What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-15 compared with 2024-08-14 · 66 added, 72 removed, 128 unchanged (52% of the section changed)

38 unchanged sentences

Results of Operations

for the Three Months and Six Months Ended June 30, 2024 compared to Three Months and Six Months Ended June 30, 2023.

Revenues for the three months ended June 30, 2024

were approximately $1.1 million compared to revenues of approximately $5.2 million for the three months ended June 30, 2023.

$4.1 million decrease in sales is due to a decrease in our beverage sales of $0.1 million.

for the Three Months and Nine Months Ended September 30, 2024, compared to Three Months and Nine Months Ended September 30, 2023.

Revenues for the three months ended September 30,

2024 were approximately $1 million compared to revenues of approximately $5.1 million for the three months ended September 30, 2023.

of the $4.1 million decrease in sales is due to a decrease in our beverage sales of $0.2 million.

Additionally, revenues from our vertically

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Total sales declined due to limited liquidity to procure inventory to drive third-party sales.

Revenue for the six months ended June 30, 2024 was $2.6 million compared

to revenues of $11 million for the six months ended June 30, 2023.

The $8.4 million decrease in sales is driven by decreases in both the

e-commerce and beverage businesses which decreased $7.6 million and $0.8 million respectively.

Qplash’s decreased revenue due to

low inventory.

Revenue for the nine months ended September 30, 2024 was $3.6 million compared

to revenues of $16.2 million for the nine months ended September 30, 2023.

The $12.6 million decrease in sales is driven by decreases

in both the e-commerce and beverage businesses which decreased $11.6 million and $1 million respectively.

Qplash’s revenue decreased

due to low inventory.

Cost of Goods Sold

Cost of goods sold for the three months ended June

30, 2024 was $0.8 million compared to cost of goods sold for the three months ended June 30, 2023 of $3.4 million.

The $2.6 million decrease

in cost of goods sold for the three-month period ended June 30, 2023 was driven by decreased sales.

Cost of goods sold for the six months ended June 30,

2024 was $2.2 million compared to cost of goods sold for the six months ended June 30, 2023 of $7.5 million.

The $5.3 million decrease

in cost of goods sold for the six-month period ended June 30, 2023 was driven by decreased sales in both the e-commerce and beverage business.

Cost of goods sold for the three months ended September

30, 2024 was $0.7 million compared to cost of goods sold for the three months ended September 30, 2023 of $3.8 million.

The $3.1 million

decrease in cost of goods sold for the three-month period ended September 30, 2024 was driven by decreased sales.

Cost of goods sold for the nine months ended September

30, 2024 was $2.9 million compared to cost of goods sold for the nine months ended September 30, 2023 of $11.3 million.

The $8.5 million

decrease in cost of goods sold for the nine-month period ended September 30, 2024 was driven by decreased sales in both the e-commerce

and beverage business.

Operating Expenses

Operating expenses for the three months ended June

30, 2024 was $3.9 million compared to $6.0 million for the three months ended June 30, 2023 a decrease of $2.1 million.

The decrease in

operating expenses was primarily due to a reduction in marketing expense, freight cost and Amazon selling fees partially offset by increases

for the non-cash expenses.

Operating expenses for the six months ended June 30,

2024 was $7.3 million compared to $11.2 million for the six months ended June 30, 2023 a decrease of $3.9 million.

The decrease in operating

expenses was primarily due to marketing expense, contracted services, freight cost and Amazon selling fees partially offset by increases

for the non-cash expenses.

The net loss for the three months ended June 30, 2024

was $5.3 million as compared to a net loss of approximately $5.6 million for the three months ended June 30, 2023.

The decrease in net

loss is due to lower debt discount expense.

The net loss for the six months ended June 30, 2024 was $10 million as compared to a net loss

of approximately $9.4 million for the six months ended June 30, 2023.

The increase in net loss is due to higher debt discount and interest

Operating expenses for the three months ended September

30, 2024 was $3.0 million compared to $5.6 million for the three months ended September 30, 2023 a decrease of $2.6 million.

in operating expenses was primarily due to a reduction in marketing expense, freight cost, Amazon selling fees and the non-cash expenses.

Operating expenses for the nine months ended September

30, 2024 was $10.3 million compared to $16.8 million for the nine months ended September 30, 2023 a decrease of $6.5 million.

in operating expenses was primarily due to marketing expense, contracted services, freight cost and Amazon selling fees partially offset

by increases for the non-cash expenses.

The net loss for the three months ended September

30, 2024 was $4.7 million as compared to a net loss of approximately $5.7 million for the three months ended September 30, 2023.

in net loss is due to lower debt discount expense.

The net loss for the nine months ended September 30, 2024 was $14.7 million as compared

to a net loss of approximately $15.0 million for the nine months September 30, 2023.

The decrease in net loss is due to lower operating

expenses partially offset by higher interest expenses.

Net Other Income and Expense

Interest expense for the three and six months ended

June 30, 2024 was $0.6 million and $1.2 million respectively.

For the three and six months ended June 30, 2023 the interest expenses was

$0.2 million and $0.3 million respectively due to additional convertible notes issued in 2024.

Interest expenses for the three months ended June

30, 2024 was $0.6 million compared to $0.2 million for the three months ended June 30, 2023.

The $0.4 million increase in interest expense

is due to new loans with a principal of $3.2 million.

Interest expenses for the six months ended June 30, 2024 was $1.2 million compared

to $0.3 million for the three months ended June 30, 2023.

The $0.9 million increase in interest expense is due to new loans with a principal

of $4.7 million with higher interest rates.

Other expenses were $0.0 and $0.1 million for the

three months ended June 30, 2024 and June 30, 2023 respectively..

Other expenses were $0.2 and other income was $0.05 million for the

six months ended June 30, 2024 and June 30, 2023 respectively.

The income in 2023 was related to an insurance settlement.

Interest expenses for the three months ended September

30, 2024 was $0.9 million compared to $0.2 million for the three months ended September 30, 2023.

The $0.7 million increase in interest

expense is due to new loans with a principal of $3.2 million.

Interest expenses for the nine months ended September 30, 2024 was $2.0

million compared to $0.6 million for the three months ended September 30, 2023.

The $1.4 million increase in interest expense is due to

new loans with a principal of $7.9 million with higher interest rates.

There were no significant other expenses for the

three months ended September 30, 2024 and September 30, 2023 respectively.

Other expenses were $0 and other income was $0.05 million

for the nine months ended September 30, 2024 and September 30, 2023 respectively.

The income in 2023 was related to an insurance

Amortization of debt discount for the three months

ended June 30, 2024 was approximately $1.0 million compared to $1.1 million for three months ended June 30, 2023.

Amortization of debt

discount for the six months ended June 30, 2024 was approximately $1.9 million compared to $1.4 million for six months ended June 30,

ended September 30, 2024 was approximately $0.8 million compared to $1.1 million for three months ended September 30, 2023.

of debt discount for the nine months ended September 30, 2024 was approximately $2.7 million compared to $2.5 million for nine months

ended September 30, 2023.

LIQUIDITY, GOING CONCERN CONSIDERATIONS AND CAPITAL

3 unchanged sentences

in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.

As of June 30, 2024, the Company had total cash and

cash equivalents of $8,298, as compared with $379,978 at December 31, 2023.

As of September 30, 2024, the Company had total cash

and cash equivalents of $456,889, as compared with $379,978 at December 31, 2023.

Net cash used for operating activities during the

six months ended June 30, 2024 was $3.8 million as compared to the net cash used by operating activities for the six months ended June

30, 2023 of $6.5 million.

The primary reasons for the change in net cash used were reduced operating expenses, lower procurement of raw

material and finished goods.

For the period ending June 30, 2024, $1,500 furniture

was returned to vendor.

For the period June 30, 2023, the Company had leasehold improvements of $12,613 related to our Copa Di Vino production

nine months ended September 30, 2024 was $6.4 million as compared to the net cash used by operating activities for the nine months ended

September 30, 2023 of $8.5 million.

The primary reasons for the change in net cash used were reduced operating expenses, prepaid expenses

were allocated.

Net cash used for investing activities for the period

ending September 30, 2024, $1,500 furniture was returned to vendor and $4,735 on purchase of machinery.

For the period September 30, 2023,

the Company had leasehold improvements of $12,613 related to our Copa Di Vino production site.

Net cash provided by financing activities during the

six months ended June 30, 2024 was $3.4 million compared to $3.0 million provided from financing activities for the six months ended June

During the six months ended June 30, 2024, the Company received $4.7 million for convertible note, which was offset by repayments

to debt holders of $1.3 million and $0.03 million to related party cash advance.

The Company plans to raise up to $8.0 million to fund

acquisitions, equipment purchases and working capital.

nine months ended September 30, 2024 was $6.4 million compared to $4.4 million provided from financing activities for the nine months

ended September 30, 2023.

During the nine months ended September 30, 2024, the Company received $7.9 million for convertible note, which

was offset by repayments to debt holders of $1.5 million and $0.01 million to related party cash advance.

In order to have sufficient cash to fund our operations,

27 unchanged sentences

Minimum Royalty Payments:

The Company have a licensing agreement with ABG TapouT,

The Company has a licensing agreement with ABG TapouT,

LLC (“TapouT”).

Under the licensing agreement, the Company has minimum royalty payments to TapouT of $330,000 for the six

months remaining in 2024.

Under the licensing agreement, the Company has minimum royalty payments to TapouT of $55,000 per month, $495,000

was reserved in the nine months of September 2024.

Inventory Purchase Commitments :

44 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