FORWARD LOOKING STATEMENTS


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

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

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

As used in this quarterly report and unless otherwise indicated, the terms "we", "us", "our", "JUPW" and the "Company" mean Jupiter Wellness, Inc.

General Overview

Jupiter Wellness, Inc. ("Company," "Jupiter Wellness" "we," "us," and "our") was originally incorporated in the State of Delaware on October 24, 2018. Our principal business address is 1061 E. Indiantown Rd #110, Jupiter, FL 33477.

Jupiter Wellness, Inc. is a cutting-edge developer of cannabidiol (CBD) based
medical therapeutics and wellness products. The Company's clinical pipeline of
prescription CBD-enhanced skin care therapeutics address indications including
eczema, burns, herpes cold sores, and skin cancer. We are in the early stage of
manufacturing, distributing, and marketing a diverse line of consumer products
infused with CBD. We have a proprietary, line of products: CaniSun, CaniSkin and
CaniDermRX. Under the CaniSun brand, we are marketing patent pending CBD-infused
sun care lotion formulas containing various sun protection factors, or SPFs. In
addition, we are exploring the use of CBD with other prescription and/or
over-the-counter, or OTC, consumer products that have potentially therapeutic
and medical applications. Specifically, we are exploring the use of such topical
solutions for the treatment of eczema, dermatitis (JW-100), and actinic
keratosis (JW-100), a non-prescription lotion/lip balm (JW-200) for the
treatment of symptoms of cold sores, and a prescription product for the
treatment of burns (JW-101). The CaniDermRX (JW-100) topical solution for the
treatment of eczema dermatitis is the lead product candidate and will be further
tested in humans as an investigational cosmetic ingredient followed by clinical
trials subject to the regulations of the United States Food and Drug
Administration ("FDA") under an investigational new drug, or IND, application.
In February 2021, we announced the results of our novel Cannabidiol-Aspartame
combination treatment JW-100 clinical trial which has shown it significantly
Reduces ISGA Score in Eczema patients. A double blinded placebo controlled
interventional study was conducted. Subjects were assigned to apply, at home,
one of three treatments: JW-100 (a CBD and aspartame combination topical
formulation), a CBD only topical formulation, or a placebo topical formulation.
After 14 days, the average reduction in the Investigators Static Global
Assessment (ISGA) score was calculated for each group. Additionally, the
proportion of subjects achieving (ISGA) score 0 (clear) or 1 (almost clear) with
at least 2 grade improvement from baseline was recorded for each arm of the
study. 50% of subjects in the JW-100 arm achieved ISGA clear or almost clear (1
or 2) with at least a 2-grade improvement from baseline after treatment versus
20% and 15% in the CBD-only and placebo arms, respectively. The percentage of
subjects achieving clear or almost clear with at least a 2-grade improvement
from baseline was found to be statistically significant (p=0.028). JW-100, a
novel topical formulation containing CBD and aspartame, was shown to
significantly reduce ISGA score in atopic dermatitis patients after two weeks of
use. The combination of CBD and aspartame was more effective at reducing ISGA
scores than CBD alone.

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In parallel, we plan to initiate the development of other products. We
originally anticipated developmental studies to be completed in 2020, however,
these studies were delayed due to COVID-19. We are also actively seeking to
acquire or license products in the OTC skin care market that can be infused with
CBD and marketed under our CaniSkin and CaniDermRX brand names. There can be no
assurances that we will acquire or enter into such partnership or licensing
agreements.


In November 2021, Jupiter Wellness received an official written response from a
Type B pre-Investigational New Drug (IND) meeting with the U.S. Food and Drug
Administration (FDA) for JW-100, a topical drug the treatment of eczema. The
main purpose of the pre-IND meeting was to evaluate the drug development plan
for JW-100. Jupiter Wellness believes that the written response from the FDA
supports the Company's approach and its overall drug development strategy to
enable the filing of an IND for its clinical studies on JW-100.



On November 16, 2021, Jupiter Wellness announced the results of a double-blinded
placebo controlled clinical trial on JW-300 showing efficacy for the treatment
of developing burns (sunburn).


The endocannabinoid system, which is a body system affected by CBD, plays a
pivotal role in maintaining a healthy skin through modulating pain sensation,
cell proliferation and inflammation. Our strategy for treatment of skin
indications is, therefore, to focus on the use of CBD containing topical
formulations and to explore potential combinations of CBD and other agents that
may augment and act synergistically with CBD. We will explore this strategy by
conducting controlled clinical trials to try to ultimately gain FDA approval for
specific indications.

On November 30, 2020, the Company acquired SRM Entertainment, Limited, a Hong
Kong Special Administrative Region of the People's Republic of China limited
company ("SRM"). SRM has relationships with and supplies the amusement park
industry with exclusive products that are often only available to consumers
inside the relevant amusement park, entertainment venues and theme hotels in
Orlando Florida, Beijing China, Japan and other places throughout the worldwide
theme park industry.

CaniSun Brand

Under our CaniSun Brand, we developed a patent pending CBD-infused sunscreen
with broad-spectrum SPF protection. We have completed lab testing for CBD
solubility-infusing clear, colorless, odorless, and 99.5% pure CBD isolate with
three different sun care active ingredients, homosalate, octisalate and
octocrylene, which have already been approved by the FDA. The CBD-infused sun
care market is fairly nascent in the United States; we believe that there are
currently no major competitors in the category. We see an opportunity to become
the leading manufacturer of CBD-infused sun care products, marketing the CaniSun
brand through an extensive digital and social media awareness campaign. We
announced the launch of our CaniSun sun care line of SPF 30, SPF 55 and SPF 50
face lotion on June 6, 2019. We also sell our CBD-infused lip balm and
CBD-infused SPF 30 sunscreen spray on our website Canisun.com.

We currently have additional CaniSun products in various stages of development as follows:



  i)   CBD-infused SPF 30 Lip Balm, Peppermint and Acai Fragrance

  ii)  CBD-infused SPF 15 sunscreen daily lotion; and

  iii) Mineral-based sunscreen lotions (SPF 30 and 50).




All of the products listed above are in the developmental stage, whereby we are
finalizing the formula to be used in each product, respectively. For CBD-infused
product candidates in development, such as our CBD-infused SPF 30 Lip Balm and
CBD-infused SPF 15 sunscreen lotion, we have already identified the sun care
active ingredient formula (which has already been FDA approved) to be infused
with CBD. Once the respective formulas for each of our product candidates are
created, the product candidates will undergo three months of stability testing.
Provided that the product candidates pass the stability testing, we intend to
sell the products on our CaniSun website. The formula for our mineral-based
sunscreen lotion (SPF 30 and 50) (product iii) above) includes certain minerals
instead of chemicals typically used in sunscreen lotions.

Overall, we believe that our currently offered sunscreen products comply with
the FDA Final Rule for sunscreen products under 21 CFR 352 Sunscreen products
for Over-the-Counter Human Use. Therefore, we believe that our sunscreen
products fall within the FDA monograph and that FDA premarket approval and
testing is not required. Our products have been tested for SPF Evaluation (SPF
rating), Critical Wave Length (Broad Spectrum claim) and Water Resistance, each
of which is defined within the monograph and labeled accordingly.

All of the testing on these products is standard testing for suncare products.
Such testing protocols are not intended to test for any effects of adding CBD.
In addition to these tests that were conducted to support the claims on the
package, each batch is also tested for appearance, color, odor, pH, viscosity,
specific gravity, analytical for the sunscreen active ingredients, and microbial
content testing.

Our products are tested each time they are manufactured. DCR Labs manufactures
our products and has represented to us that it is compliant with the FDA's
Current Good Manufacturing Practice, or CGMP, regulations in accordance with 21
CFR 210/211 required for Over-the-Counter drug products. DCR Labs has
self-imposed health and safety standards to ensure compliance with the FDA's
CGMPs.

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We expect to continually update and expand upon our corporate website and
further refine our online retail strategies on an ongoing basis.
JupiterWellness.com is our primary corporate website, which will serve as the
primary source of information about us for investors and contain press releases,
clinical trial pipeline, lab reports, blog posts, and additional information
about each of our brands. We anticipate that each brand will have its own
front-facing website dedicated to retail sales and brand specific information.
For example, our line of sun care products, CaniSun, has its own website at
CaniSun.com and allows for online retail purchase of the entire product line. As
we expand our brands (CaniSkin and CaniDermRX), we anticipate utilizing the same
strategy and dedicating a new e-commerce website to each brand moving forward.
We are also building a website dedicated to servicing our wholesale and larger
distributor clients. This website will have more information about each product
and provide a central location for larger retailers to find more in-depth
information about all of our brands in one place.

We plan to leverage our websites with a social media presence across multiple
platforms designed to utilize product reviews to increase brand loyalty, brand
recognition and sales. The references to our website in this prospectus are
inactive textual references only. The information on our website is neither
incorporated by reference into this prospectus nor intended to be used in
connection with this offering. We also see growth potential in developing retail
locations. We intend to utilize cross-promotion marketing campaigns with our
products and product category expansion that leverages our existing distribution
channels. We have built an e-commerce platform designed to connect us directly
to consumers. We use the platform to sell products, educate customers and build
brand loyalty.

CaniSkin Brand and CaniDermRX Brand



We are currently developing other products such as CBD-infused skin care lotion
under the CaniSkin brand. Specifically, a CBD-infused moisturizing face serum is
under development. We must first finalize the formula to be used in the face
serum, and, once approved, the product candidate will undergo stability testing.
We intend to sell the product, provided it first passes stability testing, on
our website for CaniSkin products. Additionally, we are developing innovative
dermatological treatments under the CaniDermRX brand that are specialized to
treat atopic dermatitis and other dermatological conditions such as burns, skin
cancer and herpes cold sores, respectively. Subject to obtaining FDA approval,
we intend for our experimental-stage product for the treatment of atopic
dermatitis to compete with Dupixent, an FDA-approved product for treating atopic
dermatitis, and for our experimental-stage product for the treatment of herpes
cold sores to compete with Silvadene and Abreva, FDA-approved products for
treating herpes cold sores. These products require more extensive testing to
show both safety and efficacy.

In addition, we plan to seek acquisition opportunities in the branded consumer
products space, including but not limited to other OTC therapeutic brands and
skin care brands that can be developed, manufactured, marketed and distributed
under our CaniSkin and CaniDermRX brand names.

We filed a provisional patent number 62/884,955 on 08/09/2019 on an
Aspartame/CBD combination and intend to develop products containing a
combination of CBD and Aspartame under the CaniDermRX name for the treatment of
pain and inflammation. On February 11, 2021, the US Patent Published our US
Patent Application 20210038513 and on April 5, 2021 we filed the International
filing through PCT Application PCT/US 2020/045408. We believe that our
CaniDermRX product candidates have the potential to treat many skin indications
such as atopic dermatitis, pruritis-itch, non-atopic dermatitis/eczema,
psoriasis, dermatomyositis, scleroderma, seborrheic dermatitis, actinic
keratosis, epidermolysis bullosa and cutaneous neoplasias. Aspartame is a
rigorously tested food ingredient. Reviews by major governmental regulatory
bodies have previously found the ingredient safe for consumption at higher
levels than we contemplate using in our CaniDermRX product candidates. We
believe that our formulations that include Aspartame, such as topical crème, lip
balm, powder and dog treats, are well-tolerated by, and safe for, users. We
believe that infusing CBD in our products may help alleviate irritation that may
be caused by applying sun care products and may lead to reduced inflammation. In
human skin, receptors of the endocannabinoid system are found in differentiated
keratinocytes, hair follicle cells, sebaceous glands, immune cells, and sensory
neurons. Activation of cannabinoid receptor type 2, or CB2, for which CBD is a
ligand receptor in these cells has been shown to reduce pain and itch sensation,
regulate keratinocyte differentiation and proliferation, decrease hair follicle
growth, and modulate the release of damage-induced keratins and inflammatory
mediators to control the homeostasis of the skin environment.


SRM Acquisition



On November 30, 2020, we entered into and closed the Exchange Agreement with
SRM, a Hong Kong Special Administrative Region of the People's Republic of China
limited company and wholly owned subsidiary of Vinco, and SRM Shareholders,
pursuant to which we acquired 100% of the SRM Common Stock from the SRM
Shareholders in exchange for 200,000 shares of the Company's common stock, the
resale of which is subject to a leak out provision and escrow of 50,000 shares
of the Company's common stock. Upon closing, and pursuant to the Exchange
Agreement, the Company delivered the 150,000 shares of its common stock to SRM
and placed 50,000 shares in escrow ("Escrow Shares"). Pursuant to the Exchange
Agreement, the Company shall release the Escrow Shares upon SRM generating
$200,000 in cash receipts and revenue prior to January 15, 2021. The Escrow
shares have not been released as of the date hereof. Pursuant to the Exchange
Agreement, the Company assumed all of the financial obligations of SRM, as well
as its employees and offices. As a result of the Exchange Agreement, SRM became
a wholly-owned subsidiary of the Company.



SRM has relationships with and supplies the amusement park industry with
exclusive products such as toys, lights, fans and other items that are sold in
amusement parks. SRM has developed, manufactured and supplied the amusement park
industry with exclusive products that are often only available to consumers
inside the relevant amusement park, entertainment venues and theme hotels in
Orlando Florida, Beijing China, Japan and other places throughout the worldwide
theme park industry. . SRM has developed unique products in conjunction with
suppliers of products for core licensed items for major well-known brands,
themes, characters and movies.



Products developed by SRM are generally shipped directly to the theme park
without warehousing at the Company's facilities. SRM does not have long-term
agreements with its customers, and instead develops products on an item-by-item
basis subject to purchase orders from its customers.



Through SRM, we additionally intend to seek to sell our sun care products in the
amusement parks. We are currently developing a line of non-CBD infused sun care
products for sale in the amusement parks.


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Recent Developments

In July 2021, the Company closed an underwritten public offering (the
"Offering") of 11,066,258 shares (the "Company Offering Shares") of common
stock, par value $0.001 per share and warrants (the "Company Warrants") to
purchase up to 11,607,142 shares of Common Stock. The Warrants will be
exercisable immediately upon issuance with an exercise price of $2.79 per share
and will expire on the fifth anniversary of the original issuance date. The net
proceeds from the Offering, after deducting underwriting discounts and
commissions and Offering expenses, were $28,318,314, which includes net proceeds
from partial exercise of the underwriter's option to purchase 1,741,071 Company
Warrants, representing 15% of the Company Warrants sold in the base offering.

On November 3, 2021, the Company filed a registration statement with the
Securities and Exchange Commission to sponsor Jupiter Wellness Acquisition
Corporation ("JWAC") a SPAC, dedicated to investing in AI based therapeutics and
diagnostics with an initial funding target of $100M. As of March 31, 2022, the
Company had loaned $293,300 to Jupiter Wellness Sponsor LLC ("JWSL"), an
affiliate, which in turn loaned the funds to JWAC. If the offering is
successful, JWSL is obligated to purchase 425,000 Units ($4,250,000) in
connection with the Offering. The Company's portion of the obligation would be
$2,050,000. In October 2021, the Company amended Brian John's employment
agreement and title to also make him the Chief Investment Officer of Jupiter
Wellness, Inc., Jupiter Wellness Investment Corp. and Jupiter Wellness
Acquisition Corp.. Pursuant to the amendment, he is entitled to twenty percent
(20%) of the net profits realized from any investments made by Mr. John.

On January 20, 2022 the Company received a letter from Nasdaq stating that,
because the Company made the Share Grants not pursuant to the 2021 Equity Plan
despite them considered to be S-8 eligible, Nasdaq had determined that the
Company did not comply with Listing Rule 5635(c). It was brought to our
attention that 180,000 shares of common stock, out of the total 1,020,000 shares
of common stock to consultants (the "Consulting Share Awards") that were issued
to three consultants, Greentree Financial (100,000 shares), Inc., L&H Inc.
(20,000 shares), and Tee 2 Green Enterprises, Ltd. (60,000 shares), during the
relevant period (the "Share Grants"), should have been issued pursuant to the
2021 Equity Plan because the Share Grants were considered to be S-8 eligible. As
a result, the inadvertent issuance of the Share Grants to the mentioned-above
three consultants was not made in compliance with Listing Rule 5635(c). The
Company subsequently notified Nasdaq that the Board has approved the
reallocation of the Share Grants to be accounted for as if they were originally
issued under the 2021 Equity Plan, and has made the corresponding change to the
Company's books and records. However, since the 2021 Equity Plan has previously
been exercised in full, to allow for the reallocation of the Share Grants under
the 2021 Equity Plan, on January 17, 2022, the Board determined that 100,000
options that have previously been issued under the 2021 Equity Plan to Brian
John, and 100,000 options issued to Dr. Glynn Wilson be cancelled, a revocation
to which Messrs. John and Wilson have agreed. Following the remedial measures,
on January 20, 2022, the Company was informed that the Company has regained
compliance with the Rule and that this matter is now closed.

Basis of Presentation



The accompanying consolidated financial statements are presented in conformity
with accounting principles generally accepted in the United States of America
("GAAP") and pursuant to the rules and regulations of US Securities and Exchange
Commission ("SEC"). The consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiaries, Jupiter Wellness, Inc., a
Florida corporation, Magical Beasts, LLC, a Nevada limited liability company,
SRM Entertainment, Limited, a Hong Kong private limited company, and Jupiter
Wellness Investments, Inc., a Florida corporation. All intercompany accounts and
transactions have been eliminated.

Significant Accounting Policies and Estimates



Our management's discussion and analysis of our financial condition and results
of operations is based on our unaudited financial statements for the three
months ended March 31, 2022 and 2021 audited financial statements, which have
been prepared in accordance with United States generally accepted accounting
principles, or U.S. GAAP, and the rules and regulations of the Securities and
Exchange Commission. The preparation of the financial statements requires us to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements as well as the reported revenue generated, and
expenses incurred during the reporting periods. Our estimates are based on our
historical experience and on various other factors that we believe are
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions and any such differences may
be material. We believe that the accounting policies discussed below are
critical to understanding our historical and future performance, as these
policies relate to the more significant areas involving management's judgments
and estimates.

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Emerging Growth Company Status



We are an "emerging growth company," as defined in Section 2(a) of the
Securities Act of 1933, as amended, (the "Securities Act"), as modified by the
Jumpstart our Business Startups Act of 2012, (the "JOBS Act"), and we may take
advantage of certain exemptions from various reporting requirements that are
applicable to other public companies that are not emerging growth companies
including, but not limited to, not being required to comply with the auditor
attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in its periodic reports
and proxy statements, and exemptions from the requirements of holding a
nonbinding advisory vote on executive compensation and shareholder approval of
any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies
from being required to comply with new or revised financial accounting standards
until private companies (that is, those that have not had a Securities Act
registration statement declared effective or do not have a class of securities
registered under the Exchange Act) are required to comply with the new or
revised financial accounting standards. The JOBS Act provides that a company can
elect to opt out of the extended transition period and comply with the
requirements that apply to non-emerging growth companies but any such election
to opt out is irrevocable. We have elected not to opt out of such extended
transition period which means that when a standard is issued or revised and it
has different application dates for public or private companies, we, as an
emerging growth company, can adopt the new or revised standard at the time
private companies adopt the new or revised standard. This may make comparison of
our financial statements with another public company which is neither an
emerging growth company nor an emerging growth company which has opted out of
using the extended transition period difficult or impossible because of the
potential differences in accounting standards used.

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and are expressed in United States Dollars. Significant accounting policies are summarized below:

Cash and Cash Equivalents



The Company considers all short-term investments with a maturity of three months
or less when purchased to be cash and equivalents for purposes of the statement
of cash flows. There were no cash equivalents as of March 31, 2022 or December
31, 2021.

Net Loss per Common Share

Net income (loss) per common share is computed pursuant to section 260-10-45 of
the FASB Accounting Standards Codification. Basic net income (loss) per share is
computed by dividing net income (loss) by the weighted average number of shares
of common stock outstanding during the period. If applicable, diluted earnings
per share assume the conversion, exercise or issuance of all common stock
instruments such as options, warrants, convertible securities and preferred
stock, unless the effect is to reduce a loss or increase earnings per share. As
such, options, warrants, convertible securities and preferred stock are not
considered in the calculations, as the impact of the potential common shares
would be to decrease the loss per share.

                                       For the Three Months                   For the Year
                                          Ended March 31,                  Ended December 31,
                                       2022             2021             2021              2020
Numerator:
Net (loss)                         $ (2,919,775 )   $ (2,195,763 )   $

(28,100,245 ) $ (6,289,205 )

Denominator:


Denominator for basic earnings
per share - Weighted-average
common shares issued and
outstanding during the period        23,134,059       11,169,673        16,603,788        7,325,708
Denominator for diluted earnings
per share                            23,134,059       11,169,673        16,603,788        7,325,708
Basic (loss) per share             $      (0.13 )   $      (0.20 )   $       (1.69 )   $      (0.86 )
Diluted (loss) per share           $      (0.13 )   $      (0.20 )   $       (1.69 )   $      (0.86 )



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Revenue Recognition

The Company generates its revenue from the sale of its products directly to the end user or distributor (collectively the "customer").



The Company recognizes revenues by applying the following steps in accordance
with FASB Accounting Standards Codification 606 "Revenue from Contracts with
Customers" ("ASC 606"). Under ASC 606, revenues are recognized when control of
the promised goods or services are transferred to a customer, in an amount that
reflects the consideration that the Company expects to receive in exchange for
those goods or services. The Company applies the following five steps in order
to determine the appropriate amount of revenue to be recognized as it fulfills
its obligations under each of its agreements:

  ? identify the contract with a customer;

  ? identify the performance obligations in the contract;

  ? determine the transaction price;

? allocate the transaction price to performance obligations in the contract; and

? recognize revenue as the performance obligation is satisfied.


The Company's performance obligations are satisfied when goods or products are
shipped on an FOB shipping point basis as title passes when shipped. Our product
is generally paid in advance of shipment or standard net 30 days and we offer no
specific right of return, refund or warranty related to our products except for
cases of defective products of which there have been none to date.

Accounts Receivable and Credit Risk


Accounts receivable are generated from sales of the Company's products. The
Company provides an allowance for doubtful collections, which is based upon a
review of outstanding receivables, historical collection information, and
existing economic conditions. As of December 31, 2021, the Company recorded an
allowance of $104,851 against accounts receivable acquired in connection with
the acquisition of SRM Entertainment and as of March 31, 2022, the Company had
recognized no additional allowance for doubtful collections.

Foreign Currency Translation



Assets and liabilities in foreign currencies are translated using the exchange
rate at the balance sheet date, while revenue and expense accounts are
translated at the average exchange rates prevailing during the period. Equity
accounts are translated at historical exchange rates. Gains and losses from
foreign currency transactions and translation for the three months ended March
31, 2022 and year ended December 31, 2021 and the cumulative translation gains
and losses as of March 31, 2022 and December 31, 2021 were not material.

Inventory



Inventories are stated at the lower of cost or market. The Company periodically
reviews the value of items in inventory and provides write-downs or write-offs
of inventory based on its assessment of market conditions. Write-downs and
write-offs are charged to cost of goods sold. Inventory is based upon the
average cost method of accounting.

Fair Value of Financial Instruments

The fair value of our assets and liabilities, which qualify as financial instruments under ASC Topic 820, "Fair Value Measurements and Disclosures," approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.



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Income Taxes


We account for income taxes under ASC 740 Income Taxes ("ASC 740"). ASC 740
requires the recognition of deferred tax assets and liabilities for both the
expected impact of differences between the financial statement and tax basis of
assets and liabilities and for the expected future tax benefit to be derived
from tax loss and tax credit carry forwards. ASC 740 additionally requires a
valuation allowance to be established when it is more likely than not that all
or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized
in an enterprise's financial statements and prescribes a recognition threshold
and measurement process for financial statement recognition and measurement of a
tax position taken or expected to be taken in a tax return. For those benefits
to be recognized, a tax position must be more-likely-than-not to be sustained
upon examination by taxing authorities. ASC 740 also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
period, disclosure and transition. Based on our evaluation, it has been
concluded that there are no significant uncertain tax positions requiring
recognition in our financial statements. Since we were incorporated on October
24, 2018, the evaluation was performed for 2018 tax year, which would be the
only period subject to examination. We believe that our income tax positions and
deductions would be sustained on audit and does not anticipate any adjustments
that would result in a material changes to our financial position. Our policy
for recording interest and penalties associated with audits is to record such
items as a component of income tax expense.

The Company's deferred tax asset at December 31, 2021 consists of net operating
loss carry forwards calculated using federal and state effective tax rates
equating to approximately $4,865,890 less a valuation allowance in the amount of
approximately $4,865,890. Because of the Company's lack of earnings history, the
deferred tax asset has been fully offset by a valuation allowance in the years
ended December 31, 2021 and 2020.

Research and Development


The Company accounts for research and development costs in accordance with the
Accounting Standards Codification subtopic 730-10, Research and Development
("ASC 730-10"). Under ASC 730-10, all research and development costs must be
charged to expense as incurred. Accordingly, internal research and development
costs are expensed as incurred. Third-party research and developments costs are
expensed when the contracted work has been performed or as milestone results
have been achieved. Company-sponsored research and development costs related to
both present and future products are expensed in the period incurred. The
Company incurred research and development expenses of $103,025 and $60,529 for
the three months ended March 31, 2022 and 2021, respectively.

Stock Based Compensation



We recognize compensation costs to employees under FASB Accounting Standards
Codification 718 "Compensation - Stock Compensation" ("ASC 718"). Under ASC 718,
companies are required to measure 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. Share based compensation arrangements include
stock options and warrants. As such, compensation cost is measured on the date
of grant at their fair value. Such compensation amounts, if any, are amortized
over the respective vesting periods of the option grant.

On October 24, 2018, the inception date ("Inception"), we adopted ASU No.
2018-07 "Compensation - Stock Compensation (Topic 718): Improvements to
Nonemployee Share-Based Payment Accounting." These amendments expand the scope
of Topic 718, Compensation - Stock Compensation (which currently only includes
share-based payments to employees) to include share-based payments issued to
nonemployees for goods or services. Consequently, the accounting for share-based
payments to nonemployees and employees will be substantially aligned.

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Related parties

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.


Pursuant to Section 850-10-20 the related parties include a. affiliates of the
Company; b. Entities for which investments in their equity securities would be
required, absent the election of the fair value option under the Fair Value
Option Subsection of Section 825-10-15, to be accounted for by the equity method
by the investing entity; c. trusts for the benefit of employees, such as pension
and profit-sharing trusts that are managed by or under the trusteeship of
management; d. principal owners of the Company; e. management of the Company; f.
other parties with which the Company may deal if one party controls or can
significantly influence the management or operating policies of the other to an
extent that one of the transacting parties might be prevented from fully
pursuing its own separate interests; and g. Other parties that can significantly
influence the management or operating policies of the transacting parties or
that have an ownership interest in one of the transacting parties and can
significantly influence the other to an extent that one or more of the
transacting parties might be prevented from fully pursuing its own separate
interests.

The consolidated financial statements shall include disclosures of material
related party transactions, other than compensation arrangements, expense
allowances, and other similar items in the ordinary course of business. However,
disclosure of transactions that are eliminated in the preparation of
consolidated or combined financial statements is not required in those
statements. The disclosures shall include: a. the nature of the relationship(s)
involved; b. a description of the transactions, including transactions to which
no amounts or nominal amounts were ascribed, for each of the periods for which
income statements are presented, and such other information deemed necessary to
an understanding of the effects of the transactions on the financial statements;
c. the dollar amounts of transactions for each of the periods for which income
statements are presented and the effects of any change in the method of
establishing the terms from that used in the preceding period; and d. amounts
due from or to related parties as of the date of each balance sheet presented
and, if not otherwise apparent, the terms and manner of settlement.

Recent Accounting Pronouncements


In June 2018, the FASB issued ASU 2018-07, which simplifies the accounting for
nonemployee share-based payment transactions. The amendments specify that Topic
718 applies to all share-based payment transactions in which a grantor acquires
goods or services to be used or consumed in a grantor's own operations by
issuing share-based payment awards. The Company has adopted this standard
beginning January 1, 2019. The adoption of this standard did not have a
significant impact on our results of operations, financial condition, cash
flows, and financial statement disclosures.

In February 2016, Topic 842, "Leases" was issued to replace the leases
requirements in Topic 840, "Leases". The main difference between previous GAAP
and Topic 842 is the recognition of lease assets and lease liabilities by
lessees for those leases classified as operating leases under previous GAAP. A
lessee should recognize in the balance sheet a liability to make lease payments
(the lease liability) and a right-of-use asset representing its right to use the
underlying asset for the lease term. For leases with a term of 12 months or
less, a lessee is permitted to make an accounting policy election by class of
underlying asset not to recognize lease assets and lease liabilities. If a
lessee makes this election, it should recognize lease expense for such leases
generally on a straight-line basis over the lease term. The accounting applied
by a lessor is largely unchanged from that applied under previous GAAP. Topic
842 will be effective for annual reporting periods beginning after December 15,
2018, including interim periods within those annual periods and is to be
retrospectively applied. The Company has adopted this standard beginning January
1, 2019. The adoption of this standard did not have a significant impact on our
results of operations, financial condition, cash flows, and financial statement
disclosures.

Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on our financial statements.



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Results of Operations

For the three months ended March 31, 2022 and 2021

The following table provides selected financial data about us for the three months ended March 31, 2022 and 2021, respectively.





                       March 31, 2022       March 31, 2021
Sales                 $        721,629     $         48,846
Cost of Sales                  604,418               23,452
Gross Profit (Loss)            117,211               25,394
Total expenses              (3,036,986 )         (2,221,157 )
Net Loss              $     (2,919,775 )   $     (2,195,763 )




Revenues

We generated $721,629 in revenues for the three months ended March 31, 2022 compared to $48,846 revenues in the three months ended March 31, 2021. As a result of the Covid-19 pandemic, revenues were depressed in 2021 and we are now experiencing a greater demand for our products.

Operating Expenses and Other Income (Expense)

We had total operating expenses and other income and expense of $3,036,986 for the three months ended March 31, 2022 compared to $2,221,157 for the three months ended March 31, 2021.





Operating expenses for the three months ended March 31, 2022 were in connection
with our daily operations as follows: (i) marketing expenses of $39,385; (ii)
research and development of $103,025; (iii) legal and professional expenses of
$514,491, consisting of corporate advisory services, annual report preparation
fees and general corporate governance fees; (iv) rent and utilities of $40,293;
(v) depreciation and amortization of $25,378; (vi) general and administrative
expenses of $1,151,361, consisting of payroll and related taxes, travel, meals
and entertainment, office supplies and expense, compensation related to
management transition agreements and other normal office and administration
expenses; (vii) stock based compensation of $105,000; (viii) net interest
expense of $20,713 (ix) other expense of $37,340 and (x) impairment of a secured
promissory note of $1,000,000.



Operating expenses for the three months ended March 31, 2021 were in connection
with our daily operations as follows: (i) marketing expenses of $17,896; (ii)
research and development of $60,529; (iii) legal and professional expenses of
$526,213, consisting of corporate advisory services, annual report preparation
fees and general corporate governance fees; (iv) rent and utilities of $15,636;
(v) depreciation and amortization of $21,603; (vi) general and administrative
expenses of $563,504, consisting of payroll and related taxes, travel, meals and
entertainment, office supplies and expense and other normal office and
administration expenses; (vii) stock based compensation of $1,682,913; (viii)
net interest expense of $2,063 and (ix) a gain of $669,200 on settlement of note
payable in connection with the Magical Beast Omnibus Agreement.



Income/Losses

Net losses were $2,919,775 and $2,195,763 for the three months ended March 31, 2022 and 2021, respectively.




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