What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-11 compared with 2024-11-15 · 41 added, 97 removed, 97 unchanged (59% of the section changed)

38 unchanged sentences

Results of Operations

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

integrated B2B and B2C e-commerce distribution platform called Qplash decreased approximately $3.9 million or 97.6% due to low inventory.

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

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.

for the Three Months Ended March 31, 2025 compared to Three Months Ended March 31, 2024.

Revenues for the three months ended March 31, 2025

were approximately $0.4 million compared to revenues of approximately $1.5 million for the three months ended March 31, 2024.

million decrease in sales is due to a decrease in our beverage sales of $0.8 million.

Our revenues from our vertically integrated B2B

and B2C e-commerce distribution platform called Qplash decreased approximately $0.3 million due to low inventory.

Total sales declined

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

Cost of Goods Sold

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.

Cost of goods sold for the three months ended March

31, 2025 were $0.5 million compared to cost of goods sold for the three months ended March 31, 2024 of approximately $1.4 million.

$0.9 million decrease in cost of goods sold for the three-month period ended March 31, 2025 is primarily due to our decreased sales.

Operating Expenses

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.

Operating expenses for the three months ended March

31, 2025 were $2.0 million compared to $3.4 million for the three months ended March 31, 2024 a decrease of $1.4 million.

in our operating expenses was primarily due to non-cash expenses, new staff, benefit cost, freight cost and Amazon selling fees.

loss for the three months ended March 31, 2025 was $3.5 million as compared to a net loss of approximately $4.7 million for the three

months ended March 31, 2024.

The decrease in net loss is due to lower operating expenses.

During the quarter ended March 31, 2025, the Company

did not meet its payroll obligations for the months of February and March.

As a result, employees were not paid for services rendered

during that period.

The unpaid wages have been fully accrued as liabilities in the accompanying financial statements.

Net Other Income and Expense

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

Interest expenses for the three months ended March

31, 2025 was $0.6 million compared to $0.5 million for the three months ended March 31, 2024.

The $0.1 million increase in interest expense

is due to new loans with a principal of $9.0 million.

Other income was $0 and $0.1 million for the three

months ended March 31, 2025 and March 31, 2024 respectively.

Amortization of debt discount for the three months

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.

ended March 31, 2025 was approximately $1.0 million compared to $0.9 million for three months ended March 31, 2024.

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 September 30, 2024, the Company had total cash

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

As of March 31, 2025, the Company had total cash and

cash equivalents of $0 as compared with $15,346 at December 31, 2024.

Net cash used for operating activities during the

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.

three months ended March 31, 2025 was $0.7 million as compared to the net cash used by operating activities for the three months ended

March 31, 2024 of $1.3 million.

The primary reasons for the change in net cash used are decreases in inventory, accrued expenses and accounts

receivable partially offset by increases in account payable.

For the period ending March 31, 2025 and March 31,

2024, there were no capital asset transactions.

Net cash provided by financing activities during the

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,

the Company will need to raise additional equity or debt capital.

There can be no assurance that additional funds will be available when

needed from any source or, if available, will be available on terms that are acceptable to us.

The Company will be required to pursue

sources of additional capital through various means, including debt or equity financings.

Future financings through equity investments

are likely to be dilutive to existing stockholders.

Also, the terms of securities the Company may issue in future capital transactions

may be more favorable for new investors.

Newly issued securities may include preferences, superior voting rights, the issuance of warrants

or other derivative securities, and the issuances of incentive awards under equity employee incentive plans, which may have additional

dilutive effects.

Further, the Company may incur substantial costs in pursuing future capital and/or financing, including investment banking

fees, legal fees, accounting fees, printing and distribution expenses and other costs.

The Company may also be required to recognize non-cash

expenses in connection with certain securities the Company may issue, such as convertible notes and warrants, which will adversely impact

our financial condition.

Our ability to obtain needed financing may be impaired by such factors as the capital markets and our history

of losses, which could impact the availability or cost of future financings.

If the amount of capital the Company are able to raise from

financing activities together with our revenues from operations, is not sufficient to satisfy our capital needs, even to the extent that

the Company reduce our operations accordingly, the Company may be required to curtail or cease operations.

As a result, there is uncertainty

regarding the Company’s ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt

as to the Company’s ability to continue as a going concern for at least twelve months from the date of the consolidated financial

statements being available to be issued.

three months ended March 31, 2025 was $0.8 million compared to $1.0 million provided from financing activities for the three months ended

March 31, 2024.

During the three months ended March 31, 2025, the Company received $0.9 million for convertible note, which was offset

by repayments to debt holders of $0.1 million.

CONTRACTUAL OBLIGATIONS

Minimum Royalty Payments:

The Company has a licensing agreement with ABG TapouT,

LLC (“TapouT”).

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