credit losses over the contractual life of the instrument is to be recorded as of the end of a reporting period as an allowance to offset the amortized cost basis, resulting in a net presentation of the amount expected to be collected on the financial instrument. For most instruments, entities must apply the standard using a cumulative effect adjustment to opening equity as of the beginning of the fiscal year of adoption.

Note 1 Summary of Significant Accounting Policies (Continued)

The Company adopted the CECL standard effective January 1, 2023, using the required modified retrospective approach. The impact of the adoption was not considered material to the financial statements.

Note 2 Going Concern

The consolidated financial statements have been prepared assuming the Company will continue as a going concern. Management has evaluated conditions and events, in the aggregate, regarding the Company's ability to meet its financial obligations as they become due within one year from the date that these consolidated financial statements were available to be issued. Management's evaluation considered only relevant conditions and events that are known and reasonably estimable at the date the consolidated financial statements were available to be issued.

The Company has generated losses from its operations, has net capital deficiencies in 2024, 2023 and 2022, respectively and has consolidated bank overdrafts in 2024 and 2023. The Company has projected that the 2025 budgeted operations will be sufficient to fund the Company's operations and strategic objectives and to meet its obligations as they become due. An integral part of the Company's plan includes the Company streamlining its operations by implementing cost cutting measures.

Source: Item 23 — RECEIPT (FDD pages 42–235)