One World Products Inc

Previous wording

Wehave acquired another Colombian subsidiary with the intent to operate within the INTEXZONA free trade zone in Cota, Colombia, near Bogotá, which has allrequisite licenses for the cultivation, production, distribution and export of cannabis and hemp infused products, and will serve as the Company’s primary base of operations in the Colombian market. Establishing operations within the free trade zone provides favorable import/export commercial terms and taxation, and will improve logistics and the overall operating efficiencies for the Company due to the close proximity of El Dorado International Airport and the commercial, economic and cultural center of the city of Bogotá itself.

Current wording

We are in the process of acquiring another Colombian subsidiary within the Bogota free trade zone, which has allrequisite licenses for the cultivation, production, distribution and export of cannabis and hemp infused products, and will serve as the Company’s primary base of operations in the Colombian market. Establishing operations within the free trade zone provides favorable import/export commercial terms and taxation, and will improve logistics and the overall operating efficiencies for the Company due to the close proximity of El Dorado International Airport and the commercial, economic and cultural center of the city of Bogota itself.

Previous wording

We have generated revenues since the second quarter of 2020. Between August 2021 and March 2022, we made payments of approximately $1,400,000 for the purchase of a state-of-the-art distillation machine that cleared customs and is currently located in a warehouse near Bogotá. We intend to build out an extraction and production facility in the INTEXZONA free trade zone in Cota, Colombia free trade zone near Bogotá and in close proximity to El Dorado International Airport in Bogotá after we execute a lease for this location. Once the extraction equipment is placed in service, we will be one of the few companies in Colombia to both hold licenses and possess the capability to extract high-quality CBD and THC oils.

Current wording

We have generated revenues since the second quarter of 2020. Between August 2021 and March 2022, we made payments of approximately $1,400,000 for the purchase of a state-of-the-art distillation machine that cleared customs and is currently located in a warehouse near Bogota. We intend to build out an extraction and production facility in the Bogota free trade zone adjacent to El Dorado International Airport in Bogota after we execute a lease for this location. Once the extraction equipment is placed in service, we will be one of the few companies in Colombia to both hold licenses and possess the capability to extract high-quality CBD and THC oils.

Previous wording

Due to challenging economic conditions and under prior management, OWP SAS experienced significant operational and managerial challenges in 2022 and 2023, resulting its accumulation of financial obligations of approximately $1.2 million, which are substantially past due. Without adequate resources and in an effort to forestall the imposition of interest, late charges, fines and any Court-mandated order(s) to cease operations, 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. During the Reorganization Proceeding, management intends to satisfy OWP SAS’s continuing financial obligations through the negotiation and/or settlement with creditors and the Colombian governmental authorities. Subject to Court approval, the Company intends to continue normal operations, which consists of providing cannabinoids in bulk for the domestic and international markets, including the raw material for our brands and affiliate companies. At this time, the Company cannot predict the length of time of the Reorganization Proceeding. The Company has deconsolidated its foreign subsidiaries until it emerges from the Reorganization Proceedings to include the petitioning entity, OWP SAS, as well as the Company’s non-operating shell entities, Agrobase, S.A.S. and Hope Colombia, S.A.S., given the lack of independently identifiable operations. The deconsolidation resulted in a loss on deconsolidation of foreign subsidiaries in the amount of $97,672 and $1,564,823 for the three months ended March 31, 2024 and the year ended December 31, 2023, respectively.

Current wording

Due to challenging economic conditions and under prior management, OWP SAS experienced significant operational and managerial challenges in 2022 and 2023, resulting its accumulation of financial obligations of approximately $1.2 million, which are substantially past due. Without adequate resources and in an effort to forestall the imposition of interest, late charges, fines and any court-mandated order(s) to cease operations, 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. During the Reorganization Proceeding, management intends to satisfy OWP SAS’s continuing financial obligations through the negotiation and/or settlement with creditors and the Colombian governmental authorities. Subject to court approval, the Company intends to continue normal operations, which consists of providing cannabinoids in bulk for the domestic and international markets, including the raw material for our brands and affiliate companies. At this time, the Company cannot predict the length of time of the Reorganization Proceeding. The Company has deconsolidated its foreign subsidiaries until it emerges from the Reorganization Proceedings to include the petitioning entity, OWP SAS, as well as the Company’s non-operating shell entities, Agrobase, S.A.S. and Hope Colombia, S.A.S., given the lack of independently identifiable operations. The deconsolidation resulted in a loss on deconsolidation of foreign subsidiaries in the amount of $97,672 and $1,564,823 for the six months ended June 30, 2024 and the year ended December 31, 2023, respectively.

Previous wording

We expect the sale of products in 2024, including CBD flower and distillate oil. Our product pipeline may include premium coffee certified by the Colombian National Coffee Federation infused with CBD, teas infused with CBD and a series of wellness products, including sports CBD energy drinks for optimum performance, CBD facial and body creams for anti-inflammatory and anti-aging use and white label commercial agreements with partners in Europe, USA, and Latin America. We recently entered into strategic partnerships with Smokiez Edibles in Colombia and Stephen Marley’s Kx Family Care. There can be no assurances that these strategic partnerships will generate revenues or be profitable for the Company.

Current wording

We expect Pétalo to start exporting products in 2024, including CBD flower and distillate oil. Our product pipeline may include premium coffee certified by the Colombian National Coffee Federation infused with CBD, teas infused with CBD and a series of wellness products, including sports CBD energy drinks for optimum performance, CBD facial and body creams for anti-inflammatory and anti-aging use and white label commercial agreements with partners in Europe, USA, and Latin America. We recently entered into strategic partnerships with Smokiez Edibles in Colombia and Stephen Marley’s Kx Family Care. There can be no assurances that these strategic partnerships will generate revenues or be profitable for the Company.

Previous wording

Revenues during the three months ended March 31, 2024 were $282, compared to $2,101 during the three months ended March 31, 2023, a decrease of $1,819, or 87%. Revenues during the current period were generated by sales of our CBD product, while revenues from the comparative period were attributable to sales of cannabis seeds by OWP SAS.

Current wording

Revenues during the three months ended June 30, 2024 were $1,254, compared to $75 during the three months ended June 30, 2023, an increase of $1,179, or 1,572%. Revenues during the current period were generated by sales of our CBD product, while revenues from the comparative period were attributable to sales of cannabis seeds by OWP SAS.

Previous wording

Cost of goods sold for the three months ended March 31, 2024 were $49, compared to $967 for the three months ended March 31, 2023, a decrease of $918, or 95%. Cost of goods sold consists primarily of labor, agricultural raw materials, depreciation and overhead. Costs of goods sold decreased as we transitioned to the sale of CBD products. Our profit margin during the three months ended March 31, 2024 was 83%, compared to 54% for the three months ended March 31, 2023.

Current wording

Cost of goods sold for the three months ended June 30, 2024 were $229, compared to $132 for the three months ended June 30, 2023, an increase of $97, or 73%. Cost of goods sold consists primarily of labor, agricultural raw materials, depreciation and overhead. Costs of goods sold increased as we transitioned to the sale of CBD products and increased sales. Our profit margin during the three months ended June 30, 2024 was 82%, compared to negative 76% for the three months ended June 30, 2023.

Previous wording

General and administrative expenses for the three months ended March 31, 2024 were $198,847, compared to $347,297 during the three months ended March 31, 2023, a decrease of $148,450, or 43%. The expenses for the current period consisted primarily of compensation expenses, office rent, and travel costs. General and administrative expenses decreased primarily due to decreased salaries and wages and lease expenses in Colombia over the comparative period, as we transitioned to new management. General and administrative expenses included non-cash, stock-based compensation of $33,000 and $29,347 during the each of the three months ended March 31, 2024 and 2023.

Current wording

General and administrative expenses for the three months ended June 30, 2024 were $150,785, compared to $417,834 during the three months ended June 30, 2023, a decrease of $267,049, or 64%. The expenses for the current period consisted primarily of compensation expenses, office rent, and travel costs. General and administrative expenses decreased primarily due to decreased salaries and wages and lease expenses in Colombia over the comparative period, as we transitioned to new management. General and administrative expenses included non-cash, stock-based compensation of $-0- and $119,197 during the three months ended June 30, 2024 and 2023, respectively.

Previous wording

Professional fees for the three months ended March 31, 2024 were $578,671, compared to $103,848 during the three months ended March 31, 2023, an increase of $474,823, or 457%. Professional fees included non-cash, stock-based compensation of $462,933 and $53,783 during the three months ended March 31, 2024 and 2023, respectively. Professional fees increased primarily due to increased stock-based compensation issued to consultants during the current period.

Current wording

Professional fees for the three months ended June 30, 2024 were $223,667, compared to $73,664 during the three months ended June 30, 2023, an increase of $150,003, or 204%. Professional fees included non-cash, stock-based compensation of $92,575 and $5,861 during the three months ended June 30, 2024 and 2023, respectively. Professional fees increased primarily due to increased stock-based compensation issued to consultants during the current period.

Previous wording

Depreciation expense for the three months ended March 31, 2024 was $-0-, compared to $7,857 during the three months ended March 31, 2023, a decrease of $7,857. Depreciation expense decreased due to the deconsolidation of OWP SAS at December 22, 2023.

Current wording

Depreciation expense for the three months ended June 30, 2024 was $-0-, compared to $8,447 during the three months ended June 30, 2023, a decrease of $8,447. Depreciation expense decreased due to the deconsolidation of OWP SAS at December 22, 2023.

Previous wording

Other expenses, on a net basis, for the three months ended March 31, 2024 were $923,737, compared to other expenses, on a net basis, of $58,070 during the three months ended March 31, 2023, an increase in net expenses of $865,667, or 1,491%. Other expenses consisted of an early extinguishment of debt in the amount of $724,086 related to common stock issued to related parties as commitment shares on debt modifications, a $97,672 loss on deconsolidation of foreign subsidiaries, and $101,979 of interest expense, including $46,030 of stock-based finance costs on the amortization of debt discounts for the three months ended March 31, 2024, compared to $58,070 of interest expense for the three months ended March 31, 2023.

Current wording

Other expenses, on a net basis, for the six months ended June 30, 2024 were $1,415,369, compared to other expenses, on a net basis, of $105,198 during the six months ended June 30, 2023, an increase in net expenses of $1,310,171, or 1,245%. Other expenses consisted of an early extinguishment of debt in the amount of $724,086 related to common stock issued to related parties as commitment shares on debt modifications, a $220,272 loss on deconsolidation of foreign subsidiaries, and $471,011 of interest expense, including $201,975 of stock-based finance costs on the amortization of debt discounts for the six months ended June 30, 2024, compared to $109,598 of interest expense, including $1,077 of stock-based finance costs on the amortization of debt discounts, as partially offset by a gain on early extinguishment of debt of $4,397 on the termination of long term leases and $3 of interest income for the six months ended June 30, 2023.

Previous wording

Net loss for the three months ended March 31, 2024 was $1,701,022, or $0.02 per share, compared to $515,938, or $0.01 per share, during the three months ended March 31, 2023, an increase of $1,185,084, or 230%. The net loss increased primarily due to increased stock-based compensation and the fair value of common stock issued to related parties as commitment shares on debt modifications.

Current wording

Net loss for the six months ended June 30, 2024 was $2,566,081, or $0.03 per share, compared to $1,063,068, or $0.02 per share, during the six months ended June 30, 2023, an increase of $1,503,013, or 141%. The net loss increased primarily due to increased stock-based compensation and the fair value of common stock issued to related parties as commitment shares on debt modifications.

Previous wording

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 three months ended March 31, 2024 and 2023:

Current wording

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, 2024 and 2023:

Previous wording

During the three months ended March 31, 2024, net cash used in operating activities was $249,750, compared to net cash used in operating activities of $561,983 for the three months ended March 31, 2023. The cash used in operating activities was primarily attributable to our net loss.

Current wording

During the six months ended June 30, 2024, net cash used in operating activities was $729,707, compared to net cash used in operating activities of $842,925 for the six months ended June 30, 2023. The cash used in operating activities was primarily attributable to our net loss.

Previous wording

During the three months ended March 31, 2024, net cash used in investing activities was $-0-, compared to net cash used in investing activities of $5,046 for the three months ended March 31, 2023. The cash used in investing activities during the prior period consisted entirely of purchases of fixed assets.

Current wording

During the six months ended June 30, 2024, net cash used in investing activities was $75,000, compared to net cash used in investing activities of $5,046 for the six months ended June 30, 2023. The cash used in investing activities during the current period was for the $75,000 purchase of a subsidiary in Colombia, compared to the prior period, which consisted entirely of purchases of fixed assets.

Previous wording

During the three months ended March 31, 2024, net cash provided by financing activities was $332,000, compared to net cash provided by financing activities of $450,000 for the three months ended March 31, 2023. The current period consisted of $285,000 of proceeds received on debt financing, $347,000 of proceeds received on debt financing received by related parties, as partially offset by $300,000 of debt repayments, compared to $150,000 of proceeds received on the sale of preferred stock and $300,000 from the sale of common stock, during the three months ended March 31, 2023.

Current wording

During the six months ended June 30, 2024, net cash provided by financing activities was $1,208,500, compared to net cash provided by financing activities of $812,500 for the six months ended June 30, 2023. The current period consisted of $2,075,500 of proceeds received on debt financing, as partially offset by $867,000 of debt repayments, compared to $250,000 of proceeds received on the sale of preferred stock and $300,000 from the sale of common stock, and $262,500 of proceeds received on debt financing during the six months ended June 30, 2023.

Previous wording

As of March 31, 2024, our balance of cash on hand was $40,648, and we had negative working capital of $1,871,931 and an accumulated deficit of $28,630,708. 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.

Current wording

As of June 30, 2024, our balance of cash on hand was $362,191, and we had negative working capital of $2,506,932 and an accumulated deficit of $29,495,767. 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.