Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

ITEM 2Management's Discussion and Analysis of Financial Condition and Results of Operations

Our Management's Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

Although the forward-looking statements in this Quarterly Statement reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

The following discussion and analysis of financial condition and results of operations of the Company is based upon, and should be read in conjunction with, its unaudited financial statements and related notes elsewhere in this Form 10-Q, which have been prepared in accordance with accounting principles generally accepted in the United States.

Overview

Since our acquisitions of Bergamet and UBN, we have focused on increasing revenue, maintaining our margins, and generating positive cash flow from our existing operations. In part, at least with respect to Bergamet and UBN, we have been successful in meeting these objectives and our business has remained relatively unchanged. In October 2025, we acquired GummyUSA, and in May 2026 we acquired Adli Gummies Inc. (dba Imaraïs Beauty), which accelerated our revenue growth and increased our gross profit.

We are a platform for acquiring, developing, patenting, marketing, and distributing plant-based nutraceuticals. Our proprietary and patented products target select high-growth categories within the multibillion-dollar nutraceuticals market, such as heart, brain and immune health. Our products have not been evaluated by the FDA or any similar regulatory body for safety and efficacy. Our mission is to acquire or create products with health and performance benefits that have mass consumer appeal. GummyUSA added contract manufacturing and formulation services to our offering, while Adli Gummies added a full line of functional beauty and wellness gummies, and as a result we now operate at the intersection of nutraceutical manufacturing, drug delivery innovation, and precision formulation technologies.

Guided by this mission, our first two acquisitions (in 2019 and 2020, respectively) formed our historical operating subsidiaries, BergaMet NA, LLC, which offers nutraceutical heart and immune health products, and UBN, which offers nutraceutical products for brain health. Our GummyUSA acquisition (in 2025), which is operated as our subsidiary HE Gummy USA, Inc., added technical capabilities and a manufacturing architecture to support our own needs as well as those of third-parties. Our most recent acquisition, Adli Gummies Inc. (dba Imaraïs Beauty) added beauty and wellness gummies for skincare, haircare, and women's wellness. The brand's proprietary 'ingestible beauty' formulations and stylistic packaging create a unique consumer experience unique on the market today.

Our Financial Condition and Going Concern Issues

Our net loss from inception to December 31, 2025 was $20,121,462, and we had limited cash resources at December 31, 2025 of $146,935. Our net loss from inception to June 30, 2026 has increased slightly to $20,450,948, and our cash at June 30, 2026 increased to $189,958. Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Our auditor's report reflects that our ability to continue as a going concern is dependent upon our ability to raise additional capital from the sale of common stock or other means and, ultimately, the achievement of significant operating revenues. If we are unable to continue as a going concern, our business will fail and stockholders will lose their investment in our company. No assurance can be given that such financing will be available or, if available, that it will be on commercially favorable terms. Moreover, financing will likely be dilutive to our stockholders.

Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025

Introduction

We had revenues of $2,067,212 and $3,677,956, respectively, for the three and six months ended June 30, 2026, compared to $968,656 and $1,899,935, respectively, for the three and six months ended June 30, 2025. Our cost of revenue was $614,768 and $1,236,811, respectively, for the three and six months ended June 30, 2026, compared to $375,828 and $882,123, respectively, for the three and six months ended June 30, 2025.

Our operating expenses were $1,501,206 and $2,818,116, respectively, for the three and six months ended June 30, 2026, compared to $698,4344 and $1,232,267, respectively, for the three and six months ended June 30, 2025. Our operating expenses consisted entirely of general and administrative expenses.

Our net income (loss) was $(129,389) and $(329,486), respectively, for the three and six months ended June 30, 2026, compared to $67,120 and $(331,739), respectively, for the three and six months ended June 30, 2025.

Revenues and Net Operating Loss

Our revenue, cost of revenue, gross profit, operating expenses, other income (expense), and net loss for the three and six months ended June 30, 2026 and 2025 were as follows:

		Three Months Ended		Six Months Ended		Three Months Ended		Six Months Ended
		June 30, 2026		June 30, 2026		June 30, 2025		June 30, 2025
Revenue		$2,067,212		$3,677,956		$968,656		$1,899,935
Cost of Revenue		614,768		1,236,811		375,828		882,123
Gross Profit		1,452,444		2,441,145		592,827		1,017,812
Operating expenses:
General and administrative		1,501,206		2,818,116		698,434		1,232,267
Total operating expenses		1,501,206		2,818,116		698,434		1,232,267
Other income (expense)
Interest expenses, net of interest income		(106,632)		(191,538)		(29,259)		(63,817)
Change in fair value on derivative		21,039		304,058		201,986		(53,468)
Gain/loss of foreign transactions		4,966		4,966		-		-
Gain/loss of disposal of assets		-		(70,000)		-		-
Total other income (expense)		(80,626)		47,486		172,727		(117,285)
Net income (loss)		$(129,389)		$(329,486)		$67,120		$(331,739)

Revenues

We had revenues of $2,067,212 and $3,677,956, respectively, for the three and six months ended June 30, 2026, compared to $968,656 and $1,899,935, respectively, for the three and six months ended June 30, 2025, an increase of $1,098,556, or 113%, and $1,778,020, or 94%, respectively. We expect revenue growth to increase as our direct consumer sales and marketing efforts continue to perform.

Cost of Revenue

Our cost of revenue was $614,768 and $1,236,811, respectively, for the three and six months ended June 30, 2026, compared to $375,828 and $882,123, respectively, for the three and six months ended June 30, 2025, an increase of $238,940, or 64%, and $354,688, or 40%, respectively.

Cost of revenue as a percentage of revenues was 30% and 34%, respectively, for the three and six months ended June 30, 2026, and 39% and 46%, respectively, for the three and six months ended June 30, 2025.

General and Administrative

Our general and administrative expenses were $1,501,206 and $2,818,116, respectively, for the three and six months ended June 30, 2026, compared to $698,434 and $1,232,267, respectively, for the three and six months ended June 30, 2025, an increase of $802,772, or 115%, and $1,585,849, or 129%, respectively. In the six months ended June 30, 2026, general and administrative expenses consisted mainly of advertising of $404,022, consulting fees of $483,156, stock-based compensation $242,389, salaries and wages of $507,412 and selling fees of $280,212. In the three months ended June 30, 2025, general and administrative expenses consisted mainly of advertising of $555,501, consulting fees of $209,700, stock-based compensation $120,152, salaries and wages of $120,152 and accounting and legal fees of $99,008.

Other Income (Expense)

Other income (expense) was $(80,626) and $47,486, respectively, for the three and six months ended June 30, 2026, compared to $172,727 and $(117,285), respectively, for the three and six months ended June 30, 2025, a decrease of $253,353, or 147%, and an increase of $164,770, or 140%, respectively. In the six months ended June 30, 2026, other income (expense) consisted of interest expense, net of interest income of $(106,632), change in fair value on derivative of $21,039, and gain/loss of foreign transactions of $4,966. In the three months ended June 30, 2025, other income (expense) consisted of interest expense, net of interest income of $(63817) and change in fair value on derivative of $(53,468). Change in fair value of derivative was related to reduction in convertible debts balances and the conversion of convertible debts into shares of common stock.

Net Income (Loss)

Net income (loss) was $(129,389), or $(0.01) per share, and $(329,486), or $(0.02), respectively, per share, for the three and six months ended June 30, 2026, compared to $67,120, or $0.02 per share, and $(331,739), or $(0.11), respectively, for the three and six months ended June 30, 2025.

Our net income (loss) varies from period to period primarily because of the change in fair value on derivative and our increase in general and administrative expenses.

Liquidity and Capital Resources

Introduction

During the six months ended June 30, 2026, we had positive operating cash flows. Our cash on hand as of June 30, 2026 was $189,958. While we had positive net cash from operations for both the six months ended June 30, 2026 and 2025, we have both short and medium-term cash needs. We anticipate that these needs will be satisfied through increased revenues and the issuance of debt or the sale of our securities until such time as our cash flows from operations will consistently satisfy our cash flow needs.

Our cash, current assets, total assets, and current and total liabilities as of June 30, 2026 and December 31, 2025 were as follows:

	June 30,			December 31,			Increase/
	2026			2025			(Decrease)
Cash	$	189,958		$	146,935		$	43,022
Total Current Assets	1,679,466				1,327,317		352,149
Total Assets	32,608,849				27,824,664		2,009,634
Total Current and Total Liabilities	10,173,158				3,795,099		6,378,058

Our cash increased slightly by $43,022. Our total current assets increased slightly during the six months ended June 30, 2026 primarily as a result of our increase in accounts receivable of $419,268, offset in part by our decrease in inventory of $199,243. Our total assets increased slightly during the six months ended June 30, 2026 primarily as a result of our increase in goodwill of $2,158,042, offset in part by a decrease in our fixed assets of $348,093. Our accumulated deficit increased during the six months ended June 30, 2026, by $329,486 to $20,450,948.

In order to repay our obligations in full or in part when due, we will be required to raise significant capital from other sources. There is no assurance, however, that we will be successful in these efforts.

Cash Requirements

Our cash on hand as of June 30, 2026 was $189,958. While we had positive net cash from operations for the six months ended June 30, 2026 and 2025, we have both short and medium-term cash needs and we will need to continue to fund operations by raising capital from the sale of our stock and debt financings.

Sources and Uses of Cash

Operating Activities

We had net cash from operating activities of $411,983 for the six months ended June 30, 2026, compared to $77,236 for the six months ended June 30, 2025. We use our cash for normal business operations. Our net cash from operating activities for the six months ended June 30, 2026 consisted of our net loss of $329,486, plus in part a change in fair value on derivative liability of $304,058 and accrued liabilities of $118,148, offset in part by depreciation and amortization of $348,093, an increase in our inventory of $344,425, and warrants issued for services of $225,389. Our net cash from operating activities for the six months ended June 30, 2025 consisted of our net loss of $331,739, plus a decrease in note receivable of $100,000, offset in part by increase in inventory of $254,337.

Investing Activities

Our net cash provided by (used in) investing activities was $95,971 for the six months ended June 30, 2026, consisting entirely of net cash from the Adli Gummies acquisition, and $(19,302) for the six months ended June 30, 2025, consisting entirely of a fixed asset purchase.

Financing Activities

Our net cash provided by (used in) financing activities for the six months ended June 30, 2026 was $(464,931), compared to $30,540 for the six months ended June 30, 2025. Our net cash used in financing activities for the six months ended June 30, 2026 consisted primarily of proceeds from the issuance of notes payable of $316,000, plus proceeds from the issuance of notes payable - related party of $100,000, offset in part by repayment of notes payable of $245,076, repayment of line of credit $492,000 and repayment of convertible debt of $106,000.