TEGO CYBER INC. You should read the following discussion and analysis of our financial condition and results of operations together with our condensed financial statements and related notes appearing in this Quarterly Report on Form 10-Q. This discussion and other parts of this Quarterly Report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. As a result of many factors, including those factors set forth in the "Risk Factors" section of this Quarterly Report, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis.
Overview
We were incorporated in the
Results of operations for the three months ended
Revenues
During the three months ended
Operating Expenses
We incurred total operating expenses of
2022 2021
General & administration $ 839,047 $ 331,661
Professional fees 88,218 159,251
Sales & marketing 55,864 37,241
Total operating expenses $ 983,129 $ 528,153 General & administration increased by
4
Table of Contents
Net Operating Loss
We incurred a net operating loss of
Net Loss
We incurred a net loss of
Results of operations for the six months ended
Revenues
During the six months ended
Operating Expenses
We incurred total operating expenses of
2022 2021
General & administration $ 1,719,559 $ 574,388
Professional fees 153,180 294,139
Sales & marketing 236,188 102,623
Total operating expenses $ 2,108,927 $ 971,150 General & administration increased by
Net Operating Loss
We incurred a net operating loss of
2021. Net Loss
We incurred a net loss of
5
Table of Contents
Liquidity and Capital Resources
As at
Cash Flow from Operating Activities
For the six months ended
Cash Flow from Investing Activities
For the six months ended
Cash Flow from Financing Activities
For the six months ended
Contractual Obligations
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Future Financings
We will continue to rely on equity sales of our common shares and debt proceeds in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.
Expected Purchase or Sale of Significant Equipment
We do not anticipate the purchase or sale of any significant equipment, as such items are not required by us at this time or in the next twelve months.
Off-Balance Sheet Arrangements
We have no significant 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 are material to stockholders.
Critical Accounting Policies
This summary of significant accounting policies is presented to assist in understanding the financial statements. The financial statements and notes are representations of the Company's management, who are responsible for their integrity and objectivity. These accounting policies conform to US GAAP and have been consistently applied in the preparation of the financial statements.
6
Table of Contents
Basis of Preparation
The accompanying financial statements have been prepared to present the balance
sheets, the statements of operations, statements of changes in shareholders'
equity and cash flows of the Company for the three and six months ended
Use of Estimates
In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those estimates.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist principally of cash and accounts
receivable. During the fiscal periods ended
Cash
Cash consists of cash held at major financial institutions and is subject to insignificant risk of changes in value.
Receivables and Allowance for Doubtful Accounts
Trade accounts receivable are recorded at net realizable value and do not bear
interest. No allowance for doubtful accounts was made during the six month
period ended
Fair Value of Financial Instruments
Accounting Standards Codification ("ASC") 820 "Fair Value Measurements and
Disclosures", adopted
Level 1 - inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value.
For cash, accounts receivables, subscription receivables, and accounts payable and accrued liabilities, it is management's opinion that the carrying values are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their stated interest rate approximates current rates available.
7
Table of Contents
Management believes it is not practical to estimate the fair value of related party receivables and payables because the transactions cannot be assumed to have been consummated at arm's length, the terms are not deemed to be market terms, there are no quoted values available for these instruments, and an independent valuation would not be practical due to the lack of data regarding similar instruments, if any, and the associated potential costs.
Revenue Recognition
Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with
Customers ("Topic 606"), was adopted by the Company as of
The Company has no revenue in this period, however, when the Company has revenue from providing consulting and management services under Topic 606 will be recognized in a manner that reasonably reflects the delivery of services to customers in return for expected consideration and includes the following elements:
- executed contracts with the Company's customers that it believes are
legally enforceable;
- identification of performance obligations in the respective contract;
- determination of the transaction price for each performance obligation
in the respective contract;
- allocation of the transaction price to each performance obligation; and
- recognition of revenue only when the Company satisfies each performance
obligation.
These five elements as applied to the Company's consulting and management services results in revenue recorded as services are provided.
Income Taxes
The Company uses the asset and liability method of accounting for income taxes pursuant to ASC 740 "Income Taxes". ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances are provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The provision for income taxes represents current taxes payable net of the change during the period in deferred tax assets and liabilities.
Earnings per Share
Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. If applicable, diluted earnings per share assume the conversion, exercise or issuance of all common stock instruments unless the effect is to reduce a loss or increase earnings per share. .
8
Table of Contents
Recently Issued Accounting Pronouncements
In
Other recent accounting pronouncements issued by the FASB (including its
© Edgar Online, source
