UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2023

 

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

For the transition period from __________ to ___________

 

Commission file number: 333-222094

 

TPT Global Tech, Inc.

(Exact name of registrant as specified in its charter)

 

Florida

 

81-3903357

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

501 West Broadway, Suite 800

San Diego, CA

 

92101

(Address of principal executive offices)

 

(Zip Code)

 

(619) 301-4200

(Registrant’s telephone number, including area code)

 

______________________________________

(Former Address and phone of principal executive offices)

 

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

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

---

 

---

 

---

 

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

 

Yes

  ☒

 

No

  ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 for Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

 

Yes

  ☒

 

No

  ☐

 

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

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

 

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

 

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

 

Yes

 

 

No

  ☒

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

As of December 13, 2023, there were 2,154,412,687 shares of the registrant’s common stock, $0.001 par value, issued and outstanding.

 

 

 

 

TABLE OF CONTENTS

 

 

 

 

Page

 

 

PART 1 – FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

Item 1.

Financial Statements

 

3

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets – September 30, 2023 (Unaudited) and December 31, 2022

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations – Three and Nine months ended September 30, 2023 and 2022 (Unaudited)

 

5

 

 

 

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Deficit – Three and Nine months ended September 30, 2023 and 2022 (Unaudited)

 

6

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows – Nine months ended September 30, 2023 and 2022 (Unaudited)

 

7

 

 

 

 

 

 

 

Notes to the Condensed Consolidated Financial Statements (Unaudited)

 

9

 

 

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

35

 

 

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market RiskNot Applicable

 

37

 

 

 

 

 

 

Item 4.

Controls and Procedures

 

37

 

 

 

 

 

 

 

PART II- OTHER INFORMATION

 

 

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

38

 

 

 

 

 

 

Item 1A.

Risk FactorsNot Applicable

 

39

 

 

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

39

 

 

 

 

 

 

Item 3.

Defaults Upon Senior Securities

 

41

 

 

 

 

 

 

Item 4.

Mine Safety Disclosure Not Applicable

 

41

 

 

 

 

 

Item 5.

Other InformationNot Applicable

 

41

 

 

 

 

Item 6.

Exhibits

 

42

 

 

 

 

 

 

 

Signatures

 

43

 

 

 
2

Table of Contents

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

TPT Global Tech, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

ASSETS

 

 

 

September 30

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

 

(Unaudited)

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

 

 

$59,630

 

Accounts receivable, net

 

 

61,055

 

 

 

5,808

 

Accounts receivable – related party

 

 

 

 

 

265,273

 

Prepaid expenses and other current assets

 

 

18,570

 

 

 

20,813

 

Assets held for sale

 

 

 

 

 

616,263

 

Total current assets

 

 

79,625

 

 

 

967,787

 

NON-CURRENT ASSETS

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

1,226,000

 

 

 

2,455

 

Deposits and other assets

 

 

53,195

 

 

 

60,998

 

Total non-current assets

 

 

1,279,195

 

 

 

63,453

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$1,358,820

 

 

$1,031,240

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

CURRENT LIABILITIES

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$11,798,925

 

 

$10,084,058

 

Deferred revenue

 

 

146,351

 

 

 

75,556

 

Customer liability

 

 

338,725

 

 

 

338,725

 

Current portion of loans, advances and factoring agreements

 

 

1,002,559

 

 

 

902,809

 

Convertible notes payable, net of discounts

 

 

3,424,556

 

 

 

3,054,869

 

Notes payable - related parties, net of discounts

 

 

4,902,510

 

 

 

4,762,579

 

Convertible notes payable – related parties, net of discounts

 

 

553,100

 

 

 

553,100

 

Derivative liabilities

 

 

4,203,788

 

 

 

4,822,398

 

Current portion of operating lease liabilities

 

 

7,353,988

 

 

 

5,897,274

 

Financing lease liabilities – related party

 

 

731,830

 

 

 

710,776

 

Liabilities held for sale

 

 

 

 

 

717,414

 

Total current liabilities

 

 

34,456,332

 

 

 

31,919,558

 

 

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Loans, advances and factoring agreements, net of current portion and discounts

 

 

 

 

 

144,460

 

Operating lease liabilities, net of current portion

 

 

787,313

 

 

 

1,932,599

 

Total non-current liabilities

 

 

787,313

 

 

 

2,077,059

 

Total liabilities

 

 

35,243,645

 

 

 

33,996,617

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements.

 

 
3

Table of Contents

 

TPT Global Tech, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS - CONTINUED
 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

MEZZANINE EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

Convertible Preferred Series A, 1,000,000 designated - 1,000,000 shares issued and outstanding as of September 30, 2023 and December 31, 2022

 

 

42,983,742

 

 

 

42,983,742

 

Convertible Preferred Series B – 3,000,000 shares designated, 2,588,693 shares issued and outstanding as of September 30, 2023 and December 31, 2022

 

 

1,677,473

 

 

 

1,677,473

 

Convertible Preferred Series C – 3,000,000 shares designated, zero shares issued and outstanding as of September 30, 2023 and December 31, 2022

 

 

 

 

 

 

Convertible Preferred Series D, 10,000,000 designated – 46,649 shares issued and outstanding as of September 30, 2023 and December 31, 2022

 

 

244,592

 

 

 

244,592

 

Convertible Preferred Series E, 10,000,000 designated – 2,243,507 and 2,043,507 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

 

 

14,570,101

 

 

 

13,344,101

 

Total mezzanine equity

 

 

59,475,908

 

 

 

58,249,908

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

Common stock, $.001 par value, 4,500,000,000 shares authorized, 1,882,579,354 and 1,256,900,534 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

 

 

1,882,579

 

 

 

1,256,901

 

Subscriptions payable

 

 

40,435

 

 

 

26,910

 

Additional paid-in capital

 

 

14,946,692

 

 

 

13,966,895

 

Accumulated deficit

 

 

(109,549,957 )

 

 

(106,418,722 )

Total TPT Global Tech, Inc. stockholders' deficit

 

 

(92,680,251 )

 

 

(91,168,016 )

Non-controlling interests

 

 

(680,482 )

 

 

(47,269 )

Total stockholders’ deficit

 

 

(93,360,733 )

 

 

(91,215,285 )

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

$1,358,820

 

 

$1,031,240

 

 

See accompanying notes to condensed consolidated financial statements.

 

 
4

Table of Contents

 

  TPT Global Tech, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)  

 

 

 

For the three months ended

September 30,

 

 

For the nine months ended

September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

 

 

$

 

 

$

 

 

$82,000

 

Services

 

 

923,251

 

 

 

2,052,817

 

 

 

3,007,866

 

 

 

6,063,465

 

Total Revenues

 

 

923,251

 

 

 

2,052,817

 

 

 

3,007,866

 

 

 

6,145,465

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF SALES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Productss

 

 

 

 

 

 

 

 

 

 

 

27,882

 

Servicess

 

 

739,513

 

 

 

1,691,539

 

 

 

1,783,343

 

 

 

4,466,047

 

Total Costs of Sales

 

 

739,513

 

 

 

1,691,539

 

 

 

1,783,343

 

 

 

4,493,929

 

Gross profit (loss)

 

 

183,738

 

 

 

361,278

 

 

 

1,224,523

 

 

 

1,651,536

 

EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Professional

 

 

375,536

 

 

 

249,989

 

 

 

1,419,199

 

 

 

894,615

 

Payroll and related

 

 

455,063

 

 

 

572,574

 

 

 

1,478,320

 

 

 

1,823,527

 

General and administrative

 

 

587,831

 

 

 

489,663

 

 

 

1,418,044

 

 

 

1,358,560

 

Research and development

 

 

 

 

 

 

 

 

 

 

 

1,750,000

 

Depreciation

 

 

 

 

 

150,454

 

 

 

2,454

 

 

 

448,943

 

Amortization

 

 

 

 

 

164,057

 

 

 

 

 

 

492,171

 

Total expenses

 

 

1,418,430

 

 

 

1,626,737

 

 

 

4,318,017

 

 

 

6,767,816

 

Loss from operations

 

 

(1,234,692 )

 

 

(1,265,459 )

 

 

(3,093,494 )

 

 

(5,116,280 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative gain (expense)

 

 

1,015,764

 

 

 

102,903

 

 

 

367,881

 

 

 

491,301

 

Gain (loss) on debt extinguishment

 

 

133,850

 

 

 

397,008

 

 

 

466,380

 

 

 

(1,970,030 )

Interest expense

 

 

(412,735 )

 

 

(426,265 )

 

 

(1,340,412 )

 

 

(4,705,548 )

Other income (expense)

 

 

6,525

 

 

 

(53,206 )

 

 

380,493

 

 

 

(52,387 )

Total other income (expenses)

 

 

743,404

 

 

 

20,440

 

 

 

(125,658 )

 

 

(6,236,664 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss before income taxes

 

 

(491,288 )

 

 

(1,245,019 )

 

 

(3,219,152 )

 

 

(11,352,944 )

Income taxes

 

 

 

 

 

 

 

 

 

 

 

 

Net loss from continuing operations

 

 

(491,288 )

 

 

(1,245,019 )

 

 

(3,219,152 )

 

 

(11,352,944 )

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) from discontinued operations

 

 

107,639

 

 

 

 

 

 

(557 )

 

 

 

Gain on disposal of discontinued operations

 

 

126,101

 

 

 

 

 

 

126,101

 

 

 

 

Net income from discontinued operations

 

 

233,740

 

 

 

 

 

 

125,544

 

 

 

 

NET LOSS BEFORE NON-CONTROLLING INTERESTS

 

 

(257,548 )

 

 

(1,245,019 )

 

 

(3,093,608 )

 

 

(11,352,944

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS) INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS

 

 

84,632

 

 

 

(16,156 )

 

 

37,627

 

 

 

(6,633 )

DEEMED DIVIDEND RELATED TO MODIFICATION OF SERIES A PREFERRED STOCK

 

 

 

 

 

(39,866,742 )

 

 

 

 

 

(39,866,742 )

NET LOSS ATTRIBUTABLE TO TPT GLOBAL TECH, INC. SHAREHOLDERS

 

$(342,180 )

 

$(41,095,605 )

 

$(3,131,235 )

 

$(51,213,053 )

Loss per common share- Basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$(0.00 )

 

$(0.04 )

 

$(0.00 )

 

$(0.06 )

Discontinued operations

 

 

0.00

 

 

 

 

 

 

0.00

 

 

 

 

Loss per common share- Basic and diluted

 

$(0.00 )

 

$(0.04 )

 

$(0.00 )

 

$(0.06 )

Weighted average number of common shares outstanding - Basic and diluted

 

 

1,810,916,794

 

 

 

950,225,974

 

 

 

1,681,251,378

 

 

 

932,094,683

 

 

 See accompanying notes to condensed consolidated financial statements.

 

 
5

Table of Contents

 

TPT Global Tech, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

For the three and nine months ended September 30, 2023 and 2022

(Unaudited)

 

 

 

Common Stock

 

 

Subscriptions

 

 

Additional Paid-in

 

 

Accumulated

 

 

Non-Controlling

 

 

Total Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Payable

 

 

Capital

 

 

Deficit

 

 

 Interest

 

 

 Deficit

 

Balance as of  June 30, 2023

 

 

1,723,749,021

 

 

$1,723,749

 

 

$37,560

 

 

$14,907,994

 

 

$(109,207,777 )

 

$(761,908 )

 

$(93,300,382 )

Issuance of shares for services

 

 

53,830,333

 

 

 

53,830

 

 

 

1,100

 

 

 

30,698

 

 

 

 

 

 

 

 

 

85,628

 

Subscription payable for services

 

 

 

 

 

 

 

 

1,775

 

 

 

 

 

 

 

 

 

 

 

 

1,775

 

Disposition of IST

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,206 )

 

 

(3,206 )

Issuance of shares for exchange of debt

 

 

105,000,000

 

 

 

105,000

 

 

 

 

 

 

8,000

 

 

 

 

 

 

 

 

 

113,000

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(342,180 )

 

 

84,632

 

 

 

(257,548 )

Balance as of September 30, 2023

 

 

1,882,579,354

 

 

$1,882,579

 

 

$40,435

 

 

$14,946,692

 

 

$(109,549,957 )

 

$(680,482 )

 

$(93,360,733 )

 

 

 

Common Stock

 

 

Subscriptions

 

 

Additional Paid-in 

 

 

Accumulated  

 

 

Non-Controlling 

 

 

Total Stockholders’  

 

 

 

Shares

 

 

Amount

 

 

Payable

 

 

 Capital

 

 

Deficit

 

 

Interest

 

 

Deficit

 

Balance as of December 31, 2022

 

 

1,256,900,534

 

 

$1,256,901

 

 

$26,910

 

 

$13,966,895

 

 

$(106,418,722)

 

$(47,269)

 

$(91,215,285)

Issuance of shares for services

 

 

53,830,333

 

 

 

53,830

 

 

 

1,100

 

 

 

30,698

 

 

 

 

 

 

 

 

 

85,628

 

Subscription payable for services

 

 

 

 

 

 

 

 

12,425

 

 

 

 

 

 

 

 

 

 

 

 

12,425

 

Disposition of IST

 

 

 

 

 

 

 

 

 

 

 

 

 

—--

 

 

 

(3,206)

 

 

(3,206)

Issuance of shares for exchange for debt

 

 

571,848,487

 

 

 

571,848

 

 

 

 

 

 

345,240

 

 

 

 

 

 

 

 

 

917,088

 

Acquisition of Asberry 22 Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

 

603,859

 

 

 

 

 

 

 

(667,634)

 

 

(63,775)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,131,235)

 

 

37,627

 

 

 

(3,093,608)

Balance as of September 30, 2023

 

 

1,882,579,354

 

 

$1,882,579

 

 

$40,435

 

 

$14,946,692

 

 

$(109,549,957)

 

$(680,482)

 

$(93,360,733)

 

 

 

Common Stock

 

 

Subscriptions Payable

 

 

Additional Paid-in

 

 

Accumulated

 

 

Non-Controlling

 

 

Total Stockholders’

 

 

 

Shares

 

 

Amount

 

 

(Receivable)

 

 

 Capital

 

 

Deficit

 

 

Interest

 

 

Deficit

 

Balance as of June 30, 2022

 

 

923,029,038

 

 

$923,029

 

 

$16,260

 

 

$12,860,873

 

 

$(55,039,285 )

 

$78,825

 

 

$(41,160,298 )

Common stock issued for services or subscription payable

 

 

 

 

 

 

 

 

5,325

 

 

 

 

 

 

 

 

 

 

 

 

5,325

 

Debt conversion to common stock

 

 

105,149,600

 

 

 

105,150

 

 

 

 

 

 

425,719

 

 

 

 

 

 

 

 

 

530,869

 

Modification of Series A Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(39,866,742 )

 

 

 

 

 

 

(39,866,742 )

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,228,863 )

 

 

(16,156 )

 

 

(1,245,019 )

Balance as of September 30, 2022

 

 

1,028,178,638

 

 

$1,028,179

 

 

$21,585

 

 

$13,286,592

 

 

$(96,134,890 )

 

$62,669

 

 

$(81,735,865 )

 

 

 

Common Stock

 

 

Subscriptions Payable

 

 

Additional Paid-in

 

 

Accumulated

 

 

Non-Controlling

 

 

Total Stockholders’

 

 

 

Shares

 

 

Amount

 

 

(Receivable)

 

 

 Capital

 

 

Deficit

 

 

Interest

 

 

Deficit

 

Balance as of December 31, 2021

 

 

923,029,038

 

 

$923,029

 

 

$5,610

 

 

$12,860,873

 

 

$(44,921,837 )

 

$69,302

 

 

$(31,063,023 )

Common stock issued for services or subscription payable

 

 

 

 

 

 

 

 

15,975

 

 

 

 

 

 

 

 

 

 

 

 

15,975

 

Debt conversion to common stock

 

 

105,149,600

 

 

 

105,150

 

 

 

 

 

 

425,719

 

 

 

 

 

 

 

 

 

530,869

 

Modification of Series A Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(39,866,742 )

 

 

 

 

 

 

(39,866,742 )

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,346,311 )

 

 

(6,633 )

 

 

(11,352,944 )

Balance as of September 30, 2022

 

 

1,028,178,638

 

 

$1,028,179

 

 

$21,585

 

 

$13,286,592

 

 

$(96,134,890 )

 

$62,669

 

 

$(81,735,865 )

 

See accompanying notes to condensed consolidated financial statements.

 

 
6

Table of Contents

 

TPT Global Tech, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) 

 

 

 

For the nine months ended September 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$(3,093,608 )

 

$(11,352,944 )

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Net income from discontinued operations

 

 

125,544

 

 

 

 

Depreciation

 

 

2,454

 

 

 

448,943

 

Amortization

 

 

 

 

 

492,171

 

Amortization of debt discounts

 

 

694,938

 

 

 

3,593,957

 

Convertible Note payable issued for Asberry Series A Stock

 

 

508,553

 

 

 

 

Note payable issued for research and development

 

 

 

 

 

1,550,000

 

Derivative expense (gain)

 

 

(367,881 )

 

 

(491,301 )

Gain (loss) on extinguishment of debt

 

 

(466,380 )

 

 

1,970,030

 

Loss on disposition of property and equipment

 

 

 

 

 

124,849

 

Share-based compensation: Common stock

 

 

98,053

 

 

 

15,975

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(55,247 )

 

 

(193,973 )

Accounts receivable – related party

 

 

 

 

 

 

 

Prepaid expenses and other assets

 

 

271,766

 

 

 

(81,881 )

Deposits and other assets

 

 

7,804

 

 

 

186,198

 

Accounts payable and accrued expenses

 

 

1,696,700

 

 

 

1,633,792

 

Net change in operating lease right of use assets and liabilities

 

 

311,428

 

 

 

2,218,444

 

Other liabilities

 

 

70,795

 

 

 

(377,573 )

Net cash used in operating activities from continuing operations

 

 

(446,169 )

 

 

(263,313 )

Net cash provided by operating activities from discontinued operations

 

 

4,034

 

 

 

Net cash used in operating activities

 

 

(442,135 )

 

 

(263,313 )

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of equipment

 

 

 

 

 

(16,297 )

Net cash used in investing activities

 

 

 

 

 

(16,297 )

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from convertible notes, loans and advances

 

 

358,500

 

 

 

1,256,187

 

Payment on convertible loans, advances and factoring agreements

 

 

(83,221 )

 

 

(1,391,580 )

Proceeds from notes payable – related parties

 

 

139,931

 

 

 

 

Payments on convertible notes and amounts payable – related parties

 

 

 

 

 

(39,664 )

Net cash provided by financing activities from continuing operations

 

 

415,210

 

 

 

(175,057 )

       Net cash used in financing activities from discontinued operations

 

 

 (32,705)

 

 

 

 

 

       Net cash provided by financing activities

 

 

 382,505

 

 

 

  

 

Net change in cash

 

 

(59,630 )

 

 

(454,667 )

Cash and cash equivalents - beginning of period

 

 

59,630

 

 

 

518,066

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents - end of period

 

$

 

 

$59,630

 

 

See accompanying notes to condensed consolidated financial statements.

 

 
7

Table of Contents

 

TPT Global Tech, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED 

(Unaudited)

 

Supplemental Cash Flow Information:

 

Cash paid for:  

 

 

 

2023

 

 

2022

 

Interest

 

$49,762

 

 

$8,384

 

Taxes

 

$

 

 

$

 

 

Non-Cash Investing and Financing Activities:  

 

 

 

2023

 

 

2022

 

Debt discount on factoring agreement

 

$489,089

 

 

 

1,070,591

 

Series E Preferred Stock issued in exchange for debt and payables

 

$

 

 

$13,344,101

 

Common Stock issued for conversion of notes payable

 

$917,088

 

 

$530,869

 

Series E Stock issued for property acquisition

 

$1,226,000

 

 

 

 

Deemed dividend related to modification of Series A Preferred Stock

 

$

 

 

 

39,866,742

 

Acquisition of net liabilities of Asberry 22 Holdings, Inc.

 

$63,775

 

 

$

 

 

See accompanying notes to condensed consolidated financial statements.

 

 
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Table of Contents

 

TPT Global Tech, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

 

NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Nature of Operations

 

The Company was originally incorporated in 1988 in the state of Florida. TPT Global, Inc., a Nevada corporation formed in June 2014, merged with Ally Pharma US, Inc., a Florida corporation, (“Ally Pharma”, formerly known as Gold Royalty Corporation) in a “reverse merger” wherein Ally Pharma issued 110,000,000 shares of Common Stock, or 80% ownership, to the owners of TPT Global, Inc. in exchange for all outstanding common stock of TPT Global Inc. and Ally Pharma agreed to change its name to TPT Global Tech, Inc. (jointly referred to as “the Company” or “TPTG”).

 

The following acquisitions have resulted in entities which have been consolidated into TPTG since the reverse merger in 2014.

 

Name

 

Herein referred to as

 

Acquisition or

Incorporation Date

 

Ownership

TPT Global Tech, Inc.

 

Company or TPTG

 

 

1988

 

 

 

100

%

Copperhead Digital Holdings, Inc.

 

Copperhead Digital or CDH

 

 

2015

 

 

 

100

%

TruCom, LLC

 

TruCom

 

 

2015

 

 

 

100

%

CityNet Arizona, LLC

 

CityNet

 

 

2015

 

 

 

100

%

San Diego Media Inc.

 

SDM

 

 

2016

 

 

 

100

%

Blue Collar Production, Inc.

 

Blue Collar

 

 

2018

 

 

 

100

%

TPT SpeedConnect, LLC

 

TPT SpeedConnect (2)

 

 

2019

 

 

 

86

%

TPT Federal, LLC

 

TPT Federal

 

 

2020

 

 

 

100

%

TPT MedTech, LLC

 

TPT MedTech

 

 

2020

 

 

 

100

%

TPT Strategic, Inc.

 

TPT Strategic

 

 

2020

 

 

 

0

%

QuikLab 1 LLC

 

Quiklab 1

 

 

2020

 

 

 

80

%

QuikLAB 2, LLC

 

QuikLAB 2

 

 

2020

 

 

 

80

%

QuikLAB 3, LLC

 

QuikLAB 3

 

 

2020

 

 

 

80

%

The Fitness Container, LLC

 

Air Fitness

 

 

2020

 

 

 

75

%

TPT Global Tech Asia Limited

 

TPT Asia

 

 

2020

 

 

 

78

%

TPT MedTech UK LTD

 

TPT MedTech UK

 

 

2020

 

 

 

100

%

TPT Global Defense Systems, Inc.

 

TPT Global Defense

 

 

2021

 

 

 

100

%

TPT Innovations Technology, Inc.

 

TPT Innovations

 

 

2021

 

 

 

100

%

TPT Global Caribbean Inc.

 

TPT Caribbean

 

 

2021

 

 

 

100

%

TPT Media and Entertainment, LLC

 

TPT Media and Entertainment

 

 

2021

 

 

 

100

%

VuMe Live, LLC

 

VuMe Live

 

 

2021

 

 

 

100

%

Digithrive, LLC

 

Digithrive

 

 

2021

 

 

 

100

%

Information Security and Training, LLC

 

IST (1)

 

 

2022

 

 

 

0

%

Asberry 22 Holdings, Inc.

 

Asberry or ASHI

 

 

2023

 

 

 

   86

%

 

 

(1)

On September 11, 2023, Everett Lanier and the Company agreed to a Settlement Agreement and Mutual Release (“Settlement Agreement”). See Note 11.

 

(2)

Through the acquisition of Asberry, TPT’s ownership was decreased to 86% from 100% through Asberry.

 

We are based in San Diego, California, and operate as a technology-based company with divisions providing telecommunications, medical technology and product distribution, media content for domestic and international syndication as well as technology solutions. We operate on our own proprietary Global Digital Media TV and Telecommunications infrastructure platform and also provide technology solutions to businesses domestically and worldwide. We offer Software as a Service (SaaS), Technology Platform as a Service (PAAS), Cloud-based Unified Communication as a Service (UCaaS) and carrier-grade performance and support for businesses over our private IP MPLS fiber and wireless network in the United States. Our cloud-based UCaaS services allow businesses of any size to enjoy all the latest voice, data, media and collaboration features in today's global technology markets. We also operate as a Master Distributor for Nationwide Mobile Virtual Network Operators (MVNO) and Independent Sales Organization (ISO) as a Master Distributor for Pre-Paid Cellphone services, Mobile phones, Cellphone Accessories and Global Roaming Cellphones.

 

 

 
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Table of Contents

 

Significant Accounting Policies

 

Please refer to Note 1 of the Notes to the Consolidated Financial Statements in the Company's most recent Form 10-K for all significant accounting policies of the Company, with the exception of those discussed below.

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared according to the instructions to Form 10-Q and Section 210.8-03(b) of Regulation S-X of the Securities and Exchange Commission (“SEC”) and, therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted.

 

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended September 30, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

 

These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2022. The condensed consolidated balance sheet as of September 30, 2023, has been derived from the consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP.

 

Our condensed consolidated financial statements include the accounts of those entities outlined in Nature of Operations giving consideration to the non-controlling interests where appropriate. All intercompany accounts and transactions have been eliminated in consolidation.

 

Reclassifications

 

Certain amounts presented in previously issued financial statements have been reclassified in these financial statements. As of December 31, 2022, advances to employees of $23,200 were previously classified as prepaid assets and other current assets versus the current classification of offsetting accrued payroll liabilities in accounts payable.

 

Revenue Recognition

 

We use the following criteria described below in more detail for each business unit:

 

Identify the contract with the customer.

Identify the performance obligations in the contract.

Determine the transaction price.

Allocate the transaction price to performance obligations in the contract.

Recognize revenue when or as we satisfy a performance obligation. lo

 

Reserves are recorded as a reduction in net sales and are not considered material to our consolidated statements of operations for the nine months ended September 30, 2023 and 2022. In addition, we invoice our customers for taxes assessed by governmental authorities such as sales tax and value added taxes, where applicable. We present these taxes on a net basis.

 

 

 
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Table of Contents

 

The Company’s revenue generation for the three and nine months ended September 30, 2023 and 2022 came from the following sources disaggregated by services and products, which sources are explained in detail below. 

 

 

 

For the three

months ended  

September 30, 2023

 

 

For the three

months ended

September 30, 2022

 

 

For the nine

months ended

September 30, 2023

 

 

For the nine

months ended

September 30, 2022 

 

TPT SpeedConnect

 

$843,451

 

 

$1,357,611

 

 

$2,760,055

 

 

$4,403,345

 

Blue Collar

 

 

79,063

 

 

 

692,486

 

 

 

243,592

 

 

 

1,386,970

 

TPT MedTech

 

 

 

 

 

 

 

 

 

 

 

89,755

 

Other (1)

 

 

737

 

 

 

2,720

 

 

 

4,219

 

 

 

183,395

 

Total Services Revenues

 

$923,251

 

 

$2,052,817

 

 

$3,007,866

 

 

$6,063,465

 

Air Fitness

 

 

 

 

 

 

 

 

 

 

 

82,000

 

Total Product Revenues

 

$

 

 

$

 

 

$

 

 

$82,000

 

Total Revenue

 

$923,251

 

 

$2,052,817

 

 

$3,007,866

 

 

$6,145,465

 

__________

 

(1)

Includes international sales for the nine months ended September 30, 2023 and 2022 of $0 and $172,781 related to TPT Asia.

 

TPT SpeedConnect: ISP and Telecom Revenue

 

TPT SpeedConnect is a rural Internet provider operating in 5 Midwestern States under the trade name SpeedConnect. TPT SC’s primary business model is subscription based, pre-paid monthly reoccurring revenues, from wireless delivered, high-speed internet connections. In addition, the company resells third-party satellite and DSL internet and IP telephony services. Revenue generated from sales of telecommunications services is recognized as the transaction with the customer is considered closed and the customer receives and accepts the services that were the result of the transaction. There are no financing terms or variable transaction prices. Due date is detailed on monthly invoices distributed to customer. Services billed monthly in advance are deferred to the proper period as needed. Deferred revenue are contract liabilities for cash received before performance obligations for monthly services are satisfied. Deferred revenue for TPT SpeedConnect as of September 30, 2023 and December 31, 2022 are $146,351 and $75,556, respectively. Certain of our products require specialized installation and equipment. For telecom products that include installation, if the installation meets the criteria to be considered a separate element, product revenue is recognized upon delivery, and installation revenue is recognized when the installation is complete. The Installation Technician collects the signed quote containing terms and conditions when installing the site equipment at customer premises.

 

Revenue for installation services and equipment is billed separately from recurring ISP and telecom services and is recognized when equipment is delivered and installation is completed. Revenue from ISP and telecom services is recognized monthly over the contractual period, or as services are rendered and accepted by the customer.

 

The overwhelming majority of our revenue continues to be recognized when transactions occur. Since installation fees are generally small relative to the size of the overall contract and because most contracts are for two years or less, the impact of not recognizing installation fees over the contract is immaterial.

 

Blue Collar: Media Production Services 

 

Blue Collar creates original live action and animated content productions and has produced hundreds of hours of material for the television, theatrical, home entertainment and new media markets. Blue Collar designs branding and marketing campaigns and has had agreements with some of the world’s largest companies including PepsiCo, Intel, HP, WalMart and many other Fortune 500 companies. Additionally, they create motion picture, television and home entertainment marketing campaigns for studios including Sony, DreamWorks, Twentieth Century Fox, Universal Studios, Paramount Studios, and Warner Brothers. With regard to revenue recognition, Blue Collar receives an agreement from each client to perform defined work. Some agreements are written, some are verbal. Work may include creation of marketing materials and/or content creation. Some work may be short term and take weeks to create and some work may be longer and take months to create. There are instances where customer agreements segregate identifiable obligations (like filming on site vs. film editing and final production) with separate transaction pricing. The performance obligation is generally satisfied upon delivery of such film or production products, at which time revenue is recognized. There are no financing terms or variable transaction prices.

 

 

 
11

Table of Contents

 

IST: Revenue and Cost Recognition

 

The Company recognizes construction contract revenue over time, as performance obligations are satisfied, due to the continuous transfer of control to the customer. Construction contracts are accounted for as a single unit of account (single performance obligation) and are not segmented between types of services. The Company recognizes revenue using the percentage-of-completion method, progress toward completion of the Company’s contracts is measured by the percentage of costs incurred to date to estimate total costs for each contract. The percentage-of-completion method (an input method) is the most faithful depiction of the Company’s performance because it directly measures the value of the services transferred to the customer.

 

Provisions are recognized in the statements of income for the full amount of estimated losses on uncompleted contracts whenever evidence indicates that the estimated cost of a contract exceeds its estimated total revenue. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Profit incentives are included in revenues when their realization is reasonably assured. An amount equal to contract cost attributable to claims is included in revenues when realization is probable and the amount can be reasonably estimated.

 

Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs, and depreciation costs. Selling, general, and administrative costs are charged to expense as incurred.

 

The accuracy of revenue and profit recognition in a given period depends on the accuracy of estimates of the cost to complete each project. Cost estimates for all significant projects use a detailed “bottom up” approach, and management believes that their experience allows them to create materially reliable estimates. There are a number of factors that can contribute to changes in estimates of contract cost and profitability. The most significant of these include:

 

 

·

the completeness and accuracy of the original bid;

 

·

costs associated with scope changes;

 

·

costs of labor and/or materials;

 

·

extended overhead and other costs due to owner, weather, and other delays;

 

·

subcontractor performance issues;

 

·

changes in productivity expectations;

 

·

site conditions that differ from those assumed in the original bid (to the extend contract remedies are unavailable);

 

·

the availability and skill level of workers in the geographic location of the project;

 

·

a change in the availability and proximity of equipment and materials; and

 

·

the ability to fully and promptly recover on claims for additional contract costs.

 

The foregoing factors, as well as the stage of completion of contracts in process and the mix of contracts at different margins, may cause fluctuations in gross profit between periods. Significant changes in cost estimates, particularly in larger, more complex projects have had, and can in future periods have, a significant effect on profitability.

 

Costs and estimated earnings in excess of billings, represent unbilled amounts earned and reimbursable under contracts. These amounts become billable according to the contract terms, which usually consider the passage of time, achievement of milestones or completion of the project. Generally, such unbilled amounts will be billed and collected over the next twelve months. Based on historical experience, management generally considers the collection risk related to these amounts to be low. When events or conditions indicate that the amounts outstanding may become uncollectible, an allowance is estimated and recorded.

 

Billings in excess of costs and estimated earnings, is comprised of cash collected from customers and billings to customers on contracts in advance of work performed, including advance payments negotiated as a contract condition. Generally, unearned project-related costs will be earned over the next twelve months.

 

TPT MedTech: Medical Testing Revenue

 

TPT MedTech operates in the Point of Care Testing (“POCT”) market by primarily offering mobile medical testing facilities and software equipped for mobile devices to monitor and manage personalized healthcare.  Services used from our mobile medical testing facilities are billing through credit cards at the time of service.  Revenue is generated from our software platform as users sign up for our mobile healthcare monitor and management application and tests are performed.  If medical testing is in one our own owned facility, the usage of the software application is included in the testing fees.  If the testing is in a non-owned outside contracted facility, fees are generated from the usage of the software application on a per test basis and billed monthly.

 

 

 
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Table of Contents

 

TPT MedTech also offers various products.  One is to build and sell its mobile testing facilities called QuikLABs designed for mobile testing.  This is used by TPT MedTech for its own testing services.  Another is to build customized mobile gyms for exercising.  This is sold to third parties.  Another is medical equipment, one of which is a sanitizing unit called SANIQuik which is used as a safe and flexible way to sanitize providing an additional routine to hand washing and facial coverings.  The SANIQuik has not yet been approved for sale in the United States but has in some parts of the European community.  Revenues from these products are recognized when a product is delivered, the sales transaction considered closed and accepted by a customer.  When deposits are received for which a product has not been delivered, it is recognized as deferred revenue.  Deferred revenue as of September 30, 2023 and December 31, 2022 was $0 and $0, respectively. There are no financing terms or variable transaction prices for either of these products.

 

SDM: Ecommerce, Email Marketing and Web Design Services

 

SDM generates revenue by providing ecommerce, email marketing and web design solutions to small and large commercial businesses, complete with monthly software support, updates and maintenance. Services are billed monthly. There are no financing terms or variable transaction prices. Platform infrastructure support is a prepaid service billed in monthly recurring increments. The services are billed a month in advance and due prior to services being rendered. The revenue is deferred when invoiced and booked in the month the service is provided. There is no deferred revenue as of September 30, 2023 and December 31, 2022. Software support services (including software upgrades) are billed in real time, on the first of the month. Web design service revenues are recognized upon completion of specific projects. Revenue is booked in the month the services are rendered and payments are due on the final day of the month. There are usually no contract revenues that are deferred until services are performed.

 

K Telecom: Prepaid Phones and SIM Cards Revenue

 

K Telecom generates revenue from reselling prepaid phones, SIM cards, and rechargeable minute traffic for prepaid phones to its customers (primarily retail outlets). Product sales occur at the customer’s locations, at which time delivery occurs and cash or check payment is received. The Company recognizes the revenue when they receive payment at the time of delivery. There are no financing terms or variable transaction prices.

 

Copperhead Digital: ISP and Telecom Revenue

 

Copperhead Digital operated as a regional internet and telecom services provider operating in Arizona under the trade name Trucom.  Although there are currently no customers and it will take capital to reopen this revenue stream, Copperhead Digital operated as a wireless telecommunications Internet Service Provider (“ISP”) facilitating both residential and commercial accounts. Copperhead Digital’s primary business model was subscription based, pre-paid monthly reoccurring revenues, from wireless delivered, high-speed internet connections. In addition, the company resold third-party satellite and DSL internet and IP telephony services. Revenue generated from sales of telecommunications services was recognized as the transaction with the customer is considered closed and the customer received and accepted the services that were the result of the transaction. There are no financing terms or variable transaction prices. Due date was detailed on monthly invoices distributed to customer. Services billed monthly in advance were deferred to the proper period as needed. Deferred revenue was contract liabilities for cash received before performance obligations for monthly services are satisfied. Certain of its products required specialized installation and equipment. For telecom products that included installation, if the installation met the criteria to be considered a separate element, product revenue was recognized upon delivery, and installation revenue was recognized when the installation was complete. The Installation Technician collected the signed quote containing terms and conditions when installing the site equipment at customer premises.

 

Revenue for installation services and equipment was billed separately from recurring ISP and telecom services and was recognized when equipment was delivered, and installation was completed. Revenue from ISP and telecom services was recognized monthly over the contractual period, or as services were rendered and accepted by the customer.

 

The overwhelming majority of revenue was recognized when transactions occurred. Since installation fees were generally small relative to the size of the overall contract and because most contracts were for a year or less, the impact of not recognizing installation fees over the contract was immaterial.

 

Basic and Diluted Net Loss Per Share

 

The Company computes net income (loss) per share in accordance with ASC 260, “Earning per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholder (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method for options and warrants and using the if-converted method for preferred stock and convertible notes. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of September 30, 2023, the Company had shares that were potentially common stock equivalents as follows:

 

 

 
13

Table of Contents

 

Convertible Promissory Notes

 

 

6,750,885,442

 

Series A Preferred Stock (1)

 

 

28,788,595,385

 

Series B Preferred Stock

 

 

2,588,693

 

Series D Preferred Stock (2)

 

 

235,601,010

 

Series E Preferred Stock (3)

 

 

10,320,742,424

 

Stock Options and Warrants

 

 

129,116,666

 

 

 

 

46,227,529,620

 

___________

 

(1)

Holder of the Series A Preferred Stock which is Stephen J. Thomas, is guaranteed 60% of outstanding common stock upon conversion. The Company would have to authorize additional shares for this to occur as only 4,500,000,000 shares are currently authorized.

 

(2)

Holders of the Series D Preferred Stock may decide after 12 months to convert to common stock @ 75% of the 30 day average market closing price (for previous 30 business days) divided into $5.00. There is also an automatic conversion of the Series D Preferred Stock without consent of holders upon any national exchange listing approval and the registration effectiveness of common stock underlying the conversion rights. The automatic conversion to common from Series D Preferred shall be @ 75% of the 30 day average market closing price (for previous 30 business days) divided into $5.00.

 

(3)

Holders of the Series E Preferred Stock may decide after 12 months to convert to common stock @ 75% of the 30 day average market closing price (for previous 30 business days) divided into $5.00. There is also an automatic conversion of the Series E Preferred Stock without consent of holders upon any national exchange listing approval and the registration effectiveness of common stock underlying the conversion rights. The automatic conversion to common from Series E Preferred shall be @ 75% of the 30 day average market closing price (for previous 30 business days) divided into $5.00.

 

Financial Instruments and Fair Value of Financial Instruments

 

Our primary financial instruments at September 30, 2023 consisted of cash equivalents, accounts receivable, accounts payable and debt. We apply fair value measurement accounting to either record or disclose the value of our financial assets and liabilities in our financial statements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value hierarchy requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value.

 

Described below are the three levels of inputs that may be used to measure fair value:

 

Level 1 Quoted prices in active markets for identical assets or liabilities.

 

Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

We consider our derivative financial instruments as Level 3. The balances for our derivative financial instruments as of September 30, 2023 are the following:

 

Derivative Instrument

 

Fair Value

 

Convertible Promissory Notes

 

$4,093,369

 

Fair value of Warrants issued with the derivative instruments

 

 

110,419

 

 

 

$4,203,788

 

 

Recently Issued Financial Accounting Standards

 

Management has reviewed recently issued accounting pronouncements and has determined there are not any that would have a material impact on the condensed consolidated financial statements.

 

 
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NOTE 2 – ACQUISITIONS

 

Agreement and Plan of Merger

 

An Agreement and Plan of Merger ("Agreement") was made and entered into as of March 24, 2023 by and among TPT SpeedConnect LLC, a Colorado Limited Liability Company (wholly-owned subsidiary of TPT Global Tech, Inc.) ("SPC"), and Asberry 22 Holdings, Inc., a Delaware Corporation ("ASHI"), and SPC Acquisition, Inc., a wholly-owned subsidiary of ASHI, domiciled in Colorado ("Acquisition Sub") primarily for the opportunities of capital raising. SPC then converted to a Corporate entity and Acquisition Submerged with and into SPC (the "Merger"). The separate corporate existence of Acquisition Sub ceased and SPC continues as the surviving corporation in the Merger and as wholly-owned subsidiary of ASHI. All of the properties, rights and privileges, and power of SPC, vest in the Subsidiary, and all debts, liabilities and duties of SPC are the debts, liabilities and duties of the Subsidiary. The shares of common stock of Acquisition Sub issued and outstanding immediately prior to the Effective Time is converted into and exchange for 1,000 validly issued, fully paid and non-assessable shares of the Subsidiary's common stock.

 

TPT Global Tech, Inc. was issued a total of 4,658,318 common shares of ASHI (the "ASHI Common Stock"), as a result of the merger, constituting 86% of the then issued and outstanding common stock. TPT Global Tech, Inc. also has purchased all of the 500,000 Series A Super Majority Voting Preferred Shares of ASHI for a convertible note payable of $500,000 due in 180 days which bears interest at 6.0% per annum and is convertible to shares of the Company’s common stock at 85% of the volume weighted average price for the preceding 5 market trading days.

 

ASHI shall file a Form S-1 Registration Statement with the Securities Exchange Commission within 120 days after closing, to register for resale: a) the common shares of ASHI, issued at closing, b) conversion shares for the Series A Supermajority Preferred Stock and c) those outstanding shares of the shareholders of ASHI existing as of the day prior to closing, and shall pursue such S-1 filing diligently to effectiveness.

 

The Officers of ASHI shall resign effective upon the appointment of the new Officers, as designated by SPC. The Current Directors of ASHI shall remain as directors until the Series A Preferred Stock (500,000 shares) of ASHI shall have been redeemed or converted. SPC shall have designated two new directors for appointment effective at closing, and may then appoint new Officers, and the current officers shall resign at closing.

 

The Company evaluated this acquisition in accordance with ASC 805-10-55-4 to discern whether the assets and operations of the assets purchased met the definition of a business. The company concluded that there were not processes and sufficient inputs into outputs.  Accordingly, the Company accounted for this transaction as an asset acquisition and allocated the purchase price as follows: 

 

Consideration given at fair value:

 

 

 

Accounts payable

 

$68,025

 

 

 

$68,025

 

 

 

 

 

 

Assets acquired at fair value:

 

 

 

 

Prepaid expenses

 

$4,250

 

Additional paid in capital

 

 

63,775

 

 

 

$68,025

 

 

There was nothing accounted for in the Statement of Operations for the nine months ended September 30, 2023.  On a proforma basis any adjustments would not be significant.

 

TPT Strategic Merger with Information Security and Training LLC and Subsequent Settlement Agreement

 

Dated as of June 29, 2022, for synergies and the opportunity at other revenue streams, TPT Strategic entered into a definitive agreement for the acquisition of the assets and  Information Security and Training LLC (“IST LLC” or “IST”) (www.istincs.com)  a  Construction and Information Technology Services company based in Huntsville Alabama with branch offices in Nashville TN, Birmingham Al, Jackson MS, Fort Campbell KY, New Orleans LA, and Joint Base Lewis-McChord.  The TPT Strategic and IST, LLC agreement, which closed October 20, 2022, for the acquisition is a stock transaction where the founder and sole interest holder, Everett Lanier received 500,000 Preferred Series B shares of TPT Strategic that will convert to a 10% ownership of TPT Strategic under certain conditions. The acquisition includes the assumption of all assets and certain liabilities.  Everett Lanier was to remain as the President and become a Board Member of TPT Strategic.

 

 

 
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Originally, the Company evaluated this acquisition in accordance with ASC 805-10-55-4 to discern whether the assets and operations of the assets purchased met the definition of a business. The company concluded that there are processes and sufficient inputs into outputs.  Accordingly, the Company accounted for this transaction as a business combination and allocated the purchase price as follows: 

 

Consideration given at fair value:

 

 

 

Note payable, net of discount

 

$374,018

 

Credit cards assumed

 

 

48,452

 

Preferred shares of TPT Strategic

 

 

3,206

 

 

 

$425,676

 

 

 

 

 

 

Assets acquired at fair value:

 

 

 

 

Working capital

 

$143,122

 

Property and equipment

 

 

2,170

 

Note receivable – related party

 

 

271,179

 

Other assets

 

 

9,205

 

 

 

$425,676

 

 

On September 11, 2023, Everett Lanier and the Company agreed to a Settlement Agreement and Mutual Release (“Settlement Agreement”). See Note 11. 

 

 
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NOTE 3 – GOING CONCERN

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

 

We incurred $3,093,608 and $11,352,944, respectively, in losses, and we used $442,135 and $263,313, respectively, in cash for operations for the nine months ended September 30, 2023 and 2022. We calculate the net cash used by operating activities by decreasing, or increasing in case of gain, our let loss by those items that do not require the use of cash such as depreciation, amortization, research and development, derivative expense or gain, gain on extinguishment of debt and share-based compensation which totaled to a net $343,636 for 2023 and $7,704,624 for 2022. 

 

In addition, we report increases and reductions in liabilities as uses of cash and decreases assets and increases in liabilities as sources of cash, together referred to as changes in operating assets and liabilities.  For the nine months ended September 30, 2023, we had a net change in our assets and liabilities of $2,303,246 primarily from an increase in accounts payable from lag of payments for accounts payable for cash flow considerations and increase in prepaid expenses.  For the nine months ended September 30, 2022 we had a net increase to our assets and liabilities of $3,385,007 for similar reasons.

 

Cash flows from financing activities were $382,505 and $(175,057) for the nine months ended September 30, 2023 and 2022, respectively.  For the nine months ended September 30, 2023, these cash flows were generated from proceeds from convertible notes of $358,500 and other notes receivable - related parties of $139,931 offset by payment on convertible loans, advances and factoring agreements of $83,221 and $32,705 in cash used in discontinued operations. For the nine months ended September 30, 2022, cash flows were generated from proceeds from convertible notes, loans and advances of $1,256,187 offset by payment on convertible loans, advances and factoring agreements of $1,391,580 and payments on amounts payable – related parties of $39,664.

 

Cash flows used in investing activities were $0 and $16,297, respectively, for the nine months ended September 30, 2023 and 2022 primarily related to the acquisition of property and equipment for 2022 and discontinued operations for 2023.

 

These factors raise substantial doubt about the ability of the Company to continue as a going concern for a period of one year from the issuance of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

In order for us to continue as a going concern for a period of one year from the issuance of these financial statements, we will need to obtain additional debt or equity financing and look for companies with cash flow positive operations that we can acquire. There can be no assurance that we will be able to secure additional debt or equity financing, that we will be able to acquire cash flow positive operations, or that, if we are successful in any of those actions, those actions will produce adequate cash flow to enable us to meet all our future obligations. Most of our existing financing arrangements are short-term. If we are unable to obtain additional debt or equity financing, we may be required to significantly reduce or cease operations.

 

NOTE 4 – PROPERTY AND EQUIPMENT

 

Property and equipment and related accumulated depreciation as of September 30, 2023 and December 31, 2022 are as follows: 

 

 

 

2023

 

 

2022

 

Property and equipment:

 

 

 

 

 

 

Land

 

$1,226,000

 

 

 

 

Office furniture and equipment

 

 

77,859

 

 

 

77,859

 

Total land, property and equipment

 

 

1,303,859

 

 

 

77,859

 

Accumulated depreciation

 

 

(77,859 )

 

 

(75,404 )

Property and equipment, net

 

$1,226,000

 

 

$2,455

 

 

Depreciation expense was $2,454 and $448,943 for the nine months ended September 30, 2023 and 2022, respectively.

 

 
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NOTE 5 – DEBT FINANCING ARRANGEMENTS

 

Financing arrangements as of September 30, 2023 and December 31, 2022 are as follows: 

 

 

 

2023

 

 

2022

 

Loans and advances (1)

 

$470,092

 

 

$470,092

 

Convertible notes payable (2)

 

 

3,424,556

 

 

 

3,054,869

 

Factoring agreements (3)

 

 

532,467

 

 

 

577,177

 

Debt – third party

 

$4,427,115

 

 

$4,102,138

 

 

 

 

 

 

 

 

 

 

Line of credit, related party secured by assets (4)

 

$2,742,929

 

 

$2,742,929

 

Debt– other related party, net of discounts (5)

 

 

2,015,500

 

 

 

2,015,500

 

Convertible debt – related party (6)

 

 

553,100

 

 

 

553,100

 

Shareholder debt (7)

 

 

144,081

 

 

 

4,150

 

Debt – related party

 

$5,455,610

 

 

$5,315,679

 

 

 

 

 

 

 

 

 

 

Total financing arrangements

 

$9,882,725

 

 

$9,417,817

 

 

 

 

 

 

 

 

 

 

Less current portion:

 

 

 

 

 

 

 

 

Loans, advances and factoring agreements – third party

 

$(1,002,559 )

 

$(902,809 )

Convertible notes payable third party

 

 

(3,424,556 )

 

 

(3,054,869 )

Debt – related party, net of discount

 

 

(4,902,510 )

 

 

(4,762,579 )

Convertible notes payable– related party

 

 

(553,100 )

 

 

(553,100 )

 

 

 

(9,882,725 )

 

 

(9,273,357 )

Total long term debt

 

$

 

 

$144,460

 

__________  

 

(1)

The terms of $40,000 of this balance are similar to that of the Line of Credit which bears interest at adjustable rates, 1 month LIBOR plus 2%, 7.44% as of September 30, 2022, and is secured by assets of the Company, was due August 31, 2020, as amended.

 

$360,000 is a bank loan dated May 28, 2019 which bears interest at Prime plus 6%, 14.0% as of September 30, 2023 and, as amended, is interest only through October 1, 2023 at which time the monthly payment of principal and interest of $40,000 is required until the due date of May 1, 2024. The bank loan is collateralized by assets of the Company.  This loan may be considered in default as the Company did not make its payment of principal and interest on October 1, 2023.  The Company is in discussions with the bank to restructure this bank loan.

 

On June 4, 2019, the Company consummated a Securities Purchase Agreement with Odyssey Capital Funding, LLC. (“Odyssey”) for the purchase of a $525,000 Convertible Promissory Note (“Odyssey Convertible Promissory Note”). The Odyssey Convertible Promissory Note was due June 3, 2020, paid interest at the rate of 12% (24% default) per annum and gave the holder the right from time to time, and at any time during the period beginning six months from the issuance date to convert all of the outstanding balance into common stock of the Company limited to 4.99% of the outstanding common stock of the Company. The conversion price was 55% multiplied by the average of the two lowest trading prices for the common stock during the previous 20 trading days prior to the applicable conversion date. The Odyssey Convertible Promissory Note could be prepaid in full at 125% to 145% up to 180 days from origination. Through June 3, 2020, Odyssey converted $49,150 of principal and $4,116 of accrued interest into 52,961,921 shares of common stock of the Company. On June 8, 2020, Odyssey agreed to convert the remaining principal and accrued interest balance on the Odyssey Convertible Promissory Note of $475,850 and $135,000, respectively, to a term loan payable in six months in the form of a balloon payment, earlier if the Company has a funding event, bearing simple interest on the unpaid balance of 0% for the first three months and then 10% per annum thereafter.   The loan was in default as of March 31, 2022.  During April 2022, Odyssey accepted to exchange all of its outstanding principal and interest as of March 31, 2022 of $685,682 into 137,136 of TPT Series E Preferred Shares.  

 

Effective September 30, 2020, we entered into a Purchase Agreement by which we agreed to purchase the 500,000 outstanding Series A Preferred shares of TPT Strategic, Inc., our majority owned subsidiary, in an agreed amount of $350,000 in cash or common stock, if not paid in cash, at the five day average price preceding the date of the request for effectiveness after the filing of a registration statement on Form S-1. This was modified December 28 and 29, 2020, to provide for registration of 7,500,000 common shares for resale at the market price. Any balance due on notes was to be calculated after an accounting for the net sales proceeds from sale of the stock by February 28, 2021 and was to be paid in cash or stock thereafter. The Series A Preferred shares were purchased from the Michael A. Littman, Atty. Defined Benefit Plan.     The $350,000 is recorded as a Note Payable.  During the year ended December 31, 2021, it was determined that there was a deficiency of approximately $185,000 from net sales proceeds which is accounted for in accounts payable.

                             

 

 
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The Company purchased all of the 500,000 Series A Super Majority Voting Preferred Shares of ASHI for a convertible note payable of $500,000 due in 180 days which bears interest at 6.0% per annum and is convertible to shares of the Company’s common stock at 85% of the volume weighted average price for the preceding 5 market trading days.  The ASHI convertible note payable was valued at $508,553 upon acquisition.

 

The remaining balances generally bear interest at approximately 10%, have maturity dates that are due on demand or are past due, are unsecured and are classified as current in the balance sheets.

 

(2) During 2017, the Company issued convertible promissory notes in the amount of $67,000 (comprised of $62,000 from two related parties and $5,000 from a former officer of CDH), all which were due May 1, 2020 and bear 6% annual interest (12% default interest rate). The convertible promissory notes are convertible, as amended, at $0.25 per share. These convertible promissory notes were not repaid May 1, 2020 and are delinquent.  The Company is working to renegotiate these promissory notes.

 

On June 11, 2019, the Company consummated a Securities Purchase Agreement with EMA Financial, LLC. (“EMA”) for the purchase of a $250,000 Convertible Promissory Note (“EMA Convertible Promissory Note”). The EMA Convertible Promissory Note is due June 11, 2020, pays interest at the rate of 12% (principal amount increases 200% and interest rate increases to 24% under default) per annum and gives the holder the right from time to time to convert all of the outstanding balance into common stock of the Company limited to 4.99% of the outstanding common stock of the Company. The conversion price is 55% multiplied by the lowest traded price for the common stock during the previous 25 trading days prior to the applicable conversion date. The EMA Convertible Promissory Note may be prepaid in full at 135% to 150% up to 180 days from origination. Prior to December 31, 2020, EMA converted $35,366 of principal into 147,700,000 shares of common stock of the Company. As such, the principal and accrued interest balances owning to EMA at September 30, 2023 is $503,771 and $507,487, respectively. 1,000,000 warrants were issued in conjunction with the issuance of this debt. See Note 8.  See below regarding derivative securities in default.

 

On October 6, 2021, TPT Global Tech, Inc. and FirstFire Global Opportunities Fund, LLC. entered into a convertible promissory note totaling $1,087,000 and a securities purchase agreement (“FirstFire Note”). The FirstFire Note has an original issue discount of 8% and bears interest at 10%, with a default rate of 24%, and is convertible into shares of the Company’s common stock.  There is a mandatory conversion in the event a Nasdaq Listing prior to nine months from funding for which the Holder’s principal and interest balances will be converted at a price equal to 25% discount to the opening price on the first day the Company trades on Nasdaq. There is also a voluntary conversion of all principal and accrued interest at the discretion of the Holder at the lower of (1) 75% of the two lowest trade prices during the fifteen consecutive trading day period ending on the trading day immediately prior to the applicable conversion date or (2) discount to market based on subsequent financings with other investors. Subsequent debt issuances have lowered this price to $0.025 per share, adjusted to $.0075 during the three months ended March 31, 2022. The Holder was given registration rights. The FirstFire Note may be prepaid in whole or in part of the outstanding balances at 115% prior to maturity. 225,000,000 common shares of the Company have been reserved with the transfer agent for possible conversion and exercise of warrants. Warrants to purchase 55,000,000 shares of common stock at 110% of the opening price on the first day the Company trades on the Nasdaq exchange were issued to the Holder. Through September 30, 2023, the Company has exercised its right to convert $558,660 of principal into 377,000,000 shares of common shares leaving a principal and accrued interest balance at September 30, 2023 of $800,090 in principal and $618,560 in accrued interest.  See below regarding derivative securities in default.

 

On October 13, 2021, TPT Global Tech, Inc. and Cavalry Investment Fund LP entered into a convertible promissory note totaling $271,250 and a securities purchase agreement (“Cavalry Investment Note”). The Cavalry Investment Note has an original issue discount of 8% and bears interest at 10%, with a default rate of 24%, and is convertible into shares of the Company’s common stock.  There is a mandatory conversion in the event a Nasdaq Listing prior to nine months from funding for which the Holder’s principal and interest balances will be converted at a price equal to 25% discount to the opening price on the first day the Company trades on Nasdaq. There is also a voluntary conversion of all principal and accrued interest at the discretion of the Holder at the lower of (1) 75% of the two lowest trade prices during the fifteen consecutive trading day period ending on the trading day immediately prior to the applicable conversion date or (2) discount to market based on subsequent financings with other investors. Subsequent debt issuances have lowered this price to $0.025 per share, adjusted to $.0075. The Holder was given registration rights. The Cavalry Investment Note may be prepaid in whole or in part of the outstanding balances at 115% prior to maturity. 56,250,000 common shares of the Company have been reserved with the transfer agent for possible conversion and exercise of warrants.  Warrants to purchase 13,750,000 shares of common stock at 110% of the opening price on the first day the Company trades on the Nasdaq exchange were issued to the Holder.  Through September 30, 2023, the Company has exercised its right to convert $67,000 of principal into 55,833,334 shares of common stock leaving a principal and accrued interest balance at September 30, 2023 of $272,688 and $121,234, respectively.  See below regarding derivative securities in default.

 

 

 
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On October 13, 2021, TPT Global Tech, Inc. and Cavalry Fund I, LP entered into a convertible promissory note totaling $815,250 and a securities purchase agreement (“Cavalry Fund I Note”). The Cavalry Fund I Note has an original issue discount of 8% and bears interest at 10%, with a default rate of 24%, and is convertible into shares of the Company’s common stock.  There is a mandatory conversion in the event a Nasdaq Listing prior to nine months from funding for which the Holder’s principal and interest balances will be converted at a price equal to 25% discount to the opening price on the first day the Company trades on Nasdaq. There is also a voluntary conversion of all principal and accrued interest at the discretion of the Holder at the lower of (1) 75% of the two lowest trade prices during the fifteen consecutive trading day period ending on the trading day immediately prior to the applicable conversion date or (2) discount to market based on subsequent financings with other investors. Subsequent debt issuances have lowered this price to $0.0075 per share. The Holder was given registration rights. The Cavalry Fund I Note may be prepaid in whole or in part of the outstanding balances at 115% prior to maturity. 168,750,000 common shares of the Company have been reserved with the transfer agent for possible conversion and exercise of warrants. Warrants to purchase 41,250,000 shares of common stock at $110% of the opening price on the first day the Company trades on the Nasdaq exchange were issued to the Holder. Through September 30, 2023, the Company exercised its right to convert $192,230 of principal and penalties into 168,750,000 shares of common stock leaving a principal and accrued interest balance at September 30, 2023 of $826,833 and $364,810, respectively.  See below regarding derivative securities in default.

 

On January 31, 2022, TPT Global Tech, Inc. and Blue Lake Partners, LLC entered into a convertible promissory note totaling $271,750 and a securities purchase agreement (“Blue Lake Note”). The Blue Lake Note is due twelve months from funding, has an original issue discount of 8% and interest rate at 10% per annum (default, as defined, at 16%). There is an optional conversion in the event a Nasdaq Listing prior to nine months from funding for which the Holder’s principal and interest balances will be converted at a price equal to 25% discount to the opening price on the first day the Company trades on Nasdaq. There is also a voluntary conversion of all principal prepaid in whole or in part of the outstanding balances at 100% prior to maturity unless the Holder chose to convert their balances into common stock which they have three days to do so. 73,372,499 common shares of the Company have been reserved with the transfer agent for possible conversion and exercise of warrants. Warrants, expiring five years from issuance, were issued to exercise up to 9,058,333 warrants to purchase 9,058,333 common shares at $0.015, provided, however, that if the Company consummates an Uplist Offering on or before July 6, 2022 then the exercise price shall equal 110% of the offering price at which the Uplist Offering is made. The Company and the holder executed the securities purchase agreement in accordance with and in reliance upon the exemption from securities registration for offers and sales to accredited investors afforded, inter alia, by Rule 506 under Regulation D as promulgated by the SEC under the 1933 Act, and/or Section 4(a)(2) of the 1933 Act.  Through September 30, 2023, Blue Lake exercised its right to convert $360,447 of principal, interest and penalties into 48,059,600 of common shares leaving a balance of $8,165 in principal and $0 of accrued interest as of September 30, 2023.  See below regarding derivative securities in default.

 

On June 13, 2022, TPT Global Tech, Inc. and 1800 Diagonal Lending LLC entered into a $200,760 promissory note agreement (1800 Diagonal Note”). The 1800 Diagonal Note has an original issue discount of 12%, or $21,510, and bears interest at 22%, and is convertible into shares of the Company’s common stock only under default, as defined.  10 payments of $22,485 beginning on July 30, 2022 are to be made each month totaling $224,851. At any time following default, as defined, conversion rights exist at a discount rate of 25% of the lowest trading price for the Company’s common stock during the previous 10 trading days prior to conversion. 194,676,363 common shares of the Company have been reserved with the transfer agent for possible conversion under a default. Through September 30, 2023, 1800 Diagonal exercised its right to convert $236,094 of principal and interest into 190,987,049 of common shares leaving a balance of $0 in principal and accrued interest as of September 30, 2023.  See below regarding derivative securities in default.

 

On February 8, 2023, TPT Global Tech, Inc. and 1800 Diagonal Lending LLC entered into a $81,675 promissory note agreement (1800 Diagonal Note #2”). The 1800 Diagonal Note #2 has an original issue discount of 9%, or $7,425, and bears interest at 9%, 22% upon default, and is convertible into shares of the Company’s common stock only under default, as defined.  Total of $81,675 plus and accrued interest is due February 8, 2024. A penalty on the principal balance has been accrued of $40,838 because of defaults of covenants on other financing arrangements. At any time following default, as defined, conversion rights exist at a discount rate of 25% of the lowest trading price for the Company’s common stock during the previous 10 trading days prior to conversion. 150,000,000 common shares of the Company have been reserved with the transfer agent for possible conversion under a default. Through September 30, 2023, 1800 Diagonal Lending LLC has exercised its right to convert $17,000 in principal or interest into 25,000,000 common shares leaving a balance of $105,513 in principal and $17,827 in accrued interest as of September 30, 2023.  See below regarding derivative securities in default.

 

On February 9, 2023, TPT Global Tech, Inc. and FirstFire Global Opportunities Fund, LLC (“First Fire”) entered into a $330,000 promissory note agreement (Firstfire Note #2”). The FirstFire Note #2 has an original issue discount of 9%, or $30,000, and bears interest at 10%, 20% upon default, and is convertible into shares of the Company’s common stock only under default, as defined.  $33,000 of interest is considered earned at the issue date.  Total of $330,000 plus accrued interest is due February 8, 2024. A penalty on the principal balance has been accrued of $165,000 because of defaults of covenants on other financing arrangements. Conversion rights exist that at any time after issuance, the FirstFire Note #2 can be exchanged for shares of common stock at $.0012 per share. 350,000,000 common shares of the Company’s common stock have been reserved with the transfer agent for possible conversion. Through September 30, 2023, First Fire has exercised its right to convert $96,000 of principal or interest into 80,000,000 of common shares leaving a balance of $495,000 in principal and $74,250 in accrued interest as of September 30, 2023.

 

 

 
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The Company entered into a convertible note payable March 27, 2023 with Michael Littman, Atty Defined Benefit Plan for the acquisition of 500,000 Series A Super Majority Voting Preferred Shares of ASHI due in 180 days, bearing interest at 6.0% per annum (12% default rate) and is convertible into shares of the Company’s common stock at 85% of the volume weighted average price for the preceding five market trading days.

 

The Company is in default under all of its derivative financial instruments and has accounted for these defaults under each agreements default provisions. In February 2022, the Company defaulted on its FirstFire, Cavalry Investment, and Cavalry Fund I Notes for failure to uplist within one hundred twenty (120) days from the date of the Notes. Talos, Blue Lake and 1800 Diagonal are in default from cross default provisions. In total, $916,895 was recorded as interest expense representing additional principal and interest because of default. Notice of default was received from EMA for not reserving enough shares for conversion and for not having filed a Form S-1 Registration Statement with the Securities and Exchange Commission. It was the intent of the Company to pay back all derivative securities prior to the due dates but that has not occurred in case of EMA. As such, the Company is currently in negotiations with EMA and relative to extending the due date and changing terms on the Note.  The Company has been named in a lawsuit by EMA for failing to comply with a Securities Purchase Agreement entered into in June 2019.  See Note 9 Other Commitments and Contingencies. 

 

(3) On April 1, 2022, the Company entered into a Future Receivable Sale and Purchase Agreement (“Mr. Advance Agreement”) with Mr. Advance LLC (”Mr. Advance”). The balance to be purchased and sold is $411,000 for which the Company received $270,715, net of fees. Under the Mr. Advance Agreement, the Company is to pay $8,935 per week for 46 weeks at an effective interest rate of approximately 36% annually.   The Company is in default with this Agreement for non-payment and is working to restructure its terms. The balance outstanding as of September 30, 2023 is $214,484, net of discounts and payments made.

 

On April 1, 2022, the Company entered into a Future Receipts Sale and Purchase Agreement (“CLOUDFUND Agreement”) with CLOUDFUND LLC (”CLOUDFUND”). The balance to be purchased and sold is $411,000 for which the Company received $272,954, net of fees. Under the CLOUDFUND Agreement, the Company is to pay $8,935 per week for 46 weeks at an effective interest rate of approximately 36% annually.  The Company is in default with this Agreement for non-payment and is working to restructure its terms.  The balance outstanding as of September 30, 2023 is $244,670, net of discounts.

 

On April 27, 2022, the Company entered into a Future Receivables Sale and Purchase Agreement (“Fox Capital Agreement”) with Fox Capital Group, Inc. (”Fox Capital”). The balance to be purchased and sold is $138,000 for which the Company received $90,000, net of fees. Under the Fox Capital Agreement, the Company is to pay $4,313 per week for 32 weeks at an effective interest rate of approximately 36% annually.  The Company is in default with this Agreement for non-payment and is working to restructure its terms.  The balance outstanding as of September 30, 2023 is $73,313, net of discounts.

 

(4) The Line of Credit originated with a bank and was secured by the personal assets of certain shareholders of Copperhead Digital. During 2016, the Line of Credit was assigned to the Copperhead Digital shareholders, who subsequent to the Copperhead Digital acquisition by TPTG became shareholders of TPTG, and the secured personal assets were used to pay off the bank. The Line of Credit bears a variable interest rate based on the 1 Month LIBOR plus 2.0%, 7.44% as of September 30, 2023, is payable monthly, and is secured by the assets of the Company. 1,000,000 shares of Common Stock of the Company have been reserved internally to accomplish raising the funds to pay off the Line of Credit. Since assignment of the Line of Credit to certain shareholders, which balance on the date of assignment was $2,597,790, those shareholders have loaned the Company $445,600 under the similar terms and conditions as the line of credit but most of which were also given stock options totaling $85,120 which expired as of December 31, 2019 (see Note 8) and was due, as amended, August 31, 2020.  $300,461 of the principal balance was exchanged for 60,092 shares of Series E Preferred Stock in April 2022.  See Note 8.  The Company is in negotiations to refinance this Line of Credit.

 

During the years ended December 31, 2019 and 2018, those same shareholders and one other have loaned the Company money in the form of convertible loans of $136,400 and $537,200, respectively, described in (2) and (6).

 

(5) $350,000 represents cash due to the prior owners of the technology acquired in December 2016 from the owner of the Lion Phone which is due to be paid as agreed by the Company and the former owners of the Lion Phone technology and has not been determined.

 

$4,000,000 represents a promissory note included as part of the consideration of VuMe, formerly ViewMe Live technology acquired in 2017, later agreed to as being due and payable in full, with no interest with $2,000,000 from debt proceeds and the remainder from proceeds from a second Company public offering.

 

$1,000,000 represents a promissory note which was entered into on May 6, 2020 for the acquisition of Media Live One Platform from Steve and Yuanbing Caudle for the further development of software. This was expensed as research and development in the year ended December 31, 2020. This $1,000,000 promissory note is non-interest bearing, due after funding has been received by the Company from its various investors and other sources. Mr. Caudle is a principal with the Company’s VuMe technology.

 

 

 
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Both the $4,000,000 and $1,000,000 promissory notes related to the VuMe technology and Media Live One Platform were exchanged through a Software Acquisition Agreement dated as of March 25, 2022 for shares of the Company’s Series E Preferred Stock.  See Note 8.  In this same agreement, the Company agreed to pay Mr. and Mrs. Caudle $1,750,000 for additional developed software that will be used with the VuMe technology which was expensed as research and development during the year ended December 31, 2022.  $200,000 had been paid and was accounted for as a deposit as of December 31, 2021.  Subsequently, this was used against the purchase price and the remainder was setup as a note payable. $550,000 to be paid from first proceeds raised by the Company and $1,000,000 as agreed by the Company and Mr. and Mrs. Caudle.

 

$115,500 represents part of a $500,000 Note Payable related to the acquisition of 75% of Air Fitness, payable six months from the date of the note or as agreed by the Company out of future capital raising efforts.  During 2022, $384,500 of the Note Payable and $49,985 of accrued interest were exchanged for 104,961 Series E Preferred Shares.

 

(6) During 2018, the Company issued convertible promissory notes in the amount of $537,200 to related parties and $10,000 to a non-related party which bear interest at 6% (11% default interest rate), are due 30 months from issuance and are convertible into Series C Preferred Stock at $1.00 per share.  $106,000 of these notes were exchanged for 21,200 shares of Series E Preferred Stock in April 2022 and $19,400 were repaid prior to December 31, 2021.

 

(7) The shareholder debt represents funds given to TPTG or subsidiaries by officers and managers of the Company as working capital. There are no written terms of repayment or interest that is being accrued to these amounts and they will only be paid back, according to management, if cash flows support it. They are classified as current in the balance sheets.

 

See Lease financing arrangement in Note 8.

 

NOTE 6 -DERIVATIVE FINANCIAL INSTRUMENTS

 

The Company previously adopted the provisions of ASC subtopic 825-10, Financial Instruments (“ASC 825-10”). ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

 

The derivative liability as of September 30, 2023, in the amount of $4,203,788 has a level 3 classification under ASC 825-10.

 

The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of September 30, 2023.

 

 

 

Debt Derivative

Liabilities

 

Balance, December 31, 2021

 

$4,042,910

 

Change in derivative liabilities from new notes payable

 

 

622,518

 

Change in derivative liabilities from conversion of notes payable

 

 

(493,101 )

Change in fair value of derivative liabilities at end of period – derivative expense

 

 

650,071

 

Balance, December 31, 2022

 

$4,822,398

 

Change in derivative liabilities from new notes payable

 

 

477,414

 

Change in derivative liabilities from conversion of notes payable

 

 

(728,143 )

Change in fair value of derivative liabilities at end of period – derivative expense (gain)

 

 

(367,881 )

Balance, September 30, 2023

 

$4,203,788

 

 

Convertible notes payable and warrant derivatives – The Company issued convertible promissory notes which are convertible into common stock, at holders’ option, at a discount to the market price of the Company’s common stock. The Company has identified the embedded derivatives related to these notes relating to certain anti-dilutive (reset) provisions. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of debenture and to fair value as of each subsequent reporting date.

 

As of September 30, 2023, the Company marked to market the fair value of the debt derivatives and determined a fair value of $42,037,882 ($4,093,369 from the convertible notes and $110,419 from warrants) in Note 5 (2) above. The Company recorded an expense from change in fair value of debt derivatives of $367,881 for the nine months ended September 30, 2023. The fair value of the embedded derivatives was determined using Monte Carlo simulation method based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 133.5% to 191.5%, (3) weighted average risk-free interest rate of 4.80% to 5.50% (4) expected life of 0.50 to 3.58 years, and (5) the quoted market price of $0.001 for the Company’s common stock.

 

 
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NOTE 7 - STOCKHOLDERS' DEFICIT

 

Preferred Stock

 

As of September 30, 2023, we had authorized 100,000,000 shares of Preferred Stock, of which certain shares had been designated as Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock.

 

All Preferred Stock is classified as mezzanine equity as a result of the Company not having enough authorized common shares to be able to issue common shares upon their conversion.

 

Series A Convertible Preferred Stock

 

The Company designated 1,000,000 shares of Preferred Stock as Series A Preferred Stock. In February 2015, the Board of Directors authorized the issuance of 1,000,000 shares of Series A Preferred Stock to Stephen Thomas, Chairman, CEO and President of the Company, valued at $3,117,000 for compensation expense. These shares are outstanding as of September 30, 2023.

 

The Series A Preferred Stock has a par value of $.001, is redeemable at the Company’s option at $100 per share, is senior to any other class or series of outstanding Preferred Stock or Common Stock and does not bear dividends. The Series A Preferred Stock has a liquidation preference immediately after any Senior Securities, as defined and amended, of an amount equal to amounts payable owing, including contingency amounts where Holders of the Series A have personally guaranteed obligations of the Company.

 

As of September 30, 2023, by amendment, holders of the Series A Preferred Stock shall, collectively have the right to convert all of their Series A Preferred Stock when conversion is elected into that number of shares of Common Stock of the Company, as amended and restated July 5, 2022 by the Board of Directors and a majority of the outstanding voting shares of the Company, determined by the following formula: 60% of the common shares computed to include all projected conversions of all convertible debt and any other classes of Preferred Stock as if the conversions had taken place at the stated conversion price per share (i.e. for the avoidance of doubt – “fully diluted” as if such conversion had occurred prior to the Series A conversion.) The Company determined that due to the significance of the amendment, it should be accounted for as an extinguishment and fair valued the amended Series A Preferred Stock at $42,983,742, creating a deemed dividend of $39,866,742. The valuation of the amended Series A Preferred Stock was done by a qualified independent third party.

 

The record Holders of the Series A Preferred Stock shall have the right to vote as if converted prior to the vote to an amount of shares equal to 60% of the common shares computed to include all projected conversions of all convertible debt and any other classes of Preferred Stock as if the conversions had taken place at the stated conversion price per share (i.e. for the avoidance of doubt – “fully diluted” as if such conversion had occurred prior to the Series A conversion) on any matter with holders of Common Stock for any vote required to approve any action, which Florida law provides may or must be approved by vote or consent of the holders of other series of voting shares and the holders of Common Stock or the holders of other securities entitled to vote, if any.

 

The Series A Preferred Stock is classified as mezzanine equity as a result of the Company not having enough authorized common shares to be able to issue common shares upon their conversion.

 

Series B Convertible Preferred Stock 

 

In February 2015, the Company designated 3,000,000 shares of Preferred Stock as Series B Convertible Preferred Stock. 

 

The Series B Preferred Stock was designated in February 2015, has a par value of $.001, is not redeemable, is senior to any other class or series of outstanding Preferred Stock, except the Series A Preferred Stock, or Common Stock and does not bear dividends. The Series B Preferred Stock has a liquidation preference immediately after any Senior Securities, as defined and currently the Series A Preferred Stock, and of an amount equal to $2.00 per share. Holders of the Series B Preferred Stock have a right to convert all or any part of the Series B Preferred Shares and will receive and equal number of common shares at the conversion price of $2.00 per share. The Series B Preferred Stockholders have a right to vote on any matter with holders of Common Stock and shall have a number of votes equal to that number of Common Shares on a one-to-one basis.

 

There are 2,588,693 shares of Series B Convertible Preferred Stock outstanding as of September 30, 2023.

 

The Series B Preferred Stock is classified as mezzanine equity as a result of the Company not having enough authorized common shares to be able to issue common shares upon their conversion.

 

 

 
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Series C Convertible Preferred Stock

 

In May 2018, the Company designated 3,000,000 shares of Preferred Stock as Series C Convertible Preferred Stock.  

 

The Series C Preferred Stock has a par value of $.001, is not redeemable, is senior to any other class or series of outstanding Preferred Stock, except the Series A and Series B Preferred Stock, or Common Stock and does not bear dividends. The Series C Preferred Stock has a liquidation preference immediately after any Senior Securities, as defined and currently the Series A and B Preferred Stock, and of an amount equal to $2.00 per share. Holders of the Series C Preferred Stock have a right to convert all or any part of the Series C Preferred Shares and will receive an equal number of common shares at the conversion price of $0.15 per share. The Series C Preferred Stockholders have a right to vote on any matter with holders of Common Stock and shall have a number of votes equal to that number of Common Shares on a one-to-one basis.

 

There are no shares of Series C Convertible Preferred Stock outstanding as of September 30, 2023.  There are approximately $553,100 in convertible notes payable convertible into Series C Convertible Preferred Stock which compromise some of the common stock equivalents calculated in Note 1. 

 

The Series C Preferred Stock is classified as mezzanine equity as a result of the Company not having enough authorized common shares to be able to issue common shares upon their conversion.

 

Series D Convertible Preferred Stock

 

On July 6, 2020, September 15, 2021 and March 20, 2022, the Company amended its Series D Designation from January 14, 2020. These Amendments changed the number of shares to 10,000,000 shares of the authorized 100,000,000 shares of the Company's $0.001 par value preferred stock as the Series D Convertible Preferred Stock ("the Series D Preferred Shares.") 

 

Series D Preferred shares have the following features: (i) 6% Cumulative Annual Dividends payable on the purchase value in cash or common stock of the Company at the discretion of the Board and payment is also at the discretion of the Board, which may decide to cumulate to future years; (ii) Any time after 12 months from issuance an option to convert to common stock at the election of the holder @ 75% of the 30 day average market closing price (for previous 30 business days) divided into $5.00. ; (iii) Automatic conversion of the Series D Preferred Stock shall occur without consent of holders upon any national exchange listing approval and the registration effectiveness of common stock underlying the conversion rights. The automatic conversion to common from Series D Preferred shall be @ 75% of the 30 day average market closing price (for previous 30 business days) divided into $5.00, which shall be post-reverse split as may be necessary for any Exchange listing (iv) Registration Rights – the Company has granted Piggyback Registration Rights for common stock underlying conversion rights in the event it files any other Registration Statement (other than an S-1 that the Company may file for certain conversion common shares for the convertible note financing that was arranged and funded in 2019). Further, the Company will file, and pursue to effectiveness, a Registration Statement or offering statement for common stock underlying the Automatic Conversion event triggered by an exchange listing. (v) Liquidation Rights - $5.00 per share plus any accrued unpaid dividends – subordinate to Series A, B, and C Preferred Stock receiving full liquidation under the terms of such series. The Company has redemption rights for the first year following the Issuance Date to redeem all or part of the principal amount of the Series D Preferred Stock at between 115% and 140%.

 

As of September 30, 2023, there are 46,649 Series D Preferred shares outstanding.

 

The Series D Preferred Stock is classified as mezzanine equity as a result of the Company not having enough authorized common shares to be able to issue common shares upon their conversion.

 

Series E Convertible Preferred Stock

 

On March 20, 2022, the Company amended its Series E Designation from November 10, 2021.  As amended, the Company designated 10,000,000 shares of the authorized 100,000,000 shares of the Company's $0.001 par value preferred stock as the Series E Convertible Preferred Stock ("the Series E Preferred Shares").

 

Series E Preferred shares have the following features: (i) 6% Cumulative Annual Dividends payable on the purchase value in cash or common stock of the Company at the discretion of the Board and payment is also at the discretion of the Board, which may decide to cumulate to future years; (ii) Any time after 12 months from issuance an option to convert to common stock at the election of the holder @ 75% of the 30 day average market closing price (for previous 30 business days) divided into $5.00. ; (iii) Automatic conversion of the Series E Preferred Stock shall occur without consent of holders upon any national exchange listing approval and the registration effectiveness of common stock underlying the conversion rights. The automatic conversion to common from Series E Preferred shall be @ 75% of the 30 day average market closing price (for previous 30 business days) divided into $5.00, which shall be post-reverse split as may be necessary for any Exchange listing (iv) Registration Rights – the Company has granted Piggyback Registration Rights for common stock underlying conversion rights in the event it files any other Registration Statement (other than an S-1 that the Company may file for certain conversion common shares for the convertible note financing that was arranged and funded in 2019). Further, the Company will file, and pursue to effectiveness, a Registration Statement or offering statement for common stock underlying the Automatic Conversion event triggered by an exchange listing. (v) Liquidation Rights - $5.00 per share plus any accrued unpaid dividends – subordinate to Series A, B, C and D Preferred Stock receiving full liquidation under the terms of such series. The Company has redemption rights for the first year following the Issuance Date to redeem all or part of the principal amount of the Series E Preferred Stock at between 115% and 140%.

 

 

 
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As of September 30, 2023, there are 2,243,507 Series E Preferred shares outstanding.  2,043,507 were a result of exchanges of accounts payable, financing arrangements and lease agreements in 2022.  200,000 were as a result of the acquisition of land in 2023. The 200,000 Series E Preferred shares were given a fair value by a third-party valuation of $6.13 per share, for which they were recorded as of September 30, 2023.  In the prior year, the valuation of the Series E Shares was $6.53.  In this case, the difference between the amount of accounts payable, financing arrangements and lease agreement balances of $10,987,307 or $2,356,794 was recorded as a loss on debt extinguishment for 2022.

 

The Series E Preferred Stock is classified as mezzanine equity as a result of the Company not having enough authorized common shares to be able to issue common shares upon their conversion.

 

Common Stock

 

As of September 30, 2023, we had authorized 4,500,000,000 shares of Common Stock, of which 1,882,579,354 common shares are issued and outstanding.

 

Common Stock Issued for Conversion of Debt

 

During the year ended December 31, 2022, the Company issued 333,871,496 common shares valued at $1,439,894 for $1,076,782 of principal, interest, penalties and fees and recorded a loss on extinguishment of $363,112.  During the nine months ended September 30, 2023, the Company issued 571,848,487 common shares valued at $917,088 for $655,324 of principal, interest, penalties and fees and recorded a gain on extinguishment of $466,380. In addition, $728,143 of derivative liabilities were eliminated with these conversions.

 

Common Stock Issued for Services

 

On August 6, 2023, the Board granted 1,000,000 shares of common stock of the Company to a consultant for his consulting services rendered to the Company. The shares are to be considered fully vested upon grant and represent partial payment for past services rendered.  These shares were recorded to expense at $1,100 for the nine months ended September 30, 2023.

 

On September 8, 2023, the Board of Directors granted 52,830,333 shares of common stock to Edward Cabrera, Eduardo Cabrera and Mawe Capital Management, LLC for a $75,000 fee in relation to raising capital. The shares are to be considered fully vested upon grant. The share numbers have been calculated based on the average 5-day price per share of TPTW common stock of $0.00144 to get 52,830,333 shares. The common shares will have piggyback rights and shall be registered in any filed registration form. If the average closing price during the five prior to Friday, September 30, 2023 is more than 50% of the five days prior to the signing of this agreement, then the cash difference from the $75,000 may be applied to reduce any Network 1 advisory fee (if there are any) for the NASDAQ listing process.  These shares were recorded as expense at $85,628 for the nine months ended September 30, 2023.

 

Subscription Payable

 

As of September 30, 2023, the Company has recorded $40,435 in stock subscription payable, which equates to the fair value on the date of commitment, of the Company’s commitment to issue the following common shares:

 

Unissued shares for TPT consulting agreements

 

 

3,000,000

 

Shares receivable under terminated acquisition agreement

 

 

(3,096,181 )

Net commitment

 

 

(96,181 )

 

During the year ended December 31, 2021, the Company agreed to a consulting agreement with one of its newest directors, John Wharton, which Agreement was for the issuance of 3,000,000 shares of common stock to vest over two years starting July 30, 2021. These shares were valued at $42,600 and are being expenses at $1,775 per month. As of September 30, 2023, 3,000,000 common shares have vested and $42,600 expensed.

 

 

 
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Effective November 1, 2017, the Company entered into an agreement to acquire Hollywood Rivera, LLC and HRS Mobile LLC (“HRS”). In March 2018, the HRS acquisition was rescinded and 3,096,181 shares of common stock which were issued as consideration are being returned by the recipients. As such, as of September 30, 2023 and 2022 the shares for the HRS transaction are reflected as subscriptions receivable based on their par value.

 

Warrants Issued with Convertible Promissory Notes

 

As of September 30, 2023, there were 129,116,666 warrants outstanding that expire in five years or in the years ended December 31, 2024 -2027.  As part of the Convertible Promissory Notes payable – third party issuance in Note 5, the Company issued 1,000,000 warrants to purchase 1,000,000 common shares of the Company at 70% of the current market price.  Current market price means the average of the three lowest trading prices for our common stock during the ten-trading day period ending on the latest complete trading day prior to the date of the respective exercise notice.  However, if a required registration statement, registering the underlying shares of the Convertible Promissory Notes, is declared effective on or before June 11, 2019 to September 11, 2019, then, while such Registration Statement is effective, the current market price shall mean the lowest volume weighted average price for our common stock during the ten-trading day period ending on the last complete trading day prior to the conversion date.  

 

On January 31, 2022, TPT Global Tech, Inc. issued warrants in conjunction with the issuance of Talos and Blue Lake Note Agreements.  Warrants to purchase 18,116,666 shares of common stock at $0.015 per share provided, however, that if the Company consummates an uplist offering on or before July 6, 2022 then the exercise price shall be 110% of the offering price at which the uplist offering is made.

 

The warrants issued under these convertible promissory notes were considered derivative liabilities valued at $110,419 of the total $4,203,788 derivative liabilities as of December 31, 2022. See Note 5.

 

Common Stock Reservations

 

The Company has reserved internally 1,000,000 shares of Common Stock of the Company for the purpose of raising funds to be used to pay off debt described in Note 5.

 

We have reserved 20,000,000 shares of Common Stock of the Company to grant to certain employees and consultants as consideration for services rendered and that will be rendered to the Company.

 

Agreement to Convert Debt

 

On July 31, 2023, the Company and Michael Murphy, shareholder and debt holder, entered into a Conversion Shares Purchase Agreement by which Mr. Murphy has agreed to an automatic conversion of his outstanding principal debt, as well as related accrued interest if elected by Mr. Murphy, into shares of the Company’s Series E Preferred Stock or an equity stock that subsequent to the agreement the Company may have issued to any party that has favorable terms to the Series E Preferred Stock, upon the Company’s intended uplist to a major exchange in conjunction with its capital raise through the capital markets.  This principal amount is $2,397,329 as of September 30, 2023.

 

Non-Controlling Interests

 

QuikLAB Mobile Laboratories

 

In July and August 2020, the Company formed Quiklab 1 LLC, QuikLAB 2, LLC, QuikLAB 3, LLC and QuikLAB 4, LLC.  QuikLAB 4, LLC was subsequently dissolved.  It was the intent to use these entities as vehicles into which third parties would invest and participate in owning QuikLAB Mobile Laboratories.  As of September 30, 2023, Quiklab 1 LLC, QuikLAB 2, LLC and QuikLAB 3, LLC have received an investment of $470,000, of which Stephen Thomas and Rick Eberhardt, CEO and COO of the Company, have invested $100,000 in QuikLAB 2, LLC.  During the year ended December 31, 2021, one investor entered into an agreement at their request, to have their investment returned.  $10,000 of this investment was returned with the remaining $60,000 being reclassified to accounts payable in the balance sheet as of September 30, 2023.

 

The third party investors and Mr. Thomas and Mr. Eberhart, will benefit from owning 20% of QuikLAB Mobile Laboratories specific to their investments.  The Company owns the other 80% ownership in the QuickLAB Mobile Laboratories.  The net loss attributed to the non-controlling interests from the QuikLAB Mobile Laboratories included in the statement of operations for the nine months ended September 30, 2023 and 2022 and is $12 and $13,925, respectively.

 

 

 
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Other Non-Controlling Interests

 

TPT Strategic, Air Fitness and TPT Asia are other non-controlling interests in which the Company owns 0%, 75%, and 78%, respectively.  There is little activity in any of these entities.  The net loss attributed to these non-controlling interests included in the statement of operations for the nine months ended September 30, 2023 and 2022 is $9,376 and $5,380, respectively.

 

As a result of the Agreement and Plan of Merger among TPT SpeedConnect and Asberry 22 Holdings, net income of 14% or $47,015 was accounting for as a noncontrolling interest in the statement of operations for the nine months ended September 30, 2023. 

 

NOTE 8 - COMMITMENTS AND CONTINGENCIES

 

Accounts Payable and Accrued Expenses 

 

Accounts payable:

 

2023

 

 

2022

 

Related parties (1)

 

$1,186,459

 

 

$831,502

 

General operating

 

 

5,511,334

 

 

 

5,395,422

 

Accrued interest on debt (2)

 

 

2,732,093

 

 

 

2,095,955

 

Credit card balances

 

 

152,217

 

 

 

167,517

 

Accrued payroll and other expenses

 

 

1,574,182

 

 

 

951,022

 

Taxes and fees payable

 

 

642,640

 

 

 

642,640

 

Total

 

$11,798,925

 

 

$10,084,058

 

 _______________

 

(1)

Relates to amounts due to management and members of the Board of Directors according to verbal and written agreements that have not been paid as of period end.