What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-11-14 compared with 2022-08-15 · 132 added, 124 removed, 208 unchanged (55% of the section changed)

46 unchanged sentences

Overview and Outlook

We continue to sell our

products online via our direct-to-consumer channels, in addition to our growing pipeline of business-to-business customers.

of 2021, we completed the construction of our first freeze drier and, in anticipation of the increased production demands for our

products and freeze drying expertise, we are in the development process of our second and third freeze driers.

During the second quarter

of 2022, we saw a significant increase in demand for our products from large business-to-business customers.

We continue to sell our products

online via our direct-to-consumer channels, in addition to our growing pipeline of business-to-business customers.

In March of 2021, we

completed the construction of our first freeze drier and, in anticipation of the increased production demands for our products and freeze-drying

expertise, we are in the development process of our second and third freeze driers.

During the third quarter of

2022, we saw a significant increase in demand for our products from large business-to-business customers.

We expect our growing pipeline

22 unchanged sentences

Going Concern Uncertainty

As of June 30, 2022,

As of September 30, 2022,

the Company had incurred recurring losses from operations resulting in an accumulated deficit of $48,864,617, and had cash on hand of

26 unchanged sentences

Results of Operations for the Three Months

Ended June 30, 2022 and 2021

Ended September 30, 2022 and 2021

The following table summarizes

selected items from the statement of operations for the three months ended June 30, 2022 and 2021, respectively.

selected items from the statement of operations for the three months ended September 30, 2022 and 2021, respectively.

Three Months Ended

September 30,

Cost of goods sold

10 unchanged sentences

Interest expense

Loss on investment in Allied Esports Entertainment, Inc.

Gain on disposal of property and equipment

Total other income (expense)

1 unchanged sentence

$ (1,582,157 )

Revenues consist

primarily of online freeze dried foods product sales.

The revenues were $244,943 for the three months ended June 30, 2022,

compared to $7,076 for the three months ended June 30, 2021, an increase of $237,867, or 3,362%.

Revenues increased as we

continued to launch our product lines and significantly increased our business-to-business sales during the second quarter of 2022.

Revenues consist primarily

of online freeze dried foods product sales.

The revenues were $87,741 for the three months ended September 30, 2022, compared to

$21,137 for the three months ended September 30, 2021, an increase of $66,604, or 315%.

Revenues increased as we continued to launch

our product lines and significantly increased our business-to-business sales during the third quarter of 2022, compared to the same period

in the prior year.

We had minimal revenues during the comparative period, as we had just commenced sales.

Cost of Goods Sold

Cost of goods sold for

the three months ended June 30, 2022 were $150,603, compared to $4,899 for the three months ended June 30, 2021, an

increase of $145,704, or 2,974%.

Cost of goods sold, primarily consisting of material costs and labor on the sales of freeze dried

food products, resulted in a gross profit margin of approximately 39% during the quarter, compared to 31% during the comparative

Cost of goods sold for the

three months ended September 30, 2022 were $65,195, compared to $19,396 for the three months ended September 30, 2021, an increase

of $45,799, or 236%.

Cost of goods sold, primarily consisting of material costs and labor on the sales of freeze dried food products,

resulted in a gross profit margin of approximately 26% during the quarter, compared to 8% during the comparative period.

General and administrative expenses

1 unchanged sentence

Salaries and benefits for

the three months ended June 30, 2022 were $1,242,900, compared to $916,957 for the three months ended June 30, 2021, an increase

of $325,943, or 36%.

Salaries and benefits included stock-based compensation expense for the three months ended June 30, 2022 of

$431,370, compared to $333,324 for the three months ended June 30, 2021, an increase of $98,046, or 29%.

Stock-based compensation

consists of $386,372 and $140,244 of stock options expense incurred in the three months ended June 30, 2022 and 2021, respectively,

and $44,998 and $193,080 of expense related to shares of common stock issued to officers and consultants for services rendered in the

three months ended June 30, 2022 and 2021, respectively.

The increase in salaries and benefits was primarily due to increased operations

as we developed our freeze dried food operations.

the three months ended September 30, 2022 were $788,450, compared to $936,783 for the three months ended September 30, 2021,

a decrease of $148,333, or 16%.

Salaries and benefits included stock-based compensation expense for the three months ended September 30,

2022 of $155,868, compared to $306,018 for the three months ended September 30, 2021, a decrease of $150,150, or 49%.

compensation consists of $130,868 and $145,566 of stock options expense incurred in the three months ended September 30, 2022 and

2021, respectively, and $25,000 and $160,452 of expense related to shares of common stock issued to officers and consultants for services

rendered in the three months ended September 30, 2022 and 2021, respectively.

The decrease in salaries and benefits was primarily

due to decreased stock-based compensation awards.

Professional services

5 unchanged sentences

Other general and administrative

expenses for the three months ended June 30, 2022 was $487,789, compared to $424,263 for the three months ended June 30, 2021,

an increase of $63,526, or 15%.

The increase is primarily attributable to increased administrative infrastructure as we continue to scale

the production and sales of our freeze dried products.

expenses for the three months ended September 30, 2022 was $403,429, compared to $472,369 for the three months ended September 30,

2021, a decrease of $68,940, or 15%.

The decrease is primarily attributable to decreased administrative infrastructure as we continue

to scale the production and sales of our freeze dried products.

Depreciation expense for the

three months ended June 30, 2022 was $67,693, compared to $60,056 for the three months ended June 30, 2021, an increase of $7,637,

The increase is attributable to the addition of new equipment placed in service throughout 2021.

three months ended September 30, 2022 was $69,127, compared to $64,863 for the three months ended September 30, 2021, an increase

of $4,264, or 7%.

The increase is attributable to the addition of new equipment placed in service during prior periods.

Other income (expense)

In the three months ended

June 30, 2022, other expense was $355,452 consisting entirely of interest expense on our EIDL loan with the SBA and loans from our

officers and directors, including $262,074 related to the amortization of warrants issued as a debt discount on loans.

During the comparative

three months ended June 30, 2021, other expense was $98,001, consisting of $1,222 of interest expense derived from the operating

loans the Company received from the PPP and EIDL programs and a $96,779 net loss on investments in Allied Esports Entertainment, Inc.

September 30, 2022, other expense was $347,603 consisting of $383,995 of interest expense on our EIDL loan with the SBA and loans

from our officers and directors, including $285,522 related to the amortization of warrants issued as a debt discount on loans, as partially

offset by a gain on disposal of property and equipment of $36,392.

During the comparative three months ended September 30, 2021,

other expense was $1,697, consisting entirely of interest expense derived from the operating loans the Company received from the PPP and

EIDL programs.

Net loss for the three months

ended June 30, 2022 was $2,112,789, compared to $1,557,794 during the three months ended June 30, 2021, an increased net loss

of $554,995, or 36%.

The increased net loss was due primarily to $297,544 of increased operating losses over the prior year, as we ramped

up our operations, increased interest expense of $354,230, including $262,074 of amortization on warrants issued as a debt discount, as

partially offset by a $96,779 loss on the sale of our investments in Allied Esports Entertainment, Inc.

securities in the comparative

period that were not incurred in the current period.

Results of Operations for the Six Months Ended

June 30, 2022 and 2021

ended September 30, 2022 was $1,647,272, compared to $1,582,157 during the three months ended September 30, 2021, an increased

net loss of $65,115, or 4%.

The increased net loss was due primarily to increased interest expense of $382,298, including $285,522 of

amortization on warrants issued as a debt discount, as partially offset by $280,791 of decreased operating losses over the prior year.

Results of Operations for the Nine Months Ended

September 30, 2022 and 2021

The following table summarizes

selected items from the statement of operations for the six months ended June 30, 2022 and 2021, respectively.

Six Months Ended

selected items from the statement of operations for the nine months ended September 30, 2022 and 2021, respectively.

Nine Months Ended

September 30,

Cost of goods sold

10 unchanged sentences

Interest expense

Gain on disposal of property and equipment

Gain on early extinguishment of debt

3 unchanged sentences

$ (3,947,828 )

Revenues consist

primarily of online freeze dried foods product sales.

The revenues were $293,315 for the six months ended June 30, 2022,

compared to $7,076 for the six months ended June 30, 2021, an increase of $286,239, or 4,045%.

Revenues increased as we

continued to launch our product lines and significantly increased our business-to-business sales during the second quarter of 2022.

We had minimal revenues during the comparative period, as we had just commenced sales.

Revenues consist primarily

of online freeze dried foods product sales.

The revenues were $381,056 for the nine months ended September 30, 2022, compared to

$28,213 for the nine months ended September 30, 2021, an increase of $352,843, or 1,251%.

Revenues increased as we continued to launch

our product lines and significantly increased our business-to-business sales during the third quarter of 2022.

We had minimal revenues

during the comparative period, as we had just commenced sales.

Cost of Goods Sold

Cost of goods sold for

the six months ended June 30, 2022 were $198,094, compared to $4,899 for the six months ended June 30, 2021, an increase

Cost of goods sold for the

nine months ended September 30, 2022 were $263,289, compared to $24,295 for the nine months ended September 30, 2021, an increase

of $238,994, or 984%.

Cost of goods sold, primarily consisting of material costs and labor on the sales of freeze dried food

products, resulting in a gross profit margin of approximately 32% during the current period, compared to 31% during the comparative

Cost of goods sold, primarily consisting of material costs and labor on the sales of freeze dried food products,

resulting in a gross profit margin of approximately 31% during the current period, compared to 14% during the comparative period.

General and administrative expenses

1 unchanged sentence

Salaries and benefits for

the six months ended June 30, 2022 were $2,159,055, compared to $1,674,101 for the six months ended June 30, 2021, an increase

of $484,954, or 29%, Salaries and benefits included stock-based compensation expense for the six months ended June 30, 2022 of $575,631,

compared to $709,215 for the six months ended June 30, 2021, a decrease of $133,584, or 19%.

Stock-based compensation consists of

$520,633 and $261,465 of stock options expense incurred in the six months ended June 30, 2022 and 2021, respectively, and $54,998

and $447,750 of expense related to shares of common stock issued to officers and consultants for services rendered in the six months ended

June 30, 2022 and 2021, respectively.

The increase in salaries and benefits was primarily due to increased operations as we developed

our freeze dried food operations.

the nine months ended September 30, 2022 were $2,947,505, compared to $2,610,884 for the nine months ended September 30, 2021,

an increase of $336,621, or 13%, Salaries and benefits included stock-based compensation expense for the nine months ended September 30,

2022 of $731,499, compared to $1,015,233 for the nine months ended September 30, 2021, a decrease of $283,734, or 28%.

compensation consists of $651,501 and $407,031 of stock options expense incurred in the nine months ended September 30, 2022 and

2021, respectively, and $79,998 and $608,202 of expense related to shares of common stock issued to officers and consultants for services

rendered in the nine months ended September 30, 2022 and 2021, respectively.

The increase in salaries and benefits was primarily

due to increased operations as we developed our freeze dried food operations, as partially offset by a reduction in stock-based compensation

Professional services

5 unchanged sentences

Other general and administrative

expenses for the six months ended June 30, 2022 was $892,865, compared to $711,084 for the six months ended June 30, 2021, an

increase of $181,781, or 26%.

The increase is primarily attributable to increased administrative infrastructure as we continued to scale

the production and sales of our freeze dried products.

expenses for the nine months ended September 30, 2022 was $1,296,294, compared to $1,183,453 for the nine months ended September 30,

2021, an increase of $112,841, or 10%.

The increase is primarily attributable to increased administrative infrastructure as we continued

to scale the production and sales of our freeze dried products.

Depreciation expense for the

six months ended June 30, 2022 was $132,919, compared to $65,052 for the six months ended June 30, 2021, an increase of $67,867,

The increase is attributable to the addition of new equipment placed in service throughout 2021.

Other income (expense)

In the six months ended June 30,

2022, other expense was $459,245, consisting entirely of interest expense on our EIDL loan with the SBA and loans from our officers and

directors, including $321,798 related to the amortization of warrants issued as a debt discount on loans.

During the comparative six months

ended June 30, 2021, other income, on a net basis, was $244,982, consisting of a $113,772 gain on early extinguishment of debt and

a net gain on investments in Allied Esports Entertainment, Inc.

securities of $133,944, as offset by $2,734 of interest expense derived

from the operating loans the Company received from the PPP and EIDL programs.

Net loss for the six months

ended June 30, 2022 was $3,664,851, compared to $2,365,671 during the six months ended June 30, 2021, an increased net loss

nine months ended September 30, 2022 was $202,046, compared to $129,915 for the nine months ended September 30, 2021, an increase

of $72,131, or 56%.

The increased net loss was due primarily to $594,953 of increased operating losses over the prior year, as we ramped

up our operations, increased interest expense of $456,511, including $321,798 of amortization on warrants issued as a debt discount, and

prior years gains of $113,772 and $133,944 on the forgiveness of our PPP loan and gains on the sale of our investments in Allied Esports

The increase is attributable to the addition of new equipment placed in service during prior periods.

Other income (expense)

In the nine months ended September 30,

2022, other expense was $843,240, consisting of $843,240 of interest expense on our EIDL loan with the SBA and loans from our officers

and directors, including $607,320 related to the amortization of warrants issued as a debt discount on loans, as partially offset by a

gain on disposal of property and equipment of $36,392.

During the comparative nine months ended September 30, 2021, other income,

on a net basis, was $243,285, consisting of a $113,772 gain on early extinguishment of debt and a net gain on investments in Allied Esports

Entertainment, Inc.

securities in the comparative period.

securities of $133,944, as offset by $4,431 of interest expense derived from the operating loans the Company received

from the PPP and EIDL programs.

Net loss for the nine months

ended September 30, 2022 was $5,312,123, compared to $3,947,828 during the nine months ended September 30, 2021, an increased

net loss of $1,364,295, or 35%.

The increased net loss was due primarily to $314,162 of increased operating losses over the prior year,

as we ramped up our operations, increased interest expense of $838,809, including $607,320 of amortization on warrants issued as a debt

discount, and prior years gains of $113,772 and $133,944 on the forgiveness of our PPP loan in the comparative period that were not present

in the current period.

Liquidity and Capital Resources

The following table summarizes

our total current assets, liabilities and working capital at June 30, 2022 and December 31, 2021, respectively.

our total current assets, liabilities and working capital at September 30, 2022 and December 31, 2021, respectively.

September 30,

Current Assets

1 unchanged sentence

Working Capital

As of June 30, 2022,

As of September 30, 2022,

we had working capital of $2,878,272.

The following table summarizes

our cash flows during the six months ended June 30, 2022 and 2021, respectively.

Six Months Ended

our cash flows during the nine months ended September 30, 2022 and 2021, respectively.

Nine Months Ended

September 30,

Net cash used in operating activities

4 unchanged sentences

Net change in cash and cash equivalents

$ (1,971,112 )

Net cash used in operating

activities was $2,274,361 and $2,764,841 for the six months ended June 30, 2022 and 2021, respectively, a period over period

decrease of $490,480.

activities was $4,149,046 and $4,304,501 for the nine months ended September 30, 2022 and 2021, respectively, a period over

period decrease of $155,455.

The decrease was primarily due to our increased revenues that began to diminish our operating expenditures.

Net cash used in

investing activities were $2,015,033 and $390,643 for the six months ended June 30, 2022 and 2021, respectively, a period

over period increase of $1,624,390.

Cash used in investing activities were comprised of $124,384 of fixed asset purchases and

$1,884,720 of construction in progress, as we built out our 2 nd and 3 rd freeze dried freezers and leasehold

improvements on our office space, and $5,929 of purchases on trademarks during the six months ended June 30, 2022, compared to

$805,004 of fixed asset purchases, as partially offset with $414,361 of proceeds received from the sale of securities during the six

months ended June 30, 2021.

Net cash used in investing

activities were $2,272,066 and $590,250 for the nine months ended September 30, 2022 and 2021, respectively, a period over period

increase of $1,681,816.

Cash used in investing activities were comprised of $154,853 of fixed asset purchases, $2,175,241 of construction

in progress, as we built out our 2 nd and 3 rd freeze dried freezers and commenced leasehold improvements on our office

space, and $5,929 of purchases on trademarks, as partially offset by $63,957 of proceeds received from the disposal of property and equipment

during the nine months ended September 30, 2022, compared to $1,004,611 of fixed asset purchases, as partially offset with $414,361

of proceeds received from the sale of securities during the nine months ended September 30, 2021.

Net cash provided by financing

activities were $3,700,000 and $4,997,136 for the six months ended June 30, 2022 and 2021, respectively, a period over period

decrease of $1,297,136.

activities were $4,450,000 and $5,562,511 for the nine months ended September 30, 2022 and 2021, respectively, a period over

period decrease of $1,112,511.

The $4,450,000 of financing received in 2022 was comprised of debt financing, and the 2021 financing proceeds

were the result of the $4,997,136 we raised from the sale of an aggregate 631,250 shares of the

Company’s common stock at $4.00 per share, and another 581,675 shares sold at $4.25 per share .

were the r esult of $2,525,000 we raised from the sale of an aggregate 631,250 shares of the Company’s

common stock at $4.00 per share, and another $3,037,511 raised from the sale of an aggregate 714,701 shares sold at $4.25 per share .

Satisfaction of our cash obligations for

the next 12 months

As of June 30,

As of September 30, 2022,

our balance of cash was $1,374,816 and we had total working capital of $2,878,272.

on projections of cash expenditures in the Company’s current business plan, the cash on hand as of June 30, 2022 would be

insufficient to sustain operations over the next year.

We expect to incur significant costs related to the development and operation

of our freeze dried foods business which will put a strain on our cash resources.

We are currently in the process of expanding our

production capabilities through the construction of a third freeze drier, which will require approximately $1 million of

incremental capital and will likely require the Company to identify additional sources of funding .

plan for satisfying our cash requirements for the next twelve months is through cash on hand and additional financing in the form of

equity or debt as needed.

Our ability to scale production and distribution capabilities and further increase the value of our brands

is largely dependent on our success in raising additional capital .

B ased on projections

of cash expenditures in the Company’s current business plan, the cash on hand as of September 30, 2022 would be insufficient

to sustain operations over the next year.

We expect to incur significant costs related to the development and operation of our freeze

dried foods business which will put a strain on our cash resources.

We are currently in the process of expanding our production capabilities

through the construction of two additional freeze driers, which will require approximately $500,000 to complete, of which we expect to

pay for with the financing obtained on August 23, 2022 .

O ur plan for satisfying our cash

requirements for the next twelve months is through cash on hand and additional financing in the form of equity or debt as needed.

ability to scale production and distribution capabilities and further increase the value of our brands is largely dependent on our success

in raising additional capital .

Off-Balance Sheet Arrangements

22 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis