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 own and operate 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.
On April 8, 2022, we entered into a letter of intent (the "Letter of Intent")
with Electric Built Inc., a provider of electric vehicle design and engineering
services ("Electric Built"), pursuant to which the Company will acquire the
business of Electric Built (the "Transaction"). The Transaction shall provide
the Company with exclusive access to Electric Built's commercial business
know-how and business connections and operations, with such structure to be
negotiated by the parties. Consummation of the Transaction shall be subject to
the execution of a mutually satisfactory definitive agreement by the Company and
Electric Built (the "Definitive Agreement"). Pursuant to the Letter of Intent,
in exchange for exclusivity in negotiating the transaction, the Company has
issued $50,000 in shares of restricted common stock of the Company, to be
released at Closing of the Definitive Agreement. Additionally, the Company has
been given a right of first refusal to purchase the assets, intellectual
property and all other assorted property of Electrogistics, Inc.
The Company and Electric Built entered into a Stock Purchase Agreement (the
"SPA") dated as of June 27, 2022, setting forth the definitive terms and
condition for the Transaction, whereby the Company would acquire, for a balance
of $950,000 in the form of shares of the Company's common stock, all equity of
Electric Built. Pursuant to the SPA, the SPA is subject to termination if due
diligence review and required conditions for closing have not been satisfied by
September 20, 2022 (the "Termination Date").
On September 14, 2022, the Company and Electric Built entered into a First
Amendment to the SPA (the "Amendment"), whereby the Termination Date was
extended until October 31, 2022, and then, on October 24, 2022, Electric Built
requested that the October 2022 Termination Date be extended (the "Extension"),
to accommodate Electric Built's need to relocate its operations, among other
reasons. The Company has accepted such request and the SPA, as amended by the
Amendment, is subject to the Extension,
19
Table of Contents
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 September 30, 2022 and September 30, 2021
Revenue
Revenue generated for the three months ended September 30, 2022 was $975,636
compared to $1,024,501 from the comparable three-month period in 2021.
Operating Expenses
For three months ended September 30, 2022, operating expenses were $1,300,442,
and for the three months ended September 30, 2021, operating expenses were
$1,540,241 in part to a reduction in professional fees of $218,885. Cost of
revenues decreased by $29,164 due to a reduction in revenues and general and
administrative expense increased by $13,545.
Non-Operating Income (Expense)
During the three months ended September 30, 2022, the Company incurred interest
expense of $195,941 and recognized other expense in the change of the derivative
liability of $442,811.
The Company incurred interest expense of $189,830, recognized an expense due to
the change in derivative liability of $223,676 and recorded net expense relating
to debt forgiveness, amortization of debt discount and loss on extinguishment of
debt of $530,015 for the three months ended September 30, 2021.
Net Income (loss)
Loss from operations for the three months ended September 30, 2022 and 2021 was
$324,806 and 515,740, respectively. For three months ended September 30, 2022,
the Company incurred a net loss of $958,971 as compared to a net loss of
$1,454,674 for the three months ended September 30, 2021 due to the reduction of
operating costs as detailed above, and the loss on extinguishment of debt of
$1,131,856, which occurred in 2021.
For the Nine Months Ended September 30, 2022 and September 30, 2021
Revenue
Revenue generated for the nine months ended September 30, 2022 was $3,023,137
compared to $3,258,619 from the comparable nine-month period in 2021
Operating Expenses
For nine months ended September 30, 2022, operating expenses were $4,281,799 and
for the nine months ended September 30, 2021, operating expenses were
$5,135,496. The Company's cost of revenues decreased by $145,670 corresponding
to a decrease in revenues in the comparable periods. The Company was able to
achieve a reduction in professional fees of $581,523 and payroll expense of
$78,140 during the nine months ended September 30, 2022 compared to the same
period in 2021. General and administrative expenses increased by $7,227 and
depreciation expense decreased by $55,591 in 2022 compared to the same
nine-month period ended September 30, 2021.
20
Table of Contents
Non-Operating Income (Expense)
The Company reported non-operating expense of $984,191 for the nine months ended
September 30, 2022, as compared to $6,928,746 for the nine months ended
September 30, 2021 due mainly to the recording of derivative related expenses of
$2,944,750, loss on extinguishment of debt of $5,088,555 and offset in part by
the gain on the forgiveness of the PPP loan of $1,133,514 during the nine months
ended September 30, 2021.
During the nine months ended September 30, 2022, the Company incurred interest
expense of $534,952 and recognized other expense from the change of the
derivative liability of $455,720.
Net Income (loss)
Loss from operations for the nine months ended September 30, 2022 and 2021 was
$1,258,662 and 1,876,877, 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.
The net loss for the nine months ended September 30, 2022 and 2021 was
$2,229,093 and $8,791,919, respectively.
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.
As of September 30, 2022, we had an accumulated deficit of $70,037,691 and a
working capital deficit of $5,552,398. 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 $1,636,311 and $1,607,347 as of September 30,
2022 and December 31, 2021, respectively. Current assets would consist primarily
of cash and accounts receivable. The Company had a $70,037,691 accumulated
deficit on its balance sheet as of September 30, 2022.
We had total current liabilities of $7,191,709 and $5,414,772 as of September
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 nine
months there were approximate increases in accrued interest of $417,000 and in
accrued payroll liabilities of $45,000. 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 $1,100,000 joined by
a decrease in accounts payable of $75,000, a decrease in the current portion of
the lease liability value of $16,000 and an increase in derivative liabilities
of $455,720.
21
Table of Contents
We had a working capital deficit of $5,552,398 and $3,807,425 as of September
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
September 30, 2022.
Cash Flow from Operating Activities
For the nine months ended September 30, 2022 and 2021, cash used in operating
activities was $959,652 and $1,464,373 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 $1,258,662 for the nine months
ended September 30, 2022 compared to $1,876,877 for the same period in 2021.
Cash Flow from Investing Activities
No cash was used in investing activities for the nine months ended September 30,
2022 and 2021.
Cash Flow from Financing Activities
For the nine months ended September 30, 2022 and 2021, cash provided by
financing activities was $1,000,000 and $1,683,684, 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.
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.
22
Table of Contents
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 September 30, 2022.
© Edgar Online, source Glimpses
BEYOND COMMERCE, INC. 
