What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-04-03 compared with 2022-03-31 · 72 added, 241 removed, 240 unchanged (57% of the section changed)

26 unchanged sentences

and the “Company” mean Jupiter Wellness, Inc.

were originally incorporated in the State of Delaware on October 24, 2018.

Our principal business address is 725 N.

Hwy A1A, Suite C-106,

Jupiter, FL 33477.

Wellness, Inc.

is a cutting-edge developer of cannabidiol (CBD) based medical therapeutics and wellness products.

The Company’s

clinical pipeline of prescription CBD-enhanced skin care therapeutics address indications including eczema, burns, herpes cold sores,

and skin cancer.

We are in the early stage of manufacturing, distributing, and marketing a diverse line of consumer products infused

We have a proprietary, line of products:

CaniSun, CaniSkin and CaniDermRX.

Under the CaniSun brand, we are marketing patent

pending CBD-infused sun care lotion formulas containing various sun protection factors, or SPFs.

In addition, we are exploring the use

of CBD with other prescription and/or over-the-counter, or OTC, consumer products that have potentially therapeutic and medical applications.

Specifically, we are exploring the use of such topical solutions for the treatment of eczema, dermatitis (JW-100), and actinic keratosis

(JW-_100), a non-prescription lotion/lip balm (JW-200) for the treatment of symptoms of cold sores, and a prescription product for the

treatment of burns (JW-101).

The CaniDermRX (JW-100) topical solution for the treatment of eczema dermatitis is the lead product candidate

and will be further tested in humans as an investigational cosmetic ingredient followed by clinical trials subject to the regulations

of the United States Food and Drug Administration (“FDA”) under an investigational new drug, or IND, application.

February 2021, we announced the results of our novel Cannabidiol-Aspartame combination treatment JW-100 clinical trial which has shown

it significantly Reduces ISGA Score in Eczema patients.

A double blinded placebo controlled interventional study was conducted.

were assigned to apply, at home, one of three treatments:

JW-100 (a CBD and aspartame combination topical formulation), a CBD only topical

formulation, or a placebo topical formulation.

After 14 days, the average reduction in the Investigators Static Global Assessment (ISGA)

score was calculated for each group.

Additionally, the proportion of subjects achieving (ISGA) score 0 (clear) or 1 (almost clear) with

at least 2 grade improvement from baseline was recorded for each arm of the study.

50% of subjects in the JW-100 arm achieved ISGA clear

or almost clear (1 or 2) with at least a 2-grade improvement from baseline after treatment versus 20% and 15% in the CBD-only and placebo

arms, respectively.

The percentage of subjects achieving clear or almost clear with at least a 2-grade improvement from baseline was

found to be statistically significant (p=0.028).

JW-100, a novel topical formulation containing CBD and aspartame, was shown to significantly

reduce ISGA score in atopic dermatitis patients after two weeks of use.

The combination of CBD and aspartame was more effective at reducing

ISGA scores than CBD alone.

In parallel, we plan to initiate the development of other products.

We originally anticipated developmental

studies to be completed in 2020, however, these studies were delayed due to COVID-19.

We are also actively seeking to acquire or license

products in the OTC skin care market that can be infused with CBD and marketed under our CaniSkin and CaniDermRX brand names.

be no assurances that we will acquire or enter into such partnership or licensing agreements.

November 2021, Jupiter Wellness received an official written response from a Type B pre-Investigational New Drug (IND) meeting with the

Food and Drug Administration (FDA) for JW-100, a topical drug the treatment of eczema.

The main purpose of the pre-IND meeting was

to evaluate the drug development plan for JW-100.

Jupiter Wellness believes that the written response from the FDA supports the Company’s

approach and its overall drug development strategy to enable the filing of an IND for its clinical studies on JW-100.

November 16, 2021, Jupiter Wellness announced the results of a double-blinded placebo controlled clinical trial on JW-300 showing efficacy

for the treatment of developing burns (sunburn).

endocannabinoid system, which is a body system affected by CBD, plays a pivotal role in maintaining a healthy skin through modulating

pain sensation, cell proliferation and inflammation.

Our strategy for treatment of skin indications is, therefore, to focus on the use

of CBD containing topical formulations and to explore potential combinations of CBD and other agents that may augment and act synergistically

We will explore this strategy by conducting controlled clinical trials to try to ultimately gain FDA approval for specific

November 30, 2020 the Company acquired SRM Entertainment, Limited, a Hong Kong Special Administrative Region of the People’s Republic

of China limited company (“SRM”).

SRM has relationships with and supplies the amusement park industry with exclusive products

that are often only available to consumers inside the relevant amusement park, entertainment venues and theme hotels in Orlando Florida,

Beijing China, Japan and other places throughout the worldwide theme park industry.

our CaniSun Brand, we developed a patent pending CBD-infused sunscreen with broad-spectrum SPF protection.

We have completed lab testing

for CBD solubility–infusing clear, colorless, odorless, and 99.5% pure CBD isolate with three different sun care active ingredients,

homosalate, octisalate and octocrylene, which have already been approved by the FDA.

The CBD-infused sun care market is fairly nascent

in the United States;

we believe that there are currently no major competitors in the category.

We see an opportunity to become the leading

manufacturer of CBD-infused sun care products, marketing the CaniSun brand through an extensive digital and social media awareness campaign.

We announced the launch of our CaniSun sun care line of SPF 30, SPF 55 and SPF 50 face lotion on June 6, 2019.

We also sell our CBD-infused

lip balm and CBD-infused SPF 30 sunscreen spray on our website Canisun.com.

currently have additional CaniSun products in various stages of development as follows:

SPF 30 Lip Balm, Peppermint and Acai Fragrance

SPF 15 sunscreen daily lotion;

Mineral-based

sunscreen lotions (SPF 30 and 50).

of the products listed above are in the developmental stage, whereby we are finalizing the formula to be used in each product, respectively.

For CBD-infused product candidates in development, such as our CBD-infused SPF 30 Lip Balm and CBD-infused SPF 15 sunscreen lotion, we

have already identified the sun care active ingredient formula (which has already been FDA approved) to be infused with CBD.

respective formulas for each of our product candidates are created, the product candidates will undergo three months of stability testing.

Provided that the product candidates pass the stability testing, we intend to sell the products on our CaniSun website.

The formula for

our mineral-based sunscreen lotion (SPF 30 and 50) (product iii) above) includes certain minerals instead of chemicals typically used

in sunscreen lotions.

we believe that our currently offered sunscreen products comply with the FDA Final Rule for sunscreen products under 21 CFR 352 Sunscreen

products for Over-the-Counter Human Use.

Therefore, we believe that our sunscreen products fall within the FDA monograph.

premarket approval and testing is not required.

Our products have been tested for SPF Evaluation (SPF rating), Critical Wave Length (Broad

Spectrum claim) and Water Resistance, each of which is defined within the monograph and labeled accordingly.

of the testing on these products is standard testing for suncare products.

Such testing protocols are not intended to test for any effects

of adding CBD.

In addition to these tests that were conducted to support the claims on the package, each batch is also tested for appearance,

color, odor, pH, viscosity, specific gravity, analytical for the sunscreen active ingredients, and microbial content testing.

products are tested each time they are manufactured.

DCR Labs manufactures our products and has represented to us that it is compliant

with the FDA’s Current Good Manufacturing Practice, or CGMP, regulations in accordance with 21 CFR 210/211 required for Over-the-Counter

drug products.

DCR Labs has self-imposed health and safety standards to ensure compliance with the FDA’s CGMPs.

expect to continually update and expand upon our corporate website and further refine our online retail strategies on an ongoing basis.

JupiterWellness.com is our primary corporate website, which will serve as the primary source of information about us for investors and

contain press releases, clinical trial pipeline, lab reports, blog posts, and additional information about each of our brands.

We anticipate

that each brand will have its own front-facing website dedicated to retail sales and brand specific information.

For example, our line

of sun care products, CaniSun, has its own website at CaniSun.com and allows for online retail purchase of the entire product line.

we expand our brands (CaniSkin and CaniDermRX), we anticipate utilizing the same strategy and dedicating a new e-commerce website to

each brand moving forward.

We are also building a website dedicated to servicing our wholesale and larger distributor clients.

will have more information about each product and provide a central location for larger retailers to find more in-depth information about

all of our brands in one place.

plan to leverage our websites with a social media presence across multiple platforms designed to utilize product reviews to increase

brand loyalty, brand recognition and sales.

The references to our website in this prospectus are inactive textual references only.

information on our website is neither incorporated by reference into this prospectus nor intended to be used in connection with this

We also see growth potential in developing retail locations.

We intend to utilize cross-promotion marketing campaigns with

our products and product category expansion that leverages our existing distribution channels.

We have built an e-commerce platform designed

to connect us directly to consumers.

We use the platform to sell products, educate customers and build brand loyalty.

Brand and CaniDermRX Brand

are currently developing other products such as CBD-infused skin care lotion under the CaniSkin brand.

Specifically, a CBD-infused moisturizing

face serum is under development.

We must first finalize the formula to be used in the face serum, and, once approved, the product candidate

will undergo stability testing.

We intend to sell the product, provided it first passes stability testing, on our website for CaniSkin

Additionally, we are developing innovative dermatological treatments under the CaniDermRX brand that are specialized to treat

atopic dermatitis and other dermatological conditions such as burns, skin cancer and herpes cold sores, respectively.

Subject to obtaining

FDA approval, we intend for our experimental-stage product for the treatment of atopic dermatitis to compete with Dupixent, an FDA-approved

product for treating atopic dermatitis, and for our experimental-stage product for the treatment of herpes cold sores to compete with

Silvadene and Abreva, FDA-approved products for treating herpes cold sores.

These products require more extensive testing to show both

safety and efficacy.

addition, we plan to seek acquisition opportunities in the branded consumer products space, including but not limited to other OTC therapeutic

brands and skin care brands that can be developed, manufactured, marketed and distributed under our CaniSkin and CaniDermRX brand names.

filed a provisional patent number 62/884,955 on 08/09/2019 on an Aspartame/CBD combination and intend to develop products containing

a combination of CBD and Aspartame under the CaniDermRX name for the treatment of pain and inflammation.

On February 11, 2021, the US

Patent Published our US Patent Application 20210038513 and on April 5, 2021 we filed the International filing through PCT Application

PCT/US 2020/045408.

On April 6, 2021, we filed a PCT Application No.:

PCT/US2021/025947* on CBD sunscreens.

believe that our CaniDermRX product candidates have the potential to treat many skin indications such as atopic dermatitis, pruritis-itch,

non-atopic dermatitis/eczema, psoriasis, dermatomyositis, scleroderma, seborrheic dermatitis, actinic keratosis, epidermolysis bullosa

and cutaneous neoplasias.

Aspartame is a rigorously tested food ingredient.

Reviews by major governmental regulatory bodies have previously

found the ingredient safe for consumption at higher levels than we contemplate using in our CaniDermRX product candidates.

that our formulations that include Aspartame, such as topical crème, lip balm, powder and dog treats, are well-tolerated by, and

safe for, users.

We believe that infusing CBD in our products may help alleviate irritation that may be caused by applying sun care products

and may lead to reduced inflammation.

In human skin, receptors of the endocannabinoid system are found in differentiated keratinocytes,

hair follicle cells, sebaceous glands, immune cells, and sensory neurons.

Activation of cannabinoid receptor type 2, or CB2, for which

CBD is a ligand receptor in these cells has been shown to reduce pain and itch sensation, regulate keratinocyte differentiation and proliferation,

decrease hair follicle growth, and modulate the release of damage-induced keratins and inflammatory mediators to control the homeostasis

of the skin environment..

November 30, 2020, we entered into and closed the Exchange Agreement with SRM, a Hong Kong Special Administrative Region of the People’s

Republic of China limited company and wholly owned subsidiary of Vinco, and SRM Shareholders, pursuant to which we acquired 100% of the

SRM Common Stock from the SRM Shareholders in exchange for 200,000 shares of the Company’s common stock, the resale of which is

subject to a leak out provision and escrow of 50,000 shares of the Company’s common stock.

Upon closing, and pursuant to the Exchange

Agreement, the Company delivered the 150,000 shares of its common stock to SRM and placed 50,000 shares in escrow (“Escrow Shares”).

Pursuant to the Exchange Agreement, the Company shall release the Escrow Shares upon SRM generating $200,000 in cash receipts and revenue

prior to January 15, 2021.

The Escrow shares have not been released as of the date hereof.

Pursuant to the Exchange Agreement, the Company

assumed all of the financial obligations of SRM, as well as its employees and offices.

As a result of the Exchange Agreement, SRM became

a wholly-owned subsidiary of the Company.

has relationships with and supplies the amusement park industry with exclusive products such as toys, lights, fans and other items that

are sold in amusement parks.

SRM has developed, manufactured and supplied the amusement park industry with exclusive products that are

often only available to consumers inside the relevant amusement park, entertainment venues and theme hotels in Orlando Florida, Beijing

China, Japan and other places throughout the worldwide theme park industry.

SRM has developed unique products in conjunction with suppliers

of products for core licensed items for major well-known brands, themes, characters and movies.

developed by SRM are generally shipped directly to the theme park without warehousing at the Company’s facilities.

have long-term agreements with its customers, and instead develops products on an item-by-item basis subject to purchase orders from

its customers.

SRM, we additionally intend to seek to sell our sun care products in the amusement parks.

We are currently developing a line of non-CBD

infused sun care products for sale in the amusement parks.

Wellness is committed to supporting health and wellness by developing innovative solutions to a range of conditions.

We take pride in

our research and development of over-the-counter (OTC) products and intellectual property, which aim to address some of the most prevalent

health and wellness concerns today.

Our product pipeline includes a diverse range of products, such as hair loss treatments, eczema creams,

vitiligo solutions, and sexual wellness products, that cater to different health and wellness needs.

We are dedicated to staying up-to-date

with the latest scientific research and technology, ensuring that our products are effective, safe, and meet the highest industry standards.

achieve our mission, we rely on a team of highly skilled and experienced professionals who are committed to advancing our vision of health

and wellness.

Our team includes scientists, researchers, product developers, and business experts who collaborate to create new products

and enhance existing ones.

We also partner with industry leaders and organizations to leverage the latest technologies and expand our

generate revenue through various channels, including the sales of our OTC and consumer products, as well as licensing royalties.

products are available through various retailers and e-commerce platforms, making them accessible to a broad customer base.

Additionally,

we collaborate with other companies to license our intellectual property, creating additional revenue streams and expanding our global

signed agreements to license JW-700 to Taisho, a $2.6 billion revenue company and Japan’s leading seller of minoxidil products.

Taisho plans on launching the product commercially in 2024.

In India, the Company signed an agreement with Cosmofix Technovation Pvt

Ltd and Sanpellegrino Cosmetics to license its JW-700 and Photocil products.

Additional licensing opportunities for these products are

being pursued primarily in overseas markets.

Accounting Policies

management’s discussion and analysis of our financial condition and results of operations is based on our unaudited financial statements

for the year ended December 31, 2021 and 2020 and audited financial statements for the year ended December 31, 2021 and 2020, which have

management’s discussion and analysis of our financial condition and results of operations is based on our audited financial statements for the year ended December 31, 2022 and 2021, which have

been prepared in accordance with United States generally accepted accounting principles, or U.S.

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policies relate to the more significant areas involving management’s judgments and estimates.

financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US

GAAP”) and are expressed in United States Dollars.

financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America

(“US GAAP”) and are expressed in United States Dollars.

Significant accounting policies are summarized below:

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a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying

If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair

If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to

its fair value.

The fair values of the reporting units are estimated using market and discounted cash flow approaches.

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shares would be to decrease the loss per share.

For the Years

Ended December 31,

$ (15,223,028 )

for basic earnings per share - Weighted-average common shares issued

outstanding during the period

for diluted earnings per share

(loss) per share

$ (28,100,245 )

Denominator for basic earnings per share - Weighted-average common shares issued and outstanding during the period

Denominator for diluted earnings per share

Basic (loss) per share

Diluted (loss) per share

consider all short-term investments with a maturity of three months or less when purchased to be cash and equivalents for purposes of

10 unchanged sentences

is based upon a review of outstanding receivables, historical collection information, and existing economic conditions.

As of December

31, 2020 the Company recorded an allowance of $118,761 against accounts receivable acquired in connection with the acquisition of SRM

Entertainment and as of December 31, 2021, the Company had recognized no additional allowance for doubtful collections.

During the years

ended December 31, 2022 and 2021, the Company recognized no allowance for doubtful collections.

Value of Financial Instruments

22 unchanged sentences

interest and penalties associated with audits is to record such items as a component of income tax expense.

Company’s deferred tax asset at December 31, 2021 consists of net operating loss carry forwards calculated using federal and state

effective tax rates equating to approximately $4,865,890 less a valuation allowance in the amount of approximately $4,865,890.

of the Company’s lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance in the years ended

December 31, 2021 and 2020.

The Company’s deferred tax

asset at December 31, 2022 and 2021 consists of net operating loss carry forwards calculated using federal and state effective tax rates

equating to approximately $6,714,609 and $4,865,890, respectively.

Due to the Company’s lack of earnings history, the deferred tax

asset has been fully offset by a valuation allowance of $6,714,609 and $4,865,890 for the years ended December 31, 2022 and 2021.

and Development

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Improvements to Nonemployee Share-Based Payment Accounting.” These amendments expand the scope of Topic 718, Compensation

- Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees

- Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to non-employees

for goods or services.

Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned.

value of common stock issued or payable from Inception through December 31, 2020 were based upon the last sales price of our common stock

to a third party.

From January through September 2019, we had multiple sales of common stock at $0.25 per share.

From September through

October 2020, we sold our stock at $1.00 per share.

Issuances and grants throughout 2019 and through October 2020 were all based upon

the last sales price for sales of our stock for cash to third parties.

All sales subsequent to October 2020 use our closing share price

on the Nasdaq exchange as a basis for valuing our stock grants.

Issued Accounting Pronouncements

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following table provides selected financial data about us for the year ended December 31, 202 2 and 2021, respectively.

Profit (Loss)

Cost of Sales

Gross Profit (Loss)

Total expenses

$ (15,223,028

2 unchanged sentences

The large increase is due to the Company having more nominal-like operations during 2022.

In 2020, Covid had a negative impact

on the revenues of the Company with the closure of beached and theme parks and which did not start opening until the end of the first

quarter 2021..

had total operating expenses of $28,635,730 for the year ended December 31, 2021 compared to $6,730,300 for the year ended December 31,2019.

expenses for the year ended December 31, 2021 totaling $28,635,730 were in connection with our daily operations as follows:

In 2021 and 2020, Covid had a negative

impact on the revenues of the Company with the closure of Amusement and theme parks and which were not fully open until the end of 2021.

Operating Expenses and other income

We had total operating

expenses and other income of $16,249,385 for the year ended December 31, 2021 compared to $28,635,730 for the year ended December

Operating expenses for the year

ended December 31, 2022 totaled $16,249,385 were in connection with our daily operations as follows:

(i) marketing expenses of $84,689;

(ii) research and development of $16,249,385 which included clinical trials;

(iii) legal and professional expenses of $3,579,148 primarily

for due diligence and legal work on two proposed mergers and litigation along with corporate advisory services, registration statement

preparation fees, general corporate governance fees;

(iv) rent of $175,038;

(v) depreciation and amortization of $95,805;

and administrative expenses of $3,419,561, consisting of payroll and related taxes, travel, meals and entertainment, office supplies and

expense and other normal office and administration expenses;

(vii) stock based compensation of $4,357,372 consisting primarily of the

fair value of options and warrants;

(viii) an impairment to a promissory note of $1,000,000;

(ix) an impairment to intellectual Property

of $1,450,000;

(x) net interest expense of $1,283,106, which includes $1,104,477 fair value of warrants and (xi) net other income of $1,718.

expenses for the year ended December 31, 2021 total ed $28,635,730 were in connection with our daily operations as follows:

(i) marketing

14 unchanged sentences

(x) net interest expense of $1,728,783, which includes $1,446,530 fair value of warrants and (xi) net other income

of $699,704, which includes a $669,200 gain from an Omnibus Settlement relating to Magical Beasts Acquidition.

expenses for the year ended December 31, 2020 were in connection with our daily operations as follows:

(i) marketing expenses of $82,367;

(ii) research and development of $308,367;

(iii) legal and professional expenses of $837,698, consisting of corporate advisory services,

registration statement preparation fees, general corporate governance fees;

(iv) rent of $61,797;

(v) depreciation and amortization of

(vi) general and administrative expenses of $1,784,456, consisting of payroll and related taxes, travel, meals and entertainment,

office supplies and expense and other normal office and administration expenses;

(vii) stock based compensation of $2,398,140;

an impairment to Goodwill of $308,690;

(ix) an impairment to Intangible Assets of $731,628 and (x) net interest expense of $113,765.

of $699,704, which includes a $669,200 gain from an Omnibus Settlement relating to Magical Beasts Acquisition.

Income/Losses

losses were $28,100,245 and $6,289,205 for the years ended December 31, 2021 and 2020, respectively.

losses were $15,223,028 and $28,100,245 for the years ended December 31, 2022 and 2021 ,

respectively.

believe that inflation has had a negligible effect on operations since inception.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis