One World Products Inc
For the period ended Sep 30, 2024. Filed Nov 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 14, 2024
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-21.
0001493152-24-033467
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001493152-24-046063
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 63 previous paragraphs and 64 current paragraphs.
41 unchanged; 21 reworded; 2 added; 1 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
During 2024, the Company has also been developing industrial hemp solutions for the automotive market. The Company intends to focus increased efforts on research and development in this area to help the automotive industry meet its goals of achieving carbon neutral manufacturing using renewable material solutions. In October of 2024, the Company, in collaboration with partners in the automotive industry, developed hemp-based molded containers for automotive part packaging applications and received an initial order for 1,400 units of these reusable totes, designed to move and protect automotive parts through the supply chain.
Current report
Results of Operations for the Nine Months Ended September 30, 2024 and 2023:
Removed paragraphs (1)
Previous report
Results of Operations for the Six Months Ended June 30, 2024 and 2023:
Reworded paragraphs (21)
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 six months ended June 30, 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.On October 1, 2024, the Company amended its filing with the Court to change from a Reorganization Proceeding to a liquidation of its assets, primarily consisting of the farm in Popayán and equipment. The Company has deconsolidated its foreign subsidiaries 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 $242,631 and $1,564,823 for the nine months ended September 30, 2024 and the year ended December 31, 2023, respectively.
Previous 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.
Current wording
Revenues during the three months ended September 30, 2024 were $1,517, compared to $5,906 during the three months ended September 30, 2023, a decrease of $4,389, or 74%. 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 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.
Current wording
Cost of goods sold for the three months ended September 30, 2024 were $310, compared to $767 for the three months ended September 30, 2023, a decrease of $457, or 60%. Cost of goods sold for our CBD product consists primarily of finished goods sold, while costs of goods related to our cannabis seeds in the prior period consisted primarily of labor, agricultural raw materials, depreciation and overhead. Costs of goods sold decreased as we transitioned to the sale of CBD products and sales decreased. Our profit margin during the three months ended September 30, 2024 was 80%, compared to 87% for the three months ended September 30, 2023.
Previous wording
General and administrative expenses for the six months ended June 30, 2024 were $349,632, compared to $765,131 during the six months ended June 30, 2023, a decrease of $415,499, or 54%. 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 $119,197 during the six months ended June 30, 2024 and 2023, respectively.
Current wording
General and administrative expenses for the three months ended September 30, 2024 were $203,242, compared to $142,464 during the three months ended September 30, 2023, an increase of $60,778, or 43%. The expenses for the current period consisted primarily of compensation expenses, office rent, and travel costs. General and administrative expenses increased primarily due to increased salaries and wages in the current period, and lease expenses in Colombia incurred in the prior period that weren’t recognized in the current period, as we transitioned to new management and shifted our focus to operations within the United States. General and administrative expenses included non-cash, stock-based compensation of $26,250 and $29,347 during the three months ended September 30, 2024 and 2023, respectively.
Previous 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.
Current wording
Professional fees for the three months ended September 30, 2024 were $169,596, compared to $236,139 during the three months ended September 30, 2023, a decrease of $66,543, or 28%. Professional fees included non-cash, stock-based compensation of $21,564 and $147,367 during the three months ended September 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 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.
Current wording
Depreciation expense for the three months ended September 30, 2024 was $-0-, compared to $9,274 during the three months ended September 30, 2023, a decrease of $9,274. 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 June 30, 2024 were $491,632, compared to other expenses, on a net basis, of $47,128 during the three months ended June 30, 2023, an increase in net expenses of $444,504, or 943%. Other expenses consisted of a $122,600 loss on deconsolidation of foreign subsidiaries and $369,032 of interest expense, including $178,310 of stock-based finance costs on the amortization of debt discounts for the three months ended June 30, 2024, compared to $51,528 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 three months ended June 30, 2023.
Current wording
Other expenses, on a net basis, for the three months ended September 30, 2024 were $362,968, compared to other expenses, on a net basis, for the three months ended September 30, 2023 of $67,568, an increase in net expenses of $295,400, or 437%. Other expenses consisted of a $22,359 loss on deconsolidation of foreign subsidiaries and $340,609 of interest expense, including $147,756 of stock-based finance costs on the amortization of debt discounts for the three months ended September 30, 2024, compared to $67,571 of interest expense, including $12,684 of stock-based finance costs on the amortization of debt discounts, as partially offset by $3 of interest income for the three months ended September 30, 2023.
Previous wording
Net loss for the three months ended June 30, 2024 was $865,059, or $0.01 per share, compared to $547,130, or $0.01 per share, during the three months ended June 30, 2023, an increase of $317,929, or 58%. The net loss increased primarily due to increased interest expense on debt financing.
Current wording
Net loss for the three months ended September 30, 2024 was $734,599, or $0.01 per share, compared to $450,306, or $0.01 per share, during the three months ended September 30, 2023, an increase of $284,293, or 63%. The net loss increased primarily due to increased interest expense on debt financing.
Previous wording
The following table summarizes selected items from the statement of operations for the six months ended June 30, 2024 and 2023.
Current wording
The following table summarizes selected items from the statement of operations for the nine months ended September 30, 2024 and 2023.
Previous wording
Revenues during the six months ended June 30, 2024 were $1,536, compared to $2,176 during the six months ended June 30, 2023, a decrease of $640, or 29%. 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 nine months ended September 30, 2024 were $3,053, compared to $8,082 during the nine months ended September 30, 2023, a decrease of $5,029, or 62%. 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 six months ended June 30, 2024 were $278, compared to $1,099 for the six months ended June 30, 2023, a decrease of $821, or 75%. Cost of goods sold consists primarily of CBD products. Costs of goods sold decreased as we transitioned to the sale of CBD products and sales decreased. Our profit margin during the six months ended June 30, 2024 was 82%, compared to 49% for the six months ended June 30, 2023.
Current wording
Cost of goods sold for the nine months ended September 30, 2024 were $588, compared to $1,866 for the nine months ended September 30, 2023, a decrease of $1,278, or 68%. Cost of goods sold for our CBD product consists primarily of finished goods sold, while costs of goods related to our cannabis seeds in the prior period consisted primarily of labor, agricultural raw materials, depreciation and overhead. Costs of goods sold decreased as we transitioned to the sale of CBD products and sales decreased. Our profit margin during the nine months ended September 30, 2024 was 81%, compared to 77% for the nine months ended September 30, 2023.
Previous 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.
Current wording
General and administrative expenses for the nine months ended September 30, 2024 were $552,874, compared to $907,595 during the nine months ended September 30, 2023, a decrease of $354,721, or 39%. 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 and shifted our focus to operations within the United States. General and administrative expenses included non-cash, stock-based compensation of $59,250 and $177,891 during the nine months ended September 30, 2024 and 2023, respectively.
Previous wording
Professional fees for the six months ended June 30, 2024 were $802,338, compared to $177,512 during the six months ended June 30, 2023, an increase of $624,826, or 352%. Professional fees included non-cash, stock-based compensation of $555,508 and $5,861 during the six 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.
Current wording
Professional fees for the nine months ended September 30, 2024 were $971,934, compared to $413,651 during the nine months ended September 30, 2023, an increase of $558,283, or 135%. Professional fees included non-cash, stock-based compensation of $577,072 and $207,011 during the nine months ended September 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 six months ended June 30, 2024 was $-0-, compared to $16,304 during the six months ended June 30, 2023, a decrease of $16,304. Depreciation expense decreased due to the deconsolidation of OWP SAS at December 22, 2023.
Current wording
Depreciation expense for the nine months ended September 30, 2024 was $-0-, compared to $25,578 during the nine months ended September 30, 2023, a decrease of $25,578. Depreciation expense decreased due to the deconsolidation of OWP SAS at December 22, 2023.
Previous 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.
Current wording
Other expenses, on a net basis, for the nine months ended September 30, 2024 were $1,778,337, compared to other expenses, on a net basis, of $172,766 during the nine months ended September 30, 2023, an increase in net expenses of $1,605,571, or 929%. 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 $242,631 loss on deconsolidation of foreign subsidiaries, and $811,620 of interest expense, including $349,731 of stock-based finance costs on the amortization of debt discounts for the nine months ended September 30, 2024, compared to $177,169 of interest expense, including $12,684 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 $6 of interest income for the nine months ended September 30, 2023.
Previous 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.
Current wording
Net loss for the nine months ended September 30, 2024 was $3,300,680, or $0.03 per share, compared to $1,513,374, or $0.02 per share, during the nine months ended September 30, 2023, an increase of $1,787,306, or 118%. The net loss increased primarily due to stock-based compensation, the fair value of common stock issued to related parties as commitment shares on debt modifications and interest expense.
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 six months ended June 30, 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 nine months ended September 30, 2024 and 2023:
Previous 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.
Current wording
During the nine months ended September 30, 2024, net cash used in operating activities was $1,010,268, compared to net cash used in operating activities of $1,043,238 for the nine months ended September 30, 2023. The cash used in operating activities was primarily attributable to our net loss.
Previous 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.
Current wording
During the nine months ended September 30, 2024, net cash used in investing activities was $75,000, compared to net cash used in investing activities of $5,046 for the nine months ended September 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 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.
Current wording
During the nine months ended September 30, 2024, net cash provided by financing activities was $1,208,500, compared to net cash provided by financing activities of $874,500 for the nine months ended September 30, 2023. The current period consisted of $150,000 of proceeds received on the sale of preferred stock and $2,075,500 of proceeds received on debt financing, as partially offset by $1,017,000 of debt repayments, compared to $250,000 of proceeds received on the sale of preferred stock, $300,000 from the sale of common stock, $262,500 of proceeds received on debt financing and $62,000 of proceeds received on debt financing received by related parties during the nine months ended September 30, 2023.
Previous 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.
Current wording
As of September 30, 2024, our balance of cash on hand was $81,630, and we had negative working capital of $3,154,500 and an accumulated deficit of $30,230,366. 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.