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Item 3. Quantitative and Qualitative Disclosures About Market Risk

2025-05-20 compared with 2024-11-14 · 52 added, 26 removed, 8 unchanged (91% of the section changed)

Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk in the ordinary course of our business.

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates.

Quantitative and Qualitative Disclosures

About Market Risk.

We are exposed to market risk in the ordinary

course of our business.

Market Risk represents the risk of loss that may impact our financial position due to adverse changes in financial

market prices and rates.

Our market risk exposure is primarily the result of fluctuations in foreign currency exchange rates.

Concentration Risk

The Company extends unsecured credit to its customers in the ordinary course of business.

The Company extends unsecured credit to its customers

in the ordinary course of business.

Payment terms are generally net 30 days with discounts amounting up to 10% for early payments.

Accounts receivable are written off when they are determined to be uncollectible based on the financial stability of its customers and existing economic conditions.

Sales to four customers accounted for approximately 53% and sales to three customers accounted for approximately 77% of net revenues for the three month periods ended September 30, 2024 and 2023, respectively.

Sales to three customers accounted for approximately 45% and 74% of net revenues for both the nine month periods ended September 30, 2024 and 2023, respectively.

Accounts receivable from one and three customers amounted to approximately 19% and 80% of total accounts receivable as of September 30, 2024 and 2023, respectively.

Substantially all of the Company’s sales for the nine month periods ended September 30, 2024 and 2023 sales occurred in the United States, Canada, Central America, South America and Europe.

Purchases from 10 vendors accounted for approximately 51% and 52% of purchases during the three months ended and 54% and 52% of purchases for the nine month periods ended September 30, 2024 and 2023, respectively.

Accounts payable to these vendors totaled approximately $2,570,000 and $1,218,000 as of September 30, 2024 and 2023, respectively.

receivables are written off when they are determined to be uncollectible based on the financial stability of its customers and existing

economic conditions.

Sales to four customers accounted for approximately 60% and sales to

two customers accounted for approximately 58% of net revenues for the three months ended March 31, 2025 and 2024, respectively.

receivable from two and three customers amounted to approximately 35% and 37% of total accounts receivable as of March 31, 2025 and December

31, 2024, respectively.

Substantially all of the Company’s sales for the three months ended March 31, 2025 and 2024 occurred in

the United States, Canada, Central America, South America, and Europe.

Purchases from 10 vendors accounted for approximately

46% and 57% of purchases during the three months ended March 31, 2025 and 2024, respectively.

Accounts payable to these vendors totaled

approximately $2,678,000 and $1,880,000 as of March 31, 2025 and 2024, respectively.

Foreign Currency Risk

Our customers are primarily located in the United States, Central America, South America, Germany, and Canada;

therefore, foreign exchange risk exposures arise from transactions denominated in currencies other than our functional and reporting currency (U.S.

Our customers are primarily located in the United States, Central America,

South America, Europe, and Canada;

therefore, foreign exchange risk exposures arise from transactions denominated in currencies other

than our functional and reporting currency (U.S.

To date, a majority of our sales have been denominated in U.S.

dollars and a significant portion of our operating expenses are denominated in Canadian dollars.

We also purchase certain of our key manufacturing inputs in Euros.

As we expand our presence in international markets, our results of operations and cash flows may increasingly be subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign currency exchange rates.

To date, we have not entered into any hedging arrangements to minimize the impact of these fluctuations in the exchange rates.

a significant portion of our operating expenses are denominated in Canadian dollars.

We also purchase certain of our key manufacturing

inputs in Euros.

As we expand our presence in international markets, our results of operations and cash flows may increasingly be subject

to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign

currency exchange rates.

To date, we have not entered into any hedging arrangements to minimize the impact of these fluctuations in the

exchange rates.

We will periodically reassess our approach to manage our risk relating to fluctuations in currency rates.

We do not believe that foreign currency risk had a material effect on our business, financial condition, or results of operations during the periods presented.

We do not believe that foreign currency risk had

a material effect on our business, financial condition, or results of operations during the periods presented.

Inflation Risk

We do not believe that inflation had a significant impact on our results of operations for any periods presented in our consolidated financial statements.

Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs with product price increases, and our inability or failure to do so could harm our business, financial condition, and results of operations.

We do not believe that inflation had a

significant impact on our results of operations for any periods presented in our unaudited condensed consolidated financial

Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully

offset such higher costs with product price increases, and our inability or failure to do so could harm our business, financial

condition, and results of operations.

Matching Revenues with Costs

Certain Selling, General and Administrative costs have been expensed in the period incurred.

These costs, include business development costs, transaction costs and research and development costs, consist primarily of personnel and related expenses including salaries, benefits, share-based compensation, scale-up expenses, depreciation and amortization expenses, and facility lease costs.

Scale-up expenses includes material waste costs, production personnel costs and various related expenses.

These costs are focused on enhancements to our existing product formulations and production processes, as well as the scientific development of new products and economic verticals.

We believe continued innovation and these new verticals are expected to capture a larger share of consumers.

Monetization of future opportunities created by the above investment are expected to be realized in future quarters.

Certain Selling, General and Administrative costs

have been expensed in the period incurred.

These costs, include business development costs, transaction costs and research and development

costs, consist primarily of personnel and related expenses including salaries, benefits, share-based compensation, scale-up expenses,

depreciation and amortization expenses, and facility lease costs.

Scale-up expenses includes material waste costs, production personnel

costs and various related expenses.

These costs are focused on enhancements to our existing product formulations and production processes,

as well as the scientific development of new products and economic verticals.

We believe continued innovation and these new verticals

are expected to capture a larger share of consumers.

Monetization of future opportunities created by the above investment are expected

to be realized in future quarters.

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 3. Quantitative and Qualitative Disclosures About Market Risk