HOME BISTRO INC. Except for the historical information, the following discussion contains
forward-looking statements that are subject to risks and uncertainties. We
caution you not to put undue reliance on any forward-looking statements, which
speak only as of the date of this Report. Our actual results or actions may
differ materially from these forward-looking statements for many reasons. Our
discussion and analysis of our financial condition and results of operations
should be read in conjunction with the financial statements and related notes
and with the understanding that our actual future results may be materially
different from what we currently expect. See "CAUTIONARY STATEMENT ON
FORWARD-LOOKING INFORMATION" above. As used herein, the terms "we," "us," "our"
and the "Company" refers to
Overview
The ongoing COVID-19 global and national health emergency has caused significant
disruption in the international and
On
In
Recent Developments
On
33
On
Results of Operations
For the Three Months Ended
Product Sales
During the three months ended
Cost of Sales
Since the Company implemented its own kitchen operations in
During the three months ended
Operating Expenses For the Three Months EndedJanuary 31, 2022 and 2021, operating expenses consisted of the following: Three Months Ended January 31, 2022 2021 Compensation and related expenses$ 287,579 $ 68,037 Professional and consulting expenses 1,652,054 68,847 Professional and consulting expenses - related party 30,000 - Product development expense 146,614 - Selling and marketing expenses 364,584 75,940 General and administrative expenses 448,401 61,129 Total$ 2,929,232 $ 273,953
Compensation and Related Expenses
? During the three months ended January 31, 2022 and 2021, compensation and
related expenses amounted to $287,579 and $66,581 , respectively, an
increase of $219,542 or 323%. The increase was primarily attributable to
an increase of $123,237 of compensation related to Model Meals which was
acquired in July 2021 and $52,709 related to increase in executive salary
in 2022.
34
Professional and Consulting Expenses:
? During the three months ended January 31, 2022 and 2021, professional and
consulting expenses amounted to $1,652,054 and $68,847 , respectively, an
increase of $1,583,207 or 2,300%. The increase was primarily due an
increase stock-based compensation of $1,189,314 related to commons stock
issued for lock up and leak out agreements and common stock issued for
services and prepaid services, an increase in investor relations fee of
$155,700 , an increase in consulting fees of $58,796 , an increase in
accounting fees of $93,090 and an increase in legal fees of $72,861 .
Professional and Consulting Expenses -
? During the three months ended January 31, 2022 and 2021, professional and
consulting expenses - related party amounted to $30,000 and $0 ,
respectively, an increase of $30,000 or 100%. The increase was a result of
a consulting agreement with a related party, dated October 1, 2021 which
provides for $10,000 monthly consulting fee.
Product Development Expenses
? During the three months ended January 31, 2022 and 2021, product
development expenses amounted to $146,614 and $0 , respectively, an
increase of $146,614 , or 100%. The product development expense in the 2022
period was primarily due to the amortization of the deferred compensation
resulting from common stock issued in connection with the product
development agreements.
Selling and Marketing Expenses
? During the three months ended January 31, 2022 and 2021, selling and
marketing expenses amounted to $364,584 and $75,940 , respectively, an
increase of $288,644 , or 380%. The increase was primarily due to the
expansion of our multi-channel digital marketing strategy to further
promote our celebrity chef program in and acquisition of Model Meals in
July 2021 .
General and Administrative Expenses
? During the three months ended January 31, 2022 and 2021, general and
administrative expenses amounted to $448,401 and $61,129 , respectively, an
increase of $387,272 or 634%. The increase was primarily due to an
increase in depreciation and amortization expense of $299,822 , an increase
in transfer agent fees of $30,025 , an increase in kitchen related expenses
of $55,410 , and increase from the acquisition of Model Meals in July 2021 .
Loss from Operations
? During the three months ended January 31, 2022 and 2021, loss from
operations amounted to $2,743,427 and $163,555 , respectively, an increase
of $2,579,872 or 1,577%. The increase was due to the changes discussed
above.
Other Income (Expense), net
? During the three months ended January 31, 2022 and 2021, other (expense),
net amounted to $(152,909) and other income, net amounted to $20,619 ,
respectively, an increase in other (expense) of $(173,528) or 842%. The
change was primarily due to increase in interest expense of $212,087
resulting from an increase in convertible notes in 2022, an increase in
gain from change in fair value of derivative liabilities of $26,863 and
offset by a decrease in gain on extinguishment of accounts payable of
$7,075 .
Net Loss
? During the three months ended January 31, 2022 and 2021, we had a net loss
of $2,896,336 or $(0.08) per common share (basic and diluted) and $142,936
or $(0.01) per common share (basic and diluted), respectively, an increase
of $2,753,400 or 1,926%. The increase was due to the changes discussed
above.
35
Liquidity and Capital Resources
Liquidity is the ability of an enterprise to generate adequate amounts of cash
to meet its needs for cash requirements. We had a working capital deficit of
January 31, October 31, Percentage
2022 2021 Change Change
Working capital deficit:
Total current assets $ 1,659,391 $ 2,372,058 $ (712,667 ) 30 %
Total current liabilities (2,192,709 ) (2,690,855 ) 498,146 19 %
Working capital deficit: $ (533,318 ) $ (318,797 ) $ (214,521 ) 67 %
The increase in working capital deficit was primarily attributable to a decrease
in current assets of
Cash Flows
The following table provides detailed information about our net cash flows:
Three Months Ended
January 31,
2022 2021
Net cash used in operating activities
$ (1,021,553 ) $ 393,708
Net cash used in operating activities for the three months ended
? Net cash used in operating activities for the three months ended January
31, 2022 primarily reflected our net loss of $2,896,336 adjusted for the
add-back on non-cash items such as depreciation and amortization expense
of $300,086 , total stock-based compensation for services of $1,335,928 ,
amortization of debt discount of $174,929 , gain on change in fair value of
derivative liability of $59,178 and changes in operating assets and
liabilities consisting of an increase of inventory of $7,802 , an increase
in prepaid expenses and other current assets of $301,084 , an increase in
accounts payable of $64,427 , an increase in unredeemed gift cards of
$51,990 offset by a decrease in accrued expense and other liabilities of
$95,487 .
? Net cash used in operating activities for the three months ended January 31,
2021 primarily reflected our net loss of $142,936 adjusted for the add-back on
non-cash items such as depreciation expense of $264 , stock-based compensation
for services of $11,471 , gain on extinguishment of accounts payable of $7,075 ,
amortization of debt discount of $7,983 , gain on change in fair value of
derivative liability of $32,315 and changes in operating asset and liabilities
consisting primarily of an increase in prepaid expenses and other current
assets of $4,014 , an increase in accounts payable of $39,937 and an increase
in unredeemed gift cards of $25,696 offset by a decrease in accrued expense
and other liabilities of $39,123 .
Net Cash Provided by Financing Activities
Net cash provided by financing activities the three months ended
? Net cash provided by financing activities for the three months ended
January 31, 2022 consisted of net proceeds from sale of common stock of
$991,168 offset by repayments of convertible notes payable of $491,850 ,
repayments of advances payable of $50,798 and repayment of convertible
note - related party of $37,546 .
? Net cash provided by financing activities for the three months ended
January 31, 2021 consisted of net proceeds from note payable of $7,000 ,
net proceeds from convertible note payable of $489,100 , net proceeds from
advances payable of $80,000 offset by repayments of advances payable of
$42,280 .
36
Cash Requirements
We are dependent on our product sales to fund our operations and may require the sale of additional common stock to maintain operations. Our officers and directors have made no written commitments with respect to providing a source of liquidity in the form of cash advances, loans, and/or financial guarantees.
Going Concern
The financial statements have been prepared on a going concern basis, which
contemplates the realization of assets and the settlement of liabilities and
commitments in the normal course of business. As reflected in the accompanying
unaudited consolidated financial statements, for the three months ended
Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive or raise additional debt and/or equity capital. Management believes that the Company's capital resources are not currently adequate to continue operating and maintaining its business strategy for a period of twelve months from the issuance date of this report. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail or cease operations. These consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Inflation and Changing Prices
Neither inflation nor changing prices for the three months ended
Off-Balance Sheet Arrangements
None.
© Edgar Online, source
