Results of Operations

For the Three Months Ended November 30, 2023 and 2022

Revenues

For the three months ended November 30, 2023, and 2022, the Company had revenues of $1,119,053 and $1,455,742, respectively. The decrease is attributable to the expiration of a client agreement started in November of 2021 that was accrued over twelve months ending October of 2022, which represented $469,697 of revenue in the previous period ended November 30, 2022. The revenue in the current quarter did increase 6.2% as compared to the previous quarter ended August 31, 2023, which the majority of that increase is due to sales in the Company’s PayPlan product line. Cost of sales was $827,086, down from $1,031,441 in the previous year, which is in proportion to the decrease in revenue.

Operating Expenses

Operating expenses for the three-month period ending on November 30, 2023, were $776,059, down from $1,170,856 in the prior year. This reduction was due to lower advertising and promotion expenses, which decreased from $66,246 to $37,827. Salaries and wages also saw a notable reduction from $778,307 to $451,250, and general and administrative expenses decreased from $224,668 to $129,072, reflecting the Company’s efforts to streamline operations and reduce overhead costs. Professional services expenses increased to $157,910 from $101,635, due to an increase in legal expenses. The net effect was a decrease in the operating loss for the period ending November 30, 2023, of $262,463 compared to the period ended November 30, 2022.

Net Loss

For the three months ended November 30, 2023, and 2022, we had Net (Loss) of $(1,022,569) and $(990,242), respectively. The increased net loss was influenced by higher interest expenses, which rose to $509,369 from $187,889, due to increased borrowings to support business operations, and offset by a reduction in operating expenses.

Assets and Liabilities

As of November 30, 2023, total assets were $2,372,218, down from $2,469,268 as of August 31, 2023. The decrease in assets was primarily due to a reduction in cash and cash equivalents, which declined to $87,292 from $144,171. Accounts receivable increased to $239,358 from $174,520, reflecting extended credit terms to customers.

Total current liabilities as of November 30, 2023, decreased to $6,038,141 from $6,264,834 as of August 31, 2023. The majority of the decrease is attributable to a payable associate with the acquisition of Helix House of $950,000, which was converted to equity. The decrease was offset by an increase of $478,738 in accounts payable and accrued liabilities. The contingent liability is $2,877,071 as of November 30, 2023.

Total liabilities were $8,642,773 as of November 30, 2023, slightly down from $8,707,254 as of August 31, 2023. This decrease was mainly due to a reduction in accounts payable and accrued liabilities. The Company continues to manage its liabilities carefully to maintain financial stability.

Liquidity and Capital Resources

Cash used by operating activities

The Company’s net cash from operating activities was $(266,403) for the three months ended November 30, 2023, compared to $(1,038,397) for the three months ended November 30, 2022. The change is a result of decreases in depreciation and amortization, changes in fair value of the derivative liability, and decreases in deferred revenue. These amounts were offset by an increase in the amortization of debt discount, unrealized change in fair value investments, increases in accounts payable and accrued liabilities, and stock-based compensation.

Cash provided by investing activities

Net cash from investing activities was $22,970 for the three-month period ended November 30, 2023, as compared to net cash of $67,330 for the same period the previous year ended November 30, 2022. The majority of the decrease in net cash from investing activities is due to the small business loans being fully collected that were provided by Business Warrior Funding and no new loans being issued.

Cash provided by financing activities

Net cash from financing activities decreased to $186,553 as of November 30, 2023, as compared to $763,897 for the same period in 2022. The decrease was due to a decrease of proceeds from the issuance of Common Stock, but offset from the proceeds from a line of credit.

We currently do not have sufficient capital to fund our cash needs for the next 12 months. We intend to rely on financing from convertible debt, promissory notes, and sale of stock to fund our operations.

Going concern

The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern for a period of one year from the issuance of these financial statements. For the three months ended, the Company had $1,119,053 in revenues, a net loss of $1,022,568, and had net cash used in operations of $266,402. Additionally, as of November 30, 2023, the Company had a working capital deficit, stockholders’ deficit, and accumulated deficit of $5,604,299, $6,279,553, and $17,773,200, respectively. It is management’s opinion that these conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date of the issuance of these financial statements.

The financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of this uncertainty.

Successful integration of the Company’s recent business acquisitions and, ultimately, the attainment of profitable operations are dependent upon future events, and ultimately achieving a level of sales adequate to support the Company’s cost structure. However, there can be no assurances that the Company will be able to secure additional equity investments or achieve an adequate sales level.