Except for the historical information, the following discussion contains
forward-looking statements that are subject to risks and uncertainties. We
caution you not to put undue reliance on any forward-looking statements, which
speak only as of the date of this Report. Our actual results or actions may
differ materially from these forward-looking statements for many reasons. Our
discussion and analysis of our financial condition and results of operations
should be read in conjunction with the financial statements and related notes
and with the understanding that our actual future results may be materially
different from what we currently expect. See "CAUTIONARY STATEMENT ON
FORWARD-LOOKING INFORMATION" above. As used herein, the terms "we," "us," "our"
and the "Company" refers to Home Bistro, Inc., a Nevada corporation and its
subsidiaries unless otherwise stated.



Overview



Home Bistro, Inc. (formerly known as Gratitude Health, Inc.) (the "Company") was
incorporated in the State of Nevada on December 17, 2009. Effective March 23,
2018, the Company changed its name from Vapir Enterprises Inc. to Gratitude
Health, Inc. On September 14, 2020, the Company changed its name from Gratitude
Health, Inc. to Home Bistro, Inc. The Company is in the business of providing
pre-packaged and prepared meals to consumers focused on offering a broad array
of the highest quality meal delivery, and preparation services. The Company's
primary former operations were in the business of manufacturing, selling, and
marketing functional RTD (Ready to Drink) beverages sold under the Company's
trademark (the "RTD Business"). The RTD Business was disposed on September

25,
2020 as discussed below.



The ongoing COVID-19 global and national health emergency has caused significant
disruption in the international and United States economies and financial
markets. In March 2020, the World Health Organization declared the COVID-19
outbreak a pandemic. The spread of COVID-19 has caused illness, quarantines,
cancellation of events and travel, business and school shutdowns, reduction in
business activity and financial transactions, labor shortages, supply chain
interruptions and overall economic and financial market instability. The
COVID-19 pandemic has the potential to significantly impact the Company's supply
chain, food manufacturers, distribution centers, or logistics and other service
providers. Additionally, the Company's service providers and their operations
may be disrupted, temporarily closed or experience worker or meat or other food
shortages, which could result in additional disruptions or delays in shipments
of Home Bistro's products. To date, the Company has been able to avoid layoffs
and furloughs of employees. The Company is not able to estimate the duration of
the pandemic and potential impact on the business if disruptions or delays in
shipments of product occur. To date, the Company is not aware of any such
disruptions. In addition, a severe prolonged economic downturn could result in a
variety of risks to the business, including weakened demand for product and a
decreased ability to raise additional capital when needed on acceptable terms,
if at all. As the situation continues to evolve, the Company will continue to
closely monitor market conditions and respond accordingly. The Company has
applied for and received certain financial assistance under the Coronavirus,
Aid, Relief, and Economic Security Act ("CARES Act") enacted in March 2020 by
the U.S. Government in response to COVID-19.



On July 6, 2021, the Company entered and closed on an Agreement and Plan of
Merger with the members of Model Meals, LLC ("Model Meals"), acquiring Model
Meals through a reverse triangular merger, whereby Model Meals merged with Model
Meals Acquisition Corp., a wholly owned subsidiary of the Company, with Model
Meals being the surviving entity (the "Acquisition"). As a result, Model Meals
became a wholly owned subsidiary of the Company, and the members of Model Meals
received and aggregate of 2,008,310 shares of common stock and were paid $60,000
in cash. Pursuant to the Acquisition, the Company issued 2,008,310 shares of
common stock with grant date fair value of $ 2,028,393.

In January 2022, the Company's board of directors and management changed the Company's fiscal year end from December 31st to October 31st, effective immediately.





Recent Developments



On January 19, 2021 ("Effective Date"), the Company and Spicy Mango Foodies LLC
(f/s/o Chef Priyanka Naik ("CPN")) (collectively as "Parties"), entered into a
Joint Product Development and Distribution Agreement (the "Development
Agreement"). Pursuant to the Development Agreement, the Parties shall
collaboratively develop a brand of meals, marketed and sold utilizing the
Property ("CPN Meals") jointly with the Home Bistro label, under the terms and
conditions of the Development Agreement. The Development Agreement shall remain
in effect from the Effective Date until the last day of the month that is
two-year from the Effective Date ("Term"). The first twelve-month anniversary of
the Development Agreement shall be deemed "Year One". The Company shall only
distribute the CPN Meals within the Term and any Renewal Term (defined below),
as mutually agreed. The Company agrees that following the Term, the Company
shall use best efforts to cease the distribution of all CPN Meals. For the use
of Spicy Mango Foodies, LLC ("SMF") and all associated intellectual property for
the benefit of the CPN Meals, the Company shall pay to SMF the following: (i)
10% of all Net Revenue generated from the sale of CPN Meals ("SMF Royalty"). For
the purpose of this agreement "Net Revenue" shall be defined as gross sales
generated on CPN Meals less discounts and returns. The SMF Royalty generated
during each calendar month in which an agreement is in effect shall be due and
payable by the 10th business day of the following month in which the SMF Royalty
was earned and; (ii) 10% of all Net Revenue generated from the sale of Home
Bistro and Prime Chop brand orders in which a SMF Dedicated Code was used at the
time of purchase ("SMF Commission") and all sales derived from that account
thereafter. The SMF Commission generated during each calendar month in which an
agreement is in effect shall be due and payable by the 10th business day of the
following month in which the SMF Commission was earned.



                                       43




On February 22, 2022 ("Effective Date"), the Company and Mini Melanie, LLC
(f/s/o Chef Melanie Moss ("MM")) (collectively as "Parties"), entered into a
Joint Product Development and Distribution Agreement ("Development Agreement").
Pursuant to the Development Agreement, the Parties shall collaboratively develop
a brand of desserts ("Moss Deserts") jointly with the Home Bistro label, under
the terms and conditions of the Development Agreement. The Development Agreement
shall remain in effect from the Effective Date until the last day of the month
that is one-year from the Effective Date. For the use of MM and all associated
intellectual property for the benefit of the Moss Deserts, the Company shall pay
to MM 5% of all Net Revenue generated from the sale of Moss Deserts ("MM
Royalty"). For the purpose of this agreement "Net Revenue" shall be defined as
gross sales generated on Moss Deserts less discounts and returns. The MM Royalty
generated during each calendar month in which an agreement is in effect shall be
due and payable by the 10th business day of the following month in which the MM
Royalty was earned.



On March 25, 2022, the Company's Board of Directors ("Board"), appointed Camille
May as Chief Financial Officer of the Company. Ms. May, 34, joined the Company
in October 2021 in connection with the acquisition of Model Meals LLC. She was a
co-founder and chief financial officer of Model Meals since January 2015. In
connection with the appointment, the Board approved an employment agreement with
Ms. May, which provides for an annual salary of $120,000, a grant of five year
warrants to purchase 250,000 shares of common stock of the Company at an
exercise price of $0.001 per share, a performance-based bonus of up to $45,000
in cash and up to 100,000 shares of common stock upon attainment of certain
performance targets specified therein, and weekly meal packages of up to 16
meals at no cost. The employment agreement has a two-year initial term and
provides that her employment may only be terminated by the Company for cause.



Results of Operations

For the Three and Nine months ended July 31, 2022 and 2021





Product Sales

During the three months ended July 31, 2022 and 2021, product sales were $619,187 and $408,821, respectively, an increase of $210,366, or 51.5%.

During the nine months ended July 31, 2022 and 2021, product sales were $2,164,248 and $1,135,872, respectively, an increase of $1,028,376, or 90.5%.





Cost of Sales



The primary components of cost of sales are raw materials and direct kitchen
labor, shipping and handling costs, packaging costs, and with the introduction
of the Company's celebrity chef program in the fourth quarter of 2020, it now
incurs associated royalty fees. During the three months ended July 31, 2022 and
2021, the Company had total cost of sales of $707,346 and $371,118,
respectively, an increase of $336,228, or 90.6%. The increase was due to an
increase in direct kitchen labor, royalty fees and packaging expenses.



During the nine months ended July 31, 2022 and 2021, the Company had total cost
of sales of $2,069,942 and $951,440, respectively, an increase of $1,118,502, or
117.6%. The increase was due to an increase in direct kitchen labor, royalty
fees and packaging expenses.



Operating Expenses



For the three and nine months ended July 31, 2022 and 2021, operating expenses
consisted of the following:



                                               Three Months Ended               Nine Months Ended
                                                    July 31,                        July 31,
                                              2022            2021            2022            2021

Compensation and related expenses $ 273,348 $ 111,406 $ 1,265,025 $ 277,228 Professional and consulting expenses

           371,451         756,886       3,439,253       1,279,609
Professional and consulting expenses -
related party                                   57,500               -         117,500               -
Product development expense                     99,063               -         370,677               -
Selling and marketing expenses                 368,344          96,732         956,413         307,980
General and administrative expenses            394,032         108,779     

 1,229,076         262,523
Settlement expense                             365,140               -         365,140               -
Total                                      $ 1,928,878     $ 1,073,803     $ 7,743,084     $ 2,127,340




                                       44

Compensation and Related Expenses

? During the three months ended July 31, 2022 and 2021, compensation and related

expenses amounted to $273,348 and $111,406, respectively, an increase of

$161,942, or 145.4%. The increase was primarily attributable to an increase in


    executive salary in 2022.




    ?   During the nine months ended July 31, 2022 and 2021, compensation and
        related expenses amounted to $1,265,025 and $277,228, respectively, an

increase of $987,797, or 356.3%. The increase was primarily attributable


        to an increase of $349,810 stock-based compensation and increase in
        executive salary in 2022.

Professional and Consulting Expenses:





  ? During the three months ended July 31, 2022 and 2021, professional and
    consulting expenses amounted to $371,451 and $756,886, respectively, a

decrease of $385,435, or 50.9%. The decrease was primarily due a decrease

stock-based compensation of $450,000, a decrease in accounting fees pf $1,635,

and a decrease in investor relations fee of $124,632, offset be an increase

in consulting fees of $18,922, an increase in filing fees of $21,266 and an


    increase in legal fees of $150,644.




  ? During the nine months ended July 31, 2022 and 2021, professional and

consulting expenses amounted to $3,439,253 and $1,279,609, respectively, an

increase of $2,159,644, or 168.8%. The increase was primarily due an increase

in stock-based compensation of $1,643,591 related to commons stock issued for

lock up and leak out agreements and common stock issued for services and

prepaid services, an increase in consulting fees of $121,284, an increase in

accounting fees of $128,380, an increase in legal fees of $265,760, and an

increase of filing fees of $35,803, offset by a decrease in investor relations


    fee of $35,174.

Professional and Consulting Expenses - Related Party:





        During the three and nine months ended July 31, 2022, professional and

consulting expenses - related party amounted to $57,500 and $117,500,

respectively. We did not incur professional and consulting expenses -

related party during the 2021 periods. We entered into a consulting

agreement with a related party, dated October 1, 2021 which provides for

$10,000 monthly consulting fee. Additionally, on May 1, 2022, the Company

issued as consideration to a related party stockholder 25,000 shares of

common stock with grant date fair value of $27,500, or $1.10 per share,

based on the market price of common stock on grant date, for the

stockholder's execution of a Lock-Up & Leak Out Agreement. In connection

with this issuance, on May 1, 2022, the Company recorded stock-based


        professional fees of $27,500.




Product Development Expenses

? During the three months ended July 31, 2022 and 2021, product development

expenses amounted to $99,063 and $0, respectively, an increase of $99,063, or

100%. The product development expense in the 2022 period was primarily due to

the amortization of the deferred compensation resulting from common stock


    issued in connection with the product development agreements.

? During the nine months ended July 31, 2022 and 2021, product development

expenses amounted to $370,677 and $0, respectively, an increase of $370,677,

or 100%. The product development expense in the 2022 period was primarily due

to the amortization of the deferred compensation resulting from common stock


    issued in connection with the product development agreements.

Selling and Marketing Expenses

? During the three months ended July 31, 2022 and 2021, selling and marketing

expenses amounted to $368,344 and $96,732, respectively, an increase of

$271,612, or 280.8%. The increase was primarily due to the expansion of our

multi-channel digital marketing strategy to further promote our celebrity chef


    program.

? During the nine months ended July 31, 2022 and 2021, selling and marketing

expenses amounted to $956,413 and $307,980, respectively, an increase of

$648,433, or 210.5%. The increase was primarily due to the expansion of our

multi-channel digital marketing strategy to further promote our celebrity chef


    program in and acquisition of Model Meals in July 2021.

General and Administrative Expenses

? During the three months ended July 31, 2022 and 2021, general and

administrative expenses amounted to $394,032 and $108,779, respectively, an

increase of $285,253, or 262.2%. The increase was due to an increase in

depreciation and amortization expense of $245,899 primarily related to the

amortization of intangible assets acquired in July 2021, and a net increase in


    other general and administrative expenses of $39,354.




                                       45



  ? During the nine months ended July 31, 2022 and 2021, general and

administrative expenses amounted to $1,229,076 and $262,523, respectively, an

increase of $966,553, or 368.2%. The increase was due to an increase in

depreciation and amortization expense of $755,813 primarily related to the

amortization of intangible assets acquired in July 2021, an increase in

kitchen related expenses of $12,135, an increase in rent of $79,469, an

increase in utilities of $25,054, an increase in travel expenses of $26,500,

and a net increase in other general and administrative expenses of $67,582.






Settlement Expenses



During the three and nine months ended July 31, 2022, settlement expense
amounted to $365,140. We did not incur settlement expense during the 2021
periods. On June 30, 2022, pursuant to a stock repurchase and settlement
agreement and a lock-up and settlement agreement, the Company issued an
aggregate of 585,000 shares of its common stock with grant date fair value of
169,650, or $0.29 per share, based on the market price of common stock on grant
date, for the stockholders' execution of a Lock-Up & Leak Out Agreement. In
connection with these agreements, the Company recorded settlement expense of
$185,344. Additionally, on June 30, 2022, in connection with a lock-up and leak
out settlement agreement, the Company issued 674,100 shares of its common stock
in connection with the cashless exercise of 674,100 warrants and no cash
consideration. The 674,100 had grant date fair value of $194,490 or $0.29 per
share based on the market price of common stock on grant date. In connection
with this cashless exercise of warrants, the Company recorded settlement expense
of $194,490.



Loss from Operations

? During the three months ended July 31, 2022 and 2021, loss from operations

amounted to $2,017,037 and $1,036,100, respectively, an increase of $980,937,


    or 94.7%. The increase was due to the changes discussed above.

? During the nine months ended July 31, 2022 and 2021, loss from operations

amounted to $7,648,778 and $1,942,908, respectively, an increase of

$5,705,870, or 293.7%. The increase was due to the changes discussed above.






Other Income (Expense), net

? During the three months ended July 31, 2022 and 2021, other expense, net

amounted to $270,638 and $341,325, respectively, a decrease of $70,687, or

20.7%. The change was primarily due to a decrease in interest expense of

$178,101 resulting from a decrease in average outstanding convertible notes in

2022, offset by a decrease in gain from change in fair value of derivative

liabilities of $92,660 and offset by a decrease in gain on extinguishment of


    accounts payable of $14,754.




  ? During the nine months ended July 31, 2022 and 2021, other expense, net

amounted to $588,716 and $596,642, respectively, a decrease $7,926, or 1.3%.

The change was primarily due to decrease in interest expense of $263,957

resulting from a decrease in average outstanding convertible notes in 2022,

offset by a decrease in gain from change in fair value of derivative

liabilities of $207,573, a decrease in gain on extinguishment of accounts


    payable of $14,754 and a decrease in gain on extinguishment of debt of
    $33,704.




Net Loss

? During the three months ended July 31, 2022 and 2021, we had a net loss of

$2,287,675 and $1,377,425, respectively, an increase of $910,250, or 66.1%.

The increase was due to the changes discussed above. For the three months

ended July 31, 2022 and 2021, net loss attributable to common shareholders,

which included a deemed dividend related to the cashless exercise and

settlement of warrants of $2,578,446 and $0, amounted to $4,866,121, or

$(0.12) per basic and diluted common share, and $(1,377,425), or $(0.06) per


    basic and diluted common share, respectively.

? During the nine months ended July 31, 2022 and 2021, we had a net loss of

$8,237,494 and $2,539,550, respectively, an increase of $5,697,944, or 224.4%.

The increase was due to the changes discussed above. For the nine months ended

July 31, 2022 and 2021, net loss attributable to common shareholders, which

included a deemed dividend related to the cashless exercise and settlement of

warrants of $2,578,446 and $0, amounted to $10,815,940, or $(0.28) per basic

and diluted common share, and $2,539,550, or $(0.12) per basic and diluted


    common share, respectively.

Liquidity and Capital Resources





Liquidity is the ability of an enterprise to generate adequate amounts of cash
to meet its needs for cash requirements. We had a working capital deficit of
$2,936,693 and cash of $71,613 as of July 31, 2022 and a working capital deficit
of $318,797 and cash of $2,275,397 as of October 31, 2021.



                              July 31,       October 31,                        Percentage
                                2022             2021            Change           Change
Working capital deficit:
Total current assets        $    227,729     $  2,372,058     $ (2,144,329 )             90 %
Total current liabilities     (3,164,422 )     (2,690,855 )       (473,567 )             18 %
Working capital deficit     $ (2,936,693 )   $   (318,797 )   $ (2,617,896 )            821 %




                                       46

The increase in working capital deficit was primarily attributable to a decrease in current assets of $2,144,329 and an increase in current liabilities of $473,567, which was primarily due to the use of cash in operations, the amortization of intangible assets, and a net increase in of convertible notes.





Recent Financings



On May 18, 2022, the Company entered into a Securities Purchase Agreement ("May
2022 SPA I") with an investor for the sale of the Company's convertible note.
Pursuant to the May 2022 SPA I, the Company; (i) issued a convertible note with
principal amount of $500,000 ("May 2022 Note I") with the Company receiving
$450,000 in net proceeds, net of $40,000 of OID and $10,000 of legal fees; (ii)
issued warrants to purchase up to 769,231 shares of common stock ("May 2022
Warrant I"). The May 2022 Note I bears an annual interest rate of 15% and
matures on May 18, 2023. The May 2022 Note I is convertible at any time or times
on or after the occurrence of an event of default, at a price equal to $0.39,
provided, however, that if the Company consummates an Uplist Offering (as
defined in this May 2022 Note I) within 180 calendar days after the issuance
date, then the conversion price shall equal 75% of the Uplist Offering. If the
date of a respective conversion under the May 2022 Note I, is prior to the date
of the Uplist Offering, then the Conversion Price shall equal $0.39 per
share. At any time prior to an event of default the Company shall have the
option to pre-pay the outstanding principal at an amount equal to 115% of the
outstanding balance plus accrued. The May 2022 Warrant I issued to the investor,
provides for the right to purchase up to 769,231 shares of common stock
exercisable at $0.65, provided, however, upon the Uplist Offering, the exercise
price shall equal 120% of the Uplist Offering; after180 calendar days from the
issuance date the exercise price shall be $0.65; The warrants are subject to
adjustments and 4.99% ownership limitation and expire on the third-year
anniversary from the date of issuance. If the Company at any time while the May
2022 Note I and May 2022 Warrant I are outstanding, sell or grant any option to
purchase, sell, grant any right to re-price, or otherwise dispose of or issue
any common stock or common stock equivalents (other than an exempt issuance as
defined in the May 2022 Note I and May 2022 Warrant I), at a share price per
less than the initial conversion and/or exercise price then the conversion
and/or exercise price shall be reduced equal to such price and the number of
common stock and/or warrant shares issuable thereunder shall be increased. The
May 2022 Note I and May 2022 Warrant I also provide the investor with certain
"piggyback" registration rights, permitting them to request that the Company
include the shares issued upon conversion of the note or exercise of the
warrant, respectively, for sale in certain registration statements filed by the
Company under the Securities Act of 1933, as amended. As of July 31, 2022, the
May 2022 Note I had outstanding principal of $500,000.



On May 24, 2022, the Company entered into a Securities Purchase Agreement ("May
2022 SPA II") with an investor for the sale of the Company's convertible note.
Pursuant to the May 2022 SPA II, the Company; (i) issued a convertible note with
principal amount of $125,000 ("May 2022 Note II") with the Company receiving
$102,500 in net proceeds, net of $12,500 of OID and $10,000 of legal fees; (ii)
issued warrants to purchase up to 217,391 shares of common stock ("May 2022
Warrant II"). The May 2022 Note II bears an annual interest rate of 15% and
matures on May 24, 2023. The May 2022 Note II is convertible at any time or
times on or after the occurrence of an event of default, at a price equal to the
lower of; (i) 75% of the closing price of the common stock on the date of the
investment, and (ii) 90% of the lowest VWAP for the common stock during the five
trading day period ending on the latest complete trading day prior to the
conversion date however if the Company consummates an Uplist Offering (as
defined in the May 2022 Note II) within the 180 calendar days after the issuance
date, then the conversion price shall equal 75% of the offering price per share
of common stock at which the Uplist Offering is made. Unless otherwise adjusted
pursuant to the terms of the May 2022 Note II, if the date of a conversion under
the May 2022 Note II is prior to the date of the Uplist Offering, then the
conversion price shall equal $0.345 per share. At any time prior to an event of
default the Company shall have the option to pre-pay the May 2022 Note II at an
amount equal to 115% of the outstanding balance plus accrued and unpaid interest
on the outstanding balance. Upon the occurrence and during the continuation of
any event of default, the May 2022 Note II shall become immediately due and
payable at an amount equal to 150% of the outstanding principal plus accrued and
unpaid interest and any default interest, if any. The May 2022 Warrant II issued
to the investor, provides for the right to purchase up to 217,391 shares of
common stock exercisable at $0.575, provided, however, that if the Company
consummates an Uplist Offering within 180 calendar days from the issuance date
in which case the exercise price shall be equal to 120% of the Uplist Offering
price; after180 calendar days from the issuance date the exercise price shall be
$0.575. The warrants are subject to adjustments and 4.99% ownership limitation
and expire on the third-year anniversary from the date of issuance. If the
Company at any time while the May 2022 Note II and May 2022 Warrant II are
outstanding, sell or grant any option to purchase, sell, grant any right to
re-price, or otherwise dispose of or issue any common stock or common stock
equivalents (other than an exempt issuance as defined in the May 2022 Note II
and May 2022 Warrant II), at a share price per less than the initial conversion
and/or exercise price then the conversion and/or exercise price shall be reduced
equal to such price and the number of common stock and/or warrant shares
issuable thereunder shall be increased. The May 2022 Note II and the May 2022
Warrant II also provide the investor with certain "piggyback" registration
rights, permitting them to request that the Company include the shares issued
upon conversion of the note or exercise of the warrant, respectively, for sale
in certain registration statements filed by the Company under the Securities Act
of 1933, as amended. As of July 31, 2022, the May 2022 Note II had outstanding
principal of $125,000.



                                       47



On May 24, 2022, the Company entered into a Securities Purchase Agreement ("May
2022 SPA III") with an investor for the sale of the Company's convertible note.
Pursuant to the May 2022 SPA III, the Company; (i) issued a convertible note
with principal amount of $182,927 ("May 2022 Note III") with the Company
receiving $150,000 in net proceeds, net of $18,293 of OID and $14,634 of legal
fees; (ii) issued warrants to purchase up to 318,134 shares of common stock
("May 2022 Warrant III"). The May 2022 Note III bears an annual interest rate of
15% and matures on May 24, 2023. The May 2022 Note III is convertible at any
time or times on or after the occurrence of an event of default, at a price
equal to the lower of; (i) 75% of the closing price of the common stock on the
date of the investment, and (ii) 90% of the lowest VWAP for the common stock
during the five trading day period ending on the latest complete trading day
prior to the conversion date however if the Company consummates an Uplist
Offering (as defined in the May 2022 Note III) within the 180 calendar days
after the issuance date, then the conversion price shall equal 75% of the
offering price per share of common stock at which the Uplist Offering is made.
Unless otherwise adjusted pursuant to the terms of the May 2022 Note III, if the
date of a conversion under the May 2022 Note III is prior to the date of the
Uplist Offering, then the conversion price shall equal $0.345 per share. At any
time prior to an event of default the Company shall have the option to pre-pay
the May 2022 Note III at an amount equal to 115% of the outstanding balance plus
accrued and unpaid interest on the outstanding balance. Upon the occurrence and
during the continuation of any event of default, the May 2022 Note III shall
become immediately due and payable at an amount equal to 150% of the outstanding
principal plus accrued and unpaid interest and any default interest, if any.
Upon an event of default, at the option of the investor the conversion price
shall equal 90% of the lowest VWAP for the common stock during the five-trading
day period prior to the conversion date. The May 2022 Warrant III issued to the
investor, provides for the right to purchase up to 318,134 shares of common
stock exercisable at $0.575 however if the Company consummates an Uplist
Offering within 180 calendar days from the issuance date in which case the
exercise price shall be equal to 120% of the Uplist Offering price; after180
calendar days from the issuance date the exercise price shall be $0.575. The
warrants are subject to adjustments and 4.99% ownership limitation and expire on
the third-year anniversary from the date of issuance. If the Company at any time
while the May 2022 Note III and May 2022 Warrant III are outstanding, sell or
grant any option to purchase, sell, grant any right to re-price, or otherwise
dispose of or issue any common stock or common stock equivalents (other than an
exempt issuance as defined in the May 2022 Note III and May 2022 Warrant III),
at a share price per less than the initial conversion and/or exercise price then
the conversion and/or exercise price shall be reduced equal to such price and
the number of common stock and/or warrant shares issuable thereunder shall be
increased. The May 2022 Note III and the May 2022 Warrant III also provide the
investor with certain "piggyback" registration rights, permitting them to
request that the Company include the shares issued upon conversion of the note
or exercise of the warrant, respectively, for sale in certain registration
statements filed by the Company under the Securities Act of 1933, as amended. As
of July 31, 2022, the May 2022 Note III had outstanding principal of $182,927.



On July 19, 2022 (the "Issue Date"), the Company entered into Securities
Purchase Agreements dated as of July 19, 2022 (the "July 2022 SPA"), by and
between the Company and 1800 Diagonal Lending LLC, a Virginia limited liability
company (the "Investor"). Pursuant to the July 2022 SPA, among other things, the
Company agreed to issue to the Investor a convertible note in the original
principal amount of $154,250 (the "July 2022 Note"). Upon closing, the Company
received $138,000 in net proceeds from the Investor, which was net of $16,250 of
legal fees. The July 2022 Note accrues interest at an annual interest rate of
8%, has a default interest rate of 22%, and matures on January 19, 2024 (the
"Maturity Date"). The Investor may convert the July 2022 Note into shares of the
Company's common stock 180 days after the Issue Date until the later of (i) the
Maturity Date and (ii) the date the Company pays any amounts owed in connection
with an event of default. The per share conversion price into which the July
2022 Note is convertible into shares of common stock (the "Conversion Price") is
65% multiplied by the average of the lowest two closing bid prices for the
common stock during the ten trading days ending on the last trading day prior to
the conversion date. The Company has the right to prepay the outstanding
principal amount of the Note, plus any accrued interest on the outstanding
principal (including any default interest) at a rate of (x) 120% during the
period ending 120 days after the Issue Date and (y) 125% during the period
between 121 days and 180 days after the Issue Date. The Company does not have a
prepayment right following the expiration of the 180-day period. Upon the
occurrence and during the continuation of any event of default under the Note,
the Note becomes immediately due and payable and the Company is obligated to pay
the Investor in full satisfaction of its obligations thereunder an amount equal
to the greater of (i) the principal amount then outstanding plus accrued
interest (including any default interest) through the date of full repayment
multiplied by 150% and (ii)(a) the highest number of shares of Common Stock
issuable upon conversion of the default sum at the Conversion Price, multiplied
by (b) the highest closing price for the Common Stock during the period
beginning on the date of first occurrence of the event of default and ending one
day prior to the mandatory prepayment date. The obligations under the July 2022
Note are not secured by any assets of the Company. The July 2022 SPA and July
2022 Note agreements contain other provisions, covenants and restrictions common
with this type of debt transaction. Furthermore, the Company is subject to
negative covenants under the Agreements, which the Company also believes are
also customary for transactions of this type. As of July 31, 2022, the July 2022
Note had outstanding principal of $154,250.



                                       48



Cash Flows

The following table provides detailed information about our net cash flows:





                                                  Nine Months Ended
                                                      July 31,
                                                2022             2021

Net cash used in operating activities $ (3,343,172 ) $ (1,489,863 ) Net cash used in investing activities

            (11,750 )       (187,075 )

Net cash provided by financing activities 1,151,138 2,055,789 Net change in cash

$ (2,203,784 )   $    378,851

Net Cash Used in Operating Activities

Net cash used in operating activities for the nine months ended July 31, 2022 and 2021, were $3,343,172 and $1,489,863, respectively, an increase of $1,853,309, or 124%.

? Net cash used in operating activities for the nine months ended July 31, 2022

primarily reflected our net loss of $8,237,494 adjusted for the add-back on

non-cash items such as depreciation and amortization expense of $851,833,

total stock-based compensation, professional fees and product development fees

of $3,016,326, amortization of debt discount of $426,495, settlement expense

from the issuance of common stock of $365,140, non-cash interest expense of

$83,058 related to put premium on stock-settled debt, a gain on change in fair

value of derivative liability of $55,855, and changes in operating assets and

liabilities consisting of an increase of inventory of $31,114, an increase in

prepaid expenses and other current assets of $28,341, an increase in accounts

payable of $280,791, an increase in unredeemed gift cards of $69,720 offset by


    a decrease in accrued expense and other liabilities of $113,610.

? Net cash used in operating activities for the nine months ended July 31, 2021

primarily reflected our net loss of $2,539,550 adjusted for the add-back on

non-cash items such as depreciation expense of $10,390, stock-based

compensation and professional fees for services of $636,221, gain on

extinguishment of accounts payable of $7,075, gain on extinguishment of debt

of $41,241, amortization of debt discount of $817,922, gain on change in fair

value of derivative liability of $289,351, and changes in operating asset and

liabilities consisting primarily of an increase in prepaid expenses and other

current assets of $50,406, an increase in accounts payable of $28,955 and an

increase in unredeemed gift cards of $19,836, offset by a decrease in accrued


    expense and other liabilities of $73,998.

Net Cash Used in Investing Activities

Net cash used in investing activities the nine months ended July 31, 2022 and 2021, were $11,750 and $187,075, respectively, a decrease of $175,325, or 94%.

? Net cash used by investing activities for the nine months ended July 31, 2022

consisted of purchase of property and equipment in the amount of $11,750.

? Net cash used by investing activities for the nine months ended July 31, 2021

consisted of purchase of property and equipment in the amount of $127,075 and


    a payment of $60,000 for the acquisition of Model Meals.

Net Cash Provided by Financing Activities





Net cash provided by financing activities the nine months ended July 31, 2022
and 2021, were $1,151,138 and $2,055,789, respectively, a decrease of $907,388,
or 44%.

? Net cash provided by financing activities for the nine months ended July 31,

2022 consisted of net proceeds from sale of common stock of $1,368,492, net

proceeds from advances payable of $322,502, and net proceeds from convertible

notes of $790,500 offset by repayments of convertible notes payable of

$998,054, repayments of advances payable of $219,233, the payment of a stock

repurchase agreement of $50,000, and repayment of convertible note - related


    party of $63,069.




                                       49

? Net cash provided by financing activities for the nine months ended July 31,

2021 consisted of net proceeds from the sale of common stock of $866,770, net

proceeds from note payable of $7,000, net proceeds from convertible note

payable of $1,647,300, net proceeds from related party convertible note

payable of $100,000, and net proceeds from advances payable of $274,040,

offset by repayments convertible notes payable of $652,667 and repayments of


    advances payable of $186,654.




Cash Requirements



We are dependent on our product sales to fund our operations and may require the
sale of additional common stock to maintain operations. Our officers and
directors have made no written commitments with respect to providing a source of
liquidity in the form of cash advances, loans, and/or financial guarantees.




Going Concern




The consolidated financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the settlement of
liabilities and commitments in the normal course of business. As reflected in
the accompanying unaudited consolidated financial statements, for the nine
months ended July 31, 2022, the Company had a net loss and cash used in
operations of $8,237,494 and $3,343,172, respectively. On July 31, 2022, the
Company had an accumulated deficit, stockholders' equity, and working capital
deficit of $(29,951,604), $1,383,704 and $(2,936,693), respectively. These
factors raise substantial doubt about the Company's ability to continue as a
going concern for a period of twelve months from the issuance date of this
report. The Company's primary source of operating funds has primarily from the
sale of common stock and the issuance of convertible debt notes. The Company has
experienced net losses from operations since inception but expects these
conditions to improve in the near term and beyond as it develops its business
model.



Management cannot provide assurance that the Company will ultimately achieve
profitable operations or become cash flow positive or raise additional debt
and/or equity capital. Management believes that the Company's capital resources
are not currently adequate to continue operating and maintaining its business
strategy for a period of twelve months from the issuance date of this report. If
the Company is unable to raise additional capital or secure additional lending
in the near future, management expects that the Company will need to curtail or
cease operations. These consolidated financial statements do not include any
adjustments related to the recoverability and classification of recorded asset
amounts and classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.

Inflation and Changing Prices

Neither inflation nor changing prices for the nine months ended July 31, 2022 had a material impact on our operations.

Off-Balance Sheet Arrangements

None.

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