EDGAR 10-K Filing

Company CIK: 1295514
Filing Year: 2024
Filename: 1295514_10-K_2024_0001493152-24-025571.json

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ITEM 1. BUSINESS
ITEM 1. BUSINESS
Business Overview
MDwerks, Inc. (the “Company,” “MDwerks,” “we,” “us,” or “our”), 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. In December 2023, the Company completed two acquisitions of business as outlined 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.
Acquisitions
Two Trees
On February 13, 2023, we entered into a Merger Agreement (the “Merger Agreement”), by and between the Company, MD-TT Merger Sub, Inc., a wholly owned subsidiary of the Company (“Merger Sub”), and Two Trees Beverage Co. (“Two Trees”). The Company, Merger Sub and Two Trees may be referred to herein collectively as the “Parties” and separately as a “Party.”
In consideration of the Merger Agreement, at the effective time of the Merger, each of the holders of Two Trees stock, subject to certain exceptions set forth in the Merger Agreement, had the right to convert all of the shares of Two Trees stock into a total of 60,000,000 shares of Company common stock, which shall be apportioned between the Two Trees stockholders, pro rata, based on the number of shares of Two Trees stock held by each of the Two Trees stockholders as of the closing of the Merger (the “Merger Consideration”).
Amendment No. 1 to Two Trees Merger Agreement
On February 16, 2023, the Company, Merger Sub and Two Trees entered into Amendment No. 1 to Merger Agreement (“Amendment No. 1”). Pursuant to the terms of Amendment No. 1, the Merger Agreement was amended to reflect Two Trees’ authorized, issued and outstanding capital stock as of the effective date of the Merger Agreement, which capital stock consisted of 15,000,000 shares of common stock, par value $0.0001 per share, of which 9,999,604.69 shares were issued and outstanding as of the effective date of the Merger Agreement, and 3,529,500 shares of preferred stock, par value $0.0001 per share, of which 2,045,672.16 shares were issued and outstanding as of the effective date of the Merger Agreement. In addition, pursuant to the terms of Amendment No. 1, the Merger Agreement was amended to replace Mr. Ragazzo with James Cassidy, Two Trees’ Chairman of the Board as the party to indemnify the Company for certain breaches of the representations and warranties of Two Trees.
Clawback Policy
On January 1, 2024, the Company’s Board of Directors adopted a Compensation Recovery Policy (the “Policy”). The Policy is intended to further the Company’s pay-for-performance philosophy and to comply with applicable law by providing for the reasonably prompt recovery of certain incentive-based compensation received by executive officers in the event of an accounting restatement. The Policy is intended to comply with, and will be interpreted in a manner consistent with, Section 10D of the Exchange Act, with Exchange Act Rule 10D-1 and with the Nasdaq listing standards.
Pursuant to the Policy, if the Company is required to prepare an accounting restatement due to the material noncompliance by the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (an “Accounting Restatement”), then the Compensation Committee must determine the Excess Compensation (as hereinafter defined), if any, that must be recovered. The Company’s obligation to recover Excess Compensation is not dependent on if or when the restated financial statements are filed. The Company must recover Excess Compensation reasonably promptly and executive officers are required to repay Excess Compensation to the Company, subject to the terms of the Policy.
The Policy applies to certain incentive-based compensation that is received on or after January 1, 2024 during the three completed fiscal years immediately preceding the Accounting Restatement determination date, as provided in the Policy (the “Covered Period”) while the Company has a class of securities listed on a national securities exchange. The incentive-based compensation is considered “Clawback Eligible Incentive-Based Compensation” if the incentive-based compensation is received by a person after such person became an executive officer and the person served as an executive officer at any time during the performance period to which the incentive-based compensation applies. The “Excess Compensation” that is subject to recovery under the Policy is the amount of Clawback Eligible Incentive-Based Compensation that exceeds the amount of Clawback Eligible Incentive-Based Compensation that otherwise would have been received had such Clawback Eligible Incentive-Based Compensation been determined based on the restated amounts (this is referred to in the listing standards as “erroneously awarded incentive-based compensation”).
Overview of the Business of Two Trees
The Two Trees Story
We produce a variety of aged alcoholic beverages using an innovative rapid-aging system. This scalable technology results in all-natural, high-quality products, efficiently produced, with a reduced environmental impact. Our products are nearly indistinguishable from those that are traditionally aged.
Deep in Appalachian Mountain country, we created a proprietary process that mirrors and accelerates the natural aging process that occurs when alcohol is aged in wooden barrels over time. The true art of our craft spirits lives within the balance between the grain selection, local water, and the full-bodied flavors from our toasted wood chip varieties. Our wood chips are selected to pair with specific grains and toasted to just the right char, bringing rich flavor profiles to life with a hint of smoke.
Brands
Two Trees has built a portfolio of more than 30 spirit brands that are refined and capable of being produced in a fraction of the time it takes to produce traditional whiskies using the traditional production process discussed below. Three of Two Trees portfolio brands received 2022 SIP Awards, with its Two Trees Carolina Peach Whiskey receiving a Platinum Award, Two Trees Sea Salted Caramel Whiskey receiving a Gold Award and Two Trees Old Fashioned RTD receiving a Gold Award. Also, two of its portfolio brands received 2022 50 Best Awards with Two Trees Peanut Butter Whiskey and Two Trees Sea Salted Caramel Whiskey receiving Best Flavored Whiskey awards. Also, Two Trees received the Best of Ashville 2023 award for its sustainable matured, award-winning bourbon, whiskey, flavored whiskey and vodka.
Our full current flavored whisky brand portfolio includes the following:
SEA SALTED CARAMEL - a sweet soft caramel paired with real sea salt and aged in slow toasted Appalachian white oak.
BATCH 314 - A long toasting of Tennessee white oak brings out a soft caramel flavor with notes of vanilla and spice.
CRISP APPLE - Tart flavors of fresh picked green apples and the sweet charred profile of Appalachian white oak blend easily.
CANDY APPLE - Vanilla profile of heavy toasted Tennessee white oak adds to the caramel dipped green
apple flavor.
CINNAMON SPICE - Aged in charred and toasted Missouri white oak, with the cinnamon spice and the
sweet essence of red hots candy.
MICHIGAN CHERRY - Made with sweet corn to balance and compliment the tartness of the Montmorency cherry profile.
CAROLINA PEACH - Made with delicious South Carolina peaches and natural flavors to compliment the sweet charred flavor profile of Appalachian white oak.
GOLDEN HONEY - Flavor reminiscent of toasted Appalachian white oak, and the essence of fresh
honeycomb and the taste of natural honey.
SCORCHED BROWN SUGAR - Flavor reminiscent of charred Appalachian white oak, real brown sugar and natural vanilla flavor.
PEANUT BUTTER - A taste reminiscent of Appalachian white oak with rich smooth notes of peanut butter.
Our ready to drink portfolio includes the following:
OLD FASHIONED - Plush, dignified cocktail of muddled sugar, whiskey, bitters and Appalachian Mountain spring water blended with toasted Missouri and Tennessee white oak is sleek and ready to pour.
MANHATTAN - Austere rye whiskey with a rich touch of both sweet and dry vermouths sculpted with toasted Missouri and Tennessee white oak creates a glossy, mirror like smoothness, made effortlessly.
Our Tim Smith product portfolio includes the following:
CLIMAX MOONSHINE - The original recipe is distilled from corn, rye, and barley malt. Clean and natural tasting with a subtle sweetness and bold defiance.
CLIMAX WOOD-FIRED WHISKEY - This isn’t your ordinary American bourbon-style whiskey its Tim Smith’s century-old moonshine recipe aged and filtered with toasted oak and maple wood imparting color and revolutionary flavors. The final process allows the whiskey to cool in Oak containers and the result is Tim Smith’s revolutionary Climax Whiskey - Made to be in a Class of its Own.
CLIMAX FIRE NO. 32 - Cinnamon Spice Moonshine using Tim Smith’s original pot-distilled recipe. Bold, Hot and Smooth. As a volunteer fire chief in Climax, VA, Tim created this moonshine as a tribute to firefighters across the country.
TIM SMITH SOUTHERN RESERVE BOURBON - Amber in appearance. Caramelized sugar and vanilla melt into a soft wheat. It finishes with a sweet honey profile.
TIM SMITH SOUTHERN RESERVE RYE - Golden amber in appearance. Notes of spicy toasted American oak give way to the gentle warm finish of sweet rye and caramel.
TIM SMITH SOUTHERN RESERVE WHISKEY - Reddish amber in appearance. Sweet corn and mild rye blend with smoky, caramelized oak. It finishes with earthy, nutty notes.
We also produce a wood crafted portfolio American whiskey. This blend is colored and flavored with Appalachian white oak chips. This brings out a soft caramel flavor with notes of vanilla and spice. The charred white oak chips soften this spirit to make it smooth and easy to drink.
Patent and Trademarks - Two Trees
We, primarily through our subsidiaries, hold or have rights to use various service marks, trademarks and trade names we use in the operation of our businesses that we deem particularly important to each of our products. As of the date of this report, we had 12 trademarks for our products and services as follows:
Trademark
Registration Date
Reg. Number
Class
TIM SMITH’S CLIMAX MOONSHINE
3/21/2017
5,166,624
Class 21: portable coolers
Class 25: shirts, caps
Class 33: distilled spirits
CLIMAX MOONSHINE
10/20/2015
4,834,895
Classes 2, 13, 23, 29, 30, 33, 40 and 50: drinking glasses and drinking flasks
Classes 22 and 39: shirts and hats
Classes 47 and 49: distilled spirits
FIRE NO 32
2/21/2017
5,147,397
Class 33: distilled spirits
CLIMAX WHISKEY
8/01/2017
5,257,114
Class 33: distilled spirits
CLIMAX WOOD-FIRED
8/22/2017
5,272,047
Class 33: distilled spirits
TIM SMITH SOUTHERN RESERVE
11/26/2019
5,922,109
Class 33: distilled spirits, whiskey
SNARLY YOW
1/14/2020
5,963,107
Class 33: distilled spirits, whiskey
TWO TREES
3/24/2020
6,020,545
Class 33: Alcoholic beverages except beers, not wine based; Distilled spirits; Whiskey
OWL HEAD
6/16/2020
6,079,608
Class 33: distilled spirits; whiskey
WAMPUS CAT
6/16/2020
6,079,610
Class 33: distilled spirits; whiskey
MOON CHASERS
6/12/2022
6,785,148
Class 33: alcoholic beverages, namely, ready-to-drink cocktails
SUSTAINABLY - MATURED
11/14/2023
Class 40: Alcohol distillery services; Spirits distillery services; Whisky distillery services
Two Trees has the followings patents:
Patent
Issue date
Patent Number
Expiration Date
System & method for the rapid aging of a distilled ethyl alcohol with rf energy and wood material supporting platform
April 18, 2023
US 11,629,317 B2
January 21, 2034
System & method for the rapid aging of a distilled ethyl alcohol with rf energy and wood material supporting platform
April 30, 2024
US 11,970,678 B2
January 21, 2034
Overview of the Business of RF Specialties
On January 19, 2023, we entered into an Exchange Agreement (the “Exchange Agreement”) by and between the Company, RFS and Keith A. Mort as the sole member of RFS. Pursuant to the terms of the Exchange Agreement, the Company agreed to acquire from Mr. Mort, and Mr. Mort agreed to sell to the Company, 100% of the equity interests and membership interests of RFS, in exchange for the issuance by the Company to Mr. Mort of 7,500,000 shares of the Company’s common stock (the “Exchange”). Immediately following the Exchange, RFS became a wholly owned subsidiary of the Company.
RFS is engaged in the business of developing sustainable radio frequency (RF) applications, and for over 12 years, has addressed the challenges faced by companies by implementing automated radio frequency technology. RFS has developed a system and method for the rapid aging of distilled spirits with RF energy that reduces energy and production costs thus increasing the speed to market for distilled beverages when compared to traditional technologies.
Patent and Trademarks - RF Specialties
RF Specialties holds or has the rights to use patents we use in the operation of our businesses that we deem particularly important to each of our products. As of the date of this report, we had the following patents:
Patent
Issue Date
Patent Number
Expiration Date
Systems, apparatuses, and methods for molecular targeting and separation of feedstock fluids
June 11, 2019
US 10315126 B2
November 22, 2036
Employees
As of December 31, 2023, the Company had twelve full-time and two part-time employees. None of our employees are covered by collective bargaining agreements and we consider our relations with our employees to be good.
We believe that hiring a diverse workforce is important to our success. We intend to continue to evaluate our use of human capital measures and objectives to ensure we have a stable workforce to run our business effectively and provide a comfortable working environment for our employees.
The success of our business is fundamentally connected to the well-being of our people. Accordingly, we are committed to the health, safety and wellness of our employees, and we provide our employees and their families with competitive pay and benefits.

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ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS
Risks Related to Our Company
Risks related to our operations.
We generated revenues of $104,066 for the year ended December 31, 2023 from the operations of the business acquired, and $0, during the year ended December 31, 2022. Our ability to continue to generate revenue and grow our revenue will depend, in part, on our ability to execute our business plan, expand our business model in a timely manner. We may fail to do so. A variety of factors outside of our control could affect our ability to generate revenue and increase revenue growth.
We have incurred net losses since our inception and expect losses to continue.
We have not been profitable since our inception. Our net losses were $291,672 and $153,713 for the years ended December 31, 2023 and 2022, respectively, and our accumulated deficit as of December 31, 2023 and December 31, 2022 was $739,388 and $447,716, respectively. If we are unable to achieve and maintain profitability, we may be unable to continue our operations. There is a risk that we may never bring our acquired business or assets and subsequent business operations to the marketplace. In addition, there is no guarantee that our subsequent operations will be profitable in the future, and you could lose your entire investment.
We may not be able to continue as a going concern if we do not obtain additional financing.
Our independent registered public accounting firm included in its opinion for the years ended December 31, 2023 and 2022 an explanatory paragraph referring to our recurring losses from operations and expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available. Our ability to continue as a going concern is dependent upon our ability to obtain additional equity or debt financing, reduce expenditures and generate significant revenue. Our financial statements as of December 31, 2023 did not include any adjustments that might result from the outcome of this uncertainty. The reaction of investors to the inclusion of a going concern statement by our auditors, and our potential inability to continue as a going concern, in future years could materially adversely affect our share price and our ability to raise new capital.
Our current chief executive officer and chief financial officer has other business interests.
Steve Laker, our Chief Executive Officer, Chief Financial Officer and a member of the Company’s Board of Directors, currently devotes approximately eight hours per week providing management services to us. While he presently possesses adequate time to attend to our interest, it is possible that the demands on him from other obligations could increase, with the result that he would no longer be able to devote sufficient time to the management of our business. The loss of Mr. Laker would have a material adverse effect on our company.
We have requirements for and there is an uncertainty of access to additional capital.
We will continue to incur development costs to further develop our business plan. Based on our current operating plans, we believe we need to make additional acquisitions of technologies, or other assets to generate enough cashflow to carry our overhead costs, and plan to operate any subsequent business operations from working capital, equity subscriptions and shareholders’ loans. Ultimately, our ability to continue our business operations depends in part on our ability to obtain financing through debt financing, equity financing, or commence operations and generate revenues or some combination of these or other means. There can be no assurance that we will be able to obtain any such financing.
We have negative cash flow from operations and depend on equity financing and shareholder loans for our operations.
Our current operating funds are less than necessary to complete our intended plan of operations. We will need additional funds. Our failure to obtain such additional financing could result in delay or indefinite postponement or further of any subsequent operations which would have a material adverse effect on our business. As of December 31, 2023 and 2022, we had cash of $115,111 and $23,715, respectively. We do not expect that our existing cash and cash from revenue will be sufficient to fund our current operations through at least 12 months from the date of this annual report. We will need to raise additional funds in the future to fund our working capital needs and to fund further expansion of our business. We may require additional equity or debt financings, collaborative arrangements with corporate partners or funds from other sources for these purposes. No assurance can be given that necessary funds will be available for us to finance our development on acceptable terms, if at all. Furthermore, such additional financings may involve substantial dilution of our stockholders or may require that we relinquish rights to certain of our technologies or products. In addition, we may experience operational difficulties and delays due to working capital restrictions. If adequate funds are not available from operations or additional sources of financing, we may have to delay or scale back our growth plans.
We expect to incur losses in the future.
We recently acquired two businesses that generate revenue. We expect that we may incur operating losses in future periods while integrating these businesses, and may incur additional costs related to the integration. We cannot guarantee that we will be successful in generating revenues at the same level of those businesses in the future. Failure to generate profitability operations will cause us to go out of business.
Our operating results may prove unpredictable.
Our operating results are likely to fluctuate significantly in the future due to a variety of factors, many of which we have no control over. Factors that may cause our operating results to fluctuate significantly include: our ability to generate enough working capital from future equity sales; the level of commercial acceptance by the public of any services/products we may develop; fluctuations in the demands of any products; the amount and timing operating costs and capital expenditures relating to expansion of subsequent business, operations, infrastructure and general economic conditions. If realized, any of these factors could have a material effect on our business, financial condition and operating results.
Our common stock is or may become subject to the “penny stock” rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock.
Rule 15g-9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s account for transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investment experience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form: (a) sets forth the basis on which the broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. If our common stock is or becomes subject to the “penny stock” rules, it may be more difficult for investors to dispose of our common stock and cause a decline in the market value of our common stock.
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
The Company’s management expects to issue additional shares.
The Company has 300,000,000 authorized common shares, of which 198,724,868 are currently issued and outstanding and 10,000,000 shares of Series A Convertible Preferred Stock (the “Series A Preferred Stock”), of which 8,957,500 shares are issued and outstanding. Pursuant to the terms of the Exchange Agreement and the Merger Agreement, we issued an aggregate of 67,500,000 shares of common stock.
We do not anticipate paying dividends.
We do not anticipate paying dividends on our common stock in the foreseeable future, but plan rather to retain earnings, if any for the operation, growth and expansion of our subsequent business. Because we do not anticipate paying cash dividends in the foreseeable future which may lower expected returns for investors, and as such our stockholders will not be able to receive a return on their investment unless they sell their shares of common stock.
Risks Related to Investing in Our Company
We are an early-stage company and lack an operating history.
Our limited operating history makes it difficult for potential investors to evaluate our products or prospective operations and business prospects. We are subject to all the risks inherent in business development, financing, unexpected expenditures, and complications and delays that often occur in a new business. Investors should evaluate an investment in us in light of the uncertainties encountered by developing companies in a competitive environment. There can be no assurance that our efforts will be successful or that we will ultimately be able to attain profitability.
We expect to incur losses in the future.
Based upon current plans, we expect to incur operating losses in future periods because we will be incurring expenses and not generating revenues. We cannot guarantee that we will be successful in generating revenues in the future. Failure to generate revenues will cause us to go out of business.
Our operating results may prove unpredictable.
Our operating results are likely to fluctuate significantly in the future due to a variety of factors, many of which we have no control over. Factors that may cause our operating results to fluctuate significantly include: our ability to generate enough working capital from future equity sales; the level of commercial acceptance by the public of our services/products; fluctuations in the demands of products; the amount and timing operating costs and capital expenditures relating to expansion of our subsequent business, operations, infrastructure and general economic conditions. If realized, any of these factors could have a material effect on our business, financial condition and operating results.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.

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ITEM 2. PROPERTIES
ITEM 2. PROPERTIES
The Company does not own any real estate or other properties. The Company maintains an operating lease for its office space and operating facility. The lease has a remaining term of 80 months. We believe this to be sufficient to meet our needs for the foreseeable future and that any additional space we may require will be available on commercially reasonable terms.

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or stockholder is a party adverse to the Company or has a material interest adverse to the Company.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is eligible for unsolicited quotes only on the OTC Market Group, Inc. Expert Market under the symbol “MDWK”. Quotations in Expert Market securities are restricted from public viewing. The OTC Market is a network of security dealers who buy and sell stock. The dealers are connected by a computer network that provides information on current “bids” and “asks”, as well as volume information. Unsolicited-only stocks have a higher risk of wider spreads, increased volatility, and price dislocations. Investors may have difficulty selling this stock. An initial review by a broker-dealer under SEC Rule 15c2-11 is required for brokers to publish competing quotes and provide continuous market making. The trading market for the common stock has been extremely limited and sporadic.
The following table sets forth for the respective periods indicated the prices of our common stock in this market. Such prices are based on inter-dealer bid and asked prices, without markup, markdown, commissions, or adjustments and may not represent actual transactions.
Fiscal Year 2023 High Low
Quarter Ended March 31, 2023 $ 0.05 $ 0.05
Quarter Ended June 30, 2023 $ 0.00 $ 0.00
Quarter Ended September 30, 2023 $ 0.03 $ 0.03
Quarter Ended December 31, 2023 $ 0.05 $ 0.05
Fiscal Year 2022
Quarter Ended March 31, 2022 $ 0.02 $ 0.02
Quarter Ended June 30, 2022 $ 0.04 $ 0.01
Quarter Ended September 30, 2022 $ 0.15 $ 0.01
Quarter Ended December 31, 2022 $ 0.08 $ 0.03
Holders of Common Stock
As of June 28, 2024, there were approximately 174 record holders of our common stock. The number of record holders does not include beneficial owners of common stock whose shares are held in the names of banks, brokers, nominees or other fiduciaries.
Dividend Policy
We have not declared or paid any dividends on our common stock since our inception. We currently intend to reinvest all cash resources to finance the development and growth of our business. As a result, we do not intend to pay dividends on our common stock in the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on the financial condition, earnings, legal requirements, restrictions in its debt agreements and any other factors that our board of directors deems relevant. In addition, as a holding company, our ability to pay dividends depends on our receipt of cash dividends from our operating subsidiaries, which may further restrict our ability to pay dividends as a result of the laws of their respective jurisdictions of organization, agreements of our subsidiaries or covenants under future indebtedness that we or our subsidiaries may incur.
Transfer Agent
The Transfer Agent for shares of the Company’s securities is EQ by Equiniti, formerly known as Corporate Stock Transfer, located at 1110 Centre Pointe Curve, Suite 101, Mendota Heights, Minnesota 55120.
Unregistered Sales of Securities
The following information represents securities sold by us that has not been previously included in a Quarterly Report on Form 10-Q or a Current Report of Form 8-K which were not registered under the Securities Act. Included are new issues, securities issued in exchange for property, services or other securities, securities issued upon conversion from our other share classes and new securities resulting from the modification of outstanding securities. We issued all of the securities listed below pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act ( the “Securities Act”), or Regulation D or Regulation S promulgated thereunder.
During the quarter ended December 31, 2023, the Company sold 3,733,350 shares of common stock in exchange for cash proceeds of $284,000.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. RESERVED.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. The following discussion and analysis should be read in conjunction with our audited financial statements and the accompanying notes thereto included in “Item 8. Financial Statements and Supplementary Data.” In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See “Forward-Looking Statements.” Our results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors.
Overview
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.
Recent Developments
RF Specialties, Inc. Acquisition
On January 19, 2023, we entered into an Exchange Agreement (the “Exchange Agreement”) by and between the Company, RF Specialties, LLC (“RFS”) and Keith A. Mort as the sole member of RFS. Pursuant to the terms of the Exchange Agreement, the Company agreed to acquire from Mr. Mort, and Mr. Mort agreed to sell to the Company, 100% of the equity interests and membership interests of RFS, in exchange for the issuance by the Company to Mr. Mort of 7,500,000 shares of the Company’s common stock (the “Exchange”). Immediately following the Exchange, RFS became a wholly owned subsidiary of the Company.
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.
Two Trees Acquisition
On February 13, 2023, we entered into a Merger Agreement (the “Merger Agreement”), by and between the Company, MD-TT Merger Sub, Inc., a wholly owned subsidiary of the Company (“Merger Sub”) and Two Trees Beverage Co. (“Two Trees”).
Two Trees produces a variety of aged alcoholic beverages using an innovative rapid-aging system. This scalable technology results in all-natural, high-quality products, efficiently produced, with a reduced environmental impact. Our products are nearly indistinguishable from those that are traditionally aged. Two Trees created a proprietary process that mirrors and accelerates the natural aging process that occurs when alcohol is aged in wooden barrels over time. The true art of our craft spirits lives within the balance between the grain selection, local water, and the full-bodied flavors from our toasted wood chip varieties. Our wood chips are selected to pair with specific grains and toasted to just the right char, bringing rich flavor profiles to life with a hint of smoke.
In consideration of the Merger Agreement, at the effective time of the Merger, each of the holders of Two Trees stock, subject to certain exceptions set forth in the Merger Agreement, shall have the right to convert all of the shares of Two Trees stock into a total of 60,000,000 shares of Company common stock, which shall be apportioned between the Two Trees stockholders, pro rata, based on the number of shares of Two Trees stock held by each of the Two Trees stockholders as of the closing of the Merger (the “Merger Consideration”). Immediately following the Exchange, Two Trees became a wholly owned subsidiary of the Company.
Sale of Assets
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.
Results of Operations
Fiscal Year Ended December 31, 2023 compared to Year Ended December 31, 2022
The Company’s results of operations for the year ended December 31, 2023 include the results of Two Trees since the acquisition date of December 8, 2023, and include the results of RFS from the acquisition date of December 27, 2023.
Revenue. Revenue for the year ended December 31, 2023 was $104,066 compared to $0 for the year ended December 31, 2022. The revenue is primarily attributable to liquor sales during the period resulting from the acquisition of Two Trees. We did not earn any revenues for the year ended December 31, 2022.
Cost of Sales. Cost of sales for the year ended December 31, 2023 was $28,551 compared to $0 for the year ended December 31, 2022. The cost of sales is primarily attributable to liquor sales during the period resulting from the acquisition of Two Trees. We did not incur any cost of sales for the year ended December 31, 2022.
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.
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.
Liquidity and Capital Resources
We believe that if we do not raise additional capital over the next 12 months following the filing of this annual report, we may be required to suspend or cease the implementation of our business plans.
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.
The Company requires additional funding to meet its ongoing obligations and to fund anticipated operating losses. Management has expressed substantial doubt about our ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on raising capital to fund its initial business plan and ultimately to attain profitable operations. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.
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.
Cash Flows
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.
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.
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.
Off Balance Sheet Arrangements
There are no off-balance sheet arrangements currently contemplated by management or in place that are reasonably likely to have a current or future effect on the business, financial condition, changes in financial condition, revenue or expenses, result of operations, liquidity, capital expenditures and/or capital resources.
Recent Accounting Standards
The Company has implemented all new accounting standards that are in effect and that may impact its financial statements and does not believe that there are any other new accounting standards that have been issued that might have a material impact on its financial position or results of operations.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. Estimates and judgments are based on historical experience, forecasted events, and various other assumptions that we believe to be reasonable under the circumstances. Estimates and judgments may vary under different assumptions or conditions. We evaluate our estimates and judgments on an ongoing basis. Our management believes the accounting policies below are critical in the portrayal of our financial condition and results of operations and require management’s most difficult, subjective, or complex judgments.
Revenue Recognition - Net sales from Two Trees include liquor and related products, less excise taxes and customer programs and incentives. Sales from RF Specialties, LLC will include product and services related to sustainable Radio Frequency applications to a wide range of industries including structural engineering, food & beverage, and manufacturing. The Company recognizes revenue by applying the following steps in accordance with Accounting Standards Codification (“ASC”) Topic 606 - Revenue from Contracts with Customers: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.
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.
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.
During the year ended December 31, 2023, the Company’s revenue consisted solely of liquor sales.
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.
Impairment of Long-Lived Assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair market value of the assets. During the years ended December 31, 2023, and 2022, no impairment expense was recognized.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable to a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
As of December 31, 2023 and 2022
and for the Years Ended December 31, 2023 and 2022
Report of Independent Registered Public Accounting Firm (PCAOB ID 2738)
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statement of Changes in Stockholders’ Equity (Deficit)
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of MDwerks, Inc.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of MDwerks, Inc. (the Company) as of December 31, 2023 and 2022, and the related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2023 and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company suffered a net loss from operations and has an accumulated deficit, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and the significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audits of the consolidated financial statements that were communicated, or required to be communicated, to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Going Concern
Due to the net loss for the year, the Company evaluated the need for a going concern.
Auditing management’s evaluation of a going concern can be a significant judgement given the fact that the Company uses management estimates on future revenues and expenses which are not able to be substantiated.
As discussed in Note 2, the Company suffered a net loss from operations and has an accumulated deficit for the year ended December 31, 2023.
To evaluate the appropriateness of the going concern, we examined and evaluated the financial information along with management’s plans to mitigate the going concern and management’s disclosure on going concern.
/s/M&K CPAS, PLLC
We have served as the Company’s auditor since 2022
The Woodlands, TX
June 28, 2024
PCAOB ID #2738
MDwerks, Inc.
Consolidated Balance Sheets
December 31, 2023 December 31, 2022
Assets
Current Assets
Cash $ 115,111 $ 23,715
Note receivable 97,533 -
Accounts receivable, net 106,734 -
Inventory 201,207 -
Prepaid expenses 28,632 -
Total Current Assets 549,217 23,715
Fixed assets, net of accumulated depreciation of $10,787 and $0, respectively 496,890 -
Intangible assets, net of accumulated amortization of $4,339 and $0, respectively 615,161 -
Right-of-use asset 1,105,152 -
Goodwill 466,648 -
Total Assets $ 3,233,068 $ 23,715
Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities
Accounts payable and accrued expenses $ 668,748 $ 34,478
Advances payable - 104,204
Notes payable 96,404 -
Deferred revenue 52,779 -
Right-of-use liability, current portion 249,175 -
Total Current Liabilities 1,067,106 138,682
Notes payable, net of current portion 92,830 -
Right-of use liability, net of current portion 912,915 -
Total Liabilities 2,072,851 138,682
Stockholders’ Equity (Deficit)
Preferred stock, par value $0.001; 10,000,000 shares authorized, of which 8,957,500 were issued and outstanding 8,958 8,958
Common stock, par value $0.001; 300,000,000 shares authorized, of which 198,724,868 and 122,260,208 shares were issued and outstanding at December 31, 2023 and 2022, respectively 198,725 122,260
Additional paid in capital 1,691,922 201,531
Accumulated deficit (739,388 ) (447,716 )
Total Stockholders’ Equity (Deficit) 1,160,217 (114,967 )
Total Liabilities and Stockholders’ Equity (Deficit) $ 3,233,068 $ 23,715
The accompanying notes are an integral part of these consolidated financial statements.
MDwerks, Inc.
Consolidated Statements of Operations
For the Years Ended
December 31,
Revenues $ 104,066 $ -
Cost of revenues 28,551 -
Gross profit 75,515 -
Operating expenses:
Selling, general and administrative expenses 470,917 153,713
Salaries and wages 42,071 -
Depreciation expense 15,126 -
Total operating expenses 528,114 153,713
Operating loss (452,599 ) (153,713 )
Other income (expense):
Gain on sale of assets 168,855 -
Other income 2,533 -
Interest expense, net (10,461 ) -
Total other income (expense) 160,927 -
Net loss $ (291,672 ) $ (153,713 )
Net loss per common share - basic $ (0.00 ) $ (0.01 )
Net loss per common share - diluted $ (0.00 ) $ (0.01 )
Weighted average common shares outstanding
Basic 129,422,897 24,565,003
Diluted 129,422,897 24,565,003
The accompanying notes are an integral part of these consolidated financial statements.
MDwerks, Inc.
Consolidated Statement of Changes in Stockholders’ Equity (Deficit)
Shares Amount Shares Amount Capital Deficit (Deficit)
Preferred Stock Common Stock Additional
Paid-in
Accumulated
Shares Amount Shares Amount Capital Deficit Total
Balance December 31, 2021 10,000,000 $ 10,000 18,010,208 $ 18,010 $ 35,195 $ (294,003 ) $ (230,798 )
Conversion of preferred stock-related party (1,042,500 ) (1,042 ) 104,250,000 104,250 (103,208 ) - -
Contributed capital - - - - 30,100 - 30,100
Forgiveness of debt-related party - - - - 239,444 - 239,444
Net loss - - - - - (153,713 ) (153,713 )
Balance December 31, 2022 8,957,500 $ 8,958 122,260,208 $ 122,260 $ 201,531 $ (447,716 ) $ (114,967 )
Balance December 31, 2022 8,957,500 $ 8,958 122,260,208 $ 122,260 $ 201,531 $ (447,716 ) $ (114,967 )
Balance 8,957,500 $ 8,958 122,260,208 $ 122,260 $ 201,531 $ (447,716 ) $ (114,967 )
Common Shares sold for cash - - 8,964,660 8,965 667,384 - 676,349
Common Shares issued for acquisitions - - 67,500,000 67,500 817,500 - 885,000
Imputed interest - - - - 5,507 - 5,507
Net loss - - - - - (291,672 ) (291,672 )
Balance December 31, 2023 8,957,500 $ 8,958 198,724,868 $ 198,725 $ 1,691,922 $ (739,388 ) $ 1,160,217
Balance 8,957,500 $ 8,958 198,724,868 $ 198,725 $ 1,691,922 $ (739,388 ) $ 1,160,217
The accompanying notes are an integral part of these consolidated financial statements.
MDwerks, Inc.
Consolidated Statements of Cash Flows
December 31, 2023 December 31, 2022
Year Ended
December 31, 2023 December 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (291,672 ) $ (153,713 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 15,126 -
Gain on sale of assets (168,855 ) -
Imputed interest 5,507 -
Allowance for credit losses 20,420 -
Interest income (2,533 ) -
Changes in operating assets and liabilities:
Accounts receivable (11,494 ) -
Prepaid expense 1,429 -
Inventory 1,277 -
Right-of-use asset 9,881 -
Accounts payable (82,061 ) 33,339
Deferred revenue (7,288 ) -
Right-of-use liability (9,527 ) -
NET CASH USED IN OPERATING ACTIVITIES (519,790 ) (120,374 )
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangible assets (19,500 ) -
Proceeds from sale of property and equipment 100,000 -
Net assets acquired from acquisitions 46,541 -
Purchase of property and equipment (88,000 ) -
NET CASH PROVIDED BY INVESTING ACTIVITIES 39,041 -
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from advances payable - 113,989
Contributed capital - 30,100
Repayment of advances payable (104,204 ) -
Proceeds from subscription agreements 676,349 -
NET CASH PROVIDED BY FINANCING ACTIVITIES 572,145 144,089
NET CHANGE IN CASH 91,396 23,715
CASH - BEGINNING OF YEAR 23,715 -
CASH - END OF PERIOD $ 115,111 $ 23,715
Supplemental disclosures of cash flow information:
Cash paid for interest $ - $ -
Cash paid for taxes $ - $ -
Supplemental disclosure of non-cash investing and financing activities
Forgiveness of debt as capital contribution $ - $ 239,444
Note receivable issued for asset sale $ 95,000 $ -
Common stock issued for acquisitions $ 885,000 $ -
Conversion of preferred stock $ - $ 104,250
The accompanying notes are an integral part of these consolidated financial statements.
MDwerks, Inc.
Notes to Consolidated Financial Statements
For the Years Ended December 31, 2023 and 2022
NOTE 1 - ORGANIZATION AND DESCRIPTION OF THE BUSINESS
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 (the “Business Combination”) that would benefit from the Company’s public reporting status.
On February 13, 2023, the Company entered into a Merger Agreement (the “Merger Agreement”), by and between the Company, MD-TT Merger Sub, Inc., a wholly owned subsidiary of the Company (“Merger Sub”) and Two Trees Beverage Co. (“Two Trees”).
Two Trees produces a variety of aged alcoholic beverages using an innovative rapid-aging system. This scalable technology results in all-natural, high-quality products, efficiently produced, with a reduced environmental impact. Our products are nearly indistinguishable from those that are traditionally aged. Two Trees created a proprietary process that mirrors and accelerates the natural aging process that occurs when alcohol is aged in wooden barrels over time. The true art of our craft spirits lives within the balance between the grain selection, local water, and the full-bodied flavors from our toasted wood chip varieties. Our wood chips are selected to pair with specific grains and toasted to just the right char, bringing rich flavor profiles to life with a hint of smoke.
In consideration of the Merger Agreement, at the effective time of the Merger, each of the holders of Two Trees stock, subject to certain exceptions set forth in the Merger Agreement, shall have the right to convert all of the shares of Two Trees stock into a total of 60,000,000 shares of Company common stock, which shall be apportioned between the Two Trees stockholders, pro rata, based on the number of shares of Two Trees stock held by each of the Two Trees stockholders as of the closing of the Merger (the “Merger Consideration”). Immediately following the Exchange, Two Trees became a wholly owned subsidiary of the Company. The Merger closed on December 8, 2023.
RF Specialties, LLC (“RFS”) is an innovative company pushing the boundaries of sustainable Radio Frequency applications. For over 12 years RF Specialties 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. As discussed below, on January 25, 2023, the “Company entered into an Exchange Agreement (the “Exchange Agreement”), dated as of January 19, 2023, by and between the Company, RFS and Keith A. Mort as the sole member of RFS (the “Member”). Pursuant to the terms of the Exchange Agreement, the Company agreed to acquire from Mr. Mort, and Mr. Mort agreed to sell to the Company, 100% of the equity interests and membership interests of RFS, in exchange for the issuance by the Company to Mr. Mort of 7,500,000 shares of the Company’s common stock (the “Exchange”). Whereby, immediately following the closing of the Exchange, RFS became a wholly owned subsidiary of the Company. The Exchange closed on December 27, 2023.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The financial statements present the financial position, results of operations and cash flows of the Company in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Two Trees Beverage Company, Prost Beverage Co, Radio Aged Beer LLC, RF Kettle Company LLC, Two Trees, Drilling, RAS LLC, (collectively referred to as “Two Trees”) and RF Specialties, LLC. All intercompany accounts, transactions and balances have been eliminated in consolidation.
Cash and Cash Equivalents - The Company considers all highly liquid instruments with original maturities of three months or less when acquired, to be cash equivalents. The Company had $115,111 cash equivalents at December 31, 2023 and $23,715 cash at December 31, 2022.
Income Taxes - The Company complies with the accounting and reporting requirements of US GAAP in accounting for income taxes. The Company uses the asset and liability approach to financial reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in future taxable or deductible amounts and are based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred income tax assets to the amount expected to be realized.
The Company also complies with US GAAP in accounting for uncertain tax positions. A tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable based on its technical merits. Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as of December 31, 2023 and December 31, 2022. However, the Company’s conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulations, and interpretations thereof. The Company recognizes interest and penalties related to unrecognized tax benefits in interest expense and other expenses, respectively. No interest expense or penalties have been recognized as of and for the years ended December 31, 2023 and December 31, 2022.
Loss Per Share -Earnings per share is computed based on the weighted average number of common shares outstanding.
Basic (loss) per share excludes dilution and is computed by dividing (loss) available to common stockholders by the weighted average common shares outstanding for the year. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. In the fiscal years ended December 31, 2023 and December 31, 2022, there were no options, warrants or derivative securities outstanding.
Use of Estimates and Assumptions - The preparation of financial statements in accordance with US GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results can, and in many cases will, differ from those estimates.
Prepaid Expenses and Other Assets - Prepaid expenses primarily consist of prepaid purchases, insurance, income tax refund receivable, and various other expenses. These amounts are recognized as an expense in the period the related service or benefit is received.
Accounts Receivable and the Allowances for Credit losses - Accounts receivable are recorded in the period when the right to receive payment or other consideration becomes unconditional. Accounts receivable are recorded at the invoiced amount and do not earn interest. The Company maintains an allowance for credit losses based upon the best estimate of probable credit losses in existing accounts receivable. The Company determines the allowance based upon individual accounts when information indicates the customers may have an inability to meet their financial obligations, as well as historical collection and write-off experience. The Company had an accounts receivable balance of $106,734 net of $54,967 allowance for doubtful accounts as of December 31, 2023. The Company had bad debt expense of $20,420 and $0 as of December 31, 2023 and 2022, respectively. The company had an accounts receivable balance of $0 as of December 31, 2022. As of and for the year ended December 31, 2023, the Company had three customers that accounted for 25%, 17%, and 10% of total accounts receivable.
Fair value of financial instruments - The Company measures its financial and non-financial assets and liabilities, as well as makes related disclosures, in accordance with FASB Accounting Standards Codification No. 820, Fair Value Measurement (“ASC 820”), which provides guidance with respect to valuation techniques to be utilized in the determination of fair value of assets and liabilities. Approaches include, (i) the market approach (comparable market prices), (ii) the income approach (present value of future income or cash flow), and (iii) the cost approach (cost to replace the service capacity of an asset or replacement cost). ASC 820 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one more significant inputs or significant value drivers are unobservable.
The carrying values of the Company’s accounts payable and accrued liabilities, advances payable, and convertible notes payable, approximate their fair value due to their short-term nature.
Convertible notes payable - The Company accounts for convertible notes payable in accordance with the FASB Accounting Standards Codification No. 815, Derivatives and Hedging, since the conversion feature is not indexed to the Company’s stock and can’t be classified in equity. The Company allocates the proceeds received from convertible notes payable between the liability component and conversion feature component. The conversion feature that is considered embedded derivative liabilities has been recorded at their fair value as its fair value can be separated from the convertible note and its conversion is independent of the underlying note value. The Company has also recorded the resulting discount on debt related to the conversion feature and is amortizing the discount using the effective interest rate method over the life of the debt instruments.
Going Concern - These financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. As reflected in the accompanying financial statements, the Company had loss of $291,672 and an accumulated deficit of $739,388 as of and for the year ended December 31, 2023. Although management believes that it will be able to successfully execute a business combination, which includes third party financing and the raising of capital to meet the Company’s future liquidity needs, there can be no assurances in this regard. These matters raise substantial doubt about the Company’s ability to continue as a going concern.
Revenue Recognition - Net sales from Two Trees include liquor and related products, less excise taxes and customer programs and incentives. Sales from RF Specialties, LLC will include product and services related to sustainable Radio Frequency applications to a wide range of industries including structural engineering, food & beverage, and manufacturing. The Company recognizes revenue by applying the following steps in accordance with Accounting Standards Codification (“ASC”) Topic 606 - Revenue from Contracts with Customers: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.
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.
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.
During the year ended December 31, 2023, the Company’s revenue consisted solely of liquor sales.
For the year ended December 31, 2023, the Company had one customer who accounted for 26% of total revenue.
Inventory - Inventories primarily consist of bulk and bottled liquor and raw materials and are stated at the lower of cost or market. Cost is determined using an average costing methodology, which approximates cost under the first-in, first-out (“FIFO”) method. A portion of the Company’s finished goods inventory is held in warehouses located in several states that maintain control over the alcohol beverage distribution process until it is sold into the retail distribution channel within those states. The Company regularly monitors inventory quantities on hand and records write-downs for excess and obsolete inventories based primarily on the Company’s estimated forecast of product demand and production requirements. Such write-downs establish a new cost basis of accounting for the related inventory.
Intangible Assets - Intangible assets, consisting of trade names, developed technology, and customer relationships, are accounted for in accordance with ASC 350 Intangibles - Goodwill and Other. Intangible assets that have finite lives are amortized using the straight-line method over their estimated useful lives of three to fifteen years.
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.
Impairment of Long-Lived Assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair market value of the assets. During the years ended December 31, 2023, and 2022, no impairment expense was recognized.
Leases - Management determines if an arrangement is a lease at the inception of the agreement. Operating leases are included in operating lease right-of-use (ROU) assets and operating lease liability on the accompanying consolidated balance sheet. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses the rate implicit in the lease agreement, when available, or a discount rate based on the information available at the commencement date in determining the present value of lease payments. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.
Property and Equipment - Property and equipment are recorded at cost. Depreciation of property and equipment is calculated on a straight-line basis over the estimated useful lives of the assets. Furniture and fixture assets are depreciated over seven years, vehicles are depreciated over five years, and computer and equipment are depreciated over three years. Expenditures for renewals and betterments that extend the useful lives of or improve existing property or equipment are capitalized. Expenditures for maintenance and repairs are expensed as incurred. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets as follows:
SCHEDULE OF PROPERTY AND EQUIPMENT
Category Estimated
Useful Lives
Machinery and equipment 3-7 years
Vehicles 5 years
Furniture & Fixtures 5 years
Computers 3 years
Leasehold improvements are depreciated over the shorter period of their estimated useful life or term of the lease.
Research and Development Expenses - The Company records research and development expenses in the period in which they are incurred as a component of product development expenses.
Stock-Based Compensation - The Company measures stock-based compensation at the estimated fair value on the grant date and recognizes the amortization of stock-based compensation expense on a straight-line basis over the requisite service period, or when it is probable criteria will be achieved for performance-based awards. Fair value is determined based on assumptions related to the fair value of the Company common stock, stock volatility and risk-free rate of return. The Company has elected to recognize forfeitures when realized.
Excise Taxes - The Company is responsible for compliance with the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) regulations, which includes making timely and accurate excise tax payments. The Company is subject to periodic compliance audits by the TTB. Individual states also impose excise taxes on alcoholic beverages in varying amounts. The Company calculates its excise tax expense based upon units produced and on its understanding of the applicable excise tax laws. Excise taxes totaled $595 and $143 for the years ended December 31, 2023, and 2022, respectively.
Recently Issued Accounting Pronouncements - From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the effect of recently issued standards that are not yet effective will not have a material effect on its financial position or results of operations upon adoption.
NOTE 3 - INVENTORY
Inventories primarily consist of bulk and bottled liquor and raw materials and are stated at the lower of cost or market. Cost is determined using an average costing methodology, which approximates cost under the first-in, first-out (“FIFO”) method. A portion of the Company’s finished goods inventory is held in warehouses located in several states that maintain control over the alcohol beverage distribution process until it is sold in to the retail distribution channel within those states. The Company regularly monitors inventory quantities on hand and records write-downs for excess and obsolete inventories based primarily on the Company’s estimated forecast of product demand and production requirements. Such write-downs establish a new cost basis of accounting for the related inventory.
Inventories consisted of the following as of December 31:
SCHEDULE OF INVENTORY
Raw materials and packaging $ 78,352 $ -
Finished goods 122,855 -
Total inventories $ 201,207 $ -
NOTE 4 - FIXED ASSETS, NET
Fixed assets, net consisted of the following as of December 31:
SCHEDULE OF FIXED ASSETS, NET
Machinery and equipment $ 220,984 $ -
Furniture and office equipment 133,890 -
Vehicles 142,306 -
Buildings 10,497 -
Total Property and equipment 507,677 -
Less accumulated depreciation (10,787 ) -
Total property and equipment, net $ 496,890 $ -
On August 25, 2023, the Company entered an asset purchase agreement with an unrelated company, Dream Workz Automotive LLC, a Colorado limited liability company (“Dream Workz”). Pursuant to this agreement, the Company 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. The Note matures on August 25, 2029.
Depreciation expense totaled $10,787 and $0 for the years ended December 31, 2023, and 2022, respectively.
NOTE 5 - INTANGIBLE ASSETS, NET
Intangible assets, net consisted of the following as of December 31:
SCHEDULE OF INTANGIBLE ASSETS, LESS ACCUMULATED AMORTIZATION
Trade names and license, 10 year estimated useful life $ 359,500 $ -
Developed technology, 15 year estimated useful life 140,000 -
Customer relationships, 10 year estimated useful life 120,000 -
Total intangible assets 619,500 -
Less accumulated amortization (4,339 ) -
Total intangible assets, net $ 615,161 $ -
Total amortization expense for the years ended December 31, 2023 and 2022 was $4,339 and $0, respectively. The Company expects to recognize amortization expense of $56,432 annually in each of the next five years.
NOTE 6 - NOTE RECEIVABLE
During the year ended December 31, 2023, the Company sold certain fixed assets for $195,000. At the time of the sale $100,000 cash proceeds were received and the Company received a note receivable for $95,000. The net book value of the asset at the time of sale was $26,145. A gain of $168,855 was recorded in the year ended December 31, 2023, for the sale of equipment. The note is payable in full at maturity on August 25, 2029, and accrues interest at the rate of 8% per year. The note receivable balance as of December 31, 2023, was $97,533 including interest of $2,533.
NOTE 7 - ACQUISITIONS
Two Trees
The Company completed the Merger on the Merger Closing Date pursuant to the Merger Agreement. Pursuant to the terms of the Merger Agreement, on the Merger Closing Date of the Merger, the Company issued 60,000,000 shares of its common stock, $0.001 par value per share, (the “Company Common Stock”) which was apportioned among the Two Trees stockholders, pro rata, based on the number of shares of Two Trees common stock, par value $0.0001 per share (the “Two Trees Common Stock”) held by each of the Two Trees stockholders as of the closing of the Merger (the “Merger Consideration”). Upon completion of the Merger, all 12,045,277 shares of Two Trees common stock were cancelled in exchange for the right of the Two Trees stockholders to receive the Merger Consideration. Each share of common stock of Merger Sub issued and outstanding immediately prior to the effective time of the Merger was converted into and exchanged for one validly issued, fully paid and nonassessable share of common stock, $0.001 par value per share, of Two Trees as the surviving corporation.
Purchase Price Allocation
The purchase price for Two Trees has been allocated to the assets acquired and liabilities assumed for purposes of this pro forma financial information based on their estimated relative fair values.
The merger with Two Trees is being accounted for as a business combination under Financial Accounting Standards Board Accounting Standards Codification (ASC) 805. The following information summarizes the purchase consideration and allocation of the fair values assigned to the assets at the purchase date:
Purchase Price:
SUMMARIZES THE PURCHASE CONSIDERATION AND ALLOCATION OF THE FAIR VALUES
60,000,000 common share @ $0.011 per share $ 660,000
Total purchase consideration $ 660,000
Purchase Price Allocation
Cash $ 3,900
Accounts receivable 63,797
Inventory 202,484
Prepaid expenses 1,430
Fixtures and equipment 171,870
Right of use asset 317,582
Trade names 320,000
Developed technologies 130,000
Customer relationships 120,000
Goodwill 371,930
Accounts payable (332,890 )
Accrued expenses (307,687 )
Deferred revenue (60,067 )
Right of use liability (320,765 )
Notes payable (21,584 )
Total $ 660,000
The fair value of the common stock issued for the Merger was based on the closing price of the Company’s common stock on the closing date of December 8, 2023.
The Company’s consolidated statement of operations includes revenue of $104,066 and net income of $12,620 related to the Two Trees business since the transaction closed on December 8, 2023.
RF Specialties
On December 27, 2023, the Company completed the acquisition of RFS and the Exchange and issued to Mr. Mort 7,500,000 shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”). Immediately following the completion of the Exchange, RFS became a wholly owned subsidiary of the Company
Purchase Price Allocation
The following table presents the estimated allocation of the purchase price of the assets acquired and liabilities assumed for the acquisition by the Company of RFS via the exchange:
SUMMARIZES THE PURCHASE CONSIDERATION AND ALLOCATION OF THE FAIR VALUES
Purchase Price:
7,500,000 common share @ $0.03 per share based on closing price of the Company’s common stock at December 27, 2023 $ 225,000
Total purchase consideration $ 225,000
Purchase Price Allocation
Cash $ 42,641
Accounts receivable 51,863
Fixtures and equipment 273,952
Other assets 28,632
Right of use assets 797,451
Trade names 20,000
Developed technologies 10,000
Goodwill 94,718
Accounts payable (62,716 )
Accrued expenses (13,039 )
Notes payable - current (48,504 )
Right of use liability - current (126,161 )
Right of use liability - net of current (724,691 )
Long term loans payable (119,146 )
Total $ 225,000
The fair value of the common stock issued for the Merger was based on the closing price of the Company’s common stock on the closing date of December 27, 2023.
The Company’s consolidated statement of operations includes revenue of $0 and net loss of $8,112 related to RFS since the transaction closed on December 27, 2023.
Unaudited Pro Forma Financial Information
The following table sets forth the pro-forma consolidated results of operations for the years ended December 31, 2023 and 2022 as if the Exchange agreement with RF Specialties and the Merger agreement with Two Trees occurred on January 1, 2022. The pro forma results of operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the acquisitions had taken place on the dates noted above, or of results that may occur in the future.
SCHEDULE OF UNAUDITED PROFORMA FINANCIAL INFORMATION
Year ended December 31,
Revenue $ 2,283,567 $ 3,154,850
Operating loss (1,253,970 ) (2,440,691 )
Net loss (1,093,089 ) (2,447,140 )
Net loss per common share $ (0.01 ) $ (0.03 )
Weighted Average common shares outstanding 193,059,884 92,065,003
Asset purchase agreements
Prior to its acquisition by the Company on December 27, 2023, RFS entered into two asset purchase agreements to acquire certain tools and equipment. The Company received assets under one agreement in December 2023, totaling $97,363. The assets are included in property and equipment on the Company’s consolidated balance sheet. The Company assumed the liability of $88,674 as part of the Exchange agreement with RF Specialties. The agreement requires monthly payments through October 2026. As of December 31, 2023, the Company owed $88,674.
The Company did not receive the assets under the second purchase agreement until 2024, and as such did not recognize any asset or liability until it took control of the assets in January 2024. The Company agreed to pay a total of $441,891 on a monthly basis through March 2030.
NOTE 8 - ADVANCES PAYABLE
The Company received advances aggregating $29,444 from a non-related parties during the first half of 2022 in order to cover legal, accounting and other various public company related operating expenses. This amount was forgiven during the year ended December 31, 2022, along with the outstanding note payable of $210,000. This transaction was recognized as an in substance related party transaction. The forgiveness of debt was recognized as capital contribution during July 2022 in the accompanying financial statements.
The Company received advances aggregating $104,204 from two non-related parties during the year ended December 31, 2022 to cover legal, accounting, and other various public company related operating expenses. The advances are unsecured, non-interest bearing and are due on demand. During the year ended December 31, 2023, the Company repaid $104,204 in cash of the advances. The balance as of December 31, 2023 and 2022 is $0 and $104,204, respectively.
NOTE 9 - NOTES PAYABLE
During July 2022, the holders of the Company’s shares of Preferred Stock sold their shares pursuant to a Stock Purchase Agreement (“SPA”), executed with (i) Tradition Reserve I LLC, a New York limited liability company (“Buyer”); and (ii) Ronin Equity Partners, Inc., a Texas corporation (“Seller”). The SPA, provides, among other things, that the Company’s obligations under its convertible notes and advances payable aggregating $239,444 are forgiven. This transaction was recognized as an in substance related party transaction. The forgiveness of debt was recognized as capital contribution during July 2022 in the accompanying financial statements.
The Company has the following outstanding notes payable:
SCHEDULE OF NOTES PAYABLE
Loans Origination
Date
Interest
Rate
Balance as of
December 31, 2023
Asset purchase agreement note December 1, 2023 0.00 % $ 88,674
Termination Agreement December 31, 2021
0.13
%
21,584
Loan Payable - Mercedes September 19, 2022 6.79 % 60,008
Loan Payable - Dodge June 18, 2022 0.00 % 18,968
Total
$ 189,234
The following is a summary of the future minimum payments of loans payable:
SCHEDULE OF LOANS PAYABLE FUTURE MINIMUM PAYMENTS
Year Ending
December 31,
$ 96,404
58,037
34,793
2027 and Thereafter -
Total loans payable $ 189,234
During the year ended December 31, 2020, the Company entered into a termination agreement and agreed to pay the sum of $50,000, pursuant to the agreement. During the year ended December 31, 2021, the Company issued a promissory note payable in the amount of $31,584 at the rate of 0.13% per annum, with a maturity date on or before January 1, 2025, for settlement of the $50,000 agreed upon in the termination agreement. The balance as of December 31, 2023, and December 31, 2022, is $21,584 and $31,584, respectively. During the year ended December 31, 2023, the Company made a payment of $10,000.
Interest expense of $10,461 and $0 was recorded in the years ended December 31, 2023, and 2022, respectively, of which $5,507 was imputed interest on the termination agreement. Accrued interest as of December 31, 2023, and December 31, 2022, was zero.
NOTE 10 - CAPITAL STOCK
The Company is authorized to issue 300,000,000 shares of Common stock, $0.001 par value, with such designations, rights and preferences as may be determined from time to time by the Board of Directors. The increase in authorized shares from 200,000,000 to 300,000,000 was effective September 13, 2022.
Preferred stock
The Company is authorized to issue 10,000,000 shares of preferred stock, $0.001 par value, with such designations, rights and preferences as may be determined from time to time by the Board of Directors, of which 10,000,000 shares are designated Series A Convertible Preferred.
On June 15, 2014, the Company designated the Series A Convertible Preferred so that each share shall hold with it conversion rights of one hundred (100) shares of common stock for every share of Series A Preferred stock held, and that each share of Series A Preferred stock will also hold with it the same number of common share votes prior to conversion as it would if fully converted to be used in voting on any company matter requiring a vote of shareholders. At December 31, 2023 and 2022, there were 8,957,500 shares issued and outstanding.
Holders of the Preferred Stock converted 1,042,500 shares of Preferred Stock into 104,250,000 shares of the Company’s common stock during December 2022.
Common stock
At December 31, 2023 and 2022, there were 198,724,868 and 122,260,208 shares issued and outstanding, respectively.
During the year ended December 31, 2023, the Company issued a total of 8,964,660 shares of common stock to accredited investors for total cash proceeds of $676,349. A total of 53,336 shares of common stock were not issued as of the date of this report.
During July 2022, the holders of the Company’s shares of Preferred Stock sold their shares pursuant to a Stock Purchase Agreement (“SPA”), executed with (i) Tradition Reserve I LLC, a New York limited liability company (“Buyer”); and (ii) Ronin Equity Partners, Inc., a Texas corporation (“Seller”). The SPA, provides, among other things, that the Company’s obligations under its convertible notes and advances payable aggregating $239,444 are forgiven. This transaction was recognized as an in substance related party transaction. The forgiveness of debt was recognized as capital contribution during July 2022 in the accompanying financial statements.
In December 2022 Tradition Reserve 1 LLC contributed $30,100 as contributed capital to MDwerks Inc. These funds represent the holdback amount of the purchase price between Tradition Reserve 1 LLC and Ronin Equity Partners Inc.
During the year ended December 31, 2023, the Company issued a total of 67,500,000 shares of common stock, with a fair value of $885,000, for the acquisitions of Two Trees and RF Specialties, LLC. See Note 5.
NOTE 11 - CONTINGENCIES
In the ordinary course of business, the Company may become a party to lawsuits involving various matters. The impact and outcome of litigation, if any, is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business. The Company believes the ultimate resolution of any such current proceeding will not have a material adverse effect on our continued financial position, results of operations or cash flows.
NOTE 12 - RELATED PARTY TRANSACTIONS
During July 2022, the holders of the Company’s shares of Preferred Stock sold their shares pursuant to a Stock Purchase Agreement (“SPA”), executed with (i) Tradition Reserve I LLC, a New York limited liability company (“Buyer”); and (ii) Ronin Equity Partners, Inc., a Texas corporation (“Seller”). The SPA, provides, among other things, that the Company’s obligations under its convertible notes and advances payable aggregating $239,444 are forgiven. This transaction was recognized as an in substance related party transaction. The forgiveness of debt was recognized as capital contribution during July 2022 in the accompanying financial statements.
In December 2022 Tradition Reserve 1 LLC contributed $30,100 as contributed capital to MDwerks Inc. These funds represent the holdback amount of the purchase price between Tradition Reserve 1 LLC and Ronin Equity Partners Inc.
Holders of the Preferred Stock, the largest Company’s shareholder, converted 1,042,500 shares of Preferred Stock into 104,250,000 shares of the Company’s common stock during December 2022.
NOTE 13 - LEASES
The Company maintains an operating lease for its office space and operating facility. The lease has a remaining term of 80 months. The Company determines if an arrangement is a lease at inception. As the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate based on information available at commencement to determine the present value of the lease payments. The Company used a weighted average incremental borrowing rate of 8.4% Right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Leases with an initial term of 12 months or less (“short-term leases”) are not recorded on the balance sheet and are recognized on a straight-line basis over the lease term. As of December 31, 2023, the amount of right-of-use assets and lease liabilities were $1,105,152 and $1,162,090, respectively. As of December 31, 2022, the amount of right-of-use assets and lease liabilities were $0. Aggregate lease expense for the years ended December 31, 2023, and 2022 was $5,546 and $0, respectively.
The following table provides the maturities of lease liabilities at December 31, 2023:
SCHEDULE OF MATURITIES LEASE LIABILITIES
Remaining
Term in
Operating Lease Years
370,439
307,994
184,952
160,200
160,200
thereafter 226,950
Total lease payments 1,410,735
Less: imputed interest (248,645 )
Present value of lease liability 1,162,090 3.33
NOTE 14 - INCOME TAXES
For the period from inception through December 31, 2023, the Company incurred a net operating loss and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At December 31, 2023, and 2022, the Company had approximately $739,388 and $447,716 of federal net operating losses. Under the Tax Cuts and Jobs Act of 2017, the net operating loss carry forwards can be carried forward indefinitely, however the deductions are limited to 80% of taxable income.
The effective income tax rate for the years ended December 31, 2023 and 2022 consisted of the following:
SCHEDULE OF EFFECTIVE INCOME TAX RATE
December 31, December 31,
Federal statutory income tax rate 21 % 21 %
Change in valuation allowance (21 )% (21 )%
Net effective income tax rate - -
The components of the Company’s deferred tax asset are as follows:
SCHEDULE OF DEFERRED TAX ASSET
December 31,
Deferred tax assets:
Net deferred tax assets before valuation allowance $ 155,271 $ 94,020
Less: Valuation allowance (155,271 ) (94,020 )
Net deferred tax assets $ - $ -
Based on the available objective evidence, including the Company’s history of its loss, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at December 31, 2023 and 2022, respectively.
In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions.
NOTE 15 - SUBSEQUENT EVENTS
On February 5, 2024, the Company issued a press release announcing that the Company’s wholly owned subsidiary, Two Trees Beverages, has entered a new, fifteen (15) year license agreement Shine Time, LLC, product licensing territories for Tim Smith Spirits® expanding its territories beyond the United States to include all members of the European Union, the United Kingdom, Norway, Switzerland, Iceland, Serbia, Turkey and Ukraine. The Company will pay a royalty of 9% on branded products covered by the license agreement, or 4.5% of any sublicensed revenue under the agreement. The Company paid $79,688, owes an additional $112,500 under the license agreement that was due by April 1, 2024 but has not yet been paid and will issue 300,000 shares of common stock.
Subsequent to December 31, 2023, the Company issued 2,600,000 shares of common stock and received cash proceeds of $390,000.
On April 22, 2024, the Company entered into a broker agreement with a third party. Under the agreement, the Company will pay a monthly fee of $1,500, and a commission of 12% of any revenue from customers introduced by the broker, less any promotional expenses incurred by the Company. The agreement is cancellable by either party with 60 days notice, and in the event of termination, the commissions shall continue for a period of one year from the termination date.
On January 1, 2024, the Company entered into a short-term loan agreement with an existing shareholder for $25,000 in cash proceeds. The loan included interest of 10% and was repaid in full in March 2024.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
There have been no reportable events pursuant to Item 304(b) of Regulation S-K in connection with a change in our accountants.

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.
In connection with this annual report, as required by Rule 13a-15(d) and 15d-15(e) under the Exchange Act, we have carried out an evaluation, as of December 31, 2023, of the effectiveness of the design and operation of our company’s disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our company’s management, including our company’s principal executive officer and principal financial officer. Based upon that evaluation, our company’s principal executive officer and principal financial officer concluded that as of December 31, 2023 our disclosure controls and procedures were not effective due to the existence of material weaknesses in our internal control over financial reporting due to inadequate segregation of duties within account processes due to limited personnel and insufficient written policies and procedures for accounting, IT and financial reporting and record keeping.
Management’s Annual Report on Internal Control Over Financial Reporting
Management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in SEC guidance on conducting such assessments as of the end of the period covered by this report. Management conducted the assessment based on certain criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. As of December 31, 2023, our controls over our financial reporting were not effective due to the existence of material weaknesses in our internal controls over financial reporting.
The matters involving internal controls and procedures that the Company’s management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee and lack of a majority of outside directors on the Company’s board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; (4) lack of formalized policy and procedures around related party transactions; and (5) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified in connection with the audit of our financial statements as of December 31, 2023 and communicated the matters to our management.
Management believes that the material weaknesses set forth in items (2), (3) and (4) above did not have an effect on the Company’s financial results. However, management believes that the lack of a functioning audit committee and lack of a majority of outside directors on the Company’s board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.
The Company’s management concluded that in light of the errors mentioned above, a material weakness existed in the Company’s internal control over financial reporting as of December 31, 2023, and the Company’s disclosure controls and procedures were not effective as of December 31, 2023.
We are committed to improving our financial organization. As part of this commitment, we will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to the Company: i) Appointing one or more outside directors to our board of directors who shall be appointed to the audit committee of the Company resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; and ii) Preparing and implementing sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.
Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on the Company’s Board. In addition, management believes that preparing and implementing sufficient written policies and checklists will remedy the following material weaknesses (i) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management believes that the hiring of additional personnel who have the technical expertise and knowledge will result proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support the Company if personnel turn over issues within the department occur. This coupled with the appointment of additional outside directors will greatly decrease any control and procedure issues the company may encounter in the future.
We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to SEC rules that permit the Company to provide only management’s report in this annual report.
We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
Changes in Internal Control over Financial Reporting
There were no changes that have affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2023.

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ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER INFORMATION
Adoption or Termination of Trading Arrangements by Directors or Officers
During the Company’s quarterly period ended December 31, 2023, no director or officer (as defined in Exchange Act Rule 16a-1(f)) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as defined in Regulation S-K Item 408.
Adoption or Termination of Insider Trading Arrangements and Policies
On June 6, 2024 the Board of Directors adopted a Policy on Insider Trading.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Currently, we have one executive officer, Steven C. Laker and three directors.
The following table sets forth the names, positions and ages of our current directors and executive officers. Each director is elected at our annual meeting of stockholders and holds office for one year, or until his successor is elected and qualified. Officers are elected by our Board of Directors and their terms of office are at the discretion of our Board.
Name
Position
Age
Term of Office
Steven C. Laker
Chief Executive Officer, Chief Financial Officer, and Director
Appointed July 21, 2022
James P. Cassidy
Executive Chairman of the Board of Directors
Appointed December 8, 2023
Edward D. Kratovil
Director
Appointed December 8, 2023
Biographical information concerning the directors and executive officers listed above is set forth below:
Steven C. Laker. Steven C. Laker was appointed as the Company’s Chief Executive Officer, Chief Financial Officer, and Director on July 21, 2022. Mr. Laker has served as the Chief Executive Officer of Sunwave USA Holdings Inc., a company focused on the energy and sustainability industry (“Sunwave”) since 2019. Previously, Mr. Laker served as Chief Executive Officer of Agera Energy LLC and its affiliates, from 2014 through 2018. Mr. Laker received a Bachelor of Arts from SUNY Empire State College.
James. P. Cassidy. Mr. Cassidy was appointed as a Director of the Company on December 8, 2023 following its acquisition of Two Trees. Mr. Cassidy is the founder and Managing Partner of Preposterous Holdings, a family run private equity business with offices in Asheville, North Carolina which he established in 2013. Mr. Cassidy has worked as a private equity investor and advisor for over 25 years with dozens of companies across several industries, with extensive experience in the tobacco, technology, hospitality, consumer packaged goods, and healthcare sectors. Since May 2021, he has served as Chairman of the Board of Two Trees. Beginning in 2016 he was an early investor in, and helped guide, GoFire, Inc. as a board member and consultant until the sale of its certain vaporizer and inhalation-related intellectual property assets to Kaival Brands Innovations Group, Inc. (Nasdaq: KAVL) in May 2023. From 2000 to 2007, Mr. Cassidy was a partner in The StrataGroup, a wealth management advisory group at Smith Barney. From 1983 to 1993, he worked in various roles in the government relations department and as Director of Corporate Services at UST Inc., a tobacco business holding company.
Edward D. Kratovil. Mr. Kratovil was appointed to the Board of Directors on December 8, 2023. Since April 2009 he has been a corporate crisis management consultant for companies engaged in sales of tobacco, nicotine products, and vapor devices. In 2009, Mr. Kratovil retired as a Senior Vice President from UST Inc (sold to Altria in 2008) where he had been employed since 1985. UST Inc produced and marketed smokeless tobacco products and wine, sparkling wine, and cigars under brand names such as Chateau Ste. Michelle, Columbia Crest , Don Tomas Cigars. Mr. Kratovil previously was the Director of Government Relations for American Can Company, served for three years as Chairman of the Connecticut Gaming Policy Board, spent seven years on the Board of the Congressional Sportsmen’s Foundation and received a Bachelor of Arts with a major in Political Science from Southampton College of Long Island University.
Family Relationships
None.
Involvement in Certain Legal Proceedings
To our knowledge, during the past ten years, none of our directors, executive officers, promoters, control persons, or nominees has:
● Been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
● Had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;
● Been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
● Been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
● Been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
● Been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Except as set forth in our discussion below in “Certain Relationships and Related Transactions,” none of our directors or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.
Committees
We do not have a standing nominating, compensation or audit committee. Rather, our full Board of Directors performs the functions of these committees. We do not believe it is necessary for our Board of Directors to appoint such committees because the volume of matters that come before our Board of Directors for consideration permits the directors to give sufficient time and attention to such matters to be involved in all decision making. Additionally, because our common stock is not listed for trading or quotation on a national securities exchange, we are not required to have such committees.
Director Independence
We have no independent directors, as such term is defined in the listing standards of The NASDAQ Stock Market, at this time. The Company is not quoted on any exchange that requires director independence requirements.
Code of Ethics
We have not yet adopted a code of ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting.
Board Qualifications
We believe that each of the members of our board of directors has the experience, qualifications, attributes and skills that make him or her suitable to serve as our director, in light of our highly regulated magnesium business and the complex nature of our operations. See above under the heading Item 10. “Directors, Executive Officers and Corporate Governance” for a description of the education and experience of each director.
Board Leadership Structure and Board’s Role in Risk Oversight
Our board is generally responsible for the oversight of corporate risk in its review and deliberations relating to our activities. Our principal source of risk falls into two categories, financial and product commercialization. The board oversees management of financial risks; our board regularly reviews information regarding our cash position, liquidity and operations, as well as the risks associated with each. The board regularly reviews plans, results and potential risks related to our business. The board is also expected to oversee risk management as it relates to our compensation plans, policies and practices for all employees including executives and directors, particularly whether our compensation programs may create incentives for our employees to take excessive or inappropriate risks which could have a material adverse effect on the Company.
Limitation on Liability and Indemnification of Officers and Directors
Section 145 of the Delaware General Corporation Law (the “DGCL”) empowers a Delaware corporation to indemnify any persons who are, or are threatened to be made, parties to any threatened, pending, or completed legal action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person was an officer or director of such corporation, or is or was serving at the request of such corporation as a director, officer, employee, or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit, or proceeding, provided that such officer or director acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation’s best interests, and, for criminal proceedings, had no reasonable cause to believe his conduct was illegal. A Delaware corporation may indemnify officers and directors in an action by or in the right of the corporation under the same conditions, except that no indemnification is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation in the performance of his duty. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses which such officer or director actually and reasonably incurred.
In accordance with Section 102(b)(7) of the DGCL, our certificate of incorporation provides that directors will not be personally liable for monetary damages for breaches of their fiduciary duty as directors. The effect of this provision is to eliminate the personal liability of directors for monetary damages or actions involving a breach of their fiduciary duty of care, including any actions involving gross negligence.
These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions.
We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
We have made no provisions for paying cash or non-cash compensation to its officers and directors. No salaries have been paid for the years ended December 31, 2023 and 2022, and none will be paid unless and until our operations generate sufficient cash flows.
The following table summarizes all compensation recorded by us in the past two fiscal years for:
● our principal executive officer or other individual acting in a similar capacity during the fiscal year ended December 31, 2023,
● our two most highly compensated executive officers, other than our principal executive officers, who were serving as executive officers at December 31, 2023, and
● up to two additional individuals for whom disclosure would have been provided but for the fact that the individual was not serving as an executive officer at December 31, 2023.
For definitional purposes, these individuals are sometimes referred to as the “named executive officers.”
Summary Compensation of Named Executive Officers
Name and Principal Position Fiscal Year ended December
Salary
($)
Bonus
($)
Stock Awards
($)
Option Awards
($)
Non-Equity Incentive Plan Compensation
($)
Non-qualified Deferred Compensation Earnings
($)
All Other Compensation
($)
Total
($)
Steve Laker - - - - - - - -
Chief Executive Officer and Chief Financial Officer - - - - - - - -
Outstanding Equity Awards at Fiscal Year End
None of our named executive officers received any equity awards, including, options, restricted stock, performance awards or other equity incentives during the year ended December 31, 2023.
Employment Contracts
At this time, we have not entered into any employment agreements with its officers and directors. If there is sufficient cash flow available from our future operations, the company may enter into employment agreements with our officers and directors.
Equity Award Plans
We have not adopted any equity compensation plans but may do so in the future. The terms of any such plan have not been determined. As of December 31, 2023, there are no outstanding equity awards concerning unexercised options, stock that has not vested nor equity incentive plan awards for any named executive officer.
Director Compensation
The Board of Directors of the Company has not adopted a stock option plan. The Company has no plans to adopt such a plan, but may choose to do so in the future. If such a plan is adopted, this may be administered by the board or a committee appointed by the board. The committee would have the power to modify, extend or renew outstanding options and to authorize the grant of new options in substitution therefore, provided that any such action may not impair any rights under any option previously granted.
The table below summarizes all compensation awarded to, earned by, or paid to our directors for all services rendered in all capacities to us during the year ended December 31, 2023.
DIRECTOR COMPENSATION
Name Fees Earned or
Paid in
Cash
($)
Stock
Awards
($)
Option Awards
($)
Non-Equity
Incentive
Plan
Compensation
($)
Non-Qualified
Deferred
Compensation
Earnings
($)
All
Other
Compensation
($)
Total
($)
Steven C. Laker 0
James P. Cassidy 0
Edward D. Kratovil 0
Board Committees
We have not formed an Audit Committee, Compensation Committee or Nominating and Corporate Governance Committee as of the filing of this Annual Report. Our Board of Directors performs the principal functions of an Audit Committee. We currently do not have an audit committee financial expert on our Board of Directors. We believe that an audit committee financial expert is not required because the cost of hiring an audit committee financial expert to act as one of our directors and to be a member of an Audit Committee outweighs the benefits of having an audit committee financial expert at this time.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information with respect to the beneficial ownership of our voting securities by (i) each director and named executive officer, (ii) all executive officers and directors as a group; and (iii) each shareholder known to be the beneficial owner of 5% or more of the outstanding common stock of the Company as of December 31, 2023.
Beneficial ownership is determined in accordance with the rules of the SEC. Generally, a person is considered to beneficially own securities: (i) over which such person, directly or indirectly, exercises sole or shared voting or investment power, and (ii) of which such person has the right to acquire beneficial ownership at any time within 60 days (such as through exercise of stock options or warrants). For purposes of computing the percentage of outstanding shares held by each person or group of persons, any shares that such person or persons has the right to acquire within 60 days of December 31, 2023 are deemed to be outstanding but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership. The following table sets forth information regarding the number of shares of Common Stock and Series A Preferred Stock beneficially owned as of the date of this Annual Report, by each person who is known by the Company to beneficially own 5% or more of the Company’s Common Stock, each of the Company’s directors and executive officers, and all of the Company’s directors and executive officers, as a group: On December 31, 2023 we had 198,724,868 shares of common stock issued and outstanding and 8,957,500 shares of Series A Preferred Stock issued and outstanding.
Common Stock Series A Preferred Stock
Name, Position and Address of Beneficial Owner No. Beneficially Owned % of Common Stock(1) No. Beneficially Owned % of Series A Preferred Shares(1)(2) % of Voting Capital Stock
Directors and Executive Officers
Steven C. Laker 1,050,000 * - - % *
James P. Cassidy 500,000 * - - *
Edward D. Kratovil - - - - -
All directors and officers as a group (3 persons) 1,550,000 * - - *
Five Percent Shareholders:
Tradition Reserve Trust 1 LLC (3) 2,064,204 1.04 % 8,957,500 100 % 82.03 %
Notes:
* less than 1%.
(1) The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our capital stock outstanding on December 31, 2023, there were 198,724,868 shares of our common stock outstanding and 8,957,500 shares of Series A Preferred Stock outstanding. To calculate a stockholder’s percentage of beneficial ownership, we include in the numerator and denominator the common stock outstanding and all shares of our common stock issuable to that person in the event of the exercise of outstanding options and other derivative securities owned by that person which are exercisable within 60 days of December 31, 2023. Common stock options and derivative securities held by other stockholders are disregarded in this calculation. Therefore, the denominator used in calculating beneficial ownership among our stockholders may differ. Unless we have indicated otherwise, each person named in the table has sole voting power and sole investment power for the shares listed opposite such person’s name.
(2) Each share of Series A Preferred Stock is convertible into 100 shares of Common Stock and is entitled to 100 votes per share.
(3) Kerry Cassidy is the Managing Member of Tradition Reserve Trust 1 LLC and has sole dispositive power over the shares owned by Tradition Reserve Trust 1 LLC. Its address is 107 N Greeley Ave., PO Box 892, Chappaqua, New York 10514.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
In addition to the compensation arrangements, including employment, termination of employment and change in control arrangements and indemnification arrangements, discussed in Item 10. “Directors, Executive Officers and Corporate Governance” and Item 11. “Executive Compensation” above, the following is a description of each transaction since January 1, 2022 and each currently proposed transaction in which:
● We have been or will be a participant;
● the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years; and
● any of our directors, executive officers or beneficial owners of more than 5% of our capital stock, or any immediate family member of, or person sharing the household with, any of these individuals, had or will have a direct or indirect material interest.
Related parties include any person who is or was (since the beginning of the last fiscal year, even if such person does not presently serve in that role) our executive officer or director, any shareholder owning more than 5% of any class of our voting securities or an immediate family member of any such person.
Any potential related party transaction that requires approval will be reviewed and overseen by the Audit Committee, and the Audit Committee will consider such factors as it deems appropriate to determine whether to approve, ratify or disapprove the related party transaction. The Audit Committee may approve the related party transaction only if it determines in good faith that, under all of the circumstances, the transaction is in the best interests of us and our shareholders.
Transactions with Related Parties
During July 2022, the holders of the Company’s shares of Preferred Stock sold their shares pursuant to a Stock Purchase Agreement (“SPA”), executed with (i) Tradition Reserve I LLC, a New York limited liability company (“Buyer”); and (ii) Ronin Equity Partners, Inc., a Texas corporation (“Seller”). The SPA, provides, among other things, that the Company’s obligations under its convertible notes and advances payable aggregating $239,444 are forgiven. This transaction was recognized as an in substance related party transaction.
In December 2022 Tradition Reserve 1 LLC contributed $30,100 to MDwerks Inc. as contributed capital. These funds represent the holdback amount of the purchase price between Tradition Reserve 1 LLC and Ronin Equity Partners Inc. and were used to open a new bank account.
Holders of the Preferred Stock, the largest Company’s shareholder, converted 1,042,500 shares of Preferred Stock into 104,250,000 shares of the Company’s common stock during December 2022.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The following table shows the fees that were billed for the audit and other services provided by M&K CPAs LLC, our independent registered public accounting firm for the fiscal years ended December 31, 2023 and 2022.
Audit Fees $ 74,000 $ 13,500
Audit-Related Fees $ 2,072 $ -
Tax Fees $ - $ -
All Other Fees $ - $ -
Total $ 76,072 $ 13,500
Audit Fees - This category includes the audit of our annual financial statements included in our Annual Report on Form 10-K, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements.
Audit-Related Fees - This category consists of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.” The services for the fees disclosed under this category include consultation regarding our correspondence with the SEC, other accounting consulting and other audit services.
Tax Fees - This category consists of professional services rendered by our independent registered public accounting firm for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.
All Other Fees - This category consists of fees for other miscellaneous items.
The SEC requires that before our independent registered public accounting firm is engaged by us to render any auditing or permitted non-audit related service, the engagement be either: (i) approved by our Audit Committee or (ii) entered into pursuant to pre-approval policies and procedures established by the Audit Committee, provided that the policies and procedures are detailed as to the particular service, the Audit Committee is informed of each service, and such policies and procedures do not include delegation of the Audit Committee’s responsibilities to management.
We do not have an Audit Committee. Our Board pre-approves all services provided by our independent registered public accounting firm. All of the above services and fees paid during 2023 and 2022 were pre-approved by our Board.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
Exhibit No.
Document Description
2.1
Merger Agreement, dated February 13, 2023, by and among MDwerks, Inc., MD-TT Merger Sub, Inc. and Two Trees Beverage Co. (Incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 17, 2023)
2.2
Amendment No. 1 to Merger Agreement, dated February 16, 2023, by and among MDwerks, Inc., MD-TT Merger Sub, Inc. and Two Trees Beverage Co. (Incorporated by reference to Exhibit 2.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 17, 2023)
3.1
Amended and Restated Certificate of Incorporation of the registrant (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 19, 2022).
3.2
Amended and Restated Bylaws of the registrant (Incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 19, 2022).
3.3
Certificate of Elimination of the registrant (Incorporated by reference to Exhibit 3.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 19, 2022).
4.1
Description of securities.*
10.1
Exchange Agreement, dated as of January 19, 2023, by and among the registrant, RF Specialties LLC and Keith A. Mort (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 25, 2023).
19.1
Insider trading policy of the registrant.*
31.1
Certification of Chief Executive Officer pursuant to Rule 13(a)-14(a)/15(d)-14(a) of the Securities Act of 1934 *
31.2
Certification of Chief Financial Officer pursuant to Rule 13(a)-14(a)/15(d)-14(a) of the Securities Act of 1934 *
32.1
Certification of Principal Executive Officer and Principal Accounting Officer under Section 1350 as Adopted pursuant Section 906 of the Sarbanes-Oxley Act of 2002 **
32.2
Certification of Chief Financial Officer under Section 1350 as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. **
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* Filed herewith.
** Furnished herewith.