter)

 

Nevada   20-4743354
(State or other jurisdiction 
of incorporation)		   (IRS Employer 
Identification No.)

 

12001 E. 33rd Avenue, Unit O

Aurora, CO, 80010

(Address of principal executive offices)

 

720-949-1143

(Registrant’s telephone number, including area code)

 

 

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

 

Securities registered pursuant to Section 12(b) of the Act: None.

 

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 past 12 months, 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 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 such files).  Yes  ☒   No  ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 October 8, 2024, there were 11,123,552 shares outstanding of the registrant’s common stock, par value $0.001.

 

 

 

 

 

 

TABLE OF CONTENTS

 

      Page No. 
       
PART I - FINANCIAL INFORMATION   1
Item 1. Financial Statements   1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   15
Item 3. Quantitative and Qualitative Disclosures About Market Risk   17
Item 4 Controls and Procedures   18
       
PART II - OTHER INFORMATION   19
Item 1. Legal Proceedings   19
Item 1A. Risk Factors   19
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   19
Item 3. Defaults Upon Senior Securities   19
Item 4. Mine Safety Disclosures   19
Item 5. Other Information   19
Item 6. Exhibits   19

 

i

 

 

PART I

 

Item 1. Financial Statements. 

 

Bespoke Extracts, Inc.

Consolidated Balance Sheets

 

   June 30,   December  31, 
   2024   2023 
         
Assets        
Current assets        
Cash  $24,791   $6,607 
Accounts receivable, net   59,185    45,226 
Prepaid stock awards   1,057    9,206 
Prepaid expense   16,195    5,000 
Inventory, net   32,321    15,800 
Total current assets   133,549    81,839 
           
Furniture and equipment   36,577    40,979 
License   10,000    10,000 
Right of Use Asset   175,351    209,542 
Deposits   12,000    12,000 
Total assets  $367,477   $354,360 
           
Liabilities and Stockholders’ Equity          
Current liabilities          
Accounts payable and accrued liabilities  $1,329,393   $961,255 
Notes payable - secured (Net of discount of $14,693)   117,844    
-
 
Advances - related party   61,872    53,372 
Operating lease liability   64,330    64,330 
Total current liabilities   1,573,439    1,078,957 
           
Note payable - related party   849,500    849,500 
Long-Term Operating Lease Liability   116,675    150,460 
Total liabilities   2,539,614    2,078,917 
           
Commitments and contingencies (Note 10)   
 
    
 
 
           
Stockholders’ Deficit          
Preferred stock, par value $0.001, 50,000,000 shares authorized, 1 share issued and outstanding as of June 30, 2024 and December 31, 2023, respectively   
-
    
-
 
Series C Convertible Preferred Stock, $0.001 par value, 1 share designated;  1 share issued and outstanding as of June 30, 2024 and December 31, 2023, respectively, stated value $24,000.   
-
    
-
 
Common stock, $0.001 par value: 3,000,000,000 authorized; 10,168,552 and 10,168,552 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively   10,166    10,166 
Common stock to issue 6,478 shares   
-
    
-
 
Additional paid-in capital   23,759,351    23,631,918 
Accumulated deficit   (25,941,654)   (25,366,641)
Total stockholders’ deficit   (2,172,137)   (1,724,557)
Total liabilities and stockholders’ deficit  $367,477   $354,360 

 

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

 

1

 

 

Bespoke Extracts, Inc.

Consolidated Statements of Operations

 

   For the three months ended
June 30,		   For the six months ended
June 30,		 
   2024   2023   2024   2023 
                 
Sales  $278,163   $188,247   $538,591   $277,263 
Cost of products sold   172,046    117,211    329,893    195,878 
Gross Profit   106,117    71,036    208,698    81,385 
                     
Operating expenses:                    
Selling, general and administrative expenses   325,885    457,366    673,744    831,881 
Professional fees   30,475    63,172    88,000    124,376 
Consulting   
-
    18,000    
-
    36,000 
Total operating expenses   356,360    538,538    761,744    992,257 
                     
Loss from operations   (250,243)   (467,502)   (553,046)   (910,872)
                     
Other income / (expenses)                    
Interest expense   (10,652)   2,587    (21,967)   5,337 
Total other (expense) / income   (10,652)   2,587    (21,967)   5,337 
                     
Loss before income tax   (260,895)   (464,915)   (575,013)   (905,535)
Provision for income tax   
-
    
-
    
-
    
-
 
Net Loss  $(260,895)  $(464,915)  $(575,013)  $(905,535)
                     
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                    
Basic and Diluted   10,168,220    10,168,220    10,168,220    10,107,108 
                     
NET LOSS PER COMMON SHARE OUTSTANDING                    
Basic and Diluted  $(0.03)  $(0.05)  $(0.06)  $(0.09)

 

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

 

2

 

 

Bespoke Extracts, Inc.

Consolidated Statement of Stockholders Deficit

For The three and six months ended June 30, 2024 and June 30, 2023

 

   Preferred   Preferred   Common   Common   Additional         
   Shares   Par   Shares   Par   Paid-in   Accumulated     
   Outstanding   Amount   Outstanding   Amount   Capital   Deficit   Total 
                             
Balance  December 31, 2022           1   $
        -
    9,945,997   $9,944   $23,201,758   $(23,883,798)  $(672,096)
                                    
Purchase Wonderleaf   -    
-
    -    222    49,778    
-
    50,000 
                                    
Stock option expense   -    
-
    -         184,776    
-
    184,776 
                                    
Net loss for the six months ended June 30, 2023   -    
-
    -    
-
    
-
    (905,535)   (905,535)
Balance  June 30, 2023   1   $
-
    9,945,997   $10,166   $23,436,312   $(24,789,333)  $(1,342,855)

 

   Series C                     
   Preferred   Preferred   Common   Common   Additional         
   Shares   Par   Shares   Par   Paid-in   Accumulated     
   Outstanding   Amount   Outstanding   Amount   Capital   Deficit   Total 
                             
Balance  December 31, 2023          1   $
       -
    10,168,220   $10,166   $23,631,918   $(25,366,641)  $(1,724,557)
                                    
Warrants issued with financing   -    
-
    -    
-
    20,231    
-
    20,231 
                                    
Stock option expense   -    
-
    -    
-
    107,202    
-
    107,202 
                                    
Net loss for the six months ended June 30, 2024   -    
-
    -    
-
    
-
    (575,013)   (575,013)
Balance  June 30, 2024   1   $
-
    10,168,220   $10,166   $23,759,351   $(25,941,654)  $(2,172,137)

 

3

 

 

   Preferred   Preferred   Common   Common   Additional         
   Shares   Par   Shares   Par   Paid-in   Accumulated     
   Outstanding   Amount   Outstanding   Amount   Capital   Deficit   Total 
                             
Balance  March 31, 2023              1   $
       -
    9,945,997   $10,166   $23,343,968   $(24,324,418)  $(970,284)
                                    
Stock option expense   -    
-
    -         92,344    
-
    92,344 
                                    
Net loss for the three months ended June 30, 2023   -    
-
    -    
-
    
-
    (464,915)   (464,915)
Balance  June 30, 2023   1   $
-
    9,945,997   $10,166   $23,436,312   $(24,789,333)  $(1,342,855)

 

   Series C                     
   Preferred   Preferred   Common   Common   Additional         
   Shares   Par   Shares   Par   Paid-in   Accumulated     
   Outstanding   Amount   Outstanding   Amount   Capital   Deficit   Total 
                             
Balance  March 31, 2024          1   $
       -
    10,168,220   $10,166   $23,697,971   $(25,680,759)  $(1,972,622)
                                    
Warrants issued with financing   -    
-
    -    
-
    4,596    
-
    4,596 
                                    
Stock option expense   -    
-
    -    
-
    56,784    
-
    56,784 
                                    
Net loss for the three months ended June 30, 2024   -    
-
    -    
-
    
-
    (260,895)   (260,895)
Balance  June 30, 2024   1   $
-
    10,168,220   $10,166   $23,759,351   $(25,941,654)  $(2,172,137)

  

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

 

4

 

 

Bespoke Extracts, Inc.

Consolidated Statements of Cash Flows

 

   For the six months ended
June 30,		 
   2024   2023 
Cash flows from operating activities        
Net Loss  $(575,013)  $(905,535)
Adjustments to reconcile net loss to net cash used in operating activities          
Inventory reserve   
-
    40,393 
Depreciation   4,402    4,566 
Amortization of right of use asset, net   34,191    32,858 
Amortization expense for prepaid expenses for consulting shares   8,149    43,328 
Amortization of debt discount   3,075    
-
 
Stock based compensation and stock option expense   107,202    184,776 
Changes in operating assets and liabilities:          
Accounts receivable   (13,959)   (9,856)
Prepaid expenses   (11,195)   (7,259)
Inventory   (16,521)   (82,757)
Accounts payable and accrued liabilities   368,138    319,612 
Deferred revenue   
-
    9,896 
Operating lease liability, net   (33,785)   (32,462)
Net Cash (used in) operating activities   (125,316)   (402,440)
           
Cash flow from financing activities          
Payment of inventory earnout        (90,000)
Proceeds from issuance of note payable - related party   
-
    469,954 
Proceeds from Advances - related party   8,500    
-
 
Proceeds from secured notes payable   135,000    
-
 
Net cash provided by financing activities   143,500    379,954 
           
Net increase / (decrease) in cash   18,184    (22,486)
Cash at beginning of period   6,607    24,433 
Cash at end of period  $24,791   $1,947 
           
Supplemental disclosure of cash flow information          
Cash paid for interest  $
-
   $
-
 
Cash paid for income taxes  $
-
   $
-
 
           
Noncash investing and financing activities:          
Stock issued to Wonderleaf for fixed assets and license  $
-
   $50,000 

 

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

 

5

 

 

BESPOKE EXTRACTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024

(Unaudited)

 

1. NATURE OF OPERATIONS, SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN

 

Nature of Business Operations 

 

Bespoke Extracts, Inc. (the “Company”) is a Nevada corporation focused on operating in the regulated cannabis markets in the United States. Through Bespoke Extracts Colorado, LLC (“Bespoke Colorado”), we operate a marijuana infused products production facility in Aurora, Colorado.

  

On December 2, 2021, Bespoke Colorado, a newly formed wholly-owned subsidiary of the Company entered into an asset purchase agreement with WonderLeaf, LLC (“WonderLeaf”), and on December 7, 2021, Bespoke Colorado and WonderLeaf entered into an amendment to such asset purchase agreement (as amended, the “WonderLeaf Purchase Agreement”). On January 3, 2023, the Company completed the acquisition of the WonderLeaf assets and the change of control was approved by the Colorado Marijuana Enforcement Division for 222,223 shares of common stock valued at $50,000, or $0.225 per share. At the time of acquisition Wonderleaf had no operations, no employees and was not considered a business.  

 

Principles of Consolidation

 

The accompanying condensed consolidated unaudited financial statements include the accounts of Bespoke Extracts, Inc., and its wholly owned subsidiary Bespoke Extracts Colorado, LLC. All inter-company balances have been eliminated.

 

Going Concern

 

The accompanying consolidated financial statements have been prepared assuming a continuation of the Company as a going concern. The Company had negative cash flows from operations of $125,316 for the six months ended June 30, 2024, and a working capital deficit of $1,439,890 and accumulated deficit of $25,941,654, as of June 30, 2024. This raises substantial doubt about our ability to continue as a going concern for a period of one year from the date of these financial statements.

  

The Company’s ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. There is no assurance that this series of events will be satisfactorily completed.

 

Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail or cease our operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. These financial statements do not include any adjustments that might arise from this uncertainty.

  

Use of Estimates

 

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and accompanying notes. Significant estimates include the assumption used in the valuation of equity-based transactions, valuation of intangible assets, allowance for provision for credit losses and inventory valuation and reserves. Actual results could differ from those estimates. 

 

Cash and Cash Equivalents

 

Cash and cash equivalents include all highly liquid investments with original maturities of three months or less at the time of purchase. At June 30, 2024 and December 31, 2023, the Company did not have any cash equivalents. The Company did not have any cash in excess of FDIC limits of $250,000 at any single bank.

 

Fair Value of Financial Instruments

 

The carrying amounts of cash, accounts receivable, inventory, fixed assets, licenses, and other assets, accounts payable, accrued liabilities, and notes payable approximate their fair values as of June 30, 2024 and December 31, 2023, respectively, because of their short-term natures and the Company’s borrowing rate of interest.

 

6

 

 

Accounts Receivable

 

Accounts receivable are recorded at fair value on the date revenue is recognized. The Company provides allowances for provision for credit losses for estimated losses resulting from the inability of its customers to repay their obligation. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to repay, additional allowances may be required. The Company provides for potential uncollectible accounts receivable based on specific customer identification and historical collection experience adjusted for existing market conditions. If market conditions decline, actual collection experience may not meet expectations and may result in decreased cash flows and increased provision for credit losses.

 

The policy for determining past due status is based on the contractual payment terms of each customer, which are generally net 14 or net 30 days. Once collection efforts by the Company are exhausted, the determination for charging off uncollectible receivables is made. At June 30, 2024 and December 31, 2023, the Company has recorded an allowance for provision for credit losses of $0 and $0, respectively.

 

Inventory, net

 

Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out basis and net realizable value. Net realizable value is defined as sales price less cost of completion, disposition and transportation and a normal profit margin. As of June 30, 2024 and December 31, 2023, inventory amounted to $32,321, and $15,800 net of reserves, respectively, which consisted of finished goods of $0 and $0.

 

Property and equipment

 

Property and equipment is recorded at cost and capitalized from the initial date of service. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated useful lives for significant property and equipment categories are as follows:

 

Schedule of Estimated useful Lives of Property and Equipment

 

Furniture and Equipment     5 years  

 

License

 

License represents the Colorado license for distributing cannabis.

 

Revenue Recognition

 

We account for revenue in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 606, “Revenue from Contracts with Customers”. Revenue is measured based on the amount of consideration that we expect to receive, reduced by discounts and estimates for credits and returns (calculated based upon previous experience and management’s evaluation). Outbound shipping charged to customers is recognized at the time the related merchandise revenues are recognized and are included in net revenues. Inbound and outbound shipping and delivery costs are included in cost of revenues.

 

Our products are sold directly to licensed marijuana dispensaries in Colorado. Revenue is recognized when control of the merchandise is transferred to the customer, which generally occurs upon shipment. Payment is typically due on the date of shipment or within 14 to 30 days.

 

As of June 30, 2024 two customers accounted for approximately 16.3% and 9.5% of accounts receivable.

 

As of December 31, 2023, two customers amounted to 19.4% and 14.9% of accounts receivable.

 

7

 

 

Stock Based Compensation

 

Stock options and warrants issued to consultants and other non-employees as compensation for services provided to the Company are accounted for based on the fair value of the services provided or the estimated fair market value of the option or warrant, whichever is more reliably measurable, and in accordance with FASB ASC 718, Compensation-Stock Compensation, including related amendments and interpretations.

 

Net Income / (Loss) per Share

 

Basic income / (loss) per share amounts are computed based on net income / (loss) divided by the weighted average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that could occur if potentially dilutive securities were exercised or converted to common stock. The dilutive effect of options and warrants and their equivalent is computed by application of the treasury stock method and the effect of convertible securities by the “if converted” method. The effect of 164,876 warrants and 1,565,341 options is anti-dilutive for the Six months ended June 30, 2024 as they are not in the money.

 

Recent accounting pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date.

 

The Company did not adopt any new accounting pronouncements in the reporting period ended June 30, 2024.

 

Income Taxes

 

We utilize the asset and liability method of accounting for income taxes. We recognize deferred tax liabilities or assets for the expected future tax consequences of temporary differences between the book and tax basis of assets and liabilities. We regularly assess the likelihood that our deferred tax assets will be recovered from future taxable income. We consider projected future taxable income and ongoing tax planning strategies in assessing the amount of the valuation allowance necessary to offset our deferred tax assets that will not be recoverable. We have recorded and continue to carry a full valuation allowance against our gross deferred tax assets that will not reverse against deferred tax liabilities within the scheduled reversal period. If we determine in the future that it is more likely than not that we will realize all or a portion of our deferred tax assets, we will adjust our valuation allowance in the period we make the determination. We expect to provide a full valuation allowance on our future tax benefits until we can sustain a level of profitability that demonstrates our ability to realize these assets.

 

2. ASSET PURCHASE AGREEMENT

 

On January 3, 2023, the Company completed the acquisition of the WonderLeaf assets for 222,223 shares of common stock valued at $50,000, or $0.225 per share. At the time of acquisition WonderLeaf had no operations or no employees and was not considered a business. 

 

Pursuant to ASU 2017-01 and ASC 805, the Company analyzed the business of WonderLeaf to determine if the Company acquired a business or acquired assets. Based on this analysis, the Company determined that it acquired assets. No goodwill was recorded since the purchase was accounted for as an asset purchase. In accordance with ASC 805, the fair value of the assets acquired is based on either the fair value of the consideration given or the fair value of the assets acquired, whichever is more clearly evident, and thus, more reliably measurable. The Company used the market price of the 222,223 common shares issued of $50,000 as the fair value of the assets acquired since this value was more clearly evident, and thus, more reliably measurable than the fair value of the license and fixed assets acquired.

 

8

 

 

Company management determined if the Company acquired a business or acquired assets. The FASB issued new guidance (ASU 2017-01) that changed the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606. Under the new guidance, an entity first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set is not a business. If it’s not met, the entity then evaluates whether the set meets the requirement that a business include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. Under the ASU, a set is not a business when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets.

 

Pursuant to 805-10-55-83, the Company first considered the guidance in paragraphs 805-10-55-5A through 55-5C. The identifiable assets that could be recognized in the purchase only included the license and fixed assets. Accordingly, the transaction was not considered a business.

 

The monetary value of the 222,223 shares is deemed by the Company to be $50,000 in accordance with Accounting Standards Codification (“ASC”) 805-50-30 “Business Combinations”, the Company determined that if the consideration paid is not in the form of cash, the measurement may be based on either (i) the cost which is measured based on the fair value of the consideration given or (ii) the fair value of the assets (or net assets) acquired, whichever is more clearly evident and thus more reliably measurable. No goodwill should be recorded since the WPA was accounting for as an asset purchase. The Company determined that the fair value of the common shares issued was a better indicator which is more reliably measurable.

 

The Company assigned a value of $10,000 to the licenses and $40,000 to the fixed assets acquired.

 

3. FURNITURE AND EQUIPMENT.

 

Machinery and equipment consisted of the following at:

 

Schedule of Machinery and Equipment

 

   June 30,
2024		   December 31,
2023		 
Furniture and equipment  $2,745   $2,745 
Machinery and Equipment   47,202    47,202 
Fixed assets, total   49,947    49,947 
Total: accumulated depreciation   (13,370)   (8,968)
Fixed assets, net  $36,577   $40,979 

 

Depreciation expense for the three and six months ended June 30, 2024 and 2023 were $1,952, $4,402, $2,781 and $4,566 respectively.

 

4. NOTE PAYABLE – RELATED PARTY

 

During the year ended December 31, 2023, Infinity Management, LLC an affiliate of Michael Feinsod, the Company’s chief executive officer, loaned the Company an additional $469,954. On September 5, 2023 $849,500 of notes payable were converted into a 5.0% interest bearing note due June 30, 2025 (the “Infinity Note”). In addition, repayment of the Infinity Note will be due out of the proceeds of a new debt or equity capital raise with net proceeds of more than $2,000,000. As of June 30, 2024 and December 31, 2023 the amount owed Infinity Management, LLC is $911,372 and $902,872, respectively.

 

During the year ended December 31, 2023 the Company received additional advances from Infinity Management, LLC of $53,372. During the six months ended June 30, 2024 the Company received additional advances from Infinity Management, LLC of $8,500.

 

9

 

 

5. NOTE PAYABLE – SECURED

 

On February 16, 2024, the Company entered into and closed securities purchase agreements with investors pursuant to which the Company issued and sold to the investors an aggregate of $100,000 in 15% Senior Secured Notes due February 15, 2025 (the “Notes”), and warrants to purchase an aggregate of 100,000 shares of common stock, for an aggregate purchase price of $100,000. The Notes are senior in terms of priority and liquidation to all other existing debt obligations of the Company. The warrants have a term of two years and an exercise price of $0.11. The options were valued at $15,636 using a Black-Scholes pricing model with the following assumptions: dividend yield of 0%, annual volatility of 583%, risk free interest rate of 4.64%, an expected life of 1 years. The Company utilized the Relative Fair Value to allocate the value of the warrants and recorded it as debt discount.

 

On May 20, 2024 the Company entered into and closed securities purchase agreements with investors pursuant to which the Company issued and sold to the investors an aggregate of $10,000 in 15% Senior Secured Notes due May 20, 2025 and warrants to purchase an aggregate of 10,000 shares of common stock, for an aggregate purchase price of $10,000. The Notes are senior in terms of priority and liquidation to all other existing debt obligations of the Company. The warrants have a term of two years and an exercise price of $0.11. The options were valued at $15,636 using a Black-Scholes pricing model with the following assumptions: dividend yield of 0%, annual volatility of 608%, risk free interest rate of 5.42%, an expected life of 1 years. The Company utilized the Relative Fair Value to allocate the value of the warrants and recorded it as debt discount.

 

On June 6, 2024 the Company entered into and closed securities purchase agreements with investors pursuant to which the Company issued and sold to the investors an aggregate of $25,000 in 15% Senior Secured Notes due June 6, 2025 and warrants to purchase an aggregate of 25,000 shares of common stock, for an aggregate purchase price of $25,000. The Notes are senior in terms of priority and liquidation to all other existing debt obligations of the Company. The warrants have a term of two years and an exercise price of $0.11. The options were valued at $15,636 using a Black-Scholes pricing model with the following assumptions: dividend yield of 0%, annual volatility of 614%, risk free interest rate of 4.72%, an expected life of 1 years. The Company utilized the Relative Fair Value to allocate the value of the warrants and recorded it as debt discount.

 

   June 30,
2024		 
Note amount  $135,000 
Debt discount   (20,231)
Amortization of debt discount   3,075 
Notes payable, net  $117,844 

 

6. LEASES

 

In connection with the WonderLeaf Purchase Agreement, Bespoke Colorado entered into a lease agreement (the “Lease”) with WL Holdings, Ltd. (“WL Holdings”) in December 2021. Pursuant to the Lease, Bespoke Colorado will lease from WL Holdings certain commercial space in Aurora, Colorado, where WonderLeaf’s business has been located, commencing upon signing of the Lease and Wonderleaf Purchase Agreement, for a term of five years, which Bespoke Colorado will have an option to renew for an additional five years. Monthly rent under the Lease will start at $6,000. The Lease grants the Company an option to purchase the property for $600,000. The Company has not decided whether it will exercise either option.

 

Supplemental balance sheet information related to leases was as follows:

 

      June 30, 
Operating Leases  Classification  2024 
Right-of-use assets  Right of use assets  $175,351 
         
Current lease liabilities  Current operating lease liabilities   64,330 
Non-current lease liabilities  Long-term operating lease liabilities   116,675 
Total lease liabilities     $245,335 

 

10

 

 

Lease term and discount rate were as follows:

 

   June 30, 
   2024 
Weighted average remaining lease term (years)   3.44 
Weighted average discount rate   4%

 

The component of lease costs was as follows:

 

   June 30, 
   2024 
Operating lease cost  $38,196 
Variable lease cost (1)   2,100 
Total lease costs  $40,296 

 

(1) Variable lease cost primarily relates to common area maintenance, property taxes and insurance on leased real estate.

 

   June 30, 
   2024 
Cash paid for operating lease liabilities  $
       -
 
      

 

Maturities of lease liabilities were as follows as of December 31, 2023:

 

   Operating 
   Leases 
2024  $59,107 
2025   79,380 
2026   72,765 
Total undiscounted lease payments   211,252 
Less: Present value discount   (13,270)
Total Present value of lease liabilities  $197,982 

 

7. EQUITY

 

Common Stock and Preferred Stock

 

On December 5, 2022 the Company approved an amendment to its articles of incorporation to effect a 45-to-1 reverse split of our common stock effective January 13, 2023. All prior amounts equity amounts have been presented to reflect this reverse split.

 

As of June 30, 2024 and 2023, the Company’s authorized capital stock consists of 3,000,000,000 shares of common stock, par value $0.001, and 50,000,000 shares of preferred stock, par value $0.001. 1,000 shares of preferred stock are designated as Series A Convertible Preferred Stock. No shares of Series A Preferred Stock are issued and outstanding as of June 30, 2024 and 2023, respectively. The Company’s Certificate of Designation of Series B Preferred Stock was withdrawn by the Company on September 30, 2020. 1 share of preferred stock is designated Series C Preferred Stock and is issued and outstanding as of June 30, 2024 and 2023, respectively. The Series C Preferred Stock has a stated value of $24,000 and entitles the holder to 51% of the total voting power of the Company’s stockholders. The Company may, in its sole discretion, redeem the Series C Preferred Stock at any time for a redemption price equal to the stated value. Upon payment of the redemption price by the Company, the Series C Preferred Stock will revert to the status of authorized but unissued preferred stock.  

 

On January 3, 2023, the Company completed the acquisition of the WonderLeaf assets for 222,223 shares of common stock valued at $50,000, or $0.225 per share.

 

On December 14, 2021, the board of directors of the Company adopted the Company’s 2021 Equity Incentive Plan (the “2021 Plan”), pursuant to which up to an aggregate of 6,666,667 shares of common stock are available for issuance. Awards under the plan may include options (including incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, performance share awards, or other equity-based awards, each as defined under the 2021 Plan. Options awarded under the 2021 Plan are to have an exercise price of not less than 100% of the fair market value of the common stock on the grant date and a term of not more than ten years from the option grant date.

 

11

 

 

Effective August 1, 2022, the Company issued an aggregate of 266,667 shares of common stock to employees and consultants for services, including 155,556 shares that vest immediately, 55,556 shares that vested one year from the grant date, and 55,556 shares that will vest two years from the grant date. During the year ended December 31, 2022 the Company recorded an expense $1,104,928. For the year ended December 31, 2023 the Company recorded an expense of $70,907, respectively. For the six months ended Junne 30, 2024 the Company recorded and expense of $8,419. As of June 30, 2024 and December 31, 2023 the Company had a prepaid stock award of $1,057 and $9,206.

 

Warrants

 

On February 16, 2024, the Company entered into and closed securities purchase agreements with investors pursuant to which the Company issued and sold to the investors an aggregate of $100,000 in 15% Senior Secured Notes due February 15, 2025 (the “Notes”), and warrants to purchase an aggregate of 100,000 shares of common stock, for an aggregate purchase price of $100,000. The Notes are senior in terms of priority and liquidation to all other existing debt obligations of the Company. The warrants have a term of two years and an exercise price of $0.11.

 

The following table summarizes the warrant activities during the six months ended June 30, 2024:

 

   Number of
Warrants		   Weighted-
Average
Exercise
Price Per
Share		   Weighted-
Average
Remaining
Life		 
Outstanding at December 31, 2023   29,876    25.24    1.21 
Granted   135,000    0.15    1.44 
Canceled or expired   
-
    
-
    
-
 
Outstanding at June 30, 2024   164,876   $0.43    4.46 years 
Exercisable at June 30, 2024   164,876   $0.43    4.46 years 
Intrinsic value at June 30, 2024       $
-
      

 

Options

 

On December 14, 2021, the Company entered into an employment agreement with Hunter Garth, wherein the Company granted to Mr. Garth, pursuant to the Company’s 2021 Equity Incentive Plan, ten-year options to purchase 333,333 shares of common stock at an exercise price of $2.70 (representing a 120% premium over the closing price of the common stock on December 13, 2021). One-third of the options will vest on each yearly anniversary of the date of grant. The options were valued at $450,000 using a Black-Scholes pricing model. During the three and six months ending June 30, 2024 and 2023 the Company recorded $12,318, $24,636, $30,811 and $61,622 respectively of expenses associated with the vesting of these stock options. (See notes 10 and 11).

 

On December 14, 2021, the Company entered into an employment agreement with Michael Feinsod, wherein the Company granted to Mr. Feinsod, pursuant to the Company’s 2021 Equity Incentive Plan, ten-year options to purchase 666,667 shares of common stock at an exercise price of $2.70 (representing a 120% premium over the closing price of the common stock on December 13, 2021). One-third of the options will vest on each yearly anniversary of the date of grant. The options were valued at $900,000 using a Black-Scholes pricing model During the three and six months ended June 30, 2023 and 2022 the Company recorded $24,635, $49,270, $61,261 and $122,522, respectively of expenses associated with the vesting of these stock options. (See notes 10 and 11).

 

On August 17, 2023, the Company issued to several employees options to purchase a total of 222,500 shares of common stock at an exercise price of $0.20. The options vest over a period of 12 months and have a term of 5 years. The options were valued at $44,306 using a Black-Scholes pricing model. During the three and six months ended June 30, 2024 the Company recorded $10,822 and $21,643, respectively of expenses associated with the vesting of these stock options

 

On January 8, 2024, the Company issued to an employee options to purchase a total of 222,500 shares of common stock at an exercise price of $0.20. The options vest 50% on January 15, 2024 and 50% over a period of 12 months and have a term of 10 years. The options were valued at $8,030 using a Black-Scholes pricing model. During the three and six months ended June 30, 2024 the Company recorded $1,115 and $6,489, respectively of expenses associated with the vesting of these stock options

  

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On March 1, 2024, the Company issued to several employees options to purchase a total of 99,000 shares of common stock at an exercise price of $0.22. The options vest over a period of 12 months and have a term of 5 years. The options were valued at $44,306 using a Black-Scholes pricing model. During the three and six months ended June 30, 2024 the Company recorded $4,662 and $6,308 of expenses associated with the vesting of these stock options

 

The following table summarizes the option activities during the six months ended June 30, 2024:

 

   Number of
Options		   Weighted-
Average Exercise
Price Per
Share		   Weighted-
Average
Remaining
Life
Outstanding at December 31, 2023   1,246,341   $2.67   7.94 years
Granted   324,000   $0.22   4.67 years
Canceled or expired   (5,000)   0.22    
Exercised   
-
    
-
    
Outstanding at June 30, 2024   1,565,341   $1.81   6.41 years
Exercisable at June 30, 2024   690,508   $2.19   7.45 years
Intrinsic value at June 30, 2024       $
-
    

 

The future expense as of June 30, 2024 is $93,106.

 

8. RELATED PARTY TRANSACTIONS

  

On December 14, 2021, the Company entered into an employment agreement with Hunter Garth. Pursuant to the employment agreement, Mr. Garth will serve as the Company’s president and will receive a base monthly salary of $8,000. The Company also granted to Mr. Garth, pursuant to the Company’s 2021 Equity Incentive Plan, 500,000 shares of restricted common stock, which vested one year from the date of grant, and ten-year options to purchase 333,333 shares of common stock at an exercise price of $2.70 (representing a 120% premium over the closing price of the common stock on December 13, 2021). One-third of the options will vest on each yearly anniversary of the date of grant. In the event that Mr. Garth is terminated without cause or resigns with good reason (each as defined in the employment agreement), he will be entitled to his monthly base salary for twelve months following such termination.

  

On December 14, 2021, the Company entered into an employment agreement with Michael Feinsod, the Company’s chief executive officer and chairman. Pursuant to the employment agreement, Mr. Feinsod will continue to serve as the Company’s chief executive officer and chairman and will receive a base monthly salary of $10,000. The Company also granted to Mr. Feinsod, pursuant to the Company’s 2021 Equity Incentive Plan, 1,000,000 shares of restricted common stock, which vested one year from the date of grant, and ten-year options to purchase 666,667 shares of common stock at an exercise price of $2.70 (representing a 120% premium over the closing price of the common stock on December 13, 2021). One-third of the options will vest on each yearly anniversary of the date of grant. In the event that Mr. Feinsod is terminated without cause or resigns with good reason (each as defined in the employment agreement), he will be entitled to his monthly base salary for twelve months following such termination.

 

During the year ended December 31, 2023 the Company received additional advances from Infinity Management, LLC. of $53,372. During the six months ended June 30, 2024 the Company received additional advances from Infinity Management, LLC. of $8,500.

 

On September 5, 2023 $849,500 of notes payable were converted into a 5% interest bearing note due June 30, 2025. The note contains provisions whereby it is intended to be subordinate to any senior secured debt the Company may incur while it is outstanding. In addition, repayment of the note will be due in full out of the proceeds of a new debtor equity capital raise with net proceeds of more than $2,000,000. (See Note 4.)

 

As of June 30, 2024 Michael Feinsod is owed a total of $266,772 of accrued salary and accounts payable of $171,553.

 

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9. COMMITMENTS AND CONTINGENCIES

 

In connection with a stock purchase agreement, on October 28, 2021, a convertible debenture with an original issue date of December 24, 2019, as amended by Amendment No. 1 thereto, dated May 28, 2020, Amendment No. 2 thereto, dated August 21, 2020, Amendment No. 3 thereto, dated December 10, 2020, Amendment No. 4 thereto, dated January 15, 2021, Amendment No. 5 thereto, dated April 2, 2021, and Amendment No. 6 thereto, dated August 2, 2021 (as amended, the “Debenture”) with an original principal amount of approximately $400,000 was terminated, and all amounts due and payable thereunder forgiven pursuant to a cancellation and satisfaction of debenture agreement entered into between the Company and the Debenture holder (the “Debt Cancellation Agreement”). In exchange for cancellation of the debt owed under the Debenture, the Company transferred to the holder certain domain names and agreed to pay the holder, beginning December 1, 2021, and on a monthly basis through August 31, 2022, 40% of the operating profit generated from sale of the existing CBD inventory of the Company (the “Inventory Earn Out”), and on August 31, 2022, to make a final payment equal to an amount of $75,000 minus the total of the monthly payments made under the Inventory Earn Out. The inventory earn-out agreement was amended on November 11, 2022 (see Note 3) such that the final payment under the inventory earn out was increased to $90,000 (less any payments previously made) and was due February 28, 2023. During the year ended December 31, 2023 the amount was paid.

 

On December 14, 2021, the Company entered into an employment agreement with Hunter Garth. Pursuant to the employment agreement, Mr. Garth will serve as the Company’s president and will receive a base monthly salary of $8,000. The Company also granted to Mr. Garth, pursuant to the Company’s 2021 Equity Incentive Plan, 500,000 shares of restricted common stock, which vested one year from the date of grant, and ten-year options to purchase 333,333 shares of common stock at an exercise price of $2.70 (representing a 120% premium over the closing price of the common stock on December 13, 2021). One-third of the options will vest on each yearly anniversary of the date of grant. In the event that Mr. Garth is terminated without cause or resigns with good reason (each as defined in the employment agreement), he will be entitled to his monthly base salary for twelve months following such termination.

 

On December 14, 2021, the Company entered into an employment agreement with Michael Feinsod, the Company’s chief executive officer and chairman. Pursuant to the employment agreement, Mr. Feinsod will continue to serve as the Company’s chief executive officer and chairman and will receive a base monthly salary of $10,000. The Company also granted to Mr. Feinsod, pursuant to the Company’s 2021 Equity Incentive Plan, 1,000,000 shares of restricted common stock, which vested one year from the date of grant, and ten-year options to purchase 666,667 shares of common stock at an exercise price of $0.06 (representing a 120% premium over the closing price of the common stock on December 13, 2021). One-third of the options will vest on each yearly anniversary of the date of grant. In the event that Mr. Feinsod is terminated without cause or resigns with good reason (each as defined in the employment agreement), he will be entitled to his monthly base salary for twelve months following such termination.

 

On August 11, 2022, the Company and Bespoke Colorado entered into an asset purchase agreement with Osiris, LLC doing business as Best Day Ever (“BDE”) and Michael Gurtman. Pursuant to the purchase agreement, Bespoke Colorado agreed to purchase from BDE, and BDE agreed to sell to Bespoke Colorado, the assets of BDE, including certain licenses. The Company also agreed to assume certain leases, all as further set forth in the purchase agreement. As consideration for the acquisition of the assets, the Company agreed to issue 2,777,778 shares of common stock at the closing of the transaction. Closing of the purchase agreement was subject to receipt of certain governmental approvals and other customary closing conditions. The purchase agreement was terminated on November 18, 2022.

 

10. SUBSEQUENT EVENTS

 

On August 14, 2024, the Company granted to employees and consultants, pursuant to the Company’s 2021 Equity Incentive Plan, an aggregate of 1,030,000 shares of restricted common stock.

 

14

 

 

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

 

We and our representatives may from time to time make written or oral statements that are “forward-looking,” including statements contained in this report and other filings with the SEC, reports to our stockholders and news releases. All statements that express expectations, estimates, forecasts or projections are forward-looking statements. In addition, other written or oral statements which constitute forward-looking statements may be made by us or on our behalf. Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “project,” “forecast,” “may,” “should,” and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in or suggested by such forward-looking statements. We undertake no obligation to update or revise any of the forward-looking statements after the date of this report to conform forward-looking statements to actual results, except as may be required under applicable law. Important factors on which such statements are based are assumptions concerning uncertainties, including but not limited to, uncertainties associated with the following:

 

  ● Inadequate capital and barriers to raising the additional capital or to obtaining the financing needed to implement our business plans;

 

  ● Our failure to earn significant revenues or profits;

 

  ● Volatility, lack of liquidity or decline of our stock price;

 

  ● Potential fluctuation in quarterly results;

 

  ● Rapid and significant changes in markets; and

 

  ● Insufficient revenues to cover operating costs.

  

The following discussion should be read in conjunction with the financial statements and the notes thereto which are included in this report.

 

Overview

 

Through our wholly-owned subsidiary, Bespoke Extracts Colorado, LLC, we operate a marijuana infused products manufacturing facility in Colorado.

 

In November 2021, new management of the Company was appointed and the Company began to focus on other complimentary lines of business to its CBD offerings. Under our new management team, we plan to expand the Company’s focus to regulated cannabis markets in the United States.

 

On December 2, 2021, Bespoke Extracts Colorado, LLC, a newly formed wholly-owned subsidiary of the Company entered into an asset purchase agreement with WonderLeaf, and on December 7, 2021, Bespoke Colorado and WonderLeaf entered into an amendment to such asset purchase agreement (as amended, the “WonderLeaf Purchase Agreement”). Pursuant to the Wonderleaf Purchase Agreement, Bespoke Colorado agreed to purchase from WonderLeaf, and WonderLeaf agreed to sell to Bespoke Colorado, certain assets of WonderLeaf, including a license to manufacture marijuana-infused products, existing inventory, and extraction equipment and ancillary items, all as further set forth in the WonderLeaf Purchase Agreement, for a purchase price of $50,000, to be paid in shares of common stock of the Company. The Company issued a total of 222,223 shares of common stock ($0.225 per share), the fair market value on the date of issuance.

 

15

 

 

Results of Operations for the three months ended June 30, 2024 and June 30, 2023

 

Sales

 

Sales during the three months ended June 30, 2024 were $276,163 compared to $188,247 for the three months ended June 30, 2023. The increase in sales was a result of increased product sales of pre-rolled joints to licensed dispensaries in Colorado.

 

Cost of Goods Sold

 

Cost of goods sold for the three months ended June 30, 2024 was $172,046 compared to $117,211 for the three months ended June 30, 2023. The increase was a direct result of the increase in sales. The increase in cost of sales was due to increases in purchases of raw materials, packaging, and labor associated with the production of pre-rolled joints.

 

Operating Expenses

 

Selling, general and administrative expenses for the three months June 30, 2024 and June 30, 2023 were $325,885 and $457,366, respectively. The decrease was mainly attributable to stock-based compensation of $107,202 for the three months ended June 30, 2023 compared to $92,344 for the three months ended June 30, 2022 and were partially offset by increase in salaries. Professional fees were $30,475 and $63,172, respectively for the three months ended June 30, 2024 and June 30, 2023. The decrease in expenses was due to decreased general legal fees.. Consulting expense was $0 and $18,000, for the three months ended June 30, 2024 and June 30, 2023, respectively.  

 

Net Loss

 

Our net loss for the three months ended June 30, 2024 was $260,895, or $0.03 per share, compared to a net loss for the three months ended June 30, 2023 of $464,915, or $0.05 per share.

 

Results of Operations for the six months ended June 30, 2024 and June 30, 2023

 

Sales

 

Sales during the six months ended June 30, 2024 were $538,591 compared to $277,263 for the six months ended June 30, 2023. The increase in sales was a result of increased product sales of pre-rolled joints to licensed dispensaries in Colorado.

 

Cost of Goods Sold

 

Cost of goods sold for the six months ended June 30, 2024 was $329,893 compared to $195,878 for the six months ended June 30, 2023. The increase was a direct result of the increase in sales. The increase in cost of sales was due to increases in purchases of raw materials, packaging, and labor associated with the production of pre-rolled joints.

 

Operating Expenses

 

Selling, general and administrative expenses for the six months June 30, 2024 and June 30, 2023 were $673,744 and $831,881, respectively. The decrease was mainly attributable to stock-based compensation of $107,202 for the six months ended June 30, 2024 compared to $282,079 for the six months ended June 30, 2023 and were partially offset by increase in salaries and product delivery expense. Professional fees were $88,000 and $124,376, respectively for the six months ended June 30, 2024 and June 30, 2023. The decrease in expenses was due to decreased legal fees. Consulting expense was $0 and $36,000 for the six months ended June 30, 2024 and June 30, 2023, respectively.  

 

16

 

 

Net Loss

 

Our net loss for the six months ended June 30, 2024 was $575,013, or $0.06 per share, compared to a net loss for the six months ended June 30, 2023 of $905,535, or $0.09 per share.

 

Liquidity and Capital Resources

 

As of June 30, 2024, we had cash of $24,791. Net cash used in operating activities for the six months ended June 30, 2024 was $125,316. Our current liabilities as of June 30, 2024 were $ 1,573,439 and consisted of accounts payable and accrued liabilities of $1,329,393, current portion of lease liability of $64,330 and advances payable related party of $61,872. As of June 30, 2023, we had cash of $1,947. Net cash used in operating activities for the six months ended June 30, 2023 was $402,440. Our current liabilities as of June 30, 2023 were $758,064 and consisted of accounts payable and accrued liabilities of $647,884, deferred revenue of $9,896, current portion of lease liability of $64,330 and notes payable related party of $35,954.

 

During the six months ended June 30, 2024 the Company borrowed an additional $8,500 from a related party. During the six months ended June 30, 2023 the Company borrowed an additional $469,954 from a related party and repaid $90,000 owed for an inventory earnout.

 

The unaudited condensed consolidated financial statements included in this report have been prepared assuming a continuation of the Company as a going concern. The Company had negative cash flows from operations for the six months ended June 30, 2024 and the year ended December 31, 2023 and had a working capital deficit at June 30, 2024 and December 31, 2023. This raises substantial doubt about our ability to continue as a going concern.

 

We have not generated positive cash flows from operating activities. Our primary source of capital has been from the sale of equity and convertible debt securities. Our primary use of capital has been for professional fees and selling, general and administrative costs. We have no committed sources of capital and will need to raise additional capital to continue and expand our operations. Additional capital may not be available on terms acceptable to us, or at all.

 

In addition, the COVID-19 pandemic may negatively affect our operations, including by limiting access to our facilities, customers, management, and professional advisors, and by causing delays and constraints in manufacturing and shipping of our products. These factors, in turn, may negatively impact our operations, financial condition and demand for our products, and our ability to raise capital on acceptable terms, or at all.

 

Off-Balance Sheet Arrangements

 

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

 

Critical accounting policies and estimates

  

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

Not required for smaller reporting companies.

 

17

 

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Management of the Company conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Based on this evaluation, our management has concluded that the design and operation of our disclosure controls and procedures are not effective since the following material weaknesses exist:

 

  ● Our chief executive officer also functions as our principal financial officer. As a result, our officer may not be able to identify errors and irregularities in the financial statements and reports;

 

  ● We were unable to maintain full segregation of duties within our financial operations due to our reliance on limited personnel in the finance function. While this control deficiency did not result in any audit adjustments to our financial statements, it could have resulted in a material misstatement that might have been prevented or detected by a segregation of duties; and

 

  ● Documentation of all proper accounting procedures is not yet complete.

 

To the extent reasonably possible given our limited resources, we intend to take measures to cure the aforementioned weaknesses, including, but not limited to, increasing the capacity of our qualified financial personnel to ensure that accounting policies and procedures are consistent across the organization and that we have adequate control over financial statement disclosures.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

18

 

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

We are not currently a party to, nor are any of our property currently the subject of, any material legal proceedings. 

 

Item 1A. Risk Factors.

 

Not required for smaller reporting companies. 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures.

 

No disclosure required. 

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits.

 

Exhibit No.   Description
     
31.1   Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1   Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
101   Inline XBRL Document set for the financial statements and accompanying notes in Part I, Item 1, of this Quarterly Report on Form 10-Q
104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

* Filed herewith.

 

** Furnished herewith.

 

19

 

 

SIGNATURES

 

Pursuant to the requirements 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.

 

  BESPOKE EXTRACTS, INC.
     
Dated: October 8, 2024 By: /s/ Michael Feinsod
   

Michael Feinsod

Chief Executive Officer

    (Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer)

 

 

20

 

 

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Exhibit 31.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Michael Feinsod, certify that:

 

1) I have reviewed this Quarterly Report on Form 10-Q of Bespoke Extracts, Inc. (the “registrant”);

 

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 the 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 issuer as of, and for, the periods presented in this report;

 

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

 

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

 

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

 

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

 

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

 

5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b)Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

/s/ Michael Feinsod  
Michael Feinsod  
Chief Executive Officer  
(Principal Executive Officer and Principal Financial Officer)  
   
October 8, 2024  

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report on Form 10-Q of Bespoke Extracts, Inc., as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Feinsod, the Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

 

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

 

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

 

/s/ Michael Feinsod  
Michael Feinsod  
Chief Executive Officer   
(Principal Executive Officer and Principal Financial Officer)  
   
Dated: October 8, 2024  

 

v3.24.3
Cover - shares
 6 Months Ended
Jun. 30, 2024
Oct. 08, 2024
Document Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Transition Report false  
Entity Interactive Data Current Yes  
Amendment Flag false  
Document Period End Date Jun. 30, 2024  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q2  
Entity Information [Line Items]    
Entity Registrant Name BESPOKE EXTRACTS, INC.  
Entity Central Index Key 0001409197  
Entity File Number 000-52759  
Entity Tax Identification Number 20-4743354  
Entity Incorporation, State or Country Code NV  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status Yes  
Entity Shell Company false  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company true  
Entity Ex Transition Period false  
Entity Contact Personnel [Line Items]    
Entity Address, Address Line One 12001 E. 33rd Avenue  
Entity Address, Address Line Two Unit O  
Entity Address, City or Town Aurora  
Entity Address, Country CO  
Entity Address, Postal Zip Code 80010  
Entity Phone Fax Numbers [Line Items]    
City Area Code 720  
Local Phone Number 949-1143  
Entity Listings [Line Items]    
Entity Common Stock, Shares Outstanding   11,123,552
v3.24.3
Consolidated Balance Sheets - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Current assets    
Cash $ 24,791 $ 6,607
Accounts receivable, net 59,185 45,226
Prepaid stock awards 1,057 9,206
Prepaid expense 16,195 5,000
Inventory, net 32,321 15,800
Total current assets 133,549 81,839
Furniture and equipment 36,577 40,979
License 10,000 10,000
Right of Use Asset 175,351 209,542
Deposits 12,000 12,000
Total assets 367,477 354,360
Current liabilities    
Accounts payable and accrued liabilities 1,329,393 961,255
Notes payable - secured (Net of discount of $14,693) 117,844
Operating lease liability 64,330 64,330
Total current liabilities 1,573,439 1,078,957
Note payable - related party 849,500 849,500
Long-Term Operating Lease Liability 116,675 150,460
Total liabilities 2,539,614 2,078,917
Commitments and contingencies (Note 10)
Stockholders’ Deficit    
Preferred stock, value
Common stock, $0.001 par value: 3,000,000,000 authorized; 10,168,552 and 10,168,552 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively 10,166 10,166
Common stock to issue 6,478 shares
Additional paid-in capital 23,759,351 23,631,918
Accumulated deficit (25,941,654) (25,366,641)
Total stockholders’ deficit (2,172,137) (1,724,557)
Total liabilities and stockholders’ deficit 367,477 354,360
Related Party    
Current liabilities    
Advances - related party 61,872 53,372
Series C Convertible Preferred Stock    
Stockholders’ Deficit    
Preferred stock, value
v3.24.3
Consolidated Balance Sheets (Parentheticals) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Notes payable -- secured (Net of discount) (in Dollars) $ 14,693 $ 14,693
Preferred stock, par value (in Dollars per share) $ 0.001 $ 0.001
Preferred Stock, shares authorized 50,000,000 50,000,000
Preferred stock, share issued 1 1
Preferred stock, share outstanding 1 1
Common stock, par value (in Dollars per share) $ 0.001 $ 0.001
Common stock, share authorized 3,000,000,000 3,000,000,000
Common stock, shares issued 10,168,552 10,168,552
Common stock, shares outstanding 10,168,552 10,168,552
Common stock, shares issued 6,478 6,478
Series C Convertible Preferred Stock    
Preferred stock, par value (in Dollars per share) $ 0.001 $ 0.001
Preferred Stock, shares authorized 1 1
Preferred stock, share issued 1 1
Preferred stock, share outstanding 1 1
Preferred stock, share stated value (in Dollars) $ 24,000 $ 24,000
v3.24.3
Consolidated Statements of Operations - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Income Statement [Abstract]        
Sales $ 278,163 $ 188,247 $ 538,591 $ 277,263
Cost of products sold 172,046 117,211 329,893 195,878
Gross Profit 106,117 71,036 208,698 81,385
Operating expenses:        
Selling, general and administrative expenses 325,885 457,366 673,744 831,881
Professional fees 30,475 63,172 88,000 124,376
Consulting 18,000 36,000
Total operating expenses 356,360 538,538 761,744 992,257
Loss from operations (250,243) (467,502) (553,046) (910,872)
Other income / (expenses)        
Interest expense (10,652) 2,587 (21,967) 5,337
Total other (expense) / income (10,652) 2,587 (21,967) 5,337
Loss before income tax (260,895) (464,915) (575,013) (905,535)
Provision for income tax
Net Loss $ (260,895) $ (464,915) $ (575,013) $ (905,535)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING        
Basic (in Shares) 10,168,220 10,168,220 10,168,220 10,107,108
Diluted (in Shares) 10,168,220 10,168,220 10,168,220 10,107,108
NET LOSS PER COMMON SHARE OUTSTANDING        
Basic (in Dollars per share) $ (0.03) $ (0.05) $ (0.06) $ (0.09)
Diluted (in Dollars per share) $ (0.03) $ (0.05) $ (0.06) $ (0.09)
v3.24.3
Consolidated Statement of Stockholders Deficit - USD ($)
Preferred Shares
Common Shares
Additional Paid-in Capital
Accumulated Deficit
Total
Balance at Dec. 31, 2022 $ 9,944 $ 23,201,758 $ (23,883,798) $ (672,096)
Balance (in Shares) at Dec. 31, 2022 1 9,945,997      
Purchase Wonderleaf $ 222 49,778 50,000
Stock option expense   184,776 184,776
Net loss (905,535) (905,535)
Balance at Jun. 30, 2023 $ 10,166 23,436,312 (24,789,333) (1,342,855)
Balance (in Shares) at Jun. 30, 2023 1 9,945,997      
Balance at Mar. 31, 2023 $ 10,166 23,343,968 (24,324,418) (970,284)
Balance (in Shares) at Mar. 31, 2023 1 9,945,997      
Stock option expense   92,344 92,344
Net loss (464,915) (464,915)
Balance at Jun. 30, 2023 $ 10,166 23,436,312 (24,789,333) (1,342,855)
Balance (in Shares) at Jun. 30, 2023 1 9,945,997      
Balance at Dec. 31, 2023 $ 10,166 23,631,918 (25,366,641) (1,724,557)
Balance (in Shares) at Dec. 31, 2023 1 10,168,220      
Warrants issued with financing 20,231 20,231
Stock option expense 107,202 107,202
Net loss (575,013) (575,013)
Balance at Jun. 30, 2024 $ 10,166 23,759,351 (25,941,654) (2,172,137)
Balance (in Shares) at Jun. 30, 2024 1 10,168,220      
Balance at Mar. 31, 2024 $ 10,166 23,697,971 (25,680,759) (1,972,622)
Balance (in Shares) at Mar. 31, 2024 1 10,168,220      
Warrants issued with financing 4,596 4,596
Stock option expense 56,784 56,784
Net loss (260,895) (260,895)
Balance at Jun. 30, 2024 $ 10,166 $ 23,759,351 $ (25,941,654) $ (2,172,137)
Balance (in Shares) at Jun. 30, 2024 1 10,168,220      
v3.24.3
Consolidated Statements of Cash Flows - USD ($)
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Cash flows from operating activities    
Net Loss $ (575,013) $ (905,535)
Adjustments to reconcile net loss to net cash used in operating activities    
Inventory reserve 40,393
Depreciation 4,402 4,566
Amortization of right of use asset, net 34,191 32,858
Amortization expense for prepaid expenses for consulting shares 8,149 43,328
Amortization of debt discount 3,075
Stock based compensation and stock option expense 107,202 184,776
Changes in operating assets and liabilities:    
Accounts receivable (13,959) (9,856)
Prepaid expenses (11,195) (7,259)
Inventory (16,521) (82,757)
Accounts payable and accrued liabilities 368,138 319,612
Deferred revenue 9,896
Operating lease liability, net (33,785) (32,462)
Net Cash (used in) operating activities (125,316) (402,440)
Cash flow from financing activities    
Payment of inventory earnout   (90,000)
Proceeds from issuance of note payable - related party 469,954
Proceeds from Advances - related party 8,500
Proceeds from secured notes payable 135,000
Net cash provided by financing activities 143,500 379,954
Net increase / (decrease) in cash 18,184 (22,486)
Cash at beginning of period 6,607 24,433
Cash at end of period 24,791 1,947
Supplemental disclosure of cash flow information    
Cash paid for interest
Cash paid for income taxes
Noncash investing and financing activities:    
Stock issued to Wonderleaf for fixed assets and license $ 50,000
v3.24.3
Nature of Operations, Significant Accounting Policies and Going Concern
 6 Months Ended
Jun. 30, 2024
Nature of Operations, Significant Accounting Policies and Going Concern [Abstract]  
NATURE OF OPERATIONS, SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN

1. NATURE OF OPERATIONS, SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN

 

Nature of Business Operations 

 

Bespoke Extracts, Inc. (the “Company”) is a Nevada corporation focused on operating in the regulated cannabis markets in the United States. Through Bespoke Extracts Colorado, LLC (“Bespoke Colorado”), we operate a marijuana infused products production facility in Aurora, Colorado.

  

On December 2, 2021, Bespoke Colorado, a newly formed wholly-owned subsidiary of the Company entered into an asset purchase agreement with WonderLeaf, LLC (“WonderLeaf”), and on December 7, 2021, Bespoke Colorado and WonderLeaf entered into an amendment to such asset purchase agreement (as amended, the “WonderLeaf Purchase Agreement”). On January 3, 2023, the Company completed the acquisition of the WonderLeaf assets and the change of control was approved by the Colorado Marijuana Enforcement Division for 222,223 shares of common stock valued at $50,000, or $0.225 per share. At the time of acquisition Wonderleaf had no operations, no employees and was not considered a business.  

 

Principles of Consolidation

 

The accompanying condensed consolidated unaudited financial statements include the accounts of Bespoke Extracts, Inc., and its wholly owned subsidiary Bespoke Extracts Colorado, LLC. All inter-company balances have been eliminated.

 

Going Concern

 

The accompanying consolidated financial statements have been prepared assuming a continuation of the Company as a going concern. The Company had negative cash flows from operations of $125,316 for the six months ended June 30, 2024, and a working capital deficit of $1,439,890 and accumulated deficit of $25,941,654, as of June 30, 2024. This raises substantial doubt about our ability to continue as a going concern for a period of one year from the date of these financial statements.

  

The Company’s ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. There is no assurance that this series of events will be satisfactorily completed.

 

Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail or cease our operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. These financial statements do not include any adjustments that might arise from this uncertainty.

  

Use of Estimates

 

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and accompanying notes. Significant estimates include the assumption used in the valuation of equity-based transactions, valuation of intangible assets, allowance for provision for credit losses and inventory valuation and reserves. Actual results could differ from those estimates. 

 

Cash and Cash Equivalents

 

Cash and cash equivalents include all highly liquid investments with original maturities of three months or less at the time of purchase. At June 30, 2024 and December 31, 2023, the Company did not have any cash equivalents. The Company did not have any cash in excess of FDIC limits of $250,000 at any single bank.

 

Fair Value of Financial Instruments

 

The carrying amounts of cash, accounts receivable, inventory, fixed assets, licenses, and other assets, accounts payable, accrued liabilities, and notes payable approximate their fair values as of June 30, 2024 and December 31, 2023, respectively, because of their short-term natures and the Company’s borrowing rate of interest.

 

Accounts Receivable

 

Accounts receivable are recorded at fair value on the date revenue is recognized. The Company provides allowances for provision for credit losses for estimated losses resulting from the inability of its customers to repay their obligation. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to repay, additional allowances may be required. The Company provides for potential uncollectible accounts receivable based on specific customer identification and historical collection experience adjusted for existing market conditions. If market conditions decline, actual collection experience may not meet expectations and may result in decreased cash flows and increased provision for credit losses.

 

The policy for determining past due status is based on the contractual payment terms of each customer, which are generally net 14 or net 30 days. Once collection efforts by the Company are exhausted, the determination for charging off uncollectible receivables is made. At June 30, 2024 and December 31, 2023, the Company has recorded an allowance for provision for credit losses of $0 and $0, respectively.

 

Inventory, net

 

Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out basis and net realizable value. Net realizable value is defined as sales price less cost of completion, disposition and transportation and a normal profit margin. As of June 30, 2024 and December 31, 2023, inventory amounted to $32,321, and $15,800 net of reserves, respectively, which consisted of finished goods of $0 and $0.

 

Property and equipment

 

Property and equipment is recorded at cost and capitalized from the initial date of service. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated useful lives for significant property and equipment categories are as follows:

 

Schedule of Estimated useful Lives of Property and Equipment

 

Furniture and Equipment     5 years  

 

License

 

License represents the Colorado license for distributing cannabis.

 

Revenue Recognition

 

We account for revenue in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 606, “Revenue from Contracts with Customers”. Revenue is measured based on the amount of consideration that we expect to receive, reduced by discounts and estimates for credits and returns (calculated based upon previous experience and management’s evaluation). Outbound shipping charged to customers is recognized at the time the related merchandise revenues are recognized and are included in net revenues. Inbound and outbound shipping and delivery costs are included in cost of revenues.

 

Our products are sold directly to licensed marijuana dispensaries in Colorado. Revenue is recognized when control of the merchandise is transferred to the customer, which generally occurs upon shipment. Payment is typically due on the date of shipment or within 14 to 30 days.

 

As of June 30, 2024 two customers accounted for approximately 16.3% and 9.5% of accounts receivable.

 

As of December 31, 2023, two customers amounted to 19.4% and 14.9% of accounts receivable.

 

Stock Based Compensation

 

Stock options and warrants issued to consultants and other non-employees as compensation for services provided to the Company are accounted for based on the fair value of the services provided or the estimated fair market value of the option or warrant, whichever is more reliably measurable, and in accordance with FASB ASC 718, Compensation-Stock Compensation, including related amendments and interpretations.

 

Net Income / (Loss) per Share

 

Basic income / (loss) per share amounts are computed based on net income / (loss) divided by the weighted average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that could occur if potentially dilutive securities were exercised or converted to common stock. The dilutive effect of options and warrants and their equivalent is computed by application of the treasury stock method and the effect of convertible securities by the “if converted” method. The effect of 164,876 warrants and 1,565,341 options is anti-dilutive for the Six months ended June 30, 2024 as they are not in the money.

 

Recent accounting pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date.

 

The Company did not adopt any new accounting pronouncements in the reporting period ended June 30, 2024.

 

Income Taxes

 

We utilize the asset and liability method of accounting for income taxes. We recognize deferred tax liabilities or assets for the expected future tax consequences of temporary differences between the book and tax basis of assets and liabilities. We regularly assess the likelihood that our deferred tax assets will be recovered from future taxable income. We consider projected future taxable income and ongoing tax planning strategies in assessing the amount of the valuation allowance necessary to offset our deferred tax assets that will not be recoverable. We have recorded and continue to carry a full valuation allowance against our gross deferred tax assets that will not reverse against deferred tax liabilities within the scheduled reversal period. If we determine in the future that it is more likely than not that we will realize all or a portion of our deferred tax assets, we will adjust our valuation allowance in the period we make the determination. We expect to provide a full valuation allowance on our future tax benefits until we can sustain a level of profitability that demonstrates our ability to realize these assets.
v3.24.3
Asset Purchase Agreement
 6 Months Ended
Jun. 30, 2024
Asset Purchase Agreement [Abstract]  
ASSET PURCHASE AGREEMENT

2. ASSET PURCHASE AGREEMENT

 

On January 3, 2023, the Company completed the acquisition of the WonderLeaf assets for 222,223 shares of common stock valued at $50,000, or $0.225 per share. At the time of acquisition WonderLeaf had no operations or no employees and was not considered a business. 

 

Pursuant to ASU 2017-01 and ASC 805, the Company analyzed the business of WonderLeaf to determine if the Company acquired a business or acquired assets. Based on this analysis, the Company determined that it acquired assets. No goodwill was recorded since the purchase was accounted for as an asset purchase. In accordance with ASC 805, the fair value of the assets acquired is based on either the fair value of the consideration given or the fair value of the assets acquired, whichever is more clearly evident, and thus, more reliably measurable. The Company used the market price of the 222,223 common shares issued of $50,000 as the fair value of the assets acquired since this value was more clearly evident, and thus, more reliably measurable than the fair value of the license and fixed assets acquired.

 

Company management determined if the Company acquired a business or acquired assets. The FASB issued new guidance (ASU 2017-01) that changed the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606. Under the new guidance, an entity first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set is not a business. If it’s not met, the entity then evaluates whether the set meets the requirement that a business include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. Under the ASU, a set is not a business when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets.

 

Pursuant to 805-10-55-83, the Company first considered the guidance in paragraphs 805-10-55-5A through 55-5C. The identifiable assets that could be recognized in the purchase only included the license and fixed assets. Accordingly, the transaction was not considered a business.

 

The monetary value of the 222,223 shares is deemed by the Company to be $50,000 in accordance with Accounting Standards Codification (“ASC”) 805-50-30 “Business Combinations”, the Company determined that if the consideration paid is not in the form of cash, the measurement may be based on either (i) the cost which is measured based on the fair value of the consideration given or (ii) the fair value of the assets (or net assets) acquired, whichever is more clearly evident and thus more reliably measurable. No goodwill should be recorded since the WPA was accounting for as an asset purchase. The Company determined that the fair value of the common shares issued was a better indicator which is more reliably measurable.

 

The Company assigned a value of $10,000 to the licenses and $40,000 to the fixed assets acquired.
v3.24.3
Furniture and Equipment.
 6 Months Ended
Jun. 30, 2024
Furniture and Equipment. [Abstract]  
FURNITURE AND EQUIPMENT.

3. FURNITURE AND EQUIPMENT.

 

Machinery and equipment consisted of the following at:

 

Schedule of Machinery and Equipment

 

   June 30,
2024		   December 31,
2023		 
Furniture and equipment  $2,745   $2,745 
Machinery and Equipment   47,202    47,202 
Fixed assets, total   49,947    49,947 
Total: accumulated depreciation   (13,370)   (8,968)
Fixed assets, net  $36,577   $40,979 

 

Depreciation expense for the three and six months ended June 30, 2024 and 2023 were $1,952, $4,402, $2,781 and $4,566 respectively.
v3.24.3
Note Payable – Related Party
 6 Months Ended
Jun. 30, 2024
Note Payable – Related Party [Abstract]  
NOTE PAYABLE – RELATED PARTY

4. NOTE PAYABLE – RELATED PARTY

 

During the year ended December 31, 2023, Infinity Management, LLC an affiliate of Michael Feinsod, the Company’s chief executive officer, loaned the Company an additional $469,954. On September 5, 2023 $849,500 of notes payable were converted into a 5.0% interest bearing note due June 30, 2025 (the “Infinity Note”). In addition, repayment of the Infinity Note will be due out of the proceeds of a new debt or equity capital raise with net proceeds of more than $2,000,000. As of June 30, 2024 and December 31, 2023 the amount owed Infinity Management, LLC is $911,372 and $902,872, respectively.

 

During the year ended December 31, 2023 the Company received additional advances from Infinity Management, LLC of $53,372. During the six months ended June 30, 2024 the Company received additional advances from Infinity Management, LLC of $8,500.
v3.24.3
Note Payable – Secured
 6 Months Ended
Jun. 30, 2024
Note Payable – Secured [Abstract]  
NOTE PAYABLE – SECURED

5. NOTE PAYABLE – SECURED

 

On February 16, 2024, the Company entered into and closed securities purchase agreements with investors pursuant to which the Company issued and sold to the investors an aggregate of $100,000 in 15% Senior Secured Notes due February 15, 2025 (the “Notes”), and warrants to purchase an aggregate of 100,000 shares of common stock, for an aggregate purchase price of $100,000. The Notes are senior in terms of priority and liquidation to all other existing debt obligations of the Company. The warrants have a term of two years and an exercise price of $0.11. The options were valued at $15,636 using a Black-Scholes pricing model with the following assumptions: dividend yield of 0%, annual volatility of 583%, risk free interest rate of 4.64%, an expected life of 1 years. The Company utilized the Relative Fair Value to allocate the value of the warrants and recorded it as debt discount.

 

On May 20, 2024 the Company entered into and closed securities purchase agreements with investors pursuant to which the Company issued and sold to the investors an aggregate of $10,000 in 15% Senior Secured Notes due May 20, 2025 and warrants to purchase an aggregate of 10,000 shares of common stock, for an aggregate purchase price of $10,000. The Notes are senior in terms of priority and liquidation to all other existing debt obligations of the Company. The warrants have a term of two years and an exercise price of $0.11. The options were valued at $15,636 using a Black-Scholes pricing model with the following assumptions: dividend yield of 0%, annual volatility of 608%, risk free interest rate of 5.42%, an expected life of 1 years. The Company utilized the Relative Fair Value to allocate the value of the warrants and recorded it as debt discount.

 

On June 6, 2024 the Company entered into and closed securities purchase agreements with investors pursuant to which the Company issued and sold to the investors an aggregate of $25,000 in 15% Senior Secured Notes due June 6, 2025 and warrants to purchase an aggregate of 25,000 shares of common stock, for an aggregate purchase price of $25,000. The Notes are senior in terms of priority and liquidation to all other existing debt obligations of the Company. The warrants have a term of two years and an exercise price of $0.11. The options were valued at $15,636 using a Black-Scholes pricing model with the following assumptions: dividend yield of 0%, annual volatility of 614%, risk free interest rate of 4.72%, an expected life of 1 years. The Company utilized the Relative Fair Value to allocate the value of the warrants and recorded it as debt discount.

 

   June 30,
2024		 
Note amount  $135,000 
Debt discount   (20,231)
Amortization of debt discount   3,075 
Notes payable, net  $117,844 
v3.24.3
Leases
 6 Months Ended
Jun. 30, 2024
Leases [Abstract]  
LEASES

6. LEASES

 

In connection with the WonderLeaf Purchase Agreement, Bespoke Colorado entered into a lease agreement (the “Lease”) with WL Holdings, Ltd. (“WL Holdings”) in December 2021. Pursuant to the Lease, Bespoke Colorado will lease from WL Holdings certain commercial space in Aurora, Colorado, where WonderLeaf’s business has been located, commencing upon signing of the Lease and Wonderleaf Purchase Agreement, for a term of five years, which Bespoke Colorado will have an option to renew for an additional five years. Monthly rent under the Lease will start at $6,000. The Lease grants the Company an option to purchase the property for $600,000. The Company has not decided whether it will exercise either option.

 

Supplemental balance sheet information related to leases was as follows:

 

      June 30, 
Operating Leases  Classification  2024 
Right-of-use assets  Right of use assets  $175,351 
         
Current lease liabilities  Current operating lease liabilities   64,330 
Non-current lease liabilities  Long-term operating lease liabilities   116,675 
Total lease liabilities     $245,335 

 

Lease term and discount rate were as follows:

 

   June 30, 
   2024 
Weighted average remaining lease term (years)   3.44 
Weighted average discount rate   4%

 

The component of lease costs was as follows:

 

   June 30, 
   2024 
Operating lease cost  $38,196 
Variable lease cost (1)   2,100 
Total lease costs  $40,296 

 

(1) Variable lease cost primarily relates to common area maintenance, property taxes and insurance on leased real estate.

 

   June 30, 
   2024 
Cash paid for operating lease liabilities  $
       -
 
      

 

Maturities of lease liabilities were as follows as of December 31, 2023:

 

   Operating 
   Leases 
2024  $59,107 
2025   79,380 
2026   72,765 
Total undiscounted lease payments   211,252 
Less: Present value discount   (13,270)
Total Present value of lease liabilities  $197,982 
v3.24.3
Equity
 6 Months Ended
Jun. 30, 2024
Equity [Abstract]  
EQUITY

7. EQUITY

 

Common Stock and Preferred Stock

 

On December 5, 2022 the Company approved an amendment to its articles of incorporation to effect a 45-to-1 reverse split of our common stock effective January 13, 2023. All prior amounts equity amounts have been presented to reflect this reverse split.

 

As of June 30, 2024 and 2023, the Company’s authorized capital stock consists of 3,000,000,000 shares of common stock, par value $0.001, and 50,000,000 shares of preferred stock, par value $0.001. 1,000 shares of preferred stock are designated as Series A Convertible Preferred Stock. No shares of Series A Preferred Stock are issued and outstanding as of June 30, 2024 and 2023, respectively. The Company’s Certificate of Designation of Series B Preferred Stock was withdrawn by the Company on September 30, 2020. 1 share of preferred stock is designated Series C Preferred Stock and is issued and outstanding as of June 30, 2024 and 2023, respectively. The Series C Preferred Stock has a stated value of $24,000 and entitles the holder to 51% of the total voting power of the Company’s stockholders. The Company may, in its sole discretion, redeem the Series C Preferred Stock at any time for a redemption price equal to the stated value. Upon payment of the redemption price by the Company, the Series C Preferred Stock will revert to the status of authorized but unissued preferred stock.  

 

On January 3, 2023, the Company completed the acquisition of the WonderLeaf assets for 222,223 shares of common stock valued at $50,000, or $0.225 per share.

 

On December 14, 2021, the board of directors of the Company adopted the Company’s 2021 Equity Incentive Plan (the “2021 Plan”), pursuant to which up to an aggregate of 6,666,667 shares of common stock are available for issuance. Awards under the plan may include options (including incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, performance share awards, or other equity-based awards, each as defined under the 2021 Plan. Options awarded under the 2021 Plan are to have an exercise price of not less than 100% of the fair market value of the common stock on the grant date and a term of not more than ten years from the option grant date.

 

Effective August 1, 2022, the Company issued an aggregate of 266,667 shares of common stock to employees and consultants for services, including 155,556 shares that vest immediately, 55,556 shares that vested one year from the grant date, and 55,556 shares that will vest two years from the grant date. During the year ended December 31, 2022 the Company recorded an expense $1,104,928. For the year ended December 31, 2023 the Company recorded an expense of $70,907, respectively. For the six months ended Junne 30, 2024 the Company recorded and expense of $8,419. As of June 30, 2024 and December 31, 2023 the Company had a prepaid stock award of $1,057 and $9,206.

 

Warrants

 

On February 16, 2024, the Company entered into and closed securities purchase agreements with investors pursuant to which the Company issued and sold to the investors an aggregate of $100,000 in 15% Senior Secured Notes due February 15, 2025 (the “Notes”), and warrants to purchase an aggregate of 100,000 shares of common stock, for an aggregate purchase price of $100,000. The Notes are senior in terms of priority and liquidation to all other existing debt obligations of the Company. The warrants have a term of two years and an exercise price of $0.11.

 

The following table summarizes the warrant activities during the six months ended June 30, 2024:

 

   Number of
Warrants		   Weighted-
Average
Exercise
Price Per
Share		   Weighted-
Average
Remaining
Life		 
Outstanding at December 31, 2023   29,876    25.24    1.21 
Granted   135,000    0.15    1.44 
Canceled or expired   
-
    
-
    
-
 
Outstanding at June 30, 2024   164,876   $0.43    4.46 years 
Exercisable at June 30, 2024   164,876   $0.43    4.46 years 
Intrinsic value at June 30, 2024       $
-
      

 

Options

 

On December 14, 2021, the Company entered into an employment agreement with Hunter Garth, wherein the Company granted to Mr. Garth, pursuant to the Company’s 2021 Equity Incentive Plan, ten-year options to purchase 333,333 shares of common stock at an exercise price of $2.70 (representing a 120% premium over the closing price of the common stock on December 13, 2021). One-third of the options will vest on each yearly anniversary of the date of grant. The options were valued at $450,000 using a Black-Scholes pricing model. During the three and six months ending June 30, 2024 and 2023 the Company recorded $12,318, $24,636, $30,811 and $61,622 respectively of expenses associated with the vesting of these stock options. (See notes 10 and 11).

 

On December 14, 2021, the Company entered into an employment agreement with Michael Feinsod, wherein the Company granted to Mr. Feinsod, pursuant to the Company’s 2021 Equity Incentive Plan, ten-year options to purchase 666,667 shares of common stock at an exercise price of $2.70 (representing a 120% premium over the closing price of the common stock on December 13, 2021). One-third of the options will vest on each yearly anniversary of the date of grant. The options were valued at $900,000 using a Black-Scholes pricing model During the three and six months ended June 30, 2023 and 2022 the Company recorded $24,635, $49,270, $61,261 and $122,522, respectively of expenses associated with the vesting of these stock options. (See notes 10 and 11).

 

On August 17, 2023, the Company issued to several employees options to purchase a total of 222,500 shares of common stock at an exercise price of $0.20. The options vest over a period of 12 months and have a term of 5 years. The options were valued at $44,306 using a Black-Scholes pricing model. During the three and six months ended June 30, 2024 the Company recorded $10,822 and $21,643, respectively of expenses associated with the vesting of these stock options

 

On January 8, 2024, the Company issued to an employee options to purchase a total of 222,500 shares of common stock at an exercise price of $0.20. The options vest 50% on January 15, 2024 and 50% over a period of 12 months and have a term of 10 years. The options were valued at $8,030 using a Black-Scholes pricing model. During the three and six months ended June 30, 2024 the Company recorded $1,115 and $6,489, respectively of expenses associated with the vesting of these stock options

  

On March 1, 2024, the Company issued to several employees options to purchase a total of 99,000 shares of common stock at an exercise price of $0.22. The options vest over a period of 12 months and have a term of 5 years. The options were valued at $44,306 using a Black-Scholes pricing model. During the three and six months ended June 30, 2024 the Company recorded $4,662 and $6,308 of expenses associated with the vesting of these stock options

 

The following table summarizes the option activities during the six months ended June 30, 2024:

 

   Number of
Options		   Weighted-
Average Exercise
Price Per
Share		   Weighted-
Average
Remaining
Life
Outstanding at December 31, 2023   1,246,341   $2.67   7.94 years
Granted   324,000   $0.22   4.67 years
Canceled or expired   (5,000)   0.22    
Exercised   
-
    
-
    
Outstanding at June 30, 2024   1,565,341   $1.81   6.41 years
Exercisable at June 30, 2024   690,508   $2.19   7.45 years
Intrinsic value at June 30, 2024       $
-
    

 

The future expense as of June 30, 2024 is $93,106.
v3.24.3
Related Party Transactions
 6 Months Ended
Jun. 30, 2024
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

8. RELATED PARTY TRANSACTIONS

  

On December 14, 2021, the Company entered into an employment agreement with Hunter Garth. Pursuant to the employment agreement, Mr. Garth will serve as the Company’s president and will receive a base monthly salary of $8,000. The Company also granted to Mr. Garth, pursuant to the Company’s 2021 Equity Incentive Plan, 500,000 shares of restricted common stock, which vested one year from the date of grant, and ten-year options to purchase 333,333 shares of common stock at an exercise price of $2.70 (representing a 120% premium over the closing price of the common stock on December 13, 2021). One-third of the options will vest on each yearly anniversary of the date of grant. In the event that Mr. Garth is terminated without cause or resigns with good reason (each as defined in the employment agreement), he will be entitled to his monthly base salary for twelve months following such termination.

  

On December 14, 2021, the Company entered into an employment agreement with Michael Feinsod, the Company’s chief executive officer and chairman. Pursuant to the employment agreement, Mr. Feinsod will continue to serve as the Company’s chief executive officer and chairman and will receive a base monthly salary of $10,000. The Company also granted to Mr. Feinsod, pursuant to the Company’s 2021 Equity Incentive Plan, 1,000,000 shares of restricted common stock, which vested one year from the date of grant, and ten-year options to purchase 666,667 shares of common stock at an exercise price of $2.70 (representing a 120% premium over the closing price of the common stock on December 13, 2021). One-third of the options will vest on each yearly anniversary of the date of grant. In the event that Mr. Feinsod is terminated without cause or resigns with good reason (each as defined in the employment agreement), he will be entitled to his monthly base salary for twelve months following such termination.

 

During the year ended December 31, 2023 the Company received additional advances from Infinity Management, LLC. of $53,372. During the six months ended June 30, 2024 the Company received additional advances from Infinity Management, LLC. of $8,500.

 

On September 5, 2023 $849,500 of notes payable were converted into a 5% interest bearing note due June 30, 2025. The note contains provisions whereby it is intended to be subordinate to any senior secured debt the Company may incur while it is outstanding. In addition, repayment of the note will be due in full out of the proceeds of a new debtor equity capital raise with net proceeds of more than $2,000,000. (See Note 4.)

 

As of June 30, 2024 Michael Feinsod is owed a total of $266,772 of accrued salary and accounts payable of $171,553.
v3.24.3
Commitments and Contingencies
 6 Months Ended
Jun. 30, 2024
Commitments and Contingencies [Abstract]  
COMMITMENTS AND CONTINGENCIES

9. COMMITMENTS AND CONTINGENCIES

 

In connection with a stock purchase agreement, on October 28, 2021, a convertible debenture with an original issue date of December 24, 2019, as amended by Amendment No. 1 thereto, dated May 28, 2020, Amendment No. 2 thereto, dated August 21, 2020, Amendment No. 3 thereto, dated December 10, 2020, Amendment No. 4 thereto, dated January 15, 2021, Amendment No. 5 thereto, dated April 2, 2021, and Amendment No. 6 thereto, dated August 2, 2021 (as amended, the “Debenture”) with an original principal amount of approximately $400,000 was terminated, and all amounts due and payable thereunder forgiven pursuant to a cancellation and satisfaction of debenture agreement entered into between the Company and the Debenture holder (the “Debt Cancellation Agreement”). In exchange for cancellation of the debt owed under the Debenture, the Company transferred to the holder certain domain names and agreed to pay the holder, beginning December 1, 2021, and on a monthly basis through August 31, 2022, 40% of the operating profit generated from sale of the existing CBD inventory of the Company (the “Inventory Earn Out”), and on August 31, 2022, to make a final payment equal to an amount of $75,000 minus the total of the monthly payments made under the Inventory Earn Out. The inventory earn-out agreement was amended on November 11, 2022 (see Note 3) such that the final payment under the inventory earn out was increased to $90,000 (less any payments previously made) and was due February 28, 2023. During the year ended December 31, 2023 the amount was paid.

 

On December 14, 2021, the Company entered into an employment agreement with Hunter Garth. Pursuant to the employment agreement, Mr. Garth will serve as the Company’s president and will receive a base monthly salary of $8,000. The Company also granted to Mr. Garth, pursuant to the Company’s 2021 Equity Incentive Plan, 500,000 shares of restricted common stock, which vested one year from the date of grant, and ten-year options to purchase 333,333 shares of common stock at an exercise price of $2.70 (representing a 120% premium over the closing price of the common stock on December 13, 2021). One-third of the options will vest on each yearly anniversary of the date of grant. In the event that Mr. Garth is terminated without cause or resigns with good reason (each as defined in the employment agreement), he will be entitled to his monthly base salary for twelve months following such termination.

 

On December 14, 2021, the Company entered into an employment agreement with Michael Feinsod, the Company’s chief executive officer and chairman. Pursuant to the employment agreement, Mr. Feinsod will continue to serve as the Company’s chief executive officer and chairman and will receive a base monthly salary of $10,000. The Company also granted to Mr. Feinsod, pursuant to the Company’s 2021 Equity Incentive Plan, 1,000,000 shares of restricted common stock, which vested one year from the date of grant, and ten-year options to purchase 666,667 shares of common stock at an exercise price of $0.06 (representing a 120% premium over the closing price of the common stock on December 13, 2021). One-third of the options will vest on each yearly anniversary of the date of grant. In the event that Mr. Feinsod is terminated without cause or resigns with good reason (each as defined in the employment agreement), he will be entitled to his monthly base salary for twelve months following such termination.

 

On August 11, 2022, the Company and Bespoke Colorado entered into an asset purchase agreement with Osiris, LLC doing business as Best Day Ever (“BDE”) and Michael Gurtman. Pursuant to the purchase agreement, Bespoke Colorado agreed to purchase from BDE, and BDE agreed to sell to Bespoke Colorado, the assets of BDE, including certain licenses. The Company also agreed to assume certain leases, all as further set forth in the purchase agreement. As consideration for the acquisition of the assets, the Company agreed to issue 2,777,778 shares of common stock at the closing of the transaction. Closing of the purchase agreement was subject to receipt of certain governmental approvals and other customary closing conditions. The purchase agreement was terminated on November 18, 2022.
v3.24.3
Subsequent Events
 6 Months Ended
Jun. 30, 2024
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

10. SUBSEQUENT EVENTS

 

On August 14, 2024, the Company granted to employees and consultants, pursuant to the Company’s 2021 Equity Incentive Plan, an aggregate of 1,030,000 shares of restricted common stock.
v3.24.3
Pay vs Performance Disclosure - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Pay vs Performance Disclosure        
Net Income (Loss) $ (260,895) $ (464,915) $ (575,013) $ (905,535)
v3.24.3
Insider Trading Arrangements
 3 Months Ended
Jun. 30, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.3
Accounting Policies, by Policy (Policies)
 6 Months Ended
Jun. 30, 2024
Nature of Operations, Significant Accounting Policies and Going Concern [Abstract]  
Nature of Business Operations

Nature of Business Operations 

Bespoke Extracts, Inc. (the “Company”) is a Nevada corporation focused on operating in the regulated cannabis markets in the United States. Through Bespoke Extracts Colorado, LLC (“Bespoke Colorado”), we operate a marijuana infused products production facility in Aurora, Colorado.

On December 2, 2021, Bespoke Colorado, a newly formed wholly-owned subsidiary of the Company entered into an asset purchase agreement with WonderLeaf, LLC (“WonderLeaf”), and on December 7, 2021, Bespoke Colorado and WonderLeaf entered into an amendment to such asset purchase agreement (as amended, the “WonderLeaf Purchase Agreement”). On January 3, 2023, the Company completed the acquisition of the WonderLeaf assets and the change of control was approved by the Colorado Marijuana Enforcement Division for 222,223 shares of common stock valued at $50,000, or $0.225 per share. At the time of acquisition Wonderleaf had no operations, no employees and was not considered a business.  
Principles of Consolidation

Principles of Consolidation

The accompanying condensed consolidated unaudited financial statements include the accounts of Bespoke Extracts, Inc., and its wholly owned subsidiary Bespoke Extracts Colorado, LLC. All inter-company balances have been eliminated.
Going Concern

Going Concern

The accompanying consolidated financial statements have been prepared assuming a continuation of the Company as a going concern. The Company had negative cash flows from operations of $125,316 for the six months ended June 30, 2024, and a working capital deficit of $1,439,890 and accumulated deficit of $25,941,654, as of June 30, 2024. This raises substantial doubt about our ability to continue as a going concern for a period of one year from the date of these financial statements.

The Company’s ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. There is no assurance that this series of events will be satisfactorily completed.

Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail or cease our operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. These financial statements do not include any adjustments that might arise from this uncertainty.
Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and accompanying notes. Significant estimates include the assumption used in the valuation of equity-based transactions, valuation of intangible assets, allowance for provision for credit losses and inventory valuation and reserves. Actual results could differ from those estimates. 
Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with original maturities of three months or less at the time of purchase. At June 30, 2024 and December 31, 2023, the Company did not have any cash equivalents. The Company did not have any cash in excess of FDIC limits of $250,000 at any single bank.
Fair Value of Financial Instruments

Fair Value of Financial Instruments

The carrying amounts of cash, accounts receivable, inventory, fixed assets, licenses, and other assets, accounts payable, accrued liabilities, and notes payable approximate their fair values as of June 30, 2024 and December 31, 2023, respectively, because of their short-term natures and the Company’s borrowing rate of interest.

 
Accounts Receivable

Accounts Receivable

Accounts receivable are recorded at fair value on the date revenue is recognized. The Company provides allowances for provision for credit losses for estimated losses resulting from the inability of its customers to repay their obligation. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to repay, additional allowances may be required. The Company provides for potential uncollectible accounts receivable based on specific customer identification and historical collection experience adjusted for existing market conditions. If market conditions decline, actual collection experience may not meet expectations and may result in decreased cash flows and increased provision for credit losses.

The policy for determining past due status is based on the contractual payment terms of each customer, which are generally net 14 or net 30 days. Once collection efforts by the Company are exhausted, the determination for charging off uncollectible receivables is made. At June 30, 2024 and December 31, 2023, the Company has recorded an allowance for provision for credit losses of $0 and $0, respectively.
Inventory, net

Inventory, net

Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out basis and net realizable value. Net realizable value is defined as sales price less cost of completion, disposition and transportation and a normal profit margin. As of June 30, 2024 and December 31, 2023, inventory amounted to $32,321, and $15,800 net of reserves, respectively, which consisted of finished goods of $0 and $0.
Property and equipment

Property and equipment

Property and equipment is recorded at cost and capitalized from the initial date of service. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated useful lives for significant property and equipment categories are as follows:

Schedule of Estimated useful Lives of Property and Equipment

Furniture and Equipment     5 years  
License

License

License represents the Colorado license for distributing cannabis.
Revenue Recognition

Revenue Recognition

We account for revenue in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 606, “Revenue from Contracts with Customers”. Revenue is measured based on the amount of consideration that we expect to receive, reduced by discounts and estimates for credits and returns (calculated based upon previous experience and management’s evaluation). Outbound shipping charged to customers is recognized at the time the related merchandise revenues are recognized and are included in net revenues. Inbound and outbound shipping and delivery costs are included in cost of revenues.

Our products are sold directly to licensed marijuana dispensaries in Colorado. Revenue is recognized when control of the merchandise is transferred to the customer, which generally occurs upon shipment. Payment is typically due on the date of shipment or within 14 to 30 days.

As of June 30, 2024 two customers accounted for approximately 16.3% and 9.5% of accounts receivable.

As of December 31, 2023, two customers amounted to 19.4% and 14.9% of accounts receivable.

 
Stock Based Compensation

Stock Based Compensation

Stock options and warrants issued to consultants and other non-employees as compensation for services provided to the Company are accounted for based on the fair value of the services provided or the estimated fair market value of the option or warrant, whichever is more reliably measurable, and in accordance with FASB ASC 718, Compensation-Stock Compensation, including related amendments and interpretations.
Net Income / (Loss) per Share

Net Income / (Loss) per Share

Basic income / (loss) per share amounts are computed based on net income / (loss) divided by the weighted average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that could occur if potentially dilutive securities were exercised or converted to common stock. The dilutive effect of options and warrants and their equivalent is computed by application of the treasury stock method and the effect of convertible securities by the “if converted” method. The effect of 164,876 warrants and 1,565,341 options is anti-dilutive for the Six months ended June 30, 2024 as they are not in the money.
Recent accounting pronouncements

Recent accounting pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date.

The Company did not adopt any new accounting pronouncements in the reporting period ended June 30, 2024.
Income Taxes

Income Taxes

We utilize the asset and liability method of accounting for income taxes. We recognize deferred tax liabilities or assets for the expected future tax consequences of temporary differences between the book and tax basis of assets and liabilities. We regularly assess the likelihood that our deferred tax assets will be recovered from future taxable income. We consider projected future taxable income and ongoing tax planning strategies in assessing the amount of the valuation allowance necessary to offset our deferred tax assets that will not be recoverable. We have recorded and continue to carry a full valuation allowance against our gross deferred tax assets that will not reverse against deferred tax liabilities within the scheduled reversal period. If we determine in the future that it is more likely than not that we will realize all or a portion of our deferred tax assets, we will adjust our valuation allowance in the period we make the determination. We expect to provide a full valuation allowance on our future tax benefits until we can sustain a level of profitability that demonstrates our ability to realize these assets.
v3.24.3
Nature of Operations, Significant Accounting Policies and Going Concern (Tables)
 6 Months Ended
Jun. 30, 2024
Nature of Operations, Significant Accounting Policies and Going Concern [Abstract]  
Schedule of Estimated Useful Lives of Property and Equipment The estimated useful lives for significant property and equipment categories are as follows:
Furniture and Equipment     5 years  
v3.24.3
Furniture and Equipment. (Tables)
 6 Months Ended
Jun. 30, 2024
Furniture and Equipment. [Abstract]  
Schedule of Machinery and Equipment Schedule of Machinery and Equipment
   June 30,
2024		   December 31,
2023		 
Furniture and equipment  $2,745   $2,745 
Machinery and Equipment   47,202    47,202 
Fixed assets, total   49,947    49,947 
Total: accumulated depreciation   (13,370)   (8,968)
Fixed assets, net  $36,577   $40,979 
v3.24.3
Note Payable – Secured (Tables)
 6 Months Ended
Jun. 30, 2024
Note Payable – Secured [Abstract]  
Schedule of Relative Fair Value to Allocate the Value of Warrants and Debt Discount The Company utilized the Relative Fair Value to allocate the value of the warrants and recorded it as debt discount.
   June 30,
2024		 
Note amount  $135,000 
Debt discount   (20,231)
Amortization of debt discount   3,075 
Notes payable, net  $117,844 
v3.24.3
Leases (Tables)
 6 Months Ended
Jun. 30, 2024
Leases [Abstract]  
Schedule of Lease
      June 30, 
Operating Leases  Classification  2024 
Right-of-use assets  Right of use assets  $175,351 
         
Current lease liabilities  Current operating lease liabilities   64,330 
Non-current lease liabilities  Long-term operating lease liabilities   116,675 
Total lease liabilities     $245,335 

 

Lease term and discount rate were as follows:
   June 30, 
   2024 
Weighted average remaining lease term (years)   3.44 
Weighted average discount rate   4%
The component of lease costs was as follows:
   June 30, 
   2024 
Operating lease cost  $38,196 
Variable lease cost (1)   2,100 
Total lease costs  $40,296 
(1) Variable lease cost primarily relates to common area maintenance, property taxes and insurance on leased real estate.
   June 30, 
   2024 
Cash paid for operating lease liabilities  $
       -
 
      
Schedule of Maturities of Lease Liabilities Maturities of lease liabilities were as follows as of December 31, 2023:
   Operating 
   Leases 
2024  $59,107 
2025   79,380 
2026   72,765 
Total undiscounted lease payments   211,252 
Less: Present value discount   (13,270)
Total Present value of lease liabilities  $197,982 
v3.24.3
Equity (Tables)
 6 Months Ended
Jun. 30, 2024
Equity [Abstract]  
Schedule of Warrant Activities The following table summarizes the warrant activities during the six months ended June 30, 2024:
   Number of
Warrants		   Weighted-
Average
Exercise
Price Per
Share		   Weighted-
Average
Remaining
Life		 
Outstanding at December 31, 2023   29,876    25.24    1.21 
Granted   135,000    0.15    1.44 
Canceled or expired   
-
    
-
    
-
 
Outstanding at June 30, 2024   164,876   $0.43    4.46 years 
Exercisable at June 30, 2024   164,876   $0.43    4.46 years 
Intrinsic value at June 30, 2024       $
-
      
Schedule of Option Activities The following table summarizes the option activities during the six months ended June 30, 2024:
   Number of
Options		   Weighted-
Average Exercise
Price Per
Share		   Weighted-
Average
Remaining
Life
Outstanding at December 31, 2023   1,246,341   $2.67   7.94 years
Granted   324,000   $0.22   4.67 years
Canceled or expired   (5,000)   0.22    
Exercised   
-
    
-
    
Outstanding at June 30, 2024   1,565,341   $1.81   6.41 years
Exercisable at June 30, 2024   690,508   $2.19   7.45 years
Intrinsic value at June 30, 2024       $
-
    
v3.24.3
Nature of Operations, Significant Accounting Policies and Going Concern (Details)
 6 Months Ended 12 Months Ended
Jan. 03, 2023
USD ($)
$ / shares
shares
Jun. 30, 2024
USD ($)
shares
Jun. 30, 2023
USD ($)
Dec. 31, 2023
USD ($)
Nature of Operations, Significant Accounting Policies and Going Concern [Line Items]        
Shares of common stock (in Shares) | shares 222,223      
Common stock valued $ 50,000      
Common stock per share (in Dollars per share) | $ / shares $ 0.225      
Negative cash flows from operations   $ (125,316) $ (402,440)  
Working capital deficit   1,439,890    
Accumulated deficit   (25,941,654)   $ (25,366,641)
FDIC limit   250,000    
Allowance for doubtful accounts   0   0
Inventory net of reserves   32,321   15,800
Inventory finished goods   $ 0   $ 0
Warrant [Member]        
Nature of Operations, Significant Accounting Policies and Going Concern [Line Items]        
Option anti-dilutive shares (in Shares) | shares   164,876    
Customer One [Member]        
Nature of Operations, Significant Accounting Policies and Going Concern [Line Items]        
Number of customer   2    
Customer Two [Member]        
Nature of Operations, Significant Accounting Policies and Going Concern [Line Items]        
Number of customer       2
Customer Concentration Risk [Member] | Customer One [Member] | Accounts Receivable [Member]        
Nature of Operations, Significant Accounting Policies and Going Concern [Line Items]        
Risk percentage   16.30%   19.40%
Customer Concentration Risk [Member] | Customer Two [Member] | Accounts Receivable [Member]        
Nature of Operations, Significant Accounting Policies and Going Concern [Line Items]        
Risk percentage   9.50%   14.90%
Equity Option [Member]        
Nature of Operations, Significant Accounting Policies and Going Concern [Line Items]        
Option anti-dilutive shares (in Shares) | shares   1,565,341    
v3.24.3
Nature of Operations, Significant Accounting Policies and Going Concern (Details) - Schedule of Estimated Useful Lives of Property and Equipment
Jun. 30, 2024
Furniture and Equipment [Member]  
Estimated Useful Lives of Property and Equipment [Line Items]  
Estimated useful lives 5 years
v3.24.3
Asset Purchase Agreement (Details) - USD ($)
 6 Months Ended
Jan. 03, 2023
Jun. 30, 2024
Asset Purchase Agreement Details [Abstract]    
Licenses amount   $ 10,000
Fixed assets acquired   $ 40,000
WonderLeaf [Member]    
Asset Purchase Agreement Details [Abstract]    
Shares issued (in Shares) 222,223 222,223
Share value $ 50,000 $ 50,000
Price per share (in Dollars per share) $ 0.225  
Consideration paid   $ 50,000
Common Stock [Member] | WonderLeaf [Member]    
Asset Purchase Agreement Details [Abstract]    
Shares issued (in Shares)   222,223
WonderLeaf [Member]    
Asset Purchase Agreement Details [Abstract]    
Acquisition date Jan. 03, 2023  
v3.24.3
Furniture and Equipment. (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Furniture and Equipment. [Abstract]        
Depreciation expense $ 1,952 $ 2,781 $ 4,402 $ 4,566
v3.24.3
Furniture and Equipment. (Details) - Schedule of Machinery and Equipment - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Schedule of Machinery and Equipment [Line Items]    
Fixed assets, total $ 49,947 $ 49,947
Total: accumulated depreciation (13,370) (8,968)
Fixed assets, net 36,577 40,979
Furniture and equipment [Member]    
Schedule of Machinery and Equipment [Line Items]    
Fixed assets, total 2,745 2,745
Machinery and Equipment [Member]    
Schedule of Machinery and Equipment [Line Items]    
Fixed assets, total $ 47,202 $ 47,202
v3.24.3
Note Payable – Related Party (Details) - USD ($)
 6 Months Ended 12 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Sep. 05, 2023
Note Payable – Related Party [Line Items]        
Additional loan $ 469,954    
Notes payable 849,500   $ 849,500 $ 849,500
Bearing interest rate       5.00%
Received additional advances 8,500    
Michael Feinsod [Member]        
Note Payable – Related Party [Line Items]        
Additional loan     469,954  
Note Payable [Member]        
Note Payable – Related Party [Line Items]        
Net proceeds 2,000,000     $ 2,000,000
Infinity Management, LLC [Member]        
Note Payable – Related Party [Line Items]        
Owned amount 911,372   902,872  
Received additional advances $ 8,500   $ 53,372  
v3.24.3
Note Payable – Secured (Details)
Jun. 06, 2024
USD ($)
$ / shares
shares
May 20, 2024
USD ($)
$ / shares
shares
Feb. 16, 2024
USD ($)
$ / shares
shares
Note Payable – Secured [Line Items]      
Aggregate value (in Dollars) $ 25,000 $ 10,000  
Senior secured note rate 15.00% 15.00%  
Warrant to purchase shares (in Shares) | shares 25,000 10,000  
Aggregate purchase price (in Dollars) $ 25,000 $ 10,000  
Warrants term 2 years 2 years 2 years
Warrant exercise price (in Dollars per share) | $ / shares $ 0.11 $ 0.11  
Measurement option value (in Dollars) $ 15,636 $ 15,636  
Warrant [Member]      
Note Payable – Secured [Line Items]      
Aggregate value (in Dollars)     $ 100,000
Senior secured note rate     15.00%
Warrant to purchase shares (in Shares) | shares     100,000
Aggregate purchase price (in Dollars)     $ 100,000
Warrants term     2 years
Warrant exercise price (in Dollars per share) | $ / shares     $ 0.11
Measurement option value (in Dollars)     $ 15,636
Measurement Input, Expected Dividend Rate [Member]      
Note Payable – Secured [Line Items]      
Debt measurement input 0 0 0
Measurement Input, Option Volatility [Member]      
Note Payable – Secured [Line Items]      
Debt measurement input 614 608 583
Measurement Input, Risk Free Interest Rate [Member]      
Note Payable – Secured [Line Items]      
Debt measurement input 4.72 5.42 4.64
Measurement Input, Expected Term [Member]      
Note Payable – Secured [Line Items]      
Debt measurement input 1 1 1
v3.24.3
Note Payable – Secured (Details) - Schedule of Relative Fair Value to Allocate the Value of Warrants and Debt Discount - Warrants [Member]
Jun. 30, 2024
USD ($)
Schedule of Relative Fair Value to Allocate the Value of Warrants and Debt Discount [Line Items]  
Note amount $ 135,000
Debt discount (20,231)
Amortization of debt discount 3,075
Notes payable, net $ 117,844
v3.24.3
Leases (Details)
 6 Months Ended
Jun. 30, 2024
USD ($)
Leases [Line Items]  
Rent amount $ 6,000
Purchase of property $ 600,000
Wonderleaf Purchase Agreement [Member]  
Leases [Line Items]  
Lease term 5 years
Renew for an additional term 5 years
v3.24.3
Leases (Details) - Schedule of Lease - USD ($)
 6 Months Ended
Jun. 30, 2024
Dec. 31, 2023
Schedule of Lease [Abstract]    
Right-of-use assets $ 175,351 $ 209,542
Current lease liabilities 64,330 64,330
Non-current lease liabilities 116,675 150,460
Total lease liabilities $ 245,335 $ 197,982
2024    
Weighted average remaining lease term (years) 3 years 5 months 8 days  
Weighted average discount rate 4.00%  
Operating lease cost $ 38,196  
Variable lease cost [1] 2,100  
Total lease costs 40,296  
Cash paid for operating lease liabilities  
[1] Variable lease cost primarily relates to common area maintenance, property taxes and insurance on leased real estate.
v3.24.3
Leases (Details) - Schedule of Maturities of Lease Liabilities - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Schedule of Maturities of Lease Liabilities [Abstract]    
2024   $ 59,107
2025   79,380
2026   72,765
Total undiscounted lease payments   211,252
Less: Present value discount   (13,270)
Total Present value of lease liabilities $ 245,335 $ 197,982
v3.24.3
Equity (Details) - USD ($)
 3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2024
Mar. 01, 2024
Feb. 16, 2024
Jan. 15, 2024
Jan. 08, 2024
Dec. 31, 2023
Aug. 17, 2023
Jan. 03, 2023
Aug. 01, 2022
Dec. 14, 2021
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2023
Dec. 31, 2022
Jun. 06, 2024
May 20, 2024
Dec. 31, 2021
Equity [Line Items]                                            
Reverse stock split                             45-to-1              
Common stock, shares authorized (in Shares) 3,000,000,000         3,000,000,000         3,000,000,000   3,000,000,000   3,000,000,000 3,000,000,000   3,000,000,000        
Common stock, par value (in Dollars per share) $ 0.001         $ 0.001         $ 0.001   $ 0.001   $ 0.001 $ 0.001   $ 0.001        
Preferred stock, shares authorized (in Shares) 50,000,000         50,000,000         50,000,000   50,000,000   50,000,000 50,000,000   50,000,000        
Preferred stock, par value (in Dollars per share) $ 0.001         $ 0.001         $ 0.001   $ 0.001   $ 0.001 $ 0.001   $ 0.001        
Preferred stock, shares issued (in Shares) 1         1         1       1     1        
Preferred stock, shares outstanding (in Shares) 1         1         1       1     1        
Shares of common stock acquisition (in Shares)               222,223                            
Value of shares acquisitions               $ 50,000                            
Common stock per share (in Dollars per share)               $ 0.225                            
Aggregate shares of common stock (in Shares)                 266,667                          
Vest shares (in Shares)                 155,556                          
Expenses                             $ 8,419     $ 70,907        
Prepaid stock award $ 1,057         $ 9,206                                
Share issued and sold to investor     $ 100,000                                      
Share issued percentage     15.00%                                      
Shares sold to investors (in Shares)     100,000                                      
Aggregate purchase price     $ 100,000                         $ 50,000            
Warrants term     2 years                                 2 years 2 years  
Warrants exercise price (in Dollars per share)                                       $ 0.11 $ 0.11  
Option to purchase share of common stock (in Shares)   99,000     222,500   222,500                              
Common stock exercise price (in Dollars per share)         $ 0.2                                  
Options were valued             $ 44,306         $ 900,000                    
Stock based compensation expenses                     $ 1,115       6,489              
Future expense                       $ 93,106                    
Warrant [Member]                                            
Equity [Line Items]                                            
Warrants term     2 years                                      
Warrants exercise price (in Dollars per share)     $ 0.11                                      
Warrant [Member] | Senior Secured Note [Member]                                            
Equity [Line Items]                                            
Warrants exercise price (in Dollars per share)     $ 0.11                                      
Options [Member]                                            
Equity [Line Items]                                            
Options valued         $ 8,030                                  
Vest One [Member]                                            
Equity [Line Items]                                            
Vest shares (in Shares)                 55,556                          
Vesting period                 1 year                          
Vest Two [Member]                                            
Equity [Line Items]                                            
Vest shares (in Shares)                 55,556                          
Vesting period                 2 years                          
Expenses                                     $ 1,104,928      
Options [Member]                                            
Equity [Line Items]                                            
Options vest, percentage       50.00% 50.00%                                  
Common Stock [Member]                                            
Equity [Line Items]                                            
Vesting period   5 years         5 years                              
Aggregate purchase price                               222            
Common Stock [Member] | Mr. Garth [Member]                                            
Equity [Line Items]                                            
Options were valued   $ 44,306                                        
2021 Equity Incentive Plan [Member]                                            
Equity [Line Items]                                            
Sale of stock, number of shares issued (in Shares)                   6,666,667                        
Fair market value of common stock, percentage                   100.00%                        
Option grant date term                   10 years                        
Common stock exercise price (in Dollars per share)             $ 0.2                              
Ten-Year Options [Member]                                            
Equity [Line Items]                                            
Stock based compensation expenses                         $ 24,635 $ 61,261   49,270 $ 122,522          
Black-Scholes Pricing Model [Member]                                            
Equity [Line Items]                                            
Stock based compensation expenses                     10,822       21,643              
Michael Feinsod [Member] | 2021 Equity Incentive Plan [Member]                                            
Equity [Line Items]                                            
Option to purchase share of common stock (in Shares)                   333,333                        
Common stock exercise price (in Dollars per share)                   $ 2.7                        
Premium over closing price, percentage                   120.00%                        
Options were valued                             450,000              
Hunter Garth [Member]                                            
Equity [Line Items]                                            
Stock based compensation expenses                     $ 12,318   $ 30,811   $ 24,636 $ 61,622            
Hunter Garth [Member] | Options [Member]                                            
Equity [Line Items]                                            
Option to purchase share of common stock (in Shares)                   666,667                        
Common stock exercise price (in Dollars per share)                   $ 2.7                        
Premium over closing price, percentage                                           120.00%
Mr. Garth [Member] | Restricted Stock [Member] | 2021 Equity Incentive Plan [Member]                                            
Equity [Line Items]                                            
Common stock exercise price (in Dollars per share)   $ 0.22                                        
Series A Preferred Stock [Member]                                            
Equity [Line Items]                                            
Preferred stock, shares authorized (in Shares) 1,000                   1,000   1,000   1,000 1,000            
Preferred stock, shares issued (in Shares)                                  
Preferred stock, shares outstanding (in Shares)                                  
Series C Preferred Stock [Member]                                            
Equity [Line Items]                                            
Preferred stock, shares authorized (in Shares) 1         1         1       1     1        
Preferred stock, par value (in Dollars per share) $ 0.001         $ 0.001         $ 0.001       $ 0.001     $ 0.001        
Preferred stock, shares issued (in Shares) 1         1         1   1   1 1   1        
Preferred stock, shares outstanding (in Shares) 1         1         1   1   1 1   1        
Preferred stock, stated value $ 24,000                   $ 24,000       $ 24,000              
Voting power of percentage                             51.00%              
Employee Stock Options [Member]                                            
Equity [Line Items]                                            
Stock based compensation expenses                     $ 4,662       $ 6,308              
v3.24.3
Equity (Details) - Schedule of Warrant Activities - Warrants [Member] - $ / shares
 6 Months Ended
Dec. 31, 2023
Jun. 30, 2024
Class of Warrant or Right [Line Items]    
Number of Warrants, Outstanding balance (in Shares) 29,876 164,876
Weighted- Average Exercise Price Per Share, Outstanding balance $ 25.24 $ 0.43
Weighted- Average Remaining Life, Outstanding balance 1 year 2 months 15 days 4 years 5 months 15 days
Number of Warrants, Exercisable (in Shares)   164,876
Weighted- Average Exercise Price Per Share, Exercisable   $ 0.43
Weighted- Average Remaining Life, Exercisable   4 years 5 months 15 days
Weighted- Average Exercise Price Per Share, Intrinsic value  
Number of Warrants, Granted (in Shares)   135,000
Weighted- Average Exercise Price Per Share, Granted   $ 0.15
Weighted- Average Remaining Life, Granted   1 year 5 months 8 days
Number of Warrants, Canceled or expired (in Shares)  
Weighted- Average Exercise Price Per Share, Canceled or expired  
Weighted- Average Remaining Life, Canceled or expired  
v3.24.3
Equity (Details) - Schedule of Option Activities - Options [Member] - $ / shares
 6 Months Ended
Dec. 31, 2023
Jun. 30, 2024
Schedule of Option Activities [Line Items]    
Number of Options, Outstanding, balance (in Shares) 1,246,341 1,565,341
Weighted- Average Exercise Price Per Share, Outstanding, balance $ 2.67 $ 1.81
Weighted- Average Remaining Life, Outstanding, balance 7 years 11 months 8 days 6 years 4 months 28 days
Number of Options, Exercisable (in Shares)   690,508
Weighted- Average Exercise Price Per Share, Exercisable   $ 2.19
Weighted- Average Remaining Life, Exercisable   7 years 5 months 12 days
Weighted- Average Exercise Price Per Share, Intrinsic value  
Number of Options, Granted (in Shares)   324,000
Weighted- Average Exercise Price Per Share, Granted   $ 0.22
Weighted- Average Remaining Life, Granted   4 years 8 months 1 day
Number of Options, Canceled or expired (in Shares)   (5,000)
Weighted- Average Exercise Price Per Share, Canceled or expired   $ 0.22
Number of Options, Exercised (in Shares)  
Weighted- Average Exercise Price Per Share, Exercised  
v3.24.3
Related Party Transactions (Details) - USD ($)
 6 Months Ended
Dec. 14, 2021
Dec. 13, 2021
Jun. 30, 2024
Dec. 31, 2023
Sep. 05, 2023
Related Party Transactions [Line Items]          
Notes payable     $ 849,500 $ 849,500 $ 849,500
Percentage of interest bearing         5.00%
Accrued salary     266,772    
Accounts payable     171,553    
Note Payable [Member]          
Related Party Transactions [Line Items]          
Net proceeds     2,000,000   $ 2,000,000
Infinity Management, LLC [Member]          
Related Party Transactions [Line Items]          
Received additional advances       $ 53,372  
Received additional advance amount     $ 8,500    
Hunter Garth [Member]          
Related Party Transactions [Line Items]          
Salary $ 8,000        
Mr. Garth [Member]          
Related Party Transactions [Line Items]          
Purchase shares of common stock (in Shares) 333,333        
Exercise price (in Dollars per share) $ 2.7        
Percentage of premium over the closing price of the common stock   120.00%      
Mr. Garth [Member] | Restricted Stock [Member] | 2021 Equity Incentive Plan [Member]          
Related Party Transactions [Line Items]          
Shares of common stock (in Shares) 500,000        
Mr. Garth [Member] | 2021 Equity Incentive Plan [Member]          
Related Party Transactions [Line Items]          
Vesting period 1 year        
Michael Feinsod [Member] | Restricted Stock [Member] | 2021 Equity Incentive Plan [Member]          
Related Party Transactions [Line Items]          
Shares of common stock (in Shares) 10,000        
Mr. Feinsod [Member]          
Related Party Transactions [Line Items]          
Purchase shares of common stock (in Shares) 666,667        
Exercise price (in Dollars per share) $ 2.7        
Percentage of premium over the closing price of the common stock   120.00%      
Mr. Feinsod [Member] | 2021 Equity Incentive Plan [Member]          
Related Party Transactions [Line Items]          
Vesting period 1 year        
Shares of common stock (in Shares) 1,000,000        
v3.24.3
Commitments and Contingencies (Details) - USD ($)
Aug. 31, 2022
Aug. 11, 2022
Dec. 14, 2021
Dec. 13, 2021
Jun. 30, 2024
Dec. 31, 2023
Nov. 11, 2022
Oct. 28, 2021
Commitments and Contingencies [Line Items]                
Operating profit, percentage 40.00%              
Payment inventory             $ 90,000  
Debenture Agreement [Member]                
Commitments and Contingencies [Line Items]                
Original principal amount               $ 400,000
Inventory Earn Out [Member]                
Commitments and Contingencies [Line Items]                
Final payment of inventory earn out $ 75,000              
Stock Option [Member]                
Commitments and Contingencies [Line Items]                
Option shares issued         1,565,341 1,246,341    
Common stock exercise price         $ 1.81 $ 2.67    
Mr. Garth [Member]                
Commitments and Contingencies [Line Items]                
Salary     $ 8,000          
Mr. Garth [Member] | 2021 Equity Incentive Plan [Member]                
Commitments and Contingencies [Line Items]                
Vesting period     1 year          
Mr. Garth [Member] | Restricted Common Stock [Member] | 2021 Equity Incentive Plan [Member]                
Commitments and Contingencies [Line Items]                
Issuance of restricted common stock     500,000          
Mr. Feinsod [Member]                
Commitments and Contingencies [Line Items]                
Salary     $ 10,000          
Mr. Feinsod [Member] | 2021 Equity Incentive Plan [Member]                
Commitments and Contingencies [Line Items]                
Vesting period     1 year          
Mr. Feinsod [Member] | Restricted Common Stock [Member] | 2021 Equity Incentive Plan [Member]                
Commitments and Contingencies [Line Items]                
Issuance of restricted common stock     1,000,000          
Osiris, LLC [Member]                
Commitments and Contingencies [Line Items]                
Common stock, shares issued   2,777,778            
Common Stock [Member] | Mr. Garth [Member]                
Commitments and Contingencies [Line Items]                
Premium, percentage       120.00%        
Common Stock [Member] | Mr. Garth [Member] | 2021 Equity Incentive Plan [Member] | Stock Option [Member]                
Commitments and Contingencies [Line Items]                
Option shares issued     333,333          
Common stock exercise price     $ 2.7          
Common Stock [Member] | Mr. Feinsod [Member]                
Commitments and Contingencies [Line Items]                
Premium, percentage       120.00%        
Common Stock [Member] | Mr. Feinsod [Member] | 2021 Equity Incentive Plan [Member] | Stock Option [Member]                
Commitments and Contingencies [Line Items]                
Option shares issued     666,667          
Common stock exercise price     $ 0.06          
v3.24.3
Subsequent Events (Details)
Aug. 14, 2024
shares
Subsequent Event [Member] | Restricted Stock [Member]  
Subsequent Events (Details) [Line Items]  
Aggregate shares of common stock 1,030,000
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