What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-21 compared with 2022-08-22 · 46 added, 38 removed, 52 unchanged (62% of the section changed)

12 unchanged sentences

the HUSTLER® brand name.

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

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

and Cost of Sales

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%.

the three months ended September 30, 2022 and 2021, we had net sales of $477,018 and $961,474, respectively, a decrease of $484,456 or

We had cost of sales of $170,108 and $339,076, respectively, for gross profit of $306,910 and $622,398, respectively.

Revenues are derived

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

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%.

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

The decrease in revenue in the current period is due to a decrease in the sale of Vape products in California due to their ban on flavored tobacco.

the three months ended September 30, 2022 and 2021, employee costs were $139,751 and $139,520, respectively, an increase of only $231

Selling, general, and administrative expenses were $293,891 and $514,358, respectively, a decrease of $220,467 or 42.9%.

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

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

expenses during the three months ended September 30, 2022 and 2021, consisted of $179,342 and $172,400 of interest expense and a loss

of $1,156 and $62,086 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.

Our net loss from continuing operations for the three

months ended September 30, 2022, was $307,230 compared to $265,966 for the three months ended September 30, 2021, an increase of $41,264.

of Operations for the Nine Months Ended September 30, 2022, Compared to the Nine Months Ended September 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 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 combined with increased interest expense.

the nine months ended September 30, 2022 and 2021, we had net sales of $1,695,707 and $2,281,529, respectively, a decrease of

$585,822 or 25.7%.

We had cost of sales of $580,961 and $803,135, respectively, for gross profit of $1,114,746 and $1,478,394,

respectively.

Revenues are derived from the design, manufacture, and delivery of certain licensed products in accordance with our

GloBrands-HUSTLER® distribution agreement.

The decrease in revenue in the current period is due to a decrease in the sale of

Vape products in California due to their ban on flavored tobacco.

the nine months ended September 30, 2022 and 2021, employee costs were $406,751 and $408,485, respectively, a decrease of only $1,734

Selling, general, and administrative expenses were $987,662 and $1,165,870, respectively, a decrease of $178,208 or 15.3%.

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

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

expenses during the nine months ended September 30, 2022 and 2021, consisted of $527,774 and $507,614 of interest expense and a loss

of $35,105 and $176,746 on derivative valuation, respectively.

We also had a $12,917 gain on forgiveness of debt in the prior

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.

net loss from continuing operations for the nine months ended September 30, 2022, was $842,546 compared to $767,404 for the nine months

ended September 30, 2021, an increase of $75,142.

and Capital Resources

1 unchanged sentence

Our accumulated deficit was approximately

$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,

$78.9 million at September 30, 2022.

As of September 30, 2022, we had current assets of $1.4 million and current liabilities of approximately

$41 million, resulting in a working capital deficit of approximately $39.6 million at September 30, 2022.

the nine months ended September 30, 2022, operations generated $168,030 of net cash, comprised of a loss from continuing operations of $931,863,

noncash items totaling $243,194 consisting primarily of losses recognized from the changes in fair values of derivative liabilities and

debt discount amortization, and changes in working capital totaling $971,483.

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.

During the nine months ended September 30, 2021, operations

generated $152,353 of net cash, comprised of a loss from continuing operations of $767,404, noncash items totaling $15,093 consisting

primarily of losses recognized from the changes in fair values of derivative liabilities and debt discount amortization, repayment expenses

paid by related parties on our behalf of $268,924, and changes in working capital totaling $934,850.

the nine months ended September 30, 2022, financing activities used $132,953 of cash, compared to using $214,421 of cash during the nine

months ended September 30, 2021.

Capital Resources and Anticipated Requirements

14 unchanged sentences

The amended debenture had a total outstanding principal

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

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

We also have four additional convertible debentures

2 unchanged sentences

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.

the nine months ended September 30, 2022, we made repayments to related parties of $139,883 and had other noncash reductions of $233,584.

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

The 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