IMPORTANT CAUTIONARY GUIDELINES REGARDING FORWARD-LOOKING STATEMENTS

THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS AS DEFINED IN SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, ALONG WITH OTHER FEDERAL SECURITIES LAWS. THESE STATEMENTS ARE PRIMARILY FOCUSED ON EXPECTATIONS ABOUT FUTURE FINANCIAL PERFORMANCE, BUSINESS OPPORTUNITIES, GROWTH STRATEGIES, AND RELATED ASPECTS, INCLUDING BUT NOT LIMITED TO, THE IMPACTS OF THE COVID-19 PANDEMIC ON OUR OPERATIONS, LIQUIDITY, INVESTMENTS, AND OVERALL FINANCIAL CONDITION. OUR FORWARD-LOOKING STATEMENTS ARE BASED ON OUR CURRENT INTENTIONS, EXPECTATIONS, AND PROJECTIONS REGARDING FUTURE EVENTS, BUT THEY ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. THESE STATEMENTS ARE SUBJECT TO KNOWN AND UNKNOWN RISKS, UNCERTAINTIES, AND ASSUMPTIONS THAT MAY CAUSE OUR ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE, OR ACHIEVEMENTS TO VARY SIGNIFICANTLY FROM THOSE INDICATED IN THE FORWARD-LOOKING STATEMENTS. YOU CAN OFTEN IDENTIFY FORWARD-LOOKING STATEMENTS BY TERMS SUCH AS “MAY,” “WILL,” “SHOULD,” “COULD,” “WOULD,” “INTEND,” “PROJECT,” “CONTEMPLATE,” “POTENTIAL,” “EXPECT,” “PLAN,” “ANTICIPATE,” “BELIEVE,” “ESTIMATE,” “CONTINUE,” OR SIMILAR EXPRESSIONS. THESE STATEMENTS ARE ESSENTIALLY PREDICTIONS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO A DISCREPANCY INCLUDE, BUT ARE NOT LIMITED TO, THOSE DESCRIBED IN OUR OTHER SECURITIES AND EXCHANGE COMMISSION FILINGS.

THE FOLLOWING DISCUSSION MUST BE CONSIDERED ALONGSIDE OUR FINANCIAL STATEMENTS AND RELATED NOTES LOCATED ELSEWHERE IN THIS REPORT. ANY FORWARD-LOOKING STATEMENTS WE MAKE IN THIS QUARTERLY REPORT ON FORM 10-Q AND IN OTHER PUBLIC REPORTS AND STATEMENTS MAY PROVE TO BE INACCURATE DUE TO THE BELIEFS AND ASSUMPTIONS WE HAVE MADE IN CONNECTION WITH THE FACTORS MENTIONED ABOVE OR DUE TO OTHER UNIDENTIFIED AND UNPREDICTABLE FACTORS. FURTHERMORE, OUR BUSINESS AND FUTURE RESULTS ARE INFLUENCED BY A NUMBER OF OTHER FACTORS, INCLUDING THOSE DETAILED IN THE “RISK FACTORS” SECTION OF OUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2021, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) ON MAY 20, 2022. DUE TO THESE AND OTHER UNCERTAINTIES, OUR FUTURE RESULTS MAY DIFFER SIGNIFICANTLY FROM THE RESULTS INDICATED IN THESE FORWARD-LOOKING STATEMENTS, AND SUCH STATEMENTS SHOULD NOT BE RELIED UPON. WE DO NOT HAVE ANY OBLIGATION TO PUBLISH REVISED FORWARD-LOOKING STATEMENTS TO REFLECT UNANTICIPATED EVENTS OR CIRCUMSTANCES ARISING AFTER THIS DATE. THESE RISKS COULD ADVERSELY IMPACT OUR ACTUAL RESULTS FOR 2022 AND BEYOND, NEGATIVELY AFFECTING OUR FINANCIAL CONDITION, LIQUIDITY, OPERATING PERFORMANCE, AND STOCK PRICE.

Our Business Overview

Starco Brands, Inc. (formerly known as Insynergy Products, Inc.), hereinafter referred to as “the Company,” “our Company,” “STCB,” “we,” “us,” or “our,” was established in the State of Nevada on January 26, 2010. On September 7, 2017, we filed an Amendment to the Articles of Incorporation to officially change our corporate name to Starco Brands, Inc. as a strategic decision reflecting shifts in our current and anticipated business operations. In July 2017, we entered into a licensing agreement with The Starco Group (“TSG”), located in Los Angeles, California. TSG is a notable manufacturer specializing in private label and branded aerosol and liquid fill products across various sectors, including DIY/Hardware, paints, coatings, adhesives, household goods, hair care products, disinfectants, automotive accessories, motorcycle supplies, arts and crafts, personal care cosmetics, FDA-regulated personal care items, sun care products, as well as food, cooking oils, beverages, and spirits and wine. This licensing agreement marked a pivotal shift for us, enabling the commercialization of innovative consumer products manufactured by TSG.

Strategic Executive Overview

In July 2017, our Board of Directors proactively entered into a licensing agreement with TSG to implement a new strategic marketing approach that focused on the commercialization of cutting-edge products intended for distribution through both physical and online retail channels. Our mission as a company is to develop products that not only change consumer behavior but also generate excitement among our customers. Our core competency lies in capitalizing on emerging cultural trends, creating powerful brands, and enhancing visibility through innovative marketing strategies. The licensing agreement with TSG allows us access to certain products on an exclusive and royalty-free basis, while others are available on a non-exclusive and royalty basis across categories such as food, household cleaning, air care, spirits, and personal care.

The current CEO of TSG, Ross Sklar, was appointed as our CEO in August 2017. Mr. Sklar possesses an extensive background in commercializing technology within both industrial and consumer markets. Over the past 20 years, Mr. Sklar has successfully built teams comprising manufacturing staff, research and development experts, and sales and marketing professionals, positioning TSG as a successful and diversified manufacturer supplying a broad spectrum of products to major retailers in the United States.

Through extensive research, we have pinpointed several unmet consumer needs that our portfolio of innovative technologies can fulfill. We are actively pursuing this vision and have successfully launched four distinct product lines since our inception.

One of our flagship offerings, the Breathe® Household cleaning aerosol line, presents an environmentally friendly range of household cleaning products. Breathe has been recognized as the EPA Safer Choice Program Partner of the Year, showcasing its commitment to sustainability. This product line utilizes nitrogen as its propellant, which constitutes about 80% of the air we breathe. Breathe not only earned accolades as the EPA’s Safer Choice Program’s Partner of the Year but also received the coveted Good Housekeeping Seal of approval, cementing its reputation as a trusted eco-friendly cleaning solution.

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In April 2020, we launched the Breathe® Hand Sanitizer Spray. This innovative product, developed and patented by Alim Enterprises, LLC, (“AE”), which is owned by Mr. Sklar, was originally designed for Blue Cross Laboratories, LLC (“BCL”), a personal care consumer products manufacturer under Mr. Sklar’s TSG. The hand sanitizer was created in response to the supply chain disruptions caused by the Covid-19 pandemic and the surging demand for sanitizing products. Traditional packaging components for hand sanitizer became increasingly difficult to obtain, exacerbating the situation. Fortunately, BCL, located in Santa Clarita, California, is a well-established manufacturer of personal care products, including hand sanitizers. The Covid-19 outbreak significantly strained many traditional supply chains, preventing BCL from sourcing enough bottles and caps. Through AE, the concept of an aerosol spray hand sanitizer was conceived. AE has filed patents for what it believes to be the first-ever aerosol spray hand sanitizer with a 75% alcohol solution, utilizing only compressed air and nitrogen as the propellant. AE, along with its intellectual property counsel, believes this product is novel and warrants a utility patent. In February 2021, AE assigned the patent application to us as outlined in a 2020 memorandum of understanding between AE, us, and TSG.

The manufacturing of this product is being carried out by BOV Solutions, a division of TSG, which specializes in at-scale FDA-compliant manufacturing of aerosol and OTC products. The Breathe Hand Sanitizer Spray can only be produced in an FDA facility capable of high-volume aerosol production. The product is marketed through BOV Solutions and TSG’s established distribution channels in the United States. We officially introduced the product in April 2020 through a press release in collaboration with Dollar General, announcing its availability in over 15,000 of their stores. Additionally, we have partnered with Wegmans, HLA, and J Winkler. Since its launch, the product is also available through retailers such as The Home Depot, Lowes, American Pharmacy, AutoZone, The Farm Shop, Harris Teeter, UNFI, Kehe, Macy’s, Smart & Final, Weeks, and many others. The Breathe Hand Sanitizer Spray is offered in three convenient sizes: 1oz., 5oz., and 9.5oz. sprays and can be purchased directly from our website at www.breathesanitizer.com, as well as on Amazon.com and Walmart.com.

We also act as the marketer for Betterbilt Chemical’s Kleen Out® branded drain opener and for the Winona® Butter Flavor Popcorn Spray, although we do not hold ownership of these brands. Our role involves providing marketing services for these products in accordance with the agreements that govern our marketing activities. Both products are readily available in Walmart stores.

In 2019, Winona Popcorn Spray entered into a co-marketing partnership with Delish, a media brand owned by Hearst. As a result of this partnership, the brand is now widely distributed throughout Walmart stores across the nation. Furthermore, we launched the Winona Popcorn Spray on Amazon through our strategic partner Pattern (formerly iServe), who is also a shareholder in our company. Winona Popcorn Spray can also be found in H-E-B grocery stores. Recently, we introduced a new caramel flavor, which is also being distributed through Walmart and H-E-B. Sales for these products experienced significant growth in 2021, and we anticipate continued expansion in this sector as we plan to increase our sales personnel for this product line in 2022.

On September 8, 2021, we, through our Wyoming subsidiary, Whipshots, LLC (“Whipshots LLC”), entered into an Intellectual Property Purchase Agreement effective as of August 24, 2021, with Penguins Fly, LLC. Under this agreement, we acquired the trademarks “Whipshotz” and “Whipshots.” The purchase price for these trademarks will be paid over seven years, based on a sliding scale percentage ranging from 2% to 5% of gross revenues generated solely from our sales of Whipshots/Whipshotz products.

On September 14, 2021, we, through our newly formed Delaware subsidiary Whipshots LLC (DE), which was later renamed to Whipshots Holdings LLC (“Whipshots Holdings”), entered into a License Agreement with Washpoppin Inc., a corporation based in New York, whereby Washpoppin licensed certain intellectual property from the recording artist professionally known as “Cardi B” to the Company for use in connection with our new product line consisting of vodka-infused, whipped-cream aerosols branded as “Whipshots.” We officially launched these products under the Whipshots™ brand in the fourth quarter of 2021 and the first quarter of 2022. Additionally, we have established Distribution Agreements with various distributors, designating them as exclusive distributors of Whipshots™ in specific geographical areas.

During December 2021, we hosted a launch event for Whipshots at Art Basel in Miami. This event garnered an impressive 1.7 billion earned media impressions worldwide. The product was launched through the Whip Drop program on whipshots.com, with a limited quantity of cans available for sale each day throughout December 2021. Following the success of our online launch, we initiated brick-and-mortar retail distribution in the first quarter of 2022, securing a national distribution agreement with RNDC, one of the largest spirits distributors in the country. We also announced partnerships with GoPuff and BevMo. Our goal is to register Whipshots in all states, starting with select markets, and we plan to approach this growth cautiously.

As long as we can secure funding, our plans include launching additional products in the categories of spray foods and condiments, air care products, sun care, hair care, personal care items, spirits, and beverages within the next 48 months. Although the initial market response to our new lines has been positive, we acknowledge the potential challenges that could hinder this and future product launches from achieving sustained commercial success. Securing financing for growth and new product launches is essential, and our capacity to raise further capital is crucial for executing our strategic plans. In 2021, we sought financing through a Regulation A offering that received qualification on December 9, 2021, engaging The Dalmore Group to assist as the broker-dealer of record in this process, in which up to 56,818,181 shares of common stock may be sold to the public at a price of $1.00 per share.

To raise additional capital, we will rely on sales of our common stock and other financing sources. The selection of purchasers and the method of any share issuance will depend on our financial needs and the available exemptions from the registration requirements of the Securities Act. We have reassessed our previous plan to utilize the services of Deutsch Marketing and are now planning to engage, to the best of our abilities within the confines of limited financing, the services of other marketing and social media agencies, as well as Interpublic-owned marketing and public relations firms to bolster our marketing strategy. Additionally, we will leverage the marketing capabilities of Hearst Media for certain product lines in alignment with co-branding agreements. This collaboration provides substantial support for the retail and online distribution of our products.

Our ultimate objective is to establish ourselves as a leading owner of power brands and a third-party marketer of innovative technologies within the consumer products sector, aiming to enhance shareholder value. We will persist in evaluating this and other opportunities to refine our strategy for 2022 and beyond.

For more information, please visit our websites: www.starcobrands.com, www.breathecleaning.com, www.breathesanitizer.com, and www.whipshots.com.

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Analysis of Operational Results for the Three Months Ended June 30, 2022 Compared to 2021

Revenue Growth and Analysis

For the three months ending June 30, 2022, the Company realized royalty revenues amounting to $1.2 million, a marked increase from $0.2 million for the same period in 2021, representing a substantial growth of $1.0 million or an impressive percentage increase of 408%. This remarkable rise can be attributed primarily to the sales of Whipshots™, which were not marketed during the corresponding period last year, where revenue largely stemmed from sales of Breathe cleaning products. The royalty rate that the Company receives varies based on wholesale sales of our branded and non-corporate owned licensed products. Revenue generated is derived from our marketing licensing agreements with TSG and other affiliated entities for the various products mentioned above.

The revenue surge in the current period is mainly driven by the initial volume sales of our Whipshots™, which were partially counterbalanced by a decrease in sales of Breathe cleaning and sanitizer products. For the three months concluding June 30, 2022,

Operating Expense Analysis

For the three months ending June 30,