Overview
In April 2019 we discontinued our prior crypto currency mining business. We are
now in the process of looking for a new business, either through an acquisition
or commencing new business activities. Although we have had discussions with
potential acquisition candidates, as of the date of this report, we have not
signed any agreement, letter of intent or memorandum of understanding with
respect to any potential acquisition, and we cannot assure you that we will be
able to make any acquisition. Because of our limited financial condition, the
low price and lack of liquidity of our stock, and our stock being quoted on OTC
Pink, we believe it is unlikely that we will be able to acquire any company
other than a company without a history of earnings. In such event, we would
likely need to raise a significant amount of funds. We have no assurance that
financing will be available to us on acceptable, if any, terms. If financing is
not available on satisfactory terms, we may be unable to continue, develop or
expand our operations. Equity financing would result in additional dilution to
existing stockholders.
In 2018 we purchased certain equipment for $500,000 borrowed from Mr. Romero.
The equipment was never delivered to us in the United States, and on October 29,
2021, we entered into a settlement agreement with Gygabyte whereby we paid
$10,790 to Gigabyte. Four pallets of equipment have been shipped from Taiwan and
are expected to arrive in the U.S. next quarter. The equipment is in component
parts and there is no assurance if this can be assembled and mined or sold since
this equipment was purchased over three years ago.
On November 1, 2021 we entered into a settlement with Mr. Romero whereby he
converted the principal amount of his $500,000 loan along with accrued interest
into shares of the company at $.02 per share and we issued additional shares to
him for his service as the CEO under his previous employment agreement. The
total number of shares issued to Mr. Romero for his note conversion and
compensation was 35,189,100.
Results of Operations
Three Months Ended April 30, 2022 and 2021
For the three months ended April 30, 2022, we incurred operating loss of
$31,059, primarily professional fees, resulting in a net loss of $31,059 or
($0.00) per share (basic and diluted). For the three months ended April 30,
2021, we incurred operating expenses of $15,480, primarily professional fees,
resulting in a loss from operations of $15,480. Other expenses consisted of
interest expense of $14,630, resulting in a net loss of $30,110 or ($0.00) per
share (basic and diluted).
Nine months Ended April 30, 2022 and 2021
For the nine months ended April 30, 2022, we incurred operating loss of $64,768,
primarily professional fees, resulting in a loss from operations of $64,768.
Other income consisted of release of liability of $19,500 and reverse
professional fees of $49,500, and interest expense of $15,123, resulting in a
net loss of $10,891, or ($0.00) per share (basic and diluted). For the nine
months ended April 30, 2021, we incurred operating expenses of $23,360,
primarily professional fees, resulting in a loss from operations of $23,360.
Other expenses consisted of interest expense of $44,876, resulting in a net loss
of $68,236 or ($0.00) per share (basic and diluted).
Liquidity and Capital Resources
The following summarizes our change in working capital from July 31, 2021 to
April 30, 2022:
April 30, July 31,
2022 2021 Change %
Current assets $ 447 $ 665 $ (218 ) (33%)
Current liabilities $ 159,671 $ 957,486 $ (797,815 ) (83%)
Working capital deficiency $ (159,224 ) $ (956,821 ) $ 797,597 (83%)
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Table of Contents
The decrease in working capital deficiency is primarily due to an extinguishment
of amounts payable to related parties and conversion of debt.
The following table summarizes our cash flow for the nine months ended April 30,
2022 and 2021:
Nine Months Ended
April 30,
2022 2021 Change
Cash used in operating activities $ (270 ) $ (270 ) $ -
Cash on hand
$ 395 $ 755 $ (360 )
The cash flow used in operating activities for the nine months ended April 30,
2022, reflects our net loss of $10,891. This amount was decreased by release of
liabilities of $69,000, increased by accrued interest on convertible notes of
$15,123 and amounts due to related parties of $80,720. It was decreased by
prepaid expenses of $52 and accounts payable and accrued liabilities of $16,170.
The cash flow used in operating activities for the nine months ended April 30,
2021 reflects our net loss of $68,236. This amount was decreased by accrued
interest on convertible notes of $44,876 and by amounts due to related parties
of $19,500 and accounts payable and accrued liabilities of $3,590.
For the nine months ended April 30, 2022 and 2021, we did not have any cash flow
from investing or financing activities.
Going Concern
Our financial statements have been prepared assuming that we will continue as a
going concern, which contemplates the realization of assets and the liquidation
of liabilities in the normal course of business. During the nine months ended
April 30, 2022, we incurred net cash used in operating activities of $270. As of
April 30, 2022, we had an accumulated deficit of $12,827,767, we had earned no
revenues since inception and we were not engaged in an active business. We
intend to seek to either acquire a business or enter into a new business.
However, until we engage in an active business or make an acquisition, we are
likely to not be able to raise any significant debt or equity financing or any
funds that we may raise are likely to be on very unfavorable terms. Our ability
to begin operations in a new business model is dependent upon, among other
things, obtaining financing to commence operations and develop a business plan
or making an acquisition. We cannot give any assurance as to our ability to
develop or acquire a business or to operate profitably. These factors, among
others, raise substantial doubt about our ability to continue as a going
concern. The accompanying consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Critical Accounting Policies
Use of Estimates: The preparation of the accompanying consolidated financial
statements in conformity with GAAP requires management to make certain estimates
and assumptions that directly affect the results of reported assets,
liabilities, revenue, and expenses, including the valuation of non-cash
transactions. Actual results may differ from these estimates.
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