RENEWABLE INNOVATIONS, INC. 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; demographic changes; our ability to sustain, manage, or
forecast growth; our ability to successfully make and integrate acquisitions;
raw material costs and availability; 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; changes in business strategy or development plans; business
disruptions; the ability to attract and retain qualified personnel; the ability
to protect technology; and other risks that might be detailed from time to time
in our filings with the
Although the forward-looking statements in this Quarterly 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 and in our other reports 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.
The following discussion and analysis of financial condition and results of
operations of the Company is based upon, and should be read in conjunction with,
its unaudited financial statements and related notes elsewhere in this Quarterly
Report on Form 10-Q, which have been prepared in accordance with accounting
principles generally accepted in
Overview
We were incorporated in the
We are engaged in the business of providing digital media and marketing services for the real estate industry. We currently generate revenue from service fees (video creation and production) and referral fees from our LoseTheAgent.com website. At the core of our programs is our proprietary video creation technology which allows for an automated conversion of data (text, photos and video slices) to a video with voice over and music. We provide video search, storage and marketing capabilities on multiple platform dynamics for web and mobile. Once a home, personal or community video is created using our proprietary technology, it can be published to social media, email or distributed to multiple real estate websites. In addition, we own and operate the web site LoseTheAgent.com, which is a site dedicated to peer-to-peer real estate transactions between home sellers and buyers - the so called For Sale By Owner segment. We currently have approximately 100,000 home listings across all 50 states. We monetize the website by charging fees for both listing a home for sale and picking up possible buyers' messages of interest. We also plan on generating additional revenues by monetizing seller/buyer data with targeted, interested parties. The web site is fully functional and is being marketed via various online platforms.
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Results of Operations for the Three Months Ended
Revenues
Total revenue for the three months ended
Cost of Revenue
Cost of revenues totaled
Operating Expenses
Our operating expenses, of which 99.9% consists of general and administrative
expenses plus
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General and administrative expenses amounted to
Three months Ended
August 31,
Expense 2022 2021 Increase/(Decrease)
Professional Fees $ 7,061 $ 24,580 $ (17,519 )
Interest - 1,023 (1,023 )
Stock-based compensation 208,000 - 208,000
Dues and Subscriptions 507 798 (291 )
Other 5,382 408 4,974
Total $ 220,950 $ 26,809 $ 194,141
Net Income/Loss
We had net loss of
Discussion of Results for Nine Month Period Ended
Revenues
Total revenue for the nine months ended
Cost of Revenue
Cost of revenues totaled
Operating Expenses
Our operating expenses, which include salaries and benefits, marketing, and
general and administrative expenses, increased 824% to
General and administrative expenses amounted to
Nine Months Ended
August 31,
Expense 2022 2021 Increase/(Decrease)
Professional Fees and legal fees $ 55,231 $ 38,713 $ 16,518
Interest - 2,242 (2,242 )
Stock-based compensation 485,317 - 485,317
Dues & subscriptions 1,661 2,451 (790 )
Other 11,975 1,582 10,393
Total $ 554,184 $ 44,988 $ 509,196
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Other Income (Expenses)
Our other income, net, decreased by
Nine Months Ended
August 31,
2022 2021 Increase/(Decrease)
Interest Expense $ (7,258 ) $ - $ (7,258 )
Loss on extinguishment of debt (72,198 ) - (72,198 )
Gain of forgiveness of PPP #1 $ 15,077 $ 13,080 $ 1,997
Total $ (64,379 ) $ 13,080 $ (77,459 )
Net Income/Loss
We had a net loss of
Liquidity and Capital Resources; Anticipated Financing Needs
On
Net cash used in operating activities was
Net cash provided by investing activities was
Net cash provided by financing activities was
Our ability to continue as a going concern on a long-term basis is dependent upon our ability to generate sufficient cash flow from operations to meet our obligations on a timely basis, to obtain additional financing and ultimately attain profitability.
Based solely on our own internal estimates without the benefit of any independent third-party evaluation, we anticipate that our cash and cash flow will not be sufficient to satisfy our cash requirements over the next twelve months and we will likely require significant external financing. The magnitude of the additional financing and its timing is not yet precisely known. In the event that we are able to secure a sufficient amount of additional financing on a timely basis and on generous terms, it may include the issuance of equity or debt securities, obtaining credit facilities, or entering into other financing arrangements on such terms as then existing market conditions require. In the event that we were to issue additional equity or debt securities, stockholders may experience significant dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. And in the case of any issuance of one or more debt securities, the debt covenants may restrict our operating ability and our ability to raise additional financing from debt. Our ability to obtain additional capital on terms that are reasonable cannot be assured. We may be forced to obtain additional capital on terms that could limit our long-term ability to remain in business or otherwise materially restrict our operations.
23 Critical Accounting Policies
In
In the ordinary course of business, we have made a number of estimates and
assumptions in preparing our financial statements in conformity with accounting
principles generally accepted in
We consider the following accounting policies to be those most important to the portrayal of our results of operations and financial condition:
Revenue Recognition.
In
Revenue from Contracts with Customers
Revenue is recognized when all of the following criteria are met:
? Identification of the contract, or contracts, with a customer - A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party's rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and the parties are committed to perform, and (iii) we determine that collection of substantially all consideration to which it will be entitled in exchange for goods or services that will be transferred is probable based on the customer's intent and ability to pay the promised consideration.
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?Identification of the performance obligations in the contract - Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised goods or services, we apply judgment to determine whether promised goods or services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised goods or services are accounted for as a combined performance obligation.
? Determination of the transaction price - The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the customer adjusted for estimated variable consideration, if any. We typically estimate the transaction price impact of discounts offered to the customers for early payments on receivables or rebates based on channel partner sales achievements. Constraints are applied when estimating variable considerations based on historical experience where applicable.
?Allocation of the transaction price to the performance obligations in the contract - If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative SSP basis. Determination of SSP requires judgment. We determine standalone selling price taking into account available information such as historical selling prices of the performance obligation, geographic location, overall strategic pricing objective, market conditions and internally approved pricing guidelines related to the performance obligations.
?Recognition of revenue when, or as, we satisfy performance obligation - We satisfy performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized at or over the time the related performance obligation is satisfied by transferring a promised good or service to a customer.
Income Taxes.
The Company accounts for income taxes using an asset and liability approach to
financial accounting and reporting for income taxes. Accordingly, deferred tax
assets and liabilities arise from the difference between the tax basis of an
asset or liability and its reported amount in the financial statements. Deferred
tax amounts are determined using the tax rates expected to be in effect when the
taxes will actually be paid or refunds received, as provided under currently
enacted tax law. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized. Income tax expense or
benefit is the tax payable or refundable, respectively, for the period plus or
minus the change in deferred tax assets and liabilities during the period. The
Company has recorded a full valuation allowance for its net deferred tax assets
as of
The Company will recognize a financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant tax authority.
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The Company believes its income tax filing positions and deductions will be
sustained upon examination and, accordingly, no reserves, or related accruals
for interest and penalties has been recorded at
Share-Based Compensation
The Company accounts for stock incentive plans by measurement and recognition of
compensation expense for all stock-based awards based on estimated fair values,
net of estimated forfeitures. Share-based compensation expense includes
compensation cost for restricted stock awards, stock options and warrants as
applicable. The Company uses the Black-Scholes option-pricing model to determine
the fair value of options granted as of the grant date. There was
Seasonality of Business
The residential real estate market has traditionally experienced seasonality, with a peak in the spring and summer seasons and a decrease in activity during the fall and winter seasons. Revenues in each quarter can be significantly affected by activity during the prior quarter, given the time lag between contract execution and closing. A typical real estate transaction has a 30-day lag between contract signing and closing of the transaction.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
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