The following discussion should be read in conjunction with our audited financial statements and the accompanying notes included herein. We caution readers against certain forward-looking statements in the following discussion and elsewhere in this report and in any other statements made by, or on our behalf, whether or not in future documents filed with the Security and Trade Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward-looking statements are necessarily based on estimates and assumptions which are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies may affect actual results and could cause actual results to differ materially from those expressed in forward-looking statements made by or on our behalf. We disclaim any obligation to update any forward-looking statements.
Results of Operations
We recorded minimal revenues amounting to $ 900 and $ 118 for the past years
August 31, 2021 and August 31, 2020, respectively and the cost incurred of goods sold from $ 0 and $ 4 for the year ended August 31, 2021 and the year ended August 31, 2020, respectively.
Operating expenses consist of general and administrative expenses of
$ 1,721,372 and stock-based compensation for $ 595,824, for the year ended
August 31, 2021 (compared to $ 680,471 for the year ended August 31, 2020), an augmentation of $ 1,648,776 in general and administrative expenses. The change is due to the increase in operating expenses associated with a concentration of resources in product development, engineering, marketing, reporting and administrative tasks after the acquisition of the company. Boatim platform as well as the operating costs linked to the new Spanish subsidiary Boatim Europe. the $ 595,824 the increase is stock-based compensation, was attributable to a senior executive receiving common share awards.
Other expenses for the year ended August 31, 2021, including the amortization of the debt discount for an amount of $ 617,934, in addition to a loss on liabilities derived from $ 209,068 which are both associated with our convertible debt, offset by a foreign exchange gain of $ 27,129.
The net loss was $ 3,116,169 for the year ended August 31, 2021 (compared to
August 31, 2020: $ 409,914), an increase of approximately 663% compared to last year.
Our total assets at August 31, 2021 were $ 685,387 (August 31, 2020:
$ 510,289). The increase in total assets is due to the increase in capitalized software costs of $ 251,477.
Our total current liabilities at August 31, 2021 were $ 2,467,379 that is made of $ 373,039 in accounts payable and accrued liabilities, $ 427,451 in debts to related parties, $ 33,333 in operating rental obligations, as well as
$ 1,613,556 in convertible notes and a short-term loan of $ 20,000 of an unrelated party. We also have non-current liabilities consisting of $ 22,410 in operating lease obligations at August 31, 2021. Current liabilities at
August 31, 2020 were $ 1,499,045 that is made of $ 189,680 in accounts payable and accrued liabilities, $ 348,031 in debts to related parties,
$ 141,276 in operating rental obligations, as well as $ 1,060,000 in convertible notes, offset by $ 595,350 debt discount and $ 307,446 derivative liabilities associated with our convertible notes. A short term loan of $ 47,962 an unrelated party has been reimbursed in September 2020. We also have non-current liabilities consisting of $ 38,391 in operating lease obligations at August 31, 2020.
We currently expect our operating expenses (i.e. legal and professional fees, IT costs and website and software development and testing, sales, marketing and advertising, and other expenses) to be at. over the next 12 months will be approximately $ 1,500,000 at $ 2,000,000.
From August 31, 2021, the Company had authorized 500,000,000 ordinary shares with a par value of $ 0.001 per share.
From August 31, 2021, the Company had 51,780,838 (August 31, 2020: 50,500,011) common shares issued and outstanding and there were no stock options or warrants outstanding. As of the date of this document, the Company has 51,780,838 common shares issued and outstanding.
For the year ended August 31, 2021 we reported a net loss of $ 3,116,169 and a cumulative deficit of $ 3,913,475. From August 31, 2021, we had cash from
$ 69,827. The report of our independent accounting firm recorded on our financial statements for the year ended August 31, 2021 contains an explanatory paragraph regarding our ability to continue operating on the basis of our minimum liquidity and the absence of an insufficient source of income to cover our operating costs. These and other factors raise substantial doubts about our ability to continue to operate. Our financial statements do not include any adjustment that could result from the outcome of this uncertainty. There can be no assurance that we will be successful in our efforts to raise capital, develop a source of income, report profitable transactions or continue our business, in which case investors would lose their entire investment in our company.
Liquidity and capital resources
AT August 31, 2021, we have had $ 69,827 in cash and there were unpaid debts of $ 2,489,789 (species of $ 38,427 and the debts of $ 1,537,436 to
August 31, 2020, respectively). There was $ 1,444,364 in cash used in operations in 2021 ($ 509,192 net cash used in operating activities in 2020, respectively) and $ 333,243 used in investing activities (as well as $ 270,506 used in investing activities in 2020). There was $ 1,721,064 cash provided by financing activities in 2021 and $ 822,733 in cash from financing activities in 2020. This resulted in $ 31,400 change in net cash in 2021 and $ 22,736 in 2020.
Cayo Ventures GmbH has verbally agreed to continue to loan funds to the company for operating expenses in a limited scenario, but has no legal obligation to do so.
Cash flow / future financing needs
There is little historical financial information about us on which to base an assessment of our performance. We did not truly start our business operations based on the amount of revenue we have been able to generate. We are in the start-up phase of operations. We cannot guarantee that we will be successful in our business operations. Our business is subject to risks inherent in starting a new business enterprise, including limited capital resources and possible cost overruns due to increases in prices and costs of services and products.
We have no assurance that future funding will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may not be able to continue, develop or expand our business. Equity financing could result in further dilution for existing shareholders.
Off-balance sheet provisions
We have no off-balance sheet arrangement that has or is reasonably likely to have a current or future effect on our financial condition, changes in financial condition, income or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors, except as may be disclosed in the “Recent Developments” section.
Summary of the main accounting policies:
See note 2 of the financial statements under POINT 8 below.
We are a small reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide information under this section.
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