BALANCE LABS, INC. The following discussion and analysis of the condensed consolidated results of
operations and financial condition of
Overview
We were incorporated on
The Company is not a registered investment company under the Investment Company Act of 1940, as amended (the "1940 Act") and does not engage primarily, in the business of investing, reinvesting, or trading in securities. The Company is not managed like an active investment vehicle, is not an investment company registered under the 1940 Act and is not required to register under the 1940 Act.
Additionally, in accordance with the 1940 Act, Section 3(c)(1), the Company is not an Investment Company as defined by the 1940 Act because the Company does not have outstanding securities beneficially owned by more than one hundred persons and, at this time, the Company is not making and does not presently propose to make a public offering of its securities. Additionally, the Company has not and has no plans to purchase or acquire any securities issued by any registered investment company.
Our business focuses on providing advisement services to entrepreneurs and assisting business owners so that their ideas can be fully developed and implemented. Due to limited resources, lack of experienced management and competing priorities, start-up and developmental stage companies are not operating as efficiently as they can be, and therefore would benefit from an outside party that could assist in developing and executing certain strategies. We utilize our knowledge in developing businesses, share practical experiences with our clients and introduce the business owners to experienced professionals who could help these inexperienced entrepreneurs further implement their ideas. Start-ups and development stage businesses across all industries commonly experience these certain "growing pains".
21 Plan of Operations
Our plan is to prepare our clients for the many inevitable challenges they will encounter and to develop a customized plan for them to overcome these obstacles, so that they can focus on marketing their product(s) and/or service(s) to their potential customers.
Although we've only worked with three clients since inception, our goal is to add and service a minimum of two to three new clients between now and the end of 2022. We're marketing our services through both personal contact and online by (a) mining our existing network of professional contacts via personal outreach programs, which will also target international prospects that may wish to enter the US market; (b) expanding our network by attending targeted conferences and professional gatherings; and (c) utilizing our website at www.balancelabs.co, plus engaging potential clients on social media, including LinkedIn, Facebook and Twitter. However, because we have a limited budget allocated for an on-line marketing campaign, we anticipate that professionals within our professional network and personal referrals from companies that are satisfied with our professional services are likely to be our most significant and efficient near-term form of marketing.
We believe that we can support our clients with our existing full-time staff, supplemented with part-time sub-contracted professionals and service providers, as necessary. Between now and the end of 2022, we intend to formalize our relationships with these subcontractors so that we can offer our clients turn-key business development products and services.
The Company incorporated or formed nine subsidiaries since 2016,
In
22
Our primary requirement for funding is for working capital in order to accommodate temporary negative cash flows from operations (see "Liquidity and Capital Resources").
Results of Operations
Nine Months Ended
Overview
We reported a net loss of
Revenues
For the nine months ended
General and Administrative Expenses
General and administrative expenses were
General and administrative expenses - related party
General and administrative expenses were
Professional Fees
Professional fees were
Other Income and Expense
Other expense for the nine months ended
Unrealized gain or loss on available for sale securities
Unrealized loss on available for sale securities for the nine months ended
Net Loss allocated from Equity Method Investee
Net Loss allocated from Equity Method Investee for the nine months ended
23
Three Months Ended
Overview
We reported a net loss of
Revenues -Related Party
For the three months ended
General and Administrative Expenses
General and administrative expenses were
General and administrative expenses - related party
General and administrative expenses were
Professional Fees
Professional fees were
Other Income and Expense
Other expenses for the three months ended
24
Unrealized gain or loss on available for sale securities
Unrealized loss on available for sale securities for the three months ended
Net Loss allocated from Equity Method Investee
Net Loss allocated from Equity Method Investee for the three months ended
Liquidity and Capital Resources
We measure our liquidity in a number of ways, including the following:
September 30, December 31,
2022 2021
(Unaudited)
Cash $ 269,740 $ 227,558
Working capital (deficiency)
Availability of Additional Funds
Except for the monthly consulting fee to our CEO and Chairman of the Board and the monthly lease of our virtual office, as described elsewhere in this annual report, we currently do not have any material commitments for capital expenditures. We are actively pursuing new client relationships. Even if we were to add a new client(s), due to our current lack of a diversified client base, there could be temporary imbalances between cash receipts and cash operating expenditures, which means that we may need additional capital. The engagement revenues associated with most client engagements will self-fund the in-house and sub-contractor services we need in order to supply products and services to our clients.
As of
We experienced positive cash flows from operating activities for the nine months
ended
25
Net cash used in investing activities during the nine months ended
Net Cash Provided by Financing Activities
Net cash provided by financing activities during the nine months ended
Our Auditors Have Issued a Going Concern Opinion
The Company's independent registered public accounting firm has expressed
substantial doubt as to the Company's ability to continue as a going concern as
of
Furthermore, COVID-19 has also caused severe disruptions in transportation and limited access to the Company's facilities resulting in limited support from its staff and professional advisors. This in turn has limited the Company's resources in promoting its services and acquiring additional capital.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Critical Accounting Policies and Estimates
Use of Estimates
The preparation of the financial statements in conformity with accounting
principles generally accepted in
26 Revenue Recognition
The Company accounts for revenues under FASB ASC 606, which is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company considers revenue realized or realizable and earned when all the five following criteria are met: (1) Identify the Contract with a Customer, (2) Identify the Performance Obligations in the Contract, (3) Determine the Transaction Price, (4) Allocate the Transaction Price to the Performance Obligations in the Contract, and (5) Recognize Revenue When (or As) the Entity Satisfies a Performance Obligation.
Fair Value of Financial Instruments
The Company measures its financial assets and liabilities in accordance with GAAP. For certain of our financial instruments, including cash, accounts payable, and the short-term portion of long-term debt, the carrying amounts approximate fair value due to their short maturities.
We adopted accounting guidance for financial and non-financial assets and liabilities (ASC 820). This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
? Level 1: Observable inputs such as quoted prices (unadjusted) in active markets
for identical assets or liabilities.
? Level 2: Inputs other than quoted prices that are observable, either directly
or indirectly. These include quoted prices for similar assets or liabilities in
active markets and quoted prices for identical or similar assets or liabilities
in markets that are not active.
? Level 3: Unobservable inputs in which little or no market data exists,
therefore developed using estimates and assumptions developed by us, which
reflect those that a market participant would use.
Recent Accounting Standards
We have implemented all new accounting standards that are in effect and may impact our consolidated financial statements and do not believe that there are any other new accounting standards that have been issued that might have a material impact on our financial position or results of operations.
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