ITEM 7 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
−Removed: We are a platform for acquiring, developing, researching, patenting, marketing, and distributing plant-based nutraceuticals.
−Removed: Our products have not been evaluated by the U.S.
−Removed: Food and Drug Administration (FDA) or any similar regulatory body for safety and efficacy.
+Added: We are a platform for acquiring, developing, patenting, marketing, and distributing plant-based nutraceuticals.
+Added: Our products have not been evaluated by the FDA or any similar regulatory body for safety and efficacy.
Our proprietary and patented products target select high-growth categories within the multibillion-dollar nutraceuticals market, such as heart, brain and immune health.
+Added: Our mission is to acquire or create products with health and performance benefits that have mass consumer appeal.
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.
−Removed: Through published research, our Bergamet products have been shown to support heart health, support immune response, and address metabolic syndrome.
−Removed: On January 13, 2023, we entered into a definitive agreement to acquire nutraceutical manufacturer, Hyperion, and its digital marketing affiliate OPM.
−Removed: We intend to use a portion of the
−Removed: proceeds from this offering to fund this acquisition.
−Removed: Hyperion products have been formulated to support brain, memory, vision, sinus and digestive health, as well as healthy sleep and aging.
−Removed: OPM provides online advertising and marketing for Hyperion as well as other companies in the health and wellness space.
−Removed: The closing of these two acquisitions is expected to occur following the completion of and using the proceeds from this Offering.
−Removed: We anticipate the acquisition of Hyperion and OPM to be transformative to our business, significantly strengthening our manufacturing, marketing and distribution capabilities, expanding our nutraceutical product portfolio, adding positive cash flow, and significantly increasing our annualized gross revenues.
−Removed: Revenues for Hyperion and OPM were over $10 million for the year ended December 31, 2022.
−Removed: We expect the combination of these synergistic and accretive acquisitions to help accelerate our growth and expand our market reach.
−Removed: Our existing natural heart and brain health formulations are perfect for cross selling with Hyperion’s Green Valley Natural Solutions branded product line.
−Removed: Likewise, we see Green Valley sales benefiting from our established broad marketing channels, which includes subscription-based direct-to-consumer sales, national grocery stores, wholesale distribution, and a strong presence on Amazon.
−Removed: We also anticipate that the greater financial and operational strength afforded by these two acquisitions to better enable us to make future strategic complementary acquisitions, including some of which we have identified and are currently evaluating.
−Removed: Going Concern
+Added: 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.
+Added: Our Financial Condition and Going Concern Issues
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, 2023 and 2022 that includes an explanatory paragraph describing the uncertainty as to our ability to continue as a going concern.
18 unchanged sentences
Net gain/(loss)
−Removed: We had revenues of $2,251,469 and $1,676,598 for the years ended December 31, 2022 and 2021, respectively, an increase of $574,871, or 34%.
+Added: We had revenues of $2,485,866 for the year ended December 31, 2023, as compared to $2,251,469 for the year ended December 31, 2022, an increase of $234,397, or 10%.
The increase in revenues was mainly due to our increased focus on the Amazon marketplace.
−Removed: With the additional focus on Amazon marketplace along with adding their fulfillment program, we were able to increase sales through this channel by over $1 million from 2021 to 2022.
Cost of Revenue
−Removed: Cost of revenue was $879,951 and $981,520 for the years ended December 31, 2022 and 2021, respectively, a decrease of $101,568, or 10, and consisted of wholesale product costs and packaging.
−Removed: Additionally, most of the variance was due to the increase in the cost of product merchandise sold during the year.
−Removed: In 2022, most of our items sold had a higher cost due to manufacturing and shipping increases, an increase of $226,169.
−Removed: But we also recognized a difference in inventory adjustment for the two years.
−Removed: In 2022 our inventory adjustment was $96,811 compared to $424,548, a decrease of $327,737.
−Removed: During 2021, we had some raw product that expired, and we wrote off those goods, while in 2022 we did not have any product expire.
+Added: Our cost of revenue was $864,055 for the year ended December 31, 2023, as compared to $879,951 for the year ended December 31, 2022, a decrease of $15,896, or 2%, and consisted of wholesale product costs and packaging.
General and Administrative
−Removed: General and administrative expense was $2,283,107 and $2,584,256 for the years ended December 31, 2022 and 2021, a decrease of $301,148, or 12%.
−Removed: The decrease was related to the reduction in consulting and professional fees during 2022.
+Added: General and administrative expense was $3,865,654 and $2,283,107 for the years ended December 31, 2023 and 2022, an increase of $1,582,546, or 69%.
+Added: The increase was related to stock compensation expenses.
+Added: In the year ended December 31, 2023, general and administrative expenses consisted mainly of stock based compensation of $1,494,191, consulting fees of $592,093, accounting and legal fees of $258,187 and salaries and wages of $198,554.
In the year ended December 31, 2022, general and administrative expenses consisted mainly of consulting fees of $608,819, broker fees of $383,938, selling expenses of $595,318, accounting and legal fees of $145,062, and salaries and wages of $145,589.
−Removed: In the year ended December 31, 2021, general and administrative expenses
−Removed: consisted mainly of consulting of $1,010,902, selling expenses of $560,883, accounting and legal fees of $323,658, salary and wages of $147,938, and transfer agent and filing fees of $46,778.
Net Operating Gain/Loss
−Removed: As a result of the items discussed above, our net operating loss was $911,590 and $1,889,177 for the years ended December 31, 2022 and 2021, respectively, a reduction of $977,587, or 52%.
+Added: As a result of the items discussed above, our net operating loss was $2,243,843 and $911,590 for the years ended December 31, 2023 and 2022, respectively, an increase of $1,332,253, or 146%.
Other Income and Expense
−Removed: Other income (expense) was $(71,531) and $(97,945) for the years ended December 31, 2022 and 2021, respectively, a decrease of $26,414, or 27%.
+Added: Other income (expense) was $(229,088) and $(71,531) for the years ended December 31, 2023 and 2022, respectively, an increase of $157,557, or 220%.
+Added: For the year ended December 31, 2023, our other income (expense) consisted of interest expenses, net of interest income of $(176,948) and change in fair value on derivative of $(52,140).
+Added: For the year ended December 31, 2022, our other income (expense) consisted of interest expenses, net of interest income of $(64,690) and change in fair value on derivative of $(9,484), offset by a gain on the sale of asset of $2,643.
Net Gain/(Loss)
−Removed: Our net gain (loss) for the year ended December 31, 2022 was $(983,121), or $0.00 per share, and our net gain (loss) for the ended December 31, 2021 was $(1,987,122), or $(0.01) per share, a decrease of $1,004,000, or 51%.
+Added: Our net gain (loss) for the year ended December 31, 2023 was $(2,472,931), or $0.85 per share, and our net gain (loss) for the ended December 31, 2022 was $(983,121), or $(0.34) per share, an increase of $1,489,810, or 152%.
Liquidity and Capital Resources
1 unchanged sentence
Our cash on hand as of December 31, 2023 was $19,441.
−Removed: Our monthly cash flow burn rate in 2022 (not including inventory purchases) was approximately $28,000.
+Added: Our monthly cash flow burn rate in 2023 was approximately $35,000.
Although we have strong short term cash needs, as our operating expenses increase, we will face strong medium to long term cash needs.
1 unchanged sentence
Our cash, current assets, total assets, current liabilities, and total liabilities as of December 31, 2023 and 2022 were as follows:
−Removed: December 31, 2022
−Removed: December 31, 2021
Total Current Assets
3 unchanged sentences
Our total current assets decreased by $143,909 because of our decrease in cash, as well as accounts receivable and inventory.
−Removed: Our total assets decreased by $74,371, despite our decrease in current assets, as a result of our increase in prepaid acquisition costs, deposits, and fixed assets (net of accumulated depreciation).
+Added: Our total assets decreased by $146,104 for the same reasons.
Our current and total liabilities increased by $777,636, from $902,788 as of December 31, 2022 to $1,680,424 as of December 31, 2023.
−Removed: Our total liabilities as of the year ended December 31, 2022 consisted primarily of convertible det of $317,284 and notes payable of $275,370.
+Added: Our total liabilities as of the year ended December 31, 2023 consisted primarily of convertible debt, net of discount of $608,601, notes payable of $361,093, and accrued liabilities of $215,069.
In order to repay our obligations in full or in part when due, we will be required to raise significant capital from other sources.
2 unchanged sentences
Our cash on hand as of December 31, 2022 was $19,441.
−Removed: Our monthly cash flow burn rate in 2022 (not including inventory purchases) was approximately $28,000.
+Added: Our monthly cash flow burn rate in 2023 was approximately $35,000.
Although we have strong short term cash needs, as our operating expenses increase, we will face strong medium to long term cash needs.
1 unchanged sentence
Sources and Uses of Cash
−Removed: Our net cash used in operating activities for the years ended December 31, 2022 and 2021 $334,964 and $901,298, respectively, a decrease of $566,334, or 63%.
+Added: Our net cash used in operating activities for the years ended December 31, 2023 and 2022 was $415,749 and $390,621, respectively, an increase of $25,128, or 6%.
+Added: Our net cash used in operating activities for the year ended December 31, 2023 consisted primary of a net loss of $2,472,931, offset primarily by an adjustment for warrants issued for services of $1,639,191 and changes in inventory of $192,845.
Our net cash used in operating activities for the year ended December 31, 2022 consisted of a net loss of $983,121 offset by an adjustment for warrants issued for services of $402,100, an increase in inventory of $138,838, and an increase in accounts payable of $54,048.
−Removed: Our net cash used in operating activities for the year ended December 31, 2021 consisted primary of a net loss of $1,987,122, plus a decrease in accounts receivable of $120,066, offset by an adjustment for warrants issued for services of $608,836 and changes in inventory of $459,717.
−Removed: Our cash flow provided by (used in) investing activities for the years ended December 31, 2022 and 2021 was $7,987) and $(96,004), respectively, a decrease of $88,017.
−Removed: All of our investing activities in 2021 was as a result of a reduction in the value of our trademarks.
−Removed: Our net cash provided by financing activities for the years ended December 31, 2022 and 2021 was $186,504 and $1,160,199, respectively, a decrease of $973,695, or 84%.
−Removed: The decrease in 2022 was due to proceeds from the issuance of convertible debt of $463,630 and from the issuance of notes payable of $275,370, offset primarily by the repayment of convertible debt of $318,095 and repayment of notes payable of $170,000.
+Added: Our cash flow provided by (used in) investing activities for the years ended December 31, 2023 and 2022 was $zero and ($5,344), respectively.
+Added: Our net cash provided by financing activities for the years ended December 31, 2023 and 2022 was $369,539 and $239,518, respectively, an increase of $130,021, or 54%.
+Added: The increase in 2023 was due primarily to proceeds from the issuance of notes payable of $713,283 and proceeds from the issuance of convertible debt of $362,963, offset by the repayment of notes payable of $657,560 and repayment of convertible debt of $110,535.
Critical Accounting Policies and Estimates
1 unchanged sentence
GAAP requires management to make estimates and assumptions that affect the reported amounts in our consolidated financial statements and related notes.
−Removed: Our significant accounting policies are
−Removed: described in Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.
+Added: Our significant accounting policies are described in Note 2 to our consolidated financial statements.
Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
27 unchanged sentences
When distinct performance obligations exist, the Company allocates the contract transaction price to each distinct performance obligation.
−Removed: The standalone selling price is used to allocate the transaction price to the separate performance obligations.
+Added: standalone selling price is used to allocate the transaction price to the separate performance obligations.
The Company recognizes revenue when, or as, the performance obligation is satisfied.
23 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.