The following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes thereto and other financial information appearing elsewhere in this Annual Report. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report, particularly in the section titled "Risk Factors."





Results of Operations

Fiscal Year Ended June 30, 2022, Compared to Fiscal Year Ended June 30, 2021

Revenues and Costs of Revenues

Revenues for the years ended June 30, 2022, and 2021 were $78,407 and $47,172, respectively. Costs of revenues for the years ended June 30, 2022, and 2021 were $63,173 and $43,932, respectively. Our sales and gross profits principally increased as a result of higher margin convention services revenues of $67,056 for the year ended June 30, 2022, compared with $0 for the year ended June 30, 2021.





Operating Expenses

Operating expenses for the years ended June 30, 2022, and 2021 were $648,160 and $48,883, respectively.

Our operating expenses consisted of general and administrative costs and salaries and wages. The significant increase in operating expenses during the year ended June 30, 2022, compared to the year ended June 30, 2021, was primarily due to an increase in general and administrative costs of $335,065 and salaries and wages of $264,212 during the year ended June 30, 2022, compared to the year ended June 30, 2021.

General and Administrative Expenses

General and administrative costs for the years ended June 30, 2022, and 2021 were $383,948 and $48,476, respectively. The increase was due to significant legal and professional fees during the last half of the year ended June 30, 2022, that were principally related to funding raises, and exploring and hiring personnel as part of the transition from our Prior Business to our New Business.





Salaries and Wages

Salaries and wages of $264,212 were incurred during the year ended June 30, 2022, compared to $0 during the year ended June 30, 2021. The increase is due to the hiring of new executives and key personnel on June 16, 2022, as part of our transition from our Prior Business to our New Business.





Other Expenses

Other expenses for the years ended June 30, 2022, and 2021 were $830,150 and $5,995, respectively. The increase is primarily due to the recording of the $821,307 non-cash loss on the extinguishment of related party debt. The loss was recorded as part of a transaction where the noteholder Zixiao Chen, our former Chief Financial Officer, transferred her ownership in a $10,000 convertible note payable to another entity that is controlled by Bruce Cassidy, our former Chief Executive Officer through June 14, 2022, a member and Chairman of the Board. The Company and the new noteholder mutually agreed to allow the note to be converted into Series B preferred stock at the conversion price of $1.00 per share. The principal balance and accrued interest were converted into 11,693 shares of Series B preferred stock. The fair value of the stock was $833,000, and we recorded a loss on the extinguishment of debt of $821,307.





Net Loss

Our net loss for the years ended June 30, 2022, and 2021 was $1,463,076 and $51,638, respectively. The significant increase in the net loss is primarily related to the above-noted increase in legal and professional fees, compensation,

--------------------------------------------------------------------------------


                                       24

--------------------------------------------------------------------------------

and the non-cash loss from the extinguishment of related party debt, all related to our transition from our Prior Business to our New Business.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts payable and accrued expenditures, and capital expenditures, including the costs associated with internally developed software and attaining Gaming licenses.

As of June 30, 2022, and June 30, 2021, we had total current assets of $76,296, and $107,050, a working capital deficit of $537,113, and $4,277, respectively.

Net cash used in operating activities during the year ended June 30, 2022, was $280,596 compared to $10,182, for the year ended June 30, 2021.

The $270,414 increase in negative operating cash flow from operations during the year ended June 30, 2022, as compared to the year ended June 30, 2021, is principally the result of the $264,212 increase in salaries and wages and $328,006 in legal and professional fees associated with our hiring new employees, fundraising, and other legal and professional costs associated with our transition from our Prior Business to our New Business, offset by an increase in accrued salaries and wages of $213,166 and an increase in accounts payable of $127,572.

Net cash provided by financing activities during the year ended June 30, 2022, was $258,272 compared to $60,829 for the year ended June 30, 2021.

The $197,443 increase in net cash provided from financing activities during the year ended June 30, 2022, as compared to the year ended June 30, 2021, was principally the result of the receipt of $97,240 in net proceeds from the issuance of Series C preferred stock and $166,539 in proceeds from the issuance of common stock, all from related parties, during the year ended June 30, 2022. This compares to proceeds of $30,000 in notes payable from a related party, and $39,977 in proceeds from the issuance of common stock to a related party during the year ended June 30, 2021.

We were incorporated on April 16, 2020. Our operations from our Prior Business, to date, have been devoted primarily to startup, development activities, preparing our eCommerce site, establishing vendors for our products, collecting inventory, selling products, and other activities. As part of our transition to our New Business, on August 26, 2022, we entered into an Asset Purchase Agreement to purchase certain technology assets from ZenSports, Inc. We purchased the assets so we could offer gambling and entertainment opportunities through technology, principally the online gaming technology and use of the name ZenSports.

On September 12, 2022, we entered into an Asset Purchase Agreement with Excel Members, LLC ("Excel"), a company controlled by Bruce Cassidy, (our former Chief Executive Officer through June 14, 2022) a member and Chairman of the Board, to acquire certain assets from Excel. Excel acquired certain assets of Ultimate Gamer, LLC, a company that used to host eSports tournaments, through an assignment for the benefit of the creditor's court process.

On September 15, 2022, we entered into an agreement to assign all of our rights in our Prior Business, including certain assets and liabilities, to TopSight Corporation, a company owned by Zixiao Chen, our former Chief Financial Officer.

As of the filing date of this Annual Report, we have ceased all operations relating to our Prior Business and commenced executing our business plan for our New Business. Since our New Business has no history of generating revenues or operating successfully, we will be dependent upon, among other things, achieving a level of profitable operations and receiving additional cash infusions including securing additional lines of credit and raising additional capital through the placement of preferred and/or common stock in order to implement our business plan. Because of our limited operating history, it is difficult to predict our capital needs on a monthly, quarterly, or annual basis. We will have no capital available to us if we are unable to raise money through private equity offerings or find alternate forms of financing, which we do not have in place at this time.


--------------------------------------------------------------------------------
                                       25

--------------------------------------------------------------------------------

We expect our revenues to significantly decrease in the short term as we transition from our Prior Business to our New Business.

We expect to incur significant increases in operating costs as we incur the costs of transitioning from our Prior Business to our New Business and begin to execute our New Business operating plan. The expected significant increases in costs will include, but not be limited to, costs relating to obtaining licenses, technology development, sales and marketing, legal and professional.





Going Concern

Our consolidated financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the U.S. and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. We had an accumulated deficit of $1,522,307 as of June 30, 2022. We had a net loss of $1,463,076 and negative cash flows of $280,596 from operations for the year ended June 30, 2022. These conditions raise substantial doubt about our ability to continue as a going concern. Our independent auditors, in their report on our audited consolidated financial statements for the year ended June 30, 2022, expressed substantial doubt about our ability to continue as a going concern.

As of the filing date of this Annual Report, we have ceased all operations relating to our Prior Business and commenced executing our business plan for our New Business. Since our New Business has no history of generating revenues or operating successfully, we will be dependent upon, among other things, achieving a level of profitable operations and receiving additional cash infusions including securing additional lines of credit and raising additional capital through the placement of preferred and/or common stock in order to implement our business plan. There can be no assurance that we will be successful in order to continue as a going concern. We are funding our New Business operations by utilizing a related party demand line of credit, issuing preferred stock, and issuing common stock through private placements.

We cannot be certain that capital will be provided when it is required or in amounts sufficient to meet our operating requirements. Management believes the existing stockholders, the prospective new investors, and future sales will provide the additional cash needed to meet our obligations as they become due and will allow the development of our core business operations. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing. If adequate working capital is not available, we may not continue our operations.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset-carrying amounts or the amount and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Off-Balance Sheet Arrangements

As of June 30, 2022, and 2021, there were no off-balance sheet arrangements.

Emerging Growth Company Status

We qualify as an "emerging growth company" under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

·have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

·comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the consolidated financial statements (i.e., an auditor discussion and analysis);

·submit certain executive compensation matters to stockholder advisory votes, such as "say-on-pay" and "say-on-frequency;" and

--------------------------------------------------------------------------------


                                       26

--------------------------------------------------------------------------------

·disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation.

In addition, Section 107 of the JOBS Act also 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. In other words, an emerging growth company 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. Our consolidated financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We will remain an "emerging growth company" until the earliest of: (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1.07 billion; (ii) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter; (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period; or (iv) June 30, 2026. Even if we no longer qualify for the exemptions for an emerging growth company, we may still be, in certain circumstances, subject to scaled disclosure requirements as a smaller reporting company. For example, smaller reporting companies, like emerging growth companies, are not required to provide a compensation discussion and analysis under Item 402(b) of Regulation S-K or auditor attestation of internal controls over financial reporting.

© Edgar Online, source Glimpses