Management's Discussion and Analysis
This section of the Form 10-K includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
Capital Resources and Liquidity
Our auditors have issued a "going concern" opinion, meaning that there is
substantial doubt if we can continue as an on-going business unless we obtain
additional capital. No substantial revenues from our planned business model are
anticipated until we have completed financing the Company. As at
We need to seek capital from resources such as the sale of private placements in the Company's common stock or debt financing, which may not even be available to the Company. However, if such financing were available, because we are an early stage company with no or limited operations to date, it would likely have to pay additional costs associated with such financing and in the case of high risk loans be subject to an above market interest rate. At such time these funds are required, management would evaluate the terms of such financing. If the Company cannot raise additional proceeds via such financing, it may be required to cease business operations.
As of
Management believes that if subsequent private placements are successful or we are successful in raising funds from registered securities, we will generate sales revenue within twelve months thereof. However, additional equity financing may not be available to us on acceptable terms or at all, and thus we could fail to satisfy our future cash requirements.
We do not anticipate researching any further products nor the purchase or sale of any significant equipment. We also do not expect any significant additions to the number of employees.
7 Table of Contents Results of Operations
We had no revenue for the years ended
Total operating expenses for the fiscal year ended
· An increase in consulting fees from$224,691 in 2020 to$526,522 in 2021 due to an increased use of consultants as part of our continued growth and development of our strategic objectives as a publicly-listed company; · An increase in general and administrative fees from$63,711 in 2020 to$79,422 in 2021, which was primarily due to an increase in administrative fees based on higher overhead costs; · An increase in interest and finance costs from$343,942 in 2020 to$680,714 in 2021, which was mainly attributable an increase in default penalties incurred on convertible notes due to the debentures maturing without repayment and due to the declaration of reorganization inAugust 2020 that triggered a default event on the outstanding debentures; and · An increase in loss on change in fair value of derivative liabilities from$1,149,450 in 2020 to$3,257,122 in 2021, which related to the embedded conversion features on the Company's convertible debentures entered into during the year and due to the conversion of additional default penalties during the year at a heavily-discounted conversion price.
The increase was partially offset by the following:
· An increase in the gain on settlement on convertible notes from a loss of$33,087 in 2020 to a gain of$237,940 in 2021; · A decrease in accretion of discount of convertible notes from$328,333 in 2020 to$88,264 in 2021, which related to the decrease in convertible debt financing during the year; · A decrease in impairment of property and equipment from$434,601 in 2020 to $nil in 2021 as we wrote off our construction costs relating to the proposed biotech complex inDeroche in fiscal 2020 and did not incur any new capital expenditure costs; and, · A decrease in the gain from write-off of accounts payable from$292,557 in 2020 to $nil in 2021, as we recorded a one-time write-off of amounts owed for professional services in fiscal 2020.
During the year ended
Off-balance sheet arrangements
The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or change on the Company's financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term "off-balance sheet arrangement" generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with the Company is a party, under which the Company has (i) any obligation arising under a guarantee contract, derivative instrument or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.
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