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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
10-Q/A
☒ Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For
the quarterly period ended
February 28, 2022
☐ Transition Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the
transition period from ________ to ________
Commission
file number
333-200629
BOATIM INC.
(Exact
name of small business issuer as specified in its
charter)
Nevada |
|
7370 |
|
84-4779679 |
State
or other jurisdiction
of
incorporation or organization
|
|
Primary
Standard Industrial
Classification
Number
|
|
IRS
Employer
Identification
Number
|
7950 NW 53rd Street,
Suite 337,
Miami,
FL
33166.
Tel: +1
(305)
239-9993
(Address
and telephone number of principal executive offices)
(Former
name, former address and former fiscal year, if changed since last
report)
Securities
registered pursuant to Section 12(b) of the Act:
None
Indicate
by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated
filer,” “accelerated filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act. (Check one):
Large
accelerated filer |
☐ |
Accelerated
filer |
☐ |
Non-accelerated filer |
☒ |
Smaller
reporting company |
☒ |
|
|
Emerging
growth company |
☒ |
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes
☐ No
☒
As of
March 29, 2022 there were
60,438,206 common shares issued and outstanding.
EXPLANATORY NOTE
Boatim, Inc. (the “Company”) is filing this Amendment No. 1 (this
“Amendment”) to its Quarterly Report on Form 10-Q for the quarter
ended February 28, 2022 (the “Original Form 10-Q”), as originally
filed with the Securities and Exchange Commission (the “SEC”) on
May 05, 2022, solely to properly disclose that the Company
Financial Statements as filed for said quarter were unaudited and
not reviewed in compliance with SEC rules.
Except as described above,
this Amendment does not amend, modify or update the information in,
or exhibits to, the Original Form 10-Q. Furthermore, this Amendment
does not change any previously reported financial results nor does
it reflect events occurring after the filing of the Original Form
10-Q. This Amendment should be read in conjunction with the
Original Form 10-Q and with the Company’s other filings made with
the SEC subsequent to the filing of the Original Form
10-Q.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain
information included in this Quarterly Report on Form 10-Q and
other filings of the Registrant under the Securities Act of 1933,
as amended (the “Securities Act”), and the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), as well as information
communicated orally or in writing between the dates of such
filings, contains or may contain “forward-looking statements”
within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. Forward-looking statements in this
Quarterly Report on Form 10-Q, including without limitation,
statements related to our plans, strategies, objectives,
expectations, intentions and adequacy of resources, are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such statements are subject to
certain risks, trends and uncertainties that could cause actual
results to differ materially from expected results. Among these
risks, trends and uncertainties are the availability of working
capital to fund our operations, the competitive market in which we
operate, the efficient and uninterrupted operation of our computer
and communications systems, our ability to generate a profit and
execute our business plan, the retention of key personnel, our
ability to protect and defend our intellectual property, the
effects of governmental regulation, and other risks identified in
the Registrant’s filings with the Securities and Exchange
Commission from time to time.
In
some cases, forward-looking statements can be identified by
terminology such as “may,” “will,” “should,” “could,” “expects,”
“plans,” “anticipates,” “believes,” “estimates,” “predicts,”
“potential” or “continue” or the negative of such terms or other
comparable terminology. Although the Registrant believes that the
expectations reflected in the forward-looking statements contained
herein are reasonable, the Registrant cannot guarantee future
results, levels of activity, performance or achievements. Moreover,
neither the Registrant, nor any other person, assumes
responsibility for the accuracy and completeness of such
statements. The Registrant is under no duty to update any of the
forward-looking statements contained herein after the date of this
Quarterly Report on Form 10-Q.
BOATIM
INC.
QUARTERLY
REPORT ON FORM 10-Q
TABLE
OF CONTENTS
PART 1 – FINANCIAL INFORMATION
Item 1. Financial Statements
The
accompanying interim consolidated financial statements of BOATIM
Inc. (“the Company”, “we”, “us” or “our”), have been prepared
without audit pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with United States generally accepted
principles have been condensed or omitted pursuant to such rules
and regulations.
The
interim consolidated financial statements should be read in
conjunction with the company’s latest annual financial
statements.
In
the opinion of management, the financial statements contain all
material adjustments, consisting only of normal adjustments
considered necessary to present fairly the financial condition,
results of operations, and cash flows of the Company for the
interim periods presented.
BOATIM INC.
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
February 28, |
|
|
August 31 |
|
|
|
2022 |
|
|
2021 |
|
|
|
(Unaudited and Not
Reviewed) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS |
|
|
|
|
|
|
|
|
Cash |
|
$ |
186,843 |
|
|
$ |
69,827 |
|
Prepaid
expenses |
|
|
10,743 |
|
|
|
7,500 |
|
VAT
receivable |
|
|
28,434 |
|
|
|
17,810 |
|
Total
current assets |
|
|
226,020 |
|
|
|
95,137 |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
16,918 |
|
|
|
9,440 |
|
Fixed
assets, net |
|
|
12,797 |
|
|
|
14,434 |
|
Capitalized software
costs |
|
|
452,720 |
|
|
|
510,633 |
|
Right of
use asset – operating lease |
|
|
108,527 |
|
|
|
55,743 |
|
Total
non-current assets |
|
|
590,962 |
|
|
|
590,250 |
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
|
$ |
816,982 |
|
|
$ |
685,387 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
Current
Liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses |
|
$ |
532,658 |
|
|
$ |
373,039 |
|
Related
party loan |
|
|
718,925 |
|
|
|
427,451 |
|
Loan
payable |
|
|
20,000 |
|
|
|
20,000 |
|
Convertible notes, net
of unamortized discount and deferred financing fees |
|
|
1,712,935 |
|
|
|
1,613,556 |
|
Current
portion - operating lease obligation |
|
|
93,944 |
|
|
|
33,333 |
|
Total
current liabilities |
|
|
3,078,468 |
|
|
|
2,467,379 |
|
|
|
|
|
|
|
|
|
|
Non-current
Liabilities: |
|
|
|
|
|
|
|
|
Operating
lease obligation, net of current portion |
|
|
14,583 |
|
|
|
22,410 |
|
TOTAL
LIABILITIES |
|
|
3,093,045 |
|
|
|
2,489,789 |
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
DEFICIT |
|
|
|
|
|
|
|
|
Common
stock: authorized 500,000,000;
$0.001 par
value; 58,271,539
and 51,780,838
shares issued and outstanding as of February 28, 2022 and August
31, 2021, respectively |
|
|
58,272 |
|
|
|
51,781 |
|
Additional
Paid in Capital |
|
|
4,016,197 |
|
|
|
1,990,055 |
|
Common
stock issuable |
|
|
100,010 |
|
|
|
- |
|
Accumulated
deficit |
|
|
(6,529,600 |
) |
|
|
(3,913,475 |
) |
Accumulated other
comprehensive income |
|
|
79,058 |
|
|
|
67,237 |
|
Total
Stockholders’ deficit |
|
|
(2,276,064 |
) |
|
|
(1,804,402 |
) |
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
|
$ |
816,982 |
|
|
$ |
685,387 |
|
The
accompanying notes are an integral part of these unaudited
consolidated financial statements.
BOATIM INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited
and Not Reviewed)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
Three
Months Ended |
|
|
For
Six
Months Ended |
|
|
|
February 28, |
|
|
February 28, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Revenue |
|
$ |
- |
|
|
$ |
717 |
|
|
$ |
- |
|
|
$ |
717 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative |
|
|
1,082,427 |
|
|
|
1,330,596 |
|
|
|
2,518,113 |
|
|
|
1,609,124 |
|
Total
Operating Expenses |
|
|
1,082,427 |
|
|
|
1,330,596 |
|
|
|
2,518,113 |
|
|
|
1,609,124 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(1,082,427 |
) |
|
|
(1,329,879 |
) |
|
|
(2,518,113 |
) |
|
|
(1,608,407 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
fair value of derivative liability |
|
|
- |
|
|
|
89,697 |
|
|
|
- |
|
|
|
(191,208 |
) |
Interest
expense |
|
|
(99,233 |
) |
|
|
(260,565 |
) |
|
|
(99,218 |
) |
|
|
(645,948 |
) |
Gain
(Loss) on foreign exchange |
|
|
(2,294 |
) |
|
|
(5,497 |
) |
|
|
1,205 |
|
|
|
- |
|
Total
other income (expense) |
|
|
(101,527 |
) |
|
|
(176,365 |
) |
|
|
(98,013 |
) |
|
|
(837,156 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
before income tax provision |
|
|
(1,183,954 |
) |
|
|
(1,506,244 |
) |
|
|
(2,616,125 |
) |
|
|
(2,445,563 |
) |
Provision
for income tax |
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss |
|
$ |
(1,183,954 |
) |
|
$ |
(1,506,244 |
) |
|
$ |
(2,616,125 |
) |
|
$ |
(2,445,563 |
) |
Other
comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
Foreign
currency translation adjustment |
|
|
11,613 |
|
|
|
39,820 |
|
|
|
11,820 |
|
|
|
24,006 |
|
Total
comprehensive loss |
|
$ |
(1,172,341 |
) |
|
$ |
(1,466,424 |
) |
|
$ |
(2,604,306 |
) |
|
$ |
(2,421,557 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted |
|
$ |
(0.02 |
) |
|
$ |
(0.03 |
) |
|
|
(0.04 |
) |
|
|
(0.05 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted |
|
|
58,271,539 |
|
|
|
51,645,800 |
|
|
|
58,271,539 |
|
|
|
51,645,800 |
|
The
accompanying notes are an integral part of these unaudited
consolidated financial statements.
BOATIM INC.
CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR
THE SIX MONTHS ENDED FEBRUARY 28, 2022 AND February 28,
2021
(Unaudited
and Not Reviewed)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock |
|
|
Common
Stock |
|
|
Additional |
|
|
Common |
|
|
Accumulated
Other
Comprehensive |
|
|
|
|
|
|
|
|
|
Number
of
Shares |
|
|
Par
Value |
|
|
Paid
in
Capital |
|
|
Stock
Issuable |
|
|
Income
(Loss) |
|
|
Accumulated
Deficit |
|
|
Totals |
|
Balance
- August 31, 2021 |
|
|
51,780,838 |
|
|
$ |
51,781 |
|
|
$ |
1,990,055 |
|
|
|
- |
|
|
|
67,237 |
|
|
$ |
(3,913,475 |
) |
|
$ |
(1,804,402 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued for services |
|
|
1,930,556 |
|
|
|
1,931 |
|
|
|
741,195 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
743,125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
based compensation |
|
|
|
|
|
|
|
|
|
|
244,840 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
244,840 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustment |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
208 |
|
|
|
(0 |
) |
|
|
208 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
(1,432,171 |
) |
|
|
(1,432,171 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
- November 30, 2021 |
|
|
53,711,394 |
|
|
$ |
53,711 |
|
|
$ |
2,976,090 |
|
|
|
- |
|
|
|
67,445 |
|
|
$ |
(5,345,646 |
) |
|
$ |
(2,248,399 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
based compensation – stock options |
|
|
- |
|
|
|
- |
|
|
|
48,718 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
48,718 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
based compensation – warrants |
|
|
- |
|
|
|
- |
|
|
|
635,283 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
635,283 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitment
shares issued in connection with convertible debt |
|
|
4,560,145 |
|
|
|
4,560 |
|
|
|
200,830 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
205,390 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beneficial
conversion feature in connection with convertible debt |
|
|
- |
|
|
|
- |
|
|
|
112,968 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
112,968 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants
issued in connection with convertible debt |
|
|
- |
|
|
|
- |
|
|
|
42,308 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
42,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
subscriptions payable |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
100,010 |
|
|
|
- |
|
|
|
|
|
|
|
100,010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustment |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
11,613 |
|
|
|
|
|
|
|
11,613 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,183,954 |
) |
|
|
(1,183,954 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
- February 28, 2022 |
|
|
58,271,539 |
|
|
$ |
58,272 |
|
|
$ |
4,016,197 |
|
|
|
100,010 |
|
|
|
79,058 |
|
|
$ |
(6,529,600 |
) |
|
$ |
(2,276,064 |
) |
|
|
Common
Stock |
|
|
Common
Stock |
|
|
Additional |
|
|
Common |
|
|
Accumulated
Other
Comprehensive |
|
|
|
|
|
|
|
|
|
Number
of
Shares |
|
|
Par
Value |
|
|
Paid
in
Capital |
|
|
Stock
Payable |
|
|
Income
(Loss) |
|
|
Accumulated
Deficit |
|
|
Totals |
|
Balance
- August 31, 2020 |
|
|
50,500,011 |
|
|
$ |
50,500 |
|
|
$ |
(259,635 |
) |
|
|
- |
|
|
|
(20,706 |
) |
|
$ |
(797,306 |
) |
|
$ |
(1,027,147 |
) |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustment |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
(15,814 |
) |
|
|
- |
|
|
|
(15,814 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(939,319 |
) |
|
|
(939,319 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
- November 30, 2020 |
|
|
50,500,011 |
|
|
$ |
50,500 |
|
|
$ |
(259,635 |
) |
|
|
- |
|
|
|
(36,520 |
) |
|
$ |
(1,736,625 |
) |
|
$ |
(1,982,280 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39,820 |
|
|
|
|
|
|
|
39,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
based compensation |
|
|
|
|
|
|
|
|
|
|
704,228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
704,228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion
of notes payable to common stock |
|
|
1,145,789 |
|
|
|
1,146 |
|
|
|
1,058,854 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,060,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Resolution
of derivative liability |
|
|
|
|
|
|
|
|
|
|
532,647 |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
532,647 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
(1,506,244 |
) |
|
|
(1,506,244 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
- February 28, 2021 |
|
|
51,645,800 |
|
|
$ |
50,500 |
|
|
$ |
2,036,094 |
|
|
|
- |
|
|
|
3,300 |
|
|
$ |
(3,242,869 |
) |
|
$ |
(1,151,829 |
) |
The
accompanying notes are an integral part of these unaudited
consolidated financial statements
BOATIM INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited
and Not Reviewed)
|
|
|
|
|
|
|
|
|
|
|
For
the
six months ended
February 28,
|
|
|
|
2022 |
|
|
2021 |
|
OPERATING
ACTIVITIES: |
|
|
|
|
|
|
|
|
Net
loss |
|
$ |
(2,616,125 |
) |
|
$ |
(2,445,563 |
) |
Adjustments to
reconcile net loss to net cash (used in) operating
activities: |
|
|
|
|
|
|
|
|
Shares
issued for services |
|
|
743,125 |
|
|
|
- |
|
Stock-based
compensation |
|
|
928,841 |
|
|
|
704,228 |
|
Change in
fair value of derivative liability |
|
|
- |
|
|
|
191,208 |
|
Depreciation
expense |
|
|
693 |
|
|
|
2,543 |
|
Amortization of debt
discount and deferred financing fees |
|
|
99,379 |
|
|
|
645,948 |
|
Amortization of right
of use assets |
|
|
59,932 |
|
|
|
51,098 |
|
Amortization of
capitalized software costs |
|
|
57,913 |
|
|
|
20,635 |
|
Gain on
foreign exchange |
|
|
(752 |
) |
|
|
- |
|
Change in
operating assets and liabilities, |
|
|
|
|
|
|
|
|
Prepaid
expenses |
|
|
(11,290 |
) |
|
|
(61,801 |
) |
VAT
receivable |
|
|
(11,670 |
) |
|
|
25,949 |
) |
Accounts
payable and accrued expenses |
|
|
162,920 |
|
|
|
61,694 |
|
Operating
lease obligation |
|
|
52,784 |
|
|
|
(68,460 |
) |
NET CASH
USED IN OPERATING ACTIVITIES |
|
|
(533,497 |
) |
|
|
(872,521 |
) |
|
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES: |
|
|
|
|
|
|
|
|
Fixed
asset purchases |
|
|
- |
|
|
|
(12,216 |
) |
Right of
use assets |
|
|
(112,716 |
) |
|
|
- |
|
Software
development costs |
|
|
- |
|
|
|
(207,404 |
) |
NET CASH
USED IN INVESTIING ACTIVITIES |
|
|
(112,716 |
) |
|
|
(219,620 |
) |
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds
from related party loan |
|
|
301,731 |
|
|
|
810,557 |
|
Proceeds
from loan payable |
|
|
- |
|
|
|
20,000 |
|
Proceeds
from stock subscriptions |
|
|
100,010 |
|
|
|
- |
|
Proceeds
from convertible note |
|
|
360,666 |
|
|
|
276,049 |
|
Repayment
of loan |
|
|
- |
|
|
|
(47,962 |
) |
NET CASH
PROVIDED BY FINANCING ACTIVITIES |
|
|
762,407 |
|
|
|
1,058,644 |
|
|
|
|
|
|
|
|
|
|
EFFECT OF
EXCHANGE RATE CHANGES ON CASH |
|
|
822 |
|
|
|
24,006 |
|
|
|
|
|
|
|
|
|
|
NET
INCREASE/(DECREASE) IN CASH |
|
|
117,016 |
|
|
|
(9,491 |
) |
CASH –
BEGINNING OF PERIOD |
|
|
69,827 |
|
|
|
38,427 |
|
CASH – END
OF PERIOD |
|
$ |
186,843 |
|
|
$ |
28,936 |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASHFLOW
INFORMATION: |
|
|
|
|
|
|
|
|
Cash paid
for: |
|
|
|
|
|
|
|
|
Income
tax |
|
$ |
- |
|
|
$ |
- |
|
Interest |
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
NON-CASH
INVESTING AND FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Debt
discount from beneficial conversion feature from convertible
notes |
|
$ |
112,968 |
|
|
|
26,179 |
|
Warrants
from convertible |
|
|
42,308 |
|
|
|
- |
|
Commitment
shares from convertible debt |
|
|
205,390 |
|
|
|
- |
|
Original
issue discount |
|
|
44,168 |
|
|
|
|
|
The
accompanying notes are an integral part of these unaudited
consolidated financial statements.
BOATIM INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
February
28, 2021
(Unaudited
and Not Reviewed)
NOTE
1 – ORGANIZATION
AND NATURE OF BUSINESS
Boatim
Inc.. (“we”, “our, “Boatim”, the “Company”) is a for profit
corporation established under the corporate laws of the State of
Nevada on August 15, 2014. Its fiscal year end is August
31.
Boatim,
Inc. established Boatim Europe S.L. (“Boatim Europe”) as a private
limited company pursuant to the laws of Spain on December 18, 2019,
with the Company having indirect control of one hundred percent of
the issued and outstanding membership interests of Boatim Europe.
Boatim Europe commenced operations in February 2020 and is engaged
in the business of providing software development, marketing, and
selling services for Boatim Inc.
We
acquired and further developed the Boatim software platform which
is an online boat trading marketplace that combines data-driven
technology and our digital marketing capabilities to offer a
rolling subscription for service model of access to the platform
for the extensive market of global boat dealers.
NOTE
2 – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
Principles of
Consolidation
The
Company prepares its consolidated financial statements on the
accrual basis of accounting. The accompanying consolidated
financial statements include the accounts of the Company, and its
wholly owned subsidiary. All intercompany accounts, balances and
transactions have been eliminated in the consolidation as at
February 28, 2022.
Basis of
Presentation
The
accompanying unaudited interim consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for financial information and with the instructions to
Form 10-Q. They do not include all information and footnotes
required by United States generally accepted accounting principles
for complete financial statements. The unaudited interim financial
statements should be read in conjunction with those financial
statements included in the Form 10-K. In the opinion of Management,
all adjustments considered necessary for a fair presentation,
consisting solely of normal recurring adjustments, have been made.
Operating results for the six months ended February 28, 2022 are
not necessarily indicative of the results that may be expected for
the year ending August 31, 2022.
Cash and Cash
Equivalents
The
Company considers all highly liquid investments with an original
maturity of three months or less when purchased to be cash
equivalents.
Fixed
Assets
Fixed
assets are stated at historical cost less accumulated depreciation.
The historical cost of acquiring an item of fixed assets includes
the costs necessarily incurred to bring it to the condition and
location necessary for its intended use. Costs associated with
repairs and maintenance are expensed as incurred. Depreciation is
provided using the straight-line method over the estimated useful
lives of the assets, which are 3
years.
Revenue
Recognition
The
Company recognizes revenue in accordance with ASC 606, Revenue from
Contracts with Customers. ASC 606 creates a five-step model that
requires entities to exercise judgment when considering the terms
of contracts, which includes (1) identifying the contracts or
agreements with a customer, (2) identifying our performance
obligations in the contract or agreement, (3) determining the
transaction price, (4) allocating the transaction price to the
separate performance obligations, and (5) recognizing revenue as
each performance obligation is satisfied. The Company only applies
the five-step model to contracts when it is probable that the
Company will collect the consideration it is entitled to in
exchange for the services it transfers to its clients.
Fair Value of
Financial Instruments
ASC
825, “Disclosures about Fair Value of Financial Instruments”,
requires disclosure of fair value information about financial
instruments. ASC 820, “Fair Value Measurements” defines fair value,
establishes a framework for measuring fair value in generally
accepted accounting principles, and expands disclosures about fair
value measurements. Fair value estimates discussed herein are based
upon certain market assumptions and pertinent information available
to management as of February 28, 2022 and August 31,
2021.
Authoritative
literature provides a fair value hierarchy that requires an entity
to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value. A financial
instrument’s categorization within the fair value hierarchy is
based upon the lowest level of input that is significant to the
fair value measurement as follows:
Level
1 - Quoted market prices available in active markets for identical
assets or liabilities that the Company has the ability to access at
the measurement date.
Level
2 - Inputs include quoted prices for similar assets and liabilities
in active markets, quoted prices for identical or similar assets or
liabilities in markets that are not active, inputs other than
quoted prices that are observable for the asset or liability (e.g.,
interest rates, yield curves, etc.), and inputs that are derived
principally from or corroborated by observable market data by
correlation or other means (market corroborated inputs).
Level
3 - Unobservable inputs that reflect our assumptions about the
assumptions that market participants would use in pricing the asset
or liability.
The
respective carrying values of certain on-balance-sheet financial
instruments approximate their fair values. These financial
instruments include cash, accounts payable, convertible notes and
notes payable. Fair values were assumed to approximate carrying
values for these financial instruments due to their short term
maturities.
Foreign
Currency
Assets
and liabilities of Boatim Europe are translated into U.S. dollars
at the respective rates of exchange prevailing at the end of the
reporting period. Income and expense accounts are translated at
average exchange rates prevailing during the reporting period.
Translation adjustments resulting from this process are recorded
directly in equity as accumulated other comprehensive income (loss)
(“AOCI”) and will be included as income or expense only upon sale
or liquidation of the underlying entity. Boatim Europe considers
its local currency (EURO) as its functional currency.
In
accordance with ASC Topic 830-30, “Translation of Financial
Statements”, monetary asset and liability accounts are translated
into the Company’s reporting currency, the US dollar, using the
closing exchange rate in effect at the balance sheet date,
nonmonetary accounts are translated using historical exchange rates
and income and expense accounts are translated using the average
exchange rate prevailing during the reporting period.
Translation
of amounts from the local currency of Boatim Europe into US$ has
been made at the following exchange rates:
Summary of Foreign Currency Translation |
|
|
|
|
|
|
|
|
|
|
February 28,
2022
|
|
|
August 31,
2021
|
|
Current
EUR: US$ exchange rate |
|
|
1.1197 |
|
|
|
1.1771 |
|
Average
EUR: US$ exchange rate |
|
|
1.1320 |
|
|
|
1.1951 |
|
Capitalized
Software Development Costs
Computer
software development costs related to software developed for
internal use falls under the accounting guidance of ASC Topic
350-40, Intangibles Goodwill and Other–Internal Use Software, in
which computer software costs are expensed as incurred during the
preliminary project stage and capitalization begins in the
application development stage once the capitalization criteria are
met. Costs associated with post implementation activities are
expensed as incurred.
Costs
capitalized during the application development stage include
external direct costs of materials and services consumed in
developing or obtaining internal-use software. During the six
months ended February 28, 2022 and for the fiscal year ended to
August 31, 2021, a total of $0 and $321,562 in software
development costs has been incurred, respectively.
Impairment of
Long-Lived Assets
The
Company’s long-lived assets, including intangibles, are reviewed
for impairment whenever events or changes in circumstances indicate
that the historical-cost carrying value of an asset may no longer
be appropriate. The Company assesses recoverability of the asset by
comparing the undiscounted future net cash flows expected to result
from the asset to its carrying value. If the carrying value exceeds
the undiscounted future net cash flows of the asset, an impairment
loss is measured and recognized. An impairment loss is measured as
the difference between the net book value and the fair value of the
long-lived asset. Long-lived assets were evaluated for impairment
and the Company recorded impairment loss on Capitalized software
development costs of $0 during the six months ended
February 28, 2022 and 2021, respectively.
Leases
As of
September 1, 2019, the Company adopted the provisions of
“Accounting Standards Codification Topic 842 Leases (ASC 842)”
using the modified retrospective basis for all
agreements
The
Company recognizes a right-of-use asset and lease liability for all
financing and operating leases with terms greater than twelve
months. The lease liability is measured based on the present value
of the lease payments not yet paid. The right-of-use asset is
measured based on the initial measurement of the lease liability
adjusted for any direct costs incurred upon commencement of the
lease. The right-of-use assets are amortized on a straight-line
basis over the lease term, and are tested for impairment in a
manner consistent with the other long-lived assets held by the
Company.
Use of
Estimates
The
preparation of the financial statements in conformity with
generally accepted accounting principles 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 financial statements and the
reported amount of revenues and expenses during the reporting
period. Management makes its best estimate of the outcome for these
items based on information available when the financial statements
are prepared. Actual results could differ from those
estimates.
Basic and Diluted
Loss Per Share
The
Company computes earnings (loss) per share in accordance with ASC
260-10-45 “Earnings per Share”, which requires presentation of both
basic and diluted earnings per share on the face of the statement
of operations. Basic earnings (loss) per share is computed by
dividing net earnings (loss) available to common stockholders by
the weighted average number of outstanding common shares during the
period. Diluted earnings (loss) per share gives effect to all
dilutive potential common shares outstanding during the period.
Potentially dilutive common shares consist of common stock issuable
for stock options and warrants (using the treasury stock
method), convertible notes and common stock issuable. These common
stock equivalents may be dilutive in the future. The following
potentially dilutive equity securities outstanding as of February
28, 2022 and August 31, 2021 were not included in the computation
of dilutive loss per common share because the effect would have
been anti-dilutive:
Schedule of anti-dilutive shares |
|
|
|
|
|
|
|
|
|
|
February 28, |
|
|
August 31, |
|
|
|
2022 |
|
|
2021 |
|
Stock
warrants |
|
|
10,796,232 |
|
|
|
- |
|
Convertible
debt |
|
|
12,720,680 |
|
|
|
9,494,188 |
|
Stock
options |
|
|
2,750,000 |
|
|
|
1,750,000 |
|
Total |
|
|
26,266,912 |
|
|
|
11,244,188 |
|
Stock Based
Compensation
The
Company measures the cost of services received in exchange for an
award of equity instruments based on the fair value of the award.
For employees and directors and non-employees (effective September
1, 2019), the fair value of the award is measured on the grant
date. The fair value amount is then recognized over the period
during which services are required to be provided in exchange for
the award, usually the vesting period. Stock-based compensation
expense is recorded by the Company in the same expense
classifications in the consolidated statements of operations, as if
such amounts were paid in cash.
Recent Accounting
Pronouncements
On
December 18, 2019, the FASB issued ASU 2019-12, which modifies ASC
740 to simplify the accounting for income taxes. The ASU’s
amendments are based on changes that were suggested by stakeholders
as part of the FASB’s simplification initiative (i.e., the Board’s
effort to reduce the complexity of accounting standards while
maintaining or enhancing the helpfulness of information provided to
financial statement users. This ASU was adopted by the Company on
September 1, 2021. The Company evaluated and concluded that the
adoption did not have a material impact on the Company’s financial
position, results of operations or cash flows.
In
May 2021, the FASB issued ASU 2021-04 in response EITF consensus.
This ASU addresses how the issuer should account for modifications
or exchanges of Freestanding Equity Classified Written Call
Options. Freestanding written call options (such as warrants) are
sometimes issued to enhance the marketability of a company’s debt
or common stock offering. Some of these warrants are classified as
equity in the issuer’s financial statements but are not accounted
for as either stock compensation or derivatives. US GAAP does not
address how the issuer should account for modifications of these
instruments. The FASB has approved an EITF consensus to fill that
void. Under the new guidance, if the modification does not change
the instrument’s classification as equity, the company that issued
the warrants accounts for the modification as an exchange of the
original instrument for a new instrument. In general, if the fair
value of the ‘new’ instrument is greater than the fair value of the
‘original’ instrument, the excess is recognized based on the
substance of the transaction, as if the issuer had paid cash. The
new rule is effective for fiscal years beginning after December 15,
2021 for both public and private companies. Transition is
prospective. Early adoption is permitted, as discussed further
below. The Company is evaluating whether this will have any impact
of on its consolidated financial statements.
Other
recent accounting pronouncements issued by the FASB, including its
Emerging Issues Task Force, the American Institute of Certified
Public Accountants, and the SEC did not or in management’s opinion
will not have a material impact on the Company’s present or future
consolidated financial statements.
NOTE
3 – GOING
CONCERN
The
accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern. However, the
Company had no revenues for the six months ended
February 28, 2022 and incurred recurring losses. In addition, the
Company had a negative working capital as of February 28, 2022 and
has not completed its efforts to establish a stable source of
revenues sufficient to cover operating costs over an extended
period of time. Therefore, there is substantial doubt about the
Company’s ability to continue as a going concern.
Management
anticipates that the Company will be dependent, for the near
future, on borrowings from related party to fund operating
expenses. In light of management’s efforts, there are no assurances
that the Company will be successful in any of its endeavors or
become financially viable and continue as a going concern. These
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or
amounts and classification of liabilities that might result from
this uncertainty.
NOTE
4 – RELATED PARTY
TRANSACTIONS
During
the fiscal year ended August 31, 2021, Cayo Ventures GmbH (“Cayo”),
a related party, advanced a total of $1,216,420 to the Company.
Cayo is owned by the former majority shareholder and former
officer, Mr. Yves Toelderer. On June 07, 2021 and June 08, 2021,
the Company issued convertible notes in the amount of $696,000 and $441,000 to two unrelated
parties, in exchange for their assumption of related party loans
owed to Cayo for the same amounts. There was no gain or loss on
extinguishment recorded on the old Cayo Venture loan. During the
six months ended February 22, 2022 and 2021, Cayo Ventures advanced
the Company a total of $258,371 and $810,557, respectively. As
of February 22, 2022 and August 31, 2021, the Company owed a total
of $685,822 and 427,451, respectively, to
Cayo, which includes $2,833 owed to Yves Toelderer. These loans are
unsecured, non-interest bearing and due on demand.
On
June 1, 2020, the Company entered into services agreement with Mr.
Wolfgang Tippner, as Chief Executive Officer. The agreement calls
for a sign-on bonus of $24,000, payable within 6 months from
the date of the agreement and a cash compensation for his services
of $8,000 per month. During
the six months ended February 22, 2022 and August 31, 2020, a total
of $0 has been paid to Mr.
Tippner, respectively. As of February 22, 2022 and August 31, 2021,
$120,000 in accrued
compensation remains outstanding.
On
July 1, 2020, the Company entered into a service agreement with Mr.
Patrick Burkert, as Chief Marketing Officer. The agreement calls
for a sign on bonus of 500,000 shares of restricted common stock,
of which 50,000 shares are due within two
weeks of the date of the agreement, 200,000 shares after 6 months,
and the remaining shares after 12 months. He will also
receive a base salary of €144,000 per year. In addition, Mr.
Burkert is eligible to receive a performance bonus equal to
50% of his base salary, based upon
targets set by the board of directors of the Company. None of the
bonus has been earned to date. Mr. Patrick Burkert resigned as
a member of the Board of Directors on February 12, 2021. During the
six months ended February 22, 2022 and 2021, a total of $0 and $38,794, respectively, has been
paid to Mr. Burkert in cash compensation. As of February 22, 2021
and August 31, 2021, $0 in accrued cash
compensation remains outstanding.
On
January 1, 2021, the Company entered into a service agreement with
Mr. Benjamin Salter, as Director and Chief Financial Officer. The
agreement calls for a sign on bonus of options for 500,000 shares of common
stock at a strike price of $0.10 per share. See Note 10. The options must be exercised within
15 months from the date of the agreement and can be executed no
earlier as follows: 50,000 within two weeks of the date of the
agreement, 200,000 shares after 6 months, and the remaining shares
after 12 months. The agreement calls for a base salary of Swiss
francs (CHF) 150,000 per year, increasing to CHF 180,000, payable
in increments of CHF 15,000 per month from April 1, 2021
onward. In addition, Mr. Salter is eligible to receive a
performance bonus equal to 50% of his base salary, based upon
targets set by the board of directors of the Company. During the
six months ended February 22, 2022 a total of $43,992 has been paid to Mr. Salter
in cash compensation. As of February 22, 2022 and August 31, 2021,
$87,889 and $78,679 in accrued cash
compensation remains outstanding, respectively. As of August 31,
2021, there was $0 earned or accrued for a
performance-based bonus. Mr. Salter resigned as a member of the
Board of Directors and as CFO on March 19, 2021 but continues with
the Company heading business development and operations in
Europe.
On
April 1, 2021, the Company entered into an
independent contractor agreement with Mr. Salter, as Head of
Operations. The agreement calls for a monthly payment of CHF 14,000
per month with CHF 8,000 to be paid in cash and the balance of
$6,000 to be deferred on a monthly basis up to an amount not
exceeding CHF 70,000 with payment terms to be decided by the
Company. In addition, Mr. Salter is to receive options for
25,000 shares of common stock each
month at a strike price of $0.10 per share with a term of 15 months. The Company agreed to also
make a cash payment to Mr. Salter on exercise of his options of
$2,500. During the year ended
August 31, 2021, the Company recognized $31,331 of
stock-based compensation expense for the options granted under this
agreement. On January 1, 2022, Mr. Salter resigned as head of
business development and operations in Europe. During the six
months ended February 28, 2022 a total of $26,480 in cash compensation was
paid to Mr. Salter under this agreement, and $23,558 of stock options were
granted.
On
March 19, 2021, the Company entered into a service agreement with
Mr. Mario Beckles, as Director and Chief Financial Officer,
commencing on April 1, 2021. The agreement calls for cash
compensation in the amount of $3,000 per month to be paid
monthly. During the six months ended February 28, 2022 a total of
$18,000 has been paid to Mr.
Beckles in cash compensation. As of February 28, 2022 and August
31, 2021, $4,500 and $4,500 unpaid cash compensation
is outstanding, respectively.
On
June 22, 2021, the Company entered into an employment agreement
with Mr. Joseph Johnson, as a member of the Board of Directors and
as Chief Executive Officer. The agreement provides for a base
salary of $250,000 per year, subject to an
inflationary increase using the US Consumer Price Index. The
agreement also provides for an annual incentive bonus equal to 200%
of his base salary and a sign on bonus of 1,000,000 shares of
unrestricted common stock which will be fully vested with a service
period of six (6) months from the date of the agreement. In addition, Mr. Johnson is eligible
to receive a performance bonus equal to 1,000,000 fully vested
shares of common stock for each net liquid $1,000,000 in equity
raised by the Company during his first six (6) months of tenure as
CEO, up to a maximum of 5,000,000 shares. During the six
months ended February 28, 2022 a total of $114,965 was earned and $10,800 was
paid to Mr. Johnson and $270,000 in stock based
compensation has been earned but not issued to Mr. Johnson to
date. As of February 28, 2022, there was $0 earned or
accrued for the incentive-based bonus. As of February 28, 2022
and August 31, 2021, $104,165 and $20,833 unpaid cash
compensation is outstanding, respectively. As of February 28, 2022,
Mr. Johnson is owed $30,103 in Company related expenses.
This loan has no maturity and is non interest bearing.
NOTE
5 – LEASES
On
February 2016, the FASB issued Accounting Standards Update (ASU)
No. 2016-02, Leases (Topic 842). The ASU introduces a new leasing
model for both lessees and lessors. Topic 842 provides guidance in
how to identify whether a lease arrangement exists. Management has
evaluated its leasing arrangements and has classified these as
operating leases. Additionally, the lease terms of each of our
office leases are short term in nature, however, the Company
elected to apply ASC Topic 842 to these leases, because we intend
to renew each lease for terms longer than 12 months. As a result of
the adoption of ASC Topic 842, the Company recognized a
right-of-use asset and operating lease liabilities based on the
present value of the minimum rental payments.
Operating
Lease Obligations
On
August 1, 2019, the Company entered into an office lease for a six
person office space located at Marina Port Vell Carrer de l’Escar,
26, 08039 Barcelona Spain with OneCoWork. The lease calls for rent
payments of €2,340 plus VAT in
monthly payments. The lease begins August 01, 2019, is month to
month with a six month permanency clause, of which management
intends to renew. On April 30, 2021, the Company terminated this
six person office lease and it was not renewed. As a result of the
early termination of this lease, the Company wrote off $6,842
in remaining operating lease obligation and right of use asset on
April 30, 2021, in accordance with ASC Topic 842.
On
April 20, 2020, the Company entered into an office lease for a
six-person office space located at Marina Port Vell Carrer de
l’Escar, 26, 08039 Barcelona Spain with OneCoWork. The lease calls
for rent payments of €2,550 plus VAT in
monthly payments. The lease begins April 20, 2020 is month to month
with a six month permanency clause, of which management intends to
renew. On April 30, 2021, the Company terminated this six-person
office lease and it was not renewed. As a result of the early
termination of this lease, the Company wrote off $41,859 in
remaining operating lease obligation on April 30, 2021, in
accordance with ASC Topic 842.
On
December 1, 2019, the Company entered into an office lease for a
nine person office space located at Marina Port Vell Carrer de
l’Escar, 26, 08039 Barcelona Spain with OneCoWork. The lease calls
for rent payments of €3,120 plus VAT in
monthly payments. The lease begins December 1, 2019, is month to
month with a six month permanency clause, of which management
intends to renew. On April 30, 2021, the Company ended this nine
person office lease and entered into an 8 person lease contract on
May 1, 2021. As a result of the early termination of this lease,
the Company wrote off $27,318 in
remaining operating lease obligation on April 30, 2021, in
accordance with ASC Topic 842. This new lease calls for rent
payments of €1,800 plus VAT in
monthly payments. In addition, the lease also includes the use of a
flexible work desk for an additional €150 plus VAT. The lease
begins May 1, 2021, is month to month with no permanency clause, of
which management intends to renew for 24 months. Management has
evaluated this new leasing arrangement and has classified this as
an operating lease and has accounted for it as a separate new lease
contract due to the changes that were noted in this lease. The
Company has elected to apply ASC Topic 842 to this lease, because
we intend to renew this lease for a term longer than 12 months. As
a result of the adoption of ASC Topic 842, the Company has
recognized a right-of-use asset of $68,397
and operating lease liability of $68,397 on this lease. On
November 07, 2021, the Company terminated this eight-person office
lease and it was not renewed. As a result of the early termination
of this lease, the Company wrote off $157,820 in
remaining operating lease obligation on December 01, 2021, in
accordance with “ASC Topic 842”.
On
October 06, 2021, the Company entered into an office lease for a
one-person office space located at 100 Bayview Circle, Suite 100,
New Port Beach, CA 92660 with INDUSTRIOUS NPB 100 BAYVIEW CIRCLE
LLC. The lease calls for rent payments of $579 in monthly payments.
The lease begins October 07, 2021 is month to month with a six
month permanency clause, of which management intends to renew after
at least two years.
On
November 17, 2021, the Company entered into an office lease for a
nine-person office space located at Marina Port Vell Carrer de
l’Escar, 20, ES 08039 Barcelona Spain with Monday by Urbania. The
lease calls for rent payments of €3,447 plus VAT in
monthly payments. The lease begins December 01, 2021 is month to
month with a six month permanency clause, of which management
intends to renew after at least two years.
The
Company has recorded operating lease expense in the amount of
$13,748 and $29,307 during the six months
ended February 28, 2022 and February 29, 2021, respectively As of
February 28, 2022, the Company had $124,510
($55,743, August
31, 2021) in Right of Use Asset and $124,510 (55,743, August 31, 2021)
Operating lease liability. As of February 28, 2022, the discount
rate for these leases is 2.23% and the weighted average
remaining term is 21
months.
Future
minimum operating lease payments at February 22, 2022 consist
of:
Summary of future minimum operating lease
payments |
|
|
|
|
2022 |
|
$ |
31,485 |
|
2023 |
|
|
63,549 |
|
2024 |
|
|
14,583 |
|
Total
minimum lease payments |
|
|
109,617 |
|
Less:
present value discount |
|
|
(1,089 |
) |
Present
value of minimum lease payments |
|
|
108,527 |
|
Current
portion of operating lease obligation |
|
|
93,944 |
|
Operating
Lease obligation, less current portion |
|
$ |
14,583 |
|
NOTE
6 – LOAN
PAYABLE
On
February 11, 2021, the Company received a short-term loan from an
unrelated third party in the amount of $20,000. The loan is
unsecured, has no maturity date and is non-interest bearing. On
August 28, 2020, this loan was assigned to an unrelated third party
for the full amount of the loan. The loan is also unsecured, has
not maturity and is non-interest. As of February 28, 2022 and
August 31, 2021, $20,000 remains
outstanding.
NOTE
7 – CONVERTIBLE
NOTES
On
July 21, 2020, the Company issued convertible notes in the amount
of $500,000 and
$560,000 to two
unrelated parties, in exchange for their assumption of the December
8, 2018 note and related party loans owed to Cayo for the same
amounts. (See Note 4). The notes do not bear interest and matured
on January 22, 2021. The first note in the amount
of $500,000 is convertible into common shares at the rate
equivalent to 70% of the Company’s 30-day average stock price prior
to conversion. The second note in the amount
of $560,000 is convertible into common stock at the rate equivalent
to 80% of the Company’s 30-day average stock price prior to
conversion.
On
September 22, 2020, the Board approved the issuance of up to
$5,000,000 in new
convertible notes, in multiple tranches, convertible at maturity
into common shares. During the second, third and fourth fiscal
quarters ended August 31, 2021 the Company has received tranches of
$62,500, $45,000, $60,000, $110,000, $130,000, $83,000 and $48,100,
respectively from unrelated parties under this facility. The note
in the amount of $62,500 matures on
March 31, 2021 and is convertible into
common stock at the rate equivalent to 80% of the Company’s 30-day
average stock price prior to conversion. The note in the amount of
$45,000 matures on
June 22, 2021, the note in the amount
of $60,000 matures on
July 22, 2021, the note in the amount
of $110,000 matures on
August 22, 2021, the note in the
amount of $130,000 matures on
September 22, 2021, the note in the amount of $48,100 matures on
October 1, 2021 and the note in the
amount of $83,000 matures on
October 1, 2021; these notes are
convertible into common stock at the rate equivalent to 80% of the
Company’s 30-day average stock price prior to conversion but no
less than $0.10 value per share of
common stock.
Due
to these provisions, the embedded conversion option of the notes
issued under the September 22, 2020 issuances do not qualify for
derivative accounting under ASC 815-15, Derivatives and
Hedging.
On
January 10, 2021 the holder of the note in the amount of $500,000 converted
$500,000 of its note into
578,681 shares of
common stock and the unamortized discount at the date of conversion
of $27,838 was written off to
interest expense.
On
January 10, 2021 the holder of the note in the amount of $560,000 converted
$560,000 of its note into
567,108 shares of
common stock and the unamortized discount at the date of conversion
of $22,439 was written off to
interest expense.
On
April 23, 2021 the holder of the note in the amount of $62,500 converted
$62,500 of its note into
135,038 shares of
common stock.
On
June 7, 2021 and June 8, 2021, the Company issued convertible notes
in the amount of $696,000 and $441,000 to two unrelated
parties, in exchange for their assumption of related party loans
owed to Cayo for the same amounts. These notes are convertible into
common stock at the rate equivalent to 80% of the Company’s 30-day
average stock price prior to conversion but no less than $0.10 value per share of
common stock. Due to these provisions, the embedded conversion
option does not qualify for derivative accounting under ASC 815-15,
Derivatives and Hedging.
On
January 4, 2022, the Company received $217,500 in exchange for a December
20, 2021 secured convertible note in the amount of $275,000 from an unrelated
third party, This note, was issued with a $27,500 original issue
discount, a $27,500 one time interest
charge and a $2,500 charge for legal fees. The note
matures 12 months after the issuance date and bears a 10% interest rate. The note is
convertible at any time at a fixed price of $0.13 or the finalized price in a Reg
A offering and in the event of default notice a conversion
price of $0.01 per share. Due to these
provisions, this convertible notes not qualify for derivative
accounting under ASC 815-15, Derivatives and Hedging. In addition
the Company issued to the note holder 2,750,000 common
stock as commitment shares as well as 1,100,000 warrants shares to purchase
common stock at a exercise price of $0.25 per share. The Company
also recorded a discount totaling $217,500 consisting of the fair value of the
warrants($24,919), the commitment
shares($123,802) and a beneficial
conversion feature($68,779).
On
January 7, 2022, the Company received $143,166 in exchange for a December
22, 2021 secured convertible note in the amount of $166,666 from an unrelated
third party, This note, was issued with a $16,666 original issue
discount, $3,333 one commission charge and a $3,500 charge for legal fees. The note
matures eight months from the date of issuance and bears a
5% interest rate. The note is
convertible at any time at a fixed price of $0.15 or the finalized price in a Reg
A offering and in the event of default notice a conversion price of
$0.01 per share. Due to these
provisions, the embedded conversion option does not qualify for
derivative accounting under ASC 815-15, Derivatives and Hedging. In
addition the Company issued to the note holder 1,810,145
common stock as commitment shares as well as 724,058 warrants
shares to purchase common stock at a exercise price of $0.25 per share. The Company
also recorded a discount totaling $143,166 consisting of the fair value of the
warrants($24,919), the commitment
shares($123,802) and a beneficial
conversion feature($44,188).
A
summary of value changes to the notes for the six months ended
February 28, 2022 is as follows:
Summary of convertible notes |
|
|
|
|
Carrying
value of Convertible Notes at August 31, 2021 |
|
$ |
1,613,556 |
|
New
principal |
|
|
441,666 |
|
Total
principal |
|
|
2,055,222 |
|
Less:
conversion of principal |
|
|
- |
|
Less:
discount related to fair value of the beneficial conversion
feature |
|
|
360,666 |
|
Less:
discount related to original issue discount |
|
|
44,167 |
|
Less:
deferred financing fees |
|
|
|
|
Add:
amortization of discount and deferred financing fees |
|
|
99,379 |
|
Carrying
value of Convertible Notes at February 28, 2022 |
|
$ |
1,712,935 |
|
As of
February 28, 2022, the was a total unamortized discount
remaining in the amount of $281,672 with a remaining life
of 470 days or 16 months. As of February 28, 2022, the if converted
price on each convertible note was $0.13 to $0.17 and the if converted number of
shares totaled 26,266,912 common
shares.
Warrants
One
January 20, 2022, The Company entered in common stock purchase
warrant agreement with an unrelated party to purchase up to
1,750,000 warrant shares with an
exercise price of $0.001 per share and valued at
$317,641. These
warrants may also be exercised, in whole or in part, at such time
by means of a cashless exercise in which the holder shall be
entitled to receive a number of warrant shares equal to the VWAP on
the trading day immediately preceding the date of the applicable
Notice of exercise and the exercise price of this warrant and the
number of warrant shares that would be exercised by means of cash.
The warrants expire January 20, 2023.
One
January 20, 2022, The Company entered in common stock purchase
warrant agreement with an unrelated party to purchase up to
1,750,000 warrant shares with an exercise price of $0.001 per share
and valued at $317,641. These warrants may also be exercised, in
whole or in part, at such time by means of a cashless exercise in
which the holder shall be entitled to receive a number of warrant
shares equal to the VWAP on the trading day immediately preceding
the date of the applicable Notice of exercise and the exercise
price of this warrant and the number of warrant shares that would
be exercised by means of cash. The warrants expire January 20,
2023.
As of
February 28, 2022, the if converted number of common shares of
these warrants totaled 2,750,000 shares of
common stock.
NOTE
8 – COMMON
STOCK
On
October 26, 2021, the Company issued 875,000 common
shares to an unrelated third party vendor for marketing services
valued at $0.415 per share for a total
$363,126.
On
November 12, 2021, the Company issued 1,055,556 common
shares to an unrelated third party vendor for marketing services
valued at $0.36 per share for a total
$380,000.
On
January 4, 2022, the Company received $217,500 in exchange for a December
20, 2021 secured convertible note in the amount of $275,000 from an unrelated
third party, As part of the note agreement, the Company is required
to issue to the note holder 2,750,000 common
stock as commitment shares.
On
January 7, 2022, the Company received $143,166 in exchange for a December
22, 2021 secured convertible note in the amount of $166,666 from an unrelated
third party, As part of the note agreement, the Company is
required to issue to the note holder 1,810,145 common
stock as commitment shares as well as 724,058 warrants shares to purchase
common stock at a exercise price of $0.25 per share.
On
February 15, 2022, the Company filed a Reg 1A offering statement
with the Securities and Exchange Commission (SEC) offering up to
41,666,667 of common
stock to investors at an overing price of $0.12 per share. During the period
ending February 28, 2022, the company received a total of $100,010
in common stock subscriptions for the aforementioned common
stock.
As of
February 28, 2022, and August 31, 2020, a total of 58,271,539
and 51,780,838
shares of common stock were issued and outstanding,
respectively.
NOTE
9 – SHARE-BASED
COMPENSATION
Stock
Options
During
the six months ended February 28, 2022, the Company granted options
for the purchase of the Company’s common stock to certain employees
and consultants as consideration for services rendered. The terms
of the stock option grants are determined by the Company’s Board of
Directors. The Company’s stock options generally vest upon the
one-year anniversary date of the grant and have a maximum term of
fifteen months.
The
following summarizes the stock option activity for the six months
ended February 28, 2022:
Summary of Stock option activity |
|
|
|
|
|
|
|
|
|
|
|
|
Options
Outstanding
|
|
|
Weighted-Average
Exercise
Price
|
|
Balance
as of August 31, 2021 |
|
|
|
175,000 |
|
|
$ |
0.10 |
|
Grants |
|
|
|
100,000 |
|
|
|
0.10 |
|
Exercised |
|
|
|
- |
|
|
|
- |
|
Forfeited |
|
|
|
- |
|
|
|
- |
|
Balance
as of February 28, 2022 |
|
|
|
275,000 |
|
|
$ |
0.10 |
|
The
total share-based compensation expense in connection with issuance
of stock options recognized during the six months ended February
28, 2022 was $23,558.
The fair value of each stock option is estimated on the date of
grant using the Black-Scholes-Merton option pricing model with the
following weighted average assumptions for stock options granted
during the six months ended February 28,
2022:
Summary of weighted average assumptions |
|
|
|
|
Expected term (years) |
|
|
1.25 years |
|
Expected stock price volatility |
|
|
110-195 |
% |
Weighted-average risk-free rate |
|
|
0.10-0.20 |
% |
Expected dividend |
|
|
- |
|
Volatility
is a measure of the amount by which a financial variable such as
share price has fluctuated (historical volatility) or is expected
to fluctuate (expected volatility) during a period. The Company
estimates expected volatility giving primary consideration to the
historical volatility of its common stock. The risk-free interest
rate is based on the published yield available on U.S. Treasury
issues with an equivalent term remaining equal to the expected life
of the stock option. The expected lives of the stock options
represent the estimated period of time until exercise or forfeiture
and are based on the simplified method of using the mid-point
between the vesting term and the original contractual
term.
The
following summarizes certain information about stock options vested
and expected to vest as of February 28, 2022:
Summary of stock option vested |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
of
Options
|
|
|
Weighted-Average
Remaining
Contractual
Life
(in
Years)
|
|
|
Weighted-Average
Exercise
Price
|
|
Outstanding |
|
|
275,000 |
|
|
|
0.09 |
|
|
$ |
0.10 |
|
Exercisable |
|
|
275,000 |
|
|
|
0.09 |
|
|
$ |
0.10 |
|
Expected
to vest |
|
|
0 |
|
|
|
0.09 |
|
|
$ |
0.10 |
|
Restricted
Stock Awards
The
following summarizes the restricted stock activity for the six
months ended February 28, 2022:
Summary of restricted stock activity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average |
|
|
|
|
Shares |
|
|
Exercise
Price |
|
Balance
as of August 31, 2021 |
|
|
|
450,000 |
|
|
$ |
1.25 |
|
Shares
of restricted stock granted |
|
|
|
- |
|
|
|
- |
|
Exercised |
|
|
|
- |
|
|
|
- |
|
Cancelled |
|
|
|
- |
|
|
|
1.25 |
|
Balance
as of February 28, 2022 |
|
|
|
450,000 |
|
|
$ |
1.25 |
|
Schedule of restricted stock
awards |
|
|
|
|
|
|
|
|
|
|
February 28, |
|
|
August 31, |
|
Number
of Restricted Stock Awards |
|
2022 |
|
|
2021 |
|
Vested |
|
|
450,000 |
|
|
|
450,000 |
|
Non-vested |
|
|
- |
|
|
|
- |
|
|
|
|
450,000 |
|
|
|
450,000 |
|
As of
February 28, 2022 and August 31, 2021, there was unrecognized
compensation cost of $0, related to
non-vested share-based compensation, respectively, which is
expected to be recognized over the next year. In addition, none of
the restricted share awards presented above has been issued or
outstanding as of February 28, 2022.
Warrants
One
January 20, 2022, The Company entered into two separate common
stock purchase warrant agreement with an two unrelated third
parties to purchase up to 1,750,000 warrant shares each with an
exercise price of $0.001 per share. The warrants totaling
3,500,000 shares were
valued at $635,282. These
warrants may also be exercised, in whole or in part, at such time
by means of a cashless exercise in which the holder shall be
entitled to receive a number of warrant shares equal to the VWAP on
the trading day immediately preceding the date of the applicable
Notice of exercise and the exercise price of this warrant and the
number of warrant shares that would be exercised by means of cash.
The warrants expire January 20, 2023.
NOTE
10 – SUBSEQUENT
EVENTS
On
March 23, 2022, a third party investor exercise their warrants and
the company received $1,750 in exchange for
1,750,000 shares of
common stock. On March 29, 2022, a third party investor exercise
their warrants and the company received $1,740 in exchange for
1,750,000 shares of
common stock. During the period March 01, 2022 thru April 28, 2022,
the company issued a total of 1,250,083 shares of
common stock also received a total of $50,000 in cash
from common stock subscriptions.
On
March 21, 2022, the Company entered into an employment agreement
with Ms. Taylor Gripentrog, as an Assistant Director of Brand
Development. The agreement provides for a base salary of $34,000 per year and an annual incentive
bonus equal to 30% of the base salary. Ms. Gripentrog was also
entitled to a signing of $2,000. In accordance with the terms of
the employment agreement, Ms. Gripentrog is to receive 22 days paid
vacation as well as $69 per day for
expenses.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Forward
looking statement notice
Statements
made in this Form 10-Q that are not historical or current facts are
“forward-looking statements” made pursuant to the safe harbor
provisions of Section 27A of the Securities Act of 1933 (the “Act”)
and Section 21E of the Securities Exchange Act of 1934. These
statements often can be identified by the use of terms such as
“may,” “will,” “expect,” “believe,” “anticipate,” “estimate,”
“approximate” or “continue,” or the negative thereof. We intend
that such forward-looking statements be subject to the safe harbors
for such statements. We wish to caution readers not to place undue
reliance on any such forward-looking statements, which speak only
as of the date made. Any forward-looking statements represent
management’s best judgment as to what may occur in the future.
However, forward-looking statements are subject to risks,
uncertainties and important factors beyond our control that could
cause actual results and events to differ materially from
historical results of operations and events and those presently
anticipated or projected. We disclaim any obligation subsequently
to revise any forward-looking statements to reflect events or
circumstances after the date of such statement or to reflect the
occurrence of anticipated or unanticipated events.
Financial
information contained in this quarterly report and in our unaudited
interim financial statements is stated in United States dollars and
are prepared in accordance with United States generally accepted
accounting principles.
General
Boatim
Inc.. (“we”, “our, “Boatim”, the “Company”) is a for profit
corporation established under the corporate laws of the State of
Nevada on August 15, 2014. Its fiscal year end is August
31.
Boatim,
Inc. established Boatim Europe S.L. (“Boatim Europe”) as a private
limited company pursuant to the laws of Spain on December 18, 2019,
with the Company having indirect control of one hundred percent of
the issued and outstanding membership interests of Boatim Europe.
Boatim Europe commenced operations in February 2020 and is engaged
in the business of providing software development, marketing, and
selling services for Boatim Inc.
All
membership interests of Boatim Europe are currently held in trust
by the Company´s CEO for practical reasons and only until the
formal transfer into the name of Company has been completed
according to the requirements of applicable Spanish law. In
December 2020, the Company finalized the process of collecting and
submitting all required paperwork to the Spanish authorities to
enter Boatim Inc. as direct owner on public records in Spain,
making Boatim Europe a wholly owned subsidiary of the
Company.
Originally
in the business of producing and distributing furniture, the
business was changed to online food blogging as a promotion channel
for restaurants, bars and fine dining. Subsequently, following the
acquisition of the Boatim software platform, the Company expanded
into the boating industry by further developing the software
platform. The Boatim software platform is an online boat trading
marketplace, combining data-driven technology and our digital
marketing capabilities to offer a rolling subscription for service
model of access to the platform for the extensive market of global
boat dealers.
Results
of operations
The
following comparative analysis on results of operations was based
primarily on the comparative financial statements, footnotes and
related information for the periods identified below and should be
read in conjunction with the financial statements and the notes to
those statements that are included elsewhere in this
report.
Results of Operations for the Three Months Ended February 28, 2022
and February 28, 2021
Operating expenses
Operating
expenses comprised of general and administrative expenses were
$1,082,427 for the three months ended February 28, 2022, compared
to $1,330,596 for the three months ended February 28, 2021, a
decrease of $248,169. The decrease is due to a reduction in selling
and marketing staff in the European office because of
restructuring.
Net Loss
Net
loss for the three months ended February 28, 2022 was $1,206,180
compared to $1,506,244 for the three months ended February 28,
2021, an decrease of $300,064. As well as the reasons discussed
above, Other income (expenses) comprised interest expense of
$99,233, a loss on foreign exchange of $2,294.
Results of Operations for the Six Months Ended February 28, 2022
and February 28, 2021
Operating expenses
Operating
expenses comprised of general and administrative expenses were
$2,518,113 for the six months ended February 28, 2022, compared to
$1,609,124 general and administrative expense for the six months
ended February 28, 2021, an increase of $908,989 in general and
administrative expenses. The increase is due primarily to stock
based compensation associated with our convertible notes totaling
$883,841.
Net Loss
Net
loss for the six months ended February 28, 2022 was $2,638,351
compared to $2,445,563 for the six months ended February 28, 2021.
As well as the reasons discussed above, Other income (expenses)
comprised interest expense of 99,218 and a gain of
$1,205.
Liquidity
and capital resources
At
February 28, 2022, we had $186,843 in cash and there were
outstanding liabilities of $3,115,271 (cash of $69,827 and
liabilities of $2,489,789 on August 31, 2021, respectively). The
stockholders’ deficit was $2,298,290 as of February 28, 2022 and
$1,804,402 as of August 31, 2021.
There
was $501,137 cash used by operations in the six months ended
February 28, 2022 ($875,064 net cash used in operating activities
during the six months ended February 28, 2021), $112,716 used in
cash for investing activities for the six months ended February 28,
2022 ($217,077 used in cash for investing activities during the six
month period ended February 28, 2021) and $719,047 cash
provided through financing activities during the six months ended
February 28, 2022 ($1,058,643 up to February 28, 2021). This
resulted in $117,015 changes in net cash during the six months
ended February 28, 2022 and $33,498 change in net cash during the
six months ended February 28, 2021, respectively.
Cayo
Ventures GmbH has verbally agreed to continue to loan the company
funds for operating expenses in a limited scenario, but it has no
legal obligation to do so.
There
is limited historical financial information about us upon which to
base an evaluation of our performance. We have meaningfully
commenced business operations based upon the amount of revenue we
have been able to generate. We are in start-up stage of operations.
We cannot guarantee we will be successful in our business
operations. Our business is subject to risks inherent in the
establishment of a new business enterprise, including limited
capital resources and possible cost overruns due to price and cost
increases in services and products.
We
have no assurance that future financing will be available to us on
acceptable terms. If financing is not available on satisfactory
terms, we may be unable to continue, develop or expand our
operations. Equity financing could result in additional dilution to
existing shareholders.
Off-balance
sheet arrangements
We
have no 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.
ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
This item is
not applicable as we are currently considered a smaller reporting
company.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our
CEO and CFO, have evaluated the effectiveness of our disclosure
controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
under the Exchange Act) as of the end of the period covered by this
document. Based on the evaluation, they have concluded that our
disclosure controls and procedures are not effective in timely
alerting them to material information relating to us that is
required to be included in our periodic SEC filings and ensuring
that information required to be disclosed by us in the reports we
file or submit under the Act is accumulated and communicated to our
management, including our chief financial officer, or person
performing similar functions, as appropriate to allow timely
decisions regarding required disclosure. Our disclosure controls
and procedures were not effective as of February 28, 2022 due to
the material weaknesses as disclosed in the Company’s Annual Report
on Form 10-K filed with the SEC.
Limitations of the Effectiveness of Disclosure Controls and
Internal Controls
Our
management, including our Principal Executive Officer and Principal
Financial Officer, does not expect that our disclosure controls and
internal controls will prevent all error and all fraud. A control
system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the
control system are met. Further, the design of a control system
must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs.
Because of inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within the Company
have been detected. These inherent limitations include the
realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of a simple error or mistake.
Additionally, controls can be circumvented by the individual acts
of some persons, by collusion of two or more people, or by
management override of the control.
The
design of any system of controls is also based in part upon certain
assumptions about the likelihood of future events, and there can be
no assurance that any design will succeed in achieving our stated
goals under all potential future conditions; over time, a control
may become inadequate because of changes in conditions, or the
degree of compliance with the policies or procedures may
deteriorate. Because of inherent limitations in a cost-effective
control system, misstatements due to error or fraud may occur and
not be detected.
Changes in Internal Control over Financial
Reporting
There
have been no changes in our internal control over financial
reporting subsequent to February 28, 2022, which were identified in
connection with our management’s evaluation required by paragraph
(d) of rules 13a-15 and 15d-15 under the Exchange Act, that have
materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We
know of no material, existing or pending legal proceedings against
our Company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which
any of our directors, officers or affiliates, or any registered or
beneficial shareholder, is an adverse party or has a material
interest adverse to our interest.
ITEM 1A. RISK FACTORS
We
are a smaller reporting company as defined by Rule 12b-2 of the
Exchange Act and are not required to provide the information
required under this item.
THE
EFFECTS OF THE RECENT COVID-19 CORONAVIRUS PANDEMIC ARE NOT
IMMEDIATELY KNOWN, BUT MAY ADVERSELY AFFECT OUR BUSINESS, RESULTS
OF OPERATIONS, FINANCIAL CONDITION, LIQUIDITY, AND CASH
FLOW.
Presently,
the impact of COVID-19 has not shown any imminent adverse effects
on our business. This notwithstanding, it is still unknown and
difficult to predict what adverse effects, if any, COVID-19 can
have on our business, or against the various aspects of same, or
how COVID-19 will continue to effect the world as the virus case
numbers rise and fall.
As of
the date of this Annual Report, COVID-19 coronavirus has been
declared a pandemic by the World Health Organization, has been
declared a National Emergency by the United States Government.
COVID-19 coronavirus caused significant volatility in global
markets. The spread of COVID-19 coronavirus has caused public
health officials to recommend precautions to mitigate the spread of
the virus, especially as to travel and congregating in large
numbers. In addition, certain countries, states and municipalities
have enacted, quarantining and “shelter-in-place” regulations which
severely limit the ability of people to move and travel and require
non-essential businesses and organizations to close. While some
places have lessened their “shelter-in-place” restrictions and
travel bans, as they are removed there is no certainty that an
outbreak will not occur and additional restrictions imposed again
in response.
It is
unclear how such restrictions, which will contribute to a general
slowdown in the global economy, will affect our business, results
of operations, financial condition and our future strategic plans.
Shelter-in-place and essential-only travel regulations could
negatively impact us. The current status of COVID-19 coronavirus
closures and restrictions could negatively impact our ability to
receive funding from our existing capital sources as each business
is and has been affected uniquely.
If
any of our employees, consultant, customers, or visitors were to
become infected we could be forced to close our operations
temporarily as a preventative measure to prevent the risk of spread
which could also negatively impact our ability to receive funding
from our existing capital sources as each business is and has been
affected uniquely
In
addition, our headquarters are located in Miami, Florida which
experienced restrictions on individuals and business shutdowns as
the result of COVID-19. These COVID-19 closures did not have an
effect on our operations.
GENERAL
SECURITIES MARKET UNCERTAINTIES RESULTING FROM THE COVID-19
PANDEMIC.
Since
the outset of the pandemic the United States and worldwide national
securities markets have undergone unprecedented stress due to the
uncertainties of the pandemic and the resulting reactions and
outcomes of government, business and the general population. These
uncertainties have resulted in declines in all market sectors,
increases in volumes due to flight to safety and governmental
actions to support the markets. As a result, until the pandemic has
stabilized, the markets may not be available to the Company for
purposes of raising required capital. Should we not be able to
obtain financing when required, in the amounts necessary to execute
on our plans in full, or on terms which are economically feasible
we may be unable to sustain the necessary capital to pursue our
strategic plan and may have to reduce the planned future growth
and/or scope of our operations.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES
HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS
The
following exhibits are included as part of this report by
reference:
01.INS* |
|
XBRL
Instance Document |
|
Filed
herewith. |
101.SCH* |
|
XBRL
Taxonomy Extension Schema Document |
|
Filed
herewith. |
101.CAL* |
|
XBRL
Taxonomy Extension Calculation Linkbase Document |
|
Filed
herewith. |
101.LAB* |
|
XBRL
Taxonomy Extension Labels Linkbase Document |
|
Filed
herewith. |
101.PRE* |
|
XBRL
Taxonomy Extension Presentation Linkbase Document |
|
Filed
herewith. |
101.DEF* |
|
XBRL
Taxonomy Extension Definition Linkbase Document |
|
Filed
herewith. |
|
* |
Pursuant to Regulation S-T, this interactive data file is
deemed not filed or part of a registration statement or prospectus
for purposes of Sections 11 or 12 of the Securities Act of 1933, is
deemed not filed for purposes of Section 18 of the Securities
Exchange Act of 1934, and otherwise is not subject to liability
under these sections. |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
|
Boatim
Inc. |
|
|
|
Date:
May 5, 2022 |
By: |
/s/
Joseph Johnson |
|
|
Joseph
Johnson |
|
|
Chief
Executive Officer(Principal Executive Officer) |
Date:
May 5, 2022 |
By: |
/s/
Mario Beckles |
|
|
Mario
Beckles |
|
|
Chief
Financial Officer(Principal Financial and Principal Accounting
Officer) |
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