What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-08-14 compared with 2024-05-14 · 201 added, 107 removed, 120 unchanged (72% of the section changed)

12 unchanged sentences

are engaged in the development, marketing, sale, and distribution of plant-based, dehydrated fruit and vegetable snacks and powders.

Our products have historically been manufactured for us by two contract manufacturers, one based in the Republic of Chile, and the other

in the Republic of Peru.

The manufacturing facility in Peru houses our new large-scale continuous through-put dehydration machine that

completed its first production run in the first quarter of 2023, and which substantially increased

our production capacity.

Our dehydrated fruit and vegetable products are produced using a new proprietary dehydration technology licensed

by us from a third party.

Our products have historically been manufactured for us by two contract manufacturers, one based in the Republic of Chile, and the

other in the Republic of Peru.

The manufacturing facility in Peru houses our new large-scale continuous through-put dehydration

machine that completed its first production run in the first quarter of 2023, and which

substantially increased our production capacity.

Our dehydrated fruit and vegetable products are produced using a new proprietary

dehydration technology licensed by us from a third party.

Our customers are primarily located throughout the United States.

we decided to initiate our own production facility in Peru to become vertically integrated.

Our new factory is currently being built

out and expected to be online and operational by October 2024.

We have two large-scale REV machines on order from Enwave Corporation, a

REV 100 and REV 120 machine.

Both are currently in transit to the Peru facility.

We also purchased a small REV 10 R&D machine

that is also being delivered to Peru for installation into our new facility.

In addition, we expect to move the REV 60 machine that is installed at our prior leased facility to our new facility in the near term .

our licensed technology platform, we believe our lines of both branded and private-labeled food products positively address current consumer

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ours in certain of their stores.

In April 2024, we announced that we had entered into an additional contract with this retailer that

is expected to result in our products being placed in a total of 1,400 of its stores in September, 2024, and increase the total annualized

revenues that we may generate from this retailer to $8 million.

In April 2024, we received a commitment from this retailer to carry another product of

ours in their stores.

Based on this most recent commitment, we anticipate that our products will be carried in a total of 1,400

of this retailer’s stores in September 2024, which will increase the total annualized revenues that we may generate from this retailer to $8 million.

plan to grow revenues strategically by penetrating the multi-billion dollar grocery market opportunity presented by our current product

6 unchanged sentences

Bulk Avocado Powder, dried avocado pieces and other fruit powders/pieces.

are currently developing additional products, including chocolate covered fruit items and private label products for large retailers.

are currently developing additional products, including dragon fruit and private label products for large retailers.

Concern Uncertainty

of March 31, 2024, the Company has incurred recurring losses from operations resulting in an accumulated deficit of $13,861,508, with

working capital of only $399,444.

of June 30, 2024, the Company has incurred recurring losses from operations resulting in an accumulated deficit of $14,804,062, with

working capital of $1,302,986.

We are too early in our development stage to project revenue with a necessary level of certainty;

we may not have sufficient funds to sustain our operations for the next twelve months and we may need to raise additional cash to fund

our operations.

therefore, we may not have sufficient funds to sustain our operations for the next twelve months and we may need to raise additional

cash to fund our operations.

These factors raise substantial doubt about our ability to continue as a going concern.

The Company continues to develop

its operations.

In the event sales do not materialize at the expected rates, management would seek additional financing or would attempt

to conserve cash by further reducing expenses.

There can be no assurance that we will be successful in achieving these objectives.

condensed 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 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.

The Company continues

to develop its operations.

In the event sales do not materialize at the expected rates, management would seek additional financing or

would attempt to conserve cash by further reducing expenses.

There can be no assurance that we will be successful in achieving these

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.

to our Equipment in Peru;

5 unchanged sentences

Although we have been able to continue

to fulfill orders by shifting fulfillment to other manufacturing sources, our costs of goods are expected to increase as a result.

addition, if we are unable to regain access to our dehydration machine and utilize it for the production of our products, our operating

results may be materially and adversely affected.

In addition, during 2023, we recognized $761,085

of impairment expense, consisting of $485,265, $243,305 and $32,515 on the collectability of a note receivable, VAT taxes receivable

and prepaid inventory, respectively , owed to us by NXTDried Superfoods.

Peru Facility Lease

Given the situation with NXTDried Superfoods, we were

required to shift fulfillment of orders to alternative manufacturing sources.

On May 10, 2024 we entered into a ten-year lease for a 50,000

square-foot food processing plant located in Peru.

We expect to relocate our dehydration machine to the Peru Facility along with a new

large-scale machine we recently ordered form Enwave, and resume our Peruvian manufacturing operations there in the third quarter of 2024.

The lease of the Peru Facility requires us to make monthly lease payments of $8,000 in the first two years of the lease, $20,000 in the

third year of the lease, $22,000 in the fourth year of the lease, $24,000 in the fourth year of the lease, and $25,000 thereafter.

lease also has a 10-year renewal option, and a buy-out option under which we may purchase the Peru Facility for $1,865,456.

In connection with our lease of the Peru Facility,

we purchased a first position mortgage receivable in the amount of $1,267,000, which is secured by the Peru Facility and was owed by the

landlord of the Peru Facility to its former tenant, for a purchase price of $1,267,000, of which $275,000 was paid by us on May 10, 2024.

The remaining $992,000 will be due and payable by us on August 10, 2024.

of Operations for the Three Months Ended March 31, 2024 and 2023

following table summarizes selected items from the statement of operations for the three months ended March 31, 2024 and 2023, respectively.

of goods sold

and administrative

to fulfill orders by shifting fulfillment to other manufacturing sources, our costs of goods have increased as a result.

In addition, during 2023, we recognized $761,085 of impairment

expense, consisting of $485,265, $243,305 and $32,515 on the collectability of a note receivable, VAT taxes receivable and prepaid inventory,

respectively , owed to us by NXTDried Superfoods.

Facility Lease

the situation with NXTDried Superfoods, we were required to shift fulfillment of orders to alternative manufacturing sources.

10, 2024 we entered into a ten-year lease for a 50,000 square-foot food processing plant located in Peru.

We expect to relocate our dehydration

machine to the Peru Facility along with a new large-scale machine we recently ordered form Enwave, and resume our Peruvian manufacturing

operations there in the third quarter of 2024.

The lease of the Peru Facility requires us to make monthly lease payments of $8,000 in

the first two years of the lease, $20,000 in the third year of the lease, $22,000 in the fourth year of the lease, $24,000 in the fourth

year of the lease, and $25,000 thereafter.

The lease also has a 10-year renewal option, and a buy-out option under which we may purchase

the Peru Facility for $1,865,456.

connection with our lease of the Peru Facility, we paid $275,000 on May 10, 2024, toward the purchase of a first position mortgage

receivable in the amount of $1,267,000, which is secured by the Peru Facility and was owed by the landlord of the Peru Facility

to its former tenant, for a purchase price of $1,267,000.

The remaining $992,000 was due and payable by us on August 10, 2024, subject to certain requirements which haven’t yet been met, therefore the Company has deferred payment until

a later date, to be determined.

of Operations for the Three Months Ended June 30, 2024 and 2023

following table summarizes selected items from the statement of operations for the three months ended June 30, 2024 and 2023, respectively.

Three Months Ended

Cost of goods sold

Operating expenses:

General and administrative

Salaries and benefits

Professional services

Total operating expenses

Operating loss

Other income (expense):

Interest income

Interest expense

Total other income (expense)

net revenue for the three months ended June 30, 2024 was $1,362,986, compared to $343,065 for the three months ended June 30, 2023, an

increase of $1,019,921, or 297%.

The increase in revenue was primarily due to increased sales to our largest customer during the three

months ended June 30, 2024.

of Goods Sold and Gross Profit

cost of goods sold for the three months ended June 30, 2024 was $1,214,227, compared to $361,461 for the three months ended June 30,

2023, an increase of $852,766, or 236%.

Cost of goods sold increased primarily due to increased sales during the three months ended June

As a result of the foregoing, we had gross profit of $148,759, representing gross margins of 11%, for the three months ended

June 30, 2024 as compared to a gross loss of $18,396, or negative gross margins of 5%, for the three months ended June 30, 2023.

gross profit margin increased primarily due to cost savings realized as a result of our transition to bulk shipping arrangements during

the current period.

Cost of goods sold included depreciation expense for the three months ended June 30, 2024 of $56,335, compared to

$55,758 for the three months ended June 30, 2023, an increase of $577, or 1%.

and Administrative

general and administrative expense for the three months ended June 30, 2024 was $321,201, compared to $141,031 for the three months ended

June 30, 2023, an increase of $180,170, or 128%.

The largest components of our general and administrative expenses are advertising and

marketing, travel, commissions, and storage, shipping and handling expense, as shown below.

Three Months Ended June 30,

Advertising and marketing

Storage, shipping and handling

and marketing expenses increased for the three months ended June 30, 2024, compared to the corresponding period in 2023, as we focused

our resources on our IPO in the prior period.

Our travel expenses increased for the same reason, as we resumed our international travel

after the IPO that was completed in the prior year.

Storage, shipping and handling expenses increased primarily due to increased international

shipping rates and increased production that was driven by our increased sales.

Likewise, commissions increased due to our increased

and wages for the three months ended June 30, 2024 was $349,597, compared to $436,238 for the three months ended June 30, 2023, a

decrease of $86,641, or 20%.

This decrease was primarily attributable to bonuses awarded in the comparative period that were not recognized in the current period.

In addition, salaries and wages included $17,751 of non-cash, stock-based

compensation related to stock options awarded during the current period.

fees for the three months ended June 30, 2024 was $304,376, compared to $158,205 for the three months ended June 30, 2023, an increase

of $146,171, or 92%.

This increase was primarily attributable to increased legal and consulting fees in the current period, as a portion

of these fees were capitalized as offering costs on our IPO in the comparative period.

Professional fees included $140,491 and $18,046

of non-cash, stock-based compensation for the three months ended June 30, 2024 and 2023, respectively.

Income (Expense)

the three months ended June 30, 2024, other expense was $116,139 on a net basis, consisting of $118,957 of interest expense, as partially

offset by $2,818 of interest income.

For the three months ended June 30, 2023, other expense was $219,640 on a net basis, consisting

of $222,551 of interest expense, as partially offset by $2,911 of interest income.

Other expense decreased by $103,501, or 47%, primarily

due to the decreased interest on debt which was mostly settled in June of 2023.

loss for the three months ended June 30, 2024 was $942,554, compared to $973,510 for the three months ended June 30, 2023, a decrease

of $30,956, or 3%.

The decreased net loss was primarily due to increased gross profit and decreased interest on debt, as partially offset

by increased non-cash, stock-based compensation costs and compliance costs related to reporting as a public company.

of Operations for the Six Months Ended June 30, 2024 and 2023

following table summarizes selected items from the statement of operations for the six months ended June 30, 2024 and 2023, respectively.

Six Months Ended

Cost of goods sold

Operating expenses:

General and administrative

Salaries and benefits

Professional services

Total operating expenses

Operating loss

Other income (expense):

Interest income

Interest expense

Total other income (expense)

$ (1,993,521 )

net revenue for the three months ended March 31, 2024 was $1,467,016, compared to $97,340 for the three months ended March 31, 2023,

an increase of $1,056,446, or 1,407%.

The increase in revenue was primarily due to increased sales to our largest customer during the three months

ended March 31, 2024.

$ (1,750,603 )

net revenue for the six months ended June 30, 2024 was $2,830,002, compared to $440,405 for the six months ended June 30, 2023, an increase

of $2,389,597, or 543%.

The increase in revenue was primarily due to increased sales to our largest customer during the six months ended

June 30, 2024.

of Goods Sold and Gross Profit

cost of goods sold for the three months ended March 31, 2024 was $1,183,428, compared to $126,982 for the three months ended March 31,

cost of goods sold for the six months ended June 30, 2024 was $2,397,655, compared to $488,443 for the six months ended June 30, 2023,

an increase of $1,909,212, or 391%.

Cost of goods sold increased primarily due to increased sales during the three months ended

March 31, 2024.

As a result of the foregoing, we had gross profit of $283,588, representing gross margins of 19%, for the three months

ended March 31, 2024 as compared to a gross loss of $29,642, or negative gross margins of 30%, for the three months ended March 31, 2023.

Our gross profit margin increased primarily due to cost savings realized as a result of our transition to bulk shipping arrangements

during the current period.

Cost of goods sold included depreciation expense for the three months ended March 31, 2024 of $56,336, compared

to $55,823 for the three months ended March 31, 2023, an increase of $513, or 1%.

Cost of goods sold increased primarily due to increased sales during the six months ended June 30,

As a result of the foregoing, we had gross profit of $432,347, representing gross margins of 15%, for the six months ended June

30, 2024 as compared to a gross loss of $48,038, or negative gross margins of 11%, for the six months ended June 30, 2023.

profit margin increased primarily due to cost savings realized as a result of our transition to bulk shipping arrangements during the

current period.

Cost of goods sold included depreciation expense for the six months ended June 30, 2024 of $112,671, compared to $111,581

for the six months ended June 30, 2023, an increase of $1,091, or 1%.

and Administrative

general and administrative expense for the three months ended March 31, 2024 was $319,736, compared to $180,900 for the three months

ended March 31, 2023, an increase of $138,836, or 77%.

The largest components of our general and administrative expenses are advertising

and marketing, travel, commissions, and storage, shipping and handling expense, as shown below.

Months Ended March 31,

and marketing

shipping and handling

and marketing expenses increased for the three months ended March 31, 2024, compared to the corresponding period in 2023, as we focused

general and administrative expense for the six months ended June 30, 2024 was $640,937, compared to $321,931 for the six months ended

June 30, 2023, an increase of $319,006, or 99%.

The largest components of our general and administrative expenses are advertising and

marketing, travel, commissions, and storage, shipping and handling expense, as shown below.

Six Months Ended June 30,

Advertising and marketing

Storage, shipping and handling

and marketing expenses increased for the six months ended June 30, 2024, compared to the corresponding period in 2023, as we focused

our resources on our IPO in the prior period.

4 unchanged sentences

Likewise, commissions increased due to our increased

and wages for the three months ended March 31, 2024 was $598,286, compared to $251,810 for the three months ended March 31, 2023, an increase

of $346,476, or 138%.

This increase was primarily attributable to $376,384 of non-cash, stock-based compensation related to stock options awarded during the current period.

fees for the three months ended March 31, 2024 was $390,666, compared to $144,141 for the three months ended March 31, 2023, an increase

and wages for the six months ended June 30, 2024 was $947,883, compared to $688,048 for the six months ended June 30, 2023, an increase

of $259,835, or 38%.

This increase was primarily attributable to $394,135 of non-cash, stock-based compensation related to stock options

awarded during the current period.

fees for the six months ended June 30, 2024 was $695,042, compared to $302,346 for the six months ended June 30, 2023, an increase of

$392,696, or 130%.

This increase was primarily attributable to increased legal and consulting fees in the current period, as a portion

of these fees were capitalized as offering costs on our IPO in the comparative period.

Professional fees included $149,594 and $50,446 of non-cash, stock-based compensation for the three months ended

March 31, 2024 and 2023, respectively.

Professional fees included $290,85 and $68,492

of non-cash, stock-based compensation for the six months ended June 30, 2024 and 2023, respectively.

Income (Expense)

the three months ended March 31, 2024, other expense was $25,867 on a net basis, consisting of $28,744 of interest expense, as partially

the six months ended June 30, 2024, other expense was $142,006 on a net basis, consisting of $147,701 of interest expense, as partially

offset by $5,695 of interest income.

For the three months ended March 31, 2023, other expense was $170,600 on a net basis, consisting

of $173,445 of interest expense, as partially offset by $2,845 of interest income.

For the six months ended June 30, 2023, other expense was $390,240 on a net basis, consisting of

$395,996 of interest expense, as partially offset by $5,756 of interest income.

Other expense decreased by $248,234, or 64%, primarily

due to the decreased interest on debt which was mostly settled in June of 2023.

loss for the three months ended March 31, 2024 was $1,050,967, compared to $777,093 for the three months ended March 31, 2023, an increase

loss for the six months ended June 30, 2024 was $1,993,521, compared to $1,750,603 for the six months ended June 30, 2023, an increase

of $242,918, or 14%.

The increased net loss was primarily due to increased non-cash, stock-based compensation costs, and compliance costs related to reporting as a public company, as partially offset by decreased

interest on debt which was mostly settled in the prior year.

The increased net loss was primarily due to increased non-cash, stock-based compensation costs, and compliance costs

related to reporting as a public company, as partially offset by increased gross profits and decreased interest on debt which was mostly

settled in the prior year.

and Capital Resources

following table summarizes our total current assets, liabilities and working capital as of March 31, 2024 and December 31, 2023.

of March 31, 2024, we had working capital of $399,444.

We have incurred net losses since our inception and we anticipate net losses and

negative operating cash flows for the near future, and we may not be profitable or realize growth in the value of our assets.

our primary sources of capital have been cash generated from the sales of our products, common stock sales, and debt financing.

March 31, 2024, we had cash of $251,700, total liabilities of $997,069, and an accumulated deficit of $13,861,508.

following table summarizes our total current assets, liabilities and working capital as of June 30, 2024 and December 31, 2023.

Current Assets

Current Liabilities

Working Capital

of June 30, 2024, we had working capital of $1,302,986.

We have incurred net losses since our inception and we anticipate net losses

and negative operating cash flows for the near future, and we may not be profitable or realize growth in the value of our assets.

date, our primary sources of capital have been cash generated from the sales of our products, common stock sales, and debt financing.

As of June 30, 2024, we had cash of $936,061, total liabilities of $4,672,312, and an accumulated deficit of $14,804,062.

As of December

31, 2023, we had cash of $657,789, total liabilities of $914,622, and an accumulated deficit of $12,810,541.

of the Three Months Ended March 31, 2024 and the Three Months Ended March 31, 2023

of the Six Months Ended June 30, 2024 and the Six Months Ended June 30, 2023

following table sets forth the primary sources and uses of cash for the periods presented below:

cash used in operating activities

cash used in investing activities

cash provided by financing activities

change in cash

Six Months Ended

Net cash used in operating activities

$ (1,357,463 )

$ (2,799,724 )

Net cash used in investing activities

Net cash provided by financing activities

Effect of exchange rate changes on cash

Net change in cash

Cash Used in Operating Activities

cash used in operating activities was $503,578 for the three months ended March 31, 2024, compared to $656,593 for the three months ended

March 31, 2023, a decrease of $153,015, or 23%.

The decrease was primarily due to our increased gross profit.

cash used in operating activities was $1,357,463 for the six months ended June 30, 2024, compared to $2,799,724 for the six months ended

June 30, 2023, a decrease of $1,442,261, or 52%.

The decrease was primarily due to our increased stock-based compensation, accounts receivable,

and accounts payable, as partially offset by the $275,000 payment for other assets.

Cash Used in Investing Activities

cash used in investing activities was $40,100 for the three months ended March 31, 2024, compared to $-0- for the three months ended

March 31, 2023, an increase of $40,100.

This increase was primarily attributable to $50,000 of property and equipment purchases, as partially

offset by $9,900 of advances received on notes receivable in the current period.

cash used in investing activities was $566,431 for the six months ended June 30, 2024, compared to $10,100 for the six months ended June

30, 2023, an increase of $556,331, or 5,508%.

This increase was primarily attributable to $576,331 of property and equipment purchases,

as partially offset by $9,900 of advances received on notes receivable in the current period, compared to $10,100 of property and equipment

purchases in the comparative period.

Cash Provided by Financing Activities

cash provided by financing activities was $137,589 for the three months ended March 31, 2024, compared to $544,105 for the three months

ended March 31, 2023, a decrease of $406,516, or 75%.

cash provided by financing activities was $2,202,108 for the six months ended June 30, 2024, compared to $3,850,171 for the six months

ended June 30, 2023, a decrease of $1,648,063, or 43%.

Our decreased cash provided by financing activities was primarily from $4,826,000

of decreased net proceeds received on debt financing and $200,000 of debt repayments in the current period, as partially offset by $98,298

of deferred offering cost payments in the prior period.

of decreased proceeds received on the sale of common stock and $10,779 of increased principal payments on finance leases, as partially

offset by $578,710 of increased net proceeds received on debt financing, $2,268,791 fewer debt repayments, and $341,215 of decreased

deferred offering cost payments in the prior period.

ACCOUNTING POLICIES AND ESTIMATES

financial results are affected by the selection and application of accounting policies and methods.

In the three-month period ended March

In the six-month period ended June

30, 2024 there were no changes to the application of critical accounting policies disclosed in our Annual Report on Form 10-K for the

41 unchanged sentences

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-Q

Item 2. Management’s Discussion and Analysis