What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-14 compared with 2024-05-20 · 50 added, 39 removed, 56 unchanged (61% of the section changed)

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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.

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.

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

Based on published research from third-party sources, we believe our BergaMet NA, LLC 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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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 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%.

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, 2024 and 2023

We had revenues of $908,389 and $1,597,175 for the three and six months ended June 30, 2024, compared to $588,484 and $1,203,427 for the three and six months ended June 30, 2023.

Our cost of revenue for the three and six months ended June 30, 2024 were $422,301 and $702,728, compared to $303,415 and $640,517 for the three and six months ended June 30, 2023.

Our operating expenses were $497,996 and $968,427 for the three and six months ended June 30, 2024, compared to $1,540,942 and $2,223,972 for the three and six months ended June 30, 2023.

Our operating expenses consisted entirely of general and administrative expenses.

Our net income (loss) was $113,500 and $(747,758) for the three and six months ended June 30, 2024, compared to $(1,267,235) and $(1,846,392) for the three and six months ended June 30, 2023.

Revenues and Net Operating Loss

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

Our revenue, operating expenses, other income (expense), and net loss for the three and six months ended June 30, 2024 and 2023 were as follows:

Cost of Revenue

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Total operating expenses

Net operating loss

Other income (expense)

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.

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 $908,389 and $1,597,175 for the three and six months ended June 30, 2024, compared to $588,484 and $1,203,427 for the three and six months ended June 30, 2023, an increase of

$319,905, or 54%, and $393,748, or 33%, respectively.

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

Cost of Revenue

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.

Our cost of revenue for the three and six months ended June 30, 2024 were $422,301 and $702,728, compared to $303,415 and $640,517 for the three and six months ended June 30, 2023, an increase of $118,886, or 39%, and $62,212, or 10%, respectively.

Gross profit for the three and six months ended June 30, 2024 was $486,088 and $894,446, compared to $285,069 and $562,911 for the three and six months ended June, 30, 2023, an increase of $201,019, or 71%, and $331,536, or 59%, respectively.

Cost of revenue as a percentage of revenues was 46% and 44% for the three and six months ended June 30, 2024, compared to 52% and 53% for the three and six months ended June 30, 2023.

The reduced cost as a percentage of revenues was due to efficiencies as a result of increased revenue.

General and Administrative

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%.

Our general and administrative expenses were $497,996 and $968,427 for the three and six months ended June 30, 2024, compared to $1,540,942 and $2,223,972 for the three and six months ended June 30, 2023, a decrease of $1,042,947, or 68%, and $1,255,545, or 56%, respectively.

In the three months ended June 30, 2024, general and administrative expenses consisted mainly of advertising of $172,118, consulting fees of $94,500, stock-based compensation $74,854, salaries and wages of $51,476.88 and accounting and legal fees of $41,778.50.

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.

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 $125,408 and $(673,777) for the three and six months ended June 30, 2024, compared to $(11,362) and $(185,331) for the three and six months ended June 30, 2023, an increase of $136,770, or 1,200%, and a decrease of 488,447, or 264%, respectively.

In the six months ended June 30, 2024, other income (expense) consisted of interest expense, net of interest income $(91,305) and change in fair value on derivative of $(582,472).

In the six months ended June 30, 2023, other income (expense) consisted of interest expenses, net of interest income of $(114,272) and change in fair value on derivative of $(71,058).

In the three months ended June 30, 2024, other income (expense) consisted of interest expense, net of interest income ($48,748) and change in fair value on derivative of $174,156.

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

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 $113,500 and $(747,758), or $0.04 and $(0.25) per share, for the three and six months ended June 30, 2024, compared to $(1,267,235) and $(1,846,392), or $(0.44) and $(0.64) per share, for the three and six months ended June 30, 2023.

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, 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.

During the three and six months ended June 30, 2024, we had positive operating cash flows.

Our cash on hand as of December 31, 2023 was $19,441 and as of June 30, 2024 was $148,231.

While we had positive net cash from operations for the three and six months ended June 30, 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 March 31, 2024, and December 31, 2023, respectively, are as follows:

Our cash, current assets, total assets, current liabilities, and total liabilities as of June 30, 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 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.

Our total current assets and total assets decreased slightly during the six months ended June 30, 2024, primarily as a result of our decrease in inventory of $306,661, offset in part by an increase in cash of $128,790.

Our accumulated deficit increased during the six months ended June 30, 2024, by $747,758 to $19,147,431.

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, 2024 was $87,312.

Our cash on hand as of June 30, 2024 was $148,231.

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.

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Operating Activities

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 had net cash from operating activities of $187,809 for the six months ended June 30, 2024, compared to net cash used in operating activities of $(403,493) for the six months ended June 30, 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.

Our net cash from operating activities for the six months ended June 30, 2024, consisted of our net loss of $747,758, offset in part by our change in fair value on derivative liability of $582,472 and our decrease in inventory of $306,661.

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.

Investing Activities

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

We had zero cash flows provided by investing activities for the six months ended June 30, 2024 and 2023.

Financing Activities

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.

Our net cash provided by financing activities for the six months ended June 30, 2024 was $(59,019), compared to $430,342 for the six months ended June 30, 2023.

Our net cash provided by financing activities consisted of proceeds from the issuance of notes payable of $120,669 and proceeds from the issuance of notes payable related party of $95,000, offset by repayment of notes payable of $300,614.

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