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Fiscal Year 2023
We had $45,000 in cash and our working capital deficiency amounted to approximately $6.5 million at August 31, 2023.
During fiscal 2023, we used cash in our operating activities amounting to $437,000. Our cash used in operating activities was comprised of our net loss of $713,000 adjusted primarily for the following:
Increase in accounts payable, accrued expenses, accrued interest, and accrued compensation, of $245,000, resulting from a short fall in liquidity and capital resources.
We generated cash from financing activities of $471,000 which primarily consists of the proceeds from the issuance of loans payable.
SALES $309,644
COST OF SALES $260,774
GROSS PROFIT $48,870
COSTS AND EXPENSES
Sales, general and administrative $463,694
OPERATING GAIN (LOSS) (414,824)
OTHER (INCOME) EXPENSE
Interest expense $313,235
Other income (46,255)
Loss (gain) on extinguishment of debt $73,349
Change in fair value of derivative liability (42,070)
TOTAL OTHER EXPENSE $298,259
The Company has outstanding loans and convertible notes payable aggregating $3.0 million at August 31, 2023 and doesn’t have sufficient cash on hand to satisfy such obligations.
Total current assets 65,730
Accumulated deficit (17,136,394)
2023 Loans payable $2,505,588
2024 $2,478,291
2025 $11,948
2026 $12,708
2027 $2,641
Total Loans Payable $2,505,588
At August 31, 2023, and August 31, 2022 convertible debentures consisted of the following:
Convertible notes payable $517,242
Officers loans payable $53,893
The convertible debentures matured in 2015, and bear interest at ranges between 6% and 15%. The convertible debentures are convertible at ratios varying between 45% and 50% of the closing price at the date of conversion through, at its most favorable terms for the holders, the average of the three lowest closing bids for a period of 5-30 days prior to conversion.
(1) For the fiscal year ending August 31, 2023, Mr. James earned $ 208,572 of which $150,941 has been paid to Reggie James. $54,000 remains unpaid.
(2) For the fiscal year ending August 31, 2022, Mr. James earned $ 208,572 of which $154,573 has been paid to Reggie James. $54,000 remains unpaid.
(3) For the fiscal years ended August 31, 2023, and 2022, Ms. Perry earned $150,000 each year of which $0 has been paid, $300,000 remains unpaid.
The Company owes $1,313,536 and $1,377,136 as of August 31, 2023 and 2022, respectively, in accrued compensation and expenses to certain directors and consultants.
The Company successfully reached an agreement with a holder of convertible debentures aggregating $76,216 in principal and interest and derivative liabilities in consideration of 7,500,000 shares of the Company’s common stock, which generated a loss on extinguishment of debt of $88,784 during February 2023.
The Company successfully reached an agreement with a holder of convertible debentures aggregating $85,515 in principal and interest and derivative liabilities in consideration of 30,000,000 shares of the Company’s common stock, which generated a loss on extinguishment of debt of $82,545 during March 2022.
The Company issued 30,000,000 shares of its common stock at a carrying value of $19,000 as a consideration to commitment initially granted to a lender in fiscal 2019. No gains or losses were recognized upon issuance of the shares.
Four and three of the Company's customers accounted for approximately 94% and 94% of its revenues during fiscal 2023 and 2022, respective
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