The following information should be read in conjunction with (i) the financial
statements of Agentix Corp., a Nevada corporation (the "Company"), and
development stage company, and the notes thereto appearing elsewhere in this
Form 10-Q together with (ii) the more detailed business information and the
March 31, 2022 audited financial statements and related notes included in the
Company's Form 10-KT (File No. 000-55383; the "Form 10-KT"), as filed with the
Securities and Exchange Commission on July 18, 2022. Statements in this section
and elsewhere in this Form 10-Q that are not statements of historical or current
fact constitute "forward-looking" statements.
Company Overview
We were incorporated in the State of Nevada on April 18, 2013 and we initially
established a fiscal year end of August 31. In March 2022, we changed our year
end to March 31.
COVID-19
We continue to evaluate the impact of the COVID-19 pandemic on the industry and
our Company and have concluded that while it is reasonably possible that the
virus could have a negative effect on our financial position and results of our
operations, the specific impact is not readily determinable as of the date of
this filing. Our financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
CRITICAL ACCOUNTING POLICIES
The discussion and analysis of our financial condition and results of operations
are based on our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States
("US GAAP"). The preparation of these consolidated financial statements requires
us to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. On an ongoing basis, we evaluate our estimates based on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. We have identified the
policies below as critical to our business operations and to the understanding
of our financial results:
Basis of Accounting
Our financial statements and related notes have been prepared in accordance with
accounting principles generally accepted in the United States of America ("U.S.
GAAP"), and with the rules and regulations of the SEC to Form 10-Q and Article 8
of Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by U.S. GAAP for complete financial statements. The unaudited
interim financial statements furnished reflect all adjustments (consisting of
normal recurring accruals) which are, in the opinion of management, necessary to
a fair statement of the results for the interim periods presented. Unaudited
interim results are not necessarily indicative of the results for the full
fiscal year. These financial statements should be read in conjunction with our
audited financial statements for the reporting period ended March 31, 2022, as
filed on July 18, 2022, and notes thereto contained in our Annual Report on Form
10-KT.
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Deferred Tax Assets and Income Tax Provision
We account for income taxes under Section 740-10-30 of the FASB Accounting
Standards Codification. Deferred income tax assets and liabilities are
determined based upon differences between the financial reporting and tax bases
of assets and liabilities and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse. Deferred
tax assets are reduced by a valuation allowance to the extent we conclude it is
more likely than not that the assets will not be realized. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in the statements of operations in the period
that includes the enactment date.
We adopted section 740-10-25 of the FASB Accounting Standards Codification
("Section 740-10-25"). Section 740-10-25 addresses the determination of whether
tax benefits claimed or expected to be claimed on a tax return should be
recorded in the financial statements. Under Section 740-10-25, we may recognize
the tax benefit from an uncertain tax position only if it is more likely than
not that the tax position will be sustained on examination by the taxing
authorities, based on the technical merits of the position. The tax benefits
recognized in the financial statements from such a position should be measured
based on the largest benefit that has a greater than fifty percent (50%)
likelihood of being realized upon ultimate settlement. Section 740-10-25 also
provides guidance on de-recognition, classification, interest and penalties on
income taxes, accounting in interim periods and requires increased disclosures.
Recent Accounting Pronouncements
We do not expect the adoption of recently issued accounting pronouncements to
have a significant impact on its results of operations, financial position or
cash flow.
RESULTS OF OPERATIONS
Three Months Ended December 31, 2022 as compared to Three Months Ended December
31, 2021:
We recorded no revenues during the three months ended December 31, 2022 and
2021.
For the three months ended December 31, 2022, professional fees were $139,821 as
compared to $106,266 for the three months ended December 31, 2021. The increase
in professional fees mainly related to the non-cash issuance of shares for
services previously provided offset somewhat by lower consulting fees incurred.
For the three months ended December 31, 2022, we incurred total research and
development expenses of $192,032 as compared to $65,375 for the three months
ended December 31, 2021. The increase was mainly related to the non-cash
issuance of shares for services previously provided along with higher consulting
fees during the three months ended December 31, 2022 as compared to same period
in 2021.
For the three months ended December 31, 2022, general and administrative
expenses were $21,785 as compared to $15,335 for the three months ended December
31, 2021. The increase was primarily related to a license fee, which we did not
have a similar expense during our three months ended December 31, 2021.
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Nine months Ended December 31, 2022 as compared to Nine months Ended December
31, 2021:
We recorded no revenues during the nine months ended December 31, 2022 and
$1,240 of revenue during our nine months ended December 31, 2021. Gross margin
related to our sales incurred during the nine months ended December 31, 2021 was
$679.
For the nine months ended December 31, 2022, professional fees were $296,673 as
compared to $309,034 for the nine months ended December 31, 2021. The decrease
in professional fees mainly related to lower consulting fees incurred offset
somewhat by the issuance of non-cash shares for services previously provided.
For the nine months ended December 31, 2022, we incurred total research and
development expenses of $527,676 as compared to $219,362 for the nine months
ended December 31, 2021. The increase was mainly related to patent filing costs
that we incurred related to our development efforts along with the non-cash
issuance of shares for services previously provided and higher consulting fees
during the nine months ended December 31, 2022 as compared to same period in
2021.
For the nine months ended December 31, 2022, general and administrative expenses
were $118,273 as compared to $46,464 for the nine months ended December 31,
2021. The increase was primarily related to a license fee, which we did not have
a similar expense during our nine months ended December 31, 2021, and higher
subscription fees.
Liquidity and Capital Resources
Our unaudited consolidated financial statements have been prepared assuming that
we will continue as a going concern, which contemplates continuity of
operations, realization of assets, and liquidation of liabilities in the normal
course of business. As reflected in our unaudited consolidated financial
statements for the nine months ended December 31, 2022, we had an accumulated
deficit, we did not incur any revenue and we had a net loss along with negative
cash generated from our operations. In addition, we owe our vendors and related
parties $1,974,545 as of December 31, 2022. These factors raise substantial
doubt about our ability to continue as a going concern.
We are attempting to commence operations and generate sufficient revenue;
however, our cash position is not sufficient to support our daily operations. As
such, we will need to raise funds to complete our plan of operation and fund our
ongoing operational expenses for the next 12 months. Additional funding will
likely come from equity financing from the sale of our common stock or debt
financing. If we are successful in completing an equity financing, existing
shareholders will experience dilution of their interest in our Company and if we
obtain debt financing, the terms of any such debt financing may not be favorable
to existing shareholders. We cannot provide investors with any assurance that we
will be able to raise sufficient funding from the sale of our common stock or
obtaining debt to fund our development activities and ongoing operational
expenses. In the absence of such financing, our business will likely fail. There
are no assurances that we will be able to achieve further sales of our common
stock or any other form of additional financing. If we are unable to achieve the
financing necessary to continue our plan of operations, then we will not be able
to continue our development to complete our plan of operation and our business
will fail.
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Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on the financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to stockholders
Subsequent Events
In February 2023, we entered into a one-year marketing subscription agreement in
exchange for $32,000. The price of the marketing subscription agreement is to be
paid through the issuance of our shares of common stock. The price per share, as
defined in the agreement, is to be the closing or last-traded price of our
common stock on the Effective Date of the agreement, which is February 13, 2023.
The shares will be valued for accounting purposes based on the market closing
price as of the effective date of the agreement.
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