MOTOS AMERICA INC. Unless otherwise noted, all currency figures quoted as "U.S. dollars", "dollars" or "$" refer to the legal currency ofthe United States . Throughout this report, assets and liabilities of the Company's subsidiaries are translated intoU.S. dollars using the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders' equity. Overview We were an IT-solutions provider that provided a multi-dimensional e-commerce platform to facilitate shopping, business, trade and integrates online & office transactions in a single application. Prior toJune 2019 , we developed and operated a mobile platform designed to consolidate users' cash and connect merchants to consumers by offering a cashless form of transaction, in-app shopping and a user rewards system. OnJune 2019 , we ceased the operation of the platform but continue to maintain our IT solution business operations. For the nine months endedApril 30, 2021 , and 2020, we generated comprehensive losses of$110,924 and$224,185 , respectively. Since we ceased operations of our platformJune 2019 , we unsuccessfully attempted to diversify into the energy, oil & gas sector to strengthen our financial position. Our current principal business is to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. Based on proposed business activities, we are a "blank check" company. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as it is subject to those requirements. As of the date of this Quarterly Report, we have not entered into any binding agreement with any party regarding acquisition opportunities for us. We hope to continue to engage in discussions with other operating businesses affiliated with our executive officers regarding potential acquisition opportunities. There is no assurance that any nonbinding term sheet will result into a definitive purchase transaction nor can we assure you that we will be able to successfully acquire such company or any company in the near future.
We are in active discussions to dispose our operating subsidiary to a third party.
Financial Condition; Going Concern
We have had limited operations and have been issued a "going concern" opinion by our auditor, based upon our reliance on the sale of our common stock and loans from a related party, as the sole source of funds for our future operations. We have no assurance that future financing will be available to us on acceptable terms, or at all. If financing is not available on satisfactory terms, we may be unable to continue our business plan. Equity financing could result in additional dilution to existing shareholders. If we are unable to raise additional capital to maintain our operations in the future, we may be unable to carry out our full business plan of finding an acquisition partner. Our financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. As ofApril 30, 2021 , the Company had working capital deficit of$2,384 ,341and has incurred losses since its inception resulting in an accumulated deficit of$7,671,291 . Further losses are anticipated, raising substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustment that might result from the outcome of this uncertainty. The ability to continue as a going concern is dependent upon the Company finding an acquisition partner in the future and/or to obtain the necessary financing to meet its obligations. Management intends to finance operating costs over the next twelve months with loans from directors and/or private placements of common stock. 14 Results of Operations The following table provides selected financial data about our company as ofApril 30, 2021 and 2020. For the Three For the Three Months Ended Months Ended For the Nine For the Nine April 30, April 30, Months Ended Months Ended 2021 2020 April 30, 2021 April 30, 2020 Revenue $ -$ 4,602 $ - $ 64,890 Cost of revenue - - - (2 ) Gross Margin - 4,602 - 64,888 Other Income 1,919 17,462 (10,588 ) 14,989
General and Admin Expense (6,501 ) (88,867 )
(22,200 ) (347,736 )
Loss Before Tax 4,582 (66,803 ) (32,788 ) (267,859 )
Translation Adjustment 25,730 54,976 (78,136 ) 43,674
25,730 54,976 (78,136 ) 43,674
Comprehensive Loss $ 21,148 $ (11,827 ) $ (110,924 ) $ (224,185 ) Three Months Ended
Revenue. During the three months endedApril 30, 2021 , and 2020, we earned revenue of$0 and$4,602 , respectively. Our revenue consisted primarily of IT service fees and merchant platform maintenance fees. The decrease in our revenue is primarily attributable to the impact of COVID-19 and related government actions on our business operations. We do not expect to generate any revenues for the foreseeable future unless an extraordinary corporate event such as a merger or acquisition or other strategic partnership occurs. No customers accounted for 10% or more of our total net revenue during the three months endedApril 30, 2021 . During the three months endedApril 30, 2020 , the following customers accounted for 10% or more of our total net revenue: Three months ended April 30, 2020 Percentage of Revenues revenues MIG Network & Consultancy Sdn Bhd$ 4,244 92.22% Creative Property Management SdnBhd 1,545 33.57% East Cloud Sdn Bhd (450 ) (9.78% ) North Cloud Sdn Bhd (737 ) (16.01% )$ 4,602
Creative Property Management Sdn Bhd ,East Cloud Sdn Bhd , andMIG Network & Consultancy Sdn Bhd are affiliated with our executive officers and directors,Shiong Han Wee and Kwueh Lin Wong.North Cloud Sdn Bhd is a shareholder holding less than 5% of our issued and outstanding securities. 15 Gross Profit. We recorded a gross profit of$0 and gross profit of$4,602 for the three months endedApril 30, 2021 , and 2020, respectively. The decrease in gross profit is mainly attributable to the cessation of business operations arising from the COVID-19 pandemic and related government actions. General and Administrative Expenses. General and administrative expenses were$6,501 and$88,867 for the three months endedApril 30, 2021 , and 2020, respectively. The decrease in general and administrative expenses was primarily attributable to the cessation of business operations arising from the COVID-19 pandemic and related government actions.
During the three months ended
Income Tax Expense. We did not record income tax expenses for the three months
ended
Net Loss. We recorded a net loss of
Nine Months Ended
Revenues. During the nine months endedApril 30, 2021 , and 2020, we earned revenues of$0 and$64,890 , respectively. The decrease in our revenue is primarily attributable to the impact of COVID-19 and related government actions on our business operations. We do not expect to generate any revenues for the foreseeable future unless an extraordinary corporate event such as a merger or acquisition or other strategic partnership occurs. No customers accounted for 10% or more of our total net revenue during the nine months endedApril 30, 2021 . During the nine months endedApril 30, 2020 , the following customers accounted for 10% or more of our total net revenues: Nine months ended April 30, 2020 Percentage of Revenues revenues North Cloud Sdn Bhd$ 26,961 41.55% Creative Property Management SdnBhd 6,394 9.85% East Cloud Sdn Bhd 16,482 25.40% MIG Network & Consultancy Sdn Bhd 15,053 23.20%$ 64,890
Creative Property Management Sdn Bhd ,East Cloud Sdn Bhd , andMIG Network & Consultancy Sdn Bhd are affiliated with our executive officers and directors,Shiong Han Wee and Kwueh Lin Wong.North Cloud Sdn Bhd is a shareholder holding less than 5% of our issued and outstanding securities. General and Administrative Expenses. General and administrative expenses were$22,200 and$347,736 for the nine months endedApril 30, 2021 , and 2020, respectively. The decrease in general and administrative expenses was primarily attributable to the cessation of business operations arising from the COVID-19 pandemic and related government actions.
During the nine months ended
Gross Profit. We recorded a gross profit of$0 and$64,888 for the nine months endedApril 30, 2021 , and 2020, respectively. The decrease in gross profit is mainly attributable to the cessation of business operations arising from the COVID-19 pandemic and related government actions. 16
Income Tax Expense. We did not record income tax expenses for the nine months
ended
Comprehensive Loss. We suffered a net loss of
Liquidity and Capital Resources
Working Capital
April 30,2021 July 31, 2020
Current Assets $ 542 $ 544
Current Liabilities (2,384,883 ) (2,274,336 )
Working Capital Deficit $ (2,384,341 ) $ (2,273,792 )
We had current assets of $542 consisting solely of cash and cash equivalents as
of April 30, 2021 . Our current liabilities of $2,384,883 consisted of $1,286,091
of amount due to related parties, $990,139 of other payables and accrued
liabilities, $87,438 of accounts payable and $21,215 of current tax liabilities.
As of July 31, 2020 , we had current assets of $544 and current liabilities of
$2,274,336 . Our current assets consisted solely of cash and cash equivalents.
Our current liabilities consisted of $1,236,274 of amount due to related
parties, $933,410 of other payables and accrued liabilities, $83,458 of accounts
payable and $21,194 of current tax liabilities.
Cash Flows
Nine Months Ended Nine Months Ended
April 30, 2021 April 30, 2020Net Cash (Used in) / Provided by Operating Activities $ (2 ) $ (3,153 ) Net Cash Provided by Investing Activities $ - $ 73 Net Cash Provided by Financing Activities $ -
$ -
Cash Flow from Operating Activities
During the nine months ended
During the nine months endedApril 30, 2020 , net cash used in operating activities was$3,153 and consisted primarily of a net loss of$267,859 , a decrease in account payables of$7,996 , a decrease in other payables and accrued liabilities of$19,050 , unrealized exchange gain of$13,180 and gain on disposal of plant and equipment$45 , offset by an increase in account receivables of$5,131 , an increase in other receivables, deposits and prepayments of$29,235 , an increase in amount due to related parties of$254,122 , and depreciation of plant and equipment of$ 16,489 . 17
Cash Flow from Investing Activities
During the nine months ended
During the nine months endedApril 30, 2020 , there was net cash generated from investing activities of$73 which consisted of sales proceeds from the disposal of property, plant and equipment of$73 .
Cash Flow from Financing Activities
During the nine months ended
Financing Requirements
During the twelve-month period following the date of this quarterly report, we anticipate that we will not generate sufficient operating revenue. Accordingly, we will be required to obtain additional financing in order to pursue our plan of operations during and beyond the next twelve months. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock or shareholder loans. However, there is no assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our business plan should we decide to proceed. We anticipate continuing to rely on equity sales of our common shares and advances from our executive officers and directors in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our business operations.
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 is material to stockholders. Critical Accounting Policies The preparation of financial statements in conformity with accounting principles generally accepted inthe United States of America ("U.S. GAAP") requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes. TheSEC has defined a company's critical accounting policies as the ones that are most important to the portrayal of the company's financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, we have not identified any additional critical accounting policies and judgments. We also have other key accounting policies, which involve the use of estimates, judgments and assumptions that are significant to understanding our results, which are described in note 2 to our financial statements. Although we believe that our estimates, assumptions and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.
Recent accounting pronouncements
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations. 18
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