The following information should be read in conjunction with our financial
statements and related notes thereto included in Part I, Item 1, above.
Forward Looking Statements
Certain matters discussed herein are forward-looking statements. Such
forward-looking statements contained in this Form 10-Q involve risks and
uncertainties, including statements as to:
·our future strategic plans
·our future operating results;
·our business prospects;
·our contractual arrangements and relationships with third parties;
·the dependence of our future success on the general economy;
·our possible future financings; and
·the adequacy of our cash resources and working capital.
These forward-looking statements can generally be identified as such because the
context of the statement will include words such as we "believe," "anticipate,"
"expect," "estimate" or words of similar meaning. Similarly, statements that
describe our future plans, objectives or goals are also forward-looking
statements. Such forward-looking statements are subject to certain risks and
uncertainties which are described in close proximity to such statements and
which could cause actual results to differ materially from those anticipated.
Shareholders, potential investors and other readers are urged to consider these
factors in evaluating the forward-looking statements and are cautioned not to
place undue reliance on such forward-looking statements. The forward-looking
statements included herein are only made as of the date of this Form 10-Q, and
we undertake no obligation to publicly update such forward-looking statements to
reflect subsequent events or circumstances.
Executive Overview
Electronic Servitor Publication Network Inc. (formerly CannAssist International
Corp.) was incorporated on May 17, 2017 under the laws of the State of Delaware
to engage in any lawful corporate undertaking, including, but not limited to,
selected mergers and acquisitions. The Company has developed a technology
platform that is specifically designed for esports professionals and gamers. The
platform's functionality will allow its publishing users with omni-channel and
technology agnostic streaming functionality so that users can better engage with
their audiences on a global level. The platform will also provide in depth
engagement analytics. We believe that many esports professionals find it very
difficult to showcase their talents while managing the distribution aspects of
their careers. The platform will provide these individuals with an easy-to-use
solution. The platform will also have content that provides news and information
about esports.
The Company's corporate offices are located at 400 1ST Ave N., Ste. 100,
Minneapolis, MN 55401. The Company's email website is
www.electronicservitor.com. The Company's telephone number is (612) 414-7121.
The Company's common stock trades on the OTCQB Venture Market under the stock
ticker symbol XESP.
On July 1, 2021, Mark Palumbo, a former officer and director of the Company, and
Forty 7 Select Holdings LLC, an entity controlled by Greg Shockey (who was an
existing shareholder of the Company), entered into an agreement pursuant to
which Mark Palumbo transferred all of his 1,000 shares of Series A Preferred
Stock (representing 100% of the Company's issued and outstanding Series A
Preferred Stock), of the Company to Forty 7 Select Holdings LLC in a private
transaction. The Series A Preferred Stock provides the holder thereof the right
to vote 60% of the Company's voting shares on any and all shareholder matters
and thereby constituted a change of control of the Company. Further, Mark
Palumbo contributed 7,500,000 shares of common stock held by him to the treasury
of the Company for cancellation at no cost (the "Contribution").
12
On July 23, 2021, the Company entered into a Technology License Agreement with
Phitech Management, LLC, an entity controlled by Peter Hager ("Licensor"),
whereby, at Closing, the Company shall be granted a license (the "License") to
use, market, promote and distribute certain technology related to Electronic
Sports Gaming, related patent applications, related trade-secrets and associated
knowhow, including methods, techniques, specifications, procedures, information,
systems, knowledge and business processes required to practice and carry on
business in the field of data collection, security and management (the
"Technology"). The initial term of the License is 10-years (the "Initial Term")
and shall automatically be renewed for successive 1-year terms (each, a "Renewal
Term") unless the Company elects to terminate the License by giving 30 days'
written notice prior to commencement of a Renewal Term. In exchange for the
License of the Technology, the Company shall issue to the Licensor 10,000,000
restricted shares of its common stock (which is an amount equal to $2,500,000
divided by $0.25, which was the closing market price of the Company's common
stock on the trading day prior to the effective date of the License Agreement).
On July 23, 2021, the Company and Mark Palumbo entered into an agreement (the
"Spin-Off Agreement") whereby, at the Closing, the Company shall transfer 100%
of the issued and outstanding membership units of Xceptor LLC, an entity that
was a wholly-owned subsidiary of the Company, to Mark Palumbo (along with the
assets and liabilities associated with the prior business) for nominal
consideration as a condition of the Change-in-Control (the "Spin-Off").
Furthermore, at the Closing, that certain Technology License Agreement entered
into by and between the Company and Mark Palumbo dated April 29, 2019 (the
"Palumbo License Agreement") shall be terminated and the Company shall assign
all rights to the underlying Intellectual Property (as defined in the Palumbo
License Agreement) to Mark Palumbo.
On September 28, 2021, the Certificate of Incorporation of the Company was
amended to effect a change in the Company's name from "CannAssist International
Corp." to "The Electronic Servitor Publication Network, Inc." (the "Name
Change").
On October 9, 2021, the Closing of the Technology License Agreement occurred
whereby the Company received the License to the Technology and the Licensor
shall be 10,000,000 restricted shares of the Company's common stock, at a cost
basis of $0.25 per share.
On October 9, 2021, the Closing of the Spin-Off Agreement occurred whereby 100%
of the issued and outstanding membership units of Xceptor LLC was transferred to
Mark Palumbo (along with the assets and liabilities associated with the prior
business) in exchange for nominal consideration and the Palumbo License
Agreement was terminated.
Effective October 9, 2021, as a result of the transactions described above, the
business of the Company changed to focus on Electronic Sports Gaming technology
and the development of related infrastructure, specifically the development and
commercialization of a technology platform specifically designed for the
Electronic Sports and Electronic Gaming markets. The platform will provide an
omni-channel publishing tool, with talent identity protection and monetization
tools provided in line with interaction and media creation services. Further
publication and monetization products and services will be developed and
acquired to support these efforts.
The Company anticipates that it would need approximately $1,500,000 over the
next 12 months to continue as a going concern, satisfy its capital commitments
and continue its operations in accordance with its current business plan. In
addition to revenues generated from sales, the Chief Executive Officer and
several shareholders may fund the Company's operations, if needed, during the
next 12 months or until the Company can generate an ongoing source of capital
sufficient to independently continue its operations.
For the period ended December 31, 2021, the Company's independent auditors
issued a report raising substantial doubt about the Company's ability to
continue as a going concern. The continuation of the Company as a going concern
is dependent upon financial support from its principal stockholders, its ability
to obtain necessary equity financing, or its ability to sell its services to
generate consistent profitability.
Results of Operation for the Three Months Ended March 31, 2021 and 2020
For the three months ended March 31, 2022, the Company had revenues of $0. In
comparison, for the three months ended March 31, 2021, all of revenue and cost
of revenue have been included in the loss from discontinued operations (refer to
Note 7).
Operating expenses were $124,094 for the three months ended March 31, 2022.
Operating expenses include $1,659 of general and administrative expense, $25,000
of professional fees, and $97,435 of non-cash stock-based compensation expense
for the issuance of warrants. In comparison, for the three months ended March
31, 2021, all operating expense have been included in the loss from discontinued
operations (refer to Note 7).
For the three months ended March 31, 2022, the Company posted a net loss of
$124,094, compared to a loss of $72,758 from discontinued operations for three
months ended March 31, 2021.
During the three months ended March 31, 2022, the Company used $15,042 of cash
in operating activities and generated $19,643 in cash from financing activities.
The Company did not use or generate any cash in investing activities.
13
Liquidity and Capital Resources
The accompanying unaudited condensed financial statements have been prepared on
a going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company has
generated revenues of $0 during the three months ended March 31, 2022 and had a
net loss of $124,094 for the three months ended March 31, 2022. The Company has
an accumulated deficit of $6,039,326 as of March 31, 2022. The Company requires
capital for its contemplated operational and marketing activities. The
obtainment of additional financing, through an additional capital raise, the
successful development of the Company's contemplated plan of operations, and its
transition to the attainment of continued profitable operations are necessary
for the Company to continue operations.
The Company used $15,042 of cash from operations for the three months ended
March 31, 2022. Net cash provided by financing activities for the three months
ended March 31, 2022 was $19,643.
As of March 31, 2022, the Company had $4,601 in cash.
Critical Accounting Estimates and Policies
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities of the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Note 2 to the Financial Statements describes the
significant accounting policies and methods used in the preparation of the
Financial Statements. Estimates are used for, but not limited to, contingencies
and taxes. Actual results could differ materially from those estimates. The
following critical accounting policies are impacted significantly by judgments,
assumptions, and estimates used in the preparation of the Financial Statements.
We are subject to various loss contingencies arising in the ordinary course of
business. We consider the likelihood of loss or impairment of an asset or the
incurrence of a liability, as well as our ability to reasonably estimate the
amount of loss in determining loss contingencies. An estimated loss contingency
is accrued when management concludes that it is probable that an asset has been
impaired, or a liability has been incurred and the amount of the loss can be
reasonably estimated. We regularly evaluate current information available to us
to determine whether such accruals should be adjusted.
Off-Balance Sheet Arrangements
We have not entered into 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 and would be considered
material to investors.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in
effect. These pronouncements did not have any material impact on the financial
statements unless otherwise disclosed, and the Company 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.
© Edgar Online, source Glimpses
ELECTRONIC SERVITOR PUBLICATION NETWORK, INC. 
