Caution Regarding Forward-Looking Statements
This Form 10-Q contains forward-looking statements regarding future events and future results of the Company that are subject to the safe harbors created under the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 ( the “Exchange Act”). These statements are based on current expectations, estimates, forecasts and projections regarding the industry in which the Company operates and the beliefs and assumptions of the Company’s management. Words such as “hopes “, “expects”, “anticipates”, “aims”, “goals”, “projects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, ” continues, “”may”, variations of these words and similar expressions are intended to identify such forward-looking statements. In addition, any statements referring to projections of the Company’s future financial performance and other characterizations of future events or circumstances are forward-looking statements.
The Company undertakes no obligation to update these forward-looking statements after the date of this report. You should not place undue reliance on these forward-looking statements.
At September 27, 2019, Virtual Interactive Technologies Company merged with
Advanced Interactive Games Inc.and its subsidiary Advanced Interactive Gaming Ltd. (collectively “Advanced Interactive Gaming” or “AIG”), by way of a reverse merger transaction. Advanced Interactive Gaming was founded in 2016 to provide funding solutions to independent video game developers around the world. Advanced Interactive Gaming has been deemed to be the accounting acquirer of the transaction and will be the operating entity going forward as Virtual Interactive Technologies Company (“VRVR” or “the Company” or “we”)
VRVR funds the development of video game projects to be published on various popular game platforms in exchange for a stream of game royalties. To date, the company has funded several game titles, including Carmageddon Max Damage, Carmageddon Crashers, Interplanetary: Enhanced Edition, Catch & Release, and Worbital. Collectively, these games are distributed worldwide across various gaming platforms, including Sony PlayStation, Xbox, Steam, and Oculus, among others. In addition to financing solutions, VRVR offers expertise in solutions for developing, publishing and marketing video game products and actively participates in the early stages of VR/AR game development. VRVR continues to reinvest its royalty revenue into growing its royalty deals and intellectual property in the video game development industry.
The company’s strategy moving forward is to continue investing in the development of new games through partnerships and royalty deals. Management believes there are significant opportunities in VR games given the relatively early stage of the product cycle and the growing need for content to support VR hardware sales. Although the company has historically participated primarily in the PC and console market, it will continue to explore additional opportunities in the gaming space as they arise. Additionally, the VRVR may explore strategic alliances and acquisitions to expand its business.
Results of Operations
The following discussion relates to the results of operations for the three months ended December 31, 2021 and December 31, 2020.
Revenues fell by $33,405 for the three months ended December 31, 2020 at
$30,392 for the three months ended December 31, 2021. Revenue came from royalty interests in five games, Carmageddon Max Damage, Carmageddon Crashers, Catch & Release, Interplanetary: Enhanced Edition, and Worbital.
General and administrative expenses for the three months ended December 31, 2021
and 2020 was $197,809 and $81,697, respectively. This represents a 142% increase over the periods. This increase is attributable to fees incurred for investor relations, professional services and attendance fees.
At December 1, 2021 the Company has entered into an agreement with a production entity for the services of Duane “Dog” Chapman, also known as “Dog the Bounty Hunter”. Pursuant to the agreement, the Company and Mr. Chapman will develop and market a range of video games in cooperation with the other and will use At Mr. Chapman’s name, image and likeness in connection with the advertising, promotion and sale of video games.
At December 3, 2021the Company has issued shares to two of our directors for directors’ compensation. jerry lewis received 35,000 shares and Janelle Gladstone
received 25,000 shares. The closing price of our common shares on the grant date was $1.55 per share, and a charge of $93,000 has been registered for the issuance of these shares.
For the three months ended December 31, 2021 we recorded a loss of $286,052. For the three months ended December 31, 2020we recorded a loss of $59,755. The increase in the loss of $226,297 was primarily related to the additional general and administrative costs identified above and the amortization of the Company’s debt discount.
As a member of September 23, 2021 note of $235,000the Company paid a commitment fee of $165,000 by issuing 82,500 ordinary shares on $2.00 per share. The commitment commission of $165,000 has been accounted for as a discount on the note and is amortized over the life of the note from October 1, 2021. In the three months ended December 31, 2021the Company recognized an amortization expense of $96,063.
Cash and capital resources
From December 31, 2021we had cash and cash equivalents of $167,769. From
September 30, 2021we had cash and cash equivalents of $251,064. Working capital was ($807,925) starting the December 31, 2021 compared to $293,754 at September 30, 2021. The decrease in working capital of $1,101,679 was primarily the result of the Company’s related party debt $923,779 (notes payable and accrued interest) being due within the year and appearing in current liabilities at December 31, 2021 when it was classified as long-term at December 31, 2020 (the note will mature in December 2022).
Cash flow from operating activities:
Net cash provided by (used in) operating activities for the three months ended
December 31, 2021 has been $83,295. Net cash provided by operating activities for the three months ended December 31, 2020 has been $20,967. The change over the two periods presented is $104,262.
Changes in operating activities for the three months ended December 31, 2021
included increases in accounts payable and accrued liabilities of $1,486and accrued interest receivable from $454fee to be received from $4,519accrued interest payable, related parties of $15,152and accrued interest payable from
$2,029. The Company had non-cash activities of $93,000 and $96,063 related to shares issued for services and debt discount amortization.
Changes in operating activities for the three months ended December 31, 2020
included increases in accounts payable and accrued liabilities of $19,022and accrued interest receivable from $408accrued interest payable, related parties of $12,434accrued interest payable from $151; offset by a decrease in royalties receivable from $59,017and accounts payable, related parties of $9,494.
Cash flow from investing activities:
Net cash used in investing activities for the three months ended December 31, 2021 and 2020 was $0 and $7,500, respectively. In the three months ended
December 31, 2020the Company has advanced funds in the form of a convertible note receivable in the amount of $7,500.
© Edgar Online, source Previews