Overview
The Company's consolidated financial statements are prepared in accordance with
GAAP. The consolidated financial statements include the accounts of all
subsidiaries in which the Company holds a controlling financial interest as of
the financial statement date.
Results of Operations
Results of Operations during the year ended December 31, 2021, as compared to
the year ended December 31, 2020
Our net revenue for the year ended December 31, 2021, was $8,491,651, compared
to $1,316,304 for the same period in 2020. The increase in revenue is due to a
full year of operation for 2021 versus 2020 is because of the acquisition made
in the 4th quarter of 2020 bring substantially more revenue into the Company.
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Our cost of goods sold for the year ended December 31, 2021, was $4,708,195,
compared to $914,759 the same period in 2020. The increase in cost of goods is
directly correlated with the growth in revenue. Gross margin improved from 30%
to 45%.
Our general and administrative expense for the year ended December 31, 2021, was
$897,335, compared to $110,520 for the same period in 2020. This increase was
mainly due to 2020 being a stub year and a full year of operations in 2021.
Our salaries expense for the year ended December 31, 2021, was $1,576,544,
compared to $258,913 for the same period in 2020. This increase was mainly due
to 2020 being a stub year and a full year of operations in 2021.
Our rent expense for the year ended December 31, 2021, was $422,527, compared to
$146,013 for the same period in 2020. This increase was mainly due to 2020 being
a stub year and a full year of operations in 2021.
Our Utilities expense for the year ended December 31, 2021, was $120,414,
compared to $29,956 for the same period in 2020. This increase was mainly due to
2020 being a stub year and a full year of operations in 2021.
Our professional fees expense for the year ended December 31, 2021, was
$106,750, compared to $18,728 for the same period in 2020. This increase was
mainly due to 2020 being a stub year and a full year of operations in 2021.
Our consulting expense for the year ended December 31, 2021, was $721,862
compared to $667,976 for the same period in 2020. This increase was mainly due
to 2020 being a stub year and a full year of operations in 2021.
Our depreciation expense for the year ended December 31, 2021, was $381,169,
compared to $232,271 for the same period in 2020. This increase was mainly due
to 2020 being a stub year and a full year of operations in 2021.
Our bad debt expense for the year ended December 31, 2021, was $80,000, compared
to $0 for the same period in 2020. This increase was mainly due to 2020 being a
stub year and a full year of operations in 2021.
Our share-based expense for the year ended December 31, 2021, was $277,333,
compared to $0 for the same period in 2020. This increase was mainly due to the
adoption of our stock option plan.
Our gain on debt settlement for the year ended December 31, 2021, was $312,583,
compared to $0 for the same period in 2020. This increase was mainly due to the
forgiveness of our PPP loan.
Our other income for the year ended December 31, 2021, was $84,628, compared to
$0 for the same period in 2020.
Our financing fees expense for the year ended December 31, 2021, was $1,273,507,
compared to $36,860 for the same period in 2020. This increase was mainly due to
the issuance of warrants and OID on the notes payable.
Our Interest expense for the year ended December 31, 2021, was $252,453,
compared to $70,974 for the same period in 2020. This increase was mainly due to
the company borrowing capital to grow the business.
Our net loss for the year ended December 31, 2021, was $2,011,327 compared to
$1,170,666 for the same period in 2020. This increase was mainly due to the
factors listed above.
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Liquidity and Capital Resources
As of December 31, 2021, the Company current assets of $1,513,667 and total
assets of $4,007,465. As of December 31, 2020, the Company current assets of
$450,711 and total assets of $3,193,657.
As of December 31, 2021, the Company current liabilities of $5,327,491 and total
Liabilities of $5,577,014 As of December 31, 2020, the Company current
liabilities of $3,483,329 and total liabilities of $4,457,673
The following table summarizes our cash flows for the fiscal years ended
December 31, 2021, and December 31, 2020:
2021 2020
Net cash provided (used) from operating activities $ (98,519 ) $ 821,026
Net cash used in investing activities
(798,299 ) (2,702,687 )
Net cash provided by financing activities 1,095,128 1,952,821
Net Increase In Cash $ 198,310 $ 71,160
Going Concern
Our operating losses and lack of operating capital create substantial doubt
about the Company's ability to continue as a going concern. The ability of the
Company to continue as a going concern is dependent on its ability to obtain
capital from our affiliates to fund our operations, generate cash from the sale
of its securities and attain future profitable operations. Management's plans
include selling its equity securities and obtaining debt financing to fund its
capital requirement and ongoing operations; however, there can be no assurance
the Company will be successful in these efforts.
Off-Balance Sheet Arrangement
The Company does not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on the Company's financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that are
material to investors.
Contractual Obligations
As a "smaller reporting company," as defined by Item 10 of Regulation S-K, the
Company is not required to provide the information required by this Item.
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