NATE’S FOOD CO. Management’s Discussion and Analysis of Financial Condition or Plan


FORWARD-LOOKING STATEMENTS

Certain matters discussed herein are forward-looking statements. Such
forward-looking statements contained herein involve risks and uncertainties,
including statements as to:

· our future operating results;

· our business prospects;

· our contractual arrangements and relationships with third parties;

· the dependence of our future success on the general economy;

· our possible financings; and

· the adequacy of our cash resources and working capital.

These forward-looking statements can generally be identified as such because the
context of the statement will include words such as we “believe,” “anticipate,”
“expect,” “estimate” or words of similar meaning. Similarly, statements that
describe our future plans, objectives or goals are also forward-looking
statements. Such forward-looking statements are subject to certain risks and
uncertainties which are described in close proximity to such statements, and
which could cause actual results to differ materially from those anticipated as
of the date of this report. Shareholders, potential investors and other readers
are urged to consider these factors in evaluating the forward-looking statements
and are cautioned not to place undue reliance on such forward-looking
statements. The forward-looking statements included herein are only made as of
the date of this report, and we undertake no obligation to publicly update such
forward-looking statements to reflect subsequent events or circumstances.


General Overview


We were incorporated under the laws of the State of Colorado on January 12,
2000
, under the name Capital Resources Alliance, Inc. At inception, we were a
development stage company in the business of mining and exploration. On May 19,
2014
, our company completed a reverse merger with Nate’s Pancakes, Inc., an
Indiana company, with Nate’s Pancakes being the surviving entity. In May 2014,
we changed our name from Capital Resource Alliance, Inc. to Nate’s Food Co.

In connection with the reverse merger, we became a food manufacturing and
product company, and in May 2014, we executed a licensing agreement with Nate’s
Pancakes to market and sell “Nate’s Homemade,” exclusively throughout the world.


Our Current Business


The Company is engaged in “Bitcoin Mining” – i.e. the process by which Bitcoins
are created resulting in new blocks being added to the blockchain and new
Bitcoins being issued to the miners. The Company has purchase and maintain ASIC
(application-specific integrated circuit) computers – computers specifically
designed for cryptocurrency mining – that are used for Bitcoin Mining. We have
placed this Bitcoin Mining equipment with a 3rd party datacenter or farms (often
referred as a “Co-Location”) that powers and operates our Bitcoin Mining
equipment for a fee. We currently generate revenues through receiving Bitcoin
from our Bitcoin Mining equipment.

Bitcoin Miners engage in a set of prescribed complex mathematical calculations
in order to add a block to the blockchain and thereby confirm cryptocurrency
transactions included in that block’s data. Miners that are successful in adding
a block to the blockchain are automatically awarded a fixed number of Bitcoins
for their effort. The Company will only mine Bitcoin. The Company has executed
two 270 days and 200 days lease agreements for Bitmain’s S-17s and T-17s for
Bitcoin Mining Equipment. The Company is actively in discussions with
manufactures and resellers to acquire additional bitcoin mining equipment and
capacity. The Company’s initial goal is to acquire 25,000 terrahash in mining
capacity in the next 12 months. Terahashes are the unit used to measure speed of
the mining hardware mining cryptocurrencies, with a TH/s equalling one trillion
hash calculations computed in one second. Open-source calculators are available,
such as NovaBlock, that allow for the calculation of expected revenue based on
TH/s.



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Our food development division licenses, develops and manufactures food products.
The Company’s Board of Directors has voted to cease product manufacturing and
development of new products for its food development division. We are, however,
continually exploring options to license our developed product, a ready-to-use,
pre-mixed pancake and waffle batter delivered in a pressurized can. We are also
exploring options on monetizing our proprietary blend of pancake and waffle dry
mix. Our current product line consists of the original flavor of pancake and
waffle mix and three additional flavors, Banana, Blueberry and Strawberry. The
flavors can be found at www.natesfoodco.com. and www.sh-mallow.com.


Results of Operations


The following summary of our results of operations should be read in conjunction
with our unaudited condensed financial statements for the three and six months
ended November 30, 2022 and 2021, which are included herein.

Our operating results for the three and six months ended November 30, 2022 and
2021, and the changes between those periods for the respective items are
summarized as follows



Three Months Ended November 30, 2022, compared to the Three Months Ended
November 30, 2021.



                                           Three Months Ended
                                              November 30,
                                           2022          2021          Change          %

Revenue                                 $    2,881     $  21,204     $ (18,323 )         (86 %)
Cost of revenue                              7,646        44,660       (37,014 )         (83 %)
Gross loss                                  (4,765 )     (23,456 )      18,691            80 %
Operating expenses                         (57,823 )     (36,920 )     (20,903 )         (57 %)
Change in fair market value of                                                          (515
derivative                                 (47,000 )      11,333       (58,333 )             %)
Interest expense                           (30,146 )     (24,546 )      (5,600 )          23 %
 Gain on disposal of digital currency        3,438             -         3,438           100 %
Impairment loss on digital currency         (4.231 )        (976 )      (3,255 )        (333 %)
Net Loss                                $ (140,527 )   $ (74,565 )   $ (65,962 )         (88 %)




Revenue


Our Company generated $2,881 and $21,204 revenue from digital currency mining
for the three months ended November 30, 2022 and 2021, respectively. The Company
commenced the mining of Bitcoin in September 2021.


Cost of Revenue


The cost of digital currency mining revenue was $7,646 and $44,660 for the three
months ended November 30, 2022 and 2021, respectively. Cost of revenue consists
of electricity and other co-location hosting fees, which are remitted in Bitcoin
and cash payments for equipment leases.


Operating Expenses


During the three months ended November 30, 2022, we incurred general and
administrative expenses of $57,823 compared to $36,920 incurred during the three
months ended November 30, 2021. The increase in operating expenses were
predominantly from professional and other fees related to our reporting
requirements and general administrative expenses.


Other income (expense)


During the three months ended November 30, 2022, we had a loss on change in fair
market value of derivatives of $47,000, interest expense of $30,146, loss on
sale of digital currency of $351, and impairment loss on digital currency of
$442, compared to a gain on change fair market value of derivatives of $11,333,
impairment loss on digital currency $976, and interest expense of $24,546 during
the three months ended November 30, 2021.During the three months ended November
30,2022
, the Company reclassified impairment loss on digital currency of $3,789
related to first quarter ( August 31,2022) from gain on disposal of digital
currency.



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Six Months Ended November 30, 2022, compared to the Six Months Ended November
30, 2021
.



Our operating results for the six months ended November 30, 2022 and 2021, and
the changes between those periods for the respective items are summarized as
follows:



                                           Six Months Ended
                                             November 30,
                                          2022          2021          Change           %

Revenue                                $    8,084     $  21,204     $  (13,120 )         (62 %)
Cost of revenue                            24,037        44,660        (20,623 )         (46 %)
Gross loss                                (15,953 )     (23,456 )        7,503           (32 %)
Operating expenses                        (86,301 )     (45,965 )      (40,336 )          88 %
Change in fair market value of                                                          (104
derivative                                (17,080 )     415,795       (432,875 )             %)
Interest expense                          (73,935 )     (29,599 )       44,336           150 %
Loss on disposal of digital currency       (2,304 )   ...



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