GRAPEFRUIT USA, INC. Cautionary Statements
This Form 10-Q contains financial projections and other "forward-looking
statements," as that term is used in federal securities laws, about Grapefruit's
financial condition, results of operations and business. These statements
include, among others, statements concerning the potential for revenues and
expenses and other matters that are not historical facts. These statements may
be made expressly in this Form 10-
(a) volatility or decline of our stock price;
(b) potential fluctuation in quarterly results;
(c) our failure to earn revenues or profits;
(d) inadequate capital to continue the business and barriers to raising the
additional capital or to obtaining the financing needed to implement our
business plans;
(e) failure to make sales;
(f) changes in demand for our products and services;
(g) rapid and significant changes in markets;
(h) litigation with or legal claims and allegations by outside parties, causing
us to incur substantial losses and expenses;
(i) insufficient revenues to cover operating costs;
(j) dilution in the ownership of the Company through the issuance by us of
additional securities and the conversion of outstanding warrants, notes and
other securities;
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We cannot assure that we will be profitable. We may not be able to develop, manage or market our products and services successfully. We may not be able to attract or retain qualified executives and technology personnel. We may not be able to obtain customers for our products or services. Our products and services may become obsolete. Government regulation may hinder our business. Additional dilution in outstanding stock ownership will be incurred due to the issuance or exercise of more shares, warrants and other convertible securities.
Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. We caution you not to place undue reliance on the statements, which speak only as of the date of this Form 10-Q. The cautionary statements contained or referred to in this section should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may make. We do not undertake any obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect the occurrence of unanticipated events.
The following discussion should be read in conjunction with our financial statements and notes to those statements. In addition to historical information, the following discussion and other parts of this annual report contain forward-looking information that involves risks and uncertainties.
Results of Operations for the Three Months Ended
Three months ended Three months ended
September 30, 2022 September 30, 2021
Net revenues $ 2,962 $ 153,476
Cost of goods sold 62,758 346,073
Gross income (loss) (59,796 ) (192,597 )
Sales expense 1,172 3,800
Stock based compensation 106,011 25,980
Stock option expenses 6,008 32,877
General and administrative expense 229,643 352,462
Loss from operations (402,630 ) (607,716 )
Change in value of derivatives 14,187 13,877
Interest and other expense (369,763 ) (388,273 )
Net loss before income taxes (758,207 ) (982,112 )
Tax provision - -
Net loss (758,207 ) (982,112 )
Loss attributable to noncontrolling interest - (270 )
Net loss attributable to
The following sets forth selected items from our statements of operations for
three months ended
Revenue for the three months ended
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Cost of goods sold for the three months ended
Our resulting gross loss for the three months ended
Sales expense for the three months ended
Our resulting net loss from operations for the three months ended
Net loss for the three months ended
Results of Operations for the Nine Months Ended
Nine months ended Nine months ended
September 30, 2022 September 30, 2021
Net revenues $ 32,673 $ 586,780
Cost of goods sold 297,069 926,671
Gross income (loss) (264,396 ) (339,891 )
Sales expense 6,744 5,760
Stock based compensation 301,916 265,024
Stock option expenses 27,006 65,754
General and administrative expense 974,685 1,011,199
Loss from operations (1,574,747 ) (1,687,628 )
Change in value of derivatives 138,081 91,210
Interest and other expense (1,171,036 ) (2,149,021 )
Net loss before income taxes (2,607,702 ) (3,745,439 )
Tax provision - -
Net loss (2,607,702 ) (3,745,439 )
Loss attributable to noncontrolling interest - (270 )
Net loss attributable to
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The following sets forth selected items from our statements of operations for
nine months ended
Revenue for the nine months ended
Cost of goods sold for the nine months ended
Our resulting gross loss for the nine months ended
Sales expense for the nine months ended
Our resulting net loss from operations for the nine months ended
Net loss for the nine months ended
Liquidity and Capital Resources
Our cash position increased to
Our total current liabilities increased to
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During the nine months ended
We expect our working capital requirements in the next year to be met primarily by the proceeds of issuance of debt, equity and other securities to our existing creditors, shareholders, and other investors, as well as from cash flow from operations. We also expect that, as in the past, significant amounts of our convertible debt with a major lender will be converted into equity. We expect to need additional working capital from outside sources to cover our anticipated operating expenses. There is no assurance that the Company will be able to raise sufficient additional capital or financing to continue in business or to effectively execute its business plan.
COVID-19 Impact
The COVID-19 pandemic has had, and continues to have, a significant impact around the world, prompting governments and businesses to take unprecedented measures, such as restrictions on travel and business operations, temporary closures of businesses, and quarantine and shelter-in-place orders. The COVID-19 pandemic has at times significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The COVID-19 pandemic and the measures taken by many countries in response have affected and could in the future materially impact the Company's business, results of operations and financial condition.
Certain of the Company's outsourcing partners, component suppliers and logistical service providers have experienced disruptions during the COVID-19 pandemic, resulting in supply shortages. Similar disruptions could occur in the future.
Going Concern Qualification
Our consolidated financial statements have been prepared on a going concern
basis which assumes we will be able to realize our assets and discharge our
liabilities in the normal course of business for the foreseeable future. During
the nine months ended
Off-Balance Sheet Arrangements
None.
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