What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-22 compared with 2022-05-16 · 37 added, 24 removed, 53 unchanged (54% of the section changed)

12 unchanged sentences

the HUSTLER® brand name.

of Operations for the Three Months Ended March 31, 2022, Compared to the Three Months Ended March 31, 2021

of Operations for the Three Months Ended June 30, 2022, Compared to the Three Months Ended June 30, 2021

and Cost of Sales

the three months ended March 31, 2022 and 2021, we had net sales of $691,769 and $619,399, respectively, an increase of $72,369 or 11.7%.

the three months ended June 30, 2022 and 2021, we had net sales of $526,921 and $700,656, respectively, a decrease of $173,735 or 24.8%.

We had cost of sales of $178,474 and $262,411, respectively, for gross profit of $348,447 and $438,245, respectively.

1 unchanged sentence

from the design, manufacture, and delivery of certain licensed products in accordance with our GloBrands-HUSTLER® distribution agreement.

the three months ended March 31, 2022 and 2021, employee costs were $132,506 and $133,888, respectively, a decrease of only $1,382 or

the three months ended June 30, 2022 and 2021, employee costs were $134,494 and $135,077, respectively, a decrease of only $583 or 0.4%.

Selling, general, and administrative expenses were $317,594 and $359,297, respectively, a decrease of $41,703 or 115.8%.

in operating expenses period over period was the result of selling certain tobacco products in states with lower or no excise tax.

expenses during the three months ended June 30, 2022 and 2021, consisted of $175,081 and $168,726 of interest expense and a gain of $2,104

and $13,131 on derivative valuation, respectively.

The increase in other expenses period over period is the result of a decrease to our

loss on derivative valuation combined with increased interest expense.

of Operations for the Six Months Ended June 30, 2022, Compared to the Six Months Ended June 30, 2021

and Cost of Sales

the six months ended June 30, 2022 and 2021, we had net sales of $1,218,689 and $1,320,055, respectively, a decrease of $101,366 or 7.7%.

We had cost of sales of $410,853 and $464,059, respectively, for gross profit of $807,836 and $855,996, respectively.

Revenues are derived

from the design, manufacture, and delivery of certain licensed products in accordance with our GloBrands-HUSTLER® distribution agreement.

the six months ended June 30, 2022 and 2021, employee costs were $267,000 and $268,965, respectively, a decrease of only $1,965 or 0.7%.

Selling, general, and administrative expenses were $696,771 and $638,595, respectively, an increase of $55,176 or 8.6%.

in operating expenses period over period is the result of substantially increased activities attributable to the development of products

under the HUSTLER® brand name.

expenses during the three months ended March 31, 2022 and 2021, consisted of $173,351 and $166,488 of interest expense and a loss of

under the HUSTLER® brand name and selling certain tobacco products in states with lower or no excise tax in the first quarter.

expenses during the six months ended June 30, 2022 and 2021, consisted of $348,432 and $335,214 of interest expense and a loss of $33,949

and $114,660 on derivative valuation, respectively.

The decrease in other expenses period over period is the result of a decrease

to our loss on derivative valuation.

The decrease in other expenses period over period is the result of a decrease to

our loss on derivative valuation combined with increased interest expense.

and Capital Resources

1 unchanged sentence

Our accumulated deficit was approximately

$78.1 million at March 31, 2022.

As of March 31, 2022, we had current assets of $1,429,633 and current liabilities of approximately $40

million, resulting in a working capital deficit of approximately $38.5 million at March 31, 2022.

the three months ended March 31, 2022, operations generated $66,057 of net cash, comprised of a loss from continuing operations of $258,698,

$78.4 million at June 30, 2022.

As of June 30, 2022, we had current assets of $1,471,759 and current liabilities of approximately $40

million, resulting in a working capital deficit of approximately $38.9 million at June 30, 2022.

the six months ended June 30, 2022, operations generated $101,926 of net cash, comprised of a loss from continuing operations of $535,316,

noncash items totaling $95,332 consisting primarily of losses recognized from the changes in fair values of derivative liabilities and

debt discount amortization, and changes in working capital totaling $541,910.

During the three months ended March 31, 2021, operations

used $61,745 of net cash, comprised of a net loss from continuing operations of $289,714, noncash items totaling $70,103 consisting of

losses recognized from the changes in fair values of derivative liabilities and expense paid by related parties on our behalf, and changes

in working capital totaling $157,866.

the three months ended March 31, 2022, financing activities used $35,000 of cash, compared to using $15,000 of cash during the three

months ended March 31, 2021.

During the six months ended June 30, 2021, operations used

$81,207 of net cash, comprised of a net loss from continuing operations of $501,438, noncash items totaling $153,367 consisting of losses

recognized from the changes in fair values of derivative liabilities and expense paid by related parties on our behalf, and changes in

working capital totaling $466,733.

the six months ended June 30, 2022, financing activities used $100,552 of cash, compared to using $8,663 of cash during the six months

ended June 30, 2021.

Cash used in financing consisted of repayments of related-party loans.

15 unchanged sentences

The amended debenture had a total outstanding principal

balance of $2.4 million, with accrued interest of $1.6 million as of March 31, 2022.

balance of $2.4 million, with accrued interest of $1.7 million as of June 30, 2022.

We also have four additional convertible debentures

with Tekfine with maturity dates ranging from December 8, 2022, until December 30, 2022, totaling $275,000, unless earlier

The convertible debentures and accrued interest are convertible into shares of our common stock at the lower of $100 or $0.10

(depending on the instrument) or the lowest bid price for the 20 trading days prior to conversion.

the three months ended March 31, 2022, we made repayments to related parties of $35,000 and had other noncash reductions of $96,145.

There were $21,882 and $21,882 of short-term advances due to related parties as of March 31, 2022, and December 31, 2021, respectively.

The advances are due on demand and included in current liabilities.

with Tekfine with maturity dates ranging from December 8, 2022, until December 30, 2022, totaling $275,000, unless earlier converted.

The convertible debentures and accrued interest are convertible into shares of our common stock at the lower of $100 or $0.10 (depending

on the instrument) or the lowest bid price for the 20 trading days prior to conversion.

the six months ended June 30, 2022, we made repayments to related parties of $35,000 and had other noncash reductions of $166,747.

were $21,882 and $21,882 of short-term advances due to related parties as of June 30, 2022, and December 31, 2021, respectively.

advances are due on demand and included in current liabilities.

No demand for payment has been made.

9 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