CBDW 10-Q

1606 Corp. (CBDW)

10-Q 2024-11-15 For: 2024-09-30

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Added on April 10, 2026

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Title of Each Class		Trading Symbol(s)		Name of each exchange on which registered
Not applicable		Not applicable		Not applicable

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

PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements.	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	15

Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	17

Item 4.	Controls and Procedures.	18

PART II–OTHER INFORMATION

Item 1	Legal Proceedings	19

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	19

Item 5.	Other Information	19

Item 6.	Exhibits.	19

SIGNATURES		20

	September 30,
Assets		2024 (Unaudited)		December 31, 2023
Current Assets
Cash	$	26,782		$	48,941
Accounts receivable		-			3,600
Notes receivable					21,500
Inventory		-			72,853
Prepaids & other current assets		17,027			1,444
Total Current Assets		43,809			148,338

Total Assets	$	43,809		$	148,338

Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities
Accounts payable and accrued liabilities	$	467,305		$	295,041
Accrued interest		52,884			10,086
Note payable to related party		63,456			63,456
Convertible notes, net of discount		249,008			51,086
Derivative liability		86,552			193,026
Note payable to shareholder		1,220,550			950,550
Total Current Liabilities		2,139,755			1,563,245
Total Liabilities		2,139,755			1,563,245

Commitments and Contingencies (Note 6)

Stockholders’ Equity (Deficit)
Undesignated Preferred Stock, par value $0.0001; 39,999,900 authorized; no shares issued and outstanding		-			-
Class A Convertible Preferred Stock, par value $0.0001 per share, 60,000,000 shares authorized; 59,880,127 and 56,282,599 shares issued and outstanding, respectively		5,988			5,628
Series B Preferred Stock, par value $0.0001 per share, 100 shares authorized; 90 and 0 shares issued and outstanding, respectively		-			-
Common stock, par value $0.0001 per share, 5,000,000,000 shares authorized; 87,600,557 and 58,582,469 shares issued and outstanding, respectively		8,760			5,858
Additional Paid-in Capital		4,506,602			995,638
Accumulated Deficit		(6,617,296	)		(2,422,031	)
Total Stockholders’ Equity (Deficit)		(2,095,946	)		(1,414,907	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	43,809		$	148,338

	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2024			2023			2024			2023
Revenue, net of discounts	$	-			78		$	7,195		$	1,553

Cost of goods sold		-			-			7,313			4,781

Gross profit (loss)		-			78			(118	)		(3,228	)

Operating Expenses
Selling, general and administrative		3,224,679			492,487			3,911,339			1,245,514
Write-off of note receivable and investments		21,500			-			21,500			65,000
Total operating expenses		3,246,179			492,487			3,932,839			1,310,514

Operating loss		(3,246,179	)		(492,409	)		(3,932,957	)		(1,313,742	)

Other Income (Expenses)
Interest expense		(98,322	)		(31,527	)		(406,746	)		(36,569	)
Gain (loss) on debt extinguishment		102,579			-			102,579			-
Change in fair value of derivative liabilities		(327,714	)		(42,372	)		41,859			(42,372	)
Total other expenses		(323,457	)		(73,899	)		(262,308	)		(5,803	)

Loss from operations before income taxes		(3,569,636	)		(566,308	)		(4,195,265	)		(1,392,683	)

Provision for income taxes		-			-			-			-

Net Loss	$	(3,569,636	)	$	(566,308	)	$	(4,195,265	)	$	(1,392,683	)

Net loss per share – basic and diluted	$	(0.04	)	$	(0.01	)	$	(0.06	)	$	(0.03	)

Weighted average common shares – basic and diluted		81,870,709			46,690,474			70,124,866			44,031,600

*Nine Months Ended September 30, 2023*	Class A Convertible						Series B								Additional						Total Stockholders'
	Preferred Stock						Preferred Stock				Common stock				Paid in			Accumulated			Equity
	Shares			Amount			Shares		Amount		Shares		Amount		Capital			Deficit			(Deficit)
Balance as of December 31, 2022		56,635,000			5,663			-		-		37,428,394		3,742		236,842			(841,298	)		(595,051	)
Share conversions		(202,405	)		(20	)		-		-		5,060,125		506		(486	)		-			-
Preferred stock issued for services		200,004			20			-		-		-		-		109,982			-			110,002
Common stock issued for cash		-			-			-		-		825,000		83		412,417			-			412,500
Common stock issued for services		-			-			-		-		3,945,087		395		107,605			-			108,000
Net loss		-			-			-		-		-		-		-			(1,392,683	)		(1,392,683	)
Balance as of September 30, 2023		56,632,599			5,663			-		-		47,258,606		4,726		866,360			(2,233,981	)		(1,357,232	)

*Nine Months Ended September 30, 2024*	Class A Convertible						Series B								Additional						Total Stockholders'
	Preferred Stock						Preferred Stock				Common stock				Paid in			Accumulated			Equity
	Shares			Amount			Shares		Amount		Shares		Amount		Capital			Deficit			(Deficit)
Balance as of December 31, 2023		56,282,599			5,628			-		-		58,582,469		5,858		995,638			(2,422,031	)		(1,414,907	)
Share conversions		(442,472	)		(44	)		-		-		11,061,800		1,106		(1,062	)		-			-
Preferred stock issued for services		4,040,000			404			90		-		-		-		2,989,596			-			2,990,000
Common stock issued for cash, Net of Offering Cost		-			-			-		-		13,429,645		1,343		314,590			-			315,933
Common stock issued for services		-			-			-		-		900,000		90		43,310			-			43,400
Common stock issued upon note conversions		-			-			-		-		3,626,643		363		164,530			-			164,893
Net loss		-			-			-		-		-		-		-			(4,195,265	)		(4,195,265	)
Balance as of September 30, 2024		59,880,127			5,988			90		-		87,600,557		8,760		4,506,602			(6,617,296	)		(2,095,946	)

*Three Months Ended September 30, 2023*	Class A Convertible						Series B								Additional						Total
	Preferred Stock						Preferred Stock				Common stock				Paid in			Accumulated			Stockholders'
	Shares			Amount			Shares		Amount		Shares		Amount		Capital			Deficit			Equity
Balance as of June 30, 2023		56,632,599			5,663			-		-		46,158,606		4,616		841,470			(1,667,673	)		(815,924	)
Share conversions		-			-			-		-		100,000		10		(10	)					-
Common stock issued for cash		-			-			-		-		1,000,000		100		24,900			-			25,000
Net loss		-			-			-		-		-		-		-			(566,308	)		(566,308	)
Balance as of September 30, 2023		56,632,599			5,663			-		-		47,258,606		4,726		866,360			(2,233,981	)		(1,357,232	)

*Three Months Ended September 30, 2024*	Class A Convertible						Series B								Additional						Total
	Preferred Stock						Preferred Stock				Common stock				Paid in			Accumulated			Stockholders'
	Shares			Amount			Shares		Amount		Shares		Amount		Capital			Deficit			Equity
Balance as of June 30, 2024		55,920,127			5,592			90		-		75,545,390		7,554		1,111,881			(3,047,660	)		(1,922,633	)
Share conversions		(40,000	)		(4	)		-		-		1,000,000		100		(96	)		-			-
Preferred stock issued for services		4,000,000			400			-		-		-		-		2,929,600			-			2,930,000
Common stock issued for cash, Net of Offering Cost		-			-			-		-		9,500,237		950		189,977			-			190,927
Common stock issued upon note conversions		-			-			-		-		1,554,930		156		123,790			-			123,946
Settlement of derivative liability		-			-			-		-		-		-		151,450			-			151,450
Net loss		-			-			-		-		-		-		-			(3,569,636	)		(3,569,636	)
Balance as of September 30, 2024		59,880,127			5,988			90		-		87,600,557		8,760		4,506,602			(6,617,296	)		(2,095,946	)

	Nine Months Ended			Nine Months Ended
	September 30,			September 30,
	2024			2023
Cash Flows from Operating Activities
Net loss	$	(4,195,265	)	$	(1,392,683	)
Adjustments to reconcile net loss to net cash used in operating activities:
Shares issued for services provided		3,033,400			218,002
Amortization of debt discount		292,470			31,482
Change in fair value of derivative liabilities		(41,859	)		42,372
(Gain) loss on debt extinguishment		(102,579	)		-
Financing cost		-			225,952
Write-off of note receivable and investments		21,500			65,000
Impairment of inventory		72,853			-
Changes in operating assets and liabilities:
Accounts receivable		3,600			(3,600	)
Inventory		-			(16,028	)
Prepaids & other current assets		(15,583	)		3,648
Accounts payable and accrued liabilities		172,264			229,019
Accrued interest		48,500			5,087
Net cash used in operating activities		(710,699	)		(591,749	)

Cash Flows from Investing Activities
Investment in operating companies		-			(65,000	)
Investment in note receivable		-			(21,500	)
Net cash used in investing activities		-			(86,500	)

Cash Flows from Financing Activities
Increase in note payable to shareholder		270,000			20,000
Proceeds from convertible notes		419,500			175,000
Repayment of convertible notes		(316,893	)		-
Proceeds from sale of common stock		315,933			412,500
Net cash provided by financing activities		688,540			607,500

Net increase (decrease) in cash		(22,159	)		(70,749	)

Cash, beginning of period		48,941			105,065

Cash, end of period	$	26,782		$	34,316

Supplemental disclosures of cash items
Interest paid	$	-		$	-
Income tax paid	$	-		$	-

Supplemental schedule of non-cash investing and financing activities
Discount on convertible notes payable from derivative liability	$	123,280		$	-
Conversion of loans and accrued interest into common stock	$	79,577

Balance - December 31, 2023	$	193,026
Additions		123,280
Settlements		(187,895	)
Change in fair value		(41,859	)
Balance - September 30, 2024	$	86,552

	September 30, 2024			December 31, 2023
Convertible notes	$	357,270		$	204,488
Unamortized discounts		(108,262	)		(153,402	)
Convertible notes, net	$	249,008		$	51,086

-	11,061,800 shares of its common stock upon conversion of 442,472 shares of Class A preferred stock;
-	13,429,645 shares of its common stock for a total purchase price of $315,933, net of offering costs of $12,125;
-	900,000 shares of its common stock for various services provided, valued at $43,400 based on the closing market price of the common shares on the grant dates;
-	3,626,643 shares of its common stock with a fair value of $164,893 based on the closing market price on the conversion dates upon conversion of convertible notes and accrued interest in the amount of $79,577, resulting in net loss on debt extinguishment of $85,316.

1)	lack of a functioning audit committee resulting in ineffective oversight in the establishment and monitoring of required internal control and procedures; and

2)	inadequate segregation of duties consistent with control objectives.

Exhibit Number		Name of Exhibit
31.1		Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. (1)

31.2		Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. (1)

32.1		Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002. (1)

101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
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101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase
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104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

	1606 Corp.

Dated: November 15, 2024	By:	/s/ Austen Lambrecht
		Austen Lambrecht
		Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial and Accounting Officer)

2024	$	110,206
2025		1,531,070
Total	$	1,641,276