What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-21 compared with 2023-05-22 · 63 added, 28 removed, 48 unchanged (65% of the section changed)

11 unchanged sentences

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

of Operations for the Three Months Ended June 30, 2023, Compared to the Three Months Ended June 30, 2022

and Cost of Sales

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.

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%.

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

During the three months ended June 30, 2023 and 2022, we had net sales

of $458,511 and $526,921, respectively, a decrease of $68,410 or 13%.

We had cost of sales of $270,010 and $178,474, respectively, for

gross profit of $188,501 and $348,447, 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.

During the three months ended June 30, 2023 and 2022, employee costs were

$137,107 and $134,494, respectively, an increase of $2,613 or 1.9%.

Selling, general, and administrative expenses were $150,515 and $317,594,

respectively, a decrease of $167,079 or 52.6%.

The decrease 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, 2023 and 2022, consisted of $186,771 and $175,081 of interest expense and a gain of $80,042

and $2,104 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

We also recognized other revenue of $1,124 in the current period.

net loss from continuing operations for the three months ended June 30, 2023, was $204,726 compared to $276,618 for the three months

ended June 30, 2022, a decrease of $71,892.

Our net loss decreased in the current period mainly due to the decrease of our SG&A expenses.

of Operations for the Six Months Ended June 30, 2023, Compared to the Six Months Ended June 30, 2022

and Cost of Sales

During the six months ended June 30, 2023 and 2022, we had net sales of

$671,920 and $1,218,689, respectively, a decrease of $546,769 or 44.9%.

We had cost of sales of $355,717 and $410,853, respectively, for

gross profit of $316,203 and $807,836, 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.

During the six months ended June 30, 2023 and 2022, employee costs were

$273,802 and $267,000, respectively, an increase of $6,802 or 2.5%.

Selling, general, and administrative expenses were $289,193 and $693,771,

respectively, a decrease of $404,578 or 58.3%.

The decrease 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 six months ended June 30, 2023 and 2022, consisted of $370,059 and $348,432 of interest expense and a loss of

$44,503 and $33,949 on derivative valuation, respectively.

We also recognized a gain on the forgiveness of debt of $13,000 and other

income of $1,124, in the current period.

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 six months ended June 30, 2023, was $647,230 compared to $535,316 for the six months ended

June 30, 2022, an increase of $111,914 or 20.9%.

Our net loss increased in the current period mainly due the decrease in our gross profit.

and Capital Resources

1 unchanged sentence

Our accumulated deficit was approximately

$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.

$80 million at June 30, 2023.

As of June 30, 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 million at June 30, 2023.

the six months ended June 30, 2023, operations used $20,815 of net cash, comprised of a loss of $723,332, noncash items totaling $156,646

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

changes in working capital totaling $545,871.

During 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.

Investing Activities

During the six months ended June 30, 2023, we used $8,414 for investing

activities for the purchase of equipment.

We had no investing activity in the prior period.

the six months ended June 30, 2023, financing activities provided $46,813 of cash, compared to using $100,552 of cash during the six

months ended June 30, 2022.

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

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 $1.8 million as of March 31, 2023.

balance of $2.4 million, with accrued interest of $1.8 million as of June 30, 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.

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

of June 30, 2023, there is $85,877 of short-term advances due to related parties.

The advances are due on demand and included in current

10 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