Bonk, Inc.: Form 10-Q for the period ended Sep 30, 2025

FORWARD LOOKING STATEMENTS

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward- looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.

As used in this quarterly report and unless otherwise indicated, the terms “we”, “us”, “our”, “BONK” and the “Company” mean Bonk, Inc.

General Overview

Bonk, Inc. (NASDAQ: BNKK) was formerly known as Safety Shot, Inc., and prior to that, Jupiter Wellness, Inc. In August 2023 the Company acquired certain assets of GBB Drink Lab Inc which included the blood alcohol reduction drink Sure Shot (the “Sure Shot Dietary Supplement”), an over-the-counter drink that can lower blood alcohol content to allow recovery from the effects of alcohol by supporting its metabolism. Concurrently with the purchase, the Company changed its name to Safety Shot, Inc. and changed its NASDAQ trading symbol to SHOT. The Company launched the Sure Shot Dietary Supplement in December 2023.

On June 27, 2025, the Company completed the acquisition of Yerbaé, a premium plant-based energy beverage company, in a transaction accounted for as a business combination. The Yerbaé acquisition supports Safety Shot’s strategic growth in the functional beverage market by expanding its presence in clean energy drinks distributed through retail and e-commerce channels.

In September 2025, the Company entered into a digital asset transaction with Bonk, a Solana-based cryptocurrency project. The Company received Bonk tokens in connection with this transaction, which are accounted for as indefinite-lived intangible assets under ASC 350. The Bonk transaction represents the Company’s initial entry into the digital asset space and is intended to support its strategic initiatives related to digital brand engagement and emerging blockchain-based marketing opportunities. The fair value of the Bonk tokens is remeasured each reporting period, with any decreases in value recognized in current period earnings.

The Sure Shot Dietary Supplement has been formulated to reduce the accumulation of blood alcohol content by supporting its metabolism. Noteworthy is the fact that the Sure Shot Dietary Supplement comprises 28 active ingredients, all of which are Generally Regarded As Safe (GRAS). Under sections 201(s) and 409 of the Federal Food, Drug, and Cosmetic Act (the “Act”), any substance intentionally added to food is a dietary supplement subject to premarket review and approval by the FDA, unless the substance is generally recognized by qualified experts as safe under the conditions of its intended use, or unless the use of the substance is otherwise excepted from the definition of a dietary supplement.

The Sure Shot Dietary Supplement is currently manufactured in a facility adhering to Good Manufacturing Practices (GMP), ensuring the highest standards of quality and safety throughout its production process.

Our focus centers on the commercialization of a 4-ounce dietary supplement positioned for rapid alcohol metabolism support. Beyond our existing product, we also offer a convenient powdered stick pack version, aligning with our vision to meet evolving consumer demands. With the addition of Yerbaé’s plant-based beverages and the Company’s entry into digital asset activities through the Bonk transaction, Safety Shot continues to explore complementary opportunities that expand its brand presence, distribution channels, and long-term growth potential in both functional wellness and emerging digital ecosystems.

Products Roadmap

The Sure Shot Dietary Supplement was launched on our own website and through Amazon in December 2023 and with several Big Box stores. The Company is advancing several product formats and formulations to continue to offer an array of products that can be purchased at various locations that coincide with consumer shopping habits. Yerbaé’s plant-based beverages are available in several Big Box retailers.

Research and Development

Our research and development team in continually looking to develop new therapeutic products, while continually improving and enhancing our existing products and product candidates to address customer demands and emerging trends.

We have conducted extensive informal research and experimentation involving a substantial number of volunteers under the influence of alcohol. Our findings indicate that the Sure Shot Dietary Supplement can reduce a person’s Blood Alcohol Content, as measured by the premier Breathalyzer on the market. We have completed our clinical trials of the Sure Shot Dietary Supplement which have shown a statistically significant reduction in the Blood Alcohol Content (“BAC”) of the participants. The observable enhancements in cognitive abilities among the test subjects have been carefully documented.

The clinical trials took place from January 29, 2024, through June 10, 2024, at the CAHS located at 6570 Seville Drive, Canfield, OH 44406. The clinical trials were sponsored and paid for by the Company and consisted of 36 participants with a mean age of 36.3 years that were selected through advertising of the study. The Company did not inquire about the participants typical level of alcohol consumption but each participant had to qualify based upon a complete medical history questionnaire, release from physicians and submitting to a standard bloodwork panel. Each participant consumed exactly 100 mL of alcohol and the BAC of the participants ranged from 0.047 % to 0.068 %. The participants were not employees of the Company nor affiliated with the Company in any way. The clinical trials were a double-blind, randomized, placebo-controlled study that found that within 30 minutes of the consumption of the Sure Shot Dietary Supplement, the monitored participants saw a statistically significant drop of p=.002 in BAC and continued to see measurable drops in successive 30-minute increments. The results were measured by using a DOT-approved BACtrack S80 Breathalyzer on the participants to determine their BAC after ingesting several alcoholic beverages, followed by drinking 12 ounces of the Sure Shot Dietary Supplement and then measuring the participants’ BAC 30 minutes later. In addition, cognitive responses were measured using the Visual Analogue Scale (“VAS”) and physical function assessed at the same intervals as the blood draws and breathalyzer assessments to correlate to function. The VAS consisted of a 10 cm, straight line with end points that measured from low-to-high for a number of physical feelings and sensations. The participants were asked to mark a point on the line that corresponded with their experience. The distance from the end to the point marked by the participant was then measured in millimeters to quantify their level of sensation. On each visit, participants were asked to perform the VAS tests and the VAS assessed subjective ratings for head discomfort (headache), nausea, fatigue, energy, tiredness, thirst and ability to concentrate. The Company also conducted further physical assessment by monitoring biometric measurements such as blood pressure and heart rate at various intervals. The key assumptions in the study were that the participants would demonstrate a marked decrease in BAC following the consumption of the Sure Shot Dietary Supplement versus that of the placebo. In addition, the study assumed that the participants would feel better and demonstrate marked improvement in cognitive skills and physical function following the consumption of the Sure Shot Dietary Supplement versus that of the placebo. The Company had previously observed in our numerous, pre-clinical tests that participants who consumed significant amounts of alcohol (more than two drinks) experienced marked and rapid reductions in their BAC when measured by BACTrack S80 breathalyzers after consumption of the Sure Shot Dietary Supplement. In addition, the Company observed in the pre-clinical tests that the participants showed significant improvement in motor function and reduction in slurred speech and other markers commonly associated with alcohol consumption. These findings led the Company to continue to develop the Sure Shot Dietary Supplement and commission a clinical study to prove our hypothesis. There were five adverse events amongst the participants in the study. Four of the adverse events were associated with the Sure Shot Dietary Supplement (three felt nauseous and one developed a rash) and none of the adverse events were serious. The final adverse event was associated with congestion of the placebo.

Since approximately 2010, the Company has performed 100s of pre-clinical tests in an effort to develop and perfect the Sure Shot Dietary Supplement. These informal, pre-clinical tests included friends, family and other volunteers who consumed alcohol at varying levels and then were tested prior to the consumption of the Sure Shot Dietary Supplement. The pre-clinical tests were neither peer reviewed nor were the subjects screened prior to their participation. In addition, the VAS was not used nor were there any placebos or other control measures taken in the pre-clinical tests and as such these tests are considered informal and non-clinical. The participants’ BAC was measured by using the BacTrack S80 after the consumption of various amounts of alcohol and prior to the consumption of the Sure Shot Dietary Supplement and then at 30 minutes, 45 minutes and one-hour intervals after consumption of the Sure Shot Dietary Supplement so we could assess the efficacy of the Company’s R&D efforts at that point in time. The Company also observed motor function skills such as walking, balancing and speech at the same intervals following the consumption of 12 ounces of the Sure Shot Dietary Supplement. The Company defined and noted the significant improvement in each area by observing participants’ walk and whether a participant’s gait was unsteady, or whether their balance was off while standing and whether their speech was clear or slurred. The Company incurred research and development expenses of $100,591 and $1,637,117 for the years ended December 31, 2022, and 2023, respectively.

Sales and Marketing

We primarily sell our products through e-commerce websites including Amazon as well as Big Box stores. To drive loyalty, word-of-mouth marketing, and sustainable growth, we invest in customer experience and customer relationship management.

Manufacturing, Logistics and Fulfillment

We outsource the manufacturing of our products to contract manufacturers, who produce them according to our formulation specifications. Our products are manufactured by contract manufacturers in India and the US. The majority of our products will then be shipped to third-party warehouses and to our corporate offices, which can either transport them to our distributors, retailers, or directly to our customers. Our third-party warehouses are located in the US. We use a limited number of logistics providers to deliver our products to both distributors and retailers, which allows us to lessen order fulfillment time, cut shipping costs, and improve inventory flexibility.

Our Competitive Strengths

We are committed to driving continuous improvement through innovation. Since our inception, we have made significant investments in research and development and have acquired a substantial portfolio of intellectual property, which continues to grow each year. Our commitment to innovation has allowed us to create unique products that address unmet needs in the market, all backed by rigorous clinical research. We believe that our focus on research and development is designed to enable us to stay ahead of the curve and provide our customers with products that are not only effective but also innovative. We take pride in our patent portfolio and the continuous growth we have achieved, as we believe that it showcases our dedication to creating new and unique solutions for our customers. By staying committed to innovation, we are confident in our ability to meet the ever-changing needs of the health and wellness market. We believe that the Safety Shot Dietary Supplement and Yerbaé’s plant-based beverages, stand as a unique product in the liquid dietary supplement market. Nevertheless, our competitive landscape includes many companies involved in the production of health and welfare products.

In addition to our advancements in functional wellness and dietary supplement formulations, we have also begun exploring opportunities within the digital asset ecosystem. Through our recent digital asset transaction, we are evaluating how blockchain technologies and digital engagement strategies can be integrated into our brand and product marketing initiatives. We view this as an extension of our innovation strategy, leveraging emerging technologies to enhance consumer interaction, loyalty programs, and digital community-building initiatives that complement our core product lines.

Recent Developments

Acquisition of Yerbaé Brands

On June 27, 2025, the Company completed the acquisition of Yerbaé, a premium energy beverage company, in a transaction accounted for as a business combination under ASC 805, Business Combinations. The acquisition supports the Company’s strategic growth in the functional beverage market.

Settlement and Exchange Agreement

On January 20, 2025 the Company entered into a convertible note agreement with Bigger Capital LLP (i) a secured convertible note in the principal amount of $1,750,000 maturing on December 31, 2026 (the “Secured Convertible Note”); and (ii) a convertible note in the principal amount of $3,500,000 maturing July 21, 2025 (the “Convertible Note,” and, together with the Secured Convertible Note, the “Notes”). The notes entered were due to a legal settlement and no cash was received. On June 12, 2025, Bigger sold the notes to Trajan and Fried. The sale had no impact on the Company’s outstanding balance.

On July 2, 2025, the Company entered into an Exchange Agreement by and among the Company and the Investors. Pursuant to the Exchange Agreement, the parties intended to effect a voluntary security exchange transaction whereby the Investors exchanged the Secured Convertible Note and (ii) the Convertible Note for an aggregate of 7,212 shares of the Series B Preferred Stock.

August Purchase Agreement

On August 8, 2025, the Company entered into a Securities Purchase Agreement (the “August Purchase Agreement”) with an institutional investor entity (the “Investor”) for a private investment in public equity (the “PIPE Offering”) of 35,000 shares of its Series C Convertible Preferred Stock, par value $0.001 per share (the “Series C Preferred Stock”), convertible into 62,701,541 shares of common stock, par value $0.001 (the “Common Stock”), at a conversion price of $0.5582 per share of Common Stock. The 35,000 shares of Series C Preferred Stock are referred to herein as the “SPA Preferred Stock Shares.” The issuance of the SPA Preferred Stock Shares is expected to occur not later than August 20, 2025.

The Investor will pay the $25 million purchase price for the SPA Preferred Stock Shares in the form of BONK tokens (the “Consideration Tokens”), based on the closing price of BONK tokens on August 10, 2025. The Consideration Tokens will be held in the custodian wallet account designated and controlled by the Company’s Board of Directors (the “Board”). The payment of the Consideration Tokens is expected to occur not later than August 20, 2025.

On August 8, 2025, the Company also entered into a Revenue Sharing Agreement (the “Revenue Sharing Agreement”) with the Investor, pursuant to which the Company agreed to issue 100,000 shares of the Series C Preferred Stock, convertible into 179,147,260 shares of Common Stock at a conversion price of $0.5582 per share of Common Stock, in exchange for an amount equal to 10% of all gross revenue of LetsBonk.fun in perpetuity. The 100,000 shares of Series C Preferred Stock are referred to herein as the “RSA Preferred Stock Shares,” and the SPA Preferred Stock Shares and the RSA Preferred Stock Shares are collectively referred to herein as the “Preferred Stock Shares.”

Intellectual Property

As of the date hereof, the Company owns five patents, including the patent (US 9,186,350 B2) and patent (US 10,028,991 B2) for the composition of the Sure Shot Dietary Supplement used for minimizing the harmful effects associated with alcohol consumption by supporting the metabolism of alcohol. US 9,186,350 B2 (the “350 Patent”), relates to an early version of the Sure Shot Dietary Supplement and is owned by the Company. The 350 Patent is a utility patent that covers the United States jurisdiction and expired on December 25, 2023. US 10,028,991 B2 (the “991 Patent”) is a continuation of the 350 Patent and relates to the Sure Shot Dietary Supplement and is owned by the Company. The 991 Patent is a utility patent that covers the United States jurisdiction and expires on November 5, 2035. In and around September of 2024, the Company received a Notice of Allowance for a new patent U.S. Patent Application No. 18/395,565 that relates to current version of the Sure Shot Dietary Supplement. On December 3, 2024, U.S. Patent No. 12,156,878 (formerly U.S. Patent Application No. 18/395,656) was granted. This patent is a utility patent and covers the United States jurisdiction. The Company owns three additional patents that relate to legacy products that the Company neither currently sells nor has any plans to sell in the future.

Government Regulation

The Sure Shot Dietary Supplement and Yerbaé’s Plant-Based Beverages

The production, distribution and sale in the United States of the Sure Shot Dietary Supplement and Yerbaé’s plant-based beverages are subject to various U.S. federal, state and local regulations, including but not limited to: the Federal Food, Drug and Cosmetic Act (“FD&C Act”); the Occupational Safety and Health Act and various state laws and regulations governing workplace health and safety; various environmental statutes; the Safe Drinking Water and Toxic Enforcement Act of 1986 (“California Proposition 65”); data privacy and personal data protection laws and regulations, including the California Consumer Privacy Act of 2018 (as modified by the California Privacy Rights Act) and a number of other federal, state and local statutes and regulations applicable to the production, transportation, sale, safety, advertising, marketing, labeling, packaging, and ingredients of the Sure Shot Dietary Supplement and Yerbaé’s plant-based beverages.

We also may in the future be affected by other existing, proposed and potential future regulations or regulatory actions, including those described below, any of which could adversely affect our business, financial condition and results of operations.

Furthermore, legislation and regulation may be introduced in the United States at the federal, state, municipal and supranational level in respect of each of the subject areas discussed below. Public health officials and health advocates are increasingly focused on the public health consequences associated with obesity and alcohol consumption, especially as they may affect children, and are seeking legislative change to reduce the consumption of sweetened and alcohol beverages.

We are subject to a number of regulations applicable to the formulation, labeling, packaging, and advertising (including promotional campaigns) of our products. In California, we are subject to California Proposition 65, a law which requires that a specified warning be provided before exposing California consumers to any product that contains in excess of threshold amounts of a substance listed by California as having been found to cause cancer or reproductive toxicity. California Proposition 65 does not require a warning if the manufacturer of a product can demonstrate that the use of the product in question exposes consumers to an average daily quantity of a listed substance that is below that threshold amount, which is determined either by scientific criteria set forth in applicable regulations or via a “safe harbor” threshold that may be established by the state, or the substance is naturally occurring, or is subject to another applicable exception. As of the date of this registration statement, we are not required to put a warning label on our product and our products are perfluoroalkyl and polyfluoroalkyl substances (“PFAS”) free. We are unable to predict whether a component found in our product might be added to the California list in the future. Furthermore, we are also unable to predict when or whether the increasing sensitivity of detection methodology may become applicable under this law and related regulations as they currently exist, or as they may be amended. If we are required to add warning labels to any of our products or place warnings in certain locations where our products are sold, it will be difficult to predict whether, or to what extent, such a warning would have an adverse impact on sales of our products in those locations or elsewhere. In addition, there has been increasing regulatory activity globally regarding constituents in packaging materials, including PFAS. Regardless of whether perceived health consequences of these constituents are justified, such regulatory activity could result in additional government regulations that impact the packaging of our beverages.

In addition, the U.S. Food and Drug Administration (the “FDA”) has regulations with respect to serving size information and nutrition labeling on food and beverage products, including a requirement to disclose the amount of added sugars in such products. Further, the U.S. Department of Agriculture promulgated regulations requiring that, by January 1, 2022, the labels of certain bioengineered foods include a disclosure that the food is bioengineered. These regulations may impact, reduce and/or otherwise affect the purchase and consumption of our products by consumers.

All ingredients in the Sure Shot Dietary Supplement and Yerbaé’s plant-based beverages, are deemed Generally Recognized as Safe (GRAS) and align with FDA standards, permitting their inclusion in supplements. In the event that the FDA or any governmental agency identifies an ingredient or aspect of our product as unsafe, we commit to promptly withdrawing that component in accordance with regulatory directives. From a product and sales perspective, there are no impediments or concerns raised by any governmental agency. It is essential to note that the Sure Shot Dietary Supplement is classified as a dietary supplement, exempt from the approval or filing requirements mandated for pharmaceutical drugs by the FDA or other regulatory authorities.

Results of Operations

For the three months ended September 30, 2025 and 2024

Revenues and Cost of Sales

We generated $1,514,817 in beverage revenue and $509,085 in related party income from digital assets for the three months ended September 30, 2025 compared to $110,213 in revenues for the three months ended September 30, 2024. Revenue increased due to our acquisition of Yerbaé along with a new marketing strategy, which was implemented in the third quarter of 2025. The increase was also due to the revenue sharing agreement entered into during the three months ended September 30, 2025. Cost of sales for the three months ended September 30, 2025 was $1,480,760 compared to $402,399 for the three months ended September 30, 2024. The increase is due to increased revenues during the three months ended September 30, 2025.

Operating Expenses and Other Income (Expense)

We had total operating expenses of $17,215,566 for the three months ended September 30, 2025 compared to $11,348,320 for the three months ended September 30, 2024.

Operating expenses for the three months ended September 30, 2025 were in connection with our daily operations as follows: (i) marketing expenses of $216,143; (ii) research and development of $8,668; (iii) legal and professional expenses of $5,543,273, consisting of corporate advisory services, annual report preparation fees and general corporate governance fees; (iv) rent and utilities of $42,002; (v) depreciation and amortization of $202,237; (vi) general and administrative expenses of $1,589,037, consisting of payroll and related taxes, travel, meals and entertainment, office supplies and expense, compensation related to management transition agreements and other normal office and administration expenses; and (vii) stock based compensation of $9,614,206.

Operating expenses for the three months ended September 30, 2024 were in connection with our daily operations as follows: (i) marketing expenses of $2,186,808; (ii) research and development of $10,315; (iii) legal and professional expenses of $2,586,915, consisting of corporate advisory services, annual report preparation fees and general corporate governance fees; (iv) rent and utilities of $93,357; (v) depreciation and amortization of $109,033; (vi) general and administrative expenses of $995,872, consisting of payroll and related taxes, travel, meals and entertainment, office supplies and expense, compensation related to management transition agreements and other normal office and administration expenses; and (vii) stock based compensation of $5,366,021. Other income for the three months ended September 30, 2024 consisted of net interest expense of $57,919 and realized gain on sale of stock of $68,333.

Other income for the three months ended September 30, 2025 included: (i) interest income of $72,227; (ii) interest expense of $273,711; (iii) loss on settlement of $4,278,036; (iv) gain on sale of stock of $500,000; (v) loss on exchange of $120,446; (vi) unrealized loss on digital asset of $7,213,473 and (vii) unrealized loss on equity investment of $5,595,353.

Other income for the three months ended September 30, 2024 included: (i) interest income of $9,484; (ii) interest expense of $67,404; and (iii) realized gain on sale of stock of $68,333.

For the nine months ended September 30, 2025 and 2024

Revenues and Cost of Sales

We generated $1,601,866 in beverage sales and $509,085 in related party income from digital assets for the nine months ended September 30, 2025 compared to $519,793 in beverage sales for the nine months ended September 30, 2024. Revenue increased due to our acquisition of Yerbaé along with a new marketing strategy, which was implemented in the third quarter of 2025. The increase was also due to the revenue sharing agreement entered into during the nine months ended September 30, 2025. Cost of sales for the nine months ended September 30, 2025 was $1,522,942 compared to $2,549,099 for the nine months ended September 30, 2024. The increase is due to increased revenues in 2025, but was partially offset by a one-time inventory write-off of $1,902,279 in 2024 related to product rebranding.

Operating Expenses and Other Expense

We had total operating expenses of $26,990,405 for the nine months ended September 30, 2025 compared to $32,923,489 for the nine months ended September 30, 2024.

Operating expenses for the nine months ended September 30, 2025 were in connection with our daily operations as follows: (i) marketing expenses of $1,436,194; (ii) research and development of $24,190; (iii) legal and professional expenses of $9,136,580, consisting of corporate advisory services, annual report preparation fees and general corporate governance fees; (iv) rent and utilities of $153,771; (v) depreciation and amortization of $423,822; (vi) general and administrative expenses of $3,304,536, consisting of payroll and related taxes, travel, meals and entertainment, office supplies and expense, compensation related to management transition agreements and other normal office and administration expenses; and (vii) stock based compensation of $12,511,312.

Operating expenses for the nine months ended September 30, 2024 were in connection with our daily operations as follows: (i) marketing expenses of $6,230,903; (ii) research and development of $271,719; (iii) legal and professional expenses of 6,839,639, consisting of corporate advisory services, annual report preparation fees and general corporate governance fees; (iv) rent and utilities of 313,598; (v) depreciation and amortization of $318,035; (vi) general and administrative expenses of $2,537,927, consisting of payroll and related taxes, travel, meals and entertainment, office supplies and expense, compensation related to management transition agreements and other normal office and administration expenses; and (vii) stock based compensation of $16,411,690.

Other income for the nine months ended September 30, 2025 included: (i) interest income of $64,863; (ii) interest expense of $496,840; (iii) loss on settlement of $4,640,465; (iv) gain on marketable securities of $180,556 (v) gain on sale of stock of $500,000; (vi) loss on exchange of $120,446; (vii) unrealized gain on equity investment $12,594,998, (viii) unrealized loss on digital asset of $7,213,473, (ix) realized gain on marketable securities $180,556.

Other income/expense for the nine months ended September 30, 2024, included: (i) interest income of $40,699; (ii) interest expense of $252,108; (iii) recognized gain on sale of stock of $231,159 and (iv) net loss on sale of marketable securities of $46,658 and other expenses of $599,155.

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time communicated to the Company’s management, including its Chief Executive Officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 13a-15(e). The Company’s disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching the Company’s desired disclosure control objectives. In designing periods specified in the SEC’s rules and forms, and that such information is accumulated and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company’s certifying officers have concluded that the Company’s disclosure controls and procedures are ineffective in reaching that level of assurance.

At the end of the period being reported upon, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were ineffective to ensure that the material information required to be included in our Securities and Exchange Commission reports is accumulated and communicated to our management, including our principal executive and financial officer, recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms relating to the Company, based on the assessment and control of disclosure decisions currently performed by a small team. The Company plans to expand its management team and build a fulsome internal control framework required by a more complex entity.

Changes in Internal Control Over Financial Reporting

During the past six months and previous fiscal year, we implemented significant measures to remediate the previously disclosed ineffectiveness of our internal control over financial reporting, which included an insufficient degree of segregation of duties amongst our accounting and financial reporting personnel, and the lack of a formalized and complete set of policy and procedure documentation evidencing our system of internal controls over financial reporting. The remediation measures consisted of the hiring of individuals with appropriate experience in internal controls over financial reporting, and the modification of our accounting processes and enhancement to our financial controls, including the testing of such controls.

On June 27, 2025, we completed the acquisition of Yerbae Brands Corp. (“Yerbae”), a transaction that significantly expanded our operations and business structure. As permitted by SEC guidance, management has excluded Yerbae from its assessment of the effectiveness of the Company’s internal control over financial reporting as of September 30, 2025.

Management is in the process of integrating Yerbae into our overall internal control framework. As such, our internal controls over financial reporting will be evaluated to incorporate Yerbae in future periods.

Other than as described above, there was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

Management has confidence in its internal controls and procedures. The Company’s management believes that a control system, no matter how well designed and operated can provide only reasonable assurance and cannot provide absolute assurance that the objectives of the internal control system are met, and no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Further, the design of an internal control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitation in all internal control systems, no evaluation of controls can provide absolute assurance that all control issuers and instances of fraud, if any, within the Company have been detected.

In addition to the information set forth in this Form 10-Q, you should carefully consider the risk factors disclosed under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes to our risk factors from those included in our Annual Report on Form 10-K for the year ended December 31, 2024.