What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-20 compared with 2023-11-14 · 41 added, 56 removed, 54 unchanged (64% of the section changed)

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From inception (December 19, 2014) through the end of December 31, 2023, we have incurred accumulated net losses of $18,399,673.

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.

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.

If we are not able to do this, we may not be able to continue as an operating company.

At our current revenue and burn rate, we have an immediate cash need, and thus we must raise capital by issuing debt or through the sale of our stock.

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 Nine months Ended September 30, 2023 and 2022

We had revenues of $613,541 and $1,816,968 for the three and nine months ended September 30, 2023, compared to $499,653 and $1,432,850 for the three and nine months ended September 30, 2022.

Our cost of revenue for the three and nine months ended September 30, 2023 were $120,309 and $760,825, compared to $68,551 and $402,788 for the three and nine months ended September 30, 2022.

Our operating expenses were $754,026 and $2,977,998 for the three and nine months ended September 30, 2023, compared to $485,568 and $1,744,326 for the three and nine months ended September 30, 2022.

Our operating expenses consisted entirely of general and administrative expenses.

Our net loss was $247,924 and $2,094,316 for the three and nine months ended September 30, 2023, compared to $170,223 and $1,026,538 for the three and nine months ended September 30, 2022.

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, 2024 and 2023

We had revenues of $688,786 for the three months ended March 31, 2024, as compared to $614,943 for the three months ended March 31, 2023, an increase of $73,842, or 12%.

Our cost of revenue was $280,428 for the three months ended March 31, 2024, as compared to $337,102 for the three months ended March 31, 2023, a decrease of $56,674, or 17%.

Revenues and Net Operating Loss

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

September 30,

Our revenues, operating expenses, and net operating loss for the three months ended March 31, 2024 and 2023, were as follows:

Three Months Ended March 31, 2024

Three Months Ended March 31, 2023

Cost of Revenue

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Total operating expenses

Net operating loss

Other income/(expense)

Interest expenses, net of interest income

Change in fair value on derivative

Gain on sale of asset

Total other income (expense)

Net income (loss)

We had revenues of $613,541 and $1,816,968 for the three and nine months ended September 30, 2023, compared to $499,653 and $1,432,850 for the three and nine months ended September 30, 2022, an increase of $113,889, or 23%, and $384,118, or 27%, respectively.

Revenues for the three and six months ended June 30, 2023 were $588,484 and $1,203,427, respectively.

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

Net gain/(loss)

We had revenues of $688,786 for the three months ended March 31, 2024, as compared to $614,943 for the three months ended March 31, 2023, an increase of $73,842, or 12%.

The increase in revenues was mainly due to our increased focus on the Amazon marketplace.

Cost of Revenue

Our cost of revenue for the three and nine months ended September 30, 2023 were $120,309 and $760,825, compared to $68,551 and $402,788 for the three and nine months ended September 30, 2022, an increase of $51,758, or 76%, and $358,037, or 89%, respectively.

Gross profit for the three and nine months ended September 30, 2023 was $493,233 and $1,056,143, compared to $431,102 and $1,030,062 for the three and nine months ended September 30, 2022, an increase of $62,131, or 14%, and $26,081, or 3%, respectively.

Cost of revenue as a percentage of revenues was 20% and 42% for the three and nine months ended September 30, 2023, compared to 14% and 28% for the three and nine months ended September 30, 2022.

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

Our cost of revenue was $280,428 for the three months ended March 31, 2024, as compared to $337,102 for the three months ended March 31, 2023, a decrease of $56,674, or 17%, and consisted of wholesale product costs and packaging.

General and Administrative

Our general and administrative expenses were $754,026 and $2,977,998 for the three and nine months ended September 30, 2023, compared to $485,568 and $1,744,326 for the three and nine months ended September 30, 2022, an increase of $268,458, or 55%, and $1,233,672, or 71%, respectively.

In the three months ended September 30, 2023, general and administrative expenses consisted mainly of consulting fees of $140,593, stock based compensation $125,614, advertising of $271,978, accounting and legal fees of $86,948, and salary and wages of $79,520.

In the three months ended September 30, 2022, general and administrative expenses consisted mainly of advertising of $ 139,563, consulting fees of $160,465, professional fees of $23,773, and salary and wages of $37,428.

During the three months ended September 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 potential acquisition have been included.

Other Income (Expense)

Other income (expense) was $12,869 and $(172,461) for the three and nine months ended September 30, 2023, compared to $(115,757) and $(312,274) for the three and nine months ended September 30, 2022, an increase of $128,626, or 111%, and a decrease of $139,813, or 45%, respectively.

In the three months ended September 30, 2023, other income (expense) consisted of interest expenses, net of interest income of $(24,502) and change in fair value on derivative of $37,371.

In the three months ended September 30, 2022, other income (expense) consisted of interest expense, net of interest income of $(138,774) and change in fair value on derivative of $(333,687).

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 $(247,924) and $(2,094,316), or $0.00 and $0.01 per share, for the three and nine months ended September 30, 2023, compared to $(170,223) and $(1,026,538), or $0.00 and $0.00 per share, for the three and nine months ended September 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.

General and administrative expense was $470,431 and $683,029 for the three months ended March 31, 2024 and 2023, respectively, a decrease of $212,598, or 31%.

For the three months ended March 31, 2024, general and administrative expenses consisted mainly of advertising fees of $127,849, consulting fees of $105,000, accounting and legal fees of $73,631, stock based compensation of $58,314, and salaries and wages of $44,123.

For 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 salaries and wages of $35,157.

Net Operating Gain/Loss

As a result of the items discussed above, our net operating loss was $62,073 for the three months ended March 31, 2024, and our net operating loss was $405,188 for the three months ended March 31, 2023, an decrease of $343,115, or 85%.

Other Income and Expense

Other income (expense) was $(799,185) and $(173,968) for the three months ended March 31, 2024 and 2023, respectively, an increase of $625,217, or 359%.

For the three months ended March 31, 2024, our other income (expense) consisted of interest expenses, net of interest income of $(42,557) and change in fair value on derivative of $(756,628).

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

Net Gain/(Loss)

Our net gain (loss) for the three months ended March 31, 2024 was $(861,259), or $(0.30) per share, and our net gain (loss) for the three months ended March 31, 2023, was $(579,157), or $(0.20) per share, an increase of $282,102, or 49%.

Liquidity and Capital Resources

During the three and nine months ended September 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 and as of September 30, 2023 was $46,391.

Our monthly cash flow burn rate for the nine months ended September 30, 2023 was approximately $39,000.

We have strong short and medium term cash needs.

During the three months ended March 31, 2024, we were unable to generate sufficient revenues and had negative operating cash flows.

Our cash on hand as of December 31, 2023 was $19,441 and as of March 31, 2024 was $87,312.

While we had positive net cash from operations for the three months ended March 31, 2024, our monthly cash flow burn rate for the year ended December 31, 2023 was $35,000.

We have both 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 September 30, 2023 and December 31, 2022, respectively, are as follows:

September 30,

Our cash, current assets, total assets, current liabilities, and total liabilities as of March 31, 2024, and December 31, 2023, respectively, are as follows:

Total Current Assets

Total Current and Total Liabilities

Our total current assets and total assets decreased slightly during the nine months ended September 30, 2023 primarily as a result of our decrease in inventory of $291,553, offset in part by an increase in our offering costs of $135,202 and right of use asset of $86,279.

Our accumulated deficit increased during the nine months ended September 30, 2023 by $2,094,316 to $18,021,058.

Our total current assets and total assets decreased slightly during the three months ended March 31, 2024, primarily as a result of our decrease in inventory of $73,469, offset in part by an increase in cash of $67,871.

Our accumulated deficit increased during the three months ended March 31, 2024, by $861,259 to $19,260,931.

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 September 30, 2023 was $46,391.

Based on our current level of revenues and monthly burn rate of approximately $39,000 per month, we will need to continue to fund operations by raising capital from the sale of our stock and debt financings.

Our cash on hand as of March 31, 2024 was $87,312.

Based on our current level of revenues and monthly burn rate for 2023 of approximately $35,000 per month, we will need to continue to fund operations by raising capital from the sale of our stock and debt financings.

Sources and Uses of Cash

Operating Activities

We had net cash used in operating activities of $471,373 for the nine months ended September 30, 2023, compared to $243,658 for the nine months ended September 30, 2022.

use our cash for normal business operations.

Our net cash used in operating activities for the nine months ended September 30, 2023 consisted of our net loss of $2,094,316, offset in part by our warrants issued for services of $1,275,471 and increase in inventory of $291,553.

Our net cash used in operating activities for the nine months ended September 30, 2022 consisted of our net loss of $1,026,538, offset in part by our warrants issued for services of $402,100 and change in fair value on derivative liability of $246,260.

We had net cash from operating activities of $18,724 for the three months ended March 31, 2024, compared to net cash used in operating activities of $342,876 for the three months ended March 31, 2023.

We use our cash for normal business operations.

Our net cash from operating activities for the three months ended March 31, 2024, consisted of our net loss of $861,259, offset in part by our change in fair value on derivative liability of $756,628 and our decrease in inventory of $73,469.

Our net cash used in operating activities for the three months ended March 31, 2023, consisted of our net loss of $579,157, offset in part by our increase in inventory of $164,922 and our change in fair value on derivative liability of $84,908.

Investing Activities

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

We had zero cash flows provided by investing activities for the three months ended March 31, 2024 and 2023.

Financing Activities

Our net cash provided by financing activities for the nine months ended September 30, 2023 was $452,113, compared to $100,788 for the nine months ended September 30, 2022.

Our net cash provided by financing activities consisted of proceeds from the issuance of notes payable of $627,000 and proceeds from the issuance of convertible debt of $350,000, offset by repayment of notes payable of $530,740 and repayment of convertible debt of $110,535.

Our net cash provided by financing activities for the three months ended March 31, 2024 was $49,146, compared to $490,429 for the three months ended March 31, 2023.

Our net cash provided by financing activities consisted of proceeds from the issuance of notes payable of $118,132, proceeds from the issuance of notes payable related party of $95,000, and proceeds from the issuance of convertible debt of $19,445, offset by repayment of notes payable of $183,430.

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