Our Management's Discussion and Analysis contains not only statements that are
historical facts, but also statements that are forward-looking (within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934). Forward-looking statements are, by their very
nature, uncertain and risky. These risks and uncertainties include
international, national and local general economic and market conditions;
demographic changes; our ability to sustain, manage, or forecast growth; our
ability to successfully make and integrate acquisitions; existing government
regulations and changes in, or the failure to comply with, government
regulations; adverse publicity; competition; fluctuations and difficulty in
forecasting operating results; changes in business strategy or development
plans; business disruptions; the ability to attract and retain qualified
personnel; the ability to protect technology; and other risks that might be
detailed from time to time in our filings with the Securities and Exchange
Commission.
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Although the forward-looking statements in this Annual Report reflect the good
faith judgment of our management, such statements can only be based on facts and
factors currently known by them. Consequently, and because forward-looking
statements are inherently subject to risks and uncertainties, the actual results
and outcomes may differ materially from the results and outcomes discussed in
the forward-looking statements. You are urged to carefully review and consider
the various disclosures made by us in this report and in our other reports as we
attempt to advise interested parties of the risks and factors that may affect
our business, financial condition, and results of operations and prospects.
Overview
Momentous is a modern craft beverage company, founded in 2015 that is based in
London, United Kingdom. We design, produce, market and sell handcrafted,
award-winning alcohol beverage products with a portfolio consisting of gin,
vodka, bitter and ready-to-drink cocktails ("RTD").
Our strategy is to produce premium products with minimal impact to the
environment through the use of modern technology during production. Our methods
help us to conserve energy and reduce water waste whilst delivering what we
believe is a superior product. We also focus on environmentally friendly and
recyclable packaging to reduce our carbon footprint. We are also looking to
employ carbon offsetting in order to meet our carbon neutral status target by
the end of 2021.
Corporate Information
Our corporate address is 32 Curzon Street, London, W1J 7WS, United Kingdom. Our
telephone number is +44-203-871-3051. Our corporate address is a professional
mail forwarding office where physical office space may be rented on a short-term
basis for additional fees. We conduct our business operations, including
administrative functions, production, marketing and sales of low carbon,
eco-friendly beverages at our facilities that are based in Tottenham and
Walthamstow, London in the United Kingdom.
Our corporate website is: www.vbeverages.com. The information on, or that may
be, accessed from our website is not part of this annual report.
Our fiscal year end is May 31.
Successor and Predecessor Financial Presentation
Throughout the consolidated financial statements and in this Management's
Discussion and Analysis of Financial Condition and Results of Operation section,
we refer to "Successor" and "Predecessor". For periods after the acquisition of
MaxChater Ltd. ("MaxChater") (since August 1, 2018), our operating results and
cash flows are referred to as Successor. For periods prior to the acquisition of
MaxChater, our operating results and cash flows are referred to as Predecessor.
Where tables are presented in this MD&A, a black line separates the Successor
and Predecessor financial information to highlight the lack of comparability
between the periods.
Results of Operations
The following discussion of the financial condition and results of operations
should be read in conjunction with the consolidated financial statements
included herewith. This discussion should not be construed to imply that the
results discussed herein will necessarily continue into the future, or that any
conclusion reached herein will necessarily be indicative of actual operating
results in the future.
On August 1, 2018, V Beverages acquired MaxChater for £1 ($1). MaxChater is
viewed as the predecessor entity for financial reporting purposes, and Momentous
Holdings Corp. is viewed as the successor entity.
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For purposes of the following discussion, we compare the combined results of
Momentous Holdings Corp. for the year ended May 31, 2020 with the combined
results of Momentous Holdings Corp. for the ten months ended May 31, 2019
(Successor) and the results of MaxChater for the two months ended July 31, 2018
(Predecessor).
For the ten months ended May 31, 2019, the Company (successor) generated total
revenues of $133,699. During the two months ended July 31, 2018, MaxChater
(predecessor) generated total revenues of $26,067.
For the ten months ended May 31, 2019 (successor), we experienced a total
comprehensive loss of $133,412, as compared to a total comprehensive loss of
$18,350 for the two months ended July 31, 2018 (predecessor). This primarily
resulted from higher operating expenses in the 2019 period, which more than
offset the increase in revenues. The higher level of operating expense was
partly attributable to higher general and administrative expenses, which is
likely to continue given the costs of maintaining the company as a public
company.
Our revenues, operating expenses, and net operating loss were as follows:
Revenues
Our revenue for the year ended May 31, 2020 was $175,877, as compared our
revenue for the ten months ended May 31, 2019 (successor) was $133,699. For the
two months ended July 31, 2018 (predecessor) revenue was $26,067. These revenues
were generated from sales of our Victory branded products. The increase in
revenue in the year ended 2020 is primarily attributable to our increased
product range.
Operating Expenses
Our operating expenses for the year ended May 31, 2020 were $325,452, as
compared to operating expenses for the ten months ended May 31, 2019 (successor)
of $174,628. For the two months ended July 31, 2018 (predecessor) operating
expenses were $27,358. Our operating expenses increased due to increased
personnel, professional, legal and accounting expenses during the year.
Other Comprehensive Income/(Loss)
Other comprehensive income for the year ended May 31, 2020 was $70, as compared
to other comprehensive income for the ten months ended May 31, 2019 (successor)
of $4,468. For the two months ended July 31, 2018 (predecessor), other
comprehensive income was $2,819.
Total Comprehensive Loss
Our total comprehensive loss for the year ended May 31, 2020 was $288,659, as
compared to the total comprehensive loss for the ten months ended May 31, 2019
(successor) of $133,412. For the two months ended July 31, 2018 (predecessor)
the total comprehensive loss was $18,350.
The increase in total comprehensive loss is attributable to the change in
business focus to the alcohol beverage industry along with increased legal and
audit fees.
Liquidity and Capital Resources
As of May 31, 2020, we had total current assets of $36,800, consisting of cash
of $1,252, inventory of $9,857, accounts receivable of $13,799 and prepayments
and other receivables of $6,712. We had current liabilities of $420,105 as of
May 31, 2020. We therefore had a working capital deficit of $383,305 as of May
31, 2020.
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The company received further funds due under the convertible loan note after the
balance sheet date and prior to the issue of this report of $121,000. Our
ability to operate beyond May 31, 2020, however remains contingent upon us
obtaining additional financing and/or upon realizing sales revenue sufficient to
fund our ongoing expenses. Until we are able to sustain our ongoing operations
through sales revenue, we intend to fund operations through debt and/or equity
financing arrangements, which may be insufficient to fund our capital
expenditures, working capital, or other cash requirements. We do not have any
formal commitments or arrangements for the sales of stock or the advancement or
loan of funds at this time. There can be no assurance that such additional
financing will be available to us on acceptable terms, or at all.
Going Concern
Our total current assets were $36,800, consisting of cash of $1,252, inventory
of $9,857, accounts receivable of $13,799 and prepayments and other receivables
of $6,712. These amounts do not provide adequate working capital for us to
successfully operate our business and to service our debt. This raises
substantial doubt about our ability to continue as a going concern. Our
continuation as a going concern is dependent upon obtaining additional working
capital.
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