What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-04-15 compared with 2024-04-19 · 53 added, 49 removed, 53 unchanged (66% of the section changed)

16 unchanged sentences

related merchandise, all using the HUSTLER® brand name.

We have suffered substantial losses.

The future of

our company is dependent upon our ability to continue to generate revenues sufficient to offset operating costs or recover start-up costs

under our GloBrands-HUSTLER® Exclusive Manufacturing and Distribution Agreement signed in December 2019.

Management intends to seek

additional capital through a private placement or public offering of its common stock, if necessary.

Our auditors have expressed a going

concern in their opinion, which raises substantial doubts about our ability to continue as a going concern.

have suffered substantial losses.

The future of our company is dependent upon our ability to continue to generate revenues sufficient

to offset operating costs or recover start-up costs under our GloBrands-HUSTLER® Exclusive Manufacturing and Distribution Agreement

signed in December 2019.

Management intends to seek additional capital through a private placement or public offering of its common stock,

if necessary.

Our auditors have expressed a going concern in their opinion, which raises substantial doubts about our ability to continue

as a going concern.

of Operations

1 unchanged sentence

and Cost of Sales

We had revenues of $1,616,148 and $1,719,358 during

the years ended December 31, 2023 and 2022, respectively, a decrease of $103,210 or 6%.

We had cost of sales of $609,651 and $696,548,

respectively, for gross profit of $1,006,497 and $1,022,810, respectively.

Revenues are derived from the design, manufacture, and delivery

of certain licensed products in accordance with our GloBrands-HUSTLER® distribution agreement.

The increase 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 year ended December 31, 2023, selling,

general, and administrative expenses and employee costs were approximately $1,021,000, as compared to approximately $1,545,000 for the

same period in 2022, a decrease of $524,000 or 34%.

Selling, general, and administrative expenses were $509,895 and $1,004,003, respectively,

a decrease of $494,108 or 49.2%.

The decrease in operating expenses period over period is the result of focusing on products with less

marketing spending demands and spending less on marketing consultants.

had revenues of $1,296,796 and $1,616,148 during the years ended December 31, 2024 and 2023, respectively, a decrease of $319,352 or

We had cost of sales of $458,158 and $609,651, respectively, for gross profit of $838,638 and $1,006,497, respectively.

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

We had higher revenue in the prior period due to additional income from the licensing of novelties in an international territory.

the year ended December 31, 2024 and 2023, employee costs were $515,807 and $511,519 respectively, an increase of only $4,288 or 0.8%.

the year ended December 31, 2024 and 2023, selling, general, and administrative expenses were $873,570 and $509,895, respectively, an

increase of $363,675 or 71.3%.

The increase in operating expenses year over year is the result of additional marketing expense to launch product on detail chains.

Income and Expense

For the year ended December 31, 2023, we had total

other expense of $536,782.

This consisted of interest expense of $768,899, a loss on the fair value of derivative liabilities of $292,100

a gain on settlement of debt of $194,709, a gain on forgiveness of debt of $328,384 and other income of $1,124.

income and expenses during the year ended December 31, 2022, consisted of interest expense of $709,414 and a loss on the fair value of

derivative liabilities of approximately $66,040.

As a result of the foregoing, we had a net loss from

continuing operations of $551,699 as compared to $1,297,737 in the prior year.

For the year ended December 31, 2023, we recognized a gain from discontinued

operations of $20,831,526 due to the extinguishment of time barred debt.

the year ended December 31, 2022, we recognized a loss from discontinued operations of $153,466.

the year ended December 31, 2024, we had total other expense of $1,996,615.

This consisted of $790,589 of interest expense, an

impairment loss on out investment of $52,000 and a loss of $1,161,498 on derivative valuation.

We also had other income of $250 and

a gain on the disposal of property of $7,222.

the year ended December 31, 2023, we had total other expense of $536,782.

This consisted of interest expense of $768,899, a loss on the

fair value of derivative liabilities of $292,100, a gain on settlement of debt of $194,709, a gain on forgiveness of debt of $328,384

and other income of $1,124.

a result of the foregoing, we had a net loss from continuing operations of $2,547,354 as compared to $551,699 in the prior year.

the year ended December 31, 2024, we recognized a loss from discontinued operations of $153,886 due to interest expense.

the year ended December 31, 2023, we recognized a gain from discontinued operations of $20,831,526 due to the extinguishment of time

and Capital Resources

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$61.6 million at December 31, 2024.

During the year ended December 31, 2023, operations

used $72,607 of net cash, comprised of a loss from continuing operations of $551,699, noncash items totaling $20,948,388 consisting primarily

of losses recognized from the changes in fair values of derivative liabilities, debt discount amortization and a gain of $20,831,526 from

discontinued operations.

the year ended December 31, 2024, operations used $46,354 of net cash, comprised of a loss from discontinued operations of $153,886, noncash

items totaling $1,310,404 consisting primarily of losses recognized from the changes in fair values of derivative liabilities and debt

discount amortization.

Changes in working capital totaled $1,122,020

During the year ended December 31, 2022, operations generated $159,304

of net cash, comprised of a loss from continuing operations of $1,502,091, noncash items totaling $337,367 consisting primarily of losses

recognized from the changes in fair values of derivative liabilities, debt discount amortization and discontinued operations.

in working capital totaled $1,273,140.

the year ended December 31, 2023, we were provided approximately $63,000 of net cash in financing activities mainly comprised of repayments on

related-party loans that totaled $47,478 and proceeds from related-party loans of $114,600.

During the year ended December 31, 2022,

we used approximately $147,000 of net cash from financing activities mainly comprised of repayments on related-party loans

that totaled $155,000 and proceeds from related-party loans of $8,000.

the year ended December 31, 2023, operations used $72,607 of net cash, comprised of a loss from continuing operations of $551,699, noncash

items totaling $20,948,388 consisting primarily of losses recognized from the changes in fair values of derivative liabilities, debt

discount amortization and a gain of $20,831,526 from discontinued operations.

Changes in working capital totaled $587,421.

During the year ended December 31, 2024, we were provided with $15,400 of net cash from the sale of an automobile.

the year ended December 31, 2024, we were provided $30,954 of net cash in financing activities mainly comprised of repayments

on related-party loans that totaled $61,336 and proceeds from related-party loans of $61,906.

the year ended December 31, 2023, we were provided approximately $63,000 of net cash in financing activities mainly comprised of repayments

on related-party loans that totaled $47,478 and proceeds from related-party loans of $114,600.

Capital Resources and Anticipated Requirements

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Accounting Policies

to Note 2 of our financial statements contained elsewhere in this Form 10-K for a summary of our critical accounting policies and recently

adopting and issued accounting standards.

The Company considers its accounting for the fair value of financial instruments, revenue recognition, accounts receivable, allowance

for doubtful accounts and inventory among its critical accounting policies.

The Company maintains an allowance for doubtful accounts to

reflect management’s estimate of the amount of receivables that will not be collected.

This estimate is considered a critical accounting

estimate due to the subjectivity involved in evaluating the collectability of accounts receivable.

The fair value measurement of derivative

instruments is also one of our critical accounting estimates due to the complexity and subjectivity involved.

These estimates often require

the use of valuation models that rely on unobservable inputs.

Refer to Note 2 of our financial statements contained elsewhere in this

Form 10-K for a more detail description of each, and a summary of all our critical accounting policies and recently adopted and issued

accounting standards.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

2 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-K

Item 7. Management’s Discussion and Analysis