BOTS, INC. Management's Discussion and Analysis of Results of Financial Condition and
Results of Operations ("MD&A") should be read in conjunction with the financial
statements included herein. Further, this MD&A should be read in conjunction
with the Company's Financial Statements and Notes to Financial Statements
included in this Annual Report on Form 10-K for the years ended
Management's Discussion and Analysis may contain various "forward looking
statements" within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, regarding future events or the future financial performance of
the Company that involve risks and uncertainties. Certain statements included in
this Form 10-K, including, without limitation, statements related to anticipated
cash flow sources and uses, and words including but not limited to
"anticipates", "believes", "plans", "expects", "future" and similar statements
or expressions, identify forward looking statements. Any forward-looking
statements herein are subject to certain risks and uncertainties in the
Company's business and any changes in current accounting rules, all of which may
be beyond the control of the Company. The Company has adopted the most
conservative recognition of revenue based on the most astringent guidelines of
the
Undue reliance should not be placed on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to update these forward-looking statements.
Any future equity financing will cause existing shareholders to experience dilution of their interest in our Company. In the event we are not successful in raising additional financing, we anticipate that we will not be able to proceed with our business plan. In such a case, we may decide to discontinue our current business plan and seek other business opportunities in the resource sector. Any business opportunity would require our management to perform diligence on possible acquisitions.
During this period, we will need to maintain our periodic filings with the appropriate regulatory authorities and will incur legal and accounting costs. In the event no other such opportunities are available, and we cannot raise additional capital to sustain operations, we may be forced to discontinue business. We do not have any specific alternative business opportunities in mind and have not planned for any such contingency.
The Company's MD&A is comprised of significant accounting estimates made in the normal course of its operations, overview of the Company's business conditions, results of operations, liquidity and capital resources and contractual obligations.
The discussion and analysis of the Company's financial condition and results of
operations is based upon its financial statements, which have been prepared in
accordance with generally accepted accounting principles generally accepted in
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OVERVIEW
Blockchain and Cryptocurrencies Generally
We are in the process of transitioning into the blockchain and robotics automation industries.
Distributed blockchain technology is a decentralized and encrypted ledger that is designed to offer a secure, efficient, verifiable, and permanent way of storing records and other information without the need for intermediaries. Cryptocurrencies serve multiple purposes. They can serve as a medium of exchange, store of value or unit of account. Examples of cryptocurrencies include: bitcoin, bitcoin cash, and litecoin. Blockchain technologies are being evaluated for a multitude of industries due to the belief in their ability to have a significant impact in many areas of business, finance, information management, and governance.
Cryptocurrencies are decentralized currencies that enable near instantaneous transfers. Transactions occur via an open source, cryptographic protocol platform which uses peer-to-peer technology to operate with no central authority. The online network hosts the public transaction ledger, known as the blockchain, and each cryptocurrency is associated with a source code that comprises the basis for the cryptographic and algorithmic protocols governing the blockchain. In a cryptocurrency network, every peer has its own copy of the blockchain, which contains records of every historical transaction - effectively containing records of all account balances. Each account is identified solely by its unique public key (making it effectively anonymous) and is secured with its associated private key (kept secret, like a password). The combination of private and public cryptographic keys constitutes a secure digital identity in the form of a digital signature, providing strong control of ownership.
No single entity owns or operates the network. The infrastructure is
collectively maintained by a decentralized public user base. As the network is
decentralized, it does not rely on either governmental authorities or financial
institutions to create, transmit or determine the value of the currency units.
Rather, the value is determined by market factors, supply and demand for the
units, the prices being set in transfers by mutual agreement or barter among
transacting parties, as well as the number of merchants that may accept the
cryptocurrency. Since transfers do not require involvement of intermediaries or
third parties, there are currently little to no transaction costs in direct
peer-to-peer transactions. Units of cryptocurrency can be converted to fiat
currencies, such as the US dollar, at rates determined on various exchanges,
such as Cumberland, Coinsquare (in
We believe cryptocurrencies offer many advantages over traditional, fiat currencies, although many of these factors also present potential disadvantages and may introduce additional risks, including:
· acting as a fraud deterrent, as cryptocurrencies are digital and cannot be
counterfeited or reversed arbitrarily by a sender?
· immediate settlement?
· elimination of counterparty risk?
· no trusted intermediary required?
· lower fees?
· identity theft prevention?
· accessible by everyone?
· transactions are verified and protected through a confirmation process,
which prevents the problem of double spending?
· decentralized - no central authority (government or financial
institution)? and
· recognized universally and not bound by government imposed or market
exchange rates.
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However, cryptocurrencies may not provide all of the benefits they purport to offer at all or at any time.
Bitcoin was first introduced in 2008 and was first introduced as a means of exchange in 2009. Bitcoin is a consensus network that enables a new payment system and a completely new form of digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, we believe bitcoin can be viewed as cash for the Internet. The bitcoin network shares a public ledger called the "blockchain." This ledger contains every transaction ever processed, allowing a user's computer to verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses, allowing all users to have full control over sending bitcoins currency rewards from their own bitcoin addresses. In addition, anyone can process transactions using the computing power of specialized hardware and earn a reward in bitcoins for this service. This process is often called "mining."
As with many new and emerging technologies, there are potentially significant risks. Businesses (including the Company) which are seeking to develop, promote, adopt, transact or rely upon blockchain technologies and cryptocurrencies have a limited track record and operate within an untested new environment. These risks are not only related to the businesses the Company pursues, but the sector and industry as a whole, as well as the entirety of the concept behind blockchain and cryptocurrency as value. Factors such as access to computer processing capacity, interconnectivity, electricity cost, environmental factors (such as cooling capacity) and location play an important role in "mining," which is the term for using the specialized computers in connection with the blockchain for the creation of new units of cryptocurrency.
The Company is engaged in the business of digital cryptocurrency development and blockchain development.
More regulations expected
2019 revealed a growing awareness on the part of federal agencies that
cryptocurrency (and technology in general) is beginning to become less a
component of society and more of the core element of it. The
Now with one of the biggest and most controversial tech companies in the world getting in on the cryptocurrency game, the cryptocurrency industry will likely see local and national governments pay closer attention to the digital currencies, for good or ill. For his part, Benzinga sees the current outlook on guidance and regulations in cryptocurrency as mostly benign.
While most of the current legislation has been encouraging, ongoing experiments
may cut both ways for the larger cryptocurrency market. Supportive regulations
like those highlighted by Alex promise to foster growth and increase
transparency throughout the industry. On the other hand, highly restrictive
regulations like those coming out of
The Market Consolidations
Turmoil might be a characteristic feature lower on the cryptocurrency food
chain. Because, despite flattening in 2018 as the price of bitcoin fell, the
number of cryptocurrencies in the market surged to more than 2300 through 2019,
according to the latest account from CoinMarketCap. Unfortunately, fewer than a
third of coins trade more than
Crypto and Fintech Hook Up
The overarching theme of all of these trends is that cryptocurrency is growing up, becoming mainstream and finally finding actual use cases, rather than just hypothetical ones. With the introduction of Libra, the problem isn't explaining why cryptocurrency will be valuable and necessary soon but making it valuable and necessary now - do or die. There are obviously questions about how transactions will be implemented across an array of ledgers or how anonymized transactions can be regulated. Part of this will come in the consolidation of the industry and the continued struggle for interoperability between wallets and ledgers. However, most of these questions will likely be answered by whoever tries first, and financial technology companies are by far the most eager to fill that role.
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This necessity of innovation has been an evident trend throughout major areas of
the cryptocurrency market. Libra itself is (or was) stacked with members from
various fintech companies. Meanwhile, fintech unicorns like
RESULTS OF OPERATIONS
Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations
are based upon our financial statements, which have been prepared in accordance
with accounting principles generally accepted in
We base our estimates on historical performance and on various other assumptions that we believe to be reasonable under the circumstances. These estimates allow us to make judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
We believe the following accounting policies are our critical accounting policies because they are important to the portrayal of our financial condition and results of operations, and they require critical management judgments and estimates about matters that may be uncertain. If actual results or events differ materially from those contemplated by us in making these estimates, our reported financial condition and results of operations for future periods could be materially affected.
Revenue Recognition Policies
Revenues are presented net of discounts. In general, we recognize revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered to the customer, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. Where arrangements have multiple elements, revenue is allocated to the elements based on the relative selling price method and revenue is recognized based on our policy for each respective element. We generate revenue primarily from sales of the electronic cigarettes, components for electronic cigarettes and related accessories. We recognize revenue when the product is shipped.
Amounts billed or collected in excess of revenue recognized are recorded as deferred revenue.
The Company measures construction revenue as a Cost-type contract in accordance with ASC 605, which discusses accounting for performance of construction contracts. The Company recognizes revenue on a cost-plus basis, provisions for reimbursable costs (which are generally spelled out in the contract), overhead recovery percentages, and fees. A fee may be a fixed amount or a percentage of reimbursable costs or an amount based on performance criteria. Generally, percentage fees may be accrued as the related costs are incurred, since they are a percentage of costs incurred, and profits therefore are recognized as costs are incurred.
Our operating results for the years endedApril 30, 2021 , and 2020 are summarized as follows: For the year ended April 30, 2021 2020 Sales $ -$ 115 Total Cost of Sales - - Gross Profit - - Total operating expenses 4,205,939 718,386
Income (Loss) from operations (4,205,939 ) (718,386 )
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Revenue
Our revenue from continuing operations for the year ended
Cost of Goods Sold
Our cost of goods sold for the year ended
Gross Profit
Our gross profit for the year ended
Operating Expenses
Our operating expenses increased by
The increase was primarily due to increase in stock-based compensation,
increasing from
Our total operating expenses for the year ended
Our general and administrative expenses consist of bank charges, telephone expenses, meals and entertainments, computer and internet expenses, postage and delivery, travel, rent, office supplies and other expenses.
Net Income (Loss) from Operations
Our net income loss increased by
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Liquidity and Capital Resources
Cash Requirements
We had cash available of
Sources and Uses of Cash Operations
We used
Investments
We used
Financing
We received
Off-Balance Sheet Arrangements
None Going Concern
Our financial statements are prepared using generally accepted accounting
principles, which contemplate the realization of assets and liquidation of
liabilities in the normal course of business. Because the business is relatively
new and has a short history and relatively few sales, no certainty of
continuation can be stated. The accompanying consolidated financial statements
for the years ended
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