UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED ~~AUGUST~~FEBRUARY 3128, ~~2020~~2021

Commission file number 000-53707

TRIDENT BRANDS INCORPORATED

(Exact name of registrant as specified in its charter)

Nevada

(State or other jurisdiction of incorporation or organization)

200 South Executive Drive, Suite 101

Brookfield, WI 53005

(Address of principal executive offices, including zip code.)

(262) 789-6689

(Telephone number, including area code)

Resident Agents of Nevada

711 S. Carson Street, Suite 4

Carson City, NV 89701

(Name and Address of Agent for Service)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. YES ☒ NO ☐

Indicate by check mark whether the 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ☒ NO ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
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 ☐ NO ☒

The number of the registrant’s common shares outstanding as of ~~October~~April 2019, ~~2020~~2021 was 32,311,887.

TRIDENT BRANDS INCORORATED

FORM 10-Q

For the quarterly period ended ~~August~~February 3128, ~~2020~~2021

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	6	6
	Consolidated Balance Sheets as at August 31, 2020 and November 30, 2019		6
	Consolidated Balance Sheets as at February 28, 2021 and November 30, 2020	6
	Consolidated Statements of Operations for the three and nine months ended August 31, 2020 and August 31, 2019		7
	Consolidated Statements of Operations for the three months ended February 28, 2021 and February 29, 2020	7
	Consolidated Statements of Changes in Stockholders’ Deficit for the nine months ended August 31, 2020 and August 31, 2019		8
	Consolidated Statements of Changes in Stockholders’ Deficit for the three months ended February 28, 2021 and February 29, 2020	8
	Consolidated Statements of Cash Flows for the nine months ended August 31, 2020 and August 31, 2019		9
	Consolidated Statements of Cash Flows for the three months ended February 28, 2021 and February 29, 2020	9
	Notes to Consolidated Financial Statements	10	10
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16	14
Item 3	Quantitative and Qualitative Disclosures about Market Risk	20	23
Item 4	Controls and Procedures	20	23
PART II	OTHER INFORMATION
Item 1	Legal Proceedings		24
Item 6	Exhibits	21
Item 6	Exhibits		25

2 Table of Contents

Basis of Presentation

Except where the context otherwise requires, all references in this Quarterly Report on Form 10-Q (“Form 10-Q”) to the “Company”, “we”, “us”, “our”, “Trident” and “Trident Brands” or similar words and phrases are to Trident Brands Incorporated and its subsidiaries, taken together.

In this report, all currency amounts are expressed in thousands of United States (“U.S.”) dollars (“$”), except per share data, unless otherwise stated. Amounts expressed in other than U.S. dollars are noted accordingly. For example, amounts if expressed in Canadian dollars are expressed in thousands of Canadian dollars and preceded by the symbol “Cdn $”.

Forward-Looking Statements

This Form 10-Q contains forward-looking statements which are based on our current expectations and assumptions and involve a number of risks and uncertainties. Generally, forward-looking statements do not relate strictly to historical or current facts and are typically accompanied by words such as “anticipate”, “estimate”, “intend”, “project”, “potential”, “continue”, “believe”, “expect”, “could”, “would”, “should”, “might”, “plan”, “will”, “may”, “predict”, the negatives of such terms, and words and phrases of similar impact and include, but are not limited to references to expected increases in revenues and margins, ~~expected capital raising activities,~~ growth opportunities, the success of new product launches and line extensions, our ability to finance our business, potential strategic investments, business strategies, competitive strengths, goals, references to key markets where we operate and the market for our securities. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on certain assumptions and analyses we make in light of our experience and our interpretation of current conditions, historical trends and expected future developments, as well as other factors that we believe are appropriate in the circumstance.

Whether actual results and developments will agree with our expectations and predictions is subject to many risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results to differ materially from our expectations and predictions. We believe these factors include, but are not limited to, the following:

● we have a limited operating history with significant losses and expect losses to continue for the foreseeable future; ● we have an urgent need for additional capital to fund our business operations and if we ~~are~~ae unable to secure needed capital, there will be a material adverse effect on our business and financial condition; ● we could face intense competition, which could result in lower revenues and higher expenditures and could adversely affect our results of operations; ● we are governed by only three persons serving as directors and officers which may lead to faulty corporate governance; ● we must attract and maintain key personnel or our business may fail; ● we may not be able to secure additional financing to meet our future capital needs due to changes in ~~our business and~~ general economic conditions; ● our business and operating results could be harmed if we fail to manage our growth or change; ● we have a limited operating history and if we are not successful in growing our business, then we may have to scale back or even cease our ongoing business operations; ● if our intellectual property is not adequately protected, then we may not be able to compete effectively and we may not be profitable; ● if we are the subject of an intellectual property infringement claim, the cost of participating in any litigation could impact our ability to stay in business; ● we could lose our competitive advantages if we are not able to protect any of our food and nutritional products and intellectual property rights against infringement, and any related litigation could be time-consuming and costly;

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● if we fail to effectively manage our growth our future business results could be harmed and our managerial and operational resources may be strained; ● our services may become obsolete and unmarketable if we are unable to respond adequately to rapidly changing technology and customer demands; ● our failure to appropriately respond to changing consumer preferences and demand for new products or product enhancements could significantly harm product sales and harm our financial condition and operating results; ● if we do not introduce new products or make enhancements to adequately meet the changing needs of our customers, some of our products could fail in the marketplace, which could negatively impact our revenues, financial condition and operating results; ● we are affected by laws and governmental regulations with potential penalties or claims, which could harm our financial condition and operating results; ● since we rely on independent third parties for the manufacture and supply of certain of our products, if these third parties fail to reliably supply products to us at required levels of quality and which are manufactured in compliance with applicable laws, then our financial condition and operating results would be harmed; ● we may incur material product liability claims, which could increase our costs and harm our financial condition and operating results; ● unless we can generate sufficient cash from operations or raise additional funds ~~in the near term~~, we may not be able to meet our debt obligations ~~or continue as a going concern~~; ● our customers generally are not obligated to continue purchasing products from us; ● if we do not manage our supply chain effectively, our operating results may be adversely affected; ● our stock price may be volatile, which may result in losses to our shareholders; ● our common shares are thinly traded and our shareholders may be unable to sell at or near ask prices, or at all; ● the market price for our common stock is particularly volatile given our status as a relatively small and developing company, which could lead to wide fluctuations in our share price. Our shareholders may be unable to sell your common stock at or above their purchase price if at all, which may result in substantial losses; ● we do not anticipate paying any cash dividends to our common shareholders and as a result shareholders may only realize a return when the shares are sold; ● we are listed on the OTCQB quotation system and our common stock is subject to “penny stock” rules which could negatively impact our liquidity and our shareholders’ ability to sell their shares; ● volatility in our common share price may subject us to securities litigation; ● the elimination of monetary liability against our directors, officers and employees under Nevada law and the existence of indemnification rights of our directors, officers and employees may result in substantial expenditures by our company and may discourage lawsuits against our directors, officers and employees; ● our business is subject to changing regulations related to corporate governance and public disclosure that have increased both our costs and the risk of noncompliance; and ● The recent coronavirus outbreak could have an adverse effect on our business. Concerns are rapidly growing about the global outbreak of a novel strain of coronavirus (COVID-19). The virus has spread rapidly across the globe, including the U.S. The pandemic is having an unprecedented impact on the U.S. economy as federal, state and local governments react to this public health crisis, which has created significant uncertainties. These uncertainties include, but are not limited to, the potential adverse effect of the pandemic on the economy, our customers and supply chain. As the pandemic continues to grow, consumer fear about becoming ill with the virus and recommendations and/or mandates from federal, state and local authorities to avoid large gatherings of people or self-quarantine may continue. The extent of the impact of the pandemic on our business and financial results will depend largely on future developments, including the duration of the spread of the outbreak within the U.S., the impact on capital and financial markets and the related impact on consumer confidence and spending, all of which are highly uncertain and cannot be predicted. This situation is changing rapidly, and additional impacts may arise that we are not aware of currently.

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Consequently all forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that our actual results or the developments we anticipate will be realized. The foregoing factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report.

Corporate Legal Structure and Related Matters

Trident Brands Incorporated has ~~five~~four legal subsidiaries, as detailed below.

Trident Sports Nutrition Inc. is 100% owned by Trident Brands and is organized to deliver shelf ready product solutions in the active nutrition and dietary supplement segment to leading retailers for private label and control brand programs.

Brain Armor Inc. is 94.8% owned by Trident Brands and is organized to develop, market and sell a portfolio of DHA supplements under the Brain Armor® brand targeted at the cognitive health and performance segment.

~~Sports~~Trident ~~Nutrition~~Health ~~Products Inc.~~ is 100% owned by Trident Brands and is currently inactive.

Trident Brands Canada Ltd. is 100% owned by Trident Brands Incorporated and holds various banking facilities, and licenses associated with the manufacturing, importation and sale of natural health and nutrition products in Canada.

Trident Brands International Ltd. is 100% owned by Trident Brands and was organized to handle the company’s international operations and sub-license trademarks and/or products in international markets.

The Company’s administrative office is located at 200 South Executive Drive, Suite 101, Brookfield, Wisconsin, 53005 and its fiscal year end is November 30th.

The Company has authorized capital of 300,000,000 common shares with a par value of $0.001 per share. 32,311,887 common shares were issued and outstanding as of ~~August~~February 3128, ~~2020~~2021 and 32,311,887 as of ~~October~~April 2019, ~~2020~~2021.

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ITEM 1. FINANCIAL STATEMENTS

The unaudited financial statements for the quarter ended ~~August~~February 3128, ~~2020~~2021 immediately follow.

TRIDENT BRANDS INCORPORATED

Consolidated Balance Sheets

	As of August 31, 2020			As of November 30, 2019
	(unaudited)
ASSETS
Current Assets
Cash and Cash Equivalents	$	82,658		$	1,013,674
Accounts Receivable, net of allowance of $75,404 and $55,979 respectively		264,137			280,347
Inventory		1,572,699			2,082,826
Prepaid expenses and other current assets		218,994			168,327
Total Current Assets		2,138,488			3,545,174
Fixed Assets-Furniture & Fixtures, net		-			4,413
Intangible Assets, net		400,000			400,000
TOTAL ASSETS	$	2,538,488		$	3,949,587
LIABILITIES & STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts Payable	$	425,765		$	443,247
Accrued Liabilities		6,157,319			3,605,175
Derivative Liability		30,421,358			5,825,480
Convertible Debt, net of discount $0 and $334,988, respectively		12,300,000			11,965,012
Total Current Liabilities		49,304,442			21,838,914
PPP Loan Payable		135,165			-
Convertible Debt, net of discount $1,363,876 and $3,352,894, respectively		8,636,124			6,647,106
Total Liabilities		58,075,731			28,486,020
Stockholders’ Deficit
Common stock, $0.001 par value, 300,000,000 shares authorized; 32,311,887 shares issued and outstanding as of August 31, 2020 and November 30, 2019		32,312			32,312
Additional paid-in capital		5,964,268			9,945,488
Non-Controlling Interest in Subsidiary		(359,157	)		(288,603	)
Accumulated Deficit		(61,174,666	)		(34,225,630	)
Total Stockholders’ Deficit		(55,537,243	)		(24,536,433	)
TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT	$	2,538,488		$	3,949,587

(Unaudited)

	As of			As of
	February 28,			November 30,
	2021			2020

ASSETS

Current Assets
Cash and Cash Equivalents	$	48,932		$	88,007
Accounts Receivable, net of allowance of $157,526 and $155,186 respectively		78,394			63,784
Inventory, net of reserves of $195,264 and $195,264 respectively		1,135,409			1,219,567
Prepaid and other current assets		113,191			155,179

Total Current Assets		1,375,926			1,526,537

Intangible Assets, net		400,000			400,000

TOTAL ASSETS	$	1,775,926		$	1,926,537

LIABILITIES & STOCKHOLDERS' DEFICIT

Current Liabilities
Accounts Payable	$	420,018		$	429,009
Accrued Liabilities		7,878,583			7,480,846

Total Current Liabilities		8,298,601			7,909,855

PPP Loan Payable		135,165			135,165
Convertible Debt, net of discount of $0 and $0, respectively		22,300,000			22,300,000

Total Liabilities		30,733,766			30,345,020

Stockholders' Deficit

Common stock, $0.001 par value, 300,000,000 shares authorized; 32,311,887 shares issued and outstanding as of February 28, 2021 and November 30, 2020		32,312			32,312
Additional paid-in capital		11,458,630			11,458,630
Non-Controlling Interest in Subsidiary		(391,006	)		(387,147	)
Accumulated Deficit		(40,057,776	)		(39,522,278	)

Total Stockholders' Deficit		(28,957,840	)		(28,418,483	)

TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT	$	1,775,926		$	1,926,537

See Notes to Unaudited Consolidated Financial Statements

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TRIDENT BRANDS INCORPORATED

Consolidated Statements of Operations

(Unaudited)

	Three Months			Three Months			~~Nine Months~~			~~Nine Months~~
	Ended			Ended			~~Ended~~			~~Ended~~
	August 31,			August 31,			August 31,			August 31,
	February 28,			February 29,
	2020			2019			2020			2019
	2021			2020
Revenues, net	$	~~273~~144,~~044~~048		$	~~342~~161,~~109~~885		$	~~679,031~~		$	~~1,737,264~~
Cost of Sales		~~165~~78,~~316~~788			~~239~~84,~~647~~929			~~417,485~~			~~1,136,473~~
Gross Profit		~~107~~65,~~728~~260			~~102~~76,~~462~~956			~~261,546~~			~~600,791~~
General & Administrative Expenses		(~~962~~404,~~341~~284	)		(1,~~499~~313,~~845~~734	)		~~(3,395,631~~	)		~~(5,511,730~~	)
Loss from Operations		(~~854~~339,~~613~~025	)		(1,~~397~~236,~~383~~778	)		~~(3,134,085~~	)		~~(4,910,939~~	)
Other Income (Expenses)
Interest Expense, net		(~~833~~200,~~040~~333	)		(~~983~~1,~~745~~446,688	)		~~(3,280,847~~	)		~~(2,965,106~~	)
Gain on Debt Forgiveness		-			-			10,000			-
Derivative loss		-			(1,572,713	)
Derivative gain (loss)		(11,013,316	)		236,996			(20,614,658	)		(1,254,122	)
Total Other Income (Expenses)		(200,333	)		(3,019,401	)
Total Other Income (Expenses)		(11,846,356	)		(746,749	)		(23,885,505	)		(4,219,228	)
Net Loss	$	(539,357	)	$	(4,256,179	)
Net Loss	$	(12,700,969	)	$	(2,144,132	)	$	(27,019,590	)	$	(9,130,167	)
Net loss attributable to Trident		(535,498	)		(4,226,428	)
Net loss attributable to Trident		(12,686,858	)		(2,104,722	)		(26,949,036	)		(9,037,883	)
Net loss attributable to Non-Controlling Interests		(3,859	)		(29,751	)
Net loss attributable to Non-Controlling Interests		(14,111	)		(39,410	)		(70,554	)		(92,284	)
Loss per share - Basic and diluted	$	(0.02	)	$	(0.13	)
Loss per share - Basic and diluted	$	(0.39	)	$	(0.07	)	$	(0.83	)	$	(0.28	)
Weighted average number of common shares outstanding - Basic and diluted		32,311,887			32,311,887
Weighted average number of common shares outstanding - Basic and diluted		32,311,887			32,311,887			32,311,887			32,311,887

See Notes to Unaudited Consolidated Financial Statements

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TRIDENT BRANDS INCORPORATED

Consolidated Statements of Changes in Stockholders’' Deficit

From the ~~Nine~~quarter ~~Months~~ended ~~Ended~~February ~~August 31~~28, ~~2020~~2021 and ~~2019~~February 29, 2020

(Unaudited)

	~~Common~~		Common ~~Stock~~		Additional ~~Paid-in~~			~~Accumulated~~			Non-~~Controlling~~
	Common		Stock		Paid-in			Accumulated			Controlling
	Stock		Amount		Capital			Deficit			Interest			Total
Balance, November 30, 2018		32,311,887	$	32,312	$	9,564,737		$	(22,125,441	)	$	(170,999	)	$	(12,699,391	)
Stock Options Expense		-		-		283,899			-			-			283,899
Net loss, February 28, 2019		-		-		-			(3,214,574	)		(17,376	)		(3,231,950	)
Balance, February 28, 2019		32,311,887	$	32,312	$	9,848,636		$	(25,340,015	)	$	(188,375	)	$	(15,647,442	)
Stock Options Expense		-		-		96,852			-			-			96,852
Net loss, May 31, 2019		-		-		-			(3,718,587	)		(35,498	)		(3,754,085	)
Balance, May 31, 2019		32,311,887	$	32,312	$	9,945,488		$	(29,058,602	)	$	(223,873	)	$	(19,304,675	)
Net loss, August 31, 2019		-		-		-			(2,104,722	)		(39,410	)		(2,144,132	)
Balance, August 31, 2019		32,311,887	$	32,312	$	9,945,488		$	(31,163,324	)	$	(263,283	)	$	(21,448,807	)
Balance, November 30, 2019		32,311,887	$	32,312	$	9,945,488		$	(34,225,630	)	$	(288,603	)	$	(24,536,433	)
APIC reclassified to derivative liability		-		-		(3,981,220	)		-			-			(3,981,220	)
Net loss, February 29, 2020		-		-		-			(4,226,428	)		(29,751	)		(4,256,179	)
Balance, February 29, 2020		32,311,887	$	32,312	$	5,964,268		$	(38,452,058	)	$	(318,354	)	$	(32,773,832	)
Net loss, May 31, 2020		-		-		-			(10,035,750	)		(26,692	)		(10,062,442	)
Balance, November 30, 2020		32,311,887	$	32,312	$	11,458,630		$	(39,522,278	)	$	(387,147	)	$	(28,418,483	)
Balance, May 31, 2020		32,311,887	$	32,312	$	5,964,268		$	(48,487,808	)	$	(345,046	)	$	(42,836,274	)
Net loss, February 28, 2021		-		-		-			(539,498	)		(3,859	)		(539,357	)
Net loss, August 31, 2020		-		-		-			(12,686,858	)		(14,111	)		(12,700,969	)
Balance, February 28, 2021		32,311,887	$	32,312	$	11,458,630		$	(40,057,776	)	$	(391,006	)	$	(28,957,840	)
Balance, August 31, 2020		32,311,887	$	32,312	$	5,964,268		$	(61,174,666	)	$	(359,157	)	$	(55,537,243	)

See Notes to Unaudited Consolidated Financial Statements

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TRIDENT BRANDS INCORPORATED

Consolidated Statements of Cash Flows

(~~unaudited~~Unaudited)

	Nine Months			Nine Months
	Three Months			Three Months
	Ended			Ended
	August 31,			August 31,
	February 28,			February 29,
	2020			2019
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(27539,~~019,590~~357	)	$	(94,~~130~~256,~~167~~179	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount		~~1,614,006~~-			1,~~781~~199,~~727~~797
Depreciation expense		~~4,413~~-			62,~~286~~096
Inventory write-off		76,366			-
Derivative (gain)/loss		-			1,572,713
Derivative Loss		20,614,658			1,254,122
Provision for bad debts		2,340			-
Stock options expense		-			380,751
Provision for bad debts		19,425			-
Changes in operating assets and liabilities:
Accounts Receivable		(316,~~215~~950	)		~~131~~112,~~236~~836
Prepaid expenses and other current assets		(50,667	)		60,970
Prepaid expenses		41,988			(3,432	)
Inventory		~~433~~84,~~761~~158			~~(266~~128,~~794~~540	)
Accounts payable and accrued liabilities		2388,~~308,494~~746			~~184~~460,~~912~~637
Cash used in operating activities		(239,~~002,349~~075	)		(5782,~~596,957~~992	)
CASH FLOWS FROM INVESTING ACTIVITIES
NET CHANGE IN CASH AND CASH EQUIVALENTS		(39,075	)		(782,982	)
Sale of fixed assets		-			18,869
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		88,007			1,013,674
Additions of intangible assets		-			(6,420	)
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	48,932		$	230,682
Cash provided by investing activities		-			12,449
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from PPP loan		135,165			-
Proceeds from convertible debt		936,168			2,804,187
Cash provided by financing activities		1,071,333			2,804,187
NET CHANGE IN CASH AND CASH EQUIVALENTS		(931,016	)		(2,780,321	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		1,013,674			3,133,303
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	82,658		$	352,982
Supplemental disclosure of cash flow information:
Cash paid for:
Income taxes	$	-		$	-
Interest	$	-		$	~~380,352~~-
NON-CASH TRANSACTIONS
Debt discount related to derivative liability	$	-		$	1,911,256

See Notes to Unaudited Consolidated Financial Statements

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TRIDENT BRANDS INCORPORATED

Notes to Consolidated Financial Statements

~~August~~February 3128, ~~2020~~2021

(Unaudited)

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Trident Brands Incorporated (“we”, “our”, “the Company”) was incorporated under the laws of the State of Nevada on November 5, 2007. ~~The Company was formed to engage in the acquisition, exploration and development of natural resource properties.~~

The Company is ~~now~~ focused on the development of high growth branded and private label consumer products and ingredients within the nutritional supplement, life sciences and food and beverage categories. The Company is in its early growth stage and has transitioned out of its shell status with ~~its~~the ~~Form 10 style 8~~Super-K8 filing at the end of August, 2014. Activities to date have focused on capital formation, organizational development and execution of its branded and private label consumer products and ingredients business plan.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Form 10-K filed with SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for fiscal ~~2019~~2020 as reported in the Form 10-K have been omitted.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information, information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates. The ultimate impact from COVID-19 on the Company’s operations and financial results during 2020 will depend on, among other things, the ultimate severity and scope of the pandemic, the pace at which governmental and private travel restrictions and public concerns about public gatherings will ease, the rate at which historically large increases in unemployment rates will decrease, if at all, and whether, and the speed with which the economy recovers. We are not able to fully quantify the impact that these factors will have on our financial results during ~~2020~~2021 and beyond, but expect developments related to COVID-19 to materially affect the Company’s financial performance in ~~2020~~2021.

Customer Concentration

~~The~~Two ~~Company had four major~~ customers ~~that~~ accounted for ~~approximately~~20.5% 59and 14.38% of ~~sales~~total revenue for the ~~nine~~three month period ended ~~August~~February 3128, ~~2020~~2021 ~~and~~compared 63to one customer for 33.72% offor the ~~accounts~~three ~~receivable~~month ~~compared~~period toended ~~four~~February ~~major~~29, ~~customers~~2020. ~~that~~Four customers accounted for 7925.29%, of14.0%, ~~sales~~12.6% and 5412.05% of ~~the~~total accounts receivable as of February 28, 2021 compared to three customers for ~~the~~18.4%, 1216.9% ~~month~~and ~~period~~16.8% ~~ended~~as ~~November~~of 30February 29, ~~2019~~2020.

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Fair Value of Financial Instruments

The Company measures its financial assets and liabilities in accordance with the requirements of FASB ASC 820, “Fair Value Measurements and Disclosures”. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

Level 2 - Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date and includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures.

Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.

Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

10The ~~Table~~carrying value of ~~Contents~~certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, accounts payable and note payable. The fair value of the Company’s long-term debt is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value. As of February 28, 2021 the Company did not have any financial assets or liabilities measured and recorded at fair value on the Company’s consolidated balance sheets on a recurring basis.

TRIDENT BRANDS INCORPORATED

Notes to Consolidated Financial Statements

August 31, 2020

(Unaudited)

The carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, accounts payable and note payable. The fair value of the Company’s long-term debt is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value. As of August 31, 2020 the Company did not have any financial assets or liabilities measured and recorded at fair value on the Company’s consolidated balance sheets on a recurring basis, except for a derivative liability, related to the embedded conversion option on the “2016” and “2018” convertible notes, with a fair value as of August 31, 2020 of $30,421,358. The derivative liability was fair valued using Level 3 inputs.

The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs:

Balance at November 30, 2019	$	5,825,480
APIC reclassified to derivative liability		3,981,220
Unrealized derivative loss included in other expense		20,614,658
Balance at August 31, 2020	$	30,421,358

During the nine months ended August 31, 2020, the embedded conversion option on the 2016 convertible notes qualified for derivative accounting. The beneficial conversion feature that was recorded to additional paid in capital (APIC) when the convertible notes were first issued amounting to $3,981,220 were reclassified to derivative liability when the conversion price on the notes were amended to a variable conversion rate (see Note 5). The fair value of the derivative liabilities are calculated at the time of issuance and the Company records a derivative liability for the calculated value. Changes in the fair value of the derivative liabilities are recorded in other income (expense) in the consolidated statements of operations.

The following are the assumptions used for derivative instruments valued using the Black Scholes option pricing model as of August 31, 2020:

Market value of stock on measurement date	$	0.288
Risk-fee interest rate	0.16 to 0.18		%
Dividend yield		0	%
Volatility factor		143.24	%
Term	0.33 yr. and 1.25 yr.

Recent Accounting Pronouncements

The Company has evaluated recent accounting pronouncements through the date the financial statements were issued and filed with the Securities and Exchange Commission and believe that there are none that will have a material impact on the Company’s financial statements.

NOTE 3. GOING CONCERN

The accompanying interim consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are issued. In accordance with Financial Accounting Standards Board, or the FASB, Accounting Standards Update No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40), our management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued.

As of ~~August~~February 3128, ~~2020~~2021, the Company had $8248,~~658~~932 in cash and a working capital deficit of $476,~~165~~922,~~954~~675. The Company also has generated losses and has an accumulated deficit as of ~~August~~February 3128, ~~2020~~2021. These factors raise substantial doubt about the ability of the Company to continue as a going concern. ~~The~~Unless ~~Company~~Management completed additional long-term financing with the non-US institutional investor, receiving proceeds of $3,400,780 on November 30, 2018, $2,804,187 on April 13, 2019 and $3,795,033 (less $936,168 withheld for interest payments up to and including June 30, 2020) on November 6, 2019 through the issuance of secured convertible promissory notes. On March 5, 2020, the 2018 Convertible Note was amended to increase the amount of the 3rd tranche by $936,168 representing the amount previously withheld as interest payment. The payment was received on March 12, 2020. However, unless management is able to obtain additional financing, the Company may not be able to meet its funding requirements during the next 12 months. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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TRIDENT BRANDS INCORPORATED

Notes to Consolidated Financial Statements

August 31, 2020

(Unaudited)

NOTE 4. WARRANTS AND OPTIONS

The following table represents stock option activity for the three month period ended ~~August~~February 3128, ~~2020~~2021:

	Number of Options		Weighted Average Exercise Price		Contractual Life in Years		Intrinsic Value
Outstanding - November 30, 2019		3,215,000	$	0.40		2.42
Outstanding - November 30, 2020		1,832,500	$	0.40		2.02
Exercisable - November 30, 2019		3,215,000	$	0.40		2.42	$	-0-
Exercisable - November 30, 2020		1,832,500	$	0.40		2.02	$	-0-
Granted	~~-0-~~	-0-
Exercised or Vested	~~-0-~~	-0-
Forfeited or Expired		~~750,000~~-0-
Outstanding - August 31, 2020		2,465,000	$	0.40		2.27
Outstanding - February 28, 2021		1,832,500	$	0.40		1.77
Exercisable - August 31, 2020		2,465,000	$	0.40		2.27	$	-0-
Exercisable - February 28, 2021		1,832,500	$	0.40		1.77	$	-0-

As of ~~August~~February 3128, ~~2020~~2021, the Company has no outstanding warrants. All the outstanding warrants have expired.

NOTE 5. CONVERTIBLE DEBT

On January 29, 2015, the Company entered into a securities purchase agreement with a non-US institutional investor whereby it agreed to sell an aggregate principal amount of $2,300,000 of senior secured convertible debentures, convertible into shares of the ~~company~~Company’s common stock.

The Company received $1,800,000 of the funds from the transaction on February 5, 2015. The balance of $500,000 was received on May 14, 2015. These convertible notes were subsequently acquired by Fengate Trident, LP (“‘Fengate”) on April 28, 2017.

The convertible debentures are convertible into shares of the Company’s common stock at an initial conversion price of $0.71 per share, for an aggregate of up to 3,239,437 shares. The debentures originally accrued interest at 6% per annum. On September 26, 2016 the Company entered into an amendment agreement related to these convertible debentures whereby the applicable interest rate was increased from 6% to 8% and provisions added to allow the investor to transfer, sell or hypothecate the convertible notes subject to applicable securities laws. The maturity date of the notes was also extended through September 30, 2019. We considered ASC Topic 470-50, Debt Modifications and Extinguishments, and determined that the modification was not deemed substantial.

OnDue ~~September~~to ~~26, 2016,~~ the ~~Company~~note ~~entered~~being ~~into~~convertible ~~a securities purchase agreement with a non-US institutional investor, pursuant~~ to ~~which,~~common inshares ~~consideration for proceeds~~ of ~~$4,100,000,~~ the Company, ~~issued~~ a ~~secured~~beneficial ~~convertible~~conversion ~~promissory~~feature ~~note~~analysis inwas ~~the amount of $4,100,000~~performed. ~~Pursuant~~The tointrinsic ~~the~~value ~~securities~~of ~~purchase agreement,~~ the ~~investor~~conversion ~~had~~feature ~~agreed,~~was ~~from time to time after January 1~~$647,888 ~~2017,~~which towas ~~make~~recognized ~~additional~~as ~~investments~~debt atdiscount. ~~the~~As ~~Company’s request~~ of upNovember ~~to $5~~30,~~900,000~~ ~~($10~~2017,~~000,000~~ in the ~~aggregate)~~full inamount ~~one or more tranches~~ of ~~not~~the ~~less~~debt ~~than~~discount ~~one~~has ~~tranche~~been ~~during any 60 day period~~amortized.

On September 26, 2016, the Company entered into a securities purchase agreement with a non-US institutional investor, pursuant to which, in consideration for proceeds of $4,100,000, the Company issued a secured convertible promissory note in the amount of $4,100,000. Pursuant to the securities purchase agreement, the investor has agreed, from time to time after January 1, 2017, to make additional investments at the Company’s request of up to $5,900,000. On May 9, 2017, the Company received the second tranche of funding with proceeds of $4,400,000 and on May 16, 2018 the third tranche of $1,500,000 for a total investment by the investor of $10,000,000.

The Company used the proceeds of the secured convertible note for general working capital purposes including settlement of accounts payable and repayment of mature loans.

In consideration of each advance made by the investor pursuant to the securities purchase agreement, the Company issued to the investor a convertible promissory note of equal value, maturing on September 30, 2019, and bearing interest at the rate of 8% per annum. Each note is secured in first priority against the present and after acquired assets of the Company and is convertible in whole or in part at the option of the holder into common shares of the Company at a conversion price of $0.60 per share, for an aggregate of up to 16,666,667 shares. These convertible notes were subsequently acquired by Fengate on April 28, 2017.

Due to the notes being convertible to common shares of the Company, a beneficial conversion feature analysis was performed. The intrinsic value of the conversion feature of the notes amounted to $3,333,334 and was recognized as a debt discount. As of August 31, 2020, $3,333,334 of the debt discount was amortized to interest of which $334,988 was amortized during the current nine month period compared to $689,409 for the nine month period in the prior year. As of August 31, 2020, the debt discount was fully amortized.

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~~TRIDENT~~In ~~BRANDS~~consideration ~~INCORPORATED~~of each advance made by the investor pursuant to the securities purchase agreement, the Company issued to the investor a convertible promissory note of equal value, maturing on September 30, 2019, and bearing interest at the rate of 8% per annum. Each note is secured in first priority against the present and after acquired assets of the Company and is convertible in whole or in part at the option of the holder into common shares of the Company at a conversion price of $0.60 per share, for an aggregate of up to 16,666,667 shares. These convertible notes were subsequently acquired by Fengate on April 28, 2017.

~~Notes~~Due to ~~Consolidated~~the ~~Financial~~notes ~~Statements~~being convertible to common shares of the Company, a beneficial conversion feature analysis was performed. The intrinsic value of the conversion feature of the notes amounted to $3,333,334 and was recognized as a debt discount. As of November 30, 2020, $3,333,334 of the debt discount was amortized to interest of which $334,988 was amortized during the current year compared to $855,987 in the prior year. As of November 30, 2020, the debt discount was fully amortized.

~~August~~On 31November 30, ~~2020~~2018 the Company and Fengate entered into a Securities Purchase Amendment Agreement (‘SPA’) pursuant to which the Company has agreed to issue to Fengate additional convertible promissory notes (collectively, the “2018 and 2019 Convertible Notes”) of up to $10,000,000, subject to certain terms and conditions. Each portion of the principal amount advanced pursuant to the SPA will bear interest at the rate of twelve percent (12%) per annum and will be payable monthly in arrears to Fengate. Outstanding principal and interest will continue to be secured by the general security agreement dated September 26, 2016, which forms a part of the Agreement. The holder of the note may also elect from time to time to convert all or a portion of the outstanding principal and interest into common shares of the Company at a 25% discount to the average closing price of the common shares during the 10 trading days immediately prior to the applicable conversion date.

~~(Unaudited)~~On November 30, 2018 the Company received the first tranche of funding with proceeds of $3,400,780. The 2nd tranche of $2,804,187 was received on April 13, 2019. The 3rd tranche of $3,795,033 less $936,168 withheld for interest payments up to and including June 30, 2020 was received on November 6, 2019. On March 5, 2020, the 2018 and 2019 Convertible Notes were amended to increase the amount of the 3rd tranche by $936,168 representing the amount previously withheld as interest payment. The withheld interest was subsequently received on March 12, 2020.

OnThe ~~November~~Company ~~30,~~analyzed ~~2018~~ the ~~Company~~embedded ~~and~~conversion ~~Fengate~~option ~~entered~~on ~~into~~the aconvertible ~~Securities~~notes ~~Purchase~~for ~~Amendment~~derivative ~~Agreement~~accounting ~~pursuant~~consideration tounder ~~which~~ASC ~~the~~815-15 ~~Company~~“Derivatives ~~agreed~~and toHedging” ~~issue~~and todetermined ~~Fengate~~that anthe ~~additional~~conversion ~~convertible~~option ~~promissory~~on ~~note (~~the “2018 Convertible Note”) ofqualified upfor toderivative ~~$10,000,000,~~accounting. ~~subject~~The toCompany ~~certain~~used ~~terms~~the ~~and~~Black-Scholes ~~conditions.~~model ~~Each~~to ~~portion~~value of the ~~principal~~embedded ~~amount~~conversion ~~advanced~~option ~~pursuant~~at to$892,000 on the ~~2018~~issuance ~~Convertible~~date ~~Note~~of ~~will~~November ~~bear~~30, ~~interest~~2018, at$1,911,256 on the ~~rate~~issuance date of ~~twelve~~April ~~percent~~13, ~~(12%)~~2019 ~~per annum~~ and ~~will~~$1,696,933 beon ~~payable~~the ~~monthly~~issuance indate ~~arrears~~of toNovember ~~Fengate~~6, 2019.The ~~Outstanding~~assumptions ~~principal~~used ~~and~~were ~~interest~~a ~~will~~discount ~~continue~~rate toof be2.80%, ~~secured~~1.96% byand ~~the~~1.96%; ~~general~~volatility ~~security~~rate ~~agreement~~of ~~dated September 26~~79.57%, ~~2016,~~104.70% ~~which~~and ~~forms~~107.3%; and a ~~part~~term of ~~the~~1.50, ~~Agreement~~1.13 and 0.57 years respectively. The ~~holder~~fair values of the ~~note~~embedded ~~may~~conversion ~~also~~options ~~elect~~were ~~from~~recorded ~~time~~as todebt ~~time~~discount toand ~~convert~~were ~~all~~amortized orover athe ~~portion~~term of the ~~outstanding~~2018 ~~principal~~ and ~~interest~~2019 ~~into~~Convertible ~~common~~Notes. ~~shares~~Amortization of ~~the~~debt ~~Company~~discount atfor athe ~~25%~~years ~~discount~~ended toNovember ~~the~~30, ~~average~~2020 ~~closing~~and ~~price~~2019 ofwas ~~the~~$1,885,587 ~~common~~and ~~shares~~$1,857,295, ~~during~~respectively. ~~the~~The 10unamortized ~~trading~~discount ~~days~~as ~~immediately~~of ~~prior~~November to30, ~~the~~2020 ~~applicable~~is ~~conversion date~~$0.

On ~~November~~January 309, ~~2018~~2020 the Company ~~received~~and ~~the~~Fengate ~~first~~entered ~~tranche~~into ofan ~~funding~~Amendment ~~with~~to ~~proceeds~~Convertible ofPromissory ~~$3,400,780.~~Notes ~~The~~Agreement ~~2nd~~to ~~tranche~~amend the terms of ~~$2,804,187~~the ~~was~~convertible ~~received~~notes issued on ~~April~~February 135, ~~2019.~~2015 ~~The~~(US$1,800,000), ~~3rd~~May ~~tranche~~14, of2015 (US$3500,~~795~~000),~~033~~ ~~less~~September ~~$936~~26,~~168~~ ~~withheld~~2016 ~~for~~(US$4,100,000), ~~interest~~May ~~payments~~9, up2017 to(US$4,400,000) and ~~including~~May ~~June 30~~16, ~~2020~~2018 ~~was~~(US$1,500,000) ~~received~~(collectively onthe ~~November~~“2016 6,Convertible ~~2019~~Notes”). ~~The~~Pursuant ~~withheld~~to ~~interest~~the ~~was~~Amendment, ~~recorded~~Fengate ashas ~~debt~~agreed ~~discount.~~to Onconvert ~~March~~all 5,of ~~2020,~~ the ~~2018~~2016 ~~Convertible~~Notes ~~Note~~on ~~was~~or ~~amended~~before the earlier to ~~increase~~occur of (i) the ~~amount~~maturity date of the ~~3rd~~2016 ~~tranche~~Convertible byNotes and (ii) the Company raising new equity investment of not less than US$~~936~~2,~~168~~000,000, ~~representing~~on terms mutually acceptable to Fengate and the ~~amount~~Company ~~previously~~(subject ~~withheld~~to asFengate’s ~~interest~~regulatory ~~payment~~considerations). ~~The~~Conversion ~~withheld~~of ~~interest~~the ~~was~~2016 ~~subsequently~~Notes ~~received~~will onoccur ~~March~~in ~~12,~~a ~~2020.~~single Asconversion oftransaction ~~August~~at ~~31,~~a ~~2020,~~price ~~$936,168~~that is equal to a 25% discount to the average closing price of the ~~debt~~Company’s ~~discount~~common ~~was~~stock ~~reversed~~for ~~and~~the 10 trading days immediately prior to the ~~full~~conversion ~~amount~~date, ~~was~~with ~~recorded~~the asexact ~~accrued~~structure ~~interest~~of the conversion to be determined by the parties. On ~~January~~June 93, 2020 the ~~2018~~maturity ~~Convertible~~date ~~Notes~~was ~~were~~extended from May 31 to December 31, 2020. The Amendment also extended the maturity date of the 2018 and ~~will~~2019 ~~mature~~Convertible onNotes to December 1, 2021.

The Company analyzed the embedded conversion option on the convertible notes for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the conversion option on the 2018 Convertible Note qualified for derivative accounting. The Company used the Black-Scholes model to value the embedded conversion option at $892,000 on the issuance date of November 30, 2018, $1,911,256 on the issuance date of April 13, 2019 and $1,696,933 on the issuance date of November 6, 2019. The assumptions used were a discount rate of 2.80%, 1.96% and 1.96%; volatility rate of 79.57%, 104.70% and 107.3%; and a term of 1.50, 1.13 and 0.57 years respectively. The Company used the Black-Scholes model to re-value the embedded conversion options at $15,302,213 as of August 31, 2020. The change of $9,476,733 during the nine month period ended August 31, 2020 was recorded as derivative loss expense. The assumptions used were a discount rate of 0.16%, volatility of 143.24% and a term of 1.25 year. The fair value of the embedded conversion options were recorded as debt discount and will be amortized over the term of the 2018 Convertible Notes. The amortization recognized in the current nine month period was $1,279,018 compared to $1,092,318 for the nine month period in the prior year. The unamortized discount as of August 31, 2020 was $1,363,876.

On January 9, 2020 the Company and Fengate entered into an Amendment to Convertible Promissory Notes Agreement to amend the terms of certain convertible promissory notes issued pursuant to a Securities Purchase Agreement by and between the Company and the Purchaser dated September 26, 2016 and previously amended on November 30, 2018 and March 11, 2019. The Amendment affects the convertible notes issued February 5, 2015 (US$1,800,000), May 14, 2015 (US$500,000), September 26, 2016 (US$4,100,000), May 9, 2017 (US$4,400,000) and May 16, 2018 (US$1,500,000), respectively (collectively the “2016 Notes”). Pursuant to the Amendment, Fengate has agreed to convert all of the 2016 Notes on or before the earlier to occur of (i) the maturity date of the 2016 Convertible Notes and (ii) the Company raising new equity investment of not less than US$2,000,000, on terms mutually acceptable to Fengate and the Company (subject to Fengate’s regulatory considerations). Conversion of the 2016 Notes will occur in a single conversion transaction at a price that is equal to a 25% discount to the average closing price of the Company’s common stock for the 10 trading days immediately prior to the conversion date, with the exact structure of the conversion to be determined by the parties. On June 3, 2020 the maturity date of the 2016 Notes was extended from May 31 to December 31, 2020 effective May 31, 2020.

The Amendment of January 9, 2020 also amends the outstanding 2018 Convertible Note issued to Fengate on November 30, 2018 (US$3,400,780), April 13, 2019 (US$2,804,187) and November 6, 2019 (US$3,795,033). Maturity of the 2018 Convertible Note has been deferred to December 1, 2021.

The Company analyzed the embedded conversion option on the amended “2016 Notes” for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the conversion option qualified for derivative accounting. On January 9, 2020 the Company used the Black-Scholes model to value the embedded conversion options at $7,965,083. The assumptions used were a discount rate of 1.96%, volatility rate of 148.8%; and a term of 0.39 years respectively. The modification resulted in $3,981,220 of APIC previously recorded for beneficial conversion feature of these convertible notes being reclassified as derivative liability, and $3,983,863 was recorded as derivative loss expense. The Company used the Black-Scholes model to re-value the embedded conversion options at $15,119,145 as of August 31, 2020. The change of $7,154,062 during the nine month period ended August 31, 2020 was recorded as derivative loss expense. The assumptions used were a discount rate of 0.18%, volatility of 143.24% and a term of 0.33 year.

NOTE 6. PAYCHECK PROTECTION PROGRAM (PPP) LOAN

On May 28, 2020, the company obtained a Paycheck Protection Program (PPP) loan in the amount of $135,165. These business loans were established by the 2020 US Federal government Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to help certain businesses, self-employed workers, sole proprietors, certain nonprofit organizations, and tribal businesses continue paying their workers.

The CARES Act was established in order to enable small businesses to pay employees during the economic slowdown caused by COVID-19 by providing forgivable loans to qualifying businesses for up to 2.5 times their average monthly payroll costs. The amount borrowed under the CARES Act and used for payroll costs, rent, mortgage interest, and utility costs during the 24 week period after the date of loan disbursement is eligible to be forgiven provided that (a) we use the PPP Funds during the eight week period after receipt thereof, and (b) the PPP Funds are only used to cover payroll costs (including benefits), rent, mortgage interest, and utility costs. While the full loan amount may be forgiven, the amount of loan forgiveness will be reduced if, among other reasons, we do not maintain staffing or payroll levels or less than 60% of the loan proceeds are used for payroll costs. Principal and interest payments on any unforgiven portion of the PPP Funds will be deferred to the date the SBA remits the borrower’s loan forgiveness amount to the lender or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness period for six months and will accrue interest at a fixed annual rate of 1.0% and carry a two year maturity date. There is no prepayment penalty on the CARES Act Loan.

NOTE 7. CONTINGENCIES

On January 11, 2019, the Company filed a lawsuit against Everlast World’s Boxing Headquarters Corp. (“Everlast”) in the New York Supreme Court in New York County, New York. This action involved the Company seeking a declaration that it was entitled to terminate a License Agreement between the parties pursuant to which Trident had the right to market certain Everlast-branded products. Everlast subsequently removed that case to the U.S. District Court for the Southern District of New York.

On January 17, 2019, Everlast filed a counter civil lawsuit against the Company and other defendants in the U.S. District Court for the Southern District of New York. In that lawsuit, Everlast seeks payment from the defendants under a License Agreement dated June 4, 2013, for $425,555 in unpaid royalties allegedly due and owing under the License Agreement and interest on the allegedly unpaid royalties of $96,265, which interest allegedly continues to accrue. Everlast has also sought all costs, expenses, and legal fees incurred by Everlast in collecting monies that it claims are due under the License Agreement. On February 26, 2020, the court in the Everlast matter issued an Opinion and Order granting a motion to dismiss all of Trident’s claims against Everlast and granting a motion for judgment on the pleadings as to liability against Trident. The Court left open the question of damages to be awarded to Everlast. The Company and Everlast have participated in settlement discussions before a magistrate judge, but no settlement has been reached. Everlast has filed a motion for summary judgment for damages in the amount of $741,998, including damages, costs, and attorneys’ fees. (See Note 8).

NOTE 8. SUBSEQUENT EVENTS

On October 15, 2020, the Court in the Everlast case ordered, adjudged and decreed that Plaintiff Everlast World’s Boxing Headquarters Corporation have judgment and recover the following sums from the Company:

1. $425,000 representing royalty payments due to Plaintiff;

2. Interest on royalty payments computed to October 15, 2020, in the sum of $242,920;

3. Costs in the sum of $800; and

4. Attorneys’ fees in the sum of $70,226; making in total the sum of $738,946 payable by the Company to Everlast.

The Clerk of Court was directed to close the case. The Company has 30 days from the date of judgement to appeal the case. Management will review the judgement and explore all its options. The Company has accrued $425,000 liability as of August 31, 2020.

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~~ITEM~~The 2Company analyzed the embedded conversion option on the amended “2016 Convertible Notes” for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the conversion option qualified for derivative accounting. ~~MANAGEMENT’S~~On ~~DISCUSSION~~January ~~AND~~9, ~~ANALYSIS~~2020 OFthe ~~FINANCIAL~~Company ~~CONDITIONS~~used ~~AND~~the ~~RESULTS~~Black-Scholes OFmodel ~~OPERATIONS~~to value the embedded conversion options at $7,965,083. The assumptions used were a discount rate of 1.96%, volatility rate of 148.8%; and a term of 0.39 years respectively. The modification resulted in $3,981,221 of APIC previously recorded for beneficial conversion feature of these convertible notes being reclassified as derivative liability.

~~Forward~~On ~~Looking~~November ~~Statements~~30, 2020, the Company entered into a fourth amendment of the 2016 Convertible Notes and the 2018 and 2019 Convertible Notes wherein the Company will issue to Fengate 29,432,320 shares of Company Preferred Stock (representing $17,659,392 of principal and interest converted into Preferred Stock at the rate of $0.60 per share), in full and complete satisfaction of (i) all amounts owing under the 2016 Convertible Notes through November 30, 2020 (including accrued interest thereon) and (ii) all accrued interest on the 2018 and 2019 Convertible Notes through November 30, 2020. The conversion is expected to occur by the end of June, 2021. The 2018 and 2019 Convertible Notes were further amended to (i) eliminate the conversion feature of such notes, (ii) provide for a simple interest rate of 8% per annum, with the first 2 years of interest payable at maturity of the 2018 and 2019 Convertible Notes and the last three years of interest payable quarterly beginning February 28, 2023; and (iii) extend the maturity of such notes until November 30, 2025. Pursuant to this amendment, all notes no longer qualified for derivative accounting. As such, the value of the embedded conversion options of all notes of $5,494,363 was credited to additional paid in capital. The issuance of the Preferred Shares is subject to stockholder approval.

~~The~~We ~~following~~considered ~~Management’s~~ASC ~~Discussion~~Topic ~~and~~470-50, ~~Analysis~~Debt ofModifications ~~Financial Condition~~ and ~~Results~~Extinguishments ~~of Operations (“MD&A”) should be read~~ in ~~conjunction~~connection with the ~~interim~~amendment ~~consolidated~~of ~~financial~~the ~~statements,~~interest rate and ~~notes~~maturity ~~thereto,~~date ~~for~~of the ~~quarter~~2018 ~~ended~~and ~~August~~2019 ~~31,~~Convertible ~~2020~~Notes ~~contained~~and ~~under~~determined ~~Item~~that 1the ofmodification ~~this~~would ~~Quarterly~~be ~~Report~~considered ona ~~Form~~debt ~~10-Q~~extinguishment. ~~(“Form~~The ~~10-Q”)~~unamortized ~~and~~discount inof ~~conjunction~~$1,092,295 ~~with~~at the ~~annual~~date ~~consolidated~~of ~~financial~~amendment ~~statements,~~was ~~and~~recognized ~~notes~~as ~~thereto,~~a ~~contained~~loss ~~in the Annual Report~~ on ~~Form~~debt ~~10-K~~extinguishment for the ~~fiscal~~ year ended November 30, ~~2019 (“Form 10-K”). Unless otherwise indicated herein, the discussion and analysis contained in this MD&A includes information available through October 20,~~ 2020.

~~Certain~~NOTE ~~statements contained in this MD&A may constitute forward-looking statements as defined under securities laws~~9. ~~Forward-looking~~PAYCHECK ~~statements~~PROTECTION ~~may~~PROGRAM ~~relate~~(PPP) to our future outlook and anticipated events or results and may include statements regarding our future financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes, plans and objectives. In some cases, forward-looking statements can be identified by terms such as “anticipate”, “estimate”, “intend”, “project”, “potential”, “continue”, “believe”, “expect”, “could”, “would”, “should”, “might”, “plan”, “will”, “may”, “predict”, the negatives of such terms, and other similar expressions concerning matters that are not historical facts. To the extent any forward-looking statements contain future-oriented financial information or financial outlooks, such information is being provided to enable a reader to assess our financial condition, material changes in our financial condition, our results of operations, and our liquidity and capital resources. Readers are cautioned that this information may not be appropriate for any other purpose, including investment decisions. LOAN

~~Forward-looking~~On ~~statements~~May ~~contained~~28, in2020, ~~this~~the ~~MD&A~~Company ~~are~~obtained ~~based~~a onPaycheck ~~certain~~Protection ~~factors~~Program ~~and~~(PPP) ~~assumptions~~loan ~~regarding~~in ~~expected~~the ~~growth,~~amount ~~results~~ of ~~operations~~$135,165. ~~performance,~~These ~~and~~ business ~~prospects~~loans ~~and~~were ~~opportunities.~~established ~~While~~by wethe ~~consider~~2020 ~~these~~US ~~assumptions~~Federal togovernment beCoronavirus ~~reasonable~~Aid, ~~based~~Relief, onand ~~information~~Economic ~~currently~~Security ~~available,~~Act ~~they~~(CARES ~~may~~Act) ~~prove~~ to behelp ~~incorrect.~~certain ~~Forward~~businesses, self-~~looking~~employed ~~statements~~workers, ~~are~~sole ~~also~~proprietors, ~~subject to~~ certain ~~factors~~nonprofit organizations, ~~including risks~~ and ~~uncertainties~~tribal ~~that~~businesses ~~could~~continue ~~cause~~paying ~~actual~~their ~~results to differ materially from what we currently expect~~workers. ~~These factors are more fully described in the “Risk Factors” section at Item 1A of the Form 10-K.~~

~~Forward-looking~~The ~~statements~~CARES ~~contained~~Act was established in ~~this~~order ~~commentary~~to ~~are~~enable ~~based~~small onbusinesses ~~our~~to ~~current~~pay ~~estimates,~~employees ~~expectations~~during the economic slowdown caused by COVID-19 by providing forgivable loans to qualifying businesses for up to 2.5 times their average monthly payroll costs. The amount borrowed under the CARES Act and ~~projections~~used for payroll costs, ~~which~~rent, wemortgage ~~believe~~interest, ~~are~~and ~~reasonable~~utility ascosts ofduring the 24 week period after the date of ~~this~~loan ~~report.~~disbursement ~~You~~is ~~should~~eligible ~~not~~to ~~place~~be ~~undue~~forgiven ~~importance~~provided onthat ~~forward-looking~~(a) ~~statements~~we use the PPP Funds during the eight week period after receipt thereof, and ~~should~~(b) ~~not~~the ~~rely~~PPP ~~upon~~Funds ~~this~~are ~~information~~only asused ofto ~~any~~cover ~~other~~payroll ~~date~~costs (including benefits), rent, mortgage interest, and utility costs. ~~Other~~While ~~than~~the asfull ~~required~~loan ~~under~~amount ~~securities~~may ~~laws~~be forgiven, the amount of loan forgiveness will be reduced if, among other reasons, we do not ~~undertake~~maintain tostaffing ~~update~~or payroll levels or less than 60% of the loan proceeds are used for payroll costs. Principal and interest payments on any ~~forward-looking~~unforgiven ~~information~~portion of the PPP Funds will be deferred to the date the SBA remits the borrower’s loan forgiveness amount to the lender or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness period for six months and will accrue interest at ~~any~~a ~~particular~~fixed ~~time~~annual rate of 1.0% and carry a two year maturity date. There is no prepayment penalty on the CARES Act Loan.

~~All~~NOTE ~~dollar amounts in this MD&A are expressed in thousands of U~~10.S. ~~dollars~~COMMITMENTS ~~unless~~AND ~~otherwise noted.~~ CONTINGENCIES

~~Business~~Everlast ~~Developments~~License Agreement

~~Note~~On ~~Amendments~~December 23, 2013, the Company entered into a Deed of Assignment Agreement with Everlast World’s Boxing Headquarters Corporation, International Brand Management Limited, Sports Nutrition Products Incorporated and Manchester Capital Incorporated wherein Everlast, International Brand, Sports Nutrition and Manchester Capital are parties to a trade mark license and Sports Nutrition, a New York corporation, has assigned its interest in the trade mark license to the Company. Pursuant to the terms of the assignment agreement, Sports Nutrition Products Incorporated, a wholly owned subsidiary of Trident Brands Incorporated, assigned all of its rights, title, interest and benefit to the trade mark license to the Company effective December 23, 2013 and the Company assumed all of the obligations of Sports Nutrition Products Incorporated under the license agreement. The Company shall remain responsible to Everlast and International Brand for all acts and omissions of the subsidiary, Sports Nutrition Products Inc.

OnThe ~~January~~Everlast 9,License ~~2020 the Company and Fengate Trident LP entered into an Amendment to Convertible Promissory Notes~~ Agreement toincludes ~~amend the terms of certain convertible promissory notes issued pursuant to~~ a ~~Securities~~clause ~~Purchase~~stating ~~Agreement~~that byManchester ~~and~~Capital ~~between~~Incorporated ~~the~~will ~~Company~~guarantee ~~and~~that the ~~Purchaser~~Licensee ~~dated~~shall ~~September~~perform ~~26,~~all ~~2016~~of ~~and~~its ~~previously~~obligations ~~amended on November 30, 2018~~ and ~~March~~duties ~~11,~~under ~~2019. The Amendment affects~~ the ~~convertible~~License ~~notes~~Agreement. ~~issued~~If ~~February 5, 2015 (US$1,800,000), May 14, 2015 (US$500,000), September 26, 2016 (US$4,100,000), May 9, 2017 (US$4,400,000) and May 16, 2018 (US$1,500,000), respectively (collectively~~ the ~~“2016~~Licensee ~~Notes”).~~defaults ~~Pursuant~~in to the ~~Amendment,~~payment ~~the~~when ~~Purchaser~~due ~~has agreed to convert all~~ of ~~the~~any ~~2016~~amount ~~Notes~~it onis orobliged ~~before~~to ~~the~~pay ~~earlier~~ to ~~occur~~Licensor ofunder ~~(i)~~ the ~~Maturity~~License ~~Date~~Agreement, ofor ~~the~~arising ~~2016~~from ~~Convertible~~its ~~Notes and (ii) the Company raising new equity investment of not less than US$2~~termination,~~000,000,~~ onManchester ~~terms~~Capital ~~mutually~~is ~~acceptable~~unconditionally toresponsible ~~the Purchaser and the Company (subject~~ to ~~the~~pay ~~Purchaser’s regulatory considerations). Conversion of the 2016 Notes will occur in a single conversion transaction at a price~~ that isamount ~~equal~~ to aLicensor ~~25%~~in ~~discount to~~ the ~~average~~manner ~~closing~~prescribed ~~price~~in of the ~~Company’s~~License ~~common~~Agreement ~~stock~~as ~~for~~if ~~the~~it 10were ~~trading days immediately prior to~~ the ~~conversion date, with the exact structure of the conversion to be determined by the parties~~Licensee.

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The ~~Amendment~~Royalty ~~also~~Calculation, ~~amends~~as per the ~~outstanding~~terms ~~convertible~~of ~~notes~~the ~~issued~~agreement, toare ~~the~~as ~~Purchaser~~follows: onIn ~~November 30~~2013, ~~2018~~7% ~~(US$3,400,780),~~of ~~April~~Net ~~13,~~Retail ~~2019~~Sales ~~(US$2~~and 7% of 60% of Direct Response Sales Revenue; in 2014,~~804,187)~~ 8% of Net Retail Sales and ~~November~~8% 6of 60% of Direct Response Sales Revenue; in 2015, ~~2019~~9% ~~(US$3~~of Net Retail Sales and 9% of 60% of Direct Response Sales Revenue; in 2016 onwards,~~795,033)~~ ~~respectively~~10% ~~(collectively~~of ~~the~~Net ~~“Amended~~Retail ~~SPA~~Sales ~~Notes”).~~and ~~Maturity~~10% of ~~the~~60% ~~Amended~~of ~~SPA~~Direct ~~Notes~~Response ~~has~~Sales ~~been~~Revenue. ~~deferred~~The toAnnual ~~December~~Minimum 1Guaranteed Royalty is $120,000 ~~2021.~~in It2014, ~~was~~$235,000 ~~further~~in ~~agreed~~2015, ~~that~~$320,000 ~~interest~~in on2016, $345,000 in 2017 and in 2018 onwards, if the ~~Amended~~Agreement ~~SPA~~remains ~~Notes~~in force, will ~~accrue~~be as75% atof ~~July~~the 1,previous ~~2020~~Year’s ~~and~~Royalty beCalculation ~~payable~~or ~~upon~~the ~~maturity~~previous Year’s Annual Minimum Guaranteed Royalty plus 10%, whichever is greater.

The agreement was terminated on December 31, 2017. On ~~March~~January 517, ~~2020~~2019, Everlast World’s Boxing Headquarters Corp. (“Everlast”) filed a counter civil lawsuit against the ~~Convertible~~Company ~~Promissory~~and ~~Note~~other defendants. In that lawsuit, Everlast seeks payment from the defendants under a License Agreement dated ~~November~~June 64, ~~2019~~2013, ~~was~~for ~~amended~~$425,555 in unpaid royalties allegedly due and owing under the License Agreement and interest on the allegedly unpaid royalties of $96,265, which interest allegedly continues to ~~delete~~accrue. Everlast has also sought all costs, expenses, and legal fees incurred by Everlast in collecting monies that it claims are due under the ~~second~~License ~~paragraph~~Agreement. On February 26, 2020, the court in ~~its~~the ~~entirety~~Everlast matter issued an Opinion and ~~replace~~Order itgranting ~~with~~a motion to dismiss all of the ~~following~~Company’s ~~paragraph~~claims against Everlast and granting a motion for judgment on the pleadings as to liability against the Company. The Court left open the question of damages to be awarded to Everlast. The Company had requested that the parties participate in settlement discussions before a magistrate judge or, in the alternative, that Everlast engage in limited discovery on these matters. No settlement was reached. On October 15, 2020, the Court in the Everlast case ordered, adjudged and decreed that Plaintiff Everlast have judgment and recover a total of $738,946 from the Company as follows:

~~The~~1. ~~“Issuance Date” with respect to the Note for the portion of the Principal Amount equal to US~~$3425,~~795,033~~000 isrepresenting ~~(a)~~royalty ~~November~~payments 6,due ~~2019 for the first installment provided~~ to ~~Company of $2,858,865 and (b) March 12, 2020 for the second instalment provided to Company of $936,168.~~Everlast;

On2. ~~March~~Interest ~~12,~~on ~~2020,~~royalty ~~the~~payments ~~Company~~computed ~~received~~through ~~the~~October ~~second~~15, ~~instalment of $936~~2020,~~168~~ ~~which~~in ~~represented~~ the ~~interest~~sum ~~payments~~of ~~withheld on November 6~~$242, ~~2019 for interest payments up to and including June 30, 2020.~~920;

~~On June~~ 3,. ~~2020,~~Costs ~~effective~~and asattorneys’ ~~of May~~fees ~~31,~~in ~~2020,~~ the ~~Company~~sum ~~entered into that certain Third Amendment to Convertible Promissory Notes (“Third Amendment”), with Fengate Trident LP, the holder~~ of ~~the Notes (the “Note Holder”).~~ $71,026

The ~~Third~~Company ~~Amendment~~has ~~extended~~fully accrued the ~~Maturity~~$738,946 ~~Dates~~liability (as ~~defined) from August 31, 2020 until December 31, 2020~~ of ~~the~~November ~~following Convertible Promissory Notes (aggregate principal amount of $12~~30,~~300,000)~~ ~~(the “Notes”), as follows:~~2020.

•Banc ~~Convertible Promissory Note dated February 5, 2015 in the principal amount~~ of ~~$1,800,000~~America •Leasing ~~Convertible~~and ~~Promissory~~Capital Note dated May 14, 2015 in the principal amount of $500,000 • Convertible Promissory Note dated September 26, 2016 in the principal amount of $4,100,000 • Convertible Promissory Note dated May 9, 2017 in the principal amount of $4,400,000 • Convertible Promissory Note dated May 16, 2018 in the principal amount of $1,500,000

~~Except~~On asDecember ~~modified~~1, by2020, ~~the~~Bank ~~Third~~of ~~Amendment~~America Leasing and Capital, LLC filed a legal action against the ~~Notes~~Company in the Superior Court for the State of California, asCounty ~~previously~~of ~~amended~~San Mateo (Case NO. 20-CIV-05306), ~~remain~~alleging breach of contract. The claim arises out of a software services contract between the Company and Oracle Corporation. Bank of America Leasing and Capital, LLC acquired Oracle’s rights under the agreement. The plaintiff claims the Company is liable for damages in ~~full~~the ~~force~~amount of $217,000 plus interests and ~~effect~~costs. The Company has not filed an answer to this complaint. On February 22, 2021, the plaintiff requested that the Court enter a default judgment against the Company. The Company intends to engage counsel and defend against this claim.

~~Management~~PIT ~~Changes~~Mycell

On ~~February~~June 293, ~~2020~~2019, ~~Mark~~the RCompany filed a lawsuit against PIT Mycell, LLC, William E. ~~Holcombe~~Peterson ~~resigned~~III, asNew aAge ~~director~~Ventures, ofLLC, Volker Berl, and Mycell Technologies, LLC (“Mycell”) in the ~~company.~~Superior ~~Mr.~~Court ~~Holcombe~~in ~~will~~Bergen ~~continue~~County, toNew ~~provide~~Jersey, ~~business~~Civil ~~advisory~~Action ~~services~~No. toBER-L-004198-19, in which the Company, ~~pursuant~~seeks to ~~his~~require ~~agreement~~the ~~with~~defendants to perform under and allow the enforcement of certain notes made by Mycell and acquired by the Company in September 2017. OnThe notes are past their stated maturity date of December 31, 2016. The Company also alleges that the parties had entered into a written Settlement Agreement Letter of Intent dated March 114, ~~2020~~2019 (the ~~Company’s~~“Settlement”), ~~Board~~but that the defendants repudiated it shortly thereafter. The notes had been the subject of ~~Directors~~an ~~appointed~~earlier ~~Richard~~lawsuit ~~Russell~~in toVirginia ~~serve~~in onstate court in Fairfax County between the Company’s ~~Board~~and ofPIT ~~Directors~~Mycell, LLC that the Settlement was intended to ~~serve~~resolve. The Company seeks to enforce the notes and the Settlement in ~~such~~the ~~capacity~~New ~~until~~Jersey lawsuit and requests actual damages in an amount to be proven at trial, attorneys’ fees and litigation costs, specific performance requiring certain defendants to enforce obligations under the ~~next~~notes ~~annual~~against ~~meeting~~Mycell, ofspecific ~~stockholders~~performance ofrequiring the ~~Company~~defendants to execute a final Settlement Agreement consistent with the Settlement, ~~subject~~an order permitting foreclosure on the collateral for the notes, and declaratory relief. On January 24, 2020, the New Jesey court denied Defendant’s Motions to ~~earlier~~dismiss ~~resignation~~the orcase. ~~removal~~The parties have engaged in written discovery and exchanged productions of documents. Mycell filed for bankruptcy on November 25, 2020.

In15 ~~connection~~Table ~~with his appointment, the Company’s Board~~ of Directors determined that Mr. Russell would meet the requirements of an “independent director” under the Nasdaq Stock Market’s corporate governance rules. Accordingly, the Board of Directors has designated Mr. Russell an “independent director” for corporate governance purposes. The Company intends to expand its Board of Directors and appoint additional “independent directors,” with the objective of enhancing corporate governance.Contents

OnITEM ~~September~~2. ~~16,~~MANAGEMENT'S ~~2020,~~DISCUSSION ~~Mark~~AND ~~Cluett~~ANALYSIS ~~resigned~~OF asFINANCIAL ~~the~~CONDITIONS ~~Chief~~AND ~~Operating~~RESULTS ~~Officer~~OF ~~of Trident Brands Incorporated.~~OPERATIONS

OnForward ~~September~~Looking ~~24, 2020, Pamela Andrews was appointed as Managing Director of the Company's Brain Armor brand of neuro-nutrition supplements.~~Statements

~~Legal~~The ~~Proceedings~~following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the interim consolidated financial statements, and notes thereto, for the quarter ended February 28, 2021 contained under Item 1 of this Quarterly Report on Form 10-Q (“Form 10-Q”) and in conjunction with the annual consolidated financial statements, and notes thereto, contained in the Annual Report on Form 10-K for the fiscal year ended November 30, 2020 (“Form 10-K”). Unless otherwise indicated herein, the discussion and analysis contained in this MD&A includes information available through April 19, 2021.

OnCertain ~~October~~statements 15contained in this MD&A may constitute forward-looking statements as defined under securities laws. Forward-looking statements may relate to our future outlook and anticipated events or results and may include statements regarding our future financial position, ~~2020~~business strategy, ~~the~~budgets, ~~Court~~litigation, inprojected ~~the~~costs, ~~Everlast~~capital ~~case~~expenditures, ~~ordered~~financial results, ~~adjudged~~taxes, plans and ~~decreed~~objectives. ~~that~~In ~~Plaintiff~~some ~~Everlast~~cases, ~~World’s~~forward-looking ~~Boxing~~statements ~~Headquarters~~can ~~Corporation~~be ~~have~~identified ~~judgment~~by ~~and~~terms ~~recover~~ such as “anticipate”, “estimate”, “intend”, “project”, “potential”, “continue”, “believe”, “expect”, “could”, “would”, “should”, “might”, “plan”, “will”, “may”, “predict”, the ~~following~~negatives ~~sums~~of ~~from~~such terms, and other similar expressions concerning matters that are not historical facts. To the ~~Company:~~extent any forward-looking statements contain future-oriented financial information or financial outlooks, such information is being provided to enable a reader to assess our financial condition, material changes in our financial condition, our results of operations, and our liquidity and capital resources. Readers are cautioned that this information may not be appropriate for any other purpose, including investment decisions.

1Forward-looking statements contained in this MD&A are based on certain factors and assumptions regarding expected growth, results of operations, performance, and business prospects and opportunities. ~~$425~~While we consider these assumptions to be reasonable,~~000~~ ~~representing~~based ~~royalty~~on ~~payments~~information ~~due~~currently available, they may prove to ~~Plaintiff;~~be incorrect. Forward-looking statements are also subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what we currently expect. These factors are more fully described in the “Risk Factors” section at Item 1A of the Form 10-K.

2.Forward-looking ~~Interest~~statements oncontained ~~royalty~~in ~~payments~~this ~~computed~~commentary toare ~~October~~based 15on our current estimates, ~~2020~~expectations and projections, inwhich we believe are reasonable as of the ~~sum~~date of ~~$242~~this report. You should not place undue importance on forward-looking statements and should not rely upon this information as of any other date. Other than as required under securities laws,~~920;~~ we do not undertake to update any forward-looking information at any particular time.

3.All ~~Costs~~dollar amounts in ~~the~~this ~~sum~~MD&A are expressed in thousands of ~~$800;~~U.S. ~~and~~dollars unless otherwise noted.

4.Business ~~Attorneys’ fees in the sum of $70,226; making in total the sum of $738,946 payable by the Company to Everlast.~~Developments

15Management ~~Table of Contents~~Changes

~~Results~~Legal ~~of Operations~~ Proceedings

~~The~~Results ~~following summary~~ of ~~our~~Operations ~~results of operations should be read in conjunction with our unaudited consolidated financial statements for the three month periods ended August 31, 2020 and 2019.~~

~~Our~~The ~~operating~~following summary of our results of operations should be read in conjunction with our unaudited consolidated financial statements for the three month periods ended ~~August~~February 3128, ~~2020~~2021 and ~~2019~~February ~~are~~29, ~~summarized as follows:~~2020.

	Three Months Ended August 31, 2020			Three Months Ended August 31, 2019
Revenues	$	273,044			342,109
Gross Profit	$	107,728		$	102,462
Operating Expenses	$	962,341		$	1,499,845
Other Expenses	$	11,846,356		$	746,749
Net Loss	$	(12,700,969	)	$	(2,144,132	)
Add back:
Interest Expense	$	833,040		$	983,745
Depreciation	$	222		$	2,095
Amortization	$	-0-		$	-0-
EBITDA	$	(11,867,707	)	$	(1,158,292	)
Add back:
Stock Options Expense	$	-0-		$	-0-
Derivative Loss (Gain)	$	11,013,316		$	(236,996	)
Adjusted EBITDA	$	(854,391	)	$	(1,395,288	)

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~~Revenues~~Our operating results for three month periods ended February 28, 2021 and ~~Gross~~February ~~Profits~~29, 2020 are summarized as follows:

Sales in the third quarter of 2020 decreased to $273,044 versus $342,109 in the prior period. The decrease was the result of the negative impact of the COVID-19 pandemic on our supply chain and customer purchasing patterns coupled with a significant opening fill order from a large retail trading partner in the prior period. Gross profit increased to $107,728 versus $102,462 with an increase in average margin in the period to 39.5% of revenues versus 30.0% of revenues in the prior period. This is attributable to the impact of high margin Brain Armor® and P2N Peak Performance Nutrition® branded product revenue. Subject to receipt of additional funding which will be used in part for further sales and marketing initiatives, Management expects revenue and profit contribution improvement as commercial efforts continue to gain traction and market conditions normalize. COVID-19 has thus far adversely affected our revenues and our ability to raise additional capital, so there is no assurance we will be able to grow our business or raise sufficient additional capital on acceptable terms or at all.

	Three Months Ended			Three Months Ended
	February 28,			February 29,
	2021			2020

Revenues	$	144,048		$	161,885
Gross Profit	$	65,260		$	76,956
Operating Expenses	$	404,284		$	1,313,734
Other Expenses	$	200,333		$	3,019,401
Net Loss	$	(539,357	)	$	(4,256,179	)

Add back:
Interest Expense	$	200,333		$	1,446,688
Depreciation	$	-0-		$	2,096
Amortization	$	-0-		$	-0-

EBITDA	$	(339,024	)	$	(2,807,395	)

Add back:
Derivative Loss	$	-0-		$	1,572,713

Adjusted EBITDA	$	(339,024	)	$	(1,234,682	)

1617 Table of Contents

~~Operating~~Revenues ~~Expenses~~and Gross Profits

~~Our~~Sales ~~operating~~in ~~expenses~~the ~~for~~first ~~the~~quarter ~~three~~of ~~month~~2021 ~~period~~decreased ~~ended~~to ~~August~~$144,048 31versus $161,885 ~~2020~~in ~~and August~~the 31prior period. The decrease was the result of the inability to fulfill various purchase orders due to out of stock (OOS) of certain SKU’s. Gross profit decreased to $65,260 ~~2019~~(45.3% isof ~~summarized~~revenues) ~~below:~~versus $76,956 (47.5% of revenues).

	Three Months Ended August 31, 2020		Three Months Ended August 31, 2019
Professional Fees	$	178,164	$	58,835
General & Administrative Expenses	$	550,875	$	937,802
Marketing, Selling & Warehousing Expenses	$	183,903	$	435,576
Management Salary	$	41,125	$	38,250
Director’s Fees	$	-0-	$	6,500
Rent	$	8,274	$	22,882
Total Operating Expenses	$	962,341	$	1,499,845

Operating Expenses

~~Operating~~Our operating expenses for the three month period ended ~~August~~February 3128, ~~2020~~2021 ~~were $962,341 as compared to $1,499,845 for the comparative period in 2019, a decrease of 35.8%. The decrease in our operating expenses was primarily due to a decrease in general administration~~ and ~~marketing~~February ~~and selling expenses related to our cost control efforts during this COVID-19 period~~29, ~~partially~~2020 ~~offset by an increase in professional fees. Management expects operating expenses to increase as revenue~~ is ~~expected~~summarized tobelow: ~~gain traction and market conditions normalize.~~

Other Expenses

	Three Months Ended February 28,		Three Months Ended February 29,
	2021		2020
Professional Fees	$	13,649	$	159,608
General & Administrative Expenses	$	324,946	$	854,029
Marketing, Selling & Warehousing Expenses	$	27,030	$	244,827
Management Salary	$	37,500	$	38,250
Rent	$	1,159	$	17,020

~~Other~~Operating expenses for the three month period ended ~~August~~February 3128, ~~2020~~2021 were $11404,~~846,356~~284 as compared to $~~746~~1,~~749~~313,734 for the comparative period in ~~2019~~2020, a decrease of 69.2%. The ~~increase~~decrease in ~~other~~our operating expenses was primarily due to ana ~~increase~~decrease in ~~non-cash~~general ~~derivative~~& ~~loss~~administrative ofexpenses ~~$11,250,312~~as ~~(on~~a ~~the~~result ~~revaluation~~ of ~~the~~cost ~~embedded~~reductions ~~conversion option of all the convertible notes),~~ and ~~a $119,828 increase~~ in ~~interest~~marketing ~~expense~~and ~~(related~~selling toexpenses ~~higher debt levels), partially offset by a $270,533 decrease in non-cash interest expense (~~related to the ~~impact~~decrease ~~of the amortization of debt discount from convertible notes entered into~~ in ~~2016 and 2018)~~sales. ~~Management~~Legal ~~expects interest~~ expenses ~~and~~also ~~amortization~~decreased ofby ~~debt discount to remain constant. Derivative loss or gain will depend on the stock price~~$139, ~~volatility factor and interest rates at the end of the quarter~~000.

~~Non-GAAP~~Other ~~Financial Measure~~ Expenses

~~The~~Other ~~following~~expenses ~~non-GAAP~~for ~~financial~~the ~~measures~~three ~~are~~month ~~presented~~period ended February 28, 2021 in ~~this~~the ~~quarterly~~amount ~~report~~of on$200,333 ~~Form~~consisted 10of interest expense. This compared to $3,019,401 in the comparative period in 2020 which consisted of interest expense of $248,734; non-Qcash interest expense of $1,199,797 related to ~~supplement~~the impact of the ~~financial~~amortization ~~information~~of wedebt ~~present~~discount onfrom aconvertible ~~GAAP~~notes ~~basis.~~entered Weinto ~~monitor~~in 2016, 2017 and ~~present~~2018; ~~EBITDA~~interest revenue of 1,843, and ~~Adjusted~~non-cash ~~EBITDA~~derivative ~~because~~loss ~~they~~of ~~are~~$1,572,713 ~~key~~on ~~measures~~the ~~used~~revaluation byof ~~our~~the ~~management~~embedded toconversion ~~understand~~option ~~and~~of ~~evaluate~~all ~~our~~the ~~performance~~convertible notes.

~~EBITDA~~Non-GAAP Financial Measure

WeThe ~~define~~following ~~EBITDA~~non-GAAP asfinancial ~~net~~measures ~~income~~are ~~(loss),~~presented ~~adjusted~~in tothis ~~exclude:~~quarterly ~~Interest~~report ~~income~~on ~~and~~Form ~~expense,~~10-Q ~~taxes,~~to ~~depreciation~~supplement ~~and amortization expense including impairment loss. Reported net loss for~~ the ~~three~~financial ~~month~~information ~~period~~we ~~August~~present ~~31,~~on ~~2020~~a ~~was~~GAAP ~~$12,700,969 compared to $2,144,132 in the comparative period in 2019~~basis. ~~After~~We ~~deducting~~monitor ~~interest, depreciation~~ and ~~amortization,~~present EBITDA ~~for~~and ~~the~~Adjusted ~~three~~EBITDA ~~month~~because ~~period~~they ~~ended~~are ~~August~~key ~~31,~~measures ~~2020~~used ~~was~~by ~~($11,867,707)~~our ~~compared~~management to ~~($1,158,292)~~understand inand ~~2019~~evaluate our performance.

~~Adjusted~~ EBITDA

We define ~~Adjusted~~ EBITDA as ~~EBITDA~~net income (loss), adjusted to exclude: ~~stock~~Interest ~~options~~income and expense, depreciation and ~~derivative~~amortization expense including impairment loss. Reported ~~EBITDA~~net loss for the three month period ~~August~~February 3128, ~~2020~~2021 was ($11539,~~867,707)~~357 compared to ($14,~~158~~256,~~292)~~179 in the comparative period in ~~2019~~2020. After deducting ~~non-cash~~interest, ~~stock~~depreciation ~~options expense~~ and ~~derivative loss~~amortization, ~~Adjusted~~ EBITDA for the three month period ended ~~August~~February 3128, ~~2020~~2021 was ($~~854~~339,~~391~~024) compared to ($12,~~395~~807,~~288~~395) in ~~2019~~2020.

17Adjusted ~~Table of Contents~~EBITDA

~~Nine~~We ~~Month~~define ~~Periods~~Adjusted ~~Ended~~EBITDA ~~August~~as 31EBITDA, adjusted to exclude: stock options expense and derivative loss. Reported EBITDA for the three month period February 28, 2021 was ($339,024) compared to ($2,807,395) in the comparative period in 2020. After deducting non-cash stock options expense and ~~August~~derivative 31loss, ~~2019~~Adjusted EBITDA for the three month period ended February 28, 2021 was ($339,024) compared to ($1,234,682) in 2020.

~~Our~~18 ~~operating~~Table ~~results~~of ~~for nine month periods ended August 31, 2020 and August 31, 2019 are summarized as follows:~~Contents

	Nine Months Ended August 31, 2020			Nine Months Ended August 31, 2019
Revenues	$	679,031		$	1,737,264
Gross Profit	$	261,546		$	600,791
Operating Expenses	$	3,395,631		$	5,511,730
Other Expenses	$	23,885,505		$	4,219,228
Net Loss	$	(27,019,590	)	$	(9,130,167	)
Add back:
Interest Expense	$	3,280,847		$	2,965,106
Depreciation	$	4,413		$	6,286
Amortization	$	-0-		$	-0-
EBITDA	$	(23,734,330	)	$	(6,158,775	)
Add back:
Stock Options Expense	$	-0-		$	380,751
Derivative Loss	$	20,614,658		$	1,254,122
Adjusted EBITDA	$	(3,119,672	)	$	(4,523,902	)

Balance Sheet Data

~~Revenues~~The following table provides selected balance sheets data as at February 28, 2021 and ~~Gross~~February ~~Profits~~29, 2020.

Sales in the first nine months of fiscal 2020 decreased to $679,031 versus $1,737,264 in the prior period. In addition to the negative impact of the COVID-19 pandemic on third fiscal quarter revenue, the decrease was the result of a commercial shift away from high-volume private label product sales to high-margin branded product sales in the period. Gross profit decreased to $261,546 versus $600,791, with margin improvement in the period to 38.5% of revenues versus 34.6% of revenues in the prior period. Subject to receipt of additional funding which will be used in part for further sales and marketing initiatives, Management expects revenue and profit contribution improvement as commercial efforts continue to gain traction and market conditions normalize. COVID-19 has thus far adversely affected our revenues and our ability to raise additional capital, so there is no assurance we will be able to grow our business or raise sufficient additional capital on acceptable terms or at all.

Balance Sheet Data:	February 28, 2021			February 29, 2020

Cash and cash equivalents	$	48,932		$	230,682
Total assets	$	1,775,926		$	2,926,555
Total liabilities	$	30,733,766		$	35,700,388
Stockholders' (deficit)	$	(28,957,840	)	$	(32,773,832	)

18Strategic ~~Table~~Orientation ~~of Contents~~

~~Operating~~Our ~~Expenses~~objective is to provide our shareholders with solid returns through strategic investments across multiple consumer product and ingredient platforms. The platforms we are focusing on include:

~~Our~~● ~~operating~~Life ~~expenses~~science ~~for~~technologies ~~the~~and ~~nine~~related ~~month~~products ~~period~~that ~~ended~~have ~~August~~applications ~~31,~~to ~~2020~~a range of consumer products; ● Nutritional supplements and ~~August~~related ~~31,~~consumer ~~2019~~goods isproviding ~~summarized~~defined ~~below:~~benefits to the consumer; and ● Functional foods and beverages ingredients with defined health and wellness benefits.

	Nine Months Ended August 31, 2020		Nine Months Ended August 31, 2019
Professional Fees	$	458,007	$	690,244
General & Administrative Expenses	$	2,027,493	$	3,293,136
Marketing, Selling & Warehousing Expenses	$	755,287	$	1,267,103
Management Salary	$	114,500	$	115,500
Director’s Fees	$	-0-	$	29,500
Rent	$	40,344	$	116,247
Total Operating Expenses	$	3,395,631	$	5,511,730

We are building our business through strategic investments in high growth early stage consumer brands and functional ingredient platforms within segment/sectors which we believe offer sustainable commercial potential. We are focused on three core strategies underpinning our objectives:

~~Operating~~● ~~expenses~~To ~~for~~execute ~~the~~a ~~nine~~multi-tier ~~month period ended August 31~~brand, ~~2020~~supply-chain ~~were~~and ~~$3,395,631~~innovation asstrategy ~~compared~~ to ~~$5,511,730~~drive ~~for~~revenue; ~~the~~● ~~comparative~~To ~~period~~aggressively inmanage ~~2019,~~an aasset ~~decrease~~light ofbusiness ~~38.4%.~~model ~~The~~to ~~decrease~~drive in our ~~operating~~low ~~expenses~~cost ~~was~~platform; ~~primarily due to a decrease in legal expenses of $247,599, a decrease in non-cash options expense of $380,751~~ and a● ~~decrease~~To indrive ~~general~~disciplines ~~administration~~leading ~~and marketing and selling expenses related~~ to ~~our~~increased ~~cost~~investor ~~control~~awareness ~~efforts~~and ~~during~~ability ~~this COVID-19 period. Management expects operating expenses~~ to ~~increase~~finance ~~as revenue is expected to gain traction~~ and ~~market~~govern ~~conditions~~growing ~~normalize~~operations.

~~Other~~While ~~Expenses~~we have yet to achieve profitability, we are making significant progress against our commercial objectives. We expect revenue and margin to increase as we continue to strengthen distribution partnerships while capitalizing on product innovation, supply-chain optimization and brand equity within our current portfolio.

~~Other~~Liquidity expenses for the nine month period ended August 31, 2020 were $23,885,505, compared to $4,219,228 in the comparative period in 2019, an increase of 466.1%. The increase in other expenses was primarily due to an increase in non-cash derivative loss of $19,360,536 (on the revaluation of the embedded conversion option of all the convertible notes), and aCapital $483,462 increase in interest expense (related to higher debt levels), partially offset by a $167,721 decrease in non-cash interest expense (related to the impact of the amortization of debt discount from convertible notes entered into in 2016 and 2018). Management expects interest expense and amortization of debt discount to remain constant. Derivative loss or gain will depend on the stock price, volatility factor and interest rates at the end of the quarter.Resources

~~Non~~The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are issued. In accordance with Financial Accounting Standards Board, or the FASB, Accounting Standards Update No. 2014-~~GAAP~~15, Presentation of Financial ~~Measure~~Statements - Going Concern (Subtopic 205-40), our management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued.

~~The~~As ~~following~~of ~~non-GAAP~~February ~~financial~~28, ~~measures~~2021, ~~are~~the ~~presented~~Company had $48,932 in ~~this~~cash ~~quarterly~~and ~~report~~a onworking ~~Form~~capital ~~10-Q~~deficit toof ~~supplement~~$6,922,675. ~~the~~The ~~financial~~Company ~~information~~also wehas ~~present~~generated onlosses aand ~~GAAP~~has ~~basis~~an accumulated deficit as of February 28, 2021. WeThese ~~monitor~~factors ~~and~~raise ~~present~~substantial ~~EBITDA~~doubt ~~and~~about ~~Adjusted~~the ~~EBITDA~~ability ~~because~~of ~~they~~the ~~are~~Company ~~key~~to ~~measures~~continue ~~used~~as bya ~~our~~going concern. Unless management is able to ~~understand~~obtain ~~and~~additional ~~evaluate~~financing, ~~our~~the ~~performance~~Company may not be able to meet its funding requirements during the next 12 months. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~EBITDA~~19 Table of Contents

WeOff-Balance ~~define~~Sheet EBITDA as net income (loss), adjusted to exclude: Interest income and expense, taxes, depreciation and amortization expense including impairment loss. Reported net loss for the nine month period August 31, 2020 was $27,019,590 compared to $9,130,167 in the comparative period in 2019. After deducting interest, depreciation and amortization, EBITDA for the nine month period ended August 31, 2020 was ($23,734,330) compared to ($6,158,775) in 2019.Arrangements

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

WeContractual define Adjusted EBITDA as EBITDA, adjusted to exclude stock options expense and derivative loss. Reported EBITDA for the nine month period August 31, 2020 was ($23,734,330) compared to ($6,158,775) in the comparative period in 2019. After deducting non-cash stock options expense and derivative loss, Adjusted EBITDA for the nine month period ended August 31, 2020 was ($3,119,672) compared to ($4,523,902) in 2019. Obligations

19Except ~~Table~~for the transactions noted in Business Developments, there have been no material changes outside the normal course of ~~Contents~~business in our contractual obligations since January 3, 2015.

~~Balance~~Critical ~~Sheet~~Accounting ~~Data~~Estimates

The ~~following~~preparation ~~table~~of ~~provides~~financial ~~selected~~statements ~~balance~~in ~~sheet~~conformity ~~data~~with asU.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, related revenues and expenses, and disclosure of gain and loss contingencies at ~~August~~the 31date of the financial statements. The estimates and assumptions made require us to exercise our judgment and are based on historical experience and various other factors that we believe to be reasonable under the circumstances. We continually evaluate the information that forms the basis of our estimates and assumptions as our business and the business environment generally changes. The use of estimates is pervasive throughout our financial statements. There have been no material changes to the critical accounting estimates disclosed under the heading “Critical Accounting Estimates” in Item 7, ~~2020~~“Management’s Discussion and ~~August~~Analysis 31of Financial Condition and Results of Operations”, ~~2019.~~of the Form 10-K.

Balance Sheet Data:	August 31, 2020			August 31, 2019
Cash and cash equivalents	$	82,658		$	352,982
Total assets	$	2,538,488		$	3,370,232
Total liabilities	$	58,075,731		$	24,819,039
Stockholders’ (deficit)	$	(55,537,243	)	$	(21,448,807	)

Strategic Orientation

Our objective is to provide our shareholders with solid returns through strategic investments across multiple consumer product and ingredient platforms. The platforms we are focusing on include:

● Life science technologies and related products that have applications to a range of consumer products; ● Nutritional supplements and related consumer goods providing defined benefits to the consumer; and ● Functional foods and beverages ingredients with defined health and wellness benefits.

● To execute a multi-tier brand, supply-chain and innovation strategy to drive revenue; ● To aggressively manage an asset light business model to drive our low cost platform; and ● To drive disciplines leading to increased investor awareness and ability to finance and govern growing operations.

While we have yet to achieve profitability, we believe are making significant progress against our commercial objectives. Subject to receipt of additional funding, which will be used in part for further sales and marketing initiatives, we expect revenue and margin to increase as we continue to strengthen distribution partnerships while capitalizing on product innovation, supply-chain optimization and brand equity within our current portfolio. COVID-19 has thus far adversely affected our revenues and ability to raise additional capital, so there is no assurance we will be able to grow our business or raise sufficient additional capital on acceptable terms or at all.

Liquidity and Capital Resources

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are issued. In accordance with Financial Accounting Standards Board, or the FASB, Accounting Standards Update No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40), our management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued.

As of August 31, 2020, the Company had $82,658 in cash and a working capital deficit of $47,165,954. The Company also has generated losses and has an accumulated deficit of $61,174,666 as of August 31, 2020. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The Company completed additional long term financing with a non-US institutional investor, receiving proceeds of $3,400,780 on November 30, 2018, $2,804,187 on April 13, 2019 and $3,795,033 on November 6, 2019. However, unless management is able to obtain additional financing, the Company may not be able to meet its funding requirements during the next 12 months. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

20 Table of Contents

On May 28, 2020, we obtained a $135,165 unsecured loan payable through the Paycheck Protection Program (“PPP”), which was enacted as part of the Coronavirus Aid, Relief and Economic Security Act (the “CARES ACT”). The funds were received from Bank of America through a loan agreement pursuant to the CARES Act. The CARES Act was established in order to enable small businesses to pay employees during the economic slowdown caused by COVID-19 by providing forgivable loans to qualifying businesses for up to 2.5 times their average monthly payroll costs. The amount borrowed under the CARES Act and used for payroll costs, rent, mortgage interest, and utility costs during the 24 week period after the date of loan disbursement is eligible to be forgiven provided that (a) we use the PPP Funds during the eight week period after receipt thereof, and (b) the PPP Funds are only used to cover payroll costs (including benefits), rent, mortgage interest, and utility costs. While the full loan amount may be forgiven, the amount of loan forgiveness will be reduced if, among other reasons, we do not maintain staffing or payroll levels or less than 60% of the loan proceeds are used for payroll costs. Principal and interest payments on any unforgiven portion of the PPP Funds (the “PPP Loan”) will be deferred to the date the SBA remits the borrower’s loan forgiveness amount to the lender or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness period for six months and will accrue interest at a fixed annual rate of 1.0% and carry a two year maturity date. There is no prepayment penalty on the CARES Act Loan.

We are currently experiencing an increasing working capital deficiency. As of August 31, 2020, we had a working capital deficit of approximately $47.2 million, compared to a deficit of approximately $18.3 million as of November 30, 2019. The approximate $28.9 million increase in our working capital deficit was due primarily to (all amounts approximate) a $931,000 decrease in cash, a $2.6 million increase in accrued liabilities, a $335,000 increase in convertible debt and a $24.6 million increase in derivative liability.

Currently, we anticipate that our baseline operating activities will use approximately $300,000 in cash per month over the next twelve months, or approximately $3.6 million. However, based on our current business plan, subject to completion of a planned capital raise, we intend to expend at least an additional $400,000 per month ($4.8 million annually) on an expansion of our sales and marketing initiatives. Currently we have limited cash on hand, and consequently, we are unable to fully implement our current business plan. Accordingly, we have an immediate need for additional capital to fund our operating activities. COVID-19 has thus far adversely affected our revenues and our ability to raise additional capital, so there is no assurance we will be able to grow our business or raise sufficient additional capital on acceptable terms or at all.

In order to remedy this liquidity deficiency, we are actively seeking to raise additional funds through the sale of equity and debt securities, and ultimately, we will need to generate substantial positive operating cash flows. Our internal sources of funds will consist of cash flows from operations, but not until we begin to realize additional revenues from the sale of our products and services. As previously stated, our operations are generating negative cash flows, and thus adversely affecting our liquidity. If we are able to secure sufficient funding in the near term to fully implement our business plan, we expect that our operations could begin to generate significant cash flows during the middle of 2021, which should ameliorate our liquidity deficiency. If we are unable to raise additional funds in the near term, we will not be able to implement our business plan, in which case there would be a material adverse effect on our results of operations and financial condition.

In the event we do not generate sufficient funds from revenues or financing through the issuance of common stock or from debt financing, we will be unable to fully implement our business plan and pay our obligations as they become due, any of which circumstances would have a material adverse effect on our business prospects, financial condition, and results of operations. The accompanying financial statements do not include any adjustments that might be required should we be unable to recover the value of our assets or satisfy our liabilities.

Based on our limited availability of funds we expect to spend minimal amounts on product development, sales and marketing and capital expenditures. We expect to fund any future product development expenditures through a combination of cash flows from operations and proceeds from equity and/or debt financing. If we are unable to generate positive cash flows from operations, and/or raise additional funds (either through debt or equity), we will be unable to fund our product development expenditures, in which case, there could be an adverse effect on our business and results of operations.

21 Table of Contents

Cash Flows

	Nine months ended August 31,
	2020			2019
Net cash used in operating activities	$	(2,002,349	)	$	(5,596,957	)
Net cash provided by investing activities	$	-0-		$	12,449
Net cash provided by financing activities	$	1,071,333		$	2,804,187
Change in cash	$	(931,016	)	$	(2,780,321	)

Operating Activities

Cash used in operating activities was (all amounts approximate) $2 million for the nine months ended August 31, 2020 (about $220,000 per month), compared to $5.6 million during the comparable prior period (about $620,000 per month). The approximate $3.6 million decrease in cash used by operating activities was due primarily to an increase in non-cash derivative loss of $19.3 million and a $2.6 million change in operating assets and liabilities (primarily accounts payable and accrued liabilities of $2.1 million and inventory of $700,000), partially offset by an $18 million increase in net loss.

Financing Activities

Cash provided by financing activities was (all amounts approximate) $1.1 million during the nine months ended August 31, 2020, compared to $2.8 million during the comparable prior period. The $1.7 million decrease in cash provided by financing activities related primarily to an approximate $1.9 million decrease in proceeds from convertible debt, partially offset by $135,000 in proceeds from the PPP loan.

Off-Balance Sheet Arrangements

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

Contractual Obligations

Except for the transactions noted in Business Developments, there have been no material changes outside the normal course of business in our contractual obligations.

Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, related revenues and expenses, and disclosure of gain and loss contingencies at the date of the financial statements. The estimates and assumptions made require us to exercise our judgment and are based on historical experience and various other factors that we believe to be reasonable under the circumstances. We continually evaluate the information that forms the basis of our estimates and assumptions as our business and the business environment generally changes. The use of estimates is pervasive throughout our financial statements. There have been no material changes to the critical accounting estimates disclosed under the heading “Critical Accounting Estimates” in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, of the Company's 2019 Form 10-K.

22 Table of Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company we are not required to provide this information.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and the principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective such that the material information required to be included in our Securities and Exchange Commission reports is accumulated and communicated to our management, including our principal executive and financial officer, recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, particularly during the period when this report was being prepared.

Management identified the following material weaknesses:

Insufficient Resources: We have an inadequate number of personnel with requisite expertise in the key functional areas of finance and accounting.

Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures.

Lack of Audit Committee Financial Expert & Outside Directors on the Company’s Board of Directors: We do not have a financial expert on our audit committee or a fully independent Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.

Changes in Internal Controls Over Financial Reporting

Our management, with the participation of our principal executive officer and principal financial officer have concluded that there have been no changes in our internal control over financial reporting that occurred during the fiscal quarter ended ~~August~~February 3128, ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

2320 Table of Contents

PART II. OTHER INFORMATION

~~Item~~ITEM 16. ~~Legal~~EXHIBITS. ~~Proceedings~~

OnThe ~~January~~following ~~11,~~exhibits ~~2019,~~are ~~the~~included ~~Company~~with ~~filed~~this aquarterly lawsuit against Everlast World’s Boxing Headquarters Corp. (“Everlast”) in the New York Supreme Court in New York County, New York. This action involved the Company seeking a declaration that it was entitled to terminate a License Agreement between the parties pursuant to which Trident had the right to market certain Everlast-branded products. Everlast subsequently removed that case to the U.S. District Court for the Southern District of New York.filing:

Exhibit No.		Description

3.1		Articles of Incorporation*

3.2		Bylaws*

31.1		Sec. 302 Certification of Chief Executive Officer

31.2		Sec. 302 Certification of Chief Financial Officer

32.1		Sec. 906 Certification of Chief Executive Officer

32.2		Sec. 906 Certification of Chief Financial Officer

101		Interactive data files pursuant to Rule 405 of Regulation S-T.

~~1. $425,000 representing royalty payments due to Plaintiff;~~__________

2.*Document ~~Interest~~is onincorporated ~~royalty~~by ~~payments~~reference ~~computed~~and tocan ~~October~~be 15found in its entirety in our Registration Statement on Form SB-2, ~~2020~~SEC File Number 333-148710, inat the ~~sum~~Securities ofand ~~$242,919;~~Exchange Commission website at www.sec.gov.

3.21 ~~Costs~~Table ~~in the sum~~ of ~~$800; and~~Contents

~~4. Attorneys’ fees in the sum of $70,226; making in total the sum of $738,946 payable by the Company to Everlast.~~SIGNATURES

~~The~~Pursuant ~~Clerk of Court was directed~~ to ~~close~~ the ~~case.~~requirements ~~The~~of ~~Company~~the ~~has~~Securities 30Exchange ~~days~~Act ~~from the date~~ of ~~judgement~~1934, ~~to appeal~~ the ~~case.~~Registrant ~~Management~~has ~~will~~duly ~~review~~caused ~~the~~this ~~judgement~~report ~~and~~to ~~explore~~be ~~all~~signed on its ~~options.~~behalf ~~The~~by ~~Company~~the ~~has accrued $425~~undersigned,~~000~~ ~~liability~~thereunto asduly ~~of August 31, 2020~~authorized.

On June 3, 2019, the Company filed a lawsuit against PIT Mycell, LLC, William E. Peterson III, New Age Ventures, LLC, Volker Berl, and Mycell Technologies, LLC (“Mycell”) in the Superior Court in Bergen County, New Jersey, Civil Action No. BER-L-004198-19, in which the Company seeks to require the defendants to perform under and allow the enforcement of certain notes made by Mycell and acquired by the Company in September 2017. The notes are past their stated maturity date of December 31, 2016. The Company also alleges that the parties had entered into a written Settlement Agreement Letter of Intent dated March 14, 2019 (the “Settlement”), but that the defendants repudiated it shortly thereafter. The notes had been the subject of an earlier lawsuit in Virginia in state court in Fairfax County between the Company and PIT Mycell, LLC that the Settlement was intended to resolve. The Company seeks to enforce the notes and the Settlement in the New Jersey lawsuit and requests actual damages in an amount to be proven at trial, attorneys’ fees and litigation costs, specific performance requiring certain defendants to enforce obligations under the notes against Mycell, specific performance requiring the defendants to execute a final Settlement Agreement consistent with the Settlement, an order permitting foreclosure on the collateral for the notes, and declaratory relief.

	Trident Brands Incorporated

April 19, 2021	By:	/s/ Anthony Pallante
		Anthony Pallante
		(Chief Executive Officer & Chair of the Board)

	By:	/s/ Peter Salvo
		Peter Salvo
		(Principal Financial Officer)

	By:	/s/ Scott Chapman
		Scott Chapman
		(Director)

~~24 Table of Contents~~22

ITEM 6. EXHIBITS

The following exhibits are included with this quarterly filing:

Exhibit No.		Description
3.1		Articles of Incorporation*
3.2		Bylaws*
31.1		Sec. 302 Certification of Chief Executive Officer
31.2		Sec. 302 Certification of Chief Financial Officer
32.1		Sec. 906 Certification of Chief Executive Officer
32.2		Sec. 906 Certification of Chief Financial Officer

*Document is incorporated by reference and can be found in its entirety in our Registration Statement on Form SB-2, SEC File Number 333-148710, filed January 17, 2008, at the Securities and Exchange Commission website at www.sec.gov.

25 Table of Contents

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.

	Trident Brands Incorporated
Date: October 20, 2020	By:	/s/ Anthony Pallante
		Anthony Pallante
		(Chief Executive Officer & Chair of the Board)
	By:	/s/ Peter Salvo
		Peter Salvo
		(Principal Financial Officer)

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