Overview

The Company's consolidated financial statements are prepared in accordance with GAAP. The consolidated financial statements include the accounts of all subsidiaries in which the Company holds a controlling financial interest as of the financial statement date.





Results of Operations

Results of Operations during the year ended December 31, 2022, as compared to the year ended December 31, 2021.

Our net revenue for the year ended December 31, 2022, was $6,077,080, compared to $8,491,651 for the same period in 2020. The decrease in revenue is due to a downtime while the Company increased capacity by building out additional manufacturing space and equipment and a general slowdown of business in the fourth quarter of 2022, and integration challenges from the Company's recent acquisition.






          8

  Table of Contents

Our cost of goods sold for the year ended December 31, 2022, was $3,849,002, compared to $4,708,195 for the same period in 2021. The increase in cost of goods is directly correlated with the growth in revenue.

Our general and administrative expense for the year ended December 31, 2022, was $1,548,748, compared to $897,335 for the same period in 2021. This increase was mainly due to 2022 ramping up to increased production expectations in 2022 and 2023.

Our salaries expense for the year ended December 31, 2022, was $1,799,199, compared to $1,576,544 for the same period in 2021. This increase was mainly due to 2022 ramping up to increased production expectations in 2022 and 2023.

Our rent expense for the year ended December 31, 2022, was $528,570, compared to $422,527 for the same period in 2021. This increase was mainly due to rent rate increase in 2022.

Our Utilities expense for the year ended December 31, 2022, was $142,260, compared to $120,414 for the same period in 2021.

Our professional fees expense for the year ended December 31, 2022, was $320,800, compared to $1106,750 for the same period in 2021. This increase was mainly due to increased acquisition effort in 2022.

Our consulting expense for the year ended December 31, 2022, was $997,824 compared to $721,862for the same period in 2020. This increase was mainly due to increased acquisition effort in 2022.

Our depreciation expense for the year ended December 31, 2022, was $439,043, compared to $381,169 for the same period in 2021. This was mainly due to the increase in Capital equipment expenditures.

Our bad debt expense for the year ended December 31, 2022, was $60,879, compared to $80,000 for the same period in 2021.

Our share-based expense for the year ended December 31, 2022, was $531,119, compared to $277,333 the same period in 2020. This increase was mainly due to the adoption of our stock option plan.

Our gain on debt settlement for the year ended December 31, 2022, was $0, compared to $312,583 for the same period in 2021. This increase was due to the forgiveness of our PPP loan in 2021.

Our other income for the year ended December 31, 2022, was $0, compared to $84,628 for the same period in 2021.

Our financing fees expense for the year ended December 31, 2022, was $6,888,643, compared to $1,273,507 for the same period in 2021. This increase was mainly due to the issuance of warrants and OID on the notes payable.

Our Interest expense for the year ended December 31, 2022, was $965,875, compared to $252,453 for the same period in 2021. This increase was mainly due to the company borrowing capital to grow the business.

Our net loss for the year ended December 31, 2022, was $13,774,165 compared to $2,011,327 for the same period in 2021. This increase was mainly due to the factors listed above.






          9

  Table of Contents

Liquidity and Capital Resources

As of December 31, 2022, the Company current assets of $2,444,370 and total assets of $26,010,888. As of December 31, 2021, the Company current assets of $1,513,667 and total assets of $4,007,465.

As of December 31, 2022, the Company current liabilities of $27,181,835 and total Liabilities of $27,331,835 As of December 31, 2021, the Company current liabilities of $5327,491 and total liabilities of $5,577,014.

The following table summarizes our cash flows for the fiscal years ended December 31, 2022, and December 31, 2021:





                                                          2022            2021

Net cash provided (used) from operating activities $ (6,325,707 ) $ (98,519 )


 Net cash used in investing activities                     (24,230 )      (798,299 )
 Net cash provided by financing activities               6,079,422       1,095,128
 Net Increase (Decrease) In Cash                      $   (270,515 )   $   198,310




Going Concern

Our operating losses and lack of operating capital create substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on its ability to obtain capital from our affiliates to fund our operations, generate cash from the sale of its securities and attain future profitable operations. Management's plans include selling its equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no assurance the Company will be successful in these efforts.

Off-Balance Sheet Arrangement

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.





Contractual Obligations

As a "smaller reporting company," as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.

© Edgar Online, source Glimpses