Cautionary Statement about Forward-Looking Statements
This Form 10-Q contains forward-looking statements regarding future events and
the Company's future results that are subject to the safe harbors created under
the Securities Act of 1933 (the "Securities Act") and the Securities Exchange
Act of 1934 (the "Exchange Act"). These statements are based on current
expectations, estimates, forecasts, and projections about the industry in which
the Company operates and the beliefs and assumptions of the Company's
management. Words such as "hopes," "expects," "anticipates," "targets," "goals,"
"projects," "intends," "plans," "believes," "seeks," "estimates," "continues,"
"may," variations of such words, and similar expressions are intended to
identify such forward-looking statements. In addition, any statements that refer
to projections of the Company's future financial performance, and other
characterizations of future events or circumstances are forward-looking
statements.
The Company is under no duty to update any of these forward-looking statements
after the date of this report. You should not place undue reliance on these
forward-looking statements.
EXECUTIVE OVERVIEW
Virtual Interactive Technologies Corp. (OTCPINK: VRVR) ("VIT") or ("the
Company") is a next generation game and metaverse developer that creates
immersion experiences by harnessing the latest technologies, including
Blockchain and digital assets. The Company's newly launched brand, Extrosive, is
building a metaverse that replaces traditional boring financial experiences with
a new paradigm, "global Prosperity space" (gPs). This new asset class
dynamically augments global and local realities and builds communities of
aligned financial values, virtuous economies, and a trusted network. The result
would be a metaverse game for the glamourous world of Wall Street, High-Speed
trading involving community building, quantified self, and NFTs - a pure adrenal
rush! In addition, the Company continues to build on its successful catalog that
includes Carmageddon Max Damage, Carmageddon Crashers, Interplanetary: Enhanced
Edition, Catch & Release, and Worbitol. The Company also entered into a joint
development partnership with Duane Lee "Dog" Chapman, of the "Dog The Bounty
Hunter" fame, to develop and promote multiple games across several platforms.
For more information, please visit www.vrvrcorp.com.
Results of Operations
The following discussion involves the results of operations for the three months
ended December 31, 2022 and December 31, 2021.
For the Three Months Ended December 31, 2022 and 2021
Revenue increased from $30,392 for the three months ended December 31, 2021 to
$42,224 for the three months ended December 31, 2022. Revenue was derived from
royalty interests in five games, Carmageddon Max Damage, Carmageddon Crashers,
Catch & Release, Interplanetary: Enhanced Edition and Worbital.
Operating expense for the three months ended December 31, 2022 and 2021 was
$765,003 and $197,809, respectively. This increase was primarily due to
professional fees incurred through issuances of stock and warrants that were
associated with three vendor contracts.
Other income (expense) for the three months ended December 31, 2022 and 2021 was
($142,625) and ($118,635), respectively. This increase in expense was mainly due
to non-cash transactions associated with the amortization of debt discount in
the current period of $112,857 versus $96,063 for the three-month period ended
December 31, 2021. The Company incurred interest expense associated with
additional debt brought on in the second quarter of 2021. Interest expense
recorded for the three months ended December 31, 2022 and 2021 was $16,145 and
$7,495, respectively. Interest expense recorded for related parties for the
three months ended December 31, 2022 and 2021 was $13,971 and $15,152,
respectively.
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For the three months ended December 31, 2022 we recorded a net loss of $865,404.
For the three months ended December 31, 2021, we recorded a net loss of
$286,052. The increase in loss of $579,352 was mainly associated with additional
general and administrative expenses identified above, and debt discount
amortization and interest expense associated with our related party and
convertible notes payable.
Liquidity and Capital Resources
As of December 31, 2022, we had cash and cash equivalents of $8,860. As of
September 30, 2022, we had cash and cash equivalents of $36,378. Working capital
was 620,278 as of December 31, 2022 compared to $809,447 at September 30, 2022.
The decrease in working capital of $189,169 was primarily the result of vendor
contracts associated with stock and warrants issued for services. The respective
expense was recorded as a prepaid asset and amortized over the life of the
contract.
Cash Flows from Operating Activities:
Net cash used in operating activities for the three months ended December 31,
2022 and 2021 was $27,518 and $83,295, respectively. The change over the two
periods presented was $55,777.
Changes in operating activities for the three months ended December 31, 2022
included a decrease in accounts payable and accrued liabilities of $1,191 and
increases in interest receivable of $378, royalties receivable of $20,865,
interest payable, related party of $34,470, and interest payable of $16,145. The
Company also had non-cash expenses of $306,952 and $389,896 in amortization of
stock and warrants, respectively, issued for prepaid services, and debt discount
amortization of $112,857.
Changes in operating activities for the three months ended December 31, 2021
included increases in royalty receivable of $4,519, interest receivable of $454,
accounts payable and accrued liabilities of $1,486, interest payable, related
party of $15,152, and interest payable of $2,029. The Company also had non-cash
expenses of $93,000 in amortization of stock issued for prepaid services and
debt discount amortization of $96,063.
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