What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-14 compared with 2023-05-15 · 39 added, 35 removed, 67 unchanged (52% of the section changed)

26 unchanged sentences

Guided by this mission, our first two acquisitions formed our current operating subsidiaries, Bergamet, which offers nutraceutical heart and immune health products, and UBN, which offers nutraceutical products for brain health.

Through published research from outside sources, our Bergamet products have been shown to support heart health, support immune response, and address metabolic syndrome.

Based on published research from third-party sources, we believe our Bergamet products have been shown to support heart health, support immune response, and address metabolic syndrome.

Our Financial Condition and Going Concern Issues

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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 Months Ended March 31, 2023 and 2022

We had revenues of $614,943 for the three months ended March 31, 2023, compared to $551,654 for the three months ended March 31, 2022.

Our cost of revenue for the three months ended March 31, 2023 were $337,102, compared to $226,949 for the three months ended March 31, 2022.

Our operating expenses were $683,029 for the three months ended March 31, 2023, compared to $370,357 for the three months ended March 31, 2022, an increase of $312,672, or 84%.

Results of Operations for the Three and Six Months Ended June 30, 2023 and 2022

We had revenues of $588,484 and $1,203,427 for the three and six months ended June 30, 2023, compared to $469,812 and $933,198 for the three and six months ended June 30, 2022.

Our cost of revenue for the three and six months ended June 30, 2023 were $303,415 and $640,517, compared to $195,556 and $334,238 for the three and six months ended June 30, 2022.

Our operating expenses were $1,540,942 and $2,223,972 for the three and six months ended June 30, 2023, compared to $888,401 and $1,258,758 for the three and six months ended June 30, 2022.

Our operating expenses consisted entirely of general and administrative expenses.

Our net loss was $1,267,235 and $1,846,392 for the three and six months ended June 30, 2023, compared to $859,326 and $856,315 for the three and six months ended June 30, 2022.

Revenues and Net Operating Loss

Our revenue, operating expenses, net operating loss, and net gain (loss) for the three months ended March 31, 2023 and 2022 were as follows:

Our revenue, operating expenses, other income (expense), and net loss for the three and six months ended June 30, 2023 and 2022 were as follows:

Cost of Revenue

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Change in fair value on derivative

Loss on extinguishment of debt

SBA Loan Forgiveness

Gain on sale of asset

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Net income (loss)

We had revenues of $614,943 for the three months ended March 31, 2023, compared to $551,654 for the three months ended March 31, 2022, an increase of $63,290, or 11%.

Our cost of revenue for the three months ended March 31, 2023 were $337,102, or 55% of revenue, compared to $226,949 for the three months ended March 31, 2022, or 41% of revenue.

We had revenues of $588,484 and $1,203,427 for the three and six months ended June 30, 2023, compared to $469,812 and $933,198 for the three and six months ended June 30, 2022, an increase of $118,672, or 25%, and $270,230, or 29%, respectively.

Revenues for the three months ended December 31, 2022 were $583,287.

We expect strong growth to increase as our direct consumer sales and marketing efforts continue to perform.

Cost of Revenue

Cost of revenue was $337,102 for the three months ended March 31, 2023, compared to $226,949 for the three months ended March 31, 2022, an increase of $110,153, or 49%.

Gross profit was $277,841 for the three months ended March 31, 2023, compared to $324,705 for the three months ended March 31, 2022, a decrease of $46,864, or 14%.

Cost of revenue as a percentage of revenues was 55% for the three months ended March 31, 2023, compared to 41% for the three months ended March 31, 2022.

Our cost of revenue for the three and six months ended June 30, 2023 were $303,415 and $640,517, compared to $195,556 and $334,238 for the three and six months ended June 30, 2022, an increase of $107,859, or 55%, and $306,279, or 92%, respectively.

Gross profit for the three and six months ended June 30, 2023 was $285,069 and $562,911, compared to $274,255 and $598,960 for the three and six months ended June, 30, 2022, an increase of $10,814, or 4%, and a decrease of $36,049, or 6%, respectively.

Cost of revenue as a percentage of revenues was 52% and 53% for the three and six months ended June 30, 2023, compared to 42% and 36% for the three and six months ended June 30, 2022.

Cost of revenue was higher in 2023 compared to 2022 because of higher material and shipping costs.

General and Administrative

General and administrative expenses were $683,029 for the three months ended March 31, 2023, compared to $370,357 for the three months ended March 31, 2022.

In the three months ended March 31, 2023, general and administrative expenses consisted mainly of advertising of $175,870, consulting fees of $193,405, professional fees of $104,233, and salary and wages of $35,157.

In the three months ended March 31, 2022, general and administrative expenses consisted mainly of advertising of $162,329, consulting fees of $97,750, professional fees of $43,870, and salary and wages of $35,489.

Our general and administrative expenses were $1,540,942 and $2,223,972 for the three and six months ended June 30, 2023, compared to $888,401 and $1,258,758 for the three and six months ended June 30, 2022, an increase of $652,541, or 73%, and $965,214, or 77%, respectively.

In the three months ended June 30, 2023, general and administrative expenses consisted mainly of consulting fees of $766,405, stock based compensation $432,047, advertising of $168,148, accounting and legal fees of $30,883, and salary and wages of $36,813.

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.

During the three months ended June 30, 2023, part of the increase in costs were due to a catch up of stock compensation that occurred.

Additionally, some of the incremental costs of the Company’s uplist have not been deferred and have been included.

Other Income (Expense)

Other income (expense) was $(173,968) for the three months ended March 31, 2023, compared to $48,664 for the three months ended March 31, 2022, a decrease of $222,632, or 457%.

In the three months ended March 31, 2023, other income (expense) consisted of interest expenses, net of interest income of $(89,060) and change in fair value on derivative of $(84,908).

In the three months ended March 31, 2022, other income (expense) consisted of interest expense, net of interest income of $(32,957) and change in fair value on derivative of $78,978.

Other income (expense) was $(11,362) and $(185,331) for the three and six months ended June 30, 2023, compared to $(245,181) and $(196,517) for the three and six months ended June 30, 2022, a decrease of $233,819, or 95%, and $11,186, or 6%, respectively.

In the six months ended June 30, 2023, other income (expense) consisted of interest expenses, net of interest income of $(25,212) and change in fair value on derivative of $13,850.

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

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 ($579,157) and $3,011, or $0.00 and $0.00 per share, for the three months ended March 31, 2023 and 2021.

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

Net income (loss) was $(1,267,235) and $(1,846,392), or $0.00 and $0.01 per share, for the three and six months ended June 30, 2023, compared to $(859,326) and $(856,315), or $0.00 and $0.00 per share, for the three and six months ended June 30, 2022.

Our net income (loss) varies from period to period primarily because of the change in fair value on derivative and our increase in general and administrative expenses.

Liquidity and Capital Resources

During the three months ended March 31, 2023, we were unable to generate sufficient revenues and had negative operating cash flows.

Our cash on hand as of December 31, 2022 was $65,651, and as of March 31, 2023 was $213,204.

The increase in cash on hand was primarily from our net cash provided by financing activities of $457,812, offset in part by our net cash used in operating activities of $(310,259).

Our monthly cash flow burn rate for the three months ended March 31, 2023 was approximately $26,000.

During the three and six months ended June 30, 2023, we were unable to generate sufficient revenues and had negative operating cash flows.

Our cash on hand as of December 31, 2022 was $65,651, as of March 31, 2023 was $213,204, and as of June 30, 2023 was $92,501.

The increase in cash on hand at March 31, 2023 was primarily from our net cash provided by financing activities.

Our monthly cash flow burn rate for the six months ended June 30, 2023 was approximately $67,250.

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 March 31, 2023 and December 31, 2022, respectively, are as follows:

Our cash, current assets, total assets, current liabilities, and total liabilities as of June 30, 2023 and December 31, 2022, respectively, are as follows:

Total Current Assets

Total Current and Total Liabilities

Our total current assets and total assets increased during the three months ended March 31, 2023 primarily as a result of our increase in cash of $147,553 and prepaid acquisition costs of $32,617, offset by our decrease in inventory of $164,922.

Our accumulated deficit increased during the three months ended March 31, 2023 by $579,157 to $16,505,898.

Our total current assets and total assets decreased slightly during the six months ended June 30, 2023 primarily as a result of our decrease in inventory of $354,503, offset in part by our increase in right of use asset and prepaid acquisition costs.

Our accumulated deficit increased during the six months ended June 30, 2023 by $1,846,392 to $17,773,134.

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 March 31, 2023 was $213,204.

Our cash on hand as of June 30, 2023 was $92,501.

Based on our current level of revenues and monthly burn rate of approximately $67,250 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 $(310,259) for the three months ended March 31, 2023, compared to $(108,408) for the three months ended March 31, 2022.

We had net cash used in operating activities of $403,493 for the six months ended June 30, 2023, compared to $157,319 for the six months ended June 30, 2022.

We use our cash for normal business operations.

Our net cash used in operating activities for the three months ended March 31, 2023 consisted of our net loss of $579,157 plus our decrease in accounts receivable of $29,604, offset by our increase in inventory of $164,922, change in fair value on derivative liability of $84,908, and increase in accounts payable of $23,170.

Our net cash used in operating activities for the three months ended March 31, 2022 consisted of our net gain of $3,011 plus our increase in accounts payable of $68,153, offset by our change in fair value on derivative liability of $(78,978), decrease in accrue liabilities of $(54,767), and decrease in inventory of $(50,558).

Our net cash used in

operating activities for the six months ended June 30, 2023 consisted of our net loss of $1,846,392, offset in part by our warrants issued for services of $1,148,857, and increase in inventory of $354,503.

Our net cash used in operating activities for the three months ended June 30, 2022 consisted of our net loss of $856,315, offset in part by our warrants issued for services of $422,300, an increase in accounts payable of $76,874, and an increase in accounts receivable of $33,148.

Investing Activities

We had zero cash flows provided by investing activities for the three months ended March 31, 2023, compared to $(7,987) for the three months ended March 31, 2023.

We had zero cash flows provided by investing activities for the six months ended June 30, 2023, compared to $(5,344) for the six months ended June 30, 2022.

Financing Activities

Our net cash provided by financing activities for the three months ended March 31, 2023 was $457,812, compared to $(13,417) for the three months ended March 31, 2022.

Our net cash provided by financing activities consisted of proceeds from the issuance of convertible debt of $167,819, proceeds from issuance of note payable of $136,705, payments for repayment of convertible debt of $110,535, and payments for repayment of notes payable of $75,370, offset by expenses for the purchase of Hyperion and OP&M of $(32,617).

Our net cash provided by financing activities for the six months ended June 30, 2023 was $430,342, compared to $99,970 for the six months ended June 30, 2022.

Our net cash provided by financing activities consisted of proceeds from the issuance of notes payable of $431,000, proceeds from the issuance of convertible debt of $350,000, and loan origination fees of $68,888, offset by repayment of notes payable of $309,011 and repayment of convertible debt of $110,535.

ITEM 3 Quantitative and Qualitative Disclosures About Market Risk

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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