What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-08 compared with 2022-08-15 · 37 added, 33 removed, 79 unchanged (47% of the section changed)

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We had revenues of $1,465,782 in the year ended December 31, 2021 and $1,276,559 in the year ended December 31, 2020.

We had revenues of $463,386 for the three months ended March 31, 2022 and $542,484 for the three months ended June 30, 2022.

We had revenues of $573,967 for the three months ended September 30, 2022 and $447,986 for the three months ended September 30, 2021.

On February 4, 2019, we acquired BergaMet NA, LLC, a Delaware limited liability company (“BergaMet”).

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As a result of our financial condition, we have received a report from our independent registered public accounting firm for our financial statements for the years ended December 31, 2021 and 2020 that includes an explanatory paragraph describing the uncertainty as to our ability to continue as a going concern.

From inception (December 19, 2014) through the end of December 31, 2021, we have incurred accumulated net losses of $14,943,620.

From inception

(December 19, 2014) through the end of December 31, 2021, we have incurred accumulated net losses of $14,943,620.

In order to continue as a going concern we must effectively balance many factors and generate more revenue so that we can fund our operations from our sales and revenues.

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However, there is no assurance that our existing cash flow will be adequate to satisfy our existing operating expenses and capital requirements.

Results of Operations for the Three and Six Months Ended June 30, 2022 and 2021

We had revenues of $542,484 and $1,094,138 for the three and six months ended June 30, 2022, respectively, compared to $278,458 and $459,492 for the three and six months ended June 30, 2021.

Revenues for the three months ended December 31, 2021 were $671,589.

Our cost of revenue for the three and six months ended June 30, 2022 were $195,556 and $334,238, respectively, compared to $33,764 and $75,206 for the three and six months ended June 30, 2021.

Our operating expenses were $888,401 and $1,258,758 for the three and six months ended June 30, 2022, respectively, compared to $464,831 and $1,180,918 for the three and six months ended June 30, 2021.

Results of Operations for the Three and Nine Months Ended September 30, 2022 and 2021

We had revenues of $573,967 and $1,668,105 for the three and nine months ended September 30, 2022, respectively, compared to $447,986 and $903,142 for the three and nine months ended September 30, 2021.

Our cost of revenue for the three and nine months ended September 30, 2022 were $68,551 and $402,788, respectively, compared to $72,250 and $147,456 for the three and nine months ended September 30, 2021.

Our operating expenses were $485,568 and $1,744,326 for the three and nine months ended September 30, 2022, respectively, compared to $692,940 and $1,873,858 for the three and nine months ended September 30, 2021.

Our operating expenses consisted entirely of general and administrative expenses.

We had a Net Loss of $859,326 for the three months ended June 30, 2022, compared to a Net Gain of $3,011 for the three months ended March 31, 2022.

We had a Net Loss of $170,223 for the three months ended September 30, 2022, compared to a Net Loss of $672,470 for the three months ended September 30, 2021.

Revenues and Net Operating Loss

Our revenue, operating expenses, net operating loss, and net gain (loss) for the three and six months ended June 30, 2022 and 2021 were as follows:

Our revenue, operating expenses, net operating loss, and net gain (loss) for the three and nine months ended September 30, 2022 and 2021 were as follows:

September 30,

Cost of Revenue

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Net income (loss)

We had revenues of $542,484 and $1,094,138 for the three and six months ended June 30, 2022, compared to $278,458 and $459,492 for the three and six months ended June 30, 2021, an increase of $264,026 and $634,646, or 95% and 138%, respectively.

Revenues for the three months ended December 31, 2021 were $671,589.

We had revenues of $573,967 and $1,668,105 for the three and nine months ended September 30, 2022, compared to $447,986 and $903,142 for the three and nine months ended September 30, 2021, an increase of $125,981 and $764,963, or 28% and 85%, respectively.

Cost of Revenue

Our cost of revenue for the three and six months ended June 30, 2022 were $195,556 and $334,238, or 36% and 31% of revenue, respectively, compared to $33,764 and $75,206, or 12% and 16% of revenue, for the three and six months ended June 30, 2021.

Gross profit was $274,255 and $598,960 for the three and six months ended June 30, 2022, compared to $210,122 and $339,112 for the three and six months ended June 30, 2021, an increase of $64,133 and $259,848, or 31% and 77%, respectively.

Our cost of revenue for the three and nine months ended September 30, 2022 was $68,551 and $402,788, or 12% and 24% of revenue, respectively, compared to $72,250 and $147,456, or 16% and 16% of revenue, for the three and nine months ended September 30, 2021.

Gross profit was $431,102 and $1,030,062 for the three and nine months ended September 30, 2022, compared to $307,625 and $646,737 for the three and nine months ended September 30, 2021, an increase of $123,477 and $383,325, or 40% and 59%, respectively.

General and Administrative

General and administrative expenses were $888,401 and $1,258,758 for the three and six months ended June 30, 2022, compared to $464,831 and $1,180,918 for the three and six months ended June 30, 2021.

In the three months ended June 30, 2022, general and administrative expenses consisted mainly of advertising of $149,690, consulting fees of $133,200, professional fees of $28,123, and salary and wages of $36,388.

In the three months ended June 30, 2021, general and administrative expenses consisted mainly of consulting fees of $172,750, professional fees of $23,301, salary and wages of $42,573, and advertising of $169,994.

General and administrative expenses were $485,568 and $1,744,326 for the three and nine months ended September 30, 2022, compared to $692,940 and $1,873,858 for the three and nine months ended September 30, 2021.

In the three months ended September 30, 2022, general and administrative expenses consisted mainly of advertising of $456,270, consulting fees of $448,515, broker fees of $383,938, professional fees of $94,966, and salary and wages of $109,305.

In the three months ended September 30, 2021, general and administrative expenses consisted mainly of advertising of $443,416, consulting fees of $534,702, professional fees of $445,223, salary and wages of $109,236, and postage of $36,956.

Other Income (Expense)

Other income (expense) was $(245,181) and $(196,517) for the three and six months ended June 30, 2022, compared to $(303,041) and $(1,009,581) for the three and six months ended June 30, 2021, an increase of $48,664, or 25%, for 2022 and a decrease of $706,540, or 70%, for 2021.

In the three months ended June 30, 2022, other income (expense) consisted of interest expenses, net of interest income of $(24,365) and change in fair value on derivative of $(220,817).

In the three months ended June 30, 2021, other income (expense) consisted of interest expense, net of interest income of $(57,322) and change in fair value on derivative of $(141,839).

Other income (expense) was $(115,757) and $(312,274) for the three and nine months ended September 30, 2022, compared to $(287,155) and $(1,296,736) for the three and nine months ended September 30, 2021, a decrease of $171,398, or 60%, for three months ended September 30, 2022 and a decrease of $984,462, or 76%, for the three months ended September 30, 2021.

In the three months ended September 30, 2022, other income (expense) consisted of interest expenses, net of interest income of $(11,336) and change in fair value on derivative of $(104,421).

In the three months ended September 30, 2021, other income (expense) consisted of interest expense, net of interest income of $(19,242) and change in fair value on derivative of $(307,746), offset by SBA loan forgiveness of $39,833.

Change in fair value of derivative was related to the conversion of convertible debts into common stock shares .

Net Income (Loss)

Net income (loss) was $(859,326) and $856,315), or $0.00 and $0.00 per share, for the three and six months ended June 30, 2022, compared to $(557,751) and $(1,851,387), or $0.00 and $0.01 per share, for the three and six months ended June 30, 2021.

Net income (loss) was $(170,223) and $(1,026,538), or $0.00 and $0.00 per share, for the three and nine months ended September 30, 2022, compared to $(672,470) and $(2,523,857), or $0.00 and $0.01 per share, for the three and nine months ended September 30, 2021.

Our net income (loss) various from period to period primarily because of the change in fair value on derivative.

Liquidity and Capital Resources

During the three and six months ended June 30, 2022, we were unable to generate sufficient revenues and had negative operating cash flows.

Our cash on hand as of December 31, 2021 was $222,098, as of March 31, 2022 was $92,286, and as of June 30, 2022 was $159,405.

Our monthly cash flow burn rate for 2021 (not including inventory purchases) was approximately $37,000, for the three months ended March 31, 2022 was approximately $36,000, and for the six months ended June 30, 2022 was approximately $26,000.

During the three and nine months ended September 30, 2022, we were unable to generate sufficient revenues and had negative operating cash flows.

Our cash on hand as of December 31, 2021 was $222,098 and as of September 30, 2022 was $73,884.

Our monthly cash flow burn rate for 2021 (not including inventory purchases) was approximately $37,000 and for the nine months ended September 30, 2022 was approximately $27,000.

We have strong short and medium term cash needs.

We anticipate that these needs will be satisfied through increased revenues and the issuance of debt or the sale of our securities until such time as our cash flows from operations will satisfy our cash flow needs.

Our cash, current assets, total assets, current liabilities, and total liabilities as of June 30, 2022, March 31, 2022, and December 31, 2021, respectively, are as follows:

Our cash, current assets, total assets, current liabilities, and total liabilities as of September 30, 2022 and December 31, 2021, respectively, are as follows:

September 30,

Total Current Assets

Total Current and Total Liabilities

Our total current assets and total assets decreased during the six months ended June 30, 2022 primarily as a result of our decrease in cash of $62,693, accounts receivable of $33,148, and inventory of $88,877.

Our total current and total liabilities increased by $337,367 during the six months ended June 30, 2022 primarily because of an increase in accounts payable of $76,874, convertible debt of $335,587, and derivative liabilities of $141,839, offset in part by a decrease in accrued liabilities of $51,479 and notes payable to related party of $170,000.

Our accumulated deficit increased during the six months ended June 30, 2022 by $856,315 to $15,799,935.

Our total current assets and total assets decreased during the nine months ended September 30, 2022 primarily as a result of our decrease in cash of $148,214, accounts receivable of $32,585, and inventory of $91,524.

Our total current and total liabilities increased by $385,407 during the nine months ended September 30, 2022 primarily because of an increase in accounts payable of $76,799, notes payable of $93,174, convertible debt of $189,000, and derivative liabilities of $246,260, offset in part by a decrease in accrued liabilities of $52,330 and notes payable to related party of $170,000.

Our accumulated deficit increased during the nine months ended September 30, 2022 by $1,026,538 to $15,970,158.

In order to repay our obligations in full or in part when due, we will be required to raise significant capital from other sources.

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Cash Requirements

Our cash on hand as of June 30, 2022 was $159,405.

Our cash on hand as of September 30, 2022 was $73,884.

Based on our current level of revenues and monthly burn rate of approximately $27,000 per month, we will need to continue to fund operations by raising capital from the sale of our stock and debt financings.

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Operating Activities

We had net cash used in operating activities of $(154,676) for the six months ended June 30, 2022, compared to $(668,875) for the six months ended June 30, 2021.

We had net cash used in operating activities of $(241,015) for the nine months ended September 30, 2022, compared to $(942,175) for the nine months ended September 30, 2021.

We use our cash for normal business operations.

Our net cash used in operating activities for the six months ended June 30, 2022 consisted of our net loss of $856,315 plus our increase in accrued liabilities of $51,479, offset primarily by our warrants issued for services of $422,300, change in fair value on derivative liability of $141,839, increase in inventory of $88,877, and increase in accounts payable of $76,874.

Our net cash used in operating activities for the six months ended June 30, 2021 consisted of our net loss of $1,851,387, plus a decrease in inventory of $164,018 and a decrease in accounts payable of $50,113, offset in part by a change in fair value on derivative liability of $980,225 and warrants issued for services of $341,880.

Our net cash used in operating activities for the nine months ended September 30, 2022 consisted of our net loss of $1,026,538 plus primarily our increase in accrued liabilities of $52,330, offset primarily by our warrants issued for services of $402,100, change in fair value on derivative liability of $246,260, increase in inventory of $91,523, and increase in accounts payable of $76,799.

Our net cash used in operating activities for the nine months ended September 30, 2021 consisted of our net loss of $2,523,857, plus a decrease in inventory of $115,487, a decrease in accounts receivable of $70,311, and a decrease in accounts payable of $41,678, offset in part by a change in fair value on derivative liability of $1,287,971 and warrants issued for services of $434,836.

Investing Activities

We had $(7,987) in cash flows provided by investing activities for the six months ended June 30, 2022, compared to $(73,388) for the six months ended June 30, 2021.

We had $(7,987) in cash flows provided by investing activities for the nine months ended September 30, 2022, compared to $(84,888) for the nine months ended September 30, 2021.

Financing Activities

Our net cash provided by financing activities for the six months ended June 30, 2022 was $99,970, compared to $970,000 for the six months ended June 30, 2021.

Our net cash provided by financing activities for the nine months ended September 30, 2022 was $100,788, compared to $1,083,000 for the nine months ended September 30, 2021.

Our net cash provided by financing activities consisted of proceeds from the issuance of convertible debt of $445,826, offset by proceeds from the issuance of common stock of $(11,386), payments for repayment of convertible debt of $(256,826), and payments for repayment of notes payable related party of $(170,000).

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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