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
Nature of Business -
On
On
Our Business
Along with our website currently under development, autoparts4less.com (as described below), that we are developing into our flagship website, we operate 3 niche websites through which we sell auto parts that are direct listed across marketplace and social media sites, including marketing products through online marketplaces and social media platforms, such as Facebook, Instagram, YouTube and Google:
• LiftKits4LESS.com* • Bumpers4LESS.com* • TruckBedCovers4LESS.com* - 22 -
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We target online consumers' buying habits by shifting away from "all things to all people" web sites to highly targeted niche websites to quickly respond to market forces.
Our LiftKit4Less.com web site, represents:
• Approximately 179,000 Parts • From 46 Manufacturers Can Search Products Listed • 9 Categories Including Lights & Exterior Accessories • 66 Subcategories Including Wheels, Electronics & Interior Parts Select Parts for Over • 28 Makes of Vehicles Such asFord , Chevy and Land Rover • 100 Models Including Trucks, SUVs and Jeeps
AutoParts4Less.com Launch Expected Timeline
4Less plans to finish development and beta testing with goal to launch AutoParts4Less.com for aftermarket auto parts manufacturers to sell their parts direct to the public.
• Development TeamMarch 2020 India Development Team is hired. • PlatformAmazon Web Services (AWS) cloud computing platform chosen to operate AutoParts4Less.com • Marketing Begin marketing marketplace services to aftermarket manufacturers inDecember 2020 • Data Input Manufacturers start loading their parts info 1st quarter 2021
Our
• Manufacturers create an account allowing easy onboarding of products. • Offer premium placement in search results. • Ratings and reviews can be responded to. • Ability to answer basic questions from purchasers. • How-to video galleries. • Keyword advertising. • Promote discounts on products. • 4Less can push product lines to other marketplaces such as eBay and Amazon. Distribution
Our distribution is accomplished as follows:
• Direct drop ship from manufacturers to consumers - Approximately 80% • Direct drop ship from Warehouse Inventory Companies to consumers - Approximately 15% • Consumer Purchases directly through our own warehouses - Approximately 5% - 23 -
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Sales
Our sales are derived from the following:
• Proprietary websites. 57% of our sales are currently generated through our
own websites. We intend to build and launch additional niche websites
• Third Party Websites (such as eBay and Walmart)- We sell our products on
third party websites and pay fees to these websites in connection with each sale. Business Strategies • Continually develop best in class technological modules to increase visitor conversions. • Work to develop and launch the website www.autoparts4less.com by approximately mid-to-late FY2022 into what we believe will be the first standalone multi-vendor automotive parts marketplace.
Results of Operations for the Three Months Ended
The following table shows our results of operations for the three months endedApril 30, 2021 and 2020. The historical results presented below are not necessarily indicative of the results that may be expected for any future period. Change 2021 2020 $ % Total Revenues 3,728,784 2,000,071 1,728,713 86 % Gross Profit 962,206 571,767 390,439 68 %
Total Operating Expenses 2,204,564 780,728 1,423,836 182 % Total Other Income (Expense) 674,801 1,395,859 (721,058 ) (52 %) Net Income (Loss)
(567,557 ) 1,186,898 (1,754,455 ) (148 %) Revenue
The following table shows revenue split between proprietary and third-party
website revenue for the three months ended
Change 2021 2020 $ % Proprietary website revenue$ 2,123,101 1,109,106$ 1,013,995 91 % Third party website revenue 1,605,683 890,965 714,718 80 % Total Revenue$ 3,728,784 $ 2,000,071 $ 1,728,713 86 %
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 91%.
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Gross Profit
We had gross profit of
Operating Expenses
The following table shows our operating expenses for the three months ended
Operating expenses Change 2021 2020 $ % Depreciation 10,735 6,647 4,088 62 % Postage, Shipping and Freight 193,187 113,138 80,049 71 % Marketing and Advertising 608,034 18,068 589,966 3265 % E Commerce Services, Commissions and Fees 416,127 166,419 249,708 150 % Operating lease cost 30,479 34,079 (3,600 ) (11 %) Personnel Costs 297,493 266,735 30,758 12 % General and Administrative 648,509 175,642 472,867 269 % Total Operating Expenses 2,204,564 780,728 1,423,836 182 %
• Depreciation increased by
• Postage shipping and freight increased by$80,049 due to higher sales.
• Marketing and advertising increased by
• E Commerce Services, Commissions and Fees increased by
• Operating Lease Cost decreased by
• Personnel Costs increased by
• General and Administrative in increased by
Other Income (Expense)
The following table shows our other income and expenses for the three months
ended
Change Other Income (Expense) 2021 2020 $ % Gain (Loss) on Derivatives 4,187 (74,780 ) 78,967 (106 %)
Gain on Settlement of Debt 914,049 2,172,646 (1,258,597 ) (58 %) Amortization of Debt Discount (128,528 ) (578,913 ) 450,385 (78 %) Interest Expense
(114,907 ) (123,094 ) 8,187 (7 %)
Total Other Income (Expense) 674,801 1,395,859 (721,058 ) (52 %)
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The changes above can be explained by the reduction in convertible debt that
started in the prior year's quarter ended
We had a net loss of
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. For the three months ended
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:
April 30, 2021 January 31, 2021 Current assets$ 1,761,100 $ 715,083 Current liabilities 4,461,893 5,059,138
Working capital (deficits)
Net cash used in operations for the three months ended
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