APPSOFT TECHNOLOGIES, INC. Overview
We develop, publish and market Apps for smartphones and tablet devices. We
derive revenue from sales, or downloads, of our Apps and from advertisements
published on our ad-supported game titles. During 2022, we did not generate any
revenue. During 2022, we explored new game development ideas and other aspects
of video game reporting. Over the course of 2023, we expect to generate revenue
from the sale of software titles that we are developing from our own account,
from titles that were developed by third-parties which we acquired and from
titles that have been developed for our benefit. Operating margins are dependent
in part upon our ability to release new, commercially successful software
products and to manage effectively their development costs. We also expect to
generate revenue from our eSports business as we seek to re-launch
Our Apps titles include games designed to appeal to a broad cross section of consumers. We offer all of our game titles in both a free advertisement-supported version and a paid version that does not display ads. We believe that the ad supported versions allow for wider dissemination of our titles to consumers who might not otherwise spend money for an App without first playing the game.
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We market, sell and distribute our games through as Apple
We expect to develop and acquire new Apps to expand our existing product offerings, as our resources permit. We rely on third party designers, developers and programs to develop new Apps. We also solicit ideas for new titles from unrelated parties. We evaluate prospects based on a variety of factors. If we conclude that a particular prospect is worth pursuing, we may fund the development of the App through launch and beyond.
We have been growing our Esports efforts from a simple news site to in-depth interviews with current and former champions, and now we are moving into video gameplay content.
We have been constrained in our development and acquisition activities by a lack of cash. Our ability to pursue and achieve our objectives is predicated on our receipt of meaningful revenue from sales of our existing Apps and those we may release in the future and from our ability to raise capital from outside sources.
Growth Strategies and Outlook
Our principal growth strategy entails developing and acquiring new Apps to supplement our existing Apps portfolio. Our primary focus will be to release new game titles. We seek to solicit new games and concepts that we may acquire from third parties. We also will seek to develop and publish free-to-play games. Free-to-play games are games that a player can download and play for free, but which allow players to access a variety of additional content and features for a fee, through "in-app purchases" utilizing virtual currency that may be purchased through digital storefronts, and to engage with various advertisements and offers that generate revenues for us. We may seek to acquire franchises around which we develop games, including movies, television programs, toys and other cultural phenomena that lend themselves to gamification.
During the first quarter of 2022, we launched a video game incubator, Gamerfy.com, which will seek to acquire and commercialize the next generation of game titles with particular focus on community play, the Metaverse and NFT's, each of which would allow us to sell into rapidly growing market segments. We expect Gamerfy to be the principal source of new games for us for the foreseeable future. We have identified a heuristics for investment decisions and have identified key professionals for employment and as executive members of Gamerfy.
During the second quarter of 2021, we launched Esportsreporter.com, a news channel for a broad spectrum of esports and gaming. We are currently building a following on digital media and expect to monetize the site and our audience utilizing an array of proven techniques, including generating revenue from sales, sponsorships, merchandise, and advertiser supported content. We expect to direct a significant percentage of our capital resources on Esportsreporter.com during 2022. We continue to invest in Esportreporter.com, mainly in video gameplay and expect to continue to direct capital and employment resources into 2023.
Our revenues will depend significantly on growth in the mobile games market and
our ability to develop or acquire and publish Apps that are well-received by
consumers. In addition, because our products are purchased with disposable
income, our success is dependent on the overall strength of the economy in
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Our ability to achieve and sustain profitability will depend not only on our ability to generate meaningful our revenues, but also on our ability to manage our operating expenses. Currently, we have one full-time employee, who receives compensation when and as determined by the Board. For the foreseeable further, we expect to utilize the services of independent contractors and consultants, who we believe are readily available for our purposes, in order to manage our personnel costs. We also will continue to maintain a virtual office as long as our operations permit us to do so to contain our office space overhead.
We require significant additional capital to fund the development of Apps in process that we have developed internally or acquired from third parties during the last year. We also require capital to fund marketing initiatives for our existing products and the launch and marketing of Apps in development. We cannot be sure that the additional capital we require will be available on acceptable terms or at all. If adequate funds are not available on acceptable terms or at all, we may be unable to develop or enhance our services and products, take advantage of future opportunities, repay debt obligations as they become due, or respond to competitive pressures, any of which would have a material adverse effect on our business, prospects, financial condition, and results of operations.
Results of Operations for the Year Ended
The following table presents our results of operations for the year endedDecember 31, 2022 and 2021: For the years ended December 31, 2022 2021 Revenue $ - $ - Expenses Selling, General and Administrative 10,681 20,421 Depreciation and Amortization Expense - 207 Interest Expense 6,345 5,352 Outside Services 1,888 22,659 Professional Fees 12,525 2,215 Total Expense 31,439 50,854 Loss from Operations$ (31,439 ) $ (50,854 ) )
Liquidity and Capital Resources
Liquidity is the ability of a company to generate cash to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity include funds generated by operations, the availability of credit facilities, levels of accounts receivable and accounts payable and capital expenditures.
As of
Our primary requirements for liquidity and capital are to fund the growth of Esportsreporter.com as well as the development and acquisition of new Apps and for sales and marketing initiatives in connection with the launch and promotion of our games, through Gamerfy as well as for working capital to fund our general corporate needs, including filing reports under the federal securities laws. We work with independent game designers, developers and programmers who provide us with new ideas and titles to publish. We also are soliciting new games and concepts that we may acquire from third parties. When we receive an idea for a new App, we research the commercial viability of the concept, undertaking an analysis of the cost to develop the App against its potential economic return. If we determine that the App is commercially viable, we may fund the cost of development, publication and marketing. Upon completion of development we will own the App title. Developing and publishing free-to-play games will require considerable capital to develop, maintain and update, particularly games we may seek to develop around popular movie, television, toy other cultural phenomena that lend themselves to gamification.
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Since our customers pay for their purchases by credit or debit card at the time of sale, neither inventories nor receivables are relevant to our business.
Our cash on hand and cash flow from operations are not sufficient to fund our
existing operations or support our desired development and acquisition strategy
or required in connection with launching, marketing and promoting our games.
Over the last several years, we have relied on loans from entities related to a
stockholder for operating capital. In 2020, these loans were rolled up into a
Drawdown Promissory Note which was amended on
Cash Flows: Operating Activities
Cash used in operations was
Investing Activities
We did not use any cash in investing activities during the years ended
Financing Activities
Cash flow from financing activities was
Off-Balance Sheet and Other Arrangements
As of the date of this Annual Report, the Company does not have any off-balance sheet or similar arrangements.
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Going Concern
The report of our independent auditor and Note B to the financial statements filed with this Annual Report indicate that the Company's minimal operations to date and lack of fully established sources of revenue raise substantial doubt about the Company's ability to continue as a going concern. For these reasons, our financial statements have been prepared assuming the Company will continue as a going concern, which assumes we will realize our assets and discharge our liabilities in the normal course of business. If we are unable to achieve these ends, we cannot assure you that we will be able to generate revenue to support our operations and continue operations.
The presence of the going concern explanatory paragraph suggests that we may not have sufficient liquidity, or minimum cash levels, to operate our business. Since our inception, we have incurred losses and anticipate that we will continue to incur losses until such time as our Apps generate sufficient revenue to offset our research and development, general and administrative and sales and marketing expenses. We will need to raise additional capital to fund our near-term operational plans described elsewhere in this report. We cannot assure you that we will be successful in our operational plans. We cannot be sure that the additional capital we require will be available on acceptable terms or at all. If adequate funds are not available on acceptable terms or at all, we may be unable to develop or enhance our services and products, take advantage of future opportunities, repay debt obligations as they become due, or respond to competitive pressures, any of which would have a material adverse effect on our business, prospects, financial condition, and results of operations.
Inflation
We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we might not be able to fully offset these higher costs through price increases. Our inability or failure to do so could harm our business, operating results and financial condition.
Critical Accounting Policies and Use of Estimates
The preparation of our financial statements in accordance with United States Generally Accepted Accounting Principles, of GAAP, requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, revenue, and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under current circumstances in making judgments about the carrying value of assets and liabilities that are not readily available from other sources. We evaluate our estimates on an on-going basis. Actual results may differ from these estimates under different assumptions or conditions.
Accounting policies are an integral part of our financial statements. A thorough understanding of these accounting policies is essential when reviewing our reported results of operations and our financial position. Management believes that the critical accounting policies and estimates discussed below involve the most difficult management judgments, due to the sensitivity of the methods and assumptions used. Our significant accounting policies are described in Note 1 to our financial statements included elsewhere in this report.
We believe the following accounting policies and estimates are the most critical. Some of them involve significant judgments and uncertainties and could potentially result in materially different results under different assumptions and conditions.
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Revenue Recognition-
(i) persuasive evidence of an arrangement exists, (ii) the services have been rendered and all required milestones achieved, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
Recent Accounting Pronouncements
Emerging Growth Company Critical Accounting Policy Disclosure: We qualify as an "emerging growth company" under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging growth company, we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period.
There are no recent accounting pronouncements published after
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