Readers are urged to carefully review and consider the various disclosures made
by us in this report and in our other reports filed with the Securities and
Exchange Commission. Important factors currently known to management could cause
actual results to differ materially from those in forward-looking statements. We
undertake no obligation to update or revise forward-looking statements to
reflect changed assumptions, the occurrence of unanticipated events or changes
in the future operating results over time. We believe that our assumptions are
based upon reasonable data derived from and known about our business and
operations. No assurances are made that actual results of operations or the
results of our future activities will not differ materially from our
assumptions. Factors that could cause differences include, but are not limited
to, expected market demand for our products, fluctuations in pricing for our
products, and competition. Readers are cautioned not to place undue reliance on
these forward-looking statements, which are only predictions and speak only as
of the date hereof. When used in the throughout, the words "may", "will",
"anticipate", "believe", "estimate", "expect", "future", "intend", "plan", or
the negative of these terms and similar expressions as they relate to the
Company or the Company's management are intended to identify forward-looking
statements. Such statements reflect the current view of the Company with respect
to future events and we caution you that these statements are not guarantees of
future performance or events and are subject to risks, assumptions, and other
factors.
The following discussion provides information that management believes is
relevant to an assessment and understanding of our past financial condition and
plan of operations. The discussion below should be read in conjunction with the
consolidated financial statements and related notes thereto included elsewhere
in this annual report.
About Beyond Commerce
Beyond Commerce, Inc. was formed as a Nevada corporation on January 12, 2006.We
are focused on business combinations of "big data" companies in global B2B
internet marketing analytics, technologies and services. Our objective is to
develop and deploy disruptive strategic software technology that will build on
organic growth potential and to exploit cross-selling opportunities. We plan to
offer a cohesive global digital product and services platform to provide clients
with a single point of contact for their big data, marketing and related sales
initiatives. We believe our business model will ensure that information will
remain secure and private, as necessitated by the current market climate.
In addition, we provide solutions which facilitate the exchange of information
and data transactions between supply chain participants, such as manufacturers,
retailers, distributors and financial institutions, with the ultimate goal of
automating potential client internal processes thereby increasing productivity
and lowering costs. We plan to develop proprietary algorithms which it will
embed in the planned software to enable clients to access data and gain insight
into their business, through that data, leading to improved internal decision
making.
We currently owns and operates a data company and is actively seeking
acquisition opportunities in high growth sectors such as psychedelics,
cryptocurrency, ESports and Logistics among others. Our strategy is to identify
companies in the early stages of development or growth, acquire them and provide
these companies capital in order to accelerate their development and growth with
the intention to ultimately sell these companies.
RESULTS OF OPERATIONS
Through our Service 800 Inc. subsidiary, many of our clients, such as GE
Healthcare, Audiology System, Inc., 3M Healthcare, Johnson & Johnson Vision
Care, Albany Molecular Research Inc., Sakura Finetek, Abbott Diagnostics,
Biosense Webster, a Johnson & Johnson Company and Medtronic to name a few took
the time during the pandemic to begin strategic planning with Service 800 to
grow their business with the Company through renewals, expansion, and developing
better ways to grow our programs with each and every one of them for the future.
This select market segment continues to be a major source of revenue for the
Company as we expand our services within this business segment. Renewals have
been strong during the last nine months, and we anticipate revenue getting back
in line with exceeding our expectations as we progress further into the year.
All renewals that have taken place are on a minimum of a one to two-year term
with an auto renewal taking place when the contract expires. The pandemic helped
our customers recognize the value that Service 800 brings to its clients in the
form of providing valuable information to not only help their growth within
their own companies, but also help them be better providers to their customers
as well. We continue to look forward to growth into each division of these
companies and expansion to exceed expectations that have been set. We value
these customers and seek to achieve positive growth we have set for the
remainder of the year and moving onwards for future years to come.
For the Three Months Ended June 30, 2022 and June 30, 2021
Revenue
Revenue generated for the three months ended June 30, 2022 was $1,038,092
compared to $1,120,599 from the comparable three-month period in 2021.
Operating Expenses
For three months ended June 30, 2022, operating expenses were $1,420,404, and
for the three months ended June 30, 2021, operating expenses were $1,977,496 in
part to a reduction in professional fees of $388,147 and payroll expenses of
$147,746. Cost of revenues decreased by $25,881 due to a reduction in revenues
and general and administrative expense increased by $16,349.
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Non-Operating Income (Expense)
The Company reported non-operating expense of $245,596 for the three months
ended June 30, 2022, as compared to $194,420 for the three months ended June 30,
2021 mainly because of the recognition of gain on loan forgiveness of the PPP
loan of $505,111 in the three months ended June 30, 2021.
Net Income (loss)
Loss from operations for the three months ended June 30, 2022 and 2021 was
$627,908 and 1,047,316, respectively. For three months ended June 30, 2022, the
Company incurred a net loss of $623,321 as compared to a net loss of $1,047,140
for the three months ended June 30, 2021 due to the reduction of operating costs
as detailed above, and the absence of the loan forgiveness relating to the PPP
loan of $505,111, which occurred in 2021.
For the Six Months Ended June 30, 2022 and June 30, 2021
Revenue
Revenue generated for the six months ended June 30, 2022 was $2,047,500 compared
to $2,234,118 from the comparable six-month period in 2021.
Operating Expenses
For six months ended June 30, 2022, operating expenses were $2,981,357 and for
the six months ended June 30, 2021, operating expenses were $3,595,255. The
Company's cost of revenues decreased corresponding to a decrease in revenues in
the comparable periods. The Company was able to achieve a reduction in
professional fees of $332,803 and payroll expense of $95,929 during the six
months ended June 30, 2022 compared to the same period in 2021. General and
administrative expenses decreased by $35,897 and depreciation expense decreased
by $32,506 in 2022 compared to the same six month period ended June 30, 2021.
Non-Operating Income (Expense)
The Company reported non-operating expense of $345,440 for the six months ended
June 30, 2022, as compared to $5,985,225 for the six months ended June 30, 2021
due mainly to the recording of derivative related expenses of $2,944,750, loss
on extinguishment of debt of $3,956,699 and offset in part by the gain on the
forgiveness of the PPP loan of $505,111 during the six months ended June 30,
2021.
During the six months ended June 30, 2022, the Company incurred interest expense
of $339,012, recognized an expense in the change of the derivative liability of
$12,909 offset in part by a gain on debt forgiveness of $6,481.
Net Income (loss)
Loss from operations for the six months ended June 30, 2022 and 2021 was
$1,279,297 and 7,346,362, respectively due to the factors detailed above and
noting that the derivative related expenses and loss on extinguishment of debt
occurring in 2021 did not continue in 2022.
Purchase of Significant Equipment
We do not anticipate the purchase or sale of any plant or significant equipment
during the next twelve (12) months.
Going Concern
There is substantial doubt about our ability to continue as a going concern.
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As of June 30, 2022, we had an accumulated deficit of $69,078,721 and a working
capital deficit of $4,685,041. These conditions raise substantial doubt about
our ability to continue as a going concern. We intend to continue relying upon
the issuance of debt and equity securities to finance our operations. In this
regard, we are restricted by the number of shares available for issuance in an
equity financing, and we will likely need to increase our authorized capital in
order to take advantage of such financing. However, there can be no assurance
that we will be successful in obtaining shareholder approval to increase our
authorized capital, that we will be successful in raising the funds necessary to
maintain operations, or that a self-supporting level of operations will ever be
achieved. The likely outcome of these future events is indeterminable. Our
financial statements do not include any adjustment to reflect the possible
future effect on the recoverability and classification of the assets or the
amounts and classification of liabilities that may result should we cease to
continue as a going concern.
Liquidity and Capital Resources
Our ability to continue as a going concern is dependent on our ability to raise
additional capital and implement our business plan. Since inception, we have
been funded by related parties through capital investment and borrowing of
funds.
We had total current assets of $1,912,215 and $1,607,347 as of June 30, 2022 and
December 31, 2021, respectively. Current assets would consist primarily of cash
and accounts receivable. The Company had a $69,078,721 accumulated deficit on
its balance sheet as of June 30, 2022.
We had total current liabilities of 6,597,256 and $5,414,772 as of June 30,
2022 and December 31, 2021, respectively. Current liabilities consisted
primarily of the derivative liability, accounts payable, accrued payroll and
payroll taxes, related party debt, conventional and convertible debt, lease
liability, accrued loss contingency, and accrued interest. In the current six
months there were approximate increases in accrued interest of $271,000 and in
accrued payroll liabilities of $52,000. Short-term borrowings - related party
decreased by $150,000 due to the partial conversion on the note for stock.
Short-term borrowings from nonrelated parties increased by $1,050,000 joined by
an increase in accounts payable of $49,000, an increase in the current portion
of the lease liability value of $4,000 and an increase in derivative liabilities
of $13,000.
We had a working capital deficit of $4,685,041 and $3,807,425 as of June 30,
2022 and December 31, 2021, respectively, which increase is mainly due to the
net increase in short-term borrowings during the three months ended June 30,
2022.
Cash Flow from Operating Activities
For the six months ended June 30, 2022 and 2021, cash used in operating
activities was $834,765 and $1,315,873 respectively. This decrease of cash used
is attributable to the decreased cash requirements for the operations of the
Company which recorded a loss from operations of $933,857 for the six months
ended June 30, 2022 compared to $1,361,137 for the same period in 2021.
Cash Flow from Investing Activities
No cash was used in investing activities for the six months ended June 30, 2022
and 2021.
Cash Flow from Financing Activities
For the six months ended June 30, 2022 and 2021, cash provided by financing
activities was $1,000,000 and $1,702,342, respectively, due to proceeds from
notes payable of 1,000,000 and 775,000, respectively, and the sale of Series C
Preferred Stock of $0 and $1,000,000, respectively.
Contractual Obligations
As a "smaller reporting company," we are not required to provide tabular
disclosure of contractual obligations.
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Inflation
Inflation and changing prices have not had a material effect on our business and
we do not expect that inflation or changing prices will materially affect our
business in the foreseeable future.
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity or
capital expenditures or capital resources that is material to an investor in our
securities.
Seasonality
In the past, our operating results and operating cash flows historically have
not been subject to seasonal variations. This pattern may change, however, in
the event that we succeed in bringing our planned products to market.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations
is based on our unaudited condensed consolidated financial statements, which
have been prepared in accordance with U.S. GAAP. The preparation of these
unaudited condensed 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 liabilities. On an
on-going basis, we evaluate past judgments and our estimates, including those
related to allowance for doubtful accounts, allowance for inventory write-downs
and write offs, deferred income taxes, provision for contractual obligations and
our ability to continue as a going concern. We base our estimates on historical
experience and on various other assumptions that we believe 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
apparent from other sources. Actual results may differ from these estimates
under different assumptions or conditions.
Note 2 to the consolidated financial statements, presented in our Annual Report
on Form 10-K for the fiscal year ended December 31, 2021, describes the critical
accounting estimates and policies used in preparation of our consolidated
financial statements. There were no significant changes in our critical
accounting estimates during the three months ended June 30, 2022.
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BEYOND COMMERCE, INC. 
