Company: SNBH
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001731122-25-001574
Chunk: 62

Company: SENTIENT BRANDS HOLDINGS INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 8
Chunk 62
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 standard setting bodies that
may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements
and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting
or that such impact will not be material to its financial position, results of operations, and cash flows when implemented.

    12

NOTE
3. INVENTORIES

Inventories
are stated at the lower of cost and net realizable value. Cost is determined using the moving average method and net realizable value
is the estimated selling price less costs of disposal in the ordinary course of business. The cost of inventories includes direct costs
plus shipping and packaging materials. At December 31, 2023 based on a sale quote received in April 2024 for its remaining inventory,
the Company recorded a charge of $63,477 to write down the inventory to its net realizable value of $150,000. The Company did not consummate
a sale of the inventory. As a result, on September 30, 2024, the Company recorded an additional charge of $150,000 reducing the value
of the inventory on hand to $0. As of June 30, 2025 and December 31, 2024, the Company product inventories are contained in a storage
and fulfilment center located at City Logistics in Fairfield, NJ.

As
discussed in Note 1, on May 12, 2025, through its wholly owned subsidiary AIG F&B, the Company
acquired $283,452 in inventory which is expected to be sold or used in production in the immediate future.

On July 5, 2025, the Company, through its 51%-owned subsidiary Aqua Emergency,
Inc. (NV), acquired inventory of $106,517 from Aqua Emergency, Inc. (FL). This inventory is all expected to be sold or used in production
in the immediate future. 

NOTE
4. CONVERTIBLE NOTES PAYABLE

Since
the change of control of the Company in May 2018, the Company received advances from Pure Energy 714 LLC, an unaffiliated entity, totaling
$240,803. On March 15, 2019, specific terms were reached on $70,757 of the advances pursuant to an unsecured convertible promissory note
entered into between the Company and Pure Energy 714 LLC, the terms call for repayment of the advances including