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Item 7. Management’s Discussion and Analysis

2026-04-01 compared with 2025-03-31 · 259 added, 382 removed, 221 unchanged (74% of the section changed)

1 unchanged sentence

of Financial Condition and Results of Operations

following discussion and analysis of our financial condition and results of operations should be read in conjunction with the audited

condensed consolidated financial statements and the notes thereto contained elsewhere in this Annual Report.

Certain information contained

in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Our actual results

may differ significantly from the results, expectations and plans discussed in these forward-looking statements.

following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated

financial statements and the notes thereto contained elsewhere in this Annual Report.

Certain information contained in the discussion

and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Our actual results may differ significantly

from the results, expectations and plans discussed in these forward-looking statements.

We are a provider of consumer

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Our management’s discussion

and analysis of our financial condition and results of operations are only based on our current business and should be read in conjunction

with our unaudited interim condensed consolidated financial statements and audited consolidated financial statements and accompanying

notes thereto included elsewhere in this prospectus.

Key factors affecting our results of operations include revenues, cost of revenue,

operating expenses and income and taxation.

and analysis of our financial condition and results of operations are based on our current business and should be read in conjunction

with our consolidated financial statements and accompanying notes thereto included elsewhere in this Annual Report.

Key factors affecting

our results of operations include revenues, cost of revenue, operating expenses and income and taxation.

Non-GAAP Financial Measures

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We believe that EBITDA, viewed

in addition to, and not in lieu of, our reported results in accordance with accounting principles generally accepted in the United States

in addition to, and not in lieu of, our reported results in accordance with U.S.

GAAP, provides useful information to investors.

Net income (loss)

$ (12,341,208 )

Interest income

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Depreciation and amortization

EBITDA is considered non-GAAP

financial measures.

$ (6,185,726 )

EBITDA is considered a non-GAAP

financial measure.

EBITDA represents earnings before interest, taxes, depreciation and amortization.

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Consumer Goods

For the year ended December

31, 2024, our Nutraceuticals revenue consisted of $30,798,145 from our FOCUSfactor brand and $4,019,188 from our Flat Tummy brand, as

compared to $37,202,521 and $5,550,531, respectively, for the year ended December 31, 2023.

The decrease in our Nutraceutical

category was due to undertaking a rebranding and packaging upgrade for FOCUSfactor that resulted in customers selling through their existing

inventory before bringing in the new packaging.

The decrease in the Consumer Goods category is due to normalization of business after

the 2019 launch of our online application.

The decrease in our

Nutraceutical category was due to a shift in management focus on developing new products for the Beverages category and an overall

decrease in sales.

The decrease in our Beverage category was due to limited test during 2024 in Canada.

During first and second quarter

of 2025, we licensed our FOCUSfactor and Flat Tummy intellectual property for $2,900,000 and we recognized revenue for the license fee

at that time.

During fourth quarter of 2025, due to the instability in the regions the licensee was expanding to, the entity canceled

its license with the Company resulting in a reversal of the revenue of the same $2,900,000.

Cost of Sales

For the year ended December 31, 2024, our cost of sales was $11,191,224.

For the year ended December 31,

2025, our cost of sales was $10,077,992.

Our cost of sales for the year ended December 31, 2024 was $11,191,224.

The increase in cost of sales was primarily due to a settlement

with a supplier in 2023 resulting in a reduction in cost of sales for 2023.

The decrease in

cost of sales was primarily due to lower revenue.

Gross profit was $20,302,817,

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period in 2024, a decrease of $3,340,202 or 14%.

The decrease in gross profit is largely related to the decrease in net sales due to

the rebranding of FOCUSfactor.

The decrease in gross profit related to lower revenue.

Operating Expenses

Selling and Marketing Expenses

For the year ended December 31,

2024, our selling and marketing expenses were $12,991,431 as compared to $15,188,528 for the year ended December 31, 2023.

is due to management of expenses.

For the year ended December 31, 2025, our selling and marketing

expenses were $13,137,779 as compared to $12,991,431 for the year ended December 31, 2024.

The increase is related to the mix of

advertising utilized.

General and Administrative Expenses

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expenses were $4,717,006.

The decrease is largely due to management of expenses.

The increase is largely due to an increase in professional fees, legal expense, board of directors’ expense,

the write off of prepaid media credits carried over from 2024 and the increased overhead as we build the beverage division.

Reserve for Bad Debts

For the year ended December 31,

2025, our reserve for bad debts was $6,660,650 compared to $0 for the year ended December 31, 2024.

The increase is due to the write off

of a related party loan receivable of $4,403,804, a write off of uncollectible other receivables of $1,654,249, a write off of uncollectible

accounts receivable of $225,018 and recognizing an allowance for doubtful accounts of $377,579.

Depreciation and Amortization Expenses

For the year ended December 31, 2024, our depreciation and amortization

expenses were $133,334 as compared to $33,333 for the year ended December 31, 2023.

The increase is due to full year of amortization

on license fee during 2024.

For both the years ended

December 31, 2025 and 2024, our depreciation and amortization expenses were $133,334.

Other Income and Expenses

For the years ended December 31,

2024 and December 31, 2023, we had other (income) and expense items of the following:

For the years ended

December 31, 2025 and December 31, 2024, we had other (income) and expense items of the following:

Interest income

Interest expense

Gain on settlement of notes payable

Remeasurement (gain) loss on translation of foreign subsidiary

The increase in other income in 2024 is related to Employee Retention

Credits and an insurance claim on stolen goods.

The decrease in interest expense in 2024 was due to reduction in interest rate upon loan

consolidation.

The decrease in other income

in 2025 was related to Employee Retention Credits and an insurance claim on stolen goods from 2024 that did not repeat.

The increase in

interest expense in 2025 was primarily due to an advance taken, shares issued related to the modification of notes payable and the amortization

of original debt discount on the May 2025 loan.

The gain on settlement of notes payable relates to discounts negotiated on loan payoffs

Income tax expense

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For the year ended December 31, 2024 we incurred income tax expense of $102,085.

The decrease in 2024 relates to estimated future taxes.

Net Income (Loss)

For the year ended December 31,

2024, our net income was $2,124,976.

2025, our net loss was $12,341,208.

For the year ended December 31, 2024 our net income was $2,124,976.

This decrease was due to

lower revenue due to undertaking a rebranding and packaging upgrade for FOCUSfactor that resulted in customers selling through their existing

inventory before bringing in the new packaging.

lower revenue, higher expenses, the write off of other receivables and the write off of the loan receivable.

Liquidity and Capital Resources

As of December 31, 2024, we

had $687,920 cash on hand and restricted cash of $100,000 which is held for credit card collateral.

As of December 31, 2025,

we had $2,622,313 cash and cash equivalents and restricted cash of $100,000 which is held for credit card collateral.

In connection with preparing

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The Company considered the

December 31, 2024, the Company had an accumulated deficit of $44,099,813.

December 31, 2024, the Company had a working capital deficit of $1,124,601.

December 31, 2024, the Company had a decrease in net revenue of $7,943,390.

December 31, 2024, the Company had a decrease in net income of $4,213,774.

December 31, 2024, the Company used $4,803,390 in operating activities.

Ordinarily, conditions or events that raise substantial

doubt about an entity’s ability to continue as a going concern relate to the entity’s ability to meet its obligations as they

The Company evaluated

its ability to meet its obligations as they become due within one year from the date that the consolidated financial statements are issued

At December 31, 2025, the Company had an accumulated deficit of $56,441,021.

At December 31, 2025, the Company had a decrease in revenue of

At December 31, 2025, the Company had a decrease in net income of $14,466,184.

During the year ended December 31, 2025, the Company used $2,585,022 in operating activities.

Ordinarily, conditions or

events that raise substantial doubt about an entity’s ability to continue as a going concern relate to the entity’s ability

to meet its obligations as they become due.

The Company evaluated its

ability to meet its obligations as they become due within one year from the date that the consolidated financial statements are issued

by considering the following:

2024, the Company repaid $8.5 million of loans from related party and others and received $4.9 million through loans from related party

2024, the Company had net income of $2,124,976.

● During 2024, the Company raised additional capital of $8.4 million through its Initial Public Offering (IPO).

Company has the option of selling any of its brands to raise additional capital.

Company has restructured its debt agreements in 2024 which extends the terms into 2026.

Company is currently in negotiations with lenders to refinance its existing debt.

Management concluded

that the above factors alleviate doubts about the Company’s ability to generate enough cash from operations and other

available sources to satisfy its obligations for the next twelve months from the issuance date.

The Company will take the

following actions if it starts to trend unfavorably to its internal profitability and cash flow projections, in order to mitigate conditions

or events that would raise substantial doubt about its ability to continue as a going concern:

Raise additional capital through line of credit and/or loans financing for future mergers and acquisition.

Implement restructuring and cost reductions.

Raise additional capital through an additional capital raise.

At December 31, 2025, the Company had a working capital surplus of $1,778,308.

During 2025, the Company raised additional capital of $3.7 million through sale of its common stock.

The Company has restructured its debt agreements in 2025 which extends the terms into 2029.

The Company entered into a second amendment with its current lender during 2026 which adjusts various covenants and payment terms.

The Company has laid off 13 employees in order to right size its overhead expenses.

● The Company has established an at-the-market (“ATM”)

equity offering program pursuant to which we may issue and sell shares of our common stock from time to time, subject to market conditions

and other factors.

Management concluded that the above factors alleviate

doubts about the Company’s ability to generate enough cash from operations and other available sources to satisfy its obligations

for the next twelve months from the issuance date.

Short- and Long-Term Borrowings

On June 26, 2015, we,

through our wholly owned subsidiary, Neuragen Corp.

(“Neuragen”), issued a 0% promissory note in a principal amount of $950,000

in connection with an Asset Purchase Agreement.

The note required that $250,000 be paid on or before June 30, 2016, and $700,000

to be paid in quarterly installments (beginning with the quarter ending September 30, 2015) equal to the greater of $12,500 or 5%

net sales, and 2% of U.S.

net sales of Neuragen for 60 months thereafter.

The payment of such amounts was secured

by a security interest in certain assets, undertakings and property (“Collateral”) pursuant to the Security Agreement, which

will be released upon receipt of total payments of $1.2 million.

During March 2024, this Security Agreement was consolidated

with the other outstanding loans to Knight Therapeutics (Barbados) Inc.

On August 9, 2017, we

entered into a Second Amendment to Loan Agreement (“Second Amendment”) with Knight, pursuant to which Knight agreed to loan

us an additional $10 million, and an ongoing credit facility of up to $20 million, and which amount was borrowed at closing

(the “Financing”) for working capital purposes.

At closing, we paid Knight an origination fee of $200,000 and a work fee

of $100,000 and also paid $100,000 of Knight’s expenses associated with the Loan.

On May 30, 2025, we entered

into a Third Amendment Agreement (the “Third Amendment”) to the Amended and Restated Loan Agreement (the “Loan Agreement”)

with Knight, pursuant to which Knight agreed to loan us an additional $2.5 million (the “Additional Loan”).

That same day

(the “Closing”), we paid Knight a work fee of $36,000, and $25,000 for Knight’s legal costs and expenses incurred in

connection with the Third Amendment.

The Third Amendment amends the original loan agreement that we entered into with Knight in January 2015

and subsequently amended (as amended, the “Original Loan Agreement”).

The Additional Loan matured on May 8, 2021 (the

“TA Maturity Date”) and bore interest at 12.5% per annum compounding quarterly.

On the TA Maturity Date, we were obligated

to pay Knight a success fee (the “Success Fee”) of $83,250.

The Success Fee was payable in cash or stock as set forth in the

Loan Agreement.

The Third Amendment includes customary representations, warranties, and affirmative and restrictive covenants, including

covenants to attain and maintain certain financial metrics, including an undertaking to maintain at all times a cash balance of $600,000

and EBITDA of $3,000,000 for the twelve months ended June 30, 2020 and $4,000,000 for the twelve-month period ending on the

last day of each fiscal quarter thereafter.

Terms of the $10,000,000 August 9,

2017 loan (“Third Tranche”) were modified in the Third Amendment.

The Third Tranche bore interest from May 8, 2020 at

a rate equal to 12.5% per annum compounded quarterly.

We were obligated to pay a success fee in the amount of $1,000,000 with respect

to the Third Tranche, which was fully earned on May 8, 2020 and payable no later than August 31, 2022.

The Third Tranche success

fee bore interest at 12.5% per annum compounding quarterly.

The loan was extended to a maturity date of December 31, 2021.

these amendments were considered not substantive changes, we accounted for the modifications as modification of debt.

On July 7, 2022, we

entered into a Fourth Amendment Agreement (the “Fourth Amendment”) to the Loan Agreement with Knight, pursuant to which

Knight agreed to loan us an additional $2.0 million (the “Second Additional Loan”).

The Fourth Amendment amended

the Original Loan Agreement.

The Second Additional Loan matured on the earlier of October 31, 2022 and the date that is

ninety days after the date, if any, on which Knight delivers a Second Additional Loan Repayment Notice to us.

We were obligated

to pay Knight a success fee of $40,000 and an amendment fee of $30,000 which was fully earned and payable as of the Fourth Amendment

The loan bore interest at the greater of 14% or the prime rate plus 8% per annum, compounded quarterly.

This $2.0 million

Second Additional Loan (only) had a personal guarantee by Jack Ross, our chief executive officer and chairman of the board.

On September 30, 2023,

we entered into a Fifth Amendment Agreement (the “Fifth Amendment”) to the Loan Agreement with Knight, pursuant to which Knight

agreed to extend the maturity date of the Loan to March 31, 2024.

The loan bore interest at 15.5% per annum compounding quarterly.

We were obligated to pay Knight a closing fee of $1,000,000 and $150,000 as reimbursement for Knight’s legal fees incurred in connection

with the Fifth Amendment.

These have been accrued for during the year ended December 31, 2022 since this was earned upon renegotiation

of the loan during 2022.

We have also paid Knight an extension fee of $136,000 per month from October 2023 through February 2024.

The Fifth Amendment amended

our financial covenants to be as follows:

We will maintain a minimum EBITDA of $1,000,000 for the three (3) month period ending on

the last day of each Fiscal Quarter starting June 30, 2023.

We shall at all times maintain FOCUSfactor net sales on a trailing

twelve-month basis of at least $30,000,000.

On October 1, 2023 (effective

date), we entered into a second amendment to the Distribution Agreement with Knight with an initial term ending on February 25, 2026

and an automatic renewal of one year for a payment of $450,000 by us within 180 days from the effective date.

We have recorded this

payable in terms of a Note Payable to Knight Therapeutics in relation to a license fee of an intangible asset.

The balance outstanding

at December 31, 2023 was $450,000.

During March 2024, the

Company entered into an Amended Agreement with Knight Therapeutics for its existing secured debt, which we finalized in June 2024.

consolidated loan will bear minimum interest rate at 12% per annum compounded quarterly and will be paid on the last day of each

The principal repayment will begin in the first quarter of 2025 with $1,000,000 due quarterly until March 31, 2026 when the

loan becomes due in full.

As part of this agreement the outstanding royalties of $536,730 were converted to long term debt.

On June 6, 2024, we entered

into a Sixth Amendment Agreement (the “Sixth Amendment”) to the Loan Agreement with Knight.

This amendment amends certain

sections and inserts or restates certain definitions.

In addition, we are obligated to pay Knight principal of $1,000,000 at the end of

the fiscal quarters ending March 31, 2025, June 30, 2025, September 30, 2025, and December 31, 2025, with the outstanding

balance of the loan due on the maturity date.

Additionally, we are obligated to pay Knight all accrued and unpaid interest on the principal

amount monthly, on the last day of each month.

The final payment will be on the maturity date.

One of the covenants was updated so

that we must maintain a minimum EBITDA of $1,250,000 for the three-month period ending on the last day of each fiscal quarter, starting

March 31, 2024.

In addition, we must provide Knight our quarterly and annual operating budget for approval prior to implementation.

into a term credit loan agreement of $17,500,000 with ACP Agency, LLC.

We received $15,000,000 in May 2025 on the initial draw and $2,500,000

in June 2025 on a delayed draw.

The proceeds of the loan were used to repay existing debt, including the payoff of the Company’s

indebtedness to Knight Therapeutics.

We recorded $2,385,954 as original debt discount and is being amortized to interest expense over

the term of the loan.

We recognized $360,511 as amortization during the year ended December 31, 2025.

The unamortized balance amounts

to $2,025,443 at December 31, 2025.

The note bears interest at Term SOFR rate, plus 8.5%, currently 12.5% and matures on May 31, 2029.

We recognized total interest expense of $1,326,732 as of December 31, 2025.

The outstanding loan balance at December 31, 2025 was $17,500,000

(See Note 11).

We previously had secured

indebtedness with Knight Therapeutics (Barbados) Inc.

and related arrangements.

During 2025, this indebtedness was repaid in full in connection

with the Company’s refinancing transactions, including the ACP term loan described above.

For additional information regarding our

prior Knight indebtedness and the related repayment, see the notes to our consolidated financial statements.

On February 10, 2022,

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principal and unpaid interest is fully due on March 31, 2026.

In addition, a loan renegotiation fee of $500,000 shall be earned

and payable on March 31, 2026 or at such time the loan is paid in full.

In addition, a loan renegotiation fee of $500,000 shall be earned and

payable on March 31, 2026 or at such time the loan is paid in full.

Upon closing of a sale transaction, as defined in the agreement,

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An incentive fee of a maximum of $563,092 will be paid, prorated if the loan is paid off early.

If the loan is not repaid by March 31, 2026, Jack Ross, majority shareholder, shall grant warrants covering 10% of his stock struck

at $0.12 per share.

There is a cross-default clause in the agreement which states that if Knight triggers an event of default on its

own loan facility, this loan will also be under default.

This Agreement consolidates this $2,000,000 loan and the $6,000,000 March 8,

2022 loan as detailed below.

is a cross-default clause in the agreement which states that if Knight triggers an event of default on its own loan facility, this loan

will also be under default.

This Agreement consolidates this $2,000,000 loan and the $6,000,000 March 8, 2022 loan as detailed below.

On March 8, 2022, we

entered into Securities Purchase Agreements with debenture holders for the Senior Subordinated Debentures in the amount of $6,000,000

$6,000,000 with an original maturity date of September 8, 2022 and warrants with a term of 3 years.

Subordinated Debentures were modified on June 14, 2023 in conjunction with the promissory note.

The modification included the

exercise of $1.5 million on cash payment in lieu of the exercise of warrants.

Pursuant to ASC 480 warrants were

liability classified and we accrued the warrant liability of $1.5 million on March 8, 2022, the date of issuance.

September 8, 2022, the date of exercise of the warrants, we offset this warrant liability and added the $1.5 million

balance to the Senior Subordinated Debentures, for a combined outstanding balance of $7.5 million.

The terms of the warrants

were, at the sole option of the holder, to convert the warrant at a 25% discount in the event we consummated an IPO, a cash option

whereby the holder could convert the warrants at a cash value of $1.5 million or convert the warrants into the private entity

valued by an independent third-party appraiser.

On March 31, 2024, we entered into a Modification Agreement in relation to this

loan, which consolidates it with the $2,000,000 February 10, 2022 loan above.

On May 10, 2022, we entered

into a loan agreement of $355,950 with Shopify Capital Inc.

for an advancement of working capital from our online processing account.

We received $315,000 from Shopify Capital Inc.

and $40,950 was an original issue discount.

The loan bears a repayment rate of 17% of daily

The payment of such amounts is secured by a security interest in certain assets, undertakings and property pursuant to the Security

Agreement, which will be released upon receipt of total payments of $355,950.

We recognized amortization original issue discount of $13,746,

which is included in interest expense in the statement of income during the year ended December 31, 2023.

The outstanding loan

balance at December 31, 2023 was $0.

On April 13, 2023, we

entered into a loan agreement of $226,000 with Shopify Capital Inc.

for an advancement of working capital from our online processing account.

We received $200,000 from Shopify Capital Inc.

and $26,000 was an original issue discount.

The loan bears a repayment rate of 17% of daily

The payment of such amounts is secured by a security interest in certain assets, undertakings and property pursuant to the Security

Agreement, which will be released upon receipt of total payments of $226,000.

We recognized amortization original issue discount of $26,000,

which is included in interest expense in the statement of income during the year ended December 31, 2023.

The outstanding loan balance

at December 31, 2023 was $0.

On July 12, 2023, we entered

into a loan agreement of $180,800 with Shopify Capital Inc.

for an advancement of working capital from our online processing account.

We received $160,000 from Shopify Capital Inc.

and $20,800 was an original issue discount.

The loan bears a repayment rate of 17% of daily

The payment of such amounts is secured by a security interest in certain assets, undertakings and property pursuant to the Security

Agreement, which will be released upon receipt of total payments of $180,800.

We recognized amortization original issue discount of $12,288

and $8,512, respectively, which are included in interest expense in the statement of income during the years ended December 31, 2024

The outstanding loan balance at December 31, 2024 and 2023 was $0 and $94,525, respectively.

On December 28, 2023,

we entered into a confidential settlement agreement and mutual general release with a former supplier.

The loan bears interest at 5% per

annum and is payable in full with the last payment.

This settlement resulted in a gain to us of $2,235,986 and is reflected as a reduction

of cost of sales (See Note 13).

During 2024 and 2023, we made payments of $2,000,000 and $1,000,000, respectively, toward this loan.

The outstanding loan balance at December 31, 2024 and 2023 was $2,802,445 and $4,802,445, respectively, including interest of $352,445.

On January 21, 2024, we

entered into a loan agreement of $141,250 with Shopify Capital Inc.

for an advancement of working capital from our online processing account.

We received $125,000 from Shopify Capital Inc.

and $16,250 was an original issue discount.

The loan bears a repayment rate of 17% of daily

The payment of such amounts is secured by a security interest in certain assets, undertakings and property pursuant to the Security

Agreement, which will be released upon receipt of total payments of $141,250.

We recognized amortization original issue discount of $16,250,

which is included in interest expense in the statement of income during the year ended December 31, 2024.

with an original maturity date of September 8, 2022 and warrants equal to the principal amount with a term of 3 years.

Subordinated Debentures were modified on June 14, 2023 and consolidated with the promissory note dated February 10, 2022.

The modification

included the exercise of a $1,500,000 cash payment in lieu of the exercise of warrants.

Pursuant to ASC 480 warrants were liability

classified and we accrued the warrant liability of $1,500,000 on March 8, 2022, the date of issuance.

On September 8, 2022,

the date of exercise of the warrants, we offset this warrant liability and added the $1,500,000 balance to the Senior Subordinated Debentures,

for a combined outstanding balance of $7,500,000.

The terms of the warrants were, at the sole option of the holder, to convert the warrant

at a 25% discount in the event we consummated an IPO, a cash option whereby the holder could convert the warrants at a cash value of $1,500,000

or convert the warrants into the private entity valued by an independent third-party appraiser.

On March 31, 2024, we entered into

a Modification Agreement in relation to this loan, which consolidates it with the $2,000,000 February 10, 2022 loan above.

We have utilized various

short-term working capital arrangements from time to time (including merchant financing and settlement-related payment arrangements) to

support liquidity and working capital needs.

Substantially all of these arrangements were repaid prior to December 31, 2025.

As of December

31, 2025, the primary short-term amount outstanding relates to the Cedar Advance LLC receivables purchase arrangement described below.

For additional information, see the notes to our consolidated financial statements.

On November 12, 2025, we

entered into a cash advance agreement of $3,024,000 with Cedar Advance LLC for an advancement of working capital via the sale of receivables.

We received $2,000,000 and recorded $1,024,000 as original issue discount.

The loan bears a repayment rate of $84,000 per week.

In conjunction

with the advance, we issued 52,000 shares of common stock to the consultant who facilitated the facility and thus recognized

$103,220 as financing cost.

We recognized total interest expense of $349,435 as of December 31, 2025.

The outstanding loan balance

at December 31, 2025 was $1,658,215.

During 2024, we received $3,175,000 USD and $514,500 CAD in exchange

for a short term note payable issued to an entity owned and controlled by our Chief Executive Officer.

This was repaid during 2024 along

with interest of $525,000 USD.

On March 27, 2024 we entered

into a confidential settlement agreement and mutual general release with a supplier.

During 2024, we made payments of $700,000 toward

The outstanding loan balance at December 31, 2024 was $2,320,824.

On May 1, 2024, we entered into a loan agreement with Shopify Capital

for an advancement of working capital from our online processing account.

We received $370,000 from Shopify Capital Inc.

was an original issue discount.

The loan bears a repayment rate of 25% of daily sales.

The payment of such amounts is secured by a security

interest in certain assets, undertakings and property pursuant to the Security Agreement, which will be released upon receipt of total

payments of $418,100.

The Company recognized amortization original issue discount of $13,067 which is included in interest expense in

the statement of income during the year ended December 31, 2024.

The outstanding loan balance at December 31, 2024 was $269,488 net of

unamortized original issue discount of $35,033.

On May 22, 2024, we

entered into a loan agreement with Shopify Capital Inc.

for an advancement of working capital from our online processing account.

received $105,000 from Shopify Capital Inc.

and $13,650 was an original issue discount.

The loan bears a repayment rate of 25% of

The payment of such amounts is secured by a security interest in certain assets, undertakings and property pursuant to

the Security Agreement, which will be released upon receipt of total payments of $118,650.

We recognized amortization original

issue discount of $11,515, which is included in interest expense in the statement of income during the year ended December 31, 2024.

The outstanding loan balance at December 31, 2024 was $16,425, net of unamortized original issue discount of $2,135.

December 5, 2024, we entered into a cash advance agreement of $800,000 with Cedar Advance LLC for an advancement of working capital.

We received $760,000 and recorded $40,000 as interest expense.

The loan bears a repayment rate of $41,100 per week.

We recognized total

interest expense of $136,000 as of December 31, 2024.

The outstanding loan balance at December 31, 2024 was $0.

On January 29, 2025, we entered into a cash advance agreement of $1,575,000

with Cedar Advance LLC for an advancement of working capital.

We received $1,496,250 and recorded $78,750 as interest expense.

bears a repayment rate of $81,000 per week.

The outstanding loan balance at March 28, 2025 was $1,008,000.

As of the date of this filing,

we are in compliance with all of the terms, conditions and covenants associated with the loan agreements described above.

Approximately $13.3 million of our outstanding indebtedness comes due

in the year ending December 31, 2025, and approximately $15.8 million comes due in the year ending December 31, 2026.

We believe that

while cash provided by sales of our products will be sufficient to meet these obligations as they come due, we are currently working on

refinancing our debt obligations.

As of March 25, 2025, we have approximately $0.3 million of cash.

Furthermore, although BoomBod Ltd.

is obligated to repay to us the outstanding balance of $4,375,059 by December 31, 2025, we do not expect to rely on repayment of the outstanding

balance to fund our operations or meet our near-term debt obligations.

As of the date of filing

of this Annual Report, we are in compliance with the material terms, conditions and covenants applicable to our outstanding debt arrangements.

Operating Activities

For the year ended December 31,

2024, we had net cash used in operating activities of $4,803,390 as compared to $421,729 of net cash provided by operating activities

for the year ended December 31, 2023.

The decrease was primarily due to increases in accounts receivable and prepaid expenses and

a decrease of accounts payable and accrued liabilities.

For 2024, net cash used in

operating activities of $4,803,390 consisted of our net income of $2,124,976 adjusted by:

Amortization of debt issuance cost

2025, we had net cash used in operating activities of $2,585,022 as compared to $4,803,390 of net cash used in operating activities for

the year ended December 31, 2024.

The decrease was primarily due to decreases in accounts receivable, other receivables and related

party loan receivable.

For 2025, net cash used in operating activities of $2,585,022 consisted

of our net loss of $12,341,208 adjusted by:

Amortization of debt discount and debt issuance cost

Depreciation and amortization

Stock based compensation

Stock issued for modification of notes payable

Stock issued for services

Foreign currency transaction loss

Remeasurement gain on translation of foreign subsidiary

Non cash implied interest

Bad debt, related party

Gain on settlement of debt

Write-off of inventory

Stock issued for loan financing

Income from employee retention credits

Income from insurance on stolen goods

Changes in operating assets and liabilities:

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Other receivables

Loan receivable, related party

Prepaid expenses

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Accounts payable, related party

For 2023, net cash provided

by operating activities of $421,729 consisted of our net income of $6,338,750 adjusted by:

For 2024, net cash used in

operating activities of $4,803,390 consisted of our net income of $2,124,976 adjusted by:

Amortization of debt issuance cost

Depreciation and amortization

Gain on settlement of liabilities

Foreign currency transaction gain

Foreign currency transaction loss

Remeasurement gain on translation of foreign subsidiary

Non cash implied interest

Accrual of loan success fee and warrants converted to loan

Write-off of inventory

Stock issued for loan financing

Income from employee retention credits

Income from insurance on stolen goods

Changes in operating assets and liabilities:

Accounts receivable

Other receivables

Loan receivable, related party

1 unchanged sentence

Prepaid expense, related party

Income taxes receivable

Income taxes payable

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Investing Activities

For the years ended December 31,

2024 and 2023, we used net cash of $0 in investing activities.

For the years ended

December 31, 2025 and 2024, we used net cash of $0 in investing activities.

Financing Activities

For the year ended December 31, 2024, net cash provided by financing

activities was $4,804,086, as compared to $2,090,782 used in financing activities for the year ended December 31, 2023.

was attributable to the issuance of common stock offset by repayment on notes payable.

For the year ended December 31,

2025, net cash provided by financing activities was $4,654,664, as compared to $4,804,086 provided by financing activities for the year

ended December 31, 2024.

The decrease was attributable to the issuance of common stock and proceeds from notes payable offset by

repayment on notes payable.

Financing activities during

Proceeds from issuance of common stock

Proceeds from issuing common stock

Advances from related party

Repayments of advances to related party

Repayment of notes payable, shareholder

(10,000,000 )

Proceeds from notes payable

Payment of loan financing fees

Repayment of notes payable

Repayment of notes payable, related party

Financing activities during

Proceeds from issuance of common stock

Advances from related party

Repayments of advances to related party

Repayment of notes payable, related party

Proceeds from notes payable

Repayment of notes payable

Repayment of notes payable, related party

Key Near-Term Initiatives

During 2025, we intend to organically

grow our current product lines by developing and launching new products and expanding into new markets.

Specifically, for FOCUSfactor,

we are working on increased distribution for our recently launched ready-to-drink beverage.

Lastly, we intend to grow further through

additional strategic acquisitions and we continue to evaluate opportunities and candidates that we believe fit well with our brand portfolio.

During 2026, we intend to

organically grow our current product lines by developing and launching new products and expanding into new markets.

Specifically, for

FOCUSfactor, we are working on increased distribution for our recently launched ready-to-drink beverage.

Lastly, we intend to grow further

through additional strategic acquisitions and we continue to evaluate opportunities and candidates that we believe fit well with our brand

Off-Balance Sheet Arrangements

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Critical Accounting Policies

Discussion and Analysis of Financial Condition and Results of Operations discusses our financial statements, which have been

prepared in accordance with accounting principles generally accepted in the United States.

The preparation of these

consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets,

liabilities, revenues and expenses, and the related disclosures of contingent assets and liabilities.

On an on-going basis,

management evaluates its estimates and judgments, including those related to revenue recognition and allowance for doubtful

Management bases its estimates and judgments on historical experience and on various other factors that are believed to be

reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and

liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different

assumptions and conditions.

Management’s Discussion

and Analysis of Financial Condition and Results of Operations discusses our financial statements, which have been prepared in accordance

with accounting principles generally accepted in the United States.

The preparation of these consolidated financial statements requires

management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the related

disclosures of contingent assets and liabilities.

On an on-going basis, management evaluates its estimates and judgments, including those

related to revenue recognition and allowance for doubtful accounts.

Management bases its estimates and judgments on historical experience

and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making

judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ

from these estimates under different assumptions and conditions.

Management believes the following

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Use of Estimates

In preparing the consolidated financial statements, management is required

to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities

at the date of the financial statements and the reported amounts of expenses during the reporting period.

Actual results could differ

from those estimates.

Significant estimates included are assumptions about collection of accounts receivable, current income taxes, deferred

income taxes valuation allowance, useful life of intangible assets, impairment analysis of intangible assets, estimates used in the fair

value calculation of stock based compensation, assumptions used in Black-Scholes-Merton, or BSM, valuation methods, such as expected volatility,

risk-free interest rate and expected dividend rate, accrual of sales returns, and accrual of legal expense.

The results of any changes

in accounting estimates are reflected in the financial statements in the period in which the changes become evident.

Estimates and assumptions

are reviewed periodically, and the effects of revisions are reflected in the period that they are determined to be necessary.

In preparing the consolidated

financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities,

and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting

Actual results could differ from those estimates.

Significant estimates included are assumptions about collection of accounts

receivable, current income taxes, deferred income taxes valuation allowance, useful life of intangible assets, impairment analysis of

intangible assets, estimates used in the fair value calculation of stock based compensation, assumptions used in Black-Scholes-Merton,

or BSM, valuation methods, such as expected volatility, risk-free interest rate and expected dividend rate, accrual of sales returns,

and accrual of legal expense.

The results of any changes in accounting estimates are reflected in the financial statements in the period

in which the changes become evident.

Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in

the period that they are determined to be necessary.

Revenue recognition

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of revenue when or as a performance obligation is satisfied.

We recognize revenue upon shipment

from our fulfillment centers.

We recognize revenue upon

shipment from our fulfillment centers.

Certain of our distributors may also perform a separate function as a co-packer on our behalf.

In such cases,

ownership of and title to our products that are co-packed on our behalf by those co-packers who are also distributors, passes to such

distributors when we are notified by them that they have taken transfer or possession of the relevant portion of our finished goods.

billed to customers is presented as revenues, and the related freight costs are presented as cost of goods sold.

Cancelled orders are

refunded if not already dispatched, refunds are only paid if stock is damaged in transit, discounts are only offered with specific promotions

and orders will be refilled if lost in transit.

We recognize revenue for our digital products in the month the download by the customer

In such cases, ownership of and title to our products that are co-packed on our behalf by those co-packers who are also distributors,

passes to such distributors when we are notified by them that they have taken transfer or possession of the relevant portion of our finished

Freight billed to customers is presented as revenues, and the related freight costs are presented in selling and marketing expense.

Cancelled orders are refunded if not already dispatched, refunds are only paid if stock is damaged in transit, discounts are only offered

with specific promotions and orders will be refilled if lost in transit.

We recognize revenue for our digital products in the month the

download by the customer occurs.

We account for our IP license

revenue, which provides our customers with rights to use our IP, in accordance with ASC 606.

A license may be perpetual or time limited

in its application.

In accordance with ASC 606, we continue to recognize revenue from IP license at the time of delivery when the customer

accepts control of the IP, as the IP is functional without professional services, updates and technical support.

We have concluded that

its IP license is distinct as the customer can benefit from the functional IP on its own.

Therefore, we have determined the right to use

its IP was satisfied at a point in time (on the date the rights to the IP were granted).

All product sales were initiated

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Contract Liabilities

Our contract liabilities consist

of advance customer payments.

Contract liability results from transactions in which we have been paid for products by customers, but for

which all revenue recognition criteria have not yet been met.

Once all revenue recognition criteria have been met, the contract liabilities

are recognized.

Our contract liabilities

consist of advance customer payments.

Contract liability results from transactions in which we have been paid for products by customers,

but for which all revenue recognition criteria have not yet been met.

Once all revenue recognition criteria have been met, the contract

liabilities are recognized.

We utilize FASB ASC 740,

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our realization of the net operating loss carry forward prior to its expiration.

NomadChoice Pty Ltd, our wholly-owned

Australian subsidiary, is subject to income taxes in the jurisdictions in which it operates.

NomadChoice Pty Ltd, our

wholly-owned Australian subsidiary, is subject to income taxes in the jurisdictions in which it operates.

Significant judgment is required

in determining the provision for income tax.

There are many transactions and calculations undertaken during the ordinary course of business

for which the ultimate tax determination is uncertain.

We recognize liabilities for anticipated tax audit issues based on our current

understanding of the tax law.

Where the final tax outcome of these matters is different from the carrying amounts, such differences will

impact the current and deferred tax provisions in the period in which such determination is made.

Synergy CHC Inc., our wholly-owned

Canadian subsidiary, is subject to income taxes in the jurisdictions in which it operates.

Significant judgment is required in determining

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current and deferred tax provisions in the period in which such determination is made.

Synergy CHC Inc., our wholly-owned

Canadian subsidiary, is subject to income taxes in the jurisdictions in which it operates.

Synergy CHC Mexico, our wholly-owned

Mexican subsidiary, is subject to income taxes in the jurisdictions in which it operates.

Significant judgment is required in determining

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The functional currency of

our other foreign subsidiary (Synergy CHC Inc.) is the Canadian Dollar (CAD).

one of our foreign subsidiaries (Synergy CHC Inc.) is the Canadian Dollar (CAD).

This foreign subsidiary maintains its records using local

7 unchanged sentences

other comprehensive income in the stockholder’s equity in accordance with ASC 220 — Comprehensive Income.

The functional currency of

our other foreign subsidiary (Synergy CHC Mexico) is the Mexican Peso (MXN).

This foreign subsidiary maintains its records using local

currency (MXN).

All assets and liabilities of the foreign subsidiary were translated into U.S.

Dollars at period end exchange rates

and stockholders’ equity is translated at the historical rates.

Income and expense items were translated using average exchange

rate for the period.

The resulting translation adjustments, net of income taxes, are reported as other comprehensive income and accumulated

other comprehensive income in the stockholder’s equity in accordance with ASC 220 — Comprehensive Income.

The exchange rates used to

translate amounts in AUD and CAD into USD for the purposes of preparing the consolidated financial statements were as follows:

translate amounts in AUD, CAD and MXN into USD for the purposes of preparing the consolidated financial statements were as follows:

Balance sheet:

3 unchanged sentences

USD exchange rate

Period-end MXN:

USD exchange rate

Income statement:

3 unchanged sentences

USD exchange rate

Average Period MXN:

USD exchange rate

Translation gains and losses

that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated

into either Australian Dollars or Canadian Dollars, as the case may be, at the rate on the date of the transaction and included in the

results of operations as incurred.

into either Australian Dollars, Canadian Dollars or Mexican Pesos, as the case may be, at the rate on the date of the transaction and

included in the results of operations as incurred.

Quantitative and Qualitative Disclosure

2 unchanged sentences

Financial Statements and Supplementary Data

Reference is made to

pages F-1 through F-32 comprising a portion of this Annual Report on Form 10-K, which are incorporated by reference under this

Reference is made to pages

F-1 through F-27 comprising a portion of this Annual Report on Form 10-K, which are incorporated by reference under this Item.

Changes in and Disagreements with Accountants

1 unchanged sentence

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-K

Item 7. Management’s Discussion and Analysis