REGENERATIVE MEDICAL TECHNOLOGY GROUP INC. Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words "believes," "project," "expects," "anticipates," "estimates," "intends," "strategy," "plan," "may," "will," "would," "will be," "will continue," "will likely result," and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, cybersecurity, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further, information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with theSEC . Overview
We intend for this discussion to provide information that will assist in understanding our financial statements, the changes in certain key items in those financial statements, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements.
The Company was originally founded in 1999 asSpectrum Ventures LLC , a private company, registered inTacoma, WA , for the purpose of developing, marketing and selling voice over IP products and services. In 2002, the Company changed its name toNxtech Wireless Cable Systems, Inc. InAugust 2007 , the Company changed its name toOriens Travel & Hotel Management Corp. InNovember 2014 , the Company changed its name toPure Hospitality Solutions, Inc. During 2014, the Board of Directors of the Company deemed it in the best interests of the Company and its shareholders to switch directions and become involved in the business of numismatics, specifically the collection and ultimately the sale of coins, paper currency, bullion and medals.
Having locations inCosta Rica andFlorida for the purposes of conveniently shipping products, the Company has the ability to export its inventory of coins, paper currency, bullion and medals fromCosta Rica , to be sold in theU.S. and around the world. Likewise, the Company also imports such products back toCosta Rica , to be sold throughout the local markets. The Company adheres to strict processes related to acquisition and sale of its products. It begins by selecting the best inventory, be it a rare coin fromLatin America , or a banknote with an error fromthe United States . Inventory is carefully screened by management, is then sent to be graded by the proper grading authority. For all coins, medals and bullion, the Company's inventory is sent to theNumismatic Guaranty Company for authentication and grading. For all banknotes, the Company utilizes the services ofPaper Money Guaranty, LLC for authentication and grading, bothFlorida -based companies. Once graded, the inventory is sent to the Company'sFlorida -based location prior to being sent to one of the Company's many customers around the world. Page 24 of 36 We maintain an online store with eBay (www.mesocoins.com) and participate in live auctions with major companies such as Heritage Auctions, Stacks Bowers Auctions, Lyn Knight Auctions and Sedwick Coins for the sale of its coins, paper currency, bullion and medals. The Company also launched a new application technology available on theGoogle Play Store , as well as theApple App Store . The Application is a banknote scanner which instantly identifies key characteristics of a banknote. This includes the catalog reference number of the note, the value, which entity it was issued by, the country of origin and the printer that printed the note. A picture of each note from our database of more than 61,000 banknotes from a combined 750 countries and regions will also be included with the information. For the numismatic industry in particular, this application eliminates the need for reference books, as well as the hours of time it takes to reference all the information about banknotes. With a simple snap of a picture, information is provided to the end-user almost instantaneously.Meso continues to acquire rare inventory at market rates, from throughout theMeso Region (includingCentral America and theCaribbean ). The inventory is then sent for authentication and grading, followed by said items being sold throughoutMeso's sales outlets. This includes an eBay store with up to, but not limited to,$50,000 in items for sale at any one time. For some of the Company's rarer inventory, items are sent to major auction houses around the world for sale. Results of Operations
Results of Operations for the Three Months Ended
Below is a summary of the results of operations for the three months endedJune 30, 2021 and 2020. For the Three Months Ended June 30, 2021 2020 $ Change % Change Revenue$ 15,769 $ 28,787 $ (13,018 ) -45.22 % Cost of revenue 11,860 18,904 (7,044 ) -37.26 % Gross profit 3,909 9,883 (5,974 ) -60.45 % Operating expenses Advertising and marketing 144 38 106 278.95 % Professional fees 215,458 17,258 198,200 1148.45 % Officer compensation 19,099 201,852 (182,753 ) -90.54 % Depreciation expense 200 200 - 0.00 % Investor relations 17,574 743 16,831 2265.28 % General and administrative 5,945 2,585 3,360 129.98 % Total operating expenses 258,420 222,676 35,744 16.05 % Other income (expense) Interest expense (440,457 ) (473,867 ) 33,410 -7.05 % Loss on conversion of debt - (3,378 ) 3,378 -100.00 % Derivative financial instruments - (2,700,486 ) 2,700,486 -100.00 % Other expense (231,109 ) - (231,109 ) 0.00 % Net income (loss)$ (926,077 ) $ (3,390,524 ) $ 2,464,447 -72.69 %
Revenue is affected by the grade assigned to each coin or banknote. Once an item has been acquired it is sent for grading and authentication. Grading is the process of determining the grade or condition of the coin and banknote, which is the key factor in determining its value. Management carefully evaluates the grades assigned to each piece of merchandise and then decides which items will be sold through its eBay store, which items will be sold at live auction and which items will be traded for other items. Grade assigned will ultimately determine the sales price of the coin or banknote. As ofJune 30, 2021 , the Company is working on an inventory tracking system by serial number. Until such time as an inventory tracking system exists, the inventory costs cannot be properly confirmed and written-off to cost of revenue along with the cost of grading. Page 25 of 36 Gross profit
Revenue from the sale of coins, metals and paper money for the three months endedJune 30, 2021 was$15,769 , compared to$28,787 of revenue for the same period in 2020. As a result of the write-off of inventory the company generated a 25% gross profit of$3,909 for the three months endedJune 30, 2021 compared to a 34% gross profit of 9,883 for the same period in 2020. The key reason for the decrease in gross profit was a result of the amount of inventory written-off in 2021 vs 2020. Operating expenses Operating expenses increased by 16.05% in the amount of$35,744 for the three months endedJune 30, 2021 , compared to the same period in 2020. Listed below are the major changes to operating expenses:
Professional fees increased by
Officer compensation decreased by$182,753 for the three months endedJune 30, 2021 , compared to the same period in 2020, primarily due to the resignation ofMelvin Pereira as Chief Executive Officer, Chief Financial Officer, Secretary and Director ofMeso Numismatics Inc. in 2020 and the issuance of 50,000 shares of Preferred Series AA shares toDave Christensen in 2020. Other expense Other expense decreased by$2,506,165 for the three months endedJune 30, 2021 , compared to the same period in 2020, primarily as a result of the change in fair market value of the convertible notes in 2020 along with amortization of discounts offset by settlement of lawsuit in 2021. Net Loss
We recorded a net loss of
Results of Operations for the Six Months Ended
Below is a summary of the results of operations for the six months endedJune 30, 2021 and 2020. For the Six Months Ended June 30, 2021 2020 $ Change % Change Revenue$ 20,212 $ 40,107 $ (19,895 ) -49.60 % Cost of revenue 26,650 31,023 (4,373 ) -14.10 % Gross profit (6,438 ) 9,084 (15,522 ) -170.87 % Operating expenses Advertising and marketing 381 82 299 364.63 % Professional fees 329,245 29,987 299,258 997.96 % Officer compensation 34,099 247,336 (213,237 ) -86.21 % Depreciation expense 400 400 - 0.00 % Investor relations 20,472 4,243 16,229 382.49 % General and administrative 16,555 17,861 (1,306 ) -7.31 % Total operating expenses 401,152 299,909 101,243 33.76 % Other income (expense) Interest expense (759,685 ) (912,549 ) 152,864 -16.75 % Loss on conversion of debt - (7,629 ) 7,629 -100.00 %
Derivative financial instruments - (3,025,794 )
3,025,794 -100.00 % Other expense (231,109 ) - (231,109 ) 0.00 % Net income (loss)$ (1,398,384 ) $ (4,236,797 ) $ 2,838,413 -66.99 % Page 26 of 36
Revenue is affected by the grade assigned to each coin or banknote. Once an item has been acquired it is sent for grading and authentication. Grading is the process of determining the grade or condition of the coin and banknote, which is the key factor in determining its value. Management carefully evaluates the grades assigned to each piece of merchandise and then decides which items will be sold through its eBay store, which items will be sold at live auction and which items will be traded for other items. Grade assigned will ultimately determine the sales price of the coin or banknote. As ofJune 30, 2021 , the Company is working on an inventory tracking system by serial number. Until such time as an inventory tracking system exists, the inventory costs cannot be properly confirmed and written-off to cost of revenue along with the cost of grading. Gross profit Revenue from the sale of coins, metals and paper money for the six months endedJune 30, 2021 was$20,212 , compared to$40,107 of revenue for the same period in 2020. As a result of the write-off of inventory the company generated a 32% negative gross profit of$6,438 for the six months endedJune 30, 2021 compared to a 23% gross profit of 9,084 for the same period in 2020. The key reason for the decrease in gross profit was a result of the amount of inventory written-off in 2021 vs 2020. Operating expenses Operating expenses increased by 33.76% in the amount of$101,243 for the six months endedJune 30, 2021 , compared to the same period in 2020. Listed below are the major changes to operating expenses:
Professional fees increased by
Officer compensation decreased by$213,237 for the six months endedJune 30, 2021 , compared to the same period in 2020, primarily due to the resignation ofMelvin Pereira as Chief Executive Officer, Chief Financial Officer, Secretary and Director ofMeso Numismatics Inc. in 2020 and the issuance of 50,000 shares of Preferred Series AA shares toDave Christensen in 2020. Other expense Other expense decreased by$2,955,178 for the six months endedJune 30, 2021 , compared to the same period in 2020, primarily as a result of the change in fair market value of the convertible notes in 2020 along with amortization of discounts offset by settlement of lawsuit in 2021. Net Loss
We recorded a net loss of
Liquidity and Capital Resources
Since inception, the Company has financed its operations through private
placements and convertible notes. The following is a summary of the cash and
cash equivalents as of
March 31, December 31,
2021 2020 $ Change
% Change
Cash and cash equivalents
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