UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE | ||
| SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE | ||
| SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to ____________
Commission
file number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (zip code) |
(Registrant’s telephone number, including area code)
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 all 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.
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).
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 | ☐ |
| ☒ | 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
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.
The number of shares of registrant’s common stock outstanding as of September 18, 2025, was .
TABLE OF CONTENTS
| ITEM 1. | FINANCIAL STATEMENTS |
ONE WORLD PRODUCTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventory | ||||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity (Deficit) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Dividends payable | ||||||||
| Notes payable, related parties, current maturities | ||||||||
| Notes payable, net of $ | ||||||||
| Total current liabilities | ||||||||
| Notes payable, related parties, long-term portion, net of $ | ||||||||
| Total Liabilities | ||||||||
| Series A convertible preferred stock, $ par value, shares authorized; shares issued and outstanding at June 30, 2025 and December 31, 2024 | ||||||||
| Series B convertible preferred stock, $ par value, shares authorized; shares issued and outstanding at June 30, 2025 and December 31, 2024 | ||||||||
| Stockholders’ Equity (Deficit): | ||||||||
| Series C Preferred stock, $ par value, shares authorized; shares preferred stock issued and outstanding at June 30, 2025 and December 31, 2024, respectively | ||||||||
| Common stock, $ par value, shares authorized; and shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated (deficit) | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity (Deficit) | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders’ Equity (Deficit) | $ | $ | ||||||
See accompanying notes to condensed consolidated financial statements.
| 1 |
ONE WORLD PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 and 2024
(UNAUDITED)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30th | June 30th | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of goods sold | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Professional fees | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Loss on early extinguishment of debt | ( | ) | ||||||||||||||
| Loss on deconsolidation of foreign subsidiaries | ( | ) | ( | ) | ||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other comprehensive loss: | ||||||||||||||||
| Loss on foreign currency translation | $ | $ | $ | $ | ( | ) | ||||||||||
| Net other comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Series A convertible preferred stock declared ($ per share) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to common shareholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of common shares outstanding - basic and diluted | ||||||||||||||||
| Net loss per share - basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
See accompanying notes to condensed consolidated financial statements.
| 2 |
ONE WORLD PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
| Accumulated | Total | |||||||||||||||||||||||||||||||||||||||||||
| Series A Convertible | Series B Convertible | Additional | Other | Stockholders’ | ||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Common Stock | Paid-In | Subscriptions | Comprehensive | Accumulated | Equity | |||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Payable | Loss | Deficit | (Deficit) | ||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Common Stock issued for services | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Amortization of common stock options issued for services | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Series A convertible preferred stock dividend declared ($ per share) | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Accumulated | ||||||||||||||||||||||||||||||||||||||||||||
| Series A Convertible | Series B Convertible | Additional | Other | Total | ||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Common Stock | Paid-In | Subscriptions | Comprehensive | Accumulated | Stockholders’ | |||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Payable | Loss | Deficit | Deficit | ||||||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Common Stock issued for services | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Common Stock issued for debt commitment fees | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Relative Fair Value for Warrants issued for Loan Commitment | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Cancellation of Common Stock held by debt holder in Escrow | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Amortization of common stock options issued for services | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Series A convertible preferred stock dividend declared ($ per share) | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
ONE WORLD PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
| Series A Convertible | Series B Convertible | Additional | Accumulated Other | Total Stockholders’ | ||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Common Stock | Paid-In | Subscriptions | Comprehensive | Accumulated | Equity | |||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Payable | Loss | Deficit | (Deficit) | ||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Common Stock issued for services | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Amortization of common stock options issued for services | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Series A convertible preferred stock dividend declared ($ per share) | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Series A Convertible | Series B Convertible | Additional | Accumulated Other | Total | ||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Common Stock | Paid-In | Subscriptions | Comprehensive | Accumulated | Stockholders’ | |||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Payable | Loss | Deficit | Deficit | ||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Common Stock issued for services | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Common Stock issued for debt commitment fees | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Relative Fair Value for Warrants issued for Loan Commitment | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Common stock issued pursuant to debt modifications | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Amortization of common stock options issued for services | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Series A convertible preferred stock dividend declared ($ per share) | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Loss on foreign currency translation | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
| 3 |
ONE WORLD PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Six Months Ended | ||||||||
| June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Loss on early extinguishment of debt | ||||||||
| Amortization of debt discounts | ||||||||
| Common stock issued for services | ||||||||
| Stock options issued for services | ||||||||
| Decrease (increase) in assets: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventory | ( | ) | ||||||
| Other current assets | ( | ) | ||||||
| Increase (decrease) in liabilities: | ||||||||
| Accounts payable | ||||||||
| Accrued expenses | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from Investment activities | ||||||||
| Petulo Pharmaceutical SAS | ( | ) | ||||||
| Net Cash provided by Investment activities | ( | ) | ||||||
| Cash flows from financing activities | ||||||||
| Repayment from Notes Payable, Related Parties | ( | ) | ||||||
| Proceeds from notes payable, related parties | ||||||||
| Proceeds from notes payable | ||||||||
| Repayments of notes payable | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash | ( | ) | ||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash - beginning | ||||||||
| Cash - ending | $ | $ | ||||||
| Supplemental disclosures: | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| Non-cash investing and financing transactions: | ||||||||
| Dividends payable | $ | $ | ||||||
| Value of debt discounts attributable to commitment shares to related parties | $ | |||||||
| Value of debt discounts attributable to commitment shares | $ | |||||||
| Value of debt discounts attributable to Warrants | $ | |||||||
See accompanying notes to condensed consolidated financial statements.
| 4 |
Note 1 – Nature of Business and Significant Accounting Policies
Nature of Business
One World Products, Inc. (the “Company,” “we,” “our” or “us”) was incorporated in Nevada on September 2, 2014. On February 21, 2019, the Company entered into an Agreement and Plan of Merger with OWP Merger Subsidiary, Inc., a wholly owned subsidiary, and OWP Ventures, Inc. (“OWP Ventures January 10, 2019, the Company changed its name from Punto Group, Corp. to One World Pharma, Inc., and on November 23, 2021, the Company changed its name to One World Products, Inc. through the merger of One World Products, Inc., a recently formed Nevada corporation wholly owned by the Company, with and into the Company (the “Name Change Merger”) pursuant to the applicable provisions of the Nevada Revised Statutes (“NRS”). As permitted by the NRS, the articles of merger filed with the Secretary of State of the state of Nevada to affect the Name Change Merger amended Article I of the Company’s Articles of Incorporation to change the Company’s name to “One World Products, Inc.” The Name Change Merger was affected solely to effect the change of the Company’s name, and had no effect on the Company’s officers, directors, operations, assets or liabilities. In July 2025, the Company’s Board of Directors and the Company’s majority shareholder approved a change in the Company’s corporate name to “Isiah Enterprises, Inc.” This change in corporate name will not become effective in the trading markets until such time as FINRA has approved such change.
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and the rules of the Securities and Exchange Commission (SEC). Intercompany accounts and transactions have been eliminated.
The unaudited condensed consolidated financial statements of the Company and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the Condensed Consolidated Financial Statements have been included. Such adjustments are of a normal, recurring nature. The Condensed Consolidated Financial Statements, and the accompanying notes, are prepared in accordance with GAAP and do not contain certain information included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The interim Condensed Consolidated Financial Statements should be read in conjunction with that Annual Report on Form 10-K. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the following entities, all of which were under common control and ownership at June 30, 2025:
| Jurisdiction of | ||||
| Name of Entity | Incorporation | Relationship | ||
| (1) |
| (2) |
The consolidated financial statements herein contain the operations of the wholly owned subsidiaries listed above. The Company’s headquarters are located in Las Vegas, Nevada.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
| 5 |
Fair Value of Financial Instruments
The Company discloses the fair value of certain assets and liabilities in accordance with ASC 820 – Fair Value Measurement and Disclosures (ASC 820). Under ASC 820-10-05, the FASB establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses reported on the balance sheets are estimated by management to approximate fair value primarily due to the short-term nature of the instruments.
Cash in Excess of FDIC Insured Limits
The
Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. Accounts are guaranteed by
the Federal Deposit Insurance Corporation (FDIC) up to $
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. The Company’s revenues in the current period consisted of the sale of our CBD rub, and in the prior period revenues consisted entirely of the sale of seeds.
Inventory
Inventories are stated at the lower of cost or net realizable value. Cost is determined on a standard cost basis that approximates the first-in, first-out (FIFO) method. Appropriate consideration is given to obsolescence, excessive levels, deterioration, and other factors in evaluating net realizable value. Our CBD products consisted of finished goods, along with packaging.
The Company accounts for equity instruments issued to employees and non-employees in accordance with the provisions of ASC 718 Stock Compensation (ASC 718). All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier of the date on which the counterparty’s performance is complete or the date at which a commitment for performance by the counterparty to earn the equity instruments is reached because of sufficiently large disincentives for nonperformance.
The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.
| 6 |
In November 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure.” The ASU updated reportable segment disclosure requirements, primarily through requiring enhanced disclosures about significant segment expenses and information used to assess segment performance. The Company adopted ASU No. 2023-07 during the year ended December 31, 2024. See Note 20 “Segment Reporting” in the accompanying Notes to the Consolidated Financial Statements for additional information.
In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity; Own Equity (“ASU 2020-06”), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. The Company adopted ASU No. 2020-06 during the year ended December 31, 2024.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The amendments in this ASU add specific requirements for income tax disclosures to improve transparency and decision usefulness. The guidance in ASU 2023-09 requires that public business entities disclose specific categories in the income tax rate reconciliation and provide additional qualitative information for reconciling items that meet a quantitative threshold. In addition, the amendments in ASU 2023-09 require that all entities disclose the amount of income taxes paid disaggregated by federal, state, and foreign taxes and disaggregated by individual jurisdictions. The ASU also includes other disclosure amendments related to the disaggregation of income tax expense between federal, state and foreign taxes. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this update should be applied on a prospective basis and retrospective application is permitted. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures.
In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03 and in January 2025, the FASB issued ASU 2025-01, “Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The guidance requires disclosures about specific expense categories, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization and selling expenses. The ASU is effective in the first annual reporting period beginning after December 15, 2026, and for interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently assessing the effect that adoption of this guidance will have on its Consolidated Financial Statements.
There are no other recently issued accounting pronouncements that the Company has yet to adopt that are expected to have a material effect on its financial position, results of operations, or cash flows.
Note 2 –Going Concern
As
shown in the accompanying condensed consolidated financial statements as of June 30, 2025, our balance of cash on hand was $
In the event sales do not materialize at the expected rates, management will seek additional financing and would attempt to conserve cash by further reducing expenses. There can be no assurance that we will be successful in achieving these objectives; therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern.
The condensed consolidated financial statements do not include any adjustments that might result from the outcome of any uncertainty regarding the Company’s ability to continue as a going concern. The condensed consolidated financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. Our ability to scale production and distribution capabilities and further increase the value of our brands is largely dependent on our success in raising additional capital.
| 7 |
Note 3 – Related Party Transactions
Debt Financing
During
April 2025, the Company, through its wholly owned subsidiary, OWP Ventures, Inc., received proceeds totaling $
During
April and March 2025, the Company, through its wholly owned subsidiary, OWP Ventures, Inc., received an advance of $
Common Stock Issued for Services
On
June 25, 2025, the Company issued shares of common stock to the Company’s Chief Financial Officer. The
fair value of the shares was $
On
March 25, 2025, the Company issued shares of common stock to the Company’s Chief Financial Officer. The
fair value of the shares was $
Accounts Payable, Related Parties
The total amount due to one of the Company’s directors was $
Note 4 – Fair Value of Financial Instruments
Under FASB ASC 820-10-5, fair value is defined as 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 (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.
The Company has certain financial instruments that must be measured under the new fair value standard. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:
Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.
The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheet as of June 30, 2025, and December 31, 2024, respectively:
| Fair Value Measurements at June 30, 2025 | ||||||||||||
| Level 1 | Level 2 | Level 3 | ||||||||||
| Assets | ||||||||||||
| Cash | $ | $ | $ | |||||||||
| Total assets | ||||||||||||
| Liabilities | ||||||||||||
| Notes payable, related parties, net of $ | ||||||||||||
| Notes payable | ||||||||||||
| Total liabilities | ( | ) | ||||||||||
| $ | $ | ( | ) | $ | ||||||||
| 8 |
| Fair Value Measurements at December 31, 2024 | ||||||||||||
| Level 1 | Level 2 | Level 3 | ||||||||||
| Assets | ||||||||||||
| Cash | $ | $ | $ | |||||||||
| Total assets | ||||||||||||
| Liabilities | ||||||||||||
| Notes payable, related parties, net of $ | ||||||||||||
| Notes payable, net of $ | ||||||||||||
| Total liabilities | ( | ) | ||||||||||
| $ | $ | ( | ) | $ | ||||||||
There were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the three months ending June 30, 2025.
Note 5 – Inventory
Inventories
are stated at the lower of cost or net realizable value. Cost is determined on a standard cost basis that approximates the first-in,
first-out (FIFO) method. Appropriate consideration is given to obsolescence, excessive levels, deterioration, and other factors in evaluating
net realizable value. Our CBD products consist entirely of finished goods. Inventory was $
Note 6 – Prepaid Expenses
Prepaid expenses at June 30, 2025 and December 31, 2024 , consisted of the following:
| June 30, | December 31 | |||||||
| 2025 | 2024 | |||||||
| Prepaid virtual office rent | $ | $ | ||||||
| Prepaid license fees | ||||||||
| Prepaid OTC markets listing fees | ||||||||
| Prepaid professional fees | ||||||||
| Security Deposit on Eco Bio Plastics Michigan Purchase LOI | ||||||||
| Prepaid Acquisition Cost deposit account | ||||||||
| Total Period Expenses | ||||||||
Note 7 – Accrued Expenses
Accrued expenses consisted of the following on June 30, 2025, and December 31, 2024, respectively:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Accrued compensation | $ | $ | ||||||
| Accrued Other Expenses | ||||||||
| Accrued Interest | ||||||||
| $ | $ | |||||||
| 9 |
Note 8 – Notes Payable, Related Parties
Notes payable, related parties, consists of the following at June 30, 2025 and December 31, 2024, respectively:
| | June 30, | December 31, | ||||||
| 2025 | 2024 | |||||||
| On March 24, 2025, the Company, through its wholly owned subsidiary, OWP Ventures, Inc.,
issued an unsecured promissory note in the amount of $ | $ | $ | ||||||
| On December 26, 2024, the Company, through its wholly owned subsidiary, OWP Ventures, Inc., issued
an unsecured promissory note in the amount of $ | ||||||||
| On December 16, 2024, the Company, through its wholly owned subsidiary, OWP Ventures, Inc., issued
an unsecured promissory note in the amount of $ | ||||||||
| On December 16, 2024, the Company, through its wholly owned subsidiary, OWP Ventures, Inc., received
an advance of $ | ||||||||
| On November 29, 2024, the Company, through its wholly owned subsidiary, OWP Ventures, Inc., received
an advance of $ | ||||||||
| On March 19, 2024, the Company, through its wholly owned subsidiary, OWP
Ventures, Inc., received an advance of $ | ||||||||
| On March 15, 2024, the Company, through its wholly owned subsidiary, OWP
Ventures, Inc., issued an unsecured promissory note in the amount of $ | ||||||||
| On March 15, 2024, the Company, through its wholly owned subsidiary, OWP Ventures, Inc., issued an
unsecured promissory note in the amount of $ | ||||||||
| On March 15, 2024, the Company, through its wholly owned subsidiary, OWP Ventures, Inc., issued an
unsecured promissory note in the amount of $ | ||||||||
| On March 15, 2024, the Company, through its wholly owned subsidiary, OWP Ventures, Inc., issued an
unsecured promissory note in the amount of $ | ||||||||
| On April 2, 2025, the Company, through its wholly owned subsidiary, OWP Ventures, Inc., issued an
unsecured promissory note in the amount of $ | ||||||||
| On April 7, 2025, the Company, through its wholly owned subsidiary, OWP Ventures,
Inc., issued an unsecured promissory note in the amount of $ |
| |||||||
| On April 21, 2025, the Company, through its wholly owned subsidiary, OWP
Ventures, Inc., issued an unsecured promissory note in the amount of $ | ||||||||
| On June 30, 2025, the Company, through its wholly owned subsidiary, OWP
Ventures, Inc., issued an unsecured promissory note in the amount of $ | ||||||||
| Total notes payable, related parties | ||||||||
| Less: unamortized debt discounts | ( | ) | ( | ) | ||||
| Notes payable, related parties, net of discounts | ||||||||
| Less: current maturities | ( | ) | ( | ) | ||||
| Notes payable, related parties, long-term portion | $ | $ | ||||||
| 10 |
The
Company recorded interest expense pursuant to the stated interest rates on the notes payable, related parties, in the amount of
$
Note 9 – Notes Payable
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| On April 19, 2024, the “Company completed the sale of a The Note matured on Pursuant to the Purchase Agreement with SDT, SDT received a pre-funded warrant to purchase shares of the Company’s common stock (the “Warrant”). The Warrant includes a make-whole provision, whereby, if SDT is unable to sell the Warrant Shares (as defined in the Warrant) for net proceeds equal to at least $ A portion of the proceeds were used to repay the $ | $ | $ | ||||||
| On April 19, 2024, the “Company completed the sale of a The Fourth AJB Note matures on Pursuant to the Purchase Agreement with AJB, the Company paid a $ | ||||||||
| On August 18, 2023, the Company issued an unsecured promissory note of $ | ||||||||
| Total notes payable | ||||||||
| Less: unamortized debt discounts | ( | ) | ||||||
| Notes payable, net of discounts | ||||||||
| Less: current maturities | ( | ) | ( | ) | ||||
| Notes payable, long-term portion | $ | $ | ||||||
| 11 |
The Company recognized aggregate debt discounts on the notes payable to for the six months ended June 30, 2025, and December 31, 2024 as follows:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Fair value of commitment shares of common stock | $ | $ | ||||||
| Fair value of pre-funded warrants | ||||||||
| Original issue discounts | ||||||||
| Legal and brokerage fees | ||||||||
| Total debt discounts | ||||||||
| Amortization of debt discounts | ( | ) | ( | ) | ||||
| Unamortized debt discounts | $ | $ | ||||||
The
Company recorded interest expense pursuant to the stated interest rates on the notes payable in the amount of $
The Company recognized interest expense for the six months ending June 30, 2025 and June 30, 2024, as follows:
| June 30, | June 30, | |||||||
| 2025 | 2024 | |||||||
| Interest on convertible notes, related party | $ | $ | ||||||
| Interest on notes payable, related parties | ||||||||
| Interest on notes payable | ||||||||
| Amended warrants | ||||||||
| Amortization of Debt Discount related parties | ||||||||
| Amortization of debt discounts, common stock | ||||||||
| Amortization of debt discounts, warrants | ||||||||
| Amortization of debt discounts | ||||||||
| Total interest expense | $ | $ | ||||||
Note 10 – Convertible Preferred Stock
Preferred Stock
The
Company has authorized shares of $ par value “blank check” preferred stock, of which shares have
been designated Series A Preferred Stock and shares have been designated Series B Preferred Stock, as amended on August 2, 2022.
| 12 |
The Series A and B Preferred Stock have been classified outside of permanent equity and liabilities. The Series A Preferred Stock embodies conditional obligations that the Company may settle by issuing a variable number of equity shares, and in both the Series A and B Preferred Stock, monetary value of the obligation is based on a fixed monetary amount known at inception.
Preferred Stock Dividends
The
Series A Preferred Stock accrues dividends at the rate of
Note 11 – Commitments and Contingencies
Legal Matters
From time to time, the Company may be a party to various legal matters, threatened claims, or proceedings in the normal course of business. Legal fees and other costs associated with such actions are expensed as incurred. The Company assesses, in conjunction with its legal counsel, the need to record a liability for litigation and contingencies.
Legal accruals are recorded when and if it is determined that a loss related to a certain matter is both probable and reasonably estimable. There are currently no pending legal matters outside of the bankruptcy matters in Colombia, noted below.
Due
to challenging economic conditions, OWP SAS filed for protection under Colombian Law 1116 of 2006,
which is the primary legislation governing business insolvency proceedings (restructuring and liquidation) (“Reorganization Proceedings”)
in Colombia on December 22, 2023. As of June 30, 2025, OWP SAS was involved in a total of 23 separate lawsuits for various civil
and labor disputes in the municipal civil courts in Colombia, in the Cities of Bogota, Cali. Funza and Popayán. If the civil courts
rule against OWP SAS, we estimate the potential liability from these claims is approximately $
Debt Commitment Obligations
The Company has entered into various forms of debt financing that require the Company to issue shares of common stock or pre-funded warrants that carry certain make-whole provisions whereby, if the debt holder is unable to sell the commitment fee shares for net proceeds equal to at least the commitment fee, the Company shall pay the shortfall in cash, or cause the issuance of additional shares of common stock, to the debt holder until the sale of which would ultimately generate total net funds equal to the commitment fee, as follows:
| Debt Holder | Commitment Shares or Warrants | Commitment Amounts | ||||
| SDT Equities Note | warrants to purchase shares of the Company’s common stock * | $ | ||||
| Fourth AJB Note | shares of the Company’s common stock | $ | ||||
| Third AJB Note | shares of the Company’s common stock | $ | ||||
| * |
Equity Line of Credit
On
September 1, 2022, the Company entered into a Purchase Agreement (the “ELOC Purchase Agreement”) with Tysadco Partners, LLC
(“Tysadco”). Pursuant to the ELOC Purchase Agreement, Tysadco has agreed to purchase from the Company, from time to time
upon delivery by the Company to Tysadco of “Request Notices,” and subject to the other terms and conditions set forth in
the ELOC Purchase Agreement, up to an aggregate of $
| 13 |
In connection with the ELOC Purchase Agreement, the Company entered into a Registration Rights Agreement with Tysadco under which the Company agreed to file a registration statement with the Securities and Exchange Commission covering the shares of common stock issuable under the ELOC Purchase Agreement and conversion of the Commitment Fee Shares (the “Registration Rights Agreement”). There have not been any advances on this arrangement to date.
Contingent Compensation
On
August 22, 2023, the Company entered into an advisor agreement with an individual to provide consulting and business advisory services
to the Company. Pursuant to the agreement, the Company has agreed to compensate the consultant a fee of $
On
May 23, 2023, the Company appointed Joerg Sommer to be the Company’s President. In
connection with his appointment, the Company entered into an offer letter with Mr. Sommer (the “Offer Letter”) under
which he was initially paid an annual base salary of $
$
$
$
$
To date, the Company has not received gross proceeds pursuant to the Qualified Offering terms, and Mr. Sommer resigned on July 2, 2024.
Note 12 – Changes in Stockholders’ Equity
Preferred Stock
The Company has authorized shares of $ par value “blank check” preferred stock, of which shares have been designated Series A Preferred Stock and shares have been designated Series B Preferred Stock, See Note 10, above, for a description of the features and issuances of the Series A Preferred Stock and Series B Preferred Stock.
On October 10, 2024, the Company filed with the State of Nevada a Certificate of Designation (the “Certificate of Designation”), which established a Series C Special Preferred Stock. There follows a summary of the rights, preferences, powers, restrictions and limitations of the Series C Special Preferred Stock:
Section 1. Designation, Amount and Par Value. The series of Preferred Stock shall be designated as Series C Special Preferred Stock (the “Series C Special Preferred Stock”) and the number of shares so designated shall be One Hundred (100). Each share of the Series C Special Preferred Stock shall have a par value of $.
Section 2. Fractional Shares. The Series C Special Preferred Stock may not be issued in fractional shares.
Section 3. Voting Rights. The holders of the Series C Special Preferred Stock shall, as a class, have rights in all matters requiring shareholder approval to a number of votes equal to two (2) times the sum of:
(a) The total number of shares of common stock which are issued and outstanding at the time of any election or vote by the shareholders; plus
(b) The number of votes allocated to shares of Preferred Stock issued and outstanding of any other class that shall have voting rights.
Section 4. Dividends. The Series C Special Preferred Stock shall not be entitled to any dividends.
| 14 |
Section 5. Liquidation. Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the holders of Series C Special Preferred Stock shall not be entitled to any payment.
Section 6. Conversion. The Series C Special Preferred Stock shall have no rights of conversion.
Section 7. Protection Provisions. So long as any shares of Series C Special Preferred Stock are outstanding, the Company shall not, without first obtaining the unanimous written consent of the holders of Series C Special Preferred Stock, alter or change the rights, preferences or privileges of the Series C Special Preferred Stock so as to affect adversely the holders of Series C Special Preferred Stock.
Section 8. Waiver. Any of the rights, powers or preferences of the holders of the Series C Special Preferred Stock may be waived by the affirmative consent or vote of the holders of at least a majority of the shares of Series C Special Preferred Stock then outstanding.
Section 9. No Other Rights or Privileges. Except as specifically set forth herein, the holder(s) of the shares of Series C Special Preferred Stock shall have no other rights, privileges or preferences with respect to the Series C Special Preferred Stock.
Common Stock
The Company is authorized to issue an aggregate of billion shares of common stock with a par value of $, as amended on October 15, 2024. As of June 30, 2025, there were shares of common stock issued and outstanding.
Common Stock Issued for Services, Related Parties
On
March 25, 2025 and June 25, 2025, the Company issued a total of
shares of common stock to the Company’s then Chief Financial Officer. The fair value of
the shares was $
Amortization of Stock-Based Compensation
A
total of $
Stock Incentive Plan
On February 12, 2020, the Company’s stockholders approved our 2019 Stock Incentive Plan (the “2019 Plan”), which had been adopted by the Company’s Board of Directors (the “Board”) as of December 10, 2019. The 2019 Plan provides for the issuance of up to shares of common stock to the Company and its subsidiaries’ employees, officers, directors, consultants and advisors, stock options (non-statutory and incentive), restricted stock awards, stock appreciation rights (“SARs”), restricted stock units (“RSUs”) and other performance stock awards. Options granted under the 2019 Plan may either be intended to qualify as incentive stock options under the Internal Revenue Code of 1986, or may be non-qualified options, and are exercisable over periods not exceeding ten years from date of grant. Unless sooner terminated in accordance with its terms, the Stock Plan will terminate on December 10, 2029.
Outstanding Options
Options to purchase an aggregate total of shares of common stock at a weighted average strike price of $, exercisable over a weighted average life of years were outstanding as of June 30, 2025.
The
Company recognized a total of $ and $ of compensation expense during the six months ended June 30, 2025 and 2024, respectively, related to common stock options issued in the prior year to officers, directors, and employees that are being amortized
over the implied service term, or vesting period, of the options. The remaining unamortized balance of these options is $
Note 14 – Warrants
Outstanding Warrants
Warrants
to purchase an aggregate total of
| 15 |
Note 15 – Segment Reporting
Operating
segments are defined as components of an enterprise with separate financial information, which are evaluated regularly by the chief operating
decision maker (“CODM”) and are used in resource allocation and performance assessments. The Company’s Chief Executive
Officer is the Company’s CODM. The Company is organized and operates as
The
Company’s CODM reviews financial information and operational forecasts presented on a consolidated basis for the purpose of
making operating decisions and assessing financial performance. The Company’s CODM assesses performance for the
Company’s single reportable segment based on the Company’s net loss as reported on the consolidated statement of
comprehensive income (loss) was $(
Note 16 – Income Taxes
The Company accounts for income taxes under FASB ASC 740-10, which requires use of the liability method. FASB ASC 740-10-25 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.
For
the six months ended June 30 , 2025, and the year ended December 31, 2024, the Company incurred a net operating loss and,
accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the
uncertainty of the realization of any tax assets. As of June 30, 2025 and June 30, 2024, respectively the Company had approximately
$
Based on the available objective evidence, including the Company’s history of its loss, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at June 30, 2025 and December 31, 2024, respectively.
In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions.
Note 17 – Subsequent Events
The Company evaluates events that have occurred after the balance sheet date through the date these financial statements were issued, noting no reportable event, except as follows:
Acquisition of Eco Bio Plastics Midland, Inc.
Asset Purchase Agreement. On June 4, 2025, the Company entered into a Letter of Intent (the “Eco Bio LOI”) with Eco Bio Plastics Midland, Inc. (“Eco Bio”).
Further
to the Eco Bio LOI, on July 11, 2025, the Company, EBPIE, LLC, a Michigan limited liability company wholly owned by the Company (“EBPIE”),
and Eco Bio signed and closed an Asset Purchase Agreement (the “Eco Bio Asset Agreement”), pursuant to which EBPIE
acquired substantially all of the assets of Eco Bio for a total of $
Employment Agreement. On July 11, 2024, EBPIE entered into an Executive Employment Agreement (the “Saotome Agreement”) with Fukuji Saotome, pursuant to which Mr. Saotome will serve as EBPIE’s Chief Operating Officer. The initial term of the Saotome Agreement ends December 31, 2030, and renews automatically for successive 12-month terms, unless cancelled by either EBPIE or Mr. Saotome upon not less than 90-days’ written notice prior to the end of the then-current term. Under the Saotome Agreement, Mr. Saotome is to be compensated, as follows:
| (1) | an
annual salary of $ |
| (2) | in addition to his Base Salary, Mr. Saotome shall be eligible for an annual bonus based on a Budgetary NOI Goal established on or before each January 10th during the Term of the Saotome Agreement is achieved. The Budgetary NOI Goal shall be reduced to a writing signed by EBPIE and Mr. Saotome. |
Stock Option Grant Notice. On July 11, 2024, the Company entered into an Stock Option Grant Notice (the “Saotome Option Grant”) with Fukuji Saotome, pursuant to which the Company, pursuant to its 2019 Stock Incentive Plan, granted Mr. Saotome an option to purchase up to shares (the “Saotome Option”) of the Company’s common stock at a per share exercise price of $, with an expiration date of December 31, 2030. The Saotome Option vests on the following schedule: % on July 11, 2025; % on December 31, 2027; % on December 31, 2028; % on December 31, 2029; and % on December 31, 2030.
Approval of Corporate Actions
Corporate Name Change. In July 2025, the Company’s Board of Directors and the Company’s majority shareholder approved a change in the Company’s corporate name to “Isiah Enterprises, Inc.” This change in corporate name will not become effective in the trading markets until such time as FINRA has approved such change.
Increase in Authorized Capital. In July 2025, the Company’s Board of Directors and the Company’s majority shareholder approved an increase in the number of authorized number of shares of common stock from shares to shares. The Company expects that such increase will occur on or before November 1, 2025.
| 16 |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The information contained in this Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended December 31, 2024, and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.
The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in the Form 10-K in the section entitled “Risk Factors” for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this quarterly report on Form 10-Q. The following should also be read in conjunction with the unaudited Financial Statements and notes thereto that appear elsewhere in this report.
Overview
We are currently focused on research and development activities involving bio-sustainable solutions. These solutions enable automakers to reduce their carbon footprint and support environmental initiatives within the automotive supply chain. In October of 2024, we partnered with other companies in the automotive industry to produce 1,400 reusable hemp-based molded reusable totes, designed to move and protect automotive parts through the supply chain. We are actively seeking to raise capital and further research and development in this area. If successful, we intend to produce these hemp-based materials for a variety of applications, starting with automotive component applications.
We also entered into a strategic partnership with Stephen Marley’s Kx Family Care in 2024 in which we purchased 2,000 units of CBD products, which we white labeled as Pro-11 and began selling online. There can be no assurances that this strategic partnership will generate significant revenues or be profitable for the Company.
Recent Event – Acquisition of Eco Bio Plastics
Asset Purchase Agreement. On June 4, 2025, the Company entered into a Letter of Intent (the “Eco Bio LOI”) with Eco Bio Plastics Midland, Inc. (“Eco Bio”).
Further to the Eco Bio LOI, on July 11, 2025, the Company, EBPIE, LLC, a Michigan limited liability company wholly owned by the Company (“EBPIE”), and Eco Bio signed and closed an Asset Purchase Agreement (the “Eco Bio Asset Agreement”), pursuant to which EBPIE acquired substantially all of the assets of Eco Bio for a total of $515,000 in cash, with $415,000 being paid at the closing and $100,000 having been paid on the execution of the Eco Bio LOI and credited towards the total purchase price.
Employment Agreement. On July 11, 2024, EBPIE entered into an Executive Employment Agreement (the “Saotome Agreement”) with Fukuji Saotome, pursuant to which Mr. Saotome will serve as EBPIE’s Chief Operating Officer. The initial term of the Saotome Agreement ends December 31, 2030, and renews automatically for successive 12-month terms, unless cancelled by either EBPIE or Mr. Saotome upon not less than 90-days’ written notice prior to the end of the then-current term. Under the Saotome Agreement, Mr. Saotome is to be compensated, as follows:
| (1) | an annual salary of $250,000 (the “Base Salary”); and | |
| (2) | in addition to his Base Salary, Mr. Saotome shall be eligible for an annual bonus based on a Budgetary NOI Goal established on or before each January 10th during the Term of the Saotome Agreement is achieved. The Budgetary NOI Goal shall be reduced to a writing signed by EBPIE and Mr. Saotome. |
Stock Option Grant Notice. On July 11, 2024, the Company entered into an Stock Option Grant Notice (the “Saotome Option Grant”) with Fukuji Saotome, pursuant to which the Company, pursuant to its 2019 Stock Incentive Plan, granted Mr. Saotome an option to purchase up to 5,000,000 shares (the “Saotome Option”) of the Company’s common stock at a per share exercise price of $0.13, with an expiration date of December 31, 2030. The Saotome Option vests on the following schedule: 20% on July 11, 2025; 20% on December 31, 2027; 20% on December 31, 2028; 20% on December 31, 2029; and 20% on December 31, 2030.
New Business Focus
With the acquisition of Eco Bio, a Midland, Michigan-based manufacturer of plant-based and biodegradable plastics and its developing industrial solutions business targeting the automotive market, we are now focused on industrial compounding food packaging, automotive, and consumer goods sectors.
Eco Bio Plastics brings proprietary formulations and scalable manufacturing capacity that will support our transition into a vertically integrated sustainable materials company. Eco Bio’s advanced micronization and pelletization process enables the production of ultra-small, application-ready biofibers derived from organic matter, including agricultural byproducts, natural fibers and plant-based residues, that offer automotive, food and industrial clients a cost-effective, ESG-compliant alternative to traditional materials. In-house micronization allows Eco Bio to produce fine powder compounds ideal for coatings, polymer blends and talc-free formulations. Its patent-pending process produces the only pelletized bast fiber on the market, opening the door for additional sustainable fiber plastic compounds.
Further, in collaboration with partners in the automotive industry, we have developed hemp-based molded containers for automotive part packaging applications, including reusable totes designed to move and protect automotive parts through the supply chain.
| 17 |
Results of Operations for the Three Months Ended June 30, 2025 and 2024
The following table summarizes selected items from the statement of operations for the three months ended June 30, 2025 and 2024.
| Three Months Ended June 30, | Increase / | |||||||||||
| 2025 | 2024 | (Decrease) | ||||||||||
| Revenues | $ | 282 | $ | 1,254 | $ | (972 | ) | |||||
| Cost of goods sold | 33 | 229 | (196 | ) | ||||||||
| Gross profit | $ | 249 | $ | 1,025 | $ | (776 | ) | |||||
| Operating expenses: | ||||||||||||
| General and administrative | 86,685 | 150,785 | (64,100 | ) | ||||||||
| Professional fees | 84,633 | 223,667 | (139,034 | ) | ||||||||
| Total operating expenses: | 171,348 | 374,452 | (203,383 | ) | ||||||||
| Operating loss | (171,099 | ) | (373,427 | ) | (202,358 | ) | ||||||
| Other Income (expense) | ||||||||||||
| Loss on deconsolidation of foreign subsidiaries | - | (122,600 | ) | (122,600 | ) | |||||||
| Interest income | - | - | - | |||||||||
| Interest expense | (94,847 | ) | (369,032 | ) | (274,185 | ) | ||||||
| Total Other Income (Expense) | (94,847 | ) | (491,632 | ) | (396,785 | ) | ||||||
| Net loss | $ | (265,946 | ) | $ | (865,059 | ) | $ | (599,143 | ) | |||
Revenues. Revenues during the three months ending June 30, 2025, were $282, compared to $1,254 during the three months ended June 30, 2024, an increase of $972. Revenues were generated by sales of our CBD product, which is a business segment of which we are not currently pursuing. Revenues in future periods will be from the operations of Eco Bio and our industrial hemp business activities.
Cost of Goods Sold. Cost of goods sold for the three months ending June 30, 2025, were $33, compared to $229 for the three months ending June 30, 2024. COGS consists primarily of finished goods sold. Cost of goods sold in future periods will be from the operations of Eco Bio and our industrial hemp business activities
General and Administrative Expenses. General and administrative expenses for the three months ended June 30, 2025, were $86,685, compared to $150,785 during the three months ended June 30, 2024, a decrease of $64,100. The expenses for the current period consisted primarily of compensation expenses, office rent, advertising and travel costs. General and administrative expenses decreased primarily due to a decrease in costs related to closing and deconsolidating the South American operations. General and administrative expenses included non-cash, stock-based compensation of $86,685 and $150,785 during the three months ended June 30, 2025, and 2024, respectively.
Professional Fees. Professional fees for the three months ending June 30, 2025, were $84,633, compared to $223,667 during the three months ending June 30, 2024, a decrease of $139,034. Professional fees included non-cash, stock-based compensation of $30,000 and $92,575 during the three months ended June 30, 2025 and 2024, respectively.
Professional fees decreased primarily due to decreased stock-based compensation issued to directors and consultants during the current period.
Depreciation Expense. Depreciation expense for the three months ended June 30, 2025, and 2024 were zero due to the deconsolidation of OWP SAS at December 22, 2023.
Other Income (Expense). Other expenses, on a net basis, for the three months ending June 30, 2025, were $94,847, compared to other expenses, on a net basis, for the three months ended June 30, 2024, of $491,632, a decrease in net other expenses of $404,445. Other expenses consisted of interest expenses of $94,847 for the three months ended June 30, 2025, and, for the three months ended June 30, 2024, $122,600 in loss in deconsolidation of foreign subsidiaries and $369,032 in interest expense. The large reduction in costs is primarily related to the completion of the deconsolidation of foreign subsidiaries.
| 18 |
Net Loss.
Net loss for the three months ending June 30, 2025, was $265,916, compared to $865,059, for the three months ended June 30, 2024, a decrease of $599,143. The net loss decreased primarily due to the absence of losses on early extinguishment of debt and to the loss on deconsolidation of foreign subsidiaries that was incurred in the prior period.
Results of Operations for the Six Months Ended June 30, 2025 and 2024
The following table summarizes selected items from the statement of operations for the six months ended June 30, 2025 and 2024.
| Six Months Ended June 30, | Increase / | |||||||||||
| 2025 | 2024 | (Decrease) | ||||||||||
| Revenues | $ | 1,653 | $ | 1,536 | $ | 117 | ||||||
| Cost of goods sold | 328 | 278 | (50 | ) | ||||||||
| Gross profit | $ | 1,325 | $ | 1,258 | $ | 67 | ||||||
| Operating expenses: | ||||||||||||
| General and administrative | 185,353 | 349,632 | (164,279 | ) | ||||||||
| Professional fees | 120,601 | 802,338 | (681,737 | ) | ||||||||
| Total operating expenses: | 305,954 | 1,151,970 | (846,016 | ) | ||||||||
| Operating loss | (304,629 | ) | (1,150,712 | ) | (846,083 | ) | ||||||
| Other Income (expense) | ||||||||||||
| Loss on extinguishment of debt | - | (724,086 | ) | 724,086 | ||||||||
| Loss on deconsolidation of foreign subsidiaries | (220,272 | ) | 220,272 | |||||||||
| Interest income | - | - | - | |||||||||
| Interest expense | (216,953 | ) | (471,011 | ) | (254,058 | ) | ||||||
| Total Other Income (Expense) | (216,953 | ) | (1,415,369 | ) | (1,198,416 | ) | ||||||
| Net loss | $ | (521,582 | ) | $ | (2,566,081 | ) | $ | (2,044,499 | ) | |||
Revenues. Revenues during the six months ending June 30, 2025, were $1,653, compared to $1,536 during the six months ended June 30, 2024, an increase of $117. Revenues were generated by sales of our CBD product, which is a business segment of which we are not currently pursuing. Revenues in future periods will be from the operations of Eco Bio and our industrial hemp business activities.
Cost of Goods Sold. Cost of goods sold for the six months ending June 30, 2025, were $328, compared to $278 for the six months ending June 30, 2024. COGS consists primarily of finished goods sold. Cost of goods sold in future periods will be from the operations of Eco Bio and our industrial hemp business activities
General and Administrative Expenses. General and administrative expenses for the six months ended June 30, 2025, were $185,353, compared to $349,632 during the six months ended June 30, 2024, a decrease of $164,279. The expenses for the current period consisted primarily of compensation expenses, office rent, advertising and travel costs. General and administrative expenses decreased primarily due to a decrease in costs related to closing and deconsolidating the South American operations. General and administrative expenses included non-cash, stock-based compensation of $60,000 and $150,785 during the six months ended June 30, 2025, and 2024, respectively.
Professional Fees. Professional fees for the six months ended June 30, 2025, were $120,601, compared to $802,338 during the six months ending June 30, 2024, a decrease of $681,737. Professional fees included non-cash, stock-based compensation of $60,000 and $92,575 during the six months ended June 30, 2025 and 2024, respectively.
Professional fees decreased primarily due to decreased stock-based compensation issued to directors and consultants during the current period.
Depreciation Expense. Depreciation expense for the six months ended June 30, 2025, and 2024 were zero due to the deconsolidation of OWP SAS at December 22, 2023.
Other Income (Expense). Other expenses, on a net basis, for the six months ending June 30, 2025, were $224,613, compared to other expenses, on a net basis, for the six months ending June 30, 2024, of $1,415,369, a decrease in net other expenses of $1,190,656. Other expenses consisted of interest expenses of $224,613 for the six months ended June 30, 2025, and, for the six months ended June 30, 2024, $724,086 in loss on extinguishment of debt, $220,272 in loss in deconsolidation of foreign subsidiaries and $471,011 in interest expense. The large reduction in costs is primarily related to the completion of the deconsolidation of foreign subsidiaries and the absence of losses on early extinguishment of debt.
Net Loss. Net loss for the six months ending June 30, 2025, was $521,582, compared to $2,566,081, for the six months ended June 30, 2024, a decrease of $2,044,499. The net loss decreased primarily due to the absence of losses on early extinguishment of debt and to the loss on deconsolidation of foreign subsidiaries that was incurred in the prior period.
Liquidity and Capital Resources
The following is a summary of the Company’s cash flows provided by (used in) operating, investing, financing activities and effect of exchange rate changes on cash for the six months ended June 30, 2025, and 2024:
| 2025 | 2024 | |||||||
| Operating Activities | $ | (448,841 | ) | $ | (729,707 | ) | ||
| Investing Activities | - | (75,000 | ) | |||||
| Financing Activities | 420,000 | 1,208,500 | ||||||
| Effect of Exchange Rate Changes on Cash | - | (42,328 | ) | |||||
| Net Increase (Decrease) in Cash | $ | (28,841 | ) | $ | 361,465 | |||
Net Cash Used in Operating Activities
During the six months ending June 30, 2025, net cash used in operating activities was $448,841 compared to net cash used in operating activities of $729,707 for the six months ended June 30, 2024. The cash used in operating activities was primarily attributable to our net loss.
Net Cash Provided by Investing Activities
During the six months ending June 30, 2025, net cash provided by The Investing activity in the current period is $0 compared to $75,000 of proceeds used for investing in Subsidiary.
Net Cash Provided by Financing Activities
During the six months ending June 30, 2025, net cash provided by financing activities was $420,000 compared to net cash provided by financing activities of $1,208,500 for the six months ending June 30, 2024.
Ability to Continue as a Going Concern
As of June 30, 2025, our balance of cash on hand was $13,615 and we had negative working capital of $3,198,254 and an accumulated deficit of $31,386,280. We are too early in our development stage to project future revenue levels and may not be able to generate sufficient funds to sustain our operations for the next twelve months. Accordingly, we will need to raise additional cash to fund our operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
In the event sales do not materialize at the expected rates, management will seek additional financing and will attempt to conserve cash by further reducing expenses. There can be no assurance that we will be successful in achieving these objectives; therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern.
The condensed consolidated financial statements do not include any adjustments that might result from the outcome of any uncertainty regarding the Company’s ability to continue as a going concern. The condensed consolidated financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. Our ability to scale production and distribution capabilities and further increase the value of our brands is largely dependent on our success in raising additional capital.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operations. Critical accounting policies are those that are most important to the presentation of our financial condition and results of operations and require management’s subjective or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments.
| 19 |
While our significant accounting policies are more fully described in notes to our consolidated financial statements appearing elsewhere in this Form 10-Q, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating our reported financial results and affect the more significant judgments and estimates that we used in the preparation of our financial statements.
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. The Company’s revenues consisted of the sale of our Pro-11 CBD rub cannisters.
Inventory
Inventories are stated at the lower of cost or net realizable value. Cost is determined on a standard cost basis that approximates the first-in, first-out (FIFO) method. Appropriate consideration is given to obsolescence, excessive levels, deterioration, and other factors in evaluating net realizable value. Our CBD products consisted of finished goods, along with packaging.
Stock-Based Compensation
The Company accounts for equity instruments issued to employees and non-employees in accordance with the provisions of ASC 718 Stock Compensation (ASC 718). All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier of the date on which the counterparty’s performance is complete or the date at which a commitment for performance by the counterparty to earn the equity instruments is reached because of sufficiently large disincentives for nonperformance.
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item
| ITEM 4. | CONTROLS AND PROCEDURES |
Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective as of June 30, 2025.
Changes in Internal Control over Financial Reporting
There have been no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) or in other factors that occurred during the period of our evaluation or subsequent to the date we carried out our evaluation which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events. There can be no assurance that any system of controls and procedures will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
| 20 |
PART II - OTHER INFORMATION
| ITEM 1. | LEGAL PROCEEDINGS |
We are not a party to any legal or administrative proceedings that we believe, individually or in the aggregate, would be likely to have a material adverse effect on our financial condition or results of operations.
| ITEM 1A. | RISK FACTORS |
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
The following issuances of equity securities by the Company during the six-month period ended June 30, 2025, were exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and Regulation D thereunder:
Common Stock Issued for Services
On June 25, 2025, the Company issued a total of 882,353 shares of common stock to the Company’s then, Chief Financial Officer restricted in accordance with Rule 144. The fair value of the shares was $15,000, based on the closing price of the Company’s common stock on the date of grant.
In connection with the above security issuance, we did not pay any underwriting discounts or commissions. None of the sales of securities described or referred to above was registered under the Securities Act. In making the sales without registration under the Securities Act, we relied upon one or more of the exemptions from registration contained in Section 4(2) of the Securities Act, and in Regulation D promulgated under the Securities Act. No general solicitation or advertising was used in connection with the sales.
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
None.
| ITEM 4. | MINE SAFETY DISCLOSURES |
Not applicable.
| ITEM 5. | OTHER INFORMATION |
Submission of Matters to a Vote of Security Holders.
On July 28, 2025, the holder of a majority of the voting power of the Company approved an increase in the number of authorized shares of common stock to 1,000,000,000 shares and to change the name of the Company to “Isiah Enterprises, Inc.”
Securities Trading Plans of Directors and Executive Officers
None of the Company’s directors and officers has adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (as such terms are defined in Item 408(c) of Regulation S-K) during the three months ended June 30, 2025.
Related-Party Loans
On March 24, 2025, the Company, through its wholly owned subsidiary, OWP Ventures, Inc., received an advance of $10,000 from Isiah L. Thomas, III, our Chairman of the Board and CEO, pursuant to an unsecured promissory note due on demand that carries a 10% interest rate.
On April 21, 2025, the Company, through its wholly owned subsidiary, OWP Ventures, Inc., received proceeds of $250,000 from Dr. John McCabe, a significant shareholder, in exchange for a promissory note, bearing interest at 10% per annum, due on demand.
On April 7, 2025, the Company, through its wholly owned subsidiary, OWP Ventures, Inc., received proceeds of $50,000 from Dr. John McCabe, a significant shareholder, in exchange for a promissory note, bearing interest at 10% per annum, due on demand.
On April 2, 2025, the Company, through its wholly owned subsidiary, OWP Ventures, Inc., received an advance of $10,000 from Isiah L. Thomas, III, our Chairman of the Board and CEO, pursuant to an unsecured promissory note due on demand that carries a 10% interest rate.
On June 30, 2025, the Company, through its wholly owned subsidiary, OWP Ventures, Inc., received an advance of $100,000 from Dr. John McCabe, a significant shareholder, in exchange for a promissory note promissory note due on demand that carries a 10% interest rate. These funds were deposited in an escrow with the CFO, William Rowland, for payment of due diligence and costs related to the acquisition effort acquisition of the assets of Eco Bio Plastic Michigan Inc. from the bankruptcy trustee of its parent company in Japan.
Accounts Payable, Related Party
Accounts payable, related parties, at June 30, 2025, is $27,977, representing the total amount due to one of the Company’s directors, on account.
Subsequent Events involving Eco Bio Plastics Michigan asset acquisition
On July 15, and July 22, 2025, the Company, through its wholly owned subsidiary, OWP Ventures, Inc., received an advance of $40,000 and $20,000, respectively, from an affiliate of Isiah L. Thomas, III, our Chairman of the Board and CEO, pursuant to an unsecured promissory note due on demand that carries a 10% interest rate. The funds were used primarily to support operating costs at Eco Bio during the transition to EPID LLC, DBA: Eco Bio Plastics Michigan as it took control of the new asset.
As the time of the acquisition, July 11, 2025, of Eco Bio assets approached Isiah L. Thomas, III, our Chairman of the Board and CEO, proposed a secured Exchange Note and Deed of Trust benefitting Dr. John McCabe which would provide collateral for $1,250,000 in advances from Dr. McCabe to support the acquisition and the operation of the new business unit.
Dr. McCabe provided $500,000 in advances in April through June 30, 2025, which will be exchanged for and included in the collateralized note. The Note will cover additional commitments including $415,000 on July 13, 2025, for the purchase of Eco Bio, with $60,000 to be funded August 4, 2025, $90,000 to be funded August 18, 2025, $150,000 to be funded on September 12, 2025, and a future commitment for $75,000. These last payments are to support the carrying costs, acquisition, audit, professional fees, etc. used to complete the transaction. A total commitment of $1,500,000 secured by a Note and Deed of Trust on the acquired facilities. Such note would accrue interest at 12% and be due January 31, 2027, or extended for a change in terms to providing for monthly payments on the 1st of each month beginning February 2027, amortized over a 10-year term, and due January 31, 2028.
Bankruptcy
Effective October 1, 2024, the Company’s Colombian subsidiary, One World Pharma S.A.S. (“OWP Colombia”), entered into a liquidation proceeding pursuant to Colombian Law 1116 of 2006, under which the creditors of a company can request “judicial liquidation” of such company. The proceeding was submitted to the Superintendent of Corporations of Colombia as a substitute to the reorganization proceedings previously filed on December 22, 2023.
The operations of OWP Colombia have previously been deconsolidated. As such, we do not expect judicial liquidation to have a significant impact on the Company’s financial statements.
| 21 |
| ITEM 6. | Exhibits |
* Filed herewith.
+ Compensatory plan or agreement.
| 22 |
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.
| Date: September 19, 2025. | |
| One World Products, Inc. | |
| /s/ Isiah L. Thomas III | |
| Isiah L. Thomas III | |
| Chief Executive Officer | |
| (Principal Executive Officer) | |
| /s/ William Rowland | |
| William Rowland | |
| Chief Financial Officer | |
| (Principal Financial Officer) |
| 23 |