NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE
A – ORGANIZATION
CarbonMeta
Technologies, Inc. (f/k/a CoroWare, Inc.) (“CarbonMeta”, the “Company”, “we”, “us”, or
“our”) is a publicly quoted environmental research and development company that is commercializing technologies for processing
organic wastes into hydrogen and high-value carbon products economically and sustainably.
The
Company was incorporated on June 8, 2001 under the laws
of the State of Nevada as SRM Networks, Inc. In connection with the acquisition of Hy-Tech Computer Systems, Inc. on January 31, 2003,
the Company changed its name to Hy-Tech Technology Group, Inc. In connection with the Agreement and Plan of Merger of Robotics Workspace
Technology, Inc., Innova Holdings, Inc. and the Company’s wholly owned subsidiary, RWT Acquisition, Inc., dated July 21, 2004,
the Company’s name changed to Innova Holdings, Inc. Subsequently, the Company redomiciled in the State of Delaware and on November
20, 2006, the Company changed its name to Innova Robotics and Automation, Inc. and then on April 23, 2008, the Company changed its name
to CoroWare, Inc. On or about July 28, 2021, the Company filed Articles of Amendment to its Amended and Restated Certificate of Incorporation
with the State of Delaware to reflect a name change from CoroWare, Inc. to CarbonMeta Technologies, Inc.
The
Company has six wholly-owned subsidiaries: CoroWare Technologies, Inc. (“CTI”), CoroWare Robotics Solutions, Inc. (“CRS”),
Robotic Workspace Technologies, Inc. (“RWT”), Carbon Source, Inc. (“CS”), CoroWare Treasury, Inc. (“CWT”),
and CarbonMeta Research Ltd. (“CMR”). The Company has two majority owned subsidiaries: a 50.1% interest in CarbonMeta Green Building Materials, LLC (joint venture with Salvum Corporation)(“CMGBM”) and a 51% interest in AriCon, LLC (“AriCon”).
CoroWare
Technologies, Inc. (“CTI”) was incorporated in the State of Florida on May 16, 2006, was administratively dissolved on November
19, 2016, and its principal business was a software professional services company with a strong focus on information technology integration
and robotics integration, business automation solutions, and unmanned systems solutions to its customers in North America and Europe.
CoroWare
Robotics Solutions, Inc. (“CRS”) was incorporated in the State of Texas on February 27, 2015, and its principal business
was as a technology incubation company whose focus was on the delivery of mobile robotics and IOT products, solutions and services for
university, government and corporate researchers, and enterprise customers. CRS’s business operations were discontinued in October
2016 when the Company’s gross margins and financing costs became unsustainable.
Robotic
Workspace Technologies, Inc. (“RWT”) was incorporated in the State of Florida on July 1, 1994, was administratively dissolved
on September 25, 2009, and its principal business was developing and marketing open-architecture PC controls and related products that
could improve the performance, applicability, and productivity of robots and other automated equipment. RWT’s business operations
were discontinued in September 2007 when the Company’s losses became unsustainable.
Carbon
Source, Inc. (“CS”) was incorporated in the State of Wyoming on June 14, 2021 and its principal business is waste reclamation
technologies and processing.
CoroWare
Treasury, Inc. (“CWT”) was incorporated in the State of Wyoming on July 8, 2021 and its principal business is acquisitions
related to acquiring technologies and subsidiary businesses related to waste processing.
CarbonMeta
Research Ltd. (‘CMR”) was incorporated in England and Wales on August 12, 2021 and its principal business is the development
of technologies and solutions for processing organic wastes and generating economically sustainable hydrogen and high-value carbon products.
Using proprietary and patented technologies, it plans to implement new industrial methods using inexpensive, environmentally friendly
catalysts that process collected plastic waste material into high value products such as hydrogen gas, graphene and carbon nanotubes.
CarbonMeta Green Building Materials, LLC (“CMGBM”) is a joint
venture with Salvum Corporation organized on August 30, 2022 to develop and market construction mix products that are carbon negative
(see Production Agreement below).
AriCon,
LLC (“AriCon”) was a joint venture that was intended to develop mobile robot platforms, applications, and solutions for the construction
industry. In October 2016, AriCon ceased operations of all subsidiary business operations when the Company’s losses became unsustainable,
and the Company was not able to obtain investment financing.
In
2021, the Company began investigating emerging technologies, strategic intellectual property partnerships, and sustainable growth business
opportunities related to the production of hydrogen and high value carbon products from organic waste streams. Working cooperatively
with Oxford University Innovation, CarbonMeta plans to implement proven and patented technologies to add value to organic waste streams.
By utilizing these proven proprietary technologies, collected and captured plastic waste material can be upcycled to high value products
such as carbon nanotubes (“CNTs”) and hydrogen gas.
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE A – ORGANIZATION (continued)
CNTs
can be used for improved electrical conduction and reinforcing materials that are used in a wide variety of industries including the
automotive industry, aviation industry, medical industry, and construction. The number one growth driver is the increasing need for high
performance batteries for the electric vehicle market.
Plastic
waste is a cheap and abundant feedstock that will allow the Company to scale quickly and produce hydrogen gas for a competitive price.
License
Agreements
Oxford
University Innovation Limited
On
June 2, 2021, the Company (the “Licensee”) entered into a License Agreement (the “Agreement”) with Oxford University
Innovation Limited (the “Licensor”). Under the terms of the Agreement, the Licensee will license the licensed technology
(OUI Project- Hydrogen from plastics via microwave-initiated catalytic dehydrogenation). The Agreement is non-exclusive and includes
the United States and European Union. Signing fees for the Agreement were £54,807 and have been paid in full by the Company. The
Royalty Rate is 5% of gross sales. The Agreement comprises milestone fees as: (i) £20,000 upon the first commercial sale of a licensed
product; (ii) £50,000 upon generating $1,000,000 in sales; (iii) £10,000 upon the successful grant of the US patent; and
(iv) £10,000 upon the successful grant of the EU patent. Whether the company realizes product sales or not, the Company is subject
to a minimum payment to Oxford University Innovation of £5,000 per year for license years 1 and 2, £3,000 for license year
3 and £1,000 for license year 4 and each license year thereafter.
The
process that the Company licensed from Licensor for producing hydrogen and carbon products from waste plastics has not been demonstrated
on a larger scale. It is not yet known whether the process will be cost-effective or profitable to implement on a larger scale. The Company
has conducted tests to prove the percentage of carbon nanotubes up to 10 grams. The Company is working with a microwave reactor company
to help demonstrate this process at a scale of 100 kilograms and 1,000 kilograms per day.
The
Company has met the following milestones of its development plan set forth in the license agreement with Oxford University Innovation:
| |
● |
September 2021: established
subsidiary in Oxford, United Kingdom |
| |
● |
March 2022: produced 0.025
kilograms per day of marketable carbon nanotubes |
Oxford
University Innovation may terminate the license due to the company not using commercially reasonable efforts to develop, exploit and
market the licensed technology in accordance with the development plan.
From
July 2022 to present (see Service Award below), CarbonMeta Technologies has been working with University of Oxford
on a project with a global multi-energy provider based in Europe to assess the feasibility of processing mixed plastic waste into
clean hydrogen fuel and value-added carbon products using microwave catalysis on a large commercial scale.
Ecomena
Limited
On
December 2, 2021, the Company (“Licensee”) entered into a License of Agreement (the “Agreement”) with
Ecomena Limited (an entity located in the United Kingdom) (“Licensor”). Under the terms of the Agreement, the Licensee
will license the Licensed Technology to recycle industrial byproduct into cement free pavers and mortars that are environmentally
friendly and continuously absorb carbon dioxide. The signing fees payable to the Licensor under the Agreement are £20,000
cash (approximately $27,247
at February 17, 2022), of which £10,000 has been paid by the Licensee, and 160,000,000
shares of the Company’s common stock, which was delivered to the Licensor on February 17, 2022. The royalty rate payable to
the Licensor is 5% of product
sales, subject to a minimum of £5,000
per year for license years 1 and 2, £3,000
for license year 3 and £1,000
for license year 4 and each license year thereafter. The term of the Agreement is five years from December 2, 2021 to December 2,
2026. The Licensee may terminate the Agreement for any reason at any time provided it gives Licensor six (6) months written notice
to terminate expiring after December 2, 2024. If requested by the Licensee, the Licensor shall agree to the Agreement continuing in
force after December 2, 2026. As of the date of this filing, the Agreement is still in effect.
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE A – ORGANIZATION (continued)
Production
Agreement
On
January 11, 2022, the Company entered into an Interim Joint Product Development and Sales Representation Agreement (the “Agreement”)
with Salvum Corporation. Under the terms of the Agreement, the parties agree to work together to develop both CarbonMeta’s proprietary
cementless paver products known as “Cementless Paver” and Salvum’s proprietary concrete alternative products known
as “EarthCrete.” During the Term, Salvum agrees to manufacture CarbonMeta’s proprietary cementless paver products known
as “Cementless Paver”. CarbonMeta reserves the right to appoint other manufacturers of the products and/or to engage other
sales representatives for CarbonMeta’s proprietary cementless paver products known as “Cementless Paver” outside the
United States of America. Although the Interim Joint Product Development and Sales Representation Agreement with Salvum Corporation had
a term of 180 days and expired on July 11, 2022, the companies continued to work together, and the companies formed CarbonMeta Green Building Materials, LLC (“CMGBM”) and
signed an Operating Agreement for Management of CMGBM
on August 28, 2022 that supersedes the Interim Joint Product Development and Sales Representation Agreement.
The Operating Agreement for Management of CMGBM (the
“CMGBM Agreement”) provides for (1) the allocation of 501 Managing Membership units (50.1%) to CarbonMeta Technologies,
Inc. (“COWI”) and 499 Managing Membership units (49.9%) to Salvum Corporation, (2) COWI capital contributions to CMGBM of
(a) 250,000,000 shares of COWI common stock and (b) the assignment of the Ecomena Limited license agreement, and (3) Salvum Corporation
capital contributions to CMGBM of (a) existing EarthCrete customer list and sales pipeline, and (b) license to use EarthCrete trademark
worldwide. The CMGBM Agreement also provides that profits and losses (and distributions) of CMGBM shall be allocated on the basis of
each Managing Member’s relative capital accounts and that a Managing Member may withdraw from CMGBM upon not less than six months
prior written notice to each non-withdrawing Managing Member. As of December 31, 2022, the above capital contributions provided for in
the CMGBM Agreement had not occurred and no significant operations of CMGBM had commenced.
Service
Award
On
June 10, 2022, our subsidiary, CarbonMeta Research Ltd. (“CMR”), was granted a Service Award (entitled “Waste Plastic
Catalysis Proof of Concept”) from a business company located in Spain. The award provided for CMR to provide the customer
with an initial prototype process for converting mixed waste plastic to hydrogen and solid carbon and for the customer to pay CMR a total of
50,000 Euros in four installments as certain milestones are met. As of December 31, 2022, all of the milestones had been met by CMR
and CMR had invoiced the customer the full 50,000 Euros ($49,542), of which $40,103 was collected in the third quarter 2022 and $9,439 was collected in the fourth quarter 2022.
In October 2022, CMR was granted a second Service Award for 50,000 Euros
to provide the customer with further details on the composition of the carbon products resulting from the microwave catalysis of waste
plastics. In December 2022, CMR invoiced the customer for 20,000 Euros, which was collected in January 2023. The project is expected
to reach completion in June 2023.
In
order to further grow its business, the Company plans to:
| |
● |
Develop and patent new
microwave catalysis processes that can yield high value hydrogen and carbon products; |
| |
|
|
| |
● |
Work closely with commercial
building and solar farm general contractors that want to purchase “carbon negative” construction materials that can generate
carbon credits; |
| |
|
|
| |
● |
Acquire or develop patents
that will help the Company generate royalty revenues with potential customers and partners, and protect the Company’s competitive
position against potential competitors; |
| |
|
|
| |
● |
Develop new proprietary
and patented technologies to implement new industrial methods that can use inexpensive, environmentally friendly catalysts to process
collected plastic waste material into high value products such as hydrogen gas, graphene and carbon nanotubes; |
| |
|
|
| |
● |
seek out government programs
in the United Kingdom, European Union and United States that encourage the development of high value production of hydrogen and high
value carbon products from organic waste streams; and |
| |
|
|
| |
● |
Attract investment funds
who will actively work with the Company to achieve these goals and help the Company grow rapidly during the next 3 years. |
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE A – ORGANIZATION (continued)
Some
potential joint venture candidates have been identified and discussions initiated. These candidates are within the Company’s
core business model, serving commercial properties, accretive to cash flow, and geographically favorable. One of these joint
ventures, CarbonMeta Green Building Materials LLC will be focused on the development at marketing of construction mix products that
are carbon negative. Two other joint ventures under discussion are focused on processing waste plastics into hydrogen and high value
carbon products. We plan to fund these joint ventures with customer purchase orders and invoice payments, federal loans, federal
grants, and commercial loans.
We
have unrestricted discretion in seeking and participating in a business opportunity, subject to the availability of such opportunities,
economic conditions, and other factors.
The
selection of a business opportunity in which to participate is complex and risky. Additionally, we have only limited resources and may
find it difficult to locate good opportunities. There can be no assurance that we will be able to identify and acquire any business opportunity
which will ultimately prove to be beneficial to us and our shareholders. We will select any potential business opportunity based on our
management’s best business judgment.
Our
activities are subject to several significant risks, which arise primarily as a result of the fact that we have no specific business
and may acquire or participate in a business opportunity based on the decision of management, which potentially could act without the
consent, vote, or approval of our shareholders. The risks faced by us are further increased as a result of our lack of resources and
our inability to provide a prospective business opportunity with significant capital.
Principal
Products or Services and Markets
The
Company is in the business of developing and marketing technologies and solutions that can process organic and construction wastes into
economically high-value and ecologically sustainable products.
The
Company is partnering with a microwave reactor manufacturer in the United States to “scale up” the patented waste plastics
microwave processes that the Company licensed from Oxford University Innovation, and with a university partner in the United States to
separate, purify and characterize carbon nanotubes that the UK and US developers shall produce.
The
principal products that the Company intends to market comprise:
| |
● |
amorphous carbon, graphite,
nano-graphite, graphene, carbon nanotubes, and hydrogen; and |
| |
● |
carbon-negative building
products that help alleviate climate change by capturing carbon dioxide (CO2) for renewable energy projects. |
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE
B – SIGNIFICANT ACCOUNTING POLICIES
Principles
of Consolidation
The
consolidated financial statements include the accounts of CarbonMeta Technologies, Inc. and its six wholly-owned subsidiaries, CoroWare
Technologies, Inc., CoroWare Robotics Solutions, Inc., Robotic Workspace Technologies, Inc., Carbon Source, Inc., CoroWare Treasury,
Inc., and CarbonMeta Research Ltd., and its two majority owned subsidiaries CarbonMeta Green Building Materials, LLC and ARiCon, LLC (collectively,
the “Company”). All significant inter-company balances and transactions have been eliminated in the consolidated financial
statements.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. The Company uses all available information and appropriate techniques to develop its estimates. However, actual results could
differ from its estimates.
Foreign
Currency Translation
The
accompanying consolidated financial statements are presented in United States dollars (“$”), which is the reporting currency
of the Company. The functional currency of CarbonMeta Research Ltd. (“CMR”) is the Great Britain pound (“GBP”);
the functional currency of the Company and its other subsidiaries is the United States dollar. The assets and liabilities of CMR are
translated at the GBR currency exchange rate at the end of the period ($1.210159 at December 31, 2022), the revenues and expenses of
CMR are translated at the GBP average exchange rates during the period ($1.281871 for the year ended December 31, 2022), and
stockholders’ equity (deficit) of CMR is translated at the historical exchange rates. The resulting translation adjustments are
included in determining other comprehensive income (loss). Transaction gains and losses, which were not significant for the periods presented,
are reflected in the consolidated statements of operations.
Cash
and Cash Equivalents
The
Company considers highly liquid investments with original maturities of three months or less when purchased as cash equivalents. The
Company had no cash equivalents as of December 31, 2022 and December 31, 2021. At times throughout the year, the Company might maintain
bank balances that may exceed Federal Deposit Insurance Corporation (“FDIC”) insured limits. Periodically, the Company evaluates
the credit worthiness of the financial institutions and has not experienced any losses in such accounts. As of December 31, 2022 and
December 31, 2021, the Company did not have bank balances that exceeded the FDIC insured limits.
Property
and Equipment
Property
and equipment are recorded at cost. Expenditures for major renewals and improvements are capitalized while expenditures for minor replacements,
maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful
lives of the assets. Upon retirement or disposal of assets, the accounts are relieved of cost and accumulated depreciation and the related
gain or loss, if any, is reflected in loss on disposal of assets in the consolidated statement of income and comprehensive
income.
At
least annually, the Company evaluates, and adjusts when necessary, the estimated useful lives. There were no changes in estimated useful
lives for the periods presented. The estimated useful lives are:
SUMMARY
OF ESTIMATED USEFUL LIVES
| Computer equipment and software | |
| 5 years | |
| Filament production equipment | |
| 3 years | |
Licenses
The
licenses acquired from Oxford University Innovation Limited and Ecomena Limited (see Note A) are stated at cost less accumulated
amortization. For the Oxford license, amortization is calculated using the straight-line method over the 10-year estimated life of the
license. For the Ecomena license, amortization is calculated using the straight-line method over the 5-year term of the license.
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE
B – SIGNIFICANT ACCOUNTING POLICIES (continued)
Impairment
of Long-lived Assets
The
Company evaluates the carrying value and recoverability of its long-lived assets when circumstances warrant such evaluation by applying
the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360-35,
Property, Plant and Equipment, Subsequent Measurement (“ASC 360-35”). ASC 360-35 requires that long-lived assets be
reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable
through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such
impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.
Income
Taxes
Income
taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities
are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using
the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available
evidence, are not expected to be realized. Additionally, taxes are calculated and expensed in accordance with applicable tax code.
Segment
Reporting
FASB
ASC 280-10, Segment Reporting, defines operating segments as components of a company about which separate financial information
is available that is evaluated regularly by the chief decision maker in deciding how to allocate resources and in assessing performance.
The Company reports according to one main segment.
Fair
Value of Financial Instruments
The
Company follows FASB ASC 820-10-35-37 (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments and
paragraph 825-10-50-10 of the FASB ASC for disclosures about fair value of its financial instruments. Paragraph 820-10-35-37 establishes
a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. To increase consistency and comparability
in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs
to valuation techniques used to measure fair value into three broad levels. The three levels of fair value hierarchy defined by Paragraph
820-10-35-37 are described below:
| Level 1 |
Quoted market
prices available in active markets for identical assets or liabilities as of the reporting date. |
| |
|
| Level 2 |
Pricing inputs other than
quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| |
|
| Level 3 |
Pricing inputs that are
generally unobservable inputs and not corroborated by market data. |
Financial
assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar
techniques and at least one significant model assumption or input is unobservable.
The
fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and
the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than
one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of
the instrument.
The
carrying amounts reported in the Company’s consolidated financial statements for cash, accounts receivable and accounts
payable and accrued expenses approximate their fair value because of the immediate or short-term nature of these financial instruments.
The carrying amounts reported in the balance sheet for its notes and loans payable approximates fair value as the contractual interest
rate and features are consistent with similar instruments of similar risk in the marketplace.
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE
B – SIGNIFICANT ACCOUNTING POLICIES (continued)
Transactions
involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive,
free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related
party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations
can be substantiated.
It
is not, however, practical to determine the fair value of advances from stockholders, if any, due to their related party nature.
The
following table presents assets and liabilities that are measured and recognized at fair value as of December 31, 2022 and December
31, 2021, on a recurring basis:
SUMMARY
OF ASSETS AND LIABILITIES MEASURED AND RECOGNIZED AT FAIR VALUE
| Assets and liabilities measured at fair value on a recurring basis at December 31, 2022 | |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total Carrying Value | |
| | |
| | | |
| | | |
| | | |
| | |
| Derivative liabilities | |
$ | - | | |
$ | (9,652,846 | ) | |
$ | - | | |
$ | (9,652,846 | ) |
| Assets and liabilities measured at fair value on a recurring basis at December 31, 2021 | |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total Carrying
Value | |
| | |
| | |
| | | |
| | | |
| | |
| Derivative liabilities | |
$ | - | | |
$ | (11,904,070 | ) | |
$ | - | | |
$ | (11,904,070 | ) |
Convertible
Instruments
The
Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards
for FASB ASC 815, Derivatives and Hedging (“ASC 815”).
Professional
standards generally provide three criteria that, if met, require companies to bifurcate conversion options from their host instruments
and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic
characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and
risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is
not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported
in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered
a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional
as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument.”
The
Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from
their host instruments) in accordance with professional standards under “Accounting for Convertible Securities with Beneficial
Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, the
Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments
based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the
effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt
to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion
options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment
date of the preferred stock transaction and the effective conversion price embedded in the preferred stock. ASC 815 provides that, among
other things, generally, if an event is not within the entity’s control, could or require net cash settlement, then the contract
shall be classified as an asset or a liability.
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE
B – SIGNIFICANT ACCOUNTING POLICIES (continued)
Stock
Based Compensation
The
Company follows FASB ASC 718, Compensation – Stock Compensation, which prescribes accounting and reporting standards for
all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing
or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights.
Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the consolidated financial statements based on their fair values. That expense is recognized over the period during which an employee
is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
The
Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50,
Equity–based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the
fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair
value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.
Through
newly issued restricted common stock, the Company pays qualified contractors and advisors common shares in lieu of compensation for services
provided including business development, management, technology development, consulting, legal services and accounting services.
Revenue
Recognition
The
Company will recognize revenue for its sales of energy products pursuant to the License Agreements with Oxford University Innovation
Limited and Ecomena Limited (see Note A) when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is
fixed or determinable and collectability is probable. Product sales will be recognized by us generally at the time product is shipped.
Shipping and handling costs will be included in cost of goods sold.
Research
and Development
Research
and development costs relate to the development of new products, including significant improvements and refinements to existing products,
and are expensed as incurred. Research and development expenses for the years ended December 31, 2022 and 2021 were $20,193 and
$0, respectively.
Basic
and Diluted Loss per Common Share
The
Company computes basic and diluted earnings per common share amounts in accordance with FASB ASC 260, Earnings per Share. Basic
earnings per common share is computed by dividing net income (loss) available to common shareholders by the weighted average number of
common shares outstanding during the reporting period. Diluted earnings per common share reflects the potential dilution that could occur
if stock options, convertible securities and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common
stock that could share in the earnings of the Company.
The
Company currently has convertible debt and preferred stock, which, if converted, as of December 31, 2022 and 2021, would
have caused the Company to issue diluted shares totaling 38,413,605,864 and 32,963,937,306, respectively.
Dividend
Policy
The
Company has never declared or paid any cash dividends on its common stock. The Company anticipates that any earnings will be retained
for development and expansion of its business and does not anticipate paying any cash dividends in the foreseeable future. Additionally,
as of December 31, 2022 and 2021, the Company has issued, and has outstanding, shares of Series B Preferred Stock which
are entitled, prior to the declaration of any dividends on common stock, to earn a 5% dividend, payable in either cash or common stock
of the Company. The Board of Directors has sole discretion to declare dividends based on the Company’s financial condition, results
of operations, capital requirements, contractual obligations and other relevant factors. At December 31, 2022 and 2021,
there were cumulative undeclared dividends to Preferred Series B shareholders of $127,728 and $119,750, respectively, the obligation
for which is contingent on declaration by the board of directors. At December 31, 2022 and 2021, there were accrued unpaid
declared dividends of $15,969 and $15,969, respectively (which are included in accounts payable and accrued expenses).
Recent
Accounting Pronouncements
Certain
accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and therefore
have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption
of these standards is not expected to be material.
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE
C – GOING CONCERN
The Company has a working capital deficit of $24,786,737
and $26,006,260 as of December 31, 2022
and 2021, respectively. The Company has accumulated deficits of $64,003,956
and $64,404,388 as
of December 31, 2022 and 2021, respectively. Additionally, the Company is in default of substantially all of its debt and other obligations
(see Notes F, H, I and K). Because of these and other factors, the Company will require additional working capital to develop its business
operations. The Company intends to raise additional working capital through the use of private placements, public offerings and/or bank
financing.
There
are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from
operations; or (2) obtain additional financing through either private placements, public offerings and/or bank financing necessary to
support the Company’s working capital requirements. To the extent that funds generated from operations, any private placements,
public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can
be given that additional financing will be available, or if available, will be on terms acceptable to the Company.
These
conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements
do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification
of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE
D – PROPERTY AND EQUIPMENT, NET
Property
and equipment, net, consists of the following at December 31, 2022 and December 31, 2021:
SCHEDULE
OF PROPERTY AND EQUIPMENT
| | |
December 31, | | |
December 31, | |
| | |
2022 | | |
2021 | |
| Computer equipment and software | |
$ | 1,325 | | |
$ | 1,325 | |
| Filament production equipment | |
| 45,799 | | |
| 45,799 | |
| Subtotal | |
| 47,124 | | |
| 47,124 | |
| Less: accumulated depreciation | |
| (18,235 | ) | |
| (2,704 | ) |
| Property and equipment, net | |
$ | 28,889 | | |
$ | 44,420 | |
Depreciation
of equipment expense for the years ended December 31, 2022 and 2021 was $15,531 and $2,704, respectively.
NOTE
E – LICENSES, NET
The
licenses, net, consist of the following at December 31, 2022 and 2021:
SCHEDULE
OF LICENSES, NET
| | |
December 31, | | |
December 31, | |
| | |
2022 | | |
2021 | |
| License acquired from Oxford University Innovation Limited on June 2, 2021 (see Note A) | |
$ | 79,256 | | |
$ | 79,256 | |
| License acquired from Ecomena Limited effective February 17, 2022 (see Note A) | |
| 91,247 | | |
| - | |
| Subtotal | |
| 170,503 | | |
| 79,256 | |
| Accumulated amortization | |
| (32,229 | ) | |
| (4,603 | ) |
| License, net | |
$ | 138,274 | | |
$ | 74,653 | |
Amortization
of licenses expense for the years ended December 31, 2022 and 2021 was $27,625 and $4,603, respectively.
At
December 31, 2022, the expected future amortization of licenses expense was:
SCHEDULE
OF FUTURE AMORTIZATION OF LICENSES EXPENSE
| Fiscal year ending December 31: | |
| |
| 2023 | |
$ | 26,175 | |
| 2024 | |
| 26,175 | |
| 2025 | |
| 26,175 | |
| 2026 | |
| 26,175 | |
| 2027 | |
| 10,327 | |
| Thereafter | |
| 23,247 | |
| Total | |
$ | 138,274 | |
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE
F – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts
payable and accrued expenses consists of the following at December 31, 2022 and 2021:
SCHEDULE
OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES
| | |
December 31, | | |
December 31, | |
| | |
2022 | | |
2021 | |
| Accounts payable | |
$ | 1,434,142 | | |
$ | 1,344,631 | |
| Accrued interest | |
| 6,362,570 | | |
| 5,422,526 | |
| Accrued CEO compensation | |
| 874,500 | | |
| 874,500 | |
| Accrued CarbonMeta Research, Ltd. Board of Directors fees | |
| 63,314 | | |
| - | |
| Accrued payroll | |
| 110,335 | | |
| 111,368 | |
| Deferred compensation to Chief Technology Officer of Company subsidiary, CoroWare Technologies, Inc. | |
| 230,993 | | |
| 230,993 | |
| Payroll taxes payable | |
| 1,998,735 | | |
| 1,998,735 | |
| Commissions payable | |
| 221,188 | | |
| 221,188 | |
| Accrued consulting fees relating to the Mutual Release and Settlement Agreement dated July 19, 2021 with Y.A. Global Investments, LP (Note H) | |
| 50,000 | | |
| 350,000 | |
| Accrued dividends on Series B Preferred Stock | |
| 15,969 | | |
| 15,969 | |
| License fee payable to Ecomena Limited | |
| 13,624 | | |
| - | |
| Other | |
| 82,074 | | |
| 71,954 | |
| Total | |
$ | 11,457,444 | | |
$ | 10,641,864 | |
The
accounts payable of $1,434,142 at December 31, 2022, which substantially all relate to year 2016 and prior, are liabilities of:
SCHEDULE OF INFORMATION
ABOUT LIABILITIES
| | |
December 31, | |
| | |
2022 | |
| CarbonMeta Technologies, Inc. | |
$ | 229,673 | |
| CoroWare Technologies, Inc. | |
| 1,157,662 | |
| CoroWare Robotics Solutions, Inc. | |
| 34,353 | |
| Carbon Source, Inc. | |
| 3,197 | |
| AriCon, LLC | |
| 9,257 | |
| Total | |
$ | 1,434,142 | |
The
payroll taxes payable of $1,998,735 and commissions payable of $221,188 at December 31, 2022, which also substantially all relate to
year 2016 and prior, are all liabilities of CoroWare Technologies, Inc. On October 28, 2021, the Company CEO submitted an Offer in Compromise
with the Internal Revenue Service to satisfy the trust fund portion (approximately $1,400,000) of the liability for $534,457 and paid
$106,891 to the Internal Revenue Service with the offer. To date, the Internal Revenue Service has not yet accepted or declined this
Offer in Compromise.
NOTE
G –OBLIGATIONS COLLATERALIZED BY RECEIVABLES, NET
Obligations
collateralized by receivables consist of:
SCHEDULE
OF OBLIGATIONS COLLATERALIZED BY RECEIVABLES
| | |
December 31, | | |
December 31, | |
| | |
2022 | | |
2021 | |
| Knight Capital July 16, 2015 arrangement | |
$ | - | | |
$ | - | |
| Quick Fix Capital August 17, 2015 arrangement | |
| 48,907 | | |
| 48,907 | |
| Power Up January 8, 2016 arrangement | |
| 14,232 | | |
| 14,232 | |
| Power Up April 12, 2016 arrangement | |
| 67,645 | | |
| 67,645 | |
| Power Up April 28, 2016 arrangement | |
| 29,696 | | |
| 29,696 | |
| Power Up June 2, 2016 arrangement | |
| 45,756 | | |
| 45,756 | |
| Total | |
$ | 206,236 | | |
$ | 206,236 | |
The
financing arrangements relating to the above liabilities were entered into between CoroWare Technologies, Inc. (“CTI”), a
subsidiary of the Company, and lenders in 2015 and 2016. The agreements provided for financing plus debt discounts for CTI to repay to
the lenders. The terms of repayment require CTI to remit to the lenders certain percentages of future receivables collections until such
time as the balances are paid in full.
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE
H – CONVERTIBLE DEBT, NET
Convertible
debt, net, consists of:
SCHEDULE
OF CONVERTIBLE DEBT, NET
| | |
| |
| |
| |
Principal
Balance at | |
Accrued
Interest
Balance at |
| Lender | |
Interest Rate | |
Default Rate | |
Conversion Price | |
December 31, 2022 | |
December
31,
2021 | |
December 31,
2022 | |
December 31,
2021 |
| | |
| |
| |
| |
| |
| |
| |
|
| Westmount Holdings
International, Ltd – loan date January 12, 2010 due on demand | |
| 14.00 | % | |
| 14.00 | % | |
| (1 | ) | |
$ | 537,317 | | |
$ | 537,317 | | |
$ | 968,268 | | |
$ | 893,044 | |
| Tangiers Investment Group,
LLC – loan date March 9, 2013 and due date of March 9, 2014, in technical default | |
| 10.00 | % | |
| 20.00 | % | |
| (2 | ) | |
| - | | |
| - | | |
| 891 | | |
| 891 | |
| Tangiers Investment Group,
LLC – loan date March 27, 2014 and due date of March 27, 2015, in technical default | |
| 10.00 | % | |
| 20.00 | % | |
| (2 | ) | |
| 75,000 | | |
| 75,000 | | |
| 122,219 | | |
| 107,219 | |
| Tangiers Investment Group,
LLC – due on demand | |
| 0.00 | % | |
| 15.00 | % | |
$ | 0.0006 | | |
| 47,000 | | |
| 47,000 | | |
| 62,892 | | |
| 62,892 | |
| Tangiers Investment Group,
LLC – loan date October 11, 2016 and due date of October 20, 2017, in technical default | |
| 0.00 | % | |
| 20.00 | % | |
$ | 0.0006 | | |
| 10,000 | | |
| 10,000 | | |
| 6,663 | | |
| 6,663 | |
| Tangiers Investment Group,
LLC – loan date January 30, 2017 and due date of January 30, 2018, in technical default | |
| 10.00 | % | |
| 20.00 | % | |
$ | 0.0006 | | |
| 30,910 | | |
| 30,910 | | |
| 18,445 | | |
| 18,445 | |
| Tangiers Investment Group,
LLC – loan date July 19, 2021 and due date of July 19, 2022 | |
| 10.00 | % | |
| 20.00 | % | |
$ | 0.001 | | |
| 105,000 | | |
| 105,000 | | |
| 15,275 | | |
| 4,775 | |
| Tangiers Investment Group,
LLC – loan date September 8, 2021 and due date of September 8, 2022 | |
| 10.00 | % | |
| 20.00 | % | |
$ | 0.001 | | |
| 105,000 | | |
| 105,000 | | |
| 13,779 | | |
| 3,279 | |
| Tangiers Investment Group,
LLC – loan date March 21, 2022 and due date of March 21, 2023 | |
| 12.00 | % | |
| 16.00 | % | |
$ | 0.0002 | | |
| 55,000 | | |
| - | | |
| 5,153 | | |
| - | |
| Lloyd T. Spencer (the Company’s
sole officer and director) – loan date March 7, 2022 and due date of March 7, 2023 | |
| 12.00 | % | |
| 16.00 | % | |
$ | 0.0002 | | |
| 66,000 | | |
| - | | |
| 6,488 | | |
| - | |
| Dakota Capital Pty, Ltd –
loan date April 8, 2014 and due date of December 31, 2014, in technical default | |
| 14.00 | % | |
| 14.00 | % | |
| (3 | ) | |
| 200,000 | | |
| 200,000 | | |
| 244,482 | | |
| 216,482 | |
| Zoom Marketing – loan
date August 23, 2013 and due date of January 23, 2014, in technical default | |
| 5.00 | % | |
| 10.00 | % | |
| (8 | ) | |
| 65,000 | | |
| 65,000 | | |
| 62,319 | | |
| 55,819 | |
Burrington Capital,
LLC – loan date April 2, 2014 and due date of October 1, 2014, in technical default | |
| 10.00 | % | |
| 15.00 | % | |
| (12 | ) | |
| 25,000 | | |
| 25,000 | | |
| 64,897 | | |
| 52,447 | |
| Patrick Ferro – loan
date April 3, 2014 and due date of December 31, 2014, in technical default | |
| 14.00 | % | |
| 14.00 | % | |
| (13 | ) | |
| 26,825 | | |
| 26,825 | | |
| 38,704 | | |
| 34,948 | |
| Barry Liben – loan date
April 3, 2014 and due date of December 31, 2014, in technical default | |
| 0.00 | % | |
| 0.00 | % | |
| (13 | ) | |
| 52,800 | | |
| 52,800 | | |
| - | | |
| - | |
| Jared Robert – loan
date December 10, 2014 and due date of June 10, 2015, in technical default | |
| 10.00 | % | |
| 15.00 | % | |
| (12 | ) | |
| 20,000 | | |
| 20,000 | | |
| 44,867 | | |
| 35,883 | |
| Raphael Cariou – loan
date August 3, 2012 and due date of February 3, 2013, in technical default | |
| 10.00 | % | |
| 15.00 | % | |
| (4 | ) | |
| 7,000 | | |
| 7,000 | | |
| 25,227 | | |
| 20,763 | |
| Raphael Cariou – loan
date March 12, 2015 and due date of September 12, 2015, in technical default | |
| 24.00 | % | |
| 29.00 | % | |
| (4 | ) | |
| 82,178 | | |
| 82,178 | | |
| 684,080 | | |
| 493,167 | |
| Raphael Cariou - loan date
March 12, 2015 and due date of September 12, 2015, in technical default | |
| 24.00 | % | |
| 29.00 | % | |
| (4 | ) | |
| 94,178 | | |
| 94,178 | | |
| 766,739 | | |
| 552,242 | |
| Redwood Management, LLC –
loan date of March 21, 2011 and due date of March 18, 2013, in technical default | |
| 14.00 | % | |
| 14.00 | % | |
| (1 | ) | |
| 123,936 | | |
| 123,936 | | |
| 170,680 | | |
| 153,329 | |
| AGS Capital Group, LLC –
loan date of February 25, 2013 and due date of February 25, 2014, in technical default | |
| 14.00 | % | |
| 14.00 | % | |
| (9 | ) | |
| 8,640 | | |
| 8,640 | | |
| 117,931 | | |
| 101,485 | |
| AGS Capital Group, LLC –
loan date of February 25, 2013 and due date of February 25, 2014, in technical default | |
| 14.00 | % | |
| 14.00 | % | |
| (9 | ) | |
| 42,000 | | |
| 42,000 | | |
| 123,437 | | |
| 101,941 | |
| Tim Burgess – loan date
of July 8, 2003 and due date of January 8, 2004, in technical default | |
| 8.00 | % | |
| 15.00 | % | |
$ | 1.00 | | |
| 50,000 | | |
| 50,000 | | |
| 144,414 | | |
| 136,914 | |
| Azriel Nagar – loan
date of July 8, 2003 and due date of January 8, 2004, in technical default | |
| 8.00 | % | |
| 15.00 | % | |
$ | 1.00 | | |
| 50,000 | | |
| 50,000 | | |
| 144,414 | | |
| 136,914 | |
| Kelburgh, Ltd – loan
date of February 12, 2012 and due date of March 22, 2012, in technical default | |
| 10.00 | % | |
| 15.00 | % | |
| (8 | ) | |
| 13,000 | | |
| 13,000 | | |
| 52,363 | | |
| 43,311 | |
| Premier IT Solutions –
loan date of October 5, 2011 and due date of March 5, 2012, in technical default | |
| 10.00 | % | |
| 15.00 | % | |
| (7 | ) | |
| 21,962 | | |
| 21,962 | | |
| 92,994 | | |
| 77,073 | |
| LG Capital Funding, LLC –
loan date of March 11, 2014 and due date of March 11, 2015, in technical default | |
| 12.00 | % | |
| 24.00 | % | |
| (11 | ) | |
| 32,000 | | |
| 32,000 | | |
| 63,817 | | |
| 56,137 | |
| LG Capital Funding, LLC –
loan date of January 7, 2015 and due date of January 7, 2016, in technical default | |
| 12.00 | % | |
| 24.00 | % | |
| (11 | ) | |
| 20,625 | | |
| 20,625 | | |
| 37,044 | | |
| 32,094 | |
| LG Capital Funding, LLC –
loan date of March 11, 2014 and due date of March 11, 2015, in technical default | |
| 12.00 | % | |
| 24.00 | % | |
| (11 | ) | |
| 24,000 | | |
| 24,000 | | |
| 47,863 | | |
| 42,103 | |
| Barclay Lyons – loan
date of January 28, 2011 and due date of July 28, 2011 in technical default | |
| 21.00 | % | |
| 36.00 | % | |
| (6 | ) | |
| 10,750 | | |
| 10,750 | | |
| 45,354 | | |
| 41,484 | |
| Blackridge Capital, LLC –
loan date of April 2, 2011 and due date of July 28, 2011 in technical default | |
| 10.00 | % | |
| 15.00 | % | |
| (7 | ) | |
| 6,985 | | |
| 6,985 | | |
| 125,231 | | |
| 106,920 | |
| Blackridge Capital, LLC –
loan date of February 21, 2014 and due date of September 21, 2014 in technical default | |
| 8.00 | % | |
| 8.00 | % | |
| (10 | ) | |
| 5,000 | | |
| 5,000 | | |
| 4,912 | | |
| 4,152 | |
| Julian Herskowitz –
loan date of July 8, 2003 and due date of January 8, 2004 in technical default | |
| 8.00 | % | |
| 15.00 | % | |
| (15 | ) | |
| - | | |
| - | | |
| 16,287 | | |
| 16,287 | |
| Patrick Tuohy – loan
date of April 1, 2014 and due date of December 31, 2014 in technical default | |
| 14.00 | % | |
| 14.00 | % | |
| (12 | ) | |
| - | | |
| - | | |
| 153 | | |
| 153 | |
| Richard Wynns – loan
date July 22, 2005 and due date of December 31, 2006, in technical default | |
| 5.00 | % | |
| 5.00 | % | |
$ | 0.15 | | |
| 7,500 | | |
| 7,500 | | |
| 7,502 | | |
| 7,127 | |
| Richard
Wynns - loan date July 26, 2010 and due date of December 31, 2011, in technical default | |
| 10.00 | % | |
| 10.00 | % | |
| (5 | ) | |
| 93,997 | | |
| 93,997 | | |
| 117,472 | | |
| 108,072 | |
| MacRab
LLC – loan date May 10, 2022 and due date of May 10, 2023 | |
| 12.00 | % | |
| 16.00 | % | |
$ | 0.0002 | | |
| 33,056 | | |
| - | | |
| 2,554 | | |
| - | |
| BHP Capital NY Inc. - loan date
July 14, 2022 and due date of July 14, 2023 | |
| 12.00 | % | |
| 12.00 | % | |
$ | 0.0002 | | |
| 25,000 | | |
| - | | |
| 1,397 | | |
| - | |
| Quick Capital LLC - loan date July
14, 2022 and due date of July 14, 2023 | |
| 12.00 | % | |
| 12.00 | % | |
$ | 0.0002 | | |
| 25,000 | | |
| - | | |
| 1,397 | | |
| - | |
| Quick Capital LLC - loan date November 1, 2022 and due date of November
1, 2023 | |
| 12.00 | % | |
| 16.00 | % | |
$ | 0.0002 | | |
| 10,000 | | |
| - | | |
| 201 | | |
| - | |
| Robert Papiri Defined Benefit Plan
- loan date July 15, 2022 and due date of July 15, 2023 | |
| 12.00 | % | |
| 12.00 | % | |
$ | 0.0002 | | |
| 10,000 | | |
| - | | |
| 556 | | |
| - | |
| Robert Papiri Defined Benefit Plan - loan date November 16, 2022 and due
date of November 16, 2023 | |
| 12.00 | % | |
| 16.00 | % | |
$ | 0.0002 | | |
| 10,000 | | |
| - | | |
| 148 | | |
| - | |
| Robert Papiri Defined Benefit Plan - loan date December 11, 2022 and due date of December 11, 2023 | |
| 12.00 | % | |
| 16.00 | % | |
| 0.0002 | | |
| 5,000 | | |
| - | | |
| 33 | | |
| - | |
| Robert Papiri Defined Contribution
Plan - loan date July 15, 2022 and due date of July 15, 2023 | |
| 12.00 | % | |
| 16.00 | % | |
$ | 0.0002 | | |
| 2,500 | | |
| - | | |
| 139 | | |
| - | |
| RPG Capital Partners, Inc - loan
date July 15, 2022 and due date of July 15, 2023 | |
| 12.00 | % | |
| 16.00 | % | |
$ | 0.0002 | | |
| 2,500 | | |
| - | | |
| 139 | | |
| - | |
| RPG Capital Partners, Inc - loan
date August 4, 2022 and due date of August 4, 2023 | |
| 12.00 | % | |
| 16.00 | % | |
$ | 0.0002 | | |
| 25,000 | | |
| - | | |
| 1,225 | | |
| - | |
| RPG Capital Partners, Inc - loan
date September 12, 2022 and due date of September 12, 2023 | |
| 12.00 | % | |
| 16.00 | % | |
$ | 0.0002 | | |
| 15,000 | | |
| - | | |
| 542 | | |
| - | |
| Total | |
| | | |
| | | |
| | | |
| 2,277,659 | | |
| 1,993,603 | | |
| 4,471,583 | | |
| 3,724,455 | |
| Less
debt discounts | |
| | | |
| | | |
| | | |
| (117,625 | ) | |
| (6,178 | ) | |
| - | | |
| - | |
| Net | |
| | | |
| | | |
| | | |
$ | 2,160,034 | | |
$ | 1,987,425 | | |
$ | 4,471,583 | | |
$ | 3,724,455 | |
| (1) |
Lesser
of (a) $0.02 or (b) 85% of the lowest closing price during the 30-day trading period prior to conversion. |
| (2) |
50%
of the lowest closing price during the 20-day trading period prior to conversion. |
| (3) |
Lesser
of (a) $0.02 or (b) 50% of the lowest volume weighted average price during the 30-day trading period prior to conversion. |
| (4) |
86.9565%
of the average prices of the five trading days prior to the conversion date. |
| (5) |
75%
of the average of the three lowest closing prices during the 10-day trading period prior to conversion. |
| (6) |
50%
of the lesser of (i) the closing price on the day prior to conversion, or (ii) the volume-weighted-average closing price of the five-day
trading period prior to conversion, though in no instance shall the conversion price be less than $0.0001. |
| (7) |
Average
of the five trading days prior to the applicable conversion date, with the number of conversion shares multiplied by 115%. |
| (8) |
85%
of the average of the five trading days prior to the applicable conversion date. |
| (9) |
35%
of the lowest closing price during the 20-day trading period prior to conversion. |
| (10) |
60%
of the lowest closing price during the 30-day trading period prior to conversion |
| (11) |
50%
of the lowest closing price during the 10-day trading period prior to, and including the date of, conversion |
| (12) |
60%
of the lowest closing price during the 20-day trading period prior to conversion, or $0.01, whichever is lower. |
| (13) |
50%
of the average of the three lowest closing prices during the 30-day trading period prior to conversion, or $0.02, whichever is lower,
with the conversion rate being rounded to $0.0001 or whole share. |
| (15) |
65%
of the lowest closing price during the 7-day trading period prior to conversion |
On
July 19, 2021, the Company entered into a Settlement Agreement with Y.A. Global Investments, LP (“YA Global”). Pursuant to
the Settlement Agreement, the Company issued a total of 2,225,000,000 shares of its common stock to YA Global from September 24, 2021
to October 13, 2021 (see Note N) in full settlement of its then $5,192,492 ($2,715,910 principal plus $2,476,582 accrued interest) liability
to YA Global.
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE
H – CONVERTIBLE DEBT, NET (continued)
In
the Company’s evaluation of each convertible debt instrument in accordance with FASB ASC 815, Derivatives and Hedging, based
on the variable conversion price, it was determined that the conversion features were not afforded the exemption as a conventional convertible
instrument and did not otherwise meet the conditions for equity classification. As such, the conversion and other features were compounded
into one instrument, bifurcated from the debt instrument and carried as a derivative liability, at fair value (Please see NOTE
L – DERIVATIVE LIABILITY for further information). As of December 31, 2022 and December 31, 2021, debt discounts related to
convertible notes payable totaled $117,625 and $6,178, respectively.
NOTE
I – NOTES PAYABLE
Notes
payable consist of:
SCHEDULE
OF NOTES PAYABLE
| | |
Principal Balance | | |
Accrued Interest Balance | |
| Description (i) | |
December 31, 2022 | | |
December 31, 2021 | | |
December 31, 2022 | | |
December 31, 2021 | |
| | |
| | |
| | |
| | |
| |
| Total | |
$ | 154,873 | | |
$ | 127,873 | | |
$ | 689,927 | | |
$ | 578,661 | |
| Gary Sumner June 29, 2017 note, interest at 5% compounded (default simple interest at 18%), due March 31, 2018 | |
$ | 45,000 | | |
$ | 45,000 | | |
$ | 114,255 | | |
$ | 106,155 | |
| LTC International Corp July 3, 2018 note, interest at 20.8% (default interest at 41.6%), due December 17, 2018 | |
| 4,732 | | |
| 4,732 | | |
| 30,707 | | |
| 28,739 | |
| Richard Wynns July 27, 2010 note, interest at 18% compounded (default compounded interest at 21%), due January 23, 2011 | |
| 25,000 | | |
| 25,000 | | |
| 300,313 | | |
| 240,877 | |
| William Rittman May 10, 2016 note, interest at 16% compounded, due August 29, 2016 | |
| - | | |
| 3,000 | | |
| - | | |
| - | |
| Barclay Lyons March 15, 2011 note, interest at 18.99% (default interest at 28.99%), due March 25, 2011 | |
| 15,000 | | |
| 15,000 | | |
| 51,271 | | |
| 46,922 | |
| John Kroon March 17, 2010 note, interest at 18% compounded (default compounded interest at 21%), due September 13, 2010 | |
| 10,000 | | |
| 10,000 | | |
| 130,345 | | |
| 104,704 | |
| Walter Jay Bell October 18, 2013 note, interest at 10%, due November 29, 2013 | |
| 10,000 | | |
| 10,000 | | |
| 9,257 | | |
| 8,257 | |
| Walter Jay Bell April 24, 2016 note, interest at 10%, due September 30, 2016 | |
| 8,641 | | |
| 8,641 | | |
| 2,915 | | |
| 2,483 | |
| George Ferch March 29, 2011 note, interest at 0% (default compounded interest at 21%), due June 27, 2011 | |
| 5,000 | | |
| 5,000 | | |
| 49,536 | | |
| 39,572 | |
| Blackridge, LLC April 11, 2012 note, interest at 5% (default interest at 5%), due May 25, 2012 | |
| 1,500 | | |
| 1,500 | | |
| 1,027 | | |
| 952 | |
| Michael Sobeck August 16, 2022 note, interest at 12%, due August 16, 2023 | |
| 30,000 | | |
| - | | |
| 300 | | |
| - | |
| Total | |
$ | 154,873 | | |
$ | 127,873 | | |
$ | 689,927 | | |
$ | 578,661 | |
| |
(i) |
Unless otherwise noted,
interest is simple interest. |
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE
J – NOTES PAYABLE, RELATED PARTIES
As
of December 31, 2022 and 2021, the Company had an aggregate total of $199,415 and $199,415, respectively, in related party notes payable.
These notes bear simple interest at rates ranging from 10% to 18% per annum, with default simple interest at rates ranging from 10% to
24% per annum. Accrued interest on related party notes payable totaled $468,562 and $426,110 at December 31, 2022 and 2021, respectively.
NOTE
K – SMALL BUSINESS ADMINISTRATION LOAN
On
April 17, 2002, the Company borrowed $989,100 under a note agreement with the Small Business Administration. The note bears interest
at 4% and is secured by the equipment and machinery assets of the Company. The balance outstanding at December 31, 2022 and 2021 was
$979,950 and $979,950, respectively. The note calls for monthly installments of principal and interest of $4,813 beginning September
17, 2002 and continuing until April 17, 2032.
The
Company and the Small Business Administration reached an agreement in November 2010, whereby the Small Business Administration would
accept $500 per month for 12 months with payment reverting back to $4,813 in November 2011. The Company only made four payments under
the modification agreement. The Company continues to carry the loan as a current term liability because current payments are not being
made, resulting in a default. Accrued interest payable on the note totaled $732,497 and $693,299 as of December 31, 2022 and 2021, respectively.
NOTE
L – DERIVATIVE LIABILITY
Effective
July 31, 2009, the Company adopted ASC 815, which defines determining whether an instrument (or embedded feature) is solely indexed to
an entity’s own stock. The conversion price of certain convertible notes and convertible preferred stock are variable and subject
to the fair value of the Company’s common stock on the date of conversion. As a result, the Company has determined that the conversion
features are not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In
accordance with ASC 815, the Company has bifurcated the conversion features of the instruments to be recorded as a derivative liability.
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE
L – DERIVATIVE LIABILITY (continued)
ASC
815 requires Company management to assess the fair market value of certain derivatives at each reporting period and recognize any change
in the fair market value as items of other income or expense. The Company’s only asset or liability measured at fair value on a
recurring basis is its derivative liability associated with convertible notes payable and preferred stock.
At
origination and subsequent revaluations, the Company valued the derivative liabilities using the Black-Scholes options pricing model
under the following assumptions as of December 31, 2022 and 2021:
SUMMARY
OF DERIVATIVE LIABILITIES
| | |
December 31, 2022 | | |
December 31, 2021 | |
| | |
| | |
| |
| Risk-free interest rate | |
| 4.41 | % | |
| 0.73 | % |
| Expected options life | |
| 1 - 2 yrs | | |
| 1-3 yrs | |
| Expected dividend yield | |
| - | | |
| - | |
| Expected price volatility | |
| 341 | % | |
| 341 | % |
For the year ended December 31, 2022, the Company’s
derivative liability decreased from $11,904,070 at December 31, 2021 to $9,652,846 at December 31, 2022, and the Company recognized a
gain from derivative liability of $2,247,918. For the year ended December 31, 2021, the Company’s derivative liability decreased
from $21,713,986 at December 31, 2020 to $11,904,070 at December 31, 2021, and the Company recognized a gain from derivative liability
of $9,809,916.
NOTE
M – PREFERRED STOCK
a)
Series A Preferred Stock
The
Company has authorized 125,000 shares of Series A Preferred Stock. Each share of Series A Preferred Stock (i) pays a dividend of 5%,
payable at the discretion of the Company in cash or common stock, (ii) is convertible immediately after issuance into the Company’s
common stock at the lesser of $3,000 per share (as adjusted for the November 20, 2006 1 for 10, the April 8, 2009 1 for 300 and the July
12, 2012 1 for 200 reverse stock splits) or 75% of the average closing bid prices over the 20 trading days immediately preceding the
date of conversion, (iii) has a liquidation preference of $1.00 per share, (iv) may be redeemed by the Company at any time up to five
years after the issuance date for $1.30 per share plus accrued and unpaid dividends, and (v) has no voting rights except as provided
by Delaware law.
There
were no issuances, conversions or redemptions of Series A Preferred Stock during the years ended December 31, 2022 and December 31, 2021.
At December 31, 2022 and 2021, the Company had 0 and 0 shares of Series A Preferred Stock issued and outstanding, respectively.
b)
Series B Preferred Stock
The
Company has authorized 525,000 shares of Series B Preferred Stock. Each share of Series B Preferred Stock (i) pays a dividend of 5%,
payable at the discretion of the Company in cash or common stock, (ii) is convertible immediately after issuance into the Company’s
common stock at the lesser of $3,000 per share (as adjusted for the November 20, 2006 1 for 10, the April 8, 2009 1 for 300 and the July
12, 2012 1 for 200 reverse stock splits) or 75% of the average closing bid prices over the 20 trading days immediately preceding the
date of conversion, (iii) has a liquidation preference of $1.00 per share, (iv) may be redeemed by the Company at any time up to five
years after the issuance date for $1.30 per share plus accrued and unpaid dividends, and (v) has no voting rights except as provided
by Delaware law.
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE
M – PREFERRED STOCK (continued)
There were no issuances, conversions or redemptions
of Series B Preferred Stock during the years ended December 31, 2022 and December 31, 2021. At December 31, 2022 and 2021, the Company
had 159,666 and 159,666 shares of Series B Preferred Stock issued and outstanding, respectively.
Based
upon the Company’s evaluation of the terms and conditions of the Series B Preferred Stock, the embedded conversion feature related
to the Series B Preferred Stock was afforded the exemption as a conventional convertible instrument due to certain variabilities in the
conversion price and met the conditions for equity classification. However, the Company is required to bifurcate the embedded conversion
feature and carry it as a derivative liability.
The Company estimated the fair value of the compound
derivative using a common stock equivalent and the current share price of the Company’s common stock. As a result of this estimate,
the Company’s valuation model resulted in a compound derivative balance associated with the Series B Preferred Stock of $145,763
and $177,743 as of December 31, 2022 and 2021, respectively. These amounts are included as a derivative liability on the Company’s
consolidated balance sheet. Fair value adjustments of $31,980 and $248,033 were credited (charged) to derivative income (expense) for
the years ended December 31, 2022 and 2021, respectively.
c)
Series C Preferred Stock
The
Company has authorized 500,000 shares of Series C Preferred Stock. During 2007, the Company initiated a private offering under Regulation
D of the Securities Act of 1933 (the “Private Offering”), of an aggregate 500,000 units (collectively referred to as the
“Units”) at a price of $1.00 per Unit, with each Unit consisting of one share of Series C Preferred Stock convertible at
the lesser of 85% of the average closing bid price of the common stock over the 20 trading days immediately preceding the date of conversion,
or $0.04 per share and stock purchase warrants equal to the number of shares of common stock converted from the Series C Preferred Stock,
exercisable at $0.06 per share and which expire five years from the conversion date.
There were no issuances, conversions or redemptions
of Series C Preferred Stock during the years ended December 31 2022 and 2021. At December 31, 2022 and 2021, the Company had 0 and 0 shares
of Series C Preferred Stock issued and outstanding, respectively.
d)
Series D Preferred Stock
On
November 10, 2011, the Board approved by unanimous written consent an amendment to the Company’s Certificate of Incorporation to
designate the rights and preferences of Series D Preferred Stock. There are 500,000 shares of Series D Preferred Stock authorized with
a par value of $0.001. Each share of Series D Preferred Stock has a stated value equal to $1.00. These preferred shares rank higher than
all other securities. Each outstanding share of Series D Preferred Stock shall be convertible into the number of shares of the Company’s
common stock determined by dividing the stated value by the conversion price which is defined as 85% of the average closing bid price
of the common stock over the twenty trading days immediately preceding the date of conversion, but no less than par value of the common
stock. Mandatory conversion can be demanded by the Company prior to October 1, 2013. Each share of the Series D Preferred Stock shall
have voting rights equal to 100,000 votes of common stock.
There were no issuances, conversions or redemptions
of Series D Preferred Stock during the years ended December 31, 2022 and 2021. At December 31, 2022 and 2021, there were 100,000 and 100,000
shares of Series D Preferred Stock issued and outstanding, respectively.
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE
M – PREFERRED STOCK (continued)
Based
upon the Company’s evaluation of the terms and conditions of the Series D Preferred Stock, the embedded conversion feature related
to the Series D Preferred Stock was afforded the exemption as a conventional convertible instrument due to certain variabilities in the
conversion price and met the conditions for equity classification. However, the Company is required to bifurcate the embedded conversion
feature and carry it as a derivative liability.
The Company estimated the fair value of the
compound derivative using a common stock equivalent and the current share price of the Company’s common stock. As a result of
this estimate, the Company’s valuation model resulted in a compound derivative balance associated with the Series D Preferred
Stock of $197,877 and
$396,956 as
of December 31, 2022 and 2021, respectively. These amounts are included as a derivative liability on the Company’s
consolidated balance sheet. Fair value adjustments of $199,079
and ($196,956)
were credited (charged) to derivative income (expense) for the years ended December 31, 2022 and 2021, respectively.
e)
Series E Preferred Stock
On
March 9, 2012, the Company filed the Certificate of Designation of the Rights and Preferences of Series E Preferred Stock of the Company
with the Delaware Secretary of the State pursuant to which the Company set forth the designation, powers, rights, privileges, preferences
and restrictions of 1,000,000 authorized shares of Series E Preferred Stock, par value $0.001 per share. The Series E Preferred Stock
is convertible into common stock at 50% of the lowest closing bid price of the common stock over the 20 days immediately prior to the
date of conversion, but no less than the par value of the common stock.
There were no issuances, conversions or redemptions
of Series E Preferred Stock during the years ended December 31, 2022 and 2021. At December 31, 2022 and 2021, there were 821,377 and 791,567
shares of Series E Preferred Stock issued and outstanding, respectively.
Based
upon the Company’s evaluation of the terms and conditions of the Series E Preferred Stock, the embedded conversion feature related
to the Series E Preferred Stock was afforded the exemption as a conventional convertible instrument due to certain variabilities in the
conversion price and met the conditions for equity classification. However, the Company is required to bifurcate the embedded conversion
feature and carry it as a derivative liability.
The Company estimated the fair value of the compound
derivative using a common stock equivalent and the current share price of the Company’s common stock. As a result of this estimate,
the Company’s valuation model resulted in a compound derivative balance associated with the Series E Preferred Stock of $1,625,314
and $2,469,349
as of December 31, 2022 and 2021, respectively. These amounts are included as a derivative liability on the Company’s consolidated
balance sheet. Fair value adjustments of $844,035
and ($1,080,527)
were credited (charged) to derivative income (expense) for the years ended December 31, 2022 and 2021, respectively.
f)
Series F Preferred Stock
On
October 4, 2013, the Company filed the certificate of designation pursuant to which the Company set forth the designation, powers, rights,
privileges, preferences and restrictions of 500,000 authorized shares of Series F Preferred Stock, par value $0.001 per share.
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE
M – PREFERRED STOCK (continued)
The
shares of Series F Preferred Stock have a stated value of $1.00, have no voting rights, are entitled to no dividends due or payable and
are convertible into the number of shares of the Company’s common stock determined by dividing the stated value by the conversion
price, which is defined as 85% of the average closing bid price of the common stock over the five trading days immediately preceding
the date of conversion, but no less than the par value of the common stock. At any time after the issuance date through the fifth anniversary
of the issuance of the Series F Preferred Stock, the Company shall have the option to redeem any unconverted shares at an amount equal
to 130% of the stated value of the Series F Preferred Stock plus accrued and unpaid dividends, if any. Redemption shall be established
by the Company in its sole and absolute discretion and no holder of Series F Preferred Stock may demand that the Series F Preferred Stock
be redeemed.
There were no issuances, conversions or redemptions
of Series F Preferred Stock during the years ended December 31, 2022 and 2021. At December 31, 2022 and 2021, the Company had 190,000
and 180,000 shares of Series F Preferred Stock issued and outstanding, respectively.
Based
upon the Company’s evaluation of the terms and conditions of the Series F Preferred Stock, the embedded conversion feature related
to the Series F Preferred Stock was afforded the exemption as a conventional convertible instrument due to certain variabilities in the
conversion price and met the conditions for equity classification. However, the Company is required to bifurcate the embedded conversion
feature and carry it as a derivative liability
The Company estimated the fair value of the compound
derivative using a common stock equivalent and the current share price of the Company’s common stock. As a result of this estimate,
the Company’s valuation model resulted in a compound derivative balance associated with the Series F Preferred Stock of $375,966
and $754,217
as of December 31, 2022 and 2021, respectively. These amounts are included as a derivative liability on the Company’s consolidated
balance sheet. Fair value adjustments of $378,251
and ($374,217)
were credited (charged) to derivative income (expense) for the years ended December 31, 2022 and 2021, respectively.
g)
Series G Preferred Stock
On
April 17, 2014, the Company filed the certificate of designation pursuant to which the Company set forth the designation, powers, rights,
privileges, preferences and restrictions of 500,000 authorized shares of Series G Preferred Stock, par value $0.001 per share.
The
shares of Series G Preferred Stock have a stated value of $1.00, have voting rights equal to 5,000,000 votes of common stock, are entitled
to no dividends due or payable, are non-redeemable, and are convertible into the number of shares of the Company’s common stock
determined by dividing the stated value by the conversion price, which is defined as 85% of the average closing bid price of the common
stock over the twenty trading days immediately preceding the date of conversion, but no less than par value of the common stock.
There were no issuances, conversions or redemptions
of Series G Preferred Stock during the years ended December 31, 2022 and 2021. At December 31, 2022 and 2021, the Company had 25,000 and
25,000 shares of Series G Preferred Stock issued and outstanding, respectively.
Based
upon the Company’s evaluation of the terms and conditions of the Series G Preferred Stock, the embedded conversion feature related
to the Series G Preferred Stock was afforded the exemption as a conventional convertible instrument due to certain variabilities in the
conversion price and met the conditions for equity classification. However, the Company is required to bifurcate the embedded conversion
feature and carry it as a derivative liability.
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE
M – PREFERRED STOCK (continued)
The Company estimated the fair value of the compound
derivative using a common stock equivalent and the current share price of the Company’s common stock. As a result of this estimate,
the Company’s valuation model resulted in a compound derivative balance associated with the Series G Preferred Stock of $49,469
and $99,239 as of December 31, 2022 and 2021, respectively. These amounts are included as a derivative liability on the Company’s
consolidated balance sheet. Fair value adjustments of $49,770 and ($49,239) were credited (charged) to derivative income (expense) for the years
ended December 31, 2022 and 2021, respectively.
NOTE
N – COMMON STOCK AND TREASURY STOCK
Common
Stock
The Company is authorized to issue up to 35,000,000,000
shares of $0.0001 par value common stock, of which 18,643,205,254 and 17,403,876,165 shares were outstanding as of December 31, 2022 and
2021, respectively.
Issuances
during the year ended December 31, 2022:
On
January 21, 2022, the Company issued 206,896,552 shares of common stock to a consultant for accrued consulting fees in connection with
negotiating and arranging for the entry by the Company into a Mutual Release and Settlement Agreement with Y.A. Global Investments, LP
dated July 19, 2021.
On
January 21, 2022, the Company issued its sole officer and director, Lloyd Spencer, 428,571,428 shares of common stock for past due compensation
in the amount of $150,000.
On
February 14, 2022, the Company issued 83,333,334
shares of common stock to Salvum Corporation as per the terms of the Memorandum of Understanding to an Interim Joint Product
Development and Sales Representation Agreement dated January 11, 2022 (see Note A, Production Agreement).
On
February 14, 2022, the Company issued its sole officer and director, Lloyd Spencer, 30,000,000 shares of common stock as compensation
for serving on the Board of Directors of CarbonMeta Research Ltd.
On
February 14, 2022, the Company issued a total of 90,000,000 shares (30,000,000 shares each) of common stock to three other individuals
as compensation for serving on the Board of Directors of CarbonMeta Research Ltd.
On
February 17, 2022, the Company issued 160,000,000 shares of its common stock to Ecomena Limited (an entity located in the United Kingdom)
pursuant to a License of Agreement dated December 2,
2021 between Ecomena Limited and CarbonMeta Technologies, Inc. (see Note A, License Agreements).
On
March 7, 2022, the Company issued 33,000,000 shares of its common stock to Lloyd Spencer in connection with a $66,000 convertible note
financing.
On
March 21, 2022, the Company issued 27,500,000 shares of its common stock to Tangiers Investment Group, LLC in connection with a $55,000
convertible note financing.
On
April 4, 2022, the Company issued 20,000,000 shares of its common stock to Bill Elder, a third-party contractor, as compensation for
his business development services.
On
May 10, 2022, the Company issued 16,527,775 shares of its common stock to MacRab, LLC in connection with a $33,056 convertible note financing.
On
July 14, 2022, the Company issued 25,000,000 shares of its common stock to BHP Capital NY, Inc. in connection with a $25,000 convertible
note financing.
On
July 14, 2022, the Company issued 25,000,000 shares of its common stock to Quick Capital, LLC in connection with a $25,000 convertible
note financing.
On
August 4, 2022, the Company issued 25,000,000 shares of its common stock to RPG Capital Partners, Inc. in connection with a $25,000 convertible
note financing.
On
September 12, 2022, the Company issued 15,000,000 shares of its common stock to RPG Capital Partners, Inc. in connection with a $15,000
convertible note financing.
On
November 7, 2022, the Company issued 2,500,000 shares of its common stock to RPG Capital Partners, Inc. in connection with a $2,500 convertible
note financing.
On
November 16, 2022, the Company issued 17,000,000 shares of its common stock to the Robert Papiri Defined Benefit Plan in connection with
a $10,000 convertible note financing.
Issuances
during the year ended December 31, 2021:
On
March 9, 2021, the Company issued 7,500,000,000 shares of its common stock to its sole officer and director, Lloyd Spencer, as compensation
for accrued wages of $750,000 for fiscal years 2016, 2017, 2018, 2019 and 2020.
On
May 28, 2021, the Company issued 400,315,100 shares of common stock to a noteholder (Tangiers Investment Group, LLC) in satisfaction
of $17,000 principal and $23,032 interest.
On
June 4, 2021, the Company’s sole officer and director, Lloyd Spencer, returned 7,500,000,000 shares of common stock previously
issued to Mr. Spencer on March 9, 2021 (see second preceding paragraph) for accrued compensation so that the shares may be used for future
business transactions.
On
August 10, 2021, the Company issued 250,000,000 shares of common stock to a noteholder (Y.A. Global Investments, LP) in satisfaction
of $25,000 principal against a convertible note.
On
September 14, 2021, the Company issued 250,000,000 shares of common stock to a noteholder (Tangiers Investment Group, LLC) in satisfaction
of $25,000 principal against a convertible note.
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE N – COMMON STOCK AND TREASURY STOCK (continued)
On
September 24, 2021, the Company issued 666,666,666 shares of common stock to a noteholder (YA Global Investments, LP) in satisfaction
of $200,000 principal against a convertible note.
On
September 27, 2021, the Company issued 666,666,666 shares of common stock to a noteholder (YA Global Investments, LP) in satisfaction
of $200,000 principal against a convertible note.
On
October 7, 2021, the Company issued 458,333,333 shares of common stock to a noteholder (YA Global Investments, LP) in satisfaction of
$137,500 principal against a convertible note.
On
October 13, 2021, the Company issued 458,333,335 shares of common stock to a noteholder (YA Global Investments, LP) in satisfaction of
$137,500 principal against a convertible note.
On
October 21, 2021, the Company issued 200,000,000 shares of common stock to an investor for shares purchased through the Company’s
Regulation 1-A offering at $0.0005 per share.
On
October 22, 2021, the Company issued 120,000,000 shares of common stock to an investor for shares purchased through the Company’s
Regulation 1-A offering at $0.0005 per share.
On
October 22, 2021, the Company issued 20,000,000 shares of common stock to an investor for shares purchased through the Company’s
Regulation 1-A offering at $0.0005 per share.
On
November 4, 2021, the Company issued 200,000,000 shares of common stock to an investor for shares purchased through the Company’s
Regulation 1-A offering at $0.0005 per share.
On
November 10, 2021, the Company issued 100,000,000 shares of common stock to an investor for shares purchased through the Company’s
Regulation 1-A offering at $0.0005 per share.
On
November 12, 2021, the Company issued 100,000,000 shares of common stock to an investor for shares purchased through the Company’s
Regulation 1-A offering at $0.0005 per share.
Treasury
Stock
As
of December 31, 2022 and 2021, the Company held 188,181,000 shares of common stock in treasury.
NOTE
O – STOCK OPTIONS AND WARRANTS
At
December 31, 2022, the Company has outstanding a total of 1,146,000,000 warrants/options to the persons and upon the terms below:
SCHEDULE
OF WARRANTS/OPTIONS ISSUED
| Name | |
Date of Issuance | |
Shares upon Exercise of warrants or options | | |
Exercise Price | | |
Expiration Date |
| Lloyd Spencer (i) | |
March 7, 2022 | |
| 165,000,000 | | |
$ | 0.0002 | | |
March 7, 2027 |
| Tangiers Investment Group, LLC (ii) | |
March 21, 2022 | |
| 125,000,000 | | |
$ | 0.0004 | | |
March 21, 2027 |
| J.H. Darbie & Co., Inc. (iii) | |
March 28, 2022 | |
| 19,125,000 | | |
$ | 0.0004 | | |
March 28, 2027 |
| MacRab LLC (iv) | |
April 14, 2022 | |
| 500,000,000 | | |
$ | 0.0004 | | |
April 14, 2027 |
| MacRab LLC (v) | |
May 10, 2022 | |
| 74,375,000 | | |
$ | 0.0004 | | |
May 10, 2027 |
| BHP Capital NY Inc. (vi) | |
July 14, 2022 | |
| 62,500,000 | | |
$ | 0.0004 | | |
July 14, 2027 |
| Quick Capital LLC (vii) | |
July 14, 2022 | |
| 62,500,000 | | |
$ | 0.0004 | | |
July 14, 2027 |
| Robert Papiri Defined Benefit Plan (viii) | |
July 15, 2022 | |
| 25,000,000 | | |
$ | 0.0004 | | |
July 15, 2027 |
| Robert Papiri Defined Contribution Plan(ix) | |
July 15, 2022 | |
| 6,250,000 | | |
$ | 0.0004 | | |
July 15, 2027 |
| RPG Capital Partners Inc. (x) | |
July 15, 2022 | |
| 6,250,000 | | |
$ | 0.0004 | | |
July 15, 2027 |
| RPG Capital Partners Inc. (xi) | |
August 4, 2022 | |
| 62,500,000 | | |
$ | 0.0004 | | |
August 4, 2027 |
| RPG Capital Partners Inc. (xii) | |
Sept 12, 2022 | |
| 37,500,000 | | |
$ | 0.0004 | | |
Sept 12, 2027 |
| Total | |
| |
| 1,146,000,000 | | |
| | | |
|
| (i) |
On March 7, 2022, the Company
issued Lloyd Spencer (the “Holder”) a Fixed Convertible Promissory Note (the “Note”) in the amount of $66,000.
The Note has a term of one (1) year (Maturity date of March 7, 2023) and bears interest at 12% annually. The Note is convertible,
in whole or in part, at any time and from time to time before maturity at the option of the Holder at the Fixed Conversion Price
of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to the lower of 16% per annum or
the highest rate permitted by law. The transaction closed on March 7, 2022. In connection with this note, the Holder was issued warrants
to purchase 165,000,000 shares of the Company’s Common Stock at $0.0004 per share. |
| |
|
| (ii) |
On March 21, 2022, the
Company issued Tangiers Investment Group, LLC (the “Holder”) a Fixed Convertible Promissory Note (the “Note”)
in the amount of $55,000. The Note has a term of one (1) year (Maturity date of March 21, 2023) and bears interest at 12% annually.
The Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the Holder at the
Fixed Conversion Price of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to the lower
of 16% per annum or the highest rate permitted by law. The transaction closed on March 21, 2022. In connection with this note, the
Holder was issued warrants to purchase 125,000,000 shares of the Company’s Common Stock at $0.0004 per share. |
| |
|
| (iii) |
On February 23, 2022, the
Company and J.H. Darbie & Co., Inc. (“Darbie”) entered into a Placement Agent Agreement (the “Agreement”).
Under the terms of the Agreement, Darbie was issued warrants to purchase 19,125,000 shares of the Company’s common stock at
$0.0004 per share. |
| |
|
| (iv) |
On April 14, 2022, the
Company and MacRab, LLC (the “Investor”) entered into a Standby Equity Commitment Agreement (the “Agreement”)
whereby the Company shall issue and sell to the Investor, from time to time, up to $5,000,000 of the Company’s common stock.
Under the terms of the Agreement, the Purchase Price of the Company’s common stock shall be 88% of the Market Price on the
date the Purchase Price is calculated. The Market Price shall mean the average of the two lowest volume weighted average prices of
the Company’s common stock during the Valuation Period. The transaction closed on April 14, 2022. In connection with this note,
the Holder was issued warrants to purchase 500,000,000 shares of the Company’s Common Stock at $0.0004 per share. |
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE
O – STOCK OPTIONS AND WARRANTS (continued)
| (v) |
On May 10, 2022, the Company
issued MacRab, LLC (the “Holder”) a Fixed Convertible Promissory Note (the “Note”) in the amount of $33,056.
The Note has a term of one (1) year (Maturity date of May 10, 2023) and bears interest at 12% annually. The Note is convertible,
in whole or in part, at any time and from time to time before maturity at the option of the Holder at the Fixed Conversion Price
of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to the lower of 16% per annum or
the highest rate permitted by law. The transaction closed on May 10, 2022. In connection with this Note, the Holder was issued five-year
warrants to purchase 74,375,000 shares of common stock at an exercise price of $0.0004 per share and 16,527,775 shares of common
stock as commitment shares. |
| (vi) |
On July 14, 2022, the Company
issued BHP Capital NY Inc. (the “Holder”) a Fixed Convertible Promissory Note (the “Note”) in the principal
amount of $25,000. The Note has a term of one (1) year (Maturity date of July 14, 2023) and bears interest at 12% annually. The Note
is convertible, in whole or in part, at any time and from time to time before maturity at the option of the Holder at the Fixed Conversion
Price of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to the lower of 16% per annum
or the highest rate permitted by law. In connection with this note, the Holder was issued five-year warrants to purchase 62,500,000
shares of the Company’s common stock at an exercise price of $0.0004 per share. In addition, the Holder and the Company entered
into a Registration Rights Agreement (“RRA”) whereby the Company agreed to register 212,500,000 shares of its common
stock within 30 days of entry into the RRA for the benefit of the Holder. |
| |
|
| (vii) |
On July 14, 2022, the Company
issued Quick Capital, LLC (the “Holder”) a Fixed Convertible Promissory Note (the “Note”) in the principal
amount of $25,000. The Note has a term of one (1) year (Maturity date of July 14, 2023) and bears interest at 12% annually. The Note
is convertible, in whole or in part, at any time and from time to time before maturity at the option of the Holder at the Fixed Conversion
Price of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to the lower of 16% per annum
or the highest rate permitted by law. In connection with this note, the Holder was issued five-year warrants to purchase 62,500,000
shares of the Company’s common stock at an exercise price of $0.0004 per share. In addition, the Holder and the Company entered
into a Registration Rights Agreement (“RRA”) whereby the Company agreed to register 212,500,000 shares of its common
stock within 30 days of entry into the RRA for the benefit of the Holder. |
| |
|
| (viii) |
On July 15, 2022, the Company
issued the Robert Papiri Defined Benefit Plan (the “Holder”) a Fixed Convertible Promissory Note (the “Note”)
in the principal amount of $10,000. The Note has a term of one (1) year (Maturity date of July 15, 2023) and bears interest at 12%
annually. The Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the Holder
at the Fixed Conversion Price of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to
the lower of 16% per annum or the highest rate permitted by law. In connection with this note, the Holder was issued five-year warrants
to purchase 25,000,000 shares of the Company’s common stock at an exercise price of $0.0004 per share. In addition, the Holder
and the Company entered into a Registration Rights Agreement (“RRA”) whereby the Company agreed to register 85,000,000
shares of its common stock within 30 days of entry into the RRA for the benefit of the Holder. |
| (ix) |
On July 15, 2022, the Company
issued the Robert Papiri Defined Contribution Plan (the “Holder”) a Fixed Convertible Promissory Note (the “Note”)
in the principal amount of $2,500. The Note has a term of one (1) year (Maturity date of July 15, 2023) and bears interest at 12%
annually. The Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the Holder
at the Fixed Conversion Price of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to
the lower of 16% per annum or the highest rate permitted by law. In connection with this note, the Holder was issued five-year warrants
to purchase 6,250,000 shares of the Company’s common stock at an exercise price of $0.0004 per share. In addition, the Holder
and the Company entered into a Registration Rights Agreement (“RRA”) whereby the Company agreed to register 21,250,000
shares of its common stock within 30 days of entry into the RRA for the benefit of the Holder. |
| |
|
| (x) |
On July 15, 2022, the Company
issued the RGP Capital Partners, Inc. (the “Holder”) a Fixed Convertible Promissory Note (the “Note”) in
the principal amount of $2,500. The Note has a term of one (1) year (Maturity date of July 15, 2023) and bears interest at 12% annually.
The Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the Holder at the
Fixed Conversion Price of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to the lower
of 16% per annum or the highest rate permitted by law. In connection with this note, the Holder was issued five-year warrants to
purchase 6,250,000 shares of the Company’s stock at an exercise price of $0.0004 per share. In addition, the Holder and the
Company entered into a Registration Rights Agreement (“RRA”) whereby the Company agreed to register 21,250,000 shares
of its common stock within 30 days of entry into the RRA for the benefit of the Holder. |
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE
O – STOCK OPTIONS AND WARRANTS (continued)
| (xi) |
On August 4, 2022, the
Company issued the RGP Capital Partners, Inc. (the “Holder”) a Fixed Convertible Promissory Note (the “Note”)
in the principal amount of $25,000. The Note has a term of one (1) year (Maturity date of July 27, 2023) and bears interest at 12%
annually. The Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the Holder
at the Fixed Conversion Price of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to
the lower of 16% per annum or the highest rate permitted by law. In connection with this note, the Holder was issued five-year warrants
to purchase 62,500,000 shares of the Company’s common stock at an exercise price of $0.0004 per share. In addition, the Holder
and the Company entered into a Registration Rights Agreement (“RRA”) whereby the Company agreed to register 212,500,000
shares of its common stock within 30 days of entry into the RRA for the benefit of the Holder. |
| |
|
| (xii) |
On September 12, 2022,
the Company issued the RGP Capital Partners, Inc. (the “Holder”) a Fixed Convertible Promissory Note (the “Note”)
in the principal amount of $15,000. The Note has a term of one (1) year (Maturity date of September 12, 2023) and bears interest
at 12% annually. The Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of
the Holder at the Fixed Conversion Price of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate
equal to the lower of 16% per annum or the highest rate permitted by law. In connection with this note, the Holder was issued five-year
warrants to purchase 37,500,000 shares of the Company’s common stock at an exercise price of $0.0004 per share. In addition,
the Holder and the Company entered into a Registration Rights Agreement (“RRA”) whereby the Company agreed to register
212,500,000 shares of its common stock within 30 days of entry into the RRA for the benefit of the Holder. |
NOTE
P – COMMITMENTS AND CONTINGENCIES
Employment
Agreement with Chief Executive Officer
On
May 13, 2006, the Company executed an Employment Agreement (the “Agreement”) with Lloyd Spencer for Spencer to serve as the
Company’s Chief Executive Officer. The Agreement provides for a 5-year term of employment to May 15, 2011 and the automatic renewal
of successive one year periods unless terminated and provides for compensation to Spencer of $12,500 per month. Either party may terminate
the Agreement provided more than 60 days prior written notice is given the other party. If the Company terminates Spencer without Just
Cause or Spencer terminates employment with Good Reason, Spencer will be entitled to accrued but unpaid salary and benefits through the
date of termination and shall receive a severance payment equal to one month’s current salary for each full year of employment,
with a minimum severance payment of three months and a maximum of six months’ pay. If Spencer is terminated for Just Cause or resigns
without Good Reason, Spencer will be entitled only to salary and benefits accrued but unpaid through the date of termination and shall
receive no amount for severance.
For the years ended December 31, 2022 and 2021, chief
executive officer compensation expense was $150,000 and $150,000, respectively. As of December 31, 2022 and 2021, the accrued chief executive
officer compensation liability was $874,500 and $874,500, respectively.
Major
Customer
For the year ended December 31, 2022, one customer (located in Spain) accounted for 100% of contract services revenue.
NOTE
Q – INCOME TAXES
The
Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes (“ASC 740”), which requires the recognition
of deferred tax liabilities and assets at currently enacted tax rates for the expected future tax consequences of events that have been
included in the consolidated financial statements or tax returns. A valuation allowance is recognized to reduce the net deferred tax
asset to an amount that is more likely than not to be realized.
ASC
740 provides guidance on the accounting for uncertainty in income taxes recognized in a company’s financial statements. ASC 740
requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon
the technical merits of the position. If the more likely-than-not threshold is met, a company must measure the tax position to determine
the amount to recognize in the consolidated financial statements.
Net
deferred tax assets consist of the following components as of December 31, 2022 and 2021:
SCHEDULE
OF DEFERRED TAX ASSETS
| | |
2022 | | |
2021 | |
| | |
December 31, | |
| | |
2022 | | |
2021 | |
| Loss carryforwards | |
$ | 5,716,036 | | |
$ | 5,381,301 | |
| Valuation | |
| (5,716,036 | ) | |
| (5,381,301 | ) |
| Net deferred tax assets | |
$ | - | | |
$ | - | |
The
income tax provision differs from the amount of income tax determined by applying the estimated U.S. federal tax rate of 21 percent to
pretax income (loss) for the years ended December 31, 2022 and 2021 due to the following:
SCHEDULE
OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT)
| | |
2022 | | |
2021 | |
| | |
For the year ended | |
| | |
December 31, | |
| | |
2022 | | |
2021 | |
| Expected income tax (benefit) at 21% | |
$ | 84,091 | | |
$ | 1,736,479 | |
| Non-deductible (non-taxable) loss (gain) from derivative liability | |
| (472,063 | ) | |
| (2,060,082 | ) |
| Non-deductible stock-based compensation | |
| 16,800 | | |
| - | |
| Non-deductible amortization of debt discounts | |
| 36,437 | | |
| 803 | |
| Change in valuation allowance | |
| 334,735 | | |
| 322,800 | |
| Provision for income taxes | |
$ | - | | |
$ | - | |
At
December 31, 2022, the Company had net operating loss carry forwards of approximately $27,000,000, of which a total of approximately
$22,000,000 expires in varying amounts from 2027 to 2037. No tax benefit has been reported in the December 31, 2022 and December 31, 2021 consolidated financial
statements since the potential tax benefit is offset by a valuation allowance of the same amount. Due to the change in ownership provisions
of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations.
Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.
In
accordance with generally accepted accounting principles, the Company has analyzed its filing positions in all jurisdictions where it
is required to file income tax returns for the open tax years in such jurisdictions. The Company has identified its federal and state
income tax returns for the previous ten years remain subject to examination. The Company currently believes that all significant filing
positions are highly certain and that all of its significant income tax filing positions and deductions would be sustained upon audit.
Therefore, the Company has no significant reserves for uncertain tax positions, and no adjustments to such reserves were required by
generally accepted accounting principles. No interest or penalties have been levied against the Company and none are anticipated; therefore
no interest or penalty has been included in the provision for income taxes in the consolidated statements of operations.
CARBONMETA
TECHNOLOGIES, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
NOTE
R – SUBSEQUENT EVENTS
On
January 25, 2023, the Company issued 173,500,000 shares of its common stock to Lloyd Spencer in satisfaction of $34,700 principal against
the convertible note dated May 7, 2022.
On
February 15, 2023, the Company issued 155,833,562 shares of its common stock to BHP Capital NY, Inc. in satisfaction of $25,000 principal,
$2,500 accrued fees, $1,750 deposit fees and $1,917 interest against the convertible note dated October 15, 2021.
On
March 3, 2023, the Company issued 200,000,000 shares of its common stock to New to The Street Group, LLC as per the terms of the Production & Broadcasting Agreement dated February 24, 2022.
On
April 8, 2023, CarbonMeta Technologies, Inc. (the “Company”) and Fermion Electric Private Limited (“Fermion”)
signed a Memorandum of Understanding (MOU) to create a subsidiary corporation called CarbonMeta Research India as a Private Limited Company
that shall be jointly owned and managed by the Company and Fermion, and whose initial objective shall be processing natural gas into
hydrogen and high value carbon products.
Under
the terms of the MOU:
CarbonMeta
Research India will be a Private Limited Company in Kerala, India with initial equity ownership as follows:
| |
● |
80%
of the equity will be owned by CarbonMeta Technologies, Inc.; and |
| |
● |
20%
of the equity will be owned by Fermion Electric Private Limited. |
CarbonMeta
Research India will be a research and development center whose focus will be on:
| |
● |
Microwave
catalysis of waste plastics, natural gas, and other organic waste materials; |
| |
● |
Carbon
dioxide (CO2) capture technologies using novel technologies and adsorbents; |
| |
● |
Development
of new catalysts for catalysis, pyrolysis, and electrolysis; and |
| |
● |
Commercialize
and patent technologies that were developed and licensed by CarbonMeta Technologies, Inc. or its subsidiaries. |