FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, which we refer to in this quarterly report as the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, which we refer to in this quarterly report as the Exchange Act. Forward-looking statements are not statements of historical fact but rather reflect our current expectations, estimates and predictions about future results and events. These statements may use words such as "anticipate," "believe," "estimate," "expect," "intend," "predict," "project" and similar expressions as they relate to us or our management. When we make forward-looking statements, we are basing them on our management's beliefs and assumptions, using information currently available to us. These forward-looking statements are subject to risks, uncertainties and assumptions, including but not limited to, risks, uncertainties and assumptions discussed in this quarterly report. Factors that can cause or contribute to these differences include those described under the headings "Risk Factors" and "Management Discussion and Analysis and Plan of Operation."
If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statement you read in this quarterly report reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. All subsequent written and oral forward-looking statements attributable to us or individuals acting on our behalf are expressly qualified in their entirety by this paragraph. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this quarterly report. The Company expressly disclaims any obligation to release publicly any updates or revisions to these forward-looking statements to reflect any change in its views or expectations. The Company can give no assurances that such forward-looking statements will prove to be correct.
Company
The
Nature of Business -
On
On
Our Business
Like many small businesses,
Originally the company listed their auto parts in the different marketplaces such as Amazon, eBay, Walmart and Jet.
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Starting in 2016 the company began investing to become their own ecommerce platform thereby allowing their auto parts to be direct listed across marketplace and social media sites. Technical achievements including CRM system, warehouse integration API, warehouse inventory software to name a few.
In 2019, shortly after the share exchange with
On
In
The platform upgrade was completed in the 1st quarter FYE 2023, with marketplace sales expected to begin in 3rd quarter 2023.
On
Competition
We directly compete for buyers to use our web sites over current e-commerce sites as well as sellers that utilize major marketplaces such as Amazon and eBay. However, we believe our specialty ecommerce website liftkits4less.com offers substantial value-added content including installation guides, install videos, high impact photos, order customization and live chat with a technical expert.
Additionally, we believe that our automotive parts marketplace AutoParts4less.com, with no known large challengers presently in the space outside of "all things to all people" online marketplaces Amazon and eBay, has the opportunity to quickly be branded when launched as the auto part's industry premier marketplace just as sites like Etsy, Wayfair, Uber and Chewey's have been able to successfully do in their industries.
Results of Operations For the Six Months Ended
The following table shows our results of operations for the six months endedJuly 31, 2022 , and 2021. The historical results presented below are not necessarily indicative of the results that may be expected for any future period. Change 2022 2021 $ % Total Revenues$ 3,071,052 $ 6,315,457 $ (3,244,405 ) (51% ) Gross Profit 621,405 1,614,895 (993,490 ) (62% )
Total Operating Expenses 4,368,251 4,285,558 82,693 2% Total Other Income (Expense) (4,350,238 ) 350,857 (4,701,095 ) (1340% ) Net Income (Loss)
$ (8,097,084 ) $ (2,319,806 ) $ (5,777,278 ) 249% Revenue
The following table shows revenue split between proprietary and third-party
website revenue for the six months ended
Change 2022 2021 $ % Proprietary website revenue$ 2,138,837 3,946,810$ (1,807,973 ) (46% ) Third party website revenue 932,215 2,368,647 (1,436,432 ) (61% ) Total Revenue$ 3,071,052 $ 6,315,457 $ (3,244,405 ) (51% ) - 29 -
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We had total revenue of
The Company's focus continues in growing its proprietary website revenues and the Company was successful in that, increasing its proprietary website revenue by 64%. The company believes this strategy will lead to higher revenues and lower overall costs in the future. Third party website revenue fell by 6% due to listing removals which were a result of unfulfilled orders due to manufacturers failure to provide products in a timely basis.
Gross Profit
We had gross profit of
Operating Expenses The following table shows our operating expenses for the six months endedJuly 31, 2022 , and 2021: Change Operating Expenses 2022 2021 $ % Depreciation$ 25,844 $ 23,451 2,393 10% Postage, Shipping and Freight 114,949 335,749 (220,800 ) (66% ) Marketing and Advertising 514,826 1,267,324 (752,498 ) (59% ) E Commerce Services, Commissions and ) ) Fees 680,722 725,737 (45,015 (6% Operating lease cost 60,958 60,959 (1 ) 0% Personnel Costs 373,315 759,193 (385,878 ) (51% ) General and Administrative 2,597,637 1,113,145 1,484,492 133% Total Operating Expenses$ 4,368,251 $ 4,285,558 82,693 2%
• Depreciation increased by
• Postage shipping and freight decreased by$220,800 due to lower sales.
• Marketing and advertising decreased by
• E Commerce Services, Commissions and Fees decreased by
• Personnel Costs decreased by
• General and Administrative increased by
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Table of Contents Other Income (Expense) The following table shows our other income and expenses for the six months endedJuly 31, 2022 , and 2021: Change Other Income (Expense) 2022 2022 $ % Gain (Loss) on Sale of Property and $ $ Equipment - 20,345 (20,345 ) 100% Gain (Loss) on Derivatives (657,626 ) (12,107 ) (645,519 ) 5,332% Gain on Settlement of Debt 9,411 963,366 (953,955 ) (99% ) Amortization of Debt Discount (2,376,607 ) (311,936 ) (2,064,671 ) 662% Interest Expense (1,325,416 ) (308,811 ) (1,016,605 ) 329% Total Other Income (Expense)$ (4,350,238 ) $ 350,857 (4,701,095 ) (1,340% )
The changes above can be explained by the increase in convertible debt that
started at the end of last fiscal year and continued for the six months ended
We had net loss of
Results of Operations for the Three Months Ended
The following table shows our results of operations for the three months endedJuly 31, 2022 , and 2021. The historical results presented below are not necessarily indicative of the results that may be expected for any future period. Change 2022 2021 $ % Total Revenues$ 1,341,122 $ 2,586,673 $ (1,245,551 ) (48% ) Gross Profit 359,478 652,689 (293,211 ) (45% )
Total Operating Expenses 3,085,296 2,080,994 1,004,302 48% Total Other Income (Expense) (2,777,108 ) (323,944 ) (2,453,164 ) 757% Net Income (Loss)
$ (5,502,926 ) $ (1,752,249 ) $ (3,750,677 ) 214% Revenue
The following table shows revenue split between proprietary and third-party
website revenue for the three months ended
Change 2022 2021 $ % Proprietary website revenue$ 902,594 1,823,709$ (921,115 ) (51% ) Third party website revenue 438,528 762,964 (324,436 ) (43% ) Total Revenue$ 1,341,122 $ 2,586,673 $ (1,245,551 ) (48% )
We had total revenue of
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Table of Contents Gross Profit
We had gross profit of
Operating Expenses The following table shows our operating expenses for the three months endedJuly 31, 2022 and 2021: Change Operating Expenses 2022 2021 $ % Depreciation$ 12,906 $ 12,716 190 1% Postage, Shipping and Freight 40,251 142,562 (102,311 ) (72% ) Marketing and Advertising 240,399 659,290 (418,891 ) (64% ) E Commerce Services, Commissions and Fees 350,025 309,610 40,415 13% Operating lease cost 30,479 30,480 (1 ) 0% Personnel Costs 168,016 461,700 (293,684 ) (64% ) General and Administrative 2,243,220 464,636 1,778,584 383% Total Operating Expenses$ 3,085,296 $ 2,080,994 1,004,302 48% • Depreciation increased by$190 . • Postage shipping and freight decreased by$102,311 due to lower sales.
• Marketing and advertising decreased by
• E Commerce Services, Commissions and Fees increased by
• Personnel Costs decreased by
• General and Administrative increased by
Other Income (Expense)
The following table shows our other income and expenses for the three months
ended
Change Other Income (Expense) 2022 2022 $ % Gain (Loss) on Sale of Property and $ $ Equipment - 20,345 (20,345 ) 100% Gain (Loss) on Derivatives (319,889 ) (16,294 ) (303,595 ) 1863% Gain on Settlement of Debt 5,822 49,317 (43,495 ) (88% ) Amortization of Debt Discount (1,651,327 ) (183,408 ) (1,467,919 ) 800% Interest Expense (811,714 ) (193,904 ) (617,810 ) 319% Total Other Income (Expense)$ (2,777,108 ) $ (323,944 ) (2,453,164 ) 757%
The changes above can be explained by the increase in convertible debt this
quarter ended
We had a net loss of
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Liquidity and Capital Resources
Management believes that we will continue to incur losses for the immediate future. Therefore, we will need additional equity or debt financing until we can achieve profitability and positive cash flows from operating activities, if ever. These conditions raise substantial doubt about our ability to continue as a going concern. Our unaudited consolidated financial statements do not include any adjustments relating to the recovery of assets or the classification of liabilities that may be necessary should we be unable to continue as a going concern.
As of
The successful outcome of future activities cannot be determined at this time and there is no assurance that, if achieved, we will have sufficient funds to execute our intended business plan or generate positive operating results.
Capital Resources
The following table summarizes total current assets, liabilities and working capital (deficit) for the periods indicated:
July 31, 2022 January 31, 2022 Current assets$ 572,640 $ 564,615 Current liabilities 12,520,672 8,890,462
Working capital (deficits)
Net cash used in operations for the six months ended
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