Forward-Looking Statements
The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help you understand its historical results of operations during the periods presented and its financial condition. This MD&A should be read in conjunction with its financial statements and the accompanying notes and contains forward-looking statements that involve risks and uncertainties and assumptions that could cause its actual results to differ materially from management's expectations. See the sections entitled "Forward-Looking Statements" and "Risk Factors" above.
Plan of Operations
Dissolved
Dissolved
After saving thousands in taxes, clients are happy to trust us with the
management of their wealth, especially when treated to a different wealth
management experience. Sofos is a Registered Investment Advisory firm. An RIA is
an advisor or firm engaged in financial planning and wealth management business
and is registered either with the
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Although the
Only 5% of all financial planners are RIAs. The advantage of the RIA model is lower cost to the client. Also, since RIAs are not compensated by commissions on financial products, their advice is considered less biased and more accurate. Coupled with tax savings, its status as a RIA makes the Company very attractive to the most profitable clients.
This entity in the Company's corporate family employs its merger strategy to
acquire talent and build wealth for
Tax Master Network, LLC
Tax Master Network "TMN" was a key acquisition in fiscal year 2016. TMN supports
over 300 CPA and Enrolled Agent professionals, training them to add crucial tax
planning services to support clients. Not only did this acquisition bring
high-end tax planning to
Results of Operations for the year ended
Revenues
For the year ended
Operating Expenses
Professional services expenses include consulting fees, legal expense,
professional fees, and business consulting. Professional services expenses
decreased
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Depreciation and amortization expenses include depreciation on fixed assets and
amortization of definite lived intangibles. Depreciation and amortization
expenses increased
General and administrative expenses decreased
Marketing expenses decreased
Salaries and wages expenses increased
The Company experienced a decrease in net loss of
Significant Accounting Policies
Certain critical accounting policies affect the more significant judgments and estimates used in the preparation of the Company's consolidated financial statements. These policies are contained in Note 1 to the consolidated financial statements.
Use of Estimates and Assumptions.
The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in
Revenue Recognition and Accounts Receivable.
Investment management fees are recognized as services are provided by the Company. Investment management fees include fees earned from assets under management by providing professional services to manage clients' investments. Revenues are recognized in the period earned.
Services income is recognized as consulting and other professional services are performed by the Company. Income is recognized as services are delivered.
Commission revenue is derived from the sale of premiums on life insurance policies held by third parties. The revenue is recognized as received from the insurer, issuer.
Revenue represents gross billings less discounts, net of sales tax, as applicable. Amounts invoiced for work not yet completed are shown as deferred revenue in the accompanying consolidated balance sheets.
Tax Master Network has 3 types of services that are charged and collected on a month to month subscription basis (Tax Master Network basic membership, All-Stars coaching, and Wire Service weekly broadcast email). None of these programs come with a long-term commitment or contract, and there is no up-front payment beyond the monthly subscription fee. Cancellations are processed within the month requested and memberships are closed at the end of the period for which the most recent payment was made. Members are not entitled to refunds for unused memberships.
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Trade accounts receivable are carried only for subscription revenues not
received in the period they apply to. The allowance for doubtful accounts was
In the normal course of business, the Company extends credit on an unsecured
basis to its customers, substantially all of whom are located in
Stock-Based Compensation.
The Company recognizes the fair value of the stock-based compensation awards as wages in the accompanying statements of operations on a straight-line basis over the vesting period based on the Black-Scholes option pricing model based on a risk-free rate of 1.50% to 2.89% in 2019 and 1.49% to 2.55% in 2018, dividend yield of 0%, expected life of 10 years and volatility of 25.32% to 34.05%.
Liquidity and Capital Resources
As of
Net cash provided by operating activities was
Net cash used in investing activities was
Net cash used in financing activities was
As shown below, atSeptember 30, 2019 , its contractual cash obligations totaled approximately$560,786 all of which consisted of operating lease obligations and debt principal. Payments due by period Less than Contractual obligations 1 year 1-3 years 4-5 years Total Notes payable$ 13,393 $ 23,534 $ -$ 36,927 Operating leases 123,144 304,212 32,584 459,940 Line of Credit 63,919 - - 63,919
Total contractual cash obligations
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The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the Company will need additional financing to fund additional material capital expenditures and to fully implement its business plan. There are no assurances that additional financing will be available on favorable terms, or at all. If additional financing is not available, the Company will need to reduce, defer or cancel development programs, planned initiatives and overhead expenditures as a way to supplement the cash flows generated by operations. The Company has a backlog of fees under contract in addition to the Company's accounts receivable balance. The failure to adequately fund its capital requirements could have a material adverse effect on its business, financial condition and results of operations. Moreover, the sale of additional equity securities to raise financing will result in additional dilution to the Company's stockholders and incurring additional indebtedness could involve the imposition of covenants that restrict its operations. Management, in the normal course of business, is trying to raise additional capital through sales of common stock as well as seeking financing from third parties, via both debt and equity, to balance the Company's cash requirements and to finance specific capital projects.
Off Balance Sheet Transactions and Related Matters
Other than operating leases discussed in Note 8 to the consolidated financial statements, there are no off-balance sheet transactions, arrangements, obligations (including contingent obligations), or other relationships with unconsolidated entities or other persons that have, or may have, a material effect on financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources of the Company.
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