One World Products, Inc. - Quarter Report: 2022 June (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒

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

For the quarterly period ended June 30, 2022

☐

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

For the transition period from ____________ to ____________

Commission file number: 333-200529

ONE WORLD PRODUCTS, INC.

(Exact name of registrant as specified in its charter)

Nevada		61-1744826
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2332 Galiano Street, 2^nd Floor, Coral Gables, Florida 33134		89118
(Address of principal executive offices)		(zip code)

(800) 605-3210

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
N/A		N/A		N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

The number of shares of registrant’s common stock outstanding as of August 18, 2022 was 65,861,631.

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION		1
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)	1
	Condensed Consolidated Balance Sheets as of June 30, 2022 (Unaudited) and December 31, 2021	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)	2
	Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021 (Unaudited)	5
	Notes to the Condensed Consolidated Financial Statements (Unaudited)	6
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	18
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	22
ITEM 4.	CONTROLS AND PROCEDURES	22
PART II - OTHER INFORMATION		23
ITEM 1.	Legal Proceedings	23
ITEM 1A.	RISK FACTORS	23
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	23
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	23
ITEM 4.	MINE SAFETY DISCLOSURES	23
ITEM 5.	OTHER INFORMATION	23
ITEM 6.	EXHIBITS	24
	SIGNATURES	25

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ONE WORLD PRODUCTS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2022			2021
		(Unaudited)
Assets

Current assets:
Cash	$	54,797		$	119,678
Accounts receivable		26,753			19,880
Inventory		315,722			198,595
Other current assets		231,194			306,030
Total current assets		628,466			644,183

Right-of-use assets		1,483,218			-
Security deposits		1,532,055			1,255,988
Fixed assets, net		1,021,557			1,003,013

Total Assets	$	4,665,296		$	2,903,184

Liabilities and Stockholders’ Equity (Deficit)

Current liabilities:
Accounts payable	$	675,150		$	480,146
Accrued expenses		678,161			457,762
Deferred revenues		33,510			30,164
Dividends payable		118,025			98,920
Current portion of lease liabilities		106,999			-
Convertible notes payable, net of $125,389 and $412,673 of debt discounts at June 30, 2022 and December 31, 2021, respectively		624,611			337,327
Notes payable, current maturities		152,636			119,274
Notes payable, related parties, current maturities		40,000			-
Total current liabilities		2,429,092			1,523,593

Long-term lease liability		1,389,982			-
Notes payable, long-term portion		700,000			-
Notes payable, related parties, long-term portion		200,000			200,000

Total Liabilities		4,719,074			1,723,593

Series A convertible preferred stock, $0.001 par value, 500,000 shares authorized; 65,233 shares issued and outstanding		652,330			652,330
Series B convertible preferred stock, $0.001 par value, 300,000 shares authorized; 238,501 shares issued and outstanding		3,577,515			3,577,515
Convertible preferred stock value		-			-

Stockholders’ Equity (Deficit):
Preferred stock, $0.001 par value, 9,200,000 shares authorized; no shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		-			-
Common stock, $0.001 par value, 300,000,000 shares authorized; 65,861,631 and 65,599,565 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		65,862			65,600
Additional paid-in capital		16,928,274			16,843,656
Subscriptions payable, consisting of 262,066 shares at December 31, 2021		-			21,725
Accumulated other comprehensive loss		(59,875	)		(64,347	)
Accumulated (deficit)		(21,217,884	)		(19,916,888	)
Total Stockholders’ Equity (Deficit)		(4,283,623	)		(3,050,254	)

Total Liabilities and Stockholders’ Equity (Deficit)	$	4,665,296		$	2,903,184

See accompanying notes to financial statements.

ONE WORLD PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

	2022			2021			2022			2021
	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021

Revenues	$	32,864		$	42,323		$	43,011		$	65,605
Cost of goods sold		20,840			173			30,796			7,752
Gross profit		12,024			42,150			12,215			57,853

Operating expenses:
General and administrative		387,807			368,146			769,190			1,108,572
Professional fees		113,805			306,194			284,855			525,657
Depreciation expense		12,172			13,114			24,657			22,998
Total operating expenses		513,784			687,454			1,078,702			1,657,227

Operating loss		(501,760	)		(645,304	)		(1,066,487	)		(1,599,374	)

Other income (expense):
Sublease income		1,000			7,500			1,000			14,500
Gain on early extinguishment of debt		-			-			121,372			-
Interest income		-			1,244			41			1,558
Interest expense		(190,730	)		(116,634	)		(356,922	)		(210,095	)
Total other expense		(189,730	)		(107,890	)		(234,509	)		(194,037	)

Net loss	$	(691,490	)	$	(753,194	)	$	(1,300,996	)	$	(1,793,411	)

Other comprehensive loss:
Gain (loss) on foreign currency translation	$	(12,332	)	$	(5,779	)	$	4,472		$	(5,419	)

Net other comprehensive loss	$	(703,822	)	$	(758,973	)	$	(1,296,524	)	$	(1,798,830	)
Series A convertible preferred stock declared ($0.60 per share)		(8,847	)		12,616			(19,105	)		(34,843	)
Net loss attributable to common shareholders	$	(712,669	)	$	(746,357	)	$	(1,315,629	)	$	(1,833,673	)

Weighted average number of common shares outstanding - basic		65,861,631			59,329,167			65,734,218			58,721,432
Net loss per share - basic	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.03	)

Weighted average number of common shares outstanding - fully diluted		65,861,631			59,329,167			65,734,218			58,721,432
Net loss per share - fully diluted	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.03	)

Dividends declared per share of common stock	$	0.00		$	0.00		$	0.00		$	0.00

See accompanying notes to financial statements.

ONE WORLD PHARMA, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

	Shares			Amount			Shares		Amount		Shares		Amount		Capital			Payable			Income (Loss)			Deficit			(Deficit)
	For the Three Months Ended June 30, 2021
	Series A Convertible						Series B Convertible								Additional						Accumulated Other						Total Stockholders’
	Preferred Stock						Preferred Stock				Common Stock				Paid-In			Subscriptions			Comprehensive			Accumulated			Equity
	Shares			Amount			Shares		Amount		Shares		Amount		Capital			Payable			Income (Loss)			Deficit			(Deficit)

Balance, March 31, 2021		125,233		$	1,252,330			101,835	$	1,527,525		57,335,305	$	57,335	$	14,998,510		$	100,000		$	(52,510	)	$	(17,172,543	)	$	(2,069,208	)

Series B convertible preferred stock sold for cash to our CEO		-			-			103,334		1,550,010		-		-		-			-			-			-			-

Conversion of series A convertible preferred stock		(30,000	)		(300,000	)		-		-		4,000,000		4,000		396,000			(100,000	)		-			-			300,000

Common stock issued for services		-			-			-		-		580,678		581		107,215			-			-			-			107,796

Amortization of common stock options issued for services		-			-			-		-		-		-		226,489			-			-			-			226,489

Series A convertible preferred stock dividend declared ($0.60 per share)		-			-			-		-		-		-		(12,616	)		-			-			-			(12,616	)

Loss on foreign currency translation		-			-			-		-		-		-		-			-			(5,779	)		-			(5,779	)

Net loss		-			-			-		-		-		-		-			-			-			(753,194	)		(753,194	)

Balance, June 30, 2021		95,233		$	952,330			205,169	$	3,077,535		61,915,983	$	61,916	$	15,715,598		$	-		$	(58,289	)	$	(17,925,737	)	$	(2,206,512	)

	For the Three Months Ended June 30, 2022
	Series A Convertible				Series B Convertible								Additional					Accumulated Other						Total Stockholders’
	Preferred Stock				Preferred Stock				Common Stock				Paid-In			Subscriptions		Comprehensive			Accumulated			Equity
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Payable		Income (Loss)			Deficit			(Deficit)

Balance, March 31, 2022		65,233	$	652,330		238,501	$	3,577,515		65,861,631	$	65,862	$	16,895,975		$	-	$	(47,543	)	$	(20,526,394	)	$	(3,612,100	)

Amortization of common stock options issued for services		-		-		-		-		-		-		41,146			-		-			-			41,146

Series A convertible preferred stock dividend declared ($0.60 per share)		-		-		-		-		-		-		(8,847	)		-		-			-			(8,847	)

Gain on foreign currency translation		-		-		-		-		-		-		-			-		(12,332	)		-			(12,332	)

Net loss		-		-		-		-		-		-		-			-		-			(691,490	)		(691,490	)

Balance, June 30, 2022		65,233	$	652,330		238,501	$	3,577,515		65,861,631	$	65,862	$	16,928,274		$	-	$	(59,875	)	$	(21,217,884	)	$	(4,283,623	)

	For the Six Months Ended June 30, 2021
	Series A Convertible						Series B Convertible								Additional						Accumulated Other						Total Stockholders’
	Preferred Stock						Preferred Stock				Common Stock				Paid-In			Subscriptions			Comprehensive			Accumulated			Equity
	Shares			Amount			Shares		Amount		Shares		Amount		Capital			Payable			Income (Loss)			Deficit			(Deficit)

Balance, December 31, 2020		150,233		$	1,502,330			-	$	-		53,085,305	$	53,085	$	14,103,672		$	75,000		$	(52,870	)	$	(16,132,326	)	$	(1,953,439	)

Series B convertible preferred stock sold for cash to our CEO		-			-			170,001		2,550,015		-		-		-			-			-			-			-

Series B convertible preferred stock sold for cash		-			-			35,168		527,520		-		-		(25	)		-			-			-			(25	)

Common stock sold for cash		-			-			-		-		750,000		750		74,250			(75,000	)		-			-			-

Conversion of series A convertible preferred stock		(55,000	)		(550,000	)		-		-		5,500,000		5,500		544,500			-			-			-			550,000

Common stock issued for services		-			-			-		-		580,678		581		107,215			-			-			-			107,796

Commitment shares issued pursuant to promissory note		-			-			-		-		2,000,000		2,000		266,250			-			-			-			268,250

Amortization of common stock options issued for services		-			-			-		-		-		-		654,579			-			-			-			654,579

Series A convertible preferred stock dividend declared ($0.60 per share)		-			-			-		-		-		-		(34,843	)		-			-			-			(34,843	)

Loss on foreign currency translation		-			-			-		-		-		-		-			-			(5,419	)		-			(5,419	)

Net loss		-			-			-		-		-		-		-			-			-			(1,793,411	)		(1,793,411	)

Balance, June 30, 2021		95,233		$	952,330			205,169	$	3,077,535		61,915,983	$	61,916	$	15,715,598		$	-		$	(58,289	)	$	(17,925,737	)	$	(2,206,512	)

	For the Six Months Ended June 30, 2022
	Series A Convertible				Series B Convertible								Additional						Accumulated Other						Total Stockholders’
	Preferred Stock				Preferred Stock				Common Stock				Paid-In			Subscriptions			Comprehensive			Accumulated			Equity
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Payable			Income (Loss)			Deficit			(Deficit)

Balance, December 31, 2021		65,233	$	652,330		238,501	$	3,577,515		65,599,565	$	65,600	$	16,843,656		$	21,725		$	(64,347	)	$	(19,916,888	)	$	(3,050,254	)

Common stock issued for services		-		-		-		-		262,066		262		21,463			(21,725	)		-			-			-

Amortization of common stock options issued for services		-		-		-		-		-		-		82,260			-			-			-			82,260

Series A convertible preferred stock dividend declared ($0.60 per share)		-		-		-		-		-		-		(19,105	)		-			-			-			(19,105	)

Gain on foreign currency translation		-		-		-		-		-		-		-			-			4,472			-			4,472

Net loss		-		-		-		-		-		-		-			-			-			(1,300,996	)		(1,300,996	)

Balance, June 30, 2022		65,233	$	652,330		238,501	$	3,577,515		65,861,631	$	65,862	$	16,928,274		$	-		$	(59,875	)	$	(21,217,884	)	$	(4,283,623	)

See accompanying notes to financial statements.

ONE WORLD PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	2022			2021
	For the Six Months Ended
	June 30,
	2022			2021
Cash flows from operating activities
Net loss	$	(1,300,996	)	$	(1,793,411	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		24,657			22,998
Gain on early extinguishment of debt		(121,372	)		-
Amortization of debt discounts		300,600			183,819
Stock-based compensation		-			107,796
Amortization of options issued for services		82,260			654,579
Decrease (increase) in assets:
Accounts receivable		(6,873	)		(23,095	)
Inventory		(117,127	)		(146,714	)
Other current assets		74,836			(21,640	)
Right-of-use assets		52,488			22,636
Security deposits		(276,067	)		(2,239	)
Increase (decrease) in liabilities:
Accounts payable		195,004			(175,327	)
Accrued expenses		222,497			(100,163	)
Deferred revenues		3,346			-
Lease liability		(38,725	)		(22,114	)
Net cash used in operating activities		(905,472	)		(1,292,875	)

Cash flows from investing activities
Purchase of fixed assets		(43,201	)		(223,922	)
Net cash used in investing activities		(43,201	)		(223,922	)

Cash flows from financing activities
Repayment of convertible note payable		-			(40,567	)
Proceeds from notes payable		839,320			268,250
Proceeds from notes payable, related parties		40,000			-
Proceeds from sale of preferred and common stock		-			3,077,510
Net cash provided by financing activities		879,320			3,305,193

Effect of exchange rate changes on cash		4,472			(5,419	)

Net increase (decrease) in cash		(64,881	)		1,782,977
Cash - beginning		119,678			28,920
Cash - ending	$	54,797		$	1,811,897

Supplemental disclosures:
Interest paid	$	27,932		$	8,175
Income taxes paid	$	-		$	-

Non-cash investing and financing transactions:
Fair value of common shares issued for conversion of debt	$	-		$	1,537,750
Value of commitment shares issued as a debt discount	$	-		$	268,250
Dividends payable	$	19,105		$	34,843
Initial recognition of right-of-use assets and lease liabilities	$	1,535,706		$	-

See accompanying notes to financial statements.

ONE WORLD PRODUCTS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 – Nature of Business and Significant Accounting Policies

Nature of Business

One World Products, Inc., formerly known as One World Pharma, Inc. (the “Company,” “we,” “our” or “us”) was incorporated in Nevada on September 2, 2014. On February 21, 2019, we entered into an Agreement and Plan of Merger with OWP Merger Subsidiary, Inc., our wholly-owned subsidiary, and OWP Ventures, Inc. (“OWP Ventures”), which is the parent company of One World Pharma SAS, a Colombian company (“OWP Colombia”). Pursuant to the Merger Agreement, we acquired OWP Ventures (and indirectly, OWP Colombia) by the merger of OWP Merger Subsidiary with and into OWP Ventures, with OWP Ventures being the surviving entity as our wholly-owned subsidiary (the “Merger”). As a result of the Merger (a) holders of the outstanding capital stock of OWP Ventures received an aggregate of 39,475,398 shares of our common stock; (b) options to purchase 825,000 shares of common stock of OWP Ventures at an exercise price of $0.50 automatically converted into options to purchase 825,000 shares of our common stock at an exercise price of $0.50; (c) the outstanding principal and interest under a $300,000 convertible note issued by OWP Ventures became convertible, at the option of the holder, into shares of our common stock at a conversion price equal to the lesser of $0.424 per share or 80% of the price we sell our common stock in a future “Qualified Offering” (d) 875,000 shares of our common stock owned by OWP Ventures prior to the Merger were cancelled; and (e) OWP Ventures’ chief operating officer became our chief operating officer and two of OWP Ventures’ directors became members of our board of directors. The Company’s headquarters are located in Coral Gables, Florida, and all of its customers are outside of the United States. On January 10, 2019, the Company changed its name from Punto Group, Corp. to One World Pharma, Inc., and on November 23, 2021, the Company changed its name to One World Products, Inc. through the merger of One World Products, Inc., a recently formed Nevada corporation wholly-owned by the Company, with and into the Company (the “Name Change Merger”) pursuant to the applicable provisions of the Nevada Revised Statutes (“NRS”). As permitted by the NRS, the articles of merger filed with the Secretary of State of the state of Nevada to effect the Name Change Merger amended Article I of the Company’s Articles of Incorporation to change the Company’s name to “One World Products, Inc.” The Name Change Merger was effected solely to effect the change of the Company’s name, and had no effect on the Company’s officers, directors, operations, assets or liabilities.

OWP Ventures is a holding company formed in Delaware on March 27, 2018 to enter and support the cannabis industry, and on May 30, 2018, it acquired OWP Colombia. OWP Colombia is a licensed cannabis cultivation, production and distribution (export) company located in Popayán, Colombia (nearest major city is Cali). We plan to be a producer of raw cannabis and hemp plant ingredients for both medical and industrial uses across the globe. We have received licenses to cultivate, produce and distribute the raw ingredients of the cannabis and hemp plant for medicinal, scientific and industrial purposes. Specifically, we are one of the few companies in Colombia to receive all four licenses, including seed use, cultivation of non-psychoactive cannabis, cultivation of psychoactive cannabis, and manufacturing allowing for extraction and export. Currently, we own approximately 30 acres and have a covered greenhouse built specifically to cultivate high-grade cannabis and hemp. In addition, we have entered into agreements with local farming co-operatives that include small farmers and indigenous tribe members, under which they will cultivate cannabis on up to approximately 140 acres of land using our seeds and propagation techniques, and sell their harvested products to us on an exclusive basis. We began harvesting cannabis in the first quarter of 2019 for the purpose of further research and development activities, quality control testing and extraction. We have been generating revenue from the sale of our seeds since the second quarter of 2020. In August 2021, we paid total deposits of $1,155,000 of the approximate total cost of $1,400,000 for the construction of a vertically integrated extraction facility designed to process the cannabis flower. Upon completion of construction, we will be one of the only companies in Colombia to both hold licenses and possess the capability to extract high-quality CBD and THC oils.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and the rules of the Securities and Exchange Commission (SEC). Intercompany accounts and transactions have been eliminated.

The unaudited condensed consolidated financial statements of the Company and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the Condensed Consolidated Financial Statements have been included. Such adjustments are of a normal, recurring nature. The Condensed Consolidated Financial Statements, and the accompanying notes, are prepared in accordance with GAAP and do not contain certain information included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The interim Condensed Consolidated Financial Statements should be read in conjunction with that Annual Report on Form 10-K. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year.

ONE WORLD PRODUCTS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the following entities, all of which were under common control and ownership at June 30, 2022:

	State of
Name of Entity	Incorporation	Relationship
One World Products, Inc.⁽¹⁾	Nevada	Parent
OWP Ventures, Inc.⁽²⁾	Delaware	Subsidiary
One World Pharma S.A.S.⁽³⁾	Colombia	Subsidiary
Colombian Hope, S.A.S.⁽⁴⁾	Colombia	Subsidiary
Agrobase, S.A.S.⁽⁵⁾	Colombia	Subsidiary

⁽¹⁾	Holding company in the form of a corporation.
⁽²⁾	Holding company in the form of a corporation and wholly-owned subsidiary of One World Products, Inc.
⁽³⁾	Wholly-owned subsidiary of OWP Ventures, Inc. since May 30, 2018, located in Colombia and legally constituted as a simplified stock company registered in the Chamber of Commerce of Bogotá on July 18, 2017. Its headquarters are located in Bogotá.
⁽⁴⁾	Wholly-owned subsidiary of OWP Ventures, Inc., acquired on November 19, 2019, located in Colombia and legally constituted as a simplified stock company. This company has yet to incur any substantive income or expenses.
⁽⁵⁾	Wholly-owned subsidiary of OWP Ventures, Inc., formed on September 12, 2019, located in Colombia and legally constituted as a simplified stock company. This company has yet to incur any substantive income or expenses.

The consolidated financial statements herein contain the operations of the wholly-owned subsidiaries listed above. As of August 1, 2022, the Company’s headquarters are located in Coral Gables, Florida and substantially all of its production efforts are within Popayán, Colombia.

Foreign Currency Translation

The functional currency of the Company is Columbian Peso (COP). The Company has maintained its financial statements using the functional currency, and translated those financial statements to the US Dollar (USD) throughout this report. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income (loss) for the respective periods.

Comprehensive Income

The Company has adopted the Financial Accounting Standards Boards (“FASB”) Accounting Standards Codification (“ASC”) 220, Reporting Comprehensive Income, which establishes standards for reporting and displaying comprehensive income, its components, and accumulated balances in a full-set of general-purpose financial statements. Accumulated other comprehensive income represents the accumulated balance of foreign currency translation adjustments.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Segment Reporting

ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company operates as a single segment and will evaluate additional segment disclosure requirements as it expands its operations.

ONE WORLD PRODUCTS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Fair Value of Financial Instruments

The Company discloses the fair value of certain assets and liabilities in accordance with ASC 820 – Fair Value Measurement and Disclosures (ASC 820). Under ASC 820-10-05, the FASB establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses reported on the balance sheets are estimated by management to approximate fair value primarily due to the short-term nature of the instruments.

Cash in Excess of FDIC Insured Limits

The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $250,000, under current regulations. The Company did not have any cash in excess of FDIC insured limits at June 30, 2022, and has not experienced any losses in such accounts.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (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’s sales to date have primarily consisted of the sale of seeds. These sales include multi-element arrangements whereby the Company collects 50% of the sale upon delivery of the sales, and the remaining 50% upon the completion of the harvest, whether the seeds result in a successful crop, or not. In addition, the Company has a right of first refusal to purchase products resulting from the harvest. At June 30, 2022, the Company had $33,510 of deferred revenues and $22,132 of deferred cost of goods sold, as included in other current assets on the balance sheet, that are expected to be recognized upon the customers’ completion of their harvests in 2022.

Inventory

Inventories are stated at the lower of cost or net realizable value. Cost is determined on a standard cost basis that approximates the first-in, first-out (FIFO) method. Appropriate consideration is given to obsolescence, excessive levels, deterioration, and other factors in evaluating net realizable value. Our cannabis products consist of cannabis flower grown in-house, along with produced extracts.

Stock-Based Compensation

The Company accounts for equity instruments issued to employees and non-employees in accordance with the provisions of ASC 718 Stock Compensation (ASC 718). All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier of the date on which the counterparty’s performance is complete or the date at which a commitment for performance by the counterparty to earn the equity instruments is reached because of sufficiently large disincentives for nonperformance.

Basic and Diluted Loss Per Share

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which creates an exception to the general recognition and measurement principle for contract assets and contract liabilities from contracts with customers acquired in a business combination. The new guidance will require companies to apply the definition of a performance obligation under accounting standard codification (“ASC”) Topic 606 to recognize and measure contract assets and contract liabilities (i.e., deferred revenue) relating to contracts with customers that are acquired in a business combination. Under current GAAP, an acquirer in a business combination is generally required to recognize and measure the assets it acquires and the liabilities it assumes at fair value on the acquisition date. The new guidance will result in the acquirer recording acquired contract assets and liabilities on the same basis that would have been recorded by the acquiree before the acquisition under ASC Topic 606. These amendments are effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The adoption of ASU 2021-08 is not expected to have a material impact on the Company’s financial statements or related disclosures.

ONE WORLD PRODUCTS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt – Modifications and Extinguishments (Subtopic 470-50), Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity Classified Written Call Options. ASU 2021-04 addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. ASU 2021-04 is effective for fiscal years beginning after December 15, 2021 and interim periods within those fiscal years, with early adoption permitted. The adoption of ASU 2021-04 has not had a material impact on the Company’s financial statements or related disclosures.

In March 2020, the FASB issued ASU 2020-04 establishing Topic 848, Reference Rate Reform. ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The adoption of ASU 2020-04 did not have a material impact on the Company’s consolidated financial statements, as we transitioned from the London Interbank Offered Rate, commonly referred to as LIBOR, to alternative references rates, as well as utilizing the aforementioned expedients and exceptions provided in ASU 2020-04.

In August 2020, the FASB issued ASU No. 2020-06, Debt–Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging–Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06), which simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments. This guidance also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if converted method. The new guidance is effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2021, with early adoption permitted. The adoption of ASU 2020-06 is not expected to have a material impact on the Company’s financial statements or related disclosures.

No other new accounting pronouncements, issued or effective during the period ended June 30, 2022, have had or are expected to have a significant impact on the Company’s financial statements.

Note 2 –Going Concern

As shown in the accompanying condensed consolidated financial statements as of June 30, 2022, our balance of cash on hand was $54,797, and we had negative working capital of $1,800,626 and an accumulated deficit of $21,217,884. We are too early in our development stage to project future revenue levels, and may not be able to generate sufficient funds to sustain our operations for the next twelve months. Accordingly, we may need to raise additional cash to fund our operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

In the event sales do not materialize at the expected rates, management would seek additional financing and would attempt to conserve cash by further reducing expenses. There can be no assurance that we will be successful in achieving these objectives; therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern.

The condensed consolidated financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. The condensed consolidated financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. Our ability to scale production and distribution capabilities and further increase the value of our brands, is largely dependent on our success in raising additional capital.

ONE WORLD PRODUCTS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 3 – Fair Value of Financial Instruments

Under FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

The Company has certain financial instruments that must be measured under the new fair value standard. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:

Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheet as of June 30, 2022 and December 31, 2021, respectively:

	Level 1		Level 2			Level 3
	Fair Value Measurements at June 30, 2022
	Level 1		Level 2			Level 3
Assets
Cash	$	54,797	$	-		$	-
Right-of-use asset		-		-			1,483,218
Total assets		54,797		-			1,483,218
Liabilities
Lease liabilities		-		-			1,496,981
Convertible notes payable, net of $125,389 of debt discounts		-		624,611			-
Notes payable		-		852,636			-
Notes payable, related parties		-		240,000			-
Total liabilities		-		(1,717,247	)		(1,496,981	)
Total assets and liabilities	$	54,797	$	(1,717,247	)	$	(13,763	)

	Level 1		Level 2			Level 3
	Fair Value Measurements at December 31, 2021
	Level 1		Level 2			Level 3
Assets
Cash	$	119,678	$	-		$	-
Total assets		119,678		-			-
Liabilities
Convertible notes payable, net of $412,673 of debt discounts		-		337,327			-
Convertible notes payable		-		319,274			-
Total liabilities		-		(656,601	)		-
Total assets and liabilities	$	119,678	$	(656,601	)	$	-

There were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the six months ended June 30, 2022 or the year ended December 31, 2021.

ONE WORLD PRODUCTS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 4 – Inventory

Schedule of Inventory

	June 30,			December 31,
	2022			2021
Raw materials	$	25,105		$	31,233
Work in progress		105,805			81,182
Finished goods		206,096			108,246
Inventory gross		337,006			220,661
Less obsolescence		(21,284	)		(22,066	)
Total inventory	$	315,722		$	198,595

Note 5 – Other Current Assets

Other current assets included the following as of June 30, 2022 and December 31, 2021, respectively:

Schedule of Other Current Assets

	June 30,		December 31,
	2022		2021
VAT tax receivable	$	182,379	$	147,194
Prepaid expenses		26,683		29,366
Deferred cost of goods sold		22,132		19,470
Other receivables		-		110,000
Total	$	231,194	$	306,030

Note 6 – Security Deposits

Security deposits included the following as of June 30, 2022 and December 31, 2021, respectively:

Schedule of Security Deposits

	June 30,		December 31,
	2022		2021
Utility deposits	$	1,090	$	1,090
Refundable deposit on equipment purchase		50,000		50,000
Down payment on distillation equipment		1,399,413		1,155,000
Security deposits on leases held in Colombia		67,523		35,869
Security deposit on office lease		14,029		14,029
Security deposits	$	1,532,055	$	1,255,988

ONE WORLD PRODUCTS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 7 – Fixed Assets

Fixed assets consist of the following at June 30, 2022 and December 31, 2021, respectively:

Schedule of Fixed Assets

	June 30,			December 31,
	2022			2021
Land	$	138,248		$	138,248
Buildings		473,971			473,971
Office equipment		59,984			56,502
Furniture and fixtures		34,409			34,409
Equipment and machinery		423,548			383,829
Fixed assets, gross		1,130,160			1,086,959
Less: accumulated depreciation		(108,603	)		(83,946	)
Total	$	1,021,557		$	1,003,013

Depreciation and amortization expense totaled $24,657 and $22,998 for the six months ended June 30, 2022 and 2021, respectively.

Note 8 – Accrued Expenses

Accrued expenses consisted of the following at June 30, 2022 and December 31, 2021, respectively:

Schedule of Accrued Expenses

	June 30,		December 31,
	2022		2021
Accrued payroll	$	410,627	$	261,044
Accrued withholding taxes and employee benefits		24,557		9,162
Accrued ICA fees and contributions		158,985		129,856
Accrued interest		83,992		57,700
Accrued expenses	$	678,161	$	457,762

Note 9 – Leases

The Company leases its 12,400 square foot extraction facility under a non-cancelable real property lease agreement that commenced on January 1, 2022 and expires on December 31, 2027, with successive five-year options to extend, at a monthly lease term of 57,339,000 COP, or approximately $15,290 USD, with approximately a 3% annual escalation of lease payments commencing January 1, 2023.

The Company also leases a residential premise under a non-cancelable real property lease agreement that commenced on September 1, 2021 and expires on August 31, 2024, at a monthly lease term of 3,800,000 COP, or approximately $1,013 USD, with approximately a 3% annual escalation of lease payments commencing September 1, 2022.

The Company leases another residential premise under a non-cancelable real property lease agreement that commenced on June 1, 2022 and expires on May 30, 2024, at a monthly lease term of 1,900,000 COP, or approximately $507 USD, with an 8% annual escalation of lease payments commencing June 1, 2023.

In addition, the Company leases its corporate offices and operational facility in Colombia under short-term non-cancelable real property lease agreements that expire within a year. The Company doesn’t have any other office or equipment leases that would require capitalization. The extraction facility and office leases contain provisions requiring payment of property taxes, utilities, insurance, maintenance and other occupancy costs applicable to the leased premise. In the locations in which it is economically feasible to continue to operate, management expects to enter into a new lease upon expiration. The extraction facility lease contains provisions requiring payment of property taxes, utilities, insurance, maintenance and other occupancy costs applicable to the leased premise. As the Company’s leases do not provide implicit discount rates, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

ONE WORLD PRODUCTS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The components of lease expense were as follows:

Schedule of Components of Lease Expense

	For the Six
	Months Ended
	June 30,
	2022
Operating lease costs:
Amortization of assets	$	60,833
Interest on lease liabilities		51,131
Lease payments on short term leases		33,067
Total lease cost	$	145,031

Supplemental balance sheet information related to leases was as follows:

	June 30,
	2022
Operating leases:
Operating lease assets	$	1,483,218

Current portion of operating lease liabilities	$	106,999
Noncurrent operating lease liabilities		1,389,982
Total operating lease liabilities	$	1,496,981

Weighted average remaining lease term:
Operating leases		8.50 years

Weighted average discount rate:
Operating leases		6.75	%

Supplemental cash flow and other information related to leases was as follows:

	For the Six
	Months Ended
	June 30,
	2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	38,725

Leased assets obtained in exchange for lease liabilities:
Total operating lease liabilities	$	1,535,706

ONE WORLD PRODUCTS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Future minimum annual lease commitments under non-cancelable operating leases are as follows at June 30, 2022:

	Operating
	Leases

2022 (for the six months remaining)	$	100,984
2023		208,004
2024		205,999
2025		200,496
2026 and thereafter		1,335,816
Total minimum lease payments		2,051,299
Less interest		554,318
Present value of lease liabilities		1,496,981
Less current portion		106,999
Long-term lease liabilities	$	1,389,982

Note 10 – Convertible Note Payable

Convertible note payable consists of the following at June 30, 2022 and December 31, 2021, respectively:

Schedule of Convertible Note Payable

	June 30,		December 31,
	2022		2021

On September 24, 2021, the Company completed the sale of a (i) Promissory Note in the principal amount of $750,000 (the “Second AJB Note”) to AJB Capital Investments LLC (“AJB Capital”), (ii) a three-year warrant to purchase 1,500,000 shares of the Company’s common stock at an initial exercise price of $0.25 per share, and (iii) a three-year warrant to purchase 2,000,000 shares of the Company’s common stock at an initial exercise price of $0.50 per share, for an aggregate purchase price of $705,000, pursuant to a Securities Purchase Agreement between the Company and AJB Capital (the “Purchase Agreement”). The aggregate estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 197% and a call option value of $0.1053 and $0.1001, respectively, was $358,017, based on and is being amortized as a debt discount over the life of the loan. The Company received net proceeds of $678,750 after deductions of debt discounts, consisting of $45,000 pursuant to an original issue discount, $15,000 of legal fees and $11,250 of brokerage fees. The Note matures on September 24, 2022 (the “Maturity Date”), bears interest at a rate of 8% per annum, and, following an event of default only, is convertible into shares of the Company’s common stock at a conversion price equal to the lesser of 90% of the lowest trading price during (i) the 20 trading day period preceding the issuance date of the note, or (ii) the 20 trading day period preceding date of conversion of the Note. The Note is also subject to covenants, events of defaults, penalties, default interest and other terms and conditions customary in transactions of this nature. Pursuant to the Purchase Agreement, the Company paid a commitment fee to AJB Capital in the amount of $250,000 (the “Commitment Fee”) in the form of 1,250,000 shares of the Company’s common stock (the “Commitment Fee Shares”). During the six month period following the six month anniversary of the closing date, AJB Capital shall be entitled to be issued additional shares of common stock of the Company to the extent AJB Capital’s sale of the Commitment Fee Shares has resulted in net proceeds in an amount less than the Commitment Fee. The Commitment Fee Shares resulted in a debt discount of $150,062 that is being amortized over the life of the loan. The obligations of the Company to AJB Capital under the Note and the Purchase Agreement are secured by a lien on the Company’s assets pursuant to a Security Agreement between the Company and AJB Capital.	$	750,000	$	750,000

Total convertible notes payable		750,000		750,000
Less: unamortized debt discounts		125,389		412,673
Convertible note payable, net of discounts	$	624,611	$	337,327

ONE WORLD PRODUCTS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The Company recognized aggregate debt discounts on the convertible notes and notes payable to AJB Capital for the six months ended June 30, 2022 and the year ended December 31, 2021, as follows:

Schedule of Convertible Debt Discounts

	June 30,		December 31,
	2022		2021

Fair value of 3,250,000 commitment shares of common stock	$	418,312	$	418,312
Fair value of warrants to purchase 3,500,000 shares of common stock		358,017		358,017
Original issue discounts		53,700		53,700
Legal and brokerage fees		39,300		39,300
Total debt discounts		869,329		869,329
Amortization of debt discounts		743,940		456,656
Unamortized debt discounts	$	125,389	$	412,673

The aggregate debt discounts of $869,329, for the year ended December 31, 2021, are being amortized over the life of the loan using the straight-line method, which approximates the effective interest method. The Company recorded finance expense in the amount of $300,600 and $183,819 on the amortization of these discounts for the six months ended June 30, 2022 and 2021, respectively.

The convertible note limits the maximum number of shares that can be owned by the note holder as a result of the conversions to common stock to 4.99% of the Company’s issued and outstanding shares.

The Company recorded interest expense pursuant to the stated interest rates on the convertible note in the amount of $29,753 for the six months ended June 30, 2022.

Note 11 – Notes Payable

Notes payable consists of the following at June 30, 2022 and December 31, 2021, respectively:

Schedule of Notes Payable

		June 30,		December 31,
	June 30,		December 31,
	2022		2021

On June 13, 2022, the Company, through its wholly-owned subsidiary, OWP Ventures, Inc., received an advance of $100,000 from an individual pursuant to an unsecured promissory note, maturing on January 1, 2024, that carries an 8% interest rate.	$	100,000	$	-

On June 17, 2022, the Company, through its wholly-owned subsidiary, One World Pharma, SAS, received proceeds of 230,400,000 COP, or approximately $55,821 USD, on a loan with a face value of 240,000,000 COP, or approximately $58,147 USD, from an individual pursuant to an unsecured promissory note, bearing interest at 4% per annum, due on demand. The debt discount of $2,326 USD was expensed as finance costs at the time of origination.		58,147		-

On May 31, 2022, the Company, through its wholly-owned subsidiary, One World Pharma, SAS, received proceeds of 314,640,000 COP, or approximately $76,231 USD, on a loan with a face value of 360,000,000 COP, or approximately $87,220 USD, from an individual pursuant to promissory note, security by equipment, bearing interest at 2.1% per annum, maturing on November 28, 2022. The debt discount of $10,990 USD was expensed as finance costs at the time of origination.		87,220		-

On May 30, 2022, the Company, through its wholly-owned subsidiary, One World Pharma, SAS, received a non-interest bearing loan of 20,000,000 COP, or approximately $4,846 USD, from an individual pursuant to an unsecured promissory note, due on demand.		4,846		-

On April 29, 2022, the Company, through its wholly-owned subsidiary, One World Pharma, SAS, received a non-interest bearing loan of 10,000,000 COP, or approximately $2,423 USD, from an individual pursuant to an unsecured promissory note, due on demand.		2,423		-

On March 1, 2022, the Company, through its wholly-owned subsidiary, OWP Ventures, Inc., received an advance of $400,000 from an individual pursuant to an unsecured promissory note, maturing on January 1, 2024, that carries an 8% interest rate.		400,000		-

On February 15, 2022, the Company, through its wholly-owned subsidiary, OWP Ventures, Inc., received an advance of $200,000 from an individual pursuant to an unsecured promissory note, maturing on January 1, 2024, that carries an 8% interest rate.		200,000		-

On May 4, 2020, the Company, through its wholly-owned subsidiary OWP Ventures, Inc., borrowed $119,274 from Customers Bank (“Lender”), pursuant to a Promissory Note issued by OWP Ventures to Lender (the “PPP Note”). The loan was made pursuant to the Payroll Protection Program established as part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Note carried interest at 1.00% per annum, payable monthly beginning December 4, 2020, and was due on May 4, 2022. The PPP Note could have been repaid at any time without penalty. Under the Payroll Protection Program, the Company was eligible for loan forgiveness up to the full amount of the PPP Note and any accrued interest. The forgiveness amount was equal to the amount that the Company spent during the 24-week period beginning May 4, 2020 on payroll costs, payment of rent on any leases in force prior to February 15, 2020 and payment on any utility for which service began before February 15, 2020. The maximum amount of loan forgiveness for non-payroll expenses was 40% of the amount of the PPP Note. A total of $121,372, consisting of $119,274 of principal and $2,098 of interest, was forgiven on February 11, 2022.		-		119,274

Total notes payable		852,636		119,274
Less: current maturities		152,636		119,274
Notes payable, long-term portion	$	700,000	$	-

The Company recorded interest expense pursuant to the stated interest rates on the notes payable in the amount of $20,032 and $18,987 for the six months ended June 30, 2022 and 2021, respectively.

Note 12 – Notes Payable, Related Party

Notes payable, related party, consists of the following at June 30, 2022 and December 31, 2021, respectively:

Schedule of Notes Payable Related Party

		June 30,		December 31,
	June 30,		December 31,
	2022		2021

On June 3, 2022, the Company received an advance of $10,000 from Isiah Thomas, III, our Chairman of the Board and CEO, pursuant to an unsecured promissory note due on demand that carried a 6% interest rate.	$	10,000	$	-

On May 5, 2022, the Company received an advance of $10,000 from Isiah Thomas, III, our Chairman of the Board and CEO, pursuant to an unsecured promissory note due on demand that carried a 6% interest rate.		10,000		-

On May 5, 2022, the Company received an advance of $20,000 from Dr. Kenneth Perego, II, M.D., our Vice Chairman of the Board pursuant to an unsecured promissory note due on demand that carried a 6% interest rate.		20,000		-

On December 29, 2021, the Company received an advance of $200,000 from Dr. Kenneth Perego, II, M.D., our Vice Chairman of the Board pursuant to an unsecured promissory note due January 1, 2024 that carried an 8% interest rate.		200,000		200,000

Total notes payable. related party		240,000		200,000
Less: current maturities		40,000		-
Notes payable, related party, long-term portion	$	200,000	$	200,000

The Company recorded interest expense pursuant to the stated interest rates on the notes payable, related party, in the amount of $8,604 for the six months ended June 30, 2022.

ONE WORLD PRODUCTS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The Company recognized interest expense for the six months ended June 30, 2022 and 2021, as follows:

Schedule of Interest Expenses

		June 30,		June 30,
	June 30,		June 30,
	2022		2021

Interest on convertible notes	$	29,753	$	-
Interest on notes payable		20,032		18,987
Interest on notes payable, related parties		8,604		-
Amortization of debt discounts		35,333		13,786
Amortization of debt discounts, common stock		74,414		170,033
Amortization of debt discounts, warrants		177,537		-
Interest on accounts payable		11,249		7,289
Total interest expense	$	356,922	$	210,095

Note 13 – Convertible Preferred Stock

Preferred Stock

The Company has 10,000,000 authorized shares of $0.001 par value “blank check” preferred stock, of which 500,000 shares have been designated Series A Preferred Stock and 300,000 shares have been designated Series B Preferred Stock. The shares of Series A Preferred Stock and Series B Preferred Stock are each currently convertible into one hundred (100) shares of the Company’s common stock. The Series A Preferred Stock accrues dividends at the rate of 6% per annum, payable in cash as and when declared by the Board or upon a liquidation. The shares of Series B Preferred Stock are not entitled to dividends, other than the right to participate in dividends payable to holders of common stock on an as-converted basis. As of June 30, 2022, there were 65,233 and 238,501 shares of Series A Preferred Stock and Series B Preferred Stock, respectively, issued and outstanding. The Series A and B Preferred Stock are presented as mezzanine equity on the balance sheet due because they carry a stated value of $10 and $15 per share, respectively, and a deemed liquidation clause, which entitles the holders thereof to receive proceeds thereof in an amount equal to the stated value per share, plus any accrued and unpaid dividends, before any payment may be made to holders of common stock. Each share of Preferred Stock carries a number of votes equal to the number of shares of common stock into which such Preferred Stock may then be converted. The Preferred Stock generally will vote together with the common stock and not as a separate class.

The Series A and B Preferred Stock have been classified outside of permanent equity and liabilities. the Series A Preferred Stock embodies conditional obligations that the Company may settle by issuing a variable number of equity shares, and in both the Series A and B Preferred Stock, monetary value of the obligation is based on a fixed monetary amount known at inception.

Series A Preferred Stock Issuances

No shares of Series A Preferred Stock were issued during the six months ending June 30, 2022.

Preferred Stock Dividends

The Series A Preferred Stock accrues dividends at the rate of 6% per annum, payable in cash as and when declared by the Board or upon a liquidation. The Company recognized $19,105 and $34,843 for the six months ended June 30, 2022 and 2021, respectively. A total of $118,025 of dividends had accrued as of June 30, 2022.

Series B Preferred Stock Issuances

No shares of Series B Preferred Stock were issued during the six months ending June 30, 2022.

ONE WORLD PRODUCTS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 14 – Changes in Stockholders’ Equity

Common Stock

The Company is authorized to issue an aggregate of 300,000,000 shares of common stock with a par value of $0.001. As of June 30, 2022, there were 65,861,631 shares of common stock issued and outstanding.

Common Stock Issued on Subscriptions Payable

On March 29, 2022, the Company issued 262,066 shares of common stock on a Subscriptions Payable for the December 1, 2021 award of common stock to COR IR for services.

Amortization of Stock-Based Compensation

A total of $82,260 of stock-based compensation expense was recognized from the amortization of options to purchase common stock over their vesting period during the six months ended June 30, 2022.

Note 15 – Common Stock Options

Stock Incentive Plan

On February 12, 2020, the Company’s stockholders approved our 2019 Stock Incentive Plan (the “2019 Plan”), which had been adopted by the Company’s Board of Directors (the “Board”) as of December 10, 2019. The 2019 Plan provides for the issuance of up to 10,000,000 shares of common stock to the Company and its subsidiaries’ employees, officers, directors, consultants and advisors, stock options (non-statutory and incentive), restricted stock awards, stock appreciation rights (“SARs”), restricted stock units (“RSUs”) and other performance stock awards. Options granted under the 2019 Plan may either be intended to qualify as incentive stock options under the Internal Revenue Code of 1986, or may be non-qualified options, and are exercisable over periods not exceeding ten years from date of grant. Unless sooner terminated in accordance with its terms, the Stock Plan will terminate on December 10, 2029.

The Company recognized a total of $82,260, and $654,579 of compensation expense during the six months ended June 30, 2022 and 2021, respectively, related to common stock options issued in the prior year to Officers, Directors, and Employees that are being amortized over the implied service term, or vesting period, of the options. The remaining unamortized balance of these options is $220,421 as of June 30, 2022.

Note 16 – Income Taxes

The Company accounts for income taxes under FASB ASC 740-10, which requires use of the liability method. FASB ASC 740-10-25 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.

For the six months ended June 30, 2022, and the year ended December 31, 2021, 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 June 30, 2022, the Company had approximately $9,082,000 of federal net operating losses. The net operating loss carry forwards, if not utilized, will begin to expire in 2025.

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 June 30, 2022 and December 31, 2021, respectively.

In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions.

Note 17 – Subsequent Events

Debt Financing, Related Parties

On August 5, 2022, the Company, through its wholly-owned subsidiary, OWP Ventures, Inc., received an advance of $50,000 from the Company’s Vice Chairman pursuant to an unsecured demand note that carries a 6% interest rate.

On August 2, 2022, the Company, through its wholly-owned subsidiary, OWP Ventures, Inc., received an advance of $4,500 from the Company’s Chairman and CEO, pursuant to an unsecured demand note that carries a 6% interest rate.

On July 7, 2022, the Company, through its wholly-owned subsidiary, OWP Ventures, Inc., received an advance of $5,000 from the Company’s Vice Chairman pursuant to an unsecured demand note that carries a 6% interest rate.

Increase in Authorized Shares of Series B Preferred Stock

On August 2, 2022, the Company filed a Certificate of Amendment to the Certificate of Designation of the Company’s Series B Preferred Stock with the Secretary of State of the State of Nevada increased the number of authorized shares of the Series B Preferred Stock from 300,000 to 600,000.

Relocation of Headquarters

On July 31, 2022, the Company closed its office in Las Vegas, Nevada and moved its headquarters to 2332 Galiano Street, 2^nd Floor, Coral Gables, Florida 33134.

Disposal of Fixed Assets

On August 15, 2022, the Company, through its wholly-owned subsidiary, OWP Ventures, Inc., sold its office furniture and equipment with a net book value of $15,866 for gross proceeds of $6,350, resulting in a loss on disposal of $9,516.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information contained in this Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended December 31, 2021 and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.

The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in the Form 10-K in the section entitled “Risk Factors” for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this quarterly report on Form 10-Q. The following should also be read in conjunction with the unaudited Financial Statements and notes thereto that appear elsewhere in this report.

Overview

Through our wholly-owned subsidiary, One World Pharma S.A.S, a licensed cannabis cultivation, production and distribution (export) company located in Popayán, Colombia (nearest major city is Cali). We plan to be a producer of raw cannabis and hemp plant ingredients for both medical and industrial uses across the globe. We have received licenses to cultivate, produce and distribute the raw ingredients of the cannabis and hemp plant for medicinal, scientific and industrial purposes. Specifically, we are one of the only companies in Colombia to receive seed, cultivation, extraction and export licenses from the Colombian government. Currently, we own approximately 30 acres and have a covered greenhouse built specifically to cultivate high-grade cannabis and hemp. In addition, we have entered into agreements with local farming co-operatives that include small farmers and indigenous tribe members, under which they will cultivate cannabis on up to approximately 140 acres of land using our seeds and propagation techniques, and sell their harvested products to us on an exclusive basis. We planted our first crop of cannabis in 2018, which we began harvesting in the first quarter of 2019 for the purpose of further research and development activities and quality control testing of the cannabis we have produced. We have been generating revenue from the sale of our seeds since the second quarter of 2020. From August 2021 through March 2022, we made payments of approximately $1,400,000 for the purchase of a state of the art distillation machine that we expect to be placed in service within our vertically integrated extraction facility during the third quarter of 2022. Once the equipment is placed in service, we will be one of the only companies in Colombia to both hold licenses and possess the capability to extract high-quality CBD and THC oils.

Results of Operations for the Three Months Ended June 30, 2022 and 2021:

The following table summarizes selected items from the statement of operations for the three months ended June 30, 2022 and 2021.

	Three Months Ended June 30,						Increase /
	2022			2021			(Decrease)
Revenues	$	32,864		$	42,323		$	(9,459	)
Cost of goods sold		20,840			173			20,667
Gross profit		12,024			42,150			(30,126	)

Operating expenses:
General and administrative		387,807			368,146			19,661
Professional fees		113,805			306,194			(192,389	)
Depreciation expense		12,172			13,114			(942	)
Total operating expenses:		513,784			687,454			(173,670	)

Operating loss		(501,760	)		(645,304	)		(143,544	)

Total other expense		(189,730	)		(107,890	)		81,840

Net loss	$	(691,490	)	$	(753,194	)	$	(61,704	)

Revenues

Revenues during the three months ended June 30, 2022 were $32,864, compared to $42,323 during the three months ended June 30, 2021, a decrease of $9,459, or 22%. Revenues decreased slightly as we continued to shift our focus toward producing and selling CBD and THC oils.

Cost of Goods Sold

Cost of goods sold for the three months ended June 30, 2022 were $20,840, compared to $173 for the three months ended June 30, 2021, an increase of $20,667, or 11,946%. Cost of goods sold consists primarily of labor, agricultural raw materials, depreciation and overhead.

General and Administrative Expenses

General and administrative expenses for the three months ended June 30, 2022 were $387,807, compared to $368,146 during the three months ended June 30, 2021, an increase of $19,661, or 5%. The expenses for the current period consisted primarily of compensation expenses, office rent, and travel costs. General and administrative expenses increased primarily due to increased salaries and wages and lease expenses in Colombia over the prior year. General and administrative expenses included non-cash, stock-based compensation of $29,347 and $115,322 during the three months ended June 30, 2022 and 2021, respectively.

Professional Fees

Professional fees for the three months ended June 30, 2022 were $113,805, compared to $306,194 during the three months ended June 30, 2021, a decrease of $192,389, or 63%. Professional fees included non-cash, stock-based compensation of $11,799 and $111,167 during the three months ended June 30, 2022 and 2021, respectively. Professional fees decreased primarily due to decreased stock-based compensation efforts during the current period.

Depreciation Expense

Depreciation expense for the three months ended June 30, 2022 was $12,172, compared to $13,114 during the three months ended June 30, 2021, a decrease of $942, or 7%. Depreciation expense decreased minimally during the current period.

Other Income (Expense)

Other expenses, on a net basis, for the three months ended June 30, 2022 were $189,730, compared to other expenses, on a net basis, of $107,890 during the three months ended June 30, 2021, an increase in net expenses of $81,840, or 76%. Other expenses consisted of $190,730 of interest expense, including $126,671 of stock-based finance costs on the amortization of debt discounts, as partially offset by $1,000 sublet income on our office space, for the three months ended June 30, 2022, compared to $116,634 of interest expense, including $96,106 of stock-based finance costs on the amortization of debt discounts, as partially offset by $7,500 of sublease income on sublet office space and $1,244 of interest income during the three months ended June 30, 2021.

Net Loss

Net loss for the three months ended June 30, 2022 was $691,490, or $0.01 per share, compared to $753,194, or $0.01 per share, during the three months ended June 30, 2021, a decrease of $61,704, or 8%. The net loss decreased primarily due to decreased stock-based compensation during the current period.

Results of Operations for the Six Months Ended June 30, 2022 and 2021:

The following table summarizes selected items from the statement of operations for the six months ended June 30, 2022 and 2021.

	Six Months Ended June 30,						Increase /
	2022			2021			(Decrease)
Revenues	$	43,011		$	65,605		$	(22,594	)
Cost of goods sold		30,796			7,752			23,044
Gross profit		12,215			57,853			(45,638	)

Operating expenses:
General and administrative		769,190			1,108,572			(339,382	)
Professional fees		284,855			525,657			(240,802	)
Depreciation expense		24,657			22,998			1,659
Total operating expenses:		1,078,702			1,657,227			(578,525	)

Operating loss		(1,066,487	)		(1,599,374	)		(532,887	)

Total other expense		(234,509	)		(194,037	)		40,472

Net loss	$	(1,300,996	)	$	(1,793,411	)	$	(492,415	)

Revenues

Revenues during the six months ended June 30, 2022 were $43,011, compared to $65,605 during the six months ended June 30, 2021, a decrease of $22,594, or 34%. Revenues decreased slightly as we continued to shift our focus toward producing and selling oils.

Cost of Goods Sold

Cost of goods sold for the six months ended June 30, 2022 were $30,796, compared to $7,752 for the six months ended June 30, 2021, an increase of $23,044, or 297%. Cost of goods sold consists primarily of labor, agricultural raw materials, depreciation and overhead.

General and Administrative Expenses

General and administrative expenses for the six months ended June 30, 2022 were $769,190, compared to $1,108,572 during the six months ended June 30, 2021, a decrease of $339,382, or 31%. The expenses for the current period consisted primarily of compensation expenses, office rent, and travel costs. General and administrative expenses decreased primarily due to decreased stock-based compensation over the prior year. General and administrative expenses included non-cash, stock-based compensation of $58,694 and $438,134 during the six months ended June 30, 2022 and 2021, respectively.

Professional Fees

Professional fees for the six months ended June 30, 2022 were $284,855, compared to $525,657 during the six months ended June 30, 2021, a decrease of $240,802, or 46%. Professional fees included non-cash, stock-based compensation of $23,566 and $324,241 during the six months ended June 30, 2022 and 2021, respectively. Professional fees decreased primarily due to decreased stock-based compensation efforts during the current period.

Depreciation Expense

Depreciation expense for the six months ended June 30, 2022 was $24,657, compared to $22,998 during the six months ended June 30, 2021, an increase of $1,659, or 7%. Depreciation expense increased as additional equipment was placed in service.

Other Income (Expense)

Other expenses, on a net basis, for the six months ended June 30, 2022 were $234,509, compared to other expenses, on a net basis, of $194,037 during the six months ended June 30, 2021, an increase in net expenses of $40,472, or 21%. Other expenses consisted of $356,922 of interest expense, including $251,951 of stock-based finance costs on the amortization of debt discounts, as partially offset by $1,000 sublet income on our office space, a gain on early extinguishment of debt of $121,372 on the forgiveness of a PPP Loan and $41 of interest income, for the six months ended June 30, 2022, compared to $ $210,095 of interest expense, including $170,033 of stock-based finance costs on the amortization of debt discounts, as offset by $14,500 of sublease income on sublet office space and $1,558 of interest income during the six months ended June 30, 2021.

Net Loss

Net loss for the six months ended June 30, 2022 was $1,300,996, or $0.02 per share, compared to $1,793,411, or $0.03 per share, during the six months ended June 30, 2021, a decrease of $492,415, or 27%. The net loss decreased primarily due to decreased stock-based compensation during the current period.

Liquidity and Capital Resources

The following is a summary of the Company’s cash flows provided by (used in) operating, investing, financing activities and effect of exchange rate changes on cash for the six months ended June 30, 2022 and 2021:

	2022			2021
Operating Activities	$	(905,472	)	$	(1,292,875	)
Investing Activities		(43,201	)		(223,922	)
Financing Activities		879,320			3,305,193
Effect of Exchange Rate Changes on Cash		4,472			(5,419	)
Net Increase (Decrease) in Cash	$	(64,881	)	$	1,782,977

Net Cash Used in Operating Activities

During the six months ended June 30, 2022, net cash used in operating activities was $905,472, compared to net cash used in operating activities of $1,292,875 for the six months ended June 30, 2021. The cash used in operating activities was primarily attributable to our net loss.

Net Cash Used in Investing Activities

During the six months ended June 30, 2022, net cash used in investing activities was $43,201, compared to net cash used in investing activities of $223,922 for the six months ended June 30, 2021. The cash used in investing activities consisted of purchases of fixed assets.

Net Cash Provided by Financing Activities

During the six months ended June 30, 2022, net cash provided by financing activities was $879,320, compared to net cash provided by financing activities of $3,305,193 for the six months ended June 30, 2021. The current period consisted of $879,320 of proceeds received on debt financing, compared to $268,250 of proceeds received on debt financing and $3,077,510 received on the sale of preferred and common stock, less debt repayments of $40,567, during the six months ended June 30, 2021.

Ability to Continue as a Going Concern

As of June 30, 2022, our balance of cash on hand was $54,797, and we had negative working capital of $1,800,626 and an accumulated deficit of $21,217,884. We are too early in our development stage to project future revenue levels, and may not be able to generate sufficient funds to sustain our operations for the next twelve months. Accordingly, we may need to raise additional cash to fund our operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

Off-Balance Sheet Arrangements

We have no outstanding off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operations. Critical accounting policies are those that are most important to the presentation of our financial condition and results of operations and require management’s subjective or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments.

While our significant accounting policies are more fully described in notes to our consolidated financial statements appearing elsewhere in this Form 10-Q, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating our reported financial results and affect the more significant judgments and estimates that we used in the preparation of our financial statements.

Revenue Recognition

Inventory

Stock-Based Compensation

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2022, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There have been no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) or in other factors that occurred during the period of our evaluation or subsequent to the date we carried out our evaluation which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events. There can be no assurance that any system of controls and procedures will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not a party to any legal or administrative proceedings that we believe, individually or in the aggregate, would be likely to have a material adverse effect on our financial condition or results of operations.

ITEM 1A. RISK FACTORS

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.

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

The following issuances of equity securities by the Company during the three month period ended June 30, 2022 were exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and Regulation D thereunder:

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. Exhibits

Exhibit		Description
2.1		Agreement and Plan of Merger dated February 21, 2019, among the Registrant, OWP Merger Subsidiary Inc. and OWP Ventures, Inc. (incorporated by reference to Exhibit 2.1 of the Form 8-K filed with the Securities and Exchange Commission by One World Pharma, Inc. on February 25, 2019)
2.2		Agreement and Plan of Merger dated October 11, 2021, between One World Pharma, Inc. and One World Products, Inc. (incorporated by reference to Exhibit 2.1 of the Form 8-K filed with the Securities and Exchange Commission by One World Pharma, Inc. on November 30, 2021)
2.3		Articles of Merger Pursuant to NRS 92A.200 as filed with the Nevada Secretary of State on November 23, 2021 (incorporated by reference to Exhibit 2.1 of the Form 8-K filed with the Securities and Exchange Commission by One World Pharma, Inc. on November 30, 2021)
3.1		Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 of the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on November 24, 2014)
3.2		Certificate of Amendment to Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 8, 2019)
3.3		Certificate of Amendment to Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 25, 2020)
3.4		Certificate of Designation of Series A Preferred Stock of the Registrant dated June 1, 2020 (incorporated by reference to Exhibit 3.4 of the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on June 26, 2020)
3.5		Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 of the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on November 24, 2014)
3.6		Certificate of Designation of Series B Preferred Stock of the Registrant dated February 2, 2021 (incorporated by reference to Exhibit 3.1 of the Form 8-K filed with the Securities and Exchange Commission on February 8, 2021)
3.7		Certificate of Amendment to Certificate of Designation of the Series B Preferred Stock of One World Products, Inc., Pursuant to NRS 78.1955, filed with the Secretary of State of the State of Nevada on August 2, 2022 (incorporated by reference to Exhibit 3.1 of the Form 8-K filed with the Securities and Exchange Commission on August 4, 2022)
4.1		Description of Securities (incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form 10-K filed with the Securities and Exchange Commission on April 15, 2021)
4.2		Promissory Note of One World Pharma, Inc. in the principal amount of $290,000 issued to AJB Capital Investments LLC, dated January 20, 2021 (incorporated by reference to Exhibit 4.1 of the Form 8-K filed with the Securities and Exchange Commission by One World Pharma, Inc. on January 25, 2021)
4.3		Promissory Note of One World Pharma, Inc. in the principal amount of $750,000 issued to AJB Capital Investments LLC, dated September 24, 2021 (incorporated by reference to Exhibit 4.1 of the Form 8-K filed with the Securities and Exchange Commission by One World Pharma, Inc. on September 27, 2021)
4.4		Common Stock Purchase Warrant to purchase 1,500,000 shares of common stock of One World Pharma, Inc. issued to AJB Capital Investments LLC, dated September 24, 2021 (incorporated by reference to Exhibit 4.2 of the Form 8-K filed with the Securities and Exchange Commission by One World Pharma, Inc. on September 27, 2021)
4.5		Common Stock Purchase Warrant to purchase 2,000,000 shares of common stock of One World Pharma, Inc. issued to AJB Capital Investments LLC, dated September 24, 2021 (incorporated by reference to Exhibit 4.3 of the Form 8-K filed with the Securities and Exchange Commission by One World Pharma, Inc. on September 27, 2021)
10.1		Promissory Note between OWP Ventures, Inc. and Dr. Kenneth Perego, II, dated December 29, 2021 (incorporated by reference to Exhibit 10.1 of the Form 10-K filed with the Securities and Exchange Commission by One World Products, Inc. on April 15, 2022)
10.2		Addendum to Commercial Lease dated November 1, 2021, between Ripper Series, LLC and OWP Ventures, Inc. (incorporated by reference to Exhibit 10.2 of the Form 10-K filed with the Securities and Exchange Commission by One World Products, Inc. on April 15, 2022)
10.3		Commercial Lease dated December 2, 2018, between Larry R. Haupert dba Rexco and One World Pharma S.A.S. (incorporated by reference to Exhibit 10.3 of the Form 8-K filed with the Securities and Exchange Commission by One World Pharma, Inc. on February 25, 2019)
10.4		Commercial Lease dated October 16, 2018, between Ripper Series, LLC and OWP Ventures, Inc. (incorporated by reference to Exhibit 10.4 of the Form 8-K filed with the Securities and Exchange Commission by One World Pharma, Inc. on February 25, 2019)
10.5		One World Pharma, Inc. 2019 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 25, 2020)
10.6		Form of Stock Option Grant Notice for grants under the 2019 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 25, 2020)
10.7		Form of Option Agreement for grants under the 2019 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 25, 2020)
10.8		Securities Purchase Agreement, dated September 24, 2021, between One World Pharma, Inc. and AJB Capital Investments LLC (incorporated by reference to Exhibit 10.1 of the Form 8-K filed with the Securities and Exchange Commission by One World Pharma, Inc. on September 27, 2021)
10.9		Security Agreement, dated September 24, 2021, between One World Pharma, Inc. and AJB Capital Investments LLC (incorporated by reference to Exhibit 10.2 of the Form 8-K filed with the Securities and Exchange Commission by One World Pharma, Inc. on September 27, 2021)
10.10		Commercial Lease Agreement dated November 26, 2021, between R&B Inversiones S.A.S. and One World Pharma S.A.S. (incorporated by reference to Exhibit 10.10 of the Form 10-Q filed with the Securities and Exchange Commission by One World Products, Inc. on May 16, 2022)
10.11		Residential Lease Agreement dated February 14, 2020, between Grupo Empresarial OIKOS S.A.S. and One World Pharma S.A.S. (incorporated by reference to Exhibit 10.11 of the Form 10-Q filed with the Securities and Exchange Commission by One World Products, Inc. on May 16, 2022)
31.1*		Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a)
31.2*		Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a)
32.1*		Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Schema Document
101.CAL*		Inline XBRL Calculation Linkbase Document
101.DEF*		Inline XBRL Definition Linkbase Document
101.LAB*		Inline XBRL Labels Linkbase Document
101.PRE*		Inline XBRL Presentation Linkbase Document
104*		Cover Page Interactive Data File (embedded within the Inline XBRL document)

*	Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 22, 2022

	One World Products, Inc.

	/s/ Isiah L. Thomas III
	Isiah L. Thomas III
	Chief Executive Officer
	(Principal Executive Officer)

	/s/ Timothy Woods
	Timothy Woods
	Chief Financial Officer
	(Principal Financial Officer)