The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act relating to future events or our future performance. The following discussion should be read in conjunction with our consolidated financial statements and notes to our financial statements included elsewhere in this report. This discussion contains forward-looking statements that relate to future events or our future performance. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, we cannot assure that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.
Business Overview
Since
During our fiscal year ended
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We now propose to undertake additional work to determining the limits of the technology, maximize production efficiency, and reduce production costs, which we believe will enhance our commercialization efforts. Subject to successfully completing our ongoing work, we intend to seek to commercialize the licensed technology through joint ventures strategic partners, sublicenses, and other arrangements that may enable us to take advantage of the technical, regulatory relationships and experience, and financial resources of experienced cannabinoid production firms. We intend to authorize these third parties to incorporate the technology into production facilities they fund, build, and operate to produce medical, food additive, and recreational cannabis-related products in compliance with applicable state and federal law. We will need additional financing from external sources to begin these efforts.
During the last three fiscal years, we have not generated revenue and have devoted our limited management, technical, and financial resources to pay general and administrative expenses in order to position us to be able to commercially exploit the licensed technology after completion of the efficacy testing required to demonstrate its commercial viability, organize our corporate structure, and seek substantial amounts of additional capital required to implement our business plan.
We need additional external capital to continue operations.
Results of Operations
Years Ended
Revenues. We had no revenues during the years ended
Consulting Fees. Consulting fees were
Professional Fees. Professional fees were
Selling, General, and Administrative Expenses. Selling, general, and
administrative expenses were
Other Income (Expenses). We had net other expenses of
Net Loss. We had a net loss of
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Liquidity and Capital Resources
As ofJuly 31, 2021
As of
For the year ended
Net cash used in operating activities was
During the year ended
During the year ended
Future Capital Requirements
Our current capital resources from our private sale of common stock after
We are presently seeking debt and equity financing to fund the
We estimate that we will require approximately
To fund the above requirements, we are currently seeking between
We may also seek additional debt and equity financing to fund payment of additional trade and other obligations incurred and costs of implementing our business plan. Our ability to attract debt financing will be substantially impaired by our current lack of both revenues and a robust, viable trading market for our common stock. Accordingly, any debt financing will likely be convertible to common stock, at the lender's option, at prices discounted to our stock trading price at the time of conversion, which could dilute the interests of existing stockholders. We cannot assure that any such financings will be available, or can be completed on terms acceptable,
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to us. Any transaction involving the issuance of preferred or common stock, or securities convertible into common stock, would result in dilution, possibly substantial, to our current security holders.
Management's Plan to Continue as a Going Concern
Our independent registered public accounting firm's report contains an explanatory paragraph which has expressed substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing. In order to continue as a going concern, we will need, among other things, additional capital resources. Management's plans to obtain capital from the sale of our securities and short-term borrowings from stockholders or related parties when needed. However, management cannot provide any assurance that we will be successful in accomplishing any of our plans. Our ability to continue as a going concern is dependent upon our ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Critical Accounting Pronouncements
Our financial statements and related public financial information are based on
the application of generally accepted accounting principles in
Financial Reporting Release No. 60, published by the
While all these accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those that have the most substantial impact on our financial statements and require management to use a greater degree of judgment and estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause a material effect on our results of operations, financial position, or liquidity for the periods presented in our annual report.
Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with maturities of three months or less at the time of acquisition.
Revenue Recognition
Revenue is recognized upon delivery of goods when the sales price is fixed or determinable and collectability is reasonably assured. Revenue is not recognized until persuasive evidence of an arrangement exists.
Stock-Based Compensation
We account for stock-based compensation under Accounting Standards Codification Topic 718, "Compensation-Stock Compensation," using the fair value-based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity
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exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments.
Advertising
Advertising costs that are not material for the periods presented are expensed as incurred.
Basic and Fully Diluted Net Loss per Share
Basic net loss per common share is based on the weighted average number of
shares outstanding during the periods presented. Diluted earnings per share is
computed using the weighted average number of common shares plus dilutive common
share equivalents outstanding during the period. There are no common stock
equivalents as of
Recent Accounting Pronouncements
We have evaluated recent accounting pronouncements and believe that none of them will have a material effect on our financial statements.
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