The following discussion of our financial condition and results of operations
should be read in conjunction with our financial statements and the related
notes, and other financial information included in this Form 10-Q.
Our Management's Discussion and Analysis contains not only statements that are
historical facts, but also statements that are forward-looking. Forward-looking
statements are, by their very nature, uncertain and risky. These risks and
uncertainties include international, national, and local general economic and
market conditions; our ability to sustain, manage, or forecast growth; our
ability to successfully make and integrate acquisitions; new product development
and introduction; existing government regulations and changes in, or the failure
to comply with, government regulations; adverse publicity; competition; the loss
of significant customers or suppliers; fluctuations and difficulty in
forecasting operating results; change in business strategy or development plans;
business disruptions; the ability to attract and retain qualified personnel; the
ability to protect technology; the risk of foreign currency exchange rate; and
other risks that might be detailed from time to time in our filings with the
Securities and Exchange Commission.
Although the forward-looking statements in this Report reflect the good faith
judgment of our management, such statements can only be based on facts and
factors currently known by them. Consequently, and because forward-looking
statements are inherently subject to risks and uncertainties, the actual results
and outcomes may differ materially from the results and outcomes discussed in
the forward-looking statements. You are urged to carefully review and consider
the various disclosures made by us in this report as we attempt to advise
interested parties of the risks and factors that may affect our business,
financial condition, and results of operations and prospects.
Overview
The address of our principal executive office is located at 1440 NW 1st Court,
Boca Raton, FL 33432. Our telephone number is (561) 757-3585. Our company was
incorporated in the State of Nevada on December 5, 2003 under the name Computer
Maid, Inc. Our company was inactive until February 2006, when we changed our
name to Rose Explorations Inc. and became engaged in the exploration of mining
properties.
On March 4, 2008, our company completed a merger with our wholly-owned
subsidiary, SilverStar Resources, Inc., which was incorporated solely to effect
the name change of our company to SilverStar Resources, Inc.
On March 4, 2008, we affected a 3 for 1 forward stock split of our authorized,
issued and outstanding common stock. As a result, our authorized capital
increased from 75,000,000 shares of common stock with a par value of $0.001 to
225,000,000 shares of common stock with a par value of $0.001.
On April 13, 2011, we incorporated a wholly owned subsidiary, Silverstar Mining
(Canada) Inc., under the federal laws of Canada. The subsidiary's main purpose
is to hold title to mineral property rights situated in Canada as the laws of
that country require that only local entities can hold title to mineral property
rights situated within its borders.
Effective September 26, 2011, we affected a reverse split our common stock on a
1,000 for 1 basis. As a result of the foregoing, we reduced the number of
authorized shares of our common stock from 225,000,000 to 225,000.
On February 29, 2012, we filed a Certificate of Amendment to our company's
Articles of Incorporation with the Nevada Secretary of State increasing the
number of authorized shares from 225,000 to 225,000,000 shares of common stock
$0.001 par value.
On July 22, 2013 we entered into settlement agreements with four debt holders of
our company pursuant to which we restructured outstanding demand loans payable
in the aggregate amount of $175,028 (inclusive of accrued interest) as
convertible debentures.
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On February 15, 2013, we closed a Share Exchange Agreement pursuant to which we
intended to acquire a wholly owned subsidiary, Arriba Resources Inc. However,
effective November 13, 2013 our Board of Directors approved the cancellation and
reversal of the Share Exchange Agreement due to a failure of consideration on
the part of the seller. As a result of the cancellation and reversal of the
Share Exchange Agreement, 2,139,926 shares of our common stock and warrants to
acquire 2,078,477 shares of our common stock which were previously authorized
(but not issued from treasury) have been cancelled with immediate effect.
Consequently, the change of control announced in our current report on Form 8-K
filed on May 21, 2013 has been reversed.
On January 23, 2015 the board of directors with the consent of a majority of its
shareholders approved amended articles of incorporation to include a change of
name to Silverstar Resources, Inc. and a reverse split of its common stock
resulting in shareholders receiving one share for every five shares (5 to 1)
they hold as of record of that date. In addition, the amendment set the
authorized shares of common stock at 220,000,000 and preferred stock at
5,000,000 shares both at a par value of $0.001.
On March 10, 2015 the Company formed 1030029 Ltd, an Alberta numbered company as
a wholly owned subsidiary to meet the requirements of holding working interest
of Alberta producing oil and gas properties
On June 23, 2016, the Company's Board of Directors approved of a change of name
from Silverstar Resources, Inc. to Creative Waste Solutions Inc.
Results of Operations
The following summary of our results of operations should be read in conjunction
with our condensed consolidated financial statements for the three months ended
December 31, 2019 and 2018, which are included herein.
Sales
Sales for the three months ended December 31, 2019 were $5,451 as compared to
$78,119 for the same period in 2018. The decrease is due to the Company
conducting limited operations primarily due to a lack of capital that precluded
the completion of structural repairs, mandated by our landlord, to the interior
of our operations facility.
Cost of Goods Sold
Cost of goods sold for the three months ended December 31, 2019 were $5,342 as
compared to $48,011 for the same period in 2018. The decrease in cost of goods
sold is primarily due to the Company conducting limited operations due to a lack
of capital that precluded the completion of structural repairs, mandated by our
landlord, to the interior of our operations facility.
Operating Expenses
Operating expenses for the three months ended December 31, 2019 were $38,627 as
compared to $55,596 in operating expenses for the three months ended December
31, 2018, a decrease of $16,969. The decrease is a result of reduced operations
due to a lack of capital.
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Net Income
Our net income for the three months ended December 31, 2019 and 2018 was $26,715
and $22,152, respectively. The increase is primarily due to the $123,693 gain on
derivative liability in the 2019 period whereas the derivative gain in the 2018
period was 52,166. This was offset by an increase of $53,934 in interest expense
due to the issuance of convertible debt and an increase in loss from operations
of $13,030 due to the Company conducting limited operations due to a lack of
capital.
Liquidity and Capital Resources
At December 31, 2019 we had no cash as compared to $393 in cash at September 30,
2019. The decrease in cash of $393 is due to net cash used in operating
activities of $41,945 offset by cash provided by financing activities of $41,552
for the three months ended December 31, 2019. Our accounts payable and accrued
expenses at December 31, 2019 were $174,182 and $176,564 as of September 30,
2019. The $2,382 decrease in accounts payable and accrued expenses is due to an
increase in accrued interest of $5,546 due to more convertible debt outstanding
offset by to a decrease of $8,412 in accrued expenses due to the payment of an
accrued financing fee of $6,500 and accrued rent of $1,912. On December 31, 2019
and September 30, 2019 we had convertible debentures and notes payable of
$554,396 outstanding, due to related parties. We had $139,173 and $97,621,
respectively, in advances from related parties at December 31, 2019 and
September 30, 2019. The increase of $41,552 in advances from related parties is
due to advances made by a shareholder of the Company. Our derivative liability
was $86,643 as of December 31, 2019 and $210,336 as of September 30, 2019. The
decrease in derivative liability of $123,693 is primarily due to a decrease in
the price of the Company's stock, $0.02 at December 31, 2019 and $0.05 at
September 30, 2019. Our total liabilities were $1,166,139 on December 31, 2019
as compared to $1,197,747 on September 30, 2019. The details of the decrease in
total liabilities of $31,608 is disclosed in the preceding sentences. We have a
working capital deficit of $1,166,139 as of December 31, 2019 as compared to our
working capital deficit of $1,197,747 as of September 30, 2019. The decrease in
working capital deficit of $31,608 is primarily due to a decrease in derivative
liability of $123,693 for the reason referred to above offset by the $41,552
increase in advances from related parties and an increase of $52,915 in
convertible debentures attributable to amortization on note payable discount.
Working Capital
We did not have any current assets as of December 31, 2019, our current assets
as of September 30, 2019 totaled $393 which was comprised of cash. The decrease
in current assets is explained in the previous paragraph.
Our current liabilities as of December 31, 2019 totaled $1,166,139 as compared
to total current liabilities of $1,197,747 as of September 30, 2019. The details
of the decrease in current liabilities is explained in the previous paragraph.
Cash Flows
Operating Activities
Net cash used in operating activities was $41,945 for the three months ended
December 31, 2019 compared to net cash used by operating activities of $30,077
for the three months ended December 31, 2018. The increase in net cash used in
operating activities of $11,868 was primarily due to an increase in net loss
from operations of $13,030.
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Investing Activities
There was no cash used in investing activities for the three months ended
December 31, 2019 and December 31, 2018.
Financing Activities
Net cash provided by financing activities for the three months ended December
31, 2019 was $41,552 derived from related party advances. In the 2018 period the
issuance of convertible debentures raised $25,000 and related party advances
were $2,800.
Income & Operation Taxes
We are subject to income taxes in the U.S.
We paid no income taxes in USA for the three months ended December 31, 2019 and
2018 due to the Company's net operating tax loss in the USA.
Cash Requirements
For the 12 months ended December 31, 2020 we required additional funds of
approximately $172,000 to fund our budgeted expenses as follows: Rent $110,000,
office administration and other $30,000, contract labor $18,000, management fees
$6,000, and repairs and maintenance of $8,000. These funds were primarily raised
from advances received from a shareholder and an entity owned by said
shareholder. There is still no assurance that we will be able to maintain
operations at a level sufficient for investors to obtain returns on their
investments in our common stock. Further, we may continue to be unprofitable.
Off-Balance Sheet Arrangements
We currently have no off-balance sheet arrangements.
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