UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
For the transition period from __________ to __________
Commission File Number:
(Exact name of Registrant as specified in its charter)
| (State of incorporation) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) (zip code)
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1)
has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant has
submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☐ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | N/A | N/A |
As of May 15, 2025, shares of common stock, par value $0.001 per share, were issued and outstanding.
SENTIENT BRANDS HOLDINGS INC.
FORM 10-Q
March 31, 2025
TABLE OF CONTENTS
FORWARD LOOKING STATEMENTS
This report contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this report. Additionally, statements concerning future matters are forward-looking statements.
Although forward-looking statements in this report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the headings “Risks Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K, in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q and information contained in other reports that we file with the SEC. You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report.
We file reports with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. You can also read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
Unless otherwise indicated, references in this report to “we,” “us” or the “Company” refer to Sentient Brands Holdings Inc. and its subsidiaries.
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
SENTIENT BRANDS HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| March 31, 2025 | December 31, 2024 | |||||||
| Unaudited | Audited | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Inventory | ||||||||
| TOTAL CURRENT ASSETS | ||||||||
| FIXED ASSETS (net of Depreciation) | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIENCY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Notes payable | ||||||||
| Convertible Notes Payable | ||||||||
| TOTAL CURRENT LIABILITIES | ||||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| STOCKHOLDERS’ DEFICIENCY | ||||||||
| Preferred Stock – Par Value of $; shares authorized; and shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively | ||||||||
| Common Stock - Par Value of $; shares authorized; and shares issued and outstanding as of March 31, 2025 and December 31, 2024 | ||||||||
| Common stock to be issued | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| TOTAL STOCKHOLDERS’ DEFICIENCY | ( |
) | ( |
) | ||||
| TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIENCY | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
1
SENTIENT BRANDS HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED STATEMENTS OF OPERATIONS
| For the three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| REVENUES: | ||||||||
| TOTAL REVENUES | $ | $ | ||||||
| Cost of sales | ||||||||
| Gross Profit | ||||||||
| Operating Expenses | ||||||||
| Advertising and Marketing | ||||||||
| General and Administrative | ||||||||
| Legal and Professional | ||||||||
| Management Fees | ||||||||
| TOTAL OPERATING EXPENSES | ||||||||
| LOSS FROM OPERATIONS | ( |
) | ( |
) | ||||
| Other Income (Expenses) | ||||||||
| Interest expense | ( |
) | ( |
) | ||||
| Other income | ||||||||
| NET LOSS | $ | ( |
) | $ | ( |
) | ||
| NET LOSS PER COMMON SHARE – BASIC AND DILUTED | $ | ) | $ | ) | ||||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
SENTIENT BRANDS HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIENCY
| March 31, 2025 (Unaudited) | Common Stock | Preferred Stock | Common Stock to be | Paid in | Accumulated | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | issued | Capital | Deficit | Total | |||||||||||||||||||||||||
| Balance - December 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Common stock issued in lieu of accounts payable | ||||||||||||||||||||||||||||||||
| Previously purchased common shares issued | ( | ) | ||||||||||||||||||||||||||||||
| Common stock issued for previously converted debt and accrued interest | ( | ) | ||||||||||||||||||||||||||||||
| Common stock issued for services | ||||||||||||||||||||||||||||||||
| Conversion of debt and accrued interest into common stock | ||||||||||||||||||||||||||||||||
| Conversion of debt and accrued interest into common stock not yet issued | ||||||||||||||||||||||||||||||||
| Common stock sold to investor | ||||||||||||||||||||||||||||||||
| Return expired preferred shares to Treasury | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Net loss for the three months | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balances March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
| March 31, 2024 | Common Stock | Preferred Stock | Paid in | Accumulated | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balance - December 31, 2023 | ( |
) | ( |
) | ||||||||||||||||||||||||
| Common stock issued for services | ||||||||||||||||||||||||||||
| Net loss for the three months | ( |
) | ( |
) | ||||||||||||||||||||||||
| Balances March 31, 2024 | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
SENTIENT BRANDS HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the three months ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation Expenses | ||||||||
| Common stock issued in payment of past services | ||||||||
| Common stock issued for services | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Inventory | ||||||||
| Prepaid expenses | ( | ) | ( | ) | ||||
| Accounts payable and accrued expenses | ||||||||
| NET CASH USED IN OPERATING ACTIVITIES | ( | ) | ( | ) | ||||
| INVESTMENT ACTIVITIES: | ||||||||
| Purchase of office equipment | ||||||||
| NET CASH USED IN INVESTMENT ACTIVITIES | ||||||||
| FINANCING ACTIVITIES: | ||||||||
| Proceeds from sale of stock | ||||||||
| Proceeds from short term loan | ||||||||
| Net proceeds from sale of common stock not yet issued | ||||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | ||||||||
| INCREASE (DECREASE) IN CASH | ( | ) | ||||||
| CASH-BEGINNING OF PERIOD | ||||||||
| CASH-END OF PERIOD | $ | $ | ||||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid during the year for: | ||||||||
| Interest | $ | $ | ||||||
| Taxes | $ | $ | ||||||
| Supplemental disclosures of cash flow information: | ||||||||
| Issuance of previously purchased common stock | $ | $ | ||||||
| Stock issued for previously converted debt and interest | $ | $ | ||||||
| Stock issued for accounts payable | $ | $ | ||||||
| Stock issued for converted debt and interest | $ | $ | ||||||
| Conversion of debt and interest into stock not yet issued | $ | $ | ||||||
| Return expired preferred shares to treasury | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
SENTIENT BRANDS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
NOTE 1. ORGANIZATION AND NATURE OF OPERATIONS
Business description
The financial statements presented are those of Sentient Brands Holdings Inc. (the “Company”). The Company was incorporated under the laws of the State of California on March 22, 2004, and, until October 2016, the Company was in the business of media advertising and acquiring high-end computer and networking equipment from resellers and end-users and then reselling this equipment at discounted prices. The Company is currently in the business of product development and brand management with a focus on building innovative brands in the Luxury and Premium Market space. The Company has a Direct-to Consumer business model focusing on wellness and beauty for conscious consumers. The Company incorporates an omnichannel approach in its marketing strategies to ensure that its products are accessible across both digital and retail channels. The Company develops Lifestyle Brands with carefully thought-out ingredients, packaging, fragrance and design. The Company’s leadership team has extensive experience in building world-class brands such as Hugo Boss, Victoria’s Secret, Versace, and Bath & Body Works. The Company is focused on two key market segments targeting: wellness and responsible luxury, which the Company believes represent unique opportunities for its Oeuvre product line. The Company intends to leverage its in-house innovation capabilities to launch new products that “disrupt” adjacent product categories. The Company plans to grow by leveraging its deep connections within its existing network and attract consumers through increased brand awareness and investing in unique social media marketing. The Company’s goal is to create customer experiences that have sustainable resonance with consumers and consistently implement strategies that result in long-term profit growth.
On December 9, 2020, the Company filed a Certificate of Amendment of Articles of Incorporation (the “Certificate”) with the State of California to (i) effect a forward stock split of its outstanding shares of common stock at a ratio of 7 for 1 (7:1) (the “Forward Stock Split”), (ii) increase the number of authorized shares of common stock from shares to shares, and (iii) effectuate a name change (the “Name Change”). Fractional shares that resulted from the Forward Stock Split will be rounded up to the next highest number. As a result of the Name Change, the Company’s name changed from “Intelligent Buying, Inc.” to “Sentient Brands Holdings Inc.”. The Certificate was approved by the majority of the Company’s shareholders and by the Board of Directors of the Company. The effective date of the Forward Stock Split and the Name Change was March 2, 2021.
In connection with the above, the Company filed an Issuer Company-Related Action Notification Form with the Financial Industry Regulatory Authority. The Forward Stock Split and the Name Change was implemented by FINRA on March 2, 2021. Our symbol on OTC Markets was INTBD for 20 business days from March 2, 2021 (the “Notification Period”). Our new CUSIP number is 81728V 102. As a result of the name change, our symbol was changed to “SNBH” following the Notification Period. All share and per share information has been retroactively adjusted to reflect this forward stock split.
In addition, on January 29, 2021, the Company, merged with and into its wholly owned subsidiary, Sentient Brands Holdings Inc., a Nevada corporation, pursuant to an Agreement and Plan of Merger between Sentient Brands Holdings Inc., a California corporation, and Sentient Brands Holdings Inc., a Nevada corporation. Sentient Brands Holdings Inc., a Nevada corporation, continued as the surviving entity of the migratory merger. Pursuant to the migratory merger, the Company changed its state of incorporation from California to Nevada and each share of its common stock converted into one share of common stock of the surviving entity in the migratory merger. No dissenters’ rights were exercised by any of the Company’s stockholders in connection with the migratory merger.
Following the consummation of the migratory merger, the articles of incorporation and bylaws of the Nevada corporation that was newly-created as a wholly owned subsidiary of the Company became the articles of incorporation and bylaws for the surviving entity in the migratory merger.
5
Subsequent to the quarter ended March 31, 2025, on April 10, 2025, the Company, through its wholly-owned subsidiary AIG F&B, a Nevada corporation (AIGFB) closed the Exchange Agreement (the “Exchange Agreement”) with American Industrial Group, a Florida corporation (“AIG”), which is owned and controlled by its shareholders, and which owns and controls several assets and lines of business of interest to the Company, through its subsidiary, pursuant to which AIGFB will acquire many of those assets and rights of AIG in exchange for acquisition credits, to be ultimately paid by the exchange of those credits for shares of common stock of SNBH (the “Acquisition Credits”). These Acquisition Credits will be issued by SNBH to AIG shareholders and/or their designees in accordance with an Earnout Schedule that was set forth in the Exchange Agreement, as filed with the SEC on April 11, 2025, as an exhibit (10.16) to the Form 8K/A5.
Basis of Presentation
Our financial statements are presented in conformity with accounting principles generally accepted in the United States of America, as reported on our fiscal years ending on December 31, 2025 and 2024. We have summarized our most significant accounting policies.
Going concern
The Company currently has limited operations. These unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business.
As reflected in the accompanying unaudited consolidated
financial statements, the Company had an accumulated deficit of $
The accompanying unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
Uses of estimates in the preparation of financial statements
The preparation of financial statements in conformity with generally accepted accounting principles accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net revenue and expenses during each reporting period. Actual results could differ from those estimates.
Cash
The Company considers all short-term highly liquid investments with an original maturity date of purchase of three months or less to be cash equivalents.
6
Revenue Recognition
During the three months ended March 31, 2025 and the year ended December 31, 2024, our revenue recognition policy was in accordance with ASC 606, “Revenue from Contracts with Customers”, which requires the recognition of sales following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
Authoritative guidance on Earnings per Share requires dual presentation of basic and diluted earnings or loss per share (“EPS”) for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution; diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.
Basic loss per share is computed by dividing net loss applicable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution that could occur if dilutive securities and other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company, unless the effect is to reduce a loss or increase earnings per share.
In accordance with ASC No. 718, Compensation – Stock Compensation (“ASC 718”), the Company measures the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services.
During the three months ended March 31, 2025, and 2024, there were no stock based awards issued or outstanding.
Fair value of financial instruments
We value our financial assets and liabilities on a recurring basis using the fair value hierarchy established in Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures.
ASC 820 describes three levels of inputs that may be used to measure fair value, as follows:
Level 1 input, which include quoted prices in active markets for identical assets or liabilities.
Level 2 inputs, which include observable inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability; and
Level 3 inputs, which include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation.
Income Taxes
Deferred taxes are provided on a liability method
whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred
tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts
of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of enactment. The U.S. federal income tax rate is
7
Segment Reporting
The Company applies ASC 280, Segment Reporting, in determining reportable segments for its financial statement disclosure. Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer (“CEO”). The Company has determined that it operates as a single operating segment and has one reportable segment.
Impairment of Long-Lived Assets
Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold, and use is based on the fair value of the asset. Long-lived assets and certain identifiable intangible assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.
Recently Issued and Adopted Accounting Standards
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations, and cash flows when implemented.
NOTE 3. INVENTORIES
Inventories are stated at the lower of cost and net
realizable value. Cost is determined using the moving average method and net realizable value is the estimated selling price less costs
of disposal in the ordinary course of business. The cost of inventories includes direct costs plus shipping and packaging materials. At
December 31, 2023 based on a sale quote received in April 2024 for its remaining inventory, the Company recorded a charge of $
As of March 31, 2025 and December 31, 2024, the Company product inventories are contained in a storage and fulfilment center located at City Logistics in Fairfield, NJ.
NOTE 4. CONVERTIBLE NOTES PAYABLE
Since the change of control of the Company in May
2018, the Company received advances from Pure Energy 714 LLC, an unaffiliated entity, totaling $
8
On December 2, 2020, we issued a promissory note to an accredited investor
in consideration for $
On December 3, 2020, the Company issued a convertible
debenture to an accredited investor in consideration for $
On June 25, 2024, the investor submitted paperwork
that was approved by the Company to convert the entire Note and all of the related accrued interest totaling $
On April 27, 2021 (the “Issuance Date”),
the Company entered into a Securities Purchase Agreement with an accredited investor (the “April 2021 Investor”) providing
for the sale by the Company to the April 2021 Investor of a
9
On November 18, 2021 (the “Issuance Date”),
the Company entered into a Securities Purchase Agreement with an accredited investor (the “November 2021 Investor”) providing
for the sale by the Company to the November 2021 Investor of a
NOTE 5. NOTES PAYABLE
On January 3, 2020, specific terms were reached between
the Company and Pure Energy 714 LLC on the remaining $
During 2022 and 2023, the Company received proceeds
from various loans from Adriatic Advisors LLC. At December 31, 2023 and 2022, the Company had $
During May 2024, the Company received proceeds of
$
10
NOTE 6. STOCKHOLDERS’ (DEFICIT)
Preferred stock
The Company is authorized to issue shares of Preferred Stock, par value $ per share. During the first quarter of 2020, the Company issued shares of its newly designated Series B Preferred Stock to one investor.
For five years from the date of issuance, the Series B Preferred Stock shall have the number of votes equal to fifty-one percent (51%) of the cumulative total vote of all classes of stock of the Corporation, common or preferred, whether such other class of stock is voting as a single class or the other classes of stock are voting together as a single group, and with respect to such vote, such holder shall have full voting rights and powers equal to the voting rights and powers of the holders of Common Stock, or any other class of preferred stock, and shall be entitled to notice of any stockholders’ meeting in accordance with the bylaws of the Corporation, and shall be entitled to vote, together with holders of Common Stock and any class of preferred stock entitled to vote, with respect to any question upon which holders of Common Stock or any class of preferred stock have the right to vote. After five years, the Series B Preferred Stock shall automatically, and without further action by the Corporation, be cancelled and void, and may not be reissued.
As of March 31, 2025 and December 31, 2024, and shares of Series B Preferred Stock were issued and outstanding.
Common stock
On January 29, 2021, the Company, merged with and into its wholly owned subsidiary, Sentient Brands Holdings Inc., a Nevada corporation, pursuant to an Agreement and Plan of Merger between Sentient Brands Holdings Inc., a California corporation, and Sentient Brands Holdings Inc., a Nevada corporation. Sentient Brands Holdings Inc., a Nevada corporation, continued as the surviving entity of the migratory merger. Pursuant to the migratory merger, the Company changed its state of incorporation from California to Nevada and each share of its common stock converted into one share of common stock of the surviving entity in the migratory merger. No dissenters’ rights were exercised by any of the Company’s stockholders in connection with the migratory merger.
On February 6, 2025, the Company issued shares of its common stock to an individual for consulting services.
On February 11, 2025, the Company issued shares of its common stock to George Furlan as a bonus related to the merger.
On February 11, 2025, the Company issued shares of its common stock to James Mansour in full settlement of his amount due for past services. See Note 8.
11
On February 20, 2025, the Company issued shares of its common stock to satisfy the previous conversion of debt. See Note 5.
On February 26, 2025, the Company issued shares of its common stock to Pure Energy in exchange for the cancellation of all debt and related accrued interest. See Note 5.
On February 27, 2025, the Company issued shares of its common stock to Grace Court Advisors as a bonus related to the merger.
On March 11, 2025, the Company issued shares of its common stock to George Furlan as a bonus related to merger services.
On March 11, 2025, the Company issued shares of its common stock to a service provider for services.
On March 11, 2025, the Company issued shares of its common stock to Adriatic Advisors in exchange for the cancellation of all debt and related accrued interest. See Note 5.
On March 20, 2025, the Company issued to an investor who had purchased stock in May 2024, but was not issued at year end.
There were no other issuances of common stock during the quarter ended March 31, 2025.
On January 23, 2024, the Company sold shares
of its common stock to an investor for $
On February 15, 2024, the Company issued shares
of its common stock to an investor for $
On February 22, 2024, the Company issued
shares of its common stock to an investor for $
On February 22, 2024, the Company issued shares
of its common stock to an investor for $
On February 22, 2024, the Company issued
shares of its common stock to an investor for $
On March 14, 2024, the Company issued a total of shares of its common stock to a consultant for services rendered.
12
On March 28, 2024, the Company entered into a Settlement
and Release Agreement with a vendor pursuant to which the vendor agreed to forgive $
During April 2024, the Company issued shares of its common stock to the CEO, Dante Jones in lieu of cash payment for services.
On April 10, 2024 the Company issued shares of its common stock in lieu of cash payment for consulting services.
On September 20, 2024, the Company issued
shares of its common stock to a vendor in settlement of a trade payable of $
On December 17, 2024, the Company issued a total of shares of its common stock to a consultant for services rendered.
On December 17, 2024, the Company issued
shares of its common stock to an investor for $
On December 17, 2024, the Company issued shares
of its common stock to an investor for $
On December 17, 2024, the Company issued
shares of its common stock to an investor for $
On December 17, 2024, the Company issued shares
of its common stock to an investor for $
On December 17, 2024, the Company issued shares
of its common stock to an investor for $
On December 17, 2024, the Company issued a total of shares of its common stock to a consultant for services rendered.
On December 17, 2024, the Company issued shares
of its common stock to an investor for $
On December 17, 2024, the Company issued shares
of its common stock to a vendor in settlement of a trade payable of $
There were no other issuances of common stock during the year ended December 31, 2024.
13
NOTE 7. COMMITMENTS AND CONTINGENCIES
On December 26, 2019, the Company entered into an
Employment Agreement (the “Furlan Agreement”) with George Furlan pursuant to which Mr. Furlan was appointed as the Company’s
Chief Executive Officer. The Furlan Agreement provides for a base salary of $60,000 per year with such base salary being increased to
$
On January 8, 2020, the Company entered into an Executive
Consulting Agreement (the “Mansour Agreement”) with James Mansour pursuant to which Mr. Mansour was appointed as an Executive
Consultant. The Mansour Agreement provides for a base salary of $
The Company is currently involved in a wage dispute
with a former contractor dating back to the third quarter of 2020. The contractor claims to be due approximately $
In the first quarter of 2024, As of March 31, 2025, the consultant had not yet received the third cash payment and stock issuance. The Company has not recorded any charge for the third payment as of March 31, 2025. Subsequent to March 31, 2025, the consultant was issued shares of the Company’s common stock in full settlement of the agreement.
NOTE 8. SUBSEQUENT EVENTS
The Company has evaluated subsequent events for recognition and disclosure through May 15, 2025, which is the date the financial statements were available to be issued.
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Entry into Material Contracts
On April 10, 2025, the Company, through its wholly-owned subsidiary AIG F&B, a Nevada corporation (AIGFB) closed the Exchange Agreement (the “Exchange Agreement”) with American Industrial Group, a Florida corporation (“AIG”), which is owned and controlled by its shareholders, and which owns and controls several assets and lines of business of interest to the Company, through its subsidiary, pursuant to which AIGFB will acquire many of those assets and rights of AIG in exchange for acquisition credits, to be ultimately paid by the exchange of those credits for shares of common stock of SNBH (the “Acquisition Credits”). These Acquisition Credits will be issued by SNBH to AIG shareholders and/or their designees in accordance with an Earnout Schedule that was set forth in the Exchange Agreement, as filed with the SEC on April 11, 2025, as an exhibit (10.16) to the Form 8K/A5. Prior to the Closing, certain parties to the Exchange Agreement and large shareholders of the Company (collectively, the “Lockup Parties”) entered into lock-up leak-out agreements, which govern the manner in which such Lockup Parties may sell, transfer or dispose of their shares of common stock during the 21-month period following the Closing.
Changes to Management
Concurrently with the Closing of the Exchange Agreement, Dante Jones resigned as an executive officer and director of the Company; George Furlan was appointed as chief executive officer, president and chief financial officer of the Company, and as a non-independent director of the company. Eric Bruns and Dionne Pendelton were appointed as independent directors of the Company. The contracting parties agreed to indemnify each other for any losses that may be incurred by them as a result of their breach of any of their representations, warranties and covenants contained in the Exchange Agreement.
On April 2, 2025, the Company issued shares of its common stock to an individual in exchange for the cancellation of all debt and related accrued interest. See Note 5.
On April 3, 2025, the Company issued shares of its common stock to an individual in exchange for the cancellation of all debt and related accrued interest. See Note 5.
On April 15, 2025, the Company issued shares to a consultant for management services.
On April 16, 2025, the Company issued shares to a service provider for services provided related to the merger with AIG.
On April 17, 2025, the Company issued shares to a consultant for management services.
On April 28, 2025 the Company sold shares of its common stock to an investor for $. As of the date of this filing, the shares have not yet been issued.
On May 12, 2025,
No other matters were identified affecting the accompanying financial statements and related disclosures.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the results of operations and financial condition of Sentient Brands Holdings Inc. for the three months ended March 31, 2025 and 2024 should be read in conjunction with the Sentient Brands Holdings Inc. unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors, Special Note Regarding Forward-Looking Statements and Business sections in our Form 10-K as filed with the Securities and Exchange Commission on April 16, 2025. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.
Unless otherwise indicated, references to the “Company,” “us” or “we” refer to Sentient Brands Holdings Inc. and its subsidiaries.
Overview
Sentient Brands is a next-level product development and brand management company with a focus on building innovative brands in the Luxury and Premium Market space. The Company has a Direct-to Consumer business model focusing on the integration of wellness and beauty for conscious consumers. The Company incorporates an omnichannel approach in its marketing strategies to ensure that its products are accessible across both digital and retail channels. The Company develops and nurtures Lifestyle Brands with carefully thought-out ingredients, packaging, fragrance and design. Sentient Brands’ leadership team has extensive experience in building world-class brands such as Hugo Boss, Victoria’s Secret, Versace, and Bath & Body Works. The Company is focused on two key market segments targeting: wellness and responsible luxury, which the Company believes represent unique opportunities for its Oeuvre product line. Sentient Brands intends to leverage its in-house innovation capabilities to launch new products that “disrupt” adjacent product categories.
On April 10, 2025, the Company, through its wholly-owned subsidiary AIG F&B, a Nevada corporation (AIGFB) closed the Exchange Agreement (the “Exchange Agreement”) with American Industrial Group, a Florida corporation (“AIG”), which is owned and controlled by its shareholders, and which owns and controls several assets and lines of business of interest to the Company, through its subsidiary, pursuant to which AIGFB will acquire many of those assets and rights of AIG in exchange for acquisition credits, to be ultimately paid by the exchange of those credits for shares of common stock of SNBH (the “Acquisition Credits”). These Acquisition Credits will be issued by SNBH to AIG shareholders and/or their designees in accordance with an Earnout Schedule that was set forth in the Exchange Agreement, as filed with the SEC on April 11, 2025, as an exhibit (10.16) to the Form 8K/A5.
Principal Products and Services
All of our proprietary formulations contain clean, vegan, ethically and environmentally responsible ingredients. The Company currently has one main product line, and another in development. The Company’s current active product line is Oeuvre.
Oeuvre
Oeuvre - ”A Body of Art” – is a next generation luxury skin care line and lifestyle brand. The foundation of our system of products is our proprietary OE Complex: Botanicals + Gemstones formulation. Each product in the Oeuvre Artistry Collection optimizes three functions: cellular energy, moisture balance, and nutrient utilization. Four products comprise the Oeuvre collection:
| ● | Purifying Exfoliator | |
| ● | Replenishing Facial Oil | |
| ● | Ultra-Nourishing Face Cream | |
| ● | Revitalizing Eye Cream |
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Drawing inspiration from petals, leaves, roots, minerals and gemstones, Oeuvre celebrates the artistry of well-being and beauty, inside and out. Oeuvre products are non-toxic, ungendered products made with zero GMO, retinyl palmitate, petroleum, mineral oil, parabens, sulfates, and synthetic colors.
Oeuvre Target Market
Oeuvre is our luxury segment product line. With Oeuvre, we are targeting a large and influential consumer class of individuals that are “HENRYs” – High-Earners-Not-Rich-Yet. They have discretionary income and are highly likely to be wealthy in the future. HENRYs earn between $100,000 and $250,000 annually. They are digitally fluent, love online shopping online, and are big discretionary spenders. Therefore, ouvreskincare.com offers inclusive, affordable luxury products positioned for them.
We believe the benefit of onboarding this demographic to Oeuvre are twofold: securing valuable present customers and building relationships and business with those most likely to be amongst the most affluent consumers in the future. By the year 2025, Millennials and Generation Z will represent more than 40% of the overall luxury goods market, according to a report published by Boston Consulting Group. We seek to target such group for the sale of our Oeuvre products.
Suppliers
The Company has several third-party suppliers and is not reliant on any particular supplier for its product offerings.
Distribution
We have two primary methods through which we sell our products:
| 1. | Direct to Consumer online e-commerce platform | |
| 2. | Wholesale partners |
Marketing Strategy
We support our brand launches through social media and marketing campaigns, including utilizing influencers. Marketing and public relations firms are engaged by the Company to spearhead its launch of Oeuvre, and will likely be engaged for our future planned brand launches as well.
Growth Strategies
To grow our company, Sentient Brands intends to:
| ● | Create a leading consumer packaged goods company; | |
| ● | Partner with established distributers and retailers; | |
| ● | Focus on operational excellence and product quality; and | |
| ● | Establish ongoing communication with the capital markets |
The Company believes it has assembled a highly accomplished team of branding and marketing professionals who have a combined experience and track record of successfully launching and operating major brands in the consumer market space, which the Company believes will provide it with it a competitive edge in its industry.
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M&A Strategy
In Q3 2022, the Company launched an M&A strategy to identify high-margin, revenue generating businesses within above-average growth potential industry sectors as potential acquisition targets. on April 10, 2025, the Company, through its wholly-owned subsidiary AIG F&B, a Nevada corporation (AIGFB) closed the Exchange Agreement (the “Exchange Agreement”) with American Industrial Group, a Florida corporation (“AIG”), which is owned and controlled by its shareholders, and which owns and controls several assets and lines of business of interest to the Company, through its subsidiary, pursuant to which AIGFB will acquire many of those assets and rights of AIG in exchange for acquisition credits, to be ultimately paid by the exchange of those credits for shares of common stock of SNBH (the “Acquisition Credits”). These Acquisition Credits will be issued by SNBH to AIG shareholders and/or their designees in accordance with an Earnout Schedule that was set forth in the Exchange Agreement, as filed with the SEC on April 11, 2025, as an exhibit (10.16) to the Form 8K/A5.
Customers
The Company launched its Oeuvre product line in the fourth quarter of 2021. The Company’s sales channels are direct to consumer and wholesale.
Intellectual Property
The Company’s Oeuvre brand is trademarked in the United States, with a European trademark application pending. The Company expects to rely on trade secrets and proprietary know-how protection for our confidential and proprietary information, however we have not yet taken security measures to protect this information.
Competition
We have experienced, and expect to continue to experience, intense competition from a number of companies.
The current market is highly competitive, consisting of publicly-trade and privately-owned companies, many of which are more adequately capitalized than the Company.
Research and Development
We are continuously in the process of identifying and/or developing potential new products to offer to our customers. Our expenditures on research and development have historically been small and immaterial compared to our other business expenditures. We are currently developing new formulations for additional product lines.
Employees
We believe that our success depends upon our ability to attract, develop and retain key personnel. We currently employ one full-time employee. The Company otherwise currently relies on the services of independent contractors. None of our employees are covered by collective bargaining agreements, and management considers relations with our employees to be in good standing. Although we continually seek to add additional talent to our work force, management believes that it currently has sufficient human capital to operate its business successfully.
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Our compensation programs are designed to align the compensation of our employees with our performance and to provide the proper incentives to attract, retain and motivate employees to achieve superior results. The structure of our compensation programs balances incentive earnings for both short-term and long-term performance.
The primary mailing address for the Company is 590 Madison Avenue, 21st Floor, New York, New York 10022. The Company’s telephone number is (646) 202-2897. The Company’s website is www.sentientbrands.com.
Going Concern
We have a limited operating history, and our continued growth is dependent upon the continuation of selling our products to our customers; hence generating revenues and obtaining additional financing to fund future obligations and pay liabilities arising from normal business operations. We had an accumulated deficit of $5,161,123 and $4,669,826 at March 31, 2025 and December 31, 2024, respectively and a working capital deficit of $1,355,128 and $2,206,318 at March 31, 2025 and December 31, 2024, respectively. The report of our independent registered public accounting firm on our financial statements for the year ended December 31, 2024 contained an explanatory paragraph regarding our ability to continue as a going concern based upon cash used in operating activities and the current cash balance cannot be projected to cover the operating expenses for the next twelve months from the release date of this report. These factors, among others, raised substantial doubt about our ability to continue as a going concern. Our financial statements appearing elsewhere in this report do not include any adjustments that might result from the outcome of this uncertainty. There are no assurances we will be successful in our efforts to generate significant revenues or report profitable operations or to continue as a going concern, in which event investors would lose their entire investment in our company.
Our ability to continue as a going concern is dependent upon our ability to carry out our business plan, achieve profitable operations, obtain additional working capital funds from our significant shareholders, and or through debt and equity financings. However, there can be no assurance that any additional financings will be available to us on satisfactory terms and conditions, if any.
The accompanying consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We continually evaluate our estimates, including those related to bad debts, recovery of long-lived assets, income taxes and the valuation of equity transactions.
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We base our estimates on historical experience and on various other assumptions that we believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the consolidated financial statements.
Revenue Recognition
We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or products have been sold, the purchase price is fixed or determinable and collectability is reasonably assured.
Our customers place orders for our products pursuant to their purchase orders and we are paid by our customers pursuant to our invoices. Each invoice calls for a fixed payment in a fixed period of time. We recognize revenue by selling our products under our customers’ purchase orders and our related invoices to our customers. Revenue related to the sales of our products to our customers is recognized as the products are sold and amounts are paid, using the straight-line method over the term of the sales transaction. Prepayments, if any, received from customers prior to the products being delivered are recorded as advance from customers. In these cases, when the products are sold, the amount recorded as advance from customers is recognized as revenue.
Income Taxes
We are governed by the income tax laws of the United States. Income taxes are accounted for pursuant to ASC 740 “Accounting for Income Taxes,” which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. The charge for taxes is based on the results for the period as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences, and deferred tax assets are recognized to the extent that it is probably that taxable profit will be available against which deductible temporary differences can be utilized.
Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized, or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is changed to equity. Deferred tax assets and liabilities are offset when they related to income taxes levied by the same taxation authority and we intend to settle its current tax assets and liabilities on a net basis.
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Stock-based Compensation
Stock based compensation is accounted for based on the requirements of the Share-Based Payment topic of Accounting Standards Codification (“ASC”) 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award. The Accounting Standards Codification also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.
Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the period of services or the vesting period, whichever is applicable. Until the measurement date is reached, the total amount of compensation expense remains uncertain. We record compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third parties are then revalued, or the total compensation is recalculated based on the then current fair value, at each subsequent reporting date.
Recent Accounting Pronouncements
Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on our consolidated financial statements upon adoption. We do not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to our consolidated financial condition, results of operations, cash flows or disclosures.
RESULTS OF OPERATIONS
Comparison of Results of Operations for the three months ended March 31, 2025 and 2024
Revenue
We did not generate any revenue during the three months ending March 31, 2025 and 2024.
Operating Expenses
For the three months ended March 31, 2025 and 2024, operating expenses consisted of the following:
| 2025 | 2024 | |||||||
| Advertising and Marketing | — | — | ||||||
| General and Administrative | 7,652 | 7,886 | ||||||
| Legal and Professional | 217,038 | 316,283 | ||||||
| Management Fees | 268,860 | 28,600 | ||||||
| TOTAL OPERATING EXPENSES | 493,550 | 352,769 | ||||||
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| ● | General and administrative fees totaled $7,652 for the three months ended March 31, 2025 representing a decrease of $234 compared to the total of $7,886 for the three months ended March 31, 2024. We have implemented austerity measures as we seek additional capital and merger or acquisition opportunities. | |
| ● | Legal and professional fees primarily consisted of accounting fees, legal service fees, consulting fees, investor relations and other fees incurred for service related to being a public company. For the three months ended March 31, 2024, professional fees totaled $217,038 which is a decrease of $99,245 compared to total expense of $316,283 for the three months ended March 31, 2024. The majority of the expense in the first quarter of 2024 is related to the merger deal which was consummated in April 2025. The majority of the expense in 2024 was attributed to the $258,000 non-cash expense of market value of 2,000,000 shares issued to a consultant related to the merger deal. | |
| ● | Our management fees are comprised mainly of salaries paid to our management staff. For the first three months of 2024, we recorded an expense of $268,860 of management fees for work associated with negotiated and closing the merger deal in April 2025. Fees totaling 28,600 were recognized for the first three months of 2024 for work associated with fund raising and merger activity. |
Loss from Operations
The Company’s operating loss for the three-month period ended March 31, 2025 and 2024 was $493,550 and $352,769, respectively. The increase in operating loss of $140,781 was primarily attributed to the non-cash expense related to stock issued for professional services and management fees.
Income Taxes
We did not have any income taxes expense for the three months ended March 31, 2025 and 2024.
Net Loss
Our net loss for the three months period ended March 31, 2025 and 2024 was $491,297 and $416,754, respectively.
Liquidity and Capital Resources
The consolidated financial statements have been prepared using generally accepted accounting principles in the United States of America (“GAAP”) applicable for a going concern, which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of business.
To the extent we are successful in growing our business both organically and through acquisition, we continue to plan our working capital and the proceeds of any financing to finance such acquisition costs.
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and otherwise operate on an ongoing basis. At March 31, 2025, we had a cash balance of $1,839. These funds are kept in financial institutions located in United States.
As of March 31, 2025, we had total current assets of $6,789, consisting of $1,839 in cash and prepaid expenses of $4,950. Our total current liabilities as of March 31, 2025 were $1,361,917 We had a working capital deficit of $1,355,128 as of March 31, 2025.
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Our ability to continue as a going concern is dependent upon our ability to carry out our business plan, achieve profitable operations, obtain additional working capital funds from our significant shareholders, and or through debt and equity financings. However, there can be no assurance that any additional financings will be available to us on satisfactory terms and conditions, if any.
The accompanying consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.
Cash Flows from Operating Activities
Operating activities used $7,593 in cash for the three months ended March 31, 2025, compared with cash used of $112,606 for the three months ended March 31, 2023. Our negative operating cash flow for the three months ended March 31, 2024, was largely the result of our net loss of $491,297 offset by non cash expense for consulting services of $395,360. Our payables for the quarter increased by $92,325. Operating activities used $112,606 in cash for the three months ended March 31, 2024, compared with cash used of $10,264 for the three months ended March 31, 2023. Our negative operating cash flow for the three months ended March 31, 2024, was largely the result of our net loss of $416,754 offset by non cash expense for consulting services of $258,000. Our payables for the quarter increased by $52,066.
Cash Flows from Financing Activities
There were no cash flow from investment activities for the three months ended March 31, 2025 and 2024.
Cash Flows from Financing Activities
Net cash flows provided by financing activities during the three months ended March 31, 2025, amounted to $6,000 compared with cash flows provided by financing activities of $179,000 for the three months ended March 31, 2024. Our positive cash flows for the three months ended March 31, 2024 and 2023 consisted of proceeds from the sale of common stock.
Going Concern
As of March 31, 2025, we have an accumulated deficit of $5,161,123. Our ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and our ability to achieve and maintain profitable operations. While we are expanding our best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations. These conditions raise substantial doubt about our ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty.
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We will need to raise additional funds, particularly if we are unable to generate positive cash flow as a result of our operations. We estimate that based on current plans and assumptions, that our available cash will be insufficient to satisfy our cash requirements under our present operating expectations. Other than working capital and advance received from related parties and funds received pursuant to securities purchase agreements, we presently have no other significant alternative source of working capital. We have used these funds to fund our operating expenses, pay our obligations and grow our company. We will need to raise significant additional capital to fund our operations and to provide working capital for our ongoing operations and obligations. Therefore, our future operation is dependent on our ability to secure additional financing. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of our common stock and a downturn in the U.S. equity and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. The inability to obtain additional capital may restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we will be required to cease our operations. To date, we have not considered this alternative, nor do we view it as a likely occurrence.
Contractual Obligations and Off-Balance Sheet Arrangements
None
Contractual Obligations
We presently do not have any contractual obligations.
Off-balance Sheet Arrangements
We presently do not have off-balance sheet arrangements.
Inflation
The effect of inflation on our revenue and operating results was not significant.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this Item.
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ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of March 31, 2023, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities Exchange Commission’s rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of March 31, 2025, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses identified and described below.
Our principal executive officers do not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive officers have determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a 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 limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Management identified the following three material weaknesses that have caused management to conclude that, as of March 31, 2025, our disclosure controls and procedures, and our internal control over financial reporting, were not effective at the reasonable assurance level:
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| 1. | We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act as of the period ending March 31, 2025. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness. |
| 2. | We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness. |
| 3. | Effective controls over the control environment were not maintained. Specifically, a formally adopted written code of business conduct and ethics that governs our employees, officers, and directors was not in place. Additionally, management has not developed and effectively communicated to employees its accounting policies and procedures. This has resulted in inconsistent practices. Further, our Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness. |
To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.
To remediate the material weakness in our documentation, evaluation and testing of internal controls we plan to engage a third-party firm to assist us in remedying this material weakness once resources become available.
We intend to remedy our material weakness with regard to insufficient segregation of duties by hiring additional employees in order to segregate duties in a manner that establishes effective internal controls once resources become available.
Changes in Internal Controls over Financial Reporting
There were no changes (including corrective actions with regard to material weakness) in our internal controls over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we are subject to ordinary routine litigation incidental to our normal business operations. We are not currently a party to any litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business, operating results, cash flows or financial condition.
ITEM 1A. RISK FACTORS
Risk factors describing the major risks to our business can be found under Item 1A, “Risk Factors”, in our Annual Report on Form 10-K for the year ended December 31, 2024. There has been no material change in our risk factors from those previously discussed in the Annual Report on Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
On February 6, 2025, the Company issued 3,000,000 shares of its common stock to two individual for consulting services.
On February 11, 2025, the Company issued 3,680,000 shares of its common stock to George Furlan as a bonus related to the merger.
On February 11, 2025, the Company issued 1,700,000 shares of its common stock to James Mansour in full settlement of his amount due for past services. See Note 8.
On February 20, 2025, the Company issued 3,272,031 shares of its common stock to satisfy the previous conversion of debt. See Note 5.
On February 26, 2025, the Company issued 15,507,121 shares of its common stock to Pure Energy in exchange for the cancellation of all debt and related accrued interest. See Note 5.
On February 27, 2025, the Company issued 1,540,000 shares of its common stock to Grace Court Advisors as a bonus related to the merger.
On March 11, 2025, the Company issued 2,000,000 shares of its common stock to George Furlan as a bonus related to merger services.
On March 11, 2025, the Company issued 1,000,000 shares of its common stock to a service provider for services.
On March 11, 2025, the Company issued 10,467,460 shares of its common stock to Adriatic Advisors in exchange for the cancellation of all debt and related accrued interest. See Note 5.
On March 20, 2025, the Company issued 1,000,000 to an investor who had purchased stock in May 2024, but was not issued at year end.
On April 2, 2025, the Company issued 247,250 shares of its common stock to an individual in exchange for the cancellation of all debt and related accrued interest. See Note 5.
On April 3, 2025, the Company issued 1,032,465 shares of its common stock to an individual in exchange for the cancellation of all debt and related accrued interest. See Note 5. |
On April 15, 2025, the Company issued 300,000 shares to a consultant for management services.
On April 16, 2025, the Company issued 2,000,000 shares to a service provider for services provided related to the merger with AIG.
On April 17, 2025, the Company issued 430,000 shares to a consultant for management services.
On April 28, 2025 the Company sold 600,000 shares of its common stock to an investor for $30,000. As of the date of this filing, the shares have not yet been issued.
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The offers, sales, and issuances of the securities described above were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended and/or Rule 506 as promulgated under Regulation D as transactions by an issuer not involving a public offering. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions was an accredited or sophisticated person and had adequate access, through employment, business or other relationships, to information about us.
The Company claims an exemption from the registration requirements of the Securities Act of 1933 (the “Securities Act”) for the issuances of the above securities pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act. The investors in these securities are accredited investors as defined in Rule 501 of Regulation D promulgated under the Securities Act. As of the date hereof, the Company is obligated on the above notes issued to the investor. The above notes are a debt obligation arising other than in the ordinary course of business which constitute a direct financial obligation of the Company.
The foregoing information is a summary of each of the agreements involved in the transaction described above, is not complete, and is qualified in its entirety by reference to the full text of those agreements, each of which is attached an exhibit to this Quarterly Report on Form 10-Q. Readers should review those agreements for a complete understanding of the terms and conditions associated with this transaction.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
During the quarter ended March 31, 2025, no director
or Section 16 officer
ITEM 6. EXHIBITS
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
* Filed herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SENTIENT BRANDS HOLDINGS INC. | ||
| Date: May 15, 2025 | By: | /s/ George Furlan |
| George Furlan | ||
| Chief Executive Officer (Principal Executive Officer) | ||
| Date: May 15, 2025 | By: | /s/ George Furlan |
| George Furlan | ||
| Chief Financial Officer (Principal Financial and Accounting Officer) | ||
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