UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q

(Mark One)



|x |  | QUARTERLY REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- |  | ---------------------------------------------------------------------------------------



|For the quarterly period ended | March 31, 2016
|------------------------------ | --------------

or

|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|- |  | ----------------------------------------------------------------------------------------



|For the transition period from |  | to | 
|------------------------------ |  | -- | 



|Commission File No. | 000-52297
|------------------- | ---------



|FBEC Worldwide, Inc.                                  
|------------------------------------------------------
|(Exact name of registrant as specified in its charter)



|Wyoming                                                        |  | 06-1678089                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)





|1621 Central Ave Cheyenne, WY            | 82001     
|---------------------------------------- | ----------
|(Address of principal executive offices) | (Zip Code)









|(800) 785-4089                                      
|----------------------------------------------------
|(Registrant’s telephone number, including area code)





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. Yes x No  ̈



Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted 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 and post such files). YesxNo ̈



Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company”
in Rule 12b-2 of the Exchange Act.



|Large accelerated filer ̈ | Accelerated filer ̈        
|------------------------ | --------------------------
|Non-accelerated filer ̈   | Smaller reporting companyx



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ̈Nox



The number of shares outstanding
of the Registrant’s Common Stock as of May 26, 2016 was 174,847,666.














Table of Contents







|                                                                                              | Page
|--------------------------------------------------------------------------------------------- | ----
|                                                                                              |     
|PART I. FINANCIAL INFORMATION                                                                 | 3   
|Item 1. Financial Statements                                                                  | 3   
|Consolidated Balance Sheet                                                                    | 4   
|Consolidated Statement of Operations                                                          | 5   
|Consolidated Statement of Cash Flows                                                          | 6   
|Notes to Unaudited Consolidated Financial Statements                                          | 7   
|Item 2. Management’s
Discussion and Analysis of Financial Condition and Results of Operations | 9   
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                            | 11  
|Item 4. Controls and Procedures                                                               | 11  
|                                                                                              |     
|PART II - OTHER INFORMATION                                                                   |     
|Item 1. Legal Proceedings                                                                     | 12  
|Item 1A. Risk Factors                                                                         | 12  
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                           | 12  
|Item 3. Defaults Upon Senior Securities                                                       | 12  
|Item 4. Mine Safety Disclosures                                                               | 12  
|Item 5. Other Information                                                                     | 12  
|Item 6. Exhibits                                                                              | 12  
|Signatures                                                                                    | 13  













2






PART I. FINANCIAL INFORMATION



Item 1. Financial Statements.



FBEC WORLDWIDE, INC.

CONSOLIDATED BALANCE SHEET





|                                                                                                                                                   |  | March 31, |            |   | December 31, |  
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------- | ---------- | - | ------------ | -
|                                                                                                                                                   |  | 2016      |            |   | 2015         |  
|ASSETS                                                                                                                                             |  |           |            |   |              |  
|Current assets:                                                                                                                                    |  |           |            |   |              |  
|Cash                                                                                                                                               |  | $         | 13,270     |   |              | $
|Inventory                                                                                                                                          |  |           | 22,598     |   |              |  
|                                                                                                                                                   |  |           |            |   |              |  
|Total current assets                                                                                                                               |  |           | 35,868     |   |              |  
|Fixed assets:                                                                                                                                      |  |           |            |   |              |  
|Equipment, net                                                                                                                                     |  |           | 837        |   |              |  
|Intangible Asset                                                                                                                                   |  |           | 50,000     |   |              |  
|                                                                                                                                                   |  |           |            |   |              |  
|Total Assets                                                                                                                                       |  | $         | 86,705     |   |              | $
|                                                                                                                                                   |  |           |            |   |              |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                               |  |           |            |   |              |  
|                                                                                                                                                   |  |           |            |   |              |  
|Current liabilities:                                                                                                                               |  |           |            |   |              |  
|Accounts payables                                                                                                                                  |  | $         | 26,077     |   |              | $
|Accrued expenses                                                                                                                                   |  |           | 107,874    |   |              |  
|Convertible notes payable                                                                                                                          |  |           | 1,038,539  |   |              |  
|Current portion of Derivative Liabilities                                                                                                          |  |           | 1,014,923  |   |              |  
|                                                                                                                                                   |  |           |            |   |              |  
|Total current liabilities                                                                                                                          |  |           | 2,187,413  |   |              |  
|                                                                                                                                                   |  |           |            |   |              |  
|Long term Liabilities:                                                                                                                             |  |           |            |   |              |  
|Long Term portion of Derivative Liabilities                                                                                                        |  |           | 137,272    |   |              |  
|                                                                                                                                                   |  |           |            |   |              |  
|                                                                                                                                                   |  |           |            |   |              |  
|Total liabilities                                                                                                                                  |  | $         | 2,324,685  |   |              | $
|                                                                                                                                                   |  |           |            |   |              |  
|Stockholders' equity:                                                                                                                              |  |           |            |   |              |  
|Preferred stock, $0.001 par value, 20,000,000 shares authorized 1,000 and 10,000 shares respectively issued and
    outstanding                    |  |           | 1          |   |              |  
|Common stock, $0.001 par value, 2,200,000 and 5,000,000,000 shares authorized;174,847,666 and 2,244,413 shares respectively issued and outstanding |  |           | 174,848    |   |              |  
|Additional paid-in capital                                                                                                                         |  |           | 3,220,725  |   |              |  
|Retained earnings                                                                                                                                  |  |           | (5,633,554 | ) |              |  
|                                                                                                                                                   |  |           |            |   |              |  
|Total stockholders' equity:                                                                                                                        |  |           | (2,237,980 | ) |              |  
|                                                                                                                                                   |  |           |            |   |              |  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                         |  | $         | 86,705     |   |              | $





The accompanying notes are integral part of these financials statements.







3








FBEC WORLDWIDE, INC.

(FORMERLY FRONTIER BEVERAGE COMPANY INC.)

CONSOLIDATED STATEMENT OF OPERATIONS





|                                             |  | Three Month 
Ended 
March 31, 2016 |               |   | Three Month
 Ended 
March 31, 2015 |  
|-------------------------------------------- |  | ---------------------------------- | ------------- | - | ---------------------------------- | -
|                                             |  |                                    |               |   |                                    |  
|Net revenues:                                |  |                                    |               |   |                                    |  
|Sales                                        |  | $                                  | 1,328         |   |                                    | $
|Total net revenues                           |  |                                    | 1,328         |   |                                    |  
|                                             |  |                                    |               |   |                                    |  
|Cost of Goods Sold                           |  |                                    | 981           |   |                                    |  
|                                             |  |                                    |               |   |                                    |  
|Gross Income                                 |  |                                    | 347           |   |                                    |  
|Operating expenses:                          |  |                                    |               |   |                                    |  
|General, selling and administrative expenses |  |                                    | 70,905        |   |                                    |  
|Salaries and wages                           |  |                                    | 42,500        |   |                                    |  
|                                             |  |                                    |               |   |                                    |  
|Total operating expenses                     |  |                                    | 113,405       |   |                                    |  
|                                             |  |                                    |               |   |                                    |  
|Income (loss) from operations                |  |                                    | (113,058      | ) |                                    |  
|                                             |  |                                    |               |   |                                    |  
|Other income (expense)                       |  |                                    |               |   |                                    |  
|Interest expense                             |  |                                    | (10,678       | ) |                                    |  
|Loss on derivative liability                 |  |                                    | (35,772       | ) |                                    |  
|Change in fair value of derivatives          |  |                                    | (159,125      | ) |                                    |  
|                                             |  |                                    |               |   |                                    |  
|Total other income (expense)                 |  |                                    | (205,575      | ) |                                    |  
|                                             |  |                                    |               |   |                                    |  
|Income (loss) before income tax              |  |                                    | (318,633      | ) |                                    |  
|                                             |  |                                    |               |   |                                    |  
|Provision for income taxes                   |  |                                    | –             |   |                                    |  
|                                             |  |                                    |               |   |                                    |  
|Net income (loss)                            |  | $                                  | (318,633      | ) |                                    | $
|                                             |  |                                    |               |   |                                    |  
|Basic income (loss)  per share               |  | $                                  | (0.00         | ) |                                    | $
|Diluted income (loss) per share              |  | $                                  | (0.00         | ) |                                    | $
|Weighted average shares - Basic              |  |                                    | 209,419,027   |   |                                    |  
|Weighted average shares - Diluted            |  |                                    | 1,736,233,325 |   |                                    |  









The accompanying notes are integral part of these financials statements.





4




FBEC WORLDWIDE,
INC.

(FORMERLY FRONTIER BEVERAGE COMPANY INC.)

CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                 |  | Three Months Ended 
March 31, 2016 |          |   | Three Months Ended 
March 31, 2015 |  
|-------------------------------------------------------------------------------- |  | ---------------------------------- | -------- | - | ---------------------------------- | -
|CASH FLOWS FROM OPERATING ACTIVITIES                                             |  |                                    |          |   |                                    |  
|                                                                                 |  |                                    |          |   |                                    |  
|Net income ( loss)                                                               |  | $                                  | (318,633 | ) |                                    | $
|Adjustments to reconcile net income to net cash provided by operating activities |  |                                    |          |   |                                    |  
|Loss on Derivative Liabilities                                                   |  |                                    | 31,963   |   |                                    |  
|Common Stock issued for signing bonus                                            |  |                                    | –        |   |                                    |  
|Common Stock issued for services                                                 |  |                                    | –        |   |                                    |  
|Gain on sale of subsidiary                                                       |  |                                    |          |   |                                    |  
|Amortization of debt discount                                                    |  |                                    | 127,162  |   |                                    |  
|Gain (loss) on extinguishment of liabilities                                     |  |                                    | –        |   |                                    |  
|Loss on Debt converted to Stock                                                  |  |                                    | 35,772   |   |                                    |  
|                                                                                 |  |                                    |          |   |                                    |  
|Changes in operating Assets and Liabilities:                                     |  |                                    |          |   |                                    |  
|Decrease (increase) in:                                                          |  |                                    |          |   |                                    |  
|Inventory                                                                        |  |                                    | (5,755   | ) |                                    |  
|Increase (decrease) in:                                                          |  |                                    |          |   |                                    |  
|Accounts Payable                                                                 |  |                                    | (390     | ) |                                    |  
|Accrued Expenses                                                                 |  |                                    | 33,679   |   |                                    |  
|                                                                                 |  |                                    |          |   |                                    |  
|Net Cash Provided (Used) in Operating Activities                                 |  |                                    | (96,202  | ) |                                    |  
|                                                                                 |  |                                    |          |   |                                    |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                             |  |                                    |          |   |                                    |  
|                                                                                 |  |                                    |          |   |                                    |  
|Purchase Equipment                                                               |  |                                    | (837     | ) |                                    |  
|                                                                                 |  |                                    |          |   |                                    |  
|Net Cash Provided (Used) by Investing Activities                                 |  |                                    | (837     | ) |                                    |  
|                                                                                 |  |                                    |          |   |                                    |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                             |  |                                    |          |   |                                    |  
|                                                                                 |  |                                    |          |   |                                    |  
|Proceeds from convertible debt                                                   |  |                                    | 65,000   |   |                                    |  
|                                                                                 |  |                                    |          |   |                                    |  
|Net Cash Provided by Financing Activities                                        |  |                                    | 65,000   |   |                                    |  
|                                                                                 |  |                                    |          |   |                                    |  
|                                                                                 |  |                                    |          |   |                                    |  
|NET INCREASE IN CASH                                                             |  |                                    | (32,039  | ) |                                    |  
|                                                                                 |  |                                    |          |   |                                    |  
|CASH AT BEGINNING OF PERIOD                                                      |  |                                    | 45,309   |   |                                    |  
|                                                                                 |  |                                    |          |   |                                    |  
|CASH AT END OF PERIOD                                                            |  | $                                  | 13,270   |   |                                    | $
|                                                                                 |  |                                    |          |   |                                    |  
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                               |  |                                    |          |   |                                    |  
|Interest paid                                                                    |  |                                    | –        |   |                                    |  
|Income taxes paid                                                                |  |                                    | –        |   |                                    |  
|                                                                                 |  |                                    |          |   |                                    |  
|NON-CASH INVESTING AND FINANCING ACTIVITIES:                                     |  |                                    |          |   |                                    |  
|Common stock issued for conversion of debt                                       |  | $                                  | 36,372   |   |                                    |  
|Resolution of derivative liabilities                                             |  |                                    |          |   |                                    |  
|Common stock issued in reverse merger                                            |  |                                    |          |   |                                    |  
|Accounts payable converted to convertible debt                                   |  |                                    |          |   |                                    |  
|Related party liabilities converted to debt                                      |  |                                    |          |   |                                    |  
|Founders shares                                                                  |  |                                    |          |   |                                    |  
|Common shares issued and held in escrow                                          |  |                                    |          |   |                                    |  
|Common stock issued for settlement of liabilities                                |  |                                    |          |   |                                    |  
|Common stock issued for settlement of liabilities to related parties             |  |                                    |          |   |                                    |  
|Debt discount due to derivative liabilities                                      |  |                                    | 354,000  |   |                                    |  



The accompanying notes are an integral part of these consolidated financial statements.





5








FBEC WORLDWIDE, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS





NOTE 1 – BASIS OF PRESENTATION,
GOING CONCERN AND CORRECTION OF PRIOR YEAR INFORMATION



Interim Financial Reporting



While the information presented in the accompanying
interim financial statements is unaudited, it includes all adjustments, which are, in the opinion of management, necessary to present
fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with generally
accepted accounting principles in the United States of America ("GAAP"). All adjustments are of a normal, recurring nature.
Interim financial statements and the notes thereto do not contain all of the disclosures normally found in year-end audited financial
statements and these Notes to Financial Statements are abbreviated and contain only certain disclosures related to the three month
period ended March 31, 2016. Notes to the financial statements which would substantially duplicate the disclosure contained in
the audited financial statements for fiscal 2015 as reported in the Form 10-K have been omitted. It is suggested that these interim
financial statements be read in conjunction with our audited financial statements and related notes for the year ended December
31, 2015 included in our Form 10-K filed with the Securities Exchange Commission on May 19, 2016. Operating results for the three
months ended March 31, 2016 are not necessarily indicative of the results that can be expected for the period from January 1, 2016
through December 31, 2016.



Earnings Per Share



We present both basic and diluted earnings
per share (“EPS”) amounts in our financial reporting.  Basic EPS excludes dilution and is computed by dividing
income available to Common Stock holders by the weighted-average number of Common Stock outstanding for the period. Diluted
EPS reflects the maximum potential dilution that could occur from our convertible debt.  Potential dilutive shares are excluded
from the calculation if they have an anti-dilutive effect in the period. During the three months ended March 31, 2016, the dilutive
effect of the shares underlying the outstanding convertible debt of the Company was 1,736,233,325 and a reduction to net income
of $159,125.



Going Concern



The accompanying unaudited consolidated financial
statements have been prepared in conformity with GAAP, which contemplates continuation of the Company as a going concern, which
is dependent upon the Company's ability to establish itself as a profitable business. At March 31, 2016, the Company has an accumulated
deficit of $5,633,554 and has a working capital deficit of $2,151,545. These matters raise substantial doubt about the Company's
ability to continue as a going concern. These unaudited consolidated financial statements do not include any adjustments that might
result from the outcome of these uncertainties, nor do they include adjustments relating to the recoverability and realization
of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation. The
Company’s ability to continue in business is dependent upon obtaining sufficient financing or attaining profitable operations.
However, there can be no assurance that management will be successful in obtaining additional funding or in attaining profitable
operations.



NOTE 2 – STOCKHOLDERS’ DEFICIT



The Company is authorized to issue up to 2,200,000,000
shares of common stock at $0.001 par value per share and 20,000,000 shares of preferred stock at $0.001 par value per share. As
of March 31, 2016 and December 31, 2015, the Company had 174,847,666 and 2,244,413 shares of common stock and 1,000 shares of Series
A preferred stock issued and outstanding.



NOTE 3 – RELATED PARTIES



As of March 31, 2016 and December 31, 2015,
the Company has outstanding advances to former officers and directors aggregating $22,675. The advances are unsecured, due on demand
and bear no interest.



MIDAM Ventures LLC purchased 150,.000,000
restricted common shares from Robert Sand on February 26, 2016 and returned 100,000,000 shares for cancellation on February 29,
2016 with no consideration from the Company.





6








NOTE 4 – CONVERTIBLE NOTES PAYABLE



At March 31, 2016 and December 31, 2015, convertible notes payable
consisted of the following:



|                           |  | March 31, 2016 |           |   | December 31, 2015 |  
|-------------------------- |  | -------------- | --------- | - | ----------------- | -
|Convertible notes payable  |  | $              | 1,636,669 |   |                   | $
|Unamortized debt discounts |  | $              | (460,858  | ) |                   | $
|Total                      |  | $              | 1,175,811 |   |                   | $



The outstanding convertible notes bear no interest,
are due on demand and are convertible into common stock at variable rates based upon discounts to the market price of the common
stock. The Company identified embedded derivatives related to the outstanding convertible notes. These embedded derivatives
included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company
record the fair value of the derivatives as of the inception date of the convertible notes and to adjust the fair value as of each
subsequent balance sheet date. At March 31, 2016, the aggregate fair value of the outstanding derivative liabilities was determined
to be $1,152,195. he fair value of the embedded derivatives was determined using the Black Scholes Option Pricing Model
based on the following assumptions:



The fair	 value of the outstanding embedded
derivatives of $1,152,195 at March 31, 2016 was determined using the Black Scholes Option Pricing Model with the following assumptions:



|Dividend yield:               |  |  | -0-     | %
|----------------------------- |  |  | ------- | -
|Market price of common stock: |  |  | $0.0195 |  
|Expected volatility:          |  |  | Maximum |  
|Risk free rate:               |  |  | 0.59    | %



At March 31, 2016, the Company adjusted the
recorded fair value of the derivative liability to market resulting in non-cash, non-operating loss of $479,374 for the three months
ended March 31, 2016.



Notes in default and included in Current Notes
Payable were $845,832 at March 31, 2016.



NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS



ASC 825-10 defines fair value as the price
that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded
at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions
that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk
of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs
and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be
used to measure fair value:



Level 1 - Quoted prices in active markets for
identical assets or liabilities.



Level 2 - Observable inputs other than Level
1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent
transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived
principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.







7






Level 3 - Unobservable inputs to the valuation
methodology that are significant to the measurement of fair value of assets or liabilities.



To the extent that valuation is based on models
or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain
cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure
purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the
lowest level input that is significant to the fair value measurement.



Items recorded or measured at fair value on
a recurring basis in the accompanying consolidated financial statements consisted of the following items as of March 31, 2015
and December 31, 2014:



|                       |  | Total |           |  | Quoted Prices 
    in Active
    Markets for
    Identical 
    Assets
    (Level 1) |   |   | Significant Other
Observable Inputs (Level 2) |  |   | Significant
    Unobservable
    Inputs
    (Level 3) | 
|---------------------- |  | ----- | --------- |  | ------------------------------------------------------------------------------------ | - | - | --------------------------------------------- |  | - | ----------------------------------------------------- | 
|March 31, 2016         |  |       |           |  |                                                                                      |   |   |                                               |  |   |                                                       | 
|                       |  |       |           |  |                                                                                      |   |   |                                               |  |   |                                                       | 
|Liabilities:           |  |       |           |  |                                                                                      |   |   |                                               |  |   |                                                       | 
|Derivative liabilities |  | $     | 1,152,195 |  |                                                                                      | $ | – |                                               |  | $ | –                                                     | 
|                       |  |       |           |  |                                                                                      |   |   |                                               |  |   |                                                       | 
|December 31, 2015      |  |       |           |  |                                                                                      |   |   |                                               |  |   |                                                       | 
|Liabilities:           |  |       |           |  |                                                                                      |   |   |                                               |  |   |                                                       | 
|Derivative liabilities |  | $     | 993,070   |  |                                                                                      | $ | – |                                               |  | $ | –                                                     | 



The derivative liabilities are measured
at fair value using the Black Scholes Option Pricing Model including quoted market prices and estimated volatility factors based
on historical prices for the Company’s common stock and are classified within Level 3 of the valuation hierarchy.



The following table provides a summary of changes
in fair value of the Company’s Level 3 financial liabilities for the three months ended March 31, 2015:



|                           |  | Derivative
 Liabilities |          
|-------------------------- |  | ----------------------- | ---------
|Balance, December 31, 2015 |  | $                       | 993,070  
|Additions at fair value    |  |                         | 637,499  
|Change in fair value       |  |                         | (479,374 
|Balance, March 31, 2016    |  | $                       | 1,152,195



NOTE 6 – NOTES PAYABLE



In February 2016, the Company
entered into a convertible debt agreement with a principal amount of $40,000 with 0% interest per annum. This note is convertible
at a 38% discount to the lowest market price of the 15 days preceding the conversion request. This note becomes convertible at
or after maturity. The default interest rate is 12% per annum.



In March 2016, the Company
entered into a convertible debt agreement with a principal amount of $25,000 with 10% interest per annum. This note is convertible
at a 70% discount to the lowest market price of the 20 days preceding the conversion request. These notes are convertible at any
time at the option of the holder. The default interest rate is 12% per annum.



NOTE 7– SUBSEQUENT EVENTS



On April 4, 2016, Jason
Spatafora resigned from all positions. The Company entered into an employment agreement with Jeffrey Greene to become the Chief
Executive Officer. The term of the agreement is one year with a base salary of $10,000 per month. Mr. Greene is to receive 50,000,000
restricted common shares and 150 Series A Preferred shares are to be transferred from their current holder. An additional bonus
of 10,000,000 common shares will be due for each $500,000 in revenue up to $1,000,000 the Company receives during the term of the
agreement.











8








ITEM 2. Management’s
Discussion and Analysis of Financial Condition and Results of Operations



We urge you to read the following discussion
in conjunction with management’s discussion and analysis contained in our Annual Report on Form 10-K for the year ended December
31, 2015, as well as with our unaudited financial statements and the notes thereto included elsewhere herein.



CAUTION REGARDING FORWARD-LOOKING STATEMENTS



Our prospects are subject to uncertainties
and risks. In this Quarterly Report on Form 10-Q, we make forward-looking statements in this Item 2 and elsewhere that also involve
substantial uncertainties and risks. These forward-looking statements are based upon our current expectations, estimates and projections
about our business and our industry, and reflect our beliefs and assumptions based upon information available to us at the date
of this report. In some cases, you can identify these statements by words such as “if,” “may,” “might,”
“will, “should,” “expects,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” “potential,” “continue,” and other similar terms. These
forward-looking statements include, among other things, projections of our future financial performance and our anticipated growth,
descriptions of our strategies, our product and market development plans, and other objectives, expectations and intentions, the
trends we anticipate in our business and the markets in which we operate, and the competitive nature and anticipated growth of
those markets.



We caution readers that forward-looking statements
are predictions based on our current expectations about future events. These forward-looking statements are not guarantees of future
performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Our actual results, performance
or achievements could differ materially from those expressed or implied by the forward-looking statements as a result of a number
of factors, including but not limited to the risks and uncertainties discussed in our other filings with the SEC or our sales results
or changes in costs associated with ingredients for our products, manufacture of our products, distribution and sales. We undertake
no obligation to revise or update any forward-looking statement for any reason.



Overview



FBEC Worldwide is an innovative beverage company dedicated to offering
proprietary products focused towards significant target markets, both domestic and abroad. We are committed to increasing our market
size and scope through the optics of creative marketing and most importantly customer satisfaction. Our growth strategies will
focus on a number of major initiatives including, unique branding opportunities that will be targeted at key demographic groups,
and to develop strong community and distributor relationships.



As we look ahead FBEC Worldwide will develop and build name brands
focused on strong rates of growth within key fundamental consumer groups. Our company is dedicated to becoming a leading developer
of name brand beverage alternatives geared specifically towards large, significantly important demographics within major markets.



The Company's Common Stock is quoted on the
OTC Market Groups, Inc. OTCQB (the “OTCQB”) under the symbol "FBEC."



Basis of presentation and going concern uncertainty



The accompanying unaudited condensed consolidated
financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America
(“GAAP”), which contemplates continuation of the Company as a going concern, which is dependent upon the Company's
ability to establish itself as a profitable business. At March 31, 2016, the Company has an accumulated deficit of $5,633,554 and
has a working capital deficit of $2,128,870. The Company’s ability to continue in business is dependent upon obtaining sufficient
financing or attaining profitable operations; however, there can be no assurance that management will be successful in obtaining
additional funding or in attaining profitable operations, therefore these matters raise substantial doubt about the Company's ability
to continue as a going concern. These unaudited condensed consolidated financial statements do not include any adjustments that
might result from the outcome of these uncertainties, nor do they include adjustments relating to the recoverability and realization
of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation.







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Critical Accounting Policies



There have been no changes from the Critical
Accounting Policies described in the Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 19, 2017.



Liquidity and Capital Resources



We began current operations in February 2014
and have yet to attain a level of operations which allows us to meet our current overhead requirements. We do not contemplate attaining
profitable operations prior to 2017 and there is no assurance that such an operating level will ever be achieved. We will be dependent
upon obtaining additional financing in order to adequately fund working capital, infrastructure, production expenses and significant
marketing related expenditures to gain market recognition, so that we can achieve a level of revenue adequate to support our cost
structure, none of which can be assured. These factors raise substantial doubt about our ability to continue as a going concern
and the accompanying financial statements do not include any adjustments related to the recoverability or classification of asset
carrying amounts or the amounts and classification of liabilities that may result should we be unable to continue as a going concern.



As of March 31, 2016, the Company’s cash
balance was $13,270. Outstanding debt as of March 31, 2016 totaled $2,324,685, which is attributable accounts payable and accruals
of $133,951, derivative liability $1,152,213 and loans and advances of $1,038,521. The Company’s working capital deficit
as of March 31, 2016 was $2,128,270.



The Company will need to raise additional capital
to expand operations to the point at which the Company can achieve profitability. The terms of financing that may be raised may
not be on terms acceptable by the Company. If adequate funds cannot be raised outside of the Company, the Company’s current
stockholders may need to contribute funds to sustain operations. The Company does not have any agreements with any of its stockholders
to provide any capital and there can be no assurance that any stockholder would be able or willing to fund the Company's continued
operations.



Results of Operations



For the three months ended March 31, 2015 and
2016, the Company’s revenue totaled $0 and $1,328, for which its respective cost of revenues totaled $0 and $981.



For the three months ended March 31, 2015 and
2016, the Company had operating expenses totaling $39,546 and $113,405, respectively. These costs were primarily from wages and
consulting fees.



Off Balance Sheet Arrangements



We do not have any off balance sheet arrangements.



Inflation



The Company believes that inflation has not
had, and is not expected to have, a material effect on our operations.



Climate Change



We believe that neither climate change, nor
governmental regulations related to climate change, have had, or are expected to have, any material effect on our operations.



Recently Issued Accounting Pronouncements



There are no recently issued accounting pronouncements
that are expected to have a material impact on the unaudited condensed consolidated financial statements or notes thereto.







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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK



Our Company is a “smaller reporting company”
as defined by Rule 12b-2 of the Exchange Act, and as such, is not required to provide the information required under this Item.



ITEM 4. CONTROLS AND PROCEDURES



Evaluation of Disclosure Controls and Procedures



Pursuant to Rule 13a-15(b) under the Securities
Exchange Act of 1934 ("Exchange Act"), Robert Sand, the Company's President and Principal Executive Officer and Treasurer
and Principal Accounting Officer ("CFO") (the Company’s principal financial and accounting officer), initially
evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the
Exchange Act) as of the end of the period covered by this report.



Based upon that initial evaluation, Mr. Sand
concluded, upon consultation with prior management, that the Company’s disclosure controls and procedures were not effective
as of March 31, 2015 to ensure that information required to be disclosed by the Company in the reports that the Company 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, and that such information is accumulated and communicated to the Company’s management, including the Company’s
President/CFO, as appropriate, to allow timely decisions regarding required disclosure, due to the material weaknesses described
below.



A material weakness is a deficiency, or a combination
of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement
of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.



The Company believes its weaknesses in internal
controls and procedures is due to the Company's lack of sufficient personnel with expertise in the area of SEC, GAAP and tax accounting
procedures. In addition, the Company lacks the personnel structure, size and complexity to segregate duties sufficiently for proper
controls. The Company has not implemented a formal system of internal control that provides for multiple levels of supervision
and review.



The Company is currently without sufficient
funds to hire additional personnel with expertise in these areas and to segregate duties for proper controls and until such time
as additional personnel are hired, the Company believes that it will continue to recognize a weakness in its internal controls
and procedures. The Company currently engages outside consultants to assist in the areas of tax and accounting procedures.



The Company plans to hire additional personnel
to properly implement a control structure when and if the appropriate funds become available. In the meantime, the Chief Executive
Officer/Financial Officer will continue to perform or supervise the performance of additional accounting and financial analyses
and other post-closing procedures including detailed validation work with regard to balance sheet account balances, additional
analysis on income statement amounts and managerial review of all significant account balances and disclosures, to ensure that
the Company's Annual Report and the financial statements forming part thereof are in accordance with GAAP.



Changes in Internal Control Over Financial Reporting



During the three months ended March 31, 2016,
there were no changes in our internal control over financial reporting that occurred during 2016 that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.







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Limitations on the Effectiveness of Controls



Our disclosure controls and procedures provide
our principal executive and financial officer with reasonable assurances that our disclosure controls and procedures will achieve
their objectives. However, our management does not expect that our disclosure controls and procedures or our internal control over
financial reporting can or will prevent all human error. A control system, no matter how well designed and implemented, can provide
only reasonable, not absolute, assurance that the objectives of the control system are met. Furthermore, the design of a control
system must reflect the fact that there are internal resource constraints, and the benefit of controls must be weighed relative
to their corresponding costs. Because of the limitations in all control systems, no evaluation of controls can provide complete
assurance that all control issues and instances of error, if any, within our company are detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that breakdowns can occur due to human error or mistake. Additionally,
controls, no matter how well designed, could be circumvented by the individual acts of specific persons within the organization.
The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and
there can be no assurance that any design will succeed in achieving its stated objectives under all potential future conditions.



Management is aware that there is a lack of
segregation of duties at the Company due to the fact that the Company has only one director and executive officer dealing with
general administrative and financial matters. This constitutes a significant deficiency in the internal controls. Management has
decided that considering the officer/director involved, the control procedures in place, and the outsourcing of certain financial
functions, the risks associated with such lack of segregation were low and the potential benefits of adding additional employees
to clearly segregate duties did not justify the expenses associated with such increases. Management plans to re-evaluate this situation
periodically. In light of the Company’s current cash flow situation, the Company does not intend to increase staffing to
mitigate the current lack of segregation of duties within the general administrative and financial functions.



PART II - OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS



There are no material pending legal or governmental
proceedings relating to our Company or its properties to which we are a party, and to our knowledge, there are no material proceedings
to which any of our directors, executive officers, affiliates or shareholders are a party adverse to us or have a material interest
adverse to us.



ITEM 1A. RISK FACTORS



Our Company is a “smaller reporting company”
as defined by Rule 12b-2 of the Exchange Act, and as such, is not required to provide the information required under this Item.



ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES
AND USE OF PROCEEDS



There are no unreported sales of unregistered
securities during the three months ended March 31, 2016.



ITEM 3. DEFAULTS UPON SENIOR SECURITIES



None.



ITEM 4. MINE SAFETY DISCLOSURES



Not applicable.



ITEM 5. OTHER INFORMATION



None.



ITEM 6. EXHIBITS



The following exhibits are filed with this
Quarterly Report on Form 10-Q or are incorporated by reference as described below.



|Exhibit | Description                                                                                                          
|------- | ---------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                      
|31.1    | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14a/Rule 14d-14(a)*
|32.1    | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350*     
|101.1   | Interactive data files pursuant to Rule 405 of Regulation S-T**                                                      



* Filed herewith.

** To be filed by amendment





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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.



|             |                                                                                                                                            |                        
|------------ | ------------------------------------------------------------------------------------------------------------------------------------------ | -----------------------
|May 26, 2016 | FBEC WORLDWIDE, INC.                                                                                                                      
|             |                                                                                                                                            |                        
|             | By:                                                                                                                                        | /s/
     Jeffrey Greene
|             | Jeffrey Greene                                                                                                                            
|             | President and Treasurer
        (Principal Executive Officer, Principal Financial and Accounting
        Officer and Authorized Signatory)













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