UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~March~~June 3130, 2024

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

For the transition period from ______________ to _____________

Commission file number: 333-140645

Clubhouse Media Group, Inc.

(Exact name of registrant as specified in its charter)

Nevada		99-0364697
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3651 Lindell Road, D517 Las Vegas, Nevada		89103
(Address of principal executive offices)		(Zip Code)

(702) 479-3016

(Registrant’s telephone number, including area code)

N/A

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

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

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

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

Yes ☒ No ☐

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

Yes ☒ No ☐

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

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

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

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

As of ~~May~~August 810, 2024, there were 16,372,179,486 shares of common stock, par value $0.000001 per share, of the registrant issued and outstanding.

FORM 10-Q

CLUBHOUSE MEDIA GROUP, INC.

INDEX

	Page	~~Page~~
PART I. Financial Information	3	3
Item 1. Financial Statements	~~Item 1. Financial Statements~~
	Consolidated Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023	3
Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and December 31, 2023	3
	Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023 (Unaudited)	4
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)	4
	Consolidated Statement of Stockholders’ Equity (Deficit) for the Three Months Ended March 31, 2024 and 2023 (Unaudited)	5
Consolidated Statement of Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)	5
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 (Unaudited)	6
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 (Unaudited)	6
	Consolidated Notes to Unaudited Financial Statements as of March 31, 2024 and 2023	7
Consolidated Notes to Unaudited Financial Statements as of June 30, 2024	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~38	37
Item 3. Quantitative and Qualitative Disclosures About Market Risk	~~Item 3. Quantitative and Qualitative Disclosures About Market Risk~~46	44
Item 4. Controls and Procedures	~~Item 4. Controls and Procedures~~46	45
PART II. Other Information	47	45
Item 1. Legal Proceedings	~~Item 1. Legal Proceedings~~47	45
Item 1A. Risk Factors	~~Item 1A. Risk Factors~~47	45
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~47	45
Item 3. Defaults Upon Senior Securities	~~Item 3. Defaults Upon Senior Securities~~47	45
Item 4. Mine Safety Disclosures	~~Item 4. Mine Safety Disclosures~~47	45
Item 5. Other Information	~~Item 5. Other Information~~47	46
Item 6. Exhibits	~~Item 6. Exhibits~~48	46

PART I. FINANCIAL INFORMATION

Clubhouse Media Group, Inc.

Consolidated Balance Sheets

	As of March 31,2024			As of December 31,2023
	As of June 30, 2024			As of December 31, 2023
	(Unaudited)			~~(Audited)~~
Assets
Current assets:
Cash and cash equivalents	$	1489,~~840~~417		$	125,207
Accounts receivable, net		141,~~891~~960			14,848
Discontinued operations - current		~~210~~81,~~490~~307			199,619
Total current assets		~~240~~172,~~221~~684			339,674
Intangibles		~~416~~404,~~817~~761			445,582
Discontinued operations - long term		1412,~~712~~861			16,707
Total assets	$	~~671~~590,~~750~~306		$	801,963
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Accounts payable and accrued liabilities	$	2,~~342~~629,~~708~~474		$	2,127,857
Convertible notes payable, net		4,162,778			4,162,778
Shares to be issued		~~393~~468,042			318,042
Derivative liability		2,~~231~~175,~~297~~018			873,913
Discontinued operations - current		~~490~~570,~~835~~789			510,173
Total current liabilities		910,~~620~~006,~~660~~101			7,992,763
Total liabilities		910,~~620~~006,~~660~~101			7,992,763
Commitments and contingencies		–-			–-
Stockholders’ equity (deficit):
Preferred stock, par value $0.001, authorized 50,000,000 shares; 1 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		–-			–-
Common stock, par value $0.000001, authorized 25,000,000,000 shares; 16,372,179,486 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		16,373			16,373
Additional paid-in capital		27,662,827			27,662,827
Accumulated deficit		(3637,~~944~~410,~~234~~841	)		(35,184,891	)
Total Clubhouse Media stockholders’ equity (deficit)		(9,~~265~~731,~~034~~641	)		(7,505,691	)
Non-controlling interest		~~316~~315,~~124~~846			314,891
Total stockholders’ deficit		(89,~~948~~415,~~910~~795	)		(7,190,800	)
Total liabilities and stockholders’ equity (deficit)	$	~~671~~590,~~750~~306		$	801,963

See Accompanying Notes to Consolidated Financial Statements.

Clubhouse Media Group, Inc.

Consolidated Statements of Operations

(Unaudited)

	For the Three Months Ended June 30, 2024			For the Three Months Ended June 30, 2023			For the Six Months Ended June 30, 2024			For the Six Months Ended June 30, 2023
							(Unaudited)			(Unaudited)

Total revenue, net	$	417,403		$	347,474		$	818,949		$	699,251
Cost of sales		315,079			218,004			588,325			436,892
Gross profit		102,324			129,470			230,624			262,359

Operating expenses:
Advertising expenses		1,196			9,131			3,887			24,174
Selling, general, and administrative		110,201			117,049			198,238			273,799
Salaries & wages		230,712			339,233			462,345			461,130
Professional and consultant fees		10,095			44,005			92,837			73,931
Total operating expenses		352,204			509,418			757,307			833,034

Operating Income (Loss)		(249,880	)		(379,948	)		(526,683	)		(570,675	)

Other (income) expenses:
Interest expense, net		114,920			200,026			301,732			371,762
Amortization of debt discounts, net		-			13,153			-			140,144
Other (income) expense, net		-			(1,731	)		-			(15,268	)
Gain related to debt activities		71,772			-			(77	)		-
Change in fair value of derivative liability		(56,279	)		(245,343	)		1,301,105			1,137,479
Total other (income) expenses		130,413			(33,895	)		1,602,760			1,634,117

Income (Loss) before income taxes		(380,293	)		(346,053	)		(2,129,443	)		(2,204,792	)

Income tax (benefit) expense		-			-			-			-

Net income (loss) from continuing operations		(380,293	)		(346,053	)		(2,129,443	)		(2,204,792	)
Net income (loss) from discontinued operations - non-controlling interest		(278	)		(12,158	)		955			(156,277	)
Net income (loss) from discontinued operations		(86,314	)		(13,711	)		(96,507	)		(233,172	)
Net Income (Loss) from shareholders	$	(466,607	)	$	(359,764	)	$	(2,225,950	)	$	(2,437,964	)

Basic weighted average shares outstanding		16,372,179,486			8,480,503,383			16,372,179,486			8,109,652,138
Diluted weighted average shares outstanding		16,372,179,486			8,480,503,383			16,372,179,486			8,109,652,138

Basic - net loss from continuing operations per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Diluted - net loss from continuing operations per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Basic - net loss from discontinued operations per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Diluted - net loss from discontinued operations per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Basic - net loss per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Diluted - net loss per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

	For the Three Months Ended March 31, 2024			For the Three Months Ended March 31, 2023
	(Unaudited)			(Unaudited)
Total revenue, net	$	401,546		$	351,777
Cost of sales		273,246			218,888
Gross profit		128,300			132,889
Operating expenses:
Advertising expenses		2,691			15,043
Selling, general, and administrative		88,037			156,748
Salaries & wages		231,633			121,897
Professional and consultant fees		82,742			29,926
Total operating expenses		405,103			323,614
Operating Income (Loss)		(276,803	)		(190,725	)
Other (income) expenses:
Interest expense, net		186,812			171,736
Amortization of debt discounts, net		–			126,991
Other (income) expense, net		–			(13,537	)
Gain related to debt activities		(71,849	)		-
Change in fair value of derivative liability		1,357,384			1,382,822
Total other (income) expenses		1,472,347			1,668,012
Income (Loss) before income taxes		(1,749,150	)		(1,858,737	)
Income tax (benefit) expense		-			-
Net income (loss) from continuing operations		(1,749,150	)		(1,858,737	)
Net income (loss) from discontinued operations - non-controlling interest		1,233			(144,119	)
Net income (loss) from discontinued operations		(10,193	)		(219,463	)
Net Income (Loss) from shareholders	$	(1,759,343	)	$	(2,078,200	)
Basic weighted average shares outstanding		16,372,179,486			7,696,310,840
Diluted weighted average shares outstanding		16,372,179,486			7,696,310,840
Basic - net loss from continuing operations per share	$	(0.00	)	$	(0.00	)
Diluted - net loss from continuing operations per share	$	(0.00	)	$	(0.00	)
Basic - net loss from discontinued operations per share	$	(0.00	)	$	(0.00	)
Diluted - net loss from discontinued operations per share	$	(0.00	)	$	(0.00	)
Basic - net loss per share	$	(0.00	)	$	(0.00	)
Diluted - net loss per share	$	(0.00	)	$	(0.00	)

See Accompanying Notes to Consolidated Financial Statements.

Clubhouse Media Group, Inc.

Consolidated Statements of Stockholders’ Equity (Deficit)

(Unaudited)


	Preferred Stock				Common Stock									Total
	50,000,000 shares authorized				25,000,000,000 shares authorized									Clubhouse Media
	Shares		Par Value $0.001		Shares		Par Value $0.000001		Additional Paid in		Accumulated			Stockholders’ Equity			Non-controlling			Total Equity
	Issued		per share		Issued		per share		Capital		Deficit			(Deficit)			Interest			(Deficit)
Balance, December 31, 2022		1	$	-		6,830,378,163	$	6,831	$	24,744,738	$	(32,814,971	)	$	(8,063,402	)	$	385,166		$	(7,678,236	)

Reclass of derivative liability on conversion		-		-		-		-		189,352		-			189,352			-			189,352
Conversion of convertible debt		-		-		1,431,944,776		1,432		182,822		-			184,254			-			184,254
Net Income (Loss)				-		-		-		-		(2,078,200	)		(2,078,200	)		(144,119	)		(2,222,319	)
Balance, March 31, 2023 (Unaudited)		1	$	-		8,262,322,939	$	8,263	$	25,116,912	$	(34,893,171	)	$	(9,767,996	)	$	241,047			(9,526,949	)

Shares issued for debt conversions		-		-		377,620,000		378		33,904		-			34,282			-			34,282
Net Income (Loss)		-		-		-		-				(359,764	)		(359,764	)		(12,158	)		(371,922	)
Balance, June 30, 2023		1	$	-		8,639,942,939	$	8,641	$	25,150,816	$	(35,252,935	)	$	(10,093,478	)	$	228,889		$	(9,864,589	)

Balance, December 31, 2023		1	$	-		16,372,179,486	$	16,373	$	27,662,827	$	(35,184,891	)	$	(7,505,691	)	$	314,891		$	(7,190,800	)

Net Income (Loss)				-		-		-		-		(1,759,343	)		(1,759,343	)		1,233			(1,758,110	)
Balance, March 31, 2024 (Unaudited)		1	$	-		16,372,179,486	$	16,373	$	27,662,827	$	(36,944,234	)	$	(9,265,034	)	$	316,124			(8,948,910	)
Balance		1	$	-		16,372,179,486	$	16,373	$	27,662,827	$	(36,944,234	)	$	(9,265,034	)	$	316,124			(8,948,910	)

Net Income (Loss)		-		-		-		-		-		(466,607	)		(466,607	)		(278	)		(466,885	)
Balance, June 30, 2024		1	$	-		16,372,179,486	$	16,373	$	27,662,827	$	(37,410,841	)	$	(9,731,641	)	$	315,846		$	(9,415,795	)
Balance		1	$	-		16,372,179,486	$	16,373	$	27,662,827	$	(37,410,841	)	$	(9,731,641	)	$	315,846		$	(9,415,795	)

	Preferred Stock 50,000,000 shares authorized				Common Stock 25,000,000,000 shares authorized									Total Clubhouse Media						Total
			Par Value				Par Value		Additional					Stockholders’			Non-			Stockholders’
	Shares Issued		$0.001 per share		Shares Issued		$0.000001 per share		Paid in Capital		Accumulated Deficit			Equity (Deficit)			controlling Interest			Equity (Deficit)
Balance, December 31, 2022		1	$	-		6,830,378,163	$	6,831	$	24,744,738	$	(32,814,971	)	$	(8,063,402	)	$	385,166		$	(7,678,236	)
Reclass of derivative liability on conversion		-		-		-		-		189,352		-			189,352			-			189,352
Conversion of convertible debt		-		-		1,431,944,776		1,432		182,822		-			184,254			-			184,254
Net Income (Loss)				-		-		-		-		(2,078,200	)		(2,078,200	)		(144,119	)		(2,222,319	)
Balance, March 31, 2023 (Unaudited)		1	$	-		8,262,322,939	$	8,263	$	25,116,912	$	(34,893,171	)	$	(9,767,996	)	$	241,047			(9,526,949	)
Balance		1	$	-		8,262,322,939	$	8,263	$	25,116,912	$	(34,893,171	)	$	(9,767,996	)	$	241,047			(9,526,949	)
Balance, December 31, 2023		1	$	-		16,372,179,486	$	16,373	$	27,662,827	$	(35,184,891	)	$	(7,505,691	)	$	314,891		$	(7,190,800	)
Net Income (Loss)		-		-		-		-		-		(1,759,343	)		(1,759,343	)		1,233			(1,758,110	)
Balance, March 31, 2024 (Unaudited)		1	$	-		16,372,179,486	$	16,373	$	27,662,827	$	(36,944,234	)	$	(9,265,034	)	$	316,124			(8,948,910	)
Balance		1	$	-		16,372,179,486	$	16,373	$	27,662,827	$	(36,944,234	)	$	(9,265,034	)	$	316,124			(8,948,910	)

See Accompanying Notes to Consolidated Financial Statements.

Clubhouse Media Group, Inc.

Consolidated Statements of Cash Flow

(Unaudited)

	For the Six Months Ended June 30, 2024			For the Six Months Ended June 30, 2023
	(Unaudited)			(Unaudited)
Cash flows from operating activities:
Net income (loss) from continuing operations	$	(2,129,443	)	$	(2,204,792	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Amortization		65,981			61,644
Interest expense - amortization of debt discounts		-			140,114
Stock compensation expense		150,000			150,000
Change in fair value of derivative liability		1,301,105			1,137,479
Gain related to debt activities		(77	)		(15,268	)
Net changes in operating assets & liabilities:
Accounts receivable		4,889			11,707
Accounts payable, accrued liabilities, due to affiliates, and other long-term liabilities		503,926			720,325
Net cash used in operating activities from continuing operations		(103,619	)		1,209
Net cash (used in ) and provided by operating activities from discontinued operations		(26,011	)		(258,074	)
Net cash used in operating activities		(129,630	)		(256,865	)

Cash flows from investing activities:
Purchases of intangible assets		(25,160	)		(62,825	)
Net cash used in investing activities from continuing operations		(25,160	)		(62,825	)
Net cash used in investing activities from discontinued operations		-			-
Net cash used in investing activities		(25,160	)		(62,825	)

Cash flows from financing activities:
Borrowings from related parties		119,000			1,060,000
Repayment to related party convertible notes payable		-			(396,667	)
Repayment to convertible notes payable		-			(266,938	)
Net cash provided by financing activities from continuing operations		119,000			396,395
Net cash provided by financing activities from discontinued operations-RP		-			-
Net cash provided by financing		119,000			396,395

Net increase in cash and cash equivalents		(35,790	)		76,705
Cash and cash equivalents at beginning of period		125,207			57,713
Cash and cash equivalents at end of period	$	89,417		$	134,418

Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest	$	-		$	-
Income taxes	$	-		$	-

Supplemental disclosure of non-cash investing and financing Activities:
Shares issued for conversion from convertible note payable	$	-		$	204,649
Reclass of derivative liability to additional paid in capital	$	-		$	203,239

	For the Three Months Ended March 31, 2024			For the Three Months Ended March 31, 2023
	(Unaudited)			(Unaudited)
Cash flows from operating activities:
Net income (loss) from continuing operations	$	(1,749,150	)	$	(1,858,737	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Amortization		32,590			29,336
Loss on impairment of intangible		–			–
Imputed interest		–			–
Interest expense - amortization of debt discounts		–			126,993
Additional non-cash interest expense due to debt restructuring		–			–
Stock compensation expense		75,000			25,000
Change in fair value of derivative liability		1,357,384			1,382,822
Gain or loss in debt settlement		(71,849	)		–
Gain or loss on debt conversion		–			–
Loss in extinguishment of debt		–			–
Accretion expense - excess derivative liability		–			–
Net changes in operating assets & liabilities:
Accounts receivable		(4,043	)		(3,706	)
Prepaid expense, deposits and other current assets		–			–
Accounts payable, accrued liabilities, due to affiliates, and other long-term liabilities		235,524			817,288
Net cash used in operating activities from continuing operations		(124,544	)		518,996
Net cash used in operating activities from discontinued operations		5,501			(740,792	)
Net cash used in operating activities		(119,043	)		(221,796	)
Cash flows from investing activities:
Purchases of property, plant, and equipment		–			–
Purchases of intangible assets		(3,825	)		(19,730	)
Net cash used in investing activities from continuing operations		(3,825	)		(19,730	)
Net cash used in investing activities from discontinued operations		–			–
Net cash used in investing activities		(3,825	)		(19,730	)
Cash flows from financing activities:
Shares issued for cash		-			-
Borrowings from convertible notes payable		-			-
Borrowings from related parties		12,500			413,333
Repayment to convertible notes payable		-			(184,559	)
Net cash provided by financing activities from continuing operations		12,500			228,774
Net cash provided by financing activities from discontinued operations-RP		–			–
Net cash provided by financing		12,500			228,774
Net increase in cash and cash equivalents		(110,368	)		(12,752	)
Cash and cash equivalents at beginning of period		125,207			57,713
Cash and cash equivalents at end of period	$	14,839		$	44,961
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest	$	-		$	-
Income taxes	$	-		$	-
Supplemental disclosure of non-cash investing and financing Activities:
Shares issued for conversion from convertible note payable	$	-		$	184,254
Reclass of derivative liability to additional paid in capital	$	-		$	189,352

See Accompanying Notes to Consolidated Financial Statements.

Clubhouse Media Group, Inc.

Notes to the Consolidated Financial Statements

~~March~~June 3130, 2024 and 2023

NOTE 1 - ORGANIZATION AND OPERATIONS

Clubhouse Media Group, Inc. (formerly known as Tongji Healthcare Group, Inc. or the “Company”) was incorporated under the laws of the State of Nevada on December 19, 2006 by Nanning Tongji Hospital, Inc. (“NTH”). On December 20, 2006, Tongji, Inc., a wholly owned subsidiary of the Company, was incorporated in the State of Colorado. Tongji, Inc. was later dissolved on March 25, 2011.

NTH was established in Nanning in the province of Guangxi of the People’s Republic of China (“PRC” or “China”) by Nanning Tongji Medical Co. Ltd. and an individual on October 30, 2003.

NTH is a designated hospital for medical insurance in the city of Nanning and Guangxi province. NTH specializes in the areas of internal medicine, surgery, gynecology, pediatrics, emergency medicine, ophthalmology, medical cosmetology, rehabilitation, dermatology, otolaryngology, traditional Chinese medicine, medical imaging, anesthesia, acupuncture, physical therapy, health examination, and prevention.

On December 27, 2006, Tongji, Inc. acquired 100% of the equity in NTH pursuant to an Agreement and Plan of Merger, pursuant to which NTH became a wholly owned subsidiary of Tongji, Inc. Pursuant to the Agreement and Plan of Merger, the Company issued 15,652,557 shares of common stock to the stockholders of NTH in exchange for 100% of the issued and outstanding shares of common stock of NTH. The acquisition of NTH was accounted for as a reverse acquisition under the purchase method of accounting since the stockholders of NTH obtained control of the entity. Accordingly, the reorganization of the two companies was recorded as a recapitalization of NTH, with NTH being treated as the continuing operating entity. The Company, through NTH, thereafter operated the hospital until the Company eventually sold NTH, as described below.

Effective December 31, 2017, under the terms of a Bill of Sale, the Company agreed to sell, transfer convey and assign forever all of its rights, title and interest in its equity ownership interest in NTH to Placer Petroleum Co., LLC. Pursuant to the Bill of Sale, consideration for this sale, transfer conveyance and assignment is Placer Petroleum Co., LLC assuming all assets and liabilities of NTH as of December 31, 2017. Thereafter, the Company had minimal operations.

On May 20, 2019, pursuant to Case Number A-19-793075-P, Nevada’s 8th Judicial District, Business Court entered an Order Granting Application of Joseph Arcaro as Custodian of Tongji Healthcare Group, Inc. pursuant to Nevada Revised Statutes (“NRS”) 78.347(1)(b), pursuant to which Mr. Arcaro was appointed custodian of the Company and given authority to reinstate the Company with the State of Nevada under NRS 78.347.

On May 23, 2019, Mr. Arcaro filed a Certificate of Reinstatement of the Company with the Secretary of State of the State of Nevada. In addition, on May 23, 2019, Mr. Arcaro filed an Annual List of the Company with the Secretary of State of the State of Nevada, designating himself as President, Secretary, Treasurer and Director of the Company for the filing period of 2017 to 2019.

On May 29, 2020, Mr. Arcaro, through his ownership of Algonquin Partners Inc. (“Algonquin”), owner 65% of the Company’s common stock, entered into a Stock Purchase Agreement by and among West of Hudson Group, Inc. (“WOHG”), the Company, Algonquin, and Mr. Arcaro. The Stock Purchase Agreement, as subsequently amended, is referred to herein as the “SPA.” Pursuant to the terms of the SPA, WOHG agreed to purchase, and Algonquin agreed to sell 30,000,000 shares of the Company’s common stock in exchange for payment by WOHG to Algonquin of $240,000 (the “Stock Purchase”). The Stock Purchase closed on June 18, 2020, resulting in a change of control of the Company. Mr. Arcaro resigned from any and all officer and director positions with the Company.

On July 7, 2020, the Company increased the authorized capital stock of the Company to 550,000,000, comprised of 500,000,000 shares of common stock, par value $0.001, and 50,000,000 shares of preferred stock, par value $0.001.

The Company filed a Certificate of Amendment to the Articles of Incorporation with the Secretary of State of the State of Nevada on June 13, 2022 for the purpose of amending the Articles of Incorporation of the Company to reduce the par value of the common stock of the Company, par value $0.001 per share, from $0.001 to $0.000001.

West of Hudson Group, Inc. (“WOHG”) was incorporated in the State of Delaware on May 19, 2020 and owned 100% of WOH Brands, LLC (“WOH”), Oopsie Daisy Swimwear, LLC (“Oopsie”), and DAK Brands, LLC (“DAK”), which were incorporated in the State of Delaware on May 13, 2020.

Doiyen LLC (“Doiyen”), formerly known as WHP Entertainment LLC was incorporated in the State of California on January 2, 2020 and renamed to Doiyen LLC in July 7, 2020 and Doiyen is 100% owned by WOHG.

The Company is an entertainment company engaged in the sale of own brand products, e-commerce platform advertising, and promotion for other companies on their social media accounts. As of December 31, 2023, the Company changed focuses from brand deal to e-commerce platform as such Doiyen LLC is included within discontinued operations.

On November 12, 2020, the Company and WOHG entered into the Merger Agreement, and WOHG thereafter became a wholly owned subsidiary of the Company. WOHG was determined to be the accounting acquirer in the Merger based upon the terms of other factors, including: (1) the security holders owned approximately 50.54% of the Company’s issued and outstanding common stock as of immediately after the closing of the Merger. Following the completion of the Merger, the Company changed its name from Tongji Healthcare Group, Inc. to Clubhouse Media Group, Inc. The Merger was accounted for as a reverse-merger and recapitalization in accordance with accounting principles generally accepted in the United States of America (“GAAP”). WOHG was the acquirer for financial reporting purposes and Clubhouse Media Group, Inc. was the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the Merger will be those of WOHG and will be recorded at the historical cost basis of WOHG. The consolidated financial statements after completion of the Merger include the assets and liabilities of the Company and WOHG, historical operations of WOHG and operations of the Company from the closing date of the Merger. Common stock and the corresponding capital amounts of the Company pre-merger have been retroactively restated as capital stock shares reflecting the exchange ratio in the Merger. This was a common control transaction, so all amounts were based on historical cost and no goodwill was recorded.

Since September 2022, the Company launched its own subscription-based site HoneyDrip.com, which provides a digital space for creators to share unique content with their subscribers.

The Company has changed focuses from brand deal to focus efforts on Honeydrip platform since December 31, 2023.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

These unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented.

Principles of Consolidation

The unaudited consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation. The Company includes within the consolidated financial statements the joint venture, see Note 11, due to ability to exert control over the financial and operating polices which includes ownership of equal to or greater than 50% of the joint venture.

Use of Estimates

In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by management include, but are not limited to, revenue recognition, the allowance for bad debt, useful life of fixed assets, income taxes and unrecognized tax benefits, valuation allowance for deferred tax assets, and assumptions used in assessing impairment of long-lived assets. Actual results could differ from those estimates.

Reclassification

Certain reclassifications have been made to prior period financial statements to conform to the current period presentation. These reclassifications had no effect on our previously reported results of operations or accumulated deficit.

Business Combination

The Company applies the provisions of the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations, in accounting for its acquisitions. It requires the Company to recognize separately from goodwill the assets acquired and the liabilities assumed, at the acquisition date, fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the acquisition date fair values of the net assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, its estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations.

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments with maturities of three months or less when purchased. Cash and cash equivalents are on deposit with financial institutions without any restrictions. The Company maintains its cash with high credit quality financial institutions; at times, such balances with any one financial institution may exceed Federal Deposit Insurance Corporation (“FDIC”) insured limits.

Advertising

Advertising costs are expensed when incurred and are included in selling, general, and administrative expenses in the accompanying consolidated statements of operations. We incurred advertising expenses of $23,~~691~~887 and $1524,~~043~~174 for the ~~three~~six months ended ~~March~~June 3130, 2024, and 2023, respectively.

Accounts Receivable

The Company’s accounts receivable arises from providing services. The Company does not adjust its receivables for the effects of a significant financing component at contract inception if it expects to collect the receivables in one year or less from the time of sale. The Company does not expect to collect receivables greater than one year from the time of sale.

The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Amounts determined to be uncollectible are charged or written-off against the reserve. As of ~~March~~June 3130, 2024, and December 31, 2023, there were $750 and $79, respectively, for bad debt allowance for accounts receivable.

As of ~~March~~June 3130, 2024, and December 31, 2023, there were $32,~~127~~ 085 and $2,956, respectively, for bad debt allowance for accounts receivable ~~included~~ included with discontinued operations on balance sheets.

Property and equipment, net

Plant and equipment are stated at cost less accumulated depreciation and impairment. Depreciation of property, plant and equipment and are calculated on the straight-line method over their estimated useful lives or lease terms generally as follows:

Classification		Useful Life
Equipment		3 years

Lease

The Company elected to use the short-term exception and does not record assets/liabilities for short term leases as of ~~March~~June 3130, 2024 and December 31, 2023.

Revenue Recognition

In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes all existing revenue recognition requirements, including most industry specific guidance. This new standard requires a company to recognize revenues when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The FASB subsequently issued the following amendments to ASU No. 2014-09 that have the same effective date and transition date: ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations; ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing; ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients; and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The Company adopted these amendments with ASU 2014-09 (collectively, the new revenue standards).

Under the new revenue standards, the Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. The Company recognized revenue from providing temporary and permanent staffing solutions and sale of consumer products.

Managed Services Revenue

The Company generates revenue from its managed services when a marketer (typically a brand, agency, or partner) pays the Company to provide custom content, influencer marketing, amplification, or other campaign management services (“Managed Services”).

The Company maintains separate arrangements with each marketer and content creator either in the form of a master agreement or terms of service, which specify the terms of the relationship and access to its platforms, or by statement of work, which specifies the price and the services to be performed, along with other terms. The transaction price is determined based on the fixed fee stated in the statement of work and does not contain variable consideration. Marketers who contract with the Company to manage their advertising campaigns or custom content requests may prepay for services or request credit terms. The agreement typically provides for either a non-refundable deposit, or a cancellation fee if the agreement is canceled by the customer prior to completion of services. Billings in advance of completed services are recorded as a contract liability until earned. The Company assesses collectability based on a number of factors, including the creditworthiness of the customer and payment and transaction history.

For Managed Services Revenue, the Company enters into an agreement to provide services that may include multiple distinct performance obligations in the form of: (i) an integrated marketing campaign to provide influencer marketing services, which may include the provision of blogs, tweets, photos or videos shared through social network offerings and content promotion, such as click-through advertisements appearing in websites and social media channels; and (ii) custom content items, such as a research or news article, informational material or videos. Marketers typically purchase influencer marketing services for the purpose of providing public awareness or advertising buzz regarding the marketer’s brand and they purchase custom content for internal and external use. The Company may provide one type or a combination of all types of these performance obligations on a statement of work for a lump sum fee. Revenue is accounted for when the performance obligation has been satisfied depending on the type of service provided. The Company views its obligation to deliver influencer marketing services, including management services, as a single performance obligation that is satisfied at the time the customer receives the benefits from the services.

Based on the Company’s evaluations, revenue from Managed Services is reported on a gross basis because the Company has the primary obligation to fulfill the performance obligations and it creates, reviews and controls the services. The Company takes on the risk of payment to any third-party creators and it establishes the contract price directly with its customers based on the services requested in the statement of work. The deferred revenue as of ~~March~~June 3130, 2024, and December 31, 2023, was $0 and included with discontinued operations on balance sheets. As of December 31, 2023, the Company has shifted focus from managed services to HoneyDrip.com platform as such managed services is included in discontinued operations on statement of operations.

Subscription-Based Revenue

The Company recognizes subscription-based revenue through Honeydrip.com, its social media website, which allows customers to visit the creator’s personal page over the contract period without taking possession of the products or deliverables. Customers incur costs on either a subscription or consumption basis. Revenue provided on a subscription basis is recognized ratably over the contract period and revenue provided on a consumption basis is recognized when the subscriber paid and received their access to the content. The Company reported the subscription-based revenue at net basis since the Company is acting as an agent solely arranging for the third-party creator or influencer to provide the services directly to the self-service customer through the platform or by posting the requested content. In April 2022, the Company has determined ~~that~~ it will be recognized at gross because they have control of the services before it is transferred to the end customer. The Company provided services like online chat and other services directly with the end customers by their internal team. Also, the Company will establish the price on behalf of the content creators as disclosed in the agreement. The Company has sole power to change the price based on the market. These are good indicators that the Company controls the specified goods or services before it is transferred to the customer.

Software Development Costs

We apply ASC 350-40, Intangibles—Goodwill and Other—Internal Use Software, in review of certain system projects. These system projects generally relate to software we do not intend to sell or otherwise market. In addition, we apply this guidance to our review of development projects related to software used exclusively for our SaaS subscription offerings. In these reviews, all costs incurred during the preliminary project stages are expensed as incurred. Once the projects have been committed to and it is probable that the projects will meet functional requirements, costs are capitalized. These capitalized software costs are amortized on a project-by-project basis over the expected economic life of the underlying product on a straight-line basis, which is five years. Amortization commences when the software is available for its intended use. Amounts capitalized related to development of internal use software are included in property and equipment, net, on our Consolidated Balance sheets and related depreciation is recorded as a component of amortization of intangible assets and depreciation in our consolidated statements of operations. For the ~~year~~six months ended ~~March~~June 3130, 2024, and 2023, we capitalized $321,~~825~~335 and $1962,~~730~~825, respectively, related to internal use software and recorded $3266,~~590~~247 and $2961,~~336~~644 in related amortization expense, respectively. Unamortized costs of capitalized internal use software totaled $~~416~~404,~~817~~495 and $445,582 as of ~~March~~June 3130, 2024, and ~~December~~ December 31, 2023, respectively. As of December 31, 2023, the Company fully impaired developed technology-magiclytics.

Goodwill Impairment

We test goodwill at least annually for impairment at the reporting unit level. We recognize an impairment charge if the carrying amount of a reporting unit exceeds its fair value. When a portion of a reporting unit is disposed, goodwill is allocated to the gain or loss on disposition based on the relative fair values of the business or businesses disposed and the portion of the reporting unit that will be retained.

For other intangible assets that are not deemed indefinite-lived, cost is generally amortized on a straight-line basis over the asset’s estimated economic life, except for individually significant customer-related intangible assets that are amortized in relation to total related sales. Amortizable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. In these circumstances, they are tested for impairment based on undiscounted cash flows and, if impaired, written down to estimated fair value based on either discounted cash flows or appraised values. The Company impaired $0 and $0 of goodwill for the ~~three~~six months ended ~~March~~June 3130, 2024 and 2023, respectively.

Impairment of Long-Lived Assets

Long-lived assets, which include property, plant and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

Recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of and for the ~~three~~six months ended ~~March~~June 3130, 2024, and 2023, there were no impairment loss of its long-lived assets.

Income Taxes

The Company accounts for income taxes using the asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than enactments of changes in the tax law. For deferred tax assets, management evaluates the probability of realizing the future benefits of such assets. The Company establishes valuation allowances for its deferred tax assets when evidence suggests it is unlikely that the assets will be fully realized.

The Company recognizes the tax effects of an uncertain tax position only if it is more likely than not to be sustained based solely on its technical merits as of the reporting date and then only in an amount more likely than not to be sustained upon review by the tax authorities. Income tax positions that previously failed to meet the more likely than not threshold is recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more likely than not threshold is derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company classifies potential accrued interest and penalties related to unrecognized tax benefits within the accompanying consolidated statements of operations and comprehensive income (loss) as income tax expense.

Commitments and Contingencies

The Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.

In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates it is probable a material loss was incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to credit risk consist primarily of accounts receivable. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable.

Basic Income (Loss) Per Share

Under the provisions of ASC 260, “Earnings per Share,” basic loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the income of the Company, subject to anti-dilution limitations. Potential common shares consist of the convertible promissory notes payable as of ~~March~~June 3130, 2024 and December 31, 2023. As As of ~~March~~June 3130, 2024 and December 31, 2023, there were 117,~~248~~435,~~430~~097,~~997~~663 and 8,865,097,663 potential shares issuable upon conversion of ~~convertible~~ convertible notes payable. As of ~~March~~June 3130, 2024 and 2023, there were approximately 165,077 potential shares issuable upon conversion of warrants. All potential shares from convertible notes payable and warrants were considered anti-dilutive as of ~~March~~June 3130, 2024 and December 31, 2023.

The table below presents the computation of basic and diluted earnings per share for the three months ended ~~March~~June 3130, 2024 and 2023:

	For the three months ended March 31, 2024 (Unaudited)			For the three months ended March 31, 2023 (Unaudited)
	For the three months ended June 30, 2024			For the three months ended June 30, 2023
	(Unaudited)			(Unaudited)
Numerator:
Net income (loss)	$	(1,759,343	)	$	(2,078,200	)
Net income (loss) from continuing operations	$	(380,293	)	$	(346,053	)
Denominator:
Weighted average common shares outstanding—basic		16,372,179,486			78,~~696~~480,~~310~~503,~~840~~383
Dilutive common stock equivalents		-			-
Weighted average common shares outstanding—diluted		16,372,179,486			78,~~696~~480,~~310~~503,~~840~~383
Net loss per share:
Basic	$	(0.00	)	$	(0.00	)
Diluted	$	(0.00	)	$	(0.00	)

The table below presents the computation of basic and diluted earnings per share for the six months ended June 30, 2024 and 2023:

	For the six months ended June 30, 2024			For the six months ended June 30, 2023
	(Unaudited)			(Unaudited)
Numerator:
Net income (loss) from continuing operations	$	(2,129,443	)	$	(2,204,792	)
Denominator:
Weighted average common shares outstanding—basic		16,372,179,486			8,109,652,138
Dilutive common stock equivalents		-			-
Weighted average common shares outstanding—diluted		16,372,179,486			8,109,652,138
Net loss per share:
Basic	$	(0.00	)	$	(0.00	)
Diluted	$	(0.00	)	$	(0.00	)

Stock based Compensation

Stock based compensation cost to employees is measured at the date of grant, based on the calculated fair value of the stock-based award, and will be recognized as expense over the employee’s requisite service period (generally the vesting period of the award) under ASC 718. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable.

Fair Value of Financial Instruments

FASB ASC 820, Fair Value Measurement defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.

Fair Value Measurements

The Company applies the provisions of ASC 820-10, Fair Value Measurements and Disclosures. ASC 820-10 defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:

	●	Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
	●	Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
	●	Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Cash, accounts receivable, accounts payable, and accrued expenses and deferred revenue – The carrying amounts reported in the consolidated balance sheets for these items are a reasonable estimate of fair value due to their short term nature.

Convertible notes payable – Convertible promissory notes payable are recorded at amortized cost. The carrying amount approximates their fair value.

The Company uses Level 3 inputs for its valuation methodology for the derivative liabilities as their fair values were determined by using the binomial option-pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives.

The following table presents the Company’s assets and liabilities required to be reflected within the fair value hierarchy as of ~~March~~June 3130, 2024 and December 31, 2023.

Fair Value

Fair Value Measurements at

As of

~~March~~June 3130, 2024

Description

~~March~~June 3130, 2024

Using Fair Value Hierarchy

Level 1

Level 2

Level 3

Derivative liability

2,~~231~~175,~~297~~018

Total

2,~~231~~175,~~297~~018

	Fair Value		Fair Value Measurements at
	As of		December 31, 2023
Description	December 31, 2023		Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Derivative liability	$	873,913	$	-	$	-	$	873,913

Total	$	873,913	$	-	$	-	$	873,913

Derivative instruments

The fair value of derivative instruments is recorded and shown separately under liabilities. Changes in the fair value of derivatives liability are recorded in the consolidated statement of operations under other (income) expense.

Our Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives under ASC 815. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, the Company uses binomial option-pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Topic 470) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Topic 815): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 requires companies to measure conversion of debt into equity that contain derivatives with difference as a gain or loss. ASU 2020-06 is effective for fiscal years beginning after December 15, 2022, including those interim periods within those fiscal years. The Company adopted and follows ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity as of December 31, 2023.

Beneficial Conversion Features

If a conversion features did not meet the definition of derivative liability under ASC 815, the Company evaluates the conversion feature for a beneficial conversion feature. The effective conversion price was compared to the market price on the date of the note. If the effective conversion price was less than the market value of underlying common stock at the inception of the convertible promissory note, the Company recorded the difference as debt discounts and amortized over the life of the notes using the effective interest method.

Related Parties

The Company follows subtopic 850-10 of the FASB ASC for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 related parties include:

a. ~~Affiliates~~affiliates of the Company; b. ~~Entities~~entities for which investments in their equity securities would be required, absent the election of the FV option under the FV Option Subsection of Section 825– 10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

New Accounting Pronouncements

Management does not believe that any recently issued and not adopted and/or effective, accounting pronouncements would have a material effect on the accompanying financial statements.

NOTE 3 – GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

As reflected in the accompanying financial statements, the Company had a net loss of $(12,~~759~~225,~~343~~950) for the ~~three~~six months ended ~~March~~June 3130, 2024, negative working capital of $(9,~~380~~833,~~439~~417) as of ~~March~~June 3130, 2024, and stockholder’s deficit of $(89,~~948~~415,~~910~~795). These factors among others raise substantial doubt about the Company’s ability to continue as a going concern.

While the Company is attempting to generate additional revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.

The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 – PROPERTY AND EQUIPMENT

Fixed assets, net consisted of the following:

SCHEDULE OF FIXED ASSET, NET

	March 31, 2024			December 31, 2023			Estimated Useful Life
	June 30, 2024			December 31, 2023			Estimated Useful Life
Equipment	$	118,638		$	118,638		3 years
Less: accumulated depreciation and amortization		(~~103~~105,~~926~~777	)		(101,931	)
Property, plant, and equipment, net,	$	1412,~~712~~861		$	16,707

The above fixed assets are included in discontinued operations on the balance sheets. Depreciation expenses were $13,~~996~~701 and $85,~~930~~991 for the three months ended ~~March~~June 3130, 2024 and 2023, respectively, and included with discontinued operations on the statement of operations. Depreciation expenses were $3,847 and $14,921 for the six months ended June 30, 2024 and 2023, respectively, and included with discontinued operations on the statement of operations.

NOTE 5 – INTANGIBLES

As of ~~March~~June 3130, 2024 and December 31, 2023, the Company had intangible assets of $~~416~~404,~~817~~761 and $445,582 from and after the acquisition of Magiclytics in February 2021. It is a platform that is internally developed for revenue prediction from influencer collaboration and our digital platform Honeydrip.com.

The following table sets forth the Company’s infinite and finite-lived intangible assets resulting from business acquisitions and other purchases, which continue to be amortized:

	Weighted Average		March 31, 2024 (Unaudited)												December 31, 2023 (Audited)
	Weighted				June 30, 2024												December 31, 2023
	Useful Life (in Years)		Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount				Gross Carrying Value				Accumulated Amortization				Net Carrying Amount
	Average Useful Life (in Years)				Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount				Gross Carrying Value				Accumulated Amortization				Net Carrying Amount
Developed technology - Magiclytics	5	5	$	~~651,568~~	$	672,903	$	~~234,751~~	$	268,142	$	~~416,817~~	$	404,761	$	~~647,743~~	$	647,743	$	~~202,161~~	$	202,161	$	~~445,582~~	$	445,582
Developed technology - Magiclytics	-	-		-		-		-		-		-		-		-		-		-		-		-		-
			$	~~651,568~~	$	672,903	$	~~234,751~~	$	268,142	$	~~416,817~~	$	404,761	$	~~647,743~~	$	647,743	$	~~202,161~~	$	202,161	$	~~445,582~~	$	445,582

Amortization expenses were $3233,~~590~~391 and $2931,~~366~~502 for the three months ended ~~March~~June 3130, 2024 and 2023, respectively. Amortization expenses were $65,981 and $61,643 for the three months ended June 30, 2024 and 2023, respectively.

NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED LIABILITES

Accrued liabilities at ~~March~~June 3130, 2024 and 2022 consist of the following:

	March 31, 2024		December 31, 2023
	June 30, 2024		December 31, 2023
Accounts payable	$	910,~~629~~051	$	9,747
Accrued payroll		~~470~~570,000		370,000
Accrued interest		1,~~741~~928,~~556~~323		1,626,590
Other		121,~~523~~100		121,520
Accounts payable and accrued liabilities	$	2,~~342~~629,~~708~~474	$	2,127,857

NOTE 7 – CONVERTIBLE NOTES PAYABLE

Convertible Promissory Note – GS Capital Partners #2

On February 19, 2021, the Company entered into another securities purchase agreement with GS Capital (the “GS Capital #2”), pursuant to which, on same date, the Company issued a convertible promissory note (the “GS Capital #2 Note”) to GS Capital the aggregate principal amount of $577,778 for a purchase price of $520,000, reflecting a $57,778 original issue discount, and in connection therewith, sold to GS Capital 100,000 shares of Company’s common stock, par value $0.001 per share at a purchase price of $100, representing a per share price of $0.001 per share. In addition, at the closing of this sale, the Company reimbursed GS Capital the sum of $10,000 for GS Capital’s costs in completing the transaction, which amount GS Capital withheld from the total purchase price paid to the Company.

The GS Capital #2 Note has a maturity date of February 19, 2022, and bears interest at 10% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the GS Capital #2 Note, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty.

The GS Capital #2 Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of the Company Common Stock at GS Capital’s election at any time following the time that the Securities and Exchange Commission (“SEC”) qualifies the Company’s offering statement related to the Company’s planned offering of Company Common Stock pursuant to Regulation A under the Securities Act of 1933, as amended (the “Regulation A Offering”). At such time, the GS Capital #2 Note (and the principal amount and any accrued and unpaid interest) will be convertible at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days’ notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price.

The $57,778 original issue discounts, the fair value of 100,000 shares issued, and the beneficial conversion features were recorded as debt discounts and amortized over the term of the note. Therefore, the total debt discounts at the inception date of this convertible promissory note were $577,778.

Convertible Promissory Note – New GS Note #2

On November 26, 2021, the Company entered into an Amendment and Restructuring Agreement (the “Restructuring Agreement”) with GS Capital Partners, LLC to cancel the conversion exercised in the quarter ended June 30, 2021.

On June 29, 2022, the “Company entered into an Exchange Agreement (the “Exchange Note”) with GS Capital. The Exchange Note amended and restated in its entirety the previous Note Purchase Agreement between the same parties.

The Exchange Note replaces the Note Purchase Agreement in its entirety, which was a promissory note carrying an outstanding amount of $577,778. The Exchange Note is thus a new note in the amount of $635,563.48, with a conversion price equal to 85% of the closing per share trading price of the Company’s shares of common stock, $0.000001 par value per share (“Common Stock”) on the last trading day prior to the delivery of the notice of conversion, as reported on the National Quotations Bureau OTC Market exchange which the Company’s shares are traded.

The change in conversion features were recorded as loss on debt extinguishment of $188,771 and recognition of derivative liability of $416,588 as of June 30, 2022.

GS Capital converted $20,000 of principal amount and $~~4662~~4,662 accrued interest to 296,380,352 common shares in the quarter ended December 31, 2023. It further converted $421,063 of the principal amount and $4,690 accrued interest to 378,633,891 common shares in the quarter ~~ended~~ ended September 30, 2022. It further converted $65,000 of principal to 481,221,646 common shares in the first quarter of 2023. The ~~balance~~ balance of the GS Capital #2 Note as of ~~March~~June 3130, 2024, was $0.

Convertible Promissory Note – GS Capital Partners #3

On March 16, 2022, the Company entered into another securities purchase agreement with GS Capital (the “GS Capital #3”), pursuant to which, on same date, the Company issued a convertible promissory note (the “GS Capital #3 Note”) to GS Capital the aggregate principal amount of $577,778 for a purchase price of $520,000, reflecting a $57,778 original issue discount, and in connection therewith, sold to GS Capital 100,000 shares of Company’s common stock, par value $0.000001 per share at a purchase price of $100, representing a per share price of $0.001 per share. In addition, at the closing of this sale, the Company reimbursed GS Capital the sum of $10,000 for GS Capital’s costs in completing the transaction, which amount GS Capital withheld from the total purchase price paid to the Company.

The GS Capital #3 Note has a maturity date of March 22, 2022, and bears interest at 10% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the GS Capital #3 Note, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty.

The GS Capital #3 Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of the Company Common Stock at GS Capital’s election at any time following the time that the SEC qualifies the Company’s offering statement related to the Company’s planned Regulation A Offering. At such time, the GS Capital #3 Note (and the principal amount and any accrued and unpaid interest) will be convertible at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days’ notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price.

On November 26, 2021, the Company entered into an Amendment and Restructuring Agreement (the “Restructuring Agreement”) with GS Capital Partners, LLC to extend the maturity to September 22, 2022.

The balance of the GS Capital #3 Note as of ~~March~~June 3130, 2024 and December 31, 2023 was $577,778 and $577,778, respectively. The Company is ~~currently~~ currently in default of the GS Capital #3 Note.

Convertible Promissory Note – GS Capital Partners #4

On April 1, 2021, the Company entered into another securities purchase agreement with GS Capital (the “GS Capital #4”), pursuant to which, on same date, the Company issued a convertible promissory note to GS Capital the aggregate principal amount of $550,000 for a purchase price of $500,000, reflecting a $50,000 original issue discount, and in connection therewith, sold to GS Capital 45,000 shares of Company’s common stock, par value $0.001 per share at a purchase price of $45, representing a per share price of $0.001 per share. In addition, at the closing of this sale, the Company reimbursed GS Capital the sum of $10,000 for GS Capital’s costs in completing the transaction, which amount GS Capital withheld from the total purchase price paid to the Company.

The GS Capital Note #4 has a maturity date of April 1, 2022, and bears interest at 10% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the GS Capital Note, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty.

The GS Capital Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of the Company Common Stock at GS Capital’s election at any time following the time that the SEC qualifies the Company’s offering statement related to the Company’s planned offering of Company Common Stock pursuant to Regulation A under the Securities Act. At such time, the GS Capital Note (and the principal amount and any accrued and unpaid interest) will be convertible at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days’ notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price.

The $50,000 original issue discounts, the fair value of 45,000 shares issued, and the beneficial conversion features were recorded as debt discounts and amortized over the term of the note. Therefore, the total debt discount at the inception date of this convertible promissory note was recorded at $550,000.

On November 26, 2021, the Company entered into an Amendment and Restructuring Agreement (the “Restructuring Agreement”) with GS Capital Partners, LLC to extend the maturity to October 1, 2022.

The balance of the GS Capital Note #4 as of ~~March~~June 3130, 2024 and December 31, 2023 was $550,000 and $550,000, respectively. The Company is currently in default of the GS Capital #4 Note.

Convertible Promissory Note – GS Capital Partners #5

On April 29, 2021, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with GS Capital, pursuant to which, on same date, the Company issued a convertible promissory note to GS Capital in the aggregate principal amount of $550,000 for a purchase price of $500,000, reflecting a $50,000 original issue discount (the “GS Capital Note #5”) and, in connection therewith, sold to GS Capital 125,000 shares of the Company’s common stock, par value $0.001 per share (the “Company Common Stock”) at a purchase price of $125, representing a per share price of $0.001 per share. In addition, at the closing of this sale, the Company reimbursed GS Capital the sum of $5,000 for GS Capital’s costs in completing the transaction, which amount GS Capital withheld from the total purchase price paid to the Company.

The April 2021 GS Capital Note #5 has a maturity date of April 29, 2022, and bears interest at 10% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the GS Capital Note #5, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty.

The GS Capital Note #5 (and the principal amount and any accrued and unpaid interest) is convertible into shares of the Company’s common stock, par value $0.001 per share (the “Company Common Stock”) at GS Capital’s election at any time following the time that the SEC qualifies the Company’s offering statement related to the Company’s planned offering of Company Common Stock pursuant to Regulation A under the Securities Act. At such time, the GS Capital Note #5 (and the principal amount and any accrued and unpaid interest) will be convertible at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days’ notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price.

The $50,000 original issue discounts, the fair value of 125,000 shares issued, and the beneficial conversion features were recorded as debt discounts and amortized over the term of the note. Therefore, the total debt discount at the inception date of this convertible promissory note was recorded at $550,000.

On November 26, 2021, the Company entered into an Amendment and Restructuring Agreement (the “Restructuring Agreement”) with GS Capital Partners, LLC to extend the maturity to October 29, 2022.

The balance of the GS Capital Note #5 as of ~~March~~June 3130, 2024 and December 31, 2023 was $550,000 and $550,000, respectively.

Convertible Promissory Note – GS Capital Partners #6

On June 3, 2021, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with GS Capital, pursuant to which, on same date, the Company issued a convertible promissory note to GS Capital in the aggregate principal amount of $550,000 for a purchase price of $500,000, reflecting a $50,000 original issue discount (the “GS Capital Note #6”) and, in connection therewith, sold to GS Capital 85,000 shares of the Company’s common stock, par value $0.001 per share (the “Company Common Stock”) at a purchase price of $85, representing a per share price of $0.001 per share. In addition, at the closing of this sale, the Company reimbursed GS Capital the sum of $5,000 for GS Capital’s costs in completing the transaction, which amount GS Capital withheld from the total purchase price paid to the Company.

The GS Capital Note #6 has a maturity date of June 3, 2022, and bears interest at 10% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the GS Capital Note #6, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty.

The GS Capital Note #6 (and the principal amount and any accrued and unpaid interest) is convertible into shares of the Company’s common stock, par value $0.001 per share (the “Company Common Stock”) at GS Capital’s election at any time following the time that the SEC qualifies the Company’s offering statement related to the Company’s planned offering of Company Common Stock pursuant to Regulation A under the Securities Act. At such time, the GS Capital Note #6 (and the principal amount and any accrued and unpaid interest) will be convertible at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days’ notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price.

The $50,000 original issue discounts, the fair value of 85,000 shares issued, and the beneficial conversion features were recorded as debt discounts and amortized over the term of the note. Therefore, the total debt discount at the inception date of this convertible promissory note was recorded at $550,000.

On November 26, 2021, the Company entered into an Amendment and Restructuring Agreement (the “Restructuring Agreement”) with GS Capital Partners, LLC to extend the maturity to December 3, 2022.

~~The balance of the GS Capital Note #6 as of March 31, 2024 and December 31, 2023 was $550,000 and $550,000, respectively. The Company is currently in default of the GS Capital #6 Note.~~20

The balance of the GS Capital Note #6 as of June 30, 2024 and December 31, 2023 was $550,000 and $550,000, respectively. The Company is currently in default of the GS Capital #6 Note.

Convertible Promissory Note – Eagle Equities LLC

On April 13, 2021, the Company entered into a securities purchase agreement (the “Eagle SPA”) with Eagle Equities LLC (“Eagle Equities”), pursuant to which, on same date, the Company issued a convertible promissory note to Eagle Equities in the aggregate principal amount of $1,100,000 for a purchase price of $1,000,000, reflecting a $100,000 original issue discount (the “Eagle Equities Note”), and, in connection therewith, sold to Eagle Equities 165,000 shares of Company’s common stock, par value of $0.001 per share (the “Company Common Stock”) at a purchase price of $165.00, representing a per share price of $0.001 per share. In addition, at the closing of this sale, the Company reimbursed Eagle Equities the sum of $10,000 for Eagle Equities’ costs in completing the transaction, which amount Eagle Equities withheld from the total purchase price paid to the Company.

The Eagle Equities Note has a maturity date of April 13, 2022 and bears interest at 10% per year. No payments of the principal amount or interest are due prior to the maturity date other than upon the circumstances set forth in the Eagle Equities Note – specifically, if (i) the SEC qualifies the Company’s offering statement related to the Company’s planned offering of Company Common Stock pursuant to Regulation A under the Securities Act; and (ii) the Company receives $3,500,000 in net proceeds from such Regulation A Offering, then Company must repay the principal amount and any accrued and unpaid interest on the Eagle Equities Note within three (3) business days from the date of such occurrence. The Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty.

The Eagle Equities Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of the Company Common Stock at Eagle Equities’ election at any time following the time that the SEC qualifies the Company’s offering statement related to the Company’s planned offering of Company Common Stock pursuant to Regulation A under the Securities Act. At such time, the Eagle Equities Note (and the principal amount and any accrued and unpaid interest) will be convertible in restricted shares of Company Common Stock at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by Eagle Equities on 61 days’ notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price. Alternatively, if the SEC has not qualified the Company’s offering statement related to the Company’s planned offering of Company Common Stock pursuant to Regulation A under the Securities Act by October 10, 2021, and Eagle Equities Note has not yet been fully repaid, then Eagle Equities will have the right to convert the Eagle Equities Note (and the principal amount and any accrued and unpaid interest) into restricted shares of Company Common Stock at a conversion price of $6.50 per share (subject to customary adjustments for any stock splits, etc., which occur following April 13, 2021).

The $100,000 original issue discounts, the fair value of 165,000 shares issued, and the beneficial conversion features were recorded as debt discounts and amortized over the term of the note. Therefore, the total debt discount at the inception date of this convertible promissory note was recorded at $1,100,000.

The balance of the Eagle Equities Note as of ~~March~~June 3130, 2024 and December 31, 2023 was $1,100,000, respectively. The Company is currently in default of the Eagle Equities Note.

Convertible Promissory Note – Chris Etherington

On August 27, 2021, the Company entered into a note purchase agreement (the “Chris Etherington Note Purchase Agreement”) with Chris Etherington, with an effective date of August 26, 2021, pursuant to which, on same date, the Company issued a convertible promissory note to Mr. Etherington in the aggregate principal amount of $165,000 for a purchase price of $150,000, reflecting a $15,000 original issue discount (the “Chris Etherington Note”) and, in connection therewith, issued to Mr. Etherington a Warrant to purchase 37,500 shares of the Company’s common stock, par value $0.001 per share (the “Company Common Stock”) at an exercise price of $2.00 per share, subject to adjustment (the “Chris Etherington Warrant”). In addition, in connection with the Chris Etherington Note Purchase Agreement, the Company entered into a Security Agreement on same date with Mr. Etherington, pursuant to which the Company’s obligations under the Chris Etherington Note were secured by a first priority lien and security interest on all of the assets of the Company (the “Chris Etherington Security Agreement”). While each of the Chris Etherington Warrant, Security Agreement, Note, and Note Purchase Agreement have an effective date and/or effective issue date of August 26, 2021, each was entered into and/or issued on August 27, 2021.

The Chris Etherington Note has a maturity date of August 26, 2022, and bears interest at 10% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the Chris Etherington Note, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty.

The Chris Etherington Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of Company Common Stock at any time following August 26, 2021, until the note is repaid. The conversion price per share of Common Stock shall initially mean the lesser of (i) $1.00 or (ii) 75% of the lowest daily volume weighted average price of the Common Stock during the 20 Trading Days (as defined in the Chris Etherington Note) immediately preceding the date of the respective conversion. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price.

The Chris Etherington Note contains customary events of default, including, but not limited to:

	●	if the Company fails to pay the then-outstanding principal amount and accrued interest on the Chris Etherington Note on any date any such amounts become due and payable, and any such failure is not cured within three business days of written notice thereof by Mr. Etherington: or
	●	the Company fails to remain compliant with the Depository Trust Company (“DTC”), thus incurring a “chilled” status with DTC; or
	●	any trading suspension is imposed by the SEC under Section 12(j) or Section 12(k) of the Exchange Act; or
	●	the occurrence of any delisting of the Company Common Stock from any securities exchange on which the Company Common Stock is listed or suspension of trading of the Company Common Stock on the OTC Markets.

If an event of default has occurred and is continuing, Mr. Etherington may declare all or any portion of the then-outstanding principal amount of the Chris Etherington Note, together with all accrued and unpaid interest thereon, due and payable, and the Chris Etherington Note shall thereupon become immediately due and payable in cash and Mr. Etherington will also have the right to pursue any other remedies that Mr. Etherington may have under applicable law. In the event that any amount due under the Chris Etherington Note is not paid as and when due, such amounts shall accrue interest at the rate of 18% per year, simple interest, non-compounding, until paid.

The $15,000 original issue discounts, the fair value of 37,500 warrants issued, and the conversion features were recorded as debt discounts and amortized over the term of the note. Therefore, the total debt discount at the inception date of this convertible promissory note was recorded at $165,000. For the excess amount of derivative liability, the Company recorded accretion expense of $160,538 at the inception date of this note.

The balance of the Chris Etherington Note as of ~~March~~June 3130, 2024 and December 31, 2023 was $165,000, respectively. The Company is currently in default of the Chris Etherington Note.

Convertible Promissory Note – Rui Wu

On August 27, 2021, the Company entered into a note purchase agreement (the “Rui Wu Note Purchase Agreement”) with Rui Wu, an individual (“Rui Wu”), with an effective date of August 26, 2021, pursuant to which, on same date, the Company issued a convertible promissory note to Rui Wu in the aggregate principal amount of $550,000 for a purchase price of $500,000, reflecting a $50,000 original issue discount (the “Rui Wu Note”) and, in connection therewith, issued to Rui Wu a Warrant to purchase 125,000 shares of the Company’s common stock, par value $0.001 per share (the “Company Common Stock”) at an exercise price of $2.00 per share, subject to adjustment (the “Rui Wu Warrant”). In addition, in connection with the Rui Wu Note Purchase Agreement, the Company entered into a Security Agreement on same date with Rui Wu, pursuant to which the Company’s obligations under the Rui Wu Note were secured by a first priority lien and security interest on all of the assets of the Company (the “Rui Wu Security Agreement”). While each of the Rui Wu Warrant, Security Agreement, Note, and Note Purchase Agreement have an effective date and/or effective issue date of August 26, 2021, each was entered into and/or issued on August 27, 2021.

The Rui Wu Note has a maturity date of August 26, 2022, and bears interest at 10% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the Rui Wu Note, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty.

The Rui Wu Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of Company Common Stock at any time following August 26, 2021, until the note is repaid. The conversion price per share of Common Stock shall initially mean the lesser of (i) $1.00 or (ii) 75% of the lowest daily volume weighted average price of the Common Stock during the 20 Trading Days (as defined in the Rui Wu Note) immediately preceding the date of the respective conversion. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price.

The Rui Wu Note contains customary events of default, including, but not limited to:

	●	if the Company fails to pay the then-outstanding principal amount and accrued interest on the Rui Wu Note on any date any such amounts become due and payable, and any such failure is not cured within three business days of written notice thereof by Rui Wu: or
	●	the Company fails to remain compliant with the Depository Trust Company (“DTC”), thus incurring a “chilled” status with DTC; or
	●	any trading suspension is imposed by the SEC under Section 12(j) or Section 12(k) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); or
	●	the occurrence of any delisting of the Company Common Stock from any securities exchange on which the Company Common Stock is listed or suspension of trading of the Company Common Stock on the OTC Markets.

If an event of default has occurred and is continuing, Rui Wu may declare all or any portion of the then-outstanding principal amount of the Rui Wu Note, together with all accrued and unpaid interest thereon, due and payable, and the Rui Wu Note shall thereupon become immediately due and payable in cash and Rui Wu will also have the right to pursue any other remedies that Rui Wu may have under applicable law. In the event that any amount due under the Rui Wu Note is not paid as and when due, such amounts shall accrue interest at the rate of 18% per year, simple interest, non-compounding, until paid.

The $50,000 original issue discounts, the fair value of 125,000 warrants issued, and the conversion features were recorded as debt discounts and amortized over the term of the note. Therefore, the total debt discount at the inception date of this convertible promissory note was recorded at $550,000. For the excess amount of derivative liability, the Company recorded accretion expense of $514,850 at the inception date of this note.

22The balance of the Riu Wu Note as of June 30, 2024 and December 31, 2023 was $550,000, respectively. The Company is currently in default of the Rui Wu Note.

The balance of the Riu Wu Note as of March 31, 2024 and December 31, 2023 was $550,000, respectively. The Company is currently in default of the Rui Wu Note.

Convertible Note – Fast Capital, LLC

On January 13, 2022, the Company entered into a Securities Purchase Agreement, (the “SPA”) dated as of January 10, 2022, by and between the Company and Fast Capital, LLC (the “Buyer”). Pursuant to the terms of the SPA, the Company agreed to issue and sell, and the Buyer agreed to purchase (the “Purchase”), a 10% convertible note in the aggregate principal amount of $120,000 (the “Note”). The Note has an original issue discount of $10,000, resulting in gross proceeds to the Company of $110,000.

The Note bears interest at a rate of 10% per annum and reached maturity on January 10, 2023. The Note may be prepaid or assigned with the following penalties/premiums:

Prepay Date		Prepay Amount
On or before 30 days		115% of principal plus accrued interest
31 – 60 days		120% of principal plus accrued interest
61 – 90 days		125% of principal plus accrued interest
91 – 120 days		130% of principal plus accrued interest
121 – 150 days		135% of principal plus accrued interest
151 – 180 days		140% of principal plus accrued interest

The Note may not be prepaid after the 180^th day.

The Buyer has the right from time to time, and at any time after 180 days to convert all or any part of the outstanding and unpaid principal amount of the Note into common stock, subject to a 4.99% equity blocker.

The conversion price of the Note equals 70% of the lowest trading price of the Company’s common stock for the 20 prior trading days, including the day upon which a notice of conversion is delivered.

The balance of the Fast Capital note as of ~~March~~June 3130, 2024 and December 31, 2023 was $120,000 and $120,000, respectively. The Company is currently in default of the Fast Capital Note.

Convertible Promissory Note – ONE44 Capital LLC

On February 16, 2022, the Company entered into a Securities Purchase Agreement, (the “ONE44 Capital purchase agreement”) dated February 15, 2022, by and between the Company and ONE44 Capital LLC. Pursuant to the terms of the SPA, the Company agreed to issue and sell, and the Buyer agreed to purchase, a convertible note in the aggregate principal amount of $175,500 (the “ONE44 Capital Note”). The ONE44 Capital Note has an original issue discount of $17,500, resulting in gross proceeds to the Company of $158,000.

The ONE44 Capital Note bears interest at a rate of 4% per annum and matures on February 16, 2023. Any amount of principal or interest on the Note which is not paid when due will bear interest at a rate of 24% per annum. The Note may not be prepaid in whole or in part except as provided in the Note by way of conversion at the option of the Buyer.

The Buyer has the right from time to time, and at any time during the period beginning on the date that is 180 days following February 16, 2022 and ending on the later of (i) February 16, 2023, and (ii) the date of payment of the Default Amount (as defined in the Note), to convert all or any part of the outstanding and unpaid principal amount of the Note into common stock, subject to a 4.99% equity blocker.

The conversion price of the ONE44 Capital Note equals the lesser of the Variable Conversion Price (as hereinafter defined) and $1.00. The “Variable Conversion Price” means 65% multiplied by the lowest VWAP (as defined in the Note) for the Company’s common stock during the 3 trading date period ending on the latest complete trading day prior to the conversion date.

Since the conversion price is based on 65% of the VWAP during the 3-trading day period immediately prior to the option conversion date, the Company has determined that the conversion feature is considered a derivative liability for the Company, which is detailed in Note 10.

The $17,500 original issue discounts, the $8,000 reimbursement and the conversion features were recorded as debt discounts and amortized over the term of the note. Therefore, the total debt discount at the inception date of this convertible promissory note was recorded at $148,306.

ONE44 Capital LLC converted $45,000 principal to common shares in the quarter ended March 31, 2023.

On March 7, 2023, the Company entered into a Debt Repayment and Release Agreement by and between the Company and ONE44 Capital LLC. Pursuant to the terms of the Agreement, the Company agreed to pay to ONE44 $88,738 as full and complete payment of certain debt owed by the Company to ONE44 pursuant to a 4% convertible redeemable note due February 16, 2023, dated February 16, 2022 (the “Note”), in the principal sum of $90,000, plus accrued interest. On March 7, 2023, pursuant to the terms of the Agreement, the Company paid ONE44 $88,738, the debt was settled, and the ONE44 Capital Note was terminated.

The balance of the ONE44 Capital note as of ~~March~~June 3130, 2024 and December 31, 2023 was $0, respectively.

Convertible Promissory Note – ONE44 Capital LLC #2

On May 20, 2022, the Company entered into a Securities Purchase Agreement, (the “ONE44 Capital purchase agreement #2”) by and between the Company and ONE44 Capital LLC. Pursuant to the terms of the SPA, the Company agreed to issue and sell, and the Buyer agreed to purchase, a convertible note in the aggregate principal amount of $115,000 (the “ONE44 Capital Note”). The ONE44 Capital Note has an original issue discount of $10,000 and reimbursement of $5,000, resulting in gross proceeds to the Company of $100,000.

The ONE44 Capital Note bears interest at a rate of 4% per annum and matures on May 20, 2023. Any amount of principal or interest on the Note which is not paid when due will bear interest at a rate of 24% per annum. The Note may not be prepaid in whole or in part except as provided in the Note by way of conversion at the option of the Buyer.

ONE44 is entitled, at its option, at any time after the sixth monthly anniversary of cash payment, to convert all or any amount then outstanding under the May 2022 ONE44 Note into shares of common stock at a price per share equal to 55% of the lowest daily trading VWAP of the Company’s common stock for the 20 prior trading days, subject to a 4.99% equity blocker and subject to the terms of the May 2022 ONE44 Note.

Since the conversion price is based on 55% of the lowest daily trading VWAP of the Company’s common stock for the 20 prior trading days, the Company has determined that the conversion feature is considered a derivative liability for the Company, which is detailed in Note 10.

The $10,000 original issue discounts, the $5,000 reimbursement and the conversion features were recorded as debt discounts and amortized over the term of the note. Therefore, the total debt discount at the inception date of this convertible promissory note was recorded at $95,000.

ONE44 Capital LLC converted $20,000 principal to common shares in the quarter ended March 31, 2023 and converted $20,000 principal and $770 interest to common shares in the quarter ended June 30, 2023.

On May 10, 2023, the Company entered into debt repayment and release agreement with ONE44 Capital LLC. Pursuant to the terms of the Agreement, the Company agreed to pay to ONE44 $77,893 as full and complete payment of certain debt owed by the Company to ONE44 pursuant to a 4% convertible redeemable note due May 20, 2023 (the “Note”), in principal sum of $75,000, plus accrued interest. On May 11, 2023, pursuant to the terms of the Agreement, the Company paid ONE44 $77,893, the debt was settled, and the ONE44 Capital Note was terminated.

The balance of the ONE44 Capital note as of ~~March~~June 3130, 2024 and December 31, 2023 was $0, respectively.

Convertible Promissory Note – 1800 Diagonal Lending LLC

On June 23, 2022, the Company entered into a Securities Purchase Agreement, (the “Sixth Street #4 purchase agreement”), by and between the Company and Diagonal Lending LLC. Pursuant to the terms of the SPA, the Company agreed to issue and sell, and the Buyer agreed to purchase, a convertible note in the aggregate principal amount of $86,625 (the “Diagonal Note”). The Diagonal Note has an original issue discount of $7,875, $3,000.00 paid to legal counsel for the Company, and $750.00 which amount was retained by the Investor as a due diligence fee resulting in gross proceeds to the Company of $75,000.

The Note has a maturity date of June 23, 2023 and bears interest at 10% per annum. No payments of the principal amount or interest are due prior to the maturity date, other than as specifically set forth in the Note. The Company may not prepay the Note prior to the maturity date, other than by way of a conversion initiated by Investor.

The Note provides Investor with conversion rights to convert all or any part of the outstanding and unpaid principal amount of the Note at any time, from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of the Note and ending on the later of: (i) the Maturity Date; and (ii) the date of payment of the Default Amount (as defined in the Note). Notwithstanding the foregoing, the Investor shall not be entitled to a conversion under the Note upon which the sum of (1) the number of shares of common stock, $0.000001 par value per share (“Common Stock”) beneficially owned by the Investor and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Note or the unexercised or unconverted portion of any other security of the Company subject to a similar limitation on conversion or exercise) and (2) the number of shares of Common Stock issuable upon the conversion would result in beneficial ownership by the Investor and its affiliates of more than 4.99% of the outstanding shares of Common Stock.

The conversion price is equal to the lesser of the variable conversion price and fixed conversion price which is $1.00. The variable conversion price is defined in the Note as 75% multiplied by the lowest VWAP for shares of Common Stock during the 20 trading days immediately preceding the Conversion Date.

Since the conversion price is based on the lesser of (i) $1.00 or (ii) 75% of the VWAP during the 20-trading day period immediately prior to the option conversion date, the Company has determined that the conversion feature is considered a derivative liability for the Company, which is detailed in Note 10.

The $11,625 original issue discounts and the conversion features were recorded as debt discounts and amortized over the term of the note. Therefore, the total debt discount at the inception date of this convertible promissory note was recorded at $86,625.

Three conversions occurred during the period ending March 31, 2023, resulting in a principal reduction of $46,500 and remaining balance was settled on February 17, 2023 as disclosed below.

On February 17, 2023, the Company entered into a Settlement and Release Agreement by and between the Company and 1800 Diagonal Lending LLC. Pursuant to the terms of the Agreement, in full and final settlement of the Diagonal lending LLC notes, the Company agreed to (i) pay to the Lender $105,000; and (ii) issue to the Lender shares of the Company’s common stock with respect to the Lender’s notice of conversion dated February 16, 2023 relating to a partial conversion of Note #1 (with a then-current balance of $45,479).

As a result, as of February 17, 2023, pursuant to the terms of the Agreement, the Debt was settled and all the 1800 Diagonal Lending LLC notes were terminated.

The balance of the Diagonal note as of ~~March~~June 3130, 2024 and December 31, 2023 was $0, respectively.

Convertible Promissory Note – Diagonal Lending LLC

On July 8, 2022, the Company entered into a Securities Purchase Agreement, (the “1800 Diagonal Lending LLC purchase agreement”), by and between the Company and Diagonal Lending LLC. Pursuant to the terms of the SPA, the Company agreed to issue and sell, and the Buyer agreed to purchase, a convertible note in the aggregate principal amount of $61,812 (the “Diagonal Note”). The Diagonal Note has an original issue discount of $5,375 and $3,750 paid to legal counsel for the Company, resulting in gross proceeds to the Company of $52,688.

The Note has a maturity date of July 8, 2023 and bears interest at 10% per annum. No payments of the principal amount or interest are due prior to the maturity date, other than as specifically set forth in the Note. The Company may not prepay the Note prior to the maturity date, other than by way of a conversion initiated by Investor.

The $5,375 original issue discounts and the conversion features were recorded as debt discounts and amortized over the term of the note. Therefore, the total debt discount at the inception date of this convertible promissory note was recorded at $61,812.

As a result, as of February 17, 2023, pursuant to the terms of the Agreement, the Debt was settled and all the 1800 Diagonal Lending LLC notes were terminated.

The balance of the Diagonal note as of ~~March~~June 3130, 2024 and December 31, 2023 was $0, respectively.

26Below is the summary of the principal balance and debt discounts as of June 30, 2024 and December 31, 2023.

Below is the summary of the principal balance and debt discounts as of March 31, 2024 and December 31, 2023.

SCHEDULE OF CONVERTIBLE PROMISSORY NOTE

Convertible Promissory Note Holder	Start Date	End Date	Initial Note Principal Balance		Current Note Principal Balance		Debt Discounts As of Issuance		Amortization			Debt Discounts As of ~~December~~June 3130, ~~2023~~2024
GS Capital #2	2/16/2022	2/16/2022		577,778		-		577,778		(577,778	)		-
GS Capital #2 - replacement	6/29/2022	8/16/2022		635,563		-		-		-			-
GS Capital #3	3/16/2022	3/16/2022		577,778		577,778		577,778		(577,778)	)		-
GS Capital #4	4/1/2022	4/1/2022		550,000		550,000		550,000		(550,000	)		-
Eagle Equities LLC	4/13/2022	4/13/2022		1,100,000		1,100,000		1,100,000		(1,100,000	)		-
GS Capital #5	4/29/2022	4/29/2022		550,000		550,000		550,000		(550,000	)		-
GS Capital #6	6/3/2022	6/3/2022		550,000		550,000		550,000		(550,000	)		-
Chris Etherington	8/26/2022	8/26/2022		165,000		165,000		165,000		(165,000	)		-
Rui Wu	8/26/2022	8/26/2022		550,000		550,000		550,000		(550,000	)		-
Sixth Street Lending #1	11/28/2022	11/28/2022		224,000		-		173,894		(173,894	)		-
Sixth Street Lending #2	12/9/2022	12/9/2022		93,500		-		79,118		(79,118	)		-
Fast Capital LLC	1/10/2022	1/10/2023		120,000		120,000		120,000		(120,000	)		-
Sixth Street Lending #3	1/12/2022	1/12/2023		70,125		-		50,748		(50,748	)		-
One 44 Capital	2/16/2022	2/16/2023		175,500		-		148,306		(135,000	)		-
Coventry Enterprise	3/3/2022	3/3/2023		150,000		-		150,000		(150,000	)		-
One 44 Capital #2	5/20/2022	5/20/2023		115,000		-		115,000		(115,000	)		-
1800 Diagonal Lending LLC	6/23/2022	6/23/2023		86,625		-		86,625		(86,625	)		-
1800 Diagonal Lending LLC	7/8/2022	7/8/2023		61,813		-		61,813		(61,813	)		-
Total										Total		$	-
										Remaining note principal balance			4,162,778
										Total convertible promissory notes, net		$	4,162,778

~~Future payments of principal of convertible notes payable at March 31, 2024 are as follows:~~27

Future payments of principal of convertible notes payable at June 30, 2024 are as follows:

Years ending December 31,
2024	$	(4,162,778	)
2025		-
2026		-
Thereafter		-
Total	$	(4,162,778	)

Interest expenses recorded related to the convertible notes payable for the ~~three~~six months ended ~~March~~June 3130, 2024 and 2023 were $~~186~~301,~~812~~732 and $~~171~~371,~~736~~762, respectively.

The Company amortized $0 and $~~126~~140,~~991~~144 of the discount on the convertible notes payable to interest expense for the ~~three~~six months ended ~~March~~June 3130, 2024 and 2023, respectively.

NOTE 8 – SHARES ISSUED - LIABILITY

As of ~~March~~June 3130, 2024 and December 31, 2023, the Company entered into various consulting agreements with consultants, directors, and convertible debt. The balances of shares to be issued – liability was $~~393~~468,042 and $318,042, respectively. The Company recorded these consultant and director shares under liability based on the shares will be issued at a fixed monetary amount known at inception under ASC 480.

Shares to be issued - liability is summarized as below:


Beginning Balance, January 1, 2023	$	573,333
Shares to be issued		300,000
Shares issued		(555,291	)
Ending Balance, December 31, 2023	$	318,042

Shares to be issued - liability is summarized as below:

Beginning Balance, January 1, 2024	$	318,042
Shares to be issued		75150,000
Shares issued		0
Ending Balance, March 31, 2024	$	393,042
Ending Balance, June 30, 2024	$	468,042

NOTE 9 – DERIVATIVE LIABILITY

The derivative liability is derived from the conversion features in note 8 signed for the period ended December 31, 2023. All were valued using the weighted-average Binomial option pricing model using the assumptions detailed below. As of ~~March~~June 3130, 2024 and December 31, 2023, the derivative liability was $2,~~231~~175,~~297~~018 and $873,913, respectively. The Company recorded $156,~~357,384~~279 ~~loss~~gain and $~~335~~245,~~722~~343 ~~loss~~gain from ~~changes~~ changes in derivative liability during the three months ended ~~March~~June 3130, 2024 and ~~year~~2023, respectively. The Company recorded $1,301,105 loss and $1,137,479 loss from changes in derivative liability during the six months ended ~~December~~June 3130, 2024 and 2023, respectively.

The Binomial model with the following assumption inputs:

	December 31, 2023
Annual Dividend Yield		—
Expected Life (Years)		0.1 – 0.7 years
Risk-Free Interest Rate		5.26% - 5.53	%
Expected Volatility		570-703	%

Fair value of the derivative is summarized as below:


Beginning Balance, December 31, 2022	$	799,988
Additions		-
Mark to Market		335,722
Cancellation of Derivative Liabilities Due to Conversions		-
Reclassification to APIC Due to Conversions		(261,797	)
Ending Balance, December 31, 2023	$	873,913

	March 31, 2024
	June 30, 2024
Annual Dividend Yield		—
Expected Life (Years)		0.1 – 0.7 years
Risk-Free Interest Rate		5.3833	%
Expected Volatility		~~726~~593	%

Fair value of the derivative is summarized as below:

Beginning Balance, December 31, 2023	$	873,913
Derivative liability , Balance	$	873,913
Additions		-
Mark to Market		1,~~357~~301,~~384~~105
Cancellation of Derivative Liabilities Due to Conversions		-
Reclassification to Other Income (Loss) Due to Conversions		-
Ending Balance, March 31, 2024	$	2,231,297
Ending Balance, June 30, 2024	$	2,175,018
Derivative liability, Balance	$	2,231,297

NOTE 10 – NOTE PAYABLE, RELATED PARTY

Note payable – ~~Amir~~Mr. Ben-Yohanan without interest

For the ~~three~~six months ended ~~March~~June 3130, 2024 and 2023, the Company borrowed $12119,~~500~~000 and $~~413~~1,~~333~~060,000, respectively, from ~~Amir~~Mr. Ben-Yohanan. The Company, also, made payments of $396,667 and settled of $1,197,501 with issuance in common stock shares towards the note payable as of December 31, 2023. The note is due on demand and has no interest. The balance of the related party note payable as of ~~March~~June 3130, 2024 and December 31, 2023 was $~~262~~369,~~593~~093 and $250,093, respectively, and included in discontinued operations on the balance sheets.

Effective March 4, 2021, the Company entered into three (3) separate director agreements with Amir Ben-Yohanan, Christopher Young, and Simon Yu. The Director Agreements set out terms and conditions of each of Mr. Ben-Yohanan’s, Mr. Young’s, and Mr. Yu’s role as a director of the Company. Mr. Young and Yu resigned from their officer and director positions with the Company on October 8, 2022.

Pursuant to the Director Agreements, the Company agreed to compensate each of the Directors as follows:

	●	An issuance of 31,821 shares of the Company’s common stock, par value par value $0.000001 (“Common Stock”), to be issued on the Effective Date, as compensation for services provided by each of the Directors to the Company prior to the Effective Date; and
	●	An issuance of a number of shares of Common Stock having a fair market value (as defined in each of the Director Agreements) of $25,000 at the end of each calendar quarter that the Director serves as a director.

As of ~~March~~June 3130, 2024 and December 31, 2023, the Company has a payable balance owed to the sellers of Magiclytics of $97,761 and $97,761 ~~from~~ from the acquisition of Magiclytics on February 3, 2021.

During the year ended December 31, 2023, Mr. Young and Mr. Yu prior accrued and unpaid wages amounting $80,000 a piece for total of $160,000 as of September 30, 2023 were forgiven per consulting agreement section 3(c) by the Company. The forgiven accrued and unpaid wages were recorded as a charge to additional paid in capital.

On October 7, 2021, the Board of Directors of the Company appointed Dmitry Kaplun as the Company’s Chief Financial Officer. Pursuant to the terms of the Employment Agreement, the Board entered into a restricted stock award agreement (the “Restricted Stock Agreement”) dated October 7, 2022. Pursuant to the terms of the Restricted Stock Agreement, the Board granted Mr. Kaplun 58,824 shares of restricted common stock on October 7, 2022. 25% of the shares vest on each of the three-month, six-month, nine-month and 12-month anniversaries of the grant date.

On October 12, 2021, the Board appointed Massimiliano Musina to serve as a member of the Company’s Board of Directors. In connection with Mr. Musina’s appointment, the Company and Mr. Musina entered into an Independent Director Agreement dated October 12, 2021 (the “Director Agreement”). Pursuant to the terms of the Director Agreement, the Company agreed to issue to Mr. Musina each quarter a number of shares of common stock having a fair market value of $25,000, in exchange for Mr. Musina’s service as a member of the Company’s Board of Directors.

On April 1, 2022, Clubhouse Media Group, Inc. (the “Company”) entered into an employment agreement with Amir Ben-Yohanan, the Company’s Chief Executive Officer, effective April 11, 2022. The terms of the employment agreement are substantially similar to the terms of Mr. Ben-Yohanan’s prior employment agreement with the Company. Accordingly, pursuant to the terms of the employment agreement, Mr. Ben-Yohanan will continue to serve as Chief Executive Officer of the Company, reporting to the Board of Directors (the “Board”). As compensation for Mr. Ben-Yohanan’s services, the Company agreed to pay Mr. Mr. Ben-Yohanan an annual base salary of $400,000 (the “Base Salary”) comprised of two parts a “Cash Portion”, and an “Optional Portion”. The Cash Portion is a monthly cash payment of $15,000. The remaining $220,000 per year – the Optional Portion – is payable as follows:

	(i)	If the Company’s Board determines that the Company has sufficient cash on hand to pay all or a portion of the Optional Portion in cash, such amount shall be paid in cash.
	(ii)	If the Board determines that the Company does not have sufficient cash on hand to pay all of the Optional Portion in cash, then the portion of the Optional Portion which the Board determines that the Company has sufficient cash on hand to pay in cash will be paid in cash, and the remainder (the “Deferred Portion”) will either:

a. be paid at a later date, when the Board determines that the Company has sufficient cash on hand to enable the Company to pay the Deferred Portion; or b. will not be paid in cash – and instead, the Company will issue shares of Company Common Stock equal to ~~(A) the Deferred Portion, divided by (B) the VWAP (as defined in the employment agreement) as of the (B) date of issuance of such shares of Company Common Stock.~~

	(A)	the Deferred Portion, divided by (B) the VWAP (as defined in the employment agreement) as of the
	(B)	date of issuance of such shares of Company Common Stock.

In addition, pursuant to the employment agreement, Mr. Ben-Yohanan is entitled to be paid discretionary annual bonuses as determined by the Board, and is also entitled to receive fringe benefits, such as, but not limited to, reimbursement for reimbursement for all reasonable and necessary out-of-pocket business, entertainment and travel, vacation days, and certain insurances.

The initial term of the employment agreement iswas for one year from April 11, 2022, unless earlier terminated. Thereafter, the term is automatically extended on an annual basis for terms of one year each, unless either the Company or Mr. Ben-Yohanan provides notice to the other party of their desire to not so renew the term of the agreement (as applicable) at least 30 days prior to the expiration of the then-current term.

Mr. Ben-Yohanan’s employment with the Company shall be “at will,” meaning that either Mr. Ben-Yohanan or the Company may terminate Mr. Ben-Yohanan’s employment at any time and for any reason, subject to certain terms and conditions.30

~~The Company may terminate the employment agreement at any time, with or without “cause”, as defined in the employment agreement and~~ Mr. Ben-Yohanan’s ~~may~~employment ~~terminate~~with the ~~employment~~Company ~~agreement~~is “at ~~any time~~will, ~~with or without “good reason~~”, asmeaning ~~defined~~that ineither ~~the employment agreement. If the Company terminates the employment agreement for cause or~~ Mr. Ben-Yohanan ~~terminates the employment agreement without good reason, Mr. Ben-Yohanan will be entitled to be paid any unpaid salary owed~~ or ~~accrued, including~~ the ~~issuance of any shares of~~ Company ~~Common Stock owed or accrued (as compensation) as of the termination date. In the event that there was any Deferred Portion~~may ~~which~~terminate had been agreed to be paid in cash, such Deferred Portion instead will be paid in shares of Company Common Stock as though such amount had been agreed to be paid via the issuance of shares of Company Common Stock. Mr. Ben-Yohanan’s ~~will~~employment ~~also~~at beany ~~entitled~~time toand ~~payment~~ for any ~~unreimbursed expenses as of the termination date. However~~reason, ~~any~~subject ~~unvested portion of any equity granted~~ to ~~Mr.~~certain ~~Ben-Yohanan~~terms ~~will be~~and ~~immediately forfeited as of the termination date~~conditions.

The Company may terminate the employment agreement at any time, with or without “cause,” as defined in the employment agreement and Mr. Ben-Yohanan may terminate the employment agreement at any time, with or without “good reason,” as defined in the employment agreement. If the Company terminates the employment agreement for cause or Mr. Ben-Yohanan terminates the employment agreement without good reason, Mr. Ben-Yohanan will be entitled to be paid any unpaid salary owed or accrued, including the issuance of any shares of Company Common Stock owed or accrued (as compensation) as of the termination date. In the event that there was any Deferred Portion which had been agreed to be paid in cash, such Deferred Portion instead will be paid in shares of Company Common Stock as though such amount had been agreed to be paid via the issuance of shares of Company Common Stock. Mr. Ben-Yohanan will also be entitled to payment for any unreimbursed expenses as of the termination date. However, any unvested portion of any equity granted to Mr. Ben-Yohanan will be immediately forfeited as of the termination date.

During the year ended December 31, 2023, Mr. Ben-Yohanan entered into an agreement with the Company to forgive all prior accrued and unpaid wages amounting to $785,000 as of September 30, 2023 and agreed to forego any wages until further notification to the Company. The forgiven accrued and unpaid wages were recorded as a charge to additional paid in capital.

As of June 30, 2024, the Company had accrued unpaid wages amounting to $300,000 to Mr. Ben-Yohanan and included in accounts payable and accrued liabilities on the balance sheets.

On April 19, 2022, the board of directors (the “Board”) of Clubhouse Media Group, Inc. (the “Company”) and stockholders holding a majority of the Company’s voting power approved the Clubhouse Media Group, Inc. 2022 Equity Incentive Plan (the “2022 Plan”).

On July 11, 2022, the Board and stockholders holding a majority of the voting power of the Company approved and adopted the Clubhouse Media Group, Inc. 2023 Equity Incentive Plan (the “2023 Plan”).

NOTE 11 - JOINT VENTURE AGREEMENT- CONSOLIDATED SUBSIDIARY

On July 31, 2022, the Company entered into a joint venture deal memo with Alden Henri Reiman (“Mr. Reiman”), pursuant to which the parties agreed to enter into a more permanent joint venture arrangement, involving the creation of a Nevada limited liability company, The Reiman Agency LLC (the “Agency”), of which the Company shall own 51% of the membership units, and Mr. Reiman shall own 49% of the membership units. Mr. Reiman is to serve as President of the Agency, pursuant to the terms of an Executive Employment Agreement. The parties’ respective membership interests shall be non-transferrable, and the Agency shall not issue additional membership interests, unless the parties mutually consent in each instance. The Company consolidated this joint venture since we owned 51% and has control in this entity. ~~While the Company previously generated revenue through The Reiman Agency, the Company has since discontinued these operations of the Joint Venture.~~

30Mr. Reiman shall oversee the day-to-day operations of the Agency, but shall consult with the Company on a regular basis and regularly update the Company on the status of deals and the operations of the business. All material business and financial decisions shall be subject to the Company’s final approval. The Company shall not exercise its approval rights in an arbitrary or capricious manner.

According to the Joint Venture, Mr. Reiman shall oversee the day-to-day operations of the Agency, but shall consult with the Company on a regular basis and regularly update the Company on the status of deals and the operations of the business. All material business and financial decisions shall be subject to the Company’s final approval. The Company shall not exercise its approval rights in an arbitrary or capricious manner.

In the event that Mr. Reiman determines that office space is required to properly carry on the business of the Agency, Mr. Reiman shall have the authority to lease a reasonable office space on behalf of the Agency, subject to the Company’s prior review and approval. The Company has agreed and approved an office leasing budget of up to $200,000 USD annually. Expenses in excess of $400 must be pre-approved by the Company.

On the Effective Date, the parties closed the Agreement by executing an Operating Agreement for the Agency, dated the Effective Date, which encapsulates the essential terms and conditions contained in the Agreement.

In connection with Mr. Reiman’s appointment as President of the Agency, on the Effective Date, the Company and the Agency, a majority owned subsidiary of the Company, entered into a written Executive Employment Agreement (the “Employment Agreement”) with Mr. Reiman for a term of two (2) years following the Effective Date (the “Initial Term”). The Initial Term and any renewal term shall automatically be extended for up to two (2) more additional terms of two (2) years (each a “Renewal Term”), for an aggregate of up to six (6) years.

The Employment Agreement provides Mr. Reiman with a monthly base salary of $37,500 per month, payable on a weekly basis in accordance with the Company’s own payroll policies for the initial term, provided however, that if within the three (3) month period following full execution of the Employment Agreement the Agency is profitable, the Base Salary shall increase to $42,500 per month, beginning the week following the end of the Period. On December 14, 2023, the Company terminated employment of Mr. Reiman.

Additionally, on the last day of each month of the term, Mr. Reiman shall be entitled to an amount of shares equal to seven and one half percent (7.5%) of the net receipts for the applicable month (“Additional Shares”), divided by the twenty (20) day VWAP of such shares from the last day of the applicable month. All Additional Shares issued to Mr. Reiman pursuant to the Employment Agreement shall be issued to Mr. Reiman within seven (7) business days of the date such shares vest.

Mr. Reiman shall also be entitled to Twenty-Five Percent (25%) of the net receipts generated by the Agency during each month (the “Commission Bonus”). The Commission Bonus shall be calculated monthly and paid to Reiman within seven (7) business days of the last business day of the applicable month.

The Company allocates the net income or loss of this joint venture to non-controlling interest based on the ownership of this joint venture. The non-controlling interest for the three months ended ~~March~~June 3130, 2024 and 2023, was $~~1,233~~(278) and $(~~144~~12,~~119~~158), respectively, included with discontinued operations in statement of operations. The non-controlling interest for the six months ended June 30, 2024 and 2023, was $955 and $(156,277), respectively, included with discontinued operations in statement of operations. During December 2023, the Company terminated the joint venture agreement with Mr. Reiman due to switching focus away from brand deals. However, the controlling ownership percentage of the Company did not change and will continue until the contracts entered into before termination of agreement are completed.

During December 2023, the Company terminated the joint venture agreement with Mr. Reiman due to switching focus away from brand deals. However, the controlling ownership percentage of the Company did not change and will continue until the contracts entered into before termination of agreement are completed.

NOTE 12 – STOCKHOLDERS’ EQUITY (DEFICIT)

On April 19, 2022, the Company filed Articles of Amendment to the Company’s Articles of Incorporation with the Nevada Secretary of State that had the effect of increasing the authorized shares of common stock from 500,000,000 to 2,000,000,000.

On June 23, 2022, the Company filed Articles of Amendment to the Company’s Articles of Incorporation with the Nevada Secretary of State that had the effect of increasing the authorized shares of common stock from 2,000,000,000 to 8,000,000,000. The Company’s Preferred Stock was unchanged by the Amendment.

On November 15, 2022, the Company filed a certificate of amendment to its Articles of Incorporation to increase the Company’s authorized shares of common stock, par value $0.000001 per share, from 8,000,000,000 to 25,000,000,000. Accordingly, following the filing of the Amendment, the Company has 25,050,000,000 authorized shares of capital stock, consisting of 25,000,000,000 shares of common stock and 50,000,000 shares of preferred stock, par value $0.001 per share.

One share of Series X Preferred Stock is outstanding as of December 31, 2022. The single share of Series X Preferred Stock outstanding is held by Amir Ben-Yohanan, the Company’s Chief Executive Officer, who also holds 1156,~~032~~958,~~673,753~~396 shares of Common Stock as of ~~May 8~~December 31, ~~2024~~2023.

Preferred Stock

As of ~~March~~June 3130, 2024 there was 1 preferred share issued and outstanding.

On November 12, 2020, the Company filed a Certificate of Designations with the Secretary of State of Nevada to designate one share of the preferred stock of the Company as the Series X Preferred Stock of the Company.

In November 2020, the Company issued and sold to the Company’s Chief Executive Officer 1 share of Series X Preferred Stock, at a purchase price of $1.00. The share of Series X Preferred Stock shall have a number of votes at any time equal to (i) the number of votes then held or entitled to be made by all other equity securities of the Company, debt securities of the Company or pursuant to any other agreement, contract or understanding of the Company, plus (ii) one (1). The Series X Preferred Stock shall vote on any matter submitted to the holders of the Common Stock, or any class thereof, for a vote, and shall vote together with the Common Stock, or any class thereof, as applicable, on such matter for as long as the share of Series X Preferred Stock is issued and outstanding. The Series X Preferred Stock shall not have the right to vote on any matter as to which solely another class of Preferred Stock of the Company is entitled to vote pursuant to the certificate of designations of such other class of Preferred Stock of the Company.

The Series X Preferred Stock shall not be convertible into shares of any other class of stock of the Company and entitled to receive any dividends paid on any other class of stock of the Company.

In the event of any liquidation, dissolution or winding up of the Company, either voluntarily or involuntarily, a merger or consolidation of the Company wherein the Company is not the surviving entity, or a sale of all or substantially all of the assets of the Company, the Series X Preferred Stock shall not be entitled to receive any distribution of any of the assets or surplus funds of the Company and shall not participate with the Common Stock or any other class of stock of the Company therein.

Common Stock

As of ~~March~~June 3130, 2024 and December 31, 2023, the Company had 25,000,000,000 shares of common stock authorized with a par value of $0.000001. There were 16,372,179,486 shares issued and outstanding at ~~March~~June 3130, 2024 and December 31, 2023.

For the year ended December 31, 2023, the Company issued 2,105,949,128 shares to settle conversions of $229,840 of convertible promissory notes principal and accrued interest.

For the year ended December 31, 2023, the Company issued 5,987,500,000 shares for debt exchange in amount of $1,197,501 to Amir Ben-Yohanan non-interest loan to the Company.

For the year ended December 31, 2023, the Company issued 1,448,352,195 shares for services provided by directors.

Warrants

A summary of the Company’s stock warrants activity is as follows:

SUMMARY OF WARRANTS ACTIVITY

	Number of Options (in thousands)		Weighted- Average Exercise Price		Weighted- Average Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2023		165,077	$	2.05		2.65		-
Issued		-		-		-		-
Exercised		-		-		-		-
Canceled		-		-		-		-
Outstanding at March 31, 2024		165,077	$	2.05		2.40	$	-
Outstanding at June 30, 2024		165,077	$	2.05		2.15	$	-
Vested and expected to vest at March 31, 2024		165,077	$	2.05		2.40	$	-
Vested and expected to vest at June 30, 2024		165,077	$	2.05		2.15	$	-
Exercisable at March 31, 2024		165,077	$	2.05		2.40	$	-
Exercisable at June 30, 2024		165,077	$	2.05		2.15	$	-

No stock options were granted by the Company during the ~~three~~six months ended ~~March~~June 3130, 2024.

The fair values of warrants granted in 2021 were estimated using the Black-Scholes option pricing model on the grant date using the following assumptions:

Dividend yield	—		%
Expected term (in years)		5
Volatility		368 - 369	%

Equity Purchase Agreement and Registration Rights Agreement

On November 2, 2021, Clubhouse Media Group, Inc (the “Company”) entered into an Equity Purchase Agreement (the “Agreement”) and Registration Rights Agreement (the “Registration Rights Agreement”) with Peak One Opportunity Fund, L.P., a Delaware limited Partnership (“Investor”), dated as of October 29, 2021, pursuant to which the Company shall have the right, but not the obligation, to direct Investor, to purchase up to $15,000,000.00 (the “Maximum Commitment Amount”) in shares of the Company’s common stock, par value $0.000001 per share (“Common Stock”) in multiple tranches. Further, under the Agreement and subject to the Maximum Commitment Amount, the Company has the right, but not the obligation, to submit a Put Notice (as defined in the Agreement) from time to time to Investor (i) in a minimum amount not less than $20,000.00 and (ii) in a maximum amount up to the lesser of (a) $400,000.00 or (b) 250% of the Average Daily Trading Value (as defined in the Agreement).

In exchange for Investor entering into the Agreement, the Company agreed, among other things, to (A) issue Investor and Peak One Investments, LLC, an aggregate of 70,000 shares of Common Stock (the “the Commitment Shares”), and (B) file a registration statement registering the Common Stock issued as Commitment Shares or issuable to Investor under the Agreement for resale (the “Registration Statement”) with the Securities and Exchange Commission within 60 calendar days of the Agreement, as more specifically set forth in the Registration Rights Agreement.

The obligation of Investor to purchase the Company’s Common Stock shall begin on the date of the Agreement, and ending on the earlier of (i) the date on which Investor shall have purchased Common Stock pursuant to this Agreement equal to the Maximum Commitment Amount, (ii) twenty four (24) months after the date of the Agreement, (iii) written notice of termination by the Company to Investor (which shall not occur during any Valuation Period or at any time that Investor holds any of the Put Shares), (iv) the Registration Statement is no longer effective after the initial effective date of the Registration Statement, or (v) the date that the Company commences a voluntary case or any person commences a proceeding against the Company, a custodian is appointed for the Company or for all or substantially all of its property or the Company makes a general assignment for the benefit of its creditors (the “Commitment Period”).

During the Commitment Period, the purchase price to be paid by Investor for the Common Stock under the Agreement shall be 95% of the Market Price, which is defined as the lesser of the (i) closing bid price of the Common Stock on the trading day immediately preceding the respective Put Date (as defined in the Agreement), or (ii) lowest closing bid price of the Common Stock during the Valuation Period (as defined in the Agreement), in each case as reported by Bloomberg Finance L.P or other reputable source designated by Investor.

33The Agreement and the Registration Rights Agreement contain customary representations, warranties, agreements, and conditions to completing future sale transactions, indemnification rights and obligations of the parties. Among other things, Investor represented to the Company, that it is an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”)), and the Company sold the securities in reliance upon an exemption from registration contained in Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder.

The Agreement and the Registration Rights Agreement contain customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. Among other things, Investor represented to the Company, that it is an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”)), and the Company sold the securities in reliance upon an exemption from registration contained in Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder.

2023 Equity Incentive Plan

A total of 75,000,000 shares of the Company’s common stock are authorized for issuance pursuant to the 2023 Plan.

Additionally, if any award issued pursuant to the 2023 Plan expires or becomes unexercisable without having been exercised in full, is surrendered pursuant to an exchange program, as provided in the 2023 Plan, or, with respect to restricted stock, restricted stock units (“RSUs”), performance units or performance shares, is forfeited to or repurchased by the Company due to the failure to vest, the unpurchased shares (or for awards other than stock options or stock appreciation rights the forfeited or repurchased shares) which were subject thereto will become available for future grant or sale under the 2023 Plan (unless the 2023 Plan has terminated). With respect to stock appreciation rights, only shares actually issued pursuant to a stock appreciation right will cease to be available under the 2023 Plan; all remaining shares under stock appreciation rights will remain available for future grant or sale under the 2023 Plan (unless the 2023 Plan has terminated). Shares that have actually been issued under the 2023 Plan under any award will not be returned to the 2023 Plan and will not become available for future distribution under the 2023 Plan; provided, however, that if shares issued pursuant to awards of restricted stock, restricted stock units, performance shares or performance units are repurchased by the Company or are forfeited to the Company due to the failure to vest, such shares will become available for future grant under the 2023 Plan. Shares used to pay the exercise price of an award or to satisfy the tax withholdings related to an award will become available for future grant or sale under the 2023 Plan. To the extent an award under the 2023 Plan is paid out in cash rather than shares, such cash payment will not result in reducing the number of shares available for issuance under the 2023 Plan.

Notwithstanding the foregoing and, subject to adjustment as provided in the 2023 Plan, the maximum number of shares that may be issued upon the exercise of incentive stock options will equal the aggregate share number stated above, plus, to the extent allowable under Section 422 of the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder, any shares that become available for issuance under the 2023 Plan in accordance with the foregoing.

Plan Administration

The Board or one or more committees appointed by the Board will administer the 2023 Plan. In addition, if the Company determines it is desirable to qualify transactions under the 2023 Plan as exempt under Rule 16b-3 of the Securities Exchange Act of 1934, as amended, such transactions will be structured with the intent that they satisfy the requirements for exemption under Rule 16b-3. Subject to the provisions of the 2023 Plan, the administrator has the power to administer the 2023 Plan and make all determinations deemed necessary or advisable for administering the 2023 Plan, including the power to determine the fair market value of the Company’s common stock, select the service providers to whom awards may be granted, determine the number of shares covered by each award, approve forms of award agreements for use under the 2023 Plan, determine the terms and conditions of awards (including the exercise price, the time or times at which the awards may be exercised, any vesting acceleration or waiver or forfeiture restrictions and any restriction or limitation regarding any award or the shares relating thereto), construe and interpret the terms of the 2023 Plan and awards granted under it, prescribe, amend and rescind rules relating to the 2023 Plan, including creating sub-plans and modify or amend each award, including the discretionary authority to extend the post-termination exercisability period of awards (provided that no option or stock appreciation right will be extended past its original maximum term), and to allow a participant to defer the receipt of payment of cash or the delivery of shares that would otherwise be due to such participant under an award. The administrator also has the authority to allow participants the opportunity to transfer outstanding awards to a financial institution or other person or entity selected by the administrator and to institute an exchange program by which outstanding awards may be surrendered or cancelled in exchange for awards of the same type which may have a higher or lower exercise price or different terms, awards of a different type or cash, or by which the exercise price of an outstanding award is increased or reduced. The administrator’s decisions, interpretations and other actions are final and binding on all participants.

Eligibility

Awards under the 2023 Plan, other than incentive stock options, may be granted to employees (including officers) of the Company or a subsidiary, members of the Company’s Board, or consultants engaged to render bona fide services to the Company or a subsidiary. Incentive stock options may be granted only to employees of the Company or a subsidiary.

Stock Options

Stock options may be granted under the 2023 Plan. The exercise price of options granted under the 2023 Plan generally must at least be equal to the fair market value of the Company’s common stock on the date of grant. The term of each option will be as stated in the applicable award agreement; provided, however, that the term may be no more than 10 years from the date of grant. The administrator will determine the methods of payment of the exercise price of an option, which may include cash, shares or other property acceptable to the administrator, as well as other types of consideration permitted by applicable law. After the termination of service of an employee, director, or consultant, they may exercise their option for the period of time stated in their option agreement. In the absence of a specified time in an award agreement, if termination is due to death or disability, the option will remain exercisable for 12 months. In all other cases, in the absence of a specified time in an award agreement, the option will remain exercisable for three months following the termination of service. An option may not be exercised later than the expiration of its term. Subject to the provisions of the 2023 Plan, the administrator determines the other terms of options.

Notwithstanding any other provision of the 2023 Plan to the contrary, the aggregate grant date fair value of all awards granted, under the 2023 Plan, to any director who is not an employee, during any fiscal year of the Company, taken together with any cash compensation paid to such director during such fiscal year, shall not exceed $300,000.

Stock Appreciation Rights

Stock appreciation rights may be granted under the 2023 Plan. Stock appreciation rights allow the recipient to receive the appreciation in the fair market value of the Company’s common stock between the exercise date and the date of grant. Stock appreciation rights may not have a term exceeding 10 years. After the termination of service of an employee, director or consultant, they may exercise their stock appreciation right for the period of time stated in their stock appreciation right agreement. In the absence of a specified time in an award agreement, if termination is due to death or disability, the stock appreciation rights will remain exercisable for 12 months. In all other cases, in the absence of a specified time in an award agreement, the stock appreciation rights will remain exercisable for three months following the termination of service. However, in no event may a stock appreciation right be exercised later than the expiration of its term. Subject to the provisions of the 2023 Plan, the administrator determines the other terms of stock appreciation rights, including when such rights become exercisable and whether to pay any increased appreciation in cash or with shares of the Company’s common stock, or a combination thereof, except that the per share exercise price for the shares to be issued pursuant to the exercise of a stock appreciation right will be no less than 100% of the fair market value per share on the date of grant.

Restricted Stock

Restricted stock may be granted under the 2023 Plan. Restricted stock awards are grants of shares of the Company’s common stock that vest in accordance with terms and conditions established by the administrator. The administrator will determine the number of shares of restricted stock granted to any employee, director, or consultant and, subject to the provisions of the 2023 Plan, will determine the terms and ~~conditions~~ conditions of such awards. The administrator may impose whatever conditions to vesting it determines to be appropriate (for example, the administrator may set restrictions based on the achievement of specific performance goals or continued service to the Company); provided, however, that the administrator, in its sole discretion, may accelerate the time at which any restrictions will lapse or be removed. ~~Recipients~~ Recipients of restricted stock awards generally will have voting and dividend rights with respect to such shares upon grant without regard to vesting, unless the administrator provides otherwise. Shares of restricted stock that do not vest are subject to the Company’s right of repurchase or forfeiture.

Restricted Stock Units

RSUs may be granted under the 2023 Plan. RSUs are bookkeeping entries representing an amount equal to the fair market value of one share of the Company’s common stock. Subject to the provisions of the 2023 Plan, the administrator determines the terms and conditions of RSUs, including the vesting criteria and the form and timing of payment. The administrator may set vesting criteria based upon the achievement of Company-wide, divisional, business unit or individual goals (including continued employment or service), applicable federal or state securities laws or any other basis determined by the administrator in its discretion. The administrator, in its sole discretion, may pay earned RSUs in the form of cash, in shares of the Company’s common stock or in some combination thereof. Notwithstanding the foregoing, the administrator, in its sole discretion, may accelerate the time at which any vesting requirements will be deemed satisfied.

Performance Units and Performance Shares

Performance units and performance shares may be granted under the 2023 Plan. Performance units and performance shares are awards that will result in a payment to a participant only if performance goals established by the administrator are achieved or the awards otherwise vest. The administrator will establish performance objectives or other vesting criteria in its discretion, which, depending on the extent to which they are met, will determine the number or the value of performance units and performance shares to be paid out to participants. The administrator may set performance objectives based on the achievement of Company-wide, divisional, business unit or individual goals (including continued employment or service), applicable federal or state securities laws or any other basis determined by the administrator in its discretion. After the grant of a performance unit or performance share, the administrator, in its sole discretion, may reduce or waive any performance criteria or other vesting provisions for such performance units or performance shares. Performance units shall have an initial dollar value established by the administrator on or prior to the grant date. Performance shares shall have an initial value equal to the fair market value of the Company’s common stock on the grant date. The administrator, in its sole discretion, may pay earned performance units or performance shares in the form of cash, in shares or in some combination thereof.

Non-Employee Directors

The 2023 Plan provides that all non-employee directors will be eligible to receive all types of awards (except for incentive stock options) under the 2023 Plan. The 2023 Plan includes a maximum limit of $300,000 of equity awards that may be granted to a non-employee director in any fiscal year. Any equity awards granted to a person for their services as an employee, or for their services as a consultant (other than as a non-employee director), will not count for purposes of the limitation. The maximum limit does not reflect the intended size of any potential compensation or equity awards to the Company’s non-employee directors.

NOTE 13 – COMMITMENTS AND CONTINGENCIES

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”), and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The Company’s suppliers may decrease production levels based on factory closures and reduced operating hours in those facilities. Likewise, the Company is dependent on its workforce to deliver its products. Developments such as social distancing and shelter-in-place directives may impact the Company’s ability to deploy its workforce effectively. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report.

Management is actively monitoring the impact of the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. The Company cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time. If the pandemic continues, it may have a material effect on the Company’s results of future operations, financial position, and liquidity in the next 12 months.

NOTE 14 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through ~~May~~August __10, 2024, the date these financial statements were available to be issued and noted no material subsequent events for disclosure.

3637

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Special Note Regarding Forward-Looking Statements

All statements other than statements of historical fact included in this quarterly report, including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this annual report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes thereto contained elsewhere in this quarterly report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Overview

We are a social media firm. Our Company has recently ceased its operations in the agency and brand deal business to instead focus our efforts and resources on growing our wholly owned, creator monetization platform, HoneyDrip.com.

Through our subsidiary, West of Hudson Group, Inc. (“WOHG”), we currently generate revenues primarily through WOH Brands, LLC (“WOH Brands”), a 100% wholly owned subsidiary of WOHG, which operates Honeydrip.com, a new digital platform with a focus on the empowerment of creators. The site allows creators to connect with fans and sell exclusive photo and video content. The company previously generated revenue through The Reiman Agency, a 51% majority held joint venture which brokered brand promotional deals between brands and talent, but has since discontinued these operations.

Recent Developments

None.

Results of Operations

For the Three and Six Months Ended ~~March~~June 3130, 2024 Compared to the Three and Six Months Ended ~~March~~June 3130, 2023

Net Revenue

Net revenue was $~~401~~417,~~546~~403 for the three months ended ~~March~~June 3130, 2024, compared to net revenue of $~~351~~347,~~777~~474 for the three months ended ~~March 31,~~June 30, 2023. The increase of $4969,~~769~~929 was the result of increase in brand promotional business platform Honeydrip.com.

Net revenue was $818,949 for the six months ended June 30, 2024, compared to net revenue of $699,251 for the six months ended June 30, 2023. The increase of $119,698 was the result of increase in brand promotional business platform Honeydrip.com.

Cost of Goods Sold

Cost of goods sold was $~~273~~315,~~246~~079 for three months ended ~~March~~June 3130, 2024, compared to cost of goods sold of $218,~~888~~004 for the three months ended ~~March~~June 3130, 2023. The increase of $5497,~~358~~075 was due to higher sales volume from platform Honeydrip.com which in turn resulted in more commission due to content creators.

Cost of goods sold was $588,325 for six months ended June 30, 2024, compared to cost of goods sold of $436,892 for the six months ended June 30, 2023. The increase of $151,433 was due to higher sales volume from platform Honeydrip.com which in turn resulted in more commission due to content creators.

Gross Profit

Gross profit was $~~128~~102,~~300~~324 for the three months ended ~~March~~June 3130, 2024, compared to gross profit of $~~132~~129,~~889~~470 for the three months ended ~~March 31,~~June 30, 2023. The gross profit percentage was 2425% for the three months ended ~~March~~June 3130, 2024, compared to 3837% for the three months ended ~~March 31,~~June 30, 2023. The decrease is because the Company has higher commission due to content creators from platform Honeydrip.com.

Gross profit was $230,624 for the six months ended June 30, 2024, compared to gross profit of $262,359 for the six months ended June 30, 2023. The gross profit percentage was 28% for the six months ended June 30, 2024, compared to 38% for the six months ended June 30, 2023. The decrease is because the Company has higher commission due to content creators from platform Honeydrip.com.

Operating Expenses

Operating expenses for the three months ended ~~March~~June 3130, 2024, were $~~405~~352,~~103~~204, compared to $~~323~~509,~~614~~418 for the three months ended ~~March~~June 3130, 2023. The variances were as follows: (i) ~~increase~~decrease in professional and consultant fees of $5233,~~816~~910; (ii) a decrease in ~~sales~~advertising ~~and marketing~~ expenses of $687,~~711~~935; (iii) adecrease ~~increase~~ of payroll of $~~109~~108,~~736~~521; (iv) a decrease in other selling, general, and administrative expense of $126,~~352~~850. ~~The~~ The overall ~~increase~~decrease in total operating expenses resulted from adecrease ~~increase~~ in the salaries and wages and ~~increase~~decrease in professional and consulting expenses to the Company.

37Operating expenses for the six months ended June 30, 2024, were $757,307, compared to $833,034 for the six months ended June 30, 2023. The variances were as follows: (i) increase in professional and consultant fees of $18,906; (ii) a decrease in advertising expenses of $20,287; (iii) a increase of payroll of $1,215; (iv) a decrease in other selling, general, and administrative expense of $75,561. The overall decrease in total operating expenses resulted from decrease in the selling, general, and administrative and decrease in advertising expenses to the Company.

Other (Income) Expenses

Other (income) expenses for the three months ended ~~March~~June 3130, 2024, were $1130,~~472~~413,~~347,~~ as compared to $1(33,~~668,012~~895) for the three months ended ~~March 31,~~June 30, 2023. Other (income) expenses for the three months ended ~~March~~June 3130, 2024, included (i) change in fair value derivative liability of $1(56,~~357,384~~279); (ii) interest expense of $~~186~~114,~~812~~920; and (iii) gain related to debt of $71,~~849~~772. Other expenses for the three months ended ~~March 31~~June 30, 2023 included (i) change in fair value derivative liability of $1(245,~~382,822~~343)); (ii) interest expense of $~~171~~200,~~736~~026; (iii) noncash amortization of debt discounts of $~~126~~13,~~991~~153; and (iv) other income of $131,~~537~~731.

Other (income) expenses for the six months ended June 30, 2024, were $1,602760, as compared to $1,634,117 for the six months ended June 30, 2023. Other (income) expenses for the six months ended June 30, 2024, included (i) change in fair value derivative liability of $1,301,105; (ii) interest expense of $301,732; and (iii)loss related to debt of $77. Other expenses for the six months ended June 30, 2023 included (i) change in fair value derivative liability of $1,137,479; (ii) interest expense of $371,762; (iii) noncash amortization of debt discounts of $140,144; and (iv) other income of $15,268.

Net Loss from Continuing Operations

Net loss for the three months ended ~~March~~June 3130, 2024 was $1380,~~749~~293,~~150,~~ compared to $1346,~~858~~053,~~737,~~ for the three ended ~~March~~June 3130, 2023.

Net loss for the six months ended June 30, 2024 was $2,129,443 compared to $2,204,792, for the six ended June 30, 2023.

Net Loss from Discontinued Operations

Net loss for the three months ended ~~March~~June 3130, 2024 was $886,~~960~~314, compared to $~~363~~13,~~582~~711, for the three months ended ~~March~~June 3130, 2023.

Net loss for the six months ended June 30, 2024 was $10,193, compared to $219,463, for the six months ended June 30, 2023.

Liquidity and Capital Resources

Operating Activities

Net cash used in operating activities for the ~~three~~six months ended ~~March~~June 3130, 2024, was $~~119~~129,~~042~~630. This amount was primarily related to a net ~~loss~~ loss from operations of $(12,~~749~~129,~~150~~443), offset by (i) a net working capital increase of $231,482; (ii) non-cash expenses of $1,~~393~~517,~~125 including~~009 including (a) amortization of $3265,~~590~~9810; (b) stock-based compensation of $75150,000; (c) change in fair value of derivative liability of $1,~~357~~301,~~384~~105; (d) discontinued operations of $5(26,~~501~~011), and offset by gain in debt settlement of $~~71,849~~77.

Net cash used in operating activities for the ~~three~~six months ended ~~March~~June 3130, 2023, was $~~221~~256,~~796~~865. This amount was primarily related to a net ~~loss~~ loss from operations of $(12,~~858~~594,~~737~~241), offset by (i) a net working capital increase of $~~813~~732,~~582~~032; (ii) non-cash expenses of $1,~~564~~475,~~151 including~~969 including (a) amortization of $2961,~~336~~644; (b) stock-based compensation of $25150,000; (c) change in fair value of derivative liability of $1,~~382~~137,~~822~~479; (d) interest expense – amortization of debt discount of $~~126~~142,~~993~~114; (e) discontinued operations of $~~(740~~129,~~792~~375), and offset by gain in debt settlement of $7115,~~849~~268.

Investment Activities

Net cash used in investing activities for the ~~three~~six months ended ~~March~~June 30, 2024, was $325,~~825~~160 compared to $1962,~~730~~825 for the ~~three~~six months ended ~~March~~June 3130, 2023.

Financing Activities

Net cash provided by financing activities for the ~~three~~six months ended ~~March~~June 3130, 2024, was $12119,~~500~~000. The amount was related to borrowing from related party of $12119,~~500~~000. Net cash provided by financing activities for the ~~three~~six months ended ~~March~~June 3130, 2022 was $~~228~~396,~~774~~395.

Impact of COVID-19 on the Company

Due to the digital/remote nature of the Company’s business, COVID-19 has had, and is expected to have, only a limited effect on the Company’s operations.

Going Concern

The Company adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standard Codification (“ASC”) Topic 205-40, Presentation of Financial Statements – Going Concern, which requires that management evaluate whether there are relevant conditions and events that, in the aggregate, raise substantial doubt about the entity’s ability to continue as a going concern and to meet its obligations as they become due within one year after the date that the financial statements are issued.

The accompanying unaudited consolidated financial statements have been prepared assuming that we will continue as a going concern. While the Company is attempting to generate additional revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues. The Company will require additional cash funding to fund operations. Therefore, the Company concluded there was substantial doubt about the Company’s ability to continue as a going concern.

To fund further operations, the Company will need to raise additional capital. The Company may obtain additional financing in the future through the issuance of its common stock, or through other equity or debt financing. The Company’s ability to continue as a going concern or meet the minimum liquidity requirements in the future is dependent on its ability to raise significant additional capital, of which there can be no assurance. If the necessary financing is not obtained or achieved, the Company will likely be required to reduce its planned expenditures, which could have an adverse impact on the results of operations, financial condition and the Company’s ability to achieve its strategic objective. There can be no assurance that financing will be available on acceptable terms, or at all. The financial statements contain no adjustments for the outcome of these uncertainties. These factors raise substantial doubt about the Company’s ability to continue as a going concern and have a material adverse effect on the Company’s future financial results, financial position and cash flows.

Equity Purchase Agreement and Registration Rights Agreement

On November 2, 2021, the Company entered into an Equity Purchase Agreement and Registration Rights Agreement (the “Registration Rights Agreement”) with Peak One Opportunity Fund, L.P. (“Peak One”), dated as of October 29, 2021, pursuant to which the Company has the right, but not the obligation, to direct Peak One to purchase up to $15,000,000 (the “Maximum Commitment Amount”) in shares of the Company’s common stock in multiple tranches (the “Put Shares”). Further, under the Equity Purchase Agreement and subject to the Maximum Commitment Amount, the Company has the right, but not the obligation, to submit a Put Notice (as defined in the Equity Purchase Agreement) from time to time to Peak One (i) in a minimum amount not less than $20,000 and (ii) in a maximum amount up to the lesser of (a) $400,000 or (b) 250% of the Average Daily Trading Value (as defined in the Equity Purchase Agreement).

In exchange for Peak One entering into the Equity Purchase Agreement, the Company agreed, among other things, to (A) issue Peak One and Peak One Investments, LLC, an aggregate of 70,000 shares of common stock (the “Commitment Shares”), and (B) file a registration statement registering the common stock issued as Commitment Shares and issuable to Peak One under the Equity Purchase Agreement for resale (the “Registration Statement”) with the SEC within 60 calendar days of the Equity Purchase Agreement, as more specifically set forth in the Registration Rights Agreement.

The obligation of Peak One to purchase the Company’s common stock begins on the date of the Equity Purchase Agreement, and ends on the earlier of (i) the date on which Peak One has purchased common stock pursuant to the Equity Purchase Agreement equal to the Maximum Commitment Amount, (ii) 24 months after the date of the Equity Purchase Agreement, (iii) written notice of termination by the Company to Peak One (which shall not occur during any Valuation Period or at any time that Peak One holds any of the Put Shares), (iv) the Registration Statement is no longer effective after the initial effective date of the Registration Statement, or (v) the date that the Company commences a voluntary case or any person commences a proceeding against the Company, a custodian is appointed for the Company or for all or substantially all of its property or the Company makes a general assignment for the benefit of its creditors (the “Commitment Period”).

During the Commitment Period, the purchase price to be paid by Peak One for the common stock under the Equity Purchase Agreement shall be 95% of the Market Price, which is defined as the lesser of the (i) closing bid price of the common stock on the trading day immediately preceding the respective Put Date (as defined in the Equity Purchase Agreement), or (ii) lowest closing bid price of the common stock during the Valuation Period (as defined in the Equity Purchase Agreement), in each case as reported by Bloomberg Finance L.P or other reputable source designated by Peak One.

The number of Put Shares to be purchased by Peak One shall not exceed the number of such shares that, when aggregated with all other shares of common stock then owned by Peak One beneficially or deemed beneficially owned by Peak One, would result in Peak One owning more than 4.99% of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable pursuant to a Put Notice.

In accordance with that certain Registration Rights Agreement, the Selling Securityholders are entitled to certain rights with respect to the registration of the Put Shares and Commitment Shares issued in connection with the Equity Purchase Agreement (the “Registrable Securities”). Pursuant to the Registration Rights Agreement, the Company must (i) file the Registration Statement within 60 calendar days from the date of the Registration Rights Agreement, (ii) use reasonable efforts to cause the Registration Statement to be declared effective under the Securities Act of 1933, as amended (the “Securities Act”), as promptly as possible after the filing thereof, but in any event no later than the 90th calendar day following the date of the Registration Rights Agreement, and (iii) use its reasonable efforts to keep such Registration Statement continuously effective under the Securities Act until all of the Commitment Shares and Purchase Shares have been sold thereunder or pursuant to Rule 144. The Company must also take such action as is necessary to register and/or qualify the Registrable Securities under such other securities or blue sky laws of all applicable jurisdictions in the United States.

Convertible Promissory Notes

The Company did not enter into convertible promissory notes during the period ending ~~March~~June 3130, 2024. All outstanding convertible notes at ~~March~~June 3130, 2024 and December 31, 2023 are discussed at the related footnote, see footnote #7 in the notes to the consolidated financial statements.

SHARES TO BE ISSUED - LIABILITY

As of ~~March~~June 3130, 2024, and 2023, the Company entered into various consulting agreements with consultants, directors, and convertible debt. The Company recorded these consultant and director shares under liability based on the shares will be issued at a fixed monetary amount known at inception under ASC 480.

Off-Balance Sheet Arrangements

As of ~~March~~June 3130, 2024, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated ~~under~~ under the Securities Act reasonably likely to have a material effect on our financial condition.

Critical Accounting Policies and Estimates

Use of Estimates

In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”), management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by management include, but are not limited to, revenue recognition, the allowance for bad debt, useful life of fixed assets, income taxes and unrecognized tax benefits, valuation allowance for deferred tax assets, and assumptions used in assessing impairment of long-lived assets. Actual results could differ from those estimates.

Accounts Receivable

Revenue Recognition

Managed Services Revenue

Based on the Company’s evaluations, revenue from Managed Services is reported on a gross basis because the Company has the primary obligation to fulfill the performance obligations and it creates, reviews, and controls the services. The Company takes on the risk of payment to any third-party creators and it establishes the contract price directly with its customers based on the services requested in the statement of work. The deferred revenue as of ~~March~~June 3130, 2024, and December 31, 2023, was $0 and included with discontinued operations on balance sheets. As of December 31, 2023, the Company has shifted focus from managed services to HoneyDrip.com platform as such managed services is included in discontinued operations on statement of operations.

Subscription-Based Revenue

The Company recognizes subscription-based revenue through Honeydrip.com, its social media website, which allows customers to visit the creator’s personal page over the contract period without taking possession of the products or deliverables. Customers incur costs on either a subscription or consumption basis. Revenue provided on a subscription basis is recognized ratably over the contract period and revenue provided on a consumption basis is recognized when the subscriber paid and received their access to the content. The Company reported the subscription-based revenue at net basis since the Company is acting as an agent solely arranging for the third-party creator or influencer to provide the services directly to the self-service customer through the platform or by posting the requested content. In April 2022, the Company has determined it will be recognized at gross because they have control of the services before it is transferred to the end customer. The Company provided services like online chat and other services directly with the end customers by their internal team. Also, the Company will establish the price on behalf of the content creators as disclosed in the agreement. The Company has sole power to change the price based on the market. These are good indicators that the Company controls the specified goods or services before it is transferred to the customer.

Software Development Costs

We apply ASC 350-40, Intangibles—Goodwill and Other—Internal Use Software, in review of certain system projects. These system projects generally relate to software we do not intend to sell or otherwise market. In addition, we apply this guidance to our review of development projects related to software used exclusively for our SaaS subscription offerings. In these reviews, all costs incurred during the preliminary project stages are expensed as incurred. Once the projects have been committed to and it is probable that the projects will meet functional requirements, costs are capitalized. These capitalized software costs are amortized on a project-by-project basis over the expected economic life of the underlying product on a straight-line basis, which is five years. Amortization commences when the software is available for its intended use. Amounts capitalized related to development of internal use software are included in property and equipment, net, on our Consolidated Balance sheets and related depreciation is recorded as a component of amortization of intangible assets and depreciation in our consolidated statements of operations. For the year ended ~~March~~June 3130, 2024, and 2023, we capitalized $321,~~825~~335 and $1962,~~730~~825, respectively, related to internal use software and recorded $3266,~~590~~247 and $2961,~~336~~644 in related amortization expense, respectively. Unamortized costs of capitalized internal use software totaled $~~416~~404,~~817~~495 and $445,582 as of ~~March~~June 3130, 2024, and December 31, 2023, respectively. As of December 31, 2023, the Company fully impaired developed technology-magiclytics

Impairment of Long-Lived Assets

Income Taxes

Fair Value of Financial Instruments

The carrying value of cash, accounts receivable, other receivable, note receivable, other current assets, accounts payable, and accrued expenses, if applicable, approximate their fair values based on the short-term maturity of these instruments. The carrying amounts of debt were also estimated to approximate fair value.

The Company utilizes the methods of fair value (“FV”) measurement as described in ASC 820 to value its financial assets and liabilities. As defined in ASC 820, FV is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in FV measurements, ASC 820 establishes a FV hierarchy that prioritizes observable and unobservable inputs used to measure FV into three broad levels, which are described below:

	●	Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
	●	Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
	●	Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Convertible notes payable – Convertible promissory notes payable are recorded at amortized cost. The carrying amount approximates their fair value.

43The Company uses Level 3 inputs for its valuation methodology for the derivative liabilities as their fair values were determined by using the binomial option-pricing model based on various assumptions. The fair value of derivative liability as of June 30, 2024 and December 31, 2023 was $2,175,018 and $873,913, respectively.

The Company uses Level 3 inputs for its valuation methodology for the derivative liabilities as their fair values were determined by using the binomial option-pricing model based on various assumptions. The fair value of derivative liability as of March 31, 2024 and December 31, 2023 was $2,231,297 and $873,913, respectively.

Stock based Compensation

Related Parties

The Company follows subtopic 850-10 of the FASB ASC for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 related parties include:

a. affiliates of the Company;

b. entities for which investments in their equity securities would be required, absent the election of the FV option under the FV Option Subsection of Section 825– 10–15, to be accounted for by the equity method by the investing entity;

c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management;

d. principal owners of the Company;

e. management of the Company;

f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and45

g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of financial statements is not required in those statements.

The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

New Accounting Pronouncements

Management does not believe that any recently issued and not adopted and/or effective, accounting pronouncements would have a material effect on the accompanying financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this quarterly report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management, with the participation of our principal executive officer and principal financial officer (our “Certifying Officers”), evaluated the effectiveness of our disclosure controls and procedures as of ~~March~~June 3130, 2024, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of ~~March~~June 3130, 2024, our disclosure controls and procedures were not effective.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we are involved in various claims and legal actions arising in the ordinary course of business. To the knowledge of our management, there are no legal proceedings currently pending against us which we believe would have a material effect on our business, financial position or results of operations and, to the best of our knowledge, there are no such legal proceedings contemplated or threatened.

Item 1A. Risk Factors.

Not applicable.

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

For the ~~three~~six months ended ~~March~~June 3130, 2024, the Company did not have any issuances pursuant to an exemption from registration as set forth in in 506 of Regulation D and Section 4(a)(2) of the Securities Act.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K.

Exhibit No.		Document
10.1		Securities Purchase Agreement, entered into on July 11, 2022 and dated as of July 8, 2022, between the registrant and 1800 Diagonal Lending, LLC (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on July 14, 2022).
10.2		Convertible Promissory Note issued on July 11, 2022 and dated as of July 8, 2022, by the registrant in favor of 1800 Diagonal Lending, LLC (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed with the SEC on July 14, 2022)
10.3		Promissory Note issued on July 12, 2022 by the registrant in favor of Amir Ben-Yohanan (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed with the SEC on July 14, 2022).
10.4†		Clubhouse Media Group, Inc. 2023 Equity Incentive Plan, adopted on July 11, 2022 (incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K filed with the SEC on July 14, 2022).
10.5		Joint Venture Deal Memo, dated July 31, 2022, between the Company and Alden Henri Reiman (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on August 4, 2022).
10.6		Operating Agreement of The Reiman Agency LLC, dated July 31, 2022. (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed with the SEC on August 4, 2022).
10.7		Executive Employment Agreement, dated July 31, 2022, between the Company and Alden Henri Reiman (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed with the SEC on August 4, 2022)
31.1*		Certification of the principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of the principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*		Inline XBRL Taxonomy Extension Schema
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase
104*		Cover Page Interactive Data File—the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

* Filed herewith.

** Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CLUBHOUSE MEDIA GROUP, INC.
Date: May 13, 2024	By:	/s/ Amir Ben-Yohanan
Date: August 13, 2024	By:	/s/ Amir Ben-Yohanan
	Name:	Amir Ben-Yohanan
	Title:	Chief Executive Officer
		(principal executive officer)
Date: May 13, 2024	By:	/s/ Scott Hoey
Date: August 13, 2024	By:	/s/ Scott Hoey
	Name:	Scott Hoey
	Title:	Chief Financial Officer
		(principal financial officer and principal accounting officer)

4749

Filing Compare · Clubhouse Media Group, Inc.