You should read the following discussion and analysis of our financial condition and results of operations together with ''Selected Consolidated Financial Data'' and our consolidated financial statements and related notes appearing elsewhere in this annual report on Form 10-K. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under ''Risk Factors'' and elsewhere in this annual report on Form 10-K.
Overview
We design and market to business customers digital watermarking, streaming video and video-on-demand (VOD) systems, services and source-to-destination digital media delivery solutions that allow live or recorded digitized and compressed video to be transmitted through Internet, intranet, satellite or wireless connectivity. The Company's systems, services and delivery solutions include digital watermark solutions and video content production, content encoding, media asset management, media and application hosting, multi-mode content distribution, transaction data capture and reporting, e-commerce, specialized engineering services, and Internet streaming hardware.
The Company's products and services are based on its data privacy, data protection and media delivery infrastructure, software and services. It has developed a number of specific products and services that include Cloud-DPS, CTSS and Forget-Me-Yes™.
As more fully discussed below we have not been profitable, and our revenues for 2021 and 2020 were $Nil. We cannot predict our revenue levels for the next 12 months, or thereafter, nor when, or if, our operations will become profitable. We will require additional financing, both for the remainder of fiscal 2021 and thereafter, to continue to operate and expand our business. There is no assurance that such financing will be available on commercially reasonable terms, if at all.
CRITICAL ACCOUNTING POLICIES
Our discussion and analysis of our financial condition and results of operations
are based upon our financial statements, which have been prepared in accordance
with accounting principles generally accepted in
We have identified the policies below as critical to our business operations and to the understanding of our financial results. The impact and any associated risks related to these policies on our business operations is discussed throughout management's discussion and analysis of financial condition and results of operations where such policies affect our reported and expected financial results:
? Impairment or disposal of long-lived assets; ? Deferred taxes; ? Accounting for stock-based compensation; and ? Commitments and contingencies.
IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS. Long-lived assets are reviewed in accordance with ASC Topic 360-10-05. Impairment or disposal of long-lived assets losses are recognized in the period the impairment or disposal occurs.
DEFERRED TAXES. We record a valuation allowance to reduce deferred tax assets when it is more likely than not that some portion of the amount may not be realized.
ACCOUNTING FOR STOCK-BASED COMPENSATION. Under ASC Topic 718, Stock Compensation, the Company estimates the fair value of stock options granted using the Black-Scholes option pricing model. The fair value for awards that are expected to vest is then amortized on a straight-line basis over the requisite service period of the award, which is generally the option vesting term. The amount of expense attributed is based on estimated forfeiture rate, which is updated based on actual forfeitures as appropriate. This option pricing model requires the input of highly subjective assumptions, including the expected volatility of the Company's common stock, pre-vesting forfeiture rate and an option's expected life. The financial statements include amounts that are based on the Company's best estimates and judgments.
28
--------------------------------------------------------------------------------
Table of Contents
COMMITMENTS AND CONTINGENCIES. We account for commitments and contingencies in accordance with ASC Topic 450 Contingencies. We record a liability for commitments and contingencies when the amount is both probable and reasonably estimable.
Results of Operations
For the Year Ended
Selling, General and Administrative Expenses
Selling, general and administrative expenses, consisting of product marketing
expenses, consulting fees, office, professional fees and other expenses to
execute our business plan and for our day-to-day operations, increased in the
year ended
Selling, general and administrative expenses for the year ended
Research and development for the year ended
We have arranged for additional staff and consultants to engage in marketing activities in an effort to identify and assess appropriate market segments, develop business arrangements with prospective partners, create awareness of new products and services, and communicate to the industry and potential customers. Other components of selling, general and administrative expenses did not change significantly.
Research and Development
Research and development costs for the three months ended
Net Losses
To date, we have not achieved profitability and expect to incur substantial
losses for the foreseeable future. Our net loss for fiscal 2021 was
29
--------------------------------------------------------------------------------
Table of Contents
Liquidity and Capital Resources
At
Our principal source of cash during fiscal 2021 was
We have historically satisfied our capital needs primarily by shareholders'
loans and issuing equity securities to our officers, directors, employees and a
small group of investors, and from short-term bridge loans from members of
management. During the year ended
As of
Assuming the aforementioned
Statement of Cash Flows
The Company had cash and cash equivalents of
The increase in cash and cash equivalents during the year ended
Cash Flow used in Operating Activities
Cash and cash equivalents used in operating activities were
Cash Flow used in Investing Activities
Cash provided by investing activities was $Nil (2020 -
Cash Flow provided by Financing Activities
Cash provided by financing activities was
Off-Balance Sheet Arrangements
As of fiscal 2021 we have no off-balance sheet arrangements.
© Edgar Online, source