Starco Brands, Inc.
For the period ended Mar 31, 2026. Filed May 20, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 20, 2026
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-14.
0001493152-25-023339
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-20.
0001493152-26-024612
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 152 previous paragraphs and 134 current paragraphs.
80 unchanged; 23 reworded; 31 added; 49 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (31)
Current report
Winona Pure®
Current report
For the three months ended March 31, 2026, we recorded revenues of $8,979,270 compared to $9,818,757 for the three months ended March 31, 2025 for a decrease of $839,487 or 9%. The decrease in the current period was primarily due to decreases in sales of Soylent stemming from an inability to receive product from our primary supplier, partially offset by increases in sales of Skylar.
Current report
For the three months ended March 31, 2026, we recorded related party revenues of $283,158 compared to $1,050,312 for the three months ended March 31, 2025 for a decrease of $767,154 or 73%. This decline was due to declines in sales of Whipshots due to continued softening in the spirits market.
Current report
Segment Revenue Results
Current report
The following discussion provides additional detail on segment-level revenue performance for the three months ended March 31, 2026 and 2025.
Current report
Soylent. Soylent revenues were $4,386,006 for the three months ended March 31, 2026, compared to $7,254,599 for the three months ended March 31, 2025, a decrease of $2,868,593 or 40%. The decline was primarily attributable to supply constraints stemming from an inability to receive product from our primary supplier, which limited our ability to fulfill customer demand during the quarter.
Current report
Skylar. Skylar revenues were $3,672,501 for the three months ended March 31, 2026, compared to $1,413,933 for the three months ended March 31, 2025, an increase of $2,258,568 or 160%. The increase was primarily due to a new product launch and increased unit sales from our monthly Scent Club subscription program.
Current report
Whipshots. Whipshots related-party revenues were $283,158 for the three months ended March 31, 2026, compared to $1,050,312 for the three months ended March 31, 2025, a decrease of $767,154 or 73%. The decrease reflects continued softening in the broader spirits and ready-to-drink category, which has reduced volumes under our licensing arrangement with Temperance.
Current report
Winona. Winona revenues were $865,933 for the three months ended March 31, 2026, compared to $964,571 for the three months ended March 31, 2025, a decrease of $98,638 or 10%.
Current report
AOS. AOS revenues were $54,830 for the three months ended March 31, 2026, compared to $185,654 for the three months ended March 31, 2025, a decrease of $130,824 or 70%.
Current report
For the three months ended March 31, 2026, our compensation expense amounted to $1,678,748, reflecting a decrease of $57,440 or 3%, compared to $1,736,188 for the three months ended March 31, 2025. This decline is primarily attributable to reductions in stock-based compensation expense and overall headcount compared to the prior-year period.
Current report
For the three months ended March 31, 2026, our professional fees totaled $583,879, representing a decrease of $196,345 or 25%, compared to $780,224 in the prior period. Professional fees are mainly for contractors, accounting, auditing and legal services associated with business operations, merger activity, and our quarterly filings as a public company, and advisory and valuation services. The decrease is primarily due to a decrease in legal fees and accounting/audit fees in the current year period.
Current report
For the three months ended March 31, 2026, our marketing, general and administrative expenses were $2,427,821, reflecting a decrease of $956,597 or 28%, compared to $3,384,418 for the three months ended March 31, 2025. The decrease primarily reflects lower amortization expense of approximately $370,000 following the write-offs of intangible assets at our Soylent subsidiary at December 31, 2025, reduced broker commissions of approximately $200,000 at Soylent, and a $400,000 reduction in marketing and advertising spend at the STCB segment as part of a broader cost-saving initiative.
Current report
For the three months ended March 31, 2026, we had total other expense of $253,502 compared to total other expense of $558,832 for the three months ended March 31, 2025. For the three months ended March 31, 2026, the Company had interest expense of $237,985 compared to interest expense of $236,636 during the same period in 2025; the Company also had other expense of $15,517 for the three months ended March 31, 2026 as compared to other expense of $322,196 during the same period in 2025.
Current report
Net (Loss) Income
Current report
For the three months ended March 31, 2026, we reported a net loss of $829,720, compared to net income of $1,976,105 for the same period in 2025. The year-over-year change was primarily driven by the $3,692,529 gain recognized in the prior-year period related to the change in fair value of our share adjustment, which did not recur in 2026, partially offset by improved performance in our Skylar segment.
Current report
We used $707,412 of net cash in operating activities for the three months ended March 31, 2026. Operating cash outflows were primarily driven by our net loss of $829,720 and higher working capital usage, including increases in accounts receivable of $622,316 and inventory of $349,501, resulting from purchase timing and higher inventory levels maintained during the period. During the same period in 2025, our net cash provided by operating activities was $839,143 and was driven by net income of $1,976,105 and a decrease in accounts receivable of $3,099,686.
Current report
Notes Payable - Ross Sklar (Chief Executive Officer)
Current report
On August 11, 2023, we issued a Consolidated Secured Promissory Note to Ross Sklar in the principal amount of $4,000,000, consolidating several prior notes. The note bears interest at the Wall Street Journal Prime Rate plus 2 percent, reassessed monthly, and is secured by substantially all of our assets pursuant to an Amended and Restated Consolidated Security Agreement. On May 31, 2024, we and Mr. Sklar entered into an amendment extending the maturity date to August 31, 2026, with an automatic extension to August 31, 2027 if amounts remain outstanding at maturity. The restructuring was accounted for as a debt modification.
Current report
During 2024, we repaid $1,527,500 of principal using proceeds from the Gibraltar Loan. As of December 31, 2024, the outstanding principal balance under the Amended Consolidated Secured Promissory Note was $2,472,500, with no accrued interest outstanding.
Current report
Related Party Bridge Loan – The Starco Group, Inc.
Current report
On December 22, 2025, we entered into a Bridge Term Loan Promissory Note with The Starco Group, Inc. (“TSGI”), a company wholly owned by Ross Sklar, the Company’s Chief Executive Officer. The Promissory Note provides for a bridge term loan of up to $5,000,000, including an initial disbursement of $4,500,000 and additional delayed drawdowns of up to $500,000 through December 31, 2026. The proceeds were used to repay our outstanding obligations under the Gibraltar Loan and to support working capital needs.
Current report
The Bridge Loan bears interest at the lesser of (i) the Highest Lawful Rate or (ii) the Prime Rate (not less than 6.00 percent) plus 4.25 percent. Interest is payable monthly beginning January 1, 2026. Principal payments begin January 1, 2027 and continue through 2030, with scheduled monthly payments ranging from $28,000 to $66,000. We may prepay the loan at any time without penalty. The loan matures on the earlier of (i) five years from issuance, (ii) acceleration upon default, or (iii) full repayment.
Current report
As of March 31, 2026, the outstanding principal balance under the Bridge Loan was $4,500,000, and interest expense related to the loan was $137,500 and $0 for the three months ended March 31, 2026 and 2025, respectively.
Current report
As of March 31, 2026, our total debt was $7,972,500, consisting of $3,472,500 of notes payable to our CEO, Ross Sklar and $4,500,000 outstanding under a new bridge loan. Mr. Sklar holds a significant minority ownership interest, and historically, certain notes payable to him have been extended or refinanced; however, there can be no assurance that such extensions or refinancings will continue in the future.
Current report
Working Capital Surplus Deficit
Current report
Net cash used in operating activities was $707,412 for the three months ended March 31, 2026, compared to net cash provided of $839,143 in the prior-year period. The shift to net cash outflows was primarily driven by the absence of the $3.7 million non-cash gain recognized in the first quarter of 2025 related to the stock payable share adjustment, which significantly increased operating cash flows in the prior year.
Current report
Excluding that non-recurring item, operating cash flows for the 2026 period were further impacted by:
Current report
Overall, the combination of higher working capital outflows, lower non-cash adjustments, and the absence of the prior-year fair value gain resulted in net cash used in operating activities for the 2026 period.
Current report
There were no investing activities during the three months ended March 31, 2026.
Current report
For the three months ended March 31, 2026, net cash used in financing activities was $113,158, which includes payments of $113,158 on notes payable.
Removed paragraphs (49)
Previous report
Winona®
Previous report
Whipshots® Licensing/Marketing
Previous report
On September 14, 2021, Whipshots Holdings, LLC (formerly Whipshots, LLC), a subsidiary of the Company, a Delaware limited liability company (“Whipshots Holdings”), entered into a License Agreement (the “Washpoppin License Agreement”) with Washpoppin Inc., a New York corporation (“Washpoppin”). Pursuant to the Washpoppin License Agreement, Washpoppin licensed certain Licensed Property (as defined therein) of the recording artist professionally known as “Cardi B” (the “Artist”) to us. Whipshots Holdings and Washpoppin entered into an amended and restated Washpoppin License Agreement (“A&R Washpoppin License Agreement”), with an effective date of November 27, 2023.
Previous report
As part of the A&R Washpoppin License Agreement, in exchange for royalty rates based on Net Sales (as defined therein) during each applicable contract period, the Company granted Whipshots Holdings shares to Washpoppin to cause the Artist to attend certain in person events, media interviews, participate in the development of the Licensed Products (as defined therein), and promote the Licensed Products through social media posts on the Artist’s social media platforms.
Previous report
Revenue for the three months ended September 30, 2025, was $10,912,920, representing an 18% decrease, or $2,453,214, compared to $13,366,134 in the same period of 2024. The decrease was primarily due to lower product sales of Soylent, driven by an intentional focus on de-emphasizing lower margin sales channels, and some impact from inventory constraints which limited our ability to accept and fulfill orders.
Previous report
Related party revenue totaled $726,407 for the three months ended September 30, 2025, reflecting a 51% decrease, or $753,600, compared to $1,480,007 in the prior-year period. The decline was primarily driven by lower royalty income received during the current quarter.
Previous report
Compensation expense was $2,107,413 for the three months ended September 30, 2025, representing a 4% decrease, or $77,843, compared to $2,185,256 in the same period of 2024. The reduction was primarily due to workforce reductions undertaken by the Company, partially offset by an increase in non-cash, stock based compensation expense.
Previous report
Professional fees totaled $500,931 for the three months ended September 30, 2025, representing a 15% increase, or $66,233, from $434,698 in the prior-year period. These fees primarily reflect costs related to contractors, consultants, accounting, auditing, legal, advisory, and valuation services, which support business operations, merger activity, and quarterly public company reporting. The increase in expenses was primarily driven by higher consulting and contractor service costs during the current period. Additionally, the prior-year period reflects the impact of a transition to a new accounting system that occurred during Q3 2024. As part of this implementation, certain expense accounts—specifically contractor and consultant costs—were reclassified from professional fees to marketing and advertising. As a result, professional fees in the prior-year period may not be directly comparable.
Previous report
Marketing, general and administrative expenses totaled $3,121,427 for the three months ended September 30, 2025, a 26% decrease, or $1,115,006, compared to $4,236,433 in the same period of 2024. The reduction primarily reflects lower royalty costs and the elimination of several vendor services as part of a broader cost-reduction initiative implemented during the current period.
Previous report
No fair value share adjustment was recorded for the three months ended September 30, 2025, compared to a loss of $5,105,535 in the same period of 2024. The absence of an adjustment reflects the full settlement of the outstanding liability to Soylent shareholders in May 2025.
Previous report
Total other expense for the three months ended September 30, 2025, was $289,452, compared to $681,573 in the same period of 2024. The decrease was driven by lower interest expense, which fell to $283,066 from $303,155, and decreased other expense, which totaled $6,386, down from $378,418 in the prior-year quarter.
Previous report
Net Loss
Previous report
For the three months ended September 30, 2025, we reported a net loss of $1,387,811, representing a substantial improvement compared to the net loss of $6,257,088 recorded in the same period of 2024. The year-over-year reduction was primarily attributable to non-recurring prior-period impacts, including a $5,105,535 loss from changes in the fair value of stock payable to Soylent stockholders as well as the changes described above.
Previous report
Comparison of the nine months ended September 30, 2025 to the nine months ended September 30, 2024
Previous report
Revenues
Previous report
Revenue for the nine months ended September 30, 2025, was $31,317,398, representing a 22% decrease, or $8,987,234, compared to $40,305,032 in the same period of 2024. The year-over-year decline was primarily driven by reduced product sales of Soylent due to an intentional focus on de-emphasizing lower margin sales channels, and some impact from inventory constraints which limited our capacity to accept and fulfill customer orders.
Previous report
Revenues, related parties
Previous report
For the nine months ended September 30, 2025, we generated related party revenues of $2,198,098, reflecting a 54% decrease, or $2,533,332, from $4,731,430 in the same period of 2024. This decline was primarily attributable to a reduction in royalties received during the current period.
Previous report
Operating Expenses
Previous report
Compensation expense totaled $5,505,572 for the nine months ended September 30, 2025, representing a 23% decrease, or $1,690,360, compared to $7,195,932 in the prior-year period. The decline primarily reflects workforce reductions implemented by the Company, as well as the absence of bonus accruals in fiscal year 2025.
Previous report
Professional fees totaled $2,193,082 for the nine months ended September 30, 2025, a 21% decrease, or $578,526, from $2,771,608 in the same period of 2024. These fees primarily relate to contractor services, as well as accounting, auditing, legal, advisory, consulting and valuation services supporting ongoing operations, merger activities, and quarterly reporting requirements as a public company. The decline was mainly driven by a reduction in consulting and contractor services during the current period. Additionally, the prior-year period reflects the impact of a transition to a new accounting system that occurred during Q3 2024. As part of this implementation, certain expense accounts—specifically contractor and consultant costs—were reclassified from professional fees to marketing and advertising. As a result, professional fees in the prior-year period may not be directly comparable.
Previous report
For the nine months ended September 30, 2025, marketing, general and administrative expenses totaled $9,699,734, a decrease of $4,373,330, or 31%, compared to $14,073,064 for the same period in 2024. The year-over-year reduction was primarily driven by lower royalty costs and the termination of several vendor services, implemented as part of a broader cost-savings initiative.
Previous report
Other Expense
Previous report
Total other expense for the nine months ended September 30, 2025, was $1,342,978, compared to $1,451,060 in the same period of 2024. The year-over-year decrease was primarily driven by a slight rise in interest expense, which increased to $777,240 from $711,304 in the prior-year period, and a lower level of other expense, totaling $565,738 in 2025 compared to $739,756 in 2024.
Previous report
Net Loss
Previous report
For the nine months ended September 30, 2025, we reported a net loss of $1,261,907, representing a significant improvement compared to the net loss of $22,090,177 for the same period in 2024. The year-over-year reduction was primarily driven by a fair value gain of $3,692,529 related to share-based adjustments recognized in the current period. The prior-year results were negatively impacted by a loss of $15,703,049, associated with changes in the fair value of stock payable to Soylent stockholders, as well as the changes described above.
Previous report
Our net cash used in operating activities was $1,176,857 for the nine months ended September 30, 2025 compared to net cash provided of $517,879 for the nine months ended September 30, 2024. Operating expenses for the nine months ended September 30, 2025 were $13,705,859, including items such as marketing, advertising and administrative costs, consultant compensation, gain on share fair value adjustment, insurance, legal and other professional fees, stock based compensation, compliance, website maintenance and investor relations. Operating expenses for the nine months ended September 30, 2024 totaling $39,743,653 include items such as marketing and administrative costs, consultant compensation, insurance, legal and other professional fees, compliance, website maintenance and loss on share fair value adjustment.
Previous report
Ross Sklar, CEO - Notes
Previous report
On January 24, 2020, STCB executed a promissory note for $100,000 with Ross Sklar, CEO. The note bore interest at 4% per annum, compounded monthly, was unsecured, and matured two years from the original date of issuance. This loan was subsequently amended to mature on July 19, 2023. On June 28, 2021, STCB executed an additional promissory note with Ross Sklar in the principal amount of $100,000 with the same terms as the January 24, 2020 note and a maturity date of June 28, 2023. On September 17, 2021, STCB executed a third promissory note with Ross Sklar in the principal amount of $500,000 with the same terms as the prior notes and a maturity date of September 17, 2023. On December 13, 2021, STCB executed a fourth promissory note with Ross Sklar in the principal amount of $500,000 with the same terms as the prior notes and a maturity date of December 12, 2023. On February 14, 2022, STCB executed a fifth promissory note with Ross Sklar (not included in the listing below) in the principal amount of $472,500 with the same terms as the prior notes and a maturity date of February 14, 2024. This note was also convertible into the Class A common stock at the lender’s option and a conversion price of $0.29 per share. On December 29, 2022, STCB executed a sixth promissory note with Ross Sklar in the principal amount of $2,000,000. This note bore interest at Prime + 4% per annum, compounded monthly, was secured, matured on August 1, 2023, and included warrants to purchase 285,714 shares of our Class A common stock at a price of $0.01 per share. On March 3, 2023, STCB executed a seventh promissory note with Ross Sklar in the principal amount of $800,000. This note bore interest at Prime + 4% per annum, compounded monthly, was secured, matured on July 1, 2023, and included warrants to purchase 114,286 shares of our Class A common stock at a price of $0.01 per share.
Previous report
On August 11, 2023, we issued to Sklar a consolidated secured promissory note (the “Consolidated Secured Promissory Note”) in the principal sum of $4,000,000, with a maturity date of December 31, 2024. The Consolidated Secured Promissory Note carries a floating interest rate comprised of the Wall Street Journal Prime Rate (re-assessed on the first date of each month (plus 2%), and is secured by an amended and restated consolidated security agreement (the “Amended and Restated Consolidated Security Agreement”), by and between the Company and Sklar, dated August 11, 2023, The Consolidated Secured Promissory Note consolidated the outstanding loan obligations of the Company to Sklar evidenced pursuant to the (i) January 24, 2020 Amended Note, (ii) the June 28, 2021 Note, (iii) the September 17, 2021 Note, (iv) the December 13, 2021 Note, (v) the December 29, 2022 Note, and (vi) the March 3, 2023 Note. The Amended and Restated Consolidated Security Agreement merged and integrated the December 29, 2022 Security Agreement and the March 3, 2023 Security Agreement, and provides a security interest in the Collateral (as defined in the Amended and Restated Consolidated Security Agreement) to secure the repayment of all principal, interest, costs, expenses and other amounts then or thereafter due under the Consolidated Secured Promissory Note until by the maturity date. Sklar was authorized to file financing statements to perfect the security interest in the Collateral without authentication by the Company.
Previous report
The restructuring was accounted for as a debt modification. On May 31, 2024, the Consolidated Secured Promissory Note was amended by that certain Amendment to Consolidated Secure Promissory Note, by and between STCB and Mr. Sklar, dated May 31, 2024 (the “2024 Consolidated Note Amendment” and together with the Consolidated Secured Promissory Note, the “Amended Consolidated Secured Promissory Note”). The 2024 Consolidated Note Amendment, among other things, extended the maturity date to August 31, 2026, provided that to the extent amounts remain due and payable on the maturity date, it will be extended until August 31, 2027.
Previous report
The following table represents Prior Notes that were part of the restructuring and related prior and updated terms (under the Amended Consolidated Secured Promissory Note):
Previous report
The February 14, 2022 Note mentioned above, which was excluded from the note consolidation, was amended on May 10, 2024, extending its maturity date to December 31, 2024. The note was fully repaid in 2024 using proceeds from the Gibraltar Loan and Security Agreement, and the Company no longer has any obligations for this note.
Previous report
Gibraltar Loan and Security Agreement – Revolving Loan
Previous report
On May 24, 2024, (i) STCB, (ii) and each of STCB’s subsidiaries, Whipshots Holdings, Whipshots, AOS, Skylar, and Soylent (collectively, the “Borrowers” and each individually, a “Borrower”), and (iii) Gibraltar Business Capital, LLC, a Delaware limited liability company (the “Lender” or “Gibraltar”) entered into a Loan and Security Agreement (the “Loan and Security Agreement”), allowing STCB to reduce a portion of its long term debt (including retiring that certain revolving credit commitment which bore interest at a rate per annum equal to the greater of (a) two and half percent (2.5%) and (b) prime rate plus one percent (1%), which expanded its access to working capital. Capitalized terms not otherwise defined have the meanings set forth in the Loan and Security Agreement.
Previous report
The Loan and Security Agreement provides for a revolving line of credit in the amount not to exceed $12.5 million at any one time, or the Revolving Loan Commitment Amount in return for a first priority security interest in the Collateral. The Revolving Commitment Amount is supplemented by a Permitted Overadvance Amount of $1.5 million. The first $1.5 million in Revolving Loans drawn on this line will be considered permitted overadvances, and the Permitted Overadvance Amount shall be reduced by $125,000 beginning on June 1, 2024, and the first day of each month thereafter. The aggregate principal balance of all Revolving Loans outstanding at any time shall not exceed the Revolving Loan Availability, which is equal to the lesser of the Revolving Loan Commitment Amount or the Borrowing Base Amount; if the aggregate principal balance does exceed the availability, the Company shall immediately make a repayment to eliminate such excess. The Revolving Line matures on May 24, 2026, and such Maturity Date will be automatically extended for one (1) year, subject to the satisfaction of certain terms and conditions described in the Loan and Security Agreement.
Previous report
Each Revolving Loan advanced under the Revolving Loan Commitment bears interest at a rate per annum equal to One Month Term SOFR plus the Applicable Margin. If a Revolving Loan or any portion thereof is considered a part of the Permitted Overadvance Amount under the Loan and Security Agreement, the Applicable Margin for such loan shall be increased by an additional two percent (2.00%) per annum. Revolving Loans may be repaid at any time and reborrowed up to but not including the Maturity Date. On the Maturity Date, the outstanding aggregate principal balance of all Revolving Loans shall be due and payable.
Previous report
Accrued and unpaid interest on the unpaid principal balance of the Revolving Loans shall be due and payable commencing on June 1, 2024 and on the first date of each calendar month thereafter. All accrued and unpaid interest shall be due and payable on the maturity date.
Previous report
Subject to the satisfaction of certain terms and conditions described in the Loan and Security Agreement, the Borrowers may request to increase the Revolving Loan Commitment by an aggregate amount not less than $1 million not exceeding $2.5 million. Such request may be accepted by Lender in its sole and absolute discretion.
Previous report
The Loan and Security Agreement contains customary limitations, including limitations on indebtedness, liens, fundamental changes to business or organizational structure, investments, loans, advances, guarantees, and acquisitions, asset sales, dividends, stock repurchases, stock redemptions, and the redemption, payment or prepayment of other debt, and transactions with affiliates. We are also subject to financial covenants, including a minimum EBITDA covenant and a maximum Unfinanced Capital Expenditures covenant.
Showing the first 40 of 49 passages. Open the source sections for the rest.
Reworded paragraphs (23)
Previous wording
Starco Brands, Inc. (formerly Insynergy Products, Inc.), which we refer to as “the Company,” “our Company,” “STCB”, “we,” “us” or “our,” was incorporated in the State of Nevada on January 26, 2010 under the name Insynergy, Inc. On September 7, 2017, the Company filed an Amendment to the Articles of Incorporation to change the corporate name to Starco Brands, Inc. The Board determined the change of the Company’s name was in the best interests of the Company due to changes in our current and anticipated business operations at that time. In July 2017, the Company entered into a licensing agreement with The Starco Group (“TSG”), a related party entity, located in Los Angeles, California. TSG is a private label and branded aerosol and liquid fill manufacturer with manufacturing assets in the following verticals: DIY/Hardware, paints, coatings and adhesives, household, hair care, disinfectants, automotive, motorcycle, arts & crafts, personal care cosmetics, personal care FDA, sun care, food, cooking oils, beverages, and spirits and wine. Upon entering into the licensing agreement with TSG, the Company pivoted to commercializing novel consumer products manufactured by TSG.
Current wording
Starco Brands, Inc. (formerly Insynergy Products, Inc.), which we refer to as “the Company,” “our Company,” “STCB”, “we,” “us” or “our,” was incorporated in the State of Nevada on January 26, 2010 under the name Insynergy, Inc. On September 7, 2017, the Company filed an Amendment to the Articles of Incorporation to change the corporate name to Starco Brands, Inc. The Board determined the change of the Company’s name was in the best interests of the Company due to changes in our current and anticipated business operations at that time. In July 2017, the Company entered into a licensing agreement with TSG, a related party entity, located in Los Angeles, California. TSG is a private label and branded aerosol and liquid fill manufacturer with manufacturing assets in the following verticals: DIY/Hardware, paints, coatings and adhesives, household, hair care, disinfectants, automotive, motorcycle, arts & crafts, personal care cosmetics, personal care FDA, sun care, food, cooking oils, beverages, and spirits and wine. Upon entering into the licensing agreement with TSG, the Company pivoted to commercializing novel consumer products manufactured by TSG.
Previous wording
STCB is the marketer of record, but not the owner of record for the Winona® Butter Flavor Popcorn Spray. STCB provides marketing services for Winona pursuant to a licensing agreement. Winona Popcorn Spray is sold in Walmart and H-E-B grocery stores, among other retailers. STCB also launched the Winona Popcorn Spray on Amazon through our strategic partner Pattern (formally iServe), who is a stockholder in STCB. Sales grew in 2024, and the Company expects sales to continue to grow in 2025 in this space as management increases the Company’s sales personnel for this product line.
Current wording
STCB is the marketer of record, but not the owner of record for the Winona Pure® line of products. This line originated with Winona Butter Flavor Popcorn Spray and has since expanded with additional flavors of popcorn spray (Caramel, Garlic Butter and Hot Sauce). Additionally, the brand has launched a Sauce Spray line of products (Hot Sauce, Garlic Butter and Butter). STCB provides marketing services for Winona pursuant to a licensing agreement. The Winona line of products is sold in Walmart, H-E-B, Meijer and Food Lion grocery stores, among other retailers. STCB also offers the Winona Popcorn Spray line on Amazon through our strategic partner Pattern (formally iServe), who is a stockholder in STCB.
Previous wording
In December 2021, the Company launched a new product line consisting of vodka-infused, whipped-cream aerosols, under the brand name “Whipshots.” The launch event was held at Art Basel in Miami and garnered over 1 billion impressions world-wide. The Company launched the product on whipshots.com with a limited quantity of cans to be sold each day for the month of December. Whipshots® sold out every single day of the month. The Company launched brick and mortar retail distribution in the first quarter of 2022, signed a distribution agreement with Republic National Distributing Company (“RNDC”), one of the largest spirits distributors in the nation, and signed distribution agreements with others. Whipshots® is currently distributed in 47 of 50 states and the United Kingdom. Initially the Company introduced three flavors of Whipshots® to the market – Vanilla, Mocha and Caramel. Since the initial launch, the Company has introduced new and Limited Time flavors such as Peppermint, Lime, Pumpkin Spice, Strawberry and King Cake. We plan to continue to offer various additional Limited Time flavors over time. Whipshots® is produced by Temperance Distilling Company (“Temperance”), where Sklar is a majority shareholder.
Current wording
In December 2021, the Company launched a new product line consisting of vodka-infused, whipped-cream aerosols, under the brand name “Whipshots” at Art Basel in Miami and garnered over 1 billion impressions world-wide, and sold-out of its limited quantity can launches on whipshots.com each day of the month of the December launch month. The Company launched brick and mortar retail distribution in the first quarter of 2022, signed a distribution agreement with Republic National Distributing Company (“RNDC”), one of the largest spirits distributors in the nation, and signed distribution agreements with others. Whipshots® is currently distributed in 47 of 50 states. The base flavors of Whipshots®– Vanilla, Mocha, Caramel and Chocolate – are accompanied by new and Limited Time flavors such as Peppermint, Lime, Pumpkin Spice, Strawberry and King Cake. We plan to continue to offer various additional Limited Time flavors over time. Whipshots® is produced by Temperance Distilling Company (“Temperance”), where Sklar is a majority shareholder.
Previous wording
On September 8, 2021, Whipshots LLC, a Wyoming limited liability company (“Whipshots LLC”), a subsidiary of the Company, entered into an Intellectual Property Purchase Agreement, effective August 24, 2021, with Penguins Fly, LLC, a Pennsylvania limited liability company (“Seller”). The agreement provided that the Seller would sell the trademarks “Whipshotz” and “Whipshots”, the accompanying domain and social media handles of the same nomenclature, and certain intellectual property, documents, digital assets, customer data and other transferable rights under non-disclosure, non-compete, non-solicitation and confidentiality contracts benefiting the purchased intellectual property and documents (collectively, the “Acquired Assets”) to Whipshots LLC. The purchase price for the Acquired Assets will be payable to Seller, over the course of seven years, based on a sliding scale percentage of gross revenues actually received by us solely from our sale of Whipshots/Whipshotz Products. The payments are subject to a minimum amount in each contract year and a maximum aggregate amount.
Current wording
On September 8, 2021, Whipshots LLC, a Wyoming limited liability company (“Whipshots LLC”), an indirect subsidiary of the Company, entered into an Intellectual Property Purchase Agreement, effective August 24, 2021, with Penguins Fly, LLC, a Pennsylvania limited liability company (“Seller”). The agreement provided that the Seller would sell the trademarks “Whipshotz” and “Whipshots”, the accompanying domain and social media handles of the same nomenclature, and certain intellectual property, documents, digital assets, customer data and other transferable rights under non-disclosure, non-compete, non-solicitation and confidentiality contracts benefiting the purchased intellectual property and documents (collectively, the “Acquired Assets”) to Whipshots LLC. The purchase price for the Acquired Assets is payable to Seller, over the course of seven years, based on a sliding scale percentage of gross revenues actually received by us solely from our sale of Whipshots/Whipshotz Products. The payments are subject to a minimum amount in each contract year and a maximum aggregate amount.
Previous wording
We will need to rely on sales of our Class A common stock and other sources of financing to raise additional capital. The purchasers and manner of any share issuance will be determined according to our financial needs and the available exemptions to the registration requirements of the Securities Act. This provides significant support for our current retail and online distribution. We also plan to raise capital in the future through a compliant offering.
Current wording
We will need to rely on sales of our Class A common stock and other sources of financing to raise additional capital. The purchases and manner of any share issuance will be determined according to our financial needs and the available exemptions to the registration requirements of the Securities Act. This provides significant support for our current retail and online distribution. We also plan to raise capital in the future through a compliant offering.
Previous wording
For the nine months ended September 30, 2025, there was a gain on fair value share adjustment of $3,692,529, compared to a loss of $15,703,049 for the nine months ended September 30, 2024. This was due to a decrease in the fair value of the Soylent sellers’ rights to potentially receive additional Starco shares and included the final settlement of the liability in May 2025.
Current wording
For the three months ended March 31, 2026, there was no fair value share adjustment gain, as the final settlement of the liability occurred in May 2025. For the three months ended March 31, 2025, the Company incurred a change in fair value share adjustment gain of $3,692,529 due to a decrease in the fair value of the Soylent sellers’ rights to potentially receive additional Starco shares.
Previous wording
As reflected in the accompanying condensed consolidated financial statements, we have an accumulated deficit of $82,838,219 at September 30, 2025. We generated $1,568,395 in cash from financing activities for the nine months ended September 30, 2025, primarily due to $364,258 of net proceeds from the revolving loan, $204,137 in net proceeds from notes payable and $1,000,000 in receipts from related parties. Our net cash used in financing activities was $377,101 for the nine months ended September 30, 2024, due primarily to payments toward i) lines of credit, ii) a revolving loan, iii) loans from related parties and iv) notes payable of approximately $23.5 million, offset by proceeds from a revolving loan and a note payable of approximately $23.2 million.
Current wording
As reflected in the accompanying condensed consolidated financial statements, we had an accumulated deficit of $103,145,543 as of March 31, 2026. Net cash used in financing activities for the three months ended March 31, 2026 was $113,158, all of which related to payments on our notes payable. During the same period in 2025, we used $293,307 in cash from financing activities primarily due to $268,397 of net payments toward the revolving loan and $24,910 in payments on notes payable.
Previous wording
Following the 2024 Consolidated Note Amendment, on August 13, 2025, STCB and Mr. Sklar entered into a Second Amendment to the Amended Consolidated Secured Promissory Note (the “Second Amendment”). Pursuant to the Second Amendment, the note was revised to consolidate two additional loans made by Mr. Sklar to the Company in the aggregate principal amount of $1,000,000, consisting of a $500,000 loan funded on July 15, 2025, and a second $500,000 loan funded on August 15, 2025. As a result of these transactions and prior repayments, the principal balance under the Second Amendment was adjusted to $3,472,500. The Second Amendment also reaffirmed that the note remains subject to the Subordination Agreement dated May 24, 2024, between Mr. Sklar and Gibraltar Business Capital, LLC, the Company’s senior lender. Except as expressly modified by the Second Amendment, all other terms, including interest rates, repayment provisions, and maturity dates under the Amended Consolidated Secured Promissory Note, remain unchanged and in full force and effect.
Current wording
On August 13, 2025, we and Mr. Sklar entered into a Second Amendment to the Amended Consolidated Secured Promissory Note. The Second Amendment consolidated two additional loans made by Mr. Sklar to us in the aggregate principal amount of $1,000,000, consisting of a $500,000 loan funded on July 15, 2025 and a $500,000 loan funded on August 15, 2025. After giving effect to these additional loans and prior repayments, the principal balance under the note was adjusted to $3,472,500. The Second Amendment reaffirmed that the note remains subject to the Subordination Agreement dated May 24, 2024 between Mr. Sklar and Gibraltar Business Capital, LLC. Except as modified by the Second Amendment, all other terms of the Amended Consolidated Secured Promissory Note, including interest rate, repayment provisions, and maturity, remained unchanged.
Previous wording
As of September 30, 2025 and December 31, 2024, the outstanding principal owed to Mr. Sklar under the referenced notes amounted to $3,472,500 and $2,472,500, respectively.
Current wording
As of March 31, 2026, the outstanding principal balance owed to Mr. Sklar under the amended note was $3,472,500. Interest expense related to notes held by Mr. Sklar was $84,921 and $59,312 for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
The unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company identified that a substantial doubt exists if the Company is able to meet its obligations as they become due within one year of the date of the financial statements being issued. Principal conditions contributing to substantial doubt regarding the Company’s ability to continue as a going concern include its history of recurring net losses and continued working capital deficiencies. As of September 30, 2025, the Company reported an accumulated deficit of $82,838,219, which includes net losses of $1,387,811 and $1,261,907 for the three and nine months ended September 30, 2025, respectively. Additionally, the Company had a working capital deficit of approximately $6.1 million at September 30, 2025.
Current wording
The condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared assuming we will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. We have concluded that substantial doubt exists about our ability to continue as a going concern within one year after the date the financial statements are issued. The principal conditions giving rise to substantial doubt include our history of recurring net losses and continued working capital deficiencies. As of March 31, 2026, we had an accumulated deficit of $103,145,543, including a net loss of $829,720 for the three months then ended, and a working capital deficit of approximately $1.6 million.
Previous wording
Management has evaluated the principal conditions that initially gave rise to substantial doubt regarding our ability to continue as a going concern. The historical net losses and accumulated deficit are primarily attributable to non-cash or one-time, non-recurring expenses, including goodwill impairment, stock-based compensation, fair value share adjustment losses, and acquisition-related transaction costs.
Current wording
Management has evaluated the factors contributing to these conditions. Our historical net losses and accumulated deficit are primarily attributable to non-cash or one-time, non-recurring expenses, including goodwill impairment, stock-based compensation, fair value share adjustment losses, and acquisition-related transaction costs.
Previous wording
To address these conditions, management intends to pursue alternative financing sources to enhance liquidity, provide additional working capital, and support repayment of existing debts, if necessary. In support of these objectives, management will continue to pursue strategic initiatives aimed at increasing top-line revenue in the most profitable sales channels across all segments and to reduce overall expenses as a percentage of revenue. Improvements to date have and are expected to continue to result from operational synergies gained through the Company’s back-end shared services model and focus on profitable sales channels.
Current wording
To address the conditions giving rise to substantial doubt, management intends to pursue additional financing sources to enhance liquidity, provide working capital, and support repayment of existing obligations, if necessary. Management also continues to implement strategic initiatives to increase revenue in our most profitable sales channels and reduce overall expenses as a percentage of revenue. Improvements to date have resulted, and are expected to continue to result, from operational synergies achieved through our shared services model and our focus on profitable sales channels.
Previous wording
Despite these plans and the temporary relief provided by the Forbearance Agreement, the conditions described above continue to raise substantial doubt about our ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that may result from the resolution of these uncertainties.
Current wording
Despite these plans, the conditions described above continue to raise substantial doubt about our ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.
Previous wording
The decrease in current assets is primarily due to an increase in cash of $258,588, offset by a net decrease in accounts receivable of $523,357. The decrease in current liabilities is primarily the result of a decrease in fair value of share adjustment of $9,299,703.
Current wording
The increase in current assets is primarily due to increases in accounts receivable and prepaid assets of $622,316 and $349,501, respectively, offset by a decrease in cash of $820,570. The increase in current liabilities is primarily the result of an increase in other payables and accrued liabilities of $577,897.
Previous wording
Net cash used in investing activities was $132,950 for the nine months ended September 30, 2025 and was due to the purchase of property and equipment and intangibles.
Current wording
Net cash used in investing activities was $128,350 for the three months ended March 31, 2025, primarily reflecting capital expenditures for property and equipment and additions to intangible assets.
Previous wording
For the nine months ended September 30, 2025, net cash provided by financing activities was $1,568,395, which includes net proceeds of $364,258 on the revolving loan, net proceeds of $204,137 from notes payable and $1,000,000 in receipts from related parties.
Current wording
For the three months ended March 31, 2025 net cash used in financing activities was $293,307, which includes net payments of $268,397 on the revolving loan and payments of $24,910 on notes payable.
Previous wording
We review goodwill for impairment annually each November or more frequently if indicators of impairment exist. Our goodwill impairment test may require the use of qualitative judgements and fair-value techniques, which are inherently subjective. Impairment loss, if any, is recorded when the fair value of goodwill is less than its carrying value for each reporting unit.
Current wording
We review goodwill for impairment at least annually or more frequently if indicators of impairment exist. Our goodwill impairment test may require the use of qualitative judgements and fair-value techniques, which are inherently subjective. Impairment loss, if any, is recorded when the fair value of goodwill is less than its carrying value for each reporting unit.
Previous wording
No impairment losses related to goodwill were recognized for the nine months ended September 30, 2025 and 2024.
Current wording
No impairment losses related to goodwill were recognized for the three months ended March 31, 2026 and 2025.
Previous wording
There were no impairment losses related to long-lived assets for the nine months ended September 30, 2025 and 2024.
Current wording
There were no impairment losses related to long-lived assets for the three months ended March 31, 2026 and 2025.
Previous wording
Inventory consists of premium body and skincare products, fragrances and nutritional products. Inventory is measured using the first-in, first-out method and stated at average cost as of September 30, 2025. The value of inventories is reduced for excess and obsolete inventories. We monitor inventory to identify events that would require impairment due to obsolete inventory and adjust the value of inventory when required.
Current wording
Inventory consists of premium body and skincare products, fragrances and nutritional products. Inventory is measured and stated at average cost as of March 31, 2026. The value of inventories is reduced for excess and obsolete inventories. We monitor inventory to identify events that would require impairment due to obsolete inventory and adjust the value of inventory when required.
Previous wording
The carrying amount of our consolidated financial assets and liabilities, such as cash and cash equivalents, accounts receivable, accounts payable, prepaid expenses, and accrued expenses approximate their fair value because of the short maturity of those instruments. Our notes payable approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at September 30, 2025 and December 31, 2024.
Current wording
The carrying amount of our consolidated financial assets and liabilities, such as cash, accounts receivable, accounts payable, prepaid expenses, and accrued expenses approximate their fair value because of the short maturity of those instruments. Our notes payable approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at March 31, 2026 and December 31, 2025.
Previous wording
The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period that includes the enactment date.
Current wording
The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income in the period that includes the enactment date.
Previous wording
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the condensed consolidated financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the condensed consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.
Current wording
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.