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

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

You should read the following discussion and analysis of our financial condition and plan of operations together with and our consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, those discussed in the section titled "Risk Factors" included elsewhere in this Quarterly Report on Form 10-Q and the risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022. All amounts in this report are in U.S. dollars, unless otherwise noted.





Overview

We are engaged in the development and sale of alcohol and non-alcohol brands that are "better-for-you" ("BFY") and "better-for-the-planet". TopPop, our wholly owned subsidiary, produces low calorie, "ready to go" products, ready-to-freeze ("RTF") products and ready-to-drink ("RTD") products in sustainable, flexible and stand-up pouch packaging. TopPop also produces "cocktails-to-go" pouches and alcohol ice-pops. Our brands include "Bellissima" by Christie Brinkley, a premium BFY collection of Prosecco, Sparkling Wines, and Still Wines, all certified vegan and made with organic grapes. Bellissima is strategically positioned with its Zero Sugar Wines. We operate in multiple states, sell and distribute across the globe and have Fortune 500 customers that include some of the world's largest alcohol beverage companies and brands. United is our 100% owned subsidiary that sells our Bellissima, Bella, Sonja Sangria and other alcohol beverages to state distributors. United holds all applicable state and federal licenses in order to sell these products to state distributors in accordance with the United States three tier distribution platform.






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We have expertise in developing, from product inception to wholesale distribution or direct to consumer through the QVC distribution channel, and in branding alcohol beverages for our company and for third parties. We market and place products into national distribution through long-standing industry relationships approximately 45 national or regional alcoholic beverage distributors. We currently market and sell the following product lines:





    ·   Bellissima Prosecco - these products comprise a line of all-natural and
        vegan Prosecco and Sparkling Wines made with organic grapes, including a
        Zero Sugar, Zero Carb option, a DOC Brut and a Sparkling Rose. The
        Bellissima line of Prosecco and Sparkling Wines includes two new flavor
        profiles, a Zero Sugar/Zero Carb Sparkling Rose and a Rose Prosecco;

    ·   Bellissima Zero Sugar Still Wines - this line of five still wines was
        launched in March 2022 and are certified vegan and are made with organic
        grapes;

    ·   Bella Sprizz Aperitifs - these products comprise a line of aperitifs
        consisting of three different expressions, a classic Italian aperitif, an
        all-natural elderflower aperitif and a classic Italian bitter;

        Sonja Sangria - a celebrity Sangria that we have sold since the May 2021.
    ·   This product is actively being marketed but does not represent a
        significant part of our sales;

    ·   Ready-to-Freeze and Ready-to-Drink Alcoholic Products - these products are
        currently produced under contract for third-party national and regional
        brands and for our Boozy Pops® product line; and

    ·   BiVi Vodka - a celebrity-branded vodka that we have sold since 2018 under
        the brand "BiVi 100 percent Sicilian Vodka" and which currently does not
        represent a material portion of our sales.

In addition, we develop and market private label spirits for established domestic and international chains.

As a result of our July 2021 acquisition of 100% of the equity of TopPop, we are now a vertically integrated company that develops, produces and distributes alcoholic brands. TopPop is a premier product development, contract manufacturing and packaging company that specializes in flexible packaging applications in the food, beverage and health categories. It has the federal and state licenses necessary to manufacture and blend malt, wine and spirits-based products. In June 2020, TopPop opened a 27,000-square-foot FDA-approved manufacturing facility in Marlton, New Jersey with a Safe Quality Food certification. In September 2021, TopPop leased a 64,000 square foot facility for manufacturing in Pennsauken, New Jersey. Construction is now complete, and the facility reached full-scale production capability at the end of March 2022. The facility includes approximately $4 million of high-speed packaging equipment and is expected to triple our production capacity. In February 2022, TopPop leased an 82,000 square foot warehouse in Pennsauken, NJ.

For its first product line, TopPop identified the single serve, RTD and RTF as an opportunity for product and packaging innovation. TopPop introduced an alcohol-infused ice pop in June 2020 and began marketing the concept to major alcohol companies. In addition, it developed its own product line trademarked under the name BoozyPopz® which is expected to be sold through e-commerce platforms and wholesaled directly to sports and entertainment venues. TopPop manufactured approximately eight million ice pops from its launch in June 2020 through December 31, 2020 and manufactured approximately 42 million ice pops during the year ended December 31, 2021. TopPop has also developed a pipeline for the single serve, RTD alcohol cocktail market and anticipates launching a line of products in this market in 2022. TopPop designs and markets flexible packaging for its RTD and RTF products with formulations that are low calorie and contain healthy and natural ingredients. With the opening of TopPop's new facility at the end of the first quarter of 2022, we expect to have the capacity to manufacture over 150 million units by the end of 2022.






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We believe TopPop brings to us additional synergies and opportunities for cross-promoting new and existing products to a broader customer base and better positions our company to establish and support our brands and to create sustainable packaging solutions to the consumable goods market. We believe our focus on lifestyle branding and the rising "Better-for-You," "Better-for-the-Planet" consumer categories has made us a leader in developing celebrity brands worldwide, such as our Bellissima Prosecco by Christie Brinkley. Our mission is to be an industry leader in the brand development, marketing and sales of alcoholic beverages and related products by capitalizing on our ability to procure products from around the world and to develop unique and innovative packaging to create brand and product line extensions. We plan to leverage our relationships to add value to our products and to create brand awareness in unbranded niche categories.





Recent Developments

Results of Operations for the Three Months Ended September 30, 2022 and 2021





Introduction

We had sales of $3,162,422 for the three months ended September 30, 2022, and $2,846,437 for the three months ended September 30, 2021, an increase of $315,985. Our operating expenses were $4,641,457 for the three months ended September 30, 2022, compared to $2,612,226 for the three months ended September 30, 2021, an increase of $2,029,231 or approximately 78%. Our net operating loss was $4,026,000 for the three months ended September 30, 2022, compared to $1,916,877 for the three months ended September 30, 2021, an increase of $2,109,123 or approximately 110%.






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Revenues and Net Operating Loss

Our operations for the three months ended September 30, 2022, and 2021 were as follows:

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