What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-05-22 compared with 2022-11-21 · 30 added, 52 removed, 46 unchanged (64% of the section changed)

9 unchanged sentences

than 50 key, international markets.

2021 and into 2022, we continued under our 2019 five-year manufacturing and distribution agreement with an unrelated party to manufacture,

distribute, and sell condoms, electronic tobacco products, cigars, energy drinks, water beverages, and related merchandise, all using

the HUSTLER® brand name.

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

2021, we continue under our 2019 five-year manufacturing and distribution agreement with an unrelated party to manufacture, distribute,

and sell condoms, electronic tobacco products, cigars, energy drinks, water beverages, and related merchandise, all using the HUSTLER®

of Operations for the Three Months Ended March 31, 2023, Compared to the Three Months Ended March 31, 2022

and Cost of Sales

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

the three months ended March 31, 2023 and 2022, we had net sales of $213,409 and $691,768, respectively, a decrease of $478,359 or 69.2%.

We had cost of sales of $85,707 and $232,379, respectively, for gross profit of $127,702 and $459,389, respectively.

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%.

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 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

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

the three months ended March 31, 2023 and 2022, employee costs were $136,695 and $132,506, respectively, an increase of $4,189 or 3.2%.

Selling, general, and administrative expenses were $138,678 and $376,177, respectively, a decrease of $237,499 or 63.2%.

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.

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 March 31, 2023 and 2022, consisted of $183,288 and $173,351 of interest expense and a loss of

$124,545 and $36,053 on derivative valuation, respectively.

We also recognized a gain on the forgiveness of debt of $13,000 in the current

The increase in other expenses period over period is the result of an increase to our loss on derivative valuation.

net loss from continuing operations for the three months ended March 31, 2023, was $442,504 compared to $258,698 for the three months

ended March 31, 2022, an increase of $183,806.

Our net loss increased in the current period mainly due the $331,687 decrease in our gross

and Capital Resources

1 unchanged sentence

Our accumulated deficit was approximately

$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 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.

$79.8 million at March 31, 2023.

As of March 31, 2023, we had current assets of $1.5 million and current liabilities of approximately

$42 million, resulting in a working capital deficit of approximately $40.2 million at March 31, 2023.

the three months ended March 31, 2023, operations generated $196,598 of net cash, comprised of a loss of $480,345, noncash items totaling

$135,769 consisting primarily of losses recognized from the changes in fair values of derivative liabilities and debt discount amortization,

and changes in working capital totaling $503,333.

During the three months ended March 31, 2022, operations generated $66,057 of net cash,

comprised of a net loss of $296,503, noncash items totaling $66,442 consisting primarily of losses recognized from the changes in fair

values of derivative liabilities and debt discount amortization, and changes in working capital totaling $258,313.

the three months ended March 31, 2023, financing activities used $15,788 of cash, compared to using $35,000 of cash during the three

months ended March 31, 2022.

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 September 30, 2022.

balance of $2.4 million, with accrued interest of $1.8 million as of March 31, 2023.

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 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.

of March 31, 2023, there is $21,882 of short-term advances due to related parties.

The advances are due on demand and included in current

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