The financial data discussed below is derived from our audited consolidated financial statements for the fiscal years ended December 31, 2021 and 2020, which are found elsewhere in this Annual Report on Form 10-K. Our consolidated financial statements are prepared and presented in accordance with generally accepted accounting principles in the United States. The financial data discussed below is only a summary and investors should read the following discussion and analysis of our financial condition and results of our operations in conjunction with our consolidated financial statements and the related notes to those statements included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. Our actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the section entitled "Risk Factors," and elsewhere in this Annual Report on Form 10-K.





Overview

The Company was formed as a limited liability company in the state of Florida on April 1, 2010, to engage in the development and distribution of nutritional and dietary oral spray products. On December 3, 2012, we converted from a Limited Liability Company to a Florida Corporation.

We manufacture, market, and distribute alternative wellness solutions with a mission to build an enterprise solution within the health and wellness industry.

Our objective is to uncover breakthrough, nutrient-rich formulations, using the most effective ingredients and delivery systems available to the nutraceutical industry, and offer alternative wellness solutions that help improve the quality of life. Our distribution strategy includes selling to private label customers, retailers, distributors, and consumers through retail outlets.

Years Ended December 31, 2021 and 2020

We had sales of $626,619 and $1,255,784 for the years ended December 31, 2021 and 2020, respectively, or a 50.1% decrease. This decrease is directly related to the decrease in sales and production volume resulting from the shutdowns and business disruptions due to the pandemic and overall industry changes as a result.

Cost of sales was $543,031 compared to $745,934 for the years ended December 31, 2021 and 2020, respectively, or a 27.2% decrease. This decrease is directly related to the decrease in sales and production volume resulting from the shutdowns and business disruptions from the pandemic and overall industry changes.

Gross profit was $83,588 and $509,850 for the years ended December 31, 2021 and 2020, respectively, or a 83.6% decrease. This is the result of the disruptions in operations resulting from the pandemic and overall industry changes.

General and administrative expenses were $1,849,371 compared to $1,804,765 for the years ended December 31, 2021 and 2020, respectively, or a 2.5% increase. This increase is primarily due to the disruptions in the Company's operations from the pandemic overall industry changes.

Stock based compensation was $2,569,514 and $501,707 for the years ended December 31, 2021 and 2020, respectively, or a 412.2% increase. This increase was a result of business development and operational efforts.

Finance costs were $1,849,286 compared to $916,835 for the years ended December 31, 2021 and 2020, respectively, an increase of $932,451.

We incurred a net loss of approximately $5,800,000 compared to $2,900,000 for the years ended December 31, 2021 and 2020, respectively.





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Liquidity and Capital Resources

Historically, the Company's primary cash needs have been related to working capital items, which the Company has largely funded through our revenues, working capital, cash on hand, and proceeds from the issuance of stock.

The Company through its efforts has secured new business and expects to see a surge in its revenue from multiple channels providing the necessary cash flows to support its operations and debt commitments.





Cash Flow Activities

As of December 31, 2021, the Company had a cash balance of $135,769. Failure to successfully continue to grow operational revenues could harm our profitability and adversely affect our financial condition and results of operations. We face all of the risks inherent in a new business, including the need for significant additional capital, management's potential underestimation of initial and ongoing costs, and potential delays and other problems in connection with establishing sales channels.

We are continuing our plan to further grow and expand operations and seek sources of capital to pay our contractual obligations as they come due. Management believes that its current operating strategy will provide the opportunity for us to continue as a going concern as long as we are able to obtain additional financing; however, there is no assurance this will occur. The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.





Operating Activities

Our cash increased $135,027 for the year ended December 31, 2021. Cash used in operating activities is net loss adjusted for certain non-cash items and changes in certain assets and liabilities, such as those included in working capital.

For the year ended December 31, 2021, the Company's operating activities used cash of $487,386, compared to the year ended December 31, 2020 which used cash of $1,284,240. For details of the operating cash flows refer to the consolidated statements of cash flows in Item 8 - Financial Information and Supplementary Data.





Investing Activities

For the year ended December 31, 2021, the Company's investing activities used cash of $675,000 for a deposit on an equity and license agreement.





Financing Activities

During the year ended December 30, 2021, we received an aggregate of $243,275 from SBA financing, under the Paycheck Protection Program and CARES act.

We also received $725,050 from financing from debt, and $348,000 from the sale of common stock.

Critical Accounting Policies and Estimates

In preparing the financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), we have adopted various accounting policies. Our most significant accounting policies are disclosed in Note 2 to the financial statements.

The preparation of the financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Our estimates and assumptions, including those related to the ability to continue as going concern, legal proceedings, the recoverability of inventory, long-lived assets, the fair value of stock-based compensation and the fair value of warrant liabilities are updated as appropriate, which in most cases is at least quarterly. We base our estimates on historical experience, or various assumptions that are believed to be reasonable under the circumstances and the results form the basis for making judgments about the reported values of assets, liabilities, revenues and expenses. Actual results may materially differ from these estimates.





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Estimates are considered to be critical if they meet both of the following criteria: (1) the estimate requires assumptions about material matters that are uncertain at the time the accounting estimates are made, and (2) other materially different estimates could have been reasonably made or material changes in the estimates are reasonably likely to occur from period to period. Our critical accounting estimates include the following:

Revenue Recognition: In general, we record revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. Provision for sales returns will be estimated based on the Company's historical return experience.

Accounts Receivable and Allowance for Doubtful Accounts: Our accounts receivable are stated at estimated net realizable value. Accounts receivable are comprised of balances due from customers net of estimated allowances for uncollectible accounts. In determining collectability, historical trends are evaluated and specific customer issues are reviewed to arrive at appropriate allowances.

Long-Lived Assets: The carrying value of long-lived assets is reviewed annually and on a regular basis for the existence of facts and circumstances that may suggest impairment. If indicators of impairment are present, we determine whether the sum of the estimated undiscounted future cash flows attributable to the long-lived asset in question is less than its carrying amount. If less, we measure the amount of the impairment based on the amount that the carrying value of the impaired asset exceeds the discounted cash flows expected to result from the use and eventual disposal of the impaired assets.

Derivative Financial Instrument: The Company evaluates its convertible debt, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be accounted for. The result of this accounting treatment is that under certain circumstances the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value measurement is recorded in the statement of operations as other income or expense. Upon conversion or exercise of the convertible note containing an embedded derivative instrument is marked to fair value at the conversion date and that the fair value is reclassified to equity. The shares issued upon conversion of this note are recorded at their fair value with a gain or loss recognition as applicable.

Equity instruments that are initially classified as equity that become subject to reclassification under this accounting standard are reclassified to liabilities at the fair value of the instruments on the reclassification date/

Share-Based Compensation: We record share-based compensation in accordance with FASB ASC 718, Stock Compensation. FASB ASC 718 requires that the cost resulting from all share-based transactions are recorded in the financial statements over the respective service periods. It establishes fair value as the measurement objective in accounting for share-based payment arrangements and requires all entities to apply a fair-value-based measurement in accounting for share-based payment transactions with employees. FASB ASC 718 also establishes fair value as the measurement objective for transactions in which an entity acquires goods or services from non-employees in share-based payment transactions.

Off-Balance Sheet Arrangements

We have not entered into any transaction, agreement or other contractual arrangement with an entity unconsolidated with us under whom we have:





    ?   An obligation under a guarantee contract.
    ?   A retained or contingent interest in assets transferred to the
        unconsolidated entity or similar arrangement that serves as credit,
        liquidity or market risk support to such entity for such assets.
    ?   Any obligation, including a contingent obligation, under a contract that
        would be accounted for as a derivative instrument.
    ?   Any obligation, including a contingent obligation, arising out of a
        variable interest in an unconsolidated entity that is held by us and
        material to us where such entity provides financing, liquidity, market
        risk or credit risk support to, or engages in leasing, hedging or research
        and development services with us.

We do not have any off-balance sheet arrangements or commitments that have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material, other than those which may be disclosed in this Management's Discussion and Analysis of Financial Condition and the audited Consolidated Financial Statements and related notes.

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