Company: TCRG
Filing Date: 2025-11-18
Form Type: 10-Q
Source: 0001185185-25-001785
Chunk: 60

Company: Cannaisseur Group Inc.
Filing Date: 2025-11-18
Form: 10-Q
Item: Item 2
Chunk 60
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 anticipated to continue to create pressure on gross profit margins.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were
$690,209 for the three months ended September 30, 2025, compared to $20,953 during the three months ended September 30, 2024, an increase
of $669,256, or 3,194.1%. The increase was driven primarily by increases in share-based compensation expense and salaries.

Other Expense, Net

Other expense, net was $88,343 during the three
months ended September 30, 2025, compared to $1,626 during the three months ended September 30, 2024, an increase of $86,717, or 3,136.2%.
The increase was the result of losses on the conversions of debt and mezzanine equity to common stock during the three months ended September
30, 2025.

Results of Operations for the Nine Months
Ended September 30, 2025 Compared with the Nine Months Ended September 30, 2024

Revenue

Revenue was $0 for the nine months ended September
30, 2025, compared to $700 for the nine months ended September 30, 2024, a decrease of $700, or 100%. The decrease in revenue was due
to a decline in retail sales driven by the closing of the Company’s retail store. The Company is in the process of restructuring
its website and plans to conduct business online. The Company may reopen a physical store or stores in the future if it is advantageous
to its operations.

Costs of Revenue

Cost of revenue was $718 for the nine months ended
September 30, 2025, compared to $3,162 during the nine months ended September 30, 2024, a decrease of $2,444, or 77.3%. The decrease was
driven primarily by a lack of sales and reduced write off of obsolete inventories in the current period.

The Company reported negative gross profit for
the nine months ended September 30, 2025 and 2024. The negative profit margins were the result of reduced sales, due to the closing of
the Company’s retail store, and increases in write-offs of obsolete inventory. Continued growth of the consumer market for CBD products
and increases in competition are anticipated to continue to create pressure on gross profit margins.

Selling, General and Administrative Expenses

Selling, general and administrative expenses