MAPTELLIGENT, INC. You should read the following discussion and analysis of our financial condition and results of our operations together with our financial statements and the notes thereto appearing elsewhere in this Annual Report. This discussion contains forward-looking statements reflecting our current expectations, whose actual outcomes involve risks and uncertainties. Actual results and the timing of events may differ materially from those stated in or implied by these forward-looking statements due to a number of factors, including those discussed in the section entitled "Cautionary Statement regarding Forward-Looking Statements" and elsewhere in this Annual Report. Please see the notes to our Financial Statements for information about our Critical Accounting Policies and Recently Issued Accounting Pronouncements.
Management's Discussion and Analysis
The Company has had limited revenues from operations in each of the last two fiscal years, and in the current fiscal year.
Business Overview
We are a
We are on a mission to enhance physical security of structures where large gatherings of people can be found such as, schools, universities, hospitals, sports venues, shopping malls, corporate campuses, etc. We enhance the ability to provide a safer environment through the use of geospatial technology by presenting a building footprint, floorplan and associated attributes on a map for property stakeholders and first responders to access during emergency incidents. Our goal is to transform how data and information are accessed by those who need it most during a time of crisis, namely first responders. We provide a geographic platform for first responders to access site specific information enhancing situational awareness while en route and upon arrival to an incident scene. This ability to access pertinent information shortens the time it takes for tactical action thereby mitigating additional life and property threat exposure. Our geocentric system serves as a common operating picture for all stakeholders involved in maintaining and protecting physical structures and venues. Through potential partnerships with industry leaders in physical security technology, our solutions act as the data integration platform for visualizing information produced by partner's technologies.
Once our software is completed, our customers will begin their solution journey by uploading a building floor plan via a PDF file to a hosted solution in the cloud. This low-touch and low-cost solution allows users to quickly share site specific details with public safety. Our customers seeking to share additional relevant information and data are able to use our content management cloud services making it accessible anywhere on any device with permission. We plan to offer a suite of maps and applications providing customers the ability to maintain and manage data in a mobile environment for public safety to create incident pre-plans associated with the building floor plan and for building engineers to manage maintenance schedules for critical elements of a building such as alarm panels, pull stations and fire extinguishers. We plan to provide for our customers the ability to build high fidelity floor plans, safety assessments, and system integration services making the whole system complete and comprehensive.
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Results of Operations
The following are the results of our continuing operations for the year ended
Years Ended
December 31,
2021 2020 Change %
Revenue $ - $ - $ - -
Operating expense 1,196,811 1,918,117 (721,306 ) (38%)
Other income (expense) 91,959,692 (104,330,703 ) 196,290,395 (188%)
Net income (loss) $ 90,762,881 $ (106,248,820 ) $ 197,011,701 (185%)
Revenue
During the year ended December 31, 2021 and 2020, the Company did not generate
any revenue.
Operating Expenses
Years Ended
December 31,
2021 2020 Change %
General and administrative $ 386,504 $ 118,356 $ 268,148 227 %
Professional fees 130,434 48,698 81,736 168 %
Compensation and payroll taxes 679,873 1,751,063 (1,071,190 ) (61%)
Total operating expenses
Compensation and payroll taxes decreased by
Other Income (Expense)
Years Ended
December 31,
2021 2020 Change %
Interest expense $ (546,062 ) $ (150,024 ) $ (396,038 ) 264 %
Change in fair value of (189
derivative liability 92,504,847 (104,180,679 ) 196,685,526 %)
Gain on settlement of debt 907 - 907 -
Total other income (188
(expense) $ 91,959,692 $ (104,330,703 ) $ 196,290,395 %)
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The increase in other income was primarily due to an increase in gain on change in fair value of derivative liability, from an accounting estimate primarily from the conversion feature of one convertible promissory note.
Liquidity and Capital Resources
December 31, December 31,
2021 2020 Change %
Current assets $ 1,159,724 $ 247,114 $ 912,610 369 %
Current liabilities
Liquidity is the ability of a company to generate funds to support asset growth, satisfy disbursement needs, maintain reserve requirements, and otherwise operate on an ongoing basis. The Company has insufficient operating revenues so is currently dependent on debt financing and sale of equity to fund operations.
As shown in the accompanying financial statements, the Company has net income of
As of
Management believes that it will need additional equity or debt financing to be able to implement its business plan. Given the lack of revenue, capital deficiency and negative working capital, there is substantial doubt about the Company's ability to continue as a going concern.
We believe that the successful growth and operation of our business is dependent upon our ability to do the following:
• obtain adequate sources of debt or equity financing to pay unfunded operating
expenses and fund long-term business operations; and • manage or control working capital requirements by controlling operating
expenses.
Management is attempting to raise additional capital via equity and debt offerings to sustain operations until it can market its services and achieves profitability. The successful outcome of future activities cannot be determined at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results.
Cash Flows
Years Ended
December 31,
2021 2020 Change %
Cash used in operating activities $ (900,934 ) $ (670,678 ) $ (230,256 ) 34 %
Cash used in investing activities $ (7,500 ) $ (21,900 ) $ 14,400 (66 %)
Cash provided by financing
activities $ 1,813,544 $ 754,150 $ 1,059,394 140 %
Cash and cash equivalents on hand
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Operating activities
Net cash used in operating activities for the year ended
Investing activities
During the year ended
During the year ended
Financing activities
Net cash provided by financing activities for the year ended
Critical Accounting Policies
Our financial statements are prepared in accordance with accounting principles
generally accepted in
· Use of Estimates · Derivative liability · Stock-based Compensation · Income Taxes
While our estimates and assumptions are based on our knowledge of current events and actions we may undertake in the future, actual results may ultimately differ from these estimates and assumptions. For a discussion of the Company's significant accounting policies, refer to Note 2 of Notes to the Financial Statements.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. Amounts could materially change in the future.
Derivative Liability
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company used a Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
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Stock-based Compensation
The Company issues stock, options and warrants as share-based compensation to employees and non-employees.
The Company accounts for its share-based compensation to employees and non-employees in accordance ASC 718. Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period.
Income Taxes
Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The deferred tax assets of the Company relate primarily to operating loss carryforwards for federal income tax purposes. A full valuation allowance for deferred tax assets has been provided because the Company believes it is not more likely than not that the deferred tax asset will be realized. Realization of deferred tax assets is dependent on the Company generating sufficient taxable income in future periods.
Off-Balance Sheet Arrangements
We have no 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 that is material to stockholders.
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