TWO MANDS CORP MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

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Two Hands Corporation (the "Company") was incorporated in the state of Delaware
on April 3, 2009 and on July 26, 2016, changed its name from Innovative Product
Opportunities Inc. to Two Hands Corporation.



The Two Hands co-parenting application launched on July 2018 and the Two Hands
Gone application launched In February 2019. The Company ceased work on these
applications in 2021.



The gocart.city online consumer grocery delivery application was released in
early June 2020 and Cuore Food Services commenced sale of dry goods and produce
to other businesses in July 2020.



In July 2021, the Company made the strategic decision to focus exclusively on
the grocery market through three on-demand branches of its grocery businesses:
gocart.city, Grocery Originals, and Cuore Food Services. All three of such
branches of the Company's business share industry standard warehouse storage
space and inventory. The Company's inventory is updated continuously and
consists of produce, meats, pantry items, bakery & pastry goods, gluten-free
goods, and organic items, acquired from various different suppliers in Canada
and internationally, with whom the Company and its principals have cultivated
long-term relationships.



gocart.city

gocart.city is the Company's online delivery marketplace, allowing consumers to
shop online and have their groceries delivered. The gocart.city online platform
stores all inventory in the Company's warehouse located at its head office in
Mississauga. The aim of gocart.city is to deliver fresh and high-quality food
products directly to retail consumers throughout Southern Ontario. The Company
recently engaged local renowned chef, Grace DiFede, to curate a new line of meal
kits and bundles to sell on the gocart.city platform alongside the Company's
other grocery essentials.



The gocart.city platform is available online and through applications for
handheld devices supporting iOS or Android. The features and functions of
gocart.city include customers having the ability to search for products by
category and name, customers saving items in their cart and being able to share
their cart with others, and being able to opt-in to digital weekly alerts that
provide information on promotions and discounts on certain products. gocart.city
also includes standard payment options for customers, such as PayPal, American
Express and Visa.



The Company also employs a social media manager to oversee and increase
engagement with customers by using platforms such as Facebook, Twitter,
Instagram and Google. The ads that are posted on these platforms are generic
branding related to the Company, as well as the promotion of particular sale
items. Moreover, the Company has an agreement with SRAX, Inc. to boost such
engagement.



Grocery Originals

Grocery Originals is the Company's brick-and-mortar grocery store located in
Mississauga Ontario at the site of the Company's warehouse. Grocery Originals
was originally intended for curbside pickup but has expanded into a full service
store, that includes a deli, cold storage, a stone pizza oven, and offering a
wide variety of fresh and specialty meals curated by Grace Di Fede.



Cuore Food Services

Cuore Food Services is the Company's wholesale food distribution branch. Cuore
Food Services uses inventory from the Company's warehouse as well as inventory
it acquires on an ad hoc basis, and focuses on bulk delivery of goods to food
service business such as restaurants, hotels, event planning/hosting businesses.
Orders distributed through Cuore Food Services can be made over the phone or
online through a different front-end of the gocart.city platform.



The operations of the business are carried on by Two Hands Canada Corporation, a
wholly-owned subsidiary of the Company, incorporated under the laws of Canada on
February 7, 2014.


Management Operation Plan



The Company is focused exclusively on the grocery market through three on-demand
branches of its grocery businesses: gocart.city, Grocery Originals, and Cuore
Food Services.



The performance of the Company's business during the COVID-19 pandemic
illustrates the flexibility of its model as the Company was able to meet
heightened demand with an assortment of products that met customer preferences.
The Company is still early-on in its development but sees a highly scalable
business with lower corporate fixed costs, providing protection in the event of
an economic downturn.



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Products and Services


The company plans to continue to expand its reach to additional customers and geographies across Canada and continues to enrich its product offering with fresh, natural and organic foods.


Mobile Application


V2 of the gocart.city mobile application will be a later version. The Company plans to further expand the functionality of the mobile application. After the completion of V2 of the mobile application, the Company will review user behavior and plans to expand the functionality and features of the mobile application on an ongoing basis in the future.


Operations and Logistics


The company plans to expand storage and warehousing, increase warehouse staff, add more delivery trucks, and expand the delivery area.


Sales and Marketing


The Company plans on utilizing and leveraging its agreement with SRAX, Inc. to
market its grocery delivery application and services and expand its footprint in
the Ontario region and beyond as its customer base grows.



Significant Accounting Policies and Estimates



The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in
the Financial Statements and accompanying notes. Estimates are used for, but not
limited to, the accounting for the allowance for doubtful accounts, inventories,
impairment of long-term assets, stock-based compensation, income taxes and loss
contingencies. Management bases its estimates on historical experience and on
various other assumptions that are believed to be reasonable under the
circumstances. Actual results could differ from these estimates under different
assumptions or conditions.


We believe that the following critical accounting policies, among others, may be materially affected by the judgment, assumptions and estimates used in the preparation of the financial statements:


GOING CONCERN



The Company's financial statements are prepared in accordance with generally
accepted accounting principles applicable to a going concern. This contemplates
the realization of assets and the liquidation of liabilities in the normal
course of business. During the six months ended June 30, 2022, the Company
incurred a net loss of $17,701,158 and used cash in operating activities of
$506,838, and on June 30, 2022, had stockholders' deficit of $3,340,562. These
factors, among others, raise substantial doubt about the Company's ability to
continue as a going concern for a period one year from the date that the
financial statements are issued. The Company will be dependent upon the raising
of additional capital through placement of its common stock in order to
implement its business plan. There can be no assurance that the Company will be
successful in this situation. The Company is unable to predict the effect, if
any, that the coronavirus COVID-19 global pandemic may have on its access to the
financing markets. These financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or
amounts and classifications of liabilities that might result from this
uncertainty. We are currently funding our operations by way of cash advances
from our Chief Executive Officer, note holders, shareholders and others. On
April 14, 2022, the Company entered into a binding Grid Promissory Note and
Credit Facility Agreement (the "Line of Credit") with The Cellular Connection
Ltd. Pursuant to the Line of Credit, the Company can borrow from the Lender up
to CAD$750,000 in principal in increments of at least CAD$50,000 upon five
business days' notice. The funds due for repayment on May 1, 2024, and the
principal bears interest at 8% per annum, payable monthly. As at the date of
this Form 10-Q, no funds have been borrowed by the Company pursuant to the Line
of Credit. There can be no assurances that we will be able to receive further
commitments, loans or advances from them or other persons in the future.



STOCK-BASED COMPENSATION



The Company accounts for stock incentive awards issued to employees and
non-employees in accordance with FASB ASC 718, Stock Compensation. Accordingly,
stock-based compensation is measured at the grant date, based on the fair value
of the award. Stock-based awards to employees are recognized as an expense over
the requisite service period, or upon the occurrence of certain vesting events.
Additionally, stock-based awards to non-employees are expensed over the period
in which the related services are rendered.





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REVENUE RECOGNITION



In accordance with ASC 606, revenue is recognized when a customer obtains
control of promised goods or services. The amount of revenue recognized reflects
the consideration to which we expect to be entitled to receive in exchange for
these goods or services. The provisions of ASC 606 include a five-step process
by which we determine revenue recognition, depicting the transfer of goods or
services to customers in amounts reflecting the payment to which we expect to be
entitled in exchange for those goods or services. ASC 606 requires us to apply
the following steps: (1) identify the contract with the customer; (2) identify
the performance obligations in the contract; (3) determine the transaction
price; (4) allocate the transaction price to the performance obligations in the
contract; and (5) recognize revenue when, or as, we satisfy the performance
obligation. We recognize revenue for the sale of our products upon delivery
to a
customer.


RECENT ACCOUNTING PRONOUNCEMENTS

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other
Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own
Equity (Subtopic 815-40). This update amends the guidance on convertible
instruments and the derivatives scope exception for contracts in an entity's own
equity and improves and amends the related EPS guidance for both Subtopics. This
standard is effective for fiscal years and interim periods within those fiscal
years beginning after December 15, 2023, which means it will be effective for
our fiscal year beginning January 1, 2014. Early adoption is permitted but no
earlier than fiscal years beginning after December 15, 2020, including interim
periods within those fiscal years. We are currently evaluating the impact of ASU
2020-06 on our consolidated financial statements.



Other recent accounting pronouncements issued by the FASB, including its
Emerging Issues Working Groupthe American Institute of Chartered Accountantsand the Security and Exchange Commission did not have or are not considered by management to have a material effect on the current or future consolidated financial statements of the Company.

COMPARISON OF RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2022 AND 2021

Sales, Cost of Goods Sold, Gross Profit:


                         Three months ended June 30,               Change
                            2022               2021
                              $                 $              $             %
Sales                       190,691           174,774         15,917           9
Cost of goods sold          196,969           154,966         42,003          27
Gross profit (loss)          (6,278 )          19,808       (26,086)       (132)
Gross profit %                 (3.3 )%           11.3 %




Breakdown of sales by branch:

                                        Three months ended June 30,                   Change
                                          2022               2021
                                           $                   $                $               %
gocart.city - online delivery              54,677              48,585           6,092              13
Grocery Originals and Cuore Food
Service - retail and wholesale
distribution                              136,014             126,189           9,825               8
Total sales                               190,691             174,774          15,917               9




The gocart.city grocery delivery application was released in early June 2020 and
gocart.city wholesale commenced sale of dry goods and produce to other
businesses in July 2020. Our gross profit is less than expected due to the
expiry and write-off of inventory during the three months ended June 30, 2022.
We have carefully reviewed our inventory and do not expect further significant
write-offs for expired inventory during 2022. We expect our gross profit to
increase to 15% by December 31, 2022 as we reduce coupons to obtain new
customers.



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Operating expenses:

                                   Three months ended June 30,                Change
                                       2022
                                         $               2021$            $              %
Salaries and benefits                 13,571,665         53,800       13,517,865       25,126
Occupancy expense                         25,309          7,224           18,085          250
Advertising and travel                    19,169          9,670            9,499           98
Auto expenses                             11,739          5,778            5,961          103
Consulting                               282,145        260,231           21,914            8
Depreciation and Amortization                747            439              308           70
Design                                         0          9,713           (9,713 )       (100 )
Bad debt                                   9,328              0            9,328           -
Office and general expenses               21,478         81,560          (60,082 )        (74 )
Professional fees                         58,199         18,391           39,808          216
Freight and delivery                      21,484             -            21,484           -
Total operating expenses              14,021,263        446,806       13,574,457        3,038



Our total operating expenses for the three months ended June 30, 2022 has been
$14,021,263compared to $446,806 for the three months ended June 30, 2021, respectively. The increase in total operating expenses is mainly due to an increase in stock-based compensation paid to officers, directors and consultants.



Total operating expense includes stock-based compensation for the three months
ended June 30, 2022 and 2021 which comprises of 0 and 10,500 shares of common
stock issued valued at $0 and $21,000, respectively for consulting services.



Total operating expense also includes stock-based compensation for the three
months ended June 30, 2022 and 2021 which comprises of 90,000,000 and 8,000
shares of common stock issued valued at $13,500,000, and $16,000, respectively,
for salaries and compensation for our officers and directors.



Salaries and benefits for the three months ended June 30, 2022mainly include shares issued to Nadav Elituv, our managing director with a fair value of $13,500,000.



Salaries and benefits for the three months ended June 30, 2021, also includes
stock issued to officers and directors with a fair value of $16,000 and accrued
but unpaid salary to Nadav Elituv, our Chief Executive Officer, of $37,800.

Advertising and travel includes expenses for online advertising, website, meals and entertainment.



For the three months ended June 30, 2022, consulting comprises primarily
stock-based compensation expense (i) $143,184 for the expenditure of advertising
credits with SRAX, Inc. (ii) $65,445 for consulting fees and (iii) $73,473 paid
to contractors to manage our grocery business.



Professional fees comprise of audit, legal, filing fees and contract accountant.
The increase in professional fees is primarily due to legal fees related to the
prospectus dated April 21, 2022 filed with Ontario Securities Commission and
British Columbia Securities Commission and our listing application with the
Canadian Securities Exchange.



Other income (expense):

                                       Three months ended June 30,                   Change
                                          2022               2021
                                           $                  $                $               %
Amortization of debt discount
and interest expense                       (32,570 )         (61,068 )        28,498             (47 )
Loss on settlement of debt              (2,287,450 )      (1,517,348 )      (770,102 )            51
Initial derivative expense                      -            (14,206 )        14,206            (100 )
Change in fair value of
derivative liabilities                          -             32,511          32,511            (100 )
Total operating expenses                (2,320,020 )      (1,560,111 )      (759,909 )            49




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Amortization of debt discount and interest expense for the three months ended
June 30, 2022 was $32,570, compared to $61,067 for the three months ended June
30, 2021. Amortization of debt discount and interest expense relates to the
issuance of non-redeemable convertible notes, convertible notes and promissory
notes.



During the three months ended June 30, 2022 and 2021, the Company elected to
convert $1,840 and $102,264 of principal and interest of a non-redeemable
convertible note into 18,400,000 and 639,721 shares of common stock of the
Company resulting in a loss on settlement of debt of $2,287,450 and $1,517,348,
respectively.


Initial derivative charge of $14,206 for the three months ended June 30, 2021
represents the difference between the fair value of the total embedded derivative liability of $89,206 and money received from $75,000 for the convertible note issued on May 27, 2021.



During the three months ended June 30, 2022 and 2021, the gain (loss) due to the
change in fair value of derivative liabilities was $0 and $32,511, respectively.



Net loss for the period:

                                       Three months ended June 30,                     Change
                                          2022               2021
                                           $                  $                  $                 %
Net loss attributed to Two Hands
Corporation                            (16,347,561 )      (1,987,108 )      (14,360,453)             723



Our net loss for three months ended June 30, 2022 was $16,347,561, compared to
$1,987,108 for the three months ended June 30, 2021, respectively. Our losses
during the three months ended June 30, 2022 and 2021 are primarily due to costs
associated with professional fees, our transfer agent, investor relations,
stock-based compensation paid to officers, directors and consultants and loss on
settlement of debt.


COMPARISON OF RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021

Sales, Cost of Goods Sold, Gross Profit:


                        Six months ended June 30,             Change
                           2022             2021
                            $                 $             $           %
Sales                      389,730         364,081        25,649         7
Cost of goods sold         375,494         325,776        49,718        15
Gross profit                14,236          38,305       (24,069 )     (63 )
Gross profit %                 3.7 %          10.5 %




Breakdown of sales by branch:

                                       Six months ended June 30,                   Change
                                          2022              2021
                                           $                 $               $               %
gocart.city - online delivery             121,305          103,627          17,678              17
Grocery Originals and Cuore Food
Service - retail and wholesale
distribution                              268,425          260,454           7,971               3
Total sales                               389,730          364,081          25,649               7




The gocart.city grocery delivery application was released in early June 2020 and
gocart.city wholesale commenced sale of dry goods and produce to other
businesses in July 2020. Our gross profit is less than expected due to the
expiry and write-off of inventory during the six months ended June 30, 2022. We
have carefully reviewed our inventory and do not expect further significant
write-offs for expired inventory during 2022. We expect our gross profit to
increase to 15% by December 31, 2022 as we reduce coupons to obtain new
customers.



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Operating expenses:

                                   Six months ended June 30,                Change
                                     2022             2021
                                       $                $               $              %
Salaries and benefits              13,634,471         111,950       13,522,521       12,079
Occupancy expense                      53,955          14,193           39,762          280
Advertising and travel                 66,286          20,906           45,380          217
Auto expenses                          23,757           8,853           14,904          168
Consulting                            706,289         918,337         (212,048 )        (23 )
Depreciation and Amortization           3,706             870            2,836          326
Design                                      0          15,029          (15,029 )       (100 )
Bad debt                                9,328              -             9,328           -
Office and general expenses            96,208         156,905          (60,697 )        (39 )
Professional fees                     140,521          56,702           83,819          148
Freight and delivery                   46,655              -            46,655           -
Total operating expenses           14,781,176       1,303,745       13,477,431        1,034



Our total operating expenses for the six months ended June 30, 2022 has been
$14,781,176compared to $1,303,745 for the six months ended June 30, 2021, respectively. The increase in total operating expenses is mainly due to an increase in stock-based compensation paid to officers, directors and consultants.



Total operating expense includes stock-based compensation for the six months
ended June 30, 2022 and 2021 which comprises of 0 and 40,500 shares of common
stock issued valued at $0 and $291,000, respectively for consulting services.



Total operating expense also includes stock-based compensation for the six
months ended June 30, 2022 and 2021 which comprises of 90,000,000 and 12,000
shares of common stock issued valued at $13,500,000, and $36,350, respectively,
for salaries and compensation for our officers and directors.



Salaries and benefits for the six months ended June 30, 2022, comprise primarily
of stock issued to Nadav Elituv, our Chief Executive Officer with a fair value
of $13,504,200.


Salaries and benefits for the six months ended June 30, 2021include shares issued to officers and directors with a fair value of $36,350 and accrued but unpaid salary to Nadav Elituv, our Managing Director, from $75,600.

Advertising and travel includes expenses for online advertising, website, meals and entertainment.



For the six months ended June 30, 2022, consulting comprises primarily
stock-based compensation expense (i) $415,866 for the expenditure of advertising
credits with SRAX, Inc. (ii) $130,171 for consulting fees and (iii) $156,051
paid to contractors to manage our grocery business.



Professional fees comprise of audit, legal, filing fees and contract accountant.
The increase in professional fees is primarily due to legal fees related to the
prospectus dated April 21, 2022 filed with Ontario Securities Commission and
British Columbia Securities Commission and our listing application with the
Canadian Securities Exchange.



Other income (expense):

                                       Six months ended June 30,                   Change
                                         2022              2021
                                          $                 $                $               %
Amortization of debt discount
and interest expense                     (62,768 )        (130,966 )        68,198             (52 )
Loss on settlement of debt            (2,871,450 )      (3,456,925 )       585,475             (17 )
Initial derivative expense                    -           (126,322 )       126,322            (100 )
Change in fair value of
derivative liabilities                        -            101,124        (101,124 )          (100 )
Total operating expenses              (2,934,218 )      (3,613,089 )       678,871             (19 )




  27




Amortization of debt discount and interest expense for the six months ended June
30, 2022 was $62,768, compared to $130,966 for the six months ended June 30,
2021. Amortization of debt discount and interest expense relates to the issuance
of non-redeemable convertible notes, convertible notes and promissory notes.



During the six months ended June 30, 2022 and 2021, the Company elected to
convert $102,840 and $170,349 of principal and interest of a non-redeemable
convertible note into 19,410,000 and 1,092,045 shares of common stock of the
Company resulting in a loss on settlement of debt of $2,871,450 and $3,413,884,
respectively.


In the six months ended June 30, 2022 and 2021, the holders of the convertible notes also elected to convert 0 shares and 63,672 shares of the Company with a fair value of $0 and $218,127 resulting in a loss on settlement of the debt of $0 and $43,041respectively.

Initial derivative charge of $126,322 for the six months ended June 30, 2021
represents the difference between the fair value of the total embedded derivative liability of 351,322 and the cash received from $225,000 for the convertible note issued on February 23, 2021.



During the six months ended June 30, 2022 and 2021, the gain (loss) due to the
change in fair value of derivative liabilities was $0 and $101,124,
respectively.



Net loss for the period:

                                        Six months ended June 30,                    Change
                                         2022               2021
                                           $                 $                 $                %
Net loss attributed to Two Hands
Corporation                           (17,701,158 )      (4,878,529 )      12,822,629             263




Our net loss for six months ended June 30, 2022 was $17,701,158, compared to
$4,878,529 for the six months ended June 30, 2021, respectively. Our losses
during the six months ended June 30, 2022 and 2021 are primarily due to costs
associated with professional fees, our transfer agent, investor relations,
stock-based compensation paid to officers, directors and consultants and loss on
settlement of debt.


QUARTERLY OPERATING RESULTS



The following is a summary of selected quarterly information that has been
derived from the financial statements of the Company. This summary should be
read in conjunction with the consolidated financial statements of the Company.







                                           June 30,          March 31,                                                          June 30,         March 31,
           Quarter Ended                     2022               2022          December 31, 2021       September 30, 2021          2021              2021          December 31, 2020       September 30, 2020
Sales                                   $     190,691      $    199,039    

$324,748 $241,417 $174,774 $189,157 $

           96,194      $           54,838
Gross profit (loss)                     $      (6,278 )    $     20,514      $           19,117      $           39,808      $     19,808      $     18,547      $           16,320      $            2,344
Operating expenses                      $ (14,021,263 )    $   (759,913 )  

($1,270,225) ($693,259) ($446,806) ($856,989) ($836,932) ($1,626,144)
Other income (expenses)

                  $  (2,320,020 )    $   (614,198 )   

($2,155,703) ($7,397,246) ($1,560,110) ($2,052,979) $(626,383) $(629,210) Net loss for the period

                 $ (16,347,561 )    $ (1,353,597 )   

($3,406,811) ($8,050,697) ($1,987,108) ($2,891,421) ($1,446,995) ($2,253,010)
Basic and diluted net loss per share $(0.18) $(0.20)

 $            (0.63 )    $            (2.68 )    $      (1.26 )    $      (2.99 )    $            (2.64 )    $           (11.83 )
















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CASH AND CAPITAL RESOURCES

For the six months ended June 30, 2022

Cash flows used in operating activities


                                            Six months ended June 30,                   Change
                                               2022              2021
                                                $                 $                $               %
Net cash used in operating activities         (506,838 )       (165,818 )  
   (341,020)             206



Our net cash used in operating activities for the six months ended June 30, 2022
and 2021 is $506,838 and $165,818, respectively. Our net loss for the six months
ended June 30, 2022 of $17,701,158 was the main contributing factor for our
negative cash flow. We were able to mostly offset the cash used in operating
activities by using our stock to pay for expenses such as amortization of
prepaid expense of $546,038, stock-based compensation of $13,504,200,
amortization of debt discount of $62,768 and loss on debt settlement of
$2,871,450.



Cash flows used in investing activities


                                           Six months ended June 30,          Change
                                           2022             2021
                                            $                 $             $        %
Net cash used in investing activities        -                 (1,200 )    
-        -



Our net cash (used in) provided by investing activities for the six months ended
June 30, 2022 and 2021 is $0 and $1,200respectively.

Cash flow from financing activities


                                        Six months ended June 30,              Change
                                          2022              2021
                                            $                $              $            %

Net cash provided by financing activities 25,840 264,285 (238,445 ) (90 )

Our net cash provided by financing activities for the six months ended June 30,
2022 is $25,840 and $264,285, respectively. Cash from financing activities in
2022 is primarily due to net advances from related party. Cash from financing
activities in 2021 is primarily due to the issuance of convertible notes,
non-redeemable notes and promissory notes.



As of June 30, 2022, we had cash of $49,131, working capital of $2,167,226 and
total liabilities of $1,413,607. We believe our current cash balance is
sufficient to fund our operations during the next 12 months because on April 14,
2022, the Company entered into a binding Grid Promissory Note and Credit
Facility Agreement (the "Line of Credit") with The Cellular Connection Ltd.
Pursuant to the Line of Credit, the Company can borrow from the Lender up to
CAD$750,000 in principal in increments of at least CAD$50,000 upon five business
days' notice. The funds due for repayment on May 1, 2024, and the principal
bears interest at 8% per annum, payable monthly. As at the date of this Form
10-Q, no funds have been borrowed by the Company pursuant to the Line of Credit
the Company does not expect significant cash outlays for advertising in the next
year as there are $2,436,811 in advertising credits with SRAX, Inc. included in
prepaid expense and we expect to reduce the cash expended on contractors in the
next year as we plan to pay them in shares of the Company.



Our working capital as of June 30, 2022 and December 31, 2021 is as follows:



                        June 30,       December 31,
                          2022             2021
Current assets        $ 2,789,536     $  1,608,848
Current liabilities       622,310          552,998
Working capital       $ 2,167,226     $  1,055,850




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The Company is continuing to focus improving cash flows from operations by
reducing incentives to customers, by making purchases from different suppliers,
accelerating the collection of accounts receivable, managing accounts payable
balances and by paying our officers, directors, consultants and staff with
our
stock.


The Company's financial statements have been prepared assuming the Company will
continue as a going concern, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business. During the six
months ended June 30, 2022, the Company incurred a net loss of $17,701,158 and
used cash in operating activities of $506,838 and on June 30, 2022, had
stockholders' deficit of $3,340,562. These factors, among others, raise
substantial doubt about the Company's ability to continue as a going concern
within one year of the date that the financial statements are issued. The
Company's independent registered public accounting firm, in their report on the
Company's financial statements for the year ended December 31, 2021, expressed
substantial doubt about the Company's ability to continue as a going concern.
The Company's financial statements do not include any adjustments that might
result from the outcome of this uncertainty should we be unable to continue
as a
going concern.



Over the next 12 months we expect to expend approximately $384,000 in cash to
implement our business plan.



                                                                  Cash Required to Implement
                                                                       of Business Plan
Estimated remaining Canadian Securities Exchange listing
costs                                                             $             25,000
Operations and Logistics                                                        30,000
General and Administration                                                     248,000
Total Estimated Cash Expenditures                                 $        
   303,000




We hope to be able to compensate our independent contractors with stock-based
compensation, which will not require us to use our cash, although there can be
no assurances that we will be successful in these efforts.



We believe we have sufficient cash to pay for our business plan and to pay for
our other overhead costs for the next twelve months because on April 14, 2022,
the Company entered into a binding Line of Credit with The Cellular Connection
Ltd. Pursuant to the Line of Credit, the Company can borrow from the Lender up
to CAD$750,000 in principal. If required, we expect to be able to secure
additional capital through advances from our Chief Executive Officer, note
holders, shareholders and others in order to pay expenses such as organizational
costs, filing fees, accounting fees and legal fees, however, we do not have any
written or oral agreements with any other third parties which require them to
fund our operations. Although there can be no assurances that we will be able to
obtain such funds in the future, the Company has been able to secure financing
to continue operations since its inception on April 3, 2009. We are currently
quoted on OTC Pink. The Company is unable to predict the effect, if any, that
the coronavirus COVID-19 global pandemic may have on its access to the financing
markets. If we need additional capital in the next twelve months and if we
cannot raise such capital on acceptable terms, we may have to curtail our
operations or terminate our business entirely.



The inability to obtain financing or generate sufficient cash from operations
could require us to reduce or eliminate expenditures for developing products and
services, or otherwise curtail or discontinue our operations, which could have a
material adverse effect on our business, financial condition and results of
operations. Furthermore, to the extent that we raise additional capital through
the sale of equity or convertible debt securities, the issuance of such
securities may result in dilution to existing stockholders. If we raise
additional funds through the issuance of debt securities, these securities may
have rights, preferences and privileges senior to holders of our common stock
and the terms of such debt could impose restrictions on our operations.
Regardless of whether our cash assets prove to be inadequate to meet our
operational needs, we will seek to compensate providers of services by issuing
stock in lieu of cash, which may also result in dilution to existing
stockholders.



We are currently funding our operations by way of cash advances from our Chief
Executive Officer, note holders, shareholders and others. We hope to be able to
compensate our independent contractors with stock-based compensation, which will
not require us to use our cash, although there can be no assurances that we will
be successful in these efforts. On April 14, 2022, the Company entered into a
binding Line of Credit with The Cellular Connection Ltd. Pursuant to the Line of
Credit, the Company can borrow from the Lender up to CAD$750,000 in principal.
We believe our current cash balance and the Line of Credit is sufficient to fund
our operations during the next 12 months The loans from our Chief Executive
Officer, note holders, shareholders and others are unsecured and non-interest
bearing and have no set terms of repayment. Our common stock started trading
over the counter and has been quoted on the Over-The Counter Bulletin Board
since February 17, 2011. The stock currently trades under the symbol "TWOH.OB."











  30




Commitments for future capital expenditures at June 30, 2022 is as follows:

                               Payments Due by Period
                                               Less than 1
                                   Total           year        1 - 3 years      4 - 5 years       After 5 years
Contractual obligations              $              $               $                $                  $
Accounts payable and accrued
liabilities                        579,288        579,288               -                -                -
Debt                               339,178         34,516               -           304,662               -
Non-redeemable convertible
notes                              466,223             -                -           466,223               -
Financial lease Obligations             -              -                -  
             -                -
Operating leases(1)                 28,918          8,506           20,412               -                -
Purchase obligations                    -              -                -                -                -
Total contractual
obligations                      1,413,607        622,310           20,412          770,885               -


 Notes:

(1) Leases for retail space, equipment and warehousing are currently from one month to

     month. Deliveries are currently outsourced.



OPERATING CAPITAL REQUIREMENTS AND CAPITAL EXPENDITURES



We are currently funding our operations by way of cash advances from our Chief
Executive Officer, note holders, shareholders and others. We hope to be able to
compensate our independent contractors with stock-based compensation, which will
not require us to use our cash, although there can be no assurances that we will
be successful in these efforts. On April 14, 2022, the Company entered into a
binding Line of Credit with The Cellular Connection Ltd. Pursuant to the Line of
Credit, the Company can borrow from the Lender up to CAD$750,000 in principal.
We believe our current cash balance and the Line of Credit is sufficient to fund
our operations during the next 12 months The loans from our Chief Executive
Officer, note holders, shareholders and others are unsecured and non-interest
bearing and have no set terms of repayment. Our common stock started trading
over the counter and has been quoted on the Over-The Counter Bulletin Board
since February 17, 2011. The stock currently trades under the symbol "TWOH.OB."



RELATED PARTY TRANSACTIONS


Six months ended June 30, 2022 and 2021


Due to Related Party



As of June 30, 2022 and December 31, 2021, advances and accrued salary of
$28,420 and $39,985, respectively, were due to Nadav Elituv, the Company's Chief
Executive Officer. The balance is non-interest bearing, unsecured and have no
specified terms of repayment.



During the six months ended June 30, 2022, the Company issued advances due to
related party for $97,079 of expenses paid on behalf of the Company and advances
due to related party were repaid by the Company with $71,239 in cash. In
addition, the Company accrued salary of $99,013 due to Nadav Elituv for the six
months ended June 30, 2022 and issued a promissory note for $82,740 to settle
due to related party.


During the six months ended June 30, 2021, the Company issued advances due to
related party for $43,454 of expenses paid on behalf of the Company and advances
due to related party were repaid by the Company with $50,705 in cash. In
addition, the Company accrued salary of $75,600 due to Nadav Elituv for the six
months ended June 30, 2021, issued 30,000 shares of Series A Convertible
Preferred Stock with a fair value of $110,000 to settled salary due and issued a
promissory note for $19,571 to settle due to related party.



In the six months ended June 30, 2022the Company paid Linus Creative Services, a company owned by Bradley Southamdirector of the Company,
$16,984 for advertising services.

Promissory Notes – Related party

As of June 30, 2022, promissory note - related party of $84,808 (principal
$82,740 and interest of $2,068) and $0, respectively, were outstanding. The
promissory notes - related party bear interest of 10% per annum, are unsecured,
mature on December 31, 2025 and are due to 2130555 Ontario Limited, a Company
controlled by Nadav Elituv, the Company's Chief Executive Officer.



During the six months ended June 30, 2021, the Company issued promissory notes -
related party of $19,571 for $3,400 to settle accrued liabilities and $16,171 of
expenses paid on behalf of the Company.



  31




Our policy with regard to transactions with related persons or entities is that
such transactions must be on terms no less favorable than could be obtained
from
non-related persons.


The above related party transactions are not necessarily indicative of the
amounts that would have been incurred had a comparable transaction been entered
into with an independent party. The terms of these transactions were more
favorable than would have been attained if the transactions were negotiated
at
arm's length.



PROPOSED TRANSACTIONS


The Company does not anticipate any transaction.

CHANGES IN ACCOUNTING POLICIES, INCLUDING INITIAL ADOPTION

Refer to Note 2 in the condensed consolidated financial statements for the six
months ended June 30, 2022 and Note 2 in the condensed consolidated financial
statement for the six months ended June 30, 2022 for information on accounting
policies.



FINANCIAL INSTRUMENTS


The main risks to which the Company’s financial instrument is exposed are credit risk, market risk, foreign exchange risk and liquidity risk.


Credit risk



The Company's credit risk is primarily attributable to trade receivables. Trade
receivables comprise of amounts due from other businesses from the sale of
groceries and dry goods. The Company mitigates credit risk through approvals,
limits and monitoring. The amounts disclosed in the consolidated balance sheet
are net of allowances for expected credit losses, estimated by the Company's
management based on past experience and specific circumstances of the customer.
The Company manages credit risk for cash by placing deposits at major Canadian
financial institutions.



Market risk



Market risk is the risk that changes in market prices and interest rates will
affect the Company's net earnings or the value of financial instruments. These
risks are generally outside the control of the Company. The objective of the
Company is to mitigate market risk exposures within acceptable limits, while
maximizing returns. The Company's market risk consists of risks from changes in
foreign exchange rates, interest rates and market prices that affect its
financial liabilities, financial assets and future transactions.



Refer to note 2 of the condensed consolidated financial statements for the six months June 30, 2022 and Note 2 to the condensed consolidated financial statements.



Foreign Exchange risk



Our revenue is derived from operations in Canada. Our consolidated financial
statements are presented in U.S. dollars and our liabilities other than trade
payable are primarily due in U.S. dollars. The revenue we earn in Canadian
dollars is adversely impacted by the increase in the value of the U.S. dollar
relative to the Canadian dollar.



Liquidity risk


Liquidity risk relates to the risk the Company will encounter difficulty in
meeting its obligations associated with financial liabilities. The financial
liabilities on our consolidated balance sheets consist of accounts payable and
accrued liabilities, due to related party, notes payable, convertible notes,
net, derivative liabilities, promissory notes, promissory notes - related party
and non-redeemable convertible notes, Management monitors cash flow requirements
and future cash flow forecasts to ensure it has access to funds through its
existing cash and from operations to meet operational and financial obligations.
The Company believes it has sufficient liquidity to meet its cash requirements
for the next twelve months.



OUTSTANDING SHARE DATA


Of the August 12, 2022the following securities were in circulation:

Ordinary shares: 123,415,558 shares

Series A Convertible Preferred Shares: 25,000

Series B Convertible Preferred Shares: 17,000

Series C Convertible Preferred Shares: 90,000


  32




OFF-BALANCE SHEET TRANSACTIONS



We currently have no off-balance sheet arrangements that have or are reasonably
likely to have a current or future material effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.

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