You should read the following discussion and analysis of our financial condition
and results of our operations together with our financial statements and the
notes thereto appearing elsewhere in this Annual Report. This discussion
contains forward-looking statements reflecting our current expectations, whose
actual outcomes involve risks and uncertainties. Actual results and the timing
of events may differ materially from those stated in or implied by these
forward-looking statements due to a number of factors, including those discussed
in the section entitled "Cautionary Statement regarding Forward-Looking
Statements" and elsewhere in this Annual Report. Please see the notes to our
Financial Statements for information about our Critical Accounting Policies and
Recently Issued Accounting Pronouncements.
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The following discussion provides information that management believes is
relevant to an assessment and understanding of our past financial condition and
plan of operations. The discussion below should be read in conjunction with the
consolidated financial statements and related notes thereto included elsewhere
in this annual report.
About Beyond Commerce
Beyond Commerce, Inc. was formed as a Nevada corporation on January 12, 2006.
We are focused on business combinations of "big data" companies in global B2B
internet marketing analytics, technologies and services. The Company's objective
is to develop and deploy disruptive strategic software technology that will
build on organic growth potential and to exploit cross-selling opportunities. We
plan to offer a cohesive global digital product and services platform to provide
clients with a single point of contact for their big data, marketing and related
sales initiatives. We believe our business model will ensure that information
will remain secure and private, as necessitated by the current market climate.
In addition, we plan to provide solutions which facilitate the exchange of
information and data transactions between supply chain participants, such as
manufacturers, retailers, distributors and financial institutions. The goal is
to automate potential client internal processes thereby increasing productivity
and lowering costs. We plan to develop proprietary algorithms which it will
embed in the planned software to enable clients to access data and gain insight
into their business, through that data, leading to improved internal decision
making.
The Company currently owns and operates a data company and is actively seeking
acquisition opportunities in high growth sectors such as psychedelics,
cryptocurrency, ESports and Logistics among others. The Company's strategy is to
identify companies in the early stages of development or growth, acquire them
and provide these companies capital in order to accelerate their development and
growth with the intention to ultimately sell these companies
Impact of Virus Outbreak and Management's Plans
On March 11, 2020, the World Health Organization declared the outbreak of a
respiratory disease caused by a new coronavirus as a "pandemic". First
identified in late 2019 and known now as COVID-19, the outbreak has impacted
thousands of individuals worldwide. In response, many countries have implemented
measures to combat the outbreak which have impacted global business operations.
The majority of the states within the United States have issued a stay at home
order to its residents. Accordingly, the Company's revenues associated with our
business model has drastically declined through date of the financial statements
and its results of operations, cash flows and financial condition have been
negatively impacted by the pandemic.
The impact of the disease outbreak, as of the date of the financial statements,
remains highly fluid and uncertain. The Company is unable to predict, with any
sort of certainty the timing for the end of the restrictions. Accordingly, the
financial impact on the results of operations, cash flows and financial
condition cannot be reasonably estimated at this time. No impairments were
recorded as of the balance sheet date; however, due to significant uncertainty
surrounding the situation, management's judgment regarding this could change in
the future.
The Company continues to maintain the business working with customers to fit
their needs - We are also offering COVID type services. We have clients in the
medical field and are offering to do survey work for them regarding
their response for the COVID outbreak so they can document how they are doing as
a company. We are in touch with our customers daily, we have even discussed
switching them from phone calls to web surveys until this has passed. Along with
the above, the Company, Service 800, was approved on April 16, 2020 for $500,000
from the Paycheck Protection and approved on February 2, 2021 for $625,000 from
the Paycheck Protection Round Two, which provided funds to assist in maintaining
our employee base. Both loans have been forgiven by the SBA during 2021.
Additionally, on March 30, 2021 the Company through its Service 800 Inc.
subsidiary, received $150,000 in funding in conjunction with a promissory note
under the SBA Loan Program.
Service 800 Agreement
On December 14, 2017, we entered into an agreement with Service 800 and the sole
shareholder of Service 800 (the "Shareholder"), and on March 4, 2019 we
purchased all of the issued and outstanding shares of common stock of Service
800 from the Shareholder (the "Transaction"). Service 800 operates as a premium
provider of Customer Feedback Management Platforms to their Fortune 500 and 1000
clients on a global basis. Service 800 provides survey authoring, response
rates, feedback types and data analysis on their proprietary, cloud based,
automated and centralized platform. Service 800 has currently 25 full time
employees that provide services to 130 companies and 300 service organizations.
Service 800's current operations and strategic business plan is to further
develop its marketing and Customer Experience platform to use within the
framework of its current Fortune 500 and 1000 clients.
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Upon the closing of the business combination, Jean Mork Bredeson, Founder and
President of Service 800, Inc., received $2,100,000 in cash, and $2,100,000 in a
three-year 5.5% promissory note. The $2,100,000 promissory note is personally
guaranteed by the estate of George Pursglove whose executor is Geordan Pursglove
Beyond Commerce's President and CEO. On July 18, 2018 Jean Mork Bredeson
received 2,000,000 shares of Beyond Commerce's restricted common stock. On July
18, 2018 Allen Bredeson, Vice President of Marketing and Client Relations,
received 1,000,000 shares of Beyond Commerce's restricted common stock. On July
18, 2018 Derick White, Vice President of Sales received 1,000,000 shares of
Beyond Commerce's restricted common stock, and Jeff Schwendinger, Vice President
of Operations on July 18, 2018 received 1,000,000 shares of Beyond Commerce's
restricted common stock. The effective date of this business combination between
Beyond Commerce and Service 800, is February 28, 2019, when Beyond Commerce
received 100% of Service 800 stock, assets consisting of the company's website,
customer lists, current customer base, and customers in the company's pipeline
and proprietary software.
TCA Special Situations Credit Strategies ICAV
On December 31, 2019, Beyond Commerce, Inc., a Nevada corporation (the
"Company"), entered into a securities purchase agreement (the "Securities
Purchase Agreement") with TCA Special Situations Credit Strategies ICAV, an
Irish collective asset vehicle (the "Buyer" or "TCA ICAV"), and TCA Beyond
Commerce, LLC, a Wyoming limited liability company ("TCA Beyond Commerce"),
pursuant to which the Buyer purchased from the Company a senior secured
redeemable debenture having an initial principal amount of $900,000 and an
interest rate of 16% per annum (the "Initial Debenture"). Additional Debentures
may be issued and funded, subject to and upon the approval of the Company and
the Buyer, provided that the total value of the Initial Debenture and the
Additional Debentures together shall not exceed $5,000,000.
In May 2020, the SEC appointed a Receiver to close down the TCA Global Master
Fund, L.P. over allegations of accounting fraud. The amount recorded by the
Company as being owed to TCA was based on TCA's application of prior payments
made by the Company. The Company believes that prior payments of principal and
interest may have been applied to unenforceable investment banking and other
fees and charges. It is the Company's position that the amount owed to TCA is
less than the amount set forth above.
The Securities Purchase Agreement was entered into as part of a larger financing
transaction between the Company and the Buyer. As part of this financing
transaction, the Company and the Buyer formed TCA Beyond Commerce as a special
purpose vehicle to complete the Company's acquisition of Customer Centered
Strategies, L.L.C., a Minnesota limited liability company ("CCS"), while using
the funds generated through the Company's sale of the Initial Debenture. The
Company owns 80% of the outstanding common membership interests of TCA Beyond
Commerce (the "Common Units") and the Buyer owns 2,000 Common Units, comprising
the remaining 20% of the Common Units issued, as well as 100% of the 250,000
Series A Preferred Units issued and the sole Series B Preferred Unit issued
(which is the sole class of equity with voting rights). The Common Units and the
Series A Preferred Units are convertible into shares of the Company's common
stock at a 10% discount to the lowest closing bid price during the preceding 20
trading days and such equity will be redeemed pursuant to the Company's making
of installment payments, in accordance with the Operating Agreement of TCA
Beyond Commerce. The Company has pledged its interests in TCA Beyond Commerce to
TCA ICAV as security for the repayment of the Initial Debenture.
TCA Beyond Commerce entered into a Membership Interest Purchase Agreement (the
"Membership Interest Purchase Agreement"), whereby TCA Beyond Commerce acquired
100% of the authorized and issued membership interests of CCS from its sole
member (the "CCS Seller"). TCA Beyond Commerce acquired the membership interests
for a purchase price $525,000 (the "CCS Purchase Price"), with $175,000 to be
paid in cash and the remaining $350,000 to be paid through TCA Beyond Commerce's
issuance of a convertible promissory note with an original principal of $350,000
and a conversion feature that provides the CCS Seller with the right to convert
outstanding principal and accrued interest into shares of the Company's common
stock at a price based on the 10-day trailing average price of the Company's
stock (the "CCS Purchase Note"). On November 18,2021 the Company and the sole
member of CCS reached a Settlement Agreement whereby the Company paid $100,000
to pay off, cancel and extinguish the convertible promissory note and any other
remaining obligations. A $234,667 gain on extinguishment of debt was realized by
the Company.
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Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations
is based on our unaudited condensed consolidated financial statements, which
have been prepared in accordance with U.S. GAAP. The preparation of these
unaudited condensed consolidated financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent liabilities. On an
on-going basis, we evaluate past judgments and our estimates, including those
related to allowance for doubtful accounts, allowance for inventory write-downs
and write offs, deferred income taxes, provision for contractual obligations and
our ability to continue as a going concern. We base our estimates on historical
experience and on various other assumptions that we believe to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
apparent from other sources. Actual results may differ from these estimates
under different assumptions or conditions.
Note 2 to the consolidated financial statements, presented in our Annual Report
on Form 10-K for the fiscal year ended December 31, 2021, describes the critical
accounting estimates and policies used in preparation of our consolidated
financial statements. There were no significant changes in our critical
accounting estimates during the year ended December 31, 2021.
Use of Estimates
The preparation of consolidated financial statements and accompanying notes in
conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Estimates are used in the determination of depreciation and amortization and the
valuation for non-cash issuances of equity instruments, web site, income taxes,
and contingencies, among others. Actual results could differ materially from
these estimates.
Cash and Cash Equivalents
The Company classifies as cash and cash equivalents amounts on deposit in banks
and cash temporarily in various instruments with original maturities of three
months or less at the time of purchase. The Company's cash management system is
currently integrated within one banking institution.
Fair Value of Financial Instruments
The carrying value of the current assets and liabilities approximate fair value
due to their relatively short maturities.
Fair Value Measurements
Statement of financial accounting standard FASB Topic 820, Disclosures about
Fair Value of Financial Instruments, requires that the Company disclose
estimated fair values of financial instruments. The carrying amounts reported in
the statements of financial position for assets and liabilities qualifying as
financial instruments are a reasonable estimate of fair value.
The Company applies the fair value hierarchy as established by GAAP. Assets and
liabilities recorded at fair value in the consolidated balance sheets are
categorized based upon the level of judgment associated with the inputs used to
measure the fair value as follows.
· Level 1 - quoted prices in active markets for identical assets or
liabilities.
· Level 2 - other significant observable inputs for the assets or
liabilities through corroboration with market data at the measurement
date.
· Level 3 - significant unobservable inputs that reflect management's best
estimate of what market participants would use to price the assets or
liabilities at the measurement date.
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Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow,
market or foreign currency risks. The Company evaluates all of its financial
instruments to determine if such instruments are derivatives or contain features
that qualify as embedded derivatives. For derivative financial instruments that
are accounted for as liabilities, the derivative instrument is initially
recorded at its fair value and then is revalued at each reporting date, with
changes in fair value reported in the consolidated statement of operations. For
stock based derivative financial instruments, Fair value accounting requires
bifurcation of embedded derivative instruments such as conversion features in
convertible debt or equity instruments, and measurement of their fair value for
accounting purposes. In determining the appropriate fair value, the Company uses
the Black-Scholes option-pricing model. In assessing the convertible debt
instruments, management determines if the convertible debt host instrument is
conventional convertible debt and further if there is a beneficial conversion
feature requiring measurement. If the instrument is not considered conventional
convertible debt, the Company will continue its evaluation process of these
instruments as derivative financial instruments.
Once determined, derivative liabilities are adjusted to reflect fair value at
the end of each reporting period. Any increase or decrease in the fair value
from inception is made quarterly and appears in results of operations as a
change in fair market value of derivative liabilities.
Impairment of Long-lived Assets
The Company accounts for long-lived assets in accordance with the provisions of
ASC 360-10-35-21, Accounting for the Impairment of Long-Lived Assets. This
statement requires that long-lived assets and certain identifiable intangibles
be reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Recoverability of
assets to be held and used is measured by a comparison of the carrying amount of
an asset to future net cash flows expected to be generated by the asset. If such
assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceeds the
fair value of the assets. Assets to be disposed of are reported at the lower of
the carrying amount or fair value less costs to sell. Fair values are determined
based on quoted market value, discounted cash flows or internal and external
appraisals, as applicable. During the year ended December 31, 2021 the Company
recognized an impairment in the CCS customer relationships of $273,284.
Leases
The Company accounts for leases in accordance with ASC 842, Leases. The Company
determines if an arrangement is a lease at inception. The Company has an
operating lease for the Company's subsidiary Service 800 corporate office.
Operating leases are included in operating lease ROU assets and operating lease
liabilities, current and noncurrent, on the consolidated balance sheet. Lease
liabilities are initially recorded at the present value of the lease payments by
discounting the lease payments by the IBR and then recording accretion over the
lease term using the effective interest method. Operating lease classification
results in a straight-line expense recognition pattern over the lease term and
recognized lease expense as a single expense component, which results in
amortization of the ROU asset that equals the difference between lease expense
and interest expense. Operating lease expense is included in selling, general
and administrative expense, based on the use of the leased asset, on the
consolidated statement of income. Leases with an initial term of 12 months or
less are not recorded on the balance sheet and are not material; the Company
recognizes lease expense for these leases on a straight-line basis over the
remaining lease term.
Income Taxes
The Company accounts for income taxes under ASC 740-10-30. Deferred income tax
assets and liabilities are determined based upon differences between the
financial reporting and tax bases of assets and liabilities and are measured
using the enacted tax rates and laws that will be in effect when the differences
are expected to reverse. Deferred tax assets are reduced by a valuation
allowance to the extent management concludes it is more likely than not that the
assets will not be realized. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income of the consolidated statements of operations in the period
that includes the enactment date. A valuation allowance is provided when it is
more likely than not that some or all of the deferred tax assets may not be
realized.
The Company follows the guidance of ASC 740-10-25 in determining whether tax
benefits claimed or expected to be claimed on a tax return should be recorded in
the financial statements. The Company may recognize the tax benefit from an
uncertain tax position only if it is more likely than not that the tax position
will be sustained on examination by the taxing authorities, based on the
technical merits of the position. The tax benefits recognized in the financial
statements from such a position should be measured based on the largest benefit
that has a greater than fifty percent (50%) likelihood of being realized upon
ultimate settlement. The Company recognizes interest and penalties related to
uncertain tax positions in income tax expense. The Company had no material
adjustments to its liabilities for unrecognized income tax benefits.
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Stock Based Compensation
During the year ended December 31, 2021, the Company did not issue any stock
options. This Company's existing stock plan expired on September 11, 2018.
Employee Benefits
The Company during 2021 mainly attributable to the Service 800, Inc acquisition
had approximately twenty-five (25) full time employees within this organization
and offers certain healthcare benefits to remain competitive within the market
place.
Recent Accounting Pronouncements
The Company reviews all of the Financial Accounting Standard Board's updates
periodically to ensure the Company's compliance of its accounting policies and
disclosure requirements to the Codification Topics.
The FASB has issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the
Accounting for Income Taxes. The new guidance is intended to simplify the
accounting for income taxes by removing certain exceptions to the general
principles of ASC 740. The guidance also improves consistent application by
clarifying and amending existing guidance from ASC 740. This guidance is
effective for fiscal years beginning after December 15, 2020, including interim
periods therein and is to be applied on a retrospective, modified retrospective
or prospective approach, depending on the specific amendment. Early adoption is
permitted. The adoption of the new guidance did not change anything in the
consolidated financial statements and therefore had no material impact.
In August 2020, the Financial Accounting Standards Board ("FASB") issued a new
standard (ASU 2020-06) to reduce the complexity of accounting for convertible
debt and other equity-linked instruments. The ASU simplifies accounting for
convertible instruments by removing major separation models required under
current Generally Accepted Accounting Principles (GAAP). Consequently, more
convertible debt instruments will be reported as a single liability instrument
and more convertible preferred stock as a single equity instrument with no
separate accounting for embedded conversion features. The ASU removes certain
settlement conditions that are required for equity contracts to qualify for the
derivative scope exception, which will permit more equity contracts to qualify
for it. The ASU also simplifies the diluted earnings per share (EPS) calculation
in certain areas. As a result, the new standard may affect net income and EPS,
and therefore performance measures, and increase debt levels which may impact
debt covenant compliance.
ASU 2020-06 is effective for public business entities that meet the definition
of a Securities and Exchange Commission (SEC) filer, excluding entities eligible
to be smaller reporting companies as defined by the SEC, for fiscal years
beginning after December 15, 2021, including interim periods within those fiscal
years. For all other entities, the standard will be effective for fiscal years
beginning after December 15, 2023, including interim periods within those fiscal
years. Early adoption will be permitted.
The Company will continue to monitor these emerging issues to assess any
potential future impact on its financial statements. The Company has taken the
position that any future standards will not be disclosed to the extent they are
not material to our operations.
The FASB has issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the
Accounting for Income Taxes. The new guidance is intended to simplify the
accounting for income taxes by removing certain exceptions to the general
principles of ASC 740. The guidance also improves consistent application by
clarifying and amending existing guidance from ASC 740. This guidance is
effective for fiscal years beginning after December 15, 2020, including interim
periods therein and is to be applied on a retrospective, modified retrospective
or prospective approach, depending on the specific amendment. Early adoption is
permitted. We are currently evaluating the impact of adopting the new guidance
on the consolidated financial statements, but it is not expected to have a
material impact.
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Financial Presentation
The following sets forth a discussion and analysis of the Company's financial
condition and results of operations for the fiscal years ended December 31, 2021
and 2020. This discussion and analysis should be read in conjunction with our
consolidated financial statements appearing elsewhere in this Form 10-K. The
following discussion contains forward-looking statements. Our actual results may
differ significantly from the results discussed in such forward-looking
statements. Factors that could cause or contribute to such differences include,
but are not limited to, those discussed in "Risk Factors" beginning on page 14
of this Form 10-K.
Results of Operations
Through our Service 800 Inc subsidiary, many of our clients; GE Healthcare,
Audiology System, Inc 3M Healthcare, Johnson & Johnson Vision Care, Albany
Molecular Research Inc., Sakura Finetek, Abbott Diagnostics, Biosense Webster, a
Johnson & Johnson Company and Medtronic to name a few took the time during
pandemic to begin strategic planning with Service 800 to grow their business
with the company by renewals, expansion, and better ways to grow our programs
with each and every one of them for the future. This select market segment
continues to be a major source of revenue for the Company as we expand our
services within this business segment. We anticipate revenue getting back in
line with exceeding our expectations as the economy recovers from the Covid-19
pandemic and we progress further into the year. All renewals that have taken
place are on a minimum of a one to two-year term with an auto renewal taking
place when the contract expires. During the pandemic, it made our customers
realize the value that Service 800 brings to the clients in the form of
providing valuable information to not only help their growth within their own
companies, but it also helps them be better providers to their customers as
well. We continue to look forward to growth into each division of these
companies and expansion to exceed expectations that have been set. We value
these customers and are looking for all of the positive growth we have set for
the remainder of the year and moving onwards to future years to come.
For the Years Ended December 31, 2021 and 2020
Revenue
Revenue generated for the twelve months ended December 31, 2021 and 2020 was
$4,243,053 and $4,188,782, respectively, an increase of approximately 1%. We
recognized revenue during 2021 being created from both the Service 800 and
Customer Centered Strategies subsidiaries.
Operating Expenses
For twelve months ended December 31, 2021 and 2020 operating expenses were
$6,189,587 and $6,523,861, respectively. Cost of revenue decreased by $144,128
as did general and administrative expenses by $658,121 in 2021 versus 2020.
Payroll expenses increased year over year by $237,976, professional fees
increased during 2021 by $313,975 and depreciation and amortization decreased by
$83,976 as aging of the assets would result in a lower depreciation and
amortization expense.
Non-operating income (expense)
The Company reported non-operating expense of $7,234,520 during the twelve
months ended December 31, 2021, a decrease of $1,233,968 compared to $8,468,487
during the twelve months ended December 31, 2020 mainly attributable to the
changes in the derivative liability and debt fees associated with our
convertible notes, along with a decrease in interest expense of $1,210,262. The
Company recognized an impairment expense of its intangible assets of $273,284
during the year ended December 31, 2021compared to no impairment expense in for
the year ended December 31, 2020.
Consolidated Net Loss
For twelve months ended December 31, 2021, the Company incurred a consolidated
net loss of $9,181,054 as compared to a consolidated net loss of $10,452,866 for
the twelve months ended December 31,2020, which was primarily due to lower
non-operating expenses including lower interest expense of $1,210,262 incurred
in 2021 compared to 2020. As of December 31, 2021 and 2020, the Company had an
accumulated deficit of $67,808,598 and $58,645,834, respectively.
Purchase of Significant Equipment
We do not anticipate the purchase or sale of any plant or significant equipment
during the next twelve (12) months.
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Going Concern
There is substantial doubt about our ability to continue as a going concern.
As of December 31, 2021, we had an accumulated deficit of $67,808,598, and we
incurred a net loss of $9,181,054 for the year ended December 31, 2021 and
$10,452,866 for the year ended December 31, 2020. The continuity of our future
operations is dependent upon our ability to increase sales and brand awareness.
These conditions raise substantial doubt about our ability to continue as a
going concern. We intend to continue relying upon the issuance of debt and
equity securities to finance our operations. In this regard, we are restricted
by the number of shares available for issuance in an equity financing, and we
will likely need to increase our authorized capital in order to take advantage
of such financing. However, there can be no assurance that we will be successful
in obtaining shareholder approval to increase our authorized capital, that we
will be successful in raising the funds necessary to maintain operations, or
that a self-supporting level of operations will ever be achieved. The likely
outcome of these future events is indeterminable. Our financial statements do
not include any adjustment to reflect the possible future effect on the
recoverability and classification of the assets or the amounts and
classification of liabilities that may result should we cease to continue as a
going concern.
Liquidity and Capital Resources
Our ability to continue as a going concern is dependent on our ability to raise
additional capital and implement our business plan. Since inception, we have
been funded by related parties through capital investment and borrowing of
funds.
We had total current assets of $1,607,347 and $1,276,871 as of December 31, 2021
and 2020, respectively. Current assets consist primarily of cash and accounts
receivable. The Company had a $67,808,598 accumulated deficit on its balance
sheet as of December 31, 2021.
We had total current liabilities of $5,414,772 and $7,025,541 as of December 31,
2021 and 2020, respectively. Current liabilities consisted primarily of the
derivative liability, accounts payable, accrued payroll and payroll taxes,
related party debt, and accrued interest. The main decreases occurred in lower
accounts payable of $401,904, lower accrued payroll related expenses of
$1,292,550 and a decrease in the derivative liability of $473,323. Short term
borrowings decreased by $1,198,555 due to PPP loan forgiveness of $500,000 and
settlement of debt for equity of $713,554. Short term borrowings - related party
increased by $1,446,000 due to the issuance of a convertible note to an officer
in settlement for payroll liabilities. Accrued interest payable increased by
$303,067 for the year ended December 31, 2021 compared to the same date of the
prior year.
We had a working capital deficit of $3,807,425 and $5,748,670 as of December 31,
2021 and 2020, respectively. The decrease of $1,941,245 for the period as of
December 31, 2021 compared to December 31, 2020 was due in part to a decrease of
$1,292,550 in accrued payroll liabilities, a decrease of $401,904 in accounts
payable and a decrease in derivative liability of $473,323. Cash increased by
$486,087 due mainly to the proceeds from the issuance of Preferred Series C
stock; accrued interest payable increased by $303,067 and short term borrowings
and short term borrowings - related party increased by $247,445.
We did not have any off-balance sheet arrangements at December 31, 2021 and
2020.
Cash Flow from Operating Activities
For the twelve months ended December 31, 2021 and 2020, cash used in operating
activities was $1,847,597 and $888,650, respectively. This increase of cash used
is attributable to increased cash requirements for the operations of the
Company, which recorded a loss from operations of $1,946,534 for the year ending
December 31, 2021.
Cash Flow from Investing Activities
For the twelve months ended December 31, 2021 and 2020, cash used in investing
activities was $250,000 and $16,230 respectively, due to the investment in
Cityfreighter of $250,000 in 2021.
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Cash Flow from Financing Activities
For the twelve months ended December 31, 2021 and 2020, cash provided by
financing activities was $2,583,684 and $403,803, respectively, which represents
$625,000 in cash from PPP loans and $150,000 in cash from the SBA loan received
by the Company offset by the payment of certain notes. The Company received
proceeds of $2,000,000 relating to the issuance of 20,000 shares of Preferred
Stock Series C.
Contractual Obligations
As a "smaller reporting company," we are not required to provide tabular
disclosure of contractual obligations.
Inflation
Inflation and changing prices have not had a material effect on our business,
but we do expect that inflation or changing prices may affect our business in
the foreseeable future.
Seasonality
In the past, our operating results and operating cash flows historically have
not been subject to seasonal variations. This pattern may change, however, in
the event that we succeed in bringing our planned products to market.
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