(3)
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Is it anticipated that any significant change in results of operations from the corresponding period for the last fiscal year will be reflected by the earnings statements to be included in the subject report or portion thereof? If so, attach an explanation of the anticipated change, both narratively and quantitatively, and, if appropriate, state the reasons why a reasonable estimate of the results cannot be made.
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Yes [X] No [ ]
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During the six month period ended June 30, 2017 the Company has experienced a substantive increase in operational costs as we expanded our board of directors, retained several consultants to help implement expansion of our business model into new focus areas and completed several equity based financing transactions.
Period over period net revenue is expected to increase slightly from $352 (2016) to approximately $1,312 (2017). Operating expenses are expected to reflect substantive increases from $22,537 in the six months ended June 30, 2016 to approximately $629,000 in the current six month period, consisting of approximately $223,000 in share based compensation with respect to shares issued to directors and consultants, and approximately $210,000 in fees paid to various consultants. During the most recent six months ended June 30, 2017 the Company has also incurred various costs relative to shareholder communications and investor relations services, including share based compensation, in the approximate amount of $111,000 with no comparative fees in the prior six month period. General & administrative and management fees also experienced a substantive increase period over period from $2,212 (2016) to approximately $60,000 in fiscal 2017. Professional and audit fees period over period remained consistent at $21,935 in the six months ended June 30, 2016 and $approximatley 20,000 in the six months ended June 30, 2017. During the most recent six month period ended June 30, 2017 the Company recorded other expenses including interest expense of approximately $52,000 as compared to only $193 in the prior six month period. Derivative expenses including day one loss totaled $216,200 in the current six months compared to Nil in the six months ended June 30, 2016 as a result of the entry into various debt financing agreements with convertible notes for total net proceeds of $294,750. Finally the current six months reflects a gain from debt extinguishment of $50,000 with no comparative entry in the prior six month period as a result of the forgiveness of a certain convertible note payable entered into in a prior period.
The Company expects to record a net loss of approximately $846,000 in the six months ended June 30, 2017 as compared to $22,378 in the prior comparative six months ended June 30, 2016.
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