The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our unaudited financial statements
and related notes included in this Quarterly Report on Form 10-Q and the audited
financial statements and notes thereto as of and for the fiscal year ended
Forward-Looking Statements
The information in this discussion contains forward-looking statements and
information. The words "anticipates," "believes," "estimates," "expects,"
"intends," "may," "plans," "projects," "will," "should," "could," "predicts,"
"potential," "continue," "would" and similar expressions are intended to
identify forward-looking statements, although not all forward-looking statements
contain these identifying words. We may not actually achieve the plans,
intentions or expectations disclosed in our forward-looking statements and you
should not place undue reliance on our forward-looking statements. Actual
results or events could differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements that we make. The
forward-looking statements are applicable only as of the date on which they are
made, and we do not assume any obligation to update any forward-looking
statements. All forward-looking statements in this Quarterly Report on Form 10-Q
are made based on our current expectations, forecasts, estimates and
assumptions, and involve risks, uncertainties and other factors that could cause
results or events to differ materially from those expressed in the
forward-looking statements. In evaluating these statements, you should
specifically consider various factors, uncertainties and risks that could affect
our future results or operations. These factors, uncertainties and risks may
cause our actual results to differ materially from any forward-looking statement
set forth in this Quarterly Report on Form 10-
Overview
HyFi Asset Purchase Agreement
On
Pursuant to the terms of the APA, the Company agreed to acquire from the Sellers, and the Sellers agreed to sell to the Company, certain assets comprised of the goodwill, intellectual property, business proprietary know-how and trade secrets, intangible property and other assets of Sellers' business with respect to HyFi, and any and all rights of Sellers in and to the foregoing (the "Assets"), and certain governance/utility virtual tokens (collectively, the "HyFi Tokens") expected to be used as a means of payment on the HyFi Platform, as hereinafter defined (the "Acquisition"). The "HyFi Platform" means a decentralized finances ("DeFi") exchange marketplace using blockchain platform technology. The DeFi principles are based on an ecosystem of financial services utilizing tokenization and non-fungible tokens ("NFTs") for production, licenses, projects and commodities across vertical and horizontal markets.
In addition, the Sellers agreed to (i) pay to the Company, on the closing date
of the Acquisition,
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Pursuant to the terms of the APA, the Company agreed to file with the
Pursuant to the terms of the APA, the parties agreed that the Series C preferred stock will have the following terms, among others:
1. Authorized Shares of Series C Preferred Stock. The number of authorized shares of Series C preferred stock will be 900,000. 2. Conversion. Subject to the other terms and conditions in the certificate of designation, a Series C preferred stock holder will have the right from time to time and at any time following the date that is one year after the date on the signature page of the certificate of designations to convert each outstanding share of Series C preferred stock into 450 shares of Company common stock. Based on the number of shares of common stock issued and outstanding as ofJune 29, 2021 , if all of the 900,000 shares of Series C preferred stock are issued and subsequently converted, the holders of the converted stock will hold 90% of the issued and outstanding shares of common stock. 3. Voting. Except as otherwise set forth in the certificate of designation, each share of Series C preferred stock will, on any matter submitted to the holders of Company common stock, or any class thereof, for a vote, vote together with the common stock, or any class thereof, as applicable, as one class on such matter, and each share of Series C preferred stock will have 450 votes. 4. Dividends. The Series C preferred stock is not entitled to receive dividends or distributions.
The Acquisition closed on
On
Series A Preferred Stock Redemption Agreement & Senior Promissory Note
Also on the Closing Date, the Company and
As provided in the APA, on
Troy MacDonald (Chairman)Adam Benchaya Robert Kohn Thomas Perez 4
Also on
Troy MacDonald , Chief Executive OfficerRobert Kohn , Chief Financial OfficerAdam Benchaya , President and Chief Marketing Officer
The HyFi Platform
We are a
Any "fractionalized interest" - as described hereinafter - in any NFT, licensing
fee or loan would be subject to a registered or exempt securities offering, in
that such "fractionalized interest" would qualify as an investment contract
similar to a security, consistent with the prevailing interpretation at issue in
the
The HyFi technology is also a candidate infrastructure for use in the metaverse and play-to-earn GameFi industry. HyFi technology allows users to securely own assets or items and move them across different platforms without the need for a central party's permission. The HyFi technology is expected to allow for transparent trading of decentralized assets like NFTs and other digital assets. The DeFi principles are based on the creation of an innovative ecosystem of financial services accessible to anyone with internet access.
The HyFi token is featured on the
Proposed HyFi DeFi and CeDeFi Marketplace Types
Utilizing our HyFi blockchain technology, we are developing the following proposed DeFi marketplaces:
1.
2. Bridge Loan Offerings (BLOs) for Businesses. Investors will also be able to purchase a fractionalized interest in an expected income return for the BLOs.
3. Pre-IPO Market Offerings. We expect that investors will be able to purchase a fractionalized interest in an expected income return, as well as option for shares of common stock from IPO pre-public offerings.
4.
5. CeDeFi Exchanges. Our initial CeDeFi exchange will focus on membership. We
intend, in the future, to trade commodities and other tokens using the HyFi
blockchain technology and ecosystem, which will require registration with the
6. Metaverse & GameFi. We intend to enable our DeFi infrastructure for use with the Metaverse and GameFi.
5NFT Marketplace
NFTs are collectible digital assets in which various objects are digitized. Each NFT represents ownership of something inherently distinct and unique, whether it be a physical or a digital item. NFTs cannot be mutually exchanged for one another because each NFT has a specific value based on its unique traits and attributes. When NFTs are sold, the digital version of the object is sold as a unique, blockchain-authenticated collectible.
NFT marketplaces are platforms where NFTs can be stored, displayed, traded and
in some cases, created or "minted". NFTs cannot be purchased on centralized or
decentralized cryptocurrency or other exchanges. Instead, they are listed and
traded on online marketplaces that are specially built for NFTs. We launched our
demo NFT marketplace in
We intend that cash flow technology license NFTs will be created that will
represent up to a 49% ownership interest of a technology license for a
geographic vertical market (e.g.,
6NFT ILO Marketplace
ILO tokens are sub-class of tokens which are created to allow for fractional ownership of an NFT from an owner issuer that seeks to raise money for the development of new projects, technologies, intellectual property, licenses, brands, etc. A key distinguishing element of the HyFi marketplace is the fractionalization of the NFT that aggregates the investor contribution capability of many. On the HyFi Platform, the issuer is able to sell a percentage interest in its license in order to raise capital.
HyFi intends to introduce the ILO to investors and to a global network of brokers who are incentivized to introduce investors (institutional investors, corporations, family offices, private wealth and individuals) who may buy fractional interests (ILO Tokens) of the license offering or a total interest.
We intend to establish an NFT marketplace for speculative one-of-a-kind asset NFTs via tokenized NFT offerings, including but not limited to the following:
? Artwork ? Collectibles ? Memorabilia ? Music libraries ? Intellectual property rights ? Collectibles ? Precious metals/gems
We intend to offer cash flow generating NFTs, on full or fractional ownership basis, in the following major areas as conceptualized below:
? We anticipate that NFTs may be created, representing up to a 49% ownership interest of a license to a particular geographic market (example:India ). There would also be a subclass of tokens that represent an opportunity for numerous participants to have fractional ownership of, and participation in, the unique one-of-a-kind exclusive license NFTs. We expect that those NFTs would be tradeable on the commodities section of the HyFi Platform once certain conditions have been met. ? We also expect that there may be NFTs issued for qualified projects related to renewable energy, waste to energy, agricultural and other approved projects showing potential and promise in their respective industry sectors. ? Ownership of technology licenses: We expect that NFTs may represent part or full ownership of technology licenses across many markets. Each such market is expected to include horizontal and vertical markets. For example, let's assume that a given energy market could include the horizontal energy markets of green hydrogen and its many uses, electric generation, biofuels for marine, aviation and transportation and hydrogen fueling station networks. NFTs could also represent part or full ownership of a technology license in a specific geographic territory or vertical market. ? Physical projects related to renewable energy, environmental, agricultural and humanitarian causes. NFTs could be issued to represent an opportunity to invest in projects in any of the aforementioned categories. ? Other approved cases. In the future we may consider NFTs in the areas of medicine, space, internet & computing, artificial intelligence, robotics and nanotechnology, for example.
There can be no assurance that any of the above market segments will materialize, produce customers or revenue, or that the Company will achieve profitability.
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We intend to establish a NFT marketplace for bridge loans via tokenized NFT offerings, including the following:
? Fractional ownership of loan contracts, expected to be typically high yielding ? Funds to be used for construction projects related to renewable energy, environment, agriculture, new technology, medical, humanitarian projects and pre-IPO companies ? Other licenses and projects qualified by the Company
"BLO Tokens" are a sub-class of tokens created to allow for fractional ownership of a unique NFT loan contract offered by an issuer that seeks to borrow money for typically a short period of time for a number of critical business reasons while it is awaiting the arrival of expected income or capital which would be used to pay back the loan, with interest owed. It is the fractionalization of the BLO NFT into BLO Tokens that aggregates the funding capability.
There can be no assurance that any of the above market segments will materialize, produce any customers or revenue whatsoever, or that the Company will achieve profitability.
In addition, we expect that commodities can be traded in the future on a to-be-formed HyFi Commodities Platform which would be registered with applicable regulatory authorities as an ATS and/or commodity exchange.
? We expect to have an initial emphasis on agri-foods , renewable energy and waste-to-energy via tokenized futures blockchain based smart contracts. ? The trading of certain commodities (e.g., green hydrogen production) would occur in most cases without any physical delivery obligation, and with electronic settlement only. Traders would purchase tokens to participate in the trading of those commodities. In some cases, commodities could be offered with a physical delivery option. ? Commodity future supply contracts: A futures contract is a legal agreement to buy or sell a particular commodity asset at a predetermined price at a specified time in the future. The seller of the futures contract is taking on the obligation to provide and deliver the underlying commodity at the contract's expiration date. Futures contracts are available for every category of commodity. Some manufacturers and service providers use futures contracts as part of their budgeting process to normalize expenses and reduce cash flow-related headaches. Manufacturers and service providers that rely on commodities for their production process may take a position in the commodities markets as a way of reducing their risk of financial loss due to a change in price. There are many advantages to futures contracts as a method of participating in the commodities market. We believe that analysis can be easier because of the underlying commodity.
Proposed NFT Vault Programs
The HyFi NFT Vault Program has been developed for two main purposes: (1) to create an immediate and sustainable path to revenue for the Company by creating a unique NFT, to be coupled with other opportunities associated with an Art collectible(s); and (2) accelerate user participation by providing a main entry point to become a member and begin interacting with the HyFi DeFi Marketplaces.
The HyFi NFT Vault Program is the "Front Door" to HyFi and its DeFi marketplaces
positioned as a well-rounded tool-kit for all that is needed to interact with
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When a user purchases a HyFi NFT Vault it contains an assortment of items such as:
1) An Art Collectible(s) with 1 in 5 chances of getting a Premier
2) A Pro or Ultimate Lifetime HyFi Membership - 1 in 5 chances of getting an Ultimate Lifetime Membership and 4 in 5 chances of getting a 2-year Pro Membership;
3) Gift Vouchers, to be used in the marketplaces or subsequent HyFi NFT Vault purchases;
4) HyFi Tokens to be used for further purchases of HyFi NFT Vaults, membership items and in the marketplaces; and
5) In 200 out of 100,000 Vaults a real physical .9999 Gold 5 oz.
*Art Assets/ Collectibles/ Art Items. (The inclusion of the Art assets should qualify the Vault to be listed on various Art focused NFT marketplaces such as OpenSea)
We intend to sell the HyFi NFT Vaults to individuals and businesses. Various businesses have approached the Company to use our HyFi Vaults and put some of their gaming, collectibles and promotional items in the HyFi NFT Vault.
We expect variances in the types of assets/ items being offered in the potential various HyFi NFT Vault Programs. There can be no assurance any further Vault programs will be launched after the first HyFi NFT Vault.
HyFi also intends to license its Vault Program technology to companies for promoting their own brands, products and services.
Proposed Membership Plan
We have finalized a Membership Program which will enable members to earn money
from referrals of companies and individuals to our
On
On
Going Concern
Our unaudited financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The unaudited financial statements do not include any adjustments that might result from the outcome of this uncertainty. We have a minimal operating history and minimal revenues or earnings from operations. We have no significant assets or financial resources. We will, in all likelihood, sustain operating expenses without corresponding revenues for the immediate future.
There is substantial doubt that we can continue as an ongoing business for the next 12 months unless we obtain additional capital to pay our expenses. We must raise cash from sources other than revenues generated, such as from the proceeds of loans, public or private equity sales, and/or advances from related parties. There is no guarantee that any loans will be received, any equity sales will be made, and/or any related parties will advance funds to us or that such funds will be available on favorable terms.
9 Plan of Operation
We were dormant from
We have initiated our HyFi Vault Program and launched our Pre-Sale phase on
We continue to work on the regulatory and technology needs for our full launch
of the DeFi Marketplaces. These include multiple Attorney Opinion Letters, which
have now been accepted for
The Company has been in discussions with various companies in energy and
agriculture who are interested in listing their NFTs on the ILO, BLO and NFT
enabled
There can be no assurance that any of the above market segments will materialize, produce customers or revenue, or that the Company will achieve profitability.
Limited Operating History; Need for
We cannot guarantee we will be successful in our business operations. We have generated limited revenue since inception. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to the price and cost increases in supplies and services.
If we are unable to meet our needs for cash from either our operations, or possible alternative sources, then we may be unable to continue, develop, or expand our operations.
Liquidity and Capital Resources
For the three months ended
For the three months ended May 31, 2022 2021 Revenue $ 246,700 $ - Operating expenses Selling, general and administrative expenses 212,443 8,081 Total operating expenses 212,443 8,081 Income (loss) from operations 34,257 (8,081 ) Other expenses Interest expense (11,248 ) (11,247 ) Interest expense -related party (36,147 ) (21,189 ) Total other expenses (47,395 ) (32,436 ) Net loss $ (13,138 ) $ (40,517 )
For the six months ended
For the six months ended May 31, 2022 2021 Revenue$ 446,700 $ - Operating expenses Selling, general and administrative expenses 363,868 8,081 Total operating expenses 363,858 8,081 Loss from operations (82,832 ) (8,081 ) Other expenses Interest expense (22,495 ) (11,247 ) Interest expense -related party (72,295 ) (21,189 ) Total other expenses (94,790 ) (32,436 ) Net loss$ (11,958 ) $ (32,436 )
On
Pursuant to the terms of the APA, the Company agreed to acquire from the Sellers, and the Sellers agreed to sell to the Company, certain assets comprised of the goodwill, intellectual property, business proprietary know-how and trade secrets, intangible property and other assets of Sellers' business with respect to HyFi, and any and all rights of Sellers in and to the foregoing (the "Assets"), and certain governance/utility virtual tokens (collectively, the "HyFi Tokens") expected to be used as a means of payment on the HyFi Platform, as hereinafter defined (the "Acquisition"). The "HyFi Platform" refers to the HyFi Decentralized Finance ("DeFi") exchange marketplace using blockchain platform technology. The DeFi principles are based on an ecosystem of financial services utilizing tokenization and non-fungible tokens ("NFTs") in connection with qualifying products, licenses and projects.
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In addition, on the Closing Date, the Company acquired 400,000,000 HyFi Tokens
and a cash consideration of
Also, on the Closing Date, the Company and
Two customers, including one related party, account for 100% of sales during the
three months ended
For accounting purposes and for purposes of the financial statements reported
herein, the Company considers all highly liquid temporary cash investments with
an original maturity of three months or less to be cash equivalents. On
There is no historical financial information about us upon which to base an
evaluation of our performance. We have generated revenues from operations of
We have no assurance that future financing will be available to us on acceptable terms, or at all. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders. If we are unable to raise additional capital to maintain our operations in the future, we may be unable to carry out our full business plan or we may be forced to cease operations.
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations
are based upon our financial statements, which have been prepared in accordance
with the accounting principles generally accepted in
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
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Recent Accounting Pronouncements
Our company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
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