MDWerks, Inc.

Previous wording

MDwerks, Inc. (the “Company”), a Delaware corporation, was focused on effecting a “reverse merger,” capital exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more unrelated businesses (a “Business Combination”) that would benefit from the Company’s public reporting status. During the fiscal year ended December 31, 2023, the Company completed two acquisitions as discussed in detail below. The Company is a forward-thinking company that is leading the charge in the world of sustainable technology. As a leading provider of energy wave technologies, MDwerks is dedicated to creating innovative solutions that help businesses reduce their energy costs while also increasing speed to market. Our expertise in radio wave technologies and microwave technologies has led to multiple breakthroughs with applications both industrial and commercial.

Current wording

MDwerks, Inc. (the “Company”), a Delaware corporation, was focused on effecting a “reverse merger,” capital exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more unrelated businesses (a “Business Combination”) that would benefit from the Company’s public reporting status. During the fiscal year ended December 31, 2023, the Company completed two acquisitions as discussed in detail below.

Previous wording

RFS is an innovative company pushing the boundaries of sustainable Radio Frequency applications. For over 12 years RFS has addressed companies’ most pressing challenges by implementing automated Radio Frequency Technology in a sustainable way reducing energy costs and increasing speed to market when compared to traditional methods. By bringing Radio Frequency applications to market RFS has successfully elevated a wide range of industries including structural engineering, food & beverage, and manufacturing.

Current wording

RFS is an innovative company pushing the boundaries of sustainable Radio Frequency applications. For over 13 years RFS has addressed companies’ most pressing challenges by implementing automated Radio Frequency Technology in a sustainable way reducing energy costs and increasing speed to market when compared to traditional methods. By bringing Radio Frequency applications to market RFS has successfully elevated a wide range of industries including structural engineering, food & beverage, and manufacturing.

Previous wording

On August 25, 2023, we entered an asset purchase agreement with an unrelated company, Dream Workz Automotive LLC, a Colorado limited liability company (“Dream Workz”). Pursuant to this agreement, we sold certain tangible manufacturing assets of ours to Dream Workz for a purchase price of $195,000 (the “Purchase Price”). The Purchase Price was paid in a combination of cash in the amount of $100,000 and a promissory note in the amount of $95,000 (the “Note”). The Note is unsecured and bears interest at the rate of 8% per annum commencing as of August 25, 2023, and matures on August 25, 2029. The Company recognized a gain of $168,855 on the disposition of assets.

Current wording

On August 25, 2023, we entered an asset purchase agreement with an unrelated company, Dream Workz Automotive LLC, a Colorado limited liability company (“Dream Workz”). Pursuant to this agreement, we sold certain tangible manufacturing assets of ours to Dream Workz for a purchase price of $195,000 (the “Purchase Price”). The Purchase Price was paid in a combination of cash in the amount of $100,000 and a promissory note in the amount of $95,000 (the “Note”). The Note is unsecured and bears interest at the rate of 8% per annum commencing as of August 25, 2023, and matures on August 25, 2029. The Company recognized a gain of $168,855 on the disposition of assets. During the year ended December 31, 2024, the Company recognized a loss on impairment of the Note of $97,533.

Previous wording

Operating Expenses. The Company reported operating expenses of $528,114 consisting primarily of legal, accounting, payroll, and general business related expenses for the year ended December 31, 2023 compared to $153,713 for the year ended December 31, 2022. The $374,401 increase in operating expenses was primarily attributable to increased legal and payroll expenses and accounting fees related to our public company reporting obligations as well as our activities related to the acquisitions that occurred in 2023.

Current wording

Operating Expenses. The Company reported operating expenses of $2,376,693 consisting primarily of legal, accounting, payroll, and general business related expenses for the year ended December 31, 2024 compared to $475,009 for the year ended December 31, 2023. The $1,843,784 increase in operating expenses was primarily attributable to a full year of operations with both businesses. Selling, general and administrative expenses was $1,853,335, and included legal, accounting and audit fees related to our public company reporting obligations and increased activity from two operating business lines, including stock-based compensation of $71,938. Operating expenses included salary and wages expense of $175,827 and $0 for the years ended December 31, 2024 and 2023, respectively. Operating expenses included depreciation and amortization expense of $289,631 and $15,126 for the years ended December 31, 2024 and 2023, and a loss of $57,900 on disposal of assets to a related party.

Previous wording

Total Other Income. Total other income was $160,927 for the year ended December 31, 2023 compared to $0 for the year ended December 31, 2022. The $160,927 increase was attributable to a gain on the sale of assets discussed above.

Current wording

Total Other Income/Expense. Total other expense was $118,453 for the year ended December 31, 2024 compared to the total other income of $160,927 for the year ended December 31, 2023. The $221,480 change was primarily attributable to a loss of $97,533 loss on impairment of note receivable compare to $0 in 2023, and a gain of $168,855 on the sale of assets in 2023.

Previous wording

As of December 31, 2023 and 2022, our cash balance was $115,111 and $23,715, respectively. We anticipate that our current cash and cash generated from financing activities will be insufficient to satisfy our liquidity requirements for the next 12 months. To date, the Company has incurred operating losses since inception of $739,388. At December 31, 2023, the Company had working capital deficit of $517,889.

Current wording

As of December 31, 2024 and 2023, our cash balance was $11,159 and $115,111, respectively. We anticipate that our current cash and cash generated from financing activities will be insufficient to satisfy our liquidity requirements for the next 12 months. To date, the Company has incurred operating losses since inception of $2,360,505. At December 31, 2024, the Company had a working capital deficit of $1,244,697.

Previous wording

We expect to incur marketing, professional, and administrative expenses as well expenses associated with maintaining our filings with the Commission. We will require additional funds during this time and will seek to raise the necessary additional capital. If we are unable to obtain additional financing, we may be required to reduce the scope of our business development activities, which could harm our business plans, financial condition and operating results. Additional funding may not be available on favorable terms, if at all. The Company intends to continue to fund its business by way of equity or debt financing and advances from related parties. Any inability to raise capital as needed would have a material adverse effect on our business, financial condition, and results of operations.

Current wording

We expect to incur marketing, professional, and administrative expenses as well as expenses associated with maintaining our filings with the Commission. We will require additional funds during this time and will seek to raise the necessary additional capital. If we are unable to obtain additional financing, we may be required to reduce the scope of our business development activities, which could harm our business plans, financial condition and operating results. Additional funding may not be available on favorable terms, if at all. The Company intends to continue to fund its business by way of equity or debt financing and advances from related parties. Any inability to raise capital as needed would have a material adverse effect on our business, financial condition, and results of operations.

Previous wording

***Cash Used in Operating Activities.***Net cash used in operating activities for the years ended December 31, 2023 and 2022, were $519,790 and $120,374. The increase was attributable to an increase in net loss partially offset by an increase in accounts payable.

Current wording

***Cash Used in Operating Activities.***Net cash used in operating activities for the years ended December 31, 2024 and 2023, was $781,970 and $519,790. The increase was attributable to an increase in net loss from the increase in operations in 2024.

Previous wording

***Cash Used in Investing Activities.***Net cash provided by investing activities for the years ended December 31, 2023 and 2022, were $39,041 and $0. The increase was attributable to an increase in net assets purchased from the Company’s acquisitions, cash proceeds from the sale of certain equipment of $100,000 offset by purchase of intangible assets and purchase of property and equipment of $88,000.

Current wording

***Cash Used in Investing Activities.***Net cash used in investing activities for the years ended December 31, 2024 and net cash provided by investing activities for the year ended December 31, 2023, was $6,990 and $39,041, respectively. The decrease was attributable to a decrease in purchase of intangible assets of $19,500 and property and equipment of $88,000 in 2023 to purchases of property and equipment of $6,990 in 2024. The Company had cash proceeds from the sale of certain equipment of $100,000 and $46,541 net assets acquired from acquisitions in 2023.

Previous wording

***Cash Provided by Financing Activities.***Net cash provided by financing activities for the years ended December 31, 2023 and 2022, were $572,145 and $144,089. The increase was attributable to $676,349 in proceeds from the sale of common stock, offset by repayments of advances payable.

Current wording

***Cash Provided by Financing Activities.***Net cash provided by financing activities for the years ended December 31, 2024 and 2023, was $685,008 and $572,145. Net cash provided by financing activities for the year ended December 31, 2024 consisted of $745,000 in proceeds from the sale of common stock, $155,500 in proceeds from related party notes payable, offset by repayments of notes payable to related parties and third parties of $32,500 and $182,982, respectively, and redemption of preferred stock of $10. Net cash provided by financing activities for the year ended December 31, 2023 consisted of $676,349 in proceeds from the sale of common stock, offset by $104,204 repayments of advances payable.

Previous wording

The Company recognizes sales when merchandise is shipped from a warehouse directly to wholesale customers (except in the case of a consignment sale). For consignment sales, which include sales to the Oregon Liquor Control Commission, the Company recognizes sales upon the consignee’s shipment to the customer. Postage and handling charges billed to customers are also recognized as sales upon shipment of the related merchandise. Shipping terms are generally FOB shipping point, and title passes to the customer at the time and place of shipment or purchase by customers at a retail location. For consignment sales, title passes to the consignee concurrent with the consignee’s shipment to the customer. The customer has no cancellation privileges after shipment or upon purchase at retail locations, other than customary rights of return. For service revenue within the Company’s radio frequency applications, the Company recognizes revenue as the services are provided to the customer. The Company’s contracts typically have a single performance obligation, and do not contain a significant financing component.

Current wording

The Company recognizes sales when merchandise is shipped from a warehouse directly to wholesale customers (except in the case of a consignment sale). For consignment sales, the Company recognizes sales upon the consignee’s shipment to the customer. Postage and handling charges billed to customers are also recognized as sales upon shipment of the related merchandise. Shipping terms are generally FOB shipping point, and title passes to the customer at the time and place of shipment or purchase by customers at a retail location. For consignment sales, title passes to the consignee concurrent with the consignee’s shipment to the customer. The customer has no cancellation privileges after shipment or upon purchase at retail locations, other than customary rights of return. For service revenue within the Company’s radio frequency applications, the Company recognizes revenue as the services are provided to the customer. The Company’s contracts typically have a single performance obligation, and do not contain a significant financing component.

Previous wording

The Company recognizes deferred revenue for performance obligations not yet satisfied, primarily related to liquor sales not yet shipped. As of December 31, 2024, the Company had $52,779 in unsatisfied performance obligations that it expects to satisfy over the next 12 months.

Current wording

The Company recognizes deferred revenue for performance obligations not yet satisfied, primarily related to liquor sales not yet shipped. As of December 31, 2024, the Company had $226,066 in unsatisfied performance obligations that it expects to satisfy over the next 12 months, of which $25,366 related to shipment of liquor products and $200,700 related to the Company’s RF Specialties business

Previous wording

Goodwill- Goodwill represents the excess of acquisition cost over the fair value of the net tangible and intangible assets acquired. Goodwill is not amortized and is subject to annual impairment testing on or between annual tests if an event or change in circumstance occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value. In testing for goodwill impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, the Company concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it can conclude the assessment. If the Company concludes otherwise, the Company is required to perform a quantitative analysis to determine the amount of impairment. A quantitative analysis is performed at the reporting unit level by comparing the estimated fair value of a reporting unit with its respective carrying value to determine the amount of impairment, if any. The Company has determined that it has one reporting unit. During the years ended December 31, 2023, and 2022, no impairment expense was recognized.

Current wording

Goodwill- Goodwill represents the excess of acquisition cost over the fair value of the net tangible and intangible assets acquired. Goodwill is not amortized and is subject to annual impairment testing on or between annual tests if an event or change in circumstance occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value. In testing for goodwill impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, the Company concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it can conclude the assessment. If the Company concludes otherwise, the Company is required to perform a quantitative analysis to determine the amount of impairment. A quantitative analysis is performed at the reporting unit level by comparing the estimated fair value of a reporting unit with its respective carrying value to determine the amount of impairment, if any. The Company has determined that it has two reporting units. During the years ended December 31, 2024, and 2023, no impairment expense was recognized.