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    BLNC   US05762T1034

BALANCE LABS, INC.

(BLNC)
Delayed OTC Markets  -  01:28 2022-10-04 pm EDT
1.000 USD   +112.77%
08/24Balance Labs : Quarterly Report for Quarter Ending June 30, 2022 (Form 10-Q)
PU
08/24BALANCE LABS, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)
AQ
08/24Balance Labs, Inc. Reports Earnings Results for the Second Quarter and Six Months Ended June 30, 2022
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BALANCE LABS, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

05/16/2022 | 04:08pm EDT

The following discussion and analysis of the condensed consolidated results of operations and financial condition of Balance Labs, Inc., and subsidiaries ("Balance Labs" or the "Company") for the three months ended March 31, 2022 should be read in conjunction with our condensed consolidated financial statements and the notes thereto that are included elsewhere in this Quarterly Report on Form 10-Q. References in this Management's Discussion and Analysis of Financial Condition and Results of Operations to "us," "we," "our," and similar terms refer to Balance Labs. This Quarterly Report includes forward-looking statements, as that term is defined in the federal securities laws, based upon current expectations that involve risks and uncertainties, such as plans, objectives, expectations, and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. Words such as "anticipate," "estimate," "plan," "continuing," "ongoing," "expect," "believe," "intend," "may," "will," "should," "could," and similar expressions are used to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain risk factors discussed in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on March 31, 2022. Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.



Overview


We were incorporated on June 5, 2014 under the laws of the State of Delaware. We are a consulting firm that provides business development and consulting services to start-up and development-stage companies. Our business model is to provide businesses in various industries with customized consulting services to meet their business needs and help them improve their business models, sales and marketing plans and internal operations, as well as introduce these businesses to experienced professional contacts that would be vital to the success of these companies.

The Company is not a registered investment company under the Investment Company Act of 1940, as amended (the "1940 Act") and does not engage primarily, in the business of investing, reinvesting, or trading in securities. The Company is not managed like an active investment vehicle, is not an investment company registered under the 1940 Act, and is not required to register under the 1940 Act.

Additionally, in accordance with the 1940 Act, Section 3(c)(1), the Company is not an Investment Company as defined by the 1940 Act because the Company does not have outstanding securities beneficially owned by more than one hundred persons and, at this time, the Company is not making and does not presently propose to make a public offering of its securities. Additionally, the Company has not and has no plans to purchase or acquire any securities issued by any registered investment company.

Our business focuses on providing advisement services to entrepreneurs and assisting business owners so that their ideas can be fully developed and implemented. Due to limited resources, lack of experienced management and competing priorities, start-up and developmental stage companies are not operating as efficiently as they can be, and therefore would benefit from an outside party that could assist in developing and executing certain strategies. We utilize our knowledge in developing businesses, share practical experiences with our clients and introduce the business owners to experienced professionals who could help these inexperienced entrepreneurs further implement their ideas. Start-ups and development stage businesses across all industries commonly experience these certain "growing pains".



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Plan of Operations


Our plan is to prepare our clients for the many inevitable challenges they will encounter and to develop a customized plan for them to overcome these obstacles, so that they can focus on marketing their product(s) and/or service(s) to their potential customers.

Although we've only worked with three clients since inception, our goal is to add and service a minimum of two to three new clients between now and the end of 2022. We're marketing our services through both personal contact and online by (a) mining our existing network of professional contacts via personal outreach programs, which will also target international prospects that may wish to enter the US market; (b) expanding our network by attending targeted conferences and professional gatherings; and (c) utilizing our website at www.balancelabs.co, plus engaging potential clients on social media, including LinkedIn, Facebook and Twitter. However, because we have a limited budget allocated for an on-line marketing campaign, we anticipate that professionals within our professional network and personal referrals from companies that are satisfied with our professional services are likely to be our most significant and efficient near-term form of marketing.

We believe that we can support our clients with our existing full-time staff, supplemented with part-time sub-contracted professionals and service providers, as necessary. Between now and the end of 2022, we intend to formalize our relationships with these subcontractors so that we can offer our clients turn-key business development products and services.

The Company incorporated or formed nine subsidiaries since 2016, Balance Labs, LLC, Balance AgroTech Co., Advanced AutoTech Co., Balance Cannabis Co., Balance Medical Marijuana Co. Krypto Ventures Inc, formerly known as KryptoBank Co. , a former subsidiary. Except for Krypto Ventures Inc, formerly known as KryptoBank Co. all of the subsidiaries are wholly owned by the company. On July 29, 2021, the Company exchanged 52,500,000 shares of common stock in Krypto Ventures, Inc. for 119,584,736 shares of common stock in Descrypto Holdings, Inc. ("Descrypto") (formerly W Technologies Inc.), an unrelated party in a Share Exchange Agreement. As a result, Krypto Ventures, Inc. has been deconsolidated and is no longer our subsidiary.

In November 2018, the Company acquired a non-controlling minority interest in a new start-up company, iGrow Systems, Inc. As of March 31, 2022, this investment has no value based on the equity method of accounting. iGrow Systems, Inc., is developing a plant growing device for home use.



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Our primary requirement for funding is for working capital in order to accommodate temporary negative cash flows from operations (see "Liquidity and Capital Resources").




Results of Operations



Three Months Ended March 31, 2022 Compared with Three Months Ended March 31, 2021.




Overview



We reported a net loss of $221,962 and of $183,173 for the three months ended March 31, 2022 and 2021, respectively. This represents a difference of $38,789, or 21.18%, primarily due to an increase in the unrealized loss of available for sale securities.




Revenues - Related Party



For the three months ended March 31, 2022 and March 31, 2021, we generated $67,500 and $0, respectively in revenue. The primary reason or the increase in revenue was due to consulting agreement with EZFill Holdings, Inc. Our president, CEO, CFO and Chairman of the Board is also the former president of EZFill Holdings, Inc. and owns approximately 28% of EZ Fill's outstanding common stock as of March 31, 2022.

General and Administrative Expenses

General and administrative expenses were $4,039 and $5,900 for the three months ended March 31, 2022 and 2021, respectively, a decrease of $1,861 or 31.54% primarily due to a decrease in rent expense offset by an increase in office expenses.




Professional Fees



Professional fees were $44,212 and $25,030 for the three months ended March 31, 2022 and 2021, respectively, an increase of $19,182 or 76.64% due to increase in accounting fees for the quarter.



Other Income and Expense


Other expenses for the three months ended March 31, 2022 was $187,919. Other expense for the three months ended March 31, 2021 was $87,852. This represents a difference of 113.90% which was attributable to an unrealized loss from available for sale securities and interest expense, offset by proceeds from sale of investment, accreted interest income and interest income on note receivable.



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Unrealized gain or loss on available for sale securities

Unrealized loss on available for sale securities for the three months ended March 31, 2022 was $131,535. Unrealized loss on available for sale securities for the three months ended March 31, 2021 was $5,500. This represents an increase of $126,035 or 2,291.55% attributable to a reduction in the stock price of the securities.

Net Loss allocated from Equity Method Investee

Net Loss allocated from Equity Method Investee for the three months ended March 31, 2022 and March 31, 2021 was $6,154 and $21,006, respectively. This represents a decrease of $14,852 or 70.70% primarily due to decrease in operating expenses by the investee.

Liquidity and Capital Resources

We measure our liquidity in a number of ways, including the following:



                                March 31,       December 31,
                                   2022             2021
                               (Unaudited)
Cash                           $    213,897     $     227,558

Working capital (deficiency) $ (3,595,066 ) $ (3,513,015 )

Availability of Additional Funds

Except for the monthly consulting fee to our CEO and Chairman of the Board and the monthly lease of our virtual office, as described elsewhere in this annual report, we currently do not have any material commitments for capital expenditures. We are actively pursuing new client relationships. Even if we were to add a new client(s), due to our current lack of a diversified client base, there could be temporary imbalances between cash receipts and cash operating expenditures, which means that we may need additional capital. The engagement revenues associated with most client engagements will self-fund the in-house and sub-contractor services we need in order to supply products and services to our clients.

As of March 31, 2022, the Company had a working capital deficiency of $3,595,066. The Company used cash in operations of $13,661. In addition, the Company is working to manage its current liabilities while it continues to make changes in operations to further improve its cash flow and liquidity position.

Net Cash Used in Operating Activities

We experienced negative cash flows from operating activities for the three months ended March 31, 2022 and March 31, 2021, in the amount of $13,661 and $127,486, respectively. This was primarily due to a net loss of $221,962 primarily offset by an unrealized loss on the value of an investment by $131,535, change in accounts receivable of $22,500, change in interest receivable of $4,216, change in accounts payable and accrued expenses by $66,078, change in accounts payable and accrued expenses -related party of $30,000, net loss from equity method investee of $5,541, and accumulated losses on unconsolidated interest in excess of investment of $613.



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Net Cash Used in Investing Activities

Net cash used in investing activities during the three months ended March 31, 2022 and March 31, 2021 was $0 and $119,000, respectively. During the three months ended March 31, 2021, cash used in investing activities was $119,000 as a note receivable to an unrelated party.

Net Cash Provided by Financing Activities

Net cash provided by financing activities during the three months ended March 31, 2022 and March 31, 2021 was $0 and $248,500, respectively. Cash provided by financing activities during the three months ended March 31, 2021 was $248,500 from short-term advances from related parties.

Our Auditors Have Issued a Going Concern Opinion

The Company's independent registered public accounting firm has expressed substantial doubt as to the Company's ability to continue as a going concern as of December 31, 2021. The unaudited condensed consolidated financial statements in this report on Form 10-Q have been prepared assuming that the Company will continue as a going concern. As discussed in the notes to the unaudited condensed consolidated financial statements, these conditions raise substantial doubt from the Company's ability to continue as a going concern. The Company's plans in regard to these matters are also described in the notes to the Company's unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

The Company anticipates the receipt of funding within such period, but there can be no assurance that it will occur. If the Company is unable to meet its internal revenue forecasts or obtain additional financing on a timely basis, it may have to delay vendor payments and/or initiate cost reductions, which would have a material adverse effect on the Company's business, financial condition and results of operations, and ultimately it could be forced to discontinue the Company's operations, liquidate, and/or seek reorganization under the U.S. bankruptcy code. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in case of equity financing.

Furthermore, COVID-19 has also caused severe disruptions in transportation and limited access to the Company's facilities resulting in limited support from its staff and professional advisors. This in turn has limited the Company's resources in promoting its services and acquiring additional capital.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates



Use of Estimates


The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Estimates may include those pertaining to accruals, stock-based compensation and income taxes. Actual results could materially differ from those estimates.



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Revenue Recognition


The Company accounts for revenues under FASB ASC 606, which is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company considers revenue realized or realizable and earned when all the five following criteria are met: (1) Identify the Contract with a Customer, (2) Identify the Performance Obligations in the Contract, (3) Determine the Transaction Price, (4) Allocate the Transaction Price to the Performance Obligations in the Contract, and (5) Recognize Revenue When (or As) the Entity Satisfies a Performance Obligation.

Fair Value of Financial Instruments

The Company measures its financial assets and liabilities in accordance with GAAP. For certain of our financial instruments, including cash, accounts payable, and the short-term portion of long-term debt, the carrying amounts approximate fair value due to their short maturities.

We adopted accounting guidance for financial and non-financial assets and liabilities (ASC 820). This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

? Level 1: Observable inputs such as quoted prices (unadjusted) in active markets

for identical assets or liabilities.

? Level 2: Inputs other than quoted prices that are observable, either directly

or indirectly. These include quoted prices for similar assets or liabilities in

active markets and quoted prices for identical or similar assets or liabilities

in markets that are not active.

? Level 3: Unobservable inputs in which little or no market data exists,

therefore developed using estimates and assumptions developed by us, which

reflect those that a market participant would use.

Recent Accounting Standards

We have implemented all new accounting standards that are in effect and may impact our consolidated financial statements and do not believe that there are any other new accounting standards that have been issued that might have a material impact on our financial position or results of operations.

© Edgar Online, source Glimpses

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Financials (USD)
Sales 2021 0,62 M - -
Net income 2021 -0,80 M - -
Net Debt 2021 2,22 M - -
P/E ratio 2021 -18,0x
Yield 2021 -
Capitalization 21,7 M 21,7 M -
EV / Sales 2020 9,27x
EV / Sales 2021 28,5x
Nbr of Employees 4
Free-Float 13,5%
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Managers and Directors
Michael D. Farkas Chairman, President & Chief Executive Officer
Ari Feldman Chief Financial Officer
Carmen Villegas Secretary & Director
Aviv Hillo Director
Derek Rawden-Lewis Vice President-Business Development
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