Forward Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements. For this
purpose, any statements contained in this Report that are not statements of
historical fact may be deemed to be forward-looking statements. Forward-looking
information includes statements relating to future actions, prospective
products, future performance or results of current or anticipated products,
sales and marketing efforts, costs and expenses, interest rates, outcome of
contingencies, financial condition, results of operations, liquidity, business
strategies, cost savings, objectives of management, and other matters. You can
identify forward-looking statements by those that are not historical in nature,
particularly those that use terminology such as "may," "will," "should,"
"expects," "anticipates," "contemplates," "estimates," "believes," "plans,"
"projected," "predicts," "potential," or "continue" and similar expressions or
the negative of these similar terms. The Private Securities Litigation Reform
Act of 1995 provides a "safe harbor" for forward-looking information to
encourage companies to provide prospective information about themselves without
fear of litigation so long as that information is identified as forward-looking
and is accompanied by meaningful cautionary statements identifying important
factors that could cause actual results to differ materially from those
projected in the information.
These forward-looking statements are not guarantees of future performance and
involve risks, uncertainties and assumptions that we cannot predict. In
evaluating these forward-looking statements, you should consider various
factors, including the following: (a) those risks and uncertainties related to
general economic conditions, (b) whether we are able to manage our planned
growth efficiently and operate profitable operations, (c) whether we are able to
generate sufficient revenues or obtain financing to sustain and grow our
operations, (d) whether we are able to successfully fulfill our primary
requirements for cash, which are explained below under "Liquidity and Capital
Resources". We assume no obligation to update forward-looking statements, except
as otherwise required under the applicable federal securities laws. Unless
stated otherwise, terms such as the "Company," "Bowmo," "we," "us," "our," and
similar terms shall refer to Bowmo, Inc., a Nevada corporation, and its
subsidiaries.
Results of Operations
Three Months Ended September 30, 2022 Compared to the Three Months Ended
September 30, 2021
Revenues
Revenues for the three months ended September 30, 2022 totaled $0, a decrease of
$67,000 or 100% compared to $67,000 of revenues for the three months ended
September 30, 2021. This was primarily a result of decreased operations for the
three months ended September 30, 2022.
Cost of Revenues
Cost of revenues for the three months ended September 30, 2022 totaled $0, an
decrease of $178 or 100% compared to $178 cost of revenues for the three months
ended September 30, 2021. This was primarily a result of no revenue recognized
in the current period
.
Compensation Expense
Compensation expense for the three months ended September 30, 2022 and September
30, 2021 was $98,000 and $102,000, respectively, and consists entirely of
compensation paid to officers..
Consulting Fees
Consulting fees for the three months ended September 30, 2022 was $75,000, an
increase of $75,000 or 100% from $0 through the three months ended September 30,
2021. The increase is due to the consulting contract acquired in the Merger on
May 4, 2022 with a fee of $25,000 per month, payable in a note, the consultant
shall provide accounting and financial statement services, evaluate business
acquisition opportunities and help in securing financing.
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General and administrative expenses
General and administrative expenses for the three months ended September 30,
2022 were $69,000 compared to $13,000 for the three months ended September 30,
2021. The increase was primarily due to payments for investor relations along
with increase in development expenses
.
Professional fees
Professional fees for the three months ended September 30, 2022 were $117,000,
an increase of $117,000 or 100% compared to $0 for the three months ended
September 30, 2021. The increase in expenses were due to greater legal and
accounting expenses and expenses associated with the extinguishment of debt.
Other Income (Expense)
Total other expense for the three months ended September 30, 2022 were $200,000,
an increase of $180,000 or 728% compared to $20,000 of expense for the three
months ended September 30, 2021. The increase is a result of the increase in
interest expense by $170,000.
Net Loss
The Company had a net loss of $560,000 for the three months ended September 30,
2022, as compared to a net loss of $68,000 for the three months ended September
30, 2021. The increase in net loss is a result of the explanations above.
Nine months Ended September 30, 2022 Compared to the Nine months Ended September
30, 2021
Revenues
Revenues for the nine months ended September 30, 2022 totaled $150,000, an
increase of $73,000 or 96% compared to $76,000 of revenues for the nine months
ended September 30, 2021. This was primarily a result of increased operations
for the three months ended September 30, 2022.
Cost of Revenues
Cost of revenues for the nine months ended September 30, 2022 totaled $48,000,
an increase of $48,000 or 27,130
% compared to $178 cost of revenues for the nine months ended September 30,
2021. This was primarily a result of increased revenue activities, resulting in
increased costs for the three months ended September 30, 2022.
Compensation Expense
Compensation expense for the nine months ended September 30, 2022 and September
30, 2021 was $302,000 and $307,000, respectively, and consists entirely of
compensation paid to officers..
Consulting Fees
Consulting fees for the three months ended September 30, 2022 was $122,000, an
increase of $122,000 or 100% from $0 through the nine months ended September 30,
2021. The increase is due to the consulting contract acquired in the Merger on
May 4, 2022 with a fee of $25,000 per month, payable in a note, the consultant
shall provide accounting and financial statement services, evaluate business
acquisition opportunities and help in securing financing.
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General and administrative expenses
General and administrative expenses for the nine months ended September 30, 2022
were $124,000 compared to $14,000 for the nine months ended September 30, 2021.
The increase was primarily due to payments for investor relations and an
increase development expenses
.
Professional fees
Professional fees for the nine months ended September 30, 2022 were $248,000, an
increase of $248,000 or 100% compared to $0 for the nine months ended September
30, 2021. The increase in expenses were due to greater legal expenses and
expenses associated with the extinguishment of debt.
Other Income (Expense)
Total other expense for the nine months ended September 30, 2022 were $217,000
an increase of $138,000 or 176% compared to $79,000 of expense for the three
months ended September 30, 2021. The increase is a result of the increase in
interest expense, offset by the gain on new methodology for accounting for debt
conversion features.
Net Loss
The Company had a net loss of $911,000 for the three months ended September 30,
2022, as compared to a net loss of $323,000 for the three months ended September
30, 2021. The increase in net loss is a result of the explanations above.
Liquidity and Capital Resources
Through September 30, 2022, we used $422,000 in operating activities compared to
$879 by in the third quarter of 2021. Cash used for the nine months in 2022 is
primarily caused by a net loss of $911,000, gain on new methodology for
accounting for debt conversion features of $28,000, offset by Expenses incurred
on extinguishment of convertible debt and accrued interest of 90,000, debt
discount amortization of $109,000, and working capital items of $131,000.
Through September 30, 2022, we generated $516,000 through financing activities
compared to $0 in the second quarter of 2021. The increase in funds was due
greater funds from financings as the Company evaluates its operating options.
The Company currently owes $564,000 on notes payable, four of which are in
default, and $614,000 for outstanding convertible notes. The majority of the
convertible notes payable are in default.
Quarterly Developments
None.
Significant Developments
Acquisition of Bowmo, Inc.
On May 4, 2022, the Company entered into a merger agreement (the "Merger
Agreement") with Bowmo and Bowmo Merger Sub, Inc. to acquire Bowmo (the
"Acquisition"). The transactions contemplated by the Merger Agreement were
consummated on May 4, 2022 and, pursuant to the terms of the Merger Agreement,
all outstanding shares of Bowmo will be exchanged for shares of the Company's
common stock and Bowmo became the Company's wholly owned subsidiary.
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The Merger was effected pursuant to the Merger Agreement. The Merger is being
accounted for as a reverse merger whereby Bowmo is the acquirer for accounting
purposes. Bowmo is considered the acquiring company for accounting purposes as
upon completion of the Merger, Bowmo's former stockholders held a majority of
the voting interest of the combined company.
Pursuant to the Merger, the Company issued Series G Preferred Stock holding the
voting rights to 78% of the total voting equity securities to Bowmo's
stockholders.
Going Concern
The accompanying unaudited interim consolidated condensed financial statements
have been prepared in conformity with generally accepted accounting principles
which contemplate continuation of the Company on a going-concern basis. The
going concern basis assumes that assets are realized, and liabilities are
extinguished in the ordinary course of business at amounts disclosed in the
consolidated financial statements. The Company has incurred recurring losses
from operations and has an accumulated deficit of $(5,574,127). The Company's
ability to continue as a going concern depends upon its ability to obtain
adequate funding to support its operations through continuing investments of
debt and/or equity by qualified investors/creditors, internally generated
working capital and monetization of intellectual property assets. These factors
raise substantial doubt about the Company's ability to continue as a going
concern. These consolidated financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
Management is currently pursuing a business strategy which includes raising the
necessary funds to finance the Company's development and marketing efforts.
Critical Accounting Estimates and Policies
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities of the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Note 1 to the Financial Statements describes the
significant accounting policies and methods used in the preparation of the
Financial Statements. Estimates are used for, but not limited to, contingencies
and taxes. Actual results could differ materially from those estimates. The
following critical accounting policies are impacted significantly by judgments,
assumptions, and estimates used in the preparation of the Financial Statements.
We are subject to various loss contingencies arising in the ordinary course of
business. We consider the likelihood of loss or impairment of an asset or the
incurrence of a liability, as well as our ability to reasonably estimate the
amount of loss in determining loss contingencies. An estimated loss contingency
is accrued when management concludes that it is probable that an asset has been
impaired or a liability has been incurred and the amount of the loss can be
reasonably estimated. We regularly evaluate current information available to us
to determine whether such accruals should be adjusted.
We recognize deferred tax assets (future tax benefits) and liabilities for the
expected future tax consequences of temporary differences between the book
carrying amounts and the tax basis of assets and liabilities. The deferred tax
assets and liabilities represent the expected future tax return consequences of
those differences, which are expected to be either deductible or taxable when
the assets and liabilities are recovered or settled. Future tax benefits have
been fully offset by a 100% valuation allowance as management is unable to
determine that it is more likely than not that this deferred tax asset will be
realized.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in
effect. These pronouncements did not have any material impact on the financial
statements unless otherwise disclosed, and the Company does not believe that
there are any other new accounting pronouncements that have been issued that
might have a material impact on its financial position or results of operations.
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Off Balance Sheet Arrangements
We have not entered into 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, capital expenditures or capital resources and would be considered
material to investors.
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BOWMO, INC. 
