SENTIENT BRANDS HOLDINGS INC.

Previous wording

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 $4,669,826 and $3,533,380 at December 31, 2024 and 2023, respectively and a working capital deficit of $2,291,318 and $1,957,552 at December 31, 2024 and 2023, 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.

Current wording

We have a limited operating history in the CPG sector, 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 $6,332,894 and $5,131,317 at December 31, 2025 and 2024, respectively and a working capital deficit of $3,902,970 and $2,752,810 at December 31, 2025 and 2024, respectively. Included in the working capital deficit for the year ended December 31, 2025 is $2,640,712 in Acquisition Credits as a contingent liability which is solely settleable in equity to be issued for acquiring the subsidiaries AIGFB & AE NV, in the amount of $2,500,712, with an additional issuance of $140,000 for a reduction in accounts payable. The report of our independent registered public accounting firm on our consolidated financial statements for the year ended December 31, 2025 and 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 consolidated 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.

Previous wording

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.

Current wording

The accompanying consolidated financial statements, included in Item 8, 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.

Previous wording

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.

Current wording

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, acquisition credits payable and the valuation of equity transactions.

Previous wording

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.

Current wording

Our customers place orders for our products pursuant to their purchase orders and the Company is 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 and delivering our products under our customers’ purchase orders and our related invoices to our customers. 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 delivered, the amount recorded as advance from customers is recognized as revenue.

Previous wording

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.

Current wording

The Company is 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 consolidated 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.

Previous wording

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.

Current wording

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 consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. As a principle, deferred tax liabilities are recognized for all taxable temporary differences, and deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized.

Previous wording

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.

Current wording

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 relate to income taxes levied by the same taxation authority and we intend to settle its current tax assets and liabilities on a net basis.

Previous wording

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.

Current wording

Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of ASC 718, “Compensation - Stock Compensation” which requires recognition in the consolidated 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.

Previous wording

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.

Current wording

Pursuant to ASC 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 expenses 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.

Previous wording

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.

Current wording

We review newly issued accounting standards and pronouncements for the potential impact to the Company’s consolidated financial statements. 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.

Previous wording

As a result of the foregoing, for the year ended December 31, 2024, loss from operations amounted to $881,648, as compared to loss from operations of $250,859 for the year ended December 31, 2023.

Current wording

As a result of the foregoing, for the year ended December 31, 2025, loss from operations amounted to $1,017,741 as compared to loss from operations of $944,833 for the year ended December 31, 2024.

Previous wording

Other income (expense) was ($254,798) for the year ended December 31, 2024, compared to ($226,875) for the year ended December 31, 2023. The expenses for both years are entirely related to interest expense, including default interest.

Current wording

Other income (expense) in total was ($183,836) for the year ended December 31, 2025, compared to $40,209 for the year ended December 31, 2024.

Previous wording

Net loss for the years ended December 31, 2024 and 2023 were $1,136,446 and $477,734, respectively. The increase in Net Loss was primarily due to the increased professional fees and management fees as the Company pursues a merger opportunity.

Current wording

Net loss for the years ended December 31, 2025 and 2024 were $1,201,577 and $904,624, respectively. The decrease in Net Loss was primarily due to the net profit contribution from the new acquisitions as the Company executed its acquisition strategy.

Previous wording

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.

Current wording

The consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America (“U.S. 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.

Previous wording

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.

Current wording

To the extent the Company is 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.

Previous wording

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 December 31, 2024 and 2023, we had cash balance of approximately $3,432 and $1,299, respectively. These funds are kept in financial institutions located in United States.

Current wording

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. On December 31, 2025 and 2024, we had a cash balance of $29,011 and $3,432, respectively. These funds are kept in financial institutions located in the United States.

Previous wording

Operating activities used $323,367 in cash the year ended December 31, 2024, as compared with $68,544 for the year ended December 31, 2023. Our net loss of $1,136,446 is the main component of our negative operating cash flow in 2024. This was offset for non-cash expenses that were paid with the Company’s common stock totaling $380,750 and a write down of our inventory totaling $150,000. In addition our prepaid expenses decreased by $8,453 and accounts payable increased by $149,000. For the year ended December 31, 2023, our net loss of $477,734 is the main component of our negative operating cash flow. This was offset for non-cash expenses that were paid with the Company’s common stock totaling $140,900. In addition, our inventory decreased by $24,539 and accounts payable increased by $184,849. An increase in prepaid expenses used $8,453 of cash.

Current wording

Operating activities used $223,873 in cash the year ended December 31, 2025, as compared with cash used of $402,718 for the year ended December 31, 2024.

Previous wording

Cash flows provided by financing activities during the year ended December 31, 2024 amounted to $325,500 as compared with $68,795 for the year ended December 31, 2023. During 2024, we received net proceeds from short term loans totaling $11,500. We also received $314,000 from the sale of common stock. During 2023, we received net proceeds from short term loans totaling $22,795. We also increased our stock subscription payable for $85,000. During 2023, we also received $38,000 from the sale of common stock and $8,000 from the exercise of warrants to purchase common stock.

Current wording

Cash flows provided by financing activities during the year ended December 31, 2025 amounted to $285,348, as compared with $404,851, for the year ended December 31, 2024. We received $71,000 in cash from the sale of common stock that has not yet been issued, proceeds from short term loans of $164,348 net proceeds from the sale of common stock of $50,000 for the year ended December 31, 2025. During the year ended December 31, 2024 we received $317,297 in cash from the sale of common stock and $8,000 from the exercise of warrants to purchase common stock, shares were issued for common stock tht had not been issued of $68,054 and we received the proceeds from a short term loan in the amount of $11,500.

Previous wording

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.

Current wording

We will need to raise additional funds, particularly if the Company is 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 advances 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 the Company is 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 the Company is 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.

Previous wording

The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. During the year ended December 31, 2024, the Company incurred a net loss of $1,136,446. The Company had an accumulated deficit of $4,669,826 and a working capital deficit of $2,206,318 and $1,957,552 as of December 31, 2024 and 2023, respectively. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

Current wording

The Company’s consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. During the year ended December 31, 2025, the Company incurred a net loss of $1,201,577. The Company had an accumulated deficit of $6,332,894 and a working capital deficit of $3,902,970. During the year ended December 31, 2024, the Company had a net loss of $904,624, an accumulated deficit of $5,131,317 and a working capital deficit of $2,752,810. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Included in the working capital deficit for the year ended December 31, 2025 is $2,640,712 of Acquisition Credits solely convertible into equity issued to acquire the subsidiaries AIGFG & AE NV, in the amount of $2,500,712, as well as an issuance of $140,000 in exchange for a reduction in accounts payable. The Company’s plan for its operating capital needs are discussed in the Liquidity and Capital Resources section above.

Previous wording

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Current wording

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.