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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

~~[X]~~ ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: ~~March~~June 3130, 2021

[☐ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from __________ to __________

Commission file number 000-52668

NEW YOU, INC.

(Exact name of registrant as specified in its charter)

Nevada		26-3062661
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

3246 Grey Hawk Court, Carlsbad, California 92010

(Address of principal executive offices)

(866) 611-4694

(Registrant'’s telephone number)

~~Securities~~Indicate by ~~registered~~checkmark ~~pursuant~~whether the issuer (1) filed all reports required to be filed by Section 1213 or 15(bd) of the Securities Exchange Act: of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

~~Title~~Indicate by ofcheck ~~each~~mark ~~class~~whether ~~Trading~~the ~~Symbol~~registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (s§232.405 of this chapter) ~~Name~~during ofthe preceding ~~each~~12 ~~exchange~~months on(or ~~which~~for ~~registered~~such ~~n/a~~shorter ~~n/a~~period ~~n/a~~that the registrant was required to submit and post such files). ☐Yes ☒ No

Indicate by ~~checkmark~~ check mark whether the ~~issuer~~registrant ~~(1)~~is ~~filed~~a ~~all~~large ~~reports~~accelerated ~~required~~filer, toan beaccelerated ~~filed~~filer, bya ~~Section~~non-accelerated 13filer, ora ~~15(d)~~smaller ~~of the Securities Exchange Act of 1934 during the~~reporting ~~preceding~~company, ~~12 months (~~or ~~for~~an ~~such~~emerging ~~shorter~~growth ~~period~~company. ~~that~~See the ~~issuer~~definitions ~~was~~of ~~required~~“large toaccelerated ~~file~~filer,” ~~such~~“accelerated ~~reports)~~filer,” “smaller ~~and~~reporting ~~(2)~~company,” ~~has~~and ~~been~~“emerging ~~subject~~growth tocompany” ~~such filing~~in ~~requirements~~Rule ~~for~~12b-2 of the ~~past~~Exchange ~~90 days~~Act. ~~xYes ☐ No~~

~~Indicate~~Large byaccelerated ~~check~~filer ~~mark~~☐ ~~whether~~Accelerated ~~the~~filer ~~registrant~~☐ ~~has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S~~Non-Taccelerated ~~(§232.405~~filer ~~of this~~☒ ~~chapter)~~Smaller ~~during~~reporting ~~the~~company ~~preceding~~☒ 12Emerging ~~months~~growth ~~(or~~company ~~for such shorter period that the registrant was required to submit such files). Yes x No~~ ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," “smaller reporting company," and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer x Smaller reporting company x Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ~~xNo~~☒ No

As of ~~May~~September 2416, 2021, there were 49,954,976 shares of the Registrant'’s common stock.

TABLE OF CONTENTS

Part I	Financial Information	3
Item 1.	Financial Statements	3
Item 2.	Management'’s Discussion And Analysis Of Financial Condition And Results Of Operations	1820
Item 3.	Quantitative And Qualitative Disclosures About Market Risk	2124
Item 4.	Controls And Procedures	2124
Part II	Other Information	2225
Item 1.	Legal Proceedings	2225
Item 1A.	Risk Factors	2225
Item 2.	Unregistered Sale Of Equity Securities And Use Of Proceeds	2225
Item 3.	Defaults Upon Senior Securities	2325
Item 4.	Mine Safety Disclosures	2325
Item 5.	Other Information	2326
Item 6.	Exhibits	2326

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

New You, Inc.
Condensed Consolidated Balance Sheets

	March 31,			December 31,
	June 30,			December 31,
	2021			2020
		(Unaudited)
ASSETS
Current Assets:
Cash	$	1914,~~196~~577		$	45,102
Credit Card Receivable		41,~~039~~595			1,952
Inventory		7974,~~239~~652			79,438
Loan Receivable		25,000			—
Prepaid Expenses and Other Current Assets		8,212			8,212
Total Current Assets		~~135~~99,~~686~~036			134,704
Property and Equipment, Net		1838,~~557~~609			20,004
Operating Lease Right of Use Asset, Net		24,440			42,380
Investments, Long Term		1,621,000			-
TOTAL ASSETS	$	178,683		$	197,088
Operating Lease Right of Use Asset, Net		6,167			42,380
LIABILITIES AND STOCKHOLDERS' DEFICIT
TOTAL ASSETS	$	1,764,812		$	197,088
LIABILITIES AND STOCKHOLDERS’ DEFICIT
LIABILITIES
Current Liabilities:
Accounts Payable and Other Accrued Expenses	$	~~415~~480,~~848~~007		$	419,487
Accounts Payable to Related Parties		5869,~~135~~153			30,625
Notes Payable, Current		180,185			85,081
Notes Payable, current		550,024			85,081
Convertible Notes Payable, net of $156,186 and $177,798 discount, respectively		197,314			228,202
Convertible Notes Payable, net of discount		393,663			228,202
Derivative Liability		~~264~~2,~~944~~953,400			1,176,087
Operating Lease Liability, Current		7018,~~816~~692			82,281
Related Party Debt		596,159			573,659
Purchase Consideration Payable		9,035,000			-
Total Current Liabilities		1,783,401			2,595,422
Related Party Debt		498,831			573,659
Non-current Liabilities:
Total Current Liabilities		13,998,770			2,595,422
Notes Payable, Noncurrent		33,773			128,877
Noncurrent Liabilities
Total Non-current Liabilities		33,773			128,877
Notes Payable, Noncurrent		5,556			128,877
TOTAL LIABILITIES		1,817,174			2,724,299
Total Non-current Liabilities		5,556			128,877
COMMITMENTS AND CONTINGENCIES - SEE NOTE 9
TOTAL LIABILITIES		14,004,326			2,724,299
COMMITMENTS AND CONTINGENCIES - SEE NOTE 5
STOCKHOLDERS’ DEFICIT
Common stock at $0.00001 par value: 1,400,000,000 shares authorized; 43,318,396 and 39,523,051 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively		433			395
Common stock at $0.00001 par value: 1,400,000,000 shares authorized as of June 30, 2021 and December 31, 2020; 49,954,976 and 39,523,051 shares issued and outstanding as of June 31, 2021 and December 31, 2020, respectively.		499			395
Additional Paid-in Capital		6,405,591			4,639,409
Series A Perferred Stock at $0.00001 par value: 4,500,000 shares authorized as of Jun 30,2020 and 0 authorized December 31,2020; 0 shares issued and outstanding as of June 31, 2021 and December 31, 2020		-			-
Accumulated Deficit		(8,044,515	)		(7,167,015	)
Additional Paid-in Capital		6,695,623			4,639,409
TOTAL STOCKHOLDERS' DEFICIT		(1,638,491	)		(2,527,211	)
Accumulated Deficit		(18,935,636	)		(7,167,015	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	178,683		$	197,088
TOTAL STOCKHOLDERS’ DEFICIT		(12,239,514	)		(2,527,211	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	1,764,812		$	197,088

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

New You, Inc.
Condensed Consolidated Statements of Operations

	For The Three Months Ended						For The Six Months Ended
	March 31,
	June 30,						June 30,
	2021			2020			2021			2020
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue	$	~~333~~302,~~653~~936		$	~~531~~544,~~522~~600		$	636,589		$	1,076,123
Cost of Goods Sold		5919,~~250~~638			8150,~~842~~007			78,888			131,849
Gross Profit		~~274~~283,~~403~~298			~~449~~494,~~680~~593			557,701			944,274
Selling, General and Administrative Expenses
Commission Expense		8379,~~123~~906			~~147~~161,~~689~~954			163,028			309,644
Stock Based Compensation		110,~~801,619~~000			~~764~~695,~~916~~660			1,811,619			1,460,576
Other		288,591			469,078
Goodwill Impairment		8,138,045			-			8,138,045			-
Total Selling, General and Administrative Expenses		2,173,333			1,381,683
Other		840,049			301,234			1,128,640			770,310
(Loss) Income from Operations		(1,898,930	)		(932,003	)
Total Selling, General and Administrative Expenses		9,067,999			1,158,848			11,241,331			2,540,530
Interest Expense		253,624			31,933
(Loss) Income from Operations		(8,784,702	)		(664,255	)		(10,683,631	)		(1,596,256	)
Change in Fair Value of Derivative		(1,275,854	)		—
Interest Expense		1,863,119			491,400			2,116,743			523,333
Net (Loss) Income before Income Tax Expense		(876,700	)		(963,936	)
Change in derivative liability		243,300						(1,032,554	)		-
Income Tax Expense		800			800
(Loss) before Income Tax Expense		(10,891,121	)		(1,155,655	)		(11,767,820	)		(2,119,589	)
Net (Loss) Income	$	(877,500	)	$	(964,736	)
Income Tax Expense		-			-			800			800
Net (Loss) Income Per Common Share
Net (Loss)	$	(10,891,121	)	$	(1,155,655	)	$	(11,768,620	)	$	(2,120,389	)
- Basic and Diluted	$	(0.02	)	$	(0.03	)
Net (Loss) Per Common Share
Weighted Average Common Shares Outstanding
- Basic and Diluted	$	(0.22	)	$	(0.04	)	$	(0.27	)	$	(0.08	)
- Basic and Diluted		40,780,981			27,809,200
Weighted Average Common Shares Outstanding
- Basic and Diluted		49,954,976			27,809,200			44,110,103			27,809,200

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

New You, Inc.
Condensed Consolidated Statement of Shareholders’ Deficit

For the ~~Three~~ Six Months Ended ~~March~~June 3130, 2021

(Unaudited)

	~~Common~~	Common							~~Total Stockholders' Deficit~~	Additional Paid			Accumulated			Total Stockholders’
	~~Shares~~	Shares	~~Par Value~~		~~Additional Paid in Capital~~	Par Value	~~Accumulated Deficit~~			in Capital			Deficit			Deficit
Balance as of December 31, 2020	~~39,523,051~~	$	~~395~~39,523,051	$	~~4,639,409~~	$	~~(7,167,015)~~395	$	~~(2,527,211)~~	$	4,639,409		$	(7,167,015	)	$	(2,527,211	)
Stock-based Compensation - Employees	-		-		~~53,125~~		-		~~53,125~~
Stock-based Compensation - Consultants	~~70,000~~		170,000		~~1,748,493~~		-1		~~1,748,494~~		1,801,618			-			1,801,619
Re-characterization of beneficial conversion feature upon derivative treatment of notes payable					(150,000)		-		(150,000)
Re-characterization of beneficial conversion feature upon derivative treatment of conversion option			-				-				(150,000	)		-			(150,000	)
Shares Issued Upon Conversion of Notes Payable and Interest	3,725,345		37		114,564		-		114,601
Shares issued for partial conversion of Share holder loans for Nish Mehta and Ray Grimm
Net Loss	-		-		-		(877,500)		(877,500)
Shares issued for partial conversion of Share holder loans for Nish Mehta and Ray Grimm, shares
Balance as of March 31, 2021	43,318,396	$	433	$	6,405,591	$	(8,044,515)	$	(1,638,491)
Shares Issued in Connection with Note Payable Issuance
Shares Issued in Connection with Note Payable Issuance, shares
Common Shares Issued for Cash Received in 2019
Common Shares Issued for Cash Received in 2019, shares
Shares Issued in Connection with Note Payable Interest Penalties
Shares Issued in Connection with Note Payable Interest Penalties, shares
Shares Issued in Connection with Notes Payable & Interest			3,725,345				37				114,564						114,601
Net Loss			-				-				-			(877,500	)		(877,500	)
Balance as of March 31, 2021			43,318,396				433				6,405,591			(8,044,515	)		(1,638,491	)
Stock-based Compensation - Consultants			100,000				1				9,999			-			10,000
Shares issued for partial conversion of Share holder loans for Nish Mehta and Ray Grimm			5,336,580				53				160,044			-			160,097
Shares Issued in Connection with Notes Payable & Interest			1,200,000				12				119,988			-			120,000
Net Loss			-				-				-			(10,891,121	)		(10,891,121	)
Balance as of June 30, 2021			49,954,976			$	499			$	6,695,623		$	(18,935,636	)	$	(12,239,514	)

New You, Inc.
Condensed Consolidated Statement of Shareholders’ Deficit

For the ~~Three~~ Six Months Ended ~~March~~June 3130, 2020

(Unaudited)

	~~Common~~	Common							Additional Paid				Accumulated				Total Stockholders’
	~~Shares~~	Shares		~~Par Value~~		Par Value		~~Additional Paid in Capital~~	in Capital			~~Accumulated Deficit~~	Deficit			~~Total Stockholders' Deficit~~	Deficit
Balance as of December 31, 2019	~~32,985,200~~	$	32,985,200		~~330~~	$	330		~~1,149,004~~$	$1,149,005		~~(2,120,304)~~	$	$(2,120,304	)	~~(970,970)~~	$	(970,969	)
Stock-based Compensation - Employees	-		-		-		-		~~518,750~~	518,750		-		-		~~518,750~~		518,750
Stock-based Compensation - Consultants	~~458,000~~		458,000		5		5		~~246,161~~	246,161		-		-		~~246,166~~		246,166
Shares Issued in Connection with Note Payable Issuance	~~50,000~~		50,000		-		-		~~25,000~~	25,000		-		-		~~25,000~~		25,000
Net Loss	-		-		-		-		-	-		~~(964,736)~~		(964,734	)	~~(964,736)~~		(964,734	)
Balance as of March 31, 2020	~~33,493,200~~	$	33,493,200		~~335~~	$	335		~~1,938,915~~	$1,938,916		~~(3,085,040)~~		$(3,085,038	)	~~(1,145,790)~~		(1,145,787	)
Stock-based Compensation - Employees			-				-			518,750				-				518,750
Stock-based Compensation - Consultants			3,796,690				38			176,872				-				176,910
Common Shares Issued for Cash Received in 2019			90,000				1			(1	)			-				-
Shares Issued in Connection with Note Payable Interest Penalties			900,000				9			449,991				-				450,000
Net Loss			-				-			-				(1,155,655	)			(1,155,655	)
Balance as of June 30, 2020			38,279,890			$	383		$	3,084,528			$	(4,240,693	)		$	(1,155,782	)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

New You, Inc.
Condensed Consolidated Statements of Cash Flows

		For The Three Months Ended			For The Three Months Ended
	For The Six Months Ended			For The Six Months Ended
		March 31,			March 31,
	June 30,			June 30,
	2021	~~2021~~		2020	~~2020~~
	(Unaudited)	~~(Unaudited)~~		(Unaudited)	~~(Unaudited)~~
Operating Activities
Net (Loss) Income	$	(877,500	)	$	(964,736	)
Net (Loss)	$	(11,768,620	)	$	(2,120,389	)
Adjustments to Reconcile Net (Loss) Income to Net Cash (Used in) Provided by Operating Activities:
Depreciation and Amortization		12,~~447~~895			13,~~663~~327
Amortization of Operating Lease Right of Use Asset		1736,~~940~~213			220,~~045~~658
Amortization of Debt Discount		83,713			13,600
Goodwill Impairment		8,138,045
Other Non-cash Interest Expense		139,711			—
Other non-cash interest expense		1,710,617			-
Change in Fair Value of Derivative		(1,275,854	)		—
Amortization of Debt Issuance Costs		329,227			25,000
Stock-based Compensation – Employees		53,125			518,750
Change in fair value of derivative liability		(1,032,554	)		-
Stock-based Compensation - Consultants		1,748,493			246,166
Shares Issued in Connection with Note Payable Interest Penalties		234,602			450,000
Stock-based Compensation - Employees		-			1,037,500
Stock-based Compensation - Consultants		1,811,619			423,076
Changes in Operating Assets and Liabilities:
Credit Card Receivable		~~(2,087~~357	)		17,~~055~~390
Inventory		~~200~~4,786			5975,~~377~~464
Prepaid Expenses and Other Current Assets		—-			(831,~~483~~863	)
Accounts Payable and Other Current Liabilities		(360,~~640~~519	)		(2625,~~887~~299	)
Accounts Payable to Related Parties		95(182,~~011~~248	)		~~(46~~14,~~020~~630	)
Operating Lease Liabilities		(1163,~~465~~589	)		(23,~~530~~952	)
Net Cash (Used in) Provided by Operating Activities		(30718,~~906~~131	)		(~~190~~114,~~000~~458	)
Investing Activities
Issuance of Loan Receivable		(25,000	)		—
Purchase of Property and Equipment		(21,500	)		-
Net Cash (Used in) Provided by Operating Activities		(25,000	)		—
Purchase of Investments		(436,000	)		-
Net Cash Used in Investing Activities		(457,500	)		-
Financing Activities
Proceeds from Related Party Debt		—18,000			~~109~~159,000
Repayments of Related Party Debt		~~(45,000~~-	)		(44368,~~000~~500	)
Proceeds from Convertible Notes, Net of Issuance Costs		75,000			125,000
Proceeds from Convertible Notes Payable, Net of Costs		949,250			323,958
Net Cash Provided by (Used in) Financing Activities		30,000			190,000
Repayment of convertible notes payable		(163,766	)		-
Net Increase (Decrease) in Cash		(25,906	)		—
Loan Proceeds, Net of Issuance Costs		450,000			-
Cash, Beginning of Period		45,102			1,125
Loan Repayments		(108,378	)		-
Cash, End of Period	$	19,196		$	1,125
Net Cash Provided by (Used in) Financing Activities		1,145,106			114,458
Net Increase (Decrease) in Cash		(30,525	)		-
Cash
Beginning of Period		45,102			1,125
End of Period	$	14,577		$	1,125
Supplemental Disclosures
Cash Paid for Interest	$	2655,500		$	1852,~~333~~500
Cash Paid for Income Taxes	$	800		$	~~800~~-
Non-cash Investing and Financing Activities:
Payroll and Other Payables to Related Parties Converted to Related Party Debt	$	67,500		$	67137,~~500~~100
Shares Issued Upon Conversion of Notes Payable and Interest	$	114,601		$	—
Shares Issued in Connection with Note payable Issuance	$	-		$	25,000
Shares Issued in Connection with Note Payable Issuance	$	—		$	25,000
Shares Issued in Connection with Late Interest Payments	$	234,602		$	450,000
Conversion of related party notes into equity	$	160,097		$	-
Unpaid purchase consideration	$	1,185,000		$	-

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

NEW YOU, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1 – Organization and Summary of Significant Accounting Policies

Nature of Business

New You, Inc., formerly known as The Radiant Creations Group, Inc. (the “Company”) was incorporated in Nevada on December 29, 2005. From inception, the Company'’s principal business activity was the acquisition and exploration of mineral resources. On June 20, 2013, following a change of control and subsequent acquisition of an exclusive license agreement, the Company changed its principal ~~business~~ business to the development and marketing of cosmetics and over-the-counter personal enhancement products and devices. After a subsequent change in control on July 11, 2018, the Company changed its principal business to selling cannabidiol (“CBD”) hemp oil-based products through independent business owners (called “Brand Partners”).

On May 3, 2021, we entered into an Exchange Agreement with ST Brands, Inc. (STB), a Wyoming corporation, and the shareholders of STB. Under the Agreement, the Company acquired all of the issued and outstanding common stock of STB in exchange for our issuance to the Shareholders of STB, shares of our newly-designated Series A Preferred Stock. The class of Series A Preferred Stock consists of 4,500,000 shares of preferred stock convertible to our common stock at a ratio of 100 for 1. As a whole, all designated shares of Series A Preferred are convertible to approximately the cumulative equivalent of ninety percent (90%) of our issued and outstanding share capital as of May 3, 2021. The Agreement contemplates that the Company’s existing business and assets will remain and continue under the Company’s ownership following the each of the closings.

Shares of Series A Preferred Stock shall be issuable to the Shareholders under the Agreement upon each of several contemplated Closings, each Closing to take place upon our receipt of audited financial statements reflecting certain levels of annual revenue earned by STB and/or Acquired Material Businesses, as defined in the Exchange Agreement and as described in Exhibit B in the Agreement. Up to 4,500,000 shares of Series A Preferred Stock may be issued to the Shareholders, with all Closings to occur on or before April 30, 2022. Under the Initial Closing on the date of the Agreement, we issued 500,000 shares of Series A Preferred Stock were issuable to the Shareholders of STB. The fair value of the 500,000 shares of Series A Preferred Stock is included in Purchase Consideration Payable on the balance sheet.

The Company initially recorded $7,850,000 as goodwill upon acquisition of STB, which had minimal net assets. Management determined that the goodwill is not recoverable, given that STB had no operations, and accordingly impaired the entire goodwill balance during the quarter ended June 30, 2021. The Company has not recorded any amounts related to the additional 4,000,000 shares of Series A Preferred Stock to be issued upon meeting certain milestones as such milestones are not deemed probable and the fair value of the contingent consideration was not deemed material at inception and at June 30, 2021.

On May 6, 2021, pursuant to the terms of the Agreement, the Board of Directors (the “Board”) of the Company appointed Jason Frankovich to serve as the new Executive Chairman of the Board.

On May 6, 2021, we filed a Certificate of Designation for our newly-designated Series A Preferred Stock with the Secretary of State of the State of Nevada (the “Secretary of State”). The class of Series A Preferred Stock (“Series A”) consists of four million five hundred thousand (4,500,000) shares, par value $0.00001 per share. Key provisions include:

Conversion: Each share of Series A shall be convertible at the option of the holders thereof, and without the payment of additional consideration, at any time, into shares of our common stock at a conversion rate of one hundred (100) shares of common stock for every one (1) share of Series A held (the “Conversion Rate”), subject to adjustment as set forth in the Certificate of Designation. The Conversion Rate is subject to pro-rata downward adjustment based on the number of shares of common stock (or common stock equivalents) issued in the future by us for the acquisition of Acquired Material Businesses within the meaning of the Agreement. The Conversion Rate is also subject to adjustment for stock splits, reverse splits, share dividends, and similar corporate actions.

Ranking: Shares of Series A shall, with respect to rights on liquidation, winding up and dissolution, rank pari passu to our common stock, par value $0.00001 per share, and any other classes of capital stock.

Voting Rights: Each share of Series A shall vote on an as-converted basis with the common stock or other equity securities, resulting in 100 votes per one share of Series A Preferred Stock.

The Company, through its wholly owned subsidiary New You LLC, markets and sells its products through a multi-level marketing sales opportunity.

Basis of Presentation

The unaudited condensed consolidated financial statements include the operations of New You, Inc. and its wholly-owned subsidiary, New You LLC. These unaudited condensed consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with Article 10 of Securities and Exchange Commission (SEC) Regulation S-X for Interim Reporting. All intercompany transactions, accounts and profits, if any, have been eliminated in the unaudited condensed consolidated financial statements. In the opinion of management, all adjustments considered necessary for fair statement have been included.

These unaudited condensed consolidated financial statements do not include all disclosures required by GAAP. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the more detailed audited financial statements of New You, Inc. for the year ended December 31, 2020, which are included in the Company’s Annual Report on Form 10-K.

The results for the ~~three~~six months ended ~~March 31~~June 30, 2021 and 2020 are not necessarily indicative of results to be expected for a full year, any other interim periods, or any future year or period.

Risks and Uncertainties

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States. We are currently negatively impacted through a reduction in sales by the outbreak of COVID-19 and the related business and travel restrictions and changes to behavior intended to reduce its spread, and continue to monitor its impact on operations, financial position, cash flows, customer purchasing trends, and the industry in general, in addition to the impact on our employees. We have concluded that while it is reasonably possible that the virus could continue to have a negative impact on the results of operations, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s significant estimates include estimates for future charge-backs and allowance for slow moving or obsolete inventory.

Basic and Diluted Net Loss and Income Per Share

Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method. For purposes of this calculation, the Company currently does not have any common share equivalents; therefore, its basic and diluted net loss per share calculations is the same.

The following table presents the computation of basic and diluted net loss or income per common share:

	For The Three Months Ended March 31,
		2021			2020
Historical net loss per share
Numerator
Net loss		(877,500	)		(964,736	)
Denominator
Weighted-average common shares outstanding		40,780,981			33,190,726
Less: Weighted-average restricted shares		—			(5,381,526	)
Denominator for basic and diluted net loss per share		40,780,981			27,809,200
Basic and diluted net loss per share	$	(0.02	)	$	(0.03	)

	For The Three Months Ended						For The Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Historical net (loss) income per share
Numerator
Net (loss) income		(10,891,121	)		(1,155,655	)		(11,768,620	)		(2,120,389	)
Denominator
Weighted-average common shares outstanding		49,954,976			35,237,476			44,110,103			34,206,607
Less: Weighted-average shares subject to repurchase		-			(7,428,276	)		-			(6,397,407	)
Denominator for basic and diluted net loss per share		49,954,976			27,809,200			44,110,103			27,809,200
Basic and diluted net (loss) income per share	$	(0.22	)	$	(0.04	)	$	(0.27	)	$	(0.08	)

Potentially dilutive securities that are not included in the calculation of diluted net loss or income per share because their effect is anti-dilutive are as follows (in common equivalent shares):

	For The Three Months Ended March 31,
	2021		2020
Restricted Stock		—		5,366,538
Convertible Notes		4,868,029		—

	For The Three Months Ended				For The Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Restricted shares		-		7,428,276		-		6,397,407
Convertible notes		16,349,579		-		16,349,579		-

Recently Issued Accounting Pronouncements

FASB ASU No. 2019-12 Income Taxes - In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in the accounting standards. The standard eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also clarifies and simplifies other aspects of the accounting for income taxes. The standard is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The Company has adopted this guidance as of its first quarter ended March 31, 2021. Such adoption did not have an impact to the Company’s financial position, results of operations, or cash flows.

ASU 2020-06: In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and simplifies the diluted earnings per share calculation in certain areas. The amendments in this ASU are effective for annual and interim periods beginning after December 15, 2023, although early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on its financial statements.

Note 2 – Going Concern

We incurred a net loss of $~~877~~11,~~500~~ 768,620 for the ~~three~~six months ended ~~March~~June 3130, 2021 and had an accumulated deficit of $818,~~404~~935,~~515~~635. At ~~March~~June 3130, 2021, we had a cash balance of $1914,~~196~~577 and a working capital deficit of $113,~~647~~899,~~715~~734.

We have not been able to generate sufficient cash from operating activities to fund our ongoing operations. We will be required to raise additional funds through public or private financing, additional collaborative relationships or other arrangements until we are able to raise revenues to a point of positive cash flow. We are evaluating various options to further reduce our cash requirements to operate at a reduced rate, as well as options to raise additional funds, including obtaining loans and selling common stock. There is no guarantee that we will be able to generate enough revenue and/or raise capital to support operations.

Based on the above factors, substantial doubt exists about our ability to continue as a going concern for one year from the issuance of these financial statements.

Note 3 – Concentrations of Business and Credit Risk

The Company at times maintains balances in various operating accounts in excess of federally insured limits.

Since the Company sells its products to a large number of customers, there is no receivable or revenue concentration from customers. However, as of ~~March 31~~June 30, 2021 and 2020, one credit card processor accounted for 100% of credit card receivables.

The Company also made purchases from and has accounts payable to Carlsbad Naturals, LLC as described in Note 10.

Note 4 4 – ~~Loan~~Investments ~~Receivable~~in Future Subsidary

During the ~~three~~six months ended ~~March~~June 3130, 2021, ~~and~~there ~~prior~~were toinvestments anin ~~Exchange~~the ~~Agreement~~amounts ~~entered~~of ~~into~~$120,000 onto ~~May~~Herring 3,Creek ~~2021~~Pharmaceuticals, ~~the Company loaned~~ $251,000 to ST ~~Brands.~~Biosciences, ~~(See Note 12.) The loan is non-interest bearing~~ and ~~payable upon demand. As of March 31~~$1,500,000 ~~2021~~to ~~and~~F ~~December~~Squared 31Management, ~~2020,~~all ~~the~~of ~~balance was~~which ~~$25,000~~are ~~and~~future ~~$0, respectively~~subsidiaries.

Herring Creek is a pharmaceutical research and development (“R&D”) firm that provides services to ST brands. In April 2021, ST Brands entered into an agreement with Herring Creek to develop a synthetic CBD “cold crystal” molecule to be utilized as a sweetener additive in CBD drinks that ST Brands seeks to manufacture and distribute through its strategic partners. The Company made an advance payment of $120,000 to acquire minority interest in the future.

On 6/28/2021, ST brands entered into an agreement to acquire F-Squared Management. The specifics of the acquisition included ST Brands paying F-Squared Management $1.5m by 6/28/2021 for a 49% interest in the company. To date, ST Brands has remitted $315,000 to F-Squared Management as part of this transaction and owes an additional $1,185,000 to complete the acquisition.

Investments in unconsolidated affiliates are accounted for under the cost or the equity method of accounting, as appropriate. The Company accounts for investments in limited partnerships or limited liability corporations, whereby the Company owns a minimum of 5% of the investee’s outstanding voting stock, under the equity method of accounting. These investments are recorded at the amount of the Company’s investment and adjusted each period for the Company’s share of the investee’s income or loss, and dividends paid. As investments accounted for under the cost method do not have readily determinable fair values, the Company only estimates fair value if there are identified events or changes in circumstances that could have a significant adverse effect on the investment’s fair value.

Note 5 – Equity

Restricted Stock Grants

The ~~Company~~ Company estimated the fair value of restricted stock grants at $0.50 per share based on the price at which the Company issued common shares for cash in 2019 and not based on the amount that shares were trading for on the OTC “Pink” market since shares were thinly traded on the market from August 2019 to ~~March~~June 3130, 2021 when the equity instruments were granted. ~~There were no grants of restricted stock to employees or consultants during the first quarter of 2021.~~

The table below summarizes the activity of the restricted stock during the ~~three~~six months ended ~~March~~June 3130, 2021:

	Number of Shares			Weighted Average Fair Value per Share
Non-vested as of January 1, 2021		3,343,064		$	0.50
Granted		70,000			0.50
Vested		(3,413,064	)		0.50
Forfeited		—			—
Non-vested as of March 31, 2021		—		$	0.50

Summary of Restricted Stock

For the three months ended March 31, 2021 the compensation costs include $1,801,619 of stock based compensation. No portion of the total compensation cost was capitalized. The unrecognized compensation costs as of March 31, 2021 is $0. The Company recognized stock based compensation expense using the straight line method and forfeitures are recognized as they occur. During the three months ended March 31, 2021, the Company wrote off the balance of unamortized, non-vested restricted stock because the Board modified the terms of the grants to accelerate vesting. As a result, all outstanding share grants had fully vested as of March 31, 2021.

	Number of Shares			Weighted Average Fair Value per Share
Non-vested as of January 1, 2021		3,343,064		$	0.50
Granted		170,000			0.50
Vested		(3,513,064	)		0.50
Forfeited		-			-
Non-vested as of June 30, 2021		-		$	0.50

For the six months ended June 30, 2021 the compensation costs include $1,811,619 of stock based compensation. No portion of the total compensation cost was capitalized. The unrecognized compensation costs as of June 30, 2021 is $0. The Company recognized stock based compensation expense using the straight line method and forfeitures are recognized as they occur. During the six months ended June 30, 2021, the Company wrote off the balance of unamortized, non-vested restricted stock because the Board modified the terms of the grants to accelerate vesting. As a result, all outstanding share grants had fully vested as of June 30, 2021.

Other Equity issuances:

There were 6,636,580 restricted shares issued that vested immediately on the date issued. 5,336,580 shares were issued to the CEO and a board member to convert a total of $160,097 in shareholder loans, 1,200,000 issued to a related party in consideration of interest owed by the company on a related note payable, and 100,000 shares issued to a consultant as a bonus for services provided to the company.

Note 6 – Commitments and Contingencies

Operating Lease Commitments

The Company leases a warehouse facility under a lease agreement that expires July 31, 2021. The Company does not have any significant capital leases.

The components of total lease costs are as follows:

	Three Months Ended March 31, 2021
Operating lease cost	$	18,613
Total lease cost	$	18,613

Cash paid for amounts included in operating lease liabilities was $12,138 for the three months ended March 31, 2021. The table below presents total operating lease ROU assets and lease liabilities as of March 31, 2021:

	For The Six Months Ended June 30,		For The Six Months Ended June 30,
	2021		2020
Operating lease cost		37,226		37,226
Total lease cost	$	37,226	$	37,226

Operating lease ROU assets		$	24,440
Operating lease liabilities		$	70,816

Cash paid for amounts included in operating lease liabilities was $64,605 for the six months ended June 30, 2021. The table below presents total operating lease ROU assets and lease liabilities as of June 30, 2021:

~~The~~Schedule ~~table below presents the maturities~~ of ~~operating~~Operating ~~lease~~Lease ~~liabilities~~ROU asAssets ~~of March~~and ~~31,~~Lease Liabilities

2021	$	71,193
Operating lease ROU assets	$	6,167
2022	$	—
Operating lease liabilities	$	18,801
Total Lease Payments	$	71,193
Less: Discount	$	(377	)
Operating Lease Liability	$	70,816

	Three Months Ended March 31, 2021
Weighted average remaining lease term (years)		0.33
Weighted average discount rate		7	%

The table below presents the maturities of operating lease liabilities as of June 30,


2021	$	18,839
2022	$	—
Total Lease Payments	$	18,839
Less: Discount	$	(38	)
Operating Lease Liability	$	18,801

	Three Months Ended March 31, 2021
Weighted average remaining lease term (years)		0.08
Weighted average discount rate		7	%

Litigation and Claims

The ~~Company~~ Company may be involved in lawsuits and claims arising in the ordinary course of business from time to time. The Company reviews any such legal proceedings and claims on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and it discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for the Company’s financial statements not to be misleading. To estimate whether a loss contingency should be accrued by a charge to income, the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss. The Company does not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated. Based upon present information, the Company determined that there were no matters that required an accrual as of ~~March~~June 3130, 2021 or 2020, nor were there any asserted or unasserted material claims for which material losses are reasonably possible.

Note 7 – Notes Payable

In April 2020, the Company’s subsidiary received a non-interest bearing advance from the Small Business Administration under the Emergency Injury Disaster Loan program of $10,000. All or a portion of this loan may be forgiven if the Company satisfies certain criteria.

In May, 2020, the Company’s subsidiary received a Paycheck Protection Program loan in the amount of $103,958. The monthly payments on the note are deferred for a period of 6 months and the notes bear interest of 1%. Monthly payments of $5,850 will begin on December 21, 2021; however all or a portion of this loan may be forgiven if the Company satisfies certain criteria as follows:

The Company may apply for forgiveness of the amount due on this loan in an amount equal to the sum of the following costs incurred during the 8-week period beginning on the date of first disbursement of this loan:

11a. Payroll costs b. Any payment of interest on a covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation) c. Any payment on a covered rent obligation d. Any covered utility payment

aThe amount of loan forgiveness shall be calculated (and may be reduced) in accordance with the requirements of the Paycheck Protection Program, including the provisions of Section 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (P.L. ~~Payroll~~116-136). Not more than 25% of the amount forgiven can be attributable to non-payroll costs. The Company applied for forgiveness of this loan in August 2021.

b.In July, ~~Any~~2020, ~~payment~~the Company’s subsidiary received a Paycheck Protection Program loan in the amount of ~~interest~~$100,000.The monthly payments on the note are deferred for a ~~covered~~period ~~mortgage~~of ~~obligation~~6 ~~(which~~months ~~shall~~and ~~not~~the ~~include~~notes ~~any~~bear ~~prepayment~~interest of or1%. ~~payment~~Monthly payments of ~~principal~~$5,628 began on January 1, 2021. The proceeds of the requested PPP Loan may be used only for business purposes permitted under the Paycheck Protection Program, including permitted payroll costs and benefits, interest on business mortgage obligations incurred before February 15, 2020, rent under a lease entered into before February 15, 2020 and utilities for which service began before February 15, 2020. Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage ~~obligation)~~interest payments, covered rent payments, and covered utilities, and not more than 25% of the forgiven amount may be for non-payroll costs.

cIn June, 2021, the Company received a loan in the amount of $150,000. ~~Any~~The Company will make weekly payments of $2,976 across 65 weeks. The weekly payment onconsists aof ~~covered~~$2,307.69 ~~rent~~of ~~obligation~~the principal of the loan and $669.23 in interest. The total repayment amount will be $193,500. The balance of the loan at June 30, 2021 is $143,077.

dIn June 2021, the Company received a loan in the amount of $75,000, the Company will make weekly payments of $7,495 until the loan is paid off. ~~Any~~The ~~covered~~balance ~~utility~~of ~~payment~~the loan at Jun 30, 2021 is $49,515

~~The~~During the ~~amount~~six ofmonths ~~loan~~ended ~~forgiveness~~June ~~shall be~~30, ~~calculated~~2021, (directors and ~~may~~members beof ~~reduced)~~management inconverted deferred ~~accordance~~payroll ~~with~~to related party debt in the ~~requirements~~amount of $135,000. As of December 31, 2020, the ~~Paycheck~~balance ~~Protection~~includes ~~Program,~~loans ~~including~~to the ~~provisions~~Company ~~of Section~~or ~~1106~~various expenses paid for on behalf of the ~~Coronavirus~~Company. These ~~Aid,~~loans ~~Relief~~contained no interest, ~~and~~term ~~Economic~~or ~~Security~~due ~~Act~~date. ~~(CARES~~As ~~Act)~~of ~~(P.L.~~June ~~116-136).~~30, ~~Not~~2021, ~~more~~these ~~than~~loans ~~25%~~and deferred payroll had a combined balance of $498,831 for the ~~amount~~CEO, ~~forgiven can~~the bePresident, ~~attributable~~and totwo ~~non-payroll~~other ~~costs~~board members. See Note 11.

InDuring ~~July~~the six months ended June 30, ~~2020~~2021, the Company’s ~~subsidiary~~ received ~~a Paycheck Protection Program~~ loan inproceeds ~~the amount~~ of $~~100~~50,000~~.The~~ ~~monthly payments on the note are deferred~~ for afuture ~~period~~receipts of 6$75,000 ~~months~~to ~~and~~be ~~the~~paid ~~notes~~in ~~bear~~daily instalments ~~interest~~ of 125%. ~~Monthly payments~~ of ~~$5,628~~daily ~~will begin on January 1, 2021~~sales. The ~~proceeds~~balance of the ~~requested~~loan ~~PPP~~at ~~Loan~~Jun ~~may be used only for business purposes permitted under the Paycheck Protection Program~~30, ~~including~~2021 ~~permitted~~is ~~payroll costs and benefits~~$28, ~~interest on business mortgage obligations incurred before February 15, 2020, rent under a lease entered into before February 15, 2020 and utilities for which service began before February 15, 2020~~948. Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities, and not more than 25% of the forgiven amount may be for non-payroll costs.

During the ~~three~~six months ended ~~March~~June 3130, 2021, ~~directors~~the ~~and~~Company ~~members~~received ofloan ~~management~~proceeds ~~converted deferred payroll to related party debt~~ in the amount of $6779,~~500.~~015 Asfor offuture ~~December~~receipts ~~31,~~of ~~2020~~$119,000 ~~the balance includes loans~~ to ~~the~~be ~~Company or various expenses~~ paid in ~~for~~weekly oninstalments ~~behalf~~ of ~~the Company. These loans contained no interest~~$4, ~~term or due date~~959. As ofThe ~~March 31, 2021, these loans and deferred payroll had a combined~~ balance of ~~$549,159 for~~ the ~~CEO,~~loan ~~the~~at ~~President~~Jun 30, ~~and~~2021 ~~two~~is ~~other board members~~$59,179. ~~See Note 10.~~

During the six months ended June 30, 2021, the Company received loan proceeds in the amount $79,900 for future receipts of $122,400 to be paid in daily instalments of $765. The balance of the loan at Jun 30, 2021 is $60,903.

Note 8 – Convertible Debt

As of ~~March~~June 3130, 2021, the Company owed $~~353~~1,354,500 in principal (before a debt discount of $~~156~~960,~~186~~837 and $1333,~~250~~106 in accrued interest (included in accounts payable and accrued expenses) on its outstanding convertible promissory notes. As of December 31, 2020, the Company owed $406,000 in principal (before a debt discount of $177,798) and $9,549 in accrued interest.

	March 31, 2021			December 31, 2020
Principal	$	353,500		$	406,000
Debt discount		(156,186	)		(177,798	)
Total Principal	$	197,314		$	228,202

Summary of Convertible Debt

Note 1 - On January 2, 2020, the Company received loan proceeds of $125,000 pursuant to a promissory note (“First Convertible Note”), with a maturity date of June 15, 2020 and interest of $4,167 per month. The note’s terms required that the Company issue 50,000 common shares, and allowed the note holder to convert the note into common shares at a conversion price of $0.50 per share. This note was not paid off as of March 31, 2021. The Company is still making the agreed upon interest payments of $4,167 per month and there are no penalties for not paying the note off by its maturity date. As of March 31, 2021, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 250,000.

	June 30, 2021			December 31, 2020
Principal	$	1,354,500		$	406,000
Debt discount		(960,837	)		(177,798	)
Total Principal	$	393,663		$	228,202

Note 1 2 - On ~~June~~ 17January 2, 2020, the Company received ~~$85,000 in~~ loan proceeds, ~~which is net~~ of $3125,000 ~~in debt issuance costs,~~ pursuant to a ~~loan~~promissory ~~agreement~~ note (“~~Second~~First Convertible Note”), with a maturity date of June 1715, ~~2021~~2020 and an interest ~~rate~~ of 8%$4,167 per ~~annum from the date of issuance until maturity date~~month. ~~Any~~The ~~amount of principal or interest on this~~ note’s ~~which~~terms isrequired ~~not~~that ~~paid when due shall bear interest at~~ the ~~rate of 22% per annum from the due date until the full amount is paid. Upon certain events of default, the~~ Company ~~would~~issue ~~be obligated to pay cash equal to the greater of (i) 150% of the outstanding principal and interest~~50, ~~and (ii) the highest closing price of the Company’s~~000 common ~~stock from the date of first default to the date of payment~~shares, ~~multiplied by the number of shares that would be issued if the outstanding principal~~ and ~~interest~~allowed ~~were converted at 61% of~~ the ~~lowest~~note ~~closing~~holder ~~price in the last 20 trading days prior~~ to ~~the date of payment. The holder may~~ convert the note tointo common shares ~~starting 180 days after the issuance date~~ at a conversion price ~~equal~~of to$0.50 ~~61%~~per ofshare. ~~the~~This ~~lowest~~note ~~trading~~was ~~price~~not inpaid ~~the~~off ~~last~~as 20of ~~trading~~June ~~days~~30, 2021. The Company is ~~required~~still tomaking ~~reserve~~the ~~three~~agreed ~~(6)~~upon ~~times~~interest ~~the~~payments ~~number~~ of ~~shares~~$4,167 ~~necessary~~per ~~for the~~month ~~issuance~~and ofthere ~~common~~are no ~~stock~~penalties ~~upon~~for ~~conversion.~~not ~~During~~paying the ~~three~~note ~~months~~off ~~ended~~by ~~March~~its 31maturity date. As of June 30, 2021, the ~~Company~~equivalent ~~issued~~number ~~2,292,012~~of common shares ~~for~~ ~~a value of $91,520, satisfying~~ the ~~balance~~Company ofwould ~~principal~~be ~~and~~required ~~accrued~~to ~~interest~~issue onto satisfy the Note is 250,000.

12Note 2 - On June 17, 2020, the Company received $85,000 in loan proceeds, which is net of $3,000 in debt issuance costs, pursuant to a loan agreement (“Second Convertible Note”), with a maturity date of June 17, 2021 and an interest rate of 8% per annum from the date of issuance until maturity date. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until the full amount is paid. Upon certain events of default, the Company would be obligated to pay cash equal to the greater of (i) 150% of the outstanding principal and interest, and (ii) the highest closing price of the Company’s common stock from the date of first default to the date of payment, multiplied by the number of shares that would be issued if the outstanding principal and interest were converted at 61% of the lowest closing price in the last 20 trading days prior to the date of payment. The holder may convert the note to common shares starting 180 days after the issuance date at a conversion price equal to 61% of the lowest trading price in the last 20 trading days. The Company is required to reserve three (6) times the number of shares necessary for the issuance of common stock upon conversion. During the six months ended June 30, 2021, the Company issued 2,292,012 common shares for a value of $91,520, satisfying the balance of principal and accrued interest on the Note.

Note 3 - On July 20, 2020, the Company received $40,000 in loan proceeds, which is net of $3,000 in debt issuance costs, pursuant to a ~~loan~~ loan agreement (“Third Convertible Note”), with a maturity date of July 20, 2021 and an interest rate of 8% per annum from the date of issuance until maturity date. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until the full amount is paid. Upon certain events of default, the Company would be obligated to pay cash equal to the greater of (i) 150% of the outstanding principal and interest, and (ii) the highest closing price of the Company’s common stock from the date of first default to the date of payment, multiplied by the number of shares that would be issued if the outstanding principal and interest were converted at 61% of the lowest closing price in the last 20 trading days prior to the date of payment. The holder may convert the note to common shares starting 180 days after the issuance date at a conversion price equal to 61% of the lowest trading price in the last 20 trading days. The Company is required to reserve three (6) times the number of shares necessary for the issuance of common stock upon conversion. During the ~~three~~six months ended ~~March~~June 3130, 2021, the Company issued 1,433,333 common shares for a value of $44,720, satisfying the balance of principal and accrued interest on the Note.

Note 4 – On November 18, 2020, the Company entered into a Secured Promissory Note (“Fourth Convertible Note”) with a third party, receiving $150,000 in loan proceeds. The Note matures on May 18, 2021 and accrues interest at 2% per month. The Noteholder may convert any portion of the debt into shares of common stock of the Company at $0.10 USD per share or 30% discount to the 5 day VWAP on the day of conversion. In addition to the monthly interest, the Company agreed to transfer 100,000 shares of common stock to the Noteholder. In the event that Company fails to make any payment of principal and/or interest within ten (10) calendar days of the due date for the same, then in addition to such payment due, the Company is obligated to pay a late payment charge to the Noteholder in the amount of five percent (5%) of the delinquent principal and/or interest payment. As of ~~March~~June 3130, 2021, the Company owed $150,000 in principal and $139,~~026~~559 in accrued interest on the note. As of ~~March~~June 3130, 2021, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 2,717,100.

Note 5 – On March 18, 2021, the Company received $75,000 in loan proceeds, which is net of $3,500 in debt issuance costs, pursuant to a loan agreement (“Fifth Convertible Note”), with a maturity date of March 18, 2022 and an interest rate of 8% per annum from the date of issuance until maturity date. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until the full amount is paid. Upon certain events of default, the Company would be obligated to pay cash equal to the greater of (i) 150% of the outstanding principal and interest, and (ii) the highest closing price of the Company’s common stock from the date of first default to the date of payment, multiplied by the number of shares that would be issued if the outstanding principal and interest were converted at 61% of the lowest closing price in the last 20 trading days prior to the date of payment. The holder may convert the note to common shares starting 180 days after the issuance date at a conversion price equal to 61% of the lowest trading price in the last 20 trading days. The Company is required to reserve three (6) times the number of shares necessary for the issuance of common stock upon conversion. As of March 31, 2021, the Company owed $78,500 in principal and $224 in accrued interest on the Note. As of March 31, 2021, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 2,150,928.14

Note 5 – On March 18, 2021, the Company received $75,000 in loan proceeds, which is net of $3,500 in debt issuance costs, pursuant to a loan agreement (“Fifth Convertible Note”), with a maturity date of March 18, 2022 and an interest rate of 8% per annum from the date of issuance until maturity date. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until the full amount is paid. Upon certain events of default, the Company would be obligated to pay cash equal to the greater of (i) 150% of the outstanding principal and interest, and (ii) the highest closing price of the Company’s common stock from the date of first default to the date of payment, multiplied by the number of shares that would be issued if the outstanding principal and interest were converted at 61% of the lowest closing price in the last 20 trading days prior to the date of payment. The holder may convert the note to common shares starting 180 days after the issuance date at a conversion price equal to 61% of the lowest trading price in the last 20 trading days. The Company is required to reserve three (6) times the number of shares necessary for the issuance of common stock upon conversion. As of June 30, 2021, the Company owed $78,500 in principal and $1585.75 in accrued interest on the Note. As of June 30, 2021, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 882,524.

Note 6 - On April 7, 2021, the Company received $70,000 in loan proceeds, which is net of $3,500 in debt issuance costs, pursuant to a loan agreement (“Sixth Convertible Note”), with a maturity date of April 7, 2022 and an interest rate of 8% per annum from the date of issuance until maturity date. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until the full amount is paid. Upon certain events of default, the Company would be obligated to pay cash equal to the greater of (i) 150% of the outstanding principal and interest, and (ii) the highest closing price of the Company’s common stock from the date of first default to the date of payment, multiplied by the number of shares that would be issued if the outstanding principal and interest were converted at 61% of the lowest closing price in the last 20 trading days prior to the date of payment. The holder may convert the note to common shares starting 180 days after the issuance date at a conversion price equal to 61% of the lowest trading price in the last 20 trading days. The Company is required to reserve three (6) times the number of shares necessary for the issuance of common stock upon conversion. As of June 30, 2021, the Company owed $73,500 in principal and $1,366 in accrued interest on the Note. As of June 30, 2021, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 876,646.

Note 7 - On April 8, 2021, the Company received $142,000 in loan proceeds, which is net of $7,500 in debt issuance costs, pursuant to a loan agreement (“Seventh Convertible Note”), with a maturity date of April 8, 2022 and an interest rate of 8% per annum from the date of issuance until maturity date. The holder may convert the note to common shares during the first six months after the issuance date at a conversion price equal to 65% of the lowest trading price in the last 15 trading days. The Company is required to reserve three (6) times the number of shares necessary for the issuance of common stock upon conversion. As of June 30, 2021, the Company owed $150,000 in principal and $427.96 in accrued interest on the Note. As of June 30, 2021, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 4,110,054.

Note 8 - On April 16, 2021, the Company received $118,750 in loan proceeds, which is net of $5,250 in debt issuance costs, pursuant to a loan agreement (“Eighth Convertible Note”), with a maturity date of April 16, 2022 and an interest rate of 8% per annum from the date of issuance until maturity date. The holder may convert the note to common shares during the first six months after the issuance date at a conversion price equal to 65% of the lowest trading price in the last 15 trading days. The Company is required to reserve three (6) times the number of shares necessary for the issuance of common stock upon conversion. As of June 30, 2021, the Company owed $125,000 in principal and $2071.55 in accrued interest on the Note. As of June 30, 2021, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 1,396,391.

Note 9 - On May 1, 2021, the Company received $55,000 in loan proceeds, which is net of $3,500 in debt issuance costs, pursuant to a loan agreement (“Ninth Convertible Note”), with a maturity date of May 1, 2022 and an interest rate of 8% per annum from the date of issuance until maturity date. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until the full amount is paid. Upon certain events of default, the Company would be obligated to pay cash equal to the greater of (i) 150% of the outstanding principal and interest, and (ii) the highest closing price of the Company’s common stock from the date of first default to the date of payment, multiplied by the number of shares that would be issued if the outstanding principal and interest were converted at 61% of the lowest closing price in the last 20 trading days prior to the date of payment. The holder may convert the note to common shares starting 180 days after the issuance date at a conversion price equal to 61% of the lowest trading price in the last 20 trading days. The Company is required to reserve three (6) times the number of shares necessary for the issuance of common stock upon conversion. As of June 30, 2021, the Company owed $78,500 in principal and $777.62 in accrued interest on the Note. As of June 30, 2021, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 697,045.

Note 10 - On May 11, 2021, the Company received $133,000 in loan proceeds, which is net of $7,000 in debt issuance costs, pursuant to a loan agreement (“Tenth Convertible Note”), with a maturity date of May 11, 2022 and an interest rate of 8% per annum from the date of issuance until maturity date. The holder may convert the note to common shares during the first six months after the issuance date at a conversion price equal to 65% of the lowest trading price in the last 15 trading days. The Company is required to reserve three (6) times the number of shares necessary for the issuance of common stock upon conversion. As of June 30, 2021, the Company owed $140,000 in principal and $1,542 in accrued interest on the Note. As of June 30, 2021, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 1,555,412.

Note 11 - On May 13, 2021, the Company received $166,250 in loan proceeds, which is net of $8,750 in debt issuance costs, pursuant to a loan agreement (“Eleventh Convertible Note”), with a maturity date of May 13, 2022 and an interest rate of 8% per annum from the date of issuance until maturity date. The holder may convert the note to common shares during the first six months after the issuance date at a conversion price equal to 65% of the lowest trading price in the last 15 trading days. The Company is required to reserve three (6) times the number of shares necessary for the issuance of common stock upon conversion. As of June 30, 2021, the Company owed $175,000 in principal and $1,851 in accrued interest on the Note. As of June 30, 2021, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 1,943,413.

Note 12 - On June 2, 2021, the Company received $50,000 in loan proceeds, which is net of $3,750 in debt issuance costs, pursuant to a loan agreement (“Twelfth Convertible Note”), with a maturity date of June 2, 2022 and an interest rate of 8% per annum from the date of issuance until maturity date. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until the full amount is paid. Upon certain events of default, the Company would be obligated to pay cash equal to the greater of (i) 150% of the outstanding principal and interest, and (ii) the highest closing price of the Company’s common stock from the date of first default to the date of payment, multiplied by the number of shares that would be issued if the outstanding principal and interest were converted at 61% of the lowest closing price in the last 20 trading days prior to the date of payment. The holder may convert the note to common shares starting 180 days after the issuance date at a conversion price equal to 61% of the lowest trading price in the last 20 trading days. The Company is required to reserve three (6) times the number of shares necessary for the issuance of common stock upon conversion. As of June 30, 2021, the Company owed $50,000 in principal and $331 in accrued interest on the Note. As of June 30, 2021, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 594,295.

Note 13 - On June 23, 2021, the Company received $118,750 in loan proceeds, which is net of $6,250 in debt issuance costs, pursuant to a loan agreement (“Thirteenth Convertible Note”), with a maturity date of June 23, 2022 and an interest rate of 8% per annum from the date of issuance until maturity date. The holder may convert the note to common shares during the first six months after the issuance date at a conversion price equal to 65% of the lowest trading price in the last 15 trading days. The Company is required to reserve three (6) times the number of shares necessary for the issuance of common stock upon conversion. As of June 30, 2021, the Company owed $125,000 in principal and $191 in accrued interest on the Note. As of June 30, 2021, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 1,375,735.

Note 14 - On June 23, 2021, the Company received $95,000 in loan proceeds, which is net of $5,000 in debt issuance costs, pursuant to a loan agreement (“Fourteenth Convertible Note”), with a maturity date of June 23, 2022 and an interest rate of 8% per annum from the date of issuance until maturity date. The holder may convert the note to common shares during the first six months after the issuance date at a conversion price equal to 65% of the lowest trading price in the last 15 trading days. The Company is required to reserve three (6) times the number of shares necessary for the issuance of common stock upon conversion. As of June 30, 2021, the Company owed $100,000 in principal and $154 in accrued interest on the Note. As of June 30, 2021, the equivalent number of common shares the Company would be required to issue to satisfy the Note is 1,100,588.

The Company is currently in default of the non-financial covenant relating to timely filing of periodic SEC reports.

Note 9 – Beneficial Conversion Feature

ASC 470-20 applies to convertible securities with beneficial conversion features that must be settled in stock and to those that give the issuer a choice in settling the obligation in either stock or cash. ASC 470-20 requires that the beneficial conversion feature should be valued at the commitment date at its intrinsic value; that being the difference between the conversion price and the fair market value of the common stock into which the security is convertible, multiplied by the number of shares into which the security is convertible. This amount is recorded as a debt discount and amortized over the life of the debt. ASC 470-20 further limits this amount to the proceeds allocated to the convertible instrument.

The effective conversion prices were compared to the market prices on the dates of each convertible note and they were deemed to be less than the inception date fair value of the underlying common stock for the Second Convertible Note. The Company recognized a debt discount as a reduction (contra-liability) to the Second and Fourth, and Fifth Convertible Notes with an increase to paid in capital. The debt discounts are being amortized over the life of the notes. The Company recognized financing costs for charges by the lender for original issue discounts and other applicable administrative costs, normally withheld from proceeds, which are being amortized as finance costs over the life of the loan. As of March 31, 2021 and December 31, 2020, the unamortized beneficial conversion feature associated with our convertible notes was $0 and $25,896, respectively.16

The effective conversion prices were compared to the market prices on the dates of each convertible note and they were deemed to be less than the inception date fair value of the underlying common stock for the Second Convertible Note. The Company recognized a debt discount as a reduction (contra-liability) to the Second and Fourth, and Fifth Convertible Notes with an increase to paid in capital. The debt discounts are being amortized over the life of the notes. The Company recognized financing costs for charges by the lender for original issue discounts and other applicable administrative costs, normally withheld from proceeds, which are being amortized as finance costs over the life of the loan. As of June 30, 2021 and December 31, 2020, the unamortized beneficial conversion feature associated with our convertible notes was $0 and $0, respectively.

During the first quarter of 2021, an active market developed for the Company’s stock. Accordingly, the Company began recording the conversion features of its convertible notes payable as embedded derivatives. As a result, the Company re-characterized the beneficial conversion feature recorded on Note 4 as a discount related to the derivative liability, resulting in a decrease to additional paid in capital in the amount of $150,000.

Note 10 - Derivatives

The Company assessed its convertible notes for purposes of determining the associated embedded default derivatives. The Company relied on ASC 820-10-35-37 Fair Value in Financial Instruments and ASC 815 Accounting for Derivative Instruments and Hedging Activities. The Company uses judgment in determining the fair value of derivative liabilities at the date of issuance and at every balance sheet thereafter and in determining which valuation method is most appropriate for the instrument, the expected volatility, the implied risk-free interest rate, as well as the expected dividend rate, if any.

During the ~~three~~six months ended ~~March~~ 31June 30, 2021, the Company had convertible notes payable outstanding in which the conversion rate was variable and undeterminable. The Company determined that the embedded conversion options met the definition of a derivative. The effective conversion price was compared to the market price on the date of the note and was deemed to be less than the market value of underlying common stock at the inception of the note. The Company recognized a debt discount on the notes as a reduction (contra-liability) to the Convertible Notes Payable. The debt discounts are being amortized over the life of the notes. The Company recognized financing costs for charges by the lender applicable administrative costs, normally withheld from proceeds, which are being amortized as finance costs over the life of the loan.

The Company evaluated the terms of the convertible notes in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Stock and determined that the underlying is indexed to the Company’s common stock. The Company determined that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability. The Company then evaluated the conversion feature for the embedded conversion option. Since these notes contain conversion price adjustment provisions (i.e. down round, true-up, or ratchet provisions), the Company determined that the embedded conversion options met the definition of a derivative. The Monte Carlo model was used to estimate the fair values of the embedded derivatives on the conversion features of our convertible notes. The values are based on simulating stock volatility, risk free interest rates, and the conversion stock prices on the date of measurement.

The Company is subject to significant cash penalties in the event that the Company defaults on its convertible notes. The default penalties vary based on the type of default and range from incurring a default interest rate of 22% to a penalty of 50% of the amount due, to a parity value based on the effective conversion of the note on the date of payment of the default and the maximum stock value during the period between the default date and the settlement date. The Company determined that certain of the default provisions should be bifurcated from the debt host and treated as a liability, since they involve the contingent payment of a substantial premium on the convertible notes. The Company used a Monte Carlo model that values the embedded default derivatives based on simulating the stock price, the default likelihood, and the default liability.

Fair Value

ASC 825-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 825-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 describes three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets or liabilities; Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3 – Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. The Company’s Level 3 liabilities consist of the derivative liabilities associated with the convertible notes. At ~~March~~June 3130, 2021, all of the Company’s derivative liabilities were categorized as Level 3 fair value liabilities. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

1417

Level 3 Valuation Techniques

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. Level 3 financial liabilities consist of the derivative liabilities for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. At the date of the original transaction, we valued the convertible note that contains down round provisions using a Black-Scholes model, with the assistance of a valuation consultant, for which management understands the methodologies. This model incorporates transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, as well as assumptions about future financings, volatility, and holder behavior. ASC 825-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 825-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 describes three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets or liabilities; Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3 – Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. The Company’s Level 3 liabilities consist of the derivative liabilities associated with the convertible notes. At December 31, 2020, all of the Company’s derivative liabilities were categorized as Level 3 fair value liabilities. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The following table summarizes the valuations of the default liability for each note and valuation date.

							Level 3
Note	Issue Date	Maturity Date	Initial Derivative Fair Value		Derivative Value at 12/31/2020		Change in Derivative Value			Derivative Value at 3/31/2021
Second Convertible Note	6/17/2020	6/17/2021		27,103		825,165		(825,165	)		—
Third Convertible Note	7/20/2020	7/20/2021		82,563		350,922		(350,922	)		—
Fourth Convertible Note	11/18/2020	5/18/2021		147,242		—		(33,233	)		114,009
Fifth Convertible Note	3/18/2021	3/18/2022		217,469		—		(66,534	)		150,935
Totals:			$	474,377	$	1,176,087	$	(1,275,854	)	$	264,944

			Level 3
Note	Issue Date	Maturity Date	Derivative Value at Issuance		Derivative Value at 12/31/2020		Change in Derivative Value			Derivative Value at 6/30/2021

Second Convertible Note	6/17/2020	6/17/2021		27,103		825,165		(825,165	)		-
Third Convertible Note	7/20/2020	7/20/2021		82,563		350,922		(350,922	)		-
Fourth Convertible Note	11/18/2020	5/18/2021		147,242		-		114,009			114,009
Fifth Convertible Note	3/18/2021	3/18/2022		217,469		-		(50,351	)		167,118
Sixth Convertible Note	4/7/2021	4/7/2022		190,166		-		24,343			214,509
Seventh Convertible Note	4/8/2021	4/8/2022		328,549		-		73,347			401,896
Eighth Cinvertable Note	4/16/2021	4/16/2022		288,933		-		36,935			325,868
Ninth Convertible Note	5/1/2021	5/1/2022		152,865		-		18,823			171,688
Tenth Convertible Note	5/11/2021	5/11/2022		340,229		-		34,652			374,881
Eleventh Convertible Note	5/13/2021	5/13/2022		427,280		-		26,354			453,634
Twelth Convertible Note	6/2/2021	6/2/2022		145,018		-		7,976			152,994
Thirteenth Convertible Note	6/23/2021	6/23/2022		321,641		-		(3,367	)		318,274
Fourteenth Convertible Note	6/23/2021	6/23/2022		250,475		-		8,054			258,529

Totals:			$	2,919,533	$	1,176,087	$	(885,312	)	$	2,953,400

Valuation of the default liability involves subjective judgments and requires forecasting future stock price movement and estimating the probability of default and the amount of time that passes between the date of default and the date of settlement. The following table summarizes the significant assumptions used to estimate the fair value of the default liability:

	At issuance	At 3/31/21
Default probability	5% to 30%	22% to 24%
Volatility	306.4% to 310.1%	328.5% to 340.7%
Risk free rate	1.62%	0.13% to 0.20%

	At issuance	At 6/30/21
Default probability	5% to 30%	22% to 24%
Volatility	306.4% to 348.8%	326.7% to 347.6%
Risk free rate	0.17% to 0.24%	0.20% to 0.23%

The Company used a Monte Carlo model that values the embedded default derivatives based on simulating the stock price, the default likelihood, and the default liability.

The following table sets forth a summary of the changes in the fair value of the company’s Level 3 derivative instruments:

Schedule of Change in Fair Value

Balance at December 31,2020	$	1,176,087
Issuance of convertible notes		364,711
Change in fair value		(1,275,854	)
Balance at March 31, 2021		264,944
Issuance of convertible notes		2,445,156
Change in fair value		243,300
Balance at June 30, 2021	$	2,953,400

During the six months ended June 30, 2021 the Company had a fair value of the level 3 derivative instruments of $2,953,400 compared to $1,176,087 at December 31, 2021. This is due to the addition of convertible notes during the six months ended June 30, 2021.

Note 11– Related Party Transactions

During the ~~three~~six months ended ~~March~~June 3130, 2021 and 2020, directors and members of management provided loans to the Company or paid for various ~~expenses~~ expenses of the Company. These loans contained no interest, term or due date. As of ~~March~~June 3130, 2021, these loans had a combined balance of $~~546~~498,~~159~~ 931 for the CEO, the President, and two other board members. Total additions to these loans during the ~~three~~six months ended ~~March 31~~June 30, 2021 were cash loan proceeds of $018,000 and deferred compensation of $67135,~~500~~000 transferred from accounts payable to related parties to related ~~party~~ party debt. As of ~~March~~June 3130, 2020, these loans had a combined balance of $~~529~~573,~~647~~659 for the CEO, the President, and two other board members. Total additions for the ~~three~~six months ended ~~March~~June 3130, 2020 were $76196,~~500~~100.

15As of June 30, 2021 and 2020, we also owed $14,203 and $50,635, respectively, to Carlsbad Naturals, LLC (included in accounts payable to related parties), which is a principal stockholder of New You, Inc. and is owned by a principal stockholder of New You, Inc., for inventory purchases. During six months ended June 30, 2021 and 2020, we made purchases of $88,767 and $53,896, respectively, from Carlsbad Naturals, LLC.

As of ~~March 31~~June 30, 2021 and 2020, we ~~also~~ owed $5827,~~135~~500 and $6627,~~325~~500, respectively, tofor ~~Carlsbad~~consulting ~~Naturals,~~payments ~~LLC (included in accounts payable~~ to ~~related parties), which is~~ a ~~principal~~relative ~~stockholder~~ of ~~New~~the ~~You, Inc~~CEO. and is owned by a principal stockholder of New You, Inc., for inventory purchases. During three months ended March 31, 2021 and 2020, we made purchases of $58,135 and $19,975, respectively, from Carlsbad Naturals, LLC.

AsDuring the year ended December 31, 2020, the Company received loan proceeds of ~~March~~$100,000 from a related party pursuant to a promissory note with 31a maturity date of April 7, ~~2021~~2020 and ~~2020~~interest of $5,000 weper ~~owed~~month. A total of $2782,500 ~~and~~has been repaid, including $2732,500, ~~respectively~~in interest and $50,000 ~~for~~in ~~consulting~~principal and interest payments toare anow ~~relative~~$2,500 per month. As of June 30, 2021 and 2020, the ~~CEO~~balance owed by the Company was $50,000 and $50,000, respectively.

During the year ended December 31, 2020, the Company received loan proceeds of $100,000 from a related party pursuant to a promissory note with a maturity date of April 7, 2020 and interest of $5,000 per month. A total of $75,000 has been repaid, including $25,000 in interest and $50,000 in principal and interest payments are now $2,500 per month. As of March 31, 2021 and 2020, the balance owed by the Company was $50,000 and $50,000, respectively.

The Company leases and pays for a warehouse facility where it shares space with Carlsbad Naturals, LLC. In exchange, Carlsbad Naturals, LLC leases and pays for an office facility where it shares space with the Company. As a result of this arrangement, the Company has recorded rent expense in the accompanying statements of operations for the lease that it is responsible for paying.

Note 12 – Subsequent Events

The ~~Company~~ Company has evaluated subsequent events through the date the financial statements were issued. There were no subsequent events as of the date the financial statements were issued.

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and supplementary data referred to in this Form 10-Q.

This discussion contains forward-looking statements that involve risks and uncertainties. Such statements, which include statements concerning revenue sources and concentration, selling, general and administrative expenses and capital resources, are subject to risks and uncertainties, including, but not limited to, those discussed elsewhere in this Form 10-Q that could cause actual results to differ materially from those projected. Unless otherwise expressly indicated, the information set forth in this Form 10-Q is as of June 30, 2021, and we undertake no duty to update this information.

New You, Inc.’s principal business is the marketing of unique and proprietary cannabidiol (“CBD”) products, which include CBD beverage enhancers that can be added to any beverage, CBD infused coffee, and CBD oil tinctures. The Company has five products:

☐

DROPS - 220 mgs of CBD – odorless, tasteless, flavorless and can be added to any beverage or liquid.

☐

CB2 & CBD 2 Plus - A Multi Spectrum Hemp-extracted CBD and Beta-Caryophyllene (β-Caryophyllene is the primary sesquiterpene contributing to the spiciness of black pepper; it is also a major constituent of cloves, hops, rosemary, copaiba, and cannabis), naturally blended coconut-derived MCT oil (made from a coconut fat called medium-chain triglyceride) and a hint of peppermint.

☐

Drops for Pets - This 50 mgs CBD product is designed to be used by pets.

☐

ENDO30 –

○

CAFFE CANNA - Caffe Canna is a rich organic CBD-infused non-GMO dark roast coffee

○

ABSORB – Made of a Japanese root and rice flour veggie capsule.

○

RELEASE - Made with organic Clove, Cascara Sagrada, Agave Inulin, Rhubarb Root Extract, Slippery Elm Bark, Aloe Vera and other herbs.

☐

Drops FX –Our proprietary blend of CBD and Vitamins B3, B6, B9 & B12, that you can use in any drink or liquid.

☐

Drops FX Sleep –A blend of CBD, GABA (Gamma-amino butyric acid is an amino acid in the body that acts as a neurotransmitter in the central nervous system), Melatonin, Valerian Root.

☐

NanoX – A water soluble, Full Spectrum DBD made with Purified Water, NanoX™ Liposomal Hemp Complex (Hemp Extracts, Purified Water, Gum Acacia, MCT Oil (from Coconut)), Colloidal Silver (20ppm), Liposomal Methyl B12, Liposomal CoQ10, Liposomal Curcumin, Stevia Leaf Extract.

●

The Cream – A topical skin cream made with Cannabidiol (1,000 mg of whole plant CBD isolate per 60 mL), Purified Water (Aqua), Glyceryl Stearate SE, Cannabis Sativa (Hemp) Seed Oil, Cocos Nucifera (Coconut) Oil, Ethyl Macadamiate, Stearic Acid, Cetearyl Alcohol, Pentylene Glycol, Oryza Sativa (Rice) Bran Extract, Tocopherol, Eucalyptus Globulus Leaf Oil, Origanum majorana, Potassium Hydroxide, Hydroxypropyl Starch Phosphate, Phenoxyethanol, Caprylyl Glycol, Tetra- sodium Glutamate Diacetate, Pentanediol.

New You, Inc. through its wholly owned subsidiary, New You LLC, markets and sells its products through a multi-level marketing and direct sales opportunity afforded to independent business owners called “Brand Partners.” Commissions are earned on product sales to Brand Partners and their customers at a rate of 10% for every transaction, plus a specified spread on recurring sales. Brand Partners earn a 5% commission on sales by other team members at lower levels up to nine levels below the Brand Partner. Brand Partners can earn an additional bonus for customer sales and team sales. The team bonus is $400 for each time the team bonus volume reaches a certain amount in a 30 day period. Brand Partners can also earn an initial bonus of 20% of the transaction value for qualifying Brand Partners in the Brand Partner’s first 30 days. There is a risk that Brand Partners may find it difficult to sell in a network marketing environment. Brand Partners may also find it difficult to sell CBD related products due to the uncertainty surrounding FDA regulations of CBD and hemp related products. Lastly, public perception of CBD products may be negative, as such products are derived from the Hemp plant. The Company does not hold any patents or trademarks and, as a result, may be vulnerable to competition from other companies offering very similar products and product brands The Company purchases inventory from Carlsbad Naturals, LLC. Carlsbad Naturals, LLC is a principal shareholder of New You, Inc., and is owned by a principal shareholder of New You, Inc. As a result, we are dependent on a related party for product inventory and do not have a broad base of unaffiliated suppliers. The officers and directors of the Company own 34.27% of the outstanding common shares. Accordingly, management will have a determinative influence on matters requiring shareholder approval.

On May 3, 2021, we entered into an Exchange Agreement with ST Brands, Inc. (STB), a Wyoming corporation, and the shareholders of STB. Under the Agreement, the Company acquired all of the issued and outstanding common stock of STB in exchange for our issuance to the Shareholders of STB, shares of our newly-designated Series A Preferred Stock. The class of Series A Preferred Stock consists of 4,500,000 shares of preferred stock convertible to our common stock at a ratio of 100 for 1. As a whole, all designated shares of Series A Preferred are convertible to approximately the cumulative equivalent of ninety percent (90%) of our issued and outstanding share capital as of May 3, 2021. The Agreement contemplates that the Company’s existing business and assets of the Company will remain and continue under the Company’s ownership following the closing of the Closing.

Shares of Series A Preferred Stock shall be issuable to the Shareholders under the Agreement upon each of several contemplated Closings, each Closing to take place upon our receipt of audited financial statements reflecting certain levels of annual revenue earned by STB and/or Acquired Material Businesses, as defined in the Exchange Agreement and as described in Exhibit B in the Agreement. Up to 4,500,000 shares of Series A Preferred Stock may be issued to the Shareholders, with all Closings to occur on or before April 30, 2022. Under the Initial Closing on the date of the Agreement, we issued 500,000 shares of Series A Preferred Stock to the Shareholders of STB. The issuance was exempt under Section 4(a)(2) of the Securities Act as the transaction did not involve a public offering.

On May 6, 2021, pursuant to the terms of the Agreement, the Board of Directors (the “Board”) of the Company appointed Jason Frankovich to serve as the new Executive Chairman of the Board.

Voting Rights: Each share of Series A shall vote on an as-converted basis with the common stock or other equity securities, resulting in 100 votes per one share of Series A Preferred Stock.

On May 5, 2021, the Company issued 2,414,890 common shares to its Chief Executive Officer in exchange for the extinguishment of his shareholder loan owed to him by the Company. The shares were valued at fair market value on the date of grant.

On May 5, 2021, the Company issued 2,921,690 common shares to a related party and shareholder in exchange for the extinguishment of his shareholder loan owed to him by the Company. The shares were valued at fair market value on the date of grant.

On May 5, 2021, the Company issued 1,200,000 shares to a related party in consideration of interest owed by the Company on a related Note Payable. The shares were valued at fair market value on the date of grant.

On May 5, 2021, the Company issued 100,000 shares to a consultant as a bonus for services provided to the Company. The shares were valued at fair market value on the date of grant.

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

This discussion contains forward-looking statements that involve risks and uncertainties. Such statements, which include statements concerning revenue sources and concentration, selling, general and administrative expenses and capital resources, are subject to risks and uncertainties, including, but not limited to, those discussed elsewhere in this Form 10-Q that could cause actual results to differ materially from those projected. Unless otherwise expressly indicated, the information set forth in this Form 10-Q is as of March 31, 2021, and we undertake no duty to update this information.

· DROPS - 220 mgs of CBD – odorless, tasteless, flavorless and can be added to any beverage or liquid.

· CB2 & CBD 2 Plus - A Multi Spectrum Hemp-extracted CBD and Beta-Caryophyllene (β-Caryophyllene is the primary sesquiterpene contributing to the spiciness of black pepper; it is also a major constituent of cloves, hops, rosemary, copaiba, and cannabis), naturally blended coconut-derived MCT oil (made from a coconut fat called medium-chain triglyceride) and a hint of peppermint.

· Drops for Pets - This 50 mgs CBD product is designed to be used by pets.

· ENDO30 –

o CAFFE CANNA - Caffe Canna is a rich organic CBD-infused non-GMO dark roast coffee

o ABSORB – Made of a Japanese root and rice flour veggie capsule.

o RELEASE - Made with organic Clove, Cascara Sagrada, Agave Inulin, Rhubarb Root Extract, Slippery Elm Bark, Aloe Vera and other herbs.

· Drops FX –Our proprietary blend of CBD and Vitamins B3, B6, B9 & B12, that you can use in any drink or liquid.

· Drops FX Sleep –A blend of CBD, GABA (Gamma-amino butyric acid is an amino acid in the body that acts as a neurotransmitter in the central nervous system), Melatonin, Valerian Root.

· NanoX – A water soluble, Full Spectrum DBD made with Purified Water, NanoX™ Liposomal Hemp Complex (Hemp Extracts, Purified Water, Gum Acacia, MCT Oil (from Coconut)), Colloidal Silver (20ppm), Liposomal Methyl B12, Liposomal CoQ10, Liposomal Curcumin, Stevia Leaf Extract.

· The Cream – A topical skin cream made with Cannabidiol (1,000 mg of whole plant CBD isolate per 60 mL), Purified Water (Aqua), Glyceryl Stearate SE, Cannabis Sativa (Hemp) Seed Oil, Cocos Nucifera (Coconut) Oil, Ethyl Macadamiate, Stearic Acid, Cetearyl Alcohol, Pentylene Glycol, Oryza Sativa (Rice) Bran Extract, Tocopherol, Eucalyptus Globulus Leaf Oil, Origanum majorana, Potassium Hydroxide, Hydroxypropyl Starch Phosphate, Phenoxyethanol, Caprylyl Glycol, Tetra- sodium Glutamate Diacetate, Pentanediol

Risks and Uncertainties

Results of Operations

Revenues. For the three months ended ~~March~~June 3130, 2021, we generated revenues of $~~333~~302,~~653~~936, a decrease of $~~197~~241,~~869~~664 compared to revenues of $~~531~~544,~~522~~600 for the three months ending ~~March~~June 3130, 2020. ~~The~~Comparing the six months ended June 30, 2021 to June 30, 2020, total revenue decreased $439,534 with a revenue of $636,589 for the six months ended June 30, 2021 compared to $1,076,123 for the six months ended June 30, 2020. The decrease was primarily due to not yet recovering from the COVID-19 shutdown. At this stage in our development, revenues are not yet sufficient to cover ongoing operating expenses.

Gross Profit. Our gross profit for the three months ended ~~March~~June 3130, 2021 was $~~274~~283,~~403~~298, a decrease of $~~175~~211,~~277~~295 compared to the three months ended ~~March 31~~June 30, 2020. Our gross margin percentage for the three months ended ~~March~~June 3130, 2021 was 8294%, compared to 8591% for the three months ended ~~March 31~~June 30, 2020. The change in gross margin in the three months ended ~~March~~June 3130, 2021 compared to the three months ended ~~March~~June 3130, 2020 was due to ~~decreased~~increased sales of higher margin items during the period. Comparing the six months ended June 30, 2021 to June 30, 2020, gross profit decreased $386,573 with a gross profit of $557,701 during the six months ended June 30, 2021 compared to $944,274 for the six months ended June 30, 2020. Our gross margin percentage for the six months ended June 30, 2021 was 88%, compared to 88% for the six months ended June 30, 2020. There was no change in overall margin for the period ending June 30, 2021 compared to June 30, 2020.

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses (“SG&A expenses”) for the three months ended ~~March~~June 3130, 2021 were $29,~~173~~067,~~333~~999, an increase of $~~791~~7,~~650~~909,151 compared to the three months ended ~~March~~June 3130, 2020. For the three months ended ~~March~~June 3130, 2021, the SG&A expenses included: (i) a reduction in commission expenses; (ii) a reduction in payroll expenses; ~~and~~ (iii) incremental expenses resulting from the ST Brands merger; (iiii) and an decrease in other SG&A expenses. Including ~~Non~~non-cash stock based compensation for the three months ended ~~March~~June 3130, 2021 ~~was~~ of $110,~~801~~000,~~619,~~ compared to $~~764~~695,~~916~~660 in stock based compensation for the three months ~~March~~June 3130, 2020; and (iv) an increase in goodwill impairment of $8,138,045. In Comparing the six months ended June 30, 2021 to June 30, 2020, SG&A expenses were $11,241,331 compared to$2,540,530, an increase of $8,700,801. The main cause of the increase was the non-cash stock based compensation expensed during the six months ended June 30, 2021 of $1,811,619 and the merger of ST Brands with a goodwill impairment of $8,138,045.

	For the three months ended		For the three months ended		For the six months ended		For the six months ended
	June 30,		June 30,		June 30,		June 30,
	2021		2020		2021		2020
Staff and Overhead Expenses		687,482		284,259		889,366		688,857
Accounting/Legal		152,567		16,975		239,274		81,453
Commission Expense		79,906		161,954		163,028		309,644
Goodwill Imparment		8,138,045		-		8,138,045		-
Non-Cash Stock Based Compensation		10,000		695,660		1,811,619		1,460,576
		9,067,999		1,158,848		11,241,331		2,540,530

		For the three months ended		For the three months ended
		March 31,		March 31,
		2021		2020
Staff and Overhead Expenses	$	271,616	$	434,203
Accounting/Legal		16,975		34,875
Commission Expense		83,122		147,689
Non-Cash Stock Based Compensation		1,801,619		764,916
	$	2,173,333	$	1,381,683

Operating Loss. We realized an operating loss of $18,~~898~~784,~~930~~702 before interest and income taxes for the three months ended ~~March~~June 3130, 2021 compared to operating loss of $~~932~~664,~~003~~255 for the three months ended ~~March~~June 3130, 2020. When comparing the six months ending June 30, 2021 to 2020, we realized an operating loss of $10,683,631 compared to $1,596,256 mainly due to expensing the remaining amount of Stock Based Compensation and impairing the goodwill relating to the ST Brand acquisition.

Interest Expense. Interest expenses for the three months ended ~~March~~June 3130, 2021 was $~~253~~1,~~624~~863,119 compared to $31491,~~933~~400 for the three months ended ~~March~~ June 31, 2020. The increase is a reflection of the addition of financing in the current period ~~versus~~verses the prior period ending ~~March~~June 3130, 2020. Interest expenses for the six months ended June 30, 2021 were $2,116,743 compared to $523,333 for the six months ended June 30, 2020. The increase is a reflection of the addition of financing in the current period verses the prior period ending June 30, 2020.

Net Loss. We incurred a net loss of $~~877~~10,~~500~~891,121 for the three months ended ~~March~~June 3130, 2021 compared to net loss of $~~964~~1,~~736~~155,655 for the three months ended ~~March~~ 31June 30, 2020. The primary reason for the ~~decrease~~increase in net loss is due to an increase in ~~operating~~interest ~~loss~~expense byfrom ~~$966,927~~the addition of financing and animpairing ~~increase~~the ~~in interest~~goodwill ~~expense~~relating byto the ST Brand acquisition. The company incurred a net loss of $~~221~~11,~~691~~768,620 ~~offset~~for bythe six months ended June 30, 2021 compared to a ~~gain~~net ~~from~~loss of $2,120,389 for the ~~change~~six inmonths ended June 30, 2020. The primary reason for the ~~fair~~increase ~~value~~in ofnet ~~derivatives~~loss byis due to an increases in interest expenses in the amount of $1,~~275~~593,~~854.~~410 and impairing the goodwill relating to the ST Brand acquisition. Management will continue to make an effort to lower operating expenses and increase revenue.

Liquidity and Capital Resources

We incurred a net loss for the ~~three~~six months ended ~~March~~June 3130, 2021 and had an accumulated deficit of $818,~~044~~935,~~515~~635 at ~~March~~June 3130, 2021. At ~~March~~June 3130, 2021, we we had a cash balance of $1914,~~196~~577, compared to a cash balance of $45,102 at December 31, 2020. At ~~March~~June 3130, 2021, we had a working capital deficit of $113,~~647~~899,~~715~~734, compared to a working capital deficit of $2,460,718 at December 31, 2020. The Company’s existing and available capital resources are not expected to be sufficient to satisfy our funding requirements through one year from the date of this filing in the absence of share issuances or other sources of financing.

We have not been able to generate sufficient cash from operating activities to fund our ongoing operations. Since our inception, we have raised capital through private sales of preferred stock, common stock, and debt securities.

We will be required to raise additional funds through public or private financing, additional collaborative relationships or other arrangements until we are able to raise revenues to a point of positive cash flow. We are evaluating various options to further reduce our cash requirements to operate at a reduced rate, as well as options to raise additional funds, including obtaining loans and selling common stock. There is no guarantee that we will be able to generate enough revenue and/or raise capital to support its operations.

Based on the above factors, substantial doubt exists about our ability to continue as a going concern for one year from the issuance of these financial statements.

The issuance of additional securities may result in a significant dilution in the equity interests of our current stockholders. Obtaining loans, assuming these loans would be available, will increase our liabilities and future cash commitments. There is no assurance that we will be able to obtain further funds required for our continued operations or that additional financing will be available for use when needed or, if available, that it can be obtained on commercially reasonable terms.

The effect of existing or probable government regulations on our business is not known at this time. Due to the nature of our business, it is anticipated that there may be increasing government regulation that may cause us to have to take serious corrective actions or make changes to the business plan.

Cash Flow

The following table summarizes our cash flows for the periods indicated below:

	For the six Months Ended			For the Six Months Ended
	June 30,			June 31,
	2020			2019
Cash used in (provided by) operating activities		(718,131	)		(114,458	)
Cash provided by (used in) investing activities		(457,500	)		-
Cash provided by (used in) financing activities		1,145,106			114,458

Summary	For the Three Months Ended March 31, 2021			For the Three Months Ended March 31, 2020
Cash provided by operating activities	$	(30,906	)	$	(190,000	)
Cash used in investing activities	$	(25,000	)	$	—
Cash provided by financing activities	$	30,000		$	190,000

Cash Used in Operating Activities

During the ~~three~~ six months ended ~~March~~June 3130, 2021 cash used in operating activities of $30718,~~906~~131 primarily reflected our net losses for the period, adjusted by non-cash charges such as depreciation and stock-based compensation, accretion of debt discounts, changes in the fair value of derivative liabilities, ~~as well as changes in our working capital accounts, primarily consisting of a decrease in inventory,~~ and anadditional ~~increase~~goodwill ~~in accounts payable, an increase in credit card receivables and an increase in receivables due from a related party~~impairment.

~~During the three~~Cash ~~months~~Used ~~ended March 31, 2020 cash used in operating activities of $190,000 primarily reflected our net losses for the period, adjusted~~ by ~~non-cash~~Investing charges such as depreciation, amortization, and stock based compensation, as well as changes in our working capital accounts, primarily consisting of a decrease in inventory, a decrease in credit card receivables, an increase in prepaid expenses, and a decrease in accounts payable. Activities

~~Cash~~During the ~~Used~~six months ended June 30, 2021, cash used in investing activities was $457,500, which consisted of the purchase of investments and property and equipment from the merger of ST Brands. During the six months ended June 30, 2020 there was no cash used in ~~Investing~~investing ~~Activities~~activities.

During the three months ended March 31, 2021 and 2020, cash used in investing activities was $25,000, which consisted of loan proceeds provided to a third party.

Cash Provided by Financing Activities

During the ~~three~~ six months ended ~~March~~June 3130, 2021, cash provided by financing activities was $301,~~000~~145,106, which consisted of proceeds from a convertible notes ~~note~~ payable received inthroughout ~~March~~the second quarter of 2021 offset by repayment of related party debt and debt added from the merger of ST Brands.

During the three months ended March 31, 2020, cash provided by financing activities was $190,000, which consisted primarily of proceeds from related party debt and proceeds from a loan from an unrelated party received in January 2020.

Recent Accounting Pronouncements

None.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

As of ~~March~~June 3130, 2021, the end of the period covered by this Quarterly Report on Form 10-Q, our management, with the participation of our Chief Executive Officer and Chief Accounting Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report. Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) ~~under~~ under the Securities Exchange Act of 1934, as amended) are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods ~~specified~~ specified in the SEC’s rules and forms and (ii) accumulated and communicated to the company’s management, including its principal ~~executive~~ executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based on the ~~evaluation~~ evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Accounting Officer concluded that our disclosure ~~controls~~ controls and procedures were not effective as of the end of the period covered by this quarterly report at the reasonable assurance level.

Material Weakness in Internal Control over Financial Reporting

☐ The Company lacks an effective control environment since there are insufficient personnel to exercise appropriate oversight of accounting judgments and estimates.

~~ Due to limited accounting and financial reporting resources, the Company lacks formal processes to identify, update, and assess risks to the Company’s financial reporting.~~24

☐ Due to limited accounting and financial reporting resources, the Company ~~has~~lacks ~~not~~formal ~~implemented~~processes ~~significant~~to ~~monitoring~~identify, ~~controls~~update, and assess risks to the Company’s financial reporting.

☐ Due to limited accounting and financial reporting resources, ~~authorization, approval, and review controls over~~ the Company's ~~financial~~has ~~statements and accounting records have~~ not ~~been~~ implemented orsignificant ~~have~~monitoring ~~not been applied consistently. This includes~~ controls ~~over the identification, approval, and disclosure of related party transactions~~. In certain cases, formal documentation does not exist regarding the design of controls, evidence of implementation of controls, or evidence of occurrence of certain transactions. In addition, certain of the Company’s processes lack segregation of duties.

☐

Due to limited accounting and financial reporting resources, authorization, approval, and review controls over the Company’s financial statements and accounting records have not been implemented or have not been applied consistently. This includes controls over the identification, approval, and disclosure of related party transactions. In certain cases, formal documentation does not exist regarding the design of controls, evidence of implementation of controls, or evidence of occurrence of certain transactions. In addition, certain of the Company’s processes lack segregation of duties.

Changes in Internal Control over Financial Reporting

Other than with respect to the remediation efforts discussed below, there was no change in our internal control over financial reporting that occurred during the fourth quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Remediation of Previous Material Weaknesses

We have implemented and will continue to implement a number of measures to address the Material Weaknesses identified as of ~~March~~June 3130, 2021. We plan on updating internal policies and procedures and create an effective control environment, add outside consultants as needed to bolster technical accounting needs, and add more personnel as needed to segregate duties.

Limitations on Effectiveness of Controls and Procedures

Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving the desired control objectives. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.

PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

None.

ITEM 1A.

RISK FACTORS

Not applicable to smaller reporting companies.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.

OTHER INFORMATION

None.

ITEM 6.

EXHIBITS

The following exhibits are included as part of this report:

31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	Certification of Chief Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	Certification of Chief Executive Officer and Chief Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS	XBRL Instance Document(1)

101.SCH	XBRL Taxonomy Extension Schema Document(1)

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document(1)

101.LAB	XBRL Taxonomy Extension Label Linkbase Document(1)

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document(1)

101.DEF	XBRL Taxonomy Extension Definition Linkbase Definition(1)

~~(1) To be filed by amendment.~~26

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: September ~~May 24~~16, 2021

NEW YOU, INC. By: /S/ Ray Grimm, Jr. Ray Grimm, Jr. Chief Executive Officer (Principal Executive Officer) By: /S/ ~~James~~John ~~Sinkes~~Driscoll ~~James~~John ~~Sinkes~~Driscoll Chief ~~Accounting~~Financial Officer (Principal Financial Officer)

2327

Filing Compare · REIC Holdings, Inc.