What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-14 compared with 2025-11-13 · 122 added, 163 removed, 120 unchanged (70% of the section changed)

13 unchanged sentences

This Quarterly Report includes

“forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange

Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those

expected and projected.

All statements, other than statements of historical fact included in this Quarterly Report including, without

limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations”

regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking

Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,”

“expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,”

“predict,” “project,” “should,” “would” and variations thereof and similar words and expressions

are intended to identify such forward-looking statements.

Such forward-looking statements relate to future events or future performance,

but reflect management’s current beliefs, based on information currently available.

A number of factors could cause actual events,

performance or results to differ materially from the events, performance and results discussed in the forward-looking statements.

information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking

statements, please refer to the Risk Factors section of our final prospectus for our initial public offering filed with the SEC on October

23, 2024 (the “Prospectus”) and the “Risk Factors” section of this report.

Our securities filings can be accessed

on the EDGAR section of the SEC’s website at www.sec.gov.

Except as expressly required by applicable securities law, we disclaim

any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or

“forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that

are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected

and projected.

All statements, other than statements of historical fact included in this Quarterly Report including, without limitation,

statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding

our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements.

Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”

“intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,”

“project,” “should,” “would” and variations thereof and similar words and expressions are intended

to identify such forward-looking statements.

Such forward-looking statements relate to future events or future performance, but reflect

management’s current beliefs, based on information currently available.

A number of factors could cause actual events, performance

or results to differ materially from the events, performance and results discussed in the forward-looking statements.

For information

identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements,

please refer to the Risk Factors section of our Annual Report on Form 10-K filed with the U.S.

Securities and Exchange Commission (the

“SEC”) on April 1, 2026 (the “Annual Report”) and the “Risk Factors” section of this Quarterly Report.

Our securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov.

Except as expressly required by

applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result

of new information, future events or otherwise.

The following discussion and

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GAAP”), provides useful information to investors.

September 30,

Net (loss) income

$ (2,568,899 )

Interest income

2 unchanged sentences

Depreciation and amortization

September 30,

Interest income

Interest expense

Income tax expense

Depreciation and amortization

EBITDA is considered non-GAAP

financial measures.

EBITDA is considered a non-GAAP

financial measure.

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

2 unchanged sentences

Results of Operations for the Three Months

Ended September 30, 2025 and September 30, 2024

Ended March 31, 2026 and March 31, 2025

During both the three months

ended September 30, 2025 and 2024, we focused on developing our currently owned brands into new markets and by product extensions.

objective is to grow our two targeted verticals (Nutraceuticals and Ready To Drinks (RTDs)) to provide a balanced and synergistic portfolio

that drives consumer demand via multiple channels.

Our Nutraceuticals vertical consists of FOCUSfactor, including RTDs, and Flat Tummy

ended March 31, 2026 and 2025, we focused on developing our currently owned brands into new markets and by product extensions.

Our objective

is to grow our two targeted verticals (Nutraceuticals and Ready To Drinks (RTDs)) to provide a balanced and synergistic portfolio that

drives consumer demand via multiple channels.

Our Nutraceuticals vertical consists of FOCUSfactor, including RTDs, and Flat Tummy consumables.

For the three months ended

September 30, 2025, we had revenue of $8,010,112 from sales of our products as compared to revenue of $7,126,333 for the three months

ended September 30, 2024.

March 31, 2026, we had revenue of $5,492,705 from sales of our products, as compared to revenue of $8,170,534 for the three months

ended March 31, 2025.

The revenue is comprised of the following categories:

September 30,

Nutraceuticals

License Revenue

We had an increase in Nutraceuticals

revenue in the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 due to a packaging

upgrade that occurred in 2024 which delayed shipments that did not repeat in 2025.

We had a decrease in Nutraceuticals

revenue in the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 due to a decrease in online

We had an increase in Beverages revenue in the three months ended March 31, 2026 as compared to the three months ended March 31,

2025 due to new retail distribution.

We had a decrease in License Revenue in the three months ended March 31, 2026 as compared to the

three months ended March 31, 2025 as that was a one-time item that did not repeat.

Cost of Revenue

For the three months ended

September 30, 2025, our cost of revenue was $2,329,296.

Our cost of revenue for the three months ended September 30, 2024, was $2,335,901.

The decrease in cost of sales was primarily due to product mix sold.

March 31, 2026, our cost of revenue was $1,521,910.

Our cost of revenue for the three months ended March 31, 2025, was $2,006,513.

The decrease in cost of sales was primarily due to the decrease in revenue.

Gross profit was $3,970,795,

or 71% of revenue, for the three months ended September 30, 2025, as compared to gross profit of $4,790,432, or 67% of revenue, for

the same period in 2024, an increase of $890,384, or 19%.

The increase in gross profit is directly related to the product mix sold.

or 72% of revenue, for the three months ended March 31, 2026, as compared to gross profit of $6,164,021, or 75% of revenue, for the

same period in 2025, a decrease of $2,193,226, or 36%.

The decrease in gross profit is directly related to the license revenue in 2025.

Operating Expenses

1 unchanged sentence

For the three months ended

September 30, 2025, our selling and marketing expenses were $2,729,767 as compared to $2,509,440 for the three months ended September

30, 2024, which is an immaterial increase.

March 31, 2026, our selling and marketing expenses were $2,455,732 as compared to $2,876,271 for the three months ended March 31,

2025, which is primarily due to lower revenue.

General and Administrative Expenses

For the three months ended

September 30, 2025, our general and administrative expenses were $1,637,706.

For the three months ended September 30, 2024, our general

For the three months

ended March 31, 2026, our general and administrative expenses were $2,048,850.

For the three months ended March 31, 2025, our general

and administrative expenses were $1,306,714.

The increase is primarily due to public market expenses.

The increase is largely due to increased salaries and benefits, stock-based compensation,

board compensation and professional fees.

Depreciation and Amortization Expenses

For the three months ended

September 30, 2025, our depreciation and amortization expenses were $33,333 as compared to $33,333 for the three months ended September

For both the three months

ended March 31, 2026 and 2025, our depreciation and amortization expenses were $33,333.

Other Income and Expenses

For the three months ended

September 30, 2025 and 2024 we had other income and expense items as follows:

September 30,

March 31, 2026 and 2025 we had other income and expense items as follows:

Interest expense

1 unchanged sentence

Remeasurement loss on translation of foreign subsidiary

Total other (income) expense

Total other expense

For the three months ended

September 30, 2025, we had interest expense of $1,164,402 as compared to $705,088 for the three months ended September 30, 2024.

The increase is primarily due to the advance and the amortization of original debt discount on the new loan.

March 31, 2026, we had net interest expense of $2,012,121 as compared to $1,095,369 for the three months ended March 31, 2025.

increase is primarily due to an advance taken and the amortization of original debt discount on the May 2025 loan.

For the three months ended

September 30, 2025, our net income was $125,327 as compared to a net income of $783,593 for the three months ended September 30,

2024 due to other income in 2024 and higher expenses in 2025.

Results of Operations for the Nine Months Ended

September 30, 2025 and September 30, 2024

During both the nine months

ended September 30, 2025 and 2024, we focused on developing our currently owned brands into new markets and by product extensions.

objective is to grow our two targeted verticals (Nutraceuticals and RTDs) to provide a balanced and synergistic portfolio that drives

consumer demand via multiple channels.

Our Nutraceuticals vertical consists of FOCUSfactor, including RTDs, and Flat Tummy consumables.

For the nine months ended

September 30, 2025, we had revenue of $21,415,642 from sales of our products and $2,900,000 from a license agreement, as compared to revenue

of $24,563,039 for the nine months ended September 30, 2024.

The revenue is comprised of the following categories:

September 30,

Nutraceuticals

License Revenue

We had a decrease in Nutraceuticals

revenue in the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 due to a new product

sell-in to one customer in 2024 that did not repeat in 2025.

We also had revenue from a license agreement to expand into selected foreign

Cost of Revenue

For the nine months ended

September 30, 2025, our cost of revenue was $6,232,201.

Our cost of revenue for the nine months ended September 30, 2024, was $7,421,930.

The decrease in cost of sales was primarily due to the decrease in product revenue.

Gross profit was $18,083,441,

or 74% of revenue, for the nine months ended September 30, 2025, as compared to gross profit of $17,141,106, or 70% of revenue, for

the same period in 2024, an increase of $942,335, or 5%.

The increase in gross profit is related to the license revenue.

Operating Expenses

Selling and Marketing Expenses

For the nine months ended

September 30, 2025, our selling and marketing expenses were $8,668,249 as compared to $9,149,303 for the nine months ended September

30, 2024, which is primarily due to lower revenue and an improved management of promotions in 2025.

General and Administrative Expenses

For the nine months ended

September 30, 2025, our general and administrative expenses were $4,463,745.

For the nine months ended September 30, 2024, our general

and administrative expenses were $3,449,007.

The increase is primarily public market expenses.

Depreciation and Amortization Expenses

For the nine months ended

September 30, 2025, our depreciation and amortization expenses were $100,000 as compared to $100,000 for the nine months ended September

Other Income and Expenses

For the nine months ended

September 30, 2025 and 2024 we had other income and expense items as follows:

September 30,

Interest expense

Interest income

Gain on settlement of loans

Remeasurement loss on translation of foreign subsidiary

Total other expense

For the nine months ended September

30, 2025, we had interest expense of $4,367,487 as compared to $2,560,596 for the nine months ended September 30, 2024.

is primarily due to an advance taken in 2025, shares issued related to the modification of notes payable and new May 2025 loan.

For the nine months ended

September 30, 2025, our net income was $2,474,827 as compared to a net income of $2,019,309 for the nine months ended September 30,

2024 due to a gain on loan settlements.

March 31, 2026, our net loss was $2,568,899 as compared to a net income of $876,264 for the three months ended March 31, 2025 due

to lower revenue.

Liquidity and Capital Resources

As of September 30, 2025, we

had $1,006,489 cash on hand and restricted cash of $100,000 which is held for credit card collateral.

As of March 31, 2026, we had

$292,115 cash on hand and restricted cash of $100,000 which is held for credit card collateral.

In connection with preparing

unaudited condensed consolidated financial statements for the three months ended March 31, 2026, management evaluated whether there were

conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s ability to continue as a going

concern within one year from the date that the unaudited condensed consolidated financial statements are issued.

The Company considered the

● At March 31, 2026, we

had an accumulated deficit of $59,009,920.

● At March 31, 2026, we

had a decrease in net revenue of $2,677,829.

● At March 31, 2026, we

had a decrease in net income of $3,445,163.

● At March 31, 2026, we

had a working capital deficit of $503,862

● During the three months ended March 31, 2026, we used $2,044,678 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.

We evaluated our ability

to meet our obligations as they become due within one year from the date that the unaudited condensed consolidated financial statements

are issued by considering the following:

We entered into a second amendment with our current lender which adjusts

various covenants and payment terms.

We laid off 13 employees in order to right size our overhead expenses.

We 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.

Subsequent to March 31, 2026, we have drawn down $2,673,201 in gross proceeds.

We have entered into an equity purchase agreement (“ELOC”),

pursuant to which we may issue and sell shares of our common stock from time to time, subject to market conditions and other factors (see

Cash Flows from Operating Activities

For the nine months ended

September 30, 2025, net cash used in operating activities was $3,209,149 compared to net cash used in operating activities of $1,377,479

for the nine months ended September 30, 2024.

This increase in net cash used by operating activities for the nine months ended

September 30, 2025 is detailed in the table below.

For the nine months ended

September 30, 2025, net cash used in operating activities of $3,209,149 consisted of our net income of $2,474,827 adjusted by:

Amortization of debt discount and debt issuance cost

For the three months

ended March 31, 2026, net cash used in operating activities was $2,044,678 compared to net cash used in operating activities of $822,781

for the three months ended March 31, 2025.

This increase in net cash used by operating activities for the three months ended

March 31, 2026 was primarily attributable to a decrease in net income.

For the three months ended

March 31, 2026, net cash used in operating activities of $2,044,678 consisted of our net loss of $2,568,899 adjusted by:

Amortization of debt issuance cost

Depreciation and amortization

Stock based compensation

Stock issued for modification of notes payable

Stock issued for services

Foreign currency transaction gain

Remeasurement loss on translation of foreign subsidiary

Gain on settlement of debt

Changes in operating assets and liabilities:

Accounts receivable

Other receivables

Loan receivable, related party

Prepaid expenses

Prepaid expense

Prepaid expense, related party

2 unchanged sentences

Accounts payable and accrued liabilities

Accounts payable, shareholder

For the nine months ended

September 30, 2024, net cash used in operating activities of $1,377,479 consisted of our net income of $2,019,309 adjusted by:

Amortization of debt discount and debt issuance cost

Accounts payable, related party

For the three months ended

March 31, 2025, net cash used in operating activities of $822,781 consisted of our net income of $876,264 adjusted by:

Amortization of debt issuance cost

Depreciation and amortization

Stock based compensation expense

Foreign currency transaction loss

Foreign currency transaction gain

Remeasurement gain on translation of foreign subsidiary

Non cash implied interest

Changes in operating assets and liabilities:

Accounts receivable

Other receivables

Loan receivable, related party

Prepaid expenses

Prepaid expense

Prepaid expense, related party

2 unchanged sentences

Accounts payable and accrued liabilities

Accounts payable, shareholder

Accounts payable, related party

Cash Flows from Investing Activities

For the nine months ended September

30, 2025 and 2024, we used net cash of $0 in investing activities.

For the three months ended

March 31, 2026 and 2025, we used net cash of $0 in investing activities.

Cash Flows from Financing Activities

For the nine months ended

September 30, 2025, net cash provided by financing activities was $3,515,856 compared to net cash provided by financing activities of

$895,972 for the nine months ended September 30, 2024.

The increase was attributable to new loans.

For the three months ended

March 31, 2026, net cash used in financing activities was $307,600 compared to net cash provided by financing activities of $314,678 for

the three months ended March 31, 2025.

The decrease was attributable to decreased proceeds of notes.

Financing activities during

the nine months ended September 30, 2025 and 2024:

September 30,

Proceeds from issuing common stock

the three months ended March 31, 2026 and 2025:

Advances from related party

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Payment of loan financing fees

Repayment of notes payable, shareholder

(10,000,000 )

Repayment of notes payable

7 unchanged sentences

Off-Balance Sheet Arrangements

During the nine months

ended September 30, 2025, and during the year ended December 31, 2024, we had no off-balance sheet arrangements.

During the three months

ended March 31, 2026, and during the year ended December 31, 2025, we had no off-balance sheet arrangements.

The effect of inflation on

our operating results was not significant in the nine months ended September 30, 2025 or 2024.

our operating results was not significant in the three months ended March 31, 2026 or 2025.

Critical Accounting Estimates

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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