ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
GENERAL
Globe
Net Wireless Corp. was incorporated under the laws of the State of Nevada, U.S. on September 4, 2009. Our registration statement
on Form S-1 was filed with the Securities and Exchange Commission was declared effective on May 15, 2013.
On
December 9, 2016, Globe Net issued a press release announcing that it had launched BizPro Mobile Apps, a suite of mobile app development
services for the small to medium sized business mobile app market. For more information, please refer to Exhibit 99.1 filed of
the form 8-K filed on December 13, 2016 for more details.
Description
of Business
Rural
Internet Service Provider (RISP)
Globe
Net is in the business of providing rural communities with high-speed internet connectivity at speeds equal or better than existing
competing services. With its Internet and wireless connectivity systems, Globe Net’s plan was to provide internet and related
services to both consumers and businesses in currently under serviced or unserviceable areas at real broadband speeds. Globe Net
planned to offer for sale its GNW Systems to residents and businesses located in under-serviced or non-serviced rural areas worldwide
with the initial focus on North America and China. Although Globe Net continues to attempt to achieve its goal of becoming a rural
internet provider, management intends to focus on Globe Net’s mobile app business.
App
Incubator
In
August of 2016, Globe Net began a second business concept to capitalize on the proliferation of open source application programming
interface (API) ecosystems. Management ascertained one of the key success metrics today is service velocity or the speed with
which services can be developed and introduced to the market to generate revenue.
Digital
services in the API economy are increasingly being developed using a new design pattern known as microservices. Wikipedia defines
microservices as “a software architecture style in which complex applications are composed of small, independent processes
communicating with each other using language-agnostic APIs.
In
order to take advantage of the API ecosystem economy, Globe Net wants to become an agile business, able to participate in on-demand,
context driven API economy value chains and to bring new services to market faster. The network as a digital platform will enable
them to design and deploy customer-facing digital services by “mashing up” network and IT service components that
run in the platform with each other, and potentially with services exposed by third-party platforms.
RESULTS
OF OPERATIONS
Our
financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments
relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be
unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We
expect to raise additional capital through, among other things, the sale of equity or debt securities.
Nine-month
Period Ended May 31, 2020 Compared to the Nine-month Period Ended May 31, 2019.
Our
net loss for the nine-month period ended May 31, 2020 was $21,619 (2019: $21,513), which consisted of general and administration
expenses and interest on notes payable. We did not generate any revenue during either nine-month period in fiscal 2020 or 2019.
The increase in expenses in the current fiscal year relate to an increase in interest expenses.
The
weighted average number of shares outstanding was 10,800,000 for the nine-month period ended May 31, 2020 and 10,800,000 for the
nine-month period ended May 31, 2019.
LIQUIDITY
AND CAPITAL RESOURCES
As
at May 31, 2020, our current assets were $32,519 compared to $2,001 in current assets at August 31, 2019. As at May 31, 2020,
our current liabilities were $245,536 compared to $194,306 at August 31, 2019. Current liabilities at May 31, 2020 were comprised
of $184,733 in notes payable and $2,575 in accounts payable and $58,228 in accrued liabilities.
Stockholders’
deficit increased from $191,304 as of August 31, 2019 to $245,536 as of May 31, 2020.
Cash
Flows from Operating Activities
We
have not generated positive cash flows from operating activities. For the nine-month period ended May 31, 2020, net cash flows
used in operating activities were $48,245 consisting of an adjusted net loss of $21,619 less adjustments for non-cash expenses
of amortization of $907, accrued interest of $10,278 and accretion expenses of $1,200. Changes in operating assets and liabilities
were $4,150 in accounts payable, and $6,099 in accrued liabilities and $28,762 in prepaid expenses. For the nine-month period
ended May 31, 2019, net cash flows used in operating activities were $7,784 consisting of a net loss of $21,513 less adjustments
for non-cash expenses of amortization of $2,562, accrued interest of $9,005 and accretion expenses of $1,200. Changes in operating
assets and liabilities were $6,769 in accounts payable, and $6,900 in accrued liabilities and $1,093 in prepaid expenses.
Cash
Flows from Financing Activities
We
have financed our operations primarily from either the issuance of our shares of common stock or notes payable. For the nine-month
period ended May 31, 2020, we generated $50,000 cash from financing activities from the issuance of a convertible promissory note.
We generated $nil cash in the comparative period in fiscal 2019.
PLAN
OF OPERATION AND FUNDING
We
expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances
of securities. Our working capital requirements are expected to increase in line with the growth of our business.
Existing
working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations
over the next three months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations
to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management
anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory; (ii)
developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses
with further issuances of securities and director loans. Thereafter, we expect we will need to raise additional capital and generate
revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in
dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common
stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are
not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities,
which could significantly and materially restrict our business operations. We will have to raise additional funds in the next
twelve months in order to sustain and expand our operations. We currently do not have a specific plan of how we will obtain such
funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock.
We have and will continue to seek to obtain short-term loans from our directors, although no future arrangement for additional
loans has been made. We do not have any agreements with our directors concerning these loans. We do not have any arrangements
in place for any future equity financing.
OFF-BALANCE
SHEET ARRANGEMENTS
As
of the date of this report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current
or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that are material to investors.
GOING
CONCERN
The
independent auditors’ report accompanying our August 31, 2019 financial statements contained an explanatory paragraph expressing
substantial doubt about our ability to continue as a going concern. The financial statements have been prepared “assuming
that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities
and commitments in the ordinary course of business.
CHANGE
IN ACCOUNTING POLICY
The
Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued,
which may be in advance of their effective date.