Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

We and our representatives may from time to time make written or oral statements that are "forward-looking," including statements contained in this report and other filings with the SEC, reports to our stockholders and news releases. All statements that express expectations, estimates, forecasts or projections are forward-looking statements. In addition, other written or oral statements which constitute forward-looking statements may be made by us or on our behalf. Words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate," "project," "forecast," "may," "should," and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in or suggested by such forward-looking statements. We undertake no obligation to update or revise any of the forward-looking statements after the date of this report to conform forward-looking statements to actual results, except as may be required under applicable law. Important factors on which such statements are based are assumptions concerning uncertainties, including but not limited to, uncertainties associated with the following:

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Inadequate capital and barriers to raising the additional capital or to obtaining the financing needed to implement our business plans;

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Our failure to earn significant revenues or profits;

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Volatility, lack of liquidity or decline of our stock price;

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Potential fluctuation in quarterly results;

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Rapid and significant changes in markets; and

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Insufficient revenues to cover operating costs.

The following discussion should be read in conjunction with the financial statements and the notes thereto which are included in this report.

Overview

Through our wholly owned subsidiary, Bespoke Extracts Colorado, LLC, we operate a marijuana infused products manufacturing facility in Colorado.

In November 2021, new management of the Company was appointed and the Company began to focus on other complimentary lines of business to its CBD offerings. Under our new management team, we plan to expand the Company's focus to regulated cannabis markets in the United States.

On December 2, 2021, Bespoke Extracts Colorado, LLC, a newly formed wholly owned subsidiary of the Company entered into an asset purchase agreement with WonderLeaf, and on December 7, 2021, Bespoke Colorado and WonderLeaf entered into an amendment to such asset purchase agreement (as amended, the "WonderLeaf Purchase Agreement"). Pursuant to the WonderLeaf Purchase Agreement, Bespoke Colorado agreed to purchase from WonderLeaf, and WonderLeaf agreed to sell to Bespoke Colorado, certain assets of WonderLeaf, including a license to manufacture marijuana-infused products, existing inventory, and extraction equipment and ancillary items, all as further set forth in the WonderLeaf Purchase Agreement, for a purchase price of $50,000, to be paid in shares of common stock of the Company. The Company issued a total of 222,223 shares of common stock ($0.225 per share), the fair market value on the date of issuance.

Beginning January 1, 2025, we rebranded our product offerings in Colorado as The Joint Company.

Results of Operations for the three months ended June 30, 2025 and June 30, 2024

Sales

Sales during the three months ended June 30, 2025 were $390,553 compared to $278,163 for the three months ended June 30, 2024. The increase in sales was a result of increased product sales of pre-rolled joints to licensed dispensaries in Colorado as well as increased joint production services for third parties. The increase in joint sales was primarily driven by new products. The increase in sales was also a result of increased processing services for third parties.

Cost of Goods Sold

Cost of goods sold for the three months ended June 30, 2025 was $193,054 compared to $172,046 for the three months ended June 30, 2024. The increase was a direct result of the increase in sales. The increase in cost of sales was due to increases in purchases of raw materials, packaging, and labor associated with the production of pre-rolled joints. Labor and input materials, as a percentage of sales, both decreased when compared to the prior year period. Packaging and production materials, as a percentage of sales, increased when compared to the prior year

Operating Expenses

Selling, general and administrative expenses for the three months June 30, 2025 and June 30, 2024 were $337,625 and $325,885, respectively. The decrease was mainly attributable to stock-based compensation of $0 for the three months ended June 30, 2025 compared to $59,855 for the three months ended June 30, 2024 and decrease in rent paid of $12,000 for the three months ended June 30, 2025 compared to $36,000 for the three months ended June 30, 2024. These items were partially offset by increases in audit and accounting expense, sales commissions and payroll expense.

Net Loss

Our net loss for the three months ended June 30, 2025 was $205,106, or $0.02 per share, compared to a net loss for the three months ended June 30, 2024 of $260,895, or $0.03 per share.

Results of Operations for the six months ended June 30, 2025 and June 30, 2024

Sales

Sales during the six months ended June 30, 2025 were $653,712 compared to $538,591 for the six months ended June 30, 2024. The increase in sales was a result of increased product sales of pre-rolled joints to licensed dispensaries in Colorado as well as increased joint production services for third parties. The increase in joint sales was primarily driven by new products in addition to an increase in sales of Fresh Joint products. The increase in sales was also a result of increased processing services for third parties.

Cost of Goods Sold

Cost of goods sold for the six months ended June 30, 2025 was $345,434 compared to $329,893 for the six months ended June 30, 2024. The increase was a direct result of the increase in sales. The increase in cost of sales was due to increases in purchases of raw materials, packaging, and labor associated with the production of pre-rolled joints. The decrease in cost of goods sold, as a percentage of sales, was primarily driven by decreases in all categories as the company increased efficiencies with revenue growth.

Operating Expenses

Selling, general and administrative expenses for the six months June 30, 2025 and June 30, 2024 were $650,778 and $673,744, respectively. The decrease was mainly attributable to stock-based compensation of $0 for the six months ended June 30, 2025 compared to $82,079 for the six months ended June 30, 2024 and was partially offset by increase in salaries and product delivery expense. Professional fees were $64,796 and $88,000, respectively for the six months ended June 30, 2025 and June 30, 2024. The decrease in expenses was due to decreased legal fees.

Net Loss

Our net loss for the six months ended June 30, 2025 was $465,627, or $0.04 per share, compared to a net loss for the six months ended June 30, 2024 of $575,013, or $0.06 per share.

Liquidity and Capital Resources

As of June 30, 2025, we had cash of $1,363. Net cash used in operating activities for the six months ended June 30, 2025 was $103,942. Our current liabilities as of June 30, 2025 were $ 1,485,466 and consisted of accounts payable and accrued liabilities of $1,344,241, current portion of lease liability of $59,353 and advances payable related party of $66,872. As of June 30, 2024, we had cash of $24,791. Net cash used in operating activities for the six months ended June 30, 2024 was $125,316. Our current liabilities as of June 30, 2024 were $ 1,573,439 and consisted of accounts payable and accrued liabilities of $1,329,393, current portion of lease liability of $64,330 and advances payable related party of $61,872.

During the six months ended June 30, 2025 the Company borrowed $0 from a related party. During the six months ended June 30, 2024 the Company borrowed $8,500 from a related party.

The unaudited condensed consolidated financial statements included in this report have been prepared assuming a continuation of the Company as a going concern. The Company had negative cash flows from operations for the six months ended June 30, 2025 and the year ended December 31, 2024 and had a working capital deficit at June 30, 2025 and December 31, 2024. This raises substantial doubt about our ability to continue as a going concern.

Until recently, we have not generated positive cash flows from operating activities. Our primary source of capital has been from the sale of equity and convertible debt securities. Our primary use of capital has been for professional fees and selling, general and administrative costs. We have no committed sources of capital and will need to raise additional capital to continue and expand our operations. Additional capital may not be available on terms acceptable to us, or at all.

In addition, the COVID-19 pandemic may negatively affect our operations, including by limiting access to our facilities, customers, management, and professional advisors, and by causing delays and constraints in manufacturing and shipping of our products. These factors, in turn, may negatively impact our operations, financial condition and demand for our products, and our ability to raise capital on acceptable terms, or at all.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical accounting policies and estimates