Our management's discussion and analysis provides a narrative about our
financial performance and condition that should be read in conjunction with the
audited and unaudited consolidated financial statements and related notes
thereto included in this quarterly report on Form 10-Q. This discussion contains
forward looking statements reflecting our current expectations and estimates and
assumptions about events and trends that may affect our future operating results
or financial position. Our actual results and the timing of certain events could
differ materially from those discussed in these forward-looking statements due
to a number of factors, including, but not limited to, those set forth in the
sections of our annual report on Form 10-K titled "Risk Factors".
Results of Operations
For the Three Months Ended November 30, 2022 and 2021
Revenues
For the three months ended November 30, 2022, and 2021, we had revenues of
$1,455,742 and $452,490, respectively. The increase was due to the revenue
earned from the two entities that we acquired in 2022 (Alchemy and Helix).
Additionally, we entered into a long-term contract in November 2021, for which
only one month of revenue was earned in the same period in 2021, while two
months of revenue were earned in the same period of 2022
Operating Expenses
For the three months ended November 30, 2022, and 2021, we had operating
expenses of $1,170,856 and 1,023,006, an increase 14.4%, due to an increase in
salaries and wages due to additional staff onboarded in conjunction with the
acquisition of Helix and Alchemy. This amount was offset by a decrease in
advertising and promotion. There was a decrease in advertising and promotion in
the quarter as we focused on building a new product and waiting for that product
to be completed before spending significantly on marketing.
Net Loss
Our net loss for the three months ended November 30, 2022, and 2021, was
$(990,242) versus $(513,791) respectively. The difference is attributable to an
increase in cost of sales attributed to the new business models in the
acquisitions of Helix and Alchemy.
Assets and Liabilities
Our total current assets decreased to $684,039 from $1,011,896 during the
three-month period ended November 30, 2022, compared to August 31, 2022. This
decrease was due to cash used for operations and decrease in Accounts
Receivables collected.
Total current liabilities decreased to $2,763,142 from $2,974,009 during the
three-month period ended November 30, 2022, compared to our year end at August
31, 2022. The decrease reflects a decrease in deferred revenue from $474,977 to
$5,280.
Net cash from financing activities decreased to $763,897 as of November 30,
2022, as compared to $1,745,911 for the same period in 2021. The decrease was
due to a decrease of proceeds from the issuance of Common Stock and the
conversion of Preferred Shares to debt, but partially offset by the proceeds
from a new Line of Credit.
Liquidity and Capital Resources
Cash used by operating activities
The Company used $1,038,397 in cash from operating activities for the quarter
ended November 30, 2022, as compared to a use of $2,012,440 for the quarter
ended November 30, 2021. The decrease is due to an improvement in Accounts
Receivables and less cash used for Account Payables.
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Cash provided by investing activities
Net cash from investing activities was $67,330 for the period ended November 30,
2022, as compared to cash used of $65,075 for the period ended November 30,
2021. The increase in net cash is due to the collection of loan receivables from
the small business loans provided by Business Warrior Funding.
Cash provided by financing activities
Net cash from financing activities decreased to $763,897 as of November 30,
2022, as compared to $1,745,911 for the same period in 2021. The decrease was
due to the exchange of preferred stock for debt.
We currently do not have sufficient capital to fund our cash needs for the next
12 months. We intend to rely on financing from convertible debt, promissory
notes, and sale of stock to fund our operations.
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