SENTIENT BRANDS HOLDINGS INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and related notes included in Item 1 of this report, and with the audited financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2025.

Forward-Looking Statements

All statements other than statements of historical fact included in this Form 10-Q including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this Form 10-Q, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of a number of factors, including those set forth under the risk factors and business sections in this Form 10-Q.

Overview

Sentient Brands is a next-generation brand platform focused on the acquisition, development, and commercialization of premium and functional consumer packaged goods (CPG) with an emphasis on wellness, sustainability, and emergency preparedness. The Company has implemented a product innovation and acquisition-driven growth strategy through its operating subsidiaries, focusing on consumer categories that offer long-term secular growth potential.

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 $6,425,970 and $6,332,894 at March 31, 2026 and December 31, 2025, respectively and a working capital deficit of $3,991,762 and $3,902,970 at March 31, 2026 and December 31, 2025, respectively. Included in the working capital deficit for the three months ended March 31, 2026 and 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 financial statements for the year ended December 31, 2025 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.

Results of Operations – Three Months Ended March 31, 2026 vs. March 31, 2025

Revenue

Total consolidated revenues were $230,711 for the three months ended March 31, 2026, compared to $0 for the three months ended March 31, 2025. Revenues are presented net of $159,924 in intercompany eliminations. The elimination reflects intercompany service arrangements between subsidiaries.

Cost of Revenue

Total cost of revenues, net of intercompany eliminations, was $166,501 for the three months ended March 31, 2026, compared to $600 for the three months ended March 31, 2025. Cost of revenues consists of cost of goods sold of $116,489, freight costs of $30,762, and royalty expenses of $19,250. Gross profit was $64,210, a 27.8% gross margin on revenue, for the three months ended March 31, 2026.

Operating Expenses

For the three months ended March 31, 2026 and 2025, operating expenses consisted of the following:

Total operating expenses were $118,881 and $366,506 for the three months ended March 31, 2026 and 2025, respectively.

Professional Service Fees

For the three months ended March 31, 2026 and 2025, professional service expenses consisted of the following:

The Company instituted a policy requiring all officers and directors to present detailed activity on an approved invoice rather than through fixed consulting agreements. In addition, the board of directors agreed to suspend their board fees until further notice, resulting in a significant reduction in management fees during the three months ended March 31, 2026 of $27,500 compared to $268,860 for the three months ended March 31, 2025. There were 300,000 shares issued for bonuses related to the acquisitions of subsidiaries valued at $141,600 for the three months ended March 31, 2025.

Other advisory services decreased $89,207 due to reduced Investor Relations expenses, which were settled through the issuance of 300,000 shares of common stock in the three months ended March 31, 2025.

Accounting and Auditing fees for the three months ended March 31, 2025 included a bonus of 33,334 shares of common stock valued at $40,000 at the time of issuance paid to the former contracted accountant.

Loss from Operations

The Company’s loss from operations during the three months ended March 31, 2026 and 2025 was $54,670 and $367,106, respectively.

Other Income (Expense)

Other Income comprises income for embedded derivative calculations of $42,392 for the three months ended March 31, 2026 and a loss from embedded derivative calculation of $(36,466) for the three months ended March 31, 2025. There was also $10,000 received in the three months ended March 31, 2025 from a fraud claim adjudicated in the state of New Jersey which resulted in a claim for $25,000, of which a total of $15,000 was received during the year ended December 31, 2025. No reserve for the additional payments has been made as the collection is not reasonably assured.

Other expenses for the three months ended March 31, 2026 and 2025, respectively, were $80.798 and $78,654, consisting of interest expense on the GA3 Consortium convertible notes and the Spanos note payable.

Net Loss

Net loss was $(93,076) for the three months ended March 31, 2026, compared to a net loss of $(472,226) for the three months ended March 31, 2025. The improvement of $379,150 reflects the commencement of substantial revenue-generating operations across both subsidiaries, reduced holding company costs and the gain on embedded derivative calculations.

Liquidity and Capital Resources

Cash and cash equivalents were $44,468 on March 31, 2026 compared to $29,011 on December 31, 2025. The net increase of $15,457 reflects net cash used in operating activities of $(3,174) and net proceeds from short-term related-party loans of $18,631.

Net cash used in operating activities was $3,174 for the three months ended March 31, 2026, reflecting net loss of $61,392 adjusted for non-cash items of depreciation and amortization of $4,285, embedded derivative calculation gain of $42,392 and interest expense of $80,798 plus working capital changes including collections of accounts receivable of $12,691, increase in prepaid expenses of $45,877, partially offset by an decrease in prepaid inventory of $14,931 and an increase in accounts payable of $65,466.

Financing activities provided $18,631 from net short-term loan proceeds from related parties. Management is actively pursuing additional working capital financing through equity raises, strategic partnerships, and operating cash flow improvements.

The Company’s total stockholders’ working capital deficit was $3,991,762 at March 31, 2026, and $3,902,970 at December 31, 2025. Included in the working capital deficit for the three months ended March 31, 2026 and 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.

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.