SNYRQ 10-K & 10-Q changes, risk factors and insider trading

An investment in our common stock involves a high degree of risk. You should carefully consider the following risks and all of the other information contained in this Annual Report before deciding whether to invest in our common stock. If any of the following risks are realized, our business, financial condition andcondition, results of operations and cash flows could be materially and adversely affected. In that event, the trading price of our common stock could decline, and you could lose all or part of your investment in our common stock. Additional risks of which we are not presently aware or that we currently believe are immaterial may also harm our business andbusiness, results of operations.operations and cash flows. Some statements in this Annual Report, including such statements in the following risk factors, constitute forward-looking statements. See the section entitled “Cautionary Note Regarding Forward-Looking Statements.”

The U.S. nutritional supplements supplements retail industry is a large and highly fragmented industry with few barriers to entry. We compete against other domestic and international international manufacturers, specialty retailers, mass merchants, multi-level marketing organizations, mail-order and direct-to-consumer companies, and e-commerce companies. This market is highly sensitive to the introduction of new products, which may rapidly capture a significant share of the market. As certain products become more mainstream, with broader distribution, we may experience increased competition for those products. Increased competition from companies that distribute through retail, e-commerce or wholesale channels could have a material adverse effect on our financial condition andcondition, results of operations.operations and cash flows. Certain of our competitors may have significantly greater greater financial, technical and marketing resources than we do, and may be able to adapt to changes in consumer preferences more quickly, devote devote greater resources to the marketing and sale of their products, or generate greater brand recognition. In addition, our competitors may may be more effective and efficient in introducing new products. Furthermore, if we fail to maximize the efficiency of our ship direct to to customers strategies, or fail to provide our customers with an attractive omni-channel experience, our business andbusiness, results of operations and cash flows could be materially and adversely affected. We may not be able to compete effectively, and any of the factors listed above may cause price reductions, reduced margins and losses of our market share.

Our failure to appropriately respond to changing consumer preferences and demand for new products or product enhancements could significantly harm our relationship with customers and our product sales, as well as our financial conditioncondition, operating results and operatingcash results.flows.

If we do not introduce new products or make enhancements to meet the changing needs of our customers in a timely manner, some of our products could be rendered obsolete, which could negatively impact our revenues, financial condition, operating results and operatingcash results.flows.

Certain retailers make up a a significant percentage of our products’ retail volume. For the year ended December 31, 2024,2025, our top two customers accounted for 73%79% of our net revenue. For the year ended December 31, 2023,2024, our top threetwo customers accounted for 78%73% of our netrevenue. revenue. We sell products to our customers under their standard vendor agreements. These vendor agreements do not include a term or duration as sales under each vendor agreement are generally made on a purchase order basis, and do not include any termination provisions. The loss of sales of any of our products in a major retailer, or the reduction of purchasing levels or the cancellation of any business from a major retailer, could have a material adverse effect on our business and financial performance. In addition, if we were to lose one or more of these retailers as a distribution channel for our products, we can make no assurances that we will be able to find a comparable retailer to replace such relationship or that we will be able to find a replacement at all, which could negatively impact our revenues, financial condition, and operating results.

A downturn in the economy, economy could affect consumer purchases of discretionary items such as the health and wellness products that we offer, which could have an adverse effect on our business, financial condition, profitability, and cash flows.

As part of our growth strategy, we have a history of pursuing acquisitions of companies with products that are similar or complementary to those that we provide in our businesses to better leverage our existing, scalable infrastructure, and may continue to pursue this strategy in the future. These acquisitions may involve significant cash expenditures, debt incurrence, additional operating losses and expenses, and compliance risks that could have a material adverse effect on our financial condition and condition, results of operations.operations and cash flows.

In addition, these acquisitions involve risks that the acquired businesses will not perform in accordance with expectations, that we may become liable for unforeseen financial or business liabilities of the acquired businesses, including liabilities for failure to comply with healthcare regulations, that the expected synergies associated with acquisitions will not be achieved, and that business judgments concerning the value, strengths, and weaknesses of businesses acquired will prove incorrect, which could have a material adverse effect on our financial conditioncondition, results of operations and results ofcash operations.flows.

The nutritional supplement industry increasingly relies on intellectual property rights and although we seek to ensure that we do not infringe the intellectual property rights of others, there can be no assurance that third parties will not assert intellectual property infringement claims against us, which claims may result in substantial costs and diversion of management and other resources and could have a material adverse effect on our business, financial conditioncondition, operating results and operatingcash results.flows. Our inability to acquire, protect or maintain our intellectual property could harm our ability to compete or grow.

Recently it has become more and more common for suppliers and competitors to apply for patents or develop proprietary technologies and processes. We seek to ensure that we do not infringe the intellectual property rights of others, but there can be no assurance that third parties will not assert intellectual property infringement claims against us. These developments could prevent us from offering or supplying competitive products or ingredients in the marketplace. They could also result in litigation or threatened litigation against us related to alleged or actual infringement of third-party rights. If an infringement claim is asserted or litigation is pursued, we may be required to obtain a license of rights, pay royalties on a retrospective or prospective basis or terminate our manufacturing and marketing of our products that are alleged to have infringed. Litigation with respect to such matters could result in substantial costs and diversion of management and other resources and could have a material adverse effect on our business, financial condition andcondition, results of operations.operations and cash flows.

We have one U.S. patent (which expires in April 2025) and numerous U.S. and foreign trademarks and service marks. There can be no assurance that the protection afforded by the patent and these trademarks and service marks will provide us with a competitive advantage or that we will be able to assert our intellectual property rights in infringement actions. We may be required to defend our intellectual property against such infringement, which could result in substantial costs and diversion of management and other resources. In addition, results of such litigation are difficult to predict and if we are not successful in defending our intellectual property rights, this could have a material adverse effect on our business, financial condition andcondition, results of operations.operations and cash flows.

Trade secrets are difficult to protect. We rely on trade secrets to protect our proprietary knowledge, especially where we do not believe patent protection is appropriate or obtainable, or where such patents would be difficult to enforce. We rely in part on confidentiality agreements to protect our trade secrets and other proprietary knowledge. We cannot guarantee that we have entered into such agreements with each party that may have had access to our proprietary knowledge, or that such agreements, even if in place, will not be circumvented. These agreements may not effectively prevent disclosure of proprietary knowledge and may not provide an adequate remedy in the event of unauthorized disclosure of such information. In addition, others may independently discover our trade secrets and proprietary knowledge, in which case we may have no right to prevent them from using such trade secrets or proprietary knowledge to compete with us. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could materially adversely affect our business, financial condition andcondition, results of operations.operations and cash flows.

We may experience product recalls, withdrawals or seizures, which could materially and adversely affect our business, financial condition andcondition, results of operations.operations and cash flows.

We may be subject to product recalls, withdrawals or seizures if any of the products we sell are believed to cause injury or illness or if we are alleged to have violated governmental regulations in the manufacturing, labeling, promotion, sale or distribution of those products. A significant recall, withdrawal or seizure of any of the products we manufacture or sell may require significant management attention, would likely result in substantial and unexpected costs and may materially and adversely affect our business, financial condition or results of operations. Furthermore, a recall, withdrawal or seizure of any of our products may adversely affect consumer confidence in our brands and thus decrease consumer demand for our products. As is common in the nutritional supplements industry, we rely on our contract manufacturers and suppliers to ensure that the products they manufacture and sell to us comply with all applicable regulatory and legislative requirements. In general, we seek representations and warranties, indemnification and/or insurance from our contract manufacturers and suppliers. However, even with adequate insurance and indemnification, any claims of non-compliance could significantly damage our reputation and consumer confidence in our products. In addition, the failure of those products to comply with applicable regulatory and legislative requirements could prevent us from marketing the products or require us to recall or remove such products from the market, which in certain cases could materially and adversely affect our business, financial condition andcondition, results of operations.operations and cash flows.

Increases in the price or shortages of supply of key raw materials could materially and adversely affect our business, financial condition andcondition, results of operations.operations and cash flows.

Our products are composed of of certain key raw materials. If the prices of these raw materials were to increase significantly, it could result in a significant increase to us in the prices charged to us. Raw material prices may increase in the future, and we may not be able to pass on those increases to customers who purchase our products. A significant increase in the price of raw materials that cannot be passed on to customers could have a material adverse effect on our business, financial condition andcondition, results of operations.operations and cash flows.

We are exposed to credit risk risk primarily on our accounts receivable. We provide credit to our customers in the ordinary course of our business and perform ongoing credit credit evaluations. While we believe that our exposure to concentrations of credit risk with respect to accounts receivable is mitigated by our large retail partner base, and we make allowances for doubtful accounts, we nevertheless run the risk of our customers not being able able to meet their payment obligations, particularly in a future economic downturn. If a material number of our customers were not able to to meet their payment obligations, our results of operations and cash flows could be harmed.

Natural disasters and unusually adverse weather conditions could cause permanent or temporary damage to our distribution centers, impair our ability to purchase, receive or replenish inventory or cause customer traffic to decline, all of which could result in lost sales and otherwise materially and adversely affect our results of operations.operations and cash flows.

The occurrence of one or more more natural disasters, such as hurricanes, fires, floods, earthquakes, tornadoes, high winds and other severe weather, could materially and and adversely affect our operations andoperations, results of operations.operations and cash flows. To the extent these events result in the suspension of shipping by our distributors, closure of our corporate headquarters, or a significant number of the stores in which our products are sold, or to the extent they adversely affect one or more of our key suppliers, our operations and results of operations could be materially and adversely affected through an inability to make deliveries to stores and through lost sales. In addition, these events could result in increases in fuel (or other energy) prices or a fuel shortage, the temporary lack of an adequate work force in a market, the temporary or long-term disruption in the supply of products from suppliers, delay in the delivery of goods to our distribution centers or stores, the temporary reduction in the availability of products in our stores and disruption to our information systems, as noted above. These events also could have indirect indirect consequences, such as increases in the cost of insurance, if they were to result in significant loss of property or other insurable damage.

We rely on services and products provided by many vendors in the United States and abroad. These include, for example, outsourcing of manufacturing services. In the event that any vendor suffers a bankruptcy or otherwise becomes unable to continue to provide products or services, or fails to protect our confidential, proprietary, or other information, we may suffer operational impairments and financial losses. In addition, while we generally monitor vendor risk, including the security and stability of our critical vendors, we may fail to properly assess and understand the risks and costs involved in the third-party relationships, and our financial condition andcondition, results of operations and cash flows could be materially and adversely affected.

Omni-channel retailing is rapidly evolving, and we must keep pace with changing customer expectations and new developments by our competitors. Our customers are increasingly using computers, tablets, mobile phones, and other devices to shop online. As part of our omni-channel strategy, we have made and will continue to make technology investments to expand our online distribution. If we are unable to make, improve, or develop relevant customer-facing technology in a timely manner, our ability to compete and our business and results of operations could be materially and adversely affected. In addition, if our e-commerce businesses or our other customer-facing technology systems do not function as designed, we may experience a loss of customer confidence, lost sales, or data security breaches, any of which could materially and adversely affect our business andbusiness, results of operations.operations and cash flows.

Our success depends, in a large large degree, on the skills of our management team and our ability to retain, recruit and motivate key officers and employees. Our active senior senior executive leadership team, including Jack Ross,Ross and Jaime Fickett and Alfred Baumeler,Fickett, have significant experience, and their knowledge and relationships relationships would be difficult to replace. Leadership changes will occur from time to time, and we cannot predict whether significant resignations resignations will occur or whether we will be able to recruit additional qualified personnel. Competition for senior executives and skilled personnel personnel in our industry is intense, which means the cost of hiring, paying incentives and retaining skilled personnel may continue to increase.

We need to continue to attract and retain key personnel and to recruit qualified individuals to succeed existing key personnel to ensure the continued growth and successful operation of our business. In addition, we must attract and retain qualified personnel to continue to grow our business, and competition for such personnel can be intense. Our ability to effectively compete for senior executives and other qualified personnel by offering competitive compensation and benefit arrangements may be restricted by cash flow and other operational restraints. The loss of the services of any senior executive or other key personnel, or the inability to recruit and retain qualified personnel in the future, could have a material adverse effect on our business, financial condition orcondition, results of operations.operations and cash flows. In addition, to attract and retain personnel with appropriate skills and knowledge to support our business, we may offer a variety of benefits, which could reduce our earnings or have a material adverse effect on our business, financial condition orcondition, results of operations.operations or cash flows.

Congress and/or regulatory agencies may impose additional laws or regulations or change current laws or regulations, and state attorneys general may increase enforcement of existing existing or new laws, and compliance with new or changed governmental regulations, or any state attorney proceeding, could increase our costs significantly and materially and adversely affect our business, financial condition andcondition, results of operations.operations and cash flows.

From time to time, Congress, the FDA, the FTC, or other federal, state, local or foreign legislative and regulatory authorities may impose additional laws or regulations that apply to us, repeal laws or regulations that we consider favorable to us or impose more stringent interpretations of current laws or regulations. We are not able to predict the nature of such future laws, regulations, repeals or interpretations or to predict the effect that additional governmental regulation, when and if it occurs, would have on our business in the future. Those developments could require reformulation of certain products to meet new standards, recalls or discontinuance of certain products (including products that we sell) not able to be reformulated, additional record-keeping requirements, increased documentation of the properties of certain products, additional or different labeling, additional scientific substantiation, adverse event reporting or other new requirements. For example, in recent years, the FDA has issued warning letters to several cosmetic companies alleging improper claims regarding their cosmetic products. If the FDA determines that we have disseminated inappropriate drug claims for our products intended to be sold as cosmetics, we could receive a warning or untitled letter, be required to modify our product claims or take other actions to satisfy the FDA. Any developments of this nature could increase our costs significantly and could have a material adverse effect on our business, financial condition andcondition, results of operations.operations and cash flows.

The FTC has instituted numerous enforcement actions against dietary supplement companies for failure to have adequate substantiation for claims made in advertising or for the use of false or misleading advertising claims. Failure by us to comply with applicable regulations could result in substantial monetary penalties, which could have a material adverse effect on our financial condition orcondition, results of operations.operations or cash flows.

Even when unmerited, class claims, action by the FTC or state attorneys general enforcement actions can be expensive to defend and adversely affect our reputation with existing and potential customers and consumers and our corporate and brand image, which could have a material and adverse effect on our business, financial condition orcondition, results of operations.operations or cash flows. The number of private consumer class actions relating to false or deceptive advertising against nutritional supplement companies has increased in recent years. In addition, the FDA has aggressively enforced its regulations with respect to different types of product claims that may or may not be made for food products. These events could interrupt the marketing and sales of our products, severely damage our brand reputation and public image, increase our legal expenses, result in product recalls or litigation, and impede our ability to deliver our products in sufficient quantities or quality, which could result in a material adverse effect on our business, financial condition, results of operations and cash flows.

If we fail to protect the integrity and security of customer-related and other confidential information, we could be exposed to litigation, increased costs and reputational damage, and our business, results of operationsoperations, cash flows and financial condition could be materially and adversely affected.

The use of individually identifiable data by us, our customers, and others is regulated at the state, federal and international levels. Privacy and information security laws and regulations change from time to time, and there may not always be clear guidance from the respective governments and regulators regarding the interpretation of these laws and regulations, which may create the risk of an inadvertent violation. In addition, the increasing costs of compliance with those laws and regulations and related technology investments could materially and adversely affect our businessbusiness, results of operations and results ofcash operations.flows. Additionally, the success of our e-commerce operations depends upon the secure transmission of confidential information over public networks, including the use of cashless payments, and we use computers in substantially all other aspects of our business operations. Such uses give rise to cybersecurity risks, including security breach, espionage, system disruption, theft and inadvertent release of information. While we have taken significant steps to protect customers’ personal information, consumer preferences and credit card information, and other confidential information, including our employees’ private information and financial and strategic data about the Company and our business partners, our suppliers or others may undermine our security measures. As a result, unauthorized parties may obtain access to our data systems and misappropriate confidential data. Furthermore, because the methods used to obtain unauthorized access change frequently and may not be immediately detected, we may be unable to anticipate these methods or implement preventative measures, and our incident response efforts may not be entirely effective. Any preventative measures we implement may have the potential to negatively affect our relations with our customers or decrease activity on our websites or apps by making them less user-friendly. If our data security is compromised, it could have a material adverse effect on our reputation, results of operationsoperations, cash flows and financial condition, materially increase the costs we incur to protect against those events in the future and subject us to additional legal risk and a competitive disadvantage disadvantage and damage to our brand reputation. In addition, our customers could lose confidence in our ability to protect their personal information, information, which could cause them to stop using our websites or apps. We are reliant on third-party electronic payment systems and platforms, such as PayPal, Stripe, Amazon Pay, AfterpayAfterpay, Tik-Tok and Shopify Payments, not only to protect the security of the information stored, but also to appropriately track and record data. Any failures or inadequacies in these third-party systems, even if unrelated to our business, could result in significant liability, could materially and adversely affect our reputation and business and could cause government agencies to enact additional regulatory requirements or to modify their enforcement or investigation activities.

U.S. generally accepted accounting principlesGAAP and related pronouncements, implementation guidelines and interpretations with regard to a wide variety of matters that are relevant to our business, such as, but not limited to, revenue recognition, stock-based compensation, trade promotions, and income taxes are highly complex and involve many subjective assumptions, estimates and judgments by our management. Changes to these rules or their interpretation or changes in underlying assumptions, estimates or judgments by our management could significantly change our reported results.

In addition, if the market for stocks in our industry or the stock market, in general, experience a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, results of operations, or financial condition. The trading price of our common stock might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. If our stock price is volatile, we may become the target of securities litigation. Securities litigation could result in substantial costs and divert our management’s attention and resources from our business. This could have a material adverse effect on our business, results of operations, cash flows and financial condition.

We currently intend to retain our future earnings, if any, for the foreseeable future, to repay indebtedness and to fund the development and growth of our business. We do not intend to pay any dividends to holders of our common stock in the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of our Board taking into accountconsidering various factors, including our business, operating results and financial condition, current and anticipated cash needs, plans for expansion, any legal or contractual limitations on our ability to pay dividends under our loan agreements or otherwise. As a result, if our Board does not declare and pay dividends, the capital appreciation in the price of our common stock, if any, will be your only source of gain on an investment in our common stock, and you may have to sell some some or all of your common stock to generate cash flow from your investment.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the auditedconsolidated condensed consolidated financial statements and the notes thereto contained elsewhere in this Annual Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.

Our management’s discussion and analysis of our financial condition and results of operations are only based on our current business and should be read in conjunction with our unaudited interim condensed consolidated financial statements and audited consolidated financial statements and accompanying notes thereto included elsewhere in this prospectus.Annual Report. Key factors affecting our results of operations include revenues, cost of revenue, operating expenses and income and taxation.

We believe that EBITDA, viewed in addition to, and not in lieu of, our reported results in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”),GAAP, provides useful information to investors.

EBITDA is considered a non-GAAP financial measures.measure. EBITDA represents earnings before interest, taxes, depreciation and amortization. Our definition of EBITDA might not be comparable to similarly titled measures reported by other companies.

For the year ended December 31, 2024, 2025, our cost of sales was $11,191,224. $10,077,992. Our cost of sales for the year ended December 31, 20232024 was $10,697,323.$11,191,224. The increasedecrease in cost of sales was primarily due to alower settlement with a supplier in 2023 resulting in a reduction in cost of sales for 2023.revenue.

Gross profit was $23,643,019,$20,302,817, or 68%67% of revenue for the year ended December 31, 2024,2025, as compared to gross profit of $32,080,310$23,643,019 or 75%68% of revenue for the same period in 2023,2024, a decrease of $8,437,291$3,340,202 or 26%.14%. The decrease in gross profit is largely related to thelower decrease in net sales due to the rebranding of FOCUSfactor.revenue.

For the year ended December 31, 2024, 2025, our selling and marketing expenses were $12,991,431$13,137,779 as compared to $15,188,528$12,991,431 for the year ended December 31, 2023.2024. The decrease increase is duerelated to managementthe mix of advertising expenses.utilized.

For both the yearyears ended December 31, 2025 and 2024, our depreciation and amortization expenses were $133,334 as compared to $33,333 for the year ended December 31, 2023. The increase is due to full year of amortization on license fee during 2024.$133,334.

The increasedecrease in other income in 20242025 iswas related to Employee Retention Credits and an insurance claim on stolen goods.goods from 2024 that did not repeat. The decreaseincrease in interest expense in 20242025 was primarily due to reductionan inadvance interesttaken, rateshares uponissued related to the modification of notes payable and the amortization of original debt discount on the May 2025 loan. The gain on settlement of notes payable relates to discounts negotiated on loan payoffs consolidation.during 2025.

Net Income (Loss)

For the year ended December 31, 2024,2025, our net incomeloss was $2,124,976.$12,341,208. For the year ended December 31, 20232024 our net income was $6,338,750.$2,124,976. This decrease was due to lower revenuerevenue, duehigher toexpenses, undertakingthe awrite rebrandingoff of other receivables and packagingthe upgradewrite foroff FOCUSfactor that resulted in customers selling through their existing inventory before bringing inof the newloan packaging.receivable.

As of December 31, 2024,2025, we we had $687,920$2,622,313 cash onand handcash equivalents and restricted cash of $100,000 which is held for credit card collateral.

On February 10, 2022, we entered into a promissory note for $2,000,000 with an individual which was to be repaid with subsequent financing. On March 31, 2024, we entered into a Modification Agreement in relation to this loan. Effective March 31, 2024, the interest rate is 12%, compounded quarterly. Cash payments of interest shall be made monthly, on the final day of each month commencing in April 2024. We are required to make principal payments of $1,000,000 each quarter starting from March 31, 2025 until December 31, 2025. The remaining principal and unpaid interest is fully due on March 31, 2026. In addition, a loan renegotiation fee of $500,000 shall be earned and and payable on March 31, 2026 or at such time the loan is paid in full. Upon closing of a sale transaction, as defined in the agreement, a bonus success fee of $1,800,000 will be earned and payable. An event of default, as defined in the agreement, will trigger a default interest rate increase by 5% to 17%. An incentive fee of a maximum of $563,092 will be paid, prorated if the loan is paid off early. If the loan is not repaid by March 31, 2026, Jack Ross, majority shareholder, shall grant warrants covering 10% of his stock struck at $0.12 per share. There is a cross-default clause in the agreement which states that if Knight triggers an event of default on its own loan facility, this loan will also be under default. This Agreement consolidates this $2,000,000 loan and the $6,000,000 March 8, 2022 loan as detailed below.

On March 8, 2022, we entered into Securities Purchase Agreements with debenture holders for the Senior Subordinated Debentures in the amount of $6,000,000 $6,000,000 with an original maturity date of September 8, 2022 and warrants equal to the principal amount with a term of 3 years. The Senior Subordinated Debentures were modified on June 14, 2023 inand conjunctionconsolidated with the promissory note.note dated February 10, 2022. The modification included the exercise of $1.5a million on$1,500,000 cash payment in lieu of the exercise of warrants. Pursuant to ASC 480 warrants were liability liability classified and we accrued the warrant liability of $1.5 million$1,500,000 on March 8, 2022, the date of issuance. Upon On September 8, 2022, the date of exercise of the warrants, we offset this warrant liability and added the $1.5$1,500,000 million balance to the Senior Subordinated Debentures, for a combined outstanding balance of $7.5 million.$7,500,000. The terms of the warrants were, at the sole option of the holder, to convert the warrant at a 25% discount in the event we consummated an IPO, a cash option whereby the holder could convert the warrants at a cash value of $1.5 million $1,500,000 or convert the warrants into the private entity valued by an independent third-party appraiser. On March 31, 2024, we entered into a Modification Agreement in relation to this loan, which consolidates it with the $2,000,000 February 10, 2022 loan above.

On December 5,November 2024,12, 2025, we entered into a cash advance agreement of $800,000$3,024,000 with Cedar Advance LLC for an advancement of working capital.capital via the sale of receivables. We received $760,000$2,000,000 and recorded $40,000$1,024,000 as interestoriginal expense.issue discount. The loan bears a repayment rate of $41,100$84,000 per week. In conjunction with the advance, we issued 52,000 shares of common stock to the consultant who facilitated the facility and thus recognized $103,220 as financing cost. We recognized total interest expense of $136,000$349,435 as of December 31, 2024.2025. The outstanding loan balance at December 31, 20242025 was $0.$1,658,215.

As of the date of filing of this filing, Annual Report, we are in compliance with allthe of thematerial terms, conditions and covenants associatedapplicable withto theour loanoutstanding agreementsdebt described above.arrangements.

For the year ended December 31, 2024,2025, we had net cash used in operating activities of $4,803,390$2,585,022 as compared to $421,729$4,803,390 of net cash providedused byin operating activities for for the year ended December 31, 2023.2024. The decrease was primarily due to increasesdecreases in accounts receivablereceivable, other receivables and prepaidrelated party expensesloan and a decrease of accounts payable and accrued liabilities.receivable.

For the year ended December 31, 2024, 2025, net cash provided by financing activities was $4,804,086,$4,654,664, as compared to $2,090,782$4,804,086 usedprovided inby financing activities for the year ended December 31, 2023.2024. The increase decrease was attributable to the issuance of common stock and proceeds from notes payable offset by repayment on notes payable.

We recognize revenue upon shipment shipment from our fulfillment centers. Certain of our distributors may also perform a separate function as a co-packer on our behalf. In such cases, ownership of and title to our products that are co-packed on our behalf by those co-packers who are also distributors, passes to such distributors when we are notified by them that they have taken transfer or possession of the relevant portion of our finished goods. Freight billed to customers is presented as revenues, and the related freight costs are presented asin costselling ofand goodsmarketing sold. expense. Cancelled orders are refunded if not already dispatched, refunds are only paid if stock is damaged in transit, discounts are only offered with specific promotions and orders will be refilled if lost in transit. We recognize revenue for our digital products in the month the download by the customer occurs.

As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Quarterly Report. However, as of the date of this Quarterly Report, there have been no material changes with respect to those risk factors previously disclosed in the “Risk Factors” section of the Prospectus.Annual Report. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

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 expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. 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 performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, statements, please refer to the Risk Factors section of our finalAnnual prospectusReport foron ourForm initial public offering10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on October 23,April 20241, 2026 (the “ProspectusAnnual Report”) and the “Risk Factors” section of this report.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.

We are a provider of consumer health care, beauty, and lifestyle products. Our current brand portfolio consists of two core brands: FOCUSfactor, a clinically-tested brain health supplement (this study was performed independently and is not related to any FDA-approved Investigational New Drug application) that has been shown to improve memory, concentration and focusfocus, and Flat Tummy, a lifestyle brand that provides a suite of nutritional products to help women achieve their weight management goals.

EBITDA is considered a non-GAAP financial measures.measure. EBITDA represents earnings before interest, taxes, depreciation and amortization. Our definition of EBITDA might not be comparable to similarly titled measures reported by other companies.

Results of Operations for the Three Months Ended SeptemberMarch 30,31, 20252026 and SeptemberMarch 30,31, 20242025

During both the three months ended SeptemberMarch 30,31, 20252026 and 2024,2025, we focused on developing our currently owned brands into new markets and by product extensions. Our objective objective is to grow our two targeted verticals (Nutraceuticals and Ready To Drinks (RTDs)) to provide a balanced and synergistic portfolio that that drives consumer demand via multiple channels. Our Nutraceuticals vertical consists of FOCUSfactor, including RTDs, and Flat Tummy consumables.

For the three months ended SeptemberMarch 30,31, 2025,2026, we had revenue of $8,010,112$5,492,705 from sales of our productsproducts, as compared to revenue of $7,126,333$8,170,534 for the three months ended SeptemberMarch 30,31, 2024.2025. The revenue is comprised of the following categories:

For the three months ended SeptemberMarch 30,31, 2025,2026, our cost of revenue was $2,329,296.$1,521,910. Our cost of revenue for the three months ended SeptemberMarch 30,31, 2024,2025, was $2,335,901.$2,006,513. The decrease in cost of sales was primarily due to productthe mixdecrease sold.in revenue.

Gross profit was $5,680,816,$3,970,795, or 71%72% of revenue, for the three months ended SeptemberMarch 30,31, 2025,2026, as compared to gross profit of $4,790,432,$6,164,021, or 67%75% of revenue, for the the same period in 2024,2025, ana increasedecrease of $890,384,$2,193,226, or 19%.36%. The increasedecrease in gross profit is directly related to the productlicense mixrevenue sold.in 2025.

For the three months ended SeptemberMarch 30,31, 2025,2026, our selling and marketing expenses were $2,729,767$2,455,732 as compared to $2,509,440$2,876,271 for the three months ended SeptemberMarch 31, 30, 2024,2025, which is anprimarily immaterialdue increase.to lower revenue.

For both the three months ended ended SeptemberMarch 30,31, 2026 and 2025, our depreciation and amortization expenses were $33,333 as compared to $33,333 for the three months ended September 30, 2024.$33,333.

For the three months ended SeptemberMarch 30,31, 20252026 and 20242025 we had other income and expense items as follows:

For the three months ended SeptemberMarch 30,31, 2025,2026, we had net interest expense of $1,164,402$2,012,121 as compared to $705,088$1,095,369 for the three months ended SeptemberMarch 30,31, 2024.2025. The The increase is primarily due to thean advance taken and the amortization of original debt discount on the newMay 2025 loan.

For the three months ended SeptemberMarch 30,31, 2025,2026, our net incomeloss was $125,327$2,568,899 as compared to a net income of $783,593$876,264 for the three months ended SeptemberMarch 30, 202431, 2025 due to otherlower income in 2024 and higher expenses in 2025.revenue.

As of SeptemberMarch 30,31, 2025,2026, we had had $1,006,489$292,115 cash on hand and restricted cash of $100,000 which is held for credit card collateral.

For the ninethree months ended ended SeptemberMarch 30,31, 2025,2026, net cash used in operating activities was $3,209,149$2,044,678 compared to net cash used in operating activities of $1,377,479$822,781 for the ninethree months ended SeptemberMarch 30,31, 2024.2025. This increase in net cash used by operating activities for the ninethree months ended SeptemberMarch 30,31, 20252026 iswas detailedprimarily attributable to a decrease in thenet table below.income.

For the ninethree months ended SeptemberMarch 30,31, 2025,2026, net cash used in operating activities of $3,209,149$2,044,678 consisted of our net incomeloss of $2,474,827$2,568,899 adjusted by:

For the ninethree months ended SeptemberMarch 30,31, 2024,2025, net cash used in operating activities of $1,377,479$822,781 consisted of our net income of $2,019,309$876,264 adjusted by:

For the ninethree months ended March September 30,31, 20252026 and 2024,2025, we used net cash of $0 in investing activities.

For the ninethree months ended SeptemberMarch 30,31, 2025,2026, net cash providedused byin financing activities was $3,515,856$307,600 compared to net cash provided by financing activities of $895,972 $314,678 for the ninethree months ended SeptemberMarch 30,31, 2024.2025. The increasedecrease was attributable to newdecreased loans.proceeds of notes.

Financing activities during the ninethree months ended SeptemberMarch 30,31, 20252026 and 20242025:

During the ninethree months ended SeptemberMarch 30,31, 2025,2026, and during the year ended December 31, 2024,2025, we had no off-balance sheet arrangements.

The effect of inflation on our operating results was not significant in the ninethree months ended SeptemberMarch 30,31, 20252026 or 2024.2025.